Chapter 1 General Considerations

Contract of transportation- when a person obligates himself to transport persons or property from one place to another for a
consideration.
 Carriage of passenger/carriage of goods
 Common carrier/private carrier
Carriage of passenger
 common carrier
 passenger – one who travels in a public conveyance by virtue of contract, express or implied, with the carrier subject to
payment of fare or an equivalent thereof.
 Still passenger even if he is being carried gratuitously or under a reduced fare
 Gratuitously= stipulation limiting the common carrier’s liability for negligence is VALID
EXCEPTION: willful acts or gross negligence
 It is the person whose contractual right has been invaded who must bring every action based on contract (real party-in-
interest is the injured party; parent cannot claim an action) <BALIWAG TRANSIT CO. VS CA>
 w/o there is a written agreement, the carrier owes a duty of EXTRA ORDINARY DILIGENCE directly to the passengers
 breach of provision of the agreement will entitle one party to file an action against the other
Carriage of goods
 shipper- is the person who delivers the goods to the carrier for transportation; who pays the consideration or on whose
behalf payment is made
 carrier
consignee- person to whom the goods are to be delivered (shipper, deliver to other branch, third person not party to the COC)
 consignee bound by the COC where it was established that he accepted the same and is trying to enforce the agreement
(bill of lading)
Consignee bound by the COC and becomes a party thereto
1. the relationship of agency between the consignee and the shipper/consignor
2. unequivocal acceptance of the BOL
3. availment of the stipulation pour autrui
Perfection
 contract of carry- agreement to carry the passenger at some future date, consensual (perfected by mere consent)
 contract of carriage or of common carriage itself – real contract for not until the facilities of the carrier are actually used can
the carrier be said to have already assumed the obligation of the carrier
 contact of carriage of goods- consensual contract, agrees to accept and transport goods at some future date
-act of delivery of the goods (unconditionally placed in the possession and control of the carrier and upon their receipt by
the carrier for transportation = perfected)
 <COMPANIA MARITIMA V. INSURANCE COMPANY OF NORTH AMERICA> liability and responsibility of the carrier under a
contract for carriage of goods commence on their actual delivery to or receipt by the carrier or an authorized agent
 lighters, are for the time its substitutes, BOL is applicable to the goods as soon as they are placed on the lighters
 relationship is established whenever the control and possession of goods passes to the carrier and nothing remains to be
done by the shipper
 bill of lading is not indispensable for creation of COC
 beginning wit the actual delivery of the goods for transpo, not with formal execution of receipt of BOL
 actual delivery and acceptance are sufficient to bind the carrier
 lighters were merely employed as the first step of the voyage (carrier taking possession by placing it on a lighter manned by
its authorize employees)
 Carriage of Passenger
 Verbal contract to carry is already a binding consensual contact <BRITISH AIRWAY, INC V TCA>
 Presence of a ticket or BOL or any written contract is not necessary for the perfection of the COC
 BOL, gives right to both the C and S to mutually demand of each other the delivery of said bill , code does not demand not a
requisite in COT
AIRCRAFT
 Perfected even if no tickets have been issued as long as there was already a meeting of minds with respect to the subject
matter and consideration
 Perfected if it can be established that the passenger had checked in at the departure counter, passed thru customs and
immigration, boarded the shuttle bus and proceeded to the ramp of the aircraft and that his bag had already been loaded
In the aircraft to be flown with the passenger to his destination
BUSES, JEEP AND STREET CARS
 Continuing offer
  Liable for injuries suffered by boarding passengers resulting from sudden starting up of the carrier
 Passenger is deemed to be accepting the offer if he is already attempting to board the conveyances and the COC is
perfected from that point
TRAINS
 Must purchase a ticket and must present himself at the proper place and in a proper manner for transportation
 Such person must have a bona fide intention to use the facilities of the carrier, possess sufficient fare with which to pay for
his passage and present himself to the carrier for transportation in the place and manner provided= passenger
 Mere trespasser (stowaway) not a passenger
ART 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, air for compensation, offering their services to the public
 Goods for hire as a public employment and not as a casual occupation
 Public service act
Test under <PHIL INDUSTRIAL CO. VS CA>
1. must be engaged in the business of carrying goods for others as a public employment and must hold himself out as ready to
engaged in the transpo of goods for person generally as a business and not as a casual occupation
2. must undertake to carry goods of the kind to which business is confined
3. undertake to carry by the method by which his business is conducted and over his established roads
4. transpo must be for hire
 <NATIONAL STEEL CORP. V CA> 2nd and 3rd element should not be part of the test, test of CC is the carriage of goods or
passengers provided it has space for all who opt to avail themselves of its transportation for a fee
