Tabacalera Insurance Co. vs. North Front Shipping Services, Inc.

prove that the loss, deterioration or destruction was due to accident or some
other circumstances inconsistent with its liability.
Civil Law; Negligence; Common Carriers; Definition of a Charter-Party.—A
‘charter-party’ is defined as a contract by which an entire ship, or some Same; Same; Same; Court finds the carrier’s failure to observe the required
principal part thereof, is let by the owner to another person for a specified extraordinary diligence in the vigilance over the goods placed in its care.—In
time or use; a contract of affreightment by which the owner of a ship or other fine, we find that the carrier failed to observe the required extraordinary
vessel lets the whole or a part of her to a merchant or other person for the diligence in the vigilance over the goods placed in its care. The proofs
conveyance of goods, on a particular voyage, in consideration of the presented by North Front Shipping Services, Inc., were insufficient to rebut
payment of freight x x x x Contract of affreightment may either be time the prima facie presumption of private respondent’s negligence, more so if
charter, wherein the vessel is leased to the charterer for a fixed period of we consider the evidence adduced by petitioners.
time, or voyage charter, wherein the ship is leased for a single voyage. I n
both cases, the charter-party provides for the hire of the vessel only, either ART. 1742. Even if the loss, destruction, or deterioration of the goods
for a determinate period of time or for a single or consecutive voyage, the should be caused by the character of the goods, or the faulty nature of
ship owner to supply the ship’s store, pay for the wages of the master of the the packing or of the containers, the common carrier must exercise
crew, and defray the expenses for the maintenance of the ship. due diligence to forestall or lessen the loss.

A common carrier is required to observe extraordinary diligence in its

vigilance over the goods it transports.—North Front Shipping Services, Inc., “Defect”
is a corporation engaged in the business of transporting cargo and offers its  want or absence of something necessary for completeness or
services indiscriminately to the public. It is without doubt a common carrier. perfection;
As such it is required to observe extraordinary diligence in its vigilance over  a lack or absence of something essential to completeness;
the goods it transports. When goods placed in its care are lost or damaged,  a deficiency in something essential to the proper use for the purpose
the carrier is presumed to have been at fault or to have acted negligently. for which a thing is to be used.
North Front Shipping Services, Inc., therefore has the burden of proving that
it observed extra ordinary diligence in order to avoid responsibility for the lost “inferior”
cargo.  poor quality, mediocre, or second rate.
Extraordinary diligence requires common carriers to render service with the  A thing may be of inferior quality but not necessarily defective.
greatest skill and foresight.—The extraordinary diligence in the vigilance
over the goods tendered for shipment requires the common carrier to know
 The statement in the Bill of Lading, that the shipment was in apparent
and to follow the required precaution for avoiding damage to, or destruction
good condition, is sufficient to sustain a finding of absence of
of the goods entrusted to it for safe carriage and delivery. It requires
defects in the merchandise.
common carriers to render service with the greatest s kill and foresight and
 Case law has it that such statement will create a prima facie
‘to use all reasonable means to ascertain the nature and characteristics of
presumption only as to the external condition and not to that not open
goods tendered for shipment, and to exercise due care in the handling and
stowage, including s uch methods as their nature requires. to inspection.

