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TRANSPORTATION LAW (2) Act of the public enemy in war, whether international

or civil;
Course Outline
(3) Act of omission of the shipper or owner of the goods;
I. PRELIMINARY CONSIDERATIONS
(4) The character of the goods or defects in the packing or
A. Pertinent Laws in the containers;

1) New Civil Code of the Philippines (5) Order or act of competent public authority.

SECTION 4. - Common Carriers Art. 1735.

SUBSECTION 1. - General Provisions In all cases other than those mentioned in Nos. 1, 2, 3, 4,
and 5 of the preceding article, if the goods are lost,
Art. 1732. destroyed or deteriorated, common carriers are presumed
to have been at fault or to have acted negligently, unless
Common carriers are persons, corporations, firms or
they prove that they observed extraordinary diligence as
associations engaged in the business of carrying or
required in Article 1733.
transporting passengers or goods or both, by land, water,
or air, for compensation, offering their services to the Art. 1736.
public.
The extraordinary responsibility of the common carrier
Art. 1733. lasts from the time the goods are unconditionally placed in
the possession of, and received by the carrier for
Common carriers, from the nature of their business and
transportation until the same are delivered, actually or
for reasons of public policy, are bound to observe
constructively, by the carrier to the consignee, or to the
extraordinary diligence in the vigilance over the goods and
person who has a right to receive them, without prejudice
for the safety of the passengers transported by them,
to the provisions of Article 1738.
according to all the circumstances of each case.
Art. 1737.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735, and The common carrier's duty to observe extraordinary
1745, Nos. 5, 6, and 7, while the extraordinary diligence for diligence over the goods remains in full force and effect
the safety of the passengers is further set forth in Articles even when they are temporarily unloaded or stored in
1755 and 1756. transit, unless the shipper or owner has made use of the
right of stoppage in transitu.
SUBSECTION 2. - Vigilance Over Goods
Art. 1738.
Art. 1734.
The extraordinary liability of the common carrier
Common carriers are responsible for the loss, destruction,
continues to be operative even during the time the goods
or deterioration of the goods, unless the same is due to any
are stored in a warehouse of the carrier at the place of
of the following causes only:
destination, until the consignee has been advised of the
(1) Flood, storm, earthquake, lightning, or other natural arrival of the goods and has had reasonable opportunity
disaster or calamity; thereafter to remove them or otherwise dispose of them.

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Art. 1739. (1) In writing, signed by the shipper or owner;

In order that the common carrier may be exempted from (2) Supported by a valuable consideration other than the
responsibility, the natural disaster must have been the service rendered by the common carrier; and
proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or (3) Reasonable, just and not contrary to public policy.
minimize loss before, during and after the occurrence of
flood, storm or other natural disaster in order that the Art. 1745.
common carrier may be exempted from liability for the
Any of the following or similar stipulations shall be
loss, destruction, or deterioration of the goods. The same
considered unreasonable, unjust and contrary to public
duty is incumbent upon the common carrier in case of an
policy:
act of the public enemy referred to in Article 1734, No. 2.
(1) That the goods are transported at the risk of the owner
Art. 1740.
or shipper;
If the common carrier negligently incurs in delay in
(2) That the common carrier will not be liable for any loss,
transporting the goods, a natural disaster shall not free
destruction, or deterioration of the goods;
such carrier from responsibility.
(3) That the common carrier need not observe any
Art. 1741.
diligence in the custody of the goods;
If the shipper or owner merely contributed to the loss,
(4) That the common carrier shall exercise a degree of
destruction or deterioration of the goods, the proximate
diligence less than that of a good father of a family, or of a
cause thereof being the negligence of the common carrier,
man of ordinary prudence in the vigilance over the
the latter shall be liable in damages, which however, shall
movables transported;
be equitably reduced.
(5) That the common carrier shall not be responsible for
Art. 1742.
the acts or omission of his or its employees;
Even if the loss, destruction, or deterioration of the goods
(6) That the common carrier's liability for acts committed
should be caused by the character of the goods, or the
by thieves, or of robbers who do not act with grave or
faulty nature of the packing or of the containers, the
irresistible threat, violence or force, is dispensed with or
common carrier must exercise due diligence to forestall or
diminished;
lessen the loss.
(7) That the common carrier is not responsible for the loss,
Art. 1743.
destruction, or deterioration of goods on account of the
If through the order of public authority the goods are defective condition of the car, vehicle, ship, airplane or
seized or destroyed, the common carrier is not responsible, other equipment used in the contract of carriage.
provided said public authority had power to issue the
Art. 1746.
order.
An agreement limiting the common carrier's liability may
Art. 1744.
be annulled by the shipper or owner if the common carrier
A stipulation between the common carrier and the shipper refused to carry the goods unless the former agreed to
or owner limiting the liability of the former for the loss, such stipulation.
destruction, or deterioration of the goods to a degree less
than extraordinary diligence shall be valid, provided it be:
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Art. 1747. Art. 1754.

If the common carrier, without just cause, delays the The provisions of Articles 1733 to 1753 shall apply to the
transportation of the goods or changes the stipulated or passenger's baggage which is not in his personal custody or
usual route, the contract limiting the common carrier's in that of his employee. As to other baggage, the rules in
liability cannot be availed of in case of the loss, Articles 1998 and 2000 to 2003 concerning the
destruction, or deterioration of the goods. responsibility of hotel-keepers shall be applicable.

Art. 1748. SUBSECTION 3. - Safety of Passengers

An agreement limiting the common carrier's liability for Art. 1755.


delay on account of strikes or riots is valid.
A common carrier is bound to carry the passengers safely
Art. 1749. as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due
A stipulation that the common carrier's liability is limited regard for all the circumstances.
to the value of the goods appearing in the bill of lading,
unless the shipper or owner declares a greater value, is Art. 1756.
binding.
In case of death of or injuries to passengers, common
Art. 1750. carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed
A contract fixing the sum that may be recovered. by the extraordinary diligence as prescribed in Articles 1733 and
owner or shipper for the loss, destruction, or deterioration 1755.
of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon. Art. 1757.

Art. 1751. The responsibility of a common carrier for the safety of


passengers as required in Articles 1733 and 1755 cannot be
The fact that the common carrier has no competitor along dispensed with or lessened by stipulation, by the posting of
the line or route, or a part thereof, to which the contract notices, by statements on tickets, or otherwise.
refers shall be taken into consideration on the question of
whether or not a stipulation limiting the common carrier's Art. 1758.
liability is reasonable, just and in consonance with public
policy. When a passenger is carried gratuitously, a stipulation
limiting the common carrier's liability for negligence is
Art. 1752. valid, but not for wilful acts or gross negligence.

Even when there is an agreement limiting the liability of The reduction of fare does not justify any limitation of the
the common carrier in the vigilance over the goods, the common carrier's liability.
common carrier is disputably presumed to have been
negligent in case of their loss, destruction or deterioration. Art. 1759.

Art. 1753. Common carriers are liable for the death of or injuries to
passengers through the negligence or wilful acts of the
The law of the country to which the goods are to be former's employees, although such employees may have
transported shall govern the liability of the common carrier acted beyond the scope of their authority or in violation of
for their loss, destruction or deterioration. the orders of the common carriers.

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This liability of the common carriers does not cease upon cancel the certificate of public convenience granted to any
proof that they exercised all the diligence of a good father common carrier that repeatedly fails to comply with his or
of a family in the selection and supervision of their its duty to observe extraordinary diligence as prescribed in
employees. this Section.

Art. 1760. Art. 1766.

The common carrier's responsibility prescribed in the In all matters not regulated by this Code, the rights and
preceding article cannot be eliminated or limited by obligations of common carriers shall be governed by the
stipulation, by the posting of notices, by statements on the Code of Commerce and by special laws.
tickets or otherwise.
2) Code of Commerce
Art. 1761.
COMMERCIAL CONTRACTS FOR
The passenger must observe the diligence of a good father TRANSPORTATION
of a family to avoid injury to himself.
ARTICLE 349.
Art. 1762.
A contract of transportation by land or water ways of any
kind shall be considered commercial:
The contributory negligence of the passenger does not bar
recovery of damages for his death or injuries, if the 1. When it has for its object merchandise or any article
proximate cause thereof is the negligence of the common of commerce.
carrier, but the amount of damages shall be equitably
reduced. 2. When, whatever its object may be, the carrier is a
merchant or is habitually engaged in transportation for the
Art. 1763. public.

A common carrier is responsible for injuries suffered by a ARTICLE 350.


passenger on account of the wilful acts or negligence of
other passengers or of strangers, if the common carrier's The shipper as well as the carrier of merchandise or goods
employees through the exercise of the diligence of a good may mutually demand that a bill of lading be made, stating:
father of a family could have prevented or stopped the act
1. The name, surname and residence of the shipper.
or omission.
2. The name, surname and residence of the carrier.
SUBSECTION 4. - Common Provisions
3. The name, surname and residence of the person to
Art. 1764. whom or to whose order the goods are to be sent or
whether they are to be delivered to the bearer of said bill.
Damages in cases comprised in this Section shall be
awarded in accordance with Title XVIII of this Book, 4. The description of the goods, with a statement of their
concerning Damages. Article 2206 shall also apply to the kind, of their weight, and of the external marks or signs of
death of a passenger caused by the breach of contract by a the packages in which they are contained.
common carrier.
5. The cost of transportation.
Art. 1765.
6. The date on which shipment is made.
The Public Service Commission may, on its own motion
7. The place of delivery to the carrier.
or on petition of any interested party, after due hearing,

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8. The place and the time at which delivery to the In case the consignee, upon receiving the goods, cannot
consignee shall be made. return the bill of lading subscribed by the carrier, because
of its loss or of any other cause, he must give the latter a
9. The indemnity to be paid by the carrier in case of receipt for the goods delivered, this receipt producing the
delay, if there should be any agreement on this matter. same effects as the return of the bill of lading.
ARTICLE 351. ARTICLE 354.
In transportation made by railroads or other enterprises In the absence of a bill of lading, disputes shall be
subject to regulation rate and time schedules, it shall be determined by the legal proofs which the parties may
sufficient for the bills of lading or the declaration of present in support of their respective claims, according to
shipment furnished by the shipper to refer, with respect to the general provisions established in this Code for
the cost, time and special conditions of the carriage, to the commercial contracts.
schedules and regulations the application of which he
requests; and if the shipper does not determine the ARTICLE 355.
schedule, the carrier must apply the rate of those which
appear to be the lowest, with the conditions inherent The responsibility of the carrier shall commence from the
thereto, always including a statement or reference to in the moment he receives the merchandise, personally or
bill of lading which he delivers to the shipper. through a person charged for the purpose, at the place
indicated for receiving them.
ARTICLE 352.
ARTICLE 356.
The bills of lading, or tickets in cases of transportation of
passengers, may be diverse, some for persons and others Carriers may refuse packages which appear unfit for
for baggage; but all of them shall bear the name of the transportation; and if the carriage is to be made by railway,
carrier, the date of shipment, the points of departure and and the shipment is insisted upon, the company shall
arrival, the cost, and, with respect to the baggage, the transport them, being exempt from all responsibility if its
number and weight of the packages, with such other objections, is made to appear in the bill of lading.
manifestations which may be considered necessary for
ARTICLE 357.
their easy identification.
If by reason of well-founded suspicion of falsity in the
ARTICLE 353.
declaration as to the contents of a package the carrier
The legal evidence of the contract between the shipper and should decide to examine it, he shall proceed with his
the carrier shall be the bills of lading, by the contents of investigation in the presence of witnesses, with the shipper
which the disputes which may arise regarding their or consignee in attendance.
execution and performance shall be decided, no exceptions
If the shipper or consignee who has to be cited does not
being admissible other than those of falsity and material
attend, the examination shall be made before a notary, who
error in the drafting.
shall prepare a memorandum of the result of the
After the contract has been complied with, the bill of investigation, for such purposes as may be proper.
lading which the carrier has issued shall be returned to
If the declaration of the shipper should be true, the
him, and by virtue of the exchange of this title with the
expense occasioned by the examination and that of
thing transported, the respective obligations and actions
carefully repacking the packages shall be for the account of
shall be considered cancelled, unless in the same act the
the carrier and in a contrary case for the account of the
claim which the parties may wish to reserve be reduced to
shipper.
writing, with the exception of that provided for in Article
366.

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ARTICLE 358. Proof of these accidents is incumbent upon the carrier.]

If there is no period fixed for the delivery of the goods the ARTICLE 362.
carrier shall be bound to forward them in the first
shipment of the same or similar goods which he may make Nevertheless, the carrier shall be liable for the losses and
point where he must deliver them; and should he not do damages resulting from the causes mentioned in the
so, the damages caused by the delay should be for his preceding article if it is proved, as against him, that they
account. arose through his negligence or by reason of his having
failed to take the precautions which usage has established
ARTICLE 359. among careful persons, unless the shipper has committed
fraud in the bill of lading, representing the goods to be of a
If there is an agreement between the shipper and the kind or quality different from what they really were.
carrier as to the road over which the conveyance is to be
made, the carrier may not change the route, unless it be by If, notwithstanding the precautions referred to in this
reason of force majeure; and should he do so without this article, the goods transported run the risk of being lost, on
cause, he shall be liable for all the losses which the goods account of their nature or by reason of unavoidable
he transports may suffer from any other cause, beside accident, there being no time for their owners to dispose
paying the sum which may have been stipulated for such of them, the carrier may proceed to sell them, placing them
case. for this purpose at the disposal of the judicial authority or
of the officials designated by special provisions.
When on account of said cause of force majeure, the
carrier had to take another route which produced an ARTICLE 363.
increase in transportation charges, he shall be reimbursed
for such increase upon formal proof thereof. Outside of the cases mentioned in the second paragraph of
Article 361, the carrier shall be obliged to deliver the goods
ARTICLE 360. shipped in the same condition in which, according to the
bill of lading, they were found at the time they were
The shipper, without changing the place where the delivery received, without any damage or impairment, and failing to
is to be made, may change the consignment of the goods do so, to pay the value which those not delivered may have
which he delivered to the carrier, provided that at the time at the point and at the time at which their delivery should
of ordering the change of consignee the bill of lading have been made.
signed by the carrier, if one has been issued, be returned to
him, in exchange for another wherein the novation of the If those not delivered form part of the goods transported,
contract appears. the consignee may refuse to receive the latter, when he
proves that he cannot make use of them independently of
The expenses which this change of consignment occasions the others.
shall be for the account of the shipper.
ARTICLE 364.
ARTICLE 361.
If the effect of the damage referred to in Article 361 is
[The merchandise shall be transported at the risk and merely a diminution in the value of the goods, the
venture of the shipper, if the contrary has not been obligation of the carrier shall be reduced to the payment of
expressly stipulated. the amount which, in the judgment of experts, constitutes
such difference in value.
As a consequence, all the losses and deteriorations which
the goods may suffer during the transportation by reason ARTICLE 365.
of fortuitous event, force majeure, or the inherent nature
and defect of the goods, shall be for the account and risk If, in consequence of the damage, the goods are rendered
of the shipper. useless for sale and consumption for the purposes for

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which they are properly destined, the consignee shall not ARTICLE 368.
be bound to receive them, and he may have them in the
hands of the carrier, demanding of the latter their value at The carrier must deliver to the consignee, without any
the current price on that day. delay or obstruction, the goods which he may have
received, by the mere fact of being named in the bill of
If among the damaged goods there should be some pieces lading to receive them; and if he does not do so, he shall
in good condition and without any defect, the foregoing be liable for the damages which may be caused thereby.
provision shall be applicable with respect to those
damaged and the consignee shall receive those which are ARTICLE 369.
sound, this segregation to be made by distinct and separate
If the consignee cannot be found at the residence indicated
pieces and without dividing a single object, unless the
in the bill of lading, or if he refuses to pay the
consignee proves the impossibility of conveniently making
transportation charges and expenses, or if he refuses to
use of them in this form.
receive the goods, the municipal judge, where there is none
The same rule shall be applied to merchandise in bales or of the first instance, shall provide for their deposit at the
packages, separating those parcels which appear sound. disposal of the shipper, this deposit producing all the
effects of delivery without prejudice to third parties with a
ARTICLE 366. better right.

Within the twenty-four hours following the receipt of the ARTICLE 370.
merchandise, the claim against the carrier for damage or
average be found therein upon opening the packages, may If a period has been fixed for the delivery of the goods, it
be made, provided that the indications of the damage or must be made within such time, and, for failure to do so,
average which gives rise to the claim cannot be ascertained the carrier shall pay the indemnity stipulated in the bill of
from the outside part of such packages, in which case the lading, neither the shipper nor the consignee being entitled
claim shall be admitted only at the time of receipt. to anything else.

After the periods mentioned have elapsed, or the If no indemnity has been stipulated and the delay exceeds
transportation charges have been paid, no claim shall be the time fixed in the bill of lading, the carrier shall be liable
admitted against the carrier with regard to the condition in for the damages which the delay may have caused.
which the goods transported were delivered.
ARTICLE 371.
ARTICLE 367.
In case of delay through the fault of the carrier, referred to
If doubts and disputes should arise between the consignee in the preceding articles, the consignee may leave the
and the carrier with respect to the condition of the goods goods transported in the hands of the former, advising him
transported at the time their delivery to the former is thereof in writing before their arrival at the point of
made, the goods shall be examined by experts appointed destination.
by the parties, and, in case of disagreement, by a third one
When this abandonment takes place, the carrier shall pay
appointed by the judicial authority, the results to be
the full value of the goods as if they had been lost or
reduced to writing; and if the interested parties should not
mislaid.
agree with the expert opinion and they do not settle their
differences, the merchandise shall be deposited in a safe If the abandonment is not made, the indemnification for
warehouse by order of the judicial authority, and they shall losses and damages by reason of the delay cannot exceed
exercise their rights in the manner that may be proper. the current price which the goods transported would have
had on the day and at the place in which they should have
been delivered; this same rule is to be observed in all other
cases in which this indemnity may be due.

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ARTICLE 372. the goods transported in an amount necessary to cover the
cost of transportation and the expenses incurred.
The value of the goods which the carrier must pay in cases
if loss or misplacement shall be determined in accordance ARTICLE 375.
with that declared in the bill of lading, the shipper not
being allowed to present proof that among the goods The goods transported shall be especially bound to answer
declared therein there were articles of greater value and for the cost of transportation and for the expenses and
money. fees incurred for them during their conveyance and until
the moment of their delivery.
Horses, vehicles, vessels, equipment and all other principal
and accessory means of transportation shall be especially This special right shall prescribe eight days after the
bound in favor of the shipper, although with respect to delivery has been made, and once prescribed, the carrier
railroads said liability shall be subordinated to the shall have no other action than that corresponding to him
provisions of the laws of concession with respect to the as an ordinary creditor.
property, and to what this Code established as to the
ARTICLE 376.
manner and form of effecting seizures and attachments
against said companies. The preference of the carrier to the payment of what is
owed him for the transportation and expenses of the
ARTICLE 373.
goods delivered to the consignee shall not be cut off by the
The carrier who makes the delivery of the merchandise to bankruptcy of the latter, provided it is claimed within the
the consignee by virtue of combined agreements or eight days mentioned in the preceding article.
services with other carriers shall assume the obligations of
ARTICLE 377.
those who preceded him in the conveyance, reserving his
right to proceed against the latter if he was not the party The carrier shall be liable for all the consequences which
directly responsible for the fault which gave rise to the may arise from his failure to comply with the formalities
claim of the shipper or consignee. prescribed by the laws and regulations of the public
administration, during the whole course of the trip and
The carrier who makes the delivery shall likewise acquire
upon arrival at the point of destination, except when his
all the actions and rights of those who preceded him in the
failure arises from having been led into error by falsehood
conveyance.
on the part of the shipper in the declaration of the
The shipper and the consignee shall have an immediate merchandise. If the carrier has acted by virtue of a formal
right of action against the carrier who executed the order of the shipper or consignee of the merchandise, both
transportation contract, or against the other carriers who shall become responsible.
may have received the goods transported without
ARTICLE 378.
reservation.
Agents for transportation shall be obliged to keep a special
However, the reservation made by the latter shall not
registry, with the formalities required by Article 36, in
relieve them from the responsibilities which they may have
which all the goods the transportation of which is
incurred by their own acts.
undertaken shall be entered in consecutive order of
ARTICLE 374. number and dates, with a statement of the circumstances
required in Article 350 and others following for the
The consignees to whom the shipment was made may not respective bills of lading.
defer the payment of the expenses and transportation
charges of the goods they receive after the lapse of twenty-
four hours following their delivery; and in case of delay in
this payment, the carrier may demand the judicial sale of
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ARTICLE 379. ARTICLE 575.

The provisions contained in Articles 349 and following Co-owners of vessels shall have the right of repurchase
shall be understood as equally applicable to those who, and redemption in sales made to strangers, but they may
although they do not personally effect the transportation exercise the same only within the nine days following the
of the merchandise, contract to do so through others, inscription of the sale in the registry, and by depositing the
either as contractors for a particular and definite operation, price at the same time.
or as agents for transportations and conveyances.
ARTICLE 576.
In either case they shall be subrogated in the place of the
carriers themselves, with respect to the obligations and In the sale of a vessel it shall always be understood as
responsibility of the latter, as well as with regard to their included the rigging, masts, stores and engine of a streamer
rights. appurtenant thereto, which at the time belongs to the
vendor.
MARITIME COMMERCE
The arms, munitions of war, provisions and fuel shall not
TITLE ONE be considered as included in the sale.

VESSELS The vendor shall be under the obligation to deliver to the


purchaser a certified copy of the record sheet of the vessel
ARTICLE 573.
in the registry up to the date of the sale.
Merchant vessels constitute property which may be
ARTICLE 577.
acquired and transferred by any of the means recognized
by law. The acquisition of a vessel must appear in a written If the alienation of the vessel should be made while it is on
instrument, which shall not produce any effect with a voyage, the freightage which it earns from the time it
respect to third persons if not inscribed in the registry of receives its last cargo shall pertain entirely to the purchaser,
vessels. and the payment of the crew and other persons who make
up its complement for the same voyage shall be for his
The ownership of a vessel shall likewise be acquired by
account.
possession in good faith, continued for three years, with a
just title duly recorded. If the sale is made after the vessel has arrived at the port of
its destination, the freightage shall pertain to the vendor,
In the absence of any of these requisites, continuous
and the payment of the crew and other individuals who
possession for ten years shall be necessary in order to
make up its complement shall be for his account, unless
acquire ownership.
the contrary is stipulated in either case.
A captain may not acquire by prescription the vessel of
ARTICLE 578.
which he is in command.
If the vessel being on a voyage or in a foreign port, its
ARTICLE 574.
owner or owners should voluntarily alienate it, either to
Filipinos or to foreigners domiciled in the capital or in a
Builders of vessels may employ the materials and follow,
port of another country, the bill of sale shall be executed
with respect to their construction and rigging, the systems
before the consul of the Republic of the Philippines at the
most suitable to their interests. Ship owners and seamen
port where it terminates its voyage and said instrument
shall be subject to what the laws and regulations of the
shall produce no effect with respect to third persons if it is
public administration on navigation, customs, health,
not inscribed in the registry of the consulate. The consul
safety of vessels, and other similar matters.

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shall immediately forward a true copy of the instrument of 3. These announcements shall be repeated every ten days,
purchase and sale of the vessel to the registry of vessels of and their publication shall be made to appear in the
the port where said vessel is inscribed and registered. records.

In every case the alienation of the vessel must be made to 4. The auction shall be held on the day fixed, with the
appear with a statement of whether the vendor receives its formalities prescribed in the common law for judicial sales.
price in whole or in part, or whether he preserves in whole
or in part any claim on said vessel. In case the sale is made 5. If the sale should take place while the vessel is in a
to a Filipino, this fact shall be stated in the certificate of foreign country, the special provisions governing such
navigation. cases shall be observed.

When a vessel, being on a voyage, shall be rendered useless ARTICLE 580.


for navigation, the captain shall apply to the competent
judge on court of the port of arrival, should it be in the In all judicial sales of any vessel for the payment of
Philippines; and should it be in a foreign country, to the creditors, the following shall have preference in the order
consul of the Republic of the Philippines, should there be stated
one, or, where there is none, to the judge or court or to the
1. The credit in favor of the public treasury proven by
local authority; and the consul, or the judge or court, shall
means of an official certificate of competent authority.
order an examination of the vessel to be made.
2. The judicial costs of the proceedings, according to an
If the consignee or the insurer should reside at said port,
appraisement approved by the judge or court.
or should have representatives there, they must be cited in
order that they may take part in the proceedings on behalf 3. The pilotage charges, tonnage dues, and the other sea or
of whoever may be concerned. port charges, proven by means of proper certificates of the
officers intrusted with the collection thereof.
ARTICLE 579.
4. The salaries of the depositaries and keepers of the vessel
After the damage to the vessel and the impossibility of her
and any other expenses for its preservation from the time
being repaired, in order to continue the voyage had been
of arrival at the port until the sale, which appear to have
shown, its sale at public auction shall be ordered, subject to
been paid or be due by virtue of an account verified and
the following rules:
approved by the judge or court.
1. The hull of the vessel, its rigging, engines, stores, and
5. The rent of the warehouse where the rigging and stores
other articles shall be appraised, after making an inventory,
of the vessel have been taken care of, according to
said proceedings to be brought to the notice of the persons
contract.
who may wish to take part in the auction.
6. The salaries due the captain and crew during its last
2. The order or decree ordering the auction to be held shall
voyage, which shall be verified by means of the liquidation
be posted in the usual places, an announcement thereof to
to be made in view of the lists and of the books of account
be inserted in the Official Gazette and in two of the
of the vessel, approved by the chief of the Bureau of
newspapers of the largest circulation of the port where the
Merchant Marine, where there is one, and in his absence
auction is to be held, should there be any.
by the consul or judge or court.
The period which may be fixed for the auction shall not be
7. The reimbursement for the goods of the freight which
less than twenty days.
the captain may have sold in order to repair the vessel,
provided that the sale has been ordered through a judicial
proceedings held with the formalities required in such
Aimee Nono Calo [Transportation Law] Page 10
cases, and recorded in the certificate of registry of the But if the sale should have been voluntary and should have
vessel. been made while the vessel was on a voyage, the creditors
shall preserve their rights against the vessel until it returns
8. The part of the price which has not been paid to the said to the port of her registry, and three months after the
vendor, the unpaid credits for materials and labor in the inscription of the sale in the registry of vessel or the arrival.
construction of the vessel, when it has not navigated, and
those arising from the repair and equipment of the vessels ARTICLE 583.
and from its provisioning with victuals and fuel during the
last voyage. If while on a voyage the captain should find it necessary to
contract one or more of the obligations mentioned in
In order that the credits provided for in this subdivision subdivisions 8 and 9 of Article 580, he shall apply to the
may enjoy this preference, they must appear by contracts judge or court if he is in Philippine territory, and otherwise
recorded in the registry of vessels, or if they were to the consul of the Republic of the Philippines, should
contracted for the vessel while on a voyage and said vessel there be one, and, in his absence, to the judge or court or
has not returned to the port where it is registered, they proper local authority, presenting the certificate of the
must be made with the authorization required for such registration sheet treated of in Article 612 and the
cases and annotated in the certificate of registration of the instruments proving the obligation contracted.
vessel.
The judge or court, the consul, or the local authority, as
9. The amount borrowed on bottomry on the hull, keel, the case may be, in view of the result of the proceedings
tackle, and stores of the vessel before its departure, proven instituted, shall make a temporary memorandum of their
by means of the contract executed according to law and result in the certificate, in order that it may be recorded in
recorded in the registry of vessels; those borrowed during the registry when the vessel returns to the port of its
the voyage with the authorization mentioned in the registry, or so that it can be admitted as a legal and
preceding subdivision, satisfying the same requisites; and preferred obligation in case of sale before its return, by
the insurance premium, proven by the insurance policy or reason of the sale of the vessel on account of a declaration
a certificate taken from the books of the broker. of unseaworthiness.

10. The indemnity due the shipper for the value of the The omission of this formality shall make the captain
goods shipped which were not delivered to the consignees, personally liable for the credits prejudiced on his account.
or for averages suffered for which the vessel is liable,
provided that either appear in a judicial or arbitration ARTICLE 584.
decision.
The vessels subject to liability for the credits mentioned in
ARTICLE 581. Article 580 may be attached and judicially sold in the
manner prescribed in Article 579, in the port in which they
If the proceeds of the sale should not be sufficient to pay may be found, at the instance of any of the creditors; but if
all the creditors included in one number or grade, the they should be loaded and ready to sail, the attachment
residue shall be divided among them pro rata. may not be effected except for debts contracted to prepare
and provision the vessel for the same voyage, and even
ARTICLE 582. then the attachment shall be dissolved if any person
interested in its sailing should give a bond for the return of
After the bill of the judicial sale at public auction has been the vessel within the period fixed in the certificate of
executed and inscribed in the registry of vessels, all the navigation binding himself to pay the indebtedness insofar
other liabilities of the vessel in favor of the creditors shall as it may be legal, should it fail to do so, even if this failure
be considered extinguished. be due to fortuitous event.

Aimee Nono Calo [Transportation Law] Page 11


For debts of any other kind whatsoever not comprised Nevertheless, if the amounts claimed were invested for the
within the said Article 580, the vessel may be attached only benefit of the vessel, the responsibility therefor shall
in the port of her registry. devolve upon its owner or agent.

ARTICLE 585. ARTICLE 589.

For all purposes of law not modified or restricted by the If two or more persons should be part owners of a
provisions of this Code, vessels shall continue to be merchant vessel, a partnership shall be presumed as
considered as personal property. established by the co-owners.

TITLE TWO This partnership shall be governed by the resolutions of


the majority of the members.
PERSONS WHO TAKE PART IN MARITIME
COMMERCE If the part owners should not be more than two, the
disagreement of views, if any, shall be decided by the vote
SECTION ONE of the member having the largest interest. If the interests
are equal, it should be decided by lot.
SHIPOWNERS AND SHIP AGENTS
The person having the smallest share in the ownership
ARTICLE 586. shall have one vote; and proportionately the other part
owners as many votes as they have parts equal to the
The shipowner and the ship agent shall be civilly liable for
smallest one.
the acts of the captain and for the obligations contracted
by the latter to repair, equip, and provision the vessel, A vessel may not be detained, attached or levied upon in
provided the creditor proves that the amount claimed was execution in its entirety, for the private debts of a part
invested for the benefit of the same. owner, but the proceedings shall be limited to the interest
which the debtor may have in the vessel, without
By ship agent is understood the person entrusted with
interfering with the navigation.
provisioning or representing the vessel in the port in which
it may be found. ARTICLE 590.
ARTICLE 587. The co-owners of a vessel shall be civilly liable in the
proportion of their interests in the common fund, for the
The ship agent shall also be civilly liable for the
results of the acts of the captain, referred to in Article 587.
indemnities in favor of third persons which may arise from
the conduct of the captain in the care of the goods which Each co-owner may exempt himself from this liability by
he loaded on the vessel; but he may exempt himself the abandonment, before a notary, of the part of the vessel
therefrom by abandoning the vessel with all her belonging to him.
equipments and the freight it may have earned during the
voyage. ARTICLE 591.

ARTICLE 588. All the part owners shall be liable, in proportion to their
respective ownership, for the expenses for repairing the
Neither the shipowner nor the ship agent shall be liable for vessel, and for other expenses which are incurred by virtue
the obligations contracted by the captain, if the latter of a resolution of the majority.
exceeds the powers and privileges pertaining to him by
reason of his position or conferred upon him by the
former.

Aimee Nono Calo [Transportation Law] Page 12


They shall likewise be liable in the same proportion for the The ship agent shall represent the ownership of the vessel,
expenses for the maintenance, equipment, and and may, in his own name and in such capacity, take
provisioning of the vessel, necessary for navigation. judicial and extrajudicial steps in matters relating to
commerce.
ARTICLE 592.
ARTICLE 596.
The resolution of the majority with regard to the repair,
equipment, and provisioning of the vessel in the port of The ship agent may discharge the duties of captain of the
departure shall bind the minority, unless the minority vessel, subject in every case to the provision of Article 609.
members renounce their interests, which must be acquired
by the other co-owners, after a judicial appraisement of the If two or more co-owners apply for the position of
value of the portion or portions assigned. captain, the disagreement shall be decided by a vote of the
members; and if the vote should result in a tie, it shall be
The resolutions of the majority relating to the dissolution decided in favor of the co-owner having the larger interest
of the partnership and sale of the vessel shall also be in the vessel.
binding on the minority.
If the interests of the applicants should be equal, and there
The sale of the vessel must be made at public auction, should be a tie, the matter shall be decided by lot.
subject to the provisions of the law of civil procedure,
unless the co-owners unanimously agree otherwise, saying ARTICLE 597.
always the right of repurchase and redemption provided
for in Article 575. The ship agent shall designate and come to terms with the
captain, and shall contract in the name of the owners, who
ARTICLE 593. shall be bound in all that refer to repairs, details of
equipment, armament, provisions of food and fuel, and
The owners of a vessel shall have preference in her charter freight of the vessel, and, in general, in all that relate to the
over other persons, under the same conditions and price. requirements of navigation.
If two or more of them should claim this right, the one
having the greater interest shall be preferred; and should ARTICLE 598.
they have equal interests, the matter shall be decided by
lot. The ship agent may not order a new voyage, or make
contracts for a new charter, or insure the vessel, without
ARTICLE 594. the authorization of its owner or resolution of the majority
of the coowners, unless these powers were granted him in
The co-owners shall elect the manager who is to represent the certificate of his appointment.
them in the capacity of ship agent.
If he insures the vessel without authorization therefore, he
The appointment of director or ship agent shall be shall be subsidiarily liable for the solvency of the insurer.
revocable at the will of the members.
ARTICLE 599.
ARTICLE 595.
The ship agent managing for an association shall render to
The ship agent, whether he is at the same time the owner his associates an account of the results of each voyage of
of the vessel, or a manager for an owner or for an the vessel, without prejudice to always having the books
association of co-owners, must have the capacity to trade and correspondence relating to the vessel and to its
and must be recorded in the merchant's registry of the voyages at their disposal.
province.

Aimee Nono Calo [Transportation Law] Page 13


ARTICLE 600. ARTICLE 605.