 <BASCOS V. CA> as long as a person or corp. holds itself to the public for the purpose of transporting goods as a business, it
is already considered a common carrier regardless of whether it owns the vehicle to be used or has to actually hire one
 <SPS PERENA V. SPS NICOLAS> true test
Characteristics of ART 1732
1. makes no distinction between one whose principal business activity is the carrying of persons of goods or both or as an
ancillary activity (sideline)
2. no distinction between a person or enterprise offering transpo service on a regular or schedule basis and offering such
service on an occasional, episodic or unscheduled basis
3. not distinguish between a carrier offering services to general public or solicits business only from a narrow segment of the
general population
4. obligations of CC even if he did not secure a CPC
5. no distinction as to the means of transporting as long as it is by land, water or air
6. not provide that it should be by a motor vehicle
7. CC even if he has no fixed and publicly know route, maintains no terminals and issues no tickets
8. need not to be engaged in the business of public transpo for the provisions of the civil code on CC to apply to them
9. CC even if operator does not own the vehicle or vessel that he or she operates
 <DE GUZMAN V. CA> even if transportation of goods was ancillary to the main business of buying and selling used bottles
and scrap metals, the SC considered the respondent as a CC
 CC even the clientele is limited
 As a CC she is bound to exercise extra ordinary diligence in transporting the goods and is presumed to be negligent when
she failed to deliver the same
 Pipeline operator are CC <FIRST PHIL INDUSTRIAL CO. V. CA>
 Foreign vessels not CC in NCC (sec. 7 ra. 10668)
 Charter party may transform a CC into a private carrier. Must be a BAREBOAT OR DEMISE CHARTER (where charter mans
the vessel with his own people and becomes in effect, the owner for the voyage or services stipulated)
Charter party- contract by which an entire ship, or some principal part thereof is let by the owner to another person for a specified
time or use
 Contract of affreightment- involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry
goods for others, provides for the hire of the vessel only either for a determinate period of time or for a single or
consecutive voyage, shipowner to supply the ship’s stores, pay for the wages of the master and the crew and defray the
expenses for the maintenance of the ship
-time charter- vessel is leased to the charterer for fixed period of time
-voyage charter- wherein the ship is leased for a single voyage
 Charter by demise/bareboat- the whole vessel is let to the charterer with a transfer to him of the entire command and
possession and consequent control over its navigation, including the master and the crew who are his servants.
 In case of loss, destruction or deterioration of the goods, CC are presumed to have been at fault or to have acted
negligently and the burden of proving otherwise rests on them (NO PRESUMPTION TO PC)
  It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes
private, at least insofar as the particular voyage covering the charter-party is concerned
 CC does not make any distinction between a person or enterprise offering transportation service on a regular or scheduled
basis and one offering such service on an occasional, episodic or unscheduled basis
 <SPS PERENA V. SPS NICOLAS> Private carrier- one who without making the activity a vocation undertakes by special
agreement in a particular instance only, to transport goods or persons from one place to another either gratuitously or for
hire. ORDINARY DILIGENCE.
 Common carrier- art 1732, presumed to be at fault or have acted negligently in case of loss of the effects of passengers or
the death or injuries to passengers
 CC TRUE TEST = carriage of passengers or goods, provided it has space for all who opt to avail themselves of its
transportation service for a fee. (not qualify = private carrier)
Common carrier Private carrier
Extraordinary diligence Diligence of a good father of family
Cannot stipulate that it is exempt from liability for negligence of May validly enter into such stipulation
its agents or employees
Stipulation void for being contrary o public policy No presumption on the part of the private carrier. He who
alleges negligence must prove such negligence
 If charter is bareboat then it a private carrier
 Private carrier stipulation for exemption of liability in case of simple negligence is valid but not in case of liability for gross
negligence or bad faith
TOWAGE
 One vessel is hired to bring another vessel to another place (operator not considered as CC)
 Refers to a service rendered to a vessel by towing for the mere purpose of expediting her voyage without reference to any
circumstances of danger (maritime law)
 Diligence of a good father, negligence in the performance of obligation renders him liable for damages for the resulting loss
suffered by the obligee
 Public utility
 Ship owner entitled to compensation (towing not salvage, members of crew are entitled to compensation)
ARRASTE
 Hauling of cargoes, comprehends the handling of cargo on the wharf or between the establishment of the consignee or
shipper and the ships tackle
 Responsibility of the arraste operator lasts until the delivery of the cargo to the consignee
Functions
1. receive, handle and care for and deliver all merchandise imported or exported, upon passing over government-owned
wharves and piers in the port
