CHAPTER 2 CONTRACT OF COMMON CARRIAGE
without loss/damage to her particular cargo.
EXTRAORDINARY DILIGENCE REQUIRED FOR
COMMON CARRIERS
(ART. 1733)
A. VIGILANCE OVER GOODS
ART. 1733 Common carriers, form 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 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.
Extraordinary diligence rendition of service with the greatest skill and
utmost foresight
Extraordinary diligence in the carriage of GOODS requires the
common carrier to know and to follow that required precaution for avoiding
damage to, or destruction of the goods entrusted to it for sale, carriage
and delivery. It requires common carriers to render service with the
greatest skill and foresight and to use all reasonable means to ascertain
the nature and characteristic of goods tendered for shipment, and to
exercise due care in the handling and stowage, including such methods as
their nature requires.
Extraordinary diligence in the carriage of PASSENGERS common
carriers are bound 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 circumstances (Art. 1755)
Doctrine of Non-delegable Duty - An obligation that cannot be
outsourced to a third party according to the terms of the contract. In the
event that it is delegated, the second party reserves the right to reject the
performance of the obligation.
- Extraordinary diligence is owed not only to the passengers/owners of
rd
cargo carried by a common carrier but also 3 persons. In the exercise of
such diligence, the CC cant help but simultaneously benefit pedestrians
and the owners and passengers of other vehicles who are equally entitled
to safe and convenient use of roads and highways.
Republic vs. Lorenzo Shipping Corporation
FACTS: Republic of the Philippines, through the DOH and Cooperative for
American Relief Everywhere, Inc. (CARE) agreed to acquire from US
government donations of non-fat dried milk and other food products
and Philippines would transport and distribute the donated commodities to
the intended beneficiaries of the country.
Government entered into a contract of carriage of goods with NTFC
(National Trucking and Forwarding Corporation). For every delivery, they
delivery checkers requested the consignee to surrender original bills of
lading but he just presented certified true copies. They would also ask the
consignee to sign the receipts but would sometimes instruct his
subordinates to do it.
NTFC filed a formal claim for non-delivery of the goods shipped through
respondent.
HELD: SC rules in favor of the respondent. Respondent adequately
proved that it exercised extraordinary diligence. Although the original bills
of lading remained with petitioner, respondents agents demanded from
Abdurahman the certified true copies of the bills of lading. They also
asked the latter and in his absence, his designated subordinates, to sign
the cargo delivery receipts.
CARRIAGE BY SEA
Extraordinary diligence in the CARRIAGE BY SEA
Seaworthiness
- Is that strength, durability and engineering skill made a part of a
ships construction and continued maintenance, together with a
competent and sufficient crew, which would withstand the
vicissitudes and dangers of the elements which might
reasonably be expected or encountered during her voyage
- First step in complying with the duty to exercise extraordinary
diligence
- It must be adequately equipped for the voyage and manned with
a sufficient number of competent officers and crew.
Standard Vaccuum Oil Company vs. Luzon Stevedoring
Company.
FACTS: Standard Vacuum Oil Company entered into a contract
with Luzon Stevedoring Co. Inc to transport between the ports of
Manila and Iloilo, barrels of bulk gasoline belonging to the
former. The gasoline was delivered in accordance with the
contract but Luzon Stevedoring failed to transport it to its place
of destination. The tugboat towing the barge which was laden
with gasoline, stalled due to a broken idler. Barges that tied to
it broke off due to the rough condition of the sea during the
afternoon. The barge was badly damaged that the gasoline
leaked out. Respondent pleaded that the failure to deliver was
due to a fortuitous event/caused by circumstances beyond its
control and not its to its fault/negligence.
HELD:
Pari Materia Latin: Of the same matter; on the same subject
- used in connection with two laws relating to the same subject
matter that must be analyzed with each other.
