TIROL, Courtney Allison P.

          14-
0707

2003

Topic: Common Carrier; Breach of Contract; Damages

QUESTION: Vivian Martin was booked by PAL, which acted as a ticketing agent of Far East
Airlines, for a round trip flight on the latter‘s aircraft, from Manila-Hongkong-Manila. The ticket
was cut by an employee of PAL. The ticket showed that Vivian was scheduled to leave Manila
at 5:30 p.m. on 05 January 2002 aboard Far East‘s Flight F007. Vivian arrived at the Ninoy
Aquino International Airport an hour before the time scheduled in her ticket, but was told that
Far East‘s Flight F007 had left at 12:10 p.m. It turned out that the ticket was inadvertently cut
and wrongly worded. PAL employees manning the airport‘s ground services nevertheless
scheduled her to fly two hours later aboard their plane. She agreed and arrived in Hongkong
safely. The aircraft used by Far East Airlines developed engine trouble, and did not make it to
Hongkong but returned to Manila. Vivian sued both airlines, PAL and Far East, for damages
because of her having unable to take the Far East flight. Could either or both airlines be held
liable to Vivian? Why? (6%)

ANSWER: No. In this situation, PAL is the negligent party. Nevertheless, PAL may not be held
liable for damages. Under Article 1732 of the Civil Code, a common carrier is defined as
persons, corporations, firms or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water or air, for compensation, offering their services to
the public. In Crisostomo vs. CA, the Supreme Court explained that a travel agency does not act
as a common carrier because it does not undertake to transport or carry passengers but simply
to procure tickets and make travel arrangements. Consequently, the contract with a ticketing
agent is an ordinary one for services, where the due diligence is that of a good father of a
family. In this case, PAL acted as a ticketing agent for Far East Airlines. While the PAL
employee inadvertently cut and wrongly worded, the PAL employees manning the airport‘s
ground services accommodated Vivian’s concerns and scheduled her to fly two hours later.
Such is not a serious breach of contract but mere inadvertence. Hence, neither may be held
liable to Vivian.

II.

Topic: Charter Party

QUESTION: For the transportation of its cargo from the Port of Manila to the Port of Kobe,
Japan, Osawa & Co. chartered bareboat M/V Ilog of Karagatan Corporation. M/V Ilog met a sea
accident resulting in the loss of the cargo and the death of some of the seamen manning the
vessel. Who should bear the loss of the cargo and the death of the seamen? Why? (4%)

ANSWER: Osawa & Co. shall bear the loss. In Planters Products, Inc. v. Court of Appeals, the
Supreme Court explained that a Charter Party is a contract by which an entire ship or some
principal part thereof is let by the owner to another person for a specified time or use. In
bareboat or demise charter, the whole vessel is let to the charterer with transfer to him of its
entire command, possession, and control. In this case, the charter party is of a bareboat charter.
Hence, Osawa & Co. as charterer is considered the owner of the vessel pro hac vice and bears
the loss of the cargo and death of the seamen.

III.

Topic: Prior Operator Rule

QUESTION: Bayan Bus Lines had been operating satisfactorily a bus service over the route
Manila to Tarlac and vice versa via the McArthur Highway. With the upgrading of the new North
Expressway, Bayan Bus Lines service became seemingly inadequate despite its efforts of
improving the same. Pasok Transportation, Inc., now applies for the issuance to it by the Land
Transportation Franchising and Regulatory Board of a certificate of public convenience for the
same Manila-Tarlac-Manila route. Could Bayan Bus Lines, Inc., invoke the prior operator rule
against Pasok Transportation, Inc.? Why? (6%)

ANSWER: No. Under the Public Service Act, the Prior Operator Rule operates to protect the
first licensee in such a way that the Public Service Commission should not issue a certificate of
public convenience to a second operator when a prior operator is rendering sufficient, adequate,
and satisfactory service, and is complying with the rules and regulations of the Commission. In
this case, Bayan Bus Lines service became seemingly inadequate despite its efforts of
improving the same. Hence, the Prior Operator Rule does not apply and Bayan Bus Lines
cannot invoke the same against Pasok Transportation.