transpo cases doctrines

TRANSPORTATION LAWS CASE DOCTRINES

Page | 1

Bautista & Ortega

Duties of a Captain

Inter Orient Maritime Ent vs NLRC

The captain of a vessel is a confidential and managerial employee within the meaning of

the above doctrine. A master or captain, for purposes of maritime commerce, is one who has

command of a vessel. A captain commonly performs three (3) distinct roles:

(1) he is a general agent of the shipowner;

(2) he is also commander and technical director of the vessel;

(3) he is a representative of the country under whose flag he navigates.

The applicable principle is that the captain has control of all departments of service in

the vessel, and reasonable discretion as to its navigation.

More importantly, a ships captain must be accorded a reasonable measure of

discretionary authority to decide what the safety of the ship and of its crew and cargo

specifically requires on a stipulated ocean voyage. The captain is held responsible, and properly

so, for such safety. He is right there on the vessel, in command of it and knowledgeable as to

the specific requirements of seaworthiness and the particular risks and perils of the voyage he is

to embark upon.

Duties of a Pilot

Far Eastern Shipping vs CA

In American jurisprudence, there is a presumption of fault against a moving vessel that

strikes a stationary object such as a dock or navigational aid.

We start our discussion of the successive issues bearing in mind the evidentiary rule in

American jurisprudence that there is a presumption of fault against a moving vessel that strikes

a stationary object such as a dock or navigational aid. In admiralty, this presumption does more

than merely require the ship to go forward and produce some evidence on the presumptive

matter. The moving vessel must show that it was without fault or that the collision was

occasioned by the fault of the stationary object or was the result of inevitable accident. It has

been held that such vessel must exhaust every reasonable possibility which the circumstances

admit and show that in each, they did all that reasonable care required. In the absence of

sufficient proof in rebuttal, the presumption of fault attaches to a moving vessel which collides

with a fixed object and makes a prima facie case of fault against the vessel. Logic and

experience support this presumption.

A pilot, in maritime law, is a person duly qualified, and licensed, to conduct a vessel into

or out of ports, or in certain waters. In a broad sense, the term pilot includes both

(1) those whose duty it is to guide vessels into or out of ports, or in particular waters and

(2) those entrusted with the navigation of vessels on the high seas.


Page | 2

Bautista & Ortega

However, the term pilot is more generally understood as a person taken on board at a

particular place for the purpose of conducting a ship through a river, road or channel, or from a

port.

it is to guide vessels into or out of ports, or in particular waters and (2) those entrusted

with the navigation of vessels on the high seas. However, the term pilot is more generally

understood as a person taken on board at a particular place for the purpose of conducting a

ship through a river, road or channel, or from a port.

Under English and American authorities, generally speaking, the pilot supersedes the

master for the time being in the command and navigation of the ship, and his orders must be

obeyed in all matters connected with her navigation. He becomes the master pro hac vice and

should give all directions as to speed, course, stopping and reversing, anchoring, towing and

the like. And when a licensed pilot is employed in a place where pilotage is compulsory, it is his

duty to insist on having effective control of the vessel, or to decline to act as pilot. Under certain

systems of foreign law, the pilot does not take entire charge of the vessel, but is deemed merely

the adviser of the master, who retains command and control of the navigation even in localities

where pilotage is compulsory.

It is quite common for states and localities to provide for compulsory pilotage, and safety

laws have been enacted requiring vessels approaching their ports, with certain exceptions, to

take on board pilots duly licensed under local law.It is quite common for states and localities

to provide for compulsory pilotage, and safety laws have been enacted requiring vessels

approaching their ports, with certain exceptions, to take on board pilots duly licensed under local

law. The purpose of these laws is to create a body of seamen thoroughly acquainted with the

harbor, to pilot vessels seeking to enter or depart, and thus protect life and property from the

dangers of navigation.

A pilot should have a thorough knowledge of general and local regulations and physical

conditions affecting the vessel in his charge and the waters for which he is licensed, such as a

particular harbor or river.Pursuant thereto, Capt. Gavino was assigned to pilot MV Pavlodar

into Berth 4 of the Manila International Port. Upon assuming such office as compulsory pilot,

Capt. Gavino is held to the universally accepted high standards of care and diligence required of

a pilot, whereby he assumes to have skill and knowledge in respect to navigation in the

particular waters over which his license extends superior to and more to be trusted than that of

the master. A pilot should have a thorough knowledge of general and local regulations and

physical conditions affecting the vessel in his charge and the waters for which he is licensed,

such as a particular harbor or river. He is not held to the highest possible degree of skill and

care, but must have and exercise the ordinary skill and care demanded by the circumstances,

and usually shown by an expert in his profession. Under extraordinary circumstances, a pilot

must exercise extraordinary care.

Negligence; Those who undertake any work calling for special skills are required not

only to exercise reasonable care in what they do but also possess a standard minimum of

special knowledge and abilityevery man who offers his services to another, and is employed,

assumes to exercise in the employment such skills he possesses, with a reasonable degree of

diligence.An act may be negligent if it is done without the competence that a reasonable


Page | 3

Bautista & Ortega

person in the position of the actor would recognize as necessary to prevent it from creating an

unreasonable risk of harm to another. Those who undertake any work calling for special skills

are required not only to exercise reasonable care in what they do but also possess a standard

minimum of special knowledge and ability. Every man who offers his services to another, and is

employed, assumes to exercise in the employment such skills he possesses, with a reasonable

degree of diligence. In all these employments where peculiar skill is requisite, if one offers his

services he is understood as holding himself out to the public as possessing the degree of skill

commonly possessed by others in the same employment, and if his pretensions are unfounded

he commits a species of fraud on every man who employs him in reliance on his public

profession.

The degree of care required is graduated according to the danger a person or property

attendant upon the activity which the actor pursues or the instrumentality which he usesthe

greater the danger the greater the degree of care required.There is an obligation on all

persons to take the care which, under ordinary circumstances of the case, a reasonable and

prudent man would take, and the omission of that care constitutes negligence. Generally, the

degree of care required is graduated according to the danger a person or property attendant

upon the activity which the actor pursues or the instrumentality which he uses. The greater the

danger the greater the degree of care required. What is ordinary under extraordinary of

conditions is dictated by those conditions; extraordinary risk demands extraordinary care.

Similarly, the more imminent the danger, the higher the degree of care.

While it is indubitable that in exercising his functions a pilot is in sole command of the

ship and supersedes the master for the time being in the command and navigation of a ship and

that he becomes master pro hac vice of a vessel piloted by him, there is overwhelming authority

to the effect that the master does not surrender his vessel to the pilot and the pilot is not the

masterthe master is not wholly absolved from his duties while a pilot is on board his vessel,

and may advise with or offer suggestions to him.While it is indubitable that in exercising his

functions a pilot is in sole command of the ship and supersedes the master for the time being in

the command and navigation of a ship and that he becomes master pro hac vice of a vessel

piloted by him, there is overwhelming authority to the effect that the master does not surrender

his vessel to the pilot and the pilot is not the master. The master is still in command of the

vessel notwithstanding the presence of a pilot. There are occasions when the master may and

should interfere and even displace the pilot, as when the pilot is obviously incompetent or

intoxicated and the circumstances may require the master to displace a compulsory pilot

because of incompetency or physical incapacity. If, however, the master does not observe that

a compulsory pilot is incompetent or physically incapacitated, the master is justified in relying on

the pilot, but not blindly. The master is not wholly absolved from his duties while a pilot is on

board his vessel, and may advise with or offer suggestions to him. He is still in command of the

vessel, except so far as her navigation is concerned, and must cause the ordinary work of the

vessel to be properly carried on and the usual precaution taken. Thus, in particular, he is bound

to see that there is sufficient watch on deck, and that the men are attentive to their duties, also

that engines are stopped, towlines cast off, and the anchors clear and ready to go at the pilots

order.