2. record and check all merchandise which may be delivered
3. furnish light and water services and other incidental services in order to undertake its arrastre service
 duty is to take care of the goods and turn over to the party entitled to their possession
 extraordinary diligence
 take care of the goods and turn them over to the party entitled to their possession
 CC may ne held solitarily liable with the arrastre operator depending on the circumstance
 The liability of the carrier usually remains until delivery of the goods to the consignee, thus the custody of the carrier
remains while the goods are being unloaded
 Solidary liability is imposed if there was concurrent negligence in unloading the cargo resulting in damages thereto (joint
torfeasors)
 Liability of the arrastre operator is limited to a certain amount unless the value of the importation is otherwise specified or
communicated in writing together with the invoice value and supported by a certified packing list to the arrastre operator
by the interested party or parties before the arrival of the goods
STEVEDORING
 Handling of the cargo in the holds of the vessel or between the ship’s tackle and the holds of the vessel
 Responsibility ends upon the loading and stowing of the cargo in the vessel
 Diligence of a good father of a family
TRAVEL AGENCY
 Not a common carrier
 Only the agency’s service of arranging and facilitating the booking, ticketing and accommodation in a package tour
 Contract of service and not a contract of carriage
 Ordinary diligence
  May be made jointly and severally liable
TRAMP SERVICE AND LINE SERVICE
Line service- publicly offers services without discrimination to any user, has regular ports of destination, fixed sailing schedules and
frequencies and published freight rates and attendant charges and usually carries multiple consignments; whatever is offered is
accepted for shipment (CC)
Tramp service- has no regular and fixed routes and schedules but accepts cargo wherever and whenever the shipper desires, hired
on contractual basis or chartered by any one, gets full cargo loaded by a single shipper ( can be considered as CC depending on the
circumstances)
ART 1766
 Loss, destruction or deterioration of goods, the law of the country of destination shall apply
 Shall be governed by COC and by special laws if not regulated by civil code
ART 1753
 Immaterial that the collision occurred in foreign waters
Rules
A. coastwise shipping
1. NCC
2. 2. COC
B. Carriage from foreign ports to PH
1. NCC
2. COC
3. Carriage of goods by sea act
C. Carriage from PH to foreign ports
1. laws of country of destination
D. Overland transportation
1. CC
2. COC
E. Air transportation
1. CC
2. COC
3. Warsaw convention (for international carriage)
REGISTERED OWNER RULE
 The person who is the registered owner of a vehicle id liable for any damage caused by the negligent operation of the
vehicle although the same was already sold or conveyed to another person at the time of the accident
 Matter of public interest
 RO is liable to the injured party subject to his right of recourse against the transferee or the buyer
 Not liable if the vehicle was taken away from his garage w/o his knowledge and consent
 Absent the circumstance of unauthorized use or that the subject vehicle was stolen which are valid defenses available to a
registered owner, RO cannot escape liability resulting from the use of the RO vehicle
 Applies even if the registered owner leased the vehicle to another who is the actual operator (RO directly laible)
 Lessor-owner should register the lease contract to LTO, annotated in the COR in order that there will be notice to 3rd person
that it is the lesses and not the RO who is in possession and operating the vehicle
 Sale, lease or financial lease that is not registered with LTO does not bind 3 rd persons
 Applied in financial lease (mode of extending credit thru a non cancellable lease contract under which the lessor purchase
or acquires the machinery, E,MV, A, B and O machines and other movable/immovable property in consideration of periodic
payment by the lessee of a fixed amount of money……..)
 Financing company not liable for loss, damage or injury unless operated by them its employees or agents at the time of
loss..) EXCEPTION: non registration <PCI LEASING AND FINANCE INC. V. UCPB GENERAL INSURANCE CO. INC>
 Transferee is liable to the RO for damages caused to the passenger, reimburse
 Both the owner of record and the actual operator, a held by in the past be jointly and several liable with the driver
KABIT SYSTEM
 An arrangement whereby a person who has been granted a CPC allows another persons who own motor vehicles to
operate them under his license, sometimes for a fee or percentage of the earning
 Contrary to PP therefore void and inexistent
 Art 1409 NCC
 Financial capacity of the holder of the license so that liabilities arising from accidents may be duly compensated
PARI DELICTO RULE
 Having entered from an illegal contract neither can seek relief from the courts and each must bear the consequences of his
acts
  Kabit system= pari delicto, no right of action against each other
AIRCRAFTS AND VESSELS
 Certificate of public convenience and necessity
 No permits or cert can be transferred w/o the permission of the govt agency concerned
 Civil aviation authority act of 2008
 Name of carrier appearing in the cert of reg is conclusive. No proof of contrary can be established
BOUNDARY SYSTEM
 Carrier cannot escape liability by claiming that the driver is a lessee
Chapter 2 Obligations of the Common Carrier

