PUBLIU

AND

TRANSPORTATION
U T I L I T I E SL A W
OF
ESSENTIALS

provided
for in the
are
comma
on
special
rules or care
reason
that
higher
degree
from the agic
this ofa
for imposition
the
p a s s e n g e r s

rapid modern
precisely
The with
s protect c o n n e c t i o n d CHAPTER 1
Code. demando

New
Civil
calculated
to in i m p e r a t i v e l y

occu
ceur
is eration that
ofcare
c a r r i e r s w a s
c o n s i d e r a

frequently

mishaps
that standard

by
the
all injury
" GENERAL CONSIDERATIONS
This high
and
life agalnst
human
r a n s p o r t a t i o n .

of safeguarded

be a n d basio
the preciousn way
by must in every concepts
every
person of general Unless
otherwise
consists

of this
work transportation. bv 1. DEFINITION OF CONTRACT OF TRANSPORTA-
Part I of transportation

that apply
to all
types
and rules
apply
to
o n Common
TION. There is a contract of transportation when a person obligates
rules these concepts Civil Code
provisions

t h a t apply to
himself to transport persons or property from one place to another
indicated, The New rules for a consideration, The contract may involve carriage of passengers
land, w a t e r
and air.
so to
speak. Special a i r a r e s e p a r a t e l v
center-stage by or carriage of goods. The person who obligates himself to transport
C a r r i e r s take
and
t r a n s p o r t a t i o n
of common
transportation
'The d u t i e s the goods or passengers may be a common carrier or a private car-
respectively. on
maritime III, discussions
Parts II and rier.
extended
d i s c u s s e d in
and
analyzed in Chapter
discussed and
carriers
are
extraordinary
diligence
can
be foundthe Code of 2. PARTIES. The parties to a contract of transportation
exercise including would depend on whether it is for carriage of passengers or carriage
the duty to contract of
carriage,
formalities of the New Civil Code provisions
The and of goods.
3.
Commerce provisions
on bills oflading
d i s c u s s e d in Chapter
4.
w e r e also
extensively
air 2.01.CARRIAGE OF PASSENGERS. The parties in a
documents of title, to t r a n s p o r t a t i o n by
that apply specifically carriage of passengers a r e the common carrier and
on

first part, Chapter 5, contract of

Rules on formalities the
last chapter of
a r e discussed
in Part III. The c o n d i t i o n s precedent ina the pasSsenger. A passenger is deffned as one who travels in
to causes action,
discusses
m a t t e r s relating
that may recovered a public conveyance by virtue of contract, express or which
implied
is
limitations, and damages carrier as to the payment of fare or that
filing cases, statute of carriers.
with the
in cases filed against common
accepted as an equivalentthereof.
Gratuitous o r reduced fare. It should
be noted in
a.
is still considered
this connection, however, that a passenger
e v e n if he is being
carried gratuitously
a s such (passenger)
to the rule in Article
or under reduced fare. This is subject
1758 of the Civil Code which provides
that passenger
when a
limiting the common
is carried gratuitously, a stipulation
carriers liability for negligenceis valid"
Court of Appeal,
Transit Corporation v.
In Baliwag
b. bus company
against the petitioner
a complaint for damages of legal age) and
his
w a s filed by
the injured party (a person

31731-R,
Manila Railroad
Company, No.
et al. v . The
Jesusa Vda. De Nueca,
13 CAR2s 49, 53.
January 30, 1968,
2See Chapter 3. SCRA 849.
169
G.R. No. 80447,
January 31, 1989,

Report of the Code Commission, reproduced in Civil Code

p. 582, Carmelo V. Sison, Editor. Reader, 2005, Ed.,
 UBLIC
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AND
TRANSPORTATION
U V T I L I T T E SL A W
OF
ESSENTIALS

4
the said injured party sustained
said
injured
n a r

PARTI-COMMON
Chapter 1 General PROVISIONS 5
Considerations
-

that n one of
was a passeng
injuries he
for the when
party
parents a r aecident Tter.
parents the injured
Later, the
accident

ai ived
receiv
agreement to carry the passenger at
lease of
vehicular

in a petitioner. a and
executed
is
consensual and is therefore some future date. This contract
ofthe
insurer

the
buses
from the
lismissed beca
disn
petitioner's
complaint
ause the
was is the perfected by
contract of carriage or of common mere consent.which
The second
payment

Claim. In
due course,
the
that the
execution of be considered a real contract for carriage itself should
trial court
believed
and its
Only the
Only
insurance. the parent are actualy used can the carriernot until the facilities of the carrier
However, the SupremDe the obligation of the be said to have already
discharged
the petitioner Dpealed.
appealed.
H
at since the suit was carrier. assumed
ruling that.
passenger

of the injured
the dismissal, eal party-in-intererest
a.
Perfection of Contract of
respect to carriage of goods, there mayCarriage
sustained the reai of Goods. With
Court carriage,
contract of
of r iis the contract
latter be a consensual contract
for breach
passenger
because the
maintain.an action becau:
acting to carry goods
whereby the carrier agrees to
goods at some future date. However, by the accept
w a s the
injured cannot and transport
parents hro
party. Hence, his parties-in-interest action for act of delivery the
reach goods, that is, "when the goods larel unconditionally placed of
in a n
not real
they are
action based on contract
mnat in
possession and control of the carrier, and upon their receipt by the
of contract of carriage. Every been the
contractialright has carrier for transportation, the
bebrought by the person whose contract of carriage lis] perfected."
invaded. b. In British Airways, Inc. v. The Hon. Court
2.02. CARRIAGE OF GOODS. The parties are the of Appeals* the
Supreme Court ruled that an action for damages may be sustained
the contractt is for carriage for breach of
shipper and the carrier when of contract
to carry.
Even if no tickets were issued, a
verbal contract to carry is already a
goods. The shipperis the personwho delivers the goods to the binding consensual contract. In
the said case, the petitioner repeatedly failed to
carrier for transportation. Theshipper 1s fhe person who pays transport contract
theconsideration or on whosebehalfpayment is made. workers bound for Jeddah, Saudi Arabia although the costs of airfare
tickets were already paid to the petitioner. Confirmed bookings were
a. Consignee. The consignee is the person to whom
thegoods are to be delivered. The consignee may be the shipper cancelled without prior notice. Hence, the petitioner was made liable
for its breach of obligation to transport the contract workers.
himself as in the case where the goods will be delivered to one of
the branch offices of the 3.01. AIRCRAFT: There is a perfected contract to
shipper. However, the consignee may
be a third person who is not
actually a carry passengers even if notickets have been issued to said
to the party contract.
b.
When Consignee
is bound passengers so long as there was already a meetingof minds
theless, there are instances when the by Contract. Never withrespect to the subject matter and the consideration."
bound by the
agreement between the shipper and consignee
isthird-party a. On the other hand, there is a perfected contract
For instance, in the carrier.
one case, the
Supreme Court ruled that of carriage between a passenger and an airline if it can be
the consignee may be established thatthe passenger had checked in atthe departure
conditionstheof the bill ot deemed
lading
to be bound by the
where terms and counter, passed through customs and immigration, boarded
accepted it was
same and is trying to established that he the shuttle bus and proceeded to the ramp of the aircraft and
3. enforce the agreement. thathis baggage had alreadyhisbeen loaded in the aircraf to be
casethe view that PERFECTION. ThetwoSupreme Court has
there flown with the passenger to destination."
of
passengers. "The first are
(2) adopted in one
type is the types of
contract contracts carriage of
to carry,
that is, a Tbid. 161 SCRA
Everett No. L-48757, May 30, 1988,
8, 1998, 297 Steamship Mauro Ganzon v. Court of Appeals, et al.,
British
SCRA 496, 505. Corporation v.
Court of 646, 650.
699, citing Airways v. Court of Appeals, et al., No. 122494, G.R. No. 92288, February 9,
1993.
Paras, Civil Code Appeals, No. c Tbid. 3, 1994, 234
Court of Appeals, No. 114061, August
Annotated, Vol. V, 92288,
p. 429. February 9, 1993,
19 218 SCRA
OKorean Airlines Co. Ltd.
v.

SCRA 717, 723.

 ON AND PUJBLI
ESSENTIALSOFTRANSPORTATION
UTITIESLA W
PARTI COMMON PROVISIONS
Chapter 1 - General Considerations
CARS. With
AND STREET
STREET

AND
Sin
EPNEY5
JEEPNEYS,
cars, the
street
the Supreme Court
cars, PROBLEM:
3.02
BUSESs,

jeepneys,
or
nublic util
utility bus.tor.jeepney)
publie
to
buses,
of
that once
a
offer to bus riders.
continuous
1. X brought seven (7) sacks of palay to the PNR. He paid its
respect

in one
case"

a their
con. freight charges and was issued Way Bill no. 1. The cargo
explained

eftect
making
tostop COnveyances was loaded on the freight wagon of the train. Without
in drivers
itis of the affor
stops,
theduty orderto any permission, X boarded the freight wagon and not
Hence, itis thof
length timein
oftime thev liable for
areliable
theyare
for injuries the passenger coach. Shortly after the train started, it
reasonable
enter, and the was derailed. The freight wagon fell on its side, killing X.
fora ta.hoard and resulting from the sudden
resulting
from
a r r i e riis
salrea
opportunity passengers carrier There is no evidence that X brought a ticket or paid his
the c of
boarding fare at the same time that he paid the freight charges for
sufteredby
Liability
carrier. assenger is deeme to
of the that the pas his cargo. Is Xa passenger of PNR?
starting up It follows boa
contract. attémpting to the
based on he is already A: No, X was not a "passenger." X, who was a "stowaway,"
offer if perfected from that
be accepting
the carriage is pe trespasser. Hence, the carrier assumes no
c o n t r a c t of was a mere
and the
conveyances
duty of care in favor of X. (1989)
train service, for a
point.
who wants to board a train in 2. City Railways, Inc. (CRI) provides
A person Manila to Calamba, Laguna.
3.03. TRAINS. nd must present fee, to commuters from
ticket and tickets and then
a railway
must purchase a
station
for
Commuters are required to purchase
and unloading facilities to
himself at the proper place
and n a proper manner proceed to designated loading
intention purchased a ticket for
have a bona fide Ricardo Santos
board the train.
transportathon. Such person must suffñcient fare with Calamba and entered the station.
While waiting, he had
possess
to use the facilities of the carrier, an altercation with the security
guards of CRI leading to
a

present himself to the carrier a train

whichto pay for his passage, and on the railway just
as
fistfight. Ricardo Santos fell
and manner provided. If he does the station. Ricardo Santos
was run over by
for transportation in the place was entering
not do so, he will not be considered passenger.12
a the train. He died.
filed by the heirs of Ricardo
Consequently, there was breach of contract of In the action for damages
a.
lack of cause of action, contending
Authority (LRTA), et al. v. Santos, CRI interposed
carriage in Light Rail Transit occurred before Ricardo Santos
boarded
that the mishap
Marjorie Navidad, et al." when a certain Nicanor Navidad died the train and that it
w a s not guilty
of negligence. Decide.

