TRANSPORTATION LAW
or civil;
Course Outline
I. PRELIMINARY CONSIDERATIONS
A. Pertinent Laws
1) New Civil Code of the Philippines
SECTION 4. - Common Carriers
SUBSECTION 1. - General Provisions
Art. 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.
Art. 1733.
Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and
for the safety of the passengers transported by them,
according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735, and
1745, Nos. 5, 6, and 7, while the extraordinary diligence for
the safety of the passengers is further set forth in Articles
1755 and 1756.
SUBSECTION 2. - Vigilance Over Goods
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;
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(2) Act of the public enemy in war, whether international
(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.
Art. 1735.
In all cases other than those mentioned in Nos. 1, 2, 3, 4,
and 5 of the preceding article, if the goods are lost,
destroyed or deteriorated, common carriers are presumed
to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as
required in Article 1733.
Art. 1736.
The extraordinary responsibility of the common carrier
lasts from the time the goods are unconditionally placed in
the possession of, and received by the carrier for
transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice
to the provisions of Article 1738.
Art. 1737.
The common carrier's duty to observe extraordinary
diligence over the goods remains in full force and effect
even when they are temporarily unloaded or stored in
transit, unless the shipper or owner has made use of the
right of stoppage in transitu.
Art. 1738.
The extraordinary liability of the common carrier
continues to be operative even during the time the goods
are stored in a warehouse of the carrier at the place of
destination, until the consignee has been advised of the
arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them.
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Art. 1739. (1) In writing, signed by the shipper or owner;

In order that the common carrier may be exempted from (2) Supported by a valuable consideration other than the
responsibility, the natural disaster must have been the service rendered by the common carrier; and
proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or (3) Reasonable, just and not contrary to public policy.
minimize loss before, during and after the occurrence of
flood, storm or other natural disaster in order that the Art. 1745.
common carrier may be exempted from liability for the
Any of the following or similar stipulations shall be
loss, destruction, or deterioration of the goods. The same
considered unreasonable, unjust and contrary to public
duty is incumbent upon the common carrier in case of an
policy:
act of the public enemy referred to in Article 1734, No. 2.
(1) That the goods are transported at the risk of the owner
Art. 1740.
or shipper;
If the common carrier negligently incurs in delay in
(2) That the common carrier will not be liable for any loss,
transporting the goods, a natural disaster shall not free
destruction, or deterioration of the goods;
such carrier from responsibility.
(3) That the common carrier need not observe any
Art. 1741.
diligence in the custody of the goods;
If the shipper or owner merely contributed to the loss,
(4) That the common carrier shall exercise a degree of
destruction or deterioration of the goods, the proximate
diligence less than that of a good father of a family, or of a
cause thereof being the negligence of the common carrier,
man of ordinary prudence in the vigilance over the
the latter shall be liable in damages, which however, shall
movables transported;
be equitably reduced.
(5) That the common carrier shall not be responsible for
Art. 1742.
the acts or omission of his or its employees;
Even if the loss, destruction, or deterioration of the goods
(6) That the common carrier's liability for acts committed
should be caused by the character of the goods, or the
by thieves, or of robbers who do not act with grave or
faulty nature of the packing or of the containers, the
irresistible threat, violence or force, is dispensed with or
common carrier must exercise due diligence to forestall or
diminished;
lessen the loss.
(7) That the common carrier is not responsible for the loss,
Art. 1743.
destruction, or deterioration of goods on account of the
If through the order of public authority the goods are defective condition of the car, vehicle, ship, airplane or
seized or destroyed, the common carrier is not responsible, other equipment used in the contract of carriage.
provided said public authority had power to issue the
Art. 1746.
order.
An agreement limiting the common carrier's liability may
Art. 1744.
be annulled by the shipper or owner if the common carrier
A stipulation between the common carrier and the shipper refused to carry the goods unless the former agreed to
or owner limiting the liability of the former for the loss, such stipulation.
destruction, or deterioration of the goods to a degree less
than extraordinary diligence shall be valid, provided it be:
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Art. 1747.
If the common carrier, without just cause, delays the
transportation of the goods or changes the stipulated or
usual route, the contract limiting the common carrier's
liability cannot be availed of in case of the loss,
destruction, or deterioration of the goods.
Art. 1748.
An agreement limiting the common carrier's liability for
delay on account of strikes or riots is valid.
Art. 1749.
A stipulation that the common carrier's liability is limited
to the value of the goods appearing in the bill of lading,
unless the shipper or owner declares a greater value, is
binding.
Art. 1750.
A contract fixing the sum that may be recovered. by the
owner or shipper for the loss, destruction, or deterioration
of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.
Art. 1751.
The fact that the common carrier has no competitor along
the line or route, or a part thereof, to which the contract
refers shall be taken into consideration on the question of
whether or not a stipulation limiting the common carrier's
liability is reasonable, just and in consonance with public
policy.
Art. 1752.
Even when there is an agreement limiting the liability of
the common carrier in the vigilance over the goods, the
common carrier is disputably presumed to have been
negligent in case of their loss, destruction or deterioration.
Art. 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.
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Art. 1754.
The provisions of Articles 1733 to 1753 shall apply to the
passenger's baggage which is not in his personal custody or
in that of his employee. As to other baggage, the rules in
Articles 1998 and 2000 to 2003 concerning the
responsibility of hotel-keepers shall be applicable.
SUBSECTION 3. - Safety of Passengers
Art. 1755.
A common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due
regard for all the circumstances.
Art. 1756.
In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed
extraordinary diligence as prescribed in Articles 1733 and
1755.
Art. 1757.
The responsibility of a common carrier for the safety of
passengers as required in Articles 1733 and 1755 cannot be
dispensed with or lessened by stipulation, by the posting of
notices, by statements on tickets, or otherwise.
Art. 1758.
When a passenger is carried gratuitously, a stipulation
limiting the common carrier's liability for negligence is
valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the
common carrier's liability.
Art. 1759.
Common carriers are liable for the death of or injuries to
passengers through the negligence or wilful acts of the
former's employees, although such employees may have
acted beyond the scope of their authority or in violation of
the orders of the common carriers.
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This liability of the common carriers does not cease upon cancel the certificate of public convenience granted to any
proof that they exercised all the diligence of a good father common carrier that repeatedly fails to comply with his or
of a family in the selection and supervision of their its duty to observe extraordinary diligence as prescribed in
employees. this Section.

Art. 1760. Art. 1766.

The common carrier's responsibility prescribed in the In all matters not regulated by this Code, the rights and
preceding article cannot be eliminated or limited by obligations of common carriers shall be governed by the
stipulation, by the posting of notices, by statements on the Code of Commerce and by special laws.
tickets or otherwise.
2) Code of Commerce
Art. 1761.
COMMERCIAL CONTRACTS FOR
The passenger must observe the diligence of a good father TRANSPORTATION
of a family to avoid injury to himself.
ARTICLE 349.
Art. 1762.
A contract of transportation by land or water ways of any
kind shall be considered commercial:
The contributory negligence of the passenger does not bar
recovery of damages for his death or injuries, if the 1. When it has for its object merchandise or any article
proximate cause thereof is the negligence of the common of commerce.
carrier, but the amount of damages shall be equitably
reduced. 2. When, whatever its object may be, the carrier is a
merchant or is habitually engaged in transportation for the
Art. 1763. public.

A common carrier is responsible for injuries suffered by a ARTICLE 350.

passenger on account of the wilful acts or negligence of
other passengers or of strangers, if the common carrier's The shipper as well as the carrier of merchandise or goods
employees through the exercise of the diligence of a good may mutually demand that a bill of lading be made, stating:
father of a family could have prevented or stopped the act
1. The name, surname and residence of the shipper.
or omission.
2. The name, surname and residence of the carrier.
SUBSECTION 4. - Common Provisions
3. The name, surname and residence of the person to
Art. 1764. whom or to whose order the goods are to be sent or
whether they are to be delivered to the bearer of said bill.
Damages in cases comprised in this Section shall be
awarded in accordance with Title XVIII of this Book, 4. The description of the goods, with a statement of their
concerning Damages. Article 2206 shall also apply to the kind, of their weight, and of the external marks or signs of
death of a passenger caused by the breach of contract by a the packages in which they are contained.
common carrier.
5. The cost of transportation.
Art. 1765.
6. The date on which shipment is made.
The Public Service Commission may, on its own motion
7. The place of delivery to the carrier.
or on petition of any interested party, after due hearing,

