TRANSPORTATION LAWS Shipper- gives rise to contract
-Merchants spreading wares to sell goods
-catalyst for law today
Contract of Transportation
-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.
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
Parties to a Contract of Transportation
General Parties – SHIPPER & CARRIER
“Shipper” –passenger
“Carrier “– provider of Transportation from point of Origin
to the point of Destination
Transportation of Things
1) Shipper
2) Carrier
3) Consignee – one who will receive things
*Shipper and Consignee can be one and the same person
*While there may be 3 parties there can only be 2 persons
Transportation of News
2-3 persons
Shipper, Carrier, Consignee
Baliwag Transit v CA – 169 S 849
George – injured passenger
Carrier was remiss in duties from point of origin to point of
destination
-when accident occurs carrier is liable for breach of contract
 George executed a waiver/release of his claims and
received 8k compensation
 Parents complained that 200k was incurred as
medical expenses – they seeked moral damages
COURT: Parents are not proper party in interest; Contract of
Carriage is only between shipper and carrier
Carrier/Conductee – binds himself to transport
Passengers/ Thing/ News
-may be the one employed or engaged in the delivery of
goods (FOR HIRE)
Consignee- to whom goods are delivered by carrier
NOTE: Shipper and Consignee may be one and the same
person
Freight-
1) Payment/ price for carriage (Freightage)
2) May also mean goods which are carried or to be delivered
CONSTITUTIONAL BASIS ART XII Sec 11
No Franchise, certificate, or any other form of
authorization for the operation of a public utility shall be
granted except to citizens of the Philippines or to
corporations or associations organized under the laws of
the Philippines at least sixty per centum of whose capital
is owned by such citizens, nor shall such franchise,
certificate or authorization be exclusive in character or for
a longer period than fifty years.
Neither shall any such franchise or right be granted except
under the condition that it shall be subject to
amendment, alteration, or repeal by the Congress when
the common good so requires. 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 shall be
limited to their proportionate share in its capital, and all
the executive and managing officers of such corporation
or association must be citizens of the Philippines.
Q: May Foreign Corporation own Public Utility?
A: Tatad v Hon Garcia
EDSA LRT – Owned by Foreign Corporation
SC: Ownership and Operation are different
-the tracks, building, carriage are owned by EDSA and not
operate the LRT
1. Any loss/damage due to the operation of the LRT
-DOTC is liable
2. Any loss/damage due to the defect of LRT – Foreign
Corporation is liable
Transportation Laws in the Philippines
ART 1732-1766 of Civil Code
Matters not regulated by the code, common
carriers are covered by the Code of Commerce
and special laws such as the COGSA
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Laws applicable to different kinds of Transportation
LAND TRANSPORTATION
1. Civil Code
2. Code of Commerce (suppletory)
3. Public Service Act
4. RA 4136 – created the Land Transportation Commission
AIR
1. Civil Code
2. Code of Commerce (suppletory)
3. Warsaw Convention
SEA
To Philippines (Inside Territory)
1. Civil Code
2. Code of Commerce (suppletory)
3. Salvage Law
From Philippines (Outside Territory)
1. Law of Destination
2. COGSA – Carriage of Goods by Sea Act
Q: What is a common carrier?
A: Art 1732 – offers service to public
COMMON CARRIERS
Article 1732. Common carriers are persons, corporations,
firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water,
or air, for compensation, offering their services to the
public.
Elements of Common CARRIER
1. Person/Corporatttion/Association/Franchise
2. Engaged in the business of carrying, transporting
passengers, goods or both
3. Means of Transportation is by Land, Water, Air
4. For a fee or compensation
5. Services rendered to public is without distinction
De Guzman v CA - 168 S 612
Occasional, episodic basis may be considered as Common
carrier
SC: Art 1732 does not make any distinction between a
person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis.
Neither does Art 1732 distinguish between a carrier offering
its services to the general public and one who offers
services or solicits business only from a narrow segment of
the general population.
