Transportation Law

Recoverable Damages in Case of Death of Passenger

1. Actual damage (death compensation of P75,000); 2. Compensatory damages, if proven by heirs; 3. Moral damages commensurate with the mental anguish of heirs; 4. Exemplary damages if the driver acted in a wanton, fraudulent, reckless, oppressive or malevolent manner; 5. Attorney's fees.

What are the Two Types of Charter Parties?

1. Contract of Affreightnent; 2. Charter by Demise or Bareboat.

What is Transportation?

A contract of transportation is a contract whereby a person, natural or juridical, obligates himself to transport persons or goods, or both, from one place to another, by land, water or air, for a price or compensation.

La Mallorca vs. CA

All persons who remain on the premises within a reasonable time after leaving the conveyance are deemed passengers, and this includes reasonable time to look after his baggage and prepare for his departure. For instance, a person, who, after alighting from a train, walks along the station platform is considered still a passenger. The relation of the carrier and passenger does not cease at the moment the passenger alights from the carrier's vehicle at his place of destination. The relation continues until the passenger has had a reasonable time or opportunity to leave the carrier's premises.

Fortuitous Event

An event which takes place by ACCIDENT and could not have been foreseen. GR: No person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. XPN: 1. In cases expressly specified by law; 2. When it is otherwise declared by stipulation; 3. When the nature of the obligation requires the assumption of risk (Art. 1174).

Distinguish Collision vs. Allision

Collision is the impact between two vessels in motion. Allision is the impact between one moving vessel and a stationary one.

Diligence Required of Common Carriers for Transport of Goods

Common carriers 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 (Art. 1733)

Common Carrier's Liability for Death or Injuries to Passengers thru the Negligence or Willful Acts of its Employees

Common carriers are liable for death of or injuries to passengers thru the negligence or willful acts of its employees even if the latter acted beyond the scope of their authority or in violation of the orders of the common carrier. This liability does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees (Art. 1759) Such liability cannot be limited by stipulation or otherwise.

Common Carrier's Liability for Death or Injuries to Passengers thru the Negligence or Willful Acts of Other Passengers or Strangers?

Common carriers are responsible for death or injuries of passengers thru the negligence or willful acts of other passengers or of strangers, if its employees thru the exercise of diligence of a good father of a family could have prevented or stopped the act or omission (Art. 1763)

Defenses Available for Common Carriers

Common carriers are responsible for the loss, destruction or deterioration of goods, unless it is due to any of the following causes (PONCES): 1. Natural disaster or calamity (fire not included) 2. Acts of Public enemy in war; 3. Acts or omission of the Shipper or owner of goods; 4. Character of goods or defects in the packing or in the containers; 5. Order or act of the competent public authority; 6. Exercise of extraordinary diligence. Note: The above enumeration is exclusive. If not one of the those enumerated is present, the carrier is liable.

Strict Liability on Common Carriers

Courts need not make an express finding of fault or negligence of common carriers. The law imposes to common carriers STRICT LIABILITY, as long as it is shown that: 1. There exists a contract between the passenger and the common carrier; and 2. Loss, deterioration, injury or death took place during the existence of the contract (Art. 1735 and 1756).

Due Diligence to Prevent or Lessen the Loss

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 (Art. 1742).

May Moral Damages be Recovered in Breach of Contract of Carriage?

General Rule: Moral damages are not recoverable in actions for damages predicated on breach of contract. Exceptions: 1. When the passenger DIED; 2. When the passenger suffered physical injuries, provided the common carrier acted FRAUDULENTLY or in BAD FAITH. Note: Moral damages include moral suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, or similar injury.

Concurrence of Negligence of Common Carrier with Another Vehicle (3rd Person)

If the negligence of 3rd persons concur with the breach (as in the case where the passenger was injured because the carrier collided with another vehicle), the liability of 3rd person who was driving the vehicle and/or his employer may be based on QUASI-DELICT. The driver (third person) alone may be held criminally liable and civil liability may be imposed on him based on DELICT. In the latter case, the employer is subsidiarily liable.

