FATHER SATURNINO URIOS UNIVERSITY (3) Act or omission of the shipper or owner of the goods;

COLLEGE OF LAW
(4) The character of the goods or defects in the packing or in the containers;

TRANSPORTATION LAW (5) Order or act of competent public authority.

Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the
goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted
I. PRELIMINARY CONSIDERATIONS
negligently, unless they prove that they observed extraordinary diligence as required in article 1733.
A. Pertinent Laws
1. New Civil Code of the Philippines (Article 1732 – 1766)
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
SECTION 4 delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive
Common Carriers (n) them, without prejudice to the provisions of article 1738.

SUBSECTION 1. General Provisions
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.
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.
SUBSECTION 2. Vigilance Over Goods
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.
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.
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.

Article 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the Article 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall
same is due to any of the following causes only: not free such carrier from responsibility.

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; Article 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the
proximate cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which
(2) Act of the public enemy in war, whether international or civil; however, shall be equitably reduced.
Article 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the
goods, or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to
forestall or lessen the loss.
Article 1743. If through the order of public authority the goods are seized or destroyed, the common carrier is not
responsible, provided said public authority had power to issue the order.
Article 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the
former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall
be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
Article 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to
public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;
(3) That the common carrier need not observe any diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a
family, or of a man of ordinary prudence in the vigilance over the movables transported;
(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;
(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with
grave or irresistible threat, violence or force, is dispensed with or diminished;
(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on
account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the
contract of carriage.
Article 1746. An agreement limiting the common carrier's liability may be annulled by the shipper or owner if the
common carrier refused to carry the goods unless the former agreed to such stipulation.
Article 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the
stipulated or usual route, the contract limiting the common carrier's liability cannot be availed of in case of the
loss, destruction, or deterioration of the goods.
Article 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid.
Article 1749. A stipulation that the common carrier's liability is limited to the value of the goods appearing in the
bill of lading, unless the shipper or owner declares a greater value, is binding.
Article 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss, destruction,
or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and
freely agreed upon.
Article 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to
which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting
the common carrier's liability is reasonable, just and in consonance with public policy.
Article 1752. Even when there is an agreement limiting the liability of the common carrier in the vigilance over
the goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or
deterioration.
Article 1753. The law of the country to which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration.
Article 1754. The provisions of articles 1733 to 1753 shall apply to the passenger's baggage which is not in his
personal custody or in that of his employee. As to other baggage, the rules in articles 1998 and 2000 to 2003
concerning the responsibility of hotel-keepers shall be applicable.
SUBSECTION 3. 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 Article 1765. The Public Service Commission may, on its own motion or on petition of any interested party, after
or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in due hearing, cancel the certificate of public convenience granted to any common carrier that repeatedly fails to
articles 1733 and 1755. comply with his or its duty to observe extraordinary diligence as prescribed in this Section.

Article 1757. The responsibility of a common carrier for the safety of passengers as required in articles 1733 and
1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or
otherwise.
Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for
negligence is valid, but not for wilful acts or gross negligence.
Article 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be
governed by the Code of Commerce and by special laws.
2. Code of Commerce (Sections 343 – 379, 573 – 736, 806 – 869)
ARTICLE 349. A contract of transportation by land or water ways of any kind shall be considered commercial:

The reduction of fare does not justify any limitation of the common carrier's liability. 1. When it has for its object merchandise or any article of commerce.

Article 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or 2. When, whatever its object may be, the carrier is a merchant or is habitually engaged in
wilful acts of the former's employees, although such employees may have acted beyond the scope of their transportation for the public.
authority or in violation of the orders of the common carriers.
ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutually demand that a bill of
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good lading be made, stating:
father of a family in the selection and supervision of their employees.
1. The name, surname and residence of the shipper.
Article 1760. The common carrier's 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.
2. The name, surname and residence of the carrier.

Article 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.
3. The name, surname and residence of the person to whom or to whose order the goods are to be
sent or whether they are to be delivered to the bearer of said bill.
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
4. The description of the goods, with a statement of their kind, of their weight, and of the external
be equitably reduced.
marks or signs of the packages in which they are contained.

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or
5. The cost of transportation.
negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act or omission.
6. The date on which shipment is made.
SUBSECTION 4. Common Provisions
7. The place of delivery to the carrier.
Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this
Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of 8. The place and the time at which delivery to the consignee shall be made.
contract by a common carrier.
 9. The indemnity to be paid by the carrier in case of delay, if there should be any agreement on this
matter.
ARTICLE 351. In transportation made by railroads or other enterprises subject to regulation rate and time
schedules, it shall be sufficient for the bills of lading or the declaration of shipment furnished by the shipper to
refer, with respect to the cost, time and special conditions of the carriage, to the schedules and regulations the
application of which he requests; and if the shipper does not determine the schedule, the carrier must apply the
rate of those which appear to be the lowest, with the conditions inherent thereto, always including a statement or
reference to in the bill of lading which he delivers to the shipper.
ARTICLE 352. The bills of lading, or tickets in cases of transportation of passengers, may be diverse, some for
persons and others for baggage; but all of them shall bear the name of the carrier, the date of shipment, the
points of departure and arrival, the cost, and, with respect to the baggage, the number and weight of the
packages, with such other manifestations which may be considered necessary for their easy identification.
ARTICLE 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of
lading, by the contents of which the disputes which may arise regarding their execution and performance shall be
decided, no exceptions being admissible other than those of falsity and material error in the drafting.
After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him,
and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall
be considered cancelled, unless in the same act the claim which the parties may wish to reserve be reduced to
writing, with the exception of that provided for in Article 366.
In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier,
because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt
producing the same effects as the return of the bill of lading.
ARTICLE 354. In the absence of a bill of lading, disputes shall be determined by the legal proofs which the
parties may present in support of their respective claims, according to the general provisions established in this
Code for commercial contracts.
ARTICLE 355. The responsibility of the carrier shall commence from the moment he receives the merchandise,
personally or through a person charged for the purpose, at the place indicated for receiving them.
ARTICLE 356. Carriers may refuse packages which appear unfit for transportation; and if the carriage is to be
made by railway, and the shipment is insisted upon, the company shall transport them, being exempt from all
responsibility if its objections, is made to appear in the bill of lading.
ARTICLE 357. If by reason of well-founded suspicion of falsity in the declaration as to the contents of a
package the carrier should decide to examine it, he shall proceed with his investigation in the presence of
witnesses, with the shipper or consignee in attendance.
If the shipper or consignee who has to be cited does not attend, the examination shall be made before a notary,
who shall prepare a memorandum of the result of the investigation, for such purposes as may be proper.
If the declaration of the shipper should be true, the expense occasioned by the examination and that of carefully
repacking the packages shall be for the account of the carrier and in a contrary case for the account of the
shipper.
ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall be bound to forward them
in the first shipment of the same or similar goods which he may make point where he must deliver them; and
should he not do so, the damages caused by the delay should be for his account.
ARTICLE 359. If there is an agreement between the shipper and the carrier as to the road over which the
conveyance is to be made, the carrier may not change the route, unless it be by reason of force majeure; and
should he do so without this cause, he shall be liable for all the losses which the goods he transports may suffer
from any other cause, beside paying the sum which may have been stipulated for such case.
When on account of said cause of force majeure, the carrier had to take another route which produced an
increase in transportation charges, he shall be reimbursed for such increase upon formal proof thereof.
ARTICLE 360. The shipper, without changing the place where the delivery is to be made, may change the
consignment of the goods which he delivered to the carrier, provided that at the time of ordering the change of
consignee the bill of lading signed by the carrier, if one has been issued, be returned to him, in exchange for
another wherein the novation of the contract appears.
The expenses which this change of consignment occasions shall be for the account of the shipper.
ARTICLE 361. [The merchandise shall be transported at the risk and venture of the shipper, if the contrary has
not been expressly stipulated.
As a consequence, all the losses and deteriorations which the goods may suffer during the transportation by
reason of fortuitous event, force majeure, or the inherent nature and defect of the goods, shall be for the account
and risk of the shipper. cdta
Proof of these accidents is incumbent upon the carrier.]
ARTICLE 362. Nevertheless, the carrier shall be liable for the losses and damages resulting from the causes
mentioned in the preceding article if it is proved, as against him, that they arose through his negligence or by
reason of his having failed to take the precautions which usage has established among careful persons, unless
the shipper has committed fraud in the bill of lading, representing the goods to be of a kind or quality different
from what they really were.
If, notwithstanding the precautions referred to in this article, the goods transported run the risk of being lost, on
account of their nature or by reason of unavoidable accident, there being no time for their owners to dispose of
them, the carrier may proceed to sell them, placing them for this purpose at the disposal of the judicial authority
or of the officials designated by special provisions.
ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be
obliged to deliver the goods shipped in the same condition in which, according to the bill of lading, they were
found at the time they were received, without any damage or impairment, and failing to do so, to pay the value
which those not delivered may have at the point and at the time at which their delivery should have been made.
If those not delivered form part of the goods transported, the consignee may refuse to receive the latter, when he
proves that he cannot make use of them independently of the others.
ARTICLE 364. If the effect of the damage referred to in Article 361 is merely a diminution in the value of the
goods, the obligation of the carrier shall be reduced to the payment of the amount which, in the judgment of
experts, constitutes such difference in value.
ARTICLE 365. If, in consequence of the damage, the goods are rendered useless for sale and consumption for
the purposes for which they are properly destined, the consignee shall not be bound to receive them, and he may
have them in the hands of the carrier, demanding of the latter their value at the current price on that day.
If among the damaged goods there should be some pieces in good condition and without any defect, the
foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those
which are sound, this segregation to be made by distinct and separate pieces and without dividing a single
object, unless the consignee proves the impossibility of conveniently making use of them in this form.
The same rule shall be applied to merchandise in bales or packages, separating those parcels which appear
sound.
ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise, the claim against the
carrier for damage or average be found therein upon opening the packages, may be made, provided that the
indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of
such packages, in which case the claim shall be admitted only at the time of receipt.
After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall be
admitted against the carrier with regard to the condition in which the goods transported were delivered.
ARTICLE 367. If doubts and disputes should arise between the consignee and the carrier with respect to the
condition of the goods transported at the time their delivery to the former is made, the goods shall be examined
by experts appointed by the parties, and, in case of disagreement, by a third one appointed by the judicial
authority, the results to be reduced to writing; and if the interested parties should not agree with the expert
opinion and they do not settle their differences, the merchandise shall be deposited in a safe warehouse by order
of the judicial authority, and they shall exercise their rights in the manner that may be proper.
ARTICLE 368. The carrier must deliver to the consignee, without any delay or obstruction, the goods which he
may have received, by the mere fact of being named in the bill of lading to receive them; and if he does not do
so, he shall be liable for the damages which may be caused thereby.
ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill of lading, or if he refuses
to pay the transportation charges and expenses, or if he refuses to receive the goods, the municipal judge, where
there is none of the first instance, shall provide for their deposit at the disposal of the shipper, this deposit
producing all the effects of delivery without prejudice to third parties with a better right.
ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within such time, and,
for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither the shipper nor the
consignee being entitled to anything else.
If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier shall be
liable for the damages which the delay may have caused.
ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding articles, the
consignee may leave the goods transported in the hands of the former, advising him thereof in writing before
their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the goods as if they had been lost or
mislaid.
If the abandonment is not made, the indemnification for losses and damages by reason of the delay cannot
exceed the current price which the goods transported would have had on the day and at the place in which they
should have been delivered; this same rule is to be observed in all other cases in which this indemnity may be
due.
ARTICLE 372. The value of the goods which the carrier must pay in cases if loss or misplacement shall be
determined in accordance with that declared in the bill of lading, the shipper not being allowed to present proof
that among the goods declared therein there were articles of greater value and money.
Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation shall be
especially bound in favor of the shipper, although with respect to railroads said liability shall be subordinated to
the provisions of the laws of concession with respect to the property, and to what this Code established as to the
manner and form of effecting seizures and attachments against said companies.
ARTICLE 373. The carrier who makes the delivery of the merchandise to the consignee by virtue of combined
agreements or services with other carriers shall assume the obligations of those who preceded him in the
conveyance, reserving his right to proceed against the latter if he was not the party directly responsible for the
fault which gave rise to the claim of the shipper or consignee.
The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded him in
the conveyance.
The shipper and the consignee shall have an immediate right of action against the carrier who executed the
transportation contract, or against the other carriers who may have received the goods transported without
reservation.
However, the reservation made by the latter shall not relieve them from the responsibilities which they may have
incurred by their own acts.
ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of the expenses
and transportation charges of the goods they receive after the lapse of twenty-four hours following their delivery;
and in case of delay in this payment, the carrier may demand the judicial sale of the goods transported in an
amount necessary to cover the cost of transportation and the expenses incurred.
ARTICLE 375. The goods transported shall be especially bound to answer for the cost of transportation and for
the expenses and fees incurred for them during their conveyance and until the moment of their delivery.
This special right shall prescribe eight days after the delivery has been made, and once prescribed, the carrier
shall have no other action than that corresponding to him as an ordinary creditor.
ARTICLE 376. The preference of the carrier to the payment of what is owed him for the transportation and
expenses of the goods delivered to the consignee shall not be cut off by the bankruptcy of the latter, provided it is
claimed within the eight days mentioned in the preceding article.
ARTICLE 377. The carrier shall be liable for all the consequences which may arise from his failure to comply
with the formalities prescribed by the laws and regulations of the public administration, during the whole course of
the trip and upon arrival at the point of destination, except when his failure arises from having been led into error
by falsehood on the part of the shipper in the declaration of the merchandise. If the carrier has acted by virtue of
a formal order of the shipper or consignee of the merchandise, both shall become responsible.
ARTICLE 378. Agents for transportation shall be obliged to keep a special registry, with the formalities required
by Article 36, in which all the goods the transportation of which is undertaken shall be entered in consecutive
order of number and dates, with a statement of the circumstances required in Article 350 and others following for
the respective bills of lading.
ARTICLE 379. The provisions contained in Articles 349 and following shall be understood as equally applicable
to those who, although they do not personally effect the transportation of the merchandise, contract to do so
through others, either as contractors for a particular and definite operation, or as agents for transportations and
conveyances.
In either case they shall be subrogated in the place of the carriers themselves, with respect to the obligations and
responsibility of the latter, as well as with regard to their rights.
MARITIME COMMERCE
TITLE ONE
VESSELS
ARTICLE 573. Merchant vessels constitute property which may be acquired and transferred by any of the means
recognized by law. The acquisition of a vessel must appear in a written instrument, which shall not produce any
effect with respect to third persons if not inscribed in the registry of vessels.
The ownership of a vessel shall likewise be acquired by possession in good faith, continued for three years, with
a just title duly recorded.
In the absence of any of these requisites, continuous possession for ten years shall be necessary in order to
acquire ownership.
A captain may not acquire by prescription the vessel of which he is in command.
ARTICLE 574. Builders of vessels may employ the materials and follow, with respect to their construction and
rigging, the systems most suitable to their interests. Ship owners and seamen shall be subject to what the laws
and regulations of the public administration on navigation, customs, health, safety of vessels, and other similar
matters.
ARTICLE 575. Co-owners of vessels shall have the right of repurchase and redemption in sales made to
strangers, but they may exercise the same only within the nine days following the inscription of the sale in the
registry, and by depositing the price at the same time.
ARTICLE 576. In the sale of a vessel it shall always be understood as included the rigging, masts, stores and
engine of a streamer appurtenant thereto, which at the time belongs to the vendor.
The arms, munitions of war, provisions and fuel shall not be considered as included in the sale.
The vendor shall be under the obligation to deliver to the purchaser a certified copy of the record sheet of the
vessel in the registry up to the date of the sale.
ARTICLE 577. If the alienation of the vessel should be made while it is on a voyage, the freightage which it earns
from the time it receives its last cargo shall pertain entirely to the purchaser, and the payment of the crew and
other persons who make up its complement for the same voyage shall be for his account.
If the sale is made after the vessel has arrived at the port of its destination, the freightage shall pertain to the
vendor, and the payment of the crew and other individuals who make up its complement shall be for his account,
unless the contrary is stipulated in either case.
ARTICLE 578. If the vessel being on a voyage or in a foreign port, its owner or owners should voluntarily alienate
it, either to Filipinos or to foreigners domiciled in the capital or in a port of another country, the bill of sale shall be
executed before the consul of the Republic of the Philippines at the port where it terminates its voyage and said
instrument shall produce no effect with respect to third persons if it is not inscribed in the registry of the
consulate. The consul shall immediately forward a true copy of the instrument of purchase and sale of the vessel
to the registry of vessels of the port where said vessel is inscribed and registered.
In every case the alienation of the vessel must be made to appear with a statement of whether the vendor
receives its price in whole or in part, or whether he preserves in whole or in part any claim on said vessel. In case
the sale is made to a Filipino, this fact shall be stated in the certificate of navigation.
When a vessel, being on a voyage, shall be rendered useless for navigation, the captain shall apply to the
competent judge on court of the port of arrival, should it be in the Philippines; and should it be in a foreign
country, to the consul of the Republic of the Philippines, should there be one, or, where there is none, to the
judge or court or to the local authority; and the consul, or the judge or court, shall order an examination of the
vessel to be made.
If the consignee or the insurer should reside at said port, or should have representatives there, they must be
cited in order that they may take part in the proceedings on behalf of whoever may be concerned.
ARTICLE 579. After the damage to the vessel and the impossibility of her being repaired, in order to continue the
voyage had been shown, its sale at public auction shall be ordered, subject to the following rules:
1. The hull of the vessel, its rigging, engines, stores, and other articles shall be appraised, after making
an inventory, said proceedings to be brought to the notice of the persons who may wish to take part in
the auction.
2. The order or decree ordering the auction to be held shall be posted in the usual places, an
announcement thereof to be inserted in the Official Gazette and in two of the newspapers of the largest
circulation of the port where the auction is to be held, should there be any.
The period which may be fixed for the auction shall not be less than twenty days.
3. These announcements shall be repeated every ten days, and their publication shall be made to
appear in the records.
4. The auction shall be held on the day fixed, with the formalities prescribed in the common law for
judicial sales.
5. If the sale should take place while the vessel is in a foreign country, the special provisions governing
such cases shall be observed.
ARTICLE 580. In all judicial sales of any vessel for the payment of creditors, the following shall have preference
in the order stated 2
1. The credit in favor of the public treasury proven by means of an official certificate of competent
authority.
2. The judicial costs of the proceedings, according to an appraisement approved by the judge or court.
3. The pilotage charges, tonnage dues, and the other sea or port charges, proven by means of proper
certificates of the officers intrusted with the collection thereof.
 4. The salaries of the depositaries and keepers of the vessel and any other expenses for its
preservation from the time of arrival at the port until the sale, which appear to have been paid or be due
by virtue of an account verified and approved by the judge or court.
5. The rent of the warehouse where the rigging and stores of the vessel have been taken care of,
according to contract.
6. The salaries due the captain and crew during its last voyage, which shall be verified by means of the
liquidation to be made in view of the lists and of the books of account of the vessel, approved by the
chief of the Bureau of Merchant Marine, where there is one, and in his absence by the consul or judge
or court.
7. The reimbursement for the goods of the freight which the captain may have sold in order to repair
the vessel, provided that the sale has been ordered through a judicial proceedings held with the
formalities required in such cases, and recorded in the certificate of registry of the vessel.
8. The part of the price which has not been paid to the said vendor, the unpaid credits for materials and
labor in the construction of the vessel, when it has not navigated, and those arising from the repair and
equipment of the vessels and from its provisioning with victuals and fuel during the last voyage.
In order that the credits provided for in this subdivision may enjoy this preference, they must appear by
contracts recorded in the registry of vessels, or if they were contracted for the vessel while on a voyage
and said vessel has not returned to the port where it is registered, they must be made with the
authorization required for such cases and annotated in the certificate of registration of the vessel.
9. The amount borrowed on bottomry on the hull, keel, tackle, and stores of the vessel before its
departure, proven by means of the contract executed according to law and recorded in the registry of
vessels; those borrowed during the voyage with the authorization mentioned in the preceding
subdivision, satisfying the same requisites; and the insurance premium, proven by the insurance policy
or a certificate taken from the books of the broker.
10. The indemnity due the shipper for the value of the goods shipped which were not delivered to the
consignees, or for averages suffered for which the vessel is liable, provided that either appear in a
judicial or arbitration decision.
ARTICLE 581. If the proceeds of the sale should not be sufficient to pay all the creditors included in one number
or grade, the residue shall be divided among them pro rata.
ARTICLE 582. After the bill of the judicial sale at public auction has been executed and inscribed in the registry of
vessels, all the other liabilities of the vessel in favor of the creditors shall be considered extinguished.
But if the sale should have been voluntary and should have been made while the vessel was on a voyage, the
creditors shall preserve their rights against the vessel until it returns to the port of her registry, and three months
after the inscription of the sale in the registry of vessel or the arrival.
ARTICLE 583. If while on a voyage the captain should find it necessary to contract one or more of the obligations
mentioned in subdivisions 8 and 9 of Article 580, he shall apply to the judge or court if he is in Philippine territory,
and otherwise to the consul of the Republic of the Philippines, should there be one, and, in his absence, to the
judge or court or proper local authority, presenting the certificate of the registration sheet treated of in Article 612
and the instruments proving the obligation contracted.
The judge or court, the consul, or the local authority, as the case may be, in view of the result of the proceedings
instituted, shall make a temporary memorandum of their result in the certificate, in order that it may be recorded
in the registry when the vessel returns to the port of its registry, or so that it can be admitted as a legal and
preferred obligation in case of sale before its return, by reason of the sale of the vessel on account of a
declaration of unseaworthiness.
The omission of this formality shall make the captain personally liable for the credits prejudiced on his account.
ARTICLE 584. The vessels subject to liability for the credits mentioned in Article 580 may be attached and
judicially sold in the manner prescribed in Article 579, in the port in which they may be found, at the instance of
any of the creditors; but if they should be loaded and ready to sail, the attachment may not be effected except for
debts contracted to prepare and provision the vessel for the same voyage, and even then the attachment shall be
dissolved if any person interested in its sailing should give a bond for the return of the vessel within the period
fixed in the certificate of navigation binding himself to pay the indebtedness insofar as it may be legal, should it
fail to do so, even if this failure be due to fortuitous event.
For debts of any other kind whatsoever not comprised within the said Article 580, the vessel may be attached
only in the port of her registry.
ARTICLE 585. For all purposes of law not modified or restricted by the provisions of this Code, vessels shall
continue to be considered as personal property.
TITLE TWO
PERSONS WHO TAKE PART IN MARITIME COMMERCE
SECTION ONE
SHIPOWNERS AND SHIP AGENTS
ARTICLE 586. The ship owner and the ship agent shall be civilly liable for the acts of the captain and for the
obligations contracted by the latter to repair, equip, and provision the vessel, provided the creditor proves that the
amount claimed was invested for the benefit of the same.
By ship agent is understood the person entrusted with provisioning or representing the vessel in the port in which
it may be found.
ARTICLE 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which may
arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt
himself therefrom by abandoning the vessel with all her equipments and the freight it may have earned during the
voyage.
ARTICLE 588. Neither the shipowner nor the ship agent shall be liable for the obligations contracted by the
captain, if the latter exceeds the powers and privileges pertaining to him by reason of his position or conferred
upon him by the former.
Nevertheless, if the amounts claimed were invested for the benefit of the vessel, the responsibility therefor shall
devolve upon its owner or agent.
ARTICLE 589. If two or more persons should be part owners of a merchant vessel, a partnership shall be
presumed as established by the co-owners.
This partnership shall be governed by the resolutions of the majority of the members.
If the part owners should not be more than two, the disagreement of views, if any, shall be decided by the vote of
the member having the largest interest. If the interests are equal, it should be decided by lot.
The person having the smallest share in the ownership shall have one vote; and proportionately the other part
owners as many votes as they have parts equal to the smallest one.
A vessel may not be detained, attached or levied upon in execution in its entirety, for the private debts of a part
owner, but the proceedings shall be limited to the interest which the debtor may have in the vessel, without
interfering with the navigation.
ARTICLE 590. The co-owners of a vessel shall be civilly liable in the proportion of their interests in the common
fund, for the results of the acts of the captain, referred to in Article 587.
Each co-owner may exempt himself from this liability by the abandonment, before a notary, of the part of the
vessel belonging to him.
ARTICLE 591. All the part owners shall be liable, in proportion to their respective ownership, for the expenses for
repairing the vessel, and for other expenses which are incurred by virtue of a resolution of the majority.
They shall likewise be liable in the same proportion for the expenses for the maintenance, equipment, and
provisioning of the vessel, necessary for navigation.
ARTICLE 592. The resolution of the majority with regard to the repair, equipment, and provisioning of the vessel
in the port of departure shall bind the minority, unless the minority members renounce their interests, which must
be acquired by the other co-owners, after a judicial appraisement of the value of the portion or portions assigned.
The resolutions of the majority relating to the dissolution of the partnership and sale of the vessel shall also be
binding on the minority.
The sale of the vessel must be made at public auction, subject to the provisions of the law of civil procedure,
unless the co-owners unanimously agree otherwise, saying always the right of repurchase and redemption
provided for in Article 575.
ARTICLE 593. The owners of a vessel shall have preference in her charter over other persons, under the same
conditions and price. If two or more of them should claim this right, the one having the greater interest shall be
preferred; and should they have equal interests, the matter shall be decided by lot.
ARTICLE 594. The co-owners shall elect the manager who is to represent them in the capacity of ship agent.
The appointment of director or ship agent shall be revocable at the will of the members.
ARTICLE 595. The ship agent, whether he is at the same time the owner of the vessel, or a manager for an
owner or for an association of co-owners, must have the capacity to trade and must be recorded in the
merchant's registry of the province.
The ship agent shall represent the ownership of the vessel, and may, in his own name and in such capacity, take
judicial and extrajudicial steps in matters relating to commerce.
ARTICLE 596. The ship agent may discharge the duties of captain of the vessel, subject in every case to the
provision of Article 609.
If two or more co-owners apply for the position of captain, the disagreement shall be decided by a vote of the
members; and if the vote should result in a tie, it shall be decided in favor of the co-owner having the larger
interest in the vessel.
If the interests of the applicants should be equal, and there should be a tie, the matter shall be decided by lot.
ARTICLE 597. The ship agent shall designate and come to terms with the captain, and shall contract in the name
of the owners, who shall be bound in all that refer to repairs, details of equipment, armament, provisions of food
and fuel, and freight of the vessel, and, in general, in all that relate to the requirements of navigation.
ARTICLE 598. The ship agent may not order a new voyage, or make contracts for a new charter, or insure the
vessel, without the authorization of its owner or resolution of the majority of the co-owners, unless these powers
were granted him in the certificate of his appointment.
If he insures the vessel without authorization therefore, he shall be subsidiary liable for the solvency of the
insurer.
ARTICLE 599. The ship agent managing for an association shall render to his associates an account of the
results of each voyage of the vessel, without prejudice to always having the books and correspondence relating
to the vessel and to its voyages at their disposal.
ARTICLE 600. After the account of the managing agent has been approved by a relative majority, the co-owners
shall pay the expenses in proportion to their interest, without prejudice to the civil or criminal actions which the
minority may deem fit to institute afterwards.
In order to enforce the payment, the managing agent shall be entitled to an executory action ("accion ejecutiva"),
which shall be instituted by virtue of a resolution of the majority, and without further proceedings than the
acknowledgment of the signatures of the persons who voted for the resolution.
ARTICLE 601. Should there be any profits, the co-owners may demand of the managing agent the amount
corresponding to their interests by means of an executory action ("accion ejecutiva"), without any other requisite
than the acknowledgment of the signatures on the instrument approving the account.
ARTICLE 602. The ship agent shall indemnify the captain for all the expenses he may have incurred with funds
of his own or of others, for the benefit of the vessel.
ARTICLE 603. Before the vessel sets out to sea the ship agent may at his discretion discharge the captain and
members of the crew whose contracts are not for a definite period or voyage, paying them the salaries earned
according to their contracts, and without any indemnity whatsoever, unless there is an express and specific
agreement in respect thereto.
ARTICLE 604. If the captain or any other member of the crew should be discharged during the voyage, they shall
receive their salary until they return to the port where the contract was made, unless there should be just cause
for the discharge, all in accordance with Article 636 and following of this Code.
ARTICLE 605. If the contracts of the captain and members of the crew with the ship agent should be for a
definite period or voyage, they may not be discharged until after the fulfillment of their contracts, except by
reason of insubordination in serious matters, robbery, theft, habitual drunkenness, or damage caused to the
vessel or to its cargo through malice or manifest or proven negligence.
ARTICLE 606. If the captain should be a co-owner of the vessel, he may not be discharged unless the ship agent
returns to him the amount of his interest therein, which, in the absence of agreement between the parties, shall
be appraised by experts appointed in the manner established in the law of civil procedure.
ARTICLE 607. If the captain who is a co-owner should have obtained the command of the vessel by virtue of a
special agreement contained in the articles of association, he may not be deprived of his office except for the
causes mentioned in Article 605.
ARTICLE 608. In case of the voluntary sale of the vessel, all contracts between the ship agent and the captain
shall terminate, reserving to the latter his right to the indemnity which may pertain to him, according to the
agreements made with the ship agent.
They vessel sold shall remain subject to the security of the payment of said indemnity if, after the action against
the vendor has been instituted, the latter is found to be insolvent.
SECTION TWO
CAPTAINS AND MASTERS OF VESSELS
ARTICLE 609. Captains, masters or patrons of vessels must be Filipinos, have legal capacity to contract in
accordance with this code, and prove the skill, capacity, and qualifications necessary to command and direct the
vessel, as established by marine or navigation laws, ordinances, or regulations, and must not be disqualified
according to the same for the discharge of the duties of the position.
If the owner of a vessel desires to be the captain thereof, without having the legal qualifications therefor, he shall
limit himself to the financial administration of the vessel, and shall intrust the navigation to a person possessing
the qualifications required by said ordinances and regulations.
ARTICLE 610. The following powers shall be inherent in the position of captain, master or patron of a vessel:
1. To appoint or make contracts with the crew in the absence of the ship agent, and to propose said
crew, should said agent be present; but the ship agent may not employ any member against the
captain's express refusal.
2. To command the crew and direct the vessel to the port of its destination, in accordance with the
instructions he may have received from the ship agent.
ARTICLE 612. The following obligations shall be inherent in the office of captain:
3. To impose, in accordance with the contracts and with the laws and regulations of the merchant
marine, and when on board the vessel, correctional punishment upon those who fail to comply with his
orders or are wanting in discipline, holding a preliminary hearing on the crimes committed on board the
vessel on the seas, which crimes shall be turned over to the authorities having jurisdiction over the
same at the first port touched.
4. To make contracts for the charter of the vessel in the absence of the ship agent or of its consignee,
acting in accordance with the instructions received and protecting the interests of the owner with
utmost care.
5. To adopt all proper measures to keep the vessel well supplied and equipped, purchasing all that may
be necessary for the purpose, provided there is no time to request instruction from the ship agent.
6. To order, in similar urgent cases while on a voyage, the repairs on the hull and engines of the vessel
and in its rigging and equipment, which are absolutely necessary to enable it to continue and finish its
voyage; but if he should arrive at a point where there is a consignee of the vessel, he shall act in
concurrence with the latter.
ARTICLE 611. In order to comply with the obligations mentioned in the preceding article, the captain, when he
has no funds and does not expect to receive any from the ship agent, shall obtain the same in the successive
order stated below:
1. By requesting said funds from the consignee of the vessel or correspondents of the ship agent.
2. By applying to the consignees of the cargo or to those interested therein.
3. By drawing on the ship agent.
4. By borrowing the amount required by means of a loan on bottomry.
5. By selling a sufficient amount of the cargo to cover the sum absolutely indispensable for the repair of
the vessel and to enable it to continue its voyage.
In these two last cases he must apply to the judicial authority of the port, if in the Philippines, and to the
consul of the Republic of the Philippines if in a foreign country, and where there is none, to the local
authority, proceeding in accordance with the provisions of Article 583, and with the provisions of the
law of civil procedure.
1. To have on board before starting on a voyage a detailed inventory of the hull, engines, rigging,
spare-masts, tackle, and other equipment of the vessel; the royal or the navigation certificate; the roll of
the persons who make up the crew of the vessel, and the contracts entered into with them; the lists of
passengers; the bill of health; the certificate of the registry proving the ownership of the vessel and all
the obligations which encumber the same up to that date; the charter parties or authenticated copies
thereof; the invoices or manifests of the cargo, and the memorandum of the visit or inspection by
experts, should it have been made at the port of departure.
2. To have a copy of this code on board.
3. To have three folioed and stamped books, placing at the beginning of each one a memorandum of
the number of folios it contains, sign
5. To remain constantly on board the vessel with the crew while the cargo is being taken on board and
to carefully watch the stowage thereof; not to consent to the loading of any merchandise or matter of a
dangerous character, such as inflammable or explosive substances, without the precautions which are
recommended for their packing, handling and isolation; not to permit the carriage on deck of any cargo
which by reason of its arrangement, volume, or weight makes the work of the sailors difficult, and which
might endanger the safety of the vessel; and if, on account of the nature of the merchandise, the
special character of the shipment, and principally the favorable season in which it is undertaken,
merchandise may be carried on deck, he must hear the opinion of the officers of the vessel and have
the consent of the shippers and of the ship agent.
6. To demand a pilot at the expense of the vessel whenever required by the navigation, and principally
when he has to enter a port, canal, or river, or has to take a roadstead or anchoring place with which
neither he nor the officers and crew are acquainted.
7. To be on deck on reaching land and to take command on entering and leaving ports, canals,
roadsteads, and rivers, unless there is a pilot on board discharging his duties. He shall not spend the
night away from the vessel except for serious causes or by reason of official business. cdtai
8. To present himself, when making a port in distress, to the maritime authority if in the Philippines and
to the consul of the Republic of the Philippines if in a foreign country, before twenty-four hours have
elapsed, and to make a statement of the name registry, and port of departure of the vessel, of its cargo,
and the cause of arrival which declaration shall be visaed by the authority or the consul, if after
examining the same it is found to be acceptable, giving the captain the proper certificate proving his
arrival in distress and the reasons therefor. In the absence of the maritime authority or of the consul,
the declaration must be made before the local authority.
9. To take the necessary steps before the competent authority in order to record in the certificate of the
vessel in the registry of vessels the obligations which he may contract in accordance with Article 583.
10. To place under good care and custody all the papers and belongings of any members of the crew
who might die on the vessel, drawing up a detailed inventory, in the presence of passengers, or, in their
absence, of members of the crew as witnesses.
11. To conduct himself according to the rules and precepts contained in the instructions of the ship
agent, being liable for all that which he may do in violation thereof.
12. To inform the ship agent from the port at which the vessel arrives, of the reason of his arrival, taking
advantage of the semaphore, telegraph, mail, etc., as the case may be; to notify him of the cargo he
may have received, stating the names and domiciles of the shippers, freightage earned, and amounts
borrowed on bottomry loan; to advise him of his departure, and of any operation and date which may
be of interest to him.
13. To observe the rules with respect to situation, lights and maneuvers in order to avoid collisions.
14. To remain on board, in case the vessel is in danger, until all hope to save it is lost, and before
abandoning it, to hear the officers of the crew, abiding by the decision of the majority; and if the boats
are to be taken to, he shall take with him, before anything else, the books and papers, and then the
articles of most value, being obliged to prove, in case of the loss of the books and papers, that he did
all he could to save them.
15. In case of wreck, to make the proper protest in due form at the first port of arrival, before the
competent authority or the Philippine consul, within twenty-four hours, specifying therein all the
incidents of the wreck, in accordance with subdivision 8 of this article.
16. To comply with the obligations imposed by the laws and regulations on navigation, customs, health,
and others.
ARTICLE 613. A captain who navigates for freight in common or on shares may not make any separate
transaction for his own account; and should he do so, the profit which may accrue shall belong to the other
persons interested, and the losses shall be borne by him exclusively.
ARTICLE 614. A captain who, having made an agreement to make a voyage, fails to perform his undertaking,
without prevented by fortuitous accident or force majeure, shall indemnify for all the losses which he may cause
without prejudice to the criminal penalties which may be proper.
ARTICLE 615. Without the consent of the agent, the captain cannot have himself substituted by another person;
and should he do so, besides being liable for all the acts of the substitute and bound to the indemnities
mentioned in the foregoing articles, the captain as well as the substitute may be discharged by the ship agent.
ARTICLE 616. If the provisions and fuel of the vessel should be consumed before arriving at the port of
destination, the captain shall order, with the consent of the officers of the same, the arrival at the nearest port to
get a supply of either; but if there are persons on board who have provisions of their own, he may force them to
deliver said provision for the common consumption of all those who may be on board, paying the price thereof at
the same time, or at the latest, at the first port reached.
ARTICLE 617. The captain may not contract loans on respondentia secured by the cargo; and should he do so,
the contracts shall be void. Neither may he borrow money on bottomry for his own transactions, except on the
portion of the vessel he owns, provided no money has been previously borrowed on the whole vessel, and there
does not exist any other kind of lien or obligation chargeable against the vessel. If he may do so, he must state
what interest he has in the vessel.
In case of violation of this article, the principal, interest, and costs shall be for the personal account of the captain,
and the ship agent may furthermore discharge him.
ARTICLE 618. The captain shall be civilly liable to the ship agent, and the latter to the third persons who may
have made contracts with the former;
1. For all the damages suffered by the vessel and its cargo by reason of want of skill or negligence on
his part. If a misdemeanor or crime has been committed, he shall be liable in accordance with the
Penal Code.
2. For all the thefts committed by the crew, reserving his right of action against the guilty parties.
 3. For the losses, fines, and confiscations imposed an account of violation of customs, police, health,
and navigation laws and regulations.
4. For the losses and damages caused by mutinies on board the vessel or by reason of faults
committed by the crew in the service and defense of the same, if he does not prove that he made
timely use of all his authority to prevent or avoid them.
5. For those caused by the misuse of the powers and the non-fulfillment of the obligations pertaining to
him in accordance with Articles 610 and 612.
6. For those arising by reason of his going out of his course or taking a course which he should not
have taken without sufficient cause, in the opinion of the officers of the vessel, at a meeting with the
shippers or supercargoes who may be on board.
No exceptions whatsoever shall exempt him from this obligation.
7. For those arising by reason of his voluntarily entering a port other than that of his destination, outside
of the cases or without the formalities referred to in Article 612.
8. For those arising by reason of non-observance of the provisions contained in the regulations on
situation of lights and maneuvers for the purpose of preventing collisions.
ARTICLE 619. The captain shall be liable for the cargo from the time it is delivered to him at the dock or afloat
alongside the at the port of loading, until he delivers it on the shore or on the discharging wharf at the port of
unloading, unless the contrary has been expressly agreed upon.
ARTICLE 620. The captain shall not be liable for the damages caused to the vessel or to the cargo by force
majeure; but he shall always be so for those arising through his own fault, no agreement to the contrary being
valid.
Neither shall he be personally liable for the obligations he may have contracted for the repair, equipment, and
provisioning of the vessel, which shall devolve upon the ship agent, unless the former has expressly bound
himself personally or has signed a bill of exchange or promissory note in his name.
ARTICLE 621. A captain who borrows money on the hull, engine, rigging or tackle of the vessel, or pledges or
sells merchandise or provisions outside of the cases and without the formalities prescribed in this Code, shall be
liable for the principal, interests, and costs, and shall indemnify for the damages he may cause.
He who commits fraud in his accounts shall pay the amount defrauded and shall be subject to the provisions of
the Penal Code.
ARTICLE 622. If while on a voyage the captain should learn of the appearance of privateers or men of war
against his flag, he shall be obliged to make the nearest neutral port, inform his agent or shippers, and await an
occasion to sail under convoy, or until the danger is over or he has received express orders from the ship agent
or the shippers.
ARTICLE 623. If he should be attacked by a privateer, and, after having tried to avoid the encounter and having
resisted the delivery of the effects of the vessel or its cargo, they should be forcibly taken away from him, or he
should be obliged to deliver them, he shall make an entry thereof in his freight book and shall prove the fact
before the competent authority at the first port he touches.
After the force majeure has been proved, he shall be exempted from liability.
ARTICLE 624. A captain whose vessel has gone through a hurricane or who believes that the cargo has suffered
damages or averages, shall make a protest thereon before the competent authority at the first port he touches,
within twenty-four hours following his arrival and shall ratify it within the same period when he arrives at his
destination, immediately proceeding with the proof of the facts, and he may not open the hatches until after this
has been done.
The captain shall proceed in the same manner, if, the vessel having been wrecked; he is saved alone or with part
of his crew, in which case he shall appear before the nearest authority, and make a sworn statement of facts.
The authority or the consul shall verify the said facts receiving sworn statements of the members of the crew and
passengers who may have been saved; and taking such other steps as may assist in arriving at the facts he shall
make a statement of the result of the proceedings in the log book and in that of the sailing mate, and shall deliver
to the captain the original record of the proceedings, stamped and folioed, with a memorandum of the folios,
which he must rubricate, in order that it may be presented to the judge or court of the port of destination.
The statement of the captain shall be accepted if it is in accordance with those of the crew and passengers; if
they disagree, the latter shall be accepted, always saying proof to the contrary.
ARTICLE 625. The captain, under his personal responsibility as soon as he arrives at the port of destination,
should get the necessary permission from the health and customs officers, and perform the other formalities
required by the regulations of the administration, delivering the cargo without any defalcation, to the consignee,
and in a proper case, the vessel, rigging, and freightage to the ship agent.
If by reason of the absence of the consignee or on account of the nonappearance of a legal holder of the bills of
lading, the captain should not know to whom he is to legally make the delivery of the cargo, he shall place it at
the disposal of the proper judge or court or authority, in order that he may determine what is proper with regard to
its deposit, preservation and custody.
SECTION THREE
OFFICERS AND CREW OF VESSELS
ARTICLE 626. In order to be a sailing mate it shall be necessary:
1. To have the qualifications required by the marine or navigation laws or regulations.
2. Not to be disqualified in accordance therewith for the discharge of his duties.
ARTICLE 627. The sailing mate, as the second chief of the vessel, and unless the agent orders otherwise, shall
take the place of the captain in cases of absence, sickness, or death, and shall then assume all his powers,
duties, and responsibilities.
ARTICLE 628. The sailing mate must provide himself with charts of the seas in which he will navigate with the
astronomical tables and instruments for observation which are in use and which are necessary for the discharge
of his duties, being liable for the accidents which may arise by reason of his omission in this regard.
ARTICLE 629. The sailing mate shall particularly and personally keep a book, folioed and stamped on all its
pages, denominated "Binnacle Book" with a memorandum at the beginning stating the number of folios it
contains, signed by the competent authority, and shall enter therein daily the distance, the course travelled, the
variations of the needle, the leeway, the direction and force of the wind, the condition of the atmosphere and of
the sea, the rigging set, the latitude and longitude observed, the number of furnace heated, the steam pressure,
the number of revolutions, and under the title "incidents," the maneuvers made, the meeting with other vessels,
and all the details and incidents which. may occur during the voyage.
ARTICLE 630. In order to change the course and to take the one most convenient for a good voyage of the
vessel, the sailing mate shall come to an agreement with the captain. If the latter should object, the sailing mate
shall state to him the proper observations in the presence of the other officers of the sea. If the captain should
still insist on his negative decision, the sailing mate shall make the proper protest, signed by him and by one
other officer, in the log book, and shall obey the captain, who alone shall be responsible for the consequences of
his decision.
ARTICLE 631. The sailing mate shall be responsible for all the damages caused to the vessel and the cargo by
reason of his negligence or want of skill without prejudice to the criminal liability which may arise, if a felony or
misdemeanor has been committed. aisadc
ARTICLE 632. The following shall be the obligations of the second mate:
1. To watch over the preservation of the hull and rigging of the vessel, and to take charge of
the preservation of the tackle and equipment which make up her outfit, suggesting to the captain the
repairs necessary and the replacement of the goods and implements which are rendered useless and
are lost.
2. To take care that the cargo is well arranged, keeping the vessel always ready for maneuver.
3. To preserve order, discipline, and good service among the crew, requesting the necessary orders
and Instructions of the captain, and giving him prompt information of any occurrence in which the
intervention of his authority may be necessary.
4. To assign to each sailor the work he is to do on board, in accordance with the instruction received
and to see that it is promptly and accurately carried out.
5. To take charge under inventory
4. He shall not make any change in the motor apparatus, or proceed to repair the averages he may
have noticed in the same, or change the normal speed of its movement without the prior authorization
of the captain., to whom, if he should object to their being made, he shall state the proper observations
in the presence of the other engineers or officers; and if, notwithstanding this, the captain should insist
on his objection, the chief engineer shall make the proper protests, entering the same in the engine
book, and shall obey the captain, who, alone shall be responsible for the consequences of his decision.
5. He shall inform the captain of any average which may occur in the motor apparatus, and shall advise
him whenever it may be necessary to stop the engines for some time, or when any other incident
occurs in his department of which the captain should be immediately informed, besides frequently
advising him of the consumption of fuel and lubricating material.
6. He shall keep a book or registry called the "engine book," in which shall be entered all the date
referring to the work of the engines, such as, for example, the number of furnaces heated, the vacuum
in the condenser, the temperature, the degree of saturation of the water in the boilers the consumption
of fuel and lubricating material, and under the heading of "noteworthy occurrences," the averages and
 maladjustments which occur in the engines and boilers, the causes thereof and the means employed to
repair the same likewise, the force and direction of the wind, the rigging set and the speed of the vessel
shall be stated, taking the information from the Binnacle Book.
ARTICLE 633. The second mate shall take command of the vessel in case of the inability or disqualification of
the captain and the sailing mate, assuming in such case their powers and responsibility.
ARTICLE 634. The captain may make up the crew of his vessel with such number of men as he may consider
proper, and in the absence of Filipino sailors, he may take on foreigners residing in the country, the number
thereof not to exceed one-fifth of the crew. If in foreign ports the captain should not find a sufficient number of
Filipino sailors, he may complete the crew with foreigners, with the consent of the consul or marine authorities.
The agreement which the captain may make with the members of the crew and others who go to make up the
complement of the vessel, to which reference is made in Article 612, must be reduced to writing in the account
book, without the intervention of a notary public or clerk of court ("escribano"), signed by the parties thereto and
visaed by the marine authority if they be executed in Philippine territory or by the consuls or consular agents of
the Republic of the Philippines if executed abroad, stating therein all the obligations which each one contracts
and all the rights he acquires said authorities taking care that these obligations and rights are recorded in a clear
and definite manner which give no room for doubts or claims.
The captain shall take care to read to them the articles of this Code which concern them, stating in said
document that they were read.
If the book contains the requisites prescribed in Article 612, and there should not appear any signs of alterations
in its entries, it shall be admitted as evidence in questions which may arise between the captain and the crew
with respect to the agreements contained therein and the amounts paid on account of the same.
Every member of the crew may demand of the captain a copy, signed by the latter, of the agreement and of the
liquidation of his wages, as they appear in the book.
ARTICLE 635. A seaman who has been contracted to serve on a vessel may not rescind his contract or fail to
comply therewith except by reason of a legitimate impediment which may have happened to him.
Neither may he transfer from the service of one vessel to another without obtaining the written permission of the
captain of the vessel on which he may be.
If, without obtaining said permission, the seaman who has signed for one vessel should sign for another one, the
second contract shall be void, and the captain may choose between forcing him to fulfill the service to which he
first bound himself, or at his expense to look for a person to substitute him.
Furthermore, he shall lose the wages earned on his first contract, to the benefit of the vessel for which he had
signed.
A captain who, knowing that a seaman is in the service of another vessel, should have made a new agreement
with him without having required of him the permission referred to in the preceding paragraphs, shall be
subsidiarily responsible to the captain of the vessel to which the seaman first belonged, for that part of the
indemnity, referred to in the third paragraph of this article, which the seaman may not be able to pay.
ARTICLE 636. If there is no fixed period for which a seaman has been contracted he may not be discharged until
the end of the return voyage to the port where he enlisted.
ARTICLE 637. Neither may the captain discharge a seaman during the time of his contract except for just cause,
the following being considered as such:
1. The perpetration of a crime which disturbs order on the vessel.
2. Repeated insubordination, want of discipline, or non-fulfillment of the service.
3. Repeated incapacity and negligence in the fulfillment of the service he should render.
4. Habitual drunkenness.
5. Any occurrence which incapacitates the seaman to perform the work entrusted to him, with the
exception of that provided in Article 644.
6. Desertion.
The captain may, however, before getting out on a voyage and without giving any reason, refuse to
permit a seaman whom he may have engaged to go on board, and leave him on land, in which case he
will be obliged to pay him his wages as if he had rendered services.
This indemnity shall be paid from the funds of the vessel if the captain should have acted for reasons of
prudence and in the interest of the safety and good services of the farmer. Should this not be the case,
it shall be paid by the captain personally.
 After the voyage has begun, during the same, and until the conclusion thereof, the captain may not
abandon any member of his crew on land or on sea, unless, by reason of some crime, his
imprisonment and delivery to the competent authority in the first port touched should be proper, a
matter obligatory for the captain.
ARTICLE 638. If, after the crew has been engaged, the voyage is revoked by the will of the ship agent or of the
charterers before or after the vessel has put to sea, or if the vessel is for the same reason given a destination
different from that fixed in the agreement with the crew, the latter shall be indemnified on account of the
rescission of the contract, according to the cases follows:
1. If the revocation of the voyage should be decided upon before the departure of the vessel from the
port, each sailor engaged shall be given one month's salary, besides what may be due him, in
accordance with his contract, for the services rendered to the vessel up to the date of the revocation.
2. If the agreement should have been for a fixed amount for the whole voyage, that which may be due
for said month and days shall be determined in proportion to the approximate number of days the
voyage should have lasted, in the judgment of experts, in the manner established in the law of Civil
Procedure; and if the proposed voyage should be of such short duration that it is calculated at
approximately one month, the indemnity shall be fixed for fifteen days, discounting in all cases the
sums advanced.
3. If the revocation should take place after the vessel has put to sea, the seamen engaged for a fixed
amount for the voyage shall receive in full the salary which may have been offered them as if the
voyage had terminated; and those engaged by the month shall receive the amount corresponding to
the time they might have been on board and to the time they may require to arrive at the port of
destination, the captain being obliged, furthermore, to pay the seamen in both cases, the passage to
the said port or to the port of sailing of the vessel, as may be convenient for them.
4. If the ship agent or the charterers of the vessel should give it a destination different from that fixed in
the agreement, and the members of the crew should not agree thereto, they shall be given by way of
indemnity half the amount fixed in case No. 1, besides what may be owed them for the part of the
monthly wages corresponding to the days which have elapsed from the date of their agreements.
If they accept the change, and the voyage, on account of the greater distance or of other reasons,
should give rise to an increase of wages, the latter shall be adjusted privately or through amicable
arbitrators in case of disagreement. Even though the voyage should be shortened to a nearer point,
this shall not give rise to a reduction in the wages agreed upon.
If the revocation or change of the voyage should come from the shippers or charterers, the agent shall
have a right to demand of them the indemnity which may be justly due.
ARTICLE 639. If the revocation of the voyage should arise from a just cause independent of the will of the ship
agent and charterers, and the vessel should not have left the port, the members of the crew shall have no other
right than to collect the wages earned up to the day on which the revocation took place.
ARTICLE 640. The following shall be just causes for the revocation of the voyage.
1. A declaration of war or interdiction of commerce with the power to whose territory the vessel was
bound.
2. The blockade of the port of its destination, or the breaking out of an epidemic after the agreement.
3. The prohibition to receive in said port the goods which make up the cargo of the vessel.
4. The detention or embargo of the same by order of the government, or for any other reason
independent of the will of the ship agent.
5. The inability of the vessel to navigate.
ARTICLE 641. If, after a voyage has been begun, any of the first three causes mentioned in the foregoing article
should occur, the sailors shall be paid at the port which the captain may deem advisable to make for the benefit
of the vessel and cargo, according to the time they may have served thereon; but if the vessel is to continue its
voyage, the captain and the crew may mutually demand the enforcement of the contract.
In case of the occurrence of the fourth cause, the crew shall continue to be paid half wages, if the agreement is
by month; but if the detention should exceed three months, the contract shall be rescinded and the crew shall be
paid what they should have earned according to the contract if the voyage had been concluded. And if the
agreement should be for a fixed sum for the voyage, the contract must be complied within the terms agreed
upon.
In the fifth case, the crew shall have no other right than to collect the wages earned; but if the disability of the
vessel should have been caused by the negligence or lack of skill of the captain, engineer, or sailing mate, they
shall indemnify the crew for the damages suffered, always without prejudice to the criminal liability which may be
proper.
ARTICLE 642. If the crew have been engaged on shares, they shall not be entitled, by reason of the revocation,
delay, or greater extension of the voyage, to anything but the proportionate part of the indemnity which way be
paid into the common funds of the vessel by the persons liable for said occurrences.
ARTICLE 643. If the vessel and her cargo should be totally lost, by reason of capture or wreck, all rights shall be
extinguished, both as regards the crew to demand any wages whatsoever, and as regards the ship agent to
recover the advances made.
If a portion of the vessel or of the cargo, or of both, should be saved, the crew engaged on wages, including the
captain, shall retain their rights on the salvage, so far as they go, on the remainder of the vessel as well as on the
amount of the freightage of the cargo saved; but sailors who are engaged on shares shall not have any right
whatsoever on the salvage of the hull, but only on the portion of the freightage saved. If they should have worked
to recover the remainder of the shipwrecked vessel they shall be given from the amount of the salvage an award
in proportion of the efforts made and to the risks, encountered in order to accomplish the salvage.
ARTICLE 644. A seaman who falls sick shall not lose his right to wages during the voyage, unless the sickness is
the result of his own fault. At any rate, the costs of the attendance and cure shall be defrayed from the common
funds, in the form of a loan.
If the sickness should come from an injury received in the service or defense of the vessel, the seaman shall be
attended and cured at the expense of the common funds deducting, before anything else, from the proceeds of
the freightage the cost of the attendance and cure.
ARTICLE 645. If a seaman should die during the voyage, his heirs will be given the wages earned and not
received according to his contract and the cause of his death, namely —
If he died a natural death and was engaged on wages, that which may have been earned up to the date of his
death shall be paid.
If the contract was for a fixed sum for the whole voyage, half the amount earned shall be paid if the seamen died
on the voyage out, and the whole amount if he died on the return voyage.
And if the contract was on shares and death occurred after the voyage was begun, the heirs shall be paid the
entire portion due the seaman; but if the latter died before the departure of the vessel from the port, the heirs
shall not be entitled to claim anything.
If death occurred in the defense of the vessel, the seaman shall be considered as living, and his heirs shall be
paid, at the end of the voyage, the full amount of wages or the integral part of the profits which may be due him
as to others of his class.
In the same manner, the seaman captured while defending the vessel shall be considered present so as to enjoy
the same benefits as the rest; but should he have been captured on account of carelessness or other accident
not related to the service, he shall only receive the wages due up to the day of his capture.
ARTICLE 646. The vessel with her engines, rigging, equipment, and freightage shall he liable for the wages
earned by the crew engaged per month or for the trip, the liquidation and payment to take place between one
voyage and the other.
After a new voyage has been undertaken, credits of such kind pertaining to the preceding voyage shall lose their
right of preference.
ARTICLE 647. The officers and the crew of the vessel shall be free from all obligations if they deem it proper, in
the following cases:
1. If, before beginning the voyage, the captain attempts to change it, or a naval war with the power to
which the vessel was destined occurs.
2. If a disease should break out and be officially declared an epidemic in the port of destination.
3. If the vessel should change owner or captain.
ARTICLE 648. By the complement of a vessel shall be understood all the persons on board, from the captain to
the cabin boy, necessary for the management, maneuvers, and service, and therefore, the complement shall
include the crew, the sailing mates, engineers, stokers and other employees on board not having specific
designations; but it shall not include the passengers or the persons whom the vessel is transporting.
SECTION FOUR
SUPERCARGOES
ARTICLE 649. Supercargoes shall discharge on board the vessel the administrative duties which the ship agent
or the shippers may have assigned to them; they shall keep an account and record of their transactions in a book
which shall have the same conditions and requisites as required for the accounting book of the captain, and they
shall respect the latter in his capacity as chief of the vessel.
The powers and responsibilities of the captain shall cease, when there is a supercargo, with regard to that part of 5. The name, surname, and domicile of the charterer; and if he states that he is acting by commission,
the administration legitimately conferred upon the latter, but shall continue in force for all acts which are that of the person for whose account he makes the contract.
inseparable from his authority and office.
6. The port of loading and unloading.
ARTICLE 650. All the provisions contained in the second section of Title III, Book II, with regard to capacity,
manner of making contracts, and liabilities of factors, shall be applicable to supercargoes. 7. The capacity, number of tons or the weight or measurement which they respectively bind themselves
to load and to transport, or whether the charter party is total.
ARTICLE 651. Supercargoes may not, without special authorization or agreement, make any transaction for their
own account during the voyage, with the exception of the ventures which, in accordance with the custom of the 8. The freightage to be paid, stating whether it is to be a fixed amount for the voyage or so much per
port of destination, they are permitted to do. month, or for the space to be occupied, or for the weight or measure of the goods of which the cargo
consists, or in any other manner whatsoever agreed upon.
Neither shall they be permitted to invest in the return trip more than the profits from the ventures, unless there is
an express authorization from the principals. 9. The amount of primage to be paid to the captain.

TITLE THREE 10. The days agreed upon for loading and unloading.
SPECIAL CONTRACTS OF MARITIME COMMERCE
SECTION ONE
11. The lay days and extra lay days to be allowed and the demurrage to be paid for each of them.

CHARTER PARTIES
ARTICLE 653. If the cargo should be received without the charter party having been signed, the contract shall be
PART I
understood as executed in accordance with what appears in the bill of lading, the sole evidence of title with
regard to the cargo for determining the rights and obligations of the ship agent, of the captain, and of the
FORMS AND EFFECTS OF CHARTER PARTIES charterer.

ARTICLE 652. A charter party must be drawn in duplicate and signed by the contracting parties, and when either ARTICLE 654. The charter parties executed with the intervention of a broker, who certifies to the authenticity of
does not know how or is not able to do so, by two witnesses at his request. the signatures of the contracting parties because they were signed in his presence, shall be full evidence in court;
and if they should be conflicting, that which accords with one which the broker must keep in his registry, if kept in
The charter party shall contain, besides the conditions freely stipulated, the following circumstances: accordance with law, shall govern.

