Chapter 4

Defenses of Common Carrier

The carrier is not the insurer of the lives of his passengers or the absolute safety of the goods. What is
required is exercise of extraordinary diligence. The carrier's liability rests upon its failure to exercise the
extraordinary degree of diligence that the law requires. The burden of proof is on common carrier to
prove that he exercised extraordinary degree of diligence.

Kinds of defenses

- It may totally limit or mitigate liability

- Totally limit – if due to fortuitous event
- Will mitigate - Contributory Negligence and the Avoidable Consequences Rule. Valid stipulations
may also limit the liability

Proximate Causation

- Not applicable in common carrier because presumption arises upon the happening of accident.
- The common carrier is presumed negligent the moment he fails to deliver the goods to its
destination or the moment the passenger did not reach his destination while riding the carrier.
- However, absence of causal connection can be used as a defense.
- The passenger or the shipper has no burden of proving that his injury was caused by the
negligent or intentional act or omission of the carrier or his agents. However, the common
carrier may prove by way of defense that the loss or damage cannot be traced to any act of the
said carrier but the proximate and only cause of the loss is any of the circumstances mentioned
in Article 1734 of the New Civil Code.

Defenses in Carriage of Goods

Pertinent provisions:

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: FAPCO

(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.

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.

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.
What are the defenses that can be used by common carriers of goods?

(1) Flood, storm, earthquake, lightning and other natural disaster and calamity;
(2) Acts of the public enemy at 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 the competent authority; and
(6) Exercise of extraordinary diligence.

NOTE: No other defense can be used by the common carrier. This list is EXCLUSIVE. If not one of the
mentioned is present the carrier is liable.

For all other cases not enumerated under Article 1734 such as theft or robbery a common carrier is
presumed to have been at fault or to have acted negligently, unless it can prove that it observed
extraordinary diligence.

Defenses in Common carriage of passengers

- Exercise of extraordinary diligence may be used as a defense. However, article 1756 still applies.
- 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.
- Defense of exercise of due diligence is not available in breach of contract but only in quasi-delict

Fortuitous event

- To be a valid defense, it must be proved that it is the proximate cause of loss

- Fortuitous event – events which cannot be foreseen or although foreseen, are inevitable.

Requisites of fortuitous event - IIIF

(1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the human will.
(2) It must be impossible to foresee the event that constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid.
(3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a
normal manner.
(4) The obligor (debtor) must be free from any participation in or the aggravation of the injury
resulting to the creditor.
a. Common carrier will be excused only when natural disaster is the proximate and only
cause of loss
b. 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.
Fire - Broadly speaking, force majeure generally applies to a natural accident, such as that caused by a
lightning, an earthquake, a tempest, or a public enemy. Hence, fire is not considered a natural disaster
or calamity.

Storm - However, there may be cases when strong winds may be unforeseeable. Hence, in one case, the
carrier was not made liable because the proximate and only cause of the loss was unforeseeable strong
winds and enormous waves.

Hijacking - Under Article 1745(6) of the New Civil Code, a common carrier is held responsible and will
not be allowed to divest or to diminish such responsibility even for acts of strangers like thieves or
robbers, except where such thieves or robbers in fact acted "with grave or irresistible threat, violence
or force." A stipulation diminishing or dispensing with the common carrier's liability for acts committed
by thieves or robbers who do not act with grave or irresistible threat, violence, or force is void under
Article 1745 of the Civil Code for being contrary to public policy.

The Supreme Court clarified that theft or robbery of the goods is not considered a fortuitous event or a
force majeure. Nevertheless, a common carrier may absolve itself of liability for a resulting loss:

(1) if it proves that it exercised extraordinary diligence in transporting and safekeeping the goods;
or
(2) if it stipulated with the shipper/owner of the goods to limit its liability for the loss, destruction,
or deterioration of the goods to a degree less than extraordinary diligence.

That exception under Article 1745 means that a robbery attended by "grave or irresistible threat,
violence or force" is a fortuitous event that absolves the common carrier from liability.

Mechanical Defects - Damage or injury that can be traced to mechanical defects is not a damage or
injury that is caused by fortuitous event.

