the sudden starting up of the carrier.

Passenger is deemed to be accepting the offer

Source: Essentials of Transportation and Public Utilities Law, 2016 ed if he is already attempting the board the conveyances.
Art. 1732. Common carriers are persons, corporations, firms or associations,
Define:
engaged in the business of transporting or carrying passengers or goods or both, by
land, air or water, for compensation, offering their services to the public. 1. Contract to Carry
2. Contract of Carriage one whereby a certain person or association of persons
Is a motorela a common carrier? obligate themselves to transport persons or things from one place to another for
No, a motorola is a vehicle of a common carrier. a fixed price
A plane of Cebu Pacific is not a common carrier 3. Contract Art. 1305
Cebu Pacific is a common carrier
Art. 1305. A contract is a meeting of minds between two persons whereby one
TRUE TEST binds himself, with respect to the other, to give something or to render some
service.
A. National Steel Corp vs CA 4 Tests
1. Carriage of passengers or goods
2. provided that it has space Instances when a consignee is a party to the contract: (3)
3. for all who opt to avail themselves of its transportation service 1. Consignee & consignor relationship;
4. for a fee 2. unequivocal acceptance of the bill
3. stipulation pour autrui (for other people)
B. First Phil. Industrial Corp. vs CA 1 Test
1. General Public
COMMON CARRIER PRIVATE CARRIER

2. Parties Extraordinary diligence in the vigilance over the Ordinary diligence

goods they carry
A. Carriage of Passenger - common carrier & passengers
B. Carriage of goods - shipper & carrier In case of LDD: Presumed negligent; burden of No presumption of negligence, for whosoever
proving otherwise rest on them alleges the LDD of the goods has the onus of
proving that the cause was the negligence of
Passenger one who travels in a public conveyance by virtue of contract, the carrier
express or implied, with the carrier subject to payment of fare or an equivalent
Cannot stipulate that it is exempt from liability May validly agree exemption of liability
thereof. for the negligence of its agents or employees

Continuing-offer Rule the duty of the drivers to stop their conveyances for a
reasonable length of time in order to afford passengers an opportunity to board and
enter, and they are liable for injuries suffered by boarding passengers resulting from

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 1 of 23 princessdarimbang@gmail.com

 CONTRACT DEFINITION DEGREE OF NOTES Types of Charter:
DILIGENCE 1. Contract of Affreigtment
Private The undertaking is a single May validly stipulate A. Voyage
Carrier transaction, not a part of a exemption from liability for B. Time
general business or occupation, Ordinary (Diligence negligence of employees 2. Bareboat charter
although involving the carriage of of a good father of a
the goods for a fee. Keyword: family)
without making the activity a Limited Clientele does not affect the nature of a common carrier
vocation; particular instance only.

Common persons, corporations, firms or May not stipulate exemption Kabit System
Carrier associations, engaged in the Extraordinary from liability (as it is contrary
business of transporting or (presumed to be at to public policy) Definition: an arrangement whereby a person who has been granted the
carrying passengers or goods or fault in case of loss certificate of public convenience allows other persons who own motor vehicles to
both, by land, air or water, for of effects; or death/ operate them under his license, sometimes for a fee or percentage of the
compensation, offering their injuries)
services to the public. earnings contrary to public policy
What makes it illegal:
Arrastre Handling of cargo from the time 1. Functions of operator
the goods are placed upon the are not trade & business
wharves of navigation Boundary System
Extraordinary
Custodian of goods 2. May be solidarily liable
nothing to do with trade or with carrier Payment of rental
navigation not illegal per se but it may produce reckless drivers
Stevedoring Involves the loading and
unloading of coastwise vessels Ordinary Obligations of a Common Carrier [ADE; accept, deliver, extraordinary diligence]
calling at the port
Carriage of Goods Carriage of Passengers
Travel Arranging and facilitating the May hold Travel agency &
Agency booking, ticketing & Ordinary carrier jointly and severally 1 to accept without discrimination
accommodation in a package tour liable
to seasonably deliver to destination at
Towage One vessel is hired to bring
Ordinary 2 (a) the stipulated time, otherwise
another vessel to another place
(b) at a reasonable time
Tramp a contract carrier which has (1) no regular and fixed routes and schedules but (2)
Service accepts cargo wherever and whenever the shipper desires, (3) is hired on a contractual 3 to the proper place to the proper destination
basis, or chartered by any one or few shippers under mutually agreed terms and (4)
usually carries bulk or break bulk cargoes 4 to the proper person
Line a common carrier which publicly offers services without discrimination to any user, has 5 to exercise extraordinary diligence
Service (1) regular ports of call/destination, (2) fixed sailing schedules and frequencies and (3)
published freight rates and attendant charges, and (4) usually carries multiple
consignments.

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 2 of 23 princessdarimbang@gmail.com

EXTRAORDINARY DILIGENCE Kinds of Delay
Carrier must do more than show the possibility that some other party could be (1) Excusable
responsible for the damage. It must prove that (1) it used all reasonable means to Effect: The duty to deliver is suspended
ascertain the nature and characteristics of the goods tendered for transport, and (2) (2) Inexcusable
it exercised due care in handling them. (Aboitiz Shipping Corp vs Insurance Effect: [NIDA]
Company of North America, Aug 6, 2008) p. 79 1. liable even if natural disaster caused damage (Art. 1740, NCC)
2. stipulation limiting the liability is inoperative (Art. 1747, NCC)
What route should the common carrier take? 3. liable for damages caused by the delay (Art. 270, Code of Commerce)
The carrier is obligated to follow the usual reasonable commercial or 4. consignee may exercise his right to abandon (Art. 371, CoC)
customary route.
If it is not the usual route, presumed that it is the direct geographical route It is a duty of the common carrier to inspect baggages. Non-inspection is a
routes of common carriers are approved by the appropriate government violation of their obligation to exercise extraordinary diligence.
agencies (i.e. MARINA). The route cannot be generally changed without its In overland transportation, carrier is not bound to make an examination on the
approval. contents of packages or bags particularly those hand carried by passengers.
In air transportation, the airline company is duty bound to inspect each and
When is contract of carriage perfected? every cargo that is brought to the aircraft, by virtue of RA 6235.
A. when passengers are safely transported to the destination
B. when the consignee receives, actually or constructively, the goods Rules in case of Stoppage/delay in voyage:
Art. 689 of the Code of Commerce MARINA Circular No. 112
VALID GROUNDS FOR NON-ACCEPTANCE OF GOODS: [LIFES-DOCU]
1. Dangerous objects, or substances including dynamites and other explosives; In case the voyage has already begun but Effects if delayed and unfinished voyage:
2. Unfit for transportation; interrupted: 1. if delay due to negligence of carrier
3. Would result in overloading; 1. Pay the fare in proportion to the distance: i. refund
4. Considered contrabands or illegal goods; (a) if due to fortuitous event/ force ii. obligation to provide free meals
majeure no right to recover for 2. if delay due to fortuitous event
5. Injurious to health;
losses & damages i. payment of amount that will suffice
6. Will be exposed to untoward danger like flood, capture by enemies and the like; (b) if caused by captain, exclusively to defray transportation cost
7. Goods like livestock will be exposed to diseases; right to indemnity ii. no obligation to provide free meals
8. Strike; (c) if caused by disability of vessel, and 3. obligation to inform passengers of
9. Failure to tender goods on time. passenger agrees to wait change in sailing schedule
i. may not be required to pay any
increased price of passage
ii. but his living expenses during the
stay shall be for his own account

