University of the Philippines

College of Law

TRANSPORTATION AND PUBLIC UTILITY LAW1

FIRST SEMESTER, AY 2010-2011

I. General Considerations

A. Public Utilities

1. Article XII, Sec. 11, 17, 18, 19, 1987 Const.

2. CA 146 (Public Service Act), as amended, Sec. 13(b)

(a) What is a public utility?

(b) What is a public service?

J.G. Summit Holdings, Inc. v. CA, 412 SCRA

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Bagatsing v. Committee on Privatization, 246
SCRA 334
Albano v. Reyes, 175 SCRA 224
Tatad v. Garcia, 243 SCRA 436
PAL v. CAB, 270 SCRA 538

3. Regulation of Public Utilities

Republic of the Philippines v. Manila Electric

Company, 391 SCRA 700
Compare with: Freedom from Debt Coalition v.
MWSS,
539 SCRA 621
Globe Telecom Inc. v. NTC et al, 26 July 2004

B. Transportation

4. Definition
5. Public nature
(a) Public Service Act, Secs. 13, 14, 15*, 16, 18,
19 and 20 (a), (b), (e), (g), (h) and (i).

*Compare to Act No. 3108, as amended by Act No.

3316 (which used “public utility” instead of “public
service”, cited in Batangas case)

Y Transit v. NLRC, 229 SCRA 508

(b) The Certificate of Public Convenience (CPC),

the Certificate of Public Convenience and
Necessity (CPCN), and the “Prior Operator
Rule”

Raymundo v. Luneta Motor, 58 Phil. 389

Batangas Transportation v. Orlanes, 52 Phil.
455
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Course Outline of Prof. Rodrigo Lope S. Quimbo

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 San Pablo v. Pantranco, 153 SCRA 199
PAL v. CAB, supra
Teja v. IAC, 148 SCRA 347
Philippine Rabbit Bus Lines Inc. v. Gabatin, 31
July 1968
PILTEL v. NTC, et al, 28 August 2003

6. Private nature; rights and obligations of parties inter

se arising from transactions relating to
transportation

(a) absent a transportation contract

Lara v. Valencia, 104 Phil. 65

(b) arising from a transportation contract

(i) definition
(ii) elements

(c) liability of registered owner

PCI Leasing v. UCPB General Insurance,

557 SCRA 141

B. Regulation of the Transportation Industry

1. The Department of Transportation and

Communications
EO 125, Sec. 4, EO 125-A, Sec. 5

(a) Air

(i) Civil Aviation Authority of the Philippines

Republic Act No. 9497 (2008)

(ii) Civil Aeronautics Board, RA 776, as

amended,
Secs. 5, 10 (A), (C); Secs. 11, 12

PAL v. CAB, 23 SCRA 992

PAL v. CAB, supra

(b) Land

(i) Land Transportation Office

EO 125-A, Secs. 9, 11, 13(a);
Administrative Code of 1987; Title XV,
Sec. 9(1), R.A. 4136

(ii) Land Transportation Franchising and

Regulatory Board
EO 202, Secs. 1, 2, 4, 5, 6, 7;
Administrative Code of 1987, Title XV,
Secs. 15-22

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 KMU Labor Center v. Garcia, 239 SCRA
386

(c) Water

(i) Maritime Industry Authority

EO 125 Sec. 14, as amended by EO 125-
A, Sec. 3
MOA with Phil Coast Guard

See Funa v. Ermita, G.R. No. 184740,

11 February 2010

(ii) Phil. Coast Guard (R.A. No. 9993 [2009])

II. Common Carriers

(Unless otherwise indicated, reference is to the Civil Code)

A. In General

1. Definitions; essential elements; Art. 1732

U.S. v. Tan Piaco, 40 Phil. 853

Home Insurance Co. vs. American Steamship, 23
SCRA 24
De Guzman v. CA, 168 SCRA 612
Bascos v. CA, 221 SCRA 318
Planters Products Inc. v. Court of Appeals, 226 SCRA
476
Fabre v. Court of Appeals, 259 SCRA 426
Asia Lighterage and Shipping v. Court of Appeals,
409 SCRA 340
Crisostomo v. Court of Appeals, 409 SCRA 528

2. Nature of Business; power of State to regulate;

Art. 1765

Pantranco v. PSC, 70 Phil. 221

Fores v. Miranda, 105 Phil. 266

3. Nature and Basis of liability

Art. 1733

Cangco v. MRR, 38 Phil. 767

Isaac v. A.L. Ammen, 101 Phil. 1046
Phil. Rabbit v. IAC, 189 SCRA 159
LRTA v. Navidad, 397 SCRA 75

