This action might not be possible to undo. Are you sure you want to continue?
54 MEMORY AID
TRANSPORTATION LAWS CONTRACT OF TRANSPORTATION/ CARRIAGE A contract whereby a person, natural or juridical, obligates to transport persons, goods, or both, from one place to another, by land, air or water, for a price or compensation. Classifications: 1. Common or Private 2. Goods or Passengers 3. For a fee (for hire) or Gratuitous 4. Land, Water/maritime, or Air 5. Domestic/inter-island/coastwise or International/foreign It is a relationship which is imbued with the public interest. COMMON CARRIER Persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public (Art. 1732, Civil Code). Art. 1732 of the New Civil Code avoids any distinction between one whose principal business activity is the carrying of persons or goods or both and one who does such carrying only as an ancillary activity (sideline). It also avoids a distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does the law distinguish between a carrier offering its services to the general public that is the general community or population and one who offers services or solicits business only from a narrow segment of the general population. A person or entity is a common carrier even if he did not secure a Certificate of Public Convenience (De Guzman vs. CA, 168 SCRA 612). It makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation should be by motor vehicle. (First Philippine Industrial Corporation vs. CA) One is a common carrier even if he has no fixed and publicly known route, maintains no terminals, and issues no tickets (Asia Lighterage Shipping, Inc. vs. CA). Characteristics: 1. Undertakes to carry for all people indifferently and thus is liable for refusal without sufficient reason (Lastimoso vs. Doliente, October 20, 1961); 2. Cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in these goods; 3. No monopoly is favored (Batangas Trans. vs. Orlanes, 52 PHIL 455); 4. Provides public convenience.
PRIVATE CARRIER One which, without being engaged in the business of carrying as a public employment, undertakes to deliver goods or passengers for compensation. (Home Insurance Co. vs. American Steamship Agency, 23 SCRA 24) TESTS WHETHER CARRIER IS COMMON OR PRIVATE: The SC in First Philippine Industrial Corporation vs. CA (1995) reiterated the following tests: 1. It must be engaged in the business of carrying goods for others as a public employment and must hold itself out as ready to engage in the transportation of goods generally as a business and not as a casual occupation; 2. It must undertake to carry goods of the kind to which its business in confined; 3. It must undertake to carry by the method by which his business is conducted and over its established roads; and 4. The transportation must be for hire. In National Steel Corp. vs. CA (1997) the SC held that the true test of a common carrier is the carriage of goods or passengers provided it has space for all who opt to avail themselves of its transportation for a fee. COMMON CARRIER PRIVATE CARRIER
1. As to availability Holds himself out for Contracts with all people particular individuals indiscriminately or groups only 2. As to required diligence Extraordinary Ordinary diligence is diligence is required required 3. As to regulation Subject to State Not subject to State regulation regulation 4. Stipulation limiting liability Parties may not agree Parties may limit the on limiting the carrier’s liability, carrier’s liability provided it is not except when contrary to law, provided by law morals or good customs 5. Exempting circumstance Prove extraordinary caso fortuito, Art. diligence and Art. 1174 NCC 1733, NCC 6.Presumption of negligence There is a No presumption of presumption of fault fault or negligence or negligence 7.Governing law
COMMERCIAL LAW COMMITTEE
CHAIRPERSON: Garny Luisa Alegre ASST. CHAIRPERSON:Jayson O’S Ramos EDP: Beatrix I. Ramos SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws); Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)
San Beda College of Law
55 MEMORY AID
Law on common carriers Law on obligations and contracts e.
GOVERNING LAWS A. Domestic/inter-island/coastwise Applicable to Land, Water, and Air transportation 1. Civil Code - primary 2. Code of Commerce (Arts. 349, 379, 573-734, 580, 806-845) - suppletory B. International/foreign/overseas (Foreign country to Philippines) Applicable to Water/maritime and Air transportation The law of the country of destination generally applies. 1. Civil Code - primary 2. Code of Commerce - suppletory 3. Others - suppletory a. Water/maritime: Carriage of Goods by Sea Act (COGSA) b. Air: Warsaw Convention I. NEW CIVIL CODE (Arts. 1732-1766) REQUIREMENT OF EXTRAORDINARY DILIGENCE Rendition of service with the greatest skill and utmost foresight. (Davao Stevedore Co. v. Fernandez) Rationale: 1. From the nature of the business and for reasons of public policy (Art. 1733) 2. Relationship of trust 3. Business is impressed with a special public duty 4. Possession of the goods 5. Preciousness of human life A common carrier is not an absolute insurer of all risks of travel. COVERAGE 1. Vigilance over goods (Arts. 1734-1754); and 2. Safety of passengers (Arts. 1755-1763). PASSENGER A person who has entered into a contract of carriage, express or implied, with the carrier. They are entitled to extraordinary diligence from the common carrier. The following are not considered passengers, and are entitled to ordinary diligence only: a. One who has not yet boarded any part of a vehicle regardless of whether or not he has purchased a ticket; b. One who remains on a carrier for an unreasonable length of time after he has been afforded every safe opportunity to alight; c. One who has boarded by fraud, stealth, or deceit; d. One who attempts to board a moving vehicle, although he has a
ticket, unless the attempt be with the knowledge and consent of the carrier; One who has boarded a wrong vehicle, has been properly informed of such fact, and on alighting, is injured by the carrier; Invited guests and accommodation passengers. (Lara vs. Valencia) One who rides any part of the vehicle which is unsuitable or dangerous or which he knows is not designed or intended for passengers.
DEFENSES OF A COMMON CARRIER IN THE CARRIAGE OF GOODS CASO FORTUITO/FORCE MAJEURE Requisites: a. Must be the proximate and only cause of the loss b. Exercise of due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster (Art. 1739) c. Carrier has not negligently incurred in delay in transporting the goods (Art. 1740) Fire is not considered a natural disaster or calamity as it arises almost invariably from some act of man. (Eastern Shipping Lines Inc. vs. IAC) Mechanical defects are not force majeure if the same was discoverable by regular and adequate inspections. (Notes and Cases on the Law on Transportation and Public Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.120122) 2. ACTS OF PUBLIC ENEMY Requisites: a. Must be the proximate and only cause of the loss b. Exercise of due diligence to prevent or minimize the loss before, during or after the act causing the loss, deterioration or destruction of the goods (Art. 1739) 3. NEGLIGENCE OF THE SHIPPER OR OWNER a. Sole and proximate cause: absolute defense b. Contributory: partial defense. (Art. 1741) 4. CHARACTER OF THE GOODS OR DEFECTS IN THE PACKING OR IN THE CONTAINER Even if the damage should be caused by the inherent defect/character of the goods, the common carrier must exercise due diligence to forestall or lessen the loss. (Art. 1742) The carrier which, knowing the fact of improper packing of the goods upon ordinary observation, still accepts the goods notwithstanding such condition, is not relieved of liability or loss or injury resulting therefrom. (Southern Lines, Inc. v. CA, 4 SCRA 258) 5. ORDER OR ACT OF PUBLIC AUTHORITY
COMMERCIAL LAW COMMITTEE
CHAIRPERSON: Garny Luisa Alegre ASST. CHAIRPERSON:Jayson O’S Ramos EDP: Beatrix I. Ramos SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws); Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)
Navidad.. (Ganzon v. Shirley Mae Tabangcura. 179 SCRA 95) It is the duty of common carriers of passengers to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to enter. Perez) The carrier is liable when its personnel allowed a passenger to drive the vehicle causing it to collide with another vehicle resulting to the injuries suffered by the other passengers. however. 1763 be on duty at the time of the act. The duty which the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom (Dangwa Trans Co. where the officer acts without legal process. (La Mallorca v. (MRR vs. 1738) Delivery of goods to the custom authorities is not delivery to the consignee. limited The employee must by Art. ) All persons who remain on the premises within a reasonable time after leaving the conveyance are to be deemed passengers. 3. 16 SCRA 641) CARRIAGE OF PASSENGERS Parties 1. Abiotiz Shipping Corporation v. (Art. Ramos SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). (Maranan v. CA. CA 161 SCRA 646) Diligence in the selection and supervision of employees under Article 2180 of the Civil Code cannot be interposed as a defense by the common carrier because the liability of the carriers arises from the breach of the contract of carriage. 1736) It remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or owner has made use of the right of stoppage in transitu. 1743). Manila Electric Co. Jose Fernando Llave (Insurance). CA. 1737) It continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination until the consignee has bee advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. or deterioration of the goods Cause of liability Death or injury to the passengers Duration of liability From the time the goods are unconditionally placed in the possession of. (Art. (Del Prado v. Binamira. 2. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Bon Vincent Agustin (Corporation Law). 17 SCRA 739 . 101 Phil 120) The duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip. loss. 52 Phil 900) LIABILITY OF A COMMON CARRIER FOR DEATH OR INJURIES TO PASSENGERS DUE TO ACTS OF ITS EMPLOYEES AND OTHER PASSENGERS OR STRANGERS IN COMMERCIAL LAW FOR ACTS OF ITS EMPLOYEES FOR ACTS OF OTHER PASSENGERS OR STRANGERS Required diligence and defense Extraordinary Ordinary diligence diligence Nature of liability Tort. Common carrier Passenger CARRIAGE OF GOODS 1. Common carrier Shipper Consignee Delay in delivery. vs. and received by the carrier for transportation until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive them. Consequently. and they are liable for injuries suffered from the sudden starting up or jerking of their conveyances while doing so. CHAIRPERSON:Jayson O’S Ramos EDP: Beatrix I. 2176.San Beda College of Law 56 MEMORY AID Said public authority must have the power to issue the order (Art. Not absolute. (Lu Do v. CA 202 SCRA 574). but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. Inc. John Lemuel Gatdula (Banking Laws). destruction. (Art. the common carrier will be held liable. and includes a reasonable time to see after his baggage and prepare for his departure. The defense under said articles is applicable to negligence in quasidelicts under Art. Aldrich Del Rosario (Transportation Laws). 2. Karl Steven Co (Special Laws). COMMERCIAL LAW COMMITTEE CHAIRPERSON: Garny Luisa Alegre ASST. Robespierre CU (Law on Intellectual Property) .. (LRTA v. Ballesteros.
