TRANSPORTATION LAW

GOVERNING LAWS ➢ Art. 1732 makes no distinction between one whose

principal business activity is the carrying of persons
Land Transportation or goods or both, and one who does such carrying
1. Common Carriers only as an ancillary activity (sideline).
1.1. New Civil Code (NCC) – primary ➢ It also avoids distinction between offering
1.2. Code of Commerce – suppletory transportation service on a regular or scheduled
2. Private Carriers basis, and on an occasional, episodic or unscheduled
2.1. Object is a merchandise basis.
2.1.1. Code of Commerce – primary ➢ Neither does it distinguish between a carrier offering
2.1.2. NCC – suppletory its services to the “general public” (general
2.2. Object is non-commercial community or population) and one who offers
2.2.1. Law on deposit – if object is property services only from a narrow segment of the
2.2.2. Law on contracts – if passenger population.
➢ A person or entity is a common carrier even if he did
Transportation by Sea not secure a Certificate of Public Convenience (De
1. Coastwise Guzman vs. CA, 168 SCRA 612)
1.1. NCC – primary ➢ It does not provide that the transportation should be
1.2. Code of Commerce – suppletory by motor vehicle.
1.3. Carriage of Goods by Sea Act (COGSA) does not ➢ Hence, a grantee of pipeline concession under the
apply even if the parties expressly provide for it Petroleum Act is considered a common carrier (First
2. Philippine port to foreign ports – law of the country of Phil. Industrial vs. CA, supra)
destination ➢ One is a common carrier even if he has no fixed and
3. Foreign ports to Philippine ports publicly known route, maintains no terminals, and
3.1. NCC – primary issues no tickets (Asia Lighterage Shipping vs. CA GR
3.2. Code of Commerce No. 147246, August 19, 2003)
3.3. COGSA ➢ A common carrier shall remain as such,
3.4. Philippine laws still apply even if the collision notwithstanding the charter of the whole or portion
actually takes place in foreign waters. of a vessel, provided the charter is limited to the ship
only, as in the case of a time or voyage charter.
Air Transportation ➢ It is only when the charter includes both the vessel
1. Domestic – NCC; Code of Commerce and its crew, as in a bareboat or demise, that a
2. International – Warsaw Convention common carrier becomes private (Planters Products
vs. CA, 226 SCRA 476)
COMMON CARRIERS ➢ A travel agency is not a common carrier. Its services
include procuring tickets and facilitating travel
➢ A person, corporation, firm or association, engaged in permits or visas as well as booking customers for
the business of carrying or transporting passengers or tours (Crisostomo vs. CA, GR No. 138334, Aug. 25,
goods or both, by land, water or air, for 2003)
compensation, offering their services to the public
(Art. 1732 NCC) Distinctions between a Common and a Private Carrier:

Tests: COMMON CARRIER PRIVATE CARRIER

1. He must be engaged in the business of carrying goods Holds himself out for Contracts with
for others as a public employment, and must hold all people particular individuals or
himself out as ready to engage in transportation of indiscriminately groups only
goods for persons generally as a business and not as a Extraordinary diligence Only ordinary diligence
casual occupation; is required is required
2. He must undertake to carry goods of a kind to which Subject to State Not subject to State
his business is confined; regulation regulation
3. He must undertake to carry by the method by which There is a presumption No presumption of fault
his business is conducted and over his established of fault or negligence or negligence
roads; and Exempting Exempting
4. The transportation must be for hire (First Phil. circumstances are circumstance is
Industrial vs. CA, 300 SCRA 661) proof of extraordinary fortuitous event
diligence and Art. 1734
Characteristics: NCC

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 Parties may not agree Parties may even 5. The transfer, sale, lease or assignment of the
on limiting the carrier’s exempt carrier’s privilege granted is valid between the
liability except when liability, provided it is contracting parties but not upon the public or
provided by law not contrary to law, third persons (Gelisan vs. Alday, 152 SCRA 388)
morals, good customs,
public order or public Exceptions to kabit system:
policy  When neither of the parties to the kabit system is
Governed by law on Governed by law on being held liable for damages.
common carriers obligations and  When the case arose from the negligence of another
contracts vehicle in using the public road to whom no
representation or misrepresntation as regards the
Registered Owner Rule ownership and operation of passenger jeepney was
➢ A registered owner of a vehicle (even if not used for made.
public service) is the lawful operator insofar as the  When the riding public was not bothered or
public and third persons are concerned; inconvenienced at the very least by the illegal
consequently, it is directly and primarily responsible arrangement. (Lim vs. CA, 373 SCRA 394)
for the consequences of its operation.
Boundary System (2005 Bar Exam)
1. In contemplation of the law, the owner/operator ➢ The driver pays for the gasoline consumed and does
of record is the employer of the driver, the not receive a fixed wage but gets only the excess of
actual operator and employer being considered the receipt of the fares collected by him over the
as merely its agent (Equitable Leasing Corp. vs. amount he has agreed to pay to the owner of the
Suyom, GR No. 143360. Sept. 5, 2002) vehicle
2. The registered owner cannot escape
responsibility by proving that a third person is ➢ The owner cannot escape liability:
the actual and real owner. He is liable to the 1. The owner is subsidiarily liable as employer in
injured party subject to his right of recourse accordance with Art. 103 RPC
against the transferee or buyer. 2. From the viewpoint of labor laws, he is an
a. The registered owner is liable even employee, being entitled to all privileges going
if the vehicle was leased to another along with the employer-employee relationship
(BA Finance Corp. vs. CA, 215 SCRA 715) 3. From the viewpoint of the NCC, the driver is a
b. It would be absurd to hold liable lessee because he pays a fixed amount of rental
the owner of a stolen vehicle for an accident for his use of the vehicle
caused by the person who stole the vehicle 4. From the viewpoint of the law on common
(Duavit vs. CA, 173 SCRA 490) carriers, he is an employee of the operator for
purpose of the latter’s liability to passengers
Kabit System
➢ A system whereby a person who has been granted a Arrastre Operator
certificate of public convenience allows other persons ➢ The legal relationship between the consignee and the
who own motor vehicles to operate under such arrastre operator is akin to that of a depositor and a
license, for a fee or a percentage of such earnings. It warehouseman. The relationship between the
is void under Art. 1409 NCC. consignee and the common carrier is similar to that
of the consignee and the arrastre operator. Hence,
➢ Effects: the duty of the arrastre operator to take care of the
1. The thrust of the law in enjoining the kabit goods that are in its custody and to deliver them in
system is to identify the person upon whom good condition to the consignee also devolves upon
responsibility may be fixed with the end in view the common carrier. Thus, the arrastre operator and
of protecting the riding public the common carrier are liable in solidum for the
2. The registered owner is primarily liable for all proper delivery of the goods to the consignee
the consequences of the operations of the (Eastern Shipping Lines v. CA, 234 SCRA 78)
carrier.
3. The registered owner cannot recover from the
actual owner and the latter cannot obtain
transfer of the vehicle to himself, both being in
pari delicto (Teja Marketing vs. IAC, 148 SCRA
347)
4. Both the registered owner and the actual owner
are solidarily liable with the driver (Zamboanga
Tranportation Co. vs. CA, 30 SCRA 717)

