Transportation Law Notes

TRANSPORTATION LAW  November 21, 2012

COMMON CARRIERS

 Art. 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 services to the public.

NOTES: Elements of Common Carrier:

1. Any Any per perso son, n, corp corpor orat atio ions ns,, firm firmss or or asso associ ciat atio ions ns;; 2. Such persons etc., must be engaged in the business of carrying or  transporting passengers or goods or both; 3. Thee mean Th meanss of carr carriiage age or tran transp spor ortting ing pas passeng senger ers, s, good goodss or bot both is by LAND, WATER OR AIR; 4. Thee carr Th carryi ying ng or or tran transp spor orti ting ng of of pass passen enge gers rs or or good goodss or both both is is for for a fee fee or  compensation; and 5. Thee serv Th servic ices es is is offe offere red d to to the the pub publi licc with withou outt dis disti tinc ncti tion on.. Test for determining whether a party is a common carrier of goods is: 1. He mus mustt enga engage ged d in the the bus busin ines esss of car carry ryin ing g good goodss for for othe others rs as as a publ public ic employment, and must hold himself out as ready engage in the transportation of  goods or person generally as a business and not as a casual occupation; 2. He must und undertake to carry goods of the kind to 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 tr transpo sportation m mu ust be fo for hi hire.

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The concept of “common carrier” under Article 1732 may be seen to coincide neat neatly ly with with the the no noti tion on of “Pub “Publi licc Serv Servic ice” e” un unde derr the the Publ Public ic Serv Servic icee Act Act

(Commonwealth Act no. 1416) which at least partially supplements the law on common carriage set forth in the Civil Code. Under Section13(b) of said Act, “public service” includes: Xxx 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 one ofr general business purposes, any common carrier xxx xxxx. (De Guzman vs. CA, Dec. 12, 1988)

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Common carrier holds himself out in common, that is to all persons who choose to employ him as ready to carry for hire vs. Private Carrier agrees in some special case with some private individual to carry for hire. In Home Insurance Co. vs. American Steamship Agency, the Court adopted the  principle laid in American jurisprudence wherein a common carrier undertaking to carry a special cargo or chartered to a special persons only, it becomes a private carrier. Thus, the provisions in Civil Code on common carrier will not apply. Thereby, as a private carrier a stipulation exempting the owner from liability for  the negligenc negligencee of its agent is valid. Thus stipulati stipulation on would be void only only if the strict public policy governing common carriers is applied. Such policy however  has no force where the public at large is not involve, as the ship is totally chartered for the use of a single party. JURISPRUDENCE: CASE 1 First Philippine Industrial Corporation vs. Court of Appeals, December 29, 1998

Facts: In imposing tax on the petitioner, respondent City treasurer contends that the pipelines are not included in the term “common carrier” which refers solely to ordinary carriers such as trucks, trains, ships and the like. It further posit the term “common carrier” under the said code pertains to the mode or manner by which a  product is deliver to its destination. destination.

Held: A "common carrier" may be defined, broadly, as one who holds himself out to the public as engaged in the business of transporting persons or property from  place to place, for compensation, offering his services to the public generally. The test for determining whether a party is a common carrier of goods is: 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 kind to 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. 15 Based on the above definitions and requirements, there is no doubt that  petitioner is a common carrier. It is engaged in the business of transporting or  carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not exclude it from the definition of  a common carrier  Xxx

Under the Petroleum Act of the Philippines (RA NO. 387) petitioner is a “common carrier.”

Case 2

Vlasons Shipping, Inc. vs. CA (December 12, 1987)

Held: The true test of a common carrier is the carriage of passengers or  good, provided it has space, for all who opt to avail themselves of tis transportation service for a fee. A carrier which does not qualify on said test is deemed a private carrier. Xxx In the case at bar, it is undisputed that VSI did not offer its services to the general  public. As found by the RT, it carried passengers or goods only for those it chose under a

“special contract of charter party.” As correctly ruled by the CA, petitioner was not a common but a private carrier.” Thus, the rights and obligations are determined primarily  by stipulations in their contract of private carriage or charter party. Since petitioner was private carrier, the ship owner’s obligations are governed by the provisions of the Code of Commerce. It has been held that the “ in an action against a private carrier for loss of, or injury to, cargo, the burden is on the plaintiff to prove that the carrier was negligent or unseaworthy, and the fact that the goods were lost or  damaged while in the carrier’s custody does not put the burden of proof on the carrier.”