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 3 of 23 princessdarimbang@gmail.com

Case: Kapalaran Buslines vs Coronado (p. 106) Summary of rules:
(Common carriers duty to a third person; sole case) 1. from the time the goods are unconditionally placed in the possession of , and
While the immediate beneficiaries of the standard of extraordinary diligence are, of received by the carrier for transportation until the same are delivered, actually
course, the passengers and owner of cargo carried by a common carrier, they are or constructively
not the only persons that the law seeks to benefit. For if the common carrier fully 2. Temporarily unloaded or stored in transit
observed the statutory standard of extraordinary diligence un respect of their
Exception: Right of Stoppage in transitu
passengers, they cannot help but simultaneously benefit pedestrians and the
owners and passengers of other vehicles who are equally entitled to the safe 3. Stored in a warehouse of the carrier, until the consignee has been advised of
and convenience use of our roads and highways. The law seeks to stop and arrival
prevent the slaughter and maiming of people and the destruction of property
Stipulation limiting the liability for carriage of goods
When does extraordinary diligence begin? Exercise less than extraordinary diligence
A. Train upon purchase of ticket, placing himself at the proper place in the Passengers No limitation of liability, even as to gratuitous passengers
proper manner with the intent to ride the coach
B. Jeep/Bus Continuing offer rule Art. 1744. A stipulation between the common carrier and the shipper or owner
limiting the liability of the former for the loss, destruction, or deterioration of the
How is duty of extraordinary diligence complied with? goods to a degree less than extraordinary diligence shall be valid, provided it be
There is no hard and fast rule in the exercise of extraordinary diligence (1) In writing, signed by the shipper or owner;
to carry the passengers safely as far as human care and foresight can provide, (2) Supported by a valuable consideration other than the service rendered by
using the utmost diligence of a very cautious person, with a due regard for all the the common carrier; and
circumstances. (p. 105) (3) Reasonable, just and not contrary to public policy.
Duration of Carriage of Goods
Art. 1732. The extraordinary responsibility of the common carrier lasts from the time the Extraordinary diligence, how complied with:
goods are unconditionally placed in the possession of, and received by the carrier for 1. By Sea (p. 108)
transportation until the same are delivered, actually or constructively, by the carrier to the A. Seaworthiness, definition:
consignee, or to the person who has a right to receive them, without prejudice to the Domestic Shipping Act of 2004:
provisions of Article 1738. i. must be adequately equipped for the voyage, and
Art. 1737. The common carrier's duty to observe extraordinary diligence over the goods ii. manned with a sufficient number of competent officers and crew
remains in full force and effect even when they are temporarily unloaded or stored in
Insurance Code:
transit, unless the shipper or owner has made use of the right of stoppage in transitu.
i. reasonably fit to perform the service, and
Art. 1738. The extraordinary liability of the common carrier continues to be operative ii. to encounter the ordinary perils of the voyage contemplated by the
even during the time the goods are stored in a warehouse of the carrier at the place of parties to the policy
destination, until the consignee has been advised of the arrival of the goods and has iii. properly laden
had reasonable opportunity thereafter to remove them or otherwise dispose of them. iv. provided with a competent master

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 4 of 23 princessdarimbang@gmail.com

 v. provided with a sufficient number of competent officers and seamen, and 7. Not wearing protective headgear
vi. provided with the requisite appurtenances and equipment xxx and other 8. Overtaking in no overtaking zone
necessary or proper stores and implements for the voyage. 9. Overtaking in an intersection
10. MMDA prohibition on changing lanes of specified streets
*Seaworthiness is relative in its construction and its application depends not Diligence in the Selection and supervision of the employee a defense in
he facts of a particular case. (p. 113) quasi-delict, not in culpa contractual
Duty to inspect in overland transportation depends on the circumstance.
Seaworthiness is an implied warranty; no express provision in the NCC
Failure to maintain seaworthy condition is a clear breach of its duty in Art. 3. By Train
1755 Competent Employees
Platform must be safe
B. Cargoworthiness: Maintenance of trains and tracks
The ship must be an efficient storehouse for her cargo. Must be:
i. sufficiently strong and equipped to carry the particular kind of cargo that Art. 609. Captains, masters or patrons of vessels must be Filipinos, have legal capacity to
she has contracted to carry, contract in accordance with this code, and prove the skill, capacity, and qualifications necessary
ii. her cargo must be so loaded that it is safe for her to proceed on her to command and direct the vessel, as established by marine or navigation laws, ordinances, or
voyage regulations, and must not be disqualified according to the same for the discharge of the duties of
the position.
2. By Land if the owner of the vessel desires to be the captain thereof, without having the legal qualifications
therefor, he shall limit himself to the financial administration of the vessel, and shall in trust the
A. Roadworthiness navigation to a person possessing the qualifications required by said ordinances and regulations.
Common carriers are similarly required to make sure that the vehicles (Code of Commerce)
used are in good order and condition.
Explosion of tires are not considered fortuitous events; Mechanical defects
are not fortuitous events Qualifications of a Captain:
1. Filipino citizen
B. Comply with Traffic Rules 2. legal capacity to contract
nonetheless, presumption of negligence only arises when there is proof of 3. prove the skill, capacity, and qualifications necessary to command and direct
violation of traffic rules the vessel (established by marine or navigation laws, ordinances, or
The following are violations of traffic rules and regulations: regulations)
1. Violation requiring motorists to drive on the right side of teh road 4. must not be disqualified (by the sale laws) for the discharge of duties
2. Speeding where there is restricted speed
3. Speeding in an intersection Owner of the vessel as captain:
4. Failure to signal when making a U-turn Without the necessary legal qualifications, he must:
5. Driver escaped and abandoned the victims and his truck (Hit-and- 1. limit himself to the financial administration of the vessel, and
Run) 2. shall in trust the navigation to a person possessing the qualifications required by
6. Driving without license said ordinances and regulations.
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 5 of 23 princessdarimbang@gmail.com
Overloading Carriers Lien (p. 176)
at any rate, not allowed If the consignor or the consignee failed to pay the consideration for the
exercise of due diligence includes the duty to take passengers or cargoes that are transportation of the goods, the carrier may exercise his lien in accordance with Art.
within the carrying capacity of the vessel 375 of the Code of Commerce.