if it is reasonable and just under the circumstances and has been fairly and freely agreed upon. CA. Caso fortuito a. Art. 245 SCRA 796) Defenses 1. earthquake. Jose Fernando Llave (Insurance). 1744. Flood. v. Dollar. Fixed amount of liability: A contract fixing the sum to be recovered by the owner or shipper for the loss. by COMMERCIAL LAW COMMITTEE CHAIRPERSON: Garny Luisa Alegre ASST. no. Act of the public enemy in war. Limited liability for delay: An agreement limiting the common carrier’s liability for delay on account of strikes or riots (Art. That the carrier shall exercise a degree of diligence less than that of a good father of a Dispensing with or lessening the extraordinary family over the movable transported. Exercise of extraordinary extraordinary diligence (Art. hence the (Mirasol v. just and not contrary to public policy. from extraordinary to ordinary diligence or diligence of a good father of a family. by posting of notices. (Coastwise Lighterage Corp. storm. 4) Stipulation limiting liability when a passenger is carried gratuitously. 1734) Valid stipulations diligence IN COMMERCIAL LAW 1. Aldrich Del Rosario (Transportation Laws). John Lemuel Gatdula (Banking Laws). (Art. Stipulation limiting liability to the value of the goods appearing in the bill of lading. (Art. Karl Steven Co (Special Laws). 1748) 4. (Art. but not for willful acts or gross negligence. whether international or civil c. destruction or deterioration of the goods. Ramos SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). b) Supported by a valuable consideration other than the service rendered by the carriers. (Art. 1756) Special circumstances: 2. 53 PHIL 124) burden of explaining should fall on the carrier. responsibility of a common carrier for the 5. Order or act of competent public authority (Art. lighting. provided it be: a) In writing. unless the shipper or owner declares a greater value. CHAIRPERSON:Jayson O’S Ramos EDP: Beatrix I. and c) Reasonable. Act or omission of the shipper or the owner of goods d. signed by the shipper or owner. Reduction of degree of diligence to ordinary diligence. Robespierre CU (Law on Intellectual Property) . Ordinary circumstance: Exercise of 1. to transport the passenger safely. 1744) 2. Shirley Mae Tabangcura. 1745. (Art. 1735) (Art.1735 Civil Code Art. Mere proof of delivery of goods to a carrier in good order and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima facie case against the carrier.San Beda College of Law 57 MEMORY AID Presumption of negligence Art. 1749) The diligence required in the carriage of the goods may be reduced by only one degree. 2. or other natural disaster or calamity (plus force majeure) b. The character of the goods or defects in the packing or in the containers e. 1750) 3. That the carrier shall not be responsible safety of passengers imposed by law by for the acts or omissions of his or its stipulation. 1758) Void stipulations 4. Bon Vincent Agustin (Corporation Law).1755 Civil Code Reason: As to when and how goods were Reason: The contract between the passenger damaged in transit is a matter peculiarly within and the carrier imposes on the latter the duty the knowledge of the carrier and its employees.
CHAIRPERSON:Jayson O’S Ramos EDP: Beatrix I. (Art. violence or force is dispensed with or diminished. vehicle. Robespierre CU (Law on Intellectual Property) .San Beda College of Law 58 MEMORY AID employees. 1757) COMMERCIAL LAW COMMITTEE CHAIRPERSON: Garny Luisa Alegre ASST. Bon Vincent Agustin (Corporation Law). Jose Fernando Llave (Insurance). Karl Steven Co (Special Laws). 6. That the carrier’s liability for acts committed by thieves or robbers who do not act with grave or irresistible threat. Ramos SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). 1745) IN COMMERCIAL LAW statements on tickets or otherwise. John Lemuel Gatdula (Banking Laws). That the carrier is not responsible for the loss. destruction or deterioration of the goods on account of the defective condition of the car. ship or other equipment used in the contract of carriage. (Art. Aldrich Del Rosario (Transportation Laws). Shirley Mae Tabangcura. 7.
Defense of due diligence in the selection and supervision of employees is available. Domestic Air Transportation. Culpa contractual (breach of contract) Only the carrier is primarily liable and not the driver. 349-379) Applicability 1. Exception: maritime tort resulting in collision. Even where overbooking of passengers is allowed as a commercial practice. Macondray Company Inc. (Commercial Law Review. An open-dated ticket constitutes a complete contract between the carrier and passenger. or loss of. One exempting the 1. (Fabre vs. 2180. 2. CA.) IMPORTANT CONCEPTS: 1. Domestic land and water/maritime transportation. freight (H. (Lufthansa German Airlines vs. (Singson vs. (KLM Royal Dutch Airlines vs. An unqualified higher value and limitation of liability to pays a higher rate of an agreed valuation. 282 SCRA 149) 4. (Zalamea vs. (Philippine Airlines vs. An airline company which issued a confirmed ticket to a passenger covering successive trips on different airlines can be held liable for damages occasioned by “bumping off” by one of the successive airlines. An airline ticket providing that carriage by successive air carriers is to be regarded as a “single operation” is to make the issuing carrier liable for the tortuous conduct of the other carrier. Basis: Art. Culpa criminal (criminal negligence) The driver is primarily liable. the airline company would still be guilty of bad faith and still be liable for damages if it did not properly inform passenger that it could breach the contract of carriage even if they were confirmed passengers. CA. (See notes on Collision) 3. NCC. (Pandect of Commercial Law and Jurisprudence.Arts. RPC. 1998 and 2000. In case of flight diversion due to bad weather or other circumstances beyond the pilot’s control. the relation between the carrier and the passenger continues until the latter has been landed at the port of destination and has left the carrier’s premises. 228 SCRA 23) 3. 100. The carrier is subsidiarily liable only if the driver is convicted and declared insolvent. 1733-1753 2003 CONCURRING CAUSES OF ACTION ARISING FROM THE NEGLIGENT ACT OF THE COMMON CARRIER 1.E. unless the its own negligence. 65 SCRA 237) II.RULES ON PASSENGERS’ BAGGAGE IN THE CUSTODY OF IN THE CUSTODY THE PASSENGERS OF THE COMMON (HAND-CARRIED) CARRIER (CHECKED-IN) Legal nature of the baggage Necessary deposit Considered as “goods” Required diligence by the common carrier Diligence of a Extraordinary depositary (ordinary diligence diligence) Applicable rules Arts. Justice Jose Vitug. CA. Basis: Art. 238 SCRA 290) 5. Heacock Company vs. the airline company is liable if it refused to confirm a passenger’s flight reservation. Obligations of the carrier . (Shewaram vs. Culpa aquiliana (quasi-delict) The carrier and driver are solidarily liable as joint tortfeasors. No defense of due diligence in the selection and supervision of employees. 226 SCRA 423) 2.1759. Basis: Art. the drivers as well as the owners of the two vehicles are jointly and severally liable for damages.) 2. CA) LIMITATIONS AS TO CARRIER’S LIABILITY INVALID AS BEING VALID & CONTRARY TO ENFORCEABLE PUBLIC POLICY 1. shipper declares a 2. One limiting the carrier from any and liability of the carrier all liability for loss or to an agreed damage occasioned by valuation. convenience and safety of its stranded passengers until they have reached their final destination. Hence. Bill of lading 2. 2004 ed. because there is no privity between the driver and the passenger. CODE OF COMMERCE A. The carrier should necessarily exercise extraordinary diligence in safeguarding the comfort. 17 SCRA 606) SPECIAL RULES ON LIABILITES OF AIRLINE CARRIERS 1. NCC. CA.) & However. Cesar Villanueva. 1997 ed. CA. In case of injury to a passenger due to the negligence of the driver of the bus on which he is riding and of the driver of another vehicle. the carrier cannot limit its liability for injury to. A printed provision in the ticket limiting liability only to its own conduct is not enough to rebut that liability. It makes no difference that the liability of the bus driver and owner springs from contract while that of the owner and driver of the other vehicle arises from quasi-delict. OVERLAND TRANSPORTATION (Arts. PAL. goods shipped where such injury or loss was caused by its own negligence.
& Hernando. 6. Best evidence of the existence of the contract of carriage of cargo (Art. Rules: 1. or substances including dynamite and other explosives 2. springs from either a relation of agency between him and the shipper. capture by enemies and the like 7.) Goods are injurious to health 6. 8. (Compania Maritima vs. Ambiguity is construed against the carrier. 31 Phil 1). and the vessel indicated in the bill of lading by which the goods are to be shipped is already in the port where the goods are held for shipment. Received .) 5. The right of a party to recover for loss of shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier. Foul – One which contains a notation thereon indicating that the goods covered by it are in bad condition.) Goods sought to be transported are dangerous objects. 9. Instances when the carrier may validly refuse to accept the goods include the ff: 1. although the instrument is oftentimes drawn up only by the consignor and carrier. (Fisher vs. 3. Contract to transport and deliver goods as stipulated 5. On board . R. 4. Through – One issued by the carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer. becomes bound by all the stipulations contained therein by making a claim for loss on the basis of said bill of lading. Negotiable . Aquino. PAL Inc. Symbol of the goods OBLIGATIONS OF THE CARRIER A.one in which it is stated that the goods referred to therein will be delivered to the bearer or to the order of any person named therein. 3. Receipt of cargo 4. (Notes and Cases on the Law on Transportation and . The consignee. 2.one in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. It is not indispensable for the creation of a contract of carriage.) Goods are unfit for transportation 3.) Acceptance would result in overloading 4. Functions: 1. 10. 353) 2.issued when the goods have been actually placed aboard the ship with very reasonable expectation that the shipment is as good as on its way. 12 SCRA 213) 2. Insurance Company of North America. T. 5. IAC) 4. Right of abandonment Notice of damage Combined carrier agreement BILL OF LADING The written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or to his order. Port – One which is issued by the carrier to whom the goods have been delivered.P. 2004 ed. p.261) Kinds: 1. which bill of lading is honored by the second and other interested carriers who do not issue their own bills. Duty to accept the goods GENERAL RULE: A common carrier cannot ordinarily refuse to carry a particular class of goods.) Contrabands or illegal goods 5. Document of title 3. 7.One in which it is stated that the goods referred to therein will be delivered to a specified person. vs. Non-negotiable .) Failure to tender goods on time. (Notes and Cases on the Law on Transportation and Public Utilities. 5. Acceptance of the bill of lading without dissent raises the presumption that all the terms therein where brought to the knowledge of the shipper and agreed to by him and. Custody – One wherein the goods are already received by the carrier but the vessel indicated therein has not yet arrived in the port.) Goods will be exposed to untoward danger like flood.3. EXCEPTION: For some sufficient reason the discrimination against the traffic in such goods is reasonable and necessary.) Strike 9. (Mendoza vs. 4. Spent – One which covers goods that already have been delivered by the carrier without a surrender of a signed copy of the bill. and who becomes a party thereto when he demands fulfillment of that stipulation. Clean – One which does not indicate any defect in the goods. (Art. Yangco Steamship Co. 1311 (2).) Goods like livestock will be exposed to disease 8. in the absence of fraud or mistake. (Sea-Land Services Inc. or his status as stranger in whose favor some stipulation is made in said contract. the contract being one of adhesion. he is estopped from thereafter denying that he assented to such terms.
