Bar Q and A #9

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1.) a. Name 2 characteristics which differentiate a common carrier from a private carrier. b. Why is the defense of due diligence in the selection and supervision of an employee not available to a common carrier?

a. Two characteristics that differentiate a common carrier from a private carrier are:
1. A common carrier offers its service to the public; a private carrier does not.
2. A common carrier is required to observe extraordinary diligence; a private carrier is not required.

b. The defense of due diligence in the selection and supervision of an employee is not available to a common carrier because the degree of diligence required of a common carrier is not the diligence of a good father of a family but extraordinary diligence, i.e., diligence of the greatest skill and utmost foresight.

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2.) Define a common carrier.

A common carrier is a 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 its services to the public.

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3.) What is the test for determining whether or not one is a common carrier?

The test for determining whether or not one is a common carrier is whether the person or entity, for some business purpose and with general or limited clientele, offers the service of carrying, transporting passengers or goods or both for compensation.

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4.) AM Trucking, a small company, operates 2 trucks for hire on selective basis. It caters to only a few customers, and its trucks do not make regular or scheduled trips. It does not even have a certificate of public convenience. On one occasion, Reynaldo contracted AM to transport, for a fee, 100 sacks of rice from Manila to Tarlac. However, AM failed to deliver the cargo, because its truck was hijacked when the driver stopped in Bulacan to visit his girlfriend. a. May Reynaldo hold AM liable as a common carrier? Explain. b. May AM set up the hijacking as a defense to defeat Reynaldo’s claim?

a. Reynaldo may hold AM liable as a common carrier. The facts that AM operates only 2 trucks for hire on a selective basis, caters only to a few customers, does not make regular or scheduled trips, and does not have a certificate of public convenience are of no moment as the law (i) 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, (ii) avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis, and (iii) refrains from the general public and one who offers services or solicits business only from a narrow segment of the general population.

b. AM may not set up the hijacking as a defense to defeat Reynaldo’s claim as the facts given do not indicate that the same was attended by the use of grave or irresistible threat, violence or force. It would appear that the truck was left unattended by its driver and was taken while he was visiting his girlfriend.

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5.) Alejandro Camaling of Alegria, Cebu, is engaged in buying copra, charcoal, firewood, and used bottles and in reselling them in Cebu City. He uses 2 big Isuzu trucks for the purpose; however, he has no certificate of public convenience or franchise to do business as a common carrier. On the return trips to Alegria, he loads his trucks with various merchandise of other merchants in Alegria and the neighboring municipalities of Badian and Ginatilan. He charges them freight rates much lower than the regular rates. In one of the return trips, which left Cebu City at 8:30 p.m. 1 cargo truck was loaded with several boxes of sardines, valued at P100, 000 belonging to one of his customers, Pedro Rabor. While passing the zigzag road between Carcar and Barili, Cebu, which is midway between Cebu City and Alegria, the truck was hijacked by 3 armed men who took all the boxes of sardines and kidnapped the driver and his helper, releasing them in Cebu City only 2 days later. Pedro Rabor sought to recover from Alejandro the value of the sardines. The latter contends that he is not liable therefore because he is not a common carrier under the Civil Code. If you were the judge, would you sustain the contention of Alejandro?

If I were the Judge, I would hold Alejandro as having engaged as a common carrier. A person who offers his services to carry passengers or goods for a fee is a common carrier regardless of whether he has a certificate of public convenience or not, whether it is his main business or incidental to such business, whether it is scheduled or unscheduled service, and whether he offers his services to the general public or to a limited few. (De Guzman v CA GR 47822, December 27, 1988)

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6.) What requirements must be met before a certificate of public convenience may be granted under the Public Service Act?

The following are the requirements for the granting of a certificate of public convenience, to wit:

1. The applicant must be a citizen of the Philippines, or a corporation, co- partnership or association organized under the laws of the Philippines and at least 60% of the stock or paid-up capital of which must belong to citizens of the Philippines.

