Dominador Raymundo v Luneta Motor Co.

| Malcolm | 1933
FACTS:
Nicanor de Guzman, signing as Guzco Transit, purchased trucks from Luneta Motor Co.
by issuing PNs guaranteed by a chattel mortgage on several trucks
De Guzman failed to pay and so Luneta brought a suit. A writ of attachment was issued
and consequently, 3 Certificates of Public Convenience were attached. Two (2) of these
certificates were sold to Luneta since it was the highest bidder. Approval of this sale
was prayed for before the PSC
However, 9 days after the said attachment, De Guzman sold the same certificates to
Raymundo. Approval of this sale was also sought from the PSC
PSC approved the sale at public auction in favor of Luneta and disapproved the sale
made to Raymundo
However, Raymundo was contending that franchises can not be the subject of
attachment and sale by garnishment
The CFI sustained the right of Luneta to attachment and ganishment
ISSUE: WoN CPC may be the object of execution and garnishment sale
DECISION: YES. CPCs secured by public service operators are liable to execution, and
the PSC is authorized to approve the transfer of the CPC to the execution creditor
The general rule under the Code of Civil Procedure is that property, both real and
personal, or any interest therein of the judgment debtor, not exempt by lawshall be
liable to execution
The statutory exemptions provided in the same Code do not include franchises or CPC.
HOWEVER, our laws do not contain specific provisions on the right to attach CPC
ON THE OTHER HAND, jurisprudence provides for a test in determining WoN property
can be attached and sold upon execution, i.e., whether the judgment debtor has
such a beneficial interest therein that he can sell or otherwise dispose of it for
value
Applying the said test, it was held that CPCs are valuable assets since these are the
cornerstones on which the business of bus transportation is built. They are even more
valuable than ordinary properties, taking into consideration that they are not granted
to every one who applies for them but only to those who undertake to furnish
satisfactory and convenient service to the public
MOREOVER, it is a growing practice in the PSC to permit the alienation of CPC and in so
doing approval has been given to the sale through foreclosure proceedings of the CPC
to third parties

Lara vs. Valencia (GR L-9907, 30 June 1958)

En Banc, Bautista Angelo (J): 7 concur
Facts:
Demetrio Lara went to the lumber concession of Brigido R. Valencia in Parang,
Cotabato uponinstructions of his chief in order to classify the logs of defendant which
were then ready to be exported and tobe loaded on a ship anchored in the port of
Parang. It took Lara 6 days to do his work during which he contracted malaria
fever and for that reason he evinced a desire to return immediately to Davao. At that
time,there was no available bus that could take him back to Davao and so he requested