Where a compulsory pilot is in charge of a ship, the master being required to permit him

to navigate it, if the master observes that the pilot is incompetent or physically incapable, then it


Page | 4

Bautista & Ortega

is the duty of the master to refuse to permit the pilot to act, but if no such reasons are present,

then the master is justified in relying upon the pilot, but not blindly.In sum, where a

compulsory pilot is in charge of a ship, the master being required to permit him to navigate it, if

the master observes that the pilot is incompetent or physically incapable, then it is the duty of

the master to refuse to permit the pilot to act. But if no such reasons are present, then the

master is justified in relying upon the pilot, but not blindly. Under the circumstances of this case,

if a situation arose where the master, exercising that reasonable vigilance which the master of a

ship should exercise, observed, or should have observed, that the pilot was so navigating the

vessel that she was going, or was likely to go, into danger, and there was in the exercise of

reasonable care and vigilance an opportunity for the master to intervene so as to save the ship

from danger, the master should have acted accordingly. The master of a vessel must exercise a

degree of vigilance commensurate with the circumstances.

A pilot is personally liable for damages caused by his own negligence or default to the

owners of the vessel, and to third parties for damages sustained in a collision, such negligence

in the performance of duty constitutes a maritime tort.In general, a pilot is personally liable for

damages caused by his own negligence or default to the owners of the vessel, and to third

parties for damages sustained in a collision. Such negligence of the pilot in the performance of

duty constitutes a maritime tort. At common law, a shipowner is not liable for injuries inflicted

exclusively by the negligence of a pilot accepted by a vessel compulsorily. The exemption from

liability for such negligence shall apply if the pilot is actually in charge and solely in fault. Since,

a pilot is responsible only for his own personal negligence, he cannot be held accountable for

damages proximately caused by the default of others, or, if there be anything which concurred

with the fault of the pilot in producing the accident, the vessel master and owners are liable.

Where several causes producing an injury are concurrent and each is an efficient cause

without which the injury would not have happened, the injury may be attributed to all or any of

the causes and recovery may be had against any or all of the responsible persons although

under the circumstances of the case, it may appear that one of them was more culpable, and

that the duty owed by them to the injured person was not the sameeach wrongdoer is

responsible for the entire result and is liable as though his acts were the sole cause of the

injury.It may be said, as a general rule, that negligence in order to render a person liable need

not be the sole cause of an injury. It is sufficient that his negligence, concurring with one or

more efficient causes other than plaintiffs, is the proximate cause of the injury. Accordingly,

where several causes combine to produce injuries, a person is not relieved from liability

because he is responsible for only one of them, it being sufficient that the negligence of the

person charged with injury is an efficient cause without which the injury would not have resulted

to as great an extent, and that such cause is not attributable to the person injured. It is no

defense to one of the concurrent tortfeasors that the injury would not have resulted from his

negligence alone, without the negligence or wrongful acts of the other concurrent tortfeasor.

Where several causes producing an injury are concurrent and each is an efficient cause without

which the injury would not have happened, the injury may be attributed to all or any of the

causes and recovery may be had against any or all of the responsible persons although under

the circumstances of the case, it may appear that one of them was more culpable, and that the

duty owed by them to the injured person was not the same. No actors negligence ceases to be

a proximate cause merely because it does not exceed the negligence of other actors. Each


Page | 5

Bautista & Ortega

wrongdoer is responsible for the entire result and is liable as though his acts were the sole

cause of the injury.

Maritime contracts; maritime liens

Crescent Petroleum, Ltd. vs. M/V Lok Maheshwari

Two (2) tests have been used to determine whether a case involving contracts comes

within the admiralty and maritime jurisdiction of a court

Two (2) tests have been used to determine whether a case involving a contract comes

within the admiralty and maritime jurisdiction of a courtthe locational test and the subject

matter test. The English rule follows the locational test wherein maritime and admiralty

jurisdiction, with a few exceptions, is exercised only on contracts made upon the sea and to be

executed thereon. This is totally rejected under the American rule where the criterion in

determining whether a contract is maritime depends on the nature and subject matter of the

contract, having reference to maritime service and transactions. In International Harvester

Company of the Philippines v. Aragon, we adopted the American rule and held that (w)hether

or not a contract is maritime depends not on the place where the contract is made and is to be

executed, making the locality the test, but on the subject matter of the contract, making the true

criterion a maritime service or a maritime transaction. A contract for furnishing supplies like the

one involved in this case is maritime and within the jurisdiction of admiralty. It may be invoked

before our courts through an action in rem or quasi in rem or an action in personam.

Doctrine of Processual Presumption; Requisites for Maritime Liens on Necessaries to

Exist.Even if we apply the doctrine of processual presumption, the result will still be the same.

Under P.D. No. 1521 or the Ship Mortgage Decree of 1978, the following are the requisites for

maritime liens on necessaries to exist: (1) the necessaries must have been furnished to and

for the benefit of the vessel; (2) the necessaries must have been necessary for the

continuation of the voyage of the vessel; (3) the credit must have been extended to the vessel;

(4) there must be necessity for the extension of the credit; and (5) the necessaries must be

ordered by persons authorized to contract on behalf of the vessel. These do not avail in the

instant case.

Limited Liability Rule

Philippine Shipping Co. vs. Garcia

In the case at bar the vessel L., sailing in accordance with the rules of navigation,

collided with the vessel N., not so sailing, and both vessels were lost. P., the owner of the

vessel L., sues for the value of the vessel N., the vessel causing the loss. Held, That in view of

the above stated principles, the defendant is liable for the indemnification to which the plaintiff is

entitled by reason of the collision, but he is not required to pay such indemnification for the

reason that the obligation thus incurred has been extinguished on account of the loss of the

thing bound for the payment thereof

Yanco v. Laserna


Page | 6

Bautista & Ortega

If the shipowner or agent may in any way be held civilly liable at all for injury to or death

of passengers arising from the negligence of the captain in cases of collisions or shipwrecks, his

liability is merely co-extensive with his interest in the vessel such that a total loss thereof results

in its extinction. In arriving at this conclusion, the fact is not ignored that the ill-fated S. S.

Negros, as a vessel engaged in interisland trade, is a common carrier, and that the relationship

between the petitioner and the passengers who died in the mishap rests on a contract of

carriage. But assuming that petitioner is liable for a breach of contract of carriage, the

exclusively "real and hypothecary nature" of maritime law operates to limit such liability to the

value of the vessel, or to the insurance thereon, if any. In the instant case it does not appear

that the vessel was insured.

Loadstar shipping vs ca, gr 131621

Since it was remiss in the performance of its duties, LOADSTAR cannot hide behind the

limited liability doctrine to escape responsibility for the loss of the vessel and its cargo.-

Neither do we agree with LOADSTARs argument that the limited liability theory should

be applied in this case. The doctrine of limited liability does not apply where there was

negligence on the part of the vessel owner or agent. LOADSTAR was at fault or negligent in not

maintaining a seaworthy vessel and in having allowed its vessel to sail despite knowledge of an

approaching typhoon. In any event, it did not sink because of any storm that may be deemed as

force majeure, inasmuch as the wind condition in the area where it sank was determined to be

moderate. Since it was remiss in the performance of its duties, LOADSTAR cannot hide behind

the limited liability doctrine to escape responsibility for the loss of the vessel and its cargo.

