Under Philippine law, mercantile and taxation laws governing transportation are principally governed by the Civil Code, the Public Service Act, the Revised Penal Code, as well as special laws and regulations. Below is a comprehensive breakdown of key principles, statutes, and relevant provisions under the Civil Code and related laws, which pertain to transportation, as well as relevant jurisprudence that solidifies the application and interpretation of these laws.

1. Nature of Transportation Contracts

Contract of Carriage: Under the Civil Code, the contract of carriage is an agreement whereby a carrier (e.g., a transportation company or individual operator) undertakes to transport passengers or goods from one place to another, for a fee. Carriers are classified as common or private carriers.
Common Carriers: Defined in Article 1732 of the Civil Code, common carriers are entities engaged in the business of transporting goods or passengers for compensation, offering their services to the general public. This includes not only land carriers but also sea and air carriers.
Private Carriers: Unlike common carriers, private carriers transport goods or passengers for specific contracts and are not open to the public for hire. Private carriers are not bound by the same strict obligations as common carriers under Philippine law.

2. Obligations and Liabilities of Common Carriers

Extraordinary Diligence: Article 1733 of the Civil Code mandates that common carriers exercise extraordinary diligence in ensuring the safety of passengers and goods. The level of care imposed on common carriers is much higher than that on private carriers or other parties.
Presumption of Negligence: Article 1735 states that if goods are lost, destroyed, or deteriorated, the common carrier is presumed to have acted negligently. This presumption of negligence shifts the burden of proof to the carrier, requiring them to demonstrate that they exercised extraordinary diligence.
Limited Defenses for Common Carriers: Article 1734 lists only a few specific defenses available to common carriers to avoid liability:
- Natural disaster or calamity.
- Acts of public enemies in war.
- Acts of the shipper, owner, or consignee of the goods.
- Character of the goods themselves (inherent defect).
- Order or act of competent authority.
Contractual Limitation of Liability: Article 1744 allows common carriers to limit their liability for loss or damage, but not for willful misconduct or gross negligence. Such limitations, however, must be clearly stipulated and accepted by the parties.

3. Special Provisions on Passenger Transport

Carrier’s Liability for Passenger Safety: Article 1755 obliges carriers to exercise extraordinary diligence to safely transport passengers as far as human care and foresight can provide.
Death or Injuries: Under Articles 1756 and 1757, common carriers are liable for the death or injury of passengers due to negligence. However, they may be exonerated if they can prove that they exercised extraordinary diligence.
Prescription of Actions: Article 1758 specifies that actions to recover damages due to injury or death must be filed within a certain period. Jurisprudence has clarified that this prescriptive period varies depending on the nature of the case (contractual breach versus tort).
Prohibition Against Waivers of Liability: Article 1760 prohibits common carriers from contracting out their liability for injuries or death resulting from negligence.

4. Carriage of Goods

Obligation to Deliver: Articles 1736 to 1740 establish that the carrier's responsibility for the goods begins from the moment they receive the goods and continues until the goods are delivered to the consignee. The Civil Code imposes responsibility for any loss, destruction, or deterioration unless the carrier can prove that one of the listed defenses applies.
Loss of Goods: The carrier must replace or reimburse the loss or damage if unable to prove they exercised extraordinary diligence. Under Article 1734, carriers are liable for losses even if these arise from slight negligence.
Limitation on Damages: Carriers may limit liability for goods damaged, but only within legal limits, and provided these limits are reasonable and agreed upon with the shipper.

5. Prescriptive Periods for Filing Claims

Under Article 1753, the Civil Code sets prescriptive periods for claims regarding carriage contracts. Generally, the timeframe for filing claims varies, depending on whether the action is for breach of contract or for a tort (e.g., negligence).
One Year for Goods: Typically, actions for the loss or damage to goods must be filed within one year from the day of delivery or the day when delivery should have been made (subject to statutory modifications).

6. Taxation on Transportation Businesses

Franchise Tax: Public utilities, including transport companies with franchises, are subject to the franchise tax under the National Internal Revenue Code (NIRC). This tax is typically computed based on gross receipts from operations.
Value-Added Tax (VAT): Transportation services provided within the Philippines are generally subject to VAT, especially those offered by common carriers for goods. There are exemptions, however, for certain passenger services, such as domestic air and sea travel within the Philippines.
Documentary Stamp Tax: Certain documents, including bills of lading and receipts, may be subject to documentary stamp tax, imposed by the NIRC, depending on the nature of the transportation service and the amount involved.
Local Taxes and Fees: Transportation businesses must also comply with local government tax ordinances, which may include additional taxes, fees, and charges for operating within a specific locality.

7. Jurisdiction and Governing Agencies

Department of Transportation (DOTr): Responsible for overseeing land, sea, and air transportation, implementing policies for safety, and regulating transportation rates and practices.
Land Transportation Franchising and Regulatory Board (LTFRB): Specifically regulates land-based common carriers, such as buses, jeepneys, and taxis, by issuing franchises and implementing public service and fare regulation.
Maritime Industry Authority (MARINA): Oversees the maritime industry and regulates water transport, including the issuance of licenses, certificates, and standards for domestic and international maritime operations.
Civil Aeronautics Board (CAB): Regulates air carriers and enforces standards for the aviation industry, including pricing and scheduling, to protect public interest.
Insurance Commission: Ensures that transportation companies comply with mandatory insurance requirements, particularly third-party liability insurance for the protection of passengers and the public.

8. Insurance Requirements for Transportation

Compulsory Third-Party Liability (CTPL): Under Republic Act No. 10607, commonly known as the Insurance Code of the Philippines, all motor vehicles operating in the country must have CTPL insurance for bodily injuries or death of passengers or third parties.
Marine and Aviation Insurance: Cargo transported via sea or air is often insured under marine and aviation policies, governed by the Insurance Code. The terms and claims for these policies adhere to the provisions of both the Civil Code and the Insurance Code.

9. Relevant Jurisprudence

Negligence and Extraordinary Diligence: Numerous Supreme Court decisions emphasize the requirement of extraordinary diligence for common carriers, making it clear that even slight negligence resulting in harm to passengers or damage to goods results in liability for the carrier.
Application of Limited Liability Rule: Jurisprudence also clarifies the rule on limited liability, particularly in cases where loss is caused by fortuitous events or the inherent defect of the goods, which exempts carriers from liability.
Contracts vs. Torts: The Supreme Court has distinguished between cases that arise from contractual breach (e.g., carrier fails to deliver goods) versus torts (e.g., negligence causing harm to passengers), influencing the applicable prescriptive periods and legal remedies available to affected parties.

Conclusion

The Civil Code, supplemented by special laws and various administrative regulations, imposes rigorous standards on carriers, particularly common carriers, to ensure the safety and protection of passengers and goods. Tax obligations for transportation entities are stringent, requiring compliance with national and local taxation laws. The overarching theme in Philippine transportation law is the imposition of a high duty of care and accountability on carriers, emphasizing protection for the public and the promotion of safe, reliable, and efficient transportation services in the Philippines.