Transpo CASE DOCTRINES

FIRST REPORTING - GROUP 1
1. Munn v. Illinois, 94 U.S. 113 (1876)
When does the property become clothed with public interest?
Property does become clothed with a public interest when used in a manner to make it of public consequence and
affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest,
he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the
common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use,
but, so long as he maintains the use, he must submit to the control.
2. LUZON STEVEDORING CO., INC., and VISAYAN STEVEDORE TRANSPORTATION CO., vs. THE
PUBLIC SERVICES COMMISSION and THE PHILIPPINE SHIPOWNERS' ASSOCIATION, G.R. No.
L-5458, September 16, 1953
What is “Public Service” as defined in Public Service Law?
Section 13 (b) of the Public Service Law (Commonwealth Act No. 146) defines public service thus: The term
"public service" includes every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental,
and done for general business purpose any common carrier, railroad, street railway, traction railway, subway, motor
vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification,
freight or carrier service of any class, express service, steamboat, or steamship line, pontine, ferries, and small water
craft, engaged in the transportation of passengers and freight, shipyard, marine railway, marine repair shop,
warehouse, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, sewerage, gas, electric light,
hear and power, water supply and power, petroleum, sewerage system, telephone, wire or wireless telegraph system
and broadcasting radio stations.
It is not necessary, under this definition, that one holds himself out as serving or willing to serve the public in order
to be considered public service. It has been seen that public utility, even where the term is not defined by statute, is
not determined by the number of people actually served. Nor does the mere fact that service is rendered only under
contract prevent a company from being a public utility.
3. REPUBLIC OF THE PHILIPPINES VS. MERALCO, 391 SCRA 700
What is the legal basis and rationale for regulation?
The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes
prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property
is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject
to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the
owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation.
4. Albano v Reyes, 175 SCRA 264
Do Philippine Ports Authority has the power to award the Manila International Container Terminal contract
without a legislative franchise to the bidder?
Doctrine: Public utilities do not necessarily require a legislative franchise. Some admin agencies are authorized to
grant licenses for the operation of certain public utilities.
Yes Philippine Ports Authority can award the contract as authorized by E.O 30. E.O 30 indicates that a franchise
specially granted by Congress is not necessary for the operation of the Manila International Container Port (MICP)
by a private entity, a contract entered into by the PPA and such entity constituting substantial compliance with the
law. PPA has been tasked, under E.O. 30, with the management and operation of the Manila International Port
Complex and to undertake the providing of cargo handling and port related services and P.D. 857 empowers the PPA
to provide services within Port Districts "whether on its own, by contract, or otherwise"
5. KMU Labor Center v Garcia, 239 SCRA 386
Is the authority granted by LTFRB to provincial buses to set a fare range above existing authorized fare
range is unconstitutional and invalid?
Doctrine: Potestas delegata non delegari potest. What has been delegated cannot be delegated. This doctrine is
based on the ethical principle that such a delegated power constitutes not only a right but a duty to be performed by
the delegate through the instrumentality of his own judgment and not through the intervening mind of another.
The authority given by LTFRB is unconstitutional. LTFRB, the existing regulatory body today is vested by the
legislative the power of fixing the rates of public services. Under Executive Order No. 202. Section 5(c) authorizes
LTFRB "to determine, prescribe, approve and periodically review and adjust, reasonable fares, rates and other
related charges, relative to the operation of public land transportation services provided by motorized vehicles.
Given the task of determining sensitive and delicate matters as route-fixing and rate-making for the transport sector,
the responsible regulatory body is entrusted with the power of subordinate legislation. With this authority, an
administrative body and in this case, the LTFRB, may implement broad policies laid down in a statute by "filling in"
the details which the Legislature may neither have time or competence to provide. However, nowhere under the
aforesaid provisions of law are the regulatory bodies, authorized to delegate that power to a common carrier, a
transport operator, or other public service.
6. JG Summit Holdings, Inc. v. Court of Appeals, G.R. No. 124293, September 24, 2003
What is a Public Utility?
A public utility is a business or service engaged in regularly supplying the public with some commodity or service of
public consequence such as electricity, gas, water, transportation, telephone or telegraph service. To constitute a
public utility, the facility must be necessary for the maintenance of life and occupation of the residents. However, the
fact that a business offers services or goods that promote public good and serve the interest of the public does not
automatically make it a public utility. Public use is not synonymous with public interest. As its name indicates, the
term public utility implies public use and service to the public.
The principal determinative characteristic of a public utility is that of service to, or readiness to serve, an indefinite
public or portion of the public as such which has a legal right to demand and receive its services or commodities.
Stated otherwise, the owner or person in control of a public utility must have devoted it to such use that the public
generally or that part of the public which has been served and has accepted the service, has the right to demand that
use or service so long as it is continued, with reasonable efficiency and under proper charges.
7. Tatad v. Garcia, 243 SCRA 436
Is there a clear distinction between the "operation" of a public utility and the ownership of the facilities and
equipment used to serve the public?
In law, there is a clear distinction between the "operation" of a public utility and the ownership of the facilities and
equipment used to serve the public.
The right to operate a public utility may exist independently and separately from the ownership of the facilities
thereof. One can own said facilities without operating them as a public utility, or conversely, one may operate a
public utility without owning the facilities used to serve the public.
8. Gamboa vs Teves
Whether the term "capital" in Section 11, Article XII of the Constitution refers to the total common shares
only or to the total outstanding capital stock (combined total of common and non-voting preferred shares) of
PLDT, a public utility?
Doctrine: The term "capital" in Section 11, Article XII of the Constitution refers only to shares of stock that can vote
in the election of directors.
The term "capital" in Section 11, Article XII of the Constitution refers only to shares of stock that can vote in the
election of directors.
This interpretation is consistent with the intent of the framers of the Constitution to place in the hands of Filipino
citizens the control and management of public utilities. As revealed in the deliberations of the Constitutional
Commission, "capital" refers to the voting stock or controlling interest of a corporation
In short, the term "capital" in Section 11, Article XII of the Constitution refers only to shares of stock that can vote
in the election of directors.
9. In the Matter of: The Corporate Rehabilitation of Bayan Telecommunications, Inc.,
Whether the conversion of debt to equity in excess of 40% of the outstanding capital stock in favor of
petitioners violates the constitutional limit on foreign ownership of a public utility?
Doctrine: No franchise, certificate, or any other form of authorization for the operation of a public utility shall be
granted except to citizens of the Philippines or to corporations or associations organized under the laws of the
Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate
or authorization be exclusive in character or for a longer period than fifty years.
Two steps must be followed in order to determine whether the conversion of debt to equity in excess of 40% of the
outstanding capital stock violates the constitutional limit on foreign ownership of a public utility: First, identify into
which class of shares the debt shall be converted, whether common shares, preferred shares that have the right to
vote in the election of directors or non-voting preferred shares; Second, determine the number of shares with voting
right held by foreign entities prior to conversion. If upon conversion, the total number of shares held by foreign
entities exceeds 40% of the capital stock with voting rights, the constitutional limit on foreign ownership is violated.
Otherwise, the conversion shall be respected
10. Metro Cebu Water vs Adala, G.R. NO. 168914 : July 4, 2007
What is a Certificate of Public Convenience (CPC) and how is it different from franchise?
A CPC is a formal written authority issued by quasi-judicial bodies for the operation and maintenance of a public
utility for which a franchise is not required by law and a CPC issued by this Board is an authority to operate and
maintain a waterworks system or water supply service. On the other hand, a franchise is privilege or authority to
operate appropriate private property for public use vested by Congress through legislation.
Clearly, therefore, a CPC is different from a franchise and Section 47 of Presidential Decree 198 refers only to
franchise. Accordingly, the possession of franchise by a water district does not bar the issuance of a CPC for an area
covered by the water district.
Is the power to grant licenses or authorize the operations of PU exclusive to Congress?
This Court, in Philippine Airlines, Inc. v. Civil Aeronautics Board, 270 SCRA 538 (1997), has construed the term
“franchise” broadly so as to include, not only authorizations issuing directly from Congress in the form of statute,
but also those granted by administrative agencies to which the power to grant franchises has been delegated by
Congress, to wit: Congress has granted certain administrative agencies the power to grant licenses for, or to
authorize the operation of certain public utilities. With the growing complexity of modern life, the multiplication
of the subjects of governmental regulation, and the increased difficulty of administering the laws, there is a
constantly growing tendency towards the delegation of greater powers by the legislature, and towards the approval
of the practice by the courts.
It is generally recognized that a franchise may be derived indirectly from the state through a duly designated agency,
and to this extent, the power to grant franchises has frequently been delegated, even to agencies other than those of a
legislative nature. In pursuance of this, it has been held that privileges conferred by grant by local authorities as
agents for the state constitute as much a legislative franchise as though the grant had been made by an act of the
Legislature.
11. RCPI vs NTC, G.R. No. 93237 November 6, 1992
Is a grantee of a legislative franchise to operate a radio company, is required to secure a certificate of public
convenience and necessity before it can validly operate its radio stations including radio telephone services?
No. The petitioner cannot install and operate radio telephone services on the basis of its legislative franchise alone.
It is clear from the law that the exemption enjoyed by radio companies from the jurisdiction of the Public Service
Commission and the Board of Communications no longer exists because of the changes effected by the
Reorganization Law and implementing executive orders.
Today, a franchise, being merely a privilege emanating from the sovereign power of the state and owing its existence
to a grant, is subject to regulation by the state itself by virtue of its police power through its administrative agencies.
12. FRANCISCO VS TOLL REGULATORY BOARD, GR NO. 166910, October 19, 2020
What power does the law vested in the Toll Regulatory Board?
It is abundantly clear that Sections 3 (a) and (e) of P.D. 1112 in relation to Section 4 of P.D. 1894 have invested the
TRB with sufficient power to grant a qualified person or entity with authority to construct, maintain, and operate a
toll facility and to issue the corresponding toll operating permit or TOC. They amply provide the power to grant
authority to operate toll facilities.
By explicit provision of law, the TRB was given the power to grant administrative franchise for toll facility projects.
13. DAVID VS. MACAPAGAL-ARROYO, G.R. NO. 171396, MAY 3 2006
Can the President alone take over privately-owned public utility?
The President alone, without legislation, has no power to take over privately-owned public utility or business neither
affected with public interest nor determines when such exceptional circumstances have ceased. Likewise, without
legislation, the President has no power to point out the types of businesses affected with public interest that should
be taken over.
Generally, Congress is the repository of emergency powers. Section 23 (2), Article VI of the Constitution authorizes
it to delegate such powers to the President. Except during grave emergencies, when it may not be possible or
practicable for Congress to meet and exercise its powers, the Framers of our Constitution deemed it wise to allow
Congress to grant emergency powers to the President, subject to certain conditions, thus:
a) There must be a war or other emergency.
b) The delegation must be for a limited period only.
c) The delegation must be subject to such restrictions as the Congress may prescribe.
d) The emergency powers must be exercised to carry out a national policy declared by Congress.
GROUP 2
Privatization of State-Operated Public Utilities
Kuwait Airways v. Philippine Airlines, G.R. No. 156087, May 8, 2009
5 Freedoms:
1. Right or privilege, in respect of scheduled international air services, granted by one State to another
State or States to fly across its territory without landing
State or States to land in its territory for non-traffic purposes.
3. The right or privilege, in respect of scheduled international air services, granted by one State to another
State to put down, in the territory of the first State, traffic coming from the home State of the carrier.
State or States to land in its territory for non-traffic purposes.
5. The right or privilege, in respect of scheduled international air services, granted by one State to another
State to put down, in the territory of the first State, traffic coming from the home State of the carrier.
Doctrine:
It is well known that at the time of the execution of the 1981 agreements, Philippine Airlines was controlled
by the Philippine government, with the Government Service Insurance System (GSIS) holding the majority of
shares. However, in 1992, Philippine Airlines was privatized, with a private consortium acquiring 67% of the shares
of the carrier. Thus at the time of the signing of the CMU, Philippine Airlines was a private corporation no longer
controlled by the Government. This fact is significant. Had Philippine Airlines remained a government owned or
controlled corporation at the time the CMU was executed in 1995, its status as such would have bound Philippine
Airlines to the commitments made in the document by no less than the Philippine government. However, since
Philippine Airlines had already become a private corporation at that juncture, the question of impairment of private
rights may come into consideration.
The promises made by a Philippine president or his alter egos to a foreign monarch are not
transubstantiated by divine right so as to ipso facto render legal rights of private persons obviated. Had Philippine
Airlines remained a government-owned or controlled corporation, it would have been bound, as part of the executive
branch, to comply with the dictates of the President or his alter egos since the President has executive control and
supervision over the components of the executive branch. Yet Philippine Airlines has become, by this time, a private
corporation — one that may have labored under the conditions of its legislative franchise that allowed it to conduct
air services, but private in character, nonetheless. The President or his alter egos do not have the legal capacity to
dictate insuperable commands to private persons.
III. Regulation of Public Utilities
a. Authority to Operate
Albano v. Reyes, supra
● there is nothing in the Constitution remotely indicating the necessity of a congressional franchise
before "each and every public utility may operate”
● a special franchise directly emanating from Congress is not necessary if the law already specifically
authorizes an administrative body to grant a franchise or to award a contract
PLDT v. NTC, G.R. No. 88404, October 18, 1990
● Public Utilities; A legislative franchise authorizing the operation of radio stations should not include
the grant of provisional permit for the operation of a sophisticated telephone system.—The Court has
permitted respondent ETCI to operate a telephone system without a valid legislative franchise. It
strains the imagination too much to interpret a legislative franchise authorizing "radio stations" as
including the provisional permit for a sophisticated telephone system which has absolutely nothing to
do with radio broadcasts and transmissions. The Court subverts the legislative will when it validates a
provisional permit on the basis of authority which never envisioned much less intended its use for a
regular telephone system catering to thousands of individual receiver units. There is nothing in Rep.
Act No. 2090 which remotely suggests a cellular mobile telephone system. (Philippine Long Distance
Telephone Co. vs. National Telecommunications Commission, 190 SCRA 717, G.R. No. 88404
October 18, 1990)
Francisco v. Toll Regulatory Board, GR 166910, Oct. 19, 2010
● Well settled is the rule that a legislative franchise cannot be modified or amended by an administrative
body with general delegated powers to grant authorities or franchises. However, in the this case, the
law granting a direct franchise to PNCC specifically conferred upon the TRB the power to impose
conditions in an appropriate contract
Napocor v. Court of Appeals, 279 SCRA 506, G.R. 112702, Sept. 1997
● The term 'public service' includes every person that now or hereafter may own, operate, manage, or
control in the Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes, any common
carrier,electric light, heat and power , systems and other similar services." This definition of "public
service" also defines "public utility," private respondent contends that petitioner PIA does not in fact
have any "electric light, heat and power system - whether in PIE-MO or elsewhere" and therefore, it
"cannot be said to be operating one "for hire or compensation. Provided, That public services owned or
operated by government entities of government-owned or controlled corporation shall be regulated by
the Commission in the same way as privately-owned public services, but certificates of public
convenience or certificates of public convenience and necessity shall not be required of such entities or
corporations:
● Public utilities must serve public interest. To attain that goal, the public must be given the widest
choice as to which public utility would best suit their needs. It is in this light that the Decision of
September 26, 1997 was promulgated - there must be a hearing conducted by the appropriate
government agency to determine which public utility must distribute electric power to the industries
within the area covered by the PHIVIDEC.
Relate to Public Service Act, Section 16 (a), Sec. 18
i. General Qualifications
Vda. De Lat v. PSC, G.R. No. L-34978, Feb. 26, 1988
● The Court ruled that the private respondent deserves to be awarded the Certificate of Public
Convenience. He was able to fully satisfy the requisites before such a certificate may be granted,
namely: (1) the applicant must be a citizen of the Philippines, or a corporation or co-partnership,
association or joint stock company constituted and organized under the laws of the Philippines, 60 per
centum at least of the stock or paid-up capital of which belong entirely to citizens of the Philippines;
(2) the applicant must be financially capable of undertaking the proposed service and meeting the
responsibilities incident to its operations; and (3) the applicant must prove that the operation of the
public service proposed and the authorization to do business wig promote the public interest in a
proper and suitable manner.
● in order that the opposition based on ruinous competition may prosper, it must be shown that the
opponent would be deprived of their profits on the capital invested in its business. The mere possibility
of reduction in the earnings of a business is not sufficient to prove ruinous competition. It must be
shown that the business would not have sufficient gains to pay a fair rate of interest on its capital
investments.
KMU Labor Center v. Garcia, 239 SCRA 386

