TRANSPORTATION LAW

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Transportation Law –
Common carriers
- concept of public utility
- constitutional limaitions on operations
of public utilities (Sec 11, Art XII, 1987
Constitution)
- no franchise, certificate or
authorization be exclusive in character
or for a longer period than 50 years
The right to operate a public utility may
exist independently and separately from
the ownership of the facilities thereof.
The LTFRB has the power to suspend –
depends on assessment of the gravity of
the violation, the potential and actual
harm to the public, and the policy
impact of its own actions
Common carriers – 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
Test:
1. engaged in the business of carrying
goods for others as a public
employment and must hold himself out
as ready to engage in the transportation
of goods for persons generally as a
business and not as a casual occupation
2. undertake to carry goods of the kind
to which his business is confined
3. undertake to carry by the method by
which his business is conducted over his
established roads
4. transportation must be for hire
Pereña vs Zarate – true test for a
common carrier is whether the
undertaking is a part of the activity
engaged in by the carrier that he has
held out the general public as his
business or occupation
Pereña vs Zarate – school bus operators
held themselves out as a ready
transportation indiscriminately to the
students of a particular school living
within or near where they operated the
service and for a fee
Cruz vs Sun Holidays – resort operator
with ferry services may be availed of by
anyone who can afford to pay the same
thus available to the public
AF Sanchez Brokerage, Inc. vs CA – it
suffices that petitioner undertakes to
deliver the goods for pecuniary
consideration. Whether taken as a
primary or ancillary business
The definition of common carriers in the
Civil Code makes no distinction as to the
means of transporting, as long as it is
by land, water or air
Torres-Madrid Brokerage, Inc. vs FEB
Mistui Marine Insurance Co. Inc – as
long as an entity holds itself to the
public for the transport of goods as a
business, it is considered a common
carrier regardless of whether it owns the
vehicle used or has to actually hire one
CO 2015-11 = transportation network
companies (TNC) – corporation,
partnership, sole proprietor, or other
form, that provides pre-arranged
transportation services for compensation
using an online-enabled application or
platform technology to connect
passengers with drivers using their
personal vehicles
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Transportation Law –
DO 2017-11 = transportation network
vehicle service – PUV accredited with a
TNC, which is granted authority or
franchise by the LTFRB to run a public
transport service
Unsworth Transport International Phils
Inc vs CA – unless he also contracts to
transport, forwarder is not a common
carrier as it merely arranges for the
transportation of goods
Pereña vs Zarate – private carrier is one
who, without making the activity a
vocation, or without holding himself or
itself out to the public as ready to act
for all who may desire his or its services,
undertakes, by special agreement in a
particular instance only, to transport
goods or persons from one place to
another either gratuitously or for hire
Registered owner rule – registered
owner still liable to third parties
Presumption of negligence – mere proof
of delivery of the goods in good order to
a common carrier and of their arrival in
bad order at their destination constitutes
a prima facie case of fault or negligence
against the carrier
Philippine American General Insurance
Co Inc vs CA – it is settled that carrying
a deck cargo (extended part of the ship)
raises the presumption of
unseaworthiness unless it can be shown
that the deck cargo will not interfere
with the proper management of the ship
A clean bill of lading constitutes prima
facie evidence of the receipt by the
carrier of the goods as therein described
Defenses – goods:
1. fortuitous event (Art 1739)
2. public enemy (Art 1739)
3. improper packing (Art 1742)
4. order of public authority (Art 1743)
5.act/omission of shipper
6. contributory negligence of the shipper
(Art 1741)
7. proof of extraordinary diligence
Fire is generally not within the ambit of
natural disaster or calamity
Theft/robbery – not considered a
fortuitous event or a force majeure
May absolve itself of liability for a
resulting loss:
1. if it proves that it exercised
extraordinary diligence in transporting
and safekeeping the goods
2. if it stipulated with the shipper/owner
of the goods to limit its liability for the
loss, destruction or deterioration of the
goods to a degree less than
extraordinary diligence
Hijacking – not force majeure, unless it
was attended by grave or irresistible
threat, violence or force
While the contract of carriage need not
appear to be in writing for it to be
perfect and enforceable, any stipulation
which has the effect of limiting or
reducing its liability must be stipulated
in writing, otherwise it cannot avail of
the limitation or reduction
A stipulation in the bill of lading limiting
the common carrier’s liability for loss or
destruction of a cargo to a certain sum,
unless the shipper or owner declares a
greater value, is sanctioned by law,
particularly Art 1749 and 1750 of the
Civil Code
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Transportation Law –
Philam Insurance Company Inc vs
Heung-A Shipping Corporation – COGSA
Liability Cap = when the shipper fails to
declare the value of the goods in the bill
of lading, neither the carrier nor the ship
shall in any event be or become liable
for any loss or damage to or in
connection with the transportation of
goods in an amount exceeding US$500
per package
Void stipulations in the bill of lading:
(Art 1745)
1. owner’s risk
2. carrier totally not liable
3. no diligence required
4. diligence less than that of a GFF
5. not responsible for the acts or
omission of his or its employees
6. not responsible for acts that are
without grave or irresistible threat,
violence or force
7. not responsible for defective condition
of the means of conveyance
Liability to passengers:
1. duty to observe utmost diligence (Art
1755)
2. duration of liability
