336522936 Transportation Law Cases Digest PDF

Preview

Summary

CASE DIGEST (Transportation Law): Poliand Industrial Ltd vs. National Development Co. (NDC)POLIAND INDUSTRIAL LIMITED vs. NATIONAL DEVELOPMENT COMPANY, DEVELOPMENT BANK OF THE PHILIPPINES [G. No. 143866. August 22, 2005]FACTS:Poliand is an assignee of the of the rights of Asian Hardwood over the out...

Description

CASE DIGEST (Transportation Law): Poliand Industrial Ltd vs. National Development Co. (NDC) POLIAND INDUSTRIAL LIMITED vs. NATIONAL DEVELOPMENT COMPANY, DEVELOPMENT BANK OF THE PHILIPPINES [G.R. No. 143866. August 22, 2005] FACTS: Poliand is an assignee of the of the rights of Asian Hardwood over the outstanding obligation of National Development Corporation (NDC), the latter being the owner of Galleon which previously secured credit accommodations from Asian Hardwood for its expenses on provisions, oil, repair, among others. Galleon also obtained loans from Japanese lenders to finance acquisition of vessels which was guaranteed by DBP in consideration of a promise by Galleon to secure a first mortgage on the vessels. DBP later transferred ownership of the vessel to NDC. A collection suit was filed after repeated demands of Poliand for the satisfaction of the obligation from Galleon, NDC and DBP went unheeded. ISSUE: Whether POLIAND has a maritime lien enforceable against NDC or DBP or both. HELD: Yes, Poliand has a maritime lien which is more superior than DBP’s mortgage lien. “Before POLIAND’s claim may be classified as superior to the mortgage constituted on the vessel, it must be shown to be one of the enumerated claims which Section 17, P.D. No. 1521 declares as having preferential status in the event of the sale of the vessel. One of such claims enumerated under Section 17, P.D. No. 1521 which is considered to be superior to the preferred mortgage lien is a maritime lien arising prior in time to the recording of the preferred mortgage. Such maritime lien is described under Section 21, P.D. No. 1521, which reads: SECTION 21. Maritime Lien for Necessaries; persons entitled to such lien. — Any person furnishing repairs, supplies, towage, use of dry dock or marine railway, or other necessaries to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall be necessary to allege or prove that credit was given to the vessel. Under the aforequoted provision, the expense must be incurred upon the order of the owner of the vessel or its authorized person and prior to the recording of the ship mortgage. Under the law, it must be established that the credit was extended to the vessel itself. The trial court found that GALLEON’s advances obtained from Asian Hardwood were used to cover for the payment of bunker oil/fuel, unused stores and oil, bonded stores, provisions, and repair and docking of the GALLEON vessels. These expenses clearly fall under Section 21, P.D. No. 1521.

The trial court also found that the advances from Asian Hardwood were spent for ship modification cost and the crew’s salary and wages. DBP contends that a ship modification cost is omitted under Section 17, P.D. No. 1521, hence, it does not have a status superior to DBP’s preferred mortgage lien. As stated in Section 21, P.D. No. 1521, a maritime lien may consist in “other necessaries spent for the vessel.” The ship modification cost may properly be classified under this broad category because it was a necessary expenses for the vessel’s navigation. As long as an expense on the vessel is indispensable to the maintenance and navigation of the vessel, it may properly be treated as a maritime lien for necessaries under Section 21, P.D. No. 1521." However, Only NDC is liable on the maritime lien x x x [O]nly NDC is liable for the payment of the maritime lien. A maritime lien is akin to a mortgage lien in that in spite of the transfer of ownership, the lien is not extinguished. The maritime lien is inseparable from the vessel and until discharged, it follows the vessel. Hence, the enforcement of a maritime lien is in the nature and character of a proceeding quasi in rem.[65] The expression “action in rem” is, in its narrow application, used only with reference to certain proceedings in courts of admiralty wherein the property alone is treated as responsible for the claim or obligation upon which the proceedings are based.[66] Considering that DBP subsequently transferred ownership of the vessels to NDC, the Court holds the latter liable on the maritime lien. Notwithstanding the subsequent transfer of the vessels to NDC, the maritime lien subsists. CASE DIGEST (Transportation Law): Kilusang Mayo Uno vs. Garcia KILUSANG MAYO UNO LABOR CENTER vs.HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and the PROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILIPPINES G.R. No. 115381 December 23, 1994 FACTS : Then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to then LTFRB Chairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year. This range was later increased by LTFRB thru a Memorandum Circular No. 92-009 providing, among others, that "The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as the basis for the expanded fare range." Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare

increase of twenty (20%) percent of the existing fares. On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares, which the LTFRB dismissed for lack of merit. ISSUE: Whether or not the authority given by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15%) percent, later increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and above the existing authorized fare without having to file a petition for the purpose, is unconstitutional, invalid and illegal. HELD: Yes. xxx Under section 16(c) of the Public Service Act, the Legislature delegated to the defunct Public Service Commission the power of fixing the rates of public services. Respondent LTFRB, the existing regulatory body today, is likewise vested with the same under Executive Order No. 202 dated June 19, 1987. x x x However, nowhere under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a transport operator, or other public service.

