to board.

TRANSPORTATION LAW
Atty. Steve Dicdican
CHAPTER I. GENERAL CONSIDERATIONS
-

Contract of transportation when a person obligates

himself to transport persons or property from one place to
another for a consideration.
Person who obligates himself may be:
1. Common carrier
2. Private carrier
The parties to a contract of transportation depends on
whether it is a carriage of goods or of passengers.

Art. 1732. Common Carriers are persons, corporations, firms or

associations, engaged in the business of transporting goods,
passengers or both, by land, water, or air for compensation,
offering their services to the public.
-

Carriage of Pasengers:
-

Passengers One who travels in public conveyance by

virtue of a contract, express or implied, with the carrier as
to the payment of the fare or its equivalent.
TN: Even if the fare is gratuitous, he is still considered a
passenger.

Baliwag Transit vs. Court of Appeals

-

The real party in interest in a breach of contract of

carriage is the injured passenger and not his parents.
Because every action must be brought by the person
whose contractual right is invaded

Carriage of Goods:
-

Shipper Person who delivers the goods to the carrier for

transportation and who pays the consideration.

Consignee Person to whom the goods are to be

delivered. He may be the shipper or a third person.

Perfection : Contract of Carriage of Passengers

-

Contract to carry agreement to carry the passenger at

some future date.
Contract of carriage Considered a real contract,
delivery is perfection.

Perfection: Contract of Carriage of Goods

-

Consensual agrees to accept and transport goods at

some future date.

Perfected if The goods are unconditionally placed at the

possession of the carrier.

Aircraft there is a perfected contract even if no tickets

are issued to said passengers as long as there is already a
meeting of minds. Passenger had checked in at the
departure counter and passed through customs and
immigrations and had flown.

Buses and Jeepneys Once a public utility vehicle stops,

it is in effect making a continuous offer to bus riders. Once
the passenger accepts the offer he is already attempting

Trains Purchasing of tickets, and presents himself at

proper place for transportation with the bona fide intention
to use the facilities.

Civil Code makes no distinctions with the means of

transporting.

Effect of Charter Party Charter party may transform a

common carrier to a private carrier, however it must be a
bareboat or demise charter, and that charterer mans the
vessel. Not merely a voyage charter, possession and control
must be transferred to the charterer as in a bareboat or
demise charter.
Distinction between a common carrier and private carrier:
-

The distinction lies in the character of the business, such

that if the undertaking is for a single transaction and not
part of the general business or occupation, it is a private
carrier.

Common carriers are required to observe extraordinary

diligence in the goods they carry. While Private Carriers
are required only to observe ordinary diligence.
o
Extraordinary diligence Observance of
diligence to provide safety to its passengers as
far as human foresight can provide, using the
diligence of a very cautious person.

Towage Hired to bring the vessel to another place, and

requires only ordinary diligence.
Arrastre Handling the cargo within the wharf, without
nothing to do with navigation. It is required to observe the
same degree of diligence of a common carrier or a
warehouseman. (Extraordinary diligence)
Rationale: He being the custodian of the goods, has the
obligation to take care of the goods.
Stevedoring loading or unloading of coastwise vessels at
the port. Handling the cargo in the holds of the vessel of
between the ships tackle. Ordinary diligence in the handling
of the goods is required.
Travel agency is not a common carrier, because it merely
facilitates the booking, ticketing and accommodation. Require
only ordinary diligence.

Art. 1766. All maters not regulated by this code, rights and
obligations of common carriers shall be governed by the Code of
Commerce and Special Laws.

Art. 1753. The laws of the country which the goods are to be
transported, shall govern the liability of the common carrier for
their loss, destruction or deterioration.
Coastwise Shipping
Carriage of Goods from
Foreign Ports to Phil
Ports.
Overland Transportation
Air Transportation
International Air
Transportation

NCC is primary, Code of Commerce is

suppletory.
NCC is primary, Code of Commerce on
all matters not regulated by the NCC.
Carriage of goods by sea act, suppletory.
NCC is primary, Code of Commerce is
suppletory.
NCC is primary, Code of Commerce is
suppletory.
NCC is primary, Code of Commerce is on
all matters not regulated by the NCC.
Warsaw Convention suppletory.

