CHAPTER 4 Article 1741.

If the shipper or owner merely contributed to the

DEFENSE OF THE COMMON CARRIER
The carrier is not an insurer of the passenger’s safety or
the safety of the goods that it is transporting. The carrier’s
liability rests upon its failure to exercise extraordinary
degree of diligence that the law requires. The carrier bears
the burden of satisfying the court that he has duly
discharged the duty of prudence required in case of a
passenger’s death, or injury by the carrier, or damage to or
loss of the cargoes.
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.
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.
DEFENSE IN THE CARRIAGE OF GOODS

KINDS OF DEFENSES The applicable provisions of the New Civil Code are Articles
1734, 1742, and 1743.
Defenses may either totally bar recovery from the carrier
or may mitigate and/or limit its liability. For instance, Article 1734. Common carriers are responsible for the loss,
fortuitous event may be invoked in proper cases to destruction, or deterioration of the goods, unless the same is
due to any of the following causes only:
prevent the passenger or shipper from recovering from the
carrier. On the other hand, there are defenses that will not
(1) Flood, storm, earthquake, lightning, or other
totally bar recovery but will merely reduce or mitigate the
natural disaster or calamity;
liability of the carrier. Examples of defense that mitigate
liability are the Doctrine of Contributory Negligence 1and
(2) Act of the public enemy in war, whether
Avoidable Consequences Rule2. A validly stipulated international or civil;
limitation on liability of the carrier may also be invoked to
limit the liability to a certain amount although the actual (3) Act or omission of the shipper or owner of the
value of the damage or injury is much more that the goods;
stipulated ceiling.
(4) The character of the goods or defects in the
PROXIMATE CAUSATION packing or in the containers;

The common carrier is presumed negligent the moment he

(5) Order or act of competent public authority.
fails to deliver the goods to its destination or the moment
the passenger did not reach his destination while riding
Article 1742. Even if the loss, destruction, or deterioration of
the carrier. It is by reason of such presumption that it has
the goods should be caused by the character of the goods, or
been observed that the doctrine of proximate cause 3is the faulty nature of the packing or of the containers, the
inapplicable to a contract of carriage. The injured common carrier must exercise due diligence to forestall or
passenger or owner of goods need not prove causation to lessen the loss.
establish his case. The presumption arises upon the
happening of the accident. Article 1743. If through the order of public authority the goods
are seized or destroyed, the common carrier is not
ABSENCE OF CAUSATION AS A DEFENSE responsible, provided said public authority had power to issue
the order.
Nevertheless, it is not correct to state that proximate
causation is not an important consideration in cases
involving common carriers. What the law means is that the EXCLUSIVITY OF DEFENSE
absence of causal connection is only a matter of defense. No other defense may be raised by the common carrier in
In other words, the passenger or the shipper has no the carriage of goods. The above enumeration is
burden of proving that his injury was caused by the EXCLUSIVE OR A CLOSED LIST. If not one of those is
negligent or intention act or omission of the carrier or his present, the carrier is liable.
agents.

1 3
a doctrine of common law that if a person was injured in part due to his/her own negligence (his/her that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,
negligence "contributed" to the accident), the injured party would not be entitled to collect any damages
(money) from another party who supposedly caused the accident. produces the injury, and without which the result would not have occurred .
2
a common-law rule barring recovery of damages that a tort victim "could have avoided by the use of
reasonable effort or expenditure after the commission of the tort."

1
Stephen Michael Ben
AUSL
For example, the defense of exercise of due diligence in
the selection and supervision of employees that is
available in tort is not available in an action for breach of
contract of carriage.
DEFENSES IN CARRIAGE OF PASSENGERS
With respect to passengers, the carrier’s defense is
exercise of extraordinary or utmost diligence. It is believed
that the defenses mentioned above like fortuitous event
or acts pf a public enemy may be invoked against the
passenger or his heirs provided that utmost diligence is
exercised. However, the presumption under Article 1756
applies.
Article 1756. 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 as prescribed in articles 1733 and
1755.