Mere proof of delivery of the goods in good order to a common carrier, and  For this provision to apply, the rule is that if the improper packing
of their arrival at the place of destination in bad order, makes out prima facie or, in this case, the defect/s in the container, is/are known to the
case against the common carrier.—Mere proof of delivery of the goods in carrier or his employees or apparent upon ordinary observation,
good order to a common carrier, and of their arrival at the place of but he nevertheless accepts the same without protest or exception
destination in bad order, makes out prima facie case against the common notwithstanding such condition, he is not relieved of liability for
carrier, so that if no explanation is given as to how the loss, deterioration or damage resulting therefrom.
destruction of the goods occurred, the common carrier must be held
responsible. Otherwise stated, it is incumbent upon the commoncarrier to
  Even if the fact of improper packing was known to the carrier or its
crew or was apparent upon ordinary observation, it is not relieved of Presumption that petitioner acted negligently for his failure to show that the
liability for loss or injury resulting therefrom, once it accepts the goods loss of the goods was due to causes under Art. 1734 of the Civil Code;
notwithstanding such condition. Effect of the presumption; Failure of petitioner to prove the exercise of
extraordinary diligence.—Hence, the petitioner is presumed to have been at
 This extraordinary responsibility lasts from the time the goods are fault or to have acted negligently. By reason of this presumption, the court is
unconditionally placed in the possession of, and received by the not even required to make an express finding of fault or negligence before it
carrier for transportation until the same are delivered, actually or could hold the petitioner answerable for the breach. of the contract of
constructively, by the carrier to the consignee, or to the person who carriage, Still, the petitioner could have been exempted from any liability had
has a right to receive them. he been able to prove that he observed extraordinary diligence in the
vigilance over the goods in his custody, according to all the circumstances of
ART. 1743. If through the order of public authority the goods are seized the case, or that the loss was due to an unforeseen event or to force
or destroyed, the common carrier is not responsible, provided said majeure. As it was, there was hardly any attempt on the part of the petitioner
public authority had power to issue the order. to prove that he exercised such extraordinary diligence.

 The power to issue the order of the public authority is evidentiary in Loss of the scraps not due to caso fortuito.—We cannot sustain the theory of
nature. caso fortuito. In the courts below, the petitioner’s defense was that the loss
 to exempt the common carrier from any liability it is incumbent upon of the scraps was due to an “order or act of competent public authority,” and
the common carrier to prove that the public authority had the power to this contention was correctly passed upon by the Court of Appeals.
issue that order.
Change of theory on appeal, not allowed; Intervention of municipal officials,
not of a character that would render impossible the fulfillment by the carrier
Intervention of municipal officials, not of a character that would render of its obligations.—Now the petitioner is changing his theory to caso fortuito.
impossible the fulfillment by the carrier of its obligations. Such a change of theory on appeal we cannot, however, allow. In any case,
the intervention of the municipal officials was not of a character that would
Ganzon vs. Court of Appeals render impossible the fulfillment by the carrier of its obligation. The petitioner
was not duty bound to obey the illegal order to dump into the sea the scrap
Civil Law; Obligations; Contracts; Common Carriers; Perfection of contract of iron. Moreover, there is absence of sufficient proof that the issuance of the
carriage; Extraordinary responsibility of carrier for loss, destruction or same order was attended with such force or intimidation as to completely
deterioration of the goods, when it commences and ceases.—By the said act overpower the will of the petitioner’s employees. The mere difficulty in the
of delivery, the scraps were unconditionally placed in the possession and fulfillment of the obligation is not considered force majeure. We agree with
control of the common carrier, and upon their receipt by the carrier for the private respondent that the scraps could have been properly unloaded at
transportation, the contract of carriage was deemed perfected. the shore or at the NASSCO compound, so that after the dispute with the
Consequently, the petitioner-carrier’s extraordinary responsibility for the loss, local officials concerned was settled, the scraps could then be delivered in
destruction, or deterioration of the goods commenced, Pursuant to Art. 1736, accordance with the contract of carriage.
such extraordinary responsibility would cease only upon the delivery, actual
or constructive, by the carrier to the consignee, or to the person who has a Absence of incompatibility between the provisions on common carriers and
right to receive them. The fact that part of the shipment had not been loaded of the Code of Commerce; Articles 1734 and 1735 of the Civil Code,
on board the lighter did not impair the said contract of transportation as the interpreted; Requirement for the exercise of carrier of ordinary diligence,
goods remained in the custody and control of the carrier, albeit still deemed modified by Art. 1733 of the Civil Code.—There is no incompatibility
unloaded. between the Civil Code provisions on common carriers and Articles 361 and
362 of the Code of Commerce which were the basis for this Court’s ruling in
The petitioner has failed to show that the loss of the scraps was due to any Government of the Philippine Islands vs. Ynchausti & Co. and which the
of the following causes enumerated in Article 1734 of the Civil Code. petitioner invokes in this petition. For Art. 1735 of the Civil Code, conversely
stated, means that the shipper will suffer the losses and deterioration arising
from the causes enumerated in Art. 1734; and in these instances, the burden or of robbers who do not act with grave or irresistible threat,
of proving that damages were caused by the fault or negligence of the violence or force, is dispensed with or diminished;
carrier rests upon him. However, the carrier must first establish that the loss (7) That the common carrier is not responsible for the loss,
or deterioration was occasioned by one of the excepted causes or was due destruction, or deterioration of goods on account of the defective
to an unforeseen event or to force majeure. Be that as it may, insofar as Art. condition of the car, vehicle, ship, airplane or other equipment used
362 appears to require of the carrier only ordinary diligence, the same is in the contract of carriage.
deemed to have been modified by Art. 1733 of the Civil Code.

