Transportation and Public Utilities Law

7/21/2019 Transportation and Public Utilities Law

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LAW ON TRANSPORTATION AND PUBLIC UTILITIES

Contract of Transportation – person obligates himself totransport persons or property from one place to another for aconsideration.

2 KINDS:1. CARRIAGE OF PASSENGERS

Parties: common carrier & passenger (carried gratuitously ornot)Passenger – one who travels in a public conveyance by virtue of

contract, epress or implied, with the carrier as to the paymentof fare or that which is accepted as an e!uivalent thereof

Perfecti!:

2 t"#es f c!tracts f carria$e f PASSENGERS:% c!tract t carr" (agreement to carry the passenger atsome future date) – consensual contract and perfected by mereconsent

" #$%C%#T – perfected even without issuance of tic'et as longas there was already meeting of minds with respect to thesubect matter and consideration

% C!tract f Carria$e – real contract not until the facilities of the carrier are actually

used can the carrier be said to have assumed the obligation of the carrier perfected by actual use.

" #$%C%#T – perfected if it was established that the passengerhad chec'ed in at the departure counter, passed throughcustoms and immigration, boarded the shuttle bus andproceeded to the ramp of the aircraft and baggage alreadyloaded to the aircraft.

" Public *tility +us or eepneys or -treet Cars – once it stops it isin eect ma'ing a continuous oer to riders perfected whenpassenger is already attempting to board the vehicle

" T%#$/- – perfected when a person0a. purchased a tic'et1 possess su2cient fare with whichto pay for his passageb. presented himself at the proper place and in aproper manner to be transportedc. has a bona 3de intention to use facilities of thecarrier

2. CARRIAGE OF GOODSParties: shipper & carrier

-hipper – the person who delivers the goods to the carrier fortransportation pays the consideration or on whose behalf payment is made

Consignee – person to whom the goods are to be delivered. 4aybe the shipper himself or a third person who is not actually aparty to the contract

Perfecti!:

5 contract to carry goods – consensual5 contract of carriage 6 act of delivery of goods ( goods areunconditionally placed in the possession and control of thecarrier and upon their receipt by the carrier for transportation)

CARRIER:C&&! carriers 'CC( '1)*2(

– persons, corporations, 3rms or associations engaged inthe business of carrying or transporting passengers orgoods or both, by land, water, or air, for compensation,oering their services to the public. (/7T the means of transportation)

– one that holds itself out as ready to engage in thetransportation of goods for hire as a public employmentand not as a casual occupation.

Tests fr +eter&i!i!$ WON a #art" is a c&&! carrierf $+s:

8. 9e must be engaged in the business of carrying goodsfor others as a public employment, and must holdhimself out as ready to engage in the transportation ofgoods for persons generally as a business and not as acasual occupation.

:. 9e must underta'e to carry good of the 'ind to which

his business is con3ned.;. 9e must underta'e to carry by the method by which his

business is conducted and over his established roads.<. Transportation must be for hire.

C,aracteristics f C&&! carriers 'CC(: no distinction between one whose principal business is

the transportation of persons1goods and one who doessuch as an ancillary business (sideline)

no distinction between regular or scheduled basis andone oering such service on an occasional, episodic ounscheduled business

still a CC even if services oered to a limited clientele(between the general public and a narrow segment othe general population)

-till considered a CC even if he did not secure a

Certi3cate of Public Convenience /o distinction as to the means of transporting, as long

as it is by land, water or air The Civil Code does not provide that the transportation

should be by motor vehicle -till a CC even if he has no 3ed and publicly 'now

route, maintains no terminals, and issues no tic'ets pipeline operators are CCs – not necessarily moto

vehicles (Case: First Philippine Industrial Corp. vs. CA)

Case: Jose Mendoza vs. Philippine Airlines Inc6 The test of whether one is a common carrier by air is

whether he holds out that he will carry for hire, so longas he has room, goods of everyone bringing goods tohim for carriage, not whether he is carrying as a publicemployment or whether he carries to a 3ed place

C-ARTER PART:6 Contract by which an entire ship or some

principal part thereof is let by the owner to anotheperson for a speci3ed time or use.

=0 >hat is the eect of charter party?#0 $t may transform a common carrier into a private carrier9owever, it must be a bareboat or demise charter where thecharterer mans the vessel with his own people and becomes, ineect, the owner for the voyage or service stipulated

2 t"#es:

8. C!tract f A/rei$,t&e!t6 involves the use of shipping space on vessels

leased by the owner in part or as a whole, tocarry goods for another6 CC @ observe etraordinary diligence in case

of loss, deterioration or destruction of goods ogoods, CCs are presumed to be at fault ohave acted negligently

6 : typesi. Time charter0 vessel is leased to the

charterer for a 3ed period of timeii. Aoyage charter0 ship is leased for a

single voyage

2. C,arter 0" +e&ise Bare0at C,arter



whole vessel is let to the charterer with atransfer to him of its entire command andpossession and conse!uent control over itsnavigation including the master and the crewwho are his servants.

charter includes both vessel and crewBCCbecomes private carrier (PC) insofar as thatparticular voyage is concerned

if it is already a PC6 ordinary diligence in thecarriage of goods will su2ce

PC @ underta'ing is a single transaction, not apart of the general business or occupation,

although involving the carriage of goods for afee /7 presumption of negligence applies –whosoever alleges damage to or deteriorationof the goods carried has the burden of provingthat the cause was the negligence of thecarrier.

Distinction between Common Carriers and Private CarriersCO33ON CARRIER PRI4ATE CARRIER

traordinary diligence in thevigilance over the goods theycarry

7rdinary diligence in thecarriage of goods will su2ce

$n case of loss, destruction, ordeterioration of goods, theyare presumed to have been atfault or to have acted

negligently burden of provingotherwise rests on them

/o such presumption appliesto private carriers, forwhosoever alleges damage toor deterioration n of the goods

carried has the onus of proving that the cause was thenegligence of the carrier

Cannot stipulate that it iseempt from liability for thenegligence of its agents oremployees

4ay validly enter into suchstipulation

Factors to be considered whether a carrier is commonprivate:• Daw applicable

o Common Civil Codeo Private contract

• Eiligence re!uiredo Common etraordinary diligenceo Private diligence of a good father of a family

• +urden of proof in relation to negligenceo Common – the carriero Private – on the party having a claim against

the carrier

Case: Planters Products! Inc. vs. CA6 $t is therefore imperative that a public carrier shall

remain as such, notwithstanding the charter of thewhole or portion of a vessel by one or more persons,provided the charter is limited to the ship only, as inthe case of a time6charter or voyage6charter. $t is onlywhen the charter includes both the vessel and its crewthat a common carrier becomes private

True Test of Common Carrier $s the carriage of passengers orgoods, provided it has space, for all who opt to avail themselvesof its transportation service for a fee

Generally, private carriage is underta'en by spcial agreementand the carrier does not hold hiself out to carry goods for thegeneral public

Case: "stela Crisostomo vs. CA and Caravan #ravel and #oursInternational

6 +y de3nition, a contract of carriage is one whereby acertain person or association of persons obligatethemselves to transport person, thing or new from oneplace to another for a 3ed price

6 $t is obvious from the above de3nition that respondentis not an entity engaged in the business of transporting

either passengers or goods and is therefore, neither aprivate nor a common carrier. $ts covenant with itscustomers is simply to ma'e travel arrangements intheir behalf.

6 $t is in this sense that the contract between the partiesin this case was an ordinary one for services and notone of carriage it is thus not bound under the law toobserve etraordinary diligence in the performance oits obligation.

CO33ON CARRIERS 5s. TOWAGE6 ARRASTRE ANDSTE4EDORING

T7a$e6 # vessel is hired to bring another vessel to anothe

place6 e.g. a tugboat may be hired by CC to bring the vesse

to a port (operator of tugboat not CC)6 in maritime law0 towing for the mere purpose o

epediting her voyage without reference to anycircumstances of danger

Arrastre 6 #rrastre operatorFs functions has nothing to do with

the trade and business of navigation nor to the use oroperation of vessels

6 -ervices are not maritime6 unctions of arrastre operator0

o %eceive, handle, care for, and deliver al

merchandise imported and eported, upon opassing over Government6owned wharves andpiers in the port

o %ecord or chec' all merchandise which maybe delivered to said port ant shipside

o urnish light, and water services and otheincidental service in order to underta'e itsarrastre service

6 -uch service is in face, no dierent from those of adepositary or warehouseman

Ste5e+ri!$6 involves the loading and unloading of coastwise

vessels calling at the port.555 Common carriers are public utilities, impressed with publicinterest and concern subect to regulation by the state.

GO4ERNING LAWS rea+ s8&&ar" f r89es ! #a$e ; f 0<

Article 1766 (Civil Code). In all matters not re$ulatedb% this Code! the ri$hts and obli$ations o& commoncarriers shall be $overned b% the Code o& Commerce andb% special laws.

NATURE OF BUSINESS6 Common Carriers eercise a sort of public o2ce6 Conse!uently, common carriers are subect to

regulation by the -tate

REGISTERED OWNER RULEREGISTRATION LAWS6 Governed by the Dand Transportation and

Tra2c Code and administered by the Dand Transportation 72ce6 The registered owner of a vehicle is liable fro

any damage caused by the negligent operation of thevehicle although the same was already sold oconveyed to another person at the time of theaccident.

6 The registered owner is liable to the inuredparty subect to his right of recourse against thetransferee or the buyer

6 #pplicable in case of lease6 %egistered owner not liable if vehicle was

ta'en form him without his 'nowledge and consent.



=0 what is the purpose of such law?#0 The main aim of motor vehicle registration is to identify theowner so that if any accident happens, or that any damage orinury is caused by the vehicle on the public highways,responsibility therefor can be 3ed on a de3nite individual – theregistered owner.

KABIT SSTE36 The Hregistered ownerI rule is applicable to

people involved on a =<a0it s"ste&> 6 arrangement whereby a person who has been

granted a certi3cate of public convenience allows otherpersons who own motor vehicles to operate them under hislicense, sometimes for a fee or percentage of the earnings666 contrary to public policy (thus A7$E and $/J$-T/T)

6 parties to the H'abit systemI cannot invo'ethe same as against each other either to enforce theirillegal agreement or to invo'e the same to escape liability666 #ari +e9ict r89e

6 having entered into an illegal contract, neithercan see' relief from the courts and each must bear theconse!uences of his acts

6 also applicable to aircrafts and vessels – basicrule that no person can operate a common carrier withoutsecuring a certi3cate of public convenience and necessity.

Case: Dizon vs. 'ctavio6 the primary factors considered in the granting of a

certi3cate of public convenience for the business of public transportation is the 3nancial capacity of theholder of the license, so that liabilities arising fromaccidents may be duly compensated

6 Thus, for the safety of passengers and the public whomay have been wronged and deceived through thebaneful 'abit system, the registered owner of thevehicle is not allowed to prove that another person hasbecome the owner so that he may be thereby relived of responsibility

C-APTER 2OBLIGATIONS OF T-E PARTIES

I. O09i$ati!s f t,e carrier

#. E*TK T7 #CCPT6 # common carrier granted a certi3cate of

public convenience is duty bound to accept passengersor cargo without any discrimination.

6 $t is illegal for domestic ship operators torefuse to accept or carry passengers or cargo without ust cause. (-ection 8L, %# M:MN)

/ote0 $n air tra!s#rtati!, passengers with con3rmed tic'etswho were not allowed to board are provided with deniedboarding compensation and priority boarding rules.

/o compensation for refusal if it is because of08. government re!uisition of the space:. substitution of e!uipment of lesser capacity when

re!uired by operational and or safety and1or othercauses beyond the control of the carrier, and

;. if arrangements have been made for the passenger tota'e another Oight in a comparable air transportationwhich will arrive not later than three hours after thetime of Oight on which the con3rmed space is held issupposed to arrive. (Civil #eronautics +oard conomic%egulation)

Grounds for Valid Refusal to Accept Goods

6 G%0 common carriers cannot lawfully declineto accept a particular class of goods

6 JC0 it appears that for some su2cient reasonthe discrimination against the tra2c in such goods isreasonable and necessary0

i. dangerous obects or substancesincluding dynamites and other eplosives

ii. goods are un3t for transportationiii. acceptance would result in

overloadingiv. contrabands or illegal goodsv. goods inurious to health

vi. goods will be eposed to untowarddanger li'e Oood, capture by enemies and the

li'evii. goods li'e livestoc' will be eposed

to diseasesviii. stri'ei. failure to tender goods on time

Case: Fisher v. (an$co6 factors in determining reasonable

discrimination include0i. suitability to the vessel for the

transportation of such productsii. reasonable possibility of danger o

disaster resulting from their transportation in theform and under the conditions in which they areoered for carriage and

iii. the general nature of the business

done by the carrier.

*) +azardous and Dan$erous ,ubstances6 Carrier not properly e!uipped to transport dangerous

chemicals or eplosives may validly refuse to acceptthe same for transport.

6 Those which are not authoried by the 4aritime$ndustry #uthority to carry such goods may also validlyrefuse the same for transport.

6 There must be a -pecial Permit to Carry from the4#%$/#. (accept only if the said cargoes are covered bythe necessary clearance from appropriate governmentagencies)

-) n/t &or #ransport 6 Carriers may refuse to accept goods that are un3t fo

transportation6 These goods may by nature be un3t for transportation

or are un3t because of improper pac'aging or defect intheir containers.

6 9owever, carriers may accept the goods and limit itsliability by stipulation.

$f by reason of well6founded suspicion of falsity in thedeclaration as to the contents of the pac'age carrier shoulddecide to eamine and investigate it in the presence owitnesses, with the shipper and consignee in attendance. $declaration of shipper is true, epenses occasioned by theeamination and of repac'ing the pac'ages shall be for theaccount of the carrier

ven if the cause of the loss, destruction or deterioration of thegoods should be caused by the character of the goods, or the

faulty nature of the pac'ing or of the containers, the commoncarrier must eercise due diligence to forestall or lessen theloss.

+. E*TK T7 ED$A% T9 G77E-• Time of Eelivery

6 >here a carrier has made an epress contract, the goodsmust be delivered within a speci3ed time otherwise he isliable for any delay (indemnity for damages).

6 $n the absence of any agreement, goods must be deliveredat its destination within a reasonable time (depending on



the attending circumstances, nature of the goods epecteddate of arrival in the +7D may be considered).

6 $n the absence of a special contract, a carrier is /7T aninsurer against delay in transportation of goods

• Conse!uences1ects of Eelay6 cusable delays in carriage suspend, but do not generally

terminate, the contract of carriage when the cause isremoved, the master must proceed with the voyage andma'e delivery.

6 Euring the detention or delay, vessel continues to be liableas a common carrier, not a warehouseman, and remains

duty bound to eercise etraordinary diligence.

Artic9e 1); 'NCC(. $f common carrier !e$9i$e!t9" +e9a"s intransporting the goods, a natural disaster shall not free it fromresponsibility.

Artic9e 1)) 'NCC(. $f common carrier delays , 7it,8t ?8stca8se, in transporting the goods or changes the stipulated orusual route, the contract limiting its liability cannot be availed of in case of the loss, destruction, or deterioration of the goods.

/ote0 read page Q: of boo' for other provisions.

(8) A0a!+!&e!t6 $n case of delay through the fault of the carrier, the

consignee may refuse to accept the goods or may

leave the goods in the hands of the carrier. $t must becommunicated to the carrier in writing.6 This right must be eercised between the time of delay

and before the arrival of the goods at its destination.6 The carrier must pay the full value of the goods as if

they had been lost or mislaid.

/ote0 $f abandonment is not made, indemni3cation for thelosses and damages by reason of the delay cannot eceed thecurrent price which the goods would have on the day and at theplace they are to be delivered.

The value of the goods which the carrier must pay in case of loss or misplacement shall be that what is declared in the bill of lading.

Consignee must not defer the payment of the epenses andtransportation charges of the goods otherwise carrier maydemand the udicial sale of the goods.

Case: Ma$ellan M&$. Mar0etin$ Corp. vs. CA6 #bandonment may also be made by virtue of

stipulation or agreement between parties

(:) Ri$,ts f Passe!$ers i! Case f De9a"6 #s to the rights and duties of the parties strictly arising

out of delay, the Civil Code is silent. 9owever, the Codeof Commerce provides for such a situation0

ARTICLE @. $n case a voyage already begun should beinterrupted, the passengers shall be obliged to pay the fare in

proportion to the distance covered, without right to recover forlosses and damages if the interruption is due to frt8it8se5e!t f frce &a?e8re, but with a right to indemnity if theinterruption should have been ca8se+ 0" t,e ca#tai!ec98si5e9". $f the interruption should be caused by thedisability of the vessel and a passenger should agree to awaitthe repairs, he may not be re!uired to pay any increased priceof passage, but his living epenses during the stay shall be forhis own account./ote0 the carrier is liable for any loss or damage, including anypecuniary loss or loss of pro3t, which the passenger may havesuered by reason thereof.

$n case the vessel is not able to depart on time and the delay isunreasonable, the passenger may opt to have his1her tic'eimmediately refunded without any refund service fee from theauthoried issuing1tic'eting o2ce.

• >here and to >hom Eelivereda. Place – Goods should be delivered to the consignee in

the place agreed upon by the parties.

The shipper may change the consignment of the goods providedthat at the time of ordering the change of the consignee the bil

of lading signed by the carrier be returned to him, in echangefor another wherein the novation of the contract appears. Theepenses occasioned by the change shall be for the account ofthe shipper.

b. Consignee – Eelivery must generally be made to theowner or consignee or to someone lawfully authoriedby him to receive the goods for his account or to theholder of the negotiable instrument.

c. Eelay to Transport Passengers – # carrier is duty boundto transport the passenger with reasonable dispatch

ects of 1dela%ed and un/nished vo%a$e2 in inter6islandvessels0

• vessel cannot continue or complete her voyage for any

cause – carrier is under obligation to transport thepassenger to his1her destination at the epense of thecarrier including free meals and lodging before thepassenger is transported to his1her destination thepassenger may opt to have his1her tic'et refunded infull if the cause of the un3nished voyage is due to thenegligence of the carrier or to an amount that wilsu2ce to defray transportation cost at the shortestpossible route if the cause of the un3nished voyage isfortuitous event.

• vessel is delayed in arrival at the port of destination –free meals during mealtime

• delay in departure at the point of origin due to carrierFsnegligence fortuitous event 6 free meals duringmealtime carrier not obliged to serve free meals

• carrier is not obliged to inform passengers of sailing

schedule of the vessel

C. E*TK T7 J%C$- JT%#7%E$/#%K ED$G/C6 Goods should be delivered in the same condition tha

they were received and to transport the passengerswithout encountering any harm or loss.

6 %ead page QM6RS for provisions

ARTICLE 1). # common carrier is bound to carry thepassengers safely as far as human care and foresight canprovide, using the utmost diligence of very cautious personswith a due regard for all the circumstances. (Civil Code)

6 Presumption of /egligence6 Two conditions for the birth of the presumption o

negligence0

8. there eists a contract between the passenger or theshipper and the common carrier:. the loss, deterioration, inury or death too' place during

the eistence of the contract

Doctrine o& Pro3imate Cause – there is presumption onegligence$f the goods are lost, destroyed or deteriorated, common carriersare presumed to have acted negligently, unless they prove thatthey observed etraordinary diligence. $n case of death of orinuries to passengers, common carriers are presumed to havebeen at fault or to have acted negligently, unless they provethat they observed etraordinary diligence.



6 Euration of Euty0

(8) Carriage of Goods6 Eue diligence should be eercised the moment the

goods are delivered to the carrier.6 Goods are deemed delivered to the carrier when

the goods are ready for and have been placed inthe eclusive possession, custody and control of the carrier for the purpose of their immediatetransportation and the carrier has accepted them

ARTICLE 1)*@. The etraordinary responsibility of the commoncarrier lasts from the time the goods are unconditionally placedin the possession of, and received by the carrier fortransportation until the same are delivered, actually orconstructively, by the carrier to the consignee or to the personwho has a right to receive them

ARTICLE 1)*). The common carrierFs duty to observeetraordinary diligence over the goods remains in full force andeect even when they are temporarily unloaded or stored intransit, unless the shipper or owner has made use of the right of stoppage in transitu. (common carrier becomes awarehouseman – ordinary diligence)

ARTICLE 1)*. The etraordinary liability of the commoncarrier continues to be operative even during the time the goods

are stored in a warehouse of the carrier at the place if destination, until the consignee has been advised of the arrivalof the goods and has had reasonable opportunity thereafter toremove them or otherwise dispose of them.

(:) Carriage of Passengers

B" trai!s – the etraordinary responsibility of common carriercommences the moment the person who purchases the tic'et(or a Uto'enF or UcardF) from the carrier presents himself at theproper place and in a proper manner to be transported with abona 3de intent to ride the coach.

" 4ere purchase of a tic'et does not of itself create the relationof carrier and passenger but it is an element in the inception of the relation.

" # proper person who enters upon the carrierFs premises(station, tic'eting o2ce, or waiting room) with the intention of becoming a passenger will ordinarily be viewed as assuming thestatus of a passenger.

" 7ne who goes to the railroad station to in!uire as to thepossibility of securing passage on a freight train, which he'nows, by the rules of the company, is not allowed to carrypassengers, and to secure passage thereon if possible, is notentitled to the rights of a passenger but is a mere trespasser.

" 7ne who rides upon any part of the vehicle or conveyancewhich is unsuitable or dangerous, or which he 'nows is notintended for passengers, is not presumed to be a passenger.

" 7ne who secures free passage by fraud or stealth is precluded

from recovery for inuries sustained through the negligence of the carrier, for he has not assumed the status of a passenger.

" # person riding on a freight train, on a driverFs pass or similararrangement, to loo' after livestoc' being transported and asincident to such transportation is, generally regarded as apassenger for hire.

3tr 5e,ic9es 9i<e ?ee#!e"s a!+ 08ses are duty bound tostop their conveyances for a reasonable length of time in orderto aord passengers an opportunity to board and enter, andthey are liable for inuries suered by boarding passengersresulting from the sudden starting up or er'ing of their

conveyances while they do so. 7nce a public utility bus or eepney stops, it is ma'ing a continuous oer to bus riders.

Case: Dan$wa #ransportation Compan% vs. CA6 >hen the bus is not in motion there is no necessity for a

person who wants to ride the same to signal his intentionto board. # public utility bus, once it stops, is in eectma'ing a continuous oer to bus riders

6 The premature acceleration of the bus in this case was abreach of such duty

Case: 4a Mallorca vs. CA

6 Euty to eercise utmost diligence with respect topassengers will not ordinarily terminate until thepassenger has, after reaching his destination, safelyalighted from the carrierFs conveyance or had areasonable opportunity to leave the carriers premises#nd what is reasonable time or a reasonable delay withinthis rule is to be determined from all the circumstances.

Case: Aboitiz ,hippin$ Corporation vs. CA6 -ame ruling with 4a Mallorca vs. CA6 That reasonableness of time should be made to depend

on the attending circumstances of the case, such as the'ind of common carrier, the nature of its business, thecustoms of the place, and so forth, and thereforeprecludes a consideration of the time element per sewithout ta'ing into account such other factors

6 The primary factor to be considered is the eistence of a

reasonable cause as will ustify the presence of the victimon or near the petitionerFs vessel. >e believe there eistssuch a usti3able cause (baggage were left)

DEFENSES OF CO33ON CARRIERS

Artic9e 1)* 'N t,er +efe!se &a" 0e raise+: ec98si5er c9se+ 9ist(8. lood, storm, earth!ua'e, lightning, or other natura

disaster or calamity:. #ct of the public enemy in war, whether international or civi;. #ct or omission of the shipper or owner of the goods<. The character of the goods or defects in the pac'ing or in

the containersN. 7rder or act of competent public authorityL. ercise of etraordinary diligence

ortuitous vent – to be a valid defense must be established tobe the proimate cause of the loss

/ote0 -ince common carrier is presumed is to be negligent, ithas been observed that the E7CT%$/ of P%7J$4#T C#*- is$/#PPD$C#+D to a contract of carriage. The inured passenger orowner of goods need not prove causation to establish his case.