Basic obligations of the carrier

-to transport the goods or passengers safely to the agreed destination
1. to accept passengers and goods without discrimination
2. to seasonably deliver the goods or bring the passenger to the destination
3. to deliver the goods or bring the passenger to the proper place or destination
4. to deliver the goods to the proper person
5. to exercise extraordinary diligence in the performance of its duties
 Every obligation of the carrier is coupled with the corresponding right of the shipper or the passenger
Rights of passenger/shipper
1. right against discrimination
2. right to have his goods or be transported without delay
3. personal right to enforce all the obligations of the carrier
 sec 16 RA 9295- makes it illegal for domestic ship operators to refuse to accept or carry passengers or cargo without just cause.
 Sec 6 of economic regulation #4 by CABoard- it shall be unlawful for any air freight forwarder to give undue preference or make
unjust discrimination in his service
 Vessel engage as a CC of passengers is bound to receive for carriage, without discrimination all proper persons who desire it and
properly offer to become passengers unless some sufficient excuse exists for refusing them
 CC cannot lawfully decline to accept a particular class of goods unless it appears that for some sufficient reason the discrimination
against the traffic in such goods is reasonable and necessary
Grounds for non-acceptance
1. when the goods sought to be transported are dangerous objects, or substances including dynamites and other explosives
2. the goods are unfit for transportation
3. acceptance would result in overloading
4. the goods are considered contrabands or illegal
5. goods are injurious to health
6. goods will be exposed to untoward danger like flood, capture by enemies and the like
7. goods like livestock will be exposed to diseases
8. strike
9. failure to tender goods on time
 CC may be granted the authority to carry goods that are by nature dangerous or hazardous (included in the certificate of public
convenience)
 A carrier which is not properly equipped to transport dangerous chemicals or explosives may validly refuse to accept the same for
transport
 The shipowners and masters are mandated to accept the said cargoes only if they are covered by the necessary clearance from
appropriate government agencies. (non-compliance with the requirement will subject the shipowner and the master to
administrative penalties without prejudice to the institution of criminal and civil action with the regular courts against those who
are responsible)
 Carriers may refuse to accept goods that are unfit for transportation. These goods may by nature be unfit for transporation or are
unfit because of improper packaging or defect in their containes.
 CC should still exercise due diligence to forestall or lessen the loss when loss and etc is caused by the faulty nature of the packing or
of the containers (ART 1742)
 A carrier has no obligation to inquire into the correctness or sufficiency of such information
 Carrier is duty bound to deliver the goods within the time agreed upon the to the designated consignee
 The goods must be delivered within the stipulated time. Where a carrier has made an express contract to transport and deliver
property within a specified time, he is bound to fulfill the contract and is liable for any delay, no matter from what cause it may
have arisen
Duty to make timely delivery of the goods
 Where the law creates a duty or charge and the party is disabled from performing it without any default in himself then the law will
excuse him, but where the party by his own contract creates a duty or charge upon himself, he is bound to make it good
notwithstanding any accident or delay by inevitable necessity because he might have provided against it by contract
 The oft repeated rule regarding a carrier’s liability for delay is that in the absence of a special contract, a carrier is not an insurer
against delay in the transportation of goods
 Delivered at destination within a reasonable time, in the absence of any agreement as to the time of delivery
- the expected date of arrival reflected in the bill of lading may be considered (delay, more than 2 months)
- depend upon the nature of the goods
 excusable delays in carriage suspend but do not generally terminate the COC and when the cause is removed the master must
proceed with the voyage and make deliver,during the detention or delay the vessel continuous to be liable as a common carrier,
NOT A WAREHOUSEMAN and remains duty bound to exercise extraordinary diligence.
If delay is legally inexcusable
1. the carrier is still liable even if natural disaster caused the damage
2. the stipulation limiting the liability of the carrier is inoperative
3. the carrier is liable for the damages caused by the delay
4. the consignee may exercise his right to abandon under art 371 of COC
Delay
- Art 1740, 1747
 - COC art 370-374
Right to abandon
 In cases of delay on account of the fault of the carrier, the consignee may leave the goods transported in the hands of the carrier,
informing him thereof in writing before the arrival of the same at the point of destination. The carrier shall be liable for the total
value of such goods
 During the period intervening between the moment when the fault of the carrier produces a delay which is the generative cause of
action until the moment just before the arrival of the goods at the place of delivery by communicating such abandonment to the
carrier in writing
 Abandonment may also be made by virtue of stipulation or agreement between the parties <MAGELLAN MFG. MARKETING CORP
VS. CA>
Place of delivery
 Place agreed upon by the parties
 If specifc place or warehouse is designated in the BOL, the goods must be delivered in such place of destination
 ART 360 COC, shipper, without changing the palce where the delivery is to be made, may change the consignment of goods which
he delivered to the carrier, provided that at the time of ordering the change of consignee the BOL signed by the carrier, if one has
been issued, be returned to him, in exchange for another wherein the novation of the contract appears. The expenses= shipper