FORTUITOUS EVENT
Fortuitous event, to be a valid defense, must be
established to be the proximate cause of the loss.
Lasam vs Smith
This brings us to the principal question in the case:
What is meant by "events which cannot be foreseen and
which, having been foreseen, are inevitable?" The Spanish
authorities regard the language employed as an effort to
define the term caso fortuito and hold that the two
expressions are synonymous.
What is meant by "events which cannot be foreseen and
which, having been foreseen, are inevitable?" The Spanish
authorities regard the language employed as an effort to
define the term caso fortuito and hold that the two
expressions are synonymous. (Manresa, Comentarios al
Codigo Civil Español, vol. 8, pp. 88 et seq.; Scævola, Codigo
Civil, vol. 19, pp. 526 et seq.)
The antecedent to article 1105 is found in Law 11, Title 33,
Partida 7, which defines caso fortuito as "occasion que a case
por aventura de que non se puede ante ver. E son estos,
derrivamientos de casas e fuego que se enciende a so ora, e
quebrantamiento de navio, fuerca de ladrones. . . . (An event
that takes place by accident and could not have been
foreseen. Examples of this are destruction of houses,
unexpected fire, shipwreck, violence of robbers. . . .)"
Escriche defines caso fortuito as "an unexpected event or act
of God which could either be foreseen nor resisted, such as
floods, torrents, shipwrecks, conflagrations, lightning,
compulsion, insurrections, destructions, destruction of
buildings by unforseen accidents and other occurrences of a
similar nature."
Stephen Michael Ben
AUSL
In discussing and analyzing the term caso
fortuito the Enciclopedia Juridica Española says: "In a legal
sense and, consequently, also in relation to contracts, a caso
fortuito presents the following essential characteristics: (1)
The cause of the unforeseen and unexpected occurrence, or of
the failure of the debtor to comply with his obligation, must be
independent of the human will. (2) 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. (3) The
occurrence must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner. And (4) the
obligor (debtor) must be free from any participation in the
aggravation of the injury resulting to the creditor."
REQUISITES OF FORTUITOUS EVENT
The following requisites must be present before the carrier
can properly invoke fortuitous events as a defense:
(1) The cause of the unforeseen event and
unexpected occurrence, or of the failure of the
debtor to comply with his obligation, must be
independent from human will.
(2) It must be impossible to foresee the event that
constitutes the casa fortuito, or if it can be
foreseen, it must be impossible to avoid.
(3) The occurrence must be such as to render it
impossible for the debtor to fulfill his obligation
in a normal manner.
(4) The obligor (debtor) must be free from any
participation in or the aggravation of the injury
resulting to the creditor.
EFFECT OF CARRIER’S PARTICIPATION
The requirement that the carrier must be free from any
participation in causing the damage or injury is in line with
Article 1739 that provides that the carrier will be excused
from liability if the natural disaster is the proximate and
only cause.
Article 1739. In order that the common carrier may be
exempted from responsibility, the natural disaster must have
been the proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or
minimize loss before, during and after the occurrence of flood,
storm or other natural disaster in order that the common
carrier may be exempted from liability for the loss,
destruction, or deterioration of the goods. The same duty is
incumbent upon the common carrier in case of an act of the
public enemy referred to in article 1734, No. 2.
RATIONALE
The statutory provision is consistent with the view of
Justice Moreland.
