Transportation Laws (Prelims) 2nd bacth

Case Digests
1. First Philippine Industrial Corp. v. CA, Paterno Tac-an, Bantangas City, and Adoracion Arellano (treasurer of Batangas)
G.R. No. 125948 December 29, 1998
Martinez, J.
FACTS:
FPIC grantee of a pipeline concession under Republic Act No. 387, as amended, to contract, install and operate oil pipelines
It applied for a mayors permit with the Office of the Mayor of Batangas City. Before the permit could be issued, it was required by the
City Treasurer to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government Code. It paid the tax under
protest.
It filed a complaint for tax refund alleging that 1) the imposition and collection of the business tax on its gross receipts violates Section
133 of the Local Government Code which grants tax exemption to common carriers; 2) the authority of cities to impose and collect a tax on the
gross receipts of contractors and independent contractors under Sec. 141 (e) and 151 does not include the authority to collect such taxes on
transportation contractors for, as defined under Sec. 131 (h), the term contractors excludes transportation contractors; and, 3) the City Treasurer
illegally and erroneously imposed and collected the said tax, thus meriting the immediate refund of the tax paid.
ISSUES: 1. WON FPIC is a common carrier; 2. WON it is exempted from paying the taxes required by the City Treasurer
HELD: 1. Yes. FPIC is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It
undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for
compensation.
common carrier - holds himself out to the public as engaged in the business of transporting persons or property from place to place, for
compensation, offering his services to the public generally (see also Art. 1732)
test for determining whether a party is a common carrier of goods:
a. engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the
transportation of goods for person generally as a business and not as a casual occupation;
b. undertakes to carry goods of the kind to which his business is confined
c. undertakes to carry by the method by which his business is conducted and over his established roads
d. transportation is for hire
common service coincides with public service
public service includes every person that now or hereafter may own, operate. manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common
carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and
whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water
craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant,
canal, irrigation system gas, electric light heat and power, water supply and power petroleum, sewerage system, wire or wireless communications
systems, wire or wireless broadcasting stations and other similar public services (CA No. 1416, as amended, otherwise known as the Public Service
Act)
FPIC - considered a common carrier under Art. 86 of the Petroleum Act of the Philippines (RA 387), which provides that: Art. 86. Pipe line
concessionaire as common carrier. A pipe line shall have the preferential right to utilize installations for the transportation of petroleum owned by
him, but is obligated to utilize the remaining transportation capacity pro rata for the transportation of such other petroleum as may be offered by
others for transport, and to charge without discrimination such rates as may have been approved by the Secretary of Agriculture and Natural
Resources.
FPIC is also a public utility pursuant to Art. 7 of RA 387 which states that everything relating to the exploration for and exploitation of
petroleum . . . and everything relating to the manufacture, refining, storage, or transportation by special methods of petroleum, is hereby declared
to be a public utility
2. Yes. Legal basis is Section 133 (j), of the Local Government Code which provides that Unless otherwise provided herein, the exercise
of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: Taxes on the gross receipts of
transportation contractors and persons engaged in the transportation of passengers or freight by hire and common carriers by air, land or water,
except as provided in this Code.
Reason for the exception: to avoid duplication of tax
2. LOADSTAR SHIPPING CO., INC., Petitioner, vs. PIONEER ASIA INSURANCE CORP., Respondent.
G.R. No. 157481 January 24, 2006
Facts:
Petitioner Loadstar Shipping is the registered owner and operator of the vessel M/V Weasel. On June 6, 1984, it entered into a voyage-charter with
Northern Mindanao Transport Company, Inc. for the carriage of 65,000 bags of cement from Iligan City to Manila. The shipper was Iligan Cement
Corporation, while the consignee in Manila was Market Developers, Inc.
67,500 bags of cement were loaded on board M/V Weasel and stowed in the cargo holds for delivery to the consignee. Prior to the voyage, the
consignee insured the shipment of cement with respondent Pioneer Asia Insurance Corporation for P1,400,000, for which there was a marine policy
issued.
The vessel ran aground. Consequently, the entire shipment of cement was good as gone due to exposure to sea water. Petitioner thus failed to
deliver the goods to the consignee in Manila.
The consignee demanded from petitioner full reimbursement of the cost of the lost shipment. Petitioner refused to reimburse despite repeated
demands. The insurance company paid the consignee P1,400,000 plus an additional amount ofP500,000, the value of the lost shipment of cement.
In return, the consignee executed a Loss and Subrogation Receipt in favor of respondent concerning the latters subrogation rights against
petitioner.
Respondent filed a complaint against petitioner in the trial court for the recovery of the sum it paid. The trial court ruled in favor of the insurance
company.
Petitioners defense of force majeure was found bereft of factual basis. The RTC called attention to the PAG-ASA report that at the time of the
incident, tropical storm Asiang had moved away from the Philippines. Further, records showed that the sea and weather conditions in the area of

