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RCE Transportation Law Digested Cases 2017

Lim vs Pacquing
G.R. No. 115044
January 27, 1955

Tags: Franchise, constitutional limitations, stipulations have the force of law

FACTS:

1. Lim is an applicant for a franchise to operate a Jai-Alai gambling business in the Ermita, Manila
2. An Ermita ordinance was passed to allow the Mayor to have exclusive authority to approve or deny
applications for Jai-Alai operations in Ermita Manila.
3. Upon submission of Lims requirements, the franchise was granted.
4. Franchise agreement includes provisions that the Mayor may unilaterally adopt or reject a franchise
provided certain conditions are existent including but not limited to the actual operation of a Jai-Alai
gambling business.
5. Lim began constructing and preparing for his Jai-Alai business
6. Days after approval President Marcos Enacted Martial
7. 2 Days after Martial Law all issuances by Mayors to grant or reject Jai-Alai Franchises were revoked by
Executive Order
8. 2nd executive order enacted that issuances of Jai-Alai operations shall be exclusive to the then
Presidents relative working in a commission.
9. Lim was never able to operate Jai-Alai
10. President Marcos was ousted and President Cory Aquino enacted an executive order revoking the
order of exclusive franchise regulation on Jai-Alai by relative of Marcos
11. Lim now wants to resume his Jai-Alai franchise.

ISSUE:

1. Whether the franchise may be resumed or continued after the political turmoil.
2. Whether the City of Ermita has the authority to ISSUE ordinances that provide for the approval or
denial of franchises.

HELD:

1. Franchises are governed by the rules and stipulations provided for in its enabling law, hence in this
case the unilateral approval of any franchise as provided by the enabling ordinance is that unilateral
approval, resumption, or denial is conditioned on the fact that the said franchise holder has actually
established a front-end on Jai-Alai and is actually engaging in business.
2. Lim was never actually able to establish a front-end much less operate the same due to martial law,
hence the condition presented by the franchise did not authorize the mayor to exercise discretion when
Lim was seeking to resume his Jai-Alai business.
3. The constitution provides that approval and denial of franchises shall belong to congress but this is not
exclusive and the same may be delegated to specialized agencies more capable of determining the
wisdom in granting or denying franchise applications.

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Albano Vs Reyes
G.R. No. 83551
July 11, 1989

Tags: Legislative franchises, public service act, public utility, administrative agencies, delegation

FACTS:

1. Philippine Ports Authority opened a bidding to allow the management of Manila International
Container Terminal
2. Bidding was successful and the same was awarded to ICTSI
3. Petitioner is a congressman/taxpayer questions the award

ISSUE:

1. Whether MICT requires a legislative franchise since it is a public utility

HELD:

1. Even if MICT is considered a public utility, the same would still not require a legislative franchise
because the law has granted authority of administrative agencies to ISSUE franchises or to authorize
the operation of public utilities.
2. While the public service act (CA 146) considers wharfs and docks not Public Utilities, the same may not
acquire legislative franchise but may do so from other administrative agencies

Agan vs Piatco
G.R. No. 155001
May 5, 2003

Tags: constitutional limitation on seizure of control of businesses with national interest,

FACTS:

1. Bidding was conducted for the management of NAIA III


2. A proposal was submitted, among other things provided a stipulation on the limitation of government
control in case of national emergencies.
3. Said project was awarded to PIATCO
4. Workers association questioned the legality of the award since the same would impair their
employment

ISSUE:

1. Whether the government may assume control of a business deemed with national interest if the
agreement that provided for their contract as in this case includes a limitation on the exercise of that
power.

HELD:

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1. Among other ISSUEs HELD, in relation to the subject at hand the following is provided for; the
contract stipulation is unconstitutional and the same may be revoked even if the govt has approved
the same.
2. The government may do so and PIATCO cannot limit that exercise even by contractual stipulation,
even if the same is approved by the government.

