Tranportation Law.

Contracts of transportation, whether by land, sea or air, if within the Philippines or

if the transportation of goods be from a foreign country to the Philippines shall be
governed by the following laws, arranged by order of application:
1. Provisions of the New Civil Code on Common Carriers;
2. Code of Commerce; and
3. Special laws such as Carriage of Goods by the Sea (COGSA); Salvage Law; Public
Service Act; Land Transportation and Traffic Code; Tariff and Customs Code; and
Civil Aeronautics Act (NCC, Art. 1735 and 1766; American President Lines, Ltd. vs.
Klepper, GR No. L-15671, November 29, 1960).

NOTE: In the case of international carriage in Air Transportation, Warsaw

Convention applies (ibid).

If the goods are to be transported from Philippines to foreign country, the law of the
latter country shall govern the transportation contract (ibid).

Art 12. National Economy and Patrimony

Section 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.cralaw

Common Carriers

Art. 1732. Common Carriers are persons, corporations, firms or association engaged
in the business of carrying or transporting passenger or goods or both, by land,
water or air, for compensation, offering their services to the public.

Requisites for an entity to be classified as a common carrier (PBL-CP)

1. Must be a Person, corporation, firm or association
2. Must be engaged in the Business of carrying or transporting passengers or goods
or both
3. The carriage or transport must either be by Land, water or air
4. The service is for a Fee or Compensation
5. The service is offered to the Public (Art. 1732, NCC).
First Phil. Industrial Corp vs CA

A pipeline operator who carries oil and other petroleum products through pipes/
pipelines is a common carrier. The law does not distinguish as to the means by
which transportation is carried out, as long as it is by land, water or air. Neither
does the law require that transportation be through a motor vehicle (J. Dimaampao,
supra, pg. 125, citing First Phil. Industrial Pipeline, supra).

4 test on determining a party is a common carrier of goods:

1. He must engaged in the business of carrying goods for others a s public
employment;
2. He must undertake to carry goods of the kind to which his business is confined;
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

-Private carrier A carrier which does not qualify under the requisites of a common carrier is deemed a
private carrier (National Steel Corporation v CA, G.R. No. 112287, December 12, 1997).

The diligence required of common carriers is extraordinary diligence (Art. 1733,

NCC). The nature of the business of common carriers and the exigencies of public
policy demand that they observe extraordinary diligence (Martin, 1989 Ed.).

Extraordinary diligence- It 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. The law requires common carriers to render service
with the greatest skill and utmost foresight (Loadmasters Services vs. Glodel
Brokerage, supra.).

Reason for the requirement of extra-ordinary diligence

1. Nature of the business of common carrier which is public service;
2. Public policy, the common carriers are supposed to serve the public interest and
therefore, they have to exercise extra-ordinary diligence (Martin, 1989 Ed.).

Chapter II Vigilance over the Goods

Art 1734 Common Carriers are responsible for the loss,, destruction, and
deterioration of the goods, unless the same is due to any of the following cases only:
(FESPO)
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; and
5. order or act of competent public authority.

Requisites for fortuitous event or act of God: (BUIF)

1. the cause of the breach of the obligation is independent of the will of the debtor;
2. the event must be unforeseen or unavoidable;
3. the event must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner;
4. the debtor must be free from participation in, or aggravation of the injury to the
creditor.

Duration for the exercise of extraordinary diligence by the common carrier in

connection to the transfer of goods

- It 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 (Art. 1736, NCC).

NOTE: Thus, this duty remains in full force and effect even when they are
temporarily unloaded or stored in transit, unless the shipper or owner had made
use of the right or stoppage in transit (Art. 1737, NCC).

Stoppage in Transitu- is the right of the unpaid seller when he has part with the
goods and the buyer is or becomes insolvent.
However, this extraordinary liability 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 been reasonable opportunity thereafter to remove them or otherwise
dispose of them (Art. 1738, NCC). Hence, where the consignee failed to claim a
machinery after its arrival and the carrier deposited it in a warehouse, the carrier is
not liable for the damages sustained by the machinery after its delivery to the
warehouse (Sea-Land Service, Inc. v.CA, 223 SCRA 316).

