ESSENTIALS OF TRANSPORTATION

AND PUBLIC UTILITIES LAW

Based on Aquino
PART 1: COMMON CARRIERS
CHAPTER 1: GENERAL CONSIDERATIONS

CONTRACT OF TRANSPORTATION – when a person obligates himself

to transport persons or property from one place to another for a
consideration.
 The contract may involve carriage of passengers or carriage of
goods.
 The person who obligates himself to transport the goods or
passengers may be a common carrier or a private carrier

PARTIES:
1. CARRIAGE OF PASSENGERS
a. Common Carrier
b. Passenger – one who travels in a public conveyance by
virtue of contract, express or implied, with the carrier as to
the payment of fare or that which is accepted as an
equivalent.

Note:
 Gratuitous or Reduced Fare – a passenger is still
considered as such (passenger) even if he is being carried
gratuitously or under a reduced fare.
- Rule: Art 1758 – when a passenger is carried
gratuitously – a stipulation limiting the common
carrier’s liability for negligence is valid.

 Baliwag Transit Corp v CA – Since the suit was for breach

of contract of carriage, the real party-in-interest was the
injured passenger because the latter is the contracting
party. Hence, his parents cannot maintain an action
because they are not real parties=in-interest in an action
for breach of contract of carriage. Every action based on
contract must be brought by the person whose contractual
right has been invaded.

2. CARRIAGE OF GOODS
a. CARRIER
b. SHIPPER – the person who delivers the goods to the
carrier for transportation; the person who pays the
consideration or on whose behalf payment is made.
c. CONSIGNEE – the person to whom the goods are to be
delivered. May be a:
i. Shipper – where the goods will be delivered to one
of the branch offices of the shipper
ii. 3rd Person who is not actually a party to the contract

Note: When Consignee is bound by Contract – the consignee

may be deemed to be bound by the terms and conditions of the
bill of lading where it was established that he accepted the
same and is trying to enforce the agreement.

PERFECTION:
 2 types of contract of carriage of passengers
a. CONTRACT TO CARRY – an agreement to carry the
passenger at some future date. This contract is consensual
and is perfected by mere consent.
b. CONTRACT OF CARRIAGE or OF COMMON CARRIAGE
ITSELF – which should be considered a real contract for
not until the facilities of the carrier are actually used can
the carrier be said to have already assumed the obligation
of the carrier.

PERFECTION OF CONTRACT OF CARRIAGE OF GOODS

 There may be a consensual contract to carry goods whereby
the carrier agrees to accept and transport goods at some future
date.
 However, by the act of delivery of the goods, that, “when the
goods are unconditionally placed in the possession and control
of the carrier, and upon their receipt by the carrier for
transportation, the contract of carrier is perfected.

1) Kilusang Mayo Uno Labor Center vs. Jesus Garcia, GR 115381,
23 December 1994 (Note: study footnotes re: regulatory
reorganization)
DOCTRINES:
Public Utilities; Common Carriers; Words and Phrases;
 Public utilities are privately owned and operated businesses
whose services are essential to the general public.
 They are enterprises which specially cater to the needs of the
public and conduce to their comfort and convenience.
 As such, public utility services are impressed with public
interest and concern. The same is true with respect to the
business of common carrier which holds such a peculiar relation
to the public interest that there is super induced upon it the
right of public regulation when private properties are affected
with public interest, hence, they cease to be juris private only.
 When one devotes his property to a use in which the public
has an interest, he, in effect grants to the public an interest in
that use, and must submit to the control by the public for the
common good, to the extent of the interest he has thus
created.
Judicial Review; Parties; Words and Phrases; “Judicial Power,”
Defined
 The requirement of locus standi inheres from the definition of
judicial power.
 In Lamb v. Phipps, we ruled that judicial power is the power to
hear and decide causes pending between parties who have the
right to sue in the courts of law and equity.
 Corollary to this provision is the principle of locus standi of a
party litigant.
 One who is directly affected by, and whose interest is
immediate and substantial in the controversy has the standing
to sue.
 The rule therefore requires that a party must show a personal
stake in the outcome of the case or an injury to himself that can
be redressed by a favorable decision so as to warrant an
invocation of the court’s jurisdiction and to justify the exercise
of the court’s remedial powers in his behalf.
The KMU, whose members had suffered and continue to suffer
grave and irreparable injury and damage from the implementation
of certain government memoranda, circulars and orders affecting
common carriers, has the standing to sue to question the same
 At the outset, the threshold issue of locus standi must be
struck. Petitioner KMU has the standing to sue.
 In the case at bench, petitioner, whose members had suffered
and continue to suffer grave and irreparable injury and damage
from the implementation of the questioned memoranda,
circulars and/or orders, has shown that it has a clear legal right
that was violated and continues to be violated with the
enforcement of the challenged memoranda, circulars and/or
orders. KMU members, who avail of the use of buses, trains and
jeepneys everyday, are directly affected by the burdensome
cost of arbitrary increase in passenger fares.
 They are part of the millions of commuters who comprise the
riding public. Certainly, their rights must be protected, not
neglected nor ignored.
The Supreme Court is ready to brush aside a procedural infirmity
when the issues raised are of transcendental importance
 Assuming arguendo that petitioner is not possessed of the
standing to sue, this court is ready to brush aside this barren
procedural infirmity and recognize the legal standing of the
petitioner in view of the transcendental importance of the
issues raised. And this act of liberality is not without judicial
precedent.
 As early as the Emergency Powers Cases, this Court had
exercised its discretion and waived the requirement of proper
party.
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
Political Law; Administrative Law; Delegation of Powers; Power of
Subordinate Legislation;
 The Legislature has delegated to the defunct Public Service
Commission, and presently the LTFRB, the power of fixing the
rates of public services
 Under the foregoing provision, the Legislature delegated to the
defunct Public Service Commission the power of fixing the rates
of public services.
 Respondent LTFRB, the existing regulatory body today, is
likewise vested with the same under EO 202 dated June 19,
1987.
 Section 5(c) of the said executive order authorizes LTFRB “to
determine, prescribe, approve and periodically review and
adjust, reasonable fares, rates and other related charges,
relative to the operation of public land transportation services
provided by motorized vehicles.”
Given the task of determining sensitive and delicate matters as
route-fixing and rate-making for the transport sector, the
responsible regulatory body is entrusted with the power of
subordinate legislation, under which such administrative body may
implement broad policies laid down in a statute by “filling in” the
details which the Legislature may neither have time nor
competence to provide
 Such delegation of legislative power to an administrative
agency is permitted in order to adapt to the increasing
complexity of modern life.
 As subjects for governmental regulation multiply, so does the
difficulty of administering the laws. Hence, specialization even
in legislation has become necessary. Given the task of
determining sensitive and delicate matters as route-fixing and
rate-making for the transport sector, the responsible regulatory
body is entrusted with the power of subordinate legislation.
 With this authority, an administrative body and in this case, the
LTFRB, may implement broad policies laid down in a statute by
“filling in” the details which the Legislature may neither have
time nor competence to provide.
 However, nowhere under the aforesaid provisions of law are
the regulatory bodies, the PSC and LTFRB alike, authorized to
delegate that power to a common carrier, a transport operator,
or other public service.
The authority given by the LTFRB to the provincial bus operators to
set a fare range over and above the authorized existing fare, is
illegal and invalid as it is tantamount to an undue delegation of
legislative authority; Potestas delegata non delegari potest
 What has been delegated cannot be delegated. This doctrine is
based on the ethical principle that such a delegated power
constitutes not only a right but a duty to be performed by the
delegate through the instrumentality of his own judgment and
not through the intervening mind of another.
 A further delegation of such power would indeed constitute a
negation of the duty in violation of the trust reposed in the
delegate mandated to discharge it directly.
Rate Fixing;
 Rate making or rate fixing – Is a delicate and sensitive
government function that requires dexterity of judgment and
sound discretion with the settled goal of arriving at a just and
reasonable rate acceptable to both the public utility and the
public
 Several factors, in fact, have to be taken into consideration
before a balance could be achieved. A rate should not be
confiscatory as would place an operator in a situation where he
will continue to operate at a loss. Hence, the rate should enable
public utilities to generate revenues sufficient to cover
operational costs and provide reasonable return on the
investments.
 On the other hand, a rate which is too high becomes
discriminatory. It is contrary to public interest.
 A rate, therefore, must be reasonable and fair and must be
affordable to the end user who will utilize the services.

Due Process;
 The government must not relinquish the important function
of rate-fixing; The people deserve to be given full opportunity
to be heard in their opposition to any fare increase
 Given the complexity of the nature of the function of rate-fixing
and its far-reaching effects on millions of commuters,
government must not relinquish this important function in
favor of those who would benefit and profit from the industry.
 Neither should the requisite notice and hearing be done away
with.
 The people, represented by reputable oppositors, deserve to be
given full opportunity to be heard in their opposition to any
fare increase.
Certificates of Public Convenience (CPC); Words and Phrases; CPC,
Explained; Requisites before a CPC may be granted
 A certificate of public convenience (CPC) is an authorization
granted by the LTFRB for the operation of land transportation
services for public use as required by law.
 Pursuant to Section 16(a) of the Public Service Act, as amended,
the following requirements must be met before a CPC may beg
ranted, to wit:
(i) the applicant must be a citizen of the Philippines, or
a corporation or co-partnership, association or joint-
stock company constituted and organized under the
laws of the Philippines, at least 60 per centum of its
stock or paid-up capital must belong entirely to
citizens of the Philippines;
(ii) the applicant must be financially capable of
undertaking the proposed service and meeting the
responsibilities incident to its operation; and
(iii) the applicant must prove that the operation of the
public service proposed and the authorization to do
business will promote the public interest in a proper
and suitable manner.
 It is understood that there must be proper notice and hearing
before the PSC can exercise its power to issue a CPC.
Administrative Law; Statutory Construction;
 The above-quoted provision is entirely incompatible and
inconsistent with Section16(c)(iii) of the Public Service Act
which requires that before a CPC will be issued, the applicant
must prove by proper notice and hearing that the operation of
the public service proposed will promote public interest in a
proper and suitable manner.
 On the contrary, the policy guideline states that the
presumption of public need for a public service shall be deemed
in favor of the applicant.
 In case of conflict between a statute and an administrative
order, the former must prevail.
Evidence; Presumptions;
 By its terms, public convenience or necessity generally means
something fitting or suited to the public need.
 As one of the basic requirements for the grant of a CPC, public
convenience and necessity exists when the proposed facility or
service meets a reasonable want of the public and supply a
need which the existing facilities do not adequately supply.
 The existence or non-existence of public convenience and
necessity is therefore a question of fact that must be
established by evidence, real and/or testimonial; empirical
data; statistics and such other means necessary, in a public
hearing conducted for that purpose.
 The object and purpose of such procedure, among other things,
is to look out for, and protect, the interests of both the public
and the existing transport operators.
 Verily, the power of a regulatory body to issue a CPC is founded
on the condition that after full-dress hearing and investigation,
it shall find, as a fact, that the proposed operation is for the
convenience of the public.
Separation of Powers; Supreme Court;
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 The establishment of a presumption of public need in favor of
an applicant for CPC reverses well-settled and institutionalized
judicial, quasi-judicial and administrative procedures, and
would in effect amend the Rules of Court by adding another
disputable presumption under Rule 131;
 Only the Supreme Court is mandated by law to promulgate
rules concerning pleading, practice and procedure
 It allows the party who initiates the proceedings to prove, by
mere application, his affirmative allegations.
 Moreover, the offending provisions of the LTFRB memorandum
circular in question would in effect amend the Rules of Court by
adding another disputable presumption in the enumeration of
37 presumptions under Rule 131, Section 5 of the Rules of
Court.
 Such usurpation of this Court’s authority cannot be
countenanced as only this Court is mandated by law to
promulgate rules concerning pleading, practice and procedure.
Police Power; Deregulation;
 Advocacy of liberalized franchising and regulatory process is
tantamount to an abdication by the government of its
inherent right to exercise police power, of the right to
regulate public utilities for protection of the public and the
utilities themselves.
 Deregulation, while it may be ideal in certain situations, may
not be ideal at all in our country given the present
circumstances.
FACTS:
 Then Secretary of DOTC, Oscar M. Orbos, issued Memorandum
Circular No. 90-395 to then LTFRB Chairman, Remedios A.S.
Fernando allowing provincial bus operators to charge
passengers rates within a range of 15% above and 15% below
the LTFRB official rate for a period of (1) year.
 This range was later increased by LTFRB thru a Memorandum
Circular No. 92-009 providing, among others, that "The existing
authorized fare range system of plus or minus 15 per cent for
provincial buses and jeepneys shall be widened to 20% and
-25% limit in 1994 with the authorized fare to be replaced by an
indicative or reference rate as the basis for the expanded fare
range."
 Sometime in March, 1994, private respondent PBOAP, availing
itself of the deregulation policy of the DOTC allowing provincial
bus operators to collect plus 20% and minus 25% of the
prescribed fare without first having filed a petition for the
purpose and without the benefit of a public hearing,
announced a fare increase of twenty (20%) percent of the
existing fares.
 On March 16, 1994, petitioner KMU filed a petition before the
LTFRB opposing the upward adjustment of bus fares, which the
LTFRB dismissed for lack of merit.
ISSUE: WON the authority given by respondent LTFRB to provincial
bus operators to set a fare range of plus or minus (15%) percent,
later increased to plus (20%) and minus (-25%) percent, over and
above the existing authorized fare without having to file a petition
for the purpose, is unconstitutional, invalid and illegal.
HELD: Yes
 Under section 16(c) of the Public Service Act, the Legislature
delegated to the defunct Public Service Commission the power
of fixing the rates of public services.
 Respondent LTFRB, the existing regulatory body today, is
likewise vested with the same under Executive Order No. 202
dated June 19, 1987. x x x However, nowhere under the
aforesaid provisions of law are the regulatory bodies, the PSC
and LTFRB alike, authorized to delegate that power to a
common carrier, a transport operator, or other public service.

