CASE DIGEST (Transportation Law): Poliand Industrial Ltd vs. National Development Co. (NDC) PLIAND IND!ST"IAL LI#ITED vs. NATINAL DE$ELP#ENT C#PAN%& DE$ELP#ENT 'AN T*E P*ILIPPINES +G.". No. ,-/00. Au1ust 22& 23345 ACTS: Poliand is an assi1nee o6 t7e o6 t7e ri17ts o6 Asian *ardwood over t7e outstandin1 o8li1ation o6 National Development Corporation (NDC)& t7e latter 8ein1 t7e owner o6 Galleon w7i97 previousl se9ured 9redit a99ommodations 6rom Asian *ardwood 6or its e;penses on provisions& oil& repair& amon1 ot7ers. Galleon also o8tained loans 6rom
uisition o6 vessels w7i97 was 1uaranteed 8 D'P in 9onsideration o6 a promise 8 Galleon to se9ure a =rst mort1a1e on t7e vessels. D'P later trans6erred owners7ip o6 t7e vessel to NDC. A 9olle9tion suit was =led a6ter repeated demands o6 Poliand 6or t7e satis6a9tion o6 t7e o8li1ation 6rom Galleon& NDC and D'P went un7eeded. ISS!E: ?7et7er PLIAND 7as a maritime lien en6or9ea8le a1ainst NDC or D'P or 8ot7. *ELD: %es& %es& Poliand Poliand 7as a maritime maritime lien w7i97 w7i97 is more more superior t7an D'P@s mort1a1e mort1a1e lien. 'e6ore 'e6ore PLIAND@s 9laim ma 8e 9lassi=ed as superior to t7e mort1a1e 9onstituted on t7e vessel& it must 8e s7own to 8e one o6 t7e enumerated 9laims w7i97 Se9tion ,B& P.D. No. ,42, de9lares as 7avin1 pre6erential status in t7e event o6 t7e sale o6 t7e vessel. ne o6 su97 9laims enumerated under Se9tion ,B& P.D. No. ,42, w7i97 is 9onsidered to 8e superior to t7e pre6erred mort1a1e lien is a maritime lien arisin1 prior in time to t7e re9ordin1 o6 t7e pre6erred mort1a1e. Su97 maritime lien is des9ri8ed under Se9tion 2,& P.D. No. ,42,& w7i97 reads: SECTIN 2,. #aritime Lien 6or Ne9essaries persons entitled to su97 lien. An person 6urnis7in1 repairs& supplies& towa1e& use o6 dr do9 or marine railwa& or ot7er ne9essaries to an vessel& w7et7er 6orei1n or domesti9& upon t7e order o6 t7e owner o6 su97 vessel& or o6 a person aut7oriFed 8 t7e owner& s7all 7ave a maritime lien on t7e vessel& w7i97 ma 8e en6or9ed en6or9ed 8 suit in rem& and it s7all 8e ne9essar to alle1e or prove t7at 9redit was 1iven to t7e vessel. !nder t7e a6ore>uoted provision& t7e e;pense must 8e in9urred upon t7e order o6 t7e owner o6 t7e vessel or its aut7oriFed person and prior to t7e re9ordin1 o6 t7e s7ip mort1a1e. !nder t7e law& it must 8e esta8lis7ed esta8lis7ed t7at t7e 9redit was e;tended to t7e vessel itsel6.
T7e trial 9ourt 9ourt 6ound t7at t7at GALLEN@s advan9es advan9es o8tained 6rom 6rom Asian *ardwood *ardwood were were used to 9over 6or t7e pament o6 8uner oil6uel& unused stores stores and oil& 8onded stores& provisions& and repair and do9in1 o6 t7e GALLEN vessels. T7ese e;penses 9learl 6all under Se9tion 2,& P.D. No. ,42,. T7e trial 9ourt 9ourt also 6ound 6ound t7at t7e advan9es advan9es 6rom Asian Asian *ardwood *ardwood were were spent 6or s7ip modi=9ation 9ost and t7e 9rew@s salar and wa1es. D'P 9ontends t7at a s7ip modi=9ation 9ost is omitted under Se9tion ,B& P.D. No. ,42,& 7en9e& it does not 7ave a status superior to D'P@s pre6erred mort1a1e lien. As stated in Se9tion 2,& P.D. No. ,42,& a maritime lien ma 9onsist in ot7er ne9essaries spent 6or t7e vessel.H T7e s7ip modi=9ation 9ost ma properl 8e 9lassi=ed under t7is 8road 9ate1or 8e9ause it was a ne9essar e;penses 6or t7e vessel@s navi1ation. As lon1 as an e;pense on t7e vessel is indispensa8le to t7e maintenan9e and navi1ation o6 t7e vessel& it ma properl 8e treated as a maritime lien 6or ne9essaries under Se9tion 2,& P.D. No. ,42,. *owever& nl NDC is lia8le on t7e maritime lien ; ; ; +5nl NDC is lia8le 6or t7e pament o6 t7e maritime lien. A maritime lien is ain to a mort1a1e lien in t7at in spite o6 t7e trans6er o6 owners7ip& t7e lien is not e;tin1uis7ed. T7e maritime lien is insepara8le 6rom t7e vessel and until dis97ar1ed& it 6ollows t7e vessel. *en9e& t7e en6or9ement o6 a maritime lien is in t7e nature and 97ara9ter o6 a pro9eedin1 >uasi in rem.+045 T7e e;pression a9tion in remH is& in its narrow appli9ation& used onl wit7 re6eren9e to 9ertain pro9eedin1s in 9ourts o6 admiralt w7erein t7e propert alone is treated as responsi8le 6or t7e 9laim or o8li1ation upon w7i97 t7e pro9eedin1s are 8ased.+005 Considerin1 t7at D'P su8se>uentl trans6erred owners7ip o6 t7e vessels to NDC& t7e Court 7olds t7e latter lia8le on t7e maritime lien. Notwit7standin1 t7e su8se>uent trans6er o6 t7e vessels to NDC& t7e maritime lien su8sists. su8sists. CASE DIGEST (Transportation Law): ilusan1 #ao !no vs. Gar9ia IL!SANG #A% !N LA'" CENTE" vs.*N.
T7e trial 9ourt 9ourt 6ound t7at t7at GALLEN@s advan9es advan9es o8tained 6rom 6rom Asian *ardwood *ardwood were were used to 9over 6or t7e pament o6 8uner oil6uel& unused stores stores and oil& 8onded stores& provisions& and repair and do9in1 o6 t7e GALLEN vessels. T7ese e;penses 9learl 6all under Se9tion 2,& P.D. No. ,42,. T7e trial 9ourt 9ourt also 6ound 6ound t7at t7e advan9es advan9es 6rom Asian Asian *ardwood *ardwood were were spent 6or s7ip modi=9ation 9ost and t7e 9rew@s salar and wa1es. D'P 9ontends t7at a s7ip modi=9ation 9ost is omitted under Se9tion ,B& P.D. No. ,42,& 7en9e& it does not 7ave a status superior to D'P@s pre6erred mort1a1e lien. As stated in Se9tion 2,& P.D. No. ,42,& a maritime lien ma 9onsist in ot7er ne9essaries spent 6or t7e vessel.H T7e s7ip modi=9ation 9ost ma properl 8e 9lassi=ed under t7is 8road 9ate1or 8e9ause it was a ne9essar e;penses 6or t7e vessel@s navi1ation. As lon1 as an e;pense on t7e vessel is indispensa8le to t7e maintenan9e and navi1ation o6 t7e vessel& it ma properl 8e treated as a maritime lien 6or ne9essaries under Se9tion 2,& P.D. No. ,42,. *owever& nl NDC is lia8le on t7e maritime lien ; ; ; +5nl NDC is lia8le 6or t7e pament o6 t7e maritime lien. A maritime lien is ain to a mort1a1e lien in t7at in spite o6 t7e trans6er o6 owners7ip& t7e lien is not e;tin1uis7ed. T7e maritime lien is insepara8le 6rom t7e vessel and until dis97ar1ed& it 6ollows t7e vessel. *en9e& t7e en6or9ement o6 a maritime lien is in t7e nature and 97ara9ter o6 a pro9eedin1 >uasi in rem.+045 T7e e;pression a9tion in remH is& in its narrow appli9ation& used onl wit7 re6eren9e to 9ertain pro9eedin1s in 9ourts o6 admiralt w7erein t7e propert alone is treated as responsi8le 6or t7e 9laim or o8li1ation upon w7i97 t7e pro9eedin1s are 8ased.+005 Considerin1 t7at D'P su8se>uentl trans6erred owners7ip o6 t7e vessels to NDC& t7e Court 7olds t7e latter lia8le on t7e maritime lien. Notwit7standin1 t7e su8se>uent trans6er o6 t7e vessels to NDC& t7e maritime lien su8sists. su8sists. CASE DIGEST (Transportation Law): ilusan1 #ao !no vs. Gar9ia IL!SANG #A% !N LA'" CENTE" vs.*N.
