In this article, we will delve into the distinction between common and private carriers. It is essential to distinguish between a common carrier and a private carrier for several reasons: firstly, to determine which laws apply to the relationship between the carrier and the client; secondly, to ascertain the level of diligence expected from the carrier; and thirdly, to know if presumptions of fault and negligence apply to such carriers.
Commuting has become an intrinsic part of daily life in the Philippines. Each day, countless individuals rely on jeepneys, buses, trains, motorcycles, etc. to transport them to work, school, and various other engagements, paying a fare for the convenience and accessibility they provide.
Common carrier vs. Private carrier
In legal parlance, common carriers play a vital role in facilitating the mobility of the Filipino populace, offering a lifeline for those who rely on public transportation to meet their daily needs.
Nonetheless, alongside the prevalence of common carriers, there is another form of transportation in the Philippines: private carriers. While many individuals opt to utilize public transportation for their daily commute, there are also those who prefer the convenience and flexibility offered by personal vehicles.
A carrier is a person or corporation that undertakes to transport or convey goods or persons from one place to another, gratuitously or for hire. The carrier is classified either as a private/special carrier or as a common/public carrier.1
Under Art. 1732 of the New Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of carrying or transporting passengers, goods, or both, by land, water, or air, for compensation, offering their services to the public.2
The definition explains that common carriers encompass persons, corporations, firms, or associations, not vehicles themselves. Common carriers do not refer to specific modes of transportation such as motorcycles, jeepneys, trains, buses, tricycles, cars, etc. Instead, they denote human beings or legal entities, as vehicles cannot be held accountable. For instance, it’s not feasible to file a lawsuit against the bus itself.
On the other hand, a private carrier is one who, without making the activity a vocation, or without holding himself or itself out to the public as ready to act for all who may desire his or its services, undertakes, by special agreement in a particular instance only, to transport goods or persons from one place to another either gratuitously or for hire.3
In other words, a private carrier is one that does not represent itself as carrying goods for the general public and generally undertakes the carriage by special agreement.4 For example, if an individual agrees to transport someone to the grocery store using their personal vehicle, originally intended for personal use, they would be classified as a private carrier.
As to what law governs the relationship between the carrier and the client
The Civil Code’s provisions on common carriers, the Public Service Act, and other specific transportation laws govern contracts of common carriage. 3 Article 1766 of the New Civil Code provides:
In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws.5
Conversely, the provisions on ordinary contracts of the Civil Code govern the contract of private carriage.6 The extent of a private carrier’s obligation is dictated by the stipulations of a contract it entered into, provided its stipulations, clauses, terms and conditions are not contrary to law, morals, good customs, public order, or public policy.7 Art. 1306 of the New Civil Code provides:
The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.8
As to the standard of diligence required of the carrier
For common carriers, they are required to observe extraordinary diligence.
Article 1733 of the New Civil Code provides:
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 all the circumstances of each case.9
In the case of private carriers, however, the exercise of ordinary diligence in the carriage of goods or passengers will suffice. In other words, the diligence required of a private carrier is only ordinary, that is, the diligence of a good father of the family.3
As to the presumption of fault and negligence
For common carriers, presumption of fault or negligence applies. In case of loss, destruction or deterioration of the goods, common carriers are presumed to have been at fault or to have acted negligently, and the burden of proving otherwise rests on them.
Article 1735 of the Civil Code of the Philippines provides that:
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733.10
While Article 1756 of the same code states that:
Art. 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 1755.11
While in a private carrier, no fault or negligence is presumed. Those who alleges damages to or deterioration of the goods carried have the onus of proving that the cause was the negligence of the carrier.12
Relevant Jurisprudence
Characteristic of common carriers: Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods, or both, and one who does such carrying only as an ancillary activity (in local idiom, as “a sideline”)
In the case of De Guzman v. Court of Appeals,13 private respondent Ernesto Cendana was considered a common carrier, although his principal business was as a junk dealer.