A stipulation reducing the one-year period for filing the action for recovery is null and

void and must be struck down.-

Neither is there merit to the contention that the claim in this case was barred by

prescription. MICs cause of action had not yet prescribed at the time it was concerned.

Inasmuch as neither the Civil Code nor the Code of Commerce states a specific prescriptive

period on the matter, the Carriage of Goods by Sea Act (COGSA)which provides for a one-

year period of limitation on claims for loss of, or damage to, cargoes sustained during transit

may be applied suppletorily to the case at bar. This one-year prescriptive period also applies to

the insurer of the goods. In this case, the period for filing the action for recovery has not yet

elapsed. Moreover, a stipulation reducing the one-year period is null and void; it must,

accordingly, be struck down.

Monarch insurance vs CA

Maritime Law; Limited Liability Rule; The shipowners or agents liability is merely co-

extensive with his interest in the vessel such that a total loss thereof results in its extinction.-

No vessel, no liability, expresses in a nutshell the limited liability rule. The shipowners or

agents liability is merely co-extensive with his interest in the vessel such that a total loss thereof

results in its extinction. The total destruction of the vessel extinguishes maritime liens because

there is no longer any res to which it can attach. This doctrine is based on the real and

hypothecary nature of maritime law which has its origin in the prevailing conditions of the


Page | 7

Bautista & Ortega

maritime trade and sea voyages during the medieval ages, attended by innumerable hazards

and perils. To offset against these adverse conditions and to encourage shipbuilding and

maritime commerce, it was deemed necessary to confine the liability of the owner or agent

arising from the operation of a ship to the vessel, equipment, and freight, or insurance, if any.

Exceptions to the limited liability rule.-

This is not to say, however, that the limited liability rule is without exceptions, namely: (1) where

the injury or death to a passenger is due either to the fault of the shipowner, or to the concurring

negligence of the shipowner and the captain; (2) where the vessel is insured; and (3) in

workmens compensation claims.

Issue of whether or not the M/V P. Aboitiz sank by reason of force majeure is not a novel

one for that question has already been the subject of conflicting pronouncements by the

Supreme Court.-

It should be pointed out that the issue of whether or not the M/V P. Aboitiz sank by

reason of force majeure is not a novel one for that question has already been the subject of

conflicting pronouncements by the Supreme Court. In Aboitiz Shipping Corporation v. Court of

Appeals, this Court approved the findings of the trial court and the appellate court that the

sinking of the M/V P. Aboitiz was not due to the waves caused by tropical storm Yoning but

due to the fault and negligence of Aboitiz, its master and crew. On the other hand, in the later

case of Country Bankers Insurance Corporation v. Court of Appeals, this Court issued a

Resolution on August 28, 1991 denying the petition for review on the ground that the Court of

Appeals committed no reversible error, thereby affirming and adopting as its own, the findings of

the Court of Appeals that force majeure had caused the M/V P. Aboitiz to founder.

Aboitiz shipping vs new india assurance, gr 156978

Doctrine of Limited Liability; An exception to the limited liability doctrine is when the

damage is due to the fault of the shipowner or to the concurrent negligence of the shipowner

and the captain.-

It bears stressing that this Court has variedly applied the doctrine of limited liability to the

same incidentthe sinking of M/V P. Aboitiz on October 31, 1980. Monarch, the latest ruling,

tried to settle the conflicting pronouncements of this Court relative to the sinking of M/V P.

Aboitiz. In Monarch, we said that the sinking of the vessel was not due to force majeure, but to

its unseaworthy condition. Therein, we found petitioner concurrently negligent with the captain

and crew. But the Court stressed that the circumstances therein still made the doctrine of limited

liability applicable. Our ruling in Monarch may appear inconsistent with the exception of the

limited liability doctrine, as explicitly stated in the earlier part of the Monarch decision. An

exception to the limited liability doctrine is when the damage is due to the fault of the shipowner

or to the concurrent negligence of the shipowner and the captain. In which case, the shipowner

shall be liable to the full-extent of the damage. We thus find it necessary to clarify now the

applicability here of the decision in Monarch.

From the nature of their business and for reasons of public policy, common carriers are

bound to observe extraordinary diligence over the goods they transport according to all the


Page | 8

Bautista & Ortega

circumstances of each case. In the event of loss, destruction or deterioration of the insured

goods, common carriers are responsible, unless they can prove that the loss, destruction or

deterioration was brought about by the causes specified in Article 1734 of the Civil Code. In all

other cases, common carriers are presumed to have been at fault or to have acted negligently,

unless they prove that they observed extraordinary diligence. Moreover, where the vessel is

found unseaworthy, the shipowner is also presumed to be negligent since it is tasked with the

maintenance of its vessel. Though this duty can be delegated, still, the shipowner must exercise

close supervision over its men.

In the present case, petitioner has the burden of showing that it exercised extraordinary

diligence in the transport of the goods it had on board in order to invoke the limited liability

doctrine. Differently put, to limit its liability to the amount of the insurance proceeds, petitioner

has the burden of proving that the unseaworthiness of its vessel was not due to its fault or

negligence. Considering the evidence presented and the circumstances obtaining in this case,

we find that petitioner failed to discharge this burden. It initially attributed the sinking to the

typhoon and relied on the BMI findings that it was not at fault. However, both the trial and the

appellate courts, in this case, found that the sinking was not due to the typhoon but to its

unseaworthiness. Evidence on record showed that the weather was moderate when the vessel

sank. These factual findings of the Court of Appeals, affirming those of the trial court are not to

be disturbed on appeal, but must be accorded great weight. These findings are conclusive not

only on the parties but on this Court as well.

In contrast, the findings of the BMI are not deemed always binding on the courts.

Besides, exoneration of the vessels officers and crew by the BMI merely concerns their

respective administrative liabilities. It does not in any way operate to absolve the common

carrier from its civil liabilities arising from its failure to exercise extraordinary diligence, the

determination of which properly belongs to the courts.

Where the shipowner fails to overcome the presumption of negligence, the doctrine of

limited liability cannot be applied. Therefore, we agree with the appellate court in sustaining the

trial courts ruling that petitioner is liable for the total value of the lost cargo.

Doctrine of inscrutable fault; doctrine of last clear chance n/a in maritime collision

Williams vs yangco, 27 phil 68 1914

COLLISION DUE TO NEGLIGENCE; LIABILITY OF OWNERS.-

The steamer Subic collided with the launch Euclid in the Bay of Manila, as a result of

which the Euclid went to the bottom. The findings of record disclosed that the officers on both

boats were negligent in the performance of their duties at the time of the accident, and that both

vessels were to blame for the disaster. Held, That the owner of the launch Euclid has no cause

of action against the owner of the steamer Subic.

The rule of liability for damages resulting from maritime collisions in this jurisdiction is to

be found in the provisions of section 3, title 4, book III of the Code of Commerce, article 827 of

which is a? follows: "If both vessels may be blamed for the collision, each one shall be liable for


Page | 9

Bautista & Ortega

its own damages, and both shall be jointly responsible for the loss and damage suffered by their

cargoes."

Without deciding whether in any case the doctrine of "the last clear chance" should be

recognized in this jurisdiction: Held, That upon the facts disclosed by the record in

Bill of Lading

Telengtan bros v. ca 236 scra 617 1994

A bill of lading operates both as a receipt and a contract.-

Now a bill of lading is both a receipt and a contract. As a contract, its terms and

conditions are conclusive on the parties, including the consignee. What we said in one case

mutatis mutandis applies to this case: A bill of lading operates both as a receipt and a contract. .