2
Tan Chion Sian vs Inchausti
An act of God can not be urged for the protection of a person
who has been guilty of gross negligence in not trying to avert
its results. One who has accepted responsibility for pay can
not weakly fold his hands and say that he was prevented from
meeting that responsibility by an act of God, when the
exercise of the ordinary care and prudence would have
averted the results flowing from that act. One who has placed
the property of another, intrusted to his care, in an
unseaworthy craft, upon dangerous waters, cannot absolve
himself by crying, "an act of God," when every effect which a
typhoon produced upon that property could have been
avoided by the exercise of common care and prudence. When
the negligence of the carrier concurs with an act of God
producing a loss, the carrier is not exempted from liability by
showing that the immediate cause of the damage was the act
of God; or, as it has been expressed, "when the loss is caused
by the act of God, if the negligence of the carrier mingles with
it as an active and cooperative cause, he is still liable." The loss
and damage to perishable articles in consequence of the
weather will not excuse the carrier if it could have been
prevented by due care and diligence. The carrier must not only
show that it did all that was usual, but all that was necessary
to be done under the circumstances. (Wing vs. New York, etc.,
Ry. Co., 1 Hilt. (N.Y.), 235; Philleo vs. Sanford, 17 Tex., 228.) To
be exempt from liability for loss because of an act of God, the
common carrier must be free from any previous negligence or
misconduct by which that loss or damage may have been
occasioned. For, although the immediate or proximate cause
of a loss in any given instance may have been what is termed
an act of God, yet if the carrier unnecessarily exposed the
property to such accident by any culpable act or omission of
his own, he is not excused.
The act of God which excuses the carrier must not only be the
proximate cause of the loss, but the better opinion is that it
must be the sole cause. And where the loss is caused by the
"act of God," if the negligence of the carrier mingles with it as
an active and cooperative cause, he is still responsible.
FIRE
Broadly speaking, force majeure generally applies to a
natural accident, such as that caused by a lightning, an
earthquake, a tempest or a public enemy. Hence, fire is
not considered a natural disaster or calamity.
STORM
PAGASA described a storm as having a wind force of 48 to
55 knots or 55 to 63 miles per hour. The presence of
strong wind does not by itself justify the conclusion that
there is a storm. For instance, strong monsoon winds are
not a storm within the contemplation of Article 1734 [1] of
the New Civil Code. Monsoon wind is not an unusual
occurrence and is a normal and foreseeable condition
while navigating in the sea. However, there may be cases
4
a relation between two parties that is recognized by law, such as
that of blood, lease, or service
Stephen Michael Ben
AUSL
when strong winds may be unforeseeable. Hence,in one
case, the carrier was not made liable because the
proximate and only cause of the loss was unforeseeable
strong winds and enormous waves.
Article 1734. Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless the same is
due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
HIJACKING
Hijacking of the carrier does not fall among the five
categories of exempting causes. The carrier’s vehicle must
be dealt with under Article 1735 of the New Civil Code. In
other words, the common carrier is presumed be at fault
or to have acted negligently unless there is a proof of
extraordinary diligence on its part of the common carrier.
Article 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.
MECHANICAL DEFECTS
Damage or injury that can be traced to mechanical defects
is not a damage or injury that is caused by fortuitous
event. The prevailing rule in this jurisdiction is that a
carrier is liable to its passengers for damages caused by
mechanical defects.
One of the reasons why the carrier is made liable despite
the presence of mechanical defect is the absence of privity
4between the passenger and the manufacturer.
TIRE BLOWOUTS
The rule on mechanical defects applies to “tire blow-outs”.
The SC did not consider the explosions of the tire pf the
jeepney as a fortuitous event although the tires were
allegedly in good condition; no evidence was presented to
show that the accident was due to adverse road
conditions. The explosion could have been caused by too
much air pressure injected into the tires coupled by the
fact that the jeepney was overloaded and speeding at the
time of the accident.
3
OTHER INVALID DEFENSES
The common carrier cannot likewise invoke explosion, the
presence of worm and rats, water damage, and barratry.
(a) Explosion. Damage to cargo from explosion of
another cargo is not ordinarily attribute to peril
of the sea or accidents of navigation particularly
where it occurs after the vessel has ended its
voyage and is finally moored to unload.
(b) Worms and Rats. Whenever the ship is damaged
by worms resulting in damage to the cargo, the
carrier cannot cite the same as an excuse. The
same is true with respect to damage of the cargo
by rats whether the cargo was directly damaged
by the rats or by water let in through holes
gnawed by rats in the ship or her fixtures.
(c) Water Damage. Damage by seawater is not a
valid excuse where the water gains entrance
through a port that had been left open or
insufficiently fastened on sailing.
