Professional Documents
Culture Documents
DOCTRINES DIGEST
I. INTRODUCTION
1. CONCEPT OF TRANSPORTATION
2. GOVERNING LAWS (ART. 1766, NCC)
Degree of Care
the absence of fraud or mistake, he is estopped from thereafter denying that he assented
to such terms.
In order that any presumption of assent to a stipulation in a bill of lading
limiting liability of a carrier may arise, it must appear that the clause
containing the exemption from liability plainly formed part of the
contract contained in the bill of lading. (i.e. printed on the back, or on
papers attached)
When observance of ED commences
o The extraordinary responsibility of the common carrier BEGINS from the time the goods
are delivered to the carrier,
o and REMAINS IN FULL FORCE AND EFFECT even when they are temporarily unloaded
or stored in transit, UNLESS shipper/owner exercises the right of stoppage in transitu,
o and TERMINATES only after a reasonable time of the acceptance of the goos by the
consignee or such other person entitled to receive them. (1737)
When is there delivery
o There is delivery to the carrier when the goods are ready for and have been placed in the
exclusive possession, custody and control of the carrier for the purpose of their
immediate transportation and the carrier has accepted them.
Rights of the carrier
o To require good faith on the part of those persons who deliver goods to be carried, or enter
into contracts with it
o To inquire as to its value (inasmuch as the freight may depend on the value of the article to
be carried)
Duty of carrier
o To make inquiry as to the general nature of the articles shipped and of their value before it
consents to carry them
Failure to do so: CANNOT DEFEAT the shipperss right to recovery of the full
amount of the package if lost, in the absence of showing of fraud or deceit on the
part of the shipper.
Expounded: the carrier has the right to accept the shippers marks as to the contents
of the package offered for transportation, and is not bound to inquire particularly
about them in order to take advantage of a false classification and where a shipper
expressly represents the contents of a package to be of a designated character, it is
not the duty of the carrier to ask for a repetition of the statement nor disbelieve it
and open the box and see for himself.
Exception where a carrier has reasonable ground to suspect that the offered
goods are of a dangerous or illegal character, he has the right to know the
character of such goods and to insist on an inspection, if reasonable and
practical under the circumstances, as a condition of receiving and
transporting the goods.
Carriers liability for delay
o In the absence of a special contract, a carrier is not an insurer against delay in
transportation of goods.
When a common carrier undertakes to convey goods, the law implies a contract that
they shall be delivered at destination within a reasonable time, in the absence of
any agreement as to the time of delivery.
If there is an explicit contract to transport and delivery property within a specified
time, it is bound to fulfill its contract, and is liable for delay, no matter from what
cause it may have arisen.
The ultimate criterion is the actual or apparent intention of the parties, and before time
may be so regarded by a court, there must be sufficient manifestation, either in the contract itself
or the surrounding circumstances, of that intention.
Presumption that time is NOT of the essence
o When the time of delivery is not fixed or is stated in general and indefinite terms = time is
NOT of the essence of the contract
In such cases (i.e. when no time is fixed), the delivery must be made within a
reasonable time.
o Regarding breach
Even where time is of the essence, a breach of the contract in that respect by one of
the parties may be waived by the other partys subsequently treating the contract as
still in force.
o
o
o
They are presumed to have been at fault or to have acted negligently if the goods are lost,
destroyed or deteriorated.
There are very few instances when the presumption of negligence does not attach and
these instances are enumerated in Article 1734. In those cases where the presumption is applied,
the common carrier must prove that it exercised extraordinary diligence in order to overcome the
presumption.
The second mate of the vessel stated that the wind was blowing around force 7 to
8 on the Beaufort Scale. Consequently, the strong winds accompanying the
southwestern monsoon could not be classified as a storm. Such winds are the
ordinary vicissitudes of a sea voyage.
To our mind it would not be sufficient to categorize the weather condition at the
time as a storm within the absolutory causes enumerated in the law. Significantly,
no typhoon was observed within the Philippine area of responsibility during that
period.
- Art. 1739; force majeure must be without any human interference
o Even if the weather encountered by the ship is to be deemed a natural disaster under
Article 1739 of the Civil Code, petitioner failed to show that such natural disaster or
calamity was the proximate and only cause of the loss.
Human agency must be entirely excluded from the cause of injury or loss. In
other words, the damaging effects blamed on the event or phenomenon must
not have been caused, contributed to, or worsened by the presence of human
participation. The defense of fortuitous event or natural disaster cannot be
successfully made when the injury could have been avoided by human
precaution.
Hence, if a common carrier fails to exercise due diligence -- or that ordinary care
that the circumstances of the particular case demand -- to prevent or minimize the
loss before, during and after the occurrence of the natural disaster, the carrier shall
be deemed to have been negligent. The loss or injury is not, in a legal sense, due to
a natural disaster under Article 1734(1).
CITADEL LINES VS. CA (184 SCRA 544)
- Failure to prove
o Failure to prove that the loss of goods was occasioned by an excepted cause carrier is
liable
- Stipulation limiting liability of carrier, binding
o A stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of
lading, unless the shipper or owner declares a greater value, is binding.
o Further, a contract fixing the sum that may be recovered by the owner or shipper for the
loss, destruction or deterioration of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.
EVERETT STEAMSHIP VS. CA (297 SCRA 496)
- Stipulation limiting liability
o A stipulation in the bill of lading limiting the common carriers liability for loss or
destruction of a cargo to a certain sum, unless the shipper or owner declares a greater
value, is sanctioned by law, particularly Articles 1749 and 1750 of the Civil Code which
provide:
ART. 1749. A stipulation that the common carriers liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or
owner declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be recovered by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been freely and fairly
agreed upon.
Must be reasonable It is required that the stipulation limiting the common carriers
liability for loss must be reasonable and just under the circumstances, and has been
freely and fairly agreed upon.
Contracts of adhesion contracts of adhesion wherein one party imposes a readymade form of contract on the other are contracts not entirely prohibited. The one who
adheres to the contract is in reality free to reject it entirely; if he adheres he gives his
consent.
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Discourteous and arbitrary conduct of common carriers personnel amounts to bad faith
entitling passengers recovery for moral damages.
o In the absence of fraud or bad faith in breach contract of carriage, liability of common
carrier limited to natural and probable consequences of said breach, otherwise, moral and
exemplary damages are recoverable.
