REVIEWER BASED ON
“ESSENTIALS OF TRANSPORTATION AND PUBLIC UTITLITIES LAW” BY AQUINO AND HERNANDO
CHAPTER
1
CONTRACT OF
TRANSPORTATION
When a person obligates himself to transport persons or property from one
place to another for consideration.
The contract may involve carriage
of passengers or carriage
of goods.
The person who obligates himself to transport the goods or passengers may
be a common carrier or a private carrier.
PARTIES
The contract of transportation would depend on whether it is for carriage
of passenger or carriage of goods.
Carriage of Passengers
·
Common Carrier
·
Passenger – one who travels in a public conveyance
by virtue of contract, express or implied, with the carrier subject to payment
of fare or an equivalent thereof.
Carriage of Goods
·
Carrier
·
Shipper – The person who delivers the goods to the
carrier for transportation. The person who pays the consideration or on whose
behalf payment is made.
Consignee
The person to whom the goods are to be delivered.
The consignee may be the shipper himself as in the case where the goods
will be delivered to one of the branch offices of the shipper. However, the
consignee may be a third person who is not actually a party to the contract of
carriage.
PERFECTION
Two views in perfection of a contract of carriage of passengers.
·
Contract to
Carry – an agreement to carry the passenger to carry the passenger at some
future date. This contract is consensual and is therefore perfected by mere
consent.
·
Contract of
carriage or of common carriage itself – considered a real contract for
not until the facilities of the carrier are actually used can the carrier be
said to have already assumed the obligation of the carrier.
On Contract of
Carriage of Goods
With respect to carriage of goods, there may be a consensual contract to
carry goods whereby the carrier agrees to accept and transport goods at some
future date.
Compania
Maritima vs Insurance Company of North America
The test as to whether the relation of
shipper and carrier had been established is, Had the control and possession
of the cotton been completely surrendered by the shipper to the railroad
company? Whenever the control and possession of goods passes to the carrier
and nothing remains to be done by the shipper, then it can be said with
certainty that the relation of shipper and carrier has been established.
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Carriage of
Passengers
Breach of contract to carry may be sustained even if no tickets were
issued, a verbal contract to carry is already a binding consensual contract.
WRITTEN CONRACT NOT
ESSENTIAL
The presence of a ticket or a bill of lading or any written contract is
not necessary for the perfection of the contract of carriage.
The Code does not demand, as necessary requisite in the contract of
transportation, the delivery of the bill of lading to the shipper, but gives
right to both the carrier and the shipper to mutually demand of each other the
delivery of said bill.
AIRCRAFT
There is a perfected contract to carry passengers even if no tickets have
been issued to said passengers so long as there was already a meeting of minds
with respect to the subject matter and the consideration.
BUSES, JEEPNEYS, AND
STREET CARS.
Continuing
offer rule, it is 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 sudden starting up of the carrier.
It follows that the passenger is deemed to be accepting the offer if he already attempting to board
the conveyances and the contract of carriage is PERFECTED from that
point.
TRAINS
Requisites for a person to be deemed as a passenger (doesn’t have to be in
order):
·
Bona fide intention to use the facilities of the
carrier.
·
Possess sufficient fare with which to pay for his
passage.
·
Present himself to the carrier for transportation in
the place and manner provided.
COMMON
CARRIER
Article 1732. Common carriers are
persons, corporations, firms or associations engaged in the business of
carrying or transporting passengers or goods or both, by land, water, or air,
for compensation, offering their services to the public.
·
It has also been
defined as “one that holds itself out as ready to engage in the transportation
of goods for hire as a public employment and not as a casual occupation.”
Public Service. The concept of “common carrier” under Art.
1732 may be seen to coincide neatly with the notion of “public service,” under
the Public Service Act (Commonwealy Act No. 1416, as amended) that at least
partially supplements the law on common carriers set forth in the Civil Code.
Under Section 13 paragraph (b) of the Public Service Act, “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,
sub-way 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 the 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 communications system, wire or wireless
broadcasting stations and other similar public services: Provided, however,
That a person engaged in agriculture, not otherwise a public service, who
owns a motor vehicle 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 itself 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 party or third parties shall not be considered as operating a
public service for the purposes of this Act.
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TEST
First Philippine Industrial Corp vs CA
1. He must be engaged in the business of carrying goods for
others as a public employment, and must hold himself out as ready to engage
in the transportation of goods for person generally as a business and not as
a casual occupation;
2. He must undertake to carry goods of the kind to which
his business is confined;
3. He must undertake to carry by the method by which his
business is conducted and over his established roads; and
4. The transportation must be for hire.
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Public Use. Means
the same as “use by the public.” The essential feature of the public use is
that it is not confined to privileged individuals, but is open to the indefinite
public us is that it is not confined to privileged individuals, but is open to
the indefinite public.
Sps. Cruz v Sun Holidays
Indeed, respondent is a common carrier. Its
ferry services are so intertwined with its main business as to be properly
considered ancillary thereto. The constancy of respondent’s ferry services in
its resort operations is underscored by its having its own Coco Beach boats.
