Transportation Case Doctrines COMMON CARRIERS - DAMAGES Cariaga v.

Laguna Tayabas Bus In contracts, the obligor in GF is liable only for the natural and probable consequences of the breach and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. If in BF, fraud, malice or wanton attitude, the obligor in breach is liable for all damages reasonably attributed to the breach. In both instances, provided damages have been proven that the

person responsible is irrelevant to their evaluation. Villa Rey Transit v. CA Life Expectancy = [2/3 * (80 Age)] In fixing the amount for the loss of earning capacity, the amount recoverable is not loss of the entire earning, but rather the loss of that portion of the earning which the beneficiary would have received. In other words, only net earnings are to be considered which is equal to total earnings less necessary expenses [which are those necessary to create the income, living and other incidental expenses]. Case based on tort. Although the life expectancy is computed using the formula stated, the figure computed may be reduced by circumstances relating to the deceaseds physical condition such as complaining and being treated for back pain, chest pain, headaches and occasional feelings of tiredness. The parents are entitled to moral damages for the death of their son under Article 2206. [Incidentally, is also applicable to death of passenger in breach of contract of carriage] The award of exemplary damages must be deleted. It is awarded only if the defendant, in an action based on contract or quasicontract, acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. Here, although the carrier failed to exercise extraordinary diligence, it was not shown that it acted in anyone of the circumstances contemplated. The basis of computing life expectancy is the age of the victim not the beneficiary. Article 2206(1) clearly provides that the defendant is liable for the loss of the earning capacity of the deceased and the indemnity is to be paid to the heirs. The pension of the deceased passenger being a sure income which he is entitled to receive is to be awarded to the heirs. Legal interest of 6% on the amounts adjudged for damages for the breach of contract of carriage should start from the

Davilla v. PAL

Here, the carrier is liable not only for the actual damages suffered for medical and hospital expenses but also for the income which the passenger would have earned had he finished medical school. These are likewise considered as actual damages because they could have been reasonably foreseen by the parties at the time the passenger boarded the bus. No moral damages could be awarded [passenger did not die], because it was not shown that the breach of contract, for which the action is based, was not tainted with fraud or bad faith. In assessing the amount of damages for the death of a passenger in contract of carriage, the court may consider the financial standing of the carrier along with other elements. Dissent: The purpose of moral damages is essentially indemnity or reparation, not punishment or correction. Moral damages are emphatically not intended to enrich a complainant at the expense of a defendant; they are awarded only to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone, by reason of the defendant's culpable action. In other words, the award of MD is aimed at the restoration, within the limit of possible, of the spiritual status quo ante, and therefore must be proportionate to the suffering inflicted. Thus, compensatory and moral damages can only be awarded to indemnify the victim or his relatives for the prejudice suffered, and the financial standing of the

Pantranco v. Legaspi

PAL v. CA

De Caliston v. CA

De Lima v. LTB

date of the promulgation of the Trial Courts decision. Sulpicio Lines v. CA Actual damages, to be recovered, must be proved. The trial court cannot simply make a determination of the loss and the value thereof without stating the evidence on which it based its findings. Article 1764 expressly makes Article 2206 applicable to the death of a passenger caused by the breach of contract by a common carrier. o Note: does this mean that 2206 not applicable in death in a private carriage?

actual damages the court may award. And if its amount need not be proved, it need not also be alleged and reason for such is that its award is merely dependent on the existence of, among others, actual damages. Fores v. Miranda Attorneys fees are in the concept of actual damages, and may be awarded when, among others, the court deems it just and equitable. The general rule is that Moral Damages are not recoverable in damage actions based predicated on breach of contract. Except: 1. Where the obligor in breach has acted fraudulently or in bad faith; or 2. In a contract of carriage where the passenger dies because of breach by the carrier. Thus, in where the passenger did not die but was merely injured, moral damages are not recoverable UNLESS it is proved that the carrier acted fraudulently or in bad faith. Mere carelessness of the driver does not per se constitute an inference of malice or bad faith on the part of the carrier. Carrier is presumed to have acted negligently and not maliciously. The distinction between fraud, bad faith, or malice in the sense of deliberate or wanton wrongdoing and negligence, as mere carelessness, is too fundamental in law to be ignored. The heirs of a deceased passenger may demand moral damages commensurate with the mental anguish suffered by them. Passengers who suffered injuries as a result of the carriers negligence cannot be considered as analogous to cases of quasidelicts causing physical injuries. And that in cases of breach of contract [including carriage] proof of bad faith or fraud i.e. wanton or deliberately injurious conduct is essential to an award of MD GR: Moral Damages are not recoverable in actions for damages predicated on a breach of the contract of transportation, as in the instant case, in view of the provisions of 2219 and 2220. The exceptions are:

With respect to the award of moral damages, the general rule is that MD are not recoverable in an action based on breach of contract, except where bad faith or fraud is proven. However, in a contract of carriage, by virtue of Art 1764 and 2206(3), MD are recoverable where the breach of contract of carriage results in the death of a passenger. With respect to the award of Exemplary damages, the court has the discretion to award such in a breach of contract when the defendant acted in a wanton, fraudulent, and reckless manner. Here SC awarded ED after taking judicial notice of the dreadful regularity of maritime disasters resulting is massive loss of life. The award of actual damages should take into account the expected life span and earning capacity of the victim, where he survived the accident but because of the negligence of the carrier he lost the use of his limbs, being condemned for the rest of his life as a paralytic. When the plaintiff prays for further relief as the court may deem just and equitable, the court is in effect called upon to exercise its discretion whether exemplary damages should be awarded even if not expressly prayed for or pleaded in the complaint. Exemplary damages may only imposed by way of example or correction only in addition, among others. To actual damages. They cannot be recovered as a matter of right. Further the amount of exemplary damages need not be proved because its determination depends on the amount of

Marchan v. Mendoza

Mercado v. Lira

Phil. Rabbit v. Esguerra

o o

1. Where the mishap results in a death of a passenger, and 2. Where it is proved that the carrier was guilty of fraud or bad faith, even if death does not result.

