Transpo Flashcards
Munn v. Illinois
Property becomes clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. He must submit to be controlled by the public for the common good, to the extent of the interest he has thus created.
Public service (CA 146)
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, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether 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 railways, marine repair shop, [warehouse] 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 system, wire or wireless broadcasting stations and other similar public services
Luzon Stevedoring v. PSC
Still a public service if conducted for hire or compensation even if the operator deals only with a portion of the public or limited clientele.
Rationale for regulation
Social justice; meant to balance private and public interests; common good
How to determine just and reasonable rates (Republic v. Meralco)
Consider:
1) Rate of return;
2) Rate base; and
3) The return itself or the computed revenue to be earned by the public utility based on the rate of return and rate base.
Basis for the power to regulate rates (Republic v. Meralco)
Police power & statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof.
Balancing of interests (Republic v. Meralco)
In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. Thus, the fixing of just and reasonable rates involves a balancing of the investor and the consumer interests.
Fair return = Reasonable to the public
Public utility (Sec. 13(d), CA 146 amended by RA 11659)
A public service that operates, manages or controls for public use any of the ff:
1) Distribution of Electricity
2) Transmission of Electricity
3) Petrol and Petrol Products Pipeline Transmission Systems
4) Water Pipeline Distribution Systems and Wastewater Pipeline Systems, inc sewerage pipeline systems
5) Seaports
6) PUVs
Public use (Iloilo Ice Company)
Not confined to privileged individuals; open to the indefinite public
Test: Can the public enjoy it by right or only by permission?
Elements of a public service
1) Person owns, operates, manages, or controls in the PH public services that may include distribution of goods or rendering of services to the public
2) Ownership must be for hire/compensation
3) Ownership must be for general business purposes
4) With general/limited clientele
5) May be permanent, occasional or accidental
When are common carriers considered public service?
1) If they transport freight or passenger/both
2) If their service is with/out fixed route
3) If their classification may be freight/carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water craft
Why is it justified to regulate public utilities?
Because whenever private property is used for a public purpose and is affected with public interest, it ceases to be juris private only and becomes subject to regulation.
Albano v. Reyes
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.
Potestas delegata non delegari potest.
What has been delegated cannot be further delegated
LTFRB delegated power (EO 202)
“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.”
NTC’s power (EO 436)
Regulation and supervision of the cable television industry in the Philippines
Batangas CATV v. CA
Pursuant to E.O. 436, “only persons, associations, partnerships, corporations or cooperatives granted a Provisional Authority or Certificate of Authority by the NTC may install, operate and maintain a cable television system or render cable television service within a service area.” It is clear that in the absence of constitutional or legislative authorization, municipalities have no power to grant franchises. But local governments may prescribe regulations as may be needed for the health, morals, peace, education, good order, safety or general welfare of their constituents.
Utak-1 v. COMELEC
The COMELEC’s Resolution prohibiting the display of election materials in PUVs and transport terminals is NOT within the constitutionally delegated power of the COMELEC under Section 4, Article IX-C, Const.
Sec. 4, Art. IX-C
The Commission may, during the election period, supervise or regulate the enjoyment or utilization of all franchises or permits for the operation of transportation and other public utilities
What do you call public services that are not public utilities?
Businesses affected with public interest (RA 11659)
Enterprises not considered “public service” under CA 146 (Sec. 14, CA 146)
1) Warehouses
2) Animal-drawn vehicles, or oar/sale-moved bancas, tugboats and lighter
3) Airships within the PH (except for the matter of rate-fixing)
4) Radio companies “…”
5) Public services owned/operated by any Gov’t/GOCC “…”
“Affected with public interest”
Can mean no more than that an industry, for adequate reason, is subject to control for the public good.
Public utility (Nebbia v. NY)
A business so affected is one in which property is devoted to an enterprise of a sort which the public itself might appropriately undertake, or one whose owner relies on a public grant or franchise for the right to conduct the business, or in which he is bound to serve all who apply
Tatad v. Garcia
The facilities used to operate a public utility are not a public utility per se
What to look for in determining if there is public use? (Iloilo Ice Company)
Consider:
1) Character of the business
2) Mode of operation
Public utility (JG Summit)
A business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service.