T7is ran1e was later in9reased in9reased 8 8 LT"' LT"' t7ru a #emorandum #emorandum Cir9ular Cir9ular No. No. J2K33J providin1& amon1 ot7ers& t7at T7e e;istin1 aut7oriFed 6are ran1e sstem o6 plus or minus ,4 per 9ent 6or provin9ial 8uses and eepnes s7all 8e widened to 23 and K24 limit in ,JJ- wit7 t7e aut7oriFed 6are 6are to 8e repla9ed 8 an indi9ative or re6eren9e rate as t7e 8asis 6or t7e e;panded 6are ran1e. Sometime in #ar97& ,JJ-& private respondent P'AP& availin1 itsel6 o6 t7e dere1ulation poli9 o6 t7e DTC allowin1 provin9ial 8us operators to 9olle9t plus 23 and minus 24 o6 t7e pres9ri8ed 6are wit7out =rst 7avin1 =led a petition 6or t7e purpose and wit7out t7e 8ene=t o6 a pu8li9 7earin1& announ9ed a 6are in9rease o6 twent (23) per9ent o6 t7e e;istin1 6ares. n #ar97 ,0& ,JJ-& petitioner #! =led a petition 8e6ore t7e LT"' opposin1 t7e upward adustment o6 8us 6ares& w7i97 t7e LT"' dismissed 6or la9 o6 merit. ISS!E: ?7et7er or not t7e aut7orit 1iven 8 respondent LT"' to provin9ial 8us operators to set a 6are ran1e o6 plus or minus =6teen (,4) per9ent& later in9reased to plus twent (23) and minus twentK=ve (K24) per9ent& over and a8ove t7e e;istin1 aut7oriFed 6are wit7out 7avin1 to =le a petition 6or t7e purpose& is un9onstitutional& invalid and ille1al. *ELD: %es. %es. ;;; !nder se9tion ,0(9) o6 t7e Pu8li9 Servi9e A9t& t7e Le1islature dele1ated to t7e de6un9t Pu8li9 Servi9e Commission t7e power o6 =;in1 t7e rates o6 pu8li9 servi9es. "espondent LT"'& t7e e;istin1 re1ulator 8od toda& is liewise vested wit7 t7e same under E;e9utive rder No. No. 232 dated
Kilusang Mayo Uno Labor Center v. Jesus Garcia, Jr., LTFRB, Provincial BusOerators !ssociation o" t#e P#iliines $PBO!P% G.". No. ,,4/, De9em8er 2& ,JJKapunan, J.
F!CT&'
pu8li9 utilities O privatel owned and operated 8usinesses w7ose servi9e are essential tot7e 1eneral pu8li9 enterprises w7i97 spe9iall 9ater to t7e needs o6 t7e pu8li9 an d9ondu9ive to t7eir 9om6ort and 9onvenien9e
DTC Se9. issued #emorandum Cir9ular No. J3KJ4 to t7en LT"' C7airman allowin1provin9ial 8us operators to 97ar1e passen1ers rates wit7in a ran1e o6 ,4 a8ove and ,48elow t7e LT"' oM9ial rate 6or a period o6 , ear
P'AP O pursuant to #emo. Cir. it =led an appli9ation 6or 6are rate in9rease. An a9rossKt7eK8oard in9rease o6 ei17t and a 7al6 9entavos (P3.3/4) per ilometer 6or all tpes o6 provin9ial 8uses wit7 a minimumKma;imum 6are ran1e o6 =6teen (,4) per9ent over and8elow t7e proposed 8asi9 per ilometer 6are rate& wit7 t7e said minimumKma;imum 6areran1e applin1 onl to ordinar& =rst 9lass and premium 9lass 8uses and a =6tK9entavo(P3.43) minimum per ilometer 6are 6or air9on 8uses& was sou17t
respondent LT"' rendered a de9ision 1rantin1 t7e 6are rate in9rease in a99ordan9e wit7 aspe9i=ed s97edule o6 6ares on a strai17t 9omputation met7od
DTC Se9. issued Department rder No. J2K4/B de=nin1 t7e poli9 6ramewor on t7ere1ulation o6 transport servi9es. It provides inter alia t7at Passen1er 6ares s7all also 8edere1ulated& e;9ept 6or t7e lowest 9lass o6 passen1er servi9e (normall t7ird 9las spassen1er transport) 6or w7i97 t7e 1overnment will =; indi9ative or re6eren9e 6ares.perators o6 parti9ular servi9es ma =; t7eir own 6ares wit7in a ran1e ,4 a8ove and8elow t7e indi9ative or re6eren9e rate.H
LT"' issued #emorandum Cir9ular No. J2K33J promul1atin1 t7e 1uidelines 6or t7ei mplementation o6 DTC Department rder No. J2K4/B& w7i97 provides& amon1 ot7ers&t7at:T7e issuan9e o6 a Certi=9ate o6 Pu8li9 Convenien9e is determined 8 pu8li9 need. T7epresumption o6 pu8li9 need 6or a servi9e s7all 8e deemed in 6avor o6 t7e appli9ant& w7ile8urden o6 provin1 t7at t7ere is no need 6or t7e proposed servi9e s7all 8e t7e [email protected]T7e e;istin1 aut7oriFed 6are ran1e sstem o6 plus
or minus ,4 per 9ent 6or provin9ial8uses and eepnes s7all 8e widened to 23 and K24 limit in ,JJ- wit7 t7e aut7oriFed6are to 8e repla9ed 8 an indi9ative or re6eren9e rate as t7e 8asis 6or t7e e;panded 6areran1eH
P'AP K availin1 itsel6 o6 t7e dere1ulation poli9 o6 t7e DTC allowin1 provin9ial 8usoperators to 9olle9t plus 23 and minus 24 o6 t7e pres9ri8ed 6are wit7out =rst 7avin1=led a petition 6or t7e purpose and wit7out t7e 8ene=t o6 a pu8li9 7earin1& announ9ed a6are in9rease o6 twent (23) per9ent o6 t7e e;istin1 6ares
#! =led a petition 8e6ore t7e LT"' opposin1 t7e upward adustment o6 8us 6ares.
(&&U)' ?N t7e a8ove memoranda& 9ir9ulars andor orders o6 t7e DTC and t7e LT"'w7i97& amon1 ot7ers& (a) aut7oriFe provin9ial 8us and eepne operators to in9rease orde9rease t7e pres9ri8ed transportation 6ares wit7out appli9ation t7ere6or wit7 t7e LT"' andwit7out 7earin1 and approval t7ereo6 8 said a1en9 is in violation o6 Se9. ,0(9) o6 CA ,-0&and in dero1ation o6 LT"'@s dut to =; and determine ust and reasona8le 6ares 8dele1atin1 t7at 6un9tion to 8us operators& and (8) esta8lis7 a presumption o6 pu8li9 need in6avor o6 appli9ants 6or 9erti=9ates o6 pu8li9 9onvenien9e and pla9e on t7e oppositor t7e8urden o6 provin1 t7at t7ere is no need 6or t7e proposed servi9e& in patent violation not onlo6 Se9. ,0(9) o6 CA ,-0& as amended& 8ut also o6 Se9. 23(a) o6 t7e same A9t mandatin1 t7at6ares s7ould 8e ust and reasona8le
*)L+' %es.
Se9tion ,0(9) o6 t7e Pu8li9 Servi9e A9t& as amended& reads:Se9. ,0. Pro9eedin1s o6 t7e Commission& upon noti9e and 7earin1. T7e Commission s7all7ave power& upon proper noti9e and 7earin1 in a99ordan9e wit7 t7e rules and provisions o6 t7is A9t& su8e9t to t7e limitations and e;9eptions mentioned and savin1 provisions to t7e9ontrar:;;; ;;; ;;;(9) To =; and determine individual or oint rates& tolls& 97ar1es& 9lassi=9ations& or s97edules t7ereo6& as well as 9ommutation& milea1e ilometra1e& and ot7er spe9ial ratesw7i97 s7all 8e imposed& o8served& and 6ollowed t7erea6ter 8 an pu8li9 servi9e: Provided& T7at t7e Commission ma& in its dis9retion& approve rates proposed 8 pu8li9 servi9esprovisionall and wit7out ne9essit o6 an 7earin1 8ut it
s7all 9all a 7earin1 t7ereon wit7int7irt das t7erea6ter& upon pu8li9ation and noti9e to t7e 9on9erns operatin1 i n t7eterritor ae9ted: Provided& 6urt7er& T7at in 9ase t7e pu8li9 servi9e e>uipment o6 anoperator is used prin9ipall or se9ondaril 6or t7e promotion o6 a private 8usiness& t7e netpro=ts o6 said private 8usiness s7all 8e 9onsidered in relation wit7 t7e pu8li9 servi9e o6 su97 operator 6or t7e purpose o6 =;in1 t7e rates.
LT"' is aut7oriFed under E 232& s. ,J/B to determine& pres9ri8e& approve andperi odi9all review and adust& reasona8le 6ares& rates and ot7er related 97ar1es& relativeto t7e operation o6 pu8li9 land transportation servi9es provided 8 motoriFed ve7i9les
LT"' O not aut7oriFed to dele1ate t7at power to a 9ommon 9arrier& a transport operator&or ot7er pu8li9 servi9e
aut7orit 1iven 8 t7e LT"' to t7e provin9ial 8us operators to set a 6are ran1e over anda8ove t7e aut7oriFed e;istin1 6are& is ille1al and invalid as it is tantamount to an unduedele1ation o6 le1islative aut7orit
rate s7ould not 8e 9on=s9ator as would pla9e an operator in a situation w7ere 7e will9ontinue to operate at a loss rate s7ould ena8le pu8li9 utilities to 1enerate revenuessuM9ient to 9over operational 9osts and provide reasona8le return on t7e investments
CPC K aut7oriFation 1ranted 8 t7e LT"' 6or t7e operation o6 land transportation servi9es6or pu8li9 use as re>uired 8 law. Pursuant to Se9tion ,0(a) o6 t7e Pu8li9 Servi9e A9t& asamended& t7e 6ollowin1 re>uirements must 8e met 8e6ore a CPC ma 8e 1ranted& to wit: (i)t7e appli9ant must 8e a 9itiFen o6 t7e P7ilippines& or a 9orporation or 9oKpartners7ip&asso9iation or ointKsto9 9ompan 9o nstituted and or1aniFed under t7e laws o6 t7eP7ilippines& at least 03 per 9entum o6 its sto9 or paidKup 9apital must 8elon1 entirel to9itiFens o6 t7e P7ilippines (ii) t7e appli9ant must 8e =nan9iall 9apa8le o6 undertain1 t7eproposed servi9e and meetin1 t7e responsi8ilities in9ident to its operation and (iii) t7eappli9ant must prove t7at t7e operation o6 t7e pu8li9 servi9e proposed and t7ea ut7oriFation to do 8usiness will promote t7e pu8li9 interest in a proper and
suita8lemanner t7ere must 8e proper noti9e and 7earin1 8e6ore t7e PSC 9an e;er9ise its power toissue a CPC
LT"' #emorandum Cir9ular No. J2K33J& Part I$ is in9ompati8le and in9onsistent wit7Se9tion ,0(9)(iii) o6 t7e Pu8li9 Servi9e A9t w7i97 re>uires t7at 8e6ore a CPC will 8e issued&t7e appli9ant must prove 8 proper noti9e and 7earin1 t7at t7e operation o6 t7e pu8li9servi9e proposed will promote pu8li9 interest in a proper and suita8le manner. n t7e9ontrar& t7e poli9 1uideline states t7at t7e presumption o6 pu8li9 need 6or a pu8li9servi9e s7all 8e deemed in 6avor o6 t7e appli9ant.