RELATED STATUTES:
1) Carriage of Goods by Sea Act (COGSA)
Responsibilities and Liabilities
SEC. 3. (1) The carrier shall be bound, before and at the
beginning of the voyage, to exercise due diligence to
(a) Make the ship seaworthy;
(b) Properly man, equip, and supply
the ship;
2) Insurance Code
SEC. 116. A ship is seaworthy when reasonably fit to perform
the service and to encounter the ordinary perils of the voyage
contemplated by the parties to the policy.
SEC. 119. Where different portions of the voyage
contemplated by a policy differ in respect to the things
requisite to make the ship seaworthy therefor, a warranty of
seaworthiness is complied with if, at the commencement of
each portion, the ship is seaworthy with reference to that
portion.
When should a ship be seaworthy?
According to sec. 3 of COGSA, The carrier is bound BEFORE and
AT THE BEFINNING of the voyage to make the ship seaworthy.
Common Law Doctrine of Stages - It requires that the ship must be
fit to receive her cargo at the commencement of loading only as a
ship for the ordinary perils of lying afloat in harbour and need not be
fit for sailing. Then on the completion of each stage she must have
the degree of fitness which is required for the next stage.
Domestic Shipping Act (RA 9295)
Sec. 9 Safety standards All vessels operate by domestic
ship operators shall at all times be in seaworthy condition
properly equipped with adequate life-saving, communication,
safety and other equipment operated and maintained in
accordance with the standards set by MARINA, and manned by
duly licensed and competent vessel crew
The MARINA shall have the power to inspect vessels
and all equipment on board to ensure compliance with safety
standards.
Does presumption of Fault Translate to Presumption of
unseaworthiness?
Burden of proof: CARRIER.
Where the vessel is found unseaworthy, the shipowner is
presumed NEGLIGENT because he is tasked with the
maintenance of the ship.
GR: because of implied warranty of seaworthiness, shippers are
NOT expected to inquire into the vessels seaworthiness.
Passengers CANT be expected to inquire every time they board
a common carrier, whether the carrier posseses the necessary
papers or that all the carriers employees are qualified.
 Cargoworthiness The vessel must be sufficiently strong and
equipped to carry the particular kind of cargo which she has
contracted to carry and her cargo must be so loaded that it is safe for
her to proceed to voyage
Sufficient freeboard height from the water line to the main deck
- improves the ships behavior
Plimsoll Line line where the hull of a ship meets the surface of the
water
- indicates the limit until which ships can be loaded with enough
cargo
- Crossing the assigned limit of the Plimsoll mark or the waterline
is considered violation of an international shipping act and can
even land the ships crew, including the Captain, in deep
trouble.
Warranty Against Improper Deviation
Art. 359. If there is an agreement between the shipper and the
carrier as to the road over which the conveyance is to be made,
the carrier may not change the route, unless it be by reason of
force majeure; and should he do so without this cause, he shall
be liable for al the losses which the goods he transports may
suffer from any other cause, beside paying the sum which may
have been stipulated for such case.
When on account of said cause of force majeure, the carrier
had to take another route which produced an increase in
transportation charges, he shall be reimbursed for such increase
upon formal proof thereof.
** Routes of CCs are approved by government agencies. i.e.
with respect to carriers by sea, approval by Maritime Industry
Authority cant be changed without authorization from said
administrative agency
** Improper deviation may be a valid ground to deny maritime
insurance
** Transshipment the act of taking cargo out of one ship and loading it
in another; the transfer of goods from the vessel stipulated in the contract
of affreightment to another vessel before the place of destination named in
the contract has been reached.
Survey/Inspection of cargo on Reasonable Grounds carried out by
administration/duly authorized inspectors
- A CC is entitled to fair representation of the nature and value of
the goods to be carried and has NO obligation to inquire into the
correctness/sufficiency of such information
- Duty to inspect arises if there should be reason to doubt the
veracity of such representations.
- To be subject to unusual search there must exist proof that
would justify cause for apprehension that the baggage is
DANGEROUS/ refusal to accept
CARRIAGE BY LAND
** CC by land are required to make sure that the vehicles that they are
using are in good order and condition
Roadworthiness ability of a car/bus/truck/automobile to be in suitable
operating condition
Railworthiness ability of a locomotive, passenger car, freight car, or any
kind of railway vehicle to be in proper operating condition
Motor Vehicle Must be in Good Condition
- CCs that offer transportation by land are similarly required to
make sure that vehicles that they are using are in good order
and condition
- Explosion of tires (mechanical defects) are not considered FE.