. . . As a contract, it names the contracting parties which include the consignee, fixes the route,

destination, freight rate or charges, and stipulates the rights and obligations assumed by the

parties . . . . By receiving the bill of lading, Davao Parts and Services, Inc. assented to the terms

of the consignment contained therein, and became bound thereby, so far as the conditions

named are reasonable in the eyes of the law. Since neither appellant nor appellee alleges that

any provision therein is contrary to law, morals, good customs, public policy or public order

and indeed we found nonethe validity of the Bill of Lading must be sustained and the

provisions therein properly applies to resolve the conflict between the parties.

Petitioners argument that it is not bound by the bill of lading issued by K-Line because it

is a contract of adhesion, whose terms as set forth at the back are in small prints and are hardly

readable, is without merit

Petitioner cannot be held liable for demurrage starting June 27, 1979 on the 10

containers which arrived on the SS Far East Friendship because the delay in obtaining release

of the goods was not due to its fault. The evidence shows that because the manifest issued by

the respondent K-Line, through the Smith, Bell Co., stated only 10 containers, whereas the bill

of lading also issued by the K-Line showed there were 12 containers, the Bureau of Customs

refused to give an entry permit to petitioner. For this reason, petitioners broker, the IBC, had to

see the respondents agent (Smith, Bell Co.) on June 22, 1979 but the latter did not immediately

do something to correct the manifest. Smith, Bell Co. was asked to amend the manifest, but it

refused to do so on the ground that this would violate the law. It was only on June 29, 1979 that

it thought of adding instead a footnote to indicate that two other container vansto account for

a total of 12 container vans consigned to petitionerhad been loaded on the other vessel SS

Hangang Glory.


Page | 10

Bautista & Ortega

Kenghua paper products vs ca, gr 116863

A bill of lading serves two functions. First, it is a receipt for the goods shipped. Second, it

is a contract by which three parties, namely, the shipper, the carrier, and the consignee

undertake specific responsibilities and assume stipulated obligations. A bill of lading delivered

and accepted constitutes the contract of carriage even though not signed, because the

(a)cceptance of a paper containing the terms of a proposed contract generally constitutes an

acceptance of the contract and of all of its terms and conditions of which the acceptor has actual

or constructive notice. In a nutshell, the acceptance of a bill of lading by the shipper and the

consignee, with full knowledge of its contents, gives rise to the presumption that the same was a

perfected and binding contract.

In the case at bar, both lower courts held that the bill of lading was a valid and perfected

contract between the shipper (Ho Kee), the consignee (Petitioner Keng Hua), and the carrier

(Private Respondent Sea-Land). Section 17 of the bill of lading provided that the shipper and

the consignee were liable for the payment of demurrage charges for the failure to discharge the

containerized shipment beyond the grace period allowed by tariff rules. Applying said

stipulation, both lower courts found petitioner liable.

3 Petitioners reliance on the Notice of Refused or On Hand Freight, as proof of its non

acceptance of the bill of lading, is of no consequence. Said notice was not written by petitioner;

it was sent by private respondent to petitioner in November 1982, or four months after petitioner

received the bill of lading. If the notice has any legal significance at all, it is to highlight

petitioners prolonged failure to object to the bill of lading. Contrary to petitioners contention, the

notice and the letter supportnot beliethe findings of the two lower courts that the bill of

lading was impliedly accepted by petitioner.

Averages

American home assurance vs ca 208 scra 343 1992

The law of the country to which the goods are to be transported governs the liability of

the common carrier in case of their loss, destruction or deterioration.-

This issue has been resolved by this Court in National Development Co. v. C.A. (164

SCRA 593 [1988]; citing Eastern Shipping Lines, Inc. v. I.A.C., 150 SCRA 469, 470 [1987]

where it was held that the law of the country to which the goods are to be transported governs

the liability of the common carrier in case of their loss, destruction or deterioration. (Article

1753, Civil Code). Thus, for cargoes transported to the Philippines as in the case at bar, the

liability of the carrier is governed primarily by the Civil Code and in all matters not regulated by

said Code, the rights and obligations of common carrier shall be governed by the Code of

Commerce and by special laws.

The Court held further that under Article 1733 of the Civil Code, 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 passengers transported by them

according to all circumstances of each case. Thus, under Article 1735 of the same Code, in all

cases other than those mentioned in Article 1734 thereof, the common carrier shall be


Page | 11

Bautista & Ortega

presumed to have been at fault or to have acted negligently, unless it proves that it has

observed the extraordinary diligence required by law.

But more importantly, the Court ruled that common carriers cannot limit their liability for

injury or loss of goods where such injury or loss was caused by its own negligence. Otherwise

stated, the law on averages under the Code of Commerce cannot be applied in determining

liability where there is negligence.

Philippine home assurance vs ca gr 106999

On the issue of whether or not respondent court committed an error in concluding that

the expenses incurred in saving the cargo are considered general average, we rule in the

affirmative. As a rule, general or gross averages include all damages and expenses which are

deliberately caused in order to save the vessel, its cargo, or both at the same time, from a real

and known risk.

While the instant case may technically fall within the purview of the said provision, the

formalities prescribed under Articles 813 and 814 of the Code of Commerce in order to incur the

expenses and cause the damage corresponding to gross average were not complied with.

Consequently, respondent ESLIs claim for contribution from the consignees of the cargo at the

time of the occurrence of the average turns to naught. Prescinding from the foregoing premises,

it indubitably follows that the cargo consignees cannot be made liable to respondent carrier for

additional freight and salvage charges. Consequently, respondent carrier must refund to herein

petitioner the amount it paid under protest for additional freight and salvage charges in behalf of

the consignees.

Salvage distinguished from towage

Barrios vs go thong, gr l-17192

Salvage Requisites.-

Three elements are necessary to a valid salvage claim, namely

(1) a marine peril

(2) service voluntarily rendered when not required as an existing duty or from a special

contract,

(3) success in whole or in part or that the service rendered contributed to such success.

There being an express provision of law (Art. 2142, Civil Code) applicable to the

relationship created in this case, that is, that of a quasi-contract of towage where the crew is not

entitled to compensation separate from that of the vessel, there is no occasion to resort to

equitable considerations.

As the vessel owner had expressly waived its claim for compensation for the towage

service rendered to defendant, it is clear that plaintiff, whose right if at all depends upon and not

separate from the interest of his employer, is not entitled to payment for such towage service.


Page | 12

Bautista & Ortega

Where the contract created is one for towage, only the owner of the towing vessel, to the

exclusion of the crew of the said vessel, may be entitled to remuneration.

Plaintiffs service to defendant can be considered as a quasi-contract of towage

because in consenting to plaintiffs offer to tow the vessel, defendant thereby impliedly entered

into a juridical relation of towage with the owner of the towing vessel, captained by plaintiff.