1. The kind, name, and tonnage of the vessel. The contracts shall also be admitted as evidence, even though a broker has not taken part therein, if the
contracting parties acknowledge the signatures to be the same as their own.
2. Its flag and port of registry.
If no broker has intervened in the charter party and the signatures are not acknowledged, doubts shall be
3. The name, surname, and domicile of the captain. decided by what is provided for in the bill of lading and in the absence thereof, by the proofs submitted by the
parties.
4. The name, surname, and domicile of the ship agent, if the latter should make the charter party.
ARTICLE 655. Charter parties executed by the captain in the absence of the ship agent shall be valid and
effective, even though in executing them he should have acted in violation of the orders and instructions of the
ship agent or shipowner; but the latter shall have a right of action against the captain for indemnification of ARTICLE 659. The merchandise sold by the captain to pay for the necessary repairs to the hull, machinery or
damages. equipment, or for unavoidable and urgent needs, shall pay freightage.

ARTICLE 656. If in the charter party the time in which the loading and unloading are to take place is not stated, The price of this merchandise shall be fixed according to the result of the voyage, namely:
the usages of the port where these acts take place shall be observed. After the stipulated or the customary
period has passed, and there is no express proviso in the charter party fixing the indemnity for the delay, the 1. If the vessel should arrive safely at the port of destination, the captain shall pay the price which the
captain shall be entitled to demand demurrage for the lay days and extra lay days which may have elapsed in sale of merchandise of the same kind brings at that port.
loading and unloading.
2. If the vessel should be lost, the captain shall pay the price realized from said merchandise in the
ARTICLE 657. If during the voyage the vessel should be rendered unseaworthy, the captain shall be obliged to sale.
charter at his expense another one in good condition to receive the cargo and carry it to its destination, for which
purpose he shall be obliged to look for a vessel not only at the port of arrival but also in the neighborhood within
The same rule shall be observed in the payment of the freightage, which shall be in full if the vessel
distance of 150 kilometers.
arrives at her destination, and in proportion to the distance covered if she should be lost before arrival.

If the captain, through indolence or malice, should not furnish a vessel to its destination, the shippers, after
ARTICLE 660. Merchandise jettisoned for the common safety shall not pay freightage; but the amount of the
requiring the captain to charter a vessel within an inextendible period, may charter one and petition the judicial
latter shall be considered as general average computing the same in proportion to the distance covered when
authority to summarily approve the charter party which they may have made.
they were jettisoned.

The same authority shall judicially ("por la via de appremio") compel the captain, to carry out, for his account and
ARTICLE 661. Neither merchandise lost by reason of shipwreck or stranding nor those seized by the pirates or
under his responsibility, the charter made by the shippers.
enemies, shall pay freightage.

If the captain, notwithstanding his diligence, should not find a vessel for the charter, he shall deposit the cargo at
If the freightage should have been paid in advance, it shall be returned, unless there is an agreement to the
the disposal of the shippers, to whom he shall communicate the facts on the first opportunity which presents
contrary.
itself, the freight being adjusted in such cases by the distance covered by the vessel, with no right to any
indemnification whatsoever.
ARTICLE 662. If the vessel or the merchandise should be redeemed, or the effects of the shipwreck be salvaged,
the freightage corresponding to the distance covered by the vessel transporting the cargo shall be paid; and
ARTICLE 658. The freightage shall accrue according to the conditions stipulated in the contract, and should they
should the vessel, after being repaired, transport said merchandise to the port of destination, the full freightage
not be expressed, or should they be ambiguous, the following rules shall be observed:
shall be paid, without prejudice to what may be due by reason of the average.

1. If the vessel has been chartered by months or by days, the freightage shall begin to run from the day
the loading of the vessel is begun.
2. In charters made for a fixed period, the freightage shall begin to run from that very day.
3. If the freightage is charged according to weight, the payment shall be made according to gross
weight, including the containers, such as barrels or any other objects in which the cargo is contained.
ARTICLE 663. Merchandise which suffer deterioration or diminutions on account of inherent defects or bad
quality and condition of the packing, or because of fortuitous event, shall pay freightage in full and as stipulated in
the charter party.
ARTICLE 664. The natural increase in weight or size of the merchandise loaded on the vessel shall accrue to the
benefit of the owner, and shall pay the proper freightage fixed in the contract for the same.
ARTICLE 665. The cargo shall be specially liable for the payment of the freightage, expenses and duties arising
therefrom, which must be reimbursed by the shippers, as well as for the part of the general average which may
correspond to it; but it shall not be legal for the captain to delay unloading on account of suspicion that this
obligation may not be complied with.
Should there be reasons for distrust, the judge or court, at the instance of the captain, may order the deposit of
the merchandise until he has been paid in full.
ARTICLE 666. The captain may request the sale of the cargo to the amount necessary to pay the freightage,
expenses, and averages due him, reserving the right to demand the balance due him therefor if the proceeds of
the sale should not suffice to cover his credit.
ARTICLE 667. The goods loaded shall be liable in the first place for the freight and expenses thereof during
twenty days, to be counted from the date of their delivery or deposit. During this period, the sale of the same may
be requested, even though there be other creditors and the bankruptcy of the shipper or consignee should occur.
This right may not he made use of, however, on the goods which, after being delivered, were turned over to a
third person without malice on the part of the latter and for a valuable consideration.
ARTICLE 668. If the consignee should not be found or should refuse to receive the cargo, the judge or court, at
the instance of the captain, shall order its deposit and the sale of what may be necessary to pay the freightage
and other expenses on the same.
The sale shall likewise be allowed when the goods deposited run the risk of deteriorating, or by reason of their
condition or other circumstances the expenses of preservation and custody should be disproportionate.
PART 2
RIGHTS AND OBLIGATIONS OF SHIPOWNERS
ARTICLE 669. The shipowner or the captain shall observe in charter parties the capacity of the vessel or that
expressly designated in its registry, a difference greater than 2 per cent between that stated and her true capacity
not being permissible.
If the shipowner or the captain should contract to carry a greater amount of cargo than the vessel can carry in
view of her tonnage, they shall indemnify the shippers whose contracts they do not fulfill for the losses they may
have caused when by reason of their default, according to the following cases, viz:
If the vessel has been chartered by one shipper only, and there should appear to be an error or fraud in her
capacity, and the charterer should not wish to rescind the contract, when he has a right to do so, the freightage
shall he reduced in proportion to the cargo which the vessel can not receive, the person from whom the vessel is
chartered being furthermore obliged to indemnify the charterer for the losses he may have caused him.
If, on the contrary there should be several charter parties, and by reason of want of space all the cargo
contracted for cannot be loaded, and none of the charterers desires to rescind the contract, preference shall be
given to the person who has already loaded and arranged the freight in the vessel, and the rest shall take the
places corresponding to them in the order of the dates of their contracts.
Should there be no priority, the charterers may load, if they wish, in proportion to the amounts of weight or space
for which each may have contracted, and the person from whom the vessel was chartered shall he obliged to
indemnify them for losses and damages.
ARTICLE 670. If the person from whom the vessel is chartered, after receiving a part of the freight, should not
find sufficient to make up at least three-fifths of the amount which the vessel may hold, at the price he may have
fixed, he may substitute for the transportation another vessel inspected and declared suitable for the same
voyage, the expenses of transfer and the increase in the price of the charter, should there be any, being for his
account. Should he not be able to make this change, he shall undertake the voyage at the time agreed upon; and
should no time have been fixed, within fifteen days from the time the loading began, unless otherwise stipulated.
If the owner of the part of the freight already loaded should procure some more at the same price and under
similar or proportionate conditions to those accepted for the freight received, the person from whom the vessel is
chartered or the captain can not refuse to accept the rest of the cargo; and should he do so, the shipper shall
have a right to demand that the vessel put to sea with the cargo which it may have on board.
ARTICLE 671. After three-fifths of the vessel has been loaded, the person from whom she is chartered may not,
without the consent of the charterers or shippers, substitute the vessel designated in the charter party by another
one, under the penalty of making himself thereby liable for all the losses and damages occurring during the
voyage to the cargo of those who did not consent to the change.
ARTICLE 672. If the vessel has been chartered in whole, the captain may not, without the consent of the
charterer, accept cargo deposited, and it shall be liable for the payment of the freightage and expenses on its
account during the delay, which shall be paid from the proceeds of the part first sold.
PART 3
OBLIGATIONS OF CHARTERERS
ARTICLE 679. The charterer of an entire vessel may sub-charter the whole or part thereof on such terms as he
may consider most convenient, the captain not being allowed to refuse to receive on board the freight delivered
by the second charterers, provided that the conditions of the first charter are not change, and that the price
agreed upon is paid in full to the person from whom the vessel is chartered, even though the full cargo is not
embarked, with the limitation established in the next article.
ARTICLE 680. A charterer who does not complete the full cargo he bound himself to ship shallpay the freightage
of the amount he fails to ship, if the captain does not take other freight to complete the load of the vessel, in
which case the first charterer shall pay the difference, should there be any.
ARTICLE 681. If the charterer should load goods different from those stated at the time of executing the charter
party, without the knowledge of the person from whom the vessel was chartered or of the captain, and should
thereby give rise to losses, by reason of confiscation, embargo, detention, or other causes, to the person from
whom the vessel was chartered or to the shippers, the person giving rise thereto shall be liable with the value of
his shipment and furthermore with his property, for the full indemnity to all those injured through his fault.
ARTICLE 682. If the merchandise should have been shipped for the purpose of illicit commerce, and were taken
on board with the knowledge of the person from whom the vessel was chartered or of the captain, the latter,
jointly with the owner of the same, shall be liable for all the losses which may be caused the other shippers; and
even though it may have been stipulated, they can not demand any indemnity whatsoever from the charterer for
the damaged caused to the vessel.
ARTICLE 683. In case of making a port to repair the hull, machinery, or equipment of the vessel, the shippers
must await until the vessel is repaired, being permitted to unload it at their own expense should they deem it
proper.
If, for the benefit of the cargo subject to deterioration, the shippers or the court, or the consul, or the competent
authority in a foreign country, should order the merchandise to be unloaded, the expenses of unloading and
reloading shall be for the account of the former.
ARTICLE 684. If the charterer, without the occurrence of any of the cases of force majeure mentioned in the
foregoing article, should wish to unload his merchandise before arriving at the port of destination, he shall pay the
full freightage, the expenses of the arrival made at his request, and the losses and damages caused the other
shippers, should there be any.
ARTICLE 685. In charters for transportation of general freight, any of the shippers may unload the merchandise
before the beginning of the voyage, paying one-half of the freightage, the expense of stowing and restowing the
cargo, and any other damage which for his reason he may cause the other shippers.
ARTICLE 686. After the vessel has been unloaded and the cargo placed at the disposal of the consignee, the
latter must immediately pay the captain the freightage due and the other expenses for which said cargo may be
liable.
The primage must be paid in the same proportion and at the same time as the freightage, all the changes and
modifications to which the latter should be subject also governing the former.
ARTICLE 687. The charterers and shippers may not abandon merchandise damaged on account of inherent
defect or fortuitous event, for the payment of the freightage and other expenses.
The abandonment shall be proper, however, if the cargo should consist of liquids and they have leaked out,
nothing remaining in the containers but one-fourth part of their contents.
PART 4
TOTAL OR PARTIAL RESCISSION OF CHARTER PARTIES
ARTICLE 688. A charter party may be rescinded at the request of the charterer:
1. If before loading the vessel he should not agree with that stated in the certificate of tonnage, or if
there should be an error in the statement of the flag under which she sails.
2. If the vessel should not be placed at the disposal of the charterer within the period and in the manner
agreed upon.
3. If after the vessel has put to sea, she should return to the port of departure, on account of risk from
pirates, enemies, or bad weather, and the shippers should agree to unload her.
In the second and third cases the person from whom the vessel was chartered shall indemnify the
charterer for the voyage out.
4. If the charter should have been made by the months, the charterers shall pay the full freightage for
one month, if the voyage is for a port in the same waters, and for two months, if for a port in different
waters.
From one port to another of the Philippines and adjacent islands, the freightage for one month only
shall be paid.
5. If the vessel should make a port during the voyage in order to make urgent repairs, and the
charterers should prefer to dispose of the merchandise.
When the delay does not exceed thirty days, the shippers shall pay the full freightage for the voyage
out.
 Should the delay exceed thirty days, they shall only pay the freightage in proportion to the distance
covered by the vessel.
ARTICLE 689. At the request of the person from whom the vessel is chartered the charter party may be
rescinded:
1. If the charterer, at the termination of the extra lay days, does not place the cargo alongside the
vessel.
In such case the charterer must pay half the freight stipulated, besides the demurrage due for the lay
days and extra lay days.
2. If the person from whom the vessel was chartered should sell it before the charterer has begun to
load it, and the purchaser should load it for his own account.
In such case the vendor shall indemnify the charterer for the losses he may suffer.
If the new owner of the vessel should not load it for his own account, the charter party shall be
respected, and the vendor shall indemnify the purchaser if the former did not inform him of the charter
pending at the time of making the sale.
ARTICLE 690. The charter party shall be rescinded and all actions arising therefrom shall be extinguished, if,
before the vessel puts to sea from the port of departure, any of the following cases should occur:
1. A declaration of war or interdiction of commerce with the power to whose ports the vessel was to
make its voyage.
2. A condition of blockade of the port of destination of said vessel, or the breaking out of an epidemic
after the contract was executed.
3. The prohibition to receive at the said port the merchandise constituting the cargo of the vessel.
4. An indefinite detention, by reason of an embargo of the vessel by order of the government, or for any
other reason independent of the will of the ship agent.
5. The inability of the vessel to navigate, without fault of the captain or ship agent.
The unloading shall be made for the account of the charterer.
ARTICLE 691. If the vessel cannot put to sea on account of the closing of the port of departure or any other
temporary cause, the charter shall remain in force, with neither one of the contracting parties having a right to
claim damages.
The subsistence and wages of the crew shall be considered as general average.
During the interruption, the charterer may at the proper time and for his own account, unload and load the
merchandise, paying demurrage if he delays the reloading after the cause for the detention has ceased.
ARTICLE 692. A charter party shall be partially rescinded, unless there is an agreement to the contrary, and the
captain shall only be entitled to the freightage for the voyage out, if, by reason of a declaration of war, closing of
ports, or interdiction of commercial relations during the voyage, the vessel should make the port designated for
such a case in the instructions of the charterer.
PART 5
PASSENGERS ON SEA VOYAGES
ARTICLE 693. If the passage price has not been agreed upon, the judge or court shall summarily fix it, after a
declaration of experts.
ARTICLE 694. Should the passenger not arrive on board at the time fixed, or should leave the vessel without
permission from the captain when the latter is ready to leave the port, the captain may continue the voyage and
demand the full passage price.
ARTICLE 695. The right to passage, if issued to a specified person, may not be transferred without the consent
of the captain or of the consignee.
ARTICLE 696. If before beginning the voyage the passenger should die, his heirs shall only be obliged to pay
half of the fare agreed upon.
If the expenses of subsistence are included in the price stipulated, the judge or court, after hearing experts if he
considers it necessary, shall fix the amount which has to be left for the benefit of the vessel.
Should another passenger be received in the place of the deceased, no payment shall be made by said heirs.
ARTICLE 697. If before the voyage is begun it is suspended through the exclusive fault of the captain or ship
agent, the passengers shall have the right to a refund of their fares and to recover losses and damages; but if the
suspension is due to fortuitous events, or to force majeure, or to any other cause independent of the captain or
ship agent, the passengers shall only be entitled to the return of the fare.
ARTICLE 698. In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the
fare in proportion to the distance covered, without right to recover for losses and damages if the interruption is
due to fortuitous event or to force majeure, but with a right to indemnity if the interruption should have been
caused by the captain exclusively. If the interruption should be caused by the disability of the vessel, and a
passenger should agree to await the repairs, he may not be required to pay any increased price of passage, but
his living expenses during the stay shall be for his own account.
In case of delay in the departure of the vessel, the passengers have the right to remain on board and to be
furnished with food for the account of the vessel unless the delay is due to fortuitous events or to force majeure.
If the delay should exceed ten days, passengers requesting the same shall be entitled to the return of the fare;
and if it is due exclusively to the fault of the captain or ship agent, they may also demand indemnity for losses
and damages.
A vessel exclusively devoted to the transportation of passengers must take them directly to the port or ports of
destination, no matter what the number of passengers may be, making all the stops indicated in its itinerary.
ARTICLE 699. If the contract is rescinded, before or after the commencement of the voyage, the captain shall
have a right to claim payment of what he may have furnished the passengers.
ARTICLE 700. In all matters pertaining to the preservation of order and discipline on board the vessel
passengers shall be subject to the orders of the captain, without any distinction whatsoever.
ARTICLE 701. The convenience or the interest of the passengers shall not obligate or empowers the captain to
stand in shore or enter places which may take the vessel out of her course, or to remain in the ports he must or in
under necessity of touching for a period longer than that required by the needs of navigation.
ARTICLE 702. In the absence of an agreement to the contrary, it shall be understood that the subsistence of the
passengers during the voyage is included in the price of the passage; but should it be for the account of the
latter, the captain shall be under obligation, in case of necessity, to furnish the supply of food necessary for their
sustenance at a reasonable price.
ARTICLE 703. A passenger shall be considered a shipper insofar as the goods he carries on board are
concerned, and the captain shall not be responsible for what the former may keep under his immediate and
special custody, unless the damage arises from an act of the captain or of the crew.
ARTICLE 704. The captain, in order to collect the passage-money and expenses of sustenance, may retain the
goods belonging to the passenger, and in case of the sale of the same he shall be given preference over other
creditors acting the same way as in the collection of freightage.
ARTICLE 705. In case of the death of a passenger during the voyage, the captain shall be authorized, with
regard to the body, to take the steps required by the circumstances, and shall carefully take care of the papers
and goods which may be on board belonging to the passenger, observing the provisions of case No. 10 of Article
612 with regard to members of the crew.
PART 6
BILLS OF LADING
ARTICLE 706. The captain of the vessel and the shipper shall have the obligation of drawing up the bill of lading
in which shall be stated:
1. The name, registry, and tonnage of the vessel.
2. The name of the captain and his domicile.
3. The port of loading and that of unloading.
4. The name of the shipper.
5. The name of the consignee, if the bill of lading is issued in the name of a specified person.
6. The quantity, quality, number of packages and marks of the merchandise.
7. The freightage and the primage stipulated.
The bill of lading may be issued to bearer, to order, or in the name of a specified person, and must be
signed within twenty-four hours after the cargo has been received on board, the shipper being entitled
to demand the unloading at the expense of the captain should the latter not sign it, and, in every case,
the losses and damages suffered thereby. cdasia
ARTICLE 707. Four true copies of the original bill of lading shall be made, and all of them shall be signed by the
captain and the shipper. Of these, the shipper shall keep one and send another to the consignee; the captain
shall take two, one for himself and another for the ship agent.
There may also be drawn up as many copies of the bill of lading as may be considered necessary by the person
interested; but when they are issued to order or to bearer, they shall be stated in all the copies, be they the first
four or the subsequent ones, the destination of each one, stating whether it is for the agent, for the captain, for
the shipper, or for the consignee. If the copy sent to the latter should have a
duplicate, this circumstance and the fact that it is not valid except in default of the first one must be stated
therein.
ARTICLE 708. Bills of lading issued to bearer and sent to the consignee shall be transferable by actual delivery
of the instrument; and those issued to order, by virtue of an indorsement.
In either case, the person to whom the bill of lading is transferred shall acquire all the rights and actions of the
transferor or indorser with regard to the merchandise mentioned in the same.
ARTICLE 709. A bill of lading drawn up in accordance with the provisions of this title shall be proof as between all
those interested in the cargo and between the latter and the insurers, proof to the contrary being reserved for the
latter.
ARTICLE 710. If the bills of lading do not agree, and no change or erasure can be observed in any of them,
those possessed by the shipper or consignee signed by the captain shall be proof against the captain or ship
agent in favor of the consignee or shipper; and those possessed by the captain or ship agent signed by the
shipper shall be proof against the shipper or consignee in favor of the captain or ship agent.
ARTICLE 711. The legitimate holder of a bill of lading who fails to present it to the captain of the vessel before
the unloading obliging the latter thereby to unload it and place it in deposit, shall be responsible for the expenses
of warehousing and other expenses arising therefrom.
ARTICLE 712. The captain may not by himself change the destination of the merchandise. In admitting this
change at the instance of the shipper, he must first take up the bill of lading which he may have issued, under
pain of being liable for the cargo to the legitimate holder of the same.
ARTICLE 713. If before the delivery of the cargo a new bill of lading should be demanded of the captain, on the
allegation that the failure to present the previous ones is due to their loss or to any other just cause, he shall be
obliged to issue it, provided that security for the value of the cargo is given to his satisfaction, but without
changing the consignment, and stating therein the circumstances prescribed in the last paragraph of Article 707,
under penalty, should he not so state, of being held liable for said cargo if improperly delivered through his fault.
ARTICLE 714. If before the vessel puts to sea the captain should die or should cease to hold his position through
any cause, the shippers shall have the right to demand of the new captain the ratification of the first bills of
lading, and the latter must do so, provided that all the copies previously issued be presented or returned to him,
and it should appear from all examination of the cargo that they are correct.
The expenses arising from the examination of the cargo shall be defrayed by the ship agent, without prejudice to
the right of action of the latter against the first captain if he ceased to be such through his own fault. Should said
examination not be made, it shall be understood that the new captain accepts the cargo as it appears from the
bills of lading issued.
ARTICLE 715. Bills of lading will give rise to a most summary action or to judicial, compulsion ("accion
sumarisima o de apremios"), according to the case, for the delivery of the cargo and the payment of the
freightage and the expenses thereby incurred.
ARTICLE 716. If several persons should present bills of lading issued to bearer or to order, indorsed in their
favor, demanding the same merchandise, the captain shall prefer, in making delivery the person who presents
the copy first issued, except when the latter one was issued on proof of the loss of the first, and both are
presented by different persons.
In such case, as well as when only second subsequent copies, issued without this proof, are presented, the
captain shall apply to the judge or court, so that he may order the deposit of the merchandise and their delivery,
through him, to the proper person.
ARTICLE 717. The delivery of the bill of lading shall effect the cancellation of all the provisional receipts of prior
date given by the captain or his subordinates for partial deliveries of the cargo which may have been made.
ARTICLE 718. After the cargo has been delivered the bill of lading which the captain signed, or at least the copy
by reason of which the delivery is made, shall be returned to him, with the receipt for the merchandise mentioned
therein.
The delay on the part of the consignee shall make him liable for the damages which such delay may cause the
captain.
SECTION TWO
LOANS ON BOTTOMRY AND RESPONDENTIA
ARTICLE 719. A loan in which under any condition whatever, the repayment of the sum loaned and of the 4. The amount of the loan and the premium stipulated.
premium stipulated depends upon the safe arrival in port of the goods on which it is made, or of the price they
may receive in case of accident, shall be considered a loan on bottomry or respondentia. 5. The time for repayment.

ARTICLE 720. Loans on bottomry or respondentia may be executed: 6. The goods pledged to secure repayment.

1. By means of a public instrument. 7. The voyage during which the risk is run.

2. By means of a policy signed by the contracting parties and the broker taking part therein. ARTICLE 722. The contract may be made to order, in which case they shall be transferable by indorsement, and
the indorsee shall acquire all the rights and shall incur all the risks corresponding to the indorser.
3. By means of a private instrument.
ARTICLE 723. Loans may be made in goods and in merchandise, fixing their value in order to determine the
Under whichever of these forms the contract is executed, it shall be entered in the certificate of the principal of the loan.
registry of the vessel and shall be recorded in the registry of vessels, without which requisites the
credits of this kind shall not have, with regard to other credits, the preference which, according to their ARTICLE 724. The loans may be constituted jointly or separately:
nature, they should have, although the obligation shall be valid between the contracting parties.
1. On the hull of the vessel.
The contracts made during a voyage shall be governed by the provisions of Articles 583 and 611, and
shall be effective with regard to third persons from the date of their execution, if they should be
2. On the rigging.
recorded in the registry of vessels of the port of registry of the vessel before the lapse of eight days
following its arrival. If said eight days should elapse without the record having been made in the
corresponding registry, the contracts made during the voyage of a vessel shall produce no effect with 3. On the equipment, provisions, and fuel.
regard to third persons, except from the day and date of their inscription.
4. On the engine, if the vessel is a steamer.
In order that the policy of the contracts executed in accordance with No. 2 may have binding force, they
must conform to the registry of the broker who took part therein. With respect to those executed in 5. On the merchandise loaded.
accordance with No. 3 the acknowledgment of the signature shall be required.
If the loan in constituted on the hull of the vessel, the rigging, equipment and other goods, provisions,
Contracts which are not reduced to writing shall not give rise to judicial action. fuel, steam engines, and the freightage earned during the voyage on which the loan is made shall also
be considered as included in the liability for the loan.
ARTICLE 721. In a contract on bottomry or respondentia the following must be stated:
If the loan is made on the cargo, all that which constitutes the same shall be subject to the repayment;
1. The kind, name, and registry of the vessel. and if on a particular object of the vessel or of the cargo, only the object concretely and specifically
mentioned shall be liable.
2. The name, surname, and domicile of the captain.
ARTICLE 725. No loans on bottomry may be made on the salaries of the crew or on the profits expected.
3. The names, surnames, and domiciles of the person giving and the person receiving the loan.
ARTICLE 726. If the lender should prove that he loaned an amount larger than the value of the object liable for
the bottomry loan, on account of fraudulent measures employed by the borrower, the loan shall be valid only for
the amount at which said object is appraised by experts.
The surplus principal shall be returned with legal interests for the entire time required for repayment.
ARTICLE 727. If the full amount of the loan contracted in order to load the vessel should not be used for the
cargo, the balance shall be returned before clearing.
The same procedure shall be observed with regard to the goods taken as loan, if they were not loaded.
ARTICLE 728. The loan which the captain takes at the point of residence of the owners of the vessel shall only
affect that part thereof which belongs to the captain, if the other owners or their agents should not have given
their express authorization therefor or should not have taken part in the transaction.
If one or more of the owners should be requested to furnish the amount necessary to repair or provision the
vessel, and they should not do so within twenty-four hours, the interest which the parties in default may have in
the vessel shall be liable for the loan in the proper proportion.
Outside of the residence of the owners the captain may contract loans in accordance with the provisions of
Articles 583 and 611.
ARTICLE 729. Should the goods on which money is taken not be subjected to risk, the contract shall be
considered a simple loan, with the obligation on the part of the borrower to return the principal and interest at the
legal rate, if that agreed upon should not be lower.
ARTICLE 730. Loans made during the voyage shall have preference over those made before the clearing of the
vessel, and they shall be graduated in the inverse order of their dates.
The loans for the last voyage shall have preference over prior ones.
Should several loans have been made at the same port of arrival under stress and for the same purpose, all of
them shall be paid pro rata.
ARTICLE 731. The actions pertaining to the lender shall be extinguished by the absolute loss of the goods on
which the loan was made, if it arose from an accident of the sea at the time and during the voyage designated in
the contract, and it is proven that the cargo was on board; but this shall not take place if the loss was caused by
the inherent defect of the thing, or through the fault or malice, of the borrower, or barratry on the part of the
captain, or if it was caused by damages suffered by the vessel as a consequence of being engaged in
contraband, or if it arose from having loaded the merchandise on a vessel different from that designated in the
contract, unless this change should have been made by reason of force majeure.
Proof of the loss as well as of the existence in the vessel of the goods declared to the lender as the object of the
loan is incumbent upon him who received the loan.
ARTICLE 732. Lenders on bottomry or respondentia shall suffer, in proportion to their respective interest, the
general average which may take place in the goods on which the loan is made.
In particular averages, in the absence of an express agreement between the contracting parties, the lender on
bottomry or respondentia shall also contribute in proportion to his respective interest, should it not belong to the
kind of risks excepted in the foregoing article.
ARTICLE 733. Should the period during which the lender shall run the risk not have been stated in the contract, it
shall last, with regard to the vessel, engines, rigging, and equipment, from the moment said vessel puts to sea
until she drops anchor in the port of destination; and with regard to the merchandise, from the time they are
loaded at the shore or wharf of the port of shipment until they are unloaded in the port of consignment. aisadc
ARTICLE 734. In case of shipwreck, the amount liable for the payment of the loan shall be reduced to the
proceeds of the goods saved, after deducting the costs of the salvage.
If the loan should be on the vessel or any of its parts, the freightage earned during the voyage for which said loan
was contracted shall also be liable for its payment, as far as it may reach.
ARTICLE 735. If the same vessel or cargo should be the object of a loan on bottomry or respondentia and
marine insurance, the value of what may be saved in case of shipwreck shall be divided between the lender and
the insurer, in proportion to the legitimate interest of each one, taking into consideration, for this purpose only, the
principal with respect to the loan, and without prejudice to the right of preference of other creditors in accordance
with Article 580.
ARTICLE 736. If there should be delay in repayment of the principal and premiums of the loan, only the former
shall bear of legal interest.
TITLE FOUR
RISKS, DAMAGES AND ACCIDENTS OF MARITIME COMMERCE
SECTION ONE
AVERAGES
ARTICLE 806. For the purposes of this code the following shall be considered averages:
1. All extraordinary or accidental expenses which may be incurred during the voyage in order to
preserve the vessel, the cargo, or both.
2. Any damages or deteriorations which the vessel may suffer from the time it puts to sea from the port
of departure until it casts anchor in the port of destination, and those suffered by the merchandise from
the time they are loaded in the port of shipment until they are unloaded in the port of their consignment.
ARTICLE 807. The petty and ordinary expenses incident to navigation, such as those of pilotage of coasts and
ports, those of lighterage and towage, anchorage, inspection, health, quarantine, lazaretto, and other so-called
port expenses, costs of barges and unloading until the merchandise is placed on the wharf, and any other usual
expenses of navigation, shall be considered ordinary expenses to be defrayed by the shipowner, unless there is
an express agreement to the contrary.
ARTICLE 808. Averages shall be:
1. Simple or particular.
2. General or gross.
ARTICLE 809. As a general rule, simple or particular averages shall include all the expenses and damages
caused to the vessel or to her cargo which have not inured to the common benefit and profit of all the persons
interested in the vessel and her cargo, and especially the following:
1. The losses suffered by the cargo from the time of its embarkation until it is unloaded, either on
account of inherent defect of the goods or by reason of an accident of the sea or force majeure, and
the expenses incurred to avoid and repair the same.
2. The losses and expenses suffered by the vessel in its hull, rigging, arms, and equipment, for the
same causes and reasons, from the time it puts to sea from the port of departure until it anchors and
lands in the port of destination.
3. The losses suffered by the merchandise loaded on deck, except in coastwise navigation, if the
marine ordinances allow it.
4. The wages and victuals of the crew when the vessel is detained or embargoed by legitimate order or
force majeure, if the charter has been contracted for a fixed sum for the voyage.
5. The necessary expenses on arrival at a port, in order to make repairs or secure provisions.
6. The lowest value of the goods sold by the captain in arrivals under stress for the payment of
provisions and in order to save the crew, or to meet any other need of the vessel, against which the
proper amount shall be charged.
7. The victuals and wages of the crew while the vessel is in quarantine.
8. The loss inflicted upon the vessel or cargo by reason of an impact or collision with another, if it is
accidental and unavoidable.
If the accident should occur through the fault or negligence of the captain, the latter shall be liable for
all the losses caused.
9. Any loss suffered by the cargo through the fault, negligence, or barratry of the captain or of the crew,
without prejudice to the right of the owner to recover the corresponding indemnity from the captain, the
vessel, and the freightage.
ARTICLE 810. The owner of the goods which gave rise to the expense or suffered the damage shall bear the
simple or particular averages. cd
ARTICLE 811. As a general rule, general or gross averages shall include all the damages and expenses which
are deliberately caused in order to save the vessel, its cargo, or both at the same time, from a real and known
risk, and particularly the following:
1. The goods or cash invested in the redemption of the vessel or of the cargo captured by enemies,
privateers, or pirates, and the provisions, wages, and expenses of the vessel detained during the time
the settlement or redemption is being made.
2. The goods jettisoned to lighten the vessel, whether they belong to the cargo, to the vessel, or to the
crew, and the damage suffered through said act by the goods which are kept on board.
3. The cables and masts which are cut or rendered useless, the anchors and the chains which are
abandoned, in order to save the cargo, the vessel, or both.
 4. The expenses of removing or transferring a portion of the cargo in order to lighten the vessel and
place it in condition to enter a port or roadstead, and the damage resulting therefrom to the goods
removed or transferred.
5. The damage suffered by the goods of the cargo by the opening made in the vessel in order to drain it
and prevent its sinking.
6. The expenses caused in order to float a vessel intentionally stranded for the purpose of saying it.
7. The damage caused to the vessel which had to be opened, scuttled or broken in order to save the
cargo.
8. The expenses for the treatment and subsistence of the members of the crew who may have been
wounded or crippled in defending or saying the vessel.
9. The wages of any member of the crew held as hostage by enemies, privateers, or pirates, and the
necessary expenses which he may incur in his imprisonment, until he is returned to the vessel or to his
domicile, should he prefer it.
10. The wages and victuals of the crew of a vessel chartered by the month, during the time that it is
embargoed or detained by force majeure or by order of the government, or in order to repair the
damage caused for the common benefit.
11. The depreciation resulting in the value of the goods sold at arrival under stress in order to repair the
vessel by reason of gross average.
12. The expenses of the liquidation of the average.
ARTICLE 812. In order to satisfy the amount of the gross or general averages, all the persons having an interest
in the vessel and cargo therein at the time of the occurrence of the average shall contribute.
ARTICLE 813. In order to incur the expenses and cause the damages corresponding to gross average, there
must be a resolution of the captain, adopted after deliberation with the sailing mate and other officers of the
vessel, and after hearing the persons interested in the cargo who may be present.
If the latter shall object, and the captain and officers or a majority of them, or the captain, if opposed to the
majority, should consider certain measures necessary, they may be executed under his responsibility, without
prejudice to the right of the shippers to proceed against the captain before the competent judge or court, if they
can prove that he acted with malice, lack of skill, or negligence.
If the persons interested in the cargo, being on board the vessel, have not been heard, they shall not contribute
to the gross average, their share being chargeable against the captain, unless the urgency of the case should be
such that the time necessary for previous deliberations was wanting.
ARTICLE 814. The resolution adopted to cause the damages which constitute general average must necessarily
be entered in the log book, stating the motives and reasons for the dissent, should there be any, and the
irresistible and urgent causes which impelled the captain if he acted of his own accord.
In the first case the minutes shall be signed by all the persons present who could do so before taking action, if
possible; and if not, at the first opportunity. In the second case, it shall be signed by the captain and by the
officers of the vessel.
In the minutes, and after the resolution, shall be stated in detail all the goods jettisoned, and mention shall be
made of the injuries caused to those kept on board. The captain shall be obliged to deliver one copy of these
minutes to the maritime judicial authority of the first port he may make, within twenty-four hours after his arrival,
and to ratify it immediately under oath.
ARTICLE 815. The captain shall direct the jettison, and shall order the goods cast overboard in the following
order:
1. Those which are on deck, beginning with those which embarrass the maneuver or damage of the
vessel, preferring, if possible, the heaviest ones with the least utility and value.
2. Those which are below the upper deck, always beginning with those of the greatest weight and
smallest value, to the amount and number absolutely indispensable.
ARTICLE 816. In order that the goods jettisoned may be included in the gross average and the owners thereof
be entitled to indemnity, it shall be necessary insofar as the cargo is concerned that their existence on board be
proven by means of the bill of lading; and with regard to those belonging to the vessel, by means of the inventory
prepared before the departure in accordance with the first paragraph of Article 812.
ARTICLE 817. If in lightening a vessel on account of a storm, in order to facilitate its entry into a port or
roadstead, part of the cargo should be transferred to lighters or barges and be lost, the owner of said part shall
be entitled to indemnity, as if the loss had originated from a gross average, the amount thereof being distributed
between the vessel and cargo from which it came.
If, on the contrary, the merchandise transferred should be saved and the vessel should be lost, no liability may be
demanded of the salvage.
ARTICLE 818. If, as a necessary measure to extinguish a fire in a port, roadstead, creek, or bay, it should be
decided to sink any vessel, this loss shall be considered gross average, to which the vessels saved shall
contribute.
SECTION TWO
ARRIVALS UNDER STRESS
ARTICLE 819. If during the voyage the captain should believe that the vessel can not continue the trip to the port
of destination on account of the lack of provisions, well-founded fear of seizure, privateers, or pirates, or by
reason of any accident of the sea disabling it to navigate, he shall assemble the officers and shall summon the
persons interested in the cargo who may be present, and who may attend the meeting without the right to vote;
and if, after examining the circumstances of the case, the reason should be considered well-founded, the arrival
at the nearest and most convenient port shall be agreed upon, drafting and entering the proper minutes, which
shall be signed by all, in the log book.
The captain shall have the deciding vote, and the persons interested in the cargo, may make the objections and
protests they may deem proper, which shall be entered in the minutes in order that they may make use thereof in
the manner they may consider advisable.
ARTICLE 820. An arrival shall not be considered lawful in the following cases:
1. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage
according to usage and customs, or if they should have been rendered useless or lost through bad
stowage or negligence in their care.
2. If the risk of enemies, privateers, or pirates should not have been well known, manifest, and based
on positive and provable facts.
3. If the defect of the vessel should have arisen from the fact that it was not repaired, rigged, equipped,
and prepared in a manner suitable for the voyage, or from some erroneous order of the captain.
4. When malice, negligence, want of foresight, or lack of skill on the part of the captain exists in the act
causing the damage.
ARTICLE 821. The expenses of an arrival under stress shall always be for the account of the shipowner or agent,
but they shall not be liable for the damages which may be caused the shippers by reason of the arrival provided
the latter is legitimate. Otherwise, the ship agent and the captain shall be jointly liable.
ARTICLE 822. If in order to make repairs to the vessel or because there is danger that the cargo may suffer
damage, it should be necessary to unload, the captain must request authorization from the competent judge or
court for the removal, and carry it out with the knowledge of the person interested in the cargo, or his
representative, should there be any.
In a foreign port, it shall be the duty, of the Philippine Consul, where there is one, to give the authorization.
In the first case, the expenses shall be for the account of the ship agent or owner, and in the second, they shall
be chargeable against the owners of the merchandise for whose benefit the act was performed.
If the unloading should take place for both reasons, the expenses shall be divided proportionately between the
value of the vessel and that of the cargo.
ARTICLE 823. The custody and preservation of the cargo which has been unloaded shall be intrusted to the
captain, who shall be responsible for the same, except in cases of force majeure.
ARTICLE 824. If the entire cargo or part thereof should appear to be damaged, or there should be imminent
danger of its being damaged, the captain may request of the competent judge or court, or of the consul in a
proper case, the sale of all or of part of the former, and the person taking cognizance of the matter shall authorize
it, after an examination and declaration of experts, advertisements, and other formalities required by the case,
and an entry in the book, in accordance with the provisions of Article 624.
The captain shall, in a proper case, justify the legality of his conduct, under the penalty of answering to the
shipper for the price the merchandise would have brought if they had arrived in good condition at the port of
destination.
ARTICLE 825. The captain shall be responsible for the damages caused by his delay, if after the cause of the
arrival under stress has ceased, he should not continue the voyage.
If the cause of arrival should have been the fear of enemies, privateers, or pirates, a deliberation and resolution
in a meeting of the officers of the vessel and persons interested in the cargo who may be present, in accordance
with the provisions contained in Article 819, shall precede the departure.
SECTION THREE
COLLISIONS
ARTICLE 826. If a vessel should collide with another, through or the fault, negligence, or lack of skill of the
captain, sailing mate, or any other member of the complement, the owner of the vessel at fault shall indemnify
the losses and damages suffered, after an expert appraisal. aisadc
ARTICLE 827. If the collision is imputable to both vessels, each one shall suffer its own damages, and both shall
be solidarily responsible for the losses and damages occasioned to their cargoes.
ARTICLE 828. The provisions of the preceding article are applicable to the use in which it cannot be determined
which of the two vessels has caused the collision.
ARTICLE 829. In the cases above mentioned the civil action of the owner against the person causing the injury
as well as the criminal liabilities, which may be proper, are reserved.
ARTICLE 830. If a vessel should collide with another, through fortuitous event or force majeure, each vessel and
its cargo shall bear its own damages.
ARTICLE 831. If a vessel should be forced by a third vessel to collide with another, the owner of the third vessel
shall indemnify the losses and damages caused, the captain thereof being civilly liable to said owner.
ARTICLE 832. If by reason of a storm or other cause of force majeure, a vessel which is properly anchored and
moored should collide with those nearby, causing them damages, the injury occasioned shall be considered as
particular average of the vessel run into.
ARTICLE 833. A vessel which, upon being run into, sinks immediately, as well as that which, having been
obliged to make a port to repair the damages caused by the collision, is lost during the voyage or is obliged to be
stranded in order to be saved, shall be presumed as lost by reason of collision.
ARTICLE 834. If the vessels colliding with each other should have pilots on board discharging their duties at the
time of the collision, their presence shall not exempt the captains from the liabilities they incur, but the latter shall
have the right to be indemnified by the pilots, without prejudice to the criminal liability which the latter may incur.
ARTICLE 835. The action for the recovery of losses and damages arising from collisions cannot be admitted if a
protest or declaration is not presented within twenty-four hours before the competent authority of the point where
the collision took place, or that of the first port of arrival of the vessel, if in Philippine territory, and to the consul of
the Republic of the Philippines if it occurred in a foreign country.
ARTICLE 836. With respect to damages caused to persons or to the cargo, the absence of protest may not
prejudice the persons interested who were not on board or were not in a condition to make known their wishes.
ARTICLE 837. The civil liability incurred by the shipowners in the case prescribed in this section, shall be
understood as limited to the value of the vessel with all its appurtenances and freightage earned during the
voyage.
ARTICLE 838. When the value of the vessel and her appurtenances should not be sufficient to cover all the
liabilities, the indemnity due by reason of the death or injury of persons shall have preference.
ARTICLE 839. If the collision should take place between Philippine vessels in foreign waters, or if having taken
place in the open seas, and the vessels should make a foreign port, the Consul of the Republic of the Philippines
in said port shall hold a summary investigation of the accident, forwarding the proceedings to the Secretary of the
Department of Foreign Affairs for continuation and conclusion.
SECTION FOUR
SHIPWRECKS
ARTICLE 840. The losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck or
stranding shall be individually for the account of the owners, the part which may be saved belonging to them in
the same proportion.
ARTICLE 841. If the wreck or stranding should be caused by the malice, negligence, or lack of skill of the
captain, or because the vessel put to sea was insufficiently repaired and equipped, the ship agent or the shippers
may demand indemnity of the captain for the damages caused to the vessel or to the cargo by the accident, in
accordance with the provisions contained in Articles 610, 612, 614, and 621.
ARTICLE 842. The goods saved from the wreck shall be specially bound for the payment of the expenses of the
respective salvage, and the amount thereof must be paid by the owners of the former before they are delivered to
them, and with preference over any other obligation if the merchandise should be sold.
ARTICLE 843. If several vessels sail under convoy, and any of them should be wrecked, the cargo saved shall
be distributed among the rest in proportion to the amount which each one is able to take.
If any captain should refuse, without sufficient cause, to receive what may correspond to him, the captain of the ARTICLE 846. Those interested in the proof and liquidation of averages may mutually agree and bind
wrecked vessel shall enter a protest against him, before two sea officials, of the losses and damages resulting themselves at any time with regard to the liability, liquidation, and payment thereof.
therefrom, ratifying the protest within twenty-four hours after arrival at the first port, and including it in the
proceedings he must institute in accordance with the provisions contained in Article 612. In the absence of agreements, the following rules shall be observed:

If it is not possible to transfer to the other vessels the entire cargo of the vessel wrecked, the goods of the highest 1. The proof of the average shall take place in the port where the repairs are made, should any be
value and smallest volume shall be saved first, the designation thereof to be made by the captain with the necessary, or in the port of unloading.
concurrence of the officers of his vessel.
2. The liquidation shall be made in the port of unloading, if it is a Philippine port.
ARTICLE 844. A captain who may have taken on board the goods saved from the wreck shall continue his
course to the port of destination, and on arrival shall deposit the same, with judicial the intervention, at the
3. If the average occurred outside of the jurisdictional waters of the Philippines, or the cargo has been
disposal of their legitimate owners.
sold in a foreign port by reason of an arrival under stress, the liquidation shall be made in the port of
arrival.
In case he changes his course, if he can unload them at the port of which they were consigned, the captain may
make said port if the shippers or supercargoes present and the officers and passengers of the vessel consent
4. If the average has occurred near the port of destination, so that said port can be made, the
thereto; but he may not do so, even with said consent, in time of war or when the port is difficult and dangerous
proceedings mentioned in Rules 1 and 2 shall be held there.
to make.
ARTICLE 847. In the case where the liquidation of the averages is made privately by virtue of agreement, as well
The owners of the cargo shall defray all the expenses of this arrival as well as the payment of the freightage
as when a judicial authority intervened at the request of any of the parties interested who do not agree thereto, all
which, after taking into consideration the circumstances of the case, may be fixed by agreement or by a judicial
of them shall be cited, and heard, should they not have renounced this right.
decision.
Should they not be present or should the have no legal representative, the liquidation shall be made by the
ARTICLE 845. If on the vessel there should be no person interested in the cargo who can pay the expenses and
Consul in a foreign port, and where there is none, by the competent judge or court, according to the laws of the
freightage corresponding to the salvage, the competent judge or court may order the sale of the part necessary
country and for the account of the proper party.
to cover the same. This shall also be done when its preservation is dangerous, or when in a period of one year it
should not have been possible to ascertain who are its legitimate owners.
When the representative is a person well known in the place where the liquidation is made, his intervention shall
be admitted and shall produce legal effects, even though he be authorized only by a letter of the ship agent, the
In both cases the proceedings shall be with the publicity and formalities prescribed in Article 579, and the net
shipper, or the insurer.
proceeds of the sale shall be safely deposited, in the discretion of the judge or court, so that they may be
delivered to the legitimate owner thereof.
ARTICLE 848. Claims for averages shall not be admitted if they do not exceed 5 per cent of the interest which
the claimant may have in the vessel or in the cargo if it be gross average and 1 per cent of the goods damaged if
TITLE FIVE
particular average, deducting in both cases the expenses of appraisal, unless there is an agreement to the
PROOF AND LIQUIDATION OF AVERAGES
country.

SECTION ONE
ARTICLE 849. The damages, averages, loans on bottomry and respondentia and their premiums and any other
PROVISIONS COMMON TO ALL KINDS OF AVERAGES
losses, shall not earn interest by reason of delay until after the lapse of the period of three-days, to be counted
from the day on which the liquidation may have been concluded and communicated to the persons interested in
the vessel, in the cargo, or in both at the same time.
ARTICLE 850. If by reason of one or more accidents of the sea, particular and gross averages of the vessel, of
the cargo, or of both, should take place on the same voyage, the expenses and damages corresponding to each
average shall be determined separately in the port where the repairs are made, or where the merchandise are
discharged, sold, or utilized.
For this purpose the captains shall be obliged to demand of the expert appraisers and of the contractors making
the repairs, as well as of those appraising and taking part in the unloading, repair, sale, or utilization of the
merchandise, that in their appraisements or estimates and accounts they set down separately and accurately the
expenses and damages pertaining to each average, and in those of each average those corresponding to the
vessel and to the cargo, also stating separately whether or not there are damages proceeding from inherent
defect of the thing and not from accident of the sea; and in case there should be expenses common to the
different averages and to the vessel and its cargo, the amount corresponding to each must be estimated and
stated distinctly.
SECTION TWO
LIQUIDATION OF GROSS AVERAGES
ARTICLE 851. At the instance of the captain, the adjustment, liquidation, and distribution of gross averages shall
be held privately, with the consent of all the parties in interest.
For this purpose, within forty-eight hours following the arrival of the vessel at the port, the captain shall convene
all the person interested in order that they may decide as to whether the adjustment or liquidation of the gross
average is to be made by experts and liquidators appointed by themselves, in which case it shall so done if the
interested parties agree.
If an agreement is not possible, the captain shall apply to the competent judge or court, who shall be the one in
the port where these proceedings are to be held in accordance with the provisions of this code, or to the consul
of the Republic of the Philippines should there be one, and should there be none, to the local authority when they
are to be held in a foreign port.
ARTICLE 852. If the captain does not comply with the provisions of the preceding article, the ship agent or the
shippers shall demand the liquidation without prejudice to the action they may bring to demand indemnity from
him.
ARTICLE 853. After the experts have been appointed by the persons interested, or by the court, and after the
acceptance, they shall proceed to the examination of the vessel and of the repairs required and to the appraisal
of their cost, separating these losses and damages from those arising from the inherent defect of the things.
The experts shall also declare whether the repairs may be made immediately, or whether it is necessary to
unload the vessel in order to examine and repair it.
With regard to the merchandise, if the average should be visible at a mere glance, the examination thereof must
be made before they are delivered. Should it not be visible at the time of unloading, said examination may be
made after the delivery, provided that it is done within forty-eight hours from the unloading and without prejudice
to the other proofs which the experts may deem proper.
ARTICLE 854. The valuation of the objects which are to contribute to the gross average, and that of those which
constitute the average, shall be subject to the following rules:
1. The merchandise saved which are to contribute to the payment of the gross average shall be valued
at the current price at the port of unloading, deducting the freightage, customs duties, and expenses of
unloading, as may appear from a material inspection of the same, without taking the bills of lading into
consideration unless there is an agreement to the contrary.
2. If the liquidation is to be made in the port of departure, the value of the merchandise loaded shall be
determined by the purchase price, including the expenses until they are placed on board, the insurance
premium excluded.
3. If the merchandise should be damaged, they shall be appraised at their true value.
4. If the voyage having been interrupted, the merchandise should have been sold in a foreign port, and
the average cannot be estimated, the value of the merchandise in the port of arrival, or the net
proceeds obtained at the sale thereof, shall be taken as the contributing capital.
5. Merchandise lost, which constitute the gross average, shall be appraised at the value which
merchandise of its kind may have in the port of unloading, provided that its kind and quality appear in
the bill of lading; and should they not appear, the value shall be that stated in the invoices of the
purchase issued in the port of shipment, adding thereto the expenses and freightage subsequently
arising.
6. The masts cut down, the sails, cables, and other equipment of the vessel rendered useless for the
purpose of saying it, shall be appraised at the current value, deducting one-third by reason of the
difference between new and old.
This deduction shall not be made with respect to anchors and chains.
 7. The vessel shall be appraised at its true value in the condition in which it is found.
8. The freightage shall represent 50 per cent by way of contributing capital.
ARTICLE 855. The merchandise loaded on the upper deck of the vessel shall contribute to the gross average
should they be saved; but there shall be no right to indemnity if they should be lost by reason of having been
jettisoned for common safety, except when the marine ordinances allow their shipment in this manner in
coastwise navigation.
The same shall take place with that which is on board and is not included in the bills of lading or inventories,
according to the cases.
In any case the shipowner and the captain shall be liable to the shippers for the damages from the jettison, if the
storage on the upper deck was made without the consent of the latter.
ARTICLE 856. Provisions and munitions of war which the vessel may have on board, and the clothing used by
the captain, officers, and crew, shall not contribute to the gross average. The clothing used by the shipper,
supercargoes, and passenger who may be on board at the time of the jettison, shall also be accepted.
Neither shall the goods jettisoned contribute to the payment of the gross averages which may occur to the
merchandise saved to a different and subsequent risk.
ARTICLE 857. After the appraisement of the goods saved and of those lost which constitute the gross average,
has been concluded by the experts, the repairs, if any, made on the vessel, and in this case, the accounts of the
same approved by the persons interested or by the judge or court, the entire record shall be turn over to the
liquidator appointed, in order that he may proceed with the distribution of the average.
ARTICLE 858. In order to effect the liquidation, the liquidator shall examine the protest of the captain, comparing
it, if necessary, with the log book, and all the contracts which may have been made among the persons
interested in the average, the appraisements, expert examinations, and accounts of repairs made. If, as a result
of this examination, he should find any defect in the procedure which might injure the rights of the person
interested or affect the liability of the captain, he shall call attention thereof in order that it may be corrected, if
possible, and otherwise he shall include it in the exordial of the liquidation.
Immediately thereafter he shall proceed with the distribution of the amount of the average, for which purpose he
shall fix:
1. The contributing capital, which he shall determine by the value of the cargo, in accordance with the
rules established in Article 854.
2. That of the vessel in her actual condition, according to the statement of experts.
3. The 50 per cent of the amount of the freightage, deducting the remaining 50 per cent for wages and
maintenance of the crew.
After the amount of the gross average has been determined in accordance with the provisions of this
Code, it shall be distributed pro rata among the goods which are to cover the same. cdasia
ARTICLE 859. The insurers of the vessel of the freightage and of the cargo shall be obliged to pay for the
indemnification of the gross average, insofar as is required of each one of the objects respectively.
ARTICLE 860. If, notwithstanding the jettison of merchandise, breakage of masts, ropes, and equipment, the
vessel shall be lost running the same risk, no contribution whatsoever by jettison of gross average shall be
proper.
The owners of the goods saved shall not be liable for the indemnification of those jettisoned, lost, or damaged.
ARTICLE 861. If, after the vessel has been saved from the risk which gave rise to the jettison, it should be lost
through another accident taking place during the voyage, the goods saved and existing from the first risk shall
continue liable to contribution by reason of the gross average according to their value in the condition in which
they may be found, deducting the expenses incurred in saving them.
ARTICLE 862. If, in spite of having saved the vessel and the cargo in consequence of the cutting down of masts
or of any other damage deliberately done to the vessel for said purpose, the merchandise should subsequently
be lost or stolen, the captain can not demand of the shippers or consignees that they contribute to the indemnity
for the average, unless the loss should occur by reason of an act of the owner or consignee himself.
ARTICLE 863. If the owner of the jettisoned goods should recover them after having received the indemnity for
gross average, he shall be obliged to return to the captain and to the other persons interested in the cargo the
amount he may have received, deducting the amount of the damage caused by the jettison and of the expenses
incurred in their recovery.
In this case, the amount returned shall be distributed among the vessel and the persons interested in the cargo in
the same proportion in which they contributed to the payment of the average.
ARTICLE 864. If the owner of the goods jettisoned should recover them without having demanded any indemnity,
he shall not be obliged to contribute to the payment of the gross average which may have been suffered by the
rest of the cargo after the jettison.
ARTICLE 865. The distribution of the gross average shall not be final until it has been agreed to, or in the
absence thereof, until it has been approved by the judge or court, after an examination of the liquidation and a
hearing of the persons interested who may be present or of their representatives.
ARTICLE 866. After the liquidation has been approved, it shall be the duty of the captain to collect the amount of
the contributions, and he shall be liable to the owners of the goods averaged for the damages they may suffer
through his delay or negligence.
ARTICLE 867. If the person contributing should not pay the amount of the contribution at the end of the third day
after having been required to do so, the goods saved shall be proceeded against, in the request of the captain,
until payment has been made from their proceeds.
ARTICLE 868. If the person interested in receiving the goods saved should not give security sufficient to answer
for the amount corresponding to the gross average, the captain may defer the delivery thereof until payment has
been made. aisadc
SECTION THREE
LIQUIDATION OF ORDINARY AVERAGES
ARTICLE 869. The experts whom the court or the person interested may appoint, as the case may be, shall
proceed with the examination and appraisement of the averages in the manner prescribed in Articles 853 and
854, Rules 2 to 7, insofar as they are applicable.
3. Warsaw Convention
Chapter I - Scope - Definitions
Article 1
1. This Convention applies to all international carriage of persons, luggage or goods performed by aircraft for
reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.
2. For the purposes of this Convention the expression "international carriage" means any carriage in which,
according to the contract made by the parties, the place of departure and the place of destination, whether or not
there be a break in the carriage or a transhipment, are situated either within the territories of two High
Contracting Parties, or within the territory of a single High Contracting Party, if there is an agreed stopping place
within a territory subject to the sovereignty, suzerainty, mandate or authority of another Power, even though that
Power is not a party to this Convention. A carriage without such an agreed stopping place between territories
subject to the sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not deemed to
be international for the purposes of this Convention.
3. A carriage to be performed by several successive air carriers is deemed, for the purposes of this Convention,
to be one undivided carriage, if it has been regarded by the parties as a single operation, whether it had been
agreed upon under the form of a single contract or of a series of contracts, and it does not lose its international
character merely because one contract or a series of contracts is to be performed entirely within a territory
subject to the sovereignty, suzerainty, mandate or authority of the same High Contracting Party.
Article 2
1. This Convention applies to carriage performed by the State or by legally constituted public bodies provided it
falls within the conditions laid down in Article 1.
2. This Convention does not apply to carriage performed under the terms of any international postal Convention.
Chapter II - Documents of Carriage
Section I - Passenger Ticket
Article 3
1. For the carriage of passengers the carrier must deliver a passenger ticket which shall contain the following
particulars:-
(a) the place and date of issue;
(b) the place of departure and of destination;
(c) the agreed stopping places, provided that the carrier may reserve the right to alter the stopping
places in case of necessity, and that if he exercises that right, the alteration shall not have the effect of
depriving the carriage of its international character;
 (d) the name and address of the carrier or carriers;
(e) a statement that the carriage is subject to the rules relating to liability established by this
Convention.
2. The absence, irregularity or loss of the passenger ticket does not affect the existence or the validity of the
contract of carriage, which shall none the less be subject to the rules of this Convention. Nevertheless, if the
carrier accepts a passenger without a passenger ticket having been delivered he shall not be entitled to avail
himself of those provisions of this Convention which exclude or limit his liability.
Section II - Luggage Ticket
Article 4
1. For the carriage of luggage, other than small personal objects of which the passenger takes charge himself,
the carrier must deliver a luggage ticket.
2. The luggage ticket shall be made out in duplicate, one part for the passenger and the other part for the carrier.
3. The luggage ticket shall contain the following particulars:-
(a) the place and date of issue;
(b) the place of departure and of destination;
(h) a statement that the carriage is subject to the rules relating to liability established by this
Convention.
4. The absence, irregularity or loss of the luggage ticket does not affect the existence or the validity of the
contract of carriage, which shall none the less be subject to the rules of this Convention. Nevertheless, if the
carrier accepts luggage without a luggage ticket having been delivered, or if the luggage ticket does not contain
the particulars set out at (d), (f) and (h) above, the carrier shall not be entitled to avail himself of those provisions
of the Convention which exclude or limit his liability.
Section III - Air Consignment Note
Article 5
1. Every carrier of goods has the right to require the consignor to make out and hand over to him a document
called an "air consignment note"; every consignor has the right to require the carrier to accept this document.
2. The absence, irregularity or loss of this document does not affect the existence or the validity of the contract of
carriage which shall, subject to the provisions of Article 9, be none the less governed by the rules of this
Convention.
Article 6
1. The air consignment note shall be made out by the consignor in three original parts and be handed over with
the goods.

2. The first part shall be marked "for the carrier," and shall be signed by the consignor. The second part shall be
(c) the name and address of the carrier or carriers;
marked "for the consignee"; it shall be signed by the consignor and by the carrier and shall accompany the
goods. The third part shall be signed by the carrier and handed by him to the consignor after the goods have
(d) the number of the passenger ticket; been accepted.