Damages; Award of actual and exemplary damages, proper, as they were A stipulation that the cargo was being shipped at “owner’s risk” is null
not sufficiently controverted.—Finding the award of actual and exemplary and void and contrary to public policy.
damages to be proper, the same will not be disturbed by us. Besides, these
were not sufficiently controverted by the petitioner. Loadstar Shipping Co., Inc. vs. Court of Appeals,

Contracts; Common Carriers; Damages; The law imposes duties and

ART. 1744. A stipulation between the common carrier and the shipper liabilities upon common carriers for the safety and protection of those who
or owner limiting the liability of the former for the loss, destruction, or utilize their services and the law cannot allow a common carrier to render
deterioration of the goods to a degree less than extraordinary diligence such duties and liabilities merely facultative by simply failing to obtain the
shall be valid, provided it be: necessary permits and authorizations.—The Court of Appeals referred to the
(1) In writing, signed by the shipper or owner; fact that private respondent held no certificate of public convenience, and
(2) Supported by a valuable consideration other than the service concluded he was not a common carrier. This is palpable error. A certificate
rendered by the common carrier; and of public convenience is not a requisite for the incurring of liability under the
(3) Reasonable, just and not contrary to public policy. Civil Code provisions governing common carriers. That liability arises the
moment a person or firm acts as a common carrier, without regard to
 The writing material referred to in paragraph (1) is not specified, whether or not such carrier has also complied with the requirements of the
hence, it can be on paper or other substitute writing material as the applicable regulatory statute and implementing regulations and has been
law does not distinguished. granted a certificate of public convenience or other franchise. To exempt
 Under paragraph No. (2), the valuable consideration can be the lesser private respondent from the liabilities of a common carrier because he has
fare or freightage chargeable to the shipper or owner of the goods. not secured the necessary certificate of public convenience, would be
Discounts are likewise valuable consideration. offensive to sound public policy; that would be to reward private respondent
precisely for failing to comply with applicable statutory requirements. The
ART. 1745. Any of the following or similar stipulations shall he business of a common carrier impinges directly and intimately upon the
considered unreasonable, unjust and contrary to public policy: safety and well being and property of those members of the general
(1) That the goods are transported at the risk of the owner or community who happen to deal with such carrier. The law imposes duties
shipper; and liabilities upon common carriers for the safety and protection of those
(2) That the common carrier will not be liable for any loss, who utilize their services and the law cannot allow a common carrier to
destruction, or deterioration of the goods; render such duties and liabilities merely facultative by simply failing to obtain
(3) That the common carrier need not observe any diligence in the the necessary permits and authorizations.
custody of the goods;
(4) That the common carrier shall exercise a degree of diligence less Same; For a vessel to be seaworthy, it must be adequately equipped for the
than that of a good father of a family, or of a man of ordinary voyage and manned with a sufficient number of competent officers and
prudence in the vigilance over the movables transported; crew.—Moving on to the second assigned error, we find that the M/V
(5) That the common carrier shall not be responsible for the acts or “Cherokee” was not seaworthy when it embarked on its voyage on 19
omissions of his or its employees; November 1984. The vessel was not even sufficiently manned at the time.
(6) That the common carrier’s liability for acts committed by thieves, “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 seaworthy condition its between one whose principal business activity is the carrying of persons or
vessel involved in a contract of carriage is a clear breach of its duty goods or both, and one who does such carrying only as an ancillary activity
prescribed in Article 1755 of the Civil Code.” (in local idiom, as “a sideline”). Article 1732 also carefully avoids making any
distinction between a person or enterprise offering transportation service on
Since it was remiss in the performance of its duties, LOADSTAR cannot hide a regular or scheduled basis and one offering such service on an occasional,
behind the “limited liability” doctrine to escape responsibility for the loss of episodic or unscheduled basis. Neither does Article 1732 distinguish
the vessel and its cargo.—Neither do we agree with LOADSTAR’s argument between a carrier offering its services to the “general public,” i.e., the general
that the “limited liability” theory should be applied in this case. The doctrine community or population, and one who offers services or solicits business
of limited liability does not apply where there was negligence on the part of only from a narrow segment of the general population. We think that Article
the vessel owner or agent. LOADSTAR was at fault or negligent in not 1733 deliberately refrained from making such distinctions.
maintaining a seaworthy vessel and in having allowed its vessel to sail
despite knowledge of an approaching typhoon. In any event, it did not sink The concept of “common carrier” under Art. 1732 coincides with the notion of
because of any storm that may be deemed as force majeure, inasmuch as “Public Service” under the Public Service Act (CA No. 1416).—So
the wind condition in the area where it sank was determined to be moderate. understood, the concept of “common carrier” under Article 1732 may be
Since it was remiss in the performance of its duties, LOADSTAR cannot hide seen to coincide neatly with the notion of “public service,” under the Public
behind the “limited liability” doctrine to escape responsibility for the loss of Service Act (Commonwealth Act No. 1416, as amended) which at least
the vessel and its cargo. partially supplements the law on common carriers set forth in the Civil Code.
Under Section 13, paragraph (b) of the Public Service Act, “public service”
A stipulation reducing the one-year period for filing the action for recovery is includes: “x x x every person that now or hereafter may own, operate,
null and void and must be struck down.—Neither is there merit to the manage, or control in the Philippines, for hire or compensation, with general
contention that the claim in this case was barred by prescription. MIC’s or limited clientele, whether permanent, occasional or accidental, and done
cause of action had not yet prescribed at the time it was concerned. for general business purposes, any common carrier, railroad, street railway,
Inasmuch as neither the Civil Code nor the Code of Commerce states a traction railway, subway motor vehicle, either for freight or passenger, or
specific prescriptive period on the matter, the Carriage of Goods by Sea Act both, with or without fixed route and whatever may be its classification,
(COGSA)—which provides for a one-year period of limitation on claims for freight or carrier service of any class, express service, steamboat, or
loss of, or damage to, cargoes sustained during transit—may be applied steamship line, pontines, ferries and water craft, engaged in the
suppletorily to the case at bar. This one-year prescriptive period also applies transportation of passengers or freight or both, shipyard, marine repair shop,
to the insurer of the goods. In this case, the period for filing the action for wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas,
recovery has not yet elapsed. Moreover, a stipulation reducing the one-year electric light, heat and power, water supply and power petroleum, sewerage
period is null and void; it must, accordingly, be struck down. system, wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services. x x x.”

