CHAPTER 1 - REVIEW OF THE PHILIPPINE commerce by sea, involving regulation of ships

CONSTITUTION AND BUSINESS LAWS and harbors and the status of seamen.

Ignorantia juris non excusat: (c) Mercantile Law - the law of commercial
“Ignorance of the law excuses no one. transactions derived from the law of merchant
Without law, our world would be very which includes, commercial paper, insurance,
unstable with anarchy in our streets and and other types of agency.
peace would be difficult to achieve.”
Concept of Tourism Law
Means: Everyone should know the law and Tourism is defined as the custom or practice of
cannot claim that they don’t as a defense for a traveling for pleasure, as well as the promotion
criminal or non-compliance act. Without laws, by the establishment of countries to attract
peace is impossible. tourists.

Case: The Robinson family stayed at Coral The World Tourism Organization defines
Resort, where their 6-year-old daughter, Patty, tourism as the activities of persons traveling to
drowned in the swimming pool. The pool had no and staying in places outside their usual
lifeguard on duty, and she was found dead after environment for not more than one consecutive
being missing for two hours. year for leisure, business, and other purposes.

Legal Opinion: The resort can be held liable if it Tourism law may be defined as a body of rules
failed to ensure guest safety, particularly by not or principles of action which deals with the
providing a lifeguard. Resorts have a duty to regulation, authority, relations, and obedience
maintain a safe environment, including proper among members of a society involved in tourist
supervision of pools. The lack of a lifeguard travel and accommodation.
suggests negligence. Hotel guests have the right
to safety and proper emergency response. The Importance and Application of Tourism Law
Department of Tourism (DOT) and the local - Tourism law is essential as tourism businesses
government are responsible for enforcing safety now cover various sectors like food service,
regulations in resorts to prevent such incidents. hotels, transportation, and medical tourism.
Government agencies impose regulations to
ensure tourism development and protect
Kinds of Law
national interests.
As to purpose:
(1) Substantive Law - a law that creates,
Sources of Law Relevant to the Tourism
defines, and regulates rights, or which regulates
Industry
the rights and duties which give rise to a cause
(1) The Philippine Constitution - It is the
of action.
fundamental law of the land, to which all other
(2) Adjective Law - a law that provides the
laws must conform.
method of aiding and protecting certain rights.
(2) Statutes or legislative enactments - It is
the written will of the legislative department
As to scope:
rendered authentic by certain prescribed forms
(1) General or Public Law - a law that applies
and solemnities, prescribing rules of action, or
to all the people of a state or to all of a particular
civil conduct with respect to persons, things, or
class of persons in a state, with equal force and
both.
obligation. Examples are:
(3) Administrative or executive orders,
(a) Criminal Law - a law dealing with crimes
regulations, and rulings - These are issued by
and their punishment, as well as the procedure
administrative officials under legislative authority.
for that purpose.
(4) Judicial decisions or jurisprudence -
(b) International Law - a body of rules or
These refer to the decisions of the Supreme
principles of action governing the relations
Court in interpreting the laws of the Constitution.
between States.
(5) Custom - It is a rule of conduct which in a
(c) Political Law - law regulating the relations
given place among given groups of people, has
sustained by the inhabitants of a territory to the
been followed for an appreciable time.
sovereign.
(6) Other sources - These refer to decisions of
foreign tribunals and opinions of textbook
(2) Special or Private Law - a law which relates
writers.
to particular persons or things of a class.
Examples are:
The Right to Travel - Freedom of movement is
(a) Civil Law - the mass of precepts which
the very essence of our free society. Once the
determines and regulates those relations of
right to travel is curtailed, all other rights suffer.
assistance, authority, and obedience existing
among members of a family and those which
exist among members of a society for the
protection of private interests.​
(b) Maritime Law - the law dealing with
The Philippine Constitution safety or order requires otherwise as prescribed
- original and fundamental principles of law by by law.
which a system of government is created and (2) Any evidence obtained in violation of this or
according to which a country is governed. It is the preceding section shall be inadmissible for
the fundamental law of the land, to which all any.
other laws must conform. - The forms of correspondence and
communication that are covered in the provision
The Bill of Rights relation include letters, telegrams, telephone calls,
messages, and the like.
Section 1. No person shall be deprived of life,
liberty and property without due process of law, Anti-Wiretapping Law (RA 4200)
nor shall any person be denied the equal provides penalties for specific violations of the
protection of the laws. privacy of communication.

Discussion of the Law Under Section 3 of the Act, the court will
Life - a person may not be deprived without due authorize wiretaps in certain crimes, such as
process, means more than animal existence. treason, espionage, provoking war and
Liberty - according to Justice Malcolm, it means disloyalty in case of war, piracy, mutiny in the
a measure of freedom which may be enjoyed in high seas, rebellion, conspiracy and proposal to
a civilized community consistently with the commit rebellion.
peaceful enjoyment of life and freedom of
others. Any evidence obtained in violation of the above
Property - is defined as "anything which is or shall be considered "fruit from the poisonous
may be the object of appropriation." tree" and shall not be admitted as evidence in
Equal protection of the law - means that any administrative or criminal proceeding.
persons similarity situated should be similarly
treated. Case: The National Bureau of Investigation
Due process of law - is a law which hears (NBI) conducted an entrapment operation
before condemns; which proceeds upon inquiry, against high-profile drug dealers using hotel
and renders judgment after trial. suites as meeting places. With the hotel’s
cooperation, wiretapping devices were installed,
The essential requirements of procedural and NBI agents conducted surveillance from an
due process in courts are as follows: adjacent suite.
(1) There must be a court or tribunal clothed with Legal Opinion: The operation was illegal under
judicial power to hear and determine the matter R.A. No. 4200, as wiretapping is prohibited
before it; unless specifically authorized by law. Since
(2) Jurisdiction must be lawfully acquired over drug-related offenses are not among those that
the person of the defendant or over the property permit wiretaps, any evidence obtained through
which is the subject of the proceedings; such means is inadmissible in court.
(3) The defendant must be given an opportunity
to be heard; and Section 4. No law shall be passed, abridging
(4) Judgment must be rendered upon lawful the freedom of speech, of expression, or of the
hearing. press, or the right of the people peaceably to
assemble and petition the Government for
Case: Congressman Peter Genuino, a Filipino redress of grievances.
citizen, was accused of tax evasion and
drug-related crimes in the United States. The Obscenity is defined as it includes materials
U.S. government requested his extradition, but which, taken as a whole, appeals to the prurient
he demanded access to his extradition papers interest and lacks serious literary, artistic,
before the formal filing, which the Philippine political, or scientific value. Matter so classified
government, with U.S. concurrence, denied. is not protected under the "free speech"
guarantee of the Constitution.​
​
Legal Opinion: Congressman Genuino is not Case: A pictorial featuring young women in
deprived of due process because P.D. No. 1069 skimpy bikinis, with occasional topless poses
states that an extraditee is only entitled to covered only by their arms, took place at Fort
extradition papers after the petition is filed in Santiago, a historic park in Manila. As the
court. The law does not grant the right to notice growing crowd became uneasy, a Manila
and hearing during the evaluation stage, as councilor intervened, citing a city ordinance and
doing so could allow the suspect to flee before legal violations.
the process is completed. Legal Opinion: The Manila councilor had the
right to stop the pictorial under a city ordinance
Section 3. (1) The privacy of communication prohibiting lewd acts offensive to public morals.
and correspondence shall be inviolable except The State, through its police power, can regulate
upon lawful order of the court, or when public
activities that threaten public decency and
welfare. The term patrimony pertains to heritage.

