TRANSPORTATION AND MARITIME LAW Based on the outline of Prof.

Rodrigo Quimbo _______________

I. General Considerations A. Public Utilities 1. Article XII, 1987 Constitution Art. XII, Section 11. No franchise, certificate or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least 60% of whose capital is owned by such citizens, nor shall such franchise, certificate or authorization be exclusive in character or for a longer period than fifty years. Neither shall any franchise or right be granted except under the condition that it shall be subject to amendment, alteration or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. Section 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest. Section 18. The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government. Section 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. (a) What is a public utility? A public utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. Apart from statutes which define the public utilities that are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case. As its name indicates, however, the term public utility implies a public use and service to the public. (Am. Jur. 2d V. 64, p.549.) (Albano vs Reyes) (b) What is a public service? The Public Service Act (CA No. 146 as amended) provides that the term public service "includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and

done for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service or any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine repairshop, [warehouse], wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services..." [Sec. 13(b)] (Albano vs Reyes) Albano vs Reyes 175 SCRA 264 F: On 20 April 1987, the Phil. Ports Authority (PPA) adopted a resolution directing mgmt. to prepare the Invitation to Bid and all relevant bidding documents necessary for the public bidding of the development, mgmt., and operation of the Manila Intl. Container Terminal (MICT) and authorized the Board Chairman Secretary Reyes to oversee and implement the project. Secretary Reyes created a 7-man MICT Bidding Committee to evaluate all bids and recommend to the Board the best bid. The PPA published the Invitation to Bid with the reservation that it had the right to reject any bid and to accept such bid it may deem advantageous to the govt. Seven companies submitted bids. The Committee recommended that the contract be awarded to Intl. Container Terminal Services (ICTSI) on the ground that it offered the best technical and financial proposal. Secretary Reyes awarded the contract to ICTSI. Before the contract could be signed, two cases were filed questioning the legality or regularity of the bidding. The first was a special action for prohibition with prelim injunction filed by Alo, a concerned taxpayer. The second was a civil case for prohibition with prayer for TRO filed by Sharp Co. which actively participated in the bidding. The President approved the proposed MICT contract. The PPA and ICTFSI perfected the contract. Rodolfo Albano, a member of the House of Representatives filed the present case assailing the award of the contract on the ground that since the MICT is a public utility, it needs a legislative franchise before it can legally operate as a public utility. Issue : WON a legislative franchise is necessary. Held : NO. Petition dismissed. A franchise specially granted by Congress is not necessary for the operation of the MICT by a private entity. A contract entered into by the PPA and such entity is substantial compliance with the law. 1. Executive Order No. 30 authorized the PPA to take over, manage and operate the MICT in accordance with PD 857 (Revised Charter of the PPA). PD 857 expressly empowers the PPA to provide services within Port Districts "whether on its own, by contract or otherwise." Therefore, under EO 30 and PD 857, the PPA may contract with ICTSI for the mgmt., operation and devt. of the MICT. 2. Even if the MICT be considered a public utility or a public service on the theory that it is a wharf or a dock as contemplated by the Public Service Act, its operation would not necessarily call for a legislative franchise. Legislative franchises are not required before each and every public utility may operate. The law has granted certain administrative agencies the power to grant licenses for or to authorize the operation of certain public utilities. That the Consti provides that the issuance of a franchise for the operation of a public utility shall be subject to amendment, alteration or repeal by

TRANSPORTATION AND MARITIME LAW
Congress does not necessarily imply that only Congress has the power to grant such authorization. There are several laws granting specified agencies in the Executive Dept. the power to issue such authorization for certain classes of public utilities. [ 1. LTFRB wrt Certificates of Public Convenience authorizing the operation of public land transportation services provided by motorized vehicles; 2. ERB wrt operation of electric power utilities and services except electric coops] Reading EO 30 and PD 857 together, the PPA has been empowered to undertake by itself or to authorize the operation and mgmt. of the MICT by another by contract. The latter power having been delegated to the PPA, a legislative franchise is no longer necessary. In this case, the PPA's contracting with ICTSI is wholly within its jurisdiction and powers. 3. The award of the contract to ICTSI is all the authorization that is necessary. The award made by the PPA and the President enjoys the presumption of validity and regularity of official action. There is no evidence to the contrary. 4. Albano has standing to assail the contract. While the expenditure of public funds may not be involved under the contract, public interest is definitely involved considering the important role of the MICP in the economic devt. of the country and the magnitude of the amount involved. He has sufficient standing since a public right (disclosure provision) is sought to be enforced. 5. There in no conflict among the 3 branches of govt. The Executive Dept. has not contravened an act of Congress. There is no usurpation of powers of another branch. 6. The determination of the winning bid should be left to the sound judgment of the PPA. It is in the best position to evaluate the bids. It has the technical expertise which neither the Court nor Congress has. No abuse of discretion has been shown. 2. CA 146, as amended, Sec 13 (b) The term public service includes every person that now or hereafter may operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service or any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine repairshop, [warehouse], wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, that a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act. B. Transportation 1. Definition A contract transportation is one whereby a certain person association of persons obligate themselves transport persons, things, news from one place another for a fixed price. It is the removal of goods persons from one place to another. 2. Public Nature (a) Public Service Act Section 13 (a) The Commission (PSC) shall have jurisdiction, supervision, and control over all public services and their franchises, eqpt., and other properties, and in the exercise of its authority, it shall have the necessary powers and the aid of the public force: Provided, That public services owned or operated by govt. entities or GOOCs shall be regulated by the Commission in the same way as privately owned public services, but certificates of public convenience or certificates of public convenience and necessity shall not be required of such entities or corporations: And provided, further, That it shall have no authority to require steamboats, motorships and steamship lines, whether privately owned or owned or operated by any govt. controlled corporation or instrumentality to obtain certificates of public convenience or to prescribe their definite routes or lines of service. (b) The term public service includes every person that now or hereafter may operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service or any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine repairshop, warehouse, wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, that a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act. (c) The word "person" includes every individual, co- partnership, joint stock co. or of or to to or

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corporation, whether domestic or foreign, their lessees, trustees, or receivers, as well as any municipality, province, city, GOOC, or agency of the govt. of the Philippines, and whatever other person or entities that may own or possess or operate public services. Section 14. The ff. are exempted from the provisions of the preceding section : (a) Warehouses; (b) Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and lighters; (c) Airships within the Philippines except as regards the fixing of their maximum rates on freight and passengers; (d) Radio companies except with respect to the fixing of rates; (e) Public services owned or operated by any instrumentality of the Natl. Govt. or by any GOOC, except with respect to the fixing of rates. Section 15. With the exception of those enumerated in the preceding section, no public service shall operate in the Philippines without possessing a valid and subsisting certificate from the PSC known as the certificate of public convenience, or certificate of public convenience and necessity as the case may be, to the effect that the operation of said service and the authorization to do business will promote the public interests in a proper and suitable manner. The Commission may prescribe as a condition for the issuance of the certificate provided in the preceding paragraph that the service can be acquired by the Republic of the Philippines or any instrumentality thereof upon payment of the cost price of its useful eqpt., less reasonable depn.; and likewise, that the certificate shall be valid only for a definite period of time; and that the violation of any of these conditions shall produce the immediate cancellation of the certificate without the necessity of any express action on the part of the Commission. In estimating the depn., the effect of the use of the eqpt., its actual condition, the age of the model, or other circumstances affecting its value in the market shall be taken into consideration. The foregoing is likewise applicable to any extension or amendment of certificates actually in force and to those which may hereafter be issued, to permit to modify itineraries and time schedules of public services, and to authorizations to renew and increase eqpt. and properties. Section 16. Proceedings of the Commission, upon notice and hearing. The Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary. (a) To issue certificates ... authorizing the operation of public services within the Philippines, whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. Provided, that certificates will be granted only to citizens of the Philippines or of the US or to corps., co-partnerships, associations or joint stock companies constituted and organized under the laws of the Philippines; Provided, that 60% of the stock or paid-up capital ... must belong entirely to citizens of the Philippines or of the US; Provided, further, that no such certificate shall be issued for a period of more than 50 years. (b) To approve, subject to constitutional limitations any franchise, privilege granted under the provisions of Act No. 667, as amended by Act. No. 1022, by any political subdivision of the Philippines when, in the judgment of the Commission, such franchise or privilege will properly conserve the public interests xxx (c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as commutation, mileage, kilometrage, and other special rates which shall be imposed, observed and followed thereafter by any public service ; Provided, further that in case the public service equipment of an operator is used principally or secondarily for the promotion of a private business, the net profits of said business shall be considered in relation with the public service of such operator for the purpose of fixing the rates. (d) To fix just and reasonable standards, classifications, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed thereafter by any public service. (e) To ascertain and fix adequate and serviceable standards for the measurement of quantity, quality, pressure, initial voltage, or other condition pertaining to the supply of the product or service rendered by any public service, and to prescribe reasonable regulations for the examination and test of such product or service and for the measurement thereof. (f) To establish reasonable rules, regulations, instructions, specifications, and standards, to secure the accuracy of all meters and appliances for measurements. (g) To compel any public service to furnish safe, adequate, and proper service as regards the manner of furnishing the same as well as the maintenance of the necessary material and eqpt. (h) To require any public service to establish, construct, maintain and operate any reasonable extension of its existing facilities, where, in the judgment of said commission, such extension is reasonable and practicable, and will furnish sufficient business to justify the construction and maintenance of the same, and when the financial condition of the said public service reasonably warrants the original expenditure required in making and operating such extension. (i) To direct any railroad, street, railway or traction co. to establish and maintain at any junction or point of connection or intersection with any other line of said road or track, or with any other line of any other railroad, street, railway or traction co., such just and reasonable connection as shall be necessary to promote the convenience of shippers of property, or of passengers, and in like manner to direct any railroad, street railway or traction co. engaged in carrying merchandise, to construct, maintain and operate, upon reasonable terms, a switch

