TRANSPO LAW - III. COMMON CARRIERS

Question 1

What is the definition of a common carrier?

Answer 1

Art. 1732, NCC - Common carriers are:
a. Persons, corporations, firms or associations,
b. Engaged in the business of carrying or transporting,
c. Passengers or goods or both,
d. By land, water, or air,
e. For compensation,
f. Offering their services to the public.

Question 2

Under the liberal approach, what is the test to determine that the entity is a common carrier?

Answer 2

The test to determine a common carrier is “whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted.” [Bascos v. CA]

Question 3

What is the rationale behind the liberal approach?

Answer 3

Art. 1732 makes no 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.

Art. 1732 also carefully avoids making 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 Article 1732 distinguish between a carrier offering its services to the general public (ie. the general community or population, and one who offers services or solicits business only form a narrow segment of the general population). [De Guzman v. CA]

Question 4

What is a charter-party?

Answer 4

A “charter-party” is defined as a contract by which an entire ship, or some prinicpal part thereof, is let by the owner to another person for a specified time or use;

Charter parties are of two types: (a) a contract of affreightment which involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for others; and (b) charter by demise or bareboat charter, by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and the crew, who are his servants.

In contract of affreightment, the charter-party provides for the hire of the vessel only, either for a determinate period or for a single or consecutive voyage, the shipowner to supply the ship’s stores, pay for the wages of the master and the crew, and defray the expenses for the maintenance of the ship. [PPI v. CA]

Question 5

Does a charter-party between a shipowner and a charterer transform a common carrier into a private one as to negate the civil law presumption of negligence in case of loss or damage to its cargo? (ie. whether a common carrier becomes a private carrier by reason of a charter party.)

Answer 5

It depends on the kind of charter contract. In a contract of affreightment, the common carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only.

However, in a contract of demise or bareboat, a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. [PPI v. CA]

Question 6

Must the carrier be engaged in a business of public transportation for the provisions of the Civil Code on common carriers apply?

Answer 6

No. In Fabre v. CA, the court held, “Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them. As this Court has held:

xxx [Art. 1732] makes no 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 (in local idiom, as a ‘sideline’). Art. 1732 also carefully avoids aking 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,’ i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1732 deliberately refrained from making such distinctions.”

Question 7

What is the test laid down in the case of First Phil. Industrial Corp. (FPIC) v. CA?

Answer 7

FPIC TEST (to determine w/n common carrier)
(1) He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in transportation of goods for person generally as a business and not as a casual occupation;
(2) He must undertake to carry goods of the kind to which his business is concerned;
(3) He must undertake to carry by the method by which his business is conducted and over his established roads; and
(4) The transportation must be for hire.

Question 8

Is a travel agency a common carrier?

Answer 8

No. The object of the contract between a travel agency and passenger is the former’s service arranging and facilitating the latter’s booking, ticketing, and accommodation. On the other hand, the object in a contract of carriage is the transportation of passenger or goods.

A common carrier is defined under Art. 1732 of the Civil Code as 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.

By definition, a contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price. Such person or association of persons are regarded as carriers and are classified as private or special carriers and common or public carriers. [Crisostomo v. CA]

Question 9

Is a customs broker a common carrier?

Answer 9

Under a set of facts may be regarded as a common carrier. In Schmitz Transport & Brokerage Corp., the customs broker was considered as a common carrier because part of the services it offers to its clients as a brokerage firm includes the transportation of cargoes.

In Calvo v. UCPB Gen. Insurance Co. Inc: As the transportation of goods is an integral part of a customs broker, the customs broker is also a common carrier.

Question 10

In Sps. Cruz v. Sun Holidays, why was the resort considered a common carrier?

Answer 10

Sun Holidays is a common carrier because:
(1) Its ferry services are so intertwined with its main business as to be properly considered ancillary thereto;
(2) The constancy of respondent’s ferry services in its resort operations is underscored by having its own Coco Beach boats;
(3) And the tour packages it offers, which include the ferry services, may be availed of by anyone who can afford to pay the same. These services are thus available to the public.

The Civil Code deliberately refrained from making distinctions whether the carrying of persons or goods is the carrier’s principal business, where it is offered on a regular basis, or whether it is offered to the general public. [Sps. Cruz v. Sun Holidays]

Question 11

Is a school bus a private carrier or a common carrier?

Answer 11

Common carrier. The true test of a common carrier is whether the undertaking is a part of the activity engaged in by the carrier that he has held out to the general public as his business or occupation. If the undertaking is a single transaction, not a part of hte general business or occupation engaged in, as advertised and held out to the general pubilc, the individual or the entity rendering such service is a private, not a common, carrier. The question must be determined by the character of the business actually carried on by the carrier, not by any secret intention or mental reservation it may entertain or assert when charged with the duties and obligations that the law imposes.

Applying these considerations, the operators of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over established roads by the method by which the business was conducted; and (c) transporting students for a fee. Despite catering to a limited clientele, the operators operated as a common carrier because they held themselves out as a a ready transportation indiscriminately to the students of a particular school living within or near where they oeprated the service and for a fee.

Question 12

Can an entity be considered as a common carrier even if it does not operate any vessel?

Answer 12

Yes. In Unitrans International Forwarders, Inc. v. Insurance Co. of North America, Unitrans was considered as a non-vessel operating common carrier as it engaged itself “to hand the cargo and to make sure that it was delivered to the consignee from the port of Manila to the consignee.”

Question 13

Is a CPC required to consider an entity as a common carrier?

Answer 13

No. In Heirs of Mendoza v. ES Trucking:

Despite being registered as a private vehicle, the actual use of the vehicle and the clientele to whom the carrier offers its services remain controlling.

The failure to register the vehicle as a public vehicle or a common carrier does not negate the true nature of the vehicle.

A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or other franchise.

Question 14

Nature and basis of liability for common carriers

Answer 14

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 the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the 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.

Question 15

What are the classes of common carriers?

Answer 15

Art. 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.

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 the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the 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.

Art. 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.