Warsaw Convention
o Recognition of the Warsaw Convention does not preclude the operation of the Civil Code
and other pertinent laws in the determination of extent of liability of common carriers in
cases of breach of contract of carriage, particularly for willful misconduct of their
employees.
o
11
HOWEVER it is incorrect to say that common carriers are absolutely responsible for all
injuries or damages, even if the same were caused by a fortuitous event.
When a party is unable to fulfill his obligation because of force majeure, the
general rule is that he cannot be held liable for damages for non-performance.
Force Majeure
o In the case: Whatever losses in the form of hotel and meal expenses the stranded passengers
incurred cannot be charged to JAL. Their predicament was not due to the fault or
negligence of JAL, but the closure of NAIA to international flights (Mt. Pinatubo)
o Airline passengers must take such risks incident to the mode of travel,
In this regard, adverse weather conditions or extreme climate changes are some of
the perils involved in air travel, the consequences of which the passenger must
assume or expect. After all, common carriers are not the insurer of all risks.
o HOWEVER if the FE was accompanied by neglect and malfeasance of the carriers
employees = an action for damages against the carrier is permissible.
In the case: JALs duty was to transit new passengers, making the necessary
arrangements themselves for the next flight to Manila. This JAL failed to do. Liable
for nominal damages.
o
2. DURATION OF RESPONSIBILITY
DANGWA VS. CA (202 SCRA 574)
- Duty to stop for a reasonable length of time to allow boarding
o It is the duty of common carriers of passengers to stop their conveyances a reasonable
length of time in order to afford passengers an opportunity to board and enter, and they
are LIABLE for injuries suffered by boarding passengers resulting from the sudden
starting up or jerking of their conveyances while they are doing so.
- When deemed a passenger
o The victim herein, by stepping and standing on the platform of the bus, is already considered a
passenger and is entitled to all the rights and protection pertaining to such a contractual
relation.
o Presumption in stopping When the bus is not in motion, there is no necessity for a person
who wants to ride the same to signal his intention to board. A public utility bus, once it
stops, is in effect making a continuous offer to bus riders. Therefore, it becomes the duty
of the driver and the conductor, everytime the bus stops, to do no act that would have the
effect of increasing the peril to a passenger while he was attempting to board the same.
ABOITIZ SHIPPING VS. CA (179 SCRA 95)
- Extent of passenger relationship to carrier
o The relation of carrier and passenger continues until the passenger has been landed at the
port of destination and has left the vessel owner's dock or premises.
o Once created, the relationship will not ordinarily TERMINATE until the passenger has,
after reaching his destination, safely alighted from the carrier's conveyance or had a
reasonable opportunity to leave the carrier's premises.
All persons who remain on the premises a reasonable time after leaving the conveyance = to
be deemed passengers.
What is a reasonable time or a reasonable delay within this rule = determined from
all the circumstances
Includes a reasonable time to see after his baggage and prepare for his
departure.
o The carrier-passenger relationship is not terminated merely by the
fact that the person transported has been carried to his destination
if, for example, such person remains in the carrier's premises to
claim his baggage.
o A carrier is duty bound not only to bring its passengers safely to
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DIAZ VS. CA
- Presumption of negligence
o In a contract of carriage, it is presumed that the common carrier is at fault or is negligent
when a passenger dies or is injured.
In fact, there is even no need for the court to make an express finding of fault or
negligence on the part of the common carrier. This statutory presumption may
only be overcome by evidence that the carrier exercised extraordinary diligence.
In the case at bar: petitioner, as common carrier, failed to establish sufficient
evidence to rebut the presumption of negligence. The accident which led to the
death of Sherly Moneo was caused by the reckless speed and gross negligence of
petitioner's driver who demonstrated no regard for the safety of his passengers.
13
A contract limiting liability upon an agreed valuation does not offend against the
policy of the law forbidding one from contracting against his own negligence
14
These contradictory testimony give rise to the presumption that the carrier was
negligent (1755)
AIR FRANCE VS. CA (171 SCRA 399)
- Restricted air fare
o International Air Transportation Association (IATA) Resolution No. 275 e, 2., special note
reads: "Where a fare is restricted and such restrictions are not clearly evident from the required
entries on the ticket, such restrictions may be
written, stamped or reprinted in plain language in the Endorsement/Restrictions
box of the applicable flight coupon(s);
or attached thereto by use of an appropriate notice.
o Changes to the ticket requested by the passenger will be subject to carriers regulations
- Claim for damages; requisite
o It is also essential before an award of damages that the claimant must satisfactorily prove
during the trial the existence of the factual basis of the damages and its causal connection to
defendant's acts.
BAYASEN VS. CA (103 SCRA 197)
- In the case: no evidence of negligence
o The witness for the prosecution herself said that they were driving at moderate speed,
didnt know the cause of the accident, no bump/jolt, no distracting conversation, didnt
notice anything wrong with the condition of the jeep, road was wet but fair enough to
drive on; fair weather; wasnt drinking NO EVIDENCE OF NEGLIGENCE
The testimony of a credible witness that he saw or heard at a particular time and place is
more reliable than that of an equally credible witness who with the same opportunities,
testified that he did not see or hear the same thing at the same time and place.
FORTUNE EXPRESS VS. CA
- Lack of diligence in protecting passengers; liability for hijacking
o Had petitioner and its employees been vigilant they would not have failed to see that the
malefactors had a large quantity of gasoline with them. Under the circumstances, simple
precautionary measures to protect the safety of passengers, such as frisking passengers and
inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors,
before allowing them on board could have been employed without violating the
passengers constitutional rights.
A common carrier can be held liable for failing to prevent a hijacking by
frisking passengers and inspecting their baggage.
- In this case, not a fortuitous event
o Under the requisites enumerated in Yobido lacking #2 (they were forewarned by the
police)
15
16
Also, the diligence shown by the shipmaster to protect cargo from the typhoon and
pilferages exempts the carrier from damages (had sought police and coast guard assistance
before abandoning ship).
17
Art. 362 in order to hold the carrier liable, the consignee was obliged to PROVE that the
damages to the goods by virtue of their nature, occurred on account of the common
carriers negligence or because the common carrier did not take the precaution required.
Carrier not relieved from liability if improper packing of goods was APPARENT
o If the fact of improper packing is known to the carrier or his servants, or apparent upon
ordinary observation, but accepts the goods notwithstanding such condition, it is NOT relieved
of liability for loss or injury resulting therefrom.
o
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the requirements of the contract, and is not a defense against the claim of the consignee for
recovery after it shall have ascertained later its actual loss or damage.