The circumstances that although the defendants vessel was in a helpless condition due

to engine failure, it did not drift too far from the place where it was, that the weather was fair,

clear, and good, that there were only ripples on the sea which was quite smooth, that there was

moonlight, that although said vessel was drifting towards the open sea, there was no danger of

its floundering or being stranded as it was far from any island or rocks, and its anchor could be

released to prevent such occurrence, all show that there was no marine peril, and the vessel

was not a quasi-derelict, as to warrant a valid salvage claim for the towing of the vessel

Meaning of the term LOSS

E.eelser inc vs ca, gr l-6517

Clause 18 of the bill of lading in question provided that owner should not be liable for

loss or damage of cargo unless written notice thereof was given to the carrier within 30 days

after receipt of the goods. However, section 3 of the Carriage of Goods by Sea Act provides that

even if a notice of loss or damage is not given as required, "that fact shall not affect or prejudice

the right of the shipper to bring suit within one year after the delivery of the goods." Which of

these two provisions should prevail? Held: Clause 18 must of necessity yield to the provisions of

the Carriage of Goods by Sea Act in view of the proviso contained in the same Act which says:

"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 * * * or lessening such liability

otherwise than as provided in this Act, shall be null and void and of no effect." (Section 3.) This

means that

A carrier can only be discharged from liability in respect of loss or damage if the suit is

not brought within one year after the delivery of the goods or the date when the goods should

have been delivered.

Granting arguendo that at the time the Carriage of Goods by Sea Act of 1936 was

accepted and adopted by the Philippine Government, the Philippines was still a territory or

possession of the United States and therefore the trade between the two countries was not a

foreign trade, still said Act is applicable to the present case it appearing that the parties have

expressly agreed to make and incorporate the provisions of said Act as an integral part of their

contract of carriage. This is an exception to the rule regarding the applicability of said Act.

Ang vs American steamship gr l-22491

Carriage of Goods by Sea, Act; Meaning of loss.-

As defined in Article 1189 of the New Civil Code and as applied to paragraph 4, Section

3(6) of the Carriage of Goods by Sea Act, loss contemplates merely a situation where no

delivery at all was made by the shipper of the goods because the same had perished, gone out


Page | 13

Bautista & Ortega

of commerce, or disappeared in such a way that their existence is unknown or they cannot be

recovered. It does not include a situation where there was indeed deliverybut delivery to the

wrong person, or a misdelivery. Nondelivery should be distinguished from misdelivery (Tan Pho

vs. Hassamal Dalamal, 67 Phil. 555, 557).

Mitsuiosk lines vs ca gr 119571

Loss refers to the deterioration or disappearance of goods.-

Loss refers to the deterioration or disappearance of goods. As defined in the Civil Code

and as applied to Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act, loss

contemplates merely a situation where no delivery at all was made by the shipper of the goods

because the same had perished, gone out of commerce, or disappeared in such a way that their

existence is unknown or they cannot be recovered.

In the case at bar, there is neither deterioration nor disappearance nor destruction of

goods caused by the carriers breach of contract. Whatever reduction there may have been in

the value of the goods is not due to their deterioration or disappearance because they had been

damaged in transit.

Indeed, what is in issue in this petition is not the liability of petitioner for its handling of

goods as provided by 3(6) of the COGSA, but its liability under its contract of carriage with

private respondent as covered by laws of more general application. Precisely, the question

before the trial court is not the particular sense of damages as it refers to the physical loss or

damage of a shippers goods as specifically covered by 3(6) of COGSA but petitioners

potential liability for the damages it has caused in the general sense and, as such, the matter is

governed by the Civil Code, the Code of Commerce and COGSA, for the breach of its contract

of carriage with private respondent.

Period of Prescription of action

Yek tong Lin fire vs APL, gr l-11081

Appeal from an order of the Court of First Instance of Manila dismissing the complaint

filed in this action on the ground of prescription. Plaintiff-appellant claims that defendant-

appellee is not allowed to traverse the allegations contained in the complaint but must proceed

upon the hypothetical assumption that all the allegations therein are true. The rule requiring a

party moving for dismissal to admit or assume the allegations of the complaint is applicable

when the ground for the motion to dismiss is that the complaint does not state facts sufficient to

constitute a cause of action (Rule 8, section 1 [f]), and not when the ground is prescription of

action, which special defense is based not on facts appearing in the complaint but on new

matter not disclosed in the complaint. The present motion to dismiss traverses no allegation of

the complaint; it sets up as new matter that the goods in question arrived in Manila on July 17,

1952, on which point the complaint has avoided making a statement to avoid a fatal objection.

Plaintiff-appellant claims that no evidence was submitted to support this allegation; but the same

does not appear to have been denied by plaintiff-appellant. This failure to deny can be

interpreted as admission. Besides, courts can take judicial notice of the fact that a vessel

leaving Japan on June 18, 1952, arrived Manila by July 17, 1952. Plaintiff-appellant argues also


Page | 14

Bautista & Ortega

that the court erred in not considering its action suspended by the extrajudicial demand which

took place, according to defendant's own motion to dismiss, on August 22, 1952. This Court has

already held in a case governed by the Carriage of Goods by Sea Act that the general

provisions of the Code of Civil Procedure on prescription should not be made to apply. (Chua

Kuy vs. Everett Steamship Corp., 93 Phil., 207; 50 Off. Gaz., [1], 159.) In such a case the

general provisions of the new Civil Code (Article 1155) cannot be made to apply, as such

application would have the effect of extending the one-year

Union carbide vs manila railroad, gr l-277798

The one-year period within which the consignee should sue the carrier is computed from

the delivery of the goods or the date when the goods should have been delivered.

The sensible and practical interpretation is that delivery within the meaning of section

3(6) of the Carriage of Goods by Sea Law means delivery to the arrastre operator. That delivery

is evidenced by tally sheets which show whether the goods were landed in good order or in bad

order, a fact which the consignee or shipper can easily ascertain through the customs broker.

To use as basis for computing the one-year period the delivery to the consignee would be

unrealistic and might generate confusion between the loss or damage sustained by the goods

while in the carriers custody and the loss or damage caused to the goods while in the arrastre

operators possession.

Section 3(6) adheres to the common-law rule that the duty imposed upon water carriers

was merely to transport from wharf to wharf and that the carrier was not bound to deliver the

goods at the warehouse of the consignee. The common-law requirements as to the proper

delivery of goods by water carrier apply only when customs regulations at the port of destination

do not otherwise provide. The delivery must be in accordance with the usages of the port in

order that such delivery would discharge the carrier of responsibility.

The action against the arrastre operator to enforce liability for loss of the cargo or

damage thereto should be filed within one year from the date of the discharge of the goods or

from the date when the claim for the value of such goods has been rejected or denied by the

arrastre operator. However, before such action can be filed a condition precedent should be

complied with and that is, that a claim (provisional or final) shall have been previously filed with

arrastre operator within fifteen days from the date of the discharge of the last package from the

carrying vessel.

Having complied with the condition precedent for the filing of a claim within the fifteen-

day period, the claimant could file the court action within one year, either from December 19,

1961 or from December 19, 1962. This second date is regarded as the expiration of the period

within which the arrastre operator should have acted on the claim. In other words, the claimant

or consignee has a two-year prescriptive period, counted from the date of the discharge of the

goods, within which to file the action in the event that the arrastre contractor has not rejected

nor admitted liability.

Dole Philippines vs maritime co gr. L-61352


Page | 15

Bautista & Ortega

These arguments might merit weightier consideration were it not for the fact that the

question has already received a definitive answer, adverse to the position taken by Dole, in The

Yek Tong Lin Fire Marine Insurance Co., Ltd. vs. American President Lines, Inc. There, in a

parallel factual situation, where suit to recover for damage to cargo shipped by vessel from

Tokyo to Manila was filed more than two years after the consignee's receipt of the cargo, this

Court rejected the contention that an extrajudicial demand tolled the prescriptive period provided

for in the Carriage of Goods by Sea Act.