The absence of causal connection is only a matter of defense.

Re8isites f Frt8it8s E5e!t08. The cause of the unforeseen and the unepected

occurrence, or of the failure of the debtor to comply withhis obligation, must be independent of the human will

:. $t must be impossible to foresee the event whichconstitutes the caso fortuito, or if it can be foreseen, it

must be impossible to avoid;. The occurrence must be such as to render it impossible

for the debtor to ful3ll his obligation in a normal manner<. The obligor (debtor) must be free from any participation

in or the aggravation of the inury resulting to the creditor

$n order for the common carrier to be eempted fromresponsibility, the natural disaster must have been theproimate and only cause of the loss. 9owever, the commoncarrier must eercise due diligence to prevent or minimie lossbefore, during and after the occurrence of Oood, storm or othernatural disaster in order that the common carrier may be



eempted from liability for the loss, destruction, or deteriorationof the goods.

Fire – not considered as a natural calamity or disaster

Fire caused b% li$htnin$ – a natural calamity

+i5ac0in$ – does not fall under the categories of eemptingcauses the common carrier is presumed to be at fault or tohave acted negligently unless there is a proof of etraordinarydiligence on its part

Mechanical de&ects – damage or inury resulting frommechanical defects is not a damage or inury that was causedby fortuitous event carrier is liable to its passengers fordamages caused by mechanical defects of the conveyance(brea'age of a faulty drag6lin' spring, fracture of the vehicleFsright steering 'nuc'le, defective brea's)

6 7ne of the reason why carrier is made liable despitethe presence of mechanical defect is the absence of privity between the passenger and the manufacturer

Case: Juntilla v. Fontanar 6 HTire6blowoutsI was not considered as fortuitous event

although it was alleged that the tires were in goodcondition no evidence was presented to show that theevidence were due to adverse road conditions – the carriermust prove all angles.

6 The eplosion could have been caused by too much airpressure inected into the tires and the fact that the eepneywas overloaded and speeding at the time of the accident.

OT-ER IN4ALID DEFENSES8. Eamage to cargo due to EPLOSION of another cargo

– not attributable to peril of the seas or accidents of navigation.

:. Eamage by WOR3S a!+ RATS resulting to damage tocargoes – canFt be cited as an ecuse by the carrier.

;. Da&a$e 0" WATER through a port which had beenleft open or insu2ciently fastened on sailing.

<. Carrier cannot escape liabilities to third persons if damage was caused by BARRATR – where the masteror crew of the ship committed unlawful acts contrary totheir duties – includes theft and fraudulently runningthe ship ashore.

Cases08. Problem0 # carrier bus on its way to its destination

encountered an engine failure, thus, it has to berepaired for : days. #nd while in the repair shop, atyphoon came resulting to the spoilage of cargoes.#nswer0 # typhoon although a natural disaster, is not avalid defense if it is shown that it was not the onlycause of the loss. specially when the facts indicatethat the typhoon was foreseeable and could have beendetected through the eercise of reasonable care.Cargoes should have been secured while the bus wasbeing repaired for : days.

:. Problem0 # passenger told the driver that he hasvaluable items in his bag which was placed under his

feet and he as'ed the driver (to which he is seatednear) to watch for the bag while he is asleep.

(a) There have been incidents of throwing of stones atpassing vehicles in the /orth press >ay. >hilethe bus was traversing the super highway, a stonehurled from the overpass and hit the passengerresulting to inuries. Can the passenger hold thebus liable for damages?#nswer0 Kes. The incident was foreseeable due theprior incidents of stone hurling. The bus shouldhave eercised utmost diligence and employed

ade!uate precautionary measures to secure safetyof passengers since the incident was foreseeable. .97>A%, if the stone throwing was entirelyunforeseeable and the carrier eercised the utmostdiligence, then, the bus canFt be held liable./onetheless, the burden of proof is on the carrieto prove such eercise of diligence. $t is up to thecarrier to overthrow the presumption onegligence.$f the passenger decides to 3le a case, al thepassenger has to do is to prove that she was apassenger of the bus and that she suered inuries

while on board the bus.

(b) -upposing that there were armed men who stageda hold6up while the bus was speeding along thehighway. 7ne of them stole the passengerFs bagand wallet while pointing a gun him. $s the busliable?#nswer0 /o. 9and6carried luggages are governedby necessary deposit. +esides, theft with use oarms or through irresistible force is a force maeurewhich eempts carriers from liability.

;. 9i6ac'ing cannot eculpate the carrier from liability if iis shown that the employees of the carrier were notoverwhelmed by the hiac'ers and that there was noshowing of irresistible force. -ince, there were <

employers while there were only : hiac'ers and onlyone of them was armed with bladed weapon.7/ T9 7T9% 9#/E, a hiac'ing by ; armed men isan event which is considered to be beyond the controof the carrier. Thus, the carrier may be adudged fromliability if it can be proven that the hiac'ing wasunforeseeable.

Case: Philippine American 6eneral Insurance Co. vs. MC66 ven in cases where a natural disaster is the proimate

and only cause of the loss, a common carrier is stilre!uired to eercise due diligence to prevent ominimie loss before, during and after the occurrenceof the natural disaster, for it to be eempt from liabilityunder the law for the loss of the goods

Case: Pilapil vs. CA6 acts0 a bystander alongside national highway hurled a

stone at the left side of the bus, hitting petition abovehis left eye which resulted to partial loss of the lefteyeFs vision

6 -C0 # common carrier does not give its consent tobecome an insurer of any and all ris's to passengersand goods. $t merely underta'es to perform certainduties to the public as the law imposes, and holds itselliable for any breach thereof.

6 The law does not ma'e the carrier an insurer of theabsolute safety of its passengers

6 #rticle 8QL;0 A common carrier is responsible &orin5uries su7ered b% a passen$er on account o& thewill&ul acts or ne$li$ence o& other passen$ers or ostran$ers! i& the common carrier2s emplo%ees throu$hthe e3ercise o& the dili$ence o& a $ood &ather o& a

&amil% could have prevented or stopped the act oromission

o Clearly, a tort committed by a stranger whichcauses inury to a passenger does not accordthe latter a cause of action against the carrier The negligence for which a common carrier isheld responsible is the negligent omission bythe carrierFs employees to prevent the torfrom being committed when the same couldhave been foreseen and prevented by them

Case: Fran0lin 6acal vs. PA4



6 $t is therefore not enough that the event should nothave been foreseen or anticipated, as is commonlybelieved, but it must be one impossible to foresee or toavoid.

6 The mere di2culty to foresee the happening is not theimpossibility to foresee the same

PUBLIC ENE3

6 Presupposes a state of war and refers to the government of a foreign nation at war with the country to which the carrierbelongs, though not necessarily with that to which the

owner of the gods owes allegiance.6 Thieves, rioter, and insurrectionists are not included. They

are merely private depredators for whose acts a carrier isanswerable.

6 %ebels in insurrection against their own government aregenerally not embraced in the de3nition of public enemy.9owever, if the rebels hold a portion of territory, they havedeclared their impendence, cast o their allegiance and hasorganied armed hostility to the government, and theauthority of the latter is at the time overthrown, such anuprising may ta'e on the dignity of a civil war, and somatured and magni3ed, the parties are belligerent and areentitled to belligerent rights.

6 Eepredation by #irates (which are enemy of all civiliednation) ecuses the carrier from liability.

6 Common carriers may be eempted from responsibility only

if the act of the public enemy has been the proimate and only cause of the loss. 4oreover, due dili$ence must bee3ercised to prevent or at least minimi!e t"e loss#efore, durin$ and after t"e performance of t"e act of t"e pu#lic enem % in order that the carrier may beeempted from liability for the loss, destruction, ordeterioration of the goods.

I3PROPER PACKING

Character of the goods and defects in the pac'aging or in thecontainers are defenses available to the common carrier.-imilarly, the Carriage of Good by -ea #ct provides that carriershall not liable for0

8. >astage in bul' or weight or any damages arising formthe inherent defect, !uality or vice of goods

:. $nsu2ciency of pac'ing;. $nsu2ciency or inade!uacy of the mar's, or<. Datent defects no discoverable by due diligence.

9owever, /CC li'ewise provides0Art. 1)2. E5e! if t,e 9ss6 +estr8cti!6 r +eterirati!f t,e $+s s,89+ 0e ca8se+ 0" t,e c,aracter f t,e$+s6 r t,e fa89t" !at8re f t,e #ac<i!$ r t,ec!tai!ers6 t,e c&&! carrier &8st eercise +8e+i9i$e!ce t fresta99 r 9esse! t,e 9ss.

Thus, if the carrier accepted the $+s <!7i!$ t,e fact f i&#r#er #ac<i!$ r e5e! if t,e carrier +es !t <!708t t,e +efect 7as !!et,e9ess a##are!t 8#! r+i!ar"0ser5ati!, it is !t relived from liability for loss or inury togoods resulting therefrom.

Cases08. Problem0 # carrier 'nowing that some of a cargo of

sac's of rice had big holes and others had openings ust loosely tied with strings resulting to the spillage of rice during the trip. Thus, there was shortage in thedelivery of the cargoes. >hen sued due to theshortage, the carrier interposed a defense that it wasnot liable since the shortage was due to the defectivecondition of the sac's. Eecide.#nswer0 Carrier must still eercise etraordinarydiligence if the fact of improper pac'ing is 'nown to thecarrier or its servants, or apparent upon ordinaryobservation. $f the carrier accepted the cargo without

protests or eception notwithstanding such conditionhe is not relived of liability for damage resultingtherefrom. Apply Article 17%&.

ORDER OF PUBLIC AUT-ORIT

#rt. 8Q<;. $f through the order of public authority thegoods are seied or destroyed, the common carrier is noresponsible, #r5i+e+ sai+ #809ic a8t,rit" ,a+ #7er tiss8e r+er.

Cases0

8. Carrier was not ecused from liability since the order oan acting mayor was not considered as a valid order oa public authority. $t is re!uired that public authoritywho issued the order must be duly authoried to issuethe order.

:. Carriage of Goods by -ea #ct – provides that carrieshall not responsible for loss or damage resulting fromHarrest or restraint of princes, rulers, or people, oseiure under legal processI and from H!uarantinerestrictionsI.

DEFENSES IN CARRIAGE OF PASSENGERS

6 Primary defense of carrier is eercise f etrar+i!ar"+i9i$e!ce in transporting passengers. ven if there is afortuitous event, the carriers must also present proof of eercise

of etraordinary diligence.

Art. 1). C&&! carriers are 9ia09e fr t,e +eat, f ri!?8ries t #asse!$ers t,r8$, t,e !e$9i$e!ce r 7i99f8acts f t,e carrierHs e&#9"ees6 a9t,8$, s8c,e&#9"ees &a" ,a5e acte+ 0e"!+ t,e sc#e f t,eira8t,rit" r i! 5i9ati! f t,e r+ers f t,e c&&!carriers.T,e 9ia0i9it" +es !t cease e5e! 8#! #rf t,at t,e"eercise+ +i9i$e!ce i! t,e se9ecti! a!+ s8#er5isi! ft,eir e&#9"ees.

Art. 1)@*. Carrier is res#!si09e fr i!?8ries s8/ere+ 0" a#asse!$er ! acc8!t f t,e 7i99f89 acts r !e$9i$e!ce ft,er #asse!$ers r f stra!$ers , if t"e commoncarrier's employees t"rou$" t"e eercise of t"e dili$enceof a $ood fat"er of a family could "ave prevented orstopped t"e act or omission.

a. mployees6 Carrier is liable for the acts of its employees. $t canF

escape liability by claiming that it eercised duediligence in supervision and selection of its employees(unli'e in !uasi6delicts).

%easons for the rule08. *nderta'ing of the carrier re!uires that its passenge

that full measure of protection aorded by the eerciseof high degree of care prescribed by law, inter alia fromviolence and insults at the hands of strangers and otherpassengers, but above all, from the acts of the carrierFsown servants.

:. The liability of the carrier for the servantFs violation o

duty to performance of his contract to safely transportthe passenger, delegating therewith the duty oprotecting the passenger with utmost care prescribedby law.

;. #s between the carrier and the passenger, the formemust bear the ris' of wrongful acts or negligence of thecarrierFs employees against passenger, since it, and notthe passenger, has the power to select and removethem.

8ationale: 'n the other hand! i& the ship owner derives pro/ts &rom the results o& the choice o& the captain andthe crew! when the choice turns out success&ul! it is



also 5ust that he should su7er the conse9uences o& anunsuccess&ul appointment! b% application o& the rule o& natural law contained in the partidas that he whoen5o%s the bene/ts derived &rom a thin$ must li0ewisesu7er the losses that ensue there&rom

6 /ote0 >illful acts of the employees include theft

b. 7ther Passengers and Third Persons

6 >ith respect to acts of strangers and other passengersresulting in inury to a passenger, the availability of

such defense is also subect to the eercise of a carrierof due diligence to prevent or stop the act or omission.

6 /egligence of the carrier need not be the sole cause of the damage or inury to the passenger or the goods. The carrier would still be liable even if the contractualbreach concurs with the negligent act or omission of another person.

%emember0 the negligence of the other river in a collision is/7T a preudicial !uestion to an action against the carrierFscompany.

Artic9e 1). Common carriers are liable for the death of orinuries to passenger through the negligence or willful acts of the formerFs employees, although such employees may haveacted beyond the scope of their authority or in violation of the

orders of the common carriers.

PASSENGERHS BAGGAGES The term baggage has been de3ned to include whatever

articles a passenger usually ta'es with him for his ownpersonal use, comfort and convenience

%ules that are applicable to goods that are being shippedare also applicable to baggage delivered to the custody of the carrier. #rts. 8Q;;. 8Q;< and 8Q;L of Civil Code areapplicable.

9owever, if the luggage was hand6carried, #rts. 8MMR,:SSS6:SS; shall apply.

Eistinction0 >1/ the baggage is in the personal custody of thepassenger. if yes, hand carried baggage if no, chec'ed6in baggage

Art. 1. T,e +e#sit f e/ects &a+e 0" t,e tra5e99ersi! ,te9s r i!!s s,a99 a9s 0e re$ar+e+ as !ecessar". T,e<ee#ers f ,te9s r i!!s s,a99 0e res#!si09e fr t,e& as+e#sitaries6 #r5i+e+ t,at !tice 7as $i5e! t t,e&6 rt t,eir e&#9"ees6 f t,e e/ects 0r8$,t 0" t,e $8estsa!+ t,at6 ! t,e #art f t,e 9atter6 t,e" ta<e t,e#reca8ti!s 7,ic, sai+ ,te9<ee#ers r t,eir s80stit8tesa+5ise+ re9ati5e t t,e care a!+ 5i$i9a!ce f t,eir e/ects.'1)*(Art. 2;;;. T,e res#!si0i9it" referre+ t i! t,e t7#rece+i!$ artic9es s,a99 i!c98+e t,e 9ss f6 r i!?8r" tt,e #ers!a9 #r#ert" f t,e $8ests ca8se+ 0" t,e

ser5a!ts r e&#9"ees f t,e <ee#ers f ,te9s r i!!s as7e99 as stra!$ers 08t !t t,at 7,ic, &a" #rcee+ fr&a!" frce &a?e8re. T,e fact t,at tra5e99ers arec!strai!e+ t re9" ! t,e 5i$i9a!ce f t,e <ee#er f t,e,te9s r i!!s s,a99 0e c!si+ere+ i! +eter&i!i!$ t,e+e$ree f care re8ire+ f ,i&. '1)a(

Art. 2;;1. T,e act f a t,ief r r00er6 7, ,as e!tere+t,e ,te9 is !t +ee&e+ frce &a?e8re6 8!9ess it is +!e7it, t,e 8se f ar&s r t,r8$, a! irresisti09e frce. '!(

Art. 2;;2. T,e ,te9<ee#er is !t 9ia09e frc&#e!sati! if t,e 9ss is +8e t t,e acts f t,e $8est,is fa&i9"6 ser5a!ts r 5isitrs6 r if t,e 9ss arises fr&t,e c,aracter f t,e t,i!$s 0r8$,t i!t t,e ,te9. '!(

Art. 2;;*. T,e ,te9<ee#er ca!!t free ,i&se9f fr&res#!si0i9it" 0" #sti!$ !tices t t,e e/ect t,at ,e is!t 9ia09e fr t,e artic9es 0r8$,t 0" t,e $8est. A!"sti#89ati! 0et7ee! t,e ,te9<ee#er a!+ t,e $8est7,ere0" t,e res#!si0i9it" f t,e fr&er as set frt, i!artic9es 1 t 2;;1 is s8##resse+ r +i&i!is,e+ s,a90e 5i+. '!(

Cases08. Eespite the fact that the carrier gave notice that it shal

not be liable for baggage brought in by passengers, thecarrier is still liable for lost hand6carried luggage sinceit is governed by rules on necessary deposits. *nder#rt. :SSSS, the responsibility of the depositary includesthe loss of property of the guest caused by strangersbut not that which may proceed from force maeure4oreover, article :SS8 considers theft as force maeureif it is done with use of arms or through irresistibleforce.

:. ven if the passenger did not declare his baggage nopay its charges contrary to the regulations of the buscompany, the carrier is still liable in case of loss of the

baggage. -ince, it has the duty to eerciseetraordinary diligence over the baggage that wasturned over to the carrier or placed in the baggagecompartment of the bus. The non6payment of thecharges is immaterial as long as the baggage wasreceived by the carrier for transportation.

II. OBLIGATIONS OF S-IPPER6 CONSIGNEE a!+PASSENGER

#. /GD$G/C 7 -9$PP% 7% P#--/G%

6 The obligation to eercise due diligence is not limited tothe carrier. The shipper is obliged to eercise duediligence in avoiding damage or inury.

6 /evertheless, contributory negligence on the part othe shipper1 passenger 789+ !9" &iti$ate t,ecarrierHs 9ia0i9it" it is not a total ecuse.

6 9owever, if the negligence of the shipper1 passenger isthe proimate and only cause of the loss, then, thecarrier shall not be liable. The carrier &a" 5erc&et,e #res8&#ti! f !e$9i$e!ce and may be able toprove that it eercised etraordinary diligence inhandling the goods or in transporting the passenger.

The carrier may be able to prove that the only cause of theloss of the goods is any of the following08. ailure of the shipper to disclose the nature of the

goods:. $mproper mar'ing or direction as to the destination;. $mproper loading when he assumes such responsibility.

The shipper must li'ewise see to it that the goods are

properly pac'ed otherwise, liability of the carrier mayeither be mitigated or barred depending on thecircumstances.

Art. 1)1. If t,e s,i##er r 7!er &ere9" c!tri08te+t t,e 9ss6 +estr8cti! r +eterirati! f t,e $+st,e #ri&ate ca8se t,eref 0ei!$ t,e !e$9i$e!ce ft,e c&&! carrier6 t,e 9atter s,a99 0e 9ia09e i!+a&a$es6 7,ic, ,7e5er6 s,a99 0e e8ita09" re+8ce+.

Art. 1)@1. T,e #asse!$er &8st 0ser5e t,e +i9i$e!ce f a$+ fat,er f a fa&i9" t a5i+ i!?8r" t ,i&se9f.



Art. 1)@2. T,e c!tri08tr" !e$9i$e!ce f t,e #asse!$er+es !t 0ar rec5er" f +a&a$es fr ,is +eat, ri!?8ries6 if t,e #ri&ate ca8se t,eref is t,e !e$9i$e!cef t,e c&&! carrier6 08t t,e a&8!t f +a&a$es s,a990e e8ita09" re+8ce+.

a. Last C9ear C,a!ce

# negligent carrier is liable to a negligent passenger in placinghimself in peril, if the carrier was aware of the passengerFs peril,or should have been aware of it in the reasonable eercise of

due care, had in fact an opportunity later than that of thepassenger to avoid an accident.

Dast clear chance applies in a suit between the owners anddrivers of colliding vehicles. $t does not arise where a passengerdemands responsibility from the carrier to enforce itscontractual obligations. or it would be ine!uitable to eemptthe negligent driver of the carrier and its owner on the groundthat the other driver was li'ewise guilty of negligence.

0. Ass8&#ti! f Ris<

Passengers must ta'e such ris's incident to the mode of travel.Carriers are not insurers of the lives of their passengers. Thus, inair travel, adverse weather conditions or etreme climatic

changes are some of the perils involved in air travel, theconse!uence of which the passenger must assume or epect.

9owever, there is no assumption of ris' in a case wherein apassenger boarded a carrier that was 3lled to capacity. The actof the passenger in ta'ing the etension chair does not amountto implied assumption of ris'.

/ote0 there is also no assumption of ris' by the mere fact thatthe carrier posted notices against such liability

Pr09e&0 #lthough, there is a sign in the bus that says0 Hdo nottal' to the driver while the bus is in motion, otherwise, thecompany would not assume responsibility for any accident0./onetheless, the passengers dared the driver to race withanother bus, as the bus speeds up in the attempt to overta'ethe other bus, it failed to slow down. #s a result, the bus turnsturtle causing the death and inuries to passengers. $s the buscompany liable?A!s7er0 Kes. The bus company is obligated to eercise utmostdiligence in carrying passengers. This liability cannot beeliminated or limited by simply posting notices. The passengercannot be said to have assumed the ris' of being inured whenhe urged the driver to accept the dare. #t most, the passengerscan only be said to be guilty of contributory negligence whichwould mitigate the liability of the driver, since the proimatecause of the accident was the driverFs willful and rec'less act inrunning the race with the other bus.

Case: Cesar Isaac vs. A.4. Ammen #ransportation Co! Inc.6 >here a carrierFs employee is confronted with a sudden

emergency, the fact that he is obliged to act !uic'ly

and without a chance for deliberation must be ta'eninto account, and he is not led to the same degree of care that he would otherwise be re!uired to eercise inthe absence of such emergency but must eercise onlysuch care as any ordinary prudent person wouldeercise under li'e circumstances and conditions, andthe failure on his part to eercise the best udgment thecase renders possible does no establish lac' of careand s'ill on his part which renders the company liable.

Case: Compania Maritima vs. CA and ;icente Concepcion6 >hile the act of private respondent in furnishing

petitioner with an inaccurate with of the payloader

cannot successfully be used as an ecuse by petitioneto avoid liability to the damage thus caused, said actconstitutes a C7/T%$+*T7%K C$%C*4-T#/C to thedamage caused on the payloader, which mitigates theliability for damages of petitioner in accordance with#rticle 8Q<8.

Case: Philippine <ational 8ailwa%s vs. CA6 >hile petitioner failed to eercise etraordinary

diligence as re!uired by law, it appears that thedeceased was chargeable with contributory negligence.

6 -ince he opted to sit on the open platform between the

coaches of the train, he should have held tightly andtenaciously on the upright metal bar found at the sideof said platform to avoid falling o from the speedingtrain

+. %$G9T

a. A&8!t t 0e Pai+

The regulation of rates is founded upon the valid eercise of thePolice Power of the state in order to protect the public fromarbitrary and ecessive rates while maintaining the e2ciencyand !uality of services rendered. The 3ing of ust andreasonable rates involves a balancing of investor and theconsumer interest.

#lthough the consideration that should be paid to the carrier isstill subect to the agreement between parties, what can beagreed upon should not be beyond the maimum amount 3edby appropriate government agency.

0. W, 7i99 #a"

#lthough either of the shipper or the consignor may pay thefreight before or at time the goods are delivered to the carrierfor shipment, nonetheless, it is the consignor (whom thecontract of carriage is made) who is primarily liable for thepayment of freight whether or not he is the owner of the goods The obligation to pay is implied from the mere fact that theconsignor has placed the goods with the carrier for the purposeof transportation.

c. Ti&e t #a"

Code of Commerce provides that in the absence of anyagreement, the consignee who is supposed to pay must do sowithin :<6hours from the time of delivery.

