UNIVERSITY OF THE PHILIPPINESCOLLEGE OF LAW

TRANSPORTATION AND PUBLIC UTILITY LAWFirst Semester, AY 2013-2014

Prof. Nicholas Felix L. Ty

BASIS FOR EVALUATION

Recitation: Fifty Percent (50%)Final Examination: Forty-Five Percent (45%)Attendance: Five Percent (5%)

Total: One Hundred Percent (100%)

GRADE EQUIVALENTS

Score Grade Equivalent

97-100 1.0094-96 1.2590-93 1.5087-89 1.7583-86 2.0080-82 2.2577-79 2.5074-76 2.7570-73 3.000-69 5.00

TENTATIVE SCHEDULE

Inclusive Dates No. of Meetings

Topic

06 -10 June 2013 1 Introduction and Orientation13 June – 01 July 2013 3 Public Utilities

04 - 22 July 2013 3 Transportation Law Parts I and II

25 July -– 02 September 2013

6 Common Carriers

05-09 September 2013 1 Code of Commerce Provisions on

Overland Transport05 September – 24 September 2013

3 Admiralty and Maritime Commerce

26-30 September 2013 1 Part V of Course Outline: International Air Transport

As scheduled Final Examination

REFERENCES:

Agbayani, Aguedo F., Commentaries & Jurisprudence on the Commercial Laws of the Philippines

Aquino, Timoteo B. & Hernando, Ramon Paul L., Notes and Cases on the Law of Transportation and Public Utilities

COURSE OUTLINE1

PART ONE: PUBLIC UTILITIES

I. General Discussion

A. What is a public utility?

Munn v Illinois, 94 U.S. 113 (1876) Luzon Stevedoring Co., Inc. v. PSC, G.R. No L-

5458. September 16, 1953 KMU Labor Center v. Garcia, 239 SCRA 386

Additional Readings:

Millar, Edythe S., Is the Public Utility Concept Obsolete?, Land Economics, Vol. 71, No. 3, Social Control of Private Power: The Past and Future of Public Utility Regulation (August 1995), pp. 273-285

Gray, Horace M., The Passing of the Public Utility Concept, The Journal of Land & Public Utility Economics, Vol. 16, No. 1 (February 1940), pp 8 -20

Batson, H.E., The Economic Concept of a Public Utility, Economica, No. 42 (November 1933), pp 457-472.

B. What is a public service?

Commonwealth Act No. 146 or the Public Service Act, as amended, Sec 13(b)

Differentiate public utility from public service?

C. Legal Basis and Rationale for Regulation

Republic of the Philippines v. Meralco, 391 SCRA 700

D. Where does the Power to Regulate Public Utilities Reside?

Albano v. Reyes, 175 SCRA 264

1 The original version of this course outline was patterned after the course outline of Prof. Rodrigo Lope S. Quimbo. Additions and amendments to the original outline are in italics.

KMU Labor Center v. Garcia, supra Agan v. Piatco, G.R. No. 155001, January 21,

2004 Batangas CATV v. Court of Appeals, G.R. No.

138819, September 29, 2004

Relate to Public Service Act 13(a)

What happened to the Public Service Commission?

See footnote #2 in KMU Labor Center v. Garcia, supra,

E. Not a Public Utility

Tatad v. Garcia, 243 SCRA 436 Teresa Electric & Power Co. v PSC, 21 SCRA 198

See Public Service Act, Sec. 14 for list of enterprises not covered by definition of public service

Nature of concession agreements

Freedom from Debt Coalition v. MWSS, G.R. No. 173044, December 10, 2007

II. Constitutional Provisions

See Article XII, Secs. 6, 11, 17, 18, 19, 1987 Constitution

a. Ownership

Gamboa v. Teves, G.R. No. 176579, June 28, 2011

Gamboa v. Teves, G.R. No. 176579, October 9, 2012

Relate to Public Service Act, Sec 16 (a) and Sec. 20 (i)

b. Exclusivity

Metro Cebu Water v. Adala, G.R. No. 168914, July 4, 2007

Tawang Multi-Purpose Cooperative v. La Trinidad Water District, G.R. No. 166471, March 22, 2011

c. Subject to Amendment

RCPI v NTC, 150 SCRA 450

Relate to Public Service Act, Sec. 16 (m) and (n)

