II.

OBLIGATIONS OF THE PARTIES

A. Obligation of Carrier
1. Duty to Accept
Fisher v. Yangco - CC cannot lawfully decline to accept a particular class of
goods for carriage unless reasonable and necessary. Mere prejudice or whim will
not suffice. The grounds of the discrimination must be substantial ones.
The mere fact that violent and destructive explosions can be obtained by the
use of dynamite under certain conditions = NOT sufficient to justify the refusal of a
vessel
If by the exercise of due diligence, taking all reasonable precautions, the
danger of explosions can be eliminated, the carrier would not be justified in
subjecting the traffic in this commodity to prejudice or discrimination
2. Duty to Deliver
i. Time of Delivery
Maersk v. CA - In the absence of an undertaking by a common carrier to
deliver at a given date or time, delivery of shipment or cargo should at least be
made within a reasonable time. (expected date of arrival reflected in the bill of
lading may be considered)
A delay in delivery of gelatin capsules for use in pharmaceutical products for
a period of two (2) months and seven (7) days considered beyond the realm of
reasonableness
.
ii. Consequences of Delay
a. Abandonment
Magellan Manufacturing v. CA - In overland transportation, an unreasonable
delay in the delivery of transported goods is sufficient ground for the abandonment
of goods. By analogy, this can also apply to maritime transportation.
b. Right of Passengers In Case of Delay
Trans-Asia Shipping Line v. CA - Where the delay in a contracted voyage is
incurred after the commencement of such voyage, Article 698 of the Code of
Commerce, not Article 1169 of the Civil Code, applies. The carrier is liable for any
loss or damage , including any pecuniary loss or loss of profit which the passenger
may have suffered by reason thereof.
Art. 698 of CC: voyage already begun, interrupted -1. PASSENGERS obliged to PAY the fare in proportion to the distance covered
2. NO RIGHT to recover loss or damages if FE
3. Right to indemnity interruption caused by CAPTAIN exclusively
4. IF caused by DISABILITY of vessel, passenger agree to await the repairs
NOT required to pay any increased price of passage; living expenses for
his own account
3. Duty to Exercise Extraordinary Diligence
i. Presumption of Negligence
a. Carriage of Goods
Belgian Overseas Chartering v. Phil First Insurance Co - Mere proof of delivery
of the goods in good order to a common carrier and of their arrival in bad order at
their destination constitutes a prima facie case of fault or negligence against the
carrier.

Tabacalera Insurance Co v. North Front Shipping Inc - Common carrier is

presumed negligent in case of loss, destruction, or deterioration of goods
FGU Insurance v. G.P Sarmiento - Res ipsa loquitur (the thing speaks for
itself; one is presumed to be negligent if he/she/it had exclusive control of
whatever caused the injury even though there is no specific evidence of an act of
negligence, and without negligence the accident would not have happened)
generally finds relevance whether or not a contractual relationship exists between
the plaintiff and the defendant, for the inference of negligence arises from the
circumstances and nature of the occurrence and not from the nature of the relation
of the parties.
b. Carriage of Passengers
Abeto v. PAL - By the contract of carriage, the carrier assumes the express
obligation to transport the passenger to his destination safely and to observe
extraordinary diligence with a due regard for all the circumstances, and any injury
that might be suffered by the passenger is right away attributable to the fault or
negligence of the carrier.
BLTB v. IAC - A driver of a motor vehicle is presumed negligent if he was
violating any traffic regulation at the time of the mishap, unless there is proof to
the contrary. The common carrier's liability for death or injury to its passengers is
based on its contractual obligation to carry its passengers safely to their
destination; Utmost diligence of very cautious persons is required of them.
ii. Duration of Duty
a. Carriage of Goods
Saludo, Jr. v. CA The goods are deemed delivered to the carrier when the
goods are ready for and have been placed in the exclusive possession, custody and
control of the carrier for the purpose of their immediate transportation and the
carrier has accepted them. When such delivery has thus been accepted by the
carrier, the liability of the common carrier commences eo instanti.
Macam v. CA - DURATION OF EXTRAORDINARY RESPONSIBILITY; Article 1736
of the Civil Code provides -Art. 1736. The extraordinary responsibility of the
common carriers 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.
Samar Mining v. Nordeutscher Lloyd - The carrier may be relieved of the
responsibility for loss or damage to the goods upon actual or constructive delivery
of the same by the carrier to the consignee, or to the person who has a right to
receive them
Lu do v. Binamira - While the goods are in its possession, it is but fair that it
exercise extraordinary diligence in protecting them from damage, and if loss
occurs, the law presumes that it was due to its fault or negligence. This is