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 TOWAGE A vessel is hired to bring another the consignee. However, the parties may agree to
vessel to another place limit the liability of carrier (Lu Do vs. Binamira, 101
Phil. 120)
ARRASTRE A contract for unloading of goods
from a vessel. Defenses
Services are not maritime. They 1. Flood, storm, earthquake, lighting, or other natural
are in fact no different from disaster or calamity.(Caso Fortuito/Force Majeure)
those of a depositary or 2. Act of public enemy in war, whether international or
warehouseman. civil
STEVEDORING Loading and unloading of 3. Act or omission of shipper or owner of goods
coastwise vessels calling at the 4. Character of goods or defects in packing or in
port containers.
5. Order or act of competent authority (Art. 1734)
6. Stipulation limiting liability of carrier (Arts. 1744,
I. CARRIAGE OF GOODS 1448, 1749, 1750)

Extraordinary Diligence (1997, 2001, 2002 Bar Exams) Caso Fortuito/Force Majeure
➢ Common carriers, from the nature of their business 1. Must be proximate and only cause of loss
and for reasons of public policy, are bound to observe 2. Carrier must exercise due diligence to prevent or
extraordinary diligence in the vigilance over the minimize the loss before, during or after the disaster
goods and for the safety of passengers transported by (Art. 1739)
them, according to all circumstances of each case 3. Carrier not in delay in transporting the goods (Art.
(Art. 1733, NCC) 1740)

Presumption of Negligence ➢ Fire may not be considered a natural disaster

1. If the goods are lost, destroyed or deteriorated, (Eastern Shipping vs. IAC, 150 SCRA 463)
common carriers are presumed to have been at fault ➢ “Very rough seas and stormy weather” were not caso
or to have acted negligently (Art. 1735) fortuito, but normal occurences that an ocean-going
2. Mere proof of the delivery of goods in good order to a vessel, particularly in the month of September which,
common carrier and their arrival in bad order at their in our area, is a month of rains and heavy seas would
destination makes for a prima facie case against the encounter as a matter of routine (Eastern Shipping
carrier (Coastwise Lighterage Corp. vs. CA, 245 SCRA vs, CA, 196 SCRA 570)
796)
3. The court need not make an express finding of fault Acts of Public Enemy
or negligence, the law imposes liability upon common 1. Must be proximate and only cause of loss
carriers, as long as it is shown that: 2. Carrier must exercise due diligence to prevent or
a. There is a contract between the shipper and minimize loss before, during or after the act causing
common carrier loss, of goods (Art. 1739)
b. Loss or deterioration took place during the
existence of contract Contributory Negligence
➢ If shipper or owner merely contributed to the loss,
Duration of Liability the proximate cause thereof being the negligence of
Commencement: from the time the goods are carrier, the carrier shall still be liable for damages,
unconditionally placed in the possession of, and received but such shall be equitably reduced (Art. 1741)
by the carrier for transportation
Character of the Goods
Termination: actual or constructive delivery by the ➢ Even if damage caused by the inherent
carrier to the consignee or to the person who has the right defect/character of goods, the common carrier must
to receive them (Art. 1736) exercise due diligence to forestall or lessen loss (Art.
1742)
Liability remains: ➢ Carrier who, knowing the fact of improper packing of
1. Even when goods are temporarily unloaded or stored the goods upon ordinary observation, still accepts the
in transit unless the shipper or owner has made use of goods notwithstanding such condition is not relieved
the right of stoppage in transitu (Art. 1737) of liability for loss resulting therefrom (Southern
2. And when goods are stored in the carrier’s warehouse Lines, Inc. v. CA, 4 SCRA 258)
at the place of destination until the consignee has
been advised of the arrival thereof and had Order or Act of Public Authority
reasonable opportunity thereafter to remove or ➢ Public authority must have power to issue the order
dispose them (Art. 1738) (Art. 1743). Where the officer acts without legal
3. Delivery to the customs authorities is not delivery to process, the common carrier will be held liable.

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 5. Injurious to health
Stipulation Limiting Liability of Carrier 6. Goods will be exposed to untoward danger like flood,
➢ Common carrier and shipper may agree on carrier’s capture by enemies and the like
observance of diligence to a degree less than 7. Goods like livestock will be exposed to diseases
extraordinary, provided it be: 8. Strike
1. In writing, signed by shipper or owner; 9. Failure to tender goods in time
2. Supported by a valuable consideration other than
the service rendered by carriers; and Duty to Deliver Goods
3. Reasonable, just and not contrary to public ➢ Oft-Repeated Rule: In the absence of a special
policy. (Art. 1744) contract, a carrier is not an insurer against delay in
transportation of goods
Valid Stipulations: ➢ Consequences of Delay:
1. Carrier's liability limited to the value of goods 1. A natural disaster shall not free carrier from
appearing in the bill of lading, unless the shipper responsibility (Art. 1740)
or owner declares a greater value. (Art. 1749) 2. Contract limiting carrier's liability cannot be
2. Fixing the sum to be recovered by the owner or availed of in case of loss of goods (Art. 1747)
shipper, if it is reasonable and just under the 3. Excusable delays in carriage suspend, but do not
circumstances and has been fairly and freely generally terminate, the contract of carriage,
agreed upon. (Art. 1750) and when the cause is removed, the master must
3. Limiting carrier’s liability for delay on account of proceed with the voyage and make delivery
strikes or riots. (Art. 1748) 4. During delay the vessel continues to be liable as
a common carrier, not as a warehouseman, and
Invalid Stipulations: remains duty bound to exercise extraordinary
1. Goods are transported at the risk of the owner or diligence
shipper; 5. Payment of indemnity:
2. Carrier will not be liable for any loss of goods; a. Stipulated in bill of lading
3. Carrier need not observe any diligence in the b. If no indemnity stipulated, then carrier shall
custody of goods; be liable for damages incurred due to delay
4. Carrier shall exercise a degree of diligence less 6. Consignee may:
than that of a good father of a family; a. Leave goods transported in the hands of
5. Carrier shall not be responsible for the acts or carrier (Abandonment) advising him thereof
omissions of his or its employees; in writing before their arrival at the point of
6. Carrier’s liability for acts committed by thieves destination. The carrier shall pay the full
or robbers who do not act with grave or value of goods as if they had been lost or
irresistible threat, violence or force is dispensed mislaid.
with or diminished; b. If no abandonment was made
7. Carrier not responsible for the loss of goods on indemnification shall not exceed the current
account of defective condition of car, vehicle, price of goods at the time it should have
ship or other equipment used in the contract of been delivered
carriage. (Art. 1745)
II. CARRIAGE OF PASSENGERS
Effect of Delay
➢ If, without just cause, (1) delays the transportation of Not Passengers:
goods or (2) changes the stipulated or usual route, 1. One who has boarded by fraud, stealth or deceit
the contract limiting the common carrier's liability 2. Rides any part of the vehicle unsuitable or dangerous
cannot be availed of in case of loss of goods (Art. or which he knows is not designated or intended for
1747) passengers
3. Remains on a carrier for an unreasonable length of
Presumption despite stipulation time after he has been afforded every safe
➢ Even when there is an agreement limiting the opportunity to alight
liability, the common carrier is disputably presumed
to have been negligent in case of their loss. (Art. Utmost Diligence
1752) ➢ A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide,
Grounds for valid refusal to accept goods: using the utmost diligence of very cautious persons,
1. Dangerous objects or substances including dynamites with a due regard for all the circumstances (Art.
and other explosives 1755)
2. Unfit for transportation
3. Acceptance would result in overloading BAR QUESTION (Q): X, an 80-year old epileptic,
4. Contrabands or illegal goods boarded the S/S Tamaraw in Manila going to