Chapter 4 Defenses of Common Carrier
 Carrier is not an insurer of the passengers safety or the safety of the goods that it is transporting
Kinds of defenses
 FE may be invoked in proper cases to prevent the passenger or shipper from recovering from the
carrier
Defenses that will merely reduce or mitigate the liability
1. doctrine of contributory negligence
2. doctrine of avoidable consequences rule
 a validly stipulated limitation on liability of the carrier may also be invoked to limit the liability to
a certain amount although the actual value of the damage or injury is much more than the
stipulated ceiling.
 The CC is presumed negligent the moment he fails to deliver the goods to its destination or the
moment the passenger did not reach his destination while riding the carrier
 Doctrine of proximate cause is inapplicable to a COC
 The passenger or the shipper has no burden of proving that his injury was caused by negligent or
intentional act or omission of the carrier or his agents
 The CC may prove by way of defense that the loss or damage cannot be traced to any act of the
said carrier but the proximate and only cause of the loss is any of the circumstances mentioned art
1734 NCC
 Proximate causation is recognize in art 1741 and 1762 of the NCC that still allows recovery if there
is contributory negligence on the part of the shipper or passenger so long as the proximate cause
of the damage is the negligence of the carrier
Defenses in the carriage of goods – art 1734,1742 and 1743
 No other defense may be raised by the CC in the COG; exclusive or a closed list
 The defense of exercise of due diligence in the selection and supervision of employees that is
available in TORT is NOT available in an action for breach of COG
Defenses in the carriage of passengers
-carrier’s defense is the exercise of extraordinary or utmost diligence. The defenses mentioned above like
FE or acts of public enemy (except #4) may be invoked against the passenger or his heirs provided that
utmost diligence is exercised (art 1756)
Chapter 21