● A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the operation
of land transportation services for public use as required by law. Pursuant to Section 16(a) of the Public
Service Act, as amended, the following requirements must be met before a CPC may be granted, to
wit:
(i) the applicant must be a citizen of the Philippines, or a corporation or co-partnership, association or joint-
stock company constituted and organized under the laws of the Philippines, at least 60 per centum of its
stock or paid-up capital must belong entirely to citizens of the Philippines;
(ii) the applicant must be financially capable of undertaking the proposed service and meeting the
responsibilities incident to its operation; and
(iii) the applicant must prove that the operation of the public service proposed and the authorization to
do business will promote the public interest in a proper and suitable manner. It is understood that there
must be proper notice and hearing before the PSC can exercise its power to issue a CPC.
● Public convenience and necessity exists when the proposed facility or service meets a reasonable want
of the public and supply a need which the existing facilities do not adequately supply. The existence or
non-existence of public convenience and necessity is therefore a question of fact that must be
established by evidence, real and/or testimonial; empirical data; statistics and such other means
necessary, in a public hearing conducted for that purpose. The object and purpose of such procedure,
among other things, is to look out for, and protect, the interests of both the public and the existing
transport operators.
● Verily, the power of a regulatory body to issue a CPC is founded on the condition that after full-dress
hearing and investigation, it shall find, as a fact, that the proposed operation is for the convenience of
the public. Basic convenience is the primary consideration for which a CPC is issued, and that fact
alone must be consistently borne in mind. Also, existing operators in subject routes must be given an
opportunity to offer proof and oppose the application. Therefore, an applicant must, at all times, be
required to prove his capacity and capability to furnish the service which he has undertaken to render.
And all this will be possible only if a public hearing were conducted for that purpose. The
establishment of public need in favor of an applicant reverses well-settled and institutionalized judicial,
quasi-judicial and administrative procedures.
ii. Revocation or Cancellation
Divinagracia v. Consolidated Broadcasting System, Inc. G.R. No. 162272, April 7, 2009
NTC, as established by E.O. No. 546. One can readily notice that even as the NTC is vested with the power to issue
CPCs to broadcast stations, it is not expressly vested with the power to cancel such CPCs, or otherwise empowered
to prevent broadcast stations with duly issued franchises and CPCs from operating radio or television stations.
The power granted to the Public Service Commission to revoke CPCs or CPCNs under Section 16(m) of the Public
Service Act. That argument has been irrefragably refuted by Section 14 of the Public Service Act, and by
jurisprudence, most especially RCPI v. NTC. As earlier noted, at no time did radio companies fall under the
jurisdiction of the Public Service Commission as they were expressly excluded from its mandate under Section 14.
In addition, the Court ruled in RCPI that since radio companies, including broadcast stations and telegraphic
agencies, were never under the jurisdiction of the Public Service Commission except as to rate-fixing, that
Commission’s authority to impose fines did not carry over to the NTC even while the other regulatory agencies that
emanated from the Commission did retain the previous authority their predecessor had exercised.
Relate to Public Service Act, Section 16(m)
iii. CPC v. CPCN
See Public Service Act, Section 15
Section 15. With the exception of those enumerated in the preceding section, no public service shall operate in the
Philippines without possessing a valid and subsisting certificate from the Public Service Commission known as
"certificate of public convenience," or "certificate of public convenience and necessity," as the case may be, to the
effect that the operation of said service and the authorization to do business will promote the public interests in a
proper and suitable manner.
The Commission may prescribe as a condition for the issuance of the certificate provided in the preceding paragraph
that the service can be acquired by the Republic of the Philippines or any instrumentality thereof upon payment of
the cost price of its useful equipment, less reasonable depreciation; and likewise, that the certificate shall be valid
only for a definite period of time; and that the violation of any of these conditions shall produce the immediate
cancellation of the certificate without the necessity of any express action on the part of the Commission.
In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model, or
other circumstances affecting its value in the market shall be taken into consideration.
The foregoing is likewise applicable to any extension or amendment of certificates actually in force and to those
which may hereafter be issued, to permit to modify itineraries and time schedules of public services, and to
authorizations to renew and increase equipment and properties.
PAL v. CAB, 270 SCRA 538 (GR 119528) (see also Republic Acts No. 9183 and 9517 in relation to case)
● The words “convenience” and necessity” are construed together if used in a statute. Public
convenience and necessity exists when the proposed facility will meet a reasonable want of the public
and supply a need which the existing facilities do not adequately afford.
● CPC vs CPCN - CPC is issued when the public service (public utility vehicle) does not offer tickets in
order to ride the said vehicle (ie: bus or jeepney). CPCN is issued when the public service (public
utility vehicle) provides tickets in order to board the said vehicle.
Rate-Fixing
See Public Service Act, Sections 16 (c) and 20 (a)

