Contract of transportation – when a person obligates himself to transport persons or property from

one place to another for a consideration. The contract may involve carriage of passengers or carriage of
goods. The person who obligates himself to transport the goods or passengers may be a common carrier
or a private carrier.
Who are the parties? It depends on whether it is for carriage of passengers or carriage of goods.
- The parties in a contract of carriage of passengers are the common carrier and the passenger.
Passenger – is defined as 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.
> gratuitous or reduced fare – A passenger is still considered as such even if he is being carried
gratuitously or under a reduced fare. Article 1758 of the Civil Code provides that when a passenger is
carried gratuitously, a stipulation limiting the common carrier’s liability for negligence is valid.

CARRIAGE OF GOODS
Who are the parties? The shipper and the carrier when the contract is for carriage of goods.
Shipper – is the person who delivers the goods to the carrier for transportation. Also, he is the person
who pays the consideration or on whose behalf payment is made.
Consignee – is the person to whom the goods are to be delivered. The consignee may either be the
shipper himself or a third person who is not actually a party to the contract of carriage.
When consignee is bound by the contract? Consignee 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.
When a consignee becomes a party to the contract by reason of either (a)the relationship of agency
between the consignee and the shipper/consignor; (b) the unequivocal acceptance of the bill of lading
delivered to the consignee, with full knowledge of its contents; (c) availment of the stipulation pour
autri, I e , when the consignee’s favor, specifically the delivery of the goods/cargoes shipped.

TWO TYPES OF CONTRACTS OF CARRIAGE

1. Contract to carry – an agreement to carry the passenger at some future date. This contract is
consensual and is therefore perfected by mere consent.
2. Contract of carriage or of common carriage itself – considered 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.
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.
However, by the act of delivery of the goods, that is, when the goods are unconditionally placed in the
possession and control of the carrier, and upon their receipt by the carrier for transportation, the
contract of carriage is perfected. The LIABILITY and RESPONSIBILITY of the carrier under a
contract for the carriage of goods commence on their actual delivery to, or receipt by, the carrier or an
authorized agent.
Whenever the control and possession of the goods passes to the carrier and nothing remains to be done
by the shipper and carrier has been established.

CARRIAGE OF PASSENGERS – British Airways, Inc. v. CA, The SC ruled that an action for
damages may be sustained for breach of contract to carry. Even if no tickets were issued, verbal
contracts to carry is already a binding consensual contract.
> Written contract not essential – The presence of a ticket or a bill of lading or any written contract is
not necessary for the perfection of the contract of carriage. Nevertheless, the bill of lading is juridically
a documentary proof of the stipulations and conditions agreed upon by both parties.
AIRCRAFT – There is perfected contract to carry passengers even if not tickets have been issued to
said passengers so long as there was already a meeting of the minds with respect to the subject matter
and the consideration.
BUSES, JEEPNEYS, AND STREET CARS – Once a public utility bus (or jeepney) stops, it is in effect
making a continuing offer to bus riders. Under this 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 and enter, and they are liable for injuries suffered by boarding passengers from a sudden starting
up of the carrier.
TRAINS – a person who wants to board a railway station must purchase a ticket and must present
himself at the proper place and in a proper manner for transportation. Such person must have a bona
fide intention to use the facilities of the carrier, posses sufficient fare with which to pay for his passage,
and present himself to the carrier for transportation in the place and manner provided. If he does not do
so, he will not be considered a passenger.

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.

First Philippine Industrial Corp vs. CA. Supreme Court reiterated that the tests for determining whether
a party is a common carrier of goods are:
(1) He must be engaged in the business of carrying goods for others as a public employment, and must
hold himself out as ready to engage in the transportation of goods for person generally as a business
and not as a casual occupation;
(2) He must undertake to carry goods of the kinds which his business is confined;
(3) He must undertake to carry by the method by which his business is conducted and over his
established roads; and
(4) The transportation must be for hire.

NOTE: The test of a common carrier is the carriage of goods of passengers, provided it has space for
all who opt to avail themselves of its transportation for a fee.

(TRUE TEST) Sps. Perena vs. Sps. Nicolas - “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 his business or occupation. If the
undertaking is a single transaction, not a part of the general business or occupation engaged in, as
advertised and held out to the general public, the individual or the entity rendering such service is a
private, not a common, carrier.”

Public use – means the same as “use by the public”. The essential feature of the public use is that it not
confined to privileged individuals, but is open to the indefinite public. It is this indefinite or
unrestricted quality that gives it its public character.
CHARACTERISTICS OF COMMON CARRIERS
(1) Article 1732 makes no distinction between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only as an ancillary activity
(2) Also carefully avoids making any distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such service on an occasional, episodic, or
unscheduled basis.
(3) does not distinguish between a carrier offering its services to the “general public” i.e., the general
community or population, and one who offers services or solicits business only from a narrow segment
of the general population;
(4) A person or entity is a common carrier and has the obligations of the common carrier under the
Civil Code even if he did not secure a Certificate of Public Convenience.
(5)The Civil Code makes no distinction as to the means of transporting, as long as it is by land, water
or air.
(6) The Civil Code does not provide that the transportation should be by motor vehicle
(7) A person or entity may be a common carrier even if he has no fixed and publicly known route,
maintains no terminals, and issues no tickets.
(8) A person or entity need not be engaged in the business of public transportation for the provisions of
the Civil Code on common carriers to apply to them.