Transportation Law

Question 1

Common Carrier Defined

Answer 1

• A person, corporation, firm or association
• engaged in the business of carrying or transporting passengers, goods or both,
• by land, water or air for compensation
• Offering its services to the public

Question 2

Test to determine whether a person is a common carrier

Answer 2

Does the person hold out to the public that it is engaged in the business of transporting or carrying passengers or goods or both as a public employment and not a casual occupation

Question 3

Requisites of a common carrier

Answer 3

1. Engaged in the business of transporting passengers or goods or both generally as a business, and not merely as an occupation
2. He must undertake to carry passengers or goods over established roads by the method by which the business was conducted
3. Transportation must be for hire

Question 4

Is a freight forwarder a common carrier?

Answer 4

No. It merely selects the common carrier. Its liability is limited to damages arising from its own negligence in choosing the carrier.

XP: Where it contracts to deliver goods to destination instead of merely arranging for their transportation

Question 5

Is a shipowner a common carrier?

Answer 5

Yes. It meets all the requisites of a common carrier

Question 6

Is an Arrastre Operator a Common Carrier?

Answer 6

No. It is a mere custodian of the goods from a vessel. Its obligation is akin to that of a warehouseman.

HOWEVER, Liability between a CC and an Arrastre Operator is the same.

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Question 7

Is a Customs Broker a common carrier?

Answer 7

Yes. To declare otherwise would deprive those with whom it contracts with the protection which the law affords them.

Question 8

May a common carrier be converted to private carrier by stipulation?

Answer 8

Yes. A common carrier may be converted to a private carrier in case of a bareboat or demise charter

Question 9

Art. 1733 ( Exercise of extraordinary diligence )

Answer 9

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Question 10

Who is liable in case of breach of a contract of carriage?

Answer 10

If the COA is based on a breach of contract of carriage, the liability of the owner/operator is direct as the contract is between him and the passenger.

The driver may be sued based on quasi-delict and/or criminally if his negligence can be established.

Question 11

Defenses available to common carriers for vigilance over goods?

Answer 11

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, 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 of omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.

** Exercise of extraordinary diligence

Question 12

Requisites in order for natural disaster to be considered an exempting circumstance of loss or damage to goods?

Answer 12

1739

a. The natural disaster is the only and proximate cause of the loss

b. CC exercised due diligence to prevent or minimize the loss before during and after the occurrence of the natural disaster

c. CC should not incur in delay

Question 13

What is the effect of contributory negligence on part of the shipper on case of loss or damage to the goods?

Answer 13

If the shipper or owner contributed to the loss or damage to the goods the proximate cause thereof being the negligence of the common carrier, the latter shall be liable for damages but shall be equitably reduced.

Question 14

In a contract of carriage for goods, when does obligation to exercise extraordinary diligence commence and when does it end?

Answer 14

Art. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them

Question 15

How to lower diligence required of a common carrier over vigilance over goods?

Answer 15

Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be:

(1) In writing, signed by the shipper or owner;

(2) Supported by a valuable consideration other than the service rendered by the common carrier; and

(3) Reasonable, just and not contrary to public policy.

Question 16

Void Stipulations for limitation of liability.

Answer 16

Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:

(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary prudence in the vigilance over the movables transported;

(5) That the common carrier shall not be responsible for the acts or omission 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;

(7) That the common carrier is 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.

Question 17

Diligence Required in the carriage of its passengers

Answer 17

Art. 1755. 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 regard for all the circumstances.

Question 18

Presumption of negligence in the carriage of passengers

Answer 18

Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755.

Question 19

Liability of Common Carriers for the acts of its employees

Answer 19

Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the former’s employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees.

Question 20

What is the liability of common carriers for the death or injuries to passengers caused by other passengers or strangers?

Answer 20

Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission

Question 21

Elements of a fortuitous event

Answer 21

1. The cause of the unforeseen event must be independent of human will
2. It must be impossible to foresee the vent which constitutes cast fortuito, if it can be foreseen it must be impossible to avoid
3. Occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and
4. The obligor must be free from any participation in the aggravation of the injury.

