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ARGIE ORTIZ DESENGAÑO

I. PRELIMINARY CONSIDERATIONS "There is, therefore, no room for NDC's


interpretation that the Code of Commerce
A. GOVERNING LAWS should apply only to domestic trade and not
ARTICLE 1766 of the New Civil Code: to foreign trade. Aside from the fact that the
Carriage of Goods by Sea Act (Com. Act No. 65)
Art. 1766. In all matters not regulated by does not specifically provide for the subject
this Code, the rights and obligations of of collision, said Act in no uncertain terms,
common carriers shall be governed by the restricts its application "to all contracts for
Code of Commerce and by special laws. the carriage of goods by sea to and from
Philippine ports in foreign trade." Under
CHUA YEK HONG VS. IAC, GR No. 74811, Sept.
Section I thereof, it is explicitly provided that
30, 1988: "In other words, the primary law is
"nothing in this Act shall be construed as
the Civil Code (Arts. 1732-1766) and in default
repealing any existing provision of the Code
thereof, the Code of Commerce and other
of Commerce which is now in force, or as
special laws are applied. Since the Civil Code
limiting its application." By such
contains no provisions regulating liability of
incorporation, it is obvious that said law not
ship owners or agents in the event of total
only recognizes the existence of the Code of
loss or destruction of the vessel, it is the
Commerce, but more importantly does not
provisions of the Code of Commerce, more
repeal nor limit its application."
particularly Article 587, that govern in this
case." NOTE: ARTICLE 1753 of the New Civil Code
provides:

Art. 1753. The law of the country to which


CARRIAGE OF GOODS BY SEA ACT
the goods are to be transported shall
Section 1 of COGSA provides: govern the liability of the common carrier
for their loss, destruction or deterioration.
"Be it enacted by the National Assembly of
the Philippines: EASTERN SHIPPING LINES, INC. VS. BPI/MS
INSURANCE CORP., GR 182864, Jan. 12, 2015:
Section 1. That the provisions of Public Act
Numbered Five hundred and twenty-one of According to the New Civil Code, the law
the Seventy-fourth Congress of the United of the country to which the goods are to
States, approved on April sixteenth, be transported shall govern the liability of
nineteen hundred and thirty-six, be the common carrier for their loss,
accepted, as it is hereby accepted to be destruction or deterioration. The Code takes
made applicable to all contracts for the precedence as the primary law over the
carriage of goods by sea to and from rights and obligations of common carriers
Philippine ports in foreign trade: Provided, with the Code of Commerce and COGSA
That nothing in the Act shall be construed applying suppletorily.
as repealing any existing provision of the
Code of Commerce which is now in force,
or as limiting its application." B. CONCEPT OF PUBLIC UTILITY AND PUBLIC
SERVICE
NATIONAL DEVELOPMENT COMPANY VS. CA,
GR L-49407, Aug. 19, 1988:

1 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

SECTION 13 (B) OF THE PUBLIC SERVICE ACT JG SUMMIT HOLDINGS, INC. V. CA, GR 124293,
PROVIDES: Sept. 24, 2003:

(b) The term "public service" includes every First. By nature, a shipyard is not a public
person that now or hereafter may own, utility. A "public utility" is "a business or
operate, manage, or control in the service engaged in regularly supplying the
Philippines, for hire or compensation, with public with some commodity or service of
general or limited clientele, whether public consequence such as electricity, gas,
permanent, occasional or accidental, and water, transportation, telephone or
done for general business purposes, any telegraph service."18 To constitute a public
common carrier, railroad, street railway, utility, the facility must be necessary for the
traction railway, sub-way motor vehicle, maintenance of life and occupation of the
either for freight or passenger, or both with residents. However, the fact that a business
or without fixed route and whether may be offers services or goods that promote public
its classification, freight or carrier service of good and serve the interest of the public
any class, express service, steamboat or does not automatically make it a public utility.
steamship line, pontines, ferries, and water Public use is not synonymous with public
craft, engaged in the transportation of interest. As its name indicates, the term
passengers or freight or both, shipyard, "public utility" implies public use and service
marine railways, marine repair shop, to the public. The principal determinative
[warehouse] wharf or dock, ice plant, ice- characteristic of a public utility is that of
refrigeration plant, canal, irrigation system, service to, or readiness to serve, an
gas, electric light, heat and power water indefinite public or portion of the public as
supply and power, petroleum, sewerage such which has a legal right to demand and
system, wire or wireless communications receive its services or commodities. Stated
system, wire or wireless broadcasting otherwise, the owner or person in control
stations and other similar public services: of a public utility must have devoted it to
Provided, however, That a person engaged such use that the public generally or that
in agriculture, not otherwise a public service, part of the public which has been served
who owns a motor vehicle and uses it and has accepted the service, has the right
personally and/or enters into a special to demand that use or service so long as it
contract whereby said motor vehicle is is continued, with reasonable efficiency and
offered for hire or compensation to a third under proper charges. Unlike a private
party or third parties engaged in agriculture, enterprise which independently determines
not itself or themselves a public service, for whom it will serve, a "public utility holds
operation by the latter for a limited time out generally and may not refuse legitimate
and for a specific purpose directly demand for service." Thus, in Iloilo Ice and
connected with the cultivation of his or Cold Storage Co. vs. Public Utility Board, this
their farm, the transportation, processing, Court defined "public use," viz: "Public use"
and marketing of agricultural products of means the same as "use by the public." The
such third party or third parties shall not be essential feature of the public use is that it
considered as operating a public service for is not confined to privileged individuals, but
the purposes of this Act. is open to the indefinite public. It is this
indefinite or unrestricted quality that gives
it its public character. In determining

2 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

whether a use is public, we must look not ARTICLE 12 SECTION 17 OF THE 1987
only to the character of the business to be CONSTITUTION PROVIDES:
done, but also to the proposed mode of
doing it. If the use is merely optional with SEC. 17. In times of national emergency, when
the public interest so requires, the State may,
the owners, or the public benefit is merely
during the emergency and under reasonable
incidental, it is not a public use, authorizing
terms prescribed by it, temporarily take over
the exercise of jurisdiction of the public
utility commission. There must be, in or direct the operation of any privately-owned
public utility or business affected with public
general, a right which the law compels the
interest.
owner to give to the general public. It is
not enough that the general prosperity of E. CONCEPT OF FRANCHISE AND CERTIFICATE
the public is promoted. Public use is not OF PUBLIC CONVIENCE
synonymous with public interest. The true
criterion by which to judge the character of RADIO COMMUNICATIONS OF THE
the use is whether the public may enjoy it PHILIPPINES, INC. VS. NTC, GR L-68729, May
by right or only by permission. 29, 1987:

C. CONSTITUTIONAL LIMITATION ON A franchise started out as a "royal privilege or


OPERATION OF PUBLIC UTILITIES (a) branch of the King's prerogative, subsisting
in the hands of a subject." This definition was
ARTICLE 12 SECTION 11 OF THE 1987 given by Finch, adopted by Blackstone, and
CONSTITUTION PROVIDES: accepted by every authority since (State v.
SEC. 11. No franchise, certificate, or any other Twin Village Water Co., 98 Me 214, 56 A 763
(1903)). Today, a franchise, being merely a
form of authorization for theoperation of a
privilege emanating from the sovereign power
public utility shall be granted except to citizens
of the state and owing its existence to a grant,
of the Philippines or to corporations or
associations organized under the laws of the is subject to regulation by the state itself by
virtue of its police power through its
Philippines, at least sixty per centum of whose
administrative agencies. We ruled in
capital is owned by such citizens; nor shall such
Pangasinan transportation Co., Inc. v. Public
franchise, certificate, or authorization be
exclusive in character or for a longer period Service Commission (70 Phil. 221) that: ...
statutes enacted for the regulation of public
than fifty years. Neither shall any such
utilities, being a proper exercise by the State of
franchise or right be granted except under the
condition that it shall be subject to its police power, are applicable not only to
those public utilities coming into existence
amendment, alteration, or repeal by the
Congress when the common good so requires. after its passage, but likewise to those already
established and in operation ...
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 II. GENERAL CONCEPTS
shall be limited to their proportionate share in
A. CONTRACT OF TRANSPORTATION IN
its capital, and all the executive and managing
GENERAL
officers of such corporation or association
must be citizens of the Philippines.

3 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

CRISOSTOMO VS. CA, GR 138334, Aug. 25, CATHAY PACIFIC AIRWAYS VS. REYES, GR
2003: 185891, June 26, 2013:

By definition, a contract of carriage or This Court has held that when an airline
transportation is one whereby a certain issues a ticket to a passenger confirmed on
person or association of persons obligate a particular flight, on a certain date, a
themselves to transport persons, things, or contract of carriage arises, and the
news from one place to another for a fixed passenger has every right to expect that he
price. Such person or association of persons would fly on that flight and on that date.
are regarded as carriers and are classified If he does not, then the carrier opens itself
as private or special carriers and common to a suit for breach of contract of carriage.
or public carriers. A common carrier is
defined under Article 1732 of the Civil Code GANZON VS. CA, GR L-48757, May 30, 1988:
as persons, corporations, firms or By the said act of delivery, the scraps were
associations engaged in the business of unconditionally placed in the possession and
carrying or transporting passengers or goods control of the common carrier, and upon
or both, by land, water or air, for their receipt by the carrier for
compensation, offering their services to the transportation, the contract of carriage was
public. deemed perfected.
B. PERFECTION C. COMMON CARRIER
BRITISH AIRWAYS, INC. VS. CA, GR 92288, Feb. i. STATUTORY DEFINITION
9, 1993:
Article 1732. Common carriers are persons,
In dealing with the contract of common corporations, firms or associations engaged
carriage of passengers for purpose of in the business of carrying or transporting
accuracy, there are two (2) aspects of the passengers or goods or both, by land, water,
same, namely: (a) the contract "to carry (at or air for compensation, offering their
some future time)," which contract is services to the public.
consensual and is necessarily perfected by
mere consent (See Article 1356, Civil Code SPOUSES CRUZ VS. SUN HOLIDAYS, INC., GR
of the perfected Philippines), and (b) the 186312, June 29, 2010:
contract "of carriage" or "of common
The above article makes no distinction
carriage" itself which should be considered
between one whose or both, and one who
as a real contract for not until the carrier
does such carrying only as an principal
is actually used can the carrier be said to
business activity is the carrying of persons
have already assumed the obligation of a
or goods ancillary activity (in local idiom, as
carrier. (Paras, Civil Code Annotated, Vol. V, p.
a sideline). Article 1732 also carefully avoids
429, Eleventh Ed.)
making any distinction between a person or
In the instant case, the contract "to carry" enterprise offering transportation service on
is the one involved which is consensual and a regular or scheduled basis and one offering
is perfected by perfected the mere consent of such service on an occasional, episodic or
the parties. unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its

4 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

services to the general public, i.e., the XXXXXX XXXXXXX XXXXXXXXX XXXXXXXXX
general community or population, and one XXXXXXXX XXXXXXXXXXXX XXXXXXX XXXXXX
who offers services or solicits business only
from a narrow segment of the general Nonetheless, the concept of a common
carrier embodied in Article 1732 of the Civil
population. We think that Article 1733
Code coincides neatly with the notion of
deliberately refrained from making such
public service under the Public Service Act,
distinctions.
which supplements the law on common
SPOUSES PERENA VS. SPOUSES ZARATE, GR carriers found in the Civil Code. Public service,
157917, Aug. 29, 2012: according to Section 13, paragraph (b) of the
Public Service Act, includes: x x x every
A carrier is a person or corporation who person that now or hereafter may own,
undertakes to transport or convey goods or operate, manage, or control in the
persons from one place to another, Philippines, for hire or compensation, with
gratuitously or for hire. The carrier is general or limited clientèle, whether
classified either as a private/special carrier permanent or occasional, and done for the
or as a common/public carrier. A private general business purposes, any common
carrier is one who, without making the carrier, railroad, street railway, traction
activity a vocation, or without holding railway, subway motor vehicle, either for
himself or itself out to the public as ready freight or passenger, or both, with or
to act for all who may desire his or its
without fixed route and whatever may be
services, undertakes, by special agreement its classification, freight or carrier service of
in a particular instance only, to transport any class, express service, steamboat, or
goods or persons from one place to another steamship line, pontines, ferries and water
either gratuitously or for hire. The provisions craft, engaged in the transportation of
on ordinary contracts of the Civil Code passengers or freight or both, shipyard,
govern the contract of private carriage.The marine repair shop, ice-refrigeration plant,
diligence required of a private carrier is only canal, irrigation system, gas, electric light,
ordinary, that is, the diligence of a good heat and power, water supply and power
father of the family. In contrast, a common petroleum, sewerage system, wire or
carrier is a person, corporation, firm or wireless communications systems, wire or
association engaged in the business of
wireless broadcasting stations and other
carrying or transporting passengers or goods similar public services. x x x.
or both, by land, water, or air, for
compensation, offering such services to the Given the breadth of the aforequoted
public. Contracts of common carriage are characterization of a common carrier, the
governed by the provisions on common Court has considered as common carriers
carriers of the Civil Code, the Public Service pipeline operators, custom brokers and
Act, and other special laws relating to warehousemen, and barge operators even if
transportation. A common carrier is required they had limited clientèle.
to observe extraordinary diligence, and is
TABACALERA INSURANCE CO. VS. NORTH
presumed to be at fault or to have acted
FRONT SHIPPING SERVICES, INC., GR 119197,
negligently in case of the loss of the effects
of passengers, or the death or injuries to May 16, 1997:
passengers.

5 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Upon the other hand, the term 'common or the simple expedient of entering into those
public carrier' is defined in Art. 1732 of the distinct agreements with clients.
Civil Code. The definition extends to carriers
either by land, air or water which hold iii. DISTINGUISHED FROM TOWAGE,
ARRASTRE, AND STEVEDORING
themselves out as ready to engage in carrying
goods or transporting passengers or both for TOWAGE - In towage, one vessel is hired to
compensation as a public employment and not bring another vessel to another place. Thus, a
as a casual occupation x x x x tugboat may be hired by a common carrier to
bring a barge to a port. In this case, the
ii. DISTINGUISHED FROM PRIVATE CARRIER
operator of the tugboat cannot be considered
PHILIPPINE AMERICAN GENERAL INSURANCE a common carrier. In maritime law, it refers to
COMPANY VS. PKS SHIPPING COMPANY, GR a service rendered to a vessel by towing for the
149038, April 9, 2003: mere purpose of expediting her voyage
without reference to any circumstances of
Much of the distinction between a danger. It is usually confined to vessels that
"common or public carrier" and a "private have received no injury or damage. (NOTE:
or special carrier" lies in the character of required to observe due diligence of a good
the business, such that if the undertaking is an father of a family.)
isolated transaction, not a part of the business
or occupation, and the carrier does not hold ARRASTRE - Arrastre refers to the hauling of
itself out to carry the goods for the general cargo, comprehends the handling of cargo on
public or to a limited clientele, although the wharf or between the establishment of thd
involving the carriage of goods for a fee, the consignee or shipper and the ship's tackle. The
person or corporation providing such service responsibility of the arrastre operator lasts
could very well be just a private carrier. A until the delivery of the cargo tobthe
typical case is that of a charter party which consignee. The service is usually performed by
includes both the vessel and its crew, such longshoremen. (NOTE: the degree of diligence
as in a bareboat or demise, where the of an arrastre is the same as that of common
charterer obtains the use and service of all or carrier and warehouseman this because of the
some part of a ship for a period of time or a nature of their business.)
voyage or voyages and gets the control of the
STEVEDORING - Stevedores involves the
vessel and its crew. Contrary to the conclusion
loading and unloading of coastwise calling at
made by the appellate court, its factual
findings indicate that PKS Shipping has the port.(NOTE: required to observe due
diligence of a good father of a family.)
engaged itself in the business of carrying
goods for others, although for a limited TRAVEL AGENCY - A travel agency is not a
clientele, undertaking to carry such goods common carrier. In many cases, the object of
for a fee. The regularity of its activities in contractual relation of a person who purchases
this area indicates more than just a casual a ticket through a travel agency is only the
activity on its part. Neither can the concept agency's service of arranging and facilitating
of a common carrier change merely because the booking, ticketing and accommodation in a
individual contracts are executed or entered package tour. In contrast, the object of the
into with patrons of the carrier. Such contract with a common carrier is
restrictive interpretation would make it easy transportation. The contract between the
for a common carrier to escape liability by
6 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

travel agency is a contract of service and not a FIRST PHILIPPINE INDUSTRIAL CORPORATION
contract of carriage. The diligence required of VS. CA, GR 125948, Dec. 29, 1998:
a travel agency is not extraordinary diligence
but that of a good father of a family. The test for determining whether a party is a
common carrier of goods is:
iv. TESTS TO DETERMINE COMMON CARRIER
1. He must be engaged in the business of
BASCOS VS. CA, GR 101089, April 7, 1993: carrying goods for others as a public
employment, and must hold himself out as
CIVIL LAW; COMMON CARRIERS; DEFINED; ready to engage in the transportation of
TEST TO DETERMINE COMMON CARRIER. — goods for person generally as a business
Article 1732 of the Civil Code defines a and not as a casual occupation;
common carrier as "(a) person, corporation
or firm, or association engaged in the 2. He must undertake to carry goods of the
business of carrying or transporting kind to which his business is confined;
passengers or goods or both, by land, water
3. He must undertake to carry by the
or air, for compensation, offering their
method by which his business is conducted
services to the public." The test to
and over his established roads; and
determine a common carrier is "whether the
given undertaking is a part of the test 4. The transportation must be for hire.
business engaged in by the carrier which he
has held out to the general public as his D. REGISTERED OWNER RULE, KABIT SYSTEM,
occupation rather than the quantity or AND BOUNDARY SYSTEM
extent of the business transacted." . . . The
EREZO VS. JEPTE, GR L-9605, Sept. 30, 1957:
holding of the Court in De Guzman vs. Court
of Appeals is instructive. In referring to In previous decisions, We already have held
Article 1732 of the Civil Code, it held thus: that the registered owner of a certificate of
"The above article makes no distinction public convenience is liable to the public for
between one whose principal business the injuries or damages suffered by
activity is the carrying of persons or goods passengers or third persons caused by the
or both, and one who does such carrying operation of said vehicle, even though the
only as an ancillary activity (in local idiom, same had been transferred to a third
as a "sideline"). Article 1732 also carefully person. (Montoya vs. Ignacio, 94 Phil., 182,
avoids making any distinction between a 50 Off. Gaz., 108; Roque vs. Malibay Transit
person or enterprise offering transportation Inc.,1 G. R. No. L- 8561, November 18,1955;
service on a regular or scheduled basis and Vda. de Medina vs. Cresencia, 99 Phil., 506,
one offering such service on an occasional, 52 Off. Gaz., [10], 4606.)The principle upon
episodic or unscheduled basis. Neither does which this doctrine is based is that in dealing
Article 1732 distinguished between a carrier with vehicles registered under the Public
offering its services to the "general public," Service Law, the public has the right to assume
i.e., the general community or population, or presume that the registered owner is the
and one who offers services or solicits actual owner thereof, for it would be
business only from a narrow segment of the difficult for the public to enforce the actions
general population. We think that Article that they may have for injuries caused to
1732 deliberately refrained from making such them by the vehicles being negligently
distinctions."
7 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