Contributory Negligence

If the plaintiff's negligence was only contributory, the immediate and proximate cause of the injury being the defendants lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. Note: When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages (Art. 2179).

Private Carrier

If the undertaking is an isolated transaction, not a part of the business or occupation, and the carrier does not hold itself out to carry the goods for the general public or to a limited clientele, although involving the carriage of goods for a fee, that person or corporation providing such service is a private carrier (PhilAm Gen. Insurance vs. PKS Shipping Co)

Breach of Contract of Carriage

In an action for breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that is necessary to prove is: 1. The existence of the contract; and 2. The fact of its non-performance by the carrier in order to be awarded compensatory and actual damages.

Pilapil vs. CA

In this case, the carrier was not made liable for its failure to install window grills on its buses to protect passengers from injuries caused by rocks hurled at the bus by lawless elements.

What is Particular Average?

Includes all damages and expenses caused to the vessel or cargo which have not inured to the common benefit, and borne by their respective owners. The owner of the goods that gave rise to the expenses or suffered the damages shall bear the particular averages.

Diligence of a Good Father of Family

It connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation. Test: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation. If not, he is guilty of negligence (Crisostomo vs. CA).

What is a Charter Party?

It is a contract by which the shipowner or ship agent leases for a certain price the whole or a portion of the vessel for the transportation of goods or persons from one port to another.

What is Maritime Law?

It is the system of laws which particularly relates to the affairs and business of the sea, to ships, their crews and navigation, and to marine conveyance of persons and property.

What is Protest?

It is the written statement by the master of vessel or any authorized officer, attested by proper officer or a notary, to the effect that damages has been suffered by the ship.

Duration of Liability of Common Carriers as to Passengers; When it Terminates

It terminates when the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or has had a reasonable opportunity to leave the carrier's premises, which includes the time to look for his baggage and claim them at the arrival area.

Requisites of a Common Carrier

PBL-FP 1. Must be a Person, corporation, firm or association; 2. Engaged in the Business of carrying or transporting passengers or goods or both; 3. Carriage or transport must either be by Land, water or air; 4. Service is for a Fee; 5. Service is offered to the Public (Art. 1732)

What are Common Carriers?

Persons, corporations, firms or associations engaged in the business of carrying and transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public (Art. 1732, NCC). In jurisprudence, a common carrier is 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. A carrier is a common carrier if its offers its services to the general public for a fee, with or without its possessing a certificate of public convenience.

Southern Lines vs. CA

The carrier, knowing the fact of improper packing of the goods upon ordinary observation, still accepts the goods notwithstanding such condition, is not relieved of liability or loss or injury resulting therefrom.

What is the Diligence Required of Common Carriers?

The diligence required of common carriers is extraordinary (Art. 1733). The law requires common carriers to render service with greatest skill and utmost foresight (Loadmasters Services vs. Glodel Brokerage). Note: The defense of due diligence in the selection supervision of an employee is NOT available to a common carrier.

QUERY: Under what circumstances is the carrier liable for the losses and deteriorations suffered by the goods transported by reason of fortuitous event, force majeure or the inherent nature and defect of goods?

The fortuitous event may not excuse the carrier from liability if it is shown that: 1. It was not the proximate and only cause of the loss; 2. It is shown that the carrier did not exercise due diligence to prevent or minimize loss before, during and after the occurrence of the fortuitous event; or 3. It was already delayed when the fortuitous event occurred.

Is the Defense of Exercising the Diligence of a Good Father of a Family in the Selection and Supervision of Employees Available to a Common Carrier?

YES, in quasi-delict or culpa aquiliana cases. Such defense, however, is not available to the common carrier in breach of contract of carriage or culpa contractual cases.

Are Common Carriers Liable for Injuries to Passengers even if they have Observed Ordinary Diligence and Care?

YES. The carrier is still liable for injuries to passengers even if it observed ordinary diligence and care in their carriage. The Civil Code requires common carriers to employ extraordinary diligence in the carriage of passengers.

