TRANSPORTATION LAWS

Background/Intro; Constitution = Art 12 sections 11, 17, 18, and 19.

SEC 11: No franchise for operation of public utility be granted EXCEPT to Citizens,
Corporations or Partnership (60-40 Filipino ownership)
To operate Public Utility (PU), franchise (CPC-CPCN) is needed, but not ownership.
CPC- franchise granted by government agency concerned
CPCN franchise from Congress.
Sec 17: In case of National Emergency when public interest requires, State may during
EMERGENCY temporarily TAKEOVER the operation of privately owned public utilities or
business affected with public interest.
Sec 18: State may in the interest of national welfare or defense, OPERATE ESTABLISH
VITAL INDUSTRIES upon payment of just compensation, transfer to public ownership, public
utilities to be operated by the STATE.
Sec 19: State shall regulate or prohibit monopolies. (Gamboa v. Teves corporation as PUBOD election)
Under POLICE POWER of the State, it may regulate a business affected with public interest
since the primary character of PU is public service or use. to protect the public and promote
safety and welfare.
Public service does not mean WHOLE PUBLIC or all the people in a certain area.
Public Utility is a business or service engaged in regularly supplying the public with some
commodity service of public consequence such as transportation, electric,
telecommunications, railroad, airports, seaports, iceplants, and warehouses.

TRANSPORTATION = is the movement of goods or persons from one place to another by

LAND, WATER, AIR railway.
Governing Laws: 1732-1763 NCC; Code of Commerce; CGSA; Warsaw Convention
Treaty; Agency Rules.
1732; COMMON CARRIER : A person, corporation, firm, association, engaged in business of
carrying passengers, goods, or both by land, water, air (LWA) for compensation and offering
service to public with or without CPC or CPCN; kabit system whether its an ancillary, regular or
episodic, unscheduled activity OR whether it offers service to the public or segment of the
community.
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CARRIAGE OF GOODS:
Liability of Common Carriers starts from the time the Common Carrier receives
unconditionally the goods and ends until goods are delivered to the place of destination or
constructively delivered to the consignee-agent.
DELIGENCE REQUIRED: - Exercise of Extraordinary Diligence (EOD). It raises instantly a
PRESUMPTION OF NEGLIGENCE or fault unless the CC observed extraordinary diligence on
LOSS, DAMAGE, LIABILITY caused by;
1.
2.
3.
4.
5.

Flood, storm, earthquake, lightning, national distress or calamity

Act or omission of the Shipper
Character of goods or defect in packaging
Act of Public Enemy in war
Order or Act of competent authority

That the above exceptions are the ONLY PROXIMATE CAUSE of the LLD. BUT, even with the
presence of the above exceptions, CC is still obliged to exercised due diligence to prevent or
minimize LLD before, during and after the Fortuitous event or natural disaster.
HIJACKING:
GR: Does not exempt CC from liability because its not one of the above.
EXCEPTION: If the hijacking is beyond control of the CC because of grave and irresistible force
which cannot be foreseen or is inevitable. Hijacking is regarded as FE because CCs are not
absolute insurers against risk of travel.
FIRE is NOT considered as ND/FE.
LIMITED LIABILITY RULE (LLR)- valid pursuant to Warsaw convention treaty ( check-inbaggage- $20 per kilo or hand carry. $400 per passenger) PROVIDED the limited liability is
WRITTEN in the Bill of Lading, ticket, or contract.
EXCEPTIONS to the LLR;
1.
2.
3.
4.

Willful misconduct, concurrent fault or negligence, bad faith, discourtesy.

Higher value declared
Charter Party
LLR is not expressed or written in the ticket, Bill of Lading, or contract.

Best Evidence: Bill of lading, contract, receipt, ticket.