2) Philippine Airlines vs. Civil Aviation Board, GR 119528, 26
March 1997
DOCTRINE:
Public Utilities; Transportation; Air Transportation; Franchises; Civil
Aeronautics Board;
 The Civil Aeronautics Board is expressly authorized by
Republic Act No. 776 to issue a temporary operating permit or
Certificate of Public Convenience and Necessity, and nothing
contained in the said law negates the power to issue said
permit before the completion of the applicant’s evidence and
that of the oppositor thereto on the main petition.
 The Civil Aeronautics Board has jurisdiction over Grand Air’s
Application for a Temporary Operating Permit.
 Indeed, the CAB’s authority to grant a temporary permit “upon
its own initiative” strongly suggests the power to exercise said
authority, even before the presentation of said evidence has
begun.
 Assuming arguendo that a legislative franchise is prerequisite to
the issuance of a permit, the absence of the same does not
affect the jurisdiction of the Board to hear the application, but
tolls only upon the ultimate issuance of the requested permit.
Words and Phrases; “Franchise,” Explained;
 The power to authorize and control the operation of a public
utility is admittedly a prerogative of the legislature, since
Congress is that branch of government vested with plenary
powers of legislation.
 “The franchise is a legislative grant, whether made directly by
the legislature itself, or by any one of its properly const ituted
instrumentalities.
 The grant, when made, binds the public, and is, directly or
indirectly, the act of the state.”
Delegation of Powers; Administrative Law;
 Congress has granted certain administrative agencies the
power to grant licenses for, or to authorize the operation of,
certain public utilities.
 With the growing complexity of modern life, the multiplication
of the subjects of governmental regulation, and the increased
difficulty of administering the laws, there is a constantly
growing tendency towards the delegation of greater powers by
the legislature, and towards the approval of the practice by the
courts.
 It is generally recognized that a franchise may be derived
indirectly from the state through a duly designated agency,
and to this extent, the power to grant franchises has
frequently been delegated, even to agencies other than those
of a legislative nature.
 In pursuance of this, it has been held that privileges conferred
by grant by local authorities as agents for the state constitute
as much a legislative franchise as though the grant had been
made by an act of the Legislature.
The trend of modern legislation is to vest the Public Service
Commissioner with the power to regulate and control the
operation of public services under reasonable rules and
regulations.
 and as a general rule, courts will not interfere with the exercise
of that discretion when it is just and reasonable and founded
upon a legal right.
The Civil Aeronautics Board has the authority to issue a Certificate
of Public Convenience and Necessity, or Temporary Operating
Permit to a domestic air transport operator, who, though not
possessing a legislative franchise, meets all the other requirements
prescribed by law.
 Such requirements were enumerated in Sect 21 of R.A. No. 776.
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
There is nothing in the lawn or in the Constitution, which indicates
that a legislative franchise is an indispensable requirement for an
entity to operate as a domestic air transport operator.
 Although Sec 11 of Art XII recognizes Congress’ control over any
franchise, certificate or authority to operate a public utility, it
does not mean Congress has exclusive authority to issue the
same.
 Franchises issued by Congress are not required before each and
every public utility may operate. In many instances, Congress
has seen it fit to delegate this function to government agencies,
specialized particularly in their respective areas of public
service.
Words and Phrases; “Convenience and Necessity,” Explained;
 The terms “convenience and necessity,” if used together in a
statute, are usually held not to be separable, but are
construed together—both words modify each other.
 Many and varied are the definitions of certificates of public
convenience which courts and legal writers have drafted.
 Some statutes use the terms “convenience and necessity” while
others use only the words “public convenience.”
 The word ‘necessity’ is so connected, not as an additional
requirement but to modify and qualify what might otherwise
be taken as the strict significance of the word necessity.
 Public convenience and necessity exists when the proposed
facility will meet a reasonable want of the public and supply a
need which the existing facilities do not adequately afford.
 It does not mean or require an actual physical necessity or an
indispensable thing.
 “The terms ‘convenience’ and ‘necessity’ are to be construed
together, although they are not synonymous, and effect must
be given both.
 The convenience of the public must not be circumscribed by
according to the word ‘necessity’ its strict meaning or an
essential requisites.”
Congress, by giving the CAB the power to issue permits for the
operation of domestic transport services, has delegated to the said
body the authority to determine the capability and competence of
a prospective domestic air transport operator to engage in such
venture
 This is not an instance of transforming the respondent Board
into a mini legislative body, with unbridled authority to choose
who should be given authority to operate domestic air
transport services.
FACTS:
 This Special Civil Action seeks to prohibit respondent Civil
Aeronautics Board from exercising jurisdiction over private
respondent’s Application for the issuance of a Certificate of
Public Convenience and Necessity, and to annul and set aside a
temporary operating permit issued by the Civil Aeronautics
Board in favor of Grand International Airways, allowing the
same to engage in scheduled domestic air transportation
services, particularly the Manila-Cebu, Manila-Davao, and
converse routes.
 Philippine Airlines, Inc. (PAL) alleges that GrandAir does not
possess a legislative franchise authorizing it to engage in air
transportation service within the Philippines or elsewhere. Such
franchise is, as argued, a requisite for the issuance of a
Certificate of Public Convenience or Necessity by the
respondent Board, as mandated under Section 11, Article XII of
the Constitution.
 Respondent GrandAir, on the other hand, posits that a
legislative franchise is no longer a requirement for the issuance
of a Certificate of Public Convenience and Necessity or a
Temporary Operating Permit, following the Court’s
pronouncements in various jurisprudential cases.
ISSUE: Whether or not Congress, in enacting RA 776, has delegated
the authority to authorize the operation of domestic air transport
services to the respondent Board, such that Congressional mandate
for the approval of such authority is no longer necessary.
HELD:

 It is generally recognized that a franchise may be derived
indirectly from the state through a duly designated agency, and
to this extent, the power to grant franchises has frequently
been delegated, even to agencies other than those of a
legislative nature.
 In pursuance of this, it has been held that privileges conferred
by a grant by local authorities as agents for the state constitute
as much a legislative franchise as though the grant had been
made by an act of the Legislature.
 The trend of modern legislation is to vest the Public Service
Commissioner with the power to regulate and control the
operation of public services under reasonable rules and
regulations, and as a general rule, courts will not interfere with
the exercise of that discretion when it is just and reasonable
and founded upon a legal right.
 The Civil Aeronautics Board has the authority to issue a
Certificate of Public Convenience and Necessity, or Temporary
Operating Permit to a domestic air transport operator, who,
though not possessing a legislative franchise, meets all the
other requirements prescribed by the law.
 Such requirements were enumerated in Section 21 of R.A. 776.
There is nothing in the law nor in the Constitution, which
indicates that a legislative franchise is an indispensable
requirement for an entity to operate as a domestic air transport
operator.
 Although Section 11 of Article XII recognizes Congress’ control
over any franchise, certificate or authority to operate a public
utility, it does not mean Congress has exclusive authority to
issue the same.
 Franchises issued by Congress are not required before each and
every public utility may operate.
 In many instances, Congress has seen it fit to delegate this
function to government agencies, particularly specialized in
their respective areas of public service.
3) Rodolfo Albano vs. Raniero Reyes, GR 83551, 11 July 1989
DOCTRINE
Public Service Act; Public Utilities; Franchise;
 A legislative franchise is not necessary for the operation of the
Manila International Container Port (MICP); Reasons; Case at
bar.
 A review of the applicable provisions of law indicates that a
franchise specially granted by Congress is not necessary for the
operation of the Manila International Container Port (MICP) by
private entity, a contract entered into by the PPA and such
entity constituting substantial compliance with the law.
Under E.O. No. 30 and P.D. No. 857, the PPA may contract with the
International Container Terminal Services Inc. for the
management, operation and development of the MICP.
 Thus, while the PPA has been tasked, under E.O. No.30, with
the management and operation of the Manila International
Port Complex and to undertake the providing of cargo handling
and port related services thereat, the law provides that such
shall be “in accordance with P.D. 857 and other applicable laws
and regulations.”
 On the other hand, P.D. No. 857 expressly empowers the PPA
to provide services within Port Districts “whether on its own, by
contract, or otherwise” [Sec. 6(a)(v)].
 Therefore, under the terms of E.O. No. 30 and P.D. No. 857, the
PPA may contract with the International Container Terminal
Services, Inc. (ICTSI) for the management, operation and
development of the MICP.
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
The law granted certain administrative agencies the power to grant
licenses for the operation of public utilities; Theory that MICP is a
“wharf” or a “dock”, not necessarily calls for a franchise from
Legislative Branch.
 Even if the MICP be considered a public utility, or a public
service on the theory that it is a “wharf” or a “dock” as
contemplated under the Public Service Act, its operation would
not necessarily call for a franchise from the Legislative Branch.
 Franchises issued by Congress are not required before each and
every public utility may operate.
 Thus, the law has granted certain administrative agencies the
power to grant licenses for or to authorize the operation of
certain public utilities. (See E.O. Nos. 172 and 202)
The lawmaker has empowered the PPA to undertake by itself the
operation of MICP or to authorize its operation by another by
contract or other means.
 As stated earlier, E.O. No. 30 has tasked the PPA with the
operation and management of the MICP, in accordance with
P.D. 857 and other applicable laws and regulations.
 However, P.D. 857 itself authorizes the PPA to perform the
service by itself, by contracting it out, or through other means.
Reading E.O. No. 30 and P.D. No.857 together, the inescapable
conclusion is that the lawmaker has empowered the PPA to
undertake by itself the operation and management of the MICP
or to authorize its operation and management by another by
contract or other means, at its option.
 The latter power having been delegated to the PPA, a franchise
from Congress to authorize an entity other than the PPA to
operate and manage the MICP becomes unnecessary.
Constitutional Law; he award of the MICP contract approved by
the Chief Executive of the Philippines is constitutional; Legal
presumption of validity and regularity of official function.
 The contract between the PPA and ICTSI, coupled with the
President’s written approval, constitute the necessary
authorization for ICTSI’s operation and management of the
MICP. The award of the MICT contract approved by no less than
the President of the Philippines herself enjoys the legal
presumption of validity and regularity of official action.
 In the case at bar, there is no evidence which clearly shows the
constitutional infirmity of the questioned act of government.
Petitioner has sufficient standing to institute an action where
public right is sought to be enforced.
 That petitioner herein is suing as a citizen and taxpayer and as a
Member of the House of Representatives, sufficiently clothes
him with the standing to institute the instant suit questioning
the validity of the assailed contract.
 While the expenditure of public funds may not be involved
under the contract, public interest is definitely involved
considering the important role of the MICP in the economic
development of the country and the magnitude of the financial
consideration involved.
 Consequently, the disclosure provision in the Constitution
would constitute sufficient authority for upholding petitioner’s
standing. [Cf. Tañada v. Tuvera, G.R. No. 63915, April 24, 1985,
136SCRA 27, citing Severino v. Governor General, 16 Phil.
366(1910), where the Court considered the petitioners with
sufficient standing to institute an action where a public right is
sought to been forced.]