Question 16

What is the law applicable to common carriers?

Answer 16

Art. 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws.

Art. 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration.

Question 17

In NDC v. CA (GR No. 49407), the SC ruled that the PH laws governed the in determining the liability of the parties involved in a collision. The collision involved a vessel coming from the NY and a Japanese vessel. One of the vessels was carrying goods to be shipped to Manila.

The SC ruled that PH laws apply even when the collision happened in Japanese waters. Why did the SC rule this way?

Answer 17

NCC, art. 1753.
The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration

Question 18

What is the doctrine of processual presumption?

Answer 18

When the foreign law is not proven in accordance with the Rules of Court.

Under the rules of private international law, a foreign law must be properly pleaded and proved as a fact. In the absence of pleading and proof, the laws of the foreign country or state will be presumed to be the same as our local or domestic law. This is known as processual presumption. [Nedlloyd Lijnen VB Rotterdam v. Glow Laks Enterprises Ltd.]

Question 19

When will common carriers be absolved from the responsibility for loss, destruction, or deterioration of goods?

Answer 19

When the cause of the LDDG are those enumerated under Art. 1734.

Art. 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 of 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.

Question 20

What is the presumption of negligence of common carriers?

Answer 20

Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733.

Question 21

Doctrine: Ynchausti Steamship Company v. Dexter on liability and presumption of negligence of common carrier engaged in common carriage of goods

Answer 21

It was incumbent upon the petitioner in order to entitle it to relief in this case to rebut that presumption by proving, as is alleged in the petition, that the loss was not due to any fault or negligence of the petitioner.
The mere proof of delivery of goods in good order to a carrier, and of their arrival at the place of destination in bad order, makes out a prima facie case against the carrier, so that if no explanation is given as to how the injury occurred, the carrier must be held responsible.
It is incumbent upon the carrier to prove that the loss was due to accident or some other circumstance inconsistent with its liability. (Arts. 361-363, Code of Commerce. )

Question 22

Doctrine: Mirasol v. Robert Dollar Co., GR No. 29721 on liability and presumption of negligence of common carrier engaged in common carriage of goods

Answer 22

Shippers who are forced to ship goods on an ocean liner or any other ship have some legal rights, and when goods are delivered on board ship in good order and condition, and the shipowner delivers them to the shipper in bad order and condition, it then devolves upon the shipowner to both allege and prove that the goods were damaged by the reason of some fact which legally exempts him from liability; otherwise, the shipper would be left without any redress, no matter what may have caused the damage. [Mirasol v. Robert Dollar Co. GR No. 29721]

Question 23

What must be proven so that common carriers can rebut the presumption of negligence?

Answer 23

By proving that the proximate cause of the loss, destruction, or deterioration of the goods is due to any of the circumstances mentioned in Art. 1734, or by proving that the common carrier exercised extraordinary diligence [see Art. 1735 and Lea Mer Industries Inc v. Malayan Insurance Co.].

A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported. To overcome the presumption of negligence, the common carrier must establish by adequate proof that it exercised extraordinary diligence over the goods. [Regional Container Lines of Singapore v. Netherlands Insurance Co. (Phil.), Inc. GR No. 168151]

In this case, RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by law over the goods they transported. Indeed, there is evidence that the fluctuation occurred after the cargo had been discharged by the vessel and was already under the custody of the arrastre operator. HOWEVER, this does not disprove that the condenser fan — which caused the fluctuation of the temperature in the refrigerated container –– was not damaged while the cargo was being unloaded from the ship. They could have presented proof to show that they exercised extraordinary care and diligence in the handling of the goods, but they opted to file a demurrer to evidence.

Question 24

What is extraordinary diligence?

Answer 24

Extraordinary diligence requires rendering service with the greatest skill and foresight to avoid damage and destruction to the goods entrusted for carriage and delivery. [Lea Mer Industries, Inc. v. Malayan Insurance Co.]

Question 25

In case of a natural disaster and goods have been damaged or destroyed, what is the rule in order for the common carrier to be absolved of liability?

Answer 25

Art. 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.

Question 26

When will natural disaster not free the common carrier from liability?

Answer 26

1. When it is not the proximate cause of the loss or destruction; and
2. Art. 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility.

Question 27

Who is liable when the goods are damaged due to rain and sea water because it was stored on deck?

Answer 27

If there is consent of the shipper, the shipper bears the liability.

Where the shipper consents to have his goods carried on deck, he takes the risks of any damage or loss sustained as a consequence of their being so carried. [Martini v. Macondray]

Question 28

Is fire considered as a natural disaster which absolves liability of the common carrier?

Answer 28

No. Fire is not considered as a natural disaster or calamity.

It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier.

As the peril of fire is not comprehended within the exceptions in Article 1734, supra, Article 1735 of the Civil Code provides that in all cases other than those mentioned in Article 1734, the common carrier shall be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the extraordinary diligence required by law. [Eastern Shipping Lines v. IAC]

Question 29

Doctrine in Asia Lighterage and Shipping, Inc. v. CA re: typhoon.

Answer 29

Meeting a typhoon head-on falls short of due diligence required from a common carrier.

Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. They are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. To overcome the presumption, the common carrier must prove that it exercised extraordinary diligence. [Asia Lighterage and Shipping, Inc. v. CA]

Question 30

What does the phrase “perils of the sea” mean?

Answer 30

The phrase “perils of the sea” connotes weather that is “so unusual, unexpected and catastrophic as to be beyond reasonable expectation.”
Accordingly, strong winds and waves are not automatically deemed perils of the sea, if these conditions are not unusual for that particular sea area at that specific time, or if they could have been reasonably anticipated or foreseen.

To be considered absolutory causes under either statute, bad weather conditions must reach a certain threshold of severity.
According to PAGASA, a storm has a wind force of 48 to 55 knots, equivalent to 55 to 63 miles per hour or 10 to 11 in the Beaufort Scale.
Contrastingly, the strong winds accompanying the southwestern monsoon could not be classified as a “storm.” Such winds are the ordinary vicissitudes of a sea voyage.
[Transimex Co. v. Mafre Asia Insurance Corp.]