after he fell on the LRT tracks and was struck by a moving train have no c a u s e of
action
CRI that the heirs
which was coming in at the exact moment that Mr. Navidad A: The contention of contract to
a perfected
There w a s already
fell from the platform. Mr. Navidad was treated as a is untenable. owed him
passenger Santos and the carrier already
Ricardo
the carrier to
The obligation of
because he entered the LRT station after carry
a
having purchased extraordinary diligence. w a s breached,
token and he fell while he was on the platform waiting for Santos to his: destination
a train.
carry Ricardo (2008)
Thus, Mr. Navidad was in the hence, CRI is liable for culpa-contractual.
boarding the train with the intention of place designated
for
Code
train. riding the oncoming Article 1732 of the Civil
CARRIER.
COMMON
4. viz.:
definition of c o m m o n carriers,
provides the
cor
carriers are persons,
Common
ARTICLE 1732. in the busi-
a s s o c i a t i o n s engaged
firms or o r goods
porations, passengers
or transporting offering
Dangwa Transportation carrying
of compensation,
7, 1991, 202 SCRA o r air, for
ness
Co., Inc. v. Court of land, water,
574, 580. Appeals, et« al., No. 95582, October or both, by
Jesusa Vda. de
31731, January 30, Nueca, et al. v. The their services to the public.
1"No. 145804, 1968, 13 CAR2s 49. Manilar Railroad No.
February 6, 2003. Company, CA-G.N.
 PUBLJO

AND

TRANSPORTATION
UTILITIESLAW
OF
ESSENTIALS PARTI COMMON PROVISIONS
Chapter
thatholdsitselfout
holds 1-
General Considerations
defined
as
"ons fefor hire as a public
"one
goods
been
of
a l s ot r a n s p o r t a t i o n "u (3) Hemust undertake to carry by the(method by which
has
It
.
inthe
occupation.

his businessis conducted and oyer his established roads, jand /

read to
engage
and
not a s a
casual
The concept
of
"commo (4)
emplovment

PUBLIC
SERVICE.

may De
seen
to ide neatly
coincide

Publia
The transportation must bé for hire
4.01. 1732 the Serv
carrier
under
Article
service,"

of "public 1416, as
under

as aamended)
m e n d e d ) -which at least
a.
n National Steel Corporation v. Court of Appealsthe
Supreme Court reiterated the ruling that the true test ofa common
the
notion
No. fo
carriers set rth
with
Act common
in
In carrier is the carriage of goods or_passengers, provided it has
of the
(Commonwealth
on
Act the law (b) of the Pub
partially
supplements
Section 13,
paragraph
spacefor all who opt to avail themselves ofits transportation for a
the Civil
Code."
Under
service"includes: fee
Service Act,
public b. Bascos v. Court of Appealsy the Supreme Court
ereafter may
here may own,
own,
that n o w or hire
explained that the test to determine a common carrier is whether
person Philippines, for
thegiven undertaking is-part of the business engaged in by the
"every
control in the
manage,
or
or imited
clientele.
operate,
with general carrier which he has held out to the general public as his occupation
compensation, and done
or occasional or accidental, rather than the quantity or extent of the business transacted.
whether permanent, carrier, common
any
for general
business purposes,
subway motor C. The Supreme Courtruled in Spouses Cruz v. Sun Holidays,
traction railway, clients by virtue
railroad, street railway, with Inc. that the operator ofa beach resort that accepts
or passenge,
or both, or
to and from
vehicle, either for freight be classifica- of a tour package-contracts that included transportationconsidered a
without fixed route and
whatever may its is
of any class, express s e r
the Resort and the point of departure in Batangas
or carrier service observed that its ferry services are
so
tion, freight common carrier. The Court
ferries and
vice, steamboat, or steamship line, pontines, intertwined with its main business as to
be properly, considered
water craft, engaged in the transportation of passengers ferry services in its
ancillary thereto. The constancy of respondent's its
or freight or both, shipyard, marine repair shop, wharf or its having own boats. And
resort operations is underscored by be
dock, ice plant, ice-refrigeration plant, canal, irrigation include the ferry services, may
the tour packages it offers, which These services
system, gas, electric light, heat and power, water supply to pay the same.
availed of by anyone who can afford
and power petroleum, sewerage system, wire or wire are thus available to the public.
less communications systems, wire or wireless broad- carriers
CHARACTERISTICS. The concept
of common
casting stations and other similar public services... 6. Code and the fact that
Article 1732 of the Civil
contemplated under service" under
5. TEST. In First
PhilippineIndustrial Corporation v. to the concept of "public
Court of Appeals," the the said concept corresponds of the following
Supreme Court reiterated that the tests for the Public Service Act results in the application
determining whether a party is a common
carrier of goods are rules or principles:
(1) Hemust be makes nodistinction between one whose
for others as arpublic engaged in the business of carrying goods Ade (1) Article 1732
activity is the carrying of
persons or goods
as ready to engage inemployment,and
the must hold himself Ou principal business
one who does such carrying
only as an ancillary
generaiy as aousinessyandtransportation
not as a casual
of goods for
person or both, and
local idiom, as 'a
sideline")."
activity (in
2 He must undertake occupation, carefully avoids making any
dis-
which hisbusiness is to carry (goods of the (2) Article 1732 also enterprise offeringtransportation
confined:) kind/to tinctionbetween a person
or
Whati n a l
De Guzman v. Court of
612. 283 SCRA 45, 61.
1De
Appeals, No. L47822, 1No. 112287,
December 12, 1997,
SCRA 318.
Guzman v. Decembe
mber 22, 1988 168 SCRA G.R. No. 101089, April
7, 1993, 221
1300 SCRA 66 Court of Appeals, 29, 2010.
{1995), 1996 Bar. Ibid. 19G.R. No. 186312,
June
Court of Appeals,
supra.,
at pp.
617-618.

20De Guzman v.
 TRANSPORTATION A

UTILITIESLAW PARTI COMMON PROVISIONS 11

ESSENTIALSO F Chapter 1 - General Considerations
andone
one offerin,
such
10 baSIs
eduled basis,a 1s the
or
scheduled
unsched

or
carrying of persons or goods or both, and one who does
ween a carrier such carrying only as an ancillary activity (in local idiom,
regular episodic

ona
b e t w e e n

occasional,

service

onan
distinguUsh

i.e the j as a sideline"). Hence, in De Guzman u. Court of Appeals,"

serviee doesnot ublic," i.e.,
publice,"
eneral
Article
1732

one who
"general
who'
o ffers
offers services private respondent Cendaña was considered a common carrier
3) tohe and one although his principal business was as a junk dealer. Said
ofteringits
services
and s e g m e n of the
nw segment
or_population,
general respondent was engaged in buying used bottles and scrap
narrowW
a
onlyfrom metal in Pangasinan. Upon gathering sufficient quantities of
community

business
solicits
carrier and ha he such scrap material, respondent would bring such material to
population.2
c o mmon
mo

or entity
Is a CivilCodo Manila for resale. He utilized two (2) six-wheelertrucks which
(4) A
person
carrier underthe he owned for hauling the material to Manila. On the return trip
thecommon of
PublicConvenience,3

obligationsof
to Pangasinan, respondent would load his vehicles with cargo
did notsecure
a Certificate as to the : eans which various merchants wanted delivered to establishments
he makes nodistinctionorair 24
The Civil Codeasit is by land, water
in Pangasinan. For that service, respondent charged freight
15)
as long rates which were commonly lower than regular commercial
of transporting, that +h to
notprovide the rates. Thus, even if the transportation of goods was ancillary
Civil Code" does
(6) The the main business of buying and selling used bottles and scrap
motorvehicle.2s
be by
transportationshould the private respondent
metals, the Supreme Court considered
common carrier eveen
Aperson or entity may be a
(7) a common carrier.
known route, maintains no
ifhe has no fixed and publicly 6.03.LIMITED CLIENTELE. Although the clientele is
terminals,andissues notickets.
limited,theregularity of the activities ofa carrier mayindicate
8) Aperson or entity need not be engaged in the thatthe same carrier is a common carrier.
provisions of the Civil
business of publictransportation for the a. In one case, the petitioner, a
customs broker and
Code on common carriers to apply to them."
warehouseman, was declared a
common carrier although she
out to the public but
6.01. BROADER CONCEPT. The above-enumerated does not indiscriminately hold her services
whom she may contract
characteristics of common carriers derived from case law indi- offers the same to select parties with
said case, petitioner
cate an expanding
concept of common carriers. Carriers which in the conduct of her business. In the
are considered common
carriers in a number of decisions do not entered into a contract with SMC to transfer paper and kraft
fall neatly into the SMC's warehouse in
concept of common carriers board from the Port Area in Manila to
the test announced in
National Steel
contemplated
in
Ermita, Manila. As a common carrier,
she is bound to exercise
Appeals Corporation v. Court of extraordinary diligence in transporting
the goods and is
when she failed to deliver the same.
6.02.
ANCILLIARY presumed to be negligent
no
distinction between oneBUSINESS. Article 1732. makes b . I n Phil. American General Insurance
Company, et
whose principal PKS Shipping
business activity al. v. PKS Shipping Company,3
respondent
of peti-
the 75,000 bags of cement
De Guzman v.
De Guzman v. Court of Appeals, Ibid.
Corporation transported cement sank together
The bags of
Court of tioner DUMC in a barge. a tug boat.
De Appeals, ibid. was being towed by
AFirstGuzman v. Court.of Appeals, ibid. when the latter
with the barge carrier
December 29,Philippine
1988, 300Industrial The Supreme Court
declared that PKS was a
common

First SCRA 661.Corporation v. Court of

Asia Philippine Industrial Appe
ppeals, et al., No. 12594
Lighterage and
August 19, 2003. Corporation
Shipping, v. Court
of
Court of Appeals, ibid.
Inc. March 19,
Fabre, Jr.v. Court of v. 29Supra. UCPB General Insurance Co., G.R. No. 148496,
%Supra. Appeals, No. Appeals, G.K.R. No
No. 147246, S0Virgines Calvo v.

111127, July 26, 996, 2002.

aGR. No. 149038, April 9, 2003.
259 SCRA 426, 435.
 P
ANU
TRANSPORTATION
UTILITIES LAW PARTI COMMON PROVISIONNS
ESSENTIALS
OF
Chapter 1 - General Considerations 13
12 busness
of
c a r r y i n o

goods for
in the
in the
ofits
ac
a ct
tiiv
viitt
iiees
area AS
correctly pointed out by petitioner, the definition
it
was
engaged
ularity ofits
regularity
on its part
Neither of "common carriers" in
the Civil Code makes no distinction
because The activity
fee. as to the means of
transporting, as long as it is by land,
casual

cause
m e r e l

for a change
others justa
than carrier

water or air. It does not

indicates
more
common
entered into with
into wi
the provide that the transportation
of a of the
the c o n c e p t executed or a common carrier
a
common passengers or goods should be by motor vehicle.
are
In fact, in the United
States, oil pipe line operators are
declared
can
contracts
was
individual PRS
carrier." considered common carriers.
patrons
of the clientele.