Section 6. The liberty of abode and of changing The term "qualified Filipinos" simply means
the same within the limits prescribed by law shall that preference shall be given to those citizens
not be impaired except upon lawful order of the who can make a viable contribution to the
court. Neither shall the right to travel be impaired common good, because of credible competence
except in the interest of national security, public and efficiency.
safety, or public health, as may be provided by
law. Case: During a bid for the purchase of majority
shares in Manila Hotel, a Malaysian corporation
Case: Mr. Bondoc, president of ABC Securities, submitted the highest bid. However, instead of
Inc., was charged with estafa and later released awarding the sale to the Malaysian corporation,
on bail. While his company was placed under it was granted to a Filipino corporation.
receivership, he requested court permission to Legal Opinion: The awarding of the sale to the
travel to the U.S. for business matters. Filipino corporation is valid. Article XII, Section
Legal Opinion: The court may deny Mr. 10 of the 1987 Constitution gives preference to
Bondoc’s request, as a person out on bail can qualified Filipinos in the granting of privileges
be restricted from leaving the country. A bail involving national patrimony, ensuring that key
bond serves to ensure the accused remains assets remain under Filipino ownership.
under the court’s jurisdiction and appears when
required, making travel restrictions a valid ●​ The Manila Hotel has become a
condition. landmark-a living testimonial of
Philippine heritage.
Section 8. The right of the people, including
those employed in the public and private Section 11 mandates that public utility
sectors, to form unions, associations or societies franchises in the Philippines can only be granted
for purposes not contrary to law shall not be to Filipino citizens or corporations with at least
abridged 60% Filipino ownership. These franchises are
non-exclusive, lasting no more than 50 years
Case: Junie Bustillos, a room attendant at a and subject to amendment or repeal by
Quezon City hotel, worked for five years and Congress. Foreign investor participation in
noticed cases of abuse by management. After management is limited to their capital share,
taking the initiative to form a union, hotel with executive and managing positions reserved
management dismissed him under serious for Filipinos. The state encourages public equity
charges. participation.
Legal Opinion: The hotel management violated
the Labor Code of the Philippines and the 1987 Case: On November 24, 1994, Grand Air
Constitution, as terminating an employee for applied for a Certificate of Public Convenience
forming a union constitutes unfair labor practice and Necessity (CPCN) with the Civil Aeronautics
and union-busting. In Lopez Sugar Corporation Board (CAB) and was granted a temporary
v. Franco, G.R. No. 148195, May 16, 2005, the operating permit for scheduled domestic air
Supreme Court ruled against a company that transportation. Philippine Airlines (PAL)
terminated employees to weaken union questioned CAB’s authority to issue the permit,
leadership, reinforcing that such actions are arguing that Grand Air lacked a legislative
illegal. franchise required under Section 11, Article XII
of the 1987 Constitution.
National Economy and Patrimony
Legal Opinion: Yes, CAB has the authority to
Section 10. The Congress shall, upon issue a temporary operating permit. Under R.A.
recommendation of the economic and planning No. 776, CAB is empowered to grant a
agency, when the national interest dictates, Temporary Operating Permit or CPCN, even
reserve to citizens of the Philippines or to before an applicant has secured a legislative
corporations or associations at least sixty per franchise, as long as the final issuance of the
centum of whose capital is owned by such CPCN considers the franchise requirement.
citizens, or such higher percentage as Congress
may prescribe, certain areas of investments. Section 14. The sustained development of a
reservoir of national talents consisting of Filipino
In the grant of rights, privileges and concessions scientists, entrepreneurs, professionals,
covering national economy and patrimony, the managers, high-level technical manpower and
State shall give preference to qualified Filipinos. skilled workers and craftsmen in all fields shall
The State shall regulate and exercise authority be promoted by the State. The State shall
over foreign investments within its national encourage appropriate technology and regulate
jurisdiction and in accordance with its national its transfer for the national benefit. The practice
goals and priorities. of all professions in the Philippines shall be
limited to Filipino citizens, save in cases ●​ He must take care of it properly before
prescribed by law. delivery.
●​ He must include all necessary
Case: John Tan is seeking a chief executive accessories.
officer to manage his five-star hotel in Roxas ●​ If he fails, he must pay for damages.
Boulevard and a legal counsel to handle legal
matters for his hotel business. Obligation to Do (Example: Performing a
Legal Opinion: Mr. Tan must hire a Filipino Service)
citizen as legal counsel, as the practice of law in ●​ If the debtor does not do the job,
the Philippines is restricted to Filipino nationals. someone else will do it at his cost.
However, for the chief executive officer position, ●​ If the job is done incorrectly, it must be
while preference should be given to Filipinos, a redone at his expense.
foreigner may be hired if no qualified Filipino is ●​ If the work is poor quality, it must be
available, provided the foreign candidate fixed at his expense.
secures a work visa from the Bureau of
Immigration and a work permit from the Example of Obligation to Do: A carpenter is
Department of Labor and Employment (DOLE). hired to build a door. If he builds it incorrectly, he
must fix it or pay for a new one.
Importance of Ethics
Doing good business being ethical, being ●​ Obligations ensure that agreements are
transparent, being caring, implementing values honored, and the law provides ways to
in your business makes a difference, and you enforce them.
make money at the same time.
Fraud
OBLIGATIONS AND CONTRACTS
The fraud is incidental fraud (dolo incidente)
which is a fraud incident to the performance of
Obligations
an obligation. In fraud, there is an intent to
Article 1156. An obligation is a juridical
evade the normal fulfillment of the obligation and
necessity to give, to do or not to do.
to cause damage.
Understanding Obligations in Simple Terms
Negligence
An obligation is a legal responsibility where one
culpa contractual, the lack of diligence, or
person must do something for another. Every
carelessness. Negligence consists in the
obligation has four important parts:
omission of that diligence which is required by
Creditor (Active Subject) – The person who the nature of the obligation
has the right to ask for something.
Delay (Mora)
Debtor (Passive Subject) – The person who
A debtor is responsible for a delay in payment or
must fulfill the obligation.
fulfilling an obligation only if the creditor asks for
Prestation (Object) – What must be given, it first, unless the law or contract says a request
done, or not done. isn’t needed, time is very important, or asking
would be pointless.
Legal Tie (Vinculum) – The reason why the
obligation exists, which comes from a law or a Contravention of the tenor of the obligation
contract.
Violation of agreed terms, if someone doesn’t
Example: Anna (creditor) lends P5,000 to Ben follow the agreement, they must pay for the
(debtor). Ben promises to pay her back in one damage.
month. Here:
NOTE: passengers do not contract merely for
●​ Anna can demand payment (Active
transportation. They have to be treated by the
Subject).
carrier's employees with kindness, respect,
●​ Ben must pay Anna (Passive Subject).
courtesy, and due consideration. They are
●​ P5,000 is what must be given
entitled to be protected against personal
(Prestation).
misconduct, injurious language, indignities, and
Their agreement creates a legal tie (Vinculum).
abuses from such employees
Types of Obligations:
Article 1157. Obligations arise from:
Obligation to Give (Example: Paying Money or
Law, contracts, quasi-contracts, acts or
Delivering an Item)
omissions punishable by law, quasi-delicts
●​ The debtor must deliver the agreed
item.
Contract Contracts:

meeting of the minds between two persons Article 1305. A contract is a meeting of minds
whereby one binds himself, will respect the between two persons whereby one binds
other, to give something or to render some himself, with respect to the other; to give
service. something or to render some service.

Quasi-contract

lawful, and voluntary and unilateral act based on Essential Elements of a Contract:
the maxim that no one shall unjustly enrich
himself at the expense of another 1.​ Consent – Agreement between parties
through offer and acceptance.
2 COMMON FORMS OF QUASI-CONTRACT 2.​ Object – The subject matter of the
contract must be certain.
1.​ SOLUTIO INDEBITI (payment by 3.​ Cause – The reason or obligation
mistake) established by the contract.
2.​ NEGOTIORUM GESTIO (unauthorized
business management) A contract of adhesion is defined as one in
which almost all the provisions have been
Quasi-delict drafted only by one party, usually a corporation
or insurance company.
Also called CULPA AQUILIANA, any act which
causes damage to another, there are being fault Characteristics of a Contract:
or negligence, no pre-existing contractual
relation between the parties 1.​ Mutuality – A contract’s validity and
performance cannot depend on just one
Pure obligation party’s will.
2.​ Autonomy – Parties can freely agree on
one which is not subject to any condition and no terms as long as they do not violae law,
specific date is mentioned for its fulfillment and morals, or public policy.
is, therefore, immediately demandable. 3.​ Relativity – Contracts bind only the
parties and their successors, except
Conditional obligation when there is a stipulation for a third
party (stipulation pour autrui), like in an
one which consequences are subject in one way insurance beneficiary.
or another to the fulfillment of a condition 4.​ Consensuality – Contracts are
perfected by mere consent, except for
Obligation with a period
real contracts (e.g., pledge, mortgage)
and those requiring a specific form
one which consequences are subject in one way
under the Statute of Frauds.
or another to the expiration of the said period or
5.​ Obligatory Force – Contracts have the
term
force of law between parties,
Joint obligations enforceable through legal action.

Shared responsibility without full individual Under Article 1170 of the New Civil Code,
liability. those who, in the performance of their
obligations are guilty of negligence, are
Solidary obligations liable for damages. As to who shall bear the
burden of paying damages.
Each debtor is fully liable, and each creditor can
demand full payment. Article 2180, paragraph (4) of the same
Code provides the owners and managers of
an establishment or enterprise are likewise
responsible for damages caused by their
Fortuitous event/Force Majeure/Caso Fortuito employees in the service of the branches in
which the latter are employed or on the
Unavoidable and unforeseeable extraordinary occasion of their functions.
events.
Article. 2003. The hotelkeeper cannot free
2 GENERAL CAUSES himself from responsibility by posting notices
to the effect that he is not liable for the
1.​ BY NATURE (earthquake etc) articles brought by the guest. Any stipulation
2.​ BY ACT OF MAN (armed invasion, between the hotelkeeper and the guest
robbery) whereby the responsibility of as set forth in
 Articles 1998 to 2001. is suppressed or 3.​ Obligation of the capitalist partner
diminished shall be void. 4.​ Responsibility between partnership and
partner
Law on Partnership 5.​ Sharing the profit and loss among
partners
Article 1767. By the contract of partnership 6.​ Property rights of a partner
two or more persons bind themselves to 7.​ Liability of individual partners to third
contribute money, property or industry to a persons
common fund, with the intention of dividing
the profits among themselves Law on Corporation

Partnership
A corporation is an artificial being created by
association of two or more persons to carry operation of law, having the right of succession
on as co-owners of a business for profit; the and the powers, attributes and properties
purpose of which is to obtain profits to be
expressly authorized by law or incident to its
distributed among the partners. A
partnership contract is based on trust and existence.
confidence.
In the Philippines, the law which governs the
Delectus personae creation of private corporations is Batas

no one can become a partner in a Pambansa Blg. 68, known as the Corporation
partnership without the consent of all the Code of the Philippines, and amended by
partners R.A.&No. 11232.

ESSENTIAL REQUISITES OF A
PARTNERSHIP "Right of Succession" means that a
corporation has the capacity to exist regardless
1.​ agreement to contribute money, of the death, withdrawal, insolvency, or
property, industry to a common fund
2.​ Intent to divide the profits among incapacity of the individual stockholders and
themselves regardless of the transfer of interest or shares of
stock.
ADVANTAGE OF FORMING PARTNERSHIP

Easy to form. Improved growth possibilities, Kinds of Corporation

freedom from bureaucracy
Stock corporation is a for-profit entity with
DISADVANTAGE OF FORMING A capital divided into shares, allowing
PARTNERSHIP
shareholders to receive dividends based on their
Instability, difficulty in obtaining large sums of ownership. It is governed by a Board of
capital, firm is tied to the acts and judgement Directors, which oversees its operations and
one of partner as agent
decision-making.
Classification of partnerships
Non-stock Corporation one where no part of
1.​ According to subject matter its income is distributable as dividends to its
(UNIVERSAL PARTNERSHIP,
members of the code on dissolution.
PARTICULAR PARTNERSHIP)
2.​ According to liability (GENERAL
PARTNERSHIP, LIMITED Corporation De Jure organized in accordance
PARTNERSHIP) with the requirements of law.
3.​ According to the duration
(PARTNERSHIP FOR A FIXED TERM) De Facto Corporation where there exists a flaw

Forms of Partnership in its incorporation.

1.​ When it is stipulated Public Corporation one formed or organized

2.​ When immovable property or real rights for the government of a portion of the State.
are contributed
Private Corporation one formed for some
Obligations of the Partners
private purpose, aim, or end.
1.​ Where contribution is money or property
2.​ Where contribution is industry
Corporation Sole one organized for the
purpose of administering and managing, as Characteristics of a Contract of Sale

trustee, the affairs, property, and temporalities of

(1) Consensual - A contract of sale is perfected
any religious denomination, sect, or church. In by mere consent. No form is prescribed for the
this -corporation, there is only one incorporator perfection in a contract of sale, except in the
following instances:
Eleemosynary Corporation one organized for
(a) Those covered under the Statute of Frauds
a charitable purpose. which must appear in writing otherwise, the sale
is considered unenforceable (i.e., Sale of real
Domestic Corporation a corporation formed, property or any interest therein; and Sale of
organized, and existing under Philippine laws. chattels or goods for a price not less than
P500).%
Foreign Corporation exist under any laws
(b) Sale of real property made through an agent,
other than those of the Philippines and whose in which case, the agent's authority must be in
laws allow Filipino citizens and corporations to writing; otherwise, the agency and sale made
do business in their own country or state through an agent is void.97

(2) Bilateral-because it gives the rise to

One Person Corporation
reciprocal obligations.
(3) Principal-because it can stand by itself
Revised Corporation Code of the Philippines without need of another contract.
(Republic Act 11232) (4) Onerous - because the consideration for
each party is the delivery of the thing or the
a corporation may be formed by only one payment of the price.
(5) Commutative because what the vendor
person, partnership. corporation or association
(seller) delivers is considered equivalent of the
but not more than 15 in number, provided that if price paid by venders (buyer).
corporation is to be formed by natural persons, (6) Nominate - because it has a designated
name under the Civil Code of the Philippines
such natural persons must be of legal age. A
which is "sale."
corporation shall not have a minimum capital (7) Transmissive of ownership - because the
stock and shall be given a perpetual existence, vendor transfers ownership of the subject matter
to the vendee.
unless the articles of incorporation provide
otherwise.