However, the Supreme Court seems to say that the carrier can still claim that mechanical defects may, in
proper cases, be considered caso fortuito if adequate inspection is made. It is important, however, that
the periodic tests must be adequate. Thus, the carrier cannot escape liability by the mere proof that it
recently inspected the vehicle.

Tire blowouts – Not a fortuitous event, also considered as mechanical defects

Other invalid defense

The common carrier cannot likewise invoke explosion, the presence of worm and rats, water damage,
and barratry.

Barratry. The shipowner cannot escape liability to third persons if the cause of damage is barratry. It is
an act committed by the master or crew of the ship for some unlawful or fraudulent purpose , contrary
to their duty to the owner. Intentional fraud or breach of trust or willful violation of law is necessary to
constitute barratry. Barratry includes theft by the purser of a specie shipped on board and fraudulently
running the ship ashore.

Public enemy
"The term 'public enemy,' in its general acceptation pre-supposes the existence of an actual state of
war, and refers to the government of a foreign nation at war with the country to which the carrier
belongs, though not necessarily with that to which the owner of the goods owes Thieves, rioters,
robbers, and insurrectionists, though at war with social order, are not in a legal sense classed as public
enemies, but are merely private depredators for whose acts a carrier is answerable.

Notes:

- the state against which the country is at war in the country of the carrier. It does not refer to
the country of the owner or shipper of the goods
- Acts of rebels are also included because the provision includes civil war
- Pirates are exception to this rule, they are considered as enemies of all civilized nations. Even
when pirates are not declared as public enemy or even when the country is not at war.
- in order that the common carrier may be exempted from responsibility, the act of the public
enemy must have been the proximate and only cause of the loss. The same provision also
requires that the common carrier must exercise due diligence to prevent or minimize loss
before, during, and after the performance of the act of the public enemy in order that the
common carrier may be exempted from liability for the loss, destruction, or deterioration of the
goods.

Nature of goods and improper packing

The Carriage of Goods by Sea Act provides that the carrier shall not be liable for:

- wastage in bulk or weight or any other loss or damage

- latent arising from inherent defect, quality or vice of goods;
- insufficiency of packing
- insufficiency or inadequacy of the marks; or defects not discoverable by due diligence.

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.

Notes:

- The carrier is not responsible if the loss occurs because of the inherent nature of the shipment.
This applies even to hand carried baggage.
- It is also the rule that if the carrier accepts the goods knowing the fact of improper packing of the
goods upon ordinary observation or notwithstanding such condition, it is not relieved of liability
for loss or injury resulting therefrom.
- The carrier must receive the goods under protest; the cargo acceptance with reservation regarding
such defect which must be duly noted in the bill of lading. If the carrier accepted the goods
without reservation or without protest with respect to the alleged defective package, it can be
inferred that there was no damage to the package at the time of acceptance of the cargo. The
same is true if the carrier issued a "clean bill of lading.""

Order of Public Authority

An order of a public authority may be used to excuse liability only if the public authority who issued the
order is duly authorized to issue the order as provided for in the proviso in Article 1743. Hence, the
defense is not available if: (1) the public authority has no authority to issue the subject order; or (2) if
the public authority exceeded his authority.

Defenses in carriage of passengers

- The primary defense of CC is the exercise of extraordinary diligence. Even when there is a
fortuitous event, they must present proof of extraordinary diligence.

Acts of Employees

The carrier is liable for the acts of its employees. Unlike in quasi-delict, the carrier cannot escape
liability by claiming that he exercised due diligence in the selection and supervision of the employee.

Pertinent provision:

Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful 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.

Passenger has no duty to inquire

By express provision of Article 1759, it is no defense that the employee acted beyond the scope of his
authority because the riding public is not expected to inquire from time to time before they board the
carrier whether or not the driver or any other employee is authorized to drive the vehicle or that said
driver is acting within the scope of his authority and observing the existing rules and regulations
required of him by management.

Theft by employees

Willful acts of the employees include theft. It should be pointed out that the Code of Commerce
expressly provides that the captain shall be civilly liable to the naviero and the latter to third persons for
all the thefts committed by the crew, reserving the right of action against the guilty party." The Civil
Code does not change the rule and the same is in fact further reinforced by the duty to exercise
extraordinary diligence.

