UST Golden Notes - Transportaion Law PDF

UST GOLDEN NOTES 2011
TRANSPORTATIONLAW B.LIABILITIESOFCOMMONCARRIER

I.COMMONCARRIERS Q: When does liability of the common carrier
commence in connection to the transfer of
Q:Whatarecommoncarriers? goods?

A:PeBuLaCoPu A:Itbeginswiththeactualdeliveryofthegoods
1. Must be a Person, corporation, firm or for transportation, and not merely with the
association formalexecutionofareceiptorbilloflading;the
2. Must be engaged in the Business of issuance of a bill of lading is not necessary to
carrying or transporting passengers or complete delivery and acceptance. (Compania
goodsorboth Maritimav.InsuranceCo.ofNorthAmerica,G.R.
3. Thecarriageortransportmusteitherbe No.L18965,Oct.30,1964)
byLand,waterorair
4. TheserviceisforCompensation Q:Whendoesthedutytoexerciseextraordinary
5. TheserviceisofferedtothePublic. diligence commence and cease with respect to
transportofpassengers?
A.DILIGENCEREQUIRED
A: The duty of the common carrier commence
Q:Whatisthediligencerequired? fromthemomentthepersonwhopurchasesthe
ticket from the carrier presents himself at the
A:Extraordinarydiligence. proper place and in a proper manner to be
transported.
Q:Whatismeantbyextraordinarydiligence?
The relation of carrier and passenger continues
A:Itisthatextrememeasureofcareandcaution untilthepassengerhasbeenlandedattheportof
which persons of unusual prudence and destination and has left the vessel owner's dock
circumspection use for securing and preserving or premises. Once created, the relationship will
their own property or rights. The law requires not ordinarily terminate until the passenger has,
common carriers to render service with the after reaching his destination, safely alighted
greatestskillandutmostforesight. fromthecarrier'sconveyanceorhadareasonable
opportunity to leave the carrier's premises.
Q: What are the requirements of extraordinary (AboitizShippingCorp.v.CA,G.R.No.84458,Nov.
diligenceincarriagebysea? 6,1989)

A: Q:Whataretheliabilitiesofacommoncarrierin
1. Warranty of shipworthiness (TransAsia caseofbreachofcontractofcarriage?
Shipping vs. CA, GR No. 118126, March
4,1996) A:
1. Culpa contractual negligence based
2. No Overloading. (Negros Navigation vs. on contract; filed against the common
CA,GRNo.110398,November7,1997) carrierwhereinheisapassenger.

Q: What are the requirements of extraordinary 2. Culpa aquiliana negligence based on
diligenceincarriagebyland? tort; filed against the drivers of both
vehiclesandtheownersthereof.
A:
1. Goodconditionofthevehicle 3. Culpa criminal negligence based on a
2. Compliancewithtrafficrules crime;filedagainstthedriveratfaultif
hisactamountstoacrime.
Q: What is the reason for requiring common
carrierstoobserveextraordinarydiligence? Q: What are the defenses available in culpa
contractual?
A:Thenatureofthebusinessofcommoncarriers
and the exigencies of public policy demand that A:
theyobserveextraordinarydiligence. 1. Exerciseofextraordinaryduediligence
2. Due diligence in the selection and
supervisionofemployees
84
MERCANTILELAWTEAM:
ADVISER:ATTY.AMADOE.TAYAG;SUBJECTHEAD:EARLM.LOUIEMASACAYAN;
ASST.SUBJECTHEADS:KIMVERLYA.ONG&JOANNAMAYD.G.PEADA;MEMBERS:MA.ELISAJONALYNA.BARQUEZ,ANGELIR.CARPIO,
ANTONETTET.COMIA,ALBANROBERTLORENZOF.DEALBAN,JOEBENT.DEJESUS,CHRISJARKACEM.MAO,ANNAMARIEP.OBIETA,
RUBYANNEB.PASCUA,FLORANGELAT.SABAUPAN,GIANFRANCESNICOLEC.VILCHES
TRANSPORTATION LAW
3. Fortuitousevent
4. Contributory negligence of passengers XPN:
itdoesnotbarrecoveryofdamages 1. Where the mishap results in the death
for death or injury if the proximate ofthepassenger
causeisthenegligenceofthecommon 2. Where it is proved that the common
carrier but the amount of damages carrier was guilty of fraud or bad faith,
shallbeequitablyreduced.(Art.1762) evenifdeathdoesnotresult.

Q: What are the kinds of damages that may be II.VIGILANCEOVERGOODS
recoveredincaseofdeathofapassenger(culpa
contractual)? A.EXEMPTINGCAUSES

A: Q: What is the presumption on the loss,
1. Anindemnityforthedeathofthevictim destruction,ordeteriorationofgoods?
2. An indemnity for loss of earning
capacityofthedeceased A:
3. Moraldamages GR:Thecommoncarrierispresumedtohave
4. Exemplarydamages been at fault or to have acted negligently
when the goods transported are lost,
Note: Carrier is not liable for exemplary destroyedordeteriorated.
damages where there is no proof that it
acted in a wanton, fraudulent, reckless, Note: The presumption of fault or negligence
oppressiveormalevolentmanner against the carrier is only a disputable
presumption. The law, in creating such a
5. Attorney's fees and expenses of presumption merely relieves the owner of the
litigation goods, for the time being, from introducing
6. Interest in proper cases. (Brias v. evidencetofastenthenegligenceontheformer,
People,G.R.No.L30309,Nov.25,1983) because thepresumption stands in the place of
evidence.
Q: What are the distinctions between an action
to enforce liability of the employer of the XPN: When the same is due to any of the
negligent driver under Art. 103 of the RPC, and followingcausesonly:
anactionbasedonquasidelict? 1. Caso Fortuito (Flood, storm,
earthquake, lightning or other natural
A: disaster or calamity). Provided, the
ART.103,RPC ART.2180,NCC followingconditionsarepresent:
(QUASIDELICT) a. Naturaldisasterwastheproximate
Employer is only Liability is primary and andonlycause;
subsidiarilyliable. direct. b. Carrier exercised diligence to
There must be a Action may proceed prevent or minimize loss before,
judgment of conviction independently from the duringandaftertheoccurrenceof
against the negligent criminalaction. thenaturaldisaster;and
driver otherwise the c. The common carrier has not
action against the negligently incurred delay in
employer would be transporting the goods. (Art. 1740,
premature. NCC)
The defense of due The defense of due
diligenceinselectionand diligence in selection 2. Actofthepublicenemyinwar,whether
supervisionofemployees and supervision of internationalorcivil,provided:
cannotbeinvoked. employees may be a. Act was the proximate and only
invoked. cause;
b. Carrier exercised diligence to
Q: What is the liability with regard to moral prevent or minimize loss before,
damages? duringandaftertheact;and
c. Nodelay.(Art.1740,NCC)
A:
GR: Moral damages are not recoverable for 3. Actoromissionoftheshipperorowner
breach of contract of carriage in view of Art. ofthegoods,provided:
221920oftheCivilCode.
85
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
V ICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE Facultad de Derecho Civil
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

a. If proximate and only cause causedbytheactualfaultorprivityofthecarrier
exempting; (Eastern Shipping Lines v. IAC, G.R. No. L69044,
b. If contributory negligence May29,1987).
mitigating
Note: In case that the goods have been already
4. Thecharacterofthegoodsordefectsin deposited in the warehouse of Bureau of Customs
the packing or in the containers. thenthegoodswas destroyedby fire, the carrier is
Provided, carrier exercised due not anymore liable (Sevando vs. Philippine Steam
diligencetoforestallorpreventloss(Art Navigation,G.R.No.L364812,October23,1982).
1742).
Q: Is the occurrence of a typhoon a fortuitous
Note: If the fact of improper packing is event?
known to the carrier or its servants, or
apparent upon ordinary observation, but A:
itacceptsthegoodsnotwithstandingsuch GR: Yes, if all the elements of a natural
condition, it is not relieved from disaster or calamity concur. This holds true
responsibility for loss or injury resulting especially if the vessel was seaworthy at the
therefrom.(SouthernLinesInc.,v.CA,G.R. timeitundertookthatfatefulvoyageandthat
No.L16629,Jan.31,1962) it was confirmed with the Coast Guard that
the weather condition would permit safe
5. Order or act of competent authority. travel of the vessel to its destination.
Provided,theauthorityiswithpowerto (Philippine American General Insurance Co.,
issue order (Art. 1743). If the officer Inc. v. MGG Marine Services, Inc., G.R. No.
actswithoutlegalprocess,thecommon 135645,Mar.8,2002)
carrier will be held liable (Ganzon vs.
CA,GRNo.L48757,May30,1988). XPN: If a vessel sank due to a typhoon, and
therewasfailuretoascertainthedirectionof
Note: In all cases other than those enumerated the storm and the weather condition of the
above, there is presumption of negligence even if path they would be traversing, it constitutes
there is an agreement limiting the liability of the lack of foresight and minimum vigilance over
commoncarrierinthevigilanceoverthegoods. its cargoes taking into account the
surrounding circumstances of the case. Thus,
Q:Aremechanicaldefectsconsideredfortuitous thecommoncarrierwillstillbeliable.(Arada
events?Giveillustrations. v.CA,G.R.No.98243,July1,1992)

A: No. Mechanical defects in the carrier are not Q: Is a common carrier liable for the acts of
considered acaso fortuitothat exempts the strangersorcriminals?
carrier from responsibility. (Sweet Lines, Inc. v.
CA,G.R.No.L46340,Apr.29,1983) A:Yes.Acommoncarrierisliableevenforactsof
strangerslikethievesorrobbers.
1. Tireblowoutofajeepisnotafortuitous
eventwherethereexistsaspecificactof XPN: where such thieves or robbers acted "with
negligence by the carrier consisting of graveorirresistiblethreat,violenceorforce."The
thefactthatthejeepneywasoverloaded common carrier is not liable for the value of the
andspeedingatthetimeoftheincident. undeliveredmerchandisewhichwaslostbecause
(Juntilla v. Fontanar, G.R. No. L45637, of an event that is beyond his control. (De
May31,1985) Guzmanv.CA,G.R.No.L47822,Dec.22,1988)

2. Defective brakes cannot be considered Q: Could a hijacking of a common carrier
fortuitous in character. (Vergara v. CA, guarded by 4 persons be considered force
G.R.No.77679,Sept.30,1987) majeure if only 1 of the 2 hijackers was armed
withbladedweapon?
Q:Isfireconsideredanaturaldisaster?
A: No. The hijacking in this case cannot be
A: No. This must be so as it arises almost considered force majeure. The hijackers did not
invariably from some act of man or by human act with grave or irresistible threat, violence or
means. It does not fall within the category of an force.(1995BarQuestion)
actofGodunlesscausedbylightningorbyother
natural disaster or calamity. It may even be
86
MERCANTILELAWTEAM:
TRANSPORTATION LAW
Q: What are the requisites of absence of natural disaster shall not free such
negligence? carrierfromresponsibility;(Art.1740)