Case 3

Valenzuela Hardwood vs. CA, June 30, 1997

Facts: it is undisputed that the cause of the sinking of the vessel was due to the snapping of the iron chains and the subsequent rolling of the logs to the portside due to the negligence of the captain in stowing and securing the logs on board the vessel. Undisputed also was the fact that the private respondent is a private carrier when it contracted with the petitioner to transport its cargo. ISSUE: Whether the stipulation in the charter party exempting the carrier from liability for the loss of cargo due to negligence of vessel’s captain is valid? Held: Yes. In a contract of private carriage, the parties may validly stipulate that responsibility for the cargo rests solely on the charterer, exempting the ship owner from liability for loss or damage to the cargo caused even by the negligence of the ship captain. The stringent provisions of the Civil Code on common carriers cannot be applied to private carrier, unless expressly stipulated by the parties in their charter party.

 Art. 1733.

From the NATURE of their services and for reasons of PUBLIC POLICY, common carriers are bound to observe EXTRAORDINARY DILIGENCE in the vigilance of GOODS and for the SAFETY of passengers transported by them according to all circumstances of each case. Such extraordinary diligence in the 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.

NOTES:

TWO TYPES OF EXTRAORDINARY DILIGENCE: A. VIGILANCE ON GOODS B. SAFETY OF PASSENGERS

Due diligence- is that which is require by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. Case 1

Loadstar Shipping vs. CA, September 28, 1999

Held: 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. The failure of a common carrier to maintain in searthy conditions its vessel involved in a contract of  carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.  Nor the doctrine of limited liability does not apply where there was negligence on the part of the vessel owner or agent. Here, the loadstar was at fault or negligent in not maintaining a seaworthy vessel and in having allowed its vessel to sail despite knowledge of an approaching typhoon. Case 2

The Philippine American Genral Insurance vs. CA, June 11, 1997

Held: It is settled that carrying A DECK cargo raises the presumption of unseaworthiness unless it can be shown that the deck cargo will not interfere with the proper management of the ship. However, in his case it was established that the vessel was not designed to carry substantial amount of cargo ON DECK. The inordinate loading of cargo ON DECK  resulted in the decrease of the vessel’s metacentric height thus making it unstable.

I. PROVISIONS ON EXTRA DILIGENCE ON GOODS A. Article 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: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or 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 the containers; (5) Order or act of competent public authority.

B.

Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in article 1733.

C. Article 1745. Any of the following or similar  stipulations shall be considered unreasonable, unjust and contrary to public policy:

5) That the common carrier shall not be responsible for the acts or omission of his or its employees; (6) That the common carrier's 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) That 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 of carriage.

II. PROVISIONS ONF EXTRAORDINARY DILIGENCE ON SAFETY OF PASSENGERS: A. Article 1755. A common carrier is 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 circumstanes.

B. Article 1756. In case of death of or injuries to passengers, common

carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as  prescribed in articles 1733 and 1755.

VIGILANCE OVER GOODS Article 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: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or 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 the containers; (5) Order or act of competent public authority.

 NOTES: The foregoing list is a closed list which means that the if the circumstances do not fall within the list even they would constitute force majeure, the carrier is presumed negligent in case of loss, destruction or deterioration.

Requisites for Natural Disaster or Calamity: 1. It must the proximate cause; Proximate cause is defined as that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause, produces the injury, and without which the result would not have occurred.