Artic9e *). The consignees to whom the shipment wamade may not defer the payment of the epenses andtransportation charges of the goods they receive after the lapseof twenty6four hours following their delivery and in case odelay in this payment, the carrier may demand the udicial saleof the goods transported in an amount necessary to cover thecost of transportation and the epenses incurred.

'1( Carria$e f Passe!$ers 0" Sea

>ith respect to carriage of goods by sea, the tic'ets are

purchased in advance. Carriers are not supposed to allowpassengers without tic'ets 666 the carrier is bound to observe aH/o Tic'et, /o +oarding PolicyI. The carrier shall collect1 inspectthe passengerFs tic'et within one hour from vesselFs departureas not to disrupt resting or sleeping passengers.

$f the vessel is not able to depart on time and the delay isunreasonable, the passenger may opt to have his1 her tic'etrefunded without refund service fee.Eelayed voyage means Hlate departure of the vessel from itsport of origin and1 or late arrival of the vessel to its port ofdestinationI. *nreasonable delay means Hthe period of time thathas lapsed without ust cause and is solely attributable to the



carrier which has preudiced the transportation of the passengerand1 or cargoes to their port of destination.

# passenger who failed to board the vessel can refund orrevalidate the tic'et subect to surcharges. Re5a9i+ati! meansHthe accreditation of the tic'et that is not used and intended tobe used for another voyage.

'2( CarrierHs Lie!

$f consignor or the consignee fails to pay the consideration forthe transportation of goods, the carrier may eercise his lien in

accordance with #rt. ;QN of Code of Commerce0

#%T$CD ;QN. The goods transported shall be especially boundto answer for the cost of transportation and for the epensesand fees incurred for them during their conveyance and until themoment of their delivery. This special right shall prescribe eight days after the deliveryhas been made, and once prescribed, the carrier shall have noother action than that corresponding to him as an ordinarycreditor.

DE3URRAGE

Eemurrage is the compensation provided for the contract of areightment for the detention of the vessel beyond the timeagreed on for loading and unloading. $t is the claim for damages

for failure to accept delivery. $n broad sense, very improperdetention of a vessel may be considered a demurrage. Technically, liability for demurrage eists only when epresslystipulated in the contract.

*sing the term in broader sense, damages in the nature of demurrage are recoverable for a breach of the implied obligationto load or unload the cargo with reasonable dispatch, but onlyby the party to whom the duty is owed and only against on whois a party to the shipping contract. /otice of arrival of vessels orconveyances, or their placement for purposes of unloading isoften a condition precedent to the right to collect demurragecharges.

C-APTER *ETRAORDINAR DILIGENCE

I. RATIONALE# common carrier is bound to carry the passengers

safely as far a human care and foresight provide, using theutmost diligence of very cautious persons, with due regard forall circumstances.

traordinary diligence0 Calculated to protect thepassengers from the tragic mishaps that fre!uently occur inconnection with rapid modern transportation.

II. -OW DUT IS CO3PLIED WIT-6 There is no hard and fast rule in the eercise of

etraordinary diligence6 Common carrier binds itself to carry the passengers

safely as far as human care and foresight can provide,using the utmost diligence of a very cautious person,

with due regard for all the circumstances.6 The duty even etends to the members of the crew or

complement operating the carrier

Case: =apalaran >us 4ines vs. Coronado6 $f common carriers carefully observed the statutory

standard of etraordinary diligence in respect of theirown passengers, they cannot help but simultaneouslybene3t pedestrians and the owners and passengers of other vehicles who are e!ually entitled to the safe andconvenient use of our roads and highways

# reasonable man or a good father of a family in the position ofthe carrier must eercise etraordinary diligence in theperformance of his contractual obligation.

6 Generally, what should be determines is whether or noa reasonable man, eercising etraordinary diligencecould have foreseen and prevented the damage or lossthat occurred.

III. EFFECT OF STIPULATION

#. G77E-6 The parties cannot stipulate that the carrier will /7T

eercise #/K diligence in the custody of goods6 The law allows a stipulation whereby the carrier wil

eercise a degree of diligence which is less thanetraordinary with respect to goods.

Art. *?@@. A stipulation between the common carrierand the shipper owner limitin$ the liabilit% o& the&ormer &or the loss! destruction! or deterioration o& the$oods to a de$ree less than e3traordinar% dili$enceshall be valid! provided it be:

*. In writin$! si$ned b% the shipperowner-. ,upported b% a valuable consideration other thanthe service rendered b% the common carrier <ote#%picall% &are&rei$ht) andB. 8easonable! 5ust and contrar% to public polic%.

+. P#--/G%-6 There can be no stipulation lessening the utmos

diligence that is owed to passengers.

Art. *??. #he responsibilit% o& a common carrier &orthe sa&et% o& passen$ers as re9uired in Arts. *?BB and*? cannot be dispensed with or lessened b%stipulation! b% the postin$ o& notices! b% statements ontic0ets! or otherwise. <ote: Absolute e3traordinar% atall times.)

6ratuitous passen$er – # stipulation limiting the commoncarrierFs liability for negligence is valid, but not for willful acts ogross negligence. The reduction of fare does not ustify anylimitation.

Case: 4ara vs. ;alencia6 Eiligence owed to accommodation passengers is only

ordinary diligence6 9owever, this case is not controlling with respect to

common carriers because the defendant in the saidcase was not a common carrier

I4. ETRAORDINAR DILIGENCE IN CARRIAGE B SEA

#. -#>7%T9$/--

a. >arranty of -eaworthiness of -hip6 This is the 3rst step that should be underta'en6 traordinary diligence re!uires that the ship

which will transport the passengers and goods isseaworthy.

6 -eaworthiness of the vessel is i&#9ie+9"warranted.

6 The carrier shall be bound before and at thebeginning of the voyage to eercise due diligenceto ma'e the ship seaworthy.

b. /o duty to in!uire6 +ecause of the implied warranty of seaworthiness

shippers of goods, when transacting with commoncarriers, are not epected to in!uire into thevessels seaworthiness, genuineness of its licensesand compliance with all maritime laws. Passengers



cannot be epected to in!uire everytime theyboard a common carrier, whether the carrierpossesses the necessary papers or that all thecarrierFs employees are !uali3ed.

6 $t is the carrier that carries such burden of provingthat the ship is seaworthy.

6 -u2cient evidence must be submitted and thepresentation of certi3cates of seaworthiness is notsu2cient to overcome the presumption of negligence.

c. 4eaning of -eaworthiness

6 # vessel must have such degree of 3tness whichan owner who is eercising etraordinary diligencewould re!uire his vessel to have at thecommencement of the voyage, having regard to allthe probable circumstances of it. This includes3tness of the vessel itself to withstand the rigors of voyage, 3tness of the vessel to store the cargoesand accommodate passengers to be transportedand that it is ade!uately e!uipped and properlymanned.

6 -eaworthiness is that strength, durability andengineering s'ill made a part of a shipFsconstruction and continued maintenance, togetherwith a competent and su2cient crew, which wouldwithstand the vicissitudes and dangers of theelements which might reasonably be epected or

encountered during her voyage without loss ordamage to her particular cargo

ample0 The carrier was able to establish that the ship itself was seaworthy because the records reveal that the vessel wasdry6doc'ed and inspected by the Phil. Coast Guard before its3rst destination.

# warranty of seaworthiness re!uires that it be properly laden,and provided with a competent master, a su2cient number of competent o2cers and seamen, and the re!uisiteappurtenances and e!uipment. The carrier shall be bound before and at the beginning of thevoyage to eercise due diligence to0

8. 4a'e the ship seaworthy:. Properly man, e!uip, and supply the ship;. 4a'e all parts of the ship in which goods are carried,3t and safe for their reception, carriage, andpreservation.

The carrier shall properly and carefully load, handle, stow, carry,'eep, care for, and discharge the goods carried.

/ote0 -eaworthiness is relative it its construction and itsapplication depends on the facts of a particular case (e. Dengthand nature of the voyage)

itness of t"e Vessel tself 6 $t is necessary that the vessel can be epected to meet

the normal haards of the ourney6 General Test of -eaworthiness0 >hether the ship and its

appurtenances are reasonably 3t to perform the serviceunderta'en.

T"e s"ip must #e *car$o+ort"y6 ven if the vessel was properly maintained and is free

from defect, the carrier must not accept the goods thatcannot properly be transported in the ship

6 The ship must be e2ciently strong and e!uipped tocarry the particular 'ind of cargo which she hascontracted to carry and her cargo must be so loadedthat it is safe for her to proceed on her voyage.

T"e vessel must #e ade-uately e-uipped and properlymanned .

6 7n top of regular maintenance and inspectionCaptains, masters or patrons of vessels must prove thes'ill, capacity, and !uali3cations necessary tocommand and direct the vessel.

6 $f the owner of a vessel desires to be the captainwithout having the legal !uali3cations, he shall limithimself to the 3nancial administration of the vessel andshall entrust the navigation to a !uali3ed person.

/ote0 $t is not an ecuse that the carrier cannot aord the

salaries of competent and licensed crew or that latter isunavailable.

Ade-uate -uipment >ith respect to vessels that carries passengers, the

4aritime $ndustry #uthority prescribes rules whichprovide for indispensable e!uipment and facilities

e. it doors, life boats, live vests

+. 7A%D7#E$/G

6 Euty to eercise due diligence li'ewise includes theduty to ta'e passengers or cargoes that are within thecarrying capacity of the vessel.

C. P%7P% -T7%#G

6 The vessel itself may be suitable for the cargo but thisis not enough because the cargo must also be properlystored.

Cargo must generally not be placed on dec'. The carrying ofdec' cargo raises the presumption of unseaworthiness unless itcan be shown that the dec' cargo will not interfere with theproper management of the ship.

E. /GD$G/C 7 C#PT#$/ #/E C%>

6 ailure on the part of the carrier to provide competencaptain and crew should be distinguished from thenegligence of the said captain and crew, because thelatter is covered by the Dimited Diability %ule (liability ofthe shipowner may be limited to the value of thevessel).

6 $f the negligence of the captain and crew can be tracedto the fact that they are really incompetent, the DimitedDiability %ule cannot be invo'ed because the shipownermay be deemed negligent.

Rules on passen$er safety 6 /egligence on the part of the captain and crew as wel

as the operator includes failure to comply with theregulation issued by the 4aritime $ndustry #uthority(4#%$/#) on the safety of the passengers

6 4emorandum Circular /o. 88: 0 passengers do nomerely contract for transportation because they havethe right to be treated by the carrier and its employeeswith 'indness, respect, courtesy and due consideration They are entitled to be protected against persona

conduct, inurious language, indignities and abusesfrom the said carrier and its employees

6 %ead 4emorandum Circular /o. 88<0 p. :S<

Case: Planters Products Inc. vs. CA6 The period during which private respondent was to

observe the degree of diligence re!uired of it as apublic carrier began from the time the cargo wasunconditionally placed in its charge after the vesselFsholds were duly inspected and passed scrutiny by theshipper, up to and until the vessel reached itsdestination and its hull was re6eamined by theconsignee, but prior to unloading



6 # ship owner is liable for damage to the cargo resultingfrom improper stowage 7/DK when the stowing si doneby stevedores employed by him, and therefore underhis control and supervision, not when the same is doneby the consignee or stevedores under the employ of the latter

E. DE4IATION AND TRANSS-IP3ENT

8. Eeviation6 $f there is an agreement between the shipper and the

carrier as to the road over which the conveyance is tobe made (subect to the approval by the 4aritime$ndustry #uthority), the carrier may not change theroute, unless it be by reason of force maeure. >ithoutthis cause, he shall be liable for all the losses which thegoods may suer, aside from paying the sum stipulatedfor that case.

6 >hen on account of the force maeure, the carrier hadto ta'e another route which resulted to an increase intransportation charges, he shall be reimbursed uponformal proof.

/ote0 >ith respect to carriers by sea, the routes are subect toapproval by 4#%$/# and the same cannot generally be changedwithout the authoriation from said administrative agency

:. Transshipment6 The act of ta'ing cargo out of one ship and loading itinto another to transfer goods from the vesselstipulated in the contract of areightment to anothervessel before the place of destination named in thecontract has been reached.

6 Transshipment of freight without legal ecuse is aviolation of the contract and subects the carrier toliability if the freight is lost even by a cause otherwiseecepted.

/ote0 there is transshipment whether or not the same person,3rm or entity owns the vessels (what matters is the actualphysical transfer of cargo from one vessel to another)

4. ETRAORDINAR DILIGENCE IN CARRIAGE B LAND

#. C7/E$T$7/ 7 A9$CD6 Common carriers that oer transportation by land are

similarly re!uired to ma'e sure that the vehicles thatthey are using are in good order and condition.

%ule on 4echanical Eefects – $f the carriers will replace certainparts of the motor vehicle, they are duty bound to ma'e surethat the parts that they are purchasing are not defective. 9ence,it is a long6standing rule that a carrier cannot escape liability byclaiming that the accident that resulted because of a defectivebrea' or tire is due to a fortuitous event. This is true even if itcan be established that the tire that was subect of a blow6out isbrand new. The duty to eercise etraordinary diligence re!uiresthe carrier to purchase and use vehicle parts that are notdefective.

+. T%#$C %*D-6 The carrier fails to eercise etraordinary diligence if it

will not comply with basic tra2c rules. The Civil Codeprovides for a presumption of negligence in case theaccident occurs while the operator of the motor vehicleis violating tra2c rules.

$n cases involving breach of contract of carriage, proof of violation of tra2c rules con3rms that the carrier failed toeercise etraordinary diligence.

Case: Mallari ,r and Jr vs. CA

6 The rule is settled that a driver abandoning his propelane for the purpose of overta'ing another vehicle in anordinary situation has the duty to see to it that the roadis clear and not to proceed if he cannot do so in safety

C. E*TK T7 $/-PCT6 There is no unbending duty to inspect each and every

pac'age or baggage that is being brought inside thebus or eepney. The carrier is duty bound to conductsuch inspection depending on the circumstances.

Case: <ocum vs. 4a$una #a%abas >us Compan%

6 >hile it is true the passengers of appellantFs bus shouldnot be made to suer for something over which theyhad no control, fairness demands that in measuring acommon carrierFs duty towards its passengersallowance must be given to the reliance that should bereposed on the sense of responsibility of all thepassengers in regard to their common safety.

6 $t is to be presumed that a passenger will not ta'e withhim anything dangerous to the lives and limbs of hisco6passengers not to spea' of his own.

6 /ot to be lightly considered is the right to privacy towhich each passenger is entitled

6 $n other words, in!uiry may be verbally made as to thenature of a passengerFs baggage when such is notoutwardly perceptible, but beyond this, constitutionaboundaries are already in danger of being transgressed

6 -C held that carrier has succeeded in rebutting thepresumption of negligence by showing that it haeercised etraordinary diligence for the safety of itspassenger, according to the circumstances of eachcase

/ote0 although overland transportation are not bound noempowered to ma'e an eamination on the contents opac'ages or bags particularly those hand carried by passengerssuch is dierent with regards to an airline company.

4I. ETRAORDINAR DILIGENCE IN CARRIAGE B AIR6 The aircraft must be in such a condition that it must be

able to withstand the rigors of Oight.

#irworthiness – #n aircraft, its engines propellers, and othecomponents and accessories, are of proper design andconstruction, and are safe for air navigation purposes, suchdesign and construction being consistent with acceptedengineering practice and in accordance with aerodynamic lawsand aircraft science.

Proof of airworthiness is not by itself su2cient to prove eerciseof etraordinary diligence.

Case: Japan Airlines vs. CA6 The fact that the Oight was cancelled due to fortuitous

event does not mean that the carrierFs duty alreadyended. The carrier is still obligated to loo' after theconvenience and comfort of the passenger

6 Thus the carrier was obligated to ma'e the necessaryarrangements to transport the passenger on the 3rstavailable Oight.

#. $/-PCT$7/6 $t is the duty of the carrier to ma'e in!uiry as to the

general nature of the articles shipped and of their valuebefore it consents to carry them and its failure to do socannot defeat the shipperFs right to recovery of fulvalue of the pac'age if lost, in the absence of showingof fraud or deceit on the part of the shipper.

>here a common carrier has reasonable ground to suspect thathe oered goods are of a dangerous character, the carrier hasthe right to 'now the character of such goods and to insistinspection, if reasonable and practical under the circumstances



as a condition of receiving and transporting such goods. To besubected to unusual search, other than the routinary inspectionprocedure customarily underta'en, there must eist proof thatwould ustify cause for apprehension that the baggage isdangerous as to warrant ehaustive inspection, or even refusalto accept carriage of the same.

Case: <orthwest Airlines vs. 4a%a6 The fact that the plainti was greatly inconvenienced

by the fact that his attachV case was subected tofurther inspection does not warrant imposition of liability because he was not singled out and

discriminated by the employees of the carrier6 Protection of passengers must ta'e precedence over

convenience6 /evertheless, the implementation of security measures

must be attended by basic courtesies

C-APTER BILL OF LADING

I. CONCEPTS6 DEFINITION AND KINDS

Bi99 f La+i!$ 'BOL(6 a written ac'nowledgement, signed by the master of a

vessel or other authoried agent of the carrier, that he

has received the described goods from the shipper, tobe transported on the epressed terms to be describedthe place of destination, and to be delivered to thedesignated consignees of the parties.

6 $t operates as a (8) %C$PT (:) as a C7/T%#CT (;) as aE7C*4/T 7 T$TD.

# +7D is !t !ecessar" fr t,e #erfecti! f a c!tract f carria$e. Thus, the obligation to eercise etraordinarydiligence by the carrier is still re!uired even if there is no bill of lading.

$n the absence of the bill of lading, disputes shall be determinedon the basis of the provisions in the /ew Civil Code andsuppletory by the Code of Commerce.

W$/E- of +$DD of D#E$/G0

8. Clean +illof Dading

Eoes not contain any notation indicatingany defect in the goods.

:. oul +ill of Dading

7ne that contains the abovementionednotation.

;. -pent +illof Dading

The goods are already delivered but the billof lading was not yet returned (upondelivery, the carrier is supposed to retrievethe covering bill of the goods)

<. Through+ill of Dading

$ssued by a carrier who is obliged to use thefacilities of other carriers as well as his ownfacilities for the purpose of transporting thegoods from the city of the seller to the cityof the buyer, which +7D is honored by thesecond and other interested carriers who

donFt issue their own +7D.N. 7n +oard+ill

6states that the goods have been receivedon board the vessel which is to carry thegoods.6apparently guarantees the certainty of shipping as well as the seaworthiness of thevessel to carry the goods.6basically means that the goods are alreadyinside the vessel

L. %eceivedfor-hipment +ill

6states that the goods have been receivedfor shipment with or without specifying thevessel by which the goods are to beshipped.6issued when conditions are not normal andthere is insu2ciency of shipping space.

Q. Custody+ill of Dading

The goods are already receied by the carrierbut the vessel indicated therein has not yetarrived in the port.

R. Port +ill of Dading

The vessel indicated in the +7D that willtransport the goods is already in the port.

/ote0 # party to a maritime contract would re!uire an on boardbill of lading because of its apparent guaranty of certainty ofshipping as well as the seaworthiness of the vessel which is tocarry the goods.

/ectivity of 026 upon its delivery to and acceptance by the shipper.6 The acceptance of the bill without dissent raises the

presumption that all the terms therein were brought tothe 'nowledge of the shipper and agreed to by himand in the absence of fraud or mista'e, he is stoppedthereafter from denying that he assented to suchclaims (whether he reads the bill or not)

T-E *FOLD NATURE OF T-E BILL OF LADING

6 The three fold nature of a bill of lading is obviouslyapplicable only to carriage of goods

6 #s receipt and document of title0 issued for goods6 #s contract0 applies to tic'ets issued to passengers

$. %C$PT6 #s comprehending all methods of transportation, a

+7D may be de3ned as a written ac'nowledgement ofthe receipt of goods and an agreement to transport andto deliver them at a speci3ed place to a person namedor on his order.

6 7ther terms, Hshipping receiptsI, Hforwarders receiptsIand Hreceipts for transportationI.

6 (-C) the designation however is not material, andneither is the form of the instrument. $f it contains anac'nowledgement by the carrier of the receipt of goods

for transportation it is, in legal eect a +7D.6 The issuance of a bill of lading carries the presumptionthat the goods were delivered to the carrier issuing thebill, for immediate shipment, and it is nowhere!uestioned that a bill of lading is prima facie evidenceof the receipt of the goods by the carrier

$$. C7/T%#CT6 $t epresses the terms and conditions of the agreemen

between the parties names the parties includesconsignees etc. $t is the law between the parties boundby its terms and conditions.

Contracts o& Adhesion6 $t is to be construed liberally in favor of the shipper who

adhered to such bill as it is a contract of adhesion. Theonly participation of the party is the signing of hisignature or his adhesion thereto.

6 The shipper or passenger is bound by the terms andconditions if there is no occasion to spea' oambiguities or obscurities

6 $f the words appear to be contrary to the evidenintention of the parties, the latter shall prevail over theformer

#%T. :< (/CC). $n all contractual property or other relationswhen one of the parties is at a disadvanatge on account of hismoral dependence, ignorance indigence, mental wea'ness



tender age and other handicap, the court must be vigilant forhis protection.

Parole "vidence 8ule6 +7D is covered by the parol evidence rule, that the

terms of the contract are conclusive upon the partiesand evidence aliunde is not admissible to vary orcontradict a complete enforceable agreement, subectto well de3ned eceptions

6 The mista'e contemplated as an eception to the parolevidence rule is one which is a mista'e of fact mutualto the parties.

6 /ote that if such is not raised inceptively in thecomplaint or in the answer, a party cannot later on bepermitted to introduce parol evidence thereon

>ill o& 4adin$ as "vidence6 The +7D is the legal evidence of the contract and the

entries thereof constitutes prima facie evidence of thecontract.

6 #ll the essential elements of a valid contract (cause,consent, obect) are present when such bill are issued.

$$$. #CT$7/#+D E7C*4/T1E7C*4/T 7 T$TD6 $n a contractual obligation, the bill of lading can be

categoried as an actionable document under the %ulesof Court. 9ence, the bill of lading must be properlypleaded either as causes of action or defenses

A8# *? <CC). A document o& title in which it isstated that the $oods re&erred to therein will bedelivered to the bearer or to the order o& an% personnamed in such document is a ne$otiable document o& title.

6 $f the document of title contains the re!uired words of negotiability to ma'e the instrument negotiable under#rticle 8NSQ of the /CC, the document remains to benegotiable even if the words Hnot negotiableI or nonnegotiable are places thereon

o a. +earer document6 negotiated by deliveryo b. 7rder document6 negotiated by

indorsement of the speci3ed person so named

6 ects of negotiation. /egotiation of the document hasthe eect of manual delivery so as to constitute thetransferee the owner of the goods.

BASIC STIPULATIONS6 Provided for in the Code of Commerce6 (for overland transportation, maritime commerce and

electronic documents, please refer to the tetboo' forthe codal pp. :S;6:8S)

PRO-IBITED AND LI3ITING STIPULATION

8. empting the carrier from any and all liability for lossor damage occasioned by its own negligence 6 $/A#D$Eas it is contrary to public policy.

:. Parties may stipulate that the diligence to be eercisedby the carrier for the carriage of goods be less than

etraordinary diligence if it is0a. in writing and signed by both partiesb. supported by a valuable consideration other

than the service rendered by the commoncarrier

c. the stipulation is ust, reasonable and notcontrary to law.

;. Providing an un!uali3ed limitation of such liability to anagreed valuation 6 $/A#D$E

<. Dimiting the liability of the carrier to an agreedvaluation unless the shipper declares a higher value

and pays a higher rate of freight6 A#D$E and/7%C#+D.