Here, Moral Damages are not recoverable since the delay of the delivery of the baggage was not motivated by ill will or bad faith. In fact the carrier immediately made efforts to trace the suitcases and it succeeded in finding them. Bad Faith evidence. must be substantiated by

China Airlines v. IAC The breach of the contract was not attended by gross negligence, recklessness or wanton disregard of the rights of the passenger as to amount to bad faith. Neither were the personnel motived by ill will or malice in their dealings with the passenger. Their refusal to accede to the demands was due primarily to a lack of information upon which to act upon and not from a deliberate intent to ignore the passengers rights. The breach of contract having been incurred in GF, the carrier is only liable for damages which are the natural and probable consequences of said breach and which the parties have foreseen at the time of the obligation was constituted. The SC was not convinced that the breach was attended by BF, Fraud or Gross Negligence amounting to bad faith. It was shown by the carrier that it had exercised diligent efforts to effect the change of schedule which it had earlier promised. There was clearly a concerted effort to comply with its obligation and this shows that the carrier although negligent, it was not of such degree as to be considered BF. Clearly, the law distinguishes a contractual breach effected in good faith from one attended by bad faith. Where in breaching the contract, the defendant is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of the obligation and which the parties had foreseen or could reasonably have foreseen; and in that case, such liability would not include liability for moral and exemplary damages. Under Article 2232 of the Civil Code, in a contractual or quasicontractual relationship, exemplary damages may be awarded only if the defendant had acted in " a wanton, fraudulent, reckless, oppressive or malevolent manner. Bad Faith means a breach of a known duty through some motive of interest or ill will.

Tan v. Northwest Airlines Bad faith does not simply connote bad judgment or negligence, it imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty through some motive or interest or ill-will that partakes of the nature of fraud. There is no bad faith or malice in loading the passengers baggage in another plane. Due to the weight and balance restrictions, as a safety measure, the carrier had to transport the baggage on a different flight, but with the same ETA. It is admitted that the Carrier failed to deliver the baggage on time. However, there was no showing of malice or bad faith in such failure. By its concern for safety, the Carrier had to ship the baggage on another flight. Since no BF carrier liable only for foreseeable damages by the parties, no MD and no ED. The Court here said that the contributory negligence of the passenger warrants a reduction in the award of moral damages. There is Bad Faith here to justify award of MD. The negligence of the carrier consisted in its failure to cover the side of bus with a bar or some other contrivance to protect passengers from failing off the bus. This negligence is considered Bad Faith. The award for loss of earnings and moral damages cannot be questioned when a passenger dies as a result of a breach of the contract of carriage. [2206(1)(3)].

China Airlines v. CA

Laguna Tayabas v. Cornista

Laguna Tayabas v. Tiongson

Armovit v. CA

PAL v. Miano

The gross negligence committed by private respondent in the issuance of the tickets with entries as to the time of the flight, the failure to correct such erroneous entries and the manner by which petitioners were rudely informed that they were bumped off

are clear indicia of such malice and bad faith and establish that private respondent committed a breach of contract which entitles petitioners to moral damages. However, considering the circumstances of this case whereby the Carrier attended to the plight of the petitioners, taking care of their accommodations while waiting and boarding them in the flight back to the U.S. the following day, the Court finds that the petitioners are entitled to moral damages in the amount of P100,000.00 each. Moreover, to provide an example for the public good, an award of exemplary damages is also proper. Nominal damages cannot co-exist actual or compensatory damages. with

We have constantly ruled in a number of cases that moral damages are recoverable in a breach of contract of carriage where the air carrier through its agents acted fraudulently or in bad faith. In the case at bar, the carrier through its agents acted in bad faith in "bumping off" the passengers. As aptly found, the failure of petitioner to accommodate the passengers was not the result of an honest mistake, because its employees knew and were aware that what they were doing was wrong. Hence, there was a "dishonest purpose" and "conscious doing of wrong" on the part of petitioner's employees in "bumping off" private respondents from the flight; the failure of the carrier to accommodate private respondents on Flight 296R was attended by bad faith. There can be no question that the entitlement to moral damages having been established, exemplary damages may be awarded; and exemplary damages may be awarded even though not so expressly pleaded in the complaint nor proved. Passengers have the right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier. The breach of contract was aggravated in this case when, instead of courteously informing Lapuz of his being a "wait-listed" passenger, a KAL officer rudely shouted "Down! Down!" while pointing at him, thus causing him embarrassment and public humiliation. Korean Air Lines acted in a wanton, fraudulent, reckless, oppressive or malevolent manner when it "bumped off" plaintiff-appellant on November 8, 1980, and in addition treated him rudely and arrogantly as a "patay gutom na contract worker fighting Korean Air Lines," which clearly shows malice and bad faith, thus entitling plaintiff-appellant to moral damages. The carrier acted in bad faith in refusing to provide hotel accommodations for respondent Pantejo or to reimburse him for

Transworld Airlines v. CA Here, despite a confirmed first class seat, the passenger was transferred to the economy class over his protest. And moreover, he was discriminated where Caucasians, who arrived later than him, were allowed to take first class seats when the scheduled passengers failed to show. An award of MD is proper where the passenger is made to suffer undeniable humiliation and is undeniably discriminated against. Such inattention and lack of care for passengers who are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith, which entitles an award of MD. More so in this case where instead of courteously informing the passenger of the downgrade, he was angrily rebuffed by the carriers employee. ED are likewise awarded for the humiliation and embarrassment to discourage the repetition of similar acts. MD are awarded for the inconvenience, humiliation embarrassment suffered. delay, and

Korean Airlines v. CA

Alitalia Airways v. CA

Here the airline deliberately overbooked and in doing so took the risk of having to deprive some passengers of their seats. The award of exemplary damages is wellgrounded. With dismay, we note, that the imposition of substantial amounts of damages notwithstanding, international carriers have not been dissuaded from repeating similar derogatory acts.

PAL v. CA

PAL v. CA

hotel expenses incurred despite and in contrast to the fact that other passengers were so favored.