4. Classes of common carriers

Art. 1732, 1733, 1755

5. Laws applicable
Art. 1766, 1753

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 Eastern Shipping v. IAC, 150 SCRA 463

B. Common Carriage of Goods

1. Liability and presumption of negligence

Art. 1733, 1734, 1735

Ynchausti Steamship Co. vs. Dexter, 41 Phil. 289

Mirasol v. Dollar, 53 Phil. 125

2. Exemption from liability

(a) Natural disaster

Arts. 1734(1), 1739, 1740;
Art. 361, Code of Commerce

Tan Chiong v. Ynchausti, 22 Phil. 153

Martini v. Macondray, 39 Phil. 934
Eastern Shipping v. IAC, 150 SCRA 463, supra
Asia Lighterage v. Court of Appeals, 409 SCRA
340 supra
Lea Mer Industries, Inc. v. Malayan Insurance
Co. Inc., 471 SCRA 698

(b) Act of public enemy – Art. 1734(2), 1739

(c) Act or omission of shipper – Art. 1734(3), 1741

(d) Character of goods, etc.

Arts. 1734(4), 1742
Art. 366, Code of Commerce

Government v. Ynchausti, 40 Phil. 219

Southern Lines v. CA, 4 SCRA 256

(e) Order of competent authority

Arts. 1734(5), 1743

Ganzon v. Court of Appeals, 161 SCRA 646

3. Duration of Extraordinary Responsibility

Arts. 1736 to 1738

Compania Maritima v. Insurance Company, 12 SCRA

213
Lu Do v. Binamira, 101 Phil. 243
Klepper v. APL, 110 Phil. 243
Eastern Shipping v. CA, 234 SCRA 79
Delsan Transport Lines Inc. v. American Home
Assurance Corp., 498 SCRA 603

4. Agreement Limiting Liability

(a) As to diligence required

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 Arts. 1744, 1745, 1751

(b) As to amount of liability

Arts. 1749 and 1750

Heacock v. Macondray, 42 Phil 90

Shewaram v. PAL, 17 SCRA 606
Ong Yiu v. Ca, 91 SCRA 223
Pan Am v. IAC, 164 SCRA 268
Cathay Pacific v. CA, 219 SCRA 520

(c) Factors affecting agreement

Arts. 1746, 1747, 1748, 1751, 1752

5. Applicable Law in Foreign Trade

Art. 1753

6. Rules on Passenger Baggage

Arts, 1754, 1998, 2000 to 2003

C. Common Carriage of Passengers

1. Nature and extent of responsibility

Art. 1733, 1755

Isaac v. A.L. Ammen Trans. Co., supra

Landingin v. Pantranco 33 SCRA 284
Landicho v. BTCo. 52 OG 7640
Necesito v. Paras 104 Phil 75
PAL v. CA, 106 SCRA 391
Sulpicio v. CA, 246 SCRA 299
Japan Airlines v. Court of Appeals, 449 SCRA 544

2. Duration of responsibility

Cf. Article 1736, Civil Code;

Article 17, Warsaw Convention (51 O.G. 5084),
Article 698, Code of Commerce

Cangco v. MRR, supra

Del Prado v. Meralco, 52 Phil. 900
La Mallorca v. Court of Appeals, 17 SCRA 739
Bataclan v. Medina, 104 Phil. 181
Aboitiz v. CA. 179 SCRA 95
PAL v. CA, 226 SCRA 423

3. Presumption of Negligence, Art. 1756

4. Force Majeure

Bachelor Express v. CA, 188 SCRA 217

Quisumbing v. CA, 189 SCRA 605

5. Limitation of Liability; validity of stipulations

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 Art. 1757, 1758

6. Responsibility for acts of employees

Art. 1759, 1760

Bataclan v. Medina, supra
De Gillaco v. MRR, 97 Phil. 884
Maranan v. Perez, 20 SCRA 412
LRTA v. Navidad, supra

7. Responsibility for acts of strangers and co-

passengers

Art. 1763
Pilapil v. CA, 180 SCRA 546
Bachelor Express, Inc. v. CA, supra

8. Duty of passenger; effect of contributory negligence

Art. 1761, 1762

Cangco v. MRR, supra
Isaac v. A.L. Ammen, supra

C. Damages Recoverable from Common Carriers

1. In general

2. Actual or compensatory

Art. 2199, 2201, 2203, 1764, 2206

Cariaga v. LTBCo. and MRR, 110 Phil 346
Pan Am v. IAC, supra
Villa-Rey v. CA, 31 SCRA 511
PAL v. CA, 185 SCRA 110

3. Moral

Art. 2217, 2216, 2219, 2220, 2206(3)

