LEGAL ASPECTS IN TOURISM AND HOSPITALITY

TRANSPORTATION LAW

Law on Common Carriers

The primary law that governs common carriers is the Civil Code of the Philippines as clearly implied in
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 Commence and special laws."

The Law

Article 1732. Common carriers are persons, corporations, firms or occasions 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.

Discussion of the Law

A common carrier is defined as one holding itself out to the public as engaged in the 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 particular cases. Both the Civil Code and Code of Commerce
give clear-cut divisions between contracts of carriage of cargo and contracts of carriage of passengers,
because the rights and defenses in each kind of contracts are different from the other.

Nature of Contract of Carriage

A contract to transport passengers is quite different in kind and degree from any other contractual
relation, and this is because of the relation which an air carrier sustains with the public. It invites people
to avail the comforts and advantages it offers. The contract of carriage therefore, generates a relation
attended with a public duty. Neglect or malfeasance of the carrier's employees naturally could give ground
for an action for damages.

Responsibility of Common Carriers

The Law

Article 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.

Article 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.

Article 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 Articles 1733 and 1755.

Article 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.

Discussion of the Law

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 passenger 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.
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.

The term "extraordinary diligence" has been defined as the standard of care required of common carrier
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.

Case: Fortune Express is a bus company in Northern Mindanao. Diosdado Bravo, the operations manager
of Fortune Express received an investigation report from the Philippine Constabulary Regional
Headquarters at Cagayan de Oro City that certain Maranaos are planning to take revenge on Fortune
Express due to an accident with a jeepney in Kauswagan, Lanao del Norte, resulting in the death of two
Maranaos. Bravo assured the Philippine Constabulary that certain precautions in protecting lives and
properties will be made. Normal operations continued in Fortune Express without taking the necessary
precautions (such as frisking the passengers or inspecting their baggage before boarding the bus). It was
until November 22, 1989, when three armed Maranaos who pretended to be passengers seized a bus of
Fortune Express at Linamon, Lanao del Norte while on its way to Iligan City. Shots ensued which resulted
in the burning of the bus, the injury of passengers, and the death of Atty. Caorong. Should Fortune Express
be held liable for the injury and death of its passengers due to the hijacking of three armed Maranaos?

Legal Opinion: Yes, Fortune Express should be held liable. It is evident that the bus company through its
Operations Manager Diosdado Bravo, was informed the "rumors" that the Muslims intended to take
revenge on Fortune Express. Yet despite this information, the bus company did not take proper
precautions. Frisking of passengers picked up along the route and for those boarding at the bus terminal
could have been implemented by the bus conductor. On hindsight, the handguns especially the gallon of
gasoline used by the felons all of which were brought inside the bus would have been discovered, thus
preventing the burning of the bus and the fatal shooting of the victim. The least thing that the bus company
could have done in response to the report was to adopt a system of verification such as frisking of
passengers boarding its buses. Nothing, and to repeat, nothing at all, was done by Fortune Express to
protect its innocent passengers from the danger arising from the Maranao threats.

In the case of Gacal v. Philippine Airlines, Inc., [183 SCRA 189, 195-196, G.R. No. 55300, March 15, 1990]
the Supreme Court intimated that a common carrier can be held liable for failing to prevent a hijacking by
frisking passengers and inspecting their baggage.

Article 1755 of the Civil Code provides that "a common carrier is bound to carry the passengers as
far as human care and foresight can provide, using the utmost diligence of very cautious person,
with due regard for all the circumstances." Thus, for failure to use utmost diligence of a very
cautious person, the bus company should be held liable.

Liabilities of Common Carriers for the Acts of Employees and Strangers

The Law

Article 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 carrier 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.

Discussion of the Law

For the bus company, due diligence in selection of employees is not satisfied by finding that the applicant
possessed a professional driver's license. The employer should also examine the applicant for his
qualifications, experience, and record of the 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
instruction 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 crew.

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 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 driven on the ground of
culpa aquiliana or quasi-delict.

Damages Recoverable from Common Carriers

In an action based on a culpa contractual or culpa aquiliana, the damages that are recoverable are as
follows: actual damages, compensatory damages, moral damages, exemplary damages, death indemnity
and attorney's fees. Nominal damages may be awarded in case moral or exemplary damages may not be
awarded.

(a) Actual damages consist in expenses for medicine, hospitalization, etc.

(b) Unrealized profits are recoverable as compensatory damages which shall be fixed by determining in
the next 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 as determined by mortality tables or life
insurance companies of the Philippines.

(c) 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. The big amount of damages will be awarded in view of the importance of the person
of the passenger.