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purchased. for the examination and test of any appliance used for the measuring of any product or service of a public service.TRANSPORTATION AND MARITIME LAW connection with any private sidetrack which may be constructed by any shipper to connect with the railroad. regulations. Said rates shall be sufficient to provide the amounts required over and above the expenses of maintenance to keep such property in a state of efficiency corresponding to the progress of the industry. and other premises of the public service. (l) To fix and determine the proper and adequate rates of depn. in the discretion of the commission. of the revocation and cancellation of any acquired right. Proceedings of commission without previous hearing: (a) To investigate. such connection is reasonable and practicable. to adopt a uniform system of accounting as approved by the auditor general (h) To require any public service to furnish annual reports of finances and operations. to enter any premises where said appliances may be. to be hereafter constructed. in its discretion. and regulate. and will furnish sufficient business to justify the construction and maintenance of the same.buses. (n) To suspend or revoke any certificate issued under the provisions of this act whenever the holder thereof has violated or willfully and consumatedly refused to comply with any order. (o) To fix. extensions. to enforce compliance with any standard xxx and to prohibit or prevent any public service from operating without first securing a certificate of public convenience or public necessity and convenience xxx and require existing public services to pay the fees provided for in this act for the issuance of the proper certificate xxx under the penalty. documents or records in the possession of any govt. as the convenience of the state may require. and shall set aside the money so provided for out of its earnings and carry the same in a depreciation fund. street railway or traction company line where. covering the 12 month period ending December 31 (i) To require every public service to file with the commission a written. new constructions or additions to the property of such public service. Section 17. (m) To amend. any railroad. upon its own initiative. and forms of account as the commission may prescribe. to install such safety devices or to adopt such other reasonable measures as may in the judgment of the commission be necessary for the protection of the public at passing grade crossings of (1) public highways and railroads. dept. records. modify or revoke at any time any certificate under the provisions of this act. Each public service shall conform its depreciation accounts to the rates so determined and fixed. or upon complaint in writing. or across any public highway. of the property of any public service which will be observed in proper and adequate depn. power and duties of every officer. This fund shall not be expended otherwise than for depreciation. for the purpose of setting up and using on said premises any apparatus necessary therefor. The income from such investments of money in such fund shall likewise be carried in such fund. as to disclose the source and origin of each administrative act or rule PAGE 4 . any matter concerning any public service as regards matters under its jurisdiction. and operated: Provided. or (3) railroads and street railways. and operated by operators after the approval of this act. to refund the fees paid (e) To permit any street railway or traction company to change its existing gauge to standard steam railroad gauge (f) To grant any public service special permits to make extra or special trips within the territory covered by its certificate and to make special excursions outside if the public interest or special circumstances so require. trucks and motor trucks. trucks and motor trucks so constructed. and can be put in with safety. on motion by or at the request of any consumer. may prior to the hearing suspend for a period not exceeding 30 days any certificate or the exercise of any right or authority issued or granted under this act by order of the commission. president or secretary setting forth the officers. Provided where the public service cannot render such extra service on its own line or in its own territory. determine. and accounts. in the judgment of the commission. to have access to and use any books. bureau. that said fees shall be smaller than those charged for auto. (b) To require payment of actual expenses incurred in any investigation if a violation shall be found. and to fix fees to be paid by the consumer who may apply for such examination.. (2) public highways and street railways. a special type for auto buses. improvements. in relation thereto. account to be carried for the protection of stockholders. authority. trucks. that the commission for good cause. street railway or traction company. to require any public service to furnish safe. street railway of traction company to lay its tracks across tracks of any other railroad. to assess costs not to exceed 25% with reference to such investigation (c) To appraise and value the property of any public service. and motor trucks of types not made regulation under this subsection. purchased. adequate and proper service as the public interest may require and warrant. and in case of defect. or bondholders or creditors. rule or regulation of the commission or any provisions of this act: Provided. whenever the facts and circumstances on the strength of which said certificate was issued have been misrepresented or materially changed. (j) To authorize. or political subdivision (d) To provide. whenever such step shall in the judgment of the commission be necessary to avoid serious and irreparable damage or inconvenience to the public or to private interests. (k) To direct any railroad or street railway co. verified statement made by the owner. to fix and determine a special registration fee for auto-buses. office. in accordance with such rules. a special permit for such extra service may be granted to any other public service (g) To require any public service to keep its books.

(c) To refuse or neglect. without the approval and authorization of the Commission previously had (a) To adopt. except grantees of legislative franchises expressly exempting such grantee from the reqts of securing a certificate from the commission. construct. and in case of public carriers. by itself or through its agents.It shall be unlawful for any individual. shall be to vest in the transferee more than 40% of the subscribed capital of said public service. corporation or joint-stock company. improper or inadequate . provided that it shall be the duty of the Commission. maintain. giving them a reasonable opportunity to be heard and the burden of the proof to show that the proposed rates or regulations are just an reasonable shall be upon the public service proposing the same. the Director of Posts shall forthwith request the commission to fix a just and reasonable compensation for such carriage and the same shall be promptly fixed by the commission in accordance with section 16 of this act. charge. or subject any particular person or corporation or locality or any particular description of traffic to any prejudice or disadvantage in any respect whatsoever. attorneys or brokers. impose. toll. franchises. as well as those expressly exempted from the jurisdiction of the commission Section 19. encumber or lease its property. as found and determined by the commission in a final order which shall be conclusive and shall take effect in accordance with this act. PAGE 5 . alienate. upon such terms and conditions and for a consideration in such amount as may be agreed upon between the Director of Posts and the public service carrier or fixed by the commission in the absence of an agreement between the Director of Posts and the carrier. privileges or rights or any part thereof. or merge or consolidate its property. fix. classification or itinerary. association. directly or indirectly. or any part thereof. if the result of that sale in itself or in connection with another previous sale. Section 20. and the purpose of such issue be approved by the Commission. practice or measurement which shall be found or determined by the commission to be unjust. maintain or operate new units or extend existing facilities or make any other addition to or general extension of the service. the date on which the same is to be consummated shall be fixed in the order of approval: Provided. commutation. alienation. lessee or operator thereof. (e) Hereafter to issue any stock or stock certificates representing an increase of capital. if it be shown that there are just and reasonable grounds for making the mortgage or encumbrance. and that the same are not detrimental to the public interest. collect or carry into effect any individual or joint rates. or issue any share of stock without par value. upon appeal or otherwise. (g) To sell. with those of any public service. when satisfied that the same is to be made in accordance with law.TRANSPORTATION AND MARITIME LAW (j) To require any public service to comply with the laws of the Philippines and with any local resolution or ordinance or its charter (k) To investigate accidents directly or indirectly arising from or connected with the maintenance or operation of the public service (l) To require every public service to file a complete schedule of every classification. to approve any such issue maturing in more than one year from the date thereof. trustees or receivers xxx to engage in any public service business without having first secured from the commission a certificate. or lease by any public service of any of its property in the ordinary course of its business. that nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale. mileage or other special rate. only upon reasonable notice to the public services and other parties concerned.It shall be unlawful for any public service : (a) To provide or maintain any service that is unsafe. or any of them. mortgage. discounts or rebates on authorized rates. and in case of a sale. or enforce any regulation. a complete statement of itineraries or routes o Section 18 . lease . or issue any bonds or other evidence of indebtedness payable in more than one year from the issuance thereof. or unjustly discriminatory. privileges or rights. merger or consolidation to be approved. after notice to the public and after hearing. after hearing. or the sale. however. fare. (h) To sell or register in its books the transfer or sale of shares of its capital stock. or grant credit for the payment of freight charges. unduly preferential. certificates. unreasonable. for liabilities of more than one year maturity. toll. In case the Director of Posts and the public service carrier are unable to agree on the amount of the compensation to be paid for the carriage of the mail. to adopt. or any undue or unreasonable preference or advantage to any person or corporation or to any locality or to any particular person or corporation or locality or any particular description of traffic or service. Unlawful acts . Acts requiring the approval of the Commission . franchises. copartnership. establish. individual or joint rate. upon appeal or otherwise.or withhold or refuse any service which can reasonably be demanded and furnished. their lessees. The approval herein required shall be given. it shall be unlawful for any public service or for the owner. (b) To establish. in a final order which shall be conclusive and shall take effect in accordance with the provisions of this act. Any transfer made in violation of this provision shall be void and of no effect and shall not be registered in the books of the public service corporation. maintain. (b) To make or give. fare or charge.Subject to established limitations and exceptions and saving provisions to the contrary. alienation. The Commission shall approve only those that are just and reasonable and not nay that are unjustly discriminatory or unduly preferential. when requested by the director of posts or his authorized representative to carry public mail on the regular trips of any public land transportation service maintained or operated by any such public service.