(LU&!G M!-O UO L!BOR C)T)R vs.*O. J)&U& B. G!RC(!, JR., t#e L!+ TR!&PORT!T(O FR!C*(&(G !+ R)GUL!TOR- BO!R+, an t#e PRO/(C(!L BU& OP)R!TOR& !&&OC(!T(O OF T*) P*(L(PP()& G.R. o. 001230 +ece4ber 52, 0667 F!CT& : T7en Se9retar o6 DTC& s9ar #. r8os& issued #emorandum Cir9ular No. J3KJ4 to t7en LT"' C7airman& "emedios A.S. ernando allowin1 provin9ial 8us operators to 97ar1e passen1ers rates wit7in a ran1e o6 ,4 a8ove and ,4 8elow t7e LT"' oM9ial rate 6or a period o6 one (,) ear. T7is ran1e was later in9reased 8 LT"' t7ru a #emorandum Cir9ular No. J2K33J providin1& amon1 ot7ers& t7at T7e e;istin1 aut7oriFed 6are ran1e sstem o6 plus or minus ,4 per 9ent 6or provin9ial 8uses and eepnes s7all 8e widened to 23 and K24 limit in ,JJ- wit7 t7e aut7oriFed 6are to 8e repla9ed 8 an indi9ative or re6eren9e rate as t7e 8asis 6or t7e e;panded 6are ran1e.H Sometime in #ar97& ,JJ-& private respondent P'AP& availin1 itsel6 o6 t7e dere1ulation poli9 o6 t7e DTC allowin1 provin9ial 8us operators to 9olle9t plus 23 and minus 24 o6 t7e pres9ri8ed 6are wit7out =rst 7avin1 =led a petition 6or t7e purpose and wit7out t7e 8ene=t o6 a pu8li9 7earin1& announ9ed a 6are in9rease o6 twent (23) per9ent o6 t7e e;istin1 6ares. n #ar97 ,0& ,JJ-& petitioner #! =led a petition 8e6ore t7e LT"' opposin1 t7e upward adustment o6 8us 6ares& w7i97 t7e LT"' dismissed 6or la9 o6 merit.
(&&U)' ?7et7er or not t7e aut7orit 1iven 8 respondent LT"' to provin9ial 8us operators to set a 6are ran1e o6 plus or minus =6teen (,4) per9ent& later in9reased to plus twent (23) and minus twentK=ve (K24) per9ent& over and a8ove t7e e;istin1 aut7oriFed 6are wit7out 7avin1 to =le a petition 6or t7e purpose& is un9onstitutional& invalid and ille1al.
*)L+' %es. !nder se9tion ,0(9) o6 t7e Pu8li9 Servi9e A9t& t7e Le1islature dele1ated to t7e de6un9t Pu8li9 Servi9e Commission t7e power o6 =;in1 t7e rates o6 pu8li9 servi9es. "espondent LT"'& t7e e;istin1 re1ulator 8od toda& is liewise vested wit7 t7e same under E;e9utive rder No. 232 dated uested t7e mana1er o6 petitioner Lita Enterprises& In9. to turn over t7e re1istration papers to 7im& 8ut t7e latter alle1edl re6used. *en9e& 7e and 7is wi6e =led a 9omplaint a1ainst Lita Enterprises& In9.& #rs. de GalveF and t7e S7eri o6 #anila 6or re9onvean9e o6 motor ve7i9les wit7 dama1es.
ISS!E: ?7et7er or not petitioner 7as a 9ause o6 a9tion a1ainst de6endants. *ELD: No. !n>uestiona8l& t7e parties 7erein operated under an arran1ement& 9ommonl nown as t7e a8it sstem& w7ere8 a person w7o 7as 8een 1ranted a 9erti=9ate o6 9onvenien9e allows anot7er person w7o owns motors ve7i9les to operate under su97 6ran97ise 6or a 6ee. A 9erti=9ate o6 pu8li9 9onvenien9e is a spe9ial privile1e 9on6erred 8 t7e 1overnment . A8use o6 t7is privile1e 8 t7e 1rantees t7ereo6 9annot 8e 9ountenan9ed. T7e a8it sstem 7as 8een Identi=ed as one o6 t7e root 9auses o6 t7e prevalen9e o6 1ra6t and 9orruption in t7e 1overnment transportation oM9es. In t7e words o6 C7ie6 uen9es o6 7is a9ts. T7e de6e9t o6 ine;isten9e o6 a 9ontra9t is permanent and in9ura8le& and 9annot 8e 9ured 8 rati=9ation or 8 pres9ription. As t7is Court said in Eu1enio v. Perdido& t7e mere lapse o6 time 9annot 1ive eM9a9 to 9ontra9ts t7at are null void. T7e prin9iple o6 in pari deli9to is well nown not onl in t7is urisdi9tion 8ut also in t7e !nited States w7ere 9ommon law prevails. !nder Ameri9an urisdi9tion& t7e do9trine is stated t7us: T7e proposition is universal t7at no a9tion arises& in e>uit or at law& 6rom an ille1al 9ontra9t no suit 9an 8e maintained 6or its spe9i=9 per6orman9e& or to re9over t7e propert a1reed to 8e sold or delivered& or dama1es 6or its propert a1reed to 8e sold or delivered& or dama1es 6or its violation. T7e rule
7as sometimes 8een laid down as t7ou17 it was e>uall universal& t7at w7ere t7e parties are in pari deli9to& no aMrmative relie6 o6 an ind will 8e 1iven to one a1ainst t7e ot7er. Alt7ou17 9ertain e;9eptions to t7e rule are provided 8 law& ?e see no 9o1ent reason w7 t7e 6ull 6or9e o6 t7e rule s7ould not 8e applied in t7e instant 9ase. resaid 9ars were t7en re1istered in t7e name o6 LitaEnterprises
one o6 t7e ta;i9a8s driven 8 9ampo and Gar9ia@s emploee& Emeterio #artin& 9ollidedwit7 a motor99le w7ose driver& lorante GalveF& died 6rom t7e 7ead inuries sustainedt7ere6rom
a 9riminal 9ase was =led a1ainst t7e driver #artin& w7ile a 9ivil 9ase 6or dama1es wasinstituted 8 7eir o6 t7e vi9tim a1ainst Lita Enterprises
(&&U)' ?N Lita Enterprises is lia8le to t7e 7eir o6 t7e vi9tim w7o died as a result o6 t7e1ross ne1li1en9e o6 9ampo and Gar9ia@s driver w7ile drivin1 one private respon dents@ta;i9a8s
*)L+' %es.
