CHAPTER 3
Thus, the shipper may be held liable for any damage that
OBLIGATIONS OF THE PASSENGER AND
SHIPPER
The duty to comply with the terms and conditions of the
contract does not rest only on one of the parties. Hence, in
a contract of carriage, both the carrier and the passenger
or shipper, as the case may be, have prestations to
perform.
DUTY TO EXERCISE DUE DILIGENCE
The shipper or passenger is bound by his contractual
obligation. The shipper or the carrier is bound to pay the
consideration in the form of freight or fare. In addition, the
shipper and the passenger are also bound to exercise due
diligence in avoiding damage or injury.
NEGLIGENCE OF SHIPPER OR PASSENGER
The obligation to exercise due diligence is not limited to
the carrier. The shipper is obliged to exercise due diligence
in avoiding damage to the goods that are being shipped or
injury to his person. This obligation to exercise due care is
likewise basic in all forms of obligations.
The carrier cannot impute the negligence of its own
employee (like its driver) to the person or entity hired the
carrier.
DUTY TO DISCLOSE
Due diligence includes the duty to disclose information
relating to the cargo. Proper information will help the
carrier exercise proper care and caution in relation not
only to the subject cargo but also the cargo of other
shippers and the passengers. Thus, the shipper must give
proper information if there is a need to store the cargoes
in a separate place. A common carrier is entitled to fair
representation of the nature and value of the goods to be
carried, with concomitant right to rely thereon, and a
carrier has no obligation to inquire into the correctness or
sufficiency of such information.
The shipper must also make the proper markings on the
cargoes.
DAMAGE CAUSED BY THE CARGOES
The duty to disclose the nature of the cargo is important in
order that the carrier can exercise due diligence in
preventing damage to the cargoes to be transported. In
addition, the information that the carrier will receive will
be used to prevent damage to the vessel, to the other
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of private right; not clothed with a public interest
Stephen Michael Ben
AUSL
cargoes and to the passengers or seafarers in the vessel.
may have been caused solely by the dangerous nature of
the cargoes.
PAYMENT OF FREIGHT
Common carriers are subject to heavy regulation with
respect to rates that they are charging the public. The
regulation of rates of public utilities is founded upon the
police power of the State and statutes prescribing rules for
the control and regulation of public utilities are a valid
exercise thereof. When private property is used for a
public purpose and is affected with public interest it ceases
to be juris privati 1only and becomes subject to regulation.
• In regulating rates charged by public utilities, the
State protects the public against arbitrary and
excessive rates while maintaining the efficiency
and quality of service rendered.
• Although the consideration that should be paid
to the carrier is still subject to the agreement of
the parties, what can be agreed upon should not
be beyond the maximum amount fixed by the
appropriate government agency like the LTFRB.
WHO WILL PAY THE FREIGHT
The shipper may pay the necessary freight before or at the
time he delivers the goods to the carrier for shipment.
However, the parties may also stipulate that the consignee
will pay the freight at the point of destination. The
consignee is bound by such stipulation the moment he
accepts the goods.
• Nevertheless, the consignor with whom the
contract of carriage is made is primarily liable for
the payment of the freight charges whether or
not he is the owner of the goods. The obligation
to pay is implied from the mere fact the
consignor has placed the goods with the carrier
for the purpose of transportation.
• With respect to the passengers, the said
passengers are contractually bound to pay the
fare within such time as prescribed by
regulations or by the carrier. There are carriers
that require payment of consideration before
the passenger can board the carrier while others
collect the fare while the passenger is already on
board.
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TIME TO PAY THE FREIGHT
The New Civil Code does not provide for the period within
which payment of the freight charges should be made to
the carrier for the carriage of goods. However, the
implication of the Code of Commerce provisions on
Overland Transportation is that in the absence of any
agreement, the consignee who is supposed to pay must do
so within 24 hours form the time of delivery. Code of
Commerce provides:
ARTICLE 374. The consignees to whom the shipment was
made may not defer the payment of the expenses and
transportation charges of the goods they receive after the
lapse of twenty-four hours following their delivery; and in case
of delay in this payment, the carrier may demand the judicial