A CPC is an authorization issued by the Commission for the operation of public services for which no franchise. and participation of Guzco Transit in the CPC covering the bus transportation lines between Manila and Rizal.TRANSPORTATION AND MARITIME LAW Nothing herein contained shall be construed to prevent the holding of shares lawfully acquired. A CPCN is an authorization issued by the PSC for the operation of public services for which a franchise is required by law (e. (2) reliability of the applicant. either municipal or legislative. these were sold to Raymundo (including certificate No. Such sale. the Certificate of Public Convenience and Necessity (CPCN). CPCs have considerable material value. Batangas Transportation Co. Accordingly. in a public auction The Public Service Law authorizes certificates of public convenience to be secured by public service operators from the PSC.g. They are subject to being sold for consideration as much as any other property. 25951 which was not included in the sale to Luneta Motor Co. 25951 which Raymundo could apply for its approval. a CPC or CPCN ought not to be granted where there is no complaint as to existing rates and the co. (i) To sell. or rights or any part thereof. and may be acquired by purchase. adequate and satisfactory service. Determination of WON an issuance of a certificate is for public convenience . and such privilege is forfeited when the grantee fails to comply with his commitments behind which lies the paramount interest of the public. with the right to receive passengers and freight from intermediate points. privileges. and (4) priority of operation Prior operator rule . alienation. a suit for collection was filed. for public necessity cannot be made to wait. Failing to pay the PNs. telephone services).basis of rule : to prevent ruinous and wasteful competition in order that the interests of the public would be conserved and preserved. Orlanes was an irregular operator between Bantilan and Taal. in the field is rendering adequate services. certificates represent property rights to the extent that if the rights which any public utility is exercising pursuant to lawful orders of the PSC has been invaded by another public utility. (b) The Certificate of Public Convenience (CPC).prior operator is given opportunity to improve service . The Code of Civil Procedure does not exclude franchises or certificates from the word "property. alienation.). in appropriate cases actions may be maintained by the complainant public utility. Nature of certificate : It constitutes neither a franchise nor a contract. Certificates are considered as property as used in Civil Procedure as they have material value and are material assets. A CPC is any authorization to operate a public service issued by the PSC. there is no reason why the same cannot be sold involuntarily pursuant to court process. nor sacrificed for private convenience. Though intangible. They are subject to attachment and seizure by legal process. vs Orlanes 52 Phil 455 F: Orlanes sought to have a CPC to operate a line of auto trucks with fixed times of departure between Taal and Bantilan. is required by law (e. If the holder of a certificate can voluntary sell it. The CFI ordered the selling of these certificates in a public bidding in which Luneta Motor was the highest bidder. confers no property rights and is a mere license or privilege. His petition is based on the fact that to comply with the PAGE 6 . It is not therefore the policy of the law for the PSC to issue a CPC to a second operator to cover the same field and in competition with a first operator who is rendering sufficient. . and who in all things and respects is complying with the rules and regulations of the PSC. They are even more valuable than ordinary properties. A writ of attachment was issued and garnishment was served on the PSC attaching the right. so long as the operator complied with the terms and conditions of the license and the reasonable demands of the public.g. and to set aside and nullify the prohibition against him in his CPC that he shall not have or receive any passengers or freight at any of the points served by the BTC which holds a prior license from the PSC. electric. auto-trucks and motor vehicles). The Public Service Law permits the PSC to approve the sale. Nine days after the certificates were attached. (3) priority of filing the application for a certificate.prior operator given opportunity to extend lines . and that BTC was a regular operator between Batangas and Rosario. The approval of the sale was sought from the PSC. They are valuable assets.(1) financial responsibility of the applicant. However. it is the duty of the PSC to protect rather than to destroy its investment Raymundo vs Luneta Motor 58 Phil 889 F: Nicanor de Guzman signing as Guzco Transit purchased trucks from Luneta Motor and executed PNs guaranteed by a chattel mortgage on several trucks. alienation or transfer shall be void and of no effect and shall be sufficient cause for ordering the cancellation of the certificate. Issue : Which of the two sales should prevail? public auction by virtue of an attachment vs voluntary sale Held : Sale to Luneta Motor Co. Orlanes sought to have his irregular operation changed into a regular operation. mortgaging. A CPC grants a right in the nature of a limited franchise. and the Prior Operator Rule Difference between CPC and CPCN : A CPCN is issued by the PSC to a public service to which any political subdivision has granted a franchise under Act 667 after the PSC has approved the same under Section 16(b). The evidence is conclusive that at the time of his application. The PSC approved the sale in the public bidding and disapproved the sale to Raymundo except with respect to Certificate No. Owners of public utilities have the right to maintain appropriate actions against other public utilities not authorized to operate in competition with the complainant. or transfer in itself or in connection with another previous sale shall be the reduction to less than 60% of the capital stock belonging to Philippine citizens. title. alienate or in any manner transfer shares of its capital stock to any alien if the result of that sale. encumbering or leasing of property. franchises.to carry out the purpose and intent for which the PSC was created the law contemplates that the first licensee will be protected in his investment and will not be subjected to a ruinous competition. taking into consideration that they are not granted to every one who applies for them but only to those who undertake to furnish satisfactory and convenient service to the public. they are of value and are considered properties which can be seized through legal process.regular operators are preferred over irregular operators ." The test by which to determine WON a property can be attached and sold upon execution is whether the judgment debtor has such a beneficial interest therein that he can sell or otherwise dispose of it for value.

for it must be conceded that two companies in the field would stimulate the business. Carmelo vs Monserrat 55 Phil 644 F: Monserrat twice applied to Congress for an exclusive franchise to operate a taxicab service in Manila. Pantranco began operating its ferry service. While requiring a proper service from a single system for a territory in consideration for protecting it as a monopoly for all the service required and in conserving its resources. Under no circumstances can the sea between Matnog and Allen be considered a continuation of the highway. It is the duty of the PSC to protect rather than to destroy the investment of a public utility. for the simple reason that the use of any taxi is the sole discretion of the customer. Accdg. The power of the PSC to issue a CPC is founded on the condition precedent that after a full hearing and investigation. publication. adequate and satisfactory service. The PSC denied the application. which is properly serving a given field. Held : There is no valid. So long as the first operator keeps and performs his terms and conditions of its license and complies with the reasonable demands of the public. of trip hours at and between the same places and for an order that all irregular operators be prohibited from operating unless they should observe an interval of 2 hours before or one hour after the regular hours of the BTC. and Epitacio San Pablo and that market conditions cannot support the entry of additional tonnage. the conveyance of passengers from Matnog to Allen is not a ferryboat service but a coastwise or interisland shipping service. Issue : WON operator in a first operator adequate and a CPC should be issued to a second field where. Pantranco acquired the vessel. and as such. in the field is rendering adequate service.Allen run is adequately serviced by the Cardinal Shipping Corp. factor in the business affairs of the community. A CPCN for the operation of an auto truck line in occupied territory should not be granted where there is no complaint as to existing rates and the co. Considering the environmental circumstances of the case. PAGE 7 . The PSC has the power to specify and define the terms and conditions upon which any public utility shall operate and to make reasonable rules and regulations for its operation. the question is what is for the best interest of the public. or may be required to do so. is at once the reason that the regulation of an existing system of transportation. It was granted. The PSC granted the petition of Orlanes. the law contemplates that the first license will be protected in his investment and will not be subjected to ruinous competition. Monserrat opposed. Monserrat does not have a vested right in the business of any person that might want the use of a taxi. Samar that will provide service to co. payment of the fees. It is not the policy of the law for the PSC to issue a CPC to a second operator to cover the same field and in competition with a first operator who is rendering sufficient. It then applied to BOT claiming that it can operate a ferry service in connection with its franchise for bus operation in the highway from Pasay City to Tacloban City for the purpose of continuing the highway. it must comply with the usual reqts. WON a land transpo co. and how the public would be injured by the granting of the certificate in question. it shall find as a fact that the proposed operation is for the convenience of the public. The primary purpose of the PSC is to secure adequate. Inc. and to fix the compensation that it shall receive for its service to the public. adducing evidence at a hearing and affording the oppositors the opportunity to be heard. To carry out the purpose and intent for which the PSC was created. satisfactory service. Before private respondent may be issued a franchise or CPC for the operation of the said service as a common carrier. there is no need to obtain a separate CPC to operate a ferry service to cater exclusively to its passenger buses and ferry trucks. buses and freight trucks that have to cross the Bernardo Strait. sustained service for the public at the least possible cost and to protect and conserve investments which have already been made for that purpose. to it. In the granting and refusal of a CPC. MARINA denied the petition on the ground that the Matnog. the BTC applied for a permit to increase the no. While a ferryboat service has been considered as a Held : NO. Sorsogon and Allen. The policy of regulation upon which the present public utility commission plan is based and which tends to do away with competition among public utilities as they are natural monopolies. and for good cause may suspend or even revoke a license granted. is a common carrier and an impt. Tested by that rule. Monserrat then applied to the PSC for a CPC. An autobus line is a public utility. it is hard to conceive how it would be for the best interests of the public to have one taxicab service only. This is unlike the BTC case which dealt with an autobus service with fixed schedules and routes. and who in all things and respects is complying with the rules and regulations of the PSC. Held : The water transport service between Matnog and Allen is not a ferryboat service but a coastwise or interisland shipping service. and that the proposed ferry operation is merely a necessary and incidental service to its main service and obligation of transferring passengers from Pasay City to Tacloban City. is to be preferred to competition among several independent systems. can be authorized to operate a ferry service or coastwise or interisland shipping service along its authorized route as an incident to its franchise without the need of filing a separate application for the same. Carmelo and Oriol then applied to the PSC for a CPC to operate a taxicab service within Manila. Decision of PSC is revoked. It wrote to the Maritime Industry Authority (MARINA) requesting authority to lease/purchase MV Black Double to be used in operating a ferryboat service from Matnog. The Governor General twice vetoed the bill. 153 SCRA 199 F: Pantranco operates passenger buses from Metro Manila to Bicol and Eastern Samar. of filing an application. legal reason why Monserrat should have the exclusive right of operating a taxicab service. and the public would much sooner and much easier become educated in the use of taxi. which is interrupted by a small body of water. The two other ferry boat services filed motions for reconsideration. it has more or less of a vested and preferential right over another who seeks to acquire a later license to operate over the same route.TRANSPORTATION AND MARITIME LAW growing demands of the public. Issue : WON the sea can be considered as a continuation of the highway. The BOT held that the ferryboat service is part of Pantranco's CPC and amended Pantranco's CPC to provide so. a who is already operating a sufficient. and in competition with. San Pablo vs Pantranco South Express. no economic waste results and service may be furnished at a minimum cost.