2. It must have been the only cause of the loss. 3. Common carrier has exercised extraordinary diligence to prevent or minimize BEFORE, DURING AND AFTER the natural disaster  4. Common carrier has not incurred delay or negligent in transporting goods. Article 1740. If the common carrier  negligently incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility.

Requisites for act of public enemy: 1. Such act must be the proximate cause 2. Only cause 3. CC exercised extra diligence BEFORE, DURING and AFTER the said act. Requisites for acts or omission of shipper:

1. The act or omission of the shipper of owner of good must be the proximate cause. 2. And it must be the only cause. Relevant provision: Article 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the  proximate cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which however, shall be equitably reduced. Define: Contributory negligence is the failure of a  person who has been exposed to injury by the fault or  negligence of another, to use such degree of care for his safety and protection as ordinarily prudent men would use under the circumstances.

Requisites for character of goods or fault in packing or containers: 1. The loss, destruction or deterioration of goods was caused by the character of  goods, or the faulty nature of packing or containers 2. CC had exercised due diligence to forestall or lessen the loss

Relevant provisions: Article 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.

Requisites for the act of Public Authority: 1. The act of public authority must be the proximate or sole cause 2. The public authority had power to issue the order. Relevant provision: Article 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. CASE 1 Ganzon vs. Court of Appeal, May 30, 1988

Facts: Galacio contracted services of Ganzon to haul 305 tons of scrap iron from Bataan to Manila. Per agreement, delivered the scrap iron to the captain for  laoding. When about half of scrap iron was loaded, Mayor Jose of Bataan demanded P5,000.00 from Gelacio but the latter refused to give the amount. The Mayor drew his gun and shot Gelacio resulting his injuries and was treated. When the loading resumed, acting mayor with three policemen ordered the captain to dump the scrap iron. Issue: whether or not the dumping of the scrap iron into the sea that was ordered by the local government official a fortuitous event. Held: the intervention of the municipal official was not of a character that would render impossible the fulfillment by the carrier of its obligation. The  petitioner was not duty bound to obye the illegal order to dump into the sea the scrap iron. Moreover, absence of sufficient proof that the issuance of same order  was attended with such force or intimidation as to completely overpower the will of petitioner’s employees.

COMMON PROVISIONS ON LOSS, DESTRUCTION AND DETERIORATION OF GOODS Article 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration.

Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in article 1733.

 NOTES: Case 1

Coastwise Lighterage Corporation vs. CA, June 12, 1995

Held: When the charter party entered into was a contract of affreightment where the possession, command and navigation of the vessels remained with the shipower or its agent then the contract of affreightment did not covert the Coastwise inot a private carrier. The law and jurisprudence on common carriers both hold that the mere  proof of delivery of goods in good order to carrier and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima facie case against the carrier.

Article 1736. The extraordinary responsibility of the common carrier 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.

 NOTES: A provision in the bill of lading exempting the common carrier from liability or  damage once the goods were placed at the possession of the customs or authorities is valid, not being contrary to law, public policy or morals. (Lu Do and Yu Ym corp. vs. Binamira, April 22, 1957)

The validity of stipulations in bills of lading exempting the carrier from liability for loss or damage to the goods when the same are not in its actual custody has been upheld by the Supreme Court in the case of Phoenix Assurance Co., vs. United States Lines, 22 SCRA 674 CASE 1

Macam vs. CA, August 25, 1999 Held: the extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. Although the cargoes were not delivered to the consignee, it appears however that in the export invoices, GPC was clearly names as buyer/importer. This premise draws the Court to conclude that the delivery of the cargoes to GPC as

 buyer/importer which, comformably with Article 1736 had, other than the consignee, the right to receive them was proper.

Case 2

Samar Minig vs. Lloyd, October 23, 1984 Held: The validity of stipulations in bills of lading exempting the carrier  from liability for loss or damage to the goods when the same are not in its actual custody has been upheld by the Court in Phoenix Assurance Co, Ltd vs. United States Lines 22 scra 674. In Sales, actual delivery has been defined as the ceding of corporeal  possession by the seller, and the actual apprehension of corporeal possession by the buyer  or by person authorized by him to receive the goods as his representative for the purpose of custody or disposal.