limited

although
it had a
and Shipping ing, nc. v. Court ofy Under the Petroleum Act of the Philippines
(Republic Act 387); petitioner is considered a "common
In Asia
Lighterage
also
involved inthe business of carrier." Thus, Article 86 thereof provides that:
C. was puh:
the petitioner h a s no fixed and
Appeals,
its barges. It Art. 86. Pipe line concessionaire as common carrier.
through no ticket
ets.
carryinggoods
maintains no terminals,
ana issues -
A pipe line shall have the preferential right to utilize
known route, petitioner is a commonon installations for the transportation of petroleum owned by
Court still
ruled that the petitione
The Supreme
out that the principal
business nerof the him, but it is obliged to utilize the remaining transporta-
carrier pointing it offers its barges to tha tion capacity pro rata for the transportation of such other
is that lighterage
of and drayage and
water for compensation. petroleum as may be offered by others for transport, and
or transporting by
public for carrying carrier whether its to charge without discrimination such rates as may have
common
been approved by the Secretary of Agriculture and Natu-
a
Petitioner was considered
is done on an irregular basis
business of carrying of goods ral Resources."
and with a limited clientele.
rather than scheduled manner
A common carrier need not have a
fixed and known publicly 7 EFFECT OF CHARTER PARTY. Acharter party may
route nor does it have to maintain terminals or issue tickets. However, it must
transform a common carrier into a privatecarrier
6.04. MEANS OF TRANSPORATION. The Supreme beabareboat ordemisecharterwherethe charterer mans the vessel
Court ruled in First
effect, the owner for the voyage
with his own people and becomes, incarrier
Philippine Industrial Corp. v. Court of common is not transformed into a
Appealss that pipeline operators are common carriers that are or service stipulated. The contract of affreightment like
is
subject to business taxes on common carriers. Such operators private carrier if the charter party a
the carrier
a voyage charter or a time
charter.35 In a voyage charter,
are common carriers even if
the oil or petroleum products are of the goods received for transportaâtion.
being transported not through motor vehicles but is answerable to the loss
in Products, Inc.
pipelines. The Court used the through The Supreme Court gave this, explanation Planters
tests to determine the existence v. Court of Appeals, et al."
of common carriers
enumerated earlier and observed that:
"Based on the "Acharter-party'is defined as acontract bywhich anentire
there is no doubt thatabove definitions and ship,orsome principal partthereof,is let bythe owner to another
engaged in the businesspetitioner is a common requirements,
carrier. It 1s use; a contract of affreightmentby
person for a specified time orother
of vessel lets the whole or a part
i.e., petroleum
products, transporting
for hire as a or carrying goods,
which the owner of a ship or
It undertakes to carry for public ofhertoa merchant orin other person for theconveyance of goods,
is, to all all
persons who choose topersons
employment. on a particular voyage,
consideration of the payment of freight.

transports indifferently,
its services, that
fact that the goods by land andemploy
the
for and
excude it frompetitioner
the
has a limited
definition of a
compensation.
The
clientele does no 34Caltex (Phils.) v. Sulpicio Lines,
315 SCRA 709 [1999].
Insurance Corp., G.R. No. 157481,
Inc. v. Pioneer Asia
common carrier. 3"Loadstar Shipping Co.,
v.
January 2006. Lighterage Corporation
Lines, ibid.; Coastwise
aCaltex (Phils.) v. Sulpicio Corporation v. Philippine
Supra. Court of Appeals, 245
SCRA 797 [1995]; Cebu Salvage
Supra. Home Assurance Corp.,
G.R. No. 150403, January 25, 2007.
226 SCRA 476,
483-486.

3G.R. No. 101503, September 15, 1993,

 ANDE 15
TRANSPORTATION PARTICOMMONPROVISIONS
General Considerations
UTILITIESLAW Chapter 1 -

ESSENTIALSsO F
af
c o n t r a c to f a ff
frie
eiightmen
of control of the
means
in
did not have any
contract

14
types: (a on_
vessels

leased b when the charterer

the present c a s e
considering that thhe
doing so. This is evident in
two Space
are
of
shippinE

go ds for others; ar
o e a n d

the manning of the

decks, the determination
useof which steering of the ship, technical incidents of
parties
carry
Charter

the the
by the
whole
by termsof
to terms
of the voyage and
other
charter,
to him of
volves
the officers and
asa crew
whichin partor b a r e b o a t
harer,

with a&a
transfe
transter of the course all consigned to
ownerin artererwith co m a r i t i m e navigation w e r e
the demiseor charterer
sequent control over and hired by the
shipowner.
charterby
conSequent

lettothe who w e r e screened, chosen

bi vesselis
ana
whoch.are his remain
ter and the crew, carrier shall
possession

thewhole and e time charter, is therefore imperative

that a public
s entire
command

entirecuclding the mav either be

b
time
either

It whole o r portion
a
of
its may
the charter of the
of chartererfor
atireightment

afixed
fix period of a s such, notwithstanding
provided the
charter is limited to

servants.
Contract

vesselis
leased tothe
shipIS
leased for for aa single vessel by one
or more persons,
c a s e of a
t i m e - c h a r t e r o r voyage-charter.
wherein the Wherein_the
provides
provides.for the hire of the ship only, a s in the both the vessel
and its
voyagecharter, or f o r
charter includes
time or both It is only when the becomes
charter-party

period of time
the carrier
In
cases,
that a c o m m o n
demise
determinate
shin's in a bareboat o r
eitherfor a supply the voyage covering thee
yQvage. crew, as
the vessel only, shipoWner to insofar a s the particular time
voyage, the crew, and defre
fray private, at least concerned. Indubitably, a shipowner in a
singleorconsecutive
for the wages the
of masterand the charter-party is and control of the ship,
stores,pay maintenance of the ship. charter retains possession of thee
the expenses forthe o r public carrier
or voyageher holds may, for the moment, be the property
the term 'common although
Upon the other hand, definition extends
The charterer.
1732 of the Civil Code.
is defined in Art. hold themselves out
air or water which xxx
to carriers either by land, of Raoul
in carrying goods transporting passengers
or
the observations
as ready to engage with approval
for compensation as a public employment and not as a We quote
or both barrister-at-law-

casual occupation. The distinction between a 'common or public Colinvaux, the learned valid
it is difficult to find a
carrier and a private or special carrier lies in the character As a matter of principle, is úsed to convey
the
ofthe busineas, such that if the undertaking is a single. cases in which
a ship
distinction between
persons. Where the ship herself
is lett
Transacion, ngt s partof the general business or occupation, goods of one and of
several
o v e r the charge
and control of
although involving the carriage of.goods for a fee, the person or to a charterer, so that he takes
then a carrier. But
Corporation offering such service
private carrier.
1s a the shipowner is not
her, the c a s e is different; s a m e grounds
for imposing
a r e let, the
Article 1733 of the New Civil
Code mandates that where her services only is employed by o n e o r
exist, whether he
common carriers, by reason of the nature of their a strict responsibility
in each his servants,
case
should observe extraordinary diigence in business, many. The
master and the crew are
representativë
the goods they carry, the vigilance over the freighter in each
c a s e is usually
without any

the exercise of ordinaryIn the case of private carriers, however o n board the ship;
the same opportunities for fraud
o r collusion

Sufhce. Moreover, in casediligence in the carriage of g00ds Wil the s a m e difficulty

in discovering the
truth a s to what
of the goods, common of loss, destruction or occur; and

ault or to have acted carriers are presumed to have deterioration hastaken place arises..
otherwise negligently, and the been a of the argument
applies to rests on them. On the contrary, no burden of proving
private carriers, for such presump a. A case usually relied upon in support
into private carrier
deterioration
thé whosoever alleges
cause was ofthethe goods carried that a carrier that is
chartered is converted
a

Agencies, Inc.
megigénce of has the onus of damage o or Co. v. American Steamship
is Home Insurance w a s a eontract

course
It is not
disputed that
the carrier. proyle.that Although the charter party
involved in the said c a s e

private carrier.
of Court still ruled that it
was a

goods business, operates respondent carrier, in of affreightment, the doctrinal force because
charteredindithescrimvessel
in ately as a the ordinary in the said c a s e has
no
for all common carrier, However, the ruling Planters Products, Inc.
case
officers and MV "Sun persons. transporting explained in the above-quoted Co.
and
thereforecompl im ent were underPlum," the When petiu ner
it w a s

that the carrier's heavy

reliance o n the c a s e of
Home Insurance
r e a s o n that
control.
the crew Hardly continued
to be the ship
employ of thecaptain, its Steamship Agencies,
is misplaced for the
and to then can we under its U: American
the
ship, withcharge the direct supervsinup and
ervision
the
duty charterer
of rer, a strangerto aNo. L-25599, April
4, 1968, 23
SCRA 24.
caring for
IOr his carg
 E S S E N T I A L SO F TRANS/
UTILITIES LAW FARTT -CO
MMON PROVISIONS
Chapter - eral Consideration
was
the
validity
of
from iliability for los
from
pulation
therein
shipowner

of a special 1984, petitioner received and loaded 1,100 metric

controversy
the
not the effects of Silica quartz on board the MT tons
ofthe
exempting

pointed
pOinted
out that
O114

the lett Ayungon for Espiritu Santo which

meat

was Tagoloan the next day. The

never reached its destination, however, becauseshipment
was
the charter-party
iitt
in
the
negligence o
areover,
Moreover,

bya
single.
to the M/T
the carriers.
chartered

2
ot find application
n o t find Espiritu Santo sank in the afternoon of
due to common

a ship does
1984 off the beach of December 24,
on Statesthat er
rn for Opol, Misamis Oriental, resulting in
carrier,

charter common
growing
the
theinited a that the total loss of the cargo. MCCII filed a claim for the loss
rule in is not observed
or carriage of goods
c a r r i a g a

cargo
was
andor
of the shipment with its insurer, respondent Philippine
for it
special
carry passengers admiral+
ourjurisdiction,

of interpretation of Home Assurance Corporation. Respondent paid the claim

in transportation

safety
in the
more
exacting common
carriers.
in the amount of P211,500 and was subrogated to the
requires
a
rules
governing rights of MCCII. Thereafter, it filed a case in the RTC
by s e a
particularly,
the
against CSC for reimbursement of the amount it paid
more

MCCI. CSC claims that it is not liable insisting that the

operates wo
two trucks for agreement was merelya contract of hire wherein MCCT
CASES:
a
small
company,
few customers hired the vessel from its owner, ALS Timber Enterprises
AM Trucking,
to oniy a
caters
(ALS). Not being the owner of the MT Espiritu Santo,
scheduled trips. IT
1. selective
basis. lt
hire on make regular or petitioner did not have control and supervision over the
trucks do not convenience. On
and its
have a
certificate ot public transport, for a vessel, its master and crew. Thus, it could not allegedly
does not even contracted AM to be held liable for the loss of the shipment caused by the
occasion, Reynaldo Tarlac. However, AM
one
from Manila to sinking ofa shipit did not own. Will the action prosperT?
fee, 100 sacks of rice because its truck was hijacked
failed to deliver the of
Yes, the action will prosper. There is a contract carriage
cargo,
in Bulacan to visit
his girlfriend. A:
was loaded
when the driver stopped carrier? of goods between CSC and MCCII; the cargo
common
hold AM as a the cargo was
May Reynaldo on board the vessel; loss or non-delivery of
be held liable as common carrier. to that it exercised
Yes. Reynaldo may proven; and petitioner failed prove
A:
Code makes no distinction to prevent such loss or that it
Article 1732 of the Civil extraordinary diligence
or force majeure. The voyage
between one whose principal business activity is the was due to some casualty

or both and one who does such charter here being a contract of affreightment, the carrier
of
carrying persons or goods for
as an ancillary activity. Article 1732 does was answerable for the
loss of the goods received
carying only
not make any distinction between a person or enterprise transportation.
offering transportation service on a regular or scheduled contracted with MCCII for
CSC was the one which vessel
basis and one offering such service on an occasional, had control over what
the transport of the cargo. It it
episodic or unscheduled basis. Neither does Article 1732 its dealings with MCC,
it would use. All throughout that it
distinguish between a carrier offering its services to the c o m m o n carrier.
The fact
represented itself as a consummate the
general publie, i.e., the general community or population, did not own the vessel it
decided to use to
and one who offers services and duties
or solicits business only fromn contract of carriage did
not negate its character
a narrow
segment of the general population. This is also subrogor)
carrier. The MCCII (respondent's
as a c o m m o n the
consistent with the definition of to inquire about
Public Service Act (De public service under the could not be reasonably expected carrier offered to
Guzman v. CA, 168 SCRA 612 vessels which petitioner
1988]). ownership of the and often
it is very difficult
utilize. As a practical matter, enforce its rights of
2. On November public to
12, 1984, Cebu impossible for the general ifit should be required
and Maria
Cristina Salvage Corporation (CSC) under contract of carriage
the vessel is. In fact,
a

charterer) enteredChemicals
action
(as
Industries, Inc. the actual o w n e r of
petitioner was to load 800intoto a voyage charter [MCCIl
to know who itself denominated the
charter
in this case, the voyage
quartz on board the MT 1,100 metric tons wherein of silica petitioneras the
"owner/operator" of
the vessel.
Negros Occidental Espiritu Santo at
for merely a receipt issued by
transport to and Ayungon,a
was
Tagoloan, Misamis Oriental The bill of lading had been received
the fact that the goods
Phils., Inc. Pursuant
consignee discharge
evidence fact
to ALS to MCCII, as in
It w a s not signed by
to the
Ferrochrome
contract, on December for transportation.
zo
 AI
TRANSPORTATION

ESSENTIALSO F
UTILITIESLAW PARTI ON PROVISIONS
Chapter 1- General 19
18 supercargo
ofA L S
m

s Consideration
the did ot contract
not
a.
signed that
by
bill of a.
MCCl

lading In National Steel Corporation v. Court

simply fact a
vessel involved, the MV Vlasons of Appeals"
I, rendered tramping services the
was
the t r u e that
it with
While
it is between the
the parties,
between

as sucn, and,
consistent

ALS. c a r r iage
age
of the
the voyage does transport
not
Its services are available cargo shipment for the general public.
with
directly of contract provision
or
the
may
serve
as
over
the
express
executed.

a special contract of
only to specific persons who enter into
it
cannot
prevail
and
petitioner

MCCII sho
charter party with its owner. Consequently,
that
MCCIl
that the carrier considered a
was
charter
cannot argue charta private carrier by the Supreme Court
Finally,
petitioner
loss
Since the voyage explaining that:
charte
iable for
its own
was for the
be held "Article 1732 of the Civ I Code defines a common carrier
insurance

that cargo consideration.