CHAPTER IV - PUBLIC UTILITIES

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A Public utility is engaged in public service, providing

basic commodities and services indispensable to the
interest of the general public. For this reason, a public
utility submits to the regulation of government authorities
by its police power of the state.

BASIS FOR REGULATION OF PUBLIC UTILITIES

-

The police power of the state justifies the regulation of

public utilities. In other words, regulation of public utilities
is founded upon police powers of the state and regulation
thereof is considered a valid exercise.

OWNERSHIP OF PUBLIC UTILITIES

-

Ownership of public utilities is subject to regulation by the

State. Concerned government agencies may impose
certain requirements to persons or entities.

Nature of Business
-

Common Carriers exercise a sort of public office and have

duties to perform which the public is interested.
Specially cater the needs of the public, conduce their
effort and convenience.

Registered Owner Rule/Kabit System

-

In case of culpa contractual, not only the operator of the

vehicle may be liable. In certain cases, victim may be
allowed by law to sue third parties or the registered owner
or the holder of the certificate of public convenience. The
situation is this, the holder of the CPC, lends it to an
operator for a fee.
GR: The registered owner of a vehicle is liable for any
damage caused by the negligent operation of the vehicle
although the same was already sold or conveyed to
another person at the time of accident.
o

Because Registration is required not to make

registration the operative act in which ownership
of the vehicles is transferred, but the permit to
use and operation of vehicle on a public highway.
The Rationale of registration, is merely to
identify the owner if any accident will happen.

EXC: If the vehicle was taken out from his garage without
his knowledge or consent.

In case of a lease: The registered owner rule still applies,

even if the owner leased the vehicle to another who is the
actual operator. The lessor should have registered the
lease contract with the LTO. So that the lease will bind
third persons aggrieved by a tort.

In Pari Delicto Rule Applies: Persons who are parties to

the KABIT system cannot invoke against the other, to
enforce their illegal agreement as to escape liability.

CASE DOCTRINES, CASE SET # 1:

1. Baliwag Transit vs Court of Appeals
Common Carriers are bound to deliver its passengers as
far as human care and foresight can provide using utmost
diligence of a very cautious person, with due regard for all
circumstances.
2. Aboitiz Shipping Co. vs Court of Appeals
The Relationship between the common carrier and the
passenger does not cease when the passenger merely
alights from the vessel or vehicle, but after reasonable
time or opportunity to leave the carriers premises.
3. Loadstar Shipping Co vs Court of Appeals
Common carriers are persons, corporations, firms or
associations engaged in the transportation of goods or
passengers, or both, by land, air, or water, for
compensation, offering their services to the public.
The above provision makes no distinction between one
who offers its services on a regular basis and one offering
it as a sideline.
Analysis: LOADSTAR is a common carrier, it is not necessary that
the carrier be issued a certificate of public convenience and its
public character is not altered by the fact that the carriage of goods
was periodic.
4. Sabena Belgian World Airlines vs Court of Appeals
Misconduct on the part of the carriers employees toward
a passenger, gives the latter (passenger) an action for
damages against the carrier.

Analysis: Common carriers are liable for the acts of their

employees.

5. British Airways vs Court of Appeals - PAL

Carriage by plane, although performed by successive
carriers is regarded as a single operation, and that the
carrier issuing the passenger ticket is considered the
principal party and the other carrier merely subcontracts.
Analysis: In this case PAL disclaimed liability which was affirmed
by the SC, because it was British Airways was the one who issued
the ticket. Therefore PAL merely acted as an agent of British
Airways. The passenger could have sued british airways alone
because PAL was not a party to the contract. But it is not safe to
say that PAL is relieved from any liability.