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 Mindoro. To disembark, the passengers have to b. The cause of accident is better known to the
walk thru a gang plank. While negotiating the gang carrier than the passenger; and
plank, X slipped and fell into the waters. X was c. The accident could not have happened if due
saved from drowning, brought to a hospital but care was exercised by the carrier
after a month, died from pneumonia. Except for X, 2. The court need not make an express finding of fault
all the passengers were able to walk thru the gang or negligence of the common carrier to hold it liable
plank. What is the liability of the owner of S/S
Tamaraw? Liability for Acts of Employees
SUGGESTED ANSWER (SA): The owner of S/S 1. Common carriers are liable for the death of or
Tamaraw is liable for the death of X in failing to injuries to passengers through the negligence or
exercise utmost diligence in the safety of willful acts of the former’s employees, although:
passengers. Evidently, the carrier did not take the a. Such employees may have acted beyond the
necessary precautions in ensuring the safety of scope of their authority or
passengers in the boarding of and disembarking b. In violation of the orders of common carriers
from the vessel. Unless shown to the contrary, a (Art. 1759)
common carrier is presumed to have been negligen 2. Not a defense:
tin cases of death or injury to its passengers (Arts. a. Proof of exercise of diligence of a good father of
1755-1756, NCC). Since X has not completely a family in the selection and supervision of
disembarked yet, the obligation of the shipowner employees (Ibid)
to exercise utmost diligence still then subsisted b. Cannot be eliminated or limited by stipulation,
and he can still be held liable. posting of notices, statements on the tickets or
otherwise (Art. 1760)
Duration of Liability 3. Liability of carrier for the personal violence of its
➢ Commencement: From the moment the person who employees or agents upon its passengers extends only
purchases the ticket (or token or card) presents to those acts that the carrier could foresee or avoid
himself at the proper place and in a proper manner to through the exercise of the degree of diligence
be transported with a bona fide intent to ride the required.
coach (Vda. De Nunca vs. Manila Railroad Co., 13 4. Diligence in the selection and supervision of
SCRA 249) employees under Art. 2180 NCC cannot be interposed
by the common carrier to prevent damages because
➢ Termination: Until the passenger has, after reaching the liability of the carriers arises from the breach of
his destination, (1) safely alighted; or (2) had a the contract of carriage. The defense under Art. 2180
reasonable opportunity to leave the carrier’s is applicable to negligence in quasi-delicts (Del Prado
premises v. Manila Electric Co., 52 Phil 900)

➢ Liability remains:
1. Not only during the course of the trip, but for so Liability for Acts of Strangers or other Passengers
long as the passengers are within its premises 1. A common carrier is responsible for injuries suffered
and where they ought to be in pursuance to the by a passenger on account of the willful acts or
contract of carriage (LRTA vs. Navidad) negligence of other passengers or of strangers, if the
2. Includes reasonable time to remain on the common carrier’s employees, through the exercise of
premises to see after his baggage and prepare for the diligence of a good father of a family could have
his departure (La Mallorca vs. CA, 17 SCRA 739) prevented or stopped the act or omission (Art. 1763)
3. Extends to persons boarding the cars as well as to 2. The carrier is liable when its personnel allowed a
those alighting therefrom. It is the duty of passenger to drive the vehicle causing it to collide
common carriers to stop their conveyances a with another vehicle resulting to the injuries suffered
reasonable length of time to afford passengers an by the other passengers (MRR v. Ballesteros, 16 SCRA
opportunity to enter (Dangwa Trans Co. vs. CA, 641)
202 SCRA 574)
Effect of Stipulation on Liability
Presumption of Negligence ➢ General Rule: Liability cannot be dispensed with or
1. In case of death of or injury to passengers, common lessened by stipulation, posting of notices,
carriers are presumed to have been at fault or to statements on tickets or otherwise (Art. 1757)
have acted negligently (Art. 1756 NCC). This provision
applies the doctrine of res ipsa loquitor for several ➢ Exception: When a passenger is carried gratuitously, a
reasons: stipulation limiting the common carrier’s liability for
a. The contract imposes on the carrier the negligence is valid
obligation to transport the passengers safely,
hence the burden of explaining should fall on the ➢ Exception to the exception: Willful acts or gross
carrier; negligence (Art. 1758)