Public Bidding;
 The PPA is the agency in the best position to evaluate the
feasibility of the projections of the bidders
 The Court nor Congress has the technical expertise to look
into this matter.
 The determination of whether or not the winning bidder is
qualified to undertake the contracted service should be left to
the sound judgment of the PPA.
 The PPA, having been tasked with the formulation of a plan for
the development of port facilities and its implementation
[Sec.6(a) (i)], is the agency in the best position to evaluate the
feasibility of the projections of the bidders and to decide which
bidis compatible with the development plan.
 Neither the Court, nor Congress, has the time and the technical
expertise to look into this matter.
GUTIERREZ, JR., J., Concurring Opinion:
Public Utilities; Franchise; Public Biddings ;
 The determination of whether or not the winning bidder is
qualified to undertake the contracted service should be left to
PPA.
 I concur in the Court’s decision that the determination of
whether or not the winning bidder is qualified to undertake the
contracted service should be left to the sound judgment of the
Philippine Ports Authority (PPA).
 I agree that the PPA is the agency which can best evaluate the
comparative qualifications of the various bidding contractors
and that in making such evaluation it has the technical
expertise which neither this Court nor Congress possesses.
Pleadings;
 PPA should show greater consistency in its submissions to the
Supreme Court
 I was surprised during the oral arguments of the present
petition to hear the counsel for PPA submit diametrically
different statements regarding the capabilities and worth of E.
Razon, Inc., as an arrastre operator.
 It now turns out that the Manila International Container
Terminal will depend a great deal on the expertise, reliability
and competence of E. Razon, Inc., for its successful operations.
 The time difference between the two petitions is insubstantial.
After going over the pleadings of the present petition, I am now
convinced that it is the submissions of PPA in this case and not
its contentions in G.R. No. 75197 which are accurate and
meritorious.
 There is the distinct possibility that we may have been unfair in
the earlier petition because of assertions made therein which
are contradictory to the submissions in the instant petition.
 No such doubts would exist if the Government is more
consistent in its pleadings on such important factual matters as
those raised in these two petitions.
FACTS:
 The Philippine Ports Authority (PPA) board directed the PPA
management to prepare for the public bidding of the
development, management and operation of the Manila
International Container Terminal (MICT) at the Port of Manila.
 A Bidding Committee was formed by the DOTC for the public
bidding. After evaluation of several bids, the Bidding Committee
recommended the award of the contract to respondent
International Container Terminal Services, Inc. (ICTSI).
 Accordingly, Rainerio Reyes, then DOTC secretary, declared the
ICTSI consortium as the winning bidder.
 On May 18, 1988, the President of the Philippines approved the
same with directives that PPA shall still have the responsibility
for planning, detailed engineering, construction, expansion,
rehabilitation and capital dredging of the port, as well as the
determination of how the revenues of the port system shall be
allocated for future works; and the contractor shall not collect
taxes and duties except that in the case of wharfage or tonnage
dues.
 Petitioner Albano, as taxpayer and Congressman, assailed the
legality of the award and claimed that since the MICT is a public
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
utility, it needs a legislative franchise before it can legally
operate as a public utility.
ISSUE: Whether a franchise is needed for the operation of the MICT?
HELD: No
 While the PPA has been tasked under E.O. No. 30 with the
management and operation of the MICT and to undertake the
provision of cargo handling and port related services thereat,
the law provides that such shall be “in accordance with P.D. 857
and other applicable laws and regulations”. P.D. 857 expressly
empowers the PPA to provide services within Port Districts
“whether on its own, by contract, or otherwise”.
 Even if the MICT is considered a public utility, its operation
would not necessarily need a franchise from the legislature
because the law has granted certain administrative agencies
the power to grant licenses for or to authorize the operation of
public utilities. Reading E.O. 30 and P.D. 857 together, it is clear
that the lawmaker has empowered the PPA to undertake by
itself the operation and management of the MICP or to
authorize its operation and management by another by
contract or other means, at its option.
Doctrine: The law granted certain administrative agencies the power
to grant licenses for the operation of public utilities. Theory that
MICT is a “wharf” or a “dock”, as contemplated under the Public
Service Act, would not necessarily call for a franchise from the
Legislative Branch.
4) Baldomero Luque, et al. vs. Hon. Antonio Villegas, et al., GR L-
22545, 28 November 1969
DOCTRINE:
Commercial law; Public Service Law; Power of Public Service
Commission and City of Manila over motor traffic;
 Ordinance 4986 of the City of Manila approved on July 13,
1964 rerouting traffic on roads and streets in the City of
Manila is valid
1. RA 409, as amended, otherwise known as the Revised
Charter of the City of Manila, is a special law and of later
enactment than CA 548 and the Public Service Law (CA
146, as amended) so that even if conflict exists between
the two, Republic Act No. 409 should prevail as a later act
than CA Nos. 548 and 146.
2. the powers conferred by law upon the Public Service
Commission were not designed to deny or supersede the
regulatory power of local governments over motor traffic,
in streets subject to their control.
AO No. 3, series of 1964, dated April 21, 1964 and AO No. 1, series
of1964 dated February 7, 1964, issued by Commissioner Medina
are valid even if the provisions of the bus ban had not been
incorporated into the certificate of public convenience.
 Certificate of public convenience, like all other similar
certificates, are issued subject to the condition that operators
shall observe and comply with all the rules and regulations of
the Commission relative to PUB service.
Civil law; Property; Vested rights; Defined.
 It has been said that a vested right is one which is fixed,
unalterable, or irrevocable: absolute, complete, and
unconditional, to the exercise of which no obstacle exists.
 When the right to enjoyment, presentor prospective, has
become the property of some particular person or persons as a
present interest, that right is a vested right.
Commercial law; Public Service Law:

 Certificate of Public Convenience confers no vested right to
operate public utility vehicles in the route covered thereby
 A certificate of public convenience constitutes neither a
franchise nor a contract, confest no property right, and is a
mere license or privilege.
 The holder of such certificate does not acquire a property right
in the route covered thereby. Nor does it confer upon the
holrer any proprietary right or interest or franchise in the public
highways.
 Revocation of this certificate deprives him of no vested right.
New and additional burdens, alteration of the certificate, and
even revocation or annulment thereof is reserved to the State.
Bus passengers have no vested right to be tramported directly to
City of Manila.
 Bus passengers have no vested right to be transported directly
ints the City of Manila.
 The alleged right of bus passengers, to a great extent, is
dependent upon the manner public services are allowed to
operate within a given area.
Political law; Constitutional law; Police power;
 Regulation of vehicular traffic; Ordinance 4986 of City of
Manila and Commissioner Medina's Administrative Orders
Nos. 1 and 3,series of 1964, ore valid exercise of police power.
 Both Ordinance 4986 and the Commissioner's administrative
orders fit into the concept of promotion of the general welfare.
 Public welfare lies at the bottom of any regulatory measure
designed to relieve congestion of traffic, which is, to say the
least, a menace to public safety.
 As a corollary, measures calculated to promote the safety and
convenience of the people using the thoroughfares by the
regulation of vehicular traffic present a proper subject for the
exercise of police power.
Ordinance 4986 of City of Manila, is not a, class legislation.
 While the ordinance in question allows inter urban buses to
enter the City of Manila which privilege is not given to
provincial buses, although they are allowed shuttle service into
the City of Manila, there is no unjustified discrimination under
the law.
 The obvious inequality in treatment is but the result flowing
from the classification made by the ordinance between inter-
urban buses and provincial buses. Inter-urban buses are used
for transporting passengers only.
 Provincial buses are used for passengers and freight. Provincial
buses, because of the freight of baggage which the passengers
usually bring along with them, take longer time to load or
unload than inter-urban buses.
 Provincial buses generally travel along national highways and
provincial roads, cover long distances, have fixed trip schedules.
 Provincial buses are greater in size and weight than inter-urban
buses.
 The routes of inter-urban buses are short, covering contiguous
municipalities and cities only. These distinctions generally hold
true between provincial passenger jeepneys and inter-urban
passenger jeepneys.
Does not violate equal protection clause.
 The ordinance in question does not violate the equal protection
clause.
 Persons engaged in the same business are subjected to
different restrictions or are held entitled to different privileges
under the same conditions. Neither does the ordinance
unjustifiably favor private vehicles over public vehicles.
 Private vehicles are not geared for profit; usually, they have but
one destination.
 Public vehicles are operated primarily for profit and for this
reason are continually operated to make the most of time.
Public and private vehicles belong to different classes.
FACTS:
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 Petitioners ( who are passengers from Cavite and Batangas who
ride on buses to and from their province and Manila) and some
public service operators of buses and jeeps assail the validity of
Ordinance 4986and Administrative Order 1.
 Ordinance 4986 states that PUB and PUJs shall be allowed to
enter Manila only from 6:30am to 8:30pm every day except
Sundays and holidays.
 Petitioners contend that since they possess a valid CPC, they
have already acquired a vested right to operate.
 Administrative Order 1 issued by Commissioner of Public
Service states that all jeeps authorized to operate from Manila
to any point in Luzon, beyond the perimeter of Greater Manila,
shall carry the words "For Provincial Operation".
ISSUE
1. Whether or not the said regulations are valid.
2. Whether or not Ordinance 4986 destroys vested rights to
operate in Manila.
HELD:
1. YES
 Using the doctrine in Lagman vs. City of Manila,
Petitioner's Certificate of Public Convenience was issued
subject to the condition that operators shall observe and
comply with all the rules and regulations of the PSC
relative to PUB service.
 The purpose of the ban is to minimize the problem in
Manila and the traffic congestion, delays and accidents
resulting from the free entry into the streets of Manila and
the operation around said streets.
 Both Ordinance 4986 and AO 1 fit into the concept of
promotion and regulation of general welfare.
2. NO
 A vested right is some right or interest in the property
which has become fixed and established and is no longer
open to doubt or controversy. As far as the State is
concerned, a CPC constitutes neither a franchise nor a
contract, confers no property right, and is a mere license
or privilege.
 The holder does not acquire a property right in the route
covered, nor does it confer upon the holder any
proprietary right/interest/franchise in the public highways.
 Neither do bus passengers have a vested right to be
transported directly to Manila. The alleged right is
dependent upon the manner public services are allowed to
operate within a given area. It is no argument that the
passengers enjoyed the privilege of having been
continuously transported even before outbreak of war.
Times have changed and vehicles have increased. Traffic
congestion has moved from worse to critical. Hence, there
is a need to regulate the operation of public services.
5) F.C. Fisher vs. Yangco Steamship Co., et al., GR L-8095, 31
March 1915
DOCTRINE:
COMMON CARRIERS; PREFERENCES AND DISCRIMINATIONS.
 Whatever may have been the rule at common law, common
carriers in this jurisdiction cannot lawfully decline to accept a
particular class of goods for carriage to the prejudice of the
traffic in those goods unless it appears that for some sufficient
reason the discrimination against the traffic in such goods is
reasonable and necessary. Mere prejudice or whim will not
suffice.
 The grounds of the discrimination must be substantial ones,
such as will justify the courts in holding the discrimination to
have been reasonable and necessary under all the
circumstances of the case.
.
PENAL PROVISIONS OF ACT No. 98.