Question 31

In case there is negligence on the part of the shipper or owner of the goods, what is the effect on the liability of the parties?

Answer 31

Look at the proximate cause of the loss (and note the duty to exercise extraordinary diligence); but note that

Art. 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.

Question 32

What are the requisites for the application of the rule on “act of public enemy” as a circumstance absolving the common carrier from liability?

Answer 32

Act of public enemy
Requisites
a. The act of the public enemy was committed either in an international or civil war [Art. 1734 (2), NCC];
b. The act of the public enemy must have been the proximate and only cause; and
c. The common carrier must exercise due diligence to prevent or minimize the loss before, during and after the act of the public enemy causing the loss, destruction or deterioration of the goods [Art. 1739, NCC].

Question 33

Are thieves, rioters, robbers, and insurrectionists considered as public enemies?

Answer 33

Thieves, rioters, robbers, and insurrectionists, though at war with social order, are not in a legal sense classed as public enemies, but are merely private depredators for whose acts a carrier is answerable. Pirates on the high seas, however, stand as an exception to this rule. They are considered the enemies of all civilized nations, and indeed of the human race, and consequently their depredations on a common carrier will excuse him from liability [Aquino].

Question 34

Art. 361, Code of Commerce

Answer 34

Article 361, Code of Commerce.
Merchandise shall be transported at the risk and venture of the shipper, if the contrary was not expressly stipulated.
Therefore, all damages and impairment suffered by the goods during the transportation, by reason of accident, force majeure, or by virtue of the nature or defect of the articles, shall be for the account and risk of the shipper.
The proof of these accidents is incumbent on the carrier.

Question 35

Rules when there is damage due to act or omission of the shipper or owner

Answer 35

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:
(3) Act or omission of the shipper or owner of the goods;

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.

NOTE: The act or omission of the shipper must have been the proximate and only cause of the loss, destruction, or deterioration of the goods.

Question 36

In Philippine Charter Insurance Corp. v Unknown Owner of Vessel M/V National Honor, why did the court rule that the arrastre operator, ICTSI was not liable?

Answer 36

The Court held that under Article 1734 (par. 4) of the New Civil Code, the presumption of negligence does not apply if the loss, destruction or deterioration of the goods was due to act or omission of the shipper or owner of the goods.

In this case, both the trial court and the appellate court declared that based on the record, the loss of the shipment was caused by the negligence of the petitioner as the shipper. The breakage of the crate was not due to the fault or negligence of ICTSI, but to the inherent defect and weakness of the materials used in the fabrication of the crate.

The shipper should have used materials of stronger quality to support the heavy machines. Not only did the shipper fail to properly pack the cargo, it also failed to indicate signs to notify the stevedores that extra care should be employed in handling the shipment and it also failed to indicate an arrow in the middle portion of the cargo where additional slings should be attached. The Court thus denied the petition for lack of merit.

Question 37

Rules governing the “character of goods” as a circumstance to absolve the common carrier of liability

Answer 37

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: [xxx]
(4) The character of the goods or defects in the packing or in the containers

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.

Article 366, Code of Commerce.
Within the twenty-four hours following the receipt of the merchandise a claim may be brought against the carrier on account of damage or average found therein on opening the packages, provided that the indications of the damage or average giving rise to the claim can not be ascertained from the exterior of said packages, in which case said claim would only be admitted on the receipt of the packages.

After the periods mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered.

Question 38

What is the period by which a person may file a claim against the common carrier on account of damage or average found in the opening of the packages of the cargo?

Answer 38

1. If damage cannot be ascertained from exterior of package: Within 24hrs following the receipt of the merchandise;
2. If damage can be ascertained from exterior of package: upon receipt of the packages

NOTE effect when periods have lapsed: After the periods mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered

SOURCE: Art. 366, Code of Commerce

Question 39

What are the requisites for the character of goods to be a circumstance absolving liability of the common carrier?

Answer 39

Character of the goods
Requisites
a. The loss, destruction, or deterioration of the goods is due to the character of the goods or defects in the packing or in the containers [Art. 1734 (4), NCC]; and

b. The common carrier must exercise due diligence to forestall or lessen the loss [Art. 1742, NCC].

If the fact of improper packing is known to the carrier or its servants or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom [Southern Lines v. CA, G.R. No. L- 16629 (1962)].

Question 40

In Government v. Ynchausti, why did the court rule that Ynchausti, owner of the vessel, was not liable for the damage caused to the cargo of roofing tiles?

Answer 40

The defendant proved, and the plaintiff did not attempt to dispute, that the roofing tiles in question were of a brittle and fragile nature. They were delivered by the plaintiff to the defendant in bundles of ten each, tied with bejuco [rattan], without any packing or protective covering.

Question 41

In Southern Lines v. CA, why did the court rule that Southern Lines, the common carrier, was liable for the damage which was the shirnkage, leakage, and spillage of the rice even when the sacks of the rice were in bad condition?

Answer 41

The Court disagreed with Southern Line’s defense that the shortage was due to the shrinkage, leakage, spillage of the rice on account of the bad condition of the sacks because it nevertheless accepted the shipment with knowledge of the alleged bad condition of the sacks. [Southern Lines v. CA]

Question 42

Is the common carrier absolved from liability from damage of goods if the damage was caused by improper packaging?

Answer 42

Not in all cases.

● The rule for Art. 1734(4) is that if the improper packing or, in this case, the defect’s is/are known to the carrier or his employees or apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for damage resulting therefrom. [Calvo v. UCPB]

Question 43

What are the governing rules for “order of competent authority” to be a circumstance which absolves the common carrier from liability?

Answer 43

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:
(5) Order or act of competent public authority.

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.

Question 44

What are the requisites for “order of competent authority?”

Answer 44

Order of competent authority
Requisites
a. There must be an order or act of competent public authority through which the goods are seized or destroyed [Art. 1734 (5), NCC]; and

b. The said public authority must have had the power to issue the order [Art. 1743, NCC].

