TRANSPORTATION LAWS

COMMON CARRIERS

Codal Definition

Art. 1732 NCC- “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.”

Complementary to the codal definition is Sec. 13, par.(b)

of the Public Service Act (CA. 146, as amended) it defines
“public service” to be--- “ 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, and done
for common carrier, railroad, street railway, subway motor
vehicle, either for freight or passenger, or steamship
line, ferries and transportation, engaged in 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 and wireless communication systems, wire or wireless
broadcasting stations and other similar public services.”

The concept of common carrier under Art. 1732 may be seen

to coincide neatly with the notion of ‘public service’,
under the Commonwealth Act No. 146, as amended, which at
least partially supplements the law on common carriers
provided for in the New Civil Code ( Philippine American
General Insurance Company vs. PKS Shipping Co., G.R. No.
149038, 401 SCRA 222).

Meaning of a Common Carrier

1. Questions in the bar examinations requiring the

determination of whether or not a carrier is common or
private have consistently followed the fact pattern in De
Guzman vs. CA, 168 SCRA 612, a case decided on December
22, 1968. Here, the respondent is a junk dealer, engaged
in the business of buying and selling bottles and scrap
metal in Pangasinan. Upon gathering sufficient quantities
of junk, he would bring the materials to Manila for
resale using 2 6-wheeler trucks. On the return trip, he
would load his vehicles with cargo of certain merchants
to Pangasinan and would charge freight rates lower than
the normal commercial rates. In one of those return
trips, petitioner, De Guzman, contracted the respondent
to deliver from Makati to Urdaneta, Pangasinan two
truckloads of milk. Only one truk reached its
destination. The other truck was hijacked somewhere in
Paniqui, Tarlac. Petitioner now wants to hold respondent
liable as a common carrier. The latter contends that it
cannot be liable as a common carrier because the
transporting of goods on the return trip is not his usual
occupation but a mere casual activity and a mere sideline
to his junk dealership and that it had no certificate of
public convenience normally granted by law to common
carriers. Is respondent a common carrier?

Yes, respondent is a common carrier. Art. 1732 makes

no distinction between one whose principal business is
the carrying of persons or goods or both, and one who
does the same only as an ancillary activity or a
sideline. The law does not likewise require that to be a
common carrier, a person or enterprise should conduct its
business in a regular or scheduled basis. A carrier may
be “common” even if its activities are merely episodic,
occasional or even if unscheduled. Neither does Art. 1732
distinguish between a carrier offering its services to
the general public, the general community or population
and one who offers services or solicits business only
from a narrow segment of the general population. Also, a
certificate of public convenience is not a requisite for
an enterprise to be a common carrier. (De Guzman vs. CA,
168 SCRA 612, December 22, 1968).A common carrier may be
considered as such despite its having a limited clientele
( Phil. American General Insurance Co., vs. PKS Shipping
Co., G.R. No. 149038, 401 SCRA 222)

The defense that a carrier cannot be considered common

because it has no publicly known route and terminals,
with a limited clientele and issues no tickets is
unavailing. The principal business of petitioner is that
of lighterage and drayage and that it offers its barges
for the transporting of goods by water for compensation
even if done on an irregular rather than scheduled manner
and with only limited clientele. A common carrier need
not have fixed publicly known routes. Neither does it
 have to maintain terminals or issue tickets. ( Asia
Lighterage and Shipping co., vs. CA. G.R. No. 147246, 409
SCRA 340).

2. A corporation which is a grantee of pipeline concession

to install operate pipelines and through such pipes is
engaged in the business of transporting and carrying
petroleum products for persons who want to employ its
services for compensation is a common carrier even if it
has a limited clientele. The term “common carrier” does
not only include entities using trains, trucks, ships and
the like. The definition of the term “common carrier”
under Art.1732 makes no distinction as to the means of
transporting, as long as it is by land, water or air.
( First Philippine Industrial Corporation vs. CA, G.R.
No. 125948, 300 SCRA 611).
3. A customs broker whose principal function is to prepare
the correct customs declaration and proper shipping
documents as required by the law is a common carrier. It
suffices that it undertakes to deliver the goods for
pecuniary consideration (A.F. Sanchez Brokerage Inc. vs.
CA, G.R. No. 147079, 447 SCRA 427). There is a greater
reason for holding a person who is a customs broker to be
a common carrier because the transportation of goods is
an integral part of business (Calvo vs. UCPB General
Insurance Co., Inc., 379 SCRA 510)
4. A travel agency engaged in the business of arranging,
facilitating, cooking, ticketing and accommodations of
travelers is neither a private nor a common carrier. It
does not undertake to transport people from one place to
another, its covenant with its customers being to make
travel arrangements for its customers which services
include procuring tickets and facilitating travel permits
or visas as well as booking customers for tours. Although
one’s ticket was bought through the efforts of the travel
agency is merely an agent of the airline with whom the
customer ultimately contracted for carriage. The contract
between the travel agency and the traveler is an ordinary
contract of services and not one of carriage (Crisostomo
vs. CA, G.R. No. 138334, 409 SCRA 528).
Test of a Common Carrier

