Laws Regulating Transportation

Establishments
Tourism Law
Learning Objectives:
1. Identify the laws affecting the transportation
sector
2. Identify the rights of passengers of
commercial transportation
3. Explain the relevance of these laws to the
promotion of tourism in the country
The primary law that governs common
carriers is the Civil Code of the Philippines as
clearly implied from Article 1766 thereof
which states that “ in all matters not regulated
by this Code, the rights and obligations of
common carriers shall be governed by the
Code of Commerce and special laws.
Art. 1732. Common carriers are persons,
corporations, firms or association engaged in
the business of carrying or transporting
passengers or goods or both, by land, water,
or air, for compensation, offering their services
to the public.
A common carrier is defined as one holding
itself out to the public as engaged in
transportation of freight or passenger for hire.
It is one who is in the business of transporting
goods or persons for hire, as a public utility.
A private carrier, in contrast, is not in the
business of transporting public employment,
but hires out to deliver goods (not
passengers), in cases.
Art. 1733. Common carriers, from the nature
of their business and for reasons of public
policy, are bound to observe extraordinary
diligence in the vigilance over the goods and
for the safety of the passengers transported by
them, according to all the circumstances of
each case.
Art. 1755. A common carrier is bound to carry
the passengers safely as far as human care
and foresight can provide, using the utmost
diligence of very cautious persons, with due
regard for all the circumstances.
Art. 1756. In case of death of or injuries to
passengers, common carriers are presumed to
have been at fault or to have acted
negligently, unless they prove that they
observed extraordinary diligence as prescribed
in Article 1733 and 1755.
Art. 1757. The responsibility of a common
carrier for the safety of passengers as required
in Articles 1733 and 1755 cannot be dispensed
with or lessened by stipulation, by the posting
of notices, by statements on tickets, or
otherwise.
 As soon as the passenger puts his foot on
the platform, the obligation of extraordinary
diligence of the common carrier begins. The
relation of carrier and passengers does not
cease at the moment the passenger alights
from the carrier’s 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 carrier’s premises. (La Mallorca vs
Hon. Court of Appeals, G.R. No. L-20761, July
27, 1966)
 A certificate of public convenience is not a
requirement in order for a common carrier to
incur liability. Such liability arises from the
moment a person or firm acts as a common
carrier, without regard to whether or not such
carrier has been granted a certificate of public
convenience or has complied with the
requirements of the applicable implementing
regulations. (Loadstar Shipping Co., Inc. vs
Court of Appeals, G.R. No. 131621, September
28, 1999)
 The term “extraordinary diligence” has
been defined as the standard of care required
of common carrier in bringing safely its
passengers (and goods) from one place to
another.
 In a contract of carriage of passengers, it is
the obligation of the common carrier to bring
the passengers safely to the point of
destination. If injured, or death occurs, the
presumption of negligence automatically
arises, and the common carrier can be held
liable if he fails to prove extraordinary
diligence for the duration of the carriage.
Art. 1759. Common carriers are liable for the
death or injuries to passengers through the
negligence or willful acts of the former’s
employees, although such employees may have
acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability of the common carriers does not
cease upon proof that they exercised the diligence
of a good father of a family in the selection and
supervision of their employees.
 For a bus company, due diligence in selection of
employees is not satisfied by the finding that the
applicant possessed a professional driver’s license.
The employer should also examine the applicant for
his qualifications, experience and record of service.
Due diligence in supervision, on the other hand,
requires the formulation of rules and regulations for
the guidance of employees and issuance of proper
instructions as well as actual implementation and
monitoring of consistent compliance with the rules.
For a shipping company, the vessel must be
considered seaworthy, adequately equipped for the
voyage and manned with a sufficient number of
competent officers and crews. (Trans-Asia Shipping
Lines, Inc., vs Court of Appeals, G.R. No. 118126,
March 4, 1996)
Enforcement of Liability of Common
Carriers
The liability of common carriers can be
enforced on the following causes of action:
1. In case of death or injury caused to
passengers, the victim may file a case of
breach of contract of carriage or culpa
contractual against the owner of the common
carrier.
2. In case of death or injury caused to a
stranger or pedestrian, the victim may file a
criminal complaint against the driver of the
common carrier for reckless imprudence
resulting in homicide and damage to property.