Moreover, no different result would obtain even if the Court were to accept the

proposition that a written extrajudicial demand does toll prescription under the Carriage of

Goods by Sea Act. The demand in this instance would be the claim for damage filed by Dole

with Maritime on May 4, 1972. The effect of that demand would have been to renew the one-

year prescriptive period from the date of its making. Stated otherwise, under Dole's theory,

when its claim was received by Maritime, the one-year prescriptive period was interrupted

"tolled" would be the more precise termand began to run anew from May 4, 1972, affording

Dole another period of one (1) year counted from that date within which to institute action on its

claim for damage. Unfortunately, Dole let the new period lapse without filing action. It instituted

Civil Case No. 91043 only on June 11, 1973, more than one month after that period had expired

and its right of action had prescribed.

Dole's contention that the prescriptive period "*** remained tolled as of May 4, 1972 ***

(and that) in legal contemplation *** (the) case (Civil Case No. 96353) was filed on January

6,1975 *** well within the one-year prescriptive period in Sec. 3(6) of the Carriage of Goods by

Sea Act," equates tolling with indefinite suspension. It is clearly fallacious and merits no

consideration.

Mayer steel pipe corp vs ca, gr 124050

Insurance; Carriage of Goods by Sea Act; Prescription; Under Section 3(6) of the Carriage

of Goods by Sea Act, only the carriers liability is extinguished if no suit is brought within one

year.-

Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship

shall be discharged from all liability for loss or damage to the goods if no suit is filed within one

year after delivery of the goods or the date when they should have been delivered. Under this

provision, only the carriers liability is extinguished if no suit is brought within one year. But the

liability of the insurer is not extinguished because the insurers liability is based not on the

contract of carriage but on the contract of insurance. A close reading of the law reveals that the

Carriage of Goods by Sea Act governs the relationship between the carrier on the one hand and

the shipper, the consignee and/or the insurer on the other hand. It defines the obligations of the

carrier under the contract of carriage. It does not, however, affect the relationship between the

shipper and the insurer. The latter case is governed by the Insurance Code.

An all risks insurance policy covers all kinds of loss other than those due to willful and

fraudulent act of the insured.-

An insurance contract is a contract whereby one party, for a consideration known as

the premium, agrees to indemnify another for loss or damage which he may suffer from a


Page | 16

Bautista & Ortega

specified peril. An all risks insurance policy covers all kinds of loss other than those due to

willful and fraudulent act of the insured. Thus, when private respondents issued the all risks

policies to petitioner Mayer, they bound themselves to indemnify the latter in case of loss or

damage to the goods insured. Such obligation prescribes in ten years, in accordance with

Article 1144 of the New Civil Code.

Ruling in Filipino Merchants should apply only to suits against the carrier filed either by the

shipper, the consignee or the insurer.-

The ruling in Filipino Merchants should apply only to suits against the carrier filed

either by the shipper, the consignee or the insurer. When the court said in Filipino Merchants

that Section 3(6) of the Carriage of Goods by Sea Act applies to the insurer, it meant that the

insurer, like the shipper, may no longer file a claim against the carrier beyond the one-year

period provided in the law. But it does not mean that the shipper may no longer file a claim

against the insurer because the basis of the insurers liability is the insurance contract.

Limitation on Carriers liability for shipped goods under COGSA

Philippine charter insurance corporation vs Neptune orient lines gr 145044

Mercantile Law; Carriage of Goods by Sea Act; The rights and obligations of respondent

common carrier are governed by the provision of the Civil Code, and the Carriage of Goods by

Sea Act (COGSA), which is a special law, applies suppletorily.Since the subject cargoes were

lost while being transported by respondent common carrier from Hong Kong to the Philippines,

Philippine law applies pursuant to the Civil Code which provides: 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. Art. 1766. In all matters not regulated by this Code,

the rights and obligations of common carriers shall be governed by the Code of Commerce and

by special laws. The rights and obligations of respondent common carrier are thus governed by

the provisions of the Civil Code, and the COGSA, which is a special law, applies suppletorily

Public market not a public service or utility

Chamber of Filipino retailers vs villegas 44 scra 406

Municipal Corporations; Power to increase market stall fees; Republic Act 2264; Effect

thereof.-

Assuming, ad arguendo, that under its section 18 (cc) the Manila Charter only authorizes

the City of Manila to charge reasonable fees for the use of public markets, in an amount

sufficient to cover the cost of supervision, maintenance and regulation, still the power was

broadened by the subsequent Republic Act 2264 (the so-called Local Autonomy Act) section 2

of which grants all chartered cities, municipalities and municipal districts authority to impose

municipal license taxes or fees upon persons engaged in any occupation or business or

exercising privileges in chartered cities, municipalities or municipal districts.

Municipal Corporations; Power to increase market stall fees; Republic Act 2264; Market

vendors engaged in occupation or business.-


Page | 17

Bautista & Ortega

Persons selling in public markets are engaged therein in occupation or business (in the

sense of engaging in human activity for profit), it becomes plain that the city can impose at

present upon market vendors or retailers fees designed to obtain revenue for the city, above or

in addition to the amount needed to reimburse it for strictly supervisory services.

Municipal Corporations; Exercise of proprietary functions.-

There is a clear difference between the license to sell within the premises of public

markets and the privilege of doing business at a definite location or stall in said market for a

definite period of time. The permit to exercise the latter privilege partakes of the nature of a

lease of the area occupied by the market stall, which is patrimonial property of the City of

Manila. The renting by the City of its private property is a patrimonial activity or proprietary

function, and in this sphere, the citylike any private owner, it is free to charge such sums as it

may deem best, regardless of the reasonableness of the amount fixed, for the prospective

lessees are free to enter into the corresponding contract of lease, if they are agreeable to the

terms thereof, or, otherwise, not enter into such contract.

Municipal Corporations; Public markets not among those over which Public Service

Commission has jurisdiction.-

It is contended that Manila cannot fix fees for the use of its public markets without the

approval of the Public Service Commission. While a public market is a public service or utility, it

is not one that falls under the jurisdiction of the Public Service Commission, not being ejusdem

generis with those public services enumerated in section 13 (b) of the Public Service Act over

which the Commission has jurisdiction. Hence, the approval by the Commission of the fees fixed

by the City of Manila for the use of its markets is not covered by section 20 of the Public Service

Act.

Operation of public utilities vs ownership of facilities

Tatad vs Garcia gr no 114222

Public Utilities; Administrative Law; What constitutes a public utility is not their ownership but

their use to serve the public.-

The phrasing of the question is erroneous; it is loaded. What private respondent owns

are the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant,

not a public utility. While a franchise is needed to operate these facilities to serve the public,

they do not by themselves constitute a public utility. What constitutes a public utility is not their

ownership but their use to serve the public (Iloilo Ice Cold Storage Co. v. Public Service Board,

44 Phil. 551, 557-558 [1923]).

Constitutional Law; Franchise; Public Utilities; Constitution does not require a franchise

before one can own the facilities needed to operate a public utility so long as it does not operate

them to serve the public.-

The Constitution, in no uncertain terms, requires a franchise for the operation of a public

utility. However, it does not require a franchise before one can own the facilities needed to

operate a public utility so long as it does not operate them to serve the public.


Page | 18

Bautista & Ortega

Constitutional Law; Franchise; Public Utilities; There is distinction between operation of a

public utility and ownership of the facilities used to serve the public.-

In law, there is a clear distinction between the operation of a public utility and the

ownership of the facilities and equipment used to serve the public.