Iloilo Ice vs Public Utility Board


G.R. No. L-19857
March 2, 1923

Tags: Public Utility, Public Use

FACTS:

1. Iloilo Ice is engaged in the production of ice and the distribution to its vast clients
2. Upon investigation, the secretary of the Public Utility Commission determines the same is a public
utility.
3. Respondent maintains that his is a private business and enterprise which provides a service that is
subject to approval by its composition.

ISSUE:

1. Whether the same is a Public Utility or not


2. Define Public Utility
3. Define Public Service

HELD:

1. Ice is not a public utility, the hallmarks of being a public utility is whether the public may enjoy it by
right or by permission. An essential factor of public use is that it is not confined to a margin of
individuals.
2. The use is public if all persons have the right to the use under the same circumstances. If the company
did in truth sell ice to all persons seeking its service, it would be a public utility. But if on the other
hand, it was organized solely for particular persons under strictly private contracts, and never was
devoted by its owners to public use.

Pangasinan Transportation Co. vs Public Service Commission


G.R. No. 47065
June 26, 1940

Tags: Definition of a Franchise, Limitations of Franchise, Public Service, Public Interest, Common Carrier

FACTS:

1. Petitioner has been engaged in the transportation of passengers for the past 25 years in Tarlac.
2. Petitioner holds a certificate of public conveyance.
3. Petitioner files with the commission authority to operate more vehicles as per regulation.

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4. Commission grants the petition but imposes conditions


5. Petitioner is not agreeable with said conditions.

ISSUE:

1. Definition of a Franchise and Public Utility


2. Whether the new conditions/regulations apply to existing Certificate of Public Conveyance.

HELD:

1. A Franchise is a privilege granted by the state to operate a business model where there is a vested public
interest.
2. A Public Utility is a privately owned and operated business whose service is essential to the general
public. They are enterprises which specially cater to the needs of the public and conduce to their
comfort and convenience; as such they are impressed with public interest.
3. Art XII S(11) 1987 Phil Const; Franchises shall not be exclusive nor extend more than 50 years, any
franchise granted shall be subject to amendment, repeal, alteration by congress when the common good
requires.
4. The business of a common carrier holds such a peculiar relation to the public interest that there is
superinduced upon it the right of public regulation.
5. When private property is "affected with a public interest it ceased to be juris privati only." When,
therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to
the public an interest in that use, and must submit to be controlled by the public for the common good,
to the extent of the interest he has thus created. He may withdraw his grant by discounting the use, but
so long as he maintains the use he must submit to control. Indeed, this right of regulation is so far
beyond question that it is well settled that the power of the state to exercise legislative control over
public utilities may be exercised through boards of commissioners.

National Power Corporation vs CA


G.R. No. 103442 45
May 21, 1993

Tags: Common Carrier, Public Utility, Force Majeure, Negligence, Extraordinary Diligence

FACTS:

1. NPC is a company engaged in providing electricity to various regions in the country.


2. One is the operation of a Hydro-Electric Dam somewhere in Bulacan.
3. A typhoon was coming to Bulacan.
4. Days before the Typhoon, NPC filled its dam to the brink way above the allowed depth of 217 meters.
5. Days before the Typhoon, NPC notified the town that they will be purging the dam in preparation for
the Typhoon; residents were strongly advised to leave the premises and take precautions.
6. When the Typhoon came, NPC started to purge the damn contents when it seemed that the Typhoon
would inevitably fill the dam beyond its allowed capacity of tolerance.
7. The purging resulted in the massive exponentially increasing opening of its purge tubes.
8. This resulted in a flash flood that destroyed a significant portion of a town near the dam.