 The penalties prescribed for violations of Act No. 98 of the
Philippine Commission are neither excessive nor cruel and
unusual in the sense in which those words are used in the
organic legislation in force in the Islands.
There is nothing in that statute which would deprive any person of
his liberty "by requiring him to engage in business against his will."
 The prohibition of the statute against undue, unnecessary, or
unreasonable preferences and discriminations are merely the
reasonable regulations which the legislator has seen fit to
prescribe for the conduct of the business in which the carrier is
engaged of his own free will and accord.
CONTROL AND REGULATION OF CARRIERS
 The nature of the business of a common carrier as a public
employment is such that it is clearly within the power of the
state to impose such just and reasonable regulations thereon in
the interest of the public as the legislator may deem proper.
 Of course such regulations must not have the effect of
depriving an owner of his property without due course of law,
nor of confiscating or appropriating private property without
just compensation, nor of limiting or prescribing irrevocably
vested rights or privileges lawfully acquired under a charter or
franchise.
 But aside from such constitutional limitations, the
determination of the nature and extent of the regulations
which should be prescribed rests in the hands of the legislator.
The right to enter the public employment as a common carrier and
to offer one's services to the public for hire does not carry with it
the right to conduct that business as one pleases, without regard
to the interests of the public, and free from such reasonable and
just regulations as may be prescribed for the protection of the
public from the reckless or careless indifference of the carrier as to
the public welfare and for the prevention of unjust and
unreasonable discriminations of any kind whatsoever in the
performance of the carrier's duties as a servant of the public.
JUDICIAL INTERFERENCE
 The judiciary ought not to interfere with such regulations
established under legislative sanction unless they are so plainly
and palpably unreasonable as to make their enforcement
equivalent to the taking of property for public use without such
compensation as under all the circumstances is just both to the
owner and to the public;
 that is, judicial interference should never occur unless the case
presents, clearly and beyond all doubt, such a flagrant attack
upon the rights of property under the guise of regulations as to
compel the court to say that the regulations in question will
have the effect to deny just compensation for private property
taken for the public use.
When one devotes his property to a use in which the public has an
interest, he, in effect, grants to the public an interest in that use
and must submit to be controlled by the public for the common
good to the extent of the interest he has thus created. He may
withdraw his grant by discontinuing the use, but so long as he
maintains the use he must submit to control,
EXERCISE OF POWER THROUGH BOARDSOF COMMISSIONERS
 So far beyond question is this right of regulation that it is well
settled that the power of the state to exercise legislative
control over railroad companies and other common carriers "in
all respects necessary to protect the public against danger,
injustice and oppression" may be exercised through boards of
commissioners.
ACT No. 98; STATUTORY PROVISIONS
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 Correctly construed, the provisions of the Philippine statute
(Act No. 98) do not force a common carrier to engage in any
business against his will or to make use of his facilities in a
manner or for a purpose for which they are not reasonably
adapted.
 It is only when he offers his facilities as a common carrier to the
public for hire, that the statute steps in and prescribes that he
must treat all alike, that he may not pick and choose which
customer he will serve, and, specifically, that he shall not make
any undue or unreasonable preferences or discriminations
whatsoever to the prejudice not only of any person or locality,
but also of any particular kind of traffic.
PREFERENCES AND DISCRIMINATIONS; EXPLOSIVES.
 It cannot be doubted that the refusal of a "steamship company,
the owner of a large number of vessels" engaged in the
coastwise trade of the Philippine Islands as a common carrier of
merchandise, to accept explosives for carriage on any of its
vessels subjects the traffic in such explosives to a manifest
prejudice and discrimination, and in each case it is a question of
fact whether such prejudice or discrimination is undue,
unnecessary or unreasonable.
CONSIDERATION OF ATTENDANT CIRCUMSTANCES.
 The making of a finding as to whether a refusal, by a steamship
company engaged in the coastwise trade in the Philippine
Islands as a common carrier, to carry such products subjects
any person, locality, or the traffic in such products to an
unnecessary, undue or unreasonable prejudice or
discrimination, involves a consideration of the suitability of the
vessels of the company for the transportation of such products;
 the reasonable possibility of danger or disaster resulting from
their transportation in the form and under the conditions in
which they are offered for carriage; the general nature of the
business done by the carrier, and, in a word, all the attendant
circumstances which might affect the question of the
reasonable necessity for the refusal by the carrier to undertake
the transportation of this class of merchandise.
The mere fact that violent and destructive explosions can be
obtained by the use of dynamite under certain conditions is not
sufficient in itself to justify the refusal of a vessel, duly licensed as a
common carrier of merchandise, to accept it for carriage, if it can
be proven that in the condition in which it is offered for carriage
there is no real danger to the carrier nor reasonable ground to fear
that his vessel or those on board his vessel will be exposed to
unnecessary or unreasonable risks in transporting it, having in
mind the nature of his business as a common carrier engaged in
the coast wise trade in the Philippine Islands, and his duty as a
servant of the public engaged in a public employment.
If by the exercise of due diligence, taking all reasonable
precautions, the danger of explosions can be eliminated, the
carrier would not be justified in subjecting the traffic in this
commodity to prejudice or discrimination by proof that there
would be a possibility of danger from explosion when no such
precautions are taken.

The traffic in dynamite, gunpowder and other explosives is vitally
essential to the material and general welfare of the inhabitants of
these Islands, and if these products are to continue in general use
throughout the Philippines they must be transported by water
from port to port in the various islands which makeup the
Archipelago.
 It follows that the refusal by a particular vessel engaged as a
common carrier of merchandise in the coastwise trade in the
Philippine Islands to accept such explosives for carriage
constitutes a violation of the prohibitions against discrimination
penalized under the statute, unless it can be shown that there
is so real and substantial a danger of disaster necessarily
involved in the carriage of any or all of these articles of
merchandise as to render such refusal a due or a necessary or a
reasonable exercise of prudence and discretion on the part of
the ship owner.
FACTS
 The board of Yangco Steamship Co. adopted a resolution which
was ratified by the stockholders declaring classes of
merchandise which are not to be carried by the vessels of the
company and prohibiting the employees to carry dynamite,
powder or other explosives.
 The Collector of Customs suspended the issuance of clearances
for the vessels unless they carry the explosives.
 Fisher, a stockholder of YSC, filed a petition for prohibition.
ISSUE: Whether or not the refusal of the board of YFC to accept for
carriage "dynamite, powder or other explosives" from any and all
shippers who may offer such explosives for carriage can be held to
be a lawful act.
HELD: No
 In construing Act 98 for the alleged violation, the test is
whether the refusal of YSC to carry the explosives without
qualification or conditions may have the effect of subjecting any
person or locality or the traffic is such explosives to an unduly
unreasonable or unnecessary prejudice or discrimination.
 Common carriers in this jurisdiction cannot lawfully decline to
accept a particular class of goods unless it appears that for
some sufficient reason the discrimination for such is reasonable
and necessary. YSC has not met those conditions.
 The nature of the business of a common carrier as a public
employment is such that it is within the power of the State to
impose such just regulations in the interest of the public as the
legislator may deem proper.
6) FGU Insurance vs. G.P. Sarmiento Trucking, GR 141910, 6
August 2002
DOCTRINE:
Transportation; Common Carriers;
 A trucking company which is an exclusive contractor and
hauler of another company, rendering or offering its services
to no other individual or entity, cannot be considered a
common carrier.
 On the first issue, the Court finds the conclusion of the trial
court and the Court of Appeals to be amply justified.
 GPS, being an exclusive contractor and hauler of Concepcion
Industries, Inc., rendering or offering its services to no other
individual or entity, cannot be considered a common carrier.
Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for hire or
compensation, offering their services to the public, whether to
the public in general or to a limited clientele in particular, but
never on an exclusive basis.
 The true test of a common carrier is the carriage of passengers
or goods, providing space for those who opt to avail themselves
of its transportation service for a fee. Given accepted
standards, GPS scarcely falls within the term “common carrier.”
Contracts; Breach of Contracts;
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 In culpa contractual, the mere proof of the existence of the
contract and the failure of it compliance justify, prima facie, a
corresponding right of relief;
 Indeed, agreements can accomplish little, either for their
makers or for society, unless they are made the basis for
action
 the effect of every infraction is to create a new duty, that is, to
make recompense to the one who has been injured by the
failure of another to observe his contractual obligation unless
he can show extenuating circumstances, like proof of his
exercise of due diligence or of the attendance of fortuitous
event, to excuse him from his ensuing liability.
 The law, recognizing the obligatory force of contracts, will not
permit a party to be set free from liability for any kind of
misperformance of the contractual undertaking or a
contravention of the tenor thereof.
 A breach upon the contract confers upon the injured party a
valid cause for recovering that which may have been lost or
suffered.
 The remedy serves to preserve the interests of the promise that
may include his “expectation interest,” which is his interest in
having the benefit of his bargain by being put in as good a
position as he would have been in had the contract been
performed, or his “reliance interest,” which is his interest in
being reimbursed for loss caused by reliance on the contract by
being put in as good a position as he would have been in had
the contract not been made; or his “restitution interest,” which
is his interest in having restored to him any benefit that he has
conferred on the other party. Indeed, agreements can
accomplish little, either for their makers or for society, unless
they are made the basis for action.
 The effect of every infraction is to create a new duty, that is, to
make recompense to the one who has been injured unless he
can show extenuating circumstances, like proof of his exercise
of due diligence (normally that of the diligence of a good father
of a family or, exceptionally by stipulation or by law such as in
the case of common carriers, that of extraordinary diligence) or
of the attendance of fortuitous event, to excuse him from his
ensuing liability.
Quasi-Delicts; Torts;
 The driver, not being a party to the contract of carriage, may
not be held liable under the agreement—action against him
can only be based on culpa aquiliana, which, unlike culpa
contractual, would require the claimant for damages to prove
negligence or fault on his part.
 Respondent driver, on the other hand, without concrete proof
of his negligence or fault, may not himself be ordered to pay
petitioner.
 The driver, not being a party to the contract of carriage
between petitioner’s principal and defendant, may not be held
liable under the agreement.
 A contract can only bind the parties who have entered into it or
their successors who have assumed their personality or their
juridical position. Consonantly with the axiom res inter alios
acta aliis neque nocet prodest, such contract can neither favor
nor prejudice a third person.
 Petitioner’s civil action against the driver can only be based on
culpa aquiliana, which, unlike culpa contractual, would require
the claimant for damages to prove negligence or fault on the
part of the defendant.
Res Ipsa Loquitur; Requisites; Words and Phrases;