8abit syste4 O sstem w7ere8 a person w7o 7as 8een 1ranted a 9erti=9ate o6 9onvenien9e allow s anot7er person w7o owns motors ve7i9les to operate under su976ran97ise 6or a 6ee 9ontrar to pu8li9 poli9 and& t7ere6ore& void and ine;istent underArti9le ,-3J o6 t7e Civil Code as a result& t7e 9ourt will not aid eit7er part to en6or9e anille1al 9ontra9t& 8ut will leave t7em 8ot7 w7ere it =nds t7em (pari deli9to rule)
Art. ,-,2: I6 t7e a9t in w7i97 t7e unlaw6ul or 6or8idden 9ause 9onsists does not 9onstitutea 9riminal oense& t7e 6ollowin1 rules s7all 8e o8served (,) w7en t7e 6ault& is on t7e parto6 8ot7 9ontra9tin1 parties& neit7er ma re9over w7at 7e 7as 1iven 8 virtue o6 t7e9ontra9t& or demand t7e per6orman9e o6 t7e ot7er@s undertain1.H
t7e de6e9t o6 ine;isten9e o6 a 9ontra9t is permanent and in9ura8le& and 9annot 8e 9ured 8rati=9ation or 8 pres9ription 'ATANGAS CAT$& INC. vs. T*E C!"T APPEALS& T*E 'ATANGAS CIT% SANGG!NIANG PANL!NGSD and 'ATANGAS CIT% #A%" +G.". No. ,//,3. Septem8er 2J& 233-5 ACTS: n
streets& ri17ts o6 was& t7e 6oundin1 o6 stru9tures& and t7e par9elin1 o6 lar1e re1ions O allow an LG! a 9ertain de1ree o6 re1ulation over CAT$ operators. ;;; 'ut& w7ile we re9o1niFe t7e LG!s@ power under t7e 1eneral wel6are 9lause& we 9annot sustain "esolution No. 2,3. ?e are 9onvin9ed t7at respondents straed 6rom t7e well re9o1niFed limits o6 its power. T7e Raws in "esolution No. 2,3 are: (,) it violates t7e mandate o6 e;istin1 laws and (2) it violates t7e State@s dere1ulation poli9 over t7e CAT$ industr. LG!s must re9o1niFe t7at te97ni9al matters 9on9ernin1 CAT$ operation are wit7in t7e e;9lusive re1ulator power o6 t7e NTC. CGEKC!'A PE"AT"S AND D"I$E"S ASSCIATIN vs. T*E C!"T APPEALS& L!NGSD SILANGAN T"ANSP"T SE"$ICES& C"P.& INC. G.". No. ,33B2B #ar97 ,/& ,JJ2 ACTS: It appears t7at a 9erti=9ate o6 pu8li9 9onvenien9e to operate a eepne servi9e was ordered to 8e issued in 6avor o6 Lun1sod Silan1an to pl t7e Co1eoKCu8ao route sometime in ,J/ on t7e usti=9ation t7at pu8li9 ne9essit and 9onvenien9e will 8est 8e served& and in t7e a8sen9e o6 e;istin1 aut7oriFed operators on t7e lined appl 6or . . . n t7e ot7er 7and& de6endantKAsso9iation was re1istered as a nonsto9& nonKpro=t or1aniFation wit7 t7e Se9urities and E;97an1e Commission on 9to8er 3& ,J/4 . . . wit7 t7e main purpose o6 representin1 plaintiKappellee 6or w7atever 9ontra9t andor a1reement it will 7ave re1ardin1 t7e owners7ip o6 units& and t7e lie& o6 t7e mem8ers o6 t7e Asso9iation . . . Pertur8ed 8 plaintisQ 'oard "esolution No. J . . . adoptin1 a 'anderaQ Sstem under w7i97 a mem8er o6 t7e 9ooperative is permitted to >ueue 6or passen1er at t7e disputed pat7wa in e;97an1e 6or t7e ti9et wort7 twent pesos& t7e pro9eeds o6 w7i97 s7all 8e utiliFed 6or C7ristmas pro1rams o6 t7e drivers and ot7er 8ene=ts& and on t7e stren1t7 o6 de6endantsQ re1istration as a 9olle9tive 8od wit7 t7e Se9urities and E;97an1e Commission& de6endantsKappellants& led 8 "omeo liva de9ided to 6orm a 7uman 8arri9ade on Novem8er ,,& ,J/4 and assumed t7e dispat97in1 o6 passen1er eepnes . . . T7is development as initiated 8 de6endantsKappellants 1ave rise to t7e suit 6or dama1es. De6endantKAsso9iationQs Answer 9ontained ve7ement denials to t7e insinuation o6 tae over and at t7e same time raised as a de6ense t7e 9ir9umstan9e t7at t7e or1aniFation was 6ormed not to 9ompete wit7 plaintiK9ooperative. It& 7owever& admitted t7at it is not aut7oriFed to transport passen1ers . . . ISS!E : ?7et7er or not t7e petitioner usurped t7e propert ri17t o6 t7e respondent. *ELD: %es. ;;; !nder t7e Pu8li9 Servi9e Law& a 9erti=9ate o6 pu8li9 9onvenien9e is an aut7oriFation issued 8 t7e Pu8li9 Servi9e Commission 6or t7e operation o6 pu8li9 servi9es 6or w7i97 no 6ran97ise is re>uired 8 law. In t7e instant 9ase& a 9erti=9ate o6 pu8li9 9onvenien9e was issued to respondent 9orporation on
in t7e 8road sense o6 t7e term. !nder t7e Pu8li9 Servi9e Law& a 9erti=9ate o6 pu8li9 9onvenien9e 9an 8e sold 8 t7e 7older t7ereo6 8e9ause it 7as 9onsidera8le material value and is 9onsidered as valua8le asset ("amundo v. Luneta #otor Co.& et al.& 4/ P7il. //J). Alt7ou17 t7ere is no dou8t t7at it is private propert& it is ae9ted wit7 a pu8li9 interest and must 8e su8mitted to t7e 9ontrol o6 t7e 1overnment 6or t7e 9ommon 1ood (Pan1asinan Transportation Co. v. PSC& B3 P7il 22,). *en9e& inso6ar as t7e interest o6 t7e State is involved& a 9erti=9ate o6 pu8li9 9onvenien9e does not 9on6er upon t7e 7older an proprietar ri17t or interest or 6ran97ise in t7e route 9overed t7ere8 and in t7e pu8li9 7i17was (Lu1ue v. $ille1as& L224-4& Nov . 2/& ,J0J& 3 SC"A -3J). *owever& wit7 respe9t to ot7er persons and ot7er pu8li9 utilities& a 9erti=9ate o6 pu8li9 9onvenien9e as propert& w7i97 represents t7e ri17t and aut7orit to operate its 6a9ilities 6or pu8li9 servi9e& 9annot 8e taen or inter6ered wit7 wit7out due pro9ess o6 law. Appropriate a9tions ma 8e maintained in 9ourts 8 t7e 7older o6 t7e 9erti=9ate a1ainst t7ose w7o 7ave not 8een aut7oriFed to operate in 9ompetition wit7 t7e 6ormer and t7ose w7o invade t7e ri17ts w7i97 t7e 6ormer 7as pursuant to t7e aut7orit 1ranted 8 t7e Pu8li9 Servi9e Commission (A.L. Ammen Transportation Co. v. Golin19o. - P7il. 2/3). In t7e 9ase at 8ar& t7e trial 9ourt 6ound t7at petitioner asso9iation 6or9i8l too over t7e operation o6 t7e eepne servi9e in t7e Co1eoKCu8ao route wit7out an aut7oriFation 6rom t7e Pu8li9 Servi9e Commission and in violation o6 t7e ri17t o6 respondent 9orporation to operate its servi9es in t7e said route under its 9erti=9ate o6 pu8li9 9onvenien9e C. '. ?ILLIA#S vs. TED" ". %ANGC G.". No. LK/24. #ar97 ,3& ,J,ACTS: T7e steamer Su8i9& owned 8 t7e de6endant& 9ollided wit7 t7e lun97 Eu9lid owned 8 t7e plainti& in t7e 'a o6 #anila at an earl 7our on t7e mornin1 o6 uall 8etween t7e respe9tive owners& P4&333 to 8e paid t7e plainti 8 t7e de6endant& and P4&333 to 8e 8orne 8 t7e plainti 7imsel6. rom t7is ud1ment 8ot7 de6endant and plainti appealed. ISS!E: ?7et7er or not plainti s7ould not 8e 7eld lia8le on a99ount o6 do9trine o6 last 9lear 97an9et7e de6endant 7avin1 t7e last opportunit to avoid t7e 9ollision. *ELD: No.
In 9ases o6 a disaster arisin1 6rom t7e mutual ne1li1en9e o6 two parties& t7e part w7o 7as a last 9lear opportunit o6 avoidin1 t7e a99ident& notwit7standin1 t7e ne1li1en9e o6 7is opponent& is 9onsidered w7oll responsi8le 6or it under t7e 9ommonKlaw rule o6 lia8ilit as applied in t7e 9ourts o6 9ommon law o6 t7e !nited States. 'ut t7is rule (w7i97 is not re9o1niFed in t7e 9ourts o6 admiralt in t7e !nited States& w7erein t7e loss is divided in 9ases o6 mutual and 9on9urrin1 ne1li1en9e& as also w7ere t7e error o6 one vessel 7as e;posed 7er to dan1er o6 9ollision w7i97 was 9onsummated 8 7e 6urt7er rule& t7at w7ere t7e previous appli9ation 8 t7e 6urt7er rule& t7at w7ere t7e previous a9t o6 ne1li1en9e o6 one vessel 7as 9reated a position o6 dan1er& t7e ot7er vessel is not ne9essaril lia8le 6or t7e mere 6ailure to re9o1niFe t7e perilous situation and it is onl w7en in 6a9t it does dis9over it in time to avoid t7e 9asualt 8 t7e use o6 ordinar 9are& t7at it 8e9omes lia8le 6or t7e 6ailure to mae use o6 t7is last 9lear opportunit to avoid t7e a99ident. (See 9ases 9ited in Notes& B C9.& pp. ,,& ,2& ,.) So& under t7e En1lis7 rule w7i97 9on6orms ver nearl to t7e 9ommonKlaw rule as applied in t7e Ameri9an 9ourts& it 7as 8een 7eld t7at t7e 6ault o6 t7e =rst vessel in 6ailin1 to e;7i8it proper li17ts or to tae t7e proper side o6 t7e 97annel will relieve 6rom lia8ilit one w7o ne1li1entl runs into su97 vessels 8e6ore 7e sees it alt7ou17 it will not 8e a de6ense to one w7o& 7avin1 timel warnin1 o6 t7e dan1er o6 9ollision& 6ails to use proper 9are to avoid it. (Pollo9 on Torts& B-.). In t7e 9ase at 8ar& t7e most t7at 9an 8e said in support o6 plaintiQs 9ontention is t7at t7ere was ne1li1en9e on t7e part o6 t7e oM9ers on de6endantQs vessel in 6ailin1 to re9o1niFe t7e perilous situation 9reated 8 t7e ne1li1en9e o6 t7ose in 97ar1e o6 plaintiQs laun97& and t7at 7ad t7e re9o1niFed it in time& t7e mi17t 7ave avoided t7e a99ident. 'ut sin9e it does not appear 6rom t7e eviden9e t7at t7e did& in 6a9t& dis9over t7e perilous situation o6 t7e laun97 in time to avoid t7e a99ident 8 t7e e;er9ise o6 ordinar 9are& it is ver 9lear t7at under t7e a8ove set out limitation to t7e rule& t7e plainti 9annot es9ape t7e le1al 9onse>uen9es o6 t7e 9ontri8utor ne1li1en9e o6 7is laun97& even were we to 7old t7at t7e do9trine is appli9a8le in t7e urisdi9tion& upon w7i97 point we e;pressl reserve our de9ision at t7is time. C##ISSINE" C!ST#S vs.T*E C!"T APPEALS G.". Nos. ,,,232K34 uentl& two ?arrants o6 SeiFure and Detention were issued 6or t7e vessel and its 9ar1o.