A certificate of public convenience is not necessary to incur
liability as a common carrier. As long as services for
compensation is made one is deemed a common carrier.
Characteristics of a Common Carrier
1) Undertakes to carry for all people differently
2)Cannot lawfully decline to accept goods for carriage Except
for sufficient reasons (mere prejudice or whim will not
suffice)
3) No monopoly is favored
4) It is for public convenience
PRIVATE CARRIER
1.undertakes transportation for particular instance for hire
NOTE: No one can consider himself as a Common Carrier
unless he held himself as a carrier liable for general public
(offers services to anyone)
2.Private carrier is not bound to carry goods except if it
enters into a special agreement
3.
A common carrier public service and subject to regulation
(ex. LTFRB)
A Private carrier does not hold itself as engaged in business
for public
4. Diligence Required
Common Carrier – extraordinary diligence in its obligation
Private Carrier – only exercise diligence of a good father of a
family
Test to Determine nature of Carrier
1) Engaged in the business of carriage of goods for others
2)It must undertake to carry the goods
3)It must undertake to carry by the method by which
business is conducted and over its established roads
4) Transportation must be for hire
ART 1733 Common Carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over goods
and for the safety of the passengers transported by them,
according to all the circumstances of each case.
Such extraordinary diligence in vigilance over the goods is
further expressed in Articles 1734, 1735, and 1745 Nos 5, 6
and 7, while the extraordinary diligence for the safety of
the passengers is further set forth in Articles 1755 and
1756.
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EO Diligence – going over and above
National Trucking and Forwarding Corporation v.
Lorenzo Shipping Corporation
G.R. No. 153563 Feb 07, 2005
ISSUE: Is respondent presumed at fault or negligent
as common carrier for the loss or deterioration of
the goods?
HELD: NO
GR: Yes
However, the presumption of fault or negligence,
may be overturned by competent evidence
showing that the common carrier has observed
extraordinary diligence over the goods.
Article 1733 of the Civil Code demands that a
common carrier observe extraordinary diligence
over the goods transported by it.
Extraordinary diligence is that extreme measure of
care and caution which persons of unusual
prudence and circumspection use for securing and
preserving their own property or rights
This exacting standard imposed on common carriers
in a contract of carriage of goods is intended to tilt
the scales in favor of the shipper who is at the
mercy of the common carrier once the goods have
been lodged for shipment. Hence, in case of loss of
goods in transit, the common carrier is presumed
under the law to have been at fault or negligent.
However, the presumption of fault or negligence,
may be overturned by competent evidence showing
that the common carrier has observed
extraordinary diligence over the goods.
Sps Dante Cruz v Sun Holidays
GR No. 186312; Jun 29, 2010
EO Diligence required of Common Carrier demands
that they take care of goods or lives in their hand as
if it is their own.
Q: Why is Extraordinary Diligence required?
A: Because Common Carriage is a public duty and
impressed with public interest. The public will rely
on the skill and competence of Common carriers.
CARRIAGE OF GOODS
Article 1734. Common carriers are responsible for
the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following
causes only:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner of the
goods;
(4) The character of the goods or defects in the
packing or in the containers;
(5) Order or act of competent public authority.
Liability on Goods (Common Carriers)
GR: For Loss and deterioration, CC is liable
-under Article 1735 the presumption is CC is always
at fault and acted negligently
Q: How do you rebut the presumption?
A: They observed Extraordinary Diligence
Q: Who has the burden of proof?
A: Shippers have the burden of proof that the goods
are lost/destroyed/ suffered deterioration
*The burden of proof is shifted to Common Carriers
where it must show that it exercised EO Diligence as
required by law
Coastwise Lighterage Corporation v. CA
GR No. 1144167 July 12, 1995
*Mere delivery of goods to point of destination
which is damaged brings prima facie case against
carrier.
“CC is presumed already at fault”
-May be rebutted by exercise of EO Diligence
ARTICLE 1734 provides exemptions from liability
IMPORTANT:
CC has duty to properly ship, carry, handle and
exercise due care, consider the nature of goods or
equipment during voyage of shipment. CC may ask
for the value of goods.