Philippine Communications Satellite Corporation v. Alcuaz, G.R. No.. 84818, December 18,1989
● Fundamental is the rule that delegation of legislative power may be sustained only upon the ground
that some standard for its exercise is provided and that the legislature in making the delegation has
prescribed the manner of the exercise of the delegated power.
● When the administrative agency concerned, respondent NTC in this case, establishes a rate, its act
must both be non- confiscatory and must have been established in the manner prescribed by the
legislature; otherwise, in the absence of a fixed standard, the delegation of power becomes
unconstitutional.
● In case of a delegation of rate-fixing power, the only standard which the legislature is required to
prescribe for the guidance of the administrative authority is that the rate be reasonable and just. In the
absence of an express requirement as to reasonableness, this standard may be implied.
● The rate- fixing function involved in the rate fixing-power of NTC is adjudicatory and hence quasi-
judicial, not quasi- legislative; thus, notice and hearing are necessary and the absence thereof results in
a violation of due process of a quasi-judicial character, the valid exercise of which demands previous
notice.
Republic of the Philippines v. Meralco, 39 (SCRA 700, Nov. 15, 2002)
● The rates prescribed by the State must be one that yields a fair return on the public utility upon the
value of the property performing the service and one that is reasonable to the public for the services
rendered.—In regulating rates charged by public utilities, the State protects the public against arbitrary
and excessive rates while maintaining the efficiency and quality of services rendered. However, the
power to regulate rates does not give the State the right to prescribe rates which are so low as to
deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State
must be one that yields a fair return on the public utility upon the value of the property performing the
service and one that is reasonable to the public for the services rendered. The fixing of just and
reasonable rates involves a balancing of the investor and the consumer interests. (Republic vs. Manila
Electric Company, 391 SCRA 700, G.R. No. 141314, G.R. No. 141369 November 15, 2002)
i. Undue Delegation
KMU Labor Center v. Garcia, 239 SCRA 386
Doctrine:
The authority given by the LTFRB to the provincial bus operators to set a fare range over and above the authorized
existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative authority. Potestas
delegata non delegari potest. What has been delegated cannot be delegated. This doctrine is based on the ethical
principle that such delegated power constitutes not only a right but a duty to be performed by the delegate through
the instrumentality of his own judgment and not through the intervening mind of another. A further delegation of
such power would indeed constitute a negation of the duty in violation of the trust reposed in the delegate mandated
to discharge it directly. The policy of allowing the provincial bus operators to change and increase their fares at will
would result not only to a chaotic situation but to an anarchic state of affairs. This would leave the riding public at
the mercy of transport operators who may increase fares every hour, every day, every month or every year, whenever
it pleases them or whenever they deem it "necessary" to do so.
Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasing
complexity of modern life. As subjects for governmental regulation multiply, so does the difficulty of administering
the laws. Hence, specialization even in legislation has become necessary. Given the task of determining sensitive
and delicate matters as route-fixing and rate-making for the transport sector, the responsible regulatory body is
entrusted with the power of subordinate legislation. With this authority, an administrative body and in this case, the
LTFRB, may implement broad policies laid down in a statute by "filling in" the details which the Legislature may
neither have time or competence to provide. However, nowhere under the aforesaid provisions of law are the
regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a transport
operator, or other public service.
ii. Provisional Rates
Padua v. Ranada, G.R. No. 141949, October 14, 2002
● TRB’s authority to grant provisional toll rate adjustments does not require a conduct of hearing as
supported by PD 1112 and Rule 5, Sec. 2 of the Rules of Procedures as promulgated by TRB.
● All that is necessary is that it be issued upon (1) a finding that the main petition is sufficient in form
and substance; (2) the submission of an affidavit showing that the increase in rates substantially
conforms to the formula, if any is stipulated in the franchise or toll operation agreement, and that
failure to immediately impose and collect the increase in rates would result in great irreparable injury
to the petitioner; and (3) the submission of a bond.
Freedom from Debt Coalition v. Energy Regulatory Commission, G.R. No.161113
GROUP 3
PART 1
1. Freedom from Debt Coalition v. Energy Regulatory Commission (ERC), G.R. No.
161113, Jun. 15, 2004
Does the ERC have the power to grant provisional rate adjustments?
The ERC is endowed with the statutory authority to approve provisional rate
adjustments under the aegis of Sections 44 and 80 of the Electric Power Industry
Reform Act (EPIRA). The powers and functions of the Energy Regulatory Board
(ERB) not inconsistent with the provisions of the EPIRA are deemed transferred
to the ERC. The principal powers of the ERB under Executive Order No. 172, s.
1987, relative to electric public utilities which were transferred to the ERC
include: 1) regulating and fixing the power rates to be charged by elective
companies; 2) issuing certificates of public convenience for the operation of
electric power utilities; and 3) granting or approving provisional electric rates.
What are the limitations on the power to grant of provisional rates of public
utilities in the Electric Power Industry?
The implementing rules and regulations of the EPIRA basically sets forth the due
process requirement in granting provisional rate increases. Unlike in regulatory
agencies for public utilities in other sectors, the ERC cannot unilaterally approve
provisional rate increases without the twin requirements of notice and opportunity
to be heard. The verified copy of the application for provisional rate increase
must be received by the legislative body of the locality where the applicant or
petitioner principally operates and must be published in a newspaper of general
circulation in the same locality. The LGU or any concerned party may submit
comments or pleadings, which must be considered by the ERC in reaching its
decision to grant or deny a provisional rate adjustment. The issuance of a
provisional order for rate adjustment, notwithstanding the failure of the applicant
to comply with the due process requirement, will tantamount to grave abuse of
discretion on the part of the ERC.
2. BF Homes v. Meralco, GR 171624, Dec. 6, 2010

Which Regulating Body has Jurisdiction over Electricity Providers like
Meralco?
The ERC has original and exclusive jurisdiction over all cases contesting rates,
fees, fines, and penalties imposed by the ERC in the exercise of its powers,
functions and responsibilities, and over all cases involving disputes between and
among participants or players in the energy sector. (Rule 43(u) of the EPIRA) the
ERC "shall also be empowered to issue such other rules that are essential in the
discharge of its functions as in independent quasi-judicial body.” (Section 4(o) of
the EPIRA Implementing Rules and Regulation provides)
The ERC is the regulatory agency of the government having the authority and
supervision over MERALCO. Thus, the task to approve the guidelines,
schedules, and details of the refund by MERALCO to its consumers, to
implement the judgment of this Court in the MERALCO Refund cases, also falls
upon the ERC. By filing their Petition before the RTC, BF Homes and PWCC
intend to collect their refund without submitting to the approved schedule of the
ERC, and in effect, enjoy preferential right over the other equally situated
MERALCO consumers.
What is Public Service?
"Public service" or "Public utility" as including "every individual, copartnership,

association, corporation or joint-stock company, . . . that now or hereafter may
own, operate, manage or control within the Philippines, for hire or compensation,
any common carrier, x x x, electric light, heat, power, x x x, when owned,
operated and managed for public use or service within the Philippines x x x."
Under the succeeding Section 17(a), the Public Service Commision, (now ERC)
has the power even without prior hearing –
3. Francisco v. Toll Regulatory Board, GR 166910, Oct. 19, 2010  

Topic: RATE FIXING VIS-A-VIS POWER TO GRANT AUTHORITY
Does the Toll Regulatory Board have the power to issue, modify, and promulgate
toll rates?
By express legal provision, the Toll Regulatory Board (TRB) is authorized to approve the
initial toll rates without the necessity of a hearing; it is only when a challenge on the
initial toll rates fixed ensues that public hearings are required.
To be very clear, it is only the fixing of the initial and the provisional toll rates where
a public hearing is not a vitiating requirement. Accordingly, subsequent toll rate
adjustments are mandated by law to undergo both the requirements of public hearing
and publication.
TRB should exercise its rate-fixing powers vested to it by law within the context of the
agreed formula, but always having in mind that the rates should be just and reasonable.
Conversely, it is very well within the power of the TRB under the law to approve the
change in the current toll fees. But the reasonableness of a possible increase in the fees
must first be clearly and convincingly established by the petitioning entities
Any fixing of the toll rate, which did not or does not comply with the twin requirements of
public hearing and publication, must therefore be struck down as void.
4. Napocor v. Court of Appeals, 279 SCRA 506
Topic - Area Operation
Who shall determine the right to supply electric power to an area?

The determination of which of two public utilities has the right to supply
electric power to an area which is within the coverage of both is certainly not a
rate-fixing function which should remain with the Energy Regulation Board
(ERB). It deals with the regulation of the distribution of energy resources which,
under Executive Order No. 172, was expressly a function of ERB. However, with
the enactment of Republic Act No. 7638, the Department of Energy took
over such function. Hence, it is this Department which shall then determine
whether CEPALCO or PIA should supply power to PIE-MO.
5. Montoya v. Ignacio, G.R. No. L-5868, December 29, 1953
Topic - Approval of Sale and Mortgages of Public Utility Assets or Equity

Can a property covered by a franchise be transferred or leased to another
without obtaining prior approval from the Public Service Commission?
The law requires the approval of the Public Service Commission in order that a
franchise, or any privileges pertaining thereto, may be sold or leased without
infringing the certificate issued to the grantee.
Since a franchise is personal in nature any transfer or lease thereof should be

notified to the Public Service Commission so that the latter may take proper
safeguards to protect the interest of the public. In fact, the law requires that,
before the approval is granted, there should be a public hearing, with notice to all
interested parties, in order that the Commission may determine if there are good
and reasonable grounds justifying the transfer or lease of the property covered
by the franchise, or if the sale or lease is detrimental to public interest. If the
property covered by the franchise is transferred or leased to another without
obtaining the requisite approval, the transfer is not binding against the Public
Service Commission and in contemplation of law the grantee continues to be
responsible under the franchise in relation to the Commission and to the public. -
Public Service Law is Section 20(g).
6. Y TRANSIT CO. v. NLRC, GR No. 88195-86, January 27, 1994
Topic: Approval of Sale and Mortgages of Public Utility Assets or Equity
Is BOT approval necessary for the transfer of the buses to be valid?
In Montoya v. Ignacio, the law really requires the approval of the Public Service
Commission, in order that a franchise, or any privilege pertaining thereto, may be
sold or leased without infringing the certificate issued to the grantee.
Since a franchise is personal in nature, any transfer or lease thereof should be

notified to the Public Service Commission so that the latter may take proper
safeguards to protect the interest of the public.
Public Service Act, Section 20 (g) provides in its last part that nothing herein
contained shall be construed to prevent the transaction from being negotiated or
completed before its approval or to prevent the sale, alienation, or lease by any
public service of any of its property in the ordinary course of its business, which
gives the impression that the approval of Public Service Commission is but a
mere formality which does not affect the effectivity of the transfer or lease of the
property belonging to a public utility.
If the approval has not been obtained, the transfer or lease is valid and binding
between the parties although not effective against the public and the Public
Service Commission. The approval is only necessary to protect public
interest.
7. PLDT v NTC, GR 88404, Oct. 18, 1990  
The sale of shares of stock of a public utility is governed by another law, i.e.,
Section 20(h) of the Public Service Act (Commonwealth Act No. 146). Pursuant
thereto, the Public Service Commission (now the NTC) is the government agency
vested with the authority to approve the transfer of more than 40% of the
subscribed capital stock of a telecommunications company to a single transferee.
In other words, transfers of shares of a public utility corporation need only NTC
approval, not Congressional authorization.
8. Republic v. International Communications Corporation, G.R. No. 141667, July

17, 2006  
Does NTC have the power to impose a permit fee?
The NTC has the power to impose permit fees both under R.A 7925 and the
Public Service Act. However, such fees are only limited to reimbursement of its
expenses in the authorization and supervision and/or regulation of the public
services. Also, R.A. 7925 did not amend the Public Service Act. The Removal of
the word “authorization” in R.A. 7925 did not remove the authority of the NTC to
collect permit fees but stated that “In the exercise of its regulatory powers,
continue to impose such fees and charges as may be necessary to cover
reasonable costs and expenses for the regulation and supervision of the
operations of telecommunications entities” further empowering the NTC’s power
to collect.
9. Taxicab Operators of Metro Manila v. Board of Transportation, G.R. No L-59234,

September 30, 1982  
Whether or not the memorandum is constitutional even if such was passed

without a public hearing with the petitioner.
The said memorandum phasing out taxis older than 6 model years is
constitutional. P.D. 101, which grants the power to BOT, states that apart from its
own investigation and studies, the BOT may require the cooperation and
assistance of other government offices or agencies to be able to furnish useful
data or information. It may only require the submission of position papers from
operators. Such does not require public hearing or position papers from the
operators since BOT has other means of acquiring information through other
government offices or agencies.
10. PANTRANCO v. PSC, GR No. 47065, June 26, 1940

Topic: Due Process Requirements
Should PANTRANCO be granted the right to a hearing to present its own

case before the PSC?
There are cardinal primary rights which must be respected even in proceedings
of this character. The first of these rights is the right to a hearing, which
includes the right of the party interested or affected to present his own
case and submit evidence in support thereof.
The Public Service Commission has power, upon proper notice and hearing, “to
amend, modify or revoke at any time any certificate issued under the provisions
of this Act whenever the facts and circumstances on the strength of which said
certificate was issued have been misrepresented or materially changed.” Public
Service Act, Section 16 (m).
GROUP 4
FIRST REPORT
1. DOMINADOR RAYMUNDO vs. LUNETA MOTOR CO., ET AL.,