CONTAINERIZATION SYSTEM is designed to facilitate expeditious or economical loading of
cargoes where CC does not participate in counting goods for loading and CC merely issues Bill
of Lading based on Shippers declaration.
1755 CC is bound to carry passengers safely as far as human care and foresight can provide,
using UTMOST DILEGENCE, with due regard for all circumstance.
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When does carriage of passenger begin or end? = From the time the Passengers BOARDS
and ALIGHTS OR ARRIVES AT PORT OF DESTINATION or UNTIL HE LEAVES THE
PREMISES WITH HIS BAGGAGES/CHILDREN OR even when he leaves the premises but
returns within reasonable time to retrieve baggage.
CC is vested with public interest and therefore expected to carry passenger using utmost
diligence (UD).
In case passenger is injured or does not reach destination safely, CC is PRESUMED AT FAULT
except in cases of Fortuitous Events/ND.
DOCTRINE OF LAST CLEAR CHANCE = is sometimes referred to as SUPERVENING
NEGLIGENCE that where both parties are negligent or is impossible to determine whose fault,
the one who had the last clear chance or opportunity to AVOID the impeding harm and failed to
do so, is chargeable with the consequence of LLD (sc)
Some important rulings of the SC to remember in the carriage of passengers wherein CC
is liable:
1. To stop within reasonable time to afford passengers opportunity to board or disembark
CC is liable to passengers for injuries from sudden jerking or stopping.
2. Victim standing and stepping on platform is already considered as Passenger.
3. Victim does not cease to be a passenger until he is landed at port of destination
and left the premises = includes reasonable time to claim his baggage and prepare for
departure.
4. CC is not exempted from liability even if STEERING KNUCKLE or brand-new TIRES
have FACTORY DEFECT because passengers have no control or choice in the
selection of the CC.
5. In case of STABBING causing COMMOTION and PANIC among passengers, there
was FORCE MAJEURE but CC must prove that it was not negligent.
6. Vessel/CC has implied WARRANTY AND SEAWORTHINESS when it navigated with
only one engine functioning and remained adrift and passengers brought to Cebu,
causing delay or damages, CC liable.
7. The LIMITED LIABILITY RULE under the Warsaw Convention Treaty does not operate
as an ABSOLUTE LIMIT OF LIABILITY and should not preclude the operation of the
New Civil Code.

8. ROUND TRIP PLANE ticket is a complete contract consisting of 6 flights = CC issuing

ticket is liable.
9. HIJACKING or AIR-PIRACY is a Fortuitous Even or force majeure to exempt CC it must
be proven that CC exercised Extra-ordinary diligence or Utmost Diligence or that it is
IMPOSSIBLE and UNAVOIDABLE to fulfill its obligation.
10. Liability of CC cannot be lessened or dispensed with by stipulation or statement in
tickets or notices.
11. Even if the passenger is carried gratuitously, a stipulation limiting liability is valid
EXCEPT in case of WILLFUL acts or gross negligence of CC. Reduction of fare does not
justify limitation of liability.
12. Where Non-Paying passenger was injured due to CCs negligence, CC is still liable.
13. Doctrine of Last Clear Chance or Supervening Negligence is NOT applicable when
passengers demand responsibility of CC to enforce CULPA CONTRACTUAL.
14. Even without License, Franchise, kabit system, colorum = Liability of UD/EOD as CC is
required.
15. Successive Carriers Rule = Ticket issuing CC assumes full responsibility for ENTIRE
TRIP.

COMMON CARRIER CAUSE OF ACTION: (Chose only one)

1. Culpa Contractual = Passenger v. CC
2. Culpa Criminal = Passenger v. Driver
3. Culpa Aquillana = Passenger v. CC + Driver

MARITIME
Under the Code of Commerce, Maritime transactions are real or hypothecary in nature =
that the liability of vessel owner is limited to the value of the vessel in case the vessel sinks or if
the vessel owner exercises right of abandonment due damage of more than .
GENERAL AVERAGE = damage caused or expense incurred due to maritime peril and which
resulted in saving the vessel or cargo, inures to the benefit of all. The shippers and CC shall
share PROPORTIONATELY (Ex: Jettison, Arrival under stress, Proper deviation)

