Transportation and maritime law

Art. 1746. An agreement limiting the common carrier's liability may be annulled by the shipper or owner if the CC refused to carry the goods unless the former agree to such stipulation.
Art. 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the stipulated or usual route, the contract limiting the common carrier's liability cannot be availed of in case of the loss, destruction, or deterioration of the goods.
Art. 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid.
Art. 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.
Art. 1752. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration.

4 Agbayani:

Kinds of stipulation limiting liability.-- The following stipulations are often made in a bill of lading bill of lading:

1. stipulation exempting the CC from any and all liability for loss or damage occasioned by its own negligence - VOID

2. stipulation providing for an unqualified limitation of such liability to an agreed stipulation - VOID

3. stipulation limiting the liability of the CC to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight -- VALID and ENFORCEABLE

When stipulation limiting liability valid.-- Under 1744, the shipper or owner and the CC may stipulate to limit the liability of the CC for the loss, destruction or deterioration of goods to a degree less than extra-ordinary diligence :

1. the stipulation must be in writing and signed by both parties;

2. the stipulation must be supported by valuable consideration other than the service rendered by the CC;

3. the stipulation must be reasonable, just and not contrary to public policy. This applies only when the CC is acting as such but not when it acts as a private carrier [in Home Insurance vs American Steamship Co., the SC held that the Civil Code provisions on CC should not be applied where the CC is not acting as such but as a private carrier; such policy has no force where the public at large is not involved]

The parties may stipulate that the diligence to be exercised by the CC be less than extra-ordinary diligence, provided that the requirements under Article 1744 are complied with. However, the parties cannot reduce the diligence to less than that of a good father of a family. Art. 1745 provides for 7 stipulations which shall be considered unreasonable, unjust and contrary to public policy.
Construction of stipulations limiting common carrier's liability.-- An exemption in general words not expressly relating to negligence, even though the words are wide enough to include loss by negligence or default of CC's servants, must be construed as limiting the liability of the CC as assurer, and not as relieving him from the duty of exercising reasonable skill and care

Effect of lack of competitor to common carrier.-- Under 1751, the lack of competition of the CC shall be considered in determining WON a stipulation limiting CC's liability is reasonable, just and in consonance with public policy.
Examples of valid stipulations:

1. 1748 - an agreement limiting the CC's liability for delay on account of strikes or riots

2. 1749, Heacock vs Macondray - a stipulation that the CC's liability is limited to the value of the goods appearing in bill of lading unless the shipper or owner declares a greater value

3. 1750 - a contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon

Under 1746, an agreement limiting the CC's liability may be annulled by the shipper or owner if the CC refused to carry the goods unless the former agreed to such stipulation. The effect of the shipper's consent obtained by means of refusal on the part of the carrier to carry the goods is to make the agreement limiting the CC's liability voidable at the instance of the shipper
Principles : [St. Paul Insurance vs Macondray, 70 SCRA 122]

1. A stipulation in the bill of lading limiting the CC's liability to the value of the goods appearing in the bill, unless the shipper or owner declares a greater value, is valid and binding.

2. The insurer who pays the insured on his claim for damage is merely subrogated to the rights of the insured; therefore, said insurer cannot collect from the CC more than what the insured can collect from the CC.

3. The obligation to pay the damage begins from the date it fails to deliver the shipment in good condition to the consignee (on the basis of the rate of exchange on that date).

Effect of delay in transportation, etc.-- Under 1747, the CC cannot avail of the contract limiting his liability in these cases : (1) where the CC delays the transportation of the goods; (2) where the CC changes the stipulated or usual route [in both cases, the delay or change of route must be without just cause]
Presumption as to negligence in case of limited liability.-- Under 1752, the presumption continues even when there is an agreement limiting the liability of the CC in the vigilance of the goods. This presumption is disputable or rebuttable by evidence that the CC exercised extra-ordinary diligence.

5. Applicable Law in foreign trade

Art. 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.
4 Agbayani:
The Civil Code governs the liability of the CC in case of loss, damage or deterioration. Under 1766, in all matters not regulated by the Civil Code, the rights and obligations of CC shall be governed by the Code of Commerce and by special laws which are suppletory to the provisions of the Civil Code.