After the account of the managing agent has been If the contracts of the captain and members of the crew
approved by a relative majority, the co-owners shall pay with the ship agent should be for a definite period or
the expenses in proportion to their interest, without voyage, they may not be discharged until after the
prejudice to the civil or criminal actions which the minority fulfillment of their contracts, except by reason of
may deem fit to institute afterwards. insubordination in serious matters, robbery, theft, habitual
drunkenness, or damage caused to the vessel or to its cargo
In order to enforce the payment, the managing agent shall through malice or manifest or proven negligence.
be entitled to an executory action ("accion ejecutiva"),
which shall be instituted by virtue of a resolution of the ARTICLE 606.
majority, and without further proceedings than the
acknowledgment of the signatures of the persons who If the captain should be a co-owner of the vessel, he may
voted for the resolution. not be discharged unless the ship agent returns to him the
amount of his interest therein, which, in the absence of
ARTICLE 601. agreement between the parties, shall be appraised by
experts appointed in the manner established in the law of
Should there be any profits, the co-owners may demand of civil procedure.
the managing agent the amount corresponding to their
interests by means of an executory action ("accion ARTICLE 607.
ejecutiva"), without any other requisite than the
acknowledgment of the signatures on the instrument If the captain who is a co-owner should have obtained the
approving the account. command of the vessel by virtue of a special agreement
contained in the articles of association, he may not be
ARTICLE 602. deprived of his office except for the causes mentioned in
Article 605.
The ship agent shall indemnify the captain for all the
expenses he may have incurred with funds of his own or ARTICLE 608.
of others, for the benefit of the vessel.
In case of the voluntary sale of the vessel, all contracts
ARTICLE 603. between the ship agent and the captain shall terminate,
reserving to the latter his right to the indemnity which may
Before the vessel sets out to sea the ship agent may at his pertain to him, according to the agreements made with the
discretion discharge the captain and members of the crew ship agent.
whose contracts are not for a definite period or voyage,
paying them the salaries earned according to their They vessel sold shall remain subject to the security of the
contracts, and without any indemnity whatsoever, unless payment of said indemnity if, after the action against the
there is an express and specific agreement in respect vendor has been instituted, the latter is found to be
thereto. insolvent.

ARTICLE 604. SECTION TWO

If the captain or any other member of the crew should be CAPTAINS AND MASTERS OF VESSELS
discharged during the voyage, they shall receive their salary
until they return to the port where the contract was made, ARTICLE 609.
unless there should be just cause for the discharge, all in
accordance with Article 636 and following of this Code. Captains, masters or patrons of vessels must be Filipinos,
have legal capacity to contract in accordance with this

Aimee Nono Calo [Transportation Law] Page 14


code, and prove the skill, capacity, and qualifications rigging and equipment, which are absolutely necessary to
necessary to command and direct the vessel, as established enable it to continue and finish its voyage; but if he should
by marine or navigation laws, ordinances, or regulations, arrive at a point where there is a consignee of the vessel, he
and must not be disqualified according to the same for the shall act in concurrence with the latter.
discharge of the duties of the position.
ARTICLE 611.
If the owner of a vessel desires to be the captain thereof,
without having the legal qualifications therefor, he shall In order to comply with the obligations mentioned in the
limit himself to the financial administration of the vessel, preceding article, the captain, when he has no funds and
and shall intrust the navigation to a person possessing the does not expect to receive any from the ship agent, shall
qualifications required by said ordinances and regulations. obtain the same in the successive order stated below:

ARTICLE 610. 1. By requesting said funds from the consignee of the


vessel or correspondents of the ship agent.
The following powers shall be inherent in the position of
captain, master or patron of a vessel: 2. By applying to the consignees of the cargo or to those
interested therein.
1. To appoint or make contracts with the crew in the
absence of the ship agent, and to propose said crew, 3. By drawing on the ship agent.
should said agent be present; but the ship agent may not
employ any member against the captain's express refusal. 4. By borrowing the amount required by means of a loan
on bottomry.
2. To command the crew and direct the vessel to the port
of its destination, in accordance with the instructions he 5. By selling a sufficient amount of the cargo to cover the
may have received from the ship agent. sum absolutely indispensable for the repair of the vessel
and to enable it to continue its voyage.
3. To impose, in accordance with the contracts and with
the laws and regulations of the merchant marine, and when In these two last cases he must apply to the judicial
on board the vessel, correctional punishment upon those authority of the port, if in the Philippines, and to the
who fail to comply with his orders or are wanting in consul of the Republic of the Philippines if in a foreign
discipline, holding a preliminary hearing on the crimes country, and where there is none, to the local authority,
committed on board the vessel on the seas, which crimes proceeding in accordance with the provisions of Article
shall be turned over to the authorities having jurisdiction 583, and with the provisions of the law of civil procedure.
over the same at the first port touched.
ARTICLE 612.
4. To make contracts for the charter of the vessel in the
The following obligations shall be inherent in the office of
absence of the ship agent or of its consignee, acting in
captain:
accordance with the instructions received and protecting
the interests of the owner with utmost care. 1. To have on board before starting on a voyage a detailed
inventory of the hull, engines, rigging, spare-masts, tackle,
5. To adopt all proper measures to keep the vessel well
and other equipment of the vessel; the royal or the
supplied and equipped, purchasing all that may be
navigation certificate; the roll of the persons who make up
necessary for the purpose, provided there is no time to
the crew of the vessel, and the contracts entered into with
request instruction from the ship agent.
them; the lists of passengers; the bill of health; the
6. To order, in similar urgent cases while on a voyage, the certificate of the registry proving the ownership of the
repairs on the hull and engines of the vessel and in its vessel and all the obligations which encumber the same up
to that date; the charter parties or authenticated copies
Aimee Nono Calo [Transportation Law] Page 15
thereof; the invoices or manifests of the cargo, and the 4. Before receiving cargo, to make with the officers of the
memorandum of the visit or inspection by experts, should crew and two experts, if required by the shippers and
it have been made at the port of departure. passengers, an examination of the vessel, in order to
ascertain whether it is water-tight, with the rigging and
2. To have a copy of this code on board. engines in good condition, and with the equipment
required for good navigation, preserving under his
3. To have three folioed and stamped books, placing at the responsibility a certificate of the memorandum of his
beginning of each one a memorandum of the number of inspection, signed by all those who may have taken part
folios it contains, signed by the maritime authority, and in therein.
his absence by the competent authority.
The experts shall be appointed, one by the captain of the
In the first book, which shall be called "log book," he shall vessel and another by those who request its examination,
enter day by day the condition of the atmosphere, the and in case of disagreement a third shall be appointed by
prevailing winds, the courses taken, the rigging carried, the the marine authority of the port or by the authority,
power of the engines used in navigation, the distances exercising his functions.
covered, the maneuvers executed, and other incidents of
navigation; he shall also enter the damage suffered by the 5. To remain constantly on board the vessel with the crew
vessel in her hull, engines, rigging, and tackle, no matter while the cargo is being taken on board and to carefully
what its cause may be, as well as the impairment and watch the stowage thereof; not to consent to the loading
damage suffered by cargo, and the effect and importance of any merchandise or matter of a dangerous character,
of the jettison, should there be any; and in cases of serious such as inflammable or explosive substances, without the
decisions which require the advice or a meeting of the precautions which are recommended for their packing,
officers of the vessel, or even of the crew and passengers, handling and isolation; not to permit the carriage on deck
he shall record the decisions adopted. For the information of any cargo which by reason of its arrangement, volume,
indicated he shall make use of the binnacle book and of or weight makes the work of the sailors difficult, and
the steam of engine book kept by the engineer. which might endanger the safety of the vessel; and if, on
account of the nature of the merchandise, the special
In the second book called the "accounting book," he shall character of the shipment, and principally the favorable
record all the amounts collected and paid for the account season in which it is undertaken, merchandise may be
of the vessel, entering specifically article by article, the carried on deck, he must hear the opinion of the officers
source of the collection and the amounts spent for of the vessel and have the consent of the shippers and of
provisions, repairs, acquisitions of equipment or goods, the ship agent.
fuel, food, outfits, wages, and other expenses of whatever
nature they may be. He shall furthermore enter therein a 6. To demand a pilot at the expense of the vessel whenever
list of all the members of the crew, stating their domiciles, required by the navigation, and principally when he has to
their wages and salaries, and the amounts they may have enter a port, canal, or river, or has to take a roadstead or
received on account, directly or by delivery to their anchoring place with which neither he nor the officers and
families. crew are acquainted.

In the third book, called "freight book," he shall record the 7. To be on deck on reaching land and to take command
loading and discharge of all the goods, stating their marks on entering and leaving ports, canals, roadsteads, and
and packages, names of the shippers and of the rivers, unless there is a pilot on board discharging his
consignees, ports of loading and unloading, and the duties. He shall not spend the night away from the vessel
freightage they give. In this same book he shall record the except for serious causes or by reason of official business.
names and places of sailing of the passengers, the number
of packages in their baggage, and the price of passage. 8. To present himself, when making a port in distress, to
the maritime authority if in the Philippines and to the
Aimee Nono Calo [Transportation Law] Page 16
consul of the Republic of the Philippines if in a foreign 15. In case of wreck, to make the proper protest in due
country, before twenty-four hours have elapsed, and to form at the first port of arrival, before the competent
make a statement of the name registry, and port of authority or the Philippine consul, within twenty-four
departure of the vessel, of its cargo, and the cause of hours, specifying therein all the incidents of the wreck, in
arrival which declaration shall be visited by the authority or accordance with subdivision 8 of this article.
the consul, if after examining the same it is found to be
acceptable, giving the captain the proper certificate proving 16. To comply with the obligations imposed by the laws
his arrival in distress and the reasons therefor. In the and regulations on navigation, customs, health, and others.
absence of the maritime authority or of the consul, the
declaration must be made before the local authority. ARTICLE 613.

9. To take the necessary steps before the competent A captain who navigates for freight in common or on
authority in order to record in the certificate of the vessel shares may not make any separate transaction for his own
in the registry of vessels the obligations which he may account; and should he do so, the profit which may accrue
contract in accordance with Article 583. shall belong to the other persons interested, and the losses
shall be borne by him exclusively.
10. To place under good care and custody all the papers
and belongings of any members of the crew who might die ARTICLE 614.
on the vessel, drawing up a detailed inventory, in the
A captain who, having made an agreement to make a
presence of passengers, or, in their absence, of members of
voyage, fails to perform his undertaking, without
the crew as witnesses.
prevented by fortuitous accident or force majeure, shall
11. To conduct himself according to the rules and precepts indemnify for all the losses which he may cause without
contained in the instructions of the ship agent, being liable prejudice to the criminal penalties which may be proper.
for all that which he may do in violation thereof.
ARTICLE 615.
12. To inform the ship agent from the port at which the
Without the consent of the agent, the captain cannot have
vessel arrives, of the reason of his arrival, taking advantage
himself substituted by another person; and should he do
of the semaphore, telegraph, mail, etc., as the case may be;
so, besides being liable for all the acts of the substitute and
to notify him of the cargo he may have received, stating
bound to the indemnities mentioned in the foregoing
the names and domiciles of the shippers, freightage earned,
articles, the captain as well as the substitute may be
and amounts borrowed on bottomry loan; to advise him of
discharged by the ship agent.
his departure, and of any operation and date which may be
of interest to him. ARTICLE 616.
13. To observe the rules with respect to situation, lights If the provisions and fuel of the vessel should be
and maneuvers in order to avoid collisions. consumed before arriving at the port of destination, the
captain shall order, with the consent of the officers of the
14. To remain on board, in case the vessel is in danger,
same, the arrival at the nearest port to get a supply of
until all hope to save it is lost, and before abandoning it, to
either; but if there are persons on board who have
hear the officers of the crew, abiding by the decision of the
provisions of their own, he may force them to deliver said
majority; and if the boats are to be taken to, he shall take
provision for the common consumption of all those who
with him, before anything else, the books and papers, and
may be on board, paying the price thereof at the same
then the articles of most value, being obliged to prove, in
time, or at the latest, at the first port reached.
case of the loss of the books and papers, that he did all he
could to save them.

Aimee Nono Calo [Transportation Law] Page 17


ARTICLE 617. the vessel, at a meeting with the shippers or supercargoes
who may be on board.
The captain may not contract loans on respondentia
secured by the cargo; and should he do so, the contracts No exceptions whatsoever shall exempt him from this
shall be void. obligation.

Neither may he borrow money on bottomry for his own 7. For those arising by reason of his voluntarily entering a
transactions, except on the portion of the vessel he owns, port other than that of his destination, outside of the cases
provided no money has been previously borrowed on the or without the formalities referred to in Article 612.
whole vessel, and there does not exist any other kind of
lien or obligation chargeable against the vessel. If he may 8. For those arising by reason of non-observance of the
do so, he must state what interest he has in the vessel. provisions contained in the regulations on situation of
lights and maneuvers for the purpose of preventing
In case of violation of this article, the principal, interest, collisions.
and costs shall be for the personal account of the captain,
and the ship agent may furthermore discharge him. ARTICLE 619.

ARTICLE 618. The captain shall be liable for the cargo from the time it is
delivered to him at the dock or afloat alongside the at the
The captain shall be civilly liable to the ship agent, and the port of loading, until he delivers it on the shore or on the
latter to the third persons who may have made contracts discharging wharf at the port of unloading, unless the
with the former; contrary has been expressly agreed upon.

1. For all the damages suffered by the vessel and its cargo ARTICLE 620.
by reason of want of skill or negligence on his part. If a
misdemeanor or crime has been committed, he shall be The captain shall not be liable for the damages caused to
liable in accordance with the Penal Code. the vessel or to the cargo by force majeure; but he shall
always be so for those arising through his own fault, no
2. For all the thefts committed by the crew, reserving his agreement to the contrary being valid.
right of action against the guilty parties.
Neither shall he be personally liable for the obligations he
3. For the losses, fines, and confiscations imposed an may have contracted for the repair, equipment, and
account of violation of customs, police, health, and provisioning of the vessel, which shall devolve upon the
navigation laws and regulations. ship agent, unless the former has expressly bound himself
personally or has signed a bill of exchange or promissory
4. For the losses and damages caused by mutinies on board note in his name.
the vessel or by reason of faults committed by the crew in
the service and defense of the same, if he does not prove ARTICLE 621.
that he made timely use of all his authority to prevent or
avoid them. A captain who borrows money on the hull, engine, rigging
or tackle of the vessel, or pledges or sells merchandise or
5. For those caused by the misuse of the powers and the provisions outside of the cases and without the formalities
non-fulfillment of the obligations pertaining to him in prescribed in this Code, shall be liable for the principal,
accordance with Articles 610 and 612. interests, and costs, and shall indemnify for the damages
he may cause.
6. For those arising by reason of his going out of his
course or taking a course which he should not have taken
without sufficient cause, in the opinion of the officers of
Aimee Nono Calo [Transportation Law] Page 18
He who commits fraud in his accounts shall pay the log book and in that of the sailing mate, and shall deliver
amount defrauded and shall be subject to the provisions of to the captain the original record of the proceedings,
the Penal Code. stamped and folioed, with a memorandum of the folios,
which he must rubricate, in order that it may be presented
ARTICLE 622. to the judge or court of the port of destination.

If while on a voyage the captain should learn of the The statement of the captain shall be accepted if it is in
appearance of privateers or men of war against his flag, he accordance with those of the crew and passengers; if they
shall be obliged to make the nearest neutral port, inform disagree, the latter shall be accepted, always saying proof to
his agent or shippers, and await an occasion to sail under the contrary.
convoy, or until the danger is over or he has received
express orders from the ship agent or the shippers. ARTICLE 625.

ARTICLE 623. The captain, under his personal responsibility as soon as he


arrives at the port of destination, should get the necessary
If he should be attacked by a privateer, and, after having permission from the health and customs officers, and
tried to avoid the encounter and having resisted the perform the other formalities required by the regulations
delivery of the effects of the vessel or its cargo, they of the administration, delivering the cargo without any
should be forcibly taken away from him, or he should be defalcation, to the consignee, and in a proper case, the
obliged to deliver them, he shall make an entry thereof in vessel, rigging, and freightage to the ship agent.
his freight book and shall prove the fact before the
competent authority at the first port he touches. If by reason of the absence of the consignee or on account
of the nonappearance of a legal holder of the bills of
After the force majeure has been proved, he shall be lading, the captain should not know to whom he is to
exempted from liability. legally make the delivery of the cargo, he shall place it at
the disposal of the proper judge or court or authority, in
ARTICLE 624. order that he may determine what is proper with regard to
its deposit, preservation and custody.
A captain whose vessel has gone through a hurricane or
who believes that the cargo has suffered damages or SECTION THREE
averages, shall make a protest thereon before the
competent authority at the first port he touches, within OFFICERS AND CREW OF VESSELS
twenty-four hours following his arrival and shall ratify it
within the same period when he arrives at his destination, ARTICLE 626.
immediately proceeding with the proof of the facts, and he
may not open the hatches until after this has been done. In order to be a sailing mate it shall be necessary:

The captain shall proceed in the same manner, if, the 1. To have the qualifications required by the marine or
vessel having been wrecked; he is saved alone or with part navigation laws or regulations.
of his crew, in which case he shall appear before the
nearest authority, and make a sworn statement of facts. 2. Not to be disqualified in accordance therewith for the
discharge of his duties.
The authority or the consul shall verify the said facts
receiving sworn statements of the members of the crew ARTICLE 627.
and passengers who may have been saved; and taking such
The sailing mate, as the second chief of the vessel, and
other steps as may assist in arriving at the facts he shall
unless the agent orders otherwise, shall take the place of
make a statement of the result of the proceedings in the
the captain in cases of absence, sickness, or death, and

Aimee Nono Calo [Transportation Law] Page 19


shall then assume all his powers, duties, and criminal liability which may arise, if a felony or
responsibilities. misdemeanor has been committed.

ARTICLE 628. ARTICLE 632.

The sailing mate must provide himself with charts of the The following shall be the obligations of the second mate:
seas in which he will navigate with the astronomical tables
and instruments for observation which are in use and 1. To watch over the preservation of the hull and rigging
which are necessary for the discharge of his duties, being of the vessel, and to take charge of the preservation of the
liable for the accidents which may arise by reason of his tackle and equipment which make up her outfit, suggesting
omission in this regard. to the captain the repairs necessary and the replacement of
the goods and implements which are rendered useless and
ARTICLE 629. are lost.

The sailing mate shall particularly and personally keep a 2. To take care that the cargo is well arranged, keeping the
book, folioed and stamped on all its pages, denominated vessel always ready for maneuver.
"Binnacle Book" with a memorandum at the beginning
stating the number of folios it contains, signed by the 3. To preserve order, discipline, and good service among
competent authority, and shall enter therein daily the the crew, requesting the necessary orders and Instructions
distance, the course travelled, the variations of the needle, of the captain, and giving him prompt information of any
the leeway, the direction and force of the wind, the occurrence in which the intervention of his authority may
condition of the atmosphere and of the sea, the rigging set, be necessary.
the latitude and longitude observed, the number of furnace
heated, the steam pressure, the number of revolutions, and 4. To assign to each sailor the work he is to do on board,
under the title "incidents," the maneuvers made, the in accordance with the instruction received and to see that
meeting with other vessels, and all the details and incidents it is promptly and accurately carried out.
which. may occur during the voyage.
5. To take charge under inventory of the rigging and all the
ARTICLE 630. equipment of the vessel, if it should be laid up, unless the
ship agent has ordered otherwise.
In order to change the course and to take the one most
convenient for a good voyage of the vessel, the sailing With regard to engineers the following rules shall govern:
mate shall come to an agreement with the captain. If the
1. In order to be taken on board as a marine engineer
latter should object, the sailing mate shall state to him the
forming part of the complement of a merchant vessel, it
proper observations in the presence of the other officers
shall be necessary to have the qualifications which the laws
of the sea. If the captain should still insist on his negative
and regulations require, and not be disqualified in
decision, the sailing mate shall make the proper protest,
accordance therewith for the discharge of his duties.
signed by him and by one other officer, in the log book,
Engineers shall be considered officers of the vessel but
and shall obey the captain, who alone shall be responsible
they shall have no authority or intervention except in
for the consequences of his decision.
matters referring to the motor apparatus.
ARTICLE 631.
2. When there are two or more engineers on board a
The sailing mate shall be responsible for all the damages vessel, one of them shall be the chief, and the other
caused to the vessel and the cargo by reason of his engineers and all the personnel of the engines shall be
negligence or want of skill without prejudice to the under his orders; he shall also have charge of the motor
apparatus, the spare parts, the instruments and tools

Aimee Nono Calo [Transportation Law] Page 20


pertaining thereto, the fuel, the lubricating material and, ARTICLE 633.
finally, whatever is entrusted to an engineer on board a
vessel. The second mate shall take command of the vessel in case
of the inability or disqualification of the captain and the
3. He shall keep the engines and boilers in good condition sailing mate, assuming in such case their powers and
and state of cleanliness, and shall order what may be responsibility.
proper in order that they may always be ready to work with
regularity, being liable for the accidents or damages which ARTICLE 634.
his negligence or want of skill may cause to the motor
apparatus, to the vessel and to the cargo, without prejudice The captain may make up the crew of his vessel with such
to the criminal liability which may be proper if there has number of men as he may consider proper, and in the
been a felony or misdemeanor. absence of Filipino sailors, he may take on foreigners
residing in the country, the number thereof not to exceed
4. He shall not make any change in the motor apparatus, or one-fifth of the crew. If in foreign ports the captain should
proceed to repair the averages he may have noticed in the not find a sufficient number of Filipino sailors, he may
same, or change the normal speed of its movement complete the crew with foreigners, with the consent of the
without the prior authorization of the captain., to whom, if consul or marine authorities.
he should object to their being made, he shall state the
proper observations in the presence of the other engineers The agreement which the captain may make with the
or officers; and if, notwithstanding this, the captain should members of the crew and others who go to make up the
insist on his objection, the chief engineer shall make the complement of the vessel, to which reference is made in
proper protests, entering the same in the engine book, and Article 612, must be reduced to writing in the account
shall obey the captain, who, alone shall be responsible for book, without the intervention of a notary public or clerk
the consequences of his decision. of court ("escribano"), signed by the parties thereto and
visaed by the marine authority if they be executed in
5. He shall inform the captain of any average which may Philippine territory or by the consuls or consular agents of
occur in the motor apparatus, and shall advise him the Republic of the Philippines if executed abroad, stating
whenever it may be necessary to stop the engines for some therein all the obligations which each one contracts and all
time, or when any other incident occurs in his department the rights he acquires said authorities taking care that these
of which the captain should be immediately informed, obligations and rights are recorded in a clear and definite
besides frequently advising him of the consumption of fuel manner which give no room for doubts or claims.
and lubricating material.
The captain shall take care to read to them the articles of
6. He shall keep a book or registry called the "engine this Code which concern them, stating in said document
book," in which shall be entered all the date referring to that they were read.
the work of the engines, such as, for example, the number
of furnaces heated, the vacuum in the condenser, the If the book contains the requisites prescribed in Article
temperature, the degree of saturation of the water in the 612, and there should not appear any signs of alterations in
boilers the consumption of fuel and lubricating material, its entries, it shall be admitted as evidence in questions
and under the heading of "noteworthy occurrences," the which may arise between the captain and the crew with
averages and maladjustments which occur in the engines respect to the agreements contained therein and the
and boilers, the causes thereof and the means employed to amounts paid on account of the same.
repair the same likewise, the force and direction of the
Every member of the crew may demand of the captain a
wind, the rigging set and the speed of the vessel shall be
copy, signed by the latter, of the agreement and of the
stated, taking the information from the Binnacle Book.
liquidation of his wages, as they appear in the book.

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ARTICLE 635. 3. Repeated incapacity and negligence in the fulfillment of
the service he should render.
A seaman who has been contracted to serve on a vessel
may not rescind his contract or fail to comply therewith 4. Habitual drunkenness.
except by reason of a legitimate impediment which may
have happened to him. 5. Any occurrence which incapacitates the seaman to
perform the work entrusted to him, with the exception of
Neither may he transfer from the service of one vessel to that provided in Article 644.
another without obtaining the written permission of the
captain of the vessel on which he may be. 6. Desertion.

If, without obtaining said permission, the seaman who has The captain may, however, before getting out on a voyage
signed for one vessel should sign for another one, the and without giving any reason, refuse to permit a seaman
second contract shall be void, and the captain may choose whom he may have engaged to go on board, and leave him
between forcing him to fulfill the service to which he first on land, in which case he will be obliged to pay him his
bound himself, or at his expense to look for a person to wages as if he had rendered services.
substitute him.
This indemnity shall be paid from the funds of the vessel if
Furthermore, he shall lose the wages earned on his first the captain should have acted for reasons of prudence and
contract, to the benefit of the vessel for which he had in the interest of the safety and good services of the
signed. farmer. Should this not be the case, it shall be paid by the
captain personally.
A captain who, knowing that a seaman is in the service of
another vessel, should have made a new agreement with After the voyage has begun, during the same, and until the
him without having required of him the permission conclusion thereof, the captain may not abandon any
referred to in the preceding paragraphs, shall be member of his crew on land or on sea, unless, by reason of
subsidiarily responsible to the captain of the vessel to some crime, his imprisonment and delivery to the
which the seaman first belonged, for that part of the competent authority in the first port touched should be
indemnity, referred to in the third paragraph of this article, proper, a matter obligatory for the captain.
which the seaman may not be able to pay.
ARTICLE 638.
ARTICLE 636.
If, after the crew has been engaged, the voyage is revoked
If there is no fixed period for which a seaman has been by the will of the ship agent or of the charterers before or
contracted he may not be discharged until the end of the after the vessel has put to sea, or if the vessel is for the
return voyage to the port where he enlisted. same reason given a destination different from that fixed in
the agreement with the crew, the latter shall be indemnified
ARTICLE 637. on account of the rescission of the contract, according to
the cases follows:
Neither may the captain discharge a seaman during the
time of his contract except for just cause, the following 1. If the revocation of the voyage should be decided upon
being considered as such: before the departure of the vessel from the port, each
sailor engaged shall be given one month's salary, besides
1. The perpetration of a crime which disturbs order on the what may be due him, in accordance with his contract, for
vessel. the services rendered to the vessel up to the date of the
revocation.
2. Repeated insubordination, want of discipline, or non-
fulfillment of the service.
Aimee Nono Calo [Transportation Law] Page 22
2. If the agreement should have been for a fixed amount ARTICLE 639.
for the whole voyage, that which may be due for said
month and days shall be determined in proportion to the If the revocation of the voyage should arise from a just
approximate number of days the voyage should have cause independent of the will of the ship agent and
lasted, in the judgment of experts, in the manner charterers, and the vessel should not have left the port, the
established in the law of Civil Procedure; and if the members of the crew shall have no other right than to
proposed voyage should be of such short duration that it is collect the wages earned up to the day on which the
calculated at approximately one month, the indemnity shall revocation took place.
be fixed for fifteen days, discounting in all cases the sums
advanced. ARTICLE 640.

3. If the revocation should take place after the vessel has The following shall be just causes for the revocation of the
put to sea, the seamen engaged for a fixed amount for the voyage.
voyage shall receive in full the salary which may have been
1. A declaration of war or interdiction of commerce with
offered them as if the voyage had terminated; and those
the power to whose territory the vessel was bound.
engaged by the month shall receive the amount
corresponding to the time they might have been on board 2. The blockade of the port of its destination, or the
and to the time they may require to arrive at the port of breaking out of an epidemic after the agreement.
destination, the captain being obliged, furthermore, to pay
the seamen in both cases, the passage to the said port or to 3. The prohibition to receive in said port the goods which
the port of sailing of the vessel, as may be convenient for make up the cargo of the vessel.
them.
4. The detention or embargo of the same by order of the
4. If the ship agent or the charterers of the vessel should government, or for any other reason independent of the
give it a destination different from that fixed in the will of the ship agent.
agreement, and the members of the crew should not agree
thereto, they shall be given by way of indemnity half the 5. The inability of the vessel to navigate.
amount fixed in case No. 1, besides what may be owed
them for the part of the monthly wages corresponding to ARTICLE 641.
the days which have elapsed from the date of their
agreements. If, after a voyage has been begun, any of the first three
causes mentioned in the foregoing article should occur, the
If they accept the change, and the voyage, on account of sailors shall be paid at the port which the captain may
the greater distance or of other reasons, should give rise to deem advisable to make for the benefit of the vessel and
an increase of wages, the latter shall be adjusted privately cargo, according to the time they may have served thereon;
or through amicable arbitrators in case of disagreement. but if the vessel is to continue its voyage, the captain and
Even though the voyage should be shortened to a nearer the crew may mutually demand the enforcement of the
point, this shall not give rise to a reduction in the wages contract.
agreed upon.
In case of the occurrence of the fourth cause, the crew
If the revocation or change of the voyage should come shall continue to be paid half wages, if the agreement is by
from the shippers or charterers, the agent shall have a right month; but if the detention should exceed three months,
to demand of them the indemnity which may be justly due. the contract shall be rescinded and the crew shall be paid
what they should have earned according to the contract if
the voyage had been concluded. And if the agreement
should be for a fixed sum for the voyage, the contract
must be complied within the terms agreed upon.
Aimee Nono Calo [Transportation Law] Page 23
In the fifth case, the crew shall have no other right than to attended and cured at the expense of the common funds
collect the wages earned; but if the disability of the vessel deducting, before anything else, from the proceeds of the
should have been caused by the negligence or lack of skill freightage the cost of the attendance and cure.
of the captain, engineer, or sailing mate, they shall
indemnify the crew for the damages suffered, always ARTICLE 645.
without prejudice to the criminal liability which may be
proper. If a seaman should die during the voyage, his heirs will be
given the wages earned and not received according to his
ARTICLE 642. contract and the cause of his death, namely —

If the crew have been engaged on shares, they shall not be If he died a natural death and was engaged on wages, that
entitled, by reason of the revocation, delay, or greater which may have been earned up to the date of his death
extension of the voyage, to anything but the proportionate shall be paid.
part of the indemnity which way be paid into the common
funds of the vessel by the persons liable for said If the contract was for a fixed sum for the whole voyage,
occurrences. half the amount earned shall be paid if the seamen died on
the voyage out, and the whole amount if he died on the
ARTICLE 643. return voyage.

If the vessel and her cargo should be totally lost, by reason And if the contract was on shares and death occurred after
of capture or wreck, all rights shall be extinguished, both the voyage was begun, the heirs shall be paid the entire
as regards the crew to demand any wages whatsoever, and portion due the seaman; but if the latter died before the
as regards the ship agent to recover the advances made. departure of the vessel from the port, the heirs shall not be
entitled to claim anything.
If a portion of the vessel or of the cargo, or of both,
should be saved, the crew engaged on wages, including the If death occurred in the defense of the vessel, the seaman
captain, shall retain their rights on the salvage, so far as shall be considered as living, and his heirs shall be paid, at
they go, on the remainder of the vessel as well as on the the end of the voyage, the full amount of wages or the
amount of the freightage of the cargo saved; but sailors integral part of the profits which may be due him as to
who are engaged on shares shall not have any right others of his class.
whatsoever on the salvage of the hull, but only on the
portion of the freightage saved. If they should have In the same manner, the seaman captured while defending
worked to recover the remainder of the shipwrecked vessel the vessel shall be considered present so as to enjoy the
they shall be given from the amount of the salvage an same benefits as the rest; but should he have been
award in proportion of the efforts made and to the risks, captured on account of carelessness or other accident not
encountered in order to accomplish the salvage. related to the service, he shall only receive the wages due
up to the day of his capture.
ARTICLE 644.
ARTICLE 646.
A seaman who falls sick shall not lose his right to wages
during the voyage, unless the sickness is the result of his The vessel with her engines, rigging, equipment, and
own fault. At any rate, the costs of the attendance and cure freightage shall he liable for the wages earned by the crew
shall be defrayed from the common funds, in the form of a engaged per month or for the trip, the liquidation and
loan. payment to take place between one voyage and the other.

If the sickness should come from an injury received in the


service or defense of the vessel, the seaman shall be

Aimee Nono Calo [Transportation Law] Page 24


After a new voyage has been undertaken, credits of such shall continue in force for all acts which are inseparable
kind pertaining to the preceding voyage shall lose their from his authority and office.
right of preference.
ARTICLE 650.
ARTICLE 647.
All the provisions contained in the second section of Title
The officers and the crew of the vessel shall be free from III, Book II, with regard to capacity, manner of making
all obligations if they deem it proper, in the following contracts, and liabilities of factors, shall be applicable to
cases: supercargoes.

1. If, before beginning the voyage, the captain attempts to ARTICLE 651.
change it, or a naval war with the power to which the
vessel was destined occurs. Supercargoes may not, without special authorization or
agreement, make any transaction for their own account
2. If a disease should break out and be officially declared during the voyage, with the exception of the ventures
an epidemic in the port of destination. which, in accordance with the custom of the port of
destination, they are permitted to do.
3. If the vessel should change owner or captain.
Neither shall they be permitted to invest in the return trip
ARTICLE 648. more than the profits from the ventures, unless there is an
express authorization from the principals.
By the complement of a vessel shall be understood all the
persons on board, from the captain to the cabin boy, TITLE THREE
necessary for the management, maneuvers, and service,
and therefore, the complement shall include the crew, the SPECIAL CONTRACTS OF MARITIME
sailing mates, engineers, stokers and other employees on COMMERCE
board not having specific designations; but it shall not
include the passengers or the persons whom the vessel is SECTION ONE
transporting.
CHARTER PARTIES
SECTION FOUR
PART I
SUPERCARGOES
FORMS AND EFFECTS OF CHARTER PARTIES
ARTICLE 649.
ARTICLE 652.
Supercargoes shall discharge on board the vessel the
administrative duties which the ship agent or the shippers A charter party must be drawn in duplicate and signed by
may have assigned to them; they shall keep an account and the contracting parties, and when either does not know
record of their transactions in a book which shall have the how or is not able to do so, by two witnesses at his
same conditions and requisites as required for the request.
accounting book of the captain, and they shall respect the
The charter party shall contain, besides the conditions
latter in his capacity as chief of the vessel.
freely stipulated, the following circumstances:
The powers and responsibilities of the captain shall cease,
1. The kind, name, and tonnage of the vessel.
when there is a supercargo, with regard to that part of the
administration legitimately conferred upon the latter, but 2. Its flag and port of registry.

Aimee Nono Calo [Transportation Law] Page 25


3. The name, surname, and domicile of the captain. The contracts shall also be admitted as evidence, even
though a broker has not taken part therein, if the
4. The name, surname, and domicile of the ship agent, if contracting parties acknowledge the signatures to be the
the latter should make the charter party. same as their own.