(e) a statement that delivery of the luggage will be made to the bearer of the luggage ticket; 3. The carrier shall sign on acceptance of the goods.

(f) the number and weight of the packages; 4. The signature of the carrier may be stamped; that of the consignor may be printed or stamped.

5. If, at the request of the consignor, the carrier makes out the air consignment note, he shall be deemed, subject
to proof to the contrary, to have done so on behalf of the consignor.
(g) the amount of the value declared in accordance with Article 22(2);
Article 7
The carrier of goods has the right to require the consignor to make out separate consignment notes when there is (n) the number of parts of the air consignment note;
more than one package.
(o) the documents handed to the carrier to accompany the air consignment note;
Article 8
(p) the time fixed for the completion of the carriage and a brief note of the route to be followed, if these
The air consignment note shall contain the following particulars:- matters have been agreed upon;

(a) the place and date of its execution; (q) a statement that the carriage is subject to the rules relating to liability established by this
Convention.
(b) the place of departure and of destination;
Article 9
(c) the agreed stopping places, provided that the carrier may reserve the right to alter the stopping
places in case of necessity, and that if he exercises that right the alteration shall not have the effect of If the carrier accepts goods without an air consignment note having been made out, or if the air consignment note
depriving the carriage of its international character; does not contain all the particulars set out in Article 8(a) to (i) inclusive and (q), the carrier shall not be entitled to
avail himself of the provisions of this Convention which exclude or limit his liability.
(d) the name and address of the consignor;
Article 10
(e) the name and address of the first carrier;
1. The consignor is responsible for the correctness of the particulars and statements relating to the goods which
(f) the name and address of the consignee, if the case so requires; he inserts in the air consignment note.

(g) the nature of the goods; 2. The consignor will be liable for all damage suffered by the carrier or any other person by reason of the
irregularity, incorrectness or incompleteness of the said particulars and statements.
(h) the number of the packages, the method of packing and the particular marks or numbers upon
them; Article 11

(i) the weight, the quantity and the volume or dimensions of the goods; 1. The air consignment note is prima facie evidence of the conclusion of the contract, of the receipt of the goods
and of the conditions of carriage.
(j) the apparent condition of the goods and of the packing;
2. The statements in the air consignment note relating to the weight, dimensions and packing of the goods, as
well as those relating to the number of packages, are prima facie evidence of the facts stated; those relating to
(k) the freight, if it has been agreed upon, the date and place of payment, and the person who is to pay
the quantity, volume and condition of the goods do not constitute evidence against the carrier except so far as
it;
they both have been, and are stated in the air consignment note to have been, checked by him in the presence of
the consignor, or relate to the apparent condition of the goods.
(l) if the goods are sent for payment on delivery, the price of the goods, and, if the case so requires, the
amount of the expenses incurred;
Article 12
(m) the amount of the value declared in accordance with Article 22 (2);
1. Subject to his liability to carry out all his obligations under the contract of carriage, the consignor has the right Article 15
to dispose of the goods by withdrawing them at the aerodrome of departure or destination, or by stopping them in
the course of the journey on any landing, or by calling for them to be delivered at the place of destination or in the 1. Articles 12, 13 and 14 do not affect either the relations of the consignor or the consignee with each other or the
course of the journey to a person other than the consignee named in the air consignment note, or by requiring mutual relations of third parties whose rights are derived either from the consignor or from the consignee.
them to be returned to the aerodrome of departure. He must not exercise this right of disposition in such a way as
to prejudice the carrier or other consignors and he must repay any expenses occasioned by the exercise of this
2. The provisions of Articles 12, 13 and 14 can only be varied by express provision in the air consignment note.
right.
Article 16
2. If it is impossible to carry out the orders of the consignor the carrier must so inform him forthwith.
1. The consignor must furnish such information and attach to the air consignment note such documents as are
3. If the carrier obeys the orders of the consignor for the disposition of the goods without requiring the production
necessary to meet the formalities of customs, octroi or police before the goods can be delivered to the
of the part of the air consignment note delivered to the latter, he will be liable, without prejudice to his right of
consignee. The consignor is liable to the carrier for any damage occasioned by the absence, insufficiency or
recovery from the consignor, for any damage which may be caused thereby to any person who is lawfully in
irregularity of any such information or documents, unless the damage is due to the fault of the carrier or his
possession of that part of the air consignment note.
agents.

4. The right conferred on the consignor ceases at the moment when that of the consignee begins in accordance
2. The carrier is under no obligation to enquire into the correctness or sufficiency of such information or
with Article 13. Nevertheless, if the consignee declines to accept the consignment note or the goods, or if he
documents.
cannot be communicated with, the consignor resumes his right of disposition.
Chapter III - Liability of the Carrier
Article 13
Article 17
1. Except in the circumstances set out in the preceding Article, the consignee is entitled, on arrival of the goods
at the place of destination, to require the carrier to hand over to him the air consignment note and to deliver the
goods to him, on payment of the charges due and on complying with the conditions of carriage set out in the air The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other
consignment note. bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board
the aircraft or in the course of any of the operations of embarking or disembarking.
2. Unless it is otherwise agreed, it is the duty of the carrier to give notice to the consignee as soon as the goods
arrive. Article 18

3. If the carrier admits the loss of the goods, or if the goods have not arrived at the expiration of seven days after 1. The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any
the date on which they ought to have arrived, the consignee is entitled to put into force against the carrier the registered luggage or any goods, if the occurrence which caused the damage so sustained took place during the
rights which flow from the contract of carriage. carriage by air.

Article 14
The consignor and the consignee can respectively enforce all the rights given them by Articles 12 and 13, each in
his own name, whether he is acting in his own interest or in the interest of another, provided that he carries out
the obligations imposed by the contract.
2. The carriage by air within the meaning of the preceding paragraph comprises the period during which the
luggage or goods are in charge of the carrier, whether in an aerodrome or on board an aircraft, or, in the case of
a landing outside an aerodrome, in any place whatsoever.
3. The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside
an aerodrome. If, however, such a carriage takes place in the performance of a contract for carriage by air, for
the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to
have been the result of an event which took place during the carriage by air.
Article 19
The carrier is liable for damage occasioned by delay in the carriage by air of passengers, luggage or goods.
Article 20
1. The carrier is not liable if he proves that he and his agents have taken all necessary measures to avoid the
damage or that it was impossible for him or them to take such measures.
2. In the carriage of goods and luggage the carrier is not liable if he proves that the damage was occasioned by
negligent pilotage or negligence in the handling of the aircraft or in navigation and that, in all other respects, he
and his agents have taken all necessary measures to avoid the damage.
Article 21
If the carrier proves that the damage was caused by or contributed to by the negligence of the injured person the
Court may, in accordance with the provisions of its own law, exonerate the carrier wholly or partly from his
liability.
Article 22
1. In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of 125,000
francs. Where, in accordance with the law of the Court seised of the case, damages may be awarded in the form
of periodical payments, the equivalent capital value of the said payments shall not exceed 125,000 francs.
Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.
2. In the carriage of registered luggage and of goods, the liability of the carrier is limited to a sum of 250 francs
per kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a
special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that
case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is
greater than the actual value to the consignor at delivery.
3. As regards objects of which the passenger takes charge himself the liability of the carrier is limited to 5,000
francs per passenger.
4. The sums mentioned above shall be deemed to refer to the French franc consisting of 65 « milligrams gold of
millesimal fineness 900. These sums may be converted into any national currency in round figures.
Article 23
Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this
Convention shall be null and void, but the nullity of any such provision does not involve the nullity of the whole
contract, which shall remain subject to the provisions of this Convention.
Article 24
1. In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought
subject to the conditions and limits set out in this Convention.
2. In the cases covered by Article 17 the provisions of the preceding paragraph also apply, without prejudice to
the questions as to who are the persons who have the right to bring suit and what are their respective rights.
Article 25
1. The carrier shall not be entitled to avail himself of the provisions of this Convention which exclude or limit his
liability, if the damage is caused by his wilful misconduct or by such default on his part as, in accordance with the
law of the Court seised of the case, is considered to be equivalent to wilful misconduct.
2. Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused as
aforesaid by any agent of the carrier acting within the scope of his employment.
Article 26
1. Receipt by the person entitled to delivery of luggage or goods without complaint is prima facie evidence that
the same have been delivered in good condition and in accordance with the document of carriage.
2. In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery
of the damage, and, at the latest, within three days from the date of receipt in the case of luggage and seven
days from the date of receipt in the case of goods. In the case of delay the complaint must be made at the latest
within fourteen days from the date on which the luggage or goods have been placed at his disposal.
3. Every complaint must be made in writing upon the document of carriage or by separate notice in writing
despatched within the times aforesaid.
4. Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on
his part.
Article 27
In the case of the death of the person liable, an action for damages lies in accordance with the terms of this
Convention against those legally representing his estate.
Article 28
1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High
Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his
principal place of business, or has an establishment by which the contract has been made or before the Court
having jurisdiction at the place of destination.
2. Questions of procedure shall be governed by the law of the Court seised of the case.
Article 29
1. The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date
of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which
the carriage stopped.
2. The method of calculating the period of limitation shall be determined by the law of the Court seised of the
case.
Article 30
1. In the case of carriage to be performed by various successive carriers and falling within the definition set out in
the third paragraph of Article 1, each carrier who accepts passengers, luggage or goods is subjected to the rules
set out in this Convention, and is deemed to be one of the contracting parties to the contract of carriage in so far
as the contract deals with that part of the carriage which is performed under his supervision.
2. In the case of carriage of this nature, the passenger or his representative can take action only against the
carrier who performed the carriage during which the accident or the delay occurred, save in the case where, by
express agreement, the first carrier has assumed liability for the whole journey.
3. As regards luggage or goods, the passenger or consignor will have a right of action against the first carrier,
and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and
further, each may take action against the carrier who performed the carriage during which the destruction, loss,
damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the
consignor or consignee.
Chapter IV - Provisions Relating to Combined Carriage
Article 31
1. In the case of combined carriage performed partly by air and partly by any other mode of carriage, the
provisions of this Convention apply only to the carriage by air, provided that the carriage by air falls within the
terms of Article 1.
2. Nothing in this Convention shall prevent the parties in the case of combined carriage from inserting in the
document of air carriage conditions relating to other modes of carriage, provided that the provisions of this
Convention are observed as regards the carriage by air.
Chapter V - General and Final Provisions
Article 32
Any clause contained in the contract and all special agreements entered into before the damage occurred by
which the parties purport to infringe the rules laid down by this Convention, whether by deciding the law to be
applied, or by altering the rules as to jurisdiction, shall be null and void. Nevertheless for the carriage of goods
arbitration clauses are allowed, subject to this Convention, if the arbitration is to take place within one of the
jurisdictions referred to in the first paragraph of Article 28.
Article 33
Nothing contained in this Convention shall prevent the carrier either from refusing to enter into any contract of
carriage, or from making regulations which do not conflict with the provisions of this Convention.
Article 34
This Convention does not apply to international carriage by air performed by way of experimental trial by air
navigation undertakings with the view to the establishment of a regular line of air navigation, nor does it apply to
carriage performed in extraordinary circumstances outside the normal scope of an air carrier's business.
Article 35
The expression "days" when used in this Convention means current days not working days.
Article 36
The Convention is drawn up in French in a single copy which shall remain deposited in the archives of the
Ministry for Foreign Affairs of Poland and of which one duly certified copy shall be sent by the Polish Government
to the Government of each of the High Contracting Parties.
Article 37
1. This Convention shall be ratified. The instruments of ratification shall be deposited in the archives of the
Ministry for Foreign Affairs of Poland, which will notify the deposit to the Government of each of the High
Contracting Parties.
2. As soon as this Convention shall have been ratified by five of the High Contracting Parties it shall come into
force as between them on the ninetieth day after the deposit of the fifth ratification. Thereafter it shall come into
force between the High Contracting Parties who shall have ratified and the High Contracting Party who deposits
his instrument of ratification on the ninetieth day after the deposit.
3. It shall be the duty of the Government of the Republic of Poland to notify to the Government of each of the
High Contracting Parties the date on which this Convention comes into force as well as the date of the deposit of
each ratification.
Article 38
1. This Convention shall, after it has come into force, remain open for accession by any State.
2. The accession shall be effected by a notification addressed to the Government of the Republic of Poland,
which will inform the Government of each of the High Contracting Parties thereof.
3. The accession shall take effect as from the ninetieth day after the notification made to the Government of the
Republic of Poland.
Article 39
1. Any one of the High Contracting Parties may denounce this Convention by a notification addressed to the
Government of the Republic of Poland, which will at once inform the Government of each of the High Contracting
Parties.
2. Denunciation shall take effect six months after the notification of denunciation, and shall operate only as
regards the Party who shall have proceeded to denunciation.
Article 40
1. Any High Contracting Party may, at the time of signature or of deposit of ratification or of accession declare
that the acceptance which he gives to this Convention does not apply to all or any of his colonies, protectorates,
territories under mandate, or any other territory subject to his sovereignty or his authority, or any territory under
his suzerainty.
2. Accordingly any High Contracting Party may subsequently accede separately in the name of all or any of his
colonies, protectorates, territories under mandate or any other territory subject to his sovereignty or to his
authority or any territory under his suzerainty which has been thus excluded by his original declaration.
3. Any High Contracting Party may denounce this Convention, in accordance with its provisions, separately or for
all or any of his colonies, protectorates, territories under mandate or any other territory subject to his sovereignty
or to his authority, or any other territory under his suzerainty.
Article 41
Any High Contracting Party shall be entitled not earlier than two years after the coming into force of this
Convention to call for the assembling of a new international Conference in order to consider any improvements
which may be made in this Convention. To this end he will communicate with the Government of the French
Republic which will take the necessary measures to make preparations for such Conference.
This Convention done at Warsaw on the 12th October, 1929, shall remain open for signature until the 31st
January, 1930.
Additional Protocol (With reference to Article 2)
The High Contracting Parties reserve to themselves the right to declare at the time of ratification or of accession
that the first paragraph of Article 2 of this Convention shall not apply to international carriage by air performed
directly by the State, its colonies, protectorates or mandated territories or by any other territory under its
sovereignty, suzerainty or authority."
4. Carriage of Goods by Sea Act (Commonwealth Act No. 65)
PUBLIC ACT NO. 521
CARRIAGE OF GOODS BY SEA ACT
Section 1. That the provisions of Public Act No. 521 of the 7th Congress of the United States, approved on April
16, 1936, be accepted, as it is hereby accepted to be made applicable to all contracts for the carriage of goods
by sea to and from Philippine ports in foreign trade: Provided, that nothing in this Act shall be construed as
repealing any existing provision of the Code of Commerce which is now in force, or as limiting its application.
Sec. 2. This Act shall take effect upon its approval. (Approved October 22, 1936).
TITLE I
Sec. 1. When used in this Act —
(a) The term "carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper.
(b) The term "contract of carriage" applies only to contracts of carriage by covered by a bill of lading or any
similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of
lading or any similar document as aforesaid issued under or pursuant to a character party from the moment at
which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the
same.
(c) The term "goods" includes goods, wares, merchandise, and articles of every kind whatsoever, except live
animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried.
(d) The term "ship" means any vessel used for the carriage of goods by sea. e) The term "carriage of goods"
covers the period from the time when the goods are loaded to the time when they are discharged from the ship.
RISKS
Sec. 2. Subject to the provisions of Section 6, under every contract of carriage of goods by sea, the carrier in
relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods shall be subject
to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth.
RESPONSIBILITIES AND LIABILITIES
Sec. 3. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to —
(a) Make the ship seaworthy;
(b) Properly man,equip, and supply the ship;
(c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods
are carried, fit and safe for their reception, carriage, and preservation.
(2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for,and discharge the goods
carried.
(3) After receiving the goods into his carrier, or the master or agent of the carrier, shall, on demand of the
shipper, issue to the shipper a bill of lading showing among other things —
(a) The loading marks necessary for identification of the goods as the same are furnished in writing by
the shipper before the loading of such goods starts, provided such marksare stamped or otherwise
shown clearly upon the goods if uncovered,in such a manner as should ordinarily remain legible until
the end of the voyage.
(b) Either the number of packages or pieces, or the quantity or weight, as the casemay be, as
furnished in writing by the shipper.
(c) The apparent order and conditions of the goods: Provided, that no carrier, master, or agent of the
carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight
which he has reasonable ground for suspecting not accurately to represent the good actually received
or which he has had no reasonable means of checking.
(4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein
described in accordance with paragraphs (3) (a), (b), and (c), of this section: (The rest of the provision is not
applicable to the Philippines).
(5) The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the
marks, number, quantity, and weight, as furnished by him; and the shipper shall indemnify the carrier against all
loss, damages, and expenses arising or resulting from inaccuracies in such particulars. The right of the carrier to
such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person
other than the shipper.
(6) Unless notice or loss or damage and the general nature of such loss or damage by given in writing to the
carrier or his agent at the port of discharge or at the time of the removal of the goods into the custody of the
person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of
the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the
notice must be given within three days of the delivery.
Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking
delivery thereof.
The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of
joint survey or inspection.
In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit
is brought within one year after delivery of the goods or the date when the goods should have been delivered:
Provided, that, if a notice of loss or damage, either apparent or concealed, is not given as provided for in this
section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery
of the goods or the date when the goods should have been delivered.
In the case of any actual or apprehended loss or damage, the carrier and the receiver shall give all reasonable
facilities to each other for inspecting and tallying the goods.
(7) After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier to the
shipper shall if the shipper so demands, be a "shipped" bill of lading: Provided, that if the shipper shall have
previously taken up any document of title to such goods, he shall surrender the same as against the issue of the
"shipped" bill of lading, but at the option of the carrier such document of title may be noted at the port of shipment
by the carrier, master, or agent with the name or names of the ship or ships upon which the goods have been
shipped and the date or dates of shipment, and when so noted the same shall for the purpose of this section be
deemed to constitute a "shipped" bill of lading.
(8) Any clause, covenant, or agreement in a contract of carriage relieving the carrier of the ship from liability for
loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and
obligations provide in this section or lessening such liability otherwise than as provided in this Act, shall be null
and void and of no effect. A benefit of insurance in favor of the carrier, or similar clause, shall be deemed to be a
clause relieving the carrier from liability.
RIGHTS AND IMMUNITIES
Sec. 4. (1) Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from
unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy
and to secure that the ship is properly manned, equipped, and supplied, and to make the holds, refrigerating and
cooling chambers, and all other parts of the ship in which goods are carried fit and safe for their reception,
carriage, and preservation, in accordance with the provisions of paragraph (1) of Section (3). Whenever loss or
damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the
carrier or other person claiming exemption under this section.
(2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from —
(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the
management of the ship;
(b) Fire, unless caused by the actual fault or privity of the carrier;
(c) Perils, dangers, and accidents of the sea or other navigable water;
(d) Act of God;
(e) Act of war;
(f) Act of public enemies;
(g) Arrest or restraint of princes, rulers, or people, or seizure under legal process;
(h) Quarantine restrictions;
(i) Act or omission of the shipper or owner of the goods, his agent or representative;
(j) Strikes or lockouts or stoppage or restraint of labor from whatever cause, whether partial or general: Provided,
that nothing herein contained shall be construed to relieve a carrier from responsibility for the carrier's own acts;
(k) Riotsand civil commotions;
(l) Saving or attempting to save life or property at sea;
(m) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the
goods;
(n) Insufficiency or packing;
(o) Insufficiency or inadequacy of marks;
(p) Latent defects not discoverable by due diligence; and
(q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the
agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this
exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or
servants of the carrier contributed to the loss or damage.
(3) The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or
resulting from any cause without the act, or neglect of the shipper, his agents, or his servants.
(4) Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be
deemed to be an infringement or breach or this Act or of the contract of carriage, and carrier shall not be liable for
any loss or damage resulting therefrom: Provided, however, that if the deviation is for the purpose of loading or
unloading cargo or passengers it shall, prima facie, be regarded as unreasonable.
(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in
connection with the transportation of goods in an amount exceeding $500 per package of lawful money of the
United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that
sum in other currency, unless the nature and value of such goods have been declared by the shipper before
shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie
evidence, but shall not be conclusive on the carrier.
By agreement between the carrier, master or agent of the carrier, and the shipper another maximum amount than
that mentioned in this paragraph may be fixed: Provided, that such maximum shall not be less than the figure
above named. In no event shall the carrier be liable for more than the amount of damage actually sustained.
Neither the carrier nor the ship shall be responsible in any event for loss damage to or in connection with the
transportation of the goods if the nature or value thereof has been knowingly and fraudulently misstated by the
shipper in the bill of lading.
(6) Goods of an inflammable, explosive, or dangerous nature to the shipment whereof, the carrier, master or
agent of the carrier, has not consented with knowledge of their nature and character, may at any time before
discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation, and
the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or
resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a
danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous
by the carrier without liability on the part of the carrier except to general average if any.
SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF RESPONSIBILITIES AND LIABILITIES
Sec. 5. A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to
increase any of his responsibilities and liabilities under this Act, provided such surrender or increase shall be
embodied in the bill of lading issued to the shipper.
The provisions of this Act shall not be applicable to charter parties; but if bills of lading are issued in the case of a
ship under a charter party, they shall comply with the terms of this Act. Nothing in this Act shall be held to prevent
the insertion in a bill of lading of any lawful provisions regarding general average.
SPECIAL CONDITIONS
Sec. 6. Notwithstanding the provisions of the preceding section, a carrier, master or agent of the carrier, and a
shipper shall, in regard to any particular goods be at liberty to enter into any agreement in any terms as to the
responsibility and liability of the carrier for such goods, and as to the rights and immunities of the carrier in
respect to such goods, or his obligation to seaworthiness, (so far as the stipulation regarding seaworthiness is
contrary to public policy), or the care or diligence of his servants or agents in regard to the loading, handling,
stowage, carriage, custody, care and discharge of the goods carried by sea; provided, that in this case no bill of
lading has been or shall be issued and that the terms agreed shall be a non-negotiable document and shall be
marked as such.
Any agreement so entered into shall have full legal effect: Provided, that this section shall not apply to ordinary
commercial shipments made in the ordinary course of trade but only to other shipments where the character or
condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to
be performed are such as reasonably to justify a special agreement.
Sec. 7. Nothing contained in this Act shall prevent a carrier or a shipper from entering into any agreement,
stipulation, condition, reservation, or exemption as to the responsibility and liability of the carrier or the ship for
the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on
and subsequent to the discharge from the ship on which the goods are carried by sea. library
Sec. 8. The provisions of this Act shall not affect the rights and obligations of the carrier under the provisions of
the Shipping Act, 1916, or under the provisions of Sections 4281 to 4292, inclusive, of the Revised Statutes of
the United States, or of any amendments thereto, or under the provisions of any other enactment for the time
being in force relating to the limitation of the liability of the owners of seagoing vessels.
TITLE II
Sec. 9. Nothing contained in this Act shall be construed as permitting a common carrier by water to discriminate
between competing shippers similarly placed in time and circumstances, either (a) with respect to their right to
demand and receive bills of lading subject to the provisions of this Act; or (b) when issuing such bills of lading
either in the surrender of any of the carrier's rights and immunities or in the increase of any of the carrier's
responsibilities and liabilities pursuant to Section 5, Title I, of this Act; (c) in any other way prohibited by the
Shipping Act, 1916, as amended.
Sec. 10. (Not applicable to the Philippines.)
Sec. 11. When under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a
weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight
as ascertained or accepted is stated in the bill of lading, then notwithstanding anything in this Act, the bill of
lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so
inserted in the bills of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been
guaranteed by the shipper.
Sec. 12. (Not applicable to the Philippines.)
Sec. 13. This Act shall apply to all contracts for carriage of goods by seas to or from ports of the United States
in foreign trade. As used in this Act the term "United States" includes its districts, territories, and possessions:
Provided, however, that the Philippine Legislature may by law exclude its application to transportation to or from
ports of the Philippine Islands. The term "foreign trade" means the transportation of goods between the ports of
the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage
of goods by sea between any port of the United States or its possessions and any other port of the United States
or its possessions: Provided, however, that any bill of lading or similar document of the title which is evidence of
a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be
subject to the provisions of this Act; shall be subjected hereto as fully as if subject hereto by the express
provisions of this Act: Provided, further, that every bill of lading or similar document of title which is evidence of a
contract for the carriage of goods by sea from ports of the United States in foreign trade, shall contain a
statement that it shall have effect subject to the provisions of this Act.
Sec. 14. Upon the certification of the Secretary of Commerce that the foreign commerce of the United States in
its competition with that of foreign nations is prejudiced by the provisions, or any of them, of the Title I of this Act,
or by the laws of any foreign country or countries relating to the carriage of goods by sea, the President of the
United States may, from time to time by proclamation, suspend any or all provisions of Title I of this Act for such
periods of time or indefinitely as may be designated in the proclamation. The President may at any time rescind
such suspension of Title I hereof, and any provisions thereof which may have been suspended shall thereby be
reinstated and again apply to contracts thereafter made for carriage of goods by sea. Any proclamation of
suspension or rescission of any such suspension shall take effect on the date named therein, which date shall be
not less than ten days from the issue of the proclamation.
Any contract for the carriage of goods by sea, subject to the provisions of this Act, effective during any period
when Title I hereof, or any part thereof, is suspended, shall be subject to all provisions of law now or hereafter
applicable to that part of Title I which may have thus been suspended.
Sec. 15. This Act shall take effect ninety days after the date of its approval; but nothing in this Act shall apply
during a period not to exceed one year following its approval to any contract for the carriage of goods by sea,
made before the date on which this Act is approved nor to any bill of lading or similar document of title issued,
whether before or after such date of approval in pursuance of any such contract as aforesaid.
Sec. 16. This Act may be cited as the "Carriage of Goods by Sea Act."
5. Salvage Law (Act No. 2616)
ACT NO. 2616 – THE SALVAGE LAW
Section 1. When in case of shipwreck, the vessel or its cargo shall be beyond the control of the crew, or shall
have been abandoned by them, and picked up and conveyed to a safe place by other persons, the latter shall be
entitled to a reward for the salvage.
Those who, not being included in the above paragraph, assist in saving a vessel or its cargo from shipwreck,
shall be entitled to a like reward.
Sec. 2. If the captain of the vessel, or the person acting in his stead, is present, no one shall take from the sea, or
from the shores or coast merchandise or effects proceeding from a shipwreck or proceed to the salvage of the
vessel, without the consent of such captain or person acting in his stead.
Sec. 3. He who shall save or pick up a vessel or merchandise at sea, in the absence of the captain of the vessel,
owner, or a representative of either of them, they being unknown, shall convey and deliver such vessel or
merchandise, as soon as possible, to the Collector of Customs, if the port has a collector, and otherwise to the
provincial treasurer or municipal mayor.
Sec. 4. After the salvage is accomplished, the owner or his representative shall have a right to the delivery of the
vessel or things saved, provided that he pays, or gives a bond to secure, the expenses and the proper reward.
The amount and sufficiency of the bond, in the absence of agreement, shall be determined by the Collector of
Customs or by the Judge of the Court of First Instance of the province in which the things saved may be found.
Sec. 5. The Collector of Customs, provincial treasurer, or municipal mayor, to whom a salvage is reported, shall
order:
a. That the things saved be safeguard and inventoried.
b. The sale at public auction of the things saved which may be in danger of immediate loss or of those whose
conservation is evidently prejudicial to the interests of the owner, when no objection is made to such sale.
c. The advertisement within the thirty days subsequent to the salvage, in one of the local newspapers or in the
nearest newspaper published, of all the details of the disaster, with a statement of the mark and number of the
effects requesting all interested persons to make their claims.
Sec. 6. If, while the vessel or things saved are at the disposition of the authorities, the owner or his representative
shall claim them, such authorities shall order their delivery to such owner or his representative, provided that
there is no controversy over their value, and a bond is given by the owner or his representative to secure the
payment of the expenses and the proper reward. Otherwise, the delivery shall nor be made until the matter is
decided by the Court of First Instance of the province.
Sec. 7. No claim being presented in the three months subsequent to the publication of the advertisement
prescribed in sub-section (c) of Section five, the things save shall be sold at public auction, and their proceeds,
after deducting the expenses and the proper reward shall be deposited in the insular treasury. If three years shall
pass without anyone claiming it, one-half of the deposit shall be adjudged to him who saved the things, and the
other half to the insular government.
Sec. 8. The following shall have no right to a reward for salvage or assistance:
a. The crew of the vessel shipwrecked or which was is danger of shipwreck;
b. He who shall have commenced the salvage in spite of opposition of the captain or his representative; and
c. He who shall have failed to comply with the provisions of Section three.
Sec. 9. If, during the danger, an agreement is entered into concerning the amount of the reward for salvage or
assistance, its validity may be impugned because it is excessive, and it may be required to be reduced to an
amount proportionate to the circumstances.
Sec. 10. In a case coming under the last preceding section, as well as in the absence of an agreement, the
reward for salvage or assistance shall be fixed by the Court of First Instance of the province where the things
salvaged are found, taking into account principally the expenditures made to recover or save the vessel or the
cargo or both, the zeal demonstrated, the time employed, the services rendered, the excessive express
occasioned the number of persons who aided, the danger to which they and their vessels were exposed as well
as that which menaced the things recovered or salvaged, and the value of such things after deducting the
expenses.
Sec. 11. From the proceeds of the sale of the things saved shall be deducted, first, the expenses of their custody,
conservation, advertisement, and auction, as well as whatever taxes or duties they should pay for their entrance;
then there shall be deducted the expenses of salvage; and from the net amount remaining shall be taken the
reward for the salvage or assistance which shall not exceed fifty per cent of such amount remaining.
Sec. 12. If in the salvage or in the rendering of assistance different persons shall have intervened the reward
shall be divided between them in proportion to the services which each one may have rendered, and, in case of
doubt, in equal parts.
Those who, in order to save persons, shall have been exposed to the same dangers shall also have a right to
participation in the reward.
Sec. 13. If a vessel or its cargo shall have been assisted or saved, entirely or partially, by another vessel, the
reward for salvage or for assistance shall be divided between the owner, the captain, and the remainder of the
crew of the latter vessel, so as to give the owner a half, the captain a fourth, and all the remainder of the crew the
other fourth of the reward, in proportion to their respective salaries, in the absence of an agreement to the
contrary. The express of salvage, as well as the reward for salvage or assistance, shall be a charge on the things
salvaged on their value.
Sec. 14. This Act shall take effect on its passage.
Enacted: February 4, 1916
6. Public Service Act (Commonwealth Act No. 146 as amended)
COMMONWEALTH ACT No. 146
THE PUBLIC SERVICE LAW
(As amended, and as modified particularly by PD No. 1, Integrated Reorganization Plan and EO 546)
CHAPTER I
ORGANIZATION
Section 1. This Act shall be known as the "Public Service Act."
Section 2. There is created under the Department of Justice a commission which shall be designated and known
as the Public Service Commission, composed of one Public Service Commissioner and five Associate
Commissioners, and which shall be vested with the powers and duties hereafter specified. Whenever the word
"Commission" is used in this Act, it shall be held to mean the Public Service Commission, and whenever the word
"Commissioner" is used in this Act it shall be held to mean the Public Service Commissioner or anyone of the
Associate Commissioners. The Public Service Commissioner and the Associate Public Service Commissioners
shall be natural born citizens and residents of the Philippines, not under thirty years of age; members of the Bar
of the Philippines, with at least five years of law practice or five years of employment in the government service
requiring a lawyer's diploma; and shall be appointed by the President of the Philippines, with the consent of the
Commission on Appointments of the Congress of the Philippines: Provided, however, That the present
Commissioner and the personnel of the Commission shall continue in office without the necessity of re-
appointment. The Commissioners shall have the rank and privilege of retirement of Judges of the Courts of First
Instance. (As amended by Republic Act Nos. 178 and 2677)
Section 3. The Commissioner and Associate Commissioners shall hold office until they reach the age of seventy
years, or until removed in accordance with the procedures prescribed in section one hundred and seventy-three
of Act Numbered Twenty-seven hundred and eleven, known as the Revised Administrative Code: Provided,
however, That upon retirement any Commissioner of Associate Commissioner shall be entitled to all retirement
benefits and privileges for Judges of the Courts of First Instance or under the retirement law to which he may be
entitled on the date of his retirement. In case of the absence, for any reason, of the Public Service
Commissioner, the Associate Commissioner with seniority of appointment shall act as Commissioner. If on
account of absence, illness, or incapacity of any of three Commissioners, or whenever by reason of temporary
disability of any Commissioner or of a vacancy occurring therein, the requisite number of Commissioners
necessary to render a decision or issue an order in any case is not present, or in the event of a tie vote among
the Commissioners, the Secretary of Justice may designate such number of Judges of the Courts of First
Instance, or such number of attorneys of the legal division of the Commission, as may be necessary to sit
temporarily as Commissioners in the Public Service Commission.
The Public Service Commission shall sit individually or as a body en banc or in two divisions of three
Commissioners each. The Public Service Commissioner shall preside when the Commission sits en banc and in
one division. In the other division, the Associate Commissioner with seniority of appointment in that division shall
preside. Five Commissioners shall constitute a quorum for sessions en banc and two Commissioners shall
constitute a quorum for the sessions of a division. In the absence of a quorum, the session shall be adjourned
until the requisite number is present.
All the powers herein vested upon the Commission shall be considered vested upon any of the Commissioners,
acting either individually or jointly as hereinafter provided. The Commissioners shall equitably divide among
themselves all pending cases and those that may hereafter be submitted to the Commissioner, in such manner
and form as they may determine, and shall proceed to hear and determine the case assigned to each or to their
respective divisions, or to the Commission en banc as follows: uncontested cases, except those pertaining to the
fixing of rates, shall be decided by one Commissioner; contested cases and all cases involving the fixing of rates
shall be decided by the Commission in division and the concurrence of at least two Commissioners in the division
shall be necessary for the promulgation of a decision or non-interlocutory order in these cases: Provided,
however, That any motion for reconsideration of a decision or non-interlocutory order of any Commissioner or
division shall be heard directly by the Commission en banc and the concurrence of at least four Commissioners
shall be necessary for the promulgation of a final decision or order resolving such motion for reconsideration. (As
amended by Republic Act Nos. 723 and 2677)
Section 4. The Public Service Commissioner shall receive an annual compensation of thirteen thousand pesos;
and each of the Associate Commissioners an annual compensation of twelve thousand pesos. The
Commissioners shall be assisted by one chief attorney, one finance and rate regulation officer, one chief utilities
regulation engineer, one chief accountant, one transportation regulation chief, one secretary of the Public Service
Commission, and three public utilities advisers who shall receive an annual compensation of not less than ten
thousand eight hundred pesos each; five assistant chiefs of division who shall receive an annual compensation of
not less than nine thousand six hundred pesos each; twelve attorneys who shall receive an annual compensation
of not less than nine thousand pesos each; and a technical and confidential staff to be composed of two certified
public accounts, two electrical engineers, two mechanical or communication engineers, and two special
assistants who shall receive an annual compensation of not less than seven thousand two hundred pesos each.
(As amended by Republic Act Nos. 723, 2677 and 3792)
Section 5. The Public Service Commissioner, the Associate Public Service Commissioners, and all other officers
and employees of the Public Service Commission shall enjoy the same privileges and rights as the officer and
employees of the classified civil service of the Government of the Philippines. They shall also be entitled to
receive from the Government of the Philippines their necessary travelling expenses while travelling on the
business of the Commission, which shall be paid on proper voucher therefor, approved by the Secretary of
Justice, out of funds appropriated for the contingent expenses of the Commission.
When the exigency of the service so requires and with the approval of the Secretary of Justice, and subject to the
provisions of Commonwealth Act Numbered Two hundred forty-six, as amended, funds may be set aside from
the appropriations provided for the Commission and/or from the fees collected under Section forty of this Act to
defray the expenses to be incurred by the Public Service Commissioner or any of the Associate Commissioners,
officers or employees of the Commission to be designated by the Commissioner, with the approval of the
Secretary of Justice, in the study of modern trends in supervision and regulation of public services. (As amended
by Republic Act No. 3792)
Section 6. The Secretary of Justice, upon recommendation of the Public Service Commissioner, shall appoint all
subordinate officers and employees of the Commission as may be provided in the Appropriation Act. The Public
Service Commissioner shall have general executive control, direction, and supervision over the work of the
Commission and of its members, body and personnel, and over all administrative business. (As amended by
Republic Act Nos. 178 and 3792)
Section 7. The Secretary of the Commission, under the direction of the Commissioner, shall have charge of the
administrative business of the Commission and shall perform such other duties as may be required of him. He
shall be the recorder and official reporter of the proceedings of the Commission and shall have authority to
administer oaths in all matters coming under the jurisdiction of the Commission. He shall be the custodian of the
records, maps, profiles, tariffs, itineraries, reports, and any other documents and papers filed with the
Commission or entrusted to his care and shall be responsible therefor to the Commission. He shall have authority
to designate from time to time any of his delegates to perform the duties of Deputy Secretary with any of the
Commissioners.
Section 8. The Commission shall furnish the Secretary such of its findings and decisions as in its judgment may
be of general public interest; the Secretary shall compile the same for the purpose of publication in a series of
volumes to be designated "Reports of the Public Service Commission of the Philippines," which shall be
published in such form and manner as may be best adapted for public information and use, and such authorized
publications shall be competent evidence of the reports and decisions of the Commission therein contained
without any further proof or authentication thereof.
Section 9. No member or employee of the Commission shall have any official or professional relation with any
public service as herein defined, or hold any office of profit or trust with the Government of the Philippines.
Section 10. The Commission shall have its office in the City of Manila or at such other place as may be
designated, and may hold hearings on any proceedings at such times and places, within the Philippines, as it
may provide by order in writing: Provided, That during the months of April and May of each year, at least three
Commissioners shall be on vacation in such manner that once every two years at least three of them shall be on
duty during April and May: Provided, however, That in the interest of public service, the Secretary of Justice may
require any or all the Commissioners not on duty to render services and perform their duties during the vacation
months. (As amended by Republic Act Nos. 176 and 3792)
Section 11. The Commission shall have the power to make needful rules for its Government and other
proceedings not inconsistent with this Act and shall adopt a common seal, and judicial notice shall be taken for
such seal. True copies of said rules and other amendments shall be promptly furnished to the Bureau of Printing
and shall be forthwith published in the Official Gazette.
CHAPTER II
JURISDICTION, POWERS AND DUTIES OF THE COMMISSION
Section 13. (a) The Commission shall have jurisdiction, supervision, and control over all public services and their
franchises, equipment, and other properties, and in the exercise of its authority, it shall have the necessary
powers and the aid of the public force: Provided, That public services owned or operated by government entities
or government-owned or controlled corporations shall be regulated by the Commission in the same way as
privately-owned public services, but certificates of public convenience or certificates of public convenience and
necessity shall not be required of such entities or corporations: And provided, further, That it shall have no
authority to require steamboats, motor ships and steamship lines, whether privately-owned, or owned or operated
by any Government controlled corporation or instrumentality to obtain certificate of public convenience or to
prescribe their definite routes or lines of service.
(b) The term "public service" includes every person that now or hereafter may own, operate, manage, or control
in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or
accidental, and done for general business purposes, any common carrier, railroad, street railway, traction
railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether
may be its classification, freight or carrier service of any class, express service, steamboat or steamship line,
pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine
railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system,
gas, electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless
communications system, wire or wireless broadcasting stations and other similar public services: Provided,
however, That a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and
uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or
compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for
operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or
their farm, the transportation, processing, and marketing of agricultural products of such third party or third
parties shall not be considered as operating a public service for the purposes of this Act.
(c) The word "person" includes every individual, co-partnership, joint-stock company or corporation, whether
domestic or foreign, their lessees, trustees, or receivers, as well as any municipality, province, city, government-
owned or controlled corporation, or agency of the Government of the Philippines, and whatever other persons or
entities that may own or possess or operate public services. (As amended by Com. Act 454 and RA No. 2677)
Section 14. The following are exempted from the provisions of the preceding section:
(a) Warehouses;
(b) Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and lighters;
(c) Airships within the Philippines except as regards the fixing of their maximum rates on freight and passengers;
(d) Radio companies except with respect to the fixing of rates;
(e) Public services owned or operated by any instrumentality of the National Government or by any government-
owned or controlled corporation, except with respect to the fixing of rates. (As amended by Com. Act 454, RA No.
2031, and RA No. 2677 )
Section 15. With the exception of those enumerated in the preceding section, no public service shall operate in
the Philippines without possessing a valid and subsisting certificate from the Public Service Commission known
as "certificate of public convenience," or "certificate of public convenience and necessity," as the case may be, to
the effect that the operation of said service and the authorization to do business will promote the public interests
in a proper and suitable manner.
The Commission may prescribe as a condition for the issuance of the certificate provided in the preceding
paragraph that the service can be acquired by the Republic of the Philippines or any instrumentality thereof upon
payment of the cost price of its useful equipment, less reasonable depreciation; and likewise, that the certificate
shall be valid only for a definite period of time; and that the violation of any of these conditions shall produce the
immediate cancellation of the certificate without the necessity of any express action on the part of the
Commission.
In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model, or
other circumstances affecting its value in the market shall be taken into consideration.
The foregoing is likewise applicable to any extension or amendment of certificates actually in force and to those
which may hereafter be issued, to permit to modify itineraries and time schedules of public services, and to
authorizations to renew and increase equipment and properties.
Section 16. Proceedings of the Commission, upon notice and hearing. - The Commission shall have power, upon
proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and
exceptions mentioned and saving provisions to the contrary :
(a) To issue certificates which shall be known as certificates of public convenience, authorizing the operation of
public service within the Philippines whenever the Commission finds that the operation of the public service
proposed and the authorization to do business will promote the public interest in a proper and suitable manner.
Provided, That thereafter, certificates of public convenience and certificates of public convenience and necessity
will be granted only to citizens of the Philippines or of the United States or to corporations, co-partnerships,
associations or joint-stock companies constituted and organized under the laws of the Philippines; Provided, That
sixty per centum of the stock or paid-up capital of any such corporations, co-partnership, association or joint-
stock company must belong entirely to citizens of the Philippines or of the United States: Provided, further, That
no such certificates shall be issued for a period of more than fifty years.
(b) To approve, subject to constitutional limitations any franchise or privilege granted under the provisions of Act
No. Six Hundred and Sixty-seven, as amended by Act No. One Thousand and twenty-two, by any political
subdivision of the Philippines when, in the judgment of the Commission, such franchise or privilege will properly
conserve the public interests, and the Commission shall in so approving impose such conditions as to
construction, equipment, maintenance, service, or operation as the public interests and convenience may
reasonably require, and to issue certificates of public convenience and necessity when such is required or
provided by any law or franchise.
(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as
commutation, mileage, kilometrage, and other special rates which shall be imposed observed and followed
thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed
by public services provisionally and without necessity of any hearing; but it shall call a hearing thereon within
thirty days, thereafter, upon publication and notice to the concerns operating in the territory affected: Provided,
further, That in case the public service equipment of an operator is used principally or secondarily for the
promotion of a private business, the net profits of said private business shall be considered in relation with the
public service of such operator for the purpose of fixing the rates.
(d) To fix just and reasonable standards, classifications, regulations, practices, measurement, or service to be
furnished, imposed, observed, and followed thereafter by any public service.
(e) To ascertain and fix adequate and serviceable standards for the measurement of quantity, quality, pressure,
initial voltage, or other condition pertaining to the supply of the product or service rendered by any public service,
and to prescribe reasonable regulations for the examination and test of such product or service and for the
measurement thereof.
(f) To establish reasonable rules, regulations, instructions, specifications, and standards, to secure the accuracy
of all meters and appliances for measurements.
(g) To compel any public service to furnish safe, adequate, and proper service as regards the manner of
furnishing the same as well as the maintenance of the necessary material and equipment.
(h) To require any public service to establish, construct, maintain, and operate any reasonable extension of its
existing facilities, where in the judgment of said Commission, such extension is reasonable and practicable and
will furnish sufficient business to justify the construction and maintenance of the same and when the financial
condition of the said public service reasonably warrants the original expenditure required in making and operating
such extension.
(i) To direct any railroad, street railway or traction company to establish and maintain at any junction or point of
connection or intersection with any other line of said road or track, or with any other line of any other railroad,
street railway or traction to promote, such just and reasonable connection as shall be necessary to promote the
convenience of shippers of property, or of passengers, and in like manner direct any railroad, street railway, or
traction company engaged in carrying merchandise, to construct, maintain and operate, upon reasonable terms,
a switch connection with any private sidetrack which may be constructed by any shipper to connect with the
railroad, street railway or traction company line where, in the judgment of the Commission, such connection is
reasonable and practicable and can be out in with safety and will furnish sufficient business to justify the
construction and maintenance of the same.
(j) To authorize, in its discretion, any railroad, street railway or traction company to lay its tracks across the tracks
of any other railroad, street railway or traction company or across any public highway.
(k) To direct any railroad or street railway company to install such safety devices or about such other reasonable
measures as may in the judgment of the Commission be necessary for the protection of the public are passing
grade crossing of (1) public highways and railroads, (2) public highways and streets railway, or (3) railways and
street railways.
(l) To fix and determine proper and adequate rates of depreciation of the property of any public service which will
be observed in a proper and adequate depreciation account to be carried for the protection of stockholders,
bondholders or creditors in accordance with such rules, regulations, and form of account as the Commission may
prescribe. Said rates shall be sufficient to provide the amounts required over and above the expense of
maintenance to keep such property in a state of efficiency corresponding to the progress of the industry. Each
public service shall conform its depreciation accounts to the rates so determined and fixed, and shall set aside
the moneys so provided for out of its earnings and carry the same in a depreciation fund. The income from
investments of money in such fund shall likewise be carried in such fund. This fund shall not be expended
otherwise than for depreciation, improvements, new construction, extensions or conditions to the properly of such
public service.
(m) To amend, modify or revoke at any time certificate issued under the provisions of this Act, whenever the facts
and circumstances on the strength of which said certificate was issued have been misrepresented or materially
changed.
(n) To suspend or revoke any certificate issued under the provisions of this Act whenever the holder thereof has
violated or willfully and contumaciously refused to comply with any order rule or regulation of the Commission or
any provision of this Act: Provided, That the Commission, for good cause, may prior to the hearing suspend for a
period not to exceed thirty days any certificate or the exercise of any right or authority issued or granted under
this Act by order of the Commission, whenever such step shall in the judgment of the Commission be necessary
to avoid serious and irreparable damage or inconvenience to the public or to private interests.
(o) To fix, determine, and regulate, as the convenience of the state may require, a special type for auto-busses,
trucks, and motor trucks to be hereafter constructed, purchased, and operated by operators after the approval of
this Act; to fix and determine a special registration fee for auto-buses, trucks, and motor trucks so constructed,
purchased and operated: Provided, That said fees shall be smaller than more those charged for auto-busses,
trucks, and motor trucks of types not made regulation under the subsection.
Section 17. Proceedings of Commission without previous hearing. - The Commission shall have power without
previous hearing, subject to established limitations and exception and saving provisions to the contrary:
(a) To investigate, upon its own initiative, or upon complaint in writing, any matter concerning any public service
as regards matters under its jurisdiction; to require any public service to furnish safe, adequate, and proper
service as the public interest may require and warrant; to enforce compliance with any standard, rule, regulation,
order or other requirement of this Act or of the Commission, and to prohibit or prevent any public service as
herein defined from operating without having first secured a certificate of public convenience or public necessity
and convenience, as the case may be and require existing public services to pay the fees provided for in this Act
for the issuance of the proper certificate of public convenience or certificate of public necessity and convenience,
as the case may be, under the penalty, in the discretion by the Commission, of the revocation and cancellation of
any acquired rights.
(b) To require any public service to pay the actual expenses incurred by the Commission in any investigation if it
shall be found in the same that any rate, tool, charge, schedule, regulation, practice, act or service thereof is in
violation of any provision of this Act or any certificate, order, rule, regulation or requirement issued or established
by the Commission. The Commission may also assess against any public service costs not to exceed twenty-five
pesos with reference to such investigation.
(c) From time to time appraise and value the property of any public service, whenever in the judgment of the
Commission it shall be necessary so to do, for the purpose of carrying out any of the provisions of this Act, and in
making such valuation the Commission may have access to and use any books, documents, or records in the
possession of any department, bureau, office, or board of the government of the Philippines or any political
subdivision thereof.
(d) To provide, on motion by or at the request of any consumer or user of a public service, for the examination
and test of any appliance used for the measuring of any product or service of a public service, and for that
purpose, by its agents, experts, or examiners to enter upon any premises where said appliances may be, and
other premises of the public service, for the purpose of setting up and using on said premises any apparatus
necessary therefor. and to fix the fees to be paid by any consumer or user who may apply to the Commission for
such examination or test to be made, and if the appliance be found defective or incorrect to the disadvantage of
the consumer or user to require the fees paid to be refunded to the consumer or user by the public service
concerned.
(e) To permit any street railway or traction company to change its existing gauge to standard steam railroad
gauge, upon such terms and conditions as the Commission shall prescribe.
(h) To require any public service to furnish annual reports of finances and operations. Such reports shall set forth
in detail the capital stock issued, the amounts of said capital stock paid up and the form of payment thereof; the
dividends paid, the surplus, if any and the number of stockholders, the consolidated and pending obligations and
the interest paid thereon; the cost and value of the property of the operator; concessions or franchises and
equipment; the number of employees and salaries paid to each class; the accidents to passengers, employees,
and other person, and the causes thereof; the annual expenditures on improvements; the manner of their
investment and nature of such improvements; the receipts and profits in each of the branches of the business
and of whatever source; the operating and other expenses; the balance of profits and losses; and a complete
statement of the annual financial operations of the operator, including an annual balance sheet. Such reports
shall also contain any information which the Commission may require concerning freight and passenger rates, or
agreements, compromises or contracts affecting the same. Said reports shall cover a period of twelve months,
ending on December thirty-first of each year, and shall be sworn to by the officer or functionary of the public
service authorized therefor. The Commission shall also have power to require from time to time special reports
containing such information as above provided for or on other matters as the Commission may deem necessary
or advisable.
(i) To require every public service to file with the Commission a statement in writing, verified by the oaths of the
owner or the president and the secretary thereof, if a corporation, setting forth the name, title of office or portion,
and post-office address, and the authority, power and duties of every officer, member of the board of directors,
trustees executive committee, superintendent, chief or head of construction and operation thereof, in such form
as to disclose the source and origin of each administrative act, rule, decision, order or other action of the operator
of such public service; and, within ten days after any change is made in the title of, or authority, powers or duties
appertaining to any such office or position, or the person holding the same, filed with the Commission a like
statement, verified in like manner, setting forth such change.
(j) To require any public service to comply with the laws of the Philippines and with any provincial resolution or
municipal ordinance relating thereto and to conform to the duties imposed upon it thereby or by the provisions of
its own character, whether obtained under any general or special law of the Philippines.