 Res ipsa loquitur is not a rule of substantive law and, as such,
it does not create an independent ground of liability
 instead, it is regarded as a mode of proof, and relieves the
plaintiff of the burden of producing specific proof of negligence.
 A word in passing. Res ipsa loquitur, a doctrine being invoked
by petitioner, holds a defendant liable where the thing which
caused the injury complained of is shown to be under the
latter’s management and the accident is such that, in the
ordinary course of things, cannot be expected to happen if
those who have its management or control use proper care.
 It affords reasonable evidence, in the absence of explanation by
the defendant, that the accident arose from want of care.
 It is not a rule of substantive law and, as such, it does not
create an independent ground of liability. Instead, it is regarded
as a mode of proof, or a mere procedural convenience since it
furnishes a substitute for, and relieves the plaintiff of, the
burden of producing specific proof of negligence.
 The maxim simply places on the defendant the burden of going
forward with the proof.
 Resort to the doctrine, however, may be allowed only when
(a) the event is of a kind which does not ordinarily occur in
the absence of negligence;
(b) other responsible causes, including the conduct of the
plaintiff and third persons, are sufficiently eliminated by
the evidence; and
(c) the indicated negligence is within the scope of the
defendant’s duty to the plaintiff.
 Thus, it is not applicable when an unexplained accident may be
attributable to one of several causes, for some of which the
defendant could not be responsible
While res ipsa loquitur generally finds relevance whether or not a
contractual relationship exists between the plaintiff and the
defendant
 for the inference of negligence arises from the circumstances
and nature of the occurrence and not from the nature of the
relation of the parties
 the requirement that responsible causes other than those due
to defendant’s conduct must first be eliminated, for the
doctrine to apply, should be understood as being confined only
to cases of pure(non-contractual) tort since obviously the
presumption of negligence in culpa contractual immediately
attaches by a failure of the covenant or its tenor.
 Res ipsa loquitur generally finds relevance whether or not a
contractual relationship exists between the plaintiff and the
defendant, for the inference of negligence arises from the
circumstances and nature of the occurrence and not from the
nature of the relation of the parties.
 Nevertheless, the requirement that responsible causes other
than those due to defendant’s conduct must first be eliminated,
for the doctrine to apply, should be understood as being
confined only to cases of pure (non-contractual) tort since
obviously the presumption of negligence in culpa contractual,
as previously so pointed out, immediately attaches by a failure
of the covenant or its tenor.
 In the case of the truck driver, whose liability in a civil action is
predicated on culpa acquiliana, while he admittedly can be said
to have been in control and management of the vehicle which
figured in the accident, it is not equally shown, however, that
the accident could have been exclusively due to his negligence,
a matter that can allow, forthwith, res ipsa loquitur to work
against him.
Actions; Pleadings and Practice; Demurrer to Evidence;
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 If a demurrer to evidence is granted but on appeal the order
of dismissal is reversed, the movant shall be deemed to have
waived the right to present evidence.
 Thus, respondent corporation may no longer offer proof to
establish that it has exercised due care in transporting the
cargoes of the assured so as to still warrant a remand of the
case to the trial court.
FACTS:
 G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver
thirty units of Condura white refrigerators aboard one of its
Isuzu truck, driven by Lambert Eroles, from the plant site of
Concepcion Industries, Inc., to the Central Luzon Appliances in
Dagupan City.
 While the truck was traversing the north diversion road along
McArthur highway, it collided with an unidentified truck,
causing it to fall into a deep canal, resulting in damage to the
cargoes.
 FGU Insurance Corporation (FGU), an insurer of the shipment,
paid to Concepcion Industries, Inc., the value of the covered
cargoes.
 FGU, in turn, being the subrogee of the rights and interests of
Concepcion Industries, Inc., sought reimbursement of the
amount it had paid to the latter from GPS.
 Since the trucking company failed to heed the claim, FGU filed a
complaint for damages and breach of contract of carriage
against GPS and its driver Lambert Eroles with the Regional Trial
Court, which dismissed the case on the basis that GPS is not a
common carrier.
 Thus, the laws governing the contract between the owner of
the cargo to whom the plaintiff was subrogated and the owner
of the vehicle which transports the cargo are the laws on
obligation and contract of the Civil Code as well as the law on
quasi delicts.
 "Thus, the laws governing the contract between the owner of
the cargo to whom the plaintiff was subrogated and the owner
of the vehicle which transports the cargo are the laws on
obligation and contract of the Civil Code as well as the law on
quasi delicts.
 "Considering that plaintiff failed to adduce evidence that
defendant is a common carrier and defendant's driver was the
one negligent, defendant cannot be made liable for the
damages of the subject cargoes."
ISSUE: WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A
COMMON CARRIER AS DEFINED UNDER THE LAW
RULING:
 Defendant GPS is not a common Carrie. GPS, being an exclusive
contractor and hauler of Concepcion Industries, Inc., rendering
or offering its services to no other individual or entity, cannot
be considered a common carrier.
 Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for hire or
compensation, offering their services to the public whether to
the public in general or to a limited clientele in particular, but
never on an exclusive basis.
 The true test of a common carrier is the carriage of passengers
or goods, providing space for those who opt to avail themselves
of its transportation service for a fee. Given accepted
standards, GPS scarcely falls within the term common carrier.
 The above conclusion nothwithstanding, GPS cannot escape
from liability.
 ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino

CASES

1) Pedro De Guzman vs. Court of Appeals, GR L-47822, 22
December 1988
DOCTRINES:
Common Carriers; Definition of;
 Art. 1732 of the Civil Code makes no distinctions between a
person or enterprise offering transportation service on a
regular or scheduled basis and such service on an occasional,
episodic or unscheduled basis.
 The Civil Code defines “common carriers” in the following
terms: “Article 1732. Common carriers are persons,
corporations, firms, or associations engaged in the business of
carrying or transporting passengers or goods or both, by land,
water, or air for compensation, offering their services to the
public.”
 The above article makes no distinction between one whose
principal business activity is the carrying of persons or goods or
both, and one who does such carrying only as an ancillary
activity (in localidiom, as “a sideline”).
 Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service
on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis.
 Neither does Article 1732 distinguish between a carrier offering
its services to the “general public,” i.e., the general community
or population, and one who offers services or solicits business
only from a narrow segment of the general population.
 We think that Article 1733 deliberately refrained from making
such distinctions.
The concept of “common carrier” under Art. 1732 coincides with
the notion of “Public Service” under the Public Service Act (CA No.
1416).
 So understood, the concept of “common carrier” under Article
1732 may be seen to coincide neatly with the notion of “public
service,” under the Public Service Act (Commonwealth Act No.
1416, as amended) which at least partially supplements the law
on common carriers set forth in the Civil Code.
 Under Section 13, paragraph (b) of the Public Service Act,
“public service” includes: “x x x every person that now or
hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited
clientele, whether permanent, occasional or accidental, and
done for general business purposes, any common carrier,
railroad, street railway, traction railway, subway motor vehicle,
either for freight or passenger, or both, with or without fixed
route and whatever may be its classification, freight or carrier
service of any class, express service, steamboat, or steamship
line, pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both, shipyard,
marine repair shop, wharf or dock, ice plant, ice-refrigeration
plant, canal, irrigation system, gas, electric light, heat and
power, water supply and power petroleum, sewerage system,
wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services. x x x.”
A certificate of public convenience is not a requisite for the
incurring of liability under the Civil Code provisions governing
common carriers.
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 The Court of Appeals referred to the fact that private
respondent held no certificate of public convenience, and
concluded he was not a common carrier. This is palpable error.
 A certificate of public convenience is not a requisite for the
incurring of liability under the Civil Code provisions governing
common carriers.
 That liability arises the moment a person or firm acts as a
common carrier, without regard to whether or not such carrier
has also complied with the requirements of the applicable
regulatory statute and implementing regulations and has been
granted a certificate of public convenience or other franchise.
 To exempt private respondent from the liabilities of a common
carrier because he has not secured the necessary certificate of
public convenience, would be offensive to sound public policy;
that would be to reward private respondent precisely for failing
to comply with applicable statutory requirements.
 The business of a common carrier impinges directly and
intimately upon the safety and well-being and property of
those members of the general community who happen to deal
with such carrier.
 The law imposes duties and liabilities upon common carriers for
the safety and protection of those who utilize their services and
the law cannot allow a common carrier to render such duties
and liabilities merely facultative by simply failing to obtain the
necessary permits and authorizations.
Liability of common carriers in case of loss, destruction or
deterioration or destruction of goods they carry; Extraordinary
diligence, required; Exceptions.
 Common carriers, “by the nature of their business and for
reasons of public policy,” are held to a very high degree of care
and diligence (“extraordinary diligence”) in the carriage of
goods as well as of passengers.
 The specific import of extraordinary diligence in the care of
goods transported by a common carrier is, according to Article
1733, “further expressed in Articles 1734, 1735 and 1745,
numbers 5, 6 and 7” of the Civil Code.
 Article 1734 establishes the general rule that common carriers
are responsible for the loss, destruction or deterioration of the
goods which they carry, “unless the same is due to any of the
following causes only:
(1) Flood, storm, earthquake, lightning, or other natural
disaster or calamity;
(2) Act of the public enemy in war, whether international or
civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in
the containers; and
(5) Order or act of competent public authority.”
 It is important to point out that the above list of causes of loss,
destruction or deterioration which exempt the common carrier
for responsibility therefore, is a closed list.
 Causes falling outside the foregoing list, even if they appear to
constitute a species of force majeure, fall within the scope of
Article 1735.
The hijacking of the carrier struck does not fall within any of the
five (5) categories of exempting causes in Art. 1734.
 Applying the above-quoted Articles 1734 and 1735, we note
firstly that the specific cause alleged in the instant case—the
hijacking of the carrier’s truck—does not fall within any of the
five (5) categories of exempting causes listed in Article 1734.
 It would follow, therefore, that the hijacking of the carrier’s
vehicle must be dealt with under the provisions of Article 1735,
in other words, that the private respondent as common carrier
is presumed to have been at fault or to have acted negligently.
 This presumption, however, may be overthrown by proof of
extraordinary diligence on the part of private respondent.
Under Art. 1745(6), a common carrier is held responsible even for
acts of strangers like thieves or robbers except where such thieves