5. The name, surname, and domicile of the charterer; and If no broker has intervened in the charter party and the
if he states that he is acting by commission, that of the signatures are not acknowledged, doubts shall be decided
person for whose account he makes the contract. by what is provided for in the bill of lading and in the
absence thereof, by the proofs submitted by the parties.
6. The port of loading and unloading.
ARTICLE 655.
7. The capacity, number of tons or the weight or
measurement which they respectively bind themselves to Charter parties executed by the captain in the absence of
load and to transport, or whether the charter party is total. the ship agent shall be valid and effective, even though in
executing them he should have acted in violation of the
8. The freightage to be paid, stating whether it is to be a orders and instructions of the ship agent or shipowner; but
fixed amount for the voyage or so much per month, or for the latter shall have a right of action against the captain for
the space to be occupied, or for the weight or measure of indemnification of damages.
the goods of which the cargo consists, or in any other
manner whatsoever agreed upon. ARTICLE 656.

9. The amount of primage to be paid to the captain. If in the charter party the time in which the loading and
unloading are to take place is not stated, the usages of the
10. The days agreed upon for loading and unloading. port where these acts take place shall be observed. After
the stipulated or the customary period has passed, and
11. The lay days and extra lay days to be allowed and the
there is no express proviso in the charter party fixing the
demurrage to be paid for each of them.
indemnity for the delay, the captain shall be entitled to
ARTICLE 653. demand demurrage for the lay days and extra lay days
which may have elapsed in loading and unloading.
If the cargo should be received without the charter party
having been signed, the contract shall be understood as ARTICLE 657.
executed in accordance with what appears in the bill of
If during the voyage the vessel should be rendered
lading, the sole evidence of title with regard to the cargo
unseaworthy, the captain shall be obliged to charter at his
for determining the rights and obligations of the ship
expense another one in good condition to receive the
agent, of the captain, and of the charterer.
cargo and carry it to its destination, for which purpose he
ARTICLE 654. shall be obliged to look for a vessel not only at the port of
arrival but also in the neighborhood within distance of 150
The charter parties executed with the intervention of a kilometers.
broker, who certifies to the authenticity of the signatures
of the contracting parties because they were signed in his If the captain, through indolence or malice, should not
presence, shall be full evidence in court; and if they should furnish a vessel to its destination, the shippers, after
be conflicting, that which accords with one which the requiring the captain to charter a vessel within an
broker must keep in his registry, if kept in accordance with inextendible period, may charter one and petition the
law, shall govern. judicial authority to summarily approve the charter party
which they may have made.

Aimee Nono Calo [Transportation Law] Page 26


The same authority shall judicially ("por la via de The same rule shall be observed in the payment of the
appremio") compel the captain, to carry out, for his freightage, which shall be in full if the vessel arrives at her
account and under his responsibility, the charter made by destination, and in proportion to the distance covered if
the shippers. she should be lost before arrival.

If the captain, notwithstanding his diligence, should not ARTICLE 660.


find a vessel for the charter, he shall deposit the cargo at
the disposal of the shippers, to whom he shall Merchandise jettisoned for the common safety shall not
communicate the facts on the first opportunity which pay freightage; but the amount of the latter shall be
presents itself, the freight being adjusted in such cases by considered as general average computing the same in
the distance covered by the vessel, with no right to any proportion to the distance covered when they were
indemnification whatsoever. jettisoned.

ARTICLE 658. ARTICLE 661.

The freightage shall accrue according to the conditions Neither merchandise lost by reason of shipwreck or
stipulated in the contract, and should they not be stranding nor those seized by the pirates or enemies, shall
expressed, or should they be ambiguous, the following pay freightage.
rules shall be observed:
If the freightage should have been paid in advance, it shall
1. If the vessel has been chartered by months or by days, be returned, unless there is an agreement to the contrary.
the freightage shall begin to run from the day the loading
of the vessel is begun. ARTICLE 662.

2. In charters made for a fixed period, the freightage shall If the vessel or the merchandise should be redeemed, or
begin to run from that very day. the effects of the shipwreck be salvaged, the freightage
corresponding to the distance covered by the vessel
3. If the freightage is charged according to weight, the transporting the cargo shall be paid; and should the vessel,
payment shall be made according to gross weight, after being repaired, transport said merchandise to the port
including the containers, such as barrels or any other of destination, the full freightage shall be paid, without
objects in which the cargo is contained. prejudice to what may be due by reason of the average.

ARTICLE 659. ARTICLE 663.

The merchandise sold by the captain to pay for the Merchandise which suffer deterioration or diminutions on
necessary repairs to the hull, machinery or equipment, or account of inherent defects or bad quality and condition of
for unavoidable and urgent needs, shall pay freightage. the packing, or because of fortuitous event, shall pay
freightage in full and as stipulated in the charter party.
The price of this merchandise shall be fixed according to
the result of the voyage, namely: ARTICLE 664.

1. If the vessel should arrive safely at the port of The natural increase in weight or size of the merchandise
destination, the captain shall pay the price which the sale loaded on the vessel shall accrue to the benefit of the
of merchandise of the same kind brings at that port. owner, and shall pay the proper freightage fixed in the
contract for the same.
2. If the vessel should be lost, the captain shall pay the
price realized from said merchandise in the sale.

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ARTICLE 665. PART 2

The cargo shall be specially liable for the payment of the RIGHTS AND OBLIGATIONS OF SHIPOWNERS
freightage, expenses and duties arising therefrom, which
must be reimbursed by the shippers, as well as for the part ARTICLE 669.
of the general average which may correspond to it; but it
shall not be legal for the captain to delay unloading on The shipowner or the captain shall observe in charter
account of suspicion that this obligation may not be parties the capacity of the vessel or that expressly
complied with. Should there be reasons for distrust, the designated in its registry, a difference greater than 2 per
judge or court, at the instance of the captain, may order cent between that stated and her true capacity not being
the deposit of the merchandise until he has been paid in permissible.
full.
If the shipowner or the captain should contract to carry a
ARTICLE 666. greater amount of cargo than the vessel can carry in view
of her tonnage, they shall indemnify the shippers whose
The captain may request the sale of the cargo to the contracts they do not fulfill for the losses they may have
amount necessary to pay the freightage, expenses, and caused when by reason of their default, according to the
averages due him, reserving the right to demand the following cases, viz:
balance due him therefor if the proceeds of the sale should
not suffice to cover his credit. If the vessel has been chartered by one shipper only, and
there should appear to be an error or fraud in her capacity,
ARTICLE 667. and the charterer should not wish to rescind the contract,
when he has a right to do so, the freightage shall he
The goods loaded shall be liable in the first place for the reduced in proportion to the cargo which the vessel can
freight and expenses thereof during twenty days, to be not receive, the person from whom the vessel is chartered
counted from the date of their delivery or deposit. During being furthermore obliged to indemnify the charterer for
this period, the sale of the same may be requested, even the losses he may have caused him.
though there be other creditors and the bankruptcy of the
shipper or consignee should occur. If, on the contrary there should be several charter parties,
and by reason of want of space all the cargo contracted for
This right may not he made use of, however, on the goods cannot be loaded, and none of the charterers desires to
which, after being delivered, were turned over to a third rescind the contract, preference shall be given to the
person without malice on the part of the latter and for a person who has already loaded and arranged the freight in
valuable consideration. the vessel, and the rest shall take the places corresponding
to them in the order of the dates of their contracts.
ARTICLE 668.
Should there be no priority, the charterers may load, if they
If the consignee should not be found or should refuse to wish, in proportion to the amounts of weight or space for
receive the cargo, the judge or court, at the instance of the which each may have contracted, and the person from
captain, shall order its deposit and the sale of what may be whom the vessel was chartered shall he obliged to
necessary to pay the freightage and other expenses on the indemnify them for losses and damages.
same.
ARTICLE 670.
The sale shall likewise be allowed when the goods
deposited run the risk of deteriorating, or by reason of If the person from whom the vessel is chartered, after
their condition or other circumstances the expenses of receiving a part of the freight, should not find sufficient to
preservation and custody should be disproportionate. make up at least three-fifths of the amount which the

Aimee Nono Calo [Transportation Law] Page 28


vessel may hold, at the price he may have fixed, he may ARTICLE 674.
substitute for the transportation another vessel inspected
and declared suitable for the same voyage, the expenses of If the charterer should carry to the vessel more cargo than
transfer and the increase in the price of the charter, should that contracted for, the excess may be admitted in
there be any, being for his account. Should he not be able accordance with the price stipulated in the contract, if it
to make this change, he shall undertake the voyage at the can be well stowed without injuring the other shippers; but
time agreed upon; and should no time have been fixed, if in order to load it, the vessel would be thrown out of
within fifteen days from the time the loading began, unless trim, the captain must refuse it or unload it at the expense
otherwise stipulated. of its owner.

If the owner of the part of the freight already loaded In the same manner, the captain may, before leaving the
should procure some more at the same price and under port, unload merchandise clandestinely placed on board, or
similar or proportionate conditions to those accepted for transport them, if he can do so with the vessel in trim,
the freight received, the person from whom the vessel is demanding by way of freightage the highest price which
chartered or the captain cannot refuse to accept the rest of may have been stipulated for said voyage.
the cargo; and should he do so, the shipper shall have a
right to demand that the vessel put to sea with the cargo ARTICLE 675.
which it may have on board.
If the vessel has been chartered to receive the cargo in
ARTICLE 671. another port, the captain shall appear before the consignee
designated in the charter party; and, should the latter not
After three-fifths of the vessel has been loaded, the person deliver the cargo to him, he shall inform the charterer and
from whom she is chartered may not, without the consent wait his instructions, the lay days agreed upon or those
of the charterers or shippers, substitute the vessel allowed by custom in the port beginning to run in the
designated in the charter party by another one, under the meantime, unless there is an express, agreement to the
penalty of making himself thereby liable for all the losses contrary.
and damages occurring during the voyage to the cargo of
those who did not consent to the change. Should the captain not receive an answer within the time
necessary therefor, he shall make efforts to find freight;
ARTICLE 672. and should he not find any after the lay days and extra lay
days have elapsed, he shall make a protest and return to
If the vessel has been chartered in whole, the captain may the port where the charter was made.
not, without the consent of the charterer, accept cargo
from any other person; and should he do so, said charterer The charterer shall pay the freightage in full, discounting
may oblige him to unload it and to indemnify him for the that which may have been earned on the merchandise
losses suffered thereby. which may have been carried on the voyage out or on the
return trip, if carried for the account of third persons.
ARTICLE 673.
The same shall be done if a vessel, having been chartered
The person from whom the vessel is chartered shall he for the round trip, should not be given any cargo on its
liable for all the losses caused to the charterer by reason of return.
the voluntary delay of the captain in putting to sea,
according to the rules prescribed, provided he has been ARTICLE 676.
requested, notarially or judicially, to put to sea at the
proper time. The captain shall lose the freightage and shall indemnify
the charterers if the latter should prove, even against the
certificate of inspection, if one has been made at the port

Aimee Nono Calo [Transportation Law] Page 29


of departure, that the vessel was not in a condition to freight to complete the load of the vessel, in which case
navigate at the time of receiving the cargo. the first charterer shall pay the difference, should there be
any.
ARTICLE 677.
ARTICLE 681.
The charter party shall subsist if a declaration of war or a
blockade should take place during the voyage, the captain If the charterer should load goods different from those
not having any instructions from the charterer. In such stated at the time of executing the charter party, without
case the captain must proceed to the nearest safe and the knowledge of the person from whom the vessel was
neutral port, requesting and awaiting orders from the chartered or of the captain, and should thereby give rise to
shipper, and the expenses and salaries paid during the losses, by reason of confiscation, embargo, detention, or
detention shall be paid as general average. other causes, to the person from whom the vessel was
chartered or to the shippers, the person giving rise thereto
If, by orders of the shipper, the cargo should be discharged shall be liable with the value of his shipment and
at the port of arrival, the freightage for the voyage out shall furthermore with his property, for the full indemnity to all
be paid in full. those injured through his fault.

ARTICLE 678. ARTICLE 682.

If the time necessary, in the opinion of the judge or court, If the merchandise should have been shipped for the
to receive the orders of the shipper should have elapse, purpose of illicit commerce, and were taken on board with
without the captain having received any instructions, the the knowledge of the person from whom the vessel was
cargo shall be deposited, and it shall be liable for the chartered or of the captain, the latter, jointly with the
payment of the freightage and expenses on its account owner of the same, shall be liable for all the losses which
during the delay, which shall be paid from the proceeds of may be caused the other shippers; and even though it may
the part first sold. have been stipulated, they cannot demand any indemnity
whatsoever from the charterer for the damaged caused to
PART 3 the vessel.
OBLIGATIONS OF CHARTERERS ARTICLE 683.
ARTICLE 679. In case of making a port to repair the hull, machinery, or
equipment of the vessel, the shippers must await until the
The charterer of an entire vessel may sub-charter the
vessel is repaired, being permitted to unload it at their own
whole or part thereof on such terms as he may consider
expense should they deem it proper.
most convenient, the captain not being allowed to refuse
to receive on board the freight delivered by the second If, for the benefit of the cargo subject to deterioration, the
charterers, provided that the conditions of the first charter shippers or the court, or the consul, or the competent
are not change, and that the price agreed upon is paid in authority in a foreign country, should order the
full to the person from whom the vessel is chartered, even merchandise to be unloaded, the expenses of unloading
though the full cargo is not embarked, with the limitation and reloading shall be for the account of the former.
established in the next article.
ARTICLE 684.
ARTICLE 680.
If the charterer, without the occurrence of any of the cases
A charterer who does not complete the full cargo he of force majeure mentioned in the foregoing article, should
bound himself to ship shall pay the freightage of the wish to unload his merchandise before arriving at the port
amount he fails to ship, if the captain does not take other
Aimee Nono Calo [Transportation Law] Page 30
of destination, he shall pay the full freightage, the expenses be an error in the statement of the flag under which she
of the arrival made at his request, and the losses and sails.
damages caused the other shippers, should there be any.
2. If the vessel should not be placed at the disposal of the
ARTICLE 685. charterer within the period and in the manner agreed
upon.
In charters for transportation of general freight, any of the
shippers may unload the merchandise before the beginning 3. If after the vessel has put to sea, she should return to the
of the voyage, paying one-half of the freightage, the port of departure, on account of risk from pirates,
expense of stowing and restowing the cargo, and any other enemies, or bad weather, and the shippers should agree to
damage which for his reason he may cause the other unload her.
shippers.
In the second and third cases the person from whom the
ARTICLE 686. vessel was chartered shall indemnify the charterer for the
voyage out.
After the vessel has been unloaded and the cargo placed at
the disposal of the consignee, the latter must immediately 4. If the charter should have been made by the months, the
pay the captain the freightage due and the other expenses charterers shall pay the full freightage for one month, if the
for which said cargo may be liable. voyage is for a port in the same waters, and for two
months, if for a port in different waters.
The primage must be paid in the same proportion and at
the same time as the freightage, all the changes and From one port to another of the Philippines and adjacent
modifications to which the latter should be subject also islands, the freightage for one month only shall be paid.
governing the former.
5. If the vessel should make a port during the voyage in
ARTICLE 687. order to make urgent repairs, and the charterers should
prefer to dispose of the merchandise.
The charterers and shippers may not abandon merchandise
damaged on account of inherent defect or fortuitous event, When the delay does not exceed thirty days, the shippers
for the payment of the freightage and other expenses. shall pay the full freightage for the voyage out.

The abandonment shall be proper, however, if the cargo Should the delay exceed thirty days, they shall only pay the
should consist of liquids and they have leaked out, nothing freightage in proportion to the distance covered by the
remaining in the containers but one-fourth part of their vessel.
contents.
ARTICLE 689.
PART 4
At the request of the person from whom the vessel is
TOTAL OR PARTIAL RESCISSION OF chartered the charter party may be rescinded:
CHARTER PARTIES
1. If the charterer, at the termination of the extra lay days,
ARTICLE 688. does not place the cargo alongside the vessel.

A charter party may be rescinded at the request of the In such case the charterer must pay half the freight
charterer: stipulated, besides the demurrage due for the lay days and
extra lay days.
1. If before loading the vessel he should not agree with
that stated in the certificate of tonnage, or if there should

Aimee Nono Calo [Transportation Law] Page 31


2. If the person from whom the vessel was chartered The subsistence and wages of the crew shall be considered
should sell it before the charterer has begun to load it, and as general average.
the purchaser should load it for his own account.
During the interruption, the charterer may at the proper
In such case the vendor shall indemnify the charterer for time and for his own account, unload and load the
the losses he may suffer. merchandise, paying demurrage if he delays the reloading
after the cause for the detention has ceased.
If the new owner of the vessel should not load it for his
own account, the charter party shall be respected, and the ARTICLE 692.
vendor shall indemnify the purchaser if the former did not
inform him of the charter pending at the time of making A charter party shall be partially rescinded, unless there is
the sale. an agreement to the contrary, and the captain shall only be
entitled to the freightage for the voyage out, if, by reason
ARTICLE 690. of a declaration of war, closing of ports, or interdiction of
commercial relations during the voyage, the vessel should
The charter party shall be rescinded and all actions arising make the port designated for such a case in the
therefrom shall be extinguished, if, before the vessel puts instructions of the charterer.
to sea from the port of departure, any of the following
cases should occur: PART 5

1. A declaration of war or interdiction of commerce with PASSENGERS ON SEA VOYAGES


the power to whose ports the vessel was to make its
voyage. ARTICLE 693.

2. A condition of blockade of the port of destination of If the passage price has not been agreed upon, the judge or
said vessel, or the breaking out of an epidemic after the court shall summarily fix it, after a declaration of experts.
contract was executed.
ARTICLE 694.
3. The prohibition to receive at the said port the
merchandise constituting the cargo of the vessel. Should the passenger not arrive on board at the time fixed,
or should leave the vessel without permission from the
4. An indefinite detention, by reason of an embargo of the captain when the latter is ready to leave the port, the
vessel by order of the government, or for any other reason captain may continue the voyage and demand the full
independent of the will of the ship agent. passage price.

5. The inability of the vessel to navigate, without fault of ARTICLE 695.


the captain or ship agent.
The right to passage, if issued to a specified person, may
The unloading shall be made for the account of the not be transferred without the consent of the captain or of
charterer. the consignee.

ARTICLE 691. ARTICLE 696.

If the vessel cannot put to sea on account of the closing of If before beginning the voyage the passenger should die,
the port of departure or any other temporary cause, the his heirs shall only be obliged to pay half of the fare agreed
charter shall remain in force, with neither one of the upon.
contracting parties having a right to claim damages.

Aimee Nono Calo [Transportation Law] Page 32


If the expenses of subsistence are included in the price ARTICLE 699.
stipulated, the judge or court, after hearing experts if he
considers it necessary, shall fix the amount which has to be If the contract is rescinded, before or after the
left for the benefit of the vessel. commencement of the voyage, the captain shall have a
right to claim payment of what he may have furnished the
Should another passenger be received in the place of the passengers.
deceased, no payment shall be made by said heirs.
ARTICLE 700.
ARTICLE 697.
In all matters pertaining to the preservation of order and
If before the voyage is begun it is suspended through the discipline on board the vessel passengers shall be subject
exclusive fault of the captain or ship agent, the passengers to the orders of the captain, without any distinction
shall have the right to a refund of their fares and to recover whatsoever.
losses and damages; but if the suspension is due to
fortuitous events, or to force majeure, or to any other ARTICLE 701.
cause independent of the captain or ship agent, the
passengers shall only be entitled to the return of the fare. The convenience or the interest of the passengers shall not
obligate or empowers the captain to stand in shore or enter
ARTICLE 698. places which may take the vessel out of her course, or to
remain in the ports he must or in under necessity of
In case a voyage already begun should be interrupted, the touching for a period longer than that required by the
passengers shall be obliged to pay the fare in proportion to needs of navigation.
the distance covered, without right to recover for losses
and damages if the interruption is due to fortuitous event ARTICLE 702.
or to force majeure, but with a right to indemnity if the
interruption should have been caused by the captain In the absence of an agreement to the contrary, it shall be
exclusively. If the interruption should be caused by the understood that the subsistence of the passengers during
disability of the vessel, and a passenger should agree to the voyage is included in the price of the passage; but
await the repairs, he may not be required to pay any should it be for the account of the latter, the captain shall
increased price of passage, but his living expenses during be under obligation, in case of necessity, to furnish the
the stay shall be for his own account. supply of food necessary for their sustenance at a
reasonable price.
In case of delay in the departure of the vessel, the
passengers have the right to remain on board and to be ARTICLE 703.
furnished with food for the account of the vessel unless
A passenger shall be considered a shipper insofar as the
the delay is due to fortuitous events or to force majeure. If
goods he carries on board are concerned, and the captain
the delay should exceed ten days, passengers requesting the
shall not be responsible for what the former may keep
same shall be entitled to the return of the fare; and if it is
under his immediate and special custody, unless the
due exclusively to the fault of the captain or ship agent,
damage arises from an act of the captain or of the crew.
they may also demand indemnity for losses and damages.
ARTICLE 704.
A vessel exclusively devoted to the transportation of
passengers must take them directly to the port or ports of The captain, in order to collect the passage-money and
destination, no matter what the number of passengers may expenses of sustenance, may retain the goods belonging to
be, making all the stops indicated in its itinerary. the passenger, and in case of the sale of the same he shall
be given preference over other creditors acting the same
way as in the collection of freightage.
Aimee Nono Calo [Transportation Law] Page 33
ARTICLE 705. ARTICLE 707.

In case of the death of a passenger during the voyage, the Four true copies of the original bill of lading shall be made,
captain shall be authorized, with regard to the body, to and all of them shall be signed by the captain and the
take the steps required by the circumstances, and shall shipper. Of these, the shipper shall keep one and send
carefully take care of the papers and goods which may be another to the consignee; the captain shall take two, one
on board belonging to the passenger, observing the for himself and another for the ship agent.
provisions of case No. 10 of Article 612 with regard to
members of the crew. There may also be drawn up as many copies of the bill of
lading as may be considered necessary by the person
PART 6 interested; but when they are issued to order or to bearer,
they shall be stated in all the copies, be they the first four
BILLS OF LADING or the subsequent ones, the destination of each one, stating
whether it is for the agent, for the captain, for the shipper,
ARTICLE 706. or for the consignee. If the copy sent to the latter should
have a duplicate, this circumstance and the fact that it is
The captain of the vessel and the shipper shall have the
not valid except in default of the first one must be stated
obligation of drawing up
therein.
the bill of lading in which shall be stated:
ARTICLE 708.
1. The name, registry, and tonnage of the vessel.
Bills of lading issued to bearer and sent to the consignee
2. The name of the captain and his domicile. shall be transferable by actual delivery of the instrument;
and those issued to order, by virtue of an indorsement.
3. The port of loading and that of unloading.
In either case, the person to whom the bill of lading is
4. The name of the shipper. transferred shall acquire all the rights and actions of the
transferor or indorser with regard to the merchandise
5. The name of the consignee, if the bill of lading is issued mentioned in the same.
in the name of a specified person.
ARTICLE 709.
6. The quantity, quality, number of packages and marks of
the merchandise. A bill of lading drawn up in accordance with the
provisions of this title shall be proof as between all those
7. The freightage and the primage stipulated. interested in the cargo and between the latter and the
insurers, proof to the contrary being reserved for the latter.
The bill of lading may be issued to bearer, to order, or in
the name of a specified person, and must be signed within ARTICLE 710.
twenty-four hours after the cargo has been received on
board, the shipper being entitled to demand the unloading If the bills of lading do not agree, and no change or erasure
at the expense of the captain should the latter not sign it, can be observed in any of them, those possessed by the
and, in every case, the losses and damages suffered shipper or consignee signed by the captain shall be proof
thereby. against the captain or ship agent in favor of the consignee
or shipper; and those possessed by the captain or ship
agent signed by the shipper shall be proof against the
shipper or consignee in favor of the captain or ship agent.

Aimee Nono Calo [Transportation Law] Page 34


ARTICLE 711. ARTICLE 715.

The legitimate holder of a bill of lading who fails to Bills of lading will give rise to a most summary action or to
present it to the captain of the vessel before the unloading judicial, compulsion ("accion sumarisima o de apremios"),
obliging the latter thereby to unload it and place it in according to the case, for the delivery of the cargo and the
deposit, shall be responsible for the expenses of
warehousing and other expenses arising therefrom. payment of the freightage and the expenses thereby
incurred.
ARTICLE 712.
ARTICLE 716.
The captain may not by himself change the destination of
the merchandise. In admitting this change at the instance If several persons should present bills of lading issued to
of the shipper, he must first take up the bill of lading bearer or to order, indorsed in their favor, demanding the
which he may have issued, under pain of being liable for same merchandise, the captain shall prefer, in making
the cargo to the legitimate holder of the same. delivery the person who presents the copy first issued,
except when the latter one was issued on proof of the loss
ARTICLE 713.
of the first, and both are presented by different persons.
If before the delivery of the cargo a new bill of lading
should be demanded of the captain, on the allegation that In such case, as well as when only second subsequent
the failure to present the previous ones is due to their loss copies, issued without this proof, are presented, the
or to any other just cause, he shall be obliged to issue it, captain shall apply to the judge or court, so that he may
provided that security for the value of the cargo is given to order the deposit of the merchandise and their delivery,
his satisfaction, but without changing the consignment, through him, to the proper person.
and stating therein the circumstances prescribed in the last
paragraph of Article 707, under penalty, should he not so ARTICLE 717.
state, of being held liable for said cargo if improperly
The delivery of the bill of lading shall effect the
delivered through his fault.
cancellation of all the provisional receipts of prior date
ARTICLE 714. given by the captain or his subordinates for partial
deliveries of the cargo which may have been made.
If before the vessel puts to sea the captain should die or
should cease to hold his position through any cause, the ARTICLE 718.
shippers shall have the right to demand of the new captain
After the cargo has been delivered the bill of lading which
the ratification of the first bills of lading, and the latter
the captain signed, or at least the copy by reason of which
must do so, provided that all the copies previously issued
the delivery is made, shall be returned to him, with the
be presented or returned to him, and it should appear from
receipt for the merchandise mentioned therein.
all examination of the cargo that they are correct.
The delay on the part of the consignee shall make him
The expenses arising from the examination of the cargo
liable for the damages which such delay may cause the
shall be defrayed by the ship agent, without prejudice to
captain.
the right of action of the latter against the first captain if he
ceased to be such through his own fault. Should said
examination not be made, it shall be understood that the
new captain accepts the cargo as it appears from the bills
of lading issued.

Aimee Nono Calo [Transportation Law] Page 35


SECTION TWO therein. With respect to those executed in accordance with
No. 3 the acknowledgment of the signature shall be
LOANS ON BOTTOMRY AND RESPONDENTIA required.

ARTICLE 719. Contracts which are not reduced to writing shall not give
rise to judicial action.
A loan in which under any condition whatever, the
repayment of the sum loaned and of the premium ARTICLE 721.
stipulated depends upon the safe arrival in port of the
goods on which it is made, or of the price they may receive In a contract on bottomry or respondentia the following
in case of accident, shall be considered a loan on bottomry must be stated:
or respondentia.
1. The kind, name, and registry of the vessel.
ARTICLE 720.
2. The name, surname, and domicile of the captain.
Loans on bottomry or respondentia may be executed:
3. The names, surnames, and domiciles of the person
1. By means of a public instrument. giving and the person receiving the loan.

2. By means of a policy signed by the contracting parties 4. The amount of the loan and the premium stipulated.
and the broker taking part therein.
5. The time for repayment.
3. By means of a private instrument.
6. The goods pledged to secure repayment.
Under whichever of these forms the contract is executed,
it shall be entered in the certificate of the registry of the 7. The voyage during which the risk is run.
vessel and shall be recorded in the registry of vessels,
without which requisites the credits of this kind shall not ARTICLE 722.
have, with regard to other credits, the preference which,
The contract may be made to order, in which case they
according to their nature, they should have, although the
shall be transferable by indorsement, and the indorsee shall
obligation shall be valid between the contracting parties.
acquire all the rights and shall incur all the risks
The contracts made during a voyage shall be governed by corresponding to the indorser.
the provisions of Articles 583 and 611, and shall be
ARTICLE 723.
effective with regard to third persons from the date of
their execution, if they should be recorded in the registry Loans may be made in goods and in merchandise, fixing
of vessels of the port of registry of the vessel before the their value in order to determine the principal of the loan.
lapse of eight days following its arrival. If said eight days
should elapse without the record having been made in the ARTICLE 724.

corresponding registry, the contracts made during the The loans may be constituted jointly or separately:
voyage of a vessel shall produce no effect with regard to
third persons, except from the day and date of their 1. On the hull of the vessel.
inscription.
2. On the rigging.
In order that the policy of the contracts executed in
accordance with No. 2 may have binding force, they must 3. On the equipment, provisions, and fuel.
conform to the registry of the broker who took part

Aimee Nono Calo [Transportation Law] Page 36


4. On the engine, if the vessel is a steamer. If one or more of the owners should be requested to
furnish the amount necessary to repair or provision the
5. On the merchandise loaded. vessel, and they should not do so within twenty-four
hours, the interest which the parties in default may have in
If the loan in constituted on the hull of the vessel, the the vessel shall be liable for the loan in the proper
rigging, equipment and other goods, provisions, fuel, proportion.
steam engines, and the freightage earned during the voyage
on which the loan is made shall also be considered as Outside of the residence of the owners the captain may
included in the liability for the loan. contract loans in accordance with the provisions of
Articles 583 and 611.
If the loan is made subject on the cargo, all that which
constitutes the same shall be to the repayment; and if on a ARTICLE 729.
particular object of the vessel or of the cargo, only the
object concretely and specifically mentioned shall be liable. Should the goods on which money is taken not be
subjected to risk, the contract shall be considered a simple
ARTICLE 725. loan, with the obligation on the part of the borrower to
return the principal and interest at the legal rate, if that
No loans on bottomry may be made on the salaries of the agreed upon should not be lower.
crew or on the profits expected.
ARTICLE 730.
ARTICLE 726.
Loans made during the voyage shall have preference over
If the lender should prove that he loaned an amount larger those made before the clearing of the vessel, and they shall
than the value of the object liable for the bottomry loan, be graduated in the inverse order of their dates.
on account of fraudulent measures employed by the
borrower, the loan shall be valid only for the amount at The loans for the last voyage shall have preference over
which said object is appraised by experts. prior ones.

The surplus principal shall be returned with legal interests Should several loans have been made at the same port of
for the entire time required for repayment. arrival under stress and for the same purpose, all of them
shall be paid pro rata.
ARTICLE 727.
ARTICLE 731.
If the full amount of the loan contracted in order to load
the vessel should not be used for the cargo, the balance The actions pertaining to the lender shall be extinguished
shall be returned before clearing. by the absolute loss of the goods on which the loan was
made, if it arose from an accident of the sea at the time
The same procedure shall be observed with regard to the and during the voyage designated in the contract, and it is
goods taken as loan, if they were not loaded. proven that the cargo was on board; but this shall not take
ARTICLE 728. place if the loss was caused by the inherent defect of the
thing, or through the fault or malice, of the borrower, or
The loan which the captain takes at the point of residence
barratry on the part of the captain, or if it was caused by
of the owners of the vessel shall only affect that part
damages suffered by the vessel as a consequence of being
thereof which belongs to the captain, if the other owners
engaged in contraband, or if it arose from having loaded
or their agents should not have given their express
the merchandise on a vessel different from that designated
authorization therefor or should not have taken part in the
transaction.

Aimee Nono Calo [Transportation Law] Page 37


in the contract, unless this change should have been made to the legitimate interest of each one, taking into
by reason of force majeure. consideration, for this purpose only, the principal with
respect to the loan, and without prejudice to the right of
Proof of the loss as well as of the existence in the vessel of preference of other creditors in accordance with Article
the goods declared to the lender as the object of the loan is 580.
incumbent upon him who received the loan.
ARTICLE 736.
ARTICLE 732.
If there should be delay in repayment of the principal and
Lenders on bottomry or respondentia shall suffer, in premiums of the loan, only the former shall bear of legal
proportion to their respective interest, the general average interest.
which may take place in the goods on which the loan is
made. 3) Warsaw Convention

In particular averages, in the absence of an express CHAPTER I


agreement between the contracting parties, the lender on
bottomry or respondentia shall also contribute in SCOPE - DEFINITIONS
proportion to his respective interest, should it not belong
to the kind of risks excepted in the foregoing article. Article 1

ARTICLE 733. 1. This Convention applies to all international carriage of


persons, luggage or goods performed by aircraft for
Should the period during which the lender shall run the reward. It applies equally to gratuitous carriage by aircraft
risk not have been stated in the contract, it shall last, with performed by an air transport undertaking.
regard to the vessel, engines, rigging, and equipment, from
the moment said vessel puts to sea until she drops anchor 2. For the purposes of this Convention the expression
in the port of destination; and with regard to the "international carriage" means any carriage in which,
merchandise, from the time they are loaded at the shore or according to the contract made by the parties, the place of
wharf of the port of shipment until they are unloaded in departure and the place of destination, whether or not
the port of consignment. there be a break in the carriage or a transhipment, are
situated either within the territories of two High
ARTICLE 734. Contracting Parties, or within the territory of a single High
Contracting Party, if there is an agreed stopping place
In case of shipwreck, the amount liable for the payment of within a territory subject to the sovereignty, suzerainty,
the loan shall be reduced to the proceeds of the goods mandate or authority of another Power, even though that
saved, after deducting the costs of the salvage. Power is not a party to this Convention. A carriage without
such an agreed stopping place between territories subject
If the loan should be on the vessel or any of its parts, the to the sovereignty, suzerainty, mandate or authority of the
freightage earned during the voyage for which said loan same High Contracting Party is not deemed to be
was contracted shall also be liable for its payment, as far as international for the purposes of this Convention.
it may reach.
3. A carriage to be performed by several successive air
ARTICLE 735. carriers is deemed, for the purposes of this Convention, to
be one undivided carriage, if it has been regarded by the
If the same vessel or cargo should be the object of a loan parties as a single operation, whether it had been agreed
on bottomry or respondentia and marine insurance, the upon under the form of a single contract or of a series of
value of what may be saved in case of shipwreck shall be contracts, and it does not lose its international character
divided between the lender and the insurer, in proportion
Aimee Nono Calo [Transportation Law] Page 38
merely because one contract or a series of contracts is to Section II - Luggage Ticket
be performed entirely within a territory subject to the
sovereignty, suzerainty, mandate or authority of the same Article 4
High Contracting Party.
1. For the carriage of luggage, other than small personal
Article 2 objects of which the passenger takes charge himself, the
carrier must deliver a luggage ticket.
1. This Convention applies to carriage performed by the
State or by legally constituted public bodies provided it 2. The luggage ticket shall be made out in duplicate, one
falls within the conditions laid down in Article 1. part for the passenger and the other part for the carrier.