Assuming arguendo that the airline passengers have no vested right to these amenities in case a flight is cancelled due to force majeure, what makes petitioner liable for damages in this particular case and under the facts obtaining herein is its blatant refusal to accord the so-called amenities equally to all its stranded passengers who were bound for Surigao City. No compelling or justifying reason was advanced for such discriminatory and prejudicial conduct. Not every case of mental anguish or fright or serious anxiety calls for an award of moral damages. The carriers act must be wrongful or wanton or done in bad faith to justify the imposition of moral damages. The carrier is guilty of bad in letting the passenger sign a quitclaim without her knowledge or understanding aand contrary to what she was planning to do, thus an award of moral and exemplary damages is proper. That there was fraud or bad faith on the part of respondent airline when it did not allow petitioners to board their flight for Los Angeles in spite of confirmed tickets cannot be disputed. The U.S. law or regulation allegedly authorizing overbooking has never been proved. Even on the assumption that overbooking is allowed, respondent TWA is still guilty of bad faith in not informing its passengers beforehand that it could breach the contract of carriage even if they have confirmed tickets if there was overbooking. Moreover, respondent TWA was also guilty of not informing its passengers of its alleged policy of giving less priority to discounted tickets. Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the passengers concerned to an award of moral damages. Thus, it was also held that the switch of planes from Lockheed 1011 to a smaller Boeing 707 because there were only 138 confirmed economy class passengers who could very well be accommodated in the smaller planes, thereby sacrificing the comfort of its first class passengers for the sake of economy, amounts to bad faith.

Such inattention and lack of care for the interest of its passengers who are entitled to its utmost consideration entitles the passenger to an award of moral damages. The respondent court erred, however, in not ordering the refund of the American Airlines tickets purchased and used by petitioners Suthira and Liana. The evidence shows that petitioners Suthira and Liana were constrained to take the American Airlines flight to Los Angeles not because they "opted not to use their TWA tickets on another TWA flight" but because respondent TWA could not accommodate them either on the next TWA flight which was also fully booked. The purchase of the American Airlines tickets by petitioners Suthira and Liana was the consequence of respondent TWA's unjustifiable breach of its contracts of carriage with petitioners. In accordance with Article 2201, New Civil Code, respondent TWA should, therefore, be responsible for all damages which may be reasonably attributed to the nonperformance of its obligation.

Sabena Belgian World Airlines v. CA

Singson v. CA

Zalamea v. CA

Although the rule is that moral damages predicated upon a breach of contract of carriage may only be recoverable in instances where the mishap results in the death of a passenger, or where the carrier is guilty of fraud or bad faith, there are situations where the negligence of the carrier is so gross and reckless as to virtually amount to bad faith, in which case, the passenger likewise becomes entitled to recover moral damages.

Lopez v. Pan-Am

misleading plaintiffs into purchasing first class tickets in the conviction that they had confirmed reservations for the same, when in fact they had none, defendant wilfully and knowingly placed itself into the position of having to breach its a foresaid contracts with plaintiffs should there be no lastminute cancellation by other passengers before flight time, as it turned out in this case. Such actuation of defendant may indeed have been prompted by nothing more than the promotion of its self-interest in holding on to Senator Lopez and party as passengers in its flight and foreclosing on their chances to seek the services of other airlines that may have been able to afford them first class accommodations. All the time, in legal contemplation such conduct already amounts to action in bad faith. For bad faith means a breach of a known duty

through some motive of interest or ill-will. Self-enrichment or fraternal interest, and not personal ill-will, may well have been the motive; but it is malice nevertheless. Exemplary Damages should be imposed in such an amount as to sufficiently and effectively deter similar breach of contracts in the future by defendant or other airlines. MD and ED are awarded where a passenger is injured because the driver of the bus was driving recklessly which resulted in the accident.

Sarkies Tour however is not liable for exemplary damages which is personal to the employees actually in charge of the vehicles and where it was not shown that Sarkies tolerated or approved of the activities. In sailing to Cagayan de Oro City with only one engine and with full knowledge of the true condition of the vessel, acted in bad faith with malice, in complete disregard for the safety of the passengers and only for its own personal advancement/interest. In allowing its unseaworthy M/V Asia Thailand to leave the port of origin and undertake the contracted voyage, with full awareness that it was exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise extraordinary diligence and obviously acted with bad faith and in a wanton and reckless manner. Statement of account of the hospital is admissible evidence of hospital expenses incurred. SC said that the usual practice is to award moral damages for physical injuries sustained in a breach of contract of carriage. The passenger sustained a laceration frontal area, with fracture of the right humerus due to the vehicular accident. He underwent an operation for the fracture of the bone extending from the shoulder to the elbow of his right arm. After a few years of rest, he had to undergo a second operation. Respondent, therefore, suffered physical pain, mental anguish and anxiety as a result of the vehicular accident.

Trans-Asia Shipping v. CA

Laguna-Tayabas Bus Co. v. Diasanta

Munsayac v. De Lara A principal or master can be held liable for exemplary or punitive damages based upon the wrongful act of his agent or servant only where he participated in the doing of such wrongful act or has previously authorized or subsequently ratified it with full knowledge of the facts. Reasons given for this rule are that since damages are penal in character, the motive authorizing their infliction will not be imputed by presumption to the principal when the act is committed by an agent or servant, and that since they are awarded not by way of compensation, but as a warning to others, they can only be awarded against one who has participated in the offense, and the principal therefore cannot be held liable for them merely by reason of wanton, oppressive or malicious intent on the part of the agent. It is not enough to say that an example should be made, or corrective measures employed, for the public good, especially in accident cases where public carriers are involved. For the causative negligence in such cases is personal to the employees actually in charge of the vehicles, and it is they who should be made to pay this kind of damages by way of example or correction, unless by the demonstrated tolerance or approval of the owners they themselves can be held at fault and their fault is of the character described in Article 2232 of the Civil Code. Sarkies Tours was held liable [for actual and moral but not exemplary] for booking the passengers on a fishing boat which was converted into a ferryboat without first securing a license to ferry passengers nor license to operate as a watercraft and where it was overloaded and lacked adequate lifesaving equipment.

R Transport v. Pante

Sulpicio Lines v. Curso

Sarkies Tours Philippines v. IAC

Article 2206 of the Civil Code entitles the descendants, ascendants, illegitimate children, and surviving spouse of the deceased passenger to demand moral damages for mental anguish by reason of the death of the deceased. The surviving brothers and sisters of a passenger of a vessel that sinks during a voyage are not entitled to recover moral damages from the vessel owner as common carrier even though they succeeded to the entire estate.

