Luque v Villegas Facts: Petitioners ( who are passengers from Cavite and Batangas who ride on buses to and

from their province and Manila) and some public service operators of buses and jeeps assail the validity of Ordinance 4986and Administrative Order 1. Ordinance 4986 states that PUB and PUJs shall be allowed to enter Manila only from 6:30am to 8:30pm every day except Sundays and holidays. Petitioners contend that since they possess a valid CPC, they have already acquired a vested right to operate. Administrative Order 1 issued by Commissioner of Public Service states that all jeeps authorized to operate from Manila to any point in Luzon, beyond the perimeter of Greater Manila, shall carry the words "For Provincial Operation". Issue: 1. Whether or not the said regulations are valid. 2. Whether or not Ordinance 4986 destroys vested rights to operate in Manila. Held: 1. YES! Using the doctrine in Lagman vs. City of Manila, Petitioner's Certificate of Public Convenience was issued subject to the condition that operators shall observe and comply with all the rules and regulations of the PSC relative to PUB service. The purpose of the ban is to minimize the problem in Manila and the traffic congestion, delays and accidents resulting from the free entry into the streets of Manila and the operation around said streets. Both Ordinance 4986 and AO 1 fit into the concept of promotion and regulation of general welfare. 2. NO! A vested right is some right or interest in the property which has become fixed and established and is no longer open to doubt or controversy. As far as the State is concerned, a CPC constitutes neither a franchise nor a contract, confers no property right, and is a mere license or privilege. The holder does not acquire a property right in the route covered, nor does it confer upon the holder any proprietary right/interest/franchise in the public highways. Neither do bus passengers have a vested right to be transported directly to Manila. The alleged right is dependent upon the manner public services are allowed to operate within a given area. It is no argument that the passengers enjoyed the privilege of having been continuously transported even before outbreak of war. Times have changed and vehicles have increased. Traffic congestion has moved from worse to critical. Hence, there is a need to regulate the operation of public services. REPUBLIC V. MANILA ELECTRIC COMPANY 391 SCRA 700 (2002) Regulation of rates to be charged by public utilities is founded upon the police power of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only becomes subject to regulation. Submission to regulation may be withdrawn by the owner by discontinuing use but as long as the use of the property is continued, the same is subject to public regulation. In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the

right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return omn public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests. Luzon Stevedoring Co. Inc. and Visayan Stevedore Transportation Co. vs. Public Service Commission 93 Phil. 735 | Tuason, J. Facts: Petitioners are engaged in the stevedoring or lighterage and harbor towage business. They are also engaged in interisland service which consist of hauling cargoes such as sugar, oil, fertilizer and other commercial commodities. There is no fixed route in the transportation of these cargoes, the same being left at the indication of the owner or shipper of the goods. Petitioners, in their hauling business, serve only a limited portion of the public. The Philippine Shipowners Association complained to the Public Service Commission that petitioners were engaged in the transportation of cargo in the Philippines for hire or compensation without authority or approval of the Commission. The rates petitioners charged resulted in ruinous competition. The Public Service Commission restrained petitioners from further operating their watercraft to transport goods for hire or compensation between points in the Philippines until the commission approves the rates they propose to charge. Issue: Whether the petitioners fall under the definition in Section 13 (b) of the Public Service Law (C.A. Act No. 146)? Held: Yes. It is not necessary under said definition that one holds himself out as serving or willing to serve the public in order to be considered public service. It is not necessary, in order to be a public service, that an organization be dedicated to public use, i.e., ready and willing to serve the public as a class. It is only necessary that it must in some way be impressed with a public interest; and whether the operation of a business is a public utility depends upon whether or not the service rendered by it is of a public character and of public consequence and concern. It can scarcely be denied that the contracts between the owners of the barges and the owners of the cargo at bar were ordinary contracts of transportation and not of lease. Petitioners watercraft was manned entirely by crews in their employ and payroll, and the operation of the said craft was under their direction and control, the customers assuming no responsibility for the goods handled on the barges. C.A. No. 146 clearly declares that an enterprise of any of the kinds therein enumerated is a public service if conducted for hire or compensation even if the operator deals only with a portion of the public or limited clientele. Public utility, even where the term is not defined by statute, is not determined by the number of people actually served. The Public Service Law was enacted not only to protect the public against unreasonable charges and poor, inefficient service, but also to prevent ruinous competition. Just as the legislature may not declare a company or enterprise to be a public utility when it is not inherently such, a public utility may not evade control and supervision of its operation by the government by selecting its customers under the guise of private transactions.