TRANSPORTATION AND MARITIME LAW continuation of the highway when crossing rivers or even lakes. (c) impose appropriate measures so that technical. Regulation of the Transportation Industry * The Department of Transportation and Communications contract of arising from a absent a transportation EO 125. (b) establish and administer comprehensive and integrated programs for transportation and communications. in the promotion. location. of a domestic telecommunications industry in coordination with the concerned entities particularly. even by motor or steam vessels. To accomplish such mandate. shipper . Ferry means service either by barges or rafts. Sec. property. Pantranco must secure a separate CPC for the operation of an interisland or coastwise shipping service. it cannot be considered a continuation of the highway. or organization xxx to participate and assist in the preparation and implementation of such program. shall have the ff. xxx (f) establish. implementing. Pantranco does not deny that it charges its passengers separately from the charges for the bus trips and issues separate tickets whenever they board the MV Black Double. between the banks of a river or stream to continue the highway which is interrupted by a body of water. Its CPC cannot be merely amended to include this water service under the guise that it is a mere private ferry service. of the country's inter-modal transportation and communication system in a most practical. things. Private nature: rights and obligations of parties inter se arising from transactions relating to transportation (a) contract (b) transportation contract (i) contract of transportation. transportation and communication services. and reliable postal. (b) guide govt. To accomplish its mandate. and private investments in the establishment. planning. efficient.one who gives rise to the contract of transportation by agreeing to deliver the things or news to be transported. then such line or service belongs properly to interisland or coastwide trade. or persons from one place to another. The DOTC shall be the primary policy. EO 125-A. Sec. reliable and efficient postal system for the country. the Dept. and are classified as private or special carriers and common or public carriers C. the manufacture of communications/electronics equipment and components to complement and support. devt. as well as in the fast. (g) Provide for a safe. or to present his own person or those of other or others in the case of transportation of passengers 2. and orderly fashion for maximum safety. programming. coordinating. devt. to connect two points on opposite shores of an arm of the sea such as a bay or lake which does not involve too great a distance or too long a time to navigate.one whereby a certain person or association of persons obligate themselves to transport persons. which are small body of waters separating the land. (f) encourage the devt. (d) develop an integrated plan for a nationwide transmission system in accordance with national and intl. corp. (d) administer and enforce all laws xxx in the field of transportation and communication. the Court differentiated between ferry service and interisland or coastwide service. of dependable and coordinated networks of transportation and communication systems. of all infrastructure projects and facilities of the Dept. among others. switching system for incoming and outgoing telecommunication services. rehabilitation. 3. shall have the ff. the expansion. objectives: (a) promote the devt. 4. or news as the case may be or one employed in or engaged in the business of carrying goods for others for hire Persons or corporations who undertake to transport or convey goods. service and cost effectiveness. defined . It cannot pretend that it issued tickets as a private carrier and not as a common carrier. telecommunications service reqts. things or news from one place to another for a fixed price (ii) transportation.. and private investments in the devt. as much as possible. programs of the govt xxx. operation and maintenance of an intl. when as in this case the two terminals are separated by an open sea. In the case of Javellana vs PSC. economic and other conditions for the continuing economic viability of the transportation and communication entities are not jeopardized and do not encourage inefficiency and distortion of traffic patronage. xxx call on any agency. operate and maintain a nationwide postal system xxx. improvement. Mandate. however. including. etc. or in some cases. operation and maintenance of the nationwide telecommunication network.one who binds himself to transport persons. development. (c) assess. regional and local levels. regulating. 5. and administrative entity of the Executive Branch of the govt. PAGE 8 . review and provide direction to xxx research and devt. But where the line or service involves crossing a body of water which is wide and dangerous with big waves. safe. expeditious. radio and television broadcast relaying leased channel services and data transmission. carrier or conductor . elements Parties to the contract : 1. (e) coordinate with the DPWH in the design. It in fact accepts walk in passengers during the trips. gratuitously or for hire. It cannot claim that it is both a private carrier and a common carrier at the same time. the Dept. powers and functions: (a) formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communications systems at the national. (e) guide govt. and regulation of dependable and coordinated networks of transportation and communication systems.

as well as their property. (k) establish and prescribe rules xxx operation and maintenance of a nationwide postal system xxx. joint or special rates. other persons engaged in any phase of aeronautics. in so far as may be necessary for the purpose of carrying out the provisions of this Act. such as motor vehicles. (q) establish and prescribe rules xxx accreditation of driving schools. as an attached agency xxx. alter. prescribe the forms of any and all accounts. fix and/or prescribe charges and/or rates pertinent to the operation of public air and land transportation utility facilities and services xxx. purchase. of the business of any air carrier xxx. authorize charters whether domestic or intl. fix and determine reasonable individual. and shall have the general supervision and regulation of. and jurisdiction and control over. and memoranda shall be preserved xxx. cancel. such as motor vehicles. equipment. (h) accredit foreign aircraft and manufactures xxx. The Civil Aeronautics Administration shall be under the administrative supervision and control of the Dept. suspend. and railways. Assistant Secretaries and Service Chiefs. or proper to its mandate. xxx Sec. amended. or fares which an air carrier may demand. canceled and revoked by the Board xxx whenever the Board finds such action to be in the public interest. deny. sale of equipment of an air carrier engaged in air commerce. Any permit may be altered. Airport Offices. or acquisition and control between domestic air carriers xxx 5. facilities. operation and maintenance of such telecommunication facilities in areas not adequately served by the private sector xxx. xxx d) The Civil Aeronautics Board is hereby transferred from the Dept. 11. of Tourism to the Dept. (l) establish and prescribe rules xxx issuance of CPCs for public land transportation utilities. (m) establish and prescribe rules xxx inspection and registration of air and land transportation facilities. amend. Section 10 (C) Powers and Duties of the CAB 1. and 2 others to be appointed by the President xxx Section 10 (A) Except as otherwise provided herein. (j) establish and prescribe rules xxx for the establishment. xxx The present Airport Offices of the Bureau of Air Transportation are hereby abolished and their functions are transferred to the Dept. records. Section 11. (n) establish and prescribe rules xxx issuance of licenses xxx. 6. merger. xxx h) Office of the Assistant Secretary for Air Transportation Sec. collect or receive for any service in connection with air commerce xxx 3. require each officer and director of any air carrier to transmit a report describing the shares of stock or other interest held by such air carrier with any person engaged in any phase of aeronautics. operating contract.TRANSPORTATION AND MARITIME LAW (g) issue certificates of public convenience for the operation of public land and rail transportation utilities and services. modified. 10. (o) establish and prescribe rules xxx enforcement of laws governing transportation xxx. 7. the public interest may require. records. lease. incidental. 25. modify. a permit authorizing a person to engage in domestic air commerce and/or air transportation shall be issued only to citizens of the Philippines. PAGE 9 . and the holding of the stock in. or limitations as. trimobiles. Air Force. 8. or as may be necessary. or revoke xxx any temporary operating permit or CPCN xxx 2. foreign and/or domestic. approve or disapprove increase of capital. and memoranda of the movement of traffic. 4. as amended by EO 125-A Sec. Except as otherwise provided in the Constitution and existing treaty or treaties. issue. as amended Section 5. in the judgment of the Board. zones and/or areas of operation of particular operator of public land services. xxx Section 12. as well as of the receipt and expenditures of money and the length of time such accounts. 13. monthly. (i) establish and prescribe rules and regulations for identification of routes. (a) Air (i) Air Transportation Office EO 125. (r) administer and operate the Civil Aviation Training Center xxx. inquire into the mgmt. suspended. The Civil Aeronautics Board shall be composed of the Secretary of Commerce and Industry (now DOTC) as Chairman. property rights. the CAB Administrator. A CPCN is a permit issued by the Board authorizing a person to engage in air commerce and/or air transportation. the Board shall have the power to regulate the economic aspect of air transportation. and special air services or flights xxx. The Secretary of Transportation and Communications or his designated representative shall be the Chairman of the Board xxx Sec. There shall be attached to the exercise of the privileges xxx such reasonable terms. of Commerce and Industry (now the DOTC) xxx (ii) Civil Aeronautics Board RA 776. trimobiles. (s) perform such other powers and functions as it may be prescribed by law. require annual. revise. the Commanding Officer of the Phil. or as may be assigned from time to time by the President. periodical and special reports from any carrier xxx. air carriers. and aircrafts. and control of. RA 776. charges. conditions. and franchise. (p) determine. consolidation.

eqpt. actions of the Regional Franchising and Regulatory Office herein created. issue preliminary or permanent injunction xxx. The Board shall be composed of a Chairman and 2 members with the rank. to review motu proprio the decisions.7. shall exercise administrative supervision and control over the LTFRB. 17. Provided. xxx The quasi-judicial powers and functions of the Commission are transferred to the Dept. The Secretary of Transportation and Communications. impose.6. c. 16. promulgate rules and regulations governing proceedings before the Board and the Regional Franchising and Regulatory Office xxx. 15.2. implement and enforce rules and regulations on land transportation public utilities. Sec. prescribe. e. to administer oaths and affirmations. The Board shall be composed of a Chairman and 2 members with the same rank. determine. fix. Regional Offices for Land Transportation as provided in Section 11 herein. issue. and rules and regulations requiring operators of any public land transportation service to equip. The quasi-judicial powers and functions with respect to land transportation shall be exercised through the Land Transportation and Regulatory Board. administer. Sec. the Land Transportation Franchising and Regulatory Board. The Board xxx shall sit and render its decision en banc. both direct and indirect xxx. salary and privileges of an Assistant Secretary. There is hereby created in the DOTC. salary and privileges of an Assistant Secretary. xxx (ii) Land Transportation Franchising and Regulatory Board EO 202 Sec. issue subpoena and subpoena duces tecum and to summon witnesses to appear in any proceedings of the Board. comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations. The Board shall have an Executive Director who shall also be appointed PAGE 10 . j. suspend or cancel CPCs or permits authorizing the operation of public land transportation services provided by motorized vehicles xxx. prescribe and regulate routes of service. facilities and operating procedures and techniques as may promote safety. within their respective administrative regions: Provided. or proper or incidental to the purposes and objectives of this Executive Order.TRANSPORTATION AND MARITIME LAW (b) Land (i) Land Transportation Office EO 125-A Section 9. Assistant Regional Director. formulate. Powers and functions: a. i. agencies and entities xxx. l. f. conduct investigations and hearings of complaints for violation of the public service laws on land transportation and of the Board's rules and regulations xxx. punish for contempt of the Board. all of whom shall be appointed by the President upon the recommendation of the Secretary of Transportation and Communications xxx Sec. promulgate. k. There shall be a Regional Franchising and Regulatory Office in each of the administrative regions of the country which shall be headed by a Board Regional Manager having the rank. Proper and line functions are transferred to the Dept. xxx Section 13 (a) The Land Transportation Commission is hereby abolished and its staff functions are transferred to the service offices of the Dept. standards of measurements and/or design. Title XV Sec. relative to the operation of public land transportation services provided by motorized vehicles. Administrative Code of 1987. install and provide in their utilities and in their stations such devices. and periodically review and adjust reasonable fees and other related charges for services rendered.5. The Department shall have the following line offices : (1) The Office of the Assistant Secretary for Land Transportation. Sec. amend. Sec. salary and privileges of a Dept. d. Assistant Secretaries and Service Chiefs xxx e) Office of the Assistant Secretary for Land Transportation Section 11. or as may be necessary. xxx zones or areas of operation of public land transportation services provided by motorized vehicles xxx. protection. b. xxx The present Regional Offices of the Land Transportation Commission are hereby abolished and their functions are transferred to the respective Department Regional offices for Land Transportation. xxx Sec. coordinate and cooperate with other govt.1. xxx concurrence and signature of at least 2 members xxx The decision shall be appealable to the Secretary within 30 days from receipt of the decision.4. Sec. through his duly designated Undersecretary. that the Secretary may motu proprio review any decision or action of the Board before the same becomes final. m. and collect. Administrative Code. perform such other functions and duties as may be provided by law. 9. rates and other related charges. approve and periodically review and adjust reasonable fares. Title XV Sec. that applications/petitions for routes extending their respective territorial jurisdictions shall be heard and decided by the Board. h. The Regional Franchising and Regulatory Offices shall hear and decide uncontested applications/petitions for routes. The corresponding position structure and staffing pattern shall be approved and prescribed by the Secretary xxx. g. revise.

