USC Law - Commercial Law Review (Transportation Law) 2015-2016

Common Carrier

Article 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.

CONTRACT TO CARRY vs CONTRACT OF CARRIAGE

Contract to carry is to carry at some future time; contract of carriage refers to anytime you would want
to avail of the services of the carrier.
Contract to carry is a consensual contract, while a contract of carriage is a real contract. The party must
have actually used the carrier, once boarded the carrier has the obligation to transport the passenger
to its destination.

Example: Nag sabot mo daan nga maka provide ka niya og sakyanan nga maka karon umaabot na
Sabado. Unsay tawag nato ana? Humana mag sabot ang operator sa bus og ako nga karong
sabado naa miy adtoon. Naka reserve nako og sakyanan niya. Available na, nag sabot namiy pila
bayad. Ok na! Unsa man tawag ana? It is contract to carry it is at some future time. We already
made an agreement on the date, time, place and compensation; there is already a perfected
contract to carry. It is therefore a consensual contract.

Example: Pagka sabado, we already boarded the bus. What do you call that? Contract of carriage,
not until the carrier is being used we cant say that its a contract of carriage. You have to actually
occupy a space in the carrier. No formalities required but it is a real contract NOT UNTIL YOU
WILL USE THE CARRIER THEN IT CANNOT BE TRULY SAID THAT THE CARRIER HAS
ALREADY ASSUMED THE OBLIGATION TO TRANSPORT THE PASSENGER.

When does the contract of carriage begin?

Land Transportation

San Diego v Transit MV, the moment the person places his foot on the stepping board, he is
already a passenger.

Dagwa Transport v CA, by stepping and standing on the platform of the bus the person is
considered to be a passenger.

Water Transportation

Apply by analogy the abovementioned principle, usually by stepping on a gangplank.

When does the contract of carriage end?

La Mayorca vs CA, the contract terminates when the passenger has safely alighted from the
carrier and until such time he/she has a reasonable opportunity to leave the premises of the carrier.
Reasonable time is to be determined on a case to case basis. The person is still considered a
passenger despite the fact that he/she has already alighted from the carrier so long as his presence
within the premises of, or near the, carrier is reasonable.
Aboitiz Shipping Corp., a person is still considered a passenger of the vessel after he/she has
alighted from the conveyance (gangplank) safely and has had reasonable opportunity to leave the
premises of the carrier.
Philippine Airlines vs CA, still a passenger after the latter has reached its destination, safely
alighted from the carrier and has reasonable opportunity to leave the premises of the carrier.
As long as considered as passenger pa ka, liable gihapon ang common carrier for breach of
contract of carriage.

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Obligations of the Carrier

Article 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734,
1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers
is further set forth in articles 1755 and 1756.

The law says extraordinary diligence because the lives of the passengers are at stake; therefore
common carrier is bound to observe such kind of diligence. It cannot be bargained away by stipulating it
to something which is less than extraordinary diligence.

Safety of Passengers

Article 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all
the circumstances.

Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been
at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755.

Stated otherwise, common carriers are bound to observe extra-ordinary diligence. It is just a reiteration
of Article 1733.

As can be gleaned from the said provision of the law, if the plaintiff or passenger/shipper alleges
negligence, it will give rise to the presumption that the common carrier was at fault at the time of the
injury or damage to the passenger or cargo or both during the course of the transportation or during the
existence of the contract of carriage. The presumption will take the place of the evidence of negligence.
Although it dispenses with the proof of negligence the plaintiff still has to prove the existence of the
contract of carriage otherwise the presumption of negligence will not apply under Article 1756. The
plaintiff also has to prove the injury sustained or the fact of death or the damage caused to the goods
shipped by the common carrier. Once those instances are proved the presumption of negligence will
set in. The common carrier in order to negate liability must establish that it exercise extra-ordinary
diligence.

Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence
or willful acts of the former's employees, although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of
a good father of a family in the selection and supervision of their employees.

In Maranan vs. Perez a passenger who was stabbed by a taxi driver, the mother of the passenger filed
an action against the common carrier (Culpa Contractual), the latter was held liable for the death of the
passenger for violation or breach of contract of carriage. Applying Article 1759 it is not a defense for the
common carrier that it exercised the diligence of a good father of a family in the selection and
supervision of their employees. So, even if the employee acted beyond the scope of authority or acted
in violation of the order, common carrier is still liable.
In a scenario mentioned above, the injured party can also file a criminal action against the driver. The
latter is also civilly liable by reason of the crime he/she committed (civil liability ex delicto), it is different

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from the civil liability of the carrier. There is a whale of difference between civil liability arising from
crime and civil liability for breach of contract of carriage or culpa contractual.