Question 22

3 Characteristics of a Bill of Lading

Answer 22

1. A bill of lading is considered a receipt for the goods shipped to the common carrier
2. It also serves as a contract by which the shipper, carrier and consignee undertake specific obligations
3. It is the evidence of the existence of of the contract of carriage providing for the terms and conditions thereof.

Question 23

Effect of a bill of lading accepted without any objection

Answer 23

Raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him and, in the absence of fraud or mistake, he is estopped from denying that he assented to such terms

Question 24

When should shipment be delivered?

Answer 24

As a GR, in the absence of a special contract, a carrier is not an insurer against delay in transportation of goods. A common carrier is deemed to deliver the same within a reasonable time.

Question 25

When may the consignee refuse to receive the goods

Answer 25

This depends on the extent of damage of the goods

1. If the damaged portion can be segregated, the consignee may reject the damaged portion and accept the rest
2. If damage results to diminution of value, carrier is bound to pay the difference between the price on that day and its depreciated value
3. If the goods are rendered useless for consumption or intended purpose, the consignee may reject the goods and demand payment of such goods at their market price on that day

Question 26

Period of filing claims in case of damage to goods

Answer 26

1. Interisland commerce (CoC)

Apparent. - filed immediately with the CC
Not Apparent - within 24 hours from delivery

2. International Carriage (COGSA)

Apparent - upon discharge of the goods

Not Apparent - within 3 days from delivery

Question 27

Period of filing actions in case of damage to goods

Answer 27

Coastwise - Within 6 years from the date of delivery of goods if no bill of lading was issued

If a bill of lading was issued, 10 years from the receipt of the goods

International (Foreign ports to PH)
Action must be filed within 1 year from the date of delivery or the date when goods should have been delivered.

A provision shortening the period to file an action in the bill of lading is void.

Question 28

What is a contract of affreightment

Answer 28

The use of shipping space on vessels is leased in part or as a whole to carry goods for others. It may either be a time charter or a voyage charter. The common carrier and is answerable for loss.

Question 29

Demise or barebone charter

Answer 29

The whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and its crew. The charterer becomes the owner and is liable for damage the goods.

Question 30

Liabilities of a ship agent

Answer 30

COC

1. Civilly liable for the acts of the captain and obligations incurred by the latter to repair, equip and provision the vessel
2. Civilly liable for indemnities In favor of third parties which arise from the conduct of the captain in care of the goods which he loaded on the vessel. (XP: He may exempt himself therefrom by abandoning the vessel with all its equipment and freight earned during the voyage)

Question 31

Limited Liability Rule

Answer 31

AKA Real or Hypothecary nature of Maritime Law

The liability of the carrier in connection with losses related to maritime contract is limited to his interest in the vessel which is hypothecated for such obligations

Thus,if the vessel should sink and never be recovered, it extinguishes the liability unless it was insured.

Question 32

Rationale for limited liability rule

Answer 32

Designed to offset the adverse conditions of maritime trade and encourage people to venture into maritime commerce despite the risks and prohibitive costs of ship building.

Question 33

Instances when limited liability rule does not apply

Answer 33

1. Expenses for repairs contracted before the vessel is lost
2. When the injury or death of the passenger is due to the fault of the shipowner, or negligence of the shipowner and captain
3. Claims of the Crew under Workmen’s compensation act
4. When the vessel is insured, in which case, the liability of the shipowner or ship agent is limited to the extent of the insurance proceeds.
5. When the vessel is abandoned
6. In case the voyage is not maritime but only in river, bay or gulf
7. In case the vessel is not a CC

Question 34

What are averages?

Answer 34

Averages are all extraordinary or accidental expenses which may be incurred during the voyage for the preservation of the vessel or cargo or both.

NOTE: Differentiate from usual expenses which shall be ordinary expenses and be defrayed by the shipowner unless there is a stipulation to the contrary.

Question 35

Simple Average

Answer 35

Includes all expenses and damages caused to the vessel or to her cargo which have not inured to the common benefit and profit of all persons interested in the vessel

The owner of the things which give rise to the expenses or suffered damage shall bear the simple or particular averages.

