TRANSPORTATION LAW

First Philippine Industrial Corporation vs. Court of Appeals

300 SCRA 661, December 29, 1998

FACTS:

First Philippine Industrial Corporation (FPIC) is a pipeline operator with a government concession
granted under the Petroleum Act. It is engaged in the business of transporting petroleum products from
the Batangas refineries, via pipeline, to Sucat and Pandacan Terminals.

FPIC applied for a mayor's permit with the Office of the Mayor of Batangas City.

Pursuant of the Local Government Code (LGC), the respondent City Treasurer required petitioner to pay
a local tax.

FPIC paid the tax under protest. FPIC claims that it is a transportation contractor and contends that, as
such, the City of Batangas did not have the power to levy on transportation contractors under the LGC,
as the term "contractors" excludes transportation contractors.

The City Treasurer denied the protest contending that FCIP cannot be considered engaged in
transportation business because pipelines are not included in the term "common carrier" which
refers solely to ordinary carriers such as trucks, trains, ships and the like.

ISSUE: Whether FCIP, a pipeline operator, is a common carrier?

RULING:

YES. The definition of "common carriers" in the Civil Code makes no distinction as to the means of
transporting, as long as it is by land, water or air. It does not provide that the transportation of the
passengers or goods should be by motor vehicle.
TRANSPORTATION LAW
De Guzman vs. Court of Appeals
168 SCRA 612, December 22, 1988

FACTS:
Ernesto Cendana, a junk dealer, was primarily engaged in buy-and-sell of used bottles and scrap
metal in Pangasinan. Using two (2) six-wheeler trucks, he hauled these materials to Manila for
resale. On the return trip to Pangasinan, as a side-line, Cendana would load his vehicles with
cargo which various merchants wanted delivered to differing establishments in Pangasinan.

Pedro de Guzman entered into a contract with respondent to transport of 750 cartons of
Liberty filled milk from a warehouse in Makati to Petitioner's establishment in Urdaneta,
Pangasinan.

Respondent loaded in Makati the merchandise on to his trucks. On its way to Pangasinan, the
truck carrying 600 boxes of said merchandise was hijacked by armed men who took with them
the truck, its driver, his helper and the cargo; only 150 boxes were delivered to petitioner.

De Guzman argues that Cendana, as a common carrier, failed to exercise the extraordinary
diligence required of him by the law and therefore liable for the value of the undelivered goods.

Respondent refuted allegations that he was a common carrier and controverted any
responsibility for the value of the lost goods, such loss having been due to force majeure.


ISSUE: Whether it is a condition sine qua non to prove that a person or business entity
undertakes carrying of persons or good or both as his/its principal business in order to be
considered as a common carrier?

No. [Article 1732], makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as an ancillary
activity (in local Idiom as "a sideline"). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a regular or scheduled basis
and one offering such service on an occasional, episodic or unscheduled basis. Neither does
Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the
general community or population, and one who offers services or solicits business only from a
narrow segment of the general population.


TRANSPORTATION LAW
Erezo, et al. vs. Jepte
102 Phil. 103 , September 30, 1957
FACTS:

Aguedo Jepte is the registered owner of a six by six truck. The actual owner is Port Brokerage Corporation(PBC)
which registered in Jeptes name the trucks as a convenient arrangement so as to enable the corporation to pay
the registration fee with his backpay as a pre-war government employee.

While the truck was being driven by Rodolfo Espino, employee of PBC it collided with a taxicab resulting to the
untimely death of Ernesto Erezo.

The driver was found guilty of homicide through reckless negligence and was sentenced to pay the heirs of Erezo.
As the amount of the judgment could not be enforced Espino, Gaudioso Erezo, father of Ernesto, sued Jepte to
collect the amount of judgment.

Jepte denies liability for payment of said amount by claiming that he was not the actual owner at the time of the
accident.

ISSUE: Whether the registered owner of a motor vehicle is liable for injuries sustained by a third person even if it
was the employee of the actual owner who actually caused such injury?

RULING:

YES. The registered owner of a certificate of public convenience is liable to the public for the injuries or damages
suffered by passengers or third persons caused by the operation of said vehicle, even though the same had been
transferred to a third person.

The registered owner of any vehicle, even if not used for a public service, should primarily be responsible to the
public or to third persons for injuries caused the latter while the vehicle is being driven on the highways or streets.