ISSUE:

1. Whether there was Force Majeure (Typhoon) resulting into damage without injury.

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2. Whether NPC complied with its Diligence

HELD:

1. NPC cannot claim force majeure since the control of the dam up to the injury was still within
manageable terms of NPC, and the same could have been prevented even before the arrival of the
Typhoon. However, they only chose to reduce dam storage on the day of the typhoon
2. NPC cannot claim Exercise of Diligence on account that they displayed notice that the dam capacity
will be purged within the days coming before the typhoon nor strictly advising people to vacate the
immediate area surrounding the dam
3. NPC is a public utility that provides a demanded service to the public and is considered as a form of
common carrier that distributes electricity as per provided RA 9136 hence enjoys the presumption of
negligence when injury occurs unless controverted by proper defense.

Tatad vs Garcia
G.R. No. 114222
April 6, 1995

Tags: Public Utility, Public Service, Dichotomy of Ownership & Operation of a Public Utility, Franchise

FACTS:

1. Plan by government to build a railway on EDSA


2. EDSA LRT Consortium was made to prequalify for bidding
3. Award was given to the same after public bidding
4. Build to Operate Transfer was agreed upon, wherein the Consortium will build the facilities while
retaining ownership and then lease the same to DOTC for 25 years
5. During said lease period DOTC will also use the income earned to pay the Consortium
6. After 25 years, the same will be sold to DOTC.
7. The Consortium was organized in Hong Kong, contrary to nationalized industries like an LRT

ISSUE:

1. Can a foreign corporation own a Public Utility?

HELD:

1. What respondent owns is the properties, facilities, rail roads, rail cars, terminals etc... This in them is
not a public utility but merely assets.
2. While a franchise is needed to operate these facilities to serve the public, they in this sense is not a
public utility.
3. What constitutes a public utility is their character of public use and not its ownership.
4. The constitution does not require a franchise for the operation of a public utility.
5. In this sense anyone can own a facility catered to public service and ultimately a public utility but not
procure or obtain a franchise so long as he does not operate them to serve the public.
6. Private respondent does not interact or engage with the public hence he is not engaging a public
service, he merely owns the facilities during the 25 year lease period.
7. DOTC handles all the public service through the operation of the facilities.

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Philippine Airlines vs CAB


G.R. 119528
March 26, 1997

Tags: Legislative Delegation of powers to Administrative Agencies to ISSUE grants, licenses, and franchises

FACTS:

1. Grand Air is an upcoming air transportation entrepreneur


2. Grand Air makes preparations to operate its business
3. PAL questions that GA does not have a franchise to operate hence not allowed to do so
4. Grand Air files with the Civil Aeronautics Board(CAB) for a franchise and temporary operating permit
5. PAL questions the same that CAB is not authorized to ISSUE franchises and it is only the legislature.

ISSUE:

1. Does CAB have authority to ISSUE franchises and temporary permits to operate?
2. Does ACT 776 (law creating CAB) provide for a valid delegation of franchise regulation?

HELD:

1. Congress has granted certain administrative agencies the power to grant licenses for, or to authorize
the operation of certain public utilities. With the growing complexity of modern life, the multiplication
of the subjects of governmental regulation and the increased difficulty of administering the laws, there
is a constantly growing tendency towards the delegation of greater powers by the legislature, and
towards the approval of the practice by the courts. It is generally recognized that a franchise may be
derived indirectly from the state through a duly designated agency, and to this extent, the power to
grant franchises has frequently been delegated, even to agencies other than those of a legislative nature .
In pursuance of this, it has been HELD that privileges conferred by grant by local authorities as agents
for the state constitute as much a legislative franchise as though the grant had been made by an act of
the Legislature.
2. Given the foregoing postulates, we find that the Civil Aeronautics Board has the authority to ISSUE a
Certificate of Public Convenience and Necessity, or Temporary Operating Permit to a domestic air
transport operator, who, though not possessing a legislative franchise, meets all the other requirements
prescribed by the law. Such requirements were enumerated in Section 21 of R.A. 776.