(d) Barratry. The shipowner cannot escape liability
to 3rd persons if the case of damage is barratry. It
is an act committed by the master or crew of the
ship for some unlawful or fraudulent purpose,
contrary to their duty to the owner. Intentional
fraud or breach of trust or willful violation of law
is necessary to constitute barratry. Barratry
includes theft by the purser of a specie shipped
on board and fraudulently running the ship
ashore.
PUBLIC ENEMY
An act of a public enemy is a defense that is available to
the carrier not only under the Civil Code but also under the
Carriage of Goods by Sea Act.
Professor Francisco explained that the exception
concerning the acts of public enemies is understandable
because the government itself is called upon to protect its
subjects from loss from such hazards and private citizens
haven no power to furnish the security and protection
required.
Exceptionally, the acts of pirates on high seas are likewise
included in the exception under Article 1734 [3] of the
New Civil Code even if there is no declaration of a state of
war. The rationale for this is that pirates on high seas are
enemies of all civilized nations and humanity.
(2) Act of the public enemy in war, whether
international or civil;
Stephen Michael Ben
AUSL
NATURE OF GOODS AND IMPROPER PACKING
The fourth paragraph of Article 1734 specifies the
character of goods or defects in the packing or in the
containers as a defense that is available to common
carriers.
(4) The character of the goods or defects in the
packing or in the containers;
Similarly, the Carriage of Goods by Sea Act provides that
the carrier shall not be liable for:
(1) Wastage in bulk or weight or any other loss or
damage arising from inherent defect, quality or
vice of goods;
(2) Insufficiency of packing;
(3) Insufficiency or inadequacy of the marks;
(4) Latent defects not discoverable by due diligence.
However, Article 1742 provides
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
The carrier is not responsible if the loss occurs because of
the inherent nature of the shipment. This applies even to
hand-carried baggage.
It is also true that if the carrier accepts the goods knowing
the fact of improper packing of the goods upon ordinary
observation or notwithstanding such condition, it is not
relieved of liability for loss or injury resulting therefrom.
ORDER OF PUBLIC AUTHORITY
An order of a public authority may be used to excuse
liability only if the public authority who issued the order is
duly authorized to issue the order as provided for in Article
1743. Hence, the defense is not available if:
(1) The public authority has no authority to issue the
subject order;
(2) If the public authority exceeded his 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.
4
DEFENSES IN CARRIAGE OF PASSENGERS
The primary defense of the carrier in transporting
passengers is the exercise of extraordinary diligence. Thus,
even if there is a fortuitous event, the carrier must also
present proof of exercise of extraordinary diligence. This is
also reflected in Article 1763 which provides that a
common carrier is responsible for injuries suffered by a
passenger on account of the willful 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. This rule applies to cases involving fortuitous
events because the carrier will still be responsible if it did
not exercise due diligence in preventing the injury or death
of the employee.
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.
ACTS OF EMPLOYEES
The carrier is liable for the acts of its employees. Unlike in
quasi-delict, the carrier cannot escape liability by claiming
the he exercised due diligence in the selection and
supervision of the employee.
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.
PASSENGER HAS NO DUTY TO INQUIRE
By express provision of Article 1759, it is no defense that
the employee acted beyond the scope of his authority
because the riding public is not expected to inquire from
time to time before they board the carrier whether or not
the driver or any other employee is authorized to drive the
vehicle or that said driver is acting within the scope of his
authority and observing the existing rules and regulations
required of him by management.
RATIONALE
(1) The special undertaking of the carrier requires
that it furnish its passengers that full measure of
protection afforded by the exercise of the high
Stephen Michael Ben
AUSL
degree of care prescribed by the law, inter alia
from violence and insults at the hands of
strangers and other passengers, but above all,
from the acts of the carrier’s own servants
charged with the passenger’s safety;
(2) Said liability of the carrier for the servant’s
violation of duty to passengers, is the result of
the former’s confiding in the servant’s hands the
performance of his contract to safely transport
the passenger, delegating therewith the duty of
protecting the passenger with the utmost care
prescribed by law;
(3) As between the carrier and the passenger, the
former must bear the risk of wrongful acts or
negligence of the carrier’s employees against
passengers, since it, and not the passengers, has
power to select and remove them.