Acts of other passenger and third person

With respect to acts of strangers and other passengers resulting in injury to a passenger, the availability
of such defense is also subject to the exercise of a carrier of due diligence to prevent or stop the act or
omission.

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
willful 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.
Note:

(1) Defense that the third party caused the death is not available if the carrier’s driver allowed the third
person to drive the vehicle
(2) In other words, the negligence of the carrier need not be the sole cause of the damage or injury to
the passenger or the goods. The carrier would still be liable even if the contractual breach concurs
with the negligent act or omission of another person.

Acts of shipper or the passenger

- If the act or omission of the shipper or owner of the goods or the passenger is the proximate and
only cause of the damage, then the common carrier is not liable.

CONTRIBUTORY NEGLIGENCE OF THE SHIPPER.

Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the
harm he has suffered, which falls below the standard to which he is required to conform for his own
protection." Contributory negligence on the part of the shipper in not a defense that will excuse the
carrier from liability. It will only mitigate such liability.

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.

CONTRIBUTORY NEGLIGENCE OF PASSENGER.

With respect to carriage of passengers, the said passengers are likewise bound to observe due diligence
to avoid injury.

Pertinent provisions:

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

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.

Causation:

The carrier may be able to prove that the only cause of the loss of the goods is any of the following acts
of the shipper:

1) failure of the shipper to disclose the nature of the goods;

2) improper marking or direction as to destination; or
3) improper loading when he assumes such responsibility.

Under the above scenarios, the common carrier is not liable.

AVOIDABLE CONSEQUENCES. Moreover, even if the carrier is responsible for the loss or injury, the
passenger is also required to lessen the damage or injury under what is known as the doctrine of
avoidable consequences.

ASSUMPTION OF RISK

The Supreme Court reiterated the rule that passengers of Appeals, must take such risks incident to the
mode of travel. Carriers are not insurers of the lives of their passengers. Thus, in air travel, adverse
weather conditions or extreme climactic changes are some of the perils involved in air travel, the
consequences of which the passenger must assume or expect.

- there is no assumption of risk in case the passenger voluntarily boarded a carrier that was filled to
capacity.
- There is also no assumption of risk by the mere fact that the carrier posted notices against such
liability.

Doctrine of the last clear chance

Under the doctrine of the last clear chance, when both parties involved in the accident were both
negligent, the negligence of the party will not be considered the proximate cause if the other party has
the last clear chance of avoiding the injury. Thus, if the plaintiff has the last clear chance of avoiding the
injury, the defendant may no longer be held liable. In such case, the negligence of the plaintiff which is
not just contributory negligence will be considered an efficient intervening cause.

- The doctrine cannot be applied against a passenger. In the case of Philippine Rabbit Bus Lines, Inc.
v. Intermediate Appellate Court, et al., where it was the Supreme Court citing the landmark
decision in Anuran, et al. v. Buno, et al.," ruled that the principle of "last clear chance" applies in a
suit between the owners and drivers of colliding vehicles. "It does not arise where a passenger
demands responsibility from the carrier to enforce its contractual obligations. For it would be
inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the
other driver was likewise guilty of negligence.
- As the doctrine is usually stated, a person who has the last clear chance or opportunity of avoiding
an accident, notwithstanding the negligent acts of his opponent or that of a third person imputed
to the opponent is considered in law solely responsible for the consequences of the accident.

Notice of claim

In Civil Law, those who, in the performance of their obligation, are guilty of fraud, negligence, delay and
those who in any manner contravene the tenor of the obligation, are liable for damages. In an action for
damages due to breach of contract, it is essential that the claimant will establish the following
requirement:

(1) the existence of a perfected contract

(2) the breach thereof by the other contracting party; and
 (3) the damages which he/she sustained due to the breach." It is also essential that the mandatory
formal requirements that are imposed by law and the Statute of Limitations are complied with.

Thus, when the law requires a notice of claim, the same must be complied with and any action that may
be filed thereafter must be filed within the prescriptive period provided by law.