Public utility- is a business or service engaged in regularly supplying the public with some commodity or
service of public consequences (electricity, gas,water, transpo, telephone or telegraph service)
 Public use and service
 Privately owned and operated business whose services are essential to the needs of the public and
conduce to their comfort and convenience
Public service act elements of public service
1. person must own, operate, manage or control in the PH public services which may include
distribution of goods or rendering of services to the public
2. ownership, operation, management or control must be for hire or compensation
3. ownership, operation management or control must be done for general business purposes
characteristics of PS
1. it is not required that the business is permanent because the operation may be permanent,
occasional or accidental
2. business may be with general or limited clientele
CC are considered public service if:
1. they transport either freight or passenger or both
2. service is with or without fixed route
3. their classification may be freight or carrier service of any class, express service, steamboat or
steamship line, pontines, ferries and water craft
 activity for general business purpose
 mere fact that the concessionaire operates under a contract does not remove it from the concept
of public utility if it is inherently so, court must deicide
 mere service is rendered under a contract does not prevent a company from being considered a
public utility
constitutional limitations of public utility
1. franchise or certificate or any other form of authorization shall be granted only to citizens of the
Philippines, corporations or associations organized under PH laws, atleast 60% of capital is owned
by such citizens
2. No FCA shall be exclusive in character
3. FCA not longer than 50 yrs
4. Franchise is subject to amendment, alteration or repeal by congress when common good requires
5. State shall encourage equity participation in public utilities by general public
6. Participation of foreign investors shall be limited to their proportionate share in its capital
7. All executive and managing officers of such corp or associations must be citizens of the PH
8. In times of emergency the state may temporarily take over or direct the operation of any privately
owned PU or business affected with public interest
9. State may in interest of national welfare and upon payment of just compensation transfer
ownership of utilities to government
10. State prohibit monopolies when public interest requires
11. Combination in restraint of trade or unfair competition are not allowed
Delegated agencies
1. DOTC (other agencies under it)
2. LTFRB
3. LTO
4. MARINE
5. PHIL COAST GUARD
6. NTC
 7. ENERGY REGULATORY COMMISSION
8. NATURAL WATER RESOURCES COUNCIL
9. CIVIL AERONAUTICS BOARD
10. CIVIL AVIATION AUTHORITY OF THE PH
11. PH PORTS AUTHORITY
12. LOCAL WATER UTILITIES ADMINISTRATION
13. TOLL REGULATROY BOARD
 Regulation of public utilities is founded upon the police power of the state and statutes
prescribing rules for the control and regulation of public utilities are considered valid exercise
thereof
 Submission to regulation= withdraw by owner by discontinuing its use
 Determining the req Filipino nationality= entity applies for a franchise or any form of
authorization (can be done after the corp has already come into being and not while it is still being
formed)
 Consti does not prohibit the mere formation of PU corp w/o required formation of fil capital,
prohibits granting of franchise to it
Test in determining the nationality of corp (applies only to operation of PU not to ownership of the
facilities)
1. voting control test
2. beneficial ownership test
(full beneficial ownership of stocks with voting rights is essential)
ownership- relation in law by virtue of which a thing pertaining to one person is completely subjected to
his will in everything not prohibited by law or the concurrence with the rights of another
 corp not subj to 60% Filipino req if it will just own the equipment or properties that will be used
by another which shall operate as public utility
 franchise cannot be exclusive
Permanent take over- PU are expropriated subject to payment of just compensation
Temporary take over- happens in time of emergency
Emergency- connotes the existence of conditions suddenly intensifying the degree of existing danger to
life or well being beyond that which is accepted as normal (economic, natural disaster, national security)
 congress may delegate emergency powers to president under the ff:
- existence of war or other emergency
- must be for a limited period only
- subject to restriction as the congress may prescribe
- exercise to carry out a national policy declared by congress
 without legislation, president has no power to point out the types of business affected with public
interest that should be taken over
 rates prescribed by the state must be one that yields a fair return on the public utility upon the
value of the property performing the services and one that is reasonable to the public for the
services rendered
rate regulation- includes the granting of a provisional rate increase, increase of rates or directing the
public utility to refund its over-recoveries based on the applicable provisions of law
 what is just and reasonable is a question of fact calling for the exercise of discretion, good sense,
and a fair, enlightened and independent judgment
operating expense- reasonably incurred in connection with business operations to yield revenue or
income, they are items of expenses which contribute or are attributable to the production of income or
revenue
Fixing rates for electronic companies
1. rate of return
2. rate base
 3. the return itself or the computed revenue to be earned by the public utility based on the rate of
return and rate base
Rate of return- is a judgment percentage that, if multiplied with the rate base, provides a fair return
on the public utility for the use of its property for service to the public
Rate base- is an evaluation of the property devoted by the utility to the public service or the value of
invested capital or property that the utility is entitled to a return
LTFRB methods in rate determination
1. add-on method- adding the established minimum fare (0.75) to the fare per succeeding km
multiplied by the distance traveled in excess of 4km and 5km respectively
2. straight computation- process by which the actual distance travelled is multiplied by the
authorized fare per succeeding km of 0.25 centavos
requirements for provisional rate increase under EPIRA
1. publication of the application itself (not merely notice of hearing in newspaper )
2. need for the ERC to consider the comments or pleadings of the customers and LGU concerned in
its action on the application or motion for provisional rate adjustment
legislative franchise- grant or privilege from the sovereign power
CPC- form of regulation thru administrative agencies
 franchise electricity= vested exclusively to congress
 collateral attach on a legislative franchise = not allowed
 franchise is a property right, cannot be revoked or forfeited without due process of law
(determination = writ of quo warranto)
 cities and municipalities can grant franchise to certain PU (tricycle operators, ferries and
wharves) (sanggunian bayan)
 public market- is a public service or utility, not falls under the jurisdiction of PSC
requisites of issuance of CPC
1. applicant must be citizen of PH, or corp or co-pship, association or joint stock co. organized under
the laws of ph, 60% of stock or paid up capital belongs to fil citizens
2. applicant must be financially capable of undertaking the proposed service and meeting the
responsibilities incident to its operations
3. applicant must prove that the operation of the public service proposed and the authorization to do
business will promote the public interest in a proper and suitable manner
 public convenience and necessity exists when the proposed facility or service meets a
reasonable want of the public and supply a need that the existing facilities do not
adequately supply (req for grant for CPC)
overriding principle
1. public interest
2. necessity
3. convenience
determination who among the applicants entitled to certificate
1. prior operator rule- PSC will not issue a CPC to a second operator if there is a first operator who is
rendering sufficient, adequate and satisfactory service and who in all things and respects is
complying with the rules and regulations of the commission
2. third operator rule- where 2 operators are more than serving the public there is no reason to
permit a 3rd operator to engage in competition with them
3. protection of investment rule- laws aims to protect the public and operators, it is the duty of the
govt to protect the investment of the operators of PU. Duty to protect from unfair, unjustified and
ruinous competition
4. prior applicant rule- propriety in the filling of the application for a CPC is an important factor in
determining the rights of public service companies
chapter 20

