AIR

Two categories of International Air Transportation

(1) that where the place of departure and the place of destination are situated within the
territories of two High Contracting Parties regardless of whether or not there be a break in the
transportation or a trans-shipment; and
(2) that where the place of departure and the place of destination are within the territory of a
single High Contracting Party if there is an agreed stopping place within a territory subject to
the sovereignty, mandate, or authority of another power, even though the power is not a party
to the Convention. (Mapa vs. CA and Transworld)
Importance:
a. To determine the jurisdiction of the case; if the courier falls within the two categories,
the jurisdiction is either in the place of transaction, place of destination, or the place of
the principal office of the carrier.
b. Which law shall govern their relation in case of missing luggage; either the Warsaw
Convention or the Civil Code.
Tax aspect on OFF line air carrier and International Air Carrier
The general rule is that resident foreign corporations shall be liable for a 32% income
tax on their income from within the Philippines, except for resident foreign corporations that
are international carriers that derive income "from carriage of persons, excess baggage, cargo
and mail originating from the Philippines" which shall be taxed at 2 1/2% of their Gross
Philippine Billings. Petitioner, being an international carrier with no flights originating from the
Philippines, does not fall under the exception. As such, petitioner must fall under the general
rule. This principle is embodied in the Latin maxim, exception firmat regulam in casibus non
exceptis, which means, a thing not being excepted must be regarded as coming within the
purview of the general rule.
To reiterate, the correct interpretation of the above provisions is that, if an international air
carrier maintains flights to and from the Philippines, it shall be taxed at the rate of 2 1/2% of
its Gross Philippine Billings, while international air carriers that do not have flights to and
from the Philippines but nonetheless earn income from other activities in the country will be
taxed at the rate of 32% of such income. (South African Airways vs Commissioner of
Internal Revenue)
Is MIAA exempt from real estate tax of the LGU?
We rule that MIAA's Airport Lands and Buildings are exempt from real estate tax
imposed by local governments. (MIAA vs. CA)

A government instrumentality like MIAA falls under Section 133(o) of the Local
Government Code, which states:
SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless
otherwise provided herein, the exercise of the taxing powers of provinces, cities,
municipalities, and barangays shall not extend to the levy of the following:
xxxx
(o) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities and local government units.

What is Telecommunication?
Telecommunication" is, in itself, a comprehensive term. Etymologically (tele [from the
Greek] + communication), it means simply communication over distance, making no limiting
reference to the means or mode of such communication.
Is International Gateway Facility a telecommunication system?
The IGF is not in itself a telephone or telecommunication system but it is not, in any
case necessary to try to determine what constitutes a telephone system.
Eastern in its application was not asking for authority to install and operate
a domestic telephone or other telecommunications system, understood as a system for carrying
messages from one point in the Philippines to another point also in the Philippines. Eastern
was merely asking for authority to install and operate an international gateway facility, which
would mediate between the domestic telephone system of PLDT and the transmitting and
carrying facilities of Eastern. The gateway facility will permit messages originating from a
person using PLDT's domestic telephone system to enter the transmitting and carrying facilities
of Eastern, and as well allow messages incoming from abroad through Eastern's carrying
facilities to enter PLDT's domestic system. (PLDT vs. NTC)
May the NTC provisionally grant an increase to the rate of telephone companies?
No. There was necessity of a hearing by the Commission before it should have acted on
the application of the PLDT so that the public could air its opposition, particularly the herein
petitioner and the Solicitor General, representing the government. They should be given the
opportunity to substantiate their objection that the rates under the subscriber investment plan
are excessive and unreasonable and, as a consequence, the low income and middle class group
cannot afford to have telephone connections; and, that there is no need to increase the rate
because the applicant is financially sound. (Bautista vs. NTC)

