University of the Philippines

COLLEGE OF LAW
Malcolm Hall, Diliman, Quezon City
TRANSPORTATION & PUBLIC UTILITIES
SCALED-DOWN SYLLABUS1
First Semester, AY 2020-2021
Prof. Alfredo R. Cabeza

Grading Criteria:

1. Recitation, Attendance - 30%

2. Quizzes, Reports, Etc. - 35%
3. Final Exams, Departmental Exams - 35%

Week 1 – 2 hours

PART ONE: TRANSPORTATION

I. GENERAL DISCUSSIONS

1. Definition (Contract of Transportation)

2. Relationship to a Public Utility

II. REGULATION OF THE TRANSPORTATION INDUSTRY

1. The Department of Transportation (DOTr, formerly,

DOTC), EO 125, Secs. 4 & 5 (as amended by EO 125-
A and RA No. 10844, Sec. 15); See also EO 292, Book
IV, Title XV

- Mirasol v. DPWH, G.R. No. 158793, June 8, 2006

- MMDA v. Viron Transit, Inc., G.R. No. 170656,
August 15, 2007

a. Air

(i) Civil Aviation Authority of the Phils., RA No.

9497 (2008), Secs. 4, 21, 24, 35

(ii) Civil Aeronautics Board, RA No. 776, as

amended, Secs. 5, 10 (A), (C); Secs. 11, 12

- PAL v. CAB, 270 SCRA 538

- Kuwait Airways v. PAL, G.R. No. 156087, May 8,
2009

1Based on the course syllabi of Profs. Nicholas Felix L. Ty, Dan P. Calica and Joseph
Emmanuel L. Angeles as well as other researches and experiential inputs.
 2

b. Land
(i) Land Transportation Office, E0 125-A, Secs. 9,
11, 13(a); Administrative Code of 1987, Title
XV, Sec. 9(1)

(ii) Land Transportation Franchising and

Regulatory Board, EO 202, Secs. 1, 2, 4, 5, 6, 7;
Administrative Code of 1987, Title XV, Secs. 15-
22

- KMU Labor Center v. Garcia, 239 SCRA 386

See also DOTC Department Order No. 2015-011

c. Water

(i) Maritime Industry Authority, EO 125, Sec. 14, as

amended by EO 125-A, Sec. 4. See also RA
No. 9295, Secs. 10 & 11, in relation to Sec. 8

Week 2 – 2 hours

A. COMMON CARRIERS
(Unless otherwise indicated, reference is to the New Civil
Code)

1. Important Laws

a) New Civil Code (NCC);

b) Code of Commerce & Special Laws
(Art. 1766, NCC);
c) Warsaw Convention (International
Transportation by Air); and
d) Carriage of Goods By Sea Act
(International Carriage by Sea).
e) Public Service Act (CA 146)

II. General Considerations

1. Concept of Common Carriers

- First Phil. Industrial Corp. v. CA, G.R. No.

125948, Dec. 29, 1998, 300 SCRA 661

2. Definition (Art. 1732)

- US v. Tan Piaco, 40 Phil 853 (1920)

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- Ruperto Santos v. Public Service

Commission, G.R. No. 26771, 23 Sept. 1927
- Loadstar Shipping Co., Inc. v. Pioneer Asia
Ins. Corp., G.R. No. 157481, 24 Jan. 2006
- Asia Lighterage & Shipping v. CA, 409 SCRA
340 (2003)

Week 3 – 2 hours

3. Relationship to a Public Utility

4. Tests of Common Carrier

- First Phil. Industrial Corp. v. CA, supra

5. Classes of Common Carriers

Arts. 1732, 1733, 1755

6. Nature of Franchise, Business, Power of State

to Regulate

Art. 1765

- PANTRANCO v. Public Service Commission,

70 Phil 221 (1940)
- Cogeo-Cubao Operators & Drivers’ Ass’n.
v. CA, G.R. No. 100727, March 18, 1992

7. Scope of Franchise

- San Pablo v. PANTRANCO, 153 SCRA 199

8. Nature and Basis of Liability

Art. 1733

- Cangco v. MRR, 38 Phil 768 (1918)

- Isaac v. A.L. Ammen, 101 Phil 1046 (1957)
- Phil. Rabbit v. IAC, 189 SCRA 159 (1990)
- LRTA v. Navidad, 397 SCRA 75 (2003)

