10/23/16
Communication/ Telecommunications
TRANSPORTATION LAW
Transportation is one of the public utilities.
- Has a special place in the constitution.
Background / Introduction: Article XII Sections 11, 17, 18, 19
Basic laws, general principles
- New Civil Code (basic law)  It is the framework
of all laws.
- COGSA
- Code of Commerce [CC]
- Warsaw Convention
- LTFRB/MARINA/CAAB and other administrative
agency’s implementing rules and regulations
Ex. International carriage of goods  Warsaw
Convention/CC because of the “hypothecary nature” in
transportation. TANGINANG HYPOTHECARY YAN
hahahaha
CONSTI
1987 Philippine Constitution – “public service” – of public
consequence. In order to protect the public from public
utilities.
The constitution has placed a special mark insofar as
operation or business of public utilities are concerned. As
long as you are engaged in this business, get a franchise to
operate. Operation of public utilities are limited to filipinos
pursuant to the Philippine constitution. (opul 2015)
FRANCHISE FOR OPERATION- FOR OWNERSHIP  not
needed franchise!
Section 11 – No franchise for operation of public utility shall
be granted except to citizens, corporation, partnership – 60-
40 equity = to operate public utility (PU), franchise (CPN-
CPCN) is needed, but not ownership
Section 17 – In case of national emergency when public
interest requires, State may during emergency temporarily
TAKEOVER the operation of private owned public utilities or
business affected with public interest.
It is congress that will declare national emergency.
★In case of a State of National Emergency = the State may
TAKE OVER even without just compensation a privately-
owned public utility, which may be temporarily. [only the
Congress may declare a state of national emregency] 
EVEN WITHOUT JUST COMPENSATION POLICE
POWER, pag take over walang just compensation
Section 18 – State may in the interest of national welfare or
defense operate - establish vital industries upon payment
of just compensation, transfer to public ownership, public
utilities to be operated by the State – NATIONAL WELFARE
AND DEFENSE DITO MAY JUST COMPENSAATION-
vital industries may just compensation
*In the interest of National Welfare – State can set up vital
industries. Here, just compensation is required in the
absence of any national emergency as may be declared
by Congress. [vital industries only]  e ano ba ang vital
industries?????
Section 19 – State shall regulate/prohibit monopolies
(Gamboa vs Teves – corporation as PU-BOD-election)
Under the POLICE POWER of the State, it may regulate a
business affected with public interest since the primary
character of public utility is public service or use – to protect
public and promote safety welfare
Public service does not mean WHOLE PUBLIC or all the
people in a certain area
Public Utility – is business / service engaged in regularly
supplying the public with some commodity – service of
public conseq (?) such as transpo, electric, water, telecomm,
railroad, airports, seapotys, iceplants, warehouses
[special mark is placed in the Constitution for public utilities]
FRANCHISE
Before engaging in the service of public utilities, franchise is
very important. The business has a public consequence, so
the gov’t requires you to have a franchise.
Difference between ownership and operation.
You may own facilities but not necessarily you may operate.
To operate, one must get a franchise. Franchise is not a
right but a mere privilege.
★Ownership ≠ Operation  franchise “to operate”
CPC – franchise granted by government agency concerned
CPCN – franchise from Congress
FRANCHISE – NOT a right, but a privilege given by the
State to engage in the operation of public utilities. [in short, a
license]
BUSINESSES ENGAGED
What are those businesses?
- Those engaged in BASIC SERVICES:
1. Transportation
2. Electricity
3. Water
4.
5. Shipyards/ Airports/ Warehouses
What is transportation?
- Transportation – is the movement of goods or
persons from one place to another by land, water,
air railway
Article 1732. Common carriers are persons, corporations,
firms or associations engaged in the business of carrying
or transporting passengers or goods or both, by land, water,
or air, for compensation, offering their services to the public.
Vigilance over the Goods (EOD) < Safety of the
Passengers (utmost diligence)
(Jeje) CARRIAGE OF PASSENGERS/PERSONS
Article 1755 – Common Carrier is bound to carry passengers
safely as far as human care and foresight can provide,
using UTMOST DILIGENCE with due regard for all
circumstances.
When does carriage of passengers begin and end? – From
the time passengers BOARDS AND ALIGHTS OR ARRIVES
