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Kilusang Mayo Uno Labor Center v. Garcia Jr. For all intents and purposes, they are the
(1994) same and are used interchangeably.
In determining public need, the presumption However, public utility is a broader concept
of need for a service shall be deemed in favor of that embraces public service. A public service is
the applicant. The burden of proving that there is necessarily a public utility, but not all public utilities
no need for a proposed service shall be with the are public services.
oppositor(s).
Public convenience and necessity exists when WHEN IS A PUBLIC UTILITY NOT A PUBLIC
the proposed facility or service meets a reasonable SERVICE?
want of the public and supply a need which the
existing facilities do not adequately supply. The If it is not included in the enumeration in the
existence or nonexistence of public convenience Public Service Act (CA 146 Sec. 13(b)) and Albano
and necessity is therefore a question of fact that v. Reyes.
must be established by evidence, real and/or
testimonial; empirical data; statistics and such HOW DO THEY DIFFER IN CONSTITUTIONAL
other means necessary, in a public hearing RESTRICTIONS AND REQUIREMENTS?
conducted for that purpose. The object and
purpose of such procedure, among other things, is If a business is a public utility, then it is
to look out for, and protect, the interests of both subject to the limitations and restrictions provided
the public and the existing transport operators. for in the 1987 Constitution (Art 12 Secs.
11,17,18,19) Since a public service is necessarily a
public utility, therefore public services are subject
SECTION 4 SECTION 7
The Public Service Commissioner shall receive an The Secretary of the Commission, under the
annual compensation of thirteen thousand pesos; direction of the Commissioner, shall have charge of
and each of the Associate Commissioners an the administrative business of the Commission and
annual compensation of twelve thousand pesos. shall perform such other duties as may be required
The Commissioners shall be assisted by one chief of him. He shall be the recorder and official
attorney, one finance and rate regulation officer, reporter of the proceedings of the Commission and
one chief utilities regulation engineer, one chief shall have authority to administer oaths in all
accountant, one transportation regulation chief, matters coming under the jurisdiction of the
one secretary of the Public Service Commission, Commission. He shall be the custodian of the
and three public utilities advisers who shall receive records, maps, profiles, tariffs, itineraries, reports,
an annual compensation of not less than ten and any other documents and papers filed with the
thousand eight hundred pesos each; five assistant Commission or entrusted to his care and shall be
chiefs of division who shall receive an annual responsible therefor to the Commission. He shall
compensation of not less than nine thousand six have authority to designate from time to time any
hundred pesos each; twelve attorneys who shall of his delegates to perform the duties of Deputy
receive an annual compensation of not less than Secretary with any of the Commissioners.
nine thousand pesos each; and a technical and
confidential staff to be composed of two certified SECTION 8
public accounts, two electrical engineers, two The Commission shall furnish the Secretary such of
mechanical or communication engineers, and two its findings and decisions as in its judgment may be
special assistants who shall receive an annual of general public interest; the Secretary shall
compensation of not less than seven thousand two compile the same for the purpose of publication in
hundred pesos each. (As amended by Republic Act a series of volumes to be designated "Reports of
Nos. 723, 2677 and 3792) the Public Service Commission of the Philippines,"
which shall be published in such form and manner
SECTION 5 as may be best adapted for public information and
The Public Service Commissioner, the Associate use, and such authorized publications shall be
Public Service Commissioners, and all other officers competent evidence of the reports and decisions of
and employees of the Public Service Commission the Commission therein contained without any
shall enjoy the same privileges and rights as the further proof or authentication thereof.
officer and employees of the classified civil service
of the Government of the Philippines. They shall SECTION 9
also be entitled to receive from the Government of No member or employee of the Commission shall
the Philippines their necessary travelling expenses have any official or professional relation with any
while travelling on the business of the Commission, public service as herein defined, or hold any office
which shall be paid on proper voucher therefor, of profit or trust with the Government of the
approved by the Secretary of Justice, out of funds Philippines.
appropriated for the contingent expenses of the
Commission. SECTION 10
When the exigency of the service so requires and The Commission shall have its office in the City of
with the approval of the Secretary of Justice, and Manila or at such other place as may be
subject to the provisions of Commonwealth Act designated, and may hold hearings on any
Numbered Two hundred forty-six, as amended, proceedings at such times and places, within the
funds may be set aside from the appropriations Philippines, as it may provide by order in writing:
provided for the Commission and/or from the fees Provided, That during the months of April and May
collected under Section forty of this Act to defray of each year, at least three Commissioners shall be
the expenses to be incurred by the Public Service on vacation in such manner that once every two
Commissioner or any of the Associate years at least three of them shall be on duty during
Commissioners, officers or employees of the April and May: Provided, however, That in the
Commission to be designated by the interest of public service, the Secretary of Justice
Commissioner, with the approval of the Secretary may require any or all the Commissioners not on
of Justice, in the study of modern trends in duty to render services and perform their duties
supervision and regulation of public services. (As during the vacation months. (As amended by
amended by Republic Act No. 3792) Republic Act Nos. 176 and 3792)
Raymundo v. Luneta Motor Corporation How do you know whether there is ruinous
(1933) competition enough for the prior operator rule to
The Public Service Law, Act No. 3108, as take effect?