9. Prior-Operator Rule

- Batangas Transportation v. Orlanes, 52

Phil 455

10. Kabit System

 4

- Lita Ents., Inc. v. Second Civil Cases

Division, 129 SCRA 79
- Teja v. IAC, 148 SCRA 347
- Lim v. CA, G.R. No. 125817, Jan. 16, 2002

11. Compared with Private Carrier

- Pereña v. Zarate, G.R. No. 157917,

Aug. 29, 2012, 679 SCRA 208

12. Private Nature; Rights and Obligations of

Parties
Inter se Arising from Transactions Relating to
Transportation

a) Absent a transportation contract

- Lara v. Valencia, 104 Phil 65

b) Liability of registered owner

- PCI Leasing v. UCPB Gen. Ins., 557 SCRA

141

Week 4 – 2 hours

III. Common Carriage of Goods

1. Liability and presumption of negligence

Arts. 1733, 1734, 1735

- Ynchausti Steamship Co. v. Dexter, 41 Phil

289
- Gacal v. PAL, G.R. No. 553000, 15 March
1990

2. Exemption from liability

(a) Natural Disaster

Arts. 1734 (1), 1739, 1740; Art. 361, Code of
Commerce

- Tan Chiong v. Inchausti, 22 Phil 153

- Martini v. Macondray, 39 Phil 934
- Eastern Shipping v. IAC, 150 SCRA 463

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

NCC
 5

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

1741

(d) Character of goods, etc.

Arts. 1734(4), 1742
Art. 366, Code of Commerce

- Government v. Ynchausti, 40 Phil 219

- Southern Lines v. CA, 4 SCRA 258

(e) Order of competent authority

Arts. 1734(5), 1743

- Ganzon v. CA, 161 SCRA 646

3. Duration of Extraordinary Responsibility

Arts. 1736 to 1738

- Compania Maritima v. Ins. Company,

12 SCRA 213
- APL v. Klepper, 110 Phil 243
- Nedlloyd Lijnen v. Glow Laks Ents., G.R.
No. 156330, November 19, 2014

4. Agreement Limiting Liability

(a) As to diligence required

Arts. 1744, 1745, 1751

(b) As to amount of liability

Arts. 1749, 1750

- Heacock v. Macondray, 42 Phil 205

- Pan Am v. IAC, 164 SCRA 268
- Cathay Pacific v. CA, 219 SCRA 520

Week 5 – 2 hours

(c) As to delay in delivery

- PAL v. CA, G.R. No. 119706, March 14, 1996

(d) Factor affecting agreement

Arts. 1746, 1747, 1748, 1751, 1752

5. Applicable Law in Foreign Trade

Art. 1753

6. Rules on Passenger Baggage

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Arts. 1754, 1998, 2000 to 2003

IV. Common Carriage of Passengers

1. Nature and extent of responsibility

Arts. 1733, 1755

- Necesito v. Paras, 104 Phil 75

- Sulpicio v. CA, 246 SCRA 229

2. Duration of responsibility

Cf. Art. 1736

- Cangco v. MRR, 38 Phil 767

- Bataclan v. Medina, 102 Phil 181
- PAL v. CA, 226 SCRA 423

3. Presumption of Negligence
Art. 1756

4. Force Majeure

- Bachelor Express v. CA, 188 SCRA 216

- Yobido v. CA, 281 SCRA 1

5. Limitation of Liability; validity of stipulations

Arts. 1757, 1758

6. Responsibility for acts of employees

Arts. 1759, 1760

- De Gillaco v. MRR, 97 Phil 884

- Maranan v. Perez, 20 SCRA 412

7. Responsibility for acts of strangers and co-

passengers
Art. 1763

- G.V. Florida Transport v. Heirs of Battung,

G.R. No. 208802, October 15, 2015

8. Duty of passenger; effect of contributory negli-

gence
Arts. 1761, 1762

Week 6 – 2 hours

V. Damages Recoverable from Common Carriers

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1. In general

2. Actual or compensatory
Arts. 2199, 2201, 2203, 1764, 2206

- Cariaga v. LTBCo. and MRR, 110 Phil 346

- Victory Liner v. Gammad, G.R. No. 159636,
November 25, 2004

3. Moral
Arts. 2217, 2216, 2219, 2220, 2206(3)

- Ortigas v. Lufthansa, 64 SCRA 610

- PAL v. Miano, 242 SCRA 235
- United Airlines v. CA, 357 SCRA 99
- Cathay Pacific v. Vasquez, 399 SCRA 207
- Air France v. Gillego, G.R. No. 165266,
December 15, 2010