SHELL CHEMICAL VS. MANILA PORT (72 SCRA 35)
- Effect of stipulation in management contract for liability of arrastre operator to consignee as a
stipulation pour atrui
- Loss of goods; failure to file claim
o The consignees failure to file a claim with the arrastre service operator within 15 days
from the date of discharge of the last package from the vessel is deemed a constructive
denial, and relieves the arrastre service operator of liability for non-delivery
The filing of the claim is a condition precedent to the institution of the suit for
damages
PURPOSE: to apprise the arrastre operator of the existence of a claim and
to enable it to check on the validity of the claimants demand while the
facts are still fresh in the recollection of the persons who took part in the
undertaking and the pertinent papers are still available.
- Premature filing
o The filing of a provisional claim on the day of the vessels arrival, but one day prior to the
discharge of the cargo is premature and speculative
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6. MULTI-CARRIERS
KLM VS. DUTCH AIRLINES VS. CA (65 SCRA 237)
- Art. 30 of the Warsaw Convention on International Air Transportation
o Art. 30 DOES NOT APPLY to a case where an airline refuses to transport a passenger with
confirmed reservation
The article presupposes the occurrence of either an accident or a delay
- Tickets
o The effect of a provision in passage ticket that carriage by successive air carriers is to be
regarded as a single operation is to make the ticket-issuing carrier LIABLE for tortious
conduct of other carriers.
LUFTHANSA VS. CA (238 SCRA 290)
- Bound by mistakes by of fellow member of IATA
o An airline company is considered bound by the mistakes committed by another member of
IATA which, in behalf of the former, had confirmed a passengers reservation for
accommodation.
- Meaning of Delay
o In the case: Lufthansa prays this court to take heed of jurisprudence in the United States
where the term "delay" was interpreted to include "bumping-off" or failure to carry a
passenger with a confirmed reservation.
These decisions in the United States are not controlling in this jurisdiction.
In its ordinary sense, "delay" means to prolong the time of or before; to stop,
detain or hinder for a time, or cause someone or something to be behind in
schedule or usual rate of movement in progress.
"Bumping-off," which is the refusal to transport passengers with
confirmed reservation to their planned and contracted destinations, totally
forecloses said passengers' right to be transported, whereas delay merely
postpones for a time being the enforcement of such right.
CHINA AIRLINES VS. CA (185 SCRA 449)
20
Airline cannot be held liable for negligence of employee of its ticketing agent (another airline)
o In the case: CAL is not the employer of PAL or Espiritu. There is a need to first establish
the existence of an employer-employee relationship before an employer can be held
vicariously liable under Art. 2180, NCC.
As employer, it is PAL who is liable for the negligence of its employees, even if
PAL was acting as ticketing agent of CAL.
PALs main defense is that is only an agent. As a general proposition, an agent
who duly acts as such is NOT PERSONALLY LIABLE to third persons.
HOWEVER, there are admitted exceptions, as in this case where the agent
is being suef for damages arising from a tort committed by its employee.
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liabilities. It DOES NOT in any way operate to absolve the common carrier from his civil
liabilities arising from its failure to exercise extraordinary diligence, the determination of
which properly belongs to the courts.
WESTERN SHIPPING VS. NLRC (253 SCRA 405)
- Coast Guard clearance to sail; proof of seaworthiness
o Clearance issued by the Coast Guard is entitled to much weight as it was issued by an
agency of the government charged with the seaworthiness of vessels.
In this case It establishes two points: (1) The Coast Guard and the Collector of
Customs approved the application for the boarding of the additional passengers;
(2) the safety of the vessel was not endangered by the presence of the additional
passengers.
CALTEX VS. SULPICIO LINES (315 SCRA 709)
- Charter party; Contract of affreightment
o Charter Party a contract by which an entire ship, or some principal part thereof, is let by
the owner to another person for a specified time or use
o Contract of affreightment contract whereby the owner of a ship or other vessel lets the
whole or part of the ship to a merchant or other person for the conveyance of goods, on a
particular voyage, in consideration of the payment of freight.
Types
Time Charter the leased vessel is leased to the charterer for a fixed period
of time
Voyage Charter ship is leased for a single vessel
o For BOTH CASES, the charter-party provides for the hire of the
vessel only, either for a determinate period or for a single or
consecutive voyage, the ship owner
To supply the ships store
Pay for the wages of the master of the crew, and
Defray the expenses of the maintenance of the ship
Demise/Bareboat Charter the charterer mans the vessel with his own
people and becomes, in effect, the owner for the voyage or service
stipulated, subject to liability for damages caused by negligence
If the charter is a contact of affreightment, which leaves the general owner in possession
of the ship AS OWNER for the voyage the rights and the responsibilities of
ownership rest on the owner.
The charterer is FREE FROM LIABILITY to third persons in respect of the
ship.
- Does a charter party agreement turn the common carrier into a private one?
o It is imperative that a public carrier shall remain as such, notwithstanding the charter of
the whole or portion of a vessel by one or more persons, provided the charter is limited to
the ship only
o BUT, when the charter includes both the vessel and its crew, a common carrier becomes
private, at least insofar as the particular voyage covering the charter-party is concerned.
Although a charter-party may transform a common carrier into a private one, the
same however is NOT TRUE in a contract of affreightment
- Warranty of seaworthiness; seaworthy
o The carriers are deemed to warrant impliedly the seaworthiness of the ship.
The charterer of a vessel has no obligation before transporting its cargo to ensure that
the vessel it chartered complied with all its requirements.
Such duty falls on the common carrier for being engaged in public service.
o Duty of Shippers - Because of the implied warranty of seaworthiness, shippers of goods,
when transacting with common carriers, are NOT EXPECTED to inquire into the vessels
seaworthiness, genuineness of its licenses and compliance with all maritime laws.
22
To demand more from shippers and hold them liable in case of failure exihibits
nothing but the futility of our maritime laws insofar as the protection of the public
in general is concerned.
Duty of Passengers We can also neither expect passengers to inquire every time they
board a common carrier whether the carrier possesses the necessary papers or that all the
carriers employees are qualified.