(k) To investigate any or all accidents that may occur on the property of any public service or directly or indirectly
(f) To grant to any public service special permits to make extra or special trips within the territory covered by its
arising from or connected with its maintenance or operation in the Philippines; to require any public service to
certificates of public convenience, and to make special excursion trips outside of its own territory if the public
give the Commission immediate and effective notice of all any such accidents, and to make such order or
interest or special circumstances required it: Provided, however, that in case a public service cannot render such
recommendation with respect thereto as the public interest may warrant or require.
extra service on its own line or in its own territory, a special permit for such extra service may be granted to any
other public service.
(l) To require every public service s herein defined to file within complete schedules of every classification
employed and of every individual or joint rate, toll fare or charge made, charged or exacted by it for any product
(g) To require any public service to keep its books, records, and accounts so as to afford an intelligent
supplied or service rendered within the Philippines and, in the case of public carriers, to file with it a statement
understanding of the conduct of its business and to that end to require every such public service of the same
showing the itineraries or routes served as specified in such requirement.
class to adopt a uniform system of accounting. Such system conform to any system approved and confirmed by
the Auditor General.
CHAPTER III
OPERATORS OF PUBLIC SERVICES REGULATIONS AND PROHIBITIONS
Section 18. It shall be unlawful for any individual, co-partnership, association, corporation or joint-stock company,
their lessees, trustees or receivers appointed by any court whatsoever, or any municipality, province, or other
department of the Government of the Philippines to engage in any public service business without having first
secured from the Commission a certificate of public convenience or certificate of public convenience and
necessity as provided for in this Act, except grantees of legislative franchises expressly exempting such grantees
from the requirement of securing a certificate from this Commission as well as concerns at present existing
expressly exempted from the jurisdiction of the Commission, either totally or in part, by the provisions of section
thirteen of this Act.
Section 19. Unlawful Acts. - It shall be unlawful for any public service:
(a) To provide or maintain any service that is unsafe, improper, or inadequate or withhold or refuse any service
which can reasonably be demanded and furnished, as found and determined by the Commission in a final order
which shall be conclusive and shall take effect in accordance with this Act, upon appeal of otherwise.
(b) To make or give, directly or indirectly, by itself or through its agents, attorneys or brokers, or any of them,
discounts or rebates on authorized rates, or grant credit for the payment of freight charges, or any undue or
unreasonable preference or advantage to any person of corporation or to any locality or to any particular
description of traffic or service, or subject any particular person or corporation or locality or any particular
description of traffic to any prejudice or disadvantage in any respect whatsoever; to adopt, maintain, or enforce
any regulation, practice or measurement which shall be found or determined by the Commission to be unjust,
unreasonable, unduly preferential or unjustly discriminatory in a final order which shall be conclusive and shall
take effect in accordance with the provisions of this Act, upon repeal or otherwise.
(c) To refuse or neglect, when requested by the Director of Posts or his authorized representative, to carry public
mail on the regular trips of any public land transportation service maintained or operated by any such public
service; upon such terms and conditions and for a consideration in such amount as may be agreed upon
between the Director of Posts and the public service carrier of fixed by the Commission in the absence of an
agreement between the Director of Posts and the carrier. In case the Director of Posts and public service carrier
are unable to agree on the amount of the compensation to be paid for the carriage of the mail, the Director of
Posts shall forthwith request the Commission to fix a just and reasonable compensation for such carriage and the
same shall be promptly fixed by the Commission in accordance with Section sixteen of this Act.
Section 20. Acts requiring the approval of the Commission. - Subject to established limitations and exceptions
and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or
operator thereof, without the approval and authorization of the Commission previously had -
(a) To adopt, establish, fix, impose, maintain, collect or carry into effect any individual or joint rates, commutation,
mileage or other special rate, toll, fare, charge, classification or itinerary. The Commission shall approve only
those that are just and reasonable and not any that are unjustly discriminatory or unduly preferential, only upon
reasonable notice to the public services and other parties concerned, giving them a reasonable opportunity to be
heard and the burden of the proof to show that the proposed rates or regulations are just and reasonable shall be
upon the public service proposing the same.
(b) To establish, construct, maintain, or operate new units or extend existing facilities or make any other addition
to or general extension of the service.
(c) To abandon any railroad station or stop the sale of passenger tickets, or cease to maintain an agent to
receive and discharge freight at any station now or hereafter established at which passenger tickets are now or
may hereafter be regularly sold, or at which such agent is now or may hereafter be maintained, or make any
permanent change in its time tables or itineraries on any railroad or in its service.
(d) To lay any railroad or street railway track across any highway, so as to make a new crossing at grade, or
cross the tracks of any other railroad or street railway, provided, that this subsection shall not apply to
replacements of lawfully existing tracks.
(e) Hereafter to issue any stock or stock certificates representing an increase of capital; or issue any share of
stock without par value; or issue any bonds or other evidence of indebtedness payable in more than one year
from the issuance thereof, provided that it shall be the duty of the Commission, after hearing, to approve any
such issue maturing in more than one year from the date thereof, when satisfied that the same is to be made in
accordance with law, and the purpose of such issue be approved by the Commission. (f) To capitalize any
franchise in excess of the amount, inclusive of any tax or annual charge, actually paid to the Government of the
Philippines or any political subdivision thereof as the consideration of said franchise; capitalize any contract for
consolidation, merger or lease, or issue any bonds or other evidence of indebtedness against or as a lien upon
any contract for consolidation, merger, or lease: Provided, however, that the provisions of this section shall not
prevent the issuance of stock, bonds, or other evidence of indebtedness subject to the approval of the
Commission by any lawfully merged or consolidated public services not in contravention of the provisions of this
section.
(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights or any
part thereof; or merge or consolidate its property, franchises privileges or rights, or any part thereof, with those of
any other public service. The approval herein required shall be given, after notice to the public and hearing the
persons interested at a public hearing, if it be shown that there are just and reasonable grounds for making the
mortgaged or encumbrance, for liabilities of more than one year maturity, or the sale, alienation, lease, merger,
or consolidation to be approved, and that the same are not detrimental to the public interest, and in case of a
sale, the date on which the same is to be consummated shall be fixed in the order of approval: Provided,
however, that nothing herein contained shall be construed to prevent the transaction from being negotiated or
completed before its approval or to prevent the sale, alienation, or lease by any public service of any of its
property in the ordinary course of its business.
(h) To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that sale in itself
or in connection with another previous sale, shall be to vest in the transferee more than forty per centum of the
subscribed capital of said public service. Any transfer made in violation of this provision shall be void and of no
effect and shall not be registered in the books of the public service corporation. Nothing herein contained shall be
construed to prevent the holding of shares lawfully acquired. (As amended by Com. Act No. 454.)
(i) To sell, alienate or in any manner transfer shares of its capital stock to any alien if the result of that sale,
alienation, or transfer in itself or in connection with another previous sale shall be the reduction to less than sixty
per centum of the capital stock belonging to Philippine citizens. Such sale, alienation or transfer shall be void and
of no effect and shall be sufficient cause for ordering the cancellation of the certificate.
(j) To issue, give or tender, directly or indirectly, any free ticket free pass or free or reduced rate of transportation
for passengers, except to the following persons: (1) officers, agents, employees, attorneys, physicians and
surgeons of said public service, and members of their families; (2) inmates of hospitals or charity institutions, and
persons engaged in charitable work; (3) indigent, destitute, and homeless persons when transported by
charitable societies or hospitals, and the necessary agents employed in such transportation; (4) the necessary
caretakers, going and returning, of livestock, poultry, fruit, and other freight under uniform and non-discriminatory
regulation; (5) employees of sleeping car corporations, express corporations and telegraph and telephone
corporations, railway and marine mail service employees, when traveling in the course of their official duly; (6)
post-office inspectors, customs officers and inspectors, and immigration inspectors when engaged in inspection;
(7) witnesses attending any legal investigation in which the public service is an interested party; (8) persons
injured in accidents or wrecks, and physicians and nurses attending such persons; (9) peace officers and men of
regularly constituted fire departments. (As amended by Com. Act No. 454.)
(k) Adopt, maintain, or apply practices or measures, rules or regulations to which the public shall be subject in its
relations with the public service.
CHAPTER IV
PENALTIES FOR VIOLATIONS
Section 21. Every public service violating or failing to comply with the terms and conditions of any certificate or
any orders, decisions or regulations of the Commission shall be subject to a fine of not exceeding two hundred
pesos per day for every day during which such default or violation continues; and the Commission is hereby
authorized and empowered to impose such fine, after due notice and hearing.
The fines so imposed shall be paid to the Government of the Philippines through the Commission, and failure to
pay the fine in any case within the same specified in the order or decision of the Commission shall be deemed
good and sufficient reason for the suspension of the certificate of said public service until payment shall be made.
Payment may also be enforced by appropriate action brought in a court of competent jurisdiction. The remedy
provided in this section shall not be a bar to, or affect any other remedy provided in this Act but shall be
cumulative and additional to such remedy or remedies.
Section 22. Observance of the orders, decisions, and regulations of the Commission and of the terms and
conditions of any certificate may also be enforced by mandamus or injunction in appropriate cases, or by action
to compel the specific performance of the orders, decisions, and regulations so made, or of the duties imposed
by law upon such public service: Provided, that the Commission may compromise any case that arise under this
Act in such manner and for such amount as it may deem just and reasonable.
Section 23. Any public service corporation that shall perform, commit, or do any act or thing forbidden or
prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be done or performed, shall be
punished by a fine not exceeding twenty-five thousand pesos, or by imprisonment not exceeding five years, or
both, in the discretion of the court.
Section 24. Any person who shall knowingly and willfully perform, commit, or do, or participate in performing,
committing, or doing, or who shall knowingly and willfully cause, participate, or join with others in causing any
public service corporation or company to do, perform or commit, or who shall advice, solicit, persuade, or
knowingly and willfully instruct, direct, or order any officer, agent, or employee of any public service corporation
or company to perform, commit, or do any act or thing forbidden or prohibited by this Act, shall be punished by a
fine not exceeding two thousand pesos, or imprisonment not exceeding two years, or both, in the discretion of the
court: Provided, however, that for operating a private passenger automobile as a public service without having a
certificate of public convenience for the same the offender shall be subject to the penalties provided for in section
sixty-seven (j) of Act numbered thirty-nine hundred an ninety-two.
Section 25. Any person who shall knowingly and willfully neglect, fail, or omit to do or perform, or who shall
knowingly and willfully cause or join or participate with others in causing any public service corporation or
company to neglect, fail or omit to do or perform, or who shall advise, solicit, or persuade, or knowingly and
willfully instruct, direct, or order any officer, agent, or employee of any public service corporation or company to
neglect, fail, or omit to do any act or thing required to be done by this Act, shall be published by a fine not
exceeding two thousand pesos or by imprisonment not exceeding two years, or both, in the discretion of the
court.
Section 26. Any person who shall destroy, injure, or interfere with any apparatus or appliance owned or operated
by to in charge of the Commission or its agents, shall be deemed guilty of a misdemeanor and upon conviction
shall be published by a fine not exceeding one thousand pesos or imprisonment not exceeding six months, or
both in the discretion of the court.
Any public service permitting the destruction, injury to, or interference with, any such apparatus or appliances
shall forfeit a sum not exceeding four thousand pesos for each offense.
Section 27. This Act shall not have the effect to release or waive any right of action by the Commission or by any
person for any right, penalty, or forfeiture which may have arisen or which may arise, under any of the laws of the
Philippines, and any penalty or forfeiture enforceable under this Act shall not be a bar to or affect a recovery for a
right, or affect or bar any criminal proceedings against any public service or person or persons operating such
public services, its officers, directors, agents, or employees.
Section 28. Violations of the orders, decisions, and regulations of the Commission and of the terms and
conditions of any certificate issued by the Commission shall prescribe after sixty days, and violations of the
provisions of this Act shall prescribe after one hundred and eighty days.
CHAPTER V
PROCEDURE AND REVIEW
Section 29. All hearings and investigations before the Commission shall be governed by rules adopted by the
Commission, and in the conduct thereof the Commission shall not be bound by the technical rules of legal
evidence: Provided, That the Public Service Commissioner or associate commissioners may summarily punish
for contempt by a fine not exceeding two hundred pesos or by imprisonment not exceeding ten days, or both, any
person guilty of misconduct in the presence of the Commissioner or associate commissioners or so near the
same as to interrupt the hearing or session or any proceeding before them, including cases in which a person
present at a hearing, session, or investigation held by either of the commissioners refuses to be sworn as a
witness or to answer as such when lawfully required to do so. To enforce the provisions of this section, the
Commission may, if necessary, request the assistance of the municipal police for the execution of any order
made for said purpose.
(1) While the Commission is authorized to make rules for the conduct of their business, it could not set at naught
the fundamental rule of all proceedings that only parties having a real interest will be heard.
(2) A party not affected or prejudiced cannot file an opposition.
(3) One public service corporation cannot assume the name and be substituted in the place of another public
service corporation.
(4) A legal representative of the estate of a deceased applicant may be substituted for the latter. If the right
consists in the prosecution of unfinished proceedings upon an application for a certificate of public convenience
of the deceased before the Public service Commission, it is but logical that the legal representative be
empowered and entitled in behalf of the estate to make the right effective in that proceeding.
(5) One who has been granted a legislative franchise to operate an ice plant, although not yet an operator of
such public utility, has sufficient interest or personality either to oppose an established operator's application for
an increase in the capacity of his existing plant, or to ask for a joint hearing of said application and the grantee's
own application for the issuance of a certificate of public convenience in order to operate under such franchise.
(6) The fact that a party is the lessee of a line does not bar him from applying for a certificate of its own in the
same line. Even in cases where the owner of a certificate has sold it subject to the condition that he would not
apply for a similar service on the same line sold by him, it has been held that such an argument does not bar the
seller from applying and that the Public Service Commission, if it finds that there is public need for the new
service applied for, may properly grant the certificate requested. In other words the primary consideration is a
finding by the Commission that public interest and convenience require a given service and that parties may not
by agreement deprive the Commission of its power.
(7) A case involving the grant of a Certificate of Public Convenience to the respondent becomes moot and
academic where the respondent ceases to be a bus operator, and it should be dismissed.
Section 30. (a) The Commission may issue subpoenas and subpoenas duces tecum, for witnesses in any matter
or inquiry pending before the Commission and require the production of all books, papers, tariffs, contracts,
agreements, and all other documents, which the Commission may deem necessary in any proceeding. such
process shall be issued under the seal of the Commission, signed by one of the Commissioners or by the
secretary, and may be served by any person of full age, or by registered mail. In case of disobedience to such
subpoena, the Commission may invoke the said of the Supreme Court or of any Court of First Instance of the
Philippines in requiring the attendance and testimony of witness and the production of books, papers, and
documents under the provisions of this chapter, and the Supreme Court, or any Court of First Instance of the
Philippines within the jurisdiction of which such inquiry is carried on, may in case of contumacy of refusal to obey
a subpoena, issue to any public service subject to the provisions of this Act, or to any person, an order requiring
such public service or other person to appear before the Commission and produce and papers if so ordered and
give evidence touching the matter; and any failure to obey such order of the court may be punished by such court
as a contempt thereof.
(b) Any person who shall neglect or refuse to answer any lawful inquiry or produce the Commission books,
paper, tariffs, contracts, agreements, and documents or other things called for by said Commission, if in his
power to do so, in obedience to the subpoena or lawful inquiry of the Commission, upon conviction thereof by a
court of competent jurisdiction, shall be punished by a fine not exceeding five thousand pesos or by
imprisonment not exceeding one year, or both, in the discretion of the court.
(c) The Commissioner and associate commissioners, the chiefs of divisions, the attorneys of the Commission,
and the deputy secretaries shall have the power to administer oaths in all matters under the jurisdiction of the
Commission.
(d) Any person who shall testify falsely or make any false affidavit or oath before the Commission or before any
of its members shall be guilty of perjury, and upon conviction thereof in a court of competent jurisdiction, shall be
punished as provided by law.
(e) Witnesses appearing before the Commission in obedience to subpoena or subpoena duces tecum, shall be
entitled to receive the same fees and mileage allowance as witnesses attending Courts of First Instance in civil
cases.
(f) Any person who shall obstruct the Commission or either of the Commissioners while engaged in the discharge
of Official duties, or who shall conduct himself in a rude, disrespectful or disorderly manner before the
Commission or either of the Commissioners, while engaged in the discharge of official duties, or shall orally or in
writing be disrespectful to, offend or insult either of the Commissioners on occasion or by reason of the
performance of official duties, upon conviction thereof by a court of competent jurisdiction, shall be punished for
each offense by a fine not exceeding one thousand pesos, or by imprisonment not exceeding six months, or
both, in the discretion of the court.
Section 31. No person shall be excused from testifying or from producing any book, document, or paper in any
investigation or inquiry by or upon the hearing before the Commission, when ordered so to do by said
Commission, except when the testimony or evidence required of him may tend to incriminate him. Without the
consent of the interested party no member or employee of the Commission shall be compelled or permitted to
give testimony in any civil suit to which the Commission is not a party, with regard to secrets obtained by him in
the discharge of his official duty.
Section 32. The Commission may, in any investigation or hearing, by its order in writing cause the deposition of
witnesses residing within or without the Philippines to be taken in the manner prescribed by the Rules of Court.
Where witnesses reside in places distant from Manila and it would be inconvenient and expensive for them to
appear personally before the Commission, the Commission may, by proper order, commission any clerk of the
Court of First Instance, municipal judge or justice of the peace of the Philippines to take the deposition of
witnesses in any case pending before the Commission. It shall be the duty of the official so commissioned, to
designated promptly a date or dates for the taking of such deposition, giving timely notice to the parties, and on
said date to proceed to take the deposition, reducing it to writing. After the depositions have been taken, the
official so commissioned shall certify to the depositions taken and forward them as soon as possible to the
Commission. It shall be the duty of the respective parties to furnish stenographers for taking and transcribing the
testimony taken. in case the are no stenographers available, the testimony shall be taken in long hand by such
person as the clerk of court, the municipal judge or justice of the peace may designate. The Commission may
also commission a notary public to take the depositions in the same manner herein provided.
The Commission may also, by proper order, authorize any of the attorneys of the legal division or division chiefs
of the Commission, if they be lawyers, to hear and investigate any case filed, with the Commission and in
connection therewith to receive such evidence as may be material thereto. At the conclusion of the hearing or
investigation, the attorney or division chief so authorized shall submit the evidence received by him to the
Commission to enable the latter to render its decision. (As amended by Rep. Act No. 723.)
Section 33. Every order made by the Commission shall be served upon the person or public service affected
thereby, within ten days from the time said order is filed by personal delivery or by ordinary mail, upon the
attorney of record, or in case there be no attorney of record, upon the party interested; and in case such certified
copy is sent by registered mail, the registry mail receipt shall be prima facie evidence of the receipt of such order
by the public service in due course of mail. All orders of the Commission to continue an existing service or
prescribing rates to be charged shall be immediately operative; all other orders shall become effective upon the
dates specified thereon: Provided, however, that orders, resolutions or decisions in converted matters and not
referring to the continuance of an existing service or prescribing rates to be charged shall not be effective unless
otherwise provided by the Commission, and shall take effect thirty days after notice to the parties.
Section 34. Any interested party may request the reconsideration of any order, ruling, or decision of the
Commission by means of a petition filed not later than fifteen days after the date of the notice of the order, ruling,
or decision in question. The grounds on which the request for reconsideration is based shall be clearly and
specifically stated in the petition. Copies of said petition shall be served on all parties interested in the matter. It
shall be the duty of the Commission to call a hearing to decide the same promptly, either denying the petition or
revoking or modifying the order, ruling or decision under consideration.
Section 35. The Supreme Court is hereby given jurisdiction to review any order, ruling, or decision of the
Commission and to modify or set aside such order, ruling, or decision when it clearly appears that there was no
evidence before the Commission to support reasonably such order, ruling, or decision, or that the same is
contrary to law, or that it was without the jurisdiction of the Commission. The evidence presented to the
Commission, together with the record of the proceedings before the Commission, shall be certified by the
secretary of the Commission to the Supreme Court. Any order, ruling, or decision of the Commission may
likewise be reviewed by the Supreme Court upon a writ of certiorari in proper cases. The procedure for review,
except as herein provided, shall be prescribed by rules of the Supreme Court.
Section 36. Any other, ruling, or decision of the may be reviewed on the application of any person or public
service affected thereby, by certiorari in appropriate cases, or by petition, to be known as petition for review,
which shall be filed within thirty days from the notification of such order, ruling or decision, or in case of a petition
is filed in accordance with the preceding section for the reconsideration of such order, ruling or decision and the
same is denied it shall be filed within fifteen days after notice of the order denying reconsideration. Said petition
shall be placed on file in the office of the Clerk of the Supreme Court who shall furnish copies thereof to the
Secretary of the Commission and other parties interested.
Section 37. The institution of a writ of certiorari or other special remedies in the Supreme Court shall in no case
supersede or stay any order, ruling or decision of the Commission, unless the Supreme Court shall so direct, and
the appellant may be required by the Supreme Court to give bond in such form and of such amount as may be
deemed proper.
Section 38. The chief of the legal division or any other attorneys of the Commission shall represent the same in
all judicial proceedings. It shall be the duty of the Solicitor General to represent the Commission in any judicial
proceedings if, for special reason, the Commissioner shall request his intervention.
There is hereby created under the administrative supervision of the Secretary of Justice an office to be known as
the Office of the People's Counsel in the Public Service Commission. The people's Counsel shall have two
assistants and such number of employees as may be necessary to perform the functions hereinafter specified.
The People's Counsel and his assistants shall be appointed by the President of the Philippines with the consent
of the commission on appointments of the Congress of the Philippines. The employees of the office of the
People's Counsel shall be appointed by the Secretary of Justice upon recommendation of the People's Counsel.
The People's Counsel and his assistants shall posses the qualifications of a provincial fiscal. The People's
Counsel shall receive compensation at the rate of seven thousand two hundred pesos per annum, and the first
and second assistant's People's Counsel, at the rate of six thousand pesos per annum each.
The People's Counsel, his assistants, and the employees of the Office of the People's Counsel shall not, during
their continuance in office, intervene directly or indirectly in the management or control of, or be financially
interested directly or indirectly in any public service as defined in this Act.
It shall be the duty of the People's Counsel (1) to institute proceedings before the Commission, in behalf of the
public, for the purpose of fixing just and reasonable rates or charges to be followed and observed by public
services as herein defined, whenever he has reason to believe that the existing rates or charges of such public
services are unjust and unreasonable or unjustly discriminatory; (2) to represent and appear for the public before
the Commission or any court of the Philippines in every case involving the interest of users of the products of, or
service furnished by any public service under the jurisdiction of the Commission; (3) to represent and appear for
petitioners appearing before the Commission for the purpose of complaining in matters of the rates and services;
(4) to investigate the service given by the rates charged by, and the valuation of the properties of the public
services under the jurisdiction of the Commission, and such other matters relating to said public services as
affect the interests of users of the products or service thereof, and to take all the steps necessary for the
protection of the interests of the person or persons or of the public affected thereby. In connection with such
investigation he is hereby empowered to issue subpoena or subpoena duces tecum.
The People's Counsel is authorized to call upon and obtain such assistance as he may deem necessary in the
performance of his duties from any officer or employee of any department, bureau, office, agency, or
instrumentality of the government including corporations owned, controlled or operated by the government. (As
amended by Rep. Act No. 178.)
Section 39. Any preceding in any court of the Philippines directly affecting an order of the Commission or to
which the Commission is a party, shall have preference over all other civil proceedings pending in such court,
except election cases.
CHAPTER VI
FEES
Section 40. The Commission is authorized and ordered to charge and collect from any public service or
applicant, as the case may be, the following fees as reimbursement of its expenses in the authorization,
supervision and/or regulation of public services:
(a) The charge of fifty pesos for the registration of:
(1) Applications under the provisions of Section sixteen (a), (b), (c), and (d), and twenty (a), (b) (c), (e), (f), and
(h): Provided however, That in case of transportation services an additional filing fee of five pesos shall be
charged for each additional unit or vehicle in excess of five units or vehicles applied for: And provided, finally,
That no filing fee shall be collected for the reduction of rates if the same does not alter or modify in any way the
basic rates of the schedule.
(2) Applications for the approval or modification of maximum rates under Section fourteen.
(b) Thirty pesos shall be collected from any operator of land transportation for the registration of:
(1) Applications under Section seventeen (f).
(2) Applications for the extension of time covering a period of thirty days for the registration of motor vehicles
previously authorized by the Commission.
(c) The charge of thirty pesos for the filing of other applications by any public service operator not specifically
provided for in the preceding paragraphs of this section other than motions of a temporary or incidental character:
Provided, however, That fifteen pesos only shall be collected for each certificate of public convenience or
certificate of public convenience and necessity in diploma form issued to a public service operator.
(d) For annual reimbursement of the expenses incurred by the Commission for the supervision and regulation of
the operations of motor vehicle services:
(1) For each automobile, ten pesos.
(2) For each motor vehicle, truck, or trailer of less than two tons gross transportation capacity, ten pesos.
(3) For each motor vehicle, truck, or trailer of two tons or more, but less than three tons gross transportation
capacity, twenty pesos.
(4) For each motor vehicle, truck, or trailer of three tons or more but less than four tons gross transportation
capacity, thirty pesos.
(5) Motor vehicles, trucks, trailers or buses of four tons or more gross capacity shall pay at the rate of ten pesos
per ton gross. The fees provided in paragraphs (d) and (e) hereof shall be paid on or before September thirtieth
of each year with a penalty of fifty per centum in case of delinquency: Provided, further, That if the fees or any
balance thereof are not paid within sixty days from the said date, the penalty shall be increased by one per
centum for every month thereafter of delinquency: Provided, however, That motor vehicles registered in the
Motor Vehicles Office after September thirtieth shall be exempt from payment for said year.
(e) For annual reimbursement of the expenses incurred by the Commission in the supervision of other public
services and/or in the regulation or fixing of their rates, twenty centavos for each one hundred pesos or fraction
thereof, of the capital stock subscribed or paid, or if no shares have been issued, of the capital invested, or of the
property and equipment, whichever is higher.
(f) For the issue or increase of capital stock, twenty centavos for each one hundred pesos or fraction thereof, of
the increased capital.
(g) For each permit authorizing the increase of equipment, the installation of new units or authorizing the increase
of capacity. or the extension of means or general extension in the services, twenty centavos for each one
hundred pesos or fraction of the additional capital necessary to carry out the permit.
(h) For the inspection or certification made in the meter laboratory of the Commission or each apparatus or meter
used by any public service, four pesos, and for examination made outside the meter laboratory of the
Commission, the additional expenses as may be incurred in making the examination shall also be paid.
(i) For certification of copies of official documents in the files of the Commission, fifty centavos plus fifty centavos
for each page or folio so certified.
This section shall not be applicable to the Republic of the Philippines, nor to its instrumentalities.
Aside from the appropriations for the Commission under the annual General Appropriation Act, any unexpended
balance of the fees collected by the Commission under this section shall be constituted receipts automatically
appropriated each year, and together with any surplus in the standardizing meter laboratory revolving fund under
Commonwealth Act Numbered Three hundred forty-nine, shall be disbursed by the Public Service Commissioner
in accordance with special budgets to be approved by the Department of Justice, the Budget Commission and
the Office of the President of the Philippines for additional needed personal services, maintenance and operating
expenses, acquisition of urgently needed vehicles, furniture and equipment, maintenance of an adequate
reference library, acquisition of a lot and building for the Commission, and other expenses necessary for efficient
administration and effective supervision and regulation of public services. (As amended by Com. Act No. 454 and
RA No. 3792, approved June 22, 1963.)
CHAPTER VII
GENERAL AND TRANSITORY PROVISIONS
Section 41. A substantial compliance with the requirements of this Act shall be sufficient to give effect to all the
rules, orders, acts and regulations of the Commission and they shall not be declared inoperative, illegal, or void
for any omission of a technical nature in respect thereto.
Section 42. Copies of all official documents and orders filled or deposited in the office of the Commission,
certified by either of the commissioners, or by the secretary to be true copy of the original, under the seal of the
Commission shall be evidence in like manner as the originals in all courts of the Philippines.
Section 43. The Commission created under this Act shall succeed the Commission created under Act numbered Section 1. Title of Act. - This Act shall be known as the "Land Transportation and Traffic Code."
thirty-one hundred and eight in the dispatch, hearing, and determination of all pending matters before the latter;
and shall take charge of its archives, books, furniture, equipment, and other properties of whatsoever nature. Section 2. Scope of Act. - The provisions of this Act shall control, as far as they apply, the registration and
operation of motor vehicles and the licensing of owners, dealers, conductors, drivers, and similar matters.
Section 44. In addition to the sum appropriated for the former commission under Act numbered forty-one hundred
and thirty-two, the General Appropriation Act for nineteen hundred and thirty-six, the sum of six thousand seven ARTICLE II
hundred and sixty-eight pesos and thirty-four centavos is hereby appropriated out of any funds in the Philippines Definitions
Treasury not otherwise; and in addition to the sum appropriated under Act numbered thirty-eight, the General
Appropriation Act for nineteen hundred and thirty-seven, the sum of twenty-three thousand six hundred and ten
Section 3. Words and phrases defined. - As used in this Act:
pesos, or so much thereof as may be necessary, is hereby appropriated, out of any funds in the Philippines
Treasury not otherwise appropriated, for carrying out the purposes of this Act.
(a) "Motor Vehicle" shall mean any vehicle propelled by any power other than muscular power using the public
highways, but excepting road rollers, trolley cars, street-sweepers, sprinklers, lawn mowers, bulldozers, graders,
Section 45. If, any reason, any section, subsection, sentence, clauses or terms of this Act is held to the
fork-lifts, amphibian trucks, and cranes if not used on public highways, vehicles which run only on rails or tracks,
unconstitutional such decision shall not affect the validity of the other provisions of this Act.
and tractors, trailers and traction engines of all kinds used exclusively for agricultural purposes.

Section 46. Act numbered thirty-two hundred and forty-seven and Act numbered thirty-five hundred and eighteen
Trailers having any number of wheels, when propelled or intended to be propelled by attachment to a motor
shall continue in force and effect; but all provisions of Act numbered thirty-one hundred and eight and
vehicle, shall be classified as separate motor vehicle with no power rating.
amendments thereof, and all other acts or parts or acts inconsistent with the provisions of this Act are hereby
repealed.
(b) "Passenger automobiles" shall mean all pneumatic-tire vehicles of types similar to those usually known under
the following terms: touring car, command car, speedster, sports car, roadster, jeep, cycle, car (except motor
Section 47. This Act shall take effect upon its approval.
wheel and similar small outfits which are classified with motorcycles), coupe, landaulet, closed car, limousine,
cabriolet, and sedan.
Approved: November 7, 1936
Motor vehicles with changed or rebuilt bodies, such as jeepneys, jitneys, or station wagons, using a chassis of
the usual pneumatic-tire passenger automobile type, shall also be classified as passenger automobile, if their net
7. Land Transportation and Traffic Code (RA 4136) allowable carrying capacity, as determined by the Commissioner of Land Transportation, does not exceed nine
passengers and if they are not used primarily for carrying freight or merchandise.
REPUBLIC ACT No. 4136
The distinction between "passenger truck" and "passenger automobile" shall be that of common usage: Provided,
AN ACT TO COMPILE THE LAWS RELATIVE TO LAND TRANSPORTATION AND TRAFFIC RULES, TO That a motor vehicle registered for more than nine passengers shall be classified as "truck": And Provided,
CREATE A LAND TRANSPORTATION COMMISSION AND FOR OTHER PURPOSES further, That a "truck with seating compartments at the back not used for hire shall be registered under special
"S" classifications. In case of dispute, the Commissioner of Land Transportation shall determine the classification
CHAPTER I to which any special type of motor vehicle belongs.
PRELIMINARY PROVISIONS ARTICLE
(c) "Articulated vehicle" shall mean any motor vehicle with a trailer having no front axle and so attached that part
ARTICLE I of the trailer rests upon motor vehicle and a substantial part of the weight of the trailer and of its load is borne by
Title and Scope of Act the motor vehicle. Such a trailer shall be called as "semi-trailer."
(d) "Driver" shall mean every and any licensed operator of a motor vehicle.
(e) "Professional driver" shall mean every and any driver hired or paid for driving or operating a motor vehicle,
whether for private use or for hire to the public.
Any person driving his own motor vehicle for hire is a professional driver.
(f) "Owner" shall mean the actual legal owner of a motor vehicle, in whose name such vehicle is duly registered
with the Land Transportation Commission.
The "owner" of a government-owned motor vehicle is the head of the office or the chief of the Bureau to which
the said motor vehicle belongs.
(g) "Dealer" shall mean every person, association, partnership, or corporation making, manufacturing,
constructing, assembling, remodeling, rebuilding, or setting up motor vehicles; and every such entity acting as
agent for the sale of one or more makes, styles, or kinds of motor vehicles, dealing in motor vehicles, keeping the
same in stock or selling same or handling with a view to trading same.
(h) "Garage" shall mean any building in which two or more motor vehicles, either with or without drivers, are kept
ready for hire to the public, but shall not include street stands, public service stations, or other public places
designated by proper authority as parking spaces for motor vehicles for hire while awaiting or soliciting business.
(i) "Gross weight" shall mean the measured weight of a motor vehicle plus the maximum allowable carrying
capacity in merchandise, freight and/or passenger, as determined by the Commissioner of Land Transportation.
(j) "Highways" shall mean every public thoroughfare, public boulevard, driveway, avenue, park, alley and callejon,
but shall not include roadway upon grounds owned by private persons, colleges, universities, or other similar
institutions.
(k) "The Commissioner of Land Transportation or his deputies" shall mean the actual or acting chief of the Land
Transportation Commission or such representatives, deputies, or assistants as he may, with the approval of the
Secretary of Public Works and Communications, appoint or designate in writing for the purpose contemplated by
this Act.
(l) "Parking or parked", for the purposes of this Act, shall mean that a motor vehicle is "parked" or "parking" if it
has been brought to a stop on the shoulder or proper edge of a highway, and remains inactive in that place or
close thereto for an appreciable period of time. A motor vehicle which properly stops merely to discharge a
passenger or to take in a waiting passenger, or to load or unload a small quantity of freight with reasonable
dispatch shall not be considered as "parked", if the motor vehicle again moves away without delay.
(m) "Tourist" shall mean a foreigner who travels from place to place for pleasure or culture.
ARTICLE III
Administration of Act
Section 4. Creation of the Commission. -
(a) There is created under the Department of Public Works and Communications an office which shall be
designated and known as the Land Transportation Commission, composed of one Commissioner and one
Deputy Commissioner, who shall be vested with the powers and duties hereafter specified. Whenever the word
"Commission" is used in this Act, it shall be deemed to mean the Land Transportation Commission, and
whenever the word "Commissioner" is used in this Act, it shall be taken to mean the Commissioner or Deputy
Commissioner.
The Commissioner and the Deputy Commissioner shall be natural-born citizens and residents of the Philippines,
and they shall be appointed by the President of the Philippines, with the consent of the Commission on
Appointments of the Congress of the Philippines: Provided, however, That the present Administrator, Assistant
Administrator and the personnel of the Motor Vehicles Office shall continue in office without the necessity of
reappointment.
(b) The Commissioner and Deputy Commissioner shall hold office until removed in accordance with the
provisions of the Revised Administrative Code.
(c) The Commissioner shall receive an annual compensation of twelve thousand pesos and the Deputy
Commissioner, an annual compensation of ten thousand four hundred pesos. The Commissioner shall be
assisted by one head executive assistant (MV regulation adviser or chief), one administrative officer, one
registration regulation chief, one inspection, examination and licensing regulation chief, one law and traffic
enforcement regulation chief, one provincial regulation chief, one utility and property regulation chief, one
accounting officer, one internal chief auditor, and one personnel officer, who shall receive an annual
compensation of nine thousand pesos each; eight land transportation regional directors who shall receive an
annual compensation of eight thousand four hundred pesos each and eight land transportation assistant regional
directors, who shall receive an annual compensation of seven thousand pesos each and ten assistant regulation
chiefs, who shall receive an annual compensation of seven thousand pesos each.
(d) The Commission shall have its offices in Quezon City where the present Motor Vehicle Office is located, and
shall establish a regional branch office each in Tuguegarao (Cagayan), Baguio City, Pasig (Rizal), Lipa City, San
Fernando (La Union), Naga City, Cebu City, Iloilo City, Cagayan de Oro City, and Davao City, to be headed by a
regional director who will have immediate administration, supervision and control over activities and
administration of the Commission in the respective regions.
The Commissioner shall be responsible for the administration of this Act and shall have, in connection therewith,
the following powers and duties, in addition to those mentioned elsewhere in this Act:
(1) With the approval of the Secretary of Public Works and Communications, to issue rules and regulations not in
conflict with the provisions of this Act, prescribing the procedure for the examination, licensing and bonding of
drivers; the registration and re-registration of motor vehicles, transfer of ownership, change of status; the
replacement of lost certificates, licenses, badges, permits or number plates; and to prescribe the minimum
standards and specifications including allowable gross weight, allowable length, width and height or motor
vehicles, distribution of loads, allowable loads on tires, change of tire sizes, body design or carrying capacity
subsequent to registration and all other special cases which may arise for which no specific provision is
otherwise made in this Act.
(2) To compile and arrange all applications, certificates, permits, licenses, and to enter, note and record thereon
transfers, notifications, suspensions, revocations, or judgments of conviction rendered by competent courts
concerning violations of this Act, with the end in view of preserving and making easily available such documents
and records to public officers and private persons properly and legitimately interested therein.
(3) To give public notice of the certificates, permits, licenses and badges issued, suspended or revoked and/or
motor vehicles transferred and/or drivers bonded under the provisions of this Act.
(4) The Commissioner of Land Transportation, with the approval of the Secretary of Public Works and
Communications, may designate as his deputy and agent any employee of the Land Transportation Commission,
or such other government employees as he may deem expedient to assist in the carrying out the provisions of
this Act.
(5) The Commissioner of Land Transportation and his deputies are hereby authorized to make arrest for
violations of the provisions of this Act in so far as motor vehicles are concerned; to issue subpoena and
subpoena duces tecum to compel the appearance of motor vehicle operators and divers and/or other persons or
conductors; and to use all reasonable means within their powers to secure enforcement of the provisions of this
Act.
(6) The Commissioner of Land Transportation or his deputies may at any time examine and inspect any motor
vehicle to determine whether such motor vehicle is registered, or is unsightly, unsafe, overloaded, improperly
marked or equipped, or otherwise unfit to be operated because of possible excessive damage to highways,
bridges and/or culverts.
(7) The Philippine Constabulary and the city and municipal police forces are hereby given the authority and the
primary responsibility and duty to prevent violations of this Act, and to carry out the police provisions hereof
within their respective jurisdiction: Provided, That all apprehensions made shall be submitted for final disposition
to the Commissioner and his deputies within twenty-four hours from the date of apprehension.
(8) All cases involving violations of this Act shall be endorsed immediately by the apprehending officer to the
Land Transportation Commission. Where such violations necessitate immediate action, the same shall be
endorsed to the traffic court, city or municipal court for summary investigation, hearing and disposition, but in all
such cases, appropriate notices of the apprehensions and the dispositions thereof shall be given to the
Commissioner of Land Transportation by the law-enforcement agency and the court concerned.
Notation of all such dispositions shall be entered in the records, and copy shall be mailed to the owner and to the
driver concerned.
CHAPTER II
REGISTRATION OF MOTOR VEHICLES
ARTICLE I
Duty to Register, Reports, Applications, Classifications
Section 5. All motor vehicles and other vehicles must be registered.
(a) No motor vehicle shall be used or operated on or upon any public highway of the Philippines unless the same
is properly registered for the current year in accordance with the provisions of this Act.
(b) Any registration of motor vehicles not renewed on or before the date fixed for different classifications, as
provided hereunder shall become delinquent and invalid:
1. For hire motor vehicles - on or before the last working day of February.
2. Privately-owned motor vehicles - from March one to the last working day of May.
3. All other motor vehicles - from June one to the last working day of June; except when the plates of such motor
vehicles are returned to the Commission in Quezon City or to the Office of the Motor Vehicles Registrar in the
provincial or city agency of the Commission on or before the last working day of December of the year of issue.
(c) Dealer's reports - The Commissioner of Land Transportation shall require dealers to furnish him with such
information and reports concerning the sale, importation, manufacture, number of stocks, transfer or other
transactions affecting motor vehicles as may be necessary for the effective enforcement of the provisions of this
Act.
(d) Change of motor number prohibited. - No repair or change in the motor vehicle involving the exchange,
elimination, effacing, or replacing of the original or registered serial or motor number as stamped or imprinted,
shall be allowed, and any motor vehicle with a trace of having its motor number altered or tampered with shall be
refused registration or re-registration, unless such is satisfactorily explained and approved by the Commissioner.
(e) Encumbrances of motor vehicles. - Mortgages, attachments, and other encumbrances of motor vehicles, in
order to be valid, must be recorded in the Land Transportation Commission and must be properly recorded on
the face of all outstanding copies of the certificates of registration of the vehicle concerned.
Cancellation or foreclosure of such mortgages, attachments, and other encumbrances shall likewise be recorded,
and in the absence of such cancellation, no certificate of registration shall be issued without the corresponding
notation of mortgage, attachment and/or other encumbrances.
Records of encumbrances of motor vehicles shall be kept by the Land Transportation Commission in
chronological sequence and shall contain, among other things, the time, date and number of the entry in a "Book
of Motor Vehicles" referring to the creation, cancellation or foreclosure of the aforesaid mortgages, attachments
or to other encumbrances.
The Land Transportation Commission shall collect a fee of five pesos for every annotation of a mortgage,
attachment and/or other encumbrances, or cancellation thereof.
Section 6. Application and payments for registration. - Applications and payments for registration shall be made
either personally or by registered mail, and the date of the cancellation of the postage stamps of envelopes
containing money order or check shall be taken as the date of the application and/or payment for registration:
Provided, That the application is properly prepared and the payment for registration is sufficient as required by
law.
Section 7. Registration Classification. - Every motor vehicle shall be registered under one of the following
described classifications:
(a) private passenger automobiles; (b) private trucks; and (c) private motorcycles, scooters, or motor wheel
attachments. Motor vehicles registered under these classifications shall not be used for hire under any
circumstances and shall not be used to solicit, accept, or be used to transport passengers or freight for pay.
Laborers necessary to handle freight on board private trucks may ride on such trucks: Provided, That seats shall
not be installed in the rear compartment thereof and that only such number of laborers, not exceeding ten, as
may be needed to handle the kind of freight carried, shall ride on the truck: Provided, further, That the combined
weight of cargo and passengers does not exceed the registered net capacity of the truck.
For the purpose of this section, a vehicle habitually used to carry freight not belonging to the registered owner
thereof, or passengers not related by consanguinity or affinity within the fourth civil degree to such owner, shall
be conclusively presumed to be "for hire."
No person shall be allowed to register as private truck any truck not actually and reasonably necessary to carry
out his duly licensed business or legitimate occupation or industry regularly paying taxes.
(d) Public utility automobiles; e) public utility trucks; (f) taxis and auto-calesas; (g) garage automobiles; (h) garage
trucks; (i) hire trucks: and (j) trucks owned by contractors and customs brokers and customs agents. Application
for registration under these classifications shall be accompanied by a certificate of public convenience or a
special permit issued by the Public Service Commission, and motor vehicles registered under these
classifications shall be subject to the Public Service Law, rules and regulations, as well as the provisions of this
Act.
(k) Undertakes
(l) Dealers - Registrations under this classification are intended to cover generally and successively all the motor
vehicles imported or handled by dealers for sale. Motor vehicles registered under the dealer's classification shall,
under no circumstances, be employed to carry passengers or freight in the dealer's business, or for hire. Such
vehicles shall be operated under this classification only for the purpose of transporting the vehicle itself from the
pier or factory to the warehouse or sales room or for delivery to a prospective purchaser or for test or
demonstration.
(m) Government automobiles; (n) government trucks; and (o) government motorcycles. Motor vehicles owned by
the Government of the Philippines or any of its political subdivisions shall be registered under these
classifications. Motor vehicles owned by government corporations, by government employees or by foreign
governments shall not be registered under this classification.
(p) Tourists bringing their own motor vehicles to the Philippines may, without registering such motor vehicles, use
the same during but not after ninety days of their sojourn: Provided, That the motor vehicle displays the number
plates for the current year of some other country or state, and said number plates as well as the name and
address (permanent and temporary) of the owner thereof are registered in the Land Transportation Commission
prior to the operation of the motor vehicle.
If such tourist remain in the Philippines longer than ninety days, the motor vehicle shall not be operated unless
registered in accordance with this Act and the corresponding registration fees paid.
(q) Special. The Commissioner of Land Transportation may, in his discretion, allow the registration under this
classification of motor vehicles which do not conform to the foregoing described regular classification.
ARTICLE II
Registration Fees
Section 8. Schedule of registration fees. - Except as otherwise specifically provided in this Act, each application
for renewal of registration of motor vehicles shall be accompanied by an annual registration fee in accordance
with the following schedule:
(a) Private automobiles with pneumatic rubber tires, an amount based on their respective shipping weight or
factory weight as indicated in the following schedule:
1,000 kilos or less P75.00
1,000 to 1,500 kilos 100.00
1,501 to 2,000 kilos 135.00
2,001 kilos and above 180.00
The factory or shipping weight of a private automobile shall be obtained from the Red Book edited by the
National Market Report, Inc., of the United States of America: Provided, further, That in the case of automobiles
with altered, changed or rebuilt bodies, the weight as obtained: by actual weighing shall be considered the
vehicles weight: Provided, furthermore, That the increase registration fees herein prescribed shall not apply to
jeeps and jeepneys for private use or for hire and the fees hereof shall be those prescribed for them before the
approval of this Act.
The registered passenger capacity of passenger automobiles operated for hire or for private use shall be
determined as follows:
1. For each adult passenger, a horizontal rectangular area, including seat and feet space, not less than thirty-five
centimeters wide and sixty centimeters long, except in the front seat, which shall allow an area fifty centimeters
wide for the operator.
2. For each half passenger, a horizontal rectangular area, including seat and feet spaces, not less that seventeen
and a half centimeters wide by sixty centimeters long, provided, that each continuous row of seats shall not be
allowed to have more that one-half passenger.
(b) Private motor trucks, passenger buses and trailers with pneumatic rubber tires, the sum of five pesos for
every hundred kilograms of maximum allowable gross weight or fraction thereof.
(c) Private motor trucks, passenger buses and trailers with solid rubber tires or with part-solid and part-pneumatic
rubber tires, the sum of seven pesos for every hundred kilograms of maximum allowable gross weight or fraction
thereof.
(d) Private motorcycles and scooters of two or three wheels and bicycles with motor attachments, the sum of
thirty pesos.
(e) The fee for registration of motor vehicles for hire shall be sixty percent more than the fee prescribed for
private motor vehicles of the same category.
(f) The fee for registration of diesel-consuming vehicles shall be fifty percent more than that of vehicles using
motor fuel other than diesel oil. The fee for registration of motor vehicles for hire shall be sixty percent more than
the fees prescribed for private motor vehicles.
(g) No regular registration fees shall be charged for the general registration of motor vehicles contemplated under
the dealer's classification: Provided, That the Commissioner of Land Transportation shall provide appropriate
dealer's number plates corresponding to the classification of vehicles hereinbelow described, and registration fee
for every set of such dealer's number plates shall be in accordance with the following schedule of rates;
Two hundred pesos for each truck or trailer;
One hundred pesos for each passenger automobile; and
Twenty pesos for each motorcycle and the like.
(h) Registration under the "Government Motor Vehicle" classification shall be free of charge, upon request of the 3. Per most heavily loaded axle group (the two axles of the group being at least one meter and less than two
chief of bureau or office concerned. meters apart) fourteen thousand five hundred kilograms.

(i) Motor vehicles not intended to be operated or used upon any public highway, or which are operated on An axle weight shall be the total weight transmitted to the road by all the wheels the centers of which can be
highways not constructed or maintained by the Government, or are intended not to be used or operated at all, included between the parallel transverse vertical planes one meter apart extending across the full width of the
shall be exempt from payment of the registration fees provided in this Act, but shall each pay an annual recording vehicles.
and service fee of fifteen pesos: Provided, however, That no refund, credit for, or reimbursement of registration
fees or part thereof shall be made to any owner on account of the discontinuance of the use or operation of a No provincial, city or municipal authority shall enact or enforce any ordinance or resolution regulating or
motor vehicle subsequent to the payment of such registration fees: Provided, further, That in the event motor prescribing the maximum gross weight of any motor vehicle.
vehicles exempted under this section shall be found operated on any public highways, the regular registration
fees and surcharges shall be collected in addition to whatever penalties may be imposed for violation of this Act.
(b) No motor vehicle operating as a single unit shall exceed the following dimensions:
The Commissioner of Land Transportation shall provide distinctive number plates for vehicles exempted from
payment of regular registration fees, and the owner of the vehicles concerned shall pay four pesos for each set of
such number plates. Overall width two and five-tenths meters

(j) The maximum allowable gross weight of a motor truck, passenger bus, or trailer, upon which to compute the Overall height four meters
registration fee thereof, shall be determined by the Commissioner of Land Transportation. He shall, from time to
time as the need of the service may require, prepare, subject to the approval of the Secretary of Public Works Overall length:
and Communications, suitable tables of maximum allowable loads per wheel for different sizes kinds of tires.
Freight vehicles with two axles ten meters
(k) The registration fees provided in this Act for trucks may be payable in two equal installment, the first to be
paid on or before the last working day of February if for hire, and in March if private; and the second to be paid on Passenger vehicles with two axles eleven meters
or before the last working day of August: Provided, That the fifty per cent penalty shall apply only to the unpaid
balance of the remaining period of delinquency. Vehicles with three or more axles fourteen meters

Section 9. Permissible weights and dimensions of vehicles in highways traffic.

(a) The maximum gross weight and measurement of motor vehicles, unladen or with load, permissible on public (c) No motor vehicle and/or trailer combination shall exceed eighteen meters in overall projected length, including
highways shall be as specified hereunder, subject to such regulations as the Commissioner with the approval of any load carried on such vehicle and trailer.
the Secretary of Public Works and Communications, may promulgate, from time to time, as the conditions of the
public highways may warrant and the needs of the service may require.
(d) No articulated vehicles shall be allowed to draw or pull a trailer and no vehicle already drawing a trailer shall
draw another.
Permissible maximum weights:
Section 10. Special permits, fees for. - The Commissioner with the approval of the Secretary of Public Works and
1. Per most heavily loaded wheel three thousand six hundred kilograms; Communications, shall issue regulations and schedules of additional fees under which special permits may be
issued in the discretion of the Commissioner or his deputies for each of the following special cases, without which
2. Per most heavily loaded axle eight thousand kilograms; special permit no vehicles shall be operated on the public highways:
(a) To operate a motor vehicle or trailer outfit with wheel, axle, or axle group loads in excess of the limits fixed in
subsection (a) of Section nine hereof or in any regulation issued by the Commissioner.
(b) To operate a motor vehicle the size of which exceeds the limit of permissible dimensions specified in
paragraph (b) of Section nine hereof.
(c) To operate a motor vehicle with any part of the load extending beyond the projected width of the vehicle.
(d) To pull two trailers behind a motor vehicle.
(e) For any other special authority relating to the use of vehicles, not otherwise specifically provided herein.
Section 11. Additional fees. - In addition to the fees elsewhere provided in this Act, for each change of
registration, from private to for hire or vice-versa; revision of gross weight rating, change of tire size; transfer of
ownership; replacement of a lost registration certificate, number plate, driver's license or permit; badge;
preparation of affidavit or certified copy of records, or for any similar circumstances requiring the issue, revision,
or reissue of a certificate of registration, driver's license, badge, permit, or other document, a fee of two pesos
shall be collected.
The replacement of a lost or utterly spoiled certificate, number plate, license, badge or permit shall render the
original invalid.
In case of request in writing for certification of data or facts involving two or more vehicles, a fee of five pesos a
page or part thereof shall be collected for each certification.
Section 12. Fee for original registration for part of year. - If any application for the original registration is made
during the first quarter of a calendar year, the total annual fee for the year shall be paid, if made during the
second quarter, three-fourths of the annual fee for that year shall be paid, if made during the third quarter, one
half of the annual fee shall be paid, and if made during the fourth quarter, one-fourth of the annual fee shall be
paid.
Nothing in this section shall be construed as allowing quarterly renewals of registrations in order to avoid
payment of fees in advance for the entire year.
Section 13. Payment of taxes upon registration. - No original registration of motor vehicles subject to payment of
taxes, customs duties or other charges shall be accepted unless proof of payment of the taxes due thereon has
been presented to the Commission.
ARTICLE III
Registration Certificates, Records, Number Plates
Section 14. Issuance of certificates of registration. - A properly numbered certificate of registration shall be issued
for each separate motor vehicle after due inspection and payment of corresponding registration fees.
Section 15. Use and authority of certificate of registration.
(a) The said certificate shall be preserved and carried in the car by the owner as evidence of the registration of
the motor vehicle described therein, and shall be presented with subsequent applications for re-registration,
transfer of ownership, or recording of encumbrances: Provided, That in lieu of the certificate of registration a true
copy or photostat thereof may be carried in the motor vehicle.
(b) The certificate of registration issued under the provisions of this Act for any motor vehicle shall, while the
same is valid and effective and has not been suspended or revoked, be the authority for the operation of such
motor vehicle.
(c) No motor vehicle shall be operated on the public highways in a manner which would place it under a
classification requiring the payment of a larger registration fee than that stated in the certificate of registration.
Section 16. Suspension of registration certificate. - If on inspection, as provided in paragraph (6) of Section four
hereof, any motor vehicle is found to be unsightly, unsafe, overloaded, improperly marked or equipped, or
otherwise unfit to be operated, or capable of causing excessive damage to the highways, or not conforming to
minimum standards and specifications, the Commissioner may refuse to register the said motor vehicle, or if
already registered, may require the number plates thereof to be surrendered to him, and upon seventy-two hours
notice to the owner of the motor vehicle, suspend such registration until the defects of the vehicle are corrected
and/or the minimum standards and specifications fully complied with.
Whenever it shall appear from the records of the Commission that during any twelve-month period more than
three warnings for violations of this Act have been given to the owner of a motor vehicle, or that the said owner
has been convicted by a competent court more than once for violation of such laws, the Commissioner may, in
his discretion, suspend the certificate of registration for a period not exceeding ninety days and, thereupon, shall
require the immediate surrender of the number plates.
Whenever a motor vehicle is found to be underweight the owner thereof shall pay the difference in the
registration fees corresponding to the shortage in weight plus a fifty per cent surcharge, and until such payment
is made, the certificate of registration of the motor vehicle concerned shall be suspended by the Commissioner.
After two such suspension, re-registration of the vehicle concerned for one year may be denied.
The Commissioner shall notify the owner of the motor vehicle of any action taken by him under this section.
Section 17. Number plates, preparation, preparation and issuance of . -
(a) The Commissioner shall cause number plates to be prepared and issued to owners of motor vehicles and
trailers registered under this Act, charging a fee of four pesos for each pair including the numerals indicating the
year of registry: Provided, however, That in case no number plates are available, the Commissioner or his
deputies may issue, without charge, a written permit temporarily authorizing the operation of any motor vehicles
with other means of identification: Provided, further, That all motor vehicles exempted from payment of
registration fees, motor vehicles for hire, and privately-owned motor vehicles shall bear plates so designed and
painted with different colors to distinguish one class from another: Provided, furthermore, That the plates of motor
vehicles exempted from payment of registration fees shall be permanently assigned to such motor vehicles
during their entire lifetime while exempted from payment of the fees: And, provided, finally, That the owner
thereof shall return such plates to the Land Transportation Commission within a period of seven working days
after such owner has lost his exemption privilege or has transferred the vehicle to a non-exempt owner.
(b) In case the design of the number plate is such that the numerals indicating the year of registry are on a
detachable tag, the Commissioner or his deputies may, in their discretion, issue the said tag only for subsequent
re-registration charging a fee of one peso for each tag issued.
Section 18. Use of number plates. - At all times, every motor vehicle shall display in conspicuous places, one in
front and one in the rear thereof, the said number plates.
The number plates shall be kept clean and cared for, and shall be firmly affixed to the motor vehicle in such a
manner as will make it entirely visible and always legible.
Except in the case of dealer's number plates which may be used successively on various motor vehicles in stock,
no person shall transfer number plates from motor vehicle to another.
No dealer's number plate shall be used on any motor vehicle after said vehicle has been sold and delivered to a
purchaser, and no dealer shall allow such dealer's number plates to be used on any motor vehicle after its sale
and delivery to a purchaser.
CHAPTER III
OPERATION OF MOTOR VEHICLE
ARTICLE I
License to Drive Motor Vehicles
Section 19. Duty to procure license. - Except as otherwise specifically provided in this Act, no person shall
operate any motor vehicle without first procuring a license to drive a motor vehicle for the current year, nor while
such license is delinquent, invalid, suspended or revoked.
The license shall be carried by the driver at all times when operating a motor vehicle, and shall be shown and/or
surrendered for cause and upon demand to any person with authority under this Act to confiscate the same.
Section 20. License for enlisted men operating Government motor vehicles. - Enlisted men operating a motor
vehicle owned by the Government of the Philippines shall be licensed in accordance with the provisions of this
Act, but no license or delinquency fees shall be collected therefrom. All licenses so issued shall bear the words
"For Government Vehicles Only" plainly marked or stamped in red ink across the face thereof.
A license so marked or stamped shall authorize the holder thereof to operate a private-owned motor vehicle.
Section 21. Operation of motor vehicles by tourists. - Bona fide tourist and similar transients who are duly
licensed to operate motor vehicles in their respective countries may be allowed to operate motor vehicles during
but not after ninety days of their sojourn in the Philippines.
If any accident involving such tourist or transient occurs, which upon investigation by the Commissioner or his
deputies indicates that the said tourist or transient is incompetent to operate motor vehicles, the Commissioner
shall immediately inform the said tourist or transient in writing that he shall no longer be permitted to operate a
motor vehicle.
After ninety days, any tourist or transient desiring to operate motor vehicles shall pay fees and obtain and carry a
license as hereinafter provided.
Section 22. Driver's license, fees, examination. - Every person who desires personally to operate any motor
vehicle shall file an application to the Commissioner or his deputies for a license to drive motor vehicles:
Provided, however, That no person shall be issued a professional driver's license who is suffering from highly
contagious diseases, such as, advanced tuberculosis, gonorrhea, syphilis, and the like.
Each such application except in the case of enlisted men operating government-owned vehicles, shall be
accompanied by a fee of five pesos, and shall contain such information respecting the applicant and his ability to
operate motor vehicles, as may be required by the Commission.
The Commissioner or his deputies shall also ascertain that the applicant's sight and hearing are normal, and may
in their discretion, require a certificate to that effect, signed by a reputable physician.
An examination or demonstration to show any applicant's ability to operate motor vehicles may also be required
in the discretion of the Commissioner or his deputies.
Section 23. Issuance of driver's license. - If, after such examination, the Commissioner or his deputy believes that
the applicant possesses the necessary qualifications and is proficient in the operation of motor vehicles, a license
shall be issued to such applicant upon payment of five pesos, but prior to the issuance of said license, the
applicant shall furnish three copies of his recent photograph to be securely attached to the license, and two
copies to be filed and kept as provided by this Act. All driver's licenses shall bear the signature and right-hand
thumb print of the licensee.
Section 24. Use of driver's license and badge. - Every license issued under the provisions of this Act to any driver
shall entitle the holder thereof, while the same is valid and effective and not suspended or revoked, to operate
the motor vehicles described in such license: Provided, however, That every licensed professional driver, before
operating a public service motor vehicle registered under classifications (d) to (j) inclusive of Section seven
hereof, shall secure from the Commissioner, upon payment of the sum of one peso, a driver's badge which he
shall, at all times while so operating a motor vehicle, display in plain sight on the band of his cap or on his coat or
shirt. Such driver's badge shall be of metal with a plainly readable number assigned to the licensee stamped
thereon.
It shall be unlawful for any duly licensed driver to transfer, lend or otherwise allow any person to use his license
for the purpose of enabling such person to operate a motor vehicle.
No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor vehicle, unless the
person sought to be employed is a duly licensed professional driver.
Section 25. Driver's records. - Any driver who changes his address shall, within fifteen days, notify the
Commissioner in writing of his new address, name and address of his new employer, the number of the motor
vehicle he is employed to operate, and such other information as the Commissioner may require.
Section 26. Renewal of license. - Any license not renewed on or before the last working day of the month when
the applicant was born shall become delinquent and invalid, except when the license is surrendered to the
Commissioner or his deputies before the last working day of the month of his birth in order to avoid payment of
the delinquency fees.
The fee for renewal of delinquent license shall be five pesos in addition to the basic fee as hereinabove
prescribed.
Every applicant for renewal of license to operate any motor vehicle shall present to the Commissioner, in person
or by mail or messenger, the license issued to the applicant for the previous year, together with the proper fee of
five pesos and, in the case of professional chauffeurs, three copies of a readily-recognized photograph of the
applicant, which photograph shall have been taken not exceeding three years prior to the date of applicant for
renewal.
Lost license. - In case the license for the previous year has been lost or cannot be produced, the applicant shall
obtain a duplicate in accord with Section eleven of this Act, on penalty of refusal, by the Commissioner or his
deputies, to renew the license: Provided, however, That the Commissioner or his deputies may, in their discretion
accept in lieu of the previous years license, the duly signed and sworn statement of an operator to the effect that
he has not operated any motor vehicle in the Philippines during the year or years to which no license was issued
in his name.
The Commissioner and his deputies are hereby authorized to administer the oath in connection with such
affidavit.
Section 27. Suspension, revocation of driver's license.
(a) The Commissioner may suspend for a period not exceeding three months or, after hearing, revoke any
driver's license issued under the provisions of this Act, and may order any such license to be delivered to him
whenever he has reason to believe that the holder thereof is an improper person to operate motor vehicles, or in
operating or using a motor vehicle in, or as an accessory to, the commission of any crime or act which endangers
the public. Any deputy of the Commissioner may, for the same cause, suspend for a period not exceeding three
months any driver's license issued under the provisions of this Act: Provided, That such suspension may be
appealed to the Commissioner who may, after reviewing the case, confirm, reverse or modify the action taken by
such deputy.
(b) Whenever during any twelve-month period a driver shall have been convicted at least three times for the
violations of any provisions of this Act or of any regulation issued by the Commissioner or any municipal or city
ordinance relating to motor vehicle traffic not in conflict with any of the provisions of this Act, the Commissioner
may, in his discretion, revoke or suspend the license of such driver for a period not exceeding two years.
(c) The license suspended or revoked under the provisions of subsections (a) and (b) of this section shall not be
reinstated unless the driver has furnished a bond in accordance with Section twenty-nine of this Act and only
after the Commissioner has satisfied himself that such driver may again safely be permitted to operate a motor
vehicle.
(d) A decision of the Commissioner revoking or refusing the reinstatement of a license under the provisions of
this Section may be appealed to the Secretary of Public Works and Communications.
Section 28. Driver's bond. - The Commissioner before reinstating any driver's license which has been suspended
or revoked under the provisions of the preceding section or of any provisions of this Act, may require such driver
to post a bond in the sum of one thousand pesos conditioned upon the satisfaction and payment of any claim
which may be filed or of any execution which may be issued against such driver in any case wherein said driver
may be held answerable while operating motor vehicles. The bond required in this section shall be in such form
as to render sureties liable at least for a period of not less than one year nor more than three years: Provided,
however, That upon written application to the Commissioner for release from such a bond, the Commissioner
may after revoking or suspending the driver's license, authorize the release of the bondsmen from further
responsibility thereunder: Provided, further, That should the Commissioner decide not to revoke the license of a
driver who has been convicted of homicide through reckless imprudence, or of the violation of the speed limit or
of reckless driving at least three times within a twelve-month period, the said driver shall post a bond in the sum
of not less than two thousand pesos, conditioned upon the payment of any claim which may be filed or any
execution which may be issued against him in any case wherein said driver may be held answerable while
operating motor vehicles.
Section 29. Confiscation of driver's licenses. - Law enforcement and peace officers duly designated by the
Commissioner shall, in apprehending any driver for violations of this Act or of any regulations issued pursuant
thereto, or of local traffic rules and regulations, confiscate the license of the driver concerned and issue a receipt
prescribed and issued by the Commission therefor which shall authorize the driver to operate a motor vehicle for
a period not exceeding seventy-two hours from the time and date of issue of said receipt. The period so fixed in
the receipt shall not be extended, and shall become invalid thereafter. Failure of the driver to settle his case
within fifteen days from the date of apprehension will cause suspension and revocation of his license.
Section 30. Student-driver's permit. - Upon proper application and the payment of three pesos, the Commissioner
or his deputy may issue student-driver's permits, valid for six months to persons not under eighteen years of age,
who desire to learn to operate motor vehicles. No application for driver's license shall be received unless the
applicant has undergone instruction in the operation of motor vehicles for at least a month and has a valid
student-driver's permit: Provided, however, That any person who has a license to operate vehicles in other
countries may, upon presentation of appropriate evidence of such license, be allowed to pay for a driver's license
without presenting a student driver's permit.
A student driver who fails in the examination shall continue as a student driver for at least one additional month.
No student driver shall operate a motor vehicle unless accompanied by a duly licensed driver.
The licensed driver acting as instructor to the student driver shall likewise be responsible and liable for any
violation of the provisions of this Act and for any injury or damage done by the motor vehicle on account or as a
result of its operation by a student under his direction.
ARTICLE II
Illegal Use of Licenses, Number Plates, Etc.
Section 31. Imitation and false representations. - No person shall make or use attempt to make or use a driver's
license, badge, certificate of registration, number plate, tag, or permit in imitation or similitude of those issued
under this Act, or intended to be used as or for a legal license, badge, certificate, plate, tag or permit, or with
intent to sell or otherwise dispose of the same to another. No person shall falsely or fraudulently represent as
valid and in force any driver's license, badge, certificate, plate, tag or permit issued under this Act which is
delinquent or which has been revoked or suspended.
No person shall, knowingly and with intent to deceive, make one or more false or fraudulent statements in an
application for the registration of vehicles, or for a driver's license.
ARTICLE III
Passenger and Freight
Section 32. Exceeding registered capacity. - No person operating any vehicle shall allow more passenger or
more freight or cargo in his vehicle than its registered carrying capacity. In the case of public utility trucks or
buses, the conductor shall be exclusively liable for violations of this section or of Section thirty-two, letter (c)
hereof: Provided, That the conductor, before being employed by any public service operator, shall get a permit or
license from the Commission and pay five pesos annually for said license or permit issued in his favor, and the
same is renewable on or before the last working day of the month of his birth, attaching a readily recognizable
photograph and after presentation of a medical certificate of fitness of applicant.
Passenger trucks may be allowed to construct any cargo carrying device at the rear or at the side of the truck,
subject to the approval of the Commissioner: Provided, however, That the total weight of the device, including the
cargo, shall not exceed one hundred kilos.
(b) Carrying of passengers and freight on top of vehicles. - No person operating a motor vehicle shall allow any
passenger to ride on the cover or top of such vehicles: Provided, however, That subject to such conditions as
may be contained in permits that may be issued by the Commissioner, baggage or freight may be carried on the
top of a truck provided the weight thereof does not exceed twenty kilos per square meter and is distributed in
such a manner as not to endanger the passengers or stability of the truck.
(c) Riding on running boards. - No driver shall permit any person to ride on the running board, step board, or
mudguard of his motor vehicle for any purpose except to make repair or adjustment in the motor or to collect
fares.
Section 33. Passenger or freight capacity marked on vehicle. - All passengers automobiles for hire shall have the
registered passenger capacity plainly and conspicuously marked on both sides thereof, in letters and numerals
not less than five centimeters in height.
All motor trucks, whether for passenger or freight, private, or for hire, shall have the registered passenger gross
and net weight capacities plainly and conspicuously marked on both sides thereof, in letters and numerals not
less than five centimeters in height.
ARTICLE IV
Accessories of Motor Vehicles
Section 34.
(a) Tires of motor vehicles. - No motor vehicle with metallic tires shall be operated upon any public highway, and
solid tires whenever used shall be of sufficient thickness to prevent the metal rims thereof from coming in direct
contact with the road.
(b) Brakes - Every motor vehicle with four or more wheels shall be provided with dual hydraulic brake system so
that in case of hydraulic line failure affecting the braking efficiency of any of the four wheels at least either the
front or rear wheels shall retain normal braking capabilities. In the absence of such dual braking system every
motor vehicle with four or more wheels shall be provided with safety valve devices of such design and make so
that failure of the hydraulic braking system of the vehicle because of leakage in the line of other parts of the
system will not affect all wheels but rather render at all times effective the braking power of either the two front
wheels or the two rear wheels when brakes are applied. This requirement, however, does not apply to motor
vehicles equipped with pneumatic braking system.
(b-1) Horns. - Every motor vehicle shall be provided with a horn or signalling devise in good working order:
Provided, however, That no horn or signalling device emitting an exceptionally loud, startling, or disagreeable
sound shall be installed or used on any motor vehicle.
All authorized emergency vehicles, such as ambulance and police cars and fire wagons used for emergency calls
shall be equipped with a bell, siren, or exhaust whistle of a type approved by the Commissioner, and no such
device shall be installed or used in any other vehicle.
No vehicle not classified as a motor vehicle under this Act shall be equipped with a horn or signaling device
similar to the horn customarily used on motor vehicles.
(c) Headlights. - Every motor vehicle of more than one meter of projected width, while in use on any public
highway shall bear two headlights, one on each side, with white or yellowish light visible from the front, which, not
later than one-half hour after sunset and until at least one-half four before sunrise and whenever weather
conditions so require, shall both be lighted.
Additional lamps and light may be carried, but no red lights shall be visible forward or ahead of the vehicle.
Trucks, buses, trailers, and other similar vehicles must carry, while in use on any public highway during night-
time, colored riding lights on each of the four corners not more than ten centimeters from the top.
All motor vehicles shall be equipped with devices for varying the intensity of light, and the driver must dim the
headlights or tilt the beams downward whenever the vehicle is being operated on well-lighted streets within the
limits of cities, municipalities, and thickly populated barrios or districts, or whenever such vehicle meets another
vehicle on any public highway.
(d) Taillights. - Every motor vehicle and trailer shall, during the above-mentioned hours, also bear on each side in
the rear a lamp showing a red light visible at least one hundred meters from the rear of the vehicle and a lamp
throwing a white light upon the number plate issued for such vehicle.
(e) Stop lights. - Every motor vehicle shall be equipped at the rear with at least one lamp which shall throw a
sustained bright red light visible under all conditions, even under bright sunlight, when the brakes are applied.
Each bus, truck, trailer or similar vehicle shall be equipped, as its stop light at or near its rear center, with a lamp
at least twelve centimeters in diameter with the word "stop" inscribed in the center.
(f) Motorcycle and other vehicle lights. - Every motor vehicle of less than one meter of projected width shall be
subject to the preceding provisions of this section, except that one headlight and one taillight shall be required.
No signal light shall be necessary.
Additional lamps may be carried provided they comply with the preceding provisions of this section.
Every motor vehicle, or whatever style, kind, make, character, or nature, when upon a highway during the hours
above-mentioned, whether in motion or not, shall have one or more lights so arranged that the same shall be
visible at least fifty meters from the front and the rear of such vehicle.
a speed as to endanger the life, limb and property of any person, nor at a speed greater than will permit him to
bring the vehicle to a stop within the assured clear distance ahead.
(b) Subject to the provisions of the preceding paragraph, the rate of speed of any motor vehicle shall not exceed
the following:

(g) Lights when parked or disabled. - Appropriate parking lights or flares visible one hundred meters away shall MAXIMUM ALLOWABLE SPEEDS Passengers
be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in places that are not
well-lighted or is placed in such manner as to endanger passing traffic. Cars and Motorcycle Motor trucks and buses

(h) Windshield wiper. - Every motor vehicle shall be equipped with a mechanically or electrically operated device 1. On open country roads, with no "blinds corners" not closely bordered by habitations. 80 km. per hour 50
for wiping off raindrops or other moisture from its front windshield. km. per hour

2. On "through streets" or boulevards, clear of traffic, with no " blind corners," when so designated. 40 km. per
hour 30 km. per hour
(i) Use of red flag. - Whenever the load of any vehicle extends more than one meter beyond the bed or body
thereof, there shall be displayed at every projecting end of such load a red flag not less than thirty centimeters 3. On city and municipal streets, with light traffic, when not designated "through streets". 30 km. per hour 30
both in length and width, except that during the hours fixed under subsection (c), there shall be displayed, in lieu km. per hour
of the required red flags, red lights visible at least fifty meters away.
4. Through crowded streets, approaching intersections at "blind corners," passing school zones, passing other
(j) Mufflers. - Every motor vehicle propelled by an internal combustion engine shall be equipped with a muffler, vehicles which are stationery, or for similar dangerous circumstances. 20 km. per hour 20 km. per
and whenever said motor vehicle passes through a street of any city, municipality, or thickly populated district or hour
barrio, the muffler shall not be cut out or disconnected. No motor vehicle shall be operated in such a manner as
to cause it to emit or make any unnecessary or disagreeable odor, smoke or noise.
(c) The rates of speed hereinabove prescribed shall not apply to the following:

(1) A physician or his driver when the former responds to emergency calls;

CHAPTER IV
(2) The driver of a hospital ambulance on the way to and from the place of accident or other emergency;
TRAFFIC RULES
(3) Any driver bringing a wounded or sick person for emergency treatment to a hospital, clinic, or any other
ARTICLE I
similar place;
Speed Limit and Keeping to the Right
(4) The driver of a motor vehicle belonging to the Armed Forces while in use for official purposes in times of riot,
Section 35. Restriction as to speed. -
insurrection or invasion;

(a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent speed, not
(5) The driver of a vehicle, when he or his passengers are in pursuit of a criminal;
greater nor less than is reasonable and proper, having due regard for the traffic, the width of the highway, and of
any other condition then and there existing; and no person shall drive any motor vehicle upon a highway at such
(6) A law-enforcement officer who is trying to overtake a violator of traffic laws; and
(7) The driver officially operating a motor vehicle of any fire department, provided that exemption shall not be
construed to allow unless or unnecessary fast driving of drivers aforementioned.
Section 36. Speed limits uniform throughout the Philippines. - No provincial, city or municipal authority shall enact
or enforce any ordinance or resolution specifying maximum allowable speeds other than those provided in this
Act.
Section 37. Driving on right side of highway. - Unless a different course of action is required in the interest of the
safety and the security of life, person or property, or because of unreasonable difficulty of operation in
compliance herewith, every person operating a motor vehicle or an animal-drawn vehicle on a highway shall pass
to the right when meeting persons or vehicles coming toward him, and to the left when overtaking persons or
vehicles going the same direction, and when turning to the left in going from one highway to another, every
vehicle shall be conducted to the right of the center of the intersection of the highway.
Section 38. Classification of highways. - Public highways shall be properly classified for traffic purposes by the
provincial board, municipal board or city council having jurisdiction over them, and said provincial board,
municipal board or city council shall provide appropriate signs therefor, subject to the approval of the
Commissioner. It shall be the duty of every provincial, city and municipal secretary to certify to the Commissioner
the names, locations, and limits of all "through streets" designated as such by the provincial board, municipal
board or council.
ARTICLE II
Overtaking and Passing a Vehicle, and Turning at Intersections
Section 39. Overtaking a vehicle. - The driver of any motor vehicle overtaking another vehicle proceeding in the
same direction shall pass at a safe distance to the left thereof, and shall not again drive to the right side of the
highway until safety clear of such overtaken vehicle except that on a highway, within a business or residential
district, having two or more lanes for the movement of traffic in one direction, the driver of a vehicle may overtake
and pass another vehicle on the right. Nothing in this section shall be construed to prohibit a driver overtaking
and passing, upon the right, another vehicle which is making or about to make a left turn.
Section 40. Driver to give way to overtaking vehicle. - The driver of a vehicle about to be overtaken and passed
by another vehicle approaching from the rear shall give way to the overtaking vehicle on suitable and audible
signal being given by the driver of the overtaking vehicle, and shall not increase the speed of his vehicle until
completely passed by the overtaking vehicle.
Section 41. Restrictions on overtaking and passing.
(a) The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing
another vehicle proceeding in the same direction, unless such left side is clearly visible, and is free of oncoming
traffic for a sufficient distance ahead to permit such overtaking or passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction, when
approaching the crest of a grade, not upon a curve in the highway, where the driver's view along the highway is
obstructed within a distance of five hundred feet ahead, except on a highway having two or more lanes for
movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle: Provided,
That on a highway within a business or residential district, having two or more lanes for movement of traffic in
one direction, the driver of a vehicle may overtake or pass another vehicle on the right.
(c) The driver of a vehicle shall not overtake or pass any other vehicle proceeding in the same direction, at any
railway grade crossing, not at any intersection of highways unless such intersection or crossing is controlled by
traffic signal, or unless permitted to do so by a watchman or a peace officer, except on a highway having two or
more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another
vehicle on the right. Nothing in this section shall be construed to prohibit a driver overtaking or passing upon the
right another vehicle which is making or about to make a left turn.
(d) The driver of a vehicle shall not overtake or pass, or attempt to pass, any other vehicle, proceeding in the
same direction, between any points indicated by the placing of official temporary warning or caution signs
indicating that men are working on the highway.
(e) The driver of a vehicle shall not overtake or pass, or attempt to overtake or pass, any other vehicle
proceeding in the same direction in any "no-passing or overtaking zone."
ARTICLE III
Right of Way and Signals
Section 42. Right of way.
(a) When two vehicles approach or enter an intersection at approximately the same time, the driver of the vehicle
on the left shall yield the right of way to the vehicle on the right, except as otherwise hereinafter provided. The
driver of any vehicle traveling at an unlawful speed shall forfeit any right of way which he might otherwise have
hereunder.
(b) The driver of a vehicle approaching but not having entered an intersection, shall yield the right of way to a (b) The signal herein required shall be given by means of extending the hand and arm beyond the left side of the
vehicle within such intersection or turning therein to the left across the line of travel of such first-mentioned vehicle, or by an approved mechanical or electrical signal device.
vehicle, provided the driver of the vehicle turning left has given a plainly visible signal of intention to turn as
required in this Act.

(c) The driver of any vehicle upon a highway within a business or residential district shall yield the right of way to ARTICLE IV
a pedestrian crossing such highway within a crosswalk, except at intersections where the movement of traffic is Turning and Parking
being regulated by a peace officer or by traffic signal. Every pedestrian crossing a highway within a business or
residential district, at any point other than a crosswalk shall yield the right of way to vehicles upon the highway.
Section 45. Turning at intersections. -

(d) The driver of a vehicle upon a highway shall bring to a full stop such vehicle before traversing any "through
(a) The drive of a vehicle intending to run to the right at an intersection shall approach such intersection in the
highway" or railroad crossing: Provided, That when it is apparent that no hazard exists, the vehicle may be
lane for traffic nearest to the right-hand side of the highway and, in turning, shall keep as close as possible to the
slowed down to five miles per hour instead of bringing it to a full stop.
right-hand curb or edge of the highway.

Section 43. Exception to the right of way rule.

(b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for traffic to the
right of and nearest to the center line of the highway, and, in turning, shall pass to the left of the center of the
(a) The driver of a vehicle entering a highway from a private road or drive shall yield the right of way to all intersection, except that, upon highways laned for traffic and upon one-way highways, a left turn shall be made
vehicles approaching on such highway. from the left lane of traffic in the direction in which the vehicle is proceeding.

(b) The driver of a vehicle upon a highway shall yield the right of way to police or fire department vehicles and (c) For the purpose of this section, the center of the intersection shall mean the meeting point of the medial lines
ambulances when such vehicles are operated on official business and the drivers thereof sound audible signal of of the highways intersecting one another, except when it is occupied by a monument, grass plot or any
their approach. permanent structure, other than traffic control device.

(c) The driver of a vehicle entering a "through highway" or a "stop intersection" shall yield the right of way to all Section 46. Parking prohibited in specified places. - No driver shall park a vehicle, or permit it to stand, whether
vehicles approaching to either direction on such "through highway": Provided, That nothing in this subsection attended or unattended, upon a highway in any of the following places:
shall be construed as relieving the driver of any vehicle being operated on a "through highway" from the duty of
driving with due regard for the safety of vehicles entering such "through highway" nor as protecting the said driver
(a) Within an intersection
from the consequence of an arbitrary exercise off such right of way.
(b) On a crosswalk
Section 44. Signals on starting, stopping or turning. -
(c) Within six meters of the intersection of curb lines.
(a) The driver of any vehicle upon a highway, before starting, stopping or turning from a direct line, shall first see
that such movement can be made in safety, and if any pedestrian may be affected by such movement, shall give
a clearly audible signal by sounding the horn, and whenever the operation of any other vehicle approaching or (d) Within four meters of the driveway entrance to and fire station.
following may be affected by such movement, shall give a signal plainly visible to the driver of such other vehicles
of the intention to make such movement. (e) Within four meters of fire hydrant

(f) In front of a private driveway

(g) On the roadway side of any vehicle stopped or parked at the curb or edge of the highway Section 54. Obstruction of traffic. - No person shall drive his motor vehicle in such a manner as to obstruct or
impede the passage of any vehicle, nor, while discharging or taking on passengers or loading or unloading
(h) At any place where official signs have been erected prohibiting parking. freight, obstruct the free passage of other vehicles on the highway.

Section 47. Parked vehicle. - Whenever a motor vehicle is parked unattended on any highway, the driver thereof Section 55. Duty of driver in case of accident. - In the event that any accident should occur as a result of the
must turn off the ignition switch and stop the motor and notch effectively the hand brake. operation of a motor vehicle upon a highway, the driver present, shall show his driver's license, give his true
name and address and also the true name and address of the owner of the motor vehicle.

No driver of a motor vehicle concerned in a vehicular accident shall leave the scene of the accident without
aiding the victim, except under any of the following circumstances:
ARTICLE V
Miscellaneous Traffic Rules
1. If he is in imminent danger of being seriously harmed by any person or persons by reason of the accident;
Section 48. Reckless driving. - No person shall operate a motor vehicle on any highway recklessly or without
reasonable caution considering the width, traffic, grades, crossing, curvatures, visibility and other conditions of 2. If he reports the accident to the nearest officer of the law; or
the highway and the conditions of the atmosphere and weather, or so as to endanger the property or the safety
or rights of any person or so as to cause excessive or unreasonable damage to the highway. 3. If he has to summon a physician or nurse to aid the victim.

Section 49. Right of way for police and other emergency vehicles. - Upon the approach of any police or fire
department vehicle, or of an ambulance giving audible signal, the driver of every other vehicle shall immediately
drive the same to a position as near as possible and parallel to the right-hand edge or curb of the highway, clear CHAPTER V
of any intersection of highways, and shall stop and remain in such position, unless otherwise directed by a peace PENAL AND OTHER PROVISIONS
officer, until such vehicle shall have passed.
ARTICLE I
Section 50. Tampering with vehicles. - No unauthorized person shall sound the horn, handle the levers or set in Penalties
motion or in any way tamper with a damage or deface any motor vehicle.
Section 56. Penalty for violation. - The following penalties shall be imposed for violations of this Act:
Section 51. Hitching to a vehicle. - No person shall hang on to, ride on, the outside or the rear end of any vehicle,
and no person on a bicycle, roller skate or other similar device, shall hold fast to or hitch on to any moving
(a) For registering later than seven days after acquiring title to an unregistered motor vehicle or after conversion
vehicle, and no driver shall knowingly permit any person to hang on to or ride, the outside or rear end of his
of a registered motor vehicle requiring larger registration fee than that for which it was originally registered, or for
vehicle or allow any person on a bicycle, roller skate or other similar device to hold fast or hitch to his vehicle.
renewal of a delinquent registration, the penalty shall be a fine fifty per cent of the registration fees corresponding
to the portion of the year for which the vehicle is registered for use.
Section 52. Driving or parking on sidewalk. - No person shall drive or park a motor vehicle upon or along any
sidewalk, path or alley not intended for vehicular traffic or parking.
(b) For failure to sign driver's license or to carry same while driving, twenty pesos fine.

Section 53. Driving while under the influence of liquor or narcotic drug. - No person shall drive a motor vehicle
(c) Driving a vehicle with a delinquent or invalid driver's license, fifty pesos fine.
while under the influence of liquor or narcotic drug.
(d) Driving a motor vehicle with delinquent, suspended or invalid registration, or without registration or without the
proper license plate for the current year, three hundred pesos fine.
(e) Driving a motor vehicle without first securing a driver's license, three hundred pesos fine.
(f) Driving a motor vehicle while under the influence of liquor or narcotic drug, a fine of not less than two hundred
pesos nor more than five hundred pesos, or imprisonment of not more than three months, or both, at the
discretion of the Court.
(g) Violation of Section thirty-two, thirty-four (a), (b) and (b-1), thirty-five and forty-six a fine not exceeding one
hundred pesos: Provided, however, That in the case of violation of Section 34 (b) the vehicle or vehicles affected
may not be allowed to operate unless the requirements provided in this section are complied with.
(h) Violations of Sections forty-nine, fifty and fifty-two, a fine not exceeding fifty pesos.
(i) For making, using or attempting to make or use a driver's license, badge, certificate or registration, number
plate, tag or permit in imitation or similitude of those issued under this Act, or intended to be used as or for a legal
license, badge, certificate, plate, tag or permit or with intent to sell or otherwise dispose of the same to another,
or false or fraudulently represent as valid and in force any driver's license, badge, certificate, plate, tag or permit
issued under this Act which is delinquent or which has been suspended or revoked, a fine of not exceeding three
hundred pesos.
(j) For using private passenger automobiles, private trucks, private motorcycles, and motor wheel attachments for
hire, in violation of Section seven, subsections (a), (b), and (c), of this Act, a fine of two hundred pesos and
suspension of driver's license for a period of three months for the first conviction; a fine of three hundred pesos
and six months imprisonment for the second conviction; and an imprisonment of one year and permanent
revocation of the driver's license for the third conviction.
(k) For permitting, allowing, consenting to, or tolerating the use of a privately-owned motor vehicle for hire in
violation of Section seven, subsections (a), (b), and (c), of this Act, there shall be imposed upon the owner of the
vehicle a fine of five hundred pesos and the certificate of registration shall be suspended for a period of three
months for the first conviction, and an increase of one hundred pesos in the fine and one month's suspension of
the registration for each subsequent conviction.
(l) For violation of any provisions of this Act or regulations promulgated pursuant hereto, not hereinbefore
specifically punished, a fine of not less than ten or more than fifty pesos shall be imposed.
(m) In the event an offender cannot pay any fine imposed pursuant to the provisions of this Act, he shall be made
to undergo subsidiary imprisonment as provided for in the Revised Penal Code.
(n) If, as the result of negligence or reckless or unreasonable fast driving, any accident occurs resulting in death
or injury of any person, the motor vehicle operator at fault shall, upon conviction, be punished under the
provisions of the Revised Penal Code.
Section 57. Punishment for other offenses. - The conviction of any person for any offense under this Act shall not
bar his prosecution for any other offense which may have been committed by such person concurrently with the
commission of the offense of which he was convicted or in doing the act or series of acts which constituted the
offense of which he was convicted.
Section 58. Duty of clerks of court. - It is hereby made the duty of clerks of the Court of First Instance, the City
Court of Municipal Court trying traffic violation cases to certify to the Commission the result of any case, whether
criminal or civil, involving violations of any provision of this Act or of other laws and ordinances relating to motor
vehicles. Said certificate shall specifically contain the name of the driver or owner of the vehicle involved, his
address, the number of his license and/or of the certificate or registration of his vehicle, and the date thereof, and
the offense of which he was convicted or acquitted.
ARTICLE II
Collection of Fees, Taxes and Fines, Liens, Allotment of Funds
Section 59. (a) Collection of fees; national and local taxes; toll fees. - The collection of all fees, taxes, and fines,
under the provisions of this Act shall be made in accordance with regulations to be prescribed by the
Commissioner and approved jointly by the Auditor General.
(b) No taxes or fees other than those prescribed in this Act shall be imposed for the registration or operation or
on the ownership of any motor vehicle, or for the exercise of the profession of chauffeur, by any municipal
corporation, the provisions of any city charter to the contrary notwithstanding: Provided, however, That any
provincial board, city or municipal council or board or other competent authority may enact and collect such
reasonable and equitable toll fees for the use of such bridges and ferries, within their respective jurisdiction, as
may be authorized and approved by the Secretary of Public Works and Communications, and also for the use of
such public roads, as may be authorized by the President of the Philippines upon recommendation of the
Secretary of Public Works and Communications, but in none of these cases shall any toll fees be charged or
collected until and unless the approved schedule of tolls has been posted legibly in a conspicuous place at such
toll station.
Section 60. The lien upon motor vehicles. - Any balance of fees for registration, re-registration or delinquent Section 64. Appropriation. - To carry out effectively the provisions of this Act, the amount of two hundred fifty
registration of a motor vehicle, remaining unpaid and all fines imposed upon any vehicle owner, shall constitute a thousand pesos is hereby appropriated out of the fees collected under this Act, in addition to the appropriations
first lien upon the motor vehicle concerned. provided in the General Appropriations Act, for the expense of this Commission for the fiscal year beginning July
first, nineteen hundred and sixty-four, to June thirtieth, nineteen hundred and sixty-five: Provided, however, That
The Commission is hereby vested with authority to issue a warrant of constructive or actual distraint or and levy any savings in the appropriations of the Motor Vehicles Office for the fiscal year beginning July first, nineteen
to any owner of motor vehicle who has any balance of fees for registration, re-registration or delinquent hundred and sixty-three, to June thirtieth, nineteen hundred and sixty-four shall likewise be available for this
registration of a motor vehicle remaining unpaid, which upon demand by the Commissioner of the Land purpose.
Transportation Commission or any of his deputies executing such warrant, the owner of the said vehicle shall
surrender same at the time demanded, except when the attachment or execution is under any judicial process.
Any owner who fails or refuses to surrender any of such property or vehicle not so surrendered shall be punished
by a fine not exceeding the amount of the fees (including penalties and interests, if any) for the collection of Section 65. Separability. - If any provisions of this Act or the application thereof to any person or circumstance is
which such warrant has been issued, together with the costs and interests, if any, from the time of such held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances,
surrender. In addition, such owner shall punished by a fine of not more than three hundred pesos or an shall not be affected thereby.
imprisonment not more than six months, or both.
Section 66. Effectivity. - This Act shall take effect upon its approval.
Section 61. Disposal of monies collected. - Monies collected under the provisions of this Act shall be deposited in
a special trust account in the National Treasury to constitute the Highway Special Fund, which shall be
Approved: June 20, 1964
apportioned and expended in accordance with the provisions of the "Philippine Highway Act of 1953": Provided,
however, That the amount necessary to maintain and equip the Land Transportation Commission but not to
exceed fifteen per cent of the total collections during any one year, shall be set aside for the purpose.

8. Article XII, Sec. 11 of the 1987 Philippine Constitution

ARTICLE III SECTION 11. No franchise, certificate, or any other form of authorization for the
Final Provisions operation of a public utility shall be granted except to citizens of the Philippines or to
corporations or associations organized under the laws of the Philippines at least sixty
per centum of whose capital is owned by such citizens, nor shall such franchise,
Section 62. No provincial board, city or municipal board or council shall enact or enforce any ordinance or
certificate, or authorization be exclusive in character or for a longer period than fifty
resolution in conflict with the provisions of this Act, or prohibiting any deputy or agent of the Commission to
years. Neither shall any such franchise or right be granted except under the condition
enforce this Act within their respective territorial jurisdiction and the provisions of any charter to the contrary
that it shall be subject to amendment, alteration, or repeal by the Congress when the
notwithstanding.
common good so requires. The State shall encourage equity participation in public
utilities by the general public. The participation of foreign investors in the governing body
Section 63. Repeal of laws and ordinances. - Act Numbered Thirty-nine hundred ninety-two, as amended, and all of any public utility enterprise shall be limited to their proportionate share in its capital,
laws, executive orders, ordinances, resolutions, regulations, or parts thereof in conflict with the provisions of this and all the executive and managing officers of such corporation or association must be
Act are repealed: Provided, however, That nothing contained in this Act shall be construed as limiting or citizens of the Philippines.
superseding any provisions of the Public Service Act, as amended, with respect to the control by the Public
Service Commission of motor vehicles operating as public service, nor shall any provision of this Act be
B. Concept of public utility & public service (Sec. 13, Public Service Act)
construed as limiting or abridging the powers conferred upon and exercised by the Public Service Commission
with regards to the control and supervision of the operation of such motor vehicles as public service.
 A “public utility” is a business or service engaged in regularly supplying the public with
some commodity or service of public consequence such as electricity, gas, water,
transportation, telephone or telegraph service.
A “public service” is define as every person that may own, operate, manage, control in the
Philippines, for hire/compensation, with general/limited clientele whether permanent,
occasional or accidental, and done for general business purposes, any common carrier,
railroad, street railway, traction railway, subway motor vehicle, steamboat, or steamship line,
ferries and watercraft, shipyard, ice‐plant, electric light, heat and power or any other public
utility.
C. Constitutional Limitations on operation of public utilities (Art. XII, 1987 Philippine
Constitution)
No franchise, certificate, or any other form of authorization for the operation of a
public utility shall be granted except to citizens of the Philippines or to corporations
or associations organized under the laws of the Philippines at least sixty per
centum of whose capital is owned by such citizens, nor shall such franchise,
certificate, or authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except under the
condition that it shall be subject to amendment, alteration, or repeal by the
Congress when the common good so requires. The State shall encourage equity
participation in public utilities by the general public. The participation of foreign
investors in the governing body of any public utility enterprise shall be limited to
their proportionate share in its capital, and all the executive and managing officers
of such corporation or association must be citizens of the Philippines. (Art. XII, Sec.
11 of the Philippine 1987 Constitution)
D. Regulatory Agencies
Department of Transportation
The Department of Transportation (DOTr) is the primary policy, planning, programming,
coordinating, implementing and administrative entity of the executive branch of the
government on the promotion, development and regulation of a dependable and coordinated
network of transportation and communications systems, as well as in the fast, safe, efficient
and reliable transportation and communications services.
1. SECTORAL OFFICES:
Land Transportation Office (LTO)
The LTO promotes the safety and comfort of the traveling public with respect to motor
vehicles. The LTO is also tasked with collecting various fees from the registration of
motor vehicles, the issuance of licenses to qualified motor vehicle drivers, the collection
of fines and penalties for motor vehicle related infractions, and the issuance of motor
vehicle license plates.
Land Transportation Franchising and Regulatory Board (LTFRB)
The LTFRB was created by virtue of an Executive order issued on June 19, 1987, with
the goal of simplifying the land transportation industry franchising system. Since the
creation of the LTFRB, the issuance of franchises for land transport operators has
become more stringent, resulting in higher safety standards for land travel. Technical
evaluation staff ensure that operating and safety standards of commercial and private
vehicles are observed, prior to the issuance of operating franchises.
Philippine Coast Guard (PCG)
The PCG is an armed and uniformed service primarily tasked with enforcing all
applicable laws within the Philippine waters, conducting maritime security operations,
safeguarding of life and property at sea and protecting the marine environment and
resources.
2. ATTACHED AGENCY:
CIVIL AVIATION AUTHORITY OF THE PHILIPPINES (CAAP)
The CAAP is responsible for implementing policies on civil aviation in order to ensure
safe, economical, and efficient air travel. As an independent regulatory body with quasi-
judicial and quasi-legislative powers, the CAAP is mandated to set comprehensive, clear
and impartial rules and regulations for the Philippine aviation industry.
PHILIPPINE AEROSPACE DEVELOPMENT CORPORATION (PADC)
The PADC undertakes business and development activities for the establishment of a
reliable aviation and aerospace industry within the Philippines. It engages in the design,
manufacture, and sale of all forms of aircraft, and also develops local capabilities in the
maintenance, repair, and modification of aviation equipment.
PHILIPPINE NATIONAL RAILWAYS (PNR)
The PNR was created via legislation in June 1964, in order to provide a nationwide
railway transportation system. There are currently plans to create new lines connecting
 the rapidly developing areas in Central Luzon and the South Tagalog region with Metro-
Manila.
PHILIPPINE PORTS AUTHORITY (PPA)
The PPA is the primary government agency concerned with the planning and
development of the country’s seaports. Established in 1974, the PPA’s charter was
amended by Executive Order 857, which expanded its functions to include the
integration and coordination of ports nationwide.
E. Concept of franchise and certificate of public convenience
A “franchise” is a privilege conferred upon operators by congress, authorizing them to
engage in a certain type of business.
What is a Certificate of Public Convenience (CPC)?
A: An authorization issued for the operation of public services for which no franchise,
either municipal or legislative, is required by law, such as a common carrier.
What are the requirements for the grant of certificate of public convenience?
A: 1. Applicant must be a citizen of the Philippines. If the applicant is a Corporation,
60% of its capital must be owned by Filipinos
2. Applicant must prove public necessity
3. Applicant must prove the operation of proposed public service will promote public
interest in a proper and suitable manner; and
4. Applicant must have sufficient financial capability to undertake proposed services
and meeting responsibilities incidental to its operation. (Kilusang Mayo Uno v.
Garcia G.R. No. 108584, Dec. 22, 1994)
Cite instances where a certificate of public convenience is not necessary?
A:
1. Warehouses
2. Animal‐drawn vehicles or banca powered by oar or by sail; tug boats and lighters
3. Airships except as to fixing rates
4. Radio companies, except as to fixing of rates
5. Ice plants
6. Public market
7. Public utilities operated by the national government or political subdivision
except as to rates.
F. CASES:
1. NATIONAL DEVELOPM ENT COM PANY vs. THE COURT OF APPEALS and DEVELOPMENT
INSURANCE & SURETY CORPORATION
FACTS: In accordance with a memorandum agreement entered into between defendants NDC and MCP on
September 1 3, 1 962, defendant NDC as the first preferred mortgagee of three ocean going vessels including
one with the name 'Dona Nati' appointed defendant MCP as its agent to manage and operate said vessel for and
in its behalf and account. Thus, on February 28, 1 964 the E. Philipp Corporation of New York loaded on board
the vessel "Dona Nati" at San Francisco, California, a total of 1,200 bales of American raw cotton consigned to
the order of Manila Banking Corporation, Manila and the People's Bank and Trust Company acting for and in
behalf of the Pan Asiatic Commercial Company, Inc., who represents Riverside Mills Corporation. Also loaded on
the same vessel at Tokyo, Japan, were the cargo of Kyokuto Boekui, Kaisa, Ltd., consigned to the order of
Manila Banking Corporation consisting of 200 cartons of sodium lauryl sulfate and 1 0 cases of aluminum foil. En
route to Manila the vessel Dofia Nati figured in a collision at 6:04 a.m. on April 15, 1 964 at Ise Bay, Japan with a
Japanese vessel 'SS Yasushima Maru' as a result of which 550 bales of aforesaid cargo of American raw cotton
were lost and/or destroyed, of which 535 bales as damaged were landed and sold on the authority of the General
Average Surveyor for Yen 6,045,-500 and 15 bales were not landed and deemed lost. The damaged and lost
cargoes was worth P344,977.86 which amount, the plaintiff as insurer, paid to the Riverside Mills Corporation as
holder of the negotiable bills of lading duly endorsed Also considered totally lost were the aforesaid shipment of
Kyokuto, Boekui Kaisa Ltd., consigned to the order of Manila Banking Corporation, Manila, acting for Guilcon,
Manila, The total loss was P1 9,938.00 which the plaintiff as insurer paid to Guilcon as holder of the duly
endorsed bill of lading Thus, the plaintiff had paid as insurer the total amount of P364,915.86 to the consignees
or their successors-in-interest, for the said lost or damaged cargoes. Hence, plaintiff filed this complaint to
recover said amount from the defendants-NDC and MCP as owner and ship agent respectively, of the said 'Dofia
Nati' vessel.
 On April 22, 1 965, the Development Insurance and Surety Corporation filed before the then Court of
First Instance of Manila an action for the recovery of the sum of P364,91 5.86 plus attorney's fees of P1 0,000.00
against NDC and MCP.
ISSUE: The pivotal issue in these consolidated cases is the determination of which laws govern loss or
destruction of goods due to collision of vessels outside Philippine waters, and the extent of liability as well as the
rules of prescription provided thereunder.
HELD: In the case at bar, it has been established that the goods in question are transported from San Francisco,
California and Tokyo, Japan to the Philippines and that they were lost or due to a collision which was found to
have been caused by the negligence or fault of both captains of the colliding vessels. Under the above ruling, it is
evident that the laws of the Philippines will apply, and it is immaterial that the collision actually occurred in foreign
waters, such as Ise Bay, Japan.
Under Article 1 733 of the Civil Code, 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 circumstances of each case. Accordingly, under
Article 1735 of the same Code, in all other than those mentioned is Article 1734 thereof, the common carrier shall
be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the
extraordinary diligence required by law.
It appears, however, that collision falls among matters not specifically regulated by the Civil Code, so
that no reversible error can be found in respondent courses application to the case at bar of Articles 826 to 839,
Book Three of the Code of Commerce, which deal exclusively with collision of vessels
More specifically, Article 826 of the Code of Commerce provides that where collision is imputable to the
personnel of a vessel, the owner of the vessel at fault, shall indemnify the losses and damages incurred after an
expert appraisal. But more in point to the instant case is Article 827 of the same Code, which provides that if the
collision is imputable to both vessels, each one shall suffer its own damages and both shall be solidarily
responsible for the losses and damages suffered by their cargoes.
Significantly, under the provisions of the Code of Commerce, particularly Articles 826 to 839, the
shipowner or carrier, is not exempt from liability for damages arising from collision due to the fault or negligence
of the captain. Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted
doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or
constructive control over the conduct of the voyage.
As found by the trial court and by the Court of Appeals, the Memorandum Agreement of September 13,
1962 shows that NDC appointed MCP as Agent, a term broad enough to include the concept of Ship-agent in
Maritime Law. In fact, MCP was even conferred all the powers of the owner of the vessel, including the power to
contract in the name of the NDC. Consequently, under the circumstances, MCP cannot escape liability.
It is well settled that both the owner and agent of the offending vessel are liable for the damage done
where both are impleaded; that in case of collision, both the owner and the agent are civilly responsible for the
acts of the captain; that while it is true that the liability of the naviero in the sense of charterer or agent, is not
expressly provided in Article 826 of the Code of Commerce, it is clearly deducible from the general doctrine of
jurisprudence under the Civil Code but more specially as regards contractual obligations in Article 586 of the
Code of Commerce. Moreover, the Court held that both the owner and agent (Naviero) should be declared jointly
and severally liable, since the obligation which is the subject of the action had its origin in a tortious act and did
not arise from contract. Consequently, the agent, even though he may not be the owner of the vessel, is liable to
the shippers and owners of the cargo transported by it, for losses and damages occasioned to such cargo,
without prejudice, however, to his rights against the owner of the ship, to the extent of the value of the vessel, its
equipment, and the freight.
As to the extent of their liability, MCP insists that their liability should be limited to P200.00 per package
or per bale of raw cotton as stated in paragraph 1 7 of the bills of lading. Also the MCP argues that the law on
averages should be applied in determining their liability.
MCP's contention is devoid of merit. The declared value of the goods was stated in the bills of lading
and corroborated no less by invoices offered as evidence ' during the trial. Besides, common carriers, in the
language of the court in Juan Ysmael & Co., Inc. v. Barrette et al., (51 Phil. 90 [1 927]) "cannot limit its liability for
injury to a loss of goods where such injury or loss was caused by its own negligence." Negligence of the captains
of the colliding vessel being the cause of the collision, and the cargoes not being jettisoned to save some of the
cargoes and the vessel, the trial court and the Court of Appeals acted correctly in not applying the law on
averages
Finally, on the issue of prescription, the trial court correctly found that the bills of lading issued allow
transshipment of the cargo, which simply means that the date of arrival of the ship Dona Nati on April 18,1964
was merely tentative to give allowances for such contingencies that said vessel might not arrive on schedule at
Manila and therefore, would necessitate the trans-shipment of cargo, resulting in consequent delay of their
arrival. In fact, because of the collision, the cargo which was supposed to arrive in Manila on April 1 8, 1 964
arrived only on June 12, 13, 18, 20 and July 10, 13 and 15, 1964. Hence, had the cargoes in question been
saved, they could have arrived in Manila on the above-mentioned dates. Accordingly, the complaint in the instant
case was filed on April 22, 1 965, that is, long before the lapse of one (1) year from the date the lost or damaged
cargo "should have been delivered" in the light of Section 3, sub-paragraph (6) of the Carriage of Goods by Sea
Act.

2. Tatad vs Sec. Garcia
FACTS:
In 1989, DOTC planned to construct a light railway transit line along EDSA, a major thoroughfare in Metropolitan
Manila, which shall traverse the cities of Pasay, Quezon, Mandaluyong and Makati. The plan was intended to
provide a mass transit system along EDSA and alleviate the congestion and growing transportation problem in the
metropolis.
In accordance with the provisions of R.A. No. 6957 and to set the EDSA LRT III project underway, DOTC, on
January 22, 1991 and March 14, 1991, issued Department Orders Nos. 91-494 and 91-496, respectively creating
the Prequalification Bids and Awards Committee (PBAC) and the Technical Committee.
The deadline set for submission of prequalification documents was March 21, 1991, later extended to April 1,
1991. Five groups responded to the invitation namely, ABB Trazione of Italy, Hopewell Holdings Ltd. of
Hongkong, Mansteel International of Mandaue, Cebu, Mitsui & Co., Ltd. of Japan, and EDSA LRT Consortium.
After evaluating the prequalification, bids, the PBAC issued a Resolution on May 9, 1991 declaring that of the five
applicants, only the EDSA LRT Consortium "met the requirements of garnering at least 21 points per criteria [sic],
except for Legal Aspects, and obtaining an over-all passing mark of at least 82 points"
Finding this proposal to be in compliance with the bid requirements, DOTC and respondent EDSA LRT Corporation,
Ltd., in substitution of the EDSA LRT Consortium, entered into an "Agreement to Build, Lease and Transfer a Light
Rail Transit System for EDSA" under the terms of the BOT Law (Rollo, pp. 147-177).
In a letter dated March 13, 1992, Executive Secretary Franklin Drilon, who replaced Executive Secretary Orbos,
informed Secretary Prado that the President could not grant the requested approval for the following reasons: (1)
that DOTC failed to conduct actual public bidding in compliance with Section 5 of the BOT Law; (2) that the law
authorized public bidding as the only mode to award BOT projects, and the prequalification proceedings was not
the public bidding contemplated under the law; (3) that Item 14 of the Implementing Rules and Regulations of the
BOT Law which authorized negotiated award of contract in addition to public bidding was of doubtful legality; and
(4) that congressional approval of the list of priority projects under the BOT or BT Scheme provided in the law had
not yet been granted at the time the contract was awarded (Rollo, pp. 178-179).
In view of the comments of Executive Secretary Drilon, the DOTC and private respondents re-negotiated the
agreement.
According to the agreements, the EDSA LRT III will use light rail vehicles from the Czech and Slovak Federal
Republics and will have a maximum carrying capacity of 450,000 passengers a day, or 150 million a year to be
achieved-through 54 such vehicles operating simultaneously. The EDSA LRT III will run at grade, or street level,
on the mid-section of EDSA for a distance of 17.8 kilometers from F.B. Harrison, Pasay City to North Avenue,
Quezon City. The system will have its own power facility (Revised and Restated Agreement, Sec. 2.3 (ii); Rollo p.
55). It will also have thirteen (13) passenger stations and one depot in 16-hectare government property at North
Avenue (Supplemental Agreement, Sec. 11; Rollo, pp. 91-92).
ISSUE: Can respondent EDSA LRT Corporation, Ltd., a foreign corporation, own the facilities and equipment
used EDSA LRT III project?
HELD:
YES. The Constitution, in no uncertain terms, requires a franchise for the operation of a public utility. However, it
does not require a franchise before one can own the facilities needed to operate a public utility so long as it does
not operate them to serve the public.
Section 11 of Article XII of the Constitution provides:
No franchise, certificate or any other form of authorization for the operation of a public utility shall be granted except
to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least
sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate or authorization
be exclusive character or for a longer period than fifty years . . . (Emphasis supplied).
In law, there is a clear distinction between the "operation" of a public utility and the ownership of the facilities and
equipment used to serve the public.
Ownership is defined as a relation in law by virtue of which a thing pertaining to one person is completely subjected
to his will in everything not prohibited by law or the concurrence with the rights of another (Tolentino, II
Commentaries and Jurisprudence on the Civil Code of the Philippines 45 [1992]).
The right to operate a public utility may exist independently and separately from the ownership of the facilities
thereof. One can own said facilities without operating them as a public utility, or conversely, one may operate a
public utility without owning the facilities used to serve the public. The devotion of property to serve the public may
be done by the owner or by the person in control thereof who may not necessarily be the owner thereof.
While private respondent is the owner of the facilities necessary to operate the EDSA. LRT III, it admits that it is
not enfranchised to operate a public utility (Revised and Restated Agreement, Sec. 3.2; Rollo, p. 57). In view of
this incapacity, private respondent and DOTC agreed that on completion date, private respondent will Whether or not petitioner RCPI, a grantee of a legislative franchise to operate a radio company, is required to
immediately deliver possession of the LRT system by way of lease for 25 years, during which period DOTC shall secure a certificate of public convenience and necessity before it can validly operate its radio stations including
operate the same as a common carrier and private respondent shall provide technical maintenance and repair radio telephone services in the aforementioned areas.
services to DOTC (Revised and Restated Agreement, Secs. 3.2, 5.1 and 5.2; Rollo, pp. 57-58, 61-62).
RULING:
In sum, private respondent will not run the light rail vehicles and collect fees from the riding public. It will have no
Yes. Petition dismissed.
dealings with the public and the public will have no right to demand any services from it.
Presidential Decree No. 1- the Public Service Commission was abolished and its functions were transferred to
three specialized regulatory boards, as follows: the Board of Transportation, the Board of Communications and the
Board of Power and Waterworks. The functions so transferred were still subject to the limitations provided in
3. G.R. No. L-68729 May 29, 1987
sections 14 and 15 of the Public Service Law, as amended.
Radio Communications v NTC
The succeeding Executive Order No. 546- the Board of Communications and the Telecommunications Control
Ponente: J. Gutierrez Jr.
Bureau were abolished and their functions were transferred to the National Telecommunications Commission
Section 15- b. Establish, prescribe and regulate areas of operation of particular operators of public service
FACTS:
communications; and determine and prescribe charges or rates pertinent to the operation of such public utility
facilities and services except in cases where charges or rates are established by international bodies
RCPI operated a radio communications system since 1957 under legislative franchise granted by Republic Act No.
or associations of which the Philippines is a participating member or by bodies recognized by the Philippine
2036 (1957). The petitioner established a radio telegraph service in Sorsogon, Sorsogon (1968). in San Jose,
Government as the proper arbiter of such charges or rates; c. Grant permits for the use of radio frequencies for
Mindoro (1971), and Catarman, Samar (1983).
wireless telephone and telegraph systems and radio communication systems including amateur radio stations and
radio and television broadcasting systems;
Kayumanggi Radio, on the other hand, was given the rights by the NTC to operate radio networks in the
same areas. RCPI filed a complaint in the NTC and sought to prohibit Kayumanggi Radio to operate in the
The exemption enjoyed by radio companies from the jurisdiction of the Public Service Commission and the Board
same areas. The NTC ruled against the RTC’s favor and commanded RCPI to desist in the operation of radio
of Communications no longer exists because of the changes effected by the Reorganization Law and implementing
telegraphs in the three areas.
executive orders.
RTC filed a MFR in 1984. This was denied.
The petitioner's claim that its franchise cannot be affected by Executive Order No. 546 on the ground that it has
long been in operation since 1957 cannot be sustained.
In the SC, Petitioner alleged that the Public Service Law had sections that was still in effect even if the Public
Service Commission was abolished and the NTC was established.
Today, a franchise, being merely a privilege emanating from the sovereign power of the state and owing its
existence to a grant, is subject to regulation by the state itself by virtue of its police power through its administrative
These were S13- the Commission shall have jurisdiction, supervision, and control over all public services and their
agencies. Pangasinan transportation Co.- statutes enacted for the regulation of public utilities, being a
franchises S 14- Radio companies are exempt from the commission’s authority except with respect to the fixing of
proper exercise by the State of its police power, are applicable not only to those public utilities coming into existence
rates And S 15-no public service shall operate in the Philippines without possessing a valid and subsisting
after its passage, but likewise to those already established and in operation.
certificate from the Public Service Commission, known as "certificate of public convenience,".
Executive Order No. 546, being an implementing measure of P.D. No. I insofar as it amends the Public Service
ISSUE:
Law (CA No. 146, as amended) is applicable to the petitioner who must be bound by its provisions.
The position of the petitioner that by the mere grant of its franchise under RA No. 2036 it can operate a radio Holds himself out for all people Contracts with particular individuals or
communications system anywhere within the Philippines is erroneous. indiscriminately groups only

Sec. 4(a). This franchise shall not take effect nor shall any powers thereunder be exercised by the grantee until the 2. As to required diligence
Secretary of Public works and Communications shall have allotted to the grantee the frequencies and wave lengths
to be used, and issued to the grantee a license for such case. Extraordinary diligence is required Ordinary diligence is required

Thus, in the words of R.A. No. 2036 itself, approval of the then Secretary of Public Works and Communications 3. As to regulation
was a precondition before the petitioner could put up radio stations in areas where it desires to operate.
Subject to State regulation Not subject to State regulation
The records of the case do not show any grant of authority from the then Secretary of Public Works and
Communications before the petitioner installed the questioned radio telephone services in San Jose, Mindoro in 4. Stipulation limiting liability
1971. The same is true as regards the radio telephone services opened in Sorsogon, Sorsogon and Catarman,
Samar in 1983. No certificate of public convenience and necessity appears to have been secured by the petitioner Parties may not agree on limiting the Parties may limit the carrier’s liability,
from the public respondent when such certificate, was required by the applicable public utility regulations. carrier’s liability except when provided provided it is not contrary to law, morals
by law or good customs
The Constitution mandates that a franchise cannot be exclusive in nature nor can a franchise be granted except
that it must be subject to amendment, alteration, or even repeal by the legislature when the common good so 5. Exempting circumstance
requires.
Prove extraordinary diligence and Art. caso fortuito, Art. 1174 NCC
1733, NCC
II. COMMON CARRIER
A. Contract of Carriage, definition 6.Presumption of negligence

A “Contract of Carriage” is a binding agreement (evidenced usually by an air waybill, bill of There is a presumption of fault or No presumption of fault or negligence
lading, or passenger ticket) which contains conditions of carriage that spell out the obligations negligence
and rights of a carrier and a shipper/passenger.
7.Governing law
B. Common Carrier, definition (Article 1732 NCC)
Law on common carriers Law on obligations and contracts
“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. D. Distinguished from towage, arrastre and stevedoring

C. Common Carrier and Private Carrier, distinguished “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
COMMON CARRIER PRIVATE CARRIER
compensation, offering their services to the public.
1. As to availability
 “Contract of Towage” is a contract whereby one vessel, usually motorized, pulls another,
whether loaded or not with merchandise, from one place to another, for a compensation. It is
a contract for services rather than a contract of carriage.
“Arrastre Service” is a contract for the unloading of goods from a vessel.
“Stevedoring Service” is the carriage of goods from the warehouse or pier to the holds of
the vessel.
E. Tests to determine Common Carrier
The SC in First Philippine Industrial Corporation vs. CA (1995) reiterated the following tests:
1. It must be engaged in the business of carrying goods for others as a public
employment and must hold itself out as ready to engage in the transportation of goods
generally as a business and not as a casual occupation;
2. It must undertake to carry goods of the kind to which its business in confined;
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.
1. Extraordinary diligence and the underlying reason
“Extraordinary diligence” is that extreme measure of care and caution which persons
of unusual prudence and circumspection use for securing and preserving their own
property or rights. The law requires common carriers to render service with the greatest
skill and utmost foresight because of the nature of their business and for reasons of
public policy.

3. It must undertake to carry by the method by which his business is conducted and 2. Requirements of extraordinary diligence in carriage by sea
over its established roads; and a. Warranty of seaworthiness of the vessel (Section 3 (1) and 3 (2) COGSA; Article
609 Code of Commerce)
4. The transportation must be for hire.
Section 3. (1) The carrier shall be bound, before and at the beginning of the voyage, to
In National Steel Corp. vs. CA (1997) the SC held that the true test of a common carrier is the exercise due diligence to —
carriage of goods or passengers provided it has space for all who opt to avail themselves of
its transportation for a fee. (a) Make the ship seaworthy;

