TRANSPORTATION LAW

COURSE OUTLINE
Atty. Maria Zarah R. Villanueva-Castro

I. PRELIMINARY CONSIDERATIONS

A. Governing Laws
1. New Civil Code
2. Warsaw Convention
3. Code of Commerce
4. Carriage of Goods by Sea Act
5. Salvage Law
6. Public Service Act
7. Article XII, Sec. 11 on operation of public utility

B. Concept of public Utility & public service (Sec. 13, Public Service Act)
C. Constitutional limitations on operation of public utilities (Art. XII, 1987 Constitution)
D. Regulatory Agencies
E. Concept of franchise and certificate of public convenience

CASES: National Development Company vs. CA, August 19, 1998; Tatad vs. Sec. Garcia, April 16,
1995; LTFRB vs. G.V. Florida Transport, Inc., G.R. No. 213088, June 28, 2017

II. GENERAL CONCEPTS

A. Contract of Transportation in general

B. Perfection
C. Common Carrier
1. statutory definition (Art. 1732, NCC1)
2. distinguished from private carrier
3. distinguished from towage, arrastre and stevedoring
4. tests to determine common carrier
5. Parties to the contract of carriage

D. Registered owner rule and Kabit System

CASES: A.F Sanchez Brokerage, Inc. vs. CA G.R. No. 147079, December 21, 2004; Crisostomo vs. CA, August
25, 2003, GR No. 138334; First Phil. Industrial Corp. vs. CA, Dec. 29, 1998; Erezo vs. Jepte, Sept. 30, 1957;
Lim vs. CA, Jan. 16, 2002; Lita Enterprises vs. IAC, April 27, 1984; Nostradamus Villanueva vs. Domingo,
G.R. No. 144274, September 20, 2004; Spouses Hernandez et al vs. Spouses Dolor et al, GR No. 160286, July
30, 2004; Pereña vs. Zarate, 679 SCRA 208, G.R. No. 157917 August 29, 2012; Cruz vs. Sun Holidays, Inc.,
622 SCRA 389, G.R. No. 186312 June 29, 2010; De Guzman vs. Court of Appeals, G.R. No. L-47822 December
22, 1988; Unsworth Transport International [Phils.], Inc. vs. Court of Appeals, 625 SCRA 357, G.R. No.
166250 July 26, 2010; Villamaria, Jr. vs. Court of Appeals, 487 SCRA 571, G.R. No. 165881 April 19, 2006;
Torres-Madrid Brokerage, Inc. vs. FEB Mitsui Marine Insurance Co., Inc., 796 SCRA 142, G.R. No. 194121
July 11, 2016

1 New Civil Code

III. OBLIGATIONS OF THE COMMON CARRIER IN A CONTRACT OF CARRIAGE OF GOODS

A. Vigilance over the goods

1. Duty to exercise extraordinary diligence (Art. 1733, NCC, Articles 363, 364 & 365,
CC2)
2. Presumption of negligence (Art. 1735, NCC)
3. Duration of liability (Art. 1736, 1737 & 1738, NCC)
4. Defenses of common carriers (Art. 1734, 1739, 1740, 1742, & 1743)
a. fortuitous event (Art. 1739, NCC)
b. public enemy (Art. 1739, NCC)
c. improper packing (Art. 1742, NCC)
d. order of public authority (Art. 1743, NCC)

5. Contributory negligence of the shipper (Art. 1741, NCC)

6. Stipulation limiting liability of carrier (Art. 1744, 1748, 1749 & 1750 NCC)
a. Requisites (Art. 1744, 1751, NCC)
b. invalid stipulations (Art. 1745, NCC)
c. effect of delay (Art. 1747, NCC)
d. rule on presumption of negligence despite stipulation (Art. 1752, NCC)

B. Other obligations

1. Duty to accept goods

a. Grounds for valid refusal to accept goods

2. Duty to deliver goods

a. Time of delivery (Art. 358, CC)
b. Consequences of delay (Art. 1740 & 1747, NCC; Art. 370-374, CC)
c. Place of delivery (Art. 360, CC)
d. To whom delivery shall be made (Art. 368 & 369, CC)

CASES: Macam vs. CA, Aug. 25, 1999; Edgar Cokaliong Shipping Lines vs. UCPB General Insurance
Company, June 25, 2003; Eastern Shipping Lines vs. IAC, 150 SCRA 469; Ganzon vs. CA, May 30, 1988;
Philamgen vs. MCG Marine Services, March 8, 2002; Calvo vs. UCPB General Insurance 379 SCRA 510;
Belgian Overseas Chartering vs. Phil. First Insurance Co., 383 SCRA 23

IV. OBLIGATIONS OF THE COMMON CARRIER IN A CONTRACT OF CARRIAGE OF

PASSENGERS

A. Safety of Passengers
1. Duty to observe utmost diligence (Art. 1755, NCC)
2. Duration of liability
3. Presumption of negligence (Art. 1756, NCC)
4. Liability for acts of employees (Art. 1759, NCC)
5. Liability for acts of strangers (Art. 1763, NCC)
6. Effect of stipulation on liability (Art. 1757, 1758,1760, NCC)

B. Liability on passenger’s baggage (Art. 1754, 1998, 2000 to 2003, NCC)

C. Relevant provisions of the Warsaw Convention

1. Binding Effect of the Warsaw Convention

2 Code of Commerce

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 2. Categories of International Air Transportation
3. Liability under the Convention

CASES: Aboitiz Shipping Corporation vs. CA, 179 SCRA 95; Dangwa Transportation vs. CA, 202 SCRA 574;
LRT vs. Navidad, Feb. 6, 2003; La Mallorca vs. CA, July 27, 17 SCRA 739; Phil. Airlines vs. CA, 226 SCRA
423; Pilapil vs. CA, Dec, 22, 1989; Maranan vs. Perez, 20 SCRA 412; Singapore Airlines vs. Andion
Fernandez, 10 December 2003; Bachelor Express vs. CA, July 31, 1990; Mapa vs. CA, July 8, 1998; Sulpicio
Lines, Inc. vs. Sesante, 798 SCRA 459, G.R. No. 172682 July 27, 2016; Sanico vs. Colipano, 841 SCRA 141,
G.R. No. 209969 September 27, 2017; Ramos vs. China Southern Airlines Co., Ltd., 804 SCRA 114, G.R. No.
213418 September 21, 2016; Santos III vs. Northwest Airlines, June 23, 1992; Edna Lhuillier vs. British
Airways, G.R. No. 171092; March 15, 2010

V. OBLIGATIONS OF THE SHIPPER, CONSIGNEE AND PASSENGER

A. Effect of negligence of shipper or passenger (Art. 1741, 1761, 1762, NCC)

B. Payment of freight (Art. 374 & 375, CC)
C. Liability for demurrage

CASES:Isaac vs. A.L. Ammen Transportation, 101 Phil 1046; Compania Maritima vs. CA, Aug. 29, 1988;
PNR vs. CA, Oct. 4, 1985

VI. EXTRAORDINARY DILIGENCE

A. Underlying Reason
B. Effect of Stipulation (Art. 1744, 1757, 1758, & 1760, NCC)
C. Extraordinary diligence in carriage by sea
1. Seaworthiness of the vessel (Sec. 3 [1] & [2] COGSA; Sec. 116 & 119, IC; Art.
609, CC)
2. Overloading
3. Proper Storage
4. Obligation of captain and crew
5. Rule on deviation and transshipment (Art. 359, CC)

D. Extraordinary diligence in carriage by land

1. Vehicle's condition
2. Traffic Rules (See relevant provisions of RA 4136)
3. Obligation to Inspect

E. Extraordinary diligence in carriage by air

CASES: Planters Products, Inc. vs. CA, Sept. 15, 1993; Mecenas, et al. vs. CA, 180 SCRA 83; Brinas vs.
People of the Phils., Nov. 25, 1983; BLTB vs. IAC, Nov. 14, 1988; Batangas Transportation Company vs.
Caguimbal, et al, Jan. 24, 1968; Mallari vs. CA, Jan. 31, 2000; Nocum vs. Laguna Tayabas Bus Company, Oct.
31, 1969; PAL vs. CA, Sept. 15, 1993; Vda. De Abeto vs. PAL, July 30, 1982; Japan Airlines vs. Michael
Asuncion et al, G.R. No. 161730, January 28, 2005; Heirs of Ochoa vs. G&S Transport, G.R. No. 170071,
March 9, 2011

VII. BILL OF LADING AND OTHER FORMALITIES

A. Definition of bill of lading

B. Classes of bill of lading

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 C. Nature of bill of lading (Art. 353, 709 CC; Sec. 3[4] and [5], COGSA)
1. as a contract
a. Basic stipulations in a bill of lading (Art. 350, 707-718, CC; Sec. 4[5]
COGSA)
b. Prohibited stipulations (Art. 1745, NCC)

2. as a document of title (Art. 1508, 1509, 1510, 1513, 1515 NCC)

3. as a receipt

CASES: HE Heacock Company vs. Macondray, Oct. 3, 1921; Ong Yiu vs. CA, June 29, 1979; Sea-Land Service
vs. IAC, Aug. 31, 1987; Citadel Lines vs. CA, Apr. 25, 1990; Everett Steamship Corporation vs. CA, Oct. 8,
1998; Saludo, Jr. vs. CA, 207 SCRA 498; MOF Company, Inc. vs. Shin Yang Brokerage Corporation, 608
SCRA 521, G.R. No. 172822, December 18, 2009

VIII. ACTIONS IN CASE OF BREACH OF CONTRACT OF CARRIAGE

A. Causes of action and nature/extent of liability (culpa contractual, culpa aquiliana and
culpa delictual)

B. Prescriptive period and conditions precedent

1. Overland transportation of goods and coastwise shipping (Art. 366, CC)
2. International carriage of goods by sea (Sec. 3[6]

C. Recoverable Damages

CASES: Fabre vs. CA, July 26, 1996; PhilAmGen Insurance vs. Sweetlines 212 SCRA 194; Ang vs. American
Steamship Agencies, 125 SCRA 543; Mitsui vs. CA, 287 SCRA 366; Fil Merchants vs. Alejandro, 145 SCRA
42; Mayer Steel Pipe Corp. vs. CA, 274 SCRA 432; Dole Phils. vs. Maritime Company of the Phils. Feb. 27,
1987; Pioneer Insurane and Surety Corporation, G.R. No. 226, 345, August 2, 2017; Sulpicio Lines, Inc. vs.
Curso, et al., G.R. No. 157009, March 17, 2010; Philam Insurance Company, Inc. v. Heung-A Shipping
Corporation, et al., G.R. No. 187701, July 23, 2014

IX. MARITIME LAW

A. Concept of Maritime Law

B. Limited liability rule (Art. 587, 590, 643, 837, CC)
1. concept
2. exceptions to the rule
3. abandonment

C. Charter Parties
1. Concept
2. Kinds: bareboat and contract of affreightment
3. Persons qualified to make charter
4. Requisites of a valid charter (Art. 652, CC)
5. Concept of and liability for demurrage
6. Rights and obligations of charter parties

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 D. Loans on Bottomry and Respondentia
1. Definition (Art. 719, CC)
2. Distinguished from ordinary loan
3. Parties to the loan
4. Formalities needed (Art. 720, CC)
5. Effect of loss of on loan (Art. 731, CC)
6. Cases where loan is regarded as simple loan (Art. 726-729, CC)

E. Averages
1. Concept (Art. 806, CC)
2. Classes of average and the persons liable
a. Simple average (Art. 809-810, CC)
b. General average (Art. 811, 812-813, 816-818, 732, 859-861, CC)

F. Collisions
1. Definition
2. Zones in collision (see: doctrine of error in extremis)
3. Rules on liability (Art. 826-832 CC; see: doctrine of inscrutable fault)
4. Limited liability rule (Art. 837, CC)

CASES: Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance Corporation, 217 SCRA
359; Chua Yek Hong vs. IAC, Dec. 14, 1988; Monarch Insurance vs. CA, 281 SCRA 534; PhilAmGen vs. CA,
273 SCRA 262; Vasquez vs. CA, 138 SCRA 553; Abueg vs. San Diego, 77 Phil 730; Luzon Stevedoring vs. CA,
Dec. 3, 1987; Yangco vs. Laserna, Oct. 29, 1941; Macondray vs. Provident Insurance Corporation, GR No.
154305, December 9, 2004; Phil-Nippon Kyoei, Corp. vs. Gudelosao, 796 SCRA 508, G.R. No. 181375 July 13,
2016