Air France vs Carrascoso


G.R. No. L-21438
September 28, 1966

Tags: Contract of Carriage, Passenger, and Breach of Contract was a Tort or Quasi-delict

FACTS:

1. Carrascoso is a traveler who has booked a plane ticket with Air France, the same was a 1st class ticket
2. Air France failed to ISSUE a ticket but nonetheless records indicate that he purchased a 1st class ticket
3. Carrascoso was escorted and seated at the 1st class cabin
4. Later, an employee approached Carrascoso and told him he needs to stand up and leave the seat since
a white man was more deserving; he was later escorted to the tourist class and seated there.
5. Carrascoso was embarrassed and seeks to file an action for breach of contract and moral damages.
6. Air France claims that they are not liable for moral damages since the act complained of was an act of
an employee a third party who acted not within the framework and Principles of Air France, his claim
should be with the employee.

ISSUE:

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1. Whether there was a breach of contract


2. Whether Carrascoso is entitled to moral damages

HELD:

1. There was a breach in contact on Air France when the same failed to ISSUE a first class ticket.

Vda. De Nueca Vs Manila Railroad


C.A. No. 31731 R
January 30, 1968

Tags: Common Carrier, Passenger, Extra-ordinary Diligence

FACTS:

1. Nueca a freight customer intends to transport his goods via Manila Railroad.
2. He pays freight and the company loads the goods on board their train.
3. Nueca in an attempt to secure his goods in transit boards the train car carrying his goods
4. Mid transit the train car topples and Nueca along with his goods fell of the train.
5. Nueca died.
6. Heirs of Nueca seeks compensation on death of a passenger.

ISSUE:

1. Is Nueca a passenger?

HELD:

1. Nueca is not a passenger, hence Manila Railroad did not owe him Extra-Ordinary Diligence.
2. A passenger is one who travels in a public conveyance by virtue of a contract, express or implied with
the carrier as to the payment of the fare or that which is accepted as an equivalent.
3. The relationship of carrier and passenger is when one puts himself in the care of the carrier, or directly
under its control with the bonafide intention of becoming a passenger. This is when he makes a
contract for transportation and presents himself to the carrier in the proper place and manner to be
transported.

British Airways vs CA
G.R. No. 92288
February 3, 1933

Tags: Contract of Carriage, Mode of Perfection, Two kinds of Contract

FACTS:

1. Petitioner a recruitment agency intends to transport over 100 workers to Jeddah within a deadline.
2. He procures an agreement with British airways to transport his workers.
3. The two parties agreed on the deal, thereafter the recruitment agency furnishes payment.

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4. In response to payment; British Airways sent a memorandum to its corporate office to ISSUE tickets to
the worker/passenger.
5. Tickets were never issued, several delays occurred, and recruitment agency was forced to procure
tickets from other airlines just to meet the deadline for the transportation of its workers to Jeddah.
6. Recruitment agency seeks reimbursement from British Airways and compensation in damages.

ISSUE:

1. Whether or not a Contract of Carriage Existed even when no tickets were issued.

HELD:

1. There are two kinds of contracts in the carriage of passengers; (1) Contract to carry and (2) Contract of
Carriage.
2. A Contract to carry is a consensual contract and is merely perfected by mere consent or in this case the
agreement of British Airways to transport the agencies workers; regardless if there was or was not yet a
payment.
3. A Contract of carriage is essentially a real contract for it is when the facilities of the carrier are actually
being used it is said to have already assumed the obligation of the carrier.
4. In this case, British Airways already agreed to carry these passengers when they shook hands on it, this
is already deemed as an assumption of the carrier to assume the obligations mandated by law on
common carriers and one of that is to transport said workers as agreed upon.
5. British airways acted in bad faith when the same delayed the agency, contrary to their agreement.