G.R. Nos. L-39902, L-39903, November 29, 1933
Nature of a Franchise
Certificates of public convenience secured by public service operators are liable to execution, and the
Public Service Commission is authorized to approve the transfer of the certificates of public convenience to
the execution creditor. Certificates of public convenience have come to have considerable material value.
They are valuable assets. In many cases the certificates constitute the cornerstones on which are builded the
business of bus transportation. Certificates of public convenience are included in the term "property" in the
broad sense of the term, and as a species of property, are liable to execution. Therefore, the public auction
by virtue of an attachment shall prevail.
2. Cogeo-Cubao Operator & Driver Association v. CA,

G.R. No. 100727, March 18, 1992
Nature of a Franchise
Under the Public Service Law, a certificate of public convenience is an authorization issued by the Public
Service Commission for the operation of public services for which no franchise is required by law. A
certificate of public convenience is included in the term "property" in the broad sense of the term. Under
the Public Service Law, a certificate of public convenience can be sold by the holder thereof because it has
considerable material value and is considered a valuable asset (Raymundo v. Luneta Motor Co., Et Al., 58
Phil. 889). Although there is no doubt that it is private property, it is affected with a public interest and must
be submitted to the control of the government for the common good (Pangasinan Transportation Co. v.
PSC, 70 Phil 221). Hence, insofar as the interest of the State is involved, a certificate of public convenience
does not confer upon the holder any proprietary right or interest or franchise in the route covered thereby
and in the public highways (Lugue v. Villegas, L-22545, Nov. 28, 1969, 30 SCRA 409). However, with
respect to other persons and other public utilities, a certificate of public convenience as property, which
represents the right and authority to operate its facilities for public service, cannot be taken or interfered
with without due process of law.
Appropriate actions may be maintained in courts by the holder of the certificate against those who
have not been authorized to operate in competition with the former and those who invade the rights
which the former has pursuant to the authority granted by the Public Service Commission (A.L.
Ammen Transportation Co. v. Golingco. 43 Phil. 280).
3. San Pablo v. Pantranco, 153 SCRA 199, August 21, 1987
Scope of a Franchise
Pantranco’s Certificate for public convenience to operate passenger buses from Metro Manila to Bicol
Region and Eastern Samar does not include water transport service between Matnog and Allen.
Pantranco’s Certificate of Public Convenience as a bus transportation cannot be merely amended to include
this water service under the guise that it is a mere private ferry service.
The conveyance of passengers, trucks and cargo from Matnog to Allen is certainly not a ferry service, but a
coastwise or interisland shipping service. Matnog and Allen are separated by an open sea and not a small
body of water, so this open sea cannot be considered a continuation of the hi way. Before private
respondent may be issued a franchise or CPC for the operation of the said service as a common
carrier, it must comply with the usual requirements of filing an application, payment of the fees,
publication, adducing evidence at a hearing and affording the oppositors the opportunity to be
heard, among others, as provided by law.
4. Batangas Transportation Co. vs. Orlanes 52 Phil. 455
G.R. No. L-28865 Dec.19, 1928
Prior Operator Rule
So long as the first licensee keeps and performs the terms and conditions of its license and complies with
the reasonable rules and regulations of the Commission and meets the reasonable demands of the public, it
should have more or less of a vested and preferential right over a person who seeks to acquire
another and a later license over the same route. Otherwise, the first license would not have protection on
his investment, and would be subject to ruinous competition and thus defeat the very purpose and intent for
which the Public Service Commission was created.
5. Teja Marketing vs. Intermediate Appellate Court 148 SCRA 347

G.R. No. L-65510 March 9, 1987
KABIT SYSTEM
Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system"
whereby a person who has been granted a certificate of public convenience allows another person
who owns motor vehicles to operate under such franchise for a fee.
Although not outrightly penalized as a criminal offense, the kabit system is invariably recognized as being
contrary to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code. It is a
fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave
both where it finds then. Upon this premise it would be error to accord the parties relief from their
predicament.
6. Lim v. CA, G.R. No. 125817, January 16, 2002
What is Kabit system?
The kabit system is an arrangement whereby a person who has been granted a certificate of public
convenience allows other persons who own motor vehicles to operate them under his license, sometimes for
a fee or percentage of the earnings. The kabit system is invariably recognized as being contrary to public
policy and therefore void and inexistent under Art. 1409 of the civil code.
Purpose of the liability under Kabit system?
The purpose of the liability under the kabit system is to identify the person to be held liable by passengers
who are injured by those operating under such system. It would seem then that the thrust of the law in
enjoining the kabit system is not so much as to penalize the parties but to identify the person upon whom
responsibility may be fixed in case of an accident with the end view of protecting the riding public.
7. LOURDES J. LARA, ET AL. vs RIGIDO R. VALENCIA G.R. No. L-9907, June 30, 1958
Why is Diligence of a good father used in an Absent of Contract of Transportation?
A diligence of a good father in a family is defined as To take good care of the thing with the diligence of a
good father of a family. Diligence of a good father of a family means ordinary care. Just like a father of a
family, it is a care that an average person would do in taking care of his property.
In the case of Lara vs Valencia, Doctrine of Diligence of a good father of a family is used because there is
no Contract of Transportation in an ordinary transportation; “a passenger must observe the diligence of a
father of a family to avoid injury to himself which means that if the injury to the passenger has been
proximately caused by his own negligence, the carrier cannot be held liable.” In the case at bar is only
required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence as required
by our law.
8. PCI Leasing v. UCPB 557 SCRA 441 (2008)
a. Purpose of Registration in so far as liabilities of third persons are concerned.
-The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that
any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed
on a definite individual, the registered owner. Instances are numerous where vehicles running on public
highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the
owner or drivers, or with very scant means of identification.
b. What is the liability of a registered owner of a vehicle/common carrier in cases of injury

committed against third persons?
-For damage or injuries arising out of negligence in the operation of a motor vehicle, the registered owner
may be held civilly liable with the negligent driver either 1) subsidiarily, if the aggrieved party seeks
relief based on a delict or crime under Articles 100 and 103 of the Revised Penal Code; or 2)
solidarily, if the complainant seeks relief based on a quasi-delict under Articles 2176 and 2180 of the
Civil Code.
9. Mirasol V DPWH GR No. 158793, June 8, 2006
Does the DPWH has power authority to declare expressways as limited

access facilities.
No. Under EO 546, the Ministry of Public Works (now DPWH) assumed the public works functions. On
the other hand, among functions of the Ministry of Transportation and Communications (now Department
of Transportation and Communications [DOTC]) were to: (1) formulate and recommend national policies
and guidelines for the preparation and implementation of an integrated and comprehensive transportation
and communications systems at the national, regional, and local levels; and (2) regulate whatever
necessary activities relative to transportation and communications and prescribe and collect fees in the
exercise of such power. Clearly under EO 546, it is the DOTC not the DPWH, which has authority to
regulate, restrict, or prohibit access to limited access facilities.
10. PAL vs. CA 23 SCRA 992, June 13, 1968
Civil Aeronautics Board, RA 776, as amended, Secs.10(C):

Does CAB have the power to grant provisional authority to operate, prior to the submission for decision of
the main application for a certificate of public convenience and necessity?
Under Section 10-C(1) of Republic Act No. 776, reading:
“(C) The Board shall have the following specific powers and duties: “In accordance with the provisions of
Chapter IV of this Act, to issue, deny, amend, revise, alter, modify, cancel suspend or revoke, in whole or in
part, upon petitioner complaint, or upon its own initiative, any temporary operating permit or Certificate of
Public Convenience and Necessity; Provided, however, That in the case of foreign air carriers, the permit
shall be issued with the approval of the President of the Republic of the Philippines.”
It explicitly authorizes CAB to issue a “temporary operating permit,” and nothing contained, either in said
section, or in Chapter IV of Republic Act No. 776, negates the power to issue said “permit”, before the
completion of the applicant’s evidence and that of the oppositor thereto on the main petition. Indeed, the
CAB’s authority to grant a temporary permit “upon its own initiative,” strongly suggests the power to
exercise said authority, even before the presentation of said evidence has begun.
SECOND REPORTING - GROUP 1

1. KUWAIT AIRWAYS, CORPORATION vs. PHILIPPINE AIRLINES, INC., G.R. No. 156087, May 8, 2009
Does the Civil Aeronautics Board (CAB) have a regulatory authority over a local airline to implement
government air policy?
Yes. Section 10 of R.A. No. 776 grants to the CAB the "general supervision and regulation of, and jurisdiction and
control over, air carriers as well as their property, property rights, equipment, facilities and franchise," and this
power correlates to Section 4(c) of the same law, which mandates that the Board consider in the exercise of its
functions "the regulation of air transportation in such manner as to recognize and preserve the inherent advantages
of, assure the highest degree of safety in, and foster sound economic condition in, such transportation, and to
improve the relations between, and coordinate transportation by air carriers."
2-3. U.S. VS. TAN PIACO, 40 PHIL. 853
What is the definition of Public Use?
"Public use" means the same as "use by the public”. The essential feature of the public use is that it is not confined
to privileged individuals, but is open to the indefinite public. It is this indefinite or unrestricted quality that gives it
its public character. In determining whether a use is public, we must look not only the character of the business to be
done, but also to the proposed mode of doing it. If the use is merely optional with the owners, or the public benefit is
merely incidental, it is not a public use, authorizing the exercise of the jurisdiction of the public utility commission.
There must be, in general, a right which the law compels the power to give to the general public. It is not enough
that the general prosperity of the public is promoted. Public use is not synonymous with public interest. The true
criterion by which to judge the character of the use is whether the public may enjoy it by right or only by
permission.
4. Home Insurance Co. v American Steamship, 23 SCRA 24
Can the stipulation in the charter party of the owner's non-liability valid so as to absolve the American
Steamship Agencies from liability for loss?
Doctrine: A common carrier undertaking to carry a special cargo or chartered to a special person only, becomes
a private carrier.
Yes a stipulation in charter can validly absolve liability if the common carrier acted as a private carrier. The
provisions of our Civil Code on common carriers were taken from Anglo-American law. Under American
jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a special person only, becomes
a private carrier. As a private carrier, a stipulation exempting the owner from liability for the negligence of its agent
is not against public policy, and is deemed valid. Such doctrine We find reasonable. The Civil Code provisions on
common carriers should not be applied where the carrier is not acting as such but as a private carrier. The stipulation
in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only
if the strict public policy governing common carriers is applied. Such policy has no force where the public at large is
not involved, as in the case of a ship totally chartered for the use of a single party. A perusal of the charter party
referred to shows that while the possession and control of the ship were not entirely transferred to the charterer, the
vessel was chartered to its full and complete capacity. Furthermore, the charter had the option to go north or south or
vice-versa, loading, stowing and discharging at its risk and expense. Accordingly, the charter party contract is one of
affreightment over the whole vessel rather than demise. As such, the liability of the shipowner for acts or negligence
of its captain and crew, would remain in the absence of stipulation.
5. De Guzman v. Court of Appeals, G.R. No. L-47822, 22 December 1988, 186 SCRA 612
What is a Common Carrier?
Article 1732. Common carriers are persons, corporations, firms, or associations engaged in the business of carrying
or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the
public.
The above article makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as a sideline). Article
1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither
does Article 1732 distinguish between a carrier offering its services to the general public i.e., the general community
or population, and one who offers services or solicits business only from a narrow segment of the general
population. We think that Article 1733 deliberately refrained from making such distinctions.
6. Bascos v. CA
Whether or not Bascos is a common carrier?
Doctrine: The test to determine a common carrier is "whether the given undertaking is a part of the business engaged
in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the
business transacted."
Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods
or both, and one who does such carrying only as an ancillary activity (in local idiom, as a "sideline"). Article 1732
also carefully avoids making any distinction between a person or enterprise offering transportation service on a
does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general
community or population, and one who offers services or solicits business only from a narrow segment of the
general population. We think that Article 1732 deliberately refrained from making such distinctions."
7. Planters Products Inc vs CA, G.R. No. 101503 September 15, 1993
What is a Charter party and what are its two (2) types?
A “charter-party” is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner
to another person for a specified time or use;
Charter parties are of two types:
(a) Contract of affreightment which involves the use of shipping space on vessels leased by the owner in part or as
a whole, to carry goods for others; and,
(b) Charter by demise or bareboat charter, by the terms of which the whole vessel is let to the charterer with a
transfer to him of its entire command and possession and consequent control over its navigation, including the
master and the crew, who are his servants.
What is a contract of Affreightment and what are its two (2) types?
A contract of affreightment by which the owner of a ship or other vessel lets the whole or a part of her to a merchant
or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight.
Contract of affreightment may either be:
1. time charter - wherein the vessel is leased to the charterer for a fixed period of time, or
2. voyage charter, wherein the ship is leased for a single voyage.
Will the Common Carrier become a Private Carrier when it enters a time-charter party?
No, the ship remains a common or public carrier. It is therefore imperative that a public carrier shall remain as such,
notwithstanding the charter of the whole or portion of a vessel by one or more persons, provided the charter is
limited to the ship only, as in the case of a time-charter or voyage-charter.
It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier
becomes private, at least insofar as the voyage covering the charter-party is concerned. Indubitably, a shipowner in a
time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the
property of the charterer.
8. Fabre vs CA, G.R. No. 111127 July 26, 1996
What is the diligence required in Common Carriers?
Under Art. 1733. NCC. — . Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each case
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745,
Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755
and 1756.
Are Common Carriers liable for the death of the injuries to the passengers through the negligence or willful
acts of their employees?
Yes, according to Art. 1759. NCC. — Common carriers are liable for the death of or injuries to passengers through
the negligence or willful acts of the former's employees, although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.
Why are Common Carriers liable for the death of the injuries to the passengers through the negligence or
willful acts of their employees?
Employers should exercise Due Diligence in selection of employees by examining the applicant for his
qualifications, experience and record of service. Employers should also exercise Due diligence in supervision which
requires the formulation of rules and regulations for the guidance of employees and the issuance of proper
instructions as well as actual implementation and monitoring of consistent compliance with the rules.
9. FPIC vs COURT OF APPEALS, G.R. No. 125948,, December 29, 1998
Does the law create a distinction on themeaning of “transporting” as defined in Art 1732 - Common Carriers?
As correctly pointed out by petitioner, the definition of "common carriers' ' in the Civil Code (Art. 1732) makes no
distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the
transportation of the passengers or goods should be by motor vehicle. In fact, in the United States, oil pipeline
operators are considered common carriers.
Common carrier defined broadly, as one who holds himself out to the public as engaged in the business of
transporting persons or property from place to place, for compensation, offering his services to the public generally.
What are the tests to consider in determining a party if a common carrier of goods?
Test for determining whether a party is a common carrier of goods

a. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself
out as ready to engage in the transportation of goods for person generally as a business and not as a casual
occupation;
b. He must undertake to carry goods of the kind to which his business is confined;
c. He must undertake to carry bythe method by which his business is conducted and over his established roads; and
d. The transportation must be for hire.
10. LOADSTAR vs CA, G.R. No. 131621, September 28, 1999
Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the
public.
Does the law make distinctions in terms of Common Carriers?
No, the law makes no distinction between one whose principal business activity is the carrying of persons or goods
or both, and one who does such carrying only as ancillary activity (in local idiom, as "a sideline".)
It is not necessary that the carrier be issued a certificate of public convenience, and this public character is not
altered by the fact that the carriage of the goods in question was periodic, occasional, episodic or unscheduled.
Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled
basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the
general community or population, and one who offers services or solicits business only from a narrow segment of
the general population.
11. CRISOSTOMO VS. CA, G.R. NO. 138334; AUGUST 25, 2003
What is a contract of carriage or transportation?
A contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves
to transport persons, things, or news from one place to another for a fixed price. Such person or associations of
persons are regarded as carriers.
Article 1732 defines common carriers as persons, corporations, firms or associations engaged in the business of
carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services
to the public.
A travel agency is not an entity engaged in the business of transporting either passengers or goods and is therefore,
neither a private nor a common carrier. And it goes without saying that a travel agency is not required by law to
exercise extraordinary diligence.
12. CRUZ VS. SUN HOLIDAYS, G.R. NO. 186312, JUNE 29, 2010
Art. 1732.Common carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the
public.
The above article makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as "a sideline"). Article
1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a
does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general
community or population, and one who offers services or solicits business only from a narrow segment of the
general population. We think that Article 1733 deliberately refrained from making such distinctions.
There is even no need for the court to make an express finding of fault on the part of the common carrier except by
evidence that the carrier exercised extraordinary diligence. A very cautious person exercising the utmost diligence
would not brave such stormy weather and put other people’s lives at risk. The extraordinary diligence then required
from a common carrier demands they take care of the goods and lives entrusted.
To be fully free of any liability, the event must have been the proximate and only cause of the loss and it should have
exercised due diligence to prevent or minimize the loss before, during and after the occurrence of such event.
GROUP 2
ii. Nature and Basis of Liability
Art. 1733
Cangco v. MRR, 38 Phil. 767
● CARRIERS; PASSENGERS; NEGLIGENCE; ALIGHTING FROM MOVING TRAIN.—It is not

negligence per se for a traveler to alight from a slowly moving train. Cangco vs. Manila Railroad Co.,
38 Phil. 768, No. 12191 October 14, 1918
Isaac v. A.L. Ammen, 101 Phil. 1046
● PUBLIC UTILITIES; PRINCIPLES GOVERNING LIABILITY OF COMMON CARRIER.—The

following are the principles governing the liability of a common carrier: (1) the liability of a carrier is
contractual and arises upon breach of its obligation. There is a breach if it fails to exert extraordinary
diligence according to all the circumstances of each case; (2) a carrier is obliged to carry its passenger
with the utmost diligence of a very cautious person, having due regard for all circumstances; (3) a
carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to,
passengers, it being its duty to prove that it exercised extraordinary diligence; and (4) the carrier is not
an insurer against all risks of travel. Isaac vs. A. L. Ammen Trans. Co., Inc., 101 Phil. 1046, No.
L-9671 August 23, 1957
Fores v. Miranda, 105 Phil. 266
Doctrine:
We have repeatedly ruled that moral damages are not recoverable in damage actions predicated on a breach
of the contract of transportation, in view of Articles 2219 and 2220 of the new Civil Code. The exception to the
basic rule of damages is a mishap resulting in the death of a passenger, in which case Article 1764 makes the
common carrier expressly subject to the rule of Art. 2206, of the Civil Code that entitles the spouse, descendants and
ascendants of the deceased passenger to "demand moral damages for mental anguish by reason of the death of the
deceased." (Necesito vs. Paras G. R. No. L-10605, Resolution on motion to reconsider, Sept. 11, 1958).
Where the injured passenger does not die, moral damages are not recoverable unless it is proved that the carrier was
guilty of malice or bad faith. The mere carelessness of the carrier's driver does not per se constitute or justify an
inference of malice or bad faith on the part of the carrier.
While it is true that negligence may be occasionally so gross as to amount to malice, that fact must be shown in
evidence. A carrier's bad faith is not to be lightly inferred from a mere finding that the contract was breached
through negligence of the carrier's employees.
The theory that carrier's violation of its engagement to safely transport the passenger involves a breach of the
passenger's confidence, and therefore should be regarded as a breach of contract in bad faith, justifying recovery of
moral damages, under Article 2220 of the New Code is untenable, for under it the carrier would always be deemed
in bad faith in every case its obligation to the passenger is infringed and it would never be accountable for simple
negligence while under Article 1756 of the Civil Code the presumption is that common carriers acted negligently
and not maliciously, and Article 1762 speaks of negligence of the common carrier.
An action for breach of contract imposes on the carrier a presumption of liability upon mere proof of injury of the
passenger; the latter does not have to establish the fault of the carrier, or of his employees, and the burden is placed
on the carrier to prove that it was due to an unforeseen event or to force majeure (Congco vs. Manila Railroad Co.
38 Phil., 768, 777.) Moreover, the carrier, unlike in suits for quasi-delict may not escape liability by proving that it
has exercised due diligence in the selection and supervision of its employees. (Art. 1759 New Civil Code, Cangco
vs. Manila Railroad Co. Supra; Prado vs. Manila Electric Co., 51 Phil., 900)
Relevant Provisions:
ART. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
ART. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find
that, under the circumstance, such damages are justly due. The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.
Article 1764. Damages in cases contained in this Section shall be awarded in accordance with Title XVIII of this
Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of
contract by a common carrier.
Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand
pesos, even though there may have been mitigating circumstances. In addition:
xxx xxx
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages
for mental anguish by reason of the death of the deceased.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless the prove that they observed extraordinary diligence as prescribed in article 1733and
1755
RT. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries,
it the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably
reduced.
Phil. Rabbit v. IAC, 189 SCRA 159
Doctrine:
In culpa contractual, the moment a passenger dies or is injured, the carrier is presumed to have been at
fault or to have acted negligently, and this disputable presumption may only be overcome by evidence that he had
observed extra-ordinary diligence as prescribed in Articles 1733, 1755 and 1756 of the New Civil Code or that the
death or injury of the passenger was due to a fortuitous event.
In any event, "[i]n an action for damages against the carrier for his failure to safely carry his passenger to his
destination, an accident caused either by defects in the automobile or through the negligence of its driver, is not a
caso fortuito which would avoid the carrier's liability for damages. ( Son v. Cebu Autobus Company , 94 Phil. 892
citing Lasam, et al. v. Smith, Jr., 45 Phil. 657; Necesito, etc. v. Paras, et al., 104 Phil. 75)
Relevant Provisions:
ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1746.
Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733
and 1755
LRTA v. Navidad, 397 SCRA 75
● Law and jurisprudence dictate that a common carrier, both from the nature of its business and for
reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety
of passengers.
● The law requires common carriers to carry passengers safely using the utmost diligence of very
cautious persons with due regard for all circumstances.
● The duty of a common carrier to provide safety to its passengers so obligates it not only during the
course of the trip but for so long as the passengers are within its premises and where they ought to be
in pursuance to the contract of carriage.
iii. Classes of common carriers
Art. 1732, 1733, 1755
iv. Law applicable

Arts. 1766, 1753
National Development Co. v. Court of Appeals, 164 SCRA 593
● In the determination of which laws govern loss or destruction of goods due to collision of vessels
outside Philippine waters, and the extent of liability as well as the rules of prescription provided
thereunde, Art. 1753 of the Civil Code provides that the law of the country to which the goods are to
be transported governs the liability of the common carrier in case of their loss, destruction or
deterioration.
● The Carriage of Goods by Sea Act, a special law, is merely suppletory to the provision of the Civil
Code.
● The laws of the Philippines will apply, and it is immaterial that the collision actually occurred in
foreign waters.
Additional readings:
Convention for International Civil Aviation (“Chicago Convention”)
1978 International Convention on Standards of Training,
Certification and Watchkeeping for Seafarer (with 2010 Manila Amendments)
1974 International Convention for the Safety of Life at Sea (SOLAS)
1972 Convention on the International Regulations for Preventing Collisions at Sea (COLREGs)
b. Common Carriage of Goods
i. Liability and presumption of negligence
Arts. 1733, 1734, 1735
Article 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745,
Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755
and 1756.
SUBSECTION 2. Vigilance Over Goods