In this case, the petitioner is Pedro De Guzman, while the respondents are the Court of Appeals and Ernesto Cendana. The facts of the case are the following: Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan.
Upon gathering sufficient quantities of such scrap material, respondents would bring such material to Manila for resale. He utilized two (2) six-wheeler trucks which he owned for hauling the material to Manila.
On the return trip to Pangasinan, respondent would load his vehicles with cargo which various merchants wanted delivered to differing establishments in Pangasinan. For that service, respondent charged freight rates which were commonly lower than regular commercial rates.
Petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company contracted with respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk to petitioner’s establishment in Urdaneta. In Makati City, respondent Cendana loaded the goods onto his trucks: 150 cartons went on one truck that he personally drove, and 600 cartons went on the other truck that Manuel Estrada, respondent’s driver and employee, drove.
Only 150 boxes of Liberty filled milk were delivered to the petitioner. The other 600 boxes never reached the petitioner since the truck that carried them was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper, and the cargo.
Petitioner commenced action against private respondent, demanding payment for the value of the lost merchandise. Petitioner argued that private respondent, being a common carrier, and having failed to exercise the extraordinary diligence required of him by the law, should be held liable for the value of the undelivered goods.
On the contrary, the private respondent denied that he was a common carrier and argued that he could not be held responsible for the value of the lost goods, such loss having been due to force majeure.
The issue of the case is whether or not private respondent Ernesto Cendana may be properly characterized as a common carrier. The Supreme Court ruled that private respondent Cendana is a common carrier.
Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.14
The above article makes no distinction between one whose principal business activity is the carrying of persons, goods, or both, and one who does such carrying only as an ancillary activity (in local Idiom as “a sideline”).
Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguish between a carrier offering its services to the “general public,” i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population.
In the case at bar, private respondent is properly characterized as a common carrier even though he merely “back-hauled” goods for other merchants from Manila to Pangasinan, although such back-hauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondent’s principal occupation was not the carriage of goods for others.
There is no dispute that the private respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates, which is not relevant here.
Nevertheless, the Supreme Court declared that private respondent Cendana is not liable. As a general rule, the private respondent, as the common carrier, is presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary diligence on the part of private respondent.
Art. 1745 of the New Civil Code provides:
Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:(6) that the common carrier’s liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished;15
Under Article 1745 (6) above, a common carrier is held responsible—and will not be allowed to divest or 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.”
The Supreme Court believes and so holds that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by “grave or irresistible threat, violence or force.”
In the current case, armed men stopped the second truck that belonged to the private respondent and carried the petitioner’s cargo. Three (3) of the five (5) holduppers were armed with firearms. The robbers not only took away the truck and its cargo but also kidnapped the driver and his helper, detaining them for several days and later releasing them in another province (Zambales).
In these circumstances, the Supreme Court held that the occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event.
The Supreme Court agrees with the Court of Appeals that private respondent Cendana is not responsible for the value of the lost goods that were not delivered because of something that was completely out of their control.
Conversion of common carrier to private carrier
In the case of Malayan Insurance Co., Inc. v. Philippine First Insurance Co., Inc.,16 the Supreme Court explained that a common carrier may become a private carrier.
In this case, the petitioner is Malayan Insurance Co., Inc., while the respondents are Philippine First Insurance Co., Inc. and Reputable Forwarder Services, Inc.
The facts are as follows: Wyeth Philippines, Inc. and respondent Reputable Forwarder Services, Inc. had been annually executing a contract of carriage, whereby Reputable undertook to transport and deliver Wyeth’s products to its customers, dealers, or salesmen.
Wyeth procured a marine policy from respondent Philippines First Insurance Co., Inc. to secure its interest in its own products. Philippines First thereby insured Wyeths. Wyeth executed its annual contract of carriage with Reputable.
However, it turned out that the contract was not signed by Wyeth’s representative(s). Nevertheless, it was admittedly signed by Reputable representatives, and the terms thereof faithfully observed by the parties.