Under Article 1745(6), a common carrier is held responsible even for A certificate of public convenience is not a requisite for the incurring of
acts of strangers like thieves or robbers except where such thieves or liability under the Civil Code provisions governing common carriers.—The
robbers acted “with grave or irresistible threat, violence or force.” Court of Appeals referred to the fact that private respondent held no
certificate of public convenience, and concluded he was not a common
De Guzman vs. Court of Appeals carrier. This is palpable error. A certificate of public convenience is not a
Common Carriers; Definition of; Art. 1732 of the Civil Code makes no requisite for the incurring of liability under the Civil Code provisions
distinctions between a person or enterprise offering transportation service on governing common carriers. That liability arises the moment a person or firm
a regular or scheduled basis and such service on an occasional, episodic or acts as a common carrier, without regard to whether or not such carrier has
unscheduled basis.—The Civil Code defines “common carriers” in the also complied with the requirements of the applicable regulatory statute and
following terms: “Article 1732. Common carriers are persons, corporations, implementing regulations and has been granted a certificate of public
firms, or associations engaged in the business of carrying or transporting convenience or other franchise. To exempt private respondent from the
passengers or goods or both, by land, water, or air for compensation, liabilities of a common carrier because he has not secured the necessary
offering their services to the public.” The above article makes no distinction certificate of public convenience, would be offensive to sound public policy;
that would be to reward private respondent precisely for failing to comply duty of extraordinary diligence in the vigilance over goods is, under Article
with applicable statutory requirements. The business of a common carrier 1733, given additional specification not only by Articles 1734 and 1735 but
impinges directly and intimately upon the safety and well being and property also by Article 1745, numbers 4, 5 and 6. Article 1745 provides in relevant
of those members of the general community who happen to deal with such part: “Any of the following or similar stipulations shall be considered
carrier. The law imposes duties and liabilities upon common carriers for the unreasonable, unjust and contrary to public policy: xxx xxx xxx (5) that the
safety and protection of those who utilize their services and the law cannot common carrier shall not be responsible for the acts or omissions of his or its
allow a common carrier to render such duties and liabilities merely employees; (6) that the common carrier’s liability for acts committed by
facultative by simply failing to obtain the necessary permits and thieves, or of robbers who do not act with grave or irresistible threat,
authorizations. violence or force, is dispensed with or diminished; and (7) that the common
carrier shall not responsible for the loss, destruction or deterioration of goods
Liability of common carriers in case of loss, destruction or deterioration or on account of the defective condition of the car, vehicle, ship, airplane or
destruction of goods they carry; Extraordinary diligence, required; other equipment used in the contract of carriage.” Under Article 1745 (6)
Exceptions.—Common carriers, “by the nature of their business and for above, a common carrier is held responsible and will not be allowed to divest
reasons of public policy,” are held to a very high degree of care and or to diminish such responsibility—even for acts of strangers like thieves or
diligence (“extraordinary diligence”) in the carriage of goods as well as of robbers, except where such thieves or robbers in fact acted “with grave or
passengers. The specific import of extraordinary diligence in the care of irresistible threat, violence or force.” We believe and so hold that the limits of
goods transported by a common carrier is, according to Article 1733, “further the duty of extraordinary diligence in the vigilance over the goods carried are
expressed in Articles 1734, 1735 and 1745, numbers 5, 6 and 7” of the Civil reached where the goods are lost as a result of a robbery which is attended
Code. Article 1734 establishes the general rule that common carriers are by “grave or irresistible threat, violence or force.”
responsible for the loss, destruction or deterioration of the goods which they
carry, “unless the same is due to any of the following causes only: (1) Flood, Grave and irresistible force must be proved in cases of hijacking.
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 Bascos vs. Court of Appeals
the shipper or owner of the goods; (4) The character of the goods or defects
in the packing or in the containers; and (5) Order or act of competent public Civil Law; Common Carriers defined.—Article 1732 of the Civil Code defines
authority.” It is important to point out that the above list of causes of loss, a common carrier as “(a) person, corporation or firm, or association engaged