2. This Convention does not apply to carriage performed 3. The luggage ticket shall contain the following
under the terms of any international postal Convention. particulars:

CHAPTER II (a) the place and date of issue;

DOCUMENTS OF CARRIAGE (b) the place of departure and of destination;

Section I - Passenger Ticket (c) the name and address of the carrier or carriers;

Article 3 (d) the number of the passenger ticket;

1. For the carriage of passengers the carrier must deliver (e) a statement that delivery of the luggage will be made
a passenger ticket which shall contain the following to the bearer of the luggage ticket;
particulars:
(f) the number and weight of the packages;
(a) the place and date of issue;
(g) the amount of the value declared in accordance with
(b) the place of departure and of destination; Article 22(2);

(c) the agreed stopping places, provided that the carrier (h) a statement that the carriage is subject to the rules
may reserve the right to alter the stopping places in case of relating to liability established by this Convention.
necessity, and that if he exercises that right, the alteration
shall not have the effect of depriving the carriage of its 4. The absence, irregularity or loss of the luggage ticket
international character; does not affect the existence or the validity of the contract
of carriage, which shall none the less be subject to the rules
(d) the name and address of the carrier or carriers; of this Convention. Nevertheless, if the carrier accepts
luggage without a luggage ticket having been delivered, or
(e) a statement that the carriage is subject to the rules if the luggage ticket does not contain the particulars set out
relating to liability established by this Convention. at (d), (f) and (h) above, the carrier shall not be entitled to
avail himself of those provisions of the Convention which
2. The absence, irregularity or loss of the passenger ticket
exclude or limit his liability.
does not affect the existence or the validity of the contract
of carriage, which shall none the less be subject to the rules
of this Convention. Nevertheless, if the carrier accepts a
passenger without a passenger ticket having been delivered
he shall not be entitled to avail himself of those provisions
of this Convention which exclude or limit his liability.

Aimee Nono Calo [Transportation Law] Page 39


Section III - Air Consignment Note (a) the place and date of its execution;

Article 5 (b) the place of departure and of destination;

1. Every carrier of goods has the right to require the (c) the agreed stopping places, provided that the carrier
consignor to make out and hand over to him a document may reserve the right to alter the stopping places in case of
called an "air consignment note"; every consignor has the necessity, and that if he exercises that right the alteration
right to require the carrier to accept this document. shall not have the effect of depriving the carriage of its
international character;
2. The absence, irregularity or loss of this document does
not affect the existence or the validity of the contract of (d) the name and address of the consignor;
carriage which shall, subject to the provisions of Article 9,
be none the less governed by the rules of this Convention. (e) the name and address of the first carrier;

Article 6 (f) the name and address of the consignee, if the case so
requires;
1. The air consignment note shall be made out by the
consignor in three original parts and be handed over with (g) the nature of the goods;
the goods.
(h) the number of the packages, the method of packing
2. The first part shall be marked "for the carrier," and shall and the particular marks or numbers upon them;
be signed by the consignor. The second part shall be
marked "for the consignee"; it shall be signed by the (i) the weight, the quantity and the volume or dimensions
consignor and by the carrier and shall accompany the of the goods;
goods. The third part shall be signed by the carrier and
(j) the apparent condition of the goods and of the packing;
handed by him to the consignor after the goods have been
accepted. (k) the freight, if it has been agreed upon, the date and
place of payment, and the person who is to pay it;
3. The carrier shall sign on acceptance of the goods.
(l) if the goods are sent for payment on delivery, the price
4. The signature of the carrier may be stamped; that of the of the goods, and, if the case so requires, the amount of
consignor may be printed or stamped. the expenses incurred;

5. If, at the request of the consignor, the carrier makes out (m) the amount of the value declared in accordance with
the air consignment note, he shall be deemed, subject to Article 22 (2);
proof to the contrary, to have done so on behalf of the
consignor. (n) the number of parts of the air consignment note;

Article 7 (o) the documents handed to the carrier to accompany the


air consignment note;
The carrier of goods has the right to require the consignor
to make out separate consignment notes when there is (p) the time fixed for the completion of the carriage and a
more than one package. brief note of the route to be followed, if these matters
have been agreed upon;
Article 8
(q) a statement that the carriage is subject to the rules
The air consignment note shall contain the following relating to liability established by this Convention.
particulars:

Aimee Nono Calo [Transportation Law] Page 40


Article 9 departure. He must not exercise this right of disposition in
such a way as to prejudice the carrier or other consignors
If the carrier accepts goods without an air consignment and he must repay any expenses occasioned by the exercise
note having been made out, or if the air consignment note of this right.
does not contain all the particulars set out in Article 8(a) to
(i) inclusive and (q), the carrier shall not be entitled to avail 2. If it is impossible to carry out the orders of the
himself of the provisions of this Convention which consignor the carrier must so inform him forthwith.
exclude or limit his liability.
3. If the carrier obeys the orders of the consignor for the
Article 10 disposition of the goods without requiring the production
of the part of the air consignment note delivered to the
1. The consignor is responsible for the correctness of the
latter, he will be liable, without prejudice to his right of
particulars and statements relating to the goods which he
recovery from the consignor, for any damage which may
inserts in the air consignment note.
be caused thereby to any person who is lawfully in
2. The consignor will be liable for all damage suffered by possession of that part of the air consignment note.
the carrier or any other person by reason of the
irregularity, incorrectness or incompleteness of the said 4. The right conferred on the consignor ceases at the
particulars and statements. moment when that of the consignee begins in accordance
with Article 13. Nevertheless, if the consignee declines to
Article 11 accept the consignment note or the goods, or if he cannot
be communicated with, the consignor resumes his right of
1. The air consignment note is prima facie evidence of the disposition.
conclusion of the contract, of the receipt of the goods and
of the conditions of carriage. Article 13

2. The statements in the air consignment note relating to 1. Except in the circumstances set out in the preceding
the weight, dimensions and packing of the goods, as well Article, the consignee is entitled, on arrival of the goods at
as those relating to the number of packages, are prima the place of destination, to require the carrier to hand over
facie evidence of the facts stated; those relating to the to him the air consignment note and to deliver the goods
quantity, volume and condition of the goods do not to him, on payment of the charges due and on complying
constitute evidence against the carrier except so far as they with the conditions of carriage set out in the air
both have been, and are stated in the air consignment note consignment note.
to have been, checked by him in the presence of the
consignor, or relate to the apparent condition of the 2. Unless it is otherwise agreed, it is the duty of the carrier
goods. to give notice to the consignee as soon as the goods arrive.

Article 12 3. If the carrier admits the loss of the goods, or if the


goods have not arrived at the expiration of seven days after
1. Subject to his liability to carry out all his obligations the date on which they ought to have arrived, the
under the contract of carriage, the consignor has the right consignee is entitled to put into force against the carrier
to dispose of the goods by withdrawing them at the the rights which flow from the contract of carriage.
aerodrome of departure or destination, or by stopping
them in the course of the journey on any landing, or by Article 14
calling for them to be delivered at the place of destination
The consignor and the consignee can respectively enforce
or in the course of the journey to a person other than the
all the rights given them by Articles 12 and 13, each in his
consignee named in the air consignment note, or by
own name, whether he is acting in his own interest or in
requiring them to be returned to the aerodrome of

Aimee Nono Calo [Transportation Law] Page 41


the interest of another, provided that he carries out the 2. The carriage by air within the meaning of the preceding
obligations imposed by the contract. paragraph comprises the period during which the luggage
or goods are in charge of the carrier, whether in an
Article 15 aerodrome or on board an aircraft, or, in the case of a
landing outside an aerodrome, in any place whatsoever.
1. Articles 12, 13 and 14 do not affect either the relations
of the consignor or the consignee with each other or the 3. The period of the carriage by air does not extend to any
mutual relations of third parties whose rights are derived carriage by land, by sea or by river performed outside an
either from the consignor or from the consignee. aerodrome. If, however, such a carriage takes place in the
performance of a contract for carriage by air, for the
2. The provisions of Articles 12, 13 and 14 can only be
purpose of loading, delivery or transshipment, any damage
varied by express provision in the air consignment note.
is presumed, subject to proof to the contrary, to have been
Article 16 the result of an event which took place during the carriage
by air.
1. The consignor must furnish such information and attach
Article 19
to the air consignment note such documents as are
necessary to meet the formalities of customs, octroi or The carrier is liable for damage occasioned by delay in the
police before the goods can be delivered to the consignee. carriage by air of passengers, luggage or goods.
The consignor is liable to the carrier for any damage
occasioned by the absence, insufficiency or irregularity of Article 20
any such information or documents, unless the damage is
due to the fault of the carrier or his agents. 1. The carrier is not liable if he proves that he and his
agents have taken all necessary measures to avoid the
2. The carrier is under no obligation to enquire into the damage or that it was impossible for him or them to take
correctness or sufficiency of such information or such measures.
documents.
2. In the carriage of goods and luggage the carrier is not
CHAPTER III liable if he proves that the damage was occasioned by
negligent pilotage or negligence in the handling of the
LIABILITY OF THE CARRIER aircraft or in navigation and that, in all other respects, he
and his agents have taken all necessary measures to avoid
Article 17 the damage.
The carrier is liable for damage sustained in the event of Article 21
the death or wounding of a passenger or any other bodily
injury suffered by a passenger, if the accident which caused If the carrier proves that the damage was caused by or
the damage so sustained took place on board the aircraft contributed to by the negligence of the injured person the
or in the course of any of the operations of embarking or Court may, in accordance with the provisions of its own
disembarking. law, exonerate the carrier wholly or partly from his liability.

Article 18 Article 22

1. The carrier is liable for damage sustained in the event of 1. In the carriage of passengers the liability of the carrier
the destruction or loss of, or of damage to, any registered for each passenger is limited to the sum of 125,000 francs.
luggage or any goods, if the occurrence which caused the Where, in accordance with the law of the Court seised of
damage so sustained took place during the carriage by air. the case, damages may be awarded in the form of
periodical payments, the equivalent capital value of the said
payments shall not exceed 125,000 francs. Nevertheless, by
Aimee Nono Calo [Transportation Law] Page 42
special contract, the carrier and the passenger may agree to of the Court seised of the case, is considered to be
a higher limit of liability. equivalent to wilful misconduct.

2. In the carriage of registered luggage and of goods, the 2. Similarly the carrier shall not be entitled to avail himself
liability of the carrier is limited to a sum of 250 francs per of the said provisions, if the damage is caused as aforesaid
kilogram, unless the consignor has made, at the time when by any agent of the carrier acting within the scope of his
the package was handed over to the carrier, a special employment.
declaration of the value at delivery and has paid a
Article 26
supplementary sum if the case so requires. In that case the
carrier will be liable to pay a sum not exceeding the
1. Receipt by the person entitled to delivery of luggage or
declared sum, unless he proves that that sum is greater
goods without complaint is prima facie evidence that the
than the actual value to the consignor at delivery.
same have been delivered in good condition and in
accordance with the document of carriage.
3. As regards objects of which the passenger takes charge
himself the liability of the carrier is limited to 5,000 francs
2. In the case of damage, the person entitled to delivery
per passenger.
must complain to the carrier forthwith after the discovery
of the damage, and, at the latest, within three days from
4. The sums mentioned above shall be deemed to refer to
the date of receipt in the case of luggage and seven days
the French franc consisting of 65 ½ milligrams gold of
from the date of receipt in the case of goods. In the case of
millesimal fineness 900. These sums may be converted into
delay the complaint must be made at the latest within
any national currency in round figures.
fourteen days from the date on which the luggage or goods
Article 23 have been placed at his disposal.

Any provision tending to relieve the carrier of liability or to 3. Every complaint must be made in writing upon the
fix a lower limit than that which is laid down in this document of carriage or by separate notice in writing
Convention shall be null and void, but the nullity of any despatched within the times aforesaid.
such provision does not involve the nullity of the whole
contract, which shall remain subject to the provisions of 4. Failing complaint within the times aforesaid, no action
this Convention. shall lie against the carrier, save in the case of fraud on his
part.
Article 24
Article 27
1. In the cases covered by Articles 18 and 19 any action for
In the case of the death of the person liable, an action for
damages, however founded, can only be brought subject to
damages lies in accordance with the terms of this
the conditions and limits set out in this Convention.
Convention against those legally representing his estate.
2. In the cases covered by Article 17 the provisions of the
Article 28
preceding paragraph also apply, without prejudice to the
questions as to who are the persons who have the right to
1. An action for damages must be brought, at the option of
bring suit and what are their respective rights.
the plaintiff, in the territory of one of the High
Contracting Parties, either before the Court having
Article 25
jurisdiction where the carrier is ordinarily resident, or has
1. The carrier shall not be entitled to avail himself of the his principal place of business, or has an establishment by
provisions of this Convention which exclude or limit his which the contract has been made or before the Court
liability, if the damage is caused by his wilful misconduct or having jurisdiction at the place of destination.
by such default on his part as, in accordance with the law

Aimee Nono Calo [Transportation Law] Page 43


2. Questions of procedure shall be governed by the law of CHAPTER IV
the Court seised of the case.
PROVISIONS RELATING TO COMBINED
Article 29 CARRIAGE

1. The right to damages shall be extinguished if an action is Article 31


not brought within two years, reckoned from the date of
arrival at the destination, or from the date on which the 1. In the case of combined carriage performed partly by air
aircraft ought to have arrived, or from the date on which and partly by any other mode of carriage, the provisions of
the carriage stopped. this Convention apply only to the carriage by air, provided
that the carriage by air falls within the terms of Article 1.
2. The method of calculating the period of limitation shall
be determined by the law of the Court seised of the case. 2. Nothing in this Convention shall prevent the parties in
the case of combined carriage from inserting in the
Article 30 document of air carriage conditions relating to other
modes of carriage, provided that the provisions of this
1. In the case of carriage to be performed by various Convention are observed as regards the carriage by air.
successive carriers and falling within the definition set out
in the third paragraph of Article 1, each carrier who CHAPTER V
accepts passengers, luggage or goods is subjected to the
rules set out in this Convention, and is deemed to be one GENERAL AND FINAL PROVISIONS
of the contracting parties to the contract of carriage in so
far as the contract deals with that part of the carriage Article 32
which is performed under his supervision.
Any clause contained in the contract and all special
agreements entered into before the damage occurred by
2. In the case of carriage of this nature, the passenger or
which the parties purport to infringe the rules laid down by
his representative can take action only against the carrier
this Convention, whether by deciding the law to be
who performed the carriage during which the accident or
applied, or by altering the rules as to jurisdiction, shall be
the delay occurred, save in the case where, by express
null and void. Nevertheless for the carriage of goods
agreement, the first carrier has assumed liability for the
arbitration clauses are allowed, subject to this Convention,
whole journey.
if the arbitration is to take place within one of the
3. As regards luggage or goods, the passenger or consignor jurisdictions referred to in the first paragraph of Article 28.
will have a right of action against the first carrier, and the
Article 33
passenger or consignee who is entitled to delivery will have
a right of action against the last carrier, and further, each Nothing contained in this Convention shall prevent the
may take action against the carrier who performed the carrier either from refusing to enter into any contract of
carriage during which the destruction, loss, damage or carriage, or from making regulations which do not conflict
delay took place. These carriers will be jointly and severally with the provisions of this Convention.
liable to the passenger or to the consignor or consignee.
Article 34

This Convention does not apply to international carriage


by air performed by way of experimental trial by air
navigation undertakings with the view to the establishment
of a regular line of air navigation, nor does it apply to
carriage performed in extraordinary circumstances outside
the normal scope of an air carrier's business.

Aimee Nono Calo [Transportation Law] Page 44


Article 35 3. The accession shall take effect as from the ninetieth day
after the notification made to the Government of the
The expression "days" when used in this Convention Republic of Poland.
means current days not working days.
Article 39
Article 36
1. Any one of the High Contracting Parties may denounce
The Convention is drawn up in French in a single copy
this Convention by a notification addressed to the
which shall remain deposited in the archives of the
Government of the Republic of Poland, which will at once
Ministry for Foreign Affairs of Poland and of which one
inform the Government of each of the High Contracting
duly certified copy shall be sent by the Polish Government
Parties.
to the Government of each of the High Contracting
Parties. 2. Denunciation shall take effect six months after the
notification of denunciation, and shall operate only as
Article 37 regards the Party who shall have proceeded to
denunciation.
1. This Convention shall be ratified. The instruments of
ratification shall be deposited in the archives of the Article 40
Ministry for Foreign Affairs of Poland, which will notify
the deposit to the Government of each of the High 1. Any High Contracting Party may, at the time of
Contracting Parties. signature or of deposit of ratification or of accession
declare that the acceptance which he gives to this
2. As soon as this Convention shall have been ratified by Convention does not apply to all or any of his colonies,
five of the High Contracting Parties it shall come into protectorates, territories under mandate, or any other
force as between them on the ninetieth day after the territory subject to his sovereignty or his authority, or any
deposit of the fifth ratification. Thereafter it shall come territory under his suzerainty.
into force between the High Contracting Parties who shall
have ratified and the High Contracting Party who deposits 2. Accordingly any High Contracting Party may
his instrument of ratification on the ninetieth day after the subsequently accede separately in the name of all or any of
deposit. his colonies, protectorates, territories under mandate or
any other territory subject to his sovereignty or to his
3. It shall be the duty of the Government of the Republic authority or any territory under his suzerainty which has
of Poland to notify to the Government of each of the been thus excluded by his original declaration.
High Contracting Parties the date on which this
Convention comes into force as well as the date of the 3. Any High Contracting Party may denounce this
deposit of each ratification. Convention, in accordance with its provisions, separately
or for all or any of his colonies, protectorates, territories
Article 38 under mandate or any other territory subject to his
sovereignty or to his authority, or any other territory under
1. This Convention shall, after it has come into force,
his suzerainty.
remain open for accession by any State.
Article 41
2. The accession shall be effected by a notification
addressed to the Government of the Republic of Poland, Any High Contracting Party shall be entitled not earlier
which will inform the Government of each of the High than two years after the coming into force of this
Contracting Parties thereof. Convention to call for the assembling of a new
international Conference in order to consider any
improvements which may be made in this Convention. To

Aimee Nono Calo [Transportation Law] Page 45


this end he will communicate with the Government of the rules and the practices of the great shipping countries of
French Republic which will take the necessary measures to the world;
make preparations for such Conference.
WHEREAS, shipping companies, shippers, and marine
This Convention done at Warsaw on the 12th October, insurance companies, and various chambers of commerce,
1929, shall remain open for signature until the 31st which are directly affected by such legislation, have
January, 1930. expressed their desire that said Congressional Act be made
applicable and extended to the Philippines; therefore,
"ADDITIONAL PROTOCOL
Be it enacted by the National Assembly of the Philippines:
(With reference to Article 2)

The High Contracting Parties reserve to themselves the Section 1.


right to declare at the time of ratification or of accession
That the provisions of Public Act Numbered Five hundred
that the first paragraph of Article 2 of this Convention
and twenty-one of the Seventy-fourth Congress of the
shall not apply to international carriage by air performed
United States, approved on April sixteenth, nineteen
directly by the State, its colonies, protectorates or
hundred and thirty-six, be accepted, as it is hereby
mandated territories or by any other territory under its
accepted to be made applicable to all contracts for the
sovereignty, suzerainty or authority."
carriage of goods by sea to and from Philippine ports in
4) Carriage of Goods by Sea Act foreign trade: Provided, That nothing in the Act shall be
(Commonwealth Act No. 65) construed as repealing any existing provision of the Code
of Commerce which is now in force, or as limiting its
IN ACT TO DECLARE THAT PUBLIC ACT application.
NUMBERED FIVE HUNDRED AND TWENTY-
ONE, KNOWN AS "CARRIAGE OF GOODS BY Section 2.
SEA ACT ," ENACTED BY THE SEVENTY-
This Act shall take effect upon its approval. Approved:
FOURTH CONGRESS OF THE UNITED
October 22, 1936.
STATES, BE ACCEPTED, AS IT IS HEREBY
ACCEPTED BY THE NATIONAL ASSEMBLY
An Act Relating to the Carriage of Goods by Sea.
WHEREAS, the Seventy-fourth Congress of the United
Be it enacted by the Senate and House of Representatives
States enacted Public Act Numbered Five hundred and
of the United States of America in Congress assembled,
twenty-one, entitled: "Carriage of Goods by Sea Act";
That every bill of landing or similar document of title
which is evidence of a contract for the carriage of goods by
WHEREAS, the primordial purpose of the said Acts is to
sea to or from ports of the United States, in foreign trade,
bring about uniformity in ocean bills of lading and to give
shall have effect subject to the provisions of the Act.
effect to the Brussels Treaty, signed by the United States
with other powers;
TITLE I
WHEREAS, the Government of the United States has left
Section 1.
it to the Philippine Government to decide whether or not
the said Act shall apply to carriage of goods by sea in When used in this Act —
foreign trade to and from Philippine ports;
(a) The term "carrier" includes the owner or the charterer
WHEREAS, the said Act of Congress contains advanced who enters into a contract of carriage with a shipper.
legislation, which is in consonance with modern maritime

Aimee Nono Calo [Transportation Law] Page 46


(b) The term "contract of carriage" applies only to (2) The carrier shall properly and carefully load, handle,
contracts of carriage covered by a bill of lading or any stow , carry, keep, care for, and discharge the goods
similar document of title, insofar as such document relates carried.
to the carriage of goods by sea, including any bill of lading
or any similar document as aforesaid issued under or (3) After receiving the goods into his charge the carrier, or
pursuant to a charter party from the moment at which the master or agent of the carrier, shall, on demand of the
such bill of lading or similar document of title regulates the shipper, issue to the shipper a bill of lading showing
relations between a carrier and a holder of the same. among other things —

(c) The term "goods" includes goods, wares, merchandise, (a) The leading marks necessary for identification of
and articles of every kind whatsoever, except live animals the goods as the same are furnished in writing by the
and cargo which by the contract of carriage is stated as shipper before the loading of such goods starts, provided
being carried on deck and is so carried. such marks are stamped or otherwise shown clearly upon
the goods if uncovered, or on the cases or coverings in
(d) The term "ship" means any vessel used for the carriage which such goods are contained, in such a manner as
of goods by sea. should ordinarily remain legible until the end of the
voyage.
(e) The term "carriage of goods" covers the period from
the time when the goods are loaded on to the time when (b) Either the number of packages or pieces, or the
they are discharged from the ship. quantity or weight, as the case may be, as furnished in
writing by the shipper.
RISKS
(c) The apparent order and condition of the goods:
Section 2. Provided, That no carrier, master, or agent of the carrier,
shall be bound to state or show in the bill of lading any
Subject to the provisions of section 6, under every contract marks, number, quantity, or weight which he has
of carriage of goods by sea, the carrier in relation to the reasonable ground for suspecting not accurately to
loading handling, stowage, carriage, custody, care, and represent the goods actually received, or which he has had
discharge of such goods, shall be subject to the no reasonable means of checking.
responsibilities and liabilities and entitled to the rights and
immunities hereinafter set forth. (4) Such a bill of lading shall be prima facie evidence of the
receipt by the carrier of the goods as therein described in
RESPONSIBILITIES AND LIABILITIES accordance with paragraphs (3) (a), (b), and (c) of this
section: Provided, That nothing in this Act shall be
Section 3.
construed as repealing or limiting the application of any
(1) The carrier shall be bound, before and at the beginning part of the Act, as amended, entitled "An Act relating to
of the voyage, to exercise due diligence to — bills of lading in interstate and foreign commerce,"
approved August 29, 1916 (U. S. C. title 49, secs. 81-124),
(a) Make the ship seaworthy; commonly known as the "Pomerene Bills of Lading Act."

(b) Properly man, equip, and supply the ship; (5) The shipper shall be deemed to have guaranteed to the
carrier the accuracy at the time of shipment of the marks,
(c) Make the holds, refrigerating and cooling number, quantity, and weight, as furnished by him; and the
chambers, and all other parts of the ship in which goods shipper shall indemnify the carrier against all loss damages,
are carried, fit and safe for their reception carriage and and expenses arising or resulting from inaccuracies in such
preservation. particulars. The right of the carrier to such indemnity shall
in no way limit his responsibility and liability under the

Aimee Nono Calo [Transportation Law] Page 47


contract of carriage or to any person other than the have been shipped and the date or dates of shipment, and
shipper. when so noted the same shall for the purpose of this
section be deemed to constitute a "shipped" bill of lading.
(6) Unless notice of loss or damage and the general nature
of such loss or damage be given in writing to the carrier or (8) Any clause, covenant, or agreement in a contract of
his agent at the port of discharge before or at the time of carriage relieving the carrier or the ship from liability for
the removal of the goods into the custody of the person loss or damage to or in connection with the goods, arising
entitled to delivery thereof under the contract of carriage, from negligence, fault, or failure in the duties and
such removal shall be prima facie evidence of the delivery obligations provided in this section, or lessening such
by the carrier of the goods as described in the bill of liability otherwise than as provided in this Act, shall be null
lading. If the loss or damage is not apparent, the notice and void and of no effect. A benefit of insurance in favor
must be given within three days of the delivery. of the carrier, or similar clause, shall be deemed to be a
clause relieving the carrier from liability.
Said notice of loss or damage maybe endorsed upon the
receipt for the goods given by the person taking delivery RIGHTS AND IMMUNITIES
thereof.
Section 4.
The notice in writing need not be given if the state of the
goods has at the time of their receipt been the subject of (1) Neither the carrier nor the ship shall be liable for loss
joint survey or inspection. or damage arising or resulting from unseaworthiness unless
caused by want of due diligence on the part of the carrier
In any event the carrier and the ship shall be discharged to make the ship seaworthy, and to secure that the ship is
from all liability in respect of loss or damage unless suit is properly manned, equipped, and supplied, and to make to
brought within one year after delivery of the goods or the the holds, refrigerating and cool chambers, and all other
date when the goods should have been delivered: parts of the ship in which goods are carried fit and safe for
Provided, That if a notice of loss or damage, either their reception, carriage, and preservation in accordance
apparent or concealed, is not given as provided for in this with the provisions of paragraph (1) of section 3.
section, that fact shall not affect or prejudice the right of Whenever loss or damage has resulted from
the shipper to bring suit within one year after the delivery unseaworthiness, the burden of proving the exercise of due
of the goods or the date when the goods should have been diligence shall be on the carrier or other persons claiming
delivered . exemption under the section.

In the case of any actual or apprehended loss or damage (2) Neither the carrier nor the ship shall be responsible for
the carrier and the receiver shall give all reasonable loss or damage arising or resulting from —
facilities to each other for inspecting and tallying the
goods. (a) Act, neglect, or default of the master, mariner,
pilot, or the servants of the carrier in the navigation or in
(7) After the goods are loaded the bill of lading to be the management of the ship;
issued by the carrier, master, or agent of the carrier to the
shipper shall, if the shipper so demands, be a "shipped" bill (b) Fire, unless caused by the actual fault or privity
of lading Provided, That if the shipper shall have of the carrier;
previously taken up any document of title to such goods,
he shall surrender the same as against the issue of the (c) Perils, dangers, and accidents of the sea or
"shipped" bill of lading, but at the option of the carrier other navigable waters;
such document of title may be noted at the port of
(d) Act of God;
shipment by the carrier, master, or agent with name or
name the names of the ship or ships upon which the goods

Aimee Nono Calo [Transportation Law] Page 48


(e) Act of war, (4) Any deviation in saving or attempting to save life or
property at sea, or any reasonable deviation shall not be
(f) Act of public enemies; deemed to be an infringement or breach of this Act or of
the contract of carriage, and the carrier shall not be liable
(g) Arrest or restraint of princes, rulers, or people, for any loss or damage resulting therefrom: Provided,
or seizure under legal process; however, That if the deviation is for the purpose of
loading cargo or unloading cargo or passengers it shall,
(h) Quarantine restrictions;
prima facie, be regarded as unreasonable.
(i) Act or omission of the shipper or owner of the
(5) Neither the carrier nor the ship shall in any event be or
goods, his agent or representative;
become liable for any loss or damage to or in connection
(j) Strikes or lockouts or stoppage or restraint of with the transportation of goods in an amount exceeding
labor from whatever cause, whether partial or general; $500 per package lawful money of the United States, or in
Provided, That nothing herein contained shall be case of goods not shipped in packages, per customary
construed to relieve a carrier from responsibility for the freight unit, or the equivalent of that sum in other
carrier's own acts; currency, unless the nature and value of such goods have
been declared by the shipper before shipment and inserted
(k) Riots and civil commotions in the bill of lading. This declaration, if embodied in the
bill of lading, shall be prima facie evidence, but shall not be
(l) Saving or attempting to save life or property at conclusive on the carrier.
sea;
By agreement between the carrier, master, or agent of the
(m) Wastage in bulk or weight or any other loss or carrier, and the shipper another maximum amount than
damage arising from inherent defect, quality, or vice of the that mentioned in this paragraph may be fixed: Provided,
goods; That such maximum shall not be less than the figure above
named. In no event shall the carrier be liable for more than
(n) Insufficiency of packing; the amount of damage actually sustained.

(o) Insufficiency of inadequacy of marks; Neither the carrier nor the ship shall be responsible in any
event for loss or damage to or in connection with the
(p) Latent defects not discoverable by due transportation of the goods if the nature or value thereof
diligence; and has been knowingly and fraudulently misstated by the
shipper in the bill of lading.
(q) Any other cause arising without the actual fault
and privity of the carrier and without the fault or neglect of (6) Goods of an inflammable, explosive, or dangerous
the agents or servants of the carrier, but the burden of nature to the shipment whereof the carrier, master or agent
proof shall be on the person claiming the benefit of this of the carrier, has not consented with knowledge of their
exception to show that neither the actual fault or privity of nature and character, may at any time before discharge be
the carrier nor the fault or neglect of the agents or servants landed at any place or destroyed or rendered innocuous by
of the carrier contributed to the loss or damage. the carrier without compensation, and the shipper of such
goods shall be liable for all damages and expenses directly
(3) The shipper shall not be responsible for loss or damage
or indirectly arising out of or resulting from such
sustained by the carrier or the ship arising from any cause
shipment. If any such goods shipped with such knowledge
without the act, fault, or neglect of the shipper, his agents,
and consent shall become a danger to the ship or cargo,
or servants.
they may in like manner be landed at any place, or
destroyed or rendered innocuous by the carrier without

Aimee Nono Calo [Transportation Law] Page 49


liability on the part of the carrier except to general average, circumstances, terms, and conditions under which the
if any. carriage is to be performed are such as reasonably to justify
a special agreement.
SURRENDER OF RIGHTS AND IMMUNITIES
AND INCREASE OF RESPONSIBILITIES AND Section 7.
LIABILITIES
Nothing contained in this Act shall prevent a carrier or a
Section 5. shipper from entering into any agreement, stipulation,
condition, reservation, or exemption as to the
A carrier shall be at liberty to surrender in whole or in part responsibility and liability of the carrier or the ship for the
all or any of his rights and immunities or to increase any of loss or damage to or in connection with the custody and
his responsibilities and liabilities under this Act, provided care and handling of goods prior to the loading on and
such surrender or increase shall be embodied in the bill of subsequent to the discharge from the ship on which the
lading issued to the shipper. goods are carried by sea.

The provisions of this Act shall not be applicable to Section 8.


charter parties; but if bills of lading are issued in the case
of a ship under charter party, they shall comply with the The provisions of this Act shall not affect the rights and
terms of this Act. Nothing in this Act shall be held to obligations of the carrier under the provisions of the
prevent the insertion in a bill of lading of any lawful Shipping Act, 1916, or under the provisions of section
provision regarding general average. 4281 to 4289, inclusive, of the Revised Statutes of the
United States, or of any amendments thereto; or under the
SPECIAL CONDITIONS provisions of any other enactment for the time being in
force relating to the limitation of the liability of the owners
Section 6. of seagoing vessels.
Notwithstanding the provisions of the preceding sections, TITLE II
a carrier, master or agent of the carrier, and a shipper shall,
in regard to any particular goods be at liberty to enter into Section 9.
any agreement in any terms as to the responsibility and
liability of the carrier for such goods, and as to the rights Nothing contained in this Act shall be construed as
and immunities of the carrier in respect of such goods, or permitting a common carrier by water to discriminate
his obligation as to seaworthiness (so far as the stipulation between competing shippers similarly place in time and
regarding seaworthiness is not contrary to public policy), circumstances, either (a) with respect to the right to
or the care or diligence of his servants or agents in regard demand and receive bills of lading subject to the
to the loading, handling stowage, carriage, custody, care, provisions of this Act; or (b) when issuing such bills of
and discharge of the goods carried by sea: Provided, That lading, either in the surrender of any of the carrier's rights
in this case no bill of lading has been or shall be issued and and immunities or in the increase of any of the carrier's
that the terms agreed shall be embodied in a receipt which responsibilities and liabilities pursuant to section 6, title I,
shall be a nonnegotiable document and shall be marked as of this Act or (c) in any other way prohibited by the
such. Shipping Act, 1916, s amended.