F. Parties to the contract of Carriage (b) Properly man, equip, and supply the ship;

CARRIAGE OF GOODS CARRIAGE OF PASSENGERS (c) Make the holds, refrigerating and cooling chambers, and all other parts of the
ship in which goods are carried, fit and safe for their reception carriage and
preservation.
Parties (2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and
1. Common carrier 1. Common carrier discharge the goods carried.
2. Shipper 2. Passenger
3. Consignee ARTICLE 609. Captains, masters or patrons of vessels must be Filipinos, have legal
capacity to contract in accordance with this code, and prove the skill, capacity, and
qualifications necessary to command and direct the vessel, as established by marine or
G. Diligence required of a Common Carrier (Article 1733 NCC) navigation laws, ordinances, or regulations, and must not be disqualified according to
the same for the discharge of the duties of the position.
 If the owner of a vessel desires to be the captain thereof, without having the legal
qualifications therefor, he shall limit himself to the financial administration of the vessel,
and shall intrust the navigation to a person possessing the qualifications required by
said ordinances and regulations.
b. No overloading
The Court found that the Don Juan was overloaded. The Certificate of Inspection, dated
August 27, 1979, issued by the Philippine Coast Guard Commander at Iloilo City stated
that the total number of persons allowed on the ship was 864, of whom 810 are
passengers, but there were actually 1,004 on board the vessel when it sank, 140
persons more than the maximum number that could be safely carried by it.
Taking these circumstances together, and the fact that the M/V Don Juan, as the faster
and better-equipped vessel, could have avoided a collision with the PNOC tanker, this
Court held that even if the Tacloban City had been at fault for failing to observe an
internationally-recognized rule of navigation, the Don Juan was guilty of contributory
negligence. (Negros Navigation vs. CA, GR No. 110398, November 7, 1997)
c. Proper storage
d. Obligation of captain and crew
e. Rule on deviation and transshipment (Article 359 Code of Commerce)
ARTICLE 359. If there is an agreement between the shipper and the carrier as to the
road over which the conveyance is to be made, the carrier may not change the route,
unless it be by reason of force majeure; and should he do so without this cause, he shall
be liable for all the losses which the goods he transports may suffer from any other
cause, beside paying the sum which may have been stipulated for such case.
When on account of said cause of force majeure, the carrier had to take another route
which produced an increase in transportation charges, he shall be reimbursed for such
increase upon formal proof thereof.
3. Requirements of extraordinary diligence in carriage by land
a. Good condition of the vehicle
b. Compliance with traffic rules (RA 4136)
c. Obligation to inspect
4. Requirements of extraordinary diligence in carriage by air
H. Liabilities of Common Carriers in case of breach of contract of carriage
1. Culpa contractual, Culpa aquiliana, Culpa criminal
What are the liabilities of a common carrier in case of breach of contract of carriage?
A: 1. Culpa contractual – negligence based on contract; filed against the common
carrier wherein he is a passenger.
2. Culpa aquiliana – negligence based on tort; filed against the drivers of both
vehicles and the owners thereof.
3. Culpa criminal – negligence based on a crime; filed against the driver at fault if
his act amounts to a crime.
What are the defenses available in culpa contractual?
A: 1. Exercise of extraordinary due diligence
2. Due diligence in the selection and supervision of employees.
3. Fortuitous event
4. Contributory negligence of passengers – it does not bar recovery of damages for
death or injury if the proximate cause is the negligence of the common carrier but
the amount of damages shall be equitably reduced. (Art. 1762)
2. Prescriptive period
a. Overland transportation of goods and coastwise shipping (Article 366 Code of
Commerce)
ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise,
the claim against the carrier for damage or average be found therein upon opening the
packages, may be made, provided that the indications of the damage or average which
gives rise to the claim cannot be ascertained from the outside part of such packages, in
which case the claim shall be admitted only at the time of receipt.
After the periods mentioned have elapsed, or the transportation charges have been
paid, no claim shall be admitted against the carrier with regard to the condition in which
the goods transported were delivered.
 b. International carriage of goods by sea (Article 3 (6) of Code of Commerce)
Section 3. (6) Unless notice of loss or damage and the general nature of such loss
or damage be given in writing to the carrier or his agent at the port of discharge
before or at the time of the removal of the goods into the custody of the person
entitled to delivery thereof under the contract of carriage, such removal shall be
prima facie evidence of the delivery by the carrier of the goods as described in the
bill of lading. If the loss or damage is not apparent, the notice must be given within
three days of the delivery.
Said notice of loss or damage maybe endorsed upon the receipt for the goods
given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods has at the time of
their receipt been the subject of joint survey or inspection.
In any event the carrier and the ship shall be discharged from all liability in
respect of loss or damage unless suit is brought within one year after
delivery of the goods or the date when the goods should have been
delivered: Provided, That if a notice of loss or damage, either apparent or
concealed, is not given as provided for in this section, that fact shall not affect or
prejudice the right of the shipper to bring suit within one year after the delivery of
the goods or the date when the goods should have been delivered
In the case of any actual or apprehended loss or damage the carrier and the
receiver shall give all reasonable facilities to each other for inspecting and tallying
the goods.
I. Registered Owner Rule and Kabit System
J. CASES
4. SPOUSES JESUS FERNANDO and ELIZABETH S. FERNANDO vs. NORTHWEST AIRLINES, INC.
Ponente: J. Peralta Counsel:
FACTS: December 20, 2001, Jesus Fernando arrived at the LA Airport via Northwest Airlines Flight No. NW02 for
the Christmas holidays. He was asked by the Immigration Officer to have his return ticket verified and validated
since the date reflected thereon is August 2001. He approached some Northwest personnel named Linda
Puntawongdaycha, but the latter said that the ticket has been used and could not be considered as valid. He
explained that he was about to use the said ticket on August 20 or 21, 2001 on his way back to Manila from LA but
he could not book any seat because of some ticket restrictions so he, instead, purchased new business class ticket
on the said date. Hence, the ticket remains unused and perfectly valid. Jesus gave the Linda the number of his
Elite Platinum World Perks Card for her to access the ticket control record with the airline's computer and verify
the ticket’s validity. Linda refused and instead, informed the Immigration Officer that the ticket is not valid because
it had been used. Jesus Fernando was brought to the interrogation room of the Immigration and Naturalization
Services (INS) and interrogated for more than 2 hours. When he was finally cleared, he was granted a 12-day stay
in the US, instead of 6 months. Upon verification of the ticket, the NW personnel confirmed that the ticket remained
unused and perfectly valid and a new ticket was issued to Jesus Fernando.
January 29, 2002, the Fernandos have confirmed bookings on Northwest Airlines NW Flight No. 001 for
Narita, Japan and NW 029 for Manila. With boarding passes, tickets and other proper travel documents, they were
allowed entry to the departure area. In the gate, Northwest supervisor Linda Tang stopped them and demanded
for the presentation of their paper tickets (coupon type) which they failed to present since, they were issued
electronic tickets (attached to boarding pass). Linda Tang didn’t let them in. The Fernandos went back to the
Northwest ticket counter and were attended to by Jeanne Meyer who verified their bookings and "printed paper
tickets". Unfortunately, when they went back to the boarding gate, the plane had departed.
On April 30, 2002, the Fernandos filed for damages against Northwest before the RTC, Branch 97,
Quezon City, which was decided favorably. Thus, P200k for moral damages, $ 2K Actual damages, P50K as Atty’s
fees and cos of suit against Northwest.
Both appeal to the CA on August 30, 2013 but was denied. So was the MR on March 31, 2014
ISSUE: Had Northwest committed a Breach of Contract of Carriage?
HELD: Yes. A contract of carriage is defined as one whereby a certain person or association of persons obligate
themselves to transport persons, things, or goods from one place to another for a fixed price. Under Article 1732
of the Civil Code, this "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" is called a common carrier. Thus, a contract of carriage existed between the parties. They voluntarily and
freely gave their consent to an agreement whose object was the transportation of the Fernandos from LA to Manila,
and whose cause or consideration was the fare paid by the Fernandos to Northwest.
In a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault
or was negligent. All that he has to prove is the existence of the contract and the fact of its non-performance by the
carrier. Having proven the existence of a contract of carriage between Northwest and the Fernandos, and the fact
of non-performance by Northwest of its obligation as a common carrier, it is clear that Northwest breached its
contract of carriage with the Fernandos. Thus, Northwest opened itself to claims for compensatory, actual, moral
and exemplary damages, attorney's fees and costs of suit.
5. PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY vs. PKS SHIPPING COMPANY
Ponente: J, Vitug
FACTS: Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of 75K bags of cement worth P3,375,000.00. DUMC
insured the goods for its full value with Philippine American General Insurance Company (Philamgen). The goods
were loaded aboard the dumb barge Limar I. On the evening of 22 December 1988, 9pm, while Limar I was being
towed by PKS’ tugboat, MT Iron Eagle, the barge sank a couple of miles off the coast of Dumagasa Point, in
Zamboanga del Sur, bringing down with it the entire cargo.
DUMC filed a formal claim with Philamgen for the full amount of the insurance. Philamgen promptly made
payment; it then sought reimbursement from PKS Shipping of the sum paid to DUMC but the shipping company
refused to pay, prompting Philamgen to file suit against PKS Shipping with the Makati RTC.
RTC dismissed the complaint after finding that the total loss of the cargo could have been caused either
by a fortuitous event, in which case the ship owner was not liable or through the negligence of the captain and crew
of the vessel and that, under Article 587 of the Code of Commerce adopting the Limited Liability Rule, the ship
owner could free itself of liability by abandoning, as it apparently so did, the vessel with all her equipment and
earned freightage. The Court of Appeals affirmed in toto the decision of the trial court.
ISSUES: 1. Is PKS Shipping Company (Limar I) a common carrier?
2.Whether or not PKS Shipping Company is liable for the loss incurred by DUMC?
HELD: Yes. The Civil Code (Art. 1732) defines common carriers as 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. Article 1732 of the Code, in conjunction with Section 13(b) of
the Public Service Act, this Court held that there is no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (sideline).
The distinction between a common or public carrier and a private or special carrier lies in the character of the
business, such that if the undertaking is an isolated transaction, not a part of the business or occupation, and the
carrier does not hold itself out to carry the goods for the general public or to a limited clientele, although involving
the carriage of goods for a fee, the person or corporation providing such service could very well be just a private
carrier. Factual findings indicate that PKS Shipping has engaged itself in the business of carrying goods for others,
although for a limited clientele, undertaking to carry such goods for a fee. The regularity of its activities in this area
indicates more than just a casual activity on its part
No. While Article 1733 of the Civil Code requires common carriers to observe extraordinary diligence in the
vigilance over the goods they carry and they are presumed negligence, common carriers are exempt from liability
for loss, destruction, or deterioration of the goods due to any of the following causes: (1) Flood, storm, earthquake,
lightning, or other natural disaster or calamity; (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; and (5) Order or act of competent public authority.
In the instant case,the vessel was suddenly tossed by waves of extraordinary height of six (6) to eight
(8) feet and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barges hatches. The official
Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise Load Line Certificate
would attest to the seaworthiness of Limar I and should strengthen the factual findings of the appellate court. Thus,
are covered by the exemption and must be absolved from liability.
6. Malayan Insurance Company V Philippine First Insurance Company
FACTS: This is a petition for review on certiorari by herein petitioner Malayan Insurance, who was impleaded by
Reputable having executed its annual contract of carriage with Wyeth, as a third-party defendant in an effort to
collect the amount covered in the Special Risk Insurance Policy (SR Policy) for the amount of P1,000,000.00,
after a robbery or hijacking of Wyeth’s products – 1,000 boxes of Promil infant formula worth P2,357,582.70,
was executed by 10 armed men that led to cargo loss. Disclaiming any liability, Malayan argued, among others,
that under Section 5 of the SR Policy, the insurance does not cover any loss or damage to property which at the
time of the happening of such loss or damage is insured by any marine policy and that the SR Policy expressly
excluded third-party liability.
ISSUE: Will the Reputable be exempted, and only the Malayan Insurance be solely liable for the loss of cargo?
HELD: Yes. Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or
associations engaged in the business of carrying or transporting passenger or goods, or both by land, water or
air for compensation, offering their services to the public. On the other hand, a private carrier is one wherein the
carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for the
general public. A common carrier becomes a private carrier when it undertakes to carry a special cargo or
chartered to a special person only. For all intents and purposes, therefore, Reputable operated as a
private/special carrier with regard to its contract of carriage with Wyeth. Thus, being a private carrier, the extent
of Reputable’s liability is fully governed by the stipulations of the contract of carriage, one of which is that it shall
be liable to Wyeth for the loss of the goods/products due to any and all causes whatsoever, including theft,
robbery and other force majeure while the goods/products are in transit and until actual delivery to Wyeth’s
customers, salesmen and dealers. In our case, Reputable serves only one client, Wyeth and Sec. 5 of the
SR Policy only applies in case of double insurance.
7. HOME INSURANCE COMPANY, vs.AMERICAN STEAMSHIP AGENCIES, INC. .
Ponente: BENGZON, J.P., J.:
FACTS: "Consorcio Pesquero del Peru of South America" shipped freight pre-paid at Chimbate, Peru, 21,740
jute bags of Peruvian fish meal through SS Crowborough, covered by clean bills of lading Numbers 1 and 2, both
dated January 17, 1963. The cargo, consigned to San Miguel Brewery, Inc., now San Miguel Corporation, and
insured by Home Insurance Company for $202,505, arrived in Manila on March 7, 1963 and was discharged into
the lighters of Luzon Stevedoring Company. When the cargo was delivered to consignee San Miguel Brewery
Inc., there were shortages amounting to P12,033.85, causing the latter to lay claims against Luzon Stevedoring
Corporation, Home Insurance Company and the American Steamship Agencies, owner and operator of SS
Crowborough.
Home Insurance Company paid the consignee P14,870.71 — the insurance value of the loss, as full
settlement of the claim. Having been refused reimbursement by both the Luzon Stevedoring Corporation and
American Steamship Agencies, Home Insurance Company, as subrogee to the consignee, filed against them on
March 6, 1964 before the Court of First Instance of Manila a complaint for recovery of P14,870.71 with legal
interest, plus attorney's fees.
American Steamship Agencies denied liability by alleging that under the provisions of the Charter party
referred to in the bills of lading, the charterer, not the shipowner, was responsible for any loss or damage of the
cargo. Furthermore, it claimed to have exercised due diligence in stowing the goods and that as a mere
forwarding agent, it was not responsible for losses or damages to the cargo.
ISSUE: Is the stipulation in the charter party of the owner's non-liability valid so as to absolve the American
Steamship Agencies from liability for loss?
HELD: Stipulations of non-liability of owners of carriers are held contrary to public policy by the Civil Code.
However, a common carrier undertaking to carry special cargo or chartered to a special person only, becomes a
private carrier. As a private carrier, stipulations exempting the owner from liability for negligence of its agent is
not against public policy and is deemed valid. The Civil Code should not be applied where the common carrier
acted as private carrier
8. PERENES VS ZARATES G.R. No. 157917; August 29, 2012
Ponente: J, Bersamin
FACTS: In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Perena to transport their son,
Aaron Zarate, to and from school. The Perena were owners of a kia van being used for private school transport.
At about 6:45am of August 22, 1996, the driver, Clemente Alfaro, while the children were on board including Aaron,
decided to take a short cut in order to avoid traffic in a railroad crossing of the Philippine National Railway (PNR).
Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up which means it was
okay to cross. He then tried to overtake a bus. However, there was in fact an oncoming train but Alfaro no longer
saw the train as his view was already blocked by the bus he was trying to overtake. The bus was able to cross
unscathed but the van’s rear end was hit. During the collision, Aaron, was thrown off the van. His body hit the
railroad tracks and his head was severed. He was only 15 years old. Alfaro was not able to hear the train honking
from 50 meters away before the collision because the loud van stereo.
The Zarates sued PNR and the Perenas (Alfaro became at-large). Their cause of action against PNR
was based on quasi-delict. Their cause of action against the Perenas was based on breach of contract of common
carriage.
In their defense, the Perenas invoked that as private carriers they were not negligent in selecting Alfaro
as their driver as they made sure that he had a driver’s license and that he was not involved in any accident prior
to his being hired. In short, they observed the diligence of a good father in selecting their employee.
PNR also disclaimed liability as they insist that the railroad crossing they placed there was not meant for railroad
crossing.
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the decision of the
RTC and the CA, they awarded damages in favor of the Zarates for the loss of earning capacity of their dead son.
The Perenas appealed. They argued that the award was improper as Aaron was merely a high school student,
hence, the award of such damages was merely speculative. They cited the case of People vs Teehankee where
the Supreme Court did not award damages for the loss of earning capacity despite the fact that the victim there
was enrolled in a pilot school.
ISSUES:
1. Whether or not a school bus is a common carrier.
2. Whether or not the petitioner can be held jointly and severally liable with the PNR for damages.
DECISION:
1. A school bus is a common carrier.
The petitioners are not merely private carriers. Common carrier is a person, corporation, firm or association
engaged in the business of carrying or transporting passengers or goods or both by land, water, or air for
compensation, offering such services to the public.
The true test for a common carrier is that the undertaking is a part of the activity that he has held out to the general
public as his occupation or business.
The Perenas, as the operators of a school bus service were: (a) engaged in transporting passengers generally as
a business, not just as a casual occupation; (b) undertaking to carry passengers over established roads by the
method by which the business was conducted; and (c) transporting students for a fee. Despite catering to a limited
clientèle, the Perenas operated as a common carrier because they held themselves out as a ready transportation
indiscriminately to the students of a particular school living within or near where they operated the service and for
a fee.
The common carrier’s standard of care and vigilance as to the safety of the passengers is defined by law. Given
the nature of the business and for reasons of public policy, the common carrier is 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."
2. The petitioner can be held jointly and severally liable with the PNR for damages.
Petitioner’s defense that they exercised due diligence of a good father in selecting the driver or their employee is
not a tenable defense.
Being a common carrier, what is required of the Perenas is not mere diligence of a good father but extraordinary
diligence. Verily, their obligation as common carriers did not cease upon their exercise of diligently choosing Alfaro
as their employee. Article 1755 of the Civil Code specifies that the common carrier should "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."
To successfully fend off liability in an action upon the death or injury to a passenger, the common carrier must
prove his or its observance of that extraordinary diligence; otherwise, the legal presumption that he or it was at
fault or acted negligently would stand. The Perenas, acting as a common carrier, were already presumed to be
negligent at the time of the accident because death had occurred to their passenger. Perenas’ driver was entirely
negligent when he traversed the railroad tracks at a point not allowed for a motorist’s crossing despite being fully
aware of the grave harm to be thereby caused to his passengers; and when he disregarded the foresight of harm
to his passengers by overtaking the bus on the left side as to leave himself blind to the approach of the oncoming
train that he knew was on the opposite side of the bus.
9. ASIA LIGHTERAGE AND SHIPPING, INC., vs. COURT OF APPEALS and PRUDENTIAL GUARANTEE
AND ASSURANCE, INC.
Ponente: J, Puno
FACTS: On June 13, 1990, 3,150 metric tons of Better Western White Wheat in bulk, valued at
US$423,192.35[4] was shipped by Marubeni American Corporation of Portland, Oregon on board the vessel M/V
NEO CYMBIDIUM V-26 for delivery to the consignee, General Milling Corporation in Manila, evidenced by Bill of
Lading No. PTD/Man-4. The shipment was insured by the private respondent Prudential Guarantee and Assurance,
Inc. against loss or damage for P14,621,771.75 under Marine Cargo Risk Note RN 11859/90. On July 25, 1990,
the carrying vessel arrived in Manila and the cargo was transferred to the custody of the petitioner Asia Lighterage
and Shipping, Inc. The petitioner was contracted by the consignee as carrier to deliver the cargo to consignee's
warehouse at Bo. Ugong, Pasig City. On August 15, 1990, 900 metric tons of the shipment was loaded on barge
PSTSI III, evidenced by Lighterage Receipt No. 0364 for delivery to consignee. The cargo did not reach its
destination.
On August 17, 1990, the transport of said cargo was suspended due to a warning of an incoming typhoon. On
August 22, 1990, the petitioner proceeded to pull the barge to Engineering Island off Baseco to seek shelter from
the approaching typhoon. PSTSI III was tied down to other barges which arrived ahead of it while weathering out
the storm that night.A few days after, the barge developed a list because of a hole it sustained after hitting an
unseen protuberance underneath the water. The petitioner filed a Marine Protest on August 28, 1990.[8] It likewise
secured the services of Gaspar Salvaging Corporation which refloated the barge. [9] The hole was then patched
with clay and cement.
The barge was then towed to ISLOFF terminal before it finally headed towards the consignee's wharf on
September 5, 1990. Upon reaching the Sta. Mesa spillways, the barge again ran aground due to strong current. To
avoid the complete sinking of the barge, a portion of the goods was transferred to three other barges. The next
day, September 6, 1990, the towing bits of the barge broke. It sank completely, resulting in the total loss of the
remaining cargo. A second Marine Protest was filed on September 7, 1990. On September 14, 1990, a bidding
was conducted to dispose of the damaged wheat retrieved and loaded on the three other barges. The total
proceeds from the sale of the salvaged cargo was P201,379.75. On the same date, September 14, 1990,
consignee sent a claim letter to the petitioner, and another letter dated September 18, 1990 to the private
respondent for the value of the lost cargo. On January 30, 1991, the private respondent indemnified the consignee
in the amount of P4,104,654.22.[15] Thereafter, as subrogee, it sought recovery of said amount from the petitioner,
but to no avail.
On July 3, 1991, the private respondent filed a complaint against the petitioner for recovery of the amount of
indemnity, attorney's fees and cost of suit. Petitioner filed its answer with counterclaim. The Regional Trial Court
ruled in favor of the private respondent.
Petitioner appealed to the Court of Appeals insisting that it is not a common carrier. The appellate court
affirmed the decision of the trial court with modification. It contends that it is not a common carrier but a private
carrier. Allegedly, it has no fixed and publicly known route, maintains no terminals, and issues no tickets. It points
out that it is not obliged to carry indiscriminately for any person. It is not bound to carry goods unless it
consents. In short, it does not hold out its services to the general public
ISSUE: Is petitioner a public carrier? Did petitioner fail to exercise due extraordinary diligence?
HELD: Yes. In De Guzman vs. Court of Appeals,[21] we held that the definition of common carriers in Article 1732
of the Civil Code makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity. We also did not distinguish between
a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service
on an occasional, episodic or unscheduled basis. Further, we ruled that Article 1732 does not distinguish between
a carrier offering its services to the general public, and one who offers services or solicits business only from a
narrow segment of the general population.
In the case at bar, the principal business of the petitioner is that of lighterage and drayage[22] and it offers its
barges to the public for carrying or transporting goods by water for compensation. Petitioner is clearly a common
carrier. In De Guzman, supra,[23] we considered private respondent Ernesto Cendaa to be a common carrier even
if his principal occupation was not the carriage of goods for others, but that of buying used bottles and scrap metal
in Pangasinan and selling these items in Manila. Petitioner is a common carrier whether its carrying of goods is
done on an irregular rather than scheduled manner, and with an only limited clientele. A common carrier need not
have fixed and publicly known routes. Neither does it have to maintain terminals or issue tickets.
Petitioner also failed to exercise extraordinary diligence in its care and custody of the consignees goods.
Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by
them. They are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or
deteriorated. To overcome the presumption of negligence in the case of loss, destruction or deterioration of the
goods, the common carrier must prove that it exercised extraordinary diligence. There are, however, exceptions to
this rule. Article 1734 of the Civil Code enumerates the instances when the presumption of negligence does not
attach: Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless
the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster
or calamity; (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; (5) Order or act
of competent public authority.
In the case at bar, petitioner failed to prove that the typhoon is the proximate and only cause of the loss of
the goods, and that it has exercised due diligence before, during and after the occurrence of the typhoon to prevent
or minimize the loss. Even before the towing bits of the barge broke, it had already previously sustained damage
when it hit a sunken object while docked at the Engineering Island. It even suffered a hole. Clearly, this could not
be solely attributed to the typhoon. The partly-submerged vessel was refloated but its hole was patched with only
clay and cement. The patch work was merely a provisional remedy, not enough for the barge to sail safely. Thus,
when petitioner persisted to proceed with the voyage, it recklessly exposed the cargo to further damage. A portion
of the cross-examination of Alfredo Cunanan, cargo-surveyor of Tan-Gatue Adjustment Co., Inc

10. ESTRELLITA BASCOS VS. CA
Ponente: J, Campos Counsel: Modesto S Bascos: P; Pelaez, Adriano & Gregorio; R
FACTS: Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into a hauling
contract 2 with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter's 2,000 m/tons
of soya bean meal from Magallanes Drive, Del Pan, Manila to the warehouse of Purefoods Corporation in Calamba,
Laguna. To carry out its obligation, CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita Bascos
(petitioner) to transport and to deliver 400 sacks of soya bean meal worth P156,404.00 from the Manila Port Area
to Calamba, Laguna at the rate of P50.00 per metric ton. Petitioner failed to deliver the said cargo. As a
consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount of the lost goods in accordance with
the contract which stated that: “CIPTRADE shall be held liable and answerable for any loss in bags due to theft,
hijacking and non-delivery or damages to the cargo during transport at market value..."
Cipriano demanded reimbursement from petitioner but the latter refused to pay. Eventually, Cipriano filed
a complaint for a sum of money and damages with writ of preliminary attachment for breach of a contract of
carriage. The trial court granted the writ of preliminary attachment on February 17, 1987.
In her answer, petitioner interposed the following defenses: that there was no contract of carriage since
CIPTRADE leased her cargo truck to load the cargo from Manila Port Area to Laguna; that CIPTRADE was liable
to petitioner in the amount of P11,000.00 for loading the cargo; that the truck carrying the cargo was hijacked
along Canonigo St., Paco, Manila on the night of October 21, 1988; that the hijacking was immediately reported
to CIPTRADE and that petitioner and the police exerted all efforts to locate the hijacked properties; that after
preliminary investigation, an information for robbery and carnapping were filed against Jose Opriano, et al.; and
that hijacking, being a force majeure, exculpated petitioner from any liability to CIPTRADE.
After trial, the trial court rendered a decision in favor of Cipriano and against Bascos ordering the latter
to pay the former for actual damages for attorney’s fees and cost of suit.
The “Urgent Motion To Dissolve/Lift preliminary Attachment” Bascos was DENIED for being moot and
academic.
Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial court’s judgment.
ISSUES:
(1) Whether or not the petitioner was a common carrier
(2) Whether or not the loss of goods was due to force majeure
HELD:
(1) The petitioner was a common carrier. Article 1732 of the Civil Code defines a common carrier as "(a) person,
corporation or firm, or association 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." The test to determine a
common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he
has held out to the general public as his occupation rather than the quantity or extent of the business transacted."
12 In this case, petitioner herself has made the admission that she was in the trucking business, offering her
trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove the
same.
But petitioner argues that there was only a contract of lease because they offer their services only to a select
group of people. Regarding the first contention, the holding of the Court in De Guzman vs. Court of Appeals 14 is
instructive. In referring to Article 1732 of the Civil Code, it held thus:
“The above article makes no distinction between one whose principal business activity is the carrying of persons
or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as a “sideline”).
Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled
basis. Neither does Article 1732 distinguish between a carrier offering its services to the “general public,” i.e., the
general community or population, and one who offers services or solicits business only from a narrow segment of
the general population. We think that Article 1732 deliberately refrained from making such distinctions.”
(2) The loss of goods was not due to force majeure. Common carriers are obliged to observe extraordinary
diligence in the vigilance over the goods transported by them. Accordingly, they are presumed to have been at
fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances
when the presumption of negligence does not attach and these instances are enumerated in Article 1734. In
those cases, where the presumption is applied, the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption.
In this case, petitioner alleged that hijacking constituted force majeure which exculpated her from liability for the
loss of the cargo. In De Guzman vs. Court of Appeals, the Court held that hijacking, not being included in the
provisions of Article 1734, must be dealt with under the provisions of Article 1735 and thus, the common carrier is
presumed to have been at fault or negligent. To exculpate the carrier from liability arising from hijacking, he must
prove that the robbers or the hijackers acted with grave or irresistible threat, violence, or force. This is in
accordance with Article 1745 of the Civil Code which provides:“Art. 1745. Any of the following or similar
stipulations shall be considered unreasonable, unjust and contrary to public policy; That the common carrier’s
liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or
force, is dispensed with or diminished;”
11. NATIONAL STEEL CORPORATION vs. COURT OF APPEALS
Ponente: Panganiban, J
FACTS: On July 17, 1974, National Steel Corporation (NSC) as Charterer and Vlasons Shipping, Inc. (VSI) as
Owner, entered into a Contract of Voyage Charter Hire whereby NSC hired VSIs vessel, the MV VLASONS I to
make 1 voyage to load steel products at Iligan City and discharge them at North Harbor, Manila. On August 6, 7
and 8, 1974, in accordance with the Contract of Voyage Charter Hire, the MV VLASONS I loaded at plaintiffs pier
at Iligan City, the NSCs shipment of 1,677 skids of tinplates and 92 packages of hot rolled sheets or a total of 1,769
packages with a total weight of about 2,481.19 metric tons for carriage to Manila. The shipment was placed in the
three (3) hatches of the ship. Chief Mate Gonzalo Sabando, acting as agent of the vessel[,] acknowledged receipt
of the cargo on board and signed the corresponding bill of lading, B.L.P.P. No. 0233 on August 8, 1974.
The vessel arrived with the cargo at Pier 12, North Harbor, Manila, on August 12, 1974. The following day,
August 13, 1974, when the vessels three (3) hatches containing the shipment were opened by plaintiffs agents,
nearly all the skids of tinplates and hot rolled sheets were allegedly found to be wet and rusty. The cargo was
discharged and unloaded by stevedores hired by the Charterer. Unloading was completed only on August 24, 1974
after incurring a delay of eleven (11) days due to the heavy rain which interrupted the unloading operations.
Testing Laboratories issued Report No. 1770 which in part, states, the analysis of bad order samples of
packing materials shows that wetting was caused by contact with SEA WATER.
Plaintiff filed with the defendant its claim for damages suffered. Defendant denied liability for the alleged
damage claiming that the MV LASONS I was seaworthy in all respects for the carriage of plaintiffs cargo; that said
vessel was not a common carrier inasmuch as she was under voyage charter contract with the plaintiff as charterer
under the charter party;
ISSUE: Is VSI a private carrier? Should Art. 1732 govern VSI’s liability?
HELD: Yes. Article 1732 of the Civil Code defines a common carrier as 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. It has been held that the true test of a common carrier
is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its
transportation service for a fee. A carrier which does not qualify under the above test is deemed a private
carrier. Generally, private carriage is undertaken by special agreement and the carrier does not hold himself out
to carry goods for the general public. The most typical, although not the only form of private carriage, is the
charter party, a maritime contract by which the charterer, a party other than the shipowner, obtains the use and
service of all or some part of a ship for a period of time or a voyage or voyages.
In the instant case, it is undisputed that VSI did not offer its services to the general public. It carried
passengers or goods only for those it chose under a special contract of charter party. MV Vlasons I was not a
common but a private carrier. Consequently, the rights and obligations of VSI and NSC, including their respective
liability for damage to the cargo, are determined primarily by stipulations in their contract of private carriage or
charter party. And their contract provides that the shipowner shall not be liable for loss of or damage to the cargo
arising or resulting from unseaworthiness, unless the same was caused by its lack of due diligence to make the
vessel seaworthy or to ensure that the same was properly manned, equipped and supplied, and to make the holds
and all other parts of the vessel in which cargo [was] carried, fit and safe for its reception, carriage and preservation.
Because the MV Vlasons I was a private carrier, the shipowners obligations are governed by the provisions
of the Code of Commerce: Art. 361. Merchandise shall be transported at the risk and venture of the shipper, if the
contrary has not been expressly stipulated. Therefore, the damage and impairment suffered by the goods during
the transportation, due to fortuitous event, force majeure, or the nature and inherent defect of the things, shall be
for the account and risk of the shipper.The burden of proof of these accidents is on the carrier.
Art. 362. The carrier, however, shall be liable for damages arising from the cause mentioned in the preceding
article if proofs against him show that they occurred on account of his negligence or his omission to take the
precautions usually adopted by careful persons, unless the shipper committed fraud in the bill of lading, making
him to believe that the goods were of a class or quality different from what they really were.
First, both lower courts found that such damage was brought about during the unloading process when rain
and seawater seeped through the cargo due to the fault or negligence of the stevedores employed by it. NSC has
not satisfactorily shown that this case is one of them. Second, the agreement between the parties -- the Contract
of Voyage Charter Hire -- placed the burden of proof for such loss or damage upon the shipper, not upon the
shipowner. Such stipulation, while disadvantageous to NSC, is valid because the parties entered into a contract of
private charter, not one of common carriage. Basic too is the doctrine that courts cannot relieve a party from the
effects of a private contract freely entered into, on the ground that it is allegedly one-sided or unfair to the
plaintiff. The charter party is a normal commercial contract and its stipulations are agreed upon in consideration of
many factors, not the least of which is the transport price which is determined not only by the actual costs but also
by the risks and burdens assumed by the shipper in regard to possible loss or damage to the cargo. In recognition
of such factors, the parties even stipulated that the shipper should insure the cargo to protect itself from the risks
it undertook under the charter party. That NSC failed or neglected to protect itself with such insurance should not
adversely affect VSI, which had nothing to do with such failure or neglect.
12. FIRST PHILIPPINE INDUSTRIAL CORP. VS. CA
Facts: Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January 1995,
petitioner applied for mayor’s permit in Batangas. However, the Treasurer required petitioner to pay a local tax
based on gross receipts amounting to P956,076.04. In order not to hamper its operations, petitioner paid the
taxes for the first quarter of 1993 amounting to P239,019.01 under protest. On January 20, 1994, petitioner filed
a letter-protest to the City Treasurer, claiming that it is exempt from local tax since it is engaged in transportation
business. The respondent City Treasurer denied the protest; thus, petitioner filed a complaint before the Regional
Trial Court of Batangas for tax refund. Respondents assert that pipelines are not included in the term “common
carrier” which refers solely to ordinary carriers or motor vehicles. The trial court dismissed the complaint, and
such was affirmed by the Court of Appeals.
Issue: Whether a pipeline business is included in the term “common carrier” so as to entitle the petitioner to the
exemption of local tax
Held: Yes, a pipeline business is a common carrier and exempted from local tax. Article 1732 of the Civil Code
defines a "common carrier" as "any person, corporation, firm or association 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."
The test for determining whether a party is a common carrier of goods is:
(1) He must be engaged in the business of carrying goods for others as a public employment, and must hold
himself out as ready to engage in the transportation of goods for person generally as a business and not as a
casual occupation;
(2) He must undertake to carry goods of the kind to which his business is confined;
(3) He must undertake to carry by the method by which his business is conducted and over his established
roads; and
(4) The transportation must be for hire.
13. CALVO V. UCPB GENERAL INSURANCE
Ponente: Mendoza, J
FACTS: Petitioner Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI), and a custom
broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical
fluting paper and 124 reels of kraft liner board from the port area to the Tabacalera Compound, Ermita, Manila.
The cargo was insured by respondent UCPB General Insurance Co., Inc.
On July 14, 1990, contained in 30 metal vans, arrived in Manila on board “M/V Hayakawa Maru”. After 24 hours,
they were unloaded from vessel to the custody of the arrastre operator, Manila Port Services, Inc. From July 23
to 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the cargo from the arrastre operator and
delivered it to SMC’s warehouse in Manila. On July 25, the goods were inspected by Marine Cargo Surveyors,
reported that 15 reels of the semi-chemical fluting paper were “wet/stained/torn” and 3 reels of kraft liner board
were also torn. The damages cost P93,112.00.
SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on
the other hand, as a subrogee of SMC, brought a suit against petitioner in RTC, Makati City. On December 20,
1995, the RTC rendered judgment finding petitioner liable for the damage to the shipment. The decision was
affirmed by the CA.
ISSUE: Whether or not Calvo is a common carrier?
HELD: Yes. Article 1732 makes no distinction between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only as ancillary activity. Article 1732 also carefully
avoids making any distinction between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does
Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community
or population, and one who offers services or solicits business only from a narrow segment of the general
population. We think that Article 1733 deliberately refrained from making such distinction. (De Guzman v. CA, 68
SCRA 612)
The concept of “common carrier” under Article 1732 coincide with the notion of “public service”, under
the Public Service Act which partially supplements the law on common carrier. Under Section 13, paragraph (b)
of the Public Service Act, it includes:
“ x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for
hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done
for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification,
freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water
craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock,
ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and
power petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting
stations and other similar public services. x x x”
14. SCHMITZ TRANSPORT & BROKERAGE CORPORATION vs. TRANSPORT VENTURE, INC., INDUSTRIAL
INSURANCE COMPANY, LTD., and BLACK SEA SHIPPING AND DODWELL now INCHCAPE SHIPPING
SERVICES
Ponente: Carpio-Morales
FACTS: On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board
M/V Alexander Saveliev (a vessel of Russian registry and owned by Black Sea) 545 hot rolled steel sheets in coil
weighing 6,992,450 metric tons, insured against all risks with Industrial Insurance Company Ltd. (Industrial
Insurance) under Marine Policy No. M-91-3747-TIS, to the port of Manila in favor Little Giant Steel Pipe Corporation
(Little Giant) which arrived on October 24, 1991 in the south harbor. Schmitz Transport whose services was
engaged by Little Giant to deliver the cargoes to the latter’s warehouse in Cainta, Rizal, engaged the services of
Transport Venture, Inc (TVI) to send a barge and tugboat at shipside.
On October 26, 1991, around 4:30 p.m., TVIs tugboat Lailani towed the barge Erika V to shipside. At
9pm, Ocean Terminal Services Inc. commenced to unload 37 of the 545 coils from the vessel unto the barge. By
12:30am of October 27, 1991, the weather condition had become bad due to an approaching storm, the unloading
unto the barge of the 37 coils was accomplished, but the barge was not pulled back to the pier. At 5:30am due to
strong waves, the barge capsized, washing the 37 coils into the sea. At 7am., a tugboat finally arrived to pull the
already empty and damaged barge back to the pier.
Little Giant filed a claim against Industrial Insurance which paid it the amount of P5,246,113.11. Industrial
Insurance filed a complaint against Schmitz Transport, TVI, and Black Sea through its representative Inchcape
before the RTC of Manila, for the recovery of the amount it paid to Little Giant plus adjustment fees, attorneys fees,
and litigation expenses. Industrial Insurance faulted the defendants for undertaking the unloading of the cargoes
while typhoon signal No. 1 was raised in Metro Manila.
 On November 24, 1997, Branch 21 of the RTC held all the defendants negligent for unloading the cargoes
outside of the breakwater notwithstanding the storm signal, and the payment of of P5,246,113, P5,000.00
adjustment fee plus the sum of 20% of the amount recoverable from the defendants as attorney’s fees plus the
costs of suit. MR of Schmitz was denied. CA affirmed the RTC’s decision, despite the defense of fortuitous event.
ISSUE: Is petitioner liable?
HELD: Yes. While Article 1174 of the Civil Code absolves liability arising from fortuitous event: “no person shall be
responsible for those events which could not be foreseen, or which though foreseen, were inevitable.” In order, to
be considered a fortuitous event, however, (1) the cause of the unforeseen and unexpected occurrence, or the
failure of the debtor to comply with his obligation, must be independent of human will; (2) it must be impossible to
foresee the event which constitute the caso fortuito, or if it can be foreseen it must be impossible to avoid; (3) the
occurrence must be such as to render it impossible for the debtor to fulfill his obligation in any manner; and (4) the
obligor must be free from any participation in the aggravation of the injury resulting to the creditor.
In the instant case, the proximate cause of the loss of the cargoes is the unsecure location of the barge.
Had the barge been towed back promptly to the pier, the deteriorating sea conditions notwithstanding, the loss
could have been avoided. But the barge was left floating in open sea until big waves set in at 5:30 a.m., causing it
to sink along with the cargoes. The loss thus falls outside the act of God doctrine.
No liability to Black sea. TVI, while it acted as a private carrier for which it was under no duty to observe
extraordinary diligence, it was still required to observe ordinary diligence to ensure the proper and careful handling,
care and discharge of the carried goods. Petitioner is a common carrier. For it undertook to transport the cargoes
from the shipside of M/V Alexander Saveliev to the consignees warehouse at Cainta, Rizal. As the appellate court
put it, as long as a person or corporation holds [itself] to the public for the purpose of transporting goods as [a]
business, [it] is already considered a common carrier regardless if [it] owns the vehicle to be used or has to hire
one
15. PEDRO DE GUZMAN vs. COURT OF APPEALS and ERNESTO CENDANA
Ponente: J, Feliciano Counsel: P: Vicente D. Milloria R: Jacinto Callanta
FACTS: On November 1970, Pedro de Guzman, a merchant and authorized dealer of General Milk Company Inc.
in Urdaneta, Pangasinan, contracted with Ernesto Cendana for the hauling of 750 cartons of Liberty filled milk from
a warehouse in Makati, Rizal, to Pedro’s establishment in Urdaneta on or before 4 December 1970. On 1 December
1970, Ernesto loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a truck driven by
himself, 600 cartons were placed on another truck driven by Manuel Estrada, his driver and employee.
Only 150 boxes of Liberty filled milk were delivered to Pedro, because the other truck where the other 600 were
placed was hijacked along the MacArthur Highway in Paniqui, Tarlac. On 6 January 1971, petitioner demanded
payment of P22,150 before the CFI of Pangasinan for the lost merchandise, plus damages and attorney's fees
against respondent, arguing that respondent, being a common carrier who failed to exercise extraordinary diligence
should be held liable for the value of the undelivered goods.
Respondent denied that he was a common carrier and invoked force majeure.
On 10 December 1975, the trial court ordered the payment of the amount, plus P4K as damages, P2K as atty’s
fees. The Court of Appeals reversed the judgment and held that respondent had been engaged in transporting
return loads of freight "as a casual occupation — a sideline to his scrap iron business" and not as a common carrier
and that the hijacking was force majeure.
ISSUE: Was the respondent a Common Carrier?
HELD: Yes, respondent was a common carrier. Under Article 1732 of the Civil Code, 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. It makes no distinction between
one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying
only as an ancillary activity, between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or unscheduled basis, nor does it
distinguish between a carrier offering its services to the "general public," and one who offers services or solicits
business only from a narrow segment of the general population.
ISSUE: Is respondent liable in the instant case?
HELD: No. While hijacking does not fall within any of the 5 categories of exempting causes in Article 1734, Article
1745 (6) provides that, a common carrier is held responsible, and will not be allowed to divest or to diminish such
responsibility, even for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted
"with grave or irresistible threat, violence or force." The limits of the duty of extraordinary diligence in the vigilance
over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave
or irresistible threat, violence or force." In the instant case, the accused acted with grave, if not irresistible, threat,
violence or force. 3 of the 5 hold-uppers were armed with firearms. They not only took the truck and its cargo but
also kidnapped the driver and his helper, detaining them for several days. The occurrence of the loss must
reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous
event. Thus, respondent herein is not liable.
SPOUSES DANTE CRUZ and LEONORA CRUZ, vs SUN HOLIDAYS
Ponente: J, Carpio-Morales
FACTS: Newlywed Ruelito and his wife availed of a tour package-contract from September 9 to 11, 2000 with
respondent that included transportation to and from the Coco Beach Island Resort Resort, Puerto Galera,
Oriental Mindoro and the point of departure in Batangas.
On September 11, 2000, as it was still windy, petitioner’s son and his wife trekked to the other side of
the Coco Beach mountain that was sheltered from the wind where they boarded M/B Coco Beach III, which was
to ferry them to Batangas. Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto
Galera and into the open seas, the rain and wind got stronger, causing the boat to capsize. Ruelito and his wife
perished as a result of the event
 Petitioners, demanded indemnification from respondent for the death of their son in the amount of at
least P4,000,000. Respondent denied any responsibility for the incident which it considered to be a fortuitous
event. It nevertheless offered, as an act of commiseration, the amount of P10,000 to petitioners upon their
signing of a waiver.
petitioners declined, they filed the Complaint, alleging that respondent, as a common carrier, was guilty of
negligence in allowing M/B Coco Beach III to sail notwithstanding storm warning bulletins issued by the
PAGASA. Respondent denied being a common carrier, alleging that its boats are not available to the general
public as they only ferry Resort guests and crew members.
Pasig RTC dismissed petitioners Complaint and respondents Counterclaim.
Petitioners MR was denied so, they appealed to the Court of Appeals.
CA denied petitioners appeal, holding, that respondent is a private carrier which is only required to
observe ordinary diligence; that respondent in fact observed extraordinary diligence in transporting its guests on
board M/B Coco Beach III; and that the proximate cause of the incident was a squall, a fortuitous event.
ISSUE: Is Respondent liable?
HELD: Yes. Respondent is a common carrier. Its ferry services are so intertwined with its main business as to be
properly considered ancillary thereto. The constancy of respondents ferry services in its resort operations is
underscored by its having its own Coco Beach boats. And the tour packages it offers, which include the ferry
services, may be availed of by anyone who can afford to pay the same. These services are thus available to the
public.
In the De Guzman case, Article 1732 of the Civil Code defining common carriers has deliberately refrained from
making distinctions on whether the carrying of persons or goods is the carriers principal business, whether it is
offered on a regular basis, or whether it is offered to the general public. The intent of the law is thus to not
consider such distinctions. Otherwise, there is no telling how many other distinctions may be concocted by
unscrupulous businessmen engaged in the carrying of persons or goods in order to avoid the legal obligations
and liabilities of common carriers.
Under the Civil Code, common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence for the safety of the passengers transported by them,
according to all the circumstances of each case. They are bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances. When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that
the common carrier is at fault or negligent The evidence shows that PAGASA issued 24-hour public weather
forecasts and tropical cyclone warnings for shipping on September 10 and 11, 2000 advising of tropical
depressions in Northern Luzon which would also affect the province of Mindoro. A very cautious person
exercising the utmost diligence would thus not brave such stormy weather and put other peoples lives at
risk. The extraordinary diligence required of common carriers demands that they take care of the goods or lives
entrusted to their hands as if they were their own. This respondent failed to do.
Respondents insistence that the incident was caused by a fortuitous event does not impress either.
The elements of a "fortuitous event" are: (a) the cause of the unforeseen and unexpected occurrence, or the
failure of the debtors to comply with their obligations, must have been independent of human will; (b) the event
that constituted the caso fortuito must have been impossible to foresee or, if foreseeable, impossible to avoid; (c)
the occurrence must have been such as to render it impossible for the debtors to fulfill their obligation in a normal
manner; and (d) the obligor must have been free from any participation in the aggravation of the resulting injury
to the creditor.
To fully free a common carrier from any liability, the fortuitous event must have been the proximate
and only cause of the loss. And it should have exercised due diligence to prevent or minimize the loss before,
during and after the occurrence of the fortuitous event. This is not the case herein.
17. NOSTRADAMUS VILLANUEVA vs. PRISCILLA R. DOMINGO and LEANDRO LUIS R. DOMINGO
G.R. No. 144274. September 20, 2004
Ponente: CJ Corona
FACTS: Priscilla R. Domingo is the registered owner of a silver Mitsubishi Lancer Car model 1980 bearing plate
No. NDW 781 91 with Leandro Luis R. Domingo as authorized driver. Nostradamus Villanueva was then the
registered owner of a green Mitsubishi Lancer bearing Plate No. PHK 201 91.
On 22 October 1991 at about 9:45 in the evening, following a green traffic light, Priscilla Domingo’s silver
Lancer car with Plate No. NDW 781 91 then driven by Leandro Luis R. Domingo was cruising along the middle
lane of South Superhighway at moderate speed from north to south. Suddenly, a green Mitsubishi Lancer with
plate No. PHK 201 91 driven by Renato Dela Cruz Ocfemia darted from Vito Cruz Street towards the South
Superhighway directly into the path of NDW 781 91 thereby hitting and bumping its left front portion. As a result of
the impact, NDW 781 91 hit two (2) parked vehicles at the roadside, the second hitting another parked car in front
of it.
Per Traffic Accident Report prepared by Traffic Investigator Pfc. Patrocinio N. Acido, Renato dela Cruz
Ocfemia was driving with expired license and positive for alcoholic breath. Hence, Manila Assistant City Prosecutor
Oscar A. Pascua recommended the filing of information for reckless imprudence resulting to damage to property
and physical injuries.
The original complaint was amended twice: first, impleading Auto Palace Car Exchange as commercial
agent and/or buyer-seller and second, impleading Albert Jaucian as principal defendant doing business under the
name and style of Auto Palace Car Exchange.
Except for Ocfemia, all the defendants filed separate answers to the complaint. [Petitioner] Nostradamus
Villanueva claimed that he was no longer the owner of the car at the time of the mishap because it was swapped
with a Pajero owned by Albert Jaucian/Auto Palace Car Exchange.On the other hand, Auto Palace Car Exchange
represented by Albert Jaucian claimed that he was not the registered owner of the car. Moreover, it could not be
held subsidiary liable as employer of Ocfemia because the latter was off-duty as utility employee at the time of the
incident. Neither was Ocfemia performing a duty related to his employment.
After trial, the trial court found petitioner liable and ordered him to pay respondent actual, moral and
exemplary damages plus appearance and attorneys fees. Albert Jaucian is hereby ordered to indemnify
Nostradamus Villanueva for whatever amount the latter is hereby ordered to pay under the judgment.
The CA upheld the trial courts decision but deleted the award for appearance and attorneys fees because
the justification for the grant was not stated in the body of the decision. Thus, this petition for review which raises
a singular issue.
ISSUE: MAY THE REGISTERED OWNER OF A MOTOR VEHICLE BE HELD LIABLE FOR DAMAGES ARISING
FROM A VEHICULAR ACCIDENT INVOLVING HIS MOTOR VEHICLE WHILE BEING OPERATED BY THE
EMPLOYEE OF ITS BUYER WITHOUT THE LATTERS CONSENT AND KNOWLEDGE?
DECISION: YES. The principle upon which this doctrine is based is that in dealing with vehicles registered under
the Public Service Law, the public has the right to assume or presume that the registered owner is the actual owner
thereof, for it would be difficult for the public to enforce the actions that they may have for injuries caused to them
by the vehicles being negligently operated if the public should be required to prove who the actual owner is.
In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily responsible
for the damage caused to the vehicle of the plaintiff-appellee, but he (defendant-appellant) has a right to be
indemnified by the real or actual owner of the amount that he may be required to pay as damage for the injury
caused to the plaintiff-appellant.
it is immaterial whether or not the driver was actually employed by the operator of record. It is even not
necessary to prove who the actual owner of the vehicle and the employer of the driver is. Granting that, in this
case, the father of the driver is the actual owner and that he is the actual employer, following the well-settled
principle that the operator of record continues to be the operator of the vehicle in contemplation of law, as regards
the public and third person, and as such is responsible for the consequences incident to its operation, we must
hold and consider such owner-operator of record as the employer, in contemplation of law, of the driver. And, to
give effect to this policy of law as enunciated in the above cited decisions of this Court, we must now extend the
same and consider the actual operator and employer as the agent of the operator of record.
The main purpose of vehicle registration is the easy identification of the owner who can be held
responsible for any accident, damage or injury caused by the vehicle. Easy identification prevents inconvenience
and prejudice to a third party injured by one who is unknown or unidentified. To allow a registered owner to escape
liability by claiming that the driver was not authorized by the new (actual) owner results in the public detriment the
law seeks to avoid.
Finally, the issue of whether or not the driver of the vehicle during the accident was authorized is not at
all relevant to determining the liability of the registered owner. This must be so if we are to comply with the rationale
and principle behind the registration requirement under the motor vehicle law.
18. DUAVIT v COURT OF APPEALS GR No. 82318; May 18, 1989
Ponente: J Gutierrez Counsel: Rodolfo d. Dela Cruz for petitioner. Bito, Lozada, Ortega & Castillo for
respondents.
FACTS: The jeep being driven by defendant Sabiniano collided with another jeep, which had then 2 passengers
on it. As a result of the collision the passengers of the other jeep suffered injury and the automobile itself had to be
repaired because of the extensive damage.
A case was filed against Sabiniano as driver and against Duavit as owner of the jeep. Duavit admitted
ownership of the jeep but denied that Sabiniano was his employee. Sabiniano himself admitted that he took Duavit’s
jeep from the garage without consent or authority of the owner. He testified further that Duavit even filed charges
against him for theft of the jeep, but which Duavit did not push through as the parents of Sabiniano apologized to
Duavit on his behalf.
Trial Court found Sabiniano negligent in driving the vehicle but absolved Duavit on the ground that there
was no employer-employee relationship between them, and that former took the vehicle without
consent or authority of the latter.
CA held the two of them jointly and severally liable.
ISSUE: Won the owner of a private vehicle which figured in an accident can be held liable under Article2180 of the
CC when the said vehicle was neither driven by an employee of the owner nor taken with the consent of the latter.
HELD: NO. In Duquillo v Bayot (1939), SC ruled that an owner of a vehicle cannot be held liable for an accident
involving a vehicle if the same was driven without his consent or knowledge and by a person not employed by him.
This ruling is still relevant and applicable, and hence, must be upheld. CA’s reliance on the cases of Erezo v Jepte
and Vargas v Langcay is misplaced and cannot be sustained. In Erezo v Jepte case, defendant Jepte was held
liable for the death of Erezo even if he was not really the owner of the truck that killed the latter because
he represented himself as its owner to the Motor Vehicles Office and had it registered under his name; he was thus
estopped from later on denying such representation. In Vargas, Vargas sold her jeepney to a 3rd person, but she
did not surrender to the Motor Vehicles Office the corresponding AC plates. So when the jeepney later on figured
in an accident, she was held liable by the court. Holding that the operator of record continues to be the operator of
vehicle in contemplation of law, as regards the public and 3rd persons.
The circumstances of the above cases are entirely different from those in the present case. Herein
petitioner does not deny ownership of vehicle but denies having employed or authorized the driver Sabiniano. The
jeep was virtually stolen from the petitioner’s garage.
Decision and resolution annulled and set aside.
19. EQUITABLE LEASING CORPORATION vs. LUCITA SUYOM
Ponente: J, Panganiban
FACTS: On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Myrna
Tamayo located at Pier 18, Vitas, Tondo, Manila. A portion of the house was destroyed. Pinned to death under
the engine of the tractor were Respondent Myrna Tamayos son, Reniel Tamayo, and Respondent Felix Oledans
daughter, Felmarie Oledan. Injured were Respondent Oledan himself, Respondent Marissa Enano, and two sons
of Respondent Lucita Suyom. Tutor was charged with and later convicted of reckless imprudence resulting in
multiple homicide and multiple physical injuries in Criminal Case No. 296094-SA, Metropolitan Trial Court of
Manila, Branch 12. Upon verification with the Land Transportation Office, respondents were furnished a copy of
Official Receipt No. 62204139 and Certificate of Registration No. 08262797, showing that the registered owner of
the tractor was Equitable Leasing Corporation/leased to Edwin Lim. On April 15, 1995, respondents filed against
Raul Tutor, Ecatine Corporation (Ecatine) and Equitable Leasing Corporation (Equitable) a Complaint or
damages docketed as Civil Case No. 95-73522 in the RTC of Manila, Branch 14.
Petitioner, Equitable Leasing Corporation, filed a petition for review on the judgment rendered by the
CA to pay the actual, moral damages and attorney’s fees to the respondents, Lucita Suyom, et. Al. Petitioner
contends that the vehicle had already been sold to Ecatine and that the former was no longer in possession and
control thereof at the time of the incident. It also claimed that Tutor was an employee, not of Equitable, but of
Ecatine.
Issue: Is Equitable Leasing Corporation, the registered owner of the vehicle, being held liable to pay for the
damages for the negligent acts committed by the person to whom he had actually sold the vehicle?
Held: YES, Equitable Leasing Corporation is liable to pay the damages to the respondents. Although, a Deed
Sale of executed by the petitioner to Ecatine Corporation, but the said Deed of Sale was not registered with the
LTO. Under the registered owner rule, regardless of sales made of a motor vehicle, the registered owner is the
lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily
responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the
employer of the driver, the actual operator and employer being considered as merely its agent. The same
principle applies even if the registered owner of any vehicle does not use it for public service.
Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the deaths
and the injuries arising from the negligence of the driver.
20. CARAVAN TRAVEL AND TOURS INTERNATIONAL VS ERMILINDA ABEJAR
Ponente: J Leonen
FACTS: Jesmariane R. Reyes (Reyes) was walking along the west-bound lane ofSampaguita Street, United
Parañaque Subdivision IV, Parañaque City on July 13, 2000. A Mitsubishi L-300 van with plate number PKM
195 was travelling along the east-bound lane, opposite Reyes. To avoid an incoming vehicle, the van swerved to
its left and hit Reyes. Alex Espinosa (Espinosa), a witness to the accident, went to her aid and loaded her in the
back of the van. Espinosa told the driver of the van, Jimmy Bautista (Bautista), to bring Reyes to the
hospital. Instead of doing so, Bautista appeared to have left the van parked inside a nearby subdivision with
Reyes still in the van. Fortunately for Reyes, an unidentified civilian came to help and drove Reyes to the
hospital.
Upon investigation, it was found that the registered owner of the van was Caravan, a corporation
engaged in the business of organizing travels and tours, and Bautista was the employee assigned to drive the
van as its service driver.
Caravan shouldered the hospitalization expenses of Reyes. Despite medical attendance, Reyes died
two (2) days after the accident.
Respondent Ermilinda R. Abejar (Abejar), Reyes' paternal aunt and the person who raised her since
she was nine (9) years old, filed before the Regional Trial Court of Parañaque a Complaint for damages against
Bautista and Caravan. In her Complaint, Abejar alleged that Bautista was an employee of Caravan and that
Caravan is the registered owner of the van that hit Reyes.
Summons could not be served on Bautista. Thus, Abejar moved to drop Bautista as a defendant. The
Regional Trial Court granted her Motion.
After trial, the Regional Trial Court found that Bautista was grossly negligent in driving the vehicle and
awarded damages in favor of Abejar.
Caravan filed a Motion for Reconsideration, but it was denied in the Court of Appeals' assailed
November 29, 2005 Resolution.35
Hence, the Petition was filed.
ISSUE: Should petitioner be held liable?
HELD: Yes. He is liable under Art. 2180 of the Civil Code for failure to exercise due diligence in selection and
supervision of his employees. Employing a person holding a non-professional driver's license to operate
another's motor vehicle violates Section 24 of the Land Transportation and Traffic Code, which provides: SEC.
24. Use of driver's license and badge. No owner of a motor vehicle shall engage, employ, or hire any person to
operate such motor vehicle, unless the person sought to be employed is a duly licensed professional driver.
Petitioner did not only fail to exercise due diligence when it selected Bautista as service driver; it also committed
an actual violation of law.
III. OBLIGATIONS OF A COMMON CARRIER IN THE CARRIAGE OF GOODS
A. Vigilance over goods
1. EXERCISE OF EXTRAORDINARY DILIGENCE
Art. 1733. Common carriers, from the nature of their business and for reasons for
public policy, are bound to observe extraordinary diligence in the vigilance over the
 goods and for the safety of passengers transported by them, according to all
circumstances of each case.
2. PRESUMPTION OF NEGLIGENCE
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration
of the goods, unless the same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
(5) Order or act of competent public authority.
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the
preceding article, if the goods are lost, destroyed or deteriorated, common carriers
are presumed to have been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence as required in Article 1733.
3. DURATION OF LIABILITY
a. Delivery of goods to common carrier
b. Actual of Constructive Delivery
c. Temporary unloading or storage
Art. 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.
Art. 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.
Art. 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.
4. EXEMPTING CIRCUMSTANCES
A. Requirement of Absence of Negligence
B. Absence of Delay
C. Due diligence to prevent or lessen loss
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration
of the goods, unless the same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
(5) Order or act of competent public authority.
Art. 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.
 Art. 1740. If the common carrier negligently incurs in delay in transporting the goods,
a natural disaster shall not free such carrier from responsibility.
Art. 1742. Even if the loss, destruction, or deterioration of the goods should be
caused by the character of the goods, or the faulty nature of the packing or of the
containers, the common carrier must exercise due diligence to forestall or lessen the
loss.
Art. 1743. If through the order of public authority, the goods are seized or destroyed,
the common carrier is not responsible, provided said public authority had power to
issue the order.
5. CONTRIBUTORY NEGLIGENCE
Art. 1741. If the shipper or owner merely contributed to the loss, destruction or
deterioration of the goods, the proximate cause thereof being the negligence of the
common carrier, the latter shall be liable in damages, which however, shall be
equitably reduced.
Art. 2179. When the plaintiff's own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence was only
contributory, the immediate and proximate cause of the injury being the defendant's
lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded
6. STIPULATIONS LIMITING LIABILITY OF COMMON CARRIERS
A. VOID STIPULATIONS
Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or
deterioration of the goods;
(3) That the common carrier need not observe any diligence in the custody of the
goods;
(4) That the common carrier shall exercise a degree of diligence less than that of a
good father of a family, or of a man of ordinary prudence in the vigilance over the
movables transported;
(5) That the common carrier shall not be responsible for the acts or omission of his
or its employees;
(6) That the common carrier's liability for acts committed by thieves, or of robbers
who do not act with grave or irresistible threat, violence or force, is dispensed with or
diminished;
(7) That the common carrier is not responsible for the loss, destruction, or
deterioration of goods on account of the defective condition of the car, vehicle, ship,
airplane or other equipment used in the contract of carriage.
B. LIMITATION OF LIABILITY IN THE ABSENCE OF GREATER VALUE
Art. 1749. A stipulation that the common carrier's liability is limited to the value of the
goods appearing in the bill of lading, unless the shipper or owner declares a greater
value, is binding.
C. LIMITATION OF LIABILITY
Art. 1744. A stipulation between the common carrier and the shipper or owner
limiting the liability of the former for the loss, destruction, or deterioration of the
goods to a degree less than extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the
common carrier; and
(3) Reasonable, just and not contrary to public policy.
Art. 1748. An agreement limiting the common carrier's liability for delay on account
of strikes or riots is valid.
 Art. 1750. A contract fixing the sum that may be recovered. by the owner or shipper
for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and
just under the circumstances, and has been fairly and freely agreed upon.
D. EFFECT OF DELAY
Art. 1747. If the common carrier, without just cause, delays the transportation of the
goods or changes the stipulated or usual route, the contract limiting the common
carrier's liability cannot be availed of in case of the loss, destruction, or deterioration
of the goods.
E. RULE ON PRESUMPTION OF NEGLIGENCE DESPITE STIPULATION
Art. 1752. Even when there is an agreement limiting the liability of the common
carrier in the vigilance over the goods, the common carrier is disputably presumed to
have been negligent in case of their loss, destruction or deterioration.
7. LIABILITY FOR BAGGAGE OF PASSENGERS
a. Checked-in baggage
b. Baggage in possession of passengers
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the
passenger's baggage which is not in his personal custody or in that of his employee.
As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the
responsibility of hotel-keepers shall be applicable.
Art. 1998. The deposit of effects made by the travellers in hotels or inns
shall also be regarded as necessary. The keepers of hotels or inns shall be
responsible for them as depositaries, provided that notice was given to them, or to
their employees, of the effects brought by the guests and that, on the part of the
latter, they take the precautions which said hotel-keepers or their substitutes advised
relative to the care and vigilance of their effects.
Art. 2000. The responsibility referred to in the two preceding articles shall
include the loss of, or injury to the personal property of the guests caused by the
servants or employees of the keepers of hotels or inns as well as strangers; but not
that which may proceed from any force majeure. The fact that travellers are
constrained to rely on the vigilance of the keeper of the hotels or inns shall be
considered in determining the degree of care required of him. (1784a)
Art. 2001. The act of a thief or robber, who has entered the hotel is not
deemed force majeure, unless it is done with the use of arms or through an
irresistible force. (n)
Art. 2002. The hotel-keeper is not liable for compensation if the loss is due
to the acts of the guest, his family, servants or visitors, or if the loss arises from the
character of the things brought into the hotel. (n)
Art. 2003. The hotel-keeper cannot free himself from responsibility by
posting notices to the effect that he is not liable for the articles brought by the guest.
Any stipulation between the hotel-keeper and the guest whereby the responsibility of
the former as set forth in articles 1998 to 2001 is suppressed or diminished shall be
void.
B. OTHER OBLIGATIONS
1. Duty to accept goods
a. Grounds for valid refusal to accept goods
2. Duty to deliver goods
a. Time of delivery (Art. 358, Code of Commerce)
ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall be bound to
forward them in the first shipment of the same or similar goods which he may make point where he must
deliver them; and should he not do so, the damages caused by the delay should be for his account.
b. Consequences of delay (Art. 1740 and 1747, NCCC; Arts. 370-374, Code of Commerce)
Article 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural
disaster shall not free such carrier from responsibility.
Article 1747. If the common carrier, without just cause, delays the transportation of the goods or
changes the stipulated or usual route, the contract limiting the common carrier’s liability cannot be availed
of in case of the loss, destruction, or deterioration of the goods
ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within such
time, and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither
the shipper nor the consignee being entitled to anything else.
If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier
shall be liable for the damages which the delay may have caused.
ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding articles, the
consignee may leave the goods transported in the hands of the former, advising him thereof in writing
before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the goods as if they had been
lost or mislaid.
If the abandonment is not made, the indemnification for losses and damages by reason of the delay
cannot exceed the current price which the goods transported would have had on the day and at the place
in which they should have been delivered; this same rule is to be observed in all other cases in which
this indemnity may be due.
ARTICLE 372. The value of the goods which the carrier must pay in cases if loss or misplacement
shall be determined in accordance with that declared in the bill of lading, the shipper not being allowed
to present proof that among the goods declared therein there were articles of greater value and money.
Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation shall
be especially bound in favor of the shipper, although with respect to railroads said liability shall be
subordinated to the provisions of the laws of concession with respect to the property, and to what this
Code established as to the manner and form of effecting seizures and attachments against said
companies.
ARTICLE 373. The carrier who makes the delivery of the merchandise to the consignee by virtue of
combined agreements or services with other carriers shall assume the obligations of those who preceded
him in the conveyance, reserving his right to proceed against the latter if he was not the party directly
responsible for the fault which gave rise to the claim of the shipper or consignee.
The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded
him in the conveyance. The shipper and the consignee shall have an immediate right of action against
the carrier who executed the transportation contract, or against the other carriers who may have received
the goods transported without reservation.
However, the reservation made by the latter shall not relieve them from the responsibilities which they
may have incurred by their own acts.
ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of the
expenses and transportation charges of the goods they receive after the lapse of twenty-four hours
following their delivery; and in case of delay in this payment, the carrier may demand the judicial sale of
the goods transported in an amount necessary to cover the cost of transportation and the expenses
incurred.
c. Place of delivery (Art. 360, Code of Commerce)
ARTICLE 360. The shipper, without changing the place where the delivery is to be made, may change
the consignment of the goods which he delivered to the carrier, provided that at the time of ordering the
change of consignee the bill of lading signed by the carrier, if one has been issued, be returned to him,
in exchange for another wherein the novation of the contract appears.
The expenses which this change of consignment occasions shall be for the account of the shipper.
d. To whom delivery shall be made (Art. 368-369, Code of Commerce)
ARTICLE 368. The carrier must deliver to the consignee, without any delay or obstruction, the goods
which he may have received, by the mere fact of being named in the bill of lading to receive them; and
if he does not do so, he shall be liable for the damages which may be caused thereby.
ARTICLE 369. If the consignee cannot be found at the residence indicated in the bill of lading, or if he
refuses to pay the transportation charges and expenses, or if he refuses to receive the goods, the
municipal judge, where there is none of the first instance, shall provide for their deposit at the disposal
of the shipper, this deposit producing all the effects of delivery without prejudice to third parties with a
better right.
CASES
21. LOADMASTERS CUSTOMS SERVICES INC. VS. GLODEL BROKERAGE
Ponente: J, Mendoza Counsel: NOTES:
FACTS: On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor of
Columbia to insure the shipment of 132 bundles of electric copper cathodes. On August 28, 2001, the
cargoes were shipped on board the vessel Richard Rey from Isabela, Leyte, to Pier 10, North Harbor,
Manila. Columbia then engaged the services of Glodel for the release and withdrawal of the cargoes
from the pier and the subsequent delivery to its warehouses/plants. Glodel, in turn, engaged the services
of Loadmasters for the use of its delivery trucks to transport the cargoes. The goods were loaded on
board twelve (12) trucks owned by Loadmasters, driven by its employed drivers and accompanied by its
employed truck helpers. Of the six (6) trucks en route to Balagtas, Bulacan, however, only five (5)
reached the destination. One (1) truck, loaded with 11 bundles or 232 pieces of copper cathodes, failed
to deliver its cargo. As a result, Columbia filed with R&B Insurance a claim for insurance indemnity in the
amount of P1,903,335.39. After the requisite investigation and adjustment, R&B Insurance paid
Columbia the amount of P1,896,789.62 as insurance indemnity. R&B Insurance, thereafter, filed a
complaint for damages against both Loadmasters and Glodel. It sought reimbursement of the amount it
had paid to Columbia for the loss of the subject cargo. It claimed that it had been subrogated to the right
of the consignee to recover from the party/parties who may be held legally liable for the loss.[2]
ISSUE:
1. Whether or not R&B insurance may seek reimbursement from Glodel and Loadmasters.
2. Who, between Glodel and Loadmasters, is liable to pay R&B Insurance for the amount of the indemnity
it paid Columbia.
HELD:
1. Yes. R&B insurance may seek reimbursement from Glodel and Loadmaster. As subrogee of the rights
and interest of the consignee, R&B Insurance has the right to seek reimbursement from either
Loadmasters or Glodel or both for breach of contract and/or tort.
2. Both. Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or
associations engaged in the business of carrying or transporting passenger or goods, or both by land,
water or air for compensation, offering their services to the public. Based on the aforecited definition,
Loadmasters and Glodel are considered common carrier. Being both common carriers, are mandated
from the nature of their business and for reasons of public policy, to observe the extraordinary diligence
in the vigilance over the goods transported by them according to all the circumstances of such case, as
required by Article 1733 of the Civil Code. It is not disputed that the subject cargo was lost while in the
custody of Loadmasters whose employees (truck driver and helper) were instrumental in the hijacking
or robbery of the shipment. As employer, Loadmasters should be made answerable for the damages
caused by its employees who acted within the scope of their assigned task of delivering the goods safely
to the warehouse. Glodel is also liable because of its failure to exercise extraordinary diligence. It failed
to ensure that Loadmasters would fully comply with the undertaking to safely transport the subject cargo
to the designated destination. It should have been more prudent in entrusting the goods to Loadmasters
by taking precautionary measures, such as providing escorts to accompany the trucks in delivering the
cargoes. Glodel should, therefore, be held liable with Loadmasters.
22. TRANSIMEX CO. v. MAFRE ASIAN INSURANCE CORP
Ponente: Sereno, CJ
FACTS: On 21 May 1996, M/V Meryem Ana received a shipment consisting of 21,857 metric tons of
Prilled Urea Fertilizer from Helm Duengemittel GMBH at Odessa, Ukraine. The shipment was covered
by two separate bills of lading and consigned to Fertiphil for delivery to two ports - one in Poro Point,
San Fernando, La Union; and the other in Tabaco, Albay. Fertiphil insured the cargo against all risks
under Marine Risk Note Nos. MN-MAR-HO-0001341 and MN-MAR-HO-0001347 issued by respondent.
M/V Meryem Ana arrived at Poro Point, La Union, and Tabaco, Albay. As soon as the vessel
docked at the Tabaco port, the fertilizer was bagged and stored inside a warehouse. When the cargo
was subsequently weighed, it was discovered that only 7,350.35 metric tons of fertilizer had been
delivered.
The present controversy involves on the second delivery because of the alleged shortage of 349.65
metric tons. Fertiphil filed a claim with respondent for P1,617,527.37.
Respondent MAFRE Asian Insurance demanded reimbursement from petitioner on the basis of the
right of subrogation. The claim was denied, prompting respondent to file a Complaint with the RTC and
ordered petitioner to pay the claim of P1,617,527.37 was affirmed by the CA and denied petitioner’s
appeal.
Hence, this Petition for Review on Certiorari.
ISSUES:
1. Whether the transaction is governed by the provisions of the Civil Code on common carriers or by the
provisions of COGSA; and
2. Whether petitioner is liable for the loss or damage sustained by the cargo because of bad weather.
HELD:
1. The Civil Code on common carriers. As expressly provided in Article 1753 of the Civil Code, "[t]he law
of the country to which the goods are to be transported shall govern the liability of the common carrier
for their loss, destruction or deterioration." Since the cargo in this case was transported from Odessa,
Ukraine, to Tabaco, Albay, the liability of petitioner for the alleged shortage must be determined in
accordance with the provisions of the Civil Code on common carriers. The Code takes precedence as
the primary law over the rights and obligations of common carriers with the Code of Commerce
and COGSA applying suppletory.
2. Yes. While the records of this case clearly establish that M/V Sea Merchant was damaged as result
of extreme weather conditions, petitioner cannot be absolved from liability. As pointed out by this Court
in Lea Mer Industries, Inc. v. Malayan Insurance, Inc., a common carrier is not liable for loss only when
(1) the fortuitous event was the only and proximate cause of the loss and (2) it exercised due diligence
to prevent or minimize the loss. The second element is absent here. As a common carrier, petitioner
should have been more vigilant in monitoring weather disturbances within the country and their
(possible) effect on its routes and destination. More specifically, it should have been more alert on the
possible attenuating and dysfunctional effects of bad weather on the parts of the ship. It should have
foreseen the likely prejudicial effects of the strong waves and winds on the ship brought about by
inclement weather and should have taken the necessary precautionary measures through extraordinary
diligence to prevent the weakening or dysfunction of the parts of the ship to avoid or prune down the
loss to cargo.
23. UNSWORTH TRANSPORT INTERNATIONAL (PHILS.), INC., - versus - COURT OF APPEALS
and PIONEER INSURANCE AND SURETY CORPORATION
Ponente: J, Nachura
FACTS:
On August 31, 1992, the shipper Sylvex Purchasing Corporation delivered to UTI a shipment
of 27 drums of various raw materials for pharmaceutical manufacturing, consisting of: 1) 3 drums (of)
extracts, flavoring liquid, flammable liquid x x x banana flavoring; 2) 2 drums (of) flammable liquids x x x
turpentine oil; 2 pallets. STC: 40 bags dried yeast; and 3) 20 drums (of) Vitabs: Vitamin B Complex
Extract. UTI issued Bill of Lading No. C320/C15991-2, covering the aforesaid shipment. The subject
shipment was insured with private respondent Pioneer Insurance and Surety Corporation in favor of
Unilab against all risks in the amount of P1,779,664.77 under and by virtue of Marine Risk Note Number
MC RM UL 0627 92 and Open Cargo Policy No. HO-022-RIU.
On the same day that the bill of lading was issued, the shipment was loaded in a sealed 1x40
container van, with no. APLU-982012, boarded on APLs vessel M/V Pres. Jackson, Voyage 42, and
transshipped to APLs M/V Pres. Taft for delivery to petitioner in favor of the consignee United
Laboratories, Inc. (Unilab).
On September 30, 1992, the shipment arrived at the port of Manila. On October 6, 1992,
petitioner received the said shipment in its warehouse. On October 9, 1992, Oceanica Cargo Marine
Surveyors Corporation (OCMSC) conducted a stripping survey of the shipment located in petitioners
warehouse. The survey results stated: 2-pallets STC 40 bags Dried Yeast, both in good order condition
and properly sealed; 19- steel drums STC Vitamin B Complex Extract, all in good order condition and
properly sealed; 1-steel drum STC Vitamin B Complex Extra[ct] with cut/hole on side, with
approx. spilling of 1%
On October 15, 1992, the arrastre Jardine Davies Transport Services, Inc. (Jardine) issued
Gate Pass No. 7614 which stated that 22 drums Raw Materials for Pharmaceutical Mfg. were loaded on
a truck with Plate No. PCK-434 facilitated by Champs for delivery to Unilabs warehouse. The materials
were noted to be complete and in good order in the gate pass. On the same day, the shipment arrived
in Unilabs warehouse and was immediately surveyed by an independent surveyor, J.G. Bernas Adjusters
& Surveyors, Inc. (J.G. Bernas). The Report stated: 1-p/bag torn on side contents partly spilled; 1-s/drum
#7 punctured and retaped on bottom side content lacking; 5-drums shortship/short delivery.
On October 23 and 28, 1992, the same independent surveyor conducted final inspection
surveys which yielded the same results. Consequently, Unilabs quality control representative rejected
one paper bag containing dried yeast and one steel drum containing Vitamin B Complex as unfit for the
intended purpose.
On November 7, 1992, Unilab filed a formal claim for the damage against private respondent
and UTI. On November 20, 1992, UTI denied liability on the basis of the gate pass issued by Jardine
that the goods were in complete and good condition; while private respondent filed a complaint for
Damages against APL, UTI and petitioner with the RTC of Makati.
On February 22, 2001, the RTC decided in favor of private respondent and against APL.
On appeal, the CA affirmed the RTC decision on April 29, 2004. The CA rejected UTIs defense
that it was merely a forwarder, declaring instead that it was a common carrier. The court further
concluded that upon the delivery of the subject shipment to petitioners warehouse, its liability became
similar to that of a depositary. As such, it ought to have exercised ordinary diligence in the care of the
goods. The CA also rejected petitioners claim that its liability should be limited to $500 per package
pursuant to the Carriage of Goods by Sea Act (COGSA) considering that the value of the shipment was
declared pursuant to the letter of credit and the pro forma invoice. As to APL, the court considered it as
a common carrier notwithstanding the non-issuance of a bill of lading inasmuch as a bill of lading is not
indispensable for the execution of a contract of carriage.
ISSUE:
1. Is UTI liable as a COMMON CARRIER.
2. What is a freight forwarder?
HELD:
1. Yes. A freight forwarders liability is limited to damages arising from its own negligence, including
negligence in choosing the carrier; however, where the forwarder contracts to deliver goods to their
destination instead of merely arranging for their transportation, it becomes liable as a common carrier
for loss or damage to goods. A freight forwarder assumes the responsibility of a carrier, which actually
executes the transport, even though the forwarder does not carry the merchandise itself. UTI is liable as
a common carrier. Common carriers, as a general rule, are presumed to have been at fault or negligent
if the goods they transported deteriorated or got lost or destroyed. That is, unless they prove that they
exercised extraordinary diligence in transporting the goods. In order to avoid responsibility for any loss
or damage, therefore, they have the burden of proving that they observed such diligence. Mere proof
of delivery of the goods in good order to a common carrier and of their arrival in bad order at
their destination constitutes a prima facie case of fault or negligence against the carrier. If no
adequate explanation is given as to how the deterioration, loss, or destruction of the goods happened,
the transporter shall be held responsible.
2. The term freight forwarder" refers to a firm holding itself out to the general public (other than as a
pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and, in the
ordinary course of its business, (1) to assemble and consolidate, or to provide for assembling and
consolidating, shipments, and to perform or provide for break-bulk and distribution operations of the
shipments; (2) to assume responsibility for the transportation of goods from the place of receipt to the
place of destination; and (3) to use for any part of the transportation a carrier subject to the federal law
pertaining to common carriers.
24. BELGIAN OVERSEAS CHARTERING AND SHIPPING vs. PHILIPPINE FIRST INSURANCE CO.,
INC.,
Ponente: J, Panganiban
FACTS: CMC Trading A.G. shipped on board the M/V Anangel Sky at Hamburg, Germany 242 coils of
various Prime Cold Rolled Steel sheets for transportation to Manila consigned to the Philippine Steel
Trading Corporation. On July 28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the
subsequent days, discharged the subject cargo. Four (4) coils were found to be in bad order. Finding
the four (4) coils in their damaged state to be unfit for the intended purpose, the consignee Philippine
Steel Trading Corporation declared the same as total loss. Philippine First Insurance paid the claim of
Philippine Steel and was thus subrogated. Philippine First then instituted a complaint for recovery of the
amount paid to the consignee as insured. Belgian claims that the damage and/or loss was due to pre-
shipment damage, to the inherent nature, vice or defect of the goods, or to perils, danger and accidents
of the sea, or to insufficiency of packing thereof, or to the act or omission of the shipper of the goods or
their representatives. Belgian further argued that their liability, if there be any, should not exceed the
limitations of liability provided for in the bill of lading and other pertinent laws. Finally, Belgian averred
that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss
to said shipment. The RTC dismissed the complaint. The CA reversed and ruled that Belgian were liable
for the loss or the damage of the goods shipped, because they had failed to overcome the presumption
of negligence imposed on common carriers. As to the extent of Belgian’s liability, the CA held that the
package limitation under COGSA was not applicable, because the words "L/C No. 90/02447" indicated
that a higher valuation of the cargo had been declared by the shipper.
ISSUES:
1. Whether petitioners have overcome the presumption of negligence of a common carrier
2. Whether the notice of loss was timely filed
3. Whether the package limitation of liability is applicable
HELD:
1. No. Petitioners failed to rebut the prima facie presumption of negligence is revealed in the case
at bar by a review of the records and more so by the evidence adduced by respondent: First,
as stated in the Bill of Lading, petitioners received the subject shipment in good order and
condition in Hamburg, Germany. Second, prior to the unloading of the cargo, an Inspection
Report showed the steel bands broken, the metal envelopes rust-stained and heavily buckled,
and the contents thereof exposed and rusty. Third, Bad Order Tally Sheet No. 154979[28]
issued by Jardine Davies Transport Services, Inc., stated that the four coils were in bad order
 and condition. Normally, a request for a bad order survey is made in case there is an apparent
or a presumed loss or damage. Fourth, the Certificate of Analysis stated that, based on the
sample submitted and tested, the steel sheets found in bad order were wet with fresh water.
Fifth, petitioners -- in a letter addressed to the Philippine Steel Coating Corporation admitted
that they were aware of the condition of the four coils found in bad order and condition. -head
checker of BM Santos Checkers Agency. All these conclusively prove the fact of shipment in
good order and condition and the consequent damage to the four coils while in the possession
of petitioner, who notably failed to explain why.
2. No. Section 3, paragraph 6 of the Carriage of Goods by Sea Act states that, “that the notice of
claim need not be given if the state of the goods, at the time of their receipt, has been the
subject of a joint inspection or survey. As stated earlier, prior to unloading the cargo, an
Inspection Report as to the condition of the goods was prepared and signed by representatives
of both parties.
3. No. The Civil Code does not limit the liability of the common carrier to a fixed amount per
package. In all matters not regulated by the Civil Code, the right and the obligations of common
carriers shall be governed by the Code of Commerce and special laws. Thus, the COGSA,
which is suppletory to the provisions of the Civil Code, supplements the latter by establishing a
statutory provision limiting the carrier's liability in the absence of a shipper's declaration of a
higher value in the bill of lading. In the case before us, there was no stipulation in the Bill of
Lading limiting the carrier's liability. Neither did the shipper declare a higher valuation of the
goods to be shipped. Petitioners' liability should be computed based on US$500 per package
and not on the per metric ton price declared in the Letter of Credit.
25. SULPICIO LINES INC. (PETITIONER) V NAPOLEON SISANTE (RESPONDENTS)
Ponente: Bersamin, J.
FACTS:
The M/V Princess of the Orient, a passenger vessel owned and operated by the petitioner, sank near
Fortune Island in Batangas. Of the 388 recorded passengers, 150 were lost. Napoleon Sesante, then
a member of the Philippine National Police (PNP) and a lawyer, was one of the passengers who survived
the sinking. He sued the petitioner for breach of contract and damages. In its defense, the petitioner
insisted on the seaworthiness of the M/V Princess of the Orient due to its having been cleared to sail
from the Port of Manila by the proper authorities; that the sinking had been due to force majeure; that it
had not been negligent; and that its officers and crew had also not been negligent because they had
made preparations to abandon the vessel because they had launched life rafts and had provided the
passengers assistance in that regard. The RTC rendered judgement in favor of plaintiff Napoleon
Sesante and ordered defendant to pay temperate and moral damages. The RTC observed that the
petitioner, being negligent, was liable to Sesante pursuant to Articles 1739 and 1759 of the Civil Code.
The CA reduced the award of the temperate damages to the approximate cost of Sesante's lost personal
belongings and held that petitioner remained civilly liable. The petitioner has attributed the sinking of the
vessel to the storm notwithstanding its position on the seaworthiness of M/V Princess of the Orient. Yet,
the findings of the Bureau of Maritime International (BMI) directly contradicted the petitioner's attribution,
as the BMI found that petitioner’s fault was the immediate and proximate cause of the sinking due to the
Captain's erroneous maneuvers of the M/V Princess of the Orient minutes before she sunk.
ISSUE: Is there a breach of contract of carriage? Is it absolved from liability because of force
majeure?
RULING:
Yes. Article 1759 of the Civil Code explicitly makes the common carrier liable in the event of death or
injury to passengers due to the negligence or fault of the common carrier's employees: Common
carriers are liable for the death 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 earners. The liability of common carriers under
Article 1759 is demanded by the duty of extraordinary diligence required of common carriers in safely
carrying their passengers. On the other hand, Article 1756 of the Civil Code lays down the presumption
of negligence against the common carrier in the event of death or injury of its passenger.
It is not required to make an express finding of the common carrier's fault or negligence. Even
the mere proof of injury relieves the passengers from establishing the fault or negligence of the carrier
or its employees.22 The presumption of negligence applies so long as there is evidence showing
that: (a) a contract exists between the passenger and the common carrier; and (b) the injury or
death took place during the existence of such contract.23 In such event, the burden shifts to the
common carrier to prove its observance of extraordinary diligence, and that an unforeseen event or force
majeure had caused the injury. In the instant case, Sesante sustained injuries due to the buffeting by the
waves and consequent sinking of M/V Princess of the Orient where he was a passenger. Thus, there
was a breach of contract of carriage.
2.No. To be absolved from liability in case of force majeure, it is not enough that the accident was caused
by a fortuitous event. The common carrier must still prove that it did not contribute to the occurrence of
the incident due to its own or its employees' negligence.27 We explained in Schmitz Transport &
Brokerage Corporation v. Transport Venture, Inc.,28 as follows:
In order to be considered a fortuitous event, however, (1) the cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply with his obligation, must be independent of
human will; (2) it must be impossible to foresee the event which constitute the caso fortuito, or
if it can be foreseen it must be impossible to avoid; (3) the occurrence must be such as to render
it impossible for the debtor to fulfill his obligation in any manner; and (4) the obligor must be free
from any participation in the aggravation of the injury resulting to the creditor. In the instant case,
the Captain's erroneous maneuvers of the MIV Princess of the Orient minutes before she sunk [sic] had
caused the accident.
26. SCHMITZ TRANSPORT & BROKERAGE CORPORATION vs. TRANSPORT VENTURE, INC.,
INDUSTRIAL INSURANCE COMPANY, LTD., and BLACK SEA SHIPPING AND DODWELL now
INCHCAPE SHIPPING SERVICES (#14)
27. SEALOADER SHIPPING CORPORATION, ET. AL. VS. GRAND CEMENT MANUFACTURING
CORPORATION,
Ponente: Leonardo- De Castro
FACTS: On March 24, 1993, Sealoader executed a Time Charter Party Agreement with Joyce Launch
and Tug Co., Inc. (Joyce Launch), a domestic corporation, which owned and operated the motor tugboat
M/T Viper. By virtue of the agreement, Sealoader chartered the M/T Viper in order to tow the formers
unpropelled barges for a minimum period of fifteen days.
Subsequently, Sealoader entered into a contract with Grand Cement for the loading of
cement clinkers and the delivery thereof to Manila. On March 31, 1994, Sealoaders barge, the D/B
Toploader, arrived at the wharf of Grand Cement tugged by the M/T Viper. The D/B Toploader, however,
was not immediately loaded with its intended cargo as the employees of Grand Cement were still loading
another vessel, the Cargo Lift Tres.
On April 4, 1994, Typhoon Bising struck the Visayas area, with maximum recorded winds of
120 kilometers per hour. The D/B Toploader was, at that time, still docked at the wharf of Grand
Cement. In the afternoon of said date, as the winds blew stronger and the waves grew higher, the M/T
Viper tried to tow the D/B Toploader away from the wharf. The efforts of the tugboat were foiled, however,
as the towing line connecting the two vessels snapped. The following day, the employees of Grand
Cement discovered the D/B Toploader situated on top of the wharf, apparently having rammed the same
and causing significant damage thereto.
On April 7, 1994, Grand Cement sent a letter[10] addressed to Johnny Ponce, demanding the
payment of the cost of the damage to the wharf in the amount of P2,423,318.58. As Grand Cement still
failed to receive a reply, it sought the assistance of the Coast Guard Investigation Service Detachment
in Cebu. The said office scheduled consecutive hearings, but Sealoader allegedly did not appear.
On October 3, 1994, Grand Cement filed a Complaint for Damages[9] against Sealoader;
Romulo Diantan, the Captain of the M/T Viper; and Johnny Ponce, the Barge Patron of the D/B
Toploader.
On November 25, 1994, Sealoader filed a motion to dismiss[11] the complaint. Sealoader
insisted that Joyce Launch should have been sued in its stead, as the latter was the owner and operator
of the M/T Viper.
On January 2, 1995, Sealoader instituted a Cross-claim[14] against Joyce Launch and Romulo
Diantan.
On April 19, 1999, the RTC rendered a decision on Civil Case No. 161602, declaring that from
the evidence adduced, the Court is of the view that the defendants are guilty of negligence, which caused
damage to the [Grand Cements] wharf.
On December 9, 2004, Sealoader filed a Motion for Reconsideration.
On March 3, 2005, the Court of Appeals issued an Amended Decision reducing by 50% the
award of actual damages that was previously granted due to the contributory negligence by the Grand
Cements.
Both parties filed a Petition for Review on Certiorari.
ISSUE: Who among the parties in this case should be liable for the damage sustained by the wharf of
Grand Cement?
HELD: Sealoader, et. al. (solidary) Sealoader was guilty of negligence in the conduct of its affairs during
the incident in question under the following instances:
a. Lack of a radio or any navigational communication facility aboard the D/B Toploader;
b. The crew of the D/B Toploader failed to keep a watchful eye on the prevailing weather
conditions;
 c. Acosta merely relied on the assurances of the M/T Beejay crew and the opinion of Romulo
Diantan that the typhoon was nowhere near their area. As it turned out, such reliance was
utterly misplaced;
d. Sealoader should have not taken the initiative to cast off the mooring lines early on or, at the
very least, requested the crew at the wharf to undertake the same.
Sealoader cannot pass to Grand Cement the responsibility of casting off the mooring lines
connecting the D/B Toploader to the wharf. The Court agrees with the ruling of the Court of Appeals in
the Decision dated November 12, 2004 that the people at the wharf could not just cast off the mooring
lines without any instructions from the crew of the D/B Toploader and the M/T Viper. As the D/B
Toploader was without an engine, casting off the mooring lines prematurely might send the barge adrift
or even run the risk of the barge hitting the wharf sure enough.
28. Eastern Shipping Lines V BPI MS Insurance Corporation and Mitsui Sumitomo
Insurance, GR 182864 January 12 2015
FACTS:
This is a Petition for Review on Certiorari after the CA affirmed with modifications the RTC Makati
City’s decision finding the herein petitioner ASLI for the damages sustained by the two shipments of
steel sheets in coil from Japan for delivery in favor of the consignee Calamba Steel. Said steel sheets
were observed to be in bad condition as evidence by the Turn Over Survey of Bad Order Cargo upon
receipt from ESLI’s vessels. However, ESLI denied the allegations and averred that the damage to
both shipments was incurred while the same were in the possession and custody of Asian Terminals,
Inc. (ATI) and/or of the consignee or its representatives.
ISSUE:
Will the Eastern Shipping Lines be responsible for the damages?
HELD:
Yes, the Eastern Shipping Lines, as the common carrier, will be responsible for the damages. It is settled
in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of
the carrier. As found by the RTC and affirmed by the CA based on the evidence presented, the goods
were damaged even before they were turned over to ATI. Such damage was even compounded by the
negligent acts of petitioner and ATI which both mishandled the goods during the discharging operations.
Thus, it bears stressing unto petitioner that 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
transported by them. Subject to certain exceptions enumerated under Article 1734 of the Civil Code,
common carriers are responsible for the loss, destruction, or deterioration of the goods. 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. Owing to this high degree of diligence required of them, common
carriers, as a general rule, are presumed to have been at fault or negligent if the goods they transported
deteriorated or got lost or destroyed. That is, unless they prove that they exercised extraordinary
diligence in transporting the goods. In order to avoid responsibility for any loss or damage, therefore,
they have the burden of proving that they observed such high level of diligence. In this case, petitioner
failed to hurdle such burden.
29. DESIGNER BASKET INC. VS. AIR SEA TRANSPORT INC. & ASIA CARGO CONTAINER LINES
INC.
Ponente: J, Jardeleza
FACTS: DBI is a domestic corporation engaged in the production of housewares and handicraft items
for export.4 Sometime in October 1995, Ambiente, a foreign-based company, ordered from DBI 5 223
cartons of assorted wooden items (the shipment).The shipment was worth Twelve Thousand Five
Hundred Ninety and Eighty-Seven Dollars (US$12,590.87) and payable through telegraphic transfer.7
Ambiente designated ACCLI as the forwarding agent that will ship out its order from the Philippines to
the United States (US). ACCLI is a domestic corporation acting as agent of ASTI, a US based corporation
engaged in carrier transport business, in the Philippines.8 On January 7, 1996, DBI delivered the
shipment to ACCLI for sea transport from Manila and delivery to Ambiente at 8306 Wilshire Blvd., Suite
1239, Beverly Hills, California. To acknowledge receipt and to serve as the contract of sea carriage,
ACCLI issued to DBI triplicate copies of ASTI Bill of Lading No. AC/MLLA601317.9 DBI retained
possession of the originals of the bills of lading pending the payment of the goods by Ambiente.10 On
January 23, 1996, Ambiente and ASTI entered into an Indemnity Agreement (Agreement).11 Under the
Agreement, Ambiente obligated ASTI to deliver the shipment to it or to its order “without the
surrender of the relevant bill(s) of lading due to the non-arrival or loss thereof.”12 In exchange,
Ambiente undertook to indemnify and hold ASTI and its agent free from any liability as a result
of the release of the shipment.13 Thereafter, ASTI released the shipment to Ambiente without the
knowledge of DBI, and without it receiving payment for the total cost of the shipment. 14 DBI then made
several demands to Ambiente for the payment of the shipment, but to no avail. Thus, on October 7, 1996,
DBI filed the Original Complaint against ASTI, ACCLI and ACCLI’s incorporators-stockholders15 for the
payment of the value of the shipment in the amount of US$12,590.87 or Three Hundred Thirty-Three
and Six Hundred Fifty-Eight Pesos (₱333,658.00), plus interest at the legal rate from January 22, 1996,
exemplary damages, attorney’s fees and cost of suit.16 In its Original Complaint, DBI claimed that under
Bill of Lading Number AC/MLLA601317, ASTI and/or ACCLI is “to release and deliver the cargo/shipment
to the consignee, x x x, only after the original copy or copies of [the] Bill of Lading is or are surrendered
to them; otherwise, they become liable to the shipper for the value of the shipment.”17 DBI also averred
that ACCLI should be jointly and severally liable with its co defendants because ACCLI failed to register
ASTI as a foreign corporation doing business in the Philippines. In addition, ACCLI failed to secure a
license to act as agent of ASTI.
ISSUE: WON ASTI, ACCLI, and Ambiente are solidarily liable to DBI for the value of the shipment
HELD: NO, the general rule is that upon receipt of the goods, the consignee surrenders the bill of
lading to the carrier and their respective obligations are considered cancelled. The law, however,
provides two exceptions where the goods may be released without the surrender of the bill of lading
because the consignee can no longer return it. These exceptions are when the bill of lading gets lost or
for other cause. In either case, the consignee must issue a receipt to the carrier upon the release of the
goods. Such receipt shall produce the same effect as the surrender of the bill of lading. We have already
ruled that the non-surrender of the original bill of lading does not violate the carrier’s duty of
extraordinary diligence over the goods (Republic v. Lorenzo Shipping Corporation). Thus, we held
that the surrender of the original bill of lading is not a condition precedent for a common carrier to be
discharged of its contractual obligation. Clearly, law and jurisprudence is settled that the surrender of the
original bill of lading is not absolute; that in case of loss or any other cause, a common carrier may
release the goods to the consignee even without it.
2) Articles 1733, 1734, and 1735 of the Civil Code are not applicable.
Articles 1733, 1734, and 1735 speak of the common carrier's responsibility over the goods. They refer
to the general liability of common carriers in case of loss, destruction or deterioration of goods and the
presumption of negligence against them. The applicable provision instead is Article 353 of the Code of
Commerce, the Article allows the release of the goods to the consignee even without his surrender of
the original bill of lading. In such case, the duty of the carrier to exercise extraordinary diligence is
not violated. Nothing, therefore, prevented the consignee and the carrier to enter into an indemnity
agreement of the same nature as the one they entered here. No law or public policy is contravened upon
its execution.
30. CALVO V. UCPB GENERAL INSURANCE (#13)
Ponente: J, Mendoza
Facts: Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI), and a custom
broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-
chemical fluting paper and 124 reels of kraft liner board from the port area to the Tabacalera
Compound, Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc.
On July 14, 1990, contained in 30 metal vans, said cargoes arrived in Manila on board “M/V Hayakawa
Maru”. After 24 hours, they were unloaded from vessel to the custody of the arrastre operator, Manila
Port Services, Inc. From July 23 to 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the
cargo from the arrastre operator and delivered it to SMC’s warehouse in Manila. On July 25, the goods
were inspected by Marine Cargo Surveyors, reported that 15 reels of the semi-chemical fluting paper
were “wet/stained/torn” and 3 reels of kraft liner board were also torn. The damages cost P93,112.00.
SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on the
other hand, as a subrogee of SMC, brought a suit against petitioner in RTC, Makati City. On December
20, 1995, the RTC rendered judgment finding petitioner liable for the damage to the shipment. The
decision was affirmed by the CA.
Issues:
1. Whether or not Calvo is a common carrier?
2. Whether or not Calvo is liable for damages?
Decision:
1. Calvo is a common carrier. The contention of the petitioner, that she is not a common carrier but
a private carrier, has no merit. Article 1732 provides “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.” It makes no
distinction between one whose principal business activity is the carrying of persons or goods or
both, and one who does such carrying only as ancillary activity. Article 1732 also carefully avoids
making any distinction between a person or enterprise offering transportation service on a
 regular or scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its
services to the "general public," i.e., the general community or population, and one who offers
services or solicits business only from a narrow segment of the general population. (De
Guzman v. CA, 68 SCRA 612)
The concept of “common carrier” under Article 1732 coincides with the notion of “public service”,
under the Public Service Act which partially supplements the law on common carrier. Under
Section 13, paragraph (b) of the Public Service Act, it includes: “ x x x every person that now
or hereafter may own, operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent, occasional or
accidental, and done for general business purposes, any common carrier, railroad, street
railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or
without fixed route and whatever may be its classification, freight or carrier service of any class,
express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice
plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water
supply and power petroleum, sewerage system, wire or wireless communications systems, wire
or wireless broadcasting stations and other similar public services. x x x”
Thus, petitioner is a common carrier because the transportation of goods is an integral part of her
business.
2. Calvo is liable for damages.
Art. 1733 of the Civil Code provides: 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.
The extraordinary diligence in the vigilance over the goods tendered for shipment requires the
common carrier to know and to follow the required precaution for avoiding damage to, or destruction
of the goods entrusted to it for sale, carriage and delivery. It requires common carriers to render
service with the greatest skill and foresight and to use all reasonable means to ascertain the nature
and characteristic of goods tendered for shipment, and to exercise due care in the handling and
stowage, including such methods as their nature requires.
To prove the exercise of extraordinary diligence, petitioner must do more than merely show
the possibility that some other party could be responsible for the damage. It must prove that
it used all reasonable means to ascertain the nature and characteristic of goods tendered for
[transport] and that [it] exercise[d] due care in the handling [thereof].
Art. 1734(4), which provides “Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following causes only: … (4) The
character of the goods or defects in the packing or in the containers…
For the provision to apply, the Rule is that if the improper packing or, in this case, the defect/s in the
container, is/are known to the carrier or his employees or apparent upon ordinary observation, but
he nevertheless accepts the same without protest or exception notwithstanding such condition, he
is not relieved of liability for damage resulting therefrom.[14] In this case, petitioner accepted
the cargo without exception despite the apparent defects in some of the container vans. Hence, for
failure of petitioner to prove that she exercised extraordinary diligence in the carriage of goods in
this case or that she is exempt from liability, the presumption of negligence as provided under Art.
1735[15] holds.
31. Delsan Transport Lines, Inc. vs. American Home Insurance,
G.R. No. 149019, 15 August 2006
FACTS:
• Carrier – Delsan Transport Lines Inc.
• Shipper – Caltex Philippines
• Insurer – American Home Assurance Corporation
Delsan Transport was hired by Caltex to transport its cargo of diesel oil from Bataan Refinery Corporation
to the bulk depot in Bacolod City through a Contract of Affreightment. Upon the arrival of MT Larusan
which carried the cargo in its destination, unloading operations commenced. Thereafter the discharging
had to be stopped on account of the discovery that the port bow mooring of the vessel was intentionally
cut or stolen by unknown persons. Because there was nothing holding it, the vessel drifted westward,
dragged and stretched the flexible rubber hose attached to the riser, broke the elbow into pieces, severed
completely the rubber hose connected to the tanker from the main delivery line at sea bed level and
ultimately caused the diesel oil to spill into the sea. Unaware of what happened, the shore tender, thinking
that the vessel would, at any time, resume pumping, did not shut the storage tank gate valve. As all the
gate valves remained open, the diesel oil that was earlier discharged from the vessel into the shore tank
back flowed. In short, there was spillage and backflow of the diesel cargo. As a result of spillage and
backflow of diesel oil, Caltex sought recovery of the loss from Delsan, but the latter refused to pay. As
insurer, AHAC paid Caltex the sum of P479,262.57 for spillage, pursuant to Marine Risk Note No. 34-
5093-6, and P1,939,575.37 for backflow of the diesel oil pursuant to Inland Floater Policy No. AH-1F64-
1011549P. AHAC as subrogee asked Delsan to compensate it for the amount paid, but to no avail,
AHAC instituted an action against Delsan.
• RTC – ruled in favor of AHAC and held Delsan liable for the loss of the cargo due to its
negligence as a common carrier.
• CA – affirmed RTC - Delsan failed to exercise the extraordinary diligence of a good father of
a family in the handling of its cargo. Applying Article 1736 of the Civil Code, the CA ruled that since the
discharging of the diesel oil into Caltex bulk depot had not been completed at the time the losses
occurred, there was no reason to imply that there was actual delivery of the cargo to Caltex, the
consignee.
ISSUE: Whether or not petitioner should be held liable for both spillage and backflow that caused the
loss of the cargo.
HELD: YES. Common carriers are bound to observe extraordinary diligence in the vigilance over the
goods transported by them. They are presumed to have been at fault or to have acted negligently if the
goods are lost, destroyed or deteriorated. To overcome the presumption of negligence in case of loss,
destruction or deterioration of the goods, the common carrier must prove that it exercised extraordinary
diligence. There are, however, exceptions to this rule found in Article 1734 of the NCC. In the case at
bar, it had been established that the proximate cause of the spillage and backflow of the diesel
oil was due to the severance of the port bow mooring line of the vessel and the failure of the
shore tender to close the storage tank gate valve even as a check on the drain cock showed that
there was still a product on the pipeline. The crew of the vessel should have promptly informed the
shore tender that the port mooring line was cut off. However, Delsan did not do so on the lame excuse
that there was no available banca. The crew of the vessel should have exerted utmost effort to
immediately inform the shore tender that the port bow mooring line was severed. To be sure, Delsan, as
the owner of the vessel, was obliged to prove that the loss was caused by one of the excepted causes
if it were to seek exemption from responsibility. Unfortunately, it miserably failed to discharge this burden
by the required quantum of proof. Delsan’s argument that it should not be held liable for the loss of diesel
oil due to backflow because the same had already been actually and legally delivered to Caltex at the
time it entered the shore tank holds no water. It had been settled that the subject cargo was still in the
custody of Delsan because the discharging thereof has not yet been finished when the backflow
occurred. Since the discharging of the cargo into the depot has not yet been completed at the time of
the spillage when the backflow occurred, there is no reason to imply that there was actual delivery of the
cargo to the consignee. Delsan is straining the issue by insisting that when the diesel oil entered into the
tank of Caltex on shore, there was legally, at that moment, a complete delivery thereof to Caltex. To be
sure, the extraordinary responsibility of 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 a person who has the right to receive
them. The discharging of oil products to Caltex Bulk Depot has not yet been finished, Delsan still has the
duty to guard and to preserve the cargo. The carrier still has in it the responsibility to guard and preserve
the goods, a duty incident to its having the goods transported. Hence, having not overturned the
presumption of negligence, it is but right and proper to held petitioner liable for the loss of the cargo.
32. SARKIES TOURS PHILIPPINES, INC. vs. COURT OF APPEALS
Ponente: Romero, J
FACTS: On August 31, 1984, Fatima boarded petitioners De Luxe Bus No. 5 in Manila on her way to
Legazpi City. Her brother Raul helped her load three pieces of luggage containing all of her optometry
review books, materials and equipment, trial lenses, trial contact lenses, passport and visa, as well as
her mother Marisols U.S. immigration (green) card, among other important documents and personal
belongings. Her belongings was kept in the baggage compartment of the bus, but during a stopover at
Daet, it was discovered that all but one bag remained in the open compartment. The others, including
Fatimas things, were missing and could have dropped along the way. Some of the passengers
suggested retracing the route to try to recover the lost items, but the driver ignored them and proceeded
to Legazpi City.
Fatima immediately reported the loss to her mother who, in turn, went to petitioner’s office in
Legazpi City and later at its head office in Manila. The latter, however, merely offered her P1,000.00 for
each piece of luggage lost, which she turned down. After returning to Bicol disappointed but not defeated,
they asked assistance from the radio stations and even from Philtranco bus drivers who plied the same
route on August 31st. The effort paid off when one of Fatimas bags was recovered. Marisol also reported
the incident to the National Bureau of Investigations field office in Legazpi City, and to the local police.
On September 20, 1984, respondents, through counsel, formally demanded satisfaction of their
complaint from petitioner. In a letter dated October 1, 1984, the latter apologized for the delay and said
that (a) team has been sent out to Bicol for the purpose of recovering or at least getting the full detail[1] of
the incident.
After more than nine months of fruitless waiting, respondents decided to file the case below to
recover the value of the remaining lost items, as well as moral and exemplary damages, attorneys fees
and expenses of litigation. They claimed that the loss was due to petitioners failure to observe
extraordinary diligence in the care of Fatimas luggage and that petitioner dealt with them in bad faith
from the start. Petitioner, on the other hand, disowned any liability for the loss on the ground that Fatima
allegedly did not declare any excess baggage upon boarding its bus.