Regional Franchising and Regulatory Offices hear and decide uncontested applications/ petitions for routes xxx. The Board shall be supported by the Technical Evaluation Division. As to object: (1) things. policies. 22. (2) persons. concurrence and signature of at least 2 members. issue subpoena and subpoena duces tecum and to summon witnesses xxx. prescribe charges/rates pertinent to the operation of public water transport utilities xxx. decisions of the Regional Franchising and Regulatory Offices shall be appealable to the Board within 30 days from receipt of the decision. (c) Water 2. Common Carriers A. functions: a.-a contract transportation is one whereby a certain person association of persons obligate themselves transport persons. Sec. (3) air (i) Maritime Industry Authority Parties to contract of transportation: EO 125.TRANSPORTATION AND MARITIME LAW by the President xxx. and periodically review and adjust reasonable fees. of the maritime industry. h. 5. approve and periodically review and adjust reasonable fares xxx. e. 20. The Secretary of Transportation and Communications shall exercise administrative supervision and control over the Board. 11. 6. l. offering their services to the public. undertake the safety regulatory functions pertaining to vessel construction and operation including the determination or manning levels and issuance of certificates of competency to seamen. ship repair xxx. register vessels as well as issue certificates. the Secretary may motu proprio review any decision or action of the Board before it becomes final. governing water transportation and the Phil. for compensation. coordinate and cooperate with other govt. g. or news from one place another for a fixed price Classification : 1. d. Sec. Legal Division. issue CPCs for the operation of domestic and overseas water carriers. perform such other functions as may now or hereafter be provided by law. Administrative Division and Finance Division. implement and enforce rules and regulations on land transportation xxx. (3) news of or to to PAGE 11 . develop and formulate plans. Sec. by land. suspend. 14 as amended by EO 125-A. xxx. enforce laws. He shall have the rank. determine. prescribe and regulate routes xxx. establish. 8. and for the national security objectives of the country. 1732. vol. issue injunctions xxx. II. and other related charges for services rendered. (2) water. Aguedo F. things. Sec. c. decision shall be appealable to the Secretary within 30 days from receipt of the decision. COMMERCIAL LAWS OF THE PHILIPPINES. 19. Sec. salary and privileges of a Dept. f. Sec. prescribe and enforce rules and regulations. promulgate. the growth and effective regulation of shipping enterprises. undertake the issuance of licenses to qualified seamen and harbor. standards and procedures for the efficient and effective discharge of the above functions. merchant marine xxx. Definitions. issue and register the continuous discharge book of Filipino seamen. actions of the Regional Franchising and Regulatory Offices xxx. administer. Common carriers are persons. agencies and entities concerned with any aspect involving public land transportation services xxx. Powers and functions of the Board: 1. The Board shall xxx sit and decide en banc. punish for contempt of the Board xxx. accredit marine surveyors and maritime enterprises engaged in shipbuilding. firms or associations engaged in the business of carrying or transporting passengers or goods or both. or cancel CPCs or permits. conduct investigations and hearings of complaints for violation of the public service laws on land transportation xxx. 18. 4. 21. fix. 7. corporations. j. issue. perform such other functions and duties as may be provided by law. Management Information Division. essential elements Art. 3. amend. Agbayani. or proper or incidental to the purposes and objectives of the Dept. prescribe. formulate. water or air. 9. 10. Service Chief. 4. 1989 ed. 13. licenses or document necessary or incident thereto. 2. or as may be necessary. k. review motu proprio the decisions. As to place of travel: (1) land. bay and river pilots. He shall assist the Board in the performance of its powers and functions. zones and/or areas of operation of particular operators of public water services. prescribe and regulate routes. establish and prescribe rules and regulations. Sec. fix. determine. (hereinafter 4 Agbayani) Transportation defined. b. In General 1. 12. promulgate rules and regulations governing proceedings before the Board and the Regional Franchising and Regulatory Office xxx. projects xxx geared toward the promotion and devt. revise. 3 The Maritime Industry Authority is hereby retained and shall have the ff. including penalties for violations thereof. impose and collect. i.

TRANSPORTATION AND MARITIME LAW (1) shipper or consignor.for the best interests of the public Meaning of Public use. it is accustomed to carry and unless it enter into a special tender reasonable compensation agreement to do so for carrying them (3) a common carrier is a public service (3) a private carrier does not and is therefore subject to regulation hold itself out as engaged in the business for the public. The true criterion is whether the public may enjoy it by right or only by permission The law prohibits unreasonable discrimination by common carriers. as ready to carry for for hire hire. or to present his own person or those of other or others in the case of transportation of passengers (2) carrier or conductor. and are classified as private or special carriers.-. for exactly the same charge for a like or contemporaneous service in the transportation of like kind of traffic under substantially similar PAGE 12 . (4) The transportation must be for hire.-. he holds himself out as ready to engage in the transportation of goods for hire as a public employment and not as a casual occupation. where the discrimination in such goods is reasonable and necessary (substantial grounds) (3) No monopoly is favored . either passengers or property. who solicit patronage of the traveling public. in some special case with some to all persons who choose to emprivate individual to carry ploy him.-. there must be a right which the law compels the owner to give to the general public. property or persons. or on inland streams or lakes. or inland streams or lakes. and common or public carriers Private carriers defined. airlines engaged in the passenger service on regular schedules on definite routes. that is.the party to whom the carrier is to deliver the things being transported.Those who transport or undertake to transport in a particular instance for hire or reward Common carriers vs Private carriers: (1) the common carrier holds (1) the private carrier agrees himself out in common. But the term is also used to denote (2) the hire paid for the carriage of goods on land from place to place.) Case : an airplane owner is a common carrier where he undertakes for hire to carry all persons who apply for passage indiscriminately as long as there is room and no legal excuse for refusing. but is open to the indefinite public. Contracts through transportation agents. The name is also applied to (3) the goods or merchandise transported at sea. The true test is whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business actually transacted. things. from port to port. (3) He must undertake to carry by the methods by which his business is conducted. and is therefore not subject to regulation as a common carrier Test for a common carrier: (1) He must be engaged in the business of carrying goods for others as a public employment. also called freightage.the Commission has the power to say what is a reasonable compensation to the utility and to make reasonable rules and regulations for the convenience of the traveling public and to enforce them (4) Public convenience .-.The terms has been defined as: (1) the price or compensation paid for the transportation of goods by a carrier. on land.person to be transported. and make the usual stipulation as to baggage are common carriers Characteristics of common carriers: (1) The common carrier undertakes to carry for all people indifferently.-. (2) He must undertake to carry goods of the kind to which his business is confined. or to designate the goods carried. times of leaving and rates of fare. and character of the conveyances used in the employment (the test is therefore the character of the business actually carried on by the carrier. Public use is not synonymous with public interest. within the limits of his capacity and the sphere of the business required of him. or the no. from one place to another. and must hold himself out as ready to engage in the transportation of goods for persons generally as a business.-A contract of transportation is not changed. altered or affected by the mere fact that the obligor avails of other parties to effect the transportation agreed upon.-. and he undertakes to carry for all persons indifferently. or news as the case may be.The law requires common carriers to carry for all persons. one who gives rise to the contract of transportation by agreeing to deliver the things or news to be transported.Persons or corporations who undertake to transport or convey goods. gratuitously or for hire.-. Carriers defined.one who binds himself to transport persons. to do so (2) The common carrier cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in those goods Exception : for some sufficient reason. and not a casual occupation. one to whom the carrier may lawfully make delivery in accordance with its contract of carriage (but the shipper and the consignee may be one person) Freight defined. as in the case of transportation agents. no one can be a common carrier unless he has held himself out to the public as a carrier in such a manner as to render him liable to an action if he should refuse to carry for anyone who wished to employ him (2) a common carrier is bound to (2) a private carrier is not carry all who offer such goods as bound to carry for any reason. so that he is bound to serve all who apply and is liable for refusal.It is not confined to privileged individuals. one employed in or engaged in the business of carrying goods for other for hire (3) consignee. without sufficient reason. advertise schedules for routes. at sea.-. Thus the term is used in 2 senses: to designate the price for the carriage. and over his established roads.