rule on Paramount water.1747) RIGHT OF CONSIGNEE TO ABANDON GOODS Instances: 1. Within a reasonable time. when a common carrier accepts cargo for shipment for valuable consideration. Inc. and it is charged with liability therefore. 358 Code of Commerce) 3. the carrier is exempted from liability if carriage is insisted upon by the shipper. the contract limiting the common carrier’s liability cannot be availed of in case of loss or deterioration of the goods (Art.) Prescriptive Period Not provided by Article 366. The goods should be delivered to the consignee or any other person to whom the bill of lading was validly transferred or negotiated. provided its objections are stated in the bill of lading.68) In case of carriage by railway. it takes the risk of delivering it in good condition as when it was loaded. Domest 1. Lim Ponzo) Purpose of notice: To inform the carrier that the shipment has been damaged. destined (Art. C Not . 365).1740) d. If delay is without just cause. Aquino. T. Partial nondelivery. no matter from what cause it may have arisen. Carriage of goods 3. Duty to deliver the goods Not only to transport the goods safely but to the person indicated in the bill of lading.3 (6) Applicability 1. (PAL vs. 366) Requisites for applicability: 1. Latent damage: shipper should file a claim against the carrier within 24 hours from delivery. Carriage of goods 4. Natural disaster shall not free the carrier from responsibility (Art. Sweetlines. Bill of lading was issued: within 10 years. Water/maritime transpor transportation tation 3. Clause air 2. Land/water/air transportation 3. Goods shipped are damaged Rules: a. R. The filing of notice of claim is a condition precedent for recovery. Note: These rules does not apply to misdelivery of goods. Land. Civil Code rules on prescription apply. 371). However. If despite the notice of claim. 1. in such absence. Carrier is bound to fulfill the contract and is liable for any delay. where the goods are useless without the others (Art. Goods are rendered useless for sale or consumption for the purposes for which they are properly NOTICE OF DAMAGE (ART. Shorter period may be stipulated by the parties because it merely affects the shipper’s remedy and does not affect the liability of the carrier. No bill of lading was issued: within 6 years 2.Public Utilities. (ART. & Hernando. and In case of delay through the fault of the carrier (Art. Internationa ic/interl/ island/co overseas/foreign astwise (from foreign transpor country to Phils. 2. Carriag e of goods Notice of damage 1. Patent damage: shipper must file a claim against the carrier immediately upon delivery (it may be oral or written) b. Time of delivery Stipulated in Contract/Bill of Lading 1. ARTICLE 366 COGSA Sec.) tation Note: subject to the 2.P. (PHILAMGEN vs. Effects of delay a. and to give it an opportunity to make an investigation and fix responsibility while the matter is fresh. 2. Carrier is bound to forward them in the 1st shipment of the same or similar goods which he may make to the point of delivery. p. 1. Merely suspends and generally does not terminate the contract of carriage b. (Roldan vs. CA) B. No stipulation 1. 363). action must be filed in court. Carrier remains duty bound to exercise extraordinary diligence c. 2004 ed. the carrier refuses to pay. Thus. Domestic/interisland/coastwise transportation 2.
Aquino & Hernando. 2. (Arts. Merchant vessel 2. (Notes and Cases on the Law on Transportation and Public Utilities.D. (ICTSI vs. 6106 P. a jus in re. (PNB vs. except the following following preferences in the preferences in the order stated: order stated: 1. EXCEPTION: A combined carrier agreement where a carrier makes itself liable assuming the obligations and acquiring as well the rights and causes of action of those which preceded it. 156 SCRA 169). 37 Phil. 573. and to maritime conveyance of persons and property. in satisfaction of which a vessel may be validly arrested and sold. CA. vs. 1521 Effectivity date 1969 1978 Applicability Overseas shipping Both domestic and only overseas shipping Kind of sale Judicial Judicial and extrajudicial Order of Preference A preferred The preferred mortgage shall have mortgage lien shall priority over all have priority over all claims against the claims against the vessel. Charter party 7. Civil One year from the Code applies. Causes of revocation of voyage 5. The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel.similar to transactions over real property with respect to effectivity against third persons which is done through registration. 72). Justice Jose Vitug. (Bar Review Materials in Commercial Law. (Pandect of Commercial Law and Jurisprudence. Jorge Miravite. Expenses and the proceedings. equipping and provisioning of the vessel in the preparation of a voyage. the actual value of the vessel and the freight money. (Ship Mortgage Decree of 1978) MARITIME LIEN It constitutes a present right of property in the ship.A. 337 SCRA 381) ORDER OF PREFERENCE IN CASE OF SALE OF VESSEL R. to ships. fees allowed and A. Participants in maritime commerce 6. COMBINED CARRIER AGREEMENT (ART. 217 SCRA 359). date of delivery (delivered but damaged goods).the liability of the owner of the value of the vessel is limited to the vessel itself (Doctrine of Limited Liability). or date when the vessel left port or from the date of delivery to the arrastre (nondelivery or loss).2. their crews and navigation. each carrier is responsible for its particular leg in the contract. 3- Prescriptive period None provided. 2 2.254) Maritime laws apply only to maritime trade and sea voyages. whether foreign or otherwise. MERCHANT VESSEL Vessel engaged in maritime commerce. Loans on bottomry and respondentia 8. MARITIME COMMERCE (Arts. Accidents in maritime commerce MARITIME/ADMIRALTY LAW It is the system of laws which particularly relates to the affairs and business of the sea. which stands as the guaranty for their settlement. Real . The evidence of real nature is shown by: 1) the limitation of the liability of the agents to . 1997 ed. It refers to a contract for the unloading of goods from a vessel. to be afterward enforced in admiralty by process in rem. 320 SCRA 244) CHARACTERISTICS OF MARITIME TRANSACTION 1. 373) GENERAL RULE: In case of a contract of transportation of several legs. it shall have priority over the said mortgage lien. Judicial costs of 1. as well as mortgage liabilities. CA. 337 SCRA 381) If the maritime lien arose prior to the recording of a preferred mortgage. and 2) the right to retain the cargo and embargo and detention of the vessel (Luzon Stevedoring Corp v. CA. (Aboitiz Shipping Corp. 2002 ed. Prudential Guarantee.) Arrastre service is not maritime in character. 585) They are susceptible to maritime liens such as for the repair.) Constitutes property which may be acquired and transferred by any of the means recognized by law. (PNB vs. Rivera. p. citing Francisco. General Accident Fire and Life Assurance Corp. except the vessel. They shall continue to be considered as personal property. Hypothecary . Maritime lien and Preference of Credit 3. 573-869) IMPORTANT CONCEPTS: 1. (Rubiso vs. Doctrine of limited liability 4.
2) equipments. including contract salvage. the obligation is extinguished. 687) properly destined (Art. 587). 5. 4. 3) freightage. Insurance Code). Art. In case of civil 1. Goods are 3. Salaries and wages of the Captain and Crew of the vessel during its last voyage. Damages arising out of tort. In case of the (2). Preferred mortgage registered prior in time. and 4) insurance proceeds. 2. 138. Art. Escano. Injury or damage due to shipowner or to the concurring negligence of the shipowner and the captain. They will then be satisfied from the proceeds of the sale subject to the order of preference. from 2. The vessel is insured (Vasquez vs. Taxes due the Philippine Government. Art. 365). without the others 2. 3. San Diego 77 Phil 730). . where the indemnities to third goods are useless persons (Art. Crew’s wages. 371). Carrier there was should actual total pay the loss of the shipper vessel. Preferred mortgages registered prior in time. Effects 1. insured as if 2. Insurance Code. CA 156 SCRA 169). 4. and 7. 687).2. DOCTRINE OF LIMITED LIABILITY (HYPOTHECARY RULE) Cases where applicable: 1. Transfer ownership of of the vessel ownersh from the ip on shipowner to the the shippers goods or insurer. In case of civil liability from indemnities to third persons (Art. costs taxed by the court and taxes due to the Government. the market value of Effect of sale: All pre-existing claims in the vessel are terminated. and indemnity due shippers for the value of goods transported but which were not delivered to the consignee. 643 – liability for wages of the captain and the crew and for advances made by the ship agent if the vessel is lost by shipwreck or capture GENERAL RULE: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessel is entirely lost. 2. supplies and fuel during its last voyage. CA 138 SCRA 553). Claims under Workmen’s Compensation (Abueg vs. In case there is no total loss and the vessel is not abandoned. IAC. In case of delay through the fault of the carrier (Art. and 3. 590 – indemnities from negligent acts of the captain (not the shipowner or ship agent) 3. 363). Transfer of 1. bottomry loans. Maritime liens arising prior in time to the recording of the preferred mortgage. Salvage. Abandonment of the vessel is necessary to limit the liability of the shipowner. 2. Art. and provisioning of food. 138. 5. 5. 837 – collision 4. Costs of repair and equipment of the vessel. General average. the shipper insurer must to the pay the carrier. Expenses for repair on vessel completed before loss. Collision between two negligent vessels. Sec. RIGHT OF ABANDONMENT SHIPOWNER OR CONSIGNEE SHIP AGENT What may be abandoned Vessel Goods shipped Instances 1. In case of leakage rendered useless for of at least ¾ of the sale or consumption contents of a cargo for the purposes for containing liquids which they are (Art. RIGHT OF SHIPOWNER OR SHIP AGENT TO ABANDON VESSEL Instances: 1. 3. 6. 156 SCRA 169) The interest extends to: 1) the vessel itself. General average or salvage including contract salvage. (Luzon Stevedoring v. In case of leakage of at least ¾ of the contents of a cargo containing liquids (Art. and 3. In case of constructive loss of the vessel (Sec. 6. 166 SCRA 183) EXCEPTIONS: 1. 3. 2. The only instance were abandonment is dispensed with is when the vessel is entirely lost (Luzon Stevedoring vs. 4. (Chua v. 587 – civil liability for indemnities to third persons 2. and 6. (Art. Partial nonliability from delivery. 587).