Philippine Hawk Corporation v. Lee

In the computation of loss of earning capacity, only net earnings, not gross earnings, are to be considered; that is, the total of the earnings less expenses necessary for the creation of such earnings or income, less living and other incidental expenses. Net Earning Capacity = Life Expectancy * [(Gross Annual Income expenses necessary for creation of income) Living Expenses]

Place of departure and destination are within the territories of two State Parties (one-way tickets); or Place of departure and destination within territory of one State party but with an agreed stopping place at another State [w/not a State party] (round-trip tickets)

WARSAW CONVENTION KLM Royal Dutch Airlines v. CA Article 30 of the Warsaw Convention which provides that the passenger, in successive carriage, can only take action against the carrier who performed the carriage during which the accident or delay occurred, applies only when there is an accident or delay. Here, the damage consists of the refusal to transport despite confirmed tickets. Further, under the contract of carriage, it is expressly provided that the carriage is to be regarded as a single operation. Therefore, KLM, which issued the tickets, is liable for the failure of Aer Lingus to transport the passengers, which KLM had in effect guaranteed. The passenger is bound by the stipulations limiting liability for lost baggage at the back of the ticket, which provided for $20/kilo, unless the passenger declares a higher value and pays an additional charge. Warsaw Convention limiting liability carriers for loss of baggage are valid. of

Lack of time to declare higher value and pay additional charges will not exclude the application of liability limitations. Warsaw covers the liability of a carrier for death/injury to passengers, loss/damage to luggage or delay in the transportation of persons/baggage. Warsaw however does not regulate or exclude the carriers liability for other breaches of contract by the carrier. In this case, carrier liable for rudely compelling Cuenca to transfer from his confirmed and paid first class seat to tourist. Warsaw does not apply in case of bad faith attributable to the employees. Where a passenger suffers a special specie of injury as a result of the breach of the contract of carriage, the compensation for the injury cannot be restricted to that prescribed by Warsaw for delay in the transport of baggage. o Injury here was the failure to attend the conference to deliver her speech which was a great honor to the passenger.

Northwest v. Cuenca

Alitalia v. IAC

Pan American World Airways v. IAC

PanAm v. Rapadas Where the ticket provides that a Notice that the Warsaw convention applies in case of death or injury to passengers and/or loss or damage to baggage or cargo, then the liability limitations under Warsaw apply. o The Baggage check maybe incorporated into the Passenger Ticket. In either case, there must be notice that Warsaw applies otherwise, the liability limitations under Warsaw do not apply.

Warsaw liability limits do not apply where it is shown that the damage was done with willful misconduct, bad faith, recklessness or otherwise improper conduct on the part of any official or employee acting within the scope of his employment. NOTE: Weird Case This case, which cited a marine case, said that if the destination of transport is the Philippines, then the Warsaw liability limitations do not apply. In such case, the NCC on common carriers applies to regulate the liability of the carrier for lost luggage. The carrier waived the applicability of the Warsaw convention when it offered to pay a

PAL v. CA

Warsaw Convention applies to international Carriage:

Lufthansa v. IAC

higher amount than that provided by Warsaw and by failing to object to the presentation of evidence on the actual amount of the lost luggage. Luna v. CA

provision that does not apply provision of liability limitation. Mapa v. CA

is

the

The RTC dismissed the case because the passengers failed to file a prior claim within the prescribed period under Warsaw. In reinstating the case, the SC said that Warsaw does not exclusively enumerate the instances where a carrier may be held liable. Thus, the prior claim would apply only to claims covered by Warsaw and the carrier may still be held liable for a special specie of injury. Failure to deliver the luggage at the designated time and place does not automatically amount to willful misconduct, which requires a showing that the acts complained of were done with intent to evade the law or were in persistent disregard of ones rights. Article 28(1) of Warsaw refers to Jurisdiction where an action for damages may be brought: o o o o Residence/domicile of Carrier [place of incorporation] Carriers Principal Place of Business Establishment where the contract was made Place of Destination

There is no international carriage where the place of departure and the place of destination are all within the territory of the US, a single State party and where there is no agreed stopping place in the territory of another state. Liability limitations in Warsaw do not apply where carrier accepts baggage w/out baggage checks having been delivered or no notice of Warsaw application. Here, there was gross negligence and discourtesy where despite the baggages being late, the carriers representative were discourteous, indifferent, impatient, rude and insulting. Here, the passenger suffered a special specie of injury entitling him to an award of moral and exemplary damages. The liability limitations in Warsaw do not apply where the damage/injury caused to the passenger was a result of willful misconduct on the part of the carriers employees. Liability limitations in Warsaw do not apply here because the baggage was lost twice which underscores the wanton negligence and lack of care on the part of the carrier which amounts to fraud or bad faith. Case of default misconduct. equivalent to willful

PAL v. CA

Cathay Pacific Airways v. CA

Santos v. Northwest Orient Airlines

Sabena Belgian World Airlines v. CA

Where a matter is governed by Warsaw, jurisdiction takes on a dual concept. Jurisdiction in the international sense, Warsaw, must be established in accordance with the four choices. Thereafter, the jurisdiction of a particular court must be established according to domestic law. Only after jurisdiction is established will the question of venue arise, which is controlled by domestic law. The place of destination is determined by the terms of the contract of carriage, as represented by the ticket. Where the ticket is round-trip, the place of departure and the place of destination is the same place, and any intermediate place where the carriage is broken is merely considered as a stopping place. An allegation of willful misconduct will not exclude operation of Warsaw, the only

United Airlines v. Uy Under the first cause of action, which is based on Tort for the humiliating treatment the passenger received from the carriers employees, such cause of action prescribes in Four (4) years. The travaux preparatories of the Warsaw Convention reveal that the delegates thereto intended the two (2)-year limitation incorporated in Art. 29 as an absolute bar to suit and not to be made subject to the various tolling provisions of the laws of the forum. This therefore forecloses the application of our own rules on interruption of prescriptive periods. Article 29, par. (2), was intended only to let local laws determine whether an action had been