THEFT BY EMPLOYEES
Willful acts of the employees include theft. It should be
pointed out that the Code of Commerce expressly provides
that the captain shall be civilly liable to the naviero and the
latter to third persons for all the thefts committed by the
crew, reserving the right of action against the guilty party.
The Civil Code does not change the rule and the same is in
fact further reinforced by the duty to exercise
extraordinary diligence.
ACTS OF OTHER PASSENGERS AND THIRD PERSONS
With respect to acts of strangers and other passengers
resulting in injury to a passenger, the availability of such
defense is also subject to the exercise of a carrier of due
diligence to prevent or stop the act or omission.
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.
Thus, the defense that the death or injury was caused by
third person is not available if the carrier’s driver even
allowed another person who is not an employee or a
regular driver to take over the task of driving the vehicle.
The negligence of the carrier need not be the sole cause of
the damage or injury to the passenger or the goods. The
carrier would still be liable even if the contractual breach
concurs with the negligent act or mission of another
person.
5
Oligario Brito Sy vs Malate Taxicab and Garage
I concur for the additional reason that the concurrent
negligence of a third person will not exempt the appellant
from responsibility; in other words, if the driver of the taxicab
was negligent and thereby caused the collision, the fact that
another driver’s negligence also contributed thereto will not
exempt the taxicab company. Hence, the negligence of the
other driver is not a prejudicial question to the present action.
ACTS OF THE SHIPPER OR THE PASSENGER
If the act or omission of the shipper or owner of the goods
or the passenger is the proximate and only cause of the
damage, then the common carrier is not liable.
CONTRIBUTORY NEGLIGENCE
Contributory Negligence is conduct on the part of the
injured party, contributing as a legal cause to the hard he
has suffered, which falls below the standard to which he is
required to conform for his own protection.
Contributory Negligence on the part of the shipper is not a
defense that will excuse the carrier from liability. It will
only mitigate such liability.
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.
CONTRIBUTORY NEGLIGENCE OF PASSENGER
With respect to carriage of passengers, the said
passengers are likewise bound to observe due diligence to
avoid injury.
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.
CAUSATION
The negligence of the shipper or the passenger may be the
proximate and only cause of the loss, in which case, the
carrier should not be made liable. The carrier may be able
to overcome the presumption of negligence and may be
able to prove that it exercised extraordinary diligence in
handling the goods or in transporting the passenger. Thus,
the carrier may be able to prove that only cause of the loss
of the goods is any of the following acts of the shipper:
Stephen Michael Ben
AUSL
(1) Failure of the shipper to disclose the nature of
the goods;
(2) Improper marking or direction as to destination;
(3) Improper loading when he assumes such
responsibility.
The shipper must likewise see to it that the goods are
properly packed, otherwise, liability of the carrier may
either be mitigated or barred depending on the
circumstances.
AVOIDABLE CONSEQUENCES
Moreover, even if the carrier is responsible for the loss or
injury, the passenger is also required to lessen the damage
or injury under what is known as the doctrine of avoidable
consequences.
ASSUMPTION OF RISK
The SC reiterated the rule that passengers must take such
risks incident to the mode of travel. Carriers are not
insurers of the lives of their passengers. Thus, in air travel,
adverse weather conditions or extreme climactic changes
are some of the perils involved in air travel, the
consequences of which the passengers must assume or
expect.
However, there is no assumption of risk in case the
passenger voluntarily boarded a carrier that was filled to
capacity.
There is also no assumption of risk by the mere fact that
the carrier posted notices against such liability.