Cause of action of a passenger against the common carrier? Against the driver?

1. Against the common carrier - culpa contractual; 2. Against the driver, either: a) culpa delictual; or b) culpa aquiliana.

Owner Pro Hac Vice

A charterer, despite that somebody else is the true owner of the vessel, is treated as the owner of the chartered vessel just for that one particular purpose only. This situation exists in demise or bareboat charter.

What is the Jason Clause?

A shipowner, provided he had exercised due diligence to make the ship seaworthy, could claim a general average contribution from cargo, even where the damage was caused by faulty navigation of the vessel, provided that the bill of lading excluded liability for such faults.

Caltex vs. CA

Article 1732 makes no distinction between: 1. One whose principal business activity is the carrying of persons or goods or both, and one carrying only as an ancillary activity; 2. A person or enterprise offering transport service on a regular or scheduled basis and one offering on an occasional or unscheduled basis; 3. A carrier offering its services to the general public and one who offers only from a narrow segment of the general population.

Diligence Required of Common Carriers for Carrying 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 the circumstances (Art. 1755).

Presumption of Negligence in Common Carriers

In case of loss of effects of passengers or death or injuries to passengers, common carriers are PRESUMED to be at fault or have acted negligently, unless it can prove the exercise of extraordinary diligence in the vigilance thereof.

What are Supercargoes?

It is a person who discharges administrative duties assigned to him by ship agent or shipkeepers, keeping an account or record of transaction as required in the accounting book of the captain.

Is Hijacking Considered a Fortuitous Event?

NO. Hijacking on land is not a fortuitous event. It does not fall among the 5 categories of exempting causes. The carrier is presumed to be at fault or to have acted negligently, unless: 1. Proof is presented by the carrier that the hijackers acted with irresistible force, threat or violence (De Guzman vs. CA); or 2. There is a proof of extraordinary diligence on the part of the common carrier.

Can the Parties Stipulate to Reduce Diligence Required or Limiting Liability on the Common Carrier?

Parties cannot stipulate so as to totally exempt the carrier or stipulate that it can exercise diligence less than the diligence of a good father of a family. But a stipulation that the common carrier can exercise diligence less than extraordinary diligence is VALID, provided that: 1. It is in writing, signed by both parties; 2. Supported by a valuable consideration other than the service rendered by the common carrier; 3. Reasonable, just and not contrary to law or public policy (Art. 1744).

What is the Rule as to Stolen Vehicles in Relation to the Registered Owner Rule?

The registered owner is NOT liable if the vehicle was taken from his garage without his knowledge and consent for it would be absurd to hold him liable for an accident caused by tje person who stole such vehicle.

What is a Charter by Demise or Bareboat?

The whole vessel is leased by the shipowner to the charterer, including the management and control of the vessel. The charterer may provide his own master and crew or retain those of the shipowner, in which case, they become the agents and employees of the charterer. The shipowner becomes a private carrier. Should there be any loss, the charterer is liable for the consequences of the voyage as if he were the owner except where the liability arises from unseaworthiness.

What are Valid Stipulations with Common Carriers?

1. An agreement limiting the common carrier's liability for delay on account of strikes or riots; 2. 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;

Distinguish Common Carriers (CC) vs. Private Carriers (PC)

1. CC holds himself out to all persons who choose to employ him and carry for hire; PC does not hold itself out to carry goods for the general public and carriage is generally undertaken by special agreement; 2. CC is bound to carry for all who choose to employ it; PC is can choose the persons with whom it may contract; 3. CC is subject to regulation as it is a public service; PC is not; 4. CC is bound to exercise extraordinary diligence; PC owes only diligence of a good father of a family; 5. CC cannot stipulate that it be exempt from liability thru negligence of its agents or employees it being against public policy; PC may validly enter into such stipulation.

What is the Governing Law in Common Carriers?