he would load his vehicles with cargo which various merchants wanted delivered to Pangasinan. recovery cannot be had. and yet not be alike. contracted with him for the hauling of 750 cartons of mild. 168 SCRA 612 F: Cendana was a junk dealer and was engaged in buying used bottles and scrap materials in Pangasinan and brought these to Manila for resale. The law prohibits common carriers (CC) from subjecting any person. as in the case of a ship totally chartered (as in this case) for the use of a single party. Issue: WON defendant operated a public utility. vs American Steamship Agencies. becomes a private carrier. Home Insurance filed for recovery from Luzon Stevedoring and American Steamship Agencies. is engaged must be for public use. Public use is not synonymous with public interest. but is open to the indefinite public. to any undue or unreasonable prejudice or discrimination whatsoever. No personal act or negligence has been proved. for loss or damage to the cargo against shipowners. Held : The provisions of our Civil Code on common carriers were taken from Anglo-American law. paid P14.TRANSPORTATION AND MARITIME LAW circumstances or conditions.the quantity. In a charter of the entire vessel. Only 150 PAGE 13 . he charged freight lower than regular rates. 40 Phil 853 F: Tan Piaco rented two automobile trucks and was using them upon the highways of Leyte for the purpose of carrying some passengers and freight. It is not enough that the general prosperity of the public is promoted. for the contract is the charter party. or any kind of traffic. There must be. must be a public utility. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of the agent would be void only if the strict public policy governing CC is applied. a common carrier undertaking to carry a special cargo or chartered to a special person only. He used two 6-wheeler trucks. a stipulation exempting the owner from liability for the negligence of its agents is not against public policy and is deemed valid. The CFI absolved Luzon Stevedoring but ordered American Steamship to reimburse the P14. and (2) the business in which such individual. De Guzman vs CA. For that service. co-partnership. General Milk Co. 1744 of NCC. Luzon Stevedoring claimed that it merely delivered what it received from the carrier in the same condition it received it. He carried passengers and freight under a special contract in each case and had not held himself out to carry all passengers and freight for all persons who might offer passengers and freight. one of the trucks was hijacked by armed men who took with them the truck and its cargo and kidnapped the driver and his helper. then different rates may be charged Cases : (1) merchandise of like quantity may not be considered alike . unless the same is due to personal acts or negligence of said owner or its managers. a right which the law compels the owner to give to the general public. Issue : Is the stipulation valid? YES. in general. The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. or locality. Home Insurance Co. or the public benefit is merely incidental. SMB demanded and Home Insurance Co. two things are necessary : (1) the individual. it is not a public use. Under American jurisprudence. Based on the stipulation. Held: There is no public use. Such policy has no force where the public at large is not involved." The essential feature of public use is that it is not confined to privileged individuals.000 in settlement of SMB's claim. Exception: When the actual cost of handling and transporting is different. Under the Public Service Law. "Public use" means the same as "use by the public. authorizing the exercise of the jurisdiction of the public utility commission. NO. (3) the general nature of the business done by the carrier. American Steamship contended that it was not liable because of a stipulation in the charter party that the charterer and not the shipowner was to be liable for any loss or damage to the cargo. etc. co-partnership. 587 of the Code of Commerce makes the ship agent civilly liable for damages in favor of third persons due to the conduct of carrier's captain and that the stipulation in the charter party exempting owner from liability is against public policy under Art. as distinguished from agents or employees. we must look not only to the character of the business to be done. If the use is merely optional with the owners. He was convicted for violation of the Public Utility Law for operating a public utility without permission from the Public Utility Commission. The true criterion by which to judge the character of the use is whether the public may enjoy it by right or only by permission. kind and quality may be exactly the same. declaring that Art. On the return trip to Pangasinan. 23 SCRA 24 F: A Peruvian firm shipped fishmeal through the SS Crowborough consigned to the SMB and insured by the Home Insurance Co. is in fact and legal contemplation merely a receipt and a document of title and not a contract.000 to Home Insurance. resulting from their transportation in the form and under the conditions in which they are offered for carriage. (4) all the attendant circumstances which might affect the question of the reasonable necessity for the refusal by the carrier to undertake the transportation of this class of merchandise Case: The mere fact that the carriage of dynamites may lead to destructive explosions is not sufficient to justify refusal if it can be proven that in the condition in which it is offered for carriage there is no real danger to the carrier nor reasonable ground to fear that the vessel and those on board will be exposed to unnecessary or unreasonable risks US vs Tan Piaco. On the way to Pangasinan. The cargo arrived with shortages. In determining whether a use is public. so far as the cost of transportation is concerned (2) shipments may be alike although composed of different classes of merchandise difference in the charge for handling and transporting may only be made when the difference is based upon actual cost Determination of justifiable refusal: This involves a consideration of the following-(1) suitability of the vessels of the company for the transportation of such products. the bill of lading issued by the master to the charterer. as shipper. etc. As a private carrier. but also to the proposed mode of doing it. etc. (2) reasonable possibility of danger or disaster. The trucks were used under special agreements to carry particular persons and property.

entered into a contract to transport molasses from Negros to Mla. as in the case of a timecharter or a voyage-charter. from Alaska to San Fernando. the molasses at the cargo tanks were contaminated and rendered unfit for the use it was intended. 1733. the ship captain.R. Thereafter. vs. no proof was adduced by the petitioner showing that the carrier was remiss in the exercise of due diligence in order to minimize the loss or damage to the goods it carried. PAGE 14 . NO. without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations. Issue : WON Cendana is a common carrier. PPI unloaded the cargo. insofar as such particular voyage is concerned. However. and one who does such carrying only as an ancillary activity. Article 1734 establishes the general rule that CC are responsible for the loss. even if they are force majeure. It is therefore imperative that a public carrier shall remain as such. notwithstanding the charter of the whole or portion of a vessel. or some principal part thereof. w/ Coastwise. 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both. The CA reversed. A shortage and contamination of the fertilizer was discovered. including the master and the crew. unless they prove that they observed extraordinary diligence required under Art. Insurance Co. and would be offensive to public policy. Cendana denied that he was a common carrier and contended that he could not be liable for the loss since it was due to force majeure. There are 2 kinds: (1) contract of affreightment which involves the use of shipping space or vessels leased by the owner in part or as a whole. NO. CA. This prompted the consignee. Held: Common carriers by the very nature of their business and for reasons of public policy are held to a very high degree of care and diligence (extra-ordinary diligence) in the carriage of goods as well as passengers. Art. destruction. The limits of extraordinary diligence are reached where there is grave or irresistible threat. except where such thieves or robbers acted with grave or irresistible threat. violence or force. The TC awarded damages. provided that they shall have complied with the rigorous standard of extraordinary diligence. 1735 which provides that CC are presumed to have been at fault or to have acted negligently. Coastwise Lighterage Corp. its officers and crew were under the employ of the shipowner and therefore continued to be under its direct supervision and control. episodic or unscheduled basis. On the other hand. The fact that Cendana does not hold a CPC is no excuse to exempt him from incurring liabilities as a CC. provided the charter is limited to the ship only. and even if it was done on a periodic basis rather than on a regular basis. Bay. Causes falling outside the list. Pag-asa filed a formal claim w/ the insurer of its cargo. (Philgen) and against the carrier. The Milk Co. and water gushed in through a hole 2 inches wide and 22 inches long. herein pvt. Gen. it would be to reward persons who fail to comply with applicable statutory reqts. G. Held : Cendana is properly characterized as a common carrier even though he merely backhauled goods for other merchants. who are his servants. to carry goods for others. The CA reversed. Planters Products vs CA. "Coastwise 9. The fertilizer was shipped on MV Sun Plum. YES. The forward buoyancy compartment was damaged. PPI sent a claim letter to SSA. Otherwise. 1995 F: Pag-asa Sales. PPI hired a marine and cargo surveyor to determine if there was any shortage. The TC ruled that he was a common carrier. An action for damages was filed. w/c is likewise owned by Coastwise. New York. and even if his principal occupation was not the carriage of goods. or deterioration of the goods which they carry unless the same is due to the causes enumerated therein. GR No. which is owned by KKKK. using the latter's dumb barges. 1993) F: Planters purchased urea fertilizer from Mitsubishi. The barges were towed in tandem by the tugboat MT Marcia. It is only when the charter includes both the vessel and the crew. herein petitioner Coastwise. Neither does it make a distinction between a carrier offering its services to the general public and one who offers services or solicits business only from a narrow segment of the population. Issue : Does a charter party between a shipowner and a charterer transform a CC into a private one as to negate the civil law presumption of negligence in case of loss or damage to its cargo? NO. July 12. Thus it continued to be a public carrier. the resident agent of KKKK for the amount of the loss. La Union. In this case. Upon reaching Mla.000 representing the value of the damaged cargo of molasses. 114167. The liability arises the moment a person or firm acts as a common carrier. the loss was quite beyond the control of the CC. one of the barges. It took PPI 11 days to unload the cargo. Issue : WON the carrier is liable for damages. SSA contended that the provisions on CC do not apply to them because they have become private carriers by reason of the charter-party. violence or force. Issue : WON Cendana may be held liable for the loss of the milk. Such enumeration is a closed list.. is let by the owner to another person for a specified time or use. It also avoids making a distinction between a person or enterprise offering transportation services on a regular or scheduled basis and one offering service on an occasional. When PPI chartered the vessel. as in a bareboat or demise that a CC becomes private. sued to claim the value of the lost merchandise based on an alleged contract of carriage. 15. resp. and are not liable for acts or events which cannot be foreseen or are inevitable. Upon arrival in the port. Held : A charter-party is a contract by which an entire ship.TRANSPORTATION AND MARITIME LAW cartons of milk were delivered. Inc. Held : The presumption of negligence on the part of respondent carrier has been overcome by the showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo. As a consequence. and (2) charter by demise or bareboat charter where the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation. Art. 1745 provides that a CC cannot be allowed to divest or diminish his responsibility even for acts of strangers like thieves or robbers. while approaching Pier 18. 101503 (Sept. Phil. fall within the scope of Art." struck an unknown sunken object. Even CC are not made absolute insurers against all risks of travel and of transport of goods. It is not disputed that the carrier operates as a CC in the ordinary course of business. Pag-asa to reject the shipment of molasses as a total loss. A time charter party was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner. Coastwise denied the claim and it was Philgen w/c paid the consignee the amount of P700.