AT PORT OF DESTINATION OR UNTIL HE LEAVES THE
PREMISES WITH HIS BAGGAGES/CHILDREN OR even
when he leaves the premises but returns within reasonable
time to retrieve baggage. Common Carrier is vested with
public interest and therefore exhorted to carry passengers
using utmost diligence/UD. In case passenger is injured or
does not reach destination safely, common carrier is
presumed at fault except in case of fortuitous event
(FE/ND)
FOR GOODS
Rule on liability.
CARRIAGE OF GOODS – Liability of Common Carrier starts
from the time common carrier receives unconditionally the
goods and ends until goods are delivered to the place of
destination or constructively delivered to the
consignee/agent
What is the rule on transportation of goods and its
exceptions?
- Extraordinary Diligence must be exercised by
common carriers in the transportation of goods.
- There is presumption of negligence on the part of
the carrier in case of loss or damage, thus they
are already liable.
- Common carrier must prove EOD [ has the burden
of proof]
What is the amount of diligence required of that of a
common carrier?
Diligence required – exercise of EXTRAORDINARY
DILIGENCE – GR: raises instantly a presumption of
negligence – fault XPN: unless common carrier observed
extraordinary diligence (EOD) or loss, damage, liability (LLD)
is caused by:
1. flood, storm, earthquake, lightning, natural disaster or
calamity (NATURAL DISASTER)- must be “ACTS OF
GOD”; Generally, fire is not an exception, but an
exception to the exception is when fire is caused by
lightning; Volcanic eruptions are related with
earthquakes.
2. act or omission of shipper- Expensive motor vehicles
are shipped to Cebu and shipper decided to place
them in open spaces because it’s cheaper, however,
a typhoon occurred and damaged the vehicles. In this
situation, the shipper’s negligence
CONTRIBUTORY. BUT STILL CARRIER IS LIABLE,
amount of damage shall only be adjusted.
3. character of goods or defects in packaging - Ex.
Another example, in case of medicines which must be
properly packed in a cooler because of its delicate
nature.
4. act of public enemy in war – occurs only in case of war
declared by congress. ISIS not a public enemy
because there is no declaration of war against them.
Rebels (ISIS etc) are NOT included
5. order or act of competent authority. Province,
mayor/politician stopped and seized all the goods
carried by the common carrier. Is the common carrier
liable? Ans: NO. Remember: it must be an act of
competent authority and there must be a law or
ordinance with regard to such authority, otherwise,
the carrier cannot be exempted from liability. The officer
must be competent. It is not enough that you are the
highest ranking officer.
Hindi dahil exempted from liability, hindi ka na mag e-
exercise ng diligence. Kailngan mo pa din mag exercise ng
diligence to minimize further loss or deterioration of the
goods.
That the above exception/s is/are the only proximate cause
of the loss, damage, liability. But even with the presence
of above exception, CC is still obliged to exercise due
diligence to prevent or minimize the loss, damage,
liability before, during and after the fortuitous event or
natural disaster.
With all these exemptions, the law still provides that carrier is
still required to exercise due diligence of a good father
ito nalang. BEFORE, DURING and AFTER to minimize
damage. MEANING: not completely exempted. Di naman
pwedeng wala ka nang pakielam. Dapat equipped with
precautionary equipment.
Article 1734. Common carriers are responsible for the loss, ★WRITTEN = best evidence  Limitation on Liability must
destruction, or deterioration of the goods, unless the same is be written (contract/BOL)
due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other (Jeje) LIMITED LIABILITY RULE – valid – pursuant to
natural disaster or calamity; Warsaw Convention Treaty (check-in baggage - $20/k or
(2) Act of the public enemy in war, whether hand carry $400/passenger) provided the limited liability is
international or civil; written in the bill of lading, ticket , contract.
(3) Act or omission of the shipper or owner of the
goods; EXCEPTIONS TO THE LIMITED LIABILITY RULE
(4) The character of the goods or defects in the 6. Willful misconduct
packing or in the containers; 7. Concurrent fault/negligence, bad faith, discourtesy
(5) Order or act of competent public authority. 8. Higher value declared
9. Charter party??????????????????/
★Piracy/Hijacking = FLOOD STORM EARTHQUAKE 10. LLR is not expressed / written in the ticket, bill of lading,
LIGHTING or contract
(Best Evidence: Bill of Lading, receipt, ticket, contract)
General Rule: It does not exempt common carrier from