JG Summit Holdings
Shipyards are not a public utility
Other things NOT a public utility
1) Electricity generation
2) Electricity supply to the contestable market
3) Foreign vessels engaged in carriage
Elements of a public utility
1) Public interest or consequence
2) Private property devoted to public use
3) Offers to the public indiscriminately
4) For hire/compensation
Consequences of being a public utility (Republic v. Meralco)
1) Ceases to be juris privati
2) Grants to the public an interest in its use/utility
30 Can be regulated
Gamboa v. Teves
GEN: Count those that are entitled to vote.
In Gamboa, Capital = “total amount of common shares” AKA those entitled to vote.
Citizenship requirement (Sec. 11, Art. 12)
No franchise, cert, or other form of authorization for the operation of a public utility shall be granted EXCEPT to PH citizens or domestically organized corporations/associations, at least 60% of whose capital is owned by such citizens
SEC (Sec. 14, Corpo Code)
SEC has the regulatory function to reject or disapprove the Articles of Incorporation of any corporation where “the required percentage of ownership of the capital stock to be owned by citizens of the Philippines has not been complied with as required by existing laws or the Constitution.”
2-step conversion from debt to equity (In the Matter of: Bayantel)
1) Identify into which class of shares the debt will be converted (if common, preferred, or non-voting preferred)
2) Determine the number of shares with voting rights will be held by foreign entities prior to conversion. If after conversion, the shares exceeds 40%, that exceeds the limit. Otherwise, respect the limitation.
Beneficial owner (Roy v. Herbosa)
Any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power (which includes the power to vote or direct the voting of such security) and/or investment returns or power (which includes the power to dispose of, or direct the disposition of such security)
New requirement (Roy v. Herbosa) (Sec. 2, SEC MC 8-2013)
Consider now: (a) the total number of outstanding shares of stock entitled to vote in the election of directors; AND (b) the total number of outstanding shares of stock, whether or not entitled to vote in the election of directors
Exclusivity (Sec. 11, Art. 12)
No franchise shall be exclusive in character
Exclusivity (Sec. 11, Art. 12)
No franchise shall be exclusive in character
Metro Cebu Water v. Adala
A provision in PD 198 was declared unconstitutional for subjecting the franchise to the approval of the board of directors of the district.
Subject to Amendment
No franchise shall be granted except under the condition that it shall be subject to amendment, alteration or repeal by the Congress when the common good so requires
Franchise (Radio Comms v. NTC)
A privilege emanating from the sovereign power
of the state. A legislative grant of special privilege. It is subject to regulation by the state by virtue of its police power exercised through administrative agencies.
Radio Comms v. NTC
Radio companies are required to have a certificate from the NTC.
Francisco v. Toll Regulatory Board
GEN: A legislative franchise cannot be modified/amended by an administrative body with general delegated powers, to grant authorities or franchises.
EXC: If the administrative agency is granted the power to impose conditions in an appropriate contract “when public interest so requires”, then said body may, subject to certain qualifications, alter the conditions of such authorization.
Francisco v. Toll Regulatory Board
GEN: A legislative franchise cannot be modified/amended by an administrative body with general delegated powers, to grant authorities or franchises.
EXC: If the administrative agency is granted the power to impose conditions in an appropriate contract “when public interest so requires”, then said body may, subject to certain qualifications, alter the conditions of such authorization.