commenced within the two (2)-year period, and within our jurisdiction an action shall be deemed commenced upon the filing of a complaint. Since it is indisputable that respondent filed the present action beyond the two (2)-year time frame his second cause of action must be barred. An extrajudicial demand will not toll the running of the prescriptive period. Nonetheless, it cannot be doubted that respondent exerted efforts to immediately convey his loss to petitioner, even employed the services of two (2) lawyers to follow up his claims, and that the filing of the action itself was delayed because of petitioner's evasion. Court said that the passenger pursued his claim zealously. The carrier is not in breach, nor guilty of bad faith, where it refuses to shorten the itinerary of the passenger and change his flight schedule where the tickets are stamped non-endorsable. Article 30 of Warsaw which provides that in successive carriage, an action may be brought only against the carrier which performed the carriage causing the injury, applies only when there is an accident or delay. Here, the injury was caused by the bumping-off of the passenger with a confirmed ticket. This is not delay but bad faith. Bumping-off forecloses the right of the passenger to be transported while delay is a mere suspension or postponement of the transport. The carriage in this case should be regarded as a continuous carriage and not independent contracts with several carriers. The ticket issued by Lufthansa provides that the carriage to be performed should be regarded as a single operation. Liability limitations in Warsaw and ticket are subject to waiver. Here, such application was waived when the carrier allowed the passenger, without objection, to testify on the contents of the baggage and even cross-examined the passenger. In an action based on breach of contract of carriage for loss of baggage, the passenger may only sue the principal carrier and not the carrier who actually undertook the carriage and caused the loss.

However, the principal carrier may file a third party claim against the intermediate carrier to determine who is ultimately liable for the loss. The contract of carriage between the private respondent and Singapore Airlines although performed by different carriers under a series of airline tickets, including that issued by the petitioner, constitutes a single operation. Members of the IATA are under a general pool partnership agreement wherein they act as agent of each other in the issuance of tickets to contracted passengers to boost ticket sales worldwide and at the same time provide passengers easy access to airlines which are otherwise inaccessible in some parts of the world. Booking and reservation among airline members are allowed even by telephone and it has become an accepted practice among them. A member airline which enters into a contract of carriage consisting of a series of trips to be performed by different carriers is authorized to receive the fare for the whole trip and through the required process of interline settlement of accounts by way of the IATA clearing house an airline is duly compensated for the segment of the trip serviced. Thus, when the petitioner accepted the unused portion of the conjunction tickets, entered it in the IATA clearing house and undertook to transport the private respondent over the route covered by the unused portion of the conjunction tickets, i e ., Geneva to New York, the petitioner tacitly recognized its commitment under the IATA pool arrangement to act as agent of the principal contracting airline, Singapore Airlines, as to the segment of the trip the petitioner agreed to undertake. As such, the petitioner thereby assumed the obligation to take the place of the carrier originally designated in the original conjunction ticket. The petitioner's argument that it is not a designated carrier in the original conjunction tickets and that it issued its own ticket is not decisive of its liability. The new ticket was simply a replacement for the unused portion of the conjunction ticket, both tickets being for the same amount of US$2,760 and having the same points of departure and destination. By constituting itself as an agent of the principal carrier the petitioner's undertaking should be taken as part of a single operation under the contract of carriage

American Airlines v. CA

Air France v. CA

Lufthansa v. CA

British Airways v. CA

executed by the private respondent and Singapore Airlines in Manila. China Airlines v. Chiok It is significant to note that the contract of air transportation was between petitioner and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a single operation. Article 15 of IATA-Recommended Practice similarly provides: "Carriage to be performed by several successive carriers under one ticket, or under a ticket and any conjunction ticket issued therewith, is regarded as a single operation." In American Airlines v. Court of Appeals, we have noted that under a general pool partnership agreement, the ticket-issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent. Likewise, as the principal in the contract of carriage, the petitioner in British Airways v. Court of Appeals was held liable, even when the breach of contract had occurred, not on its own flight, but on that of another airline. The Decision followed our ruling in Lufthansa German Airlines v. Court of Appeals, in which we had held that the obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that another airline had undertaken to carry the passengers to one of their destinations. A claim for alleged lost items from the baggage cannot prosper because of the failure to give timely notice of the loss.

The requirement of giving notice of loss of or injury to the goods is not an empty formalism. The fundamental reasons for such a stipulation are (1) to inform the carrier that the cargo has been damaged, and that it is being charged with liability therefor; and (2) to give it an opportunity to examine the nature and extent of the injury. This protects the carrier by affording it an opportunity to make an investigation of a claim while the matter is fresh and easily investigated so as to safeguard itself from false and fraudulent claims. When an airway bill -- or any contract of carriage for that matter -- has a stipulation that requires a notice of claim for loss of or damage to goods shipped and the stipulation is not complied with, its enforcement can be prevented and the liability cannot be imposed on the carrier. To stress, notice is a condition precedent, and the carrier is not liable if notice is not given in accordance with the stipulation. Failure to comply with such a stipulation bars recovery for the loss or damage suffered. Article 19 of the Warsaw Convention provides for liability on the part of a carrier for damages occasioned by delay in the transportation by air of passengers, baggage or goods. Article 24 excludes other remedies by further providing that (1) in the cases covered by articles 18 and 19, any action for damages, however founded, can only be brought subject to the conditions and limits set out in this convention. Therefore, a claim covered by the Warsaw Convention can no longer be recovered under local law, if the statute of limitations of two years has already lapsed. Nevertheless, this Court notes that jurisprudence in the Philippines and the United States also recognizes that the Warsaw Convention does not exclusively regulate the relationship between passenger and carrier on an international flight. This Court finds that the present case is substantially similar to cases in which the damages sought were considered to be outside the coverage of the Warsaw Convention. Examples of causes not covered are: o o humiliation suffered at the hands of the airlines employees. bumping off itself, rather than the incidental damages due to the delay,

Philippine Airlines v. Savillo

Savellano v. Northwest Airlines

Federal Express Corporation v. American Home Assurance

In this jurisdiction, the filing of a claim with the carrier within the time limitation therefor actually constitutes a condition precedent to the accrual of a right of action against a carrier for loss of or damage to the goods. The shipper or consignee must allege and prove the fulfillment of the condition. If it fails to do so, no right of action against the carrier can accrue in favor of the former. The aforementioned requirement is a reasonable condition precedent; it does not constitute a limitation of action.