e. 3. fail to comply with his orders or are wanting in discipline. Robbery. Nature of position (3-fold character): 1. Filipino citizen. Habitual drunkenness. d. 3. while his possession continues. 2. but are particularly used in accordance with the size of the vessel governed and the scope of transportation. equip. Command the crew and direct the vessel to its port of destination. (Art. armament. whether authorized or not. 586) 2. Shipowners and ship agents B. prohibiting the departure of ships or goods from some or all the ports of such state until further order. large and overseas. and small and coastwise. Qualifications: 1. Contract in the name of the owners with respect to repairs. respectively. i. Must have passed the required physical and mental examinations required for licensing him as such. Capacity to trade. Order repair of vessel to enable it to continue its voyage. to be cut off. he is solidarily liable with the ship owner. (Art. details of equipment. Order a new voyage. (Art. make a new charter or insure the vessel after obtaining authorization from the shipowner or if granted in certificate of appointment. (Art. Ship agent (naviero) Person entrusted with provisioning and representing the vessel in the port in which it may be found. Prohibition to receive cargo at destination.609. 4. Captains and masters of the vessel C. c. while on board vessel. except on the following grounds: a. and freight of the vessel. as far as human power can effect it. Embargo – A proclamation or order of a state. CAUSES OF REVOCATION OF VOYAGE 1. 4. 603) If for a definite period. he may discharge them at his discretion. (Art. Interdiction of commerce – A governmental prohibition of commercial intercourse intended to bring about an entire cessation for the time being of all trade whatever. Damage caused to the vessel or to its cargo through malice or manifest or proven negligence. e. 4. 610) . 2. 5. 609) Inherent powers: 1. 5. Blockade. Pilot A. equip and provision the vessel. Representative of the government of the country under whose flag he navigates. (Art. SHIPOWNERS AND SHIP AGENTS Shipowner (proprietario) Person who has possession. PARTICIPANTS IN MARITIME COMMERCE A. Supply. CAPTAINS AND MASTERS They are the chiefs or commanders of ships. 2. provisions of food and fuel. 2. Technical director of the vessel. and 6. Insubordination in serious matters. Inability of the vessel to navigate. Supercargoes E. Theft. 587) Duty of Ship Agent to Discharge the Captain and Members of the Crew If the seamen contract is not for a definite period or voyage. 3. General agent of the shipowner. 605) B. he may not discharge them until after the fulfillment of their contracts. Discharge duties of the captain. 3. 2. Embargo.. 3. and provision the vessel. Powers and functions: 1. 640) Terms: 1. also includes the shipowner. Not a mere agent under civil law. The terms have the same meaning.the goods at the point of destinat ion. Appoint crew in the absence of ship agent. to repair. (Art. b. usually issued in time of war or threatened hostilities. All contracts of the captain. Loss and damage to the goods loaded on the vessel without prejudice to their right to free themselves from liability by abandoning the vessel to the creditors. Civil Liabilities of the Shipowner And Ship Agent 1. control and management of the vessel and the consequent right to direct her navigation and receive freight earned and paid. Blockade – A sort of circumvallation of a place by which all foreign connection and correspondence is. and all that relate to the requirements of navigation. Officers and crew of the vessel D. Legal capacity to contract. 2. War or interdiction of commerce. subject to Art. Impose correctional punishment on those who. 3. Make contracts for the charter of vessel in the absence of ship agent.
Be on deck while leaving or entering the port. For arrivals under stress. 3. Stay on board during the loading and unloading of the cargo. 4. OFFICERS AND CREW 1. 4. No liability for the following: 1. Crew No liability under the following circumstances: 1. Leave the vessel last in case of wreck. Change the course of the voyage on consultation with the captain and the officers of the boat. Demand a pilot while entering or leaving a port. etc. Comply with the requirements of customs. Hold in custody properties left by deceased passengers and crew members. Observe rules to avoid collision. Engineers 4. 647) Sailing Mate/First Mate Second chief of the vessel who takes the place of the captain in case of absence. (Art. Damages due to mutinies. If. Responsible for all the damages caused to the vessel and the cargo by reason of his negligence. Assign work to crew members. From the consignee of the vessel. Bring on board the proper certificate and documents and a copy of the Code of Commerce. From the consignee of the cargo. Keep the Binnacle Book. Accounting Book and Freight Book. 4. 6. Arrange well the cargo. If a disease breaks out and be officially declared an epidemic in the port of destination. 618) C. For deviations. By sale of part of the cargo. before beginning voyage. 4. Inventory the rigging and equipment of the vessel. 8. Damages caused to the vessel or to the cargo by force majeure. Losses and fines for violation of laws. Damages to vessel and to cargo due to lack of skill and negligence. 3. 612) A ship’s captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage (InterOrient Maritime Enterprises Inc. (Art. 12. (Arts. powers and responsibilities. 3. 10. 620) Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain towards Passengers and Cargoes 1. 5. at the port of arrival. (Art. 2. if laid up. health. 5. 2. 8. Obligations contracted for the repair. Provide himself with maps and charts with astronomical tables necessary for the discharge of his duties. 2. Thefts and robberies of the crew. Sources of funds to comply with the inherent powers of the captain (in successive order): 1. 628 . CA). Examine the ship before the voyage. 3. and provisioning of the vessel unless he has expressly bound himself personally or has signed a bill of exchange or promissory note in his name. 3. Preserve the hull and rigging of the vessel. assuming in such case their powers and responsibilities. 632) Engineers . 2. 627) Duties: 1.631) Second Mate Takes command of the vessel in case of the inability or disqualification of the captain and the sailing mate. 611) Duties: 1. following the decision of the captain in case of disagreement. Protest arrivals under stress and in case of shipwreck. 9. By drawing on the ship agent. sickness. 3. 7. 6. vs. 7. Damages due to misuse of power. Second Mate 3. or a naval war with the power to which the vessel was destined occurs. Follow instructions of and render an accounting to the ship agent. (Art. If the vessel should change owner or captain. By a loan on bottomry. 5. 5. 11. Keep a Log Book. (Art. 2. 4. Third in command Duties: 1. 2. or death and shall assume all of his duties. 2. Sailing Mate/First Mate 2. Damages due to nonobservance of marine regulations. equipment. Discipline the crew. (Art. captain attempts to change it. (Art.
necessary for the management. (Art. thus including the crew. 2.11. Accident caused by force majeure or natural calamity provided the pilot exercised prudence and extra diligence to prevent or minimize damages. 3.full payment. Not to change or repair the engine without authority of the captain. 4. 5. Physical incapacity. 2. 518) Liablity of Pilot GENERAL RULE: On compulsory pilotage grounds. Keep the engines and boilers in good condition. if before departure. By the month. PILOT A person duly qualified. maneuvers. the sailing mates. where he is present and in his absence. (Sec. and other instruments pertaining to the engines. T. and full.full payment. When two or more are hired. If death is natural: a. Bill of lading 3. and 3. compensation up to time of death if engaged on wage b. In charge of the motor apparatus. p. 2004 ed. the Harbor Pilot is responsible for damage to a vessel or to life or property due to his negligence. By share of profits or freightage. preferring Filipinos. if after departure 2. Duties: 1. to conduct a vessel into or out of ports. or from a port. 4. Perpetration of a crime. Loan on respondentia 6. or the ship’s company.wages up to the date of the capture. Supervise all personnel maintaining the engine. (Art. SUPERCARGOES Persons who discharges administrative duties assigned to him by ship agent or shippers. but not exceeding 1/5 of the crew. Repeated incapacity and negligence. full. and in their absence. Officers of the vessel but have no authority except in matters referring to the motor apparatus. 3. (Art. CA). the master does not surrender his vessel to the pilot and the pilot is not the master. 645) Complement of the Vessel All persons on board. Repeated insubordination. Hired by the ship agent. if by shares . EXCEPT: 1. 6. 649) E. and service. R.III PPA Admin Order 03-85) SPECIAL CONTRACTS OF MARITIME COMMERCE 1. 637) Rules in case of Death of a Seaman The seaman’s heirs are entitled to payment as follows: 1. (Art. or in certain waters. Inform the captain of any damage to the motor apparatus. While in exercising his functions a pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of the ship. 2. he may take in foreigners. Habitual drunkenness. 634) Classes of Seaman’s Contracts 1. Charter party 2. Desertion. if captured in defense of vessel .none. Aquino. Countermand or overrule by the master of the vessel in which case the registered owner of the vessel is liable. 3. Master pro hac vice for the time being in the command and navigation of the ship. Keep an Engine Book. 4. D. Loan on bottomry 5. engineers. Art. Does not include the passengers or the persons whom the vessel is transporting. 2. the captain hires them. 632) Crew The aggregate of seamen who man a ship. want of discipline. By the voyage. 6. (Art. spare parts. & Hernando. 5. Contract of transportation of passengers on sea voyages 4.half of amount if death occurs on voyage out. if on voyage in c. keeping an account and record of transaction as required in the accounting book of the captain. Marine insurance CHARTER PARTY A contract by virtue of which the owner or agent binds himself to transport merchandise or persons for a fixed price. Just Causes for the Discharge of Seaman While Contract Subsists 1. one of them shall be the chief engineer. or some principal part thereof is let/leased by the . if captured due to carelessness .P. and licensed. The term generally connotes a person taken on board at a particular place for the purpose of conducting a ship through a river. if by voyage . There are occasions when the master may and should interfere and even displace the pilot. as when the pilot is obviously incompetent or intoxicated (Far Eastern Shipping Company vs. A contract by which an entire ship. Compulsory Pilotage – States possessing harbors have enacted laws or promulgated rules requiring vessels approaching their ports to take on board pilots licensed under the local laws. (Notes and Cases on the Law on Transportation and Public Utilities. from the captain to the cabin boy. road or channel. stokers and other employees on board not having specific designations. if death is due to defense of vessel .
