Doctrines of Transportation Law

[De Guzman v. CA] Art. 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 (in local idiom, as a sideline). Art. 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 Art. 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 Art. 1732 deliberately refrained from making such distinctions. The concept of common carrier under Art. 1732 may be seen to coincide neatly with the notion of public service, under Section 13 (b) of the Public Service Act (Commonwealth Act No. 1416, as amended) which at least partially supplements the law on common carriers set forth in the Civil Code. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. The business of a common carrier impinges directly and intimately upon the safety and well-being and property of those members of the general community who happen to deal with such carrier. The law imposes duties and liabilities upon common carriers for the safety and protection of those who utilize their services and the law cannot allow a common carrier to render such duties and liabilities merely facultative by simply failing to obtain the necessary permits and authorizations. The list of causes of loss, destruction, or deterioration which exempt the common carrier for responsibility under Art. 1734 of the Civil Code is a closed list. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable provided that they shall have complied with the rigorous standard of extraordinary diligence.

by Karell Marie Lascano

San Beda Law Manila

2012

Doctrines of Transportation Law

[Cebu Salvage Corp. v. Phil. Home Assurance Corp.] The fact that it did not own the vessel it decided to use to consummate the contract of carriage did not negate its character and duties as a common carrier.

[Philippine Charter Insurance Corp. v. Unknown Owner of the Vessel M/V National Honor] The Court has defined extraordinary diligence in the vigilance over the goods as follows: 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. When the goods shipped are either lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable. To exculpate itself from liability for the loss/damage to the cargo under any of the causes enumerated in Art. 1734 of the Civil Code, the common carrier is burdened to prove any of the causes claimed by it by a preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the carrier is negligent. Defect is the want or absence of something necessary or essential to the proper use for the purpose for which a thing is to be used. Inferior means of poor quality, mediocre, or second rate. A thing may be of inferior quality but not necessarily defective. In other words, defectiveness is not synonymous with inferiority. The statement in the Bill of Lading that the shipment was in apparent good condition is sufficient to sustain a finding of absence of defects in the merchandise. Case law has it that such statement will create a prima facie presumption only as to the external condition and not to that NOT open to inspection.

by Karell Marie Lascano

2012

While it is true that a bill of lading may serve as the contract of carriage between the parties, it cannot prevail over the express provision of the voyage charter that the carrier and the charterer executed. The bill of lading becomes, therefore, only a receipt and not the contract of carriage in a charter of the entire vessel, for the contract is the Charter Party, and is the law between the parties who are bound by its terms and condition provided that these are not contrary to law, morals, good customs, public order and public policy.

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Doctrines of Transportation Law

[Calvo v. UCPB General Insurance Co., Inc.] A customs broker is a common carrier.
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The rule is that if the improper packing or 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. [Lea Mer Industries, Inc. v. Malayan Insurance Co., Inc.] Charter parties are classified as contracts of demise (or bareboat) and affreightment, which are distinguished as follows: Under the demise or bareboat charter of the vessel, the charterer will generally be considered as owner for the voyage or service stipulated. The charterer mans the vessel with his own people and becomes, in effect, the owner pro hac vice, subject to liability to others for damages caused by negligence. To create a demise, the owner of a vessel must completely and exclusively relinquish possession, command and navigation thereof to the charterer; anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all. The distinction is significant, because a demise or bareboat charter indicates a business undertaking that is private in character. Consequently, the rights and obligations of the parties to a contract of private carriage are governed principally by their stipulations, not by the law on common carriers. Article 1174 of the Civil Code provides that no person shall be responsible for a fortuitous event which could not be foreseen, or which, though foreseen, was inevitable. Thus, if the loss or damage was due to such an event, a common carrier is exempted from liability. Jurisprudence defines the elements of a fortuitous event as follows: (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;

by Karell Marie Lascano

2012

To prove the exercise of extraordinary diligence, one 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 exercised due care in the handling thereof.

Doctrines of Transportation Law

(b) the event that constituted the caso fortuito must have been impossible to foresee or, if foreseeable, impossible to avoid;
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(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 excuse the common carrier fully of any liability, the fortuitous event must have been the proximate and only cause of the loss. Moreover, it should have exercised due diligence to prevent or minimize the loss before, during and after the occurrence of the fortuitous event. [Crisostomo v. CA] 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 travel agency, not being a common carrier, is not bound under the law to observe extraordinary diligence in the performance of its obligation. There is no fixed standard of diligence applicable to each and every contractual obligation and each case must be determined upon its particular facts. The degree of diligence required depends on the circumstances of the specific obligation and whether one has been negligent is a question of fact that is to be determined after taking into account the particulars of each case. [FGU Insurance Corp. v. G.P. Sarmiento Trucking Corp.] A trucking company which is an exclusive contractor and hauler of another company, rendering or offering its services to no other individual or entity, cannot be considered a common carrier. The true test of a common carrier is the carriage of passengers or goods, providing space for those who opt to avail themselves of its transportation service for a fee. [National Steel Corp. v. CA] The true test of a common carrier is the carriage of passengers or goods, provided it has space for all who opt to