DOCTRINE OF THE LAST CLEAR CHANCE
Under the doctrine of the last clear chance, when both
parties involved in the accident were both negligent, the
negligence of the party will not be considered the
proximate cause if the other party has the last clear
chance of avoiding the injury. Thus, if the plaintiff has the
last clear chance of avoiding the injury, the defendant may
no longer be held liable. In such case, the negligence of the
plaintiff – which is not just contributory negligence – will
be considered an efficient intervening cause.
• The doctrine cannot be applied against a
passenger. The principle of “last clear chance”
applies in a suit between the owners and drivers
of colliding vehicles.
NOTICE OF CLAIM
In Civil Law, those who, in the performance of their
obligation, are guilty of fraud, negligence, or delay and
those who in any manner contravene the tenor of the
obligation, are liable for damages. In an action for
6
damages to breach of contract, it is essential that the
claimant will establish the following requirement:
(1) The existence of a perfected contract;
(2) The breach thereof by the other contracting
party;
(3) The damages which he/she sustained due to the
breach.
It is also essential that the mandatory formal requirements
that are imposed by law and the Statute of Limitations are
complied with. Thus, when the law requires a notice of
claim, the same must be complied with and any action that
may be filed thereafter must be filed within the
prescriptive period provided by law.
CLAIM IN OVERLAND TRANSPORTATION AND COASTWISE
SHIPPING
A condition precedent for an action against the carrier in
overland transportation is the filing of a claim with the
carrier within the period prescribed under Article 366 of
the Code of Commerce.
Article 366 – Within the twenty-four hours following the
receipt of the merchandise, the claim against the carrier for
damage or average be found therein upon opening the
packages, may be made, provided that the indications of the
damage or average which gives rise to the claim cannot be
ascertained from the outside part of such packages, in which
case the claim shall be admitted only at the time of receipt.
After the periods mentioned have elapsed, or the
transportation charges have been paid, no claim shall be
admitted against the carrier with regard to the condition in
which the goods transported were delivered.
(a) Consequently, under Article 366 of the Code of
Commerce, an action for damages is barred if
the goods arrived in damaged condition and the
shipper files no claim within the following
period:
(1) The claim for damage must be filed
immediately if the damage is apparent;
or
(2) The claim for damage must be made
within 24 hours from receipt of the
merchandise if the damage is not
apparent, that is, the damage cannot
be ascertained merely from the
outside packaging of the cargo.
(b) Notice of Claim Mandatory. Non-filing of the
claim bars recovery. It is more accurate to state
that the filing of a claim with the carrier within
Stephen Michael Ben
AUSL
the time limitation therefor under Article 366
actually constitutes a condition precedent to the
accrual of a right of action against a carrier for
damages caused to the merchandise.
(c) Purpose. Government of the Philippine Islands vs
Inchausti
The whole purpose of the law according to the
Code of Commerce is to give the carrier an
opportunity to ascertain whether the claim is a
well-founded one before the goods leave his hands
with respect to damages which are observable
upon the exterior of the goods or of the packages in
which they are contained, and before the goods
have been consumed or their identity destroyed in
cases in which it is alleged that the damage has
been discovered after the goods were received by
the consignee. To impose upon the carrier the
liability which plaintiff seeks to impose by this
action would be to make the business of a common
carrier a most hazardous one — so hazardous,
indeed, that carriers would be obliged to charge
much higher rates
(d) Commencement of Period. The period does not
begin to run until the consignee has received
possession of the merchandise that he may
exercise over it the ordinary control pertinent to
ownership. In other words, there must be
delivery of the cargo by the carrier to the
consignee at the place of destination.
(e) Applicable to Coastwise Shipping. It was ruled in
one case that the requirement under Article 366
of the Code of Commerce applies even to
transportation by sea within the Philippines or
coastwise shipping. For example, if the goods
were shipped from Manila to Cebu and the
goods were already damaged when they arrived
in Cebu, a claim must be filed within the period
prescribed under Article 366 of the Code of
Commerce.