necessary to protect the interest the interest of the owner who is at its mercy. The
situation changes after the goods are delivered to the consignee.
Republic v. Lorenzo Shipping Corp. - The surrender of the original bill of
lading is not a condition precedent for a common carrier to be discharged of its
contractual obligation. If surrender of the original bill of lading is not possible,
acknowledgment of the delivery by signing the delivery receipt suffices.
b. Carriage of Passengers
LRTA v. Navidad - The duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so long as
the passengers are within its premises and where they ought to be in pursuance to
the contract of carriage.
Dangwa Transportation Co v. CA - It is the duty of common carriers of
passengers, including common carriers by railroad train, streetcar, or motorbus, to
stop their conveyances a reasonable length of time in order to afford passengers
an opportunity to board and enter, and they are liable for injuries suffered by
boarding passengers resulting from the sudden starting up or jerking of their
conveyances while they are doing so.
La Mallorca v. CA - The relation of carrier and passenger does not cease at
the moment the passenger alights from the carriers vehicle at a place selected by
the carrier at the point of destination, but continues until the passenger has had a
reasonable time or reasonable opportunity to leave the current premises
Aboitiz Shipping v. CA - Relationshp 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.
4. Defenses of Common Carriers
i. Fortuitous Event
a. Requisites
Schmitz Transport v. Transport Ventures - In order, to be considered a
fortuitous event, however, (1) the cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply with his obligation, must be
independent of human will; (2) it must be impossible to foresee the event which
constitute 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 any manner; and (4) the obligor must be free from any
participation in the aggravation of the injury resulting to the creditor.
Yobido v. CA - The explosion of the new tire may not be considered a
fortuitous event.
b. Fire
Eastern Shipping v. IAC - Fire may not be considered 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.
c. Hijacking

Gacal v. PAL Hijacking of the carrier does not fall among the five categories
of exempting causes. The carriers vehicle must be dealt with under 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.
d. Mechanical Defects
Necesito v. Paras - A carrier is liable to its passengers for damages caused by
mechanical defects of the conveyance.
While the carrier is not an insurer of the safety of the passengers, it should
nevertheless be held to answer for the laws its equipment if such flaws were at all
discoverable. In this connection, the manufacturer of the defective appliance is
considered in law the agent of the carrier, and the good repute of the manufacturer
will not relieve the carrier from liability. The rationale of the carriers liability is the
fact that the passenger has no privity with the manufacturer of the defective
equipment; hence, he has no remedy against him, while the carrier usually has.

ii. Order of Public Authority

Ganzon v. CA - Before a common carrier could be absolved from
responsibility on the ground that he was ordered by competent public authority, it
must be shown that same 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.
iii. Defenses in Carriage of Passenger
a. Employees
Maranan v. Perez - Liability for intentional assaults committed by its
employees on passengers; Difference between old and New Civil Code provisions.
Unlike the old Civil Code, the New Civil Code expressly makes the common
carrier liable for intentional assaults committed by its employees upon its
passengers (Art. 1759). Carrier is liable to the heir of a passenger killed by its
driver
Gillaco v. Manila Railroad - The shooting in question was therefore "caso
fortuito" within the definition of Art. 1105 of the old Civil Code (which is the law
applicable), being both unforeseeable and inevitable under the given
circumstances; and pursuant to established doctrine, the resulting breach of the
company's contract of safe carriage with the deceased was excused thereby.
b. Other Passengers and Third Persons
Bachelor Express v. CA - The sudden act of the passenger who stabbed
another passenger in the bus is within the context of force majeure. To be absolved
from liability in case of force majeure, it is not enough that the accident was
caused by force majeure; Common carrier must still prove that it was not negligent
in causing the injuries resulting from such accident.
Pilapil v. CA 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 carriers employees to prevent the tort from being committed
when the same could have been foreseen and prevented by them. Further, under