Article 1760. The common carriers responsibility prescribed in the preceding article cannot be
eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or
otherwise.

The mere fact that there is a posting of notices or through statements on the ticket limiting or
eliminating the common carriers liability under Article 1759 will not exempt the latter. The word
otherwise means any manifestation made by the carrier to exempt liability (same as etc.).

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
willful acts or negligence of other passengers or of strangers, if the common carriers employees
through the exercise of the diligence of a good father of a family could have prevented or stopped the
act or omission.

The said provision has a qualification. The common carrier cannot be held liable for the injury caused
by a co-passenger or stranger against another passenger if the employees of the common carrier
through the exercise of the diligence of a good father of a family could have prevented or stopped the
act or omission.
However, if the employees of the carrier or the carrier itself did nothing to prevent or stop the act or
omission that gives rise to injury or death then it follows that the common carrier can be held liable by
applying Article 1763.
Fortune Express Inc. vs. CA, strangers who boarded a bus killed a passenger Atty. Kaurong and
destroyed the bus by burning it. The SC said that the common carrier is liable because it could have
prevented the misfortune had the common carrier exercised diligence by frisking the passengers or any
person before boarding the bus; it could have detected the weapons used by the strangers before
boarding the bus.

Article 1762. The contributory negligence of the passenger does not bar recovery of damages for his
death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the
amount of damages shall be equitably reduced.

In the case of Isaac vs. Amid Transportation, the passengers elbow was hit by another vehicle it was
found out that it was due to the act of the passenger in extending his elbow outside the passenger bus.
That fact alone will not relive the common carrier from liability. Failure to establish extraordinary
diligence, the liability of the carrier will be mitigated on the account of the contributory negligence on the
part of the passenger. Contributory negligence will not bar recovery of damages against the common
carrier for as long as the proximate cause of the case and the negligence is the same. Article 1762, the
contributory negligence of the passenger does not bar recovery of damages for his death or injury, if
the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall
be equitably reduced.

Passengers Carried Gratuitously

Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common carriers
liability for negligence is valid, but not for willful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carriers liability.

How about those peddlers inside the bus (selling ampao), are they passengers?

Yes, they are passengers because the driver allowed them, therefore the carrier is liable just the same.
The purpose which is selling food inside the bus does not matter, because there is consent of the driver,
thus they are passengers of the bus. In the event that there is accident, the common carrier is liable.

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Also those concessionaires (selling food) inside the bus especially if its a long trip, say 8 hours, they
are passengers. The driver knows about them.

How about those people who boarded the carrier (jeepney) but do not pay fare or when
demanded payment refuse to pay?

First, those who boarded the carrier without intention of paying the fare and second, those when
demanded for payment of the fare refuses to pay. They are not passengers. They are not protected by
law because the persons themselves do not comply with their obligation to pay the fare, thus no
protection is afforded to them.

How about those people who secretly climb up on rooftop (with the corn, goats and charcoals)
without intent to pay fare and the driver does know about them being there?

They are not passengers. Thus, when an accident happens such that a person on the rooftop got
dangled by a wire and fell from the bus, he is not a passenger. The driver didnt know he was there,
because he secretly climbed up. When we say passenger, there has to be good faith.

Scenario: A asked to board a pick up (nanghangyo). A did not pay any fare (merely gratuitous). But because
he fell asleep at the back of the pick up, he fell and died. The heirs of A tried to recover from the owner of the
pick up arguing that the latter did not exercise extra ordinary diligence in transporting A.

Answer: the pick up was not a common carrier. It did not offer its services to the public. Extra ordinary diligence
is not required. Only Ordinary diligence.

To hold the common carrier liable one must first determine whether or not one is a passenger or not.

Passengers
Peddlers of ampao who boards the buses in car2x.
When a person boards a wrong bus. (e.g. intends to go to Bogo but boards a bus for Argao)
Katong na saylo sa lugar kay nakatog sa bus

Not Passengers
Those who board the vehicles without the consent of the owner or his agents (stowaways)
Those who employ ninja moves when boarding a bus (e.g. no intention to pay)

Vigilance of goods
Loss, destruction, deterioration of goods.