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 consignees) undertake specific responsibilities and
Passenger’s Hand-carried Baggage assume stipulated obligations.
3. A legal evidence of the contract between the shipper
HAND-CARRIED CHECKED-IN and the carrier. Its contents shall decide all disputes
(In custody of passengers (In custody of the which may arise with regard to their execution and
or their employees) carrier) fulfillment. (Magellan Manufacturing v. CA, 201 SCRA
Necessary deposit Considered as goods 2021)
Common carrier Requires extraordinary ➢ In the absence of a bill of lading, their respective
exercises diligence of a diligence claims may be determined by legal proofs which each
depositary (ordinary of the contracting parties may present in conformity
diligence) with law.
Governed by Arts. 1998 Governed by Arts. 1733-
and 2000-2003 1753 Obligations of the Carrier
1. Duty to Accept Goods – see notes on Common Carriers
for ground for valid refusal to accept goods
III. ACTIONS 2. Duty to Deliver Goods to (i) person indicated in bill of
lading; or (ii) any person to whom bill of lading was
Causes of Action: validly transferred or negotiated
1. Culpa Contractual 3. see notes on Common Carriers for effects of delay
The liability of the carrier is not merely 4. Duty to exercise extraordinary diligence
subsidiary or secondary but direct, immediate
and primary. (Medina vs. Cresencia, 99 Phil. 506) Right of Consignee to Abandon the Goods
Only the carrier is primarily liable and not the 1. Partial non-delivery, where goods are useless with
driver, because there is no privity between the others (Art. 363 Code of Commerce)
driver and the passenger. 2. Goods rendered useless for sale or consumption for
No defense of due diligence in the selection and purposes for which they are properly destined (Art.
supervision of employees. (Art. 1759) 365)
3. In case of delay through the fault of carrier (Art. 371)
2. Culpa Aquiliana
The carrier and driver are solidarily liable as Notice of Damage
joint tortfeasors. ➢ Condition precedent
Defense of due diligence in the selection and ➢ Damage apparent – immediately upon delivery
supervision of employees is available. Except: ➢ Damage not apparent – within 24 hours from delivery
maritime tort resulting in collision (Art. 366)
3. Culpa Delictual
The driver is primarily liable. The carrier is Prescriptive Period
subsidiarily liable only if the driver is convicted 1. Not provided by Art. 366, hence NCC applies
and declared insolvent (Art. 100 RPC) 2. No bill of lading – within 6 years
3. With bill of lading – 10 years
OVERLAND TRANSPORTATION
ART. 366 COGSA
Scope: CODE OF COMMERCE
1. Domestic land and water/maritime transportation Notice of damage is a Notice of damage not a
2. Domestic air transportation condition precedent condition precedent
24-hour period for non- 3-day period for non-
Bill of lading apparent damage apparent damage
➢ Written acknowledgment of receipt of goods and No prescriptive period 1-year period
agreement to transport them to a specific place to a provided. NCC applies
person named or to his order. Does not cover Also does not cover
misdelivery or delay misdelivery or delay
Note: It is not indispensable for the creation of a Extrajudicial demand Extrajudicial demand
contract of carriage. The contract itself arises from tolls prescriptive period does not toll prescriptive
the moment goods are delivered by the shipper to the period
carrier and the carrier agrees to carry them Parties can stipulate 1-year period cannot be
(Compania Maritima v. Insurance Company of North shorter period shortened
America, 12 SCRA 213)

Functions:
1. A receipt for the goods shipped.
2. A contract which the three parties (shipper, carrier,

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MARITIME LAW 7. May be made to be exempted from the following
liabilities:
Characteristics: a. Civil liability to third persons arising from the
1. Real conduct of the captain in the vigilance over the
a. Similar to transactions over real property with goods
respect to effectivity against third persons which b. Proportionate contribution of co-owners of the
is done through registration vessel to a common fund for the results of the
b. Evidence of real nature is shown by (1) limitation acts of the captain referred to in Art. 587 Code
of liability of agents to actual value of the vessel of Commerce
and freight money; and (2) right to retain cargo c. Civil liability incurred by the ship owner in case
and embargo and detention of vessel (Luzon of collision
Stevedoring Corp v. CA, 156 SCRA 169)
2. Hypothecary Admiralty Jurisdiction
➢ Liability of owner of vessel is limited to the value ➢ all actions in admiralty and maritime jurisdiction
of vessel (Doctrine of Limited Liability) where the claim exceeds P300,000 or in Metro Manila,
exceeds P400,000 the RTC has jurisdiction (Sec. 19(3)
BP 129, as amended by RA 7691)
I. DOCTRINE OF LIMITED LIABILITY
II. VESSELS
“No vessel, no liability”
➢ The liability of ship owners is limited to the amount ➢ Engaged in navigation, whether coastwise or on the
of interest in said vessel such that where vessel is high seas, including floating docks, pontoons,
entirely lost, the obligation is extinguished (Luzon dredges, scows and any other floating apparatus
Stevedoring v. Escano, 156 SCRA 169) destined for the services of the industry or maritime
➢ Interest extends to: commerce. Excluded are local and foreign military
1. Vessel itself vessels, bancas and other watercrafts of less than 3
2. Equipments tons gross capacity and small watercrafts engaged in
3. Freightage river and bay traffic.
4. Insurance proceeds (Chua v. IAC, 166 SCRA 183)
Ownership
Exceptions: 1. Acquisition
1. Where injury or damage is due to ship owner’s fault a. Prescription – (1) acquisition must appear in a
2. Vessel is insured written instrument, (2) which shall not produce
3. Claims under Workmen’s Compensation any effect to third persons if not inscribed in the
4. Expenses for repair on vessel before loss registry of vessels and (3) shall be acquired by
5. Vessel is not abandoned possession in good faith, continued for 3 years,
6. Voyage is not maritime but only in a river or gulf (4) with a just title duly recorded. (5) In the
absence of any of these, continuous possession
Abandonment for 10 years shall be necessary to acquire
1. Indispensable requirement before the shipowner or ownership.
ship agent can enjoy the benefits of the limited
liability principle. The only instance where such b. Sale
abandonment is dispensed with is when the vessel ➢ If made while it is on voyage – the freightage
was entirely lost. which it earns from the time it receives its last
2. Only the ship owner and the ship agent can make an cargo shall pertain entirely to the purchaser,
abandonment and the payment of the crew and other
3. What may be abandoned – vessel persons who make up its complement shall be
4. Instances: for his account.
a. Civil liability from indemnities to third persons ➢ If made after vessel arrived at port of its
(Art. 587 Code of Commerce) destination – freightage shall pertain to the
b. Leakage of at least ¾ of contents of cargo vendor, and the payment of the crew and
containing liquids (Art. 687) other individuals who make up its complement
c. Constructive loss of vessel (Sec. 138 Insurance shall be for his account, unless the contrary is
Code) stipulated in either case.
➢ See notes on Overland Transportation for right
of consignee to abandon goods 2. Registration – through the Maritime Industry Authority
5. No procedure to be followed (MARINA)
6. No prescriptive period provided not estopped from
invoking the same or do acts inconsistent with Ship’s Manifest - Declaration of the entire cargo. The
abandonment object is to furnish customs officers with a list to check

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against, to inform the revenue officers what goods are
brought into a port of the country on a vessel. Hence, the IV. CHARTER PARTY
requirement that a vessel must carry a manifest is not
complied with even if a bill of lading can be presented ➢ Contract by which an entire ship, or some principal
part thereof is let by the owner to another person for
➢ A bill of lading is just a declaration of a specific cargo a specified time or use for the conveyance of goods,
rather than the entire cargo. It is issued as a matter in consideration of the payment of freight (Caltex
of convenience by virtue of a contract. Phils. vs. Sulpicio Lines, 315 SCRA 709)