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8. The place and the time at which delivery to the
consignee shall be made.
9. The indemnity to be paid by the carrier in case of
delay, if there should be any agreement on this matter.
ARTICLE 351.
In transportation made by railroads or other enterprises
subject to regulation rate and time schedules, it shall be
sufficient for the bills of lading or the declaration of
shipment furnished by the shipper to refer, with respect to
the cost, time and special conditions of the carriage, to the
schedules and regulations the application of which he
requests; and if the shipper does not determine the
schedule, the carrier must apply the rate of those which
appear to be the lowest, with the conditions inherent
thereto, always including a statement or reference to in the
bill of lading which he delivers to the shipper.
ARTICLE 352.
The bills of lading, or tickets in cases of transportation of
passengers, may be diverse, some for persons and others
for baggage; but all of them shall bear the name of the
carrier, the date of shipment, the points of departure and
arrival, the cost, and, with respect to the baggage, the
number and weight of the packages, with such other
manifestations which may be considered necessary for
their easy identification.
ARTICLE 353.
The legal evidence of the contract between the shipper and
the carrier shall be the bills of lading, by the contents of
which the disputes which may arise regarding their
execution and performance shall be decided, no exceptions
being admissible other than those of falsity and material
error in the drafting.
After the contract has been complied with, the bill of
lading which the carrier has issued shall be returned to
him, and by virtue of the exchange of this title with the
thing transported, the respective obligations and actions
shall be considered cancelled, unless in the same act the
claim which the parties may wish to reserve be reduced to
writing, with the exception of that provided for in Article
366.
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In case the consignee, upon receiving the goods, cannot
return the bill of lading subscribed by the carrier, because
of its loss or of any other cause, he must give the latter a
receipt for the goods delivered, this receipt producing the
same effects as the return of the bill of lading.
ARTICLE 354.
In the absence of a bill of lading, disputes shall be
determined by the legal proofs which the parties may
present in support of their respective claims, according to
the general provisions established in this Code for
commercial contracts.
ARTICLE 355.
The responsibility of the carrier shall commence from the
moment he receives the merchandise, personally or
through a person charged for the purpose, at the place
indicated for receiving them.
ARTICLE 356.
Carriers may refuse packages which appear unfit for
transportation; and if the carriage is to be made by railway,
and the shipment is insisted upon, the company shall
transport them, being exempt from all responsibility if its
objections, is made to appear in the bill of lading.
ARTICLE 357.
If by reason of well-founded suspicion of falsity in the
declaration as to the contents of a package the carrier
should decide to examine it, he shall proceed with his
investigation in the presence of witnesses, with the shipper
or consignee in attendance.
If the shipper or consignee who has to be cited does not
attend, the examination shall be made before a notary, who
shall prepare a memorandum of the result of the
investigation, for such purposes as may be proper.
If the declaration of the shipper should be true, the
expense occasioned by the examination and that of
carefully repacking the packages shall be for the account of
the carrier and in a contrary case for the account of the
shipper.
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ARTICLE 358.
If there is no period fixed for the delivery of the goods the
carrier shall be bound to forward them in the first
shipment of the same or similar goods which he may make
point where he must deliver them; and should he not do
so, the damages caused by the delay should be for his
account.
ARTICLE 359.
If there is an agreement between the shipper and the
carrier as to the road over which the conveyance is to be
made, the carrier may not change the route, unless it be by
reason of force majeure; and should he do so without this
cause, he shall be liable for all the losses which the goods
he transports may suffer from any other cause, beside
paying the sum which may have been stipulated for such
case.
When on account of said cause of force majeure, the
carrier had to take another route which produced an
increase in transportation charges, he shall be reimbursed
for such increase upon formal proof thereof.
ARTICLE 360.
The shipper, without changing the place where the delivery
is to be made, may change the consignment of the goods
which he delivered to the carrier, provided that at the time
of ordering the change of consignee the bill of lading
signed by the carrier, if one has been issued, be returned to
him, in exchange for another wherein the novation of the
contract appears.
The expenses which this change of consignment occasions
shall be for the account of the shipper.
ARTICLE 361.
[The merchandise shall be transported at the risk and
venture of the shipper, if the contrary has not been
expressly stipulated.
As a consequence, all the losses and deteriorations which
the goods may suffer during the transportation by reason
of fortuitous event, force majeure, or the inherent nature
and defect of the goods, shall be for the account and risk
of the shipper.
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Proof of these accidents is incumbent upon the carrier.]
ARTICLE 362.
Nevertheless, the carrier shall be liable for the losses and
damages resulting from the causes mentioned in the
preceding article if it is proved, as against him, that they
arose through his negligence or by reason of his having
failed to take the precautions which usage has established
among careful persons, unless the shipper has committed
fraud in the bill of lading, representing the goods to be of a
kind or quality different from what they really were.
If, notwithstanding the precautions referred to in this
article, the goods transported run the risk of being lost, on
account of their nature or by reason of unavoidable
accident, there being no time for their owners to dispose
of them, the carrier may proceed to sell them, placing them
for this purpose at the disposal of the judicial authority or
of the officials designated by special provisions.
ARTICLE 363.
Outside of the cases mentioned in the second paragraph of
Article 361, the carrier shall be obliged to deliver the goods
shipped in the same condition in which, according to the
bill of lading, they were found at the time they were
received, without any damage or impairment, and failing to
do so, to pay the value which those not delivered may have
at the point and at the time at which their delivery should
have been made.
If those not delivered form part of the goods transported,
the consignee may refuse to receive the latter, when he
proves that he cannot make use of them independently of
the others.
ARTICLE 364.
If the effect of the damage referred to in Article 361 is
merely a diminution in the value of the goods, the
obligation of the carrier shall be reduced to the payment of
the amount which, in the judgment of experts, constitutes
such difference in value.
ARTICLE 365.
If, in consequence of the damage, the goods are rendered
useless for sale and consumption for the purposes for
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which they are properly destined, the consignee shall not
be bound to receive them, and he may have them in the
hands of the carrier, demanding of the latter their value at
the current price on that day.
If among the damaged goods there should be some pieces
in good condition and without any defect, the foregoing
provision shall be applicable with respect to those
damaged and the consignee shall receive those which are
sound, this segregation to be made by distinct and separate
pieces and without dividing a single object, unless the
consignee proves the impossibility of conveniently making
use of them in this form.
The same rule shall be applied to merchandise in bales or
packages, separating those parcels which appear sound.
ARTICLE 366.
Within the twenty-four hours following the receipt of the
merchandise, the claim against the carrier for damage or
average be found therein upon opening the packages, may
be made, provided that the indications of the damage or
average which gives rise to the claim cannot be ascertained
from the outside part of such packages, in which case the
claim shall be admitted only at the time of receipt.
After the periods mentioned have elapsed, or the
transportation charges have been paid, no claim shall be
admitted against the carrier with regard to the condition in
which the goods transported were delivered.
ARTICLE 367.
If doubts and disputes should arise between the consignee
and the carrier with respect to the condition of the goods
transported at the time their delivery to the former is
made, the goods shall be examined by experts appointed
by the parties, and, in case of disagreement, by a third one
appointed by the judicial authority, the results to be
reduced to writing; and if the interested parties should not
agree with the expert opinion and they do not settle their
differences, the merchandise shall be deposited in a safe
warehouse by order of the judicial authority, and they shall
exercise their rights in the manner that may be proper.
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ARTICLE 368.
The carrier must deliver to the consignee, without any
delay or obstruction, the goods which he may have
received, by the mere fact of being named in the bill of
lading to receive them; and if he does not do so, he shall
be liable for the damages which may be caused thereby.
ARTICLE 369.
If the consignee cannot be found at the residence indicated
in the bill of lading, or if he refuses to pay the
transportation charges and expenses, or if he refuses to
receive the goods, the municipal judge, where there is none
of the first instance, shall provide for their deposit at the
disposal of the shipper, this deposit producing all the
effects of delivery without prejudice to third parties with a
better right.
ARTICLE 370.
If a period has been fixed for the delivery of the goods, it
must be made within such time, and, for failure to do so,
the carrier shall pay the indemnity stipulated in the bill of
lading, neither the shipper nor the consignee being entitled
to anything else.
If no indemnity has been stipulated and the delay exceeds
the time fixed in the bill of lading, the carrier shall be liable
for the damages which the delay may have caused.
ARTICLE 371.
In case of delay through the fault of the carrier, referred to
in the preceding articles, the consignee may leave the
goods transported in the hands of the former, advising him
thereof in writing before their arrival at the point of
destination.
When this abandonment takes place, the carrier shall pay
the full value of the goods as if they had been lost or
mislaid.
If the abandonment is not made, the indemnification for
losses and damages by reason of the delay cannot exceed
the current price which the goods transported would have
had on the day and at the place in which they should have
been delivered; this same rule is to be observed in all other
cases in which this indemnity may be due.
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ARTICLE 372.
The value of the goods which the carrier must pay in cases
if loss or misplacement shall be determined in accordance
with that declared in the bill of lading, the shipper not
being allowed to present proof that among the goods
declared therein there were articles of greater value and
money.
Horses, vehicles, vessels, equipment and all other principal
and accessory means of transportation shall be especially
bound in favor of the shipper, although with respect to
railroads said liability shall be subordinated to the
provisions of the laws of concession with respect to the
property, and to what this Code established as to the
manner and form of effecting seizures and attachments
against said companies.
ARTICLE 373.
The carrier who makes the delivery of the merchandise to
the consignee by virtue of combined agreements or
services with other carriers shall assume the obligations of
those who preceded him in the conveyance, reserving his
right to proceed against the latter if he was not the party
directly responsible for the fault which gave rise to the
claim of the shipper or consignee.
The carrier who makes the delivery shall likewise acquire
all the actions and rights of those who preceded him in the
conveyance.
The shipper and the consignee shall have an immediate
right of action against the carrier who executed the
transportation contract, or against the other carriers who
may have received the goods transported without
reservation.
However, the reservation made by the latter shall not
relieve them from the responsibilities which they may have
incurred by their own acts.
ARTICLE 374.
The consignees to whom the shipment was made may not
defer the payment of the expenses and transportation
charges of the goods they receive after the lapse of twenty-
four hours following their delivery; and in case of delay in
this payment, the carrier may demand the judicial sale of
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the goods transported in an amount necessary to cover the
cost of transportation and the expenses incurred.
ARTICLE 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 eight days after the
delivery has been made, and once prescribed, the carrier
shall have no other action than that corresponding to him
as an ordinary creditor.
ARTICLE 376.
The preference of the carrier to the payment of what is
owed him for the transportation and expenses of the
goods delivered to the consignee shall not be cut off by the
bankruptcy of the latter, provided it is claimed within the
eight days mentioned in the preceding article.
ARTICLE 377.
The carrier shall be liable for all the consequences which
may arise from his failure to comply with the formalities
prescribed by the laws and regulations of the public
administration, during the whole course of the trip and
upon arrival at the point of destination, except when his
failure arises from having been led into error by falsehood
on the part of the shipper in the declaration of the
merchandise. If the carrier has acted by virtue of a formal
order of the shipper or consignee of the merchandise, both
shall become responsible.
ARTICLE 378.
Agents for transportation shall be obliged to keep a special
registry, with the formalities required by Article 36, in
which all the goods the transportation of which is
undertaken shall be entered in consecutive order of
number and dates, with a statement of the circumstances
required in Article 350 and others following for the
respective bills of lading.
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ARTICLE 379.
The provisions contained in Articles 349 and following
shall be understood as equally applicable to those who,
although they do not personally effect the transportation
of the merchandise, contract to do so through others,
either as contractors for a particular and definite operation,
or as agents for transportations and conveyances.
In either case they shall be subrogated in the place of the
carriers themselves, with respect to the obligations and
responsibility of the latter, as well as with regard to their
rights.
MARITIME COMMERCE
TITLE ONE
VESSELS
ARTICLE 573.
Merchant vessels constitute property which may be
acquired and transferred by any of the means recognized
by law. The acquisition of a vessel must appear in a written
instrument, which shall not produce any effect with
respect to third persons if not inscribed in the registry of
vessels.
The ownership of a vessel shall likewise be acquired by
possession in good faith, continued for three years, with a
just title duly recorded.
In the absence of any of these requisites, continuous
possession for ten years shall be necessary in order to
acquire ownership.
A captain may not acquire by prescription the vessel of
which he is in command.
ARTICLE 574.
Builders of vessels may employ the materials and follow,
with respect to their construction and rigging, the systems
most suitable to their interests. Ship owners and seamen
shall be subject to what the laws and regulations of the
public administration on navigation, customs, health,
safety of vessels, and other similar matters.
Aimee Nono Calo [Transportation Law]
ARTICLE 575.
Co-owners of vessels shall have the right of repurchase
and redemption in sales made to strangers, but they may
exercise the same only within the nine days following the
inscription of the sale in the registry, and by depositing the
price at the same time.
ARTICLE 576.
In the sale of a vessel it shall always be understood as
included the rigging, masts, stores and engine of a streamer
appurtenant thereto, which at the time belongs to the
vendor.
The arms, munitions of war, provisions and fuel shall not
be considered as included in the sale.
The vendor shall be under the obligation to deliver to the
purchaser a certified copy of the record sheet of the vessel
in the registry up to the date of the sale.
ARTICLE 577.
If the alienation of the vessel should be made while it is on
a voyage, the freightage which it earns from the time it
receives its last cargo shall pertain entirely to the purchaser,
and the payment of the crew and other persons who make
up its complement for the same voyage shall be for his
account.
If the sale is made after the vessel has arrived at the port of
its destination, the freightage shall pertain to the vendor,
and the payment of the crew and other individuals who
make up its complement shall be for his account, unless
the contrary is stipulated in either case.
ARTICLE 578.
If the vessel being on a voyage or in a foreign port, its
owner or owners should voluntarily alienate it, either to
Filipinos or to foreigners domiciled in the capital or in a
port of another country, the bill of sale shall be executed
before the consul of the Republic of the Philippines at the
port where it terminates its voyage and said instrument
shall produce no effect with respect to third persons if it is
not inscribed in the registry of the consulate. The consul
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shall immediately forward a true copy of the instrument of
purchase and sale of the vessel to the registry of vessels of
the port where said vessel is inscribed and registered.
In every case the alienation of the vessel must be made to
appear with a statement of whether the vendor receives its
price in whole or in part, or whether he preserves in whole
or in part any claim on said vessel. In case the sale is made
to a Filipino, this fact shall be stated in the certificate of
navigation.
When a vessel, being on a voyage, shall be rendered useless
for navigation, the captain shall apply to the competent
judge on court of the port of arrival, should it be in the
Philippines; and should it be in a foreign country, to the
consul of the Republic of the Philippines, should there be
one, or, where there is none, to the judge or court or to the
local authority; and the consul, or the judge or court, shall
order an examination of the vessel to be made.
If the consignee or the insurer should reside at said port,
or should have representatives there, they must be cited in
order that they may take part in the proceedings on behalf
of whoever may be concerned.
ARTICLE 579.
After the damage to the vessel and the impossibility of her
being repaired, in order to continue the voyage had been
shown, its sale at public auction shall be ordered, subject to
the following rules:
1. The hull of the vessel, its rigging, engines, stores, and
other articles shall be appraised, after making an inventory,
said proceedings to be brought to the notice of the persons
who may wish to take part in the auction.
2. The order or decree ordering the auction to be held shall
be posted in the usual places, an announcement thereof to
be inserted in the Official Gazette and in two of the
newspapers of the largest circulation of the port where the
auction is to be held, should there be any.
The period which may be fixed for the auction shall not be
less than twenty days.
Aimee Nono Calo [Transportation Law]
3. These announcements shall be repeated every ten days,
and their publication shall be made to appear in the
records.
4. The auction shall be held on the day fixed, with the
formalities prescribed in the common law for judicial sales.
5. If the sale should take place while the vessel is in a
foreign country, the special provisions governing such
cases shall be observed.
ARTICLE 580.
In all judicial sales of any vessel for the payment of
creditors, the following shall have preference in the order
stated
1. The credit in favor of the public treasury proven by
means of an official certificate of competent authority.
2. The judicial costs of the proceedings, according to an
appraisement approved by the judge or court.
3. The pilotage charges, tonnage dues, and the other sea or
port charges, proven by means of proper certificates of the
officers intrusted with the collection thereof.
4. The salaries of the depositaries and keepers of the vessel
and any other expenses for its preservation from the time
of arrival at the port until the sale, which appear to have
been paid or be due by virtue of an account verified and
approved by the judge or court.
5. The rent of the warehouse where the rigging and stores
of the vessel have been taken care of, according to
contract.
6. The salaries due the captain and crew during its last
voyage, which shall be verified by means of the liquidation
to be made in view of the lists and of the books of account
of the vessel, approved by the chief of the Bureau of
Merchant Marine, where there is one, and in his absence
by the consul or judge or court.
7. The reimbursement for the goods of the freight which
the captain may have sold in order to repair the vessel,
provided that the sale has been ordered through a judicial
proceedings held with the formalities required in such
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cases, and recorded in the certificate of registry of the
vessel.
8. The part of the price which has not been paid to the said
vendor, the unpaid credits for materials and labor in the
construction of the vessel, when it has not navigated, and
those arising from the repair and equipment of the vessels
and from its provisioning with victuals and fuel during the
last voyage.
In order that the credits provided for in this subdivision
may enjoy this preference, they must appear by contracts
recorded in the registry of vessels, or if they were
contracted for the vessel while on a voyage and said vessel
has not returned to the port where it is registered, they
must be made with the authorization required for such
cases and annotated in the certificate of registration of the
vessel.
9. The amount borrowed on bottomry on the hull, keel,
tackle, and stores of the vessel before its departure, proven
by means of the contract executed according to law and
recorded in the registry of vessels; those borrowed during
the voyage with the authorization mentioned in the
preceding subdivision, satisfying the same requisites; and
the insurance premium, proven by the insurance policy or
a certificate taken from the books of the broker.
10. The indemnity due the shipper for the value of the
goods shipped which were not delivered to the consignees,
or for averages suffered for which the vessel is liable,
provided that either appear in a judicial or arbitration
decision.
ARTICLE 581.
If the proceeds of the sale should not be sufficient to pay
all the creditors included in one number or grade, the
residue shall be divided among them pro rata.
ARTICLE 582.
After the bill of the judicial sale at public auction has been
executed and inscribed in the registry of vessels, all the
other liabilities of the vessel in favor of the creditors shall
be considered extinguished.
Aimee Nono Calo [Transportation Law]
But if the sale should have been voluntary and should have
been made while the vessel was on a voyage, the creditors
shall preserve their rights against the vessel until it returns
to the port of her registry, and three months after the
inscription of the sale in the registry of vessel or the arrival.
ARTICLE 583.
If while on a voyage the captain should find it necessary to
contract one or more of the obligations mentioned in
subdivisions 8 and 9 of Article 580, he shall apply to the
judge or court if he is in Philippine territory, and otherwise
to the consul of the Republic of the Philippines, should
there be one, and, in his absence, to the judge or court or
proper local authority, presenting the certificate of the
registration sheet treated of in Article 612 and the
instruments proving the obligation contracted.
The judge or court, the consul, or the local authority, as
the case may be, in view of the result of the proceedings
instituted, shall make a temporary memorandum of their
result in the certificate, in order that it may be recorded in
the registry when the vessel returns to the port of its
registry, or so that it can be admitted as a legal and
preferred obligation in case of sale before its return, by
reason of the sale of the vessel on account of a declaration
of unseaworthiness.
The omission of this formality shall make the captain
personally liable for the credits prejudiced on his account.
ARTICLE 584.
The vessels subject to liability for the credits mentioned in
Article 580 may be attached and judicially sold in the
manner prescribed in Article 579, in the port in which they
may be found, at the instance of any of the creditors; but if
they should be loaded and ready to sail, the attachment
may not be effected except for debts contracted to prepare
and provision the vessel for the same voyage, and even
then the attachment shall be dissolved if any person
interested in its sailing should give a bond for the return of
the vessel within the period fixed in the certificate of
navigation binding himself to pay the indebtedness insofar
as it may be legal, should it fail to do so, even if this failure
be due to fortuitous event.
Page 11
For debts of any other kind whatsoever not comprised
within the said Article 580, the vessel may be attached only
in the port of her registry.
ARTICLE 585.
For all purposes of law not modified or restricted by the
provisions of this Code, vessels shall continue to be
considered as personal property.
TITLE TWO
PERSONS WHO TAKE PART IN MARITIME
COMMERCE
SECTION ONE
SHIPOWNERS AND SHIP AGENTS
ARTICLE 586.
The shipowner and the ship agent shall be civilly liable for
the acts of the captain and for the obligations contracted
by the latter to repair, equip, and provision the vessel,
provided the creditor proves that the amount claimed was
invested for the benefit of the same.
By ship agent is understood the person entrusted with
provisioning or representing the vessel in the port in which
it may be found.
ARTICLE 587.
The ship agent shall also be civilly liable for the
indemnities in favor of third persons which may arise from
the conduct of the captain in the care of the goods which
he loaded on the vessel; but he may exempt himself
therefrom by abandoning the vessel with all her
equipments and the freight it may have earned during the
voyage.
ARTICLE 588.
Neither the shipowner nor the ship agent shall be liable for
the obligations contracted by the captain, if the latter
exceeds the powers and privileges pertaining to him by
reason of his position or conferred upon him by the
former.
Aimee Nono Calo [Transportation Law]
Nevertheless, if the amounts claimed were invested for the
benefit of the vessel, the responsibility therefor shall
devolve upon its owner or agent.
ARTICLE 589.
If two or more persons should be part owners of a
merchant vessel, a partnership shall be presumed as
established by the co-owners.
This partnership shall be governed by the resolutions of
the majority of the members.
If the part owners should not be more than two, the
disagreement of views, if any, shall be decided by the vote
of the member having the largest interest. If the interests
are equal, it should be decided by lot.
The person having the smallest share in the ownership
shall have one vote; and proportionately the other part
owners as many votes as they have parts equal to the
smallest one.
A vessel may not be detained, attached or levied upon in
execution in its entirety, for the private debts of a part
owner, but the proceedings shall be limited to the interest
which the debtor may have in the vessel, without
interfering with the navigation.
ARTICLE 590.
The co-owners of a vessel shall be civilly liable in the
proportion of their interests in the common fund, for the
results of the acts of the captain, referred to in Article 587.
Each co-owner may exempt himself from this liability by
the abandonment, before a notary, of the part of the vessel
belonging to him.
ARTICLE 591.
All the part owners shall be liable, in proportion to their
respective ownership, for the expenses for repairing the
vessel, and for other expenses which are incurred by virtue
of a resolution of the majority.
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They shall likewise be liable in the same proportion for the
expenses for the maintenance, equipment, and
provisioning of the vessel, necessary for navigation.
ARTICLE 592.
The resolution of the majority with regard to the repair,
equipment, and provisioning of the vessel in the port of
departure shall bind the minority, unless the minority
members renounce their interests, which must be acquired
by the other co-owners, after a judicial appraisement of the
value of the portion or portions assigned.
The resolutions of the majority relating to the dissolution
of the partnership and sale of the vessel shall also be
binding on the minority.
The sale of the vessel must be made at public auction,
subject to the provisions of the law of civil procedure,
unless the co-owners unanimously agree otherwise, saying
always the right of repurchase and redemption provided
for in Article 575.
ARTICLE 593.
The owners of a vessel shall have preference in her charter
over other persons, under the same conditions and price.
If two or more of them should claim this right, the one
having the greater interest shall be preferred; and should
they have equal interests, the matter shall be decided by
lot.
ARTICLE 594.
The co-owners shall elect the manager who is to represent
them in the capacity of ship agent.
The appointment of director or ship agent shall be
revocable at the will of the members.
ARTICLE 595.
The ship agent, whether he is at the same time the owner
of the vessel, or a manager for an owner or for an
association of co-owners, must have the capacity to trade
and must be recorded in the merchant's registry of the
province.
Aimee Nono Calo [Transportation Law]
The ship agent shall represent the ownership of the vessel,
and may, in his own name and in such capacity, take
judicial and extrajudicial steps in matters relating to
commerce.
ARTICLE 596.
The ship agent may discharge the duties of captain of the
vessel, subject in every case to the provision of Article 609.
If two or more co-owners apply for the position of
captain, the disagreement shall be decided by a vote of the
members; and if the vote should result in a tie, it shall be
decided in favor of the co-owner having the larger interest
in the vessel.
If the interests of the applicants should be equal, and there
should be a tie, the matter shall be decided by lot.
ARTICLE 597.
The ship agent shall designate and come to terms with the
captain, and shall contract in the name of the owners, who
shall be bound in all that refer to repairs, details of
equipment, armament, provisions of food and fuel, and
freight of the vessel, and, in general, in all that relate to the
requirements of navigation.
ARTICLE 598.
The ship agent may not order a new voyage, or make
contracts for a new charter, or insure the vessel, without
the authorization of its owner or resolution of the majority
of the coowners, unless these powers were granted him in
the certificate of his appointment.
If he insures the vessel without authorization therefore, he
shall be subsidiarily liable for the solvency of the insurer.
ARTICLE 599.
The ship agent managing for an association shall render to
his associates an account of the results of each voyage of
the vessel, without prejudice to always having the books
and correspondence relating to the vessel and to its
voyages at their disposal.
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ARTICLE 600.
After the account of the managing agent has been
approved by a relative majority, the co-owners shall pay
the expenses in proportion to their interest, without
prejudice to the civil or criminal actions which the minority
may deem fit to institute afterwards.
In order to enforce the payment, the managing agent shall
be entitled to an executory action ("accion ejecutiva"),
which shall be instituted by virtue of a resolution of the
majority, and without further proceedings than the
acknowledgment of the signatures of the persons who
voted for the resolution.
ARTICLE 601.
Should there be any profits, the co-owners may demand of
the managing agent the amount corresponding to their
interests by means of an executory action ("accion
ejecutiva"), without any other requisite than the
acknowledgment of the signatures on the instrument
approving the account.
ARTICLE 602.
The ship agent shall indemnify the captain for all the
expenses he may have incurred with funds of his own or
of others, for the benefit of the vessel.
ARTICLE 603.
Before the vessel sets out to sea the ship agent may at his
discretion discharge the captain and members of the crew
whose contracts are not for a definite period or voyage,
paying them the salaries earned according to their
contracts, and without any indemnity whatsoever, unless
there is an express and specific agreement in respect
thereto.
ARTICLE 604.
If the captain or any other member of the crew should be
discharged during the voyage, they shall receive their salary
until they return to the port where the contract was made,
unless there should be just cause for the discharge, all in
accordance with Article 636 and following of this Code.
Aimee Nono Calo [Transportation Law]
ARTICLE 605.
If the contracts of the captain and members of the crew
with the ship agent should be for a definite period or
voyage, they may not be discharged until after the
fulfillment of their contracts, except by reason of
insubordination in serious matters, robbery, theft, habitual
drunkenness, or damage caused to the vessel or to its cargo
through malice or manifest or proven negligence.
ARTICLE 606.
If the captain should be a co-owner of the vessel, he may
not be discharged unless the ship agent returns to him the
amount of his interest therein, which, in the absence of
agreement between the parties, shall be appraised by
experts appointed in the manner established in the law of
civil procedure.
ARTICLE 607.
If the captain who is a co-owner should have obtained the
command of the vessel by virtue of a special agreement
contained in the articles of association, he may not be
deprived of his office except for the causes mentioned in
Article 605.
ARTICLE 608.
In case of the voluntary sale of the vessel, all contracts
between the ship agent and the captain shall terminate,
reserving to the latter his right to the indemnity which may
pertain to him, according to the agreements made with the
ship agent.
They vessel sold shall remain subject to the security of the
payment of said indemnity if, after the action against the
vendor has been instituted, the latter is found to be
insolvent.
SECTION TWO
CAPTAINS AND MASTERS OF VESSELS
ARTICLE 609.
Captains, masters or patrons of vessels must be Filipinos,
have legal capacity to contract in accordance with this
Page 14
code, and prove the skill, capacity, and qualifications
necessary to command and direct the vessel, as established
by marine or navigation laws, ordinances, or regulations,
and must not be disqualified according to the same for the
discharge of the duties of the position.
If the owner of a 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 intrust the navigation to a person possessing the
qualifications required by said ordinances and regulations.
ARTICLE 610.
The following powers shall be inherent in the position of
captain, master or patron of a vessel:
1. To appoint or make contracts with the crew in the
absence of the ship agent, and to propose said crew,
should said agent be present; but the ship agent may not
employ any member against the captain's express refusal.
2. To command the crew and direct the vessel to the port
of its destination, in accordance with the instructions he
may have received from the ship agent.
3. To impose, in accordance with the contracts and with
the laws and regulations of the merchant marine, and when
on board the vessel, correctional punishment upon those
who fail to comply with his orders or are wanting in
discipline, holding a preliminary hearing on the crimes
committed on board the vessel on the seas, which crimes
shall be turned over to the authorities having jurisdiction
over the same at the first port touched.
4. To make contracts for the charter of the vessel in the
absence of the ship agent or of its consignee, acting in
accordance with the instructions received and protecting
the interests of the owner with utmost care.
5. To adopt all proper measures to keep the vessel well
supplied and equipped, purchasing all that may be
necessary for the purpose, provided there is no time to
request instruction from the ship agent.
6. To order, in similar urgent cases while on a voyage, the
repairs on the hull and engines of the vessel and in its
Aimee Nono Calo [Transportation Law]
rigging and equipment, which are absolutely necessary to
enable it to continue and finish its voyage; but if he should
arrive at a point where there is a consignee of the vessel, he
shall act in concurrence with the latter.
ARTICLE 611.
In order to comply with the obligations mentioned in the
preceding article, the captain, when he has no funds and
does not expect to receive any from the ship agent, shall
obtain the same in the successive order stated below:
1. By requesting said funds from the consignee of the
vessel or correspondents of the ship agent.
2. By applying to the consignees of the cargo or to those
interested therein.
3. By drawing on the ship agent.
4. By borrowing the amount required by means of a loan
on bottomry.
5. By selling a sufficient amount of the cargo to cover the
sum absolutely indispensable for the repair of the vessel
and to enable it to continue its voyage.
In these two last cases he must apply to the judicial
authority of the port, if in the Philippines, and to the
consul of the Republic of the Philippines if in a foreign
country, and where there is none, to the local authority,
proceeding in accordance with the provisions of Article
583, and with the provisions of the law of civil procedure.
ARTICLE 612.
The following obligations shall be inherent in the office of
captain:
1. To have on board before starting on a voyage a detailed
inventory of the hull, engines, rigging, spare-masts, tackle,
and other equipment of the vessel; the royal or the
navigation certificate; the roll of the persons who make up
the crew of the vessel, and the contracts entered into with
them; the lists of passengers; the bill of health; the
certificate of the registry proving the ownership of the
vessel and all the obligations which encumber the same up
to that date; the charter parties or authenticated copies
Page 15
thereof; the invoices or manifests of the cargo, and the
memorandum of the visit or inspection by experts, should
it have been made at the port of departure.
2. To have a copy of this code on board.
3. To have three folioed and stamped books, placing at the
beginning of each one a memorandum of the number of
folios it contains, signed by the maritime authority, and in
his absence by the competent authority.
In the first book, which shall be called "log book," he shall
enter day by day the condition of the atmosphere, the
prevailing winds, the courses taken, the rigging carried, the
power of the engines used in navigation, the distances
covered, the maneuvers executed, and other incidents of
navigation; he shall also enter the damage suffered by the
vessel in her hull, engines, rigging, and tackle, no matter
what its cause may be, as well as the impairment and
damage suffered by cargo, and the effect and importance
of the jettison, should there be any; and in cases of serious
decisions which require the advice or a meeting of the
officers of the vessel, or even of the crew and passengers,
he shall record the decisions adopted. For the information
indicated he shall make use of the binnacle book and of
the steam of engine book kept by the engineer.
In the second book called the "accounting book," he shall
record all the amounts collected and paid for the account
of the vessel, entering specifically article by article, the
source of the collection and the amounts spent for
provisions, repairs, acquisitions of equipment or goods,
fuel, food, outfits, wages, and other expenses of whatever
nature they may be. He shall furthermore enter therein a
list of all the members of the crew, stating their domiciles,
their wages and salaries, and the amounts they may have
received on account, directly or by delivery to their
families.
In the third book, called "freight book," he shall record the
loading and discharge of all the goods, stating their marks
and packages, names of the shippers and of the
consignees, ports of loading and unloading, and the
freightage they give. In this same book he shall record the
names and places of sailing of the passengers, the number
of packages in their baggage, and the price of passage.
Aimee Nono Calo [Transportation Law]
4. Before receiving cargo, to make with the officers of the
crew and two experts, if required by the shippers and
passengers, an examination of the vessel, in order to
ascertain whether it is water-tight, with the rigging and
engines in good condition, and with the equipment
required for good navigation, preserving under his
responsibility a certificate of the memorandum of his
inspection, signed by all those who may have taken part
therein.
The experts shall be appointed, one by the captain of the
vessel and another by those who request its examination,
and in case of disagreement a third shall be appointed by
the marine authority of the port or by the authority,
exercising his functions.
5. To remain constantly on board the vessel with the crew
while the cargo is being taken on board and to carefully
watch the stowage thereof; not to consent to the loading
of any merchandise or matter of a dangerous character,
such as inflammable or explosive substances, without the
precautions which are recommended for their packing,
handling and isolation; not to permit the carriage on deck
of any cargo which by reason of its arrangement, volume,
or weight makes the work of the sailors difficult, and
which might endanger the safety of the vessel; and if, on
account of the nature of the merchandise, the special
character of the shipment, and principally the favorable
season in which it is undertaken, merchandise may be
carried on deck, he must hear the opinion of the officers
of the vessel and have the consent of the shippers and of
the ship agent.
6. To demand a pilot at the expense of the vessel whenever
required by the navigation, and principally when he has to
enter a port, canal, or river, or has to take a roadstead or
anchoring place with which neither he nor the officers and
crew are acquainted.
7. To be on deck on reaching land and to take command
on entering and leaving ports, canals, roadsteads, and
rivers, unless there is a pilot on board discharging his
duties. He shall not spend the night away from the vessel
except for serious causes or by reason of official business.
8. To present himself, when making a port in distress, to
the maritime authority if in the Philippines and to the
Page 16
consul of the Republic of the Philippines if in a foreign
country, before twenty-four hours have elapsed, and to
make a statement of the name registry, and port of
departure of the vessel, of its cargo, and the cause of
arrival which declaration shall be visited by the authority or
the consul, if after examining the same it is found to be
acceptable, giving the captain the proper certificate proving
his arrival in distress and the reasons therefor. In the
absence of the maritime authority or of the consul, the
declaration must be made before the local authority.
9. To take the necessary steps before the competent
authority in order to record in the certificate of the vessel
in the registry of vessels the obligations which he may
contract in accordance with Article 583.
10. To place under good care and custody all the papers
and belongings of any members of the crew who might die
on the vessel, drawing up a detailed inventory, in the
presence of passengers, or, in their absence, of members of
the crew as witnesses.
11. To conduct himself according to the rules and precepts
contained in the instructions of the ship agent, being liable
for all that which he may do in violation thereof.
12. To inform the ship agent from the port at which the
vessel arrives, of the reason of his arrival, taking advantage
of the semaphore, telegraph, mail, etc., as the case may be;
to notify him of the cargo he may have received, stating
the names and domiciles of the shippers, freightage earned,
and amounts borrowed on bottomry loan; to advise him of
his departure, and of any operation and date which may be
of interest to him.
13. To observe the rules with respect to situation, lights
and maneuvers in order to avoid collisions.
14. To remain on board, in case the vessel is in danger,
until all hope to save it is lost, and before abandoning it, to
hear the officers of the crew, abiding by the decision of the
majority; and if the boats are to be taken to, he shall take
with him, before anything else, the books and papers, and
then the articles of most value, being obliged to prove, in
case of the loss of the books and papers, that he did all he
could to save them.
Aimee Nono Calo [Transportation Law]
15. In case of wreck, to make the proper protest in due
form at the first port of arrival, before the competent
authority or the Philippine consul, within twenty-four
hours, specifying therein all the incidents of the wreck, in
accordance with subdivision 8 of this article.
16. To comply with the obligations imposed by the laws
and regulations on navigation, customs, health, and others.
ARTICLE 613.
A captain who navigates for freight in common or on
shares may not make any separate transaction for his own
account; and should he do so, the profit which may accrue
shall belong to the other persons interested, and the losses
shall be borne by him exclusively.
ARTICLE 614.
A captain who, having made an agreement to make a
voyage, fails to perform his undertaking, without
prevented by fortuitous accident or force majeure, shall
indemnify for all the losses which he may cause without
prejudice to the criminal penalties which may be proper.
ARTICLE 615.
Without the consent of the agent, the captain cannot have
himself substituted by another person; and should he do
so, besides being liable for all the acts of the substitute and
bound to the indemnities mentioned in the foregoing
articles, the captain as well as the substitute may be
discharged by the ship agent.
ARTICLE 616.
If the provisions and fuel of the vessel should be
consumed before arriving at the port of destination, the
captain shall order, with the consent of the officers of the
same, the arrival at the nearest port to get a supply of
either; but if there are persons on board who have
provisions of their own, he may force them to deliver said
provision for the common consumption of all those who
may be on board, paying the price thereof at the same
time, or at the latest, at the first port reached.
Page 17
ARTICLE 617.
The captain may not contract loans on respondentia
secured by the cargo; and should he do so, the contracts
shall be void.
Neither may he borrow money on bottomry for his own
transactions, except on the portion of the vessel he owns,
provided no money has been previously borrowed on the
whole vessel, and there does not exist any other kind of
lien or obligation chargeable against the vessel. If he may
do so, he must state what interest he has in the vessel.
In case of violation of this article, the principal, interest,
and costs shall be for the personal account of the captain,
and the ship agent may furthermore discharge him.
ARTICLE 618.
The captain shall be civilly liable to the ship agent, and the
latter to the third persons who may have made contracts
with the former;
1. For all the damages suffered by the vessel and its cargo
by reason of want of skill or negligence on his part. If a
misdemeanor or crime has been committed, he shall be
liable in accordance with the Penal Code.
2. For all the thefts committed by the crew, reserving his
right of action against the guilty parties.
3. For the losses, fines, and confiscations imposed an
account of violation of customs, police, health, and
navigation laws and regulations.
4. For the losses and damages caused by mutinies on board
the vessel or by reason of faults committed by the crew in
the service and defense of the same, if he does not prove
that he made timely use of all his authority to prevent or
avoid them.
5. For those caused by the misuse of the powers and the
non-fulfillment of the obligations pertaining to him in
accordance with Articles 610 and 612.
6. For those arising by reason of his going out of his
course or taking a course which he should not have taken
without sufficient cause, in the opinion of the officers of
Aimee Nono Calo [Transportation Law]
the vessel, at a meeting with the shippers or supercargoes
who may be on board.
No exceptions whatsoever shall exempt him from this
obligation.
7. For those arising by reason of his voluntarily entering a
port other than that of his destination, outside of the cases
or without the formalities referred to in Article 612.
8. For those arising by reason of non-observance of the
provisions contained in the regulations on situation of
lights and maneuvers for the purpose of preventing
collisions.
ARTICLE 619.
The captain shall be liable for the cargo from the time it is
delivered to him at the dock or afloat alongside the at the
port of loading, until he delivers it on the shore or on the
discharging wharf at the port of unloading, unless the
contrary has been expressly agreed upon.
ARTICLE 620.
The captain shall not be liable for the damages caused to
the vessel or to the cargo by force majeure; but he shall
always be so for those arising through his own fault, no
agreement to the contrary being valid.
Neither shall he be personally liable for the obligations he
may have contracted for the repair, equipment, and
provisioning of the vessel, which shall devolve upon the
ship agent, unless the former has expressly bound himself
personally or has signed a bill of exchange or promissory
note in his name.
ARTICLE 621.
A captain who borrows money on the hull, engine, rigging
or tackle of the vessel, or pledges or sells merchandise or
provisions outside of the cases and without the formalities
prescribed in this Code, shall be liable for the principal,
interests, and costs, and shall indemnify for the damages
he may cause.
Page 18
He who commits fraud in his accounts shall pay the
amount defrauded and shall be subject to the provisions of
the Penal Code.
ARTICLE 622.
If while on a voyage the captain should learn of the
appearance of privateers or men of war against his flag, he
shall be obliged to make the nearest neutral port, inform
his agent or shippers, and await an occasion to sail under
convoy, or until the danger is over or he has received
express orders from the ship agent or the shippers.
ARTICLE 623.
If he should be attacked by a privateer, and, after having
tried to avoid the encounter and having resisted the
delivery of the effects of the vessel or its cargo, they
should be forcibly taken away from him, or he should be
obliged to deliver them, he shall make an entry thereof in
his freight book and shall prove the fact before the
competent authority at the first port he touches.
After the force majeure has been proved, he shall be
exempted from liability.
ARTICLE 624.
A captain whose vessel has gone through a hurricane or
who believes that the cargo has suffered damages or
averages, shall make a protest thereon before the
competent authority at the first port he touches, within
twenty-four hours following his arrival and shall ratify it
within the same period when he arrives at his destination,
immediately proceeding with the proof of the facts, and he
may not open the hatches until after this has been done.
The captain shall proceed in the same manner, if, the
vessel having been wrecked; he is saved alone or with part
of his crew, in which case he shall appear before the
nearest authority, and make a sworn statement of facts.
The authority or the consul shall verify the said facts
receiving sworn statements of the members of the crew
and passengers who may have been saved; and taking such
other steps as may assist in arriving at the facts he shall
make a statement of the result of the proceedings in the
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log book and in that of the sailing mate, and shall deliver
to the captain the original record of the proceedings,
stamped and folioed, with a memorandum of the folios,
which he must rubricate, in order that it may be presented
to the judge or court of the port of destination.
The statement of the captain shall be accepted if it is in
accordance with those of the crew and passengers; if they
disagree, the latter shall be accepted, always saying proof to
the contrary.
ARTICLE 625.
The captain, under his personal responsibility as soon as he
arrives at the port of destination, should get the necessary
permission from the health and customs officers, and
perform the other formalities required by the regulations
of the administration, delivering the cargo without any
defalcation, to the consignee, and in a proper case, the
vessel, rigging, and freightage to the ship agent.
If by reason of the absence of the consignee or on account
of the nonappearance of a legal holder of the bills of
lading, the captain should not know to whom he is to
legally make the delivery of the cargo, he shall place it at
the disposal of the proper judge or court or authority, in
order that he may determine what is proper with regard to
its deposit, preservation and custody.
SECTION THREE
OFFICERS AND CREW OF VESSELS
ARTICLE 626.
In order to be a sailing mate it shall be necessary:
1. To have the qualifications required by the marine or
navigation laws or regulations.
2. Not to be disqualified in accordance therewith for the
discharge of his duties.
ARTICLE 627.
The sailing mate, as the second chief of the vessel, and
unless the agent orders otherwise, shall take the place of
the captain in cases of absence, sickness, or death, and
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shall then assume all his powers, duties, and
responsibilities.
ARTICLE 628.
The sailing mate must provide himself with charts of the
seas in which he will navigate with the astronomical tables
and instruments for observation which are in use and
which are necessary for the discharge of his duties, being
liable for the accidents which may arise by reason of his
omission in this regard.
ARTICLE 629.
The sailing mate shall particularly and personally keep a
book, folioed and stamped on all its pages, denominated
"Binnacle Book" with a memorandum at the beginning
stating the number of folios it contains, signed by the
competent authority, and shall enter therein daily the
distance, the course travelled, the variations of the needle,
the leeway, the direction and force of the wind, the
condition of the atmosphere and of the sea, the rigging set,
the latitude and longitude observed, the number of furnace
heated, the steam pressure, the number of revolutions, and
under the title "incidents," the maneuvers made, the
meeting with other vessels, and all the details and incidents
which. may occur during the voyage.
ARTICLE 630.
In order to change the course and to take the one most
convenient for a good voyage of the vessel, the sailing
mate shall come to an agreement with the captain. If the
latter should object, the sailing mate shall state to him the
proper observations in the presence of the other officers
of the sea. If the captain should still insist on his negative
decision, the sailing mate shall make the proper protest,
signed by him and by one other officer, in the log book,
and shall obey the captain, who alone shall be responsible
for the consequences of his decision.
ARTICLE 631.
The sailing mate shall be responsible for all the damages
caused to the vessel and the cargo by reason of his
negligence or want of skill without prejudice to the
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criminal liability which may arise, if a felony or
misdemeanor has been committed.
ARTICLE 632.
The following shall be the obligations of the second mate:
1. To watch over the preservation of the hull and rigging
of the vessel, and to take charge of the preservation of the
tackle and equipment which make up her outfit, suggesting
to the captain the repairs necessary and the replacement of
the goods and implements which are rendered useless and
are lost.
2. To take care that the cargo is well arranged, keeping the
vessel always ready for maneuver.
3. To preserve order, discipline, and good service among
the crew, requesting the necessary orders and Instructions
of the captain, and giving him prompt information of any
occurrence in which the intervention of his authority may
be necessary.
4. To assign to each sailor the work he is to do on board,
in accordance with the instruction received and to see that
it is promptly and accurately carried out.
5. To take charge under inventory of the rigging and all the
equipment of the vessel, if it should be laid up, unless the
ship agent has ordered otherwise.
With regard to engineers the following rules shall govern:
1. In order to be taken on board as a marine engineer
forming part of the complement of a merchant vessel, it
shall be necessary to have the qualifications which the laws
and regulations require, and not be disqualified in
accordance therewith for the discharge of his duties.
Engineers shall be considered officers of the vessel but
they shall have no authority or intervention except in
matters referring to the motor apparatus.
2. When there are two or more engineers on board a
vessel, one of them shall be the chief, and the other
engineers and all the personnel of the engines shall be
under his orders; he shall also have charge of the motor
apparatus, the spare parts, the instruments and tools
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pertaining thereto, the fuel, the lubricating material and,
finally, whatever is entrusted to an engineer on board a
vessel.
3. He shall keep the engines and boilers in good condition
and state of cleanliness, and shall order what may be
proper in order that they may always be ready to work with
regularity, being liable for the accidents or damages which
his negligence or want of skill may cause to the motor
apparatus, to the vessel and to the cargo, without prejudice
to the criminal liability which may be proper if there has
been a felony or misdemeanor.
4. He shall not make any change in the motor apparatus, or
proceed to repair the averages he may have noticed in the
same, or change the normal speed of its movement
without the prior authorization of the captain., to whom, if
he should object to their being made, he shall state the
proper observations in the presence of the other engineers
or officers; and if, notwithstanding this, the captain should
insist on his objection, the chief engineer shall make the
proper protests, entering the same in the engine book, and
shall obey the captain, who, alone shall be responsible for
the consequences of his decision.
5. He shall inform the captain of any average which may
occur in the motor apparatus, and shall advise him
whenever it may be necessary to stop the engines for some
time, or when any other incident occurs in his department
of which the captain should be immediately informed,
besides frequently advising him of the consumption of fuel
and lubricating material.
6. He shall keep a book or registry called the "engine
book," in which shall be entered all the date referring to
the work of the engines, such as, for example, the number
of furnaces heated, the vacuum in the condenser, the
temperature, the degree of saturation of the water in the
boilers the consumption of fuel and lubricating material,
and under the heading of "noteworthy occurrences," the
averages and maladjustments which occur in the engines
and boilers, the causes thereof and the means employed to
repair the same likewise, the force and direction of the
wind, the rigging set and the speed of the vessel shall be
stated, taking the information from the Binnacle Book.
Aimee Nono Calo [Transportation Law]
ARTICLE 633.
The second mate shall take command of the vessel in case
of the inability or disqualification of the captain and the
sailing mate, assuming in such case their powers and
responsibility.
ARTICLE 634.
The captain may make up the crew of his vessel with such
number of men as he may consider proper, and in the
absence of Filipino sailors, he may take on foreigners
residing in the country, the number thereof not to exceed
one-fifth of the crew. If in foreign ports the captain should
not find a sufficient number of Filipino sailors, he may
complete the crew with foreigners, with the consent of the
consul or marine authorities.
The agreement which the captain may make with the
members of the crew and others who go to make up the
complement of the vessel, to which reference is made in
Article 612, must be reduced to writing in the account
book, without the intervention of a notary public or clerk
of court ("escribano"), signed by the parties thereto and
visaed by the marine authority if they be executed in
Philippine territory or by the consuls or consular agents of
the Republic of the Philippines if executed abroad, stating
therein all the obligations which each one contracts and all
the rights he acquires said authorities taking care that these
obligations and rights are recorded in a clear and definite
manner which give no room for doubts or claims.
The captain shall take care to read to them the articles of
this Code which concern them, stating in said document
that they were read.
If the book contains the requisites prescribed in Article
612, and there should not appear any signs of alterations in
its entries, it shall be admitted as evidence in questions
which may arise between the captain and the crew with
respect to the agreements contained therein and the
amounts paid on account of the same.
Every member of the crew may demand of the captain a
copy, signed by the latter, of the agreement and of the
liquidation of his wages, as they appear in the book.
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ARTICLE 635.
A seaman who has been contracted to serve on a vessel
may not rescind his contract or fail to comply therewith
except by reason of a legitimate impediment which may
have happened to him.
Neither may he transfer from the service of one vessel to
another without obtaining the written permission of the
captain of the vessel on which he may be.
If, without obtaining said permission, the seaman who has
signed for one vessel should sign for another one, the
second contract shall be void, and the captain may choose
between forcing him to fulfill the service to which he first
bound himself, or at his expense to look for a person to
substitute him.
Furthermore, he shall lose the wages earned on his first
contract, to the benefit of the vessel for which he had
signed.
A captain who, knowing that a seaman is in the service of
another vessel, should have made a new agreement with
him without having required of him the permission
referred to in the preceding paragraphs, shall be
subsidiarily responsible to the captain of the vessel to
which the seaman first belonged, for that part of the
indemnity, referred to in the third paragraph of this article,
which the seaman may not be able to pay.
ARTICLE 636.
If there is no fixed period for which a seaman has been
contracted he may not be discharged until the end of the
return voyage to the port where he enlisted.
ARTICLE 637.
Neither may the captain discharge a seaman during the
time of his contract except for just cause, the following
being considered as such:
1. The perpetration of a crime which disturbs order on the
vessel.
2. Repeated insubordination, want of discipline, or non-
fulfillment of the service.
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3. Repeated incapacity and negligence in the fulfillment of
the service he should render.
4. Habitual drunkenness.
5. Any occurrence which incapacitates the seaman to
perform the work entrusted to him, with the exception of
that provided in Article 644.
6. Desertion.
The captain may, however, before getting out on a voyage
and without giving any reason, refuse to permit a seaman
whom he may have engaged to go on board, and leave him
on land, in which case he will be obliged to pay him his
wages as if he had rendered services.
This indemnity shall be paid from the funds of the vessel if
the captain should have acted for reasons of prudence and
in the interest of the safety and good services of the
farmer. Should this not be the case, it shall be paid by the
captain personally.
After the voyage has begun, during the same, and until the
conclusion thereof, the captain may not abandon any
member of his crew on land or on sea, unless, by reason of
some crime, his imprisonment and delivery to the
competent authority in the first port touched should be
proper, a matter obligatory for the captain.
ARTICLE 638.
If, after the crew has been engaged, the voyage is revoked
by the will of the ship agent or of the charterers before or
after the vessel has put to sea, or if the vessel is for the
same reason given a destination different from that fixed in
the agreement with the crew, the latter shall be indemnified
on account of the rescission of the contract, according to
the cases follows:
1. If the revocation of the voyage should be decided upon
before the departure of the vessel from the port, each
sailor engaged shall be given one month's salary, besides
what may be due him, in accordance with his contract, for
the services rendered to the vessel up to the date of the
revocation.
Page 22
2. If the agreement should have been for a fixed amount
for the whole voyage, that which may be due for said
month and days shall be determined in proportion to the
approximate number of days the voyage should have
lasted, in the judgment of experts, in the manner
established in the law of Civil Procedure; and if the
proposed voyage should be of such short duration that it is
calculated at approximately one month, the indemnity shall
be fixed for fifteen days, discounting in all cases the sums
advanced.
3. If the revocation should take place after the vessel has
put to sea, the seamen engaged for a fixed amount for the
voyage shall receive in full the salary which may have been
offered them as if the voyage had terminated; and those
engaged by the month shall receive the amount
corresponding to the time they might have been on board
and to the time they may require to arrive at the port of
destination, the captain being obliged, furthermore, to pay
the seamen in both cases, the passage to the said port or to
the port of sailing of the vessel, as may be convenient for
them.
4. If the ship agent or the charterers of the vessel should
give it a destination different from that fixed in the
agreement, and the members of the crew should not agree
thereto, they shall be given by way of indemnity half the
amount fixed in case No. 1, besides what may be owed
them for the part of the monthly wages corresponding to
the days which have elapsed from the date of their
agreements.
If they accept the change, and the voyage, on account of
the greater distance or of other reasons, should give rise to
an increase of wages, the latter shall be adjusted privately
or through amicable arbitrators in case of disagreement.
Even though the voyage should be shortened to a nearer
point, this shall not give rise to a reduction in the wages
agreed upon.
If the revocation or change of the voyage should come
from the shippers or charterers, the agent shall have a right
to demand of them the indemnity which may be justly due.
Aimee Nono Calo [Transportation Law]
ARTICLE 639.
If the revocation of the voyage should arise from a just
cause independent of the will of the ship agent and
charterers, and the vessel should not have left the port, the
members of the crew shall have no other right than to
collect the wages earned up to the day on which the
revocation took place.
ARTICLE 640.
The following shall be just causes for the revocation of the
voyage.
1. A declaration of war or interdiction of commerce with
the power to whose territory the vessel was bound.
2. The blockade of the port of its destination, or the
breaking out of an epidemic after the agreement.
3. The prohibition to receive in said port the goods which
make up the cargo of the vessel.
4. The detention or embargo of the same by order of the
government, or for any other reason independent of the
will of the ship agent.
5. The inability of the vessel to navigate.
ARTICLE 641.
If, after a voyage has been begun, any of the first three
causes mentioned in the foregoing article should occur, the
sailors shall be paid at the port which the captain may
deem advisable to make for the benefit of the vessel and
cargo, according to the time they may have served thereon;
but if the vessel is to continue its voyage, the captain and
the crew may mutually demand the enforcement of the
contract.
In case of the occurrence of the fourth cause, the crew
shall continue to be paid half wages, if the agreement is by
month; but if the detention should exceed three months,
the contract shall be rescinded and the crew shall be paid
what they should have earned according to the contract if
the voyage had been concluded. And if the agreement
should be for a fixed sum for the voyage, the contract
must be complied within the terms agreed upon.
Page 23
In the fifth case, the crew shall have no other right than to
collect the wages earned; but if the disability of the vessel
should have been caused by the negligence or lack of skill
of the captain, engineer, or sailing mate, they shall
indemnify the crew for the damages suffered, always
without prejudice to the criminal liability which may be
proper.
ARTICLE 642.
If the crew have been engaged on shares, they shall not be
entitled, by reason of the revocation, delay, or greater
extension of the voyage, to anything but the proportionate
part of the indemnity which way be paid into the common
funds of the vessel by the persons liable for said
occurrences.
ARTICLE 643.
If the vessel and her cargo should be totally lost, by reason
of capture or wreck, all rights shall be extinguished, both
as regards the crew to demand any wages whatsoever, and
as regards the ship agent to recover the advances made.
If a portion of the vessel or of the cargo, or of both,
should be saved, the crew engaged on wages, including the
captain, shall retain their rights on the salvage, so far as
they go, on the remainder of the vessel as well as on the
amount of the freightage of the cargo saved; but sailors
who are engaged on shares shall not have any right
whatsoever on the salvage of the hull, but only on the
portion of the freightage saved. If they should have
worked to recover the remainder of the shipwrecked vessel
they shall be given from the amount of the salvage an
award in proportion of the efforts made and to the risks,
encountered in order to accomplish the salvage.
ARTICLE 644.
A seaman who falls sick shall not lose his right to wages
during the voyage, unless the sickness is the result of his
own fault. At any rate, the costs of the attendance and cure
shall be defrayed from the common funds, in the form of a
loan.
If the sickness should come from an injury received in the
service or defense of the vessel, the seaman shall be
Aimee Nono Calo [Transportation Law]
attended and cured at the expense of the common funds
deducting, before anything else, from the proceeds of the
freightage the cost of the attendance and cure.
ARTICLE 645.
If a seaman should die during the voyage, his heirs will be
given the wages earned and not received according to his
contract and the cause of his death, namely —
If he died a natural death and was engaged on wages, that
which may have been earned up to the date of his death
shall be paid.
If the contract was for a fixed sum for the whole voyage,
half the amount earned shall be paid if the seamen died on
the voyage out, and the whole amount if he died on the
return voyage.
And if the contract was on shares and death occurred after
the voyage was begun, the heirs shall be paid the entire
portion due the seaman; but if the latter died before the
departure of the vessel from the port, the heirs shall not be
entitled to claim anything.
If death occurred in the defense of the vessel, the seaman
shall be considered as living, and his heirs shall be paid, at
the end of the voyage, the full amount of wages or the
integral part of the profits which may be due him as to
others of his class.
In the same manner, the seaman captured while defending
the vessel shall be considered present so as to enjoy the
same benefits as the rest; but should he have been
captured on account of carelessness or other accident not
related to the service, he shall only receive the wages due
up to the day of his capture.
ARTICLE 646.
The vessel with her engines, rigging, equipment, and
freightage shall he liable for the wages earned by the crew
engaged per month or for the trip, the liquidation and
payment to take place between one voyage and the other.
Page 24
After a new voyage has been undertaken, credits of such
kind pertaining to the preceding voyage shall lose their
right of preference.
ARTICLE 647.
The officers and the crew of the vessel shall be free from
all obligations if they deem it proper, in the following
cases:
1. If, before beginning the voyage, the captain attempts to
change it, or a naval war with the power to which the
vessel was destined occurs.
2. If a disease should break out and be officially declared
an epidemic in the port of destination.
3. If the vessel should change owner or captain.
ARTICLE 648.
By the complement of a vessel shall be understood all the
persons on board, from the captain to the cabin boy,
necessary for the management, maneuvers, and service,
and therefore, the complement shall include the crew, the
sailing mates, engineers, stokers and other employees on
board not having specific designations; but it shall not
include the passengers or the persons whom the vessel is
transporting.
SECTION FOUR
SUPERCARGOES
ARTICLE 649.
Supercargoes shall discharge on board the vessel the
administrative duties which the ship agent or the shippers
may have assigned to them; they shall keep an account and
record of their transactions in a book which shall have the
same conditions and requisites as required for the
accounting book of the captain, and they shall respect the
latter in his capacity as chief of the vessel.
The powers and responsibilities of the captain shall cease,
when there is a supercargo, with regard to that part of the
administration legitimately conferred upon the latter, but
Aimee Nono Calo [Transportation Law]
shall continue in force for all acts which are inseparable
from his authority and office.
ARTICLE 650.
All the provisions contained in the second section of Title
III, Book II, with regard to capacity, manner of making
contracts, and liabilities of factors, shall be applicable to
supercargoes.
ARTICLE 651.
Supercargoes may not, without special authorization or
agreement, make any transaction for their own account
during the voyage, with the exception of the ventures
which, in accordance with the custom of the port of
destination, they are permitted to do.
Neither shall they be permitted to invest in the return trip
more than the profits from the ventures, unless there is an
express authorization from the principals.
TITLE THREE
SPECIAL CONTRACTS OF MARITIME
COMMERCE
SECTION ONE
CHARTER PARTIES
PART I
FORMS AND EFFECTS OF CHARTER PARTIES
ARTICLE 652.
A charter party must be drawn in duplicate and signed by
the contracting parties, and when either does not know
how or is not able to do so, by two witnesses at his
request.
The charter party shall contain, besides the conditions
freely stipulated, the following circumstances:
1. The kind, name, and tonnage of the vessel.
2. Its flag and port of registry.
Page 25
3. The name, surname, and domicile of the captain.
4. The name, surname, and domicile of the ship agent, if
the latter should make the charter party.
5. The name, surname, and domicile of the charterer; and
if he states that he is acting by commission, that of the
person for whose account he makes the contract.
6. The port of loading and unloading.
7. The capacity, number of tons or the weight or
measurement which they respectively bind themselves to
load and to transport, or whether the charter party is total.
8. The freightage to be paid, stating whether it is to be a
fixed amount for the voyage or so much per month, or for
the space to be occupied, or for the weight or measure of
the goods of which the cargo consists, or in any other
manner whatsoever agreed upon.
9. The amount of primage to be paid to the captain.
10. The days agreed upon for loading and unloading.
11. The lay days and extra lay days to be allowed and the
demurrage to be paid for each of them.
ARTICLE 653.
If the cargo should be received without the charter party
having been signed, the contract shall be understood as
executed in accordance with what appears in the bill of
lading, the sole evidence of title with regard to the cargo
for determining the rights and obligations of the ship
agent, of the captain, and of the charterer.
ARTICLE 654.
The charter parties executed with the intervention of a
broker, who certifies to the authenticity of the signatures
of the contracting parties because they were signed in his
presence, shall be full evidence in court; and if they should
be conflicting, that which accords with one which the
broker must keep in his registry, if kept in accordance with
law, shall govern.
Aimee Nono Calo [Transportation Law]
The contracts shall also be admitted as evidence, even
though a broker has not taken part therein, if the
contracting parties acknowledge the signatures to be the
same as their own.
If no broker has intervened in the charter party and the
signatures are not acknowledged, doubts shall be decided
by what is provided for in the bill of lading and in the
absence thereof, by the proofs submitted by the parties.
ARTICLE 655.
Charter parties executed by the captain in the absence of
the ship agent shall be valid and effective, even though in
executing them he should have acted in violation of the
orders and instructions of the ship agent or shipowner; but
the latter shall have a right of action against the captain for
indemnification of damages.
ARTICLE 656.
If in the charter party the time in which the loading and
unloading are to take place is not stated, the usages of the
port where these acts take place shall be observed. After
the stipulated or the customary period has passed, and
there is no express proviso in the charter party fixing the
indemnity for the delay, the captain shall be entitled to
demand demurrage for the lay days and extra lay days
which may have elapsed in loading and unloading.
ARTICLE 657.
If during the voyage the vessel should be rendered
unseaworthy, the captain shall be obliged to charter at his
expense another one in good condition to receive the
cargo and carry it to its destination, for which purpose he
shall be obliged to look for a vessel not only at the port of
arrival but also in the neighborhood within distance of 150
kilometers.
If the captain, through indolence or malice, should not
furnish a vessel to its destination, the shippers, after
requiring the captain to charter a vessel within an
inextendible period, may charter one and petition the
judicial authority to summarily approve the charter party
which they may have made.
Page 26
The same authority shall judicially ("por la via de
appremio") compel the captain, to carry out, for his
account and under his responsibility, the charter made by
the shippers.
If the captain, notwithstanding his diligence, should not
find a vessel for the charter, he shall deposit the cargo at
the disposal of the shippers, to whom he shall
communicate the facts on the first opportunity which
presents itself, the freight being adjusted in such cases by
the distance covered by the vessel, with no right to any
indemnification whatsoever.
ARTICLE 658.
The freightage shall accrue according to the conditions
stipulated in the contract, and should they not be
expressed, or should they be ambiguous, the following
rules shall be observed:
1. If the vessel has been chartered by months or by days,
the freightage shall begin to run from the day the loading
of the vessel is begun.
2. In charters made for a fixed period, the freightage shall
begin to run from that very day.
3. If the freightage is charged according to weight, the
payment shall be made according to gross weight,
including the containers, such as barrels or any other
objects in which the cargo is contained.
ARTICLE 659.
The merchandise sold by the captain to pay for the
necessary repairs to the hull, machinery or equipment, or
for unavoidable and urgent needs, shall pay freightage.
The price of this merchandise shall be fixed according to
the result of the voyage, namely:
1. If the vessel should arrive safely at the port of
destination, the captain shall pay the price which the sale
of merchandise of the same kind brings at that port.
2. If the vessel should be lost, the captain shall pay the
price realized from said merchandise in the sale.
Aimee Nono Calo [Transportation Law]
The same rule shall be observed in the payment of the
freightage, which shall be in full if the vessel arrives at her
destination, and in proportion to the distance covered if
she should be lost before arrival.
ARTICLE 660.
Merchandise jettisoned for the common safety shall not
pay freightage; but the amount of the latter shall be
considered as general average computing the same in
proportion to the distance covered when they were
jettisoned.
ARTICLE 661.
Neither merchandise lost by reason of shipwreck or
stranding nor those seized by the pirates or enemies, shall
pay freightage.
If the freightage should have been paid in advance, it shall
be returned, unless there is an agreement to the contrary.
ARTICLE 662.
If the vessel or the merchandise should be redeemed, or
the effects of the shipwreck be salvaged, the freightage
corresponding to the distance covered by the vessel
transporting the cargo shall be paid; and should the vessel,
after being repaired, transport said merchandise to the port
of destination, the full freightage shall be paid, without
prejudice to what may be due by reason of the average.
ARTICLE 663.
Merchandise which suffer deterioration or diminutions on
account of inherent defects or bad quality and condition of
the packing, or because of fortuitous event, shall pay
freightage in full and as stipulated in the charter party.
ARTICLE 664.
The natural increase in weight or size of the merchandise
loaded on the vessel shall accrue to the benefit of the
owner, and shall pay the proper freightage fixed in the
contract for the same.
Page 27
ARTICLE 665.
The cargo shall be specially liable for the payment of the
freightage, expenses and duties arising therefrom, which
must be reimbursed by the shippers, as well as for the part
of the general average which may correspond to it; but it
shall not be legal for the captain to delay unloading on
account of suspicion that this obligation may not be
complied with. Should there be reasons for distrust, the
judge or court, at the instance of the captain, may order
the deposit of the merchandise until he has been paid in
full.
ARTICLE 666.
The captain may request the sale of the cargo to the
amount necessary to pay the freightage, expenses, and
averages due him, reserving the right to demand the
balance due him therefor if the proceeds of the sale should
not suffice to cover his credit.
ARTICLE 667.
The goods loaded shall be liable in the first place for the
freight and expenses thereof during twenty days, to be
counted from the date of their delivery or deposit. During
this period, the sale of the same may be requested, even
though there be other creditors and the bankruptcy of the
shipper or consignee should occur.
This right may not he made use of, however, on the goods
which, after being delivered, were turned over to a third
person without malice on the part of the latter and for a
valuable consideration.
ARTICLE 668.
If the consignee should not be found or should refuse to
receive the cargo, the judge or court, at the instance of the
captain, shall order its deposit and the sale of what may be
necessary to pay the freightage and other expenses on the
same.
The sale shall likewise be allowed when the goods
deposited run the risk of deteriorating, or by reason of
their condition or other circumstances the expenses of
preservation and custody should be disproportionate.
Aimee Nono Calo [Transportation Law]
PART 2
RIGHTS AND OBLIGATIONS OF SHIPOWNERS
ARTICLE 669.
The shipowner or the captain shall observe in charter
parties the capacity of the vessel or that expressly
designated in its registry, a difference greater than 2 per
cent between that stated and her true capacity not being
permissible.
If the shipowner or the captain should contract to carry a
greater amount of cargo than the vessel can carry in view
of her tonnage, they shall indemnify the shippers whose
contracts they do not fulfill for the losses they may have
caused when by reason of their default, according to the
following cases, viz:
If the vessel has been chartered by one shipper only, and
there should appear to be an error or fraud in her capacity,
and the charterer should not wish to rescind the contract,
when he has a right to do so, the freightage shall he
reduced in proportion to the cargo which the vessel can
not receive, the person from whom the vessel is chartered
being furthermore obliged to indemnify the charterer for
the losses he may have caused him.
If, on the contrary there should be several charter parties,
and by reason of want of space all the cargo contracted for
cannot be loaded, and none of the charterers desires to
rescind the contract, preference shall be given to the
person who has already loaded and arranged the freight in
the vessel, and the rest shall take the places corresponding
to them in the order of the dates of their contracts.
Should there be no priority, the charterers may load, if they
wish, in proportion to the amounts of weight or space for
which each may have contracted, and the person from
whom the vessel was chartered shall he obliged to
indemnify them for losses and damages.
ARTICLE 670.
If the person from whom the vessel is chartered, after
receiving a part of the freight, should not find sufficient to
make up at least three-fifths of the amount which the
Page 28
vessel may hold, at the price he may have fixed, he may
substitute for the transportation another vessel inspected
and declared suitable for the same voyage, the expenses of
transfer and the increase in the price of the charter, should
there be any, being for his account. Should he not be able
to make this change, he shall undertake the voyage at the
time agreed upon; and should no time have been fixed,
within fifteen days from the time the loading began, unless
otherwise stipulated.
If the owner of the part of the freight already loaded
should procure some more at the same price and under
similar or proportionate conditions to those accepted for
the freight received, the person from whom the vessel is
chartered or the captain cannot refuse to accept the rest of
the cargo; and should he do so, the shipper shall have a
right to demand that the vessel put to sea with the cargo
which it may have on board.
ARTICLE 671.
After three-fifths of the vessel has been loaded, the person
from whom she is chartered may not, without the consent
of the charterers or shippers, substitute the vessel
designated in the charter party by another one, under the
penalty of making himself thereby liable for all the losses
and damages occurring during the voyage to the cargo of
those who did not consent to the change.
ARTICLE 672.
If the vessel has been chartered in whole, the captain may
not, without the consent of the charterer, accept cargo
from any other person; and should he do so, said charterer
may oblige him to unload it and to indemnify him for the
losses suffered thereby.
ARTICLE 673.
The person from whom the vessel is chartered shall he
liable for all the losses caused to the charterer by reason of
the voluntary delay of the captain in putting to sea,
according to the rules prescribed, provided he has been
requested, notarially or judicially, to put to sea at the
proper time.
Aimee Nono Calo [Transportation Law]
ARTICLE 674.
If the charterer should carry to the vessel more cargo than
that contracted for, the excess may be admitted in
accordance with the price stipulated in the contract, if it
can be well stowed without injuring the other shippers; but
if in order to load it, the vessel would be thrown out of
trim, the captain must refuse it or unload it at the expense
of its owner.
In the same manner, the captain may, before leaving the
port, unload merchandise clandestinely placed on board, or
transport them, if he can do so with the vessel in trim,
demanding by way of freightage the highest price which
may have been stipulated for said voyage.
ARTICLE 675.
If the vessel has been chartered to receive the cargo in
another port, the captain shall appear before the consignee
designated in the charter party; and, should the latter not
deliver the cargo to him, he shall inform the charterer and
wait his instructions, the lay days agreed upon or those
allowed by custom in the port beginning to run in the
meantime, unless there is an express, agreement to the
contrary.
Should the captain not receive an answer within the time
necessary therefor, he shall make efforts to find freight;
and should he not find any after the lay days and extra lay
days have elapsed, he shall make a protest and return to
the port where the charter was made.
The charterer shall pay the freightage in full, discounting
that which may have been earned on the merchandise
which may have been carried on the voyage out or on the
return trip, if carried for the account of third persons.
The same shall be done if a vessel, having been chartered
for the round trip, should not be given any cargo on its
return.
ARTICLE 676.
The captain shall lose the freightage and shall indemnify
the charterers if the latter should prove, even against the
certificate of inspection, if one has been made at the port
Page 29
of departure, that the vessel was not in a condition to
navigate at the time of receiving the cargo.
ARTICLE 677.
The charter party shall subsist if a declaration of war or a
blockade should take place during the voyage, the captain
not having any instructions from the charterer. In such
case the captain must proceed to the nearest safe and
neutral port, requesting and awaiting orders from the
shipper, and the expenses and salaries paid during the
detention shall be paid as general average.
If, by orders of the shipper, the cargo should be discharged
at the port of arrival, the freightage for the voyage out shall
be paid in full.
ARTICLE 678.
If the time necessary, in the opinion of the judge or court,
to receive the orders of the shipper should have elapse,
without the captain having received any instructions, the
cargo shall be deposited, and it shall be liable for the
payment of the freightage and expenses on its account
during the delay, which shall be paid from the proceeds of
the part first sold.
PART 3
OBLIGATIONS OF CHARTERERS
ARTICLE 679.
The charterer of an entire vessel may sub-charter the
whole or part thereof on such terms as he may consider
most convenient, the captain not being allowed to refuse
to receive on board the freight delivered by the second
charterers, provided that the conditions of the first charter
are not change, and that the price agreed upon is paid in
full to the person from whom the vessel is chartered, even
though the full cargo is not embarked, with the limitation
established in the next article.
ARTICLE 680.
A charterer who does not complete the full cargo he
bound himself to ship shall pay the freightage of the
amount he fails to ship, if the captain does not take other
Aimee Nono Calo [Transportation Law]
freight to complete the load of the vessel, in which case
the first charterer shall pay the difference, should there be
any.
ARTICLE 681.
If the charterer should load goods different from those
stated at the time of executing the charter party, without
the knowledge of the person from whom the vessel was
chartered or of the captain, and should thereby give rise to
losses, by reason of confiscation, embargo, detention, or
other causes, to the person from whom the vessel was
chartered or to the shippers, the person giving rise thereto
shall be liable with the value of his shipment and
furthermore with his property, for the full indemnity to all
those injured through his fault.
ARTICLE 682.
If the merchandise should have been shipped for the
purpose of illicit commerce, and were taken on board with
the knowledge of the person from whom the vessel was
chartered or of the captain, the latter, jointly with the
owner of the same, shall be liable for all the losses which
may be caused the other shippers; and even though it may
have been stipulated, they cannot demand any indemnity
whatsoever from the charterer for the damaged caused to
the vessel.
ARTICLE 683.
In case of making a port to repair the hull, machinery, or
equipment of the vessel, the shippers must await until the
vessel is repaired, being permitted to unload it at their own
expense should they deem it proper.
If, for the benefit of the cargo subject to deterioration, the
shippers or the court, or the consul, or the competent
authority in a foreign country, should order the
merchandise to be unloaded, the expenses of unloading
and reloading shall be for the account of the former.
ARTICLE 684.
If the charterer, without the occurrence of any of the cases
of force majeure mentioned in the foregoing article, should
wish to unload his merchandise before arriving at the port
Page 30
of destination, he shall pay the full freightage, the expenses
of the arrival made at his request, and the losses and
damages caused the other shippers, should there be any.
ARTICLE 685.
In charters for transportation of general freight, any of the
shippers may unload the merchandise before the beginning
of the voyage, paying one-half of the freightage, the
expense of stowing and restowing the cargo, and any other
damage which for his reason he may cause the other
shippers.
ARTICLE 686.
After the vessel has been unloaded and the cargo placed at
the disposal of the consignee, the latter must immediately
pay the captain the freightage due and the other expenses
for which said cargo may be liable.
The primage must be paid in the same proportion and at
the same time as the freightage, all the changes and
modifications to which the latter should be subject also
governing the former.
ARTICLE 687.
The charterers and shippers may not abandon merchandise
damaged on account of inherent defect or fortuitous event,
for the payment of the freightage and other expenses.
The abandonment shall be proper, however, if the cargo
should consist of liquids and they have leaked out, nothing
remaining in the containers but one-fourth part of their
contents.
PART 4
TOTAL OR PARTIAL RESCISSION OF
CHARTER PARTIES
ARTICLE 688.
A charter party may be rescinded at the request of the
charterer:
1. If before loading the vessel he should not agree with
that stated in the certificate of tonnage, or if there should
Aimee Nono Calo [Transportation Law]
be an error in the statement of the flag under which she
sails.
2. If the vessel should not be placed at the disposal of the
charterer within the period and in the manner agreed
upon.
3. If after the vessel has put to sea, she should return to the
port of departure, on account of risk from pirates,
enemies, or bad weather, and the shippers should agree to
unload her.
In the second and third cases the person from whom the
vessel was chartered shall indemnify the charterer for the
voyage out.
4. If the charter should have been made by the months, the
charterers shall pay the full freightage for one month, if the
voyage is for a port in the same waters, and for two
months, if for a port in different waters.
From one port to another of the Philippines and adjacent
islands, the freightage for one month only shall be paid.
5. If the vessel should make a port during the voyage in
order to make urgent repairs, and the charterers should
prefer to dispose of the merchandise.
When the delay does not exceed thirty days, the shippers
shall pay the full freightage for the voyage out.
Should the delay exceed thirty days, they shall only pay the
freightage in proportion to the distance covered by the
vessel.
ARTICLE 689.
At the request of the person from whom the vessel is
chartered the charter party may be rescinded:
1. If the charterer, at the termination of the extra lay days,
does not place the cargo alongside the vessel.
In such case the charterer must pay half the freight
stipulated, besides the demurrage due for the lay days and
extra lay days.
Page 31
2. If the person from whom the vessel was chartered
should sell it before the charterer has begun to load it, and
the purchaser should load it for his own account.
In such case the vendor shall indemnify the charterer for
the losses he may suffer.
If the new owner of the vessel should not load it for his
own account, the charter party shall be respected, and the
vendor shall indemnify the purchaser if the former did not
inform him of the charter pending at the time of making
the sale.
ARTICLE 690.
The charter party shall be rescinded and all actions arising
therefrom shall be extinguished, if, before the vessel puts
to sea from the port of departure, any of the following
cases should occur:
1. A declaration of war or interdiction of commerce with
the power to whose ports the vessel was to make its
voyage.
2. A condition of blockade of the port of destination of
said vessel, or the breaking out of an epidemic after the
contract was executed.
3. The prohibition to receive at the said port the
merchandise constituting the cargo of the vessel.
4. An indefinite detention, by reason of an embargo of the
vessel by order of the government, or for any other reason
independent of the will of the ship agent.
5. The inability of the vessel to navigate, without fault of
the captain or ship agent.
The unloading shall be made for the account of the
charterer.
ARTICLE 691.
If the vessel cannot put to sea on account of the closing of
the port of departure or any other temporary cause, the
charter shall remain in force, with neither one of the
contracting parties having a right to claim damages.
Aimee Nono Calo [Transportation Law]
The subsistence and wages of the crew shall be considered
as general average.
During the interruption, the charterer may at the proper
time and for his own account, unload and load the
merchandise, paying demurrage if he delays the reloading
after the cause for the detention has ceased.
ARTICLE 692.
A charter party shall be partially rescinded, unless there is
an agreement to the contrary, and the captain shall only be
entitled to the freightage for the voyage out, if, by reason
of a declaration of war, closing of ports, or interdiction of
commercial relations during the voyage, the vessel should
make the port designated for such a case in the
instructions of the charterer.
PART 5
PASSENGERS ON SEA VOYAGES
ARTICLE 693.
If the passage price has not been agreed upon, the judge or
court shall summarily fix it, after a declaration of experts.
ARTICLE 694.
Should the passenger not arrive on board at the time fixed,
or should leave the vessel without permission from the
captain when the latter is ready to leave the port, the
captain may continue the voyage and demand the full
passage price.
ARTICLE 695.
The right to passage, if issued to a specified person, may
not be transferred without the consent of the captain or of
the consignee.
ARTICLE 696.
If before beginning the voyage the passenger should die,
his heirs shall only be obliged to pay half of the fare agreed
upon.
Page 32
If the expenses of subsistence are included in the price
stipulated, the judge or court, after hearing experts if he
considers it necessary, shall fix the amount which has to be
left for the benefit of the vessel.
Should another passenger be received in the place of the
deceased, no payment shall be made by said heirs.
ARTICLE 697.
If before the voyage is begun it is suspended through the
exclusive fault of the captain or ship agent, the passengers
shall have the right to a refund of their fares and to recover
losses and damages; but if the suspension is due to
fortuitous events, or to force majeure, or to any other
cause independent of the captain or ship agent, the
passengers shall only be entitled to the return of the fare.
ARTICLE 698.
In case a voyage already begun should be interrupted, the
passengers shall be obliged to pay the fare in proportion to
the distance covered, without right to recover for losses
and damages if the interruption is due to fortuitous event
or to force majeure, but with a right to indemnity if the
interruption should have been caused by the captain
exclusively. If the interruption should be caused by the
disability of the vessel, and a passenger should agree to
await the repairs, he may not be required to pay any
increased price of passage, but his living expenses during
the stay shall be for his own account.
In case of delay in the departure of the vessel, the
passengers have the right to remain on board and to be
furnished with food for the account of the vessel unless
the delay is due to fortuitous events or to force majeure. If
the delay should exceed ten days, passengers requesting the
same shall be entitled to the return of the fare; and if it is
due exclusively to the fault of the captain or ship agent,
they may also demand indemnity for losses and damages.
A vessel exclusively devoted to the transportation of
passengers must take them directly to the port or ports of
destination, no matter what the number of passengers may
be, making all the stops indicated in its itinerary.
Aimee Nono Calo [Transportation Law]
ARTICLE 699.
If the contract is rescinded, before or after the
commencement of the voyage, the captain shall have a
right to claim payment of what he may have furnished the
passengers.
ARTICLE 700.
In all matters pertaining to the preservation of order and
discipline on board the vessel passengers shall be subject
to the orders of the captain, without any distinction
whatsoever.
ARTICLE 701.
The convenience or the interest of the passengers shall not
obligate or empowers the captain to stand in shore or enter
places which may take the vessel out of her course, or to
remain in the ports he must or in under necessity of
touching for a period longer than that required by the
needs of navigation.
ARTICLE 702.
In the absence of an agreement to the contrary, it shall be
understood that the subsistence of the passengers during
the voyage is included in the price of the passage; but
should it be for the account of the latter, the captain shall
be under obligation, in case of necessity, to furnish the
supply of food necessary for their sustenance at a
reasonable price.
ARTICLE 703.
A passenger shall be considered a shipper insofar as the
goods he carries on board are concerned, and the captain
shall not be responsible for what the former may keep
under his immediate and special custody, unless the
damage arises from an act of the captain or of the crew.
ARTICLE 704.
The captain, in order to collect the passage-money and
expenses of sustenance, may retain the goods belonging to
the passenger, and in case of the sale of the same he shall
be given preference over other creditors acting the same
way as in the collection of freightage.
Page 33
ARTICLE 705.
In case of the death of a passenger during the voyage, the
captain shall be authorized, with regard to the body, to
take the steps required by the circumstances, and shall
carefully take care of the papers and goods which may be
on board belonging to the passenger, observing the
provisions of case No. 10 of Article 612 with regard to
members of the crew.
PART 6
BILLS OF LADING
ARTICLE 706.
The captain of the vessel and the shipper shall have the
obligation of drawing up
the bill of lading in which shall be stated:
1. The name, registry, and tonnage of the vessel.
2. The name of the captain and his domicile.
3. The port of loading and that of unloading.
4. The name of the shipper.
5. The name of the consignee, if the bill of lading is issued
in the name of a specified person.
6. The quantity, quality, number of packages and marks of
the merchandise.
7. The freightage and the primage stipulated.
The bill of lading may be issued to bearer, to order, or in
the name of a specified person, and must be signed within
twenty-four hours after the cargo has been received on
board, the shipper being entitled to demand the unloading
at the expense of the captain should the latter not sign it,
and, in every case, the losses and damages suffered
thereby.
Aimee Nono Calo [Transportation Law]
ARTICLE 707.
Four true copies of the original bill of lading shall be made,
and all of them shall be signed by the captain and the
shipper. Of these, the shipper shall keep one and send
another to the consignee; the captain shall take two, one
for himself and another for the ship agent.
There may also be drawn up as many copies of the bill of
lading as may be considered necessary by the person
interested; but when they are issued to order or to bearer,
they shall be stated in all the copies, be they the first four
or the subsequent ones, the destination of each one, stating
whether it is for the agent, for the captain, for the shipper,
or for the consignee. If the copy sent to the latter should
have a duplicate, this circumstance and the fact that it is
not valid except in default of the first one must be stated
therein.
ARTICLE 708.
Bills of lading issued to bearer and sent to the consignee
shall be transferable by actual delivery of the instrument;
and those issued to order, by virtue of an indorsement.
In either case, the person to whom the bill of lading is
transferred shall acquire all the rights and actions of the
transferor or indorser with regard to the merchandise
mentioned in the same.
ARTICLE 709.
A bill of lading drawn up in accordance with the
provisions of this title shall be proof as between all those
interested in the cargo and between the latter and the
insurers, proof to the contrary being reserved for the latter.
ARTICLE 710.
If the bills of lading do not agree, and no change or erasure
can be observed in any of them, those possessed by the
shipper or consignee signed by the captain shall be proof
against the captain or ship agent in favor of the consignee
or shipper; and those possessed by the captain or ship
agent signed by the shipper shall be proof against the
shipper or consignee in favor of the captain or ship agent.
Page 34
ARTICLE 711. ARTICLE 715.