Distinction Between a Partnership and a Requisites of a Contract of Sale

Corporation.
1. Consent - happens when the seller offers
something and the buyer fully accepts it. Without
full agreement, there is no sale.

(a) Husband and Wife – They cannot sell

property to each other.​
(b) Guardians – Cannot buy property from the
person they are taking care of.​
(c) Agents – Cannot buy property they are
managing unless the owner allows it.​
(d) Executors and Administrators – Cannot
buy property from an estate they are handling.​
(e) Public Officials – Cannot buy government
property under their control.​
(f) Judges, Prosecutors, and Court Officials –
Law of Sales Cannot buy property involved in a case in their
court.
Article 1458. By the contract of sale, one of the
contracting parties obligates himself to transfer Case: Ronald Coloma sold his hotel to Spouses
ownership of and to deliver a determinate thing, Uy, but they named their unborn son, Johnny Uy,
and other to pay therefor a price certain in as the buyer in the contract of sale, even though
money or its equivalent. he was not yet conceived at that time.
-​ A contract of sale may be absolute or
conditional.
Legal Opinion: The contract of sale is void balance because Article 1484(3) of the Civil
because Johnny Uy had no legal personality to Code prohibits seeking additional payments
be named as a buyer and could not have given after foreclosing a chattel mortgage in
consent, which is essential for a valid contract. installment sales. This rule prevents creditors
from acquiring the foreclosed property at a low
1. Consent – Both parties must agree to the price and then suing for the remaining balance.
sale.
2. Object or Subject Matter – The item being Article 1544. If the same thing should have
sold must: been sold to different vendees, the ownership
o Exist or be possible, be legal, be clearly shall be transferred to the person who may have
identifiable. first taken possession in good faith, if it should
3. Cause or Consideration – The reason for be movable property.
the contract. -​ Should it be immovable property, the
o For the seller, it’s the price. ownership shall belong to the person
o For the buyer, it’s the item they are buying. acquiring it who in good faith recorded it
in the Registry of Property.
Case: Mr. Danilo Santos bought 10 boxes of -​ Should there be no inscription, the
Fundador Brandy at a price of P10,000 pesos ownership shall pertain to the person
per box from his supplier, Mr. John Smith, who in good faith was first in the
proprietor of Exquisite Wines & Brandy, Inc. possession; and in the absence thereof,
Determine the requisites of such contract of to the person who presents the oldest
sale. title, provided there is good faith. (1473)
Legal Opinion: The consent refers to the
meeting of minds as to when Mr. John Smith Case: Rizal Madriarca sold a portion of his
(the seller) offered Mr. Danilo Santos to sell 10 share in Lot No. 7036-A to Aleja Giron in 1957,
boxes of Fundador Brandy but the sale was not registered, while his
brothers later sold the entire lot, including Rizal’s
Article 1484. In a contract of sale of personal share, to Paciano Marquez in 1976, which was
property the price of which is payable in properly registered in 1982.
installments, the vendor may exercise any of the Legal Opinion: Paciano Marquez has a better
following remedies: right to the property if he was in good faith and
(1) Exact fulfillment of the obligation should the unaware of the prior sale, as Article 1544 of the
vendee fail to pay: Civil Code gives priority to the buyer who first
(2) Cancel the sale, should the vendee's failure registers the sale in the Registry of Property.
to pay cover two or more installments; and
(3) Foreclose the chattel mortgage on the thing Pacto de Retro Sale (Conventional
sold, if one has been constituted, should the Redemption)
vendee's failure to pay cover two or more Article 1602. Conventional redemption shall
installment. In this case, he shall have no further take place when the vendor reserves the right to
action against the purchaser to recover any repurchase the thing sold, with the obligation to
unpaid balance of the price. Any agreement to comply with the provisions of Article 1616 and
the contrary shall be void. other stipulation which may have been agreed
upоп.
Case: PAMECA Wood Treatment Plant, Inc. Case: Mr. John Reilly Barrameda sold his real
obtained a loan from DBP, secured by a chattel property, including a five-star hotel, to Don
mortgage on its assets. After failing to pay, DBP Jayson Zamora with the right to repurchase, but
foreclosed the mortgage and later sued the contract did not specify a redemption period.
PAMECA and its president, Herminio Teves, for Legal Opinion: In the absence of an agreed
the remaining balance. period, Mr. Barrameda has four years from the
Legal Opinion: Yes, DBP can recover the date of the contract to redeem his property, as
balance under the Chattel Mortgage Law since provided under Article 1606 of the Civil Code.
the transaction was a loan secured by a chattel
mortgage, not a sale of personal property on Obligation of the Vendor
installment under Article 1484 of the Civil Code.
Article 1495. The vendor is bound to transfer
Case: Ruperto G. Cruz bought a bus in the ownership of and deliver, as well as warrant
installments and secured his payments with both the thing which is the object of the sale.
a chattel mortgage on the bus and a real estate Article 1496. The ownership of the thing sold is
mortgage on his property. After defaulting on his acquired by the vendee from the moment it is
payments, Filipinas Investment and Finance delivered to him x x x.
Corporation foreclosed the chattel mortgage but Article 1497. The thing sold shall be understood
still pursued foreclosure on the real estate as delivered, when it is placed in the control and
mortgage due to the unpaid balance. possession of the vendee.
Legal Opinion: No, Filipinas Investment and
Finance Corporation cannot recover the unpaid Key Vendor Obligations
[Link] of the Item – The seller must hand ●​ Refund the price of the property at the
over the item to the buyer. time of eviction.
[Link] of Ownership – Ownership shifts to ●​ Give back any earnings (like rent) that
the buyer once delivered. the buyer had to return.
[Link] Obligations – The seller must ●​ Cover legal costs of the eviction case.
guarantee: ●​ Reimburse other expenses related to
No one else has a claim on the item (eviction). the sale.
The item has no hidden defects. ●​ Pay damages if they acted in bad faith
(e.g., knowingly sold a disputed
property).
Types of Delivery and Ownership Transfer

1. Sale or Return Warranty Against Hidden Defects

- Buyer gets the item but can return it within a This warranty applies when the buyer
set or reasonable time. discovers a defect that:
- Ownership is transferred on delivery but can ●​ Was not obvious when they bought it.
revert to the seller if returned. ●​ Existed before the sale.
●​ Makes the item useless or less
2. Sale on Approval (Trial Basis) valuable.
Ownership passes to the buyer when:
1. The buyer approves the item. Buyer’s Options:
2. The buyer keeps the item beyond the 1. Cancel the sale and return the item
agreed time without rejection. (Acción Redhibitoria).
2. Keep the item but ask for a price
3. Cash on Delivery (COD) reduction (Acción Quanti
Risk transfers to the buyer once the item is Minoris).
delivered. 3. Claim damages if the seller acted
dishonestly.
4. CIF (Cost, Insurance, and Freight)
Delivery is complete once the item is handed to Time Limits to File a Complaint:
the carrier. ●​ Regular items: 6 months from delivery.
Seller arranges shipping, insurance, and ●​ Animals: 40 days from delivery.
documentation.
Article 1582. The vendee is bound to accept
5. FOB (Free on Board) delivery and pay the price of the thing sold at the
FOB Shipping Point: Seller covers costs until time and place stipulated in the contract.
the item is given to the carrier. Buyer pays for
transport. Extrajudicial Remedies (Without Going to
FOB Destination: Seller covers transport until Court)
the item reaches the buyer. Buyer’s rights:
●​ No delivery = No payment.
Warranty in Case of Eviction ●​ Can reject defective or wrong items.
Warranty in case of eviction ●​ Can suspend payment if there’s a risk of
an implied warranty in contracts of sale, by losing ownership.
virtue of which if the vendee is deprived of the Seller’s rights:
whole or a part of the thing purchased by final ●​ No payment = No delivery.
judgment based on a right prior to the sale or an ●​ Installment buyers must follow special
act imputable to the vendor, such a vendor shall laws (Recto and Maceda Laws).
answer for the eviction even though nothing has
been said in the contract on the subject. Judicial Remedies (Through the Court)
●​ Buyer’s right to sue for damages – If
the seller fails to deliver or delivers
Conditions for Eviction Warranty to Apply: defective goods, the buyer can claim
1. The buyer loses ownership (fully or compensation.
partially). ●​ Seller’s right to sue for payment – If
2. A court decision officially takes the the buyer refuses to pay, the seller can
property away. demand payment in court. The seller
3. The claim was based on a right that can also claim additional damages for
existed before the sale or was bad faith if the buyer intentionally
caused by the seller. avoids payment.
4. The seller was notified about the
eviction case. Case: Nenita's Seafood Mart delivered
substandard seafood to Taal Vista Hotel despite
the contract requiring high-quality products. The
What the Seller Must Pay For:
hotel had already committed to a banquet menu company (like a hotel) but do so using
and could not reject the delivery. their own methods and resources.