Notice of Claim Mandatory. Non-filing of the claim bars recovery. It is more accurate to state that the
filing of a claim with the carrier within the time limitation therefor under Article 366 actually
constitutes a condition precedent to the accrual of a right of action against a carrier for damages
caused to the merchandize. Being conditions precedent, their performance must precede a suit for
enforcement and the vesting of the right to file the suit does not take place until the happening of these
conditions. The shipper or the consignee must allege and prove the fulfillment of the condition
precedent and if he omits such allegation and proof, no right of action against the carrier can accrue in
his favor.

Pertinent provision:

ARTICLE 366.    Within the twenty-four hours following the receipt of the merchandise, the claim against
the carrier for damage or average be found therein upon opening the packages, may be made, provided
that the indications of the damage or average which gives rise to the claim cannot be ascertained from
the outside part of such packages, in which case the claim shall be admitted only at the time of receipt.

After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall
be admitted against the carrier with regard to the condition in which the goods transported were
delivered.

Commencement of Period. The period does not begin to run until the consignee has received
possession of the merchandise that he may exercise over it the ordinary control pertinent to ownership.
In other words, there must be delivery of the cargo by the carrier to the consignee at the place of
destination.

Not Applicable to Misdelivery. Article 366 does not apply to misdelivery of goods. Article 366 of the
Commercial Code is limited to cases of claims for damage to goods actually turned over by the carrier
and received by the consignee, whether those damages be apparent from an examination of the
packages in which the goods are delivered, or of such a character that the nature and extent of the
damage is not apparent until the packages are opened and the contents examined. Clearly, it has no
application in cases wherein the goods entrusted to the carrier are not delivered by the carrier to the
consignee. In such cases there can be no question of a claim for damages suffered by the goods while in
transport, since the claim for damages arises exclusively out of the failure to make delivery.

Effect of stipulation

"A provision in a contract of carriage requiring the filing of a formal notice of claim within a specified
period is a valid stipulation." The period prescribed in Article 366 of the Code of Commerce may be
subject to modification by agreement of the parties. The parties may stipulate in the bill of lading a
period that is different from the period provided by Article 366.
Waiver. The carrier may waive the requirement that there must be a notice of claim. Thus, the notice of
claim is deemed waived if the defendant failed to plead this defense in its answer to raise for the first
time at the trial or on appeal.

(1) Another form of waiver is payment by the shipper of the transportation charges without protest
knowing that there is damage, precludes the presentation of any claim against the carrier.

If there is Doubt. Although the procedure on the notice of claim under Article 366 of the Code
Commerce is complied with. there may be cases when there is doubt regarding the condition of the
goods. It is possible that the carrier does not accept the representation of the shipper. In these cases,
the dispute between the parties shall be resolved in accordance with Article 367.

ARTICLE 367.    If doubts and disputes should arise between the consignee and the carrier with respect
to the condition of the goods transported at the time their delivery to the former is made, the goods
shall be examined by experts appointed by the parties, and, in case of disagreement, by a third one
appointed by the judicial authority, the results to be reduced to writing; and if the interested parties
should not agree with the expert opinion and they do not settle their differences, the merchandise shall
be deposited in a safe warehouse by order of the judicial authority, and they shall exercise their rights in
the manner that may be proper.

Notice of claim in international carriage of goods by sea

Period to File Claim. Consequently, a claim for damages must be filed with the carrier within the
following period:

(1) If the damage is apparent, the claim should be filed immediately upon discharge of the goods.
(2) The claim must be made within three days from delivery if the damage is not apparent.

NOTE: Failure to file a notice of claim within the given period will not bar recovery. Hence, failure to file
a notice of claim is not a defense that is available to a common carrier in international carriage of goods
by sea.

PRESCRIPTION IN OVERLAND TRANSPORTATION AND COASTWISE SHIPPING.

Under the Civil Code, the extinctive period is six years if there is no written contract and ten years if
there is a written contract. Consequently, an action for damages for breach of contract of carriage
prescribes within six years if no bill of lading or any written contract has been issued. If there is a written
contract or bill of lading, the action prescribes in ten years. It is believed that this rule likewise applies to
carriage of passengers for domestic transportation.