/ote0 the purpose of limiting stipulations in the bill of lading is toprotect th common carrier. -uch stipulation obliges theshipper1consignee to notify the common carrier of the amountthat the latter may be liable for in case of loss of the goods

%emember08. The parties cannot stipulate so as to totally eempt the

carrier from eercising any degree of diligencewhatsoever

:. The parties cannot stipulate that the common carrieshall eercise diligence less than the diligence of agood father of a family

RECO4ER OF DA3AGES FRO3 CARRIER FOR CARRIAGEOF GOODS:8. nter3island 6 if goods arrived in damaged condition 'Art*@@(0a. $f damage is apparent, the shipper must 3le a claim

immediately (it may be oral or written)b. $f damage is not apparent, he should 3le a claim within :<

hours from delivery. The 3ling of claim under either (8) or (:) is a condition

precedent for recovery. $f the claim is 3led, but the carrier refuses to pay0 enforcecarrierFs liability in court by 3ling a case0

a. within L year, if no bill of lading has been issued orb. within 8S years, if a bill of lading has been issued.

:. verseas –where goods arrived in a damaged condition froma foreign port to a Philippine port of entry0 'COGSA(a. upon discharge of goods, if the damage is apparent, claim

should be 3lled immediatelyb. if damage is not apparent, claim should be 3lled within ;

days from delivery.

iling of claim is not a condition precedent, but an action mustbe 3led against the carrier within a period of 8 year fromdischarge if there is no delivery, the one6year period starts torun from the day the vessel left port (in case of undelivered orlost cargo), or from delivery to the arrastre (in case of damagedcargo).>here there was delivery to the wrong person, the prescriptiveperiod is 8S years because there is a violation of contract, andthe carriage of goods by sea act does not apply to misdelivery.'A!$ 5. A&erica! SS A$e!cies '1 SCRA @*1(

CARRIAGE OF GOODS B SEA ACT 'C.A. N. @(

6 #pplies suppletorily to the Civil Code if the goods are tobe shipped form a foreign port to the Philippines

6 C7G-# is applicable in international maritimecommerce. $t can be applied in domestic seatransportation if agreed upon by the parties( paramount clause)

6 *nder the -ec. < (N), the liability limit is set at XNSS pepac'age unless the nature and value of such goods isdeclared by the shipper. This is deemed incorporatedin the bill of lading even if not mentioned in it 'Easter!

S,i##i!$ 5. IAC6 1; SCRA @*(.6 $f by agreement, another maimum amount than tha

mentioned may be 3ed provided that such maimumshall not be less than XNSS and in no event shall thecarrier be liable for more than the amount of damageactually sustained

/ote that #rt. 8Q<M of the /CC applies to inter6island trade.

4eanin$ of 5aca$e6 $f the goods are shipped in cartons, each carton is

considered a pac'age even if they are stored incontainer vans



6 >hen what ordinarily be considered pac'ages areshipped in a container supplied by the carrier and thenumber of such units is disclosed in the shippingdocuments, each of those units and not the containerconstitutes the pac'age.

Prescri#ti5e #eri+s

6 -uit for loss or damage to the cargo should be broughtwithin one year after0a. delivery of the goods orb. the date when the goods should be delivered.

'Sec. *J@(

The one6year prescriptive period is suspended by08. epress agreement of the parties 'U!i5ersa9 S,i##i!$

Li!es6 I!c. 5. IAC6 1 SCRA 1);(:. when an action is 3led in court until it is dismissed.

'Ste5e!s C. 5. Nr+e8tsc,er L9"+6 @ SCRA1;(

T"in$s to Remem#er8. #rticle 8QNQ provides that the responsibility of a

common carrier to eercise utmost diligence for thesafety of P#--/G%- C#//7T be dispensed with orlessened by stipulation or statement on tic'ets orotherwise

:. #rticle 8QNS of the Civil Code provides that a contract3ing the sum that may be recovered by the owner or

shipper for the loss, destruction, or deterioration of theG77E- is A#D$E, if it is %#-7/#+D and *-T underthe circumstances, and has been #$%DK #/E %DK#G%E *P7/

;. $t is unfair to deny the shipper the right to declare theactual value of his cargos and to recover such truevalue in case of loss or damage/ote0 it has been suggested that the signature of theshipper in the bill of lading with regards to thelimitation applies only to reduction of diligence and notto the stipulated amount to be paid.

<. $t is unust and contrary to public policy if the commoncarrierFs liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat,violence or force, is dispensed with or diminished

N. The common carrier may J4PT itself from liability if

he can prove that0a. 9e observed etraordinary diligenceb. The proimate and only cause of the incident

is a fortuitous event or force maeurec. The proimate and only cause of the loss is

the character of the goods or defects in thepac'ing or in the containers

d. The proimate and only cause of the loss isthe order or act of competent public authority

/ote0 to limit its liability or at least mitigate the same,the carrier can cite C7/T%$+*T7%K /GD$G/C of theplainti and the E7CT$%/ 7 #A7$E#+DC7/-=*/C-

Case: ,ea4and ,ervice Inc. vs. IAC6 Diability of a common carrier for loss of or damage to

goods transported by it under a contract of carriage isgoverned by the laws of the country of destination

6 C7G-# is applicable up to the 3nal port of destinationand that the fact that transshipment was made on aninterisland vessel did not remove the contract ofcarriage of goods from the operation of said #ct.

Case: Citadel 4ines Inc. vs. CA6 The duty of the consignee is to prove merely that the

goods were lost. Thereafter, the burden is shifted to thecarrier to prove that it has eercised the etraordinarydiligence re!uired by law. #nd, its etraordinaryresponsibility lasts from the times that goods are

unconditionally placed in the possession of, andreceived by the carrier for transportation until the sameare delivered, actually or constructively, by the carrierto the consignee or to the person who has the right toreceive them

Case: "verett ,teamship Corporation vs. CA6 Considering that the shipper did not declare a higher

valuation it had itself to blame for not complying withthe situations

6 The trial courtFs ratiocination that private respondentcould not have Hfairly and freelyI agreed to the limited

liability clause in the bill of lading because the saidconditions were printed in small letters does not ma'ethe bill of lading invalid

WARSAW CON4ENTION f 12

W-EN APPLICABLE:6 #pplies to all international transportation of person

baggage or goods performed by aircraft for hire.6 H$nternational transportationI means any

transportation in which the place of departure and theplace of destination are situated either0

o within the territories of two 9igh ContractingParties regardless of whether or not there be abrea' in the transportation or transshipmentor

o within the territory of a single 9ighContracting Party, if there is an agreedstopping place within a territory subect to thesovereignty, mandate or authority of anotherpower, even though that power is not a partyto the Convention.

Transportation to be performed by several successive air carriersshall be deemed to be one undivided transportation, if it hasbeen regarded by the parties as a single operation, whether ithas been agreed upon under the form of a single contract or of aseries of contracts, and it shall not lose its internationacharacter merely because one contract or a series of contractsis to be performed entirely within a territory subect to thesovereignty, suerainty, mandate, or authority of the same 9ighContracting Party. 'Art. 1(

NOTE: >arsaw prevails over the Civil Code, %ules of Courtand all laws in the Philippines since an international lawprevails over general law.

W-EN NOT APPLICABLE:1. $f there is willful misconduct on the part of the carrierFs

employees. The Convention does not regulate, muchless eempt, carrier from liability for damages foviolating the rights of its passengers under the contracof carriage 'PAL 5. CA6 2) SCRA **(. 666 if thedamage is similarly caused by any agent of the carrieracting within the scope of his employment

:. when it contradicts public policy;. if the re!uirements under the Convention are no

complied with.LIABILIT OF CARRIER FOR DA3AGES:

1. Eeath or inury of a passenger if the accident causing ittoo' place on board the aircraft or in the course of itsoperations 'Art. 1)(

:. Eestruction, loss or damage to any luggage or goods, iit too' place during the carriage 'Art. 1( and

;. Eelay in the transportation of passengers, luggage ogoods. 'Art. 1(

NOTE: The 9ague Protocol amended the >arsaw Convention byremoving the provision that if the airline too' all necessary stepsto avoid the damage, it could eculpate itself completely (#rt:S(8)). 'A9ita9ia 5. IAC6 12 SCRA (



Re&e&0er: The said provisions merely declare the carrierliable for damages in the enumerated cases if the conditionstherein speci3ed are present. /either said provisions nor othersin the aforementioned Convention regulate or eclude liabilityfor 7T9% +%#C9- of contract of carrier.

The Convention does not thus operate as an eclusiveenumeration of the instances of an airlineFs liability, or as anabsolute limit of the etent of that liability.

LI3IT OF LIABILIT

8. passen$ers 6 limited to :NS,SSS francs• ecept0 agreement to a higher limit

:. goods and chec0edin ba$$a$e 6 :NS francs1'g• ecept0 consigner declared its value and paid

a supplementary sum, carrier liable to notmore than the declared sum unless it provesthe sum is greater than its actual value.

;. handcarr% ba$$a$e limited to N,SSS francs1passenger

#n agreement relieving the carrier from liability or 3ing a lowerlimit is null and void. 'Art. 2*(Carrier not entitled to the foregoing limit if the damage iscaused by willful misconduct or default on its part. 'Art. 2(

Case: China Airlines vs. Daniel Chio0 6 The tic'et6issuing airline acts as principal in a contract

of carriage and is thus liable for the acts and theomissions of any errant carrier to which it may haveendorsed any sector of the entire, continuous trip.

Place o& Destination6 within the meaning of the >arsawConvention, is determined by the terms of the contract of carriage, or speci3cally the tic'et between the passenger andthe carrier. $t is the destination and not an agreed stoppingplace that controls for the purpose of ascertaining urisdictionunder the Convention. (Case: ,antos III vs. <orthwest 'rient

Airlines and CA)

ACTION FOR DA3AGES8. Condition precedent # written complaint must be made within0

6 ; days from receipt of baggage

6 Q days from receipt of goods6 in case of delay, 8< days from receipt of baggage1goods otherwise the action is barred ecept in case of fraud on thepart of the carrier. 'Art. 2@(:. Jurisdiction – governed by domestic law;. ;enue E at the option of the plainti0

a. court of domicile of the carrierb. court of its principal place of businessc. court where it has a place of business through which the

contract has been maded. court of the place of destination. 'Art. 2(

<. Prescriptive period – : years from0a. date of arrival at the destinationb. date of epected arrivalc. date on which the transportation stopped. 'Art. 2(

. 8ule in case o& various successive carriers!a. $n case of transportation of passengers – the action is 3led

only against the carrier in which the accident or delayoccurred unless there is an agreement whereby the 3rstcarrier assumed liability for the whole ourney.

b. $n case of transportation of baggage or goodsi. the consignor can 3le an action against the 3rst carrier

and the carrier in which the damage occurredii. the consignee can 3le an action against the last carrier

and the carrier in which the damage occurred. Thesecarriers are ointly and severally liable. 'Art. *;(

/ota +ene0 C7G-#1>#%-#> applies to foreign vessels orairplane or international travel

Code of Commerce applies to inter6island odomestic travel.

Bi99 f La+i!$ as Dc8&e!t f Tit9e

+ill of lading is a document of title under the Civil Code$t can be a negotiable document of title.

A. <e$otiabilit% 6 $t is negotiable if it is deliverable to the bearer, or to the ordeof any person named in such document. (#rt. 8NSQ, Civil Code)

a) "7ect o& ,tamp or <otation <on<e$otiableG the document remains to be negotiable even if the

words Hnot6negotiableI or Hnon6negotiableI are placedthereon. 6 #rt. 8N8S (Civil Code)

>. +ow <e$otiateda) +earer document (#rt. 8NSR and 8N88)6 may be negotiated be delivery

b) 'rder document (-ec. ;R, /$D and #rt. 8NSM, /CC)6 can only be negotiated through the indorsement of thespeci3ed person so named.6 such indorsement may be in blan', to bearer or to a speci3edperson.

>here a negotiable document of title is transferred for

value by delivery, and the endorsement of thetransferor is essential for negotiation, the transfereeac!uires a right against the transferor to compel him toendorse the document. (#rt. 8N8N, Civil Code)

C. "7ects o& <e$otiation6 has the eect of manual delivery so as to constitute thetransferee the owner of the goods6 results in the transfer of ownership because transfer odocument li'ewise transfers control over the goods6 refer to #rt. 8N8;

C,a#ter Acti!s a!+ Da&a$es i! Case f Breac,

Cause of action of a passenger and shipper0

a) against common carrier – based on culpa contractual orculpa a9uilianab) on the part of the driver – based on either culpa delictual orculpa a9uiliana

/ote0 The source of obligation based on culpa contractual isseparate and distinct from !uasi6delict.

Artic9e 1;* '9ast #ara$ra#,( 2 t,i!$s are a##are!t:1. That when an inury is caused by the negligence of a

servant or employee there instantly arises apresumption of law that there was negligence on thepart of the master or the employer either in theselection of the servant or employee, or in supervisionover him after the selection, or both.

2. That presumption is 5uris tantum and not 5uris et de 5ure (of law and of right), and conse!uently may be

rebutted

/ote however0 that #rticle 8MS; of the Civil Code is notapplicable to acts of negligence which constitute the breach ofcontract. $t is applicable only to culpa contractual.

The fundamental distinction between obligation of etracontractual and those which arise from contract, rests uponthe fact that in cases of non6contractual obligation it is thewrongful or negligent act or omission itself which createsthe vinculum uris, whereas in contractual relations thevinculum (bond) eists independently of the breach of the



voluntary duty assumed by the parties when entering intothe contractual relation.

CONCURRENT CAUSES OF ACTION6 There is one action but several causes of action6 The same act that breaches the contract may also

be tort

/ote0 The cause of action of a passenger or shipper against thecommon carrier can be culpa contractual or culpa a9uilianawhile the basis of liability on the part of the driver is either culpadelictual or culpa a9uiliana. The driver of the carrier is not liable

based on contract because there is /7 P%$A$TK of contractbetween him and the passenger or shipper.

$f the negligence of third persons concurs with the breach, theliability of the third person who was driving the vehicle and1orhis employer may be based on 9uasi delict . The driver alonemay be held criminally liable and civil liability may be imposedupon him based on delict. $n the latter case, the employer issubsidiarily liable.

%emember0 $t does not ma'e any dierence that the liability of one springs from the contract while that of the other arises from!uasi6delict. $f the owner and driver of the other vehicle are notimpleaded, the carrier may implead them by 3ling a third partycomplaint.

-olidary liability6 $n case the negligence of the carrierFs driver and a thirdperson concurs, the liability of the parties – carrier andhis driver, third person – is oint and several.

NOTICE OF CLAI3 AND PRESCRIPTI4E PERIOD

A. O5er9a!+ Tra!s#rtati! f G+s a!+ Cast7iseS,i##i!$a) >hen to 3le a claim with carrier

6 #rt. ;LL constitutes a condition precedent to theaccrual of a right of action against a carrier fordamage caused to the merchandise.

*nder #rt. ;LL of the Code of Commerce, an action fordamages is barred if the goods arrived in damaged

condition and no claim is 3led by the shipper within thefollowing period08. $mmediately if damage is apparent:. within twenty four (:<) hours from delivery if

damage is not apparent.

6 The period does not begin to run until the consigneehas received possession of the merchandise that hemay eercise over it the ordinary control pertinent toownership.

6 This provision applies even to transportation by seawithin the Phils. or coastwise shipping.

6 Eoes /7T apply to misdelivery of goods.

=0 >hy does it not apply to misdelivery of goods?#0 $n such cases (misdelivery), there can be no !uestion of claimfor damages suered by the goods while in transport, since the

claim for damages arises eclusively out of the failure to ma'edelivery.

Case: Monica 8oldan vs. 4im Ponzo and Co.6 #rticle ;LL of the Commercial Code is limited to cases

of claims for damage to goods actually turned over bythe carrier and received by the consignee.

+ut the period prescribed in #rt. ;LL may be subect tomodi3cation by agreement of the parties.

The validity of a contractual limitation of time for 3lingthe suit itself against a carrier shorter than the statutory

period thereof has generally been upheld as suchstipulation merely aects the shipperFs remedy and doesnot aect the liability of the carrier.

b) tinctive Prescription6 si (L) years if there is no written contract (bill o

lading)6 ten (8S) years if there is written contract

This rule li'ewise applies to carriage of passengers fodomestic transportation.

B. I!ter!ati!a9 Carria$e f G+s 0" Sea # claim must be 3led with the carrier within the following

period08. if the damage is apparent, the claim should be 3led

immediately upon discharge of the goods or:. within ; days from delivery, if damage is no

apparent.

iling of claim is not condition precedent. Thusregardless of whether the notice of loss or damage hasbeen given, the shipper can still bring an action to recovesaid loss or damage within one year after the delivery othe goods or the date when the goods should have beendelivered

a) Prescription

#ction for damages must be 3led within a period of one (8year from discharge of the goods.

The period is not suspended by an etra6udicial demand(>hy? Transportation of goods by sea should be decidedin as short a time as possible)

o Case: Dole Philippines Inc. vs. MaritimeCompan% o& the Philippines 6 the prescriptiveperiod is not tolled or interrupted by a writtenetra6udicial demand. #rticle 88NN is /7Tapplicable.

The period does not apply to conversion or misdelivery. The one (8) year period refers to loss of goods and not to

misdelivery.

6 Eamages arising from delay or late delivery are not thedamage or loss contemplated under the C7G-#. The

goods are not actually lost or damaged. The applicableperiod is ten (8S) years.

6 Case: Domin$o An$ vs. American ,teamship A$encies >hat is to be resolved – in order to determine

the applicability of the prescriptive period ofone year – is whether or not there was loss ofthe goods subect matter of the complaint.

Doss contemplates merely a situation whereno delivery at all was made by the shipper ofthe goods because the same had perishedgone out of commerce, or disappeared in sucha way that their eistence is un'nown or theycannot be recovered. (/ote0 $t is not loss dueto misdelivery or delivery to the wrongperson.)

This rule applies in collision cases. The one (8) yeaperiod starts not from the date of the collision but whenthe goods should have been delivered, had the cargoesbeen saved.

Case: Maritime A$encies and ,ervices Inc. vs. CA6 >hen there is two destination of delivery, the one yea

period should commence when the last item wasdelivered to the consignee.

I!s8ra!ce The insurer who is eercising its right of subrogation is

also bound by the one (8) year prescriptive period.



9owever, it does not apply to the claim against theinsurer for the insurance proceeds. The claim against theinsurer is based on contract that epires in ten (8S) years.

II. Rec5era09e Da&a$es Eamages – is the pecuniary compensation, recompense

or satisfaction for an inury sustained, or as otherwiseepressed, the pecuniary conse!uences which the lawimposes for the breach of some duty or violation of some rights.

A. Ete!t f Rec5er" 'C!tract8a9 Breac,: Art. 22;6

NCC( Carrier in good faith – is liable only to pay for the

damages that are the !at8ra9 a!+ #r0a09ec!se8e!ces f t,e 0reac, of the obligation andwhich the parties ,a5e fresee! r c89+ ,a5ereas!a09" fresee! at the time the obligation wasconstituted.

Carrier in bad faith or guilty of gross negligence – liablefor all damages, whether the same can be foreseen ornot. Those which may be reasonably attributed to thenon6performance of the obligation.

/ote0 The carrier who may be compelled to pay has the right of recourse against the employee who committed the negligent,willful or fraudulent act.

B. Ki!+s f Da&a$es

#rticle ::8L provides that no proof of pecuniary loss isnecessary in order that moral, nominal, temperate, li!uidated oreemplary damages may be adudicated. The assessment of such damages, ecept li!uidated ones, is left to the discretion of the court, according to the circumstances of each case.9owever, proof of pecuniary loss is necessary if actual orcompensatory damages are being claimed.

a( Act8a9 r C&#e!satr" Da&a$es6 only for the pecuniary loss suered by him as he has

duly proved6 not only the value of the loss suered, but also that of

the pro3ts which the obligee failed to obtain

6 : Winds08. the loss of what a person already possesses (daHoemer$ente)

:. the failure to receive as a bene3t that would havepertained to him (lucro cesante).

6 $t should be proven0 cannot be decided based on theconsideration of the udge not to be based on theperception, observation and consideration of the udge

6 >ith respect to restorative medical procedure0 to beentitled to actual damage, you need to have an JP%T T-T$47/K. >ithout such, you cannot recover.

Dama$es ma% be recovered0 #rt. ::SN (Civil Code)8) or loss or impairment of earning capacity in cases of temporary or permanent personal inury:) or inury to the plaintiFs business standing or commercialcredit.

Eamages cannot be presumed. The burden of proof restson the plainti who is claiming actual damages againstthe carrier.

• I! case f $+s – the plainti is entitled to their valueat the time of destruction. The award is the sum of moneywhich plainti would have to pay in the mar'et foridentical or essentially similar goods

• Fr #ers!a9 i!?8r" a!+ e5e! +eat, – the claimant isentitled to all medical epenses as well as other

reasonable epenses that he incurred to treat his or herrelativeFs inuries.

• I! case f +eat, – the plainti is entitled to the amountthat he spent during the wa'e and funeral of thedeceased. +ut, epenses after the burial are nocompensable.

• %ead #rt. ::SL (Civil Code)0 death caused by a crime or !uasi

delict shall be at least P;,SSS YThe amount of3ed damages is now PNS,SSS.SSZ

the defendant shall be liable for theloss of the earning capacity of the deceased

$f deceased is obliged to give supportrecipient may demand support from theperson causing the death for a period noteceeding 3ve years

-pouse, legitimate and illegitimatedescendant and descendants may demandmoral damages for mental anguish by reasonof the death of the deceased

1( Lss f ear!i!$ ca#acit"

/et arning Capacity @ Dife pectancy YGross #nnua$ncome less /ecessary Diving pensesZ

Dife epectancy – (:1; RS – age at death)

Net ear!i!$s – based on the gross income of the victimminus the necessary incidental living epenses which thevictim would have incurred if he were alive.

#mount of living epenses must be established. $n theabsence of proof, it is 3ed at 3fty (NS[) of the grossincome.

%ules on loss of earning apply when the breach of thecarrier resulted in the plaintiFs permanent incapacity.

2( Attr!e"Hs fees6 refer to #rt. ::SR of the Civil Code6 attorneyFs fees may be awarded in an action fo

breach of contract of carriage under par. 8,:,<,N,8Sand 88 of #rt. ::SR.

6 $f awarded eemplary, one is entitled to attorneyFsfees

6 : 'inds0 ordinary (compensation to the lawyer)etraordinary (indemnity as a form of damagesuered due to the breach of contract)

6 Kou can be awarded if you show that you were forcedto litigate and when you are entitled to eemplarydamage.

6 +ut this award is subect to the discretion of the cour(you cannot dictate – usually 8S[68N[)

*( I!terests 8:[ per annum – if it constitutes a loan or forbearance

of money L[ per annum – if it does not constitute loan o

forbearance of money 8:[ 6 for 3nal udgment

/ote0 /o interest, however, shall be adudged on unli!uidatedclaims for damages ecept when or until the demand can beestablished with reasonably certainty, the interest shall begin torun form the time the claim is made udicially or etraudicially.

0( 3ra9 Da&a$es6 $ncludes physical suering, mental anguish, fright, serious

aniety, besmirched reputation, wounded feelings, morashoc', social humiliation and similar inury.

6 Though incapable of pecuniary computation, moradamages may be recovered if they were the proimateresult of the defendantFs wrongful act or omission.



6 4oral damages are not awarded to punish the defendantbut to compensate the victim

6 4ay be recovered when there is death or there is malice orbad faith. (in transportation of passengers)

6 %efer to #rt. ::8M and :::S (enumerates cases when moraldamages may be awarded)

6 Generally, no moral damages may be awarded where thebreach of contract is not malicious.

6 4oral damages may be awarded if the contractualnegligence is considered gross negligence.

6 -ubect to three conditions in transportation law0o Eeatho 4alice or bad faith (must be done in the

performance of the contract of carriage)o Physical $nuries

6 %e!uisites0o There must be an inury, whether physical,

mental or psychological, clearly sustained bythe claimant

o There must be a culpable act or omissionfactually established

o The wrongful act or omission of the defendantis the proimate cause of the inury sustainedby the claimant

o The award of damages is predicated on any of the cases stated in #rt. ::8M.