or robbers acted “with grave or irresistible threat, violence or
force.”
 As noted earlier the duty of extra-ordinary diligence in the
vigilance over goods is, under Article1733, given additional
specification not only by Articles 1734 and 1735 but also by
Article 1745, numbers 4, 5 and 6.
 Article 1745 provides in relevant part: “Any of the following or
similar stipulations shall be considered unreasonable, unjust
and contrary to public policy: xxx xxx xxx (5) that the common
carrier shall not be responsible for the acts or omissions of his
or its employees; (6) that the common carrier’s liability for acts
committed by thieves, or of robbers who do not act with grave
or irresistible threat, violence or force, is dispensed with or
diminished; and (7) that the common carrier shall not
responsible for the loss, destruction or deterioration of goods
on account of the defective condition of the car, vehicle, ship,
airplane or other equipment used in the contract of carriage.”
 Under Article 1745(6) above, a common carrier is held
responsible and will not be allowed to divest or to diminish
such responsibility—even for act of strangers like thieves or
robbers, except where such thieves or robbers in fact acted
“with grave or irresistible threat, violence or force.”
 We believe and so hold that the limits of the duty of
extraordinary diligence in the vigilance over the goods carried
are reached where the goods are lost as a result of a robbery
which is attended by “grave or irresistible threat, violence or
force.”
Common carriers are not made absolute insurers against all risks of
travel and of transport of goods and are not liable for fortuitous
events; Case at bar.
 In these circumstances, we hold that the occurrence of the loss
must reasonably be regarded as quite beyond the control of the
common carrier and properly regarded as a fortuitous event.
 It is necessary to recall that even common carriers are not
made absolute insurers against all risks of travel and of
transport of goods, and are not held liable for acts or events
which cannot be foreseen or are inevitable, provided that they
shall have complied with the rigorous standard of extraordinary
diligence.
 We, therefore, agree with the result reached by the Court of
Appeals that private respondent Cendaña is not liable for the
value of the undelivered merchandise which was lost because
of an event entirely beyond private respondent’s control.
FACTS:
 Respondent Ernesto Cendana, a junk dealer, owned two trucks
for hauling scrap materials to Manila.
 The trucks, on their return trip, were loaded with cargoes
contracted with various merchants to be delivered to different
establishments in Pangasinan.
 Respondent charged freight rates which were commonly lower
than regular commercial rates.
 He was contracted by petitioner, an authorized dealer of
General Milk Company to haul 750 cartons of milk from its
warehouse in Makati. 150 cartons were loaded on a truck
driven by respondent himself, while 600 cartons were placed
on the other truck respondent’s driver and employee.
 However, 600 boxes of milk were not delivered because the
truck, while on its way to Pangasinan, was held up by armed
men and the driver and his helper were kidnapped.
 RTC’s finding: Respondent a common carrier.
 CA’s decision: Respondent was not liable for the value of the
undelivered cargo. The transport of return loads of freight is “a
casual occupation — a sideline to his scrap iron business” and
was not engaged as a common carrier. The hijacking of
respondent’s truck was force majeure
ISSUES:
1. Is the owner of the truck a common carrier?
2. Is he liable for the undelivered goods?
RULING:
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 SC affirmed the decision of the CA that the truck owner,
although found to be a common carrier, is not liable for the
value of the undelivered merchandise which was lost because
the robbery is attended by grave or irresistible threat, violence
or force and he had complied with the rigorous standard of
extraordinary diligence.
 Article 1732 of the Civil Code defines “common carriers” as
persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or
both, by land, water, or air for compensation, offering their
services to the public. This article makes no distinction between
one whose principal business activity is the carrying of persons
or goods or both, and one who does such carrying only as an
ancillary activity or as a mere “sideline”. It makes no distinction
between a person or enterprise offering transportation service
on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis. Neither it
distinguishes between a carrier offering its services to the
“general public,” i.e., the general community or population, and
one who offers services or solicits business only from a narrow
segment of the general population.
 If the goods are lost, destroyed or deteriorated, and the cause
was not one of those enumerated in Article 1734, the
respondent is presumed to have been at fault or to have acted
negligently but this presumption may be overthrown by proof
of extraordinary diligence on the part of private respondent. He
must proved that he observed extraordinary diligence as
required by the nature of their business and for reasons of
public policy.
 Under Article 1745 (6) a stipulation that the common carrier’s
liability for acts committed by thieves, or of robbers who do not
act with grave or irresistible threat, violence or force, is
dispensed with or diminished is considered unreasonable,
unjust and contrary to public policy.
NOTES:
 Article 1734. Common carriers may be exempted from liability
under the following causes only:
(1) Flood, storm, earthquake, lightning or other natural
disaster or calamity;
(2) Act of the public enemy in war, whether international or
civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character-of the goods or defects in the packing or-in
the containers; and
(5) Order or act of competent public authority.
2) Virata, et al. vs. Ochoa, et al., GR L-46179, 31 January 1978
DOCTRINE:
Criminal law; Civil liability in negligence cases;
 Option of offended party to file action for enforcement of civil
liability based on culpa criminal or action for recovery of
damages based on culpa aquiliana;
 Prohibition against recovery of damages twice for the same
negligent act or omission.
 In negligence cases the aggrieved parties may choose between
an action under the Revised Penal Code or for quasi delict
under Article 2176 of the Civil Code of the Philippines. What is
prohibited by Article 2177of the Civil Code of the Philippines is
to recover twice for the same negligent act.
Separability and independence of liability in civil action for acts
criminal in character from civil responsibility arising from crime.
 The extinction of civil liability referred to in Par. (e) of Section 3,
Rule 111, refers exclusively to civil liability founded on Article
100 of the Revised Penal Code, whereas the civil liability for the
same act considered as a quasi-delict only and not as a crime is
not extinguished even by a declaration in the criminal case that
the criminal act charged has not happened or has not been
committed by the accused.

Quasi-delicts; Phrase “fault or negligence” includes voluntary and
negligent acts punishable by law.
 Article 2176, where it refers to “fault or negligence,” covers not
only acts “not punishable by law” but also acts criminal in
character, whether intentional and voluntary or negligent.
 Consequently, a separate civil action lies against the offender in
a criminal act, whether or not he is criminally prosecuted and
found guilty or acquitted, provided that the offended party is
not allowed, if he is actually charged also criminally, to recover
damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two, assuming the
awards made in the two cases vary.
Obligations; Sources of;
 Quasi-delict and acts or omissions punished by law constitute
two different sources of obligations.
 Under Article 1157 of the Civil Code of the Philippines, quasi-
delict and an act or omission punishable by law are two
different sources of obligation.
FACTS:
 Respondents driver and operator a jeepney, bumped and killed
Arsenio Virata, Petitioner filed a complaint in the CFI to which
the reserved the filing of the Civil case.
 During the hearing the private prosecutor actively participated
in the trial of the criminal case and expressed to join the Civil
case. Private prosecutor then withdrew the prosecution of the
Civil case.
 In a different CFI jurisdiction, Petitioner, filed a separate civil
action against the respondent. Respondent filed a Motion to
dismiss on the CFI of the civil case contesting that an action in a
different jurisdiction already exist.
 Then, the CFI with the criminal case acquitted the respondent
and the CFI with the civil action granted the Motion of the
respondent. Hence this case.
ISSUE: Whether the petitioner can prosecute an action for the
damages based on quasi-delict against Respondent on the passenger
jeepney that bumped and killed Arsenio Virata.
RULING:
 The petitioners are not seeking to recover twice for the
same negligent act. Before Criminal Case was decided,
they manifested in said criminal case that they were filing
a separate civil action for damages against the owner and
driver of the passenger jeepney based on quasi-delict.
 The acquittal of the driver, Maximo Borilla, of the crime
charged is not a bar to the prosecution of Civil Case for
damages based on quasi-delict
 The source of the obligation sought to be enforced in Civil
Case is quasi-delict, not an act or omission punishable by
law.
 Under Article 1157 of the Civil Code of the Philippines,
quasi-delict and an act or omission punishable by law are
two different sources of obligation.
3) Tiu vs. Arriesgado, GR 138060, 1 September 2004
DOCTRINE:
Civil Law; Contracts; Contracts of Carriage; Common Carriers;
Extraordinary Diligence;
 A man must use common sense, and exercise due reflection in
all his acts—it is his duty to be cautious, careful and prudent,
if not from instinct, then through fear of recurring punishment
 He is responsible for such results as anyone might foresee and
for acts which no one would have performed except through
culpable abandon.
 Otherwise, his own person, rights and property, and those of
his fellow beings, would ever be exposed to all manner of
danger and injury.
Negligence;
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 Under the said contract of carriage, the petitioners assumed
the express obligation to transport the respondent and his wife
to their destination safely and to observe extraordinary
diligence with due regard for all circumstances.
 Any injury suffered by the passengers in the course thereof is
immediately attributable to the negligence of the carrier.
 Upon the happening of the accident, the presumption of
negligence at once arises, and it becomes the duty of a
common carrier to prove that he observed extraordinary
diligence in the care of his passengers.
 It must be stressed that in requiring the highest possible degree
of diligence from common carriers and in creating a
presumption of negligence against them, the law compels them
to curb the recklessness of their drivers.
The carrier must show the utmost diligence of very cautious
persons as far as human care and foresight can provide, or that the
accident was caused by fortuitous event
 While evidence may be submitted to overcome such
presumption of negligence, it must be shown that the carrier
observed the required extraordinary diligence, which means
that the carrier must show the utmost diligence of very
cautious persons as far as human care and foresight can
provide, or that the accident was caused by fortuitous event.
Principle of Last Clear Chance;
 Contrary to the petitioner’s contention, the principle of last
clear chance is inapplicable in the instant case, as it only
applies in a suit between the owners and drivers of colliding
vehicles
 It does not arise where a passenger demands responsibility
from the carrier to enforce its contractual obligations, for it
would be inequitable to exempt the negligent driver and its
owner on the ground that the other driver was likewise guilty
of negligence.
 The common law notion of last clear chance permitted courts
to grant recovery to a plaintiff who has also been negligent
provided that the defendant had the last clear chance to avoid
the casualty and failed to do so.
 Accordingly, it is difficult to see what role, if any, the common
law of last clear chance doctrine has to play in a jurisdiction
where the common law concept of contributory negligence as
an absolute bar to recovery by the plaintiff, has itself been
rejected, as it has been in Article 2179 of the Civil Code.
Presumed Negligence;
 It is such a firmly established principle, as to have virtually
formed part of the law itself, that the negligence of the
employee gives rise to the presumption of negligence on the
part of the employer
 It is such a firmly established principle, as to have virtually
formed part of the law itself, that the negligence of the
employee gives rise to the presumption of negligence on the
part of the employer.
 This is the presumed negligence in the selection and
supervision of employee.
 The theory of presumed negligence, in contrast with the
American doctrine of respondeat superior, where the
negligence of the employee is conclusively presumed to be the
negligence of the employer, is clearly deducible from the last
paragraph of Article 2180 of the Civil Code which provides that
the responsibility therein mentioned shall cease if the
employers prove that they observed all the diligence of a good
father of a family to prevent damages.
Indemnity; Compulsory Vehicle Liability Insurance;