amended, authorizes certificates of public Ruinous competition means that there is
convenience to be secured by public service actual ruin of the business of the operator; that the
operators from the PSC. A CPC granted to the existing operator will not gain enough profits if
owner or operator of public service motor vehicles another person is allowed to enter the business;
grants a right in the nature of a limited franchise. that which will result in the deprivation of sufficient
The Code of Civil Procedure establishes the gain in respect of reasonable return of investment,
general rule that "property, both real and personal, therefore the oppositor, alleging this, must show
or any interest therein of the judgment debtor, not that he will be deprived of a reasonable return on
exempt by law, and all property and rights of his investment.
property seized and held under attachment in the
action, shall be liable to execution." The statutory The mere possibility of reduction in the
exemptions do not include franchises or earnings of the business or the deterioration in the
certificates; of public convenience. The word income of his business is not sufficient to prove
"property" as used in section 450 of the Code of ruinous competition. It must be shown that the
Civil Procedure comprehends every species of title, business would not have sufficient gains to pay a
inchoate or complete, legal or equitable. The TEST fair rate of interest on his capital investments.
to determine whether or not property can be
attached and sold upon execution is whether the Does the prior operator rule create a monopoly?
judgment debtor has such a beneficial interest Legally speaking, there cannot be a monopoly
therein that he can sell or otherwise dispose of it when a property is operated as a public utility. The
for value. prior operator rule does not encourage a monopoly
Now the Public Service Law permits the PSC because the theory is that one operator keeps the
to approve the sale, alienation, mortgaging, prices low.
encumbering, or leasing of property, franchises,
privileges, or rights or any part thereof (sec. 16 Batangas Transportation Co. v. Cayetano
[h]), and in practice the purchase and sale of Orlanes (1928)
certificates of public convenience has been
permitted by the PSC. If the holder of a CPC can So long as the 1st licensee keeps and performs
sell it voluntarily, there is no valid reason why the the terms and conditions of its license and complies
same certificate cannot be taken and sold with the reasonable rules and regulations of the
involuntarily pursuant to court process. Commission and meets the demands of the public,
CPCs secured by public service operators are liable it should have more or less of a bested and
to execution, and the Public Service Commission is preferential right over a person who seeks to
authorized to approve the transfer of the acquire another and a later license over same
certificates of public convenience to the execution route. Otherwise, the first licensee would not have
creditor. protection on his investment and would be subject
to ruinous competition and this defeat the very
What is the prior operator rule? purpose and intent for the PSC was created.
The prior operator rule works to protect the
prior operator if it maintains an adequate service San Pablo v. Pantranco (1987)
and is able to meet the demands of the public. His Before private respondent may be issued a
or her investment is protected by not allowing a franchise or CPC for the operation of the said
subsequent operator to be granted a license for the service as a common carrier, it must comply with
same route. The rationale for this rule is for the the usual requirements of filing an application,
preservation of public convenience and to prevent payment of the fees, publication, adducing
ruinous competition. evidence at a hearing and affording the oppositors
the opportunity to be heard, among others, as
What are some of the instances where the prior provided by law. Considering the environmental
operator rule does NOT apply? circumstances of the case, the conveyance of
The prior operator rule does not apply when passengers, trucks and cargo from Matnog to Allen
the CPC or CPCN granted to the applicant is a is certainly not a ferry boat service but a coastwise
maiden franchise that covers a new route, even if it or interisland shipping service. Under no
overlaps with the route of the prior operator. circumstance can the sea between Matnog and
Allen be considered a continuation of the highway,
The prior operator rule is inapplicable where Matnog and Allen are separated by an open sea. Its
the corporate existence of the prior operator has CPC as a bus transportation cannot be merely
expired. amended to include this water service under the
guise that it is a mere private ferry service.
Regular operators are preferred over irregular
operators. What is an example of the “kabit system”?