Article 1737. The common carrier's duty to observe extraordinary diligence 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.

 NOTES: RELEVANT TRANSITU:

PROVISIONS

ON

THE

RIGHT

OF

STOPPAGE

Article 1530. Subject to the provisions of this Title, when the buyer of  goods is or becomes insolvent, the unpaid seller who has parted with the  possession of the goods has the right of stopping them in transitu, that is to say, he may resume possession of the goods at any time while they are in transit, and he will then become entitled to the same rights in regard to the goods as he would have had if he had never parted with the possession. (n) Article 1531. Goods are in transit within the meaning of the preceding article:

IN

(1) From the time when they are delivered to a carrier by land, water, or air, or other bailee for the purpose of transmission to the  buyer, until the buyer, or his agent in that behalf, takes delivery of  them from such carrier or other bailee; (2) If the goods are rejected by the buyer, and the carrier or other   bailee continues in possession of them, even if the seller has refused to receive them back. Goods are no longer in transit within the meaning of the preceding article: (1) If the buyer, or his agent in that behalf, obtains delivery of the goods before their arrival at the appointed destination; (2) If, after the arrival of the goods at the appointed destination, the carrier or other bailee acknowledges to the buyer or his agent that  he holds the goods on his behalf and continues in possession of them as bailee for the buyer or his agent; and it is immaterial that further  destination for the goods may have been indicated by the buyer; (3) If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf. XXX XXX

Article 1532. The unpaid seller may exercise his right of stoppage in transitu either  by obtaining actual possession of the goods or  by giving notice of his claim to the carrier or other bailee in whose  possession the goods are. Such notice may be given either to the  person in actual possession of the goods or to his principal. In the latter case the notice, to be effectual, must be given at such time and under such circumstances that the principal, by the exercise of  reasonable diligence, may prevent a delivery to the buyer.

The duty of the Cc to exercised extraordinary diligence ceases when the shipper  exercises his right of stoppage in transit because by that time the Cc will transmute it to an ordinary bailee or warehouseman upon the theory that the that the exercise

of such right terminates the contract of carriage. (Rosenthal vs. Weir, 170 N.Y. 148)

Article 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.

 NOTES: CASE 1

International Harvester Co. vs. Aragon, 84 Phil 63

Admiralty has jurisdiction over all maritime contracts, in whatever  form, wherever they were executed or are to be performed, but not over  non-maritime contracts, (2 Corpus Juris Secundum, p. 84.) Whether or not a contract is maritime depends not on the place where the contract is made and is to be executed, making the locality the test, but on the subject-matter  of the contract, making the true criterion a maritime service or a maritime transaction. ( Id . , p. 85.) Specifically, admiralty has jurisdiction of a  proceeding in rem or in personam for the breach of a contract of  affreightment, whether evidenced by a bill of lading or a charter party. ( Id .,  pp. 90-91.) And typical of a controversy over contracts of affreightment is a suit of one party against the other for loss of or damage to the cargo. (1 American Jurisprudence, p. 567.) This is the very case now before us,  because the respondent Yaras and Company seeks to recover from the  petitioner International Harvester Company of the Philippines the value of a certain lost cargo. CASE 2

Elite Shirt Factory Inc. vs. Cornejo, L-26718, Oct. 31, 1969

Does the exclusive jurisdiction conferred on a court of first instance over admiralty and maritime cases include the suit where the shipper files a claim against the carrier, the goods having been landed, stored in its bodega

 but subsequently burned, no delivery having been made to the consignee as a result? The Court held that the decisive consideration is that the admiralty  jurisdiction as decided by us in a leading case,  International Harvester Co. v. Aragon,5 extends over all maritime contracts in whatever form entered into, whether executed or still to be performed. As long as the subject matter thereof is maritime service or a maritime transaction, then it is embraced within such a concept. When, as in this case, the proceeding in effect is one for a breach of a contract of shipment, the jurisdiction of the court of first instance under the specific provision of the Judiciary Act is undeniable. CASE 3