ISSUE: Whether or not petitioner, as a common carrier, is responsible for the loss.
HELD: The petitioner as a common carrier, is responsible for the loss. Under the Civil Code, "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 . . . transported by them," and this liability "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 person who has a right to receive them," unless the loss is due to any of the excepted causes
under Article 1734 thereof.
The cause of the loss in the case at bar was petitioner's negligence in not ensuring that the
doors of the baggage compartment of its bus were securely fastened. As a result of this lack of
care, almost all of the luggages were lost, to the prejudice of the paying passengers.Where the common
carrier accepted its passenger's baggage for transportation and even had it placed in the vehicle by its
own employee, its failure to collect the freight charge is the common carrier's own lookout. It is
responsible for the consequent loss of the baggage. In the instant case, petitioner’s employee even
helped Fatima and her brother load the luggages in the bus' baggage compartment, without asking that
they be weighed, declared, receipted or paid for.
33.
34. THE PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC vs. MGG MARINE SERVICES
INC. and DOROTEO GAERLAN
Facts:
On March 1, 1987, San Miguel Corporation insured several beer bottle cases with an aggregate
value of P5,836,222.80 with petitioner Philippine American General Insurance Company. The vessel left
the port of Mandaue for Bislig, Surigao del Sur. The cargo were loaded on board the M/V Peatheray
Patrick-G to be transported from Mandaue City to Bislig, Surigao del Sur. On March 3, the vessel sank
off Cawit Point, Surigao. The cargo belonging to SMC was lost, hence SMC claimed the amount of
loss from Philamgen Insurance. Philamgen then requested a certain Mr. Sayo to survey the
circumstances of the loss of cargo. In his report, the vessel was structurally sound and that he did not
see any damage or crack thereon. He concluded that the proximate cause of the listing and subsequent
sinking of the vessel was the shifting of ballast water from starboard to portside.
SMC was paid in full of the amount 5.8 Million php because of the insurance contract.
Philamgen sued MGG Marine Services and Gaerlan as subrogee of San Miguel at Makati RTC Branch
134. Meanwhile, the Board of Marine Inquiry made an investigation and declared that the cause of
sinking was a fortuitous event, and that the captain and the crew should not be liable administratively.
The RTC then ruled in favour of PhilamGen. MGG and Gaerlan appealed to the CA, which reversed the
decision of the RTC, because of the fortuitous event which absolves them from any liability.
Issue: Whether or not MGG and Gaerlan are liable, despite the fortuitous event
Ruling:
No, respondents are not liable due to the fortuitous event.
In order that a common carrier may be absolved from liability where the loss, destruction or
deterioration of the goods is due to a natural disaster or calamity, it must further be shown that the such
natural disaster or calamity was the proximate and only cause of the loss;[9] there must be “an entire
exclusion of human agency from the cause of the injury of the loss.”
The parties do not dispute that on the day the M/V Peatheray Patrick-G sunk, said vessel
encountered strong winds and huge waves ranging from six to ten feet in height. The presence of a crack
in the ill-fated vessel through which water seeped in was confirmed by the Greutzman Divers who were
commissioned by the private respondents to conduct an underwater survey and inspection of the vessel
to determine the cause and circumstances of its sinking. In its report, Greutzman Divers stated that
“along the port side platings, a small hole and two separate cracks were found at about midship.” The
findings of the Board of Marine Inquiry indicate that the attendance of strong winds and huge waves
while the M/V Peatheray Patrick-G was sailing through Cortes, Surigao del Norte on March 3, 1987 was
indeed fortuitous. A fortuitous event has been defined as one which could not be foreseen, or which
though foreseen, is inevitable. The vessel was also seaworthy. It had 3 diesel engines, 3 operational
propellers, and had a captain and the chief mates had been commanding the vessel for more than 3
years.
Since the presence of strong winds and enormous waves at Cortes, Surigao del Sur on March
3, 1987 was shown to be the proximate and only cause of the sinking of the M/V Peatheray Patrick-G
and the loss of the cargo belonging to San Miguel Corporation, private respondents cannot be held liable
for the said loss.
IV. OBLIGATIONS OF A COMMON CARRIER IN THE TRANSPORT OF PASSENGERS
A. Safety of Passengers
1. Exercise of utmost diligence (Art. 1755, NCC)
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 B. Duration of liability
the circumstances. 1. Waiting for carrier or boarding of carrier
2. Arrival at destination
2. Presumption of negligence (Art. 1756, NCC)
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been C. Liability for acts of others
at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as 1. Employees (Art. 1759, NCC)
prescribed in articles 1733 and 1755.
Article 1759. Common carriers are liable for the death of or injuries to passengers through the
**Article 1733. Common carriers, from the nature of their business and for reasons of
negligence or willful acts of the former’s employees, although such employees may have acted beyond
public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the the scope of their authority or in violation of the orders of the common carriers.
safety of the passengers transported by them, according to all the circumstances of each case.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, good father of a family in the selection and supervision of their employees.
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.
2. Other passenger and strangers (Art. 1763, NCC)
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
3. Stipulation on liability (Arts. 1757-1758, 1760 NCC)
willful acts or negligence of other passengers or of strangers, if the common carrier’s employees through
the exercise of the diligence of a good father of a family could have prevented or stopped the act or
Article 1757. The responsibility of a common carrier for the safety of passengers as required in articles omission.
1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by
statements on tickets, or otherwise.
D. Vacarious liability
E. Extent of liability for damages
Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier’s liability
for negligence is valid, but not for willful acts or gross negligence.
CASES
The reduction of fare does not justify any limitation of the common carrier’s liability.
35. PERENA vs ZARATE (#8)
Article 1760. The common carrier’s responsibility prescribed in the preceding article cannot be Spouses Teodoro and Nanette Pereña vs Spouses Nicolas and Teresita Zarate
eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or otherwise.
Civil Law – Common Carrier – Private School Transport are Common Carriers
4. Contributory negligence (Art. 1762, NCC) Torts and Damages – Heirs of a high school student may be awarded damages for loss income
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. Facts:
In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Pereña to transport their
(Zarate’s) son, Aaron Zarate, to and from school. The Pereñas were owners of a van being used for
private school transport.
At about 6:45am of August 22, 1996, the driver of the said private van, Clemente Alfaro, while the children
were on board including Aaron, decided to take a short cut in order to avoid traffic. The usual short cut
was a railroad crossing of the Philippine National Railway (PNR).
Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up which means
it was okay to cross. He then tried to overtake a bus. However, there was in fact an oncoming train but
Alfaro no longer saw the train as his view was already blocked by the bus he was trying to overtake. The
bus was able to cross unscathed but the van’s rear end was hit. During the collision, Aaron, was thrown
off the van. His body hit the railroad tracks and his head was severed. He was only 15 years old.
It turns out that Alfaro was not able to hear the train honking from 50 meters away before the collision
because the van’s stereo was playing loudly.
The Zarates sued PNR and the Pereñas (Alfaro became at-large). Their cause of action against PNR
was based on quasi-delict. Their cause of action against the Pereñas was based on breach of contract
of common carriage.
In their defense, the Pereñas invoked that as private carriers they were not negligent in selecting Alfaro
as their driver as they made sure that he had a driver’s license and that he was not involved in any
accident prior to his being hired. In short, they observed the diligence of a good father in selecting their
employee.
PNR also disclaimed liability as they insist that the railroad crossing they placed there was not meant for
railroad crossing (really, that’s their defense!).
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the decision of the
RTC and the CA, they awarded damages in favor of the Zarates for the loss of earning capacity of their
dead son.
The Pereñas appealed. They argued that the award was improper as Aaron was merely a high school
student, hence, the award of such damages was merely speculative. They cited the case of People vs
Teehankee where the Supreme Court did not award damages for the loss of earning capacity despite
the fact that the victim there was enrolled in a pilot school.
ISSUES: Whether or not the defense of due diligence of a good father by the Pereñas is untenable.
Whether or not the award of damages for loss of income is proper.
HELD: Yes, in both issues.
Defense of Due Diligence of a Good Father
This defense is not tenable in this case. The Pereñas are common carriers. They are not merely private
carriers. (Prior to this case, the status of private transport for school services or school buses is not well
settled as to whether or not they are private or common carriers – but they were generally regarded as
private carriers). Private transport for schools are common carriers. The Pereñas, as the operators of a
school bus service were: (a) engaged in transporting passengers generally as a business, not just as a
casual occupation; (b) undertaking to carry passengers over established roads by the method by which
the business was conducted; and (c) transporting students for a fee. Despite catering to a limited
clientèle, the Pereñas operated as a common carrier because they held themselves out as a ready
transportation indiscriminately to the students of a particular school living within or near where they
operated the service and for a fee.
Being a common carrier, what is required of the Pereñas is not mere diligence of a good father. What is
specifically required from them by law is extraordinary diligence – a fact which they failed to prove in
court. Verily, their obligation as common carriers did not cease upon their exercise of diligently choosing
Alfaro as their employee.
(It is recommended that you read the full text, the Supreme Court made an elaborate and extensive
definition of common and private carriers as well as their distinctions.)
Award of Damages for Aaron’s loss of earning capacity despite he being a high school student at the
time of his death
The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was of normal health
and was an able-bodied person. Further, the basis of the computation of his earning capacity was not
on what he would have become. It was based on the current minimum wage. The minimum wage was
validly used because with his circumstances at the time of his death, it is most certain that had he lived,
he would at least be a minimum wage earner by the time he starts working. This is not being speculative
at all.
The Teehankee case was different because in that case, the reason why no damages were awarded for
loss of earning capacity was that the defendants there were already assuming that the victim would
indeed become a pilot – hence, that made the assumption speculative. But in the case of Aaron, there
was no speculation as to what he might be – but whatever he’ll become, it is certain that he will at the
least be earning minimum wage.