destruction or deterioration which exempt the common carrier for in the business of carrying or transporting passengers or goods or both, by
responsibility therefor, is a closed list. Causes falling outside the foregoing land, water or air, for compensation, offering their services to the public.”
list, even if they appear to constitute a species of force majeure, fall within The test to determine a common carrier is “whether the given undertaking is
the scope of Article 1735. a part of the business engaged in by the carrier which he has held out to the
general public as his occupation rather than the quantity or extent of the
The hijacking of the carriers truck does not fall within any of the five (5) business transacted.” In this case, petitioner herself has made the admission
categories of exempting causes in Art. 1734.—Applying the above-quoted that she was in the trucking business, offering her trucks to those with cargo
Articles 1734 and 1735, we note firstly that the specific cause alleged in the to move. Judicial admissions are conclusive and no evidence is required to
instant case—the hijacking of the carrier’s truck—does not fall within any of prove the same.
the five (5) categories of exempting causes listed in Article 1734. It would
follow, therefore, that the hijacking of the carrier’s vehicle must be dealt with Same; Same; No distinction between person offering service on regular
under the provisions of Article 1735, in other words, that the private basis and one offering service on occasional basis.—But petitioner argues
respondent as common carrier is presumed to have been at fault or to have that there was only a contract of lease because they offer their services only
acted negligently. This presumption, however, may be overthrown by proof to a select group of people and because the private respondents, plaintiffs in
of extraordinary diligence on the part of private respondent. the lower court, did not object to the presentation of affidavits by petitioner
where the transaction was referred to as a lease contract. Regarding the first
Under Art. 1745(6), a common carrier is held responsible even for acts of contention, the holding of the Court in De Guzman vs. Court of Appeals is
strangers like thieves or robbers except where such thieves or robbers acted instructive. In referring to Article 1732 of the Civil Code, it held thus: “The
“with grave or irresistible threat, violence or force.”—As noted earlier, the above article makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such the rule on the liability of carriers for defects of equipment is thus expressed:
carrying only as an ancillary activity (in local idiom, as a “sideline”). Article “The preponderance of authority is in favor of the doctrine that a passenger
1732 also carefully avoids making any distinction between a person or is entitled to recover damages from a carrier for an injury resulting from a
enterprise offering transportation service on a regular or scheduled basis defect in an appliance purchased from a manufacturer, whenever it appears
and one offering such service on an occasional, episodic or unscheduled that the defect would have been discovered by the carrier if it had exercised
basis. Neither does Article 1732 distinguish between a carrier offering its the degree of care which under the circumstances was incumbent upon it,
services to the “general public,” i.e., the general community or population, with regard to inspection and application of the necessary tests. For the
and one who offers services or solicits business only from a narrow segment purposes of this doctrine, the manufacturer is considered as being in law the
of the general population. We think that Article 1732 deliberately refrained agent or servant of the carrier, as far as regards the work of constructing the
from making such distinctions.” appliance. According to this theory, the good repute of the manufacturer will
not relieve the carrier from liability.
Obligation of carrier to observe extraordinary diligence; Presumption of
negligence.—Common carriers are obliged to observe extraordinary The rationale of the carrier’s liability is the fact that the passenger has
diligence in the vigilance over the goods transported by them. Accordingly, neither choice nor control over the carrier in the selection and use of the
they are presumed to have been at fault or to have acted negligently if the equipment and appliances in use by the carrier. Having no privity whatever
goods are lost, destroyed or deteriorated. There are very few instances with the manufacturer or vendor of the defective equipment, the passenger
when the presumption of negligence does not attach and these instances has no remedy against him, while the carrier usually has. It is but logical,
are enumerated in Article 1734. In those cases where the presumption is therefore, that the carrier, while not an insurer of the safety of his
applied, the common carrier must prove that it exercised extraordinary passengers, should nevertheless be held to answer for the flaws of his
diligence in order to overcome the presumption. equipment if such flaws were at all discoverable.