(Art. command and navigation of the ship Common carrier is not converted to a private carrier. The vessel owner retains possession. accredit received persons Real contract goods from CONTRACT OF AFFREIGHTMENT (TIME OR VOYAGE CHARTER) Owner remains liable as carrier and must answer for any breach of duty Charterer is not regarded as owner. who thereby become the charter’s servants. the charterer assumes the customary rights and liabilities of the shipowner to third persons and is held liable for the expense of the voyage and the wages of the seamen. Inc. The new owner is not compelled to respect the charter party so long as he can load the vessel with his own cargo. 652 of the Code of Commerce Clauses Which May Be Included In a Charter Party Jason clause Clause paramount or paramount clause CHARTER PARTY An entire or complete contract. the new owner must respect the lease. either in whole or in majority part. (Art. possession and consequent control over the vessel’s navigation. Charterer Classes: 1. command and navigation to charterer Common carrier is converted to private carrier. The shipowner leases to the charterer the whole vessel. Bareboat or demise – The charterer provides crew. b. transferring to the latter the entire command. Because the charterer is treated as owner pro hac vice. who have legal control and possession of the vessel 2. lessee cannot give up the lease by paying a portion of the amount agreed upon.609) REQUISITES OF A VALID CHARTER PARTY 1. Captain in the absence of the ship agent or consignee and only if he acts in accordance with the instructions of the agent or owner and protects the latter’s interests. (Art. including the master and the crew. It transforms a common carrier into a private carrier. the charterer merely having use of the space in the vessel in return for his payment of the charter hired. Ship agent if authorized by the owner/s or given such power in the certificate of appointment. Time charter – vessel is chartered for a fixed period of time or duration of voyage. Freight 4. 689) Commercial concept law Consensual contract BAREBOAT OR DEMISE CHARTER Charterer becomes liable to others caused by its negligence Charterer regarded as owner pro hac vice for the voyage Owner of vessel relinquishes possession. Consent of the contracting parties 2. (Art. If the leased property is sold to one who knows of the existence of the lease. Ship owner or ship agent 2.598) 4. Charterer may subcharter entire vessel to 3rd person only if not prohibited in original charter. command and navigation of the ship. Contract of Affreightment – A contract whereby the owner of the vessel leases part or all of its space to haul goods for others. just for that one particular purpose only. 226 SCRA 476) Parties: 1. CA. except when the cause arises from the unworthiness of the vessel.owner to another person for a specified time or use. food and fuel. PERSONS WHO MAY MAKE A CHARTER 1. LEASE If for a definite period. vs. The charterer becomes the owner of the vessel pro hac vice. The charterer is liable as if he were the owner. The shipowner retains the possession. BILL OF LADING More like a private receipt which the captain gives to . Owner or owners of the vessel. Kinds: a. Compliance with Art. Voya ge or trip charter – the vessel is leased for one or series of voyages usually for purposes of transporting goods for charterer. (Planters Products.679) 3. Civil law concept CHARTER PARTY Charterer may rescind charter party by paying half of the freightage agreed upon. Existing vessel which should be placed at the disposition of the shipper 3. 2.
To substitu te another vessel if load is less than 3/5 of capacit y. Inability of the vessel to navigate. If the extra lay days terminate without the cargo being placed alongside the vessel. Blockade. consignees or owners shall contribute with the shipowner in general average. 2.) 6. 1997 ed. 689) 1. 3. (Arts. even though the transportation is domestic. Prohibition to receive cargo. 4. 5. Arrival at a port for repairs. 690) (Art 688) (Art. Sale by the owner of the vessel before loading by the charterer. 4. 5.) A clause in a charter party providing that the COGSA shall apply. not to accept cargo from others. contract or otherwise. To place in a vessel in a conditio n to navigat e. then to the extent thereof the provision of the bill of lading is void. 2. 7. 2. If the vessel is charter ed wholly. Error in tonnage or flag. War or interdiction of commerce. To pay the agreed charter price. 2. To pay freightage on unboarded cargo. 4. To pay losses to others for loading uncontracted cargo and illicit cargo. Return of the vessel due to pirates. To observe represe nted capacit y. (Pandect of Commercial Law and Jurisprudence. 679687) cargo within the lay days and extra lay days allowed. (Pandect of Commercial Law and Jurisprudence.bonus to be paid to the captain after the successful voyage. To unload cargo clandes tinely placed 4. 3. 2.A stipulation in a charter party that in case of a maritime accident for which the shipowner is not responsible by law. Embargo. subject to the extent that any term of the bill of lading is repugnant to the COGSA or applicable law. 1. 5. 3. Justice Jose Vitug. (Arts. 1. to bring cargo to nearest neutral port in case of war or blockad e. To leave the port if the charter er does not bring the CHARTERER 1. 3. To wait if the vessel needs repair. Primage . Terms: 1. By abandoning the charter and paying half of the freightage. and 5. Rights and Obligations of Parties SHIPOWNER OR SHIP AGENT 1. To pay expenses for deviation. Justice Jose Vitug. 669678) Rescission of a Charter Party At At Fortuitous charterer’s shipowner’s causes request request (Art. the cargo shippers. Demurrage – the sum fixed in the charter party as a remuneration to the owner of the ship for the detention of his vessel beyond the number of days allowed by the charter . 2. Failure to place the vessel at the charterer’s disposal. 1997 ed. enemies or bad weather.
(Magellan Manufacturing vs. insurance and freight. Amount of the loan and the premium stipulated. TRANSSHIPMENT OF GOODS The act of taking cargo out of one ship and loading it in another. (ART. Name. CA.727) 3. (ART.S. . Policy signed by the contracting parties and the broker taking part therein 3. is a violation of contract and infringement of right of shipper and subjects carrier to liability if freight is lost event by cause otherwise excepted. Extra Lay Days – days which follow after the lay days have elapsed. 7. 201 SCRA 102) LOAN ON BOTTOMRY AND RESPONDENTIA A real. USUAL FORMS OF CONSUMMATING CONTRACTS 1.days allowed to charter parties for loading and unloading the cargo. destination. F. by vessel itself and and repayable upon repayable upon safe arrival of cargo arrival of vessel at at destination. If done without legal excuse.I. If the effects on which the money is taken is not subjected to any risk. 4. Outside of the cargo. however competent and safe the vessel into which the transfer is made.A. or the transfer of goods from the vessel stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached. 2. may agree on any rate of interest. and which is lost if the latter are lost. Time for repayment. surname and domicile of the captain. (Art. 4.O. (ART. Exposure of security to marine peril. or the transfer for further transportation from one ship or conveyance to another. 3. Voyage during which the risk is run (Art. . C. whether ordinary or maritime. Forms: 1. 6. 5.721) BOTTOMRY/ RESPONDENTIA Not subject to Usury Law Liability of the borrower is contingent on the safe arrival of the vessel or cargo at destination The last lender is a preferred creditor ORDINARY LOAN (MUTUUM) Subject Law to Usury Not subject to any contingency (absolute liability) The first lender is a preferred creditor WHEN LOAN ON BOTTOMRY OR RESPONDENTIA REGARDED AS SIMPLE LOAN 1. Goods pledged to secure repayment. Deadfreight – the amount paid by or recoverable from a charterer of a ship for the portion of the ship’s capacity the latter contracted for but failed to occupy.free on board. Kind. 5. 2.B.729) Note: Under existing laws. – cost. (CB Circular 905) MARINE INSURANCE LOAN ON BOTTOMRY OR . C.726) 2. unilateral. 3. Public instrument 2. the residence of the owners the captain. 2.free alongside ship.party for loading or unloading or for sailing. Lay Days . which amount. by virtue of which one person lends to another a certain amount of money or goods on things exposed to maritime risks. with its earnings. It is not dependent on the ownership of the transporting ships or in the change of carriers. name and registry of the vessel. the balance will be considered a simple loan. 720) Contents: 1. . and 4.F. 719) 719) Who may contract LOAN ON BOTTOMRY Shipowner or ship Only the owner of agent. but rather on the fact of actual physical transfer of cargo from one vessel to another. F. Full amount of the loan is not used for the cargo or given on the goods if all of them could not have been loaded. & F. (Art. Private instrument (Art. the parties to a loan. 3. Obligation of the debtor conditioned only upon safe arrival of the security at the point of destination. is to be returned if the things are safely transported. surnames and domiciles of the borrower and the lender. Common elements: 1. LOAN ON RESPONDENTIA Definition Loan made by Loan taken on shipowner or ship security of the cargo agent guaranteed laden on a vessel. Lender loaned an amount larger than the value of the object due to fraudulent means employed by the borrower. Names. aleatory contract.cost and freight.
(Pandect of Commercial Law and Jurisprudence. (Art. (Art. (Art.Indemnity is paid after the loss has occurred In case of loss of the vessel due to a risk insured against. 812) The insurers (Art. and not the voyage. Agan. success. which accidentally ran aground. common safety factor. 4. deliberate sacrifice. the obligation of the borrower to pay is extinguished Real contract Hypothecary Nature of Bottomry/ Respondentia GENERAL RULE: The obligation of the borrower to pay the loan is extinguished if the goods given as security are absolutely lost by reason of an accident of the sea. Loss due to the barratry on the part of the captain. Loss due to the fault or malice of the borrower. (Sec. (Art. vs. and all damages or deterioration suffered by the vessel from departure to the port of destination. Not only is there absence of a marine peril. EXCEPTIONS: 1. 806) The person whose property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes general average. its cargo or and borne by both from real and respective owners. Insurance Code) 2. proper formalities and legal steps. Number of interests involved Only one interest Several interests involved involved Share in the damage or expense 100% share In proportion to the value of the owner’s property saved . and deliberateness. it is general average. do not constitute general average. Shipwreck AVERAGE An extraordinary or accidental expense incurred during the voyage in order to preserve the cargo. G.859) and lenders on bottomry and respondentia shall likewise contribute. 3. 31. vessel or both. Liability The owner of the All the persons goods which gave having an interest in rise to the expense or the vessel and the suffered the damage cargo therein at the shall bear this time of the average. in order to continue its voyage. (Art. where only the vessel or only the cargo is saved. vessel. the obligation of the insurer becomes absolute Consensual contract RESPONDENTIA Indemnity is paid in advance by way of a loan In case of loss of the vessel due to a marine peril. The same rule would apply to the hypothecation of the cargo by respondentia.) ACCIDENTS IN MARITIME COMMERCE 1. 809) 811) Requisites 1. Classes: 1. Inc. (Art. (A. 2. and 5. 1955) PARTICULAR OR GROSS OR SIMPLE GENERAL Definition Damages or Damages or expenses caused to expenses the vessel or cargo deliberately caused that did not inure to in order to save the the common benefit.732). known risk. L-6393. Justice Jose Vitug. It is the safety of the property. (Art.No. 101. Expenses incurred to refloat a vessel. 4. The cargo loaded on the vessel be different in from that agreed upon. Loss due to inherent defect. 810) occurrence of the average shall contribute to satisfy this average. Jan. Magsaysay. Particular or Simple Average 2. The value of what may be saved in case of shipwreck shall be divided between the lender and the insurer in proportion to the interest of each one. since a loan on bottomry partakes of the nature likewise of an insurance coverage to the extent of the loan accommodation. and to the cargo from the port of loading to the port of consignment. 3. Gross or General Average Where both vessel and cargo are saved. 1997 ed. 735) Note: If a vessel is hypothecated by bottomry only the excess is insurable. 2. and if it is proven that the goods were on board. Collision 4. The vessel was engaged in contraband. during the voyage designated. Arrival Under Stress 3. The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of the value over the amount secured by bottomry. Averages 2. which constitutes the true foundation of general average. Concurrence of Marine Insurance and Loan on Bottomry/Respondentia 1. common danger. it is particular average.R.