General rule: the common carrier is presumed to have been at fault or to have acted negligently when the
goods transported are lost, destroyed, or deteriorated. ( even if there is an agreement limiting the liability of the
common carrier in the vigilance of goods)

Exceptions (CC is not liable):

1. Fortuitous events (flood, storm, earthquake, lightning or other natural disasters)

2. Act of the public enemy in war, whether international or civil
3. Act or omission of the shipper or owner of the goods
4. The character of the goods or defects in the packing or in the containers; provided, carrier exercised due
diligence to forestall or prevent the loss.
5. Order or act of competent authority; provided the authority is with power to issue the order. (if the officer
acts without legal process, the common carrier will be held liable.)

Note: the five enumerations above-mentioned are specific only to cargoes/goods. These are not available with
regard to transport of passengers.

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When will the contract of carriage commence with regard to the transport of cargoes?
-the moment the goods are delivered to the carrier and the latter accepts the same for the purpose transport,
the contract of carriage commences.

Ex. If this is the office of the CC; you delivered your goods to it and the CC accepts the same. The contract of
carriage commences. The CC is now bound by the contract of carriage even if the goods are still in the
warehouse and not yet placed inside the vessel.

Article 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the
same are delivered, actually or constructively, by the carrier to the consignee, or to the person who
has a right to receive them, without prejudice to the provisions of article 1738.

Q: How do you prove that you are the owner of the goods?
A: The bill of lading if vessel; airway bill if plane. (such bill is quasi negotiable; it can be proven that youre the
owner of the cargo even without the bill because it is not provided in the law that the should be in writing)

Article 1737. The common carrier's duty to observe extraordinary diligence over the goods remains in
full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or
owner has made use of the right of stoppage in transitu.

So there are actually three instances:

1. Placed in the warehouse of the carrier at the place of destination

2. Temporarily unloaded
3. Stored on board the carrier

Extraordinary diligence is required by law in these 3 instances.

If the agreement was to deliver the goods to cebu. When the goods arrived at the destination, the common
carrier unloaded the same and kept it in its warehouse awaiting pick up by the owner. The warehouse was
gutted by fire and the goods stored inside were burned.

= the contract of carriage remains in force; the obligation to observe extra ordinary diligence remains.

Article 1738. The extraordinary liability of the common carrier continues to be operative even during
the time the goods are stored in a warehouse of the carrier at the place of destination, until the
consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter
to remove them or otherwise dispose of them.

When will the obligation end?

When you have notified about the arrival of the goods and has had reasonable opportunity thereafter to
remove them or dispose of them.

Article 1737. , unless the shipper or owner has made use of the right of stoppage in transitu.

Ex. When the goods from cebu are bound for Manila. And the seller exercises his right to stoppage in transitu
(due to the insolvency of the buyer), the seller would advice the carrier to redeliver the goods back to cebu.
Delivery to Manila= governed by contract of carriage (by the meeting of minds)
Redelivery back to cebu= governed by contract of deposit (by operation of law; if in the course of the
redelivery, the goods were lost, the owner can only recover the declared value of the goods)

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Thus, if the owner exercises the right of stoppage in transitu the common carriers duty to exercise
extraordinary diligence ceases. When the shipper exercises such right the contract of carriage is terminated by
operation of law. The contract of carriage is converted into a contract of deposit.

Remedies of the unpaid seller:

*Right of retention (while still in possession)
*Right of resale (while still in possession)
*Right of stoppage in transitu (seller already parted with the goods)

Article 1739. In order that the common carrier may be exempted from responsibility, the natural
disaster must have been the proximate and only cause of the loss. However, the common carrier must
exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood,
storm or other natural disaster in order that the common carrier may be exempted from liability for the
loss, destruction, or deterioration of the goods. The same duty is incumbent upon the common carrier
in case of an act of the public enemy referred to in article 1734, No. 2.

You are duty-bound to observe diligence before, during or after. Naa gihapon kay positive actin to be done if
you want to be exonerated. Lihok gihapon intawn bisan murag simbahan kadako ang bawd. To prevent or
minimize loss, destruction or deterioration.

Cast all your cares on the Lord and He will sustain you.
Psalms 55:22

FERNANDEZ J, QUIBOD, YAP, COROMINAS, HONCULADA, YNTIG, MOMONGAN, CURAN,

DEVERATURDA, EROJO, ABEJO, GAVIOLA, OTERO