A: 3. If the common carrier, without just
1. The cause of the breach of obligation cause, delays the transportation of the
must be independent of the will of the goods or changes the stipulated or
debtor usual route, the contract limiting the
2. The event must be unforeseen or common carriers liability cannot be
unavoidable availed of in case of the loss,
3. The event must be suchas to render it destruction, or deterioration of the
impossible for the debtor to fulfil his goods;(Art.1747)
obligationinanormalmanner 4. An agreement limiting the common
4. The debtor must be free from nay carriersliabilityfordelayonaccountof
participation in or aggravation of the strikesorriotsisvalid.(Art.1748)
injurytothecreditor.
Q: What are the defenses available to any
Q:Whatistheimportanceofabsenceofdelay? common carrier to limit or exempt it from
liability?
A: The absence of delay is important in case of
natural disaster because if a common carrier A:
incurs in delay in transporting the goods, such 1. Observance of extraordinary diligence;
disaster shall not free such carriers from or
responsibility.(Art.1740NCC)
2. Proximate cause of the incident
Q: What are the rules regarding the time of mentioned in Art. 1734. (2001 Bar
deliveryofgoodsanddelay? Question)

A: A. CONTRIBUTORYNEGLIGENCE
1. If there is an agreement as to time of
delivery delivery must be within the Q: What is the rule if there is contributory
timestipulatedinthecontractorbillof negligenceonthepartoftheshipper?
lading
GR:Iftheshipperorownermerelycontributedto
2. Ifthereisnoagreementdeliverymust the loss, destruction or deterioration of the
bewithinareasonabletime.(Saludo,Jr. goods, the proximate cause thereof being the
v.CA,G.R.No.95536,Mar.23,1992) negligenceofthecommoncarrier,thelattershall
be liable for damages, which however, shall be
Q:Ifthereisdelayinthedeliveryofgoods,what equitablyreduced.(Art.1741)
istheliabilityofthecarrier?
XPN: In a collision case and allision cases, the
A: The carrier shall be liable for damages partiesareliablefortheirowndamages.
immediatelyandproximatelyresultingfromsuch
neglectofduty.(Saludo,Jr.v.CA,GRNo.95536, B. DURATIONOFLIABILITY
Mar.23,1992)
Q:Whendoesthedutytoexerciseextraordinary
Q: What are the Civil Code provisions regarding diligence start and end with respect to carriage
delayinthetransportationofgoods? ofgoods?

A: A: It lasts from the time the goods are
1. Those who in the performance of their unconditionally placed in the possession of, and
obligations are guilty of fraud, receivedbythecarrierfortransportationuntilthe
negligence, or delay, and those who in samearedelivered,actuallyorconstructively,by
any manner contravene the tenor thecarriertotheconsigneeortothepersonwho
thereof, are liable for damages; (Art. hasarighttoreceivethem.(Art.1736)
1170)

2. Ifthecommoncarriernegligentlyincurs
in delay in transporting the goods, a
87

Q:Towhomshoulddeliverybemade? C. STIPULATIONFORLIMITATIONOFLIABILITY

A:Itmustbedelivered,actuallyorconstructively, Q: Are stipulations limiting the carriers liability
totheconsigneeortothepersonwhohasaright valid?
toreceivethem.
A:Yes,provideditbe:
Note: Delivery of the cargo to the customs 1. In writing, signed by the shipper or
authoritiesisnotdeliverytotheconsignee,ortothe owner
personwhohasarighttoreceivethem.(LuDo&Lu 2. Supported by a valuable consideration
YmCorp.v.Binamira,G.R.No.L9840,Apr.22,1957) other than the service rendered by the
commoncarrier
Q:Whatisconstructivedelivery? 3. Reasonable, just and not contrary to
publicpolicy.(Art.1744)
A:Itisadeliveryofarepresentationofproperty
(asawritteninstrument)ormeansofpossession Q: May a stipulation limiting the common
(asakey)thatisconstruedbyacourtassufficient carriers liability be annulled by the shipper or
to show the transferor's intent or to put the owner?
propertyunderthetransferee'scontrol
A:Yes,ifthecommoncarrierrefusedtocarrythe
Q:Whatistherightofstoppageintransitu? goodsunlesstheshipperorowneragreedtosuch
stipulation. However, under this provision,
A: It is the right exercised by the seller by annulmentoftheagreementlimitingthecarriers
stopping the delivery of the goods to a certain liabilityisstillnecessary.(Art.1746)
buyerorconsignee(becauseofinsolvency)when Note: There is no need to annull, if the common
suchgoodsarealreadyintransit. carrierwithoutjustcause:

Q:Whatistheruleastounloading,storageand 1. Delaysthetransportationofthegoods;or
stoppageintransitu? 2. Changesthestipulatedorusualroute,the
contract limiting the common carriers
A: liability cannot be availed of in case of
GR: The common carriers duty to observe loss, destruction, or deterioration of the
extraordinary diligence in the vigilance over goods.(Art.1747)
thegoodsremainsinfullforceandeffecteven
whentheyaretemporarilyunloadedorstored Q: What are some stipulations limiting the
intransit. liabilityofcommoncarrierswhichmaybevalid?

XPN: When the shipper or owner has made A:
useoftherightofstoppageintransitu. 1. An agreement limiting the common
carriersliabilityfordelayonaccountof
Q: What is the diligence required in exercising strikesorriots.(Art.1748)
therightofstoppageintransitu?
2. Astipulationthatthecommoncarriers
A:Ordinarydiligencebecauseofthefollowing: liability is limited to the value of the
1. Itisholdingthegoodsinthecapacityof goods appearing in the bill of lading,
an ordinary bailee or warehouseman unless the shipper or owner declares a
andnotasacarrier; greater value and pays corresponding
2. There is a change of contract from a freight.(Art.1749)
contract of carriage to a contract of
deposit; 3. A contract fixing the sum that may be
recoveredfortheloss,destruction,and
Note: If the seller instructsto deliveritsomewhere deterioration of goods is binding
else, a new contract of carriage is formed and the provided that it is just and reasonable
carriermustbepaidaccordingly. under the circumstances and it has
beenfairlyandfreelyagreedupon.(Art.
1750)

4. When a passenger is carried
gratuitously, a stipulation limiting the
commoncarriersliabilityfornegligence
88
MERCANTILELAWTEAM:
TRANSPORTATION LAW
isvalid,butnotforwillfulacts orgross caseofitsloss,destructionordeterioration.(Art.

negligence. However, the reduction of 1752)
fare does not justify any limitation of
the common carriers liability. (Art. Q: When is the limitation of the amount of
1758) liabilityvalid?

Q: What are void stipulations in a contract of A: When it is reasonable and just under the
carriageofgoods? circumstances, and has been freely and fairly
agreedupon.(Art.1750)
A:
1. That the goods are transported at the Q: Is the liability limited to the value of the
riskoftheownerorshipper goods appearing in the bill of lading when
stipulated?
2. That the common carrier will not be
liable for any loss, destruction, or A:
deteriorationofthegoods GR: A stipulation that the common carriers
liability is limited to the value of the goods
3. That the common carrier need not appearinginthebillofladingisbinding.
observeany diligence in the custody of
thegoods XPN:theshipperorownerdeclaresagreater
value and pays corresponding freight. (Art.
4. That the common carrier shall exercise 1749).
adegreeofdiligencelessthanthatofa
good father of a family, or a man of D. LIABILITYFORBAGGAGEOFPASSENGERS
ordinary prudence in the vigilance over
themovablestransported Q:Whatrulewillapplyoncheckedinbaggageof
passengers?
5. That the common carrier shall not be
responsiblefortheactsoromissionsof A:TheprovisionsofArticles1733to1753ofthe
hisoritsemployees CivilCodeshallapply.

6. That the common carriers liability for Q: What rule will apply when the baggage is in
acts committed by thieves, or of the personal custody of the passengers of their
robbers who do not act with grave or employees?
irresistible threat, violence or force, is
dispensedwithordiminished A:
1. The common carrier shall be
7. That the common carrier is not responsible for shippers baggage as
responsible for the loss, destruction or depositaries, provided that notice was
deterioration of goods on account of giventothem,ortotheiremployees,of
the defective condition of the car, the effects brought by the guests and
vehicle, ship, airplane or other that, on the part of the shipper, they
equipment used in the contract of take the precautions which said
carriage common carriers or their substitutes
advised relative to the care and
8. Any similar stipulation that is vigilance of their effects. (Art. 1998,
unreasonable, unjust and contrary to NCC)
publicpolicy.(Art.1745)
2. The responsibility shall include the loss
Q: What is the effect of the agreement on of,orinjurytothepersonalpropertyof
limiting the liability to the presumption of theshippercausedbytheemployeesof
negligenceofthecarrier? the common carrier as well as
strangers; but not that which may
A: Even if there is an agreement limiting the proceed from any force majeure. (Art.
liability of the common carrier in the vigilance 2000,NCC)
over the goods, the common carrier is still
disputably presumed to have been negligent in 3. The act of a thief or robber, who has
enteredthecarrierisnotdeemedforce
89

majeure, unless it is done with the use However, the reduction of fare does not justify
ofarmsorthroughanirresistibleforce. any limitation of the common carriers liability.
(Art.2001,NCC) (Art.1758)

4. The common carrier is not liable for B. DURATIONOFLIABILITY
compensation if the loss is due to the
acts of the shipper, his family, or Q:Whendoesthisdutybegintoexist?
servants, or if the loss arises from the
characterofthethingsbroughtintothe A: The duty exists from the moment the person
carrier.(Art.2002,NCC) offerstobetransportedplaceshimselfinthecare
and control of the common carrier who accepts
5. Thecommoncarriercannotfreehimself himassuchpassenger.Thedutycontinuesuntil
fromresponsibilitybypostingnoticesto thepassengerhas,afterreachinghisdestination,
the effect that he is not liable for the safely alighted from the carriers conveyance or
articles brought by the passenger. Any has had a reasonable opportunity to leave the
stipulation between the common carriers premises and to look after his baggage
carrier and the shipper whereby the andprepareforhisdeparture.
responsibilityoftheformerassetforth
in Articles 1998 to 2001 is suppressed Q:WhenaPublicUtilityVehicleisnotinmotion,
or diminished shall be void. (Art. 2003, is there a necessity for a person who wants to
NCC) ridethesametosignalhisintentiontoboard?