Note: NTC is empowered to grant the rate provisionally but not the provisional increase
of rate.
What is Value Added Service and Special Features?
Special Feature shall refer to a feature inherent to the telephone network which
may not be ordinarily provided by a Telephone Service Provider such as call waiting, call
forwarding, conference calling, speed dialing, caller ID, malicious call ID, call transfer, charging
information, call pick-up, call barring, recorded announcement, no double connect, warm line,
wake-up call, hotline, voicemail, and special features offered to customers with PABXs such as
direct inward dialing and number hunting, and the like; provided that in the provision of the
feature, no law, rule, regulation or international convention on telecommunications is
circumvented or violated.
While instead of expressly defining what VAS is, the Implementing Rules defines what
enhanced services are, namely: a service which adds a feature or value not ordinarily provided
by a public telecommunications entity such as format, media conversion, encryption, enhanced
security features, computer processing, and the like.
Is SMS a VAS or a Special Feature; Importance
The Supreme Court held in the case of Globe Telecom Inc vs NTC and in the case of
Islacom that SMS or Short Message Service, is a special feature.
It is important because in operating a VAS, it requires additional authority from the
NPC while if the service falls as special feature, such authority is not required.
May the LGU enact an ordinance fixing the rate of cable television service to its
operator?
No. Such ordinance is void being contrary to law. As held in the case of Batangas
CATV vs. CA. Since E.O. No. 205, a general law, mandates that the regulation of CATV
operations shall be exercised by the NTC, an LGU cannot enact an ordinance or approve a
resolution in violation of the said law. LGUs must recognize that technical matters concerning
CATV operation are within the exclusive regulatory power of the NTC.
When LGUs can interfere with the operation of Cable Television Operators?
Indeed, under the general welfare clause of the Local Government Code, the local
government unit can regulate the operation of cable television but only when it encroaches on
public properties, such as the use of public streets, rights of ways, the founding of structures,
and the parceling of large regions. Beyond these parameters, its acts, such as the grant of the
franchise to Spacelink, would be ultra vires. (Zoomzat vs. People)
Is ephemeral electronic communication may be admitted as evidence?

Ephemeral electronic communications are now admissible evidence, subject to certain

conditions. "Ephemeral electronic communication" refers to telephone conversations, text
messages, chatroom sessions, streaming audio, streaming video, and other electronic forms of
communication the evidence of which is not recorded or retained. It may be proven by the
testimony of a person who was a party to the communications or has personal knowledge
thereof. (Bartolome vs Maranan)
What is the rationale why are local manufacturers of petroleum products are exempt
from excise tax for the sale in favor of international air transportation companies?
Without any international agreement on taxing fuel, it is highly likely that moves to
impose duty on international flights, either at a domestic or European level, would encourage
'tankering': carriers filling their aircraft as full as possible whenever they landed outside the
EU to avoid paying tax. Clearly this would be entirely counterproductive. Aircraft would be
travelling further than necessary to fill up in low-tax jurisdictions; in addition they would be
burning up more fuel when carrying the extra weight of a full fuel tank.
This scenario does not augur well for the Philippines' growing economy and the
booming tourism industry. Worse, our Government would be risking retaliatory action under
several bilateral agreements with various countries. Evidently, construction of the tax
exemption provision in question should give primary consideration to its broad implications on
our commitment under international agreements.
LAND
What is swerving? Is it prohibited?
"Swerving," as ordinarily understood, refers to a movement wherein a vehicle shifts from
a lane to another or to turn aside from a direct course of action or movement.
The act may become punishable when there is a sign indicating that swerving is
prohibited or where swerving partakes the nature of reckless driving.
What is reckless driving?
RA 4136. SECTION 48. Reckless Driving. - No person shall operate a motor vehicle on
any highway recklessly or without reasonable caution considering the width, traffic, grades,
crossing, curvatures, visibility and other conditions of the highway and the conditions of the
atmosphere and weather, or so as to endanger the property or the safety or rights of any person
or so as to cause excessive or unreasonable damage to the highway.
Swerving is not necessarily indicative of imprudent behavior let alone constitutive of
reckless driving. To constitute the offense of reckless driving, the act must be something more
than a mere negligence in the operation of a motor vehicle, and a willful and wanton disregard
of the consequences is required. (Sydeco vs. People)