This simr
mply
stipulated
This
deserves
scant
of having tho as persons, corporations, firms or associations engaged in the
account. would take care from business of carrying or
meant that the
charterer
not exculpate
the carrier transporting passengers or goods or both,
It could The law by land, water, or air, for compensation, offering their services
contract of carriage.
insured.
goods breach of its to It has been held that
liability for the
condemns it as unjust
and contrarv the public." the true test of a common
in fact, prohibits it and carrier s the carriage of passengers or goods, provided t has
space, for all who opt to avail themselves of its transportation
to public polhey.
petitioner is not only service To2-e. A carrier which does not qualify under the
The idea proposed by that a carrier above test is deemed a private carrier. "Generally, private
also dangerous. lt says
preposterous, it is is not liable to the carriageis undertaken by special agreement and tha carner
of carriage
that enters into a contract does not hold himself out to carry goods for the generalpihie
not the vessel it chooses
charterer or shipper if it does
own The most typical, although not the only form of private carriage,
dealt with ALS and yet petitioner is the charter party, a maritime contract by which the charterer,
to use. MCCII never
use and service
insists that MCCII should sue ALS for reimbursement for a party other than the shipowner, obtains the

of all or some part of a ship for a period of time or voyage

a or
its loss. Certainly, to permit a common carrier to escape
its responsibility for the goods it agreed to transport (by voyages."
the expedient of alleging non-ownership of the vessel it did not offer
In the instant case, it is undisputed that VSI
employed) would radically derogate from the carrier's duty As found by the Regional Trial
its services to the general public. under
of extraordinary diligence. It would also open the door to for those it chose
Court, it carried passengers or goods only
collusion between the carrier and the supposed owner and a "special contract of
charter party." As correctly concluded by
the possible shifting of I "was not a c o m m o n but a
liability from the carrier to one the Court of Appeals, the MV Vlasons
without any financial capability to answer for the rights and obligations of VSI
theresulting private carrier." Consequently, for damage to the
damages (Cebu Salvage Corporation'v. and NSC, including their respective liability in their contract
Assurance Corp., G.R. No. Philippine Home determined primarily by stipulations
150403, January 25, 2007). cargo, are
charter party. Recently, in
Valenzuela
of private carriage or Appeals and
8. Hardwood and Industrial Supply,
Inc. v. Court of
COMMON
VATE CARRIER. TheCARRIER
ruled:
DISTINGUISHED FROM PRI Seven Brothers Shipping Corporation,
the Court

carrier and a private ordistinction between a "common Or puD ...in a contract.ofprivatecarriage,thé partiesmay freely
the business, such that if special carrier" lies in the character obligations which perforce would
stipulate their duties and in a contract involving a c o m m o n
pot a part o a general the undertaking is a single o
be binding on them.
Unlike
the generalc opublic.
the carriage of the business or transacti does not involve
goods for afee, theoccupation, although involviug carrier, Private carriage mmon
Civil Code on
such service the stringent provisions oi
the be
18 a
carry a person toprivate carrier For
person or corporation Hence,
the general public
cannot justifiably
the instance, if a per
oIer ng carriers protecting goods as a private
transporting commercialembodied therein is
meant for airport
personal use, he willusing his person agrees to applied to a ship public policy
be privately-owned
considered car thau is carrier.Consequently, the
by stipulations
in a
lessen
charter party that
involving
a
private carrier. not
or
contravened

remove the protection given

by law in contracts

3Planters Products, Inc.

General common carriers."

2003, 401Ingurance Court of

v.
SCRA 222,Company PKS
ShippingAppeals,
v.
228. supra.; 45.
Company, G.R. Philippine
SCRA
December 12, 1997, 283
No. 4G.R. No. 112287,
9038, April 9,
149000,
 TRANSPORTATIONAND PUB
L I I

ART I- COMMO PROVISI

Chapter 1 - General Considerations
21

UTLITIESLAW

ESSENTIALS
OF
ta
is
bound
to exercise A:
would reply to LMC that it may not be held liable for
Common
calrier

owes
only
liligence of a the death of AB. A stipulation with private carrier that
while a carrier
common
carri
mon carrier caj wOuld disclaim responsibility for simple negligence
that of of the carrier's employees is a valid stipulation. uch
follonws
It a
private

hIle
2for_the

the ance of its

negligence

SDIpulation, however, will not hold in case of liability 1Or

b liabilityfor
diligence,

to such
Moreover,

lhabilty_

validly
enter
gross neghgence or bad faith.
aordinary
lamily.

amon carrieris void for

from
ext fatherofa e x e m p t may
carrer common
good is p r i v a t e 3. CCo. shipped 20,000 bags ofsoy beans through S/S Melon,
thatit a p r e s u m p t i o n on
on
the part
a involving

to
owned and operated by X Shipping Lines, consigned
stipulate
employees,

or stipulation
There
1s no ust prove such
must
the Toyo Factory and insured by the Surety Insurance
aTnts The neghgence

policy.
public with
CO., against all risks. C Co. hired the entire vessel,
stipulation.
alleges
to who
contrary He
being
private
carrier.

the option to go north or south, loading, stowing and

ofthe at its risks and expense.The owner and the
discharging
owner from
stipulation exempting the
negligence.

shipper agree on a
operated.
by iability for the negligence of its agents.
PROBLEMS vessel owned and there
for the rpose
Durn.

a
Molina
charters
carrier, When the cargo as delivered to the consignee,
Tirso common
concessior
ion. The insurance
1 Shipping
Co., a to his lOgging were shortages amounting to 10,500.00.
Star tractors
two somehow
and sought reimbursement
Company paid for the damage
cOmpany
transporting
of of the shipping where liable?
The crane
operator
in a place
they would from the X ShippingLines as carrier: Is the carrier
the tractors wind hits the bareboat
negligently puts a strong there was
other. During the trip, tractors. Tirso X Shipping Lines is not liable if
tilt each severe damage
to the charter. X Shipping Lines agreed to carry
a special cargo.

vessel, causing for damages. The latter becomes a private

company a special person only,
Molina sues the shipping
exempting the or chartered to
in the charter
agreement on common
carrier. Hence, the New Civil Code provisionsis not actinS
cites a stipulation from the
loss or damage ar+sing carrier
from liability for carriers cannot be applied where the
company
Tirso Molina countered by stating
as a private carrier.
a
As a private carrier,
negligence ofits agents. is against public
as such but
owner from liability
for the
that the aforementioned stipulation stipulation exempting the ship
null and void. Is the stipulation is not against policy and is deemed
policy and therefore, liable? negligence of its agents
valid? Would you hold the shipping company valid.
A: Yes. The stipulation is valid if there was bareboat charter. FROM
Acommon carrier that undertakes to carrya special cargo COMMON CARRIAGE DISTINGUISHED
9 carriers that carry or transport
OT charter toI SpECia perseH-omly, becomes a private OTHER CONTRACTS. Common in
carrier. As a private carrier, a stipulation exempting the from those who a r e engaged
owner from liability for the negligence of its agent is valid, goods by sea should be distinguished
being not against public policy. Hence, Star Shipping towage and from arrastre operators.
Company is not liable.
9.01. DISTINGUISHED
FROM TOWAGE. In towage,
2. During the elections last another vessel to another place.a
didate in May, AB, a
congressional can- one vessel is hired to bring to bring
Marinduque, chartered the hired by a common carrier
Lobe Mining
Corporation (LMC) for helicopter.owned by Thus, a tugboat may be tugboat cannot
in the case, the operator of the
LMC same rate normally election barge to a port. In this
use
campaign. AB paid the carrier. In maritime law,it refers tooa
by companies regularly engaged in the plane charged be considered a common
of
business.
AB, LMC
In the
charter agreement between chartering servicerendered to a vessel by towing for the mere purpose
expressly LMC and reference to any circumstances
or disclaimed
acts omissions of its or any responsibility for the expediting her voyage without
confined to vessels that
have received
pilot
of the plane's engine. The for the defective of danger. It is usually
helicopter conditionn
ofInvestigations crashed killing AB.
disclose the no injury or damage."
the accident. LMC that pilot's error was
fiability
How would for ABs death now consults you on itsthe cause
in the
you reply to light of the above possible 6th Ed., p. 1337.
LMC's query? findings. Black's Law Dictionary,
 AND BLIC
PURI

TRANSPORTATION
OFUTILITIES LAW
ESSENTIALS
PARTI cOMMON PROVISIONS
Chapter 1 General
service in a
-

the. contractof Considerations

of od fathe
provides

due diligence
dili a good functions and the
The
party
that
heparty observe
the
thedue thene
in place of their performance (upon
and piers
shipside), operator's services arewharves
to obligor
oftheför the arrastre
damages for the resultin.
required
is hle for dan not maritime.
They are, in fact, no different from thoseclearly
negligence
towage The liable
the obligon
or negligence ot of a
family. him
ofthe renders
Fault Fault
or
neglige
depositary or warehouseman. Even if the
obligation
obligee. and prudence: in t arrastre service
depends
s the nature ofthe obligation he
the care.
by the to due on, assists, or furthers maritime transportation,
so incidental to its aforementioned 1t may
sutfered exercise

loss be deemed
his
failure
merely
operator and does not, thereby, make thefunctions
in
consists obligation as arrastre
performance ofthe maritime in character." service
demands."

rdinary prudeni
of ordi by The operation of an arrastre operator
instance,
the
exercise

that its tugho is free

Starts and its responsibility for the merchandise and goods
on
For
the duty
to ensure