the same provision, it is to be noted that when the violation of the contract is due
to the wilful acts of strangers, as in the instant case, the degree of care essential to
be exercised by the common carrier for the protection of its passenger is only that
of a good father of a family.
Fortune Express v. CA - A common carrier can be held liable for failing to
prevent a hijacking by frisking passengers and inspecting their baggages. Had
petitioner and its employees been vigilant they would not have failed to see that
the malefactors had a large quantity of gasoline with them.
iv. Passengers Baggages
Quisumbing Sr v. CA - Failure to take certain steps that a passenger in
hindsight believes should have been taken is not the negligence or misconduct
which mingles with force majeure as an active and cooperative cause
Pan-Am v. Rapadas - The reason behind the limitation of liability for arise
from the difficulty, if not the impossibility, of establishing with clear preponderance
of evidence of evidence the contents of a lost suitcase. The limitation is binding on
the passenger who fails to declare a higher value and failed to exercise proper
prudence.
British Airways v. CA - American jurisprudence provides that an air carrier is
not liable for the loss of baggage in an amount in excess of the limits specified in
the tariff which was filed with the proper authorities, such tariff being binding on
the passenger regardless of the passengers lack of knowledge thereof or assent
thereto. This doctrine is recognized in this jurisdiction.
Tan v. Northwest - Where in breaching the contract of carriage the defendant
airline is not shown to have acted fraudulently or in bad faith, liability for damages
is limited to the natural and probable consequences of the breach of obligation
which the parties had foreseen or could have reasonably foreseen. In that case,
such liability does not include moral and exemplary damages.
Sarkies Tour v. CA - 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 transported by them, and this liability 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 person who has a right to receive them.
Moral damages and exemplary damages are due where the negligence and
bad faith of a common carrier has been duly established.
B. Obligations of the Shipper, Consignee and Passenger
1. Negligence of Shipper or Passenger
i. Last Clear Chance
Phil Rabbit v. IAC - The principle about the last clear chance would call for
application in a suit between the owners and drivers of the two colliding vehicles. It
does not arise where a passenger demands responsibility from the carrier to
enforce its contractual obligations. For it would be inequitable to exempt the
negligent driver of the jeepney and its owners on the ground that the other driver
was likewise guilty of negligence.

Bustamante v. CA - The doctrine broadly states that the negligence of the

plaintiff does not preclude a recovery for the negligence of the defendant where it
appears that the defendant, by exercising reasonable care and prudence, might
have avoided injurious consequences to the plaintiff notwithstanding the plaintiffs
negligence.
ii. Assumption of Risk
JAL v. CA - Airline passengers must take such risks incident to the mode of
travel. Adverse weather conditions or extreme climatic changes are some of the
perils involved in air travel, the consequences of which the passenger must
assume or expect. After all, common carriers are not the insurer of all risks.
Calalas v. CA - The taking of an extension seat is not an implied
assumption of risk on the part of the passenger; A caso fortuito is an event which
could not be foreseen, or which, though foreseen, was inevitable.
The doctrine of proximate cause is applicable only in actions for quasidelicts, not in actions involving breach of contract.
Upon the happening of the accident, the presumption of negligence at once
arises, and it becomes the duty of a common carrier to prove that he observed
extraordinary diligence in the care of his passengers.
PNR v. CA - A passenger is guilty of contributory negligence where he chose
to ride on the open platform of a train and failed to hold tightly on the vertical grab
bar. Moral and exemplary damages not due in such a case.
Isaac v. Al Ammen Trans. Co - 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.
III. EXTRAORDINARY DILIGENCE
A. Effect of Stipulation
1. Gratuitous Passengers
Lara v. Valencia - Deceased and company are not considered as passengers but
merely accommodation passengers. Carrier is not bound to exercise extraordinary
diligence but ordinary diligence only, since they are only accommodation passengers.
B. Extraordinary Diligence in Carriage by Sea
1. Seaworthiness
Delsan Transport v. CA - Certificates tending to show that at the time of drydocking and inspection by the Philippine Coast Guard, the vessel was fit for voyage do
not necessarily take into account the actual condition of the vessel at the time of the
commencement of the voyage.
Caltex v. Sulpicio Lines - (1) For a vessel to be seaworthy it must be adequately
equipped for the voyage and manned with a sufficient number of competent officers and
crew; (2) Because of the implied warranty of seaworthiness, shippers of goods, when
transacting with common carriers, are not expected to inquire into the vessels
seaworthiness.

