Case Digest: National Power Corp. vs. CA, 345 Phil 9, G.R. No. 112702

National Power Corp. vs. CA, 345 Phil 9, G.R. No. 112702, September 26, 1997

Subject: Transportation Law

FACTS

Cagayan Electric and Power Light Company (CEPALCO) was enfranchised by RA 3247 for 50 years to construct, maintain, and operate an electric light, heat, and power system for the purpose of generating and/or distributing power for sale within Cagayan de Oro City and its suburbs. The franchise was expanded to include municipalities of Tagoloan and Opol, Misamis Oriental, Villanueva, and Jasaan, Misamis Oriental, in 1969.

In 1973, PD 243 issued created Philippine Veterans Investment Development Corporation (PHIVIDEC), authorized to engage in commercial, industrial, mining, agricultural, and other enterprises to allow the full and continued employment of productive capabilities of and investment of veterans and retirees of the Armed Forces of the Philippines. In 1974, PD 538 created PHIVIDEC Industrial Authority (PIA) which shall promote the professional management of well-planned industrial areas.

PIA granted CEPALCO a temporary authority to retail electric power to the industries operating within PIE-MO, allowing CEPALCO to operate, administer, construct, and distribute electric power within the area for a period of 5 years, renewable for another 5 years. At the end of the period, PIA has the option to take over the operation of the electric service and acquire CEPALCO's assets within PIE-MO.

CEPALCO was unable to meet the demands of the industries in PIE-MO, leading most companies to close. PIA applied with the National Power Company (NPC) for direct power connection, which was approved. CEPALCO contended that FPI violated its right as the authorized operator of an electric light and power system in the area and the national electrification policy.

CEPALCO filed a petition with the ERB, praying that the ERB order the discontinuance of all existing direct supply of power by the NPC within the petitioner's franchise area. However, PIA contracted the NPC for the construction of a transmission line from Namutulan substation to the substation of PIA, which was dismissed on the ground of res judicata.

ISSUE

Whether or not transportation is a public utility.

RULING

Yes, the transportation is a public utility.

Under the law, a "public utility" is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. The term implies public use and service.

In this case, Sec. 4 of P.D. No. 538 grants the agency has the authority to construct, own, lease, operate, and maintain transportation networks, as necessary for the conduct of industry and commerce. This discuss transportation as a public utility since transportation is specifically used for public use and service in this Presidential Decree.

Case Digest: JG Summit Holdings. Inc. vs CA, G.R. No. 124293

 

JG Summit Holdings, Inc. vs. CA, G.R. No. 124293, September 24, 2003

Subject: Transportation Law

FACTS

A joint venture (JVA) was entered by a government corporation, National Investment and Development Corporation (NIDC) with a Japanese corporation, Kawasaki Heavy Industries, Ltd. for a shipyard business, Philippine Shipyard and Engineering Corporation (PHILSECO), with an agreement of a shareholding proportion of 60%-40 respectively and a right of first refusal to Kawasaki. Thereafter, NIDC transferred all its rights, title and interest to the Philippine National Bank (PNB).

After several months, by virtue of Administrative Order 14, PNB's interest in PHILSECO was transferred to the National Government. Then President Aquino’s Proclamation No. 50 was issued establishing the Committee on Privatization (COP) and the Asset Privatization Trust (APT) to take title to and possession of, conserve, manage and dispose of non-performing assets of the National Government.

A trust agreement was entered into between the National Government and the APT by virtue of which the latter was named the trustee of the National Government's share in PHILSECO. As a result of a quasi-reorganization of PHILSECO to settle its huge obligations to PNB, the National Government's shareholdings in PHILSECO increased to 97.41% thereby reducing Kawasaki's shareholdings to 2.59%.

After negotiations, it was agreed that Kawasaki’s right of first refusal under the JVA be “exchanged” for the right to top by 5% the highest bid for said shares. Kawasaki informed that Philyards Holdings, Inc. (PHI), in which it was a stockholder, would exercise this right in its stead. Petitioner JG Summit Holdings was declared highest bidder.

Even so, because of the right to top by 5% percent the highest bid, Kawasaki/PHI’s was able to top the winning bid. JG Summit protested, contending that PHILSECO, as a shipyard is a public utility and, hence, must observe the 60%-40% Filipino-foreign capitalization. By buying 87.67% of PHILSECO’s capital stock at bidding, Kawasaki/PHI in effect now owns more than 40% of the stock, thus violative of the laws.