Q:Couldacommoncarrierbeheldliableforthe A:No.Whenthebusisnotinmotionthereisno
lossofavaluableitemstolenbyotherpassenger necessity for a person who wants to ride the
when the victim told the driver that he has same to signal his intention to board. A public
valuableitem? utility bus, once it stops, is in effect making a
continuousoffertobusriders.Hence,itbecomes
A: Yes. Ordinarily, the common carrier is not the duty of the driver and the conductor, every
liable for acts of other passengers. But the timethebusstops,todonoactthatwouldhave
commoncarriercannotrelieveitselffromliability the effect of increasing the peril to a passenger
if the common carriers employees could have whilehewasattemptingtoboardthesame.The
prevented the act or omission by exercising due premature acceleration of the bus in this case
diligence. In this case, the passenger asked the was a breach of such duty. (Dangwa vs. CA, G.R.
driver to keep an eye on the bag which was No.95582,October7,1991)
placed beside the drivers seat. If the driver
exercisedduediligence,hecouldhaveprevented
Q: If the bus started moving slowly when the
thelossofthebag.(1997BarQuestion)
passengerisboardingthesame,isthepassenger

negligent?
III.SAFETYOFPASSENGERS

A. VOIDSTIPULATIONS A: No. Further, even assuming that the bus was
moving, the act of the victim in boarding the
Q:Arestipulationslimitingthecommoncarriers same cannot be considered negligent under the
responsibilityforthesafetyofpassengersvalid? circumstances. As clearly explained in the
testimony of the aforestated witness for
A:No.Theresponsibilityofacommoncarrierfor petitioners, Virginia Abalos, the bus had "just
the safety of passengers as required in Articles started" and "was still in slow motion" at the
1733 and 1755 cannot be dispensed with or point where the victim had boarded and was on
lessened by stipulation, by posting of notices, by its platform. (Dangwa vs. CA, G.R. No. 95582,
statementsontickets,orotherwise.(Art.1757) October7,1991)

Q: What is the rule in case of nonpaying Q: What is the duty of the common carriers in
passengersorifthefareisreduced? boardingofpassengers?

A: It is the duty of common carriers of
A: When a passenger is carried gratuitously, a
passengers,includingcommoncarriersbyrailroad
stipulation limiting the common carriers liability
train, streetcar, or motorbus, to stop their
for negligence is valid, but not for willful acts or
conveyancesareasonablelengthoftimeinorder
grossnegligence.
90
MERCANTILELAWTEAM:
TRANSPORTATION LAW
toaffordpassengersanopportunitytoboardand
enter,andtheyareliableforinjuriessufferedby A:Thebasisofthecarrier'sliabilityforassaultson
boarding passengers resulting from the sudden passengers committed by its drivers rests on the
starting up or jerking of their conveyances while principle that it is the carrier's implied duty to
theyaredoingso(Dangwavs.CA,G.R.No.95582, transport the passenger safely. As between the
October7,1991). carrier and the passenger, the former must bear
the risk of wrongful acts or negligence of the
Q:Isapersonmeresteppingontheplatformof carrier's employees against passengers, since it,
abusalreadyconsideredapassenger? andnotthepassengers,haspowertoselectand
remove them. (Maranan v. Perez, G.R. No. L
22272,June26,1967)
A: Yes. The person, by stepping and standing on

the platform of the bus, is already considered a
Q: What is the extent of liability of common
passenger and is entitled all the rights and
carriersforactsofcopassengersorstrangers?
protection pertaining to such a contractual

relation. Hence, it has been held that the duty
A: A common carrier is responsible for injuries
which the carrier owes to its patrons extends to
sufferedbyapassengeronaccountofthewillful
personsboardingcarsaswellastothosealighting
acts or negligence of other passengers or of
therefrom (Dangwa vs. CA, G.R. No. 95582,
strangers, if the carriers employees through the
October7,1991).
exercise of the diligence of a good father of a
family would have prevented or stopped the act
Q: Robert De Alban and his family rode a bus oromission.(Art.1763)
owned by Joeben Bus Company. Upon reaching
theirdesireddestination,theyalightedfromthe Q:Inajeepney,Angela,apassenger,wasinjured
bus but Robert returned to get their baggage. because of the flammable material brought by
However, his youngest daughter followed him Antonette,anotherpassenger.Antonettedenied
without his knowledge. When he stepped into hisbaggagetobeinspectedinvokingherrightto
thebusagain,thebusacceleratedthatresulting privacy. Should the jeepney operator be held
to Roberts daughter death. The bus ran over liablefordamages?
her.Isthebuscompanyliable?
A: No. The operator is not liable for damages. In
A:Yes.Therelationofcarrierandpassengerdoes overland transportation, the common carrier is
not cease at the moment the passenger alights not bound nor empowered to make an
from the carriers vehicle at a place selected by examinationonthecontentsofpackagesorbags,
the carrier at the point of destination, but particularly those handcarried by passengers.
continues until the passenger has had a (Nocum v. Laguna Tayabas Bus Company, G.R.
reasonable time or reasonable opportunity to No.L23733,Oct.31,1969)
leave the current premises (La Mallorca vs. CA,
GRL20761,27July1966). Q: In the question above, if it were an airline
company involved, would your answer be the
C. LIABILITYFORACTSOFOTHERS same?

A:No.Thecommoncarriershouldbemadeliable.
Q: Are common carriers liable for acts of its In case of air carriers, it is unlawful to carry
employees? flammable materials in passenger aircrafts, and
airline companies may open and investigate
A:Commoncarriersareliableforthedeathofor suspiciouspackagesandcargoespursuanttoR.A.
injuries to passengers through the negligence or 6235.(1992BarQuestion)
willful acts of the formers employees, although
such employees may have acted beyond the

Q:Apassengerwasinjuredbecauseabystander
scope of their authority or in violation of the
outside the bus hurled a stone. Is the bus
ordersofthecommoncarriers.
companyliable?
The liability of the common carriers does not

cease upon proof that they exercised all the
A:No.Thereisnoshowingthatanysuchincident
diligence of a good father of a family in the
previously happened so as to impose an
selection and supervision of their employees.
obligationonthepartofthepersonnelofthebus
(Art.1759)
companytowarnthepassengersandtotakethe

necessary precaution. Such hurling of a stone
Q:Whatistherationalebehindthisprinciple?

91

constitutes fortuitous event in this case. The bus premises(AboitizShippingCorporationvs.CA,GR
company is not an insurer of the absolute safety No.84458,November6,1989)
of its passengers. (Pilapil v. CA, G.R. No. 52159,
Dec.22,1989)(1994BarQuestion) Q: What is the rule in case of nonpaying
passengersorifthefareisreduced?
D. EXTENTOFLIABILITYFORDAMAGES
A: When a passenger is carried gratuitously, a
Q:Whoarenotconsideredpassengers? stipulation limiting the common carriers liability
for negligence is valid, but not for willful acts or
A: gross negligence. However, the reduction of fare
does not justify any limitation of the common
1. One who remains on a carrier for an
carriersliability(Art.1758).
unreasonable length of time after he

has been afforded every safe
opportunitytoalight Q: What is assumption of risk on the part of
2. Onewhohasboardedbyfraud,stealth, passengers?
ordeceit
3. One who attempts to board a moving A:Passengersmusttakesuchrisksincidenttothe
vehicle,althoughhehasaticket,unless modeoftravel.
theattemptbewiththeknowledgeand
Note:Carriersarenotinsurersofanyandallrisksto
consentofthecarrier
passengers and goods. It merely undertakes to
4. One who has boarded a wrong vehicle,
perform certain duties to the public as the law
has been properly informed of such imposes, and holds itself liable for any breach
fact, and on alighting, is injured by the thereof.(Pilapilv.CA,G.R.No.52159,Dec.22,1989)
carrier
5. Invited guests and accommodation Q: Is a carrier liable to its passengers for
passengers damages caused by mechanical defects of
equipments or appliances installed in the
Note: The carrier is thus not obliged to exercise
carrier?
extraordinarydiligencebutonlyordinarydiligencein

theseinstances.
A:Yes,wheneveritappearsthatthedefectwould

have been discovered by the carrier if it had
Q: May a common carrier be held liable to a
exercised the degree of care which under the
passenger who was injured and eventually died
circumstances was incumbent upon it, with
whiletryingtoboardthevehicle?
regard to inspection and application of the

necessary tests. The manufacturer is considered
A: Yes. It is the duty of common carriers of
asbeinginlawtheagentorservantofthecarrier,
passengers to afford passengers an opportunity
as far as regards the work of constructing the
toboardandenter,andtheyareliableforinjuries
appliance. The good repute of the manufacturer
suffered by boarding passengers resulting from
willnotrelievethecarrierfromliability.
the sudden starting up or jerking of their

conveyanceswhiletheyaredoingso.Thevictim,
The rationale of the carrier's liability is the fact
by stepping and standing on the platform of the
thatthepassengerhasneitherchoicenorcontrol
bus, is already considered a passenger and is
over the carrier in the selection and use of the
entitledalltherightsandprotectionpertainingto
equipment and appliances in use by the carrier.
such a contractual relation. (Dangwa
Havingnoprivitywhateverwiththemanufacturer
Transportation Co., Inc. v. CA, G.R. No. 95582,
or vendor of the defective equipment, the
Oct.7,1991)
passenger has no remedy against him, while the
carrierusuallyhas.Itisbutlogical,therefore,that
Q: Is the victims presence in a vessel after 1 thecarrier,whilenotininsurerofthesafetyofhis
hour from his disembarkation was no longer passengers, should nevertheless be held to
reasonable and he consequently ceased to be a answer for the flaws of his equipment if such
passenger? flawswereatalldiscoverable.(Necesitov.Paras,
G.R.No.L10605,June30,1958)
A: No. Carrierpassenger relationship continues
untilthepassengerhasbeenlandedattheportof
destination and has left the vesselowners
92
MERCANTILELAWTEAM:
TRANSPORTATION LAW
Q: Should the diligence of the passenger be theparties.(PhoenixAssuranceCo.,Ltd.v.United

considered in determining liability in case of StatesLines,G.R.No.L24033,Feb.22,1968)
injury?
Q:WhatarethethreefunctionsofBillofLading?
A:Yes.Thepassengermustobservethediligence
ofagoodfatherofafamilyorordinarydiligence A:
toavoidinjurytohimself(Art.1761).Thismeans 1. Itisareceiptforthegoodsshipped
that if the proximate cause of the passengers 2. It is a contract by which the three
injuryishisnegligence,thecommoncarrierisnot parties namely the shipper, carrier and
liable. consignee undertake specific
Q: Who has the burden of proof in cases of responsibilities and assume stipulated
contributorynegligence? obligations;and
3. It is a legal evidence of the contract
A: The common carrier since it will benefit from betweentheshipperandthecarrier.As
suchmitigatedliability. evidence, its contents shall decide all
disputeswhichmayarisewithregardto
Q: May the registered owner of the vehicle be theirexecutionandfulfillment.
held liable for damages suffered by a third
person in the course of the operation of the NOTE: In the absence of a bill of lading, their
vehicle? respectiveclaimsmaybedeterminedbylegalproofs
whicheachofthecontractingpartiesmaypresentin
conformitywithlaw.
A: Yes. The registered owner of a public service
vehicleisresponsiblefordamagesthatmayarise Q:Whatarethetwotypesofbilloflading?
from consequences incident to its operation or
that may be caused to any of the passengers A:
therein (Gelisan v. Alday, G.R. No. L30212, Sept 1. Negotiable If issued to the bearer or
30, 1987). Also, the liability of the registered to the order of any person named in
owner of a public service vehicle for damages suchbill.
arising from the tortious acts of the driver is 2. Nonnegotiable If issued to a specific
primary, direct, and joint and several or solidary personnamedinsuchbill.
with the driver. (Philtranco Service Enterprises,
Inc.v.CA,G.R.No.120553)June17,1997) Q:Whatistheperiodofdeliveryofgoods?