(d) Exemplary or corrective damages are awarded by way of example or correction of the public good,21
or when the common carrier acted in wanton, reckless and oppressive manner. While the immediate
beneficiaries of the standard of extraordinary diligence are, of course, the passengers and owners of cargo
carried by common carrier, they are not the only persons that the law seeks to benefit. Article 2231 of the
Civil Code explicitly authorizes the imposition of exemplary damages in case of quasi- delicts "if the
defendant acted with gross negligence.

(e) Award for death indemnity is in accordance with current rulings of the Court.

(f) Award for attorney's fees may be recovered when exemplary damages are awarded. Under Article 2008
of the Civil Code, attorney's fees may be recovered when exemplary damages are awarded. In the case of
Metro Manila Transit Corporation v. Court of Appeals [298 SCRA 945] (1998) it was held that an award of
P50,000 as attorney's fees is reasonable.

(g) In case moral damages cannot be awarded without proof of the carrier's bad faith, ill will, malice or
wanton conduct, conduct nominal damages may be allowed under the circumstances. Nominal damages
may be awarded as provided under Articles 2221 and 2222 of the Civil Code of the Philippines for the
purpose of indemnifying the victim for any loss suffered by him. Nominal damages are recoverable if no
actual, substantial, or specific damages were shown to have resulted from the breach. The amount of such
damages is addressed to the sound discretion of the court, taking into account the relevant circumstances.

Public Service Laws

The Law
Section 13 (b) of Public Service Act. Public service includes every person who may own, operate, manage
or control in the Philippines for hire or compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any common carrier, railroad or street
railway, traction railway, subway motor vehicle, steamboat, or steamship line, ferries, and water craft,
shipyard, xxx.276 Unless otherwise exempt, no public service shall operate without having been issued a
certificate of public convenience or a certificate of public convenience and necessity.

Discussion of the Law Public utilities are privately owned and operated businesses whose service is
essential to the general public. They are enterprises which specially cater to the needs of the public and
conduce to their comfort and convenience. As such, public utility services are impressed with public
interest and concern. The same is true with respect to the business of common carrier which holds such a
peculiar relation to the public interest that there is superinduced upon it the right of public regulation
when private properties are affected with public interest.

As mandated by law, no public service shall operate without having been issued a certificate of public
convenience (which is considered a privilege and not a property right).

A certificate of public convenience is an authorized granted by the proper goverment agency for the
operation of public service for which a franchise is required by law for public use as required by law.

The requisites before a certificate of public convenience may be granted are:

(1) The applicant must be a citizen of the Philippines, or a corporation or co. partnership, association or
join-stock company constituted and organized under the laws of the Philippines, at least 60 percent of its
stock or paid. up capital must belong entirely to citizens of the Philippines;

(2) The applicant must be financially capable of undertaking the proposed service and meeting the
responsibilities incident to its operation; and

(3) The applicant must prove that the operation of the public service proposed and the authorization is to
do business will promote the public interest in a proper and suitable manner.

The following are the government agencies which have the authority to grant a certificate of public
convenience:

(1) Civil Aeronautics Board (CAB) (R.A. No. 776) for Air Transportation;

(2) Land Transportation Franchising and Regulatory Board (LTFRB) (Executive Order 202) for Land
Transportation; and

(3) Maritime Industry Authority (MARINA) (Presidential Decree No. 474) for Water Transportation.

Traffic Laws

R.A. No. 4136, which is enacted on June 20, 1964 is a compilation relative to traffic rules and regulations.
Some of the highlights of the law are as follows:

Rules on Registration of Motor Vehicles

(1) No motor vehicle shall be used or operated on or upon any public highway of the Philippines unless
the same is properly registered at the LTO.

(2) Tourist bringing their own motor vehicles to the Philippines may, without registering such motor
vehicles, use the same during but not after ninety days of their sojourn: Provided, that the motor vehicle
displays the number plates for the current year of some other country or state, and said number plates as
well as the name and address (permanent and temporary) of the owner thereof are registered in the Land
Transportation Commission prior to the operation of the motor vehicle.

(3) For public utility automobiles, application for registration shall be accompanied by a certificate of public
convenience and motor vehicles registered shall be subject to the Public Service Law, rules and regulations.
(4) No person shall operate any motor vehicle without first procuring a license to drive a motor vehicle for
the current year, nor while such license is delinquent, invalid, suspended or revoked. The license shall be
carried by the driver at all times when operating a motor vehicle, and shall be shown and/or surrendered
for cause and upon demand to any person with authority under this Act to confiscate the same. An
examination or demonstration to show any applicant's ability to operate motor vehicles may also be
required.

(5) No person operating any vehicle shall allow more passenger or more freight or cargo in his vehicle than
its registered capacity. No driver shall permit any person to ride on the running board, step board,
mudguard of his motor vehicle for any purpose.