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24
Means: liability of the carrier is confined to the vessel, which is hypothecated for such
obligations or which stands as a guaranty for their settlement.
o Reasons: conditions; risks attendant to maritime trade
Limited liability rule
o The only time the limited liability rule does not apply is when there is an actual finding of
negligence on the part of the vessel owner or agent.
o The rights of a vessel owner/agent under the LLR are akin to those of the rights of
shareholders to limited liability under our Corporation Law.
Both are privileges governed by statute, and while not absolute, must be swept
aside only in the established existence of the most compelling reasons. In the
absence of such reasons, the court chooses to exercise prudence and shall not
sweep such rights aside on mere whim or surmise, for even in the existence of a
cause to do so, such incursion is definitely punitive in nature.
In both insolvency of a corporation and the sinking of a vessel, the claimants or
creditors are limited in their recovery to the remaining value of accessible assets.
Corporation residual assets of the corporation left over from its operations
Lost vessel the insurance proceeds and pending freightage for the
particular voyage.
o
25
It must be stressed at this point that Article 587 speaks only of situations where
the fault or negligence is committed solely by the captain.
In cases where the shipowner is likewise to be blamed NCC
3. CAPTAIN/MASTER
INTER-ORIENT VS. NLRC (235 SCRA 268)
- Definition; role
o The captain of a vessel is a confidential and managerial employee within the meaning of
the above doctrine.
o A master or captain, for purposes of maritime commerce, is one who has command of a
vessel.
o Three distinct roles:
(1) he is a general agent of the shipowner;
In this role, the captain has authority
o to sign bills of lading,
o carry goods aboard and deal with the freight earned,
o agree upon rates
o decide whether to take cargo
o to enter into contracts with respect to the vessel and the trading of
the vessel, subject to applicable limitations established by statute,
contract or instructions and regulations of the shipowner.
(2) he is also commander and technical director of the vessel; and
The most important is the role, for such role (which, to our mind, is
analogous to that of "Chief Executive Officer" [CEO] of a present-day
corporate enterprise) has to do with the operation and preservation of the
vessel during its voyage and the protection of the passengers (if any) and
crew and cargo.
(3) he is a representative of the country under whose flag he navigates.
To the captain is committed the governance, care and management of the vessel. Clearly,
the captain is vested with both management and fiduciary functions.
- Control, discretion of captain
o A ships captain must be accorded a reasonable measure of discretionary authority to
decide what the safety of the ship and its crew and cargo specifically requires on a
stipulated ocean voyage.
A 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.
o The captain has control of all departments of service in the vessel, and reasonable
discretion as to its navigation.
It is the right and duty of the captain, in the exercise of sound discretion and good
faith, to do all things with respect to the vessel and its equipment and conduct of
the voyage which are reasonably necessary for the protection and preservation of
the interests under his charge, whether those be of the ship-owners, charterers,
cargo owners or of the underwriters.
It is the right and duty of the captain to be left free to exercise his own best
judgment, and such judgment and discretion must not be straitjacketed, even in
the age of electronic communications.
If the ship captain is convinced that the ship=owners or ship agents instructions
(insisted upon from miles away) will result in imposing unacceptable risks of loss
26
or serious danger to ship or crew, he cannot usually seek absolution from his
responsibility, if a marine casualty occurs, in such instructions.
SWEET LINES VS. CA (121 SCRA 769)
- Owner of a vessel is liable in damages arising from the act of its captain in by-passing a prescheduled port if call
o In the case: The voyage was interrupted by the captain upon instruction. The
interruption was not due to fortuitous event nor to disability of the vessel. Having been
caused by the captain upon instruction of management, the passengers right to indemnity
is evident. The owner of a vessel and the ship agent shall be civilly liable for the acts of a
captain.
5. SUPERCARGOES
6. PASSENGERS
27
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.
In the case: While the instant case may technically fall within the purview of the
said provision, the formalities prescribed under Article 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.
813
ARTICLE 813. In order to incur the expenses and cause the damages
corresponding to gross average, there must be a resolution of the captain,
adopted after deliberation with the sailing mate and other officers of the
vessel, and after hearing the persons interested in the cargo who may be
present.
If the latter shall object, and the captain and officers or a majority
of them, or the captain, if opposed to the majority, should consider certain
measures necessary, they may be executed under his responsibility,
without prejudice to the right of the shippers to proceed against the
captain before the competent judge or court, if they can prove that he acted
with malice, lack of skill, or negligence.
If the persons interested in the cargo, being on board the vessel,
have not been heard, they shall not contribute to the gross average, their
share being chargeable against the captain, unless the urgency of the case
should be such that the time necessary for previous deliberations was
wanting.
814
ARTICLE 814. The resolution adopted to cause the damages which
constitute general average must be necessarily be entered in the log book
stating the motives and reasons for the dissent, should there be any, and
the irresistible and urgent causes which impelled the captain if he acted of
his own accord.
In the first case the minutes shall be signed by all the persons present who
could do so before taking action, if possible; and if not, at the first
opportunity. In the second case, it shall be signed by the captain and by
the officers of the vessel.
In the minutes, and after the resolution, shall be stated in detail all the
goods jettisoned, and mention shall be made of the injuries caused to those
kept on board. The captain shall be obliged to deliver one copy of these
minutes to the maritime judicial authority of the first port he may make,
within twenty-four hours after his arrival, and to ratify it immediately
under oath.
28
Third division covers the time between the moment when the collision has
become a practical certainty and the moment of actual contact
Nautical rules
o Nautical rules require that, where a steamship and sailing vessel are approaching each other from
opposite directions, or on intersecting lines, the steamship, from the moment the sailing
vessel is seen, shall watch with the highest diligence her course and movements so as to
be able to adopt such timely means of precaution as will necessarily prevent the two
boats from coming into contact.
o Nautical rules also require that, where a steamship and a sailing vessel are approaching each
other from opposite directions, or on intersecting lines, the sailing vessel is required to keep
her course unless the circumstances are such as to render a departure from the rule
necessary in order to avoid immediate danger.
Where a steamship and a sailing vessel are approaching each other bow on, or on
intersecting lines, the steamship must give way. In case of collision between such
vessels, the steamship is prima facie at fault.
Damages
o Fault on the part of the sailing vessel during the third division of time DOES NOT absolve the
steamship which has suffered herself and a sailing vessel to get into such dangerous
proximity as to cause inevitable alarm and confusion, and a collision results as a
consequence.