Deginsirom the time they are placed upon the.wbarves or piers

includes weatiather has always
the operator
mechanical
problems.
While
adverse

the least that the

ordelivered along sides of ships.
commerce,
of In Summa Insurance
been a real threat
to
should do is
maritime

to e n s u r e that the
t.
gboat C. Corporation v. CA and Port
Service Inc.," the Supreme Court imposed a higher degree of
boat
operator of tug
a
vessel being towed at all imes
the
to secure diligence on the arrastre operator explaining that:
would be able
during the engagement.
9.02.DISTINGUISHED FROM ARRASTRE. Arrast. "xXx The relationship therefore between the con-
signee and the arrastre operator must be examined.
comprehenda This relationship is much akin to that existing between the
haulng of carg0,
refers to
Spanish word which consignee or owner of shipped goods and the
common car-
or befween the establish.
a

thehandling of cargo onorthe whart the ship's tackle. The rier, dr that between a depositor and a warehouseman. In

ment of the consignee shipper and the performance of its obligations, an arrastre operator
responsibility of the arrastre operator lasts unti the deliverv should observe the same degree of diligence
as that

is usually performed carrier and a w a r e h o u s e m a n

ofThecargo totheconsignee.The
service
required of a common
and
as enunciated under Article 173 of the Civil Code
by langsharemep." Law, respectively.
Section 306) of the Warehouse Receipts
a. The functions of an arrastre operator usually include discharged from
Being the cüstodian of the goods is to take good
the following: (1) to receive. handle, care for, and deliver all a vessel, an
arrastre operator's duty
to the party
them over
of the goods and to turn
merchandise imported and exported, upon or. passing _Over care
(Emphasis supplied)"*
entitled to their possession.
Government-owned wharvesand piersinthe port; (2) to record STEVEDORING.
FROM
orcheck all merchandise which may be delivered to said port 9.03.
DISTINGUISHED

and arrastre operators

at shipstde, andingeneral and;(3)tofurnish light, and water
services
Note further that
the c o m m o n carriers
from persons or
entities engaged
in
and other incidental services in order to undertake its should be distinguished the loading
arrastre service" involves
stevedores
stevedoring. The function of port.0
of coastwise vessels calling at the
b.Hence, the functions of an arrastre operator have and unloading the Latin
originated from
nothing to do wvith the trade and business The word stevedoring derived
to the use or of navigation, nor a.
meaning "to
stuff."i Stevedoring
was

operation of vessels." Both as to the nature of the word "stipare,"

Cargolift
Inc., G.R. Shipping, Ine. v. L. Actuario
No. 146426, June Marketing Corp. and Skyland 47Tbid. Phil. 69

Cargolift Shipping,
27,2006.
Inc. v. L.
Brokerage 8323 Phil.
214 [1996).
Insurance Co.,
Inc. v. Manila
Port Services, 138

Inc., Tbid. Actuario Marketing Corp. and 97bid., citing

Malayan
No. L-7444,
May
"Mindanao Skyland Brokerage Internal Revenue,
G.R.

Company of Terminal
Collector of
and [1969].
New Brokerage Service, Service v.
"Than-

"Delgado York/Mcgee &Co., Inc., G.R. No. 162467,

Arrastre cited as
Inc. v. Phoenix ance 5Cebu hereinafter

5 p. 185,
1SCRA 854. Brothers, Inc. Home v.
May 8, 2009. 30, 1956. Marine Law, 2007 Edition,

"Ibid., citing 1 Am Jur Insurance,

urance, Inc., No.
L-16567 March 27, 1961,
L-16567, 61J.
Thannapan,

564,568. napan."
 TIONAND
PID

JBLIC

TRANSPORTA
PARTI-COMMON
Chapter 1 General
PROVISIONS
UTILITIESLA W
-

Considerations
ESSENTIALS OF

tarted as a ph
onetic
a

1t
s t a r t e d

10. TRAMP SERVICE AND LINE SERVICE. Cargo

24 Portugal.
Portugese estivador nich operation may be classified into two types, namely, line service ana
and
or
of a man who
fom
Spain
eseribador
1n
the
sense

tramp service
stufis

Republic Act (RA) No. 9515 defines "Lineservice as the

directly Spanish
who
of a.
man

operation of a common carrier which publicly offersservices without

spelling

of the rgo in th
co
means

literally handlnng

loadsships.
s h i p ' sitackle and
tothe e ship's the olds discrimnation to any user, has regular ports of callldestination
end
fixed salingschedules and frequencies and published freight rates
refers the
Stevedoring between
stevedore

on the
or
responsibilnty.otEhe
vessel vessel. andattendant charges andusually carries multiple consignments
the whatever is offered 1s
holdsof The cargo n the Liners carry "general cargoes," meaning
vessel.
ofthe is the
of the
and
stowing
ofa
stevedore

gence accepted for shipment.so

is not a commonhc rrier
0ading required
diligence
family.Astevedore dore b. On the other hand, RA No. 9515 defines "Tramp service
The to.a
akin to
b 1t1Snot carrier which has no regular and fxed
fatherofa orpassengers
as the operation ofa contract
passengers

goods TheT
otagood
does not
transport
goods
goodsTor
profit. oading routes and schedules but acceptscargo wherever and whenever
for it notstore tar reaching
public is hired on a contractual basis, or chartered Dy
foritdoeswould n o t nave a the shipper desires,
mutually agreed terms and usauy
warehauseman
warehous
a usemar
any one or rew shippers under
and
of cargoes carrier capacity for
and stowing Tramps "offer their
common

that ofa contract and cargoes.

as by r laws
ouri on
carries bulk or break bulk
shipper, who ordinarily
protected
in led
ramification

as desired by the
the public
is
adequately

The public
policy
considerations

ehouseman a higher
legally the carriage of bulk cargoes
is thus a matter of special
qua_i-delict. a or
wareho
engages the wholeofthethe ship; each voyage The tramp
shipowner and shipper."so
carrier
on

upon a
common

in a steves vedoring outfit hich arrangement between

single shipper and
is not present full cargo loaded by
imposing a

degree of
diligence
Stowing of cargoes
for its seeks and usually gets a and
loadingand in standard packages
most often in bulk
mainly provideslaborin
or
such cargoes are foods so
fuels and unprocessed
consist of raw materials,
clients. typically
FROM TRAVEL AGENCY vital to the world economy.
9.04.
DISTINGUISHED in
In many cases. a n entity engage
common carrier, No. 9515 refers to
travelagency is not
a
Noticeably, while RA that provides Tramp
of a person who purchases carrier, a n entity
the obiect of contractual relation agency's service "Line Service" asa common carrier." Nevertheless,
a ticket through
a travel agency isonly the to as a "contract
Service" is only referred Service" may also be considered
common

ticketing _and
ofarranging and facilitating the booking,the object of the those engaged in "Tramp circumstances.
accommadation ina package tour. In contrast, carriersdepending on the Civil Code
Tne contract 1766 of the
contract with a commoncarrieris transportauon. GOVERNING LAWS. Article laws that w e r e in
between the travel agency is a contract of service and not a 11. Code over the
the said
eontract of carriage.* The diligence required of a travel agency expresses
the primacy of 1766 provides: -
enactment. Article
is notextraordinary diligence but that of a good father of a force prior to its
this
n l y7
m a t t e r s not
regulated by
ARTICLE 1766. In all carriers
of common

and obligations and by

Code, the rights Commerce
of
by the Code
SThannapan, p. 185. shall be governed
Mindanao Terminal ànd speciallaws.
Company of New York/Mcgee &Co.,Brokerage Service, Inc. v. Phoenix Assurance
Inc., supra.
Mindanao Terminal and Brokerage Service,
Company of New York/Megee 9515.
Law of Admiralty,
2nd Edition,
&Co., Inc. v. Phoenix Assurance R.A. Act No. Jr., The
Inc., supra. 54Section 1 [el,
Charles L. Black, Black."
Mindanao Terminal
Company of New York/Megeeand& Brokerage Service, 59Grant
Gilmore and
referred to as
"Gilmore and

Inc. v. Phoenix Assurante hereinafter

Crisostomo v. The Court Co., Inc., supra.

409 SCRA
528, 534. of
Appeals, et al, G.R. No. 138334,
1975 Edition, p. 13,
6OGilmore and
Black, p. 13.
197.
and Black, p.
Tbid. August 25, 2000, 61Gilmore
 AND
PUB) JBLIC
TRANSPORTATION PARTI-COMMON PROVISIONS 21
UTILITIESLAW Chapter 1 General Considerations
-

ESSENTIALSO F
ode is
is aals0
l
Civil
Code
explicit d. Similarly, Philippines laws were applied in situation
1753
of
the
destruc
or deterioration where the good were being transported from Hong Kong to
a

However,
Article

involving
loss,
destination
shall
ann
Thus, Philippines. The goods fell overboard and were lost during the the
transn
cases
a.
respect
of
to country are
to be course of the voyage.
that with
Taw ofthe ilthegoods
the
goods, apply
of
Philppme
Lawsshall e. Treaties are also part of the law of the land. Hence, trea
t
to the
Philippines.

country
to which ties can also be applied in this jurisdiction. Thus, in international
Japan ofthe the liahin
1753.
The law
shall
govern bility air transportation, the Convention for the Unification of Certain
Rules Relating to the InternationalCarriage by Air or "Warsa
ARTICLE
transported destruction or
to be their loss,
are for
goods
of the
common
carrier
Convention with its amendments should be applied." International
deterioration.
air transportation means:
les on the applicable
rulese
explained the The place of departure and the place gf destination
within#
are within
Court this wise:
b. The Supreme
international
carriage in
one case in
are the territories oftwo contracting countries regardless
laws regarding of whether or not there was a break in the transportation or
the goods are to be

The law of
the country
to which
of the
common carriers in
transshipment;
the liability
transported governs
or
d e t e r i o r a t i o n . As the
cargoes (2) The place of departure and the place of destination
case of their
loss, destruction the
transported from Japan
to the Philippines, are within the territory of a single contracting country ifthere
in question were
Carrier is governed primarily by the Civil is an agreed stopping place within a territory subject to the
liability of Petitioner said Code, the
matters not regulated by sovereignty, mandate or authority of another power, even
Code. However, in all shall be governed by
of common carrier
rights and obligations though the power is not a party to the Convention.a
the Code of Commerce and by special laws. Thus, the Carriage
to the provisions 11.01. SUMMARY OF RULES. The rules with respect
ofGoodsby Sea Act,a special law, is suppletory
of the Civil Code." to applicable laws were summarized, thus:"

c. Consistently, Philippine law was applied in a collision a) Coastwise Shipping

where it was established that the goods in question were 1732-1766)- primary
case

transported from San Francisco, California and Tokyo, Japan to the

1)-New Civil-Code (Art.
aw.
Philippines. It was explained that the laws of the Philippines will governs suppletorily in
apply in case of loss of goods due to collision. It is (2) Code of Commerce
colisionoccurred in foreign waters." However, itimmaterial
was
that the
explained that
absence of Civil Code provisions.
collision falls among matters not
Code, so Articles 826 to 839 of Book specifically regulated by the Civil b)Carriage from Foreign Ports to Philippine
shall apply exclusively. Three of the Code of Commerce
Ports
(1) New Civil Code primary law
-

(2) Code of Commerce all matters not regulated

-

Eastern
al., No. L-71478,Shipping Lines, Inc. v. The Nisshin Fire Co. v. CA, 164
May 29, 1987, 150 SCRA and Marine
Insurance C0., et by the Civil Code (National Development
(1984)Tbid.,
citing Samar 465, 469. SCRA 593).
& American Mining
President Co., Inc. v.
Sea-Land Service, Inc. v. Lines v. Klepper,Nordeutscher Lloyd, 132
31, 1987, 153 Intermediate Appellate 110 Ph 243, 248 [1960);SCRA
SCRA 552, 557.
529
see also
and National Development
Court, et al., No.
L-75118, AUgusu 6Philippine Charter Insurance Corp. Neptune
v. Orient Lines/0verseas Agency
L49469, August 19, Company v. The Court Services, Inc., G.R. No. 145044,
June 12, 2008.
STbid. 1988, 164 SCRA of
Appeals, et al., Nos. 5Alitalia v. Intermediate Appellate Court,
192 SCRA 9 [1997].
593, 603.
L-4940 sMapa v. Court of Appeals, 275 SCRA [1997]
Reviewer on Commercial Law, 2009 Ed.
Sundiang and Aquino,
 TRANSPORTATION
AND BLIC
OF UTILITIES LAW
ESSENTIALS

Act -
bySeaAct suppletor to PART COMMO
Carriage ofGoods Chapte 1
General PROVISIONs
(3)
Code(Ibid.)
the Civil Philippine
Ports to Foreign services. That is Consider 29
from under tl the 1s the
c)Carriage
Civil reason
Ports of the country
to which .
he goods performance theirCodeobligation
of
why common
to
exercise extraot carriers are
(1) The laws
(Art. 1753,
Civil Code; Nati 13.
In certain REGISTERED
aordinary
to
carry goods diligencerequired
the in
are to b
transported.