Question 36

General Average

Answer 36

Includes all damages and expenses which are deliberately caused in order to save the vessel, her cargo or both from a real known risk.

In order to satisfy the amount of the gross or general average, all persons having an interest in the vessel and cargo therein at the time of the occurrence of the average shall contribute.

Question 37

Requisites of a General Average

Answer 37

1. There must be a common danger to the ship and cargo after it has been loaded
2. A portion of the vessel or some of the cargoes or both are sacrificed deliberately for common safety
3. Vessel or cargo is successfully saved
4. Formalities under Arts. 813 and 814 of COC are complied with

Question 38

Formalities under Arts. 813 and 814 for general average.

Answer 38

1. Assembly to be called by the captain of all the cargo owners and other officers of the vessel
2. Deliberation with the sailing mate and the other officers of the vessel and after hearing the persons interested in the cargo must be present
3. Resolution of the captain to cause damage which constitutes the general average
4. Entry of resolution in the logbook stating the motives and reasons on which it is based.
5. Delivery of minutes to the maritime judicial authority of the first port of arrival within 24 hours from arrival
6. Ratification by captain under oath

Question 38

Rules on Collision

Answer 38

1. The Vessel at fault shall indemnify the damages sustained or losses incurred (826)
2. If both vessels are at fault, each shall suffer its own damages, and both shall be solidarily liable for losses or damage caused to the cargo (827)
3. The above rule applies if it is not clear which vessel is at fault . It shall be as if both vessels are at fault. AKA Doctrine of inscrutable fault. (828)

Code of Commerce

Question 39

Is a protest necessary in an action for the recovery of damages arising from collisions?

Answer 39

Action for recovery of damages arising from collisions cannot be admitted if a protest or declaration is not presented within 24 hours before the competent authority.

XP: With respect to damage caused to persons to the cargo, the absence of a protest may not prejudice the persons interested who were not onboard or were not in a condition to make known their wishes

Question 40

Is abandonment necessary to claim the limited liability rule?

Answer 40

Yes.

XP: If the injury was due to the shipowner’s fault, the ship owner may not avail of his right to avail of this rule by abandoning the vessel

Question 41

To what kinds of contracts does COGSA apply?

Answer 41

All contracts of carriage of goods bt sea TO AND FROM the PH.

Applicable up to the final port of destination and the fact that transshipment was made on an inter island vessel does not remove the contract of carriage from operation of the act

Question 42

Legal Consequences of application of COGSA

Answer 42

1. Prescriptive period to file an action in case of damage or loss of goods is 1 year from the date of delivery or the date they should have been delivered.
2. An amount recoverable in case of loss or damage shall not exceed $500 per package XP: The value of the goods have been declared in the BoL by the shipper

Question 43

What law applies in case of loss of goods shipped from a foreign country to the PH?

Answer 43

Law of the country to which the goods are to be transported shall govern. (CC)

Question 44

Loss as defined under COGSA

Answer 44

A situation wherein no delivery at all was made by the shipper of the goods because the same had
1. Perished
2. Gone out of commerce
3. disappeared in a way that their existence is unknown or they cannot be recovered

Question 45

Under COGSA, when must notice be given is case of loss or damage to goods?

Answer 45

At the time of the removal of the goods into the custody of the person entitled thereto.

Within 3 days from the delivery of the goods if the damage is not apparent

NOTICE MUST BE IN WRITING GIVEN TO THE CARRIER OR HIS AGENT

Question 46

Under COGSA, when does the 1 year prescriptive period commence?

Answer 46

Computed from the delivery of the goods or the date when the goods should have been delivered.

Jurisprudence provides that this means date of delivery to the arrestre operator.

Question 47

Instances when the 1 year prescriptive period under COGSA is interrupted?