6. Rules on Passenger Baggage

Art. 1754. The provisions of Arts.1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or in that of his employees. As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel keepers shall be applicable.
Art. 1998. The deposit of effects made by travelers in hotels and inns shall also be regarded as necessary. The keepers of hotels and inns shall be responsible for them as depositaries, provided that notice was given to them, or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects.
Art. 2000. The responsibility referred to in the preceding article shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as by strangers; but not that which may proceed from any force majeure. The fact that travelers are constrained to rely on the vigilance of the keeper of the hotel or inn shall be considered in determining the degree of care required of him.
Art. 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through irresistible force.
Art. 2002. The hotelkeeper is not liable for compensation if the loss is due to the acts of the guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel.
Art. 2003. The hotelkeeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation between the hotelkeeper and the guest where the responsibility of the former as set forth in Arts. 1998 to 2001 is suppressed or diminished shall be void.
Classes of baggage of passengers.-- The law makes a distinction between (1) baggage in the custody of the passengers or their EEs; and (2) baggage not in such custody but in that of the CC.
Liability for baggage in custody of passenger.-- Art. 1754 refers to Arts. 1998, 2000- 2003 concerning the responsibility of hotel keepers. Under 1998, the baggage of passengers in their personal custody or in that of their EEs while being transported shall be regarded as necessary deposits. The CC shall be responsible for such baggage as depositaries, provided that (1) notice was given to them or to their EEs, of the baggage brought by their passengers, and that (2) the passengers take the precautions which said CCs advised relative to the care and vigilance of their baggage.
Responsibility for acts of EEs, thieves.-- Under 2000, a CC is responsible as a depositary for the loss of or injury to the baggage in the personal custody of passengers, caused by the CC's servants or EEs but not those caused by force majeure.

Under 2001, the act of a thief or robber, who has entered the CC's vehicle is not deemed force majeure, unless it is done with the use of arms or through irresistible force.

Under 2002, the CC is not liable if the loss of the baggage in the personal custody of the passenger is due to the acts of the passengers, his family, servants or visitors, OR if the loss arises from the character of the baggage.
Stipulations limiting liability.-- Under 2003, a CC cannot free himself from responsibility by posting notices to the effect that he is not liable for the baggage brought by the passengers. Any stipulation diminishing the responsibility required under 1998 to 2001 shall be void.
Liability for baggage not in custody of passenger.-- This refers to baggage delivered to the custody of the CC and received by him, to be carried in the same manner as other goods being transported by him. As the CC has custody of such baggage and are carried like any other goods, the provisions on carriage of goods shall apply (extra-ordinary diligence in the vigilance over the goods).

The moment the effects of a passenger are unconditionally placed in the possession of and received by a carrier for conveyance, the law immediately imposes on the CC extra-ordinary responsibility for the loss thereof which lasts until the actual or constructive delivery of the effects to the passenger as the person who has the right to receive them (presumption of negligence exists but may be rebutted by proof of exercise of extraordinary diligence or causes under 1734).

A CC is liable for the loss of baggage although not declared and the charges not paid, if it accepted them for transportation


C. Common Carrier of Passengers
1. Nature and extent of responsibility
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to the 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.
Art. 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 circumstances.

4 Agbayani:

Common carriers must exercise extraordinary diligence in carrying passengers.-- Art. 1755 shows clearly the high degree of care and extra-o diligence required of a CC with respect to its passengers.
Carrier's duty of extraordinary diligence extends also to crew members.-- The duty to exercise the utmost diligence on the part of CCs is for the safety of passengers as well as for the members of the crew or the complement operating the carrier. This must be so for any omission, lapse or neglect thereof will certainly result to the damage, prejudice, injuries or even death to all aboard the plane.
Cangco vs MRR, 38 Phil 768
Facts: supra. EE riding on train who stepped on watermelons.
Held: The conduct of plaintiff in undertaking to alight while the train was yet slightly underway was not characterized by imprudence and that he was not guilty of contributory negligence.

It is not negligence per se for a traveler to alight from a slowly moving train.

MRR failed to exercise due care in not providing for safe exit of its passengers. It also failed to provide adequate lighting for its station.