Doctrine: An enterprise of any of the kinds enumerated in the Public Service Law is a public service if conducted for hire or compensation even if the operator deals only with a portion of the public or with limited clientele. Mirasol v. Dollar Facts:

Amando Mirasol was the owner of two cases of books shipped by The Robert Dollar Co., steamship, President Garfield, from New York, in good order. Upon arrival in Manila, Both cases were in bad order and damage condition. Issues: 1. Whether Mirasol was bound by the liability limitation clause 2. Whether Dollar was liable for the damaged goods Ruling: 1. No. Numerous jurisprudence was cited by the SC, stating that a liability limitation clause would be unreasonable and in conflict with public policy. 2. Yes. From the time the shipment was boarded until it was delivered, the boxes were under the control and supervision of Dollar. Having admitted that the boxes were damaged while in transit, and under its possession, the burden of proof now shifts to prove that the damage was caused by reason of some fact, which exempts it from liability. This fact was not proven by Dollar, which makes it liable for damages. The statement that it was destroyed by seawater is not evidence that it was damaged by force majeure, or beyond the control of Dollar. First Philippine Industrial Corp. vs. CA Facts: Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January 1995, petitioner applied for mayors permit in Batangas. However, the Treasurer required petitioner to pay a local tax based on gross receipts amounting to P956,076.04. In order not to hamper its operations, petitioner paid the taxes for the first quarter of 1993 amounting to P239,019.01 under protest. On January 20, 1994, petitioner filed a letter-protest to the City Treasurer, claiming that it is exempt from local tax since it is engaged in transportation business. The respondent City Treasurer denied the protest, thus, petitioner filed a complaint before the Regional Trial Court of Batangas for tax refund. Respondents assert that pipelines are not included in the term common carrier which refers solely to ordinary carriers or motor vehicles. The trial court dismissed the complaint, and such was affirmed by the Court of Appeals. Issue: Whether a pipeline business is included in the term common carrier so as to entitle the petitioner to the exemption Held: Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm 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." The test for determining whether a party is a common carrier of goods is: (1) He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation; (2) He must undertake to carry goods of the kind to which his business is confined; (3) He must undertake to carry by the method by which his business is conducted and over his established

roads; and (4) The transportation must be for hire. Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier. CEBU SALVAGE CORPORATION VS. PHILIPPINE HOME ASSURANCE ( A case on Bill of Lading ) FACTS OF THE CASE: Petitioner Cebu Salvage Corp. (as carrier) and Maria Cristina Chemicals Industries, Inc. [MCCII] (as charterer) entered into a voyage charter where petitioner was to load 800 - 1,100 metric tons of silica quartz on board M/T Espiritu Santo for transport and discharge from NegrosOccidental to Misamis Oriental, to consignee Ferrochrome Phils., Inc.-However, the shipment never reached its destination because the vesselsank resulting in the total loss of the cargo.- MCII filed a claim fo r the loss of the shipment with its insurer,respondent Philippine Home Assurance Corp.-Respondent paid the claim and was subrogated to the rights of MCCII,after which it filed a case against petitioner for reimbursement of the amount it paid MCCII.-TC and CA: ordered petitioner to pay respondent. ISSUE: Can a carrier may be held liable for the loss of cargo resulting from the sinking of a ship it doesnt own? RULING: YES. Petitioner argues the agreement was just a contract of hire where MCCII hired the vessel from its owner, ALS Timber. Since it wasnt the owner of the vessel, it didnt have control and supervision over it and its crew. Thus,it shouldnt be held liable. 1.Petitioner and MCCII entered into a voyage charter, a.k.a contract of affreightment where the ship was leased for a single voyage for theconveyance of the goods, in consideration of the payment of freight.Under a voyage charter, the shipowner retains possession, command andnavigation of the ship, the charterer/freighter just has the use of the spacein the vessel in return for his payment of freight. An owner who retainspossession of the ship remains liable as carrier and must answer forloss or non-delivery of the goods received for transportation. 2. The agreement parties signed was a contract of carriage under which the petitioner was a common carrier . From the nature of their business and reasons of public policy, common carriers are bound to observe extraordinary diligence over the goods they transport according to the circumstances of each case . In case of loss of the goods, the common carriers are responsible, unless they can prove the causes under Art. 1734 CC or that they observed extraordinary diligence. 3. In this case, Petitioner was the one which contracted with MCCII for the transport of the cargo. It had control over what vessel it would use. The fact that it did not own the vessel it decided to use to consummate the contract of carriage didnt negate its character and duties as common carrier. The bill of lading issued by ALS was just a receipt to evidence the fact that the goods have been received for transportation. It is true that a billof lading may serve as the contract of carriage between the parties but it cannot prevail over the express provision of the voyage charter. The voyage charter stipulated that cargo insurance was for the charterers account. This just means that the