Valencia if he could takehim in his own pick-up. Valencia agreed and, together with Lara,
other passengers tagged along, most of themwere employees of the Government. Valencia
merely accommodated them and did not charge them any feefor the service. It was
also their understanding that upon reaching barrio Samoay, the passengers would alightand
transfer to a bus that regularly makes the trip to Davao but unfortunately there was none
available at thetime and so the same passengers, including Lara, again requested Valencia
to drive them to Davao. Valenciaagain accommodated them and upon reaching Km.
96, Lara accidentally fell suffering fatal injuries.An action for damages was brought by
Lourdes J. Lara, et. al. against Valencia in the CFI of Davao for thedeath of one
Demetrio Lara, Sr. allegedly caused by the negligent act of Valencia. Valencia denied
the chargeof negligence and set up certain affirmative defenses and a counterclaim. The
court after hearing rendered judgment ordering Valencia to pay Lara, et. al. the
following amount: (a) P10,000 as moral damages; (b)P3,000 as exemplary
damages; and (c) P1,000 as attorneys fees, in addition to the costs of action.
Bothparties appealed to the Supreme Court because the damages claimed in
the complaint exceed the sum of P50,000.The Supreme Court reversed the decision
appealed from, without pronouncement as to costs.
1.Lara, et. al. merely
accommodation passaengers who paid
nothing
for
s e r v i c e ; D e g r e e o f diligence required of owner of vehicle
The deceased, as well as his companions who rode in the pick-up
o f V a l e n c i a , w e r e m e r e l y accommodation passengers who paid nothing for the
service and so they can be considered as invited guestswithin the meaning of the law. As
accommodation passengers or invited guests, Valencia as owner and driverof the pick-up
owes to them merely the duty to exercise reasonable care so that they may
be transported safelyto their destination. Thus, The rule is established by the weight of
authority
that
the
owner
or
operator
of
ana u t o m o b i l e o w e s t h e
duty to an invited guest to exercise reasonable care in its
o p e r a t i o n , a n d n o t unreasonably to expose him to danger and injury by increasing
the hazard of travel. This rule, as frequentlys t a t e d b y t h e c o u r t s , i s t h a t a n
owner of an automobile owes a guest the duty to exercise
o r d i n a r y o r reasonable care to avoid injuring him. Since one riding in an automobile is
no less a guest because he askedfor the privilege of doing so, the same
obligation of care is imposed upon the driver as in the case of one expressly
invited to ride Valencia, therefore, is only required to observe ordinary care, and is not in
dutybound to exercise extraordinary diligence as required of a common carrier by
Philippine law.
2.Valencia had
done
what
a reasonable prudent
man would have done
Valencia was not in duty bound to take the deceased in his own pick- up to
Davao because from Parang to Cotabato there was a line of transportation that
regularly makes trips for the public, and if Valenciaagreed to take the deceased in his own
car, it was only to accommodate him considering his feverish conditionand his request that
he be so accommodated. The passengers who rode in the pick-up of Valencia took
theirrespective seats therein at their own choice and not upon indication of Valencia with
the particularity thatValencia invited the deceased to sit with him in the front seat
but which invitation the deceased declined. Thereason for this can only be attributed to
his desire to be at the back so that he could sit on a bag and travel in
ar e c l i n i n g p o s i t i o n b e c a u s e s u c h w a s m o r e c o n v e n i e n t f o r h i m d u
e t o h i s f e v e r i s h c o n d i t i o n . A l l t h e circumstances thereof clearly indicate
that Valencia had done what a reasonable prudent man would havedone under
the circumstances.
3.Finding as to speed not supported by evidence; else,
speed not unreasonable

The finding of the trial court that the pick-up was running at more than 40 kilometers per
hour is notsupported by evidence. This is a mere surmise made by the trial court
considering the time the pick- up leftbarrio Samoay and the time the accident occurred in
relation to the distance covered by the pick-up. And evenif this is correct, still we say that
such speed is not unreasonable considering that they were travelling on anational road and the
traffic then was not heavy.
4.Injury to passenger has been proximately caused by o
wn negligence
The incident may be attributed to lack of care on the part of the deceased considering
that the pick-upwas open and he was then in crouching position. Indeed the law provides
that A passenger must observe thediligence of a good father of a family to avoid
injury to himself (Article 1761, new Civil Code), whichmeans that if the
injury to the passenger has been proximately caused by his own negligence,
the carrier cannot be held liable.
5.Unfortunate happening due to unforeseen accid
ent
There is every reason to believe that the unfortunate happening was only
due to an unforeseen accident caused by the fact at the time the deceased was half
asleep and must have fallen from the pick-up when it ran into some stones causing it to
jerk considering that the road was then bumpy, rough and full ofstones. All things
considered, the accident occurred not due to the negligence of Valencia but
to circumstancesbeyond his control and so he should be exempt from liability.
SAN PABLO VS. PANTRANCO (153 SCRA 199)Facts: The Pantranco South Express, Inc.,
hereinafter referred to asPANTRANCO is a domestic corporation engaged in the land
transportationbusiness with PUB service for passengers and freight and various
certificatesfor public conveniences (CPC) to operate passenger buses from MetroManila to
Bicol Region and Eastern Samar. On March 27,1980 PANTRANCOthrough its counsel wrote to
Maritime Industry Authority (MARINA) requestingauthority to lease/purchase a vessel
named MN "Black Double" "to be usedfor its project to operate a ferryboat service from
Matnog, Sorsogon and Allen,Samar that will provide service to company buses and freight
trucks that haveto cross San Bernardo Strait. In a reply of April 29,1981 PANTRANCO
wasinformed by MARINA that it cannot give due course to the request. PANTRANCO
nevertheless acquired the vessel MN "Black Double" onMay 27, 1981 for P3 Million pesos. It
wrote the Chairman of the Board ofTransportation (BOT) through its counsel, that it
proposes to operate a ferryservice to carry its passenger buses and freight trucks between
Allen andMatnog in connection with its trips to Tacloban City. PANTRANCO claims thatit
can operate a ferry service in connection with its franchise for bus operationin the
highway from Pasay City to Tacloban City "for the purpose ofcontinuing the highway, which
is interrupted by a small body of water, the saidproposed ferry operation is merely a
necessary and incidental service to itsmain service and obligation of transporting its
passengers from Pasay City toTacloban City. Such being the case there is no need to obtain
a separatecertificate for public convenience to operate a ferry service between Allen
andMatnog to cater exclusively to its passenger buses and freight trucks. Without awaiting
action on its request PANTRANCO started to operatesaid ferry service. Acting Chairman
Jose C. Campos, Jr. of BOT orderedPANTRANCO not to operate its vessel until the
application for hearing onOct. 1, 1981. In another order BOT enjoined PANTRANCO from
operating theMN "Black Double" otherwise it will be cited to show cause why its CPCshould
not be suspended or the pending application denied.TRANSPORTATION LAW: Lawrence
Jeffrey Delfin, Flerida Emma Manglicmot, Mark Joseph Mupas, 10Melanie Pascua, Gilbert
Ricaforte, Renato Segubiense Jr., Katleen Grace Serrano, Mary Jane Timbang
11. Epitacio San Pablo (now represented by his heirs) and CardinalShipping Corporation
who are franchise holders of the ferry service in thisarea interposed their opposition. They
claim they adequately service thePANTRANCO by ferrying its buses, trucks and passengers.