(f) Not applicable to Misdelivery. Article 366 does
not apply to misdelivery of goods. Article 366 is
limited to cases of claims for damage to goods
actually turned over by the carrier and received
by the consignee, whether those damages be
apparent from an examination of the packages in
which the goods are delivered, or of such a
character that the nature and extent of the
damage is not apparent until the packages are
opened and the contents examined. Clearly it
has no application in cases wherein the goods
entrusted to the carrier are not delivered by the
carrier to the consignee. In such cases there can
be no question of a claim for damages suffered
by the goods while in transport, since the claim
for damages arises exclusively out of the failure
to make the delivery.
7
 (g) Effect of Stipulation. The period prescribed in
Article 366 of the Code of Commerce may be
subject to modification by agreement of the
parties. The parties may stipulate in the bill of
lading a period that is different from the period
provided by Article 366.
(h) Waiver. The carrier may waive the requirement
that there must be a notice to claim. Thus, the
notice of claim is deemed waived if the
defendant failed to plead this defense in its
answer to the complaint and the defense of
absence of such notice cannot be raised for the
first time at the trial or on appeal.
(i) If there is doubt. Although the procedure on the
notice of claim under Article 366 of the Code of
Commerce is complied with, there may be cases
when there is doubt regarding the condition of
the goods. It is possible that the carrier does not
accept the representation of the shipper. In
these cases, the dispute between the parties
shall be resolved in accordance with Article 367.
Article 367 – If doubts and disputes should arise
between the consignee and the carrier with respect
to the condition of the goods transported at the
time their delivery to the former is made, the goods
shall be examined by experts appointed by the
parties, and, in case of disagreement, by a third one
appointed by the judicial authority, the results to
be reduced to writing; and if the interested parties
should not agree with the expert opinion and they
do not settle their differences, the merchandise
shall be deposited in a safe warehouse by order of
the judicial authority, and they shall exercise their
rights in the manner that may be proper.
NOTICE OF CLAIM IN INTERNATIONAL CARRIAGE OF
GOODS BY SEA
The provisions of the Carriage of Goods by Sea Act
(COGSA) apply in international carriage. Section 3,
paragraph 6 of the same law provides for the period within
which a claim can be filed:
(6) Unless notice of loss or damage and the general nature of
such loss or damage be given in writing to the carrier or his
agent at the port of discharge before or at the time of the
removal of the goods into the custody of the person entitled
to delivery thereof under the contract of carriage, such
removal shall be prima facie evidence of the delivery by the
carrier of the goods as described in the bill of lading. If the loss
or damage is not apparent, the notice must be given within
three days of the delivery.
Said notice of loss or damage maybe endorsed upon the
receipt for the goods given by the person taking delivery
thereof.
Stephen Michael Ben
AUSL
The notice in writing need not be given if the state of the
goods has at the time of their receipt been the subject of joint
survey or inspection.
In any event the carrier and the ship shall be discharged from
all liability in respect of loss or damage unless suit is brought
within one year after delivery of the goods or the date when
the goods should have been delivered: Provided, That if a
notice of loss or damage, either apparent or concealed, is not
given as provided for in this section, that fact shall not affect
or prejudice the right of the shipper to bring suit within one
year after the delivery of the goods or the date when the
goods should have been delivered
In the case of any actual or apprehended loss or damage the
carrier and the receiver shall give all reasonable facilities to
each other for inspecting and tallying the goods.
(a) Period to File Claim. Consequently, a claim for
damages must be filed with the carrier within
the following period:
(1) If the damage is apparent, the claim
should be filed immediately upon
discharge of the goods.
(2) The claim must be made within three
days from delivery if the damage is not
apparent.
(b) Period Not Mandatory. Failure to file a notice of
claim within the given period will not bar
recovery. Hence, failure to file a notice of claim is
not a defense that is available to a common
carrier in international carriage of goods by sea.
PRESCRIPTION IN OVERLAND TRANSPORTATION AND
COASTWISE SHIPPING
There being no special rules with respect to the contract of
carriage involving overland transportation and coastwise
shipping of goods, the general rule under the Civil Code on
extinctive prescription applies.