Francisco v. TRB (Fixed-term/Maximum-term)
While the TRB is vested by law with the power to extend the administrative franchise or authority that it granted, nevertheless, it cannot do so for an accumulated period exceeding 50 years. Otherwise, it would violate the proscription under Article XII, Section 11 of the 1987 Constitution
Permanent Take-over Power (Sec. 18, Art. 12) exercised by President
State may, in the interest of national welfare/defense, (1) establish and operate vital industries and (2) upon just compensation, transfer to public ownership utilities and other private enterprises to Gov’t operation
Temporary Take-over Power (Sec. 17, Art. 12) delegated by Congress
In national emergency, when public interest so requires, the State may, under reasonable terms prescribed by it, temporarily take over/direct the operation of any privately owned public utility/business affected with public interest
National emergency (Davide v. GMA)
Existence of conditions suddenly intensifying the degree of existing danger to life or well-being beyond that which is accepted as normal
Types of emergencies (David v. GMA)
1) Economic
2) Natural disaster
3) National security
Conditions for granting Sec. 23, Art. VI emergency powers
1) War or other emergency
2) Delegation is for a limited period only
3) Subject to restrictions as prescribed by Congress
4) Must be exercised to carry out a national policy declared by Congress
Police power
State authority to enact legislation that may interfere with personal liberty/property in the interest of general welfare
Privatization of state-operated public utilities (Kuwait Airways v. PAL)
Under the post-privatization era, the authority of the Philippine Government can only come in its capacity as regulator. As with all regulatory subjects of the government, infringement of property rights can only avail with due process of law.
Regulations
Means of controlling method of operation
Ways to regulate
1) Authority to operate
2) Rate-fixing
3) Area of operation
4) Approval of sale, mortgage, lease of public utility assets/equities
5) Power to set fees and other charges
6) Other means of regulation
Rule regarding authority to operate
GEN: No public service will operate without being issued a certificate of public convenience (CPC) or a certificate of public convenience and necessity (CPCN)
EXC: Those under Sec. 14 and legislative franchises
Who has the power to authorize?
Congress.
PLDT v. NTC
The provisional authority was issued after due hearing, reception of evidence and evaluation thereof, with the hearings attended by various oppositors, including PLDT. It was granted only after a prima facie showing that ETCI has the necessary legal, financial and technical capabilities and that public interest, convenience and necessity so demanded.
Authority to operate as per Francisco v. TRB
Congress has an explicit authority to grant a public utility franchise. However, it may validly delegate its legislative authority, under the power of subordinate legislation, to issue franchises of certain public utilities to some administrative agencies. Thus, a special franchise directly emanating from Congress is not necessary if the law already specifically authorizes an administrative body to grant a franchise or to award a contract
NAPOCOR v. CA
Such authority to be a public utility may not be exercised in such a manner as to prejudice the rights of existing franchisees. The determination of which of two public utilities has the right to supply electric power to an area which is, with the enactment of Republic Act No. 7638, under the Department of Energy
CPC v. Franchise (Metru Cebu Water v. Adala)
CPC: A formal written authority issued by quasi-judicial bodies for the operation and maintenance
of a public utility for which a franchise is not required by law
Franchise: A privilege or authority to operate appropriate private property for public use vested by Congress through legislation.
How to issue certificates (Sec. 16)
PSC has power upon notice and hearing to issue certificates authorizing operation of public service… so long as it will promote public interest in a proper and suitable manner… issued to corps., partnerships, associations or joint stock companies
Consequence of failure to get certificate (Sec. 18)
Will be unlawful to engage in public service without certificate
General qualifications for a grant of CPC (Vda. de Lat v. PSC)
1) Applicant is a citizen of the PH or a corp., co-partnership, association or joint-stock company organized in the PH with at least 60% of its stock/paid-up capital belonging to PH citizens
2) Applicant is financially capable of undertaking the service and meetings its incidental responsibilities
3) Applicant proved that the operation will promote the public interest
When do public convenience and necessity exist? (KMU v. Garcia)
When the proposed facility/services (1) meets a reasonable want of the public and (2) supplies a need which existing facilities don’t adequately supply.
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.
How to attack a public utility?
Quo warranto proceedings instituted by the State
When may a CPC be cancelled?
1) Misrepresentation
2) Refusal of the petitioner to comply with the
directives rules and regulations of the PSC. (Willful and contumacious violation of the law and rules.