6 actors to consider that could aect the amount to be

recovered0o The etent of humiliation may also determine

the amount of moral damages that can beawarded

o The etent of pain and suering li'ewisedetermines the award

o 72cial, political, social and 3nancial standingof the oended party and the business and3nancial position of the oender aect theamount of damages

o The age of the claimant.

c( N&i!a9 Da&a$es6 %efer to #rt. :::86:::; (Civil Code)6 $t is adudicated in order that the right of plainti may be

vindicated or recognied, and not for the purpose of

indemnifying the plainti for any loss suered by him.6 The assessment of nominal damages is left to the discretion

of the court according to the circumstances of the case.6 The award of nominal damages is also usti3ed in the

absence of competent proof of the speci3c amounts of actual damages suered.

6 Cannot co6eist with actual damages.6 There is no loss in nominal damages, unli'e in actual and

temperate damages, loss is present which is proven and notproven but rather ascertained by the court, respectively.

Case: Japan Airlines vs. CA The award of moral damages was usti3ed because #D

failed to ma'e necessary arrangement to transport theplaintis on the 3rst available connecting Oight to4anila.

7nly /ominal damages were awarded in the absence of proof of actual damages

+( Te&#erate r 3+erate Da&a$es6 4ore than nominal but less than compensatory damages.6 #rt. :::< provides0 may be recovered when the court 3nds that some

pecuniary loss has been suered but its amount cannot,from the nature of the case, be provided with certainty.

6 cannot co6eist with actual damages6 Ee3nite proof of pecuniary loss cannot be oered, although

the court is convinced that there has been such loss.

e( Li8i+ate+ Da&a$es6 Those agreed by the parties to a contract, to be paid in

case of breach thereof.6 7rdinarily, the court cannot change the amount o

li!uidated damages agreed upon by the parties9owever, #rt. :::Q of the Civil Code provides thali!uidated damages, whether intended as an indemnityor a penalty, shall be e!uitably reduced if they wereini!uitous or unconscionable.

f( Ee&#9ar" r Crrecti5e Da&a$es 8e9uisites &or the award o& e3emplar% dama$es:

8. They may be imposed by way of eample in addition tocompensatory damages, and only after the claimantFsright to them has been established.

:. They cannot be recovered as a matter of right, theidetermination depending upon the amount ocompensatory damages that may be awarded to theclaimant.

;. The act must be accompanied by bad faith or done inwanton, fraudulent, oppressive or malevolent manner.

/ote0 $f gross negligence warrants the award of eemplarydamages, with more reason is its imposition usti3ed when theact performed is deliberate, malicious and tainted with bad faith The rationale behind eemplary or corrective damage is toprovide an eample or correction from public good.

The award of eemplary damages in breach of contracof carriage is subect to the provisions under #rt. ::;:6::;N of the Civil Code.

Case: Air France vs. 8a&ael Carrascoso and CA6 The inference of bad faith is there it may be drawn

from the facts and circumstances set forth therein. Thecontract was averred to establish the relation betweenthe parties.

6 Ee3ciency in the complaint in stating that there wasbad faith, if any, was cured by the evidence.

Case: Philippine Airlines Inc. vs. CA6 4oral damages are recoverable in a breach of contract

of carriage where the air carrier thought its agentsacted fraudulently or in bad faith.

6 The contract of air carriage generates a relationattended with a public duty. /eglect or malfeasance ofthe carrierFs employees naturally could give ground foran action for damages.

3ARITI3E LAW

A. CONCEPTS 'C,a#ter @(

4aritime 2a+ – is the system of laws which particularly relatesto the aairs and business of the sea, to ships, their crews andnavigation and to marine conveyance of persons and property

G5er!i!$ La7s:8. /ew Civil Code – primary law on maritime commerce:. +oo' $$$ Code of Commerce – applied suppletorily

;. -pecial Dawsa. -alvage Daw (#ct /o. :L8L)b. Carriage of Goods by -ea #ct (C# /o. LN)c. -hip 4ortgage Eecree of 8MQR (PE 8N:8)

REAL AND -POT-ECAR NATURE OF 3ARITI3E LAW

Case: Philippine ,hippin$ Compan%! et al. vs. Francisco 6arcia;er$ara

• That which distinguishes the maritime from the civilaw and even from the mercantile law in general is thereal and "ypot"ecary nature of the former



• E5i+e!ce f t,is =rea9 = !at8re f &ariti&e 9a7:o The limitation of the liability of the agents to

the actual value of the vessel and the freightmoney

o The right to retain the cargo and the embargoand detention of the vessel even cases wherethe ordinary civil law would not allow morethan a personal action against the debtor orperson liable

• This repeals the civil law to such etent that, in certaincases where the mortgaged property is lost nopersonal action lies against the owner or agent of thevessel

• T7 reas!s 7," it is i&#ssi09e t + a7a" 7it,

t,ese #ri5i9e$es:o The ris' to which the thing is eposedo The real nature of maritime law, eclusively

real, according to which the liability of theparties is limited to a thing to which is atmercy of the waves

Case: Aboitiz ,hippin$ Corporation vs. 6eneral Accident Fire and4i&e Assurance Corporation! 4td.

• The real and "ypot"ecary nature of maritime la+

simply means that the liability of the carrier inconnection with losses related to maritime contracts iscon3ned to the vessel, which is hypothecated for suchobligations or which stands as the guaranty for theirsettlement

• P8r#se: $t was designed to oset such adverseconditions and to encourage people and entities toventure into maritime commerce despite the ris's andprohibitive cost of shipbuilding

• Thus, the liability of the vessel owner and agent arisingfrom the operation of such vessel were con3ned to the(8) vessel itself, (:) its e!uipment, (;) freight, (<) andinsurance if any, which limitation served to inducecapitalists into eectively wagering their resourcesagainst the consideration of the large pro3ts attainablein trade

8eal – similar to transactions over real property where to eectagainst third persons, registration is necessary

+%pothecar% – the liability of the owner of the value of thevessel is limited to the vessel itself

STATUTOR PRO4ISIONS

Artic9e *)6 )6 ; a!+ @* #r5i+es fr 9i&ite+9ia0i9it" f s,i#7!er. read &ull provision)

Art. *): civil liability incurred by the ship owner0 liabilitylimited to value of the vessel \ appurtenances \ freightageearned during voyage

Art. @*: vessel and cargo lost by reason of capture or wrec'0all rights shall be etinguished, both as regards the crew todemand any wages whatsoever, and as regards the ship agentto recover the advances made

$f a portion of the vessel or of the cargo, or both, shouldbe saved, the crew engaged on wages, including the captain,shall retain their rights on the salvage, so far as they go, on theremainder of the vessel as well on the amount of the freightageof the cargo saved but sailors who are engaged on shares shallnot have any right whatsoever on the salvage of the hull, butonly the portion of the freightage saved. $f they should haveworded to recover the remainder of the shipwrec'ed vessel theyshall be given from the amount of the salvage an award in

proportion of the eorts made and to the ris's encountered inorder to accomplish the salvage

Art. ): ship agent &a" eempt himself of the civil liabilitiesfor the indemnities in favor of third persons by abandoningvessel with all e!uipments and freight it earned during voyage

Art. ;: co6owners civilly liable in proportion to their interestand may eempt liability by abandonment of the part of thevessel belonging to him

2imited lia#ility rule – means that the liability of a shipowne

for damages in case of loss is limited to the value of his vessel.• /o vessel, no liability.• The civil liability for collision is merely co6eistent with

the interest in the vessel if there was total lossliability is also etinguished.

GR: $f the ship is totally lost, liability is etinguished. $f the shipor part thereof still eists, he can escape liability by abandoningthe vessel, its appurtenances and its freight.

Case: Monarch Insurance Co.! Inc. vs. Court o& Appeals• The total destruction of the vessel etinguishes

maritime liens because there are no longer any res towhich it can attach. This doctrine is based on the reaand hypothecary nature of maritime law.

/ote0 -ince the Civil Code contains no provision regulatingliability of shipowners or agents in the event of total loss ordestruction of the vessel, #rticle NRQ of the Code of Commercegoverns.

#rticle R;Q, NRQ and NMS of Code of Commerce cover only08. Diability to third persons:. #cts of the captain;. Collisions

ECEPTIONS TO T-E LI3ITED LIABILIT RULE8. >here the inury or death to a passenger is due eithe

to the fault of the shipowner, or to the concurringnegligence of the shipowner and the captain'NEGLIGENCE(

GR: -hipowner is liable for the negligence of thecaptain in collision cases liability is limited to value of the vessel

• Dimited liability rule applies if the captain or the crewcaused the damage or inury as when unseaworthinessof the vessel was caused by the negligence of thecaptain or crew during the voyage

• 9owever, if the failure to maintain the seaworthiness ofthe vessel can be ascribed to the shipowner alone orthe shipowner concurrently with the captain, then thelimited liability principle cannot be invo'ed 666 D$#+$D$TK7% T9 E#4#G- $- T7 T9 *DD JT/T (e7verloading, unseaworthiness even at the time odeparture)

:. >here the vessel is insured 'INSURANCE(

• Dimited liability rule does not apply to insurance claimsCase: ;as9uez vs. CA

6 The total loss of the vessel did not etinguish theliability of the carrierFs insrured

6 Eespite the loss of the vessel, therefore, itsinsurance answers for the damages that ashipowner or agent, may be held liable for byreason of the death of its passengers.



;. $n the wor'menFs compensation claims 'WORKERHSCO3PENSATION(

• The provisions of the Code of Commerce have no roomin the application of the >or'menFs Compensation #ctwhich see's to improve, and aims at the ameliorationof, the condition of laborers and employees

• $f an accident is compensable under the >or'menFsCompensation #ct, it must be compensated even whenthe wor'manFs right is not recognied by or is inconOict with other provisions of the Civil Code or of theCode of Commerce

• Diability under the >or'menFs compensation #ct, evenif the vessel was lost, is still enforceable against theemployer or shipowner.

<. penses for repairs and provisioning of the ship priorto the departure thereof

N. The vessel is not abandoned 'ABANDON3ENT(

• A#andonment of the vessel, its appurtenances andthe freightage is an indispensable re!uirement beforethe shipowner or ship agent can enoy the bene3ts of the limited liability rule. $f the carrier does not want toabandon the vessel, he is still liable even beyond thevalue of the vessel

• The only instance where abandonment is dispensedwith is when the vessel was entirely lost. $n such case,

the obligation is etinguished.• 7nly shipowner and ship agent can ma'e an

abandonment

PROCEDURE FOR ENFORCE3ENT

Case: Aboitiz ,hippin$ Corporation vs. 6eneral Accident Fire and4i&e Assurance Corporation! 4td.

6 %ights of the parties to claim against an agent or ownerof vessel may be compared to those of creditorsagainst an insolvent corporation whose assets are notenough to satisfy the totality of claims as against it.

6 Creditors must limit their recovery to what is left in thename of the corporation

6 $n the sin'ing of a vessel, the claimants or creditors arelimited in their recovery to the remaining value of

accessible assets. $n the case of lost vessel, theseassets are the insurance proceeds and pendingfreightage for the particular voyage

PROTESTS 6 is the written statement by the master of a vessel or

any authoried o2cer, attested by proper o2cer or anotary, to the eect that damages has been sueredby the ship

%e!uired under the following cases08. >hen the vessel ma'es an arrival under stress:. >here the vessel is shipwrec'ed;. >here the vessel has gone through a hurricane or the

captain believe that the cargo has suered damages or

averages<. 4aritime collisions

=0 when is it not re!uired?#0

8. when it does not fall under the four cases mentionedabove

:. when what is not involve is not a vessel

AD3IRALT MURISDICTION 'RTC(6 -ection 8M (;) of +P 8:M as amended by %# QLM8

(;) $n all actions in admiralty and maritime urisdiction where the demand or claim eceeds

;SS, SSS or in 4etro manila, where suchdemand or claim eceeds <SS,SSS.

6 if less 4TC

; concepts0 (they are the same)

1. rea9 a!+ ,"#t,ecar" 666 the supreme court did not eplainthe literal meaning of it.6 real0 refers to the ris' in maritime thatFs why there areprivileges for the shipowner. %is's are certain to happen6 hypothecary0 remember guaranty and collateral which is thevessel. or the particular voyage, the guaranty is the vesse

wherein if the vessel is lost, the shipowner no longer has theliability

2. 9i&ite+ 9ia0i9i9t" r89e 666 no literal eplanation6 limited0 it means that the liability is limited to the value of thevessel6liability0 assumption that the shipowner is liable for the losses There are no valid defenses that shipowner can invo'e to escapeliability. -ame concept with 8<QM. Eierence is that there is a3ed amount and there is !uali3cation6under the limited liability – no 3ed amount but amount iscon3ned on the vessel

The !uestion here0 is this a right to limit the liability?#0 admittedly it is a right that only shipowner can eercise

= how to eercise?#0 by way of pleading. +ut do not follow the way it was 3led inyangco. 9ere it was after udgment that the shipowner sought toabandon the ship to abandon liability+ut right now, it is a matter of procedure. To limit liability byabandoning the vessel $ it is a matter of procedure, you chec'the rules of civil procedure

=0 so when does shipowner inform the court the right to limitliability?#0 in a pleading and normally in an answer. $T will be raised as adefense. $f shipownver cannot allege, then that defense isdeemed waiver. Therefore you cannot see' abandonment after udgment was been rendered.

CA88

(an$co vs. 4acerna6 even captain was aware of the typhoon and the vessecapsied, -C upheld limited liability

Chua +e0 =on$6 there being no eceptions, the court upheld limited liability

#he more critical issue is on the "C"P#I'<, in the 448ule:8. wor'menFs compensation (#bueg case0 the repairs constituemaritime lient):. insurance coverage666 if the vessel is lost in the course ofvoyage and it is insured, is it automatic that the limited liabilityrule does not apply?#0 /o. the basis of supreme court (Aas!ue vs. C# 666 courtmentioned very little about insurance0 if the vessel is insuredthe insurance proceeds shall answer the credit)

$f the plainti was inured or heirs will 3le action from insurancecompany, and since shipowner cannot avail of limited liabilitythis is not advisable to the plainti because it has no privity ofcontract with the insurance company

=0 when does insurance argument come in?#0 only when the shipowner will bring the insurance company tothe case 3led by the plaintiBby way of third party complaint7nce insurance company is impleaded then this can be usedthat the owner cannot avail of limited liability.



+ut no shipowner will ever implead the insurance. +ecause theywill be the one who will claim the insurance without telling theplaintis. $n the case, there is no proof that the vessel is insured.ven if we 'now outside court, it is insured because in the court,there is no proof that the vessel is insured. Court will not identifyevidence not properly identi3ed and recoded in court.

=0 is it really an eception in its strict sense?#0 /ot really (C#P#/#-). >hat is the implication if you properlyinvo'e the DD%ule – the plainti cannot avail beyond the value of the vessel.$f not apply – plainti will recover more than the value of vessel

subect to rules on claiming of damages.

+ut !uestion, if vessel if covered with insurance, does this meanthat plainti can recover to the amount applied? /o, they canonly recover until the coverage of the insurance proceeds.

;. /egligence6 common carrier is presumed negligent if common carrier.9owever, this does not apply when there is an invocation onlimited liability. (in all cases ecept 47/#%C9 vs. C#) 666 the restof the case, the court has found negligence based on the factspresented. Kou cannot invo'e presumption of negligence so thatlimited liability rule will not apply.

4onarch ]66 -C0 since there is a presumption of negligence thenDD% will not apply. +ut -C also said that if DD% is invo'ed, the

initial burden to invo'e negligence shifts to the shipowner. Theyshould prove that there is no privity or 'nowledge on thenegligence of the ship captain.

=0 what is the relationship of Civil Code and DD%?#0 There is none. *nder 8QLL in all matters not provided by CivilCode, Code of Commerce or -pecial law will apply. There is norule in Civil Code in limited liability rule thus Code of Commercewill apply. (but in monarch, this was not applied666 all thenegligence was related to the absence of eercisingetraordinary diligence)

/ote0 that in the subse!uent cases, Consolidated of #boiticase0 there were 3ndings of facts of the negligence of #boiti. The point is when it comes to DD%, the Code of Commerce apply. Kou cannot invo'e presumption of negligence. $n order to refute,petitioner should prove negligence.%44+%0 P%7A T9 #CT- 7 /GD$G/C. /otpresumption.

4oadstar case6 the shipowner is aware of the typhoon6 insu2cient manning – negligent6 Captain playing mahong – there was negligence. +ut -C saidthat it was negligent because the shipowner did not prove that itwas the 3rst. -upposedly facts are established in courtproceedings and not on presumption.

*. ! 5esse96 ! 9ia0i9it"

6 they all mean one and the same such that the liability of theshipowner for the losses is con3ned to the value of the vesseland the freight, if any.

4#%$T$4 P%7T-T (< $/-T#/C-) – %=*$%E (D77W #T C7E7 C744%C and above notes)

$/-T#/C- >9/ $T E7- /7T #PPDK08. /7T based C7E 7 C744%C #/E +#-E 7/ =*#-$6ED$CT T9/ /7T 4#%$T$4 P%7T-T:. when what was is involve is not a vessel (Dope vs. Euruel0the motor boat is not a vessel under maritime law, it is onlyengaged in bay tra2c. # vessel in maritime law, should beengaged in transporting goods, persons, or both from one portto another)

(+ut to be sure0 you 3le maritime and allege such bahala dil'elangan co otherwise dismiss ang case)

-ince a vessel is a personal property, it can be mortgaged-ame concept with mortgage but dierent rule

6 PE 8N:80

=0 what about process of etra udicial foreclosure of vessel?#0 chattel mortgage law should govern

=0 what to remember under PE 8N:8?#0 Secti!

registration, non waiverSecti!1): priority of claims

=0 are there claims in maritime law over and above preferredmortgage?#0 yes. Doo' at section 8Q.

Case0 Poliand Industrial6 facts shows that the proceeds debted from hardwood was fothe modi3cation of the vessel (etended for vessels bene3t), forcrews wage

Characteristics o& maritime lien:8. maritime property:. travels with the property666 it cannot be etinguished;. enforceable in an action in rem666 action directed to the

property (crescent case0 ang gi 'iha ang vessel)

nder section --: persons authorize to procure repairspresumed):8. managing agent:. shipFs husband 666 agent of the vessel

I& mort$a$or does not pa%:8. udicial foreclosure – 3le actual case and implead the vesseas party defendant (served to captain or authoried person) youcan as' the court order to arrest the vessel.:. etraudicial6 the problem with vessel, mortgagee is not in possession of thevessel. $t is with the mortgagor, you cannot sell the property notin your possession.

$n PE 8N:8Bthe order of arrest can be as'edGrounds to discharge8. irregularly issued (mortgagee na ilad. >ala pa diay dueobligation:. posting of a bond to discharge..the bond to be posted isdouble the value of the claim.

4aritime lien on necessaries (N re!uisites) – brief yourselcresent petroleum case (loo' at boo' for re!uisites)

B. 4ESSELS 'C,a#ter )(

1. Ge!era9 C!ce#ts

# vessel or watercraft is de3ned under PE /o. <<Q asany barge, lighter, bul' carrier, passenger ship freightertan'er, container ship, 3shing boats, or other arti3cia

contrivance utiliing any source of motive power, designeduse or capable of being used as a means of transportationoperating either as a common carrier, including 3shingvessels covered under PE /o. <;,

Ece#t:8. Those owned and1or operated by the #rmed orces ofthe Philippines and by the oreign Government for its4ilitary Purpose.:. +ancas, sailboat and other waterbone contrivance of lessthan three tons capacity and not motoried.



Case: (u Con vs. Ipil6 The word vessel serves to designate every 'ind of craft

by whatever particular or technical name it may not be'nown or which nautical advancements may give it inthe future

6 The court held that a small vessel used for thetransportation of merchandise by sea and for thema'ing of voyages from one port to another of these$slands, e!uipped and victualed for this purpose by itsowner, is a vessel, within the purview of the Code of Commerce, for the determination of the character and

eect of the relations created between the owners of the merchandise laden on it and its owner

>hen the mercantile code spea's of vessels, they refersolely and eclusively to mercantile ships, as they do notinclude warships, and furthermore, they almost alwaysrefer to craft which are not accessory to another as in thecase of launches, lifeboats and etc.

urther, they refer eclusively to those which areengaged in the transportation of passengers and freightfrom one port to another or from one place to another

They refer to merchant vessels and in /7 >#K can theyor should they be understood as referring to pleasure craft,yachts, pontoons, health service and harbor police vessels,

etc.

-hips ought to be understood in the sense of vesselserving the purpose of maritime navigation or seagoingvessel, and not in the sense of vessel devoted to thenavigation of rivers

The third boo' of the code of commerce, dealing withmaritime commerce, was evidently intended to de3ne lawsrelative to merchant vessels and maritime shipping and asappears from said code, the vessel intended in that boo'are such run by masters having special training withelaborate apparatus of crew and e!uipment indicated inthe code.

7nly vessels engaged in what is ordinarily 'nown as

maritime commerce are within the provision of lawconferring limited liability on the owner in case of maritimedisaster.

7ther vessel of minor nature not engaged in maritimecommerce, such as river boats and those carryingpassengers from ship to shore, must be governed, as totheir liability to passenger, by the provision of the civil codeor other appropriate special provisions of law.

Case: Au$usto 4opez vs. Juan Duruelo! et. al6 The code of commerce are not applicable to small craft

which are only subect to administrative (customs)regulations in the matter of port service and in the3shing industry

6 7nly vessels engaged in what is ordinarily 'nown asmaritime commerce are within the provisions of lawconferring limited liability on the owner in case of maritime disaster

6 $t is therefore clear that a passenger on a boat li'e the ison, in the case before use, is not re!uired to ma'eprotest as a condition precedent to his right of actionfor the inury suered by him in the collision describedin the complaint – article R;N of the Code of Commercedoes not apply

CONSTRUCTION6 EUIP3ENT AND 3ANNING

The Construction, e!uipment and manning of vessel are subecto the rules issued by the 4aritime $ndustry #uthority (4#%$/#)and consistent with #rticle NQ< of the Code of Commerce

Artic9e ). +uilders of vessels may employ the materials andfollow, with respect to their construction and rigging, thesystems most suitable to their interests. -hip owners andseamen shall be subect to what the laws and regulations of thepublic administration on navigation, customs, health, safety ofvessels, and other similar matters.

PERSONAL PROPERT

Aessels are considered personal property under the Civil Daw The Code of Commerce li'ewise epressly ac'nowledges thespecial nature of a vessel as personal property.

Case: Philippine 8e/nin$ Compan% vs. Jar$ue6 Aessels are personal property although occasionally

referred to as a peculiar 'ind of personal property6 They are subect to mortgage agreeably to the

provisions of the Chattel 4ortgage Daw6 The only dierence between a chattel mortgage of a

vessel and a chattel mortgage of other personality isthat it is not now necessary for a chattel mortgage of avessel to be noted in the registry of the register ofdeeds, but it is essential that a record of documentsaecting the title to a vessel be entered in the record o

the Collector of Customs at the port of entry

Case: 8ubiso and Cali3to vs. 8ivera -hips or vessels, whether moved by steam or by sail

parta'e, to a certain etent, of the nature andconditions of real property, on account of their valueand importance in the world of commerce

Transfer of vessels should be in writing and must berecorded in the appropriate registry

2. OWNERS-IP

ACUISITION

• Aessel may be ac!uired or transferred by any meanrecognied by laws. Thus, vessel may be sold, donated andmay even be ac!uired through prescription.

• *nder the present laws, vessels that are under the urisdiction of 4#%$/# can be transferred only with noticeto said administrative agency.

A. Prescri#ti! 'C+e f C&&erce(

Artic9e )*. 4erchant vessels constitute property which may

be ac!uired and transferred by any of the means recognied by

law. The ac!uisition of a vessel must appear in a written

instrument, which shall not produce any eect with respect to

third persons if not inscribed in the registry of vessels.