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 Shipment made for valuable consideration
*CC can refuse if package is poorly packed
IF he accepts – CC is held liable if any loss, damage or
deterioration may occur.
Regional Container Lines (RCL) of Singapore v The
Netherlands Insurance Company
GR. No. 168151 Sept 4, 2009
Because of the presumption, there is no need for the
express finding of negligence.
-shipper need not prove that CC is at fault because
burden of proof in showing EO diligence is shifted to CC.
VIGILANCE OVER GOODS
Ways for common carrier to be exempted from liability
(1734)
1. FORCE MAJURE
2. ACTS OF PUBLIC ENEMY
3. ACTS/OMISSIONS OF SHIPPER
4.CHARACTER OF GOODS
1734 (1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
ELEMENTS OF FORTUITOUS EVENT -ART 1174
a)the cause of the unforeseen and unexpected
occurrence, or the failure of the debtors to comply with
their obligations, must have been independent of
human will;
(b) the event that constituted the caso fortuito must
have been impossible to foresee or, if foreseeable,
impossible to avoid;
(c) the occurrence must have been such as to render it
impossible for the debtors to fulfill their obligation in a
normal manner; and
(d) the obligor must have been free from any
participation in the aggravation of the resulting injury to
the creditor
To fully free a common carrier from any liability, the
fortuitous event must have been the proximate and
only cause of the loss. And it should have exercised due
diligence to prevent or minimize the loss before, during
and after the occurrence of the fortuitous event.
(Sps Dante Cruz v Sun Holiday)
Q: Defenses of Common Carriers
A: ART1739
1)The proximate and only cause of loss must be natural
disaster
2)Exercise of Due diligence – preventing loss before,
during and after
3)Carrier not negligently incurred delay in transporting
goods
*Proximate cause must be the fortuitous event
Article 1739. In order that the common carrier may be
exempted from responsibility, the natural disaster must
have been the proximate and only cause of the loss.
However, the common carrier must exercise due
diligence to prevent or minimize loss before, during and
after the occurrence of flood, storm or other natural
disaster in order that the common carrier may be
exempted from liability for the loss, destruction, or
deterioration of the goods. The same duty is incumbent
upon the common carrier in case of an act of the public
enemy referred to in article 1734, No. 2.
Q:What is the effect of delay?
A: ART 1740
If the CC negligently incurs in delay in transporting
the goods, a natural disaster shall not free such
carrier from responsibility.
*To make CC liable it must be stated that CC
committed willful or negligent act
EX.
-Shipper wanted CC to ship boxes of goods
-CC was expected to embark on Dec 4
-Goods got wet by reason of a storm
CC is not liable because it delivered the goods on
Dec 5.
There was intervention from the willful and
negligent act of CC and the act of god. Shipper did
not contribute to the loss, destruction or
deterioration.
Q: is Fire a Fortuitous event?
A: No. Because fire arises almost invariably from the
act of man. It does not exempt CC from liability.
Q: Mechanical defect a fortuitous event?
A: Not fortuitous event
1734(2) Act of the public enemy in war, whether
international or civil;
ACTS OF PUBLIC ENEMY
1) Must be the proximate cause and the only cause of loss
2) EO Diligence is exercised by the CC , before, during and
after to minimize the loss
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Q: Pirate a public enemy?
A: Yes. Enemy of all mankind
Q: Terrorist?
A: Yes. Civil and internationally
1734 (3) Act or omission of the shipper or owner of
the goods;
ACTS/NEGLIGENCE OF SHIPPER
-act or omission of Shipper or owner of goods is the
proximate cause
Ex.
Delay in transport of goods is caused by the owner
shipper
Q: May CC be exempted by reason of contributory
negligence of the owner?
A: Under article 1741 No.
Article 1741. If the shipper or owner merely
contributed to the loss, destruction or
deterioration of the goods, the proximate cause
thereof being the negligence of the common
carrier, the latter shall be liable in damages, which
however, shall be equitably reduced.