2. Overloading
Negros Navigation v. CA The duty to exercise due diligence likewise includes the
duty to take passengers or cargoes that are within the carrying capacity of the vessel.
3. Proper Storage
Belgian Overseas Chartering v. Phil First Insurance - Common carriers, from the
nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence and vigilance with respect to the safety of the goods and the
passengers they transport. Equipped with the proper knowledge of the nature of steel
sheets in coils and of the proper way of transporting them, the master of the vessel and
his crew should have undertaken precautionary measures to avoid possible deterioration
of the cargo.
4. Negligence of Captain and Crew
Mecenas v. CA - Whether or not the captain was "off-duty" or "on-duty" at or
around the time of actual collision is quite immaterial; there is, both realistically speaking
and in contemplation of law, no such thing as "off-duty" hours for the master of a vessel
at sea that is a common carrier upon whom the law imposes the duty of extraordinary
diligence- the duty 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.
C. Extraordinary Diligence in Carriage by Land
1. Condition of Vehicle
Bayasen v. CA - Under the particular circumstances of the instant case, the
petitioner- driver who skidded could not be regarded as negligent, the skidding being an
unforeseen event, so that the petitioner had a valid excuse for his departure from his
regular course. The negligence of the petitioner not having been sufficiently established,
his guilt of the crime charged has not been proven beyond reasonable doubt. He is,
therefore, entitled to acquittal.
2. Traffic Rules
Mallari v. CA - Under Art. 2185 of the Civil Code, unless there is proof to the
contrary, it is presumed that a person driving a motor vehicle has been negligent if at
the time of the mishap he was violating a traffic regulation.
Pestano v. Sumayang - When an injury is caused by the negligence of a servant or
an employee, the master or employer is presumed to be negligent either in the selection
or in the supervision of that employee. This presumption may be overcome only by
satisfactorily showing that the employer exercised the care and the diligence of a good
father of a family in the selection and the supervision of its employee.
3. Duty to Inspect
Nocum v. Laguna Tayabas Bus Co - A carrier is ordinarily not liable for injuries to
passengers from fires or explosions caused by articles brought into its conveyances by
other passengers, in the absence of any evidence that the carrier, through its
employees, was aware of the nature of the article or had any reason to anticipate danger
therefrom
D. Extraordinary Diligence in Carriage by Air

Korean Airlines v. CA - The contract of air carriage generates a relation attended

with a public duty and any discourteous conduct on the part of the carriers employees
toward a passenger gives the latter an action for damages against the carrier.
PAL v. CA - 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.
Zalamea v. CA - Whether or not said policies (that overbooking of flights is a
common and accepted practice in the US, thus does not amount to bad faith) were
incorporated or deemed written on petitioners contracts of carriage. -> Foreign laws do
not prove themselves nor can the court take judicial notice of them. Like any other fact,
they must be alleged and proved.
IV. BILL OF LADING AND OTHER FORMALITIES
A. Concepts
1. Definition
Macondray v. Acting Commissioner of Customs
2. Kinds
Magellan v. CA - An on board bill of lading is one in which it is stated that the goods
have been received on board the vessel which is to carry the goods, whereas a received
for shipment bill of lading is one in which it is stated that the goods have been received
for shipment with or without specifying the vessel by which the goods are to be shipped.
Received for shipment bills of lading are issued whenever conditions are not normal and
there is insufficiency of shipping space.
B. Bill of Lading as Contract
1. Prohibited and Limiting Stipulations
Ysmael v. Barretto - A common carrier cannot lawfully stipulate for exemption from
liability, unless such exemption is just and reasonable and the contract is freely and fairly
made.
Shewaram v. PAL - The carrier cannot limit its liability for injury to or loss of goods
shipped where such injury or loss was caused by its own negligence.
Ong Yiu v. CA - Provisions in the ticket have been held to be a part of the contract
of carriage, and valid and binding upon the passenger regardless of the latters lack of
knowledge or assent to the regulation
Aboitiz v. CA - a stipulation, limiting the common carrier's liability to the value of
the goods appearing in the bill of lading, unless the shipper or owner DECLARES A
GREATER VALUE, is valid.
Sea Land Services v. IAC - There is nothing in the Civil Code, which absolutely
prohibits agreement between shipper, and carrier limiting the latter's liability for loss of
or damage to cargo shipped under contracts of carriage.
The Civil Code in fact has agreements of such character in contemplation in
providing, in its Articles 1749 and 1750, that:

ART. 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.
ART. 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.
Citadel Lines v. CA - That said stipulation is just and reasonable arguable from the
fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater value is
not declared for the shipment in the bill of lading. To hold otherwise would amount to
questioning the justice and fairness of that law itself, and this the private respondent
does not pretend to do
Everett v. CA - A stipulation in the bill of lading limiting the common carriers
liability for loss or destruction of a cargo to a certain sum, unless the shipper or owner
declares a greater value, is sanctioned by law particularly Articles 1749 and 1750 of the
Civil Code.
British Airways v. CA - In a contract of air carriage, a declaration by the passenger
of a higher value is needed to recover a greater amount. Article 22(1) of the Warsaw
Convention, provides as follows: x x x x x x x x x (2) In the transportation of checked
baggage and goods, the liability of the carrier shall be limited to a sum of 250 francs per
kilogram, unless the consignor has made, at the time the packages was handed over to
the carrier, a special declaration of the value at delivery and has paid a supplementary
sum if the case so requires. In that case the carrier will be liable to pay a sum not
exceeding the declared sum, unless he proves that the sum is greater than the actual
value to the consignor at delivery.
An air carrier is not liable for the loss of baggage in an amount in excess of the
limits specified in the tariff which was filed with the proper authorities, such tariff being
binding on the passenger regardless of the passengers lack of knowledge thereof or
assent thereto.
Benefits of limited liability are subject to waiver such as when the air carrier failed
to raise timely objections during the trial when questions and answers regarding the
actual claims and damages sustained by the passenger were asked.
H.E. Heacock v. Macondray - A stipulation limiting the liability of the carrier to an
agreed valuation unless the shipper declares a higher value and pays a higher rate of
freight invalid and enforceable.
Sweet Lines v. Teves - When a Bill of Lading or a passenger ticket contains a
stipulation constituting a contract of adhesion, the court must be vigilant of the right of
the riding public. When the stipulations contained therein are against public policy, the
said stipulations must necessarily be declared null and void. Hence, it shall not be
binding to the public.