Divinagracia v. Consolidated
Allowing [an administrative agency] to revoke a franchisee’s franchise gives rise to an administrative agency’s veto power, which is contrary to the separation of powers
PAL v. CAB (1968)
CAB’s authority under RA No. 776 to grant a temporary permit upon its own initiative suggests the power to exercise said authority even before the presentation of evidence has begun.
Provisional authority
An authority given to an entity qualified to operate a public utility for a limited period during the pendency of its application for, or before the issuance of its CPC.
PAL v. CAB (1997)
The use of the word “necessity”, in conjunction with “public convenience” in a certificate of authorization to a public service entity to operate, does not in any way modify the nature of such certification, or the requirements for the issuance of the same. It is the law which determines the requisites for the issuance of such certification, and not the title indicating the certificate. 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 and must be construed together.
Rate-fixing proceedings (Sec. 16c)
Hearing within 15 days upon publication and notice to the affected parties in the territory affected. (vs 30 days before)
Rates (Sec. 20a)
Rates need approval of Commission.
Rates must be prudent and efficient and not unjustly discriminatory or unduly preferential.
Upon reasonable notice to public services and other parties, giving them a reasonable opportunity to be heard, and discharging the burden of proof that they are indeed prudent and efficient.
Guide for NTC to fix rates (PHILCOMSAT)
1) Public safety
2) Public interest and
3) reasonable feasibility of maintaining effective competition of private entities in communications and broadcasting facilities
4) Reasonable rates
PHILCOMSAT
While NTC may fix a temporary rate pending final determination of the application of petitioner, such rate-fixing order, temporary though it may be, is not exempt from the statutory procedural requirements of notice and hearing, as well as the requirement of reasonableness.
When is a rate confiscatory? (PHILCOMSAT)
Consider the given situation, requirements and opportunities of the utility.Check the fair return upon the value of the property to the public utility. Competition is also a very important factor in determining the reasonableness of rates since a carrier is allowed to make such rates as are necessary to meet competition.
Provisional authority vs. Temporary Permit
TP: A document containing the call sign, authorized power, frequency/channel, class station,
hours of operation, points of communication and equipment particulars granted to an authorized public utility. Flows from a PA.
Test for determining whether a grant of PA is proper
Weigh public interest
Also, are they qualified
Do provisional rates need hearing? (Padua)
No. A hearing is not necessary for a grant by the Toll Regulatory Board of provisional toll rate adjustments.
What is necessary is that it be issued upon
(1) a finding that the petition is sufficient in form and substance;
(2) the submission of an affidavit showing that the increase in rates substantially conforms to the formula in the franchise or toll operation agreement, and that failure to immediately impose the
increase in rates would result in great irreparable injury to the petitioner; and
(3) the submission of a bond.
Freedom from Debt v. ERC
GEN: ERC Does have the power to issue provisional rates
QLF: (1) The need to publish the application and (2) to consider comments from LGU and consumers
Rate refund (BF Homes v. MERALCO)
Indubitably, the ERC is the regulatory agency of the government having the authority and supervision over
MERALCO. Thus, the task to approve the guidelines, schedules, and details of the refund by MERALCO to its consumers, to implement the judgment of this Court in Republic v. MERALCO, also falls upon the ERC.
Power to Fix Rates vis a vis Power to Grant Authority (Francisco)
The grant to and the exercise by an administrative agency of regulating and allowing the operation of
public utilities and, at the same time, fixing the fees that they may charge their customers is now
commonplace. [grant to admin agency of regulating AND fixing the fees is now commonplace]
Area of Operation
The determination of which of two public utilities has the right to supply electric power to an area which is within the coverage of both is certainly not a rate-fixing function (remains with the ERB). It deals with the regulation of the distribution of energy resources which, under EO 172, was expressly a function of ERB. However, with the enactment of RA 7638, the DOE took over such function. Hence, it is the DOE which shall then determine whether CEPALCO or PIA should supply power to PIE-MO
Approval of Sale and Mortgage of Public Utility Assets or Equity
Needed as per Sec. 20(g)
Montoya v. Ignacio
If the property covered by the franchise is transferred, or leased to another without obtaining the requisite approval, the transfer is not binding against the PSC and in contemplation of law the grantee continues to be responsible under the franchise in relation to the Commission and to the public.