IV.BILLOFLADING A: If a period has been fixed for the delivery of
thegoods,itmustbemadewithinsuchtime,and,
Q:Whatisabilloflading? for failure to do so, the carrier shall pay the
indemnity stipulated in the bill of lading, neither
A: It is a written acknowledgement of receipt of the shipper nor the consignee being entitled to
goods and agreement to transport them to a anythingelse(Art.370,CodeofCommerce).
specific place and to a named person or to his
order. Q: If indemnity is not stipulated, how will it be
determined?
Q: What is the twofold character of a bill of
lading? A: If no indemnity has been stipulated and the
delayexceedsthetimefixedinthebilloflading,
A:Abillofladingoperatesbothasareceiptand the carrier shall be liable for the damages which
asacontract.Itisareceiptforthegoodsshipped the delay may have caused. (Art. 370, Code of
andacontracttotransportanddeliverthesame Commerce)
as therein stipulated. As a receipt, it recites the
date and place of shipment, describes the goods Q: What is the duty of the carrier if there is no
as to quantity, weight, dimensions, identification periodoftimefixedforthedeliveryofgoods?
marks and condition, quality, and value. As a
contract, it names the contracting parties, which A: The carrier shall be under the obligation to
include the consignee, fixes the route, forwardthemwiththefirstshipmentofthesame
destination, and freight rate or charges, and orsimilarmerchandisehemaymaketothepoint
stipulates the rights and obligations assumed by where he must deliver them, and should he not
doso,thedamagesoccasionedbythedelayshall
besufferedbyhim.(Art.358)

93

Q:Isthesurrenderofthebillofladingnecessary 1. Consignment of goods through a
upondeliveryofthegoods? common carrier, by a consignor in one
place to a consignee in another place;
A: Yes. If the carrier fails to require such and
surrender: 2. Thedeliveryofthemerchandisebythe
carrierto theconsigneeattheplaceof
1. If nonnegotiable Action against the destination (New Zealand Ins. Co., Ltd.
carrierdoesnotlie. v. Choa Joy, G.R. No. L7311, Sept. 30,
1955).
2. If negotiable Action by the shipper
maylieagainstthecarrier Q: What is the effect of paying the
transportation charges in the filing of an action
Q: When could a consignee refuse to take onaccountofdamagestogoods?
deliveryofgoods?
A:
A: 1. IfpaidbeforecheckingthegoodsThe
1. When a part of the goods transported righttofileaclaimisnotwaived.
are delivered and the consignee is able
toprovethathecannotmakeuseofthe 2. If paid after the goods were checked
partwithouttheothers;(Art.365) The right to file a claim is already
2. If the goods are damaged and such waived (Southern Lines, Inc. v. CA, G.R.
damage renders the goods useless for No.L16629,Jan.31,1962).
the particular purpose for which there
aretobeused;(Art.365) Note:Thefilingofclaimisaconditionprecedentfor
3. When there is delay on account of the recoveryofdamages.
faultofthecarrier;(Art.371)or
4. Ifthecargoconsistsofliquidsandthey Q: What is the doctrine of Combined or
have leaked out, nothing remaining in ConnectingServices?
the containers but onefourth () of
their contents, on account of inherent A: The carrier which delivered the goods to the
defectofcargo.(Art.687) consigneeshallassumetheobligations,rightsand
actions of those who preceded him in the
Note:Inallcases,theshippermayexercisetheright conveyanceofthegoods.
ofabandonmentbynotifyingthecarrier.Ownership
over damaged goods passes to the carrier and Theshipperorconsigneeshouldproceedagainst
carrier must pay shipper the market value of the theonewhoexecutedthecontractoragainstthe
goodsatpointofdestination. others who received the goods without
reservation.Butevenifthereisreservation,they
Q:Whatistheperiodforfillingclaims? are not exempted from liabilities that they may
have incurred by reason of their own acts (Art.
A: 373,CodeofCommerce).
1. Immediately after delivery if the
damageisapparent;or The carrier may then file a thirdparty complaint
2. Within 24 hours from delivery If the against the one who is really responsible. The
damageisnotapparent.(Art.366,Code carrierisanindispensibleparty.Buttheshipper
ofCommerce) or consignee may sue all of them as alternative
defendants.
Q: When does Article 366 of the Code of
Commerceapply? Q:Whatistheperiodforfilingactions?

A: It applies in case of domestic transportation A: It shall prescribe eight days after the delivery
(interisland)wherethereisdamagetothegoods has been made, and once prescribed, the carrier
transported. shall have no other action than that
correspondingtohimasanordinarycreditor(Art.
Q: What are the requisites before claim for 375,CodeofCommerce).
damagesunderArt.366maybedemanded?

A:

94
MERCANTILELAWTEAM:
TRANSPORTATION LAW
V.MARITIMECOMMERCE Q:Whatarethedistinctionsbetweenabareboat
or demise charter party from contracts of
A.CHARTERPARTIES affreightment?

Q:Whatisacharterpartycontract? A:
BAREBOAT/DEMISE CONTRACT OF
A: A contract whereby the whole or part of the CHARTERCONTRACT AFFREIGHTMENT
ship is let by the owner to a merchant or other Ship owner remains
Negligence of the
person for a specified time or use for the liable and carrier must
charterergivesrisetoits
conveyance of goods, in consideration of the answer for any breach
liabilitytoothers.
payment of freight. (Caltex v. Sulpicio Lines, G.R. ofduty.
No.131166,Sept.30,1999) Charterer is not
Charterer is regarded as regardedasowner.Ship
Q:Whataretheclassesofcharterparty? owner pro hac vice. Ship owner retains
owner temporarily ownership over the
A: relinquishes possession vessel. (Coastwise
and ownership of the Lighterage v. CA, G.R.
1. Bareboat or demise the ship owner
vessel. No. 114167, July 12,
gives possession of the entire vessel to
1995)
the charterer. In turn, the charterer

supplies, equips, and mans the vessel.
Q:Whatismeantbyownerprohacvice?
Thechartereristheownerprohacvice.

A: The charterer is considered the owner of the
2. Contract of affreightment the owner
vessel for the voyage or service stipulated. The
of the vessel leases a part or all of its
chartererandnottheownerofthevesselisliable
space to haul goods for others. It can
forvesselsexpenses,includingseamanswages.
eitherbe:

Q:Whataretheinstanceswhenacharterparty
a. Time charter Vessel is chartered
mayberescinded?
for a particular time or duration.

While the ship owner still retains
A:
possession and control of the
1. Attherequestofthecharterer:
vessel, the charterer has the right
a. By abandoning the charter and
to use all vessels facilities. The
payinghalftheprice
charterer may likewise designate
b. Errorintonnageorflag
vesselsdestination.
c. Failure to place vessel at

charterersdisposal
b. Voyage charter Vessel is
d. Return the vessel due to pirates,
chartered for a particular voyage
enemies,andbadweather
orseriesofvoyages.
e. Arrival at port for repairs if
repairstakelessthan30days,pay
Q:Whatisavoyagecharter?
full freightage; if more than,

freightage in proportion to the
A:Avoyagecharterisacontractwhereintheship
distancecovered.
wasleasedforasinglevoyagefortheconveyance

of goods, in consideration of the payment of
2. Attherequestoftheshipowner:
freight. The shipowner retains the possession,
a. Ifextralaydaysterminatewithout
command and navigation of the ship, the
the cargo being placed alongside
charterer merely having use of the space in the
vessel;and
vessel in return for his payment of freight. An
b. Sale by the owner of the vessel
ownerwhoretainspossessionoftheshipremains
beforeloadingbythecharterer.
liableascarrierandmustanswerforlossornon

deliveryofthegoodsreceivedfortransportation.
3. Duetofortuitousevent:
(Cebu Salvage Corp. vs. Philippine Home
a. War There is a governmental
AssuranceCorp.,G.R.No.150403,Jan.25,2007)
prohibition of commercial

intercourse, intended to bring
Note:Thesameconceptappliestoatimecharter.
about an entire cessation for the
timebeingofalltradewhatever

95

b. Blockade A sort of 5. To adopt all proper measures to keep
circumvallation around a place by the vessel well supplied and equipped,
which all foreign connection and purchasingallthatmaybenecessaryfor
correspondenceis,asfarashuman the purpose, provided there is no time
powercaneffectit,tobecutoff to request instruction from the ship
agent
c. Prohibitiontoreceivecargoatport
ofdestination 6. To order, in similar urgent cases while
onavoyage,therepairsonthehulland
d. Embargo A proclamation or engines of the vessel and in its rigging
order of State, usually issued in and equipment, which are absolutely
times of war or threatened necessary to enable it to continue and
hostilities, prohibiting the finishitsvoyage.(Art.610)
departure of ships or goods from
someoralltheportsofsuchState Q:Whataretheobligationsofthecaptain?
untilfurtherorder;or
A:
e. Inability of the vessel to navigate. 1. Inventoryofequipment
(Art.640) 2. Keep a copy of Code of Commerce on
board
B.LIABILITYOFSHIPOWNERSANDSHIPPING 3. Have a log book, freight book,
AGENTS accountingbook
4. Conduct a marine survey of vessel
Q: What is the threefold character of the beforeloading
captain? 5. Remainonboardwhileloading
6. Demand pilot on departure and on
A: arrivalateachport
1. Generalagentoftheshipowner 7. Beondeckwhensightingland
2. Vesselstechnicaldirector 8. Arrivals under stress: to file marine
3. Government representative of the flag protestin24hours
henavigatesunder 9. Record bottomry loan with Bureau of
Customs
Q: What are the inherent powers of the ship 10. Keep papers and properties of crew
captain? memberswhomightdie
11. Conduct himself according to the
A: instuctionsoftheshipagent
1. To appoint or make contracts with the 12. Reporttoshipagentonarrival
crewintheshipagentsabsence,andto 13. Observe rules on the situation of lights
proposesaidcrew,shouldsaidagentbe andmaneuverstopreventcollisions
present; but the ship agent may not 14. Remain on board until the last hope to
employ any member against the save the vessel is lost and to abide by
captain'sexpressrefusal thedecisionofthemajoritywhetherto
abandonornot
2. To command the crew and direct the 15. In case of shipwreck: file marine
vessel to the port of its destination, in protest,within24hours
accordance with the instructions he 16. Comply with rules and regulation on
mayhavereceivedfromtheshipagent navigation.(Art.612)