d. Take-over Power

David v. Macapagal-Arroyo, G.R. No, 171396, May 3, 2006Agan v. Piatco, supra

e. Privatization of State-Operated Public Utilities

Kuwait Airways v. Philippine Airlines, G.R. No. 156087, May 8, 2009

III. Regulation of Public Utilities

A. Authority to Operate

Albano v. Reyes, 175 SCRA 264 PLDT v NTC, G.R. No. 88404, October 18,

1990 Francisco v. Toll Regulatory Board, G.R. No.

166910, October 19, 2010 Napocor v. Court of Appeals, 279 SCRA 408

Relate to Public Service Act, Section 16 (a), Sec. 18

i. General Qualifications

Vda. de Lat v. PSC, G.R. No. L-34978, Feb. 26, 1988

KMU Labor Center v. Garcia, supra

ii. Revocation or Cancellation

Divinagracia v Consolidated Broadcasting System, Inc. G.R. No 162272, April 7, 2009

Relate to Public Service Act, Section 16(m)

iii. CPC v. CPCN

See Public Service Act, Section 15

PAL v. CAB, 270 SCRA 538 (see also Republic Acts No. 9183 and 9517 in relation to case)

B. Rate-Fixing

See Public Service Act, Sections 16(c) and 20(a)

o Padua v. Ranada, G.R. No. 141949, October 14, 2002

o Republic of the Philippines v. Meralco, supra

o KMU Labor Center v. Garcia, suprao Francisco v. Toll Regulatory Board,

supra

C. Approval of Sales of Public Utility Assets or Equity

Public Service Act, Section 20 (g), (h) and (i)

Montoya v. Ignacio, G.R. No. L-5868, December 29, 1953

Perez v. Gutierrez, 53 SCRA 149

D. Power to set fees and other charges

Republic v. International Communications Corporation, G.R. No. 141667, July 17, 2006

E. Other means of regulation

See Public Service Act, Section 16 and 20

PLDT v NTC, supra

PART TWO: TRANSPORATION LAW

I General Discussion

1. Definition

2. Relationship to a public utility

3. Nature of a Franchise

Raymundo v. Luneta Motor, 58 Phil. 889Cogeo-Cubao Operator & Driver Association v. CA, G.R. No. 100727, March 18, 1992Y Transit Co., Inc. v. NLRC, 229 SCRA 508

4. Scope of a Franchise

San Pablo v. Pantranco, 153 SCRA 199

5. Prior-operator rule

Batangas Transportation v. Orlanes, 52 Phil 455

6. Kabit System

Teja v. IAC, 148 SCRA 347Lita Enterprises, Inc. v. Second Civil Cases Division, 129 SCRA 79Lim v. CA, G.R. No. 125817, January 16, 2002Baliwag Transit, Inc. v Court of Appeals, G.R. No. L-57493, January 7, 1987

7. Private nature; rights and obligations of parties inter se arising from transactions relating to transportation

a. absent a transportation contract

Lara v Valencia, 104 Phil 65

b. liability of registered owner

PCI Leasing v UCPB General Insurance, 557 SCRA 141

II Regulation of the Transportation Industry

1. The Department of Transportation and Communication, EO 125, Sec. 4 and 5 (as amended by EO 125-A); See also EO 292 Book IV, Title XV

a. Air(i) Civil Aviation Authority of the

Philippines, Republic Act No. 9497 (2008), Sec. 4, 21, 24, 35

(ii) Civil Aeronautics Board, RA 776, as amended, Secs. 5, 10 (A), (C); Secs. 11,12

PAL v. CAB, 23 SCRA 992PAL v. CAB, supraKuwait Airways v. PAL, supra

b. Land

(i) Land Transporation Office, EO 125-A, Secs. 9, 11, 13(a); Administrative Code of 1987, Title XV, Sec 9(1)

(ii) Land Transportation Franchising and Regulatory Board, EO 202, Secs. 1, 2, 4, 5, 6, 7; Administrative Code of 1987, Title XV, Secs. 15-22

KMU Labor Center v. Garcia, suprac. Water

(i) Maritime Industry Authority, EO 125, Sec. 14, as amended by EO-125-A, Sec. 4. See also Republic Act No. 9295, Section 10 and 11, in relation to Section 8

IV. Common Carriers

(Unless otherwise indicated, reference is to the Civil Code)

A. In General

1. Definitions, essential elements; Art. 1732

U.S. v. Tan Piaco, 40 Phil 853Home Insurnace Co. v. American Steamship, 23 SCRA 24De Guzman v. CA, 168 SCRA 612Bascos v. CA, 221 SCRA 318Planters Products Inc. v. Court of Appeals, 226 SCRA 476Fabre v. Court of Appeals, 259 SCRA 426First Philippine Industrial Corporation v. Court of Appeals, 300 SCRA 661Asia Lighterage and Shipping v. Court of Appeals, 409 SCRA 340 Crisostomo v. Court of Appeals, 409 SCRA 528