Can the DPWH regulate, restrict, or prohibit the use of limited access facilities on
highways?
It is the DOTC, not the DPWH, which has authority to regulate, restrict, or prohibit
access to limited access facilities. (EO 546)
Thus, DO 74 and DO 215 are void because the DPWH has no authority to declare
certain expressways as limited access facilities. Under the law, it is the DOTC which is
authorized to administer and enforce all laws, rules and regulations in the field of
transportation and to regulate related activities. (Mirasol vs. DPWH)
Administrative Order no. 1 and its validity
Section 3. On limited access highways, it is unlawful for any person or group of persons
to:
(h) Drive any bicycle, tricycle, pedicab, motorcycle or any vehicle (not motorized);
The use of public highways by motor vehicles is subject to regulation as an exercise of
the police power of the state. The police power is far-reaching in scope and is the "most
essential, insistent and illimitable" of all government powers. The tendency is to extend rather
than to restrict the use of police power. The sole standard in measuring its exercise is
reasonableness. What is "reasonable" is not subject to exact definition or scientific formulation.
No all-embracing test of reasonableness exists, for its determination rests upon human
judgment applied to the facts and circumstances of each particular case.
We find that AO 1 does not impose unreasonable restrictions. It merely outlines several
precautionary measures, to which toll way users must adhere. These rules were designed to
ensure public safety and the uninhibited flow of traffic within limited access facilities. They
cover several subjects, from what lanes should be used by a certain vehicle, to maximum
vehicle height. The prohibition of certain types of vehicles is but one of these. None of these
rules violates reason. The purpose of these rules and the logic behind them are quite evident. A
toll way is not an ordinary road. The special purpose for which a toll way is constructed
necessitates the imposition of guidelines in the manner of its use and operation. Inevitably,
such rules will restrict certain rights. But the mere fact that certain rights are restricted does
not invalidate the rules.
AO 1 does not infringe upon petitioners right to travel but merely bars motorcycles,
bicycles, tricycles, pedicabs, and any non-motorized vehicles as the mode of traveling along
limited access highways. Several cheap, accessible and practical alternative modes of transport
are open to petitioners. There is nothing oppressive in being required to take a bus or drive a

car instead of ones scooter, bicycle, calesa, or motorcycle upon using a toll way. (Mirasol vs.
DPWH)
To whom regulation of Tricycle granted? Is the power of the LTO to register tricycle
already ceased upon the effectivity of the Local Government Code?
No. LTO still has the power to register tricycle.
The basic aim of police power is public good and welfare. Taxation, in its case, focuses
on the power of government to raise revenue in order to support its existence and carry out its
legitimate objectives. Although correlative to each other in many respects, the grant of one does
not necessarily carry with it the grant of the other. The two powers are, by tradition and
jurisprudence, separate and distinct powers, varying in their respective concepts, character,
scopes and limitations. To construe the tax provisions of Section 133(1) indistinctively would
result in the repeal to that extent of LTO's regulatory power which evidently has not been
intended. If it were otherwise, the law could have just said so in Section 447 and 458 of Book
III of the Local Government Code in the same manner that the specific devolution of LTFRB's
power on franchising of tricycles has been provided. Repeal by implication is not favored. The
power over tricycles granted under Section 458(a)(3)(VI) of the Local Government Code to LGUs
is the power to regulate their operation and to grant franchises for the operation thereof. The
exclusionary clause contained in the tax provisions of Section 133(1) of the Local Government
Code must not be held to have had the effect of withdrawing the express power of LTO to cause
the registration of all motor vehicles and the issuance of licenses for the driving thereof. These
functions of the LTO are essentially regulatory in nature, exercised pursuant to the police
power of the State, whose basic objectives are to achieve road safety by insuring the road
worthiness of these motor vehicles and the competence of drivers prescribed by R. A. 4136. Not
insignificant is the rule that a statute must not be construed in isolation but must be taken in
harmony with the extant body of laws.
Simply put, the power to tax such tricycle has been granted to LGU but the regulation
and registration was still on the power of LTO.
Are UBER, Grab Taxi, and Uhop Transport Network Vehicles are public utilities?
No. In the analogous case decided by the Supreme Court, US vs. Tan Piaco, the SC
considered the following:
1. The individual, copartnership, etc., etc., must be a public utility; and
2. The business in which such individual, copartnership, etc., etc., is engaged must be for
public use. So long as the individual or copartnership, etc., etc., is engaged in a purely private