3. presumption of negligence (Art 1756)
4. liability for acts of employees (Art
1759)
5. liability of acts of strangers (Art 1763)
6. baggage liability (Art 1754, 1998,
2000 to 03, NCC)
A common carrier is bound to carry the
passengers safely as far as human care
and foresight can provide, using the
utmost diligence of very cautious
persons, with a due regarding for all the
circumstances (Art 1755)
Entry into premises – the moment he
presents himself at the proper place in a
proper manner to be transported
Duty lasts for as long as the passenger
are within its premises and where they
ought to be in pursuance to the contract
of carriage
Singapore Airlines Limited vs Fernandez
– when an airline issues a ticket to a
passenger, confirmed for a particular
flight on a certain date, a contract of
carriage arises
By stepping and standing on the
platform of the bus, the victim is already
considered a passenger and is entitled
to all the rights and protection
pertaining to such a contractual relation
Purita Hibe vs Edgar Go – Culpa
contractual = obligation of the common
carrier to indemnify its passenger or his
heirs for injury or death arises from the
contract of carriage entered into by the
common carrier and the passenger
Singapore Airlines vs Fernandez
- when an airline issues a ticket to a
passenger, confirmed for a particular
flight on a certain date, a contract of
carriage arises
- passenger then has every right to
expect that he be transported on that
flight and on that date, if not then the
carrier opens itself to a suit for a breach
of contract of carriage
The duty to observe extraordinary care
does not extend to checking the veracity
of every entry in these documents
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Transportation Law –
Airlines could not vouch for the
authenticity of a passport and the
correctness of the entries therein
The power to admit or not an alien into
the country is a sovereign act which
cannot be interfered with even by
airlines
In a contract of carriage, it is presumed
that the common carrier is at fault or is
negligent when a passenger dies or is
injured
There is no need for the court to make
an express finding of fault or negligence
on the part of the common carrier
As common carrier, they are bound to
observe extraordinary diligence and in
case of injuries and/or death on the part
of a passenger, they are presumed to be
at fault and thus responsible
G.V. Florida vs Heirs of Battung – failure
to take precautionary measures to
protect the safety of its passengers
despite warnings from law enforcement
agents – failed to exercise the diligence
of a good father of a family in
preventing the attack against one of its
buses
Suplicio Lines Inc vs Curso – collateral
relatives, such as brothers and sisters of
a person who died due to a common
carrier are excluded from recovery of
moral damages for mental anguish by
reason of the death of the deceases
Maritime Commerce
Limited Liability Rule – “no vessel, no
liability”
GR: The liability of the shipowner is
restricted to only the shipowner’s
interest in the vessel. In the case of a
total loss, the liability of the shipowner
ends
EX:
a. negligence of ship owner
b. insurance
c. freightage
d. workmen’s compensation
e. abandonment
Bareboat charter (demise)
- charterer is treated as owner pro hac
vice of the vessel, the charterer
assuming in large measure the
customary rights and liabilities of the
ship owner in relation to third persons
- charterer and not the general owner of
the vessel is held liable for the expenses
of the voyage including the wages of
the seamen
Time charter
- the owner of a time-chartered vessel
retains possession and control through
the master and crew who remain his
employees
- what the time charterer acquires is the
right to utilize the carrying capacity and
facilities of the vessel and to designate
her destinations during the term of the
charter
Voyage charter (trip charter)
- simply a contract of affreightment,
that is, a contract for the carriage of
goods, from one or more ports of
loading to one or more ports of
unloading, on one or on a series of
voyages
- master and crew remain the employ of
the owner of the vessel
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Transportation Law –
Simple average (particular)
GR: include all the expenses and
damages caused to the vessel or to her
cargo which have not inured to the
common benefit and profit of all the
persons interested in the vessel and her
cargo
General average (gross)
GR: include all the damages and
expenses which are deliberately caused
in order to save the vessel, its cargo or
both at the same time, from a real and
known risk
COGSA – international carriage of goods
Code of Commerce – overland
transportation of goods and coastwise
shipping
For COGSA: law of the country of
destination is applicable when it comes
to liability of the carrier for the handling
of goods
Prescriptive period: 1 year upon arrival
of goods (if damage is the
claim)/expected arrival of goods (if claim
is for loss)
Extrajudicial claim will not toll the 1 year
period for COGSA
Philam Insurance Company Inc vs
Heung-A Shipping Corporation – under
COGSA, failure to comply with the notice
requirement shall not affect or prejudice
the right of the shipper to bring suit
within 1 year after the delivery of goods
WARSAW Convention
The convention does not, however,
operate as an exclusive enumeration of
the instances of an airline’s liability, or
as an absolute limit to the extent of that
liability
International air carriage
- any carriage in which, according to the
contract made by the parties, the place
of departure and the place of
destination, whether or not there be a
break in the carriage or a
transshipment, are situated either within
the territories of two High Contracting
Parties (HCP)
- or place or departure and destination –
within the territory of a single HCP, if
there is an agreed stopping place in
another country even though the latter
is not an HCP
HCP – countries that are signatories to
the WARSAW convention
Jurisdiction: the plaintiff may bring the
action for damages before:
1. court where the carrier is domiciled
2. court where the carrier has its
principal place of business
3. court where the carrier has an
establishment by which the contract has
been made
4. court of the place of destination