Any agreement so entered into shall have full legal effect: Section 10.
Provided, That this section shall not apply to ordinary
commercial shipments made in the ordinary course of Section 25 of the Interstate Commerce Act is hereby
trade but only to other shipments where the character or amended by adding the following proviso at the end of
condition of the property to be carried or the paragraph 4 thereof: "Provided, however, That insofar as

Aimee Nono Calo [Transportation Law] Page 50


any bill of lading authorized hereunder relates to the the provisions of this Act, shall be subjected hereto as fully
carriage of goods by sea, such bill of lading shall be subject as if subject hereto as fully as if subject hereto by the
to the provisions of the Carriage of Goods by Sea Act." express provisions of this Act: Provided, further, That
every bill of lading or similar document of title which is
Section 11. evidence of a contract for the carriage of goods by sea
from ports of the United States, in foreign trade, shall
Where under the customs of any trade the weight of any contain a statement that it shall have effect subject to the
bulk cargo inserted in the bill of lading is a weight provisions of this Act.
ascertained or accepted by a third party other than the
carrier or the shipper, and the fact that the weight is so Section 14.
ascertained or accepted is stated in the bill of lading, then,
notwithstanding anything in this Act, the bill of lading shall Upon the certification of the Secretary of Commerce that
not be deemed to be prima facie evidence against the the foreign commerce of the United States in its
carrier of the receipt of goods of the weight so inserted in competition with that of foreign nations is prejudiced the
the bill of lading, and the accuracy thereof at the time of provisions, or any of them, of Title I of this Act, or by the
shipment shall not be deemed to have been guaranteed by laws of any foreign country or countries relating to the
the shipper. carriage of goods by sea, the President of the United
States, may, from time to time, by proclamation, suspend
Section 12. Nothing in this Act shall be construed as any or all provisions of Title I of this Act for such periods
superseding any part of the Act entitled "An act relating to of time or indefinitely as may be designated in the
navigation of vessels, bills of lading, and to certain proclamation. The President may at any time rescind such
obligations, duties, and rights in connection with the suspension of Title I hereof, and any provisions thereof
carriage of property," approved February 13,1893, or of which may have been suspended shall thereby be
any other law which would be applicable in the absence of reinstated and again apply to contracts thereafter made for
this Act, insofar as they relate to the duties, responsibilities, the carriage of goods by sea. Any proclamation of
and liabilities of the ship or carrier prior to the time when suspension or rescission of any such suspension shall take
the goods are loaded on or after the time they are effect on a date named therein, which date shall be not less
discharged from the ship. than ten days from the issue of the proclamation. Any
contract for the carriage of goods by sea, subject to the
Section 13. provisions of this Act, effective during any period when
title I hereof, or any part thereof, is suspended, shall be
This Act shall apply to all contracts for carriage of goods
subject to all provisions of law now or hereafter applicable
by sea to or from ports of the United States in foreign
to that part of Title I which may have thus been
trade. As used in this Act the term "United States" includes
suspended.
its districts, territories, and possessions: Provided,
however, That the Philippine legislature may by law Section 15.
exclude its application to transportation to or from ports
of the Philippine Islands. The term "foreign trade" means This Act shall take effect ninety days after the date of its
the transportation of goods between the ports of the approval; but nothing in this Act shall apply during a
United States and ports of foreign countries. Nothing in period not to exceed one year following its approval to any
this Act shall be held to apply to contracts for carriage of contract for the carriage of goods by sea, made before the
goods by sea between any port of the United States or its date on which this Act is approved, nor to any bill of
possessions, and any other port of the United States or its lading or similar document of title issued, whether before
possession: Provided, however, That any bill of lading or or after such date of approval in pursuance of any such
similar document of title which is evidence of a contract contract as aforesaid.
for the carriage of goods by sea between such ports,
containing an express statement that it shall be subject to
Aimee Nono Calo [Transportation Law] Page 51
Section 16. Customs or by the Judge of the Court of First Instance of
the province in which the things saved may be found.
This Act may be cited as the "Carriage of Goods by Sea
Act." Section 5.

Approved, April 16, 1936. The Collector of Customs, provincial treasurer, or


municipal mayor, to whom a salvage is reported, shall
5) Salvage Law (Act No. 2616) order:
Section 1. That the things saved be safeguard and inventoried.
When in case of shipwreck, the vessel or its cargo shall be The sale at public auction of the things saved which may
beyond the control of the crew, or shall have been be in danger of immediate loss or of those whose
abandoned by them, and picked up and conveyed to a safe conservation is evidently prejudicial to the interests of the
place by other persons, the latter shall be entitled to a owner, when no objection is made to such sale.
reward for the salvage.
The advertisement within the thirty days subsequent to the
Those who, not being included in the above paragraph, salvage, in one of the local newspapers or in the nearest
assist in saving a vessel or its cargo from shipwreck, shall newspaper published, of all the details of the disaster, with
be entitled to a like reward. a statement of the mark and number of the effects
requesting all interested persons to make their claims.
Section 2.
Section 6.
If the captain of the vessel, or the person acting in his
stead, is present, no one shall take from the sea, or from If, while the vessel or things saved are at the disposition of
the shores or coast merchandise or effects proceeding the authorities, the owner or his representative shall claim
from a shipwreck or proceed to the salvage of the vessel, them, such authorities shall order their delivery to such
without the consent of such captain or person acting in his owner or his representative, provided that there is no
stead. controversy over their value, and a bond is given by the
owner or his representative to secure the payment of the
Section 3.
expenses and the proper reward. Otherwise, the delivery
He who shall save or pick up a vessel or merchandise at shall nor be made until the matter is decided by the Court
sea, in the absence of the captain of the vessel, owner, or a of First Instance of the province.
representative of either of them, they being unknown, shall
Section 7.
convey and deliver such vessel or merchandise, as soon as
possible, to the Collector of Customs, if the port has a No claim being presented in the three months subsequent
collector, and otherwise to the provincial treasurer or to the publication of the advertisement prescribed in sub-
municipal mayor. section (c) of Section five, the things save shall be sold at
public auction, and their proceeds, after deducting the
Section 4.
expenses and the proper reward shall be deposited in the
After the salvage is accomplished, the owner or his insular treasury. If three years shall pass without anyone
representative shall have a right to the delivery of the claiming it, one-half of the deposit shall be adjudged to
vessel or things saved, provided that he pays, or gives a him who saved the things, and the other half to the insular
bond to secure, the expenses and the proper reward. government.

The amount and sufficiency of the bond, in the absence of Section 8.


agreement, shall be determined by the Collector of

Aimee Nono Calo [Transportation Law] Page 52


The following shall have no right to a reward for salvage or If in the salvage or in the rendering of assistance different
assistance: persons shall have intervened the reward shall be divided
between them in proportion to the services which each
The crew of the vessel shipwrecked or which was is danger one may have rendered, and, in case of doubt, in equal
of shipwreck; parts.
He who shall have commenced the salvage in spite of Those who, in order to save persons, shall have been
opposition of the captain or his representative; and exposed to the same dangers shall also have a right to
participation in the reward.
He who shall have failed to comply with the provisions of
Section three. Section 13.
Section 9. If a vessel or its cargo shall have been assisted or saved,
entirely or partially, by another vessel, the reward for
If, during the danger, an agreement is entered into
salvage or for assistance shall be divided between the
concerning the amount of the reward for salvage or
owner, the captain, and the remainder of the crew of the
assistance, its validity may be impugned because it is
latter vessel, so as to give the owner a half, the captain a
excessive, and it may be required to be reduced to an
fourth, and all the remainder of the crew the other fourth
amount proportionate to the circumstances.
of the reward, in proportion to their respective salaries, in
Section 10. the absence of an agreement to the contrary. The express
of salvage, as well as the reward for salvage or assistance,
In a case coming under the last preceding section, as well shall be a charge on the things salvaged on their value.
as in the absence of an agreement, the reward for salvage
or assistance shall be fixed by the Court of First Instance Section 14.
of the province where the things salvaged are found, taking
This Act shall take effect on its passage.
into account principally the expenditures made to recover
or save the vessel or the cargo or both, the zeal Enacted: February 4, 1916
demonstrated, the time employed, the services rendered,
the excessive express occasioned the number of persons Enacted without executive approval, August 3, 1959
who aided, the danger to which they and their vessels were
exposed as well as that which menaced the things 6) Public Service Act (Commonwealth Act No.
recovered or salvaged, and the value of such things after 65)
deducting the expenses.
CHAPTER I O RGANIZATION
Section 11.
Section 1.
From the proceeds of the sale of the things saved shall be
deducted, first, the expenses of their custody, This Act shall be known as the "Public Service Act."
conservation, advertisement, and auction, as well as
whatever taxes or duties they should pay for their entrance; Section 2.
then there shall be deducted the expenses of salvage; and
from the net amount remaining shall be taken the reward There is created under the Department of Justice a
for the salvage or assistance which shall not exceed fifty commission which shall be designated and known as the
per cent of such amount remaining. Public Service Commission, composed of one Public
Service Commissioner and five Associate Commissioners,
Section 12. and which shall be vested with the powers and duties
hereafter specified. Whenever the word "Commission" is
used in this Act, it shall be held to mean the Public Service

Aimee Nono Calo [Transportation Law] Page 53


Commission, and whenever the word "Commissioner" is The Public Service Commission shall sit individually or as
used in this Act it shall be held to mean the Public Service a body en banc or in two divisions of three Commissioners
Commissioner or anyone of the Associate Commissioners. each. The Public Service Commissioner shall preside when
The Public Service Commissioner and the Associate Public the Commission sits en banc and in one division. In the
Service Commissioners shall be natural born citizens and other division, the Associate Commissioner with seniority
residents of the Philippines, not under thirty years of age; of appointment in that division shall preside. Five
members of the Bar of the Philippines, with at least five Commissioners shall constitute a quorum for sessions en
years of law practice or five years of employment in the banc and two Commissioners shall constitute a quorum
government service requiring a lawyer's diploma; and shall for the sessions of a division. In the absence of a quorum,
be appointed by the President of the Philippines, with the the session shall be adjourned until the requisite number is
consent of the Commission on Appointments of the present.
Congress of the Philippines: Provided, however, That the
present Commissioner and the personnel of the All the powers herein vested upon the Commission shall
Commission shall continue in office without the necessity be considered vested upon any of the Commissioners,
of reappointment. The Commissioners shall have the rank acting either individually or jointly as hereinafter provided.
and privilege of retirement of Judges of the Courts of First The Commissioners shall equitably divide among
Instance. (As amended by Republic Act Nos. 178 and themselves all pending cases and those that may hereafter
2677) be submitted to the Commissioner, in such manner and
form as they may determine, and shall proceed to hear and
Section 3. determine the case assigned to each or to their respective
divisions, or to the Commission en banc as follows:
The Commissioner and Associate Commissioners shall uncontested cases, except those pertaining to the fixing of
hold office until they reach the age of seventy years, or rates, shall be decided by one Commissioner; contested
until removed in accordance with the procedures cases and all cases involving the fixing of rates shall be
prescribed in section one hundred and seventy-three of decided by the Commission in division and the
Act Numbered Twenty-seven hundred and eleven, known concurrence of at least two Commissioners in the division
as the Revised Administrative Code: Provided, however, shall be necessary for the promulgation of a decision or
That upon retirement any Commissioner of Associate non-interlocutory order in these cases: Provided, however,
Commissioner shall be entitled to all retirement benefits That any motion for reconsideration of a decision or non-
and privileges for Judges of the Courts of First Instance or interlocutory order of any Commissioner or division shall
under the retirement law to which he may be entitled on be heard directly by the Commission en banc and the
the date of his retirement. In case of the absence, for any concurrence of at least four Commissioners shall be
reason, of the Public Service Commissioner, the Associate necessary for the promulgation of a final decision or order
Commissioner with seniority of appointment shall act as resolving such motion for reconsideration. (As amended
Commissioner. If on account of absence, illness, or by Republic Act Nos. 723 and 2677)
incapacity of any of three Commissioners, or whenever by
reason of temporary disability of any Commissioner or of a Section 4.
vacancy occurring therein, the requisite number of
Commissioners necessary to render a decision or issue an The Public Service Commissioner shall receive an annual
order in any case is not present, or in the event of a tie compensation of thirteen thousand pesos; and each of the
vote among the Commissioners, the Secretary of Justice Associate Commissioners an annual compensation of
may designate such number of Judges of the Courts of twelve thousand pesos. The Commissioners shall be
First Instance, or such number of attorneys of the legal assisted by one chief attorney, one finance and rate
division of the Commission, as may be necessary to sit regulation officer, one chief utilities regulation engineer,
temporarily as Commissioners in the Public Service one chief accountant, one transportation regulation chief,
Commission. one secretary of the Public Service Commission, and three

Aimee Nono Calo [Transportation Law] Page 54


public utilities advisers who shall receive an annual officers and employees of the Commission as may be
compensation of not less than ten thousand eight hundred provided in the Appropriation Act. The Public Service
pesos each; five assistant chiefs of division who shall Commissioner shall have general executive control,
receive an annual compensation of not less than nine direction, and supervision over the work of the
thousand six hundred pesos each; twelve attorneys who Commission and of its members, body and personnel, and
shall receive an annual compensation of not less than nine over all administrative business. (As amended by Republic
thousand pesos each; and a technical and confidential staff Act Nos. 178 and 3792)
to be composed of two certified public accounts, two
electrical engineers, two mechanical or communication Section 7.
engineers, and two special assistants who shall receive an
annual compensation of not less than seven thousand two The Secretary of the Commission, under the direction of
hundred pesos each. (As amended by Republic Act Nos. the Commissioner, shall have charge of the administrative
723, 2677 and 3792) business of the Commission and shall perform such other
duties as may be required of him. He shall be the recorder
Section 5. and official reporter of the proceedings of the Commission
and shall have authority to administer oaths in all matters
The Public Service Commissioner, the Associate Public coming under the jurisdiction of the Commission. He shall
Service Commissioners, and all other officers and be the custodian of the records, maps, profiles, tariffs,
employees of the Public Service Commission shall enjoy itineraries, reports, and any other documents and papers
the same privileges and rights as the officer and employees filed with the Commission or entrusted to his care and
of the classified civil service of the Government of the shall be responsible therefor to the Commission. He shall
Philippines. They shall also be entitled to receive from the have authority to designate from time to time any of his
Government of the Philippines their necessary travelling delegates to perform the duties of Deputy Secretary with
expenses while travelling on the business of the any of the Commissioners.
Commission, which shall be paid on proper voucher
therefor, approved by the Secretary of Justice, out of funds Section 8.
appropriated for the contingent expenses of the
Commission. The Commission shall furnish the Secretary such of its
findings and decisions as in its judgment may be of general
When the exigency of the service so requires and with the public interest; the Secretary shall compile the same for the
approval of the Secretary of Justice, and subject to the purpose of publication in a series of volumes to be
provisions of Commonwealth Act Numbered Two designated "Reports of the Public Service Commission of
hundred forty-six, as amended, funds may be set aside the Philippines," which shall be published in such form
from the appropriations provided for the Commission and manner as may be best adapted for public information
and/or from the fees collected under Section forty of this and use, and such authorized publications shall be
Act to defray the expenses to be incurred by the Public competent evidence of the reports and decisions of the
Service Commissioner or any of the Associate Commission therein contained without any further proof
Commissioners, officers or employees of the Commission or authentication thereof.
to be designated by the Commissioner, with the approval
of the Secretary of Justice, in the study of modern trends Section 9.
in supervision and regulation of public services. (As
No member or employee of the Commission shall have
amended by Republic Act No. 3792)
any official or professional relation with any public service
Section 6. as herein defined, or hold any office of profit or trust with
the Government of the Philippines.
The Secretary of Justice, upon recommendation of the
Public Service Commissioner, shall appoint all subordinate Section 10.

Aimee Nono Calo [Transportation Law] Page 55


The Commission shall have its office in the City of Manila (b) The term "public service" includes every person that
or at such other place as may be designated, and may hold now or hereafter may own, operate, manage, or control in
hearings on any proceedings at such times and places, the Philippines, for hire or compensation, with general or
within the Philippines, as it may provide by order in limited clientele, whether permanent, occasional or
writing: Provided, That during the months of April and accidental, and done for general business purposes, any
May of each year, at least three Commissioners shall be on common carrier, railroad, street railway, traction railway,
vacation in such manner that once every two years at least sub-way motor vehicle, either for freight or passenger, or
three of them shall be on duty during April and May: both with or without fixed route and whether may be its
Provided, however, That in the interest of public service, classification, freight or carrier service of any class, express
the Secretary of Justice may require any or all the service, steamboat or steamship line, pontines, ferries, and
Commissioners not on duty to render services and water craft, engaged in the transportation of passengers or
perform their duties during the vacation months. (As freight or both, shipyard, marine railways, marine repair
amended by Republic Act Nos. 176 and 3792) shop, [warehouse] wharf or dock, ice plant, icerefrigeration
plant, canal, irrigation system, gas, electric light, heat and
Section 11. power water supply and power, petroleum, sewerage
system, wire or wireless communications system, wire or
The Commission shall have the power to make needful wireless broadcasting stations and other similar public
rules for its Government and other proceedings not services: Provided, however, That a person engaged in
inconsistent with this Act and shall adopt a common seal, agriculture, not otherwise a public service, who owns a
and judicial notice shall be taken for such seal. True copies motor vehicle and uses it personally and/or enters into a
of said rules and other amendments shall be promptly special contract whereby said motor vehicle is offered for
furnished to the Bureau of Printing and shall be forthwith hire or compensation to a third party or third parties
published in the Official Gazette. engaged in agriculture, not itself or themselves a public
service, for operation by the latter for a limited time and
CHAPTER II J URISDICTION, POWERS AND
for a specific purpose directly connected with the
DUTIES OF THE COMMISSION
cultivation of his or their farm, the transportation,
Section 13. processing, and marketing of agricultural products of such
third party or third parties shall not be considered as
(a) The Commission shall have jurisdiction, supervision, operating a public service for the purposes of this Act.
and control over all public services and their franchises,
equipment, and other properties, and in the exercise of its (c) The word "person" includes every individual, co-
authority, it shall have the necessary powers and the aid of partnership, joint-stock company or corporation, whether
the public force: Provided, That public services owned or domestic or foreign, their lessees, trustees, or receivers, as
operated by government entities or government-owned or well as any municipality, province, city, government-owned
controlled corporations shall be regulated by the or controlled corporation, or agency of the Government of
Commission in the same way as privatelyowned public the Philippines, and whatever other persons or entities that
services, but certificates of public convenience or may own or possess or operate public services. (As
certificates of public convenience and necessity shall not amended by Com. Act 454 and RA No. 2677)
be required of such entities or corporations: And provided,
Section 14.
further, That it shall have no authority to require
steamboats, motor ships and steamship lines, whether The following are exempted from the provisions of the
privately-owned, or owned or operated by any preceding section:
Government controlled corporation or instrumentality to
obtain certificate of public convenience or to prescribe (a) Warehouses;
their definite routes or lines of service.

Aimee Nono Calo [Transportation Law] Page 56


(b) Vehicles drawn by animals and bancas moved by oar or itineraries and time schedules of public services, and to
sail, and tugboats and lighters; authorizations to renew and increase equipment and
properties.
(c) Airships within the Philippines except as regards the
fixing of their maximum rates on freight and passengers; Section 16.

(d) Radio companies except with respect to the fixing of Proceedings of the Commission, upon notice and hearing.
rates; - The Commission shall have power, upon proper notice
and hearing in accordance with the rules and provisions of
(e) Public services owned or operated by any this Act, subject to the limitations and exceptions
instrumentality of the National Government or by any mentioned and saving provisions to the contrary :
government-owned or controlled corporation, except with
respect to the fixing of rates. (As amended by Com. Act (a) To issue certificates which shall be known as
454, RA No. 2031, and RA No. 2677 ) certificates of public convenience, authorizing the
operation of public service within the Philippines
Section 15. whenever the Commission finds that the operation of the
public service proposed and the authorization to do
With the exception of those enumerated in the preceding business will promote the public interest in a proper and
section, no public service shall operate in the Philippines suitable manner. Provided, That thereafter, certificates of
without possessing a valid and subsisting certificate from public convenience and certificates of public convenience
the Public Service Commission known as "certificate of and necessity will be granted only to citizens of the
public convenience," or "certificate of public convenience Philippines or of the United States or to corporations, co-
and necessity," as the case may be, to the effect that the partnerships, associations or joint-stock companies
operation of said service and the authorization to do constituted and organized under the laws of the
business will promote the public interests in a proper and Philippines; Provided, That sixty per centum of the stock
suitable manner. or paid-up capital of any such corporations, co-
partnership, association or joint-stock company must
The Commission may prescribe as a condition for the
belong entirely to citizens of the Philippines or of the
issuance of the certificate provided in the preceding
United States: Provided, further, That no such certificates
paragraph that the service can be acquired by the Republic
shall be issued for a period of more than fifty years.
of the Philippines or any instrumentality thereof upon
payment of the cost price of its useful equipment, less (b) To approve, subject to constitutional
reasonable depreciation; and likewise, that the certificate limitations any franchise or privilege granted under the
shall be valid only for a definite period of time; and that provisions of Act No. Six Hundred and Sixty-seven, as
the violation of any of these conditions shall produce the amended by Act No. One Thousand and twenty-two, by
immediate cancellation of the certificate without the any political subdivision of the Philippines when, in the
necessity of any express action on the part of the judgment of the Commission, such franchise or privilege
Commission. will properly conserve the public interests, and the
Commission shall in so approving impose such conditions
In estimating the depreciation, the effect of the use of the
as to construction, equipment, maintenance, service, or
equipment, its actual condition, the age of the model, or
operation as the public interests and convenience may
other circumstances affecting its value in the market shall
reasonably require, and to issue certificates of public
be taken into consideration.
convenience and necessity when such is required or
The foregoing is likewise applicable to any extension or provided by any law or franchise.
amendment of certificates actually in force and to those
(c) To fix and determine individual or joint rates,
which may hereafter be issued, to permit to modify
tolls, charges, classifications, or schedules thereof, as well
Aimee Nono Calo [Transportation Law] Page 57
as commutation, mileage, kilometrage, and other special (i) To direct any railroad, street railway or traction
rates which shall be imposed observed and followed company to establish and maintain at any junction or point
thereafter by any public service: Provided, That the of connection or intersection with any other line of said
Commission may, in its discretion, approve rates proposed road or track, or with any other line of any other railroad,
by public services provisionally and without necessity of street railway or traction to promote, such just and
any hearing; but it shall call a hearing thereon within thirty reasonable connection as shall be necessary to promote the
days, thereafter, upon publication and notice to the convenience of shippers of property, or of passengers, and
concerns operating in the territory affected: Provided, in like manner direct any railroad, street railway, or traction
further, That in case the public service equipment of an company engaged in carrying merchandise, to construct,
operator is used principally or secondarily for the maintain and operate, upon reasonable terms, a switch
promotion of a private business, the net profits of said connection with any private sidetrack which may be
private business shall be considered in relation with the constructed by any shipper to connect with the railroad,
public service of such operator for the purpose of fixing street railway or traction company line where, in the
the rates. judgment of the Commission, such connection is
reasonable and practicable and can be out in with safety
(d) To fix just and reasonable standards, and will furnish sufficient business to justify the
classifications, regulations, practices, measurement, or construction and maintenance of the same.
service to be furnished, imposed, observed, and followed
thereafter by any public service. (j) To authorize, in its discretion, any railroad,
street railway or traction company to lay its tracks across
(e) To ascertain and fix adequate and serviceable the tracks of any other railroad, street railway or traction
standards for the measurement of quantity, quality, company or across any public highway.
pressure, initial voltage, or other condition pertaining to
the supply of the product or service rendered by any public (k) To direct any railroad or street railway
service, and to prescribe reasonable regulations for the company to install such safety devices or about such other
examination and test of such product or service and for reasonable measures as may in the judgment of the
the measurement thereof. Commission be necessary for the protection of the public
are passing grade crossing of (1) public highways and
(f) To establish reasonable rules, regulations, railroads, (2) public highways and streets railway, or (3)
instructions, specifications, and standards, to secure the railways and street railways.
accuracy of all meters and appliances for measurements.
(l) To fix and determine proper and adequate rates
(g) To compel any public service to furnish safe, of depreciation of the property of any public service which
adequate, and proper service as regards the manner of will be observed in a proper and adequate depreciation
furnishing the same as well as the maintenance of the account to be carried for the protection of stockholders,
necessary material and equipment. bondholders or creditors in accordance with such rules,
regulations, and form of account as the Commission may
(h) To require any public service to establish, prescribe. Said rates shall be sufficient to provide the
construct, maintain, and operate any reasonable extension amounts required over and above the expense of
of its existing facilities, where in the judgment of said maintenance to keep such property in a state of efficiency
Commission, such extension is reasonable and practicable corresponding to the progress of the industry. Each public
and will furnish sufficient business to justify the service shall conform its depreciation accounts to the rates
construction and maintenance of the same and when the so determined and fixed, and shall set aside the moneys so
financial condition of the said public service reasonably provided for out of its earnings and carry the same in a
warrants the original expenditure required in making and depreciation fund. The income from investments of
operating such extension. money in such fund shall likewise be carried in such fund.

Aimee Nono Calo [Transportation Law] Page 58


This fund shall not be expended otherwise than for enforce compliance with any standard, rule, regulation,
depreciation, improvements, new construction, extensions order or other requirement of this Act or of the
or conditions to the properly of such public service. Commission, and to prohibit or prevent any public service
as herein defined from operating without having first
(m) To amend, modify or revoke at any time secured a certificate of public convenience or public
certificate issued under the provisions of this Act, necessity and convenience, as the case may be and require
whenever the facts and circumstances on the strength of existing public services to pay the fees provided for in this
which said certificate was issued have been misrepresented Act for the issuance of the proper certificate of public
or materially changed. convenience or certificate of public necessity and
convenience, as the case may be, under the penalty, in the
(n) To suspend or revoke any certificate issued discretion by the Commission, of the revocation and
under the provisions of this Act whenever the holder cancellation of any acquired rights.
thereof has violated or willfully and contumaciously
refused to comply with any order rule or regulation of the (b) To require any public service to pay the actual
Commission or any provision of this Act: Provided, That expenses incurred by the Commission in any investigation
the Commission, for good cause, may prior to the hearing if it shall be found in the same that any rate, tool, charge,
suspend for a period not to exceed thirty days any schedule, regulation, practice, act or service thereof is in
certificate or the exercise of any right or authority issued or violation of any provision of this Act or any certificate,
granted under this Act by order of the Commission, order, rule, regulation or requirement issued or established
whenever such step shall in the judgment of the by the Commission. The Commission may also assess
Commission be necessary to avoid serious and irreparable against any public service costs not to exceed twenty-five
damage or inconvenience to the public or to private pesos with reference to such investigation.
interests.
(c) From time to time appraise and value the
(o) To fix, determine, and regulate, as the property of any public service, whenever in the judgment
convenience of the state may require, a special type for of the Commission it shall be necessary so to do, for the
autobusses, trucks, and motor trucks to be hereafter purpose of carrying out any of the provisions of this Act,
constructed, purchased, and operated by operators after and in making such valuation the Commission may have
the approval of this Act; to fix and determine a special access to and use any books, documents, or records in the
registration fee for auto-buses, trucks, and motor trucks so possession of any department, bureau, office, or board of
constructed, purchased and operated: Provided, That said the government of the Philippines or any political
fees shall be smaller than more those charged for auto- subdivision thereof.
busses, trucks, and motor trucks of types not made
regulation under the subsection. (d) To provide, on motion by or at the request of
any consumer or user of a public service, for the
Section 17. examination and test of any appliance used for the
measuring of any product or service of a public service,
Proceedings of Commission without previous hearing. - and for that purpose, by its agents, experts, or examiners
The Commission shall have power without previous to enter upon any premises where said appliances may be,
hearing, subject to established limitations and exception and other premises of the public service, for the purpose
and saving provisions to the contrary: of setting up and using on said premises any apparatus
necessary therefor. and to fix the fees to be paid by any
(a) To investigate, upon its own initiative, or upon
consumer or user who may apply to the Commission for
complaint in writing, any matter concerning any public
such examination or test to be made, and if the appliance
service as regards matters under its jurisdiction; to require
be found defective or incorrect to the disadvantage of the
any public service to furnish safe, adequate, and proper
service as the public interest may require and warrant; to

Aimee Nono Calo [Transportation Law] Page 59


consumer or user to require the fees paid to be refunded to compromises or contracts affecting the same. Said reports
the consumer or user by the public service concerned. shall cover a period of twelve months, ending on
December thirty-first of each year, and shall be sworn to
(e) To permit any street railway or traction by the officer or functionary of the public service
company to change its existing gauge to standard steam authorized therefor. The Commission shall also have
railroad gauge, upon such terms and conditions as the power to require from time to time special reports
Commission shall prescribe. containing such information as above provided for or on
other matters as the Commission may deem necessary or
(f) To grant to any public service special permits advisable.
to make extra or special trips within the territory covered
by its certificates of public convenience, and to make (i) To require every public service to file with the
special excursion trips outside of its own territory if the Commission a statement in writing, verified by the oaths
public interest or special circumstances required it: of the owner or the president and the secretary thereof, if a
Provided, however, that in case a public service cannot corporation, setting forth the name, title of office or
render such extra service on its own line or in its own portion, and post-office address, and the authority, power
territory, a special permit for such extra service may be and duties of every officer, member of the board of
granted to any other public service. directors, trustees executive committee, superintendent,
chief or head of construction and operation thereof, in
(g) To require any public service to keep its books, such form as to disclose the source and origin of each
records, and accounts so as to afford an intelligent administrative act, rule, decision, order or other action of
understanding of the conduct of its business and to that the operator of such public service; and, within ten days
end to require every such public service of the same class after any change is made in the title of, or authority,
to adopt a uniform system of accounting. Such system powers or duties appertaining to any such office or
conform to any system approved and confirmed by the position, or the person holding the same, filed with the
Auditor General. Commission a like statement, verified in like manner,
setting forth such change.
(h) To require any public service to furnish annual
reports of finances and operations. Such reports shall set (j) To require any public service to comply with
forth in detail the capital stock issued, the amounts of said the laws of the Philippines and with any provincial
capital stock paid up and the form of payment thereof; the resolution or municipal ordinance relating thereto and to
dividends paid, the surplus, if any and the number of conform to the duties imposed upon it thereby or by the
stockholders, the consolidated and pending obligations and provisions of its own character, whether obtained under
the interest paid thereon; the cost and value of the any general or special law of the Philippines.
property of the operator; concessions or franchises and
equipment; the number of employees and salaries paid to (k) To investigate any or all accidents that may
each class; the accidents to passengers, employees, and occur on the property of any public service or directly or
other person, and the causes thereof; the annual indirectly arising from or connected with its maintenance
expenditures on improvements; the manner of their or operation in the Philippines; to require any public
investment and nature of such improvements; the receipts service to give the Commission immediate and effective
and profits in each of the branches of the business and of notice of all any such accidents, and to make such order or
whatever source; the operating and other expenses; the recommendation with respect thereto as the public interest
balance of profits and losses; and a complete statement of may warrant or require.
the annual financial operations of the operator, including
an annual balance sheet. Such reports shall also contain (l) To require every public service s herein defined
any information which the Commission may require to file within complete schedules of every classification
concerning freight and passenger rates, or agreements, employed and of every individual or joint rate, toll fare or

Aimee Nono Calo [Transportation Law] Page 60


charge made, charged or exacted by it for any product any respect whatsoever; to adopt, maintain, or enforce any
supplied or service rendered within the Philippines and, in regulation, practice or measurement which shall be found
the case of public carriers, to file with it a statement or determined by the Commission to be unjust,
showing the itineraries or routes served as specified in such unreasonable, unduly preferential or unjustly
requirement. discriminatory in a final order which shall be conclusive
and shall take effect in accordance with the provisions of
CHAPTER III O PERATORS OF PUBLIC this Act, upon repeal or otherwise.
SERVICES REGULATIONS AND
PROHIBITIONS (c) To refuse or neglect, when requested by the
Director of Posts or his authorized representative, to carry
Section 18. public mail on the regular trips of any public land
transportation service maintained or operated by any such
It shall be unlawful for any individual, co-partnership, public service; upon such terms and conditions and for a
association, corporation or joint-stock company, their consideration in such amount as may be agreed upon
lessees, trustees or receivers appointed by any court between the Director of Posts and the public service
whatsoever, or any municipality, province, or other carrier of fixed by the Commission in the absence of an
department of the Government of the Philippines to agreement between the Director of Posts and the carrier.
engage in any public service business without having first In case the Director of Posts and public service carrier are
secured from the Commission a certificate of public unable to agree on the amount of the compensation to be
convenience or certificate of public convenience and paid for the carriage of the mail, the Director of Posts shall
necessity as provided for in this Act, except grantees of forthwith request the Commission to fix a just and
legislative franchises expressly exempting such grantees reasonable compensation for such carriage and the same
from the requirement of securing a certificate from this shall be promptly fixed by the Commission in accordance
Commission as well as concerns at present existing with Section sixteen of this Act.
expressly exempted from the jurisdiction of the
Commission, either totally or in part, by the provisions of Section 20.
section thirteen of this Act.
Acts requiring the approval of the Commission. - Subject
Section 19. Unlawful Acts. - It shall be unlawful for any to established limitations and exceptions and saving
public service: provisions to the contrary, it shall be unlawful for any
public service or for the owner, lessee or operator thereof,
(a) To provide or maintain any service that is without the approval and authorization of the Commission
unsafe, improper, or inadequate or withhold or refuse any previously had
service which can reasonably be demanded and furnished,
as found and determined by the Commission in a final (a) To adopt, establish, fix, impose, maintain,
order which shall be conclusive and shall take effect in collect or carry into effect any individual or joint rates,
accordance with this Act, upon appeal of otherwise. commutation, mileage or other special rate, toll, fare,
charge, classification or itinerary. The Commission shall
(b) To make or give, directly or indirectly, by itself approve only those that are just and reasonable and not
or through its agents, attorneys or brokers, or any of them, any that are unjustly discriminatory or unduly preferential,
discounts or rebates on authorized rates, or grant credit for only upon reasonable notice to the public services and
the payment of freight charges, or any undue or other parties concerned, giving them a reasonable
unreasonable preference or advantage to any person of opportunity to be heard and the burden of the proof to
corporation or to any locality or to any particular show that the proposed rates or regulations are just and
description of traffic or service, or subject any particular reasonable shall be upon the public service proposing the
person or corporation or locality or any particular same.
description of traffic to any prejudice or disadvantage in