Legal Opinion: The hotel has the right to reject Requisites to Be an Independent Contractor
the delivery due to non-compliance with the
contract. If forced to accept the seafood, it may 1. Substantial Capital or Investment: The
claim damages or request a discount for the contractor must have tools, equipment,
substandard products. machinery, or other resources to perform the
work.
Article 1868. By the contract of agency a person
binds himself to render some service or to do 2. Right to Control: The contractor has control
something in representation or on behalf of over how the job is done (like what methods
another, with the consent or authority of the are used, what equipment to use, etc.), but the
latter. employer (like a hotel) only controls the
outcome (the result of the work).
Essential Elements of Agency
●​ Consent – The principal allows the 3. Legitimate Labor Contracting
agent to act on their behalf. ●​ In a legitimate labor contracting
●​ Juridical Act – The agent performs situation:
legal transactions (e.g., signing ●​ The contractor is responsible for paying
contracts) with third parties. wages to the workers.
●​ Representation – The agent acts for ●​ If the contractor doesn’t pay the
the principal, not for themselves. workers, the employer (hotel) is
●​ Scope of Authority – The agent must responsible for paying the wages.
act within the limits set by the principal.
4. Labor-Only Contracting
Case: Estela L. Crisostomo booked a "Jewels of
If the cooperative or association does not meet
Europe" tour with Caravan Travel, but due to an
the criteria for being an independent contractor,
error in her ticket, she missed her flight. She
it is considered labor-only contracting.
later joined a different tour, paid an additional
●​ This means the contractor is only an
amount, and demanded reimbursement for the
agent of the employer and does not
price difference, which Caravan Travel refused,
have its own resources or control over
claiming it was non-refundable.
how work is done.
Legal Opinion: Caravan Travel is not a
●​ In labor-only contracting, the
common carrier since it does not transport
principal employer (the hotel)
passengers but merely arranges travel services.
becomes fully responsible for paying the
Its role was limited to procuring tickets and
workers, even though they were hired
facilitating bookings, making it an agent rather
through a contractor.
than a transportation provider.
Liability of the Principal and the Agent
Case: China Airlines (CAL) issued a ticket to
Daniel Chiok for a Manila-Taipei-Hong
Article 1883 - if an agent act in his own name,
Kong-Manila trip, with the Hong Kong-Manila leg
the principal has no right of action against the
endorsed to Philippine Airlines (PAL), but due to
persons with whom the agent has contracted;
booking errors and mismanagement by PAL,
neither had such person against the principal. In
Chiok was denied boarding, lost his luggage and
such case the agent is the one directly bound in
personal belongings, and suffered
favor of the person with whom he has
inconvenience, prompting him to sue both
contracted, as if the transaction were his own,
airlines for damages.
except the contract involved belonging to the
Legal Opinion: As the ticket-issuing airline,
principal.
CAL is liable for the breach of contract of
carriage committed by PAL since, under the
Law on Credit Transactions
Warsaw Convention and IATA rules, the contract
Article 1933 - By a contact of loan, one of the
of air transportation is considered a single
parties delivers to another, either something not
operation, making CAL the principal responsible
consumable so that the latter may use the same
for ensuring Chiok's complete journey, as
for a certain time and return it, in which case the
established in American Airlines v. CA, British
contract is called a commodatum, or money or
Airways v. CA, and Lufthansa German Airlines v.
other consumable thing, upon the condition that
CA.
the same amount of the same kind and quality
shall be paid, in which case the contract is
The Concept of an Independent Contractor
simply called loan or mutuum.
●​ Independent contractors are
companies or individuals hired to do
specific jobs or tasks for another
Commodatum is essentially gratuitous. Simple Case: Malate Tourist Development Corporation
loan may be gratuitous or with a stipulation to (MTDC) challenged a city
pay interest. ordinance prohibiting motels and inns in a
specific area.
Commodatum - is a loan for use wherein the Legal Opinion: The court ruled that the
property lent must be returned. ordinance was unconstitutional
because the "power to regulate" does not
Simple loan or Mutuum - is simply the delivery equate to the "power to prohibit"
of sum of money to another under a contract to without due process.
return at some future time an equivalent amount
with or without an additional sum agreed upon Tourism Act of 2009 (R.A. No. 9593):
for its use. Reorganization: This law reorganized and
renamed several tourism agencies,
Article 1956. Simple Loan or Mutuum - No including the DOT, Philippine Tourism Authority
interest shall be due unless it has been (PTA), and Philippine
expressly stipulated in writing. Conventions and Visitors Corporation (PCVC).
DOT's Role: The DOT became the primary
Article 2088. Pactum Commissorium planning, programming,
The creditor cannot appropriate the things given coordinating, implementing, and regulatory
by way of pledge or mortgage, or dispose for agency for tourism development.
them. Any stipulation to the contrary is null and
void. Tourism Infrastructure and Enterprise Zone
Authority (TIEZA): The PTA
Pactum Commissorium - is defined as a was reorganized as TIEZA, responsible for
stipulation giving power to the creditor to designating, regulating, and
automatically appropriate the thing given as supervising Tourism Enterprise Zones (TEZs),
security, if the principal obligation is not fulfilled as well as developing and
without any formality, such as foreclosure managing tourism infrastructure projects.
proceeding and public sale.
Tourism Promotions Board (TPB): The PCVC
was reorganized as the TPB,
responsible for marketing and promoting the
CHAPTER 2: THE TOURISM PUBLIC SECTOR Philippines domestically and
internationally.
Department of Tourism (DOT):
Creation: Established by Presidential Decree TEZs: The law created TEZs to encourage
No. 189 (May 11, 1973). tourism investment and development
Mandate: Primary policymaking, planning, in specific areas.
programming, coordinating, and
administrative entity for tourism development, TIEZA's Powers: TIEZA has the power to
both domestic and international. impose penalties for non-compliance
Key Functions: with TEZ development plans.
1.​ Supervises all government activities
related to tourism. Travel Tax: TIEZA remains responsible for
2.​ Removes barriers to travel and collecting travel taxes.
simplifies travel regulations.
3.​ Formulates promotion and publicity Case: Fairmont Hotel Makati opened without
programs to attract international visitors. DOT accreditation.
4.​ Reviews tourism projects involving Legal Opinion: The court ruled that all primary
government loans and approves tourism tourism establishments must be
5.​ projects seeking tax incentives. accredited by the DOT before operating.
6.​ Represents the government in tourism Tourism Infrastructure and Enterprise Zone
conferences and meetings. Authority (TIEZA):
7.​ Accredits travel agents, tour operators, Previous Entity: The Philippine Tourism
and tour guides. Authority (PTA) was renamed and
8.​ Classifies and accredits tourism reorganized as TIEZA.
facilities, such as hotels and Mandate: To maximize revenue generation,
restaurants. upgrade management systems,
implement the reorganization plan, manage
Devolved Powers: The power to regulate, TEZs, develop tourism infrastructure,
license, and supervise tour and improve personal efficiency.
operators and accommodation facilities has
been devolved to local government
units.
Key Functions: 8.​ Provide grants for historical
1.​ Designate, regulate, and supervise preservation.
TEZs.
2.​ Develop, manage, and supervise Case: Mr. Robert San Jose wanted to build a
tourism infrastructure projects sports complex in Intramuros.
nationwide.
3.​ Provide technical and financial Legal Opinion: The court ruled that Mr. San
assistance to tourism projects. Jose must obtain approval from the IA for the
4.​ Generate revenue for national and architectural design of the building before
corporate development. construction.

Criteria for TEZs: Other Government Agencies:

1. National Parks Development Committee
●​ Contiguous territory. (NPDC): Responsible for the
●​ Historical, cultural, or environmental development of Quezon Memorial, Luneta, and
significance. other national parks.
●​ Strategic access to transportation
infrastructure. 2. National Historical Institute (NHI):
●​ Sufficient size for new investments. Responsible for the preservation,
●​ Strategic location for socioeconomic restoration, and reconstruction of historical sites
development. and buildings.

TEZ Classifications: 3. National Commission for Culture and the

●​ Cultural Heritage Tourism Zone. Arts (NCCA): Formulates
●​ Health and Wellness Tourism Zone. policies for the development of culture and the
●​ Eco-Tourism Zone. arts.
●​ General Leisure Tourism Zone.
●​ Mixed-use Tourism Zone. 4. Tourism Promotions Board (TPB):
Promotes the Philippines as a tourism,
TIEZA's Incentives: TIEZA grants fiscal and convention, and incentive travel destination.
non-fiscal incentives to TEZ
operators, including income tax holidays, tax 5. Bangko Sentral ng Pilipinas (BSP):
exemptions, employment of foreign Manages and administers the Philippine
nationals, and special investor visas. International Convention Center.
6. National Economic Development Authority
Case: Heirs of Juancho Ardona challenged the (NEDA): The country's
constitutionality of the PTA's independent economic development and
expropriation of land for a tourist zone. planning agency.

Legal Opinion: The court upheld the 7. Anti-Money Laundering Council (AMLC):
expropriation, ruling that the Constitution Implements the Anti-Money
does not preclude the use of eminent domain for Laundering Act of 2001 and the Terrorism
tourism development. Financing Prevention and Suppression
Act of 2012.
Intramuros Administration (IA):
Creation: Established by Presidential Decree 8. Philippine Amusement and Gaming
No. 1616 (April 10, 1979). Corporation (PAGCOR): Operates
Mandate: Responsible for the restoration, and maintains gambling casinos, clubs, and
development, and maintenance of other amusement places.
Intramuros as a historical monument.
9. Department of Environment and Natural
Key Functions: Resources (DENR): Responsible
1.​ Formulate and implement policies for for the conservation, management,
Intramuros. development, and use of the country's
2.​ Enter into contracts with private entities environment and natural resources.
and government agencies.
3.​ Acquire, hold, and dispose of real and 10. Department of Labor and Employment
personal property. (DOLE): Enforces labor laws,
4.​ Restore, maintain, and supervise promotes worker rights, and regulates
Intramuros. employment.
5.​ Enforce rules and regulations for land
use and development. 11. Department of Public Works and
6.​ Expropriate properties within Highways (DPWH): Plans, designs,
Intramuros. constructs, and maintains infrastructure,
7.​ Sponsor cultural activities. including roads and bridges.
 25. Nayong Pilipino Foundation (NPF):
12. Department of Transportation and Promotes research and development in
Communication (DOTC): Promotes, social sciences, humanities, and social
develops, and regulates transportation and amelioration.
communication systems.
26. Philippine Sports Commission: Promotes
13. Attached Agencies: Land Transportation and develops Philippine sports.
Office (LTO), Land Transportation
Franchising and Regulatory Board (LTFRB), 27. Philippine National Police (PNP): The
Maritime Industry Authority national police force, responsible for
(MARINA), Air Transportation Office (ATO), Civil law enforcement and public safety.
Aeronautics Board (CAB), Light Anti-Graft and Corruption Law:
Rail Transit Authority (LRTA), Metro Rail Transit
Corporation (MRTC), Philippine R.A. No. 10910: Amended the "Anti-Graft and
National Railways (PNR). Corrupt Practices Act" (R.A. No.
3019), increasing the statute of limitations for
14. Department of Trade and Industry (DTI): graft and corruption offenses from
Coordinates, promotes, and
facilitates trade, industry, and investment
activities. CHAPTER 3: LAWS REGULATING
TRANSPORTATION COMPANIES
15. Board of Investments (BOI): Regulates
and promotes investments in their Case: The Case of the Congested Ship
Philippines.
The MV Don Juan disaster (October 1980)
16. Philippine Economic Zone Authority occurred when the ship, overloaded with
(PEZA): Establishes and manages passengers traveling from Manila to Bacolod for
special economic zones to attract foreign the MassKara Festival, sank mid-voyage,
investment. causing hundreds of fatalities. The Supreme
Court ruled that the staff’s gross negligence and
17. Department of Foreign Affairs (DFA): overloading led to one of the worst maritime
Conducts the country's foreign policy disasters in the Philippines.
and promotes trade, investment, and the
protection of overseas Filipino workers. The Civil Code of the Philippines primarily
governs common carriers, as stated in:
18. Department of Interior and Local
Government (DILG): Supervises local Article 1766. It provides that when the Code
governments, promotes public order and safety, does not regulate certain matters, the Code of
and manages the Philippine Commerce and special laws will apply.
National Police (PNP).
Article 1732. Common carriers are persons,
common carriers, firms, or occasions engaged in
19. Bureau of Food and Drugs (BFAD):
the business of carrying a passenger or goods
Registers and regulates processed foods,
or both, by land, water, or air, for compensation,
drugs, medical devices, cosmetics, and
offering their services to the public.
household hazardous substances.
Common carrier
20. Bureau of Immigration: Enforces
immigration laws and manages the entry one holding itself out to the public as engaged in
and stay of foreigners in the Philippines. the transportation of freight or passengers for
hire.
21. Bureau of Internal Revenue (BIR): Collects
national internal revenue taxes. Private carrier

22. Bureau of Customs (BOC): Enforces tariff is not in the business of transporting public
and customs laws and prevents employment but hires out to deliver goods (not
smuggling. passengers) in particular cases.