The legitimate holder of a bill of lading who fails to Bills of lading will give rise to a most summary action or to
present it to the captain of the vessel before the unloading judicial, compulsion ("accion sumarisima o de apremios"),
obliging the latter thereby to unload it and place it in according to the case, for the delivery of the cargo and the
deposit, shall be responsible for the expenses of
warehousing and other expenses arising therefrom. payment of the freightage and the expenses thereby
incurred.
ARTICLE 712.
ARTICLE 716.
The captain may not by himself change the destination of
the merchandise. In admitting this change at the instance If several persons should present bills of lading issued to
of the shipper, he must first take up the bill of lading bearer or to order, indorsed in their favor, demanding the
which he may have issued, under pain of being liable for same merchandise, the captain shall prefer, in making
the cargo to the legitimate holder of the same. delivery the person who presents the copy first issued,
except when the latter one was issued on proof of the loss
ARTICLE 713.
of the first, and both are presented by different persons.
If before the delivery of the cargo a new bill of lading
should be demanded of the captain, on the allegation that In such case, as well as when only second subsequent
the failure to present the previous ones is due to their loss copies, issued without this proof, are presented, the
or to any other just cause, he shall be obliged to issue it, captain shall apply to the judge or court, so that he may
provided that security for the value of the cargo is given to order the deposit of the merchandise and their delivery,
his satisfaction, but without changing the consignment, through him, to the proper person.
and stating therein the circumstances prescribed in the last
paragraph of Article 707, under penalty, should he not so ARTICLE 717.
state, of being held liable for said cargo if improperly
The delivery of the bill of lading shall effect the
delivered through his fault.
cancellation of all the provisional receipts of prior date
ARTICLE 714. given by the captain or his subordinates for partial
deliveries of the cargo which may have been made.
If before the vessel puts to sea the captain should die or
should cease to hold his position through any cause, the ARTICLE 718.
shippers shall have the right to demand of the new captain
After the cargo has been delivered the bill of lading which
the ratification of the first bills of lading, and the latter
the captain signed, or at least the copy by reason of which
must do so, provided that all the copies previously issued
the delivery is made, shall be returned to him, with the
be presented or returned to him, and it should appear from
receipt for the merchandise mentioned therein.
all examination of the cargo that they are correct.
The delay on the part of the consignee shall make him
The expenses arising from the examination of the cargo
liable for the damages which such delay may cause the
shall be defrayed by the ship agent, without prejudice to
captain.
the right of action of the latter against the first captain if he
ceased to be such through his own fault. Should said
examination not be made, it shall be understood that the
new captain accepts the cargo as it appears from the bills
of lading issued.