i. International Air Transportation

Alitalia v. IAC - The Warsaw Convention's provisions do not "regulate or exclude
liability for other breaches of contract by the carrier" or misconduct of its officers and
employees, or for some particular or exceptional type of damage. Otherwise, "an air
carrier would be exempt from any liability for damages in the event of its absolute
refusal, in bad faith, to comply with a contract of carriage, which is absurd." Nor may it
for a moment be supposed that if a member of the aircraft complement should inflict
some physical injury on a passenger, or maliciously destroy or damage the latter's
property, the Convention might successfully be pleaded as the sole gauge to determine
the carrier's liability to the passenger. Neither may the Convention be invoked to justify
the disregard of some extraordinary sort of damage resulting to a passenger and
preclude recovery therefor beyond the limits set by said Convention. It is in this sense
that the Convention has been applied, or ignored, depending on the peculiar facts
presented by each case.
Pan Am v. IAC - 1. A contract of adhesion is valid -- 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. 2. The common
carrier is held liable only for damages that were foreseen or might have been foreseen at
the time the contract of transportation was entered into.
China Airlines v. Chiok - Carriage to be performed by several successive carriers
under one ticket, or under a ticket and any conjunction ticket issued therewith, is
regarded as a single operation
Santos III v. Northwest - : International transportation" shall mean any
transportation in which, according to the contract made by the parties, the place of
departure and the place of destination, whether or not there be a break in the
transportation or a transshipment, are situated [either] within the territories of two High
Contracting Parties . . . Since the flight involved in the case at bar is international, the
same being from the United States to the Philippines and back to the United States, it is
subject to the provisions of the Warsaw Convention, including Article 28(1), which
enumerates the four places where an action for damages may be brought
United Airlines v. UY - Warsaw Convention intended the two (2)-year limitation
incorporated in Art. 29 as an absolute bar to suit and not to be made subject to the
various tolling provisions of the laws of the forum. It only allows local laws determine
whether an action had been commenced within the two (2)-year period, and within our
jurisdiction an action shall be deemed commenced upon the filing of a complaint.
However, such rule shall not be applied in the instant case because of the delaying
tactics employed by petitioner airline itself.
C. Bill of Lading as Receipt
Saludo v. Ca - Articles 2221 and 2222 of the Civil Code make it clear that nominal
damages are not intended for indemnification of loss suffered but for the vindication or
recognition of a right violated or invaded. They are recoverable where some injury has
been done but the amount of which the evidence fails to show, the assessment of
damages being left to the discretion of the court according to the circumstances of the
case.
V. ACTIONS AND DAMAGES IN CASE OF BREACH

A. Concurrent Causes of Action

Fabre v. CA - It is permissible for the plaintiff to allege in the Complaint alternative
causes of action and join as many parties as may be liable on such causes of action so
long as the plaintiff does not recover twice.
Air France v. Carrascoso A contract to transport passengers is quite different in
kind and degree from any other contractual relation. And this, because of the relation
which an air-carrier sustains with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and advantages it offers. The contract of
air carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees, naturally, could give ground for an action for
damages.
Tiu v. Arriesgado - While the immediate beneficiaries of the standard of
extraordinary diligence are, of course, the passengers, and owners of the cargo carried
by a common carrier, they are not the only persons that the law seeks to benefit. For if
common carriers carefully observed the statutory standard of extraordinary diligence in
respect of their own passengers, they cannot help but simultaneously benefit
pedestrians and the passengers of other vehicles who are equally entitled to the safe
and convenient use of our roads and highways. The law seeks to stop and prevent the
slaughter and maiming of the people (whether passengers or not) on our highways and
buses, the very size and power of which seem to inflame the minds of their drivers.
Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages
in cases of quasi-delicts if the defendant acted with gross negligence...
B. Notice of Claim and Prescriptive Period
1. Overland Transportation of Goods and Coastwise Shipping
Phil Am General Insurance v. Sweet Lines - where the contract of shipment
contains a reasonable requirement of giving notice of loss of or injury to the goods, the
giving of such notice is a condition precedent to the action for loss or injury or the right
to enforce the carrier's liability. Such requirement is not an empty formalism. The
fundamental reason or purpose of such a stipulation is not to relieve the carrier from just
liability, but reasonably to inform it that the shipment has been damaged and that it is
charged with liability therefor, and to give it an opportunity to examine the nature and
extent of the injury. This protects the carrier by affording it an opportunity to make an
investigation of a claim while the matter is fresh and easily investigated so as to
safeguard itself from false and fraudulent claims.
2. COGSA
Dole Phil v. Maritime Co of the Phil - 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 time as possible.
Maritime Agencies v. CA - It is a well-settled principle that the agent shall be liable
for the act or omission of the principal only if the latter is undisclosed.
C. Recoverable Damages
1. Kinds of Damages
i. Actual/Compensatory Damages
Zulueta v. Pan AM