2 requisites to avoid liability

1. notice of arrival of goods to consignee, his agent or authorized representative;
2. reasonable opportunity on the part of the consignee to remove the goods or
otherwise dispose them.

Duration for the exercise of extraordinary diligence by the common carrier in

connection to transportation of passengers

The duty of the common carrier commence from 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. The relation of carrier and passenger continues
until the passenger has been landed at the port of destination and has left the vessel
owner's dock or premises. Once created, the relationship will not ordinarily
terminate until the passenger has, after reaching his destination, safely alighted
from the carrier's conveyance or had a reasonable opportunity to leave the carrier's
premises (Aboitiz Shipping Corp. v. CA, G.R. No. 84458, Nov. 6, 1989).

Coastwise loghterage corp vs ca- coastwise is a common carrier it does not

transform into a private carrier just by mere contract of affreightment. Clearly
coastwise embarking the voyage with unlicensed patron violates the rule. It cannot
claim that it did exercise extraordinary diligence which is required for common
carrier.

Arrastre vs Stevedoring

Arrastre- refers to the handling of cargo on the warf or between the establishment
of the consignee and the ships tackle. Liability is until the delivery of the cargo to
the consignee. Charged with the obligation to deliver the goods in good condition to
the consignee.

Stevedoring- refers tot the handling of the cargo in the holds of the vessel or
between the ships tackle and the holds of the vessel. Liability ends up to the loading
and stowing of the cargo in the vessel. NOT a CCC, because it does not trandsport
goods or passengers; it is not akin to a warehoiuse man because it does not store
goos for profit, only charge for LOADING & STOWING.
Benito Macam vs CA respondents is liable for releasing the goods to GPC without
the bills of lading or bank guarantee.

Samar Mining vs Nordeutcher Lloyd- carrier

Amparo Servando vs Phil. Steam Navigation Co. - in consonance with the application
of Art. 1738, the goods was already in the Customs Warehouse and the shipper has
already informed the consignee of its arrival thus Shippers falls under the requisites
under the said article which exculpate them from liabilities.

(ART 1739) in order that the common carrier may be exempted from any and all
responsibilities as a result of the natural disaster such as flood, storm, earthquake,
lightning or other natural disaster or other natural calamity. (PDD)

1. the natural disaster must have been the proximate and only cause of the loss;
2. the CC must have exercised due diligence to prevent or minimize loss before,
during and after the occurrence of the natural disaster;
3. CC has not negligently incurred in delay in transporting goods.

(ART1740) cases when demand is not necessary to incur delay, which makes the CC
liable even without demand:

1. obligation or the law expressly so declares;

2. when the nature and circumstance of the obligation it appears that the
designation of the time when the thing is to be delivered or the services is to be
rendered was the controlling motive of the establishment;
3.when demand would be useless, as when the obligor has rendered it beyonf his
power to perform.

Note: in reciprocal obligations neither party incurs delay if the other party does not
comply or is not ready to comply in the proper manner which is incumbent upon
him. From the time the other fulfills his obligation the delay of the other begins.

Maersk Line vs CA- the delay of two months falls the realm of reasonableness, the
shipper is aware of the specific date when the goods were expected to arrive even
there was no special contract of its arrival.

ART 1741

Negligence- is the conduct that creates undue risk of harm to another.

Is the omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs, would do, or
the doing of something, which a prudent and reasonable man would not do.
Proximate cause is that cause which in the natural and continuous sequence ,
unbroken by any efficient and intervening cause, produce injury, and without which
the result would not have occurred.

Contributory Negligence is conduct on the part of the injured party, contributing

as a legal cause to the harm he has suffered, which falls below the standard to which
he is required to conform for his own protection.