1. Coastwise shipping: a) New Civil Code - primary law b) Code of Commerce - suppletory law 2. Carriage from Foreign to Phil. Ports: a) New Civil Code - primary law b) Code of Commerce - suppletory law c) Carriage of Goods by Sea Act - suppletory law 3. Carriage from Phil. to Foreign Ports - the laws of the country of destination. 4. Carriage by Sea by Foreign Vessels - Cabotage and co-loading of foreign vessels, the carriage shall be governed by COGSA. 5. Overland transportation: a) New Civil Code - primary law b) Code of Commerce - suppletory law 6. Air transportation: a) New Civil Code b) Code of Commerce c) For international carriage - Warsaw convention.

Causes of Action that may Arise from Negligent Act of Common Carrier

1. Culpa contractual - negligence based on contract; 2. Culpa aquiliana - negligence based on tort; 3. Culpa criminal - negligence based on crime.

What are those Liabilities of a Ship Agent and of Ship Owner for Acts Done by Captain Towards Passengers and Cargoes Making them Solidarily Liable to the Latter?

1. Damages to vessel and cargo due to lack of skill and negligence; 2. Thefts and robberies of the crew; 3. Losses and fines for violation of laws; 4. Damages due to mutinies; 5. Damages due to misuse of powers; 6. For deviations; 7. For arrivals under stress; 8. Damages due to non-observance of marine regulations.

What are 3 Zones of Time in Collision of Vessels?

1. First zone - time before any possibility of collision up to the moment when risk of collision begins; 2. Second zone - time when risk of collision begins up to the moment it becomes a certainty; 3. Third zone - time when collision is certain up to the time of impact.

When is the Limited Liability Rule Applicable?

1. Liability for injuries to 3rd parties; 2. Acts of the captain in the care of the goods; 3. Collision.

Remedies of a Dead or Injured Passenger due to the Negligence of a Common Carrier

1. Recover DAMAGES for breach by the carrier of its obligation to observe extraordinary diligence in safely bringing the passenger to his destination. 2. File a tort case (culpa aquiliana) against the owner of the other car which may have been negligent in its operation. 3. File a criminal case (culpa delictual) with civil liability against the negligent driver (of the car he was riding in or of the other car), should the driver be the one negligent. 4. Should these drivers be insolvent, the passenger may run after the employers of these drivers, under their subsidiary liability under the RPC. 5. File a case against the common carrier for breach of contract of carriage (culpa contractual).

Invalid Stipulations Limiting Liability to Passengers

1. Stipulation dispensing with the responsibility of a common carrier for the non-observance of extraordinary diligence in the safety of passengers (Art. 1757); 2. Stipulation limiting the common carrier's liability for willful acts or gross negligence, even with reduction of fare (Art. 1758); 3. Stipulation that the common carrier's responsibility shall be eliminated or limited upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees (Art. 1760 in relation to Art. 1759).

What are the Requisites of Fortuitous Event?

1. The event must be INDEPENDENT of the human will; 2. It must be impossible to foresee, or if it can be foreseen, it must have been IMPOSSIBLE to avoid; 3. The occurrence must render it impossible for the debtor to fulfill his obligation in a normal manner; and 4. The debtor must be FREE from any participation in or the aggravation of the injury to the creditor. Note: To be valid defense, the fortuitous event must be established to be the proximate cause of the loss (Asia Lighterage and Shipping vs. CA).

What are the Triple Roles of the Captain?

1. The general agent of the shipowner; 2. The commander and technical director of the vessel; and 3. Government representative of the country under whose flag he navigates.

What are Void Stipulations with Common Carriers?

1. The goods are transported at the risk of owner or shipper; 2. The carrier will not be liable for any loss, destruction or deterioration of goods; 3. The carrier need not observed any diligence in the custody of goods; 4. The carrier shall exercise a degree of diligence less than that of a good father of a family over the goods;

Examples of Common Carriers (Aside from passenger buses, jeepneys, taxis, airplanes and ships)

1. The operator of a school bus (Perena vs. Sps. Zarate); 2. Pipeline operators engaged in the business of transporting or carrying goods, i.e. petroleum products (First Phil. Industrial Corp vs. CA); 3. Customs brokers and warehousemen because transportation of goods is an integral part of their business (Calvo vs. UCPB); 4. Sole proprietor engaged in the carriage of goods for like the buying of used bottles and scrap metal in Pangasinan and selling these items in Manila (De Guzman vs. CA); 5. Barge operators that offer its barges to the public for carrying or transporting goods by water for compensation (Asia Lighterage and Shipping vs. CA); 6. Resorts owner offering tour package-contract which includes ferry services for guests if its ferry services are so intertwined with its main business as to be properly considered ancillary thereto (Sps. Cruz vs. Sun Holidays).