charterer would have the goods insured. It couldnt exculpate the carrier from liability for the breach of its contract of carriage. MCCII never dealt with ALS and yet petitioner insists that MCCII should sue ALS for reimbursement for its loss. To permit a common carrier toescape its responsibility for the goods it agreed to transport would derogate from the carriers duty of extraordinary diligence. Philam Gen Vs PKS Facts: Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS shipping company (PKS) to transport its 75,000 bags of cement. DUMC insured the full amount of the goods with the petitioner insurance company (Philamgen). Ironically, the barge sank bringing down the entire cargo of 75,000 bags of cement. DUMC filed a formal claim for the entire amount of insurance, to which Philamgen promptly paid. Philamgen then sought a reimbursement of the amount it paid to DUMC but the PKS refused to pay, which prompted Philamgen to file a suit against PKS. The trial court, finding the cause of the loss to be through fortuitous event, dismissed the complaint filed. Philamgen interposed an appeal to the Court of Appeals which affirmed in toto the decision of the trial court. In this appeal before the Supreme Court, Philamgen contended that the appellate court committed patent error in ruling that PKS is not a common carrier and it is not liable for the loss of the subject cargo. According to the Supreme Court, the issue of whether a carrier is private or common carrier on the basis of facts found by the trial court or the appellate court can be a valid and reviewable question of law. Contrary to the conclusion made by the appellate court, its factual findings indicated that PKS engaged itself in the business of carrying goods for others, although for a limited clientele, undertaking to carry such goods for a fee. Hence, the Court found PKS to be a common carrier. However, the Court also found that PKS exercised the proper diligence demanded of a common carrier. The factual findings of the appellate court were strengthened by the Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise Load Line Certificate, which attested to the seaworthiness of the vessel involved in this case. Hence, the Court found no error in the judgment made by the appellate court in absolving PKS from liability for the loss of the DUMC cargo. Doctrine: Much of the distinction between a "common or public carrier" and a "private or special carrier" lies in the character of the business, such that if the undertaking is an isolated transaction, not a part of the business or occupation, and the carrier does not hold itself out to carry the goods for the general public or to a limited clientele, although involving the carriage of goods for a fee, the person or corporation providing such service could very well be just a private carrier. A typical case is that of a charter party which includes both the vessel and its crew, such as in a bareboat or demise, where the charterer obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages and gets the control of the vessel and its crew. DE GUZMAN vs. CA Facts:Respondent Ernesto Cendana was engaged in buying up used bottles and scrap metal in Pangasinan. After collection, respondent would bring such material to Manila for resale. He utilized (2) two six-wheelers trucks which he owned for the purpose. Upon returning to Pangasinan, he would load his vehicle with cargo belonging to different merchants for delivery to different establishments in Pangasisnan for which respondent charged a freight fee. Sometime in November 1970, petitioner Pedro de Guzman, a merchant and dealer of General Milk Company Inc. in Pangasinan contracted with respondent for hauling 750 cartons of milk. Unfortunately, only 150 cartons

were delivered, as the other 600 cartons were intercepted by hijackers along Marcos Highway. Hence, petitioner commenced an action against private respondent. In his defense, respondent argued that he cannot be held liable due to force majeure, and that he is not a common carrier, hence not required to exercise extraordinary diligence. Issues: 1. Whether or not respondent is a common carrier. 2. Whether or not respondent can be held liable for loss of the 600 cartons of milk due to force majeure. Held: 1. Respondent is a common carrier. Article 1732 of the New Civil Code does not distinguish 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. It also avoids a distinction between a person or enterprise offering transportation services on a regular or scheduled basis and one offering such services on an occasional, episodic, and unscheduled basis. 2. The court ruled in the affirmative. The circumstances do not fall under the exemption from liability as enumerated in Article 1734 of the Civil Code. The general rule is established by the article that common carriers are responsible for the loss, destruction or deterioration of the goods which they carry, unless the same is due to any of the following causes only: a. Flood, storm, earthquake, lightning or other natural disasters; b. Act of the public enemy, whether international or civil; c. Act or omission of the shipper or owner of the goods; d. Character of the goods or defects in the packing; e. Order or act of competent public authority.