enterprise, without attempting to render service to all who may apply, he can in no sense be
considered a public utility, for public use.
"Public use" means the same as "use by the public." The essential feature of the public
use is that it is not confined to privileged individuals, but is open to the indefinite public. It is
this indefinite or unrestricted quality that gives it its public character. In determining whether
a use is public, we must look not only to the character of the business to be done, but also to
the proposed mode of doing it. If the use is merely optional with the owners, or the public
benefit is merely incidental, it is not a public use, authorizing the exercise of the jurisdiction of
the public utility commission. There must be, in general, a right which the law compels the
owner to give to the general public. It is not enough that the general prosperity of the public is
promoted. Public use is not synonymous with public interest. The true criterion by which to
judge of the character of the use is whether the public may enjoy it by right or only by
permission.
Who will be held liable in case of a mishap or accident involving a car registered or
owned by one and driven, or leased, or owned by another but not yet the registered
owner?
The registered owner. The main aim of motor vehicle registration is to identify the
owner so that if any accident happens, or that any damage or injury is caused by the vehicle
on the public highways, responsibility therefor can be fixed on a definite individual, the
registered owner. Instances are numerous where vehicles running on public highways caused
accidents or injuries to pedestrians or other vehicles without positive identification of the
owner or drivers, or with very scant means of identification. It is to forestall these
circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration
is primarily ordained, in the interest of the determination of persons responsible for damages
or injuries caused on public highways.
Is the registered owner allowed to prove who the actual and real owner is, and in
accordance with such proof escape or evade responsibility and lay the same on the
person actually owning the vehicle?
We hold with the trial court that the law does not allow him to do so; the law, with its aim and
policy in mind, does not relieve him directly of the responsibility that the law fixes and places
upon him as an incident or consequence of registration. Were a registered owner allowed to
evade responsibility by proving who the supposed transferee or owner is, it would be easy for
him, by collusion with others or otherwise, to escape said responsibility and transfer the same
to an indefinite person, or to one who possesses no property with which to respond financially
for the damage or injury done. A victim of recklessness on the public highways is usually
without means to discover or identify the person actually causing the injury or damage. He has
no means other than by a recourse to the registration in the Motor Vehicles Office to determine

who is the owner. The protection that the law aims to extend to him would become illusory
were the registered owner given the opportunity to escape liability by disproving his ownership.
If the policy of the law is to be enforced and carried out, the registered owner should not be
allowed to prove the contrary to the prejudice of the person injured, that is, to prove that a
third person or another has become the owner, so that he may thereby be relieved of the
responsibility to the injured person. (Aguilar Sr. Vs Commercial Savings Bank)
WATER
Requirements for the operation of Sea Vessel
Atienza vs. Court of Appeals
1. Registration of the vessel to the MARINA
2. Certificate of Public Convenience
3. Certificate of Ownership over the said vessel.
Otherwise, the coastguard will not allow you to set sail and if accident happens and there was
an absence of any of the requirements, the owner will be held liable. (ULEP)
Scope of Seaworthiness of sea vessel
To the mind of the Court, having incomplete documents for the vessels operation renders it
unseaworthy. While seaworthiness is commonly equated with the physical aspect and condition
of the vessel for voyage as its ability to withstand the rigors of the sea, it must not be forgotten
that a vessel should be armed with the necessary documents required by the maritime rules
and regulations, both local and international. It has been written that vessel seaworthiness
further extends to cover the documents required to ensure that the vessel can enter and leave
ports without problems. (APQ Shipmanagement Co. Ltd. vs Casenan)
What is the real hyphothecary nature of Maritime Law?
The real and hypothecary nature of maritime law simply means that the liability of the
carrier in connection with losses related to maritime contracts is confined to the vessel, which
is hypothecated for such obligations or which stands as the guaranty for their settlement. It
has its origin by reason of the conditions and risks attending maritime trade in its earliest
years when such trade was replete with innumerable and unknown hazards since vessels had
to go through largely uncharted waters to ply their trade. It was designed to offset such adverse
conditions and to encourage people and entities to venture into maritime commerce despite the
risks and the prohibitive cost of shipbuilding. Thus, the liability of the vessel owner and
agent arising from the operation of such vessel were confined to the vessel itself, its
equipment, freight, and insurance, if any, which limitation served to induce capitalists
into effectively wagering their resources against the consideration of the large profits