fall outside the Warsaw Convention and do not prescribe in two years. In the Petition at bar, private respondents Complaint alleged that both PAL and Singapore Airlines were guilty of gross negligence, which resulted in his being subjected to humiliation, embarrassment, mental anguish, serious anxiety, fear and distress. The emotional harm suffered by the private respondent as a result of having been unreasonably and unjustly prevented from boarding the plane should be distinguished from the actual damages which resulted from the same incident. Under the Civil Code provisions on tort, such emotional harm gives rise to compensation where gross negligence or malice is proven. The allegation of willful misconduct resulting in a tort is insufficient to exclude the case from the realm of the Warsaw Convention. In Bloom v. Alaska Airlines, the passenger brought nine causes of action against the airline in the state court, arising from a confrontation with the flight attendant during an international flight to Mexico. The United States Court of Appeals (9th Circuit) held that the Warsaw Convention governs actions arising from international air travel and provides the exclusive remedy for conduct which falls within its provisions. It further held that the said Convention created no exception for an injury suffered as a result of intentional conduct which in that case involved a claim for intentional infliction of emotional distress. It is thus settled that allegations of tortious conduct committed against an airline passenger during the course of the international carriage do not bring the case outside the ambit of the Warsaw Convention. Warsaw rules on jurisdiction apply. Philippine Courts have no jurisdiction here.

Lhuiller v. British Airways

 COGSA Eastern Shipping Lines v. IAC

The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil Code. However, in all matters not regulated by said Code, the rights and obligations of common carrier shall be governed by the Code of Commerce and by special laws. Thus, the Carriage of Goods by Sea Act, a special law, is suppletory to the provisions of the Civil Code. It is to be noted that the Civil Code does not of itself limit the liability of the common carrier to a fixed amount per package although the Code expressly permits a stipulation limiting such liability. Thus, the COGSA which is suppletory to the provisions of the Civil Code, steps in and supplements the Code by establishing a statutory provision limiting the carrier's liability in the absence of a declaration of a higher value of the goods by the shipper in the bill of lading. The provisions of the Carriage of Goods by.Sea Act on limited liability are as much a part of a bill of lading as though physically in it and as much a part thereof as though placed therein by agreement of the parties. In determining amount payable under the COGSA rule on $500 per package limit, determine the actual amount of damage sustained. If this is less than $500/package, then pay actual amount. If the amount is more than $500/package then pay $500/package.

The individual crates or cartons prepared by the shipper and containing his goods can rightly be considered "packages" standing by themselves, they do not suddenly lose that character upon being stowed in a carrier's container. I would liken these containers to detachable stowage compartments of the ship. A container is a permanent reusable article of transport equipment not packaging of goods durably made of metal, and equipped with doors for easy access to the goods and for repeated use. It is designed to facilitate the handling, loading, stowage aboard ship, carriage, discharge from ship, movement, and transfer of large numbers of packages simultaneously by mechanical means to minimize the cost and risks of manually processing each package individually, It functions primarily as ship's gear for cargo handling, and is usually provided by the carrier. While it is true that in the bill of lading there is such stipulation that the liability of the carrier is US$500.00 per package/container/customary freight, there is an exception, that is, when the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. It is absurd to interpret "container," as provided in the bill of lading to be valued at US$500.00 each, to refer to the container which is the modern substitute for the hold of the vessel. The package/container contemplated by the law to limit the liability of the carrier should be sensibly related to the unit in which the shipper packed the goods and described them, not a large metal object, functionally a part of the ship, in which the carrier used them to be contained. Such "container" must be given the same meaning and classification as a "package" and "customary freight unit."

Aboitiz v. CA

o Neither the carrier nor the ship

shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package When what would ordinarily be considered packages are shipped in a container supplied by the carrier and the number of such units is disclosed in the shipping documents, each of those units and not the container constitutes the "package" referred to in liability limitation provision of COGSA.

Eastern & Australian Steamship v. Great American Insurance By providing that $500.00 is the maximum liability, the law does not disallow an agreement for liability at a lesser amount. Significantly, Article 1749 of the New Civil Code expressly allow the limitation of the carrier's liability. o Art. 1749 A stipulation that the common carrier's liability is limited to the value of the goods appearing

in the bill of lading, unless the shipper or owner declares a greater value, is binding. F.H. Stevens & Co. v. Norddeuscher Lloyd If, in an action commenced, in due time, a judgment for the plaintiff be reversed, or if the plaintiff fail otherwise than upon the merits, and the time limited for the commencement of such action has, at the date of such reversal or failure, expired, the plaintiff, or, if he die and the cause of action survive, his representatives may commence a new action within one year after such date, and this provision shall apply to any claim asserted in any pleading by a defendant. The action commenced by the plaintiff in the Municipal Court of Manila, on April 27, 1960, was dismissed June 13, 1960, or over twenty (20) days after the expiration of the period of one (1) year, beginning from May 21, 1959, within which plaintiff's action could be brought pursuant to Commonwealth Act No. 65, in relation to the Carriage of Goods by Sea Act. Under said section of Act No. 190, the period within which plaintiff could initiate the present case was renewed, therefore, for another year, beginning from June 14, 1960. The case at bar was commenced on June 24, 1960, or within the period last mentioned. In cases governed by the Carriage of Goods by Sea Act, the general provisions of the Code of Civil Procedure on prescription should not be made to apply. Similarly, we now hold that in such a case the general provisions of the new Civil Code (Art. 1155) cannot be made to apply, as such application would have the effect of extending the one-year period of prescription fixed in the law. It is desirable that matters affecting transportation of goods by sea be decided in as short a time as possible; the application of the provisions of Article 1155 of the new Civil Code would unnecessarily extend the period and permit delays in the settlement of questions affecting transportation, contrary to the clear intent and purpose of the law. Filing a case against the intermediate carrier who transported the goods during the transshipment is not the same as impleading the Principal Carrier. The

prescriptive period continues to run for the Principal carrier until he is brought into court. Universal Shipping Lines v. IAC Prescriptive period of One year under COGSA may be suspended by express agreement of the parties. One year period is counted from the time the goods are delivered to the arrastre. In action against the arrastre operator to enforce liability for loss of the cargo or damage thereto should be filed within one year from the date of the discharge of the goods or from the date when the claim for the value of such goods has been rejected or denied by the arrastre operator. o However, before such action can be filed a condition precedent should be complied with and that is, that a claim (provisional or final) shall have been previously filed with the arrastre operator within fifteen days from the date of the discharge of the last package from the carrying vessel. precedent for the filing of a claim within the fifteen- day period, Union Carbide could file the court action within one year, either from December 19, 1961 or from December 19, 1962 . This second date is regarded as the expiration of the period within which the Manila Port Service should have acted on the claim.