Before a common carrier could be absolved from responsibility on the ground that they were ordered by competent public authority to do such act that leads to the loss or deterioration of the goods, it must be shown that public authority had the power to issue the disputed order, or that it was lawful, or that it was issued under legal process of authority. [Ganzon v. CA, G.R. No. L-48757 (1988)].

Question 45

In Ganzon v. CA, why did the Court rule that the mayor’s order to dump the cargo not withini the purview of “order of competent authority?”

Answer 45

The Court held that before the Ganzon could be absolved from responsibility on the ground that he was ordered by competent public authority to unload the scrap iron, it must be shown that Acting Mayor Rub had the power to issue the disputed order, or that it was lawful, or that it was issued under legal process of authority. Ganzon failed to establish this.

Indeed, no authority or power of the acting mayor to issue such an order was given in evidence. Neither has it been shown that the cargo of scrap iron belonged to the Municipality of Mariveles.

In any case, the intervention of the municipal officials was not, in any case, of a character that would render impossible the fulfillment by the carrier of its obligation. Ganzon was not duty bound to obey the illegal order to dump into the sea the scrap iron. CA decision and award of damages is affirmed. [Ganzon v. CA]

Question 46

May a common carrier invoke fortuitous event to be absolved from liability?

Answer 46

Yes, but the common carrier must prove:
i. That it was not negligent in causing the death or injury resulting from an accident; [Yobido v. CA, G.R. No. 113003 (1997)]

ii. That the loss or destruction of the merchandise was due to accident and force majeure and not fraud, fault, or negligence on the part of the captain or owner of the ship [Tan Chiong Sian v. Inchausti, G.R. No. L-6092 (1912)].

Question 47

What are the characteristics of a fortuitous event?

Answer 47

A fortuitous event has the following characteristics:

a. The cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent of human will;

b. It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid;

c. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and

d. The obligor must be free from any participation in the aggravation of the injury resulting to the creditor.

Question 48

What are the provisions governing Duration of Extraordinary Diligence?

Answer 48

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.

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.

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.

Question 49

What are the instances when carrier has responsibility to exercise extraordinary diligence?

Answer 49

Instances when carrier has responsibility to exercise extraordinary diligence:
a. From the time the goods are unconditionally placed in the possession of, and received by the carrier [Art 1736, NCC] or its authorized agent [Compania Maritima v. Insurance Co., G.R. No. L- 18965 (1964)], until the same are delivered actually and constructively by the carrier to the consignee or to the person who has a right to receive them;
b. When goods are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in transitu [Art 1737, NCC];
c. During storage in a warehouse of the carrier at the place of destination, until consignee has been advised of the arrival of the goods and has had reasonable opportunity to remove or dispose them [Art 1738, NCC].

Question 50

As regards determining the duration of extraordinary diligence, what are the two aspects of a contract of common carriage, and why is it important to distinguish between them?

Answer 50

In dealing with the contract of common carriage of passengers, for purpose of accuracy, there are two (2) aspects of the same, namely:
a) Contract ‘to carry (at some future time),’ which contract is consensual and is necessarily perfected by mere consent; and
b) Contract ‘of carriage’ or ‘of common carriage,’ which should be considered as a real contract for not until the carrier is actually used can the carrier be said to have already assumed the obligation of a carrier [Paras, Civil Code Annotated, 11th Ed].
Note: The distinction is important in determining when the common carrier is required to exercise extraordinary responsibility. The birth of the contract is not necessarily the birth of the duty to exercise extraordinary responsibility.

Question 51

Does constructive delivery by the common carrier to the shipper/consignee extinguish extraordinary responsibility?

Answer 51

Yes, see Art. 1736.

Constructive delivery: Notice by the CC that the cargo had already arrived, placing them at the disposal of the shipper or consignee releases CC from extra-ordinary
responsibility. From such moment the consignee or shipper should exercise over the cargo the ordinary control pertinent to ownership (should unload cargo from the CC)

Question 52

What are the rules governing the agreement limiting liability as to the diligence required?

Answer 52

As to diligence required
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.

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 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier’s liability is reasonable, just and in consonance with public policy.

Question 53

What are the requirements in order for a stipulation between the common carrier and the shipper/owner to limit the liability of the former for the loss, destruction, or deterioration of the goods to a DEGREE LESS THAN EXTRAORDINARY DILIGENCE to be valid?

Answer 53

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.

Question 54

What are void stipulation in agreements limiting liability of the common carrier to a degree less than ExDil?

Answer 54

Void Stipulations
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 [Art. 1745, NCC];
8. That the common carrier is exempt from any and all liability for loss or damage occasioned by its own negligence;
9. Stipulation providing for an unqualified limitation of such liability to an agreed stipulation [Heacock v. Macondray, G.R. No. L-16598 (1921)].

Question 55

Does the presence of an agreement limiting liability override the presumption of negligence upon a common carrier?

Answer 55

No.

Article 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.

Question 56

What are the factors affecting the agreement limiting the liability of the common carrier?

Answer 56

Factors affecting agreement

[Shipper’s right to annul] Article 1746. An agreement limiting the common carrier’s liability may be annulled by the shipper or owner if the common carrier refused to carry the goods unless the former agreed to such stipulation.

[Delay of transportation/Changes in route] Article 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the stipulated or usual route, the contract limiting the common carrier’s liability cannot be availed of in case of the loss, destruction, or deterioration of the goods.

[Limitation of liability on account of strikes/riots] Article 1748. An agreement limiting the common carrier’s liability for delay on account of strikes or riots is valid.

[Lack of competitor in route] Article 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier’s liability is reasonable, just and in consonance with public policy.

[Presumption of negligence] Article 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.

Question 57

May the liability of a common carrier be limited to a fixed amount?

Answer 57

Yes. Limitation of Liability to Fixed Amount
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:
1. It is reasonable and just under the circumstances; and
2. It has been fairly and freely agreed upon [Art. 1750, NCC].