Dangwa Transportation Co vs CA
G.R. No. 95582
October 7, 1991

Tags: Passenger, Extra-ordinary diligence, Carriers Vicinity of Control, Common Carriers obligation, Art 1755 NCC

FACTS:

1. Pedro was a passenger of Dangwa with intention to board and disembark from 2 locations
2. When Pedro disembarked, petitioners driver suddenly accelerated off while Pedro was still in the
process of leaving the vehicle.
3. Pedro slipped and fell on the pavement and was subsequently run-over by the vehicles rear right tire.
4. Pedro died

ISSUE:

1. Whether Pedro was negligent in alighting from the vehicle


2. Whether the contract of carriage already terminated when Pedro started to disembark

HELD;

1. A common carrier is obligated to carry passengers safely as human care possible

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2. The obligation of the carrier to observe that diligence does not end when the vehicle of conveyance has
reached its agreed destination but must also extend to its vicinity in area and environment of control. In
this case the alighting of the steps and placement of the passenger on the pavement until he has walked
or reached a point in destination where is completely safe.
3. In this case, the passenger was not yet alighted nor has he reached a portion of the public road where
he is said to be successfully and completely disembarked.
4. A common carrier must always provide a safe environment for its passengers, in this case the sudden
acceleration even before the passenger has completely and safely alighted results in lack of wanton
care. Hence liable

Sps Perena. vs Sps. Zarate


G.R. no. 157917
August 29, 2012

Tags: Common Carrier, School Transport Business, Railroad, Joint & Solidary Liability

FACTS:

1. Sps. Perena are engaged in the business of transporting school children from their residences in
Paranaque to school.
2. Sps. Zarate engaged Sps. Perenas services to transport their son.
3. Sps. Perena proceeded to transport Sps. Zarate son.
4. The Transport crossed a railroad which had no markings, borders, and toll gates.
5. Upon crossing the vehicle transporting the school children collided with the train .
6. The children died as a result of the collision.
7. Sps. Perena raised defense that they exercised due diligence as a good father of a family by selecting
the experienced driver who had no pending admin or criminal cases involving his driving.
8. PNR raised defense that they exercised due diligence by honking and sounding off the horn when
passing near road crossings.

ISSUE:

1. Whether Sps. Perena and PNR are liable for the wrongful deaths.

HELD:

1. Sps. Perena who engage the transport of children from their homes and to the school in the eyes of the
law are common carriers (public, profit, non-discrimination, conveyance, occupation) hence must
observe EXOD, merely selecting proper driver is DGIF, not enough to refute the presumption of
negligence hence liable.
2. PNR is also a common carrier, being a railway transporting passengers to and from across Manila,
failure to construct and erect warning signs, toll gates, warning sounds, and crossing indicators is a
breach in the exercise of EXOD, hence liable.
3. Since both are contributory to the accident and death, they shall be JSL.

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First Phil Industrial Corporation Vs CA


G.R. No. 125948
December 29, 1998

Tags: Common Carrier by Operation of Law, Pipe Line distributor

FACTS:
1. FPIC is a grantee of a pipeline concession, authorized to transport petroleum products via pipes.
2. FPIC applies for a local business permit with the mayors office
3. Treasurer assesses them taxes
4. FPIC objects, contending that under the LGUC, common carriers are exempted from paying this type of
tax and that they should be refunded.

ISSUE:

1. Whether FPIC, one who transports petroleum through pipes across the nation or local jurisdiction
without making use air, land, water conveyances is a common carrier.

HELD:

1. FPIC is a common carrier by NCC 1732 (public, profit, non-discrimination, conveyance, occupation)
2. FPIC is a common carrier by RA 387 Art 86 Pipeline concessionaire as common carrier.

National Steel Corp vs CA


G.R. No. 112287
December 12, 1997

Tags: Common Carrier, Voyage Charter, Bareboat/Demise Charter, Limitation on Liability

FACTS:

1. NSX hired VSIs vessel under a voyage or bareboat charter to transport materials from one island to
another.
2. Upon arrival at port NSX noticed that its cargo was rusted and moist a condition that was not present
when the same was loaded.
3. NSX filed a claim of damages against VSI
4. VSI alleges that they are not responsible since their liability is limited by stipulation agreement of the
parties and the same was a bareboat charter.
5. VSI also presents documents that the ship is sea worthy.