6. Ganzon vs Court of Appeals

A Common carrier may be exculpated from liability, when
loss is due to an order of competent public authority.
Provided such order is lawful, public officer issuing it had
the power to issue and it was issued under process of legal
authority.

Analysis: In this case, he was found to be a common carrier, but

nevertheless freed from liability, because the robbers have acted
with grave and irresistible force and having acted with
extraordinary diligence in the care of the goods. By employing a
security guard and driving one of the vehicles himself.
9. Fabre v. World Christian Fellowship
Due diligence in the selection and supervision of its
employees not satisfied upon the finding that the
applicant possessed a drivers license.
Due diligence in the supervision of employees requires
formulation of rules and regulations.
Common carriers are liable to the death or injuries of its
passengers through the willful negligent acts of its
employees, although they may have acted beyond their
scope of authority.
Analysis: Liable being a common carrier, he is required to observe
extraordinary diligence. Even as a private carrier he would still be
liable, under culpa contractual of breach of contract or culpa
aquiliana for negligence in the selection and supervision of his
employee.
10. Bascos vs. Court of Appeals Cipriano
The True Test of a Common Carrier:

7. Samar Mining Company vs Nordeutscher Lloyd and CF

Sharp & Co.
The extraordinary responsibility of common carriers last
from the time the goods are unconditionally placed in the
possession of, and received by the carrier for
transportation, until the same is delivered, actually or
constructively, by the carrier to the consignee or his
agent.
Analysis: The responsibility of the common carrier in this case
ceased during the time the cargo has been delivered to the
warehouse of the carrier (agent of Samar Mining, a local shipper).
8. De Guzman vs Court of Appeals:
The definition of a common carrier under the code, does
not make any distinction between one whose principal
business is the carrying of goods or passengers and one
who only does such as an ancillary activity. Neither does it
distinguish between a carrier offering their services to the
public and one who offers its services to a limited portion
of the general population.
GR: Common Carriers are required to observe
extraordinary diligence in the handling of goods or
passengers. In case of loss, destruction or deterioration of
the goods, they are presumed to be at fault.
EXC: Unless they observed extraordinary diligence.
Common carriers are held responsible for the acts of
thieves or robbers, unless the thieves or robbers acted
with grave or irresistible threat, violent and force and
carrier observed extraordinary diligence.

Whether the given undertaking is part of the general

business engaged by the carrier, which he has held to the
public as his occupation, rather the quantity or extent of
business transacted.
To exculpate a common carrier from liability from
hijacking, he must prove that the robbers or hijackers
acted with grave or irresistible threat, violent or force.
11. FGU Insurance vs GP Sarmiento Trucking Corp.
In Culpa Contractual or Breach of Contract of Carriage,
mere proof of the existence of a contract and failure to
perform a contract, exist a prima facie right to relief. In
this case, it is not a common carrier, bound to exercise
ordinary diligence.
Analysis: Notwithstanding that the carrier is only bound to
exercise ordinary diligence being a private carrier, it is still liable for
breach of contract. During the happening of the loss, a presumption
arise that it was negligent, then it has the burden of proving
exercise of ordinary diligence. It failed to do so.
12. Asia Lighterage vs Court of Appeals
Common Carriers are bound to observe extraordinary
diligence over the goods transported by them.
They are presumed to have acted negligently in case of
loss, deterioration, or destruction of the goods. To
exculpate them from liability from loss arising from a
typhoon or storm, it must be proven that the typhoon or
storm is the proximate and only cause for the loss.
Analysis: By the loss of the cargo, it was presumed to be at fault.
It cannot exculpate itself from liability because there was a storm.

The storm was not the proximate and only cause for the loss. It was
the hole on the ship brought about by a sunken object. Then after
being molded it was forced to sale then it sunk completely.