To fully exempt CC from liability due to Shipper or
owners negligence is willful or negligent
-if merely contributory under 1741 CC will still be
liable, however damages will be equally reduced.
1734(4) The character of the goods or defects in
the packing or in the containers;
CHARACTER OF GOODS/ PACKING IN A
CONTAINER
-to exempt CC form Liabilty
GR: By reason of goods/ packaging as long as the
loss/damage/ deterioration was due to the
character of the goods, CC will be exonerated or not
liable
Article 1742. Even if the loss, destruction, or
deterioration of the goods should be caused by the
character of the goods, or the faulty nature of the
packing or of the containers, the common carrier
must exercise due diligence to forestall or lessen
the loss.
REQTS:
1) Loss, damage, deterioration due to character of
goods or defects in packaging
2) CC must also exercise EO diligence to lessen or
prevent loss
EX. Perishable goods
Saludo v CA
GR No. 95536; March 22, 1992
SC: Carrier is entitled to fair representation of goods to be
delivered. Statements made is taken as is by common
carrier.
*There is no need for inspection; the representations
made by shipper is relied upon and CC need not go
beyond
* CC has no obligation inquire on the correctness of the
representations made
Q: When does the duty to inspect arise?
A: In the event there is
1) Reason to doubt the veracity of statement or
representations made
2) There exists proof that there is cause for inspection or
there danger is present
1734 (5) Order or act of competent public authority.
ORDER/ACT OF PUBLIC AUTHORITY
-due to the destruction or seizure of illegal goods
Ex. Drugs; those infected with disease;
*Those dangerous to life and property may be recalled
Article 1743. If through the order of public authority the
goods are seized or destroyed, the common carrier is not
responsible, provided said public authority had power to
issue the order.
REQTS:
1) Public officer issuing notice has authority under law
-public authority must have the right to issue such orders
*IF WITHOUT legal process, CC is liable
IMPT:
Over and above contractual relations, Police power
prevails
Q: Is Hijacking included in 1734?
A: No.
Acts of thieves and robbers are not included in 1734
which exonerate CC from liability
****
Under ART 1735 CC is presumed to be at fault unless
proved he exercised extraordinary diligence.
Under ART 1745(6)
GR: CC is liable for acts of thieves and robbers
EXC: Act of robbers/thieves is with grave or irresistible
threat, violence or force.
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Article 1745. Any of the following or similar stipulations
shall be considered unreasonable, unjust and contrary to
public policy:
(1) That the goods are transported at the risk of the
owner or shipper;
(2) That the common carrier will not be liable for any
loss, destruction, or deterioration of the goods;
(3) That the common carrier need not observe any
diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of
diligence less than that of a good father of a family, or of
a man of ordinary prudence in the vigilance over the
movables transported;
(5) That the common carrier shall not be responsible for
the acts or omission of his or its employees;
(6) That the common carrier’s liability for acts
committed by thieves, or of robbers who do not act with
grave or irresistible threat, violence or force, is
dispensed with or diminished;
(7) That the common carrier is not responsible for the
loss, destruction, or deterioration of goods on account of
the defective condition of the car, vehicle, ship, airplane
or other equipment used in the contract of carriage.
ARTICLE 1734 – EXCLUSIVE LIST
-if not found within 1734 refer to 1735 – EO diligence must
be exercised
SAFETY PASSENGERS
ART 1755 Duty of CC
-bound to carry passengers safely
-high degree of care and EO diligence is required in carriage
of passengers BECAUSE it is demanded by preciousness of
human beings
Article 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.
Q: What is a passenger?
A: Persons who enters into a contract of carriage whether
express/implied with carrier
- Ordinary diligence of CC is only required
*Any injury or death of a passenger constitutes breach of
contract
Implications/ effects
Q: If passenger boards with knowledge of driver?
A: CC is liable.
-includes concessionaires (peddlers of food etc)
Q: One who boards wrong train or bus?
A: Presumption is that there is a contract of carriage
entered into
Q: If with consent of employees an individual rides on a
dangerous area?