The steamer having incurred a far greater fault in allowing such proximity to be
brought about is chargeable with all the damage resulting from such collision; and
the act of the sailing vessel having been done in extremis, even if done, is
responsible for the result.
The responsibility of the owner of a steamship for the damage caused by a collision
between the steamer and a sailing vessel brought about by the negligence of the
steamship is EXTINGUIHED where the steamship is sunk and totally lost be reason of
said collision.
Where, however, such steamship is INSURED and the insurance is
collected by the owner, the insurance substitutes the vessel and the owner
becomes responsible for the injuries caused the sailing vessel to the extent of the
insurance collected.
In an action brought by a steamship owner against the owner of a sailing vessel for
damages caused to the steamship by a collision, a passenger who suffered a loss of
baggage and freight by reason of such collision CANNOT INTERVENE in the
action for the adjudication of his rights, as he has no legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both.
29
Rule 18 Requires 2 power-driven vessels meeting end on or nearly end on each to alter
her course to starboard so that each vessel may pass on the portside of the other.
BUT route observance of the Rules will not relieve a vessel from
responsibility if the collision could have been AVOIDED by proper care and skill
on her part or even by a departure of the rules.
4. SHIPWRECKS
ERLANGER VS. SWEDISH EAST (34 SCRA 178)
- Salvage; right to compensation; theory of remuneration
o Salvage A service which one person renders to the owner of a ship or goods by his own
labor, preserving the goods or ship which the owner or those entrusted with the care of
them have either abandoned in distress at sea or are unable to protect and secure.
It is found on the equity of remunerating private and individual services
performed in saving, in whole or in part, a ship or its cargo from impending peril,
or of recovering them after actual loss.
It is a compensation for actual services rendered to the property charged with it,
and is allowed for meritorious conduct of the salvor and in consideration of a
benefit conferred upon the person whose property he has saved.
Three elements necessary for a valid salvage claim
A marine peril
Service voluntarily rendered when not required as an existing duty or
from special contract
30
31
IX.
32
Package limitation
o Dual function of bill of lading
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.
In a nutshell, the acceptance of the bill of lading by the shipper and the consignee, with full
knowledge of its contents, gives rise to the presumption that it constituted a perfected and
binding contract.
o Limitation of liability
A stipulation in the bill of lading limiting to a certain sum the common carrier's
liability for loss or destruction of a cargo -- unless the shipper or owner declares a
greater value58 -- is sanctioned by law.
Two conditions to be satisfied:
(1) the contract is reasonable and just under the circumstances, and
(2) it has been fairly and freely agreed upon by the parties.
Rationale for this rule to bind the shippers by their agreement to the value
(maximum valuation) of their goods.
o Civil Code and COGSA provisions on limitation of liability
It is to be noted, however, that the Civil Code does not limit the liability of the common
carrier to a fixed amount per package. In all matters not regulated by the Civil Code,
the right and the obligations of common carriers shall be governed by the Code
of Commerce and special laws.
Thus, the COGSA, which is suppletory to the provisions of the Civil Code, supplements
the latter by establishing a statutory provision limiting the carrier's liability in the absence
of a shipper's declaration of a higher value in the bill of lading.
The provisions on limited liability are as much a part of the bill of lading as though
physically in it and as though placed there by agreement of the parties.
o Separability of bill of lading from other Letter of Credit arrangement
The contract of carriage, as stipulated in the bill of lading in the present case, must
be treated independently of the contract of sale between the seller and the buyer,
and the contract of issuance of a letter of credit between the amount of goods
described in the commercial invoice in the contract of sale and the amount allowed
in the letter of credit will not affect the validity and enforceability of the contract of
carriage as embodied in the bill of lading.
o Package
When what would ordinarily be considered packages are shipped in a container
supplied by the carrier and the number of such units is disclosed in the shipping
documents, each of those units and not the container constitutes the 'package'
referred to in the liability limitation provision of Carriage of Goods by Sea Act.
33
Although under Sec. 15 of the Management contract, the claim should be made after the
discharge of the last cargo from the carrying vessel, it has been held that if the consignee
or broker was informed of a shortage or damage to the goods before the unloading of the
last package, or even during the unloading, a provisional claim may properly be
presented.
Responsibility of Arrastre Operator
o not only for the invoice value of the goods damaged or lost,
o but also for all damages that may be suffered by the consignee on account of their loss,
destruction or injury.
o
34
35
o
o
2. WARSAW CONVENTION
AMERICAN AIRLINES VS. CA (327 SCRA 482)
- Application of the Warsaw Convention
o The Warsaw Convention to which the Republic of the Philippines is a party and which has
the force and effect of law in this country applies to all international transportation of
persons, baggage or goods performed by an aircraft gratuitously or for hire.
36
As enumerated in the Preamble of the Convention, one of the objectives is "to regulate in a
uniform manner the conditions of international transportation by air".
Jurisdiction for action for damages under the Warsaw Convention (Art. 28[1])
o Domicile of the carrier
o Principal place of business of the carrier
o Where the carrier has business through which contract is made
o Place of destination
Transportation by successive carriers deemed as for undivided transportation (Art. 1[3])
o Transportation to be performed by several successive carriers shall be deemed to be one
undivided transportation if it had been regarded by the parties as a single operation
Whether it has been agreed upon under the form of a single contract or a series of
contracts.
o It SHALL NOT lose its international character merely because one contract or series of contracts
is to be performed entirely within the territory subject of the sovereignty of the same
contracting (state).
o
37
The WC is as much a part of Philippine law as the NCC, Code f Commerce and other
municipal special laws, and the provisions therein contained, specifically its limitation of
carriers liability are operative in the Philippines, but only in appropriate situations
Recognition of the WC does not preclude the operation of the NCC or other
pertinent laws in the determination of the extent of liability of the carrier.
The WC declares the carrier liable in the enumerated cases and under certain limitations.
HOWEVER it does not operate as
An exclusive enumeration of instances of liability for breach of contract of
carriage, or
As an absolute limit of the extent of that liability of the operation of the NCC or
other pertinent laws.
It DOES NOT regulate, much less exempt, the carrier from liability for damages for
violating the rights of its passengers under the contract of carriage, especially if
willful misconduct on the part of the carriers employees is found or established.
38
(United Airlines v. Uy) SC distinguished between the (1) damage to the passengers baggage
and (2) humiliation he suffered at the hands of the airlines employees.
The first cause of action was covered by the Warsaw Convention which prescribes
in two years.