Limited Liability Rule
The liability of the shipowner may be limited to the value of the vessel
May cover a situation involving only the negligence of the captain or crew (not
including the failure of the carrier to provide competent captain and crew)
In Carriage through sea, what route should be taken?
Art. 375. The goods transported shall be especially bound to answer for the cost of
transportation and for the expenses and fees incurred for them during their conveyance
and until the moment of their delivery.
This special right shall prescribe after eight days after the delivery has been made, and
once prescribed, the carrier shall have no other action that that corresponding to him as
an ordinary creditor.

Specific instance when a vessel can deviate from its route: Force majeure (p. 126)
Demurrage (p. 176)
When the deviation produced an increase in transportation charges, he shall be
reimbursed Lay Days the stipulated period within which to load and unload the cargoes
Should the carrier deviation without this cause: he shall be liable for all the losses Demurrage is the compensation provided for in the contract of affreignment for
which the goods the goods may suffer + sum, if stipulated for such case the detention of the vessel beyond the time agreed on for loading or unloading.
Essentially: Claim for damages for failure to accept delivery.
Exists only when stipulated in the contract
To whom extraordinary diligence extends to:
A. Generally:
1. Carrier and passenger
2. Carrier and shipper
3. sometimes the consignee, if he is the shipper himself

B. Exceptions, extended to the following persons:

1. Third persons:
Sole case: Kapalaran Business vs Coronado
SC: [common carriers] cannot help but simultaneously benefit pedestrians
and the owners and passengers of other vehicles who are equally entitled to
the safe and convenience use of our roads and highways.
2. the Crew:

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 6 of 23 princessdarimbang@gmail.com

Defenses of Common Carriers for LDD of Goods: [NOPE-DE]
Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following causes
only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Jurisprudence, exception to the exclusivity of Art. 1734:
(6) Exercise of extraordinary diligence.
Art. 1742. Even if the loss, destruction, or deterioration of the goods should be
caused by the character of the goods, or the faulty nature of the packing or of the
containers, the common carrier must exercise due diligence to forestall or lessen
the loss.
Art. 1743. If through the order of public authority the goods are seized or
destroyed, the common carrier is not responsible, provided said public authority
had power to issue the order.
General Rule: As long as a strong rain is not established as a storm, it is not an
exempted liability.
Exception: (Tides, winds and xxx case)
Situation: War in Marawi, a bus travels there and was bombed by the Military. Is it
exempted from liability?
Answer: No because bombing was an act by the military. As a rule, it is necessary
that there must be a declaration of state of war.
Exception to the rule: Piracy
General Rule: Fire is not an exempting circumstance
Exception: If the fire is caused by Art 1734 (1)
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 7 of 23
In case of LDD, how much can a shipper recover from the common carrier?
General Rule: According to the stipulation
Exception: If no such stipulation, 500$ for each package (?)
Duties of a Passenger [F-PETS] (p. 178)
1. must pay the proper fare
2. must present himself in the proper place
3. must present himself at the proper time
4. obligation not to bring such luggage that is in excess of the weight and seize
prescribed
5. must secure the appropriate travel documents
It is not a duty of the common carrier to provide travel documents; it is a duty of
the passenger to secure the appropriate travel documents.
Caso fortuito:
Art. 1174. Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which, though foreseen, were inevitable.
Requisites of Fortuitous Event
The following must be present to properly invoke fortuitous event as a defense:
(1) The cause of the occurrence, or the failure of the debtor to comply must be
independent of human will
(2) Impossible to foresee, or if foreseeable must be impossible to avoid
(3) impossible for the debtor to fulfill his obligation in a normal manner
(4) obligor/debtor must be free from any participation in or the aggravation of the
injury resulting to the creditor.
princessdarimbang@gmail.com
Mechanical Defects (p. 199)
The injured passenger can go after the carrier
May be considered fortuitous if adequate inspection is made. It is not sufficient
that it was recently inspected.
It must be established that due regard to all circumstances was given when
the inspection was being done.
Barratry (p. 201)
Definition: an act committed by the master or crew of the ship for some unlawful
or fraudulent purpose, contrary to their duty to the owner.
To constitute barratry, it must be:
a. intentional fraud
b. breach of trust, or
c. willful violation of law.
To exempt carrier from liability Art. 1739:
Art. 1739. In order that the common carrier may be exempted from responsibility, the
natural disaster must have been the proximate and only cause of the loss. However,
the common carrier must exercise due diligence to prevent or minimize loss before,
during and after the occurrence of flood, storm or other natural disaster in order that the
common carrier may be exempted from liability for the loss, destruction, or deterioration
of the goods. The same duty is incumbent upon the common carrier in case of an act of
the public enemy referred to in Article 1734, No. 2.
Art. 1739 rule: carrier may be excused from liability if the natural disaster is the
proximate and only cause of the loss (however, it is still required to exercise due
diligence)
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 8 of 23
Prohibited conduct on commercial airlines,
as provided by the Civil Aviation Regulations: (p. 180) [TISEL-SS]
(1) No person on board may interfere with a crew member in the performance of
his or her duties.
(2) Each passenger shall eastern his or her seat belt and keep it fastened while
the seat belt sign is lighted.
(3) No person on board an aircraft shall recklessly or negligently act or omit to
act in such a manner as to endanger the aircraft or persons and property
therein,
(4) No person may secrete himself or herself nor secrete cargo on board an
aircraft.
(5) No person may smoke while the no-smoking sign is lighted.
(6) No person may smoke in any airplane lavatory.
(7) No person may tamper with, disable or destroy any smoke detector installed
in any airplane lavatory.
Doctrine of Last Clear Chance
When both parties involved in the accident were both negligent, the negligence of
the party will not be considered the proximate cause if the other party has the last
clear chance of avoiding the injury.
Such negligence the party with the last clear chance will be considered an
efficient intervening cause (not just contributory negligence).
The rule does not apply to passengers. Ratio: It would be inevitable to exempt
the negligent driver of the jeepney and its owners on the ground that the other
driver was likewise guilty of negligence. (Phil. Rabbit Bus Lines vs IAC) (p. 231)
Proximate Causation (p. 182)
It is not an applicable defense to the common carrier because it is presumed
negligent the moment he failed to deliver the goods or transport the passenger to
the proper destination.
The injured passenger need not prove causation to establish his case.
Stipulation Pour Autrui literally meaning for other people
princessdarimbang@gmail.com
BILL OF LADING designed used or capable of being used as a means of transportation operating
A. Nature: A Bill of Lading operates as: either as a common contract carrier, including filing vessels covered under PD
1. a receipt 43.
2. a contract
3. a document of titles a symbol of the goods B. What are not vessels?
B. It is likewise applicable to air transport through an Airway Bill. According to MARINA:
C. Bill of Lading only applies to goods. i. those owned and/or operated by the AFP and by foreign governments for
military purposes; and
Query: Can party stipulate that the carrier does not exercise due diligence? What ii. bancas, sailboats and other waterborne contrivance
about if they stipulation non-payment of freightage? a. less than three gross tons capacity, and
b. not motorized
VALID LIMITATION OF LIABILITY
General Rule: No stipulation that the common carrier shall exercise less than the Kinds of Vessels
diligence of a good father of family 1. May be given different classifications depending on their uses, size and other
Exception: Parties may stipulate that the diligence to be exercised be less than criteria
the extraordinary diligence. 2. SOLAS 1974: [PCTF-NEN]
(1) Passenger ship which carries more than 12 passengers
Requisites of a valid limitation of liability (2) Cargo ship which is not a passenger ship
That the stipulations be: (p. 284) [WVR] (3) Tanker which is a cargo ship constructed or adapted for the carriage in bulk
1. in writing signed by both parties, of liquid cargoes of an inflammable nature
2. supported by a valuable consideration (other than the service rendered by (4) Fishing vessel used for catching fish, whales, seals, walrus or other living
the common carrier); and resources of the sea
3. reasonable, just and not contrary to law. (5) Nuclear ship provided with a nuclear power plant
NOTE: There can be no stipulation reducing the degree of diligence to be (6) New ship where the keel of which is laid or which is at a similar stage of
observed for the carriage of passengers. construction on or after the date of coming into force of the SOLAS 1974.
(7) Existing ship which is not a new ship.
Kinds of Actual Damages (p. 312)
1. Dao emergente the loss of what a person already possesses How vessels are acquired
2. Lucro cesante the failure to receive as a benefit that would have pertained to by any means recognized by law (except Intellectual Creation)
him [SOLTD-P] Succession, Occupation, Law, Tradition, Donation, Prescription