Aimee Nono Calo [Transportation Law] Page 61


(b) To establish, construct, maintain, or operate franchises privileges or rights, or any part thereof, with
new units or extend existing facilities or make any other those of any other public service. The approval herein
addition to or general extension of the service. required shall be given, after notice to the public and
hearing the persons interested at a public hearing, if it be
(c) To abandon any railroad station or stop the shown that there are just and reasonable grounds for
sale of passenger tickets, or cease to maintain an agent to making the mortgaged or encumbrance, for liabilities of
receive and discharge freight at any station now or more than one year maturity, or the sale, alienation, lease,
hereafter established at which passenger tickets are now or merger, or consolidation to be approved, and that the
may hereafter be regularly sold, or at which such agent is same are not detrimental to the public interest, and in case
now or may hereafter be maintained, or make any of a sale, the date on which the same is to be
permanent change in its time tables or itineraries on any consummated shall be fixed in the order of approval:
railroad or in its service. Provided, however, that nothing herein contained shall be
construed to prevent the transaction from being negotiated
(d) To lay any railroad or street railway track or completed before its approval or to prevent the sale,
across any highway, so as to make a new crossing at grade, alienation, or lease by any public service of any of its
or cross the tracks of any other railroad or street railway, property in the ordinary course of its business.
provided, that this subsection shall not apply to
replacements of lawfully existing tracks. (h) To sell or register in its books the transfer or
sale of shares of its capital stock, if the result of that sale in
(e) Hereafter to issue any stock or stock itself or in connection with another previous sale, shall be
certificates representing an increase of capital; or issue any to vest in the transferee more than forty per centum of the
share of stock without par value; or issue any bonds or subscribed capital of said public service. Any transfer made
other evidence of indebtedness payable in more than one in violation of this provision shall be void and of no effect
year from the issuance thereof, provided that it shall be the and shall not be registered in the books of the public
duty of the Commission, after hearing, to approve any service corporation. Nothing herein contained shall be
such issue maturing in more than one year from the date construed to prevent the holding of shares lawfully
thereof, when satisfied that the same is to be made in acquired. (As amended by Com. Act No. 454.)
accordance with law , and the purpose of such issue be
approved by the Commission. (i) To sell, alienate or in any manner transfer
shares of its capital stock to any alien if the result of that
(f) To capitalize any franchise in excess of the sale, alienation, or transfer in itself or in connection with
amount, inclusive of any tax or annual charge, actually paid another previous sale shall be the reduction to less than
to the Government of the Philippines or any political sixty per centum of the capital stock belonging to
subdivision thereof as the consideration of said franchise; Philippine citizens. Such sale, alienation or transfer shall be
capitalize any contract for consolidation, merger or lease, void and of no effect and shall be sufficient cause for
or issue any bonds or other evidence of indebtedness ordering the cancellation of the certificate.
against or as a lien upon any contract for consolidation,
merger, or lease: Provided, however, that the provisions of (j) To issue, give or tender, directly or indirectly,
this section shall not prevent the issuance of stock, bonds, any free ticket free pass or free or reduced rate of
or other evidence of indebtedness subject to the approval transportation for passengers, except to the following
of the Commission by any lawfully merged or consolidated persons: (1) officers, agents, employees, attorneys,
public services not in contravention of the provisions of physicians and surgeons of said public service, and
this section. members of their families; (2) inmates of hospitals or
charity institutions, and persons engaged in charitable
(g) To sell, alienate, mortgage, encumber or lease work; (3) indigent, destitute, and homeless persons when
its property, franchises, certificates, privileges, or rights or transported by charitable societies or hospitals, and the
any part thereof; or merge or consolidate its property,
Aimee Nono Calo [Transportation Law] Page 62
necessary agents employed in such transportation; (4) the Section 22.
necessary caretakers, going and returning, of livestock,
poultry, fruit, and other freight under uniform and non- Observance of the orders, decisions, and regulations of the
discriminatory regulation; (5) employees of sleeping car Commission and of the terms and conditions of any
corporations, express corporations and telegraph and certificate may also be enforced by mandamus or
telephone corporations, railway and marine mail service injunction in appropriate cases, or by action to compel the
employees, when traveling in the course of their official specific performance of the orders, decisions, and
duly; (6) post-office inspectors, customs officers and regulations so made, or of the duties imposed by law upon
inspectors, and immigration inspectors when engaged in such public service: Provided, that the Commission may
inspection; (7) witnesses attending any legal investigation compromise any case that arise under this Act in such
in which the public service is an interested party; (8) manner and for such amount as it may deem just and
persons injured in accidents or wrecks, and physicians and reasonable.
nurses attending such persons; (9) peace officers and men
of regularly constituted fire departments. (As amended by Section 23.
Com. Act No. 454.)
Any public service corporation that shall perform, commit,
(k) Adopt, maintain, or apply practices or or do any act or thing forbidden or prohibited or shall
measures, rules or regulations to which the public shall be neglect, fail or omit to do or perform any act or thing
subject in its relations with the public service. herein to be done or performed, shall be punished by a
fine not exceeding twenty-five thousand pesos, or by
CHAPTER IV imprisonment not exceeding five years, or both, in the
discretion of the court.
P ENALTIES FOR VIOLATIONS
Section 24.
Section 21.
Any person who shall knowingly and willfully perform,
Every public service violating or failing to comply with the commit, or do, or participate in performing, committing,
terms and conditions of any certificate or any orders, or doing, or who shall knowingly and willfully cause,
decisions or regulations of the Commission shall be participate, or join with others in causing any public service
subject to a fine of not exceeding two hundred pesos per corporation or company to do, perform or commit, or
day for every day during which such default or violation who shall advice, solicit, persuade, or knowingly and
continues; and the Commission is hereby authorized and willfully instruct, direct, or order any officer, agent, or
empowered to impose such fine, after due notice and employee of any public service corporation or company to
hearing. perform, commit, or do any act or thing forbidden or
prohibited by this Act, shall be punished by a fine not
The fines so imposed shall be paid to the Government of exceeding two thousand pesos, or imprisonment not
the Philippines through the Commission, and failure to pay exceeding two years, or both, in the discretion of the court:
the fine in any case within the same specified in the order Provided, however, that for operating a private passenger
or decision of the Commission shall be deemed good and automobile as a public service without having a certificate
sufficient reason for the suspension of the certificate of of public convenience for the same the offender shall be
said public service until payment shall be made. Payment subject to the penalties provided for in section sixty-seven
may also be enforced by appropriate action brought in a (j) of Act numbered thirty-nine hundred an ninety-two.
court of competent jurisdiction. The remedy provided in
this section shall not be a bar to, or affect any other Section 25.
remedy provided in this Act but shall be cumulative and
additional to such remedy or remedies. Any person who shall knowingly and willfully neglect, fail,
or omit to do or perform, or who shall knowingly and

Aimee Nono Calo [Transportation Law] Page 63


willfully cause or join or participate with others in causing Section 29.
any public service corporation or company to neglect, fail
or omit to do or perform, or who shall advise, solicit, or All hearings and investigations before the Commission
persuade, or knowingly and willfully instruct, direct, or shall be governed by rules adopted by the Commission,
order any officer, agent, or employee of any public service and in the conduct thereof the Commission shall not be
corporation or company to neglect, fail, or omit to do any bound by the technical rules of legal evidence: Provided,
act or thing required to be done by this Act, shall be That the Public Service Commissioner or associate
published by a fine not exceeding two thousand pesos or commissioners may summarily punish for contempt by a
by imprisonment not exceeding two years, or both, in the fine not exceeding two hundred pesos or by imprisonment
discretion of the court. not exceeding ten days, or both, any person guilty of
misconduct in the presence of the Commissioner or
Section 26. associate commissioners or so near the same as to
interrupt the hearing or session or any proceeding before
Any person who shall destroy, injure, or interfere with any them, including cases in which a person present at a
apparatus or appliance owned or operated by to in charge hearing, session, or investigation held by either of the
of the Commission or its agents, shall be deemed guilty of commissioners refuses to be sworn as a witness or to
a misdemeanor and upon conviction shall be published by answer as such when lawfully required to do so. To
a fine not exceeding one thousand pesos or imprisonment enforce the provisions of this section, the Commission
not exceeding six months, or both in the discretion of the may, if necessary, request the assistance of the municipal
court. Any public service permitting the destruction, injury police for the execution of any order made for said
to, or interference with, any such apparatus or appliances purpose.
shall forfeit a sum not exceeding four thousand pesos for
each offense. (1) While the Commission is authorized to make
rules for the conduct of their business, it could not set at
Section 27. naught the fundamental rule of all proceedings that only
parties having a real interest will be heard.
This Act shall not have the effect to release or waive any
right of action by the Commission or by any person for (2) A party not affected or prejudiced cannot file
any right, penalty, or forfeiture which may have arisen or an opposition.
which may arise, under any of the laws of the Philippines,
and any penalty or forfeiture enforceable under this Act (3) One public service corporation cannot assume
shall not be a bar to or affect a recovery for a right, or the name and be substituted in the place of another public
affect or bar any criminal proceedings against any public service corporation.
service or person or persons operating such public
services, its officers, directors, agents, or employees. (4) A legal representative of the estate of a
deceased applicant may be substituted for the latter. If the
Section 28. Violations of the orders, decisions, and right consists in the prosecution of unfinished proceedings
regulations of the Commission and of the terms and upon an application for a certificate of public convenience
conditions of any certificate issued by the Commission of the deceased before the Public service Commission, it is
shall prescribe after sixty days, and violations of the but logical that the legal representative be empowered and
provisions of this Act shall prescribe after one hundred entitled in behalf of the estate to make the right effective
and eighty days. in that proceeding.

CHAPTER V (5) One who has been granted a legislative


franchise to operate an ice plant, although not yet an
PROCEDURE AND REVIEW operator of such public utility, has sufficient interest or
personality either to oppose an established operator's

Aimee Nono Calo [Transportation Law] Page 64


application for an increase in the capacity of his existing any person, an order requiring such public service or other
plant, or to ask for a joint hearing of said application and person to appear before the Commission and produce and
the grantee's own application for the issuance of a papers if so ordered and give evidence touching the matter;
certificate of public convenience in order to operate under and any failure to obey such order of the court may be
such franchise. punished by such court as a contempt thereof.

(6) The fact that a party is the lessee of a line does (b) Any person who shall neglect or refuse to answer any
not bar him from applying for a certificate of its own in lawful inquiry or produce the Commission books, paper,
the same line. Even in cases where the owner of a tariffs, contracts, agreements, and documents or other
certificate has sold it subject to the condition that he things called for by said Commission, if in his power to do
would not apply for a similar service on the same line sold so, in obedience to the subpoena or lawful inquiry of the
by him, it has been held that such an argument does not Commission, upon conviction thereof by a court of
bar the seller from applying and that the Public Service competent jurisdiction, shall be punished by a fine not
Commission, if it finds that there is public need for the exceeding five thousand pesos or by imprisonment not
new service applied for, may properly grant the certificate exceeding one year, or both, in the discretion of the court.
requested. In other words the primary consideration is a
finding by the Commission that public interest and (c) The Commissioner and associate commissioners, the
convenience require a given service and that parties may chiefs of divisions, the attorneys of the Commission, and
not by agreement deprive the Commission of its power. the deputy secretaries shall have the power to administer
oaths in all matters under the jurisdiction of the
(7) A case involving the grant of a Certificate of Commission.
Public Convenience to the respondent becomes moot and
academic where the respondent ceases to be a bus (d) Any person who shall testify falsely or make any false
operator, and it should be dismissed. affidavit or oath before the Commission or before any of
its members shall be guilty of perjury, and upon conviction
Section 30. thereof in a court of competent jurisdiction, shall be
punished as provided by law .
(a) The Commission may issue subpoenas and subpoenas
duces tecum, for witnesses in any matter or inquiry (e) Witnesses appearing before the Commission in
pending before the Commission and require the obedience to subpoena or subpoena duces tecum, shall be
production of all books, papers, tariffs, contracts, entitled to receive the same fees and mileage allowance as
agreements, and all other documents, which the witnesses attending Courts of First Instance in civil cases.
Commission may deem necessary in any proceeding. such
process shall be issued under the seal of the Commission, (f) Any person who shall obstruct the Commission or
signed by one of the Commissioners or by the secretary, either of the Commissioners while engaged in the
and may be served by any person of full age, or by discharge of Official duties, or who shall conduct himself
registered mail. In case of disobedience to such subpoena, in a rude, disrespectful or disorderly manner before the
the Commission may invoke the said of the Supreme Commission or either of the Commissioners, while
Court or of any Court of First Instance of the Philippines engaged in the discharge of official duties, or shall orally or
in requiring the attendance and testimony of witness and in writing be disrespectful to, offend or insult either of the
the production of books, papers, and documents under the Commissioners on occasion or by reason of the
provisions of this chapter, and the Supreme Court, or any performance of official duties, upon conviction thereof by
Court of First Instance of the Philippines within the a court of competent jurisdiction, shall be punished for
jurisdiction of which such inquiry is carried on, may in case each offense by a fine not exceeding one thousand pesos,
of contumacy of refusal to obey a subpoena, issue to any or by imprisonment not exceeding six months, or both, in
public service subject to the provisions of this Act, or to the discretion of the court.

Aimee Nono Calo [Transportation Law] Page 65


Section 31. No person shall be excused from testifying or the latter to render its decision. (As amended by Rep. Act
from producing any book, document, or paper in any No. 723.)
investigation or inquiry by or upon the hearing before the
Commission, when ordered so to do by said Commission, Section 33.
except when the testimony or evidence required of him
may tend to incriminate him. Without the consent of the Every order made by the Commission shall be served
interested party no member or employee of the upon the person or public service affected thereby, within
Commission shall be compelled or permitted to give ten days from the time said order is filed by personal
testimony in any civil suit to which the Commission is not delivery or by ordinary mail, upon the attorney of record,
a party, with regard to secrets obtained by him in the or in case there be no attorney of record, upon the party
discharge of his official duty. interested; and in case such certified copy is sent by
registered mail, the registry mail receipt shall be prima facie
Section 32. The Commission may, in any investigation or evidence of the receipt of such order by the public service
hearing, by its order in writing cause the deposition of in due course of mail. All orders of the Commission to
witnesses residing within or without the Philippines to be continue an existing service or prescribing rates to be
taken in the manner prescribed by the Rules of Court. charged shall be immediately operative; all other orders
Where witnesses reside in places distant from Manila and it shall become effective upon the dates specified thereon:
would be inconvenient and expensive for them to appear Provided, however, that orders, resolutions or decisions in
personally before the Commission, the Commission may, converted matters and not referring to the continuance of
by proper order, commission any clerk of the Court of an existing service or prescribing rates to be charged shall
First Instance, municipal judge or justice of the peace of not be effective unless otherwise provided by the
the Philippines to take the deposition of witnesses in any Commission, and shall take effect thirty days after notice
case pending before the Commission. It shall be the duty to the parties.
of the official so commissioned, to designated promptly a
date or dates for the taking of such deposition, giving Section 34.
timely notice to the parties, and on said date to proceed to
Any interested party may request the reconsideration of
take the deposition, reducing it to writing. After the
any order, ruling, or decision of the Commission by means
depositions have been taken, the official so commissioned
of a petition filed not later than fifteen days after the date
shall certify to the depositions taken and forward them as
of the notice of the order, ruling, or decision in question.
soon as possible to the Commission. It shall be the duty of
The grounds on which the request for reconsideration is
the respective parties to furnish stenographers for taking
based shall be clearly and specifically stated in the petition.
and transcribing the testimony taken. in case the are no
Copies of said petition shall be served on all parties
stenographers available, the testimony shall be taken in
interested in the matter. It shall be the duty of the
long hand by such person as the clerk of court, the
Commission to call a hearing to decide the same promptly,
municipal judge or justice of the peace may designate. The
either denying the petition or revoking or modifying the
Commission may also commission a notary public to take
order, ruling or decision under consideration.
the depositions in the same manner herein provided.
Section 35. The Supreme Court is hereby given
The Commission may also, by proper order, authorize any
jurisdiction to review any order, ruling, or decision of the
of the attorneys of the legal division or division chiefs of
Commission and to modify or set aside such order, ruling,
the Commission, if they be lawyers, to hear and investigate
or decision when it clearly appears that there was no
any case filed, with the Commission and in connection
evidence before the Commission to support reasonably
therewith to receive such evidence as may be material
such order, ruling, or decision, or that the same is contrary
thereto. At the conclusion of the hearing or investigation,
to law , or that it was without the jurisdiction of the
the attorney or division chief so authorized shall submit
Commission. The evidence presented to the Commission,
the evidence received by him to the Commission to enable
together with the record of the proceedings before the
Aimee Nono Calo [Transportation Law] Page 66
Commission, shall be certified by the secretary of the by the President of the Philippines with the consent of the
Commission to the Supreme Court. Any order, ruling, or commission on appointments of the Congress of the
decision of the Commission may likewise be reviewed by Philippines. The employees of the office of the People's
the Supreme Court upon a writ of certiorari in proper Counsel shall be appointed by the Secretary of Justice
cases. The procedure for review , except as herein upon recommendation of the People's Counsel.
provided, shall be prescribed by rules of the Supreme
Court. The People's Counsel and his assistants shall posses the
qualifications of a provincial fiscal. The People's Counsel
Section 36. Any other, ruling, or decision of the may be shall receive compensation at the rate of seven thousand
reviewed on the application of any person or public service two hundred pesos per annum, and the first and second
affected thereby, by certiorari in appropriate cases, or by assistant's People's Counsel, at the rate of six thousand
petition, to be known as petition for review , which shall pesos per annum each.
be filed within thirty days from the notification of such
order, ruling or decision, or in case of a petition is filed in The People's Counsel, his assistants, and the employees of
accordance with the preceding section for the the Office of the People's Counsel shall not, during their
reconsideration of such order, ruling or decision and the continuance in office, intervene directly or indirectly in the
same is denied it shall be filed within fifteen days after management or control of, or be financially interested
notice of the order denying reconsideration. Said petition directly or indirectly in any public service as defined in this
shall be placed on file in the office of the Clerk of the Act.
Supreme Court who shall furnish copies thereof to the
Secretary of the Commission and other parties interested. It shall be the duty of the People's Counsel (1) to institute
proceedings before the Commission, in behalf of the
Section 37. public, for the purpose of fixing just and reasonable rates
or charges to be followed and observed by public services
The institution of a writ of certiorari or other special as herein defined, whenever he has reason to believe that
remedies in the Supreme Court shall in no case supersede the existing rates or charges of such public services are
or stay any order, ruling or decision of the Commission, unjust and unreasonable or unjustly discriminatory; (2) to
unless the Supreme Court shall so direct, and the appellant represent and appear for the public before the
may be required by the Supreme Court to give bond in Commission or any court of the Philippines in every case
such form and of such amount as may be deemed proper. involving the interest of users of the products of, or
service furnished by any public service under the
Section 38. jurisdiction of the Commission; (3) to represent and
appear for petitioners appearing before the Commission
The chief of the legal division or any other attorneys of the for the purpose of complaining in matters of the rates and
Commission shall represent the same in all judicial services; (4) to investigate the service given by the rates
proceedings. It shall be the duty of the Solicitor General to charged by, and the valuation of the properties of the
represent the Commission in any judicial proceedings if, public services under the jurisdiction of the Commission,
for special reason, the Commissioner shall request his and such other matters relating to said public services as
intervention. affect the interests of users of the products or service
thereof, and to take all the steps necessary for the
There is hereby created under the administrative
protection of the interests of the person or persons or of
supervision of the Secretary of Justice an office to be
the public affected thereby. In connection with such
known as the Office of the People's Counsel in the Public
investigation he is hereby empowered to issue subpoena or
Service Commission. The people's Counsel shall have two
subpoena duces tecum.
assistants and such number of employees as may be
necessary to perform the functions hereinafter specified.
The People's Counsel and his assistants shall be appointed

Aimee Nono Calo [Transportation Law] Page 67


The People's Counsel is authorized to call upon and obtain (2) Applications for the extension of time covering
such assistance as he may deem necessary in the a period of thirty days for the registration of motor
performance of his duties from any officer or employee of vehicles previously authorized by the Commission.
any department, bureau, office, agency, or instrumentality
of the government including corporations owned, (c) The charge of thirty pesos for the filing of other
controlled or operated by the government. (As amended applications by any public service operator not specifically
by Rep. Act No. 178.) provided for in the preceding paragraphs of this section
other than motions of a temporary or incidental character:
Section 39. Provided, however, That fifteen pesos only shall be
collected for each certificate of public convenience or
Any preceding in any court of the Philippines directly certificate of public convenience and necessity in diploma
affecting an order of the Commission or to which the form issued to a public service operator.
Commission is a party, shall have preference over all other
civil proceedings pending in such court, except election (d) For annual reimbursement of the expenses incurred by
cases. the Commission for the supervision and regulation of the
operations of motor vehicle services:
CHAPTER VI
(1) For each automobile, ten pesos.
FEES
(2) For each motor vehicle, truck, or trailer of less
Section 40. than two tons gross transportation capacity, ten pesos.

The Commission is authorized and ordered to charge and (3) For each motor vehicle, truck, or trailer of two
collect from any public service or applicant, as the case tons or more, but less than three tons gross transportation
may be, the following fees as reimbursement of its capacity, twenty pesos.
expenses in the authorization, supervision and/or
regulation of public services: (4) For each motor vehicle, truck, or trailer of
three tons or more but less than four tons gross
(a) The charge of fifty pesos for the registration of: transportation capacity, thirty pesos.

(1) Applications under the provisions of Section (5) Motor vehicles, trucks, trailers or buses of four
sixteen (a), (b), (c), and (d), and twenty (a), (b) (c), (e), (f), tons or more gross capacity shall pay at the rate of ten
and (h): Provided however, That in case of transportation pesos per ton gross. The fees provided in paragraphs (d)
services an additional filing fee of five pesos shall be and (e) hereof shall be paid on or before September
charged for each additional unit or vehicle in excess of five thirtieth of each year with a penalty of fifty per centum in
units or vehicles applied for: And provided, finally, That case of delinquency: Provided, further, That if the fees or
no filing fee shall be collected for the reduction of rates if any balance thereof are not paid within sixty days from the
the same does not alter or modify in any way the basic said date, the penalty shall be increased by one per centum
rates of the schedule. for every month thereafter of delinquency: Provided,
however, That motor vehicles registered in the Motor
(2) Applications for the approval or modification Vehicles Office after September thirtieth shall be exempt
of maximum rates under Section fourteen. from payment for said year.
(b) Thirty pesos shall be collected from any operator of (e) For annual reimbursement of the expenses
land transportation for the registration of: incurred by the Commission in the supervision of other
public services and/or in the regulation or fixing of their
(1) Applications under Section seventeen (f).
rates, twenty centavos for each one hundred pesos or

Aimee Nono Calo [Transportation Law] Page 68


fraction thereof, of the capital stock subscribed or paid, or public services. (As amended by Com. Act No. 454 and
if no shares have been issued, of the capital invested, or of RA No. 3792, approved June 22, 1963.)
the property and equipment, whichever is higher.
CHAPTER VII
(f) For the issue or increase of capital stock,
twenty centavos for each one hundred pesos or fraction GENERAL AND TRANSITORY PROVISIONS
thereof, of the increased capital.
Section 41.
(g) For each permit authorizing the increase of
equipment, the installation of new units or authorizing the A substantial compliance with the requirements of this Act
increase of capacity. or the extension of means or general shall be sufficient to give effect to all the rules, orders, acts
extension in the services, twenty centavos for each one and regulations of the Commission and they shall not be
hundred pesos or fraction of the additional capital declared inoperative, illegal, or void for any omission of a
necessary to carry out the permit. technical nature in respect thereto.

(h) For the inspection or certification made in the Section 42.


meter laboratory of the Commission or each apparatus or
Copies of all official documents and orders filled or
meter used by any public service, four pesos, and for
deposited in the office of the Commission, certified by
examination made outside the meter laboratory of the
either of the commissioners, or by the secretary to be true
Commission, the additional expenses as may be incurred in
copy of the original, under the seal of the Commission
making the examination shall also be paid.
shall be evidence in like manner as the originals in all
(i) For certification of copies of official documents courts of the Philippines.
in the files of the Commission, fifty centavos plus fifty
Section 43.
centavos for each page or folio so certified.
The Commission created under this Act shall succeed the
This section shall not be applicable to the Republic of the
Commission created under Act numbered thirty-one
Philippines, nor to its instrumentalities.
hundred and eight in the dispatch, hearing, and
Aside from the appropriations for the Commission under determination of all pending matters before the latter; and
the annual General Appropriation Act, any unexpended shall take charge of its archives, books, furniture,
balance of the fees collected by the Commission under this equipment, and other properties of whatsoever nature.
section shall be constituted receipts automatically
Section 44.
appropriated each year, and together with any surplus in
the standardizing meter laboratory revolving fund under In addition to the sum appropriated for the former
Commonwealth Act Numbered Three hundred forty-nine, commission under Act numbered forty-one hundred and
shall be disbursed by the Public Service Commissioner in thirty-two, the General Appropriation Act for nineteen
accordance with special budgets to be approved by the hundred and thirty-six, the sum of six thousand seven
Department of Justice, the Budget Commission and the hundred and sixty-eight pesos and thirty-four centavos is
Office of the President of the Philippines for additional hereby appropriated out of any funds in the Philippines
needed personal services, maintenance and operating Treasury not otherwise; and in addition to the sum
expenses, acquisition of urgently needed vehicles, furniture appropriated under Act numbered thirty-eight, the General
and equipment, maintenance of an adequate reference Appropriation Act for nineteen hundred and thirty-seven,
library, acquisition of a lot and building for the the sum of twenty-three thousand six hundred and ten
Commission, and other expenses necessary for efficient pesos, or so much thereof as may be necessary, is hereby
administration and effective supervision and regulation of appropriated, out of any funds in the Philippines Treasury

Aimee Nono Calo [Transportation Law] Page 69


not otherwise appropriated, for carrying out the purposes Scope of Act. - The provisions of this Act shall control, as
of this Act. far as they apply, the registration and operation of motor
vehicles and the licensing of owners, dealers, conductors,
Section 45. drivers, and similar matters.

If, any reason, any section, subsection, sentence, clauses or ARTICLE II


terms of this Act is held to the unconstitutional such
decision shall not affect the validity of the other provisions Definitions
of this Act.
Section 3.
Section 46.
Words and phrases defined. - As used in this Act:
Act numbered thirty-two hundred and forty-seven and Act
numbered thirty-five hundred and eighteen shall continue (a) "Motor Vehicle" shall mean any vehicle propelled by
in force and effect; but all provisions of Act numbered any power other than muscular power using the public
thirty-one hundred and eight and amendments thereof, highways, but excepting road rollers, trolley cars, street-
and all other acts or parts or acts inconsistent with the sweepers, sprinklers, lawn mowers, bulldozers, graders,
provisions of this Act are hereby repealed. fork-lifts, amphibian trucks, and cranes if not used on
public highways, vehicles which run only on rails or tracks,
Section 47. and tractors, trailers and traction engines of all kinds used
exclusively for agricultural purposes. Trailers having any
This Act shall take effect upon its approval. number of wheels, when propelled or intended to be
propelled by attachment to a motor vehicle, shall be
Approved: November 7, 1936 classified as separate motor vehicle with no power rating.
7) Land Transportation and Traffic Code (RA (b) "Passenger automobiles" shall mean all pneumatic-tire
4136) vehicles of types similar to those usually known under the
following terms: touring car, command car, speedster,
AN ACT TO COMPILE THE LAWS RELATIVE
sports car, roadster, jeep, cycle, car (except motor wheel
TO LAND TRANSPORTATION AND TRAFFIC
and similar small outfits which are classified with
RULES, TO CREATE A LAND
motorcycles), coupe, landaulet, closed car, limousine,
TRANSPORTATION COMMISSION AND FOR
cabriolet, and sedan. Motor vehicles with changed or
OTHER PURPOSES
rebuilt bodies, such as jeepneys, jitneys, or station wagons,
CHAPTER I using a chassis of the usual pneumatic-tire passenger
automobile type, shall also be classified as passenger
PRELIMINARY PROVISIONS ARTICLE automobile, if their net allowable carrying capacity, as
determined by the Commissioner of Land Transportation,
ARTICLE I does not exceed nine passengers and if they are not used
primarily for carrying freight or merchandise. The
Title and Scope of Act distinction between "passenger truck" and "passenger
automobile" shall be that of common usage: Provided,
Section 1. That a motor vehicle registered for more than nine
passengers shall be classified as "truck": And Provided,
Title of Act. - This Act shall be known as the "Land
further, That a "truck with seating compartments at the
Transportation and Traffic Code."
back not used for hire shall be registered under special "S"
classifications. In case of dispute, the Commissioner of
Section 2.

Aimee Nono Calo [Transportation Law] Page 70


Land Transportation shall determine the classification to (j) "Highways" shall mean every public thoroughfare,
which any special type of motor vehicle belongs. public boulevard, driveway, avenue, park, alley and
callejon, but shall not include roadway upon grounds
(c) "Articulated vehicle" shall mean any motor vehicle with owned by private persons, colleges, universities, or other
a trailer having no front axle and so attached that part of similar institutions.
the trailer rests upon motor vehicle and a substantial part
of the weight of the trailer and of its load is borne by the (k) "The Commissioner of Land Transportation or his
motor vehicle. Such a trailer shall be called as "semi- deputies" shall mean the actual or acting chief of the Land
trailer." Transportation Commission or such representatives,
deputies, or assistants as he may, with the approval of the
(d) "Driver" shall mean every and any licensed operator of Secretary of Public Works and Communications, appoint
a motor vehicle. or designate in writing for the purpose contemplated by
this Act.
(e) "Professional driver" shall mean every and any driver
hired or paid for driving or operating a motor vehicle, (l) "Parking or parked", for the purposes of this Act, shall
whether for private use or for hire to the public. Any mean that a motor vehicle is "parked" or "parking" if it has
person driving his own motor vehicle for hire is a been brought to a stop on the shoulder or proper edge of a
professional driver. highway, and remains inactive in that place or close thereto
for an appreciable period of time. A motor vehicle which
(f) "Owner" shall mean the actual legal owner of a motor properly stops merely to discharge a passenger or to take
vehicle, in whose name such vehicle is duly registered with in a waiting passenger, or to load or unload a small
the Land Transportation Commission. quantity of freight with reasonable dispatch shall not be
considered as "parked", if the motor vehicle again moves
The "owner" of a government-owned motor vehicle is the
away without delay.
head of the office or the chief of the Bureau to which the
said motor vehicle belongs. (m) "Tourist" shall mean a foreigner who travels from
place to place for pleasure or culture.
(g) "Dealer" shall mean every person, association,
partnership, or corporation making, manufacturing, ARTICLE III
constructing, assembling, remodeling, rebuilding, or setting
up motor vehicles; and every such entity acting as agent for Administration of Act
the sale of one or more makes, styles, or kinds of motor
vehicles, dealing in motor vehicles, keeping the same in Section 4.
stock or selling same or handling with a view to trading
same. Creation of the Commission.

(h) "Garage" shall mean any building in which two or more (a) There is created under the Department of Public Works
motor vehicles, either with or without drivers, are kept and Communications an office which shall be designated
ready for hire to the public, but shall not include street and known as the Land Transportation Commission,
stands, public service stations, or other public places composed of one Commissioner and one Deputy
designated by proper authority as parking spaces for motor Commissioner, who shall be vested with the powers and
vehicles for hire while awaiting or soliciting business. duties hereafter specified. Whenever the word
"Commission" is used in this Act, it shall be deemed to
(i) "Gross weight" shall mean the measured weight of a mean the Land Transportation Commission, and whenever
motor vehicle plus the maximum allowable carrying the word "Commissioner" is used in this Act, it shall be
capacity in merchandise, freight and/or passenger, as taken to mean the Commissioner or Deputy
determined by the Commissioner of Land Transportation. Commissioner. The Commissioner and the Deputy

Aimee Nono Calo [Transportation Law] Page 71


Commissioner shall be natural-born citizens and residents therewith, the following powers and duties, in addition to
of the Philippines, and they shall be appointed by the those mentioned elsewhere in this Act:
President of the Philippines, with the consent of the
Commission on Appointments of the Congress of the (1) With the approval of the Secretary of Public
Philippines: Provided, however, That the present Works and Communications, to issue rules and regulations
Administrator, Assistant Administrator and the personnel not in conflict with the provisions of this Act, prescribing
of the Motor Vehicles Office shall continue in office the procedure for the examination, licensing and bonding
without the necessity of reappointment. of drivers; the registration and re-registration of motor
vehicles, transfer of ownership, change of status; the
(b) The Commissioner and Deputy Commissioner shall replacement of lost certificates, licenses, badges, permits or
hold office until removed in accordance with the number plates; and to prescribe the minimum standards
provisions of the Revised Administrative Code. and specifications including allowable gross weight,
allowable length, width and height or motor vehicles,
(c) The Commissioner shall receive an annual distribution of loads, allowable loads on tires, change of
compensation of twelve thousand pesos and the Deputy tire sizes, body design or carrying capacity subsequent to
Commissioner, an annual compensation of ten thousand registration and all other special cases which may arise for
four hundred pesos. The Commissioner shall be assisted which no specific provision is otherwise made in this Act.
by one head executive assistant (MV regulation adviser or
chief), one administrative officer, one registration (2) To compile and arrange all applications,
regulation chief, one inspection, examination and licensing certificates, permits, licenses, and to enter, note and record
regulation chief, one law and traffic enforcement thereon transfers, notifications, suspensions, revocations,
regulation chief, one provincial regulation chief, one utility or judgments of conviction rendered by competent courts
and property regulation chief, one accounting officer, one concerning violations of this Act, with the end in view of
internal chief auditor, and one personnel officer, who shall preserving and making easily available such documents and
receive an annual compensation of nine thousand pesos records to public officers and private persons properly and
each; eight land transportation regional directors who shall legitimately interested therein.
receive an annual compensation of eight thousand four
hundred pesos each and eight land transportation assistant (3) To give public notice of the certificates,
regional directors, who shall receive an annual permits, licenses and badges issued, suspended or revoked
compensation of seven thousand pesos each and ten and/or motor vehicles transferred and/or drivers bonded
assistant regulation chiefs, who shall receive an annual under the provisions of this Act.
compensation of seven thousand pesos each.
(4) The Commissioner of Land Transportation,
(d) The Commission shall have its offices in Quezon City with the approval of the Secretary of Public Works and
where the present Motor Vehicle Office is located, and Communications, may designate as his deputy and agent
shall establish a regional branch office each in Tuguegarao any employee of the Land Transportation Commission, or
(Cagayan), Baguio City, Pasig (Rizal), Lipa City, San such other government employees as he may deem
Fernando (La Union), Naga City, Cebu City, Iloilo City, expedient to assist in the carrying out the provisions of this
Cagayan de Oro City, and Davao City, to be headed by a Act.
regional director who will have immediate administration,
supervision and control over activities and administration (5) The Commissioner of Land Transportation
of the Commission in the respective regions. and his deputies are hereby authorized to make arrest for
violations of the provisions of this Act in so far as motor
The Commissioner shall be responsible for the vehicles are concerned; to issue subpoena and subpoena
administration of this Act and shall have, in connection duces tecum to compel the appearance of motor vehicle
operators and divers and/or other persons or conductors;

Aimee Nono Calo [Transportation Law] Page 72


and to use all reasonable means within their powers to Duty to Register, Reports, Applications,
secure enforcement of the provisions of this Act. Classifications

(6) The Commissioner of Land Transportation or Section 5.


his deputies may at any time examine and inspect any
motor vehicle to determine whether such motor vehicle is All motor vehicles and other vehicles must be registered.
registered, or is unsightly, unsafe, overloaded, improperly
marked or equipped, or otherwise unfit to be operated (a) No motor vehicle shall be used or operated on or upon
because of possible excessive damage to highways, bridges any public highway of the Philippines unless the same is
and/or culverts. properly registered for the current year in accordance with
the provisions of this Act.
(7) The Philippine Constabulary and the city and
municipal police forces are hereby given the authority and (b) Any registration of motor vehicles not renewed on or
the primary responsibility and duty to prevent violations of before the date fixed for different classifications, as
this Act, and to carry out the police provisions hereof provided hereunder shall become delinquent and invalid:
within their respective jurisdiction: Provided, That all
1. For hire motor vehicles - on or before the last
apprehensions made shall be submitted for final
working day of February.
disposition to the Commissioner and his deputies within
twenty-four hours from the date of apprehension. 2. Privately-owned motor vehicles - from March
one to the last working day of May.
(8) All cases involving violations of this Act shall
be endorsed immediately by the apprehending officer to 3. All other motor vehicles - from June one to the
the Land Transportation Commission. Where such last working day of June; except when the plates of such
violations necessitate immediate action, the same shall be motor vehicles are returned to the Commission in Quezon
endorsed to the traffic court, city or municipal court for City or to the Office of the Motor Vehicles Registrar in the
summary investigation, hearing and disposition, but in all provincial or city agency of the Commission on or before
such cases, appropriate notices of the apprehensions and the last working day of December of the year of issue.
the dispositions thereof shall be given to the
Commissioner of Land Transportation by the law- (c) Dealer's reports - The Commissioner of Land
enforcement agency and the court concerned. Transportation shall require dealers to furnish him with
such information and reports concerning the sale,
Notation of all such dispositions shall be entered in the importation, manufacture, number of stocks, transfer or
records, and copy shall be mailed to the owner and to the other transactions affecting motor vehicles as may be
driver concerned. necessary for the effective enforcement of the provisions
of this Act.