"espondent Cesar S. !r8ino& Sr.& does not own t7e vessel or an o6 its 9ar1o 8ut 9laimed a pre6erred maritime lien under a Salva1e A1reement dated uestion t7e urisdi9tion o6 t7e CA 8e6ore t7is Court. T7e motion was denied. *en9e& in t7is petition t7e Commissioner o6 Customs assails t7e "esolution re9ited a8ove and sees to pro7i8it t7e CA 6rom 9ontinuin1 to 7ear t7e 9ase. ISS!E: ?7et7er !r8inoQs 9laim is a pre6erred lien in t7is 9ase. *ELD: No. ;;; irst o6 all& t7e Court =nds t7e de9ision o6 t7e "TC o6 #anila& in so 6ar as it relates to t7e vessel #$ Star A9e& to 8e void as urisdi9tion was never a9>uired over t7e vessel. In =lin1 t7e 9ase& !r8ino 7ad impleaded t7e vessel as a de6endant to en6or9e 7is alle1ed maritime lien. T7is meant t7at 7e 8rou17t an a9tion in rem under t7e Code o6 Commer9e under w7i97 t7e vessel ma 8e atta97ed and sold. *owever& t7e 8asi9 operative 6a9t 6or t7e institution and per6e9tion o6 pro9eedin1s in rem is t7e a9tual or 9onstru9tive possession o6 t7e res 8 t7e tri8unal empowered 8 law to 9ondu9t t7e pro9eedin1s. T7is means t7at to a9>uire urisdi9tion over t7e vessel& as a de6endant& t7e trial 9ourt must 7ave o8tained eit7er a9tual or 9onstru9tive possession over it. Neit7er was a99omplis7ed 8 t7e "TC o6 #anila. In 7is 9omment to t7e petition& !r8ino plainl stated t7at petitioner 7as a9tual+si95 p7si9al 9ustod not onl o6 t7e 1oods andor 9ar1o 8ut t7e su8e9t vessel& #$ Star A9e& as well. T7is is 9learl an admission t7at t7e "TC o6 #anila did not 7ave urisdi9tion over t7e res. ?7ile !r8ino 9ontends t7at t7e Commissioner o6 Custom@s 9ustod was ille1al& su97 6a9t& even i6 true& does not deprive t7e Commissioner o6 Customs o6 urisdi9tion t7ereon. T7is is a >uestion t7at ou17t to 8e resolved in t7e seiFure and 6or6eiture 9ases& w7i97 are now pendin1 wit7 t7e CTA& and not 8 t7e re1ular 9ourts as a 9ollateral matter to en6or9e 7is lien. ' simpl =lin1 a 9ase in rem a1ainst t7e vessel& despite its 8ein1 in t7e 9ustod o6 9ustoms oM9ials& !r8ino 7as 9ir9umvented t7e rule t7at re1ular trial 9ourts are devoid o6 an 9ompeten9e to
pass upon t7e validit or re1ularit o6 seiFure and 6or6eiture pro9eedin1s 9ondu9ted in t7e 'ureau o6 Customs& on 7is mere assertion t7at t7e administrative pro9eedin1s were a nullit. n t7e ot7er 7and& t7e 'ureau o6 Customs 7ad a9>uired urisdi9tion over t7e res a7ead and to t7e e;9lusion o6 t7e "TC o6 #anila. T7e 6or6eiture pro9eedin1s 9ondu9ted 8 t7e 'ureau o6 Customs are in t7e nature o6 pro9eedin1s in rem and urisdi9tion was o8tained 6rom t7e moment t7e vessel entered t7e SL! port. #oreover& t7ere is no >uestion t7at 6or6eiture pro9eedin1s were instituted and t7e vessel was seiFed even 8e6ore t7e =lin1 o6 t7e "TC o6 #anila 9ase. T7e Court is aware t7at !r8ino sees to en6or9e a maritime lien and& 8e9ause o6 its nature& it is e>uivalent to an atta97ment 6rom t7e time o6 its e;isten9e. Nevert7eless& despite 7is lien@s 9onstru9tive atta97ment& !r8ino still 9annot 9laim an advanta1e as 7is lien onl 9ame a8out a6ter t7e warrant o6 seiFure and detention was issued and implemented. T7e Salva1e A1reement& upon w7i97 !r8ino 8ased 7is lien& was entered into on uired over it& and t7e de9ision 9annot 8e 8indin1 and t7e writ o6 e;e9ution issued in 9onne9tion t7erewit7 is null and void. P*ILIPPINE C*A"TE" INS!"ANCE C"P"ATIN vs. !NN?N ?NE" T*E $ESSEL #$ NATINAL *N"&H NATINAL S*IPPING C"P"ATIN T*E P*ILIPPINES and INTE"NATINAL CNTAINE" SE"$ICES& INC. +G.". No. ,0,/.
usin1 its win97 9rane. T7e 9rane was operated 8 le1ario 'alsa& a win97man 6rom t7e ICTSI& e;9lusive arrastre operator o6 #ICT. Denasto DauF& uires t7e 9ommon 9arrier to now and to 6ollow t7e re>uired pre9aution 6or avoidin1 dama1e to& or destru9tion o6 t7e 1oods entrusted to it 6or sale& 9arria1e and deliver. It re>uires 9ommon 9arriers to render servi9e wit7 t7e 1reatest sill and 6oresi17t and to use all reasona8le means to as9ertain t7e nature and 97ara9teristi9 o6 1oods tendered 6or s7ipment& and to e;er9ise due 9are in t7e 7andlin1 and stowa1e& in9ludin1 su97 met7ods as t7eir nature re>uires.H T7e 9ommon 9arrier@s dut to o8serve t7e re>uisite dili1en9e in t7e s7ipment o6 1oods lasts 6rom t7e time t7e arti9les are surrendered to or un9onditionall pla9ed in t7e possession o6& and re9eived 8& t7e 9arrier 6or transportation until delivered to& or until t7e lapse o6 a reasona8le time 6or t7eir a99eptan9e& 8 t7e person entitled to re9eive t7em.5 ?7en t7e 1oods s7ipped are eit7er lost or arrive in dama1ed 9ondition& a presumption arises a1ainst t7e 9arrier o6 its 6ailure to o8serve t7at dili1en9e& and t7ere need not 8e an e;press =ndin1 o6 ne1li1en9e to 7old it lia8le. To over9ome t7e presumption o6 ne1li1en9e in t7e 9ase o6 loss& destru9tion or
deterioration o6 t7e 1oods& t7e 9ommon 9arrier must prove t7at it e;er9ised e;traordinar dili1en9e. *owever& under Arti9le ,B- o6 t7e New Civil Code& t7e presumption o6 ne1li1en9e does not appl to an o6 t7e 6ollowin1 9auses: ,. 2. . -. 4.
lood& storm& eart7>uae& li17tnin1 or ot7er natural disaster or 9alamit A9t o6 t7e pu8li9 enem in war& w7et7er international or 9ivil A9t or omission o6 t7e s7ipper or owner o6 t7e 1oods T7e 97ara9ter o6 t7e 1oods or de6e9ts in t7e pa9in1 or in t7e 9ontainers rder or a9t o6 9ompetent pu8li9 aut7orit.
It 8ears stressin1 t7at t7e enumeration in Arti9le ,B- o6 t7e New Civil Code w7i97 e;empts t7e 9ommon 9arrier 6or t7e loss or dama1e to t7e 9ar1o is a 9losed list. To e;9ulpate itsel6 6rom lia8ilit 6or t7e lossdama1e to t7e 9ar1o under an o6 t7e 9auses& t7e 9ommon 9arrier is 8urdened to prove an o6 t7e a6ore9ited 9auses 9laimed 8 it 8 a preponderan9e o6 eviden9e. I6 t7e 9arrier su99eeds& t7e 8urden o6 eviden9e is s7i6ted to t7e s7ipper to prove t7at t7e 9arrier is ne1li1ent. De6e9tH is t7e want or a8sen9e o6 somet7in1 ne9essar 6or 9ompleteness or per6e9tion a la9 or a8sen9e o6 somet7in1 essential to 9ompleteness a de=9ien9 in somet7in1 essential to t7e proper use 6or t7e purpose 6or w7i97 a t7in1 is to 8e used. n t7e ot7er 7and& in6erior means o6 poor >ualit& medio9re& or se9ond rate. A t7in1 ma 8e o6 in6erior >ualit 8ut not ne9essaril de6e9tive. In ot7er words& de6e9tivenessH is not snonmous wit7 in6eriorit.H ;;; In t7e present 9ase& t7e trial 9ourt de9lared t7at 8ased on t7e re9ord& t7e loss o6 t7e s7ipment was 9aused 8 t7e ne1li1en9e o6 t7e petitioner as t7e s7ipper: T7e same ma 8e said wit7 respe9t to de6endant ICTSI. T7e 8reaa1e and 9ollapse o6 Crate No. , and t7e total destru9tion o6 its 9ontents were not imputa8le to an 6ault or ne1li1en9e on t7e part o6 said de6endant in 7andlin1 t7e unloadin1 o6 t7e 9ar1oes 6rom t7e 9arrin1 vessel& 8ut was due solel to t7e in7erent de6e9t and weaness o6 t7e materials used in t7e 6a8ri9ation o6 said 9rate. T7e 9rate s7ould 7ave t7ree solid and stron1 wooden 8atten pla9ed side 8 side underneat7 or on t7e Roorin1 o6 t7e 9rate to support t7e wei17t o6 its 9ontents.
9G.R. o. 0:0322. July 3, 5;;1
vs UKO= O=)R OF T*) /)&&)L M>/ ?!T(O!L *OOR,@ !T(O!L &*(PP(G CORPOR!T(O OF T*) P*(L(PP()& an(T)R!T(O!L COT!()R &)R/(C)&, (C., respondents.