And the tour packages it offers, which include the ferry services, may be
availed of by anyone who can afford to pay the same. These services are thus
available to the public.
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THE TRUE TEST
Sps. Perena vs Sps. Nicolas
As all the foregoing indicate, the true test
for a common carrier is not the quantity or extent of the business actually
transacted, or the number and character of the conveyances used in the
activity, but whether the undertaking is a part of the activity engaged in by
the carrier that he has held out to the general public as his business or
occupation. If the undertaking is a single transaction, not a part of the
general business or occupation engaged in, as advertised and held out to the
general public, the individual or the entity rendering such service is a
private, not a common, carrier. The question must be determined by the
character of the business actually carried on by the carrier, not by any
secret intention or mental reservation it may entertain or assert when
charged with the duties and obligations that the law imposes.
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CHARACTERISTICS
Common Carrier contemplated under Art.1732
·
Art. 1732 makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, AND one who does such carrying only as
an ancillary activity (side line).
·
1732 also
carefully avoids making any distinction between a person or enterprise offering
[1]transportation
service on a regular or scheduled basis AND
one offering such services on an occasional, episodic, or unscheduled
basis.
·
1732 does not
distinguish between a carrier offering its services to the “general public”,
i.e., the general community or population, AND
one who offers services or solicits business only from a narrow segment of
the general population.
·
A person or
entity is a common carrier and has the obligations of the common carrier under
the Civil Code even if he did not secure a Certificate of Public Convenience.
·
The Civil Code
makes no distinction as to the means of transporting, as long as it is by land,
water, or air.
·
The Civil Code
does not provide that the transportation should be by motor vehicle.
·
A person or
entity may be a common carrier even if he has no fixed and publicly known
route, maintains no terminals, and issues no tickets.
·
A person or
entity need not be engaged in the business of public transportation for the
provisions of the Civil Code on common carriers to apply to them.
·
The Carrier can
also be a common carrier even if the operator does not own the vehicle or
vessel that he or she operates
ANCILLARY BUSINESS
Art. 1732 makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, AND
one who does such carrying only as an ancillary activity
De Guzman vs CA
Thus, even if the transportation of goods was ancillary to the
main business of buying and selling used bottles and scrap metals, the SC considered
the private respondent a common carrier.
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LIMITED CLIENTELE
Although the clientele is limited, the
regularity of the activities of a carrier may indicate that the same carrier is
a common carrier.
Sps. Perena vs Sps. Nicolas
Applying these considerations to the case
before us, there is no question that the Pereñas as the operators of a school
bus service were: (a) engaged in transporting passengers generally as a
business, not just as a casual occupation; (b) undertaking to carry
passengers over established roads by the method by which the business was
conducted; and (c) transporting students for a fee. Despite catering to a
limited clientèle, the Pereñas operated as a common carrier because they held
themselves out as a ready transportation indiscriminately to the students of
a particular school living within or near where they operated the service and
for a fee.
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MEANS OF TRANSPORTATION
First Philippine Industrial Corp. vs CA
Pipeline operators are common carriers that are subject to
business taxes on common carriers. Such operators are common carriers even if
the oil or petroleum products are being transported not through motor
vehicles but through pipelines.
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NOT COMMON CARRIER BY LAW
Note that under Section 7 of R.A. No.
10668, foreign vessels engaging in carriage conducted in accordance with the
said law shall not be considered common carriers under the New Civil Code; they
are also not offering a public service and this shall fall outside the coverage
R.A. No. 9295 or the “Domestic Shipping Development Act of 2004.
EFFECT OF CHARTER PARTY
A Charter
Party may transform a common carrier into a private carrier. However, it
must be bareboat or demise charter where the charterer mans the vessel with his
own people and becomes, in effect the owner for the voyage or service
stipulated.
The common carrier is not transformed
into a private carrier if the charter party is a contract of a affreightment
like a voyage charter or a tome charter.
A Charter
Party is defined as a contract by
which an entire ship, or some principal part thereof, is let by the owner to
another person for a specified time or use. Charter Parties are of two types:
a. Contract of affreightment which involves the
use of shipping space on vessels leased by the owner in part or as a whole, to
carry goods for others
b. Charter by demise or bareboat charter, by the
terms of which the whole vessel is let to the charterer with a transfer to him
of its entire command and possession and consequent control over its navigation,
including the master and the crew, who are his servants.
COMMON
CARRIER VS THE WORLD
Common Carrier
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Private Carrier
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A person, corporation, firm, or association engaged in the
business of carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering such services to the public.
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One who, without making the activity a vocation, or without
holding himself or itself out to the public as ready to act for all who may
desire his or its services, undertakes by special agreement in a particular
instance only, to transport goods or persons from one place to another either
gratuitously or for hire
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Towage
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One vessel is hired to bring another vessel to another place.
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Arrastre
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A Spanish word that refers to hauling cargo, comprehend the
handling of cardo on the wharf or between the establishment of the consignee
or shipper and the ship’s tackle.
They are, in fact, no different from those of a depository or
warehouseman.