A: If with knowledge of the driver, person is deemed a
passenger.
Q: Are CC still liable if passenger passed his point of
destination?
A: CC must provide safety to its passengers not only
during the course of the trip but for so long as passenger
is within the premises, a contract of carriage exists.
-contract of carriage continues and the persons is
considered as a passenger
Contract of Carriage ends when passenger refused to go
down and is given every reasonable opportunity to alight
from the vehicle.
Q: WHO ARE NOT PASSENGERS?
A:
1) Those who have not yet stepped on any part of the
vehicle
2) Those who refuse to pay
Q: Non payment of fare – are they still considered
passengers?
A: It depends
a)If with intention to pay – Passenger
b)Refused to pay/ No intention of paying
– Not Passenger
3) Those who employ fraud and deceit (even with
payment) – as long as driver is not aware of the on
committing fraud or deceit
Ex. Point of destination is supposed to be only until DAU ,
but passenger stayed until Manila
4) One who attempts to board moving vehicle although
purchased a ticket is not a passenger ( IF W/O
consent of CC)
-unless there is knowledge or negligence found on
the part of the driver
IMPT:
IF W/O Consent
Ex. When boarding a moving vehicle
IF W/ Consent
-person who suffers damage/ injury may file an action
for damages on the ground of Culpa Aquiliana (quasi-
delict)
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Q: What if wrong bus was boarded and person was
informed. Is he still considered a passenger?
A: Yes. But if he suffers damage after, No contract of
Carriage exists
GR: When person alighted from vehicle – not considered
a passenger
EXC: when still within the premises
Presumption of Negligence
-death or injury on passenger, CC is presumed at fault or
acted negligently
BUT CC may rebut by proving exercise of EO Diligence
and that Fortuitous event was the proximate cause of
death or injury
Q: Does CC exercise EO diligence with respect to its
employees?
A:
Philippine Airlines vs. CA 106 SCRA 391
- yes it also extends to crew members because any lapse
of carriers can hold them liable
SC said that PAL is liable, as a common carrier, even
though this is not a breach of common carriage,
because its duty to exercise extraordinary diligence is
not only for the safety of its passengers but also for the
crew.
It let the main pilot fly even though he had a nose
tumor that affected his sinus, breathing and his eyes. As
a result they almost hit Mayon and overshot the
runway. A co-pilot suffered injuries when the aircraft
they were on overshot its landing, and afterwards he
was not referred to expert medical assistance, but
rather left to suffer his dizziness spells and the airline
denying that these were ever brought by the crash
landing. He was then dismissed by the airline because
he couldn't pilot anymore as a result of the disability.
Q: When can CC be liable to passengers?
A:
Driver – recklessness, flagrant violation of elementary
considerations of the road, failure to maintain good working
condition of vehicle
Pilapil v CA ; 180 SCRA 546
While the law requires the highest degree of diligence
from Common Carriers, it cannot make Common
Carriers absolute insurers of passengers safety
RATIONALE: Because not at all times are passengers safe due
to unforeseeable circuimstances
Q: In case of injuries suffered by Passengers, what
causes of action are available to them?
A:
1) institute a civil case based on culpa contractual
(Breach of contract)
2) Institute a criminal case with the civil aspect
based on culpa criminal OR waive and file a
separate civil action
3) Institute an Independent Civil Action based on
the count of physical injuries received as found in
Article 33 of the Civil Code
4) Quasi Delict
Fabre v CA
Gr No. 11127 ; July 26, 1996
Comoon Carrier and driver is jointly and severally
liable because of separate and disitinct acts in
safety of passengers
*Jointly and Severally – anyone may be sought after
ART 2181 Whoever pays for the damage caused by
his dependents or employees may recover from the
latter what he has paid or delivered in satisfaction
of the claim.
Q: May CC apply 2181 such that he exercised the
diligence of a good father of a family in selecting the
proper employees and supervising them properly to
be exonerated from liability?