Zamboanga Transpo
As a mortgage/lien on the property of a PU may prejudice the public interests, the law also requires that before public utilities mortgage their properties, they must obtain the necessary approval of the Commission to determine if the mortgage is injurious or beneficial to the public interests.
PLDT v. NTC re: sale of shares of stock
The Court explained that shares of stocks are owned by stockholders, the sale of which requires only NTC approval, while the franchise itself is owned by the corporation as the grantee thereof, the sale or transfer of which requires Congressional sanction.
Power to set fees and charges (Sec. 40g)
The Commission is authorized and ordered to charge and collect from any public service or applicant, as the case may be, the following fees as reimbursement of its expenses in the authorization, supervision and/or regulation of the public services
Gerochi v. DOE
the Universal Charge imposed under Sec. 34 of the EPIRA is NOT a tax. It explained that if the generation of revenue is the primary purpose and regulation is merely incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that revenue is incidentally raised does not make the imposition a tax. In this case, the primary purpose is to ensure the viability of the country’s electric industry and this is done through the universal charge. The purpose is therefore of a regulation and the imposition of charges is only incidental to that regulation.
Elements of a public utility (Sec. 13e)
1) Entity regularly supplies and transmits and distributes to the public.. a commodity or service of public consequence
2) It is a natural monopoly that needs to be regulated when common good so requires.
3) Necessary for the maintenance of life and occupation
4) The commodity is obligated to provide adequate service to the public on demand
Natural monopoly
When market demand for a commodity/service can be supplied by a single entity at a lower cost than by 2 or more entities
Contract of transportation
A person or association of persons obligate themselves to transport persons, things or news from 1 place to another for a fixed price
Common carriers (Art. 1732)
- Persons, corporations, firms or associations
- engaged in the business of carrying/transporting passengers or goods or both
- by land, water or air
- for compensation
- offering their service to the public
Carriage of goods
Parties are the shipper (person who pays the consideration) and carrier (person who delivers)
Carriage of passengers
Parties are the common carrier and passenger (one who travels in public conveyance by virtue of contract, express or implied, with the carrier as to the payment of fare)
Contract to carry goods/persons (regular)
Commences when parties enter the vehicle
- Is perfected upon consent
Contract of carriage of goods/persons (Contract of sale)
Commences when goods have been loaded
Nature of a Certificate of Public Convenience (CPC)
- Can be sold on execution sale because it has considerable material value (Raymundo v. Luneta)
- Affected with public interest therefore under gov’t control (Cogeo-Cubao v. CA)
- Confers no proprietary right over the route the certificate covers (Cogeo-Cubao)
Scope of a franchise
- Ferry boat service (done by barges, rafts, motor or stream vessels between riverbanks; considered a continuation of the highway)
- NOT when the land is separated by an open sea; that’s interisland/coastwise trade (San Pablo v. Pantranco)
Prior-operator rule (Batangas Transport v. Orlanes)
PSC’s duty to grant a subsequent license to a prior operator for the same thing over the same route of travel
QLF:
(1) Operator complying with the terms and conditions of his license and
(2) the reasonable rules and regulations for its operation, and
(3) the reasonable demands of the public
Kabit system
Arrangement where a person who has been granted a CoC allows another person who owns motor vehicles to operate under such franchise for a feww
Court’s response to kabit system
It’s contrary to public policy and therefore void under the CC (Art. 1409). The Court won’t aid either party to enforce it; they will leave them where it finds them
Why does the court not care for the kabit in a public auction sale? (Santos v. Sibug)
The kabit operator is not a stranger therefore the property levied is not a “stranger’s property”
Baliwag Transit v. CA
Determining factor is the possession of a franchise to operate NOT the issuance of a SSS Number for both bus lines
Liability for accommodation passengers (Lara v. Valencia)
Accommodation passengers, those who paid nothing for the service, are not owed extraordinary diligence. Owed reasonable care only.