What are the Rules on Collision of Vessels?

1. When one of the vessels is at fault - the owner of the vessel at fault shall be liable for losses or damages suffered by the owner innocent vessel and cargo owners;

When is a Protest Required?

1. When the vessel makes an arrival under stress; 2. Where the vessel is shipwrecked; 3. Where the vessel has gone thru a hurricane or the captain believes that the cargo has suffered damages or averages; 4. Maritime collisions.

What are the Exceptions to the Limited Liability Rule?

1. Where the death or injury was due to the shipowner's fault or the concurring negligence of the shipowner and the captain; 2. Where the vessel is insured; 3. In workmen's compensation claims; 4. Repairs on the vessel before its loss.

Limitation of Liability in Absence of Declaration of Greater Value

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. 1749).

Duration of Liability of Common Carriers as to Passengers; When it Commences

Commences from the moment the person who purchases the ticket from the carrier presents himself at the proper place and in a proper manner to be transported. Commences also when the common carrier gives to the passenger the opportunity to avail its services without need of boarding the vehicle. If in the course of boarding a vehicle which had slowed down to allow a prospective passenger to board, the passenger suffers an injury or is killed, the liability of the carrier is contractual. Commences from the moment he steps on the platform of the bus, and entitled to all rights including the observance by the common carrier of extraordinary diligence.

Aboitiz Shipping Corp vs. CA

Even if he had already disembarked an hour earlier, his presence in petitioner's premises was not without cause. The victim had to claim his baggage which was possible only one hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner's vessel that the unloading operations shall start only after that time. Consequently, the victim is still deemed a passenger.

Yobido vs. CA

Explosion of a new tire may not be considered a fortuitous event if there are human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicles.

Sulpicio Lines vs. Sesante

For a common carrier to be absolved from liability in case of force majeure, it must prove that the: 1. Accident was caused by fortuitous event; and 2. It did not contribute to the occurrence of the incident due to its own or its employees negligence.

Valid Stipulations Limiting Liability to Passengers

For non-paying passengers (those carried gratuitously), a stipulation limiting the common carrier's liability for negligence is valid (Art. 1758).

Common Carrier's Liability for the Acts of Strangers or Criminals

GR: Common carrier is liable for even for acts of strangers like thieves or robbers. XPN: Where such thieves or robbers acted with grave irresistible threat, violence or force. (De Guzman vs. CA).

Liability Where the Negligence of the Carrier's Driver and 3rd Person Concurs

In case the negligence of the carrier's driver and 3rd person concurs, the liability of the carrier and his driver, third person - is JOINT and SEVERAL (SOLIDARY LIABILITY) (MMTC vs. CA).

What is General Average?

Includes all damages deliberately caused in order to save the vessel, its cargo, or both at the same time from real and known risk. All persons having an interest in the vessel and cargo shall contribute proportionately to satisfy the amount of the general average.

What is a Contract of Affreightment?

It involves the use of a shipping space leased by the owner in part or as a whole, to carry goods for others. The control of the vessel remains with the shipowner, including the employ of a master and crew. The shipowner remains a common carrier.

What is a Bill of Lading?

It is a written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or to his order.

What are Averages?

It is an extraordinary or accidental expense incurred during the voyage to: 1. Preserve the cargo, vessel or both; 2. Recover all damages or deterioration suffered by: a) the vessel from departure to port of destination; b) to the cargo from the port of loading to the port of consignment.

True Test for a Common Carrier

It 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 his business or occupation (Sps. Perena vs. Sps. Nicolas).