 The nature of Compulsory Motor Vehicle Liability Insurance is
such that it is primarily intended to provide compensation for
the death or bodily injuries suffered by innocent third parties
or passengers as a result of the negligent operation and use of
motor vehicles
 The victims and/or their dependents are assured of immediate
financial assistance, regardless of the financial capacity of
motor vehicle owners.
Extent;
 Although the victim may proceed directly against the insurer
for indemnity, the third party liability is only up to the extent
of the insurance policy and those required by law
 While it is true that where the insurance contract provides for
indemnity against liability to third persons, and such persons
can directly sue the insurer, the direct liability of the insurer
under indemnity contracts against third party liability does not
mean that the insurer can be held liable in solidum with the
insured and/or the other parties found at fault.
 For the liability of the insurer is based on contract; that of the
insured carrier or vehicle owner is based on tort.
Exemplary Damages;
 Article 2231 of the Civil Code explicitly authorizes the
imposition of exemplary damages in quasi-delicts “if the
defendant acted with gross negligence.”
 While the immediate beneficiaries of the standard of
extraordinary diligence are, of course, the passengers and
owners of cargo carried by a common carrier, they are not the
only persons that the law seeks to benefit.
 For if common carriers carefully observed the statutory
standard of extraordinary diligence in respect of their own
passengers, they cannot help but simultaneously benefit
pedestrians and the passengers of other vehicles who are
equally entitled to the safe and convenient use of our roads and
highways.
 The law seeks to stop and prevent the slaughter and maiming
of people (whether passengers or not) on our highways and
buses, the very size and power of which seem to inflame the
minds of their drivers. Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary damages in cases of
quasi-delicts “if the defendant acted with gross negligence.” . . .
Solidary Liability;
 In case of injury to a passenger due to the negligence of the
driver of the bus on which he was riding and of the driver of
another vehicle, the drivers as well as the owners of the two
vehicles are jointly and severally liable for damages
 The same rule of liability was applied in situations where the
negligence of the driver of the bus on which plaintiff was riding
concurred with the negligence of a third party who was the
driver of another vehicle, thus causing an accident.
 In Anuran v. Buño, Batangas Laguna Tayabas Bus Co. v.
Intermediate Appellate Court, and Metro Manila Transit
Corporation v. Court of Appeals, the bus company, its driver,
the operator of the other vehicle and the driver of the vehicle
were jointly and severally held liable to the injured passenger
or the latter’s heirs.
 he basis of this allocation of liability was explained in Viluan v.
Court of Appeals, thus: “Nor should it make difference that the
liability of petitioner [bus owner] springs from contract while
that of respondents [owner and driver of other vehicle] arises
from quasi-delict.
 As early as 1913, we already ruled in Gutierrez vs. Gutierrez, 56
Phil. 177,that in case of injury to a passenger due to the
negligence of the driver of the bus on which he was riding and
of the driver of another vehicle, the drivers as well as the
owners of the two vehicles are jointly and severally liable for
damages. Some members of the Court, though, are of the view
that under the circumstances they are liable on quasi-delict.”
FACTS:
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
 At about 10:00 p.m. of March 15, 1987, the cargo truck marked
"Condor Hollow Blocks and General Merchandise" bearing plate
number GBP-675 was loaded with firewood in Bogo, Cebu and
left for Cebu City.
 Upon reaching Sitio Aggies, Poblacion, Compostela, Cebu, just
as the truck passed over a bridge, one of its rear tires exploded.
The driver, Sergio Pedrano, then parked along the right side of
the national highway and removed the damaged tire to have it
vulcanized at a nearby shop, about 700 meters away.
 Pedrano left his helper, Jose Mitante, Jr. to keep watch over the
stalled vehicle, and instructed the latter to place a spare tire six
fathoms away behind the stalled truck to serve as a warning for
oncoming vehicles.
 The trucks tail lights were also left on. It was about 12:00 a.m.,
March 16, 1987.
 At about 4:45 a.m., D Rough Riders passenger bus with plate
number PBP-724 driven by Virgilio Te Laspiñas was cruising
along the national highway of Sitio Aggies, Poblacion,
Compostela, Cebu.
 The passenger bus was also bound for Cebu City, and had come
from Maya, Daanbantayan, Cebu. Among its passengers were
the Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado,
who were seated at the right side of the bus, about (3) or (4)
places from the front seat.
 As the bus was approaching the bridge, Laspiñas saw the stalled
truck, which was then about 25 meters away. He applied the
breaks and tried to swerve to the left to avoid hitting the truck.
But it was too late; the bus rammed into the trucks left rear.
 The impact damaged the right side of the bus and left several
passengers injured. Pedro Arriesgado lost consciousness and
suffered a fracture in his right colles. His wife, Felisa, was
brought to the Danao City Hospital. She was later transferred to
the Southern Island Medical Center where she died shortly
thereafter.
 Respondent Pedro A. Arriesgado then filed a complaint for
breach of contract of carriage, damages and attorneys fees
before the Regional Trial Court of Cebu City, Branch 20, against
the petitioners, D Rough Riders bus operator William Tiu and
his driver, Virgilio Te Laspiñas on May 27, 1987.
 The respondent alleged that the passenger bus in question was
cruising at a fast and high speed along the national road, and
that petitioner Las piñas did not take precautionary measures
to avoid the accident.
 The petitioners, for their part, filed a Third-Party Complaint
against the following: respondent Philippine Phoenix Surety
and Insurance, Inc. (PPSII), petitioner Tiu’s insurer; respondent
Benjamin Condor, the registered owner of the cargo truck; and
respondent Sergio Pedrano, the driver of the truck.
 They alleged that petitioner Laspiñas was negotiating the uphill
climb along the national highway of Sitio Aggies, Poblacion,
Compostela, in a moderate and normal speed. It was further
alleged that the truck was parked in a slanted manner, its rear
portion almost in the middle of the highway, and that no early
warning device was displayed.
 Petitioner Laspiñas promptly applied the brakes and swerved to
the left to avoid hitting the truck head-on, but despite his
efforts to avoid damage to property and physical injuries on the
passengers, the right side portion of the bus hit the cargo
truck’s left rear.
HELD:
 The rules which common carriers should observe as to the
safety of their passengers are set forth in the Civil Code, Articles
1733, 1755and 1756.
 It is undisputed that the respondent and his wife were not
safely transported to the destination agreed upon. In actions
for breach of contract, only the existence of such contract, and
the fact that the obligor, in this case the common carrier, failed
to transport his passenger safely to his destination are the
matters that need to be proved.
 This is because under the said contract of carriage, the
petitioners assumed the express obligation to transport the
respondent and his wife to their destination safely and to

observe extraordinary diligence with due regard for all
circumstances.
 Any injury suffered by the passengers in the course thereof is
immediately attributable to the negligence of the carrier. Upon
the happening of the accident, the presumption of negligence
at once arises, and it becomes the duty of a common carrier to
prove that he observed extraordinary diligence in the care of
his passengers.
 It must be stressed that in requiring the highest possible degree
of diligence from common carriers and in creating a
presumption of negligence against them, the law compels them
to curb the recklessness of their drivers.
 While evidence may be submitted to overcome such
presumption of negligence, it must be shown that the carrier
ESSENTIALS OF TRANSPORTATION
AND PUBLIC UTILITIES LAW
Based on Aquino
to third persons for injuries caused the latter while the vehicle
was being driven on the highways or streets.
 In Aguilar, Sr. v. Commercial Savings Bank, 360 SCRA395 (2001),
the car of therein respondent bank caused the death of
Conrado Aguilar, Jr. while being driven by its assistant vice
president.
 Despite Article 2180, we still held the bank liable for damages
for the accident as said provision should defer to the settled
doctrine concerning accidents involving registered motor
vehicles, i.e., that the registered owner of any vehicle, even if
not used for public service, would primarily be responsible to
the public or to third persons for injuries caused the latter while
the vehicle was being driven on the highways or streets.

Facts: Spouses
observed the required extraordinary diligence, which means
that the carrier must show the utmost diligence of very
cautious persons as far as human care and foresight can
provide, or that the accident was caused by fortuitous event. As

Monsalud and
correctly found by the trial court, petitioner Tiu failed to
conclusively rebut such presumption.
 The negligence of petitioner Laspiñas as driver of the passenger
bus is, thus, binding against petitioner Tiu, as the owner of the

their daughter
passenger bus engaged as a common carrier.

4) Del Carmen, Jr. vs. Bacoy, et al., GR 173870, 25 April 2012

DOCTRINE:

Civil Law; Quasi-Delicts; Doctrine of Res Ipsa Loquitur;


died from being
run over by a
Under the doctrine of res ipsa loquitur, where the thing that
caused the injury complained of is shown to be under the
management of the defendant or his servants; and the
accident, in the ordinary course of things, would not happen if

jeepney
those who had management or control used proper care, it
affords reasonable evidence—in the absence of a sufficient,
reasonable and logical explanation by defendant—that the
accident arose from or was caused by the defendant’s want of

driven by a
care;
 The doctrine is based partly on the theory that the defendant
in charge of the instrumentality which causes the injury either
knows the cause of the accident or has the best opportunity


of ascertaining it while the plaintiff has no such knowledge,
and is therefore compelled to allege negligence in general
terms.
certain Allan
Maglasang. The
It “recognizes that parties may establish prima facie negligence
without direct proof, thus, it allows the principle to substitute
for specific proof of negligence.
 It permits the plaintiff to present along with proof of the

jeepney was
accident, enough of the attending circumstances to invoke the
doctrine, create an inference or presumption of negligence and
thereby place on the defendant the burden of proving that
there was no negligence on his part.”

Requisites of the Doctrine of Res Ipsa Loquitur.

1) the accident is of a kind which does not ordinarily occur unless
someone is negligent;
owned by Oscar
2) the cause of the injury was under the exclusive control of the
person in charge and
3) the injury suffered must not have been due to any voluntary
del Carmen Jr.
Allan was
action or contribution on the part of the person injured.

declared guilty
beyond
Motor Vehicles;
 The registered owner of any vehicle, even if not used for
public service, would primarily be responsible to the public or
reasonable doubt
 ESSENTIALS OF TRANSPORTATION
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in a criminal hired as a driver

case while the by
father of the former; he
the late Mrs. was a conductor
Monsalud, (and had been
Geronimo Bacou released from
filed an employment
independent civil lately) and it
action againt the was the brother
former in behalf of Allan,
of the minor Rodrigo who
children left by was hired as a
the Monsalud driver. Del
spouses. Del Carmen Jr. filed
Carmen Jr. a
claimed he was a carnapping case
victim as well as against Allan but
Allan stole the was dismissed by
jeep and was not the court for
 ESSENTIALS OF TRANSPORTATION
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Based on Aquino

insufficient the injuries or

evidence. death of
RTC held del third parties
Carmen Jr. caused by the
subsidiary liable operation of such
and held the vehicle. It
doctrine of res disbelieved
ipsa loquitur. Oscar Jr.’s
The defense that
CA adjudged the jeep was
Oscar Jr. liable stolen not only
to the heirs of the because the
victims based on carnapping case
the principle that filed against
the Allan and his
registered owner companions was
of a vehicle is dismissed but
directly and also because,
primarily given the
responsible for circumstances,
 ESSENTIALS OF TRANSPORTATION
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Based on Aquino

Oscar Jr. is without the use

deemed to of an ignition
have given Allan key; the said
the implied parking area was
permission to use not fenced or
the subject secured to
vehicle because prevent
the brothers were the unauthorized
assigned to said use of the
jeep. After a vehicle which
day’s work, the can be started
jeepney would even without the
be parked beside ignition key.
the brothers’ Issue: W/N
house and not owner of vehicle
returned to del is directly and
Carmen’s primarily liable
residence; the for injuries
jeep could easily caused by the
be started even operation of such
 ESSENTIALS OF TRANSPORTATION
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Held: Del admitted to such

Carmen Jr. was dismissal in the
held to be SC. Under the
primarily liable doctrine of res
and not merely ipsa loquitur,
subsidiary liable. “where the
Del Carmen thing that caused
Jr.’s own the injury
evidence cast complained of is
doubt that shown to be
Allan stole the under the
jeepney. Given management of
the the
dismissal of the defendant or his
carnapping case servants; and the
filed by del accident, in the
Carmen Jr. ordinary course
against Allan, of things, would
the former also not happen
 ESSENTIALS OF TRANSPORTATION
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if those who had bar

management or
FACTS
 Spouses Monsalud and their daughter died from being run over
by a jeepney driven by a certain Allan Maglasang.
 The jeepney was owned by Oscar del Carmen Jr. Allan was

control used
declared guilty beyond reasonable doubt in a criminal case
while the father of the late Mrs. Monsalud, Geronimo Bacou
filed an independent civil action againt the former in behalf of
the minor children left by the Monsalud spouses.

proper care, it
 Del Carmen Jr. claimed he was a victim as well as Allan stole the
jeep and was not hired as a driver by the former; he was a
conductor (and had been released from employment lately)
and it was the brother of Allan, Rodrigo who was hired as a

affords 


driver.
Del Carmen Jr. filed a carnapping case against Allan but was
dismissed by the court for insufficient evidence.

reasonable
RTC held del Carmen Jr. subsidiary liable and held the doctrine
of res ipsa loquitur.
 The CA adjudged Oscar Jr. liable to the heirs of the victims
based on the principle that the registered owner of a vehicle is

evidence – in
directly and primarily responsible for the injuries or death of
third parties caused by the operation of such vehicle.
 It disbelieved Oscar Jr.’s defense that the jeep was stolen not
only because the carnapping case filed against Allan and his

the absence of a
companions was dismissed but also because, given the
circumstances, Oscar Jr. is deemed to have given Allan the
implied permission to use the subject vehicle because the
brothers were assigned to said jeep.

sufficient,  After a day’s work, the jeepney would be parked beside the
brothers’ house and not returned to del Carmen’s residence;
the jeep could easily be started even without the use of an

reasonable and
ignition key; the said parking area was not fenced or secured to
prevent the unauthorized use of the vehicle which can be
started even without the ignition key.

logical
ISSUE: W/N owner of vehicle is directly and primarily liable for
injuries caused by the operation of such