BOT then askedthe legal opinion from the Minister of Justice whether or not a bus
companywith an existing CPC between Pasay City and Tacloban City may still berequired to
secure another certificate in order to operate a ferry servicebetween two terminals of a
small body of water. On October 20, 1981 thenMinister of Justice Ricardo Puno rendered
an opinion to the effect that thereis no need for bus operators to secure a separate CPC to
operate a ferryboatservice. Thus on October 23, 1981 the BOT rendered its decision
holding thatthe ferryboat service is part of its CPC to operate from Pasay to
Samar/Leyteby amending PANTRANCOs CPC so as to reflect the same. Cardinal Shipping
Corporation and the heirs of San Pablo filedseparate motions for reconsideration of said
decision and San Pablo filed asupplemental motion for reconsideration that were denied
by the BOT on July21, 1981. Hence, San Pablo filed the herein petition for review on
certiorariwith prayer for preliminary injunction seeking the revocation of said decision,and
pending consideration of the petition the issuance of a restraining orderor preliminary
injunction against the operation by PANTRANCO of said ferryserviceIssue: Whether or not
the ferry boat is a common carrier?Held: Considering the environmental circumstances of
the case, theconveyance of passengers, trucks and cargo from Matnog to Allen is
certainlynot a ferryboat service but a coastwise or interisland shipping service. Underno
circumstance can the sea between Matnog and Allen be considered acontinuation of the
highway. While a ferryboat service has been consideredas a continuation of the highway
when crossing rivers or even lakes, whichare small body of waters separating the land,
however, when as in this casethe two terminals, Matnog and Allen are separated by an
open sea it can notbe considered as a continuation of the highway. The contention of
private respondent PANTRANCO that its ferryservice operation is as a private carrier, not
as a common carrier for itsexclusive use in the ferrying of its passenger buses and cargo
trucks isabsurd. PANTRANCO does not deny that it charges its passengersseparately from
the charges for the bus trips and issues separate ticketswhenever they board the MN "Black
Double" that crosses Matnog to Allen.Nevertheless, considering that the authority granted
to PANTRANCO is tooperate a private ferry, it can still assert that it cannot be held to
account as acommon carrier towards its passengers and cargo. Such an anomaloussituation
that will jeopardize the safety and interests of its passengers and thecargo owners cannot
be allowed. Thus the Court holds that the water transport service between Matnogand
Allen is not a ferryboat service but a coastwise or interisland shippingservice. Before
private respondent may be issued a franchise or CPC for theoperation of the said service
as a common carrier, it must comply with theusual requirements of filing an application,
payment of the fees, publication,adducing evidence at a hearing and affording the
oppositors the opportunityto be heard, among others, as provided by law.TRANSPORTATION
LAW: Lawrence Jeffrey Delfin, Flerida Emma Manglicmot, Mark Joseph Mupas, 11Melanie
Pascua, Gilbert Ricaforte, Renato Segubiense Jr., Katleen Grace Serrano, Mary Jane
Timbang
12. E. DISTINCTIONS BETWEEN COMMON CARRIER AND PRIVATECARRIER Common Carrier
Private Carrier As to passengers Holds himself out for all people Contracts with particular
individuals indiscriminately. or groups only. As to required diligence Requires extraordinary
diligence. Requires only ordinary diligence. As to state regulation Subject to regulation.
Not subject to regulation. As to stipulation on limiting liability Parties may not agree on
limiting the Parties may agree on limiting the carriers liability except when provided
carriers liability, provided not by law. contrary to law, morals or good customs.
Presumption as to fault and negligence Presumption of fault or negligence No fault or
negligence is presumed. applies. As to laws applicable on damages Law on common
carriers. Law on obligations and contracts.F. GOVERNING/ APPLICABLE LAWA.
Transportation by Sea 1. Coastwise Civil Code (Arts.1732-1766) primary law Code of
Commerce suppletory law Note: Carriage of Goods by Sea Act inapplicable even if the
parties expressly provide for it. 2. Carriage from Foreign Ports To Philippine Ports Civil
Code primary law Code of Commerce all matters not regulated by the Civil Code.
Carriage of Goods by Sea Act (COGSA) suppletory to the Civil Code. 3. Carriage from