16. Cogeo Cubao Operators vs Court of Appeals Lungsod

Silangan

13. Crisostomo vs Caravan Travel and Tours

A travel agency is not a common carrier neither a private
carrier, it is merely an agent of the airline.
Analysis: A travel agency is merely an agent of an airline. It
merely facilitates the booking, ticketing and accommodation. The
services it provides is not within the definition of a contract of
transportation.
14. Luzon Stevedoring v. Public Service Commission

A certificate of public convenience is included in the

term property, in the broad sense of the term.
A certificate of public convenience does not confer upon
the holder any proprietary right or interest in the route
covered. However being a property right, it cannot be
taken away without due process of law. Appropriate
actions may be maintained in courts by the holder of the
certificate against those who have not been authorized to
operate in competition.

It is not necessary that one holds himself out as serving or

willing to serve the public in order to be considered public
service.

Analysis: A franchise is issued by a local legislative body, while a

CPC is issued by an appropriate commission where there is no
need for issuance of a franchise.

To Constitute Public Service, it is not necessary that it

would be dedicated to public use, it is sufficient that it
would be in some way impressed with public interest.

17. San Pablo vs. Pantranco

It is considered public service even if it is conducted for

hire or compensation even if the operator deals only with
a limited portion of the public.
The Public Service Law was not only enacted to protect
the public against unreasonable charges, poor and
inefficient service but also to prevent Ruinous competition.
o

Ruinous Competition : Agreements or practice

which may tend to wreck or impair the financial
stability and efficiency of public utilities who offer
their services to the public in general. These
comes within the police power of the state to
regulate, these utilities having imbued with public
interest.

Analysis: Here it is trying to kill the competition. The financial

condition of other inter-island shipping utilities are impaired. These
utilities having been imbued with public interest, is within the
power of the state to regulate.
15. De Lat vs. Public Service Commission
Nobody has the exclusive right to secure a franchise or a
certificate of public convenience.
To be issued a certificate of public convenience. One
must be:
1. Citizen of the Philippines or Corporation constituted and
organized under the laws of the Philippines.
2. Must be financially capable of undertaking the proposed
service.
3. Applicant must prove that the operation of the public
service proposed will promote public interest.
Analysis: The applicant was able to establish to comply the 1st and
2nd. As to the third requisite, it is without a doubt that it would
promote public interest. It was found that Ice was needed for the
growing population, and it was even the Barrio Captain that
requested him to operate an Ice Plant, due to the demand.

A ferry or boat service has been considered as in continuation of a

highway when crossing rivers or lakes or small bodies of waters.
Crossing over an open sea however cannot be considered as
continuation of a highway. A separate CPC should be secured in
order to operate for an interisland coastwise shipping.
The contention of Pantranco that it is a private carrier for its
exclusive coastwise shipping of its buses is untenable. Pantranco
issues separate tickets when they board the M/V black double in
crossing the open sea.
18. Manzanal v. Ausejo
Under the Public Service Act, the power of the commission
to suspend or revoke any certificate may be exercised,
when the holder thereof has violated willfully and
maliciously refused to comply with any order, rule or
regulation of the Commission or of any provision of the
public service act.
The following are instance, where cancellation of the
certificate of public convenience is held valid:
1. Where holder is a mere dummy
2. Where Operator ceased operation and placed his
buses on storage
3. Where Operator abandons, totally the service
The Public Service Act provision which requires holders of
CPCs to provide a service that is safe, proper and
adequate. The words unsafe, inadequate, improper
should be interpreted as to protect the public against
unreasonable charges, poor and inefficient service, and to
secure adequate sustained service at least possible cost.
Analysis: None of the circumstances where present in the case.
The hold-up incident does not clearly link to the taxi-cab.
19. PLDT vs National Telecommunications Commission (NTC)
A provisional authority to operate a public utility is not
equivalent to a certificate of public convenience. Its
operation is not exclusive, and its lifetime may be revoked
by NTC at any time in accordance with law.

A franchise is a property right which cannot be revoked or

forfeited without due process of law. It cannot be
collaterally attacked, there must be a direct proceeding
brought by the State, since its unlawful exercise is
primarily a concern of Government.
The motive of public need, public interest and common
good are the deciding factors which motivated NTC to
grant provisional authority to ETCI.
Analysis: There is indeed a virtual monopoly in the telephone
system at present, and service is sadly inadequate and customer
demands are hardly met. Free competition may provide the answer
to a much desired improvement in the quality and delivery of an
improved and faster technology.