Same; Same; Same; Liability arising from hijacking.—To exculpate the In the case now before us, the record is to the effect that the only test
carrier from liability arising from hijacking, he must prove that the robbers or applied to the steering knuckle in question was a purely visual inspection
the hijackers acted with grave or irresistible threat, violence, or force. This is every 30 days, to see if any cracks developed. It nowhere appears that
in accordance with Article 1745 of the Civil Code which provides: “Art. 1745. either the manufacturer or the carrier at any time tested the steering knuckle
Any of the following or similar stipulations shall be considered unreasonable, to ascertain whether its strength was up to standard, or that it had no hidden
unjust and contrary to public policy: x x x x x x (6) That the common carrier’s flaws that would impair that strength. And yet the carrier must have been
liability for acts committed by thieves, or of robbers who do not act with aware of the critical importance of the knuckle’s resistance; that its failure or
grave or irresistible threat, violence or force, is dispensed with or breakage would result in loss of balance and steering control of the bus, with
diminished.” disastrous effects upon the passengers. No argument is required to
establish that a visual inspection could not directly determine whether the
A carrier is liable to its passengers for damages caused by mechanical resistance of this critically important part was not impaired. Nor has it been
defects of the conveyance. shown that the weakening of the knuckle was impossible to detect by any
known test; on the contrary, there is testimony that it could be detected. We
Prescillano Necesito, etc. v. Natividad Paras are satisfied that the periodical visual inspection of the steering knuckle as
RULING: practiced by the carrier’s agents did not measure up to the required legal
“Art. 1755. A common carrier is bound to carry the passengers safely as far standard of “utmost diligence of very cautious persons” — “as far as human
as human care and foresight can provide, using the utmost diligence of very care and foresight can provide,” and therefore that the knuckle’s failure
cautious persons, with a due regard for all the circumstances.” cannot be considered a fortuitous event that exempts the carrier from
It is clear that the carrier is not an insurer of the passenger’s safety. His responsibility.
liability rests upon negligence, his failure to exercise the “utmost” degree of
diligence that the law requires, and by Art. 1756, in case of a passenger’s
death or injury the carrier bears the burden of satisfying the court that he has
duly discharged the duty of prudence required. In American law, where the
carrier is held to the same degree of diligence as under the new Civil Code,
Case: PRESCILLANO NECESITO VS. NATIVIDAD PARAS  The public, must of necessity, rely on the care and skill of common
carriers in vigilance over the goods and safety of the passengers,
 Article 1755. especially because with the modern developments of science and
invention, transportation has become more rapid, more complicated,
A common carrier is bound to carry the passengers safely as far as and somehow more hazardous. For these reasons, a passenger or a
human care and foresight can provide, using the utmost diligence of very shipper of goods is under no obligation to conduct an inspection of the
cautious persons, with due regard for all the circumstances ship and its crew being obliged by law to impliedly warrant its
seaworthiness.
 An insurer is not an insurer of the passenger’s safety. His liability rests
upon negligence, his failure to exercise the “utmost” degree of diligence ART. 1746 — An agreement limiting the common carrier’s liability may
that the law requires, and by Art. 1756, in case of a passenger’s death be annulled by the shipper or owner if the common carrier refused to
or injury the carrier bears the burden of satisfying that he has duly carry the goods unless the former agree to such stipulation.
discharged the duty of prudence required.