Warranty Against Defective Vehicle Parts
- Duty to exercise extraordinary diligence requires the carrier to
purchase and use vehicle parts that are not defective.
Compliance with Traffic Regulation
- Carrier fails to exercise EO diligence if it WIILL NOT comply with basic
traffic rules. (Art. 2185)
Prohibition Against Improper Deviation
- (Art. 359, Code of commerce)
Inspection of Cargo on Reasonable Grounds
- The duty of the carrier to conduct an inspection depends on the
circumstances
- Nocum v. Laguna Tayabas Bus Company
Petitioner was injured because a box of firecrackers exploded
loaded in the bus. It was declared as containing clothes and
miscellaneous items.
HELD: It is presumed that a passenger will not take with him
anything dangerous to the lives and limbs of his co-passengers.
Passenger has right to privacy and cant be subjected to
unusual search when he protests the innocousness of his
baggage and nothing appears to indicate the contrary. In the
absence of any evidence that the carrier was aware of the
nature of the article or had any reason to anticipate danger,
fires/explosions caused by articles brought into its conveyances
by other passengers does NOT render a carrier LIABLE for
injuries sustained.
Airworthiness
- an aircraft, its engines, propellers, and other components and
accessories, are of proper design and construction, and are safe
for air navigation purposes, such design and construction being
consistent with accepted engineering practice and in
accordance with aerodynamic laws and aircraft science. (Sec.
3(z), Civil Aviation Authority Act of 2008, REPUBLIC ACT
NO. 9497 [2008])
Competence and Fitness of Crew
Warranty Against Improper deviation
Duty to Inspect Cargo and Baggage
- Section 8. Aircraft companies which operate as public utilities or
operators of aircraft which are for hire are authorized to open
and investigate suspicious packages and cargoes in the
presence of the owner or shipper, or his authorized
representatives if present; in order to help the authorities in the
enforcement of the provisions of this Act: Provided, That if the
owner, shipper or his representative refuses to have the same
opened and inspected, the airline or air carrier is authorized to
refuse the loading thereof. (RA 6235)
Safe Carriage of DG
Duty to Discharge/Destroy DG
CARRIAGE BY DANGEROUS GOODS
Acceptance, Shipping and Handling of DG
Duty to Secure DG from Unauthorized Access
Proper training in Handling DG
Survey/Inspection of Cargo to Enforce Compliance
with IMDG (International Maritime Dangerous Goods Code) and Other
Regulations
Presumption of Negligence
Common Carrier Defenses; Exclusive?
LIABILITY OF CARRIERS FOR LOSS, DESTRUCTION AND
DETERIORATION OF GOODS
(ARTS. 1734-1735; 1739-1743)
Acts of God
- Art. 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: (F-E-S-C-O)
1. Flood, storm, earthquake, lightning, or other natural
disaster or calamity;
2. Act of public enemy in war, whether international/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 containers;
5. Order or act of competent public authority.
2013 Heavy Weather Guidelines
- applies to all vessels operating within the territorial
jurisdiction of the Republic of the Philippines except tugboats
purposely used in assisting vessels in docking or undocking to
or from berthing piers or wharves, government-operated vessels
and commercial vessels called upon by the PCG to assist in a
specific search and rescue operation.