Article 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the
same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods
are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as required in article 1733.
Ynchausti Steamship Co. v. Dexter, 41 Phil. 289
● In Section 646 of the Administrative Code it is provided that when Government property is transmitted
from one place to another by carrier, it shall be upon proper bill of lading, or receipt, from such carrier;
and it shall be the duty of the consignee, or his representative, to make full notation of any evidence of
loss, shortage, or damage, upon the bill of lading, or receipt, before accomplishing it.
● there is a presumption that the petitioner was to blame for the loss; and it was incumbent upon the
petitioner in order to entitle it to relief in this case to rebut that presumption by proving, as is alleged in
the petition, that the loss was not due to any fault or negligence of the petitioner
● The mere proof of delivery of goods in good order to a carrier, and of their arrival at the place of
destination in bad order, makes out a prima facie case against the carrier, so that if no explanation is
given as to how the injury occurred, the carrier must be held responsible. (4 R. C. L., p. 917.) It is
incumbent upon the carrier to prove that the loss was due to accident or some other circumstance
inconsistent with its liability. (Articles 361-363, Code of Commerce.)
Mirasol v. Dollar, 53 Phil 125
● If while in transit and the goods were damaged, the burden of proof shifts upon the defendant to both
allege and prove that the damage was caused by reason of some fact which exempted its liability.
● As to how the boxes were damaged, when or where, was a matter peculiarly and exclusively within the
knowledge of the defendant, and in the very nature of things could not be in the knowledge of the
plaintiff. To require the plaintiff to prove as to when and how the damage was caused would force him
to- call and rely upon the employees of the defendant's ship, which in legal effect would be to say that
he could not recover any damage for any reason
● The fact that the cases were damaged by "sea water," standing alone and within itself, is not evidence
that they were damaged by force majeure or for a cause beyond the defendant's control.
● The words "perils of the sea," as stated in defendant's brief apply to "all kinds of marine casualties,
such as shipwreck, foundering, stranding," and among other things, it is said: "Tempest, rocks, shoals,
icebergs and other obstacles are within the expression," and "where the peril is the; proximate cause of
the loss, the shipowner is excused." "Something fortuitous and out of the ordinary course is involved in
both words 'peril' or 'accident.'"
ii. Exemption from liability
1. Natural Disaster
Arts. 1734 (1), 1739, 1740;; Art. 361, Code of Commerce
Tan Chiong v. Inchausti, 22 Phil 153
[Old Civil Code]
Article 1601. Carriers of goods by land or by water shall be subject with regard to the keeping and preservation of
the things entrusted to them, to the same obligations as determined for innkeepers by articles 1783 and 1784.
The provisions of this article shall be understood without prejudice to what is prescribed by the Code of Commerce
with regard to transportation by sea and land.
Article 1602. Carriers are also liable for the loss of and damage to the things which they receive, unless they prove
that the loss or damage arose from a fortuitous event or force majeure.
[Code of Commerce]
Article 361 provides:
Merchandise shall be transported at the risk and venture of the shipper, unless the contrary was expressly stipulated.
Therefore, all damages and impairment suffered by the goods in transportation, by reason of accident, force majeure,
or by virtue of the nature or defect of the articles, shall be for the account and risk of the shipper.
The proof of these accidents is incumbent on the carrier.

ART. 362. The carrier, however, shall be liable for the losses and damages arising from the causes mentioned in the
foregoing article if it is proved that they occurred on account of his negligence or because he did not take the
precautions usually adopted by careful persons, unless the shipper committed fraud in the bill of lading, stating that
the goods were of a class or quality different from what they really were.
If, notwithstanding the precaution referred to in this article, the goods transported run the risk of being lost on
account of the nature or by reason of an unavoidable accident, without there being time for the owners of the same
to dispose thereof, the carrier shall proceed to their sale, placing them for this purpose at the disposal of the judicial
authority or of the officials determined by special provisions.
ART. 363. With the exception of the cases prescribed in the second paragraph of article 361, the carrier shall be
obliged to deliver the goods transported in the same condition in which, according to the bill of lading, they were at
the time of their receipt, without any detriment or impairment, and should he not do so, he shall be obliged to pay
the value of the goods not delivered at the point where they should have been and at the time the delivery should
have taken place.
If part of the goods transported should be delivered the consignee may refuse to receive them, when he proves that
he can not make use thereof without the others.
● The losses and damages suffered by a vessel and her cargo by reason of shipwreck or standing shall be
individually for the account of the owners, the part of the wreck which may be saved belonging to
them in the same proportion.
● And Article 841 of the same code reads:
● If the wreck or stranding should arise through the malice, negligence, or lack of skill of the captain, or
because the vessel put to sea insufficiently repaired and supplied, the owner or the freighters may
demand indemnity of the captain for the damages caused to the vessel or cargo by the accident, in
accordance with the provisions contained in articles 610, 612, 614, and 621.
● The general rule established in the first of the foregoing articles is that the loss of the vessel and of its
cargo, as the result of shipwreck, shall fall upon the respective owners thereof, save for the exceptions
specified in the second of the said articles.
● These legal provisions are in harmony with those of articles 361 and 362 of the Code of Commerce,
and are applicable whenever it is proved that the loss of, or damage to, the goods was the result of a
fortuitous event or of force majeure; but the carrier shall be liable for the loss or the damage arising
from the causes aforementioned, if it shall have been proven that they occurred through his own fault
or negligence or by his failure to take the same precautions usually adopted by diligent and careful
persons.
Martini v. Macondray, 39 Phil. 934

● In every contract of affreightment, losses by the dangers of the seas are excepted from the risks which
the master takes upon himself, whether the exception is expressed in the contract or not. The exception
is made by the law, and falls within the general principle that no one is responsible for fortuitous events
and accidents of major force. Casus fortuitous nemo praestat. But then the general law is subject to an
exception, that when the inevitable accident is preceded by a fault of the debtor or person bound
without which it would not have happened, then he becomes responsible for it.
● The maritime codes and writers have recognized the distinction between cargo placed on deck, with the
consent of the shipper, and cargo under deck. "There is not one of them which gives a recourse against
the master, the vessel, or the owners, if the property lost had been placed on deck with the consent of
its owner, and they afford very high evidence of the general and appropriate usages, in this particular,
of merchants and shipowners.
● it is apparent that the damage here was caused by rain and sea water — the risk of which is inherently
incident to carriage on deck — the defendant cannot be held liable. It is not permissible for the court,
in the absence of any allegation or proof of negligence, to attribute negligence to the ship’s employees
in the matter of protecting the goods from rains and storms. The complaint on the contrary clearly
indicates that the damage done was due to the mere fact of carriage on deck, no other fault or
delinquency on the part of anybody being alleged.
Asia Lighterage v. Court of Appeals, 409 SCRA 340
● Article 1732 of the Civil Code defines common carriers as persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air,
for compensation, offering their services to the public.
● A common carrier need not have fixed and publicly known routes. Neither does it have to maintain
terminals or issue tickets.
● Common carriers are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. They are presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated. To overcome the presumption of negligence in the case of loss,
destruction or deterioration of the goods, the common carrier must prove that it exercised extraordinary
diligence EXCEPT: Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following causes only: (1) Flood, storm,
earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether
international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the
goods or defects in the packing or in the containers; (5) Order or act of competent public authority.
GOVERNMENT VS. INCHAUSTI
(GR 6957, 14 February 1913)
Were the terms and conditions stamped by the defendant upon the Government’s bill of lading
binding upon the plaintiff?
The carrier is only liable where the evidence shows that he was guilty of some negligence and that the
damages claimed were the result of such negligence.
The record shows that ever since the Government began to use the bill of lading, the shipowners had
always used the "stamp" in question; that in the present case the defendant placed said stamp upon the
bill of lading before the plaintiff shipped the tiles in question; that having shipped the goods under the said
bill of lading, with the terms and conditions of the carriage stamped thereon, the plaintiff must be deemed
to have assented to the said terms and conditions thereon stamped. With reference to the contention of
the plaintiff that the Collector of Customs had no authority to make such regulations, it may be said in the
present case that the binding effect of the conditions stamped on the bill of lading did not proceed from
the authority of the Collector of Customs but from the actual contract which the parties made in the
present case. Each bill of lading is a contract and the parties thereto are bound by its terms.
WoN the plaintiff is bound by the terms and conditions – YES
Under the provisions of Article 361 of the Commercial Code, the defendant, in order to free itself from
liability, was only obliged to prove that the damages suffered by the goods were "by virtue of the nature or
defect of the articles." Under the provisions of Article 362 the plaintiff, in order to hold the defendant liable,
was obliged to prove that the damages to the goods by virtue of their nature, occurred on account of its
negligence or because the defendant did not take the precaution usually adopted by careful persons. The
defendant herein proved, and the plaintiff did not attempt to dispute, that the tiles in question were of a
brittle and fragile nature and that they were delivered by the plaintiff to the defendant without any packing
or protective covering.
GROUP 3
PART 2
1. Southern Lines v. CA, 4 SCRA 258
Is Southern Lines liable for the loss as a common carrier even if the loss
was due to the negligent packaging of NARIC?
If the fact of the improper packing is known to the carrier or his servants, or is
apparent among visual inspection but it accepts the goods notwithstanding such,
it is not relieved from liability resulting from the loss or injury resulting therefrom.
2. Ganzon v. Court of Appeals, 161 SCRA 646
There is no incompatibility between the Civil Code provisions on common