CONDUCT AND DILIGENCE REQUIRED

GR: NON-DISCRIMINATION
F.C. Fisher vs Yangco
Discrimination happens if similar goods or persons who
are similarly situated are refused carriage by an
unreasonable standard or classification.
EXC: UNFIT FOR TRANSPORTATION
Art. 356. The law provides that carriers may refuse
packages which appear unfit for transportation.
If carriage is by railway, and the shipment is insisted upon,
the company shall transport them, being exempt from all
responsibility. Provided its objections appear in the bill of
lading.
REASONABLE DELAY
Art. 1740. If the common carrier negligently incurs in delay in
transporting the goods, a natural disaster shall not free such carrier
from responsibility.
-

If the Common carrier was NEGLIGENT and his

negligence caused DELAY, then there is a fortuitous
event. It will not exempt him from liability.

Art. 1747If the common carrier delays the transportation of the

goods without just cause or changes the stipulated or usual route,
the contract limiting the common carriers liability cannot be
availed of in case of loss, destruction or deterioration of the goods.
GR: If there is a contract limiting the common carriers
responsibility in case of loss, destruction or deterioration
to the goods. That stipulation will be followed.
EXC: If the common carrier:
1. Delays in Transporting the Goods without just cause
2. Changes the usual or stipulated route.
Trans-Asia Shipping vs CA
The common carrier was negligent. Before commencing
the voyage, the petitioner undertook some repairs on the
vessels engines. Before it could finish the repairs, it

allowed the vessel to operate which caused the vessel to

stop and remain adrift at sea.
EXTRAORDINARY DILIGENCE
Article 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.
SUBSECTION 2. Vigilance Over Goods
Article 1734. Common carriers are responsible for the
loss, destruction, or deterioration of the goods, unless the
same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner of the
goods;
(4) The character of the goods or defects in the
packing or in the containers;
(5) Order or act of competent public authority.
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.
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.

Article 1750. A contract fixing the sum that may be

recovered. by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has
been fairly and freely agreed upon.

Article 1745. Any of the following or similar stipulations

shall be considered unreasonable, unjust and contrary to
public policy:

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.

(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;

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.

(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 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.
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.
Article 1748. An agreement limiting the common
carrier's liability for delay on account of strikes or riots is
valid.
Article 1749. A stipulation that the common carrier's
liability is limited to the value of the goods appearing in
the bill of lading, unless the shipper or owner declares a
greater value, is binding.

ARTICLE 363. Outside of the cases mentioned in the

second paragraph of Article 361, the carrier shall be
obliged to deliver the goods shipped in the same condition
in which, according to the bill of lading, they were found at
the time they were received, without any damage or
impairment, and failing to do so, to pay the value which
those not delivered may have at the point and at the time
at which their delivery should have been made.
If those not delivered form part of the goods transported,
the consignee may refuse to receive the latter, when he
proves that he cannot make use of them independently of
the others.
ARTICLE 364. If the effect of the damage referred to in
Article 361 is merely a diminution in the value of the
goods, the obligation of the carrier shall be reduced to the
payment of the amount which, in the judgment of experts,
constitutes such difference in value.
ARTICLE 365. If, in consequence of the damage, the
goods are rendered useless for sale and consumption for
the purposes for which they are properly destined, the
consignee shall not be bound to receive them, and he may
have them in the hands of the carrier, demanding of the
latter their value at the current price on that day.
If among the damaged goods there should be some pieces
in good condition and without any defect, the foregoing
provision shall be applicable with respect to those
damaged and the consignee shall receive those which are
sound, this segregation to be made by distinct and
separate pieces and without dividing a single object,
unless the consignee proves the impossibility of
conveniently making use of them in this form.
The same rule shall be applied to merchandise in bales or
packages, separating those parcels which appear sound.