23. Philippine Coast Guard: Enforces maritime Case:The MV Vlasons I is a tramp vessel that
laws and promotes safety at sea. operates only for specific clients through charter
contracts and does not serve the general public.
24. Professional Regulatory Board for Under the NANYOZAI Charter Party (FIOST),
Customs Brokers: Regulates the the charterer is responsible for handling,
practice of customs brokerage. loading, and unloading the cargo. In this
arrangement, Vlasons Shipping, Inc. entered
into a contract of affreightment (voyage charter
hire) with National Steel Corporation to transport carrier to incur liability. Such liability
its goods. arises from the moment a person or firm
acts as a common carrier.
Legal Opinion: The MV Vlasons I is a private ●​ The term "extraordinary diligence" has
carrier as it operates under special agreements been defined as the standard of care
and not for the general public. A common carrier required of common carrier bringing
serves anyone for a fee, while a private carrier safely its passengers (and goods) from
transports goods by contract. In a voyage or one place to another.
time charter, the shipowner controls the crew, ●​ In a contract of carriage, a common
keeping it a common carrier. In a bareboat carrier must safely transport
charter, where the charterer controls both the passengers. If injury or death occurs,
vessel and crew, it becomes a private carrier. negligence is presumed, and the carrier
is liable unless it proves extraordinary
Case: Spouses Engracio Fabre, Jr. and his wife diligence throughout the journey.
owned a 1982 Mazda minibus primarily used for
a school bus service in Manila. They employed a CASE: Fortune Express was warned of a
driver, Porfirio J. Cabil, to transport students. On revenge attack but failed to take security
November 2, 1984, they agreed to transport 33 precautions. On November 22, 1989, armed
members of the Word for the World Christian Maranaos hijacked a bus, causing injuries, a
Fellowship (WWCF) from Manila to La Union fire, and the death of Atty. Caorong. Is Fortune
and back for a ₱3,000 fee. The key issue is Express liable for negligence?
whether Spouses Fabre are common carriers or
private carriers. Legal Opinion: Yes, Fortune Express is liable
for negligence. Despite warnings, it failed to frisk
Legal Opinion: Spouses Fabre are classified as passengers, allowing weapons inside. This
common carriers as they engaged in the inaction led to the bus burning and a fatal
business of transportation. Under Article 1732 of shooting.
the Civil Code, a common carrier is anyone who
transports passengers or goods for NOTE
compensation, even without offering services to
the general public. ●​ For the bus company, due diligence in
selection of employees is not satisfied
Article 1733. Common carriers, from the nature by finding that the applicant possessed
of their business and for reasons of public policy, a professional driver's license.
are bound to observe extraordinary diligence in ●​ The employer should also examine the
the vigilance over the goods and for the safety of applicant for his qualifications,
the passengers transported by them, according experience, and record of the service.
to all the circumstances of each case. ●​ For a shipping company, the vessel
must be considered seaworthy,
Article 1755. A common carrier is bound to carry adequately equipped for the voyage and
the passengers safely as far as human care and manned with a sufficient number of
foresight can provide, using the utmost diligence competent officers and crew.
of very cautious persons, with due regard for all
the circumstances. CASE: On March 15, 1987, a cargo truck
suffered a tire blowout in Compostela, Cebu,
Article 1756. In case of death of or injuries to and was parked roadside with warning
passengers, common carriers are presumed to measures in place. At 4:45 a.m. on March 16, a
have been at fault or to have acted negligently, D’ Rough Riders bus, driven by Virgilio Te
unless they prove that they observed Laspiñas, failed to stop in time and crashed into
extraordinary diligence as prescribed in Articles the truck, injuring passengers. Pedro Arriesgado
1733 and 1755. suffered a fractured collarbone, while his wife,
Felisa, later died.
Article 1757. The responsibility of a common
carrier for the safety of passengers as required Legal Opinion: The bus company is liable for
in Articles 1733 and 1755 cannot be dispensed Felisa Arriesgado's death due to driver Virgilio
with or lessened by stipulation, by the posting of Te Laspiñas’ negligence. He was speeding over
notices, by statements on tickets, or otherwise. the bridge limit, the company is presumed
negligent in supervising employees, making it
NOTE: responsible.

●​ As soon as the passenger puts his foot NOTE:

on the platform, the obligation of
extraordinary diligence of the common ●​ In cases of death or injury to
carrier begins. passengers, the victim can file a breach
●​ A certificate of public convenience is not of contract of carriage (culpa
a requirement in order for a common
 contractual) against the common irrespective of where it is issued, shall be filed in
carrier's owner. the competent courts in the City of Cebu. Is the
●​ In case of death or injury caused to a stipulation valid?
stranger or pedestrian, the victim may
file a criminal complaint against the Legal Opinion: The stipulation is void as it
driver of the common carrier for reckless violates public policy by unfairly limiting
imprudence resulting in homicide and passengers to filing suits only in Cebu, causing
damage to property. inconvenience and prejudice. Under Article 24 of
●​ The victim may also file a civil suit the Civil Code, courts must protect
against the common carrier and its disadvantaged parties in contractual relations.
driven on the ground of culpa aquiliana
or quasi-delict. Regulation of the Transportation Business

Damages Recoverable from Common The Department of Transportation and

Carriers Communication (DOTC) is the primary policy,
planning, programming, regulating, and
In an action based on a culpa contractual or administrative entity of Executive branch of
culpa aquiliana, the damages that are government.
recoverable are as follows: actual damages,
compensatory damages, moral damages, It has the power, authority and technical
exemplary damages, death indemnity and expertise to determine whether or not a specific
attorney's fees. transportation or communication project is
necessary, viable, and beneficial to the
Nominal damages may be awarded in case [Link] of Air Transportation
moral or exemplary damages may not be Business
awarded.
Legislative Act No. 3909 (1931) established an
Actual damages consist in expenses for aviation office under the Department of
medicine, hospitalization, etc. Commerce and Communications to enforce
rules and regulations for commercial and private
Unrealized profits can be claimed as aviation.
compensatory damages, calculated by
multiplying the victim’s annual income by their On June 20, 1952, R.A. No.776, otherwise
expected remaining working years, based on known as the Civil Aeronautics Act of the
mortality tables or life insurance data. Philippines was enacted which defined the
powers and duties of the Civil Aeronautics
Moral damages may be awarded when the Board, personnel and the regulations of Civil
mishap resulted in the death of a passenger or Aviation.
when the carrier was guilty of fraud or bad faith,
even if death did not result. The Civil Aeronautics Board (CAB) regulates
the economic aspect of air transportation and
Exemplary or corrective damages are has general supervision and regulation of and
awarded by way of example or correction of the jurisdiction and control over air carriers
public good, or when the common carrier acted franchise.
in wanton, reckless and oppressive manner.
It also has the power to issue, deny, amend,
Nature of Airline, Bus, and Shipping Tickets revise, alter, modify, cancel, suspend or revoke
any temporary permit or Certificate of Public
The best evidence of a contract of carriage is Convenience and Necessity (CPCN).
the passenger ticket. As a contract of adhesion,
its terms are prepared solely by the carrier and The Air Transportation Office (ATO) is
must be interpreted against the carrier in case of primarily charged with the technical and
disputes. operational phase of civil aviation matters.

A passenger is bound by the terms of a plane Establishes and enforces rules and regulations
ticket even without signing it. The contract of for the inspection and registration of all aircraft
carriage remains valid, regardless of the owned and operated in the Philippines and all air
passenger’s knowledge or consent, and small facilities.
print does not invalidate the ticket.
NOTE:
CASE: Sweet Line Inc. is a shipping company
transporting inter-island passengers and Only aircraft owned by or leased to a citizen of
cargoes. A stipulation in its passenger ticket the Philippines, and which are. not registered
states that: "It is hereby agreed and understood under the laws of any foreign country may be
that any and all actions arising out of the eligible for registration.
conditions and provisions of the ticket,
The certificate of registration is conclusive It is the Land Transportation Office (LTO) and
evidence of ownership, except in a proceeding the Land Transportation Franchising and
where such ownership is in issue or when the Regulatory Board (LTFRB)252 which are the
aircraft is only under lease. agencies involved in the regulation of the land
transportation industry.
CASE: Pilipinas Airline Company Flight 888
crashed in the mountains of Bukidnon killing all The LTO is the proper agency which controls the
the passengers of the aircraft. The airline registration and operation of motor vehicles and
company wants to know what really happened. licensing of owners, dealers, conductors,
Who has the jurisdiction to investigate the drivers, and similar matters.
accident?
LTFRB has the authority to grant, amend,
Legal Opinion: The ATO has the jurisdiction to suspend, or cancel public transportation permits
investigate the aircraft accident and must submit and set operating conditions for motorized
its investigation report to the CAB vehicles.

CASE: Grand Airline Company wants to engage Under the Clean Air Act of 1999, vehicles must
in the business of carrying passengers and pass the emission testing requirements to be
goods by air. In addition, its pilots •want to be administered by the Department of
licensed to operate the aircraft of Grand Airline Transportation and Communications as a
Company. In what government agency should prerequisite for registration.
Grand Airline Company and its pilots apply so
that it will be accredited? Seatbelt Law

Legal Opinion: Grand Airline Company should The Seatbelt was enacted to secure and
apply to the CAB for a certificate of public safeguard its citizenry, particularly passengers
convenience to operate as a common carrier. and drivers of private and public motor vehicles,
However, the pilots must secure a license to from the ruinous extremely injurious effects of
operate from the ATO. vehicular accidents. In order of seatbelt devices
'y the drivers and front seat passengers of
Regulation of the Shipping Industry private and public motor vehicles shall enforced.