Generally, the true test of a common carrier is the

carriage of passengers or goods, providing services to
those who opt to avail themselves of its transportation
services for a fee. If the carrier renders and offers its
services exclusively for a particular person or entity and
to on other, the carrier is not a common carrier. (FGU
Insurance Corp. vs. G.P. Sarmiento Trucking Corp.,386 SCRA
312).

In other words, we have to consider whether or not the

given undertaking is 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 (Asia Lighterage and Shipping, Inc.,
vs. CA, G.R. No. 147246 409 SCRA 340).

Specifically, the tests whether a party is a common carrier

of goods are:

(a) 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 persons generally as a business and not
as a causal occupation;
(b) He must undertake to carry goods of the kind to which
his business is confined;
(c) He must undertake to carry by the method by which his
business is conducted and over his established roads;
and
(d) The transportation must be for hire (First Philippine
Industrial Corporation vs. CA, 300 SCRA 611).

Effects of Being a Common Carrier

The degree of diligence required for common carriers is

“extraordinary diligence" in vigilance over goods and for
the safety of its passengers (Art. 1733, NCC).
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 and rights (Republic of the Philippines vs.
Lorenzo Shipping Corporation, G.R. 153536, 450 SCRA 550).
This rule does not apply to a private carrier. In the
absence of a stipulation or a legal provision, the private
carrier is deemed to observe only an ordinary diligence or
the diligence of a good father of a family. (Art. 1173,
NCC).

In case of loss, damage or deterioration of the goods or in

case of injury or death to passengers, the carrier is
presumed to have been at fault or to have acted negligently
(Arts. 1735 and 1756, NCC). A private carrier is not
burdened by this presumption.

However, the presumption of fault or negligence, may be

overturned by competent evidence showing that the common
carrier has observed extraordinary diligence over the goods
(Republic of the Philippines vs. Lorenzo Shipping
Corporation, G.R. 153563, 450 SCRA 550).

3. The duty of extraordinary diligence of a common carrier,

as a rule, is not subject to a reduction to another degree
of diligence. Exception: If the agreement to observe a
degree of diligence less that extraordinary diligence is
(a) in writing signed by the shipper or owner of the goods;
(b) supported by a valuable consideration other than the
service rendered; and (c) the stipulation is reasonable,
just and not contrary to public policy.

No reduction of diligence is allowed with respect to

passengers under Art.1757 of the NCC. Under this provision,
the responsibility of the carrier for the safety of the
passengers cannot be lessened by stipulation, by posting of
notices, or by statements in tickets. The exception is when
the passenger is carried gratuitously. Here a stipulation
limiting the common carrier’s liability for negligence is
valid, but not for willful acts of gross negligence (Art.
1758, NCC). This stipulation is not allowed when the
passenger is carried at a reduced fare. Reduction in fare
does not justify any limitation of the common carrier’s
liability.

4. In common carriers, a stipulation, exempting the common

carrier from liability because of the carrier’s
negligence or because of the negligence of its employees
is void as being contrary to public policy. However, in
case of private carriers, there could be a valid
stipulation exempting the carrier from its negligence or
from the negligence of its agents.
5. A common carrier is subject to regulation as a public
service entity. A private carrier is not regulated as
such. NOTE: Based on past bar examinations, when the
carrier is a land or air transportation it is easy to
determine when a common carrier becomes private. Take
Victory Liner, a common carrier as an example. One of its
buses is hired for an excursion. If there is complete
control as to its trip when to go and where to go, it is
like a private carrier. Hence the rules governing common
carriers will not apply. The diligence will not be
extraordinary and no presumption of negligence will
apply. A stipulation exempting the carrier from its
negligence or the negligence of its employees will be
held valid.