3. Toimposecorrectionalpunishment: Q: In what cases shall the ship owner/agent be
a. Upon those who fail to comply liabletothedamagescausedbythecaptain?
withorders;or
b. Thosewantingindiscipline A:
1. Damages suffered by the vessel and its
4. Tomakecontractsforthecharterofthe cargo by reason of want of skill or
vessel in the absence of the ship agent negligenceonhispart
orofitsconsignee 2. Thefts committed by the crew,
reserving his right of action against the
guiltyparties;
96
MERCANTILELAWTEAM:
TRANSPORTATION LAW
3. Losses,fines,andconfiscationsimposed A:Incaseof:
an account of violation of customs, 1. War
police, health, and navigation laws and 2. Changeofdestination
regulations; 3. Outbreakofdisease
4. Lossesanddamagescausedbymutinies 4. Newownerofvessel.(Art.647)
on board the vessel or by reason of
faults committed by the crew in the Q:Whoistheshipownerofavessel?
service and defense of the same, if he
doesnotprovethathemadetimelyuse A: The person in possession, management,
of all his authority to prevent or avoid controloverthevessel,andtherighttodirecther
them; navigation. While in their possession, the ship
5. Those caused by the misuse of the ownersalsoreceivefreightearnedandpaid.
powers;
6. Forthosearisingbyreasonofhisgoing Q:Whoisashipagent?
out of his course or taking a course
whichheshouldnothavetakenwithout A: The person entrusted with provisioning or
sufficient cause, in the opinion of the representingthevesselintheportinwhichitmay
officersofthevessel,atameetingwith be found. Hence, whether acting as agent of the

the shippers or supercargoes who may owner of the vessel or as agent of the charterer,

beonboard.Noexceptionswhatsoever he will be considered as the ship agent and may
shallexempthimfromthisobligation; be held liable as such, as long as he is the one
7. For those arising by reason of his that provisions or represents the vessel.
voluntarily entering a port other than (Macondray & Co., Inc. v. Provident Insurance
that of his destination, outside of the Corp,G.R.No.154305,Dec.9,2004)
cases or without the formalities
referredtoinArticle612;and Q: What are the civil liabilities of ship owners
8. For those arising by reason of non andagents?
observance of the provisions contained
in the regulations on situation of lights A:
rd
and manoeuvres for the purpose of 1. Damages suffered by a 3 person for
preventingcollisions(Art.618). tortcommittedbythecaptain;
2. Contracts entered for provisioning and
Note: Ship owner/agent is not liable for the repairofvessel;
obligations contracted by the captain if the latter 3. Indemnities in favor of 3rd persons
exceeds his powers and privileges inherent in his arisingfromtheconductofthecaptain
position of those which may have been conferred fromthecareofgoods;and
upon him by the former. However, if the amount 4. Damagesincaseofcollisionduetofault
claimedwereusedforthebenefitofthevessel,the or negligence or want of skill of the
shipownerorshipagentisliable. captain.

Q:Inwhatcausesshallthecaptainbenotliable Q:Whatarethepowers,functions,andliabilities
forlossorinjurytopersonsorcargo? ofshipagents?

A: A:
1. Forcemajeure 1. Indemnity for expenses incurred for
2. Obligations contracted for the vessels shipsbenefit.
benefit, except when the captain 2. Discharge of captain and/or crew
expresslyagreestobeliable. members. The following are the rules
observedbytheshipagent:
Q: May the captain have himself substituted by a. Captain and/or crew members
another? contract not for a definite period
orvoyage:
A: No, in the absence of consent from the ship
agent, and should he do so he shall be liable for i. Before vessel sets out to sea:
alltheactsofthesubstitute.(Art.615) Ship agent at his discretion may
discharge the captain and
Q: When may the captain and crew members members of the crew. Ship
rescindtheircontractualemployment? agent must pay captain and/or
97

crew members salaries earned Q:Whatistherationaleofthisdoctrine?
accordingtotheircontracts,and
without any indemnity A: To offset against innumerable hazards and
whatsoever, unless there is an perils in sea voyage and to encourage ship
expressedagreement; building and maritime commerce. By
abandonment, the ship owner and ship agent
ii. During voyage: Captain and/or exempt themselves from liability, thus avoiding
crew member shall receive the possibility of risking his whole fortune in the
salary until return to the port business (Real and hypothecary nature of
where contract was made. MaritimeLaw)
Article 637 of the Code of
Commerce enumerates the just Q: What are the cases in which the doctrine of
causesfordischarge. limitedliabilityisallowed?

b. Where captain and members of A:
the crews contracts with ship 1. Civil liability of the ship agent or
agent be for a definite period or shipowner for the indemnities in favor
voyage: ofthirdpersons;(Art.587)
2. Civil liability of the coowners of the
i. Captain and/or crew members vessel for the results of the acts of the
may not be discharged until captain;(Art.590)
after the fulfillment of their 3. If the vessel and her cargo be totally
contracts, except by reason of lost,byreasonofcaptureorshipwreck,
insubordination in serious alltherightsshallbeextinguished,both
matters,robbery,theft,habitual as regards the right of the crew to
drunkenness, or damage caused demandwagesandtherightoftheship
to the vessel or to its cargo agent to recover the advances made;
through malice or manifest or (Art.643)or
proven negligence. (Art. 605, 4. Extinction of civil liability incurred by
CodeofCommerce) the shipowner or agent in cases of
maritimecollisions.(Art.837)
ii. If the captain should be the
vessels coowner, he may not Q: What are the exceptions to the doctrine of
be discharged unless ship agent limitedliability?
returns his amount of interest
therein. In the absence of A:
agreementbetweentheparties, 1. Repairs and provisioning of the vessel
interest shall be appraised by beforethelossofthevessel;(Art.586)
expertsappointedinthemanner
establishedbycivilprocedure. 2. Insurance proceeds. If the vessel is
insured, the proceeds will go to the
Q:WhatistheDoctrineofLimitedLiability? persons entitled to claim from the
shipowner; (Vasquez v. CA, G.R. No. L
A: Also called the no vessel, no liability 42926,Sept.13,1985)
doctrine,itprovidesthatliabilityofshipowneris
limited to ship owners interest over the vessel. 3. Workmens Compensation cases (now
Consequently, in case of loss, the ship owners Employees Compensation under the
liability is also extinguished. Limited liability LaborCode);(Ochingv.SanDiego,G.R.
likewise extends to ships appurtenances, No.775,Dec.17,1946)
equipment, freightage, and insurance proceeds.
Theshipownersoragentsliabilityismerelyco 4. Whentheshipownerisguiltyoffaultor
extensivewithhisinterestinthevessel,suchthat negligence;
a total loss of the vessel results in the liabilitys
extinction. The vessels total destruction Note:Butifthecaptainistheonewhois
extinguishes maritime liens because there is no guilty, doctrine may still be invoked,
longeranyrestowhichtheycanattach.(Monarch hence,abandonmentisstillanoption.
Insurancev.CA,G.R.No.92735,June8,2000)
5. Privatecarrier;or

98
MERCANTILELAWTEAM:
TRANSPORTATION LAW
6. Voyageisnotmaritimeincharacter. Q: Who shall be liable for the amount of the

generalaverages?
Q:Ifavesselwasinsured,maytheclaimantsgo
aftertheinsuranceproceeds? A:Allpersonshavinganinterestinthevesseland
cargothereinatthetimeoftheoccurrenceofthe
A.Yes.Incaseofalostvessel,theclaimantsmay averageshallcontribute.(Art.812)
go after the proceeds of the insurance covering
thevessel.(1999BarQuestion) Q: Who shall be liable for the amount of the
particularaverages?
Q:Doesthetotaldestructionofthevesselaffect
theliabilityoftheshipownerforrepairsonthe A:Theownerofthethingswhichgaverisetothe
vesselcompletedbeforeitsloss? expenses or suffered the damage shall bear the
simpleorparticularaverages(Art.810).
A:No.(2000BarQuestion)
Q: What are the distinctions between general
C.ACCIDENTSANDDAMAGESINMARITIME averageandparticularaverage?
COMMERCE A:
GENERALAVERAGE PARTICULARAVERAGE
Q: What are the accidents in maritime
Boththeshipandcargo No common danger to
commerce?
aresubjecttothesame both the vessel and the
danger cargo
A: There is a deliberate Expenses and damages
1. Averages sacrifice of part of the are not deliberately
2. Arrivalunderstress vessel,cargo,orboth made
3. Collision Damage or expenses Didnotinuretocommon
4. Shipwreck incurred to the vessel, benefit and profit of all
its cargo, or both, personsinterestedinthe
Q:Whatareaverages? redounded to the vesselandhercargo.
benefit of the
A:Allextraordinaryoraccidentalexpenseswhich respectiveowners.
may be incurred during the voyage for the All those who have Only the owner of the
preservationofthevesselorcargoorboth. benefited shall satisfy goods benefiting from
theaverage. the damage shall bear
Q:Whatarethekindsofaverages? theexpenseofaverage.