Hinubaan, Negros Occidental from 8:00 p.m. of June 24, 1984 to 8:00 a.m. the next day were slight and smooth. Thus, the trial court concluded
that the cause of the loss was not tropical storm Asiang or any other force majeure, but gross negligence of petitioner.
Petitioner appealed to the Court of Appeals. It affirmed the RTC Decision with modification that Loadstar shall only pay the sum of 10% of the total
claim for attorneys fees and litigation expenses.
Hence this petition.
Issue:
1. WON petitioner is a common or a private carrier?
2. In either case, did petitioner exercise the required diligence: the extraordinary diligence of a common carrier or the ordinary diligence of a
private carrier?
Held: common carrier, No. Petition denied.
Ratio:
Petitioner is a corporation engaged in the business of transporting cargo by water and for compensation, offering its services indiscriminately to the
public. Thus, without doubt, it is a common carrier. The voyage-charter agreement between petitioner and Northern Mindanao Transport
Company, Inc. did not in any way convert the common carrier into a private carrier.
Conformably, petitioner remains a common carrier notwithstanding the existence of the charter agreement with the Northern Mindanao Transport
Company, Inc. since the said charter is limited to the ship only and does not involve both the vessel and its crew. As elucidated in Planters
Products, this charter is only a voyage-charter, not a bareboat charter.
It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar
as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and
control of the ship, although her holds may, for the moment, be the property of the charterer.
As a common carrier, petitioner is required to observe extraordinary diligence in the vigilance over the goods it transports. When the goods placed
in its care are lost, petitioner is presumed to have been at fault or to have acted negligently. Petitioner therefore has the burden of proving that it
observed extraordinary diligence in order to avoid responsibility for the lost cargo.
Article 1734 enumerates the instances when a carrier might be exempt from liability for the loss of the goods. These are:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity
Petitioner claims that the loss of the goods was due to a fortuitous event under paragraph 1. Yet, its claim is not substantiated. On the contrary,
there was evidence that the loss of the entire shipment of cement was due to the gross negligence of petitioner.
Records show that in the evening of June 24, 1984, the sea and weather conditions in the vicinity of Negros Occidental were calm. The records
reveal that petitioner took a shortcut route, instead of the usual route, which exposed the voyage to unexpected hazard. Petitioner has only itself to
blame for its misjudgment.

3. NOSTRADAMUS VILLANUEVA, petitioner,

vs. PRISCILLA R. DOMINGO and LEANDRO LUIS R. DOMINGO, respondents.
G.R. No. 144274 September 20, 2004
Villanueva vs. Domingo, 438 SCRA 485 (2004)
FACTS:
Priscilla Domingo is the registered owner of a silver Mitsubishi Lancer Car model 1980 with Plate No. NDW 781 with co-respondent Leandro Luis
Domingo as authorized driver. Petitioner Nostradamus Villanueva was then the registered owner of a green Mitsubishi Lancer bearing Plate No.
PHK 201.
On Oct. 22, 1991, 9:45 PM, following a green traffic light, Priscilla Domingo silver Lancer then driven by Leandro Domingo was cruising the middle
lane of South Superhighway at moderate speed when suddenly, a green Mitsubishi Lancer with Plate No. PHK 201 driven by Renato Dela Cruz
Ocfemia darted from Vito Cruz St. towards the South Superhighway directly into the path of Domingos car thereby hitting and bumping its left front
portion. As a result of the impact, NDW 781 hit two parked vehicles at the roadside, the second hitting another car parked in front of it.
Traffic accident report found Ocfemia driving with expired license and positive for alcoholic breath. Manila Asst. Prosecutor Pascua recommended
filing of information for reckless imprudence resulting to damage to property and physical injuries. The original complaint was amended twice: first
impleading Auto Palace Car Exchange as commercial agent and/or buyer-seller and second, impleading Albert Jaucian as principal defendant doing
business under the name and style of Auto Palace Car Exchange. Except Ocfemia, all defendants filed separate answers to the complaint.
Petitioner Nostradamus Villanueva claimed that he was no longer the owner of the car at the time of the mishap because it was swapped with a
Pajero owned by Albert Jaucian/Auto Palace Car Exchange. Linda Gonzales declared that her presence at the scene of the accident was upon the
request of the actual owner of the Mitsubishi Lancer PHK 201, Albert Jaucian for whom she had been working as agent/seller. Auto Palace Car
Exchange represented by Albert Jaucian claimed that he was not the registered owner of the car. Moreover, it could not be held subsidiarily liable as
employer of Ocfemia because the latter was off-duty as utility employee at the time of the incident. Neither was Ocfemia performing a duty related
to his employment.
RTC found petitioner Villanueva liable and ordered him to pay respondent actual, moral and exemplary damages plus appearance and attorneys
fees. In conformity with equity and the ruling in First Malayan Lending and Finance Corp. vs CA, Albert Jaucian is hereby ordered to indemnify
Villanueva for whatever amount the latter is hereby ordered to pay under the judgment.
CA upheld trial courts decision but deleted the award for appearance and attorneys fees as the same was not justified in the body of the decision.
ISSUE:
May the registered owner of a motor vehicle be held liable for damages arising from a vehicular accident involving his motor vehicle while being
operated by the employee of its buyer without the latters consent and knowledge?
RULING:

YES, the registered owner of any vehicle is directly and primarily responsible for the public and third persons while it is being operated. The
rationale behind such doctrine was explained way back in 1957 in Erezo vs. Jepte.
The principle upon which this doctrine is based is that 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. How
would the public or third persons know against whom to enforce their rights in case of subsequent transfers of the vehicles? We do not imply by his
doctrine, however, that the registered owner may not recover whatever amount he had paid by virtue of his liability to third persons from the
person to whom he had actually sold, assigned or conveyed the vehicle.
Under the same principle 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. The members of the Court are in
agreement that the defendant-appellant should be held liable to plaintiff-appellee for the injuries occasioned to the latter because of the negligence
of the driver, even if the defendant-appellant was no longer the owner of the vehicle at the time of the damage because he had previously sold it to
another.
A registered owner who has already sold or transferred a vehicle has the recourse to a third-party complaint, in the same action brought against
him to recover for the damage or injury done, against the vendee or transferee of the vehicle. The inconvenience of the suit is no justification for
relieving him of liability; said inconvenience is the price he pays for failure to comply with the registration that the law demands and requires.
In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily responsible for the damage caused to the vehicle of the
plaintiff-appellee, but he (defendant-appellant) 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.
PETITION DENIED.

DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y MALECDAN, petitioners, vs. COURT OF
APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO CUDLAMAT, MARRIETA CUDIAMAT,
NORMA CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late Pedrito
Cudiamat represented by Inocencia Cudiamat, respondents.
4.

G.R. No. 95582 October 7, 1991

Lessons Applicable: Actionable Document (Transportation)
Laws Applicable: Art. 1733, Art. 1755

FACTS:

May 13, 1985: Theodore M. Lardizabal was driving a passenger bus belonging to Dangwa Transportation Co. Inc. (Dangwa)

The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro alighted

Pedro Cudiamat fell from the platform of the bus when it suddenly accelerated forward

Pedro was ran over by the rear right tires of the vehicle

Theodore first brought his other passengers and cargo to their respective destinationsbefore bringing Pedro to Lepanto Hospital where he
expired

Private respondents filed a complaint for damages against Dangwa for the death of Pedro Cudiamat

Dangwa: observed and continued to observe the extraordinary diligence required in the operation of the co. and the supervision of the
employees even as they are not absolute insurers of the public at large

RTC: in favour of Dangwa holding Pedrito as negligent and his negligence was the cause of his death but still ordered to pay in equity P 10,000
to the heirs of Pedrito

CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual and compensatory damages and cost of the suit

ISSUE: W/N Dangwa should be held liable for the negligence of its driver Theodore
HELD: YES. CA affirmed.

A public utility once it stops, is in effect making a continuous offer to bus riders (EVEN when moving as long as it is still slow in motion)

Duty of the driver: do NOT make acts that would have the effect of increasing peril to a passenger while he is attempting to board the same

Premature acceleration of the bus in this case = breach of duty

Stepping and standing on the platform of the bus is already considered a passenger and is entitled all the rights and protection pertaining to
such a contractual relation

Duty extends to boarding and alighting

GR: By contract of carriage, the carrier assumes the express obligation to transport the passenger to his destination safely and observe
extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by the passenger is right away
attributable to the fault or negligence of the carrier

EX: carrier to prove that it has exercised extraordinary diligence as prescribed in Art. 1733 and 1755 of the Civil Code

Failure to immediately bring Pedrito to the hospital despite his serious condition = patent and incontrovertible proof of their negligence

Hospital was in Bunk 56

1st proceeded to Bunk 70 to allow a passenger (who later called the family of Pedrito on his own will) to alight and deliver a refrigerator

In tort, actual damages is based on net earnings