2. Nature of Business; power of State to regulate Art. 1765

Pantranco v. PSC, 70 Phil 221

3. Nature and Basis of Liability

Art. 1733

Cangco v. MRR, 38 Phil 767Isaac v. A.L. Ammen, 101 Phil 1046Fores v. Miranda, 105 Phil 266Phil. Rabbit v. IAC, 189 SCRA 159LRTA v. Navidad, 397 SCRA 75

4. Classes of common carriers Art. 1732, 1733, 1755

5. Law applicable Arts. 1766, 1753

B. Common Carriage of Goods

1. Liability and presumption of negligenceArts. 1733, 1734, 1735

Ynchausti Steamship Co. v. Dexter, 41 Phil 289Mirasol v. Dollar, 53 Phil 125

2. Exemption from liability

(a)Natural DisasterArts. 1734 (1), 1739, 1740; Art. 361,Code of Commerce

Tan Chiong v. Inchausti, 22 Phil 153Martini v. Macondray, 39 Phil. 934Eastern Shipping v. IAC, 150 SCRA 463Asia Lighterage v. Court of Appeals, 409 SCRA 340

(b)Act of public enemy – Art. 1734(2), 1739

(c) Act or omission of shipper – Art. 1734(3), 1741

(d)Character of goods, etcArts. 1734(4), 1742Art. 366, Code of Commerce

Government v. Ynchausti, 40 Phil 219Southern Lines v. CA, 4 SCRA 258

(e)Order of competent authorityArts. 1734(5), 1743

Ganzon v. Court of Appeals, 161 SCRA 646

3. Duration of Extraordinary Responsibility

Arts. 1736 to 1738

Compania Maritima v. Insurance Company, 12 SCRA 213Lu Do v. Binamira, 101 Phil 120APL v. Klepper, 110 Phil. 243Eastern Shipping v. CA, 234 SCRA 79

4. Agreement Limiting Liability

(a) As to diligence requiredArts. 1744, 1745, 1751

(b) As to amount of liabilityArts. 1749 and 1750 Heacock v. Macondray 42 Phil 205Shewaram v. PAL 17 SCRA 606Ong Yiu v. CA, 91 SCRA 223Pan Am v. IAC, 164 SCRA 268Cathay Pacific v. CA, 219 SCRA 520

(c) Factor affecting agreementArts. 1746, 1747, 1748, 1751, 1752, CC

5. Applicable Law in Foreign TradeArt. 1753

6. Rules on Passenger BaggageArts. 1754, 1998, 2000 to 2003

C. Common Carriage of Passengers

1. Nature and extent of responsibilityArts. 1733, 1755

Isaac v. A.L. Amnen Trans. Co., supraLandingin v. Pantranco 33 SCRA 284Landicho v. BTCo. 52 OG 7640Necesito v. Paras 104 Phil 75PAL v. CA, 106 SCRA 391Sulpicio v. CA, 246 SCRA 229Japan Airlines v. Court of Appeals, 449 SCRA 544

2. Duration of responsibility

Cf. Article 1736, Civil Code;Article 17, Warsaw Convension (51 O.G. 5084), Article 698, Code of Commerce

Cangco v. MRR, supraDel Prado v. Meralco, 52 Phil 900La Mallorca v. Court of Appeals 17 SCRA 739Bataclan v. Medina 102 Phil 181Aboitiz v. CA, 179 SCRA 95Philippine Airlines v. CA, 226 SCRA 423

3. Presumption of Negligence, Art. 1756

4. Force Majeure

Bachelor Express v. CA, 188 SCRA 217

5. Limitation of Liability; validity of stipulationsArts. 1757, 1758

6. Responsibility for acts of employeesArts. 1759, 1760

De Gillaco v. MRR, 97 Phil 884

Maranan v. Perez, 20 SCRA 412LRTA v. Navidad, supra

7. Responsibility for acts of strangers and co-passengersArts. 1763

Pilapil v. CA, 180 SCRA 546Bachelor Express, Inc. v. CA, supra

8. Duty of passenger; effect of contributory negligenceArts. 1761, 1762

Cangco v. MRR, supraIsaac v. A.L. Amnen, supra

D. Damages Recoverable from Common Carriers

1. In general

2. Actual or compensatory

Arts. 2199,2201,2203,1764,2206

Cariaga v. LTBCo. and MRR, 110 Phil 346Pan Am v. IAC, supraVilla-Rey v. CA, 31 SCRA 511PAL v. CA, 185 SCRA 110Victory Liner v. Gammad, G.R. No, 159636, Nov 25, 2004