ISSUE

Whether or not PHILSECO, a shipyard, is a public utility and hence Kawasaki, a foreign corporation, can acquire only a maximum of 40% of its capital.

RULING

No, a shipyard such as PHILSECO is not considered a public utility.

First, a shipyard which is a place or enclosure where ships are built or repaired is in its nature serves a limited clientele and not legally obliged to render its services indiscriminately to the public. While the business may be regulated for public good, it does not justify the qualifications for public utility which implies public use and service to the public hence it must be engaged in regularly supplying the public with some commodity or service of public consequence.

Second, it is not declared as public utility by law. Based on its legislative history, since the enactment of Act No. 2307 which created the Public Utility Commission (PUC) until repealed by Commonwealth Act No. 146 establishing Public Service Commission, a shipyard was a public utility and should abide by the Filipino citizenship requirement of 60-40 capital of a corporation. Thereafter, Pres. Marcos issued PD No. 666 which removed the shipbuilding and ship repair industry from the list of public utilities thereby freeing it from the 60-40 citizenship requirement. Batas Pambansa Blg. 391 repealed the PD No. 666 and reverted shipyards as public utilities. Then Pres. Aquino’s Executive Order No. 226 repealed the previous laws with no revival of the principle that shipyards are public utilities. Thus, absent of such legislation declaring the same, a shipyard reverts back to its status as a non-public utility.

With this, there was nothing preventing Kawasaki from acquiring more than 40% of PHILSECO’s total capitalization. The JVA should also be interpreted as the phrase “maintaining a proportion of 60%-40%” refers to their respective share of the burden each time the Board of Directors decides to increase the subscription to reach the target paid-up capital of P312 million. It does not bind the parties to maintain the sharing scheme all throughout the existence of their partnership.

Case Digest: Air France vs. Court of Appeals, 126 SCRA 442, G.R. No. L-57339

 

Air France vs. Court of Appeals, 126 SCRA 442, G.R. No. L-57339, December 29, 1983

Subject: Transportation Law

FACTS

The Ganas purchased nine "open-dated" air tickets for the Manila/Osaka/Tokyo/Manila route from Air France through a travel agent in February 1970. The tickets had a validity period of one year, according to the International Air Transportation Association (IATA) tariff rules.

In January 1971, Jose Ganas sought the assistance of Teresita Manucdoc, for the extension of the validity of their tickets, which were due to expire on 8 May 1971. However, they were informed that extension was not possible unless the fare differentials resulting from the increase in fares triggered by an increase of the exchange rate of the US dollar to the Philippine peso and the increased travel tax were first paid.

Then the Ganas scheduled their departure on 7 May 1971 or one day before the expiry date. They were warned that the tickets could be used on 7 May 1971 but the tickets would no longer be valid for the rest of their trip because the tickets would then have expired on 8 May 1971. Notwithstanding the warnings, the GANAS departed from Manila in the afternoon of 7 May 1971 on board AIR FRANCE Flight 184 for Osaka, Japan.

In Osaka/Tokyo flight on 17 May 1971, Japan Airlines refused to honor the tickets because of their expiration, and the GANAS had to purchase new tickets. They encountered the same difficulty with respect to their return trip to Manila as AIR FRANCE also refused to honor their tickets.

The Ganas filed a lawsuit in CFI of Manila against Air France for breach of contract and moral damages. CFI (now RTC) dismissed the complaint based on Partial and Additional Stipulations of Fact on the documentary and testimonial evidence. On appeal, the CA reversed RTC’s decision.

ISSUE

Whether or not the GANAS have made out a case for breach of contract of carriage entitling them to an award of damages.

RULING

No, there was no breach of carriage of carriage entitling GANAS to the award of damages.

The General Tariff Rule is that all journeys must be charged for at the fare or charge in effect on the date on which transportation commences from the point of origin. Any ticket sold before a change of fare or charge increase or decrease occurring between the date of commencement of the journey, is subject to the above general rule and must be adjusted accordingly. A new ticket must be issued, and the difference is to be collected or refunded as the case may be. No adjustment is necessary if the increase or decrease in fare or charge occurs when the journey is already commenced."