carrier shall exercise the ff before and at the beginning of the voyage:
1. make the ship seaworthy
2. properly man, equip and supply the ship
3. make the holds, refrigerating and cooling chambers and all other parts of the ship in which goods
are carrier, fit and safe for their reception, carriage and preservation
4. shall properly and csrefully load, handle, stow, carry, keep, care for and discharge the goods
carried
5. after receiving goods into his carier, or master or agent= issue BOL to the shipper upon demand
containing the ff
- loading marks for indentification of goods
- either the number of packages or pieces or quantity or weight as the case may be
- apparent order or conditions of the goods
2 overriding principle of obligations of carrier
1. obligation to use due care with respect to the cargo
2. obligation to provide a seaworthy vessel at the beginning of the voyage
contract of carriage- applies only to COC by Carriage by sea covered by BOL or any similar doc of title
loss- situation where no delivery at all was made by the shipper of the goods because the same had
perished, gone out of commerce or disappeared in such a way their existence is unknown or they cannot
be recovered. ( not include misdelivery)
Chapter 22

Quasi-legislative or rule making power- is the power to make rules and regulations which results in
delegated legislation that is within the confines of the granting statute and doctrine of non-delegability
and separability of powers

Dept of transportation attached agencies

1. LTFRB
2. LTO
3. CIVIL AERONAUTICS BOARD (CAB)
4. CIVIL AVIATION AUTHORITY OF THE PH (CAAP)
5. MARITIME INDUSTRY AUTHORITY (MARINA)
6. PH COAST GUARD (PCG)
7. PH PORTS AUTHORITY
8. NATIONAL TELECOMM COMMISSION (NTC)
9. ENERGY REGULATORY COMMISSION (ERC)
10. LOCAL WATERS UTILITIES ADMINISTRATION

DOT functions
1.

LTFRB functions
1. prescribe and regulate route of service, zones or areas of operation of public land transpo services
provided by motorized vehicles in accordance with the public land transpo devt plans and
programs approved by DOTC
2. suspend, amend, cancel, revoke and issue (SACRI) CPC or permits and prescribe the appropriate
terms and conditions thereof
3. prescribe, approve, determine, and review and adjust (PADRA) reasonable fares, rates and other
related charges to the operation of PLT services
4. issue preliminary or permanent injunction, whether prohibitory or mandatory, in all cases in
which it has jurisdiction
5. punish for contempt of the board, both direct in indirect
6. issue subpoena and subpoena duces tecum and summon witnesses to appear in any proceedings
of the board, to admin oaths and affirmations
7. conduct investigations and hearings of complaints for violation of public service laws and board’s
rules and regulations and impose fines and penalties for such violations
8. review motu proprio the decisions/actions of regional franchising regulatory office (RFRO)
9. promulgate rules and regulations governing proceedings before the board and RFRO)
10. fix, impose and collect, review and adjust (FICRA) reasonable fees and other related charges
11. formulate, promulgate, administer, implement and enforce rules and regulations (FPAIE) on land
transpo PU, provide utilities and in their stations such devices, equip facilities and operating
procedures and techniques (DEOT) promotes safety, protection, comfort and convenience (SPCC)
to persons and property in their charges as well as safety of persons and property within their
areas of operations
12. coordinate and cooperate with other govt agencies concerning any aspect of public land transpo
services
13. perform such other functions and duties provided by law
 LTO functions
1. inspection and registration of motor vehicles
2. issuance of licenses and permits
3. enforcement of land transpo rules and regulations
4. adjudication of traffic cases