Servando vs. Phil. Steam Navigation, October 23, 1982 Held: Absence of delay or negligence, the common carrier is not liable for loss or destruction of goods placed/deposited in the warehouse of the Bureau of Customs

The legal relationship between an arrastre operator and the consignee is akin to that of warehouseman and depositor (Northern Motors vs. Prince Line Feb. 29, 1960). Both as to the nature of the functions and place of their performance, an arrastree operator’s services are clearly not maritime; they are no different from those of a depositary or warehouseman. (Delgaldo Brothers, vs. Home Insurance Co. March 27, 1961)

Article 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have been 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 the goods. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in article 1734, No. 2.

 NOTES: Case 1

Eastern Shipping Lines vs. IAC 150 SCRA 464

Held: The Court ruled that fire may not be considered as natural disaster or calamity. This must be so as it arises almost invariably from some act of man or by human means. It does not fall within the category of  an act of God unless caused by lighting or by other natural disaster or  calamity. It may even be caused by the actual fault or privity of the carrier. Even if fire were to be considered a “natural disaster” within the meaning of Article 1734 of the Civil Code that the “natural disaster” must have been the “proximate and only cause of the loss”, and that the carrier  has “exercised due diligence to prevent or minimize the loss before , during and after the occurrence of the disaster.

LIMITATIONS OF COMMON CARRIERS LIABILITY IN CASE OF LOSS, DESTRUCTION OR DETERIORATION Article 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for 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 or 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.

 NOTES: Factors to be considered: Article 1751. The fact that the common carrier  has no competitor along the line or route, or a part thereof, to which the contract

refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in consonance with public policy. Additional limitation: Article 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid. Exception to Article 1744: Article 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 carrier's liability cannot be availed of in case of the loss, destruction, or deterioration of the goods. Article 1746. An agreement limiting the common carrier's 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.

Freight tickets or bus receipts for cargo are bills of lading. (Interprovincial Autobus vs. Collector Internal Revenue)

Article 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 omission of his or its employees;

(6) That the common carrier's 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) That 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 of carriage.

Article 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. Phoenix Assurance Co. vs. Macondray and co., Inc., May 13, 1975:

Stipulation limiting the carriers liability printed in the smallest type at the  back of the bill of lading for loss or damage to $500 per package unless the shipper in writing declares the nature of the goods and a higher valuation and pays additional freightage on the basis of such higher valuation is held to be valid and  binding although the bill is not signed by the shipper or consignee of goods.

Article 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. Shewaram vs. PAL G.R. No. L-20099, July 7, 1966

It is clear from the above-quoted portions of the decision of  the trial court that said court had found that the suitcase of the appellee was tampered, and the transistor radio and the camera contained therein were lost, and that the loss of those articles was due to the negligence of the employees of the appellant. The evidence shows that the transistor radio cost P197.00 and the camera cost P176.00, so the total value of the two articles was P373.00. xxxx It is, however, contended by the appellant that its liability should be limited to the amount stated in the conditions of carriage  printed at the back of the plane ticket stub which was issued to the appellee, which conditions are embodied in Domestic Tariff 

Regulations No. 2 which was filed with the Civil Aeronautics Board. One of those conditions, which is pertinent to the issue raised by the appellant in this case provides as follows: The liability, if any, for loss or damage to checked  baggage or for delay in the delivery thereof is limited to its value and, unless the passenger declares in advance a higher  valuation and pay an additional charge therefor, the value shall be conclusively deemed not to exceed P100.00 for each ticket. xxx In accordance with the above-quoted provision of Article 1750 of the New Civil Code, the pecuniary liability of a common carrier may, by contract, be limited to a fixed amount. It is required, however, that the contract must be "reasonable and just under the circumstances and has been fairly and freely agreed upon." xxx The requirements provided in Article 1750 of the New Civil Code must be complied with before a common carrier can claim a limitation of its pecuniary liability in case of loss, destruction or  deterioration of the goods it has undertaken to transport. In the case  before us We believe that the requirements of said article have not  been met. It cannot be said that the appellee had actually entered into a contract with the appellant, embodying the conditions as printed at the back of the ticket stub that was issued by the appellant to the appellee. The fact that those conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the appellee was aware of those conditions such that he had " fairly and freely agreed " to those conditions.