4. Exemplary
Arts. 2229, 2232, 2233

- Mecenas v. CA, 180 SCRA 83 (1989)

5. Nominal, Temperate and Liquidated

Arts. 2221, 2224, 2226

- Saludo v. CA, 207 SCRA 498 (1992)

- Japan Airlines v. CA, 294 SCRA 19 (1998)
- Savellano v. NWA, 405 SCRA 416 (2003)

7. Attorney’s Fees and Interest

Arts. 2208, 2210

VI. Code of Commerce Provisions on Overland

Transportation

(Unless otherwise indicated, reference is to the Code

of Commerce)

A. Scope of Overland Transportation

B. Nature of Contract, Art. 349
C. Effect of the New Civil Code
Arts. 1766, 2270, NCC
D. Contract of Carriage
1. Bill of Lading

(a) Definition, Subject Matter, Art. 352

 8

(b) Form, Contents, Arts. 350, 351

(c) Function, Art. 353

2. Refusal to Transport, Art. 356

3. Doubtful Declaration of Contents, Art. 357
4. No Bill of Lading, Arts. 354, 51

E. Responsibility of the Carrier

1. When commenced, Art. 355
2. Route, Art. 359
3. Care of Goods, Arts. 361, 362
Arts. 1734, 1735, NCC
4. Delivery

(a) Condition of Goods, Arts. 363 to 367

(b) To Whom Delivery is Made, Art. 368
(c) When Made, Arts. 370, 358

F. Rights and Obligations of Shipper and/or Con-

signee

1. Right to Damages

(a) Condition Imposed on Right, Arts. 366, 357

(b) Amount of Damages for Loss, Art. 732; Art.
1744, NCC
(c) Amount of Damages for Delay, Art. 371(3)

2. Right to Abandon, Arts. 371, 360, 363, 365

3. Right to Change Consignment, Art. 360
4. Obligation to Pay Transportation Charges, Arts.
376; Art. 2241(9), NCC
5. Obligation to Return Bill of Lading, Art. 353(2)

F. Applicability of Provisions, Art. 379

Week 7 – 2 hours

VII. Admiralty and Maritime Commerce

A. Concept of Admiralty; Jurisdiction over admiralty

cases

Batas Pambansa Blg.129, Sec. 19 (3), Sec. 33 (1),

as amended by RA No. 7691

- International Harvester v. Aragon, 84 Phil

363
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B. Vessels

1. Meaning

- Lopez v. Duruelo, 52 Phil 229

2. Nature and Acquisition of Vessels

Arts. 573, 574, 583, 585; Art. 712, NCC

3. Registration; certificates issued; distinctions

RA No. 9295, Sec. 10(1)

Tariff and Customs Code, Secs. 802, et seq.

PD 761, as amended by PDs 1064, 1521

4. Significance of registration of transactions

affecting vessels

- Arroyo v. Yu, 54 Phil 511

C. Persons Participating in Maritime Commerce

1. Shipowners and Shipagents

Arts. 586 to 608; 618

- Standard Oil v. Castelo, 42 Phil 256

(a) Responsibilities and Liabilities

- Yu Con v. Ipil, 41 Phil 770

- Manila Steamship v. Abdulhaman, 100 Phil
32
- National Development Co. v. CA, G.R. No.
L-49407, August 19, 1988

(b) The Doctrine of Limited Liability

Art. 587

- Yangco v. Laserna, 73 Phil 330

- Abueg v. San Diego, 77 Phil 730
- Aboitiz Shipping v. Gen. Accident Fire and
Life Assurance Corp., Ltd., 217 SCRA 359

(c) Specific Rights and Prerogatives

Arts. 575, 593, 594, 596, 601

2. Captains and Masters

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(a) Qualifications and Licensing

RA No. 5173, Sec. 3

Art. 609

(b) Powers and Duties

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

- Inter Orient v. NLRC, 235 SCRA 269

(c) Prohibited Acts and Transactions

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

Week 8 – 2 hours

3. Other Officers and Crew

(a) Contracts and Formalities, Art. 634

(b) Duties and Liabilities, Art. 635
(c) Rights, Arts. 636 to 647

- Smith Bell and Company v. CA, G.R. No.