Aimee Nono Calo [Transportation Law] Page 35

SECTION TWO
LOANS ON BOTTOMRY AND RESPONDENTIA
ARTICLE 719.
A loan in which under any condition whatever, the
repayment of the sum loaned and of the premium
stipulated depends upon the safe arrival in port of the
goods on which it is made, or of the price they may receive
in case of accident, shall be considered a loan on bottomry
or respondentia.
ARTICLE 720.
Loans on bottomry or respondentia may be executed:
1. By means of a public instrument.
2. By means of a policy signed by the contracting parties
and the broker taking part therein.
3. By means of a private instrument.
Under whichever of these forms the contract is executed,
it shall be entered in the certificate of the registry of the
vessel and shall be recorded in the registry of vessels,
without which requisites the credits of this kind shall not
have, with regard to other credits, the preference which,
according to their nature, they should have, although the
obligation shall be valid between the contracting parties.
The contracts made during a voyage shall be governed by
the provisions of Articles 583 and 611, and shall be
effective with regard to third persons from the date of
their execution, if they should be recorded in the registry
of vessels of the port of registry of the vessel before the
lapse of eight days following its arrival. If said eight days
should elapse without the record having been made in the
corresponding registry, the contracts made during the
voyage of a vessel shall produce no effect with regard to
third persons, except from the day and date of their
inscription.
In order that the policy of the contracts executed in
accordance with No. 2 may have binding force, they must
conform to the registry of the broker who took part
Aimee Nono Calo [Transportation Law]
therein. With respect to those executed in accordance with
No. 3 the acknowledgment of the signature shall be
required.
Contracts which are not reduced to writing shall not give
rise to judicial action.
ARTICLE 721.
In a contract on bottomry or respondentia the following
must be stated:
1. The kind, name, and registry of the vessel.
2. The name, surname, and domicile of the captain.
3. The names, surnames, and domiciles of the person
giving and the person receiving the loan.
4. The amount of the loan and the premium stipulated.
5. The time for repayment.
6. The goods pledged to secure repayment.
7. The voyage during which the risk is run.
ARTICLE 722.
The contract may be made to order, in which case they
shall be transferable by indorsement, and the indorsee shall
acquire all the rights and shall incur all the risks
corresponding to the indorser.
ARTICLE 723.
Loans may be made in goods and in merchandise, fixing
their value in order to determine the principal of the loan.
ARTICLE 724.
The loans may be constituted jointly or separately:
1. On the hull of the vessel.
2. On the rigging.
3. On the equipment, provisions, and fuel.
Page 36
4. On the engine, if the vessel is a steamer.
5. On the merchandise loaded.
If the loan in constituted on the hull of the vessel, the
rigging, equipment and other goods, provisions, fuel,
steam engines, and the freightage earned during the voyage
on which the loan is made shall also be considered as
included in the liability for the loan.
If the loan is made subject on the cargo, all that which
constitutes the same shall be to the repayment; and if on a
particular object of the vessel or of the cargo, only the
object concretely and specifically mentioned shall be liable.
ARTICLE 725.
No loans on bottomry may be made on the salaries of the
crew or on the profits expected.
ARTICLE 726.
If the lender should prove that he loaned an amount larger
than the value of the object liable for the bottomry loan,
on account of fraudulent measures employed by the
borrower, the loan shall be valid only for the amount at
which said object is appraised by experts.
The surplus principal shall be returned with legal interests
for the entire time required for repayment.
ARTICLE 727.
If the full amount of the loan contracted in order to load
the vessel should not be used for the cargo, the balance
shall be returned before clearing.
The same procedure shall be observed with regard to the
goods taken as loan, if they were not loaded.
ARTICLE 728.
The loan which the captain takes at the point of residence
of the owners of the vessel shall only affect that part
thereof which belongs to the captain, if the other owners
or their agents should not have given their express
authorization therefor or should not have taken part in the
transaction.
Aimee Nono Calo [Transportation Law]
If one or more of the owners should be requested to
furnish the amount necessary to repair or provision the
vessel, and they should not do so within twenty-four
hours, the interest which the parties in default may have in
the vessel shall be liable for the loan in the proper
proportion.
Outside of the residence of the owners the captain may
contract loans in accordance with the provisions of
Articles 583 and 611.
ARTICLE 729.
Should the goods on which money is taken not be
subjected to risk, the contract shall be considered a simple
loan, with the obligation on the part of the borrower to
return the principal and interest at the legal rate, if that
agreed upon should not be lower.
ARTICLE 730.
Loans made during the voyage shall have preference over
those made before the clearing of the vessel, and they shall
be graduated in the inverse order of their dates.
The loans for the last voyage shall have preference over
prior ones.
Should several loans have been made at the same port of
arrival under stress and for the same purpose, all of them
shall be paid pro rata.
ARTICLE 731.
The actions pertaining to the lender shall be extinguished
by the absolute loss of the goods on which the loan was
made, if it arose from an accident of the sea at the time
and during the voyage designated in the contract, and it is
proven that the cargo was on board; but this shall not take
place if the loss was caused by the inherent defect of the
thing, or through the fault or malice, of the borrower, or
barratry on the part of the captain, or if it was caused by
damages suffered by the vessel as a consequence of being
engaged in contraband, or if it arose from having loaded
the merchandise on a vessel different from that designated
Page 37
in the contract, unless this change should have been made
by reason of force majeure.
Proof of the loss as well as of the existence in the vessel of
the goods declared to the lender as the object of the loan is
incumbent upon him who received the loan.
ARTICLE 732.
Lenders on bottomry or respondentia shall suffer, in
proportion to their respective interest, the general average
which may take place in the goods on which the loan is
made.
In particular averages, in the absence of an express
agreement between the contracting parties, the lender on
bottomry or respondentia shall also contribute in
proportion to his respective interest, should it not belong
to the kind of risks excepted in the foregoing article.
ARTICLE 733.
Should the period during which the lender shall run the
risk not have been stated in the contract, it shall last, with
regard to the vessel, engines, rigging, and equipment, from
the moment said vessel puts to sea until she drops anchor
in the port of destination; and with regard to the
merchandise, from the time they are loaded at the shore or
wharf of the port of shipment until they are unloaded in
the port of consignment.
ARTICLE 734.
In case of shipwreck, the amount liable for the payment of
the loan shall be reduced to the proceeds of the goods
saved, after deducting the costs of the salvage.
If the loan should be on the vessel or any of its parts, the
freightage earned during the voyage for which said loan
was contracted shall also be liable for its payment, as far as
it may reach.
ARTICLE 735.
If the same vessel or cargo should be the object of a loan
on bottomry or respondentia and marine insurance, the
value of what may be saved in case of shipwreck shall be
divided between the lender and the insurer, in proportion
Aimee Nono Calo [Transportation Law]
to the legitimate interest of each one, taking into
consideration, for this purpose only, the principal with
respect to the loan, and without prejudice to the right of
preference of other creditors in accordance with Article
580.
ARTICLE 736.
If there should be delay in repayment of the principal and
premiums of the loan, only the former shall bear of legal
interest.
3) Warsaw Convention
CHAPTER I
SCOPE - DEFINITIONS
Article 1
1. This Convention applies to all international carriage of
persons, luggage or goods performed by aircraft for
reward. It applies equally to gratuitous carriage by aircraft
performed by an air transport undertaking.
2. For the purposes of this Convention the expression
"international carriage" means any carriage in which,
according to the contract made by the parties, the place of
departure and the place of destination, whether or not
there be a break in the carriage or a transhipment, are
situated either within the territories of two High
Contracting Parties, or within the territory of a single High
Contracting Party, if there is an agreed stopping place
within a territory subject to the sovereignty, suzerainty,
mandate or authority of another Power, even though that
Power is not a party to this Convention. A carriage without
such an agreed stopping place between territories subject
to the sovereignty, suzerainty, mandate or authority of the
same High Contracting Party is not deemed to be
international for the purposes of this Convention.
3. A carriage to be performed by several successive air
carriers is deemed, for the purposes of this Convention, to
be one undivided carriage, if it has been regarded by the
parties as a single operation, whether it had been agreed
upon under the form of a single contract or of a series of
contracts, and it does not lose its international character
Page 38
merely because one contract or a series of contracts is to
be performed entirely within a territory subject to the
sovereignty, suzerainty, mandate or authority of the same
High Contracting Party.
Article 2
1. This Convention applies to carriage performed by the
State or by legally constituted public bodies provided it
falls within the conditions laid down in Article 1.
2. This Convention does not apply to carriage performed
under the terms of any international postal Convention.
CHAPTER II
DOCUMENTS OF CARRIAGE
Section I - Passenger Ticket
Article 3
1. For the carriage of passengers the carrier must deliver
a passenger ticket which shall contain the following
particulars:
(a) the place and date of issue;
(b) the place of departure and of destination;
(c) the agreed stopping places, provided that the carrier
may reserve the right to alter the stopping places in case of
necessity, and that if he exercises that right, the alteration
shall not have the effect of depriving the carriage of its
international character;
(d) the name and address of the carrier or carriers;
(e) a statement that the carriage is subject to the rules
relating to liability established by this Convention.
2. The absence, irregularity or loss of the passenger ticket
does not affect the existence or the validity of the contract
of carriage, which shall none the less be subject to the rules
of this Convention. Nevertheless, if the carrier accepts a
passenger without a passenger ticket having been delivered
he shall not be entitled to avail himself of those provisions
of this Convention which exclude or limit his liability.
Aimee Nono Calo [Transportation Law]
Section II - Luggage Ticket
Article 4
1. For the carriage of luggage, other than small personal
objects of which the passenger takes charge himself, the
carrier must deliver a luggage ticket.
2. The luggage ticket shall be made out in duplicate, one
part for the passenger and the other part for the carrier.
3. The luggage ticket shall contain the following
particulars:
(a) the place and date of issue;
(b) the place of departure and of destination;
(c) the name and address of the carrier or carriers;
(d) the number of the passenger ticket;
(e) a statement that delivery of the luggage will be made
to the bearer of the luggage ticket;
(f) the number and weight of the packages;
(g) the amount of the value declared in accordance with
Article 22(2);
(h) a statement that the carriage is subject to the rules
relating to liability established by this Convention.
4. The absence, irregularity or loss of the luggage ticket
does not affect the existence or the validity of the contract
of carriage, which shall none the less be subject to the rules
of this Convention. Nevertheless, if the carrier accepts
luggage without a luggage ticket having been delivered, or
if the luggage ticket does not contain the particulars set out
at (d), (f) and (h) above, the carrier shall not be entitled to
avail himself of those provisions of the Convention which
exclude or limit his liability.
Page 39
Section III - Air Consignment Note
Article 5
1. Every carrier of goods has the right to require the
consignor to make out and hand over to him a document
called an "air consignment note"; every consignor has the
right to require the carrier to accept this document.
2. The absence, irregularity or loss of this document does
not affect the existence or the validity of the contract of
carriage which shall, subject to the provisions of Article 9,
be none the less governed by the rules of this Convention.
Article 6
1. The air consignment note shall be made out by the
consignor in three original parts and be handed over with
the goods.
2. The first part shall be marked "for the carrier," and shall
be signed by the consignor. The second part shall be
marked "for the consignee"; it shall be signed by the
consignor and by the carrier and shall accompany the
goods. The third part shall be signed by the carrier and
handed by him to the consignor after the goods have been
accepted.
3. The carrier shall sign on acceptance of the goods.
4. The signature of the carrier may be stamped; that of the
consignor may be printed or stamped.
5. If, at the request of the consignor, the carrier makes out
the air consignment note, he shall be deemed, subject to
proof to the contrary, to have done so on behalf of the
consignor.
Article 7
The carrier of goods has the right to require the consignor
to make out separate consignment notes when there is
more than one package.
Article 8
The air consignment note shall contain the following
particulars:
Aimee Nono Calo [Transportation Law]
(a) the place and date of its execution;
(b) the place of departure and of destination;
(c) the agreed stopping places, provided that the carrier
may reserve the right to alter the stopping places in case of
necessity, and that if he exercises that right the alteration
shall not have the effect of depriving the carriage of its
international character;
(d) the name and address of the consignor;
(e) the name and address of the first carrier;
(f) the name and address of the consignee, if the case so
requires;
(g) the nature of the goods;
(h) the number of the packages, the method of packing
and the particular marks or numbers upon them;
(i) the weight, the quantity and the volume or dimensions
of the goods;
(j) the apparent condition of the goods and of the packing;
(k) the freight, if it has been agreed upon, the date and
place of payment, and the person who is to pay it;
(l) if the goods are sent for payment on delivery, the price
of the goods, and, if the case so requires, the amount of
the expenses incurred;
(m) the amount of the value declared in accordance with
Article 22 (2);
(n) the number of parts of the air consignment note;
(o) the documents handed to the carrier to accompany the
air consignment note;
(p) the time fixed for the completion of the carriage and a
brief note of the route to be followed, if these matters
have been agreed upon;
(q) a statement that the carriage is subject to the rules
relating to liability established by this Convention.
Page 40
Article 9
If the carrier accepts goods without an air consignment
note having been made out, or if the air consignment note
does not contain all the particulars set out in Article 8(a) to
(i) inclusive and (q), the carrier shall not be entitled to avail
himself of the provisions of this Convention which
exclude or limit his liability.
Article 10
1. The consignor is responsible for the correctness of the
particulars and statements relating to the goods which he
inserts in the air consignment note.
2. The consignor will be liable for all damage suffered by
the carrier or any other person by reason of the
irregularity, incorrectness or incompleteness of the said
particulars and statements.
Article 11
1. The air consignment note is prima facie evidence of the
conclusion of the contract, of the receipt of the goods and
of the conditions of carriage.
2. The statements in the air consignment note relating to
the weight, dimensions and packing of the goods, as well
as those relating to the number of packages, are prima
facie evidence of the facts stated; those relating to the
quantity, volume and condition of the goods do not
constitute evidence against the carrier except so far as they
both have been, and are stated in the air consignment note
to have been, checked by him in the presence of the
consignor, or relate to the apparent condition of the
goods.
Article 12
1. Subject to his liability to carry out all his obligations
under the contract of carriage, the consignor has the right
to dispose of the goods by withdrawing them at the
aerodrome of departure or destination, or by stopping
them in the course of the journey on any landing, or by
calling for them to be delivered at the place of destination
or in the course of the journey to a person other than the
consignee named in the air consignment note, or by
requiring them to be returned to the aerodrome of
Aimee Nono Calo [Transportation Law]
departure. He must not exercise this right of disposition in
such a way as to prejudice the carrier or other consignors
and he must repay any expenses occasioned by the exercise
of this right.
2. If it is impossible to carry out the orders of the
consignor the carrier must so inform him forthwith.
3. If the carrier obeys the orders of the consignor for the
disposition of the goods without requiring the production
of the part of the air consignment note delivered to the
latter, he will be liable, without prejudice to his right of
recovery from the consignor, for any damage which may
be caused thereby to any person who is lawfully in
possession of that part of the air consignment note.
4. The right conferred on the consignor ceases at the
moment when that of the consignee begins in accordance
with Article 13. Nevertheless, if the consignee declines to
accept the consignment note or the goods, or if he cannot
be communicated with, the consignor resumes his right of
disposition.
Article 13
1. Except in the circumstances set out in the preceding
Article, the consignee is entitled, on arrival of the goods at
the place of destination, to require the carrier to hand over
to him the air consignment note and to deliver the goods
to him, on payment of the charges due and on complying
with the conditions of carriage set out in the air
consignment note.
2. Unless it is otherwise agreed, it is the duty of the carrier
to give notice to the consignee as soon as the goods arrive.
3. If the carrier admits the loss of the goods, or if the
goods have not arrived at the expiration of seven days after
the date on which they ought to have arrived, the
consignee is entitled to put into force against the carrier
the rights which flow from the contract of carriage.
Article 14
The consignor and the consignee can respectively enforce
all the rights given them by Articles 12 and 13, each in his
own name, whether he is acting in his own interest or in
Page 41
the interest of another, provided that he carries out the
obligations imposed by the contract.
Article 15
1. Articles 12, 13 and 14 do not affect either the relations
of the consignor or the consignee with each other or the
mutual relations of third parties whose rights are derived
either from the consignor or from the consignee.
2. The provisions of Articles 12, 13 and 14 can only be
varied by express provision in the air consignment note.
Article 16
1. The consignor must furnish such information and attach
to the air consignment note such documents as are
necessary to meet the formalities of customs, octroi or
police before the goods can be delivered to the consignee.
The consignor is liable to the carrier for any damage
occasioned by the absence, insufficiency or irregularity of
any such information or documents, unless the damage is
due to the fault of the carrier or his agents.
2. The carrier is under no obligation to enquire into the
correctness or sufficiency of such information or
documents.
CHAPTER III
LIABILITY OF THE CARRIER
Article 17
The carrier is liable for damage sustained in the event of
the death or wounding of a passenger or any other bodily
injury suffered by a passenger, if the accident which caused
the damage so sustained took place on board the aircraft
or in the course of any of the operations of embarking or
disembarking.
Article 18
1. The carrier is liable for damage sustained in the event of
the destruction or loss of, or of damage to, any registered
luggage or any goods, if the occurrence which caused the
damage so sustained took place during the carriage by air.
Aimee Nono Calo [Transportation Law]
2. The carriage by air within the meaning of the preceding
paragraph comprises the period during which the luggage
or goods are in charge of the carrier, whether in an
aerodrome or on board an aircraft, or, in the case of a
landing outside an aerodrome, in any place whatsoever.
3. The period of the carriage by air does not extend to any
carriage by land, by sea or by river performed outside an
aerodrome. If, however, such a carriage takes place in the
performance of a contract for carriage by air, for the
purpose of loading, delivery or transshipment, any damage
is presumed, subject to proof to the contrary, to have been
the result of an event which took place during the carriage
by air.
Article 19
The carrier is liable for damage occasioned by delay in the
carriage by air of passengers, luggage or goods.
Article 20
1. The carrier is not liable if he proves that he and his
agents have taken all necessary measures to avoid the
damage or that it was impossible for him or them to take
such measures.
2. In the carriage of goods and luggage the carrier is not
liable if he proves that the damage was occasioned by
negligent pilotage or negligence in the handling of the
aircraft or in navigation and that, in all other respects, he
and his agents have taken all necessary measures to avoid
the damage.
Article 21
If the carrier proves that the damage was caused by or
contributed to by the negligence of the injured person the
Court may, in accordance with the provisions of its own
law, exonerate the carrier wholly or partly from his liability.
Article 22
1. In the carriage of passengers the liability of the carrier
for each passenger is limited to the sum of 125,000 francs.
Where, in accordance with the law of the Court seised of
the case, damages may be awarded in the form of
periodical payments, the equivalent capital value of the said
payments shall not exceed 125,000 francs. Nevertheless, by
Page 42
special contract, the carrier and the passenger may agree to
a higher limit of liability.
2. In the carriage of registered luggage and of goods, the
liability of the carrier is limited to a sum of 250 francs per
kilogram, unless the consignor has made, at the time when
the package was handed over to the carrier, a special
declaration of the value at delivery and has paid a
supplementary sum if the case so requires. In that case the
carrier will be liable to pay a sum not exceeding the
declared sum, unless he proves that that sum is greater
than the actual value to the consignor at delivery.
3. As regards objects of which the passenger takes charge
himself the liability of the carrier is limited to 5,000 francs
per passenger.
4. The sums mentioned above shall be deemed to refer to
the French franc consisting of 65 ½ milligrams gold of
millesimal fineness 900. These sums may be converted into
any national currency in round figures.
Article 23
Any provision tending to relieve the carrier of liability or to
fix a lower limit than that which is laid down in this
Convention shall be null and void, but the nullity of any
such provision does not involve the nullity of the whole
contract, which shall remain subject to the provisions of
this Convention.
Article 24
1. In the cases covered by Articles 18 and 19 any action for
damages, however founded, can only be brought subject to
the conditions and limits set out in this Convention.
2. In the cases covered by Article 17 the provisions of the
preceding paragraph also apply, without prejudice to the
questions as to who are the persons who have the right to
bring suit and what are their respective rights.
Article 25
1. The carrier shall not be entitled to avail himself of the
provisions of this Convention which exclude or limit his
liability, if the damage is caused by his wilful misconduct or
by such default on his part as, in accordance with the law
Aimee Nono Calo [Transportation Law]
of the Court seised of the case, is considered to be
equivalent to wilful misconduct.
2. Similarly the carrier shall not be entitled to avail himself
of the said provisions, if the damage is caused as aforesaid
by any agent of the carrier acting within the scope of his
employment.
Article 26
1. Receipt by the person entitled to delivery of luggage or
goods without complaint is prima facie evidence that the
same have been delivered in good condition and in
accordance with the document of carriage.
2. In the case of damage, the person entitled to delivery
must complain to the carrier forthwith after the discovery
of the damage, and, at the latest, within three days from
the date of receipt in the case of luggage and seven days
from the date of receipt in the case of goods. In the case of
delay the complaint must be made at the latest within
fourteen days from the date on which the luggage or goods
have been placed at his disposal.
3. Every complaint must be made in writing upon the
document of carriage or by separate notice in writing
despatched within the times aforesaid.
4. Failing complaint within the times aforesaid, no action
shall lie against the carrier, save in the case of fraud on his
part.
Article 27
In the case of the death of the person liable, an action for
damages lies in accordance with the terms of this
Convention against those legally representing his estate.
Article 28
1. An action for damages must be brought, at the option of
the plaintiff, in the territory of one of the High
Contracting Parties, either before the Court having
jurisdiction where the carrier is ordinarily resident, or has
his principal place of business, or has an establishment by
which the contract has been made or before the Court
having jurisdiction at the place of destination.
Page 43
2. Questions of procedure shall be governed by the law of
the Court seised of the case.
Article 29
1. The right to damages shall be extinguished if an action is
not brought within two years, reckoned from the date of
arrival at the destination, or from the date on which the
aircraft ought to have arrived, or from the date on which
the carriage stopped.
2. The method of calculating the period of limitation shall
be determined by the law of the Court seised of the case.
Article 30
1. In the case of carriage to be performed by various
successive carriers and falling within the definition set out
in the third paragraph of Article 1, each carrier who
accepts passengers, luggage or goods is subjected to the
rules set out in this Convention, and is deemed to be one
of the contracting parties to the contract of carriage in so
far as the contract deals with that part of the carriage
which is performed under his supervision.
2. In the case of carriage of this nature, the passenger or
his representative can take action only against the carrier
who performed the carriage during which the accident or
the delay occurred, save in the case where, by express
agreement, the first carrier has assumed liability for the
whole journey.
3. As regards luggage or goods, the passenger or consignor
will have a right of action against the first carrier, and the
passenger or consignee who is entitled to delivery will have
a right of action against the last carrier, and further, each
may take action against the carrier who performed the
carriage during which the destruction, loss, damage or
delay took place. These carriers will be jointly and severally
liable to the passenger or to the consignor or consignee.
Aimee Nono Calo [Transportation Law]
CHAPTER IV
PROVISIONS RELATING TO COMBINED
CARRIAGE
Article 31
1. In the case of combined carriage performed partly by air
and partly by any other mode of carriage, the provisions of
this Convention apply only to the carriage by air, provided
that the carriage by air falls within the terms of Article 1.
2. Nothing in this Convention shall prevent the parties in
the case of combined carriage from inserting in the
document of air carriage conditions relating to other
modes of carriage, provided that the provisions of this
Convention are observed as regards the carriage by air.
CHAPTER V
GENERAL AND FINAL PROVISIONS
Article 32
Any clause contained in the contract and all special
agreements entered into before the damage occurred by
which the parties purport to infringe the rules laid down by
this Convention, whether by deciding the law to be
applied, or by altering the rules as to jurisdiction, shall be
null and void. Nevertheless for the carriage of goods
arbitration clauses are allowed, subject to this Convention,
if the arbitration is to take place within one of the
jurisdictions referred to in the first paragraph of Article 28.
Article 33
Nothing contained in this Convention shall prevent the
carrier either from refusing to enter into any contract of
carriage, or from making regulations which do not conflict
with the provisions of this Convention.
Article 34
This Convention does not apply to international carriage
by air performed by way of experimental trial by air
navigation undertakings with the view to the establishment
of a regular line of air navigation, nor does it apply to
carriage performed in extraordinary circumstances outside
the normal scope of an air carrier's business.
Page 44
Article 35
The expression "days" when used in this Convention
means current days not working days.
Article 36
The Convention is drawn up in French in a single copy
which shall remain deposited in the archives of the
Ministry for Foreign Affairs of Poland and of which one
duly certified copy shall be sent by the Polish Government
to the Government of each of the High Contracting
Parties.
Article 37
1. This Convention shall be ratified. The instruments of
ratification shall be deposited in the archives of the
Ministry for Foreign Affairs of Poland, which will notify
the deposit to the Government of each of the High
Contracting Parties.
2. As soon as this Convention shall have been ratified by
five of the High Contracting Parties it shall come into
force as between them on the ninetieth day after the
deposit of the fifth ratification. Thereafter it shall come
into force between the High Contracting Parties who shall
have ratified and the High Contracting Party who deposits
his instrument of ratification on the ninetieth day after the
deposit.
3. It shall be the duty of the Government of the Republic
of Poland to notify to the Government of each of the
High Contracting Parties the date on which this
Convention comes into force as well as the date of the
deposit of each ratification.
Article 38
1. This Convention shall, after it has come into force,
remain open for accession by any State.
2. The accession shall be effected by a notification
addressed to the Government of the Republic of Poland,
which will inform the Government of each of the High
Contracting Parties thereof.
Aimee Nono Calo [Transportation Law]
3. The accession shall take effect as from the ninetieth day
after the notification made to the Government of the
Republic of Poland.
Article 39
1. Any one of the High Contracting Parties may denounce
this Convention by a notification addressed to the
Government of the Republic of Poland, which will at once
inform the Government of each of the High Contracting
Parties.
2. Denunciation shall take effect six months after the
notification of denunciation, and shall operate only as
regards the Party who shall have proceeded to
denunciation.
Article 40
1. Any High Contracting Party may, at the time of
signature or of deposit of ratification or of accession
declare that the acceptance which he gives to this
Convention does not apply to all or any of his colonies,
protectorates, territories under mandate, or any other
territory subject to his sovereignty or his authority, or any
territory under his suzerainty.
2. Accordingly any High Contracting Party may
subsequently accede separately in the name of all or any of
his colonies, protectorates, territories under mandate or
any other territory subject to his sovereignty or to his
authority or any territory under his suzerainty which has
been thus excluded by his original declaration.
3. Any High Contracting Party may denounce this
Convention, in accordance with its provisions, separately
or for all or any of his colonies, protectorates, territories
under mandate or any other territory subject to his
sovereignty or to his authority, or any other territory under
his suzerainty.
Article 41
Any High Contracting Party shall be entitled not earlier
than two years after the coming into force of this
Convention to call for the assembling of a new
international Conference in order to consider any
improvements which may be made in this Convention. To
Page 45
this end he will communicate with the Government of the
French Republic which will take the necessary measures to
make preparations for such Conference.
This Convention done at Warsaw on the 12th October,
1929, shall remain open for signature until the 31st
January, 1930.
"ADDITIONAL PROTOCOL
(With reference to Article 2)
rules and the practices of the great shipping countries of
the world;
WHEREAS, shipping companies, shippers, and marine
insurance companies, and various chambers of commerce,
which are directly affected by such legislation, have
expressed their desire that said Congressional Act be made
applicable and extended to the Philippines; therefore,
Be it enacted by the National Assembly of the Philippines:

The High Contracting Parties reserve to themselves the Section 1.

right to declare at the time of ratification or of accession
That the provisions of Public Act Numbered Five hundred
that the first paragraph of Article 2 of this Convention
and twenty-one of the Seventy-fourth Congress of the
shall not apply to international carriage by air performed
United States, approved on April sixteenth, nineteen
directly by the State, its colonies, protectorates or
hundred and thirty-six, be accepted, as it is hereby
mandated territories or by any other territory under its
accepted to be made applicable to all contracts for the
sovereignty, suzerainty or authority."
carriage of goods by sea to and from Philippine ports in
4) Carriage of Goods by Sea Act foreign trade: Provided, That nothing in the Act shall be
(Commonwealth Act No. 65) construed as repealing any existing provision of the Code
of Commerce which is now in force, or as limiting its
IN ACT TO DECLARE THAT PUBLIC ACT application.
NUMBERED FIVE HUNDRED AND TWENTY-
ONE, KNOWN AS "CARRIAGE OF GOODS BY Section 2.
SEA ACT ," ENACTED BY THE SEVENTY-
This Act shall take effect upon its approval. Approved:
FOURTH CONGRESS OF THE UNITED
October 22, 1936.
STATES, BE ACCEPTED, AS IT IS HEREBY
ACCEPTED BY THE NATIONAL ASSEMBLY
An Act Relating to the Carriage of Goods by Sea.
WHEREAS, the Seventy-fourth Congress of the United
Be it enacted by the Senate and House of Representatives
States enacted Public Act Numbered Five hundred and
of the United States of America in Congress assembled,
twenty-one, entitled: "Carriage of Goods by Sea Act";
That every bill of landing or similar document of title
which is evidence of a contract for the carriage of goods by
WHEREAS, the primordial purpose of the said Acts is to
sea to or from ports of the United States, in foreign trade,
bring about uniformity in ocean bills of lading and to give
shall have effect subject to the provisions of the Act.
effect to the Brussels Treaty, signed by the United States
with other powers;
TITLE I
WHEREAS, the Government of the United States has left
Section 1.
it to the Philippine Government to decide whether or not
the said Act shall apply to carriage of goods by sea in When used in this Act —
foreign trade to and from Philippine ports;
(a) The term "carrier" includes the owner or the charterer
WHEREAS, the said Act of Congress contains advanced who enters into a contract of carriage with a shipper.
legislation, which is in consonance with modern maritime