HELD:

explanation by
 Del Carmen Jr. was held to be primarily liable and not merely
subsidiary liable. Del Carmen Jr.’s own evidence cast doubt that
Allan stole the jeepney.
 Given the dismissal of the carnapping case filed by del Carmen

defendant – that 
Jr. against Allan, the former also admitted to such dismissal in
the SC.
Under the doctrine of res ipsa loquitur, “where the thing that

the accident
caused the injury complained of is shown to be under the
management of the defendant or his servants; and the
accident, in the ordinary course of things, would not happen if
those who had management or control used proper care, it

arose from or
affords reasonable evidence – in the absence of a sufficient,
reasonable and logical explanation by defendant – that the
accident arose from or was caused by the defendant’s want of
care. All three are present in the case at bar.

was caused by
the defendant’s 5) Heirs of Redentor Completo vs. Sgt. Albayda, GR 172200, 6

want of care. All

July 2010

DOCTRINE:

three are present

Appeals;
 The issues raised by petitioners essentially delve into factual
matters which were already passed upon by the Regional Trial
Court (RTC) and the Court of Appeals (CA).

in the case at
 Conclusions and findings of fact of the trial court are entitled
to great weight on appeal and should not be disturbed unless
for strong and cogent reasons, because the trial court is in a

better position to examine real evidence, as well as to observe
the demeanor of the witnesses while testifying in the case.
 The fact that the CA adopted the findings of fact of the trial
court makes the same binding upon this Court. Well-settled is
the rule that the Supreme Court is not a trier of facts.
 To be sure, findings of fact of lower courts are deemed
conclusive and binding upon the Supreme Court, save only for
clear and exceptional reasons, none of which is present in the
case at bar.
Torts and Damages; Quasi-Delicts; Negligence;
 It is a rule in negligence suits that the plaintiff has the burden
of proving by a preponderance of evidence the motorist’s
breach in his duty of care owed to the plaintiff, that the
motorist was negligent in failing to exercise the diligence
required to avoid injury to the plaintiff, and that such
negligence was the proximate cause of the injury suffered.
 The instant case involved a collision between a taxicaband a
bicycle which resulted in serious physical injuries to the bicycle
rider, Albayda. It is a rule in negligence suits that the plaintiff
has the burden of proving by a preponderance of evidence the
motorist’s breach in his duty of care owed to the plaintiff, that
the motorist was negligent in failing to exercise the diligence
required to avoid injury to the plaintiff, and that such
negligence was the proximate cause of the injury suffered.
 Article 2176 of the Civil Code provides that whoever by act or
omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done.
 Such fault or negligence, if there is no preexisting contractual
relation between the parties, is called a quasi-delict. In this
regard, the question of the motorist’s negligence is a question
of fact.
Bicycles; Right of Way;
 The bicycle occupies a legal position that is at least equal to
that of other vehicles lawfully on the highway, and it is
fortified by the fact that usually more will be required of a
motorist than a bicyclist in discharging his duty of care to the
other because of the physical advantages the automobile has
over the bicycle;
 While the duty of using reasonable care falls alike on a
motorist and a bicyclist, due to the inherent differences in the
two vehicles, more care is required from the motorist to fully
discharge the duty than from the bicyclist.
 At the slow speed of ten miles per hour, a bicyclist travels
almost fifteen feet per second, while a car traveling at only
twenty-five miles per hour covers almost thirty-seven feet per
second, and split-second action may be insufficient to avoid an
accident.
 It is obvious that a motor vehicle poses a greater danger of
harm to a bicyclist than vice versa.
 Accordingly, while the duty of using reasonable care falls alike
on a motorist and a bicyclist, due to the inherent differences in
the two vehicles, more care is required from the motorist to
fully discharge the duty than from the bicyclist.
 Simply stated, the physical advantages that the motor vehicle
has over the bicycle make it more dangerous to the bicyclist
than vice versa.
Vicarious Liability of Employers;
 When an injury is caused by the negligence of an employee, a
legal presumption instantly arises that the employer was
negligent, which presumption may be rebutted only by a clear
showing on the part of the employer that he exercised the
diligence of a good father of a family in the selection and
supervision of his employee.
 Under Article 2180 of the Civil Code, the obligation imposed by
Article 2176 is demandable not only for one’s own acts or
omissions, but also for those persons for whom one is
responsible.
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 Employers shall be liable for the damages caused by their
employees, but the employers’ responsibility shall cease upon
proof that they observed all the diligence of a good father of
the family in the selection and supervision of their employees.
When an injury is caused by the negligence of an employee, a
legal presumption instantly arises that the employer was
negligent.
 This presumption may be rebutted only by a clear showing on
the part of the employer that he exercised the diligence of a
good father of a family in the selection and supervision of his
employee.
 If the employer successfully overcomes the legal presumption
of negligence, he is relieved of liability. In other words, the
burden of proof is on the employer.
The civil liability of the employer for the negligent acts of his
employee is also primary and direct, owing to his own negligence
in selecting and supervising his employee.
 The trial court’s finding that Completo failed to exercise
reasonable care to avoid collision with Albayda at the
intersection of 11th and 8th Streets of VAB gives rise to liability
on the part of Completo, as driver, and his employer Abiad.
 The responsibility of two or more persons who are liable for
quasi-delict is solidary.
 The civil liability of the employer for the negligent acts of his
employee is also primary and direct, owing to his own
negligence in selecting and supervising his employee.
 The civil liability of the employer attaches even if the employer
is not inside the vehicle at the time of the collision.
With respect to the supervision of employees, employers should
formulate standard operating procedures, monitor their
implementation, and impose disciplinary measures for breaches
thereof.
 In the selection of prospective employees, employers are
required to examine them as to their qualifications, experience,
and service records.
 On the other hand, with respect to the supervision of
employees, employers should formulate standard operating
procedures, monitor their implementation, and impose
disciplinary measures for breaches thereof.
 To establish these factors in a trial involving the issue of
vicarious liability, employers must submit concrete proof,
including documentary evidence.
Damages; Temperate Damages;
 Temperate damages, more than nominal but less than
compensatory damages, may be recovered when the court
finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with
certainty the damages must be reasonable under the
circumstances.
 While the amount of actual damages was not duly established
with certainty, the Court recognizes the fact that, indeed,
Albayda incurred a considerable amount for the necessary and
reasonable medical expenses, loss of salary and wages, loss of

capacity to earn increased wages, cost of occupational therapy,
and harm from conditions caused by prolonged immobilization.
 Temperate damages, more than nominal but less than
compensatory damages, may be recovered when the court
finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with
certainty.
 Temperate damages must be reasonable under the
circumstances. Thus, the Court finds the award of P100,000.00)
as temperate damages reasonable under the circumstances.
FACTS
 Albayda is a Master Sergeant of the PH Air Force, and Completo
was the taxi driver of a Toyota Corolla which was owned by
Abiad. Albayda was riding a bike on his way to the office, when
Completo's taxi bumped and sideswept him, causing serious
physical injuries.
 He [Albayda] was brought to the PH Air Force General Hospital,
but he was transferred to the AFP Medical Center because he
sustained a fracture and there was no orthopedic doctor
available in the first hospital. He was confined from 27 Aug
1997 to 11 Feb 1998, and again in 23 Feb to 22 Mar 1998
[approx. 7 months].
 Conciliation before the barangay failed, so Albayda filed a
complaint for physical injuries through reckless imprudence
against Completo before the Office of the City Prosecutor of
Pasay. Completo filed a counter-charge of damage to property
through reckless imprudence against Albayda.
 The Office of the City Prosecutor recommended the filing of an
information for Albayda's complaint, and Completo's complaint
[against Albayda] was dismissed. Albayda manifested his
reservation to file a separate civil action for damages against
Completo and Abiad Albayda alleged that Completo's
negligence is the proximate cause of the incident.
 He demanded the following damages and their respective
amounts: Actual damages - 276,550; Moral damages - 600,000;
Exemplary damages - 200,000; Attorney's fees - 25,000 + 1,000
per court appearance.
 On the other hand, Completo alleged that he was carefully
driving the taxicab when he heard a strange sound from the
taxicab's rear right side. He found Albayda lying on the road,
holding his left leg, so he brought Albayda to PH Air Force
General Hospital.
 Completo asserted that he was an experienced driver, and that
he already reduced his speed to 20km even before reaching the
intersection.
 In contrast, Albayda rode his bicycle at high speed, causing him
to lose control of the bicycle. Completo said that Albayda had
no cause of action.
 Several people testified for each side, but here are some notes
on the testimony of the owner of the taxi driver, Abiad. Abiad
said that aside from being a soldier, he also held franchises of
taxicabs and passenger jeepneys, and being a taxicab operator,
he would wake up early to personally check the taxicabs.
 When Completo applied as a taxicab driver, Abiad required him
to show his bio-data, NBI clearance, and driver's license.
Completo never figured in a vehicular accident since he was
employed, and according to Abiad, he [Completo] was a good
driver and good man.
 RTC rendered judgment in favor of Albayda, and the
defendants are ordered to pay actual [46k] and moral [400k]
damages, and attorney's fees [25k]. Upon appeal at the CA, the
court affirmed RTC's decision with modifications [no more
actual damages; awarded temperate damages [40k]; moral
damages only 200k; Completo and Abiad are solidarily liable to
pay Albayda; added legal interest].
ISSUES:
1) WON CA erred in finding that Completo was the one who
caused the collision – NO
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2) WON Abiad failed to prove that he observed the diligence of a
good father of the family – YES
3) WON the award of moral and temperate damages and
attorney's fees for Albayda had no basis. NO / NO / YES
RULING:
1) On Negligence
 It is a rule in negligence suits that the plaintiff has the
burden of proving by a preponderance of evidence the
motorist's breach in his duty of care owed to the plaintiff,
that the motorist was negligent in failing to exercise the
diligence required to avoid injury to the plaintiff, and that
such negligence was the proximate cause of the injury
suffered.
 NCC 2176 quoted, and said that the question of the
motorist's negligence is a question of fact.
 Usually, more will be required of a motorist [25mi/hr =
37ft/sec] than a bicyclist [10mi/hr = 15ft/sec] in
discharging the duty of care because of the physical
advantages the former has over the latter.
 It was proven by a preponderance of evidence that Completo
failed to exercise reasonable diligence.
 He was overspeeding at the time he hit Albayda's bicycle; he
did not slow down even when he approached the intersection
 Such negligence was the sole and proximate cause of the
injuries sustained by Albayda
 It was proven that Albayda had the right of way since he
reached the intersection ahead of Completo
 NCC 2180 cited - obligation imposed by NCC 2176 is
demandable also for those persons for whom one is
responsible.
 Employers are liable for damage caused by employees, but the
responsibility ceases upon proof that employers observed the
diligence of the good father of the family in the selection and
supervision of employees.
 The burden of proof is on the employer. The responsibility of
two or more persons who are liable for QD is solidary. The
employer's civil liability for his employee's negligent acts is also
primary and direct, owing to his own negligence in selecting
and supervising them, and this liability attaches even if the
employer is not in the vehicle at the time of collision.
 In the selection of employees, employers are required to
examine them as to their qualifications, experience, and service
records. With respect to supervision, employers should
formulate SOPs and monitor their implementation, and impose
disciplinary measures for breaches.
 To establish these factors in a trial involving the issue of
vicarious [secondary] liability, employers must submit concrete
proof, including documentary evidence.
ABIAD'S EVIDENCE CONSISTED ENTIRELY OF TESTIMONIAL
EVIDENCE, AND THIS IS INSUFFICIENT TO OVERCOME THE LEGAL
PRESUMPTION THAT HE WAS NEGLIGENT IN THE SELECTION AND
SUPERVISION OF COMPLETO.
On Damages
 CA rightfully deleted the award of actual damages because
Albayda failed to present documentary evidence to establish
the amount incurred.
 Temperate damages may be recovered when the court finds
that some pecuniary loss has been suffered but its amount
cannot be proved with certainty. Moral damages are awarded
in QDs causing physical injuries, so the award is proper.
 The award of attorney's fees is deleted for failure to prove that
petitioners acted in bad faith in refusing to satisfy respondent's
just and valid claim.