Answer 47

1. An action has been filed in court. In case of dismissal of the suit NOT ON THE MERITS the period refreshes from 1 year of date of dismissal
2. When there is an express agreement between the parties that an extrajudicial claim for damages will suspend the running of the prescriptive period

Question 48

What is a package as defined under COGSA

Answer 48

Means container unless the bill of lading disclosed the
1. contents of the containers
2. number of cartons
3. nature of the goods

HEnce, each of those units and not the container constitutes the package

Question 49

Public utility

Answer 49

Business or service engaged in regularly supplying the public with some commodity or service of public consequence

Ex. electricity, gas, water, transportation

Question 49

Principal determinative characteristic of a public utility

Answer 49

That of service to or readiness to serve an indefinite public or portion of the public as such which has a legal right to demand and receive its services or commodities

Question 50

Certificate of Public Convenience and Necessity

Answer 50

A written authority issued by the government to enable a person to engage in public service, for which a legislative franchise is required subject to the existence of a need

Question 51

Certificate of Public Convenience

Answer 51

Written authority issued by the government to enable a person to engage in public service.

Note: No legislative franchise is needed for a CPC as opposed to a CPCN

Question 52

Does the issuance of a CPC/CPCN confer a property right?

Answer 52

No. The certificate constitutes neither a franchise nor a contract. It confers no property right and is a mere license or privilege.

Revocation does not constitute deprivation of a vested right.

Question 53

Requisites for application of CPC under the Public Service Act?

Answer 53

Following requirements must be met:

1. Applicant must be a PH citizen or corporation w/ at least 60% of stock belonging to PH citizens
2. Applicant must prove necessity
3. Applicant must prove that operation of public service and authorization to do business will promote public interest in a proper and suitable manner
4. Applicant must be financially capable of undertaking proposed service and meeting the responsibilities incident to its operation.

Question 54

Can a foreign corporation own the facilities by which a public utility may operate?

Answer 54

Yes. There is a clear distinction between “operation” of a public utility and “ownership” of the facilities and equipment used to serve the public. The right to operate a public utility may exist independently and separately from the ownership of the facilities thereof.

Question 55

Operation vs Ownership of facilities and equipment

Answer 55

A franchise is needed for the OPERATION of public utilities

It does not require a franchise for the OWNERSHIP of faculties needed to operate a public utility so long as it does not serve the public

Question 56

Prior Operator Rule

Answer 56

It is the rule allowing an existing franchise operator to invoke a preferential right within the authorized territory as long as he renders satisfactory and Economic service.

A public utility operator should be shielded from ruinous competition by affording him an opportunity to improve his equipment and service before allowing a new operator to serve in the same territory he covers.

Question 57

Prior Applicant Rule

Answer 57

This rule presupposes a situation when two interested persons apply for a CPC in the same community over which no person has as yet granted any certificate.

If it appears after hearing that both applicants are more or less equal, the applicant who applied first shall be granted the CPC.

Question 58

What prevails between the prior applicant and prior operator rules?

Answer 58

In case of conflict, the prior operator rule prevails as long as the operator is able to render satisfactory and economical service.

Question 59

Exceptions to the Prior Operator Rule

Answer 59

1. Public interest would be better served by the new operator.
2. Old operator failed to make an offer to meet the increase in traffic
3. CPC granted to new operator is a maiden certificate

Question 60

Kabit system and its consequences

Answer 60

An arrangement whereby a person who has been granted a CPC allows another who owns a motor vehicle to operate under his certificate for a fee.

Owner of CPC and the actual owner of the vehicle are solidarily liable for damages to third persons as a result of damage to the vehicle.

Question 61

Effects of the Kabit System

Answer 61

1. Transfer, sale lease or assignment of the privilege granted is valid between the contracting parties but not on to third persons
2. Registered owner is primarily liable for all the consequences flowing from the operators of the carrier
3. Registered owner cannot recover from the actual owner and the latter cannot obtain transfer of vehicle to himself, both being in pari delicto
4. Registered and actual owner are solidarily liable with the driver

Question 62

When is a contract of air carriage perfected?

Answer 62

When an airline issues a ticket to a passenger, that je is confirmed for a particular flight, at a certain time and date and for a particular accommodation.

Question 63

In a contract of air carriage, when does the obligation to exercise extraordinary diligence commence?

Answer 63

It commences when the baggage is placed in the possession of the air carrier and when the passenger is within the premises of the air carrier or after checking in for the flight.