EFFECT: If the injury to the passenger was due to his own negligence, carrier cannot be held liable
Liability of registered owner (PCI Leasing v. UCPB Insurance)
Primarily liable BUT they have a right to be indemnified by the real/actual owner
How to prove liability under Art. 2180 (Caravan Travel and Tours v. Abejar)
(1) Er-EE relationship between the driver and the owner
(2) That the driver acted within the scope of his/her assigned tasks
How to prove liability under Registered-Owner Rule (Caravan Travel and Tours v. Abejar)
That the defendant-ER is the registered owner of the vehicle
Caravan Travel Tours approach
1) Establish registered-owner rule –> Raising a disputable presumption that Art. 2180 has been proven
2) Burden of evidence shifts to defendant
3) Defendant can prove: a) that it had no employment relationship, or b) the employee acted outside the scope of his assigned tasks, or c) that it exercised the diligence of a good father of a family in the selection and supervision
DOTC vs. DPWH (Mirasol)
Authority to regulate flow of vehicular traffic along major roads belongs with the DOTC
MMDA v. Viron Transport
MMDA can’t order elimination of bus terminals
EO 125 (DOTr)
Sec. 4 Mandate: promote, develop, regulate networks of transport and communication as well as in the fast, safe, efficient and reliable postal transpo and communication services
(BUT COMMS passed to DICT)
Powers and functions of DOTR
- Formulate policies and guidelines for implementation of transpo systems
- Establish programs for transpo & may call on other agencies
- Transpo development programs
Administer and enforce all laws - Coordinate with DPWH of all infrastructure of the DOTR.
- Issue certificates of public convenience
Inspect air and land transpo facilities - Issue licenses
- Fix rates
- Also prescribe rules to Civil Aviation Training Center
- Judicial functions as may be necessary
Regulation of air transpo
Civil Avi Authority Philippines (CAAP) over technical aspects
Civil Aeronautical Authority and Board (CAAB) over economic aspects
CAAP (RA 9497)
Has quasi-judicial and quasi-legislative powers
Director General of CAAP
- Admin control over all
Policies of CAAP (Sec. 21)
- Develop air potential
- Devt of air transpo system
- Regulation to support sound econ condition
- Quality, reliability, affordability of safety of air transpo
- Globally competitive aviation industry
Powers of CAAP (Sec. 24)
- Rules and regulations for safety of air commerce including licensing, equipment worthiness, construction, facility regulations, etc.
- Impose charges and fees for use of facilities and services rendered
- Charges on privately-owned navigation facilities
- Other fees for landing, parking, etc
- Grant exemptions
- Security screening
Classes of CAAP and CAB
1) Policy-making
2) Administrative functions
3) Quasi-judicial/adjudicative
4) Regulatory/quasi-judicial
Powers of Director-General
- Issue certificates
- Impose fines and/or civil penalties
1) Policy powers
2) Administrative
3) Quasi-judicial
Reorg of CAB and CAA (RA 776)
Dev’t of air potential
- Promote competition
- Air safety
Powers of CAB (Sec. 10)
= Issue/cancel permits
- Fix rates or fares
Certificate of Public Convenience and Necessity
Permit to authorize a person to engage in air commerce and/or air transpo
Kuwait Airways v. PAL
- Because it was only an officer of CAB, acting on behalf of the CAB and not of the PH gov’t, their act of abrogation had no effect on the commercial agreement originally entered into by Kuwait and PAL
- CAB is the regulatory authority over econ aspects. Therefore PAL is subject to CAB. CAB can regulate and even cancel PAL’s agreements
KMU Labor Center v. Garcia
Can’t delegate rate fixing power to a common carrier
Who has authority to regulate over maritime transpo (PD 474, affirmed by EO 125-A)
Maritime Industry Authority (MARINA)
Powers of MARINA (Sec. 14, EO 125-A)
1) Policy power
2) Regulatory power
3) Jurisdiction powers
Domestic ship operators
Domestic ship operator can also fix rates for passenger and cargo
RA 10635
- STCW Convention (Standards of Training, Certification and Watchkeeping for Seafarers)
OId regime (US v. Tan Piaco)
So long as engaged in a purely private enterprise without attempting to render service to all who may apply, cannot be considered public utility for public use
Test: If the public may enjoy by right or only by permission
Liberal approach (De Guzman v. CA)
No distinction anymore between
- One whose principal business activity is transpo and one whose transpo business is only an ancillary activity
- Those who offer on a regular/scheduled basis and one offering on occasional, episode/unscheduled basis
- One who offers to the “general public” and one offering to a narrow segment of the general population
Test of being a common carrier (Bascos v. CA)
If the undertaking is part of the business engaged by the carrier which he has held out to the general public as his occupation
Use of charter
Public carrier remains so even if there is a charter.