Under the contract, Reputable undertook to answer for “all risks with respect to the goods and shall be liable to the COMPANY (Wyeth), for the loss, destruction, or damage of the goods/products due to any and all causes x x x.”
The contract also required Reputable to secure an insurance policy on Wyeth’s goods. Thus, Reputable signed a Special Risk Insurance Policy with the petitioner, Malayan Insurance Co., Inc.
Reputable received 1,000 boxes of Promil infant formula from Wyeth during the implementation of the Marine Policy and Special Risk Policy, which Reputable was to deliver to Mercury Drug Corporation.
Unfortunately, about 10 armed men hijacked the truck carrying Wyeth’s products. They threatened to kill the truck driver and two of his helpers should they refuse to turn over the truck and its contents to the said highway robbers. The hijacked truck was recovered two weeks later without its cargo.
Respondent Philippines First pursuant to the Marine Policy, paid Wyeth as indemnity. After becoming a subrogate of Wyeth’s rights as a result of the payment, Philippines First then demanded reimbursement from Reputable.
The latter, however, ignored the demand. Consequently, Philippines First instituted an action for a sum of money against Reputable. In its complaint, Philippines First stated that Reputable is a “private corporation engaged in the business of a common carrier.”
Reputable answered, claiming that it was a private carrier. Additionally, it asserted that because Wyeth’s representative did not sign the contract of carriage, it is not liable for the loss and that the hijacking incident was a result of force majeure.
Subsequently, Reputable impleaded Malayan as third-party defendant in an effort to collect the amount covered in the Special Risk Policy. On the other hand, Malayan argues that Reputable is not a private carrier and should not be subject to the terms of the carriage contract.
The issue in this case is whether or not Reputable is a common carrier. The Supreme Court ruled that Reputable Forwarder Services is not a common carrier but a private carrier. Reputable serves only one customer, Wyeth.
Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of carrying or transporting passengers or goods, or both by land, water or air for compensation, offering their services to the public. On the other hand, a private carrier does not represent itself as carrying goods for the general public and typically undertakes the carriage pursuant to special agreement.
A common carrier becomes a private carrier when it undertakes to carry special cargo or chartered to a special person only. Therefore, for all intents and purposes, Reputable operated as a private/special carrier with regard to its contract of carriage with Wyeth.
Final Thoughts
Individuals need to be aware of whether the entity responsible for their transportation is categorized as either a common carrier or a private carrier, as this classification significantly impacts their legal rights and options for seeking redress. Legal precedents, including landmark court cases, have reinforced the differential treatment of common carriers and private carriers.
Therefore, the differentiation between common carriers and private carriers is indispensable for individuals seeking to assert their rights in the aftermath of transportation-related accidents or injuries. By grasping the distinct obligations and liabilities associated with each classification, individuals can effectively advocate for themselves and pursue appropriate legal remedies. As such, fostering awareness and understanding of this crucial distinction plays a pivotal role in safeguarding the rights and well-being of all those engaged in transportation activities.
- Spouses Pereña vs. Spouses Zarate, G.R. No. 157917, August 29, 2012[↩]
- Art. 1732, Civil Code of the Philippines[↩]
- Supra., Note 1[↩][↩][↩]
- Malayan Insurance Co., Inc. v. Philippine First Insurance Co., Inc., et al., G.R. NO. 184300, July 11, 2012[↩]
- Article 1766, Civil Code of the Philippines[↩]
- Ibid.[↩]
- Supra., Note 4[↩]
- Art. 1306, Civil Code of the Philippines[↩]
- Article 1733, Civil Code of the Philippines[↩]
- Article 1735, Civil Code of the Philippines[↩]
- Article 1756, Civil Code of the Philippines[↩]
- Planters Products, Inc. vs. Court of Appeals, G.R. No. 101503, September 15, 1993[↩]
- G.R. No. L-47822, December 22, 1988[↩]
- Article 1732, Civil Code of the Philippines[↩]
- Article 1745 [6], Civil Code of the Philippines[↩]
- G.R. No. 184300, July 11, 2012[↩]