The Maritime Industry Authority (MARINA) NOTE:

was created on June 1, 1974 with the issuance
of Presidential Decree No. 474 to integrate the ●​ R.A. No. 8485 (Animal Welfare Act of
development, promotion, and regulation of the 1998), public transport operators must
maritime industry in the country. ensure safe, clean, and sanitary
conditions for animals in transit,
No franchise, certificate, or any other form of providing food and water if the journey
authorization awarded by MARINA for the exceeds 12 hours or as needed.
carriage of cargo or passenger, or both in the ●​ No public utility shall transport any such
domestic trade, shall be granted except to animal without a written permit from the
domestic ship owners or operators. Director of the Bureau of Animal
Industry
A domestic ship owner or operator is a Filipino ●​ To ensure passenger and crew safety, a
citizen, a Filipino-owned partnership, or a shipping permit from the Bureau of
corporation that is at least 60% Filipino-owned Quarantine is required before
and is authorized by MARINA to operate in transporting animals. This permit
domestic shipping. requires a rabies vaccination certificate
(at least 30 days old) and, for
However, foreign vessels who may wish to international transport, a "5-in-1"
engage in trade and commerce within vaccination certificate. Agricultural
Philippines territorial waters may be granted a animals must have clearance from
Special Permit by the MARINA coggin and FMD tests.
●​ To bring animals into the Philippines, an
R.A. No. 9295, the domestic shipping industry is import permit must be obtained from the
deregulated, allowing domestic ship operators to Bureau of Animal Industry (BAI). A
set their own shipping rates, as long as valid health and rabies certificate is
competition is maintained and public interest is required upon arrival; without it, the
protected. animal will be detained. Rabies
vaccination is waived for animals from
Regulation of the Land Transport rabies-free countries. Pet fishes require
an import permit from the Bureau of
The concept of land transportation system in the
Fisheries and Aquatic Resources
Philippines started when our ancestors invented
(BFAR). Imported animals are subject to
means of locomotion.
quarantine and testing, and those with
 dangerous diseases will be euthanized Parking Restrictions: Prohibited parking areas.
and disposed of at the importer’s
expense. Driving Under the Influence: Prohibition against
driving under the influence of alcohol or drugs.
Law on Importation of Vehicles
Duty of Driver During an Accident:
R.A No. 6537 (Anti-Carnapping Act of 1972), Requirements for drivers involved in accidents,
the Collector of Customs must report imported including providing information and assisting the
motor vehicles to the Land Transportation Office victim.
(LTO) within seven days of arrival, detailing the
make, type, and serial numbers of key R.A. No. 10916 (Speed Limiter Act): Requires
components. Vehicles without serial numbers the installation of speed limiters on public utility
must be held until the Land Transportation vehicles.
Commission assigns one.
R.A. No. 10586 (Anti-Drunk and Drugged
Importers must keep permanent records of Driving Act): Penalizes driving under the
vehicle stocks and transactions and submit influence of alcohol or drugs and mandates field
monthly reports to the LTO. sobriety tests and chemical tests for drivers
involved in accidents.
Under the Philippine Clean Air Act of 1999, new
imported or locally assembled vehicles cannot R.A. No. 10913 (Distracted Driving Act):
be registered without meeting emission Penalizes the use of mobile phones while
standards set by the DENR. driving.

R.A. No. 8750 (Seatbelts Use Act of 1999),

importing vehicles without operational seatbelts
is unlawful. CHAPTER 4: LAWS REGULATING
ACCOMMODATION
Public Service Laws ESTABLISHMENTS

Public service includes individuals or entities

operating common carriers, railways, motor Case: A deluxe hotel in Metro Manila, known for
vehicles, ships, ferries, and other transport its excellent service, experienced a theft incident
services for hire in the Philippines. involving a Filipino balikbayan guest. The guest
checked in with a large suitcase and a
A Certificate of Public Convenience (CPC) or balikbayan box for an overnight stay. Upon
Certificate of Public Convenience and checkout, the guest left with the same luggage,
Necessity (CPCN) is required to operate, and a bellman assisted in calling a taxi. Later, a
unless exempted. housekeeping attendant discovered that the
television in the living room was missing and
Public utilities are privately owned and operated found large rocks in the bathtub. The incident
businesses whose service is essential to the was immediately reported to security and
general public investigated by the Human Resources
Department.
Traffic Laws:
The Philippine Medium-Term Development
R.A. No. 4136 (Land Transportation and Plan: 2001-04
Traffic Code) identifies the tourism sector as one of the
banner industries that will pole-vault the
This law covers various aspects of traffic rules economy
and regulations, including: l Registration of
Motor Vehicles: Requirements for registration, Tourism competitiveness
including emission testing, and restrictions on the "ability of a destination to deliver goods and
overloading. services that perform better than other
destinations on those aspects of the tourism
Driver's Licenses: Requirements for obtaining
experience considered to be important by tourist
and carrying a driver's license.
Nature and Description of the Business
Speed Limits: Maximum allowable speeds for
Business entities engaged in the operation of
different types of vehicles and roads.
tourist accommodation establishments may be
Overtaking and Passing: Rules for overtaking organized as a single proprietorship or a
and passing other vehicles. corporation

Right of Way: Rules for yielding the right of way a.​ HOTEL - A building or premises used
at intersections and to pedestrians. for lodging travelers and tourists with
incidental services for a fee
 b.​ RESORT - A comfortable, healthful c.​ Resorts must have an on-call or full-time
place offering food, lodging, and physician, certified first aiders, first-aid
recreation for a fee medicines, and lifesaving equipment.
c.​ TOURIST INN - lodging establishment d.​ Beach or lakeside resorts must place
catering to transients which does not an adequate number of buoys within a
meet the minimum requirements of an designated area.
economy hotel. e.​ Precautionary Measures: Swimming
d.​ APARTEL - A building containing beyond 10:00 PM is prohibited at the
several independent and furnished or beach, and night pool swimming is
semi-furnished apartments leased to allowed only with lifeguards and proper
travelers long-term, offering hotel-like lighting. Warning signs must be placed
services. to alert guests of hazards.
e.​ PENSION HOUSE - A private or f.​ Prohibited Acts and Practices: Pets,
family-operated tourist lodging house fishing, and net washing are banned in
with independent rooms, common beach resorts. Vendors are not allowed
facilities, and non-professional staff to ensure guest privacy. Littering is
catering to travelers. strictly prohibited, and resorts must
f.​ MOTORIST HOTEL/MOTEL - A maintain cleanliness. No resort shall be
highway-side structure with separate built within 5 km of pollution-causing
units and parking, offering lodging and factories.
sometimes meals for motorists.
Motorist Hotel/Motel
STAR GRADING SYSTEM FOR HOTELS,
RESORTS, AND APARTMENT HOTELS Motels must comply with operational and
maintenance standards, including maintaining a
Section 1. Five Star Grading System Motel Registry Book that records guests' full
There are five (5) levels of accommodation name, address, and valid ID details (Residence
standards ranging from one to five stars. The Certificate Class A, Driver’s License, or
star bands for Hotels, Passport). A vehicle logbook must also
Resorts and Apartment Hotels are as follows document the plate numbers of cars used by
1.​ One Star: 25—40% achievement (251 guests entering and leaving the premises. Upon
to 400 points) departure, the motel clerk must record the
-​ appeal to budget minded guest’s date and time of departure. Guests
travelers; limited range of under 18 are not allowed unless accompanied
facilities and services by a parent or guardian
2.​ Two star: 40—55% achievement (401
to 550 points) Accreditation Process
-​ tourist seeking more than basic
accommodation; expanded FILING OF APPLICATION . Any person,
facilities, higher comfort partnership, corporation, or entity seeking to
3.​ Three star: 55—70% achievement (551 operate a primary tourism enterprise must
to 700 points) secure accreditation from the Department, with
-​ Very good level of the application process completed online
accommodation; higher quality
DOCUMENTARY REQUIREMENTS. DOT
of facilities
requires accommodation establishments
4.​ Four star: 70—85% achievement (701
classified as Primary Tourism Enterprises to
to 850 points)
secure accreditation under the Tourism Act of
-​ Upscale properties; refined and
2009 by submitting a completed application
stylish accommodation
along with necessary documents. These include
5.​ Five star: 85—100% achievement (851
business registration papers such as Articles of
to 1, 000 points)
Incorporation, By-laws, or Business Name
-​ Luxury and sophisticated
Certificate, financial records like the latest
properties
income tax return and audited financial
statements, and an employee list with
Rules on the Operation and Management of
designations and nationalities. Foreign
Resorts
personnel must present a valid visa and DOLE
a.​ Resorts mus N t follow sanitation work permit. Establishments must also submit a
standards under P.D. 856, the Code on Mayor’s permit or municipal license and any
Sanitation of the Philippines additional documents required by the DOT.
b.​ Resorts must have well-trainers,
INSPECTION. An inspection team will audit the
accredited lifeguards and provide
establishment for classification, while a
adequate security for guests.
Department oversight committee will conduct
periodic inspections
VALIDITY OF ACCREDITATION. The Certificate Article 2180, paragraph (4) of the same Code:
of Accreditation shall be valid for a period of two provides that the owners and managers of an
(2) years, unless sooner revoked by the establishment or enterprise are likewise
Department responsible for damages caused by their
employees in the service of the branches in
SCHEDULE OF FEES. The Department shall which the latter are employed or on the occasion
issue a schedule of accreditation fees to be of their [Link] an employee is negligent, the
implemented by these Rules employer is presumed negligent in selection or
supervision
GROUNDS FOR CANCELLATION.
Accreditation may be canceled due to false Case: Mr. McLoughlin sued Tropicana
declarations, fraud, or misrepresentation in Copacabana Apartment Hotel for the loss of his
obtaining accreditation, failure to comply with American and Australian dollars from the safety
conditions set in the certificate, or deposit box, which required two keys arguing
non-compliance with operational standards the hotel's liability for negligence and demanding
and regulations. It may also be revoked if the liquidated, moral, and exemplary damages with
establishment permits prostitution, especially attorney's fees.
involving minors, or engages in illegal,
immoral, or illicit activities. Additionally, Legal Opinion: Tropicana is solidarily liable for
violations of rules, orders, decisions, and Mr. McLoughlin’s loss since access to the safety
circulars issued by the Department or other deposit box required both keys, making
government agencies can result in management responsible unless due to force
cancellation. majeure. Under Articles 1170 and 2180 of the
Civil Code, the hotel is liable for its employees'
PROCEDURE FOR CANCELLATION AND/OR negligence and failure to notify the guest.
DOWNGRADING OF ACCREDITATION.
Assessors will submit a report with National Building Code of the Philippines
recommendations based on the inspection and
notify the enterprise of its deficiencies, granting P.D. 1906, FEB 19, 1997: NBCP was adopted in
a minimum three-month grace period for view of the country's accelerating and physical
correction. Failure to comply within this period development coupled with urbanization and
may lead to cancellation or downgrading of population growth, The NBCP contains
accreditation, with the local government unit up-to-date and modern technical knowledge on
also being informed of the enterprise’s status. building design, construction, use, occupancy
and maintenance.
Supervision of Accredited Establishments
Section 104. General Requirements
DISPLAY OF DOT ACCREDITATION SEAL
All buildings, structures, and accessory facilities
NON-TRANSFERABILITY must be safely constructed, suited to their
purpose, environmentally compliant if used for
PERIODIC INSPECTION production, and consistently maintained in a
safe, sanitary, and functional condition
DEFECTS AND DEFICIENCIES FOUND
DURING THE INSPECTION Section 105. Site Requirements

PENALTY FOR FAILURE TO REMEDY THE Any land or site for a building or facility must be
DEFECTS, ETC sanitary, hygienic, and safe, and if intended for
human habitation, it must be at a safe distance
ADVERTISEMENTS from polluted water or air sources, volcanoes, or
fire and explosion hazards, as determined by
Responsibilities of Accommodation authorities.
Establishments
P.D. 856: CODE ON SANITATION OF THE
Accommodation establishments must exercise PHILIPPINES
due diligence, not only in the selection of its
employees, but also in serving the needs of its No establishment can operate without a sanitary
customers. Failure to do so warrants the permit from the Secretary of Health, ensuring
conclusion that the management had been clean facilities, adequate water supply, and pest
remiss in complying with the obligations control. Additional requirements include
imposed upon hotelkeepers under the law separate housing for animals, employee health
certificates, clean linens for customers, and
Article 1170 of the New Civil Code: those who sanitized rooms after each use.
in the performance of their obligations, are guilty
of negligence, are, liable for damages R.A. 9003: ECOLOGICAL SOLID WASTE
MANAGEMENT ACT OF 2000
The law provides for the minimum standards for Accommodation establishments, classified
solid waste management, as well as penalties under Group B Occupancies, include hotels and
for violation thereof. lodging houses and must comply with location
and safety requirements under the National
P.D. 1185: FIRE CODE OF THE PHILIPPINES Building Code.