Fuel for the vessel if there is more than sufficient fuel for the voyage. privateers. (Art. 813814) GOODS NOT COVERED BY GENERAL AVERAGE EVEN IF SACRIFICED 1. 809 Art.Right to recover No reimbursement There may be reimbursement Kinds (not exclusive) Art. Entry of the resolution in the logbook 4. Those which are below the upper deck. Delivery of the minutes to the maritime judicial authority of the first port. When lawful The inability to continue voyage is due to lack of provisions. (Art. It is the duty of the captain to continue the voyage without delay after the cause of the arrival under stress has ceased failing in such duty renders him liable. (ART. If deck cargo is loaded with the consent of the shipper on coastwise shipping. within 24 hours from arrival. it would not be entitled to reimbursement because there is violation of the Y-A Rules. preferring the heaviest one with the least utility and value. 816) York-Antwerp (Y-A) Rules on Determining Liability for Averages With Regard To Deck Cargo 1. well-founded fear of seizure. In overseas shipping. (ART. (Art. 820) Who bears expenses: The shipowner or ship agent is liable in case of unlawful arrival under stress. Goods not recorded in the books or records of the vessel. 4. beginning with the one with greatest weight and smallest value. the existence of the cargo on board should be proven by means of the bill of lading. DOMESTIC Deck cargo is allowed INTERNATIONAL Deck cargo is not allowed With shipper’s consent General average Particular average Without shipper’s consent Captain is liable Captain is liable ARRIVAL UNDER STRESS (ARRIBADA) The arrival of a vessel at the nearest and most convenient port instead of the port of destination.855) 2. (Arts. But they shall not be liable for the damages caused by reason of a lawful arrival. Reason: In domestic shipping. York-Antwerp Rule) Jettison Act of throwing cargo overboard in order to lighten the vessel. Resolution of the captain 3. Those which are on the deck. 811 Procedure for recovery 1. Order of goods to be cast overboard: 1.) In order that the jettisoned goods may be included in the gross or general average. 3. and Malice. 6. 3. the vessel is exposed for many days to perils of the sea. 825) .855 (2)) 3. However. 819) 1. pirates. (Art. Justice Jose Vitug. voyages are usually short and the seas are generally not rough. (Rule IX. it must always contribute to general average. When unlawful Lack of provision s due to negligenc e to carry accordin g to usage and customs. 821) 2. 2. (Pandect of Commercial Law and Jurisprudence. Risk of enemy not well known or manifest Defect of vessel due to improper repair. If deck cargo is loaded with the consent of the shipper on overseas trade. Assembly and deliberation 2. or accidents of the sea disabling it to navigate. Ratification by captain under oath. (Art. lack of foresight or skill of captain. 2. if during the voyage the vessel cannot continue the trip to the port of destination. and is prohibited in international/overseas/foreign shipping. it must always contribute to general average and if jettisoned would be entitled to reimbursement. Goods carried on deck. there must first be an assembly before departure. 1997 ed. but should the same be jettisoned. negligenc e. 815) Jettisoned goods are not res nullius nor deemed “abandoned” within the meaning of civil law so as to be the object of occupation by salvage. Detailed minutes 5. Deck cargo is allowed only in domestic/coastwise/inter-island shipping. (Art. in case the cause has been risk of enemies.
831) . 3. Third zone – time when collision is certain and time of impact. the fault is presumed to be imputable to the one who arrived later. the smaller should give the right of way to the larger one. Nautical Rules to Determine Negligence 1. Even if such sudden movement is wrong. No rule is as yet applicable for none is necessary. 828) Doctrine of Inscrutable Fault – In case of collision where it cannot be determined which between the two vessels was at fault. Second zone – time between moment when risk of collision begins and moment it becomes a practical certainty. There is a presumption against the vessel with spread sails which collides with another which is at anchor and cannot move. (Smith Bell v.sudden movement made by a faultless vessel during the third zone of collision with another vessel which is at fault during the 2nd zone. 7. 9. The vessel which leaves later is presumed to have collided against one which has left earlier. 8. when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason. Baco River Plantation Co. 26 PHIL 632) Cases Covered By Collision and Allision 1. Allision Impact between a moving vessel and a stationary one. 2. (Urrutia and Co. 2. Error in Extremis . v. but the shippers of both vessels may go against the shipowners who will be solidarily liable. both vessels bear their respective damage. Third vessel at fault The third vessel will be liable for losses and damages. 4. but both should be solidarily liable for damage to the cargo of both vessels. (Art. The officers shall determine and agree if there is well-founded reason after examining the circumstances. 827) 3. Objections and protests shall likewise be entered in the minutes. 4. or on intersecting lines. Captain should determine during the voyage if there is well founded fear of seizure. shall watch with the highest diligence her course and movements so as to be able to adopt such timely means of precaution as will necessarily prevent the two boats from coming in contact. no responsibility will fall on said faultless vessel. The captain shall have the deciding vote. (Art. An error in this zone would no longer be legally consequential. 2. privateers and other valid grounds. A vessel leaving port should leave the way clear for another which may be entering the same port. CA) Nautical Rules as to Sailing Vessel and Steamship 1. First zone – all time up to the moment when risk of collision begins. The agreement shall be drafted and the proper minutes shall be signed and entered in the log book. Where a steamship and a sailing vessel are approaching each other from opposite directions. even when the crew of the latter has received word to lift anchor. 3. 5. Zones of Time in the Collision of Vessels 1. Steps: 1. 826) 2. The sailing vessel is required to keep her course unless the circumstances require otherwise. the steamship from the moment the sailing vessel is seen. When two vessels are about to enter a port. There is a presumption against an improperly moored vessel. (Art. unless it can be proved that there was no fault on its part. (Art. There is a presumption against the vessel which sets sail in the night. It is in this period where conduct of the vessels is primordial. 6. There is a presumption against a vessel which has no buoys to indicate the location of its anchors to prevent damage to vessels which may approach it. COLLISION Impact of two vessels both of which are moving. One vessel at fault Vessel at fault is liable for damage caused to innocent vessel as well as damages suffered by the owners of cargo of both vessels. It is in this zone that vessels must strictly observe nautical rules. 4. the farther one must allow the nearer to enter first. Captain shall assemble the officers and summon the persons interested in the cargo who may attend the meeting but without a right to vote. Vessel at fault not known Each vessel must bear its own loss. 2. but the shippers of both vessels may go against the shipowners who will be solidarily liable. if they collide. When two vessels meet. unless a departure therefrom becomes necessary to avoid imminent danger. Vessels must have “proper look-outs” or persons trained as such and who have no other duty aside therefrom. 5. 3. Both vessels at fault Each vessel must bear its own loss..
The unloading must be done by the arrastre operator. and 2) on collision time. 612(8)). unless there is stipulation to the contrary. discharging functions which are heavily invested with public interest. need not be protested. or navigational aid. Prince Line) 3. (Hartford Fire Insurance v. dock. in case of unloading at sea. can equally apply to shipwrecks. 830) The doctrine of res ipsa loquitur applies in case a moving vessel strikes a stationary object.) STEVEDORING SERVICE The carriage of goods from the warehouse or pier to the holds of the vessel.) Significance: When a person brings in cargo from abroad. Aquino. (Commercial Law Review. 3. 826839 of the Code of Commerce. (Anglo-Fil Trading Corp. 2004 ed. negligence or lack of skill of the captain. Phil. the term consists of the handling of cargo from the hold of the ship to the dock. Who makes: Captain When made: within 24 hours from the time the collision took place. Arrival under stress (Art. Manila Railroad) 2. (Far Eastern Shipping v. 2004 ed. Liability: 1. (Art. Razon. (Notes and Cases on the Law on Transportation and Public Utilities. It occurs when the vessel sustains injuries due to a marine peril rendering her incapable of navigation.) Nature of business: It is a public utility.827 of the Code of Commerce. E. description and conditions of the cargo inside the container is the sole responsibility of the shipper. (US Lines vs. (Chief of Staff vs. T. Villanueva. Shipwrecks (Arts. (Art. (Manila Steamship vs. It is not a civil tort governed by the Civil Code but a maritime one governed by Arts. C. 841) The rules on collision or allision. Comm. SPECIAL CONCEPTS ARRASTRE SERVICE A contract for the unloading of goods from a vessel. Similar to a common carrier (Northern Motors v. Of Customs. (Art.) CONTAINERIZATION/ “SAID-TOCONTAIN”/ “SHIPPER’S LOAD AND COUNT” SYSTEM System whereby the shipper loads his cargoes in a specially designed container. the owner of the vessel may demand indemnity from said captain. ICTSI v. CIR) As understood in the port business. Insa Abdulhaman) Doctrine of Last Clear Chance and Rule on Contributory Negligence cannot be applied in collision cases because of Art. such as a bridge post. 836) Cases applicable: 1. the defense of due diligence in the selection and supervision of employees is unavailing in case of a maritime tort resulting in collision. Lazaro) The loading on the ship of outgoing cargo is also part of stevedoring work. (US Lines v. & Hernando. 843). Similar to a warehouseman (Lua Kian v. Applicability: Overseas trade only. with respect to the circumstances attending such occurrence. 835). Solidary liability with the common carrier Note: In order that the arrastre operator may be held liable.5. 2. 2004 ed. seals the container and delivers it to the carrier for transportation. C. (Commercial Law Review. Excuses for not filing protest: 1) where the interested person is not on board the vessel. Villanueva. It is a written statement made under oath by the captain of a vessel after the occurrence of an accident or disaster in which the vessel or cargo is lost or damaged. The carrier does not participate in the counting of the merchandise for loading into the container. he cannot unload and deliver the cargo by himself. Inc. CA) Even if the cause of action against the common carrier is based on quasi-delict. (Ibid. if the collision took place abroad. the actual loading. Home Assurance) Note: In order to attribute to the carrier any .) MARITIME PROTEST Condition precedent or prerequisite to recovery of damages arising from collisions and other maritime accidents. Prudential Guarantee) The matter of quantity. if in the Philippines and to the Philippine consul. (Art. 835) SHIPWRECK It is the loss of the vessel at sea as a consequence of its grounding. 4. Each bears its own loss. the consignee must prove that the damage was due to the negligence and while the goods are in the custody of the arrastre operator. in case of pier-side unloading. Before whom made: competent authority at the point of collision or at the first port of arrival. Reyma Brokerage v. 612(15). Luzon Stevedoring vs.P. or running against an object in sea or on the coast. Where the vessel has gone through a hurricane or when the captain believes that the cargo has suffered damages or averages (Art. which will then deliver the cargo to the importer. for the purpose of recovering losses and damages. 624). vs. Of Customs. and the sealing of the container. as may be pertinent. If the wreck was due to malice. Collision (Art. R. CA. or to a barge. Fortuitous event/force majeure No liability. Comm.