A: NO. Because the liability of CC arises out of
breach of contract while ART 2181 refers to acts
culpa aquiliana.
Therefore not a ground to exempt CC from liability.
BUTT CC has duty to teach drivers as part of EO
diligence - train crew, drivers and remind them of
the proper rules for driving
KABIT SYSTEM – person granted a certificiate of
public convenience allows others to operate them;
selling or lending franchises
*Not prohibited criminally but such is contrary to
public policy and deemed void and inexistent
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Q: In the event a person uses a franchise and meets an
accident. Who is liable?
A: Registered owner is liable even if vehicle used is sold or
leased to other persons
*Registered owner and driver are jointly and severally
liable to injured parties or third persons
ISSUE: W/N Dangwa should be held liable for the
negligence of its driver Theodore
HELD: YES. CA affirmed.
A public utility once it stops, is in effect making a
continuous offer to bus riders (EVEN when moving as
long as it is still slow in motion)

RATIONALE: If registered owners were allowed to evade -Duty of the driver: do NOT make acts that would have
liability, it would cause problems. the effect of increasing peril to a passenger while he is
There would be a transfer to indefinite persons to one attempting to board the same
who possess no property and in effect may be a way to -Premature acceleration of the bus in this case = breach
circumvent liability of duty
-Stepping and standing on the platform of the bus is
Q: Recourse of the Registered owner? already considered a passenger and is entitled all the
A: File a 3rd party complaint against the owner of the vehicle rights and protection pertaining to such a contractual
to recover civil liability relation
-Duty extends to boarding and alighting
Dangwa Transportation Co. Inc. V. CA Et Al.
GR No. 95582 ; Octover 7,1991 GR: By contract of carriage, the carrier assumes the
express obligation to transport the passenger to his
SC: destination safely and observe extraordinary diligence
1) Stepping and standing on the platform of the bus, he is with a due regard for all the circumstances, and any injury
entitled to rights of a passenger and deemed to have that might be suffered by the passenger is right away
contractual relations of Common carriage attributable to the fault or negligence of the carrier
2) If within Premises of Bus Terminal EXC: carrier to prove that it has exercised extraordinary
-deemed a passenger when purchasing a ticket diligence as prescribed in Art. 1733 and 1755 of the Civil
Code
FACTS:
-May 13, 1985: Theodore M. Lardizabal was driving a Failure to immediately bring Pedrito to the hospital
passenger bus belonging to Dangwa Transportation Co. despite his serious condition = patent and
Inc. (Dangwa) incontrovertible proof of their negligence
-The bus was at full stop bet. Bunkhouses 53 and 54 (Digest from internet)
when Pedro alighted
-Pedro Cudiamat fell from the platform of the bus when *CC has duty to stop when individual boards moving
it suddenly accelerated forward vehicle
-Pedro was run over by the rear right tires of the vehicle
-Theodore first brought his other passengers and cargo
to their respective destinations before bringing Pedro to
Lepanto Hospital where he expired
-Private respondents filed a complaint for damages
against Dangwa for the death of Pedro Cudiamat
-Dangwa: observed and continued to observe the
extraordinary diligence required in the operation of the
co. and the supervision of the employees even as they
are not absolute insurers of the public at large
-RTC: in favour of Dangwa holding Pedrito as negligent
and his negligence was the cause of his death but still
ordered to pay in equity P 10,000 to the heirs of Pedrito
-CA: reversed and ordered to pay Pedrito indemnity,
moral damages, actual and compensatory damages and
cost of the suit

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Article 1736. The extraordinary responsibility of
the common carrier lasts from the time the goods
are unconditionally placed in the possession of,
and received by the carrier for transportation until
the same are delivered, actually or constructively,
by the carrier to the consignee, or to the person
who has a right to receive them, without prejudice
to the provisions of article 1738.
1736 When goods are placed unconditionally in
the possession of CC
Q: When control and possession of goods passes to
the carrier and nothing remains to be done by the
shipper. Effect?
A: Goods are deemed to be in control and  Q: When may it be exercised?
possession of CC
Q: When does the responsibility to deliver goods
terminate?