carriers and Articles 361 and 362 of the Code of Commerce. For Art. 1735 of the
Civil Code, conversely stated, means that the shipper will suffer the losses and
deterioration arising from the causes enumerated in Art. 1734; and in these
instances, the burden of proving that damages were caused by the fault or
negligence of the carrier rests upon him. However, the carrier must first establish
that the loss or deterioration was occasioned by one of the excepted causes or
was due to an unforeseen event or to force majeure. Be that as it may, insofar as
Art. 362 appears to require of the carrier only ordinary diligence, the same is
deemed to have been modified by Art. 1733 of the Civil Code.
3. Compania Maritima v. Insurance Company, 12 SCRA 213
Topic: Duration of Extraordinary Liability
Was there a contract of carriage between the carrier and the shipper?
Art. 1736, NCC. The extraordinary responsibility of the common carrier lasts
from the time the goods are unconditionally placed in the possession of, received
by the carrier for the transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to
receive them, without prejudice to the provisions of Article 1738.
The receipt of goods by the carrier has been said to lie at the foundation of
the contract to carry and deliver, and if actually no goods are received
there can be no such contract.
The test as to whether the relation of shipper and carrier had been established is,
had the control and possession of the cotton been completely surrendered by the
shipper to the railroad company? Whenever the control and possession of goods
passes to the carrier and nothing remains to be done by the shipper, then it can
be said with certainty that the relation of shipper and carrier has been
established.
Was the damage caused to the cargo or the sinking of the barge where it
was loaded due to fortuitous event would exempt the carrier from liability?
Art. 1738, NCC. The extraordinary liability of the common carrier continues to be
operative even during the time the goods are stored in a warehouse of the carrier
at the place of destination, until the consignee has been advised of the arrival of
the goods and has had reasonable opportunity thereafter to remove them or
otherwise dispose of them.
The liability and responsibility of the carrier under a contract for the
carriage of goods commence on their actual delivery to, or receipt by, the
carrier or an authorized agent… and delivery to a lighter in charge of a
vessel for shipment on the vessel, where it is the custom to deliver in that way,
is a good delivery and binds the vessel receiving the freight, the liability
commencing at the time of the delivery to the lighter.
The liability of the carrier as common carrier begins with the actual delivery
of the goods for transportation, and not merely with the formal execution of
a receipt or bill of lading; the issuance of a bill of lading is not necessary to
complete delivery and acceptance. Even where it is provided by statute that
liability commences with the issuance of the bill of lading, actual delivery and
acceptance are sufficient to bind the carrier.
4. Lu Do v. Binamira, 101 Phil 120
Topic - Duration of Extraordinary Responsibility
Is the carrier responsible for the loss of the cargo considering that the
occurred after the shipment was discharged from the ship and placed in
the possession and custody of the customs authorities?
Delivery of the cargo to the customs authorities is not delivery to the consignee,
or "to the person who has a right to receive them" as contemplated in Article
1736 of the New Civil Code, because in such case the goods are still in the
hands of the Government and the owner cannot exercise dominion over them.
However, the parties may agree to limit the liability of the carrier considering that
the goods have still to go through the inspection of the customs authorities before
they are actually turned over to the consignee. This is a situation where the
carrier loses control of the goods because of a custom regulation and it is unfair
that it be made responsible for any loss or damage that may be caused to the
goods during the interregnum. Therefore, the carrier cannot be held responsible
for the loss.
Art. 1736. The extraordinary responsibility of the common carrier lasts from
the time the goods are unconditionally placed in the possession of, and
received by the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them, without prejudice to the provisions of
Article 1738.
5. APL v. Klepper, 110 Phil 243
Duration of Extraordinary Responsibility
Is the bill of lading still binding upon the consignee although not signed by
him or his agent?
The bill of lading provides that a shipper or consignee who accepts the bill
becomes bound by all the stipulations contained therein, the said shipper or
consignee cannot elude its provisions simply because they prejudice him and
take advantage of those that are beneficial to him. If the shipper and consignee
paid the corresponding freight on his goods, it shows that he impliedly accepted
the bill of lading which was issued in connection with his shipment. Hence, the
same is binding upon him as if it had been actually signed by him or by any
person on his behalf.
Bill of lading is a written acknowledgement of receipt of goods and

agreement to transport them to a specific place and to a named person or
to his order..
6. Samar Mining Co., Inc. v. Nordeutscher Lloyd, 132 SCRA 529 (GR L-28673;;
10/23/84)
Topic - Duration of Extraordinary Responsibility
Are stipulations in Bills of lading exempting the carrier from liability for
loss or damage to the goods when the same are not in its actual custody
valid?
The validity of stipulations in bills of lading exempting the carrier from

liability for loss or damage to the goods when the same are not in its actual
custody has been upheld by Us in PHOENIX ASSURANCE CO., LTD. vs.
UNITED STATES LINES, 22 SCRA 674 (1968), ruling that “pursuant to the terms
of the Bill of Lading, appellee's responsibility as a common carrier ceased the
moment the goods were unloaded in Manila and in the matter of transshipment,
appellee acted merely as an agent of the shipper and consignee”
The extent of appellant carrier's responsibility and/or liability in the
transshipment of the goods in question are spelled out and delineated under
Section 1, paragraph 3 of Bill of Lading No. 18, to wit: “the carrier shall not be
liable in any capacity whatsoever for any delay, loss or damage occurring before
the goods enter ship's tackle to be loaded or after the goods leave ship's tackle
to be discharged, transshipped or forwarded”. Further, in Section 11 of the same
bill, it was provided that “this carrier, in making arrangements for any trans
shipping or forwarding vessels or means of transportation not operated by this
carrier shall be considered solely the forwarding agent of the shipper and without
any other responsibility whatsoever even though the freight for the whole
transport has been collected by him… Pending or during forwarding or
transshipping the carrier may store the goods ashore or afloat solely as agent of
the shipper…”
7. Eastern Shipping v. CA, 234 SCRA 79 (GR 97412;; 7/12/94)
TOPIC: DURATION OF EXTRAORDINARY RESPONSIBILITY
The common carrier’s duty to observe the requisite diligence in the shipment of goods
lasts from the time the articles are surrendered to or unconditionally placed in the
possession of, and received by, the carrier for transportation until delivered to, or until
the lapse of a reasonable time for their acceptance by, the person entitled to receive
them.
When the goods shipped either are lost or arrive in damaged condition, a presumption
arises against the carrier of its failure to observe that diligence, and there need not be
an express finding of negligence to hold it liable.
8. Heacock v. Macondray 42 Phil 205
Topic: AGREEMENT LIMITING LIABILITY - As to amount of liability
May a common carrier, by stipulations inserted in the bill of lading, limit its liability for
the loss of or damage to the cargo to an agreed valuation of the latter?
Three kinds of stipulation have often been made in a bill of lading.
1. one exempting the carrier from any and all liability for loss or damage occasioned
by its own negligence.
2. one providing for an unqualified limitation of such liability to an agreed valuation.
3. one limiting the liability of the carrier to an agreed valuation unless the shipper
declares a higher value and pays a. higher rate of freight.
According to an almost uniform weight of authority, the first and second kinds of
stipulations are invalid as being contrary to public policy, but the third is valid and
enforceable.
A carrier may not, by a valuation agreement with a shipper, limit its liability in case of the
loss by negligence of an interstate shipment to less than the real value thereof, unless
the shipper is given a choice of rates, based on valuation. A limitation of liability based
upon an agreed value to obtain a lower rate does not conflict with any sound principle of
public policy; and it is not conformable to the plain principle of justice that a shipper may
understate value in order to reduce the rate and then recover a larger value in case of
loss.
9. Shewaram v. PAL 17 SCRA 606
What is the liability of Airline (as Common Carrier)?
Article 1750 of the NCC provides that the pecuniary liability of a common carrier may, by
contract, be limited to a fixed amount. It is required, however, that the contract must be
“reasonable and just under the circumstances and has been fairly and freely agreed upon.”
In this case, the court believes that the requirements of said article have not been met. It
cannot be said that the petitioner had actually entered into a contract with the PAL,
embodying the conditions as printed at the back of the ticket stub that was to the petitioner.
The fact that those conditions are printed at the back of the ticket stub in letters so small that
they are hard to read would not warrant the presumption that the petitioner was aware of
those conditions such that he had “fairly and freely agreed” to those conditions.
10. Ong Yiu v. CA, 91 SCRA 223
How is the Doctrine of Limited Liability of a Airline (as Common Carrier)

applied in this case?
The limited liability applies in this case. On the presumed negligence of PAL, its liability for
the loss however, is limited on the stipulation written on the back of the plane ticket which is
P100 per baggage. The petitioner not having declared a greater value and not having called
the attention of PAL on its true value and paid the tariff therefore. The stipulation is printed in
reasonably and fairly big letters and is easily readable. Moreso, petitioner had been a
frequent passenger of PAL from Cebu to Butuan City and back and he being a lawyer and a
businessman, must be fully aware of these conditions.
11. Pan Am v. IAC, G.R. No. L-70462, 164 SCRA 268, Aug. 11, 1988
What is the importance of a plane ticket being a contract of adhesion in the

limitation of a carrier’s liability?
A plane ticket, being a contract of adhesion, binds a passenger to its provisions even if he or
she may not have signed it. The provisions in a plane ticket have been held to be a part of
the contract of carriage, and are valid and binding upon the passenger regardless of the
latter’s lack of knowledge or assent to the regulation. The carrier, in imposing the conditions
set forth in its plane tickets, is proposing a ready made form of contract or a contract of
adhesion. The passenger who adheres to the contract, by buying the plane ticket, is in reality
free to reject it entirely. If he or she adheres, consent is given. Hence, any provision therein
limiting the carrier’s liability will generally be upheld as valid.
12. Cathay Pacific v. CA, 219 SCRA 520
What is the applicability of treaties and/or international conventions

entered into by the Philippines relating to the limitation of the amount of
liability of air carriers?
Treaties and international conventions relating to the regulation of common carriers form part
of the law of the land when entered into and ratified by the Philippines. Nevertheless, they do
not suspend the operation of domestic laws on the subject matter. In this case, the carrier
sought to limit its liability by invoking the Warsaw Convention or the Convention for the
Unification of Certain Rules relating to International Carriage by Air. It was held that the
enumerated limitations on the amount of liability on the cases contemplated in the
convention were not exhaustive in nature as the same convention explicitly provided that
willful misconduct on the part of the carrier will preclude it from availing such limitations on
liability. Therefore, in determining the amount of liability, the domestic laws of the court to
which the case is heard will apply.
N.B. The 1922 Warsaw Convention, as amended in 1955, was superseded by the 1999
Montreal Convention upon ratification by the Philippine Senate in 2015
GROUP 4
SECOND REPORTING
1. Maersk Line vs. CA

G.R. No. 94761, May 17, 1993
Agreement Limiting Liability

(As to delay in service)
While it is true that common carriers are not obligated by law to carry and to deliver merchandise,
and persons are not vested with the right to prompt delivery, unless such common carriers
previously assume the obligation to deliver at a given date or time delivery of shipment or cargo
should at least be made within a reasonable time.
A delay in the delivery of the goods spanning a period of two (2) months and seven (7) days falls
was beyond the realm of reasonableness. Described as gelatin capsules for use in pharmaceutical
products, subject shipment was delivered to, and left in, the possession and custody of petitioner-
carrier for transport to Manila via Oakland, California. But through petitioner's negligence was
mishipped to Richmond, Virginia. Petitioner's insistence that it cannot be held liable for the delay
finds no merit.
2. CESAR L. ISAAC v. A. L. AMMEN TRANSPORTATION CO., INC.,

G.R. L-9671, August 23,1957
Nature and Extent of Responsibility
Principles governing the liability of a common carrier:
1.The liability of a carrier is contractual and arises upon breach of its obligation. There is breach if
it fails to exert extraordinary diligence according to all circumstances of each case.
2.A carrier is obliged to carry its passenger with the utmost diligence of a very cautious person,
having due regard for all the circumstances.
3.A carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to,
passengers, it being its duty to prove that it exercised extraordinary diligence. However, the
carrier is not an insurer against all risks of travel.
"A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard for all
circumstances. This extraordinary diligence required of common carriers is calculated to protect
the passengers from the tragic mishaps that frequently occur in connection with rapid modern
transportation. This high standard of care is imperatively demanded by the preciousness of human
life and by the consideration that every person must in every way be safeguarded against all
injury. (Report of the Code Commission, pr. 35-36)" (Padilla, Civil Code of the Philippines, Vol.
IV, 1956 ed., p. 197).
3. Landingin vs. Pangasinan Transportation Co., 33 SCRA 284