attainable in the trade. (Aboitiz Shipping Corporation vs General Accident Fire and Life
Insurance)
The only time Limited Liability Rule does not apply is when there is an actual finding of
negligence on the part of the vessel owner or agent.
Nature of the Office of the Philippine Coast Guard
According to laws enacted by the congress, PCG now subject to the administrative
supervision of the DOTC, the PCG has become a civilian agency with a distinct
administrative disciplinary system for its uniformed personnel administered by the PCGEfficiency and Separation Board.
It remains a civilian component of the DOTC regardless of the nature of the rules of
procedure of the ESB. This is because the PCG is a distinct instrumentality performing an
essential function that of enforcing the countrys maritime laws. As such, its officers are not
similarly situated as ordinary civil service employees. The adoption of a distinctive
administrative disciplinary mechanism different from that of other government agencies is
clearly justified. The Philippine Coast Guard is a distinct agency. Its uniformed personnel ought
not to be treated in the same manner as other civil servants. (Caballero vs. Phil Coast Guard
Efficiency and Separation Board)
Can the owner of the vessel evade the liability by abandoning his rights and interest over
his vessel?

As a general rule, Yes. When the owner abandoned his rights, interest, and ownership
over the vessel together with his freight and appurtenance, his liability is limited or
extinguished.
However, there are exceptional circumstances wherein the ship agent could still be held
answerable despite the abandonment, as where the loss or injury was due to the fault of the
shipowner and the captain. As held in the case of Philippine American General Insurance
Corp Inc. Vs. CA where the proximate cause of the sinking of the M/V Asilda was her
condition

of

unseaworthiness

arising

from

her

having

been top-

heavy when she departedfrom the Port of Zamboanga. Her having capsized and eventually sunk
was bound to happen and was therefore in the category of an inevitable occurrence.
Distinguish Demurrage and Laytime

The Court defined demurrage in its strict sense as the compensation provided for in the
contract of affreightment for the detention of the vessel beyond the laytime or that period of
time agreed on for loading and unloading of cargo. It is given to compensate the shipowner for
the nonuse of the vessel. On the other hand, the following is well-settled:
Laytime runs according to the particular clause of the charter party. If laytime is
expressed in running days, this means days when the ship would be run continuously, and
holidays are not excepted. A qualification of weather permitting excepts only those days when
bad weather reasonably prevents the work contemplated. (National Steel Corporation vs. CA)

Who is a pilot?
In maritime law, it is a person duly qualified and licensed to conduct a vessel into or out of
ports, or in certain waters. In a broad sense the term pilot includes:
1. Those whose duty is to guide vessels into or out of ports or in particular waters and
2. Those entrusted with the navigation of vessels on the high seas.
However, the term pilot is more generally understood as a person taken on board at a
particular place for the purpose of conducting a ship through a river, road, or channel, or from
port. (Far Eastern Shipping Company vs. CA and Phil Ports Authority)

What is pilotage service?

The service consists of navigating a vessel from a specific point, usually about two (2)
miles off shore, to an assigned area at the pier and vice versa. When a vessel arrives, a harbor
pilot takes over the ship from its captain to maneuver it to a berth in the port, and when it
departs, the harbor pilot also maneuvers it up to a specific point off shore. The setup is
required by the fact that each port has peculiar topography with which a harbor pilot is
presumed to be more familiar than a ship captain.
What is the nature of pilotage service?
There is no dispute that pilotage as a profession has taken on the nature of a property
right. Hence, it cannot be taken or prohibited without due process of law. Pilotage, just like
other professions, may be practiced only by duly licensed individuals. Licensure is the granting
of license especially to practice a profession. It is also the system of granting licenses (as for
professional practice) in accordance with established standards.