RULINGS: (1) Bareboat charter and contract of affreightment. Coastwise. This right of the state to regulate public utilities is founded upon the police power. xxx Had the patron been licensed. RAM. but the possession.Mere proof of delivery of goods to a carrier 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. Held : Yes. PAGE 15 . upon payment of cost price of its useful eqpt. It filed with the PSC an application for authorization to operate 10 addtl.-Such regulations must not have the effect of depriving an owner of his property without due process of law. but remained a common carrier. Phil-gen filed an action agsint Coastwise bef. Hence. Pag-asa only leased 3 of petitioner's vessels. subject to liability to others for damages caused by negligence. The business of a common carrier is affected with public interest. Such statutes are not unconstitutional. the patron of the vessel "Coastwise 9" admitted that he was not licensed. When. this petition. and must submit to be controlled by the public for the common good. he must submit to control. was not converted into a private carrier. Jesus Constantino. and must submit to be controlled by the public for the common good.The judiciary ought not to interfere with legislative regulations unless they are so plainly and palpably unreasonable as to make their enforcement equivalent to the taking of property for public use without such compensation as under all circumstances is just both to the owner and to the public. nor of confiscating. is not true in a contract of affreightment on account of the aforementioned distinctions bet. Indeed this right is so far beyond question that it is settled that the power of the state to exercise legislative control over public utilities may be exercised through the board of commissioners. When private property is affected with a public interest. cancel the certificate of public convenience granted to any common carrier that repeatedly fails to comply with his or its duty to observe extraordinary diligence as prescribed in this Section. This violates the rule in the Code of Commerce (Art. We agree. or appropriating private property without just compensation. 609) w/c requires that patrons must "have the legal capacity to contract in accordance w/ this code. to the extent of the interest he had thus created. the charterer will generally be regarded as the owner of the voyage or service stipulated.-. the two. CA 146 as an undue delegation of legislative powers. anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all.-. he could be presumed to have both the skill and the knowledge that would have prevented the vessel's hitting the sunken derelict ship that lay on their way to Pier 8. by placing a person whose navigational skills are questionable. by the contract of affreightment. one devotes his property to a use in which the public has an interest. xxx" Coastwise cannot safely claim to have extraordinary diligence. after due hearing. Issue : WON the PSC may prescribe the 2 conditions as a prerequisite to the issuance of the CPCN. the owner of a vessel must completely and exclusively relinquish possession. 70 Phil 221 F: Pantranco has been engaged for the past 20 years in the business of transporting passengers by means of motor vehicles in accordance with the CPCN issued to it. therefore. 15. therefore. CA 146 provides a sufficient standard. the same. grants to the public an interest in that use. which is public interest. He may withdraw his grant by discontinuing the use. and statutes for the control and regulation of utilities are a legitimate exercise thereof. (2) Petitioner is liable for breach of contract of carriage.TRANSPORTATION AND MARITIME LAW In turn. Pantranco challenged the constitutionality of Art. The application was granted with two conditions : (1) that the CPCN would be valid for only 25 years and (2) that the service can be acquired by the govt.-. due process of law] When judiciary may interfere with legislative regulation of common carriers. however. difference. nor of limiting or prescribing irrevocably vested rights or privileges lawfully acquired under a charter or franchise [just compensation. 4 Agbayani: Common carriers are subject to legislative regulation. for the protection of the public as well as the utilities themselves. RTC-Mla. command and navigation of the vessels remained w/ petitioner. A contract of affreightment is one in w/c the owner of the vessel leases part or all of its space to haul goods for others. capacity and qualifications necessary to command and direct the vessel xxx and must be qualified xxx for the discharge of the duties of the position. Limitation on power to regulate. he. in effect.000 it paid to Pag-asa. When. Petitioner admits that the contract it entered into w/ the consignee was one of afreightment. Nature of business. and prove the skill. seeking to recover the P700. it ceases to be juris privati only. but so long as he maintains the use. 2. new trucks. The [Public Service Commission] Board of Transportation may. one devotes his property to a use in which the public has an interest. Pantranco vs PSC. to the extent of the interest he had thus created. in order to carry cargo from one point to another. command and navigation thereof to the charterer.-. grants to the public an interest in that use.Under the demise or bareboat charter of the vessel. CA affirmed the RTC decision. the charterer or freighter merely having use of the space in the vessel in return for his payment of the charter hire. by which the PSC is guided in imposing such conditions. 1765. he. power of State to regulate Art. on its own motion or on petition of any interested party.The business of a common carrier holds such a peculiar relation to the public interest that there is superinduced upon it the right of public regulation. less reasonable depreciation. at the helm of the vessel w/c eventually met the fateful accident. having failed to overcome the presumption of negligence w/ the loss and destruction of goods it transported. in effect. xxx xxx Although a charter party may transform a common carrier into a private one. The charterer mans the vessel w/ his own people and becomes the owner pro hac vice. It is a contract for special service to be rendered by the owner of the vessel and under such contract the general owner retains the possession. RTC ruled in favor of Philgen. by proof of its exercise of extraordinary diligence. command and navigation of the ships. To create a demise. The business of a common carrier holds such a peculiar relation to the public interest that there is superinduced upon it the right of public regulation.

(3) Act or omission of the shipper or owner of the goods. common carriers are presumed to have been at fault or to have acted negligently. Nature and Basis of Liability Art. common carriers are presumed to have been at fault or to have acted negligently. This is contrary to public policy. if the goods are lost. destruction. The operator of record continues to be the operator of the vehicle in contemplation of law. 1733. Registered owner primarily and solidarily liable with driver. (6) That the common carrier's liability for acts committed by thieves.One whereby a person who has been granted a certificate of public convenience allows other persons who own vehicles to operate them under such license. Art. leased or transferred to another person who was. destroyed or deteriorated.6.-The laws applicable to CC are rigorous and should not be extended to a person who has neither expressly assumed that character. Kabit system. while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756. even if the said vehicle had already been sold. or deterioration of the goods. or other natural disaster or calamity. 1. Art. and 1745." PAGE 16 . earthquake.The law requires CC to exercise extraordinary diligence which means that they must render service with the greatest skill and utmost foresight. 1745.-. whether international or civil. (5) Order or act of competent public authority. according to the circumstances of each case. actually operating the vehicle. storm. and if he voluntarily places his property in public service he cannot complain that it becomes subject to the regulatory powers of the state. 1734. 1733. (2) Act of the public enemy in war. 1735. Nos. and as such is responsible for the consequences incident to its operation. lightning. is dispensed with or diminished. confers no property rights and is a mere license or privilege. Art. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734.-The nature of the business of common carriers and the exigencies of public policy demand that they observe extra-ordinary diligence.-. such owner/operator of record is held in contemplation of law as the employer of the driver. destruction. In all cases other than those mentioned in Nos. Reasons for requiring extra-ordinary diligence. for a fee or percentage of the earnings. 1755. or of robbers who do not act with grave or irresistible threat. 1756. with a due regard for all circumstances. 5. In case of death of or injuries to passengers. under the "kabit system. "this is a pernicious system that cannot be too severely condemned. Art. the business of CC is impressed with a special public duty and therefore subject to control and regulation by the state. 4 and 5 of the preceding article. unjust and contrary to public policy: xxx (5) That the common carrier shall not be responsible for the acts or omissions of his or its employees."-Registered owner is primarily and solidarily liable for the damage caused by the vehicle registered in his name. 1735. Art. as regards the public and third persons. This is more so in the light of authorities which hold that a CPC constitutes neither a franchise nor a contract. unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755. 4 Agbayani: Extraordinary diligence required of common carriers. or deterioration of goods on account of the defective condition of the car. from the nature of their business and for reasons of public policy. unless the same is due to any of the following causes only: (1) Flood. 3. vehicle. or denying the equal protection of the laws. ship. 2.TRANSPORTATION AND MARITIME LAW either as impairing the obligation of contracts. at the time of the accident. (7) That the common carrier is not responsible for the loss. and therefore. are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. violence or force. (4) The character of the goods or defects in the packaging or in the containers. and 7. it constitutes an imposition upon the good faith of the govt. The public must of necessity rely on the care and skill of CC in the vigilance over the goods and safety of the passengers Rigorous law on common carriers not applicable to special employment as carrier. The extra-ordinary diligence required of carriers in the handling of the goods of the shippers and consignees last from the time the cargoes are loaded in the vessels until they are discharged and delivered to the consignees. Common carriers. Common carriers are responsible for the loss. void and inexistent. Any of the ff. 3. especially inasmuch as the question WON private property shall be devoted to a public use and the consequent burdens assumed is ordinarily for the owner to decide. or similar stipulations shall be considered unreasonable. unless they prove that they observed extraordinary diligence as required in Art. taking property without due process. using the utmost diligence of very cautious persons. airplane or other equipment used in the contract of carriage. nor by his conduct and from the nature of his business justified the belief on the part of the public that he intended to assume it.