In this case, Air carrier is not liable for breach of contract for having dishonored plane tickets of persons which had expired. From the foregoing tariff rules, it is clear that AIR FRANCE cannot be faulted for breach of contract when it dishonored the tickets of the GANAS after 8 May 1971 since those tickets expired on said date.

Case Digest: American Airlines vs. Court of Appeals, 327 SCRA 482

 

American Airlines vs. Court of Appeals, 327 SCRA 482

Subject: Transportation Law

FACTS

Democrito Mendoza purchased a conjunction ticket from Singapore Airlines for a multi-leg trip. In Geneva, Mendoza decided to skip Copenhagen and fly directly to New York. He exchanged the unused portion of his ticket for a one-way ticket from Geneva to New York with American Airlines.

Mendoza filed a lawsuit against American Airlines in the Regional Trial Court of Cebu for damages before the regional trial court of Cebu for the alleged embarrassment and mental anguish he suffered at the Geneva Airport.

The petitioner filed a motion to dismiss for lack of jurisdiction of Philippine courts to entertain the said proceedings under Art. 28 (1) of the Warsaw Convention. The trial court denied the motion. CA affirmed the ruling of the trial court.

The petitioner asserts that the Philippines is neither the domicile nor the principal place of business of the defendant airline; nor is it the place of destination. As regards the third option of the plaintiff, the petitioner contends that since the Philippines is not the place where the contract of carriage was made between the parties herein, Philippine courts do not have jurisdiction over this action for damages.

ISSUE

Whether or not the contract of transportation between the petitioner and the private respondent would be considered as a single operation and part of the contract of transportation entered into by the latter with Singapore Airlines in Manila.

RULING

Yes, the contract of transportation between the parties is a single operation and part of the contract by Mendoza with Singapore Airlines.

Article 1(3) of the Warsaw Convention clearly states that a contract of air transportation is taken as a single operation whether it is founded on a single contract or a series of contracts. In addition, members of the IATA are under a general pool partnership agreement wherein they act as agents of each other in the issuance of tickets to contracted passengers.

In this case, when the petitioner accepted the unused portion of the conjunction tickets, entered it in the IATA clearing house, and undertook to transport the private respondent over the route covered by the unused portion of the conjunction tickets, i.e., Geneva to New York, the petitioner tacitly recognized its commitment under the IATA pool arrangement to act as agent of the principal contracting airline, Singapore Airlines, as to the segment of the trip the petitioner agreed to undertake. As such, the petitioner thereby assumed the obligation to take the place of the carrier originally designated in the original conjunction ticket. Therefore, there was no separate or second contract between American Airlines and Mendoza but a contract considered a single operation and part of the contract of transportation entered into by Mendoza with Singapore Airlines in Manila.

Case Digest: Anonuevo vs. Court of Appeals, 441 SCRA 24

Anonuevo vs. Court of Appeals, 441 SCRA 24

Subject: Transportation Law

FACTS

Villagracia was traveling along Boni Ave. on his bicycle, while Añonuevo, traversing the opposite lane was driving a Lancer car owned by Procter and Gamble Inc., the employer of Añonuevo’s brother. Añonuevo was in the course of making a left turn towards Libertad Street when the collision occurred.

Villagracia sustained serious injuries and had to undergo four operations. Villagracia instituted an action for damages against P&G Phils., Inc. and Añonuevo before the RTC. He had also filed a criminal complaint against Añonuevo before the Metropolitan Trial Court of Mandaluyong, but the latter was subsequently acquitted of the criminal charge.

Añonuevo claims that Villagracia violated traffic regulations when he failed to register his bicycle or install safety gadgets. He posits that Article 2185 of the Civil Code applies by analogy. Article 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating any traffic regulation.

ISSUE

Whether or not Article 2185 of the New Civil Code should apply to non-motorized vehicles, making Villagracia presumptively negligent.

RULING

No.

Article 2185 of the New Civil Code provides that, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating any traffic regulation.

In this case, Aonuevo’s characterization of a vibrant intra-road dynamic between motorized and non-motorized vehicles is more apropos to the past than to the present. There is pertinent basis for segregating between motorized and non-motorized vehicles. A motorized vehicle, unimpeded by the limitations in physical exertion. Is capable of greater speeds and acceleration than non-motorized vehicles. At the same time, motorized vehicles are more capable in inflicting greater injury or damage in the event of an accident or collision. This is due to a combination of factors peculiar to the motor vehicle, such as the greater speed, its relative greater bulk of mass, and greater combustibility due to the use of fuel.