Kilusang Mayo Uno Labor Center v. Jesus Garcia, Jr., LTFRB, Provincial BusOperators Association of the Philippines (PBOAP) G.R. No. 115381 December 23, 1994 Kapunan, J. FACTS:  public utilities – privately owned and operated businesses whose service are essential tothe general public; enterprises which specially cater to the needs of the public andconducive to their comfort and convenience  DOTC Sec. issued Memorandum Circular No. 90-395 to then LTFRB Chairman allowingprovincial bus operators to charge passengers rates within a range of 15% above and 15%below the LTFRB official rate for a period of 1 year

 PBOAP – pursuant to Memo. Cir. it filed an application for fare rate increase. An across-theboard increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses with a minimum-maximum fare range of fifteen (15%) percent over andbelow the proposed basic per kilometer fare rate, with the said minimum-maximum farerange applying only to ordinary, first class and premium class buses and a fifty-centavo(P0.50) minimum per kilometer fare for aircon buses, was sought  respondent LTFRB rendered a decision granting the fare rate increase in accordance with aspecified schedule of fares on a straight computation method  DOTC Sec. issued Department Order No. 92-587 defining the policy framework on theregulation of transport services. It provides inter alia that “Passenger fares shall also bederegulated, except for the lowest class of passenger service (normally third classpassenger transport) for which the government will fix indicative or reference fares.Operators of particular services may fix their own fares within a range 15% above andbelow the indicative or reference rate.”  LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for theimplementation of DOTC Department Order No. 92-587, which provides, among others,that:“The issuance of a Certificate of Public Convenience is determined by public need. Thepresumption of public need for a service shall be deemed in favor of the applicant, whileburden of proving that there is no need for the proposed service shall be the oppositor’s.”“The existing authorized fare range system of plus or minus 15 per cent for provincialbuses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorizedfare to be replaced by an indicative or reference rate as the basis for the expanded farerange”  PBOAP - availing itself of the deregulation policy of the DOTC allowing provincial busoperators to collect plus 20% and minus 25% of the prescribed fare without first havingfiled a petition for the purpose and without the benefit of a public hearing, announced afare increase of twenty (20%) percent of the existing fares  KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares. ISSUE: WON the above memoranda, circulars and/or orders of the DOTC and the LTFRBwhich, among others, (a) authorize provincial bus and jeepney operators to increase ordecrease the prescribed transportation

fares without application therefor with the LTFRB andwithout hearing and approval thereof by said agency is in violation of Sec. 16(c) of CA 146,and in derogation of LTFRB’s duty to fix and determine just and reasonable fares bydelegating that function to bus operators, and (b) establish a presumption of public need infavor of applicants for certificates of public convenience and place on the oppositor theburden of proving that there is no need for the proposed service, in patent violation not onlyof Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating thatfares should be “just and reasonable

HELD: Yes.  Section 16(c) of the Public Service Act, as amended, reads:Sec. 16. Proceedings of the Commission, upon notice and hearing. — The Commission shallhave power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to thecontrary:xxx xxx xxx(c) To fix and determine individual or joint rates, tolls, charges, classifications, orschedules thereof, as well as commutation, mileage kilometrage, and other special rateswhich shall be imposed, observed, and followed thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by public servicesprovisionally and without necessity of any hearing; but it shall call a hearing thereon withinthirty days thereafter, upon publication and notice to the concerns operating in theterritory affected: Provided, further, That in case the public service equipment of anoperator is used principally or secondarily for the promotion of a private business, the netprofits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates.  LTFRB is authorized under EO 202, s. 1987 to determine, prescribe, approve andperiodically review and adjust, reasonable fares, rates and other related charges, relativeto the operation of public land transportation services provided by motorized vehicles  LTFRB – not authorized to delegate that power to a common carrier, a transport operator,or other public service 