The victim may also file a civil suit against the
common carrier and its driver on the ground
of culpa aquiliana or quasi delict.
Damages Recoverable from Common
Carriers
In an action based on culpa contractual or
culpa aquiliana, the damage that are recoverable
are as follows:
1. Actual damages consist in expenses for
medicine, hospitalization, etc.
2. Unrealized profits are recoverable as
compensatory damages which shall be fixed by
determining the net yearly income of the injured
or deceased passenger and multiplying the
same by the number of years that he was
expected to live or lead a gainful existence
3. Moral damages may be awarded when the
mishap resulted in the death of a passenger,
or when the heirs of the deceased suffered
mental anguish, or when the carrier was guilty
of fraud or bad faith, even if death did not
result.
4. Exemplary damages or corrective damages
are awarded by way of example or correction
of the public good or when the common
carrier acted in wanton, reckless and
oppressive manner.
5. Award for death indemnity
6. Award for attorney’s fees may be awarded
when exemplary damages are awarded
7. Nominal damages in case moral damages
cannot be awarded without proof of the
carrier’s bad faith, ill will, malice or wanton
conduct
 The best evidence of a contract of carriage
is the passage ticket. Under our jurisprudence,
an airline, bus or shipping ticket is a contract
of adhesion considering that all the provisions
thereof are prepared and drafted only by the
carrier. The only participation left of the other
party is to affix his signature thereto. In such
situation, the Supreme Court ruled that the
terms thereof must be interpreted against the
party who drafted the same, in this case the
carrier.
 Such contracts of adhesion are not entirely
prohibited and are in fact binding regardless
of whether or not the passenger or shipper
had read the provisions thereof.
 Thus, it was held that even if the
passenger had not signed the plane ticket, he
is nevertheless bound by the provisions
thereof. Such provisions have been held to be
a part of the contract of carriage, valid and
binding upon the passenger regardless of the
latter’s lack of knowledge or assent to the
regulation. The one who adheres to the
contract is in reality free to reject it entirely; if
he adheres, he gives his consent. Even if the
conditions are printed in small letters does not
make the ticket or bill invalid.
 However, the courts will exercise greater
vigilance when dealing with contracts of
adhesion in that the said contracts must be
carefully scrutinized in order to protect the
weaker party from deceptive schemes
contained in ready made stipulations. This is
in recognition of Article 24 of the Civil Code
which mandates that “in all contractual,
property, or other relations when one of the
parties is at a disadvantage on account of his
moral dependence, ignorance, indigence,
mental weakness, tender age or other
handicap, the courts must be vigilant for his
protection.
Regulation of the Transportation Business
The Department of Transportation and
Communication (DOTC) is the primary policy,
planning, programming, regulating and
administrative entity of the Executive branch
of government in the promotion,
development and regulation of dependable
and coordinated networks of transportation
and communications systems as well as in the
fast, safe, efficient and reliable postal,
transportation and communications services.
It has the power, authority and technical
expertise to determine whether or not a
specific transportation or communications
project is necessary viable and beneficial to
the people.
Regulation of Air Transportation Business
On June 20, 1952, Republic Act no. 776,
otherwise known as the Civil Aeronautics Act
of the Philippines was enacted which defined
the powers and duties of the Civil Aeronautics
Board, personnel and the regulations of Civil
Aviation. On April 4, 1987, Executive Order
No. 125 was enacted creating the Air
Transportation Office.
The Civil Aeronautics Board (CAB) regulates
the economic aspect of air transportation and
has general supervision and regulation of and
jurisdiction and control over air carriers as
well as their property, property rights,
equipment, facilities and franchise. It has the
power to fix and determine reasonable rates,
charges or fares which an air carrier may
demand, collect or receive for any service in
connection with air commerce.
It also has the power to issue, deny, amend,
revise, alter, modify, cancel, suspend, revoke
any temporary permit or Certificate of Public
Convenience and Necessity (CPCN). In case of
foreign air carriers, the permit shall be issued
with the approval of the President of the
Republic of the Philippines.
 - Establish andThe Air
Transportation Office (ATO) is primarily
charged with the technical and
operational phase of civil aviation matters.
enforce rules and regulations for the inspection
and registration of all aircraft owned and
operated in the Phil. And all air facilities
- Administer and operate the Civil Aviation
Training Center (CATC)
- Investigate aircraft accidents