 The rationale of the carrier’s liability is the fact that the passengers has
neither control nor choice over the carrier in the selection of the The contract here limiting the liability of the common carrier is merely
equipment and appliances in use by the carrier. Having no privity voidable and not void in view of the intimidation or undue influence exerted by
whatever with the manufacturer or vendor of the defective equipment, the common carrier or his agent
the passenger has no remedy against him, while the carrier usually has.
It is but logical, therefore, that that the carrier, while not an insurer of the ART. 1747 — If the common carrier, without just cause, delays the
safety of his passengers, should nevertheless be held to answer for the transportation of the goods or changes the stipulated or usual route,
flaws of the equipment if such flaws were at all discoverable. the contract limiting the common carrier’s liability cannot be availed
of in case of the loss, destruction, or detoriaration of the goods.
 We are satisfied that the periodical visual inspection of the steering
knuckle as practice by the carrier’s agents did not measure up to the Rule on Carrier’s Liability for Delay
required legal standard of “utmost diligence of very cautious persons”—
as far as human care and foresight can provide. GENERAL RULE: In the absence of a special contract, a carrier is not an
insurer against delay in transportation of goods. When a common carrier
Case: VECTOR SHIPPING CORPORATION AND FRANCISCO undertakes to convey goods, the law implies a contract that they shall be
SORIANO VS. ADELFO B. MACASA, ET.AL delivered at destination within a reasonable time, in the absence of any
agreement as to the time of delivery.
 MT Vector fits the definition of common carrier. Thus, the carriers are
deemed to warrant impliedly the seaworthiness of the ship. For a vessel EXCEPTION: Where a carrier has made an express contract to transport
to be seaworthy, it must be adequately equipped for the voyage and and deliver property within a specified time, it is bound to fulfill its contract
manned with a sufficient number of competent officers and crew. The and is liable for any delay, no matter from what cause it may have arisen.
failure of a common carrier to maintain in seaworthy condition involved
in its contract of carriage is a clear breach of its duty under Art. 1755 of
the Civil Code.
ART. 1748 —An agreement limiting the common carrier’s
liability for delay on account of strikes or riots is valid.
 Above article does not distinguish whether strike is legal or illegal and is Case: EVERETT STEAMSHIP CORPORATION VS. COURT OF APPEALS
assumed to apply to both since there is no universal acceptance that AND HERNANDEZ TRADING CO.
riots are legal.
 A stipulation in the bill of lading limiting the common carrier’s liability for
loss or destruction of the cargo to a certain sum, unless the shipper or
ART. 1749 — A stipulation that the common carriers liability is limited to owner declares a greater value, is sanctioned by law.
the value of good appearing in the bill of lading, unless the shipper or
owner declares a greater value, is binding.  The trial’s court rationication that private respondent could not have
fairly and freely agreed to the limited liability clause in the bill of lading
because the said conditions were printed in small letters does not make
the bill of lading invalid.
ART. 1750 — A contract fixing the sum that may be recovered by the
owner or shipper for the loss, destruction, or deterioration of the good is
Case: SUMMA INSURANCE CORPORATION VS. COURT OF APPEALS
valid, if it is reasonable and just under the circumstances, and has been
AND METRO PORT SERVICE INC.
fairly and freely agreed upon.