QLF: The charter must be limited to the ship only (ex. time-charter or voyage-charter)
Requisites of a common carrier of goods (1st Philippine Industrial Corp. v. CA)
1) Must be engaged in the business of carrying goods as a public enjoyment and must hold himself out as ready to engage in the transpo of goods for persons generally as an occupation;
2) Undertake to carry goods of the kind their business is confined to;
3) Undertake to carry by the method their business is conducted and over his established roads;
4) For hire
Uncommon carriers
- Pipeline operators
- Resort owner who operates ferry services with their services
- Customs broker
- School bus operators
- Lighterage firm
Liability of common carriers (Art. 1733)
Extraordinary diligence; Liability is direct and immediate
Isaac v. A.L Ammen
When confronted with a sudden emergency, having to act quickly and without a chance for deliberation must be taken into account.
- Lowers diligence to exercise care as any ordinary prudent person would exercise under similar circumstances
Fores v. Miranda
No moral damages for breach of contract of transportation.
EXC: Unless carrier was guilty of malice or bad faith
Presumption of fault or negligence (Art. 1735)
If the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently
What law applies for common carriers
Law of the country to which the goods are to be transported
How to admit a copy of a foreign public document
1) Must be attested by the officer having legal custody of the records/by his deputy
2) Accompanied by a certificate by the secretary of the embassy, with the seal of their offic
Force majeur (Art. 1734)
- Flood, storm, earthquake, lightning, or other natural disaster or calamity;
- Act of the public enemy in war (int’l or civil);
- Act/omission of the shipper or owner of the goods;
- Character of the goods/defects in the packing or containers;
- Order or act of competent public authority
Effect of force majeur (Art. 1734)
Removes responsibility for loss, destruction or deterioration
Liability of carrier for broken goods
even if there exists the exceptional circumstances, if the injury could still have been avoided by the exercise of reasonable skill and attention on the part of the person employed, then carrier may still be liable.
Burden is on shipper
Effect of Art. 1734
Removes the presumption of fault or negligence
Natural disaster (Art. 1739)
- Needs to be the proximate and only cause
- BUT must still exercise due diligence before, during and after occurrence
- Must be no delay (Art. 1740)
- also applied to act of public enemy (+ official declaration of war)
Act/omission of the shipper (Art. 1741)
If shipper only contributed to the loss, with proximate cause still being the common carrier, damages will just be equitably reduced for common carrier
Order of competent authority (Art. 1743)
- Goods are seized or destroyed
- Public authority had power to issue the order
Duration of extraordinary responsibility (Art. 1736)
From time goods are unconditionally placed in the possession of and received by the carrier for transpo until delivery to the consignee or person with the right to receive them
- Also even during times they are temporarily unloaded/stored (EXC: right of stoppage in transitu) (Art. 1737)
- Also during times goods are stored in a warehouse of the carrier at the place of destination until consignee was advised of arrival, and he had reasonable opportunity to remove them (Art. 1738)
Agreement limiting liability (Art. 1744)
- To a degree less than extraordinary
- So long as in writing, signed by shipper/owner
- supported by a valuable consideration; and
- Reasonable, just, not contrary to public policy
Take into account:
- Presence of competitor along line/route or a part thereof (Art. 1751)
Disallowed stipulations (Art. 1745)
- Goods will be at risk of owner or shipper
- Common carrier will not be liable for any loss, destruction or deterioration
- Common carried need not observe any diligence in custody of goods
- Degree of diligence < good father of a family, or of a man of ordinary prudence in the vigilance over the movables