authority given by the LTFRB to the provincial bus operators to set a fare range over andabove the authorized existing fare, is illegal and invalid as it is tantamount to an unduedelegation of legislative authority  rate should not be confiscatory as would place an operator in a situation where he willcontinue to operate at a loss; rate should enable public utilities to generate revenuessufficient to cover operational costs and provide reasonable return on the investments  CPC - authorization granted by the LTFRB for the operation of land transportation servicesfor public use as required by law. Pursuant to Section 16(a) of the Public Service Act, asamended, the following requirements must be met before a CPC may be granted, to wit: (i)the applicant must be a citizen of the Philippines, or a corporation or co-partnership,association or joint-stock company constituted and organi zed under the laws of thePhilippines, at least 60 per centum of its stock or paid-up capital must belong entirely tocitizens of the Philippines; (ii) the applicant must be financially capable of undertaking theproposed service and meeting the responsibilities incident to its operation; and (iii) theapplicant must prove that the operation of the public service proposed and theauthorization to do business will promote the public interest in a proper and suitablemanner; there must be proper notice and hearing before the PSC can exercise its power toissue a CPC  LTFRB Memorandum Circular No. 92-009, Part IV is incompatible and inconsistent withSection 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued,the applicant must prove by proper notice and hearing that the operation of the publicservice proposed will promote public interest in a proper and suitable manner. On thecontrary, the policy guideline states that the presumption of public need for a publicservice shall be deemed in favor of the applicant. ILUSANG MAYO UNO LABOR CENTER vs.HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and the PROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILIPPINES G.R. No. 115381 December 23, 1994 FACTS : Then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to then LTFRB Chairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year. This range was later increased by LTFRB thru a Memorandum Circular No. 92-009 providing, among others, that “The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as the basis for the expanded fare range.”

Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existing fares. On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares, which the LTFRB dismissed for lack of merit. ISSUE: Whether or not the authority given by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15%) percent, later increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and above the existing authorized fare without having to file a petition for the purpose, is unconstitutional, invalid and illegal. HELD: Yes. Under section 16(c) of the Public Service Act, the Legislature delegated to the defunct Public Service Commission the power of fixing the rates of public services. Respondent LTFRB, the existing regulatory body today, is likewise vested with the same under Executive Order No. 202 dated June 19, 1987. x x x However, nowhere under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a transport operator, or other public service. LITA ENTERPRISES, INC., vs.INTERMEDIATE APPELLATE COURT, NICASIO M. OCAMPO and FRANCISCA P. GARCIA. [G.R. No. L-64693 April 27, 1984] FACTS: Sometime in 1966, the spouses Nicasio M. Ocampo and Francisca Garcia, herein private respondents, purchased in installment from the Delta Motor Sales Corporation five (5) Toyota Corona Standard cars to be used as taxicabs. Since they had no franchise to operate taxicabs, they contracted with petitioner Lita Enterprises, Inc., through its representative, Manuel Concordia, for the use of the latter's certificate of public convenience in consideration of an initial payment of P1,000.00 and a monthly rental of P200.00 per taxicab unit. To effectuate Id agreement, the aforesaid cars were registered in the name of petitioner Lita Enterprises, Inc, Possession, however, remained with tile spouses Ocampo who operated and maintained the same under the name Acme Taxi, petitioner's trade name. About a year later one of said taxicabs driven by their employee, Emeterio Martin, collided with a motorcycle whose driver, one Florante Galvez, died from the head injuries sustained therefrom. A criminal case was eventually filed against the driver Emeterio Martin, while a civil case for damages was instituted by Rosita Sebastian Vda. de Galvez, heir of the victim, against Lita Enterprises, Inc., as registered owner of the taxicab in the latter case. Petitioner Lita Enterprises, Inc. was adjudged liable for

damages by the CFI. This decision having become final, a writ of execution was issued. Two of the vehicles of respondent spouses were levied upon and sold at public auction. Thereafter, Nicasio Ocampo decided to register his taxicabs in his name. He requested the manager of petitioner Lita Enterprises, Inc. to turn over the registration papers to him, but the latter allegedly refused. Hence, he and his wife filed a complaint against Lita Enterprises, Inc., Mrs. de Galvez and the Sheriff of Manila for reconveyance of motor vehicles with damages. ISSUE: Whether or not petitioner has a cause of action against defendants. HELD: No. Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system", whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee. A certificate of public convenience is a special privilege conferred by the government . Abuse of this privilege by the grantees thereof cannot be countenanced. The "kabit system" has been Identified as one of the root causes of the prevalence of graft and corruption in the government transportation offices. In the words of Chief Justice Makalintal, "this is a pernicious system that cannot be too severely condemned. It constitutes an imposition upon the goo faith of the government. Although not outrightly penalized as a criminal offense, the "kabit system" is invariably recognized as being contrary to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code, It is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them. Upon this premise, it was flagrant error on the part of both the trial and appellate courts to have accorded the parties relief from their predicament. Article 1412 of the Civil Code denies them such aid. It provides: ART. 1412. if the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed: (1) when the fault, is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking. Having entered into an illegal contract, neither can seek relief from the courts, and each must bear the consequences of his acts. The defect of inexistence of a contract is permanent and incurable, and cannot be cured by ratification or by prescription. As this Court said in Eugenio v. Perdido, "the mere lapse of time cannot give efficacy to contracts that are null void."

The...