When does a ship which is a common carrier become a private

carrier? The old cases do not give us a definite criterion.
The doctrine laid down in Home Insurance Co. vs. American
Steamship Agencies, Inc., 23 SCRA 24, does not however,
give us a clear standard when a common carrier becomes a
private carrier. It simply says that when a “common carrier
undertakes to carry a special cargo for a special person it
becomes a private carrier.” Subsequent cases however, have
made this question easier to resolve. Later cases have held
that the mere chartering of a ship or maritime vessel does
not make it automatically a private carrier because one has
to still make a distinction between two kinds of charter
parties. This distinction was made in Planters Products,
Inc. vs. CA, 226 SCRA 476. It was held that a charter party
agreement is of two types: 1. Contract of affreightment
which involves the use of shipping space; and, 2. Bareboat
or demise charter where the whole ship is chartered and the
charterer has control of the ship and the crew who are
considered his servants. When the charter is bareboat, the
charterer is deemed to be the owner of the vessel in the
meantime. On the other hand, there are two kinds of
contract of affreightment: the charter and voyage charter.
Here the control of the ship is still with the ship owner
and the master and the crews are his employees. In a
contract of affreightment the carrier is still a common
carrier. CRITERION: CONTROL OF VESSEL AND CREW.
Duties Of Common Carriers

1. A common carrier is bound to carry passengers safely as

far as human care and foresight can provide using the
utmost diligence of very cautious persons with due
regard to all circumstances.(Art. 1755, NCC).Such duty
of a common carrier to provide safety to its passengers
obligates it not only during the course of the trip but
for as long as the passengers are within premises and
where they ought to be in the pursuance to the contract
of carriage (Light Rail Transit Authority vs. Natividad,
G.R. No. 145804, 397 SCRA 75). If a passenger reaches
his destination but he had to stay in the premises of
the carrier to claim his luggage and while waiting, he
was hit by a crane of the carrier, the latter is liable
because the deceased is still deemed to be a passenger.
(Aboitiz Shipping vs. CA, 179 SCRA 75). When a passenger
steps on the platform of a bus, he is already deemed a
passenger. The acceleration by the bus driver just as
the deceased stepped on the platform causing him to fall
and die is clearly the carrier’s liability. It is the
duty of the carrier to stop their conveyances for a
reasonable length of time to afford a passenger an
opportunity to board and alight. When a public utility
bus stops, it is in effect making an offer for the
public to ride. Hence, when that bus is not in motion.
There is no need for a prospective passenger to signal
his intention to board. (Dangwa Transportation Co. vs.
CA, 202 SCRA 575). When the victim entered the LRT
station after having purchased a “token” and he fell
from the platform while waiting for the train and was
struck by a train which was coming at the exact time he
fell, the victim should be treated as passenger. His
standing on the platform while waiting for the train was
where he was supposed to be (LRTA vs. Natividad, G.R.
No. 145804, 397 SCRA 75). Passengers who remain within
the premises of the carrier to retrieve their baggage
and stay therein for a reasonable time for the purpose
are treated as passengers injuries or death occasioned
by the carrier at that point in time, are liabilities of
the carrier under the contract of carriage (La Mallorca
vs. CA, 17 SCRA 739).In a similar vein, a passenger who
had disembarked from a vessel and returned after an hour
to retrieve a baggage which he left unintentionally and
died when hit by the crane used by a stevedoring company
 is still a passenger because he ws there for a purpose
and considering that it was the practice of the carrier
to offload goods and cargo an hour after arrival
(Aboitiz Shipping Corp. vs. CA, 179 SCRA 95).

2. The extraordinary responsibility of the common carrier

lasts form 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
consecutively, by the carrier to the consignee,or to the
person who has a right to receive them. It 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.
It continues to be operative even during the time the
goods are stored in a warehouse of the carrier at the
place of the 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 (Arts. 1736-1738, NCC). 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
the damage to, or destruction of, the goods entrusted
to it for safe 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. (Sulpicio Lines, Inc. vs. First Lepanto-Taisho
Insurance Corporation, G.R. 140349 June 29, 2005). For
example, if the carrier is equipped with the proper
knowledge of the nature of steel sheets in coils and of
the proper way of transporting them, the master of the
vessel and his crew should have undertaken precautionary
measures to avoid possible deterioration of the cargo.
(Belgian Overseas Chartering and Shipping N.V. vs.
Philippine First Insurance Co., Inc 383 SCRA 23).