36. HERMINIO MARIANO, JR., vs.ILDEFONSO C. CALLEJAS and EDGAR DE BORJA
Ponente: CJ Puno
FACTS: At around 6:30 p.m. on November 12, 1991, along Aguinaldo Highway, San Agustin,
Dasmarias, Cavite, the Celyrosa Express bus, carrying Dr. Frelinda Mariano as its passenger, deceased
spouse of the petitioner, collided with an Isuzu truck with trailer bearing plate numbers PJH 906 and TRH
531. The passenger bus was bound for Tagaytay while the trailer truck came from the opposite direction,
bound for Manila. The trailer truck bumped the passenger bus on its left middle portion. Due to the
impact, the passenger bus fell on its right side on the right shoulder of the highway and caused the death
of Dr. Mariano and physical injuries to four other passengers. Dr. Mariano was 36 years old at the time
of her death. She left behind three minor children, aged four, three and two years.
Petitioner filed a complaint for breach of contract of carriage and damages against respondents
Callejas, the registered owner of Celyrosa Express, and Edgar de Borja, the driver of the for their failure
to transport his wife to her destination. Respondents denied liability for the death of Dr. Mariano. They
claimed that the proximate cause of the accident was the recklessness of the driver of the trailer truck
which bumped their bus while allegedly at a halt on the shoulder of the road in its rightful lane. Thus,
respondent Callejas, filed a third-party complaint against Liong Chio Chang, doing business under the
name and style of La Perla Sugar Supply, the owner of the trailer truck, for indemnity in the event that
he would be held liable for damages to petitioner.
On the other hand, Callejas filed a complaint, docketed as Civil Case No. NC-397 before the
RTC of Naic, Cavite, against La Perla Sugar Supply and Arcadio Arcilla, the truck driver, for damages
he incurred due to the vehicular accident. On September 24, 1992, the said court found Arcilla liable to
pay Callejas the cost of the repairs of his passenger bus, his lost earnings, exemplary damages and
attorney’s fees. A criminal case, Criminal Case No. 2223-92, was also filed against truck driver Arcilla in
the RTC of Imus, Cavite. On May 3, 1994, the said court convicted truck driver Arcadio Arcilla of the
crime of reckless imprudence resulting to homicide, multiple slight physical injuries and damage to
property.
The trial court on September 13, 1999, found respondents Ildefonso Callejas and Edgar de
Borja, together with Liong Chio Chang, jointly and severally liable to pay petitioner damages and costs
of suit. Respondents Callejas and De Borja appealed to the Court of Appeals, contending that the trial
court erred in holding them guilty of breach of contract of carriage.
CA reversed the decision of the trial court on May 21, 2004 ruling that the injury sustained by
the petitioner was in no way due to any defect in the means of transport or in the method of transporting
or to the negligent or willful acts of private respondent's employees, and therefore involving no issue of
negligence in its duty to provide safe and suitable cars as well as competent employees, with the injury
arising wholly from causes created by strangers over which the carrier had no control or even knowledge
or could not have prevented, the presumption is rebutted and the carrier is not and ought not to be held
liable. The CA denied the MR filed.
ISSUE: Should the Celyrosa Express be absolved from liability?
HELD: Yes. The provisions of the Civil Code pertinent to the case at bar states that:
ART. 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.
ART. 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.
ART. 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.
This Court interpreted the above quoted provisions in Pilapil v. Court of Appeals that:
While the law requires the highest degree of diligence from common carriers in the safe transport of their
passengers and creates a presumption of negligence against them, it does not, however, make the
carrier an insurer of the absolute safety of its passengers.
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the
carriage of passengers by common carriers to only such as human care and foresight can provide. What
constitutes compliance with said duty is adjudged with due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common
carrier when its passenger is injured, merely relieves the latter, for the time being, from introducing
evidence to fasten the negligence on the former, because the presumption stands in the place of
evidence. Being a mere presumption, however, the same is rebuttable by proof that the common
carrier had exercised extraordinary diligence as required by law in the performance of its
contractual obligation, or that the injury suffered by the passenger was solely due to a fortuitous
event.
In fine, we can only infer from the law the intention of the Code Commission and Congress to
curb the recklessness of drivers and operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a transportation
company makes it an insurer of the passenger's safety, but that its liability for personal injuries
sustained by its passenger rests upon its negligence, its failure to exercise the degree of diligence that
the law requires.
The totality of evidence shows that the death of petitioners spouse was caused by the reckless
negligence of the driver of the Isuzu trailer truck which lost its brakes and bumped the Celyrosa Express
bus, owned and operated by respondents. The sketch prepared by PO3 Magno S. de Villa, who
investigated the accident shows that the passenger bus facing the direction of Tagaytay City and lying
on its right side on the shoulder of the road, about five meters away from the point of impact. On the
other hand, the trailer truck was on the opposite direction, about 500 meters away from the point of
impact. PO3 De Villa stated that he interviewed De Borja, respondent driver of the passenger bus, who
said that he was about to unload some passengers when his bus was bumped by the driver of the trailer
truck that lost its brakes. PO3 De Villa checked out the trailer truck and found that its brakes really failed.
In fine, the evidence shows that before the collision, the passenger bus was cruising on its
rightful lane along the Aguinaldo Highway when the trailer truck coming from the opposite direction, on
full speed, suddenly swerved and encroached on its lane, and bumped the passenger bus on its left
middle portion. Respondent driver De Borja had every right to expect that the trailer truck coming from
the opposite direction would stay on its proper lane. He was not expected to know that the trailer truck
had lost its brakes. The swerving of the trailer truck was abrupt and it was running on a fast speed as it
was found 500 meters away from the point of collision.
Petition is denied and The Decision dated May 21, 2004 and the Resolution dated January 7,
2005 of the Court of Appeals in CA-G.R. CV No. 66891 are AFFIRMED.
37. JOSE PILAPIL, vs.HON. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY,
INC.,
Ponente: Padilla, J
FACTS: Jose Pilapil, a passenger, boarded ALATCO's bus bearing No. 409 at San Nicolas, Iriga City
on 16 September 1971 at about 6:00 P.M. Upon reaching the vicinity of the cemetery of the Baao,
Camarines Sur, on the way to Naga City, an unidentified man, hurled a stone at the left side of the bus,
which hit Jose above his left eye. Respondent's personnel rushed Jose to the provincial hospital in Naga
City where he was confined and treated. Jose was taken to Dr. Malabanan of Iriga City, subsequently,
to Dr. Capulong of V. Luna Hospital, for treatment, but Jose still lost partially his left eye's vision and
sustained a permanent scar above the left eye.
Jose filed an action for recovery of damages before the Court of First Instance of Camarines Sur, Branch
I, which ordered ALATCO to pay Jose Pilapil the sum of P 10K for actual and material damages for
causing a permanent scar on the face and injuring the eye-sight, P5K as moral and exemplary damages,
P300.00 for his medical expenses and attorney's fees in the sum of P 1K.
ALATCO appealed to the CA and on 19 October 1979, the Court of Appeals, in a Special
Division of Five, rendered judgment reversing and setting aside the judgment of the court a quo.
Jose now appeals arguing that the nature of the business of a transportation company requires
the assumption of certain risks, and the stoning of the bus by a stranger resulting in injury to passenger
is one such risk from which the common carrier may not exempt itself from liability.
ISSUE: Is ALATCO liable in the instant case?
HELD: No. While the law requires the highest degree of diligence from common carriers in the safe
transport of their passengers and creates a presumption of negligence against them, it does not,
however, make the carrier an insurer of the absolute safety of its passengers. Article 1755 of the Civil
Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of passengers by
common carriers to only such as human care and foresight can provide. The presumption of fault or
negligence against the carrier is only a disputable presumption. It gives in where contrary facts are
established proving either that the carrier had exercised the degree of diligence required by law or the
injury suffered by the passenger was due to a fortuitous event. In the instant case, the injury sustained
was in no way due to any defect in the means of transport or in the method of transporting or to the
negligent or willful acts of private respondent's employees, and therefore involving no issue of negligence
in its duty to provide safe and suitable cars as well as competent employees. With the injury arising
wholly from causes created by strangers over which the carrier had no control or even knowledge or
could not have prevented, the presumption is rebutted and the carrier is not and ought not to be held
liable.
38. DANGWA TRANSPORTATION CO., INC. VS COURT OF APPEAS
G.R. No. 95582 October 7, 1991
FACTS: Private respondents filed a complaint for damages against petitioners for the death of Pedrito
Cudiamat as a result of a vehicular accident. Among others, it was alleged that while petitioner Theodore
M. Lardizabal was driving a passenger bus belonging to petitioner corporation in a reckless and
imprudent manner and without due regard to traffic rules and regulations and safety to persons and
property, it ran over its passenger, Pedrito Cudiamat. However, instead of bringing Pedrito immediately
to the nearest hospital, the said driver, in utter bad faith and without regard to the welfare of the victim,
first brought his other passengers and cargo to their respective destinations before banging said victim
to the Lepanto Hospital where he expired.
The RTC ruled in favour of Dangwa holding Pedrito as negligent and his negligence was the cause of
his death but still ordered to pay in equity P 10,000 to the heirs of Pedrito. The Court of Appeals reversed
and ordered to pay Pedrito indemnity, moral damages, actual and compensatory damages and cost of
the suit.
ISSUE: Whether or not the petitioners as common carrier are negligent and liable for the damages
claimed
HELD: The petitioners are guilty of negligence. The contention of petitioners that the driver and the
conductor had no knowledge that the victim would ride on the bus, since the latter had supposedly not
manifested his intention to board the same, does not merit consideration. When the bus is not in motion
there is no necessity for a person who wants to ride the same to signal his intention to board. A public
utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty
of the driver and the conductor, every time the bus stops, to do no act that would have the effect of
increasing the peril to a passenger while he was attempting to board the same. The premature
acceleration of the bus in this case was a breach of such duty.
It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar,
or motorbus, to stop their conveyances a reasonable length of time in order to afford passengers an
opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting
from the sudden starting up or jerking of their conveyances while they are doing so.
It has also been repeatedly held that in an action based on a contract of carriage, the court need not
make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to
pay the damages sought by the passenger. By contract of carriage, the carrier assumes the express
obligation to transport the passenger to his destination safely and observe extraordinary diligence with
a due regard for all the circumstances, and any injury that might be suffered by the passenger is right
away attributable to the fault or negligence of the carrier. This is an exception to the general rule that
negligence must be proved, and it is therefore incumbent upon the carrier to prove that it has exercised
extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code.
39. LIGHT RAIL TRANSIT AUTHORITY vs. MARJORIE NAVIDAD
Ponente: J, Vitug
FACTS:
On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then drunk,
entered the EDSA LRT station after purchasing a "token" (representing payment of the fare). While
Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard assigned
to the area approached Navidad. A misunderstanding or an altercation between the two apparently
ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight started or
who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact
moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad
was struck by the moving train, and he was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with
her children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the
Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and
Roman filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent,
in its answer, denied liability and averred that it had exercised due diligence in the selection and
supervision of its security guards.
The LRTA and Roman presented their evidence while Prudent and Escartin, instead of
presenting evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was
negligent in his assigned task. The trial court rendered in favor of the plaintiffs and against the defendants
Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs. The
complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.
Prudent appealed to the Court of Appeals. The appellate court promulgated its now assailed
decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead, holding
the LRTA and Roman jointly and severally liable. The appellate court ratiocinated that while the
deceased might not have then as yet boarded the train, a contract of carriage theretofore had already
existed when the victim entered the place where passengers were supposed to be after paying the fare
and getting the corresponding token therefor. In exempting Prudent from liability, the court stressed that
there was nothing to link the security agency to the death of Navidad. It said that Navidad failed to show
that Escartin inflicted fist blows upon the victim and the evidence merely established the fact of death of
Navidad by reason of his having been hit by the train owned and managed by the LRTA and operated
at the time by Roman. The appellate court faulted petitioners for their failure to present expert evidence
to establish the fact that the application of emergency brakes could not have stopped the train.
ISSUE: WHETHER OR NOT LRTA (Common Carrier) AND RODOLFO ROMAN (train driver) LIABLE
FOR THE DEATH OF NICANOR NAVIDAD.
DECISION: YES, with respect to the common carrier. However, Roman is absolved from the liability.
Law and jurisprudence dictate that a common carrier, both from the nature of its business and for reasons
of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety of
passengers.4 The Civil Code, governing the liability of a common carrier for death of or injury to its
passengers, provides:
"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."
"Article 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."
"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 carrier’s employees through
the exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission."
The law requires common carriers to carry passengers safely using the utmost diligence of very cautious
persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so long as the passengers are
within its premises and where they ought to be in pursuance to the contract of carriage. In the absence
of satisfactory explanation by the carrier on how the accident occurred, which petitioners, according to
the appellate court, have failed to show, the presumption would be that it has been at fault, an exception
from the general rule that negligence must be proved.
The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim
arises from the breach of that contract by reason of its failure to exercise the high diligence required of
the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier
may choose to hire its own employees or avail itself of the services of an outsider or an independent firm
to undertake the task. In either case, the common carrier is not relieved of its responsibilities under the
contract of carriage
There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act or
omission, he must also be absolved from liability. Needless to say, the contractual tie between the LRT
and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be made
liable only for his own fault or negligence. Thus, in this case, Roman is absolved from liability.
40. LA MALLORCA VS. COURT OF APPEALS
Ponente: J, Barrera
Facts: Plaintiffs, husband and wife, together with their three minor daughters (Milagros, 13 years old,
Raquel, about 4 years old and Fe, 2 years old) boarded the Pambusco at San Fernando Pampanga,
bound for Anao, Mexico, Pampanga. Such bus is owned and operated by the defendant.
They were carrying with them four pieces of baggage containing their personal belonging. The
conductor of the b us issued three tickets covering the full fares of the plaintiff and their eldest child
Milagros. No fare was charged on Raquel and Fe, since both were below the height which fare is charged
in accordance with plaintiff’s rules and regulations.
After about an hour’s trip, the bus reached Anao where it stopped to allow the passengers
bound therefore, among whom were the plaintiffs and their children to get off. Mariano Beltran, carrying
some of their baggage was the first to get down the bus, followed by his wife and children. Mariano led
his companion to a shaded spot on the left pedestrian side of the road about four or five meters away
from the vehicle. Afterwards, he returned to the bus in controversy to get his paying, which he had left
behind, but in so doing, his daughter followed him unnoticed by his father. While said Mariano Beltran
was on he running board of the bus waiting for the conductor to hand him his bayong which he left under
one its seats near the door, the bus, whose motor was not shut off while unloading suddenly started
moving forward, evidently to resume its trip, notwithstanding the fact that the conductor was still attending
to the baggage left behind by Mariano Beltran. Incidentally, when the bus was again placed in a complete
stop, it had traveled about 10 meters from point where plaintiffs had gotten off.
Sensing the bus was again in motion; Mariano immediately jumped form the running board
without getting his bayong from conductor. He landed on the side of the road almost board in front of the
shaded place where he left his wife and his children. At that time, he saw people beginning to gather
around the body of a child lying prostrate on the ground, her skull crushed, and without life. The child
was none other than his daughter Raquel, who was run over by the bus in which she rode earlier together
her parent.
For the death of the said child, plaintiffs comment the suit against the defendant to recover from
the latter damages.
ISSUE: Should the child still be considered a passenger?
HELD: There can be no controversy that as far as the father is concerned, when he returned to the bus
for his bayong which was not unloaded, the relation of passenger and carrier between him and the
petitioner remained subsisting. The relation of carrier and passenger does not necessarily cease where
the latter, after alighting from the car aids the carrier’s servant or employee in removing his baggage
from the car.
It is a rule that the relation of carrier and passenger does not cease the moment the passenger
alights from the carrier’s vehicle at a place selected by the carrier at the point of destination but continues
until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier’s
premises.
The father returned to the bus to get one of his baggages which was not unloaded when they
alighted from the bus. Raquel must have followed her father. However, although the father was still on
the running board of the bus awaiting for the conductor to hand him the bag or bayong, the bus started
to run, so that even he had jumped down from the moving vehicle. It was that this instance that the child,
who must be near the bus, was run over and killed. In the circumstances, it cannot be claimed that the
carrier’s agent had exercised the “utmost diligence” of a “very cautious person” required by Article 1755
of the Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely
its passengers. The driver, although stopping the bus, nevertheless did not put off the engine. He started
to run the bus even before the conductor gave him the signal to go and while the latter was still unloading
part of the baggage of the passengers Beltran and family. The presence of the said passengers near the
bus was not unreasonable and they are, therefore, to be considered still as passengers of the carrier,
entitled to the protection under their contract of carriage.
41. ABOITIZ SHIPPING CORPORATION vs. HON. COURT OF APPEALS
Ponente: J, Regalado
FACTS: On May 11, 1975, Anacleto Viana boarded the vessel M/V Antonia, owned by Aboitiz Shipping
Corporation, at the port at San Jose, Occidental Mindoro, bound for Manila. On May 12, 1975, said
vessel arrived at Pier 4, North Harbor, Manila, and the passengers therein disembarked, a gangplank
having been provided connecting the side of the vessel to the pier. Instead of using said gangplank
Anacleto Viana disembarked on the third deck which was on the level with the pier. After said vessel had
landed, the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on
said vessel.
The crane owned by the Pioneer Stevedoring Corporation and operated by its crane operator Alejo
Figueroa was placed alongside the vessel and one (1) hour after the passengers of said vessel had
disembarked, it started operation by unloading the cargoes from said vessel. While the crane was being
operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that
some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was
pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him,
pinning him between the side of the vessel and the crane. He was thereafter brought to the hospital
where he later expired three (3) days thereafter. Private respondents Vianas filed a complaint for
damages against petitioner corporation (Aboitiz, for brevity) for breach of contract of carriage.
ISSUE: Is Aboitiz Shipping Corporation still liable to the death of Viana after he had disembarked from
the vessel?
HELD: Yes, Aboitiz Shipping Corporation is still liable. According to Article 1755 of the New Civil Code,
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 circumstance.
Thus, where a passenger dies or is injured, the common carrier is presumed to have been at fault or to
have acted negligently. This gives rise to an action for breach of contract of carriage where all that is
required of plaintiff is to prove the existence of the contract of carriage and its non-performance by the
carrier, that is, the failure of the carrier to carry the passenger safely to his destination.
The rule is that the relation of carrier and passenger continues until the passenger has been landed at
the port of destination and has left the vessel owner's dock or premises. Once created, the relationship
will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from
the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined
from all the circumstances and includes a reasonable time to see after his baggage and prepare for his
departure. The carrier-passenger relationship is not terminated merely by the fact that the person
transported has been carried to his destination if, for example, such person remains in the carrier's
premises to claim his baggage. In the case at bar, Viana was still unloading his cargoes when the incident
happens, Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death. Thus,
Aboitiz Shipping Corporation is still liable to the death of Viana even after he had already embarked from
the vessel.
42. TRAVEL & TOURS ADVISERS, INC. VS ALBERTO CRUZ
FACTS: On January 9, 1998, at around 7:50 p.m., respondent Edgar Hernandez was driving an Isuzu
Passenger Jitney (jeepney) that he owns with plate number DSG-944 along Angeles-Magalang Road,
Barangay San Francisco, Magalang, Pampanga. Meanwhile, a Daewoo passenger bus (RCJ Bus Lines)
with plate number NXM-116, owned by petitioner Travel and Tours Advisers, Inc. and driven by Edgar
Calaycay travelled in the same direction as that of respondent Edgar Hernandez vehicle. Subsequently,
the bus bumped the rear portion of the jeepney causing it to ram into an acacia tree which resulted in
the death of Alberto Cruz, Jr. and the serious physical injuries of Virginia Muñoz.
 Thus, respondents Edgar Hernandez, Virginia Muñoz and Alberto Cruz, Sr., father of the
deceased Alberto Cruz, Jr., filed a complaint for damages, docketed as Civil Case No. 9006 before the
RTC claiming that the collision was due to the reckless, negligent and imprudent manner by which Edgar
Calaycay was driving the bus, in complete disregard to existing traffic laws, rules and regulations, and
praying that judgment be rendered ordering Edgar Calaycay and petitioner Travel & Tours Advisers, Inc.
to pay for the damages and expenses of the victims.
On January 30, 1998, the RTC rendered judgment in favor of the respondents. The Petitioners
then filed its appeal with the CA, in which the latter affirmed and added some modifications to the RTC’s
decision.
ISSUE: Did the petitioner exercised ordinary diligence of a good father of a family in its selection and
supervision of driver Calaycay?
HELD: No. In the selection of prospective employees, employers are required to examine them as to
their qualifications, experience, and service records.19 On the other hand, due diligence in the
supervision of employees includes the formulation of suitable rules and regulations for the guidance of
employees, the issuance of proper instructions intended for the protection of the public and persons with
whom the employer has relations through his or its employees and the imposition of necessary
disciplinary measures upon employees in case of breach or as may be warranted to ensure the
performance of acts indispensable to the business of and beneficial to their employer. To this, we add
that actual implementation and monitoring of consistent compliance with said rules should be the
constant concern of the employer, acting through dependable supervisors who should regularly report
on their supervisory functions.20 In this case, as shown by the above findings of the RTC, petitioner was
not able to prove that it exercised the required diligence needed in the selection and supervision of its
employee.
Be that as it may, this doesn't erase the fact that at the time of the vehicular accident, the
jeepney was in violation of its allowed route as found by the RTC and the CA, hence, the owner and
driver of the jeepney likewise, are guilty of negligence as defined under Article 2179 of the Civil Code,
which reads as follows: When the plaintiffs negligence was the immediate and proximate cause of his
injury, he cannot recover damages. But if his negligence was only contributory, the immediate and
proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages,
but the courts shall mitigate the damages to be awarded.
The petitioner and its driver, therefore, are not solely liable for the damages caused to the
victims. The petitioner must thus be held liable only for the damages actually caused by his
negligence.21 It is, therefore, proper to mitigate the liability of the petitioner and its driver. The
determination of the mitigation of the defendant's liability varies depending on the circumstances of each
case.
43. MARIANO C. MENDOZA AND ELVIRA LIM vs. SPOUSES LEONORA J. GOMEZ AND GABRIEL
V. GOMEZ.
Ponente: J Perez
FACTS:On 7 March 1997, an Isuzu Elf truck (Isuzu truck) with plate number UAW 582,3 owned by
respondent Leonora J. Gomez (Leonora)4 and driven by Antenojenes Perez (Perez),5 was hit by a
Mayamy Transportation bus (Mayamy bus) with temporary plate number 1376-1280, registered under
the name of petitioner Elvira Lim (Lim)7 and driven by petitioner Mariano C. Mendoza. Reckless
imprudence resulting in damage to property and multiple physical injuries was filed against Mendoza. 9
Mendoza, however, eluded arrest, thus, respondents filed a separate complaint for damages against
Mendoza and Lim, seeking actual damages, compensation for lost income, moral damages, exemplary
damages, attorney’s fees and costs of the suit. Petitioners capitalized on the issue of ownership of the
bus in question. Respondents argued that although the registered owner was Lim, the actual owner of
the bus was SPO1 Cirilo Enriquez (Enriquez), who had the bus attached with Mayamy Transportation
Company (Mayamy Transport) under the so-called “kabit system.” Respondents then impleaded both
Lim and Enriquez. Petitioners, on the other hand, presented Teresita Gutierrez (Gutierrez), whose
testimony was offered to prove that Mayamy Bus or Mayamy Transport is a business name registered
under her name, and that such business is a sole proprietorship. Such was presented by petitioners to
rebut the allegation of respondents that Mayamy Transport is a corporation; and to show, moreover, that
although Gutierrez is the sole proprietor of Mayamy Transport, she was not impleaded by respondents
in the case at bar.alawred
ISSUE: Who is liable for the act committed?
HELD: Settled is the fact that based on the existing circumstances, Mendoza was negligent in driving
the subject Myamy bus. His negligence having caused the damage, Mendoza is certainly liable to repair
said damage. Furthermore, Mendoza’s employer may also be held liable under the doctrine of vicarious
liability or imputed negligence. Under such doctrine, a person who has not committed the act or omission
which caused damage or injury to another may nevertheless be held civilly liable to the latter either
directly or subsidiarily under certain circumstances.25
In Filcar Transport Services v. Espinas, it was held that the registered owner is deemed the employer of
the negligent driver, and is thus vicariously liable under Article 2176, in relation to Article 2180, of the
Civil Code. Citing Equitable Leasing Corporation v. Suyom,28 the Court ruled that in so far as third
persons are concerned, the registered owner of the motor vehicle is the employer of the negligent driver,
and the actual employer is considered merely as an agent of such owner. As such, there can be no other
conclusion but to hold Lim vicariously liable with Mendoza. Consequently, Mariano Mendoza and Elvira
Lim are held solidarily liable to respondent Spouses Leonora and Gabriel Gomez.
44. FILCAR TRANSPORT SERVICES VS JOSE A. ESPINAS
Ponente: J, Brion
FACTS: On November 22, 1998, at around 6:30 p.m., respondent Jose A. Espinas was driving his car
along Leon Guinto Street in Manila when he was suddenly hit by another car. After verifying with the
Land Transportation Office, Espinas learned that the owner of the other car with plate number UCF-545
is Filcar. The car was assigned to its Corporate Secretary Atty. Candido Flor. At the time of the incident
happened, the car was driven by Timoteo Floresca, Atty. Flor’s personal driver.
On May 31, 2001, Espinas filed a complaint for damages against Filcar and Carmen Flor,
President & Gen Manager before the Metropolitan Trial Court, Makati City.
Filcar denied any liability to Espinas and claimed that the incident was not due to its fault or
negligence since Floresca was not its employee but that of Atty. Flor. Filcar and Carmen Flor.
The CA, affirmed the decisions of the MeTC and RTC for the liability of Filcar to pay Espinas
damages.
ISSUE: WON Filcar, as registered owner of the motor vehicle which figured in an accident, may be held
liable for the damages caused to Espinas.
HELD: Yes. Filcar, as registered owner, is deemed the employer of the driver, Floresca, and is thus
vicariously liable under Article 2176 in relation with Article 2180 of the Civil Code. It is undisputed that
Filcar is the registered owner of the motor vehicle which hit and caused damage to Espinas' car. It is on
this basis that Filcar is primarily and directly liable to Espinas for damages. As a general rule, one is only
responsible for his own act or omission. Thus, a person will generally be held liable only for the torts
committed by himself and not by another. This general rule is laid down in Article 2176 of the Civil Code:
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Under Article 2176, in relation with Article 2180, of the Civil Code, an action predicated on an
employee's act or omission may be instituted against the employer who is held liable for the negligent
act or omission committed by his employee.
Although the employer is not the actual tortfeasor, the law makes him vicariously liable on the
basis of the civil law principle of pater familias for failure to exercise due care and vigilance over the acts
of one's subordinates to prevent damage to another. In the last paragraph of Article 2180 of the Civil
Code, the employer may invoke the defense that he observed all the diligence of a good father of a
family to prevent damage.
It is well settled that in case of motor vehicle mishaps, the registered owner of the motor vehicle
is considered as the employer of the tortfeasor-driver, and is made primarily liable for the tort committed
by the latter under Article 2176, in relation with Article 2180, of the Civil Code. In so far as third persons
are concerned, the registered owner of the motor vehicle is the employer of the negligent driver, and the
actual employer is considered merely as an agent of such owner.
Thus, it is clear that for the purpose of holding the registered owner of the motor vehicle primarily
and directly liable for damages under Article 2176, in relation with Article 2180, of the Civil Code, the
existence of an employer-employee relationship, as it is understood in labor relations law, is not required.
It is sufficient to establish that Filcar is the registered owner of the motor vehicle causing damage in order
that it may be held vicariously liable under Article 2180 of the Civil Code.
45. EQUITABLE LEASING CORPORATION V. SUYOM
Ponente: J, Panganiban
FACTS: On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house cum store
of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. A portion of the house was destroyed. Pinned
to death under the engine of the tractor were Respondent Myrna Tamayos son, Reniel Tamayo, and
Respondent Felix Oledans daughter, Felmarie Oledan. Injured were Respondent Oledan himself,
Respondent Marissa Enano, and two sons of Respondent Lucita Suyom. Tutor was charged with and
later convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries in
Metropolitan Trial Court of Manila, Branch 12. Upon verification with the Land Transportation Office,
respondents were furnished a copy of Official Receipt No. 62204139 and Certificate of Registration No.
08262797, showing that the registered owner of the tractor was Equitable Leasing Corporation/leased
to Edwin Lim. On April 15, 1995, respondents filed against Raul Tutor, Ecatine Corporation (Ecatine)
and Equitable Leasing Corporation (Equitable) a complaint for damages in the RTC of Manila, Branch
14. The trial court, upon motion of plaintiffs counsel, issued an Order dropping Raul Tutor, Ecatine and
Edwin Lim from the Complaint, because they could not be located and served with summonses. On the
other hand, in its Answer with Counterclaim, petitioner alleged that the vehicle had already been sold to
Ecatine and that the former was no longer in possession and control thereof at the time of the incident. It
also claimed that Tutor was an employee, not of Equitable, but of Ecatine. After trial on the merits, the
RTC rendered its Decision ordering petitioner to pay actual and moral damages and attorneys fees to
respondents. It held that since the Deed of Sale between petitioner and Ecatine had not been registered
with the Land Transportation Office (LTO), the legal owner was still Equitable. Thus, petitioner was liable
to respondents. Sustaining the RTC, the CA held that petitioner was still to be legally deemed the
owner/operator of the tractor, even if that vehicle had been the subject of a Deed of Sale in favor of
Ecatine on December 9, 1992. The reason cited by the CA was that the Certificate of Registration on file
with the LTO still remained in petitioners name. In order that a transfer of ownership of a motor vehicle
can bind third persons, it must be duly recorded in the LTO.
ISSUE: Are respondents liable?
HELD: Yes. Petitioner is liable for the deaths and the injuries complained of, because it was the
registered owner of the tractor at the time of the accident. The Court has consistently ruled that,
regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the
public and third persons are concerned.
Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the
deaths and the injuries arising from the negligence of the driver.Petitioner further claims that it is not
liable for moral damages, because respondents failed to establish or show the causal connection or
relation between the factual basis of their claim and their wrongful act or omission, if any.
Moral damages are not punitive in nature but are designed to compensate and alleviate in some way the
physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury unjustly caused a person. Although incapable of
pecuniary computation, moral damages must nevertheless be somehow proportional to and in
approximation of the suffering inflicted. This is so because moral damages are in the category of an
award designed to compensate the claimant for actual injury suffered, not to impose a penalty on the
wrongdoer.
Viewed as an action for quasi delict, the present case falls squarely within the purview of Article 2219
(2), which provides for the payment of moral damages in cases of quasi delict. Having established the
liability of petitioner as the registered owner of the vehicle respondents have satisfactorily shown the
existence of the factual basis for the award and its causal connection to the acts of Raul Tutor, who is
deemed as petitioners employee.[58] Indeed, the damages and injuries suffered by respondents were the
proximate result of petitioners tortious act or omission.
Further, no proof of pecuniary loss is necessary in order that moral damages may be awarded, the
amount of indemnity being left to the discretion of the court. The evidence gives no ground for doubt that
such discretion was properly and judiciously exercised by the trial court.[61] The award is in fact consistent
with the rule that moral damages are not intended to enrich the injured party, but to alleviate the moral
suffering undergone by that party by reason of the defendants culpable action.
46. GV Florida Transport, Inc., Petitioner v Heirs of Romeo L. Battung (GR No. 208802, October
14, 2015)
FACTS: Battung boarded the bus of petitioner with body number 037 and plate number BVJ-525 in Delfin
Albano, Isabela, bound for Manila. He was seated at the first row behind the driver and slept during the
ride. Battung was seated at the first row behind the driver and slept during the ride. When the bus reached
the Philippine Carabao Center in Muñoz, Nueva Ecija, the bus driver, Duplio, stopped the bus and
alighted to check the tires. At this point, a man who was seated at the fourth row of the bus stood up,
shot Battung at his head, and then left with a companion. The bus conductor, Daraoay, notified Duplio
of the incident and thereafter, brought Romeo to the hospital, but the latter was pronounced dead on
arrival. Hence, respondents filed a complaint on July 15, 2008 for damages in the aggregate amount of
P1,826,000.00 based on a breach of contract of carriage against petitioner, Duplio, and Baraoay
(petitioner, et al.) before the RTC, docketed as Civil Case No. 22-1103.
ISSUE: Whether petitioner is liable for damages arising from culpa contractual
RULING: No. In the instant case, the injury sustained by the petitioner was in no way due to any defect
in the means of transport or in the method of transporting or to the negligent or wilful acts of the common
carrier's employees, namely Dulipio and Daraoay, in the capabilities as driver and conductor
respectively, and therefore involving no issue of negligence in its duty to provide safe and suitable [care]
as well as competent employees, with the injury arising wholly from causes created by strangers over
which the carrier had no control or even knowledge or could not have prevented, the presumption is
rebutted and the carrier is not and ought not to be held liable. To rule otherwise would make the common
carrier the insurer of the absolute safety of its passengers which is not the intention of the lawmakers.
The case involves the death of Battung wholly caused by the surreptitious act of a co-passenger
who, after consummating such crime, hurriedly alighted from the vehicle.
The law exacts, provided in Articles 1755 and 1756 of the Civil Code, from common carriers
(i.e., those 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) the highest degree of diligence (i.e., extraordinary diligence) in ensuring the safety of its
passengers.
Articles 1733 and 1755 of the Civil Code state:
Art. 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.
Art. 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.
47. HERMINIO L. NOCUM vs. LAGUNA TAYABAS BUS COMPANY G.R. No. L-23733. October 31,
1969
Ponente: J, Barredo
FACTS: Appellee (Nocum), who was a passenger in appellant's (Laguna Tayabas Bus Co.) Bus No.
120 then making a trip within the barrio of Dita, Municipality of Bay, Laguna, was injured as a
consequence of the explosion of firecrackers, contained in a box, loaded in said bus. The bus conductor
testified that the box belonged to a passenger whose name he does not know and who told him that it
contained miscellaneous items and clothes. He also said that from its appearance there was no
indication at all that the contents were explosives or firecrackers. Neither did he open the box because
he just relied on the word of the owner. Dispatcher Nicolas Cornista added that they were not authorized
to open the baggages of passengers because instruction from the management was to call the police if
there were packages containing articles which were against regulations.
The trial court's (Court of First Instance of Batangas) decision was that appellant, Laguna
Tayabas Bus Co, did not observe the extraordinary or utmost diligence of a very cautious person as
required by the articles 1733, 1755, and 1756 of the Civil Code:
ART. 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.
ART. 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.
ART 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.
Appellant, Laguna Tayabas Bus Co assailed the decision of the lower court, that it erred as a
matter of law in not absolving it from liability resulting from the explosion of firecrackers contained in a
package, the contents of which were misrepresented by a passenger.
Hence, this case.
ISSUE: Did Laguna Tayabas Bus Co. fail to exercise extraordinary diligence?
HELD: No. The Supreme Court does not agree with the lower court's findings. It said that, no doubt,
it's vews do seem to be in line with the reasons that the Code Commission had for incorporating the
above-quoted provisions in its draft of the Civil Code. Indeed, in approving the said draft, Congress
must have concurred with the Commission that by requiring the highest degree of diligence from common
carriers in the safe transport of their passengers and by creating a presumption of negligence against
them, the recklessness of their drivers which is a common sight even in crowded areas and, particularly,
on the highways throughout the country may, somehow, if not in a large measure, be curbed.
But the Supreme Court is not convinced, however, that the exacting criterion of said provisions
has not been met by appellant in the circumstances of this particular case. It said that, Article 1733 is
not as unbending as His Honor has held, for it reasonably qualifies the extraordinary diligence required
of common carriers for the safety of the passengers transported by them to be "according to all the
circumstances of each case." In fact, Article 1755 repeats this same qualification: "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 due regard for all the circumstances."
The Supreme Court said that, it must be considered that while it is true the passengers of
appellant's bus should not be made to suffer for something over which they had no control, fairness
demands that in measuring a common carrier's duty towards its passengers, allowance must be given
to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to
their common safety. It is to be presumed that a passenger will not take with him anything dangerous
to the lives and limbs of his co-passengers, not to speak of his own. The right to privacy to which each
passenger is entitled is not to considered lightly. He cannot be subjected to any unusual search, when
he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the
case at bar. In other words, inquiry may be verbally made as to the nature of a passenger's baggage
when such is not outwardly perceptible, but beyond this, constitutional boundaries are already in danger
of being transgressed.
The Supreme Court also qouted that, a carrier is ordinarily not liable for injuries to passengers
from fires or explosions caused by articles brought into its conveyances by other passengers, in the
absence of any evidence that the carrier, through its employees, was aware of the nature of the article
or had any reason to anticipate danger therefrom. (Bogard v. Illinois C. R Co. 144 Ky. 649, 139 S. W.
855, 36 L. R. A.[N. S.] 337; Clarke v. Louisville & N. R. Co. 101 Ky. 34, 39 S. W. 840, 36 L. R. A. 123
[explosion of can of gasoline]; East Indian R. Co. v. Mukerjee [1901] A. C. [Eng.] 396, 3 B. R. C. 420 —
P. C. [explosion of fireworks]; Annotation: 37 L. R. A. [N. S.]
Thus, in holding that appellant has succeeded in rebutting the presumption of negligence by
showing that it has exercised extraordinary diligence for the safety of its passengers, "according to the
circumstances of the (each) case" the appealed judgment of the trial court is reversed and the case is
dismissed.
48. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS
Ponente: Ynarez-Santiago
FACTS: Estela Crisostomo contracted the services of respondent Caravan Travel and Tours
International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed
"Jewels of Europe". The package tour included the countries of England, Holland, Germany, Austria,
Liechstenstein, Switzerland and France at a total cost of P74,322.70. She was given a discount of 5%
of the amount because her niece, Meriam Menor, was the ticketing manager. Pursuant to their contract,
Menor delivered the travel documents and ticket to her aunts house, and in turn, Crisostomo gave the
full payment. Menor then told Crisostomo to be at NAIA on June 15. Crisostomo, without checking her
documents, went on June 15 to NAIA, only to discover that the flight was on June 14, and her plane
ticket was for the 14th. She called Menor to complain, and Menor was able to convince Crisostomo to
take another tour package called the “British Pageant.” Crisostomo paid partial payment and went on
her trip. Upon her return, Crisostomo demanded that she be reimbursed with the difference of the Jewels
of Europe and British Pageant package. Caravan Travel refused, contending that the tickets were non-
refundable.
Crisostomo then filed a complaint before the Regional Trial Court of Makati City, claiming that
it was Caravan Travel’s fault that she missed her flight and that it was also negligent in telling her the
correct date. The RTC ruled in favor of Crisostomo, and found Caravan negligent. The Court of
Appeals reversed the decision, finding fault in both parties. Petitioner contends that respondent did not
observe the standard of care required of a common carrier when it informed her wrongly of the flight
schedule. She could not be deemed more negligent than respondent since the latter is required by law
to exercise extraordinary diligence in the fulfillment of its obligation.
ISSUE: Is Caravan Travel and Tours International, Inc. a common carrier?
HELD: No. The Supreme Court held that, by definition, a contract of carriage or transportation is one
whereby a certain person or association of persons obligate themselves to transport persons, things, or
news from one place to another for a fixed price. Such person or association of persons are regarded
as carriers and are classified as private or special carriers and common or public carriers. A common
carrier is defined under Article 1732 of the Civil Code as 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. It is obvious from the above definition that
respondent is not an entity engaged in the business of transporting either passengers or goods and is
therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner
from one place to another since its covenant with its customers is simply to make travel arrangements
in their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel
permits or visas as well as booking customers for tours.
While petitioner concededly bought her plane ticket through the efforts of respondent company,
this does not mean that the latter ipso facto is a common carrier. At most, respondent acted merely as
an agent of the airline, with whom petitioner ultimately contracted for her carriage to Europe.
Respondent's obligation to petitioner in this regard was simply to see to it that petitioner was properly
booked with the airline for the appointed date and time. Her transport to the place of destination,
meanwhile, pertained directly to the airline.
The object of petitioner’s contractual relation with respondent is the latter’s service of arranging
and facilitating petitioner’s booking, ticketing and accommodation in the package tour. In contrast, the
object of a contract of carriage is the transportation of passengers or goods. It is in this sense that the
contract between the parties in this case was an ordinary one for services and not one of carriage.
Petitioners submission is premised on a wrong assumption.
 The nature of the contractual relation between petitioner and respondent is determinative of the
degree of care required in the performance of the latters obligation under the contract. As earlier stated,
respondent is not a common carrier but a travel agency. It is thus not bound under the law to observe
extraordinary diligence in the performance of its obligation, as petitioner claims.
Therefore, it is clear that respondent performed its prestation under the contract as well as
everything else that was essential to book petitioner for the tour. Had petitioner exercised due diligence
in the conduct of her affairs, there would have been no reason for her to miss the flight. Needless to
say, after the travel papers were delivered to petitioner, it became incumbent upon her to take ordinary
care of her concerns. This undoubtedly would require that she at least read the documents in order to
assure herself of the important details regarding the trip.
Finally, the Supreme Court said that, the evidence on record shows that respondent company
performed its duty diligently and did not commit any contractual breach. Hence, petitioner cannot recover
and must bear her own damage. And thus denied the petition for lack of merit.
49. FORTUNE EXPRESS, INC. vs. COURT OF APPEALS, PAULIE U. CAORONG, and minor
children
Ponente: J Mendoza
FACTS: Petitioner is a bus company in northern Mindanao. Private respondent Paulie Caorong is the
widow of Atty. Caorong, while private respondents Yasser King, Rose Heinni, and Prince Alexander are
their minor children.
On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in Kauswagan,
Lanao del Norte resulting in the death of several passengers of the jeepney, including two Maranaos.
Crisanto Generalao, a volunteer field agent of the Constabulary Regional Security Unit No. X, conducted
an investigation of the accident. He found that the owner of the jeepney was a Maranao residing in
Delabayan, Lanao del Norte and that certain Maranaos were planning to take revenge on the petitioner
by burning some of its buses. Generalao rendered a report on his findings to Sgt. Reynaldo Bastasa of
the Philippine Constabulary Regional Hearquarters at Cagayan de Oro. Upon the instruction of Sgt.
Bastasa, he went to see Diosdado Bravo, operations manager of petitioner, at its main office in Cagayan
de Oro City. Bravo assured him that the necessary precautions to insure the safety of lives and property
would be taken.
At about 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to be
passengers, seized a bus of petitioner at Linamon, Lanao del Norte while on its way to Iligan City. Among
the passengers of the bus was Atty. Caorong. The leader ofthe Maranaos, identified as one Bashier
Mananggolo, ordered the driver, Godofredo Cabatuan, to stop the bus on the side ofthe highway.
Mananggolo then shot Cabatuan on the arm, which caused him to slump on the steering wheel. Then
one ofthe companions ofMananggolo started pouring gasoline inside the bus, as the other held the
passengers at bay with a handgun. Mananggolo then ordered the passengers to get off the bus. The
passengers, including Atty. Caorong, stepped out of the bus and went behind the bushes in a field some
distance from the highway.
However, Atty. Caorong returned to the bus to retrieve something from the overhead rack. At
that time, one of the armed men was pouring gasoline on the head of the driver. Cabatuan, who had
meantime regained consciousness, heard Atty. Caorong pleading with the armed men to spare the driver
as he was innocent of any wrong doing and was only trying to make a living. The armed men were,
however, adamant as they repeated their warning that they were going to burn the bus along with its
driver. During this exchange between Atty. Caorong and the assailants, Cabatuan climbed out of the left
window of the bus and crawled to the canal on the opposite side of the highway. He heard shots from
inside the bus. Larry de la Cruz, one of the passengers, saw that Atty. Caorong was hit. Then the bus
was set on fire. Some of the passengers were able to pull Atty. Caorong out of the burning bus and rush
him to the Mercy Community Hospital in Iligan City, but he died while undergoing operation.
Respondents brought this suit for breach of contract of carriage in the Regional Trial Court,
Branch VI, Iligan City. In his decision, dated December 28, 1990, the trial court dismissed the complaint.
On appeal, however, the Court of Appeals reversed
ISSUE: 1. Was there a breach of the Contract of Carriage?
2. Was the seizure of the vehicle a fortuitous event?
HELD:1. Yes. Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries
suffered by a passenger on account of the wilful acts of other passengers, if the employees of the
common carrier could have prevented the act the exercise of the diligence of a good father of a family.
In the present case, it is clear that because of the negligence of petitioners employees, the seizure of
the bus by Mananggolo and his men was made possible.
Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to
take revenge on the petitioner by burning some of its buses and the assurance of petitioners operation
manager, Diosdado Bravo, that the necessary precautions would be taken, petitioner did nothing to
protect the safety of its passengers.
Had petitioner and its employees been vigilant they would not have failed to see that the
malefactors had a large quantity of gasoline with them. Under the circumstances, simple precautionary
measures to protect the safety of passengers, such as frisking passengers and inspecting their
baggages, preferably with non-intrusive gadgets such as metal detectors, before allowing them on board
could have been employed without violating the passengers constitutional rights. As this Court intimated
in Gacal v. Philippine Air Lines, Inc., a common carrier can be held liable for failing to prevent a hijacking
by frisking passengers and inspecting their baggages.
From the foregoing, it is evident that petitioners employees failed to prevent the attack on one
of petitioners buses because they did not exercise the diligence of a good father of a family. Hence,
petitioner should be held liable for the death of Atty. Caorong.
2. No. Art. 1174 of the Civil Code defines a fortuitous even as an occurrence which could not
be foreseen or which though foreseen, is inevitable. In Yobido v. Court of Appeals, we held that to be
considered as force majeure, it is necessary that: (1) the cause of the breach of the obligation must be
independent of the human will; (2) the event must be either unforeseeable or unavoidable; (3) the
occurrence must be such as to render it impossible for the debtor to fulfill the obligation in a normal
manner; and (4) the obligor must be free of participation in, or aggravation of, the injury to the creditor.
The absence of any of the requisites mentioned above would prevent the obligor from being excused
from liability.
In the present case, this factor of unforeseeablility (the second requisite for an event to be
considered force majeure) is lacking. As already stated, despite the report of PC agent Generalao that
the Maranaos were planning to burn some of petitioners buses and the assurance of petitioners
operations manager (Diosdado Bravo) that the necessary precautions would be taken, nothing was really
done by petitioner to protect the safety of passengers.
50. RAYNERA VS HICETA
Ponente: J Pardo
FACTS: Mar 23, 1989, 2:00 in the morning, Reynaldo Raynera was on his way home. Hewas riding a
motorcycle.
The Isuzu truck was travelling ahead of him at 20 to 30 kilometers per hour. The truck was loaded with
two (2) metal sheets extended on both sides, two (2) feet on the left and three (3) feet on the right. There
were two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates.[5] The asphalt
road was not well lighted.
At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of the
truck trailer, which was without tail lights. Due to the collision, Reynaldo sustained head injuries and truck
helper Geraldino D. Lucelo,rushed him to the Paraaque Medical Center. Upon arrival at the hospital, the
attending physician pronounced Reynaldo Raynera dead on arrival.
The heirs of the deceased demanded[10] from respondents payment of damages arising from
the death of Reynaldo Raynera as a result of the vehicular accident. The respondents refused to pay the
claims
Petitioners filed with the Regional Trial Court, Manila[11] a complaint[12] for damages against
respondents owner and driver of the Isuzu truck
Petitioners presented Virgilio Santos. He testified that at about 1:00 and 2:00 in the morning,
he and his wife went to Alabang market, on board a tricycle. They passed by the service road going
south, and saw a parked truck trailer, with its hood open and without tail lights. They would have bumped
the truck but the tricycle driver was quick in avoiding a collision. The place was dark, and the truck had
no early warning device to alert passing motorists.the trial court rendered decision in favor of petitioners.
It found respondents Freddie Hiceta and Jimmy Orpilla negligent in view of these circumstances.
Respondents Hiceta and Orpilla appealed to the Court of Appeals, the Court of Appeals
rendered decision setting aside the appealed decision. The appellate court held that Reynaldo Rayneras
bumping into the left rear portion of the truck was the proximate cause of his death and consequently,
absolved respondents from liability.
ISSUE: Should the respondents be absolved from liability?
HELD: Yes. During the trial, it was established that the truck had no tail lights. Despite the absence of
tail lights and license plate, respondents truck was visible in the highway. It was traveling at a moderate
speed, approximately 20 to 30 kilometers per hour. It used the service road, instead of the highway,
because the cargo they were hauling posed a danger to passing motorists. In compliance with the Land
Transportation Traffic Code (Republic Act No. 4136) respondents installed 2 pairs of lights on top of the
steel plates, as the vehicles cargo load extended beyond the bed or body thereof.
We find that the direct cause of the accident was the negligence of the victim. Traveling behind
the truck, he had the responsibility of avoiding bumping the vehicle in front of him. He was in control of
the situation. His motorcycle was equipped with headlights to enable him to see what was in front of him.
He was traversing the service road where the prescribed speed limit was less than that in the highway.
Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were on top
of the steel plates, which were visible from a distance of 100 meters. Virgilio Santos admitted that from
the tricycle where he was on board, he saw the truck and its cargo of iron plates from a distance of ten
(10) meters. In light of these circumstances, an accident could have been easily avoided, unless the
victim had been driving too fast and did not exercise due care and prudence demanded of him under the
circumstances.
It has been said that drivers of vehicles who bump the rear of another vehicle are presumed to
be the cause of the accident, unless contradicted by other evidence. The rationale behind the
presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to
observe the vehicle in front of him.
We agree with the Court of Appeals that the responsibility to avoid the collision with the front
vehicle lies with the driver of the rear vehicle. Consequently, no other person was to blame but the victim
himself since he was the one who bumped his motorcycle into the rear of the Isuzu truck. He had the
last clear chance of avoiding the accident.
51. PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO vs. INTERMEDIATE
APPELLATE COURT, and BALIWAG TRANSIT, INC.
Ponente: MELO, J.
FACTS: Plaintiff was passing thru the town of Calumpit Bulacan, temporarily while the bridge at
Hagonoy, Bulacan was under construction. Philippine National Railways is a purely government owned
and regularly passes along the intersection of Barrio Balungao, Calumpit, Bulacan, in going to San
Fernando, La Union from Manila and return; On August 10, 1974, at about 1:20 o'clock in the afternoon,
Passenger train No. 73 hit and bumped the right mid portion of the plaintiff's passenger bus No. 1066,
while the rear portion of said bus was at the railroad track and its direction was towards Hagonoy,
Bulacan at about 1:30 o'clock in the afternoon; At the time of the collision there was a slight rainfall in
the vicinity of the scene of the accident and that there was at said intersection no bar, semaphores, and
signal lights that would warn the public of the approaching train. On account of said collision, the Baliuag
Transit Bus with Body No. 1066 driven by Romeo Hughes was damaged and eighteen (18) of its
passengers died and the rest who were more than fifty three (53) passengers suffered physical injuries;
ISSUES:
1. Who between the driver Romeo Hughes of the Baliuag Transit Incorporated and Honorio Cabardo,
train Engineer of the Philippine National Railways was negligent in the operation of their respective
vehicles, or whether or both were negligent?
2. Could either of the companies Baliuag Transit Incorporated and the Philippine National Railways be
held accountable for the collision because of negligence?
RULING: The instant case the State divested itself of its sovereign capacity when it organized the PNR
which is no different from its predecessor, the Manila Railroad Company. The PNR did not become
immune from suit. It did not remove itself from the operation of Articles 1732 to 1766 of the Civil Code
on common carriers.
The correct rule is that "not all government entities, whether corporate or noncorporate, are immune from
suits. Immunity from suit is determined by the character of the objects for which the entity was organized."
When it is apparent, or when in the exercise of reasonable diligence commensurate with the
surroundings it should be apparent, to the company that a person on its track or to get on its track is
unaware of his danger or cannot get out of the way, it becomes the duty of the company to use such
precautions, by warnings, applying brakes, or otherwise, as may be reasonably necessary to avoid injury
to him.
What exacerbates against petitioners' contention is the authority in this jurisdiction to the effect that the
failure of a railroad company to install a semaphore or at the very least, to post a flagman or watchman
to warn the public of the passing train amounts to negligence.
52. JAPAN AIRLINES VS COURT OF APPEALS (G.R. NO. 118664)
Ponente: J, Romero
FACTS: On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San
Francisco, California bound for Manila. Likewise, on the same day private respondents Enrique Agana,
Maria Angela Nina Agana and Adelia Francisco left Los Angeles, California for Manila via JAL flight No.
JL 061. As an incentive for travelling on the said airline, both flights were to make an overnight stopover
at Narita, Japan, at the airlines expense, thereafter proceeding to Manila the following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel Nikko
Narita for the night. The next day, private respondents, on the final leg of their journey, went to the airport
to take their flight to Manila. However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed
Ninoy Aquino International Airport (NAIA), rendering it inaccessible to airline traffic. Hence, private
respondents trip to Manila was cancelled indefinitely. To accommodate the needs of its stranded
passengers, JAL rebooked all the Manila-bound passengers on flight No. 741 due to depart on June 16,
1991 and also paid for the hotel expenses for their unexpected overnight stay. On June 16, 1991, much
to the dismay of the private respondents, their long-anticipated flight to Manila was again cancelled due
to NAIAs indefinite closure. At this point, JAL informed the private respondents that it would no longer
defray their hotel and accommodation expense during their stay in Narita. Since NAIA was only reopened
to airline traffic on June 22, 1991, private respondents were forced to pay for their accommodations and
meal expenses from their personal funds from June 16 to June 21, 1991. Their unexpected stay in Narita
ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741.
Private respondents, on July 25, 1991, commenced an action for damages against JAL before
the Regional Trial Court of Quezon City, Branch 104. To support their claim, private respondents
asserted that JAL failed to live up to its duty to provide care and comfort to its stranded passengers when FACTS: On 2 August 1976, private respondent was among the twenty-one (21) passengers of PAL
it refused to pay for their hotel and accommodation expenses from June 16 to 21, 1991 at Narita, Flight 477 that took off from Cebu bound for Ozamiz City. The routing of this flight was Cebu-Ozamiz-
Japan. In other words, they insisted that JAL was obligated to shoulder their expenses as long as they Cotabato. While on flight and just about fifteen (15) minutes before landing at Ozamiz City, the pilot
were still stranded in Narita. On the other hand, JAL denied this allegation and averred that airline received a radio message that the airport was closed due to heavy rains and inclement weather and that
passengers have no vested right to these amenities in case a flight is cancelled due to force majeure. he should proceed to Cotabato City instead.
On June 18, 1992, the trial court rendered its judgment in favor of private respondents. CA Upon arrival at Cotabato City, the PAL Station Agent informed the passengers of their options
lowered the damages.
to return to Cebu on flight 560 of the same day and thence to Ozamiz City on 4 August 1975, or take the
next flight to Cebu the following day, or remain at Cotabato and take the next available flight to Ozamiz
ISSUES: Did JAL have the obligation to shoulder the hotel and meal expenses even if the delay was
City on 5 August 1975. Private respondent chose to return to Cebu but was not accommodated because
caused by force majeure? Whether or not the award of damages was proper.
he checked-in as passenger No. 9 on Flight 477 and there were only six (6) seats available as there
were already confirmed passengers for Manila.
HELD: When a party is unable to fulfill his obligation because of force majeure, the general rule is that
PAL then issued to private respondent a free ticket to Iligan city, which the latter received under
he cannot be held liable for damages for non-performance. When JAL was prevented from resuming its
protest.5 Private respondent was left at the airport and could not even hitch a ride in the Ford Fiera
flight to Manila due to the effects of the eruption, whatever losses or damages in the form of hotel and
loaded with PAL personnel.6 PAL neither provided private respondent with transportation from the airport
meal expenses the stranded passengers incurred cannot be charged to JAL. The predicament of the
to the city proper nor food and accommodation for his stay in Cotabato City.
private respondents was not due to the fault or negligence of JAL. JAL had the duty to arrange the
On 25 November 1976, private respondent filed a complaint for damages for breach of contract
respondents’ flight back to Manila. However, it failed to look after the comfort and convenience of its
of carriage2 against Philippine Airlines, Inc. (PAL). The trial court rendered its decision in favor of the
passengers when it made the passengers arrange their flight back to Manila on their own and after
private respondent. On appeal, the CA found no reversible error.
waiting in the airport for a whole day.
PAL then sought recourse to this Court by way of a petition for review on certiorari it asserts
While JAL was no longer required to defray private respondents living expenses during their
that it should not be charged with the task of looking after the passengers' comfort and convenience
stay in Narita on account of the fortuitous event, JAL had the duty to make the necessary arrangements
because the diversion of the flight was due to a fortuitous event.
to transport private respondents on the first available connecting flight to Manila. Petitioner JAL reneged
on its obligation to look after the comfort and convenience of its passengers when it declassified private
ISSUE: Whether or not PAL should be held liable in looking after the passengers’ comfort and
respondents from transit passengers to new passengers as a result of which private respondents were
convenience considering that the diversion of its flight was due to a fortuitous event?
obliged to make the necessary arrangements themselves for the next flight to Manila. Private
respondents were placed on the waiting list from June 20 to June 24. To assure themselves of a seat on
HELD: Yes. The contract of air carriage is a peculiar one. Being imbued with public interest, the law
an available flight, they were compelled to stay in the airport the whole day of June 22, 1991 and it was
requires common carriers to carry the passengers safely as far as human care and foresight can provide,
only at 8:00 p.m. of the aforesaid date that they were advised that they could be accommodated in said
using the utmost diligence of very cautious persons, with due regard for all the circumstances. The
flight which flew at about 9:00 a.m. the next day.
relation of carrier and passenger continues until the latter has been landed at the port of destination and
Yes, the award of nominal damages is proper. Nominal damages are adjudicated in order that
has left the carrier's premises. Hence, PAL necessarily would still have to exercise extraordinary
a right of a plaintiff, which has been violated or invaded by the defendant, may be vindicated or
diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have
recognized and not for the purpose of indemnifying any loss suffered by him.
reached their final destination.
A contract to transport passengers is quite different in kind and degree from any other
53. PHILIPPINE AIRLINES, INC.,vs. COURT OF APPEALS and PEDRO ZAPATOS
contractual relation. And this, because of the relation which an air carrier sustains with the public. Its
Ponente: J, Bellosillo
business is mainly with the travelling public. It invites people to avail of the comforts and advantages it
offers. The contract of air carriage, therefore, generates a relation attended with a public duty.
54.
55. MARANAN VS. PEREZ G.R. NO. L-22272
Ponente: J Bengzon
FACTS: Rogelio Corachea, a passenger in a taxicab owned and operated by Pascual Perez, was
stabbed and killed by the driver, Simeon Valenzuela. Valenzuela was found guilty for homicide by the
Court of First Instance and was sentenced to suffer Imprisonment and to indemnify the heirs of the
deceased in the sum of P6000. While pending appeal, mother of deceased filed an action in the Court
of First Instance of Batangas to recover damages from Perez and Valenzuela. Defendant Perez claimed
that the death was a caso fortuito for which the carrier was not liable. The court a quo, after trial, found
for the plaintiff and awarded her P3,000 as damages against defendant Perez. The claim against
defendant Valenzuela was dismissed. From this ruling, both plaintiff and defendant Perez appealed to
this Court, the former asking for more damages and the latter insisting on non-liability .Defendant-
appellant relied solely on the ruling enunciated in Gillaco vs. Manila Railroad Co. that the carrier is under
no absolute liability for assaults of its employees upon the passengers.
ISSUE: Whether or not Perez should be held liable for the death of the passenger?
HELD: Yes. The basis of the carrier's liability for assaults on passengers committed by its drivers rests
on the principle that it is the carrier's implied duty to transport the passenger safely. As between the
carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carrier's
employees against passengers, since it, and not the passengers, has power to select and remove them.
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. The 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. (Art. 1759)
The attendant facts and controlling law of that case and the one at bar were very different. In
the Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty
employee. The Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike
he present Civil Code, did not impose upon common carrier’s absolute liability for the safety of
passengers against willfull assaults or negligent acts committed by their employees. The death of the
passenger in the Gillaco case was truly a fortuitous event which exempted the carrier from liability
56. SINGAPORE AIRLINES LIMITED, petitioner, vs. ANDION FERNANDEZ, respondent.
Ponente: J, Callejo
FACTS: Respondent Andion Fernandez is an acclaimed soprano here in the Philippines and abroad. At
the time of the incident, she was availing an educational grant from the Federal Republic of Germany,
pursuing a Masters Degree in Music majoring in Voice. She was invited to sing before the King and
Queen of Malaysia on February 3 and 4, 1991. For this singing engagement, an airline passage ticket
was purchased from petitioner Singapore Airlines which would transport her
to Manila from Frankfurt, Germany on January 28, 1991. From Manila, she would proceed
to Malaysia on the next day.[4] It was necessary for the respondent to pass by Manila in order to gather
her wardrobe; and to rehearse and coordinate with her pianist her repertoire for the aforesaid
performance.
On January 27, 1991, Flight No. SQ 27 left Frankfurt but arrived in Singapore two hours late or at
about 11:00 in the morning of January 28, 1991. By then, the aircraft bound for Manila had left as
scheduled, leaving the respondent and about 25 other passengers stranded in
the Changi Airport in Singapore. Upon disembarkation at Singapore, the respondent approached the
transit counter who referred her to the nightstop counter and told the lady employee thereat that it was
important for her to reach Manila on that day, January 28, 1991. The lady employee told her that there
were no more flights to Manila for that day and that respondent had no choice but to stay
in Singapore. She was told that she can actually fly to Hong Kong going to Manila but since her ticket
was non-transferable, she would have to pay for the ticket. She then stayed overnight with her relatives.
The next day, after being brought back to the airport. The respondent approached petitioner’s male
employee at the counter to make arrangements for immediate booking only to be told: Cant you see I
am doing something. She explained her predicament but the male employee uncaringly retorted: Its your
problem, not ours.
The respondent never made it to Manila and was forced to take a direct flight
from Singapore to Malaysia on January 29, 1991, through the efforts of her mother and travel agency
in Manila. Her mother also had to travel to Malaysia bringing with her respondent’s wardrobe and
personal things needed for the performance that caused them to incur an expense of about P50,000.
Because of these, the defendant sued the petitioner and was ordered to pay for damages by the RTC
which was affirmed by the CA. The petitioner assails the award of damages contending that it exercised
the extraordinary diligence required by law under the given circumstances and that the two hours delay
was due to a fortuitous event and beyond petitioners control.
ISSUE: Whether or not the petitioner is liable for damages.
DECISION: Yes. The petitioner is liable for damages. When an airline issues a ticket to a passenger,
confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger then has
every right to expect that he be transported on that flight and on that date. If he does not, then the carrier
opens itself to a suit for a breach of contract of carriage.
The contract of air carriage is a peculiar one. Imbued with public interest, the law requires
common carriers to carry the passengers safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons with due regard for all the circumstances. In an action for
breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was
at fault or was negligent. All that is necessary to prove is the existence of the contract and the fact of its
non-performance by the carrier.
In the case at bar, it is undisputed that the respondent carried a confirmed ticket for the two-
legged trip from Frankfurt to Manila: 1) Frankfurt-Singapore; and 2) Singapore-Manila. In her contract of
carriage with the petitioner, the respondent certainly expected that she would fly to Manila on Flight No.
SQ 72 on January 28, 1991. Since the petitioner did not transport the respondent as covenanted by it
on said terms, the petitioner clearly breached its contract of carriage with the respondent. The
respondent had every right to sue the petitioner for this breach. The defense that the delay was due to
fortuitous events and beyond petitioners control is unavailing.
In the instant case, petitioner was not without recourse to enable it to fulfill its obligation to transport the
respondent safely as scheduled as far as human care and foresight can provide to her destination. It
maybe that delay in the take off and arrival of commercial aircraft could not be avoided and may be
caused by diverse factors such as those testified to by defendant’s pilot. However, knowing fully well
that even before the plaintiff boarded defendants Jumbo aircraft in Frankfurt bound for Singapore, it has
already incurred a delay of two hours. Nevertheless, defendant did not take the trouble of informing
plaintiff. Such information should have been given and inquiries made in Frankfurt because even the
defendant airlines manual provides that in case of urgency to reach his or her destination on the same
date, the head office of defendant in Singapore must be informed by telephone or telefax so as the latter
may make certain arrangements with other airlines in Frankfurt to bring such a passenger with urgent
business to Singapore in such a manner that the latter can catch up with her connecting flight such as
S-27/28 without spending the night in Singapore[23]
Article 2232 of the Civil Code provides that in a contractual or quasi-contractual relationship,
exemplary damages may be awarded only if the defendant had acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner. In this case, petitioners employees acted in a wanton, oppressive or
malevolent manner. The award of exemplary damages is, therefore, warranted in this case.
57.
58. CORNELIA A. DE GILLACO, ET AL., vs. MANILA RAILROAD COMPANY
Ponente: Reyes, JBL
FACTS: That at about 7:30 a.m., on the morning of April 1, 1946, Lieut. Tomas Gillaco, husband of the
plaintiff, was a passenger in the early morning train of the Manila Railroad Company from Calamba,
Laguna to Manila;
That when the train reached the Paco Railroad station, Emilio Devesa, a train guard of the Manila
Railroad Company assigned in the Manila-San Fernando, La Union Line, happened to be in said station
waiting for the same train which would take him to Tutuban Station, where he was going to report for
duty; That Emilio Devesa had a long standing personal grudge against Tomas Gillaco, same dating back
during the Japanese occupation; That because of this personal grudge, Devesa shot Gillaco with the
carbine furnished to him by the Manila Railroad Company for his use as such train guard, upon seeing
him inside the train coach; That Tomas Gillaco died as a result of the wound which he sustained from
the shot fired by Devesa.
It is also undisputed that Devesa was convicted with homicide by final judgment of the Court of
Appeals.
Appellant's contention is that, on the foregoing facts, no liability attaches to it as employer of the killer,
Emilio Devesa; that it is not responsible subsidiary ex delicto, under Art. 103 of the Revised Penal Code,
because the crime was not committed while the slayer was in the actual performance of his ordinary
duties and service; nor is it responsible ex contractu, since the complaint did not aver sufficient facts to
establish such liability, and no negligence on appellant's party was shown. The Court below held the
Railroad company responsible on the ground that a contract of transportation implies protection of the
passengers against acts of personal violence by the agents or employees of the carrier.
ISSUE: Is Manila Rail Road Company is liable for the damages for the death of Gillaco caused by Devesa
HELD: No. The Manila Rail Road Company is not liable for the damages for the death of Gillaco caused
by Devesa. Under the Civil Code, a passenger is entitled to protection from personal violence by the
carrier or its agents or employees, since the contract of transportation obligates the carrier to transport
a passenger safely to his destination. But this responsibility under the law extends only to those that the
carrier could foresee or avoid through the exercise of the degree of car and diligence required of it.
The act of guard Devesa in shooting passenger Gillaco (because of a personal grudge nurtured against
the latter since the Japanese occupation) was entirely unforeseeable by the Manila Railroad Co. The
latter had no means to ascertain or anticipate that the two would meet, nor could it reasonably foresee
every personal rancor that might exist between each one of its many employees and any one of the
thousands of eventual passengers riding in its trains. The shooting in question was therefore "caso
fortuito" within the definition of article 105 of the old Civil Code, being both unforeseeable and inevitable
under the given circumstances; and pursuant to established doctrine, the resulting breach of appellant's
contract of safe carriage with the late Tomas Gillaco was excused thereby.
No doubt that a common carrier is held to a very high degree of care and diligence in the
protection of its passengers; but, considering the vast and complex activities of modern rail
transportation, to require of appellant that it should guard against all possible misunderstanding between
each and every one of its employees and every passenger that might chance to ride in its conveyances
at any time, strikes us as demanding diligence beyond what human care and foresight can provide.
More importantly, When the crime took place, the guard had no duties to discharge. Devesa
was therefore under no obligation to safeguard the passenger of the Calamba-Manila train, where the
deceased was riding; and the killing of Gillaco was not done in line of duty. His position would be that of
a passenger also waiting transportation and not of an employee assigned to discharge duties that the
Railroad had assumed by its contract with the deceased. As a result, Devesa's assault cannot be
deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier.