San Beda College of Law 54
Memory Aid in Commercial Law
TRANSPORTATION LAWS
Commercial Law Committee
Chairperson: Garny Luisa Alegre Asst. Chairperson:Jayson O’S Ramos EDP: Beatrix I. Ramos Subject Heads:
Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws);
Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre Cu (Law on Intellectual Property)
San Beda College of Law 54
Memory Aid in Commercial Law
Contract of Transportation/ CARRIAGE
F A contract whereby a person, natural or juridical, obligates to transport persons, goods, or both, from one place to another, by land, air or water, for a price or compensation.
F Classifications:
1. Common or Private
2. Goods or Passengers
3. For a fee (for hire) or Gratuitous
4. Land, Water/maritime, or Air
5. Domestic/inter-island/coastwise or International/foreign
? It is a relationship which is imbued with the public interest.
Common Carrier
F Persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public (Art. 1732, Civil Code).
? Art. 1732 of the New Civil Code avoids any distinction between one whose principal business activity is the carrying of persons or goods or both and one who does such carrying only as an ancillary activity (sideline). It also avoids a distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis.
Neither does the law distinguish between a carrier offering its services to the general public that is the general community or population and one who offers services or solicits business only from a narrow segment of the general population.
A person or entity is a common carrier even if he did not secure a Certificate of Public Convenience (De Guzman vs. CA, 168 SCRA 612).
? It makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation should be by motor vehicle. (First Philippine Industrial Corporation vs. CA)
? One is a common carrier even if he has no fixed and publicly known route, maintains no terminals, and issues no tickets (Asia Lighterage Shipping, Inc. vs. CA).
F Characteristics:
1. Undertakes to carry for all people indifferently and thus is liable for refusal without sufficient reason (Lastimoso vs. Doliente, October 20, 1961);
2. Cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in these goods;
3. No monopoly is favored (Batangas Trans. vs. Orlanes, 52 PHIL 455);
4. Provides public convenience.
Private Carrier
F One which, without being engaged in the business of carrying as a public employment, undertakes to deliver goods or passengers for compensation. (Home Insurance Co. vs. American Steamship Agency, 23 SCRA 24)
? TESTS WHETHER CARRIER IS COMMON OR PRIVATE:
F The SC in First Philippine Industrial Corporation vs. CA (1995) reiterated the following tests:
1. It must be engaged in the business of carrying goods for others as a public employment and must hold itself out as ready to engage in the transportation of goods generally as a business and not as a casual occupation;
2. It must undertake to carry goods of the kind to which its business in confined;
3. It must undertake to carry by the method by which his business is conducted and over its established roads; and
4. The transportation must be for hire.
? In National Steel Corp. vs. CA (1997) the SC held that the true test of a common carrier is the carriage of goods or passengers provided it has space for all who opt to avail themselves of its transportation for a fee.
COMMON CARRIER / PRIVATE CARRIER1. As to availability
Holds himself out for all people indiscriminately / Contracts with particular individuals or groups only
2. As to required diligence
Extraordinary diligence is required / Ordinary diligence is required
3. As to regulation
Subject to State regulation / Not subject to State regulation
4. Stipulation limiting liability
Parties may not agree on limiting the carrier’s liability except when provided by law / Parties may limit the carrier’s liability, provided it is not contrary to law, morals or good customs
5. Exempting circumstance
Prove extraordinary diligence and Art. 1733, NCC / caso fortuito, Art. 1174 NCC
6.Presumption of negligence
There is a presumption of fault or negligence / No presumption of fault or negligence
7.Governing law
Law on common carriers / Law on obligations and contracts
GOVERNING LAWS
A. Domestic/inter-island/coastwise
F Applicable to Land, Water, and Air transportation
1. Civil Code - primary
2. Code of Commerce (Arts. 349, 379, 573-734, 580, 806-845) - suppletory
B. International/foreign/overseas (Foreign country to Philippines)
F Applicable to Water/maritime and Air transportation
? The law of the country of destination generally applies.