The ownership of a vessel shall li'ewise be ac!uired by

possession in good faith, continued for three years, with a us

title duly recorded.

$n the absence of any of these re!uisites, continuous possession

for ten years shall be necessary in order to ac!uire ownership.

# captain may not ac!uire by prescription the vessel of which he

is in command.

ARTICLE ). Co6owners of vessels shall have the right orepurchase and redemption in sales made to strangers, but theymay eercise the same only within the nine days following the



inscription of the sale in the registry, and by depositing the priceat the same time.

B. Sa9e 'C+e f C&&erce(

Artic9e )@. $n the sale of a vessel it shall always be

understood as included the rigging, masts, stores and engine of

a streamer appurtenant thereto, which at the time belongs to

the vendor.

The arms, munitions of war, provisions and fuel shall not be

considered as included in the sale.

The vendor shall be under the obligation to deliver to the

purchaser a certi3ed copy of the record sheet of the vessel in

the registry up to the date of the sale.

Artic9e )). $f the alienation of the vessel should be made

while it is on a voyage, the freightage which it earns from the

time it receives its last cargo shall pertain entirely to the

purchaser, and the payment of the crew and other persons who

ma'e up its complement for the same voyage shall be for his

account.

$f the sale is made after the vessel has arrived at the port of its

destination, the freightage shall pertain to the vendor, and thepayment of the crew and other individuals who ma'e up its

complement shall be for his account, unless the contrary is

stipulated in either case.

Artic9e ). $f the vessel being on a voyage or in a foreign port,

its owner or owners should voluntarily alienate it, either to

ilipinos or to foreigners domiciled in the capital or in a port of

another country, the bill of sale shall be eecuted before the

consul of the %epublic of the Philippines at the port where it

terminates its voyage and said instrument shall produce no

eect with respect to third persons if it is not inscribed in the

registry of the consulate. The consul shall immediately forward a

true copy of the instrument of purchase and sale of the vessel to

the registry of vessels of the port where said vessel is inscribedand registered.

$n every case the alienation of the vessel must be made to

appear with a statement of whether the vendor receives its

price in whole or in part, or whether he preserves in whole or in

part any claim on said vessel. $n case the sale is made to a

ilipino, this fact shall be stated in the certi3cate of navigation.

>hen a vessel, being on a voyage, shall be rendered useless for

navigation, the captain shall apply to the competent udge on

court of the port of arrival, should it be in the Philippines and

should it be in a foreign country, to the consul of the %epublic of

the Philippines, should there be one, or, where there is none, to

the udge or court or to the local authority and the consul, or

the udge or court, shall order an eamination of the vessel to

be made.

$f the consignee or the insurer should reside at said port, or

should have representatives there, they must be cited in order

that they may ta'e part in the proceedings on behalf of whoever

may be concerned.

REGISTRATION

• Aessels are now registered through 4#%$/#. $t is a long

standing rule that the person who is the registered owne

of the vessel is presumed to be the owner of the vessel.

• $t is a settled rule that the sale or transfer of the vesse

is not binding on the third person unless the same is

registered.

S-IPS 3ANIFEST

• Aessels are re!uired to carry manifest coast6wise trade.

• # manifest is a declaration of the entire cargo. The

obect of a manifest is to furnish custom o2cers with list of

chec' against, to inform the revenue o2cers what goods

are being brought into a port of the country on a vessel.

• The re!uirement that a vessel must carry a manifest is

not complied with even if a bill of lading can be presented

# bill of lading is ust a declaration of a speci3c cargo rathe

than the entire cargo

• -ec MSL of the Tari and Custom Code provides that

Hmanifest shall be re!uired for cargo and passengers

transported from one place to another only when one or

both of such place is a port of entry.I

3ORTGAGE

• -ince the term personal property includes vessel, they

are subect to mortgage agreeably to the provisions of theChattel 4ortgage Daw.

• 4ortgage and other encumbrances over vessels are

governed by the provisions of presidential decree 8N:8

(-hip 4ortgage Eecree of 8MQR)

OT-ER CODE OF CO33ERCE PRO4ISIONS

The provisions of the Code of Commerce reproduced

hereunder are deemed modi3ed not only by the Civil Code

but also by special laws

SAFET REGULATIONS

7n ebruary :;, :SSS, the 4aritime $ndustry #uthority

directed all domestic shipowners and operators unde

4emorandum Circular /o. 8N< to strictly comply with

eisting -afety6%elated Policies, Guidelines, %ules and

%egulations

%ules include0 (read boo' page <RR6<RM)

4onitoring of compliances shall be underta'en by the

#uthority and its 4aritime %egional 72ces, together with

the needed coordination with the Philippine Coast Guard

The 4#%$/# shall have the power to inspect vessels and ale!uipment on board to ensure compliance with safety standards

C. PERSONS W-O TAKE PART IN 3ARITI3E CO33ERCE

$n sum, the following are persons who ta'e part in 4aritime

Commerce0

• -9$P7>/%- and -9$P #G/T-• C#PT#$/- and 4#-T%- 7 A--D-• 7$C%- and C%> 7 A--D-

S-IPOWNER 4. S-IP AGENT

S-IPOWNER – the person who is primarily liable for damagessustained in the operation of vessel.



Code of Commerce – places the primary responsibility on theowner of the vessel.(*ses the term naviero which has been construed to includeshipowner, ship agent and even the charterer who is consideredas owner pro hac vice.)

S-IP AGENT (Code of Commerce) – the person entrusted withprovisioning of the vessel, or who represents her in the portin which she happens to be. There is also the intentionunder the Code of Commerce to ma'e the ship agentsolidarily liable with the owner. The solidary liability appliesboth for breach of contract and etra6contractual

obligations such as tort. The ship agent, even though he isnot the owner, is liable in every way to the creditor forlosses and damages without preudice to his right againstthe owner, the vessel and its e!uipment and freight. +ut hisliability, however is subect to the D$4$TE D$#+$D$TK %*D(Chapter L of the #!uino boo').

CAPTAINS 4. 3ASTERS OF 4ESSELS

or purposes of 4aritime Commerce0 The words Hca#tai!I and H&asterI have the samemeaning both being chiefs or commanders of ships. Thus,the terms HcaptainI and HmasterI are used synonymouslyin the Code of Commerce.

3ARINA re$89ati!s:

4#-T% – the person having command of the ship. The sameterm is being used both for domestic trade and internationaltrade.

+7#T C#PT#$/ – a person authoried by the 4#%$/# to act aso2cer and1or in command of a boat1ship or has the!uali3cation1license to act as such.

* Disti!ct R9es a ca#tai! c&&!9" #erfr&s:'nter3rient 4aritime case(1. -e is a GENERAL AGENT OF T-E S-IPOWNER2. -e is a CO33ANDER a!+ TEC-NICAL DIRECTOR f

t,e 5esse9 most important role &or this has somethin$ todo with the operation and preservation o& the vessel durin$its vo%a$e and the protection o& the passen$ers! i& an%! andcrew and car$o)

*. -e is a REPRESENTATI4E OF T-E COUNTR 8!+er7,se a$ ,e !a5i$ates.

+ased on the 3rst aforementioned role, the captain is regardedas the G/%#D #G/T of the shipowner and as such, he0

a. 9as authority to sign bills of ladingb. Carry goods aboard and deal with the freight

earnedc. #gree upon rates and decide whether to ta'e

cargod. 9as legal authority to enter into contracts with

respect to the vessel and the trading of the vessel, subectto applicable limitations established by statute, contract orinstructions and regulations of the shipowner.

#ll aforementioned functions verily commits to the captain thegovernance, care, and management of the vessel. Clearly then,

the captain is vested with both 4#/#G4/T and $E*C$#%Kfunctions.

P7>%- #/E 7+D$G#T$7/- $/9%/T T7 T9 C#PT#$/ #/E T9 4#-T%0 (,ee Arts. **- o& the Code o& Commerce)

E$-C%T$7/ 7 C#PT#$/ #/E 4#-T%# shipFs captain must be accorded a %#-7/#+D

4#-*% 7 E$-C%T$7/#%K #*T97%$TK to decide what thesafety of the ship and of its crew and cargo speci3cally re!uireson a stipulated ocean voyage.

Pres8&#ti!0 # captain is 'nowledgeable as to the speci3cre!uirements of seaworthiness and the particular ris's andperils of the voyage he is to embar' upon.

A##9ica09e Pri!ci#9e0 The captain has control of #DDdepartments of service in the vessel, and reasonable discretionas to its navigation.

Basic Pri!ci#9e i! A+&ira9t" La70 $n navigating the vesselthe master must be left free to eercise his own best udgment.

Re8ire&e!ts f Safe Na5i$ati!0 The udgment and

discretion of the captain of a vessel may be con3ned within astraitac'et, even in this age of electronic communications.

PILOTAGE: W, is a #i9tQ

Maritime 4aw: a person duly !uali3ed, and licensed, to conducta vessel into or out of ports, or in certain waters.

>road sense: includes both '1( those whose duty it is to guidevessels into or out of ports, or in particular waters and '2( thoseentrusted with the navigation of vessels on the high seas.

6eneral understandin$: a person ta'en on board at a particularplace for the purpose of conducting a ship through a river, roador channel, or from a port.

CO3PULSOR PILOTAGE. $n compulsory pilotage, statepossessing harbors enacted laws or promulgated rules re!uiringvessels approaching their ports to ta'e on board pilots licensedunder local law. $n the Philippines, compulsory pilotage is beingimplemented in the Port of 4anila, the latter being within the4anila Pilotage Eistrict.

a. 4aster and Pilot (,ee Far "astern ,hippin$ case on pa$e - o& the A9uino boo0 &or the ,C discussion on theduties o& a pilot )

b. -hipowner and Pilot

GENERAL RULE0 the pilot is P%-7/#DDK D$#+D fodamages caused by his own negligence or default to the7>/%- of the vessel, and to T9$%E P#%T$- for damagessustained in a collision. -uch negligence of the pilot in theperformance of duty constitutes a 4#%$T$4 T7%T.

$n cases of COLLISION: the C7DD$E$/G A--D is primafacie responsible, hence, the burden of proof is upon theparty claiming bene3t of the eemption from liability. Thusit must be shown a2rmatively that the pilot was at faultand that there was no fault on the part of the o2cers orcrew, which might have been conducive to the damage The fact that the law compelled the master to ta'e the pilodoes not eonerate the vessel from liability. The inuredparty shall see' redress from the vessel. The owners of thevessel are responsible to the inured party for the acts othe pilot, and they must be left to recover the amount aswell as they can against him.

c. Pilot and his #ssociation

The fact that the pilot is a member of an association doesnot ma'e the association ointly and severally liable. #rticle:8RS of the Civil Code does not apply because there is /74PD7K%64PD7K %elationship.

>ell6established is the rule that pilot associations areimmune to vicarious liability for the tort of their members They are not the employer of their members and eerciseno control over them once they ta'e the helm of the vessel They are also not partnerships because the members donot function as agents for the association or for each other.PilotsF associations are also not liable for negligently



assuring the competence of their members because asP%7--$7/#D #--7C$#T$7/-, they made ! $8ara!teeof the professional conduct of their members to the generalpublic.

C7E 7 C744%C P%7A$-$7/- 7/ C#PT#$/- (,ee pa$e -Ko& the A9uino boo0 )

OFFICERS AND CREW OF 4ESSELS

C74PD4/T 7 # A--D (#rt. L<R, Code of Commerce)66 all the persons on board from the captain to the cabin boy,

necessary for the management, maneuvers, and service, andtherefore, it includes the C%>, the -#$D$/G 4#T-,/G$/%-, -T7W%-, and 7T9% 4PD7K- 7/ +7#%E nothaving speci3c designations but it -9#DD /7T $/CD*E thepassengers or the persons whom the vessel is transporting.

%G*D#T$7/ 7 4%C9#/T 4#%$/ P%7--$7/ The practice of marine profession is now governed by speciallaws and pertinent rules issued by the0

6 4#%$/#6 +7#%E 7 4#%$/ ECW 7$C%-6 +7#%E 7 4#%$/ /G$/% 7$C%-

4$/$4*4 -# 4#//$/G$t is not enough that the o2cers manning the merchantvessel have all the !uali3cations imposed by the Philippine

4erchant 4arine 72cers #ct and other special laws orregulations. $t is also re!uired that there is su2cientnumber of o2cers and crew that are serving in the vessel.(9uality and 9uantity )

-C*%$TK 7 T/*% The Dabor Code provisions apply to 7$C%- and C%> of merchant vessels in E74-T$C Trade or C7#-T>$--hipping. 9ence, matters concerning their dismissal ordisciplinary action must be in accordance with provisions of the Dabor Code. or o2cers and crew who are wor'ing inforeign vessels who are involved in overseas shipping, theremust be compliance with the applicable laws on overseasemployment as well as regulations issued by the Philippine7verseas mployment #dministration (P7#).

C7E 7 C744%C P%7A$-$7/- on -ailing 4ates, -econd4ate and 4arine ngineer, Crew, and Captain (,ee pa$es - o& the A9uino boo0 ).

Parties 666 those provided above plus seamen, other membersof the complement including the sto'ers (incharge of boilers)and supercargo (agent of the shippers who has authority to sellgoods while on voyage)

< maritime contracts8. charter parties:. +otomry;. %epondentia<. 4arine insurance (incorporated in the subect insurance)

ON PERSONS

S,i#7!er6 he has the privilege to invo'e limited liability rule6 what if with a charter party with charterer, who can

invo'e the DD%? /o urisprudence. Personal opinion of sir0 distinguish on the type of charter party. $f areightment, shipowner retains possession, commandand navigation of the vessel. $f bareboat it is vestedupon the charterer.

6 urisprudence0 ecept for registration, the charterer isthe temporary owner of the vessel. >ith this, thecharterer can invo'e DD% (this part no uris)

/ote0 there is not distinction of liability of shipowner and shipagent. They are civilly liable

There is a situation in maritime law that shipower and agenthey are held liable for the act or omission of a third personwhich is the ship captain or master.

#CT- of C#PT#$/Case0 Kucon case and -weetlines case

6 $n Kucon, money was entrusted to the captain and themoney was lost. -C concluded that shipowner wasliable for the lost because the captain failed to put up

measures while in custody of the money. $t may nottechnically to an act but may refer to admission butwould fall under the term acts

6 $n sweetlines, bound for catbalogan but the captainchose to allow the passengers to disembar' intacloban. This time, this is the act of captain. The -Cconcluded that the damages sustained by passengersbound for catbalogan are to shouldered by theshiponwer

$ndemnities in avor of ;rd person0 7TT# devt case sited in waltesmith case

6 $n 7TT# the owner of the pier was at the same time theowner of the goods. -C, because there was arelationship of owner of vessel and goods, then there ispresumption of negligence new civil code prevails

6 >alter smith case0 There was no relationship. 7wner oport and owner of goods are dierent. >hat wasapplied by court was the law on torts. /o presumptionof negligence. There should be proof of negligence. Theowner of vessel proved that he eercised ordinarydiligence (re!uired in ports). >hat was presented wasthe competence of shipcaptain. The shipowner provedordinary diligence in choosing the ship captain

Contracts entered into by shipcaptain or master

$nter orient case0 one role is they are the general agent of theshipowener. +ut if the obligation contracted by the captain doesnot enure to the bene3t of the vessel, then the shipowner hasno liability. There is no conOict bec. NRL obligations contractedby the shipper while 8QNM death or inury of passenger as resulof contract of carriage.

The case in point with the contracts entered into was the case>ing Wee. There were supplies delivered. -hipagent was said tobe liable. -C said at the time you were still an agent you wereliable but at the time agency was terminated you are no longeliable.

$f both -7 and -# are sued, being solidarily liable, the -# hasright of recourse over -7.

S,i#ca#tai! r &aster6 The dierence is with regard to the tonnage of the

vessel (higher0 captain lower0 master maor patronand minor patron)

6 The !uestion on the shipcaptain or master is theeercise of discretion

6 $nter orient case0 captain tayong did not want toproceed with the voyage from -ingapore to #frica bec7f lac' of oygen and acetylene. +ut because of orderof management he proceeded. 9e was then ordered torepatriated and then another captain too' his place. 9e3led for illegal dismissal. The issue was the discretioneercised by the captain. >7/ he has the discretionnot to proceed bec. 7f lac' of supply. -C said youshould emphasie reasonable discretion666 it is thecaptainFs duty

6 $nter 7rient0 triple roles of the captain 666 general agentcommander and technical manager, representative ocountry



S,i#ca#tai! a!+ ,ar0r #i9t6 9arbor pilot0 distinguish if voluntary or compulsory6 Case cited by -C on proper relationship of captain and

pilot. $n far eastern shipping case N:8 ;rd par 666 therare occasion when the master may and should interfereand even displace the pilot when he is obviouslyincapacitate and intoicated. (loo' at the boo')

6 $n this case, there is relevance on when the captainshould interfere. $f it is voluntary (pilot engaged byshipowner) 666 damages caused by pilot, shipowner isliable. $f compulsory, shipowner can escape liability

6 $f compulsory distinguish whether there wascircumstances that would re!uire the shipcaptain tointerfere with the ship pilot. $f there are circumstancesbut captain did not interfere then shipowner is liable. $f there are circumstances and captain interfere but stillthere is damage, the shipowner will not be liable.

6 Cebu Port #uthority 666 covered by compulsory pilotage

C,ief&ate r sai9i!$ &ate 't,e! t,ere are e!$i!eers(6 :SSR case, citing the article the code of commerce

specifying the functions of chiefmate being second incommand of the vessel Chiefmate is a managerialemployee (as provided in labor code 666 loss of trust andcon3dence

6Sea&a!

6 7n security of tenure0 distinguish E74-T$/ (laborcode) abroad (P7#).. there is a sta!+ar+ c!tract(poea prepared and drafted it and every seaman shallcomply with this 666 this is to protect 3lipino seamanwor'ing abroad) that will be signed by every seamanstipulating the security of tenure, repatriation, bene3ts,etc.

6 Eierence for abroad0 bigger income but contractual(after contract go home).. E74stic, you can be aregular employee in accordance with the labor code

6 ump-hip scenario0 it is a valid ground to terminate aseaman

-hipcaptain should conduct preliminary investigation for crimesconducted on board

D. C-ARTER PARTIES

C,arter Parties- a contract whereby the entire ship, or some of the

principal part, is let by the owner to a merchant or otherperson for a speci3ed time or use for the conveyance of goods, consideration of payment of freight

- it is a contract, hence, parties are free to stipulate uponsuch terms and conditions that would suit their purposessubect to the caveat that these should not be contrary tolaw or public policy

Parties8. Charterer6 merchant or a person who desire s to lease ship orvessel owned by another by transport of his or her goods forcommercial purposes or persons from one port to another:. -hipowner (-7)

KINDS:8. bareboat or demise charterer – shipowner leases to thecharterer the whole vessel, transferring to the charterer theentire command, possession and conse!uent control over thevesselFs navigation, including the master and the crew, whobecomes the chartererFs HservantsI6 charterer becomes an owner Hpro hac viceI

:. Contract of areightment – charterer hires the vessel only,either for a determinate period of time or for a single orconsecutive voyage, with the -7 providing for the provision of

the ship, wages of the master and crew, and epenses fomaintenance of the vessel

a. ti&e c,arter – vessel is leased to a charterer for a3ed period of timeb. 5"a$e c,arter – vessel is leased for a single orparticular voyage

REUISITES OF A 4ALID C-ARTER PART 8. consent of the contracting parties:. an eisting vessel which should be placed at the

disposition of the shipper;. the freight

<. compliance with re!uirements of art LN: of Code ocommerceAticle - o& the Code o& Commerce provides that thecharter part% shall contain! amon$ others! the name!surname! and domicile o& the charterer! and i& he statesthat he is actin$ b% commission! that o& the person &orwhose account he ma0es the contract.)

Ca9te 5. S89#ici Li!es There was a voyage charter collision between 4T Aecto(tan'er) and Eo^a Pa (owned by -ulpicio) breach of contract3led by the passengersFs heirs against -ulpicio ;d partycomplaint against registered owner of the tan'er includingCalte ( that they were negligent and in bad faith by not seeingto it that the tan'er was seaworthy)

$ssue0 >7/ charterer shall be liable under 4aritime Daw?

%uling0 Diability cannot be attached to Calte the charter did notaect the business of -ulpicio as a common carrier rights andresponsibilities of ownership still rested on the owner

P9a!ters Pr+8ct 5 CA- time charter Planters purchased fertiliers from the *-

voyage to the Philippines upon arrival, shortage in thecargo was discovered 3led actions against carrier frodamages ( breach of Contract) %TC ruled in favor othe Planters Ca reversed & absolved carrier as it wasconverted from common carrier to private

- %uling 0 $t cannot become a private carrier bareboatcharter can become a private carrier but in contract oareightment remains as common carrier ( actionbased on contract of carriage presumption onegligence ) carrier was able to rebut the presumptionof negligence ( result the inherent character of thefertiliers)

Cast7ise Li$,tera$e 5. CA- >7/ private carrier would convert to a common

carrier contract of areightment- %uling 0 reiterated Planters ruling but was not able to

rebut presumption of negligence did not eercise 7diligence ( hired unlicensed patron)

-&e I!s8ra!ce 5. A&erica! Stea&s,i#- case mostly used by the common carrier as defense

9ome $nsurance is subrogee (paid -4C of loss cargoshipped thru #merican -teamship no reference as towhat contract but there was a mention that it was in

areightment- %uling 0 Common Carrier underta'ing to carry specia

cargo (chartered to special person only ) become aprivate carrier and stipulation eempting owner fromliability for loss due to the negligence of its agents isvalid

-hipowner can appoint senior o2cers for the vessel even ibareboat contract. +ut technically it is an areightment. 4ostconOicts will occur if these various principles will have to bemied.



The whereabouts of the vessel is important to 'now the time forloading and unloading

Policy – marina$mplementing or enforcement 666 Coastguard

: conditions implied in charter party8. seaworthiness (Calte Phil Case) 666 it need not be written inthe charter party:. 666 loo' at boo' (ala 'aapas)

MURISDICTION OF AD3IRALT CASES

-depends on the urisdictional amount

- important element of the contract @ the subect matterof the contract (nature and character)

I!ter!ati!a9 -ar5ester 5 Ara$!6involves loss of cargo shipped from D# to 4anila cargo owner3led an action against common carrier6-C said liability of petitioner was predicated upon the contractof carriage admiralty would involve all maritime contract inwhatever form and wherever made3ac!+r" 5 De9$a+ Brt,ers

- Eelgado was an operator of a pier service >7/operator eercised its duty in loading and unloading of cargos no contract of carriage obligation was only toload the to the ship no application of admiralty

FRIEG-T OR FREIG-TAGE- price of carriage- shall accrue according to what is stipulated in the

contract- should there be no stipulation or if it is ambiguous ,

rules shall bea. freight shall begin to run from the day of

loading on the vesselb. in charters with 3ed period, the freight

shall begin to run upon that very dayc. $f freight is charged according o weight ,

payment shall be made according to gross weight ,including the weight of the containers

LAST DAS6 period of time stipulated fro loading and unloading( provided for in charter party ) if no lay days provided for inthe charter party, it is understood that the charterer will unloadand discharge cargoes within a reasonable time or withreasonable diligence

De&8rra$e – a sum of money due by epress contract fordetention of the vessel in loading , beyond time allowed for thatpurpose in that charter party sum of which is usually 3ed bythe parties in the charter party liability for this eists only whenepressly stipulated

Eeadfreight – where the charterer failed to occupy the leasedportion of the vessel, he may thereby be liable by the shipownerfor the deadfreight that occurred

STIPULATION IN C-ARTER PARTIES

GR: #arties are free t sti#89ate s80?ect t art 1)

t;1) ;f NCC

Art. 1). A sti#89ati! 0et7ee! t,e c&&! carrier a!+t,e s,i##er r 7!er 9i&iti!$ t,e 9ia0i9it" f t,e fr&erfr t,e 9ss6 +estr8cti!6 r +eterirati! f t,e $+s ta +e$ree 9ess t,a! etrar+i!ar" +i9i$e!ce s,a99 0e 5a9i+6#r5i+e+ it 0e:

'1( I! 7riti!$6 si$!e+ 0" t,e s,i##er r 7!er

'2( S8##rte+ 0" a 5a98a09e c!si+erati! t,ert,a! t,e ser5ice re!+ere+ 0" t,e c&&!carrier a!+

'*( Reas!a09e6 ?8st a!+ !t c!trar" t #809ic#9ic".