III. PARTIES LEASE CHARTER PARTY

If for a definite Charterer may rescind
1. Ship-owners and ship agents period, lessee cannot charter party by
2. Captains and masters of the vessel give up lease by paying half of
3. Officers and crew of the vessel paying a portion of the freightage agreed
4. Supercargoes amount agreed upon upon
If the leased property The new owner is not
Shipowners and Ship Agents is sold to one who compelled to respect
➢ Liabilities: knows of the existence the charter party so
1. Acts of the captain (Art. 618) of the lease, the new long as he can load
2. Contracts of the captain, whether authorized or owner must respect the vessel with his
not, to repair, equip and provision the vessel, the lease own cargo
provided that the amount claimed was invested
for the benefit of the vessel (Art. 586) Classes:
3. Indemnities in favor of third persons which may 1. Bareboat or Demise Charter
arise from the conduct of the captain in the care ➢ Charterer provides crew, food and fuel. The
of the goods which the vessel carried, as well as charterer is liable as if he were the owner,
for the safety of the passengers transported except when such arises from the unworthiness
4. Damages to the goods loaded on the vessel of the vessel
without prejudice to their right to free ➢ Owner pro hac vice – a demise charterer, in spite
themselves from liability by abandoning the of the fact that somebody else is the owner of
vessel to the creditors (Art. 587) the vessel, is treated as the owner of the
chartered vessel, just for that one particular
Notes: purpose only.
➢ Liable jointly and severally Effect: charterer assumes customary rights and
➢ Not liable for an obligation contracted by the captain liabilities of the ship-owner to third persons and
in excess of the latter’s powers and privileges is held liable for the expense of the voyage and
pertaining to him. However, if the amount claimed the wages of the seamen
were used for the benefit of the vessel, the ship
owner or ship agent is liable 2. Contract of Affreightment
➢ Owner leases the boat or part of it for the
Captains and Masters of Vessels carriage of goods
1. Time charter – vessel is chartered for a
➢ Nature of Position period of time or duration of voyage
1. General agent of the ship-owner 2. Voyage or trip charter – contract for hire of
2. Technical director of the vessel vessel for one or series of voyages
3. Representative of the government of the country
under whose flag he navigates BAREBOAT / DEMISE AFFREIGHTMENT
Charterer becomes liable Owner remains liable as
➢ Qualifications: to others caused by its carrier and must
1. Filipino citizen negligence answer for any breach
2. Legal capacity to contract of duty
3. must have passed the required physical and
Charterer regarded as Charterer is not
mental examinations required for licensing him
owner pro hac vice for regarded as owner
as such (Art. 609)
the voyage
Owner of vessel Owner retains
➢ Supercargoes - Persons who discharge administrative
relinquishes possession, possession, command
duties assigned to him by ship agent or shippers,
command and navigation and navigation of the
keeping an account and record of transaction as
to charterer ship
required in the accounting book of the captain (Art.
Common carrier becomes Common carrier
649)
private remains as such

8 Excellence. Superiority. Loyalty. Service.

Freight – Parties may fix the manner or form in which the Exceptions to the Hypothecary Nature:
charter price shall be satisfied 1. Loss due to inherent defect
2. Loss due to the barratry on the part of the captain
Lay days – period when vessel will be delayed in the port 3. Loss due to the fault of malice of the borrower
for loading and unloading 4. Vessel was engaged in contraband
5. Cargo loaded on the vessel be different in form that
Primage – bonus to be paid to the captain after the agreed upon
successful voyage
When Bottomry/Respondentia Regarded as Simple Loan
Deadfreight – where the charterer failed to occupy the 1. Lender loaned an amount larger than the value of the
leased portion of the vessel, he may thereby be made object due to fraudulent means employed by
liable by the ship-owner borrower (Art. 726)
2. Full amount of the loan is not used for the cargo or
Demurrage – sum due, by express contract, for the given on the goods if all of them could not have been
detention of the vessel, in loading and unloading, beyond loaded, the balance will be considered a simple loan
the time allowed in the contract of affreightment, and to (Art. 727)
any other improper detention or delay beyond the time 3. If the effects on which the money is taken is not
set for loading subjected to any risk (Art. 729)

BOTTOMRY/ ORDINARY LOAN

V. BOTTOMRY AND RESPONDENTIA RESPONDENTIA
May or may not have a Must have collateral
Bottomry – loan made by ship-owner or ship agent collateral
guaranteed by the vessel itself and repayable upon arrival Collateral may be any Must be vessel or cargo
of vessel at destination (Art. 719) property subject to maritime risks
Absolutely repayable Depends upon the safe
Respondentia – loan, taken on security of the cargo laden arrival of the collateral
on a vessel, and repayable upon safe arrival of cargo at at the port
destination (Art. 719) Need not be in writing Must be in writing
but interest shall not be
Common Requisites: due unless expressly
1. Borrows money for use, equipment or repair of vessel stipulated in writing
2. For a definite term Need not be registered Must be recorded in the
3. With extraordinary interest called premium to bind third persons registry of vessels of the
4. Secured by pledge of vessel or portion thereof (in port of registry of the
bottomry) or goods (respondentia) vessel
5. Loan repayment depends or conditioned on the safe Loss of collateral does Loss of collateral
arrival of the vessel (bottomry) or goods not extinguish the loan extinguishes the same
(respondentia)
6. Obligation to repay extinguished if vessel is lost due
to specific marine perils in the course or voyage
within a limited time, or if pledged goods are lost
VI. ACCIDENTS
Formal Requirements:
1. Averages
1. By means of public instrument
2. Collision
2. Policy signed by the contracting parties and the
3. Arrival Under Stress
broker taking part therein
4. Shipwreck
3. Private instrument
Protest– written statement by the master of a vessel or
Who may contract:
any authorized officer, attested by proper officer or a
➢ Bottomry – ship owner or ship agent. Outside of the
notary, to the effect that damages has been suffered by
residence of the owners, the captain.
the ship.
➢ Respondentia – only the owner of the cargo, except:
(i) on the portion of the vessel he owns, provided no
➢ Required in the following instances:
money has been previously borrowed on the whole
1. Vessel makes an arrival under stress
vessel, nor exists any other kind of lien or obligation
2. Vessel is shipwrecked
chargeable against her; (ii) when he is permitted to
3. Vessel has gone through hurricane or the captain
do so, he must necessarily state what interest he has has suffered damages or averages
in the vessel 4. Maritime collisions

9 Excellence. Superiority. Loyalty. Service.

 not be entitled to reimbursement because there is
Note: Should be made within 24 hours following the violation of the Y-A Rules
arrival of the vessel at the first port. Upon arrival at 3. Coastwise shipping – must always contribute to
the place of destination, the captain shall ratify the general average and if jettisoned would be entitled
protest within 24 hours. to reimbursement