[Agreement in contract of adhesion valid] - While a passenger may not have signed the plane ticket, he is nevertheless bound by the provision thereof, regardless of the latter’s lack of knowledge or assent to the regulation. It is what is known as a contract of adhesion wherein one party imposes a ready-made form of contract on the other. The one who adheres to the contract is in reality free to reject it entirely. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence [Ong Yiu v. CA, G.R. No. l-40597 (1979)].

[If unreadable, cannot be presumed that shipper was aware] - [However], the fact that the conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the [shipper] was aware of those conditions such that he had “fairly and freely agreed” to those conditions [Shewaram v. PAL, G.R. No. L-20099 (1966)].

Question 58

According to Heacock v. Macondray, what are the stipulations often placed in bills of lading that are void, and what are valid?

Answer 58

Heacock v. Macondray (1921):
Three kinds of stipulations often made in a bill of lading:
1) Exempting the carrier from any and all liability for loss or damage occasioned by its own negligence, [VOID]
2) Providing for an unqualified limitation of such liability to an agreed valuation, [VOID] and
3) Limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. [VALID]

Question 59

Are agreements limiting liability printed on the back of the ticket binding?

Answer 59

Generally, yes. However, if it is too small and hard to read, it may not be presumed that the passenger has read them.

PAL’s liability is in accordance with the stipulation written on the back of the ticket – it is limited to P100.00 per baggage since the petitioner did not declare a greater value nor called the attention of the respondent to the true value of the luggage. While the petitioner may not have signed the plane ticket, “such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter’s lack of knowledge or assent to the regulation” – it is a contract of adhesion. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence (Ong Yiu v. CA)

If text too small: It cannot be said that the appellee had actually entered into a contract with the appellant, embodying the conditions as printed at the back of the ticket stub that was issued by the appellant to the appellee. The fact that the conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the [shipper] was aware of those conditions such that he had “fairly and freely agreed” to those conditions. [Sheweram v. PAL]

Question 60

Is the enumeration in the Warsaw Convention of instances for declaring a carrier liable for breach of contract of carriage exclusive?

Answer 60

No. The Warsaw Convention does not operate as an exclusive enumeration of the instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of that liability. [Cathay Pacific Airways, Ltd. v. CA]

Question 61

May there be an agreement to limit the liability of the common carrier as to delay in delivery?

Answer 61

No. The Court held that the exemption against liability for delay is against public policy and is thus, void. [Maersk v. CA]

Question 62

Absent any stipulation on the specific date or time of delivery of the cargo, what is the rule?

Answer 62

While it is true that common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation to deliver at a given date or time, delivery of shipment or cargo should at least be made within a reasonable time. [Maersk v. CA]

Question 63

What is the obligation of the common carrier as to the safety of the passengers?

Answer 63

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.

Extraordinary diligence
Requires carrying 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 [Art. 1755, NCC].

Question 64

Is the common carrier the “insurer of the safety of its passengers?”

Answer 64

No. A common carrier is not an insurer of the safety of its passengers and is not bound absolutely and at all events to carry them safely and without injury [Yobido v. CA, G.R. No. 113003 (1997)].

Question 65

In case of death of or injuries to the passengers, what is the rule on common carriers?

Answer 65

In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence [Art. 1756, NCC].

Question 66

What must the common carrier prove when injuries are caused to a passenger resulting from an accident due to force majeur?

Answer 66

It is not enough that the accident was caused by force majeure, the common carrier must still prove that it was not negligent in causing the injuries resulting from such accident [Bachelor Express v. CA, G.R. No. 85691 (1990)]. Bachelor Express illustrates that force majeure is not itself a defense; the exercise of the diligence required by law is the defense.

Question 67

Based on the Civil Code provisions, what are the principles governing the liability of a common carrier?

Answer 67

Based on the Civil Code provisions, the principles governing the liability of a common carrier are that:

o the liability of a carrier is contractual and arises upon breach of its obligation;
o there is breach if it fails to exert extraordinary diligence according to all the circumstances of each case; a carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having due regard for all the circumstances;
o a carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to, passengers, it being its duty to prove that it exercised extraordinary diligence; and
o the carrier is not an insurer against all risks of travel.
[Isaac v. A.L. Ammen Trans. Co., Inc. (1957)]

Question 68

Who is negligent when the passenger voluntarily or inadvertently protruded his arm, hand, elbow, or any part of his body through the window of a moving car?

Answer 68

Passenger

It is the prevailing rule that it is negligence per se for a passenger on a railroad voluntarily or inadvertently to protrude his arm, hand, elbow, or any other part of his body through the window of a moving car beyond the outer edge of the window or outer surface of the car, so as to come in contact with objects or obstacles near the track, and that no recovery can be had for an injury which but for such negligence would not have been sustained. [Isaac v. A.L. Ammen Trans. Co., Inc. (1957)]

Question 69

When an accident is caused by defects in the automobile, may the common carrier invoke fortuitous event as cause to absolve them of liability?

Answer 69

No. An accident caused by defects in the automobile is not a caso fortuito. The rationale of the carrier’s liability is the fact that “the passenger has neither the choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier.” [Sps. Landingin v. Pangasinan Transportation (1970)]

Question 70

What is the presumption when a passenger dies or is injured?

Answer 70

● When a passenger dies or is injured, the presumption is that the common carrier is at fault or that it acted negligently. This presumption is only rebutted by proof on the carrier’s part that it observed the “extraordinary diligence” required in Article 1733 and the “utmost diligence required of a very cautious person.” [Sps. Landingin v. Pangasinan Transportation (1970)]

Question 71

Is the duty to exercise utmost diligence applicable with respect to members of the crew of a common carrier?

Answer 71

Yes. ● The law is clear in requiring a common carrier to exercise the highest degree of care in the discharge of its duty and business of carriage and transportation under Arts. 1733, 1755 and 1756 of the NCC. The duty to exercise the utmost diligence on the part of common carriers is for the safety of passengers as well as for the members of the crew or the complement operating the carrier, the airplane in the case at bar. And this must be so for any omission, lapse or neglect thereof will certainly result to the damage, prejudice, nay injuries and even death to all aboard the plane, passengers and crew members alike. [PAL v. CA (1981)]

Question 72

In JAL v. Asuncion, why was the common carrier absolved of liability?