2. The applicant must prove public necessity.

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

4. The applicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to its operation.

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7.) The City of Manila passed an ordinance banning provincial buses from the city. The ordinance was challenged as invalid under the Public Service Act by X who has a certificate of public convenience to operate auto-trucks with fixed routes from certain towns in Bulacan and Rizal to Manila and within Manila. Firstly, he claimed that the ordinance was null and void because, among other things, it in effect amends his certificate of public convenience, a thing which only the Public Service Commission can do so under Section 16(m) of the Public Service Act. Under said section, the Commission is empowered to amend, modify, or revoke a certificate of public convenience after notice and hearing. Secondly, he contended that even if the ordinance was valid, it is only the Commission which can require compliance with its provisions under Section 17(j) of said Act and since the implementation of the ordinance was without sanction or approval of the Commission, its enforcement was unauthorized and illegal. 1. May the reliance of X on Section 16(m) of the Public Service Act be sustained? Explain. 2. Was X correct in his contention that under Section 17 (j) of the public Service Act it is only the Commission which can require compliance with the provision of the ordinance? Explain.

1. NO. The power vested in the public Service Commission under Section 16 (m) is subordinate to the authority of the City of Manila under Section 18 (hh) of its revised charter, to superintend, regulate or control the streets of the City of Manila.

2. NO. The powers conferred by law upon the Public Service Commission were not designed or supersede the regulatory power of local governments over motor traffic in the streets subject to their control.

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8.) 1. Robert is a holder of a certificate of public convenience to operate a taxicab service in Manila and suburbs. One evening, one of his taxicab units was boarded by 3 robbers as they escaped after staging a hold-up. Because of said incident, the LTFRB revoked the certificate of public convenience of Robert on the ground that said operator failed to render safe, proper and adequate service as required under Section 19(a) of the Public Service Act. a. Was the revocation of the certificate of public convenience of Robert justified? Explain. b. When can the Commission (Board) exercise its power to suspend or revoke certificate of public convenience? 2. Pepay, a holder of a certificate of public convenience, failed to register the complete number of units required by her certificate. However, she tried to justify such failure by the accidents that allegedly befell her, claiming that she was so shocked and burdened by the successive accidents and misfortunes that she did not know what she was doing, she was confused and thrown off tangent momentarily, although she always has the money and financial ability to buy new trucks or repair the destroyed one. Are the reasons given by Pepay sufficient grounds to excuse her from completing her units? Explain.

1.
a. NO. A single hold-up incident which does not link Robert’s taxicab cannot be construed that he rendered a service that is unsafe, inadequate and improper.
b. Under Section 19(a) of the Public Service Act, the Commission (Board) can suspend or revoke a certificate of public convenience when the operator fails to provide a service that is safe, proper or adequate, and refuses to render any service which can be reasonably demanded and furnished.

2. NO. The reasons given by Pepay are not sufficient grounds to excuse her from completing her units. The same could be undertaken by her children or by other authorized representatives.

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9.) X has a Tamaraw FX among other cars. Every other day during the workweek, he goes to his office in Quezon City using his Tamaraw FX and picks up friends as passengers at designated points along the way. His passengers pay him a flat fee for the ride, usually P20 per person, one way. Although a lawyer, he never bothered to obtain a license to engage in this type of income-generating activity. He believes that he is not a common carrier within the purview of the law. Do you agree with him? Explain.

NO. I do not agree with X. A common carrier holds himself out to the public as engaged in the business of transporting persons or property from place to place, for compensation, offering his services to the public generally. The fact that X has a limited clientele does not exclude him from the definition of a common carrier. The law does not make any distinction between one whose principal business activity is the carrying of persons or goods or both, and the one who does such carrying only as an ancillary activity or in the local idiom, as a “sideline”.

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10.) Antonio was granted a Certificate of Public Convenience (CPC) in 1986 to operate a ferry between Mindoro and Batangas using the motor vessel “MV Lotus.” He stopped operations in 1988 due to unserviceability of the vessel. In 1989, Basilio was granted a CPC for the same route. After a few months, he discovered that Carlos was operating on his route under Antonio’s CPC. Because Basilio filed a complaint for illegal operations with the Maritime Industry Authority, Antonio and Carlos jointly filed an application for sale and transfer of Antonio’s CPC and substitution of the vessel “MV Lotus” with another owned by Carlos. Should Antonio’s and Carlos’ joint application be approved? Give your reasons.

The joint application of Antonio and Carlos for the sale and transfer of Antonio’s CPC and substitution of the vessel MV Lotus with another vessel owned by the transferee should not be approved. The CPC and “MV Lotus” are inseparable. The unserviceability of the vessel covered by the certificate had likewise rendered ineffective the certificate itself, and the holder thereof may not legally transfer the same to another.

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