ISSUE:

1. Whether VSI was a common carrier


2. Whether liability can be limited
3. What constitutes seaworthiness

HELD:

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1. VSI was not a common carrier (a) A bareboat charter was engaged this means VSI merely lent the
vessel while NSX manned the ship with a crew and was the same in charge of the control of the ship
during the voyage, hence VSI is a private carrier.
2. Being a private carrier, the stipulation limiting liability including the non-procurement of insurance of
the goods was also valid.
3. Seaworthiness is presumed on any ship at hindsight is capable of traversing the voyage, the same is
proven contrary when the ship itself suffers damage to its passengers or goods or to itself during the
voyage and is unable to continue the rest of the voyage.

De Guzman vs CA
G.R. No. L-47822
December 22, 1988

Tags: Common Carrier, Limited Clientele, Hijacking, Extra-Ordinary Diligence, Exclusive Defenses

FACTS:

1. Ernesto is a Junk trader/hauler, he loads his trucks with scrap to which he sells in Manila for a
premium.
2. On occasion in order to augment his income, he would also load goods that merchants wanted to bring
to Manila.
3. Petitioner is in the business of supplying milk.
4. During in one of Ernestos trips, he carried 750 cartons of Milk but was hijacked along the way.
5. This resulted in only having 150 cartons of milk delivered.
6. Petitioner wants compensation for the lost goods and damages
7. Ernesto raises defense that he is a private a carrier and his transportation of goods was merely ancillary
to his main occupation as a junk hauler and that his service was only available to the merchants located
near the area where he would stock junk.
8. Being a private carrier, he can raise the defense of force majeure to avoid liability.

ISSUE:

1. Is Ernesto a Common Carrier?

HELD:

1. Art 1732 NCC does not distinguish whether a carrier does the same as his regular or ancillary
occupation, done on a regular or fixed route, or merely offers the same to a narrow segment of the
general population(as long as it is offered to anyone willing to engage the service)
2. Even if he merely backhauled the same incidental for extra income it is undisputed that he charged the
merchants a premium or a fee for his service.
3. A certificate of public conveyance is not required for the law to see an entity or a business as a common
carrier.
4. Ernesto was a common carrier, hence the defenses available to him in case of negligence is (a)Acts of
God (b)public enemy (c)act or omission of shipper (d)character of goods (e)Order of public authority

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via ART 1734. High-jacking or allowing or subjecting the truck to be hijacked is a breach of EXOD. (a
safer route should have been plotted).

Loadstar Shipping Co vs CA
G.R. No. 131621
September 28, 1999

Tags: Common Carrier, Certificate of Public Conveyance, Subrogation, Insurance

FACTS:

1. Loadstar is a shipping company that transports goods from one point to another.
2. Goods transported by Loadstar was insured by MIC
3. Loadstar sank and the goods lost, Loadstar claims that it is a private carrier since (a)he was not Issued
a certificate of public conveyance (b)he does not maintain fixed routes (c)he does not maintain a regular
schedule of deportation or voyage.
4. Since Loadstar would not pay the value of the goods lost only the value of the goods declared on the
Bill of Lading, MIC was forced to pay the merchants of said lost goods.
5. Subrogated in his rights, MIC now seeks to claim from Loadstar the total value and not just the
declared value of the goods lost.

ISSUE:

1. Whether or not Loadstar is a common carrier

HELD:

1. Art 1732 NCC does not require or limit the common carrier to (a)regular routes (b) cert of public
conveyance (c)regular voyages
2. As long as a carrier charges a fee as for a service that is generally available to anyone who desires the
same without discrimination and obligates to transport goods or passengers is considered a common
carrier.
3. Loadstar is a common carrier and must be liable for the loss attributed to breach of EXOD. Since MIC
paid for the loss of said goods, as provided by the rules on subrogation MIC may claim whatever it had
paid to the merchants since the initial liability lies with loadstar.