VESSELS Chapter 11 How to determine the nationality of a vessel?

A. What are Vessels?
According to PD 474, Decree creating MARINA
Any barge, ligher, bulk carrier, passenger ship freighter, tanker, container ship,
fishing boats, or other artificial contrivance utilizing any source of motive power,
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 9 of
Vessels registered in the Philippines are Philippine Flag vessels (UNCLOS)
UNCLOS:
i. Ships have tha nationality of the State whose flag they are entitled to fly
ii. There must exist a genuine link between the State and the ship
23 princessdarimbang@gmail.com
 iii. Ship with 1 flag: subject to its exclusive jurisdiction on the high seas it may Who accepts the interest?
not change flag during voyage
iv. Ship with 2 flags, using them for convenience: may not claim any of the There must be gross negligence for the court to award Moral damages
nationalities in questions, may be assimilated to a ship without nationality Total destruction or loss by reason of shipwreck
Registration under the Philippine Flag is required for shipping enterprises
engaged in overseas shipping that wishes to avail the benefits under the Limited Liability Rule (p. 424)
Philippine Overseas Development Act. No vessel, no liability
Extent of liability: value of the ship
Carriage of Goods by Sea Act (COGSA) The shipowners or agents liability is merely co-extensive with his interest in the
does it cover coastwise shipping? International shipping? vessel such that a total loss thereof results in its extinction.
Total destruction extinguished maritime liens
Laws governing international voyage: Hypothecary nature the liability of the carrier in connection with losses
1. NCC related to wartime contracts is confined to the vessel
2. COGSA and Code of Commerce
3. xx EXCEPTIONS:
1. Insurance
Real and Hypothecary nature 2. Injury/death due to shipowners fault or concurring negligence of shipowner
That which distinguishes maritime law from civil and mercantile law in general & captain
xxx 3. Workmens Compensation claims (this refers to INJURIES, NOT wages)

How to Compute laws of income: Ship Husband

Life expectancy x Net Income Unseaworthiness
Life expectancy = 80 years old - age of death x 2/3
Net Income = necessary & living expenses Protest
*If necessary expenses cannot be proved, then 50% of living expenses A declaration for an action for recovery of damages arising from a collision within 24
hours before the competent authority of the point where the collision took place, or
Other Damages: [MENTAL] that of the first port of arrival of the vessel, if in Philippine territory, and to the
When to claim damages? Filipino consul if it occurred in a foreign country

In case of LDD: When mandatory: [SHAM]

1. Common carrier is presumed negligent 1. Shipwreck,
2. not presumed in bad faith 2. If the vessel has gone through a
3. damages are not presumed hurricane or where the captain believes that the cargo has suffered damages or
averages,
Who proves negligence of Common Carrier? 3. Arrival under stress, and
Who received Attorneys fees? Lawyer or the injured party? 4. Maritime Collision.
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 10 of 23 princessdarimbang@gmail.com