The law mandates fire safety compliance for Light and Ventilation
building owners, administrators, and occupants,
requiring fire inspections before permit issuance, Article 801. General Requirements of Light and
fire protection systems (sprinklers, alarms, Ventilation
exits), and safety measures for handling
hazardous materials (flammable liquids, All buildings must be designed and constructed
explosives, toxic substances). Additionally, to ensure adequate light and ventilation in
fire-resistant construction, emergency exits, and compliance with the Civil Code and must face a
fire escape plans must be in place to ensure street, public alley, or approved private street.
public safety.
Article 807. Size Dimension of Rooms
P.D. 1152: PHILIPPINE ENVIRONMENTAL
CODE Rooms must meet minimum size requirements:
6.00 square meters for human habitation, 3.00
minimum standards for air quality management, square meters for kitchens, and 1.20 square
water quality management, land use meters for baths and toilets, with specified least
management, natural resources management dimensions.
and conversation, and waste management
Article 808. Window Openings
P.D. 1586: ENVIRONMENTAL IMPACT
SYSTEM Rooms without artificial ventilation must have
windows covering at least 10% of the floor area,
no person or entity can operate an opening to a court, street, or open space, while
environmentally critical project without securing rooms like bakeries, hotel kitchens, and boiler
an Environmental Compliance Certificate (ECC) rooms require artificial ventilation providing at
from the DENR, and hotels and resorts, being in least ten air changes per hour.
Environmentally Critical Areas, must comply with
this requirement. Light and Ventilation

B.P. 334: THE LAW TO ENHANCE MOBILITY refers to an easement of natural light and
OF DISABLED PERSONS AND ITS allowance of circulations of fresh air
IMPLEMENTING RULES AND REGULATIONS unobstructed by erections and construction.

No building permit for public use shall be issued Sanitation

without facilities ensuring disabled accessibility,
including sidewalks, railings, and reserved Section 901. General Requirements
parking.
Buildings for human habitation must have proper
Building Permits water supply, plumbing, wastewater disposal,
drainage, pest control, and ventilation,
Section 301. Building Permits complying with the National Plumbing Code and
Water Code. Sewage must be directed to
A building permit from the Building Official is sanitary systems or septic tanks, and structures
required for any construction, alteration, or should include termite-proofing, protected
demolition. garbage bins, and adequate ventilation,
especially in public dining areas.
Section 302. Application for permits
General Design and Control Requirements:
Applicants must submit a written request,
ownership proof, project details, cost estimate, Location: Buildings must adjoin or have direct
and certified plans by licensed professionals. access to a public space.

General Requirements of All Buildings by Fire Resistance: Exterior walls must have fire
Use or Occupancy resistance and opening protection.

Section 704. Location on Property Exits: Minimum exit requirements based on

occupant load.
Buildings must have direct access to a public
space, yard, or street, and their exterior walls Stairways: Width and handrail requirements.
must meet fire resistance standards.
Fire Extinguishing Systems: Required in certain Bomb Threats: The chapter provides guidelines
areas. for handling bomb threats,including notifying
authorities and evacuating the building.
Electrical and Mechanical Systems: Must
comply with the Philippine Anti-Photo and Video Voyeurism Act of 2009
(R.A. 9995): Penalizes the unauthorized taking
Electrical Code and Mechanical Engineering of photos or videos of a person's private area.
Code.

Signboards: Restrictions on signboards that

obstruct views or create traffic hazards. CHAPTER 5: LAWS REGULATING TRAVEL
AND TOUR SERVICES
Registration of Guests and Occupants:
Case: In the 1970s, many travel agencies and
Hotelkeepers' Liability: The Civil Code of the tour operators were clandestinely engaged in
Philippines holds hotelkeepers liable for the sex tours. The clientele coming from the Middle
safekeeping of guests' belongings. Eastern, European, and Asia-Pacific countries
trooped in busloads. The largest contingent
Registration Requirements: Hotels and motels came from the Japanese market. In the latter
are required to register guests and their visitors, part of the current decade, 2016—2020, the
recording their names, addresses, and country saw a proliferation of prostitution dens
identification documents. specifically catering to executives and
employees of Chinese POGOs.
DOT Memorandum Circular 2006-09:
Mandates safety and security measures for
accommodation establishments, including guest Electronic Commerce Law (RA 8792)
registration,vehicle recording, and security a background on the validity of e-ticketing in
personnel training. booking customers.

National Homestay Program:

Tour Operator
an entity engaged in the business of extending
DOT Program: The DOT's National Homestay
to individuals or groups, such services pertaining
Program provides tourists with accommodation
to arrangements and bookings for transportation
in Filipino homes near tourist attractions.
and/or accommodation, handling and/or conduct
Requirements: Homestay sites must meet of inbound tours whether or not for a fee,
certain requirements, including safety, sanitation, commission, or any of the compensation.
and training for host families.
Tour Guide
Waste Management: an individual who guides tourists, both foreign
and domestic, for a Jee, commission, or any
Environmental Code of the Philippines (P.D. other form of lawful remuneration.
1152): Prohibits dumping solid waste into the
sea and requires waste management programs Travel Agency
for provinces, cities, and municipalities. to make travel arrangements on behalf of
customers. Its services include procuring tickets
Ecological Solid Waste Management Act of and facilitating travel permits or visas as well as
2000 (R.A.9003): Encourages waste booking customers for tours.
management practices, including source
segregation,and prohibits certain acts related to Philippine Passport Act of 1996 (RA 8239)
waste disposal. the issuance of a passport may be filed by any
licensed travel agency duly accredited by the
Security and Safety: Department of Foreign Affairs, provided that the
agent shall be responsible for the authenticity of
DOT Memorandum Circular 2006-09: the supporting documents.
Mandates safety and security measures for
accommodation establishments, including: Case: Giancarlo Capco will be traveling to the
United States to compete in an international
1.​ Guest registration. business plan competition in Boston,
2.​ Vehicle recording. Massachusetts. His old passport will be expiring
3.​ Security personnel training. soon and he needs a renewal of his old US
4.​ Crisis management teams. multiple entry visa.
5.​ Surveillance systems.
6.​ Access control devices. Legal Opinion: In order to save time and to be
properly guided, Giancarlo can avail of the
following services of a travel agency: (a)
passport renewal assistance; (b) US. visa b.​ It shall be easily identifiable and shall be
renewal assistance; (c) airline ticketing; and (d) used exclusively for the tour operation
hotel reservations. business.

Accreditation of Travel Agencies and Tour Accreditation under the International Air
Operators Transport Association (IATA)

Section 2. Who May Apply for Accreditation. IATA accredits two distinctive types of travel
a.​ a Resident Filipino Citizen agencies
1.​ Airline Appointed Services - holding
b.​ a partnership, at least 60% of its capital ticket stock or capable of e-ticketing
being owned by Filipino citizens
c.​ Corporations, at least 60% of the 2.​ Travel Sales Intermediaries - engaged
subscribed common or voting shares of in the sale and/or brokerage of
stocks of which is owned by Filipino travel-related services such as cruises,
citizens and the composition of its Board tours, hotels, car rental, bus, and rail
of Directors being at least 60% Filipinos transportation. TSIs do not hold airline
agency appointments or issue airline
Section 3. For purposes of accreditation, the
following are the supporting documents. CASE: Oswald Tan wants to put up his own
a.​ in case of a single proprietorship, a self-managed travel agency, Sunflower Travel.
business name certificate and He has practically complied with all the
amendments thereto; in the case of requirements except one. His bachelor's degree
partnership corporations, certified true is Chemical Engineering at the Mapua Institute
copy of the articles of partnership of Technology.
incorporation
Legal Opinion: It is desirable for an
b.​ Complete list of its executive officers entrepreneur of a travel agency to be a B.S.
and employees, tour guide and travel Tourism graduate. However, an acceptable
representatives, 1. In the case of the qualification for travel agency owners is a
manager, proof that he has at least completion of a seminar on travel agency
three (3) years managerial experience in operations. Mr. Tan can also hire a manager
tour operations or has earned a degree who has either B.S. Tourism degree or has
in Bachelor of Science in Tourism or has three-year managerial experience in a travel
successfully completed a tour operator's agency.
course; 2. Proof that, at least, two (2) of
the permanent staff have at least two (2) Accreditation of Tour Guides
years experience in the tour operations.
Section 9. Requirements for Issuance of
c.​ For alien officers and employees, a valid Accreditation.
visa from the Bureau of Immigration and a.​ Proof that the applicant has passed a
the proper permit from the Department seminar for tour guides duly conducted
of Labor and Employment. by the DOT
b.​ Certificate of good health
d.​ Contract of lease or contract to lease c.​ Clearance from the National Bureau of
the office space intended for the use Investigation
d.​ Mayor's permit/ municipal license
e.​ Mayor's permit/ Municipal license e.​ Latest Income Tax Return

f.​ Latest Tax Return and Audited Financial Case: Arturo Corpuz is a recent graduate with a
Statements reflecting a minimum degree in B.S. Tourism currently seeking
working capital of Five Hundred employment with Rajah Tours as a tour guide.
Thousand (P500,000) Upon receiving the results of his medical
examination, he learned that he has Hepatitis B.
Section 4. Additional Requirements for Tour
Operators Using a Motor Vehicle. Legal Opinion: Arturo has simply to to first
No tour operator shall use any motor vehicle improve his health and seek medical clearance
while conducting tours or transporting from a accredited government physician.
tourist unless such motor vehicle is accredited
with the Department and sporting a tourist plate Responsibilities of Business Entities
Engaged in Travel and Tour Services
Section 5. Minimum Office Requirements.
a.​ Shall be located in a commercial district Travel agencies need to take necessary
and not in a residential district. precaution by exercising prudence and due
diligence at all times.
 a.​ RESTAURANT – an establishment
Failure to exercise prudence and due diligence offering to the public refreshment
in the supervision of its employees may hold the and meals.
tour operator liable for moral and exemplary b.​ DEPARTMENT STORE – sells
damages, by reason of the anxiety caused to several lines of merchandise and
tourist, especially when misrepresentations were that is organized into separate
made on tour packages. sections for promotion, service,
accounting and control.
Case: Lydia Geraldez engaged the services of c.​ SHOP – small retail establishment
Kenstar for her trip to Europe. Ms. Geraldez offering a line of goods or services.
came to know about Kenstar from numerous d.​ SPORTS & RECREATIONAL
advertisements in newspapers of general CENTER – offers related facilities to
circulation regarding tours in Europe with its tourist and to the general public.
enticing slogan: "Let your heart sing." e.​ MUSEUM – where a collection of
valuable objects and artifacts, arts
Legal Opinion: For failure to exercise diligence and sciences are put on exhibition
and prudence in serioustion of its employees for the public.
(tour guides), the travel agency must be liable f.​ KARAOKE BAR – offering karaoke
for the serious anxiety caused to Ms. Geraldez. and videoke facilities to tourists and
public.
Prohibition against Engaging in Recruitment g.​ GALLERY – a formal space for
Activities exhibition of paintings, sculptures,
prints and mixed media works.
Article 26. (Labor Code of the Philippines). h.​ TERTIARY HOSPITAL – provides
Travel agencies are prohibited to recruit from medical, specialized, surgical and
engaging in the business of recruitment and intensive care to those who travels
placement of workers for overseas employment for it.
whether for profit or not. i.​ SPA - a business that offers rest
and relaxation.
E-Ticketing and E-Commerce