Union Carbide Phil. v. Manila Railroad

o Having complied with the condition

Dole Philippines v. Maritime Co.

o In other words, the claimant or

consignee has a two-year prescriptive period, counted from the date of the discharge of the goods, within which to file the action in the event that the arrastre contractor, as in this case, has not rejected nor admitted liability. Ang v. American Steamship Agencies In order for the 1 year period under the COGSA to apply, there must be loss or damage to the cargo. As defined in the Civil Code and as applied to Section 3 (6) paragraph 4 of the Carriage of Goods by Sea Act, "loss" contemplates merely a situation where no delivery at all was made by the shipper of the goods because the same had perished, gone out

American Insurance Co. v. Compania Maritima

of commerce, or disappeared that their existence is unknown or they cannot be recovered. It does not include a situation where there was indeed delivery but delivery to the wrong person, or a misdelivery, as alleged in the complaint in this case. It follows that for suits predicated not upon loss or damage but on alleged misdelivery (or conversion) of the goods, the applicable rule on prescription is that found in the Civil Code, namely, either ten years for breach of a written contract or four years for quasidelict. The Loss or deterioration covered by the one-year prescriptive period in the COGSA refers to physical damage to the goods. As to loss or deterioration in the value of the goods because of the decline in market value, the prescriptive period for the recovery of the lost value is 10 years for breach of contract. The one-year prescriptive period to file a case against the Carrier for loss or deterioration to the goods applies not only to the shipper but also the consignee and the subrogee-insurer. Note: Had the shippers in the civil cases below filed an action against the insurer after the one-year prescriptive period, then the latter could have successfully denied liability on the ground that by their own doing, the shippers had prevented the insurer from being subrogated to their respective rights against the carrier by filing a suit after the one-year prescriptive period. The situation, however, does not obtain in the present case. Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship shall be discharged from all liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or the date when they should have been delivered. Under this provision, only the carrier's liability is extinguished if no suit is brought within one year. But the liability of the insurer is not extinguished because the insurer's liability is based not on the contract of carriage but on the contract of insurance. A close reading of the law reveals that the Carriage of Goods by Sea Act governs the relationship between the

carrier on the one hand and the shipper, the consignee and/or the insurer on the other hand. It defines the obligations of the carrier under the contract of carriage. It does not, however, affect the relationship between the shipper and the insurer. The latter case is governed by the Insurance Code. The ruling in Filipino Merchants should apply only to suits against the carrier filed either by the shipper, the consignee or the insurer. When the court said in Filipino Merchants that Section 3(6) of the Carriage of Goods by Sea Act applies to the insurer, it meant that the insurer, like the shipper, may no longer file a claim against the carrier beyond the one-year period provided in the law. But it does not mean that the shipper may no longer file a claim against the insurer because the basis of the insurer's liability is the insurance contract. Proof of the delivery of goods in good order to a common carrier and of their arrival in bad order at their destination constitutes prima facie fault or negligence on the part of the carrier. If no adequate explanation is given as to how the loss, the destruction or the deterioration of the goods happened, the carrier shall be held liable therefor. Notice of Claim. First, the above-cited provision of COGSA provides that the notice of claim need not be given if the state of the goods, at the time of their receipt, has been the subject of a joint inspection or survey. As stated earlier, prior to unloading the cargo, an Inspection Report as to the condition of the goods was prepared and signed by representatives of both parties. Second, as stated in the same provision, a failure to file a notice of claim within three days will not bar recovery if it is nonetheless filed within one year. This oneyear prescriptive period also applies to the shipper, the consignee, the insurer of the goods or any legal holder of the bill of lading. In Loadstar Shipping Co., Inc, v. Court of Appeals, we ruled that a claim is not barred by prescription as long as the one-year period has not lapsed. Liability Limitation. Thus, the COGSA, which is suppletory to the provisions of the Civil Code, supplements the latter by establishing a statutory provision limiting the carrier's liability in the absence of a shipper's declaration of a higher value in

Mitsui O.S.K v. CA

Belgian Overseas v. Philippine First Insurance

Filipino Merchants Insurance Co. v. Aviles

Mayer Steel Pipe v. CA

the bill of lading. The provisions on limited liability are as much a part of the bill of lading as though physically in it and as though placed there by agreement of the parties. In the case before us, there was no stipulation in the Bill of Lading limiting the carrier's liability. Neither did the shipper declare a higher valuation of the goods to be shipped. This fact notwithstanding, the insertion of the words "L/C No. 90/02447 cannot be the basis for petitioners' liability.

then states that among the carriers responsibilities are to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. The responsibility of the carrier shall commence from the time when the goods are loaded on board the vessel and shall cease when they are discharged from the vessel. The aforementioned Section 3(2) of the COGSA states that among the carriers responsibilities are to properly and carefully load, care for and discharge the goods carried. The bill of lading covering the subject shipment likewise stipulates that the carriers liability for loss or damage to the goods ceases after its discharge from the vessel. Article 619 of the Code of Commerce holds a ship captain liable for the cargo from the time it is turned over to him until its delivery at the port of unloading. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier. In the instant case, the damage or losses were incurred during the discharge of the shipment while under the supervision of the carrier.

o A notation in the Bill of Lading which

indicated the amount of the Letter of Credit obtained by the shipper for the importation of steel sheets did not effect a declaration of the value of the goods as required by the bill. That notation was made only for the convenience of the shipper and the bank processing the Letter of Credit. o A bill of lading was separate from the Other Letter of Credit arrangements.

In Eastern Shipping Lines, Inc. v. Intermediate Appellate Court, we explained the meaning of packages: "When what would ordinarily be considered packages are shipped in a container supplied by the carrier and the number of such units is disclosed in the shipping documents, each of those units and not the container constitutes the 'package' referred to in the liability limitation provision of Carriage of Goods by Sea Act."