Who is the master of the vessel?
Arrival under Stress
Vessel a Personal property under Art. 416 of the NCC, and Art. 585 of the Code
of Commerce. A peculiar kind of personal property and may be subject to the
Chattel Mortgage Law. It is not necessary for a chattel mortgage if a vessel to be
noted in the registry of deeds, but a record of documents affecting the title be
entered with the Collector of Customs.
Acquisition of Vessels: [SOLTD-P] Sale, Occupation, by Law, by Tradition in
consequence of certain contracts, Donations, and Prescription.
Who files maritime protest?
Cabotage the right of foreign vessels to engage in coastwise shipping, that is,
to provide service from one place within the Philippines to another place within the
Philippines.
Registration of Vessels
Registered with Maritime Industry Authority (MARINA)
A requisite necessary and indispensable.
With respect to the rights of 2 purchases, whichever of them first registers his
acquisition of the vessel is the one entitled to enjoy the protection of the law.
Considered him the absolute owner, the vessel to be free of all encumbrance and
all claims by strangers, and all the other liabilities be considered canceled.
Rules on Registration apply to all types of ships operating in the Philippine
waters, EXCEPT: [WASI]
(1) Warships and naval ships;
(2) All ships of the foreign registry temporarily used in the Philippine Waters;
(3) Ships of the Philippine Coast Guard; and
(4) Inflatable Boats used for rescue made of either a single or more rubber
tubing.
required for shipping enterprises engaged in overseas shipping that wishes to
avail of the benefits under the Philippine Overseas Shipping Development Act
Distinguish:
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 11 of 23
1. Ships Manifest a declaration of the entire cargo. To furnish customs
officers with a list to check against, to inform the revenue officers what good are
brought into the port.
2. Bills of Lading a declaration of a specific cargo. Issued as a matter of
convenience by virtue of a contract.
3. Ships Logbook the official record of a shipd voyage which its captain is
obligated by law to keep wherein he records:
(1) decision he has adopted,
(2) summary of the performance of the vessel, and
(3) other daily events.
An official entry in the logbook is legally binding and serves as an exception to
the hearsay rule.
MORTGAGE
Preferred Mortgage
A preferred mortgage shall constitute a lien upon the mortgaged vessel in the
amount og the outstanding mortgage indebtedness secured by such vessel.
Requirements for preferred mortgage: [RAN-WD]
1. Mortgage is recorded as provided in Sec. 3 of PD 1521
2. An Affidavit is filed that the mortgage is made in good faith and not designed to
hinder, delay or defraud any creditor or lien
3. Does not stipulate mortgagees waiver of preferred status
Additional Requirements:
4. Mortgage should cover the whole vessel
5. Must be of Domestic ownership
Does it bind 3rd parties?
Who may enter into a preferred ship mortgage? (p. 496)
1. Any citizen of the Philippines, or
2. Association or corporation organized under the laws of PH, at least 60% of the
capital owned by citizens of the Philippines
Purpose of loan: [CAPI] Financing the: construction, acquisition, purchase of
vessel or initial operation of vessels.
Can a vessel be forfeited? in favor of who?
princessdarimbang@gmail.com
 Can a vessel be arrested? Yes Naviero the person undertaking the voyage; may be the owner or the charterer
Martime Lien
General Average Liability of shipowner/agent pertaining to actions of the captain: (p. 504)
General Rule: not liable for the obligations contracted by the captain if he exceeds
A. What is included in the sale: [REMS] his power and privileges pertaining to him by reason of his position or conferred
i. Rigging
upon him by the former. (Art. 588, COC)
ii. Masts
iii. Stores Exception: liable if the proceeds of an obligation redounded to the benefit of the
iv. Engine of a steamer vessel, even if he exceeded in his authority
B. What is excluded in the sale: [PAMF]
i. Arms Pilotage
ii. Munitions of war
iii. provisions, and SHIP AGENT ORDINARY AGENT
iv. fuel
C. Sale midvoyage: Purchaser pays (1) Freightage and (2) payment of the crew A. a person entrusted with provisioning of the 1. function is limited to informing the consignee
and other persons who make up its complement vessel, or of the arrival of the vessel
B. represents her in the port in which she 2. if theres no hand in the provisioning of the
D. Sale upon arrival at port: Vendor pays (1) Freightage and (2) payment of the
happens to be vessel
crew and other persons who make up its complement
jointly and severally liable with the owner not personally liable to the party with whom he
A. Culpa Contractual contracts
selection and supervision cannot be invoked functions are governed by the CoC functions are governed by the NCC
only privies to the contract may be liable
B. Culpa Aquilania
jointly and severally liable Powers of a Ship Agent (p. 508)
1. Enter into contracts to provision the ship
Is a charter party a common carrier? No. CCs are PCFAs; a charter party is a 2. Represent the ownership of the vessel
contract 3. Take judicial and extrajudicial steps in matters relating to commerce

captain vs master
Kinds of Charter Parties:
1. Contract of Affreigtment Roles of a Captain [GTR] like the car hehe
A. Voyage 1. General agent of the shipowner
B. Time 2. Commander and technical director of the vessel, and
2. Bareboat charter 3. A representative of the country under whose flag he navigates

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 12 of 23 princessdarimbang@gmail.com

 can a captain enter into contracts Loans on Bottomry; RESPONDENTIA SIMPLE LOAN
Who enjoys more, the captain or owner? Owner (p. 519)
rate of interest not subject to Usury Law rate of interest must not exceed the ceiling fixed
by the Usury Law
Can the captain disobey the owner?
General rule: No there must necessarily be a marine risk which such risk need not be present
must be duly established
Exception:
executed in accordance with form and manner formal requisites regarding contracts in general
required in the Code of Commerce
LDD of goods under Pilotage, who is liable?
Complement of the vessel recorded in the registry of vessels to bind third no such registration is requires
persons
Does the captain enjoy Security of Tenure?
Captain is has a Confidential and Managerial statute, thus the Labor Code has preference is extended to the last lender if there general rule: the first lender enjoys preference
limited Application. be several lenders over subsequent ones

Status of the others? officers, crew

Authority to constitute a loan on Bottomry only the owner/s
Art. 644 of Code of Commerce Seamen who falls sick during voyage (p. 558) Cargo owner has right to enter into loan involving his own cargo
Art. 645 Captain, being a mere agent, may not contract a loan on respondentia.
supercargo (p. 560)
Form of the Loans
Requisites of a charter party: (p. 566) [CEF-C; wds] 1. By means of a public instrument.
1. Consent; 2. By means of a policy signed by the contracting parties and the broker taking
2. Existing Vessel at the disposition of the shipper; part therein.
3. Freight; 3. By means of a private instrument.
4. Compliance with the formal requirements under Art. 652 of Code of Commerce
which include: Consequences of loss of effects of the loans (p. 598)
a. in writing If the loss is due to an accident of the sea during the time, and on the occasion of
b. drawn in duplicate; and the voyage which has been designated in the contract and it is proven that the
c. signed by the parties cargo was on board, then the lender loses the right to institute the action which
would have pertained to him as such.
Keel frame of the ship When the lender may retain the right of action: [IFBCD]
Pars proto to part of a whole 1. loss caused by inherent defect of the thing,
respondentia refers to the goods on the ship 2. through the fault or malice of the borrower,
3. through barratry of the captain,

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 13 of 23 princessdarimbang@gmail.com

4. caused by damages as a consequence of being engaged in a contraband, or
5. from having loaded the goods on a vessel different from that designated in the
contract, unless by force majeure.

Who are the persons who take part in Maritime Commerce?

The captain is the Owner pro has vice he is the owner at the time being
Ship Agent; his powers, limitations of powers (p. 506)
A vessel may not be detained in its entirety
A co-owners private debt may xxx
Obligations of a captain
Is he civilly liable for LDD of cargo?
Art. 619 of Code of Commerce (p. 523)
Abandonment
- end

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 14 of 23 princessdarimbang@gmail.com