Aimee Nono Calo [Transportation Law] Page 46

(b) The term "contract of carriage" applies only to
contracts of carriage covered by a bill of lading or any
similar document of title, insofar as such document relates
to the carriage of goods by sea, including any bill of lading
or any similar document as aforesaid issued under or
pursuant to a charter party from the moment at which
such bill of lading or similar document of title regulates the
relations between a carrier and a holder of the same.
(c) The term "goods" includes goods, wares, merchandise,
and articles of every kind whatsoever, except live animals
and cargo which by the contract of carriage is stated as
being carried on deck and is so carried.
(d) The term "ship" means any vessel used for the carriage
of goods by sea.
(e) The term "carriage of goods" covers the period from
the time when the goods are loaded on to the time when
they are discharged from the ship.
RISKS
Section 2.
Subject to the provisions of section 6, under every contract
of carriage of goods by sea, the carrier in relation to the
loading handling, stowage, carriage, custody, care, and
discharge of such goods, shall be subject to the
responsibilities and liabilities and entitled to the rights and
immunities hereinafter set forth.
RESPONSIBILITIES AND LIABILITIES
Section 3.
(1) The carrier shall be bound, before and at the beginning
of the voyage, to exercise due diligence to —
(a) Make the ship seaworthy;
(b) Properly man, equip, and supply the ship;
(c) Make the holds, refrigerating and cooling
chambers, and all other parts of the ship in which goods
are carried, fit and safe for their reception carriage and
preservation.
Aimee Nono Calo [Transportation Law]
(2) The carrier shall properly and carefully load, handle,
stow , carry, keep, care for, and discharge the goods
carried.
(3) After receiving the goods into his charge the carrier, or
the master or agent of the carrier, shall, on demand of the
shipper, issue to the shipper a bill of lading showing
among other things —
(a) The leading marks necessary for identification of
the goods as the same are furnished in writing by the
shipper before the loading of such goods starts, provided
such marks are stamped or otherwise shown clearly upon
the goods if uncovered, or on the cases or coverings in
which such goods are contained, in such a manner as
should ordinarily remain legible until the end of the
voyage.
(b) Either the number of packages or pieces, or the
quantity or weight, as the case may be, as furnished in
writing by the shipper.
(c) The apparent order and condition of the goods:
Provided, That no carrier, master, or agent of the carrier,
shall be bound to state or show in the bill of lading any
marks, number, quantity, or weight which he has
reasonable ground for suspecting not accurately to
represent the goods actually received, or which he has had
no reasonable means of checking.
(4) Such a bill of lading shall be prima facie evidence of the
receipt by the carrier of the goods as therein described in
accordance with paragraphs (3) (a), (b), and (c) of this
section: Provided, That nothing in this Act shall be
construed as repealing or limiting the application of any
part of the Act, as amended, entitled "An Act relating to
bills of lading in interstate and foreign commerce,"
approved August 29, 1916 (U. S. C. title 49, secs. 81-124),
commonly known as the "Pomerene Bills of Lading Act."
(5) The shipper shall be deemed to have guaranteed to the
carrier the accuracy at the time of shipment of the marks,
number, quantity, and weight, as furnished by him; and the
shipper shall indemnify the carrier against all loss damages,
and expenses arising or resulting from inaccuracies in such
particulars. The right of the carrier to such indemnity shall
in no way limit his responsibility and liability under the
Page 47
contract of carriage or to any person other than the
shipper.
(6) Unless notice of loss or damage and the general nature
of such loss or damage be given in writing to the carrier or
his agent at the port of discharge before or at the time of
the removal of the goods into the custody of the person
entitled to delivery thereof under the contract of carriage,
such removal shall be prima facie evidence of the delivery
by the carrier of the goods as described in the bill of
lading. If the loss or damage is not apparent, the notice
must be given within three days of the delivery.
Said notice of loss or damage maybe endorsed upon the
receipt for the goods given by the person taking delivery
thereof.
The notice in writing need not be given if the state of the
goods has at the time of their receipt been the subject of
joint survey or inspection.
In any event the carrier and the ship shall be discharged
from all liability in respect of loss or damage unless suit is
brought within one year after delivery of the goods or the
date when the goods should have been delivered:
Provided, That if a notice of loss or damage, either
apparent or concealed, is not given as provided for in this
section, that fact shall not affect or prejudice the right of
the shipper to bring suit within one year after the delivery
of the goods or the date when the goods should have been
delivered .
In the case of any actual or apprehended loss or damage
the carrier and the receiver shall give all reasonable
facilities to each other for inspecting and tallying the
goods.
(7) After the goods are loaded the bill of lading to be
issued by the carrier, master, or agent of the carrier to the
shipper shall, if the shipper so demands, be a "shipped" bill
of lading Provided, That if the shipper shall have
previously taken up any document of title to such goods,
he shall surrender the same as against the issue of the
"shipped" bill of lading, but at the option of the carrier
such document of title may be noted at the port of
shipment by the carrier, master, or agent with name or
name the names of the ship or ships upon which the goods
Aimee Nono Calo [Transportation Law]
have been shipped and the date or dates of shipment, and
when so noted the same shall for the purpose of this
section be deemed to constitute a "shipped" bill of lading.
(8) Any clause, covenant, or agreement in a contract of
carriage relieving the carrier or the ship from liability for
loss or damage to or in connection with the goods, arising
from negligence, fault, or failure in the duties and
obligations provided in this section, or lessening such
liability otherwise than as provided in this Act, shall be null
and void and of no effect. A benefit of insurance in favor
of the carrier, or similar clause, shall be deemed to be a
clause relieving the carrier from liability.
RIGHTS AND IMMUNITIES
Section 4.
(1) Neither the carrier nor the ship shall be liable for loss
or damage arising or resulting from unseaworthiness unless
caused by want of due diligence on the part of the carrier
to make the ship seaworthy, and to secure that the ship is
properly manned, equipped, and supplied, and to make to
the holds, refrigerating and cool chambers, and all other
parts of the ship in which goods are carried fit and safe for
their reception, carriage, and preservation in accordance
with the provisions of paragraph (1) of section 3.
Whenever loss or damage has resulted from
unseaworthiness, the burden of proving the exercise of due
diligence shall be on the carrier or other persons claiming
exemption under the section.
(2) Neither the carrier nor the ship shall be responsible for
loss or damage arising or resulting from —
(a) Act, neglect, or default of the master, mariner,
pilot, or the servants of the carrier in the navigation or in
the management of the ship;
(b) Fire, unless caused by the actual fault or privity
of the carrier;
(c) Perils, dangers, and accidents of the sea or
other navigable waters;
(d) Act of God;
Page 48
 (e) Act of war,
(f) Act of public enemies;
(g) Arrest or restraint of princes, rulers, or people,
or seizure under legal process;
(h) Quarantine restrictions;
(i) Act or omission of the shipper or owner of the
goods, his agent or representative;
(j) Strikes or lockouts or stoppage or restraint of
labor from whatever cause, whether partial or general;
Provided, That nothing herein contained shall be
construed to relieve a carrier from responsibility for the
carrier's own acts;
(k) Riots and civil commotions
(l) Saving or attempting to save life or property at
sea;
(m) Wastage in bulk or weight or any other loss or
damage arising from inherent defect, quality, or vice of the
goods;
(n) Insufficiency of packing;
(o) Insufficiency of inadequacy of marks;
(p) Latent defects not discoverable by due
diligence; and
(q) Any other cause arising without the actual fault
and privity of the carrier and without the fault or neglect of
the agents or servants of the carrier, but the burden of
proof shall be on the person claiming the benefit of this
exception to show that neither the actual fault or privity of
the carrier nor the fault or neglect of the agents or servants
of the carrier contributed to the loss or damage.
(3) The shipper shall not be responsible for loss or damage
sustained by the carrier or the ship arising from any cause
without the act, fault, or neglect of the shipper, his agents,
or servants.
Aimee Nono Calo [Transportation Law]
(4) Any deviation in saving or attempting to save life or
property at sea, or any reasonable deviation shall not be
deemed to be an infringement or breach of this Act or of
the contract of carriage, and the carrier shall not be liable
for any loss or damage resulting therefrom: Provided,
however, That if the deviation is for the purpose of
loading cargo or unloading cargo or passengers it shall,
prima facie, be regarded as unreasonable.
(5) Neither the carrier nor the ship shall in any event be or
become liable for any loss or damage to or in connection
with the transportation of goods in an amount exceeding
$500 per package lawful money of the United States, or in
case of goods not shipped in packages, per customary
freight unit, or the equivalent of that sum in other
currency, unless the nature and value of such goods have
been declared by the shipper before shipment and inserted
in the bill of lading. This declaration, if embodied in the
bill of lading, shall be prima facie evidence, but shall not be
conclusive on the carrier.
By agreement between the carrier, master, or agent of the
carrier, and the shipper another maximum amount than
that mentioned in this paragraph may be fixed: Provided,
That such maximum shall not be less than the figure above
named. In no event shall the carrier be liable for more than
the amount of damage actually sustained.
Neither the carrier nor the ship shall be responsible in any
event for loss or damage to or in connection with the
transportation of the goods if the nature or value thereof
has been knowingly and fraudulently misstated by the
shipper in the bill of lading.
(6) Goods of an inflammable, explosive, or dangerous
nature to the shipment whereof the carrier, master or agent
of the carrier, has not consented with knowledge of their
nature and character, may at any time before discharge be
landed at any place or destroyed or rendered innocuous by
the carrier without compensation, and the shipper of such
goods shall be liable for all damages and expenses directly
or indirectly arising out of or resulting from such
shipment. If any such goods shipped with such knowledge
and consent shall become a danger to the ship or cargo,
they may in like manner be landed at any place, or
destroyed or rendered innocuous by the carrier without
Page 49
liability on the part of the carrier except to general average,
if any.
SURRENDER OF RIGHTS AND IMMUNITIES
AND INCREASE OF RESPONSIBILITIES AND
LIABILITIES
Section 5.
A carrier shall be at liberty to surrender in whole or in part
all or any of his rights and immunities or to increase any of
his responsibilities and liabilities under this Act, provided
such surrender or increase shall be embodied in the bill of
lading issued to the shipper.
The provisions of this Act shall not be applicable to
charter parties; but if bills of lading are issued in the case
of a ship under charter party, they shall comply with the
terms of this Act. Nothing in this Act shall be held to
prevent the insertion in a bill of lading of any lawful
provision regarding general average.
SPECIAL CONDITIONS
Section 6.
Notwithstanding the provisions of the preceding sections,
a carrier, master or agent of the carrier, and a shipper shall,
in regard to any particular goods be at liberty to enter into
any agreement in any terms as to the responsibility and
liability of the carrier for such goods, and as to the rights
and immunities of the carrier in respect of such goods, or
his obligation as to seaworthiness (so far as the stipulation
regarding seaworthiness is not contrary to public policy),
or the care or diligence of his servants or agents in regard
to the loading, handling stowage, carriage, custody, care,
and discharge of the goods carried by sea: Provided, That
in this case no bill of lading has been or shall be issued and
that the terms agreed shall be embodied in a receipt which
shall be a nonnegotiable document and shall be marked as
such.
Any agreement so entered into shall have full legal effect:
Provided, That this section shall not apply to ordinary
commercial shipments made in the ordinary course of
trade but only to other shipments where the character or
condition of the property to be carried or the
Aimee Nono Calo [Transportation Law]
circumstances, terms, and conditions under which the
carriage is to be performed are such as reasonably to justify
a special agreement.
Section 7.
Nothing contained in this Act shall prevent a carrier or a
shipper from entering into any agreement, stipulation,
condition, reservation, or exemption as to the
responsibility and liability of the carrier or the ship for the
loss or damage to or in connection with the custody and
care and handling of goods prior to the loading on and
subsequent to the discharge from the ship on which the
goods are carried by sea.
Section 8.
The provisions of this Act shall not affect the rights and
obligations of the carrier under the provisions of the
Shipping Act, 1916, or under the provisions of section
4281 to 4289, inclusive, of the Revised Statutes of the
United States, or of any amendments thereto; or under the
provisions of any other enactment for the time being in
force relating to the limitation of the liability of the owners
of seagoing vessels.
TITLE II
Section 9.
Nothing contained in this Act shall be construed as
permitting a common carrier by water to discriminate
between competing shippers similarly place in time and
circumstances, either (a) with respect to the right to
demand and receive bills of lading subject to the
provisions of this Act; or (b) when issuing such bills of
lading, either in the surrender of any of the carrier's rights
and immunities or in the increase of any of the carrier's
responsibilities and liabilities pursuant to section 6, title I,
of this Act or (c) in any other way prohibited by the
Shipping Act, 1916, s amended.
Section 10.
Section 25 of the Interstate Commerce Act is hereby
amended by adding the following proviso at the end of
paragraph 4 thereof: "Provided, however, That insofar as
Page 50
any bill of lading authorized hereunder relates to the
carriage of goods by sea, such bill of lading shall be subject
to the provisions of the Carriage of Goods by Sea Act."
Section 11.
Where under the customs of any trade the weight of any
bulk cargo inserted in the bill of lading is a weight
ascertained or accepted by a third party other than the
carrier or the shipper, and the fact that the weight is so
ascertained or accepted is stated in the bill of lading, then,
notwithstanding anything in this Act, the bill of lading shall
not be deemed to be prima facie evidence against the
carrier of the receipt of goods of the weight so inserted in
the bill of lading, and the accuracy thereof at the time of
shipment shall not be deemed to have been guaranteed by
the shipper.
Section 12. Nothing in this Act shall be construed as
superseding any part of the Act entitled "An act relating to
navigation of vessels, bills of lading, and to certain
obligations, duties, and rights in connection with the
carriage of property," approved February 13,1893, or of
any other law which would be applicable in the absence of
this Act, insofar as they relate to the duties, responsibilities,
and liabilities of the ship or carrier prior to the time when
the goods are loaded on or after the time they are
discharged from the ship.
Section 13.
This Act shall apply to all contracts for carriage of goods
by sea to or from ports of the United States in foreign
trade. As used in this Act the term "United States" includes
its districts, territories, and possessions: Provided,
however, That the Philippine legislature may by law
exclude its application to transportation to or from ports
of the Philippine Islands. The term "foreign trade" means
the transportation of goods between the ports of the
United States and ports of foreign countries. Nothing in
this Act shall be held to apply to contracts for carriage of
goods by sea between any port of the United States or its
possessions, and any other port of the United States or its
possession: Provided, however, That any bill of lading or
similar document of title which is evidence of a contract
for the carriage of goods by sea between such ports,
containing an express statement that it shall be subject to
Aimee Nono Calo [Transportation Law]
the provisions of this Act, shall be subjected hereto as fully
as if subject hereto as fully as if subject hereto by the
express provisions of this Act: Provided, further, That
every bill of lading or similar document of title which is
evidence of a contract for the carriage of goods by sea
from ports of the United States, in foreign trade, shall
contain a statement that it shall have effect subject to the
provisions of this Act.
Section 14.
Upon the certification of the Secretary of Commerce that
the foreign commerce of the United States in its
competition with that of foreign nations is prejudiced the
provisions, or any of them, of Title I of this Act, or by the
laws of any foreign country or countries relating to the
carriage of goods by sea, the President of the United
States, may, from time to time, by proclamation, suspend
any or all provisions of Title I of this Act for such periods
of time or indefinitely as may be designated in the
proclamation. The President may at any time rescind such
suspension of Title I hereof, and any provisions thereof
which may have been suspended shall thereby be
reinstated and again apply to contracts thereafter made for
the carriage of goods by sea. Any proclamation of
suspension or rescission of any such suspension shall take
effect on a date named therein, which date shall be not less
than ten days from the issue of the proclamation. Any
contract for the carriage of goods by sea, subject to the
provisions of this Act, effective during any period when
title I hereof, or any part thereof, is suspended, shall be
subject to all provisions of law now or hereafter applicable
to that part of Title I which may have thus been
suspended.
Section 15.
This Act shall take effect ninety days after the date of its
approval; but nothing in this Act shall apply during a
period not to exceed one year following its approval to any
contract for the carriage of goods by sea, made before the
date on which this Act is approved, nor to any bill of
lading or similar document of title issued, whether before
or after such date of approval in pursuance of any such
contract as aforesaid.
Page 51
Section 16.
This Act may be cited as the "Carriage of Goods by Sea
Act."
Approved, April 16, 1936.
5) Salvage Law (Act No. 2616)
Section 1.
When in case of shipwreck, the vessel or its cargo shall be
beyond the control of the crew, or shall have been
abandoned by them, and picked up and conveyed to a safe
place by other persons, the latter shall be entitled to a
reward for the salvage.
Those who, not being included in the above paragraph,
assist in saving a vessel or its cargo from shipwreck, shall
be entitled to a like reward.
Section 2.
If the captain of the vessel, or the person acting in his
stead, is present, no one shall take from the sea, or from
the shores or coast merchandise or effects proceeding
from a shipwreck or proceed to the salvage of the vessel,
without the consent of such captain or person acting in his
stead.
Section 3.
He who shall save or pick up a vessel or merchandise at
sea, in the absence of the captain of the vessel, owner, or a
representative of either of them, they being unknown, shall
convey and deliver such vessel or merchandise, as soon as
possible, to the Collector of Customs, if the port has a
collector, and otherwise to the provincial treasurer or
municipal mayor.
Section 4.
After the salvage is accomplished, the owner or his
representative shall have a right to the delivery of the
vessel or things saved, provided that he pays, or gives a
bond to secure, the expenses and the proper reward.
The amount and sufficiency of the bond, in the absence of
agreement, shall be determined by the Collector of
Aimee Nono Calo [Transportation Law]
Customs or by the Judge of the Court of First Instance of
the province in which the things saved may be found.
Section 5.
The Collector of Customs, provincial treasurer, or
municipal mayor, to whom a salvage is reported, shall
order:
That the things saved be safeguard and inventoried.
The sale at public auction of the things saved which may
be in danger of immediate loss or of those whose
conservation is evidently prejudicial to the interests of the
owner, when no objection is made to such sale.
The advertisement within the thirty days subsequent to the
salvage, in one of the local newspapers or in the nearest
newspaper published, of all the details of the disaster, with
a statement of the mark and number of the effects
requesting all interested persons to make their claims.
Section 6.
If, while the vessel or things saved are at the disposition of
the authorities, the owner or his representative shall claim
them, such authorities shall order their delivery to such
owner or his representative, provided that there is no
controversy over their value, and a bond is given by the
owner or his representative to secure the payment of the
expenses and the proper reward. Otherwise, the delivery
shall nor be made until the matter is decided by the Court
of First Instance of the province.
Section 7.
No claim being presented in the three months subsequent
to the publication of the advertisement prescribed in sub-
section (c) of Section five, the things save shall be sold at
public auction, and their proceeds, after deducting the
expenses and the proper reward shall be deposited in the
insular treasury. If three years shall pass without anyone
claiming it, one-half of the deposit shall be adjudged to
him who saved the things, and the other half to the insular
government.
Section 8.
Page 52
The following shall have no right to a reward for salvage or
assistance:
The crew of the vessel shipwrecked or which was is danger
of shipwreck;
He who shall have commenced the salvage in spite of
opposition of the captain or his representative; and
He who shall have failed to comply with the provisions of
Section three.
Section 9.
If, during the danger, an agreement is entered into
concerning the amount of the reward for salvage or
assistance, its validity may be impugned because it is
excessive, and it may be required to be reduced to an
amount proportionate to the circumstances.
Section 10.
In a case coming under the last preceding section, as well
as in the absence of an agreement, the reward for salvage
or assistance shall be fixed by the Court of First Instance
of the province where the things salvaged are found, taking
into account principally the expenditures made to recover
or save the vessel or the cargo or both, the zeal
demonstrated, the time employed, the services rendered,
the excessive express occasioned the number of persons
who aided, the danger to which they and their vessels were
exposed as well as that which menaced the things
recovered or salvaged, and the value of such things after
deducting the expenses.
Section 11.
From the proceeds of the sale of the things saved shall be
deducted, first, the expenses of their custody,
conservation, advertisement, and auction, as well as
whatever taxes or duties they should pay for their entrance;
then there shall be deducted the expenses of salvage; and
from the net amount remaining shall be taken the reward
for the salvage or assistance which shall not exceed fifty
per cent of such amount remaining.
Section 12.
Aimee Nono Calo [Transportation Law]
If in the salvage or in the rendering of assistance different
persons shall have intervened the reward shall be divided
between them in proportion to the services which each
one may have rendered, and, in case of doubt, in equal
parts.
Those who, in order to save persons, shall have been
exposed to the same dangers shall also have a right to
participation in the reward.
Section 13.
If a vessel or its cargo shall have been assisted or saved,
entirely or partially, by another vessel, the reward for
salvage or for assistance shall be divided between the
owner, the captain, and the remainder of the crew of the
latter vessel, so as to give the owner a half, the captain a
fourth, and all the remainder of the crew the other fourth
of the reward, in proportion to their respective salaries, in
the absence of an agreement to the contrary. The express
of salvage, as well as the reward for salvage or assistance,
shall be a charge on the things salvaged on their value.
Section 14.
This Act shall take effect on its passage.
Enacted: February 4, 1916
Enacted without executive approval, August 3, 1959
6) Public Service Act (Commonwealth Act No.
65)
CHAPTER I O RGANIZATION
Section 1.
This Act shall be known as the "Public Service Act."
Section 2.
There is created under the Department of Justice a
commission which shall be designated and known as the
Public Service Commission, composed of one Public
Service Commissioner and five Associate Commissioners,
and which shall be vested with the powers and duties
hereafter specified. Whenever the word "Commission" is
used in this Act, it shall be held to mean the Public Service
Page 53
Commission, and whenever the word "Commissioner" is
used in this Act it shall be held to mean the Public Service
Commissioner or anyone of the Associate Commissioners.
The Public Service Commissioner and the Associate Public
Service Commissioners shall be natural born citizens and
residents of the Philippines, not under thirty years of age;
members of the Bar of the Philippines, with at least five
years of law practice or five years of employment in the
government service requiring a lawyer's diploma; and shall
be appointed by the President of the Philippines, with the
consent of the Commission on Appointments of the
Congress of the Philippines: Provided, however, That the
present Commissioner and the personnel of the
Commission shall continue in office without the necessity
of reappointment. The Commissioners shall have the rank
and privilege of retirement of Judges of the Courts of First
Instance. (As amended by Republic Act Nos. 178 and
2677)
Section 3.
The Commissioner and Associate Commissioners shall
hold office until they reach the age of seventy years, or
until removed in accordance with the procedures
prescribed in section one hundred and seventy-three of
Act Numbered Twenty-seven hundred and eleven, known
as the Revised Administrative Code: Provided, however,
That upon retirement any Commissioner of Associate
Commissioner shall be entitled to all retirement benefits
and privileges for Judges of the Courts of First Instance or
under the retirement law to which he may be entitled on
the date of his retirement. In case of the absence, for any
reason, of the Public Service Commissioner, the Associate
Commissioner with seniority of appointment shall act as
Commissioner. If on account of absence, illness, or
incapacity of any of three Commissioners, or whenever by
reason of temporary disability of any Commissioner or of a
vacancy occurring therein, the requisite number of
Commissioners necessary to render a decision or issue an
order in any case is not present, or in the event of a tie
vote among the Commissioners, the Secretary of Justice
may designate such number of Judges of the Courts of
First Instance, or such number of attorneys of the legal
division of the Commission, as may be necessary to sit
temporarily as Commissioners in the Public Service
Commission.
Aimee Nono Calo [Transportation Law]
The Public Service Commission shall sit individually or as
a body en banc or in two divisions of three Commissioners
each. The Public Service Commissioner shall preside when
the Commission sits en banc and in one division. In the
other division, the Associate Commissioner with seniority
of appointment in that division shall preside. Five
Commissioners shall constitute a quorum for sessions en
banc and two Commissioners shall constitute a quorum
for the sessions of a division. In the absence of a quorum,
the session shall be adjourned until the requisite number is
present.
All the powers herein vested upon the Commission shall
be considered vested upon any of the Commissioners,
acting either individually or jointly as hereinafter provided.
The Commissioners shall equitably divide among
themselves all pending cases and those that may hereafter
be submitted to the Commissioner, in such manner and
form as they may determine, and shall proceed to hear and
determine the case assigned to each or to their respective
divisions, or to the Commission en banc as follows:
uncontested cases, except those pertaining to the fixing of
rates, shall be decided by one Commissioner; contested
cases and all cases involving the fixing of rates shall be
decided by the Commission in division and the
concurrence of at least two Commissioners in the division
shall be necessary for the promulgation of a decision or
non-interlocutory order in these cases: Provided, however,
That any motion for reconsideration of a decision or non-
interlocutory order of any Commissioner or division shall
be heard directly by the Commission en banc and the
concurrence of at least four Commissioners shall be
necessary for the promulgation of a final decision or order
resolving such motion for reconsideration. (As amended
by Republic Act Nos. 723 and 2677)
Section 4.
The Public Service Commissioner shall receive an annual
compensation of thirteen thousand pesos; and each of the
Associate Commissioners an annual compensation of
twelve thousand pesos. The Commissioners shall be
assisted by one chief attorney, one finance and rate
regulation officer, one chief utilities regulation engineer,
one chief accountant, one transportation regulation chief,
one secretary of the Public Service Commission, and three
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public utilities advisers who shall receive an annual
compensation of not less than ten thousand eight hundred
pesos each; five assistant chiefs of division who shall
receive an annual compensation of not less than nine
thousand six hundred pesos each; twelve attorneys who
shall receive an annual compensation of not less than nine
thousand pesos each; and a technical and confidential staff
to be composed of two certified public accounts, two
electrical engineers, two mechanical or communication
engineers, and two special assistants who shall receive an
annual compensation of not less than seven thousand two
hundred pesos each. (As amended by Republic Act Nos.
723, 2677 and 3792)
Section 5.
The Public Service Commissioner, the Associate Public
Service Commissioners, and all other officers and
employees of the Public Service Commission shall enjoy
the same privileges and rights as the officer and employees
of the classified civil service of the Government of the
Philippines. They shall also be entitled to receive from the
Government of the Philippines their necessary travelling
expenses while travelling on the business of the
Commission, which shall be paid on proper voucher
therefor, approved by the Secretary of Justice, out of funds
appropriated for the contingent expenses of the
Commission.
When the exigency of the service so requires and with the
approval of the Secretary of Justice, and subject to the
provisions of Commonwealth Act Numbered Two
hundred forty-six, as amended, funds may be set aside
from the appropriations provided for the Commission
and/or from the fees collected under Section forty of this
Act to defray the expenses to be incurred by the Public
Service Commissioner or any of the Associate
Commissioners, officers or employees of the Commission
to be designated by the Commissioner, with the approval
of the Secretary of Justice, in the study of modern trends
in supervision and regulation of public services. (As
amended by Republic Act No. 3792)
Section 6.
The Secretary of Justice, upon recommendation of the
Public Service Commissioner, shall appoint all subordinate
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officers and employees of the Commission as may be
provided in the Appropriation Act. The Public Service
Commissioner shall have general executive control,
direction, and supervision over the work of the
Commission and of its members, body and personnel, and
over all administrative business. (As amended by Republic
Act Nos. 178 and 3792)
Section 7.
The Secretary of the Commission, under the direction of
the Commissioner, shall have charge of the administrative
business of the Commission and shall perform such other
duties as may be required of him. He shall be the recorder
and official reporter of the proceedings of the Commission
and shall have authority to administer oaths in all matters
coming under the jurisdiction of the Commission. He shall
be the custodian of the records, maps, profiles, tariffs,
itineraries, reports, and any other documents and papers
filed with the Commission or entrusted to his care and
shall be responsible therefor to the Commission. He shall
have authority to designate from time to time any of his
delegates to perform the duties of Deputy Secretary with
any of the Commissioners.
Section 8.
The Commission shall furnish the Secretary such of its
findings and decisions as in its judgment may be of general
public interest; the Secretary shall compile the same for the
purpose of publication in a series of volumes to be
designated "Reports of the Public Service Commission of
the Philippines," which shall be published in such form
and manner as may be best adapted for public information
and use, and such authorized publications shall be
competent evidence of the reports and decisions of the
Commission therein contained without any further proof
or authentication thereof.
Section 9.
No member or employee of the Commission shall have
any official or professional relation with any public service
as herein defined, or hold any office of profit or trust with
the Government of the Philippines.
Section 10.
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The Commission shall have its office in the City of Manila
or at such other place as may be designated, and may hold
hearings on any proceedings at such times and places,
within the Philippines, as it may provide by order in
writing: Provided, That during the months of April and
May of each year, at least three Commissioners shall be on
vacation in such manner that once every two years at least
three of them shall be on duty during April and May:
Provided, however, That in the interest of public service,
the Secretary of Justice may require any or all the
Commissioners not on duty to render services and
perform their duties during the vacation months. (As
amended by Republic Act Nos. 176 and 3792)
Section 11.
The Commission shall have the power to make needful
rules for its Government and other proceedings not
inconsistent with this Act and shall adopt a common seal,
and judicial notice shall be taken for such seal. True copies
of said rules and other amendments shall be promptly
furnished to the Bureau of Printing and shall be forthwith
published in the Official Gazette.
CHAPTER II J URISDICTION, POWERS AND
DUTIES OF THE COMMISSION
Section 13.
(a) The Commission shall have jurisdiction, supervision,
and control over all public services and their franchises,
equipment, and other properties, and in the exercise of its
authority, it shall have the necessary powers and the aid of
the public force: Provided, That public services owned or
operated by government entities or government-owned or
controlled corporations shall be regulated by the
Commission in the same way as privatelyowned public
services, but certificates of public convenience or
certificates of public convenience and necessity shall not
be required of such entities or corporations: And provided,
further, That it shall have no authority to require
steamboats, motor ships and steamship lines, whether
privately-owned, or owned or operated by any
Government controlled corporation or instrumentality to
obtain certificate of public convenience or to prescribe
their definite routes or lines of service.
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(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,
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, icerefrigeration
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.
(c) The word "person" includes every individual, co-
partnership, joint-stock company or corporation, whether
domestic or foreign, their lessees, trustees, or receivers, as
well as any municipality, province, city, government-owned
or controlled corporation, or agency of the Government of
the Philippines, and whatever other persons or entities that
may own or possess or operate public services. (As
amended by Com. Act 454 and RA No. 2677)
Section 14.
The following are exempted from the provisions of the
preceding section:
(a) Warehouses;
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(b) Vehicles drawn by animals and bancas moved by oar or
sail, and tugboats and lighters;
(c) Airships within the Philippines except as regards the
fixing of their maximum rates on freight and passengers;
(d) Radio companies except with respect to the fixing of
rates;
(e) Public services owned or operated by any
instrumentality of the National Government or by any
government-owned or controlled corporation, except with
respect to the fixing of rates. (As amended by Com. Act
454, RA No. 2031, and RA No. 2677 )
Section 15.
With the exception of those enumerated in the preceding
section, no public service shall operate in the Philippines
without possessing a valid and subsisting certificate from
the Public Service Commission known as "certificate of
public convenience," or "certificate of public convenience
and necessity," as the case may be, to the effect that the
operation of said service and the authorization to do
business will promote the public interests in a proper and
suitable manner.
The Commission may prescribe as a condition for the
issuance of the certificate provided in the preceding
paragraph that the service can be acquired by the Republic
of the Philippines or any instrumentality thereof upon
payment of the cost price of its useful equipment, less
reasonable depreciation; and likewise, that the certificate
shall be valid only for a definite period of time; and that
the violation of any of these conditions shall produce the
immediate cancellation of the certificate without the
necessity of any express action on the part of the
Commission.
In estimating the depreciation, the effect of the use of the
equipment, its actual condition, the age of the model, or
other circumstances affecting its value in the market shall
be taken into consideration.
The foregoing is likewise applicable to any extension or
amendment of certificates actually in force and to those
which may hereafter be issued, to permit to modify
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itineraries and time schedules of public services, and to
authorizations to renew and increase equipment and
properties.
Section 16.
Proceedings of the Commission, upon notice and hearing.
- The Commission shall have power, upon proper notice
and hearing in accordance with the rules and provisions of
this Act, subject to the limitations and exceptions
mentioned and saving provisions to the contrary :
(a) To issue certificates which shall be known as
certificates of public convenience, authorizing the
operation of public service within the Philippines
whenever the Commission finds that the operation of the
public service proposed and the authorization to do
business will promote the public interest in a proper and
suitable manner. Provided, That thereafter, certificates of
public convenience and certificates of public convenience
and necessity will be granted only to citizens of the
Philippines or of the United States or to corporations, co-
partnerships, associations or joint-stock companies
constituted and organized under the laws of the
Philippines; Provided, That sixty per centum of the stock
or paid-up capital of any such corporations, co-
partnership, association or joint-stock company must
belong entirely to citizens of the Philippines or of the
United States: Provided, further, That no such certificates
shall be issued for a period of more than fifty years.
(b) To approve, subject to constitutional
limitations any franchise or privilege granted under the
provisions of Act No. Six Hundred and Sixty-seven, as
amended by Act No. One Thousand and twenty-two, by
any political subdivision of the Philippines when, in the
judgment of the Commission, such franchise or privilege
will properly conserve the public interests, and the
Commission shall in so approving impose such conditions
as to construction, equipment, maintenance, service, or
operation as the public interests and convenience may
reasonably require, and to issue certificates of public
convenience and necessity when such is required or
provided by any law or franchise.
(c) To fix and determine individual or joint rates,
tolls, charges, classifications, or schedules thereof, as well
Page 57
as commutation, mileage, kilometrage, and other special
rates which shall be imposed observed and followed
thereafter by any public service: Provided, That the
Commission may, in its discretion, approve rates proposed
by public services provisionally and without necessity of
any hearing; but it shall call a hearing thereon within thirty
days, thereafter, upon publication and notice to the
concerns operating in the territory affected: Provided,
further, That in case the public service equipment of an
operator is used principally or secondarily for the
promotion of a private business, the net profits of said
private business shall be considered in relation with the
public service of such operator for the purpose of fixing
the rates.
(d) To fix just and reasonable standards,
classifications, regulations, practices, measurement, or
service to be furnished, imposed, observed, and followed
thereafter by any public service.
(e) To ascertain and fix adequate and serviceable
standards for the measurement of quantity, quality,
pressure, initial voltage, or other condition pertaining to
the supply of the product or service rendered by any public
service, and to prescribe reasonable regulations for the
examination and test of such product or service and for
the measurement thereof.
(f) To establish reasonable rules, regulations,
instructions, specifications, and standards, to secure the
accuracy of all meters and appliances for measurements.
(g) To compel any public service to furnish safe,
adequate, and proper service as regards the manner of
furnishing the same as well as the maintenance of the
necessary material and equipment.
(h) To require any public service to establish,
construct, maintain, and operate any reasonable extension
of its existing facilities, where in the judgment of said
Commission, such extension is reasonable and practicable
and will furnish sufficient business to justify the
construction and maintenance of the same and when the
financial condition of the said public service reasonably
warrants the original expenditure required in making and
operating such extension.
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(i) To direct any railroad, street railway or traction
company to establish and maintain at any junction or point
of connection or intersection with any other line of said
road or track, or with any other line of any other railroad,
street railway or traction to promote, such just and
reasonable connection as shall be necessary to promote the
convenience of shippers of property, or of passengers, and
in like manner direct any railroad, street railway, or traction
company engaged in carrying merchandise, to construct,
maintain and operate, upon reasonable terms, a switch
connection with any private sidetrack which may be
constructed by any shipper to connect with the railroad,
street railway or traction company line where, in the
judgment of the Commission, such connection is
reasonable and practicable and can be out in with safety
and will furnish sufficient business to justify the
construction and maintenance of the same.
(j) To authorize, in its discretion, any railroad,
street railway or traction company to lay its tracks across
the tracks of any other railroad, street railway or traction
company or across any public highway.
(k) To direct any railroad or street railway
company to install such safety devices or about such other
reasonable measures as may in the judgment of the
Commission be necessary for the protection of the public
are passing grade crossing of (1) public highways and
railroads, (2) public highways and streets railway, or (3)
railways and street railways.
(l) To fix and determine proper and adequate rates
of depreciation of the property of any public service which
will be observed in a proper and adequate depreciation
account to be carried for the protection of stockholders,
bondholders or creditors in accordance with such rules,
regulations, and form of account as the Commission may
prescribe. Said rates shall be sufficient to provide the
amounts required over and above the expense of
maintenance to keep such property in a state of efficiency
corresponding to the progress of the industry. Each public
service shall conform its depreciation accounts to the rates
so determined and fixed, and shall set aside the moneys so
provided for out of its earnings and carry the same in a
depreciation fund. The income from investments of
money in such fund shall likewise be carried in such fund.
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This fund shall not be expended otherwise than for
depreciation, improvements, new construction, extensions
or conditions to the properly of such public service.
(m) To amend, modify or revoke at any time
certificate issued under the provisions of this Act,
whenever the facts and circumstances on the strength of
which said certificate was issued have been misrepresented
or materially changed.
(n) To suspend or revoke any certificate issued
under the provisions of this Act whenever the holder
thereof has violated or willfully and contumaciously
refused to comply with any order rule or regulation of the
Commission or any provision of this Act: Provided, That
the Commission, for good cause, may prior to the hearing
suspend for a period not to exceed thirty days any
certificate or the exercise of any right or authority issued or
granted under this Act by order of the Commission,
whenever such step shall in the judgment of the
Commission be necessary to avoid serious and irreparable
damage or inconvenience to the public or to private
interests.
(o) To fix, determine, and regulate, as the
convenience of the state may require, a special type for
autobusses, trucks, and motor trucks to be hereafter
constructed, purchased, and operated by operators after
the approval of this Act; to fix and determine a special
registration fee for auto-buses, trucks, and motor trucks so
constructed, purchased and operated: Provided, That said
fees shall be smaller than more those charged for auto-
busses, trucks, and motor trucks of types not made
regulation under the subsection.
Section 17.
Proceedings of Commission without previous hearing. -
The Commission shall have power without previous
hearing, subject to established limitations and exception
and saving provisions to the contrary:
(a) To investigate, upon its own initiative, or upon
complaint in writing, any matter concerning any public
service as regards matters under its jurisdiction; to require
any public service to furnish safe, adequate, and proper
service as the public interest may require and warrant; to
Aimee Nono Calo [Transportation Law]
enforce compliance with any standard, rule, regulation,
order or other requirement of this Act or of the
Commission, and to prohibit or prevent any public service
as herein defined from operating without having first
secured a certificate of public convenience or public
necessity and convenience, as the case may be and require
existing public services to pay the fees provided for in this
Act for the issuance of the proper certificate of public
convenience or certificate of public necessity and
convenience, as the case may be, under the penalty, in the
discretion by the Commission, of the revocation and
cancellation of any acquired rights.
(b) To require any public service to pay the actual
expenses incurred by the Commission in any investigation
if it shall be found in the same that any rate, tool, charge,
schedule, regulation, practice, act or service thereof is in
violation of any provision of this Act or any certificate,
order, rule, regulation or requirement issued or established
by the Commission. The Commission may also assess
against any public service costs not to exceed twenty-five
pesos with reference to such investigation.
(c) From time to time appraise and value the
property of any public service, whenever in the judgment
of the Commission it shall be necessary so to do, for the
purpose of carrying out any of the provisions of this Act,
and in making such valuation the Commission may have
access to and use any books, documents, or records in the
possession of any department, bureau, office, or board of
the government of the Philippines or any political
subdivision thereof.
(d) To provide, on motion by or at the request of
any consumer or user of a public service, for the
examination and test of any appliance used for the
measuring of any product or service of a public service,
and for that purpose, by its agents, experts, or examiners
to enter upon any premises where said appliances may be,
and other premises of the public service, for the purpose
of setting up and using on said premises any apparatus
necessary therefor. and to fix the fees to be paid by any
consumer or user who may apply to the Commission for
such examination or test to be made, and if the appliance
be found defective or incorrect to the disadvantage of the
Page 59
consumer or user to require the fees paid to be refunded to
the consumer or user by the public service concerned.
(e) To permit any street railway or traction
company to change its existing gauge to standard steam
railroad gauge, upon such terms and conditions as the
Commission shall prescribe.
(f) To grant to any public service special permits
to make extra or special trips within the territory covered
by its certificates of public convenience, and to make
special excursion trips outside of its own territory if the
public interest or special circumstances required it:
Provided, however, that in case a public service cannot
render such extra service on its own line or in its own
territory, a special permit for such extra service may be
granted to any other public service.
(g) To require any public service to keep its books,
records, and accounts so as to afford an intelligent
understanding of the conduct of its business and to that
end to require every such public service of the same class
to adopt a uniform system of accounting. Such system
conform to any system approved and confirmed by the
Auditor General.
(h) To require any public service to furnish annual
reports of finances and operations. Such reports shall set
forth in detail the capital stock issued, the amounts of said
capital stock paid up and the form of payment thereof; the
dividends paid, the surplus, if any and the number of
stockholders, the consolidated and pending obligations and
the interest paid thereon; the cost and value of the
property of the operator; concessions or franchises and
equipment; the number of employees and salaries paid to
each class; the accidents to passengers, employees, and
other person, and the causes thereof; the annual
expenditures on improvements; the manner of their
investment and nature of such improvements; the receipts
and profits in each of the branches of the business and of
whatever source; the operating and other expenses; the
balance of profits and losses; and a complete statement of
the annual financial operations of the operator, including
an annual balance sheet. Such reports shall also contain
any information which the Commission may require
concerning freight and passenger rates, or agreements,
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compromises or contracts affecting the same. Said reports
shall cover a period of twelve months, ending on
December thirty-first of each year, and shall be sworn to
by the officer or functionary of the public service
authorized therefor. The Commission shall also have
power to require from time to time special reports
containing such information as above provided for or on
other matters as the Commission may deem necessary or
advisable.
(i) To require every public service to file with the
Commission a statement in writing, verified by the oaths
of the owner or the president and the secretary thereof, if a
corporation, setting forth the name, title of office or
portion, and post-office address, and the authority, power
and duties of every officer, member of the board of
directors, trustees executive committee, superintendent,
chief or head of construction and operation thereof, in
such form as to disclose the source and origin of each
administrative act, rule, decision, order or other action of
the operator of such public service; and, within ten days
after any change is made in the title of, or authority,
powers or duties appertaining to any such office or
position, or the person holding the same, filed with the
Commission a like statement, verified in like manner,
setting forth such change.
(j) To require any public service to comply with
the laws of the Philippines and with any provincial
resolution or municipal ordinance relating thereto and to
conform to the duties imposed upon it thereby or by the
provisions of its own character, whether obtained under
any general or special law of the Philippines.
(k) To investigate any or all accidents that may
occur on the property of any public service or directly or
indirectly arising from or connected with its maintenance
or operation in the Philippines; to require any public
service to give the Commission immediate and effective
notice of all any such accidents, and to make such order or
recommendation with respect thereto as the public interest
may warrant or require.
(l) To require every public service s herein defined
to file within complete schedules of every classification
employed and of every individual or joint rate, toll fare or
Page 60
charge made, charged or exacted by it for any product
supplied or service rendered within the Philippines and, in
the case of public carriers, to file with it a statement
showing the itineraries or routes served as specified in such
requirement.
CHAPTER III O PERATORS OF PUBLIC
SERVICES REGULATIONS AND
PROHIBITIONS
Section 18.
It shall be unlawful for any individual, co-partnership,
association, corporation or joint-stock company, their
lessees, trustees or receivers appointed by any court
whatsoever, or any municipality, province, or other
department of the Government of the Philippines to
engage in any public service business without having first
secured from the Commission a certificate of public
convenience or certificate of public convenience and
necessity as provided for in this Act, except grantees of
legislative franchises expressly exempting such grantees
from the requirement of securing a certificate from this
Commission as well as concerns at present existing
expressly exempted from the jurisdiction of the
Commission, either totally or in part, by the provisions of
section thirteen of this Act.
Section 19. Unlawful Acts. - It shall be unlawful for any
public service:
(a) To provide or maintain any service that is
unsafe, improper, or inadequate or withhold or refuse any
service which can reasonably be demanded and furnished,
as found and determined by the Commission in a final
order which shall be conclusive and shall take effect in
accordance with this Act, upon appeal of otherwise.
(b) To make or give, directly or indirectly, by itself
or through its agents, attorneys or brokers, or any of them,
discounts or rebates on authorized rates, or grant credit for
the payment of freight charges, or any undue or
unreasonable preference or advantage to any person of
corporation or to any locality or to any particular
description of traffic or service, or subject any particular
person or corporation or locality or any particular
description of traffic to any prejudice or disadvantage in
Aimee Nono Calo [Transportation Law]
any respect whatsoever; to adopt, maintain, or enforce any
regulation, practice or measurement which shall be found
or determined by the Commission to be unjust,
unreasonable, unduly preferential or unjustly
discriminatory in a final order which shall be conclusive
and shall take effect in accordance with the provisions of
this Act, upon repeal or otherwise.
(c) To refuse or neglect, when requested by the
Director of Posts or his authorized representative, to carry
public mail on the regular trips of any public land
transportation service maintained or operated by any such
public service; upon such terms and conditions and for a
consideration in such amount as may be agreed upon
between the Director of Posts and the public service
carrier of fixed by the Commission in the absence of an
agreement between the Director of Posts and the carrier.
In case the Director of Posts and public service carrier are
unable to agree on the amount of the compensation to be
paid for the carriage of the mail, the Director of Posts shall
forthwith request the Commission to fix a just and
reasonable compensation for such carriage and the same
shall be promptly fixed by the Commission in accordance
with Section sixteen of this Act.
Section 20.
Acts requiring the approval of the Commission. - Subject
to established limitations and exceptions and saving
provisions to the contrary, it shall be unlawful for any
public service or for the owner, lessee or operator thereof,
without the approval and authorization of the Commission
previously had
(a) To adopt, establish, fix, impose, maintain,
collect or carry into effect any individual or joint rates,
commutation, mileage or other special rate, toll, fare,
charge, classification or itinerary. The Commission shall
approve only those that are just and reasonable and not
any that are unjustly discriminatory or unduly preferential,
only upon reasonable notice to the public services and
other parties concerned, giving them a reasonable
opportunity to be heard and the burden of the proof to
show that the proposed rates or regulations are just and
reasonable shall be upon the public service proposing the
same.
Page 61
 (b) To establish, construct, maintain, or operate
new units or extend existing facilities or make any other
addition to or general extension of the service.
(c) To abandon any railroad station or stop the
sale of passenger tickets, or cease to maintain an agent to
receive and discharge freight at any station now or
hereafter established at which passenger tickets are now or
may hereafter be regularly sold, or at which such agent is
now or may hereafter be maintained, or make any
permanent change in its time tables or itineraries on any
railroad or in its service.
(d) To lay any railroad or street railway track
across any highway, so as to make a new crossing at grade,
or cross the tracks of any other railroad or street railway,
provided, that this subsection shall not apply to
replacements of lawfully existing tracks.
(e) Hereafter to issue any stock or stock
certificates representing an increase of capital; or issue any
share of stock without par value; or issue any bonds or
other evidence of indebtedness payable in more than one
year from the issuance thereof, provided that it shall be the
duty of the Commission, after hearing, to approve any
such issue maturing in more than one year from the date
thereof, when satisfied that the same is to be made in
accordance with law , and the purpose of such issue be
approved by the Commission.
(f) To capitalize any franchise in excess of the
amount, inclusive of any tax or annual charge, actually paid
to the Government of the Philippines or any political
subdivision thereof as the consideration of said franchise;
capitalize any contract for consolidation, merger or lease,
or issue any bonds or other evidence of indebtedness
against or as a lien upon any contract for consolidation,
merger, or lease: Provided, however, that the provisions of
this section shall not prevent the issuance of stock, bonds,
or other evidence of indebtedness subject to the approval
of the Commission by any lawfully merged or consolidated
public services not in contravention of the provisions of
this section.
(g) To sell, alienate, mortgage, encumber or lease
its property, franchises, certificates, privileges, or rights or
any part thereof; or merge or consolidate its property,
Aimee Nono Calo [Transportation Law]
franchises privileges or rights, or any part thereof, with
those of any other public service. The approval herein
required shall be given, after notice to the public and
hearing the persons interested at a public hearing, if it be
shown that there are just and reasonable grounds for
making the mortgaged or encumbrance, for liabilities of
more than one year maturity, or the sale, alienation, lease,
merger, or consolidation to be approved, and that the
same are not detrimental to the public interest, and in case
of a sale, the date on which the same is to be
consummated shall be fixed in the order of approval:
Provided, however, that nothing herein contained shall be
construed to prevent the transaction from being negotiated
or completed before its approval or to prevent the sale,
alienation, or lease by any public service of any of its
property in the ordinary course of its business.
(h) To sell or register in its books the transfer or
sale of shares of its capital stock, if the result of that sale in
itself or in connection with another previous sale, shall be
to vest in the transferee more than forty per centum of the
subscribed capital of said public service. Any transfer made
in violation of this provision shall be void and of no effect
and shall not be registered in the books of the public
service corporation. Nothing herein contained shall be
construed to prevent the holding of shares lawfully
acquired. (As amended by Com. Act No. 454.)
(i) To sell, alienate or in any manner transfer
shares of its capital stock to any alien if the result of that
sale, alienation, or transfer in itself or in connection with
another previous sale shall be the reduction to less than
sixty per centum of the capital stock belonging to
Philippine citizens. Such sale, alienation or transfer shall be
void and of no effect and shall be sufficient cause for
ordering the cancellation of the certificate.
(j) To issue, give or tender, directly or indirectly,
any free ticket free pass or free or reduced rate of
transportation for passengers, except to the following
persons: (1) officers, agents, employees, attorneys,
physicians and surgeons of said public service, and
members of their families; (2) inmates of hospitals or
charity institutions, and persons engaged in charitable
work; (3) indigent, destitute, and homeless persons when
transported by charitable societies or hospitals, and the
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necessary agents employed in such transportation; (4) the
necessary caretakers, going and returning, of livestock,
poultry, fruit, and other freight under uniform and non-
discriminatory regulation; (5) employees of sleeping car
corporations, express corporations and telegraph and
telephone corporations, railway and marine mail service
employees, when traveling in the course of their official
duly; (6) post-office inspectors, customs officers and
inspectors, and immigration inspectors when engaged in
inspection; (7) witnesses attending any legal investigation
in which the public service is an interested party; (8)
persons injured in accidents or wrecks, and physicians and
nurses attending such persons; (9) peace officers and men
of regularly constituted fire departments. (As amended by
Com. Act No. 454.)
(k) Adopt, maintain, or apply practices or
measures, rules or regulations to which the public shall be
subject in its relations with the public service.
CHAPTER IV
P ENALTIES FOR VIOLATIONS
Section 21.
Every public service violating or failing to comply with the
terms and conditions of any certificate or any orders,
decisions or regulations of the Commission shall be
subject to a fine of not exceeding two hundred pesos per
day for every day during which such default or violation
continues; and the Commission is hereby authorized and
empowered to impose such fine, after due notice and
hearing.
The fines so imposed shall be paid to the Government of
the Philippines through the Commission, and failure to pay
the fine in any case within the same specified in the order
or decision of the Commission shall be deemed good and
sufficient reason for the suspension of the certificate of
said public service until payment shall be made. Payment
may also be enforced by appropriate action brought in a
court of competent jurisdiction. The remedy provided in
this section shall not be a bar to, or affect any other
remedy provided in this Act but shall be cumulative and
additional to such remedy or remedies.
Aimee Nono Calo [Transportation Law]
Section 22.
Observance of the orders, decisions, and regulations of the
Commission and of the terms and conditions of any
certificate may also be enforced by mandamus or
injunction in appropriate cases, or by action to compel the
specific performance of the orders, decisions, and
regulations so made, or of the duties imposed by law upon
such public service: Provided, that the Commission may
compromise any case that arise under this Act in such
manner and for such amount as it may deem just and
reasonable.
Section 23.
Any public service corporation that shall perform, commit,
or do any act or thing forbidden or prohibited or shall
neglect, fail or omit to do or perform any act or thing
herein to be done or performed, shall be punished by a
fine not exceeding twenty-five thousand pesos, or by
imprisonment not exceeding five years, or both, in the
discretion of the court.
Section 24.
Any person who shall knowingly and willfully perform,
commit, or do, or participate in performing, committing,
or doing, or who shall knowingly and willfully cause,
participate, or join with others in causing any public service
corporation or company to do, perform or commit, or
who shall advice, solicit, persuade, or knowingly and
willfully instruct, direct, or order any officer, agent, or
employee of any public service corporation or company to
perform, commit, or do any act or thing forbidden or
prohibited by this Act, shall be punished by a fine not
exceeding two thousand pesos, or imprisonment not
exceeding two years, or both, in the discretion of the court:
Provided, however, that for operating a private passenger
automobile as a public service without having a certificate
of public convenience for the same the offender shall be
subject to the penalties provided for in section sixty-seven
(j) of Act numbered thirty-nine hundred an ninety-two.
Section 25.
Any person who shall knowingly and willfully neglect, fail,
or omit to do or perform, or who shall knowingly and
Page 63
willfully cause or join or participate with others in causing
any public service corporation or company to neglect, fail
or omit to do or perform, or who shall advise, solicit, or
persuade, or knowingly and willfully instruct, direct, or
order any officer, agent, or employee of any public service
corporation or company to neglect, fail, or omit to do any
act or thing required to be done by this Act, shall be
published by a fine not exceeding two thousand pesos or
by imprisonment not exceeding two years, or both, in the
discretion of the court.
Section 26.
Any person who shall destroy, injure, or interfere with any
apparatus or appliance owned or operated by to in charge
of the Commission or its agents, shall be deemed guilty of
a misdemeanor and upon conviction shall be published by
a fine not exceeding one thousand pesos or imprisonment
not exceeding six months, or both in the discretion of the
court. Any public service permitting the destruction, injury
to, or interference with, any such apparatus or appliances
shall forfeit a sum not exceeding four thousand pesos for
each offense.
Section 27.
This Act shall not have the effect to release or waive any
right of action by the Commission or by any person for
any right, penalty, or forfeiture which may have arisen or
which may arise, under any of the laws of the Philippines,
and any penalty or forfeiture enforceable under this Act
shall not be a bar to or affect a recovery for a right, or
affect or bar any criminal proceedings against any public
service or person or persons operating such public
services, its officers, directors, agents, or employees.
Section 28. Violations of the orders, decisions, and
regulations of the Commission and of the terms and
conditions of any certificate issued by the Commission
shall prescribe after sixty days, and violations of the
provisions of this Act shall prescribe after one hundred
and eighty days.
CHAPTER V
PROCEDURE AND REVIEW
Aimee Nono Calo [Transportation Law]
Section 29.
All hearings and investigations before the Commission
shall be governed by rules adopted by the Commission,
and in the conduct thereof the Commission shall not be
bound by the technical rules of legal evidence: Provided,
That the Public Service Commissioner or associate
commissioners may summarily punish for contempt by a
fine not exceeding two hundred pesos or by imprisonment
not exceeding ten days, or both, any person guilty of
misconduct in the presence of the Commissioner or
associate commissioners or so near the same as to
interrupt the hearing or session or any proceeding before
them, including cases in which a person present at a
hearing, session, or investigation held by either of the
commissioners refuses to be sworn as a witness or to
answer as such when lawfully required to do so. To
enforce the provisions of this section, the Commission
may, if necessary, request the assistance of the municipal
police for the execution of any order made for said
purpose.
(1) While the Commission is authorized to make
rules for the conduct of their business, it could not set at
naught the fundamental rule of all proceedings that only
parties having a real interest will be heard.
(2) A party not affected or prejudiced cannot file
an opposition.
(3) One public service corporation cannot assume
the name and be substituted in the place of another public
service corporation.
(4) A legal representative of the estate of a
deceased applicant may be substituted for the latter. If the
right consists in the prosecution of unfinished proceedings
upon an application for a certificate of public convenience
of the deceased before the Public service Commission, it is
but logical that the legal representative be empowered and
entitled in behalf of the estate to make the right effective
in that proceeding.
(5) One who has been granted a legislative
franchise to operate an ice plant, although not yet an
operator of such public utility, has sufficient interest or
personality either to oppose an established operator's
Page 64
application for an increase in the capacity of his existing
plant, or to ask for a joint hearing of said application and
the grantee's own application for the issuance of a
certificate of public convenience in order to operate under
such franchise.
(6) The fact that a party is the lessee of a line does
not bar him from applying for a certificate of its own in
the same line. Even in cases where the owner of a
certificate has sold it subject to the condition that he
would not apply for a similar service on the same line sold
by him, it has been held that such an argument does not
bar the seller from applying and that the Public Service
Commission, if it finds that there is public need for the
new service applied for, may properly grant the certificate
requested. In other words the primary consideration is a
finding by the Commission that public interest and
convenience require a given service and that parties may
not by agreement deprive the Commission of its power.
(7) A case involving the grant of a Certificate of
Public Convenience to the respondent becomes moot and
academic where the respondent ceases to be a bus
operator, and it should be dismissed.
Section 30.
(a) The Commission may issue subpoenas and subpoenas
duces tecum, for witnesses in any matter or inquiry
pending before the Commission and require the
production of all books, papers, tariffs, contracts,
agreements, and all other documents, which the
Commission may deem necessary in any proceeding. such
process shall be issued under the seal of the Commission,
signed by one of the Commissioners or by the secretary,
and may be served by any person of full age, or by
registered mail. In case of disobedience to such subpoena,
the Commission may invoke the said of the Supreme
Court or of any Court of First Instance of the Philippines
in requiring the attendance and testimony of witness and
the production of books, papers, and documents under the
provisions of this chapter, and the Supreme Court, or any
Court of First Instance of the Philippines within the
jurisdiction of which such inquiry is carried on, may in case
of contumacy of refusal to obey a subpoena, issue to any
public service subject to the provisions of this Act, or to
Aimee Nono Calo [Transportation Law]
any person, an order requiring such public service or other
person to appear before the Commission and produce and
papers if so ordered and give evidence touching the matter;
and any failure to obey such order of the court may be
punished by such court as a contempt thereof.
(b) Any person who shall neglect or refuse to answer any
lawful inquiry or produce the Commission books, paper,
tariffs, contracts, agreements, and documents or other
things called for by said Commission, if in his power to do
so, in obedience to the subpoena or lawful inquiry of the
Commission, upon conviction thereof by a court of
competent jurisdiction, shall be punished by a fine not
exceeding five thousand pesos or by imprisonment not
exceeding one year, or both, in the discretion of the court.
(c) The Commissioner and associate commissioners, the
chiefs of divisions, the attorneys of the Commission, and
the deputy secretaries shall have the power to administer
oaths in all matters under the jurisdiction of the
Commission.
(d) Any person who shall testify falsely or make any false
affidavit or oath before the Commission or before any of
its members shall be guilty of perjury, and upon conviction
thereof in a court of competent jurisdiction, shall be
punished as provided by law .
(e) Witnesses appearing before the Commission in
obedience to subpoena or subpoena duces tecum, shall be
entitled to receive the same fees and mileage allowance as
witnesses attending Courts of First Instance in civil cases.
(f) Any person who shall obstruct the Commission or
either of the Commissioners while engaged in the
discharge of Official duties, or who shall conduct himself
in a rude, disrespectful or disorderly manner before the
Commission or either of the Commissioners, while
engaged in the discharge of official duties, or shall orally or
in writing be disrespectful to, offend or insult either of the
Commissioners on occasion or by reason of the
performance of official duties, upon conviction thereof by
a court of competent jurisdiction, shall be punished for
each offense by a fine not exceeding one thousand pesos,
or by imprisonment not exceeding six months, or both, in
the discretion of the court.
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Section 31. No person shall be excused from testifying or
from producing any book, document, or paper in any
investigation or inquiry by or upon the hearing before the
Commission, when ordered so to do by said Commission,
except when the testimony or evidence required of him
may tend to incriminate him. Without the consent of the
interested party no member or employee of the
Commission shall be compelled or permitted to give
testimony in any civil suit to which the Commission is not
a party, with regard to secrets obtained by him in the
discharge of his official duty.
Section 32. The Commission may, in any investigation or
hearing, by its order in writing cause the deposition of
witnesses residing within or without the Philippines to be
taken in the manner prescribed by the Rules of Court.
Where witnesses reside in places distant from Manila and it
would be inconvenient and expensive for them to appear
personally before the Commission, the Commission may,
by proper order, commission any clerk of the Court of
First Instance, municipal judge or justice of the peace of
the Philippines to take the deposition of witnesses in any
case pending before the Commission. It shall be the duty
of the official so commissioned, to designated promptly a
date or dates for the taking of such deposition, giving
timely notice to the parties, and on said date to proceed to
take the deposition, reducing it to writing. After the
depositions have been taken, the official so commissioned
shall certify to the depositions taken and forward them as
soon as possible to the Commission. It shall be the duty of
the respective parties to furnish stenographers for taking
and transcribing the testimony taken. in case the are no
stenographers available, the testimony shall be taken in
long hand by such person as the clerk of court, the
municipal judge or justice of the peace may designate. The
Commission may also commission a notary public to take
the depositions in the same manner herein provided.
The Commission may also, by proper order, authorize any
of the attorneys of the legal division or division chiefs of
the Commission, if they be lawyers, to hear and investigate
any case filed, with the Commission and in connection
therewith to receive such evidence as may be material
thereto. At the conclusion of the hearing or investigation,
the attorney or division chief so authorized shall submit
the evidence received by him to the Commission to enable
Aimee Nono Calo [Transportation Law]
the latter to render its decision. (As amended by Rep. Act
No. 723.)
Section 33.
Every order made by the Commission shall be served
upon the person or public service affected thereby, within
ten days from the time said order is filed by personal
delivery or by ordinary mail, upon the attorney of record,
or in case there be no attorney of record, upon the party
interested; and in case such certified copy is sent by
registered mail, the registry mail receipt shall be prima facie
evidence of the receipt of such order by the public service
in due course of mail. All orders of the Commission to
continue an existing service or prescribing rates to be
charged shall be immediately operative; all other orders
shall become effective upon the dates specified thereon:
Provided, however, that orders, resolutions or decisions in
converted matters and not referring to the continuance of
an existing service or prescribing rates to be charged shall
not be effective unless otherwise provided by the
Commission, and shall take effect thirty days after notice
to the parties.
Section 34.
Any interested party may request the reconsideration of
any order, ruling, or decision of the Commission by means
of a petition filed not later than fifteen days after the date
of the notice of the order, ruling, or decision in question.
The grounds on which the request for reconsideration is
based shall be clearly and specifically stated in the petition.
Copies of said petition shall be served on all parties
interested in the matter. It shall be the duty of the
Commission to call a hearing to decide the same promptly,
either denying the petition or revoking or modifying the
order, ruling or decision under consideration.
Section 35. The Supreme Court is hereby given
jurisdiction to review any order, ruling, or decision of the
Commission and to modify or set aside such order, ruling,
or decision when it clearly appears that there was no
evidence before the Commission to support reasonably
such order, ruling, or decision, or that the same is contrary
to law , or that it was without the jurisdiction of the
Commission. The evidence presented to the Commission,
together with the record of the proceedings before the
Page 66
Commission, shall be certified by the secretary of the
Commission to the Supreme Court. Any order, ruling, or
decision of the Commission may likewise be reviewed by
the Supreme Court upon a writ of certiorari in proper
cases. The procedure for review , except as herein
provided, shall be prescribed by rules of the Supreme
Court.
Section 36. Any other, ruling, or decision of the may be
reviewed on the application of any person or public service
affected thereby, by certiorari in appropriate cases, or by
petition, to be known as petition for review , which shall
be filed within thirty days from the notification of such
order, ruling or decision, or in case of a petition is filed in
accordance with the preceding section for the
reconsideration of such order, ruling or decision and the
same is denied it shall be filed within fifteen days after
notice of the order denying reconsideration. Said petition
shall be placed on file in the office of the Clerk of the
Supreme Court who shall furnish copies thereof to the
Secretary of the Commission and other parties interested.
Section 37.
The institution of a writ of certiorari or other special
remedies in the Supreme Court shall in no case supersede
or stay any order, ruling or decision of the Commission,
unless the Supreme Court shall so direct, and the appellant
may be required by the Supreme Court to give bond in
such form and of such amount as may be deemed proper.
Section 38.
The chief of the legal division or any other attorneys of the
Commission shall represent the same in all judicial
proceedings. It shall be the duty of the Solicitor General to
represent the Commission in any judicial proceedings if,
for special reason, the Commissioner shall request his
intervention.
There is hereby created under the administrative
supervision of the Secretary of Justice an office to be
known as the Office of the People's Counsel in the Public
Service Commission. The people's Counsel shall have two
assistants and such number of employees as may be
necessary to perform the functions hereinafter specified.
The People's Counsel and his assistants shall be appointed
Aimee Nono Calo [Transportation Law]
by the President of the Philippines with the consent of the
commission on appointments of the Congress of the
Philippines. The employees of the office of the People's
Counsel shall be appointed by the Secretary of Justice
upon recommendation of the People's Counsel.
The People's Counsel and his assistants shall posses the
qualifications of a provincial fiscal. The People's Counsel
shall receive compensation at the rate of seven thousand
two hundred pesos per annum, and the first and second
assistant's People's Counsel, at the rate of six thousand
pesos per annum each.
The People's Counsel, his assistants, and the employees of
the Office of the People's Counsel shall not, during their
continuance in office, intervene directly or indirectly in the
management or control of, or be financially interested
directly or indirectly in any public service as defined in this
Act.
It shall be the duty of the People's Counsel (1) to institute
proceedings before the Commission, in behalf of the
public, for the purpose of fixing just and reasonable rates
or charges to be followed and observed by public services
as herein defined, whenever he has reason to believe that
the existing rates or charges of such public services are
unjust and unreasonable or unjustly discriminatory; (2) to
represent and appear for the public before the
Commission or any court of the Philippines in every case
involving the interest of users of the products of, or
service furnished by any public service under the
jurisdiction of the Commission; (3) to represent and
appear for petitioners appearing before the Commission
for the purpose of complaining in matters of the rates and
services; (4) to investigate the service given by the rates
charged by, and the valuation of the properties of the
public services under the jurisdiction of the Commission,
and such other matters relating to said public services as
affect the interests of users of the products or service
thereof, and to take all the steps necessary for the
protection of the interests of the person or persons or of
the public affected thereby. In connection with such
investigation he is hereby empowered to issue subpoena or
subpoena duces tecum.
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The People's Counsel is authorized to call upon and obtain
such assistance as he may deem necessary in the
performance of his duties from any officer or employee of
any department, bureau, office, agency, or instrumentality
of the government including corporations owned,
controlled or operated by the government. (As amended
by Rep. Act No. 178.)
Section 39.
Any preceding in any court of the Philippines directly
affecting an order of the Commission or to which the
Commission is a party, shall have preference over all other
civil proceedings pending in such court, except election
cases.
CHAPTER VI
FEES
Section 40.
The Commission is authorized and ordered to charge and
collect from any public service or applicant, as the case
may be, the following fees as reimbursement of its
expenses in the authorization, supervision and/or
regulation of public services:
(a) The charge of fifty pesos for the registration of:
(1) Applications under the provisions of Section
sixteen (a), (b), (c), and (d), and twenty (a), (b) (c), (e), (f),
and (h): Provided however, That in case of transportation
services an additional filing fee of five pesos shall be
charged for each additional unit or vehicle in excess of five
units or vehicles applied for: And provided, finally, That
no filing fee shall be collected for the reduction of rates if
the same does not alter or modify in any way the basic
rates of the schedule.
(2) Applications for the approval or modification
of maximum rates under Section fourteen.
(b) Thirty pesos shall be collected from any operator of
land transportation for the registration of:
(1) Applications under Section seventeen (f).
Aimee Nono Calo [Transportation Law]
(2) Applications for the extension of time covering
a period of thirty days for the registration of motor
vehicles previously authorized by the Commission.
(c) The charge of thirty pesos for the filing of other
applications by any public service operator not specifically
provided for in the preceding paragraphs of this section
other than motions of a temporary or incidental character:
Provided, however, That fifteen pesos only shall be
collected for each certificate of public convenience or
certificate of public convenience and necessity in diploma
form issued to a public service operator.
(d) For annual reimbursement of the expenses incurred by
the Commission for the supervision and regulation of the
operations of motor vehicle services:
(1) For each automobile, ten pesos.
(2) For each motor vehicle, truck, or trailer of less
than two tons gross transportation capacity, ten pesos.
(3) For each motor vehicle, truck, or trailer of two
tons or more, but less than three tons gross transportation
capacity, twenty pesos.
(4) For each motor vehicle, truck, or trailer of
three tons or more but less than four tons gross
transportation capacity, thirty pesos.
(5) Motor vehicles, trucks, trailers or buses of four
tons or more gross capacity shall pay at the rate of ten
pesos per ton gross. The fees provided in paragraphs (d)
and (e) hereof shall be paid on or before September
thirtieth of each year with a penalty of fifty per centum in
case of delinquency: Provided, further, That if the fees or
any balance thereof are not paid within sixty days from the
said date, the penalty shall be increased by one per centum
for every month thereafter of delinquency: Provided,
however, That motor vehicles registered in the Motor
Vehicles Office after September thirtieth shall be exempt
from payment for said year.
(e) For annual reimbursement of the expenses
incurred by the Commission in the supervision of other
public services and/or in the regulation or fixing of their
rates, twenty centavos for each one hundred pesos or
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fraction thereof, of the capital stock subscribed or paid, or
if no shares have been issued, of the capital invested, or of
the property and equipment, whichever is higher.
(f) For the issue or increase of capital stock,
twenty centavos for each one hundred pesos or fraction
thereof, of the increased capital.
(g) For each permit authorizing the increase of
equipment, the installation of new units or authorizing the
increase of capacity. or the extension of means or general
extension in the services, twenty centavos for each one
hundred pesos or fraction of the additional capital
necessary to carry out the permit.
(h) For the inspection or certification made in the
meter laboratory of the Commission or each apparatus or
meter used by any public service, four pesos, and for
examination made outside the meter laboratory of the
Commission, the additional expenses as may be incurred in
making the examination shall also be paid.
(i) For certification of copies of official documents
in the files of the Commission, fifty centavos plus fifty
centavos for each page or folio so certified.
This section shall not be applicable to the Republic of the
Philippines, nor to its instrumentalities.
Aside from the appropriations for the Commission under
the annual General Appropriation Act, any unexpended
balance of the fees collected by the Commission under this
section shall be constituted receipts automatically
appropriated each year, and together with any surplus in
the standardizing meter laboratory revolving fund under
Commonwealth Act Numbered Three hundred forty-nine,
shall be disbursed by the Public Service Commissioner in
accordance with special budgets to be approved by the
Department of Justice, the Budget Commission and the
Office of the President of the Philippines for additional
needed personal services, maintenance and operating
expenses, acquisition of urgently needed vehicles, furniture
and equipment, maintenance of an adequate reference
library, acquisition of a lot and building for the
Commission, and other expenses necessary for efficient
administration and effective supervision and regulation of
Aimee Nono Calo [Transportation Law]
public services. (As amended by Com. Act No. 454 and
RA No. 3792, approved June 22, 1963.)
CHAPTER VII
GENERAL AND TRANSITORY PROVISIONS
Section 41.
A substantial compliance with the requirements of this Act
shall be sufficient to give effect to all the rules, orders, acts
and regulations of the Commission and they shall not be
declared inoperative, illegal, or void for any omission of a
technical nature in respect thereto.
Section 42.
Copies of all official documents and orders filled or
deposited in the office of the Commission, certified by
either of the commissioners, or by the secretary to be true
copy of the original, under the seal of the Commission
shall be evidence in like manner as the originals in all
courts of the Philippines.
Section 43.
The Commission created under this Act shall succeed the
Commission created under Act numbered thirty-one
hundred and eight in the dispatch, hearing, and
determination of all pending matters before the latter; and
shall take charge of its archives, books, furniture,
equipment, and other properties of whatsoever nature.
Section 44.
In addition to the sum appropriated for the former
commission under Act numbered forty-one hundred and
thirty-two, the General Appropriation Act for nineteen
hundred and thirty-six, the sum of six thousand seven
hundred and sixty-eight pesos and thirty-four centavos is
hereby appropriated out of any funds in the Philippines
Treasury not otherwise; and in addition to the sum
appropriated under Act numbered thirty-eight, the General
Appropriation Act for nineteen hundred and thirty-seven,
the sum of twenty-three thousand six hundred and ten
pesos, or so much thereof as may be necessary, is hereby
appropriated, out of any funds in the Philippines Treasury
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not otherwise appropriated, for carrying out the purposes Scope of Act. - The provisions of this Act shall control, as
of this Act. far as they apply, the registration and operation of motor
vehicles and the licensing of owners, dealers, conductors,
Section 45. drivers, and similar matters.