Art. 1). A!" f t,e f997i!$ r si&i9ar sti#89ati!ss,a99 0e c!si+ere+ 8!reas!a09e6 8!?8st a!+ c!trar" t#809ic #9ic":

'1( T,at t,e $+s are tra!s#rte+ at t,e ris< ft,e 7!er r s,i##er

'2( T,at t,e c&&! carrier 7i99 !t 0e 9ia09e fra!" 9ss6 +estr8cti!6 r +eterirati! f t,e$+s

'*( T,at t,e c&&! carrier !ee+ !t 0ser5ea!" +i9i$e!ce i! t,e c8st+" f t,e $+s

'( T,at t,e c&&! carrier s,a99 eercise a+e$ree f +i9i$e!ce 9ess t,a! t,at f a $+fat,er f a fa&i9"6 r f a &a! f r+i!ar"

#r8+e!ce i! t,e 5i$i9a!ce 5er t,e &5a09estra!s#rte+

'( T,at t,e c&&! carrier s,a99 !t 0eres#!si09e fr t,e acts r &issi! f ,is r itse&#9"ees

'@( T,at t,e c&&! carriers 9ia0i9it" fr actsc&&itte+ 0" t,ie5es6 r f r00ers 7, + !tact 7it, $ra5e r irresisti09e t,reat6 5i9e!ce rfrce6 is +is#e!se+ 7it, r +i&i!is,e+

')( T,at t,e c&&! carrier is !t res#!si09efr t,e 9ss6 +estr8cti!6 r +eterirati! $+s ! acc8!t f t,e +efecti5e c!+iti! f

t,e car6 5e,ic9e6 s,i#6 air#9a!e r t,ee8i#&e!t 8se+ i! t,e c!tract f carria$e.

Art. 1)@. A! a$ree&e!t 9i&iti!$ t,e c&&! carriers9ia0i9it" &a" 0e a!!899e+ 0" t,e s,i##er r 7!er if t,ec&&! carrier ref8se+ t carr" t,e $+s 8!9ess t,efr&er a$ree+ t s8c, sti#89ati!.

Art. 1)). If t,e c&&! carrier6 7it,8t ?8st ca8se+e9a"s t,e tra!s#rtati! f t,e $+s r c,a!$es t,esti#89ate+ r 8s8a9 r8te6 t,e c!tract 9i&iti!$ t,ec&&! carriers 9ia0i9it" ca!!t 0e a5ai9e+ f i! case f

t,e 9ss6 +estr8cti!6 r +eterirati! f t,e $+s.

Art. 1). A! a$ree&e!t 9i&iti!$ t,e c&&! carriers9ia0i9it" fr +e9a" ! acc8!t f stri<es r rits is 5a9i+.

Art. 1). A sti#89ati! t,at t,e c&&! carriers9ia0i9it" is 9i&ite+ t t,e 5a98e f t,e $+s a##eari!$ i!



t,e 0i99 f 9a+i!$6 8!9ess t,e s,i##er r 7!er +ec9ares a$reater 5a98e6 is 0i!+i!$.

Art. 1);. A c!tract i!$ t,e s8& t,at &a" 0erec5ere+. 0" t,e 7!er r s,i##er fr t,e 9ss6+estr8cti!6 r +eterirati! f t,e $+s is 5a9i+6 if it isreas!a09e a!+ ?8st 8!+er t,e circ8&sta!ces6 a!+ ,as0ee! fair9" a!+ free9" a$ree+ 8#!.

Art. 1)1. T,e fact t,at t,e c&&! carrier ,as !c&#etitr a9!$ t,e 9i!e r r8te6 r a #art t,eref6 t7,ic, t,e c!tract refers s,a99 0e ta<e! i!tc!si+erati! ! t,e 8esti! f 7,et,er r !t asti#89ati! 9i&iti!$ t,e c&&! carriers 9ia0i9it" isreas!a09e6 ?8st a!+ i! c!s!a!ce 7it, #809ic #9ic".

Art. 1)2. E5e! 7,e! t,ere is a! a$ree&e!t 9i&iti!$ t,e9ia0i9it" f t,e c&&! carrier i! t,e 5i$i9a!ce 5er t,e$+s6 t,e c&&! carrier is +is#8ta09" #res8&e+ t

,a5e 0ee! !e$9i$e!t i! case f t,eir 9ss6 +estr8cti! r+eterirati!.

Art. 1)*. T,e 9a7 f t,e c8!tr" t 7,ic, t,e $+s aret 0e tra!s#rte+ s,a99 $5er! t,e 9ia0i9it" f t,ec&&! carrier fr t,eir 9ss6 +estr8cti! r+eterirati!.

Art. 1). T,e #r5isi!s f Artic9es 1)** t 1)* s,a99a##9" t t,e #asse!$ers 0a$$a$e 7,ic, is !t i! ,is#ers!a9 c8st+" r i! t,at f ,is e&#9"ee. As t t,er

0a$$a$e6 t,e r89es i! Artic9es 1 a!+ 2;;; t 2;;*c!cer!i!$ t,e res#!si0i9it" f ,te9<ee#ers s,a99 0ea##9ica09e.

#%T. LN;. if the cargo should be received without the charterparty having been signed, the contract shall be understood aseecuted $n accordance with what appears in the bill of lading,the sole evidence of title with regard to the cargo fordetermining the rights and obligations of the ship agent, captainand charterer

6 $f there is charter party or bill of lading (+7D) @ no contract atall but according to +lanco, if there is delivery and receipt of

cargo combined with the G and mutual consent @ contractpresent , better than +7D

E. LOANS ON BOTTO3R AND RESPONDENTIA

LOAN ON BOTTO3R – loan made by shipowner or ship agentguaranteed by vessel itself and repayable upon arrival of vesselat destination 5esse9#rti!

LOAN ON RESPONDENTIA – loan, ta'en on security of thecargo laden on a vessel, and repayable upon safe arrival of cargo at destination car$$+s

CO33ON ELE3ENTS OF LOANS ON BOTTO3R ANDRESPONDENTS:8. posure of security to marine peril:. 7bligation of the debtor conditioned only upon safe arriva

of the security at the point of destination.

Re8isites f a La! ! Btt&r"Res#!+e!tia:1. S,i#7!er 0rr7s &!e" fr 8se6 e8i#&e!t r

re#air f 5esse92. Fr a +e!ite ter& a!+ 7it, etrar+i!ar"

i!terest ca99e+ #re&i8&*. Sec8re+ 0" #9e+$e+ f 5esse9 r #rti! t,ere

i! t,e case ! 9a! ! Btt&r" r #9e+$e f $+si! case f Res#!+e!tia

. La! re#a"&e!t +e#e!+s r c!+iti!e+ ! t,esafe arri5a9 f $+s fr res#!+e!tia a!+ 09i$ati!t re#a" is eti!$8is,e+ if #9e+$e+ $+s are 9st'Res#!+e!tia(

. O09i$ati! t re#a" is eti!$8is,e+ if 5esse9 is9st +8e t s#ecie+ &ari!e #eri9s i! t,e c8rse f5"a$e r 7it,i! 9i&ite+ ti&e 'Btt&r"(

FOR3S OF A LOAN ON BOTTO3RRESPONDENTIA0 4ay be eecuted by means of08. public instrument:. policy signed by the contracting parties and the bro'e

ta'ing part therein;. private instrument 'Art. )2;(

GR: T,e ca#tai! ca!!t c!tract 9a!s ! res#!+e!tiasec8re+ 0" t,e car$6 a!+ s,89+ ,e + s6 t,e c!tracts,a99 0e 5i+. Neit,er ca! ,e 0rr7 &!e" r Btt&r"fr ,is 7! tra!sacti!s.

ECEPTIONS:1. O! t,e #rti! f t,e 5esse9 ,e 7!s6 #r5i+e+ !&!e" ,as 0ee! #re5i8s9" 0rr7e+ ! t,e 7,9e5esse96 !r eists a!" t,er <i!+ f 9ie! r 09i$ati!c,ar$ea09e a$ai!st ,er.2. W,e! ,e is #er&itte+ t + s6 ,e &8st !ecessari9"state 7,at i!terest ,e ,as i! t,e 5esse9.CONTENTS OF T-E LOAN CONTRACT:8. 'ind, name and registry of the vessel:. name, surname and domicile of the captain;. names, surnames and domiciles of the borrower and the

lender<. amount of the loan and the premium stipulatedN. time for repaymentL. goods pledged to secure repaymentQ. voyage during which the ris' is run 'Art.)21(

W-O 3A CONTRACT:

1. +ottomry – by the ship owner or ship agent outside of theresidence of the owners, the captain.

2. %espondentia – only the owner of the cargo

DISTINCTIONS:

BOTTO3RRESPONDENTIA

ORDINAR LOAN

8. /ot subect to *sury Daw 8. -ubect to *sury Daw

:. Diability of the borrower iscontingent on the safe arrivalof the vessel or cargo atdestination

:. /ot subect to anycontingency

;. The last lender is apreferred creditor

;. The 3rst lender is apreferred creditor

<. 4ust have a collateral <. 4ay or may not havecollateral

N. Collateral is the vessel orcargo subect to maritime ris'

N. 4aybe property, real orpersonal



L. 4ust be in writing L. /eed not be in writingbut interest shall not be dueunless epressly stipulatedin writing

Q. To be binding on thirdperson must be recorded inthe registry of vessels of portof registry of the vessel

Q. /eed not be registered

R. Doss of collateraletinguishes the same

R. Eoes not etinguished if there is a loss of thecollateral (if any)

C!se8e!ces f 9ss f e/ects f t,e 9a!s

1. ects of loans be lost due to accident of the sea during thetime, and on the occasion of the voyage which has beendesignated in the contract and proven that the cargo was onboard 9e!+er 9sses t,e ri$,t t i!stit8te t,e acti! 7,ic,789+ #ertai! t ,i&

Ece#t: 7,e! t,e 9ss 7as8. caused by inherent defect of the thing:. through fault or malice of the borrower;. through barratry on the part of the captain<. caused by damages suered by the vessel as aconse!uence of being engaged in a contrabandN. loaded the goods on a vessel dierent from that

designated in the contract unless the change wascaused by force maeure

:. The lenders on bottomry or respondentia shall suer inproportion to their respective interest, the general averagewhich may ta'e place in the things upon which the loans weremade.

;. $n case of shipwrec', the amount for payment of the loanshall be deduced to the proceeds of the eects which have beensaved but only after deducting the costs of the salvage.

<. $f the loan should be on the vessel or any of her parts, thefreight earned during the voyage for which the loan wascontracted shall also be liable for its payment, as far as it mayreach.

N. $f the same vessel or cargo should be the obect of the loan of +ottomry or respondentia and maritime insurance, the value of what may be saved in case of shipwrec' shall be dividedbetween the lender and the insurer, in proportion to thelegitimate interest of each one, ta'ing in consideration, for thispurpose only, the principal with respect to the

4aritime contracts include charter parties and loans onbottomry and respondentia are considered maritime contracts=0 why do we have to study this topic? #re these relevant?#0 they are hardly used at present. 9owever, we have to studythis ust in case this will be as'ed in the bar. specially in theuni!ue terms used in this topic..

General provisions in contracts will govern

+asic provision you should not forget08. there should be a marine ris':. the condition that the vessel or the goods has perished thenthe right of the lender to collect everything as well as stipulatedinterest is etinguished(not sure if there are other more.. basin ala 'o 'aapas)

+7TT74%K- $t may refer to the vessel- The bottom or the hull or the 'ill of the vessel can be

pledged in this case- The whole vessel can be a subect of a security or

collateral- PE. 8N:80 (is this dierent) 666 loan is the principal

mortgage is the accessory.- The contract of bottomry is principal, the mortgage

under pd 8N:8 is merely a security- $n pd 8N:8 under section < it is a re!uirement that the

whole of the vessel must be mortgaged (no urisprudence on this matter whether a part of thevessel can be mortgaged)

- $n bottomry the whole or the part of the vessel can bethe subect

- $ the part of the vessel can be pledged, is it necessary

that there should be goods? /o. no need for goods.

%-P7/E/T$#- The vessel should have goods. The goods must be

laden in the vessel- $s it necessary that the boat is on voyage? The vesse

must be in the actual course of voyage because this isthe obective of the law. +ecause if the vessel is doc'edin the port the owner can simply obtain loans. #ndbesides there is no ris' when the vessel is doc'ed (butno urisprudence)

Eistinction of this two types of loan vs. -$4PD D7#/ (fopurposes of the bar) 666 N dierences8. with respect to form 666 can you validly eecute a bottomry orespondentia verbally? Kou cannot. +ec under the code o

commerce no udicial action can arise when the contract is notreduced in writing. +ut this is not the case in simple loan. +ut insimple loan you ta'e note the statute of frauds if not in writing+ and %, you can dismiss case due to failure to state cause ofaction.

=0 why hardly used at present?#0 because of sophistication. Captains can ust call up any agentthe shipowner to deliver anything for the use of the vessel todeliver. This contract was recognied in medieval times.

F. A4ERAGES AND COLLISIONS

ACCIDENTS IN 3ARITI3E CO33ERCE:8. #verages:. #rrival *nder -tress;. Collision<. -hipwrec'

A5era$es – an etra6ordinary or accidental epense incurredduring the voyage in order to preserve the cargo, vessel or bothand a99 +a&a$es or deterioration suered by the vessel fromdeparture to the port of destination, and to the cargo from theport of loading to the port consignment. 'Art. ;@(

CLASSES OF A4ERAGES: A. 5articular or 8imple Avera$e0. Gross or General Avera$e

# . 5articular or 8imple Avera$e

Eamage or epenses caused to the vessel or cargo that did

not inure to common bene3t, and borne by respective owners';( The owner of the goods which gave rise to the epense osuered th e damage shall bear this average. 'Art. 1;(res perit domino appliesif the vessel or goods are hypothecated by loan on bottomryand respondentia, the lender shall bear the loss in proportion tohis interest

amples0 see article RSM of the code of commerce



RULES ON A4ERAGES:8. #verages is de3ned as damage deliberately caused or an

epense deliberately incurred due to a marine peril andwhich has resulted in saving both vessel and cargo or onlythe vessel or cargo.

:. >here both vessel and cargo are saved, it is generalaverage where only the vessel or only the cargo is saved, itis particular average.

;. The person whose property has been saved must contributeto reimburse the damage caused or epense incurred if thesituation constitutes general average.

0. Gross or General Avera$e Eamage or epenses deliberately caused in order to save thevessel, its cargo or both from real and 'nown ris'. 'Art. 11( #ll the persons having an interest in the vessel and the cargotherein at the time of the occurrence of the average shallcontribute to satisfy this average. 'Art. 12(

REUISITES:8. common danger present:. arising from accidents of sea, disposition of

authority;. peril imminent and ascertained<. part of vessel or cargo deliberately sacri3cedN. intended to save vessel or cargoL. proper legal steps and authority ta'en

C&&! +a!$er6 means both the ship and the cargo, after has been loaded, aresubect to the same danger, whether during the voyage, or inthe port of loading or unloading, that the danger arises from theaccidents of the sea, disposition of authority, or faults of men,provided that circumstances producing the peril should beascertained and imminent or may rationally be said to becertain and imminent

6 >hen the measure of precaution adopted solely andeclusively for the preservation of the vessel from the danger of seiure or capture and not for the common safety is notconsidered as common danger

De9i0erate Sacrice6 voluntary sacri3ce of a part for the bene3t of the whole inorder to ustify the average contribution

" 598!tar" ?ettis!6 the casting away of some portion of the associated interests for the purpose of avoiding thecommon peril from the whole to a particular portion of thoseinterests

6 the goods on board refer to in ettison should be proven bymeans of bill of lading and with regards to those belonging tovessel by means of inventory prepared before the departure

2 cases 7,ere t,ere ca! a9s 0e $e!era9 a5era$es e5e! if t,e sacrice 7as !t &a+e +8ri!$ t,e 5"a$e:

a. where the sin'ing of the vessel is necessary toetinguish a 3re in a port, roadstead, cree' or bay0. where cargo is transferred to lighten the ship onaccount of a storm to facilitate entry into a port

Art. 1@0 in order that the goods ettisoned may be included inthe gross average and the owners entitled to indemnity – it isnecessary that the cargoFs eistence on board be proven by abill of lading and with regard to those belonging to the vessel,by means of an inventory prepared before departure.

Art. 1)0 if in lightening of a vessel on account of a storm tofacilitate its entry to a port or roadstead, part of the cargoshould be transferred to barges or lighters and be lost, theowner of the said part is entitled to indemnity as if the loss

originated from a gross average, the amount being distributedbetween the vessel and cargo from which it came.$f on the contrary the merchandise transferred should be savedand the vessel should be lost, no liability may be demanded othe salvage.

Art. 10 if, as a necessary measure to etinguish a 3re in aport, roadstead, cree', or bay, it should be decided to sin' anyvessel, this loss shall be considered gross average, to which thevessels saved should contribute.

Nte: the loss or damage sustained by cutting away wrec' or

parts of the ship which have been previously carried away oreectively lost by accident shall not be made good as generaaverage

Sacrice &8st 0e S8ccessf896 ! general contribution can be demanded if the vessel andother cargo that are sought to be saved were in fact not saved(art. RLS)

6 owners of the goods saved shall not be liable for theindemni3cation of those ettisoned, lost or damaged3 hence when the sacri3ce was not successful in saving the shipthere will be no general contribution

C&#9ia!ce 7it, Le$a9 Ste#s

Prce+8re fr rec5er": 'Art. 1*1(8. There must be a resolution of the captain, adopted after a

deliberation with the other o2cers of the vessel and aftehearing all persons interested in the cargoes. $f the latterdisagree, the decision of the captain should prevail buthey shall register their obections.

:. The resolution must be entered in the logboo', stating thereasons and motives for the dissent, and the irresistibleand urgent causes if he acted in his own accord. $t must besigned, in the 3rst case, by all persons present in thehearing. $n the second case, by the captain and all theo2cers of the vessel.

;. The minutes must also contain a detail of all the goods ettisoned and those inuries caused to those on board.

<. The captain shall deliver it to the maritime udicial authorityof the 3rst port he may ma'e, within :< hours after his

arrival, and to ratify it immediately under oath.

ORDER OF GOODS TO BE CAST O4ERBOARD IN CASE OF METTISON:8. those which are on the dec', preferring the heaviest one

with the least utility and value:. those which are below the upper dec', beginning with the

one with greatest weight and smallest value. 'Art. 1(

Ea&#9es f Ge!era9 A5era$e%ead #rt R88 of the Code of Commerce

B" W,& Br!e6 shall be borne by those who bene3ted from the sacri3ce theshipowner and the owner of the cargoes that were saved

C!tri08ti! &a" 0e i&#se+ ta. i!s8rers ( $nsurance Code of the Philippines)6 they are obliged to pay for the indemni3cation of the grossaverage provided that the liability shall be limited to theproportion of contribution attaching to his policy value wherethis is less than the contributing value of the thing insured

0. 9e!+ers f 0tt&r" a!+ res#!+e!tia (Code oCommerce)6obliged to pay in proportion to their respective interest, thegeneral average which may ta'e place in the goods which theloan is made



W, is e!tit9e+ t i!+e&!it"QO7!er f t,e $+s 7,ic, 7ere sacrice+ is e!tit9e+ trecei5e t,e $e!era9 c!tri08ti!

Ece#t1. $+s carrie+ ! +es< 8!9ess

t,e r89e s#ecia9 9a7 r c8st&s f t,e#9ace a997 t,e sa&e

2. $+s t,at are !t recr+e+i! t,e 0<s r recr+s f t,e 5esse9

*. f8e9 f t,e 5esse9 if t,ere is&re t,a! s8cie!t f8e9 fr t,e 5"a$e

A&erica! -&e I!s8ra!ce 5. CAArt states that claims shall not be admitted if they do noteceed N[ of the interest which the claimant may have in thevessels or cargo if it is general average, and 8[ of the goodsdamaged if particular average deducting in both cases theepenses of appraisal, unless there is an agreement to thecontrary.

$t is clear that the damage of the cargo is particular averagesince the loss is less than 8[ to the value of the cargo and thereappears to be no allegations as to any agreement defendantsand consignee of the goods to the contrary6 0" e#ress#r5isi! f 9a76 #9ai!ti/ is 0arre+ fr& s8i!$ frrec5er".

La7 ! a5era$es +es !t a##9" if t,e CC is !e$9i$e!t.

K7%W6#/T>%P %*D- 7/ ET%4$/$/G D$#+$D$TK 7%

C7/T%$+*T$7/ 7/ #A%#G-

nder the rule! dec0 car$o is permitted in coastwise shippin$but prohibited in overseas shippin$.1. If +ec< car$ is 9cate+ 7it, t,e c!se!t f t,e

s,i##er ! 5erseas tra+e6 it &8st a97a"s c!tri08te

t $e!era9 a5era$e6 08t s,89+ t,e sa&e 0e

?ettis!e+6 it 789+ !t 0e e!tit9e+ t rei&08rse&e!t

0eca8se t,ere is 5i9ati! f t,e A R89es.

2. If +ec< car$ is 9a+e+ 7it, t,e c!se!t f t,e

s,i##er ! cast7ise s,i##i!$6 it &8st a97a"s

c!tri08te t $e!era9 a5era$e a!+ if ?ettis!e+ 789+

0e e!tit9e+ t rei&08rse&e!t.

&a" a9s 0e 8se+ t s95e c!tr5ersies 7,ere! #r5isi! f t,e c+e f c&&erce is i! #i!t0eca8se t,e sai+ r89es e&0+" t,e c8st& f &ariti&e states

#A%#G-6 the same concept that was eisting in medieval times can beapplied at present

%elevance of averages (ta'e note these e. Connected toepenses under RSL)

_ under RSL 666 averages are0o traordinary epenses – e. $f machine does

not wor', you have to as' help of a tugboatthe epenses on the use of tugboat is a!uestion of averages. This is etraordinarybecause it is not foreseen. 666 assuming theengine of the vessel was defective, can thatbe considered an average? K-. (!uestion nowif it is particular or general)

o Eamages or deterioration suered – refer tothe physical feature or attribute of the goods.6 these two are dierent

E$-T$/CT$7/ 7 P#%T$C*D#% #/E G/%#D #A%#G-

9ernande – averages are losses. $f there is a loss incurred, theloss will be shouldered on where it falls. (e. $f you have goodstransported from origin to destination but in process it wasdamaged by sea water. The shipper or owner will shoulder theloss. >hat will shipper do to recover loss? $f insured go afterinsurance. $nsurance then 3les action against common carrierdue to negligence) 666 if general average, there is speciacircumstance, the loss will not be shouldered on where it fallsbut wil be shouldered proportionately by persons who havebene3ted the circumstance

< re!s for general averages (see above notes) – 447%$̀

4#G-#K-#K A-. #G#/8. common danger T7 +oth vessel and cargo:. deliberate sacri3ce;. successful saving<. compliance with the proper steps

$f no special circumstance, it is a particular or simple average 66the owner of the vessel will be the one who will shoulder theloss. The negligence of captain, the owner of the vessel wilshoulder. +ut if there is special circumstance, the loss will beshouldered proportionately by those who bene3ted

-tandard oil case – the ship captain will not release goods to theshipper unless the shipper will contribute their share. The issuewas the duty of the captain to li!uidate – he did not 3le for theappropriate proceeding, you should result to legal li!uidation

Captain here failed T7 $/$T$#T proper proceeding thusshipowner is liable for actions of captain

=0 is the duty of captain to initiate a condition precedent?#0 no. even if ship captain does not initiate, the shipowner canstill 3le the appropriate proceeding in court.