It is impt. to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. Its liability is direct and immediate (culpa contractual), differing essentially, from that presumptive responsibility for the negligence of its servants, which can be rebutted by proof of the exercise of due care in the selection and supervision of EEs (culpa aquiliana).

The liability of masters and employers for the negligent acts or omissions of their servants or agents, when such act or omissions cause damage which amount to the breach of a contract, is not based upon a mere presumption of the master's negligence in their selection or control, and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract. When the facts averred show a contractual undertaking by defendant for the benefit of plaintiff, and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff to specify in his pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the defendant, or of his servants or agents. Proof of the contract and of its nonperformance is sufficient prima facie to warrant recovery.

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and to provide safe means of entering and leaving its trains. That duty, being contractual, was direct and immediate, and its nonperformance could not be excused by proof that the fault was morally imputable to defendant's servants.

Strong vs Iloilo-Negros Air Express, 40 OG 269
F: Plaintiff was a passenger aboard defendant's plane en route from Iloilo to Manila. The plane's motors went dead and, notwithstanding the efforts of its pilot, it plunged into the sea and sank. The passengers and the pilot were rescued.
Held : In aviation, inevitable accident is defined as one that is not occasioned in any degree remotely or directly by want of such skill or care as the law holds for what man is bound to exercise. Airplane companies are not required to exercise all the care. Passengers necessarily should take upon the usual and ordinary perils to airplane travel. A carrier is not an insurer against all risks.

A carrier is not liable for defects of ignition cables used on his plane, nor of the installation thereof, which cables were purchased from a competent and reputable manufacturer in the absence of a showing that it knew those defects or that such kind of ignition cable is not ordinarily used on the airplane operated by it.

The doctrine of res ipsa loquitor cannot be applied when there is no proof that according to the general experience of mankind, the accident was such that it does not usually occur in the ordinary course of events without the negligence on the part of those in control.
Isaac vs A.L. Ammen Trans. Co., 101 Phil 1046
F: supra. Passenger aboard a bus who placed his left arm on the window lost his arm when the bus collided with a pick up.
Held : If the carrier's EE is confronted with a sudden emergency, he is not held to the same degree of care he would otherwise be required in the absence of such emergency.

By placing his left arm on the window, the passenger is guilty of contributory negligence, and although contributory negligence cannot relieve the carrier but can only reduce his liability (Art. 1762), this is a circumstance which militates against plaintiff's position. It is negligence per se for passengers to protrude any part of his body and that no recovery can be had for an injury.

Ratio: A CC 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 due regard for all circumstances. This extraordinary diligence required of common carriers is calculated to protect the passengers from the tragic mishaps that frequently occur in connection with rapid modern transportation. This high standard of care is imperatively demanded by the preciousness of human life and by the consideration that every person must in every way be safeguarded against all injury.

Principles as to liability of CC:

(1) The liability of a carrier is contractual and arises upon breach of its obligation; there is breach if it fails to exert extraordinary diligence accdg. to all the circumstances of each case

(2) A carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having due regard for all the circumstances

(3) A carrier is presumed to have been at fault or to have acted negligently in case of death of, 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

Landingin vs Pantranco, 33 SCRA 284
F: Plaintiffs are parents of 2 girls who were passengers on a Pantranco bus on an excursion trip from Dagupan to Baguio. The bus was open on one side. The TC found that the crossjoint of the bus broke and the bus started to roll back. Some passengers jumped out. The bus driver maneuvered the bus safely to the mountainside. Two of the girls who jumped were seriously injured and died.
Held : In Lasam vs Smith, the court held that accidents caused by defects in the automobile are not caso fortuito. The rationale is 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.

When the passenger dies or is injured, the presumption is that the CC is at fault or acted negligently. This is only rebutted by proof on the carrier's part that it observed extraordinary diligence required in Art. 1733 and the utmost diligence of very cautious persons required in Art. 1755.

It does not appear that the carrier gave due regard for all the circumstances with cross joints' inspection the day previous to the accident. The bus was heavily laden, and it would be traversing mountainous, circuitous and ascending road. Thus the entire bus would naturally be taxed more heavily than it would be under the ordinary circumstances. The mere fact that the bus was inspected only recently and found to be in order would not exempt carrier from liability unless it is shown that the particular circumstances under which the bus would travel were also considered.