3. MoralArts. 2217, 2216, 2219, 2220,2206(3)

Fores v. Miranda, 105 Phil 266Air France v. Carrascoso, 18 SCRA 155Lopez v. Pan Am, 16 SCRA 431Ortigas v. Lufthansa, 64 SCRA 610PAL v. Miano, 242 SCRA 235United Airlines v. Court of Appeals, 357 SCRA 99Cathay Pacific v. Vasquez, 399 SCRA 207Air France v. Gillego, G.R. No. 165266, December 15, 2010

8. Exemplary

Arts. 2229, 2232, 2233Mecenas v. Court of Appeals, 180 SCRA 83

9. Nominal, Temperate and Liquidated

Arts. 2221, 2224, 2226

Alitalia v. AIC, 192 SCRA 9Saludo v. Court of Appeals, 207 SCRA 498Japan Airlines v. Court of Appeals, 294 SCRA 19Savellano v. Northwest, 405 SCRA 416Victory Liner v Gammad, supra

6. Attorney’s Fees and InterestArts. 2208, 2210

IV. Code of Commerce Provisions on Overland Transportation

(Unless otherwise indicated, reference is to Code of Commerce)

A. Scope of Overload TransportationB. Nature of Contract, Art. 349C. Effect of Civil Code

Arts. 1766, 2270, Civil Code

D. Contract of Carriage1. Bill of Lading

(a) Definition, Subject Matter, Art. 352(b) Form, Contents, Arts. 350, 351(c) Function, Art. 353

2. Refusal to Transport, Art. 3563. Doubtful declaration of contents, Art. 3574. No Bill of Lading, Art. 354, 51

E. Responsibility of the Carrier1. When it commences, Art. 3552. Route, Art. 3593. Care of Goods, Arts. 361, 362

Arts. 1734, 1735, Civil Code

4. Delivery

(a) Condition of Goods, Arts. 363 to 367(b) To Whom Delivery Made, Art. 368 (c) When to be made, Arts. 370, 358

F. Rights and Obligations or Shipper and/or Consignee

1. Right to damages

(a) Condition imposed on right, Arts. 366, 357

(b) Amount of damages for loss, Art. 732; Art. 1744, Civil Code(c) Amount of Damages for delay, Art. 371(3)

2. Right to abandon, Arts. 371, 360, 365, 3633. Right to change consignment, Art. 3604. Obligation to pay transportation charges, Arts. 376; Art. 2241(9), Civil Code5. Obligation to return bill of lading, Art. 353(2)

G. Applicability of Provisions, Art. 379

V. Admiralty and Maritime Commerce

A. Concept of Admiralty; Jurisdiction over admiralty cases

Batas Pambansa Blg. 129, Sec. 19 (3), Sec. 33(1), as amended by R.A. 7691

International Harvester v. Aragon, 84 Phil 363

B. Vessels

1. Meaning

Lopez v. Duruelo, 52 Phil 229

E. Nature and acquisition of

Arts. 573, 573, 583, Art. 712, Civil Code

F. Registration; certificates issued; distinctions

Republic Act 9295 Section 10(1)

4. Significance of registration of transactions affecting vessels

Arroyo v. Yu, 54 Phil 511Rubiso v. Rivera, 37 Phil 72

C. Persons Participating in Maritime Commerce

1. Shipowners and shipagents

Arts. 586 to 608; 618

Standard Oil v. Castelo, 42 Phil 256

(a)Responsibilities and liabilities

Yu Con v. Ipil, 41 Phil 770Manila Streamship v. Abdulhaman, 100 Phil 32Wing Kee Compradoring Co. v. Bark “Mononhaela”, 44 Phil. 464

(b)The doctrine of limited liability, Art. 587

Manila Steamship v. Abdulhaman, supraYangco v. Laserna, 73 Phil 330Abueg v. San Diego, 77 Phil 730Aboitiz Shipping v. General Accident Fire and Life Assurance Corporation, Ltd., 217 SCRA 359