The second was covered by the provisions of the Civil Code on torts, which
prescribes in four years.
In this case: private respondents Complaint alleged that both PAL and Singapore Airlines
were guilty of gross negligence, which resulted in his being subjected to "humiliation,
embarrassment, mental anguish, serious anxiety, fear and distress."
The emotional harm suffered by the private respondent as a result of having been
unreasonably and unjustly prevented from boarding the plane should be
distinguished from the actual damages which resulted from the same incident.
Under the Civil Code provisions on tort, such emotional harm gives rise to
compensation where gross negligence or malice is proven.
Had the present case merely consisted of claims incidental to the airlines delay in
transporting their passengers, the private respondents Complaint would have
been time-barred under Article 29 of the Warsaw Convention. However, the
present case involves a special species of injury (moral damages).
These claims are covered by the NCC provisions on tort, and not within the
purview of the Warsaw Convention. The 4-year prescriptive period applies.
39
In this manner, the arrastre operator can immediately verify its culpability and
liability. A provisional claim seasonably filed is sufficient compliance with the liability
clause.
Claim of loss a condition precedent for bringing action
o In order to hold the arrastre operator liable for lost or damaged goods, the claimant
should file with the operator a claim for the value of said goods "within fifteen (15) days
from the date of discharge of the last package from the carrying vessel.
o The filing of the claim for loss within the 15-day period is in the nature of
a prescriptive period for bringing an action
and is a condition precedent to holding the arrastre operator liable.
o This requirement is a defense made available to the arrastre operator, who may use or
waive it as a matter of personal discretion.
o Purpose: It gives the arrastre contractor a reasonable opportunity to check the validity of
the claim, while the facts are still fresh in the minds of the persons who took part in the
transaction, and while the pertinent documents are still available. Such period is sufficient
for the consignee to file a provisional claim after the discharge of the goods from the vessel.
o From when does 15-day period start? The 15-day period for filing claims should be
counted from the date the consignee learns of the loss, damage or misdelivery of goods.
40
An absolute bar to suit and not to be made subject to the various tolling provisions of
the laws of the forum.
This therefore forecloses the application of our own rules on interruption of
prescriptive periods.
o Purpose of second par., Art. 29
This was intended only to let local laws determine whether an action had been
commenced within the two (2)-year period
Within our jurisdiction an action shall be deemed commenced upon the
filing of a complaint.
Method of calculating period of limitation
o Determined by the law of the court to which the case is submitted
Applicability of WC
o Within our jurisdiction we have held that the Warsaw Convention can be applied, or
ignored, depending on the peculiar facts presented by each case.
o The Convention's provisions do not regulate or exclude liability
for other breaches of contract by the carrier,
or misconduct of its officers and employees,
or for some particular or exceptional type of damage.
o Neither may the Convention be invoked to justify the disregard of some extraordinary
sort of damage resulting to a passenger and preclude recovery therefor beyond the limits
set by said Convention.
o The Convention does not preclude the operation of the Civil Code and other pertinent
laws.
It does not regulate, much less exempt, the carrier from liability for damages for
violating the rights of its passengers under the contract of carriage, especially if willful
misconduct on the part of the carrier's employees is found or established.
X.
41
o
o
GR: Parties taking possession of an abandoned vessel or cargo have a right to retain it
until it is completed, and no person has the right to interfere with them, provided
They are able to effect the salvage
They are conducting the business with fidelity and vigor.
Exception: If their own means are inadequate, they are bound to accept additional assistance,
if offered.
Those beginning a salvage service, and in the successful prosecution of it, are entitled to be
regarded as the meritorious salvors of whatever is preserved when wrongfully
interrupted in the work by others who complete the salvage.
42
Furnishing money to a master in good faith to obtain repairs or supplies or to remove liens,
in order to forward the voyage of the vessel, raises a lien just as though the things for
which money was obtained to pay for had been furnished by the lender
o A person who extends credit for the purpose of discharging a maritime lien is NOT
ENTITLED to the said lien where the funds were not furnished to the ship on the order
of the master and there was no evidence that the money was actually used to pay debts
secured by the lien.
Nature of a maritime lien
o A maritime lien constitutes a present right of property in the ship, a jus in re, to be
afterward enforced in admiralty by process in rem.
o From the moment the claim or privilege attaches, it is inchoate, and when carried into
effect by legal process, by a proceeding in rem, it relates back to the period when it is first
attached.
Priority over all claims against the vessel
o A preferred mortgage lien shall have priority over all claims against the vessel, except,
among others, maritime liens arising prior in time to the recording of the preferred
mortgage.
o
43
44
Members of the IATA are under a general pool partnership agreement wherein they
act as agent of each other in the issuance of tickets to contracted passengers to
boost ticket sales worldwide
and at the same time provide passengers easy access to airlines which are
otherwise inaccessible in some parts of the world.
o Booking and reservation among airline members are allowed even by telephone and it has
become an accepted practice among them.
On successive carriers
o A member airline which enters into a contract of carriage consisting of a series of trips to be
performed by different carriers is authorized to receive the fare for the whole trip and
through the required process of interline settlement of accounts by way of the IATA
clearing house an airline is duly compensated for the segment of the trip serviced.
o
No
adjustment
is
necessary if the increase or decrease in fare (or charge) occurs when the
journey is already commenced
XI.
45
46
47
3. CHARTER PARTY
PLANTERS PRODUCTS VS. CA (226 SCRA 476)
- Charter Party, defined
o A contract by which an entire ship, or some principal part thereof, is let by the owner to
another person for a specified time or use;
o a contract of affreightment by which the owner of a ship or other vessel lets the whole or a
part of her to a merchant or other person for the conveyance of goods, on a particular
voyage, in consideration of the payment of freight
- Types of charter parties
o Contract of affreightment which involves the use of shipping space on vessels leased by the
owner in part or as a whole, to carry goods for others;
Two Types
Time Charter vessel is leased to the charterer for a fixed period of time
Voyage Charter the ship is leased for a single voyage
In both cases, the charter-party provides for the hire of vessel only, either for a
determinate period of time or for a single or consecutive voyage.
The shipowner is tasked to
o supply the ship's stores,
o pay for the wages of the master and the crew, and
o defray the expenses for the maintenance of the ship.
o Charter by demise or bareboat charter, by the terms of which the whole vessel is let to the
charterer with a transfer to him of its entire command and possession and consequent control over
its navigation, including the master and the crew, who are his servants.