Gatchalian v. Delim - Actual or compensatory damages must be substantiated and

may not be awarded on the basis of speculation or conjecture. Moral damages may be
awarded where gross negligence on the part of the common carrier is shown.
Marchan v. Mendoza - 1. The award of actual/compensatory damages is well within
the discretion of the CA. 2. Exemplary damages may be imposed by way of example or
correction only in addition to compensatory damages, but that they cannot be recovered
as a matter of right.
De Caliston v. CA - Award of pension to deceased accident victim which was lost by
his death, justified.The pension of the decedent being a sure income that was cut short
by her death for which Dalmacio was responsible, the surviving heir of the former is
entitled to the award of P10,000.00 which is just equivalent to the pension the decedent
would have received for one year if she did not die.
ii. Moral Damages
Transworld Airlines v. CA - Such inattention and lack of care for the interest of its
passengers who are entitled to its utmost consideration, particularly as to their
convenience, amount to bad faith which entitles the passenger to the award of moral
damages.
iii. Exemplary Damages
Prudenciado vs. Alliance Transport - Article 2231 of the Civil Code: In quasi-delicts,
exemplary damages may be granted if the defendant acted with grave negligence.
MARITIME LAW
I. GENERAL CONCEPTS
A. Real and Hypothecary Nature
Yangco v. Laserna - Assuming that petitioner is liable for a breach of contract of
carriage, the exclusively "real and hypothecary nature" of maritime law operates to limit
such liability to the value of the vessel, or to the insurance thereon, if any. In the instant
case it does not appear that the vessel was insured. Whether the abandonment of the
vessel sought by the petitioner in the instant case was in accordance with law of not, is
immaterial. The vessel having totally perished, any act of abandonment would be an idle
ceremony.
B. Limited Liability Rule
Chua Yek Hong v. IAC - Under Art. 587 of the Code of Commerce, The ship agent
shall also be civilly liable for the indemnities in favor of third persons which may arise
from the conduct of the captain in the care of the goods which he loaded on the vessel;
but he may exempt himself therefrom by abandoning the vessel with all the equipments
and the freight it may have earned during the voyage. (Doctrine of Limited Liability)
Heirs of Amparo de los Santos v. CA - The limited liability doctrine applies not only
to the goods but also in all cases like death or injury to passengers wherein the
shipowner or agent may properly be held liable for the negligent or illicit acts of the
captain. Article 587 speaks only of situations where the fault or negligence is committed
solely by the captain. In cases where the shipowner is likewise to be blamed, Article 587

does not apply. Such a situation will be covered by the provisions of the New Civil Code
on Common Carriers.
II. VESSELS
Phil Refining Corp v. Jarque - Vessels are considered personal property under the
civil law. The only difference between a chattel mortgage of a vessel and a chattel
mortgage of other personalty is that it is not now necessary for a chattel mortgage of a
vessel to be noted n the registry of the register of deeds, but it is essential that a record
of documents affecting the title to a vessel be entered in the record of the Collector of
Customs at the port of entry.

