TRANSPORTATION LAW
Judge Gener M. Gito, Ll. M., DCL
CHAPTER 1:
GENERAL CONSIDERATIONS
Contract of Transportation When a person
obligates himself to transport persons or
property from one place to another for a
consideration.
Contract may involve:
a. Carriage of passengers
b. Carriage of goods
Person who obligates himself to
transport the goods or passenger may
be a:
a. Common carrier; or
b. Private carrier
PARTIES:
The parties to a contract of transportation
would depend on whether it is for carriage
or carriage of goods.
1. CONTRACT OF CARRIAGE OF
PASSENGERS:
a. Common carrier
b. Passenger one who travels in a
public conveyance by virtue of
contract, express or implied, with
the carrier subject to payment of
fare or an equivalent thereof.
CASE: Jesusa Vda. De Nueca v.
The Manila Railroad Company
The passenger is still considered as
such even if he is being carried
gratuitously or under a reduced fare.
o Subject to the rule in Art. 1758 of the
Civil Code that provides that when
passenger is carried gratuitously, a
stipulation limiting the common
carriers liability for negligence is vaiid.
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If a suit was for the breach of the contract
of carriage, the real party-in-interest was
the injured passenger because he is the
contracting party.
CASE: Baliwag Transit Corporation v. Court
of Appeals
There are cases when the party who
contraced with the carrier is not the
passenger. For example when school will
hire the common carriers to provide
transportation for its faculty and students.
These are often covered by written
agreements that bind the school and the
bus service provider.
o Breach of the agreement will
entitle the other party to file an
action against the other.
However, whether or not there
is a written agreement, the
carrier owes a duty of
extraordinay diligence directy
to the passengers.
CASE: Sps. Fabre v. Court of Appeals (1996)
2. CONTRACT OF CARRIAGE OF GOODS
a. Carrier
b. Shipper the person who
delivers the goods to the carrier
for transportation. This is the
person who pays the
consideration or on whose
behalf payment is made.
Consignee the person to whom the goods
are to be delivered. He may also be the
shipper himself as in the case where the
goods will be delivered to one of the
branch offices of the shipper.
o However, he may be a third person
who is not actually a party to the
contract of carriage.
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 TRANSPORTATION LAW
Judge Gener M. Gito, Ll. M., DCL
o When Consignee is bound by Contract
The Supreme Court ruled that the
cosignee is bound by the terms and
conditions of the bill of lading where it
was established that he accepted the
same and is trying to enforce the
agreement.
CASE:
Everett Steamship Corp. v. Court of
Appeals, et al. (1998)
MOF Company, Inc. v. Shin Yang
Brokerage Corporation (2009) citing
Sea-Land Service v. Intermediate
Appellate Court (1987)
Keng Hua Paper Products Co., Inc. V.
Court of Appeals (1998)
Mendoza v. Philippine Air Lines Inc.
(1952)
3. PERFECTION
There are two types of contracts of
carriage of passengers of passenger:
a. Contract to carry an agreement
to carry the passenger at some
future date. This contract is
consensual and is therefore
perfected by mere consent.
b. Contract of carriage or of
common carriage itself should
be considered a real contract for
not until the facilities of the
carrier are actually used can the
carrier be said to have already
assumed the obligation of the
carrier.
CASE: British Airways v. Court of Appeals
(1993)
Perfection of Contract of Carriage of
Goods there may be a consensual
contract to carry goods whereby the
carrier agrees to accept and transport
goods at some future date.
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By the act of delivery of the goods that
is when the contract of carriage is
perfected.
o Delivery when the goods are
unconditionally placed in the
possession and control of the
carrier, and upon their receipt by
the carrier for transportation.
CASE:
Mauro Ganzon v. Court of Appeals
(1988) (Re: Delivery)
Compania Maritima v. Insurance
Company of North America (1964)
Whenever the control and
possession of goods passes to the
carrier and nothing remains to be
done by the shipper, then it can
be said with certainty that the
relation of shipper and carrier has
been established.
The liability of the carrier as
common carrier begins with the
actual delivery of the goods for
transportation, and not merely
with the formal execution of the
receipt or bill of lading, the
issuance of a bill of lading is not
necessary to complete delivery
and acceptance.
In British Airways, Inc. v. The Hon. Court
of Appeals, the Supreme Court ruled
that an action for damages may be
sustained for breach of contract to
carry. A verbal contract to carry is
already a binding consensual contract.
A written contract is not essential/
necessary for the perfection of the
contract of carriage. The Supreme
Court explained that the bill of lading is
not essential to the contract, although
it may become obligatory by reason of
the regulations of railroad companies,
or as a condition imposed in the
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 TRANSPORTATION LAW
Judge Gener M. Gito, Ll. M., DCL
contract by the agreement of the
parties themselves. The Code does not
demand, as a necessary requisite in
the contract of transportation, the
delivery of the bill of lading to the
shipper, but gives right to both the
carrier and the shipper to mutually
demand of each other the delivery of
said bill. (Compania Maritima v.
Insurance Company of North America)
I. AIRCRAFT There is a perfected contract
to carry passengers even if no tickets
have been issued to said passengers so
long as there was already a meeting of
minds with respect to the subject
matter and the consideration.
On the other hand, there is a