1. Civil Code - primary
2. Code of Commerce - suppletory
3. Others - suppletory
a. Water/maritime: Carriage of Goods by Sea Act (COGSA)
b. Air: Warsaw Convention
I. NEW CIVIL CODE
(Arts. 1732-1766)
Requirement OF EXTRAORDINARY DILIGENCE
F Rendition of service with the greatest skill and utmost foresight. (Davao Stevedore Co. v. Fernandez)
F Rationale:
1. From the nature of the business and for reasons of public policy (Art. 1733)
2. Relationship of trust
3. Business is impressed with a special public duty
4. Possession of the goods
5. Preciousness of human life
F A common carrier is not an absolute insurer of all risks of travel.
COVERAGE
1. Vigilance over goods (Arts. 1734-1754); and
2. Safety of passengers (Arts. 1755-1763).
PASSENGER
F A person who has entered into a contract of carriage, express or implied, with the carrier. They are entitled to extraordinary diligence from the common carrier.
? The following are not considered passengers, and are entitled to ordinary diligence only:
a. One who has not yet boarded any part of a vehicle regardless of whether or not he has purchased a ticket;
b. One who remains on a carrier for an unreasonable length of time after he has been afforded every safe opportunity to alight;
c. One who has boarded by fraud, stealth, or deceit;
d. One who attempts to board a moving vehicle, although he has a ticket, unless the attempt be with the knowledge and consent of the carrier;
e. One who has boarded a wrong vehicle, has been properly informed of such fact, and on alighting, is injured by the carrier;
f. Invited guests and accommodation passengers. (Lara vs. Valencia)
g. One who rides any part of the vehicle which is unsuitable or dangerous or which he knows is not designed or intended for passengers.
DEFENSES OF A COMMON CARRIER IN THE CARRIAGE OF GOODS
1. CASO FORTUITO/FORCE MAJEURE
F Requisites:
a. Must be the proximate and only cause of the loss
b. Exercise of due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster (Art. 1739)
c. Carrier has not negligently incurred in delay in transporting the goods (Art. 1740)
? Fire is not considered a natural disaster or calamity as it arises almost invariably from some act of man. (Eastern Shipping Lines Inc. vs. IAC)
? Mechanical defects are not force majeure if the same was discoverable by regular and adequate inspections. (Notes and Cases on the Law on Transportation and Public Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.120-122)
2. ACTS OF PUBLIC ENEMY
F Requisites:
a. Must be the proximate and only cause of the loss
b. Exercise of due diligence to prevent or minimize the loss before, during or after the act causing the loss, deterioration or destruction of the goods (Art. 1739)
3. NEGLIGENCE OF THE SHIPPER OR OWNER
a. Sole and proximate cause: absolute defense
b. Contributory: partial defense. (Art. 1741)
4. CHARACTER OF THE GOODS OR DEFECTS IN THE PACKING OR IN THE CONTAINER
F Even if the damage should be caused by the inherent defect/character of the goods, the common carrier must exercise due diligence to forestall or lessen the loss. (Art. 1742)
F The carrier which, knowing the fact of improper packing of the goods upon ordinary observation, still accepts the goods notwithstanding such condition, is not relieved of liability or loss or injury resulting therefrom. (Southern Lines, Inc. v. CA, 4 SCRA 258)
5. ORDER OR ACT OF PUBLIC AUTHORITY
F Said public authority must have the power to issue the order (Art. 1743). Consequently, where the officer acts without legal process, the common carrier will be held liable. (Ganzon v. CA 161 SCRA 646)
? Diligence in the selection and supervision of employees under Article 2180 of the Civil Code cannot be interposed as a defense by the common carrier because the liability of the carriers arises from the breach of the contract of carriage. The defense under said articles is applicable to negligence in quasi-delicts under Art. 2176. (Del Prado v. Manila Electric Co., 52 Phil 900)
Liability OF A COMMON CARRIER for
death or injuries to passengers due to acts of ITS employees and other passengers or strangers
For acts of ITS Employees / FOR ACTS OF OTHER PASSENGERS or STRANGERSRequired diligence and defense
Extraordinary diligence / Ordinary diligence
Nature of liability
Tort; however,
The employee must be on duty at the time of the act. (Maranan v. Perez) / Not absolute; limited by Art. 1763
? The carrier is liable when its personnel allowed a passenger to drive the vehicle causing it to collide with another vehicle resulting to the injuries suffered by the other passengers. (MRR vs. Ballesteros, 16 SCRA 641)
Commercial Law Committee
Chairperson: Garny Luisa Alegre Asst. Chairperson:Jayson O’S Ramos EDP: Beatrix I. Ramos Subject Heads:
Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws);
Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre Cu (Law on Intellectual Property)
San Beda College of Law 54