- Policies:
a. No vessel of any type or tonnage shall be allowed to
sail except to take shelter, as the situation may
warrant, when Public Strom Warning Signal (PSWS)
Number 1 or higher is hoisted within its point of origin,
the intended route, and point of destination. All
vessels that are already underway shall seek shelter
when any PSWS is hoisted in its immediate vicinity,
along its route, and point of destination. It is the
responsibility the ship owner/ operator and Master or
Patron of the vessel on how to seek shelter and
ensure
CARRIAGE BY AIR the
safety
of the ship Vessels are allowed to leave port only to
take shelter and shall depart without passengers
and/or cargo onboard.
b. Due to the distinct geographical characteristics of
certain areas in the country, effects of any particular
typhoon signal may vary from one place to another
whenever PSWS Number 1 is hoisted or declared by
PAGASA. Vessels and motorboats engaged in Short
Distance Voyages as defined under paragraph V (M)
within Special Areas as enumerated under
paragraph V (N) may sail when PSWS Nr. 1 is hoisted
within its point of origin or route or point of destination
only when all the following conditions are strictly
satisfied:
1. Voyage shall only be from sunrise to sunset, the
ship must arrived at the point of destination 30
minutes before sunset;
2. Sea condition is calm to gentle breeze with the
prevailing wind speed in the area is not more
than 30 kph or 16 knots based on PAGASA or
other reputable sources;
3. Rain showers in the point of origin, route or
destination should be light rains with the rate of
fall is from trace to 2.5 mm per hour;
4. There is good visibility. The route and area of
destination is seen by the naked eye from the
point of origin;
5. Duly licensed passenger vessels or motorboats
shall only carry passengers not exceeding 50%
of its authorized passenger capacity as per
MARINA issued Passenger Ship Safety
Certificate (PSSC);
6. For passenger boats with open decks,
passengers including children and crew shall
wear lifejackets prior to the departure of vessel
or motorboat and until disembarkation at the
point of destination;
7. Masters and Boats Captains shall ensure that
maximum precautionary measures shall be
observed in ensuring the proper lashing and
stowage of cargoes loaded onboard the vessel
or motorboat prior departure;
8. There shall be a designated look-out and
standby Emergency Boat provided by any of the
Local Government Unit(s) or Shipping Company
or Motorboat Association in the origin and/or
destination in case assistance will be needed;
and
9. There shall be a reliable communication link
between vessels and motorboats and the
designated standby Emergency Boat and the
PCG.
Acts of Public Enemy
- Art. 1739 In order that the common carrier may be exempted
from responsibility, the natural disaster must have ben 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 goods. The same duty is incumbent upon the common carrier
in case of an act of public enemy referred to in Art. 1734(2).
Existence of War; Prize Cases
- War may either be international/civil, foreign or domestic and when ever
an armed contest assumes such proportions, the combatants therein
come within the legal comprehension of the term public enemy.
Piracy
- Any attack upon or seizure of any vessel, or the taking away of
the whole or part thereof or its cargo, equipment, or the personal
belongings of its complement or passengers, irrespective of the
value thereof, by means of violence against or intimidation of
persons or force upon things, committed by any person,
including a passenger or member of the complement of said
vessel, in Philippine waters, shall be considered as piracy. The
offenders shall be considered as pirates and punished as
hereinafter provided. (PD 532)
- Pirates on the high seas are considered the enemies of ALL
civilized nations.
Rebels as Public Enemy
- The generally accepted definition of a public enemy does not
embrace rebels in insurrection against their own government.
- EXCEPT in Civil War:
1. When the parties in rebellion occupy and hold in a hostile
manner a certain portion of territory,
2. when they have declared their independence,
3. cast off their allegiance, and
4. When they have in the field a regularly organized force in
armed hostility to the government, and
5. The authority of the latter is for the time overthrown,
Shipper or Owners Fault
Art. 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.
Who are Considered Shipper and/or Owner?
Ship agent (may be shipowner; not a civil agent):
1. Entrusted with provisioning vessel.
2. Represents vessel in port where she is (Art. 586).
3. Represents shipowner in judicial/extrajudicial acts (Art. 595)
Sole and Proximate vs. Contributory Only
- The disaster must have been the proximate and only cause of
the loss. (Art. 1739)
Inherent Vice - loss stemming from qualities inherent in the thing lost
Belgian Overseas Chartering & Shipping N.V. vs. Philippine First
Insurance Co.