 F INALS
August 30
When arrival under stress improper (p. 663)
Art. 820 of the Code of Commerce. An Arrival shall not be considered lawful in the
following cases: [FRDM]
1. If the lack of provisions should arise from the failure to take the necessary
provisions for the voyage according to usage and customs, or if they should
have been rendered useless or lost through bad stowage or negligence int heir
care.
2. If the risk of enemies, privateers, or pirates should not have been well-
known, manifest, and based on positive and provable facts.
3. If the defect of the vessel should have arisen from the fact that it was not
repaired, rigged, equipped, and prepared in a manner suitable for the
voyage, or from some erroneous order of the captain.
4. When malice, negligence, want of foresight, or lack of skill on the part of the
captain exists in the act causing the damage.
Arrival under stress
Definition: The arrival of a vessel at the nearest and most convenient port which
was decided upon after determining that there is well-founded fear of seizure,
privateers, or pirates or by reason of any accident of the sea disabling it to
navigate.
Steps to be taken in the determination
of the propriety of an arrival under stress:
[DASDALO]
a) The captain should determine if there is a well-founded fear of seizure;
b) The captain shall assemble the officers;
c) The captain shall summon the persons interested in the cargo who may be
present and who may attend but without right to vote;
d) The officers shall determine and agree if there is a well-founded reason. The
captain shall have the deciding vote;
e) The agreement and minutes shall be signed and entered in the log book;
f) Objections and protests shall be entered in the minutes.
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 15 of 23
Salvage
Definition: A service which one person rendered to the owner of a ship or goods, by
his own labor, preserving the goods or the ship which the owner or those entrusted
with its care have either abandoned in distress at sea or are unable to protect
and secure it.
Note that abandonment and necessary.
Kinds of Salvage Services: [VEP]
1. Voluntary, wherein the compensation is dependent upon success;
2. Rendered under a contract for a per diem or per horam wage, payable at all
events; or
3. Under a contract for a compensation payable only in case of success.
Elements for a claim of salvage to be valid:
[MVSB]*sounds like NBSB
*3 laid by the SC, 4th added by Sec. 1 of the Salvage Law
1. there must be a marine peril;
2. the service is voluntarily rendered and is not required as an existing duty or
from a special contract; and
3. there must be success in whole or in part or that the service rendered
contributed to such success.
4. The vessel is shipwrecked beyond the control of the crew or shall have been
abandoned.
Rights and Obligations of Salvors and Owners (p. 685)
1. salvor is entitled to compensation for services rendered
2. salvor has a lien upon the property salvaged whereby he is not bound to part
with the possession of the vessel until he is paid his due compensation
3. if salvor saves both ship and cargo, the salvage allowance should be charged
against the ship and cargo in proportion of their respective values
4. salvor has right of possession of a derelict for purposes of salvage claim, which
he can maintain against the true owner
princessdarimbang@gmail.com
5. owner of the derelict vessel does not abandon his right of ownership but his 3) by those who were in charge of it,
right of possession, 4) without any hope of recovering it (sine spe recuperandi), or
6. salvor shall convey and deliver the vessel or merchandise as soon as possible 5) without any intention of returning to it (sine animo revertendi).
to the: a) collector of customs, if the port has a collector, or b) provincial
treasurer or municipal mayor Definitions:
7. owner shall have the right to the delivery of the vessel or things saved, provided 1. Jetsam goods that were thrown off a ship which [ship ]was in danger
that he pays, or gives a bond to secure the expenses and the proper reward, debris deliberately thrown; short for Jettison
8. if owner does not make any claim within 3 months after publication by authories, claimed by discoverer
the thing saved shall be sold at a public auction (the proceeds shall go the 2. Flotsam goods that floated off the ship while the ship was in danger or
National Treasury less expenses and proper reward of the salvor) when it sank
9. owner of the salving vessel is also entitled to salvage reward for the use of his debris not deliberately thrown
vessel, although he may have not been present, claimed by owner
10. captain and crew of the salving vessel are also entitled to reward
3. Ligan goods left at sea on the wreck or tied to a buoy so that they can be
Limit of Salvage recovered later
In the absence of an agreement, or if the agreement is impugned for
excessiveness, the RTC shall fix the reward for salvage. Persons who take part in aviation:
Limit of reward: 50% of the net amount of the proceeds of the sale of the things 1. Air carrier or operator a person who undertakes, whether directly or
saved. indirectly, or by a lease or any other arrangements, to engage in air
In case of a public auction: transportation services or air commerce
Proceeds 2. Philippine air carrier air carrier who is a citizen of the Philippines
Less [CCAATS]: 3. Foreign air carrier or foreign air operator any operator, not being a
1) custody Philippine air operator, which undertakes, whether directly or indirectly, or by
2) conservation lease or any other arrangement, to engage in commercial air transport
3) advertisement, and operations within borders or airspace of the Philippines, whether on a
4) auction, scheduled or chartered basis.
5) whatever taxes or duties they should pay for their entrance, 4. Airman any individual:
6) salvage a) who engages, as the person in command, or as pilot, mechanic,
aeronautical engineer, flight radio operator or member of the
Derelict crew, in the navigation of the aircraft while under way, and
Definition: b) who is directly in charge of inspection, maintenance,
1) a ship or her cargo overhauling, or repair of aircraft, aircraft engine, propellers, or
2) which is abandoned and deserted at sea
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 16 of 23 princessdarimbang@gmail.com
 appliances and individual who serves in the capacity of aircraft
dispatcher or air traffic control operator.
Laws governing common carriers:
1. primarily - NCC
2. suppletory Code of Commerce
Chapter 20: International Shipping
NCC is the primary law
COGSA is supplementary; passed by the Congress of US on April 16, 1936
Duties of carrier:
1. Under the NCC exercise extraordinary diligence in the performance of their
contractual obligations
2. Under COGSA: [DsmfPB]:
i. exercise due diligence to: (a) make ship seaworthy, (b) properly man,
equip and supply the ship, (c) make the holds and cooling chambers, and all
other parts of the ship in which goods are carried, fit and safe for their
reception, carriage, and preservation.
ii. properly and carefully load, handle, stow, carry, keep, care for and
discharge the goods carried;
iii. after receiving the goods, issue to the shipper a bill of lading.
Can the common carrier escape liability by claiming unseaworthiness? (p.
697)
1. Under COGSA Yes. COGSA provides the common carrier with defenses and
immunities.
2. Under the NCC Yes, only if it can present proof that the unseaworthiness
was caused exclusively by any of the circumstances specified in Art.1734 NCC.
The immunities enumerated in COGSA Sec. 4(2) are not controlling except
insofar as they are embraced under any of the defenses under Art. 1734.
3. Defenses in COGSA that are not in the NCC
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 17 of 23
Review: Seaworthiness, definition.
Domestic Shipping Act of 2004:
i. must be adequately equipped for the voyage, and
ii. manned with a sufficient number of competent officers and crew
See: Insurance Code definition
Definitions:
1. Public interest
2. Public utility a business or service engaged in regularly supplying the public
with some commodity or service of public consequence such as electricity, gas,
water, transportation, telephone or telegraph service. It implies public use or
public service.
Jurisprudence: privately owned and operated business whose services are
essential to the general public. When private properties are affected with
public interest, they cease to be juris private only.
3. Public service, as defined by the PSA (p. 706)
Sec. 13. (b) The term public service includes every person that now or hereafter may
own, operate, manage or control in the Philippines, for hire or compensation, with
general or limited clientele, whether permanent, occasional or accidental, and done for
general business purposes, any common carrier, railroad, street railway, traction railway,
subway motor vehicle, either for freight or passenger, or both with or without fixed route
and whether may be its classification, freight or carrier service of any class, express
service, steamboat or steamship line, pontines, ferries and water craft, engaged in
transportation of passengers or freight or both, shipyard, marine railways, marine repair
shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system,
gas, electric light, heat and power water supply and power, petroleum, sewerage system,
wire or wireless communication systems, wire or wireless broadcasting stations and other
similar public services: Provided, however, that a person engaged in agriculture, not
otherwise public service, who owns a motor vehicles and uses it personally and/or
enters into a special contract whereby said motor vehicle is offered for hire or
compensation to a third party or third parties engaged in agriculture, not self or
themselves a public service, for operation by the latter for a limited time and for a specific
purpose directly connected with the cultivation of his or their farm, the transportation,
processing, and marketing of agricultural products of such third part or third parties shall
not be considered as operating a public service for the purpose of this Act.
princessdarimbang@gmail.com