perfected contract of carriage
between a passenger and an airline if
it can be established that the
passenger had checked in at the
departure counter, passed through
customs and immigration, boarded
the shuttle bus and proceededto the
ramp of the aircraft and that his
baggage had already been loaded in
the aircraft to be flown with the
passenger to his destination. (Koren
Airlines Co. Ltd. V. Court of Appeals,
1994)
II. BUSES, JEEPNEYS, AND STREET CARS
The Supreme Court explained in
Dangwa Transportation Co. Inc. V. CA
(1991) that once a public utility bus or
jeepney stops, it is in effect making a
continuing offer to bus riders.
What is the continuing offer rule?
It is the duty of the drivers to stop
their conveyances for a reasonable
length of time in order to afford
passengers an opportunity to board
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and enter, and they are liable for
injuries suffered by boarding
passensgers resulting from the
sudden starting up of the carrier.
Liability of the carrier is already
based on contract.
Deemed accepted upon the intention
of the passenger to board the
conveyances.
III. TRAINS For him to be considered as a
passenger, he must be:
1. Bona fide intention to use the
facilities of the carrier.
2. Possess sufficient fare to pay for his
passage; and
3. Present himself to the carrier for
transportation in the place and
manner provided. (Jesusa Vda. De
Nueca, et al. v. The Manila Railroad
Company)
CASE: Light Rail Transit Authority (LRTA), et
al. v. Marjorie Navidad, et al. (2003) Mr.
Navidad fell from the platform while waiting.
Upon assessment he has qualified as a
passenger.
4. COMMON CARRIER
Article 1732. Common carriers are persons,
corporations, firms or associations engaged in
the business of carrying or transporting
passengers or goods or both, by land, water,
or air, for compensation, offering their
services to the public.
It has also been defined as one that
holds itself out as ready to engage in
the transportation of goods for hire as
a public employment and not as a
casual occupation. (De Guzman v. CA
(1988))
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 TRANSPORTATION LAW
Judge Gener M. Gito, Ll. M., DCL
PUBLIC SERVICE the concept of
common carrier under Art. 1732 may
be seen to neatly coincide with the
notion of public service under the
Public Service Act that at least partially
supplements the law on common
carriers set forth in the Civil Code.
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, sub-way
motor vehicle, either for freight or
passenger, or both with or without
fixed route and whether may be its
classification, freight or carrier
service of any class, express service,
steamboat or steamship line,
pontines, ferries, and water craft,
engaged in the transportation of
passengers or freight or both,
shipyard, marine railways, marine
repair shop, [warehouse] wharf or
dock, ice plant, ice-refrigeration
plant, canal, irrigation system, gas,
electric light, heat and power water
supply and power, petroleum,
sewerage system, wire or wireless
communications system, wire or
wireless broadcasting stations and
other similar public services
5. TEST In First Philippine Industrial
Corporation v. CA (1998) the SC reiterated
that the tests for determining whether a
party is a common carrier of goods are:
a. He must be engaged in the
business of carrying goods for
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others as a public employment,
and must hold himself out as ready
to engage in the transportation of
goods for persons generally as a
business and not as a casual
occupation;
b. He must undertake to carry goods
of the kind to which his business is
confined;
c. He must undertake to carry by the
method by which his business is
conducted and over his
established roads; and
d. The transportation must be for
hire.
According to National Steel Corporation v.
CA, the SC reiterated the ruling that the
test of a common carrier is the carriage
of goods or passengers, provided it has
space for all who opt to avail themselves
of its transportation for a fee.
CASE: The United States v. Tan Piaco, et al.
(1920)
Bascos v. CA, the SC explained that the
test to determine a common carrier is
whether the given undertaking is part
of the business engaged in by the
carrier which he has held out to the
general public as his occupation rather
than the quantity or extent of the
business transacted.
Westwind Shipping Corp. v. UCPB
General Insurance Co., Inc. (2013), as
long as a person or corporation holds
itself to the public for the purpose of
transporting goods as a business, it is
already considered a common carrier
regardless of whether it owns the
vehicle to be used or has actually hire
one.
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 TRANSPORTATION LAW
Judge Gener M. Gito, Ll. M., DCL

CASE: Sps. Cruz v. Sun Holidays, Inc. (2010)

Bascos v. Court of Appeals (1993)

TRUE TEST according to the SC in

the case of Sps. Perena v. Sps. Nicolas
(2012), the true test for a common
carrier is not the quantity or extent of
the business actually transacted, or the
number and character of the
conveyances used in the activity, but
whether the undertaking is a part of
the activity engaged in by the carrier
that he has held out to the general
public as hisbusiness or occupation.
o If the undertaking is a single
transaction, not a part of the
general business or occupation
engaged in, he is a private
carrier and not a common
carrier.
o The question must be
determined by the character of
the business actually carried on
by the carrier, not by any secret
intention or mental reservation
it may entertain or assert when
charged with the duties &
obligations that the law
imposes.

CASE: Sps. Perena v. Sps. Nicolas (2012)

6. CHARACTERISTICS

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Use at your own risk. God bless and good luck!