(d) Change of motor number prohibited. - No repair or


change in the motor vehicle involving the exchange,
elimination, effacing, or replacing of the original or
registered serial or motor number as stamped or imprinted,
CHAPTER II shall be allowed, and any motor vehicle with a trace of
having its motor number altered or tampered with shall be
REGISTRATION OF MOTOR VEHICLES refused registration or re-registration, unless such is
ARTICLE I satisfactorily explained and approved by the
Commissioner.

Aimee Nono Calo [Transportation Law] Page 73


(e) Encumbrances of motor vehicles. - Mortgages, circumstances and shall not be used to solicit, accept, or be
attachments, and other encumbrances of motor vehicles, used to transport passengers or freight for pay.
in order to be valid, must be recorded in the Land
Transportation Commission and must be properly Laborers necessary to handle freight on board private
recorded on the face of all outstanding copies of the trucks may ride on such trucks: Provided, That seats shall
certificates of registration of the vehicle concerned. not be installed in the rear compartment thereof and that
only such number of laborers, not exceeding ten, as may
Cancellation or foreclosure of such mortgages, be needed to handle the kind of freight carried, shall ride
attachments, and other encumbrances shall likewise be on the truck: Provided, further, That the combined weight
recorded, and in the absence of such cancellation, no of cargo and passengers does not exceed the registered net
certificate of registration shall be issued without the capacity of the truck.
corresponding notation of mortgage, attachment and/or
other encumbrances. For the purpose of this section, a vehicle habitually used to
carry freight not belonging to the registered owner thereof,
Records of encumbrances of motor vehicles shall be kept or passengers not related by consanguinity or affinity
by the Land Transportation Commission in chronological within the fourth civil degree to such owner, shall be
sequence and shall contain, among other things, the time, conclusively presumed to be "for hire."
date and number of the entry in a "Book of Motor
Vehicles" referring to the creation, cancellation or No person shall be allowed to register as private truck any
foreclosure of the aforesaid mortgages, attachments or to truck not actually and reasonably necessary to carry out his
other encumbrances. duly licensed business or legitimate occupation or industry
regularly paying taxes.
The Land Transportation Commission shall collect a fee of
five pesos for every annotation of a mortgage, attachment (d) Public utility automobiles; (e) public utility trucks; (f)
and/or other encumbrances, or cancellation thereof. taxis and auto-calesas; (g) garage automobiles; (h) garage
trucks; (i) hire trucks: and (j) trucks owned by contractors
Section 6. and customs brokers and customs agents. Application for
registration under these classifications shall be
Application and payments for registration. - Applications accompanied by a certificate of public convenience or a
and payments for registration shall be made either special permit issued by the Public Service Commission,
personally or by registered mail, and the date of the and motor vehicles registered under these classifications
cancellation of the postage stamps of envelopes containing shall be subject to the Public Service Law , rules and
money order or check shall be taken as the date of the regulations, as well as the provisions of this Act.
application and/or payment for registration: Provided,
That the application is properly prepared and the payment (k) Undertakes
for registration is sufficient as required by law .
(l) Dealers - Registrations under this classification are
Section 7. intended to cover generally and successively all the motor
vehicles imported or handled by dealers for sale. Motor
Registration Classification. - Every motor vehicle shall be vehicles registered under the dealer's classification shall,
registered under one of the following described under no circumstances, be employed to carry passengers
classifications: or freight in the dealer's business, or for hire. Such vehicles
shall be operated under this classification only for the
(a) private passenger automobiles; (b) private trucks; and purpose of transporting the vehicle itself from the pier or
(c) private motorcycles, scooters, or motor wheel factory to the warehouse or sales room or for delivery to a
attachments. Motor vehicles registered under these prospective purchaser or for test or demonstration.
classifications shall not be used for hire under any

Aimee Nono Calo [Transportation Law] Page 74


(m) Government automobiles; (n) government trucks; and 1,501 to 2,000 kilos 135.00
(o) government motorcycles. Motor vehicles owned by the
Government of the Philippines or any of its political 2,001 kilos and above 180.00
subdivisions shall be registered under these classifications.
Motor vehicles owned by government corporations, by The factory or shipping weight of a private automobile
government employees or by foreign governments shall shall be obtained from the Red Book edited by the
not be registered under this classification. National Market Report, Inc., of the United States of
America: Provided, further, That in the case of
(p) Tourists bringing their own motor vehicles to the automobiles with altered, changed or rebuilt bodies, the
Philippines may, without registering such motor vehicles, weight as obtained: by actual weighing shall be considered
use the same during but not after ninety days of their the vehicles weight: Provided, furthermore, That the
sojourn: Provided, That the motor vehicle displays the increase registration fees herein prescribed shall not apply
number plates for the current year of some other country to jeeps and jeepneys for private use or for hire and the
or state, and said number plates as well as the name and fees hereof shall be those prescribed for them before the
address (permanent and temporary) of the owner thereof approval of this Act.
are registered in the Land Transportation Commission
prior to the operation of the motor vehicle. The registered passenger capacity of passenger
automobiles operated for hire or for private use shall be
If such tourist remain in the Philippines longer than ninety determined as follows:
days, the motor vehicle shall not be operated unless
registered in accordance with this Act and the 1. For each adult passenger, a horizontal
corresponding registration fees paid. rectangular area, including seat and feet space, not less
than thirty-five centimeters wide and sixty centimeters
(q) Special. The Commissioner of Land Transportation long, except in the front seat, which shall allow an area
may, in his discretion, allow the registration under this fifty centimeters wide for the operator.
classification of motor vehicles which do not conform to
the foregoing described regular classification. 2. For each half passenger, a horizontal
rectangular area, including seat and feet spaces, not less
ARTICLE II that seventeen and a half centimeters wide by sixty
centimeters long, provided, that each continuous row of
Registration Fees seats shall not be allowed to have more that one-half
passenger.
Section 8.
(b) Private motor trucks, passenger buses and trailers with
Schedule of registration fees. - Except as otherwise pneumatic rubber tires, the sum of five pesos for every
specifically provided in this Act, each application for hundred kilograms of maximum allowable gross weight or
renewal of registration of motor vehicles shall be fraction thereof.
accompanied by an annual registration fee in accordance
with the following schedule: (c) Private motor trucks, passenger buses and trailers with
solid rubber tires or with part-solid and partpneumatic
(a) Private automobiles with pneumatic rubber tires, an rubber tires, the sum of seven pesos for every hundred
amount based on their respective shipping weight or kilograms of maximum allowable gross weight or fraction
factory weight as indicated in the following schedule: thereof.

1,000 kilos or less P75.00 (d) Private motorcycles and scooters of two or three
wheels and bicycles with motor attachments, the sum of
1,000 to 1,500 kilos 100.00 thirty pesos.

Aimee Nono Calo [Transportation Law] Page 75


(e) The fee for registration of motor vehicles for hire shall from payment of regular registration fees, and the owner
be sixty percent more than the fee prescribed for private of the vehicles concerned shall pay four pesos for each set
motor vehicles of the same category. of such number plates.

(f) The fee for registration of diesel-consuming vehicles (j) The maximum allowable gross weight of a motor truck,
shall be fifty percent more than that of vehicles using passenger bus, or trailer, upon which to compute the
motor fuel other than diesel oil. The fee for registration of registration fee thereof, shall be determined by the
motor vehicles for hire shall be sixty percent more than the Commissioner of Land Transportation. He shall, from
fees prescribed for private motor vehicles. time to time as the need of the service may require,
prepare, subject to the approval of the Secretary of Public
(g) No regular registration fees shall be charged for the Works and Communications, suitable tables of maximum
general registration of motor vehicles contemplated under allowable loads per wheel for different sizes kinds of tires.
the dealer's classification: Provided, That the
Commissioner of Land Transportation shall provide (k) The registration fees provided in this Act for trucks
appropriate dealer's number plates corresponding to the may be payable in two equal installment, the first to be
classification of vehicles hereinbelow described, and paid on or before the last working day of February if for
registration fee for every set of such dealer's number plates hire, and in March if private; and the second to be paid on
shall be in accordance with the following schedule of rates; or before the last working day of August: Provided, That
the fifty per cent penalty shall apply only to the unpaid
Two hundred pesos for each truck or trailer; balance of the remaining period of delinquency.

One hundred pesos for each passenger automobile; and Section 9.

Twenty pesos for each motorcycle and the like. Permissible weights and dimensions of vehicles in
highways traffic.
(h) Registration under the "Government Motor Vehicle"
classification shall be free of charge, upon request of the (a) The maximum gross weight and measurement of motor
chief of bureau or office concerned. vehicles, unladen or with load, permissible on public
highways shall be as specified hereunder, subject to such
(i) Motor vehicles not intended to be operated or used regulations as the Commissioner with the approval of the
upon any public highway, or which are operated on Secretary of Public Works and Communications, may
highways not constructed or maintained by the promulgate, from time to time, as the conditions of the
Government, or are intended not to be used or operated at public highways may warrant and the needs of the service
all, shall be exempt from payment of the registration fees may require.
provided in this Act, but shall each pay an annual
recording and service fee of fifteen pesos: Provided, Permissible maximum weights:
however, That no refund, credit for, or reimbursement of
registration fees or part thereof shall be made to any owner 1. Per most heavily loaded wheel three thousand six
on account of the discontinuance of the use or operation hundred kilograms;
of a motor vehicle subsequent to the payment of such
registration fees: Provided, further, That in the event 2. Per most heavily loaded axle eight thousand kilograms;
motor vehicles exempted under this section shall be found
operated on any public highways, the regular registration 3. Per most heavily loaded axle group (the two axles of the
fees and surcharges shall be collected in addition to group being at least one meter and less than two meters
whatever penalties may be imposed for violation of this apart) fourteen thousand five hundred kilograms.
Act. The Commissioner of Land Transportation shall
provide distinctive number plates for vehicles exempted

Aimee Nono Calo [Transportation Law] Page 76


An axle weight shall be the total weight transmitted to the (b) To operate a motor vehicle the size of which exceeds
road by all the wheels the centers of which can be included the limit of permissible dimensions specified in paragraph
between the parallel transverse vertical planes one meter (b) of Section nine hereof.
apart extending across the full width of the vehicles.
(c) To operate a motor vehicle with any part of the load
No provincial, city or municipal authority shall enact or extending beyond the projected width of the vehicle.
enforce any ordinance or resolution regulating or
prescribing the maximum gross weight of any motor (d) To pull two trailers behind a motor vehicle.
vehicle.
(e) For any other special authority relating to the use of
(b) No motor vehicle operating as a single unit shall exceed vehicles, not otherwise specifically provided herein.
the following dimensions:
Section 11.
Overall width two and five-tenths meters
Additional fees. - In addition to the fees elsewhere
Overall height four meters provided in this Act, for each change of registration, from
private to for hire or vice-versa; revision of gross weight
Overall length: rating, change of tire size; transfer of ownership;
replacement of a lost registration certificate, number plate,
Freight vehicles with two axles ten meters driver's license or permit; badge; preparation of affidavit or
certified copy of records, or for any similar circumstances
Passenger vehicles with two axles eleven meters requiring the issue, revision, or reissue of a certificate of
registration, driver's license, badge, permit, or other
Vehicles with three or more axles fourteen meters
document, a fee of two pesos shall be collected.
(c) No motor vehicle and/or trailer combination shall
The replacement of a lost or utterly spoiled certificate,
exceed eighteen meters in overall projected length,
number plate, license, badge or permit shall render the
including any load carried on such vehicle and trailer.
original invalid.
(d) No articulated vehicles shall be allowed to draw or pull
In case of request in writing for certification of data or
a trailer and no vehicle already drawing a trailer shall draw
facts involving two or more vehicles, a fee of five pesos a
another.
page or part thereof shall be collected for each
Section 10. certification.

Special permits, fees for. - The Commissioner with the Section 12.
approval of the Secretary of Public Works and
Fee for original registration for part of year. - If any
Communications, shall issue regulations and schedules of
application for the original registration is made during the
additional fees under which special permits may be issued
first quarter of a calendar year, the total annual fee for the
in the discretion of the Commissioner or his deputies for
year shall be paid, if made during the second quarter,
each of the following special cases, without which special
three-fourths of the annual fee for that year shall be paid, if
permit no vehicles shall be operated on the public
made during the third quarter, one half of the annual fee
highways:
shall be paid, and if made during the fourth quarter, one-
(a) To operate a motor vehicle or trailer outfit with wheel, fourth of the annual fee shall be paid.
axle, or axle group loads in excess of the limits fixed in
subsection (a) of Section nine hereof or in any regulation
issued by the Commissioner.

Aimee Nono Calo [Transportation Law] Page 77


Nothing in this section shall be construed as allowing Suspension of registration certificate. - If on inspection, as
quarterly renewals of registrations in order to avoid provided in paragraph (6) of Section four hereof, any
payment of fees in advance for the entire year. motor vehicle is found to be unsightly, unsafe, overloaded,
improperly marked or equipped, or otherwise unfit to be
Section 13. operated, or capable of causing excessive damage to the
highways, or not conforming to minimum standards and
Payment of taxes upon registration. - No original specifications, the Commissioner may refuse to register the
registration of motor vehicles subject to payment of taxes, said motor vehicle, or if already registered, may require the
customs duties or other charges shall be accepted unless number plates thereof to be surrendered to him, and upon
proof of payment of the taxes due thereon has been seventy-two hours notice to the owner of the motor
presented to the Commission. vehicle, suspend such registration until the defects of the
vehicle are corrected and/or the minimum standards and
ARTICLE III
specifications fully complied with.
Registration Certificates, Records, Number Plates
Whenever it shall appear from the records of the
Section 14. Commission that during any twelve-month period more
than three warnings for violations of this Act have been
Issuance of certificates of registration. - A properly given to the owner of a motor vehicle, or that the said
numbered certificate of registration shall be issued for each owner has been convicted by a competent court more than
separate motor vehicle after due inspection and payment once for violation of such laws, the Commissioner may, in
of corresponding registration fees. his discretion, suspend the certificate of registration for a
period not exceeding ninety days and, thereupon, shall
Section 15. require the immediate surrender of the number plates.

Use and authority of certificate of registration. Whenever a motor vehicle is found to be underweight the
owner thereof shall pay the difference in the registration
(a) The said certificate shall be preserved and carried in the fees corresponding to the shortage in weight plus a fifty
car by the owner as evidence of the registration of the per cent surcharge, and until such payment is made, the
motor vehicle described therein, and shall be presented certificate of registration of the motor vehicle concerned
with subsequent applications for re-registration, transfer of shall be suspended by the Commissioner.
ownership, or recording of encumbrances: Provided, That
in lieu of the certificate of registration a true copy or After two such suspension, re-registration of the vehicle
photostat thereof may be carried in the motor vehicle. concerned for one year may be denied.

(b) The certificate of registration issued under the The Commissioner shall notify the owner of the motor
provisions of this Act for any motor vehicle shall, while vehicle of any action taken by him under this section.
the same is valid and effective and has not been suspended
or revoked, be the authority for the operation of such Section 17.
motor vehicle.
Number plates, preparation, preparation and issuance of .
(c) No motor vehicle shall be operated on the public
highways in a manner which would place it under a (a) The Commissioner shall cause number plates to be
classification requiring the payment of a larger registration prepared and issued to owners of motor vehicles and
fee than that stated in the certificate of registration. trailers registered under this Act, charging a fee of four
pesos for each pair including the numerals indicating the
Section 16. year of registry: Provided, however, That in case no
number plates are available, the Commissioner or his

Aimee Nono Calo [Transportation Law] Page 78


deputies may issue, without charge, a written permit OPERATION OF MOTOR VEHICLE
temporarily authorizing the operation of any motor
vehicles with other means of identification: Provided, ARTICLE I
further, That all motor vehicles exempted from payment
of registration fees, motor vehicles for hire, and privately- License to Drive Motor Vehicles
owned motor vehicles shall bear plates so designed and
Section 19.
painted with different colors to distinguish one class from
another: Provided, furthermore, That the plates of motor Duty to procure license. - Except as otherwise specifically
vehicles exempted from payment of registration fees shall provided in this Act, no person shall operate any motor
be permanently assigned to such motor vehicles during vehicle without first procuring a license to drive a motor
their entire lifetime while exempted from payment of the vehicle for the current year, nor while such license is
fees: And, provided, finally, That the owner thereof shall delinquent, invalid, suspended or revoked.
return such plates to the Land Transportation Commission
within a period of seven working days after such owner The license shall be carried by the driver at all times when
has lost his exemption privilege or has transferred the operating a motor vehicle, and shall be shown and/or
vehicle to a non-exempt owner. surrendered for cause and upon demand to any person
with authority under this Act to confiscate the same.
(b) In case the design of the number plate is such that the
numerals indicating the year of registry are on a detachable Section 20.
tag, the Commissioner or his deputies may, in their
discretion, issue the said tag only for subsequent re- License for enlisted men operating Government motor
registration charging a fee of one peso for each tag issued. vehicles. - Enlisted men operating a motor vehicle owned
by the Government of the Philippines shall be licensed in
Section 18. accordance with the provisions of this Act, but no license
or delinquency fees shall be collected therefrom. All
Use of number plates. - At all times, every motor vehicle licenses so issued shall bear the words "For Government
shall display in conspicuous places, one in front and one in Vehicles Only" plainly marked or stamped in red ink
the rear thereof, the said number plates. across the face thereof.
The number plates shall be kept clean and cared for, and A license so marked or stamped shall authorize the holder
shall be firmly affixed to the motor vehicle in such a thereof to operate a private-owned motor vehicle.
manner as will make it entirely visible and always legible.
Section 21.
Except in the case of dealer's number plates which may be
used successively on various motor vehicles in stock, no Operation of motor vehicles by tourists. - Bona fide tourist
person shall transfer number plates from motor vehicle to and similar transients who are duly licensed to operate
another. motor vehicles in their respective countries may be allowed
to operate motor vehicles during but not after ninety days
No dealer's number plate shall be used on any motor of their sojourn in the Philippines.
vehicle after said vehicle has been sold and delivered to a
purchaser, and no dealer shall allow such dealer's number If any accident involving such tourist or transient occurs,
plates to be used on any motor vehicle after its sale and which upon investigation by the Commissioner or his
delivery to a purchaser. deputies indicates that the said tourist or transient is
incompetent to operate motor vehicles, the Commissioner
shall immediately inform the said tourist or transient in
writing that he shall no longer be permitted to operate a
CHAPTER III
motor vehicle.
Aimee Nono Calo [Transportation Law] Page 79
After ninety days, any tourist or transient desiring to Use of driver's license and badge. - Every license issued
operate motor vehicles shall pay fees and obtain and carry under the provisions of this Act to any driver shall entitle
a license as hereinafter provided. the holder thereof, while the same is valid and effective
and not suspended or revoked, to operate the motor
Section 22. vehicles described in such license: Provided, however, That
every licensed professional driver, before operating a
Driver's license, fees, examination. - Every person who public service motor vehicle registered under classifications
desires personally to operate any motor vehicle shall file an (d) to (j) inclusive of Section seven hereof, shall secure
application to the Commissioner or his deputies for a from the Commissioner, upon payment of the sum of one
license to drive motor vehicles: Provided, however, That peso, a driver's badge which he shall, at all times while so
no person shall be issued a professional driver's license operating a motor vehicle, display in plain sight on the
who is suffering from highly contagious diseases, such as, band of his cap or on his coat or shirt. Such driver's badge
advanced tuberculosis, gonorrhea, syphilis, and the like. shall be of metal with a plainly readable number assigned
to the licensee stamped thereon.
Each such application except in the case of enlisted men
operating government-owned vehicles, shall be It shall be unlawful for any duly licensed driver to transfer,
accompanied by a fee of five pesos, and shall contain such lend or otherwise allow any person to use his license for
information respecting the applicant and his ability to the purpose of enabling such person to operate a motor
operate motor vehicles, as may be required by the vehicle.
Commission.
No owner of a motor vehicle shall engage, employ, or hire
The Commissioner or his deputies shall also ascertain that any person to operate such motor vehicle, unless the
the applicant's sight and hearing are normal, and may in person sought to be employed is a duly licensed
their discretion, require a certificate to that effect, signed professional driver.
by a reputable physician.
Section 25.
An examination or demonstration to show any applicant's
ability to operate motor vehicles may also be required in Driver's records. - Any driver who changes his address
the discretion of the Commissioner or his deputies. shall, within fifteen days, notify the Commissioner in
writing of his new address, name and address of his new
Section 23. employer, the number of the motor vehicle he is employed
to operate, and such other information as the
Issuance of driver's license. - If, after such examination,
Commissioner may require.
the Commissioner or his deputy believes that the applicant
possesses the necessary qualifications and is proficient in Section 26.
the operation of motor vehicles, a license shall be issued to
such applicant upon payment of five pesos, but prior to Renewal of license. - Any license not renewed on or before
the issuance of said license, the applicant shall furnish the last working day of the month when the applicant was
three copies of his recent photograph to be securely born shall become delinquent and invalid, except when the
attached to the license, and two copies to be filed and kept license is surrendered to the Commissioner or his deputies
as provided by this Act. All driver's licenses shall bear the before the last working day of the month of his birth in
signature and right-hand thumb print of the licensee. order to avoid payment of the delinquency fees.

The fee for renewal of delinquent license shall be five


pesos in addition to the basic fee as hereinabove
Section 24. prescribed.

Aimee Nono Calo [Transportation Law] Page 80


Every applicant for renewal of license to operate any violations of any provisions of this Act or of any regulation
motor vehicle shall present to the Commissioner, in issued by the Commissioner or any municipal or city
person or by mail or messenger, the license issued to the ordinance relating to motor vehicle traffic not in conflict
applicant for the previous year, together with the proper with any of the provisions of this Act, the Commissioner
fee of five pesos and, in the case of professional may, in his discretion, revoke or suspend the license of
chauffeurs, three copies of a readily-recognized such driver for a period not exceeding two years.
photograph of the applicant, which photograph shall have
been taken not exceeding three years prior to the date of (c) The license suspended or revoked under the provisions
applicant for renewal. of subsections (a) and (b) of this section shall not be
reinstated unless the driver has furnished a bond in
Lost license. - In case the license for the previous year has accordance with Section twenty-nine of this Act and only
been lost or cannot be produced, the applicant shall obtain after the Commissioner has satisfied himself that such
a duplicate in accord with Section eleven of this Act, on driver may again safely be permitted to operate a motor
penalty of refusal, by the Commissioner or his deputies, to vehicle.
renew the license: Provided, however, That the
Commissioner or his deputies may, in their discretion (d) A decision of the Commissioner revoking or refusing
accept in lieu of the previous years license, the duly signed the reinstatement of a license under the provisions of this
and sworn statement of an operator to the effect that he Section may be appealed to the Secretary of Public Works
has not operated any motor vehicle in the Philippines and Communications.
during the year or years to which no license was issued in
his name. Section 28.

The Commissioner and his deputies are hereby authorized Driver's bond. - The Commissioner before reinstating any
to administer the oath in connection with such affidavit. driver's license which has been suspended or revoked
under the provisions of the preceding section or of any
Section 27. provisions of this Act, may require such driver to post a
bond in the sum of one thousand pesos conditioned upon
Suspension, revocation of driver's license. the satisfaction and payment of any claim which may be
filed or of any execution which may be issued against such
(a) The Commissioner may suspend for a period not driver in any case wherein said driver may be held
exceeding three months or, after hearing, revoke any answerable while operating motor vehicles. The bond
driver's license issued under the provisions of this Act, and required in this section shall be in such form as to render
may order any such license to be delivered to him sureties liable at least for a period of not less than one year
whenever he has reason to believe that the holder thereof nor more than three years: Provided, however, That upon
is an improper person to operate motor vehicles, or in written application to the Commissioner for release from
operating or using a motor vehicle in, or as an accessory such a bond, the Commissioner may after revoking or
to, the commission of any crime or act which endangers suspending the driver's license, authorize the release of the
the public. Any deputy of the Commissioner may, for the bondsmen from further responsibility thereunder:
same cause, suspend for a period not exceeding three Provided, further, That should the Commissioner decide
months any driver's license issued under the provisions of not to revoke the license of a driver who has been
this Act: Provided, That such suspension may be appealed convicted of homicide through reckless imprudence, or of
to the Commissioner who may, after reviewing the case, the violation of the speed limit or of reckless driving at
confirm, reverse or modify the action taken by such least three times within a twelve-month period, the said
deputy. driver shall post a bond in the sum of not less than two
thousand pesos, conditioned upon the payment of any
(b) Whenever during any twelve-month period a driver claim which may be filed or any execution which may be
shall have been convicted at least three times for the

Aimee Nono Calo [Transportation Law] Page 81


issued against him in any case wherein said driver may be ARTICLE II
held answerable while operating motor vehicles.
Illegal Use of Licenses, Number Plates, Etc.
Section 29.
Section 31.
Confiscation of driver's licenses. - Law enforcement and
peace officers duly designated by the Commissioner shall, Imitation and false representations. - No person shall make
in apprehending any driver for violations of this Act or of or use attempt to make or use a driver's license, badge,
any regulations issued pursuant thereto, or of local traffic certificate of registration, number plate, tag, or permit in
rules and regulations, confiscate the license of the driver imitation or similitude of those issued under this Act, or
concerned and issue a receipt prescribed and issued by the intended to be used as or for a legal license, badge,
Commission therefor which shall authorize the driver to certificate, plate, tag or permit, or with intent to sell or
operate a motor vehicle for a period not exceeding otherwise dispose of the same to another. No person shall
seventy-two hours from the time and date of issue of said falsely or fraudulently represent as valid and in force any
receipt. The period so fixed in the receipt shall not be driver's license, badge, certificate, plate, tag or permit
extended, and shall become invalid thereafter. Failure of issued under this Act which is delinquent or which has
the driver to settle his case within fifteen days from the been revoked or suspended.
date of apprehension will cause suspension and revocation
of his license. No person shall, knowingly and with intent to deceive,
make one or more false or fraudulent statements in an
Section 30. application for the registration of vehicles, or for a driver's
license.
Student-driver's permit. - Upon proper application and the
payment of three pesos, the Commissioner or his deputy ARTICLE III
may issue student-driver's permits, valid for six months to
persons not under eighteen years of age, who desire to Passenger and Freight
learn to operate motor vehicles. No application for driver's
Section 32.
license shall be received unless the applicant has
undergone instruction in the operation of motor vehicles Exceeding registered capacity. - No person operating any
for at least a month and has a valid student-driver's permit: vehicle shall allow more passenger or more freight or cargo
Provided, however, That any person who has a license to in his vehicle than its registered carrying capacity. In the
operate vehicles in other countries may, upon presentation case of public utility trucks or buses, the conductor shall be
of appropriate evidence of such license, be allowed to pay exclusively liable for violations of this section or of Section
for a driver's license without presenting a student driver's thirty-two, letter (c) hereof: Provided, That the conductor,
permit. before being employed by any public service operator,
shall get a permit or license from the Commission and pay
A student driver who fails in the examination shall
five pesos annually for said license or permit issued in his
continue as a student driver for at least one additional
favor, and the same is renewable on or before the last
month. No student driver shall operate a motor vehicle
working day of the month of his birth, attaching a readily
unless accompanied by a duly licensed driver.
recognizable photograph and after presentation of a
The licensed driver acting as instructor to the student medical certificate of fitness of applicant.
driver shall likewise be responsible and liable for any
Passenger trucks may be allowed to construct any cargo
violation of the provisions of this Act and for any injury or
carrying device at the rear or at the side of the truck,
damage done by the motor vehicle on account or as a
subject to the approval of the Commissioner: Provided,
result of its operation by a student under his direction.

Aimee Nono Calo [Transportation Law] Page 82


however, That the total weight of the device, including the in case of hydraulic line failure affecting the braking
cargo, shall not exceed one hundred kilos. efficiency of any of the four wheels at least either the front
or rear wheels shall retain normal braking capabilities. In
(b) Carrying of passengers and freight on top of vehicles. - the absence of such dual braking system every motor
No person operating a motor vehicle shall allow any vehicle with four or more wheels shall be provided with
passenger to ride on the cover or top of such vehicles: safety valve devices of such design and make so that failure
Provided, however, That subject to such conditions as may of the hydraulic braking system of the vehicle because of
be contained in permits that may be issued by the leakage in the line of other parts of the system will not
Commissioner, baggage or freight may be carried on the affect all wheels but rather render at all times effective the
top of a truck provided the weight thereof does not exceed braking power of either the two front wheels or the two
twenty kilos per square meter and is distributed in such a rear wheels when brakes are applied. This requirement,
manner as not to endanger the passengers or stability of however, does not apply to motor vehicles equipped with
the truck. pneumatic braking system.

(c) Riding on running boards. - No driver shall permit any (b-1) Horns. - Every motor vehicle shall be provided with
person to ride on the running board, step board, or a horn or signalling devise in good working order:
mudguard of his motor vehicle for any purpose except to Provided, however, That no horn or signalling device
make repair or adjustment in the motor or to collect fares. emitting an exceptionally loud, startling, or disagreeable
sound shall be installed or used on any motor vehicle.
Section 33.
All authorized emergency vehicles, such as ambulance and
Passenger or freight capacity marked on vehicle. - All police cars and fire wagons used for emergency calls shall
passengers automobiles for hire shall have the registered be equipped with a bell, siren, or exhaust whistle of a type
passenger capacity plainly and conspicuously marked on approved by the Commissioner, and no such device shall
both sides thereof, in letters and numerals not less than be installed or used in any other vehicle.
five centimeters in height.
No vehicle not classified as a motor vehicle under this Act
All motor trucks, whether for passenger or freight, private, shall be equipped with a horn or signaling device similar to
or for hire, shall have the registered passenger gross and the horn customarily used on motor vehicles.
net weight capacities plainly and conspicuously marked on
both sides thereof, in letters and numerals not less than (c) Headlights. - Every motor vehicle of more than one
five centimeters in height. meter of projected width, while in use on any public
highway shall bear two headlights, one on each side, with
ARTICLE IV white or yellowish light visible from the front, which, not
later than one-half hour after sunset and until at least one-
Accessories of Motor Vehicles
half four before sunrise and whenever weather conditions
Section 34. so require, shall both be lighted.

(a) Tires of motor vehicles. - No motor vehicle with Additional lamps and light may be carried, but no red
metallic tires shall be operated upon any public highway, lights shall be visible forward or ahead of the vehicle.
and solid tires whenever used shall be of sufficient Trucks, buses, trailers, and other similar vehicles must
thickness to prevent the metal rims thereof from coming carry, while in use on any public highway during night-
in direct contact with the road. time, colored riding lights on each of the four corners not
more than ten centimeters from the top.
(b) Brakes - Every motor vehicle with four or more wheels
shall be provided with dual hydraulic brake system so that All motor vehicles shall be equipped with devices for
varying the intensity of light, and the driver must dim the

Aimee Nono Calo [Transportation Law] Page 83


headlights or tilt the beams downward whenever the (i) Use of red flag. - Whenever the load of any vehicle
vehicle is being operated on well-lighted streets within the extends more than one meter beyond the bed or body
limits of cities, municipalities, and thickly populated barrios thereof, there shall be displayed at every projecting end of
or districts, or whenever such vehicle meets another such load a red flag not less than thirty centimeters both in
vehicle on any public highway. length and width, except that during the hours fixed under
subsection (c), there shall be displayed, in lieu of the
(d) Taillights. - Every motor vehicle and trailer shall, during required red flags, red lights visible at least fifty meters
the above-mentioned hours, also bear on each side in the away.
rear a lamp showing a red light visible at least one hundred
meters from the rear of the vehicle and a lamp throwing a (j) Mufflers. - Every motor vehicle propelled by an internal
white light upon the number plate issued for such vehicle. combustion engine shall be equipped with a muffler, and
whenever said motor vehicle passes through a street of any
(e) Stop lights. - Every motor vehicle shall be equipped at city, municipality, or thickly populated district or barrio,
the rear with at least one lamp which shall throw a the muffler shall not be cut out or disconnected. No motor
sustained bright red light visible under all conditions, even vehicle shall be operated in such a manner as to cause it to
under bright sunlight, when the brakes are applied. Each emit or make any unnecessary or disagreeable odor, smoke
bus, truck, trailer or similar vehicle shall be equipped, as its or noise.
stop light at or near its rear center, with a lamp at least
twelve centimeters in diameter with the word "stop" CHAPTER IV
inscribed in the center.
TRAFFIC RULES
(f) Motorcycle and other vehicle lights. - Every motor
vehicle of less than one meter of projected width shall be ARTICLE I
subject to the preceding provisions of this section, except
that one headlight and one taillight shall be required. No Speed Limit and Keeping to the Right
signal light shall be necessary. Section 35.
Additional lamps may be carried provided they comply Restriction as to speed.
with the preceding provisions of this section.
(a) Any person driving a motor vehicle on a highway shall
Every motor vehicle, or whatever style, kind, make, drive the same at a careful and prudent speed, not greater
character, or nature, when upon a highway during the nor less than is reasonable and proper, having due regard
hours above-mentioned, whether in motion or not, shall for the traffic, the width of the highway, and of any other
have one or more lights so arranged that the same shall be condition then and there existing; and no person shall
visible at least fifty meters from the front and the rear of drive any motor vehicle upon a highway at such a speed as
such vehicle. to endanger the life, limb and property of any person, nor
at a speed greater than will permit him to bring the vehicle
(g) Lights when parked or disabled. - Appropriate parking to a stop within the assured clear distance ahead.
lights or flares visible one hundred meters away shall be
displayed at a corner of the vehicle whenever such vehicle (b) Subject to the provisions of the preceding paragraph,
is parked on highways or in places that are not well-lighted the rate of speed of any motor vehicle shall not exceed the
or is placed in such manner as to endanger passing traffic. following:

(h) Windshield wiper. - Every motor vehicle shall be MAXIMUM Passengers Cars Motor trucks
equipped with a mechanically or electrically operated ALLOWABLE and Motorcycle and buses
device for wiping off raindrops or other moisture from its SPEEDS
front windshield.