operated if the public should be required to owner might be. Well-settled is the rule that
prove who the actual owner is. How would the registered owner of the vehicle is liable for
the public or third persons know against quasi-delicts resulting from its use. Thus, even
whom to enforce their rights in case of if the vehicle has already been sold, leased, or
subsequent transfers of the vehicles? We do transferred to another person at the time the
not imply by this doctrine, however, that the vehicle figured in an accident, the registered
registered owner may not recover whatever vehicle owner would still be liable for damages
amount he had paid by virtue of his liability caused by the accident. The sale, transfer or
to third persons from the person to whom he lease of the vehicle, which is not registered
had actually sold, assigned or conveyed the with the Land Transportation Office, will not
vehicle. bind third persons aggrieved in an accident
involving the vehicle. The compulsory motor
VILLANUEVA VS. DOMINGO, GR 144274, Sept. vehicle registration underscores the
20, 2004:
importance of registering the vehicle in the
The main purpose of vehicle registration is name of the actual owner.
the easy identification of the owner who LIM VS. CA, GR 125817, Jan. 16, 2002:
can be held responsible for any accident,
damage or injury caused by the vehicle. The kabit system is an arrangement
Easy identification prevents inconvenience whereby a person who has been granted a
and prejudice to a third party injured by one certificate of public convenience allows other
who is unknown or unidentified. To allow a persons who own motor vehicles to operate
registered owner to escape liability by them under his license, sometimes for a fee
claiming that the driver was not authorized or percentage of the earnings. Although the
by the new (actual) owner results in the public parties to such an agreement are not
detriment the law seeks to avoid. outrightly penalized by law, the kabit system
is invariably recognized as being contrary to
Finally, the issue of whether or not the public policy and therefore void and
driver of the vehicle during the accident was inexistent under Art. 1409 of the Civil Code.
authorized is not at all relevant to
determining the liability of the registered In the early case of Dizon v. Octavio the
owner. This must be so if we are to comply Court explained that one of the primary
with the rationale and principle behind the factors considered in the granting of a
registration requirement under the motor certificate of public convenience for the
vehicle law. business of public transportation is the
financial capacity of the holder of the license,
FEB LEASING AND FINANCE CORPORATION VS. so that liabilities arising from accidents may
SPOUSES BAYLON, GR 181398, June 29, 2011:
be duly compensated. The kabit system
In accordance with the law on compulsory renders illusory such purpose and, worse,
motor vehicle registration, this Court has may still be availed of by the grantee to
consistently ruled that, with respect to the escape civil liability caused by a negligent
public and third persons, the registered owner use of a vehicle owned by another and
of a motor vehicle is directly and primarily operated under his license. If a registered
responsible for the consequences of its owner is allowed to escape liability by
operation regardless of who the actual vehicle proving who the supposed owner of the
vehicle is, it would be easy for him to
8 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

transfer the subject vehicle to another who public policy and, therefore, void and
possesses no property with which to inexistent under Article 1409 of the Civil
respond financially for the damage done. Code, It is a fundamental principle that the
Thus, for the safety of passengers and the court will not aid either party to enforce an
public who may have been wronged and illegal contract, but will leave them both
deceived through the baneful kabit system, where it finds them. Upon this premise, it
the registered owner of the vehicle is not was flagrant error on the part of both the
allowed to prove that another person has trial and appellate courts to have accorded
become the owner so that he may be thereby the parties relief from their predicament.
relieved of responsibility. Subsequent cases Article 1412 of the Civil Code denies them such
affirm such basic doctrine. It would seem aid. It provides:
then that the thrust of the law in enjoining
ART. 1412. if the act in which the unlawful
the kabit system is not so much as to
or forbidden cause consists does not
penalize the parties but to identify the
constitute a criminal offense, the following
person upon whom responsibility may be
rules shall be observed;
fixed in case of an accident with the end
view of protecting the riding public. The (1) when the fault, is on the part of both
policy therefore loses its force if the public contracting parties, neither may recover
at large is not deceived, much less involved. what he has given by virtue of the contract,
or demand the performance of the other's
LITA ENTERPRISES, INC. VS. IAC, GR L-64693,
April 27, 1984: undertaking.

The defect of inexistence of a contract is


Unquestionably, the parties herein operated
permanent and incurable, and cannot be
under an arrangement, comonly known as
cured by ratification or by prescription. As
the "kabit system", whereby a person who
has been granted a certificate of this Court said in Eugenio v. Perdido, "the
mere lapse of time cannot give efficacy to
convenience allows another person who
contracts that are null void."
owns motors vehicles to operate under such
franchise for a fee. A certificate of public The principle of in pari delicto is well known
convenience is a special privilege conferred not only in this jurisdiction but also in the
by the government . Abuse of this privilege United States where common law prevails.
by the grantees thereof cannot be Under American jurisdiction, the doctrine is
countenanced. The "kabit system" has been stated thus: "The proposition is universal
Identified as one of the root causes of the that no action arises, in equity or at law,
prevalence of graft and corruption in the from an illegal contract; no suit can be
government transportation offices. In the maintained for its specific performance, or
words of Chief Justice Makalintal, "this is a to recover the property agreed to be sold
pernicious system that cannot be too or delivered, or damages for its property
severely condemned. It constitutes an agreed to be sold or delivered, or damages
imposition upon the goo faith of the for its violation. The rule has sometimes
government. been laid down as though it was equally
Although not outrightly penalized as a universal, that where the parties are in pari
criminal offense, the "kabit system" is delicto, no affirmative relief of any kind will
be given to one against the other." Although
invariably recognized as being contrary to
9 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

certain exceptions to the rule are provided the driver performs activities which are
by law, We see no cogent reason why the usually necessary or desirable in the usual
full force of the rule should not be applied business or trade of the owner/operator.
in the instant case.
III. OBLIGATIONS OF THE COMMON CARRIER
VILLAMARIA VS. CA, GR 165881, April 19, 2006: IN A CONTRACT OF CARRIAGE OF GOODS

As early as 1956, the Court ruled in National A. VIGILANCE OVER THE GOODS
Labor Union v. Dinglasan that the jeepney
owner/operator-driver relationship under the i. DUTY TO EXERCISE EXTRAORDINARY
DILIGENCE
boundary system is that of employer-
employee and not lessor-lessee. This Art. 1733. Common carriers, from the
doctrine was affirmed, under similar factual nature of their business and for reasons of
settings, in Magboo v. Bernardo and Lantaco, public policy, are bound to observe
Sr. v. Llamas, and was analogously applied to extraordinary diligence in the vigilance over
govern the relationships between auto- the goods and for the safety of the
calesa owner/operator and driver, bus passengers transported by them, according
owner/operator and conductor, and taxi to all the circumstances of each case.
owner/operator and driver.
Such extraordinary diligence in the vigilance
The boundary system is a scheme by an over the goods is further expressed in
owner/operator engaged in transporting Articles 1734, 1735, and 1745, Nos. 5, 6,
passengers as a common carrier to primarily and 7, while the extraordinary diligence for
govern the compensation of the driver, that the safety of the passengers is further set
is, the latter’s daily earnings are remitted forth in Articles 1755 and 1756.
to the owner/operator less the excess of the
boundary which represents the driver’s ARTICLE 361. The merchandise shall be
compensation. Under this system, the transported at the risk and venture of the
owner/operator exercises control and shipper, if the contrary has not been expressly
supervision over the driver. It is unlike in stipulated.
lease of chattels where the lessor loses
As a consequence, all the losses and
complete control over the chattel leased but
deteriorations which the goods may suffer
the lessee is still ultimately responsible for
during the transportation by reason of
the consequences of its use. The
fortuitous event, force majeure, or the
management of the business is still in the
inherent nature and defect of the goods, shall
hands of the owner/operator, who, being
be for the account and risk of the shipper.
the holder of the certificate of public
convenience, must see to it that the driver Proof of these accidents is incumbent upon the
follows the route prescribed by the carrier.
franchising and regulatory authority, and the
rules promulgated with regard to the ARTICLE 363. Outside of the cases mentioned
business operations. The fact that the driver in the second paragraph of Article 361, the
does not receive fixed wages but only the carrier shall be obliged to deliver the goods
excess of the "boundary" given to the shipped in the same condition in which,
owner/operator is not sufficient to change according to the bill of lading, they were found
the relationship between them. Indubitably, at the time they were received, without any

10 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

damage or impairment, and failing to do so, to In this light, petitioner as a common carrier
pay the value which those not delivered may is mandated to observe, under Article 1733
have at the point and at the time at which their of the Civil Code, extraordinary diligence in
delivery should have been made. the vigilance over the goods it transports
according to all the circumstances of each
If those not delivered form part of the goods case. In the event that the goods are lost,
transported, the consignee may refuse to destroyed or deteriorated, it is presumed to
receive the latter, when he proves that he have been at fault or to have acted
cannot make use of them independently of the negligently, unless it proves that it observed
others. extraordinary diligence.
ARTICLE 364. If the effect of the damage The concept of extra-ordinary diligence was
referred to in Article 361 is merely a explained in Compania Maritima v. Court of
diminution in the value of the goods, the Appeals:
obligation of the carrier shall be reduced to the
payment of the amount which, in the The extraordinary diligence in the vigilance
judgement of experts, constitutes such over the goods tendered for shipment
difference in value. requires the common carrier to know and
to follow the required precaution for
ARTICLE 365. If, in consequence of the damage, avoiding damage to, or destruction of the
the goods are rendered useless for sale and goods entrusted to it for sale, carriage and
consumption for the purposes for which they delivery. It requires common carriers to
are properly destined, the consignee shall not render service with the greatest skill and
be bound o receive them, and he may have foresight and to use all reasonable means
them in the hands of the carrier, demanding of to ascertain the nature and characteristics of
the latter their value at the current price on goods tendered for shipment, and to
that day. exercise due care in the handling and
If among the demanded goods there should be stowage, including such methods as their
some pieces in the good condition and without nature requires.
any defect, the foregoing provision shall be ii. PRESUMPTION OF NEGLIGENCE
applicable with respect to those damaged and
the consignee shall receive those which are Art. 1735. In all cases other than those
sound, this segregation to be made by mentioned in Nos. 1, 2, 3, 4, and 5 of the
distinctand separate pieces and without preceding article, if the goods are lost,
dividing a single object, unless the consignee destroyed or deteriorated, common carriers
proves the impossibility of conveniently are presumed to have been at fault or to
making use of them in this form. have acted negligently, unless they prove
that they observed extraordinary diligence
The same rule shall be applied to merchandise as required in Article 1733.
in bales or packages, separating those parcels
which appear sound. DELSAN TRANSPORT LINES, INC. VS.
AMERICAN HOME ASSURANCE CORPORATION,
A.F. SACHEZ BROKERAGE, INC. VS. CA, GR GR 149019, Aug. 15, 2006:
147079, Dec. 21, 2004:

11 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Common carriers are bound to observe carrier, it is responsible for their loss. Under
extraordinary diligence in the vigilance over the Civil Code, (c)ommon carriers, from the
the goods transported by them. nature of their business and for reasons of
public policy, are bound to observe
They are presumed to have been at fault extraordinary diligence in the vigilance over
or to have acted negligently if the goods the goods x x x transported by them, and
are lost, destroyed or deteriorated. To this liability lasts from the time the goods
overcome the presumption of negligence in are unconditionally placed in the possession
case of loss, destruction or deterioration of of, and received by the carrier for
the goods, the common carrier must prove transportation until the same are delivered,
that it exercised extraordinary diligence. actually or constructively, to x x x the person
iii. DURATION OF LIABILITY who has a right to receive them, [7] unless
the loss is due to any of the excepted causes
Art. 1736. The extraordinary responsibility of under Article 1734 thereof.
the common carrier lasts from the time the
goods are unconditionally placed in the MACAM VS. CA, GR 125524, Aug. 25, 1999:
possession of, and received by the carrier We emphasize that the extraordinary
for transportation until the same are responsibility of the common carriers lasts
delivered, actually or constructively, by the until actual or constructive delivery of the
carrier to the consignee, or to the person cargoes to the consignee or to the person who
who has a right to receive them, without has a right to receive them. PAKISTAN BANK
prejudice to the provisions of Article 1738. was indicated in the bills of lading as
Art. 1737. The common carrier's duty to consignee whereas GPC was the notify party.
observe extraordinary diligence over the However, in the export invoices GPC was
goods remains in full force and effect even clearly named as buyer/importer. Petitioner
when they are temporarily unloaded or also referred to GPC as such in his demand
stored in transit, unless the shipper or letter to respondent WALLEM and in his
owner has made use of the right of complaint before the trial court. This
stoppage in transit. premise draws us to conclude that the
delivery of the cargoes to GPC as
Art. 1738. The extraordinary liability of the buyer/importer which, conformably with Art.
common carrier continues to be operative 1736 had, other than the consignee, the
even during the time the goods are stored right to receive them was proper.
in a warehouse of the carrier at the place
of destination, until the consignee has been SAMAR MINING COMPANY, INC. VS
advised of the arrival of the goods and has NORDEUTSCHER LLYOD, GR L-28673, Oct. 2,
had reasonable opportunity thereafter to 1984:
remove them or otherwise dispose of them. We find merit in appellants' stand. The
SARKIES TOURS PHILIPPINES, INC. VS. CA, GR validity of stipulations in bills of lading
108897, Oct. 2, 1997: exempting the carrier from liability for loss
or damage to the goods when the same are
Petitioners receipt of Fatimas personal not in its actual custody has been upheld
luggage having been thus established, it by Us in PHOENIX ASSURANCE CO., LTD. vs.
must now be determined if, as a common UNITED STATES LINES, 22 SCRA 674 (1968).

12 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Said case matches the present controversy Art. 1740. If the common carrier negligently
not only as to the material facts but more incurs in delay in transporting the goods, a
importantly, as to the stipulations contained natural disaster shall not free such carrier
in the bill of lading concerned. As if to from responsibility.
underline their awesome likeness, the goods
Art. 1742. Even if the loss, destruction, or
in question in both cases were destined for
deterioration of the goods should be caused
Davao, but were discharged from ship in
Manila, in accordance with their respective by the character of the goods, or the faulty
nature of the packing or of the containers,
bills of lading.
the common carrier must exercise due
iv. DEFENSES OF COMMON CARRIERS diligence to forestall or lessen the loss.

Art. 1734. Common carriers are responsible Art. 1743. If through the order of public
for the loss, destruction, or deterioration of authority the goods are seized or destroyed,
the goods, unless the same is due to any of the common carrier is not responsible,
the following causes only: provided said public authority had power to
issue the order.
(1) Flood, storm, earthquake, lightning, or
other natural disaster or calamity; DE GUZMAN VS. CA, GR L-48722, Dec. 22,
1988:
(2) Act of the public enemy in war, whether
international or civil; Common carriers, "by the nature of their
business and for reasons of public policy"
(3) Act of omission of the shipper or owner are held to a very high degree of care and
of the goods; diligence ("extraordinary diligence") in the
(4) The character of the goods or defects carriage of goods as well as of passengers.
in the packing or in the containers; The specific import of extraordinary diligence
in the care of goods transported by a
(5) Order or act of competent public common carrier is, according to Article
authority. 1733, "further expressed in Articles 1734,1735
and 1745, numbers 5, 6 and 7" of the Civil
Art. 1739. In order that the common carrier
Code.
may be exempted from responsibility, the
natural disaster must have been the Article 1734 establishes the general rule
proximate and only cause of the loss. that common carriers are responsible for
However, the common carrier must exercise the loss, destruction or deterioration of the
due diligence to prevent or minimize loss goods which they carry, "unless the same is
before, during and after the occurrence of f due to any of the following causes only:
lood, storm or other natural disaster in
order that the common carrier may be (1) Flood, storm, earthquake, lightning or other
exempted from liability for the loss, natural disaster or calamity;
destruction, or deterioration of the goods. (2) Act of the public enemy in war, whether
The same duty is incumbent upon the international or civil;
common carrier in case of an act of the
public enemy referred to in Article 1734, (3) Act or omission of the shipper or owner of
No. 2. the goods;

13 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

(4) The character-of the goods or defects in the before, during and after the occurrence of f
packing or-in the containers; and lood, storm or other natural disaster in
order that the common carrier may be
(5) Order or act of competent public authority. exempted from liability for the loss,
It is important to point out that the above destruction, or deterioration of the goods.
list of causes of loss, destruction or The same duty is incumbent upon the
deterioration which exempt the common common carrier in case of an act of the
carrier for responsibility therefor, is a closed public enemy referred to in Article 1734,
list. Causes falling outside the foregoing list, No. 2.
even if they appear to constitute a species of BASCOS VS.CA, GR 101089, April 7, 1993:
force majeure fall within the scope of Article
1735, which provides as follows: In all cases HIJACKING OF GOODS; CARRIER PRESUMED
other than those mentioned in numbers 1, NEGLIGENT; HOW CARRIER ABSOLVED FROM
2, 3, 4 and 5 of the preceding article, if the LIABILITY. — In De Guzman vs. Court of
goods are lost, destroyed or deteriorated, Appeals, the Court held that hijacking, not
common carriers are presumed to have being included in the provisions of Article
been at fault or to have acted negligently, 1734, must be dealt with under the
unless they prove that they observed provisions of Article 1735 and thus, the
extraordinary diligence as required in Article common carrier is presumed to have been
1733. at fault or negligent. To exculpate the
carrier from liability arising from hijacking,
Applying the above-quoted Articles 1734 he must prove that the robbers or the
and 1735, we note firstly that the specific hijackers acted with grave or irresistible
cause alleged in the instant case — the threat, violence, or force. This is in
hijacking of the carrier's truck — does not accordance with Article 1745 of the Civil
fall within any of the five (5) categories of Code which provides: "Art. 1745. Any of the
exempting causes listed in Article 1734. It following or similar stipulations shall be
would follow, therefore, that the hijacking considered unreasonable, unjust and
of the carrier's vehicle must be dealt with contrary to public policy . . . (6) That the
under the provisions of Article 1735, in other common carrier's liability for acts committed
words, that the private respondent as by thieves, or of robbers who do not act
common carrier is presumed to have been with grave or irresistible threat, violences or
at fault or to have acted negligently. This force, is dispensed with or diminished"; In
presumption, however, may be overthrown the same case, the Supreme Court also held
by proof of extraordinary diligence on the that: "Under Article 1745 (6) above, a
part of private respondent.
common carrier is held responsible — and will
1. FORTUITOUS EVENT not be allowed to divest or to diminish such
responsibility — even for acts of strangers like
Art. 1739. In order that the common carrier thieves or robbers, except where such
may be exempted from responsibility, the thieves or robbers in fact acted "with grave
natural disaster must have been the of irresistible threat, violence of force," We
proximate and only cause of the loss. believe and so hold that the limits of the
However, the common carrier must exercise duty of extraordinary diligence in the
due diligence to prevent or minimize loss vigilance over the goods carried are reached

14 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

where the goods are lost as a result of a obligation in a normal manner; and (d) the
robbery which is attended by "grave or obligor must be free from any participation in
irresistible threat, violence or force." the aggravation of the injury resulting to the
creditor. xxx
THE PHILIPPINE AMERICAN GENERAL
INSURANCE CO., INC. VS. MGG MARINE 2. PUBLIC ENEMY
SERVICES, INC., GR 135645, Mar. 8, 2002:
Art. 1734. Common carriers are responsible
In order that a common carrier may be for the loss, destruction, or deterioration of
absolved from liability where the loss, the goods, unless the same is due to any of
destruction or deterioration of the goods is the following causes only: (1) Flood, storm,
due to a natural disaster or calamity, it must earthquake, lightning, or other natural
further be shown that the such natural disaster or calamity; (2) Act of the public
disaster or calamity was the proximate and enemy in war, whether international or civil;
only cause of the loss; must be an entire (3) Act of omission of the shipper or owner
exclusion of human agency from the cause of of the goods; (4) The character of the goods
the injury of the loss. there Moreover, even in or defects in the packing or in the
cases where a natural disaster is the proximate containers; (5) Order or act of competent
and only cause of the loss, a common carrier public authority.
is still required to exercise due diligence to
Art. 1739. In order that the common carrier
prevent or minimize loss before, during and
may be exempted from responsibility, the
after the occurrence of the natural disaster,
for it to be exempt from liability under the natural disaster must have been the
proximate and only cause of the loss.
law for the loss of the goods. If a common
However, the common carrier must exercise
carrier fails to exercise due diligence--or that
due diligence to prevent or minimize loss
ordinary care which the circumstances of the
particular case demand --to preserve and before, during and after the occurrence of f
lood, storm or other natural disaster in
protect the goods carried by it on the
order that the common carrier may be
occasion of a natural disaster, it will be
exempted from liability for the loss,
deemed to have been negligent, and the loss
will not be considered as having been due to a destruction, or deterioration of the goods.
The same duty is incumbent upon the
natural disaster under Article 1734 (1).
common carrier in case of an act of the
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx public enemy referred to in Article 1734,
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx No. 2.

An event is considered fortuitous if the NOTE: The term "pulic enemy, in its general
following elements concur: xxx (a) the cause of acceptation presupposes the existence of an
the unforeseen and unexpected occurrence, or actual state of war, and refers to the
the failure of the debtor to comply with his government of a foreign nation at war iwththe
obligations, must be independent of human country to which the carrier belongs, though
will; (b) it must be impossible to foresee the not necessarily with that to which the owner of
event which constitutes the caso fortuito, or if the goods owes allegiance. Thieves, rioters,
it can be foreseen, it must be impossible to robbers, and insurrectionists, though at war
avoid; (c) the occurrence must be such as to with social order, are not in a legal sense
render it impossible for the debtor to fulfill his classed as public enemy but are merely private

15 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

depredators for whose acts acarrier is inherent nature and defect of the goods, shall
answerable, xxx pirates on the high seas, be for the account and risk of the shipper.
however, stand as exception to this rule. They
are considered the enemies of all civilized Proof of these accidents is incumbent upon the
carrier.
nations and indeed of human race. xxx the
generally accepted definition of public enemy PLANTERS PRODUCTS, INC. VS. CA, GR 101503,
does not embrace rebels in insurrection Sept. 15, 1993:
against their own government, (except when
they qualifies as belligerents under Article 1734 of the New Civil Code provides
international law and entitled to billigerent that common carriers are not responsible
rights.) xxx war, therefore,may be either for the loss, destruction or deterioration of
international or civil, foreign or domestic, and the goods if caused by the charterer of the
when ever an armed contest assumes such goods or defects in the packaging or in the
proportions, the combatants there8n come containers. The Code of Commerce also
within the legal comprehension of the term provides that all losses and deterioration
public enemy." which the goods may suffer during the
transportation by reason of fortuitous event,
3. INHERENT CHARACTER OF THE GOODS force majeure, or the inherent defect of the
goods, shall be for the account and risk of
Art. 1734. Common carriers are responsible
the shipper, and that proof of these
for the loss, destruction, or deterioration of
accidents is incumbent upon the carrier. The
the goods, unless the same is due to any of
the following causes only: carrier, nonetheless, shall be liable for the
loss and damage resulting from the
(1) Flood, storm, earthquake, lightning, or preceding causes if it is proved, as against
other natural disaster or calamity; him, that they arose through his negligence
or by reason of his having failed to take
(2) Act of the public enemy in war, whether the precautions which usage has established
international or civil; among careful persons.
(3) Act of omission of the shipper or owner 4. IMPROPER PACKING
of the goods;
Art. 1742. Even if the loss, destruction, or
(4) The character of the goods or defects deterioration of the goods should be caused
in the packing or in the containers;
by the character of the goods, or the faulty
(5) Order or act of competent public nature of the packing or of the containers,
authority. the common carrier must exercise due
diligence to forestall or lessen the loss.
ARTICLE 361. The merchandise shall be
transported at the risk and venture of the A.F. SANCHEZ BROKERAGE, INC. VS. CA, GR
shipper, if the contrary has not been expressly 147079, Dec. 21, 2004:
stipulated. While paragraph No. 4 of Article 1734 of
As a consequence, all the losses and the Civil Code exempts a common carrier
deteriorations which the goods may suffer from liability if the loss or damage is due to
during the transportation by reason of the character of the goods or defects in the
fortuitous event, force majeure, or the packing or in the containers, the rule is that

16 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

if the improper packing is known to the We cannot sustain the theory of caso
carrier or his employees or is apparent upon fortuito. In the courts below, the petitioner's
ordinary observation, but he nevertheless defense was that the loss of the scraps was
accepts the same without protest or due to an "order or act of competent public
exception notwithstanding such condition, he authority," and this contention was correctly
is not relieved of liability for the resulting passed upon by the Court of Appeals which
damage. ruled that:

If the claim of petitioner that some of the ... In the second place, before the appellee
cartons were already damaged upon Ganzon could be absolved from
delivery to it were true, then it should responsibility on the ground that he was
naturally have received the cargo under ordered by competent public authority to
protest or with reservations duly noted on unload the scrap iron, it must be shown
the receipt issued by PSI. But it made no that Acting Mayor Basilio Rub had the
such protest or reservation. power to issue the disputed order, or that
it was lawful, or that it was issued under
CALVO VS. GENERAL INSURANCE CO., INC., GR legal process of authority. The appellee
148496, Mar. 19, 2002: failed to establish this. Indeed, no authority
For this provision to apply, the rule is that or power of the acting mayor to issue such
if the improper packing or, in this case, the an order was given in evidence. Neither has
defect/s in the container, is/are known to it been shown that the cargo of scrap iron
the carrier or his employees or apparent belonged to the Municipality of Mariveles.
upon ordinary observation, but he xxx
nevertheless accepts the same without Now the petitioner is changing his theory
protest or exception notwithstanding such to caso fortuito. Such a change of theory
condition, he is not relieved of liability for on appeal we cannot, however, allow. In any
damage resulting therefrom. In this case, case, the intervention of the municipal
petitioner accepted the cargo without officials was not In any case, of a character
exception despite the apparent defects in that would render impossible the fulfillment
some of the container vans. Hence, for by the carrier of its obligation. The petitioner
failure of petitioner to prove that she was not duty bound to obey the illegal order to
exercised extraordinary diligence in the dump into the sea the scrap iron. Moreover,
carriage of goods in this case or that she is there is absence of sufficient proof that the
exempt from liability, the presumption of issuance of the same order was attended
negligence as provided under Art. 1735 holds. with such force or intimidation as to
5. ORDER OF PUBLIC AUTHORITY completely overpower the will of the
petitioner's employees. The mere difficulty in
Art. 1743. If through the order of public the fullfilment of the obligation is not
authority the goods are seized or destroyed, considered force majeure. We agree with
the common carrier is not responsible, the private respondent that the scraps could
provided said public authority had power to have been properly unloaded at the shore
issue the order. or at the NASSCO compound, so that after
the dispute with the local officials concerned
GANZON VS. CA, GR L-48757, May 30, 1988:

17 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

was settled, the scraps could then be delivered goods to a degree less than extraordinary
in accordance with the contract of carriage. diligence shall be valid, provided it be:

6. CONTRIBUTORY NEGLIGENCE OF THE (1) In writing, signed by the shipper or


SHIPPER owner;

Art. 1741. If the shipper or owner merely (2) Supported by a valuable consideration
contributed to the loss, destruction or other than the service rendered by the
deterioration of the goods, the proximate common carrier; and
cause thereof being the negligence of the
(3) Reasonable, just and not contrary to
common carrier, the latter shall be liable in
public policy.
damages, which however, shall be equitably
reduced. Art. 1748. An agreement limiting the
TABACALERA INSURANCE CO. VS. NORTH common carrier's liability for delay on
account of strikes or riots is valid.
FRONT SHIPPING SERVICES, INC., GR 119197:
Art. 1749. A stipulation that the common
However, we cannot attribute the
carrier's liability is limited to the value of
destruction, loss or deterioration of the
the goods appearing in the bill of lading,
cargo solely to the carrier. We find the
consignee Republic Flour Mills Corporation unless the shipper or owner declares a
greater value, is binding.
guilty of contributory negligence. It was
seasonably notified of the arrival of the Art. 1750. A contract fixing the sum that
barge but did not immediately start the may be recovered. by the owner or shipper
unloading operations. No explanation was for the loss, destruction, or deterioration of
proffered by the consignee as to why there the goods is valid, if it is reasonable and
was a delay of six (6) days. Had the just under the circumstances, and has been
unloading been commenced immediately fairly and freely agreed upon.
the loss could have been completely
avoided or at least minimized. As testified EDGAR COKIALONG SHIPPING LINES, INC. VS.
to by the chemist who analyzed the corn UCPB GENERAL INSURANCE COMPANY, INC.,
samples, the mold growth was only at its GR 146018, June 25, 2003:
incipient stage and could still be arrested by
In the present case, the stipulation limiting
drying. The corn grains were not yet toxic
petitioners liability is not contrary to public
or unfit for consumption. For its
policy. In fact, its just and reasonable
contributory negligence, Republic Flour Mills
character is evident. The
Corporation should share at least 40% of the
shippers/consignees may recover the full
loss.
value of the goods by the simple expedient
v. STIPULATION LIMITING LIABILITY OF of declaring the true value of the shipment
CARRIER in the Bill of Lading. Other than the
payment of a higher freight, there was
Art. 1744. A stipulation between the nothing to stop them from placing the actual
common carrier and the shipper or owner value of the goods therein. In fact, they
limiting the liability of the former for the committed fraud against the common
loss, destruction, or deterioration of the carrier by deliberately undervaluing the goods

18 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

in their Bill of Lading, thus depriving the carrier or damage to or in connection with the
of its proper and just transport fare. transportation of goods in an amount
exceeding $500 per package lawful money
Concededly, the purpose of the limiting of the United States, or in case of goods
stipulation in the Bill of Lading is to protect not shipped in packages, per customary
the common carrier. Such stipulation obliges freight unit, or the equivalent of that sum
the shipper/consignee to notify the common in other currency, unless the nature and
carrier of the amount that the latter may value of such goods have been declared by
be liable for in case of loss of the goods. the shipper before shipment and inserted in
The common carrier can then take bill of lading. This declaration if embodied
appropriate measures -- getting insurance, if in the bill of lading shall be prima facie
needed, to cover or protect itself. This evidence, but all be conclusive on the carrier.
precaution on the part of the carrier is
reasonable and prudent. Hence, a By agreement between the carrier, master
shipper/consignee that undervalues the real or agent of the carrier, and the shipper
worth of the goods it seeks to transport another maximum amount than that
does not only violate a valid contractual mentioned in this paragraph may be fixed:
stipulation, but commits a fraudulent act Provided, That such maximum shall not be
when it seeks to make the common carrier less than the figure above named. In no
liable for more than the amount it declared in event shall the carrier be Liable for more
the bill of lading. than the amount of damage actually
sustained.
EASTERN SHIPPING LINES, INC. VS. BPI/MS
INSURANCE CORP., GR 182864, Jan. 12, 2015: xxx xxx xxx

The New Civil Code provides that a Article 1749 of the New Civil Code also allows
stipulation limiting a common carrier’s the limitations of liability in this wise:
liability to the value of the goods appearing
Art. 1749. A stipulation that the common
in the bill of lading is binding, unless the
carrier's liability as limited to the value of
shipper or owner declares a greater value.
the goods appearing in the bill of lading,
In addition, a contract fixing the sum that
may be recovered by the owner or shipper unless the shipper or owner declares a greater
value, is binding.
for the loss, destruction, or deterioration of
the goods is valid, if it is reasonable and just It is to be noted that the Civil Code does
under the circumstances, and has been fairly not of itself limit the liability of the common
and freely agreed upon. carrier to a fixed amount per package
EASTERN SHIPPING LINES, INC. VS. IAC, GR L- although the Code expressly permits a
stipulation limiting such liability. Thus, the
69044, May 29, 1987:
COGSA which is suppletory to the provisions
Petitioner Carrier avers that its liability if of the Civil Code, steps in and supplements
any, should not exceed US $500 per the Code by establishing a statutory
package as provided in section 4(5) of the provision limiting the carrier's liability in the
COGSA, which reads: absence of a declaration of a higher value
of the goods by the shipper in the bill of
(5) Neither the carrier nor the ship shall in lading. The provisions of the Carriage of
any event be or become liable for any loss

19 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Goods by.Sea Act on limited liability are as their baggage but "to avail of our V-cargo
much a part of a bill of lading as though service " (Exh. "1"). It is likewise to be
physically in it and as much a part thereof as noted that there is nothing in the evidence
though placed therein by agreement of the to show the actual value of the goods allegedly
parties. lost by petitioner.

ONG YIU VS. CA, GR L-40597, June 29, 1979: CITADEL LINES, INC. VS. CA, GR 88092, April 25,
1990:
petitioner argues that there is nothing in
the evidence to show that he had actually Basic is the rule, long since enshrined as a
entered into a contract with PAL limiting the statutory provision, that a stipulation
latter's liability for loss or delay of the limiting the liability of the carrier to the
baggage of its passengers, and that Article value of the goods appearing in the bill of
1750* of the Civil Code has not been lading, unless the shipper or owner declares
complied with. a greater value, is binding. Further, a
contract fixing the sum that may be recovered
While it may be true that petitioner had by the owner or shipper for the loss,
not signed the plane ticket (Exh. "12"), he destruction or deterioration of the goods is
is nevertheless bound by the provisions valid, if it is reasonable and just under the
thereof. "Such provisions have been held to circumstances, and has been fairly and freely
be a part of the contract of carriage, and agreed upon. The CONSIGNEE itself admits in
valid and binding upon the passenger its memorandum that the value of the
regardless of the latter's lack of knowledge goods shipped does not appear in the bills
or assent to the regulation". It is what is of lading. Hence, the stipulation on the
known as a contract of "adhesion", in carrier's limited liability applies. There is no
regards which it has been said that question that the stipulation is just and
contracts of adhesion wherein one party reasonable under the circumstances and
imposes a ready made form of contract on have been fairly and freely agreed upon. In
the other, as the plane ticket in the case Sea-land Service, Inc. vs. Intermediate
at bar, are contracts not entirely prohibited. Appellate Court, et al. we there explained
The one who adheres to the contract is in what is a just and reasonable, and a fair
reality free to reject it entirely; if he and free, stipulation, in this wise: . . . That said
adheres, he gives his consent. And as held stipulation is just and reasonable arguable
in Randolph v. American Airlines, 103 Ohio from the fact that it echoes Art. 1750 itself
App. 172, 144 N.E. 2d 878; Rosenchein vs. in providing a limit to liability only if a
Trans World Airlines, Inc., 349 S.W. 2d 483, greater value is not declared for the
"a contract limiting liability upon an agreed
shipment in the bill of lading. To hold
valuation does not offend against the policy otherwise would amount to questioning the
of the law forbidding one from contracting justice and fairness of that law itself, and
against his own negligence. this the private respondent does not pretend
Considering, therefore, that petitioner had to do. But over and above that
failed to declare a higher value for his consideration the just and reasonable
baggage, he cannot be permitted a recovery character of such stipulation is implicit in it
in excess of P100.00.Besides, passengers are giving the shipper or owner the option of
advised not to place valuable items inside avoiding accrual of liability limitation by the

20 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

simple and surely far from onerous reasonable, just and in consonance with
expedient of declaring the nature and value public policy.
of the shipment in the bill of lading. And
since the shipper here has not been heard SAMAR MINING COMPANY, INC. VS.
NORDEUTSCHER LLOYD, GR L-28673, Oct. 23,
to complain of having been "rushed,"
1984:
imposed upon or deceived in any significant
way into agreeing to ship the cargo under "Finding the above stipulations not contrary
a bill of lading carrying such a stipulation — to law, morals, good customs, public order
in fact, it does not appear, that said party or public policy, We sustained their validity
has been heard from at all insofar as this 13 Applying said stipulations as the law
dispute is concerned — there is simply no between the parties in the aforecited case".
ground for assuming that its agreement
thereto was not as the law would require, SERVANDO VS. PHILIPPINE STEAM
freely and fairly sought and well. NAVIGATION CO., GR L-36481-2, Oct. 23, 1982:

The bill of lading shows that 120 cartons It should be pointed out, however, that in
weigh 2,978 kilos or 24.82 kilos per carton. the bills of lading issued for the cargoes in
Since 90 cartons were lost and the weight of question, the parties agreed to limit the
said cartons is 2,233.80 kilos, at $2.00 per kilo responsibility of the carrier for the loss or
the CARRIER's liability amounts to only damage that may be caused to the
US$4,467.60. shipment by inserting therein the following
stipulation:
1. REQUISITES
Clause 14. Carrier shall not be responsible
Art. 1744. A stipulation between the for loss or damage to shipments billed
common carrier and the shipper or owner 'owner's risk' unless such loss or damage is
limiting the liability of the former for the due to negligence of carrier. Nor shall
loss, destruction, or deterioration of the carrier be responsible for loss or damage
goods to a degree less than extraordinary caused by force majeure, dangers or
diligence shall be valid, provided it be: accidents of the sea or other waters; war;
public enemies; . . . fire . ...
(1) In writing, signed by the shipper or
owner; We sustain the validity of the above
stipulation; there is nothing therein that is
(2) Supported by a valuable consideration
contrary to law, morals or public policy.
other than the service rendered by the
common carrier; and Appellees would contend that the above
stipulation does not bind them because it
(3) Reasonable, just and not contrary to
public policy. was printed in fine letters on the back-of
the bills of lading; and that they did not
Art. 1751. The fact that the common carrier sign the same. This argument overlooks the
has no competitor along the line or route, pronouncement of this Court in Ong Yiu vs.
or a part thereof, to which the contract Court of Appeals, promulgated June 29, 1979,
refers shall be taken into consideration on where the same issue was resolved in this
the question of whether or not a stipulation wise:
limiting the common carrier's liability is

21 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

While it may be true that petitioner had (6) That the common carrier's liability for
not signed the plane ticket (Exh. '12'), he is acts committed by thieves, or of robbers
nevertheless bound by the provisions who do not act with grave or irresistible
thereof. 'Such provisions have been held to threat, violence or force, is dispensed with
be a part of the contract of carriage, and or diminished;
valid and binding upon the passenger
(7) That the common carrier is not
regardless of the latter's lack of knowledge
or assent to the regulation'. It is what is responsible for the loss, destruction, or
deterioration of goods on account of the
known as a contract of 'adhesion', in
defective condition of the car, vehicle, ship,
regards which it has been said that contracts
airplane or other equipment used in the
of adhesion wherein one party imposes a
ready made form of contract on the other, contract of carriage.
as the plane ticket in the case at bar, are 3. EFFECT OF DELAY
contracts not entirely prohibited. The one
who adheres to the contract is in reality free Art. 1747. If the common carrier, without
to reject it entirely; if he adheres, he gives just cause, delays the transportation of the
his consent." (Tolentino, Civil Code, Vol. IV, goods or changes the stipulated or usual
1962 Ed., p. 462, citing Mr. Justice J.B.L. Reyes, route, the contract limiting the common
Lawyer's Journal, Jan. 31, 1951, p. 49). carrier's liability cannot be availed of in case
of the loss, destruction, or deterioration of
2. INVALID STIPULATIONS the goods.
Art. 1745. Any of the following or similar 4. RULE ON PRESUMPTION OF NEGLIGENCE
stipulations shall be considered DESPITE STIPULATION
unreasonable, unjust and contrary to public
policy: Art. 1752. Even when there is an agreement
limiting the liability of the common carrier
(1) That the goods are transported at the in the vigilance over the goods, the common
risk of the owner or shipper; carrier is disputably presumed to have been
negligent in case of their loss, destruction or
(2) That the common carrier will not be
deterioration.
liable for any loss, destruction, or
deterioration of the goods; B. OTHER OBLIGATIONS
(3) That the common carrier need not i. DUTY TO ACCEPTS GOODS
observe any diligence in the custody of the
goods; 1. GROUNDS FOR VALID REFUSAL TO ACCEPTS
GOODS
(4) That the common carrier shall exercise
a degree of diligence less than that of a Indeed, common carriers cannot lawfully
good father of a family, or of a man of decline to accept a particular class of goods
ordinary prudence in the vigilance over the unless it appears that for some sufficient
movables transported; reason the discrimination against the traffic is
such goods is reasonable and necessary. Mere
(5) That the common carrier shall not be whim or prejudice will not suffice. The
responsible for the acts or omission of his instances when the carrier may validly refuse
or its employees; to accept goods include the following:

22 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

(1) When the goods sought to be transported Art. 370. If a period has been fixed for the
are dangerous objects, or substances including delivery of the goods, it must be made within
dynamites and other explosives; such time, and, for failure to do so, the carrier
shall pay the indemnity stipulated in the bill of
(2) The goods are unfit for transportation; lading, neither the shipper nor the consignee
(3) Acceptance would result in overloading; being entitled to anything else.

(4) The goods are considered contrabands or If no indemnity has been stipulated and the
illegal goods; delay exceeds the time fixed in the bill of
lading, the carrier shall be liable for the
(5) Goods are injurious to health; damages which the delay may have caused.

(6) Goods will be exposed to untoward danger Art. 371. In case of delay through the fault of
like flood, capture by enemies and the like; the carrier, referred to in the preceding
articles, the consignee may leave the goods
(7) Goods like livestock will be exposed to
transported in the hands of the former,
diseases;
advising him thereof in writing before their
(8) Strike; arrival at the point of destination.

(9) Failure to tender goods on time. When this abandonment takes place,the
carrier shall pay the full value of the goods as if
ii. DUTY TO DELIVER GOODS they had been lost or mislaid.

1. TIME OF DELIVERY If the abandonment is not made, the


indemnification for losses and damages by
ARTICLE 358. If there is no period fixed for the
reason of the delay cannot exceed the current
delivery of the goods the carrier shall be
price whichthe goods transported would have
boundto forward them in the firstshipment of
had on the day and at the place in which they
the sameor similar goods which he may make
should have been delivered; this same rule is
point where he must deliver them; and should
to be observed in all other cases in which this
he not do so, the damages caused by the delay
indemnity may be due.
should be for his account.
Art. 372. The value of the goods which the
2. CONSEQUENCES OF DELAY
carrier must pay in cases if the loss or
Art. 1740. If the common carrier negligently misplacement shall be determined in
incurs in delay in transporting the goods, a accordance with that declared in the bill of
natural disaster shall not free such carrier lading, the shipper not being allowed to
from responsibility. present proof that among the goods declared
therein there were articles of greater value and
Art. 1747. If the common carrier, without money.
just cause, delays the transportation of the
goods or changes the stipulated or usual Horses, vehicles, vessels, equipment and all
route, the contract limiting the common other principal and accessory means of
carrier's liability cannot be availed of in case transportation shall be especially bound in
of the loss, destruction, or deterioration of favor of the shipper, although with respect to
the goods. railrowds said liability shall be subordinated to
the provisions of the laws of concession with

23 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

respect to the property, and to what this Code delivered to the carrier, provided that at the
established as to manner and form of effecting time of ordering the change of consignee the
seizures and attchments against said bill of lading signed by the carrier, if one has
companies. been issued, be returned to him, in exchange
for another wherein the novation of the
Art. 373. The carrier who makes the delivery of contract appears.
the merchandise to the consignee by virtue of
combined agreements or services with other The expenses which this change of
carriers shall assume the obligations of those consignment occasions shall be for the account
who preceded him in the conveyance, of the shipper.
reserving his right to proceed against the latter
4. TO WHOM DELIVERY SHALL BE MADE
if he was not the party directly responsible for
the fault which gave rise to the claim of the Art. 368. The carrier must deliver to the
shipper or consignee. consignee, without any delay or obstruction,
the goods which he may have received, by the
The carrier who makes the delivery shall
mere fact of being named in the bill of lading
likewise acquire all thr actionsand rights of
those who proceded him in the conveyance. to receive them; and if he does not do so, he
shall be liable for the damages which may be
The shipper and the consignee shall have an caused thereby.
immediate right of action against the carrier
Art. 369. If the consignee cannot be found at
who executed the transportation contract, or
the residence indicated in the bill of lading, or
against the other carriers who may have
received the goods transported without if he refuses to pay the transportation charges
abnd expenses, or if he refuses to receive the
reservation.
goods, the municipal judge, where there is
However, the reservation made by the latter none of the first instance, shall provide for
shall not relieve them frm the responsibilities their deposit at the disposal of the shipper, this
which they may have incurred by their own deposit producing all the effects of delivery
acts. without prejudice to third parties with a better
right.
Art. 374. The consignee to whom the shipment
was made may not defer the payment of the IV. OBLIGATIONS OF THE COMMON CARRIER
expenses and transportation charges of the IN A CONTRACT OF CARRIAGE OF PASSENGERS
goods they receive after the lapse of twenty-
A. SAFETY OF PASSENGERS
four hours following their delivery; and in case
of delay in this payment, the carrier may i. DUTY TO OBSERVE UTMOST DILIGENCE
demand the judicial sale of the goods
transported in an amount necessary to cover Art. 1755. A common carrier is bound to
the cost of transportation and the expenses carry the passengers safely as far as human
incurred. care and foresight can provide, using the
utmost diligence of very cautious persons,
3. PLACE OF DELIVERY with a due regard for all the circumstances.
Art. 360. The shipper, without changing the ISAAC VS. A.L. AMMEN TRASNPORTATION CO.,
place where the delivery is to be made, may INC., GR L-9671, Aug. 23, 1957:
change the consignment of the goods which he

24 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

We believe that the law concerning the extraordinary diligence required of common
liability of a common carrier has now carriers is calculated to protect the
suffered a substantial modification in view passengers from the tragic mishaps that
of the innovations introduced by the new frequently occur in connection with rapid
Civil Code. These innovations are the ones modern transportation. This high standard
embodied in Articles 1733, 1755 and 1756 in of care is imperatively demanded by the
so far as the relation between a common precariousness of human life and by the
carrier and its passengers is concerned, which, consideration that every person must in
for ready reference, we quote hereunder: every way be safeguarded against all injury.
(Report of the Code Commission, pp. 35-
ART. 1733. Common carriers, from the 36)" (Padilla, Civil Code of the Philippines,
nature of their business and for reasons of Vol. IV, 1956 ed., p. 197).
public policy, are bound to observe extra
ordinary diligence in the vigilance over the PHILIPPINE AIRLINES, INC. VS. CA, GR L-82619,
goods and for the safety of the passengers Sept. 15, 1993:
transported by them according to all the
The contract of air carriage is a peculiar
circumstances of each case.
one. Being imbued with public interest, the
Such extraordinary diligence in the vigilance law requires common carriers to carry the
over the goods is further expressed in passengers safely as far as human care and
articles 1734, 1735, and 1745, Nos. 5, 6, and foresight can provide, using the utmost
7, while the extraordinary diligence for the diligence of very cautious persons, with due
safety of the passengers is further set forth regard for all the circumstances. In Air France
in articles 1755 and 1756. v. Carrascoso, we held that —

ART. 1755. A common carrier is bound to A contract to transport passengers is quite


carry the passengers safely as far as human different in kind and degree from any other
care and foresight can provide, using the contractual relation. And this, because of the
utmost diligence of very cautious persons, with relation which an air carrier sustains with
a due regard for all the circumstances. the public. Its business is mainly with the
travelling public. It invites people to avail of
ART. 1756. In case of death of or injuries the comforts and advantages it offers. The
to passengers, common carriers are contract of air carriage, therefore, generates
presumed to have been at fault or to have a relation attended with a public duty . . . .
acted negligently, unless they prove that ( emphasis supplied).
they observed extraordinary diligence as
prescribed in articles 1733 and 1755. ii. DURATION OF LIABILITY

The Code Commission, in justifying this LRTA VS. NAVIDAD, GR 145804, Feb. 6, 2003:
extraordinary diligence required of a common
The law requires common carriers to carry
carrier, says the following:
passengers safely using the utmost diligence
A common carrier is bound to carry the of very cautious persons with due regard for
passengers safely as far as human care and all circumstances. Such duty of a common
foresight can provide, using the utmost carrier to provide safety to its passengers so
deligence of very cautions persons, with due obligates it not only during the course of
regard for all circumstances. This the trip but for so long as the passengers

25 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

are within its premises and where they killed. In the circumstances, it cannot be
ought to be in pursuance to the contract of claimed that the carrier's agent had
carriage. exercised the "utmost diligence" of a "very
cautions person" required by Article 1755 of
LA MALLORCA VS. CA, GR L-20761, July 27, the Civil Code to be observed by a common
1966: carrier in the discharge of its obligation to
It has been recognized as a rule that the transport safely its passengers. In the first
relation of carrier and passenger does not place, the driver, although stopping the bus,
cease at the moment the passenger alights nevertheless did not put off the engine.
from the carrier's vehicle at a place selected Secondly, he started to run the bus even
by the carrier at the point of destination, before the bus conductor gave him the
but continues until the passenger has had a signal to go and while the latter was still
reasonable time or a reasonable opportunity unloading part of the baggages of the
to leave the carrier's premises. And, what is a passengers Mariano Beltran and family. The
reasonable time or a reasonable delay presence of said passengers near the bus
within this rule is to be determined from was not unreasonable and they are,
all the circumstances. Thus, a person who, therefore, to be considered still as
after alighting from a train, walks along the passengers of the carrier, entitled to the
station platform is considered still a protection under their contract of carriage.
passenger. So also, where a passenger has
DE GILLACO VS. MANILA RAILROAD COMPANY,
alighted at his destination and is proceeding GR L-8034:
by the usual way to leave the company's
premises, but before actually doing so is There can be no quarrel with the principle
halted by the report that his brother, a that a passenger is entitled to protection
fellow passenger, has been shot, and he in from personal violence by the carrier or its
good faith and without intent of engaging agents or employees, since the contract of
in the difficulty, returns to relieve his transportation obligates the carrier to
brother, he is deemed reasonably and transport a passenger safely to his
necessarily delayed and thus continues to destination. But under the law of the case,
be a passenger entitled as such to the this responsibility extends only to those that
protection of the railroad and company and the carrier could foresee or avoid through the
its agents. exercise of the degree of car and diligence
required of it.
In the present case, the father returned to
the bus to get one of his baggages which iii. PRESUMPTION OF NEGLIGENCE
was not unloaded when they alighted from
Art. 1756. In case of death of or injuries to
the bus. Raquel, the child that she was,
passengers, common carriers are presumed
must have followed the father. However,
to have been at fault or to have acted
although the father was still on the running
board of the bus awaiting for the conductor negligently, unless they prove that they
observed extraordinary diligence as
to hand him the bag or bayong, the bus
prescribed in Articles 1733 and 1755.
started to run, so that even he (the father)
had to jump down from the moving vehicle. ABOITIZ SHIPPING CORPORATION VS. CA, GR
It was at this instance that the child, who 84458, Nov. 6, 1989:
must be near the bus, was run over and
26 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Under the law, common carriers are, from carriers. We cannot in reason deny that
the nature of their business and for reasons petitioner failed to rebut the presumption
of public policy, bound to observe against it. Under the facts obtaining in the
extraordinary diligence in the vigilance over present case, it cannot be gainsaid that
the goods and for the safety of the petitioner had inadequately complied with the
passengers transported by them, according required degree of diligence to prevent the
to all the circumstances of each case. More accident from happening.
particularly, a common carrier is bound to
iv. LIABILITY FOR ACTS OF EMPLOYEES
carry the passengers safely as far as human
care and foresight can provide, using the Art. 1759. Common carriers are liable for
utmost diligence of very cautious persons, the death of or injuries to passengers
with a due regard for all the circumstances. through the negligence or wilful acts of the
Thus, where a passenger dies or is injured, former's employees, although such
the common carrier is presumed to have employees may have acted beyond the
been at fault or to have acted negligently. scope of their authority or in violation of
This gives rise to an action for breach of the orders of the common carriers.
contract of carriage where all that is
required of plaintiff is to prove the This liability of the common carriers does
existence of the contract of carriage and its not cease upon proof that they exercised
non-performance by the carrier, that is, the all the diligence of a good father of a family
failure of the carrier to carry the passenger in the selection and supervision of their
safely to his destination, which, in the employees.
instant case, necessarily includes its failure
Art. 2184. In motor vehicle mishaps, the
to safeguard its passenger with
owner is solidarily liable with his driver, if
extraordinary diligence while such relation
the former, who was in the vehicle, could
subsists.
have, by the use of the due diligence,
The presumption is, therefore, established prevented the misfortune. It is disputably
by law that in case of a passenger's death presumed that a driver was negligent, if he
or injury the operator of the vessel was at had been found guilty or reckless driving or
fault or negligent, having failed to exercise violating traffic regulations at least twice
extraordinary diligence, and it is incumbent within the next preceding two months.
upon it to rebut the same. This is in
If the owner was not in the motor vehicle,
consonance with the avowed policy of the
the provisions of Article 2180 are applicable.
State to afford full protection to the
passengers of common carriers which can be Art. 2180. The obligation imposed by Article
carried out only by imposing a stringent 2176 is demandable not only for one's own
statutory obligation upon the latter. acts or omissions, but also for those of
Concomitantly, this Court has likewise persons for whom one is responsible.
adopted a rigid posture in the application
of the law by exacting the highest degree The father and, in case of his death or
of care and diligence from common carriers, incapacity, the mother, are responsible for
bearing utmost in mind the welfare of the the damages caused by the minor children
passengers who often become hapless who live in their company.
victims of indifferent and profit-oriented

27 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Guardians are liable for damages caused by SPOUSES HERNANDEZ VS. SPOUSES DOLOR,
the minors or incapacitated persons who GR 160286, July 30, 2004:
are under their authority and live in their
company. Petitioners contend that the absence of the
Hernandez spouses inside the passenger
The owners and managers of an jeepney at the time of the collision militates
establishment or enterprise are likewise against holding them solidarily liable with
responsible for damages caused by their their co-petitioner, Juan Gonzales, invoking
employees in the service of the branches in Article 2184 of the Civil Code, xxx
which the latter are employed or on the
xxx The Hernandez spouses argues that since
occasion of their functions.
they were not inside the jeepney at the
Employers shall be liable for the damages time of the collision, the provisions of Article
caused by their employees and household 2180 of the Civil Code, which does not provide
helpers acting within the scope of their for solidary liability between employers and
assigned tasks, even though the former are employees, should be applied.
not engaged in any business or industry.
We are not persuaded.
The State is responsible in like manner
when it acts through a special agent; but Article 2180 provides:
not when the damage has been caused by ARTICLE 2180. The obligation imposed by
the official to whom the task done properly article 2176 is demandable not only for one's
pertains, in which case what is provided in own acts or omissions, but also for those of
Article 2176 shall be applicable. persons for whom one is responsible.
Lastly, teachers or heads of establishments xxx xxx xxx
of arts and trades shall be liable for
damages caused by their pupils and students Employers shall be liable for the damages
or apprentices, so long as they remain in caused by their employees and household
their custody. helpers acting within the scope of their
assigned tasks, even though the former are not
The responsibility treated of in this article engaged in any business or industry.
shall cease when the persons herein
mentioned prove that they observed all the xxx xxx xxx
diligence of a good father of a family to
On the other hand, Article 2176 provides
prevent damage.
Whoever by act or omission causes damage to
Art. 2176. Whoever by act or omission
another, there being fault or negligence, is
causes damage to another, there being fault
obliged to pay for the damage done. Such fault
or negligence, is obliged to pay for the
or negligence, if there is no pre-existing
damage done. Such fault or negligence, if
contractual relation between the parties, is
there is no pre-existing contractual relation
called a quasi-delict and is governed by the
between the parties, is called a quasi-delict
provisions of this Chapter.
and is governed by the provisions of this
Chapter. While the above provisions of law do not
expressly provide for solidary liability, the

28 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

same can be inferred from the wordings of passengers from assaults committed by its
the first paragraph of Article 2180 which own employees.
states that the obligation imposed by article
2176 is demandable not only for one's own As can be gleaned from Art. 1759, the Civil
Code of the Philippines evidently follows the
acts or omissions, but also for those of persons
rule based on the second view. At least
for whom one is responsible.
three very cogent reasons underlie this rule.
Moreover, Article 2180 should be read with As explained in Texas Midland R.R. v.
Article 2194 of the same Code, which Monroe, 110 Tex. 97, 216 S.W. 388, 389-
categorically states that the responsibility of 390, and Haver v. Central Railroad Co., 43
two or more persons who are liable for LRA 84, 85: (1) the special undertaking of
quasi-delict is solidary. In other words, the the carrier requires that it furnish its
liability of joint tortfeasors is solidary. Verily, passenger that full measure of protection
under Article 2180 of the Civil Code, an afforded by the exercise of the high degree
employer may be held solidarily liable for the of care prescribed by the law, inter alia
negligent act of his employee from violence and insults at the hands of
strangers and other passengers, but above
MARANAN VS. PEREZ, GR L-22272, June 26, all, from the acts of the carrier's own
1967: servants charged with the passenger's
The Civil Code provisions on the subject of safety; (2) said liability of the carrier for the
Common Carriers are new and were taken servant's violation of duty to passengers, is
from Anglo-American Law. There, the basis the result of the formers confiding in the
of the carrier's liability for assaults on servant's hands the performance of his
passengers committed by its drivers rests contract to safely transport the passenger,
either on (1) the doctrine of respondeat delegating therewith the duty of protecting
superior or (2) the principle that it is the the passenger with the utmost care
carrier's implied duty to transport the prescribed by law; and (3) as between the
passenger safely. carrier and the passenger, the former must
bear the risk of wrongful acts or negligence
Under the first, which is the minority view, of the carrier's employees against
the carrier is liable only when the act of passengers, since it, and not the passengers,
the employee is within the scope of his has power to select and remove them.
authority and duty. It is not sufficient that the
act be within the course of employment only. Accordingly, it is the carrier's strict
obligation to select its drivers and similar
Under the second view, upheld by the employees with due regard not only to their
majority and also by the later cases, it is technical competence and physical ability,
enough that the assault happens within the but also, no less important, to their total
course of the employee's duty. It is no personality, including their patterns of
defense for the carrier that the act was behavior, moral fibers, and social attitude.
done in excess of authority or in
disobedience of the carrier's orders. The Applying this stringent norm to the facts in
carrier's liability here is absolute in the this case, therefore, the lower court rightly
sense that it practically secures the adjudged the defendant carrier liable
pursuant to Art. 1759 of the Civil Code. The
dismissal of the claim against the defendant
29 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

driver was also correct. Plaintiff's action was measures to protect the safety of
predicated on breach of contract of carriage passengers, such as frisking passengers and
and the cab driver was not a party thereto. inspecting their baggages, preferably with
His civil liability is covered in the criminal case non-intrusive gadgets such as metal
wherein he was convicted by final judgment. detectors, before allowing them on board
could have been employed without violating
v. LIABILITY FOR ACTS OF STRANGERS the passengers constitutional rights. As this
Art. 1763. A common carrier is responsible Court intimated in Gacal v. Philippine Air
for injuries suffered by a passenger on Lines, Inc., a common carrier can be held
account of the wilful acts or negligence of liable for failing to prevent a hijacking by
other passengers or of strangers, if the frisking passengers and inspecting their
common carrier's employees through the baggages.
exercise of the diligence of a good father From the foregoing, it is evident that
of a family could have prevented or stopped petitioners employees failed to prevent the
the act or omission. attack on one of petitioners buses because
FORTUNE EXPRESS, INC. VS. CA, GR 119756, they did not exercise the diligence of a good
Mar. 18, 1999: father of a family. Hence, petitioner should
be held liable for the death of Atty. Caorong.
Art. 1763 of the Civil Code provides that a
common carrier is responsible for injuries PALAPIL VS. CA, GR 52159, Dec. 22, 1989:
suffered by a passenger on account of the Clearly under the above provision, a tort
wilful acts of other passengers, if the committed by a stranger which causes injury
employees of the common carrier could to a passenger does not accord the latter a
have prevented the act the exercise of the cause of action against the carrier. The
diligence of a good father of a family. In
negligence for which a common carrier is
the present case, it is clear that because of held responsible is the negligent omission by
the negligence of petitioners employees, the the carrier's employees to prevent the tort
seizure of the bus by Mananggolo and his men from being committed when the same could
was made possible. have been foreseen and prevented by them.
Despite warning by the Philippine Further, under the same provision, it is to
Constabulary at Cagayan de Oro that the be noted that when the violation of the
Maranaos were planning to take revenge on contract is due to the willful acts of
the petitioner by burning some of its buses strangers, as in the instant case, the degree
and the assurance of petitioners operation of care essential to be exercised by the
manager, Diosdado Bravo, that the necessary common carrier for the protection of its
precautions would be taken, petitioner did passenger is only that of a good father of
nothing to protect the safety of its a family.
passengers. xxx
Had petitioner and its employees been xxx
vigilant they would not have failed to see
that the malefactors had a large quantity of Although the suggested precaution could
gasoline with them. Under the have prevented the injury complained of,
circumstances, simple precautionary the rule of ordinary care and prudence is

30 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

not so exacting as to require one charged be shown that the carrier had observed the
with its exercise to take doubtful or required extraordinary diligence of a very
unreasonable precautions to guard against cautious person as far as human care and
unlawful acts of strangers. The carrier is not foresight can provide or that the accident
charged with the duty of providing or was caused by a fortuitous event (Estrada v.
maintaining vehicles as to absolutely prevent Consolacion, 71 SCRA 523 [1976]). Thus, as
any and all injuries to passengers. Where ruled by this Court, no person shall be
the carrier uses cars of the most approved responsible for those "events which could
type, in general use by others engaged in not be foreseen or which though foreseen
the same occupation, and exercises a high were inevitable. (Article 1174, Civil Code).
degree of care in maintaining them in suitable The term is synonymous with caso fortuito
condition, the carrier cannot be charged with (Lasam v. Smith, 45 Phil. 657 [1924]) which
negligence in this respect. is of the same sense as "force majeure"
(Words and Phrases Permanent Edition, Vol.
vi. EFFECTS OF STIPULATION ON LIABILITY
17, p. 362).
Art. 1757. The responsibility of a common In order to constitute a caso fortuito or
carrier for the safety of passengers as force majeure that would exempt a person
required in Articles 1733 and 1755 cannot from liability under Article 1174 of the Civil
be dispensed with or lessened by Code, it is necessary that the following
stipulation, by the posting of notices, by
elements must concur: (a) the cause of the
statements on tickets, or otherwise. breach of the obligation must be
Art. 1758. When a passenger is carried independent of the human will (the will of
gratuitously, a stipulation limiting the the debtor or the obligor); (b) the event
common carrier's liability for negligence is must be either unforeseeable or
valid, but not for wilful acts or gross unavoidable; (c) the event must be such as
negligence. to render it impossible for the debtor to
fulfill his obligation in a normal manner; and
The reduction of fare does not justify any (d) the debtor must be free from any
limitation of the common carrier's liability. participation in, or aggravation of the injury
to the creditor (Lasam v. Smith, 45 Phil. 657
Art. 1760. The common carrier's
[1924]; Austria v. Court of Appeals, 39 SCRA
responsibility prescribed in the preceding
527 [1971]; Estrada v. Consolacion, supra;
article cannot be eliminated or limited by
Vasquez v. Court of Appeals, 138 SCRA 553
stipulation, by the posting of notices, by
[1985]; Juan F. Nakpil & Sons v. Court of
statements on the tickets or otherwise.
Appeals, 144 SCRA 596 [1986]). Caso fortuito
vii. DEFENSES or force majeure, by definition, are
extraordinary events not foreseeable or
1. FORTUITOUS EVENT avoidable, events that could not be
foreseen, or which, though foreseen, are
GACAL VS. PAL, GR L-55300, Mar. 15, 1990:
inevitable. It is, therefore, not enough that
It is the duty of a common carrier to the event should not have been foreseen
overcome the presumption of negligence or anticipated, as is commonly believed, but
(Philippine National Railways v. Court of it must be one impossible to foresee or to
Appeals, 139 SCRA 87 [1985]) and it must avoid. The mere difficulty to foresee the

31 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

happening is not impossibility to foresee the depositaries, provided that notice was given
same (Republic v. Luzon Stevedoring to them, or to their employees, of the
Corporation, 21 SCRA 279 [1967]). effects brought by the guests and that, on
the part of the latter, they take the
2. CONTRIBUROTY NEGLIGENCE precautions which said hotel-keepers or
FORTUNE EXPRESS, INC. VS. CA, GR 119756, their substitutes advised relative to the care
Mar. 18, 1999: and vigilance of their effects.

The petitioner contends that Atty. Caorong Art. 2000. The responsibility referred to in
was guilty of contributory negligence in the two preceding articles shall include the
returning to the bus to retrieve something. loss of, or injury to the personal property of
But Atty. Caorong did not act recklessly. It the guests caused by the servants or
should be pointed out that the intended employees of the keepers of hotels or inns
targets of the violence were petitioner and as well as strangers; but not that which
its employees, not its passengers. The may proceed from any force majeure. The
assailants motive was to retaliate for the fact that travellers are constrained to rely
loss of life of two Maranaos as a result of on the vigilance of the keeper of the hotels
the collision between petitioners bus and or inns shall be considered in determining
the jeepney in which the two Maranaos the degree of care required of him.
were riding. Mananggolo, the leader of the Art. 2001. The act of a thief or robber, who
group which had hijacked the bus, ordered has entered the hotel is not deemed force
the passengers to get off the bus as they majeure, unless it is done with the use of
intended to burn it and its driver. The arms or through an irresistible force.
armed men actually allowed Atty. Caorong
to retrieve something from the bus. What Art. 2002. The hotel-keeper is not liable for
apparently angered them was his attempt compensation if the loss is due to the acts
to help the driver of the bus by pleading of the guest, his family, servants or visitors,
for his life. He was playing the role of the or if the loss arises from the character of
good Samaritan. Certainly, this act cannot the things brought into the hotel.
be considered an act of negligence, let alone
recklessness. Art. 2003. The hotel-keeper cannot free
himself from responsibility by posting
B. PASSENGER'S BAGGAGE notices to the effect that he is not liable for
the articles brought by the guest. Any
Art. 1754. The provisions of Articles 1733 stipulation between the hotel-keeper and
to 1753 shall apply to the passenger's
the guest whereby the responsibility of the
baggage which is not in his personal custody former as set forth in articles 1998 to 2001
or in that of his employee. As to other is suppressed or diminished shall be void.
baggage, the rules in Articles 1998 and 2000
to 2003 concerning the responsibility of C. RELEVANT PROVISIONS OF THE WARSAW
hotel-keepers shall be applicable. AND MONTREAL CONVENTION

Art. 1998. The deposit of effects made by i. BINDING EFFECT OF THE CONVENTION
the travellers in hotels or inns shall also be
CATHAY PACIFIC AIRWAYS, LTD. VS. CA, GR
regarded as necessary. The keepers of hotels
60501, Mar. 5, 1993:
or inns shall be responsible for them as

32 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

WARSAW CONVENTION; DOES NOT stopping place within a territory subject to


OPERATE AS AN EXCLUSIVE ENUMERATION the sovereignty, mandate, or authority of
OF THE INSTANCES FOR DECLARING A another power, even though the power is not
CARRIER LIABLE FOR BREACH OF CONTRACT a party to the Convention.
OF CARRIAGE OR AS AN ABSOLUTE LIMIT OF
iii. LIABILITY UNDER THE CONVENTION
THE EXTENT OF THAT LIABILITY; DOES NOT
PRECLUDE THE OPERATION OF THE CIVIL Art. 29 of the Warsaw Convention which
CODE AND OTHER PERTINENT LAWS. — As provides
We have repeatedly held, although the
Warsaw Convention has the force and effect Art. 29 (1) The right to damages shall be
of law in this country, being a treaty extinguished if an action is not brought within
commitment assumed by the Philippine two (2) years, reckoned from the date of arrival
government, said convention does not at the destination, or from the date on which
operate as an exclusive enumeration of the the aircraft ought to have arrived, or from the
instances for declaring a carrier liable for date on which the transportation stopped.
breach of contract of carriage or as an
(2) The method of calculating the period of
absolute limit of the extent of that liability.
limitation shall be determined by the law of
The Warsaw Convention declares the carrier
the court to which the case is submitted.
liable for damages in the enumerated cases
and under certain limitations. However, it UNITED AIRLINESVS. UY, GR 127768, Nov. 19,
must not be construed to preclude the 1999:
operation of the Civil Code and other
pertinent laws. It does not regulate, much As for respondent's second cause of action,
less exempt, the carrier from liability for indeed the travaux preparatories of the
damages for violating the rights of its Warsaw Convention reveal that the
passengers under the contract of carriage, delegates thereto intended the two (2)-year
especially if wilfull misconduct on the part of limitation incorporated in Art. 29 as an
the carrier's employees is found or established, absolute bar to suit and not to be made
which is clearly the case before Us. subject to the various tolling provisions of
the laws of the forum. This therefore
ii. CATEGORIES OF INTERNATIONAL AIR forecloses the application of our own rules
TRANSPORTATION on interruption of prescriptive periods.
Article 29, par. (2), was intended only to let
MAPA VS. CA, GR 122308, July 8, 1997:
local laws determine whether an action had
There are then two categories of been commenced within the two (2)-year
international transportation, viz., (1) that period, and within our jurisdiction an action
where the place of departure and the place shall be deemed commenced upon the filing
of destination are situated within the of a complaint. Since it is indisputable that
territories of two High Contracting Parties respondent filed the present action beyond
regardless of whether or not there be a the two (2)-year time frame his second
break in the transportation or a cause of action must be barred.
transshipment; and (2) that where the place Nonetheless, it cannot be doubted that
of departure and the place of destination respondent exerted efforts to immediately
are within the territory of a single High convey his loss to petitioner, even employed
Contracting Party if there is an agreed the services of two (2) lawyers to follow up

33 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

his claims, and that the filing of the action process of embarking and disembarking from
itself was delayed because of petitioner's the carrier under Art 17 and that the
evasion. employees of the petitioner airline acted with
malice and bad faith under Art 25 (1) pertain to
xxx the merits of the case which may be examined
In the same vein must we rule upon the only if the action has first been properly
circumstances brought before us. Verily, commenced under the rules on jurisdiction set
respondent filed his complaint more than forth in Art. 28 (1).
two (2) years later, beyond the period of
Art (28) (1) of the Warsaw Convention states:
limitation prescribed by the Warsaw
Convention for filing a claim for damages. Art 28 (1) An action for damages must be
However, it is obvious that respondent was brought at the option of the plaintiff, in the
forestalled from immediately filing an action territory of one of the High Contracting Parties,
because petitioner airline gave him the either before the court of the domicile of the
runaround, answering his letters but not carrier or of his principal place of business or
giving in to his demands. True, respondent where he has a place of business through
should have already filed an action at the which the contract has been made, or before
first instance when his claims were denied the court at the place of destination.
by petitioner but the same could only be
There is no dispute that petitioner issued the
due to his desire to make an out-of-court
ticket in Geneva which was neither the
settlement for which he cannot be faulted.
Hence, despite the express mandate of Art. domicile nor the principal place of business of
petitioner nor the respondents place of
29 of the Warsaw Convention that an action
destination.
for damages should be filed within two (2)
years from the arrival at the place of xxx
destination, such rule shall not be applied in
the instant case because of the delaying tactics The third option of the plaintiff under Art 28 (1)
employed by petitioner airline itself. Thus, of the Warsaw Convention e.g., to sue in the
private respondent's second cause of action place of business of the carrier wherein the
cannot be considered as time-barred under contract was made, is therefore, Manila, and
Art. 29 of the Warsaw Convention. Philippine courts are clothed with jurisdiction
over this case. We note that while this case was
iv. JURISDICTIONAL ISSUES filed in Cebu and not in Manila the issue of
venue is no longer an issue as the petitioner is
AMERICAN AIRLINES VS. CA, GR 116044-45,
deemed to have waived it when it presented
Mar. 9, 2000:
evidence before the trial court.
The threshold issue of jurisdiction of Philippine
SANTOS III VS. NORTHWEST ORIENT AIRLINES,
courts under Art 28 (1) must first be resolved
GR 101538, June 23, 1992:
before any pronouncements may be made on
the liability of the carrier thereunder. The Whether Article 28(1) refers to jurisdiction
objections raised by the private respondent or only to venue is a question over which
that this case is released from the terms of the authorities are sharply divided. While the
Convention because the incident on which this petitioner cites several cases holding that
action is predicated did not occur in the Article 28(1) refers to venue rather than

34 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

jurisdiction, there are later cases cited by the In other words, where the matter is
private respondent supporting the conclusion governed by the Warsaw Convention,
that the provision is jurisdictional. jurisdiction takes on a dual concept.
Jurisdiction in the international sense must
xxx be established in accordance with Article
A number of reasons tends to support the 28(1) of the Warsaw Convention, following
characterization of Article 28(1) as a which the jurisdiction of a particular court
jurisdiction and not a venue provision. First, must be established pursuant to the
the wording of Article 32, which indicates the applicable domestic law. Only after the
places where the action for damages "must" question of which court has jurisdiction is
be brought, underscores the mandatory determined will the issue of venue be taken
nature of Article 28(1). Second, this up. This second question shall be governed by
characterization is consistent with one of the law of the court to which the case is
the objectives of the Convention, which is submitted.
to "regulate in a uniform manner the xxx
conditions of international transportation by
air." Third, the Convention does not contain The petitioner also invokes KLM Royal Dutch
any provision prescribing rules of jurisdiction Airlines v. RTC, a decision of our Court of
other than Article 28(1), which means that Appeals, where it was held that Article 28(1)
the phrase "rules as to jurisdiction" used in is a venue provision. However, the private
Article 32 must refer only to Article 28(1). respondent avers that this was in effect
In fact, the last sentence of Article 32 reversed by the case of Aranas v. United
specifically deals with the exclusive Airlines, where the same court held that
enumeration in Article 28(1) as Article 28(1) is a jurisdictional provision.
"jurisdictions," which, as such, cannot be left Neither of these cases is binding on this
to the will of the parties regardless of the time Court, of course, nor was either of them
when the damage occurred. appealed to us. Nevertheless, we here
express our own preference for the later
This issue was analyzed in the leading case of case of Aranas insofar as its
Smith v. Canadian Pacific Airways, Ltd., where pronouncements on jurisdiction conform to
it was held: the judgment we now make in this petition.
. . . Of more, but still incomplete, assistance V. OBLIGATIONS OF THE SHIPPER, CONSIGNEE
is the wording of Article 28(2), especially AND PASSENGER
when considered in the light of Article 32.
Article 28(2) provides that "questions of A. EFFECT OF NEGLIGENCE OF SHIPPER OR
procedure shall be governed by the law of PASSENGER
the court to which the case is submitted"
Art. 1741. If the shipper or owner merely
(Emphasis supplied). Section (2) thus may
contributed to the loss, destruction or
be read to leave for domestic decision
questions regarding the suitability and deterioration of the goods, the proximate
cause thereof being the negligence of the
location of a particular Warsaw Convention
common carrier, the latter shall be liable in
case.
damages, which however, shall be equitably
reduced.

35 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Art. 1761. The passenger must observe the weight of the payloader cannot successfully
diligence of a good father of a family to be used as an excuse by petitioner to avoid
avoid injury to himself. liability to the damage thus caused, said act
constitutes a contributory circumstance to
Art. 1762. The contributory negligence of the damage caused on the payloader, which
the passenger does not bar recovery of mitigates the liability for damages of
damages for his death or injuries, if the petitioner in accordance with Article 1741 of
proximate cause thereof is the negligence the Civil Code, to wit:
of the common carrier, but the amount of
damages shall be equitably reduced. Art. 1741. If the shipper or owner merely
contributed to the loss, destruction or
ISAAC VS. A.L. AMMEN TRANSPORTATION CO., deterioration of the goods, the proximate
INC., GR L-9671, Aug. 23, 1957: cause thereof being the negligence of the
A circumstances which miliates against the common carrier, the latter shall be liable in
stand of appellant is the fact borne out by damages, which however, shall be equitably
the evidence that when he boarded the bus reduced.
in question, he seated himself on the left We find equitable the conclusion of the
side thereof resting his left arm on the Court of Appeals reducing the recoverable
window sill but with his left elbow outside amount of damages by 20% or 1/5 of the
the window, this being his position in the value of the payloader, which at the time
bus when the collision took place. It is for the instant case arose, was valued at
this reason that the collision resulted in the P34,000. 00, thereby reducing the
severance of said left arm from the body recoverable amount at 80% or 4/5 of
of appellant thus doing him a great damage. P34,000.00 or the sum of P27,200.00.
It is therefore apparent that appellant is
guilty of contributory negligence. Had he not PHILIPPINE NATIONAL RAILWAYS VS. CA, GR L-
placed his left arm on the window sill with 55347, Oct. 4, 1985:
a portion thereof protruding outside,
But while petitioner failed to exercise
perhaps the injury would have been avoided
extraordinary diligence as required by law,
as is the case with the other passenger. It is
to be noted that appellant was the only victim it appears that the deceased was chargeable
with contributory negligence. Since he opted
of the collision.
to sit on the open platform between the
It is true that such contributory negligence coaches of the train, he should have held
cannot relieve appellee of its liability but will tightly and tenaciously on the upright metal
only entitle it to a reduction of the amount of bar found at the side of said platform to
damage caused (Article 1762, new Civil avoid falling off from the speeding train.
Code), but this is a circumstance which Such contributory negligence, while not
further militates against the position taken by exempting the PNR from liability,
appellant in this case. nevertheless justified the deletion of the
amount adjudicated as moral damages. By
COMPANIA MARITIMA VS. CA, GR L-31379, the same token, the award of exemplary
Aug. 29, 1988:
damages must be set aside. Exemplary
While the act of private respondent in damages may be allowed only in cases
furnishing petitioner with an inaccurate where the defendant acted in a wanton,

36 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

fraudulent, reckless, oppressive or Demurrage, in its strict sense, is the


malevolent manner. There being no evidence compensation provided for in the contract
of fraud, malice or bad faith on the part of of affreightment for the detention of the
petitioner, the grant of exemplary damages vessel beyond the time agreed on for
should be discarded. loading and unloading. Essentially,
demurrage is the claim for damages for
B. PAYMENT OF FREIGHT failure to accept delivery. In a broad sense,
ARTICLE 374. The consignees to whom the every improper detention of a vessel may
shipment was made may not defer the be considered a demurrage. Liability for
payment of the expenses and transportation demurrage, using the word in its strictly
charges of the goods they receive after the technical sense, exists only when expressly
lapse of twenty-four hours following their stipulated in the contract. Using the term
delivery; and in case of delay in this payment, in [its broader sense, damages in the] nature
the carrier may demand the judicial sale of the of demurrage are recoverable for a breach
goods transported in an amount necessary to of the implied obligation to load or unload
cover the cost of transportation and the the cargo with reasonable dispatch, but only
expenses incurred. by the party to whom the duty is owed and
only against one who is a party to the shipping
ARTICLE 375. The goods transported shall be contract.
especially bound to answer for the cost of
transportation and for the expenses and fees Whatever may be the merit of petitioner's
incurred for them during their conveyance and contention as to the meaning of the word
until the moment of their delivery. "demurrage" in clause 23 of the bill of
lading, the fact is that clause 29(a) also of
This special right shall prescribe eight days the bill of lading, in relation to Rule 21 of
after the delivery has been made, and once the Far East Conference Tariff No. 28-FMC
prescribed , the carrier shall have no other No. 12, as quoted above, specifically
action than that corresponding to him as an provides for the payment by the consignee
ordinary creditor. of demurrage for the detention of containers
and other equipment after the so-called "free
C. LIABILITY FOR DEMURRAGE
time."
TELENGTAN BROTHERS & SONS, INC. VS. CA,
VI. EXTRAORDINARY DILIGENCE
GR 110581, Sept. 21, 1994:
A. UNDERLYING REASON
With respect to petitioner's liability for
demurrage, petitioner's contention is that The Code Commission on extraordinary
the bill of lading does not provide for the diligence:
payment of container demurrage, as Clause
23 of the bill of lading only says "A common carrier is bound to carry the
"demurrage," i.e., damages for the detention passengers safely as far as human careand
of vessels, and here there is no detention foresight can provide, using the utmost
of vessels. Petitioner invokes the ruling in diligence of very cautious persons, with due
Magellan Manufacturing Marketing Corp. v. regard for all circumstances. This extraordinary
Court of Appeals, where we defined diligence required of common carriers is
"demurrage" as follows: calculated to protect the passengers from the

37 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

tragic mishaps that frequently occur in ARTICLE 609. Captains, masters or patrons of
connection with rapid modern transportation. vessels must be Filipinos,have legal capacity to
This high standard of care is imperatively contract in accordance withthis code, and
demanded by the preciousness of human life prove the skill, capacity, and qualifications
and by the consideration that every person necessary to command and direct the vessel,
must in every way be safeguarded against all as established by marine or navigation laws,
injury." (p. 158, Essentials of transportation ordinances, or regulations, and must notbe
and public utilities law by Aquino and disqualified according to the same for the
Hernando, 2011 Edition) discharge of the duties of the position.

B. EXTRAORDINARY DILIGENCE IN CARRIAGE CALTEX (PHILIPPINES), INC. VS. SULPICIO


BY SEA LINES, INC., GR 131166, Sept. 30, 1999:

i. SEAWORTHINESS OF THE VESSEL Thus, the carriers are deemed to warrant


impliedly the seaworthiness of the ship. For
Section 3. (1) The carrier shall be bound, a vessel to be seaworthy, it must be
before and at the beginning of the voyage, adequately equipped for the voyage and
to exercise due diligence to manned with a sufficient number of
(a) Make the ship seaworthy; competent officers and crew. The failure of
a common carrier to maintain in seaworthy
(b) Properly man, equip, and supply the condition the vessel involved in its contract
ship; of carriage is a clear breach of its duty
prescribed in Article 1755 of the Civil Code.
(c) Make the holds, refrigerating and cooling
chambers, and all other parts of the ship in The provisions owed their conception to the
which goods are carried, fit and safe for nature of the business of common carriers.
their reception carriage and preservation. This business is impressed with a special
public duty. The public must of necessity rely
(2) The carrier shall properly and carefully
on the care and skill of common carriers in
load, handle, stow, carry, keep, care for,
the vigilance over the goods and safety of
and discharge the goods carried.
the passengers, especially because with the
INSURANCE CODE (Republic Act No. 10607): modern development of science and
invention, transportation has become more
SEC. 116. A ship is seaworthy when rapid, more complicated and somehow more
reasonably fit to perform the service and to hazardous. For these reasons, a passenger
encounter the ordinary perils of the voyage or a shipper of goods is under no obligation
contemplated by the parties to the policy. to conduct an inspection of the ship and its
crew, the carrier being obliged by law to
SEC. 119. Where different portions of the
impliedly warrant its seaworthiness.
voyage contemplated by a policy differ in
respect to the things requisite to make the STANDARD VACUUM OIL COMPANY VS.
ship seaworthy therefor, a warranty of LUZON STEVEDORING CO., INC., GR L-5203:
seaworthiness is complied with if, at the
commencement of each portion, the ship is The employment of this crew to perform
seaworthy with reference to that portion. functions beyond its competence and
qualifications is not only risky but against

38 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

the law and if a mishap is caused, as in this common carrier which keeps its vessels in
case, one cannot but surmise that such seaworthy condition. He may have no
incompetence has something to do with the control over the vessel but he has full
mishap. The fact that the tugboat had control in the selection of the common
undertaken several trips before with carrier that will transport his goods. He also
practically the same crew without any has full discretion in the choice of assurer that
untoward consequence, cannot furnish any will underwrite a particular venture.
justification for continuing in its employ a
We need not belabor the alleged breach of
deficient or incompetent personnel contrary
warranty of seaworthiness by the assured
to law and the regulations of the Bureau of
as painstakingly pointed out by FELMAN to
Customs.
stress that subrogation will not work in this
(1) Generally, seaworthiness is that strength, case. In policies where the law will generally
durability and engineering skill made a part imply a warranty of seaworthiness, it can
of a ship's construction and continued only be excluded by terms in writing in the
maintenance, together with a competent policy in the clearest language. And where
and sufficient crew, which would withstand the policy stipulates that the seaworthiness
the vicissitudes and dangers of the elements of the vessel as between the assured and
which might reasonably be expected or the assurer is admitted, the question of
encountered during her voyage without loss seaworthiness cannot be raised by the assurer
or damage to her particular cargo. The without showing concealment or
Cleveco, D.C. Ohio, 59 F. Supp. 71, 78, misrepresentation by the assured.
affirmed, C.C.A., 154 F. 2d 606. (80 C.J.S. 997,
ii. OVERLOADING
Footnote.).
NEGROS NAVIGATION CO., INC. VS. CA, GR
THE PHILIPPINE AMERICAN GENERAL
INSURANCE COMPANY, INC. VS. CA, GR 110398, Nov. 7, 1997:
116940, June 11, 1997: Duty to exercise due diligence likewise
includes the duty to take passengers or
It is generally held that in every marine
cargoes that are within the carrying capacity of
insurance policy the assured impliedly
warrants to the assurer that the vessel is the vessel. Hence, the carrier failed to exercise
due diligence in one case because it was
seaworthy and such warranty is as much a
established that the total number allowed by
term of the contract as if expressly written
on the face of the policy. Thus Sec. 113 of the Philippine Coast Guard on the ship was
864, of whom are passengers, but there were
the Insurance Code provides that (i)n every
marine insurance upon a ship or freight, or actually 1,004 on board the vessel when it
sank, 140 persons more than maximum
freightage, or upon anything which is the
number that could be safely carried by it.
subject of marine insurance, a warranty is
implied that the ship is seaworthy. Under iii. PROPER STORAGE
Sec. 114, a ship is seaworthy when
reasonably fit to perform the service, and The vessel itself may be suitable for the cargo
to encounter the ordinary perils of the but this is nit enough because the cargo must
voyage, contemplated by the parties to the be properly stored. (p. 171-174, Aquino,
policy. Thus it becomes the obligation of Transportation law 2011 edition)
the cargo owner to look for a reliable
39 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

iv. OBLIGATION OF CAPTAIN AND CREW sum which may have been stipulated for such
case.
MECENAS VS. CA, GR 88052, DEC. 14, 1989:
When on account of said cause of force
We believe that the behaviour of the majeure, the carrier had to take another route
captain of the "Don Juan" in tills instance- which produced an increase in transportation
playing mahjong "before and up to the time charges, he shall be reimbursed for such
of collision constitutes behaviour that is increase upon formal proof thereof.
simply unacceptable on the part of the
master of a vessel to whose hands the lives C. EXTRAORDINARY DILIGENCE IN CARRIAGE
and welfare of at least seven hundred fifty BY LAND
(750) passengers had been entrusted.
BATANGAS TRANSPORTATION COMPANY VS.
Whether or not Capt. Santisteban was "off-
duty" or "on-duty" at or around the time CAGUIMBAL, GR L-22985, Jan. 24, 1968:
of actual collision is quite immaterial; there It is true that the driver of the Biñan bus
is, both realistically speaking and in should have slowed down or stopped, and,
contemplation of law, no such thing as "off- hence, was reckless in not doing so; but,
duty" hours for the master of a vessel at he had no especial obligations toward the
sea that is a common carrier upon whom the passengers of the BTCO unlike Perez whose
law imposes the duty of extraordinary duty was to exercise "utmost" or
diligence: "extraordinary" diligence for their safety.
Perez was thus under obligation to avoid a
[t]he duty to carry the passengers safely as
far as human care and foresight can situation which would be hazardous for his
passengers, and, make their safety
provide, using the utmost diligence of very
dependent upon the diligence of the Biñan
cautious persons, with a due regard for all the
driver. Such obligation becomes more
circumstances.
patent when we considered the fact — of
The record does not show that was the first which the Court may take judicial
or only time that Capt. Santisteban had cognizance — that our motor vehicle
entertained himself during a voyage by drivers, particularly those of public service
playing mahjong with his officers and utilities, have not distinguished themselves
passengers; Negros Navigation in permitting, for their concern over the safety, the
or in failing to discover and correct such comfort or the convenience of others.
behaviour, must be deemed grossly negligent. Besides, as correctly stated in the syllabus
to Brito Sy vs. Malate Taxicab & Garage,
v. RULE ON DEVIATION AND TRANSSHIPMENT
Inc.
ARTICLE 359. If there is an agreement between In an action based on a contract of carriage,
the shipper and the carrier as to the road over the court need not make an express finding of
which the conveyance is to be made, the fault or negligence on the part of the carrier
carrier may not change the route, unless it be in order to hold it responsible to pay the
by reason of force majeure; and should he do damages sought for by the passenger. By
so without this cause, he shall be liable for all the contract of carriage, the carrier assumes
the losses which the goods he transports may the express obligation to transport the
suffer from any other cause, beside paying the passenger to his destination safely and to

40 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

observe extraordinary diligence with a due (b) Subject to the provisions of the
regard for all the circumstances, and any preceding paragraph, the rate of speed of
injury that might be suffered by the any motor vehicle shall not exceed the
passenger is right away attributable to the following:
fault or negligence of the carrier (Article
MAXIMUM ALLOWABLE SPEEDS
1756, new Civil Code). This is an exception
to the general rule that negligence must be Passengers Cars and Motorcycle Motor
proved, and it is therefore incumbent upon trucks and buses
the carrier to prove that it has exercised
extraordinary diligence as prescribed in 1. On open country roads, with no "blinds
Articles 1733 and 1755 of the new Civil Code. corners" not closely bordered by
habitations. 80 km. per hour 50 km. per
In the case at bar, BTCO has not proven hour
the exercise of extraordinary diligence on its
part. 2. On "through streets" or boulevards, clear
of traffic, with no " blind corners," when so
i. VEHICLE'S CONDITION designated. 40 km. per hour 30 km. per
hour
Common carriers that offer transportation by
land are similarly required to make sure that 3. On city and municipal streets, with light
vehicles that they are using are in good order traffic, when not designated "through
and condition. (p. 181-182, Aquino, streets". 30 km. per hour 30 km. per hour
Transportation law 2011 edition)
4. Through crowded streets, approaching
ii. TRAFFIC RULES intersections at "blind corners," passing
school zones, passing other vehicles which
RA 4136 CHAPTER IV TRAFFIC RULES
are stationery, or for similar dangerous
ARTICLE I Speed Limit and Keeping to the circumstances. 20 km. per hour 20 km. per
Right hour

Sec. 35. Restriction as to speed. (c) The rates of speed hereinabove


prescribed shall not apply to the following:
(a) Any person driving a motor vehicle on
a highway shall drive the same at a careful (1) A physician or his driver when the
and prudent speed, not greater nor less than former responds to emergency calls;
is reasonable and proper, having due regard
(2) The driver of a hospital ambulance on
for the traffic, the width of the highway,
the way to and from the place of accident
and of any other condition then and there
or other emergency;
existing; and no person shall drive any
motor vehicle upon a highway at such a (3) Any driver bringing a wounded or sick
speed as to endanger the life, limb and person for emergency treatment to a
property of any person, nor at a speed hospital, clinic, or
greater than will permit him to bring the
vehicle to a stop within the assured clear (4) The driver of a motor vehicle belonging
distance ahead. to the Armed Forces while in use for official

41 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

purposes in times of riot, insurrection or be the duty of every provincial, city and
invasion; municipal secretary to certify to the
Commissioner the names, locations, and
(5) The driver of a vehicle, when he or his limits of all "through streets" designated as
passengers are in pursuit of a criminal; such by the provincial board, municipal
(6) A law-enforcement officer who is trying board or council.
to overtake a violator of traffic laws; and ARTICLE II Overtaking and Passing a Vehicle,
(7) The driver officially operating a motor and Turning at Intersections
vehicle of any fire department, provided Sec. 39. Overtaking a vehicle. - The driver
that exemption shall not be construed to of any motor vehicle overtaking another
allow unless or unnecessary fast driving of vehicle proceeding in the same direction
drivers aforementioned. shall pass at a safe distance to the left
Sec. 36. Speed limits uniform throughout thereof, and shall not again drive to the
the Philippines. - No provincial, city or right side of the highway until safety clear
municipal authority shall enact or enforce of such overtaken vehicle except that on a
any ordinance or resolution specifying highway, within a business or residential
maximum allowable speeds other than those district, having two or more lanes for the
provided in this Act. movement of traffic in one direction, the
driver of a vehicle may overtake and pass
Sec. 37. Driving on right side of highway. - another vehicle on the right. Nothing in this
Unless a different course of action is section shall be construed to prohibit a
required in the interest of the safety and driver overtaking and passing, upon the
the security of life, person or property, or right, another vehicle which is making or
because of unreasonable difficulty of about to make a left turn.
operation in compliance herewith, every
person operating a motor vehicle or an Sec. 40. Driver to give way to overtaking
animaldrawn vehicle on a highway shall pass vehicle. - The driver of a vehicle about to
to the right when meeting persons or be overtaken and passed by another vehicle
vehicles coming toward him, and to the left approaching from the rear shall give way to
when overtaking persons or vehicles going the overtaking vehicle on suitable and
the same direction, and when turning to the audible signal being given by the driver of
left in going from one highway to another, the overtaking vehicle, and shall not increase
every vehicle shall be conducted to the right the speed of his vehicle until completely
of the center of the intersection of the passed by the overtaking vehicle.
highway. Sec. 41. Restrictions on overtaking and
Sec. 38. Classification of highways. - Public passing.
highways shall be properly classified for (a) The driver of a vehicle shall not drive
traffic purposes by the provincial board, to the left side of the center line of a
municipal board or city council having highway in overtaking or passing another
jurisdiction over them, and said provincial vehicle proceeding in the same direction,
board, municipal board or city council shall unless such left side is clearly visible, and is
provide appropriate signs therefor, subject free of oncoming traffic for a sufficient
to the approval of the Commissioner. It shall

42 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

distance ahead to permit such overtaking or (e) The driver of a vehicle shall not overtake
passing to be made in safety. or pass, or attempt to overtake or pass, any
other vehicle proceeding in the same
(b) The driver of a vehicle shall not overtake direction in any "no-passing or overtaking
or pass another vehicle proceeding in the zone.
same direction, when approaching the crest
of a grade, not upon a curve in the ARTICLE III Right of Way and Signals
highway, where the driver's view along the
highway is obstructed within a distance of Sec. 42. Right of way.
five hundred feet ahead, except on a (a) When two vehicles approach or enter
highway having two or more lanes for an intersection at approximately the same
movement of traffic in one direction where time, the driver of the vehicle on the left
the driver of a vehicle may overtake or pass shall yield the right of way to the vehicle
another vehicle: Provided, That on a on the right, except as otherwise hereinafter
highway within a business or residential provided. The driver of any vehicle traveling
district, having two or more lanes for at an unlawful speed shall forfeit any right
movement of traffic in one direction, the of way which he might otherwise have
driver of a vehicle may overtake or pass hereunder.
another vehicle on the right.
(b) The driver of a vehicle approaching but
(c) The driver of a vehicle shall not overtake not having entered an intersection, shall
or pass any other vehicle proceeding in the yield the right of way to a vehicle within
same direction, at any railway grade such intersection or turning therein to the
crossing, not at any intersection of highways left across the line of travel of such first-
unless such intersection or crossing is mentioned vehicle, provided the driver of
controlled by traffic signal, or unless the vehicle turning left has given a plainly
permitted to do so by a watchman or a visible signal of intention to turn as required
peace officer, except on a highway having in this Act.
two or more lanes for movement of traffic
in one direction where the driver of a (c) The driver of any vehicle upon a highway
vehicle may overtake or pass another within a business or residential district shall
vehicle on the right. Nothing in this section yield the right of way to a pedestrian
shall be construed to prohibit a driver crossing such highway within a crosswalk,
overtaking or passing upon the right another except at intersections where the movement
vehicle which is making or about to make of traffic is being regulated by a peace
a left turn. officer or by traffic signal. Every pedestrian
crossing a highway within a business or
(d) The driver of a vehicle shall not overtake residential district, at any point other than
or pass, or attempt to pass, any other a crosswalk shall yield the right of way to
vehicle, proceeding in the same direction, vehicles upon the highway.
between any points indicated by the placing
of official temporary warning or caution (d) The driver of a vehicle upon a highway
signs indicating that men are working on shall bring to a full stop such vehicle before
the highway. traversing any "through highway" or railroad
crossing: Provided, That when it is apparent
that no hazard exists, the vehicle may be

43 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

slowed down to five miles per hour instead (b) The signal herein required shall be given
of bringing it to a full stop. by means of extending the hand and arm
beyond the left side of the vehicle, or by
Sec. 43. Exception to the right of way rule. an approved mechanical or electrical signal
(a) The driver of a vehicle entering a device.
highway from a private road or drive shall ARTICLE IV Turning and Parking
yield the right of way to all vehicles
approaching on such highway. Sec. 45. Turning at intersections.

(b) The driver of a vehicle upon a highway (a) The drive of a vehicle intending to run
shall yield the right of way to police or fire to the right at an intersection shall approach
department vehicles and ambulances when such intersection in the lane for traffic
such vehicles are operated on official nearest to the right-hand side of the
business and the drivers thereof sound highway and, in turning, shall keep as close
audible signal of their approach. as possible to the right-hand curb or edge
of the highway.
(c) The driver of a vehicle entering a
"through highway" or a "stop intersection" (b) The driver of a vehicle intending to turn
shall yield the right of way to all vehicles to the left shall approach such intersection
approaching to either direction on such in the lane for traffic to the right of and
"through highway": Provided, That nothing nearest to the center line of the highway,
in this subsection shall be construed as and, in turning, shall pass to the left of the
relieving the driver of any vehicle being center of the intersection, except that, upon
operated on a "through highway" from the highways laned for traffic and upon oneway
duty of driving with due regard for the highways, a left turn shall be made from
safety of vehicles entering such "through the left lane of traffic in the direction in
highway" nor as protecting the said driver which the vehicle is proceeding.
from the consequence of an arbitrary
(c) For the purpose of this section, the
exercise off such right of way.
center of the intersection shall mean the
Sec. 44. Signals on starting, stopping or meeting point of the medial lines of the
turning. highways intersecting one another, except
when it is occupied by a monument, grass
(a) The driver of any vehicle upon a
plot or any permanent structure, other than
highway, before starting, stopping or turning traffic control device.
from a direct line, shall first see that such
movement can be made in safety, and if Sec. 46. Parking prohibited in specified
any pedestrian may be affected by such places. - No driver shall park a vehicle, or
movement, shall give a clearly audible signal permit it to stand, whether attended or
by sounding the horn, and whenever the unattended, upon a highway in any of the
operation of any other vehicle approaching following places:
or following may be affected by such
movement, shall give a signal plainly visible (a) Within an intersection
to the driver of such other vehicles of the (b) On a crosswalk
intention to make such movement.

44 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

(c) Within six meters of the intersection of otherwise directed by a peace officer, until
curb lines. such vehicle shall have passed.

(d) Within four meters of the driveway Sec. 50. Tampering with vehicles. - No
entrance to and fire station. unauthorized person shall sound the horn,
handle the levers or set in motion or in any
(e) Within four meters of fire hydrant way tamper with a damage or deface any
(f) In front of a private driveway motor vehicle.

(g) On the roadway side of any vehicle Sec. 51. Hitching to a vehicle. - No person
stopped or parked at the curb or edge of shall hang on to, ride on, the outside or
the highway the rear end of any vehicle, and no person
on a bicycle, roller skate or other similar
(h) At any place where official signs have device, shall hold fast to or hitch on to any
been erected prohibiting parking. moving vehicle, and no driver shall
knowingly permit any person to hang on to
Sec. 47. Parked vehicle. - Whenever a motor
or ride, the outside or rear end of his
vehicle is parked unattended on any
vehicle or allow any person on a bicycle,
highway, the driver thereof must turn off
roller skate or other similar device to hold
the ignition switch and stop the motor and
fast or hitch to his vehicle.
notch effectively the hand brake.
Sec. 52. Driving or parking on sidewalk. -
ARTICLE V Miscellaneous Traffic Rules
No person shall drive or park a motor
Sec. 48. Reckless driving. - No person shall vehicle upon or along any sidewalk, path or
operate a motor vehicle on any highway alley not intended for vehicular traffic or
recklessly or without reasonable caution parking.
considering the width, traffic, grades,
Sec. 53. Driving while under the influence
crossing, curvatures, visibility and other
of liquor or narcotic drug. - No person shall
conditions of the highway and the
drive a motor vehicle while under the
conditions of the atmosphere and weather,
influence of liquor or narcotic drug.
or so as to endanger the property or the
safety or rights of any person or so as to Sec. 54. Obstruction of traffic. - No person
cause excessive or unreasonable damage to shall drive his motor vehicle in such a
the highway. manner as to obstruct or impede the
passage of any vehicle, nor, while
Sec. 49. Right of way for police and other
discharging or taking on passengers or
emergency vehicles. - Upon the approach of
loading or unloading freight, obstruct the
any police or fire department vehicle, or of
free passage of other vehicles on the
an ambulance giving audible signal, the
highway.
driver of every other vehicle shall
immediately drive the same to a position as Sec. 55. Duty of driver in case of accident.
near as possible and parallel to the - In the event that any accident should
righthand edge or curb of the highway, clear occur as a result of the operation of a motor
of any intersection of highways, and shall vehicle upon a highway, the driver present,
stop and remain in such position, unless shall show his driver's license, give his true
name and address and also the true name

45 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

and address of the owner of the motor that a person driving a motor vehicle has been
vehicle. negligent if at the time of the mishap he was
violating a traffic regulation. As found by the
No driver of a motor vehicle concerned in appellate court, petitioners failed to present
a vehicular accident shall leave the scene of satisfactory evidence to overcome this legal
the accident without aiding the victim, presumption.
except under any of the following
circumstances: iii. OVERLOADING

1. If he is in imminent danger of being CALALAS VS. CA, GR 122039, May 31, 2000:
seriously harmed by any person or persons
Now, did the driver of jeepney carry Sunga
by reason of the accident;
"safely as far as human care and foresight
2. If he reports the accident to the nearest could provide, using the utmost diligence of
officer of the law; or very cautious persons, with due regard for
all the circumstances" as required by Art.
3. If he has to summon a physician or nurse 1755? We do not think so. Several factors
to aid the victim. militate against petitioner's contention.
MALLARI, SR. VS. CA, GR 128607, Jan. 31, 2000: First, as found by the Court of Appeals, the
The Court of Appeals correctly found, based on jeepney was not properly parked, its rear
the sketch and spot report of the police portion being exposed about two meters
authorities which were not disputed by from the broad shoulders of the highway,
petitioners, that the collision occurred and facing the middle of the highway in a
immediately after petitioner Mallari Jr. diagonal angle. This is a violation of the R.A.
overtook a vehicle in front of it while traversing No. 4136, as amended, or the Land
a curve on the highway. This act of overtaking Transportation and Traffic Code, which
was in clear violation of Sec. 41, pars. (a) and provides:
(b), of RA 4136 as amended xxx Sec. 54. Obstruction of Traffic. — No person
xxx shall drive his motor vehicle in such a
manner as to obstruct or impede the
The rule is settled that a driver abandoning his passage of any vehicle, nor, while
proper lane for the purpose of overtaking discharging or taking on passengers or
another vehicle in an ordinary situation has the loading or unloading freight, obstruct the free
duty to see to it that the road is clear and not passage of other vehicles on the highway.
to proceed if he cannot do so in safety. When
a motor vehicle is approaching or rounding a Second, it is undisputed that petitioner's
curve, there is special necessity for keeping to driver took in more passengers than the
the right side of the road and the driver does allowed seating capacity of the jeepney, a
not have the right to drive on the left hand side violation of §32(a) of the same law. It provides:
relying upon having time to turn to the right if Exceeding registered capacity. — No person
a car approaching from the opposite direction operating any motor vehicle shall allow
comes into view. more passengers or more freight or cargo in
xxx Under Art. 2185 of the Civil Code, unless his vehicle than its registered capacity.
there is proof to the contrary, it is presumed

46 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

The fact that Sunga was seated in an they had no control, as enunciated in the
"extension seat" placed her in a peril decision of this Court cited by His Honor,
greater than that to which the other fairness demands that in measuring a
passengers were exposed. Therefore, not common carrier's duty towards its
only was petitioner unable to overcome the passengers, allowance must be given to the
presumption of negligence imposed on him reliance that should be reposed on the
for the injury sustained by Sunga, but also, sense of responsibility of all the passengers
the evidence shows he was actually in regard to their common safety. It is to
negligent in transporting passengers. be presumed that a passenger will not take
with him anything dangerous to the lives
We find it hard to give serious thought to and limbs of his co-passengers, not to speak
petitioner's contention that Sunga's taking of his own. Not to be lightly considered
an "extension seat" amounted to an implied must be the right to privacy to which each
assumption of risk. It is akin to arguing that
passenger is entitled. He cannot be
the injuries to the many victims of the
subjected to any unusual search, when he
tragedies in our seas should not be protests the innocuousness of his baggage
compensated merely because those and nothing appears to indicate the
passengers assumed a greater risk of contrary, as in the case at bar. In other
drowning by boarding an overloaded ferry. words, inquiry may be verbally made as to the
This is also true of petitioner's contention nature of a passenger's baggage when such is
that the jeepney being bumped while it was not outwardly perceptible, but beyond this,
improperly parked constitutes caso fortuito. A constitutional boundaries are already in
caso fortuito is an event which could not be danger of being transgressed. Calling a
foreseen, or which, though foreseen, was policeman to his aid, as suggested by the
inevitable. This requires that the following service manual invoked by the trial judge,
requirements be present: (a) the cause of
in compelling the passenger to submit to
the breach is independent of the debtor's more rigid inspection, after the passenger
will; (b) the event is unforeseeable or had already declared that the box contained
unavoidable; (c) the event is such as to mere clothes and other miscellaneous, could
render it impossible for the debtor to fulfill not have justified invasion of a
his obligation in a normal manner, and (d) the constitutionally protected domain. Police
debtor did not take part in causing the injury to officers acting without judicial authority
the creditor. Petitioner should have foreseen secured in the manner provided by law are
the danger of parking his jeepney with its not beyond the pale of constitutional
body protruding two meters into the
inhibitions designed to protect individual
highway.
human rights and liberties. Withal, what
iv. OBLIGATION TO INSPECT must be importantly considered here is not
so much the infringement of the
NOCUM VS. LAGUNA TAYABAS BUS COMPANY, fundamental sacred rights of the particular
GR L-23733, Oct. 31, 1969: passenger herein involved, but the constant
threat any contrary ruling would pose on
In this particular case before Us, it must be
the right of privacy of all passengers of all
considered that while it is true the
common carriers, considering how easily the
passengers of appellant's bus should not be
duty to inspect can be made an excuse for
made to suffer for something over which
mischief and abuse. Of course, when there
47 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

are sufficient indications that the vouch for the authenticity of a passport and
representations of the passenger regarding the correctness of the entries therein. The
the nature of his baggage may not be true, power to admit or not an alien into the
in the interest of the common safety of all, country is a sovereign act which cannot be
the assistance of the police authorities may interfered with even by JAL. This is not
be solicited, not necessarily to force the within the ambit of the contract of carriage
passenger to open his baggage, but to entered into by JAL and herein respondents.
conduct the needed investigation consistent As such, JAL should not be faulted for the
with the rules of propriety and, above all, the denial of respondents shore pass applications.
constitutional rights of the passenger. It is in
Prior to their departure, respondents were
this sense that the mentioned service manual
issued by appellant to its conductors must be aware that upon arrival in Narita, they must
secure shore pass entries for their overnight
understood.
stay. Respondents mother, Mrs. Imelda
D. EXTRAORDINARY DILIGENCE IN CARRAIGE Asuncion, insisted though that Ms. Linda
BY AIR Villavicencio of JAL assured her that her
children would be granted the passes.
JAPAN AIRLINES VS. ASUNCION, GR 161730,
Jan. 28, 2005: VII. BILL OF LADING AND OTHER FORMALITIES

Under Article 1755 of the Civil Code, a A. DEFINITION OF BILL OF LADING


common carrier such as JAL is bound to
A bill of lading is a written acknowledgement,
carry its passengers safely as far as human
care and foresight can provide, using the signed by the master of a vessel or other
authorized agent of the carrier, that he has
utmost diligence of very cautious persons,
received the described goods from the
with due regard for all the circumstances.
shipper, to be transported on the expressed
When an airline issues a ticket to a
passenger, confirmed for a particular flight terms, to the described place of destination,
and to be delivered there to the designated
on a certain date, a contract of carriage
consignee or parties.
arises. The passenger has every right to
expect that he be transported on that flight EASTERN SHIPPING LINES, INC. VS. BPI/MS
and on that date and it becomes the INSURANCE CORP., GR 182864, Jan. 12, 2015:
carriers obligation to carry him and his
luggage safely to the agreed destination. If In maritime transportation, a bill of lading
the passenger is not so transported or if in is issued by a common carrier as a contract,
the process of transporting he dies or is receipt and symbol of the goods covered by
injured, the carrier may be held liable for a it. If it has no notation of any defect
breach of contract of carriage. ordamage in the goods, it is considered as
a "clean bill of 1âwphi1 lading." A clean bill
We find that JAL did not breach its contract of lading constitutes prima facie evidence of
of carriage with respondents. It may be true the receipt by the carrier of the goods as
that JAL has the duty to inspect whether its therein described.
passengers have the necessary travel
documents, however, such duty does not xxx
extend to checking the veracity of every
entry in these documents. JAL could not

48 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

The New Civil Code provides that a SPENT BILL OF LADING - if the goods were
stipulation limiting a common carrier’s already delivered but the bill of lading was not
liability to the value of the goods appearing returned, it is called a spent bill of lading.
in the bill of lading is binding, unless the
THROUGH BILL OF LADING - one issued by a
shipper or owner declares a greater value.
carrier who is obliged to use the facilities of
In addition, a contract fixing the sum that
other carriers as well as his own facilities for
may be recovered by the owner or shipper
for the loss, destruction, or deterioration of the purpose of transporting the goods from
the city of the seller to the city of the buyer,
the goods is valid, if it is reasonable and just
which bill of lading is honored by the second
under the circumstances, and has been fairly
and other interested carriers who do not issue
and freely agreed upon.
their own lading.
xxx
ON BOARD BILL - one which it is stated that the
The bills of lading represent the formal have been received on board the vessel which
expression of the parties’ rights, duties and is to carry the goods.
obligations. It is the best evidence of the
intention of the parties which is to be RECEIVED FOR SHIPMENT BILL - one which is
deciphered from the language used in the stated that the goods have been received for
shipment with or without specifying the vessel
contract, not from the unilateral post facto
by which the goods are to be shipped.
assertions of one of the parties, or of third
Received for shipment bills of lading are issued
parties who are strangers to the contract.
Thus, when the terms of an agreement have whenever conditions are not normal and there
is insufficiency of shipping space.
been reduced to writing, it is deemed to
contain all the terms agreed upon and there CUSTODY BILL OF LADING - one which the
can be, between the parties and their goods are already received by the carrier but
successors in interest, no evidence of such the vessel indicated therein has not yet arrived
terms other than the contents of the written in the port.
agreement.
PORT BILL OF LADING - one which the vessel
B. CLASSES OF BILL OF LADING indicated in the bill of lading that will transport
A bill of lading may be either: (1) negotiable or the goods is already in the port.
non-negotiable, (2) clean bill of lading or foul C. NATURE OF BILL OF LADING
bill of lading, (3) on board bill or received for
shipment bill, (4) spent bill of lading, (5) A bill of lading operates both: (1) as a receipt
through bill of lading, (6) custody bill of lading, and (2) as a contract. A third characteristic may
or (7) port bill of lading. be added - (3) it is a document of title which
makes it a symbol of the goods.
CLEAN BILL OF LADING - one which does not
contain any notation indicating any defect in ARTICLE 353. The legal evidence of the
the goods. contract between the shipper and the carrier
shall be the bills of lading, by the contents of
FOUL BILL OF LADING - one which contains which the disputes which may arise regarding
notations indicating any defects in the goods. their execution and performance shall be
decided, no exception being admissible other

49 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

than those of falsity and material error in the the time of shipment of the marks, number,
drafting. quantity, and weight, as furnished by him;
and the shipper shall indemnify the carrier
After the contracthas been complied with, the against all loss damages, and expenses
bill of lading which the carrier has issued shall arising or resulting from inaccuracies in such
be returned to him, and by virtue of the particulars. The right of the carrier to such
exchange of this title with the thing indemnity shall in no way limit his
transported, the respective obligations and responsibility and liability under the contract
actions shall be considered cancelled, unless in of carriage or to any person other than the
the same act the claim which the parties may shipper.
wish to reserve be reduced to writing, with the
exception of that provided for in Article 366. BELGIAN OVERSEAS CHARTERING AND
SHIPPING N.V VS. PHILIPPINE FIRST
In case the consignee, upon receiving the INSURANCE CO., INC., GR 143133, June 5,
goods, cannot return the bill of lading 2002:
subscribed by the carrier, because of its lossor
any other cause, he must give the latter a A bill of lading serves two functions. First,
receipt for the goods delivered, this receipt it is a receipt for the goods shipped. Second,
producing the same effects as the return of the it is a contract by which three parties -
bill of lading. namely, the shipper, the carrier, and the
consignee -- undertake specific
ARTICLE 709. A bill of lading drawn up in responsibilities and assume stipulated
accordance with the provisions of this title obligations. In a nutshell, the acceptance of
shall be proof as between all those interested the bill of lading by the shipper and the
in the cargo and between the latter and the consignee, with full knowledge of its
insurers, proof to the contrary being reserved contents, gives rise to the presumption that
for the latter. it constituted a perfected and binding contract.
COGSA SECTION 3. RESPONSIBILITIES AND Further, a stipulation in the bill of lading
LIABILITIES limiting to a certain sum the common carriers
(4) Such a bill of lading shall be prima facie liability for loss or destruction of a cargo --
evidence of the receipt by the carrier of the unless the shipper or owner declares a
goods as therein described in accordance greater value -- is sanctioned by law. There
with paragraphs (3) (a), (b), and (c) of this are, however, two conditions to be satisfied:
section: Provided, That nothing in this Act (1) the contract is reasonable and just under
shall be construed as repealing or limiting the circumstances, and (2) it has been fairly
the application of any part of the Act, as and freely agreed upon by the parties. this
amended, entitled "An Act relating to bills rule is to bind the shippers by their agreement
of lading in interstate and foreign to the value (maximum valuation) of their
commerce," approved August 29, 1916 (U. goods.
S. C. title 49, secs. 81-124), commonly i. AS A CONTRACT
known as the "Pomerene Bills of Lading
Act." 1. BASIC STIPULATIONS IN A BILL OF LADING

(5) The shipper shall be deemed to have


guaranteed to the carrier the accuracy at

50 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

ARTICLE 350. The shipper as well as the carrier for the captain, for the shipper, or forbthe
of the merchandise or goods may mutually consignee. If the copy sent to the latter should
demand that a bill of lading be made, stating: have a duplicate, this circumstance and the
fact that it isnot valid except in default of the
1. The name, surname, and residence of the first one must be stated.
shipper.
ARTICLE 708. Bills of lading issued to bearer
2. The name, surname and residence of the and sent to the consignee shall be transferable
carrier. by actual delivery of the instrument; and those
3. The name, surname and residence of the issued to order, by virtue of an indorsement.
person to whom or to whose order the goods In either case, the person to whom the bill of
are to be sent or whether they are to be lading is transferred shall acquire all the rights
delivered to the bearer of said bill. and actions of the transferor or indorser with
4. The description of the goods, with a regards to the merchandise mentioned in the
statement of their kind, of their weight, and of same.
the external marks or signs of the packages in ARTICLE 710. If the bills of lading do not agree,
which they are concluded. and no change or erasure can be observed in
5. The cost of transportation. any of them, those possessed by the shipper or
consignee signed bybthe captain shall be proof
6. The date on which shipment is made. against the captain or ship agent in favor of the
consignee or shipper; and those possessed by
7. The place of delivery to the carrier.
the captain or ship agent signed by the shipper
8. The place and the time at which delivery to shall be proof against the shipper or consignee
the consignee shall be made. in favor of the captain or ship agent.

9. The indemnity to be paid by the carrier in ARTICLE 711. The legitimate holder of a bill of
case of delay, if there should be any agreement lading who fails to present it to the captain of
on this matter. the vessel before the unloading obliging the
latter thereby to unload it and place itin
ARTICLE 707. Four true copies of the original deposit, shall be responsible for the expenses
bill of lading shall be made, and all of them of warehousing and other expenses arising
shall be signed by the captain and the shipper. therefrom.
Of these, the shipper shall keep one and send
another to the consignee; the captain shall ARTICLE 712. The captain may not by himself
take two, one for himself and another for the change the destination of the merchandise. In
ship agent. admitting this change at the instance of the
shipper, he must first take up the bill of lading
There may also be drawn up as many copies of which he may have issued, under pain of being
the bill of lading as may be considered liable for the cargo to the legitimate holder of
necessary by the person interested; but when the same.
they are issued to order or to bearer, they shall
be stated in all the copies, be they the first four ARTICLE 713. If before the delivery of the cargo
or the subsequent ones, the destination of a new bill of lading should be demanded of the
each one, stating whether it is for the agent, captain, on the allegation that the failure to
present the previous ones is due to their loss

51 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

or to any other just cause, he shall be obliged In such case, as well as when only second
to issue it, provided that security for the value subsequent copies, issued without this proof,
of the cargo is given to his satisfaction, but are presented, the captain shall apply to the
without changing the consignment, and stating judge or court, so that he may order the
therein the circumstances prescribed in the deposit of the merchandise and their delivery,
lasr paragraph of Article 707, under penalty, through him, to the proper person.
should he not state, of being held liable for said
cargo if improperly delivered through his fault. ARTICLE 717. The delivery of the bill of lading
shall effect the cancellation of all the
ARTICLE 714. If before the vessel puts to sea provisional receipts of prior date given by the
the captain should die or should cease to hold captain or his subordinates for partial
his position through any cause, the shippers deliveries of the cargo which may have bee
shall have right to demand of the new captain made.
the ratification of the first bills of lading, and
ARTICLE 718. After the cargo has been
the latter must do so, provided that all the
delivered the bill of lading which the captain
copies previously issued be presented or
signed, or at least the copy by reason of which
returned to him, and it should appear from all
examination of the cargo that they are correct. the delivery is made, shall be returned to him,
with the receipt for the merchandise
The expenses arising from the examination of mentioned therein.
the cargo shall be defrayed by the ship agent,
The delay on the part of the consignee shall
without prejudice to the right of action of the
latter against the first captain if he ceased to make him liable for the damages which such
delay may cause the captain.
be such through his own fault. Should said
examination not be made, it shall be COGSA SECTION 4. RIGHTS AND IMMUNITIES
understood that the new captain accepts the
cargo as it appears from the bills of lading (5) Neither the carrier nor the ship shall in
issued. any event be or become liable for any loss
or damage to or in connection with the
ARTICLE 715. Bills of lading will give rise to a transportation of goods in an amount
most summary action or to judicial compulsion exceeding $600 per package lawful money
("accion sumarisima o de apremios"), of the United States, or in case of goods
according to the case, for the delivery of the not shipped in packages, per customary
cargo and the payment of the freightage and freight unit, or the equivalent of that sum
the expenses thereby incurred. in other currency, unless the nature and
value of such goods have been declared by
ARTICLE 716. If several persons should present
bills of lading issued to bearer or to oder, the shipper before shipment and inserted in
the bill of lading. This declaration, if
indorsed in their favor, demanding the same
embodied in the bill of lading, shall be
merchandise, the captain shall prefer, in
prima facie evidence, but shall not be
making delivery the person who presents the
copy first issued, except when the latter one conclusive on the carrier.
was issued on proof of the loss ofthe first, and By agreement between the carrier, master,
both are presented by different persons. or agent of the carrier, and the shipper
another maximum amount than that
mentioned in this paragraph may be fixed:

52 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Provided, That such maximum shall not be 15) where this Court found that a similar
less than the figure above named. In no package limitation clause was printed in the
event shall the carrier be liable for more smallest type on the back of the bill of lading,
than the amount of damage actually it nonetheless ruled that the consignee was
sustained. bound thereby on the strength of authority
holding that such provisions on liability
Neither the carrier nor the ship shall be limitation are as much a part of a bill of lading
responsible in any event for loss or damage as though physically in it and as though placed
to or in connection with the transportation therein by agreement of the parties.
of the goods if the nature or value thereof
has been knowingly and fraudulently There can, therefore, be no doubt or
misstated by the shipper in the bill of equivocation about the validity and
lading. enforceability of freely-agreed-upon
stipulations in a contract of carriage or bill of
SEA-LAND SERVICE, INC. VS. IAC, GR 75118, lading limiting the liability of the carrier to an
Aug. 31, 1987: agreed valuation unless the shipper declares a
To begin with, there is no question of the right, higher value and inserts it into said contract or
in principle, of a consignee in a bill of lading to bill. This proposition, moreover, rests upon an
recover from the carrier or shipper for loss of, almost uniform weight of authority.
or damage to goods being transported under EVERETT STEAMSHIP CORPORATION VS. CA,
said bill, although that document may have GR 122494, Oct. 8, 1998:
been- as in practice it oftentimes is-drawn up
only by the consignor and the carrier without When private respondent formally claimed
the intervention of the consignee. x x x. reimbursement for the missing goods from
petitioner and subsequently filed a case
x x x the right of a party in the same situation
against the latter based on the very same
as respondent here, to recover for loss of a bill of lading, it (private respondent)
shipment consigned to him under a bill of accepted the provisions of the contract and
lading drawn up only by and between the thereby made itself a party thereto, or at
shipper and the carrier, springs from either a least has come to court to enforce it. Thus,
relation of agency that may exist between him private respondent cannot now reject or
and the shipper or consignor, or his status as disregard the carriers limited liability
stranger in whose favor some stipulation is stipulation in the bill of lading. In other words,
made in said contract, and who becomes a private respondent is bound by the whole
party thereto when he demands fulfillment of stipulations in the bill of lading and must
that stipulation, in this case the delivery of the respect the same.
goods or cargo shipped. In neither capacity
can he assert personally, in bar to any Private respondent, however, insists that the
provision of the bill of lading, the alleged carrier should be liable for the full value of
circumstance that fair and free agreement to the lost cargo in the amount of
such provision was vitiated by its being in such Y1,552,500.00, considering that the shipper,
fine print as to be hardly readable. Maruman Trading, had "fully declared the
Parenthetically, it may be observed that in one shipment x x x, the contents of each crate,
comparatively recent case (Phoenix Assurance the dimensions, weight and value of the
Company vs. Macondray & Co., Inc., 64 SCRA

53 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

contents," as shown in the commercial Invoice (3) That the common carrier need not
No. MTM-941. observe any diligence in the custody of the
goods;
This claim was denied by petitioner,
contending that it did not know of the (4) That the common carrier shall exercise
contents, quantity and value of "the a degree of diligence less than that of a
shipment which consisted of three pre- good father of a family, or of a man of
packed crates described in Bill of Lading No. ordinary prudence in the vigilance over the
NGO-53MN merely as 3 CASES SPARE PARTS. movables transported;

The bill of lading in question confirms (5) That the common carrier shall not be
petitioners contention. To defeat the responsible for the acts or omission of his
carriers limited liability, the aforecited or its employees;
Clause 18 of the bill of lading requires that
(6) That the common carrier's liability for
the shipper should have declared in writing
acts committed by thieves, or of robbers
a higher valuation of its goods before
who do not act with grave or irresistible
receipt thereof by the carrier and insert the
said declaration in the bill of lading, with threat, violence or force, is dispensed with
the extra freight paid. These requirements or diminished;
in the bill of lading were never complied (7) That the common carrier is not
with by the shipper, hence, the liability of responsible for the loss, destruction, or
the carrier under the limited liability clause deterioration of goods on account of the
stands. The commercial Invoice No. MTM- defective condition of the car, vehicle, ship,
941 does not in itself sufficiently and airplane or other equipment used in the
convincingly show that petitioner has contract of carriage.
knowledge of the value of the cargo as
contended by private respondent. No other H.E. HEACOCK COMPANYVS. MACONDARY &
evidence was proffered by private COMPANY, INC., GR L-16598, Oct. 3, 1921:
respondent to support is contention. Thus,
Three kinds of stipulations have often been
we are convinced that petitioner should be
made in a bill of lading. The first is one
liable for the full value of the lost cargo.
exempting the carrier from any and all
2. PROHIBITED STIPULATIONS liability for loss or damage occasioned by
its own negligence. The second is one
Art. 1745. Any of the following or similar providing for an unqualified limitation of
stipulations shall be considered such liability to an agreed valuation. And
unreasonable, unjust and contrary to public the third is one limiting the liability of the
policy: carrier to an agreed valuation unless the
shipper declares a higher value and pays a
(1) That the goods are transported at the
higher rate of freight. According to an
risk of the owner or shipper;
almost uniform weight of authority, the first
(2) That the common carrier will not be and second kinds of stipulations are invalid
liable for any loss, destruction, or as being contrary to public policy, but the
deterioration of the goods; third is valid and enforceable.

ii. AS DOCUMENT OF TITLE

54 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

Art. 1508. A negotiable document of title may nevertheless be negotiated by the


may be negotiated by delivery: holder and is a negotiable document of title
within the meaning of this Title. But nothing
(1) Where by the terms of the document in this Title contained shall be construed as
the carrier, warehouseman or other bailee limiting or defining the effect upon the
issuing the same undertakes to deliver the obligations of the carrier, warehouseman, or
goods to the bearer; or other bailee issuing a document of title or
(2) Where by the terms of the document placing thereon the words "not negotiable,"
the carrier, warehouseman or other bailee "nonnegotiable," or the like.
issuing the same undertakes to deliver the Art. 1513. A person to whom a negotiable
goods to the order of a specified person, document of title has been duly negotiated
and such person or a subsequent endorsee acquires thereby:
of the document has indorsed it in blank or
to the bearer. (1) Such title to the goods as the person
negotiating the document to him had or
Where by the terms of a negotiable had ability to convey to a purchaser in good
document of title the goods are deliverable faith for value and also such title to the
to bearer or where a negotiable document goods as the person to whose order the
of title has been indorsed in blank or to goods were to be delivered by the terms
bearer, any holder may indorse the same to of the document had or had ability to
himself or to any specified person, and in convey to a purchaser in good faith for
such case the document shall thereafter be value; and
negotiated only by the endorsement of such
endorsee. (2) The direct obligation of the bailee issuing
the document to hold possession of the
Art. 1509. A negotiable document of title
goods for him according to the terms of the
may be negotiated by the endorsement of document as fully as if such bailee had
the person to whose order the goods are contracted directly with him.
by the terms of the document deliverable.
Such endorsement may be in blank, to Art. 1515. Where a negotiable document of
bearer or to a specified person. If indorsed title is transferred for value by delivery, and
to a specified person, it may be again the endorsement of the transferor is
negotiated by the endorsement of such essential for negotiation, the transferee
person in blank, to bearer or to another acquires a right against the transferor to
specified person. Subsequent negotiations compel him to endorse the document unless
may be made in like manner. a contrary intention appears. The negotiation
shall take effect as of the time when the
Art. 1510. If a document of title which endorsement is actually made.
contains an undertaking by a carrier,
warehouseman or other bailee to deliver the iii. AS A RECEIPT
goods to bearer, to a specified person or
order of a specified person or which SALUDO, JR. VS. CA, GR 95536, Mar. 23, 1992:
contains words of like import, has placed A bill of lading is a written acknowledgment
upon it the words "not negotiable," of the receipt of the goods and an
"nonnegotiable" or the like, such document agreement to transport and deliver them at

55 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

a specified place to a person named or on carrier has received the goods described
his order. Such instrument may be called a therein for shipment. Except as modified by
shipping receipt, forwarder's receipt and statute, it is a general rule as to the parties
receipt for transportation. The designation, to a contract of carriage of goods in
however, is immaterial. It has been hold connection with which a bill of lading is
that freight tickets for bus companies as well issued reciting that goods have been
as receipts for cargo transported by all received for transportation, that the recital
forms of transportation, whether by sea or being in essence a receipt alone, is not
land, fall within the definition. Under the conclusive, but may be explained, varied or
Tariff and Customs Code, a bill of lading contradicted by parol or other evidence.
includes airway bills of lading. The two-fold
character of a bill of lading is all too D. RELEVANT PROVISIONS OF THE WARSAW
CONVENTION
familiar; it is a receipt as to the quantity
and description of the goods shipped and a CHAPTER III LIABILITY OF THE CARRIER
contract to transport the goods to the
consignee or other person therein Article 17. The carrier is liable for damage
designated, on the terms specified in such sustained in the event of the death or
instrument. wounding of a passenger or any other bodily
injury suffered by a passenger, if the accident
Logically, since a bill of lading acknowledges which caused the damage so sustained took
receipt of goods to be transported, delivery place on board the aircraft or in the course of
of the goods to the carrier normally any of the operations of embarking or
precedes the issuance of the bill; or, to disembarking.
some extent, delivery of the goods and
issuance of the bill are regarded in Article 18. (1) The carrier is liable for damage
commercial practice as simultaneous acts. sustained in the event of the destruction or
However, except as may be prohibited by loss of, or of damage to, any registered luggage
law, there is nothing to prevent an inverse or any goods, if the occurrence which caused
order of events, that is, the execution of the damage so sustained took place during the
the bill of lading even prior to actual carriage by air.
possession and control by the carrier of the
(2) The carriage by air within the meaning of
cargo to be transported. There is no law
the preceding paragraph comprises the period
which requires that the delivery of the
during which the luggage or goods are in
goods for carriage and the issuance of the
charge of the carrier, whether in an aerodrome
covering bill of lading must coincide in point
or on board an aircraft, or, in the case of a
of time or, for that matter, that the former
landing outside an aerodrome, in any place
should precede the latter.
whatsoever.
Ordinarily, a receipt is not essential to a
(3) The period of the carriage by air does not
complete delivery of goods to the carrier for
extend to any carriage by land, by sea or by
transportation but, when issued, is competent
river performed outside an aerodrome. If,
and prima facie, but not conclusive,
however, such a carriage takes place in the
evidence of delivery to the carrier. A bill of
performance of a contract for carriage by air,
lading, when properly executed and
for the purpose of loading, delivery or
delivered to a shipper, is evidence that the
transshipment, any damage is presumed,

56 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

subject to proof to the contrary, to have been of a passenger or injury suffered by him, or
the result of an event which took place during of destruction or loss of, or damage to any
the carriage by air. checked baggage or any goods, or of delay
in the transportation by air of passengers,
Article 19. The carrier is liable for damage baggage or goods. This pretense is not
occasioned by delay in the carriage by air of borne out by the language of said Articles.
passengers, luggage or goods. The same merely declare the carrier liable
Article 22 (1) In the carriage of passengers the for damages in the enumerated cases, if the
liability of the carrier for each passenger is conditions therein specified are present.
limited to the sum of 125,000 francs. Where, in Neither said provisions nor others in the
accordance with the law of the Court seised of aforementioned Convention regulate or
the case, damages may be awarded in the form exclude liability for other breaches of
of periodical payments, the equivalent capital contract by the carrier. Under petitioner's
value of the said payments shall not exceed theory, an air carrier would be exempt from
125,000 francs. Nevertheless, by special any liability for damages in the event of its
contract, the carrier and the passenger may absolute refusal, in bad faith, to comply
agree to a higher limit of liability. with a contract of carriage, which is absurd.

(2) In the carriage of registered luggage and of ALITALIA VS. IAC, GR 71929, Dec. 4, 1990:
goods, the liability of the carrier is limited to a The Warsaw Convention however denies to
sum of 250 francs per kilogram, unless the the carrier availment "of the provisions
consignor has made, at the time when the which exclude or limit his liability, if the
package was handed over to the carrier, a damage is caused by his wilful misconduct
special declaration of the value at delivery and or by such default on his part as, in
has paid a supplementary sum if the case so accordance with the law of the court seized
requires. In that case the carrier will be liable of the case, is considered to be equivalent
to pay a sum not exceeding the declared sum, to wilful misconduct," or "if the damage is
unless he proves that that sum is greater than (similarly) caused . . by any agent of the
the actual value to the consignor at delivery. carrier acting within the scope of his
(3) As regards objects of which the passenger employment." The Hague Protocol amended
takes charge himself the liability of the carrier the Warsaw Convention by removing the
is limited to 5,000 francs per passenger. provision that if the airline took all
necessary steps to avoid the damage, it
(4) The sums mentioned above shall be could exculpate itself completely, and
deemed to refer to the French franc consisting declaring the stated limits of liability not
of 65 ½ milligrams gold of millesimal fineness applicable "if it is proved that the damage
900. These sums may be converted into any resulted from an act or omission of the
national currency in round figures. carrier, its servants or agents, done with
intent to cause damage or recklessly and
NORTHWEST AIRLINES, INC. VS. CUENCA, GR L-
with knowledge that damage would probably
22425, Aug. 31, 1965:
result." The same deletion was effected by
Petitioner argues that pursuant to those the Montreal Agreement of 1966, with the
provisions (Arts. 17, 18 & 19 of WC), an air result that a passenger could recover
"carrier is liable only" in the event of death

57 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

unlimited damages upon proof of wilful ignored, depending on the peculiar facts
misconduct. presented by each case.

The Convention does not thus operate as VIII. ACTIONS IN CASE OF BREACH OF
an exclusive enumeration of the instances CONTRACT OF CARRAIGE
of an airline's liability, or as an absolute limit
A. CAUSES OF ACTION AND NATURE/EXTENT
of the extent of that liability. Such a
OF LIABILITY
proposition is not borne out by the
language of the Convention, as this Court SPOUSES FABRE VS. CA, GR 111127, July 26,
has now, and at an earlier time, pointed 1996:
out. Moreover, slight reflection readily leads
to the conclusion that it should be deemed As in the case of BLTB, private respondents
a limit of liability only in those cases where in this case and her co-plaintiffs did not
the cause of the death or injury to person, stake out their claim against the carrier and
or destruction, loss or damage to property the driver exclusively on one theory, much
or delay in its transport is not attributable less on that of breach of contract alone.
to or attended by any wilful misconduct, After all, it was permitted for them to allege
bad faith, recklessness, or otherwise alternative causes of action and join as
improper conduct on the part of any official many parties as may be liable on such
or employee for which the carrier is causes of action so long as private
responsible, and there is otherwise no respondent and her co-plaintiffs do not
special or extraordinary form of resulting recover twice for the same injury. What is
injury. The Convention's provisions, in short, clear from the cases is the intent of the
do not "regulate or exclude liability for other plaintiff there to recover from both the
breaches of contract by the carrier" or carrier and the driver, thus justifying the
misconduct of its officers and employees, or holding that the carrier and the driver were
for some particular or exceptional type of jointly and severally liable because their
damage. Otherwise, "an air carrier would be separate and distinct acts concurred to
exempt from any liability for damages in the produce the same injury.
event of its absolute refusal, in bad faith,
B. PRESCRIPTIVE PERIOD AND CONDITIONS
to comply with a contract of carriage, which
PRECEDENT
is absurd." Nor may it for a moment be
supposed that if a member of the aircraft i. OVERLAND TRANSPORATION OF GOODS
complement should inflict some physical AND COASTWISE SHIPPING
injury on a passenger, or maliciously destroy
or damage the latter's property, the ARTICLE 366. Within the twenty-four hours
Convention might successfully be pleaded as following the receipt of the merchandise, the
the sole gauge to determine the carrier's claim against the carrier for damage or average
liability to the passenger. Neither may the be found therein upon opening the packages,
Convention be invoked to justify the may be made, provided that the indications of
disregard of some extraordinary sort of the damage or average which gives rise to the
damage resulting to a passenger and claim cannot be ascertained from the outside
preclude recovery therefor beyond the limits part of such packages, in which case the claim
set by said Convention. It is in this sense shall be admitted only at the time of receipt.
that the Convention has been applied, or

58 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED
ARGIE ORTIZ DESENGAÑO

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.

PHILIPPINE AMERICAN GENERAL INSURANCE


CO., INC. VS. SWEET LINES, INC., GR 87434,
Aug. 5, 1992:

59 For a brother to my brethren, I' am a TAU KAPPAN; And a man to fellow men, I' am
a TAU KAPPAN! – An excerpt from the TAU KAPPA PHI CREED