Averages Collision – Impact of two vessels both of which are moving

1. An extra-ordinary or accidental expense incurred
during the voyage in order to preserve the cargo, Allision - Impact between a moving vessel and a
vessel or both; and stationary one
2. All damages or deterioration suffered by the vessel
from departure to the port of destination, and to the ➢ Zones of Time in the Collision of vessels:
cargo from the port of loading to the port 1. First zone - all time up to the moment when risk
consignment (Art. 806) of collision begins
2. Second zone - time between moment when risk
Classes of Averages of collision begins and moment it becomes a
1. Particular or Simple Average practical certainty;
(i) Damage or expenses caused to the vessel or cargo 3. Third zone - time when collision is certain and
that did not inure to common benefit, and (ii) borne time of impact
by respective owners (Art. 809)
2. Gross or General Average ➢ Error in Extremis – sudden movement made by a
2.1. Damage or expenses deliberately caused in order faultless vessel during the third zone of collision with
to save the vessel, its cargo or both from real another vessel which is at fault during the second
and known risk (Art. 811) zone. Even if such sudden movement is wrong, no
All the persons having an interest in the vessel responsibility will fall on said faultless vessel (Urrutia
and the cargo therein at the time of the and Co. v. Baco River Plantation, 26 Phil. 632)
occurrence of the average shall contribute to
satisfy this average (Art. 812) Cases Covered:
Requisites: 1. One vessel at fault – such vessel is liable for
2.3.1. Common danger present damage caused to innocent vessel as well as
2.3.2. Arising from accidents of sea, disposition damages suffered by the owners of cargo of both
of authority vessels
2.3.3. Peril imminent and ascertained 2. Both vessels at fault – each vessel must bear its
2.3.4. Part of vessel or cargo deliberately own loss, but the shippers of both vessels may go
sacrificed against the ship owners who will be solidarily
2.3.5. Intended to save vessel or cargo or both liable
2.3.6. Successful saving of vessel or cargo 3. Vessel at fault not known
2.3.7. Proper legal steps and authority taken Doctrine of “Inscrutable Fault” (1997 Bar Exam)
Procedure for recovery: ➢ In case of collision where it cannot be
There must be an assembly of the sailing mate determined which between the two vessels
and other officers with the captain was at fault, both vessels bear their
including those with interests in the cargo respective damage, but both should be
Resolution of the captain solidarily liable for damage to the cargo of
The resolution must be entered in the logbook, both vessels.
with reasons and motives and the votes for 4. Third vessel at fault – same rule as (1)
and against the resolution 5. Fortuitous event – each bears its own loss
2.4.5. The minutes shall be signed by the parties
2.4.6. The captain shall deliver a copy of the Procedure:
minutes to the maritime judicial authority 1. Protest should be made within 24 hours before
of the first port he may make, within 24 the competent authority at the point of collision
hours after his arrival, and to ratify it or at the first port of arrival, if in the Philippines
immediately under oath (Art. 813-814) and to the Philippine consul, if the collision took
place abroad (Art. 835)
York-Antwerp Rules: Liability for contribution on 2. Injuries to persons and damage to cargo of
averages: owners not on board on collision time need not
1. Deck cargo is permitted in coastwise shipping but be protested (Art. 836)
prohibited in overseas shipping
2. Overseas trade – must always contribute to general Arrival under Stress
average, but should the same be jettisoned, it would ➢ Arrival of a vessel at a port of destination on account
of lack of provision, well-founded fear of seizure,

10 Excellence. Superiority. Loyalty. Service.

 pirates, or accidents of sea disabling navigation (Art. ➢ Derelict – Ship or her cargo which is abandoned and
819) deserted at sea by those who were in charge of it,
without any hope of recovering it, or without any
➢ When Not Lawful: intention of returning to it
1. Lack of provisions due to negligence to carry
according to usage and customs ➢ Requisites for Salvage Award:
2. Risk of enemy not well known or manifest 1. Valid object of salvage
3. Defect of vessel due to improper repair; and 2. Exposed to marine peril
4. Malice, negligence, lack of foresight or skill of 3. Voluntary salvage services
captain (Art. 820) 4. Success in whole or in part, or that services
contributed to success
➢ Who Bears Expenses:
1. The ship-owner or ship agent except for damages ➢ Rules on Salvage Award
caused by the shippers by reason of a lawful 1. Fixed by RTC in the absence of agreement or
arrival (Art. 821) where the latter is excessive (Sec. 9)
2. The captain shall be liable for damages caused by 2. If sold (no claim being made within 3 months
his delay, if after the cause of the arrival under from publication)
stress has ceased, he continues the voyage (Art. a. Proceeds, after deducting expenses and the
825) salvage claim, shall go to the owner
b. If he does not claim it within 3 years, 50% of
➢ Procedure: the said proceeds shall go to the salvors, and
1. Captain determines during the voyage if there is the other half to the government (Secs. 11-
well founded fear of seizure, privateers and 12)
other valid grounds 3. If a vessel is the salvor, the reward shall be
2. He shall then assemble the officers distributed as follows:
3. He shall summon the persons interested in the a. 50% to ship owner
cargo who may be present and who may attempt b. 25% to captain
but without right to vote c. 25% to officers and crew in proportion to
4. The officers determine and agree if there is well their salaries (Sec. 13)
founded reason after examining the
circumstances. The captain shall have the ➢ Persons Without Right to a Salvage Reward:
deciding vote 1. Crew of the vessel saved
5. The agreement shall be drafted and the proper 2. Persons who commenced salvage in spite of
minutes shall be signed and entered in the log opposition of the captain or his representative
book 3. Person who fails to deliver a salvaged vessel or
6. Objections and protests shall likewise entered in cargo to the Collector of Customs (Sec. 3)
the minutes
➢ Towage - contract whereby one vessel, usually
Shipwreck motorized, pulls another from one place to another,
➢ Denotes all types of loss/ wreck of a vessel at sea for compensation. It is a contract for services rather
either by being swallowed up by the waves, by than a contract of carriage.
running against another vessel or thing at sea or on
coast where the vessel is rendered incapable of SALVAGE TOWAGE
navigation Governed by special law Governed by NCC on
(Act No. 2616) contract of lease
Requires success, Success not required
SALVAGE LAW (Act 2616) otherwise no payment
Must be done with the Only the consent of the
➢ Salvage - Compensation allowed to persons by whose consent of the tugboat owner is needed
voluntary assistance a ship at sea or her cargo or both captain/crewmen
have been saved in whole or in part from an Vessel must be involved Vessel need not be
impending or actual peril, shipwrecks, derelicts or in an accident involved in an accident
recapture Fees distributed among Fees belong to the
- Services one person render to the owner of a crewmen tugboat owner
ship or goods, by his own labor, preserving the goods Salvor takes possession Tower has no possessory
or the ship which the owner or those entrusted with and may retain lien; only an action for
the care of them have either abandoned in distress at possession until paid sum of money
sea, or are unable to protect or secure Court can reduce amount Court cannot change
of renumeration if amount in towage even
unconscionable if unconscionable