The law does not relieve him directly of the responsibility that the law fixes and places upon him as an incident or
consequence of registration.


TRANSPORTATION LAW
Duavit vs. Court of Appeals
173 SCRA 490 , May 18, 1989

FACTS:

Gualberto Duavit is the actual and registered owner of a jeep.

Oscar Sabiniano took the jeep from the garage of defendant Duavit without the consent or authority of
the latter.

As Sabiniano was driving the same, the jeepney hit and bumped another jeepney in which Antonio
Sarmiento, Sr. and Virgilio Catuar were on board. These passengers sustained physical injuries.

Catuar and Sarmiento, Sr. sued both against Sabiniano and Duavit. In defense, Duavit insists that he is
not liable because Sabiniano never was his employee.

ISSUE: Whether the registered and actual owner of a vehicle, which figured in an accident, may be
held liable, when the said vehicle was taken and driven by another person without the consent or
knowledge of the owner thereof?

RULING:
No. An owner of a vehicle cannot be held liable for an accident involving the said vehicle if the same was
driven without his consent or knowledge and by a person not employed by him.

The jeep was virtually stolen from the petitioner's garage. To hold, therefore, the petitioner liable for
the accident caused by the negligence of Sabiniano who was neither his driver nor employee would be
absurd as it would be like holding liable the owner of a stolen vehicle for an accident caused by the
person who stole such vehicle.


TRANSPORTATION LAW
BA Finance Corporation vs. Court of Appeals
215 SCRA 715 , November 13, 1992

BA Finance Corporation (BAFC), the registered owner of an Isuzu ten-wheeler truck, leased out said
truck to Rock Component Philippines (Rock).

An accident occurred involving said ten-wheeler truck then driven by Rogelio Villar, an employee of Rock
which had physical possession of the Isuzu truck at the time of the accident.

BAFC seeks to divest itself of any responsibility by asseverating that there exists no employer-employee
relationship between BAFC and Villar and an owner of a vehicle cannot be held liable for an accident
involving the said vehicle if the same was driven by a person not employed by him.

ISSUE: Whether a lessor and registered owner of a motor vehicle may exculpate himself from liability
for injuries and damages to third persons arising from the negligent acts of the lessees employee?

No. The registered owner of any vehicle, even if not used for a public service, should primarily
responsible to the public or to the third persons for injuries caused the latter while the vehicle is being
driven on the highways or streets.

If the foregoing words of wisdom were applied in solving the circumstance whereof the vehicle had
been alienated or sold to another, there certainly can be no serious exception against utilizing the same
rationale to the antecedents of this case where the subject vehicle was merely leased by petitioner to
Rock Component Philippines, Inc., with petitioner retaining ownership over the vehicle.


TRANSPORTATION LAW
Perez vs. Gutierrez
53 SCRA 149, September 28, 1973


Fe Perez was a passenger of an AC jeepney registered under the name of the Josefina Gutierrez. Due to
the reckless negligence of its driver Leopoldo Cordero, the jeepney met an accident. Perez, who, as a
result of the accident was injured and hospitalized, sued Gutierrez for breach of contract of carriage.

Gutierrez on the other hand, dodged such responsibility to Panfilo Alajar, the actual owner, by purchase,
of the said passenger jeepney when the accident occurred and against whom she has filed a third-party
complaint.

Meanwhile, Panfilo Alajar disclaimed responsibility for the accident, alleging that (a) the mentioned sale
is null and void because it has not been registered with the Public Service Commission despite repeated
demands on Gutierrez.

ISSUE: Whether the registered owner-transferor, in a sale that has not been registered with the Public
Service Commission, remains liable for injuries caused to third persons through the negligent acts of
the transferees employees?

YES. The Public Service Act really requires the approval of the Public Service Commission in order that a
franchise, or any privileges pertaining thereto, may be sold or leased without infringing the certificate
issued to the grantee.

It follows that if the property covered by the franchise is transferred or leased to another without
obtaining the requisite approval, the transfer is not binding on the Public Service Commission and, in
contemplation of law, the grantee continues to be responsible under the franchise in relation to the
Commission and to the public for the consequences incident to the operation of the vehicle, one of
them being the collision under consideration.

In operating the truck without transfer thereof having been approved by the Public Service Commission,
the transferee acted merely as agent of the registered owner and should be responsible to him (the
registered owner), for any damages that he may cause the latter by his negligence.