F!CT&' 9arrier K National S7ippin1 Corporation o6 t7e P7ilippines (NSCP)
Consi1nee K 'lue #ono International Compan& In9orporated ('#ICI) Insurer K P7ilippine C7arter Insuran9e Corporation (PCIC)
Arrastre perator K International Container Terminal Servi9es& In9orporated (ICTSI)
n Novem8er 4& ,JJ4& <. Tradin1 Co. Ltd. o6 Seoul& orea& loaded a s7ipment o6 6our units o6 parts anda99essories in t7e port o6 Pusan& orea& on 8oard t7e vessel #$ National *onor & H represented in t7eP7ilippines 8 its a1ent&
ational &#iing Cororation o" t#e P#iliines $&CP%. T7e 1oods were to8e delivered to t7e ultimate 9onsi1nee
Blue Mono (nternational Co4any, (ncororate $BM(C(% . T7es7ipment was 9ontained in two wooden 9rates& namel& Crate No. , and Crate No. 2& 9omplete and in1ood order 9ondition. T7ere were no marin1s on t7e outer portion o6 t7e 9rates e;9ept t7e name o6t7e 9onsi1nee. +B5
U
Crate No. , measured 2- 9u8i9 meters and wei17ed &023 1s. n t7e Roorin1 o6 t7e wooden9rates were t7ree wooden 8attens pla9ed side 8 side to support t7e wei17t o6 t7e 9ar1o. U
Crate No. 2& on t7e ot7er 7and& measured ,3 9u8i9 meters and wei17ed 2&303 1s.
It was insured 6or P2&4-B&2B3.33 wit7 t7e
P#iliine C#arter (nsurance Cororation $PC(C%. !ponarrival&
t#e (nternational Container Ter4inal &ervices, (ncororate $(CT&(% was 6urnis7ed wit7 a 9opo6 t7e 9rate 9ar1o list and 8ill o6 ladin1& and it new t7e 9ontents o6 t7e 9rate. +,,5 T7e 6ollowin1 da&t7e vessel started dis97ar1in1 its 9ar1oes usin1 its win97 9rane. Claudio Cansino& t7e stevedore o6 t7eICTSI& pla9ed two slin1 9a8les on ea97 end o6 Crate No. ,. +,45 No slin1 9a8le was 6astened on t7e midK portion o6 t7e 9rate. In DauF@s e;perien9e& t7is was a normal pro9edure . +,05 As t7e 9rate was 8ein17oisted 6rom t7e vessel@s 7at97& t7e mid Kportion o6 t7e wooden Roorin1 suddenl snapped in t7e air&
a8out =ve 6eet 7i17 6rom t7e vessel@s twin de9& sendin1 all its 9ontents 9ras7in1 down 7ard & +,B5 r esultin1 in e;tensive dama1e to t7e s7ipment. '#ICI@s 9ustoms 8roer& <"# In9orporated& too deliver o6 t7e 9ar1o in su97 dama1ed 9ondition . +,/5 !pon re9eipt o6 t7e dama1ed s7ipment&'#ICI 6ound t7at t7e same 9ould no lon1er 8e used 6or t7e intended purpose. '#ICI su8se>uentl=led separate 9laims a1ainst t7e NSCP & t7e ICTSI& and its insurer& t7e PCIC & 6or!SV0,&433.33. ?7en t7e ot7er 9ompanies denied lia8ilit& PCIC paid t7e 9laim and was issued aSu8ro1ation "e9eip t 6or P,&B-3&0-.43. n #ar97 22& ,JJ4& PCIC& as su8ro1ee&
=led wit7 t7e "TC o6#anila& 'ran97 4& a Complaint 6or Dama1e s
a1ainst t7e !nnown owner o6 t7e vessel #$
National *onor&H NSCP and ICTSI& as de6endants. PCIC alle1ed t7at t7e loss was due to t7e 6ault and ne1li1en9e o6 t7e de6endants.
"TC K rendered ud1ment 6or PCIC and ordered t7e 9omplaint dismissed.
U
T7e loss was due to t7e internal de6e9t and weaness o6 t7e materials used in t7e6a8ri9ation o6 t7e 9rates. T7e middle wooden 8atten 7ad a 7ole ( 8uon1K8uon1 ).
CA O
aMrmed in toto t7e "TC@s de9ision
U
T7e loss o6 t7e s7ipment was due to an e;9epted 9ause O
Wt 57e 97ara9ter o6 t7e 1oods or de6e9ts in t7e pa9in1 or in t7e 9ontainersH and t7e 6ailure o6 t7e s7ipper to indi9ate si1ns to noti6 t7e stevedores t7at e;tra 9are s7ould 8e emploed in 7andlin1 t7e s7ipment.
(&&U)'
?N respondents s7ould 8e 7eld lia8le 6or t7e dama1e o6 t7e 1oods.
*)L+' N. Common 9arriers& 6rom t7e nature o6 t7eir 8usiness and 6or reasons o6 pu8li9 poli9& are mandatedto o8serve e;traordinar dili1en9e in t7e vi1ilan9e over t7e 1oods and 6or t7e sa6et o6 t7e passen1erstransported 8 t7em& a99ordin1 to all t7e 9ir9umstan9es o6 ea97 9ase.T7e e;traordinar dili1en9e in t7evi1ilan9e over t7e 1oods tendered 6or s7ipment re>uires t7e 9ommon 9arrier to now and to 6ollow t7ere>uired pre9aution 6or avoidin1 dama1e to& or destru9tion o6 t7e 1oods entrusted to it 6or sale& 9arria1e anddeliver. It re>uires 9ommon 9arriers to render servi9e wit7 t7e 1reatest sill and 6oresi17t and to use all reasona8le means to as9ertain t7e nature and 97ara9teristi9 o6 1oods tendered 6or s7ipment& and to e;er9ise due 9are in t7e 7andlin1 and stowa1e& in9ludin1 su97 met7ods as t7eir nature re>uires.H
T7e 9ommon 9arrier@s dut to o8serve t7e re>uisite dili 1en9e in t7e s7ipment o6 1oods lasts 6rom t7e timet7e arti9les are surrendered to or un9onditionall pla9ed in t7e possession o6& and re9eived 8& t7e 9arrier 6ortransportation until delivered to& or until t7e lapse o6 a reasona8le time 6or t7eir a99eptan9e& 8 t7e personentitled to re9eive t7em . ?7en t7e 1oods s7ipped are eit7er lost or arrive in dama1ed 9ondition& apresumption arises a1ainst t7e 9arrier o6 its 6ailure to o8serve t7at dili1en9e& and t7ere need not 8e an e;press=ndin1 o6 ne1li1en9e to 7old it lia8le . To over9ome t7e presumption o6 ne1li1en9e in t7e 9ase o6 loss&destru9tion or deterioration o6 t7e 1oods& t7e 9ommon 9arrier must prove t7at it e;er9ised e;traordinardili1en9e . *owever& under Arti9le ,B- o6 t7e New Civil Code& t7e presumption o6 ne1li1en9e does not appl to ano6 t7e 6ollowin1 9auses:,. lood& storm& eart7>uae& li17tnin1 or ot7er natural disaster or 9alamit2. A9t o6 t7e pu8li9 enem in war& w7et7er international or 9ivil. A9t or omission o6 t7e s7ipper or owner o6 t7e 1oods
7. T#e c#aracter o" t#e goos or e"ects in t#e ac8ing or in t#e containersA 4. rder or a9t o6 9ompetent pu8li9 aut7orit.
De6e9tH is t7e want or a8sen9e o6 somet7in 1 ne9essar 6or 9ompleteness or per6e9tion a la9 or a8sen9eo6 somet7in1 essential to 9ompleteness a de=9ien9 in somet7in1 essential to t7e proper use 6or t7e purpose6or w7i97 a t7in1 is to 8e used . n t7e ot7er 7and& in6erior means o6 poor >ualit& medio9re& or se9ondrate . A t7in1 ma 8e o6 in6erior >ualit 8ut not ne9essaril de6e9tive. In ot7er words& de6e9tivenessH is notsnonmous wit7 in6eriorit.H In t7e present 9ase& t7e trial 9ourt de9lared t7at 8ased on t7e re9ord& t7e loss o6 t7e s7ipment was 9aused8 t7e ne1li1en9e o6 t7e petitioner as t7e s7ipper:T7e 9ase at 8ar 6alls under one o6 t7e e;9eptions mentioned in Arti9le ,B- o6 t7e Civil Code& parti9ularlnum8er (-) t7ereo6& i.e. & t7e 97ara9ter o6 t7e 1oods or de6e9ts in t7e pa9in1 or in t7e 9ontainers. T7e trial9ourt 6ound t7at t7e 8reaa1e o6 t7e 9rate was not due to t7e 6ault or ne1li1en9e o6 ICTSI& 8ut to t7e in7erentde6e9t and weaness o6 t7e materials used in t7e 6a8ri9ation o6 t7e said 9rate.