11 Excellence. Superiority. Loyalty. Service.

 Contrary agreement between parties
4. Delivery to the wrong person – prescriptive
CARRIAGE OF GOODS BY SEA ACT (CA 65) period is (i) 10 years because there is a breach of
contract, or (ii) 4 years for quasi-delict (Ang v.
➢ Requisites: American SS Agencies (19 SCRA 631)
1. Contracts for carriage of goods ▪ Delay or late delivery are not the damage or
2. By sea loss contemplated under the COGSA. The goods
3. To and from Philippine ports are not actually lost or damaged. The
4. In foreign trade applicable period is 10 years (Mitsui vs. CA 287
SCRA 366)
➢ Shipper guarantees at time of shipment the accuracy
of marks, number quantity and weight as furnished by ➢ Liability under COGSA:
him. He shall indemnify the carrier against all loss, 1. Maximum of $500 per package or, if not shipped
damages and expenses arising from inaccuracies in in packages, per customary freight unit (e.g.
such particulars metric ton)
2. Nature and value of goods may be declared by
➢ To recover loss or damage to cargo, notice and shipper and inserted in bill of lading; declaration
general nature thereof in writing must be given by is prima facie evidence and not conclusive on
the shipper or consignee to the carrier or his agent at carrier
the port of discharge or at the time of removal of the 3. Shipper and carrier may agree on another
goods maximum amount, but not more than the amount
1. If loss/damage not apparent – within 3 days from of damage actually sustained
delivery
2. May be endorsed upon receipt for the goods ➢ No Liability under COGSA:
given by the person taking delivery thereof 1. Nature or value of goods knowingly and
3. Need not be given if the state of goods at the fraudulently misstated by shipper
time of their receipt has been the subject of 2. Damage resulted from dangerous nature of
joint inspection shipment loaded without consent of carrier
3. Unseaworthiness not due to negligence of carrier
➢ Prescriptive Periods: 4. Deviation was to save life or property at sea
1. To give notice if loss or damage is apparent –
notice in writing must be given to carrier or SHIP MORTGAGE DECREE
agent at time of removal of goods by persons
entitled to delivery. Purpose: To accelerate the growth and development of
2. To give notice if not apparent – within 3 days the shipping industry in the Philippines and to finance the
from delivery. acquisition, construction, purchase or initial operation of
3. To bring suits – 1 year after delivery or when vessels
goods should have been delivered a suit must be
filed (whether notice of loss/damage is given), Salient Features: Recognizes the creation of preferred
otherwise prescribed. mortgage that must be satisfied prior to all other claims
Stipulation reducing the 1 year period is null and it allows for the arrest of the vessel which in effect
and void, but a written agreement to treats the vessel itself as the defendant in an action
suspend it is valid (Maritime Company of the
Philippines vs. CA, 164 SCRA 593) ➢ Preferred Mortgage Lien - One constituted for the
An extra-judicial demand does not suspend financing, acquisition, purchase, construction and
the period initial operation of vessels under the provisions of PD
An insurer who is exercising its right of 1521
subrogation is also bound by the 1-year
period (Fil. Merchants vs. Alejandro 145 Requisites
SCRA 42). It does not apply to a claim 1. Recorded in MARINA
against the insurer for the insurance 2. Affidavit of good faith
proceeds. The claim against the insurer is 3. Mortgage does not stipulate the waiver of
based on contract that expires in 10 years preferred status of claim
(Mayer Steel Pipe Corp. vs. CA 274 SCRA 4. Mortgage must be valid
432) 5. Mortgage includes the whole vessel of
If there is no delivery in case of undelivered domestic ownership
or lost cargo the one-year period starts to If Vessel is of Foreign Ownership – it will be
run from the day the vessel left port recognized if:
When interrupted 1. Mortgage, hypothecation or similar charge
Action is filed in court has been duly and validly executed in

12 Excellence. Superiority. Loyalty. Service.

 accordance with the laws of the country 3. Delay in the transportation of passengers,
under which the vessel is documented luggage or goods (Art. 19)
2. Same has been duly registered in accordance
with such laws in a public register – either at Note: The Hague Protocol amended the Warsaw
the port of registry of vessel or at a central Convention by removing the provision that if the
office airline took all necessary steps to avoid the damage,
it could exculpate itself completely (Art. 20(1))
➢ Claims Preferred Over a Preferred Mortgage Lien: (Alitalia v. IAC, 192 SCRA 9)
1. Taxes
2. Judicial costs ➢ Action for Damages
3. Pilotage and tonnage charges and other sea and 1. Condition precedent
port charges 1.1. Written complaint (protest) must me made:
4. Salaries of depositaries and keepers of vessel 1.1.1. Damage to baggage – 3 days from
5. Captain and crew’s wages receipt
6. General average 1.1.2. Damage to goods – 7 days from receipt
7. Salvage 1.1.3. Delay – 14 days from receipt
8. Prior maritime liens 1.2. Otherwise the action is barred except in case
9. Damages arising out of tort of fraud on the part of the carrier (Art. 26)
10. Prior preferred mortgage lien 2. Jurisdiction – governed by domestic law
3. Venue – at the option of the plaintiff:
WARSAW CONVENTION OF 1929 3.1. Court of domicile of carrier
3.2. Its principal place of business
Scope: 3.3. Where it has a place of business through
1. International transport by air which the contract has been made
2. Transport of persons, baggage, or goods 3.4. Place of destination (Art. 28)
Note: The above enumeration cannot be
Note: Warsaw Convention prevails over the Civil waived, but are jurisdictional in nature
Code, Rules of Court and all laws in the Philippines (Santos III vs. Northwest Orient Airlines 210
since an international law prevails over general law. SCRA 256)
4. Prescriptive period – 2 years from:
➢ International Transportation by Air – any 4.1. Arrival at the destination
transportation in which the place of departure and 4.2. Expected arrival
the place of destination are situated either: 4.3. Date the transportation stopped (Art. 29)
1. Within the territories of two High Contracting 5. Rule in case of various successive carriers
Parties regardless of whether or not there be a 5.1. In case of transportation of passengers –
break in the transportation or transshipment action is filed only against the carrier in
2. Within the territory of a single High Contracting which the accident or delay occurred unless
Party, if there is an agreed stopping place within there is an agreement whereby the first
a territory subject to the sovereignty, mandate carrier assumed liability for the whole
or authority of another power, even though that journey.
power is not a party to the Convention (“round 5.2. Transportation of baggage or goods
trip”) 5.2.1. Consignor can file an action against
the first carrier and the carrier in
Note: Absence of agreement concerning stopping which the damage occurred
place – transportation not deemed international for 5.2.2. Consignee can file an action against
purposes of the WC the last carrier and the carrier in
which the damage occurred
➢ When Not Applicable: 5.2.3. These carriers are jointly and
1. If there is willful misconduct on the part of the severally liable (Art. 30)
carrier’s employees (PAL v. CA, 257 SCRA 33). ➢ Limit of Liability
2. When it contradicts public policy 1. Passengers – $10,000 to $100,000
3. If requirements under WC are not complied with except: agreement to a higher limit
2. Checked-in baggage – $20 / kg
➢ Liability of Air Carriers except: consigner declared its value and paid a
1. Death or injury of a passenger if the accident supplementary sum, carrier liable to not more
causing it took place on board the aircraft or in than the declared sum unless it proves the sum is
the course of its operations (Art. 17) greater than its actual value
2. Destruction, loss or damage to any luggage or 3. Hand-carry baggage – $400 to $1000 / passenger
goods, if it took place during the carriage (Art. (Art. 22 as amended by Guatemala Protocol,
18)