Fores v. Miranda, supra
Air France v. Carrascoso, 18 SCRA 155
Lopez v. Pan Am, 16 SCRA 431
Ortigas v. Lufthansa, 64 SCRA 610
PAL v. Miano, 242 SCRA 235
Cathay Pacific v. Vasquez, 399 SCRA 207
See also Northwest Airlines Inc. v. Sps. Heshan, G.R.
No. 179117, 3 February 2010

4. Exemplary

Art. 2229, 2232, 2233

Mecenas v. Court of Appeals, 180 SCRA 83

5. Nominal, Temperate and Liquidated

Art. 2221, 2224, 2226

Alitalia v. IAC, 192 SCRA 9

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 Saludo v. Court of Appeals, 207 SCRA 498
Japan Airlines v. Court of Appeals, 294 SCRA 19
Savellano v. NWA, 405 SCRA 416

6. Attorney’s Fees and Interest

Art. 2208, 2210

III. Code of Commerce Provisions on Overland Transportation

(Unless otherwise indicated, reference is to Code of Commerce)

A. Scope of Overland Transportation

B. Nature of Contract, Art. 349
C. Effect of Civil Code
Art. 1766, 2270, Civil Code

D. Contract of Carriage

1. Bill of Lading

(a) Definition, Subject Matter, Art. 352

(b) Form, Contents, Art. 350, 351
(c) Function, Art. 353

2. Refusal to Transport, Art. 356

3. Doubtful declaration of contents, Art. 357
4. No Bill of Lading, Art. 354, 351

E. Responsibility of the Carrier

1. When it commences, Art. 355

2. Route, Art. 359
3. Care of Goods, Arts, 361, 362
Art. 1734, 1735, Civil Code
4. Delivery

(a) Condition of Goods, Arts. 363 to 367

(b) To whom Delivery Made, Art. 368
(c) Judicial Deposit, Art. 369; Art. 1752, Civil
Code
(d) When to be made, Arts. 370, 358
(e) Two or more carriers, Art. 373
(f) Obligation to keep registry, Art. 378
(g) Compliance with administrative regulations,
Art. 377

F. Rights and Obligations or Shipper and/or Consignee

1. Right to damages

(a) Condition imposed on right, Arts. 366, 357, 353

(b) Amount of damages for loss, Art. 372; Art.

1744, Civil Code

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(c) Amount of damages for delay, Art. 371(3)

2. Right to abandon, Art. 371, 360, 365, 363

3. Right to change consignment, Art. 360
4. Obligation to pay transportation charges, Art. 374-
376; Art. 2241(9), Civil Code
5. Obligation to return bill of lading, Art. 353(2), (3)

G. Applicability of Provisions, Art. 379

IV. Admiralty and Maritime Commerce

A. Concept of Admiralty; Jurisdiction over admiralty cases

Batas Pambansa Blg. 129, Sec. 19 (3), Sec. 33(1)

International Harvester v. Aragon, 84 Phil 363

B. Vessels

1. Meaning

Lopez v. Duruelo, 52 Phil. 229

2. Nature and acquisition of vessels

Art. 573, 574, 585, Art. 712, Civil Code

3. Registration; certificates issued; distinctions

Tariff and Customs Code, Secs. 802, et seq.
PD 761, as amended by PD 1064, 1521

4. Significance of registration of transaction affecting

vessels

Arroyo v. Yu, 54 Phil. 511

Rubiso v. Rivera, 37 Phil. 72

C. Persons Participating in Maritime Commerce

1. Shipowners and shipagents

Art. 586 - 608; 618

Standard Oil v. Castelo, 42 Phil. 256

(a) Responsibilities and liabilities

Yu Con v. Ipil, 41 Phil 770

Manila Steamship v. Abdulhaman, 100 Phil.
32

(b) The doctrine of limited liability, Art. 587

Manila Steamship v. Abdulhaman, supra

Yangco v. Laserna, 73 Phil. 330
Abueg v. San Diego, 77 Phil 730

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 Aboitiz Shipping v. General Accident Fire and
Life Assurance Corporation, Ltd., 217 SCRA
359

(c) Specific rights and prerogatives

Art. 575, 593, 594, 596, 601

2. Captains and Masters

(a) Qualifications and licensing

Rep. Act 5173, Sec. 3; Art. 609

(b) Powers and Duties

Art. 610, 611, 612, 622, 624, 625

Inter Orient v. NLRC, 235 SCRA 269

(c) Prohibited acts and transactions

Art. 613, 614, 615, 617, 621, 583

3. Other Officers and Crew

(a) Contracts and formalities, Art. 634

(b) Duties and liabilities, Art. 635
(c) Rights, Art. 636 - 647

4. Supercargoes, Art. 649-651

5. Arrastre operator

Asian Terminals, Inc. v. Daehan Fire & Marine

Insurance Co. Ltd,
G.R. No. 171194, 4 February 2010

D. Accidents and Damages in Maritime Commerce

1. Averages

(a) Nature and kinds, Art. 806 - 808

(1) Simple or Particular

(a) Defined, Art. 809

(b) Effects, Art. 810

Standard Oil v. Castelo, supra

(2) Gross or General

(a) Defined, Art. 811, 817, 818

(b) Essential Requisites, Art. 813, 814,
860

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 Magsaysay Inc. v. Agan, 96 Phil.
504