56294, May 20, 1991

4. Supercargoes
Arts. 649-651

5. Pilots

- Wildvalley v. CA, 342 SCRA 213 (2000)

D. Accidents and Damages in Maritime Commerce

1. Averages

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

(1) Simple or Particular

(a) Defined, Art. 809
(b) Effects, Art. 810

(2) Gross or General

(a) Defined, Arts. 811, 817, 818

(b) Essential Requisites, Arts. 813, 814,
860

- Magsaysay, Inc. v. Agan, 96 Phil 504

 11

(c) Effects, Art. 812

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

2. Arrival Under Stress

(a) Causes, Arts. 819, 820

(b) Formalities, Arts. 819, 822
(c) Expenses, Arts. 821, 822
(d) Responsibility of Captain, Arts. 823 – 825

3. Collisions

(a) Classes and Effects

(1) Fortuitous, Arts. 830, 832

(2) Culpable, Arts. 826, 827, 831
(3) Inscrutable Fault, Art. 828

- Government v. Phil. Steamship Co., Inc.,

G.R. No. 18957, January 16, 1923
- Smith Bell and Company v. CA, G.R. No.
56294, May 20, 1991

4. Shipwrecks, Arts. 840 to 843

(a) Salvage Law (Act No. 2616)

- G. Urrutia & Co. v. The Pasig Steamer

and Lighter Co., G.R. No. 7294, March 22,
1912
- Erlanger & Galinger v. Swedish East Asiatic
Co., Ltd, 34 Phil 178
- Barrios v. Go Thong, 7 SCRA 535

Week 9 – 2 hours

E. Special Contracts of Maritime Commerce

1. Charter Parties
a. Definition
b. Kinds

- Coastwise Lighterage Corp. v. CA, 245

SCRA 796
- Caltex Phils. v. Sulpicio Lines, 315 SCRA 709

2. Loans on Bottomry and Respondentia

 12

a. Loan on Bottomry, defined

b. Loan on Respondentia, defined
c. Character of Loan, Art. 719

F. Bill of Lading

1. Contents, Arts. 706, 707, 713, 714

2. Probative Value, Arts. 709, 710

- Magellan Mfg. Marketing Corp. v. CA, et.

al., 201 SCRA 102

G. Passenger on Sea Voyage

1. Nature of Contracts, Art. 695

2. Obligations of Passengers, Arts. 693, 699, 704
694, 700
3. Rights of Passengers, Arts. 697, 698

- Sweet Lines v. CA, 121 SCRA 769

- Trans-Asia Shipping v. CA, 254 SCRA 260

H. Carriage of Goods by Sea Act (CA No. 65; Public

Act No. 521, 74th US Congress)

- Eastern Shipping v. IAC, 150 SCRA 463

- F.H. Stevens v. Nordeutscher, 6 SCRA 180

VIII. Air Transportation

A. International Air Transportation

(Unless otherwise indicated, reference is to the

Warsaw Convention, 51. O.G. 5084; Presidential
Proclamation No. 201, 51 O.G. 4933 [Oct., 1995]

1. Constitutionality

- Santos v. Northwest, 210 SCRA 256

2. When applicable, Art. 1(1)

3. Liabilities under the Convention Arts. 17-
19

- Northwest v. Cuenca, 14 SCRA 1063

- Alitalia v. IAC, 192 SCRA 10

4. Limitations on Liability, Art. 22

 13

- Pan Am v. IAC, 164 SCRA 268

5. When limitations unavailable, Arts. 3, 25

- TWA v. CA, 165 SCRA 143

6. Conditions on Imposition of Liability, Arts.

26, 28, 29

- Luna v. CA, 216 SCRA 107

- Lhuiller v. British Airways, G.R. No. 171092,
March 15, 2010
- PAL v. Savillo, G.R. No. 149547, July 4, 2008
- United Airlines v. Uy, G.R. No. 127768,
November 19, 1999

B. Passenger Rights

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

2012

Week 10 – 2 hours

PART TWO: PUBLIC UTILITIES

1. General Discussions

A. What is a public utility?

- Munn v. Illinois, 94 U.S. 113 (1876)