Answer 72

Because JAL exercised its duty to accommodate its passengers. However, it was Japan that did not allow the passengers to enter the place.

Question 73

What law governs the duration of responsibility for common carriers of passengers?

Answer 73

Same with common carriage of goods.

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.

Question 74

According to the Warsaw Convention, when does the duty of the common carrier for injury to the passenger last?

Answer 74

Art. 17, Warsaw Convention, which applies to international air carriage, provides that the liability of a common carrier for injury to the passenger lasts from embarkation to disembarkation, including the period when the passenger is on board the aircraft.

Question 75

What is the relief of the passenger when a voyage has already begun and such voyage is interrupted?

Answer 75

In maritime commerce, Art. 698, Code of Commerce relates to the period of the voyage:

1. In case a voyage already begun should be interrupted:
   a. The passengers shall be obliged to pay the fare in proportion to the distance covered; and
   b. Have the following reliefs:

Cause of interruption Relief
An accidental cause or force majeure –> Without right to recover for losses and damages

By the captain exclusively –>With a right to indemnity

(1) Caused by the disability of the vessel and
(2) A passenger should agree to await the repairs –> (a) He may not be required to pay any increased price of passage; but (b) His living expenses during the stay shall be for his own account.

Question 76

What is the relief of passengers in case in the voyage, there is a delay in the departure of the vessel?

Answer 76

In maritime commerce, Art. 698, Code of Commerce relates to the period of the voyage:

In case of delay in the departure of the vessel, the passengers have:

a. The right to remain on board;
b. If the delay is not due to a fortuitous event or force majeure, the right to be furnished with food for the account of the vessel;
c. If the delay should exceed ten days:

i. Passengers requesting the same shall be entitled to the return of the fare; and
ii. If it is due exclusively to the fault of the captain or ship agent, they may also demand indemnity for losses and damages.

Question 77

What is the responsibility of the common carrier with respect the passengers waiting or boarding a carrier?

Answer 77

Waiting for Carrier or Boarding of Carrier
The duty that the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom.

It is the duty of common carriers of passengers to stop their conveyances at a reasonable length of time in order to afford passengers an opportunity to board and enter:
1. Carriers are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so [Dangwa Transportation v. CA, G.R. No. 95582 (1991)]

2. However, a person boarding a moving car must be taken to assume the risk of injury from boarding the car under the conditions open to his view. Nonetheless, he cannot fairly be held to assume the risk that the motorman, having the situation in view, will increase the peril by accelerating the speed of the car before he is planted safely on the platform [Del Prado v. Manila Electric Company, G.R. No. L-29462 (1929)].

Question 78

When does the extraordinary responsibility of common carriers begin with respect to trains and/or carriage by sea?

Answer 78

The extraordinary responsibility of common carriers commences:

i. With respect to carriage of passengers by trains: The moment the person who purchases the ticket from the carrier presents himself at the proper place and in a proper manner to be transported with a bona fide intent to ride the coach [Aquino citing Vda. De Nueca, et al. vs. Manila Railroad Company].
ii. With respect to carriage of passengers by sea: As soon as the person with bona fide intention of taking passage places himself in the care of the carrier or its employees and is accepted as passenger [Aquino].

Question 79

Does the responsibility of the carrier cease the moment the passenger alights the carrier?

Answer 79

Arrival at Destination
The relation of carrier and passenger does not cease at the moment the passenger alights from the carrier’s vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier’s premises. What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances such as the kind of common carrier, the nature of its business, the customs of the place, and so forth, and therefore precludes a consideration of the time element per se without taking into account such other factors.

Question 80

What is the duty of the driver with regard to a passenger who attempts to board a car or alight from it?

Answer 80

● It is a driver’s duty not to do an act that would increase the passenger’s peril as he attempts to board a car or alight from it. [Del Prado v. Manila Electric Co. (1929)]

Question 81

What are the rules laid down in La Mallorca v. CA?

Answer 81

● The relation of carrier and passenger does not cease at the moment the passenger alights from the carrier’s vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier’s premises
● What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Thus,
o 1. A person who, after alighting from a train, walks along the station platform is considered still a passenger; (Keefe vs. Boston)
o 2. A passenger, who has alighted at his destination and is proceeding by the usual way t leave the company’s premises, but before actually doing so is halted by the report that his brother, a fellow passenger, has been shot, and he in good faith and without intent of engaging in the difficulty, returns to relieve his brother, is deemed reasonably and necessarily delayed and thus continues to be a passenger entitled as such to the protection of the railroad and company and its agent (Layne vs. Chesapeake)

Question 82

In Vda. de Bataclan v. Medina, what was the negligent act of the bus driver?

Answer 82

In Vda. de Bataclan v. Medina, the driver was negligent because:
1. The bus was speeding before the accident occurred;
2. The old tires were not replaced despite being instructed by the owner;
3. The driver failed to inform the men carrying torches about the gasoline leak.

Question 83

When a passenger who has already disembarked from a ship but returns to the ship because he forgot his luggage, and in the process was injured, will the ship still be held liable?

Answer 83

Yes. In Abotizing Shipping Corp. v. CA (1989)

Even if he had already disembarked an hour earlier, his presence in petitioner’s premises was not without cause. He had to claim his baggage which was possible only one hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner’s vessels that the unloading operations shall start only after that time. Consequently, under the foregoing circumstances, the victim is still deemed a passenger of said carrier at the time of his tragic death.

● The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier’s premises to claim his baggage.

Question 84

In PAL v. CA (1993), PAL argued that it should not be charged with the task of looking after the passenger’s comfort and convenience because the diversion off the flight was due to a fortuitous even. Why did the Court rule that PAL was still liable?