is liability because it is not one of the above-mentioned
exception. Under CODE of COMMERCE,
However, if the hijacking is beyond the control of common 1. Bareboat/demise charter – you transfer liability to
carrier because of grave and irresistible force which lessee
cannot be foreseen or is inevitable, hijacking is regarded
as fortuitous event because common carriers are not e.g. owner of several fleets or vessels as owner. In Consti,
absolute insurers against risk of travel. iba ang owner, iba ang operator  they lease and operate
and offer service to the public; they are considered common
carriers; not the owner, but you take over full operation; it
FORTUITOUS EVENT – any event which is NOT provides for everthing
foreseeable, or although foreseeable, the same is inevitable.
2. Affreightment/time/voyage – ikaw mismo nag
Natural Disaster vs Fortuitous Event = both has the same operate
effect and same due diligence is exercised.
e.g. lease for a certain time only
LIMITED LIABILITY RULE  a businessman would lease for a certain business for a
- this is where Code of Commerce and COGSA certain time, certain voyage,
come in  being the owner who operated, YOU ARE LIABLE (EOD
- Applicable to Land, Air, Water transportation applicable)
- Under Warsaw Convention – check-in luggage by
air ($20/hand carry and $400/passenger) 3. Time
- Several airlines have their own LLR
- Usually specified on the ticket/ bill of lading/
contract of carriage CHARTER PARTY
Bareboat/ Demise Charter Affreightment/ Time
SC: while it’s true that under that under the COGSA, there Charter/ Voyage Charter/
are accepted specified limited amounts, however, there are Special Voyage
exceptions: - Shipowner is NOT - Shipowner is the
1. Willful Misconduct, Bad Faith, Unprofessional the operator, but operator.
conduct by the employees which does NOT mere owner only. - Businessmen
exempt common carriers. - Charterer is the usually are
2. Negligence of the common carrier. Lessee = operator lessees
3. Higher value is declared [and paid its = liable as
corresponding value] common carrier
Ex. An item was declared for P1M by the owner, EOD is transferred to the EOD is NOT transferred to
so in case of loss, the carrier will pay P1M as well. lessee as operator. the lessee
Shipowner (lessor)  Shipowner (lessor) 
*In case of the three above, CC cannot avail of limited private carrier [OD] – NOT common carrier [EOD] –
liability liable liable
Charterer (lessee)  Charterer (lessee)  private
common carrier [EOD] - carrier [OD] – NOT liable
liable along with the
crew/ship
Vessel is leased and offered Owner offered the facilities
to the public. to certain persons for
transfer of goods
★CONTAINERIZATION SYSTEM – also engaged in
transportation of goods; economical way of transporting
the goods. They facilitate also the transfer of goods.
- Loan of cargoes- panong loan of cargoes?
- THE CONTAINER is a COMMON CARRIER with
limited liability
o does not participate in the counting, but
merely issues a bill of lading based
on the declaration of the shipper.
- Shipper’s declaration = kung ano nakalagay, yun
lang ang laman
- Si shipper di na nya ichecheck, bale waiting
nalang si container owner
- Si common carrier hindi na magpaparticipate dun
sa counting kasi i-follow lang nya yung shipper’s
declaration
- Pagdating sa destination kung kulang or
damaged, it follows the declaration of the shipper
GR: no liability
- EXN: “said to contain” BOL liable for all loss and
damage- SAID TO CONTAIN LIABLE
CONTAINERIZATION SYSTEM – is designed to facilitate
expeditious and economical loading of cargoes where
common carrier does not participate in counting goods for
loading and common carrier merely issues bill of lading
based on shippers declaration
Limited Liabilty under Code of Commerce:
- Marine Transactions are REAL AND
HYPOTHECARY in nature; that the liability of
carrier limited to the value of the vessel/value of
the goods carried
- IF THE VESSEL SANK, there are 2 options:
1. abandonment by the shipowner – everything is
lost (>3/4 of the value of the expenses if recovery
is the remedy) , therefore, shipowner is exempted
from liability; OR if not found, no liability.
 You abandon if the value you can get is more than
the value of the goods
 shipowner.
Kayo na bahala magbenta
2. Pag lumubog at hindi mo na nakita yung barko,
NO LIABILITY
 NO VESSEL = NO LIABILITY------ PANO YUNG
TOTAL LOSS?????????????????????????
Take note of situations like supposed there is no loss, pero
may misdelivery of goods, what’s the prescriptive period?
CIVIL: in case of contracts, 10 years
CODE OF COMMERCE: 1 year, in case of loss or damage
In case of COLLISION, provided BOTH vessels are in