Question 64

Procedure and Prescriptive Process under the Montreal Convention

Answer 64

Actions against the carrier will prescribe if it is not brought within 2 years from

1. the date of arrival of the air carrier at the destination or
2. it should have arrived
3. Date on which transportation stopped

In case of damage to baggage, a written complaint must be filed within 7 days from receipt thereof

In case of delay of delivery, within 21 days from receipt of the baggage

Question 65

COGSA

Liability for loss or damage to goods or injury

Answer 65

Goods - $20 per kilo unless a higher valuation is made. (Unchecked baggage, $400)

Death or injury to passengers. - Does not exceed $25,000.

Question 66

Where should an action be filed under MC99?

Answer 66

Plaintiff may bring an action before:

1. Court where the carrier is domiciled
2. The 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. The court of the place of destination
5. In cases of damage resulting from death or injury of a passenger, the territory of the State Party in which the passenger has his principal residence

Question 67

When does the Warsaw Convention/MC99 apply?

Answer 67

1. Death or injury to the passenger is on board, embarking and disembarking
2. Loss, destruction and damage to baggage during the carriage
3. Delay in flight

Question 68

Elements of Hijacking a PHILIPPINE aircraft (RA 6235)

Answer 68

1. An aircraft of Philippine Registry is in flight; and
2. The offender compels the aircraft to change its course or destination or seizes or usurps control thereof.

Question 69

Flight (RA 6235)

Answer 69

An aircraft is in flight from the moment all its external doors are closed following embarkation until any of such doors is opened for disembarkation.

Question 70

Hijacking of a FOREIGN aircraft (RA 6235)

Answer 70

Note that these are 2 separate offenses

1. Compelling an aircraft of foreign registry to land in PH territory
2. Seizing or usurping control of an aircraft of foreign registry when inside PH territory

Question 71

Qualifying Circumstances under RA 6235

Answer 71

1. Whenever he has fired upon the pilot, member of the crew or passenger of the aircraft;
2. Whenever he has exploded or attempted to explode any bomb or explosive to destroy the aircraft; or
3. Whenever the crime is accompanied by murder, homicide, serious physical injuries or rape.

Question 72

Shipping of explosive, flammable or poisonous substances in aircrafts

Answer 72

RA 6235

1. If in a passenger aircraft, it is prohibited
2. If in a cargo aircraft operating as a public utility is allowed if made in accordance with regulations issued by the Civil Aeronautics Administration

Question 73

Arrival Under Stress

Answer 73

CC
The arrival of the vessel at the nearest and most convenient port which was decided upon after determining that there is well-founded fear of:

1. Seizure
2. Pirates/Privateers
3. By Reason of any accident of the sea disabling it to navigate

Question 74

Determination of propriety of arrival under stress

Answer 74

1. The captain should determine during the voyage if there is well founded fear of seizure, privateers and other valid grounds
2. Captain assembles the officers
3. Captain shall summon persons interested in the cargo who may be present
4. Officers shall determine and agree if there is a well-founded reason after examining the circumstances. Captain shall have the deciding vote
5. Agreement shall be drafted and minutes be signed and entered into the book
6. Objections and protests shall also be entered.

Question 75

Protest during Arrival Under Stress

Answer 75

It is the duty of the captain to present himself when making a port in distress to the maritime authority if in PH or to a PH consul if outside the PH before 24 hours have elapsed

Make a statement of the name registry and port of departure of the vessel

Question 76

When is arrival under stress improper

Answer 76

Article 820

The arrival under stress shall not be considered legal in the following cases:

If the lack of provisions should arise from the failure to take the necessary provisions for the voyage, according to usage and custom, or if they should have been rendered useless or lost through bad stowage or negligence in their care.

If the risk of enemies, privateers, or pirates should not have been well known, manifest, and based on positive and justifiable facts.

If the injury to the vessel should have been caused by reason of her not being repaired, rigged, equipped, and arranged in a convenient manner for the voyage, or by reason of some erroneous order of the captain.

Whenever malice, negligence, want of foresight, or lack of skill on the part of the captain is the reason for the act causing the damage.