Answer 84

PAL’s diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such occurrence did not terminate PAL’s contract with its passengers. Being in the business of air carriage and the sole one to operate in the country, PAL is deemed equipped to deal with situations as in the case. The relation of carrier and passenger continues until the latter has been landed at the port of destination and has left the carrier’s premises. PAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have reached their final destination. [PAL v. CA (1993)]

Question 85

What circumstances give rise to the presumption of a common carrier in a contract of carriage of passengers?

Answer 85

The following gives rise to a presumption of negligence against the carrier:
For carriage of passengers
i. Death of passenger/s, or
ii. Injury to passenger/s
Note: Mere failure to reach one’s destination, without injury or death, does not raise the presumption of negligence because it does not involve safety of the passengers.

Question 86

Does mere failure to reach one’s destination give rise to the presumption of negligence?

Answer 86

No. Mere failure to reach one’s destination, without injury or death, does not raise the presumption of negligence because it does not involve safety of the passengers.

Question 87

What is the effect of the presumption of negligence?

Answer 87

Effects of Presumption
* Makes out a prima facie case against the carrier
* Makes it incumbent upon the carrier to prove that the loss/death/injury was due to some other circumstance inconsistent with its liability, or that it observed extraordinary diligence [Art. 1756, NCC; Ynchausti Steamship v. Dexter and Unson, G.R. No. L-15652 (1920)]

Question 88

What are the elements of Force Majeure?

Answer 88

● Elements of Force Majeure:
(1) the cause of the breach of the obligation must be independent of the human will;
(2) the event must be either unforeseeable or unavoidable;
(3) the occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner; and (4) the obligor must be free of participation in, or aggravation of, the injury to the creditor.
[Fortune Express v. CA]

Question 89

What is the effect of the absence of an element?

Answer 89

● The absence of any of the requisites mentioned above would prevent the obligor from being excused from liability. (Yobido v. Court of Appeals, cited in Fortune Express v. CA)

Question 90

What are the rules governing the limitation of liability of common carriers engaged in carriage of passengers?

Answer 90

Article 1757. The responsibility of a common carrier for the safety of passengers as required in articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise.

Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier’s liability for negligence is valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carrier’s liability.

THUS:
General rule: The responsibility of a common carrier for the safety of passengers cannot be dispensed with or lessened by stipulation by the posting of notices, by statements on tickets, or otherwise [Art. 1757, NCC].

Exception: When a passenger is carried gratuitously, a stipulation limiting the common carrier’s liability for negligence is valid [Art 1758, NCC].

Exception to the exception: Even when a passenger is carried gratuitously, a stipulation limiting the common carrier’s liability for willful acts or gross negligence is invalid [Art 1758, NCC].

The reduction of fare does not justify any limitation of the common carrier’s liability [Art. 1758, NCC].

Question 91

What are the rules governing the responsibility of common carriers for the acts of their employees?

Answer 91

Article 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the former’s employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees.

Article 1760. The common carrier’s responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or otherwise.

Question 92

Why is the common carrier responsible for the acts of his/her employees? And why is the exercise of diligence of a good father of a family in selection of employees an inapplicable defense?

Answer 92

Ratio: The servant is clothed with delegated authority and charged with the duty to execute the carrier’s undertaking to carry the passenger safely [Agbayani]. Also, the defense of diligence in the selection and supervision of employees does not obtain because the liability is not based on quasi-delict, but on culpa contractual. However, there must be a reasonable connection between the act and the contract of carriage.

Note: The employee must be on duty at the time of the act.

Question 93

Will the employer be absolved from liability if the injury caused by the employee was done in excess of authority or in disobedience of the carrier’s orders?

Answer 93

No. It is enough that the assault happens within the course of the employee’s duty. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier’s orders. [Maranan v. Perez, G.R. No. L-22272 (1967)].

Question 94

When will common carrier employer be exempt from responsibility for acts of its employees?

Answer 94

Force majeure.

Exception: A common carrier is not responsible for acts falling under force majeure. When a party is unable to fulfill his obligation because of force majeure, he cannot be held liable for damages for nonperformance [Japan Airlines vs. CA, G.R. No. 118664 (1998)].
Note: In order to be exempted from liability due to a fortuitous event, a common carrier must still prove a complete exclusion of human agency from the cause of injury or death. Hence, it was held that the explosion of the new tire may not be considered a fortuitous event as there are human factors involved in the situation [Yobido v. CA, G.R. No. 113003 (1997)].

Question 95

Why was the employer not held liable for the act of one of its employees (security guard) in killing the passengers?

Answer 95

Because the act was not done in line of duty.

The killing of Gillaco was not done in line of duty. The position of Devesa at the time was that of another would be passenger, a stranger also awaiting transportation, and not that of an employee assigned to discharge any of the duties that the Railroad had assumed by its contract with the deceased. As a result, Devesa’s assault cannot be deemed in law a breach of Gillaco’s contract of transportation by a servant or employee of the carrier. [De Gillaco v. Manila Railroad Co. (1955)]

Question 96

May an employee of the common carrier be charged in a complaint for breach of contract of carriage?

Answer 96

No. ● A complaint for breach of a contract of carriage is dismissible as against the employee who was driving the common carriage because the parties to the contract of carriage are only the passenger, the bus owner, and the operator. [Sanico v. Colipano (2017)]

Question 97

What is the rule regarding injuries suffered by passengers for acts of co-passengers or strangers?

Answer 97

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission.

Question 98

Doctrine in Pilapil v. CA re: liability of common carrier for acts of other passengers.

Answer 98

Under Art. 1763, a tort committed by a stranger which causes injury to a passenger does not accord the latter a cause of action against the carrier. The negligence for which a common carrier is held responsible is the negligent omission by the carrier’s employees to prevent the tort from being committed when the same could have been foreseen and prevented by them through the exercise of the diligence of a good father of a family [Pilapil v. CA, G.R. No. 52159 (1989)].

Question 99

When will the common carrier be held responsible for acts of co-passengers or strangers?