It appears t7at t7e wooden 8atten used as support 6or t7e Roorin1 was not made o6 1ood materials& w7i979aused t7e middle portion t7ereo6 to 1ive wa w7en it was li6ted. T7e s7ipper also 6ailed to indi9ate si1ns tonoti6 t7e stevedores t7at e;tra 9are s7ould 8e emploed in 7andlin1 t7e s7ipment.T7e petitioner 6ailed to re8ut t7e eviden9e o6 respondent& t7at t7e 9rates were sealed and t7at t7e9ontents t7ereo6 9ould not 8e seen 6rom t7e outside . +425 ?7ile it is true t7at t7e 9rate 9ontained ma97ineriesand spare parts& it 9annot t7ere8 8e 9on9luded t7at t7e respondents new or s7ould 7ave nown t7at t7emiddle wooden 8atten 7ad a 7ole& or t7at it was not stron1 enou17 to 8ear t7e wei17t o6 t7e s7ipment. #NA"C* INS!"ANCE C.& INC vs. C!"T APPEALS and A'ITIX S*IPPING C"P"ATIN G.". No. J2B4. uentl su8ro1ated to t7eir ri17ts& interests and a9tions a1ainst A8oitiF& t7e 9ar1o 9arrier. 'e9ause A8oitiF re6used to 9ompensate #onar97&
it =led two 9omplaints a1ainst A8oitiF w7i97 were 9onsolidated and ointl tried. A8oitiF ree9ted responsi8ilit 6or t7e 9laims on t7e 1round t7at t7e sinin1 o6 its 9ar1o vessel was due to 6or9e maeure or an a9t o6 God. A8oitiF was su8se>uentl de9lared as in de6ault and allowed #onar97 and Ta8a9alera to present eviden9e e;K parte. ISS!E: ?7et7er or not t7e do9trine o6 limited lia8ilit applies in t7e instant 9ase. *ELD: %es. T7e 6ailure o6 A8oitiF to present suM9ient eviden9e to e;9ulpate itsel6 6rom 6ault andor ne1li1en9e in t7e sinin1 o6 its vessel in t7e 6a9e o6 t7e 6ore1oin1 e;pert testimon 9onstrains us to 7old t7at A8oitiF was 9on9urrentl at 6ault andor ne1li1ent wit7 t7e s7ip 9aptain and 9rew o6 t7e #$ P. A8oitiF. +T7is is in a99ordan9e wit7 t7e rule t7at in 9ases involvin1 t7e limited lia8ilit o6 s7ipowners& t7e initial 8urden o6 proo6 o6 ne1li1en9e or unseawort7iness rests on t7e 9laimants. *owever& on9e t7e vessel owner or an part asserts t7e ri17t to limit its lia8ilit& t7e 8urden o6 proo6 as to la9 o6 privit or nowled1e on its part wit7 respe9t to t7e matter o6 ne1li1en9e or unseawort7iness is s7i6ted to it. T7is 8urden& A8oitiF 7ad un6ortunatel 6ailed to dis97ar1e.5 T7at A8oitiF 6ailed to dis97ar1e t7e 8urden o6 provin1 t7at t7e unseawort7iness o6 its vessel was not due to its 6ault andor ne1li1en9e s7ould not 7owever mean t7at t7e limited lia8ilit rule will not 8e applied to t7e present 9ases. T7e pe9uliar 9ir9umstan9es 7ere demand t7at t7ere s7ould 8e no stri9t ad7eren9e to pro9edural rules on eviden9e lest t7e ust 9laims o6 s7ippersinsurers 8e 6rustrated. T7e rule on limited lia8ilit s7ould 8e applied in a99ordan9e wit7 t7e latest rulin1 in A8oitiF S7ippin1 Corporation v. General A99ident ire and Li6e Assuran9e Corporation& Ltd.&5 promul1ated on
!boiti v e (nia G..R. o. 01:6D3 May 5, 5;;: <. Yuisim8in1
a9ts: Te;tile 9ar1o owned 8 General Te;tile was s7ipped to #anila usin1 #$ P. A8oitiF. 'e6ore departin1& t7e vessel was advised t7at it was sa6e to travel to its destination& 8ut w7ile at sea& t7e vessel re9eived a report o6 a tp7oon movin1 wit7in its pat7. It was at t7e ed1e o6 a tp7oon w7en its 7ull leaer. T7e vessel san& 8ut t7e 9aptain and 7is 9rew were saved.
T7e 9aptain =led 7is #arine ProtestH& statin1 t7at t7e weat7er was moderate 8reeFe& small waves& 8e9omin1 lon1er& 6airl 6re>uent w7ite 7orse General Te;tile lod1ed a 9laim wit7 respondent 6or t7e amount o6 its loss. "espondent paid General Te;tile and was su8ro1ated to t7e ri17ts o6 t7e latter. A6ter investi1ation& t7e 9ause was 6ound to 8e t7e vessel@s unsearwort7iness. General =led a 9omplaint wit7 A8oitiF and t7e trial 9ourt 9onse>uentl ruled in 6avor o6 t7e 6ormer. Petitioner elevated t7e 9ase to t7e Court o6 Appeals& w7i97 in turn& aMrmed t7e trial 9ourt@s de9ision. It moved 6or re9onsideration 8ut t7e same was denied. *en9e& t7is petition 6or review
Issue: ?N t7e limited lia8ilit do9trine applies in t7is 9ase
*eld: No
"atio: ?7ere t7e s7ipowner 6ails to over9ome t7e presumption o6 ne1li1en9e& t7e do9trine o6 limited lia8ilit 9annot 8e applied. rom t7e nature o6 t7eir 8usiness and 6or reasons o6 pu8li9 poli9& 9ommon 9arriers are 8ound to o8serve e;traordinar dili1en9e over t7e 1oods t7e transport a99ordin1 to all t7e 9ir9umstan9es o6 ea97 9ase. In t7e event o6 loss& destru9tion or deterioration o6 t7e insured 1oods& 9ommon 9arriers are responsi8le& unless t7e 9an prove t7at t7e loss& destru9tion or deterioration was 8rou17t a8out 8 t7e 9auses spe9i=ed in Arti9le ,B- o6 t7e Civil Code. In all ot7er 9ases& 9ommon 9arriers are presumed to 7ave 8een at 6ault or to 7ave a9ted ne1li1entl& unless t7e prove t7at t7e o8served e;traordinar dili1en9e. #oreover& w7ere t7e vessel is 6ound unseawort7& t7e s7ipowner is also presumed to 8e ne1li1ent sin9e it is tased wit7 t7e maintenan9e o6 its vessel. T7ou17 t7is dut 9an 8e dele1ated& still& t7e s7ipowner must e;er9ise 9lose supervision over its men. In t7e present 9ase& petitioner 7as t7e 8urden o6 s7owin1 t7at it e;er9ised e;traordinar dili1en9e in t7e transport o6 t7e 1oods it 7ad on 8oard in order to invoe t7e limited lia8ilit do9trine. Dierentl put& to limit its lia8ilit to t7e
amount o6 t7e insuran9e pro9eeds& petitioner 7as t7e 8urden o6 provin1 t7at t7e unseawort7iness o6 its vessel was not due to its 6ault or ne1li1en9e. Considerin1 t7e eviden9e presented and t7e 9ir9umstan9es o8tainin1 in t7is 9ase& we =nd t7at petitioner 6ailed to dis97ar1e t7is 8urden. 'ot7 t7e trial and t7e appellate 9ourts& in t7is 9ase& 6ound t7at t7e sinin1 was not due to t7e tp7oon 8ut to its unseawort7iness. Eviden9e on re9ord s7owed t7at t7e weat7er was moderate w7en t7e vessel san. T7ese 6a9tual =ndin1s o6 t7e Court o6 Appeals& aMrmin1 t7ose o6 t7e trial 9ourt are not to 8e distur8ed on appeal& 8ut must 8e a99orded 1reat wei17t. T7ese =ndin1s are 9on9lusive not onl on t7e parties 8ut on t7is Court as well. A'ITIX S*IPPING C"P"ATIN vs. NE? INDIA ASS!"ANCE C#PAN%& LTD G..". No. ,40JB/ #a 2& 2330 ACTS: So9iete ran9aise Des Colloides loaded a 9ar1o o6 te;tiles and au;iliar 97emi9als 6rom ran9e on 8oard a vessel owned 8 ran9oK'el1ian Servi9es& In9. T7e 9ar1o was 9onsi1ned to General Te;tile& In9.& in #anila and insured 8 respondent New India Assuran9e Compan& Ltd. ?7ile in *on1 on1& t7e 9ar1o was trans6erred to #$ P. A8oitiF 6or transs7ipment to #anila. 'e6ore departin1& t7e vessel was advised 8 t7e
In t7e present 9ase& petitioner 7as t7e 8urden o6 s7owin1 t7at it e;er9ised e;traordinar dili1en9e in t7e transport o6 t7e 1oods it 7ad on 8oard in order to invoe t7e limited lia8ilit do9trine. Dierentl put& to limit its lia8ilit to t7e amount o6 t7e insuran9e pro9eeds& petitioner 7as t7e 8urden o6 provin1 t7at t7e unseawort7iness o6 its vessel was not due to its 6ault or ne1li1en9e. Considerin1 t7e eviden9e presented and t7e 9ir9umstan9es o8tainin1 in t7is 9ase& we =nd t7at petitioner 6ailed to dis97ar1e t7is 8urden. It initiall attri8uted t7e sinin1 to t7e tp7oon and relied on t7e '#I =ndin1s t7at it was not at 6ault. *owever& 8ot7 t7e trial and t7e appellate 9ourts& in t7is 9ase& 6ound t7at t7e sinin1 was not due to t7e tp7oon 8ut to its unseawort7iness. Eviden9e on re9ord s7owed t7at t7e weat7er was moderate w7en t7e vessel san. T7ese 6a9tual =ndin1s o6 t7e Court o6 Appeals& aMrmin1 t7ose o6 t7e trial 9ourt are not to 8e distur8ed on appeal& 8ut must 8e a99orded 1reat wei17t. T7ese =ndin1s are 9on9lusive not onl on t7e parties 8ut on t7is Court as well.
P*ILCNSA $S. GI#ENEX
F!CT& "A No. /0& An A9t Amendin1 Su8se9tion Z& Se9tion ,2 o6 Commonwealt7 A9t Num8ered ,/0. As Amended 8 "epu8li9 A9t Num8ered 3J0H& allows a Senator or a mem8er o6 t7e *ouse o6 "epresentatives and an ele9tive oM9er o6 eit7er *ouse o6 Con1ress to retire re1ardless o6 a1e and w7ose servi9e must 8e at least ,2 ears. P7ilippine Constitution Asso9iation& In9. & a nonKpro=t 9ivi9 or1aniFation dul in9orporated under P7ilippine laws instituted t7is petition 97allen1in1 t7e 9onstitutionalit o6 t7e law in >uestion.