Lighterage and Shipping Inc. vs CA


G.R. No. 147426
August 19, 2003

Tags: Common Carrier, Publicly Available, No Discrimination, No fixed Routes, No Regularity, No Tickets, No Booths

FACTS:

1. Petitioner transports goods from one point to another


2. Petitioner does not maintain fixed routes, scheduled departures, ticket booths, nor a cert of conveyance
3. Petitioner sank and lost the goods

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4. Insurer pays the value of the goods lost to the merchants


5. Insurer is subrogated in the rights
6. Petitioner does not pay claiming he is a private carrier

ISSUE:

1. Whether petitioner is a common carrier

HELD:

1. Petitioner is a common carrier ART 1732 NCC does not limit definition of common carriers to factors
like regularity, appearances. As long as the same holds it out to the public a service that offers to
transport goods, persons, or both from one point to another for a fee, the same is a common carrier.
2. Petitioner has to pay Insurer the amount paid to the merchants.

Fabre Jr. vs CA
G.R. No. 111127
July 26, 1996

Tags: Common Carrier, Non Regularity, Services to General Public and what it means

FACTS:

1. Petitioner owns two mini buses the like of which they use to transport school children
2. Petitioner was hired to transport a religious organization for their convention
3. Petitioner ran down the road broke a fence and hit a coconut tree resulting in injury of its passengers
4. Passengers raise the ISSUE of breach in EXOD and claims damages.
5. Petitioners claim they are private carriers since they only offer the service for school children
transportation and that the external contract was just an offshoot of their main business, it was private
in character, a one-time transaction in the spur of the moment.

ISSUE:

1. Whether petitioner is a common carrier.

HELD:

1. Art 1732 of the NCC does not limit the definition of a common carrier to variables like frequency of use,
public availability of service, ancillary activity to main business purpose, and single transactions.
2. The very nature of the transaction is that he shall transport passengers from one point to another for a
fee.
3. While his main business purpose the transportation of children from school to home is also for a fee
and publicly available.
4. Service to the public in general means does not mean a comprehensive public but may include a small
segment, market or demographic to which the carrier engages in commerce, as long as the carrier freely
accepts any client that wishes to engage his service without discrimination he is considered to be
engaging in a public service hence a common carrier.

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5. Petitioner is a common carrier and being as such must observe the obligations as well as EXOD, failing
this he is liable.

Home Assurance Co. vs American Steamship


G.R. No. L-25599
April 4, 1968

Tags: Private Carrier, Stipulation on limitation of liability, Bareboat, Demise

FACTS:

1. Latino Company engages in a bareboat/demise charter with American Steam to transport fish to
Manila.
2. The fish was insured by the exporters with Assurance Home
3. Upon arrival, the fish were damaged and shortages occurred. Home Assurance paid for the loss and
subrogated the rights of the merchants.
4. Home Assurance now claims indemnification with American Steamship the owner of the vessel.
5. American Steamship claims that they are not a common carrier for this transaction but merely a private
carrier by virtue of a bareboat/demise charter.
6. American Steamship further asserts that there is a stipulation limiting the liability of the owner of the
vessel that any loss shall not be attributed to American Steamship during the bareboat/demise charter.

ISSUE:

1. Whether a common carrier may be validly converted to a private carrier.


2. Whether the stipulation limiting liability is not contrary to law.

HELD:

1. A common carrier may be validly converted to a private carrier through a bareboat/demise charter.
2. A bareboat/demise charter basically turns over possession and usage of the ship to a private party who
supplies both crew and management of the ship during the voyage; it is during this period that said
charter party is a private carrier.
3. Being a private carrier; a stipulation limiting liability on the carrier is valid as long as it is not contrary
to law, burdensome, unfair, and iniquitous. In most cases proper compensation is garnered when there
is a reduction of liability.
4. In this sense, American Steamship is a private carrier and successfully evaded liability by the
stipulation and the Insurers claim should be with the private party during the bareboat/demise
voyage.