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Stevedoring
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Involves the loading and unloading of the coastwise vessels
calling at the port.
Refers to the handling of the cargo in the holds of the vessel
or between the ship’s tackle and the holds of the vessel.
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Travel Agency
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The object of contractual relation of a person who purchases a
ticket through a travel agency is only the agency’s service of arranging and
facilitating the booking, ticketing and accommodation in a package tour.
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TRAMP
SERVICE VS LINE SERVICE
(basis is R.A. 9515)
Tramp Service
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Line Service
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The operation of a contract carrier which has no regular and
fixed routes and schedules but accepts cargo wherever and whenever the
shipper desires, is hired on a contractual basis, or chartered by any one or
few shippers under mutually agreed terms and usually carries bulk or break
bulk cargoes.
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The operation of a common carrier which publicly offers services
without discrimination to any user, has regular ports of call/destination, fixed sailing
schedules and frequencies and published freight rates and attendant charges
and usually carries multiple consignments.
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GOVERNING
LAWS
Article 1766. In all matters not regulated
by this Code, the rights and obligations of common carriers shall be governed
by the Code of Commerce and by special laws.
Article 1753. The law of the country
to which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration.
NATURE OF BUSINESS
Common carriers exercise a sort of
pubic office, and have duties to perform in which the public is interested.
Common carriers are public utilities;
they are enterprise that specially cater to the needs of the public and conduce
to their comfort and convenience. As such common carriers are impressed with
public interest and concern. Consequently, common carriers are subject to
regulation by the State.
REGISTERED OWNER RULE AND KABIT SYSTEM
In certain cases, it is not only the
operator of the vehicle who may be held liable even if the cause if actions is culpa contractual[2].
Ordinarily, the person who can be sued for breach of contract is the
contracting party. However, in certain cases, by reason of public policy, the
law allows victims of accidents to sue those who, strictly speaking, are third
parties. This obtains in the cases covered by the registered owner rule.
REGISTRATION LAWS
Registration of motor vehicles is now
governed by R.A. 4136 otherwise known as “The Land Transportation and Traffic
Code.” The Land Transportation Office is now administering the law on
registration.
REGISTERED OWNER RULE
·
The rule in this
jurisdiction is that the person who is the registered owner of a vehicle is
liable for any damage caused by the negligent operation of the vehicle although
the same was already sold or conveyed to another person at the time of the
incident. This rule is a matter of public interest. The registered owner is
liable to the injured party subject to his right of recourse against the
transferee or the buyer.
·
The registered
owner is not liable if the vehicle was taken from his garage without his
knowledge and consent. To hold the registered owner liable would be absurd as
it would be like holding liable the owner of a stolen vehicle for an accident
caused by the person who stole such vehicle.
·
Indeed,
unauthorized use and/or theft of the vehicle may be invoked in proper cases.
However, absent the circumstance of unauthorized use or that the subject
vehicle was stolen which are valid defenses available to a registered owner,
the registered owner cannot escape liability resulting from the use of the
registered owner’s vehicle.
·
The registered
owner rule applies in a financial lease.
·
If the registered
owner is made liable despite the transfer of the vehicle, the transferee is
liable to the registered owner for the damages caused to the passenger.
KABIT SYSTEM
The “registered owner” rule is
applicable whenever the persons involved are engaged in what is known as the “kabit system”.
The Kabit System is an arrangement whereby a person who has been
granted a certificate of public convenience allows other persons who own motor
vehicles to operate then under his license, sometimes for a fee or percentage
of the earnings.
Although the law does not outrightly
penalize the parties to such an agreement, the system is invariably recognized
as being contrary to public policy and therefore void and inexistent under
Article 1409 of the Civil Code.
PARI DELICTO RULE
Persons who are parties to the kabit
system cannot invole the same as against each other either to enforce their
illegal agreement or to invoke the same to escape liability. This is consistent
with the time-honored maxim “ex pacto
ilicto no oritur action” [ No action arises out of an illicit bargain].
LAND TRANSPORTATION RULES
The LTFRB imposes similar rules that
implement the registered owner rule and prohibits Kabit System.
AIRCRAFTS AND VESSELS
It is believed that the policy, which
prohibits the Kabit system, may also be applied to vessels and aircrafts that
are covered by certificates of public convenience and necessity.
It is a basic rule that no person can
operate a common carrier without securing a certificate of pubic convenience
and necessity.
BOUNDARY SYSTEM
In land transportation where the
boundary system may be implemented by the common carrier, the carrier cannot
escape liability by claiming that the driver is a lessee.
The carrier cannot exempt himself on
the ground he is a lessor because to tolerate such position would not only abet
flagrant violations of the Public Service Law but also to place the riding
public at the mercy of reckless and irresponsible driver – reckless because the
measure of their earning depends largely upon the number of trips they make
and, hence the speed at which they drive; and irresponsible because the most if
not all of them are in no position to pay the damages they might cause.
[2] culpa contractual, which is the fault or
negligence incident in the performance of an obligation which already existed,
and which increases the liability from such already existing obligation.