SAFETY OF PASSENGERS

Article 1755. A common carrier is 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.

La Mallorca vs. Court of Appeals (July 27, 1966)

Under the facts as found by the Court of Appeals, we have to sustain the judgement holding petitioner liable for damages for the death of  the child, Raquel Beltran. It may be pointed out that although it is true that respondent Mariano Beltran, his wife, and their children (including the deceased child) had alighted from the bus at a place designated for  disembarking or unloading of passengers, it was also established that the father had to return to the vehicle (which was still at a stop) to get one of  his bags or bayong that was left under one of the seats of the bus. There can  be no controversy that as far as the father is concerned, when he returned to the bus for hisbayong which was not unloaded, the relation of passenger  and carrier between him and the petitioner remained subsisting. For, the relation of carrier and passenger does not necessarily cease where the latter, after alighting from the car, aids the carrier's servant or employee in removing his baggage from the car. 1 The issue to be determined here is whether as to the child, who was already led by the father to a place about 5 meters away from the bus, the liability of the carrier for her safety under the contract of carriage also  persisted. It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger alights from the carrier's vehicle at a place selected by the carrier at the point of  destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Thus, a person who, after alighting from a train, walks along the station platform is considered still a passenger. So also, where a passenger has alighted at his destination and is proceeding by the usual way to leave the company's premises, but  before actually doing so is halted by the report that his brother, a fellow  passenger, has been shot, and he in good faith and without intent of  engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus continues to be a passenger  entitled as such to the protection of the railroad and company and its agents.

In the present case, the father returned to the bus to get one of his  baggages which was not unloaded when they alighted from the bus. Raquel, the child that she was, must have followed the father. However, although the father was still on the running board of the bus awaiting for the conductor to hand him the bag or bayong , the bus started to run, so that even he (the father) had to jump down from the moving vehicle. It was at this instance that the child, who must be near the bus, was run over and killed. In the circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely its passengers. In the first  place, the driver, although stopping the bus, nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus conductor  gave him the signal to go and while the latter was still unloading part of the  baggages of the passengers Mariano Beltran and family. The presence of  said passengers near the bus was not unreasonable and they are, therefore, to be considered still as passengers of the carrier, entitled to the protection under their contract of carriage.

When the cause of the accident or death was due to the defect (breakage of the crossjoint) of the motor vehicle, the common carrier is liable since the said defect is not a caso fortuito. The rationale of the carrier’s liability is the fact that the passenger has neither the choice nor  control over the carrier in the selection and use of the equipment and appliances in use by the carrier. (Necesito vs. paras 104 Phil 75)

PAL vs. Court of Appeals July 31, 1981

The duty to exercise the utmost diligence on the part of the common carriers is for the safety of the passengers as well as for the members of the crew of complement operating the carrier, the airplnane in the case at bar. This must be sofr any omission, lapse or neglect therof will certainly result to the damage, prejudice, nay injuries and even death to all aboard the plane, passengers and crew members alike.

Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently , unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755.

Principles governing the liability of the common carrier as to passengers 1. The liability of a carrier is contractual and arises upon breach of its obligation and there is breach if it fails to exercise extraordinary diligence according to all circumstances of each case; 2. A carrier is obliged to carry its passengers with the utmost diligence of very cautious persons, having due regard for all the circumstances; 3. A carrier is presumed to be at fault or to have acted negligently in case of  death, or injury to passengers, it being its duty to prove that it exercised extraordinary diligence 4. The carrier is not an insurer against all risks of travel 5. The carrier is not responsible for events which could not be foreseen, or  which, though foreseen, are inevitable.