motion, who is liable?
- Guilty vessel should pay.
- If the guilty vessel sank wholly, then back to real
and hypothecary nature of maritime transactions
DOCTRINE OF LAST CLEAR CHANCE / DOCTRINE OF
SUPERVENING NEGLIGENCE
(Jeje)– sometimes referred to as SUPERVENING
NEGLIGENCE – that where both parties are negligent or is
impossible to determine whose fault, the one who had the
last clear chance/opportunity to AVOID the impending
harm and failed to do so, is chargeable with the
consequence LLD – SC
- aka “Doctrine of Supervening Event”  where two
common carriers are both negligent and it is
impossible to determine who is at fault, the one
who had the last clear opportunity to avoid the
impending harm is liable for the loss.
- Ex. There are 2 buses, Bus A and Bus B, and
they collided. Both were negligent. Bus A’s driver
was drunk while Bus B violated the traffic rules but
Bus B’s driver has been honking, so the one with
the last clear chance was Bus B.
- Correlate this doctrine with the Doctrine of
Inscrutable Fault. Ano yan?
DOCTRINE OF INSCRUTABLE FAULT
- All transportation/common carriers have an
implied warrant of:
1. Seaworthiness
2. Airworthiness
3. Roadworthiness hahaha hindi
landworthiness
 You cannot claim exception if the machine is
not worthy.
Key Question: Is it seaworthy?
- For example, despite the existence of the
exception of a natural disaster, yet only one
engine of the vessel is functioning, then there is
contributory negligence on the part of the
What is the relation of inscrutable fault sa last clear chance,
Contributory negligence ba?
So if something happens, what are the CAUSES OF
ACTIONS [remedies]:
1. Culpa Contractual – CARRIER is primarily liable
 Sino mag I initiate ng action? Heir / Offended
Party
2. Culpa Criminal – DRIVER is primarily liable
3. Culpa Aquiliana – DRIVER AND CARRIER are
solidarily liable as joint tortfeasors.
 EXN: Common Carrier’s due diligence in the
selection and supervision of employees [in
this case, the driver is liable]
 Liability commences: From the moment the
the passenger BOARDS, ALIGHTS, and
ARRIVES at his/her destination.
 Ex. Naiwan bag ng pasaher pero nasa
premises pa ng terminal ng carrier = common
carrier is liable to safeguard the passenger.
Same goes if naiwan yung bata [even if non-
paying passenger] provided, within the
premises.
CARRIAGE OF PASSENGERS
★UTMOST DILIGENCE (carriage of persons) >
EXTRAORDINARY DILIGENCE (transportation of goods)
★carriers are supposed to exercise utmost diligence with
due regard for all circumstances. It is an amount of diligence
higher than EOD; mataas lang ng konti
★ under the law, Article 1755 – Common Carrier is bound to
carry passengers safely as far as human care and foresight
can provide, using UTMOST DILIGENCE with due regard for
all circumstances.
 In case of injury, death or was not able to
reach his or her destination, there is a
PRESUMPTION OF FAULT/NEGLIGENCE
on the part of the carrier. Thus, the aggrieved
need not prove na may negligence yung
common carrier
XPN:Non-paying passenger [free-loader] (conflicting sa taas:
whats the rule on non-paying passengers or freeloaders?)
XPN to the XPN: There is negligence, like when the driver
violates traffic rules. (thus, even if non paying? Liable ang
CC?)
GR: carrier has no liability against nonpaying passengers or
free loaders, in case of death or injury.
Xpn: 1. If allowed to be carried for free (pulis); 2. The
carrier itself is negligent.
When does carriage of passengers begin and end? – From
the time passengers BOARDS AND ALIGHTS OR ARRIVES
AT PORT OF DESTINATION OR UNTIL HE LEAVES THE
PREMISES WITH HIS BAGGAGES/CHILDREN OR even
when he leaves the premises but returns within reasonable
time to retrieve baggage. Common Carrier is vested with
public interest and therefore exhorted to carry passengers
using utmost diligence/UD. In case passenger is injured or
does not reach destination safely, common carrier is
presumed at fault except in case of fortuitous event (FE/ND)

ARRASTRE OPERATORS
- As a general rule, customs brokers or arrastre
operators – the integral part in transportation
business transcends to the benefit of the common
carrier.

Arrastre Operator/Customs broker – authorized by

shipowner to keep the goods = considered as delivered,
so wala na yan. Liable na si owner kasi may takeover na
ng bill of lading.

In some cases, na-i-turn-over na sa arrastre and authorized

by carrier to keep – iba ito kasi considered delivered na yung
goods.

*COGSA is still applicable.

Road Trip tickets = the rule is that, whoever issues the

ticket shall be liable.

SITUATION: a drunk stranger who boarded the bus without

paying = carrier is NOT liable.