Answer 99

If it failed to prevent when exercise of good diligence could have done so.

• The common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. [Bachelor Express v. CA]

Question 100

When will the common carrier be absolved of liability for injuries of passengers from acts of strangers and co-passengers?

Answer 100

• Where the injury sustained by the passenger was in no way due (1) to any defect in the means of transport or in the method of transporting, or (2) to the negligent or willful acts of the common carrier’s employees with respect to the foregoing — such as when the injury arises wholly from causes created by strangers which the carrier had no control of or prior knowledge to prevent — there would be no issue regarding the common carrier’s negligence in its duty to provide safe and suitable care, as well as competent employees in relation to its transport business; as such, the presumption of fault/negligence foisted under Article 1756 of the Civil Code should not apply. [GV Florida v. Heirs of Battung (2015)]

Question 101

What are the rules governing the duties of passengers?

Answer 101

Article 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.

Article 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced.

Question 102

What is the effect when the negligence of the passenger is the proximate cause of the injury?

Answer 102

When the negligence of the passenger was the proximate cause of the injury, the passenger is barred from recovery, and the common carrier is exempted from liability.

Question 103

Legal basis where rules on damages apply to breach of contract by a common carrier.

Answer 103

Damages recoverable from common carriers, both in cases of carriage of passengers and goods, shall be awarded in accordance with Title XVIII concerning Damages.

Art. 2206, on liability, in case of death, for loss of earning capacity, support, and moral damages for mental anguish, shall also apply to the death of a passenger caused by the breach of contract by a common carrier [Art. 1764, NCC].

Question 104

What are the damages recoverable against a common carrier?

Answer 104

Thus, the damages recoverable are:
a. Actual or compensatory damages;
b. Moral damages;
c. Exemplary damages;
d. Nominal, temperate, and liquidated damages;
e. Attorney’s fees.

Question 105

What are Actual or Compensatory Damages?

Answer 105

Actual or Compensatory Damages
Actual or compensatory damages refer to adequate compensation for such pecuniary loss suffered as duly proved [Art. 2199, NCC].

Question 106

What are Moral damages?

Answer 106

Moral damages, though incapable of pecuniary computation, if they are the proximate result of the common carrier’s wrongful act or omission, may be recovered [Art. 2217, NCC].
In cases of breach of contract of carriage, moral damages may be recovered where:
1. The common carrier acted fraudulently;
2. The common carrier acted in bad faith [Art. 2220, NCC];
3. Death of a passenger resulted even in the absence of bad faith or fraud [Art. 2206, NCC].

Question 107

Circumstances showing bad faith on the part of the common carrier?

Answer 107

Inattention and lack of care on the part of the carrier, resulting in the failure of the passenger to be accommodated in the class contracted for, amounts to bad faith or fraud which entitles the passenger to the award of moral damages in accordance with Art. 2220 [Ortigas v. Lufthansa, G.R. No. L-28773 (1975)].

Willful and deliberate overbooking on the part of the airline carrier constitutes bad faith. Under Section 3, Economic Regulations No. 7 of the Civil Aeronautics Board, overbooking, which does not exceed ten percent, is not considered as deliberate and therefore does not amount to bad faith [United Airlines v. CA, G.R. No. 124110 (2001)].

Question 108

What are exemplary damages?

Answer 108

In a contract of carriage, exemplary damages may be awarded if the common carrier acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner [Art. 2232, NCC].

Exemplary damages serves as an instrument to serve the ends of law and public policy by reshaping socially deleterious behaviors, specifically, in the case, to compel the common carrier to control their employees, to tame their reckless instincts, and to force them to take adequate care of human beings and their property [Mecenas v. CA, G.R. No. 88052 (1989)].

Question 109

What are nominal damages? When will passengers be entitled to nominal damages?

Answer 109

Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated by the defendant, may be vindicated or recognized, not for the purpose of indemnifying the plaintiff for any loss suffered by him [Art. 2221, NCC]. It may be awarded in case of breach of contract of carriage and in every case where any property right has been invaded [Art. 2222, NCC].

A violation of the passenger’s right to be treated with courtesy in accordance with the degree of diligence required by law to be exercised by every common carrier entitles the passenger to nominal damages [Saludo v. CA, G.R. No. 95536 (1922)].

Question 110

What are temperate or moderate damages?

Answer 110

Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty [Art. 2224, NCC].

Question 111

What are liquidated damages?

Answer 111

Liquidated damages are those damages agreed upon by the parties to a contract, to be paid in case of breach thereof [Art. 2226, NCC].

Question 112

What are attorney’s fees?

Answer 112

Under Art. 2208, as applicable to a contract of carriage, attorney’s fees and expenses of litigation may be recovered in the following cases:
1. When exemplary damages are awarded;
2. When the common carrier’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
3. Where the common carrier acted in gross and evident bad faith in refusing to satisfy the plaintiff’s valid, just and demandable claim;
4. In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered

Question 113

Is documentary evidenced required to be presented for damages for loss of earning capacity?

Answer 113

● As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when
o (1) the deceased is self-employed earning less than the minimum wage under current labor laws, and judicial notice may be taken of the fact that in the deceased’s line of work no documentary evidence is available; or
o (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws. [Victory Liner v. Gammad (2004)]

Question 114

Are moral damages recoverable in an action for breach of contract?

Answer 114

● GR: Since breach of contract is not one of the items enumerated under Article 2219, moral damages, as a general rule, are not recoverable in actions for damages predicated on breach of contract.
EXC: As an exception, such damages are recoverable [in an action for breach of contract:] in cases in which the mishap results in the death of a passenger, as provided in Article 1764, in relation to Article 2206(3) of the Civil Code; and (2) in cases in which the carrier is guilty of fraud or bad faith, as provided in Article 2220.
● In the past, we awarded temperate damages in lieu of actual damages for loss of earning capacity where earning capacity is plainly established but no evidence was presented to support the allegation of the injured party’s actual income.
[Sps. Estrada v. Phil. Rabbit (2017)]