Unless otherwise indicated, reference is to COMMON - It holds itself out as ready to engage
the Civil Code in the transportation of goods or persons for hire
as a public employment and not as a casual
A. In General occupation whether:
Ynchausti vs. Dexter (1920) What are the requisites for exemption due to
The mere proof of delivery of goods in good natural disaster?
order to a carrier, and of their arrival at the place 1. The natural disaster must have been the
of destination in bad order, makes out a prima proximate and only cause
facie case against the carrier, so that if no 2. The common carrier must exercise due
explanation is given as to how the injury occurred, diligence to prevent or minimize the loss
the carrier must be held responsible. It is before, during and after the occurrence of the
incumbent upon the carrier to prove that the loss flood, storm or natural disaster
was due to accident or some other circumstance 3. The common carrier must not have been guilty
inconsistent with its liability. of delay
4. The shipment was at shipper’s risk
2. EXEMPTION FROM LIABILITY
Tan Chiong Sian v. Inchausti & Co. (1912)
NATURAL DISASTER Loss of a ship and of its cargo, in a wreck due to
accident or force majeure must, as a general rule,
Art. 1734 fall upon their respective owners, except in cases
Common carriers are responsible for the loss, where the wrecking or stranding of the vessel
destruction, or deterioration of the goods, unless occurred through malice, carelessness or lack of
the same is due to any of the following causes skill on the part of the captain and in the remaining
only: cases indicated in article 841 of the Code of
(1) Flood, storm, earthquake, lightning, or other Commerce.
natural disaster or calamity; Under article 361 of the Code of Commerce
transportation of merchandise is for account, risk
Art. 1739 and hazard of the shipper, unless the contrary has
In order that the common carrier may be been expressly stipulated. The carrier is exempt
exempted from responsibility, the natural disaster from liability if he proves, as it is incumbent upon
must have been the proximate and only cause of him to do, that the loss or destruction of the
the loss. However, the common carrier must merchandise was due to accident and force
exercise due diligence to prevent or minimize loss majeure and not to fraud, fault, or negligence on
before, during and after the occurrence of flood, the part of the captain or owners of the ship.
storm or other natural disaster in order that the
common carrier may be exempted from liability for Martini v. Macondray (1919)
the loss, destruction, or deterioration of the goods. In every contract of affreightment, losses by the
The same duty is incumbent upon the common dangers of the seas are excepted from the risks
carrier in case of an act of the public enemy w/c the master takes upon himself, whether the
referred to in Article 1734, No. 2. exception is expressed in the contract or not. The
exception is made by law, & falls whether or not
Art. 1740 the general principle that no one is responsible for
If the common carrier negligently incurs in delay in fortuitous events & accidents of major force. But
transporting the goods, a natural disaster shall not the general law is subject to an exception, that
free such carrier from responsibility. when the inevitable accident is preceded by fault of
the debtor or person bound, without which it would
not have happened, then he becomes responsible
for it.
The master is responsible for the safe & proper
stowage of the cargo, & there is no doubt that by
the general maritime law he is bound to secure the
cargo safely under deck. If the master carries
goods on deck w/o the consent of the shipper, he
does it at his own risk. If they are damaged or lost
in consequence of their being thus exposed, he
cannot protect himself from responsibility by
showing that they were damaged or lost by the
dangers of the seas. When the shipper consents
Saludo v. CA
The lamentable actuations of TWA's employees
leave much to be desired, particularly so in the
face of petitioners' grief over the death of their
mother, exacerbated by the tension and anxiety
wrought by the impasse and confusion over the
failure to ascertain over an appreciable period of
time what happened to her remains.
Airline companies are hereby sternly admonished
that it is their duty not only to cursorily instruct but
to strictly require their personnel to be more
accommodating towards customers, passengers
and the general public.
Art. 2208
In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs,
cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has
compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution
against the plaintiff;
(4) In case of a clearly unfounded civil action or
proceeding against the plaintiff;
(5) Where the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of
household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's
compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability
arising from a crime;
(10) When at least double judicial costs are
awarded;
(11) In any other case where the court deems it
just and equitable that attorney's fees and
expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of
litigation must be reasonable.
Art. 2210
Interest may, in the discretion of the court, be
allowed upon damages awarded for breach of
contract.
Art. 2212
Interest due shall earn legal interest from the time
it is judicially demanded, although the obligation
may be silent upon this point. (1109a)
ARTICLE 375
The goods transported shall be specifically
obligated to answer for the transportation charges
and for the expenses and fees caused by the same
during their transportations, or until the time of
their delivery.
This special right shall be limited to eight days
after the delivery has been made, and after said
prescription the carrier shall have no further right
of action than that corresponding to an ordinary
creditor.
ARTICLE 376
The preference of the carrier to the payment of
what is due him for the transportation and
expenses of the goods delivered to the consignee
shall not be affected by the bankruptcy of the
latter, provided the action is brought within the
eight days mentioned in the foregoing article.
4. PRESCRIPTION OF ACTION
Review Committee
I
Justin Christopher C. Mendoza [head]
Benjamin S. Luis . Ma. Carmen L.
Subject Committee [Election
Law] I Jardeleza
Mildred Yovela S. Umali . May Tifanie H.
Gerona
Christina Eden M. Rondario
Armi Bayot [head] . Chino Baybay
I
[deputy]
Information Management
Theresa Roldan . Lem Arenas . Mitch
Committee
Lim
Jen Lee . Keisie Marfil