(c) Effects, Art. 812

(d) Jettison, Art. 815, 816
(e) Jason Clauses (See York-Antwerp
Rules, Rule D)

(b) Proof and Liquidation of Averages

(1) Modes, Art. 846, 847, 848

(2) Appraisal of general average, Art. 850
-855; 857
(3) Liquidation of general average, Art. 858,
865 - 869
(4) Liquidation of particular average, Art. 869

2. Arrivals Under Stress

(a) Causes, Art. 819 and 820

(b) Formalities, Art. 819, 822
(c) Expenses, Art. 821, 822
(d) Responsibility of Captain, Arts. 823-825

3. Collisions

(a) Classes and Effects

(1) Fortuitous, Art. 830, 832

(2) Culpable, Art. 826, 827 and 831
(3) Inscrutable Fault, Art. 828

(b) Presumption of loss by collision, Art. 833

(c) Liabilities

(1) shipowner or agent, Art. 837, 838

(2) captain, pilot, others, Art. 829, 834
(3) conditions, protests; Art. 835, 836, 839

4. Shipwrecks, Art. 840 - 843

(a) Salvage Law (Act No. 2616)

Barrios v. Go Thong, 7 SCRA 535

E. Special Contracts of Maritime Commerce

1. Charter Parties
(a) Definition
(b) Kinds

Planters Products v. CA, supra

Coastwise Lighterage Corp. v. CA, 245 SCRA
796

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 Lea Mer Industries v. Malayan Insurance, supra

(c) Forms and Effects, Art. 652-657

(d) Rights and Obligations of Shipowners, Art. 669-678
(e) Obligations of charterers, Arts. 679-687

Caltex Philippines v. Sulpicio Lines, G.R.

131166, 30 September 1999

(f) Rescission, Art. 688 - 692

2. Loans on Bottomry and Respondentia

(a) Loan on Bottomry, defined

(b) Loan on Respondentia, defined
(c) Character of Loan, Art. 719
(d) Forms and Requisites, Art. 720-722
(e) On What Constituted, Art. 724-725
(f) Amount, Art. 723, 726-727
(g) By Whom, Art. 728, 617, 611, 583
(h) Effects of Contract, Art. 719, 729, 726, 727 and
730

F. Bill of Lading

1. Contents, Art. 706, 707 , 713, 714

2. Probative Value, Art. 709, 710
3. Construction (see Heacock v. Macondray, 42 Phil 90,
supra)

G. Passengers on Sea Voyage

1. Nature of Contract, Art. 695

2. Obligations of Passengers, Art. 693, 699, 704, 694,
700
3. Rights of Passengers, Art. 697, 698

Sweet Lines v. CA, 121 SCRA 769

Trans-Asia Shipping v. CA, 254 SCRA 260

4. Responsibilities of Captain, Art. 701, 702, 705, 612,

703; Art. 1754, Civil Code

H. Carriage of Goods by Sea Act (Commonwealth Act. No. 65;

Public Act No. 521, 74th US Congress)

Ang v. American Steamship Agencies, 19 SCRA 123

F.H. Stevens v. Nordeutscher, 6 SCRA 180

V. International Air Transport

(Unless otherwise indicated, reference is to the Warsaw

Convention, 51 O.G. 5084; Presidential Proclamation No. 201, 51
O.G. 4933 [Oct. 1955])

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See also Carriage by Air Act (Montreal Convention, 1999)

A. Constitutionality
Santos v. Northwest, 210 SCRA 256

B. When applicable, Art 1(1)

Lhuillier v. British Airways, G.R. No. 171092, 15 March 2010

C. Liabilities under the Convention, Art. 17, 18, 19

Northwest v. Cuenca, 14 SCRA 1063 supra
Alitalia v. IAC, 192 SCRA 10

D. Limitations on Liability, Art. 22

Pan Am v. IAC, 164 SCRA 268, supra

E. When limitations unavailable, Art. 3, 25

Cathay Pacific v. CA, supra

F. Conditions on Imposition of Liability, Arts. 26, 28, 29

Santos v. Northwest, supra
Luna v. Court of Appeals, 216 SCRA 107

G. Liability of successive carriers, Art. 30

KLM Loyal Dutch Airlines v. CA, 65 SCRA 237

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