 Petitioner was subrogated to the rights of the consignee. The

Two Conditions under Art. 1749 relationship therefore between the consignee and the operator
1.) The contract is reasonable and just under the circumstances must be examined. This relationship is much akin to that of
2.) Said contract has been fairly and freely agreed upon by the parties consignee or owner of shipped goods and the common carrier, or
that between a depositor and a warehouseman. Thus, in the
note: The Civil Code does not limit the liability of the common carrier to performance of its obligations, an arrastre operator should observe
a fixed amount per package. In all matters not regulated by the Civil the same degree of diligence as that required of a common carrier
Code, the right and the obligation of a common carrier shall be and warehouseman under Art. 1733 of the Civil Code and Sec. 3(b)
governed by the Code of Commerce and Special Laws. of the Warehouse Receipts Law.

A stipulation in a contract of carriage that the carrier will not be liable  Private respondent is liable for the loss
beyond a specified amount is generally deemed to be valid and will
operate to limit the carrier’s liability.
ART. 1751 — The fact that the common carrier has no competitor
Under this stipulation, it is the duty of the shipper to disclose, rather along the line or route or a part thereof, to which the contract refers
than the carrier’s to demand the true value of the gods and silence on shall be taken into consideration on the question of whether or not a
the part of the shipper will be sufficient to limit recovery in case of loss stipulation limiting the common carrier’s liability is reasonable, just
to the amount stated in the contract. 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.
Note: a stipulation of the parties limiting the common carrier’s liability in
vigilance over the goods is not an exception enumerated under Article 1735

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.

Note: if the goods were never transported then clearly this provision would
not apply

Case: EASTERN SHIPPING LINES INC. VS. INTERMEDIATE

APPELLATE COURT AND DEV’T INSURANCE AND SURETY CORP.

 The law of the country to which the goods are to be transported governs
the liability of the common carrier in case of their loss, destruction or
deterioration. As the cargoes in question were transported from Japan
to the Philippines, the liability of the petitioner carrier is governed
primarily by the Civil Code.

Art. 1754 — The provisions of Articles 1733 to 1753 shall apply to

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.