PARTICULAR AVERAGE = where only a particular cargo or only the vessel is saved, others do
not contribute to the loss or damage because it did not inure to the benefit of all.
COLLISION =where both vessels are moving- the guilty vessel pays for damages or loss,
EXCEPT in case the guilty vessel sinks, because of the hypothecary nature.
ALLISION = where one of the vessel is stationary.
CHARTER PARTY; 2 KINDS
1. Bareboat or Demise Charter = The whole vessel including the entire crew or command
is leased to the Bareboat/Demise Charterer, who mans and controls the navigation.
Herein, CHARTERER is liable as CC. In Bareboat or Demise charter, the owner of the
CC relinquishes its possession, control, and command of its vessel or facility to the
DEMISE/BAREBOAT CHARTERER as CC.
2. Affreightment/Voyage/Time Charter = is the lease of the vessel for a sum of freight.
The vessel owner remains as CC who must exercise EOD. Charterer remains as a
private carrier or shipper only. It is a special voyage where the charterer/lessee leases
the CC for a certain amount of freight and is not liable as CC. The owner is liable as CC.
GR in case of LEASE/CHARTERER = EOD required from the party who has
CONTROL, POSSESSION, COMMAND of the vessel, as in DEMISE or BAREBOAT but
NOT in case of AFFREIGHTMENT.
Transportation/Common Carriers:
Certificate/franchise/Licensee/CPCN not required to incur liability/responsible of
Extraordinary Diligence of Common Carriers
Extraordinary Diligence/utmost diligence - a common carriers is bound to transport
cargo/passengers safely using utmost diligence/ extraordinary diligence.
G.R. In the carriage of goods, common carrier is presumed at fault/negligent/liable for
Loss, Damage, Liability unless due to following: Flood Earthquake, natural disaster,
force majeure, hijacking, acts/omission of owner of goods; nature/defects of goods,
improper packing etc, and provided these are the only and proximate cause of Loss,
Damage and Liability and there is not contributory negligence of Common carrier.
Liability in the carriage of goods start from the moment goods are received
unconditionally and lasts when goods are delivered to the place of destination or
delivered to consignee/agent. In the carriage of persons, utmost diligence is a statutory
obligation of common carrier, where victims need not prove the common carriers
negligence because the law raises the presumption of common carrier negligencepresumed at fault unless controverted by common carrier or proven that the proximate
cause of loss, death, injury is fortuitous event or natural disaster (does not include fire)

Bareboat/Demise charter is lease of the vessel and crew/equipment which makes the
Demise charterer liable as common carrier (Extra ordinary diligence required) and the
owner of vessel liable as a private carrier - only ordinary diligence required. Whereas, in
affreightment/Time charter/voyage charter, the vessel owner as common carrier should
exercise extraordinary diligence/utmost diligence - presumed negligent but charterer is
only a private carrier.
Limited Liability rule - a written slip limiting the liability of common carrier which
appears/specified in bill of lading, contracts, receipt, fixing sum to be recovered in case
of loss, damage and liability unless
1. wilfull misconduct;
2. gross negligence;
3. bad faith/fraud
4. owner of goods declared higher value.
maritime transactions are real and hypothecary in nature - that the liability of vessel
owner is limited to the value of the vessel sinks or if vessel owner exercises right of
abandonment due damage of more than 1/4.
General Average - is the damage/expense incurred which resulted in saving the vessel
and inured to the benefit of all.
Particular average - only cargo or vessel is saved - any expense/damage did not inure
to the benefit of all but only to a particular cargo/vessel. Others are not liable.

Transportation Law: Common Carrier

1 Extraordinary diligence/utmost diligence in carriage of persons - goods.
1.
When passenger unceremoniously bumped off, damage - exemplary - moral - Common Carrier
bad faith.
2.
Doctrine of limited liability - vessel totally lost, no vessel to abandon so abandonment not
required because total loss results in the extinction of all liability for damages following the
hypothecary nature in marine carriers - $500/package unless shipper declares higher value.
3.
Airline issuing ticket - with connecting flight - liable for exemplary with legal interest - 12%
4.
Doctrine of Last Clear Chance - last clear opportunity to avoid loss but failed. In case of
collision, doctrines applies

5.
Demise/bareboat - Common Carrier/Lessee liable in case of Loss, Damage, Liability,
Extraordinary diligence required. Owner of Common Carrier/Lessor liable only as a private
carrier, ordinary diligence required. But not in affreightment, time/voyage charter - owner of
common carrier, liable
6.
Bill of lading - a receipt issued by common carrier that the cargo is in good condition
7.
uninsured vessel sank before chattel mortgage could be foreclosed by bank, vessel suffers loss
9.
in maritime law jurisprudence, the handling of cargo is mainly the arrastre operators
principal work such as loading, handling, stowage, custody, care and discharge of such goods.
However the cargoes while being unloaded still remain under the custody of common carrier common carrier still principal liable to the cargo owner by exercising extraordinary diligence.
unless otherwise agreed between the common carrier and arrastre operator, common carrier
remains liable to the cargo owner. To overcome the presumption of negligence, common carrier
must establish by adequate proof that it exercised extraordinary diligence over the goods.

10.
Death of passenger in the course of transporting her gives rise to the common carrier
liability unless overcome by a showing common carrier exercised utmost diligence or that the
accident was caused by a fire, earthquake. That common carriers are liable for the death of its
passengers thru the negligence or willful acts of employees even if such employees acted
beyond the scope of their authority or in violation of common carriers orders.
TRANSPORTATION
Background / Introduction: Article XII Sections 11, 17, 18, 19

Section 11 No franchise for operation of public utility shall be granted except to citizens,
corporation, partnership 60-40 equity
= to operate public utility (PU), franchise (CPN-CPCN) is needed, but not ownership

CPC franchise granted by government agency concerned

CPCN franchise from Congress

Section 17 In case of national emergency when public interest requires, State may during
emergency temporarily TAKEOVER the operation of private owned public utilities or business
affected with public interest.