Co. vu. CA, 164

SCRA 593). onal be cases,
held 1able is it oWNER RULE
not only the
and/or
passengers.
AND KABIT
d
Development
Overland Transportation.
Ordinar1ly, the even if the
cause operator of SYSTEM.
of actions isthe vehicle who may
contracting person who can be culpa
(1) CivilCode
primary
-
law.
policy, party. However, sued for breach of contracULd
the law in contractof is the
allows victims of certain cases, by reason
(2) Code of Commerce-suppletorily. speaking, are third parties. accidents to sue those pubic
registered owner rule. This obtains in the who,
e) Air Transportation. cases coveredstrictly
by the
13.01.
(1) Civil Code vehicles is now REGISTRATION LAWS. Registration of motor
known as "The governed by Republic Act No. 4136 otherwise
(2) Code of Commerce Land
registration is Transportation
law on
now
and Tratic Code." The
(3) ForInternational Carriage Convention Transportation Office. being administered by the
for the Unifcation of Certain Rules Relating to th provide: The
pertinent provisions of the Land
Code
International Carriage by Air or "Warsaw Convention"
with its amendments (Alitalia v. Intermediate Sec. 5.
Court, 192 SCRA 9). x x x
Appellate a Compulsory registration of motor vehicles.
-(a) All motor vehicles and trailer of any type used or
operated on or upon
12. NATURE OF BUSINESS. any highway of the
Common carriers exercise be
registered with the Bureau
of Land
Philippines must
a sort of public office, and have duties to perform year in accordance with Transportation
the current for
public is interested. Common carriers are public in which_ the this Act. the provisions of
ar enterprises that specialy cater to the needs of utilities; thev
conduce to their comfort and convenience. As such, the pmblic and (6) The dates of
vehicles shall be based
annual
registration of motor
are impressed with common carriers on a registration scheme to
public interest and concern.T be prepared by the
COmmon carriers are subject to Consequently,
regulation by the State.2
Bureau of Land Transportation
subject to" approval of the Minister of
a
Moreover, the and Communications. The Transportation
business of common scheme shll provide for
directly and intimately upon the safety, well
carriers impinges a system that will
distribute the registration of motor
the members of the being and vehicles equitably over different months in a calendar
such carrier. The lawgeneral community. who happen toproperty of
deal with year. Said scheme and rates shall not be changed more
imposes
carriers for the safety and duties and liabilities upon often than once every three (3) years, and only upon due
protection of those who common notice given to the public at least ninety (90) calendar
utilize their days before the effectivity of such registration scheme.
Any registration of motor vehicles not renewed or
F1sher
March v.Yangco Steamship
31, 1915,31 before the date fixed by the Bureau of Land Transporta-
Phil. 1, 18. Company, al., No.
et
Kilusang 8095, November 5, 1914 and tion shall become delinquent and invalid.
115381, DecemberMayo Uno Labor
23, 1994, 239 Center v. Hon. Jesus
Fisher v. Yangco SCRA 386, 391. B. Garcia,
Jr., et
Steamship Company, et al., No.
73De Guzman v. Court of Appeals, supra.;
Loadstar Shipping, Co., Inc. v. Court of
al., supra. 315 SCRA 339, 348.
Appeals, et al, No. 131621, September 28, 1999,
 1ON AND PUBLIC
ESSENTIALSOFTRANSPORTATION
U T L I T I E SL A W

PARTI -COM
alers shall
Deale, submit to napter 1 MON PROVISiON
Vehicle Encumbranc General
-

Dealersnsoortationa.
a report concerning ral Considerations
R e p o r t . -

Dealer's
Transportation
31
(c) ther transaction involv-
Director ofLand
ofor
any
other

information cellation mbrances"

or
the
ranstercluding
transfer such
such as
foreclosure
attachments or to rring to the
aforesaidcreation,
the sale or including
and num umber of stocks of the can-
vehicles,
data, other
encumbrances. mortgage
motor

ing require for the effective The

manufacturing

importation,
may a fee Bureau of
remaining,
as the Director
provision
of this Act within ve
(5) Fifty Pesos Land Transportation shall
of
of the mortgage, attachment (P50.00) for
annotationcollect
transfer or transactio
sale,
cancellation thereof. (Asandlor othereveryencumbrances
enforcement

from such of a
working days furnish also
the buyer with a haduplic
Director of
SECTION 14.Issuanceamended by B.P. Blg. 74)
shall the Director of Land or
authenticatedby
dealers
Such

copy
thereof, duly A properly of certificates of
Transportation. be issued numbered certificate
for each of registration
Unauthorized
repair of change of engine
inspection and
registration
separate motor vehicle shall
(d) - Unless
satisfactor torily explained to fees. payment of corresponding after due
serial number

and approved by
the Director
of Land Transportation registration
no repair involving
the restoration original or of the SECTION 15. Use
and authority of
registered serial
number as stamped on on the engine
registration,-(a) certificate of
and carried in the The said certificate shall be
shall be allowed. No change involVing
an alteration
car preserved
of or tampering with the original
or registered enaine registration of the motorby vehicle
the owner as
evidence of the
described therein, and
shall be
serial number of a motor vehicle shall ever be allowed presented with subsequent
and any motor vehicle with a trace of having its engine re-registration, transfer of applications for
serial number altered or tampered with shall be refused encumbrances: Provided, Thatownership, recording of
or

of registration a true in lieu of the certificate

registration or re-registration. copy or photostat thereof may be
carried in the motor vehicle.
(e) Encumbrances of motor vehicles.- Mort.
(b) The certificate of
the provisions of this Act forregistration issued under
gages, attachments, and other encumbrances of motor
vehicles, in order to be valid against third parties must any motor vehicle shall,
while the same is valid and effective
recorded in the Bureau. Voluntary transactions or and has not been
voluntary encumbrances shall likewise be properly
suspended or revoked, be the authority for the operation
of such motor vehicle.
recorded on the face of all
outstanding
certificates of registration of the vehicle copies of the
concerned. (c) No motor vehicle shall be operated on the
public highways in a manner which would place it
Cancellation
attachments, and
or foreclosure of. such
mortgages, under a classification requiring the payment of a larger
other encumbrances
be recorded, and in the absence of suchshall likewise registration fee than that stated in the certificate of

registration shall be issuedcancellation,

no certificate
of registration.
corresponding notation of without the SECTION 16. Suspension ofregistration certificate.
other encumbrances. mortgage, attachment andlor - If on inspection, as provided in paragraph (6) of

Records Section four hereof, any motor vehicle is found to be

of
shall be kept by encumbrances of unsightly, unsafe, overloaded, improperly
marked or
the Bureau of Land motor vehicles unfit to be operated, or capable
chronological andlor
sequence and shall alpha-numerical andlor any Transportation in equipped, or
of causing
otherwise
excessive damage to the highways, or not
other standards and specifications,
time, date, number contain, among other
of the
conforming to minimum
to register thee said motor
entries for entry, and other things, the
immediate data the Commissioner may
refuse

cross-indexing
retrieval, ina "Book of Motor
may require the
vehicle, or if already registered,
number
 PURI 3LIC

TRANSIORIATTON AND

PARTI cOMMON PROVISIONS 33

UTIATUESLAW
Chapter 1- General Considerations
ESSENTIALSOF him,
d
a n o

upon
notor materials so designed and painted with different colorss
surrenderea to

owner
of
tho

the defect of to distinguish one class from another.

the

mum standa
dards
until
be to
to registration tem-
plates whether
notice
thereof
The transfer of motor vehicle
hours
all from
seventy-two porary or regular, validating tags and/or stickers
plates
such
W
that during
that.
with.

suspend
from the
complied
Suecorectemplied issjon
Commission
1gs for
one motor vehicle to another without permit
hicle,
Vehicle,
warmine

Bureau of Land Transportation, except security number

specitficationsfully ofthe three

than

the ownerofa with

t o the plates on authorized vehicles, shall be punishable
records

more

the given
b e e n convicted
a fine of not less than Five Thousand Pesos (P5,000.00)
and

from period

twelve-month been

has
tion of
appear

Act
have
owner
for
violatia

andlor imprisonment of six months at the discretion

of
any
of
this said once

the discrefi

violations

the Court
than
that
or
his

may, infor a period

more

vehicle,
court not
motor
For purposes of renewal of registration of
motor
r e g i s t r a t ion
competent Commissioner

by a
on
shall require the
the of
shall issue valid-
vehicles, the Director or his Deputies
laws, certificate
thereupon,:
such
the
and stickers indicating the year of registry,
and, plates.
suspend

ninety
days number

ating tags
ofthe be under. shall be
to reasonable fee: Provided, That the fee
exceeding
surrender

is found
is charging a
immediate

rvehicle difference in of Transportation

subject to the approval of the Minister
vehicle

motor the
a pay in Minister
shall shortage
and Communications in consultation with the
Whenever

owner
thereof to the
the until such
weighed
fees
corresponding

and of Finance. (As amended by B.P. Blg. 43)

of the
surcharge,
registration
the percent registration

weight plus
a
the
fifty certiicate
of
suspended by the SECTION 18. Use of number plates.-At all times,
is made,
every motor vehicle shall display in conspicuous places,
shall be
payment concerned

one in front and one in the rear thereof, the said

motor
vehicle number
Commissioner
of the
suspensions,
re-registration
plates.
After two such be denied.
concerned for one year may The number plates shall be kept clean and cared
for, and shall be firmly affixed to the motor vehicle in
vehicle
owner of the
shall notify the
The
Commissioner
him under this such a manner as will make it entirely visible and always
action taken by
motor vehicle of any
legible.
section.