TRANSPORTATION LAW
Lim vs. Court of Appeals
373 SCRA 394 , January 16, 2002

Donato Gonzales purchased an Isuzu passenger jeepney from Gomercino Vallarta, holder of a certificate
of public convenience for the operation of public utility vehicles.

While Gonzales continued offering the jeepney for public transport services he did not have the
registration of the vehicle transferred in his name nor did he secure for himself a certificate of public
convenience for its operation. Thus Vallarta remained on record as its registered owner and operator.

The jeepney figured out in an accident when it was by ten-wheeler-truck owned by petitioner Abelardo
Lim.

Lim denied liability by asserting that as the jeepney was registered in Vallartas name, it was Vallarta and
not Gonzales who was the real party in interest. According to petitioners, to recognize an operator
under the kabit system as the real party in interest and to countenance his claim for damages is utterly
subversive of public policy.

The kabit system is an arrangement whereby a person who has been granted a certificate of public
convenience allows other persons who own motor vehicles to operate them under his license,
sometimes for a fee or percentage of the earnings.

ISSUE: Whether the new owner of a passenger jeepney covered by a certificate of public convenience
has any legal personality to bring the action despite the fact that he is not the registered owner under
the certificate of public convenience?

Yes. For the safety of passengers and the public who may have been wronged and deceived through the
baneful kabit system, the registered owner of the vehicle is not allowed to prove that another person
has become the owner so that he may be thereby relieved of responsibility.

In the present case it is at once apparent that the evil sought to be prevented in enjoining the kabit
system does not exist. First, neither of the parties to the pernicious kabit system is being held liable for
damages. Second, the case arose from the negligenc e of another vehicle in using the public road to
whom no representation, or misrepresentation, as regards the ownership and operation of the
passenger jeepney was made and to whom no such representation, or misrepresentation, was
necessary. Thus it cannot be said that private respondent Gonzales and the registered owner of the
jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered
owner. Third, the riding public was not bothered or inconvenienced at the very least by the illegal
arrangement. On the contrary, it was private respondent himself who had been wronged and was
seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny
him his right.

In light of the foregoing, it is evident that private respondent has the right to proceed against petitioners
for the damage caused on his passenger jeepney as well as on his business. Any effort then to frustrate
his claim of damages by the ingenuity with which petitioners framed the issue should be discouraged, if
not repelled.

TRANSPORTATION LAW
Lita Enterprises, Inc. vs. IAC
129 SCRA 79, April 27, 1984

FACTS:

Spouses Nicasio M. Ocampo and Francisca Garcia purchased in installment from the Delta Motor Sales
Corporation five Toyota Corona Standard cars to be used as taxicabs.

Since they had no franchise to operate taxicabs, they contracted with petitioner Lita Enterprises, Inc.
(Lita) for the use of the latter's certificate of public convenience in consideration of an initial payment
and monthly rentals. Aforesaid cars were registered in the name of petitioner Lita Enterprises, Inc.
Possession, however, remained with the spouses Ocampo who operated and maintained the same
under the name Acme Taxi, petitioner's trade name.

One of said taxicabs driven by spouses employee collided with a motorcycle whose driver died from the
head injuries sustained therefrom. A civil case for damages was instituted by heirs of the victim against
Lita as registered owner of the taxicab.

Thereafter, respondent Ocampo decided to register his taxicabs in his name. He requested the manager
of petitioner Lita to turn over the registration papers to him. This refusal moved respondents to file a
complaint against Lita for reconveyance of motor vehicles with damages.

For its part, Lita prays that private respondents be declared liable to petitioner for whatever amount the
latter has paid or was declared liable to heirs of the victim who died as a result of the gross negligence
of private respondents' driver while driving one private respondents taxicabs.

ISSUE: Whether parties to the kabit system are entitle to recover from either party ?

NO. Unquestionably, the parties herein operated under an arrangement, comonly known as the "kabit
system", whereby a person who has been granted a certificate of convenience allows another person
who owns motors vehicles to operate under such franchise for a fee. Although not outrightly penalized
as a criminal offense, the "kabit system" is invariably recognized as being contrary to public policy and,
therefore, void and inexistent under Article 1409 of the Civil Code.

It is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will
leave them both where it finds them. The rule has sometimes been laid down as though it was equally
universal, that where the parties are in pari delicto, no affirmative relief of any kind will be given to one
against the other."