ACCREDITATION – not mandatory in nature,

E-ticketing (ET)
but increases the marketability of the following
one of the most significant opportunities to
tourism-related establishments and with its
reduce cost and improve passenger
minimum requirements that must be complied to
convenience.
be accredited by the DOT.
Electronic Commerce Act (RA 8792)
an "electronic document" refers to information Restaurants
or the representation of information, data, ➢​ Must have proper ingress, egress, and
figures, symbols or other modes of written well-designed architecture.
expression. It shall have the legal effect, validity, ➢​ Free, secured parking for customers.
or enforceability as any other documents or legal ➢​ Hygienic kitchen, pantry, and cold storage
writing provided the said electronic document with necessary sanitation equipment.
➢​ Adequate lighting and ventilation in public
maintains its integrity.
areas.
➢​ Regular maintenance and vermin control.
➢​ Firefighting facilities as per the Fire Code of
Chapter 6: LAWS REGULATING the Philippines.
RESTAURANTS AND OTHER
TOURISM-ORIENTED ESTABLISHMENTS Shops/Department Stores
Case: Ana Karenina Chua, who was celebrating
➢​ Must be located on a major street or
her 65th birthday in her favorite casual dining
shopping center.
Filipino restaurant with her children in a lunch. ➢​ Attractive and well-lit entrance and display
They ordered their all-time favorite, sizzling windows.
sisig. As they enjoy their meal, Mrs. Chua ➢​ Presentable and functional interior with full
noticed a foreign object in the sizzling sisig air-conditioning.
which was a used band-aid strip. One of her ➢​ Clearly priced goods and a wide selection of
children came rushing to the restroom due to products.
discomfort. They called the restaurant manager ➢​ Official receipts must include full business
details.
who immediately apologized and offered to
➢​ Discounts should be indicated on the price
replace the meal and waived the bill.
tag.
➢​ Antique shops must provide authenticity
certificates.
Nature and Description of Business
Sports and Recreational Centers
 Destination/Resort Spa – Focuses on lifestyle
➢​ Includes theme parks, amusement improvement, health enhancement, and spa
parks, and fitness centers. cuisine.
➢​ Dining area with proper furniture and
ambiance. Hotel Spa – Located within a hotel, offering
wellness and fitness services.
➢​ Adequate sports and recreational
equipment for rent. Cruise Spa – Operates aboard cruise ships.

Separate, accessible restrooms for male and Club Spa – Primarily for fitness but offers spa
female with toiletries. services.
➢​ Lockers, dressing areas, and shower
cubicles.
Wellness Center – Integrates diet, lifestyle,
exercise, and relaxation.

Museums
Rehabilitation Center – Specializes in therapy
for health-related conditions.
➢​ Must be a member of the National
Committee on Museums.
➢​ Pleasant and accessible location with Hospital Spa – Located within a hospital,
well-designed architecture. combining mainstream medicine and alternative
➢​ Secured parking and adequate security. healing.
➢​ Receptionist and waiting lounge with a
telephone. Laws Governing Casinos and Gaming
➢​ Conference/auditorium with audiovisual Establishments
equipment.
➢​ Publicly available and equipped library.
The Law
➢​ Clean and accessible restrooms for males
Section 1. Declaration of Policy. It is hereby
and females.
declared to the policy of the State to centralize
and integrate all games of chance not heretofore
Karaoke Bars authorized by existing franchises or permitted by
law in order to attain the following objectives:
➢​ Must comply with zoning and land-use
policies. Section 2. Philippine Amusement and
➢​ Receptionist and a dining/lounge area with Gaming Corporation (PAGCOR) Creation and
proper lighting and audiovisual systems. Purpose. To implement State policy and pursue
➢​ Basic audiovisual equipment, acoustic the objectives set forth in the preceding Section,
materials, and entertainment facilities.
there is hereby created a body corpurate to be
known as the Philippine Amusement and Gaming
Corporation.
Galleries

➢​ Located in a commercial district with a formal

atmosphere. Food Caterers’ Association of the
➢​ Dedicated space for displaying artworks, Philippines - a group of catering companies
exclusively used for gallery business. with the need to professionalize industry and
➢​ Properly lit and labeled artworks. serve the needs of the Philippine catering
➢​ Security measures in place. industry.
➢​ Membership with the National Commission
on Culture and the Arts (NCCA).
R.A No. 3720
➢​ Well-informed staff and curator present
known as the Food, Drug and Cosmetic Act, this
during exhibitions.
ensures the safety and good quality supply of
Tertiary Hospitals for Medical Tourism these and to regulate the production, sale and
traffic of the same to protect the health of the
➢​ Equipped bedrooms with 24-hour hot/cold public.
water, IDD/DDD lines, TV, and room service.
➢​ General facilities include elevators, valet Retail Trade Law
parking, shops, security, transportation, and The Philippine retail industry is hereby
computerized billing. liberalized to encourage Filipino and competitive
retail trade sector in the interest of empowering
Spas the Filipino consumer through lower prices.
Types:
Day Spa – Offers various spa services on a Case:
day-use basis. On November 15, 2013, Erlinda Palabrica was
granted a permit to operate Argentina Club and
Disco. Five days later, she began living with Yap
O. Tan, a Chinese national, as her common-law
husband. Yap O. Tan not only invested in the Article 328. Special cases of malicious
business but also actively managed its mischief.
operations. Any person who shall cause damage to the
National Museum or National Library, or to any
Legal Opinion: archive or registry, shall be punished.
Yap O. Tan is engaged in retail trade, violating
Article 331. Destroying or damaging statues,
the Retail Trade Liberalization Act. Since part of
public monuments or paintings.
the Club’s investment came from him, he must
Any person who shall destroy or damage
register with the Department of Trade and
statues or any other useful or ornamental public
Industry. Otherwise, he may face deportation
monument shall suffer the penalty.
and legal consequences.

Laws Regulating Sale of Alcohol Poisoning

The National Internal Revenue Code of 1997 (as Article 264. Administering injurious
amended by R.A. No.9334, December 21, 2004) substances or beverages.
has imposed excise taxes on the purchase of (serious physical injuries) which shall be
alcohol. The excise tax rates shall be based on applicable in the respective cases to any person
the classification of alcohol content as provided who, without intent to kill
under the law.
Article 265. Less serious physical injuries.
National Internal Revenue Code of 1997 (as which shall incapacitate the offended party for
amended by R.A. No.9334) labor for ten days or more, or shall require
imposed excise taxes on the purchase of medical attendance for the same period
alcohol. The excise tax rates shall be based on
the classification of alcohol content as provided Article 266. Slight physical injuries and
under the law. maltreatment.
Shall be punished:
LGU’s Role a.​ By arresto menor when the offender has
In addition, each local government unit (city or inflicted physical injuries which shall
municipality) has the authority to enact incapacitate the offended party for labor
ordinances intended to prevent, suppress, and from one to nine days
impose appropriate penalties for habitual b.​ By arresto menor or a fine not
drunkenness in public and juvenile delinquency. exceeding Php. 200 and censure when
the offender has caused physical
Laws Regulating Churches, Monuments, injuries which do not prevent the
National Shrines, Landmarks and Other offended party from engaging in his
Important Historic Edifices habitual work nor require medical
attendance.
By virtue of Presidential Decree No. 260
the following has been declared national Case: Mark Baranda is a chef in a 300-seater
shrines, monuments, and landmarks: restaurant in the Manila Bay area. A long table
was booked by a popular politician. The chef
1.​ The Sta. Ana Site Museum in Manila; and his team became so upset and vengeful.
2.​ The Roman Catholic Churches of Paoay They added a few substances in the subsequent
and Bacarra in Ilocos Norte; dishes served.
3.​ The San Agustin Church and Liturgical
Objects therein in Intramuros, Manila; Legal Opinion: Chef Mark and his team will be
4.​ Fort Pilar in Zamboanga City; held criminally liable for serious physical injuries
5.​ The Petroglyphs of the Rockshelter in under the Revised Penal Code for having
Angono, Rizal; etc. administered injurious substances on the food of
its customers.
Vandalism (Malicious Mischief)
embraces attempts against another's property
inspired by hatred or a desire for revenge and
sometimes by the mere pleasure of destroying it.

Article 327. Who are liable for malicious

mischief. Theft
Any person who shall deliberately cause to the
property of another any damage shall be guilty Article 308. Who are liable for theft.
of malicious mischief. Theft is committed by any person who, with
intent to gain but without violence against or
intimidation of persons.
Article 310. Qualified theft.
The crime of theft shall be punished by the
penalties next higher by two degrees if
committed with grave abuse of confidence.

Article 311. Theft of the property of the

National Library and National Museum.
If the property stolen be any property of the
National Library or the National Museum, the
penalty shall be arresto mayor or a fine.

Intent to gain
is presumed from the unlawful taking of personal
property belonging to another.

The basis of the penalty of theft is:

1.​ the value of the thing stolen
2.​ the value and nature of the property
taken
3.​ the circumstances or causes that
impelled the culprit to commit the crime.

Case: Mr. Tony Pascual is the front office

manager of a deluxe hotel in Makati. Further
wide-scale investigation to the discovery of eight
huge money bags full of foreign currencies
stashed inside safety deposit boxes controlled
by Mr. Pascual and his eight assistant
managers.

Legal Opinion: Tony Pascual and his team of

managers committed the crime of qualified theft.

Food Fortification

Food Fortification Law of 2000 (RA 8976)

a landmark law that seeks the improvement of
nutritional status of the entire population.

Case: Golden rice, genetically modified to make

pro-vitamin A was announced as a cure for
widespread vitamin A deficiency in developing
countries. However, it was revealed that such
fortified rice has the potential to cause birth
defects and developmental abnormalities
according to experts Dr. Mae-Wan Ho and Dr.
Joe Cummins.

Legal Opinion: The manufacturer of golden rice

has the responsibility for fortifying such staple
food based on the standards set forth by the
DOH through the BFAD before the said product
is allowed to be distributed or sold to the public.