A: Q: What are goods not covered by general
1. General average Damages or averageevenifnotsacrificed?
expenses deliberately caused in order
to save the vessel, its cargo or both A:
fromrealandknownrisk. 1. Goods not recorded in the books or
recordsofthevessel(Art.855[2])
2. Particular average Damages or
expenses caused to the vessel or cargo 2. Fuelforthevesselifthereismorethan
that did not inure to the common sufficient fuel for the voyage (Rule IX,
benefit, and borne by respective YorkAntwerpRule)
owners.
Q:Whatisjettison?
Q:Whataretherequisitesforgeneralaverage?
A: Act of throwing overboard part of a vessels
A: cargo or hull in hopes of saving a ship from
1. Commondangerpresent; sinking.
2. Deliberatesacrificeofpartofthevessel
orcargo; Q: What is the order of goods to be cast
3. Successful saving of vessel and/or overboardincaseofjettison?
cargo;and
4. Properprocedureandlegalsteps. A:
1. Those on deck, preferring the bigger
bulkwithleastvalue.
99

2. Those below upper deck, beginning unless a departure therefrom becomes
withtheheaviestwithleastutility. necessary to avoid imminent danger. The
vessel which does not make such strict
Q:Distinguishbetweenoverseasandinterisland observanceisliable.
traderegardingreimbursementandpaymentof
generalaveragesonjettisoneddeckcargo. 3. Third Zone time when collision is
certainanduptothetimeofimpact.
A: Note: An error at this point no longer
1. In case of overseas trade, the York bearsanyconsequence.
Antwerp Rules prohibit the loading of
cargo on deck. In case such cargo is Q:Whatisanerrorinextremis?
jettisoned, the owner will not be
entitled to reimbursement in view of A: The sudden movement made by a faultless
the violation. If the cargo were saved, vessel during the third zone of collision with
the owner must contribute to general anothervesselwhichisatfaultunderthesecond
average. zone. Even if sudden movement is wrong, no
2. In case of interisland trade, the York responsibilitywillfallonthefaultlessvessel.
Antwerp Rules allow deck cargo. If the
cargo loaded on deck is jettisoned as a Q: What are the rules governing liabilities of
result of which the vessel was saved, partiesincaseofcollision?
the cargo owner is entitled to
reimbursement. If the cargo is saved, A:
thecargoownermustcontributetothe 1. OnevesselatfaultTheshipownerof
generalaverage. such vessel shall be liable for all
resultingdamages.
Reason: In interisland trade, voyages are usually
shortandthereareinterveningislandsandtheseas 2. BothvesselsatfaultEachvesselshall
aregenerallynotrough.Inoverseastrade,thevessel suffer their respective losses but as
is exposed for many days to the peril of the sea regardstheownersofthecargoes,both
makingdeckcargoisdangeroustonavigation. vessels shall be jointly and severally
liable.
Q:Whatiscollision?
3. VesselatfaultnotknownEachvessel
A:Itistheimpactoftwomovingvessels. shallsufferitsownlossesandbothshall
besolidarilyliableforlosesordamages
Q:Whatisallision? on the cargo. (Doctrine of Inscrutable
Fault).
A:Itistheimpactbetweenamovingvesselanda
stationaryone. 4. Fortuitous event Each shall bear its
owndamage.
Q:Whatarethezonesoftimeinthecollisionof
vessel? 5. Third vessel at fault The third vessel
shall be liable for losses and damages
A: sustained.
1. First zone all time up to the moment
whenriskofcollisionbegins. Q:Whatistheroleofaprotestwithrespectto
collisions?
Note:Onevesselisaprivilegedvesseland
the other is a vessel required to take A: The action for recovery of damages arising
actiontoavoidcollision. fromcollisionscannotbeadmittedifaprotestor
declaration is not presented within twentyfour
2. Second zone time between moment hours before the competent authority of the
when risk of collision begins and point where the collision took place, or that of
moment it becomes practically a the first port of arrival of the vessel, if in
certainty. Philippineterritory,andtotheFilipinoconsulifit
occurredinaforeigncountry(Art.835).
Note: In this zone, the conduct of the
vessels are primordial. It is in this zone
that vessels must observe nautical rules,
100
MERCANTILELAWTEAM:
TRANSPORTATION LAW
Note: Failure to make a protest is not an and the captain of SS Joanna was not asleep.
impediment to the maintenance of a civil action Whoshouldbearthedamagestothevesselsand
basedonquasidelict. theircargoes?

Q:Whenisaprotestrequired? A: The ship owners of SS Anna and M/V Joanna
shalleachbeartheirrespectivelossofvessels.For
A: thelossesanddamagessufferedbytheircargoes,
1. Arrivalunderstress;(Art.612[8]) both ship owners are solidarily liable. (1998 Bar
2. Shipwreck;(Arts.601[15],843) Question)
3. If the vessel has gone through a
hurricane or where the captain believes Q:Whatisashipwreck?
that the cargo has suffered damages or
averages;(Art.642)and A:Thelossofthevesselatseaasaconsequence
4. Maritimecollision.(Art.835) of its grounding, or running against an object in
sea or on the coast. If the wreck was due to
Q:Whocanfileamaritimeprotest? malice, negligence, or lack of skill of the captain,
the owner of the vessel may demand indemnity
A: fromsaidcaptain.
1. In case of maritime collision, the
passenger or other persons interested Q:Whoshallbearthelossesinshipwreck?
whomaybeonboardthevesselorwho
were in a condition who can make A:
known their wishes (Arts. 835836) or GR:Thelossofashipandhercargoshallfall
thecaptainhimself.(VerzosaandRuizv. upontheirrespectiveowners.(Art.840)
Lim,G.R.No.20145,Nov.15,1923)
XPN: If the wreck was due to malice,
2. Thecaptainincasesof: negligence, or lack of skill of the captain, or
a. Arrivalunderstress because the vessel put to sea was
b. Shipwreck;or insufficientlyrepairedandequipped,theship
c. If the vessel has gone through a agentortheshippersmaydemandindemnity
hurricane or where the captain from the captain for the damage caused to
believes that the cargo has the vessel or to the cargo by the accident.
suffereddamagesoraverages. (Art.841)

Q: Two vessels figured in a collision resulting in Q:Whatisarrivalunderstress?
considerablelossofcargo.Thedamagedvessels
were safely conducted to a port. Kim, a A: It is the arrival of a vessel at the nearest and
passenger and Ruby, a shipper who suffered most convenient port, if during the voyage the
damage to his cargo, did not file maritime vessel cannot continue the trip to the port of
protest.CanKimandRubysuccessfullymaintain destination on account of the lack of provisions,
anactiontorecoverlossesanddamagesarising wellfoundedfearofseizure,privateersorpirates,
fromthecollision? orbyreasonofanyaccidentoftheseadisablingit
tonavigate.(Art.819)
A:Ruby,theshippercansuccessfullymaintainan
actiontorecoverlossesanddamagesarisingfrom Note:Inarrivalunderstress,thecaptainmustfilea
the collision notwithstanding his failure to file a Protest which is merely a disclaimer for the
maritime protest since the filing thereof is shipownernottobeliable.
required only on the part of Kim, who, being a
passenger of the vessel at the time of the Q:Whenisarrivalunderstressunlawful?
collision, was expected to know the
circumstancesofthecollision.Kim'sfailuretofile A:
a maritime protest will therefore prevent him 1. Lack of provisions is due to negligence
from successfully maintaining an action to tocarryaccordingtousageandcustoms
recover his losses and damages. (Art 836).(2007 2. Risk of enemy not well known of
BarQuestion) manifest
3. Defect of vessel is due to improper
Q: During a typhoon, vessel SS Anna collided repair;or
with M/V Joanna. The collision would be 4. Malice, negligence, lack of foresight or
avoidedifthecaptainofSSAnnawasnotdrunk skillofcaptain.(Art.820)

101

D.CARRIAGEOFGOODSBYSEAACT year after the delivery of the goods." Which of
thesetwoprovisionsshouldprevail?
Q:WhenwillCOGSAapply?
A: Clause 18 must of necessity yield to the
A: It will only be applied in terms of loss or provisionsoftheCarriageofGoodsbySeaActin
damage of goods transported to and from view of the proviso contained in the same Act
Philippineportsinforeigntrade.Itmayalsoapply whichsays:"Anyclause,covenant,oragreement
to domestic trade when there is a paramount in a contract of carriage relieving the carrier or
clauseinthecontract. theshipfromliabilityforlossordamagetoorin
connection with the goods or lessening such
Q:WhatcasesarecoveredundertheCOGSA? liability otherwise than as provided in this Act,
shall be null and void and of no effect." (Sec. 3)
A: It applies only in case of loss or damage, and This means that a carrier cannot limit its liability
nottomisdeliveryorconversionofgoods.(Angv. in a manner contrary to what is provided for in
American Steamship Agencies, Inc., G.R. No. L said Act, and so clause 18 of the bill of lading
22491,Jan.27,2967) mustofnecessitybenullandvoid.(E.E.Elser,Inc.
v.CA,G.R.No.L6517,Nov.29,1954)
Also, the deterioration of goods due to delay in
their transportation constitutes "loss" or Q:Whenshouldsuitsforlossordamageofcargo
"damage" within the meaning of Sec. 3(6) of bebrought?
COGSA. (Mitsui O.S.K. Lines Ltd. v. CA, G.R. No.
119571,Mar.11,1998) A: The suit should be brought within one year
from:
Q: When should notice be filed in case of 1. Delivery of the goods, in case of
damagetogoodsundertheCOGSA? damage;or
2. The date when the goods should have
A: beendelivered,incaseofloss.
1. IfthedamageisapparentNoticemust
be immediately given. The notice may Q: To whom should such delivery be made as
eitherbeinwritingororally. basisofthecomputationoftheoneyearperiod?

2. If the damage is not apparent Notice A: The oneyear period is computed from the
must be given within 3 days after delivery of goods to the operator and not to the
delivery. consignee.

Q: What is the consequence if no notice was
Q:Whatinstancesdotheoneyearperiodapply?
filed?

A:
A:Thereisnoconsequenceontherighttobring
1. Amendment of pleadings for lack of
suitifnonoticeisfiledunlikeundertheCodeof
jurisdiction
Commerce. It only gives rise to a presumption
2. Filingofthirdpartycomplaint
that the goods are delivered in the same
3. Loss or damage to cargo, excluding
conditionastheyareshipped.
delayormisdelivery

4. Subrogation.(Art2207,NCC)
There is also no consequence if the

transportation charges and expenses are paid
Q: When is the one year period in the COGSA
unlikeundertheCodeofCommerce.
interrupted?