A: When delivered to the consignee.
Q: When is there Constructive Delivery?
A: When notice has been given to the consignee
that the goods have arrived at the place of
destination
-It must be made known (DUE NOTICE)
IMPLICATION:
Common Carrier is released from exercising Extra
Ordinary Diligence
IMPT:
Because the CC is in control and possession of
goods, his obligation is to deliver and not to delay
the delivery of goods.
Q: If there is misdelivery. What is the effect?
A: It is considered to be undelivered. Responsibility
still attaches to the Common Carrier until it has
delivered to the consignee or person who has a
right to receive them.
MISDELIVERY – Prescriptive period
1) If W/ contract – 10 years
2) If based on QDelict – 4 years
3) If there is loss of cargo – 1 year from cause of
action accrued
Q: If there is temporary unloading.Is CC still required to
exercise EO diligence?
A: YES. Even if temporary unloading of goods is
undertaken, the responsibility of EO diligence is in force
and effect until delivered to the consignee.
EXCEPT: if shipper exercises right of stoppage in transitu
Article 1737. The common carrier’s duty to observe
extraordinary diligence over the goods 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.
* “Stoppage in transitu”
- the act by which the unpaid vendor of goods tops their
progress and resumes possession of them
A: When buyer/purchaser becomes insolvent
Q: What is the effect of Stoppage in transitu?
A: The exercise of Extraordinary Diligence of Common
Carrier cease
-CC is only required to exercise diligence of a good father
of a family, as a bailee/depositary
Article 1738. The extraordinary liability of the common
carrier 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 been
advised of the arrival of the goods and has had
reasonable opportunity thereafter to remove them or
otherwise dispose of them.
Q: Obligation of CC once stored in warehouse?
A:
1)Still exercise EO diligence because it is placed in its
possession until delivery is made to the consignee
2)If placed in warehouse responsibility ceases once notice
is given – consignee must be given a reasonable
opportunity to dispose or hold of them or remove the
goods, otherwise liability of the Common Carrier attaches
as found under ART 1738.
Q: If the goods are with the Bureau of Customs. Does the
responsibility of Extraordinary Diligence still attach?
A:
Amparo Servando v Philippine Steam Navigation Co.
GR No. L-36481-2 ; October 23, 1982
CC will not be liable if goods are in warehouse of BOC
Case: consignee was in process of redeeming goods when
burned or destroyed in the warehouse of BOC
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SC:
The storage of the goods in the Customs warehouse
pending withdrawal thereof by the appellees was
undoubtedly made with their knowledge and consent.
Since the warehouse belonged to and was maintained
by the government, it would be unfair to impute
negligence to the appellant, the latter having no
control whatsoever over the same.
LU DO & LU YM Corp. v I.V. Binamira
G.R. No. L-9840 ; April 22, 1957
ISSUE:
Is the carrier responsible for the loss considering that
the same occurred after the shipment was discharged 3) Valuable consideration other than payment of
from the ship and placed in the possession and custody
of the customs authorities?
SC:
-CC is still liable but such is limited; CC has no control -limit but not totally exempt CC
over the goods of the consignee
-Losing goods by virtue of law of customs, CC has no
control over the same
This is a situation where we may say that the carrier
loses control of the goods because of a custom
regulation and it is unfair that it be made responsible
for what may happen during the interregnum.
*A shipper has no cause of action after a reasonable
opportunity has passed
*CC in turn may claim for demurrage
DEMURRAGE – Charge which is permitted and
recognized not only as payment for added waiting time *The 3 Requisites are necessary under ART 1744 for
but because the usefulness of the object and to
obtain prompt release of goods which interfere with
the general traffic of the carrier
Q: What is the required time of delivery of goods?
A:
1)Within a reasonable time – IF W/O contracted
stipulation
2) Within specified time – IF W/ contract stipulation
Saludo Jr. V CA
G.R. No. 95536; March 23, 1992
SC: Delivery of goods should be within a reasonable time Article 1749. A stipulation that the common carrier’s
in absence of an agreement as to delivery
Q: Why reasonable time?