This is a severely summarized and shortened version of Transportation Jurisprudence.


It is highly recommended that you counter check and review the original Case Text Page 14
Atty. RCE Transportation Law Digested Cases 2017

Planters Products vs CA
G.R. No. 101503
September 15, 1953

Tags: Private Carrier, Ordinary Diligence, Bareboat, Demise

FACTS:

1. Planters purchased fertilizer from Mitsubishi Intl.


2. Agreed between parties was that Mitsubishi shall transport the fertilizer by ship
3. Mitsubishi has no ship, so they procured a time charter, bareboat/demise with KKKK
4. Mitsubishi mans the ship, and proceeds to load the fertilizer on the ship under the watchful eyes of
Planters.
5. Taking all precautions from the use of the tools, storing of the fertilizer using three redundant storage
tarps, lock and sealed in an air tight compartment that was previously cleaned.
6. Storage of said fertilizer was within the desired temperatures and set sailed on a clear day.
7. However in the middle of the voyage, strong winds came about and the rest of the voyage was a
struggle
8. Upon arrival it was noticed that a huge portion of the fertilizer was contaminated with sand and a
shortage of 100 metric tons.
9. Turns out that a certain chemical reaction brought on by the tools used and temperature fluctuation
resulted in the altering of the fertilizers composition.
10. Planters seek compensation for the loss from Mitsubishi Intl.

ISSUE:

1. Is Mitsubishi liable as a common carrier?

HELD:

1. Mitsubishi was a private carrier; he was not engaged in the business of transportation of goods but
undertook to transport the same since it was part of the order.
2. Mitsubishi engaged a bareboat charter to transport the same.
3. Mitsubishi exhausted all methods to ensure the safety of the goods and to protect its integrity;
including employing redundant safety measures.
4. Being a private Carrier, Mitsubishi was only required to exercise Ordinary Diligence not EXOD,
Mitsubishi successfully observed ordinary diligence even without a stipulation limiting liability.
5. Mitsubishi is not liable for the loss.
6. Planters bore the risk of loss when he opted to engage a private carrier rather than a common one,
assuming that there were no other shippers around, the same was the shippers risk.

This is a severely summarized and shortened version of Transportation Jurisprudence.


It is highly recommended that you counter check and review the original Case Text Page 15
Atty. RCE Transportation Law Digested Cases 2017

Caltex Phils. Vs Sulpicio Lines


G.R. No. 13116
September 30, 1999

Tags: Private Carrier, Bareboat/Demise, Affreightment, Ordinary Diligence, Collission

FACTS:

1. Caltex procured the services of MV Vector to transport fuel at charter from here to there.
2. Sulpicio Lines who owns MV Dona Pez departed also from another por.
3. In the middle of the seas both ships collided after exercising means to avoid collision.
4. All passengers of MV Dona Pez died, some members of Caltex died.
5. Heirs of the deceased passengers seek compensation for the wrongful death and filed an action for
damages from Sulpicio Lines.
6. Sulpicio Lines impleaded in their third party complaint MV Vector and Caltex.
7. The Regional court ordered the Sulpicio, Caltex and MV to pay the heirs.
8. Appeal was made and CA ruled to remove Caltex from those liable.

ISSUE:

1. Whether Caltex should be also be liable to the heirs of the deceased persons in the form of damages.

HELD:
1. Caltex is not liable, being only a private carrier, a charterer of MV Vector to transport the fuel.
2. Caltex exercised all the necessary diligence of private carrier, absent any negligence the private carrier
was able to prove seaworthiness and diligence in the operation of MV Vector chartered ship
3. Caltex did not act in bad faith, hence should not be liable for damages only.

This is a severely summarized and shortened version of Transportation Jurisprudence.


It is highly recommended that you counter check and review the original Case Text Page 16