C7447/ E#/G% – both to vessel and cargo. $f one invo'esgeneral average then that person must prove what he allege. $nstandard oil since ship captain invo'ed gen aver – they shouldbe the one to prove. ailure to prove, they cannot as' focontribution from owners of the goods.

$t is also possible that there are no goods involved. 7nlyetraordinary epense Phil. 9ome assurance case 666 discussedalso in chapter ; 666 when it eploded, vessel got burnedanother vessel came to the rescue to etinguish the 3re andtowed the vessel to the nearest destination. Goods were savedfrom the subect vessel. The shipowner as'ed for contribution tothe owner of the goods which were saved. -C said, shipownerdid not comply legal steps R8;6R8N thus you cannot allegegeneral averages.

$f the averages are not general, it is particular. the shipownerwill be solely liable in the case of 4agsaysay, there was nodeliberate sacri3ce.

-*CC--*D -#A$/G6 +oth vessel and goods must be saved6 $f vessel not saved, no general averages. ven if goods

were saved6 Kou have to start with resolution, placing of reso in the

log boo', accounting of goods thrown away starting

those on dec' and to follow from those not on dec'(read R;6R8N)

#merican 9ome insurance (ta'e note this case666 bar)6 Transportation of tv sets, the shipcapatain was uprised

of the typhoon. -till captain continued with the ourney Then na abot ang typhoon captain directed that the tvsets should be ettison. -aved vessel. %e'lamo owner$s there general average? /o. if the shipowner isnegligent, the law on general averages does not apply.

/ote that eamples of the two types of averages are noteclusive. There is a word HespeciallyI thus there may be othereample that may fall under this two type of averages.



K7%W #/E T*%P %*D-6 T9$- C#/ be stipulated in a contract that this rule will

apply in respect to averages6 $n the absence of stipulation in the contract in applying

this rule, such rule is inapplicable

=0 ordinary epenses are not averages bec. They areforeseeable, are there instance that they can be considered tobe etraordinary ave# if the parties agree that the averages will cover ordinaryepenses. The code of commerce does not prohibit the inclusion

of other epenses under averages.

G. COLLISIONS

C99isi!s 6 impact of : vessels both of which are moving.A99isi! 6 impact between a moving vessel and a stationaryone.

* !es f Ti&e i! t,e C99isi! f 5esse9s:8. irst one – all time up to the moment when ris' of collision

begins:. -econd one – time between moment when ris' of collision

begins and moment it becomes a practical certainty;. Third one – time when collision is certain and time of

impact.

Errr i! Etre&is 6 sudden movement made by a faultlessvessel during the ;rd one of collision with another vessel whichis at fault during the :nd one. ven if such sudden movementis wrong, no responsibility will fall on said faultless vessel.'Urr8tia a!+ C. 5. Bac Ri5er P9a!tati! C.6 2@ P-IL@*2(.

R89es ! C99isi! f 4esse9s 8!+er C+e f C&&erce:8. The collision may be due to the fault, negligence or lac' of

s'ill of the captain, sailing mate, or any other member of the complement of the vessel. The owner of the vessel atfault be liable for losses or damage. 'Art. 2@(

:. The collision may be due to the fault of both vessels. achvessel shall suer its own losses, but as regards the ownerof cargoes both vessels shall be ointly and severally liable.'Art. 2)(

;. $f it cannot be determined which vessel is at fault. achvessel shall also suer its own losses and both shall besolidarily liable for losses o damages on the cargoes. 'Art.2(

<. The vessels may collide with each other through fortuitousevent or &orce ma5eure. $n this case each shall bear its owndamage. 'Art. *;(

N. Two vessels may collide with each other without their faultby reason of a third vessel. The third vessel will be liable forlosses and damages. 'Art. *1)

L. # vessel which is properly anchored and moored maycollide with those nearby reasons of storm or other cause of &orce ma5eure. The vessel run into shall suer its owndamage and epense. 'Art. *2(

Cases c5ere+ 0" c99isi! a!+ a99isi!:8. 'ne vessel at &ault E such vessel is liable for damage

caused to innocent vessel as well as damages suered bythe owners of cargo of both vessels.

:. >oth vessels at &ault E each vessel must bear its own loss,but the shippers of both vessels may go against the shipowners who will be solidarily liable.

;. ;essel at &ault not 0nown E same as rule as (:). Doctrine o& Inscrutable Fault)

<. #hird vessel at &ault E same rule as (8).N. Fortuitous event E no liability. ach bears its own loss.

Prere8isite t rec5er": Protest should be made within :< hours before the competentauthority at the point of collision or at the 3rst port of arrival, if

in the Philippines and to the Philippine consul, if the collisiontoo' place abroad. 'Art. *( $nuries to persons and damage to cargo of owners not onboard on collision time need not be protested. 'Art. *@(

DOCTRINE OF LAST CLEAR C-ANCE OR CONTRIBUTORNEGLIGENCE NOT APPLICABLE.

DOCTRINE OF =INSCRUTABLE FAULT> $n case of collision where it cannot be determined whichbetween the two vessels was at fault, both vessels bear theirespective damage, but both should be solidarily liable fo

damage to the cargo of both vessels.

NOTE: The Dctri!e f Li&ite+ Lia0i9it" applies in case ocollisions, but it shall be limited only to the value of the vessewith all its appurtenances and freightage earned during thevoyage. >hen the latter is not su2cient to cover all theliabilities, the indemnity due by reason of the death or inury ofpersons shall have preference. 'Arts. *) a!+ *(

-. ARRI4AL UNDER STRESS

ARRI4AL UNDER STRESS – arrival of a vessel at a port ofdestination on account of lac' of provision, well founded fear ofseiure, privateers, pirates, or accidents of sea disablingnavigation. 'Art. 1(NOTE: Ca#tai! &8st &a<e a #rtest

Ste#s t 0e ta<e! i! t,e +eter&i!ati! f t,e #r#riet"f arri5a9 8!+er stress8. captain should determine during the voyage if there is

a well founded fear of seiure, privateers of other validgrounds

:. captain shall then assemble the o2cers;. captain shall summon the persons interested in the

cargo who may be present and who may attend but withoutright to vote

<. the o2cers shall determine and agree if there is welfounded reason after eamining the circumstances Captainshall have the deciding vote

N. agreement shall be drafter and the proper minutesshall be signed and entered into the log boo'

L. obections and protests shall li'ewise be entered in theminutes

A0se!ce f !e f t,e ste#s6 ca! sti99 0e c!si+ere+arri5a9 8!+er stress.

W,e! !t 9a7f89:8. lac' of provisions due to negligence to carry according to

usage and customs:. ris' of enemy not well 'nown or manifest;. defect of vessel due to improper repair and<. malice, negligence, want of foresight or lac' of s'ill o

captain. 'Art. 2;(

W, 0ears e#e!ses: if arrival under stress is proper shipowner or ship

agent will only be liable for the epenses of the arrival if arrival under stress is improper shipowner and ship

agent will be liable for the same epenses and, inaddition, they shall be solidarily liable for damagescaused to the cargoes by such arrival under stress

'Art. 21(

NOTE: After cessati! f t,e ca8se f t,e arri5a9 8!+er stress6

ca#tai! s,89+ c!ti!8e 5"a$e r e9se ,e s,a99 0e9ia09e.

U!9a+i!$ f car$es t &a<e re#airs:6 in order to ma'e repairs to the vessel or because there



is danger that cargo may suer damage necessaryto unload captain must re!uest authoriation fromcompetent udge or court for removal, and carry it outw1 'nowledge of the person interested in the cargo

6 in a foreign port Philippine Consul6 in case o f the vessel epenses shall be for the

account of the ship owner or agent6 in case of the cargo chargeable against the owners

of the merchandise for whose bene3t the act wasperformed

6 if both epenses to be divided proportionatelybetween the value of the vessel and cargo

'Art. 22(

C8st+" f car$: intrusted to the captain (ecept in cases of &orce

ma5eure)'Art. 2*( if entire cargo or part thereof should appear to be

damaged, or there should be imminent danger of itsbeing damaged captain may re!uest udge of competent court 1consul, the sale of all or part of the cargo person ta'ing cogniance shall authorie it (aftereamination and declaration) captain shall ustify the legality of his conduct,answering to the shipper for the price of the

merchandise would have brought if they had arrived ingood condition

'Art. 2(

Lia0i9it" f ca#tai!: captain responsible for the damages caused by his

delay if cause of arrival under stress ceases he should not

continue the voyage if cause of arrival should have been the fear of enemies

deliberation and resolution (in a meeting of o2cersof the vessel and persons interested in the cargo) shallprecede the departure

'Art. 2(

S,i#7rec< – the demolition or shattering of a vessel caused

by her driving ashore or on roc's and shoals in the midseas, orby the violence of winds or waves in tempests6 loss of the vessel at sea as a conse!uence of its grounding, orrunning against an obect in sea or on the coast

Doss or deteriorations of vessel or cargo caused by shipwrec'or stranding individually account of the owners part whichmay be saved belonging to them, same proportion. 'Art. ;( $f the wrec' was due to malice, negligence or lac' of s'ill of the captain, the owner of the vessel may demand indemnityfrom said captain. 'Art. 1( The goods saved from the wrec' to be specially bound for thepayment of the epenses of the respective salvage. 'Art. 2( $f several vessels sail under convoy, and any of them shouldbe wrec'ed, the cargo saved will be distributed among the restin proportion to the amount which each one is able to ta'e. $f

any captain should refuse, without su2cient cause, to receivewhat may correspond to him, the captain of the wrec'ed vesselto enter a marine protest against him. $f it is not possible totransfer to the other vessels the entire cargo of the vesselwrec'ed, the goods of the highest value and smallest volume tobe saved 3rst. Eesignation to be made by the captain withconcurrence of his o2cers. 'Art. *( The captain ta'ing on6board the goods saved from the wrec'to continue his course to the port of destination and upon arrivalhe should deposit the goods for disposal to their owners. $ncase the captain changes his course, and if he can unload themat the port of which they were consigned, he may ma'e saidport if the shippers or supercargoes present and the o2cers and

passengers of the vessel consent thereto. +ut he is not re!uiredto do so even if he has the consent during time of war or whenthe port is di2cult and dangerous to ma'e. The owners of thecargo to defray all the epenses of this arrival and the paymenof the freightage. 'Art. ( $f cannot be, proceed to udicial sale complying with theformalities and on publicity. 'Art. (

I. SAL4AGE LAW 'A ct N. 2@1@(

SAL4AGE – services one person renders to the owner of a shipor goods, by his own labor, preserving the goods or the ship

which the owner or those entrusted with the care of them haveeither abandoned in distress at sea, or are unable to protect orsecure.

Ki!+s f Sa95a$e: Aoluntary – compensation is dependent on the success. *nder contract for a per diem or per horam wage –

payable at all events. *nder contract for compensation – payable only in case

of success.

C9ai& fr 5a9i+ sa95a$e: Provides for a reward for voluntary salvage 7ther persons who assist in saving the vessel or its

cargo from shipwrec' shall be entitled to a simila

award

Pers!s !t e!tit9e+ t sa95a$e c&#e!sati!:8. Crew of the vessel shipwrec'ed or which was in dange

of shipwrec':. 9e who shall have commenced the salvage in spite o

opposition of the captain or of his representatives*. 9e who shall have failed to comply with the provisions

of -ection ; ,ection B. #the salvor who saves or pic0sup a vessel or merchandise at sea! in the absence o&the ship captain! ship owner or a representative oeither o& them! the% bein$ un0nown! shall conve% anddeliver the vessel or merchandise A,AP to the collectoro& customs i& the port has a collector and otherwise tothe provincial treasurer or municipal ma%or.)

Re8isites f c&#e!sati! r sa95a$e re7ar+:8. 7bect must have been eposed to marine peril (3re

acts of pirate, thieves)

:. -alvage services rendered voluntarily and is no

re!uired as an eisting duty or a form of contract (-ee

-ec. R)

" Pilots are not entitled to a reward – (#tty

Capanas)

;. -alvage services are successful in whole or in part

<. Aalid vessel which is shipwrec'ed beyond the control o

the crew or shall have been abandoned (no

necessary)

" Courts will not interfere in the agreement of the parties eceptbut where there is no agreement or it is ecessive the reward is

3ed by the %TC udge.

Dere9ict – a ship or cargo which is abandoned and deserted atsea by those who were in charge of it, without any hope ofrecovering it or without any intention of returning to it6 determined by ascertaining what was the intention andepectation of those in charge of it when they !uitted it6 boat or vessel found entirely deserted or abandoned on thesea without hope or intention of recovery or return by themaster or the crew, whether resulting from wrec', accidentnecessity, or voluntary abandonment

METSA36 FLOTSA36 LIGAN:



• Metsa& – goods that were thrown o a ship which wasin danger

• F9tsa& – goods that Ooated o the ship while shipwas in danger or when it san'

• Li$a! – goods left as sea on the wrec' or tied to abuoy so that they can be recovered later

Basis f e!tit9e&e!t t sa95a$e re7ar+ 'Circ8&sta!ces tc!si+er(:

8. The labor epended by the salvors in rendering thesalvage service

:. The promptitude, s'ill and energy displayed inrendering the service and saving the property

;. The value of the property employed by the salvors inrendering the service, and danger to which suchproperty was eposed

<. The ris' incurred by the salvors in rescuing theproperty from the impending peril

N. The value of the property salvedL. The degree of danger which the property was rescued

Ri$,ts a!+ 09i$ati!s f sa95rs a!+ 7!ers: -alvor is entitled to compensation for services

rendered. 9e has, under the -alvage Daw, a lien uponthe property salvaged.

7n the other hand, the owner does not denounce hisright to the property. There is no presumption of anintention to abandon such property rights.

3ariti&e Lie! # salvor, in maritime law, has an interest in the propertycalled a lien, but it never goes, in the absence of a contractepressly made, upon the idea of debt due from the owner tothe salvor but upon the principle that the service creates aproperty in the thing saved.

R89e ! sa95a$e re7ar+:8. The reward is e+ 0" t,e RTC ?8+$e in the absence of

agreement or where the latter is ecessive 'Sec. (.:. $f sold (no claim being made within ; months from

publication), the proceeds, after deducting epenses andthe salvage claim, shall go to the owner if the latter doesnot claim it within ; years, NS[ of the said proceeds shall

go to the salvors, who shall divide it e!uitably, and theother half to the government 'Secs. 1112(.

;. $f a vessel is the salvor, the reward shall be distributed asfollows0a. NS[ to the shipownerb. :N[ to the captain andc. :N[ to the o2cers and crew in proportion to their

salaries

SAL4AGE LAW

SECTION 1. >9/ $/ C#- 7 -9$P>%CW, T9 A--D 7%$T- C#%G7 -9#DD + +K7/E T9 C7/T%7D 7 T9 C%>, 7%-9#DD 9#A +/ #+#/E7/E +K T94, #/E P$CWE *P #/EC7/AKE T7 # -# PD#C +K 7T9% P%-7/-, T9 D#TT%-9#DD + /T$TDE T7 # %>#%E 7% T9 -#DA#G.

T97- >97, /7T +$/G $/CD*EE $/ T9 #+7A P#%#G%#P9,#--$-T $/ -#A$/G # A--D 7% $T- C#%G7 %74 -9$P>%CW,-9#DD + /T$TDE T7 # D$W %>#%E.

SEC. 2. $ T9 C#PT#$/ 7 T9 A--D, 7% T9 P%-7/#CT$/G $/ 9$- -T#E, $- P%-/T, /7 7/ -9#DD T#W %74 T9 -#, 7% %74 T9 -97%- 7% C7#-T 4%C9#/E$- 7%CT- P%7CE$/G %74 # -9$P>%CW 7% P%7CE T7 T9 -#DA#G 7 T9 A--D, >$T97*T T9 C7/-/T 7 -*C9C#PT#$/ 7% P%-7/ #CT$/G $/ 9$- -T#E.

SEC. *. 9 >97 -9#DD -#A 7% P$CW *P # A--D 7%4%C9#/E$- #T -#, $/ T9 #+-/C 7 T9 C#PT#$/ 7 T9 A--D, 7>/%, 7% # %P%-/T#T$A 7 $T9% 7 T94, T9K +$/G */W/7>/, -9#DD C7/AK #/E ED$A%-*C9 A--D 7% 4%C9#/E$-, #- -77/ #- P7--$+D, T7 T9 C7DDCT7% 7 C*-T74-, $ T9 P7%T 9#- # C7DDCT7%#/E 7T9%>$- T7 T9 P%7A$/C$#D T%#-*%% 7%4*/$C$P#D 4#K7%.

SEC. . #T% T9 -#DA#G $- #CC74PD$-9E, T9 7>/%7% 9$- %P%-/T#T$A -9#DD 9#A # %$G9T T7 T9 ED$A%K7 T9 A--D 7% T9$/G- -#AE, P%7A$EE T9#T 9 P#K-,

7% G$A- # +7/E T7 -C*%, T9 JP/-- #/E T9 P%7P%%>#%E.

T9 #47*/T #/E -*$C$/CK 7 T9 +7/E, $/ T9 #+-/C7 #G%4/T, -9#DD + ET%4$/E +K T9 C7DDCT7% 7C*-T74- 7% +K T9 *EG 7 T9 C7*%T 7 $%-T $/-T#/C7 T9 P%7A$/C $/ >9$C9 T9 T9$/G- -#AE 4#K +7*/E.

SEC. . T9 C7DDCT7% 7 C*-T74-, P%7A$/C$#D T%#-*%%, 7% 4*/$C$P#D 4#K7%, T7 >974 # -#DA#G $-%P7%TE, -9#DD 7%E%0#. T9#T T9 T9$/G- -#AE + -#G*#%E #/E

$/A/T7%$E.+. T9 -#D #T P*+D$C 7PT$7/ 7 T9 T9$/G- -#AE >9$C9

4#K + $/ E#/G% 7 $44E$#T D7-- 7% 7 T97-

>97- C7/-%A#T$7/ $- A$E/TDK P%*E$C$#D T7 T9$/T%-T- 7 T9 7>/%, >9/ /7 7+CT$7/ $- 4#E T7 -*C9 -#D.

C. T9 #EA%T$-4/T >$T9$/ T9 T9$%TK E#K--*+-=*/T T7 T9 -#DA#G, $/ 7/ 7 T9 D7C#D/>-P#P%- 7% $/ T9 /#%-T />-6P#P% P*+D$-9E7 #DD T9 ET#$D- 7 T9 E$-#-T%, >$T9 # -T#T4/T7 T9 4#%W #/E /*4+% 7 T9 CT- %=*-T$/G#DD $/T%-TE P%-7/- T7 4#W T9$% CD#$4-.

SEC. @. $, >9$D T9 A--D 7% T9$/G- -#AE #% #T T9E$-P7-$T$7/ 7 T9 #*T97%$T$-, T9 7>/% 7% 9$-%P%-/T#T$A -9#DD CD#$4 T94, -*C9 #*T97%$T$--9#DD 7%E% T9$% ED$A%K T7 -*C9 7>/% 7% 9$-%P%-/T#T$A, P%7A$EE T9#T T9% $- /7 C7/T%7A%-K7A% T9$% A#D*, #/E # +7/E $- G$A/ +K T9 7>/% 7%9$- %P%-/T#T$A T7 -C*% T9 P#K4/T 7 T9JP/-- #/E T9 P%7P% %>#%E. 7T9%>$-, T9ED$A%K -9#DD /7% + 4#E */T$D T9 4#TT% $- EC$EE+K T9 C7*%T 7 $%-T $/-T#/C 7 T9 P%7A$/C.

SEC. ). /7 CD#$4 +$/G P%-/TE $/ T9 T9% 47/T9--*+-=*/T T7 T9 P*+D$C#T$7/ 7 T9 #EA%T$-4/TP%-C%$+E $/ -*+6-CT$7/ (C) 7 -CT$7/ $A, T9 T9$/G--#A -9#DD + -7DE #T P*+D$C #*CT$7/, #/E T9$%P%7CE-, #T% EE*CT$/G T9 JP/-- #/E T9 P%7P%%>#%E -9#DD + EP7-$TE $/ T9 $/-*D#% T%#-*%K. $ T9% K#%- -9#DD P#-- >$T97*T #/K7/ CD#$4$/G $T, 7/9#D 7 T9 EP7-$T -9#DD + #E*EGE T7 9$4 >97 -#AE T9 T9$/G-, #/E T9 7T9% 9#D T7 T9 $/-*D#%G7A%/4/T.

SEC. . T9 7DD7>$/G -9#DD 9#A /7 %$G9T T7 # %>#%E

7% -#DA#G 7% #--$-T#/C0

#. T9 C%> 7 T9 A--D -9$P>%CWE 7% >9$C9 >#- $-E#/G% 7 -9$P>%CW

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COGSA ' CARRIAGE OF GOODS B SEA ACT(6 #dopted by the Philippines on 7ctober ::, 8M;L

through Commonwealth #ct /o. LN6 Ne7 Ci5i9 C+e primary law on goods that are

being transported from a foreign port to the Philippines6 COGSA remains to be a suppletory law for such type

of transportation – international shipping

ART. 1)*6 NCC: T-E LAW OF T-E COUNTR TO W-IC-T-E GOODS ARE TO BE TRANSPORTED S-ALL GO4ERNT-E LIABILIT OF T-E CO33ON CARRIER FOR T-EIRLOSS6 DESTRUCTION OR DETERIORATION.

G+s – includes goods, wares, merchandise, and articles of every 'inds whatsoever

6 does not include live animals and cargo which by thecontract of carriage is stated as being carried on dec' and is socarried

Parties:

• Carrier, and• -hipper

6 They are given their respective rights and obligations underC7G-#.6 Carrier (covered by C7G-#) not limited to the shipownerincludes charterer who enters into a contract of carriage withthe shipper6 Charterer charters a vessel and conducts his own businessfor his own account

after chartering the vessel, he uses the vessel toconduct a business of transportation obtaining goods from ;r

persons to transport the latterFs goods

D8ties f t,e carrier: Civil Code re!uires international carriers to eercise

etraordinary diligence in the performance of theicontractual obligations

-ection : of C7G-# carrierFs obligation and liabilitiesin relation to the loading, handling, stowage, carriagecustody, care and discharge of such goods

-ection ; of C7G-# responsibilities of the carrieunder C7G-#

Dc8&e!t f tit9e re8ire+6 evidenced by the +ill of Dading6 +7D serves as prima facie evidence of the receipt by thecarrier of the goods

Ntice f c9ai& a!+ #rescri#ti5e #eri+ Ntice f c9ai& must be made within ; days from deliveryif the damage is not apparent not mandatory Prescri#ti5e #eri+ 8 year from delivery for the 3ling othe case is a condition precedent or mandatory does not applyto cases of misdelivery or conversion

Defe!ses a!+ i&&8!ities6 provided for by -ection < of C7G-#6 Secti! '1( f COGSA – carrier shall not be liable for lossor damages arising from unseaworthiness

6 Ne7 Ci5i9 C+e – carrier will not be liable only if it can presentproof that the unseaworthiness was caused eclusively by any ofthe circumstances speci3ed in #rt. 8Q;< of the /CC

Wai5er6 The shipowner and the ship agent may waive the bene3t ofany of the defenses in its favor provided not only under C7G-#but also under other laws

Li&iti!$ #r5isi!6 C7G-# contains a provision that allows the shipper to recoveronly *-XNSS per pac'age unless there is a special declarationunless there the real value of the goods is declared6 declaration made by the shipper stating an amount biggerthan XNSS per pac'age will ma'e the carrier liable for suchbigger amount but only if the amount so declared is the real

value of the goods

Ri$,t t +isc,ar$e +a!$er8s car$6 C7G-# allows the carrier to discharge the good of the carriediscovers that the goods are dangerous, inOammable or areeplosives

Documents

Transportation and Public Utilities Law