PRESCRIPTION IN INTERNATIONAL CARRIAGE OF GOODS. The action for damages under the COGSA for
international carriage of goods must be filed within a period of one year from discharge of the goods.
In other words, the prescriptive period of one year commences from discharge. For example, the is filed
within the prescriptive period if the insurance company subrogee filed the case eight months after all
the packages were de livered,

Who Can Invoke. The carrier and the ship may put up the defense of prescription if the action for
damages is not brought within one year after the delivery of the goods or the date when the goods
should have been delivered." It has been held that not only the shipper, but also the consignee or legal
holder of the bill may invoke the prescriptive period.

Effect of demand: Period is not suspended by extrajudicial demand

Conversion or Misdelivery. The period does not apply to conversion or misdelivery. The one-year period
provided for in Section 3(6) of the COGSA refers to loss of the cargo and not to misdelivery. The Civil Law
concept of "loss" is applicable. It is understood that a thing is lost when it perishes, or goes out of
commerce, or disappears in such a way that its existence is unknown or it cannot be recovered. Thus,
the provision of COGSA does not apply if the goods were either rightly delivered or misdelivered, but
they were not lost. The applicable prescriptive period is that found in the Civil Code, namely, either ten
years for breach of a written contract or four years for quasi-delict

Delay – Goods are not damage or loss. Applicable period is 10 years.

Collision Cases - The rule applies in collision cases. However, the one-year period starts not from the
date of the collision but when the goods should have been delivered, had the cargoes been saved.

PRESCRIPTION AND SUBROGATION. The insurer who is exercising its right of subrogation is also bound
by the one-year prescriptive period. This is understandable because the insurer, in the exercise of the
right of subrogation, is pursuing the cause of action belonging to the shipper/insured. Hence, any
defense available against the shipper is available against the insurer. However, it does not apply to the
claim against the insurer for the insurance proceeds. The claim against the insurer for the insurance
proceeds is based on contract that prescribes in ten years.

NOTICE OF CLAIM AND PRESCRIPTION IN AIR TRANSPORTATION. There is no specific requirement for a
notice of claim under the New Civil Code with respect to air transportation. The applicable rule on
international air transportation can be found in the Warsaw Convention.

RULES UNDER WARSAW CONVENTION. Under the Warsaw Convention, the complaint or claim with the
carrier must be filed within three days from receipt of the baggage and seven days in case of goods. In
case of delay, 14 days after the baggage was placed at the disposal of the passenger. However, under
the provisions of the Warsaw Convention, the notice of claim is a condition precedent, hence, the notice
must precede a suit for enforcement.

On the other hand, the prescriptive period under the Warsaw Convention is two years from the date of
arrival at the destination, or from the date the aircraft ought to have arrived or from the date on which
the transportation stopped.

LIMITING STIPULATIONS. The carrier can also, in proper cases, invoke a partial defense in the form of a
limiting stipulation. For example, the parties may expressly stipulate a fixed amount that may be
recovered by the shipper or owner of the goods which requires that: (a) It is reasonable and just under
the circumstances and (b) It is fairly and freely agreed upon. Hence, as a defense, the carrier will claim
that the liability, if any, is not for the full amount that the shipper or owner is claiming but only up to the
maximum amount fixed under the contract.
PERIOD OF FILING NOTICE OF CLAIM
Carriage of goods Within the twenty-four hours following the
receipt of the merchandise

International carriage of goods by sea - If the damage is apparent, the claim should
be filed immediately upon discharge of the
goods.
- The claim must be made within three days
from delivery if the damage is not apparent.

PRESCRIPTION
Overland transportation and coastwise shipping - An action for damages for breach of contract
of carriage prescribes within six years if no
bill of lading or any written contract has been
issued.
- If there is a written contract or bill of lading,
the action prescribes in ten years.

International carriage of goods - The action for damages under the COGSA for
international carriage of goods must be filed
within a period of one year from discharge of
the goods.
- Insurer is also bound by the one-year
prescription

Air transportation - complaint or claim with the carrier must be

filed within three days from receipt of the
baggage and seven days in case of goods.
- the prescriptive period under the Warsaw
Convention is two years from the date of
arrival at the destination, or from the date
the aircraft ought to have arrived or from the
date on which the transportation stopped.