- Common Carrier vs. Private Carrier
o Lies in the nature of the business: if the undertaking is a single transaction, not a part of the
general business or occupation, although involving the carriage of goods for a fee, the
person or corporation offering such service is a private carrier
o Degree of diligence
Private ordinary diligence
Common extraordinary diligence
o Presumption of negligence
Private no presumption; negligence must be proved by the person alleging
damages
Common presumption of negligence/fault
- When does charterer become a private carrier
o When the charter is limited to the ship only remains a common carrier
Because the ship-owner retains possession and control of the ship, although the
holds may for the moment be the property of the charterer
o When it includes both the vessel and the crew becomes a private carrier, at least insofar as the
particular voyage concerning the charter-party is concerned
- What must be proved in suit against common carrier for damages
o Fact of shipment
o Its consequent loss or damage while the same was in the possession, actual or constructive,
of the carrier.
- When a ship-owner is liable for damage to cargo resulting from improper stowage
o Only when the stowing is done by stevedores employed by him, and therefore under his
control and supervision, not when the same is done by the consignee or stevedores under
the employ of the latter.
48
49
Ambiguities in contracts
o Ambiguities in a contract are interpreted strictly, albeit not unreasonably, against the
drafter thereof when justified in light of the operative facts and surrounding
circumstances.
NATIONAL STEEL VS. CA (283 SCRA 45)
- True test of a common carrier
o The true test of a common carrier is the carriage of passengers or goods, provided it has space, for
all who opt to avail themselves of its transportation service for a fee.
o Failing such test PRIVATE CARRIER
- On private carriers
o Private carriage is undertaken by special agreement and the carrier does not hold himself
out to carry goods for the general public.
o The most typical, although not the only form of private carriage, is the charter party a
maritime contract by which the charterer, a party other than the ship-owner, obtains the
use and service of all or some part of a ship for a period of time or a voyage/s.
o Actions against private carrier; burden of proof
In an action against a private carrier for loss of, or injury to, cargo, the burden is
on the plaintiff to prove that the carrier was negligent or unseaworthy, and the fact that
the goods were lost or damaged while in the carriers custody does not put the burden of
proof on the carrier.
- Duties of stevedoring company
o A stevedore company engaged in discharging cargo has the duty to load the cargo in a
prudent manner, and it is liable for injury to, or loss of, cargo caused by its negligence.
Where the officers and members and crew of the vessel do nothing and have no
responsibility in the discharge of cargo by stevedores the vessel is not liable for loss
of, or damage to, the cargo caused by the negligence of the stevedores.
- Demurrage, defined
o The compensation provided for in the contract of affreightment for the detention of the
vessel beyond the laytime.
o Given to compensate the ship-owner for non-use of the vessel.
- Laytime, defined
o That period of time agreed on for loading and unloading of cargo.
o Laytime runs according to the particular clause of the charter party.
Laytime expressed in running days this means days when the ship would be run
continuously, and holidays are not expected
Qualification of weather permitting excepts only those days when bad weather
reasonably prevents the work contemplated
- WWDSHINC (Weather, working days, Sundays and holidays included)
o Where laytime is qualified as WWDSHINC, the running of the laytime is subject to the
weather, and would cease to run in the even unfavorable weather interferes with the
loading of cargo.
4. BOTTOMRY-RESPONDENTIA
XII.
1. MULTI-MODAL TRANSPORT
2. FREIGHT FORWARDING
3. ARRASTRE-STEVEDORING
50
4. CONTRACT OF TOWAGE
BARRIOS VS. GO THONG (7 SCRA 535)
- Salvage; derilict and quasi-derelict
o A ship which is lost or abandoned at sea is considered a derelict and, therefore, proper subject
of salvage.
o A ship in a desperate condition, where persons on board are incapable, by reason of their mental and
physical condition, of doing anything for their own safety, is a quasi-derelict and may, likewise,
be the proper subject of salvage.
o Definition the compensation allowed to persons by whose assistance
a ship or her cargo has been saved, in whole or in part, from impending peril on
the sea,
or in recovering such property from actual loss, as in case of shipwreck, derelict, or
recapture.
o Elements of a valid salvage claim
1) a marine peril,
(2) service voluntarily rendered when not required as an existing duty or from a
special contract, and
(3) success in whole or in part, or that the service rendered contributed to such
success.
- In this case: NO MARINE PERIL not a quasi-derilict no valid salvage claim merely a
relation of towage
o Compensation in towage
Only the OWNER of the towing vessel, to the exclusion of the crew of the said
vessel, may be entitled to remuneration.
o Salvage vs. Towage
TOWAGE the crew does not have any interest or rights in the remuneration
pursuant to the contract.
SALVAGE the crew of the salvaging ship is entitled to salvage, and can look to
the salvaged vessel for its share.
51
to their comfort and convenience. As such, public utility services are impressed with public
interest and concern.
Section 16(c) of the Public Service Act
o Requisites for the fixing and determination of rates
(a) the rates to be approved should be proposed by public service operators;
(b) there should be a publication and notice to concerned or affected parties in the
territory affected;
(c) a public hearing should be held for the fixing of the rates
o Under the foregoing provision, the Legislature delegated to the defunct Public Service
Commission the power of fixing the rates of public services. Respondent LTFRB, the
existing regulatory body today, is likewise vested with the same powers "to determine,
prescribe, approve and periodically review and adjust, reasonable fares, rates and other
related charges, relative to the operation of public land transportation services provided by
motorized vehicles."
The Legislature has delegated to the Public Service Commission the power of
fixing the rates of public services, but it has not authorized the Public Service
Commission to delegate that power to a common carrier or other public service.
o Delegation of legislative power
Such delegation of legislative power to an administrative agency is permitted in order to
adapt to the increasing complexity of modern life. As subjects for governmental
regulation multiply, so does the difficulty of administering the laws. Hence,
specialization even in legislation has become necessary.
Given the task of determining sensitive and delicate matters as route-fixing and
rate-making for the transport sector, the responsible regulatory body is entrusted
with the power of subordinate legislation. With this authority, an administrative
body and in this case, the LTFRB, may implement broad policies laid down in a statute by
"filling in" the details which the Legislature may neither have time or competence to
provide.
On the presumption of public need
o Certificate of Public Convenience (CPC) An authorization granted by the LTFRB for the
operation of land transportation services of public uses as required by law.