Section 18 State may in the interest of national welfare or defense operate - establish vital
industries upon payment of just compensation, transfer to public ownership, public utilities to be
operated by the State

Section 19 State shall regulate/prohibit monopolies (Gamboa vs Teves corporation as PUBOD-election)

Under the POLICE POWER of the State, it may regulate a business affected with public interest
since the primary character of public utility is public service or use to protect public and
promote safety welfare

Public service does not mean WHOLE PUBLIC or all the people in a certain area

Public Utility is business / service engaged in regularly supplying the public with some
commodity service of public conseq (?) such as transpo, electric, water, telecomm, railroad,
airports, seapotys, iceplants, warehouses

Transportation is the movement of goods or persons from one place to another by land, water,
air railway

Governing laws = Art. 1732-1763 NCC; Code of Commerce; COGSA; Warsaw Convention
Treaty, Agency rules

1732 Common Carrier (CC) a person, corporation, firm, association engaged in business of
carrying passengers or goods or both by land, water, air for compensation and offering service
to public = with or without CPC or CPCN; kabit system; whether it is an ancillary regular or
episodic, unscheduled activity or whether it offers service to the public or segment of the
community

CARRIAGE OF GOODS Liability of Common Carrier starts from the time common carrier
receives unconditionally the goods and ends until goods are delivered to the place of destination
or constructively delivered to the consignee/agent

Diligence required exercise of EXTRAORDINARY DILIGENCE raises instantly a

presumption of negligence fault unless common carrier observed extraordinary diligence
(EOD) or loss, damage, liability (LLD) is caused by:
flood, storm, earthquake, lightning, natural disaster or calamity
4.

act or omission of shipper

5.

character of goods or defects in packaging

6.

act of public enemy in war

7.

order or act of competent authority.

That the above exception/s is/are the only proximate cause of the loss, damage, liability. But
even with the presence of above exception, CC is still obliged to exercise due diligence to
prevent or minimize the loss, damage, liability before, during and after the fortuitous event or
natural disaster

HIJACKING
General Rule: It does not exempt common carrier from liability because it is not one of the
above-mentioned exception.

However, if the hijacking is beyond the control of common carrier because of grave and
irresistible force which cannot be foreseen or is inevitable, hijacking is regarded as fortuitous
event because common carriers are not absolute insurers against risk of travel.

Fire is not considered as natural disaster or fortuitous event.

LIMITED LIABILITY RULE valid pursuant to Warsaw Convention Treaty (check-in baggage $20/k or hand carry $400/passenger) provided the limited liability is written in the bill of lading,
ticket , contract.

EXCEPTIONS TO THE LIMITED LIABILITY RULE

1.

Willful misconduct

2.

Concurrent fault/negligence, bad faith, discourtesy

3.

Higher value declared

4.

Charter party

5.

LLR is not expressed / written in the ticket, bill of lading, or contract

(Best Evidence: Bill of Lading, receipt, ticket, contract)

CONTAINERIZATION SYSTEM is designed to facilitate expeditious and economical loading of

cargoes where common carrier does not participate in counting goods for loading and common
carrier merely issues bill of lading based on shippers declaration

CARRIAGE OF PASSENGERS/PERSONS
Article 1755 Common Carrier is bound to carry passengers safely as far as human care and
foresight can provide, using UTMOST DILIGENCE with due regard for all circumstances.

When does carriage of passengers begin and end? From the time passengers BOARDS AND
ALIGHTS OR ARRIVES AT PORT OF DESTINATION OR UNTIL HE LEAVES THE PREMISES
WITH HIS BAGGAGES/CHILDREN OR even when he leaves the premises but returns within
reasonable time to retrieve baggage. Common Carrier is vested with public interest and
therefore exhorted to carry passengers using utmost diligence/UD. In case passenger is injured
or does not reach destination safely, common carrier is presumed at fault except in case of
fortuitous event (FE/ND)

DOCTRINE OF LAST CLEAR CHANCE sometimes referred to as SUPERVENING

NEGLIGENCE that where both parties are negligent or is impossible to determine whose fault,
the one who had the last clear chance/opportunity to AVOID the impending harm and failed to
do so, is chargeable with the consequence LLD SC
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