Q: Clause 18 of the bill of lading provides that
A:
the owner should not be liable for loss or
1. Whenanactionisfiledincourt;or
damage of cargo unless written notice thereof
2. When theres a contrary agreement
was given to the carrier within 30 days after
betweentheparties
receipt of the goods. However, Section 3 of the

CarriageofGoodsbySeaActprovidesthateven

if a notice of loss or damage is not given as

required, "that fact shall not affect or prejudice

therightoftheshippertobringsuitwithinone

102
MERCANTILELAWTEAM:
TRANSPORTATION LAW
Q: Is Art. 1155 of the Civil Code providing that 1. The liability limit is set at $500 per
the prescription of actions is interrupted by the packageorcustomaryfreightunlessthe
making of an extrajudicial written demand by nature and value of such goods is
the creditor applicable also to actions brought declaredbytheshipper.
undertheCOGSA? 2. Shipper and carrier may agree on
another maximum amount, but not
A:No,writtenclaimsdoesnottolltherunningof more than amount of damage actually
the oneyear prescriptive period under the sustained.
COGSA. (Dole Philippines, Inc. v. Maritime
Company of the Philippines, G.R. No. L61352, Note:Whenthepackagesareshippedinacontainer
Feb.27,1987) supplied by carrier and the number of such units is
stated in the bill of lading, each unit and not the
Q:Whoarethepersonswhocangivenoticeto, containerconstitutethepackage.
andbringsuitagainstthecarrier?
Q: What are the instances where there is no
A: liabilityunderCOGSA?
1. Theshipper
2. Theconsignee;or A:
3. Anylegalholderofthebillofladinglike 1. if the nature or value of goods
the indorsee, subrogee, or the insurer knowingly and fraudulently misstated
ofthegoods.(Kuyv.EverettSteamship byshipper
Corporation, G.R. No. L5554, May 27, 2. if damage resulted from dangerous
1953) nature of shipment loaded without
consentofcarrier
Q: Does the oneyear prescriptive period within 3. if unseaworthiness not due to
whichtofileacaseagainstthecarrieralsoapply negligence
to a claim filed by an insurer who stands as a 4. ifdeviationwastosavelifeorproperty
subrogeetotheinsured? atsea.

A: Yes, it includes the insurer of goods. Also, VI.PUBLICSERVICEACT
whether the insurer files a third party complaint
or maintains an independent action is of no A.DEFINITIONOFPUBLICUTILITY
moment(FilipinoMerchantsInsuranceCo.,Inc.v.
Alejandro,G.R.No.L54140,Oct.14,1986). Q:Whatisapublicutility?

Note: The ruling in the abovecited case should A: A business or service engaged in regularly
applyonlytosuitsagainstthecarrierfiledeitherby supplying the public with some commodity or
the shipper, the consignee or the insurer, not to service of public consequencesush aselectricity,
suitsbytheinsuredagainsttheinsurer.Thebasisof gas, water, transportation, telephone or
the insurers liability is the insurance contract and telegraphservice.
suchclaimprescribesin10years,inaccordancewith
Art. 1144 of the Civil Code. (Mayer Steel Pipe Q:Whatisapublicservice?
Corporationv.CA,G.R.No.124050,June19,1997)
A:Everypersonthatmayown,operate,manage,
Q: What is the prescriptive period in case of controlinthePhilippines,forhire/compensation,
misdeliveryandconversionofgoods? with general/limited clientele whether
permanent, occasional or accidental, and done
A: In case of misdelivery or conversion, the for general business purposes, any common
properperiodsare: carrier, railroad, street railway, traction railway,
1. Ifthereisawrittencontract10years subway motor vehicle, steamboat, or steamship
(Art.1144,CivilCode) line, ferries and watercraft, shipyard, iceplant,
2. Oralcontract6years(Art.1145) electriclight,heatandpoweroranyotherpublic
3. Forquasidelict4years(Art.1146) utility.

Q: What is the amount of the carriers liability
undertheCOGSA?
A:
103

B.NECESSITYFORCERTIFICATEOFPUBLIC Q: Does the CPC confer upon the holder any
CONVENIENCE proprietaryrightorinterestintheroutecovered
thereby?
Q: What is a Certificate of Public Convenience
(CPC)? A: No. (Luque v. Villegas, G.R. No. L22545, Nov.
28, 1969). However, with respect to other
A: An authorization issued for the operation of persons and other public utilities, a certificate of
public services for which no franchise, either publicconvenienceasproperty,whichrepresents
municipal or legislative, is required by law, such therightandauthoritytooperateitsfacilitiesfor
asacommoncarrier. publicservice,cannotbetakenorinterferedwith
without due process of law. Appropriate actions
Under the Public Service Law, a certificate of maybemaintainedincourtsbytheholderofthe
public convenience can be sold by the holder certificate against those who have not been
thereof because it has considerable material authorized to operate in competition with the
value and is considered a valuable asset formerandthosewhoinvadetherightswhichthe
(Raymundov.LunetaMotorCo.,G.R.No.39902, former has pursuant to the authority granted by
Nov.29,1933). the Public Service Commission (A.L. Animen
Transportation Co. v. Golingco, G.R. No. 17151,
Q: What is a certificate of public convenience Apr.6,1922)
andnecessity(CPCN)?
Q: What are the requirements for the grant of
A: A certificate issued by the appropriate certificateofpublicconvenience?
government agency for the operation of a public
service for which prior franchise is required by A:
law. 1. Applicant must be a citizen of the
Note: There is no more distinction between a CPC Philippines. If the applicant is a
and a CPCN. Unless otherwise exempt, no public Corporation, 60% of its capital must be
service shall operate without having been issued a ownedbyFilipinos
CPCoraCPCN. 2. Applicantmustprovepublicnecessity
3. Applicant must prove the operation of
Q: Chris was granted a Certificate of Public proposed public service will promote
Convenience (CPC) in 1986 to operate a ferry public interest in a proper and suitable
betweenMindoroandBatangasusingthemotor manner;and
vessel MV Gela. He stopped operations in 4. Applicant must have sufficient financial
1988 due to unserviceability of the vessel. In capability to undertake proposed
1989, Nicole was granted a CPC for the same services and meeting responsibilities
route. After a few months, she discovered that incidental to its operation. (Kilusang
Elisa was operating on her route under Chris Mayo Uno v. Garcia G.R. No. 108584,
CPC. Because Nicole filed a complaint for illegal Dec.22,1994)
operations with the Maritime Industry
Authority, Chris and Elisa jointly filed an Q: Cite instances where a certificate of public
application for sale and transfer of Chris CPC convenienceisnotnecessary?
and substitution of the vessel MV Gela with
anotherownedbyElisa.ShouldChrisandElisas A:
jointapplicationbeapproved? 1. Warehouses
2. Animaldrawn vehicles or banca
A:No.ThejointapplicationofChrisandElisafor poweredbyoarorbysail;tugboatsand
the sale and transfer of Chris CPC and lighters
substitution of the vessel MV Gela with another 3. Airshipsexceptastofixingrates
vessel owned by the transferee should not be 4. Radio companies, except as to fixing of
approved. The certificate of public convenience rates
andMVGelaareinseparable.Theunserviceability 5. Iceplants
of the vessel covered by the certificate had 6. Publicmarket
likewiserenderedineffectivethecertificateitself, 7. Publicutilitiesoperatedbythenational
and the holder thereof may not legally transfer government or political subdivision
the same to another. (Cohon v. CA, G.R. No. exceptastorates.
82558,Aug20,1990)(1992BarQuestion)

104
MERCANTILELAWTEAM:
TRANSPORTATION LAW
Q: What are the grounds that oppositors may The fact that it is only one trip and of little
raisetotheapplicationforacertificateofpublic consequenceisnotsufficientreasontograntthe
convenience? application. (Yangco v. Esteban, G.R. No. 38586,
Aug.18,1933)
A:
1. Theareahasalreadyawellestablished Q:WhatistheProtectionofInvestmentRule?
operatorprioroperatorrule.
2. Interpose an objection stating that the A: The law contemplates that the first licensee
grantoftheapplicationwouldresultto willbeprotectedinhisinvestmentandwillnotbe
aruinouscompetition. subjectedtoaruinouscompetition.
3. Attack the citizenship of the applicant
(Sec.11,Art.XIIofthe1987Constitution So long as an operator under a prior license
prohibits the granting of franchise or complies with its terms and conditions and the
certificate for the operation of public reasonablerulesandregulationsforitsoperation,
utility in favor of nonFilipino citizens); andmeetsthereasonabledemandsofthepublic,
or it will be protected rather than destroy its
4. The applicant does not have the investmentbythegrantingofthesecondlicense
necessaryfinancialcapacity. to another person for the same thing over the
samerouteoftravel.
Q:Whatistheprioroperatorrule?
Note: The "prior operator" and "protection of
A: Provides existing franchise operator investment" rules cannot take precedence over the
preferential right within authorized territory as convenience of the public. (Martires Ereno Co. v.
long as said operator renders satisfactory and Public Service Commission, G.R. No. L25962, Sept.
economical service. This rule subordinates the 30,1975)
prior applicant rule which gives first applicant
priority only if things and circumstances are C.FIXINGOFRATES
equal. A prior operator must be given the
opportunity to extend its transportation services Q:Whohasthepowertofixrates?
before permitting a new operator to operate in
theterritoryofsaidprioroperator. A:PublicServiceCommision

Q: What are the exceptions of prior operator Q: What is the extent of power by the
rule? Commissiontofixrates?

A: Where public interest would be better served A: The Public Service Commission has the power
bythenewoperator: tofixanddeterminethefollowingwhichshallbe
imposedobservedandfollowedthereafterbyany
1. Where the old operator failed to make publicservice:
anoffertomeettheincreaseintraffic; 1. Individualorjointrates
2. Where the CPC granted to the new 2. Tolls
operatorsamaidencertificate; 3. Charges
3. Whentheapplicationoftherulewould 4. Classifications
beconducivetomonopoly. 5. Schedules
6. Commutation
Q:WhatisthePriorApplicantRule? 7. Mileage
8. Kilometrage
A: Applies to situations wherein two applicants 9. Otherspecialrates.(Sec16)
are applying for a certificate of public
convenience over a given territory. Where both Q:MaytheCommissionapproveratesproposed
applicants are similarly situated, the prior bypublicservices?
applicantshallhavethecertificateovertheother.
A: Yes. The Commission may, in its discretion,
Q:WhatistheThirdOperatorRule? approve rates proposed by public services
provisionally and without necessity of any
A: Where two operators are more than serving hearing;butitshallcallahearingthereonwithin
the public there is no reason to permit a third thirty days, thereafter, upon publication and
operator to engage in competition with them. notice to the concerns operating in the territory
105

affected.In case the public service equipmentof Enterprises, Inc. v. IAC, G.R. No. 64693, Apr. 27,
an operator is used principally or secondarily for 1984)
the promotion of a private business, the net
profits of said private business shall be Q: May the registered owner of the vehicle be
considered in relation with the public service of allowedtoprovethatthereisalreadyatransfer
suchoperatorforthepurposeoffixingtherates. ofownershiptoanotherpersonunderthekabit
(Sec16) system?