If, any reason, any section, subsection, sentence, clauses or ARTICLE II

terms of this Act is held to the unconstitutional such
decision shall not affect the validity of the other provisions Definitions
of this Act.
Section 3.
Section 46.
Words and phrases defined. - As used in this Act:
Act numbered thirty-two hundred and forty-seven and Act
numbered thirty-five hundred and eighteen shall continue (a) "Motor Vehicle" shall mean any vehicle propelled by
in force and effect; but all provisions of Act numbered any power other than muscular power using the public
thirty-one hundred and eight and amendments thereof, highways, but excepting road rollers, trolley cars, street-
and all other acts or parts or acts inconsistent with the sweepers, sprinklers, lawn mowers, bulldozers, graders,
provisions of this Act are hereby repealed. fork-lifts, amphibian trucks, and cranes if not used on
public highways, vehicles which run only on rails or tracks,
Section 47. and tractors, trailers and traction engines of all kinds used
exclusively for agricultural purposes. Trailers having any
This Act shall take effect upon its approval. number of wheels, when propelled or intended to be
propelled by attachment to a motor vehicle, shall be
Approved: November 7, 1936 classified as separate motor vehicle with no power rating.
7) Land Transportation and Traffic Code (RA (b) "Passenger automobiles" shall mean all pneumatic-tire
4136) vehicles of types similar to those usually known under the
following terms: touring car, command car, speedster,
AN ACT TO COMPILE THE LAWS RELATIVE
sports car, roadster, jeep, cycle, car (except motor wheel
TO LAND TRANSPORTATION AND TRAFFIC
and similar small outfits which are classified with
RULES, TO CREATE A LAND
motorcycles), coupe, landaulet, closed car, limousine,
TRANSPORTATION COMMISSION AND FOR
cabriolet, and sedan. Motor vehicles with changed or
OTHER PURPOSES
rebuilt bodies, such as jeepneys, jitneys, or station wagons,
CHAPTER I using a chassis of the usual pneumatic-tire passenger
automobile type, shall also be classified as passenger
PRELIMINARY PROVISIONS ARTICLE automobile, if their net allowable carrying capacity, as
determined by the Commissioner of Land Transportation,
ARTICLE I does not exceed nine passengers and if they are not used
primarily for carrying freight or merchandise. The
Title and Scope of Act distinction between "passenger truck" and "passenger
automobile" shall be that of common usage: Provided,
Section 1. That a motor vehicle registered for more than nine
passengers shall be classified as "truck": And Provided,
Title of Act. - This Act shall be known as the "Land
further, That a "truck with seating compartments at the
Transportation and Traffic Code."
back not used for hire shall be registered under special "S"
classifications. In case of dispute, the Commissioner of
Section 2.