Sec. 17. Number plates, preparation

and issuance Except in the case of dealer's number plates which
Transportation shall cause may be used-successively on various motor vehicles
of.- The Bureau of Land in stock, no person shall transfer number plates from
reflective number plates to be prepared and issued to
owners of motor vehicles and trailers registered and motor vehicle to another.
recorded in the Bureau of Land Transportation under No dealer's number plate shall be used on any
this Act, as amended, for a reasonable fee: Provided, motor vehicle after said vehicle has been sold and
That the fee shall be
subject to the approval of the delivered to a purchaser, and no dealer shall allow such
Minister of Transportation and
consultation with the Minister of
Communications in dealer's number plates to be used on any motor vehicle
further, That the identification, Finance, and, Provided, after its sale and delivery to a purchaser.
any motor
numbers and letters of
vehicle number
plate shall
assigned to such motor vehicle permanently be 13.02. REGISTERED oWNER RULE. The rule in this
motor vehicles shall during its lifetime. No jurisdiction is that the person who is the registered owner of a
be
exempted from payment of
registration fees. Motor vehicles
owned motor vehicle is liable for any damage caused by the negligentoperation
vehicles shal bearfor hire and privately o the vehicle although the same was already sold or conveyed to
plates of reflective another person at the time ofthe accident. The registered owneris
 UBLIC
P R r

TRANSPORIAION AND

OF
U T L A T T EL
S AW

PARTI-COMMON
Chapter PROVISIONS
1-General Considerations 35
E8SENTIALS gnLoLrecuro, against the
plained in Erez v.
to
us expi
determination of persons
u b y e t
b o u r t

caused on public responsible for damages or inuries

inyured
partr

1he
Siupreme

highways.
the " "One of the
principal
buyer:
to a 3992, ag of
Iable the
or aw
(Act No.
(Act purposes
legislation is identifcation of the yehicle motor vehicles
and
Law

ISeree
Vebicles

bee used
b
used or operated
o r

case of açcident; and another is that the of the operator,

in
depte:3

Renised
Motor

vehicle
may

the
same
Same
is
1S properly
otdeiechen are always available may act as a knowledge that means
deterrent.from lax
ne

ofhcensing and
no iceno

System of
that unless
he

amended)
prorides

highway
the
system

a a registration
regist
ODservance of the law and of the rules of conservative and sate
any
public stated
that

must
carry

of the precautions
Operation. Whatever purpose there may be in these statutes, It
been machine
is subordinate at the last
upon has of to the primary purpose of
egistered.
Tt
that
each
18
one

pedestrians
and
othe certain rendering it.
that the violatar of the law or of the rules of
safety shall
displayed,

requirement
to
the conspieuously
mjury automobiles
dto notescape because of lack omeans to discover him. The purpose
danger of ol
viala
umber,
reduce
the management
persons of the statute1s thwarted, and the displayed number becomes a
o careless of one
eration
laenaiy
taken
the the and 'snare and delusion, if courts would entertain such defenses as
from ofascertaining
the
speed
bravelers

a
means
regulating

C. L
76)
Nat
only that put forward by appellee
in this case. No responsible
person
(2R.
furnish ordinances,

and highways motor

vehicles areto
veh or corporation could be held liable for the most outrageous acts
laws
the the that no
machines
upon and registered
forthe of negligence, if they should be allowed to place a 'midleman'
of tobe
registered
properily #.
are
vebicles
without
being
vehicles
shall
furnish the bebween them and the public, and escape liability by the manner
operated motor
andaddress
af in which they recompense their servants:" (King v. Brenham
be used
or dealersin name

year,
butthat showWng the month and Automobile Co, 145 S. W. 278, 279)
Oficea report
current
previousS
the
vehicledurng
Vehicles (Section
Motor number. With the above policy in mind, the question that
each purchaser ofmotor number
and
motor

manufacturer's
serial defendant-appellant poses is: should not the registered owner
the
as
amended) be allowed at the trial to prove who the actual and real owner is,
No. 3992, the
5c,Act
registration
make said and in accordance with such proof escape or evade responsibilty
not to
isrequired 15 transferred,
Registration in vehicles
and lay the same on the person actualy owning the vehicle?
which ownership him to
We hold with the trial court that the law does not allow
administrative
operative act by because the
registration cases, essential relation not relieve
as in
land
does not bear any (Chinchilla u, do so; the law, with its aim and policy in mind, does
proceedingofregistradionbebween the parties him directly of the responsibility that the law fixes and places
of sale Were a
but to permit the of registration.
use
to the contract upon him as an incident consequence
or
39 Phil. 888), who
registered owner allowed to evade responsibility by proving
Rafoel and Verdaguer, highway (Section
vehidle upon any public would be easy for him, by
and operation of the aim ofmotor vehicle the supposed transteree or owner is, it
amended). Themain said responsibility
5la), Act No. 3992, as accident collusion with others or otherwise, to escape
owners0 uilal if any or to one who
registration is to identiy the and transfer the same to an
indefinite person,
causedby the vehicle
happens, orthatanydamage orinjuryis
for
with which to respond financially the
can_be fixed possesses no property
On the public highways, responsibility theretor Instances are damage or injury done. A
victim of recklessness on the pubke
or identify the
n a definite individual, the registered owner. caused highways is usually
without means to discover
nuinerouswhere vehicles running on public highways causing the injury or damage.
He has no means
acidents or injuries to pedestrians or other vehicles without person actually the Motor Vehicles
to the registration in
other than by recourse that the law
positive identification of the owner or drivers, or with very scant the owner. The protection
means of identification. It is to forestall these circumstances, Office to determine who is were the registered
would become illusory
aims to extend to him his
s80 nconvenient or prejudicial to the public, that the motor liability by disproving
owner given the
opportunity to escape and carried
vehicle registration is primarily ordained, in the interest of the enforced
of the law is to be
ownership. If the policy not be allowed to prove
the
owner should
out, the registered to
injured, that is, prove
prejudice of the person that
"Caudioso Breza, et al v.Aguedo Jepte, G.R. No. contrary to the has become the owner, so
or another
Kquitable Leasing Carporation Lacita Suyon, et al, L-9605,
v.
GR.
September 30, 196,
No. 143360, Septembe
that a third person
be relieved of
the responsibility
to the injured
6,202, Agimlar Commerial Savings Bank, 412 Phil 834 841
v.
he may thereby
Spouses Dolor,479 PhilL 583, 603 (204) (2001; SpoUSes Hernande
Tbid. person.
 AND
PUBLI

BLIC
TRANSPORTAT7ON
ESSENTIALSOF
UTILITIESLAW
NOH:
inant ia leqst
h e law
law
may appear PARTI cOMMON PROVISIONS
f tthe
ot
ane Chapter 1 General
and,justice. -

Considerations
truth
appication
with 37
and confict ho has.already
who C.

cialnelease
policy to owner

The
above

would
seem

registered
recourse
to third-
a repParty
registeted owner rule applies a
harsh
and

it is
so.
A
has
the him to recover for
to isA "modeunder
cancellabl Joase_contract of exte in financial
lease
ctending credit through
against

9unte think vehicle

or transfer of
We
do
not
transferred a brought
vendee

acquires,at the der which a non-

soldor
action the
is no j u s t i f i c a t i o r tor
instance of the lessee, the lessor purchases or
vehicles,appliances.business
same
against
in the is.
done,
suit

ofthe is the
price
e, machinery, equipment, motor
complaint,
or
injury
inconvenience
inconvenience
d a a y s

or immovadle and office machines,

the
damage

vehicle.
The said that
the law
property
the lessee oI a fixed in and other
consideration of the periodic paymentmovaDle
seventy 0%) of theamount.of
registration
the liability;
him of
with
the
money sufficient to Dy
purchase price or acquisitionamortize
relieving
comply
failure
to
any ncidental expenses at least
for
and a margin of profit overcost,
vehicla:
and requires.
notliable
if
the
To
taken period o nOt less than two an
including
owner
is consent.
the righ-t0_hold and (2) years during obligatory
which the lessee has
The
registered knawledga_and

be likeh
like holding use the leased property,
a.
withvuthis as it would
obligafion.or optionon his x xx but with no
the owner-lessor at the endpart
absurd

fromhis
garage would be cident caused by
accident to purchase the leased
liable
oWner for a n
of the lease propertytrom
of Republic Act (R.A)contract."3
vehicle
regnstered stolen that Section 12 It should be noted
ofa
No. 8556 provides "financing
owner

liable the
who stole
such
vehicle."
ne
if the registered
rae companies shall not be liable for
vehicle, aircraft, vessel, loss, damage or injury caused by
even a motor
person
rule applies

b. The
registered
owner he actual operato
isthe
another who o r d e r to be free property leased to a third equipment, machinery or other
vehicleto from vehicle, aircraft, vessel, person or entity except when the motor
leasedthe Iiable. In
Owner directly
owner is the lease contract
with the financing equipment or other property is operated
The registered
should register company, its employees or agents by
liability, the
lessor-owner

Office."
the lease should -
In other words, loss, damage or at the time of the
injury." However, the Supreme Court clarified in
Land Transportation registration in order that thas
here PCILeasing and Finance, Inc. UCPB General
the certificate of u.
Insurance Co., Ine."
beannotated in
the lessee and not the registered. that Section 12 of RA 8556 did not
parties thatthe repeal Section 5 of the RA 4236,
illbe notice tothird and operating the
cle. As expressed
vehicle The non-registration of the financial lease precludes
ownerwho isinpossessionone case: "a sale, lease, or financial lease the benefits of Section 12 of R.A.
8556.
enjoyment of
by the Supreme Courtin the Land Transportation
for that matter, that is not
registered with d. If
the registered owner is made liable despite the transfer
are aggrieved in tortious of the vehicle, the
third persons who transferee is liable to the registered owner
Ofice, still does not bind
caused to the passenger. He has the right tofor
to rely on the public registration the damages
incidents, for the latter need only be
of a motor vehicle as conclusive
evidence of ownership. A lease rembursed by the transferee. Hence, a third party complaint
instant case is an encumbrance in
against the
such as the one involved in the transferee may be appropriate in a case filed by the
which needs to be registered in order for it to injured passenger against the registered owner.
contemplation of law,
bind third parties. Under this policy, the evil sought to be avoided
is the exacerbation of the suffering of victims of tragic vehicular 13.03. KABIT SYSTEM. The "registered owner rule
accidents in not being able to identify a guilty party. A contrary is applicable whenever the persons involved are engaged in
what is known as the "kabit system." The "kabit system is
ruling will not serve the
ends of justice. The failure to register a
lease, sale, transfer or encumbrance, should not benefit the parties an arrangement whereby a person who has been granteda
responsible, to the prejudice of innocent victims." certiicateof publicconvenience allows other persons who own
motor vehicles to operate them under his license, sometimes

Duavit v. Court of Appeals, 173 SCRA for afee or percentage of the earings. AUthough the parties
TBA Finance 490, 496 [1989].
Corporation v. Court of Appeals, 215 SCRA 715.
PCI Leasing and
Finance, Inc. v. UCPB General sORepublic Act No. 5980 as amended by Republic Act No. 8556, Section 3[d
162267, July 4, 2008. Insurance, Inc., G.R. No.
PCI Leasing and
Finance, Inc. v. UCPB General B1Supra.
BPerez v. Gutierrez, 63 SCRA 149.
Insurance, Inc., ibid.
 PUBLIa

AND
TRANSPORTATION PARTI- COMMON PROVISIONS 39
UTILITIESLA W Chapter 1-General Considerations
ESSENTIALSOF outrightly_penalizedb law,
cond
being contraryy t the registered owner of the vehicle is not allowed to prove
as
38
at
are
are
not
nort
ecOgnized
inexistent
under
Art. 409 nat another person has become the owner
that he may
so
cases
be thereby relieved of responsibility. Subsequent
agreenment
invariably

and
s u c h
an

sVstem
is void affirm such basic doctrine.
kabit
therefore
Abelardn

, et
and in
the
in
then that the thrust of the law
explained
policy
public Code Court
b. It would seem
Civil to penalize the
ofThe The
Supreme

affirma.
nance
enjoining the kabit system is not so much as
parties but to identify the person upon whom responsibility
an

.
Appeals:"

illustrate
that
tho
of the
of
al. v.
Court

Petitioners'attempt to be
supportive

labored

may be fixed in case of an accident_with the end view of.

therefore loses its force
could Their

tho The policy

of
rotectingthe riding public.
decision
persuade.
not rulings
appealed
does of
the if the public at large is not deceived, much
less involved.
of the
questioned
system
kabit the the policy
how to secure
to re
in the Abelardo
pernicious
demonstrate
oppOsed
to diametrically

utilnty
vehicles
is C.
The Supreme Court explained
that the evil sought to
efforts
operation
are
public f o r t h e i r
courts a quo
operators of Lim case that it is at once apparent
does not exist in
convenience

be prevented in enjoining the kabit system

requiring
law
of public
certificate

to the pernicious
the said case. "First, neither of the parties
wherebv
a arrangement
quite unavailing.