Case Digest: Mallari vs. Court of Appeals, G.R. No. 128607

 

Mallari vs. Court of Appeals, G.R. No. 128607, January 31, 2000

Subject: Transportation Law

FACTS

the passenger jeepney driven by petitioner Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the delivery van of respondent Bulletin Publishing Corp.) along the National Highway in Barangay San Pablo, Dinalupihan, Bataan. The collision occurred after Mallari Jr. overtook the Fiera while negotiating a curve in the highway resulting in injuries to its passengers one of whom was Israel Reyes who eventually died due to the gravity of his injuries.

Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages with the Regional Trial Court of Olongapo City against Alfredo Mallari Sr. and Alfredo Mallari Jr., and also against BULLETIN, its driver Felix Angeles, and the N.V. Netherlands Insurance Company. The complaint alleged that the collision which resulted in the death of Israel Reyes was caused by the fault and negligence of both drivers of the passenger jeepney and the Bulletin Isuzu delivery van.

The trial court found that the proximate cause of the collision was the negligence of Felix Angeles, driver of the Bulletin delivery van. Hence, the trial court ordered BULLETIN and Felix Angeles to pay jointly and severally Claudia G. Reyes, widow of the deceased victim. On appeal the CA reversed RTC’s decision absolving respondent BULLETIN, Felix Angeles and N.V. Netherlands Insurance Company. It ordered petitioners Mallari Jr. and Mallari Sr. to compensate Claudia G. Reyes. Hence, this petition.

ISSUE

Whether or not the collision was caused by the sole negligence of petitioner Alfredo Mallari Jr.

RULING

Yes, the collision was caused by the sole negligence of petitioner Alfredo Mallari Jr.

Under the law, a driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary situation has the duty to see to it that the road is clear and not to proceed if he cannot do so in safety. When a motor vehicle is approaching or rounding a curve, there is special necessity for keeping to the right side of the road and the driver does not have the right to drive on the left-hand side relying upon having time to turn to the right if a car approaching from the opposite direction comes into view.

In this case, the proximate cause of the collision resulting in the death of Israel Reyes, a passenger of the jeepney, was the sole negligence of the driver of the passenger jeepney, petitioner Alfredo Mallari Jr., who recklessly operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules. Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory evidence to overcome this legal presumption.

Case Digest: Baliwag Transit vs. Court of Appeals, 256 SCRA 746

 

Baliwag Transit vs. Court of Appeals, 256 SCRA 746

Subject: Transportation Law

FACTS

On July 31, 1980, Leticia Garcia and her five-year-old son, Allan Garcia, boarded Baliwag Transit Bus No. 2036 bound for Cabanatuan City. They took the seat behind the driver, Jaime Santiago. At around 7:30 in the evening, the bus passengers saw a cargo truck parked at the shoulder of the national highway. The truck driver, Julio Recontique, and his helper, Arturo Escala, were replacing a flat tire when Santiago was driving at an inordinately fast speed. Santiago failed to notice the truck and the kerosene lamp at the edge of the road, and the danger of collision became imminent.

Santiago and Escala died, and several others were injured. Leticia suffered a fracture in her pelvis and right leg, while Allan broke a leg and received emergency treatment. Spouses Antonio and Leticia Garcia sued Baliwag Transit, Inc., A & J Trading, and Julio Recontique for damages in the Regional Trial Court of Bulacan. Baliwag, A & J Trading, and Recontique disclaimed responsibility for the mishap, claiming that the accident was caused solely by the fault and negligence of A & J Trading and its driver, Recontique.

ISSUE

Whether or not Baliwag Transit Bus is liable. 

RULING

Yes, Baliwag is liable. 

Under the law, a common carrier is bound to carry its passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances. In a contract of carriage, it is presumed that the common carrier was at fault or was negligent when a passenger dies or is injured.

In this case, Baliwag, a common carrier, is liable for damages due to its driver's recklessness in a bus accident. The evidence shows the driver's disregard for passengers' safety, leading to physical suffering and mental anguish. The accident resulted in Leticia Garcia's hip replacement and Allan's foot injury.