Aimee Nono Calo [Transportation Law] Page 70

Land Transportation shall determine the classification to
which any special type of motor vehicle belongs.
(c) "Articulated vehicle" shall mean any motor vehicle with
a trailer having no front axle and so attached that part of
the trailer rests upon motor vehicle and a substantial part
of the weight of the trailer and of its load is borne by the
motor vehicle. Such a trailer shall be called as "semi-
trailer."
(d) "Driver" shall mean every and any licensed operator of
a motor vehicle.
(e) "Professional driver" shall mean every and any driver
hired or paid for driving or operating a motor vehicle,
whether for private use or for hire to the public. Any
person driving his own motor vehicle for hire is a
professional driver.
(f) "Owner" shall mean the actual legal owner of a motor
vehicle, in whose name such vehicle is duly registered with
the Land Transportation Commission.
The "owner" of a government-owned motor vehicle is the
head of the office or the chief of the Bureau to which the
said motor vehicle belongs.
(g) "Dealer" shall mean every person, association,
partnership, or corporation making, manufacturing,
constructing, assembling, remodeling, rebuilding, or setting
up motor vehicles; and every such entity acting as agent for
the sale of one or more makes, styles, or kinds of motor
vehicles, dealing in motor vehicles, keeping the same in
stock or selling same or handling with a view to trading
same.
(h) "Garage" shall mean any building in which two or more
motor vehicles, either with or without drivers, are kept
ready for hire to the public, but shall not include street
stands, public service stations, or other public places
designated by proper authority as parking spaces for motor
vehicles for hire while awaiting or soliciting business.
(i) "Gross weight" shall mean the measured weight of a
motor vehicle plus the maximum allowable carrying
capacity in merchandise, freight and/or passenger, as
determined by the Commissioner of Land Transportation.
Aimee Nono Calo [Transportation Law]
(j) "Highways" shall mean every public thoroughfare,
public boulevard, driveway, avenue, park, alley and
callejon, but shall not include roadway upon grounds
owned by private persons, colleges, universities, or other
similar institutions.
(k) "The Commissioner of Land Transportation or his
deputies" shall mean the actual or acting chief of the Land
Transportation Commission or such representatives,
deputies, or assistants as he may, with the approval of the
Secretary of Public Works and Communications, appoint
or designate in writing for the purpose contemplated by
this Act.
(l) "Parking or parked", for the purposes of this Act, shall
mean that a motor vehicle is "parked" or "parking" if it has
been brought to a stop on the shoulder or proper edge of a
highway, and remains inactive in that place or close thereto
for an appreciable period of time. A motor vehicle which
properly stops merely to discharge a passenger or to take
in a waiting passenger, or to load or unload a small
quantity of freight with reasonable dispatch shall not be
considered as "parked", if the motor vehicle again moves
away without delay.
(m) "Tourist" shall mean a foreigner who travels from
place to place for pleasure or culture.
ARTICLE III
Administration of Act
Section 4.
Creation of the Commission.
(a) There is created under the Department of Public Works
and Communications an office which shall be designated
and known as the Land Transportation Commission,
composed of one Commissioner and one Deputy
Commissioner, who shall be vested with the powers and
duties hereafter specified. Whenever the word
"Commission" is used in this Act, it shall be deemed to
mean the Land Transportation Commission, and whenever
the word "Commissioner" is used in this Act, it shall be
taken to mean the Commissioner or Deputy
Commissioner. The Commissioner and the Deputy
Page 71
Commissioner shall be natural-born citizens and residents
of the Philippines, and they shall be appointed by the
President of the Philippines, with the consent of the
Commission on Appointments of the Congress of the
Philippines: Provided, however, That the present
Administrator, Assistant Administrator and the personnel
of the Motor Vehicles Office shall continue in office
without the necessity of reappointment.
(b) The Commissioner and Deputy Commissioner shall
hold office until removed in accordance with the
provisions of the Revised Administrative Code.
(c) The Commissioner shall receive an annual
compensation of twelve thousand pesos and the Deputy
Commissioner, an annual compensation of ten thousand
four hundred pesos. The Commissioner shall be assisted
by one head executive assistant (MV regulation adviser or
chief), one administrative officer, one registration
regulation chief, one inspection, examination and licensing
regulation chief, one law and traffic enforcement
regulation chief, one provincial regulation chief, one utility
and property regulation chief, one accounting officer, one
internal chief auditor, and one personnel officer, who shall
receive an annual compensation of nine thousand pesos
each; eight land transportation regional directors who shall
receive an annual compensation of eight thousand four
hundred pesos each and eight land transportation assistant
regional directors, who shall receive an annual
compensation of seven thousand pesos each and ten
assistant regulation chiefs, who shall receive an annual
compensation of seven thousand pesos each.
(d) The Commission shall have its offices in Quezon City
where the present Motor Vehicle Office is located, and
shall establish a regional branch office each in Tuguegarao
(Cagayan), Baguio City, Pasig (Rizal), Lipa City, San
Fernando (La Union), Naga City, Cebu City, Iloilo City,
Cagayan de Oro City, and Davao City, to be headed by a
regional director who will have immediate administration,
supervision and control over activities and administration
of the Commission in the respective regions.
The Commissioner shall be responsible for the
administration of this Act and shall have, in connection
Aimee Nono Calo [Transportation Law]
therewith, the following powers and duties, in addition to
those mentioned elsewhere in this Act:
(1) With the approval of the Secretary of Public
Works and Communications, to issue rules and regulations
not in conflict with the provisions of this Act, prescribing
the procedure for the examination, licensing and bonding
of drivers; the registration and re-registration of motor
vehicles, transfer of ownership, change of status; the
replacement of lost certificates, licenses, badges, permits or
number plates; and to prescribe the minimum standards
and specifications including allowable gross weight,
allowable length, width and height or motor vehicles,
distribution of loads, allowable loads on tires, change of
tire sizes, body design or carrying capacity subsequent to
registration and all other special cases which may arise for
which no specific provision is otherwise made in this Act.
(2) To compile and arrange all applications,
certificates, permits, licenses, and to enter, note and record
thereon transfers, notifications, suspensions, revocations,
or judgments of conviction rendered by competent courts
concerning violations of this Act, with the end in view of
preserving and making easily available such documents and
records to public officers and private persons properly and
legitimately interested therein.
(3) To give public notice of the certificates,
permits, licenses and badges issued, suspended or revoked
and/or motor vehicles transferred and/or drivers bonded
under the provisions of this Act.
(4) The Commissioner of Land Transportation,
with the approval of the Secretary of Public Works and
Communications, may designate as his deputy and agent
any employee of the Land Transportation Commission, or
such other government employees as he may deem
expedient to assist in the carrying out the provisions of this
Act.
(5) The Commissioner of Land Transportation
and his deputies are hereby authorized to make arrest for
violations of the provisions of this Act in so far as motor
vehicles are concerned; to issue subpoena and subpoena
duces tecum to compel the appearance of motor vehicle
operators and divers and/or other persons or conductors;
Page 72
and to use all reasonable means within their powers to
secure enforcement of the provisions of this Act.
(6) The Commissioner of Land Transportation or
his deputies may at any time examine and inspect any
motor vehicle to determine whether such motor vehicle is
registered, or is unsightly, unsafe, overloaded, improperly
marked or equipped, or otherwise unfit to be operated
because of possible excessive damage to highways, bridges
and/or culverts.
(7) The Philippine Constabulary and the city and
municipal police forces are hereby given the authority and
the primary responsibility and duty to prevent violations of
this Act, and to carry out the police provisions hereof
within their respective jurisdiction: Provided, That all
apprehensions made shall be submitted for final
disposition to the Commissioner and his deputies within
twenty-four hours from the date of apprehension.
(8) All cases involving violations of this Act shall
be endorsed immediately by the apprehending officer to
the Land Transportation Commission. Where such
violations necessitate immediate action, the same shall be
endorsed to the traffic court, city or municipal court for
summary investigation, hearing and disposition, but in all
such cases, appropriate notices of the apprehensions and
the dispositions thereof shall be given to the
Commissioner of Land Transportation by the law-
enforcement agency and the court concerned.
Notation of all such dispositions shall be entered in the
records, and copy shall be mailed to the owner and to the
driver concerned.
CHAPTER II
REGISTRATION OF MOTOR VEHICLES
ARTICLE I
Aimee Nono Calo [Transportation Law]
Duty to Register, Reports, Applications,
Classifications
Section 5.
All motor vehicles and other vehicles must be registered.
(a) No motor vehicle shall be used or operated on or upon
any public highway of the Philippines unless the same is
properly registered for the current year in accordance with
the provisions of this Act.
(b) Any registration of motor vehicles not renewed on or
before the date fixed for different classifications, as
provided hereunder shall become delinquent and invalid:
1. For hire motor vehicles - on or before the last
working day of February.
2. Privately-owned motor vehicles - from March
one to the last working day of May.
3. All other motor vehicles - from June one to the
last working day of June; except when the plates of such
motor vehicles are returned to the Commission in Quezon
City or to the Office of the Motor Vehicles Registrar in the
provincial or city agency of the Commission on or before
the last working day of December of the year of issue.
(c) Dealer's reports - The Commissioner of Land
Transportation shall require dealers to furnish him with
such information and reports concerning the sale,
importation, manufacture, number of stocks, transfer or
other transactions affecting motor vehicles as may be
necessary for the effective enforcement of the provisions
of this Act.
(d) Change of motor number prohibited. - No repair or
change in the motor vehicle involving the exchange,
elimination, effacing, or replacing of the original or
registered serial or motor number as stamped or imprinted,
shall be allowed, and any motor vehicle with a trace of
having its motor number altered or tampered with shall be
refused registration or re-registration, unless such is
satisfactorily explained and approved by the
Commissioner.
Page 73
(e) Encumbrances of motor vehicles. - Mortgages,
attachments, and other encumbrances of motor vehicles,
in order to be valid, must be recorded in the Land
Transportation Commission and must be properly
recorded on the face of all outstanding copies of the
certificates of registration of the vehicle concerned.
Cancellation or foreclosure of such mortgages,
attachments, and other encumbrances shall likewise be
recorded, and in the absence of such cancellation, no
certificate of registration shall be issued without the
corresponding notation of mortgage, attachment and/or
other encumbrances.
Records of encumbrances of motor vehicles shall be kept
by the Land Transportation Commission in chronological
sequence and shall contain, among other things, the time,
date and number of the entry in a "Book of Motor
Vehicles" referring to the creation, cancellation or
foreclosure of the aforesaid mortgages, attachments or to
other encumbrances.
The Land Transportation Commission shall collect a fee of
five pesos for every annotation of a mortgage, attachment
and/or other encumbrances, or cancellation thereof.
Section 6.
Application and payments for registration. - Applications
and payments for registration shall be made either
personally or by registered mail, and the date of the
cancellation of the postage stamps of envelopes containing
money order or check shall be taken as the date of the
application and/or payment for registration: Provided,
That the application is properly prepared and the payment
for registration is sufficient as required by law .
Section 7.
Registration Classification. - Every motor vehicle shall be
registered under one of the following described
classifications:
(a) private passenger automobiles; (b) private trucks; and
(c) private motorcycles, scooters, or motor wheel
attachments. Motor vehicles registered under these
classifications shall not be used for hire under any
Aimee Nono Calo [Transportation Law]
circumstances and shall not be used to solicit, accept, or be
used to transport passengers or freight for pay.
Laborers necessary to handle freight on board private
trucks may ride on such trucks: Provided, That seats shall
not be installed in the rear compartment thereof and that
only such number of laborers, not exceeding ten, as may
be needed to handle the kind of freight carried, shall ride
on the truck: Provided, further, That the combined weight
of cargo and passengers does not exceed the registered net
capacity of the truck.
For the purpose of this section, a vehicle habitually used to
carry freight not belonging to the registered owner thereof,
or passengers not related by consanguinity or affinity
within the fourth civil degree to such owner, shall be
conclusively presumed to be "for hire."
No person shall be allowed to register as private truck any
truck not actually and reasonably necessary to carry out his
duly licensed business or legitimate occupation or industry
regularly paying taxes.
(d) Public utility automobiles; (e) public utility trucks; (f)
taxis and auto-calesas; (g) garage automobiles; (h) garage
trucks; (i) hire trucks: and (j) trucks owned by contractors
and customs brokers and customs agents. Application for
registration under these classifications shall be
accompanied by a certificate of public convenience or a
special permit issued by the Public Service Commission,
and motor vehicles registered under these classifications
shall be subject to the Public Service Law , rules and
regulations, as well as the provisions of this Act.
(k) Undertakes
(l) Dealers - Registrations under this classification are
intended to cover generally and successively all the motor
vehicles imported or handled by dealers for sale. Motor
vehicles registered under the dealer's classification shall,
under no circumstances, be employed to carry passengers
or freight in the dealer's business, or for hire. Such vehicles
shall be operated under this classification only for the
purpose of transporting the vehicle itself from the pier or
factory to the warehouse or sales room or for delivery to a
prospective purchaser or for test or demonstration.
Page 74
(m) Government automobiles; (n) government trucks; and
(o) government motorcycles. Motor vehicles owned by the
Government of the Philippines or any of its political
subdivisions shall be registered under these classifications.
Motor vehicles owned by government corporations, by
government employees or by foreign governments shall
not be registered under this classification.
(p) Tourists bringing their own motor vehicles to the
Philippines may, without registering such motor vehicles,
use the same during but not after ninety days of their
sojourn: Provided, That the motor vehicle displays the
number plates for the current year of some other country
or state, and said number plates as well as the name and
address (permanent and temporary) of the owner thereof
are registered in the Land Transportation Commission
prior to the operation of the motor vehicle.
If such tourist remain in the Philippines longer than ninety
days, the motor vehicle shall not be operated unless
registered in accordance with this Act and the
corresponding registration fees paid.
(q) Special. The Commissioner of Land Transportation
may, in his discretion, allow the registration under this
classification of motor vehicles which do not conform to
the foregoing described regular classification.
ARTICLE II
Registration Fees
Section 8.
Schedule of registration fees. - Except as otherwise
specifically provided in this Act, each application for
renewal of registration of motor vehicles shall be
accompanied by an annual registration fee in accordance
with the following schedule:
(a) Private automobiles with pneumatic rubber tires, an
amount based on their respective shipping weight or
factory weight as indicated in the following schedule:
1,000 kilos or less P75.00
1,000 to 1,500 kilos 100.00
Aimee Nono Calo [Transportation Law]
1,501 to 2,000 kilos 135.00
2,001 kilos and above 180.00
The factory or shipping weight of a private automobile
shall be obtained from the Red Book edited by the
National Market Report, Inc., of the United States of
America: Provided, further, That in the case of
automobiles with altered, changed or rebuilt bodies, the
weight as obtained: by actual weighing shall be considered
the vehicles weight: Provided, furthermore, That the
increase registration fees herein prescribed shall not apply
to jeeps and jeepneys for private use or for hire and the
fees hereof shall be those prescribed for them before the
approval of this Act.
The registered passenger capacity of passenger
automobiles operated for hire or for private use shall be
determined as follows:
1. For each adult passenger, a horizontal
rectangular area, including seat and feet space, not less
than thirty-five centimeters wide and sixty centimeters
long, except in the front seat, which shall allow an area
fifty centimeters wide for the operator.
2. For each half passenger, a horizontal
rectangular area, including seat and feet spaces, not less
that seventeen and a half centimeters wide by sixty
centimeters long, provided, that each continuous row of
seats shall not be allowed to have more that one-half
passenger.
(b) Private motor trucks, passenger buses and trailers with
pneumatic rubber tires, the sum of five pesos for every
hundred kilograms of maximum allowable gross weight or
fraction thereof.
(c) Private motor trucks, passenger buses and trailers with
solid rubber tires or with part-solid and partpneumatic
rubber tires, the sum of seven pesos for every hundred
kilograms of maximum allowable gross weight or fraction
thereof.
(d) Private motorcycles and scooters of two or three
wheels and bicycles with motor attachments, the sum of
thirty pesos.
Page 75
(e) The fee for registration of motor vehicles for hire shall
be sixty percent more than the fee prescribed for private
motor vehicles of the same category.
(f) The fee for registration of diesel-consuming vehicles
shall be fifty percent more than that of vehicles using
motor fuel other than diesel oil. The fee for registration of
motor vehicles for hire shall be sixty percent more than the
fees prescribed for private motor vehicles.
(g) No regular registration fees shall be charged for the
general registration of motor vehicles contemplated under
the dealer's classification: Provided, That the
Commissioner of Land Transportation shall provide
appropriate dealer's number plates corresponding to the
classification of vehicles hereinbelow described, and
registration fee for every set of such dealer's number plates
shall be in accordance with the following schedule of rates;
Two hundred pesos for each truck or trailer;
One hundred pesos for each passenger automobile; and
Twenty pesos for each motorcycle and the like.
(h) Registration under the "Government Motor Vehicle"
classification shall be free of charge, upon request of the
chief of bureau or office concerned.
(i) Motor vehicles not intended to be operated or used
upon any public highway, or which are operated on
highways not constructed or maintained by the
Government, or are intended not to be used or operated at
all, shall be exempt from payment of the registration fees
provided in this Act, but shall each pay an annual
recording and service fee of fifteen pesos: Provided,
however, That no refund, credit for, or reimbursement of
registration fees or part thereof shall be made to any owner
on account of the discontinuance of the use or operation
of a motor vehicle subsequent to the payment of such
registration fees: Provided, further, That in the event
motor vehicles exempted under this section shall be found
operated on any public highways, the regular registration
fees and surcharges shall be collected in addition to
whatever penalties may be imposed for violation of this
Act. The Commissioner of Land Transportation shall
provide distinctive number plates for vehicles exempted
Aimee Nono Calo [Transportation Law]
from payment of regular registration fees, and the owner
of the vehicles concerned shall pay four pesos for each set
of such number plates.
(j) The maximum allowable gross weight of a motor truck,
passenger bus, or trailer, upon which to compute the
registration fee thereof, shall be determined by the
Commissioner of Land Transportation. He shall, from
time to time as the need of the service may require,
prepare, subject to the approval of the Secretary of Public
Works and Communications, suitable tables of maximum
allowable loads per wheel for different sizes kinds of tires.
(k) The registration fees provided in this Act for trucks
may be payable in two equal installment, the first to be
paid on or before the last working day of February if for
hire, and in March if private; and the second to be paid on
or before the last working day of August: Provided, That
the fifty per cent penalty shall apply only to the unpaid
balance of the remaining period of delinquency.
Section 9.
Permissible weights and dimensions of vehicles in
highways traffic.
(a) The maximum gross weight and measurement of motor
vehicles, unladen or with load, permissible on public
highways shall be as specified hereunder, subject to such
regulations as the Commissioner with the approval of the
Secretary of Public Works and Communications, may
promulgate, from time to time, as the conditions of the
public highways may warrant and the needs of the service
may require.
Permissible maximum weights:
1. Per most heavily loaded wheel three thousand six
hundred kilograms;
2. Per most heavily loaded axle eight thousand kilograms;
3. Per most heavily loaded axle group (the two axles of the
group being at least one meter and less than two meters
apart) fourteen thousand five hundred kilograms.
Page 76
An axle weight shall be the total weight transmitted to the
road by all the wheels the centers of which can be included
between the parallel transverse vertical planes one meter
apart extending across the full width of the vehicles.
No provincial, city or municipal authority shall enact or
enforce any ordinance or resolution regulating or
prescribing the maximum gross weight of any motor
vehicle.
(b) No motor vehicle operating as a single unit shall exceed
the following dimensions:
Overall width two and five-tenths meters
Overall height four meters
Overall length:
Freight vehicles with two axles ten meters
Passenger vehicles with two axles eleven meters
Vehicles with three or more axles fourteen meters
(c) No motor vehicle and/or trailer combination shall
exceed eighteen meters in overall projected length,
including any load carried on such vehicle and trailer.
(d) No articulated vehicles shall be allowed to draw or pull
a trailer and no vehicle already drawing a trailer shall draw
another.
Section 10.
Special permits, fees for. - The Commissioner with the
approval of the Secretary of Public Works and
Communications, shall issue regulations and schedules of
additional fees under which special permits may be issued
in the discretion of the Commissioner or his deputies for
each of the following special cases, without which special
permit no vehicles shall be operated on the public
highways:
(a) To operate a motor vehicle or trailer outfit with wheel,
axle, or axle group loads in excess of the limits fixed in
subsection (a) of Section nine hereof or in any regulation
issued by the Commissioner.
Aimee Nono Calo [Transportation Law]
(b) To operate a motor vehicle the size of which exceeds
the limit of permissible dimensions specified in paragraph
(b) of Section nine hereof.
(c) To operate a motor vehicle with any part of the load
extending beyond the projected width of the vehicle.
(d) To pull two trailers behind a motor vehicle.
(e) For any other special authority relating to the use of
vehicles, not otherwise specifically provided herein.
Section 11.
Additional fees. - In addition to the fees elsewhere
provided in this Act, for each change of registration, from
private to for hire or vice-versa; revision of gross weight
rating, change of tire size; transfer of ownership;
replacement of a lost registration certificate, number plate,
driver's license or permit; badge; preparation of affidavit or
certified copy of records, or for any similar circumstances
requiring the issue, revision, or reissue of a certificate of
registration, driver's license, badge, permit, or other
document, a fee of two pesos shall be collected.
The replacement of a lost or utterly spoiled certificate,
number plate, license, badge or permit shall render the
original invalid.
In case of request in writing for certification of data or
facts involving two or more vehicles, a fee of five pesos a
page or part thereof shall be collected for each
certification.
Section 12.
Fee for original registration for part of year. - If any
application for the original registration is made during the
first quarter of a calendar year, the total annual fee for the
year shall be paid, if made during the second quarter,
three-fourths of the annual fee for that year shall be paid, if
made during the third quarter, one half of the annual fee
shall be paid, and if made during the fourth quarter, one-
fourth of the annual fee shall be paid.
Page 77
Nothing in this section shall be construed as allowing
quarterly renewals of registrations in order to avoid
payment of fees in advance for the entire year.
Section 13.
Payment of taxes upon registration. - No original
registration of motor vehicles subject to payment of taxes,
customs duties or other charges shall be accepted unless
proof of payment of the taxes due thereon has been
presented to the Commission.
ARTICLE III
Registration Certificates, Records, Number Plates
Section 14.
Issuance of certificates of registration. - A properly
numbered certificate of registration shall be issued for each
separate motor vehicle after due inspection and payment
of corresponding registration fees.
Section 15.
Use and authority of certificate of registration.
(a) The said certificate shall be preserved and carried in the
car by the owner as evidence of the registration of the
motor vehicle described therein, and shall be presented
with subsequent applications for re-registration, transfer of
ownership, or recording of encumbrances: Provided, That
in lieu of the certificate of registration a true copy or
photostat thereof may be carried in the motor vehicle.
(b) The certificate of registration issued under the
provisions of this Act for any motor vehicle shall, while
the same is valid and effective and has not been suspended
or revoked, be the authority for the operation of such
motor vehicle.
(c) No motor vehicle shall be operated on the public
highways in a manner which would place it under a
classification requiring the payment of a larger registration
fee than that stated in the certificate of registration.
Section 16.
Aimee Nono Calo [Transportation Law]
Suspension of registration certificate. - If on inspection, as
provided in paragraph (6) of Section four hereof, any
motor vehicle is found to be unsightly, unsafe, overloaded,
improperly marked or equipped, or otherwise unfit to be
operated, or capable of causing excessive damage to the
highways, or not conforming to minimum standards and
specifications, the Commissioner may refuse to register the
said motor vehicle, or if already registered, may require the
number plates thereof to be surrendered to him, and upon
seventy-two hours notice to the owner of the motor
vehicle, suspend such registration until the defects of the
vehicle are corrected and/or the minimum standards and
specifications fully complied with.
Whenever it shall appear from the records of the
Commission that during any twelve-month period more
than three warnings for violations of this Act have been
given to the owner of a motor vehicle, or that the said
owner has been convicted by a competent court more than
once for violation of such laws, the Commissioner may, in
his discretion, suspend the certificate of registration for a
period not exceeding ninety days and, thereupon, shall
require the immediate surrender of the number plates.
Whenever a motor vehicle is found to be underweight the
owner thereof shall pay the difference in the registration
fees corresponding to the shortage in weight plus a fifty
per cent surcharge, and until such payment is made, the
certificate of registration of the motor vehicle concerned
shall be suspended by the Commissioner.
After two such suspension, re-registration of the vehicle
concerned for one year may be denied.
The Commissioner shall notify the owner of the motor
vehicle of any action taken by him under this section.
Section 17.
Number plates, preparation, preparation and issuance of .
(a) The Commissioner shall cause number plates to be
prepared and issued to owners of motor vehicles and
trailers registered under this Act, charging a fee of four
pesos for each pair including the numerals indicating the
year of registry: Provided, however, That in case no
number plates are available, the Commissioner or his
Page 78
deputies may issue, without charge, a written permit
temporarily authorizing the operation of any motor
vehicles with other means of identification: Provided,
further, That all motor vehicles exempted from payment
of registration fees, motor vehicles for hire, and privately-
owned motor vehicles shall bear plates so designed and
painted with different colors to distinguish one class from
another: Provided, furthermore, That the plates of motor
vehicles exempted from payment of registration fees shall
be permanently assigned to such motor vehicles during
their entire lifetime while exempted from payment of the
fees: And, provided, finally, That the owner thereof shall
return such plates to the Land Transportation Commission
within a period of seven working days after such owner
has lost his exemption privilege or has transferred the
vehicle to a non-exempt owner.
(b) In case the design of the number plate is such that the
numerals indicating the year of registry are on a detachable
tag, the Commissioner or his deputies may, in their
discretion, issue the said tag only for subsequent re-
registration charging a fee of one peso for each tag issued.
Section 18.
Use of number plates. - At all times, every motor vehicle
shall display in conspicuous places, one in front and one in
the rear thereof, the said number plates.
The number plates shall be kept clean and cared for, and
shall be firmly affixed to the motor vehicle in such a
manner as will make it entirely visible and always legible.
Except in the case of dealer's number plates which may be
used successively on various motor vehicles in stock, no
person shall transfer number plates from motor vehicle to
another.
No dealer's number plate shall be used on any motor
vehicle after said vehicle has been sold and delivered to a
purchaser, and no dealer shall allow such dealer's number
plates to be used on any motor vehicle after its sale and
delivery to a purchaser.
CHAPTER III
Aimee Nono Calo [Transportation Law]
OPERATION OF MOTOR VEHICLE
ARTICLE I
License to Drive Motor Vehicles
Section 19.
Duty to procure license. - Except as otherwise specifically
provided in this Act, no person shall operate any motor
vehicle without first procuring a license to drive a motor
vehicle for the current year, nor while such license is
delinquent, invalid, suspended or revoked.
The license shall be carried by the driver at all times when
operating a motor vehicle, and shall be shown and/or
surrendered for cause and upon demand to any person
with authority under this Act to confiscate the same.
Section 20.
License for enlisted men operating Government motor
vehicles. - Enlisted men operating a motor vehicle owned
by the Government of the Philippines shall be licensed in
accordance with the provisions of this Act, but no license
or delinquency fees shall be collected therefrom. All
licenses so issued shall bear the words "For Government
Vehicles Only" plainly marked or stamped in red ink
across the face thereof.
A license so marked or stamped shall authorize the holder
thereof to operate a private-owned motor vehicle.
Section 21.
Operation of motor vehicles by tourists. - Bona fide tourist
and similar transients who are duly licensed to operate
motor vehicles in their respective countries may be allowed
to operate motor vehicles during but not after ninety days
of their sojourn in the Philippines.
If any accident involving such tourist or transient occurs,
which upon investigation by the Commissioner or his
deputies indicates that the said tourist or transient is
incompetent to operate motor vehicles, the Commissioner
shall immediately inform the said tourist or transient in
writing that he shall no longer be permitted to operate a
motor vehicle.
Page 79
After ninety days, any tourist or transient desiring to
operate motor vehicles shall pay fees and obtain and carry
a license as hereinafter provided.
Section 22.
Driver's license, fees, examination. - Every person who
desires personally to operate any motor vehicle shall file an
application to the Commissioner or his deputies for a
license to drive motor vehicles: Provided, however, That
no person shall be issued a professional driver's license
who is suffering from highly contagious diseases, such as,
advanced tuberculosis, gonorrhea, syphilis, and the like.
Each such application except in the case of enlisted men
operating government-owned vehicles, shall be
accompanied by a fee of five pesos, and shall contain such
information respecting the applicant and his ability to
operate motor vehicles, as may be required by the
Commission.
The Commissioner or his deputies shall also ascertain that
the applicant's sight and hearing are normal, and may in
their discretion, require a certificate to that effect, signed
by a reputable physician.
An examination or demonstration to show any applicant's
ability to operate motor vehicles may also be required in
the discretion of the Commissioner or his deputies.
Section 23.
Issuance of driver's license. - If, after such examination,
the Commissioner or his deputy believes that the applicant
possesses the necessary qualifications and is proficient in
the operation of motor vehicles, a license shall be issued to
such applicant upon payment of five pesos, but prior to
the issuance of said license, the applicant shall furnish
three copies of his recent photograph to be securely
attached to the license, and two copies to be filed and kept
as provided by this Act. All driver's licenses shall bear the
signature and right-hand thumb print of the licensee.
Section 24.
Aimee Nono Calo [Transportation Law]
Use of driver's license and badge. - Every license issued
under the provisions of this Act to any driver shall entitle
the holder thereof, while the same is valid and effective
and not suspended or revoked, to operate the motor
vehicles described in such license: Provided, however, That
every licensed professional driver, before operating a
public service motor vehicle registered under classifications
(d) to (j) inclusive of Section seven hereof, shall secure
from the Commissioner, upon payment of the sum of one
peso, a driver's badge which he shall, at all times while so
operating a motor vehicle, display in plain sight on the
band of his cap or on his coat or shirt. Such driver's badge
shall be of metal with a plainly readable number assigned
to the licensee stamped thereon.
It shall be unlawful for any duly licensed driver to transfer,
lend or otherwise allow any person to use his license for
the purpose of enabling such person to operate a motor
vehicle.
No owner of a motor vehicle shall engage, employ, or hire
any person to operate such motor vehicle, unless the
person sought to be employed is a duly licensed
professional driver.
Section 25.
Driver's records. - Any driver who changes his address
shall, within fifteen days, notify the Commissioner in
writing of his new address, name and address of his new
employer, the number of the motor vehicle he is employed
to operate, and such other information as the
Commissioner may require.
Section 26.
Renewal of license. - Any license not renewed on or before
the last working day of the month when the applicant was
born shall become delinquent and invalid, except when the
license is surrendered to the Commissioner or his deputies
before the last working day of the month of his birth in
order to avoid payment of the delinquency fees.
The fee for renewal of delinquent license shall be five
pesos in addition to the basic fee as hereinabove
prescribed.
Page 80
Every applicant for renewal of license to operate any
motor vehicle shall present to the Commissioner, in
person or by mail or messenger, the license issued to the
applicant for the previous year, together with the proper
fee of five pesos and, in the case of professional
chauffeurs, three copies of a readily-recognized
photograph of the applicant, which photograph shall have
been taken not exceeding three years prior to the date of
applicant for renewal.
Lost license. - In case the license for the previous year has
been lost or cannot be produced, the applicant shall obtain
a duplicate in accord with Section eleven of this Act, on
penalty of refusal, by the Commissioner or his deputies, to
renew the license: Provided, however, That the
Commissioner or his deputies may, in their discretion
accept in lieu of the previous years license, the duly signed
and sworn statement of an operator to the effect that he
has not operated any motor vehicle in the Philippines
during the year or years to which no license was issued in
his name.
The Commissioner and his deputies are hereby authorized
to administer the oath in connection with such affidavit.
Section 27.
Suspension, revocation of driver's license.
(a) The Commissioner may suspend for a period not
exceeding three months or, after hearing, revoke any
driver's license issued under the provisions of this Act, and
may order any such license to be delivered to him
whenever he has reason to believe that the holder thereof
is an improper person to operate motor vehicles, or in
operating or using a motor vehicle in, or as an accessory
to, the commission of any crime or act which endangers
the public. Any deputy of the Commissioner may, for the
same cause, suspend for a period not exceeding three
months any driver's license issued under the provisions of
this Act: Provided, That such suspension may be appealed
to the Commissioner who may, after reviewing the case,
confirm, reverse or modify the action taken by such
deputy.
(b) Whenever during any twelve-month period a driver
shall have been convicted at least three times for the
Aimee Nono Calo [Transportation Law]
violations of any provisions of this Act or of any regulation
issued by the Commissioner or any municipal or city
ordinance relating to motor vehicle traffic not in conflict
with any of the provisions of this Act, the Commissioner
may, in his discretion, revoke or suspend the license of
such driver for a period not exceeding two years.
(c) The license suspended or revoked under the provisions
of subsections (a) and (b) of this section shall not be
reinstated unless the driver has furnished a bond in
accordance with Section twenty-nine of this Act and only
after the Commissioner has satisfied himself that such
driver may again safely be permitted to operate a motor
vehicle.
(d) A decision of the Commissioner revoking or refusing
the reinstatement of a license under the provisions of this
Section may be appealed to the Secretary of Public Works
and Communications.
Section 28.
Driver's bond. - The Commissioner before reinstating any
driver's license which has been suspended or revoked
under the provisions of the preceding section or of any
provisions of this Act, may require such driver to post a
bond in the sum of one thousand pesos conditioned upon
the satisfaction and payment of any claim which may be
filed or of any execution which may be issued against such
driver in any case wherein said driver may be held
answerable while operating motor vehicles. The bond
required in this section shall be in such form as to render
sureties liable at least for a period of not less than one year
nor more than three years: Provided, however, That upon
written application to the Commissioner for release from
such a bond, the Commissioner may after revoking or
suspending the driver's license, authorize the release of the
bondsmen from further responsibility thereunder:
Provided, further, That should the Commissioner decide
not to revoke the license of a driver who has been
convicted of homicide through reckless imprudence, or of
the violation of the speed limit or of reckless driving at
least three times within a twelve-month period, the said
driver shall post a bond in the sum of not less than two
thousand pesos, conditioned upon the payment of any
claim which may be filed or any execution which may be
Page 81
issued against him in any case wherein said driver may be
held answerable while operating motor vehicles.
Section 29.
Confiscation of driver's licenses. - Law enforcement and
peace officers duly designated by the Commissioner shall,
in apprehending any driver for violations of this Act or of
any regulations issued pursuant thereto, or of local traffic
rules and regulations, confiscate the license of the driver
concerned and issue a receipt prescribed and issued by the
Commission therefor which shall authorize the driver to
operate a motor vehicle for a period not exceeding
seventy-two hours from the time and date of issue of said
receipt. The period so fixed in the receipt shall not be
extended, and shall become invalid thereafter. Failure of
the driver to settle his case within fifteen days from the
date of apprehension will cause suspension and revocation
of his license.
Section 30.
Student-driver's permit. - Upon proper application and the
payment of three pesos, the Commissioner or his deputy
may issue student-driver's permits, valid for six months to
persons not under eighteen years of age, who desire to
learn to operate motor vehicles. No application for driver's
license shall be received unless the applicant has
undergone instruction in the operation of motor vehicles
for at least a month and has a valid student-driver's permit:
Provided, however, That any person who has a license to
operate vehicles in other countries may, upon presentation
of appropriate evidence of such license, be allowed to pay
for a driver's license without presenting a student driver's
permit.
A student driver who fails in the examination shall
continue as a student driver for at least one additional
month. No student driver shall operate a motor vehicle
unless accompanied by a duly licensed driver.
The licensed driver acting as instructor to the student
driver shall likewise be responsible and liable for any
violation of the provisions of this Act and for any injury or
damage done by the motor vehicle on account or as a
result of its operation by a student under his direction.
Aimee Nono Calo [Transportation Law]
ARTICLE II
Illegal Use of Licenses, Number Plates, Etc.
Section 31.
Imitation and false representations. - No person shall make
or use attempt to make or use a driver's license, badge,
certificate of registration, number plate, tag, or permit in
imitation or similitude of those issued under this Act, or
intended to be used as or for a legal license, badge,
certificate, plate, tag or permit, or with intent to sell or
otherwise dispose of the same to another. No person shall
falsely or fraudulently represent as valid and in force any
driver's license, badge, certificate, plate, tag or permit
issued under this Act which is delinquent or which has
been revoked or suspended.
No person shall, knowingly and with intent to deceive,
make one or more false or fraudulent statements in an
application for the registration of vehicles, or for a driver's
license.
ARTICLE III
Passenger and Freight
Section 32.
Exceeding registered capacity. - No person operating any
vehicle shall allow more passenger or more freight or cargo
in his vehicle than its registered carrying capacity. In the
case of public utility trucks or buses, the conductor shall be
exclusively liable for violations of this section or of Section
thirty-two, letter (c) hereof: Provided, That the conductor,
before being employed by any public service operator,
shall get a permit or license from the Commission and pay
five pesos annually for said license or permit issued in his
favor, and the same is renewable on or before the last
working day of the month of his birth, attaching a readily
recognizable photograph and after presentation of a
medical certificate of fitness of applicant.
Passenger trucks may be allowed to construct any cargo
carrying device at the rear or at the side of the truck,
subject to the approval of the Commissioner: Provided,
Page 82
however, That the total weight of the device, including the
cargo, shall not exceed one hundred kilos.
(b) Carrying of passengers and freight on top of vehicles. -
No person operating a motor vehicle shall allow any
passenger to ride on the cover or top of such vehicles:
Provided, however, That subject to such conditions as may
be contained in permits that may be issued by the
Commissioner, baggage or freight may be carried on the
top of a truck provided the weight thereof does not exceed
twenty kilos per square meter and is distributed in such a
manner as not to endanger the passengers or stability of
the truck.
(c) Riding on running boards. - No driver shall permit any
person to ride on the running board, step board, or
mudguard of his motor vehicle for any purpose except to
make repair or adjustment in the motor or to collect fares.
Section 33.
Passenger or freight capacity marked on vehicle. - All
passengers automobiles for hire shall have the registered
passenger capacity plainly and conspicuously marked on
both sides thereof, in letters and numerals not less than
five centimeters in height.
All motor trucks, whether for passenger or freight, private,
or for hire, shall have the registered passenger gross and
net weight capacities plainly and conspicuously marked on
both sides thereof, in letters and numerals not less than
five centimeters in height.
ARTICLE IV
Accessories of Motor Vehicles
Section 34.
(a) Tires of motor vehicles. - No motor vehicle with
metallic tires shall be operated upon any public highway,
and solid tires whenever used shall be of sufficient
thickness to prevent the metal rims thereof from coming
in direct contact with the road.
(b) Brakes - Every motor vehicle with four or more wheels
shall be provided with dual hydraulic brake system so that
Aimee Nono Calo [Transportation Law]
in case of hydraulic line failure affecting the braking
efficiency of any of the four wheels at least either the front
or rear wheels shall retain normal braking capabilities. In
the absence of such dual braking system every motor
vehicle with four or more wheels shall be provided with
safety valve devices of such design and make so that failure
of the hydraulic braking system of the vehicle because of
leakage in the line of other parts of the system will not
affect all wheels but rather render at all times effective the
braking power of either the two front wheels or the two
rear wheels when brakes are applied. This requirement,
however, does not apply to motor vehicles equipped with
pneumatic braking system.
(b-1) Horns. - Every motor vehicle shall be provided with
a horn or signalling devise in good working order:
Provided, however, That no horn or signalling device
emitting an exceptionally loud, startling, or disagreeable
sound shall be installed or used on any motor vehicle.
All authorized emergency vehicles, such as ambulance and
police cars and fire wagons used for emergency calls shall
be equipped with a bell, siren, or exhaust whistle of a type
approved by the Commissioner, and no such device shall
be installed or used in any other vehicle.
No vehicle not classified as a motor vehicle under this Act
shall be equipped with a horn or signaling device similar to
the horn customarily used on motor vehicles.
(c) Headlights. - Every motor vehicle of more than one
meter of projected width, while in use on any public
highway shall bear two headlights, one on each side, with
white or yellowish light visible from the front, which, not
later than one-half hour after sunset and until at least one-
half four before sunrise and whenever weather conditions
so require, shall both be lighted.
Additional lamps and light may be carried, but no red
lights shall be visible forward or ahead of the vehicle.
Trucks, buses, trailers, and other similar vehicles must
carry, while in use on any public highway during night-
time, colored riding lights on each of the four corners not
more than ten centimeters from the top.
All motor vehicles shall be equipped with devices for
varying the intensity of light, and the driver must dim the
Page 83
headlights or tilt the beams downward whenever the
vehicle is being operated on well-lighted streets within the
limits of cities, municipalities, and thickly populated barrios
or districts, or whenever such vehicle meets another
vehicle on any public highway.
(d) Taillights. - Every motor vehicle and trailer shall, during
the above-mentioned hours, also bear on each side in the
rear a lamp showing a red light visible at least one hundred
meters from the rear of the vehicle and a lamp throwing a
white light upon the number plate issued for such vehicle.
(e) Stop lights. - Every motor vehicle shall be equipped at
the rear with at least one lamp which shall throw a
sustained bright red light visible under all conditions, even
under bright sunlight, when the brakes are applied. Each
bus, truck, trailer or similar vehicle shall be equipped, as its
stop light at or near its rear center, with a lamp at least
twelve centimeters in diameter with the word "stop"
inscribed in the center.
(f) Motorcycle and other vehicle lights. - Every motor
vehicle of less than one meter of projected width shall be
subject to the preceding provisions of this section, except
that one headlight and one taillight shall be required. No
signal light shall be necessary.
Additional lamps may be carried provided they comply
with the preceding provisions of this section.
Every motor vehicle, or whatever style, kind, make,
character, or nature, when upon a highway during the
hours above-mentioned, whether in motion or not, shall
have one or more lights so arranged that the same shall be
visible at least fifty meters from the front and the rear of
such vehicle.
(g) Lights when parked or disabled. - Appropriate parking
lights or flares visible one hundred meters away shall be
displayed at a corner of the vehicle whenever such vehicle
is parked on highways or in places that are not well-lighted
or is placed in such manner as to endanger passing traffic.
(h) Windshield wiper. - Every motor vehicle shall be
equipped with a mechanically or electrically operated
device for wiping off raindrops or other moisture from its
front windshield.
Aimee Nono Calo [Transportation Law]
(i) Use of red flag. - Whenever the load of any vehicle
extends more than one meter beyond the bed or body
thereof, there shall be displayed at every projecting end of
such load a red flag not less than thirty centimeters both in
length and width, except that during the hours fixed under
subsection (c), there shall be displayed, in lieu of the
required red flags, red lights visible at least fifty meters
away.
(j) Mufflers. - Every motor vehicle propelled by an internal
combustion engine shall be equipped with a muffler, and
whenever said motor vehicle passes through a street of any
city, municipality, or thickly populated district or barrio,
the muffler shall not be cut out or disconnected. No motor
vehicle shall be operated in such a manner as to cause it to
emit or make any unnecessary or disagreeable odor, smoke
or noise.
CHAPTER IV
TRAFFIC RULES
ARTICLE I
Speed Limit and Keeping to the Right
Section 35.
Restriction as to speed.
(a) Any person driving a motor vehicle on a highway shall
drive the same at a careful and prudent speed, not greater
nor less than is reasonable and proper, having due regard
for the traffic, the width of the highway, and of any other
condition then and there existing; and no person shall
drive any motor vehicle upon a highway at such a speed as
to endanger the life, limb and property of any person, nor
at a speed greater than will permit him to bring the vehicle
to a stop within the assured clear distance ahead.
(b) Subject to the provisions of the preceding paragraph,
the rate of speed of any motor vehicle shall not exceed the
following:
MAXIMUM Passengers Cars Motor trucks
ALLOWABLE and Motorcycle and buses
SPEEDS
Page 84
 (3) Any driver bringing a wounded or sick person
1. On open 80 km. per hour 50 km per hour
for emergency treatment to a hospital, clinic, or any other
country roads,
with no "blinds similar place;
corners" not
(4) The driver of a motor vehicle belonging to the
closely bordered
by habitations. Armed Forces while in use for official purposes in times of
riot, insurrection or invasion;
2. On "through 40 km per hour 30 km per hour
streets" or (5) The driver of a vehicle, when he or his
boulevards, clear passengers are in pursuit of a criminal;
of traffic, with
no " blind (6) A law-enforcement officer who is trying to
corners," when overtake a violator of traffic laws; and
so designated.
3. On city and 30 km per hour 30 km per hour (7) The driver officially operating a motor vehicle
municipal of any fire department, provided that exemption shall not
streets, with be construed to allow unless or unnecessary fast driving of
light traffic, drivers aforementioned.
when not
designated Section 36.
"through
streets". Speed limits uniform throughout the Philippines. - No
provincial, city or municipal authority shall enact or
4. Through 20 km per hour 220 km per hour
enforce any ordinance or resolution specifying maximum
crowded streets,
allowable speeds other than those provided in this Act.
approaching
intersections at
Section 37.
"blind corners,"
passing school
Driving on right side of highway. - Unless a different
zones, passing
course of action is required in the interest of the safety and
other vehicles
which are the security of life, person or property, or because of
stationery, or for unreasonable difficulty of operation in compliance
similar herewith, every person operating a motor vehicle or an
dangerous animal-drawn vehicle on a highway shall pass to the right
circumstances. when meeting persons or vehicles coming toward him, and
to the left when overtaking persons or vehicles going the
same direction, and when turning to the left in going from
one highway to another, every vehicle shall be conducted
(c) The rates of speed hereinabove prescribed shall not to the right of the center of the intersection of the
apply to the following: highway.