A: Because CC is not insurer against delay of
transportation of goods
Article 1744. A stipulation between the common carrier
and the shipper or owner limiting the liability of the
former for the loss, destruction, or deterioration of the
goods to a degree less than extraordinary diligence
shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than
the service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
REQTS:
1) In writing and signed by parties
2) Reasonable, just and not contrary to public policy
services to transport
Q: What kind of Valuable Consideration?
A: Reduction of rate of transport/payment
BILL OF LADING
3 Stipulations which limit the liability of CC
1) Exempting the carrier for any and all liability
2) Unqualified limit of liability
3) Limiting liability of CC to agreed valuation unless
shipper declares a higher value
1st and 2nd VOID
3rd VALID
Q: Does it apply to private carriers?
A: Yes it applies.
limitation to be valid
Valenzuela v. CA
172 SCRA 316 ; June 30, 1997
Grounds to limit CC liability
1) Strikes/ riots – legal or illegal has no difference
2) Stipulation limiting the liability of CC to value
Article 1748. An agreement limiting the common carrier’s
liability for delay on account of strikes or riots is valid.
liability is limited to the value of the goods appearing in
the bill of lading, unless the shipper or owner declares a
greater value, is binding.
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 Article 1750. A contract fixing the sum that may be
recovered. by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if
it is reasonable and just under the circumstances,
and has been fairly and freely agreed upon.
ART. 1752. Even when there is an agreement limiting
the liability of the common carrier in the vigilance over
the goods, the common carrier is disputably presumed
to have been negligent in case of their loss,
destruction or deterioration.

REQTS: Q: How to rebut the presumption?

1) Freely agreed upon by parties A: CC must show exercise of EO Diligence
2) Contract is reasonable and just under the
circumstances Q: How to construe stipulation of CC which is couched
in general terms?
Q: Effect of limited liability? A: Limiting liability of CC as an assurer but not in
A: Voidable – valid until annulled by Shipper as found exercise of Extraordinary Diligence
under ART 1746
Q: What are the void stipulations?
Article 1746. An agreement limiting the common A: ART 1745
carrier’s liability may be annulled by the shipper or Any of the following or similar stipulations shall be
owner if the common carrier refused to carry the considered unreasonable, unjust and contrary to
goods unless the former agreed to such stipulation. public policy:
(1) That the goods are transported at the risk of the
*Liability is limited due to acceptance of a voidable owner or shipper;
stipulation – such is voidable at the instance of the (2) That the common carrier will not be liable for any
shipper loss, destruction, or deterioration of the goods
RATIONALE : There may be threat and undue (3) That the common carrier need not observe any
influence on part of CC diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of
Q: What is the effect of a stipulation limiting the diligence less than that of a good father of a family, or
liability of CC by reason of delay of CC or change of of a man of ordinary prudence in the vigilance over the
route? movables transported;
A: Carrier is still liable – cannot avail of contract (5) That the common carrier shall not be responsible
limiting liability if there is violation for the acts or omission of his or its employees;
(6) That the common carrier’s liability for acts
CC Cannot claim liability is limited because there is a committed by thieves, or of robbers who do not act
change of course – CC acted negligently which casued with grave or irresistible threat, violence or force, is
the delay dispensed with or diminished;
(7) That the common carrier is not responsible for the
ART 1751. The fact that the common carrier has no loss, destruction, or deterioration of goods on account
competitor along the line or route, or a part thereof, of the defective condition of the car, vehicle, ship,
to which the contract refers shall be taken into airplane or other equipment used in the contract of
consideration on the question of whether or not a carriage.
stipulation limiting the common carrier’s liability is
reasonable, just and in consonance with public
policy.

Q: Competition with Common Carriers. ART 1751?

A: Even if there is lack of competition,

Q:When there is a stipulation as to the limitation of

liability, what is the presumption?
A: The presumption is that the CC is negligent.

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