Water/maritime transportation.Inc. (Fil. Latent damage: shipper should file a claim with the carrier within three days from delivery. 3) “Loss or Damage” as applied to the COGSA contemplates a situation where no delivery at all was made by the shipper of the goods because the same had perished. Maritime Co. if there is an agreed stopping place within a territory subject to the sovereignty. However. American Steamship Agencies Inc. even though that power is not a party to the Convention. Alejandro. The filing of an action in court until it is dismissed. The express agreement of the parties (Universal Shipping Lines. The WC shall also apply to fortuitous transportation by aircraft performed by an air transportation enterprise.K. Manila Railroad Co. or disappeared in such a way that their existence is unknown or they cannot be recovered. 65) APPLICABILITY The transportation must be: 1. NOTICE OF DAMAGE (SEC.damage to the shipment that may be found. PRESCRIPTIVE PERIOD Action for loss or damage to the cargo should be brought within one year after: a. Merchants Ins. 6 SCRA 180) The one-year period shall run from delivery of the last package and is not suspended by extrajudicial demand.. 150 SCRA 463) Note that Art. Civil Code rules on prescription shall apply. whether it has been agreed upon under the form of a single contract or of a series of AMOUNT OF CARRIER’S LIABILITY Under the Sec.. or 2. It can be applied in domestic sea transportation if agreed upon by the parties. CA) III. International transportation. Air transportation. International transportation any transportation in which the place of departure and the place of destination are situated either: 1. and 3. vs. CA). (Ang vs. the liability limit is set at $500 per package or customary freight unit unless the nature and value of such goods is declared by the shipper. Note: The filing of a notice of claim is not a condition precedent. Within the territory of a single High Contracting Party. APPLICABILITY The transportation must be: 1. Carriage of passengers. Lines Ltd. vs. Jur. and 3. Inc. (Stevens & Co.) Transportation to be performed by several successive air carriers shall be deemed to be one undivided transportation. 2. if it has been regarded by the parties as a single operation. overseas/interna tional/foreign (from foreign port to Philippine port).SCRA 359) The insurer exercising its right of subrogation is bound by the one-year prescriptive period.148 SCRA 118) The one-year period shall run from delivery to the arrastre operator and not to the consignee. (Eastern Shipping vs. CA) IV. (Dole Phils. Thus. it is inapplicable in case of misdelivery or conversion. mandate or authority of another power. Nordeutscher Lloyd. it does not apply to the claim against the insurer for the insurance proceeds. Am. gone out of commerce. IAC. vs. This is deemed incorporated in the bill of lading even if not mentioned in it. Inc. or b. (Sec. Co. inspection of the goods should be done at pier-side.. vs. damage 3. (Bankers vs. Delivery of the goods (delivered but damaged goods). 1749. baggage or goods. (Clause paramount or paramount clause) IMPORTANT FEATURES: 1. 4(5). (“round trip”. 188 SCRA 170) 2.A.) and damage arising . The date when the goods should have been delivered (nondelivery). The one-year prescriptive period is suspended by: 1. WARSAW CONVENTION OF 1929 (WC) PURPOSE: To protect the emerging air transportation industry and to secure the uniformity of recovery by the passengers. carrier’s liability 2.S. NCC applies to domestic/inter-island/coastwise trade. 2. Patent damage: shipper should file a claim with the carrier immediately upon delivery b. (Union Carbide Phils. period Amount Notice Prescriptive of of from delay or late delivery (Mitsui O. CARRIAGE OF GOODS BY SEA ACT/COGSA (C. In such instance the. Mayer Steel Pipe Corp. No. for the carriage of goods. vs. vs. 3(6)) Rules: a. IAC. vs. Within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or transshipment.
Delay in the transportation of passengers. baggage or goods. 2. 7 days from receipt of goods c. Combined transportation agreement PASSENGER TICKET Passenger BAGGAGE CHECK Checked-in baggage AIR WAYBILL Goods to be shipped 2. 18) and Transportation by air – The period during which the baggage or goods are in the charge of the carrier. 26) 2. or transshipment. (Art. CA) In PanAm v. 25) Thus. IAC) LIABILITY OF CARRIER FOR DAMAGES 1. Death or injury to passengers b.contracts. 14 days from receipt of baggage/goods The complaint is a condition precedent. or authority of the same High Contracting Party. An agreement relieving the carrier from liability or fixing a lower limit is null and void. 192 SCRA 9) LIMIT OF LIABILITY (Art. (Art. the WC has invariably been held inapplicable. (Art. Liability of the carrier for damages a. In KLM Royal v. When public policy is contradicted. delivery. IAC) 1. 19) Note: The Hague Protocol amended the WC by removing the provision that if the airline took all necessary steps to avoid the damage. date on which the transportation stopped. (Art. or misconduct of its employees. the WC was applied as regards the limitation on the carrier’s liability. (Alitalia vs. Passenger ticket b. date of expected arrival c. and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty. Tuller. 1971. or for some particular or exceptional type of damage. 23) Carrier is not entitled to the foregoing limit if the damage is caused by willful misconduct or default on its part. in any place whatsoever. (Art. as amended by Guatemala Protocol. Checked-in baggage GENERAL RULE: $20 per kilogram EXCEPTION: In case of special declaration of value and payment of a supplementary sum by consignor. It does not regulate or exclude liability for other breaches of contract by the carrier. If the requirements under the Convention are not complied with. Destruction.3) WHEN INAPPLICABLE 1. Without the complaint. it could exculpate itself completely (Art. 17) 2. 22. 29) . in case of a landing outside an airport. (Art. the action is barred except in case of fraud on the part of the carrier. IMPORTANT CONCEPTS: 1. IAC. 20(1)). Delay 3. In case of delay. date of arrival at the destination b. suzerainty. It does not preclude the application of the Civil Code and other pertinent local laws. or as not restrictive of the carrier’s liability. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value. Transportation documents a. the WC does not operate as an exclusive enumeration of the instances of an absolute limit of the extent of liability. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value. there being a simple loss of baggage without any improper conduct on the part of the officials or employees of the airline or other special injury sustained by the passenger. Hand-carried baggage $1000/passenger 4. 3. Notice of claim A written complaint must me made within: a. Successive carrier agreement 4. whether in an airport or on board an aircraft. Baggage check c. Prescriptive period Action must be filed within 2 years from: a. (Art.000 per passenger EXCEPTION: Agreement to a higher limit ACTION FOR DAMAGES 1. Passengers GENERAL RULE: $100. (Alitalia vs. or. Alitalia vs. IAC. Air way bill 2. (Alitalia vs. loss or damage to any baggage or goods. 3. Loss or damage to baggage or goods c. Jurisdiction 5. where there was satisfactory evidence of malice or bad faith attributable to its officers and employees. mandate. if it took place during the “transportation by air”. for the purpose of loading. It includes any transportation by land or water outside an airport if such takes place in the performance of a contract for transportation by air. 1 Sec. 3 days from receipt of baggage b. Goods to be shipped GENERAL RULE: $20 per kilogram EXCEPTION: In case of special declaration of value and payment of a supplementary sum by consignor. (Art. Death or injury of a passenger if the accident causing it took place on board the aircraft or in the course of its operations of embarking or disembarking.
28(1)) NOTE: It is the passenger’s “ultimate destination” not “an agreed stopping place” that determines the country where suit is to be filed. 2A C.venue. In accordance with Sec. (Art. so that they may be found again by the owners (p.) In United Airlines vs. 3 of the Salvage Law. Floatsam or Flotsam – goods which float upon the sea when cast overboard. 4. Chiok) JURISDICTION At the option of the plaintiff. If those in charge left with the intention of returning. total or partial. Services one person renders to the owner of a ship or goods. Object must have been exposed to marine peril (not perils of the ship). Services rendered voluntarily (neither an existing duty nor out of a pre-existing contract). Passenger or consignor can file an action against the first carrier and the carrier in which the damage occurred b. (American Airlines vs. or of procuring assistance. 28(1) is a matter of jurisdiction rather than of V. (Santos III vs. Services are successful. (Art.). it is derelict and a change of their intention and an attempt to return will not change its nature (Erlanger & Galinger vs.173. Northwest. derelict or recapture. (Notes and Cases on the Law on Transportation and Public Utilities. Court of its principal place of business. The forum of action provided in Art. or such property recovered from actual peril or loss. but if they quitted the property with the intention of finally leaving it. Ltd. 4. Person who commenced Salvage in spite of opposition of the Captain or his representative. Jetsam – goods which are cast into the sea. 2. Uy the two-year prescriptive period was not applied where the airline employed delaying tactics. Valid object of salvage. Members of the International Air Transportation Association (IATA) are under a general pool partnership agreement wherein they act as agent of each other in the issuance of tickets to contracted passengers to boost ticket sales worldwide and at the same time provide passengers easy access to airlines which are otherwise inaccessible in some parts of the world. as in cases of shipwreck. If it is clear that the intention to return is slight. R. 2. 2. Requisites: 1. SALVAGE LAW (Act No.J. or d. & Hernando. Crew of the vessel saved. 30) A contract of international carriage by air. Ligan or Lagan – goods cast into the sea tied to a buoy. Carriage of passengers GENERAL RULE: Action is filed only against the carrier in which the accident or delay occurred. Ship itself.P. The intention of those in charge must be ascertained. CA) Under a general pool partnership agreement. Judge Diaz). or are unable to protect or secure. Court of domicile of the carrier. These carriers are jointly and severally liable. 2. 3. Court where it has a place of business through which the contract has been made. Compensation allowed to persons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from impending sea peril. EXCEPTION: Agreement or contract whereby the first carrier assumed liability for the whole journey. (China Airlines vs. a person who fails to deliver a salvaged vessel or cargo to the Collector of Customs. the action for damages may be filed in the: a. 616) . 3. and there sink and remain under water. Aquino. the salvage which was done thereafter is considered valid. 2004 ed. c. Persons who have no right to a reward for salvage: 1. although performed by different carriers under a series of airline tickets constitutes a single operation. Carriage of baggage or goods a. p. 2616) SALVAGE Two concepts: 1. the ticket-issuing airline is the principal in a contract of carriage while the endorsee-airline is the agent. by his own labor. Court of the place of destination. the property is not derelict. preserving the goods or the ship which the owner or those entrusted with the care of them have either abandoned in distress at sea. RULE IN CASE OF VARIOUS SUCCESSIVE CARRIERS 1.S. Swedish East Asiatic Co. without any hope of recovering it. T. The obligation of the former remained and did not cease even when the breach occurred not on its own flight but on that of another airline which had undertaken to carry the passengers to one of their destinations. 2. b. Subjects of Salvage: 1. Passenger or consignee can file an action against the last carrier and the carrier in which the damage occurred. Derelict – a ship or her cargo which is abandoned and deserted at sea by those who are in charge of it. 3. or without any intention of returning to it.