is an of publie for damages. Second, the

kabit system is being held liable
certificate

kabit system
a the
of another vehicle in using
The granted motor
vehicles
been
case arose from the negligence
own
who has who
fee or
other persons for a
or misrepresentation,
person
a
public road to whom no representation,
allows sometimes
convenience

under his license, to such

them
parties
the and operation of the passenger
law, the as regards the ownership
Although
to operate
penalized by
earnings. or
of the such representation,
percentage
are not
outrightly
contrary to jeepney was made and to whom no
as being
it cannot be said that
misrepresentation, was necessary. Thus,
agreement recognized
an
invariably under Art.
system is of the
inexistent

void and
kabit
and the registered owner
private respondent Gonzales
therefore
and
public policy to believe that
the public
1409 ofthe Civil Code the Court jeepney were in estoppel for leading
u . Octavio, o w n e r . Third, the riding

In the early
case of Dizon
factors considered
in the jeepney belonged to the registered
one of the
primary inconvenienced at the very
public was neither bothered
n o r
explained that convenience for the
certificate of public the contrary, it was private
the granting of a financial capacity least by the illegal arrangement. On
business of public transportation
is the had been wronged and
w a s seeking
liabilities arising from
of the holder of the license,
so that respondent himself who him. Certainly, it would
The kabit system done to
accidents may be duly compensated. compensation for the damage
worse, may still be him his right." The Supreme
renders illusory such purpose and, be the height of inequity to deny
availed of by the grantee to escape civil liability caused by concluded that that private respondent (one of
Court therefore
negligent use of a vehicle owned by another and operatedd has the right to proceed
a
the alleged parties to the kabit system)
under his license. If a registered owner is allowed to caused to his passenger
the damage
escape liability by proving who the supposed owner of the against petitioners for effort to frustrate his
his business. Any
vehicle is,it would be easy for him to transfer the subject jeepney as well as on with which petitioners
vehicle to another who possesses no property with which claim of damages by the ingenuity
if not repelled.
framed the issue should be discouraged,
to
respond financialy for the damage done. Thus, for the
safety of passengers and the public who may hav een
wronged and deceived through the baneful kabit 13.04. PARI DELICTO
RULE. Persons who are parties
systemn, same as against each
to the kabit" system cannot invoke the agreement or to invoke
other either to enforce theirThis illegal
"Aberlardo Lim, et al. v. Court of is consistent with the time-
Appeals, et al., No. 125817, January 16, 2002, liability.
Baliwag Transit, Inc. v. Court of
Appeals, 147 SCRA 82 [1987]. the same to escape illicito non oritur action" [No
action
B4Ibid. honored maxim "ex pacto a n illegal
entered into
arises out of a n illicit bargain]. "Having
 BLIC
PARTI COMMON PROVISIONS
ESSENTZALsOFTRANSPORTATIONANDPUB

Chapter 1 -

General Considerations
U T I L I T I E SL A W

courts,
. andeach must
an.
cessfully tried to compel the petitioner to remit Social Security
trom
the
System contributions because it was established the private
reliel
1nternmediato
Intermediate Appell respondent worked for and took orders from Pascual Tuazon,
can
seek
acts
late M the person who allegedly using the franchise of the petitioner
his
consequencesofM a r k e t n K
neither
U.
private
esponden
,

the

ioner a in a Kabit System. The employment of the private

ontract,
against
said
ne

respondent
bear
the
in
7eja
fileda
case
lrom

was
ained to
cons
by Pascual Tuazon was long before the incorporation of the pe-
Thus,
purchasea
. petitioner
latter
petItioner
private
spondent titioner. The Court ruled that the remittance was the respon-
the
Court that
the
sidecar.
The
the
the
purchase price. sibility of the employer, Pascual Tuazon, regardless of the ex-
because

alleging
with damages balance
of
tained the dismissa al of the istence or non-existence of Kabit System. The focal issue in the
Althoughthe
motorcycle

action
for
pay
the sustaine
delict
case was the existence of employer-employee relationship.
an to

the petitioner, the

Court
petitio
part
file failed

in the
13.05. AlRCRAFTS AND VESSELS. It is believed
from
Supreme
were trom
allegedly

the
f the petitioner
that the policy which prohibits the "kabit system" may also be
parties O n e
However, purchased
name

the
in the
because p u r s u a n t

applied to vessels and aircrafts that are covered by certificates

allegedly

case
was
registered
Iranchise
ann
p r i o r approval of
be
motorycle

remained
to
the
latter's

mwithout prior
without of public convenience and necessity. It is a basic rule that
under
system was
then the Board
common carrier without securing
was a
$ame operated

"kao n
kabit
(which vill n
(which

no person can operate a

will not aid
and
was
as
a s ot a i d either
Wn
certificate of public convenience and necessity. Hence,
known agency

Commonly government
that
it persons
ruled
s circumvent the law
Who do not have such certificate cannot
appropriate
Court
The
the contract.

of
Transportation).

enforce
an
illegal
Inc.u.
Intermediate Appellate
Intermedi

by using the certificate of another. No permits or certificates

party
to
Enterprises,
purchased
five cars on
can be transferred without the permission of the government
In Lita contracted
witL
with
b.
respondents

agency concerned.s9
the
private franchise,theylatter's
fa
Court had no of the Act
installment.
Since they
for the
use
Possession
vas a.With respect to aircrafts, Section 44 of Republic
the
petitioner
corporation

the cars
as
tax1
units.

of the c a r s No. 9497 otherwise known as the Civil Aviation Authority Act
that theycan
use
Later, one thecertificate of registration of an aircraft
c a s e was filed
so respondentS.
A of 2008 provides that
the private
resulting in death.
retained by
with a
motorcycle
and in
due course,
judgment is conclusive evidence of ownership_except when ownership
the name of the
collided
issue. Hence, in action for damages,
against the
petitioner
corporation was executed and itself is at is conclusive.
Later, the decision carrier appearing in the certificate of
registration
against it.
rendered and another
belonging
private respondent be established.
was

of the cars ofthe

The private respondents No proof to the contrary can
one
levied upon.
demanded that the
were
to the petitioner
their ownership and
decided to register
of registration. The Court
the certificates PROBLEMS:
petitioner turn over delicto
cannot prosper. The in pari truck for hire. He sold the
ruled that the same demand engaged inn 1. A is the registered o w n e r of a to
rule was because the parties were definitely
applied truck to B and possession was
immediately delivered
remained
The truck however,
a "kabit system." B who operated the same.
n a m e of A.
While operating the truck,
Court in the
cHowever, BaliwagTransit, Inc. v. The Hon.
registered heirs
child who died thereafter. The
of Appeals the private respondent Roman Martinez unsuc B's driver ran over a defense is that he
A's
of the child sued A for damages. sold the truck to B
cannot be held liable as
he had already
for the accident.
who was responsible
and it was B's driver
Lita Enterprises v. Intermediate
Appellate Court, No. 64693, April 27, 1984, Decide with reasons.
129 SCRA 79, Teja Marketing v. Intermediate Appellate Court, No. 65510, March 9,
1987, 148 SCRA 347.
Tbid. Act.
Service
8Supra. Act No. 776 as amended; Public
G.R. No. L57493, January 7, 1987, 147 SCRA 82. See Section 23, Republic
 ANIU I

TRANSPORTATION
U T L I T I E SL A W
OF
ESSENTIA/S
Under
the
registered PARTI
Chapter COMMON
victim.

to
tr ansfble to
heirs ofthe owner
remains

As to
-
ROVISIONS
General Considera

to
the
egistered
of the of the lerations 43

A is
hable

the
knowledge

e r of
of a
motor
nmotor

sol.
vehicle is vehicle. The
iable for
sale of the
reckless driver may
A rule, without
owner

unregistered
owner

also be
imprudence resultingcharged
.
registered

criminaly
persons

thind the of a n y
Johnny owns Sarao in
he could operate jeepney. He asked hishomicide
persons,
regardless

1t a
thind
owner
name
oe

The
under Van'sneighbor Van
its
true in
the
public the said jeep
ehicle
registered

egligently by
A, hit and
by A. convenience.
registered Van
his jeep in agreed certificate or
and,
neghgently
jeepney
ofEB was
defense
accordingly,
driving
a driven
The
Van's name. Jonnny
2.
A
was
while
being damages.

X should
s hou s u e C. Rule On
June
operated by Van10, 1990, one of the
for X
andthat
and
B that
jeepney,

s oX
sued
to C
injured
X,
the
jeepney
in due time, he bumped Tomas. Tomas passenger jeepneys
was injured
that he
sold reasons.

to X. IT.
filed a and
with
he
liable
1s o w n e r
r e m . d e r

Van and his driver for thecomplaint for damages

on
B's
defense,

and ns to rendered injuries he suffered. Theagainst

and his judgment in favor of Tomas and
untenable

The
defense ofBis
rule, the k n o w l e d g eof
owner
registered

of thetrans driver, jointly and court

ordered Van
registered walhout of a motor veh
of actual and
moral severally liable, to pay
the

liable
persons
third the r e g i s t e r e d
topersons,
owner

unregistered sale of the

damages,
The sheriff attorney's
fees and uOmas costs.
be
unregistered

third ofany
any continuees.
to levied on the
registered in the namejeepney
of Van.belonging
As to
true
owner
regardless

the registered
owner,
and th
third
Jonnny but to
is its
B, being the public a third-party claim with the Johnny filed
vehicle.
Hence,
v e h i c l e as
regaras
the jeepney sheriff alleging ownership of
ofthe levied upon and
be the
owner

registered in the name of stating that the jeepney was

persons. (1979) owner of
make use of Van's Van merely to enable Johnny to
franchise
holder and registered with Mro certificate of public convenience.
3. Mr. Villa,
a
entered
into a lease contract
truck. The lease May the sheriff
Johnny's jeepney? proceed
for hire, of said 1 with the public auction of
truck the latter
a
for the lease by of the LFTRR
Santos to the knowledge A:
not brought the Land LFTRB.
One Yes, the sheriff may
c o n t r a c t was
approved by EDSA
proceed with the auction sale of the
therefore not along Jeepney. The vehicle remains to be the
and w a s truck w a s speeding property of the
registered owner despite the alleged transfer to another.
stormy night,
said
the, died on the spot.
The parents
over X
who As regards the
skidded and r a n against Mr. Villa for public and third persons, the vehicle is
for damages considered the property of the registered operator (Santos
an action
of X brought
the death of their
son.
v.
Sibug, 104 SCRA 520 [1990).
Mr. Villa prosper?
a) Will the action against
14. BOUNDARY SYSTEM. In land transportation where
Reasons have? the boundary system may be implemented by the common carrier,
if any, does X
b) What recourse, the carrier cannot escape liability by claiming that the driver is a
Under the
Mr. Villa will prosper.
A: a) Yes, the action against
owner remains to be
lessee. The carrier cannot exempt himself on the ground he is a
lessor because to tolerate such position would not only abet flagrant
registered owner rule, the registered
of the transfer. violations of the Public Service Law but also to place the riding public
liable to third persons without knowledge
owner of a motor vehicle reckless because
the registered at the mercy of reckless and irresponsible drivers
-

As to third persons,
of any unregistered sale of the the number
is its true owner regardless the m e a s u r e of their earnings depends largely upon
vehicle. This is especially true in cases involving holders at which they drive; and
of trips they make and, hence, the speed
of franchises. The holders of franchises are liable to the| all of them are in no position to pay
public even if their vehicles are leased to another without | irresponsible because most if not
the damages they might cause.
prior approval of the appropriate government agency.
(MYC Agro-lndustrial v,. Caldo, 132 SCRA 10; Jereos v.
CA, 117 SCRA 795). Erezo v. Jepte, 102
Phil.
July 30, 2004;
b) An action for Hernandez v. Dolor, G.R. No. 160286,
quasi-delict can also be maintained
by the heirs of X against Mrs. Santos and/or the driver 103 (1957).