(6) Every vehicle must be provided with sufficient car accessories such as tires, brakes, horns, headlights,
taillights, stoplight, windshield wipers, mufflers and lights when disabled for the security and safety of the
motor vehicle. Under Letter of Instruction dated December 2, 1974, every motor vehicle must have at all
times at least one (1) pair of early warning device consisting of triangular, collapsible reflectorized plates
in red or yellow colors at least 15 cm. at the base and 40 cm. at the sides.

Restriction as to Speed

(1) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent speed,
not greater nor less than is reasonable and proper, having due regard for the traffic, the width of the
highway, and of any other condition than the three existing; and no person shall drive any motor vehicle
upon a highway at such a speed as to endanger the life, limb and property of any person, nor at a speed
greater than will permit him to bring the vehicle to a stop within the assured clear distance ahead.

(2) Subject to the provisions of the preceding paragraph, the rate of speed of any motor vehicle shall not
exceed the following:

Passenger Cars and Motorcycles Motor Trucks and Buses

On open country roads, with no 80 km/h 50km/h
blind corners not closely
bordered by habitations
On through streets or 40 km/h 30 km/h
boulevards, clear of traffic, with
no blind corners
On city and municipal streets 30 km/h 30 km/h
with light traffic when not
designated as through street
Through crowded streets, 20 km/h 20 km/h
approaching intersections at
blind corers, passing school
zone, passing other vehicles
which are stationary or for
similar dangerous circumstances

Restrictions on Overtaking and Passing

The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing
another vehicle proceeding in the same direction, unless such left side is clearly visible, and is free of
oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be made in safety.

Parking Prohibition

No driver shall park a vehicle, or permit it to stand, whether attended or unattended, upon a highway in
any of the following places:

(a) Within an intersection;

(b) On a crosswalk;
(c) Within six meters of the intersection of curb lines;

(d) Within four meters of the driveway entrance to and fire station;

(e) Within four meters of fire hydrant;

(t) In front of a private driveway;

(g) On the roadway side of any vehicle stopped or parked at the curb or edge of the highway; and

(h) At any place where official signs have been erected prohibiting parking.

Driving or Parking on Sidewalk

No person shall drive or park a motor vehicle upon or along any sidewalk, path or alley not intended for
vehicular traffic or parking.

Driving and Substance Intake

No person shall drive a motor vehicle while under the influence of liquor or narcotic drug.

Obstruction of Traffic

No person shall drive his motor vehicle in such a manner as to obstruct or impede the passage of any
vehicle, nor, while discharging or taking on passengers or loading or unloading freight, obstruct the free
passage of other vehicles on the highway.

Duty of Driver During an Accident

In the event that any accident should occur as a result of the operation of a motor vehicle upon a highway,
the driver present, shall show his driver's license, give his true name and address and also the true name
and address of the owner of the motor vehicle.

No driver of a motor vehicle concerned in a vehicular accident shall leave the scene of the accident without
aiding the victim, except under any of the following circumstances:

1. If he is in an imminent danger of being seriously harmed by any person or persons by reason of the
accident;

2. If he reports the accidents to the nearest officer of the law; or

3. If he has to summon a physician or nurse to aid the victim.

Distracted Driving

R.A. No. 10913 or "An act defining and penalizing distracted driving" will mean that any person who is
using their phones in non-emergency cases and/or needs it for work will be penalized with a fine of P5,000
for first offense, P10,000 for second offense, and P15,000 and suspension of license for three months for
the third offense. The law added that the fine may be increased, along with ultimately suspending the
driver's license if properly disseminated to the public. Meanwhile, those who are driving public utility
vehicles, school buses, or carriers with flammable or toxic material within a 50-meter radius from school
premises will be fined with P30,000 and have their licenses suspended for three months.

Seatbelt Law

The Law The Seatbelt was enacted to secure and safeguard its citizenry, particularly the passengers and
drivers of private and public motor vehicles, from the ruinous and extremely injurious effects of vehicular
accidents. In order of seatbelt devices by the drivers and front seat passengers of private and public motor
vehicles shall be enforced.

Discussion of the Law

The highlights of the law are as follows:

(1) The driver and front seat passengers of a public vehicle are required to wear or use their seatbelt
devices while inside a vehicle of running engine on any road or thoroughfare. In addition, the driver of a
public motor vehicle shall be required to immediately inform and require the front seat passengers upon
boarding a vehicle of running engine to wear the prescribed seatbelts. Any passenger who refuses to wear
seatbelts shall not be allowed to continue his/her trip.

(2) Infants and/or children aged (6) years and below shall be prohibited to sit in the front seat of any
running motor vehicle.

(3) It shall be unlawful for any person to import or cause the importation of any vehicle without
appropriate and operational seatbelt devices.

(4) For new vehicles, compliance is required for registration.

*Failure to comply shall disallow the registration and/or renewal of the registration of vehicle at the LTO.