Requirements for grant of CPC
The applicant must be a citizen of the Philippines, or a corporation or copartnership, association or joint-stock company constituted and organized
under the laws of the Philippines, at least 60 per centum of its stock or paidup capital must belong entirely to citizens of the Philippines;
The applicant must be financially capable of undertaking the proposed
service and meeting the responsibilities incident to its operation; and
The applicant must prove that the operation of the public service proposed
and the authorization to do business will promote the public interest in a
proper and suitable manner.
o In other words Before a CPC will be issued, the applicant must
prove by proper notice and hearing that the operation of the
public service proposed will promote public interest in a proper
and suitable manner.
Proper notice and hearing before the PSC can exercise its power to issue a
CPC.
Public convenience/necessity
Something fitting or suited to the public need
Exists when the proposed facility or service meets a reasonable want of the
public and supply a need which the existing facilities do not adequately
supply.
52
3. FUNCTION
PAL VS. CAB (270 SCRA 538)
- Powers of Civil Aeronautics Board
o The CAB is expressly authorized by R.A. No. 776 to issue a temporary operating permit or
Certificate of Public Convenience and Necessity, and nothing contained in the said law
negates the power to issue said permit before the completion of the applicant's evidence
and that of the oppositor thereto on the main petition.
o Assuming arguendo that a legislative franchise is a prerequisite to the issuance of a permit,
the absence of the same does not affect the jurisdiction of the CAN to hear the application,
but only tolls upon the ultimate issuance of the requested permit.
o The power to authorize and control the operation of a public utility is admittedly a
prerogative of the legislature, since Congress is that branch of government vested with
plenary powers of legislation.
- On franchises
o The franchise is a legislative grant, whether made directly by the legislature itself, or by
any one of its properly constituted instrumentalities.
The grant, when made, binds the public, and is, directly or indirectly, the act of the
state.
o A franchise may be derived indirectly from the state through a duly designated agency,
and to this extent, the power to grant franchises has frequently been delegated, even to
agencies.
Privileges conferred by grant by local authorities as agents for the state constitute as
much a legislative franchise as though the grant had been made by an act of the legislature.
53
In this case: There is nothing in the law nor in the Constitution, which indicates that a
legislative franchise is an indispensable requirement for an entity to operate as a domestic
air transport operator. Although Section 11 of Article XII recognizes Congress' control over
any franchise, certificate or authority to operate a public utility, it does not mean Congress
has exclusive authority to issue the same. Franchises issued by Congress are not required
before each and every public utility may operate.
In many instances, Congress has seen it fit to delegate this function to government
agencies, specialized particularly in their respective areas of public service.
Public convenience and necessity
o The terms "convenience and necessity", if used together in a statute, are usually held not to
be separable, but are construed together.
Both words modify each other and must be construed together. The word
'necessity' is so connected, not as an additional requirement but to modify and
qualify what might otherwise be taken as the strict significance of the word
necessity.
o When it exists; what it is - Public convenience and necessity exists when the proposed
facility will meet a reasonable want of the public and supply a need which the existing
facilities do not adequately afford.
It does not mean or require an actual physical necessity or an indispensable thing.
The convenience of the public must not be circumscribed by according to the word
necessity its strict meaning or an essential requisite.
The use of the word "necessity", in conjunction with "public convenience" in a
certificate of authorization to a public service entity to operate, does not in any
way modify the nature of such certification, or the requirements for the issuance of
the same. It is the law which determines the requisites for the issuance of such
certification, and not the title indicating the certificate.
o
54
55
Prima facie evidence of illegal use of electricity The prima facie presumption that will
authorize immediate disconnection will arise only upon the satisfaction of certain
requisites. One of these requisites is the personal witnessing and attestation by an officer of
the law or by an authorized ERB representative when the discovery was made.
Before immediate disconnection may be allowed
o That an ERB representative was allegedly present when the meter was examined in the
MERALCO laboratory will not cure the defect that he was not around when the discovery
of the illegal use of electricity.
o Had the law intended the presence of the owner or his/her representative to suffice, then it
should have said so. Embedded in our jurisprudence is the rule that courts may not
construe a statute that is free from doubt. Where the law is clear and unambiguous, it must
be taken to mean exactly what it says, and courts have no choice but to see to it that the
mandate is obeyed.
o The law says that before immediate disconnection may be allowed, the discovery of the
illegal use of electricity must have been personally witnessed and attested to by an
officer of the law or by an authorized ERB representative.
Contractual right to disconnect electrical service
o The Company reserves the right to discontinue service in case the Customer is in arrears in
the payment of bills or for failure to pay the adjusted bills in those cases where the meter
stopped or failed to register the correct amount of energy consumed, or for failure to
comply with any of these terms and conditions, or in case of or to prevent fraud upon the
Company.
o Before disconnection is made in case of or to prevent fraud, the Company may adjust the
bill of said Customer accordingly and if the adjusted bill is not paid, the Company may
disconnect the same.
o In case of disconnection, the provisions of Revised Order No. 1 of the former Public Service
Commission (now the Board of Energy) shall be observed. Any such suspension of service
shall not terminate the contract between the Company and the Customer.
Need to give notice of disconnection to an alleged delinquent customer
One can not deny the vital role which a public utility such as MERALCO,
having a monopoly of the supply of electrical power in Metro Manila and
some nearby municipalities, plays in the life of people living in such areas.
Electricity has become a necessity to most people in these areas, justifying
the exercise by the State of its regulatory power over the business of
supplying electrical service to the public, in which petitioner MERALCO is
engaged. Thus, the state may regulate, as it has done through Section 97 of
the Revised Order No. 1 of the Public Service Commission, the conditions
under which and the manner by which a public utility such as MERALCO
may effect a disconnection of service-e to a delinquent customer. Among
others, a prior written notice to the customer is required before
disconnection of the service. Failure to give such prior notice amounts to a
tort.
o
56
57
58
59
o
o
There is nothing in the Administrative Code which indicates that it bars the regulatory
body from approving rates without prior COA audit.
Rate-fixing calls for a technical examination and a specialized review of specific details which the
courts are ill-equipped to entersuch matters are primarily entrusted to the administrative
or regulatory authority.
Such findings on matters within their technical area of expertise are generally
accorded not only respect but finality if such findings are supported by substantial
evidence.
60
o
o
61