Q: Cite examples of public utilities which A: No. One of the primary factors considered in
certificateofpublicconvenienceisnotnecessary thegrantingofacertificateofpublicconvenience
exceptastofixingofrated. for the business of public transportation is the
financial capacity of the holder of the license, so
1. Airships thatliabilitiesarisingfromaccidentsmaybeduly
2. Radiocompanies compensated.The kabitsystem renders illusory
3. Publicutilitiesoperatedbythenational suchpurposeand,worse,maystillbeavailed of
governmentorpoliticalsubdivision bythegranteetoescapecivilliabilitycausedbya
negligentuseofavehicleownedbyanotherand
Q: In determining the just and reasonable rates operatedunderhislicense.
to be charged by a public utility,what are
thethree major factors that should be Ifaregisteredownerisallowedtoescapeliability
consideredbytheregulatingagency? by proving who the supposed owner of the
vehicleis,itwouldbeeasyforhimtotransferthe
A: subject vehicle to another who possesses no
1. Rateofreturn propertywithwhichtorespondfinanciallyforthe
2. Ratebaseand damage done. (Lim v. CA, G.R. No. 125817, Jan.
3. The return itself or the computed 16,2002)
revenue to be earned by the public
utility based on the rate of return and Q: What is the reason behind the proscription
rate base (Republic vs Meralco, GR No. againstthekabitsystem?
141314,November15,2002).
A: The thrust of the law in enjoining the kabit
Note:Therateofreturnofapublicutility system is not so much as to penalize the parties
is not prescribed by administrative and but to identify the person upon whom
judicial pronouncements. The Supreme responsibilitymaybefixedincaseofanaccident
Courthasconsistentlyadopteda12%rate withtheendviewofprotectingtheridingpublic.
ofreturnforpublicutilities(Ibid). Thepolicythereforelosesitsforceifthepublicat
largeisnotdeceived,muchlessinvolved.(Limv.
Q: Are proceeds from public utilities excluded CA,G.R.No.125817,Jan.16,2002)
fromgrossincomefortaxpurposes?
Q:Whatisthesocalledboundarysystem?
A:Yes(Sec.32[B]NIRC).
A: Under this system the driver is engaged to
D.UNLAWFULARRANGEMENTS drive the owner/operators unit and pays the
latterafeecommonlycalledboundaryfortheuse
Q:Whatisthesocalledkabitsystem? oftheunit.Whateverheearnedinexcessofthat
amount is his income. (Paguio Transport Corp. v.
A: It is an arrangement whereby a person who NLRC,G.R.No.119500,Aug.28,1998)
has been granted the certificate allows other
persons who own motor vehicles to operate Q:Whatkindofrelationshipexistsbetweenthe
under his license, sometimes for a fee or owner of the vehicle and the driver under a
percentageoftheearnings.(2005BarQuestion) "boundarysystem"arrangement?

Note:Althoughnotoutrightlypenalizedasacriminal A: The relationship between jeepney
offense,thekabitsystemisinvariablyrecognizedas owners/operators on one hand and jeepney
being contrary to public policy and therefore, void drivers on the other under the boundary system
andinexistentunderArt.1409oftheNewCivilCode.
is that of employeremployee and not of lessor
It is a fundamental principle that the court will not
lessee. (Martinez v. NLRC, G.R. No. 117495, May
aid either party to enforce an illegal contract, but
will leave them both where it finds them. (Lita
29,1997)

106
MERCANTILELAWTEAM:
TRANSPORTATION LAW
The features which characterize, the "boundary VII.THEWARSAWCONVENTION

system" namely, the fact that the driver does
notreceiveafixedwagebutgetsonlytheexcess A.APPLICABILITY
oftheamountoffarescollectedbyhimoverthe
amount he pays to the jeepowner, and that the Q:Whenisthislawapplicable?
gasolineconsumedbythejeepisfortheaccount
ofthedriverarenotsufficienttowithdraw,the A: This Convention applies to all international
relationship between them from that of the carriage of persons, luggage or goods performed
employerandemployee.(NationalLaborUnionv. by aircraft for reward. It applies equally to
Dinglasan,G.R.No.L14183,Nov.4,1993) gratuitouscarriagebyaircraftperformedbyanair
transportundertaking.(Art.1[1])
E.APPROVALOFSALE,ENCUMBRANCEORLEASE
OFPROPERTY Q:Whatisaninternationaltransportation?

Q:Whataretheguidelinestoeliminatethesale A: Any carriage in which, according to the
andtransferofexpiredand/ordeadCPCs? contract made by the parties, the place of
departure and the place of destination, whether
A: or not there be a break in the carriage or a
1. No approval of sale and transfer of a transshipment,aresituatedeither:
CPC shall be accepted where the 1. Within the territories of two High
validity of CPC being conveyed is less ContractingParties;or
than 6 months on the date of its filing 2. Within the territory of a single High
withtheLTFRB. Contracting Party, if there is an agreed
2. Noapplicationforapprovalofsaleand stoppingplacewithinaterritorysubject
transfer of a CPC shall be accepted tothesovereignty,suzerainty,mandate
unlesstheunitsauthorizedthereinare or authority of another Power, even
registeredwiththeLTOforthecurrent thoughthatPowerisnotapartytothe
year. Convention.(Art.1[2])
3. Where the authorized units under the
CPC conveyed have all not been Note:AHighContractingPartyisoneoftheoriginal
registeredwiththeLTOforthecurrent partiestotheconvention.
year, the application for the approval
of sale and transfer will be accepted B.LIMITATIONOFLIABILITY
and processed only for the actual
number of registered units Q:Whatarethelimitationstotheliabilityofair
correspondingtotheCPCconveyed. carriers?
4. Noapplicationforapprovalofsaleand
transfer of a CPC shall be accepted, A:
unless all fees/dues have been fully 1. In the carriage of persons 250,000
paidtotheLTOandLTFRB,andtaxesto francs for each passenger.
theBIR(DOTCOrder201034). Nevertheless, by special contract, the
carrierandthepassengermayagreeto
Q: Is the approval by the Public Utility ahigherlimitofliability.
Commissionofthesale,encumbranceorleaseof
propertyisaconditionprecedenttothevalidity 2. In the carriage of registered baggage
ofacontract? and of cargo Two hundred and fifty
(250)francsperkilogramme,unlessthe
A: No. While in the old law the sale without the passenger or consignor has made, at
approval of the Public Utility Commission was thetimewhenthepackagewashanded
declarednullandvoid,underCommonwealthAct overtothecarrier,aspecialdeclaration
146, the new law, the sale may not only be ofinterestindeliveryatdestinationand
negotiated but completed before said approval. has paid a supplementary sum if the
In other words, the approval by the Commission casesorequires.
isnotaconditionprecedenttothevalidityofthe
contract. The approval is only necessary to Note:Inthecaseofloss,damageordelay
protect public interest (Darang vs. Belizar, G.R. ofpartofregisteredbaggageorcargo,or
No.L19487,January31,1967). of any object contained therein, the
weight to be taken into consideration in
determining the amount to which the

107

carrier'sliabilityislimitedshallbeonlythe complaint within the reglamentary period. (United
total weight of the package or packages Airlinesv.Uy,G.R.No.127768,Nov.19,1999)
concerned. Nevertheless, when the loss,
damage or delay of a part of the Q: Could a person recover a claim covered by
registered baggage or cargo, or of an WarsawConventionafterthelapsetwoyears?
objectcontainedtherein,affectsthevalue
of other packages covered by the same A: No. A claim covered by the Warsaw
baggagecheckorthesameairwaybill,the Convention can no longer be recovered under
total weight of such package or packages locallaw,ifthestatuteoflimitationsoftwoyears
shall also be taken into consideration in
hasalreadylapsed.(PAL.v.Savillo,557SCRA66)
determiningthelimitofliability.

B.WILLFULLMISCONDUCT
3. As regards objects of which the

passenger takes charge himself Five
Q:Whatconstituteswillfulmisconduct?
thousand (5,000) francs per passenger.

(Art.22)
A:Thedefinitionof"willfulmisconduct"depends

in some measure on which court is deciding the
Note: Carrier is not entitled to the
foregoinglimitifthedamageiscausedby
issue. Some common factors that courts will
willful misconduct or default on its part considerare:
(Art.25)
1. Knowledge that an action will probably
Q: Is a stipulation relieving the carrier from or resultininjuryordamage
limitingitsliabilityvalid?
2. Recklessdisregardoftheconsequences
A:No.Anyprovisiontendingtorelievethecarrier ofanaction,or
ofliabilityortofixalowerlimitthanthatwhichis
laid down in this Convention shall be null and 3. Deliberately failing to discharge a duty
void but the nullity of such provision does not related to safety. Courts may also
involve the nullity of the whole contract. (Art. considerotherfactors
23[1])
Q: Is the failure of the carrier to deliver the
Q:Whataretheexceptionstotheselimitations? passengersluggageatthedesignatedtimeand
placeipsofactoconstituteswilfulmisconduct?
A:
1. Willfulmisconduct A: No. There must be a showing that the acts
2. Defaultamountingtowillfulmisconduct complained of were impelled by an intention to
3. Acceptingpassengerswithoutticket violatethelaw,orwereinpersistentdisregardof
4. Accepting goods without airway bill or one'srights.Itmustbeevidencedbyaflagrantly
baggagewithoutbaggagecheck or shamefully wrong or improper conduct (Luna
vs.CA,GRNo.10037475,November27,1992).
Q: When will ones right to damages be
extinguished? Q: Is the carriers guessingof which luggage
contained the firearms constitutes willful
A: The right to damages shall be extinguished if misconduct?
an action is not brought within two years,
reckoned from the date of arrival at the A: Yes. The guessingof which luggage contained
destination, or from the date on which the the firearms amounted to willful misconduct
aircraft ought to have arrived, or from the date under Section 25(1) of the Warsaw Convention.
onwhichthecarriagestopped. (Northwest Airlines vs. CA, GR No. 120334,
January20,1998)
Note: Despite the express mandate that an action
fordamagesshouldbefiledwithin2yearsfromthe Q: Is the allegation of willful misconduct
arrivalattheplaceofdestination,suchruleshallnot resulting in a tort is insufficient to exclude the
beappliedwheredelayingtacticswereemployedby casefromtherealmofWarsawConvention?
airline itself in a case where a passenger wishes to
settlehiscomplaintoutofcourtbuttheairlinegave A: Yes. A cause of action based on tort did not
him the runaround, answering the passengers bringthecaseoutsidethesphereoftheWarsaw
letters but not giving in to his demands, hence, Convention. (Lhuiller vs. British Airways, GR No.
giving the passenger no time to institute the 171092,March15,2010).
108
MERCANTILELAWTEAM:

UST Golden Notes - Transportaion Law PDF

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

UST Golden Notes - Transportaion Law PDF

Transféré par

Droits d'auteur :

Formats disponibles

UST GOLDEN NOTES 2011

isvalid,butnotforwillfulacts orgross caseofitsloss,destructionordeterioration.(Art.

Q: Should the diligence of the passenger be theparties.(PhoenixAssuranceCo.,Ltd.v.United

6. Voyageisnotmaritimeincharacter. Q: Who shall be liable for the amount of the

The features which characterize, the "boundary VII.THEWARSAWCONVENTION

Vous aimerez peut-être aussi