Philippine Ports To Foreign Ports-laws of the country to which the goods are to be
transported.B. Land Transportation a. Common Carriers Civil Code (Arts.1732-1766)
primary law Code of Commerce suppletory law b. Private Carriers Object merchandise
Code of Commerce primary law Civil Code suppletory lawC. Air
TransportationTRANSPORTATION LAW: Lawrence Jeffrey Delfin, Flerida Emma Manglicmot,
Mark Joseph Mupas, 12Melanie Pascua, Gilbert Ricaforte, Renato Segubiense Jr., Katleen
Grace Serrano, Mary Jane Timbang
13. 1. Domestic Transportation Civil Code Code of Commerce 2. International
Transportation Warsaw Convention While the Warsaw Convention has the force of law
in the Philippines, it does not have an exclusive enumeration of a carriers liability for
contractual breach or absolute limit of liability. It does not preclude the operation of the
Civil Code and other laws. The liability of the carrier for the loss, destruction or
deterioration of goods transported to the Philippines from a foreign country, is primarily
governed by the Civil Code not by the Warsaw Convention which applies only to simple loss
of baggage. There Is International Transportation When: 1. The place of departure and the
place of destination are within the territories of two high contracting parties, regardless
of whether or not there was a break in the transportation or transshipment. 2. The place
of departure and the place of destination are within the territory of a single contracting
party if there is an agreed stopping place within a territory subject to the sovereignty,
mandate or authority of another power, even though the power is not a party to the
convention. (Mapa v. CA, 275 SCRA [1997])High Contracting Parties Signatories to the
Warsaw Convention and those which subsequently adhered to it. In National Development
Co. vs. CA (164 SCRA 593). The law of thecountry to which the goods are to be
transported governs the liability of thecommon carrier in case of loss, destruction or
deterioration (Art. 1753, NCC)XXX The liability of the carrier is governed primarily by the
Civil Code and inall matters not regulated by the said Code, the rights and obligations
ofcommon carriers shall be governed by the code of Commence and by speciallaws (Art.
1766 NCC). Hence, the COGSA /a special law is merelysupppletory to the provisions of the
Civil Code. The place of destinationswhose law shall be deemed to be the governing
law in so far as the liability ofcommon carrier is concerned refers to the place of
ultimate destination notan agreed stopping place. This is particularly true in so far as
the warsawconvention used the term to determine the country where the suit against
theinternational carrier should be filled. (Santos III vs. NorthWest Orient Airlines,210 SCRA
256