Laws of Transportation/Travel in the Philippines (Atty. Jun Villegas)

A Contract of Transportation is a contract whereby a person, natural or juridical, obligates himself to transport persons or goods, or both, from one place to another, by land, water or air, for a price or compensation.

A Contract of Transportation is imbued with public interest, and that is the reason why it is considered a public utility. As a public utility, the State has the power to regulate it for public welfare and the common good.

The Constitution mandates that the investment in public utility must comply with the equity requirement of 60/40 Rule (60% Filipino-owned and 40% any nationality).

In the Philippines, there are two kinds of carrier

1.       Common  carriers – are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers, or goods or both, by land, water or air, for compensation, offering their services to the public indiscriminately (Art. 1732 NCC)

Its distinctive characteristic is that it undertakes to carry ALL people indiscriminately (Exceptions – Public safety and Public convenience).

The governing law is the Civil Code of the Philippines (RA 386)

The entities engaged in this business are sole proprietorships, partnerships and corporations.

The best evidence/proof of the contract is passenger ticket (for passengers) and bill of lading (for goods).

All Common Carriers are required to obtain a  Certificate of Public Convenience/ Certificate of Franchise or Authorization (considered a mere privilege and not a property right) for them to operate.

In case of a negligent or tortious act,  the liability of the Common Carrier can be enforced  either through:

i.                     Culpa Contractual / Breach of Contract

ii.                   Culpa Aquiliana /Tort / Quasi-Delict

iii.                  Culpa Criminal / Criminal case  (e.g. for physical injuries)

2.       The other carrier is a Private Carrier. It is one  who, without being engaged in the business of carrying as a public employment, undertakes to deliver goods or passenger for a compensation (charter agreement).

DISTINCTIONS	COMMON CARRIER	PRIVATE CARRIER
Obligations to carry	Bound to carry ALL who choose to employ it	CAN CHOOSE the persons whom it may contract
Diligence required	Extraordinary diligence	Ordinary diligence

The parties to the contract of carriage are the following, namely:

1.       Carrier – the party who agrees to transport

2.       Shipper – the party whose goods are transported

3.       Passenger – the person object of the transportation

4.       Consignee – the person to whom the goods are sent

“Common carriers, from the nature of their business and for reasons of public policy, are bound to observe EXTRAORDINARY DILIGENCE in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.”  (Article 1733, NCC)

“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 transported by them, and this liability lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier, for transportation until the same are delivered, actually or constructively, by the carrier to the person who has a right to receive them. (Sarkies Tours Philippines, Inc. v. CA, 280 SCRA 59, [1997])  

     In the Carriage of Passengers –

“A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all circumstances. (Article 1755, NCC)

The duration of Exercise of Extraordinary Diligence -

a)      In Carriage of Passengers –

“The victim becomes a passenger from the moment he steps on the platform of the bus, and entitled to all rights as such, including the observance by the common carrier of extraordinary diligence.” (Dangwa Trans. vs. CA, 202 SCRA 574)

                        “The relationship ends when the passenger after reaching the destination safely alighted and had the reasonable opportunity to leave the common carrier’s premises, which includes the time to look for his baggage and claim them. (Aboitiz Shipping vs. CA, 179 SCRA 95; La Mallorca vs. CA, 17 SCRA 739)

b)      In Carriage of Cargoes –

It starts from the time the cargo is delivered to the terminal of the bus company and accepted for carriage by the common carrier. xxx xxx xxx.

The contract of conveyance ends when the shipper or consignee takes delivery of the cargo at the point of destination. If no immediate taking of delivery takes place after the arrival of the cargo at the point of destination, the duty of the common carrier to observe extraordinary diligence terminates after the lapse of a reasonable time from the moment of the common carrier notifies the shipper or consignee of the arrival of the cargo at the point of destination and the latter fails or refuses to take delivery. After the lapse of such a reasonable time, the common carrier shall act merely as a depositary or bailee with the duty to observe ordinary diligence.

                                               

        c) Responsibility for acts of employees - 

            (Respondeat Superior or Master and Servant Rule or Command Responsibility) -     CC  is liable for the death of or injuries to passengers through the negligence or         wilful acts of the former’s employees.

                                 
       d) Responsibility for acts of strangers and co-passengers – CC is liable if the CC’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission (Art. 1763 NCC)  

       e) Duty of passenger – passenger must observe the diligence of a good father of a family to avoid injury to himself (Art. 1761 NCC) 

     f) Effect of contributory negligence – it does not bar recovery of damages for his death or injuries, if the proximate cause is the negligence of the common carrier, but the amount of damages shall be equitably reduced (Art. 1762 NCC)

                                 

Damages recoverable from Common Carriers (MENTAL)

a. Actual or Compensatory damages – are adequate compensation for pecuniary loss suffered by a person as he has proven (e.g. – medicine, hospitalization expenses).

                                               

b. Moral damages – include physical suffering, mental anguish, fright, seriouos anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.

                               

G.R. – Moral damages are not recoverable in breach of contract of carriage

                                                Exceptions –

a.       CC acted fraudulently or in bad faith, even if death does not result

b.      Where the  mishap results in the death of passenger

c. Exemplary or Corrective damages – are imposed, by way of example or correction for the public good, in addition to actual or compensatory, moral, temperate or liquidated damages.

                                               

d. Nominal damages – are adjudicated in order that a right of a person, which has been violated or invaded by the CC, may be vindicated or recognized, and not for the purpose of indemnifying such person for any loss suffered by him.

e. Temperate or Moderate damages – which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot from the nature of the case, be proven with certainty.

f. Liquidated damages – are those agreed upon by the parties to a contract, to be paid in case of breach thereof.

                                                g. Attorney’s fees and Interest

Regulation of Transportation Industry

               

    Department of Transportation and Communications (DOTC)

1.       Land Transportation

a.       Land Transportation Office (LTO)

b.      Land Transportation and Franchising and Regulatory Board (LTFRB)

2.       Water Transportation

a.       Maritime Industry Authority (MARINA) – in charge of the promotion, development, regulation and supervision of water transport.

3.       Air Transportation

a.       Civil Aviation Authority of the Philippines (CAAP) – regulates economic aspect of air transportation. It has general supervision and control over air carriers. It fixes and determines rates, fares or charges for any service in connection with air commerce. It issues the Certificate of Public Convenience and Necessity (CPCN).

b.      Air Transportation Office (ATO) – is responsible for the technical and operational phase of civil aviation matters. It investigates accidents involving aircraft and reports to the CAB.