Constitutional Law; Franchise; Public Utilities; Ownership Defined.-

Ownership is defined as a relation in law by virtue of which a thing pertaining to one

person is completely subjected to his will in everything not prohibited by law or the concurrence

with the rights of another (Tolentino, II Commentaries and Jurisprudence on the Civil Code of

the Philippines 45 [1992]).

The exercise of the rights encompassed in ownership is limited by law so that a property

cannot be operated and used to serve the public as a public utility unless the operator has a

franchise. The operation of a rail system as a public utility includes the transportation of

passengers from one point to another point, their loading and unloading at designated places

and the movement of the trains at prescheduled times (cf. Arizona Eastern R.R. Co. v. J.A.

Matthews, 20 Ariz 282, 180 P. 159, 7 A.L.R. 1149 [1919]; United States Fire Ins. Co. v. Northern

P.R. Co., 30 Wash 2d. 722, 193 P. 2d 868, 2 A.L.R. 2d 1065 [1948]).

Right to operate a public utility may exist independently and separately from the ownership of

the facilities thereof.-

The right to operate a public utility may exist independently and separately from the

ownership of the facilities thereof. One can own said facilities without operating them as a public

utility, or conversely, one may operate a public utility without owning the facilities used to serve

the public. The devotion of property to serve the public may be done by the owner or by the

person in control thereof who may not necessarily be the owner thereof.

Mere owner and lessor of the facilities used by a public utility is not a public utility.-

Indeed, a mere owner and lessor of the facilities used by a public utility is not a public

utility (Providence and W.R. Co. v. United States, 46 F. 2d 149, 152 [1930]; Chippewa Power

Co. v. Railroad Commission of Wisconsin, 205 N.W. 900, 903, 188 Wis. 246 [1925]; Ellis v.

Interstate Commerce Commission, Ill. 35 S. Ct. 645, 646, 237 U.S. 434, 59 L. Ed. 1036 [1914]).

Neither are owners of tank, refrigerator, wine, poultry and beer cars who supply cars under

contract to railroad companies considered as public utilities (Crystal Car Line v. State Tax

Commission, 174 P. 2d 984, 987 [1946]).

Mere formation of public utility corporation does not ipso facto characterize the corporation as

one operating a public utility. It becomes so when it applies for a franchise, certificate or any

other form of authorization for that purpose.-

Even the mere formation of a public utility corporation does not ipso facto characterize

the corporation as one operating a public utility. The moment for determining the requisite

Filipino nationality is when the entity applies for a franchise, certificate or any other form of

authorization for that purpose (People v. Quasha, 93 Phil. 333 [1953]).


Page | 19

Bautista & Ortega

Build-Operate-Transfer (BOT) Scheme; Build-operate-and-transfer (BOT) scheme is defined

as one where the contractor undertakes the construction and financing of an infrastructure

facility, and operates and maintains the same.-

The BOT scheme is expressly defined as one where the contractor undertakes the

construction and financing of an infrastructure facility, and operates and maintains the same.

The contractor operates the facility for a fixed period during which it may recover its expenses

and investment in the project plus a reasonable rate of return thereon. After the expiration of the

agreed term, the contractor transfers the ownership and operation of the project to the

government.

Actual operator as agent of registered operator

Vargas vs langcay 6 scra 174

Public Utilities; Registered Owner/Operator of Passenger Vehicles; Liability for damages

incurred as consequence of in-juries.The registered owner/operator of a passenger vehicle is

jointly and severally liable with the driver for damages incurred by passengers or third persons

as a consequence of injuries (or death) sustained in the operation of said vehicles. (Montoya vs.

Ignacio, L-5868, Dec. 29, 1953; Timbol vs. Osias, L-7547, April 30, 1955; Vda. de Medina vs.

Cresencia, L-8194, July 11, 1956; Necesito vs. Paras, L-10605, June 30, 1955; Erezo

Direct and primary liability of operator of record; Actual owner and employer deemed

agent of operator of record.Regardless of who the actual owner of a vehicle is, the operator of

record continues to be the operator of the vehicles as regards the public and third persons, and

as such is directly and primarily responsible for the consequences incident to its operation, so

that, in contemplation of law, such owner/operator of record is the employer of the driver, the

actual operator and employer being considered merely as his agent. [Vargas vs. Langcay, 6

SCRA 174(1962)]

Liability of registered owner of motor vehicle

Erezo vs jepte gr l-9603

REGISTERED OWNER AS ACTUAL OWNER.-

In dealing with vehicles registered under the Public Service Law, the public has the right

to assume or presume that the registered owner is the actual owner thereof, for it would be

difficult for the Public to enforce the actions that they may have for injuries caused to them by

the vehicles being negligently operated if the public should be required to prove who the actual

owner is.

REGISTERED OWNER PRIMARILY RESPONSIBLE FOR INJURIES.-

The registered owner of any vehicle, even if not used for a public service, should

primarily be responsible to the public or to third persons for injuries caused the latter while the

vehicle is being driven on the highways or streets.

REGISTRATION REQUIRED AS PERMISSION TO USE PUBLIC HIGHWAY.-


Page | 20

Bautista & Ortega

Registration is required not to make said registration the operative act by which

ownership in vehicles is transferred as in land registration cases, because the administrative

proceeding of registration

The main aim of motor vehicle registration is to identify the owner so that if any accident

happens, or that any damage or injury is caused, by the vehicle on the public highways,

responsibility therefor can be fixed on a definite individual, the registered owner.

REGISTERED OWNER NOT ALLOWED TO PROVE ACTUAL AND REAL OWNER OF

VEHICLE; POLICY OF THE LAW.-

The law does not allow the registered owner to prove who the actual owner is; the law,

with its aim and policy in mind, does not relieve him directly of the responsibility that the law

fixes and places upon him as an incident or consequence of registration. Were the registered

owner allowed to evade responsibility by proving who the supposed transferee or owner is, it

would be easy for him by collusion with others or otherwise, to escape said responsibility and

transfer the same to an indefinite person, or to one who possesses no property with which to

respond financially for the damage or injury done.

REGISTRATION AS MEANS TO IDENTIFY PERSON CAUSING INJURY OR DAMAGE.-

A victim of recklessness on the public highways is usually without means to discover or

identify the person actually causing the injury or damage. He has no means other than by a

recourse to the registration in the Motor Vehicles Office to determine who is the owner. The

protection that the law aims to extend to him would become illusory were the registered owner

given the opportunity to escape liability by disproving his ownership. If the policy of the law is to

be enforced and carried out, the registered owner should not be allowed to prove the contrary to

the prejudice of the person injured, that is to prove that a third person or another has become

the owner, so that he may thereby be relieved of the responsibility to the injured person.

MOTOR VEHICLE REGISTERED OWNER AS PRIMARILY RESPONSIBLE; RIGHT OF

REIMBURSEMENT.-

The registered owner of a motor vehicle is primarily responsible for the damage caused

to the vehicle of the plaintiff-appellee but the registered owner has a right to be indemnified by

the real or actual owner of the amount that he may be required to pay as damage for the injury

caused to the plaintiff-appellant.