SALVAGE LAW Erlanger & Galinger v. Swedish East Asiatic Three elements are necessary to a valid salvage claim: (1) A marine peril. (2) Service voluntarily rendered when not required as an existing duty or from a special contract. (3) Success, in whole or in part, or that the service rendered contributed to such success. A derelict is defined as "A ship or her cargo which is abandoned and deserted at sea by those who were in charge of it, without any hope of recovering it (sine spe recuperandi), or without any intention of returning to it (sine animo revertendi). Prima facie a vessel found at sea in a situation of peril, with no one aboard of her, is a derelict; but where the master and crew leave such vessel temporarily, without any intention of final abandonment, for the purpose of obtaining assistance, and with the intent to return and resume possession, she is not technically a derelict. It is not of substantial importance to decide that question. She was what may be called a quasi-derelict; abandoned, helpless, her sails gone, entirely without power in herself

Philippine First Insurance v. Wallem Shipping

For marine vessels, Article 619 of the Code of Commerce provides that the ship captain is liable for the cargo from the time it is turned over to him at the dock or afloat alongside the vessel at the port of loading, until he delivers it on the shore or on the discharging wharf at the port of unloading, unless agreed otherwise. In Standard Oil Co. of New York v. Lopez Castelo, the Court interpreted the ship captains liability as ultimately that of the shipowner by regarding the captain as the representative of the ship owner. Section 2 of the COGSA provides that under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods, shall be subject to the responsibilities and liabilities and entitled to the rights and immunities set forth in the Act. Section 3 (2) thereof

to save herself from a situation not of imminent, but of considerable peril; lying about midway between the Gulf Stream and the shore, and about 30 miles from either.

An east wind would have driven her upon one, and a west wind into the other, where she should have become a total loss. Lying in the pathway of commence, with nothing aboard to indicate an intention to return and resume possession, it was a highly meritorious act upon the part of the Shawmut to take possession of her, and the award must be governed by the rules which govern in case of derelicts; the amount of it to be modified in some degree in the interest of the owners in consideration of their prompt, intelligent, and praiseworthy efforts to resume possession of her, wherein they incurred considerable expense. In accordance with the Salvage Law, a ship which is lost or abandoned at sea is considered a derelict and, therefore, proper subject of salvage. A ship in a desperate condition, where persons on board are incapable, by reason of their mental and physical condition, of doing anything for their own safety, is a quasi-derelict and may, likewise, be the proper subject of salvage. "Salvage" has been defined as "the compensation allowed to persons by whose assistance a ship or her cargo has been saved, in whole or in part, from impending peril on the sea, or in recovering such property from actual loss, as in case of shipwreck, derelict, or recapture." Here, the ship was not a derelict or quasiderelict. It was not in any danger. In a towage, only the owner of the towing vessel, to the exclusion of the crew of the said vessel, may be entitled to remuneration. The distinction between salvage and towage is of importance to the crew of the salvaging ship, for the following reasons: If the contract for towage is in fact towage, then the crew does not have any interest or rights in the remuneration pursuant to the contract. But if the owners of the respective vessels are of a salvage nature, the crew of the salvaging ship is entitled to salvage, and can look to the salvaged vessel for its share.

A vessel although not abandoned may be subject of salvage if at the time the services were rendered there was probable, threatening danger of the vessel or of the cargo to be damaged. In the case at bar, there is no question that at the time the contract was entered into there was an imminent danger to Nieva and to its cargoes. Towing a vessel may or may not be a salvage service. If the vessel towed is by this means aided in escaping from a present or prospective danger, the service will be regarded as one of salvage, and the towage as merely an incident. If however, the vessel thus assisted is not encompassed by any actual or probable danger, and the employment is simply for the purpose of expediting the voyage, such service is towage. A vessel which undertakes a towage service is liable for reasonable care of the tow, and that reasonable care is measured by the dangers and hazards to which the tow is or may be exposed, which it is the duty of the master of the tug to know and to guard against not only by giving proper instructions for the management of the tow, but by watching her when in a dangerous locality, to see that his directions are obeyed. The duty of the tug to a tow is a continuous one from the time service commences until it is completed. Its responsibility includes not only the proper and safe navigation of the tug on the journey, but to furnish safe, sound and reasonable appliances and instrumentalities for the service to be performed, as well as the giving of proper instructions as to the management of the tow; and if the locality in which the two finds itself at any given time is more than ordinarily dangerous, the tug is held to a proportionately higher degree of care and skill.

Barrios v. Carlos A. Go Thong

Limpangco Sons v. Yongco Steamship

PRIOR OPERATOR RULE and CPC/CPCN Martires Ereno v. PSC

In the granting of certificates of public convenience, the principle that overrides all others is that public interest, necessity and convenience should be the first and paramount consideration. The number of persons to be benefited by the proposed service is immaterial.

Alhambra Cigar v. La Granja

The "prior operator" and "protection of investment" rules cannot prevail over the convenience of the public. Said "protection of investment" rule is not absolute, for nobody has exclusive right to secure a franchise or a certificate of public convenience. Nor could an unfair or ruinous competition result from the authorization of the ice plant applied for. In order that the opposition based on ruinous competition may prosper, it must be shown that the oppositor would be deprived of fair profits on the capital invested in its business. The mere possibility of reduction in the earnings of a business is not sufficient to prove ruinous competition. It must be shown that the business would not have sufficient gains to pay a fair rate of interest on its capital. A ferry service, in law, is treated as a continuation of the highway from one side of the water over which passes to the other side for transportation of passengers or of travellers with their teams vehicles and such other property as, they may carry or have with them. The term "ferry" implied the continuation by means of boats, barges, or rafts, of a highway or the connection of highways located on the opposite banks of a stream or other body of water. The term necessarily implies transportation for a short distance, almost invariably between two points, which is unrelated to other transportation. Coastwide Trade. A steamboat or motorboat service between the different islands, involving more or less great distance and over more or less turbulent and dangerous waters of the open sea, to be coastwise or inter-island service. As the San Bernardino Strait which separates Matnog and Allen leads to the ocean it must at times be choppy and rough so that it will not be safe to navigate the same by small boats or barges but only by such steamboats or vessels as the MV "Black Double. While a ferry boat service has been considered as a continuation of the highway when crossing rivers or even lakes, which are small body of waters - separating the land, however, when as in this case the two terminals, Matnog and Allen are separated by an open sea it can not be considered as a continuation of the highway. Respondent PANTRANCO should secure a separate CPC

for the operation of an interisland or coastwise shipping service in accordance with the provisions of law. Its CPC as a bus transportation cannot be merely amended to include this water service under the guise that it is a mere private ferry service.

San Pablo v. Pantranco South Express