Who can own a public utility?
Sec. 11. No franchise, certificate or any other form of authorization for the operation of a
public utility shall be granted except to citizens of the Philippines or to corporations
or association organized under Philippine laws at least 60% of whose capital is
owned by such citizens, nor shall such franchise, certificate or authorization be
exclusive in character for a longer period than 50 years. (Art. XII, 1987 Constitution)
To determine whether a Philippine National:
1. Voting Control Test voting rights, AND
2. Beneficial Ownership Test full beneficial ownership of the stocks
Constitutional limitations of Public Use [CE50-CEFOT-PU]
(1) No franchise, certificate or authority (FCA) granted except to citizens of the
Philippines or corporations or associations organized under the laws of the
Philippines at least 60% of whose capital is owned by such citizens;
(2) No FCA shall be exclusive in character;
(3) No FCA shall be for a longer period than 50 years;
(4) Franchise or right granted only under the condition that it shall be subject to
amendment, alteration, or repeal by the Congress when the common good so
requires;
(5) The State shall encourage equity participation in public utilities;
(6) The participation of foreign investors shall be limited to their proportionate
share in its capital;
(7) All the executive and managing officers of such corporations or associations
must be citizens of the Philippines;
(8) In times of national emergency, when the public interest so requires, the State
may temporarily take over or direct the operation of any privately owned
public utility or business affected with public interest;
(9) The State may, in the interest of national welfare or defense, upon payment of
just compensation, transfer to public ownership utilities and other private
enterprises to be operated by the Government;
(10)Regulate or prohibit monopolies;
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 18 of 23
(11)Restraint of trade or unfair competitions are not allowed.
If carrier has upgraded the seat of a passenger, is it a breach of contract Yes, if
the consent of the passenger was not taken.
In Maritime Commerce, how much may be overloaded? AT ANY RATE, NONE.
In Air transport, how much overbooking is allowed? 10%; what if all 110% are
present?
Bill of Rights for Air passengers
General elements of Public service (p. 706)
The following are required for a person to be considered a public service:
1. the person must own, operate, manage or control in the Philippines public
services which may include distribution of goods or rendering of services to the
Public;
2. the ownership, operation, management or control must be for hire or
compensation, and
3. the ownership, operation, management or control must be done for general
business purposes.
Characteristics of a public service (*not asked)
1. may be permanent, occasional or accidental,
2. may be with general or limited clientele.
As to carriers:
3. transport either freight or passenger, or both,
4. with or without fixed route, and
5. may be freighter or carrier service of any class, express service, steamboat or
steamship line, pontine, ferries, and water craft.
Who can regulate public utilities? (p. 713)
Public Service Commission, created by the Public Service Act or
Commonwealth Act No. 146. However, many of the PSA provisions have been
repealed by subsequent issuances.
is it an administrative agency?
princessdarimbang@gmail.com
 Powers of PSC are now distributed among the following government
agencies:
1. DOTC issues certificates of public convenience for operation national
railroad carriers; other agencies are under this department;
UPDATES:
1. RA 10844 (2016)
a. DOTC renamed Department of Transportation (DOTr)
b. Department of Information and Communications Technology (DICT)
all operating unites dealing with communications;
2. EO 32 (2017)
a. DOTr and DICT now under National Disaster Risk Reduction and
Management Council (NDRRMC); both agencies play important roles
in providing life preservation systems based on acceptable standards,
during or immediately after a disaster.
b. DICT responsible for the planning, development, and promotion of
the countrys information and communications agenda in support of
national development, and is indispensable in cascading timely,
accurate, and reliable information in times of emergency and disaster.
3. LTFRB land transportation;
4. LTO registration of drivers and motor vehicles;
5. (MARINA) Maritime Industry Authority water transportation;
6. (PCG) Philippine Coast Guard concerned with safety in water
transportation;
7. (NTC) National Telecommunications Commission communication utilities
and services, radio communications systems, wire or wireless telephone and
telegraph systems, radio and television broadcasting systems and other
similar public utilities;
8. (ERC) Energy Regulatory Commission electric or power distribution
companies;
9. National Water Resources Council water resources;
10. (CAB) Civil Aeronautics Board air transportation particularly its economic
aspects;
Transportation Law 2017-2018 | Atty Chester C. Castaos Page 19 of 23
11. (CAAP) Civil Aviation Authority of the Philippines maintenance and
operation of airports and other similar facilities registers aircrafts and other
incidents concerning the same and provides safety regulations in air
transportation;
12. (PPA) Philippine Ports Authority wharves and ports;
13. (LWUA) Local Water Utilities Administration water districts;
14. Toll Regulatory Board toll operators.
The power to fix rates is a legislative function, whether by the legislature itself or
delegated through an administrative agency.
Questioning rates as fixed by administrative bodies by the Courts, is it not
encroachment of powers? No. Determination of whether the rates so fixed are
reasonable and just is a purely judicial question and is subject to the review
of courts. (p. 731)
Potestas delegata non delegate potest What has been delegated cannot be
delegated. The power to fix the rates has been delegated to the regulatory
administrative agencies. As such, it cannot be further delegated by the said
administrative agencies.
just and reasonable standard in fixing rates the ultimate object. The only
standard which the legislature is required to prescribe for the guidance of the
administrative authority.
Take over public utilities (p. 726)
May be temporary or permanent
Requisites:
1. in the interest of national welfare or defense,
2. upon payment of just compensation
Temporary take-over happens in times of national emergencies
Who can declare State of Emergency?
1. Congress, generally. It is the repository of emergency powers.
2. The President, as allowed by Congress, subject to the following conditions:
[WPSN]
princessdarimbang@gmail.com
 (1) There must be a war or other emergency. its necessity depends on the enabling law. Ex. EPIRA
(2) The delegation must be for a limited period only. provides that its issuance shall be vested exclusively in the
(3) The delegation must be subject to such restrictions as the Congress may Congress. (p. 752)
prescribe. In Domestic air transport legislative franchise not
(4) The emergency powers must be exercised to carry out a national policy necessary for its operation; ratio: not provided in the law
declared by Congress.
There is a DUAL franchise and CPC REQUIREMENT with respect to broadcast media.