PRESCIPTION IN INTERNATIONAL CARRAIGE OF GOODS
The action for damages under the COGSA for international
carriage of goods must be filed within a period of one year
from discharge of the goods. In other words, the
prescription period of one year commences from
discharge. For example, the case filed within the
prescriptive period if the insurance company subrogee
filed the case 8 months after all the packages were
delivered.
(a) Who Can Invoke. “The carrier and the ship may
put up the defense of prescription if the action
for damages is not brought within one year after
the delivery of the goods or the date when the
goods should have been delivered.” It has been
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 held that not only the shipper, but also the
consignee or legal holder of the bill may invoke
the prescriptive period.
(b) It is noted that the term “carriage of goods”
covers the period from the time when the goods
are loaded to the time when they are discharged
from the ship. It can be inferred that the period
of time when the goods have been discharged
from the ship and given to the custody of the
arrastre operator is not covered by the COGSA.
The COGSA does not mention that an arrastre
operator may invoke the prescriptive period of
one year; hence, it does not cover the arrastre
operator.
(c) Effect of Demand. The period is not suspended
by an extra-judicial demand. Article 1155 of the
Civil Code cannot be applied because matters
affecting transportation of goods by sea should
be decided in as short a time as possible. The
application of the provision of Article 1155 of the
Civil Code would unnecessarily extend the period
and permit delays in the settlement of questions
affecting transportation, contrary to the clear
intent and purpose of the law.
(d) Conversion or Misdelivery. The period does not
apply to conversion or misdelivery. The one-year
period provided for the Section 3 (6) of the
COGSA refers to loss of the cargo and not to
misdelivery. The Civil Law concept of “loss” is
applicable. It is understood that a thing is lost
when it perishes, or goes out of commerce, or
disappears in such a wat that its existence is
unknown or it cannot be recovered.
(e) Delay. Similarly, damage arising from delay or
late delivery is not the damage or loss
contemplated under the COGSA. The goods are
not actually lost or damaged. The applicable
period is 10 years.
(f) Collision Cases. The rule applies in collision
cases. However, the one year period starts not
from the date of the collision but when the
goods should have been delivered, had the
cargoes been saved.
(g) Extension by Agreement. The one-year
prescriptive period can be extended by
agreement of the parties. There is nothing in
COGSA that prohibits such agreement extending
the period within which to file the case.
PRESCRIPTION AND SUBROGATION
The insurer who is exercising its right of subrogation is also
bound by the one year prescriptive period. This is
understandable because the insurer, in the exercise of the
right of subrogation, is pursuing the cause of action
Stephen Michael Ben
AUSL
belonging to the shipper/insured. Hence, any defense
available against the shipper is available against the
insurer. However, it does not apply to the claim against
the insurer for the insurance proceeds is based on contract
that prescribes in 10 years.
NOTICE OF CLAIM AND PRESCRIPTION IN AIR
TRANSPORTATION
There is no specific requirement for a notice of claim
under the New Civil Code with respect to air
transportation. The applicable rule on international air
transportation can be found in the Warsaw Convention.
RULES UNDER WARSAW CONVENTION
Under the Warsaw Convention, the complaint or claim
with the carrier must be filed within 3 days from receipt of
the baggage and 7 days in case of goods. In case of delay,
14 days after the baggage was placed at the disposal of the
passenger. However, under the provisions of the Warsaw
Convention, the notice of claim is a condition precedent,
hence, the notice must precede a suit for enforcement.
On the other hand, the prescriptive period under the
Warsaw Convention is two years form the date of arrival at
the destination, or from the date the aircraft ought to have
arrived or from the date on which the transportation
stopped.
LIMITING STIPULATIONS
The carrier can also, in proper cases, invoke a partial
defense in the form of a limiting stipulation. For example,
the parties may expressly stipulate a fixed amount that
may be recovered by the shipper or owner of the goods
which requires that:
(a) It is reasonable and just under the circumstances
and
(b) It is fairly and freely agreed upon.
Hence, as a defense, the carrier will claim that the liability,
if any, is not for the full amount that the shipper or owner
is claiming but only up to the maximum amount fixed
under the contract.
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