- Shall not be responsible for the acts/omission of his/its employees
- Liability for acts committed by thieves who DO NOT act with grave/irresistible threat, violence or force is dispensed with or diminished
- Not responsible for loss, destruction or deterioration of goods on account of the defective condition of the vehicle used
Limitation of liability to value of goods appearing in the bill of lading (Art. 1749)
Binding
- UNLESS shipper/owner declares a greater value
Liability for employees (Art. 1759)
Liable for death or injuries to passengers through
- negligence or willful acts of the employees
- Even if they (1) acted beyond the scope of their authority, or (2) in violation of their orders
Factors that would render limitations of liability ineffective
1) Carrier refuses to carry the goods (Art. 1746)
2) Carrier delays without just cause the transport (Art. 1747)
3) Carrier changes the stipulated or usual rate (Art. 1747)
Delay on account of strikes or riots (Art. 1748)
Agreement limiting liability on this account is VALID
Rule on passenger baggage (Art. 1998)
Keepers are responsible provided:
- Notice was given to them;
- Guests take the precautions which the keepers advised
Extent of responsibility for passengers (Art. 1755)
As far as human care and foresight can provide using the utmost diligence of very cautious persons with a due regard for all circumstances
How to defend against breakage accusation in vehicle (Necesito v. Paras)
1) Show the accident was due to a latent defect in the construction that could not have been discovered by exercise of such care;
2) The builders also by the same care could not have discovered the defect or foreseen the result
Duration of responsibility over passengers
- (Trains) Time he presents himself at the proper place in a proper manner to be transported with a bonafide intent to ride the coach
To a time where there still exists a reasonable cause as will justify the presence of the passenger
Force majeur (Yobido v. CA)
1) Cause of the unforeseen or unexpected occurrence is independent of human will;
2) Impossible to foresee or if foreseen, impossible to avoid;
3) Renders it impossible to fulfill the obligation in a normal manner;
4) Obligor is free from any participation in the aggravation of the injury
Limitation of liability for passengers (Art. 1758)
Can limit IF passenger is carried gratuitously
EXC: Not for willful acts or gross negligence
Acts of strangers and co-passengers (Art. 1763)
Extends to injuries suffered on account of willful acts or negligence of other passengers or strangers
- good father of a family
Actual or compensatory damages (Art. 2199)
Only for pecuniary loss suffered
Extent of damages (Art. 2201)
1) Natural and probable consequences of the breach
2) Which the parties have foreseen or could have reasonably foreseen
In case of fraud, bad faith, malice or wanton attitude
- responsible for all damages attributable to non-performance
Damages for death by crime or QD (Art. 2206)
At least 3K
- loss of earning capacity
- support
- moral damages
Formula for lost earning capacity
LE = 2/3(80 - Age of death)
Net Earning Capacity = Annual income - expenses
Lost earning capacity = LE x NEC
Moral damages (Art. 2217)
Physical suffering, mental anguish, eetc.
Exemplary (Art. 2229)
Imposed by way of example or correction for the public good
Nominal (Art. 2221)
When some injury has been done but amount fails to show actual damages
Temperate damages (Art. 2224)
> Nominal, < Compensatory
- No definite proof of pecuniary loss but sure it exists
When a contract of transpo by land or water is commercial (Art. 349)
1) Has for its object merch or any article of commerce
2) When whatever its object may be, the carrier is a merchant/habitually engaged in transpo for the public
Bill of lading (Art. 352 COC)
- bears carrier name
- date of shipment
- points of departure and arrival
- cost
- number and weight of packages
- other manifestations for their easy identification
Bill of lading for transpo by railroad (Art. 351)
- time and special conditions of carriage
- schedules and regulations chosen
- or if not determined by shipper, the carrier-provided rate