Landicho vs BTC, 52 OG 764
F: Landicho boarded a BTC bus. Before he did so, the conductor helped him in placing his two baskets of chicken inside the running board. After a distance, he claimed that he noticed one cage falling and he called the conductor's attention who did not respond. He tried to fix it himself resulting in his fall in which he suffered injuries.
Held : The facts show that the cage was not about to fall. Plaintiff was probably dizzy or sleepy that he fell from the truck.

It is true that defendant being a CC is bound to transport its passengers from the point of origin to the place of destination, but the duty does not encompass all the risks attendant to a passenger in transit, for then the co. would be a good source of stipend for a family who would like to end it all by simply boarding, paying the fare and intentionally falling off. It is enough for the CC's EEs to see to it that the passenger places himself safely inside the vehicle, that it is operated carefully and that its mechanism is perfectly alright to prevent mishaps. It would be unreasonable to exact upon operators to determine beforehand whether a passenger is likely to fall dizzy or sleepy on the way, for that is the lookout of the passenger himself. A passenger must see to it that he seats himself in a safe portion of the vehicle.

Necesito vs Paras, 105 Phil 75
F: A mother and son boarded a passenger autotruck of the Phil. Rabbit Bus Lines. While entering a wooden bridge, its front wheels swerved to the right, the driver lost control and the truck fell into a creek. The mother drowned; the son was injured.

Held : While the carrier is not an insurer of the safety of the passengers, it should nevertheless be held answerable for the flaws of its equipment if such flaws were discoverable. The liability of the CC rests upon negligence or his failure to exercise the utmost degree of diligence that the law requires. The rationale of CC's liability for manufacturing defects is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the eqpt. and appliances in use by the carrier. Having no privity whatever with the manufacturer or vendor of the defective eqpt, the passenger has no remedy against him. In this case, the defect could have been detected with the exercise of utmost diligence by the CC.

2. Duration of responsibility
4 Agbayani:
When relationship of carrier and passenger terminates.-- The relation of CC and passenger does not cease at the moment that the passenger alights from the CC's vehicle at a place selected by the CC at the point of destination, but continues until the passenger had reasonable time or a reasonable opportunity to leave the CC's premises. What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances

La Mallorca vs CA, 17 SCRA 739
F: Husband and wife together with minor children boarded a La Mallorca bus. They alighted from the bus. The father returned to the bus to get their baggage. He was followed by his daughter. While the father was still on the running board awaiting for the conductor to give his baggage, the bus stated to run so that the father had to jump. His daughter was run over and was killed. The bus co. contended that when she was killed, she was no longer a passenger and the contract of carriage had terminated.
Held: Whether or not the relation between carrier and passenger does not cease at the moment the passenger alights from the carrier's premises is to be determined from the circumstances.

In this case, there was no utmost diligence. The driver stopped the bus but did not turn off the engine. He started to run the bus even before the conductor gave him the signal. The presence of passengers near the bus was not unreasonable and the duration of the responsibility still exists.

Bataclan vs Medina, 102 Phil 181
F: The bus of Medina Trans left Cavite for Pasay with 18 passengers. Around dawn, the front tires burst and the vehicles began to zigzag until it fell into a canal and turned turtle. Some passengers were able to get out while four were trapped including Bataclan. Later, 10 men came to help, one of them carrying a lighted torch, fueled by petroleum. A fire started, burning the bus and the 4 passengers. Gas had leaked when the bus overturned.
Held: The proximate cause of the death was the overturning of the vehicle which was followed by the negligence of the driver and the conductor who were on the road walking back and forth. They should have known that with the position of the bus, leakage was possible aside from the fact that gas when spilled can be smelled from a distance. The failure of the driver and conductor to have cautioned or taken steps to warn rescuers not to bring a lighted torch too near the bus constitutes negligence on the part of the agents of the carrier.

Aboitiz vs CA 179 SCRA 95
F: A farmer boarded a boat owned by Aboitiz at Mindoro bound for Manila. When the vessel arrived, Pioneer Stevedoring took over control of the cargoes loaded at the vessel and placed its crane alongside the vessel. One hour after he disembarked, he went back to get his cargo but the crane hit him and he died.
Held: Aboitiz is still liable for his death under the contract of carriage. The relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock. Once created the relationship will not ordinarily terminate until the passenger has safely alighted from the carrier's conveyance or had reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers and what is reasonable time is to be determined from all circumstances and includes a reasonable time to see after his baggage and prepare for his departure. The CC-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if the person remains in the premises to claim his baggage.