13 Excellence. Superiority. Loyalty. Service.

 1971; Alitalia v. IAC, supra) steamship line, ferries, and water craft, shipyard,
➢ An agreement relieving the carrier from liability ice-plant, electric light, heat and power or any public
or fixing a lower limit is null and void (Art. 23) utility (Sec. 13(b) Commercial Act 146)
➢ Carrier not entitled to the foregoing limit if the
damage is caused by his willful misconduct or ➢ A casual or incidental service devoid of public
default (Art. 25) character and interest is not brought within the
category (Luzon Stevedoring vs. PSC, 156 SCRA 169)
➢ Special Rules on Liabilities of Airline Carriers:
1. In case of flight diversion due to bad weather or CERTIFICATE OF PUBLIC CONVENIENCE
other circumstances beyond the pilot’s control, ➢ No public service shall operate without having been
the relation between carrier and passenger issued a certificate of public convenience (no
continues until the latter has been landed at the franchise is required by law, e.g. common carriers) or
port of destination and has left the carrier’s a certificate of public convenience and necessity (a
premises. The carrier should exercise prior franchise is required by law, e.g. telephone and
extraordinary diligence in safeguarding the safety other services) (Sec. 15 Comm. Act 146)
of its stranded passengers until they have
reached their final destination (Philippine ➢ The certificate constitutes neither a franchise nor a
Airlines v. CA, 226 SCRA 423) contract, confers no property right, and is a mere
license or privilege. The holder of said certificate
2. Even where overbooking of passengers is allowed does not acquire a property right in the route covered
as a commercial practice, the airline company thereby. Nor does it confer any property right,
would still be guilty of bad faith and still be interest or interest in the public highways.
liable for damages if it did not properly inform Revocation of this certificate deprives him of no
passenger that it could breach the contract of vested right. New and additional burdens, alteration
carriage even if they were confirmed passengers of the certificate, or even revocation or annulment
(Zalamea v. CA, 228 SCRA 23) thereof is reserved to the State (Luque vs. Villegas,
30 SCRA 408)

3. An open-dated ticket constitutes a complete ➢ It is a “property” and has a considerable value and
contract between the carrier and passenger. can be the subject of sale or attachment (Cogeo-
Hence, the airline company is liable if it refused Cubao Operators vs. CA, 207 SCRA 343)
to confirm a passenger’s flight reservation
(Singson v. CA, 282 SCRA 149) ➢ Exceptions:
1. Warehouses
4. An airline company which issued a confirmed 2. Animal drawn vehicles and bancas moved by oar
ticket to a passenger covering successive trips on or sail; tugboats
different airlines can be held liable for damages 3. Airships, except for the fixing of maximum rates
occasioned by “bumping off” by one of the for fare and freight
successive airlines (Lufthansa German Airlines v. 4. Radio companies, except for rates fixing
CA, 238 SCRA 290) 5. Public services owned or operated by the
government, except as to rates fixing
6. Ice plants
5. An airline ticket providing that carriage by 7. Public markets
successive air carriers is to be regarded as a
“single operation” is to make the issuing carrier ➢ Requirements for granting certificate:
liable for the tortuous conduct of the other 1. Citizen of the Philippines, or a corporation, etc.
carrier. A printed provision in the ticket limiting constituted and organized under the laws of the
liability only to its own conduct is not enough to Philippines at least 60% of its stock or paid-up
rebut that liability (KLM Royal Dutch Airlines v. capital must belong entirely to citizens of the
CA, 65 SCRA 237) Philippines
2. Financially capable of undertaking the proposed
PUBLIC SERVICE ACT (CA 146, as amended) service
3. Proof of public necessity, interest and
➢ Public Service - Includes any person who may own, convenience (KMU vs. Garcia, Jr., 239 SCRA 386)
operate, manage, or control in the Philippines for
hire or compensation, with general or limited ➢ Grounds for revocation of certificate:
clientele, whether permanent, occasional or 1. Where holder is a mere dummy
accidental, and done for general business purposes, 2. Where operator ceased operation and placed his
any common carrier, railroad, street railway, traction buses on storage
railway, subway motor vehicle, steamboat, or

14 Excellence. Superiority. Loyalty. Service.

 3. Where operator totally abandons the service
(Manzanal vs. Ausejo, 164 SCRA 36)

NOTICE AND HEARING WHEN NOT REQUIRED

REQUIRED
1. Issuance of Certificate 1. Investigation of any
2. Fixing of rates, tolls matter concerning
and charges public service
3. Setting up of standards 2. Requiring operators to
and classifications furnish safe, adequate
4. Establishment of rules and proper service
to secure accuracy of 3. Requiring public
all meters and all services to pay
measuring appliances expenses of
5. Issuance of orders investigation
requiring establishment 4. Valuation of properties
or maintenance of of public utilities
extension facilities 5. Examination and test
6. Revocation of of measuring
modification of appliances
Certificate 6. Grant of special
7. Suspension of permits to make extra
Certificate (except or special trips in
when it is necessary to territories specified in
avoid serious and certificate
irreparable damage or 7. Uniform accounting
inconvenience to the system and furnishing
public or private of annual reports
interest, in which case, 8. Compelling compliance
a suspension not more with the laws and
than 30 days may be regulations
ordered prior to the
hearing)

15 Excellence. Superiority. Loyalty. Service.