(&&U) ?7et7er or not t7e little o6 "A No. /0 is 1ermane to t7e su8e9t matter e;pressed in t7e a9t.
*)L+ No. It is to 8e o8served t7at under "A No. /0& amendin1 t7e =rst para1rap7 o6 se9tion ,2& su8se9tion 9 o6 CA No. ,/0& retirement 8ene=ts are 1ranted to mem8ers o6 GSIS. T7is para1rap7 is related and 1ermane to t7e su8e9t o6 CA No. ,/0. T7e su99eedin1 para1rap7 o6 "A. No /0 re6ers to mem8ers o6 Con1ress and ele9tive in an manner to t7e su8e9t o6 CA. No. ,/0 esta8lis7in1 t7e GSIS and w7i97 provides 8ot7 retirement and issuan9e 8ene=ts to its mem8ers. T7e 9onstitutionalit re>uirement wit7 respe9t to titles o6 statutes as suM9ient to reRe9t t7eir 9ontents is not met 8 t7e title o6 said "A. No. /0& t7us & void.
P*(LCO&! v. P)+RO M. G(M))E G.R. o. L5225: +ece4ber 03, 06:1 Facts' P7ilippine Constitution Asso9iation& In9 (P*ILCNSA) assails t7e validit o6 "A /0 inso6ar as t7e same allows retirement 1ratuit and 9ommutation o6 va9ation and si9 leave to Senators and "epresentatives& and to t7e ele9tive oM9ials o6 8ot7 *ouses (o6 Con1ress). T7e provision on retirement 1ratuit is an attempt to 9ir9umvent t7e Constitutional 8an on in9rease o6 salaries o6 t7e mem8ers o6 Con1ress durin1 t7eir term o6 oM9e& 9ontrar to t7e provisions o6 Arti9le $I& Se9tion ,- o6 t7e Constitution. T7e same provision 9onstitutes sel=s7 9lass le1islationH 8e9ause it allows mem8ers and oM9ers o6 Con1ress to retire a6ter twelve (,2) ears o6 servi9e and 1ives t7em a 1ratuit e>uivalent to one ear salar 6or ever 6our ears o6 servi9e& w7i97 is not re6unda8le in 9ase o6 reinstatement or re ele9tion o6 t7e retiree& w7ile all ot7er oM9ers and emploees o6 t7e 1overnment 9an retire onl a6ter at least twent (23) ears o6 servi9e and are 1iven a 1ratuit w7i97 is onl e>uivalent to one mont7 salar 6or ever ear o6 servi9e& w7i97& in an 9ase& 9annot e;9eed 2- mont7s. T7e provision on va9ation and si9 leave& 9ommuta8le at t7e 7i17est rate re9eived& inso6ar as mem8ers o6 Con1ress are 9on9erned& is anot7er attempt o6 t7e le1islator to 6urt7er in9rease t7eir 9ompensation in violation o6 t7e Constitution. T7e Soli9itor General 9ounterKar1ued alle1in1 t7at t7e 1rant o6 retirement or pension 8ene=ts under "epu8li9 A9t No. /0 to t7e oM9ers o8e9ted to 8 t7e petitioner does not 9onstitute 6or8idden 9ompensationH wit7in t7e meanin1 o6 Se9tion ,- o6 Arti9le $I o6 t7e P7ilippine Constitution. T7e law in >uestion does not 9onstitute 9lass le1islation. T7e pament o6 9ommuta8le va9ation and si9 leave 8ene=ts under t7e said A9t is merel in t7e nature o6 a 8asis 6or 9omputin1 t7e 1ratuit due ea97 retirin1 mem8erH and& t7ere6ore& is not an indire9t s97eme to in9rease t7eir salar.
(ssue' w7et7er "epu8li9 A9t /0 violates Se9tion ,-& Arti9le $I& o6 t7e Constitution w7i97 reads as 6ollows: T7e senators and t7e #em8ers o6 t7e *ouse o6 "epresentatives s7all& unless ot7erwise provided 8 law& re9eive an annual 9ompensation o6 seven t7ousand two 7undred pesos ea97& in9ludin1 per diems and ot7er emoluments or allowan9es& and e;9lusive onl o6 travellin1 e;penses to and 6rom t7eir respe9tive distri9ts in t7e 9ase o6 #em8ers o6 t7e *ouse o6 "epresentative and to and 6rom t7eir pla9es o6 residen9e in t7e 9ase o6 Senators& w7en attendin1 sessions o6 t7e Con1ress. No in9rease in said 9ompensation s7all tae ee9t until a6ter t7e e;piration o6 t7e 6ull term o6 all t7e #em8ers o6 t7e Senate and o6 t7e *ouse o6 "epresentatives approvin1 su97 in9rease. !ntil ot7erwise provided 8 law& t7e President o6 t7e
Senate and t7e Speaer o6 t7e *ouse o6 "epresentatives s7all ea97 re9eive an annual 9ompensation o6 si;teen t7ousand pesos.
*el' %es. ?7en t7e Constitutional Convention =rst determined t7e 9ompensation 6or t7e #em8ers o6 Con1ress& t7e amount =;ed 8 it was onl P4&333.33 per annum 8ut it em8odies a spe9ial proviso w7i97 reads as 6ollows: No in9rease in said 9ompensation s7all tae ee9t until a6ter t7e e;piration o6 t7e 6ull term o6 all t7e mem8ers o6 t7e National Assem8l ele9ted su8se>uent to approval o6 su97 in9rease.H In ot7er words& under t7e ori1inal 9onstitutional provision re1ardin1 t7e power o6 t7e National Assem8l to in9rease t7e salaries o6 its mem8ers& no in9rease would tae ee9t until a6ter t7e e;piration o6 t7e 6ull term o6 t7e mem8ers o6 t7e Assem8l ele9ted su8se>uent to t7e approval o6 su97 in9rease. T7e Constitutional provision in t7e a6orementioned Se9tion ,-& Arti9le $I& in9ludes in t7e term 9ompensation ot7er emolumentsH. T7is is t7e pivotal point on t7is 6undamental >uestion as to w7et7er t7e retirement 8ene=t as provided 6or in "epu8li9 A9t /0 6all wit7in t7e purview o6 t7e term ot7er emoluments.H
)4olu4ent is de=ned as t7e pro=t arisin1 6rom oM9e or emploment t7at w7i97 is re9eived as 9ompensation 6or servi9es or w7i97 is anne;ed to t7e possession o6 an oM9e& as salar& 6ees and per>uisites. It is evident t7at retirement 8ene=t is a 6orm or anot7er spe9ies o6 emolument& 8e9ause it is a part o6 9ompensation 6or servi9es o6 one possessin1 an oM9e. "epu8li9 A9t /0 provides 6or an in9rease in t7e emoluments o6 Senators and #em8ers o6 t7e *ouse o6 "epresentatives& to tae ee9t upon t7e approval o6 said A9t& w7i97 was on
o6 servi9e and 1ives t7em a 1ratuit e>uivalent to one ear salar 6or ever 6our ears o6 servi9e& w7i97 is not re6unda8le in 9ase o6 reinstatement or reKele9tion o6 t7e retiree& w7ile all ot7er oM9ers and emploees o6 t7e 1overnment 9an retire onl a6ter at least twent (23) ears o6 servi9e and are 1iven a 1ratuit w7i97 is onl e>uivalent to one mont7 salar 6or ever ear o6 servi9e& w7i97& in an 9ase& 9annot e;9eed 2- mont7s. T7e provision on va9ation and si9 leave& 9ommuta8le at t7e 7i17est rate re9eived& inso6ar as mem8ers o6 Con1ress are 9on9erned& is anot7er attempt o6 t7e le1islator to 6urt7er in9rease t7eir 9ompensation in violation o6 t7e Constitution. T7e Soli9itor General& ar1uin1 6or Con1ress& averred t7at t7e 1rant o6 retirement or pension 8ene=ts under "epu8li9 A9t No. /0 to t7e oM9ers does not 9onstitute 6or8idden 9ompensationH wit7in t7e meanin1 o6 Se9tion ,- o6 Arti9le $I o6 t7e P7ilippine Constitution. T7e law in >uestion does not 9onstitute 9lass le1islation. T7e pament o6 9ommuta8le va9ation and si9 leave 8ene=ts under t7e said A9t is merel in t7e nature o6 a 8asis 6or 9omputin1 t7e 1ratuit due ea97 retirin1 mem8erH and& t7ere6ore& is not an indire9t s97eme to in9rease t7eir salar.
(&&U)' ?7et7er or not "A /0 is 9onstitutional. *)L+' No& t7e said law is un9onstitutional. Se9tion ,-& Arti9le $I& o6 t7e Constitution& provides: The senators and the Members of the House of Representatives shall, unless otherwise provided by law, receive an annual compensation of seven thousand two hundred pesos each, including per diems and other emoluments or allowances, and exclusive only of travelling expenses to and from their respective district in the case of Members of the House of Representatives and to and from their places of residence in the case of enators, when attending sessions of the !ongress. "o increase in said compensation shall ta#e e$ect until after the expiration of the full term of all the Members of the enate and of the House of Representatives approving such increase. %ntil otherwise provided by law, the &resident of the enate and the pea#er of the House of Representatives shall each receive an annual compensation of sixteen thousand pesos. ?7en t7e Constitutional Convention =rst determined t7e 9ompensation 6or t7e #em8ers o6 Con1ress& t7e amount =;ed 8 it was onl P4&333.33 per annum 8ut it em8odies a spe9ial proviso w7i97 reads as 6ollows: "o increase in said compensation shall ta#e e$ect until after the expiration of the full term of all the members of the "ational 'ssembly elected subse(uent to approval of such increase. In ot7er words& under t7e ori1inal 9onstitutional provision re1ardin1 t7e power o6 t7e National Assem8l to in9rease t7e salaries o6 its mem8ers& no in9rease would