CAB functions
1. licensing of domestic and intl airlines (approval of pres)
2. regulation of fares and rates
3. enforcement of the economic provision of RA 776
4. authorization of navigation of foreign AC in PH
5. participation in the negotiation of air agreements covering exchange of air rights
6. approval or disapproval of mergers, consolidations, interlocking rel and inter-airlines agreements
( MCII)
7. regulation of air accounting practices and devt of air carrier reporting system
8. maintenance of public record of tariffs, schedules and other materials (TSO) req to be filed by air
carries
9. assure protection of public
10. suggest corrective measures
11. review, reverse, modify or affirm (RRMA) on appeal the admin decision or order of the asst sec for
air transportation on matters pertaining to:
- grounding of airmen and ac
- revocation of any cert or denial of issuance of cert
- imposition of an civil penalty or fine
12. determine whether to impose, remit, mitigate, increase, or comprise (IRMIC) the civil penalties
imposed by asst sec for air transportation

functions of CAAP
1. provide comprehensive policy guidance for promotion and devt of PH aviation industry
2. ensure authority perfoms its functions in a proper, efficient and effective manner
3. decide the objectives, strategies and policies (OSP) of the authority
4. determine organizational structure of the authority
5. exercise appellate powers on any decisions, findings and rulings of the director general
6. exercise AP to order the taking of depositions in any proceeding, or investigation pending before
the board at any stage of such proceeding or investigation
7. use available services, equip, personnel and facilities (SEPF) of other agencies of the PH govt
8. use the proper of authority
9. invest such of authority’s fund in any business venture the board may deem appropriate
10. promulagate rules and regulations as may be necessary in the interest of safety in air commerce
pertaining to the issuance of airmans cert
11. impose reasonable charges and fees for use of govt aerodromes
12. fix charges to be imposed in the use of privately owned air navigation facilities
13. adopt a system for reg og ac
14. determine and fix landing fees and other fees
15. approve the annual and supplementary budget plan and utilization of retained revenue
16. exercise corp powers
17. grant exeptions from the req of observing rules and regulations
18. formulate rules and regulations concerning compliance of carrier and pubic for safety transfer of
goods and materials
 powers of MARINA
1. devt and formulate plans, policies, programs…
2. establish, prescribe and regulate routes, zones and areas of operation
3. issue CPC
4. register vessels
5. undertake safety regulatory functions pertaining to vessel construction and operation
6. enforce laws, prescribe and enforce rules and regulations
7. undertake issuance of license to qualified seamen and harbor bay river pilots
8. determine fix and or prescribe charges and or rates pertinent to the operation of Public water
transport utilities
9. accredit marine surveyors and maritime enterprises
10. issue and register the continuous discharge of fil seamen
11. establish and prescribe rules and regulations, standards and procedures for different and effective
discharge of the above functions
12. perform such others functions

functions of PCG
1.

Functions of PPA
1. formulate in coordination with national economic devt authority a comprehensive and practicable
prot devt plan for the state
2. supervise control, regulate, provide such facilities or services as necessary in the ports vested in or
belonging to authority
3. prescribe rules and regulations for the establishement and operation of all other ports including
private prots
4. to license, control, regulate any contruction within any prot district
5. provide services within the port districts and approaches thereof, including but not limited to
- berthing, towing, moving or docking of any vessel
- loading or discharging any vessel
- sorting, weighing, measuring, storing or handling of goods
6. exrcise control of or administer any foreshore rights or leases
7. coordinare with bureau of lands in devt of foreshore area
8. control, regulare, supeevise pilotage and conduct of pilots in any port district
9. provide or assist in provision of training programs and training facilities
10. perform such acts or provide such facilities as may be deemed proper

powers of NTC
1.

powers of ERC
1.