Memory Aid in Commercial Law
CARRIAGE OF GOODS
/ CARRIAGE OF PASSENGERSParties
1. Common carrier2. Shipper
3. Consignee / 1. Common carrier
2. Passenger
Cause of liability
Delay in delivery, loss, destruction, or deterioration of the goods / Death or injury to the passengersDuration of liability
From the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive them. (Art. 1736)F It remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or owner has made use of the right of stoppage in transitu. (Art. 1737)
F It continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination until the consignee has bee advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. (Art. 1738)
? Delivery of goods to the custom authorities is not delivery to the consignee. (Lu Do v. Binamira, 101 Phil 120) / The duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip, but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. (LRTA v. Navidad, [2003])
F All persons who remain on the premises within a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. (La Mallorca v. CA, 17 SCRA 739 ; Abiotiz Shipping Corporation v. CA, 179 SCRA 95)
F It is the duty of common carriers of passengers to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to enter, and they are liable for injuries suffered from the sudden starting up or jerking of their conveyances while doing so. The duty which the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom (Dangwa Trans Co., Inc. vs. CA 202 SCRA 574).
Presumption of negligence
Art.1735 Civil CodeReason: As to when and how goods were damaged in transit is a matter peculiarly within the knowledge of the carrier and its employees. (Mirasol v. Dollar, 53 PHIL 124)
Mere proof of delivery of goods to a carrier in good order and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima facie case against the carrier. (Coastwise Lighterage Corp. v. CA, 245 SCRA 796) / Art.1755 Civil Code
Reason: The contract between the passenger and the carrier imposes on the latter the duty to transport the passenger safely; hence the burden of explaining should fall on the carrier.
Defenses
1. Ordinary circumstance: Exercise of extraordinary diligence (Art. 1735)2. Special circumstances:
a. Flood, storm, earthquake, lighting, or other natural disaster or calamity (plus force majeure)
b. Act of the public enemy in war, whether international or civil
c. Act or omission of the shipper or the owner of goods
d. The character of the goods or defects in the packing or in the containers
e. Order or act of competent public authority (Art. 1734) / 1. Exercise of extraordinary diligence (Art. 1756)
2. Caso fortuito
Valid stipulations
1. Reduction of degree of diligence to ordinary diligence, provided it be:a) In writing, signed by the shipper or owner;
b) Supported by a valuable consideration other than the service rendered by the carriers; and
c) Reasonable, just and not contrary to public policy. (Art. 1744)
2. Fixed amount of liability: A contract fixing the sum to be recovered by the owner or shipper for the loss, destruction or deterioration of the goods, if it is reasonable and just under the circumstances and has been fairly and freely agreed upon. (Art. 1750)
3. Limited liability for delay: An agreement limiting the common carrier’s liability for delay on account of strikes or riots (Art. 1748)
4. Stipulation limiting liability to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value. (Art. 1749)
? The diligence required in the carriage of the goods may be reduced by only one degree, from extraordinary to ordinary diligence or diligence of a good father of a family. (Art. 1744, Art. 1745, no. 4) / Stipulation limiting liability when a passenger is carried gratuitously, but not for willful acts or gross negligence. (Art. 1758)
Void stipulations
1. That the goods are transported at the risk of the owner or shipper;2. That carrier will not be liable for any loss, destruction or deterioration of the goods;
3. That the carrier need not observe any diligence in the custody of the goods;
4. That the carrier shall exercise a degree of diligence less than that of a good father of a family over the movable transported;
5. That the carrier shall not be responsible for the acts or omissions of his or its employees;
6. That the carrier’s liability for acts committed by thieves or robbers who do not act with grave or irresistible threat, violence or force is dispensed with or diminished;
7. That the carrier is not responsible for the loss, destruction or deterioration of the goods on account of the defective condition of the car, vehicle, ship or other equipment used in the contract of carriage. (Art. 1745) / Dispensing with or lessening the extraordinary responsibility of a common carrier for the safety of passengers imposed by law by stipulation, by posting of notices, by statements on tickets or otherwise. (Art. 1757)
Commercial Law Committee