What is Extraordinary Diligence?

It is that extreme measure of care and caution which persons of unusual prudence and circumspection use for securing and preserving their own property or rights. It involves rendering service with greatest skill and utmost foresight. If despite the exercise of extraordinary diligence, the event could not have been foreseen as it was one independent of human will, the common carrier shall be EXEMPT from liability.

What is Arrival Under Stress?

It is the arrival of the vessel at some port that is not its destination due to: 1. Lack of provisions; 2. Well founded fear of seizure, privateers or pirates; and 3. Inability to navigate due to an accident of the sea.

Duration of Liability of Common Carriers When a Passenger Waits for Carrier or Boards a Carrier

It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar or motorbus, to stop their conveyances within a reasonable length of time in order to afford passengers an opportunity to board and enter (Dangwa Transportation Co. vs. CA). The victim was considered a passenger by stepping and standing on the platform of the bus. The duty which the carrier owes to its patrons extends to persons boarding the carrier as well as those alighting therefrom. While the carrier bus is not in motion, there is no necessity for a person who wants to ride the same to signal his intention to board. A public utility bus, once it stops, is in effect making a continuous offer to bus riders.

What is the Doctrine of Error in Extremis?

It refers to the sudden movement of a vessel that is not at fault during the 3rd zone of collision with another vessel that is at fault. The vessel making any wrong sudden movement shall not be responsible for it.

Light Rail Transit Authority vs. Navidad

Petitioner carrier was held liable for breach of contract when a certain Nicanor Navidad died after he fell on the LRT tracks and was struck by a moving train which was coming in at the exact moment that Mr. Navidad fell from platform. Mr. Navidad was treated as a passenger because he entered the LRT station after having purchased a token and he fell while he was on the platform waiting for a train. Thus, he was where he was supposed to be with the intention of boarding a train. Such duty of the CC to provide safety to its passengers is not only during the course of the trip but for so long as the passengers are within the premises and where they ought to be in pursuance of the contract of carriage.

Right of Stoppage in Transitu

Right exercised by the seller by stopping delivery of goods to a certain buyer or consignee (because of insolvency) when such goods are already in transit. Here, common carrier's duty to observe extraordinary diligence in the vigilance over the goods is no longer effective because it shall merely require ordinary diligence as it has already become a contract of deposit.

Fortune Express vs. CA

Seizure of passenger bus by armed men is NOT a fortuitous event and does not excuse the carrier from liability where there was already a report from police agents that a certain group will attack the buses and the carrier did not take steps to safeguard the lives and properties of its passengers. Note: This should be distinguished from Pilapil vs. CA, where the injury was not foreseeable.

Civil Liability of Ship Agent and Shipowner

Ship agent is civilly liable for indemnities suffered by third persons arising from acts or omissions of the captain in the care of the goods. The ship agent is jointly and severally liable with its principal for the loss or damage to the cargo.

Liability of Common Carrier for Checked-In Baggage

So long as the belongings were brought inside the premises of the vessel, the common carrier was thereby effectively notified and consequently duty-bound to observe the required diligence in ensuring the safety of the belongings during the voyage. Applying Article 2000, NCC, the common carrier assumed liability for loss of the belongings caused by the negligence of its officers or crew.

Liability of Common Carrier for Baggage in Possession of Passengers

The law requires the common carrier to observe the same diligence as the hotel keepers in case the baggage remains with the passenger; otherwise, extraordinary diligence must be exercised. Furthermore, the liability of the common carrier attaches even if the loss or damage to the belongings resulted from the acts of the common carrier's employees, the only exception being where such loss or damages is due to force majeure (Sulpicio Lines vs. Sesante).

What Law Governs the Liability of Common Carriers in case of Loss, Destruction or Deterioration of Goods Transported by them?

The liability of common carrier as to the loss, destruction or deterioration of goods shall be governed by the law of the country to which said goods are to be transported. As to goods transported to the Philippines, the liability of the carrier is primarily governed by the Civil Code. The COGSA will only be suppletory, unless the parties have expressly provided for its application.