sale of the goods transported in an amount necessary to cover
the cost of transportation and the expenses incurred.
a. Carriage of Passenger by Sea. With respect to
carriage of passengers by sea, the tickets are
purchased in advance from ticket outlets or
booking offices that are required to be set up in
every ports of call of the vessel. Carriers are not
supposed to allow passengers without tickets –
the carrier is bound to observe a “No Ticket, No
Boarding Policy.”
CARRIER’S LIEN
If the consignor or the consignee failed to pay the
consideration for the transportation of the goods, the
carrier may exercise his lien in accordance with Article 375
of the Code of Commerce
Article 375. The goods transported shall be especially
bound to answer for the cost of transportation and for
the expenses and fees incurred for them during their
conveyance and until the moment of their delivery.
This special right shall prescribe eight days after the
delivery has been made, and once prescribed, the
carrier shall have no other action than that
corresponding to him as an ordinary creditor.
TIMELY LOADING AND UNLOADING
The shipper must make sure that the goods are delivered
to the carrier on the date, time, and place agreed upon.
Otherwise, the shipper may either still be required to pay
the agreed fees and charges and/or to pay appropriate
damages and/or be rejected depending on the
circumstances. In addition, the shipper cannot insist on
tendering goods that are in excess of the number, weight,
and quantity stipulated in the contract.
Stephen Michael Ben
AUSL
The consignee must likewise timely obtain delivery from
the carrier. The carrier must give notice of the arrival of
the goods to the consignee.
DEMURRAGE
The parties may stipulate the period within which to load
and unload the cargoes. This period is known as lay days.
Demurrage, in its strict sense, is the compensation
provided for the in the contract of affreightment for the
detention of the vessel beyond the time agreed on for
loading and unloading. Essentially, demurrage is the claim
for damages for failure to accept delivery. In a broad
sense, every improper detention of a vessel may be
considered a demurrage. Liability for demurrage, using the
word in its strictly sense, exists only when expressly
stipulated in the contract.
PERMITS
The passenger or shipper may also be required to secure
the necessary permits for the transportation of certain
goods.
SHIPPER’S LOAD AND COUNT
It may be stipulated in the Bill of Lading that the shipper
has the sole responsibility for the quantity, description and
condition of the cargoes shipped in container vans. This is
known as the “Shipper’s Load and Count” arrangement.
Under this agreement, the contents are not required to be
checked or inventoried by the carrier at the port of loading
or before said carrier enters the port of unloading in the
Philippines since it is the shipper who has the sole
responsibility for the quantity description and condition of
the cargoes shipped in container vans.
DUTIES OF PASSENGER
The passenger must pay the proper fare for the
transportation of the said passenger. The amount and time
of payment would depend on the type of carrier, the
practice and regulation in that particular carrier. Thus,
payment may be in advance, in the course or
transportation or before disembarking depending on the
circumstances.
TRAVEL DOCUMENTS
It is the obligation of the passenger, not the carrier, to
secure the appropriate travel documents. Hence, it is not
the obligation of the carrier ti secure the necessary visa for
a passenger.
• It is incumbent upon the passenger to take
ordinary care of his concerns. This requires the
passenger to read the travel documents in order
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 to assure herself of the important details
regarding the trip. For instance, there would be
negligence if the passenger did not even check
the date of departure.
• The airline may be held liable if the loss of
documents was due to the negligence of its
employee.

AIR TRANSPORTATION OF PASSENGERS

Specifically with respect to passengers on commercial

airlines, the Civil Aviation Regulations provide for the
following conducts:

1. No person on board may interfere with a crew

member in the performance of his or her duty.
2. Each passenger shall fasten his or her seat belt
and keep it fastened while the seat belt sign is
lighted.
3. No person on board an aircraft shall recklessly or
negligently act or omit to act in such a manner as
to endanger the aircraft or person and property
therein.
4. No person may secrete himself or herself nor
secrete cargo on board an aircraft.
5. No person may smoke while the no smoking sign
is lighted.
6. No person may smoke in any airplane lavatory.
7. No person may tamper with, disable or destroy
any smoke detector installed in any airplane
lavatory.

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Stephen Michael Ben
AUSL