(c) Specific rights and prerogativesArts. 575, 593, 594, 596, 601

2. Captains and Master

(a)Qualifications and licensing

Rep. Act 5173, Sec. 3Art. 609

(b)Powers and Duties

Arts. 610, 611, 612, 622, 624, 625

Inter Orient v. NLRC, 235 SCRA 269

(c) Prohibited acts and transactions

Arts. 613, 614, 615, 617, 621, 583

3. Other Officers and Crew

(a)Contracts and formalities, Art. 634(b)Duties and liabilities, Art. 635(c) Rights, Arts. 636 to 647

4. Supercargoes, Arts. 649-651

D. Accidents and Damages in Maritime Commerce

1. Averages

(a)Nature and Kinds, Arts. 806 to 808

(1)Simple or Particular(a)Defined, Art. 809(b)Effects, Art. 810

(2)Gross or General

(a) Defined, Arts. 811, 817, 818(b) Essential Requisites, Arts. 813, 814, 860

Magsaysay Inc. v. Agan. 96 Phil 504

(c) Effects, Art. 812(d)Jettison, Arts. 815, 816(e)Jason Clauses (See York-Antwerp Rules, Rule D)

2. Arrival Under Stress

(a) Causes, Arts. 819 and 820(b) Formalities, Arts. 819, 822(c) Expenses, Arts. 821, 822(d) Responsibility of Captain, Arts. 823 - 825

3. Collisions

(a) Classes and Effects

(1) Fortuitous, Arts. 830, 832(2) Culpable, Arts. 826, 827 and 831(3) Inscrutable Fault, Art. 828

A. Urrutia & Co. v. Baco River Plantation Co., G.R. No. 7675, March 25, 1913National Development Company v. Court of Appeals, G.R. No. L-49407, August 19, 1988Government v. Philippine Streamship Co., Inc. G.R. No. 18957, January 16,1923Smith Bell and Company v. Court of Appeals, G.R. No. 56294, May 20, 1991

4. Shipwrecks, Arts. 840 to 843

(a) Salvage Law (Act No. 2616)

G. Urrutia & Company v. The Pasig Steamer and Lighter Co.. G.R. No, 7294, March 22, 1912

Erlanger & Galinger v. Swedish East Asiatic Co. Ltd, 34 Phil 178

Atlantic, Gulf & Pacific Company v Uchida Kisen Kaisha, G.R. No. L-15871, November 7, 1921

Barrios v. Go Thong, 7 SCRA 535

E. Special Contracts of Maritime Commerce

1. Charter Partiesa. Definitionb. Kinds

Planters Products v. CA, supraCoastwise Lighterage Corp. v. CA, 245 SCRA 796Caltex Philippines v. Sulpicio Lines, 315 SCRA 709

2. Loans on Bottomry and Respondentiaa. Loan on Bottomry, definedb. Loan on Respondentia, definedc. Character of Loan, Art. 719

F. Bill of Lading

1. Contents, Art. 706, 707,713, 7142. Probative Value, Arts. 709, 710

G. Passenger on Sea Voyage

1. Nature of Contracts, Art. 6952. Obligations of Passengers, Arts. 693, 699, 704, 694, 7003. Rights of Passengers, Arts. 697, 698

Sweet Lines v. CA, 121 SCRA 769Trans-Asia Shipping v. CA, 254 SCRA 260

J. Carriage of Goods by Sea Act (Commonwealth Act No. 65; Public Act. No. 521, 74th US Congress)

Ang v. American Steamship Agencies, 19 SCRA 123F.H. Stevens v. Nordeutscher, 6 SCRA 180

VI. Air Transportion

A. International Air Transportation

(Unless otherwise indicated, reference is to the Warsaw Convension, 51 O.G. 5084; Presidential Proclamation No. 201, 51, O.G. 4933 [Oct. 1995]

1. Constitutionality

Santos v. Northwest, 210 SCRA 256

2. When applicable, Art. 1(1)3. Liabilities under the Convention, Arts. 17, 18, 19

Northwest v. Cuenca, 14 SCRA 1063Alitalia v. IAC, 192 SCRA 10

4. Limitations on Liability, Art. 22

Pan Am v. IAC, 164 SCRA 268

5. When limitations unavailable, Art 3, 25

TWA v CA, 165 SCRA 143

6. Conditions on Imposition of Liability, Art 26, 28, 29

Santos v. Northwest, supraLuna v. Court of Appeals, 216 SCRA 107Lhuillier v. British Airways, G.R. No 171092, March 15, 2010PAL v. Savillo, G.R. No 149547, July 4, 2008United Airlines v Uy, G.R. No. 127768, November 19, 1999

B. Passenger Rights

Joint DOTC-DTI Administrative Order No. 01, Series of 2012