What is the Limited Liability Rule?

The liability of the shipowner or ship agent is co-extensive with the value of the vessel, equipment, freightage and proceeds of the insurance, if any. Note: "NO VESSEL, NO LIABILITY", expresses in a nutshell the limited liability rule. The total destruction of the vessel extinguishes maritime lien, as there is no longer any res to which it can attach.

What is the Rule as to Leased Vehicles in Relation to the Registered Owner Rule?

The registered owner is also liable even if the vehicle was leased to another person.

What is the Registered Owner Rule?

The registered owner of a vehicle is liable for damages caused by the negligent operation of the vehicle although the same was already sold or conveyed to another person at the time of the accident. Note: The registered owner is liable to the injured party subject to his right of recourse against the transferee or buyer.

Duration of Liabilty of a Common Carrier as to Delivery of Goods

The responsibility of common carriers to extraordinary diligence commences from the time the goods are unconditionally placed in their possession until they are delivered, to the consignee or to the person who has the right to receive them (Eastern Shipping Lines vs. BPI/MS Insurance Corp.). This extraordinary liability continues 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. It 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 is advised of the arrival of goods and has reasonable opportunity to remove them or otherwise dispose of them (Arts. 1736, 1737, and 1738).

May Exemplary Damages be Recovered in Breach of Contract of Carriage?

The same may be awarded only if: 1. The common carrier acted in wanton, fraudulent, reckless, oppressive or malevolent manner; or 2. The common carrier authorized or ratified thereafter the wrongful act of his employee. Note: Cannot be awarded if the requisite element of compensatory damages was not present (Morris vs. CA).

Phil. American General Insurance Company vs. PKS Shipping Company

The sinking of a barge that was being towed by a tug boat was the result of a fortuitous event when it resulted because the barge was suddenly tossed by waves of extraordinary height and buffeted by strong winds resulting in the entry of water into the barge's hatches.

Due Diligence in the Selection and Supervision of Employees

This includes: 1. Formulation of suitable rules and regulations for the guidance of employees; 2. Issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations thru his employees; 3. Imposition of necessary disciplinary measures upon employees in case of breach or as may be warranted to ensure the performance of acts indispensable to the business of and beneficial to their employer; 4. Actual implementation and monitoring of consistent compliance with said rules (Caravan Travel and Tours vs. Abejar).

Status of a Driver Under a Boundary System Arrangement

Under the Civil Code, the driver is a LESSEE because he pays a fixed amount of rental for his use of the jeepney. Under Labor Laws, the driver is an EMPLOYEE being entitled to all privileges going along with the employer-employee relationship. Under the law on Common Carriers, he is an EMPLOYEE of the operator for purpose of the latter's liability to passengers.

Southern College vs. CA

When the effect is found to be partly the result of the participation of man, whether it be from active intervention or neglect, the failure to act, the whole occurrence is humanized and removed from the rules applicable to acts of God

Doctrine of Last Clear Chance

Where both parties are negligent but the negligent act of one succeeds that of the other by an appreciable interval of time, or where it is impossible to determine whose fault or negligence brought about the occurrence of the incident, the one who has the last reasonable opportunity to avoid the impending harm and fails to do so, is chargeable with the consequences. The antecedent negligence of a person does not preclude recovery of damages caused by supervening negligence of the latter, who had the last fair chance to prevent the impending harm by the exercise of due diligence (Greenstar Express vs. Universal Robina Corp.).

What is the Doctrine of Inscrutable Fault?

Where fault is established but it cannot be determined which of the two vessels were at fault, both shall be deemed to have been at fault.

Liability on Goods if Brought to a Carrier in Bad Order

Where the goods are brought to a carrier in bad order, it may refuse to accept the same for carriage, and when the shipper insists, the carriage may be effected at the risk of the shipper. Here, in case of shortage upon delivery to the consignee, the carrier becomes liable to the latter. Mere proof of delivery of the goods in good order to a common carrier and their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier (Belgian Overseas vs. Phil First Ins. Co.).