- Luzon Stevedoring Co., Inc. v. PSC, G.R. No.
L-5458, September 16, 1953
- Albano v. Reyes, 175 SCRA 264

B. What is a public service?

Commonwealth Act No. 146 or the Public Service Act, as

amended, Sec. 13(b)

Differentiate public utility from public service

C. Legal Basis and Rationale for Regulation

. 1987 Constitution, Art. XII, Sec. 6

. Munn v. Illinois, supra

. Republic of the Philippines v. MERALCO, 391 SCRA 700

 14

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

. KMU Labor Center v. Garcia, 239 SCRA 386

. Batangas CATV v. CA, G.R. No. 138819, Sept. 29, 2004
. 1-Utak v. COMELEC, G.R. No. 206020, April 14, 2015

Relate to Public Service Act 13(a), 1987 Constitution, Sec.

4, Art. IX-C

What happened to the Public Service Commission?

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

E. Not a Public Utility

. Nebbia v. New York, 291 U.S. 502 (1934)

. Teresa Electric & Power Co. v. PSC, 21 SCRA 198
. JG Summit Holdings, Inc. v. CA, G.R. No 124293, 24 Septem-
ber 2003

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

See also RA No. 9136, Secs. 6 & 29; RA No. 10668, Secs. 4 & 7

Nature of concession agreements

. Freedom from Debt Coalition v. MWSS, 539 SCRA 621 (2007)

Week 11 – 2 hours

II. Constitutional Provisions

1987 Constitution, Art. XII, Secs. 6, 11, 17, 18, 19

a. Ownership

. Gamboa v. Teves, G.R. No. 176579, (Part 1)

June 28, 2011 and (Part II) October 9, 2012
. Roy v. Herbosa, G.R. No. 207246, 22 November 2016

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

b. Exclusivity

. Tawang Multipurpose Cooperative v. La Trinidad Water

District, G.R. No. 166471, March 22, 2011
 15

c. Subject to Amendment

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

166910, October 19, 2010

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

d. Fixed Term

. Francisco v. Toll Regulatory Board, supra

e. Take-Over Power

. David v. Macapagal-Arroyo, G.R. No.

171396, May 3, 2006

f. Privatization of State-Operated Public Utilities

. Kuwait Airways v. PAL, G.R. No. 156087, May

8, 2009

III. Regulation of Public Utilities

A. Authority to Operate

. PLDT v. NTC, G.R. No. 88404, October 18, 1990

. Discuss ABS-CBN case on non-renewal of franchise or
authority to operate

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

i. General Qualifications

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

ii. Revocation or Cancellation

. Divinagracia v. Consolidated Broadcasting System, Inc.,

G.R. No. 162272, April 7, 2009

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

iii. Provisional Authority

. Oroport Cargohandling v Phividec Industrial Authority,

G.R. No. 166785, July 28, 2008

iv. Certificate of Public Convenience (CPC) versus the

Certificate of Public Convenience and Necessity (CPCN)
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See Public Service Act, Sec. 15

. PAL v. CAB, 270 SCRA 538 (see also RAs Nos. 9183 and 9517,
in relation to case)

Week 12 – 2 hours

B. Rate-Fixing

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

. Phil. Communications Satellite Corp. v. Alcuaz, G.R. No.

84818, December 18, 1989

i. Undue Delegation

. KMU Labor Center v. Garcia, supra

ii. Provisional Rates

. Freedom from Debt Coalition v. Energy Regulatory

Commission, G.R. No. 161113

iii. Rate Refund

. BF Homes v. MERALCO, G.R. No. 171624, Dec. 6,

2010

iv. Vis-à-vis Power to Grant Authority

. Francisco v. Toll Regulatory Board, supra

C. Area of Operation

D. Approval of Sale and Mortgages of Public Utility Assets or

Equity

Public Service Act, Sec. 20(g), (h) and (i)

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

1953
. Y Transit Co., Inc. v. NLRC, 229 SCRA 508

E. Power to Set Fees and Other Charges

. Gerochi v. Department of Energy, G.R. No. 159796,

July 17, 2007
 17

F. Other Means of Regulation

See Public Service Act, Secs. 16 and 20

. MERALCO v. ERB, G.R. No. 145399, March 17, 2006

G. Due Process Requirements

. PANTRANCO v. PSC, 70 Phil 221

-o0o-