TRANSPORTATION LAW
La Mallorca vs. Court of Appeals, et al.
17 SCRA 739, July 27, 1966

FACTS:

On December 20, 1953, at about noontime, Mariano Beltran, his wife and minor daughter namely
Milagros, 13 years old, Raquel, about 4-1/2 years old, and Fe, over 2 years old, boarded the Pambusco
Bus, owned and operated by the La Mallorca, at San Fernando, Pampanga, bound for Anao, Mexico,
Pampanga.

When the bus reached Anao, the family alighted from the bus. Beltran led his companions to a shaded
spot on the left pedestrians side of the road about four or five meters away from the vehicle.
Afterwards, Beltran returned to the bus to get his other bayong which he had left behind, but in so
doing, his daughter Raquel followed him unnoticed. While Beltran was on the running board of the bus
waiting for the conductor to hand him his bayong he left, the bus, whose motor was not shut off while
unloading, suddenly started moving forward, notwithstanding the fact that the conductor has not given
the driver the customary signal to start.

Sensing that the bus was again in motion, Beltran immediately jumped from the running board without
getting his bayong from the conductor. As he landed, he saw people beginning to gather around the
body of his child, Raquel, lying prostrate on the ground, her skull, crushed, and without life. The child
was run over by same bus.

For the death of their said child, the plaintiffs commenced the present suit against the defendant
seeking to recover from the latter moral damages and actual damages and attorneys fees arising from
liability for breach of contract of carriage.

La Mallorca claimed that there could not be a breach of contract in the case, for the reason that when
the child met her death, she was no longer a passenger of the bus involved in the incident and,
therefore, the contract of carriage had already terminated.

ISSUE: Whether the liability of the carrier for safety of its passenger under the contract of carriage
also persisted even after the passenger has alighted?

YES. It has been recognized as a rule that the relation of carrier and passenger does not cease at the
moment the passenger alights from the carriers vehicle at a place selected by the carrier at the point of
destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to
leave the carriers premises. And, what is a reasonable time or a reasonable delay within this rule is to
be determined from all the circumstances.

In the present case, the father returned to the bus to get one of his baggages which was not unloaded
when they alighted from the bus. Raquel, the child that she was, must have followed the father.
However, although the father was still on the running board of the bus awaiting for the conductor to
hand him the bag or bayong, the bus started to run, so that even he (the father) had to jump down from
the moving vehicle. It was at this instance that the child, who must be near the bus, was run over and
killed.


TRANSPORTATION LAW
Kapalaran Bus Liners v. Cornado
176 SCRA 792, August 25, 1989


An accident happened on the National Highway involving the jeepney driven by Lope Grajera and a bus
owned by Kapalaran Bus Liners (KBL) and driven by its regular driver Virgillo Llamoso.

Grajera was then corning from Pila, Laguna on its way towards the direction of Sta. Cruz, traversing
the old highway. As it reached the intersection where there is a traffic sign 'yield,' it stopped and
cautiously treated the intersection as a "Thru Stop' street, which it is not. The KBL bus was on its
way from Sta. Cruz, Laguna,

The bus driver, who was driving at a speed too high to be safe and proper at or near an intersection
on the highway, and in any case too high to be able to slow down and stop behind the cars which
had preceded it and which had stopped at the intersection, chose to swerve to the left lane and
overtake such preceding vehicles, entered the intersection and directly smashed into the jeepney
within the intersection.

The trial court rendered a judgment in favor of private respondents and ordered KBL to pay defendants
the sum of P10, 000.00 in the concept of exemplary damages. The Court of Appeals (CA) however
removed such award.

ISSUE: Whether the award of exemplary damages is proper?

YES, the award of exemplary damages by the trial court was quite proper and should not only be
restored but augmented in the present case.

The law requires petitioner as common carrier to exercise extraordinary diligence in carrying and
transporting their passenger safely "as far as human care and foresight can proved, using the utmost
diligence of very cautious persons, with due regard for all circumstances." In requiring the highest
possible degree of diligence from common carriers and creating a presumption of negligence against
them, the law compels them to curb the recklessness of their drivers

The law seeks to stop and prevent the slaughter and maiming of people (whether passengers or not)
and the destruction of property (whether freight or not) on our highways by buses, the very size and
power of which seem often to inflame the minds of their drivers. Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary damages in cases of quasi-delicts "if the defendant acted with
gross negligence."