III. PERSONS WHO TAKE PART IN MARITIME COMMERCE

A. Ship Owners and Ship Agents; Captains and Masters of Vessels; Officers and
Crew, Supercargoes
Chua Yek Hong v. IAC - Under Art. 587 of the Code of Commerce, The ship agent
shall also be civilly liable for the indemnities in favor of third persons which may arise
from the conduct of the captain in the care of the goods which he loaded on the vessel;
but he may exempt himself therefrom by abandoning the vessel with all the equipment
and the freight it may have earned during the voyage. (Doctrine of Limited Liability)
Phil Am General Insurance v. CA - The ship agent is liable for the negligent acts of
the captain in the care of goods loaded on the vessel. This liability however can be
limited through abandonment of the vessel, its equipment and freightage as provided in
Art. 587. Nonetheless, there are exceptional circumstances wherein the ship agent could
still be held answerable despite the abandonment, as where the loss or injury was due to
the fault of the shipowner and the captain.
Sweet Lines v. CA ART. 614. A captain who, having agreed to make a voyage, fails
to fulfill his undertaking, without being prevented by fortuitous event or force majeure,
shall indemnify all the losses which his failure may cause, without prejudice to criminal
penalties which may be proper.
ART. 698. In case of interruption of a voyage already begun, the passengers shall
only be obliged to pay the fare in proportion to the distance covered, without right to
recover damages if the interruption is due to fortuitous event or force majeure, but with
a right to indemnity, if the interruption should have been caused by the captain
exclusively. If the interruption should be caused by the disability of the vessel, and the
passenger should agree to wait for her repairs, he may not be required to pay any
increased fare of passage, but his living expenses during the delay shall be for his own
account.
The crucial factor then is the existence of a fortuitous event or force majeure.
Without it, the right to damages and indemnity exists against a captain who fails to fulfill
his undertaking or where the interruption has been caused by the captain exclusively.
B. Arrastre Operator

Firemans Fund Insurance v. Metro Port Services - The legal relationship between
the consignee and the arrastre operator is akin to that of a depositor and
warehouseman. The relationship between the consignee and the common carrier is
similar to that of the consignee and the arrastre operator. Since it is the duty of the
ARRASTRE to take good care of the goods that are in its custody and to deliver them in
good condition to the consignee, such responsibility also devolves upon the CARRIER.
Both the ARRASTRE and the CARRIER are therefore charged with and obligated to deliver
the goods in good condition to the consignee. To carry out its duties, the ARRASTRE is
required to provide cargo handling equipment which includes among others trailers,
chassis for containers. In some cases, however, the shipping line has its own cargo
handling equipment.
ICTSI v. Prudential - When cargo is placed on a vessel at the shippers load and
count, the arrastre operator is required only to deliver to the consignee the container
van received from the shipper, not to verify or to compare the contents thereof with
those declared by the shipper. A claim for reimbursement for the loss, damage or
misdelivery of goods must be filed within 15 days from the date the consignee learns of
such problem
C. Pilots
Far Eastern v. CA

IV. CHARTER PARTIES (ARTICLES 652-718)

A. Different Kinds of Charter Parties
Litonjua v. NSB

B. Effect of Charter on Character of Carrier

Planters Products v. CA - A public 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, as in the case of a time-charter or voyage-charter. It is only
when the charter includes both the vessel and its crew, as in a bareboat or demise that a
common carrier becomes private, at least insofar as the particular voyage covering the
charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains
possession and control of the ship, although her holds may, for the moment, be the
property of the charterer.
Caltex v. Sulpico Lines

V. COLLISIONS
Williams v. Yatco - Since it does NOT appear from the evidence that the perilous
situation of the launch in time to avoid the accident by the exercise of ordinary care, it is
very clear that the plaintiff cannot escape the legal consequences of the contributory

negligence of his launch, even were we to hold that the doctrine is applicable in this
jurisdiction.
Smith and Bell v. CA - FACTORS CONSTITUTIVE THEREOF WHICH NEGLIGENCE WAS
THE PROXIMATE CAUSE OF THE COLLISION; 3 Principal Factors
National Dev Co v. CA - The laws of the Philippines will apply in case at bar and it is
immaterial whether the collision actually occurred in foreign waters.
Liability of owner and agent of vessel; The agent even though he was not the
owner of the vessel, is liable to the shippers and owners of cargo transported by it, for
losses and damages to the cargo without prejudice to his rights against the owner of the
ship. It is well settled that both the owner and agent of the offending vessel are liable
for the damage done where both are impleaded; that in case of collision, both the owner
and the agent are civilly responsible for the acts of the captain
Mecenas v. CA - "Route observance" of the International Rules of the Road (Rule18)
will not relieve a vessel from responsibility if the collision could have been avoided by
proper care and skill on her part or even by a departure from the rules.
Aboitiz Shipping v. General Accident Fire and Life Insurance Corp

Phil Am General Insurance v. CA - The right of abandonment of vessels, as a legal

limitation of a shipowners liability, does not apply to cases where the injury or average
was occasioned by the shipowners own fault. It must be stressed at this point that Art.
587 speaks only of situations where the fault or negligence is committed solely by the
captain.