FACTS: Petitioners tried to escape liability by contending that they are
exempted from liability under Art. 1734(4) of the Civil Code. They cite the
notation metal envelopes rust stained and slightly dented printed on the
Bill of Lading as evidence that the character of the goods or defect in the
packing or the containers was the proximate cause fo the damage.
HELD: Petitioners have NOT successfully proven the application of any of
the aforecited exceptions in the present case.
Defects in the Packing or in the Container
Philippine Charter Insurance Corporation vs. Unknown Owner of the
Vessel M/V National Honor
FACTS: As the crate containing the goods was being hoisted from the
vessels hatch, the mid-portion of the wooden flooring suddenly snapped
in the air, about 5 ft. high from the vessels deck sending all its contents
crashing down resulting in extensive damage to the shipment. It was
established that the breakage and collapse of the crate was solely due to
the inherent defect and weakness of the materials used in the fabrication
of the crate.
HELD: Carrier is NOT liable. Since the crates were sealed, the carrier
could not have known that the crate was defective. The court also noted
the statement in the Bill of Lading that the shipment was in apparent good
condition. Such statement will create a prima facie presumption only as to
the external condition and not to that open inspection.
Acts of Public Authority
Art. 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
Ganzon vs. CA
FACTS: Gelacio Tumambing contracted the services of Mauro Ganzon to
haul 305 tons of scrap iron from Mariveles, Bataan to port of Manila. When
about half of the scrap iron was loaded, Mayor Jose Advincula arrived and
demanded P 5,000. Gelacio resisted the shakedown and after a heated
argument between them, Mayor dres his gun and fired at Gelacio. Loading
resumed but acting mayor Basilio ordered to dump the scrap iron.
HELD: Petitioner carrier was not excused from liability because SC did not
consider the order of an acting mayor as valid order of a public authority.
In other words, SC requires that the public authority who issued the order
must be duly authorized to issue the order as provided for in Art. 1743.
Extraordinary Diligence
Fortuitous Events
Casus Foruitos Nemo Prestat; Impossibilum Nulla Obligatio Est
Partial Defense: Shipper/Consignees Contributory Fault or
Negligence
COMMENCEMENT DURATION AND TERMINATION OF
CARRIERS RESPONSIBILITY OVER THE GOODS
(ART. 1736-1738)
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.
Art. 1737 The common carriers duty observe extraordinary diligence in
the vigilance 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.
Art. 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.
Unconditionally Placed in the Possession of and Received by the
Carrier
Bill of Lading as Evidence of Delivery to the Carrier
Temporary Unloading and Storage in Transit
Effect of Stoppage in Transitu
Actual of Constructive Delivery
To the Consignee
To the Person who has Right to Receive Cargo
Custody over Cargo During Unloading
Duty to Ship vs. Duty to Transship
STIPULATIONS LIMITING CARRIERS LIABILITY
Art. 1744 A stipulation between the common carrier and the shipper or
owner limiting the liability of the former the loss, destruction, or
deterioration of the goods to a degree less than extraordinary diligence
shall be valid, provided it be:
1. In writing, signed by the shipper/owner
2. Supported by a valuable consideration other than the service
rendered by the common carrier and
3. Reasonable, just and not contrary to public policy
Art. 1745 Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to 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;
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
omissions of his or its employees
6. That the common carriers 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. 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 carriage.
Art. 1746 An agreement limiting the common carriers 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.
Art. 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 carriers liability cannot be availed of in case
of the loss, destruction, or deterioration of the goods.
Art. 1748 An agreement limiting the common carriers liability for delay on
account of strikes or riots is valid.
Minimum Degree of Diligence Required
Void Stipulations
Limitation on the Amount of Liability
Ad Valorem B/L
PASSENGERS BAGGAGES
(ART. 1754)
Art. 1754 The provisions of Articles 1733 to 1753 shall apply to the
passengers baggage which is not in his personal custody or in that of his
employees. As to other baggage, the rules in Articles 1998 and 2000 to
2003 concerning the responsibility of hotel-keepers shall be applicable.
Checked-in vs. Hand-carried Baggages