G.R. No. L-28014-15 May 29, 1970
Nature and Extent of Responsibility
When a passenger dies or is injured, the presumption is that the common carrier is at fault or that
it acted negligently (Article 1756). This presumption is only rebutted by proof on the carrier's part
that it observed the "extraordinary diligence" required in Article 1733 and the "utmost diligence
of very cautious persons" required in Article 1755 (Article 1756). In the instant case it appears
that the court below considered the presumption rebutted on the strength of defendants-appellants'
evidence that only the day before the incident, the crossjoint in question was duly inspected and
found to be in order. It does not appear, however, that the carrier gave due regard for all the
circumstances in connection with the said inspection. The bus in which the deceased were riding
was heavily laden with passengers, and it would be traversing mountainous, circuitous and
ascending roads. Thus the entire bus, including its mechanical parts, would naturally be taxed
more heavily than it would be under ordinary circumstances. The mere fact that the bus was
inspected only recently and found to be in order would not exempt the carrier from liability unless
it is shown that the particular circumstances under which the bus would travel were also
considered.
4. Landicho v. BTC., 16264-R, September 20, 1956
Nature and extent of liability
A common carrier is duty bound to safely transport its passengers from point of origin to place of
destination, but the duty does not encompass all the risks of a passenger in transit (common
carrier is not an insurer of all risks). A carrier cannot be charged with all the diligence for each
and every passenger. It is enough that its employees see to it that the passenger places himself
safely in the vehicle, that it is operated carefully, and that the vehicle is not defective, so as to
avoid mishaps. It would be unreasonable to expect common carriers to foresee that a passenger
will become dizzy or sleepy in transit.
5. Necessito v. Paras
G.R. No. L-10605, June 30, 1958
Why is the common carrier liable for the manufacturing defect of the vehicle?
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for
all the circumstances. It is clear that the carrier is not an insurer of the passengers’ safety. His
liability rests upon negligence, his failure to exercise the “utmost” degree of diligence that the law
requires, and by Art. 1756, in case of a passenger’s death or injury the carrier bears the burden of
satisfying the court that he has duly discharged the duty of prudence required.
Is visual inspection sufficient?
No. Visual inspection of the vehicle will not measure up to the required legal standard of “utmost
diligence of very cautious persons” “as far as human care and foresight can provide”, and
therefore that the knuckle’s failure can not be considered a fortuitous event that exempts the
carrier from responsibility.
6. PHILIPPINE AIR LINES, INC., Petitioner, vs. THE COURT OF APPEALS and JESUS V.
SAMSON
WHY IS THERE NEGLIGENCE ON THE PART OF THE CARRIER?
There was gross negligence by PAL for allowingCapt. Bustamante to fly on the that fateful day of
the accident, even if he was sick, having tumor on his nose. The negligence of PAL is clearly a
quasi-delict and therefore Art. 2219(2) isapplicable, justifying the recovery of moral damages.
Even from the standpoint of the petitioner that there is an employee-employer relationship
between it and private respondent arising from the contract of employment, private respondent is
still entitled to moral damages in view of the finding of bad faith or malice, applying the
provisions ofArticle 2220.
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for
all the circumstances. It is clear that the carrier is not an insurer of the passengers’ safety. His
liability rests upon negligence, his failure to exercise the “utmost” degree of diligence that the law
requires, and by Art. 1756, in case of a passenger’s death or injury the carrier bears the burden of
satisfying the court that he has duly discharged the duty of prudence required.
7. SULPICIO LINES, INC vs. THE HONORABLE COURT OF APPEALS and JACINTA L.
PAMALARAN
WHAT IS THE CONNECTION OF ONEROUS CONTRACT TO TRANSPORTATION?
In onerous contracts the cause is understood to be, for each contracting party, the prestation or
promise of a thing or service by the other. Despite the absence of a passenger-carrier relationship
between them, the appellate court, just the same, held the patron there of liable as a common
carrier.
8. JAL v. Court of Appeals 449 SCRA 544 (2005)

Extent of Contract of Carriage:
The power to admit or not an alien into the country is a sovereign act which cannot be
interfered with even by JAL. This is not within the ambit of the contract of carriage entered
into by JAL and herein respondents.
9. Cangco v. Manila Railroad 38 Phil.767 (1918)

Duration of Responsibility:
Article 1903 of the [Old] Civil Code is not applicable to obligations arising ex contractu, but only
to extra-contractual obligations - or to use the technical form of expression, that article relates only
to culpa aquiliana and not to culpa contractual
Difference of Applicability of culpa Contractual from culpa Aquiliana:
Relations already formed give rise to duties, whether springing from contract or quasi-contract,
then breaches of those duties are subject to article 1101, 1103, and 1104 of the same code. (Rakes
vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)
10. Del Prado V Meralco, 52 phil 900
Proximate cause of the negligent of company’s servant succeeded the
negligent act of the plaintiff.
Whether the act of the motorman was the proximate cause
The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and
in failure on the part of the carrier to use due care in carrying its passengers safely is a breach of
duty (culpa contructual) under articles 1101, 1103 and 1104 of the Civil Code. Furthermore, the
duty that the carrier of passengers owes to its patrons extends to persons boarding the cars as well
as to those alighting therefrom.
The case of Cangco vs. Manila Railroad Co. (38 Phil., 768).This court held that the railroad
company was liable for breach positive duty (culpa contractual), and the plaintiff was awarded
damages in the amount of P2,500 for the loss of his arm.
The distinction between these two sorts of negligence is important in this jurisdiction, for the reason
that where liability arises from a mere tort (culpa aquiliana), not involving a breach of positive
obligation, an employer, or master, may exculpate himself, under the last paragraph of article 1903
of the Civil Code, by providing that he had exercised due diligence to prevent the damage; whereas
this defense is not available if the liability of the master arises from a breach of contractual duty
(culpa contractual).
Yes. The direct and proximate cause of the injury was the act of appellant's motorman in putting on
the power prematurely. One where the negligent act of the company’s servant succeeded the
negligent act of the plaintiff, and the negligence of the company must be considered the proximate
cause of the injury.
The doctrine of “the last clear chance” in this doctrine the contributory negligence of the party
injured will not defeat the action if be it be shown that the defendant might, by the exercise of
reasonable care and prudence, have avoided the consequences of the negligence of the injured party.
11. La Mallorca vs. CA, Gr no. L-20761

Duration of responsibility
Whether or not the child was no longer the passenger of the bus involved in the incident, and
therefore, the contract of carriage was already terminated?
The child was still a passenger of the bus. It has been recognized as a rule that the relation of carrier
and passenger does not cease at the moment the passenger alights from the carrier’s vehicle at a
place selected by the carrier at the point of destination, but continues until the passenger has a
reasonable time or a reasonable opportunity to leave the carrier’s premises.
In the first place, the driver, although stopping the bus, nevertheless did not put off the engine.
Secondly, he started to run the bus even before the bus conductor gave him the signal to go and
while the latter was still unloading part of the baggages of Beltran. The presence of said passengers
near the bus was not unreasonable and they are therefore to be considered still passengers of the
carrier entitled to the protection under their contract of carriage.
12. Vda. de Bataclán, et al. vs. Medina, 102 Phil. 181, October 22, 1957
Does the proximate cause of the death of the plaintiff due to the overturning of the bus
attributable to the negligence of the carrier and his agent?
There is no question that under the circumstances, the defendant carrier is liable. We do not
hesitate to hold that the proximate cause of the death of Bataclán was the overturning of the bus
through the negligence of the defendant and his agent. When the vehicle turned not only on its
side but completely on its back, the leaking of the gasoline from the tank was not unnatural or
unexpected that the coming of the men with a lighted torch was in response to the call for help,
made not only by the passengers, but most probably, by the driver and the conductor themselves,
and that because it was very dark (about 2:30 in the morning), the rescuers had to carry a light
with them; and coming as they did from a rural area where lanterns and flashlights were not
available, they had to use a torch, the most handy and available; and what was more natural than
that said rescuers should innocently approach the overturned vehicle to extend the aid and effect
the rescue requested from them. In other words, the coming of the men with the torch was to be
expected and was a natural sequence of the overturning of the bus, the trapping of some of its
passengers and the call for outside help.
That the failure of the driver and the conductor to have cautioned or taken steps to warn the
rescuers not to bring the lighted torch too near the bus, constitutes negligence on the part of the
agents of the carrier under the provisions of the Civil Code, particularly, Article 1733, 1759 and
1763 thereof.
THIRD REPORTING
GROUP 1
GROUP 2
GROUP 3
GROUP 4

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FIRST REPORTING - GROUP 1

1. Munn v. Illinois, 94 U.S. 113 (1876)

When does the property become clothed with public interest?

What is “Public Service” as defined in Public Service Law?

3. REPUBLIC OF THE PHILIPPINES VS. MERALCO, 391 SCRA 700

What is the legal basis and rationale for regulation?

4. Albano v Reyes, 175 SCRA 264

5. KMU Labor Center v Garcia, 239 SCRA 386

What is a Public Utility?

7. Tatad v. Garcia, 243 SCRA 436

9. In the Matter of: The Corporate Rehabilitation of Bayan Telecommunications, Inc.,

Is the power to grant licenses or authorize the operations of PU exclusive to Congress?

11. RCPI vs NTC, G.R. No. 93237 November 6, 1992

13. DAVID VS. MACAPAGAL-ARROYO, G.R. NO. 171396, MAY 3 2006

Can the President alone take over privately-owned public utility?

a) There must be a war or other emergency.

b) The delegation must be for a limited period only.

Kuwait Airways v. Philippine Airlines, G.R. No. 156087, May 8, 2009

Albano v. Reyes, supra

PLDT v. NTC, G.R. No. 88404, October 18, 1990

Francisco v. Toll Regulatory Board, GR 166910, Oct. 19, 2010

Relate to Public Service Act, Section 16 (a), Sec. 18

Vda. De Lat v. PSC, G.R. No. L-34978, Feb. 26, 1988

KMU Labor Center v. Garcia, 239 SCRA 386

ii. Revocation or Cancellation

Relate to Public Service Act, Section 16(m)

iii. CPC v. CPCN

See Public Service Act, Section 15

See Public Service Act, Sections 16 (c) and 20 (a)

Republic of the Philippines v. Meralco, 39 (SCRA 700, Nov. 15, 2002)

KMU Labor Center v. Garcia, 239 SCRA 386

ii. Provisional Rates

Padua v. Ranada, G.R. No. 141949, October 14, 2002

Freedom from Debt Coalition v. Energy Regulatory Commission, G.R. No.161113

2. BF Homes v. Meralco, GR 171624, Dec. 6, 2010

What is Public Service?

"Public service" or "Public utility" as including "every individual, copartnership,

3. Francisco v. Toll Regulatory Board, GR 166910, Oct. 19, 2010

4. Napocor v. Court of Appeals, 279 SCRA 506

Topic - Area Operation

Who shall determine the right to supply electric power to an area?

5. Montoya v. Ignacio, G.R. No. L-5868, December 29, 1953

Topic - Approval of Sale and Mortgages of Public Utility Assets or Equity

Since a franchise is personal in nature any transfer or lease thereof should be

6. Y TRANSIT CO. v. NLRC, GR No. 88195-86, January 27, 1994

Topic: Approval of Sale and Mortgages of Public Utility Assets or Equity

Is BOT approval necessary for the transfer of the buses to be valid?

Since a franchise is personal in nature, any transfer or lease thereof should be

7. PLDT v NTC, GR 88404, Oct. 18, 1990

8. Republic v. International Communications Corporation, G.R. No. 141667, July

9. Taxicab Operators of Metro Manila v. Board of Transportation, G.R. No L-59234,

Whether or not the memorandum is constitutional even if such was passed

10. PANTRANCO v. PSC, GR No. 47065, June 26, 1940

Should PANTRANCO be granted the right to a hearing to present its own

1. DOMINADOR RAYMUNDO vs. LUNETA MOTOR CO., ET AL.,

2. Cogeo-Cubao Operator & Driver Association v. CA,

3. San Pablo v. Pantranco, 153 SCRA 199, August 21, 1987

Prior Operator Rule

5. Teja Marketing vs. Intermediate Appellate Court 148 SCRA 347

6. Lim v. CA, G.R. No. 125817, January 16, 2002

What is Kabit system?

Purpose of the liability under Kabit system?

3. Francisco v. Toll Regulatory Board, GR 166910, Oct. 19, 2010  

7. PLDT v NTC, GR 88404, Oct. 18, 1990  