VI. SALVAGE
Erlanger v. Swedish East Asiatic - Three elements are necessary to a valid salvage
claim: (1) A marine peril. (2) Service voluntarily rendered when not required as an
existing duty or from a special contract. (3) Success, in whole or in part, or that the
service rendered contributed to such success.
Barrios v. Go Thong - When the ship stranded is not in a perilous condition, the
services rendered by another ship in attaching it in tow is merely towage and not
salvage.
VII. CARRIAGE OF GOODS BY SEA ACT (COGSA)
Elser v. CA - A carrier cannot limit its liability in a manner contrary to what is provided for
in the COGSA.
Ang v. Compania Maritima - In the American Steamship Agencies cases, it was held that
the action of Ang is based on misdelivery of the cargo which should be distinguished
from loss thereof. The one-year period provided for in Section 3 (6) of the Carriage of
Goods by Sea Act refers to loss of the cargo. What is applicable is the four-year period of
prescription for quasi-delicts prescribed in Article 1146 (2) of the Civil Code or ten years
for violation of a written contract as provided for in Article 1144 (1) of the same Code.

Dole Phjl v. Maritime Co

Sea Land v. IAC - Even if Section 4(5) of COGSA did not exist, the validity and
binding effect of the liability limitation clause in the bill of lading here are fully
sustainable on the basis alone of Article 1749 and 1750 of the Civil Code. That said
stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself
in providing a limit to liability only if a greater value is not declared for the shipment in
the bill of lading. To hold otherwise would amount to questioning the justice and fairness
of that law itself.
Maritime Agency v. CA - 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 for damage; either apparent or concealed, is not given as provided
for in this section, that fact shall not effect 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.
Mayer Steel Pipe v. CA - Section 3(6) of the Carriage of Goods by Sea Act states
that the carrier and the ship shall be discharged from all liability for loss or damage to
the goods if no suit is filed within one year after delivery of the goods or the date when
they should have been delivered. Under this provision, only the carriers liability is
extinguished if no suit is brought within one year. But the liability of the insurer is not
extinguished because the insurers liability is based not on the contract of carriage but
on the contract of insurance. A close reading of the law reveals that the Carriage of
Goods by Sea Act governs the relationship between the carrier on the one hand and the
shipper, the consignee and or insurer on the other hand. It defines the obligations of the
carrier under the contract of carriage. It does not, however, affect the relationship
between the shipper and the insurer. The latter case is governed by the Insurance Code.

PUBLIC UTILITIES
I. PUBLIC SERVICE REGULATIONS
Luzon Stevedoring v Public Service Com - Section 13 (b) of the Public Service Law
(Commonwealth Act No. 146) defines public service thus: "The term 'public service'
includes every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes any
common carrier, railroad, street railway, traction railway, subway, motor vehicle, either
for freight or passenger, or both, with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express service, steamboat, or
steamship line, pontines, ferries, and small water craft

San Pablo v. Pantranco - Ferry implies the crossing of open seas, thus the service is
not merely a ferry service but is actually a coastwise shipping which requires the
application of separate CPC.
Manzanal v. Ausejo - The power of the Commission to suspend or revoke any
certificate received under the provisions of the Act may only be exercised whenever the
holder thereof has violated or willfully and contumaciously refused to comply with any
order, rule or regulation of the Commission or any provision of the Act. In the absence of
showing that there is willful and contumacious violation on the part of petitioner, no
certificate of public convenience may be validly revoked.
Cogeo-Cubao Operators and Drivers Association v. CA - Under the Public Service
Law, a certificate of public convenience is an authorization issued by the Public Service
Commission for the operation of public services from which no franchise is required by
law. It is included in the term "property" in the broad sense of term. It can be sold by the
holder thereof because it has considerable market value and is considered a valuable
asset. And although it is considered a private property, it is affected with public interest
and must be submitted to the control of the government for the common good.
KMU Labor Center v. Garcia - An administrative body and in this case, the LTFRB, may
implement broad policies laid down in a statute by "filling in" the details which the Legislature may neither
have time or competence to provide.

Tatad v. Garcia - The right to operate a public utility may exist independently and
separately from the ownership of the facilities thereof. One can own said facilities
without operating them as a public utility, or conversely, one may operate a public utility
without owning the facilities used to serve the public. The devotion of property to serve
the public may be done by the owner or by the person in control thereof who may not
necessarily be the owner thereof.
PAL v. CAB - There is nothing in the law nor in the Constitution, which indicates that
a legislative franchise is an indispensable requirement for an entity to operate as a
domestic air transport operator. Although Section 11 of Article XII recognizes Congress'
control over any franchise, certificate or authority to operate a public utility, it does not
mean Congress has exclusive authority to issue the same.