NWRC. 5. It has been replaced by the following government agencies: LTO. shall go to the owner. is not a salvage service. (Secs. whether such person or company has held himself or itself out as ready to serve the public or a portion of the public generally. Public markets. whether permanent. PUBLIC SERVICE ACT (C. To protect and secure investments in public services. (Sec. 2616) Requires success. and 7. sustained service for the public at the least possible cost. CAB. and done for general business purposes. 6. inefficient service. 3. except for the fixing of maximum rates for fare and freight. ERB. pulls another. except as to rates fixing. SALVAGE Governed by special law (Act No. 13) Taking passengers from a sinking ship. The reward should constitute a sufficient compensation for the outlay and effort of the salvors and should be liberal enough to offer an inducement to others to render services in similar emergencies in the future. 3. and the other half to the government. 2 5% to the officers and crew in proportion to their salaries. Radio companies. NEA. except for rates fixing. without rendering any service in rescuing the vessel. If a vessel is the salvor. manages or controls in the Philippines for hire or compensation. with general or limited clientele. if the latter does not claim it within 3 years. CA 146) A casual or incidental service devoid of public character and interest is not brought within the category. from one place to another. (Sec. To secure adequate. PSC) NOTE: The Public Service Commission created under the Public Service Law has already been abolished under P. 2. and c. (Luzon Stevedoring vs. NTC. Public services owned or operated by the government. communication and similar public services. LTFRB. otherwise no payment Must be done with the consent of the captain/crewmen Vessel must be involved in an accident Fees distributed among crewmen TOWAGE Governed by Civil Code on contract of lease Success required is not PURPOSES: 1.D. occasional or accidental. 1112) 4. It is a contract for services rather than a contract of carriage. b. 9) 2. any common carrier or public utility. being a duty of humanity and not for reward. Only the consent of the tugboat owner is needed Vessel need not be involved in an accident Fees belong to the tugboat owner RULES ON SALVAGE REWARD 1. 13b. Ice plants. EXCEPTIONS: 1. 50% of the said proceeds shall go to the salvors. The question depends on such factors as the extent of services. No. power and water supplies. for a compensation. and MIA.A. whether loaded or not with merchandise. Animal drawn vehicles and bancas moved by oar or sail. the proceeds. No. PUBLIC SERVICE A person who owns. The reward is fixed by the RTC judge in the absence of agreement or where the latter is excessive. the reward shall be distributed as follows: a. (Sec. 4. 4. BOE. ATO.CONTRACT OF TOWAGE A contract whereby one vessel. Warehouses. To protect the public against unreasonable charges and poor. 3. If sold (no claim being made within 3 months from publication). 2 5% to the captain. 2. Airships. VI. operates. who shall divide it equitably. 5 0% to the shipowner. ice plants. To prevent ruinous competition. AUTHORITY TO OPERATE PUBLIC SERVICES GENERAL RULE: No public service shall operate without having been issued a certificate of public convenience or a certificate of public convenience and necessity. after deducting expenses and the salvage claim. 146) . 1 and other issuances. usually motorized.
g. is required by law. confers no property right. Nor does it confer upon the holder any proprietary right or interest or franchise in the public highways. Suspension of CPC or CPCN. Issuance of orders requiring establishment or maintenance of extension of facilities. A CPC or a CPCN constitutes neither a franchise nor a contract. Applicant must be a citizen of the Philippines or a corporation or entity 60% of the capital of which is owned by such citizens. Revocation. (Cogeo-Cubao Operators and Drivers Assn. corporation or entity as determined by the proper authority. Medina. and proper service. 18 and 19) ACTS REQUIRING PRIOR APPROVAL 1. Uniform accounting system and furnishing of annual reports. 3. and charges. 2. vs. An authorization issued by the appropriate government agency for the operation of public services for which no franchise. either municipal or legislative. 6. certificates or franchise. Examination and test of measuring appliances. except when it is necessary to avoid serious and irreparable damage or inconvenience to the public or private interest. alienate. 4.. 30 SCRA 408) It is a “property” and has a considerable value and can be the subject of sale or attachment. POWERS REQUIRING PRIOR NOTICE AND HEARING 1. 4. 7. alteration of the certificate. POWERS EXERCISABLE WITHOUT PRIOR NOTICE AND HEARING 1. 7.CERTIFICATE OF PUBLIC CONVENIENCE (CPC) CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY (CPCN) An authorization issued by the appropriate government agency for the operation of public service for which a prior franchise is required by law. Requiring operators to furnish safe. 3. (Secs. mortgage or lease property. e.g. Sell. Setting up of standards and classifications. and is a mere license or a privilege. telephone and other services. in which case. 5. public service. 6. 5.) REQUREMENTS FOR GRANTING CPC OR CPCN 1. Compelling compliance with the laws and regulations. Applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest on a proper and suitable manner. Luneta Motor Co. Applicant must have sufficient financial capability to undertake the proposed services and meeting the responsibilities incident to its operation. UNLAWFUL ACTS OF PUBLIC UTILITY COMPANIES 1. Investigation any matter concerning tolls. 2. Capitalize any franchise in excess of the amount actually paid to the Government. 4. 2. . or even revocation or annulment thereof is reserved to the State. Villegas. Fixing of rates. Issue free tickets. 164 SCRA 36) 2. Establish and maintain individual or joint rates. (Soriano v. (Luque vs. 4. e. Raymundo vs. common carriers. adequate. Issuance of CPC or CPCN. Requiring public services to pay expenses of investigation. Engagement in public service business without first securing the proper certificate. CA. 8. 3. 6. improper or inadequate service as determined by the proper authority. Establishment of rules to secure accuracy of all meters and all measuring appliances. 4. 3. 5. Establish and operate new units. Applicant must prove public necessity. or modification of CPC or CPCN. Providing or maintaining unsafe. Revocation of this certificate deprives him of no vested right. The holder of said certificate does not acquire a property right in the route covered thereby. a suspension not more than 30 days may be ordered. 3. Refusing or neglecting to carry public mail upon request. Grant of special permits to make extra or special trips in territories specified in the certificate. Issue any stock or stock certificates representing an increase of capital. 2. Committing any act of unreasonable and unjust preferential treatment to any particular person. prior to the hearing. Valuation of properties of public utilities. New and additional burdens. 207 SCRA 343.
by collusion with others or otherwise. IAC) . etc. then the applicant who applied ahead of the other. for the public to enforce their rights of action that they may have for injuries inflicted by the vehicle if they should be required to prove who the actual owner is. REGISTERED OWNER RULE The registered owner of a certificate of public convenience is liable to the public for the injuries or damages suffered by third persons caused by the operation of said vehicle. If it turns out. The transfer. et al. will be granted the certificate. It would be very difficult and often impossible. KABIT SYSTEM A system whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate under such license. Civil Code. to transfer the responsibility to an indefinite person. for a fee or percentage of such earnings. and 2. 3. The approval is necessary only to protect public interest. Effects: 1. IAC. if inadequate or deficient. The registered owner cannot recover from the actual owner and the latter cannot obtain transfer of the vehicle to himself. 4. new operators should be given the chance to give the services needed by the public. as a practical matter. PRIOR APPLICANT RULE Presupposes a situation when two interested persons apply for a certificate to operate a public utility in the same community over which no person has as yet granted any certificate. Jepte 102 Phil 103). The public has the right to assume that the registered owner is the actual or lawful owner thereof. One which yields to the carrier a fair return upon the value of the property employed in performing the service. Purpose: To prevent ruinous and wasteful competition in order that the interests of the public would be conserved and preserved. PRIOR OPERATOR/OLD OPERATOR RULE The rule allowing an existing franchised operator to invoke a preferential right within the authorized territory as long as he renders satisfactory and economical service. The registered owner is not allowed to escape responsibility by proving that a third person is the actual and real owner Reason: It would be easy for him. It subordinates the prior applicant rule which gives the first applicant priority only if things and circumstances are equal. 1409. lease or assignment of the privilege granted is valid between the contracting parties but not upon the public or third persons. 187 SCRA 547) The thrust of the law in enjoining the kabit system is to identify the person upon whom responsibility may be fixed with the end in view of protecting the riding public (Lim vs. (Benedicto vs. (Teja Marketing vs. both being in pari delicto. even though the same had been transferred to a third person. The policy is not to issue a certificate to a second operator to cover the same field and in competition with a first operator who is rendering sufficient. One which is fair to the public for the service rendered. CA 373 SCRA 394). A rate is just and reasonable if it conforms to the following requirements: 1. RATE-FIXING POWER The rate to be fixed must be just. Where the operator either fails or neglects to make the improvement or effect the increase in services. 146. 20(g) of C.A. Its approval is not a condition precedent to the validity of the contract. 154 SCRA 388) 2. Alday. Under Sec. after the hearing. sale. may be negotiated and completed before the approval by the proper authority. No. vs. It is void and inexistent under Art. especially when given the opportunity. (Gelisan vs. adequate and satisfactory service. or to one who possesses no property with which to respond financially for the damage or injury done. the sale. The prior operator must first be given an opportunity to improve its service. founded upon conditions which are fair and reasonable to both the owner and the public. The registered owner is primarily liable for all the consequences flowing from the operations of the carrier. (Erezo. that the circumstances between the two applicants are more or less equal.
CA) . (Zamboanga Transportation Co. For the better protection of the public. vs.5. both the registered owner and the actual owner are jointly and severally liable with the driver.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.