A license is a right or

permission granted by some competent authority to carry on a business or do an act which,

without such license, would be illegal. (Corona vs. United Harbor Pilots Association of the
Phil and Manila Pilots Association)
Role of Philippine Ports Authority

Created by virtue of PD 857, Philippine Ports Authority (PPA) is a government

corporation specially charged under PD 857 with the financing, management, and operations
of public ports throughout the Philippines. It has the duty, among others, to (1) supervise,
control, regulate, construct, maintain, operate, and provide facilities or services which
are necessary in the ports vested in, or belonging to it; (2) control, regulate, and
supervise pilotage and the conduct of pilots in any Port District; and (3) levy dues, rates,
or charges for services provided by it.
The Supreme Court in the case of Association of International Shipping Lines Inc
vs PPA, ruled that one of the PPAs objectives is the proper collection and accounting of all
income and revenues accruing out of dues, rates, and charges for the use of facilities and
services provided by the PPA and the realization of a reasonable return on
the PPAs assets. Since the assailed administrative orders were issued to prevent the
accumulation of accounts receivable accruing from the 10% government share, the assailed
administrative orders are clearly within the PPAs power to do things necessary to the
attainment
of PPAs objectives. A
restrictive
and
unreasonable
interpretation
of
the PPAs charter would render the PPA powerless in introducing reforms on the manner of
collecting the government share. Further, being the government corporation in charge of the
operation and maintenance of Philippine ports, including the provision of pilotage services, the
PPA has the power to devise effective ways and means to properly collect and recover the
government
share.
Nature of Stevedoring Service
Stevedoring services are imbued with public interest and subject to the states police
power. The Manila South Harbor is public property owned by the State. The operations of this
premiere port of the country, including stevedoring work, are affected with public interest.
Stevedoring services are subject to regulation and control for the public good and in the
interest of general welfare. (Philippine Ports Authority vs. Cipres Stevedoring and Arrestre
Inc.)

In the operation of Municipal Ferry, is it a condition for the operation of the same to
have the recommendation of the Municipality where the services will be given before the
issuance of CPC by BOT?
Yes. The specific jurisdiction and authority given by Sections 2318-2320 of the Revised
Administrative Code to a municipality to operate or lease the ferry service within its own
territorial limits should prevail. The grant of supervision and authority by Administrative Code
to municipalities or municipal councils over public utilities such as municipal ferries, markets,
etc. is specific, and undoubtedly was "intended to provide an additional source of revenue to
municipal corporations for their maintenance and operation". On the other hand, the authority

conferred on the respondent Board of Transportation was intended principally to insure and
safeguard

the

convenience,

comfort

and

safety

of

the

public.

The provisions of the Revised Administrative Code which grant to the municipal council
of Sangguniang Bayan the power to acquire or establish municipal ferries, are different and
should

be

distinguished

from

the

authority

of

the

BOT

to

issue

CPC.

While

the establishment of a municipal ferry is first given to a municipality, ferry service will
nevertheless be subject to the supervision and control of the BOT. The winner in a public
bidding conducted by the municipal council obtains the privilege to operate the ferry service,
but he has to apply for a CPC from the BOT which then has the duty to regulate the operation,
route, rates to be charged, as well as specify the kind of equipment to be used for the comfort,
convenience and safety of the public using the ferry. (Municipality of Echague vs. Abellera)

What is classification society in Maritime Law?

A classification society is an organization which sets certain standards for a vessel to
maintain in order to maintain their membership in the classification society. So, if they failed to
meet that standard, they are considered not members of that class, and thus breaching the
warranty, that requires them to maintain membership or to maintain their class on that
classification society. And it is not sufficient that the member of this classification society at
the time of a loss, their membership must be continuous for the whole length of the policy
such that during the effectivity of the policy, their classification is suspended, and then
thereafter, they get reinstated, that again still a breach of the warranty that they maintained
their

class.

(Prudential Guarantee and Assurance Inc. Vs Trans-asia Shipping Lines.)

Venue of Criminal Action for an offense committed in a vessel in transit

In transit simply means on the way or passage; while passing from one person or place
to another; in the course of transportation. Hence, undoubtedly, the applicable provision is par.
(c) of Sec. 15 (now Section 14), Rule 110 which provides that (w)here an offense is committed
on board a vessel in the course of its voyage, the criminal action may be instituted and tried in
the proper court of the first port of entry or of any municipality or territory through which the
vessel passed during such voyage subject to the generally accepted principles of international
law. (Calme vs. CA)