Liability of leasing company for loss, damage or injury caused to a third party by a motor

vehicle leased from the former

Pci leasing and finance vs UCPB gr 162267

Registered owner of a motor vehicle may be held civilly liable with the negligent driver either

subsidiarily or solidarily.-

For damage or injuries arising out of negligence in the operation of a motor vehicle, the

registered owner may be held civilly liable with the negligent driver either 1) subsidiarily, if the

aggrieved party seeks relief based on a delict or crime under Articles 100 and 103 of the


Page | 21

Bautista & Ortega

Revised Penal Code; or 2) solidarily, if the complainant seeks relief based on a quasi-delict

under Articles 2176 and 2180 of the Civil Code. It is the option of the plaintiff whether to waive

completely the filing of the civil action, or institute it with the criminal action, or file it separately

or independently of a criminal action; his only limitation is that he cannot recover damages twice

for the same act or omission of the defendant. The failure to register a lease, sale, transfer or

encumbrance, should not benefit the parties responsible, to the prejudice of innocent victims.-

The rule remains the same: a sale, lease, or financial lease, for that matter, that is not

registered with the Land Transportation Office, still does not bind third persons who are

aggrieved in tortious incidents, for the latter need only to rely on the public registration of a

motor vehicle as conclusive evidence of ownership. A lease such as the one involved in the

instant case is an encumbrance in contemplation of law, which needs to be registered in order

for it to bind third parties. Under this policy, the evil sought to be avoided is the exacerbation of

the suffering of victims of tragic vehicular accidents in not being able to identify a guilty party. A

contrary ruling will not serve the ends of justice. The failure to register a lease, sale, transfer or

encumbrance, should not benefit the parties responsible, to the prejudice of innocent victims.

RA No. 8556 does not supersede or repeal the law on compulsory motor vehicle registration.-

The new law, R.A. No. 8556, notwithstanding developments in foreign jurisdictions, does

not supersede or repeal the law on compulsory motor vehicle registration. No part of the law

expressly repeals Section 5(a) and (e) of R.A. No. 4136, as amended, otherwise known as the

Land Transportation and Traffic Code.

In contemplation of law, the registered owner of a motor vehicle is the employer of its driver,

with the actual operator and employer, such as a lessee, being considered as merely the

owners agent.-

In case a separate civil action is filed, the long-standing principle is that the registered

owner of a motor vehicle is primarily and directly responsible for the consequences of its

operation, including the negligence of the driver, with respect to the public and all third persons.

In contemplation of law, the registered owner of a motor vehicle is the employer of its driver,

with the actual operator and employer, such as a lessee, being considered as merely the

owners agent. This being the case, even if a sale has been executed before a tortious incident,

the sale, if unregistered, has no effect as to the right of the public and third persons to recover

from the registered owner. The public has the right to conclusively presume that the registered

owner is the real owner, and may sue accordingly.

Authority of NTC to cancel CPCs of radio broadcasting companies

Divinagracia vs consolidated broadcasting system gr 162272

Administrative Law; National Telecommunications Commission; Broadcast stations are still

required to obtain a legislative franchise.-

Associated Communications makes clear that presently broadcast stations are still

required to obtain a legislative franchise, as they have been so since the passage of the Radio

Control Act in 1931. By virtue of this requirement, the broadcast industry falls within the ambit of

Section 11, Article XII of the 1987 Constitution, the one constitutional provision concerned with


Page | 22

Bautista & Ortega

the grant of franchises in the Philippines. The requirement of a legislative franchise likewise

differentiates the Philippine broadcast industry from that in America, where there is no need to

secure a franchise from the U.S. Congress.

The special civil action of quo warranto is a prerogative writ by which the Government can call

upon any person to show by what warrant he holds a public office or exercises a public

franchise.-

The special civil action of quo warranto is a prerogative writ by which the Government

can callupon any person to show by what warrant he holds a public office or exercises a public

franchise. It is settled that [t]he determination of the right to the exercise of a franchise, or

whether the right to enjoy such privilege has been forfeited by non-user, is more properly the

subject of the prerogative writ of quo warranto, the right to assert which, as a rule, belongs to

the State upon complaint or otherwise, the reason being that the abuse of a franchise is a

public wrong and not a private injury. A forfeiture of a franchise will have to be declared in a

direct proceeding for the purpose brought by the State because a franchise is granted by law

and its unlawful exercise is primarily a concern of Government. Quo warranto is specifically

available as a remedy if it is thought that a government corporation has offended against its

corporate charter or misused its franchise.

Allowing the National Telecommunications Commission (NTC) to countermand State policy by

revoking respondents vested legal right to operate broadcast stations unduly gives to a mere

administrative agency veto power over the implementation of the law and the enforcement of

especially vested legal rights.-

Allowing the NTC to countermand State policy by revoking respondents vested legal

right to operate broadcast stations unduly gives to a mere administrative agency veto power

over the implementation of the law and the enforcement of especially vested legal rights. That

concern would not arise if Congress had similarly empowered the NTC with the power to revoke

a franchisees right to operate broadcast stations. But as earlier stated, there is no such

expression in the law, and by presuming such right the Court will be acting contrary to the stated

State interest as expressed in respondents legislative franchises.

We earlier replicated the various functions of the NTC, as established by E.O. No. 546.

One can readily notice that even as the NTC is vested with the power to issue CPCs to

broadcast stations, it is not expressly vested with the power to cancel such CPCs, or otherwise

empowered to prevent broadcast stations with duly issued franchises and CPCs from operating

radio or television stations.

The restrictions imposed by an administrative agency such as the National Telecommunications

Commission (NTC) on broadcast media franchisees will have to pass not only the test of

constitutionality, but also the test of authority and legitimacy.-

The restrictions enacted by Congress on broadcast media franchisees have to pass the

mettle of constitutionality. On the other hand, the restrictions imposed by an administrative

agency such as the NTC on broadcast media franchisees will have to pass not only the test of

constitutionality, but also the test of authority and legitimacy, i.e.,whether such restrictions have

been imposed in the exercise of duly delegated legislative powers from Congress. If the


Page | 23

Bautista & Ortega

restriction or sanction imposed by the administrative agency cannot trace its origin from

legislative delegation, whether it is by virtue of a specific grant or from valid delegation of rule-

making power to the administrative agency, then the action of such administrative agency

cannot be sustained. The life and authority of an administrative agency emanates solely from an

Act of Congress, and its facuties confined within the parameters set by the legislative branch of

government.

The legal obligation of the National Telecommunications Commission (NTC) once Congress has

established a legislative franchise for a broadcast media station is to facilitate the operation by

the franchisee of its broadcast stations.-

The complexities of our dual franchise/license regime for broadcast media should be

understood within the context of separation of powers. The right of a particular entity to

broadcast over the airwaves is established by lawi.e., the legislative franchiseand

determined by Congress, the branch of government tasked with the creation of rights and

obligations. As with all other laws passed by Congress, the function of the executive branch of

government, to which the NTC belongs, is the implementation of the law. In broad theory, the

legal obligation of the NTC once Congress has established a legislative franchise for a

broadcast media station is to facilitate the operation by the franchisee of its broadcast stations.

However, since the public administration of the airwaves is a requisite for the operation of a

franchise and is moreover a highly technical function, Congress has delegated to the NTC the

task of administration over the broadcast spectrum, including the determination of available

bandwidths and the allocation of such available bandwidths among the various legislative

franchisees. The licensing power of the NTC thus arises from the necessary delegation by

Congress of legislative power geared towards the orderly exercise by franchisees of the rights

granted them by Congress.

After securing their legislative franchises, stations are required to obtain Certificates of Public

Convenience (CPCs) from the National Telecommunications Commission (NTC) before they

can operate their radio or television broadcasting systems.-

Broadcast and television stations are required to obtain a legislative franchise, a

requirement imposed by the Radio Control Act and affirmed by ourruling in Associated

Broadcasting. After securing their legislative franchises, stations are required to obtain CPCs

from the NTC before they can operate their radio or television broadcasting systems. Such

requirement while traceable also to the Radio Control Act, currently finds its basis in E.O. No.

546, the law establishing the NTC.