Fortuitous Event: Ampang vs. Guinoo Transportation L5044, April 30, 1953

When the defendant bus which carried the passengers capsized after being bumped on the left side by another bus which caused the defendant’s driver to swerve his bus to the left so as to  prevent it from falling into the canal and striking a tree, a maneuver  which led the bus to skid and capsize. The Court was of the opinion that this is an instance of  fortuitous event where it resulted from extraordinary circumstances of being struck by the other bus, independent from the will of, and unforeseen by the defendant’s driver.

Estrada vs. Consolacion, June 29,1976: What is extraordinary diligence and requirements for fortuitous event.

Under the contract of carriage, private respondents assumed the express ansport the wife of petitioner to her destination safely and to observe extra ordinary diligence with due regard for all the circumstances, and that any injury suffered by her in the course thereof, is immediately attributable to the negligence of the carrier. 14 To overcome such presumption, it must be shown that the carrier had observed the required extraordinary diligence, 15 which means that the carrier must show the "utmost diligence of very cautious persons * * * as far as human care and foresight can  provide", 16 or that the accident was caused by a fortuitous event. In order to constitute a caso fortuito that would exempt a  person from responsibility, it is necessary that (1) the event must be independent of the human will; (2) the occurrence must render it impossible f o r the obligor to fulfill his obligation in a normal manner; and (3) the obligor must be free of a concurrent or contributory fault or negligence .

When the cause of the accident was the blowing-up of the tire coupled with the fact that the jeepney was overloaded at that time and was running at a high speed resulting to injuries to passenger, the carrier is held liable the case not being fall under the caso fortuitous event.(Roberto Juntilla vs. Fontanar May 31, 1985)

VILLANUEVA VDA. BATACAN VS. MEDINA, Oct. 22, 1957: The Proximate Cause was the negligent of the carrier’s driver

At 2 o’clock in the morning while the bus of the defendant was running at full speed, one of the front tires burst and the vehicle zigzagged until it fell into a canal and turned turtle. When one of the rescuers who had a torch at that time approached the bus to extend help the bus started to fire-up originated from the gasoline leaked from within and ultimate burned down resulting to the death of the four passengers. Is the carrier liable?

Held: Yes. The proximate cause of the of the death of the  passengers in question was the over-turning of the bus, this for the reason that when the vehicle turned completely on its back, the leaking of gasoline from the tank was not unnatural or unexpected; that the coming othe men with the lighted torch was in response to the call for help.

Article 1757. The responsibility of a common carrier for the safety of passengers as required in articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise.

Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for  negligence is valid, but not for  wilful acts or gross negligence.

The reduction of fare does not justify any limitation of the common carrier's liability.

Article 1759. Common carriers are liable for the death of or  injuries to passengers through the negligence or wilful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

This liability of the common carriers 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.

 Note: In case of collisions of two vehicles , the common carrier may avail the defense that it exercises diligence of a good father of the family or in the selection and supervisions of his employees WITH RESPECT TO THE DAMAGE CAUSED TO THE AUTOMOBILE, but not to the injuries and death of its passenger.

Relevant law: Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or  stopped the act or omission.

Article 1760. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or otherwise.

DUTY OF CARE OF PASSENGERS Article 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.

IF THE PROXIMATE CAUSE OF THE ACCIDENT IS THE NEGLIGENCE OF THE PASSENGER, THEN THE CARRIER IS NOT LIABLE. (Lara et al., vs. Valencia, June 30, 1958)

Article 1762. The contributory negligence of the passenger does not bar recovery of  damages for his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced.

COMMON PROVISIONS Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. Article 1765. The Public Service Commission may, on its own motion or on petition of  any interested party, after due hearing, cancel the certificate of public convenience

granted to any common carrier that repeatedly fails to comply with his or its duty to observe extraordinary diligence as prescribed in this Section. Article 1766. In all matters not regulated by this Code, the rights and obligations of  common carriers shall be governed by the Code of Commerce and by special laws.