(1) A physician or his driver when the former Section 38.

responds to emergency calls;
(2) The driver of a hospital ambulance on the way
to and from the place of accident or other emergency;
Classification of highways. - Public highways shall be
properly classified for traffic purposes by the provincial
board, municipal board or city council having jurisdiction
over them, and said provincial board, municipal board or

Aimee Nono Calo [Transportation Law] Page 85

city council shall provide appropriate signs therefor,
subject to the approval of the Commissioner. It shall be
the duty of every provincial, city and municipal secretary to
certify to the Commissioner the names, locations, and
limits of all "through streets" designated as such by the
provincial board, municipal board or council.
ARTICLE II
Overtaking and Passing a Vehicle, and Turning at
Intersections
Section 39.
Overtaking a vehicle. - The driver of any motor vehicle
overtaking another vehicle proceeding in the same
direction shall pass at a safe distance to the left thereof,
and shall not again drive to the right side of the highway
until safety clear of such overtaken vehicle except that on a
highway, within a business or residential district, having
two or more lanes for the movement of traffic in one
direction, the driver of a vehicle may overtake and pass
another vehicle on the right. Nothing in this section shall
be construed to prohibit a driver overtaking and passing,
upon the right, another vehicle which is making or about
to make a left turn.
Section 40.
Driver to give way to overtaking vehicle. - The driver of a
vehicle about to be overtaken and passed by another
vehicle approaching from the rear shall give way to the
overtaking vehicle on suitable and audible signal being
given by the driver of the overtaking vehicle, and shall not
increase the speed of his vehicle until completely passed by
the overtaking vehicle.
Section 41.
(b) The driver of a vehicle shall not overtake or pass
another vehicle proceeding in the same direction, when
approaching the crest of a grade, not upon a curve in the
highway, where the driver's view along the highway is
obstructed within a distance of five hundred feet ahead,
except on a highway having two or more lanes for
movement of traffic in one direction where the driver of a
vehicle may overtake or pass another vehicle: Provided,
That on a highway within a business or residential district,
having two or more lanes for movement of traffic in one
direction, the driver of a vehicle may overtake or pass
another vehicle on the right.
(c) The driver of a vehicle shall not overtake or pass any
other vehicle proceeding in the same direction, at any
railway grade crossing, not at any intersection of highways
unless such intersection or crossing is controlled by traffic
signal, or unless permitted to do so by a watchman or a
peace officer, except on a highway having two or more
lanes for movement of traffic in one direction where the
driver of a vehicle may overtake or pass another vehicle on
the right. Nothing in this section shall be construed to
prohibit a driver overtaking or passing upon the right
another vehicle which is making or about to make a left
turn.
(d) The driver of a vehicle shall not overtake or pass, or
attempt to pass, any other vehicle, proceeding in the same
direction, between any points indicated by the placing of
official temporary warning or caution signs indicating that
men are working on the highway.
(e) The driver of a vehicle shall not overtake or pass, or
attempt to overtake or pass, any other vehicle proceeding
in the same direction in any "no-passing or overtaking
zone."

Restrictions on overtaking and passing.

(a) The driver of a vehicle shall not drive to the left side of
the center line of a highway in overtaking or passing
another vehicle proceeding in the same direction, unless
such left side is clearly visible, and is free of oncoming
traffic for a sufficient distance ahead to permit such ARTICLE III
overtaking or passing to be made in safety.

Aimee Nono Calo [Transportation Law] Page 86

Right of Way and Signals
Section 42.
Right of way.
(a) When two vehicles approach or enter an intersection at
approximately the same time, the driver of the vehicle on
the left shall yield the right of way to the vehicle on the
right, except as otherwise hereinafter provided. The driver
of any vehicle traveling at an unlawful speed shall forfeit
any right of way which he might otherwise have hereunder.
(b) The driver of a vehicle approaching but not having
entered an intersection, shall yield the right of way to a
vehicle within such intersection or turning therein to the
left across the line of travel of such firstmentioned vehicle,
provided the driver of the vehicle turning left has given a
plainly visible signal of intention to turn as required in this
Act.
(c) The driver of any vehicle upon a highway within a
business or residential district shall yield the right of way to
a pedestrian crossing such highway within a crosswalk,
except at intersections where the movement of traffic is
being regulated by a peace officer or by traffic signal.
Every pedestrian crossing a highway within a business or
residential district, at any point other than a crosswalk shall
yield the right of way to vehicles upon the highway.
(d) The driver of a vehicle upon a highway shall bring to a
full stop such vehicle before traversing any "through
highway" or railroad crossing: Provided, That when it is
apparent that no hazard exists, the vehicle may be slowed
down to five miles per hour instead of bringing it to a full
stop.
Section 43.
Exception to the right of way rule.
(a) The driver of a vehicle entering a highway from a
private road or drive shall yield the right of way to all
vehicles approaching on such highway.
(b) The driver of a vehicle upon a highway shall yield the
right of way to police or fire department vehicles and
Aimee Nono Calo [Transportation Law]
ambulances when such vehicles are operated on official
business and the drivers thereof sound audible signal of
their approach.
(c) The driver of a vehicle entering a "through highway" or
a "stop intersection" shall yield the right of way to all
vehicles approaching to either direction on such "through
highway": Provided, That nothing in this subsection shall
be construed as relieving the driver of any vehicle being
operated on a "through highway" from the duty of driving
with due regard for the safety of vehicles entering such
"through highway" nor as protecting the said driver from
the consequence of an arbitrary exercise off such right of
way.
Section 44.
Signals on starting, stopping or turning.
(a) The driver of any vehicle upon a highway, before
starting, stopping or turning from a direct line, shall first
see that such movement can be made in safety, and if any
pedestrian may be affected by such movement, shall give a
clearly audible signal by sounding the horn, and whenever
the operation of any other vehicle approaching or
following may be affected by such movement, shall give a
signal plainly visible to the driver of such other vehicles of
the intention to make such movement.
(b) The signal herein required shall be given by means of
extending the hand and arm beyond the left side of the
vehicle, or by an approved mechanical or electrical signal
device.
ARTICLE IV
Turning and Parking
Section 45.
Turning at intersections.
(a) The drive of a vehicle intending to run to the right at an
intersection shall approach such intersection in the lane for
traffic nearest to the right-hand side of the highway and, in
turning, shall keep as close as possible to the right-hand
curb or edge of the highway.
Page 87
(b) The driver of a vehicle intending to turn to the left shall
approach such intersection in the lane for traffic to the
right of and nearest to the center line of the highway, and,
in turning, shall pass to the left of the center of the
intersection, except that, upon highways laned for traffic
and upon one-way highways, a left turn shall be made from
the left lane of traffic in the direction in which the vehicle
is proceeding.
(c) For the purpose of this section, the center of the
intersection shall mean the meeting point of the medial
lines of the highways intersecting one another, except
when it is occupied by a monument, grass plot or any
permanent structure, other than traffic control device.
Section 46.
Parking prohibited in specified places. - No driver shall
park a vehicle, or permit it to stand, whether attended or
unattended, upon a highway in any of the following places:
(a) Within an intersection
(b) On a crosswalk
(c) Within six meters of the intersection of curb lines.
(d) Within four meters of the driveway entrance to and fire
station.
(e) Within four meters of fire hydrant
(f) In front of a private driveway
(g) On the roadway side of any vehicle stopped or parked
at the curb or edge of the highway
(h) At any place where official signs have been erected
prohibiting parking.
Section 47.
Parked vehicle. - Whenever a motor vehicle is parked
unattended on any highway, the driver thereof must turn
off the ignition switch and stop the motor and notch
effectively the hand brake.
ARTICLE V
Aimee Nono Calo [Transportation Law]
Miscellaneous Traffic Rules
Section 48.
Reckless driving. - No person shall operate a motor vehicle
on any highway recklessly or without reasonable caution
considering the width, traffic, grades, crossing, curvatures,
visibility and other conditions of the highway and the
conditions of the atmosphere and weather, or so as to
endanger the property or the safety or rights of any person
or so as to cause excessive or unreasonable damage to the
highway.
Section 49.
Right of way for police and other emergency vehicles. -
Upon the approach of any police or fire department
vehicle, or of an ambulance giving audible signal, the driver
of every other vehicle shall immediately drive the same to a
position as near as possible and parallel to the right-hand
edge or curb of the highway, clear of any intersection of
highways, and shall stop and remain in such position,
unless otherwise directed by a peace officer, until such
vehicle shall have passed.
Section 50.
Tampering with vehicles. - No unauthorized person shall
sound the horn, handle the levers or set in motion or in
any way tamper with a damage or deface any motor
vehicle.
Section 51.
Hitching to a vehicle. - No person shall hang on to, ride
on, the outside or the rear end of any vehicle, and no
person on a bicycle, roller skate or other similar device,
shall hold fast to or hitch on to any moving vehicle, and no
driver shall knowingly permit any person to hang on to or
ride, the outside or rear end of his vehicle or allow any
person on a bicycle, roller skate or other similar device to
hold fast or hitch to his vehicle.
Section 52.
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Driving or parking on sidewalk. - No person shall drive or
park a motor vehicle upon or along any sidewalk, path or
alley not intended for vehicular traffic or parking.
Section 53.
Driving while under the influence of liquor or narcotic
drug. - No person shall drive a motor vehicle while under
the influence of liquor or narcotic drug.
Section 54.
Obstruction of traffic. - No person shall drive his motor
vehicle in such a manner as to obstruct or impede the
passage of any vehicle, nor, while discharging or taking on
passengers or loading or unloading freight, obstruct the
free passage of other vehicles on the highway.
Section 55.
Duty of driver in case of accident. - In the event that any
accident should occur as a result of the operation of a
motor vehicle upon a highway, the driver present, shall
show his driver's license, give his true name and address
and also the true name and address of the owner of the
motor vehicle.
No driver of a motor vehicle concerned in a vehicular
accident shall leave the scene of the accident without
aiding the victim, except under any of the following
circumstances:
1. If he is in imminent danger of being seriously
harmed by any person or persons by reason of the
accident;
2. If he reports the accident to the nearest officer
of the law; or
3. If he has to summon a physician or nurse to aid
the victim.
CHAPTER V
Aimee Nono Calo [Transportation Law]
PENAL AND OTHER PROVISIONS
ARTICLE I
Penalties
Section 56.
Penalty for violation. - The following penalties shall be
imposed for violations of this Act:
(a) For registering later than seven days after acquiring title
to an unregistered motor vehicle or after conversion of a
registered motor vehicle requiring larger registration fee
than that for which it was originally registered, or for
renewal of a delinquent registration, the penalty shall be a
fine fifty per cent of the registration fees corresponding to
the portion of the year for which the vehicle is registered
for use.
(b) For failure to sign driver's license or to carry same
while driving, twenty pesos fine.
(c) Driving a vehicle with a delinquent or invalid driver's
license, fifty pesos fine.
(d) Driving a motor vehicle with delinquent, suspended or
invalid registration, or without registration or without the
proper license plate for the current year, three hundred
pesos fine.
(e) Driving a motor vehicle without first securing a driver's
license, three hundred pesos fine.
(f) Driving a motor vehicle while under the influence of
liquor or narcotic drug, a fine of not less than two hundred
pesos nor more than five hundred pesos, or imprisonment
of not more than three months, or both, at the discretion
of the Court.
(g) Violation of Section thirty-two, thirty-four (a), (b) and
(b-1), thirty-five and forty-six a fine not exceeding one
hundred pesos: Provided, however, That in the case of
violation of Section 34 (b) the vehicle or vehicles affected
may not be allowed to operate unless the requirements
provided in this section are complied with.
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(h) Violations of Sections forty-nine, fifty and fifty-two, a
fine not exceeding fifty pesos.
(i) For making, using or attempting to make or use a
driver's license, badge, certificate or registration, number
plate, tag or permit in imitation or similitude of those
issued under this Act, or intended to be used as or for a
legal license, badge, certificate, plate, tag or permit or with
intent to sell or otherwise dispose of the same to another,
or false or fraudulently represent as valid and in force any
driver's license, badge, certificate, plate, tag or permit
issued under this Act which is delinquent or which has
been suspended or revoked, a fine of not exceeding three
hundred pesos.
(j) For using private passenger automobiles, private trucks,
private motorcycles, and motor wheel attachments for hire,
in violation of Section seven, subsections (a), (b), and (c),
of this Act, a fine of two hundred pesos and suspension of
driver's license for a period of three months for the first
conviction; a fine of three hundred pesos and six months
imprisonment for the second conviction; and an
imprisonment of one year and permanent revocation of
the driver's license for the third conviction.
(k) For permitting, allowing, consenting to, or tolerating
the use of a privately-owned motor vehicle for hire in
violation of Section seven, subsections (a), (b), and (c), of
this Act, there shall be imposed upon the owner of the
vehicle a fine of five hundred pesos and the certificate of
registration shall be suspended for a period of three
months for the first conviction, and an increase of one
hundred pesos in the fine and one month's suspension of
the registration for each subsequent conviction.
(l) For violation of any provisions of this Act or
regulations promulgated pursuant hereto, not hereinbefore
specifically punished, a fine of not less than ten or more
than fifty pesos shall be imposed.
(m) In the event an offender cannot pay any fine imposed
pursuant to the provisions of this Act, he shall be made to
undergo subsidiary imprisonment as provided for in the
Revised Penal Code.
(n) If, as the result of negligence or reckless or
unreasonable fast driving, any accident occurs resulting in
Aimee Nono Calo [Transportation Law]
death or injury of any person, the motor vehicle operator
at fault shall, upon conviction, be punished under the
provisions of the Revised Penal Code.
Section 57.
Punishment for other offenses. - The conviction of any
person for any offense under this Act shall not bar his
prosecution for any other offense which may have been
committed by such person concurrently with the
commission of the offense of which he was convicted or
in doing the act or series of acts which constituted the
offense of which he was convicted.
Section 58.
Duty of clerks of court. - It is hereby made the duty of
clerks of the Court of First Instance, the City Court of
Municipal Court trying traffic violation cases to certify to
the Commission the result of any case, whether criminal or
civil, involving violations of any provision of this Act or of
other laws and ordinances relating to motor vehicles. Said
certificate shall specifically contain the name of the driver
or owner of the vehicle involved, his address, the number
of his license and/or of the certificate or registration of his
vehicle, and the date thereof, and the offense of which he
was convicted or acquitted.
ARTICLE II
Collection of Fees, Taxes and Fines, Liens, Allotment
of Funds
Section 59.
(a) Collection of fees; national and local taxes; toll fees. -
The collection of all fees, taxes, and fines, under the
provisions of this Act shall be made in accordance with
regulations to be prescribed by the Commissioner and
approved jointly by the Auditor General.
(b) No taxes or fees other than those prescribed in this Act
shall be imposed for the registration or operation or on the
ownership of any motor vehicle, or for the exercise of the
profession of chauffeur, by any municipal corporation, the
provisions of any city charter to the contrary
notwithstanding: Provided, however, That any provincial
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board, city or municipal council or board or other
competent authority may enact and collect such reasonable
and equitable toll fees for the use of such bridges and
ferries, within their respective jurisdiction, as may be
authorized and approved by the Secretary of Public Works
and Communications, and also for the use of such public
roads, as may be authorized by the President of the
Philippines upon recommendation of the Secretary of
Public Works and Communications, but in none of these
cases shall any toll fees be charged or collected until and
unless the approved schedule of tolls has been posted
legibly in a conspicuous place at such toll station.
Section 60.
The lien upon motor vehicles. - Any balance of fees for
registration, re-registration or delinquent registration of a
motor vehicle, remaining unpaid and all fines imposed
upon any vehicle owner, shall constitute a first lien upon
the motor vehicle concerned.
The Commission is hereby vested with authority to issue a
warrant of constructive or actual distraint or and levy to
any owner of motor vehicle who has any balance of fees
for registration, re-registration or delinquent registration of
a motor vehicle remaining unpaid, which upon demand by
the Commissioner of the Land Transportation
Commission or any of his deputies executing such warrant,
the owner of the said vehicle shall surrender same at the
time demanded, except when the attachment or execution
is under any judicial process. Any owner who fails or
refuses to surrender any of such property or vehicle not so
surrendered shall be punished by a fine not exceeding the
amount of the fees (including penalties and interests, if
any) for the collection of which such warrant has been
issued, together with the costs and interests, if any, from
the time of such surrender. In addition, such owner shall
punished by a fine of not more than three hundred pesos
or an imprisonment not more than six months, or both.
Section 61.
Disposal of monies collected. - Monies collected under the
provisions of this Act shall be deposited in a special trust
account in the National Treasury to constitute the
Highway Special Fund, which shall be apportioned and
expended in accordance with the provisions of the
Aimee Nono Calo [Transportation Law]
"Philippine Highway Act of 1953": Provided, however,
That the amount necessary to maintain and equip the Land
Transportation Commission but not to exceed fifteen per
cent of the total collections during any one year, shall be
set aside for the purpose.
ARTICLE III
Final Provisions
Section 62.
No provincial board, city or municipal board or council
shall enact or enforce any ordinance or resolution in
conflict with the provisions of this Act, or prohibiting any
deputy or agent of the Commission to enforce this Act
within their respective territorial jurisdiction and the
provisions of any charter to the contrary notwithstanding.
Section 63.
Repeal of laws and ordinances. - Act Numbered Thirty-
nine hundred ninety-two, as amended, and all laws,
executive orders, ordinances, resolutions, regulations, or
parts thereof in conflict with the provisions of this Act are
repealed: Provided, however, That nothing contained in
this Act shall be construed as limiting or superseding any
provisions of the Public Service Act, as amended, with
respect to the control by the Public Service Commission of
motor vehicles operating as public service, nor shall any
provision of this Act be construed as limiting or abridging
the powers conferred upon and exercised by the Public
Service Commission with regards to the control and
supervision of the operation of such motor vehicles as
public service.
Section 64.
Appropriation. - To carry out effectively the provisions of
this Act, the amount of two hundred fifty thousand pesos
is hereby appropriated out of the fees collected under this
Act, in addition to the appropriations provided in the
General Appropriations Act, for the expense of this
Commission for the fiscal year beginning July first,
nineteen hundred and sixty-four, to June thirtieth, nineteen
hundred and sixty-five: Provided, however, That any
savings in the appropriations of the Motor Vehicles Office
for the fiscal year beginning July first, nineteen hundred
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and sixty-three, to June thirtieth, nineteen hundred and
sixty-four shall likewise be available for this purpose.
Section 65.
Separability. - If any provisions of this Act or the
application thereof to any person or circumstance is held
invalid, the remainder of the Act, and the application of
such provision to other persons or circumstances, shall not
be affected thereby.
Section 66.
Effectivity. - This Act shall take effect upon its approval.
Approved: June 20, 1964
8) 1987 Philippine Constitution
Article XII, Section 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 associations organized under the laws of
the Philippines, at least sixty per centum of whose capital
is owned by such citizens; nor shall such franchise,
certificate, or authorization be exclusive in character or for
a longer period than fifty years. Neither shall any such
franchise or right be granted except under the condition
that it shall be subject to amendment, alteration, or repeal
by the Congress when the common good so requires. The
State shall encourage equity participation in public utilities
by the general public. The participation of foreign
investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in
its capital, and all the executive and managing officers of
such corporation or association must be citizens of the
Philippines.
B. Concept of public utility & public service (Sec. 13,
Public Service Act)
(a) The Commission shall have jurisdiction, supervision,
and control over all public services and their franchises,
equipment, and other properties, and in the exercise of its
authority, it shall have the necessary powers and the aid of
the public force: Provided, That public services owned or
Aimee Nono Calo [Transportation Law]
operated by government entities or government-owned or
controlled corporations shall be regulated by the
Commission in the same way as privatelyowned public
services, but certificates of public convenience or
certificates of public convenience and necessity shall not
be required of such entities or corporations: And provided,
further, That it shall have no authority to require
steamboats, motor ships and steamship lines, whether
privately-owned, or owned or operated by any
Government controlled corporation or instrumentality to
obtain certificate of public convenience or to prescribe
their definite routes or lines of service.
(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,
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, icerefrigeration
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.
(c) The word "person" includes every individual, co-
partnership, joint-stock company or corporation, whether
domestic or foreign, their lessees, trustees, or receivers, as
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well as any municipality, province, city, government-owned
or controlled corporation, or agency of the Government of
the Philippines, and whatever other persons or entities that
may own or possess or operate public services. (As
amended by Com. Act 454 and RA No. 2677)
C. Constitutional limitations on operation of public
utilities (Art. XII, 1987 Philippine Constitution)
NATIONAL ECONOMY AND PATRIMONY
Section 1.
The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and
an expanding productivity as the key to raising the quality
of life for all, especially the under-privileged.
The State shall promote industrialization and full
employment based on sound agricultural development and
agrarian reform, through industries that make full and
efficient use of human and natural resources, and which
are competitive in both domestic and foreign markets.
However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy
and all regions of the country shall be given optimum
opportunity to develop. Private enterprises, including
corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of
their ownership.
Section 2.
All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State.
With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be
under the full control and supervision of the State. The
State may directly undertake such activities, or it may enter
into co-production, joint venture, or production-sharing
Aimee Nono Calo [Transportation Law]
agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water
rights for irrigation, water supply fisheries, or industrial
uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to
Filipino citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence
fishermen and fishworkers in rivers, lakes, bays, and
lagoons.
The President may enter into agreements with foreign-
owned corporations involving either technical or financial
assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by
law, based on real contributions to the economic growth
and general welfare of the country. In such agreements, the
State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract
entered into in accordance with this provision, within
thirty days from its execution.
Section 3.
Lands of the public domain are classified into agricultural,
forest or timber, mineral lands and national parks.
Agricultural lands of the public domain may be further
classified by law according to the uses to which they may
be devoted. Alienable lands of the public domain shall be
limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the
public domain except by lease, for a period not exceeding
twenty-five years, renewable for not more than twenty-five
years, and not to exceed one thousand hectares in area.
Page 93
Citizens of the Philippines may lease not more than five
hundred hectares, or acquire not more than twelve
hectares thereof, by purchase, homestead, or grant.
Taking into account the requirements of conservation,
ecology, and development, and subject to the requirements
of agrarian reform, the Congress shall determine, by law,
the size of lands of the public domain which may be
acquired, developed, held, or leased and the conditions
therefor.
Section 4.
The Congress shall, as soon as possible, determine, by law,
the specific limits of forest lands and national parks,
marking clearly their boundaries on the ground.
Thereafter, such forest lands and national parks shall be
conserved and may not be increased nor diminished,
except by law. The Congress shall provide for such period
as it may determine, measures to prohibit logging in
endangered forests and watershed areas.
Section 5.
The State, subject to the provisions of this Constitution
and national development policies and programs, shall
protect the rights of indigenous cultural communities to
their ancestral lands to ensure their economic, social, and
cultural well-being.
The Congress may provide for the applicability of
customary laws governing property rights or relations in
determining the ownership and extent of ancestral domain.
Section 6.
The use of property bears a social function, and all
economic agents shall contribute to the common good.
Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall
have the right to own, establish, and operate economic
enterprises, subject to the duty of the State to promote
distributive justice and to intervene when the common
good so demands.
Aimee Nono Calo [Transportation Law]
Section 7.
Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
Section 8.
Notwithstanding the provisions of Section 7 of this
Article, a natural-born citizen of the Philippines who has
lost his Philippine citizenship may be a transferee of
private lands, subject to limitations provided by law.
Section 9.
The Congress may establish an independent economic and
planning agency headed by the President, which shall, after
consultations with the appropriate public agencies, various
private sectors, and local government units, recommend to
Congress, and implement continuing integrated and
coordinated programs and policies for national
development.
Until the Congress provides otherwise, the National
Economic and Development Authority shall function as
the independent planning agency of the government.
Section 10.
The Congress shall, upon recommendation of the
economic and planning agency, when the national interest
dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of
whose capital is owned by such citizens, or such higher
percentage as Congress may prescribe, certain areas of
investments. The Congress shall enact measures that will
encourage the formation and operation of enterprises
whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering
the national economy and patrimony, the State shall give
preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in
accordance with its national goals and priorities.
Page 94
Section 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 associations organized under the laws of
the Philippines, at least sixty per centum of whose capital
is owned by such citizens; nor shall such franchise,
certificate, or authorization be exclusive in character or for
a longer period than fifty years. Neither shall any such
franchise or right be granted except under the condition
that it shall be subject to amendment, alteration, or repeal
by the Congress when the common good so requires. The
State shall encourage equity participation in public utilities
by the general public. The participation of foreign
investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in
its capital, and all the executive and managing officers of
such corporation or association must be citizens of the
Philippines.
Section 12.
The State shall promote the preferential use of Filipino
labor, domestic materials and locally produced goods, and
adopt measures that help make them competitive.
Section 13.
The State shall pursue a trade policy that serves the general
welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
Section 14.
The sustained development of a reservoir of national
talents consisting of Filipino scientists, entrepreneurs,
professionals, managers, high-level technical manpower
and skilled workers and craftsmen in all fields shall be
promoted by the State. The State shall encourage
appropriate technology and regulate its transfer for the
national benefit.
The practice of all professions in the Philippines shall be
limited to Filipino citizens, save in cases prescribed by law.
Aimee Nono Calo [Transportation Law]
Section 15.
The Congress shall create an agency to promote the
viability and growth of cooperatives as instruments for
social justice and economic development.
Section 16.
The Congress shall not, except by general law, provide for
the formation, organization, or regulation of private
corporations. Government-owned or controlled
corporations may be created or established by special
charters in the interest of the common good and subject to
the test of economic viability.
Section 17.
In times of national emergency, when the public interest so
requires, the State may, during the emergency and under
reasonable terms prescribed by it, temporarily take over or
direct the operation of any privately-owned public utility or
business affected with public interest.
Section 18.
The State may, in the interest of national welfare or
defense, establish and operate vital industries and, upon
payment of just compensation, transfer to public
ownership utilities and other private enterprises to be
operated by the Government.
Section 19.
The State shall regulate or prohibit monopolies when the
public interest so requires. No combinations in restraint of
trade or unfair competition shall be allowed.
Section 20.
The Congress shall establish an independent central
monetary authority, the members of whose governing
board must be natural-born Filipino citizens, of known
probity, integrity, and patriotism, the majority of whom
shall come from the private sector. They shall also be
subject to such other qualifications and disabilities as may
be prescribed by law. The authority shall provide policy
direction in the areas of money, banking, and credit. It
shall have supervision over the operations of banks and
Page 95
exercise such regulatory powers as may be provided by law E. Concept of franchise and certificate of public
over the operations of finance companies and other convenience
institutions performing similar functions.
Franchise
Until the Congress otherwise provides, the Central Bank of
the Philippines operating under existing laws, shall  Grant or privilege from the sovereign power
function as the central monetary authority.
CPC
Section 21.
 Form of regulation through administrative
Foreign loans may only be incurred in accordance with law
agencies
and the regulation of the monetary authority. Information
on foreign loans obtained or guaranteed by the
Government shall be made available to the public. Not only Congress has the power to grant such
authorization but also specified agencies in the Executive
Section 22. Branch granted by law to issue such authorization
Acts which circumvent or negate any of the provisions of
this Article shall be considered inimical to the national
interest and subject to criminal and civil sanctions, as may Franchises issued by Congress are generally not required
be provided by law. before each and every public utility may operate

D. Regulatory Agencies The law has granted certain administrative agencies the
power to grant such licenses
1) Land Transportation Office (LTO);

2) Land Transportation Franchising and

When legislative franchise is necessary
Regulatory Board (LTFRB);
 Depends on the enabling law
3) Air Transportation Office (ATO);
 The law creating the administrative body may still
4) Bureau of Equipment (BOE); require a legislative franchise
 CPC not necessary for the issuance of a legislative
5) National Telecommunications Commission franchise
(NTC);  Example
o May be vested exclusively with the
6) National Electrification Administration Congress
(NEA);  Sec. 27 of RA 9316 EPIRA law
 Power to grant licenses
7) Energy Regulatory Commission (ERB);
in distribution of
8) National Water Resources Board (NWRC); electricity is vested
exclusively in the
9) Civil Aeronautics Board (CAB); and Congress
o May require both
10) Manila International Airport Authority (MIA)  Legislative franchise is necessary
before a CPC can be issued to

Aimee Nono Calo [Transportation Law] Page 96

 operate radio and television
companies

Issuance of Certificate of Public Convenience

 Different from a Certificate of Public Convenience and

Necessity
o Prior issuance of municipal franchise is
required (CPC  not required)
 Basic rule regarding issuance of CPC
o PUBLIC SERVICE ACT
 Sec. 15 and 16(a)
 Basic rule regarding issuance of CPCN
o PUBLIC SERVICE ACT
 Sec 16 (b)

Aimee Nono Calo [Transportation Law] Page 97