Can the State grant GMA power over ABSCBN in times of emergency?

Method of Regulation of Rates by LTFRB Requisites of issuance of a CPC:

1. Straight Computation method the actual distance travelled is multiplied by 1. ownership by citizen of the Philippines, or a corporation or co-partnership,
the authorized fare per succeeding kilometer of 0.25 centavos. association or joint stock company constituted and organized under the laws of
2. Add-on method adding the established minimum fare to the fare per the Philippines, 60% at least of the stock or paid-up capital of which belongs
succeeding kilometer multiplied by the distance traveled in excess not 4km and entirely to citizens of the Philippines;
5km, respectively. 2. financial capability capable of undertaking the proposed services and
meeting the responsibilities incidental to its operations; and
Franchise and Certificate of Public Convenience 3. public interest/ public need must be proved by applicant
FRANCHISE CPC
Definitions: (p. 761)
a grant or privilege from the sovereign power a form of regulation
through administrative 1. Prior operator rule the regulating agency protects the licensees investment
legislative grant agencies and will not be subjected to ruinous competition. Being old operators, the
petitioners are entitled to protection and priority as against new operators.
When granted, binds the public and, directly or indirectly an requires issuance of
act of the State municipal franchise (vs This is not absolute. Ratio: nobody has exclusive right to secure a franchise
CPCN which does not or a CPC.
a necessary requirement (even if a CPC is already issued, require the same) 2. Third operator rule a variation of (1); but instead, there are two prior
p. 752)
operators who are rendering sufficient service.
a property right, cannot be revoked or forfeited without due 3. Prior applicant rule priority in the filing of the application for a CPC is an
process of law; Collateral attack is not allowed here. important factor in deterring rights of the public service companies.
authority to grant is delegated to LGUs for tricycle 4. Protection of investment rule to the operators, it is the duty of the
operators, ferries and wharves government to protect the investment of the operators of public utilities from
unfair, unjustified, and ruinous competition.

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 20 of 23 princessdarimbang@gmail.com

Is CPC a property? Powers of the agencies
2 Views:
1. State view it is neither a franchise nor a contract, it is a mere license of Rule-making function of administrative agencies
privilege. there is no vested right if the government decides to reroute the traffic Rule-making power the power to make rules and regulations which results in
and thereby changing the route of the carrier. It does not confer the holder any delegated legislation that is within the confines of the granting statute and the
proprietary right or interest in the public highways.
doctrine of non-delegability and separability of powers.
2. Other persons/ broad sense It has considerable material value and is
considered as valuable asset, thus can be sold. It represents the right and They may promulgate rules and regulations within the scope of the authority
authority to operate its facilities for public service, which cannot be taken or granted by the legislature.
interfered with without due process of law. Regulation must be germane to the objects and purposes of the law, and not be
They are even more valuable than ordinary properties, considering that they in contradiction to, but in conformity with the standards prescribed by law.
are not granted to everyone who applies. The fact that they exercise both functions, there is no violation of due process of
law.
Sale or Transfer of a CPC:
Requisites: Is primary jurisdiction applicable to administrative agencies?
1. there are just and reasonable grounds for making the transfer; and
Yes mumshie. Primary jurisdiction in Administrative Law is a basic rule that there
2. the sale or transfer is not detrimental to the public interest.
should be fidelity to the basic concept of exhausting administrative remedies. The
*Sale/transfer is approved by PSC, approval necessary to protect public interest.
doctrine calls for application when there is such competence to act on the part of
Revocation or Cancellation of CPC an administrative body.
The holding of a CPC is just a privilege, thus may be revoked but he Exception: in cases where the jurisdiction of regulators of public services cannot
administrative agency concerned. It is the condition of every franchise that it is be invoked. Where the scope and coverage of the franchise of a public utility is
subject to amendment, alteration, or repeal when the common good so requires. not clear, a legal question arises which is more appropriate for the judiciary than
Sec. 16(n) PSA: whenever the holder thereof has violated or willfully and for an administrative agency to resolve.
contumaciously refused to comply with any order, rule or regulation of the
Commission.
Suspension period: not more than 30 days. Purpose: to avoid serious and
irreparable damage or inconvenience to the public or to private interests.
Revocation is not justified if there is no showing of willful or contumacious
violation of the law and rules.
Grounds for Cancellation:
(1) holder is a mere dummy,
(2) operator ceased operations and placed his vehicles on storage,
(3) operator totally abandoned the service.
(4) Misrepresentation

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 21 of 23 princessdarimbang@gmail.com

 Civil Aviation Authority of the
Civil Aeronautics Board
Philippines
agency charged with the power to maintenance and operation of
regulate the economic aspects of air airports and other similar facilities
transportation registers aircrafts and other incidents
concerning the same and provides
safety regulations in air transportation;
general supervision and jurisdiction exercised through the CAAP Board
over air carrier, their properties,
property rights, equipment and
franchise
Mandate: to regulate, promote and Mandate:
develop the economic aspect of air (1) to establish rules and regulation for
transportation in the Philippines and inspection and registration of
ensure that existing CAB policies are Filipino owned and operated
adapted to the present and future air aircrafts;
commerce of the Philippines (2) to establish rules and regulations for
the enforcement of law;
(3) to determine, fix and/or prescribe
charges for operation of air facilities;
(4) to administer and operate CATC
(5) to operate and maintain national
airports, air navi and other similar
facilities in compliance with ICAO;
(6) other functions.

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 22 of 23 princessdarimbang@gmail.com

Boards, Offices and Commissions
1. (CAB) Civil Aeronautics Board regulates persons and entities that are
involved in the economic aspects of air transportation
2. (BOT) Bureau of Telecommunications operated a telephone system, but not
a public service not engaged int he operation of telephone services for general
business purposes. It was created by EO of the President, transferring to it all
the personnel, powers, functions, activities, appropriations, properties, etc
intended for electrical communication services under the Bureau of Posts. (p.
707)

Other definitions:
1. Emergency tsunami, typhoon, hurricane, and similar occurrences. The
existence of conditions suddenly intensifying the degree of existing danger to
life or well-being beyond that which is accepted as normal.
2. Ownership a relation in law by which a thing pertaining to one person is
completely subjected to his will in everything not prohibited by law or the
concurrence with the rights of another. (p. 720)

Transportation Law 2017-2018 | Atty Chester C. Castaos Page 23 of 23 princessdarimbang@gmail.com