Aimee Nono Calo [Transportation Law] Page 84


(3) Any driver bringing a wounded or sick person
1. On open 80 km. per hour 50 km per hour
for emergency treatment to a hospital, clinic, or any other
country roads,
with no "blinds similar place;
corners" not
(4) The driver of a motor vehicle belonging to the
closely bordered
by habitations. Armed Forces while in use for official purposes in times of
riot, insurrection or invasion;
2. On "through 40 km per hour 30 km per hour
streets" or (5) The driver of a vehicle, when he or his
boulevards, clear passengers are in pursuit of a criminal;
of traffic, with
no " blind (6) A law-enforcement officer who is trying to
corners," when overtake a violator of traffic laws; and
so designated.
3. On city and 30 km per hour 30 km per hour (7) The driver officially operating a motor vehicle
municipal of any fire department, provided that exemption shall not
streets, with be construed to allow unless or unnecessary fast driving of
light traffic, drivers aforementioned.
when not
designated Section 36.
"through
streets". Speed limits uniform throughout the Philippines. - No
provincial, city or municipal authority shall enact or
4. Through 20 km per hour 220 km per hour
enforce any ordinance or resolution specifying maximum
crowded streets,
allowable speeds other than those provided in this Act.
approaching
intersections at
Section 37.
"blind corners,"
passing school
Driving on right side of highway. - Unless a different
zones, passing
course of action is required in the interest of the safety and
other vehicles
which are the security of life, person or property, or because of
stationery, or for unreasonable difficulty of operation in compliance
similar herewith, every person operating a motor vehicle or an
dangerous animal-drawn vehicle on a highway shall pass to the right
circumstances. when meeting persons or vehicles coming toward him, and
to the left when overtaking persons or vehicles going the
same direction, and when turning to the left in going from
one highway to another, every vehicle shall be conducted
(c) The rates of speed hereinabove prescribed shall not to the right of the center of the intersection of the
apply to the following: highway.

(1) A physician or his driver when the former Section 38.


responds to emergency calls;
Classification of highways. - Public highways shall be
(2) The driver of a hospital ambulance on the way properly classified for traffic purposes by the provincial
to and from the place of accident or other emergency; board, municipal board or city council having jurisdiction
over them, and said provincial board, municipal board or

Aimee Nono Calo [Transportation Law] Page 85


city council shall provide appropriate signs therefor, (b) The driver of a vehicle shall not overtake or pass
subject to the approval of the Commissioner. It shall be another vehicle proceeding in the same direction, when
the duty of every provincial, city and municipal secretary to approaching the crest of a grade, not upon a curve in the
certify to the Commissioner the names, locations, and highway, where the driver's view along the highway is
limits of all "through streets" designated as such by the obstructed within a distance of five hundred feet ahead,
provincial board, municipal board or council. except on a highway having two or more lanes for
movement of traffic in one direction where the driver of a
ARTICLE II vehicle may overtake or pass another vehicle: Provided,
That on a highway within a business or residential district,
Overtaking and Passing a Vehicle, and Turning at having two or more lanes for movement of traffic in one
Intersections direction, the driver of a vehicle may overtake or pass
another vehicle on the right.
Section 39.
(c) The driver of a vehicle shall not overtake or pass any
Overtaking a vehicle. - The driver of any motor vehicle
other vehicle proceeding in the same direction, at any
overtaking another vehicle proceeding in the same
railway grade crossing, not at any intersection of highways
direction shall pass at a safe distance to the left thereof,
unless such intersection or crossing is controlled by traffic
and shall not again drive to the right side of the highway
signal, or unless permitted to do so by a watchman or a
until safety clear of such overtaken vehicle except that on a
peace officer, except on a highway having two or more
highway, within a business or residential district, having
lanes for movement of traffic in one direction where the
two or more lanes for the movement of traffic in one
driver of a vehicle may overtake or pass another vehicle on
direction, the driver of a vehicle may overtake and pass
the right. Nothing in this section shall be construed to
another vehicle on the right. Nothing in this section shall
prohibit a driver overtaking or passing upon the right
be construed to prohibit a driver overtaking and passing,
another vehicle which is making or about to make a left
upon the right, another vehicle which is making or about
turn.
to make a left turn.
(d) The driver of a vehicle shall not overtake or pass, or
Section 40.
attempt to pass, any other vehicle, proceeding in the same
Driver to give way to overtaking vehicle. - The driver of a direction, between any points indicated by the placing of
vehicle about to be overtaken and passed by another official temporary warning or caution signs indicating that
vehicle approaching from the rear shall give way to the men are working on the highway.
overtaking vehicle on suitable and audible signal being
(e) The driver of a vehicle shall not overtake or pass, or
given by the driver of the overtaking vehicle, and shall not
attempt to overtake or pass, any other vehicle proceeding
increase the speed of his vehicle until completely passed by
in the same direction in any "no-passing or overtaking
the overtaking vehicle.
zone."
Section 41.

Restrictions on overtaking and passing.

(a) The driver of a vehicle shall not drive to the left side of
the center line of a highway in overtaking or passing
another vehicle proceeding in the same direction, unless
such left side is clearly visible, and is free of oncoming
traffic for a sufficient distance ahead to permit such ARTICLE III
overtaking or passing to be made in safety.

Aimee Nono Calo [Transportation Law] Page 86


Right of Way and Signals ambulances when such vehicles are operated on official
business and the drivers thereof sound audible signal of
Section 42. their approach.

Right of way. (c) The driver of a vehicle entering a "through highway" or


a "stop intersection" shall yield the right of way to all
(a) When two vehicles approach or enter an intersection at vehicles approaching to either direction on such "through
approximately the same time, the driver of the vehicle on highway": Provided, That nothing in this subsection shall
the left shall yield the right of way to the vehicle on the be construed as relieving the driver of any vehicle being
right, except as otherwise hereinafter provided. The driver operated on a "through highway" from the duty of driving
of any vehicle traveling at an unlawful speed shall forfeit with due regard for the safety of vehicles entering such
any right of way which he might otherwise have hereunder. "through highway" nor as protecting the said driver from
the consequence of an arbitrary exercise off such right of
(b) The driver of a vehicle approaching but not having
way.
entered an intersection, shall yield the right of way to a
vehicle within such intersection or turning therein to the Section 44.
left across the line of travel of such firstmentioned vehicle,
provided the driver of the vehicle turning left has given a Signals on starting, stopping or turning.
plainly visible signal of intention to turn as required in this
Act. (a) The driver of any vehicle upon a highway, before
starting, stopping or turning from a direct line, shall first
(c) The driver of any vehicle upon a highway within a see that such movement can be made in safety, and if any
business or residential district shall yield the right of way to pedestrian may be affected by such movement, shall give a
a pedestrian crossing such highway within a crosswalk, clearly audible signal by sounding the horn, and whenever
except at intersections where the movement of traffic is the operation of any other vehicle approaching or
being regulated by a peace officer or by traffic signal. following may be affected by such movement, shall give a
Every pedestrian crossing a highway within a business or signal plainly visible to the driver of such other vehicles of
residential district, at any point other than a crosswalk shall the intention to make such movement.
yield the right of way to vehicles upon the highway.
(b) The signal herein required shall be given by means of
(d) The driver of a vehicle upon a highway shall bring to a extending the hand and arm beyond the left side of the
full stop such vehicle before traversing any "through vehicle, or by an approved mechanical or electrical signal
highway" or railroad crossing: Provided, That when it is device.
apparent that no hazard exists, the vehicle may be slowed
down to five miles per hour instead of bringing it to a full ARTICLE IV
stop.
Turning and Parking
Section 43.
Section 45.
Exception to the right of way rule.
Turning at intersections.
(a) The driver of a vehicle entering a highway from a
private road or drive shall yield the right of way to all (a) The drive of a vehicle intending to run to the right at an
vehicles approaching on such highway. intersection shall approach such intersection in the lane for
traffic nearest to the right-hand side of the highway and, in
(b) The driver of a vehicle upon a highway shall yield the turning, shall keep as close as possible to the right-hand
right of way to police or fire department vehicles and curb or edge of the highway.

Aimee Nono Calo [Transportation Law] Page 87


(b) The driver of a vehicle intending to turn to the left shall Miscellaneous Traffic Rules
approach such intersection in the lane for traffic to the
right of and nearest to the center line of the highway, and, Section 48.
in turning, shall pass to the left of the center of the
intersection, except that, upon highways laned for traffic Reckless driving. - No person shall operate a motor vehicle
and upon one-way highways, a left turn shall be made from on any highway recklessly or without reasonable caution
the left lane of traffic in the direction in which the vehicle considering the width, traffic, grades, crossing, curvatures,
is proceeding. visibility and other conditions of the highway and the
conditions of the atmosphere and weather, or so as to
(c) For the purpose of this section, the center of the endanger the property or the safety or rights of any person
intersection shall mean the meeting point of the medial or so as to cause excessive or unreasonable damage to the
lines of the highways intersecting one another, except highway.
when it is occupied by a monument, grass plot or any
permanent structure, other than traffic control device. Section 49.

Section 46. Right of way for police and other emergency vehicles. -
Upon the approach of any police or fire department
Parking prohibited in specified places. - No driver shall vehicle, or of an ambulance giving audible signal, the driver
park a vehicle, or permit it to stand, whether attended or of every other vehicle shall immediately drive the same to a
unattended, upon a highway in any of the following places: position as near as possible and parallel to the right-hand
edge or curb of the highway, clear of any intersection of
(a) Within an intersection highways, and shall stop and remain in such position,
unless otherwise directed by a peace officer, until such
(b) On a crosswalk vehicle shall have passed.

(c) Within six meters of the intersection of curb lines. Section 50.

(d) Within four meters of the driveway entrance to and fire Tampering with vehicles. - No unauthorized person shall
station. sound the horn, handle the levers or set in motion or in
any way tamper with a damage or deface any motor
(e) Within four meters of fire hydrant vehicle.
(f) In front of a private driveway Section 51.
(g) On the roadway side of any vehicle stopped or parked Hitching to a vehicle. - No person shall hang on to, ride
at the curb or edge of the highway on, the outside or the rear end of any vehicle, and no
person on a bicycle, roller skate or other similar device,
(h) At any place where official signs have been erected
shall hold fast to or hitch on to any moving vehicle, and no
prohibiting parking.
driver shall knowingly permit any person to hang on to or
Section 47. ride, the outside or rear end of his vehicle or allow any
person on a bicycle, roller skate or other similar device to
Parked vehicle. - Whenever a motor vehicle is parked hold fast or hitch to his vehicle.
unattended on any highway, the driver thereof must turn
off the ignition switch and stop the motor and notch Section 52.
effectively the hand brake.

ARTICLE V

Aimee Nono Calo [Transportation Law] Page 88


Driving or parking on sidewalk. - No person shall drive or PENAL AND OTHER PROVISIONS
park a motor vehicle upon or along any sidewalk, path or
alley not intended for vehicular traffic or parking. ARTICLE I

Section 53. Penalties

Driving while under the influence of liquor or narcotic Section 56.


drug. - No person shall drive a motor vehicle while under
the influence of liquor or narcotic drug. Penalty for violation. - The following penalties shall be
imposed for violations of this Act:
Section 54.
(a) For registering later than seven days after acquiring title
Obstruction of traffic. - No person shall drive his motor to an unregistered motor vehicle or after conversion of a
vehicle in such a manner as to obstruct or impede the registered motor vehicle requiring larger registration fee
passage of any vehicle, nor, while discharging or taking on than that for which it was originally registered, or for
passengers or loading or unloading freight, obstruct the renewal of a delinquent registration, the penalty shall be a
free passage of other vehicles on the highway. fine fifty per cent of the registration fees corresponding to
the portion of the year for which the vehicle is registered
Section 55. for use.

Duty of driver in case of accident. - In the event that any (b) For failure to sign driver's license or to carry same
accident should occur as a result of the operation of a while driving, twenty pesos fine.
motor vehicle upon a highway, the driver present, shall
show his driver's license, give his true name and address (c) Driving a vehicle with a delinquent or invalid driver's
and also the true name and address of the owner of the license, fifty pesos fine.
motor vehicle.
(d) Driving a motor vehicle with delinquent, suspended or
No driver of a motor vehicle concerned in a vehicular invalid registration, or without registration or without the
accident shall leave the scene of the accident without proper license plate for the current year, three hundred
aiding the victim, except under any of the following pesos fine.
circumstances:
(e) Driving a motor vehicle without first securing a driver's
1. If he is in imminent danger of being seriously license, three hundred pesos fine.
harmed by any person or persons by reason of the
accident; (f) Driving a motor vehicle while under the influence of
liquor or narcotic drug, a fine of not less than two hundred
2. If he reports the accident to the nearest officer pesos nor more than five hundred pesos, or imprisonment
of the law; or of not more than three months, or both, at the discretion
of the Court.
3. If he has to summon a physician or nurse to aid
the victim. (g) Violation of Section thirty-two, thirty-four (a), (b) and
(b-1), thirty-five and forty-six a fine not exceeding one
hundred pesos: Provided, however, That in the case of
violation of Section 34 (b) the vehicle or vehicles affected
may not be allowed to operate unless the requirements
provided in this section are complied with.
CHAPTER V

Aimee Nono Calo [Transportation Law] Page 89


(h) Violations of Sections forty-nine, fifty and fifty-two, a death or injury of any person, the motor vehicle operator
fine not exceeding fifty pesos. at fault shall, upon conviction, be punished under the
provisions of the Revised Penal Code.
(i) For making, using or attempting to make or use a
driver's license, badge, certificate or registration, number Section 57.
plate, tag or permit in imitation or similitude of those
issued under this Act, or intended to be used as or for a Punishment for other offenses. - The conviction of any
legal license, badge, certificate, plate, tag or permit or with person for any offense under this Act shall not bar his
intent to sell or otherwise dispose of the same to another, prosecution for any other offense which may have been
or false or fraudulently represent as valid and in force any committed by such person concurrently with the
driver's license, badge, certificate, plate, tag or permit commission of the offense of which he was convicted or
issued under this Act which is delinquent or which has in doing the act or series of acts which constituted the
been suspended or revoked, a fine of not exceeding three offense of which he was convicted.
hundred pesos.
Section 58.
(j) For using private passenger automobiles, private trucks,
private motorcycles, and motor wheel attachments for hire, Duty of clerks of court. - It is hereby made the duty of
in violation of Section seven, subsections (a), (b), and (c), clerks of the Court of First Instance, the City Court of
of this Act, a fine of two hundred pesos and suspension of Municipal Court trying traffic violation cases to certify to
driver's license for a period of three months for the first the Commission the result of any case, whether criminal or
conviction; a fine of three hundred pesos and six months civil, involving violations of any provision of this Act or of
imprisonment for the second conviction; and an other laws and ordinances relating to motor vehicles. Said
imprisonment of one year and permanent revocation of certificate shall specifically contain the name of the driver
the driver's license for the third conviction. or owner of the vehicle involved, his address, the number
of his license and/or of the certificate or registration of his
(k) For permitting, allowing, consenting to, or tolerating vehicle, and the date thereof, and the offense of which he
the use of a privately-owned motor vehicle for hire in was convicted or acquitted.
violation of Section seven, subsections (a), (b), and (c), of
this Act, there shall be imposed upon the owner of the ARTICLE II
vehicle a fine of five hundred pesos and the certificate of
Collection of Fees, Taxes and Fines, Liens, Allotment
registration shall be suspended for a period of three
of Funds
months for the first conviction, and an increase of one
hundred pesos in the fine and one month's suspension of Section 59.
the registration for each subsequent conviction.
(a) Collection of fees; national and local taxes; toll fees. -
(l) For violation of any provisions of this Act or The collection of all fees, taxes, and fines, under the
regulations promulgated pursuant hereto, not hereinbefore provisions of this Act shall be made in accordance with
specifically punished, a fine of not less than ten or more regulations to be prescribed by the Commissioner and
than fifty pesos shall be imposed. approved jointly by the Auditor General.
(m) In the event an offender cannot pay any fine imposed (b) No taxes or fees other than those prescribed in this Act
pursuant to the provisions of this Act, he shall be made to shall be imposed for the registration or operation or on the
undergo subsidiary imprisonment as provided for in the ownership of any motor vehicle, or for the exercise of the
Revised Penal Code. profession of chauffeur, by any municipal corporation, the
provisions of any city charter to the contrary
(n) If, as the result of negligence or reckless or
notwithstanding: Provided, however, That any provincial
unreasonable fast driving, any accident occurs resulting in

Aimee Nono Calo [Transportation Law] Page 90


board, city or municipal council or board or other "Philippine Highway Act of 1953": Provided, however,
competent authority may enact and collect such reasonable That the amount necessary to maintain and equip the Land
and equitable toll fees for the use of such bridges and Transportation Commission but not to exceed fifteen per
ferries, within their respective jurisdiction, as may be cent of the total collections during any one year, shall be
authorized and approved by the Secretary of Public Works set aside for the purpose.
and Communications, and also for the use of such public
roads, as may be authorized by the President of the ARTICLE III
Philippines upon recommendation of the Secretary of
Public Works and Communications, but in none of these Final Provisions
cases shall any toll fees be charged or collected until and Section 62.
unless the approved schedule of tolls has been posted
legibly in a conspicuous place at such toll station. No provincial board, city or municipal board or council
shall enact or enforce any ordinance or resolution in
Section 60. conflict with the provisions of this Act, or prohibiting any
deputy or agent of the Commission to enforce this Act
The lien upon motor vehicles. - Any balance of fees for
within their respective territorial jurisdiction and the
registration, re-registration or delinquent registration of a
provisions of any charter to the contrary notwithstanding.
motor vehicle, remaining unpaid and all fines imposed
upon any vehicle owner, shall constitute a first lien upon Section 63.
the motor vehicle concerned.
Repeal of laws and ordinances. - Act Numbered Thirty-
The Commission is hereby vested with authority to issue a nine hundred ninety-two, as amended, and all laws,
warrant of constructive or actual distraint or and levy to executive orders, ordinances, resolutions, regulations, or
any owner of motor vehicle who has any balance of fees parts thereof in conflict with the provisions of this Act are
for registration, re-registration or delinquent registration of repealed: Provided, however, That nothing contained in
a motor vehicle remaining unpaid, which upon demand by this Act shall be construed as limiting or superseding any
the Commissioner of the Land Transportation provisions of the Public Service Act, as amended, with
Commission or any of his deputies executing such warrant, respect to the control by the Public Service Commission of
the owner of the said vehicle shall surrender same at the motor vehicles operating as public service, nor shall any
time demanded, except when the attachment or execution provision of this Act be construed as limiting or abridging
is under any judicial process. Any owner who fails or the powers conferred upon and exercised by the Public
refuses to surrender any of such property or vehicle not so Service Commission with regards to the control and
surrendered shall be punished by a fine not exceeding the supervision of the operation of such motor vehicles as
amount of the fees (including penalties and interests, if public service.
any) for the collection of which such warrant has been
issued, together with the costs and interests, if any, from Section 64.
the time of such surrender. In addition, such owner shall Appropriation. - To carry out effectively the provisions of
punished by a fine of not more than three hundred pesos this Act, the amount of two hundred fifty thousand pesos
or an imprisonment not more than six months, or both. is hereby appropriated out of the fees collected under this
Act, in addition to the appropriations provided in the
Section 61.
General Appropriations Act, for the expense of this
Disposal of monies collected. - Monies collected under the Commission for the fiscal year beginning July first,
provisions of this Act shall be deposited in a special trust nineteen hundred and sixty-four, to June thirtieth, nineteen
account in the National Treasury to constitute the hundred and sixty-five: Provided, however, That any
Highway Special Fund, which shall be apportioned and savings in the appropriations of the Motor Vehicles Office
expended in accordance with the provisions of the for the fiscal year beginning July first, nineteen hundred

Aimee Nono Calo [Transportation Law] Page 91


and sixty-three, to June thirtieth, nineteen hundred and operated by government entities or government-owned or
sixty-four shall likewise be available for this purpose. controlled corporations shall be regulated by the
Commission in the same way as privatelyowned public
Section 65. services, but certificates of public convenience or
certificates of public convenience and necessity shall not
Separability. - If any provisions of this Act or the
be required of such entities or corporations: And provided,
application thereof to any person or circumstance is held
further, That it shall have no authority to require
invalid, the remainder of the Act, and the application of
steamboats, motor ships and steamship lines, whether
such provision to other persons or circumstances, shall not
privately-owned, or owned or operated by any
be affected thereby.
Government controlled corporation or instrumentality to
Section 66. obtain certificate of public convenience or to prescribe
their definite routes or lines of service.
Effectivity. - This Act shall take effect upon its approval.
(b) The term "public service" includes every person that
Approved: June 20, 1964 now or hereafter may own, operate, manage, or control in
the Philippines, for hire or compensation, with general or
8) 1987 Philippine Constitution
limited clientele, whether permanent, occasional or
Article XII, Section 11 accidental, and done for general business purposes, any
common carrier, railroad, street railway, traction railway,
No franchise, certificate, or any other form of sub-way motor vehicle, either for freight or passenger, or
authorization for the operation of a public utility shall be both with or without fixed route and whether may be its
granted except to citizens of the Philippines or to classification, freight or carrier service of any class, express
corporations or associations organized under the laws of service, steamboat or steamship line, pontines, ferries, and
the Philippines, at least sixty per centum of whose capital water craft, engaged in the transportation of passengers or
is owned by such citizens; nor shall such franchise, freight or both, shipyard, marine railways, marine repair
certificate, or authorization be exclusive in character or for shop, [warehouse] wharf or dock, ice plant, icerefrigeration
a longer period than fifty years. Neither shall any such plant, canal, irrigation system, gas, electric light, heat and
franchise or right be granted except under the condition power water supply and power, petroleum, sewerage
that it shall be subject to amendment, alteration, or repeal system, wire or wireless communications system, wire or
by the Congress when the common good so requires. The wireless broadcasting stations and other similar public
State shall encourage equity participation in public utilities services: Provided, however, That a person engaged in
by the general public. The participation of foreign agriculture, not otherwise a public service, who owns a
investors in the governing body of any public utility motor vehicle and uses it personally and/or enters into a
enterprise shall be limited to their proportionate share in special contract whereby said motor vehicle is offered for
its capital, and all the executive and managing officers of hire or compensation to a third party or third parties
such corporation or association must be citizens of the engaged in agriculture, not itself or themselves a public
Philippines. service, for operation by the latter for a limited time and
for a specific purpose directly connected with the
B. Concept of public utility & public service (Sec. 13, cultivation of his or their farm, the transportation,
Public Service Act) processing, and marketing of agricultural products of such
third party or third parties shall not be considered as
(a) The Commission shall have jurisdiction, supervision, operating a public service for the purposes of this Act.
and control over all public services and their franchises,
equipment, and other properties, and in the exercise of its (c) The word "person" includes every individual, co-
authority, it shall have the necessary powers and the aid of partnership, joint-stock company or corporation, whether
the public force: Provided, That public services owned or domestic or foreign, their lessees, trustees, or receivers, as

Aimee Nono Calo [Transportation Law] Page 92


well as any municipality, province, city, government-owned agreements with Filipino citizens, or corporations or
or controlled corporation, or agency of the Government of associations at least sixty per centum of whose capital is
the Philippines, and whatever other persons or entities that owned by such citizens. Such agreements may be for a
may own or possess or operate public services. (As period not exceeding twenty-five years, renewable for not
amended by Com. Act 454 and RA No. 2677) more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water
C. Constitutional limitations on operation of public rights for irrigation, water supply fisheries, or industrial
utilities (Art. XII, 1987 Philippine Constitution) uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
NATIONAL ECONOMY AND PATRIMONY
The State shall protect the nation's marine wealth in its
Section 1. archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to
The goals of the national economy are a more equitable
Filipino citizens.
distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services The Congress may, by law, allow small-scale utilization of
produced by the nation for the benefit of the people; and natural resources by Filipino citizens, as well as
an expanding productivity as the key to raising the quality cooperative fish farming, with priority to subsistence
of life for all, especially the under-privileged. fishermen and fishworkers in rivers, lakes, bays, and
lagoons.
The State shall promote industrialization and full
employment based on sound agricultural development and The President may enter into agreements with foreign-
agrarian reform, through industries that make full and owned corporations involving either technical or financial
efficient use of human and natural resources, and which assistance for large-scale exploration, development, and
are competitive in both domestic and foreign markets. utilization of minerals, petroleum, and other mineral oils
However, the State shall protect Filipino enterprises according to the general terms and conditions provided by
against unfair foreign competition and trade practices. law, based on real contributions to the economic growth
and general welfare of the country. In such agreements, the
In the pursuit of these goals, all sectors of the economy
State shall promote the development and use of local
and all regions of the country shall be given optimum
scientific and technical resources.
opportunity to develop. Private enterprises, including
corporations, cooperatives, and similar collective The President shall notify the Congress of every contract
organizations, shall be encouraged to broaden the base of entered into in accordance with this provision, within
their ownership. thirty days from its execution.
Section 2. Section 3.
All lands of the public domain, waters, minerals, coal, Lands of the public domain are classified into agricultural,
petroleum, and other mineral oils, all forces of potential forest or timber, mineral lands and national parks.
energy, fisheries, forests or timber, wildlife, flora and Agricultural lands of the public domain may be further
fauna, and other natural resources are owned by the State. classified by law according to the uses to which they may
With the exception of agricultural lands, all other natural be devoted. Alienable lands of the public domain shall be
resources shall not be alienated. The exploration, limited to agricultural lands. Private corporations or
development, and utilization of natural resources shall be associations may not hold such alienable lands of the
under the full control and supervision of the State. The public domain except by lease, for a period not exceeding
State may directly undertake such activities, or it may enter twenty-five years, renewable for not more than twenty-five
into co-production, joint venture, or production-sharing years, and not to exceed one thousand hectares in area.

Aimee Nono Calo [Transportation Law] Page 93


Citizens of the Philippines may lease not more than five Section 7.
hundred hectares, or acquire not more than twelve
hectares thereof, by purchase, homestead, or grant. Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals,
Taking into account the requirements of conservation, corporations, or associations qualified to acquire or hold
ecology, and development, and subject to the requirements lands of the public domain.
of agrarian reform, the Congress shall determine, by law,
the size of lands of the public domain which may be Section 8.
acquired, developed, held, or leased and the conditions
therefor. Notwithstanding the provisions of Section 7 of this
Article, a natural-born citizen of the Philippines who has
Section 4. lost his Philippine citizenship may be a transferee of
private lands, subject to limitations provided by law.
The Congress shall, as soon as possible, determine, by law,
the specific limits of forest lands and national parks, Section 9.
marking clearly their boundaries on the ground.
Thereafter, such forest lands and national parks shall be The Congress may establish an independent economic and
conserved and may not be increased nor diminished, planning agency headed by the President, which shall, after
except by law. The Congress shall provide for such period consultations with the appropriate public agencies, various
as it may determine, measures to prohibit logging in private sectors, and local government units, recommend to
endangered forests and watershed areas. Congress, and implement continuing integrated and
coordinated programs and policies for national
Section 5. development.

The State, subject to the provisions of this Constitution Until the Congress provides otherwise, the National
and national development policies and programs, shall Economic and Development Authority shall function as
protect the rights of indigenous cultural communities to the independent planning agency of the government.
their ancestral lands to ensure their economic, social, and
cultural well-being. Section 10.

The Congress may provide for the applicability of The Congress shall, upon recommendation of the
customary laws governing property rights or relations in economic and planning agency, when the national interest
determining the ownership and extent of ancestral domain. dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of
Section 6. whose capital is owned by such citizens, or such higher
percentage as Congress may prescribe, certain areas of
The use of property bears a social function, and all investments. The Congress shall enact measures that will
economic agents shall contribute to the common good. encourage the formation and operation of enterprises
Individuals and private groups, including corporations, whose capital is wholly owned by Filipinos.
cooperatives, and similar collective organizations, shall
have the right to own, establish, and operate economic In the grant of rights, privileges, and concessions covering
enterprises, subject to the duty of the State to promote the national economy and patrimony, the State shall give
distributive justice and to intervene when the common preference to qualified Filipinos.
good so demands.
The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in
accordance with its national goals and priorities.

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Section 11. Section 15.

No franchise, certificate, or any other form of The Congress shall create an agency to promote the
authorization for the operation of a public utility shall be viability and growth of cooperatives as instruments for
granted except to citizens of the Philippines or to social justice and economic development.
corporations or associations organized under the laws of
the Philippines, at least sixty per centum of whose capital Section 16.
is owned by such citizens; nor shall such franchise,
certificate, or authorization be exclusive in character or for The Congress shall not, except by general law, provide for
a longer period than fifty years. Neither shall any such the formation, organization, or regulation of private
franchise or right be granted except under the condition corporations. Government-owned or controlled
that it shall be subject to amendment, alteration, or repeal corporations may be created or established by special
by the Congress when the common good so requires. The charters in the interest of the common good and subject to
State shall encourage equity participation in public utilities the test of economic viability.
by the general public. The participation of foreign
Section 17.
investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in In times of national emergency, when the public interest so
its capital, and all the executive and managing officers of requires, the State may, during the emergency and under
such corporation or association must be citizens of the reasonable terms prescribed by it, temporarily take over or
Philippines. direct the operation of any privately-owned public utility or
business affected with public interest.
Section 12.
Section 18.
The State shall promote the preferential use of Filipino
labor, domestic materials and locally produced goods, and The State may, in the interest of national welfare or
adopt measures that help make them competitive. defense, establish and operate vital industries and, upon
payment of just compensation, transfer to public
Section 13.
ownership utilities and other private enterprises to be
The State shall pursue a trade policy that serves the general operated by the Government.
welfare and utilizes all forms and arrangements of
Section 19.
exchange on the basis of equality and reciprocity.
The State shall regulate or prohibit monopolies when the
Section 14.
public interest so requires. No combinations in restraint of
The sustained development of a reservoir of national trade or unfair competition shall be allowed.
talents consisting of Filipino scientists, entrepreneurs,
Section 20.
professionals, managers, high-level technical manpower
and skilled workers and craftsmen in all fields shall be The Congress shall establish an independent central
promoted by the State. The State shall encourage monetary authority, the members of whose governing
appropriate technology and regulate its transfer for the board must be natural-born Filipino citizens, of known
national benefit. probity, integrity, and patriotism, the majority of whom
shall come from the private sector. They shall also be
The practice of all professions in the Philippines shall be
subject to such other qualifications and disabilities as may
limited to Filipino citizens, save in cases prescribed by law.
be prescribed by law. The authority shall provide policy
direction in the areas of money, banking, and credit. It
shall have supervision over the operations of banks and
Aimee Nono Calo [Transportation Law] Page 95
exercise such regulatory powers as may be provided by law E. Concept of franchise and certificate of public
over the operations of finance companies and other convenience
institutions performing similar functions.
Franchise
Until the Congress otherwise provides, the Central Bank of
the Philippines operating under existing laws, shall  Grant or privilege from the sovereign power
function as the central monetary authority.
CPC
Section 21.
 Form of regulation through administrative
Foreign loans may only be incurred in accordance with law
agencies
and the regulation of the monetary authority. Information
on foreign loans obtained or guaranteed by the
Government shall be made available to the public. Not only Congress has the power to grant such
authorization but also specified agencies in the Executive
Section 22. Branch granted by law to issue such authorization
Acts which circumvent or negate any of the provisions of
this Article shall be considered inimical to the national
interest and subject to criminal and civil sanctions, as may Franchises issued by Congress are generally not required
be provided by law. before each and every public utility may operate

D. Regulatory Agencies The law has granted certain administrative agencies the
power to grant such licenses
1) Land Transportation Office (LTO);

2) Land Transportation Franchising and


When legislative franchise is necessary
Regulatory Board (LTFRB);
 Depends on the enabling law
3) Air Transportation Office (ATO);
 The law creating the administrative body may still
4) Bureau of Equipment (BOE); require a legislative franchise
 CPC not necessary for the issuance of a legislative
5) National Telecommunications Commission franchise
(NTC);  Example
o May be vested exclusively with the
6) National Electrification Administration Congress
(NEA);  Sec. 27 of RA 9316 EPIRA law
 Power to grant licenses
7) Energy Regulatory Commission (ERB);
in distribution of
8) National Water Resources Board (NWRC); electricity is vested
exclusively in the
9) Civil Aeronautics Board (CAB); and Congress
o May require both
10) Manila International Airport Authority (MIA)  Legislative franchise is necessary
before a CPC can be issued to

Aimee Nono Calo [Transportation Law] Page 96


operate radio and television
companies

Issuance of Certificate of Public Convenience

 Different from a Certificate of Public Convenience and


Necessity
o Prior issuance of municipal franchise is
required (CPC  not required)
 Basic rule regarding issuance of CPC
o PUBLIC SERVICE ACT
 Sec. 15 and 16(a)
 Basic rule regarding issuance of CPCN
o PUBLIC SERVICE ACT
 Sec 16 (b)

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