The test is the existence of a reasonable cause as will justify the presence of the passenger near the vessel.

A CC is bound to carry its passengers as far as human care and foresight can provide, using the utmost diligence of a very cautious person with due regard for all circumstances.

PAL vs CA, G.R. 82619, Sept. 1993
F: Pedro Zapatos was among 21 passengers on a PAL flight from Cebu to Ozamis. The flight was Cebu-Ozamis-Cotabato. Fifteen minutes before landing in Ozamis, the pilot received a message that the airport was closed due to heavy rains and inclement weather and that he should proceed to Cotabato City. In Cotabato, PAL informed the passengers of their options and that due to limited number of seats in the other flights, the basis for priority would be the check-in sequence at Cebu. Zapatos chose to return to Cebu but was not accommodated because he checked in as passenger no. 9. However, his personal belongings including a camera from Japan were still on board the flight to Manila. He tried to stop the departure but his plea fell on deaf ears. He was given a free ticket to Iligan City which he received under protest. He was left at the airport. PAL neither provided him with transportation from the airport to the city proper nor food and accommodation for his stay in Cotabato City. The next day, he purchased a ticket to Iligan City. He informed PAL that he would not use the free ticket because he was filing a case against PAL. His personal belongings were never recovered.

PAL denied that it unjustifiably refused to accommodate Zapatos. It alleged that there was simply no more seat for him on Flight 560 to Manila; and that there was force majeure which was a valid justification for the pilot to bypass Ozamis City and proceed directly to Cotabato City. PAL contended that it did not unjustifiably deny his demand for priority over confirmed passengers which they could not satisfy in view of the limited seats. PAL also asserted that it should not be charged with the task of looking after the passengers' comfort and convenience because the diversion of the flight was due to a fortuitous event, and that if made liable, an added burden is given to PAL which is over and beyond its duties under the contract of carriage. It argued that granting there was negligence, PAL cannot be liable in damages in the absence of fraud or bad faith.

The RTC held in favor of plaintiff. The CA affirmed.
Held: The passenger's complaint touched on PAL's indifference and inattention to his predicament and not on PAL's refusal to comply with his demand for priority over the other passengers. He claimed that he was exposed to the peril of Muslim rebels and that he suffered mental anguish, mental torture, social humiliation, besmirched reputation and wounded feeling. He referred to PAL's apathy.

The contract of air carriage is a peculiar one. Being imbued with public interest, the law requires common carriers to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances. In Air France vs Carrascoso, the SC held that the contract to transport passengers is quite different from any contractual relation in that it invites people to avail of the comforts and advantages it offers. The diversion of the flight was due to a fortuitous event. However, such did not terminate PAL's contract with its passengers. Being in the business of air carriage, PAL is deemed equipped to deal with situations like the case at bar. The relation of carrier and passenger continues until the latter has been landed at the port of destination and has left the CC's premises. Hence, PAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfort, convenience and safety of the stranded passengers until they have reached their final destination. PAL was therefore remiss in its duty of extending utmost care to Zapatos while being stranded in Cotabato City.

The CA held : "While the failure of Zapatos to reach his destination xxx in accordance with the contract of carriage was due to the closure of the airport on account of rain and inclement weather xxx it becomes the duty of PAL to provide all means of comfort and convenience to its passengers when they would have to be left in a strange place in case of such by-passing. If the cause of non-fulfillment of the contract is due to a fortuitous event, it has to be the sole and only cause. Since part of the failure to comply with the obligation to deliver its passengers safely to their destination lay in PAL's failure to provide comfort and convenience to its stranded passengers using extraordinary diligence, the cause of non-fulfillment is not solely and exclusively due to fortuitous event, but due to something that PAL could have prevented, PAL becomes liable to the passenger." However the SC found that although PAL was remiss in its duty of extending utmost care to Zapatos while being stranded in Cotabato City, there was no sufficient basis to conclude that PAL failed to inform him about his other options.

3. Presumption of negligence