by Karell Marie Lascano

2012

Doctrines of Transportation Law

avail themselves of its transportation service for a fee. A carrier which does not qualify under the above test is deemed a private carrier.
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It is a hornbook doctrine that: In an action against a private carrier for loss of, or injury to, cargo, the burden is on the charterer to prove that the carrier was negligent or unseaworthy, and the fact that the goods were lost or damaged while in the carriers custody does not put the burden of proof on the carrier. [Macam v. CA] The extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. [Delsan Transport Lines, Inc. v. American Home Assurance Corp.] To be sure, the extraordinary responsibility of a 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 a right to receive them. The carrier still has in it the responsibility to guard and preserve the goods, a duty incident to its having the goods transported. [Tiu v. Arriesgado] A man must use common sense, and exercise due reflection in all his acts; it is his duty to be cautious, careful and prudent, if not from instinct, then through fear of recurring punishment. Otherwise, his own person, rights and property, and those of his fellow beings, would ever be exposed to all manner of danger and inquiry. Upon the happening of the accident, the presumption of negligence at once arises, and it becomes the duty of a common carrier to prove that he observed extraordinary diligence in the care of his passengers. It must be stressed that in requiring the highest possible degree of diligence from common carriers and in creating a presumption of negligence against them, the law compels them to curb the recklessness of their drivers.

by Karell Marie Lascano

2012

The rights and obligations of a private carrier and a shipper, including their respective liability for damage to the cargo, are determined primarily by stipulations in their contract of private carriage or charter party.

Doctrines of Transportation Law

The Principle of Last Clear Chance only applies in a suit between the owners and drivers of two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations, for it would be inequitable to exempt the negligent driver and its owner on the ground that the other driver was likewise guilty of negligence. It is such a firmly established principle as to have virtually formed part of the law itself, that the negligence of the employee gives rise to the presumption of negligence on the part of the employer. This is the presumed negligence in the selection and supervision of employee. While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the passengers and owners of cargo carried by a common carrier, they are not the only persons that the law seeks to benefit. For if common carriers carefully observed the statutory standard of extraordinary diligence in respect of their own passengers, they cannot help but simultaneously benefit pedestrians and the passengers of other vehicles who are equally entitled to the safe and convenient use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of people (whether passengers or not) on our highways and buses, the very size and power of which seem to inflame the minds of their drivers. In case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. [FGU Insurance Corp. v. CA] Caso fortuito or force majeure (which in law are identical insofar as they exempt an obligor from liability) by definition, are extraordinary events not foreseeable or avoidable, events that could not be foreseen, or which though foreseen, were inevitable. To be exempted from responsibility, the natural disaster should have been the proximate and only cause of the loss. [Loadstar Shipping Co., Inc. v. CA] For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Art. 1755 of the Civil Code.

by Karell Marie Lascano

San Beda Law Manila

2012

Doctrines of Transportation Law

Inasmuch as neither the Civil Code nor the Code of Commerce states a specific prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA)which provides for a one-year period of limitation on claims for loss of, or damage to, cargoes sustained during transitmay be applied suppletorily. Moreover, a stipulation reducing the one-year period is null and void; it must accordingly be struck down.

[Philippine National Railways v. CA] It is the duty of a common carrier to overcome the presumption of negligence that accrues once its passenger dies of an accident. Death or any injury suffered by any of its passengers gives rise to the presumption that it was negligent in the performance of its obligation under the contract of carriage. [Tabacalera Insurance Co. v. North Front Shipping Services, Inc.] A 'charter-party' is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use. Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. In both cases, the charter-party provides for the hire of the vessel only, either for a determinate period of time or for a single or consecutive voyage, the ship owner to supply the ship's store, pay for the wages of the master of the crew, and defray the expenses for the maintenance of the ship. A common carrier is required to observe extraordinary diligence in its vigilance over the goods it transports. When goods placed in its care are lost or damaged, the carrier is presumed to have been at fault or to have acted negligently. Mere proof of delivery of the goods in good order to a common carrier, and of their arrival at the place of destination in bad order, makes out prima facie case against the common carrier, so that if no explanation is given as to how the loss, deterioration or destruction of the goods occurred, the common carrier must be held responsible. [Solidbank Corporation/Metrobank v. Tan] The Court finds no compelling reason to disallow the application of the provisions on common carriers if only to emphasize the fact that banking institutions have the duty to exercise the highest degree of diligence when transacting with the public. In one case, the Court did not hesitate to apply the doctrine of last clear chance (commonly used in transportation laws involving common

by Karell Marie Lascano

San Beda Law Manila

2012

Doctrines of Transportation Law

carriers) to a banking transaction where it adjudged the bank responsible for the encashment of a forged check.
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by Karell Marie Lascano

2012

[Sulpicio Lines, Inc. v. First LepantoTaisho Insurance Corp.] The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence, i.e., diligence of a good paterfamilias established in respect of the ordinary relations between members of society.