to all the circumstances of each case (2) a carrier is obliged to carry its passenger with the utmost diligence of a very cautious person. Proof of the contract and of its nonperformance is sufficient prima facie to warrant recovery. Co. Isaac vs A. and that the obligation to respond for the damage which plaintiff has suffered arises. The sense of caution one should observe cannot always be expected from one who is placed suddenly in a predicament where he is not given enough time to take the proper course of action under ordinary circumstances. As he alighted. Issue: WON Cresencia is liable for breach of the contract of carriage. Cresencia was still the registered operator of the jeepney in the records of the Motor Vehicles Office and the PSC. in case of an accident. That duty. or of his servants or agents. it is not necessary for plaintiff to specify in his pleadings whether the breach of the contract is due to wilful fault or to negligence on the part of the defendant. the registered owner should not be allowed to disprove his ownership to the prejudice of the person injured or to be relieved from responsibility Cangco vs MRR. As it drew up to the station. Held : The facts of the case show that the bus and the pick-up were approaching each other head-on. This high standard of care is imperatively demanded by the preciousness of human life and by the consideration that every person must in every way be safeguarded against all injury. in order that a franchise. differing essentially. Issue : WON MRR is liable to pay damages for the acts of its EEs. objects on the platform were difficult to see. As a result. and as the railroad station was lighted dimly by a single light. their presence constituted an effective legal cause of the injuries sustained by Cangco. Principles as to liability of CC: (1) the liability of a carrier is contractual and arises upon breach of its obligation.m. with due regard for all circumstances. The contract of defendant to transport plaintiff carried with it. Plaintiff chose to hold defendant liable on its contractual obligation.. it would be easy for him by collusion with others or otherwise. Its liability is direct and immediate (culpa contractual). which can be rebutted by proof of the exercise of due care in the selection and supervision of EEs (culpa aquiliana). The bus swerved to the right and went over a pile of stones and gravel. any transfer or lease thereof should be notified to the PSC so that the latter may take proper safeguards to protect the interest of the public. Issue : WON defendant observed extra-ordinary diligence or the utmost diligence of a very cautious person in avoiding the collision. from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. the pick up car still hit the rear left side of the bus. to note that the foundation of the legal liability of the defendant is the contract of carriage. when such act or omissions cause damage which amount to the breach of a contract. the transfer is not binding against the public or the PSC. YES. one of its passengers. Ammen Trans. and it is alleged that plaintiff has failed or refused to perform the contract. Medina vs Cresencia. In a criminal case of homicide through reckless imprudence. It cannot be doubted that the EEs of the railroad co. using the utmost diligence of very cautious persons. The liability of masters and employers for the negligent acts or omissions of their servants or agents. The liability of the carrier is direct and immediate. It is impt. the grantee of record continues to be responsible under the franchise in relation to the PSC and to the public. The right to file a separate action for damages was reserved. Plaintiff brought this action for damages which the lower court dismissed holding the driver of the pick-up negligent and not that of the bus. Plaintiff's action is based on the breach of the carrier's contractual obligation to carry his passengers safely to their destination ( culpa contractual). and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract. 99 Phil 506 F: A passenger jeepney driven by Brigido Avorque smashed into a Meralco post resulting in the death of Vicenta Medina. This happened between 7 and 8 p. to escape said responsibility and transfer the same to an indefinite person or to one who possesses no property with which to respond financially for the damage or injury done. Since a franchise is personal in nature. an employee of MRR. Ratio: The law requires the approval of the PSC.The law does not relieve the registered owner directly of the responsibility that the law fixes and places upon him as an incident or consequence of registration -where a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is. Furthermore. or any privilege pertaining thereto. by implication. Avorque pleaded guilty.TRANSPORTATION AND MARITIME LAW Reason for holding registered owner liable. 101 Phil 1046 F: Plaintiff boarded defendant's bus as a paying passenger from Albay. The bus collided with a pick-up truck which was coming from the opposite direction trying to swerve from a pile of gravel. was direct and immediate. When the facts averred show a contractual undertaking by defendant for the benefit of plaintiff. if at all.L. was riding on its train. 38 Phil 768 F: Jose Cangco. having due regard for all the circumstances PAGE 17 . plaintiff is guilty of contributory negligence since he placed his left elbow outside the window.-. while Rosario Avorque was the owner at the time of the accident. were guilty of negligence in piling sacks on the platform. there is breach if it fails to exert extra-ordinary diligence accdg. YES. his foot stepped on a sack of watermelons causing him to slip and his right arm was crushed. and in contemplation of law. This extra-ordinary diligence required of common carriers is calculated to protect the passengers from the tragic mishaps that frequently occur in connection with rapid modern transportation. may be sold or leased without infringing the certificate issued to the grantee. Held : YES. and its nonperformance could not be excused by proof that the fault was morally imputable to defendant's servants. is not based upon a mere presumption of the master's negligence in their selection or control. his left arm was completely severed. being contractual. Despite the efforts of the bus driver. from that presumptive responsibility for the negligence of its servants. the duty to carry him in safety and to provide safe means of entering and leaving its trains. and that if property covered by the franchise is transferred or leased without this requisite approval. the plaintiff made his exit. Ratio: A CC is bound to carry the passengers safely as far as human care and foresight can provide.

Upon reaching Tarlac. the right wheel of the jeepney was detached. 105 Phil 266 F: Respondent. The proximate cause of the accident was the negligence of Manalo and the spouses Mangune. and in the event of contractual liability. The law was designed primarily for the protection of the public interest. the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. making a sudden U-turn and encroaching on the right of way of the other vehicles. Common carriers. 3 persons died while the others sustained injuries. the CFI awarded actual damages. and this disputable presumption may only be overcome by evidence that he had observed extra-ordinary diligence or that the death or injury of the passenger was due to a fortuitous event. The distinction between fraud. The exception to this is when a mishap results in the death of a passenger. Laws applicable Art. and 1745. offering their services to the public. according to the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734.) Art. Rabbit bus bumped from behind the jeepney. for compensation. the victim is entitled to recover only the share which corresponds to the driver. Common carriers are persons. (Insurance co. The contract of carriage is between the carrier and the passenger. or air. As a result of the collision. while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756. Their contract with Manalo was P24 for the trip. YES. 1733. 1755. Classes of common carriers Held : In case of breach of contract (including one of transportation). unless contradicted by other evidence. While the jeep was descending at Sta. PAGE 18 . with a due regard for all circumstances. the driver lost control of it causing it to swerve and hit the bridge wall resulting to injuries to its passengers including respondent who suffered a fracture of the upper right humerus. Rabbit and De los Reyes (driver). Art. Nos. Pampanga bound for Carmen. and 7. On the presumption that the drivers who bump the rear of another vehicle are guilty and the cause of the accident. Pangasinan. are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. 5. In an action for damages. proof of bad faith or fraud. using the utmost diligence of very cautious persons. A carrier's bad faith is not to be lightly inferred from a mere finding that the contract was breached through negligence of the carrier's employees. In all matters not regulated by this Code. in which a CC is liable to pay moral damages for the mental anguish by reason of the death of the passenger. 1735. 4 Agbayani: New Civil Code primarily governs common carriers. Phil. a professor of Fine Arts. So where the injured passenger does not die. even if such breach be due to the negligence of the driver. Issue : WON the approval of the PSC is necessary for the sale of a public service vehicle even without conveying therewith the authority to operate the same. the carrier is exclusively responsible therefore to the passenger. Issue : WON moral damages may be awarded. firms or associations engaged in the business of carrying or transporting passengers or goods or both. In culpa contractual. corporations. moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. To make the driver jointly liable would make the carrier's liability personal instead of merely vicarious and consequently. the carrier is presumed to have been at fault or to have acted negligently. so it was running in an unbalanced position. Under the law.The Provisions of the Civil Code [17321766] primarily govern common carriers and the provisions of the Code of Commerce [Overland Ratio: The principle of last clear chance would call for application in a suit between the owners and drivers of two colliding vehicles. 189 SCRA 159 F: Several passengers boarded the jeepney owned by spouses Mangune and driven by Manalo at Dau.. Mesa bridge at excessive speed. 5. The driver cannot be held jointly liable with the owners of the jeep in case of breach of the contract of carriage. water. Held : A transfer made without the requisite approval of the PSC is not effective and binding in so far as the responsibility of the grantee under the franchise in relation to the public is concerned. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence. Rabbit Bus Lines vs IAC. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. the presumption is that common carriers acted negligently but not maliciously. by land. Art.TRANSPORTATION AND MARITIME LAW (3) a carrier is presumed to have been at fault or to have acted negligently in case of death of. Issue: Who should be held liable? the Mangunes and Filriters Guaranty Assurance Corp.6. it being it duty to prove that it exercised extra-ordinary diligence (4) the carrier is not an insurer against all risks of travel. Rosales.e. 1766. bad faith or malice in the sense of deliberate or wanton wrong doing and negligence (as mere carelessness) is too fundamental in our law to be ignored. 1732. is essential to justify an award of moral damages. from the nature of their business and for reasons of public policy. 4. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide. or injury to. the SC held that the jeep made a sudden U-turn which was so abrupt that the other driver de los Reyes did not anticipate the sudden U-turn. was a passenger of a jeep registered in the name of Fores but actually operated by Carmen Sackerman. Fores vs Miranda. Phil. Manalo stepped on the brake. The CA reduced the actual damages and added moral damages and attorney's fees.-. Cases were filed against the spouses Mangune. wanton or deliberately injurious conduct. The Phil. Manalo. i. passengers.

and 2 cases of surveying instruments consigned to Aman Enterprises and General Merchandise. grounds: (a) that the loss was due to an extraordinary fortuitous even which is an exempting circumstance under Sec. as a fact. common carriers. The 128 cartons were insured by respondent Nisshin Fire and Marine Insurance Co. NCC): "(1) Flood. the same vessel took on board 128 cartons of garment fabrics and accessories. The foregoing suffices to show that the circumstances under which the fire originated and spread are such as to show that Petitioner carrier or its servants were negligent in connection therewith. In the first case. the complete defense afforded by the COGSA when the loss results from fire is unavailing to petitioner carrier. PAGE 19 .039 consigned to Phil. En route for Manila. it is required under Art. (2)Who has the burden of proof to show negligence of the carrier. accdg. or deterioration Art. It may even be caused by the actual fault or privity of the carrier.4 (2). the rights and obligations of common carriers shall be governed by the Code of Commerce and special laws. the fire was already big. resulting in the total loss of ship and cargo. Nor may Petitioner Carrier seek refuge from liability under the COGSA. 1739 of the same Code that the natural disaster must have been the proximate and only cause of the loss. 1734. As the cargoes in question were transported from Japan to the Philippines. are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers Liability and presumption of Eastern Shipping Lines vs IAC 150 SCRA 463 F: These two cases. The provisions of the NCC primarily govern contracts of carriage of goods from foreign ports to Philippine ports of the goods unless the same is due to any of the ff. Blooming Mills and 7 cases of spare parts valued at P92. that the fire must have started 24 hrs before the same was noticed. In this case. Art. This petitioner carrier has also failed to establish satisfactorily. 1753. have proven that the transported goods have been lost. a vessel operated by petitioner Eastern Shipping Lines. The burden then is upon Petitioner carrier to prove that it has exercised the extra-ordinary diligence required by law. in effect. the sinking of the M/S ASIATICA when it caught fire. Ratio : (1) The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss. causes only (Art. B. (b) that when fire is established. Insurance and Surety Corporation.000 pieces of colorized lance pipes in 28 packages valued at P256. 1734. the liability of Petitioner Carrier is governed primarily by the Civil Code. that there was "actual fault" of the carrier shown by lack of diligence in that when the smoke was noticed. is suppletory to the provisions of the Civil Code. are bound to observe extra-ordinary diligence in the vigilance over goods. earthquake. the M/S ASIATICA. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: (b) Fire. found. It is provided therein that: "Sec. The insurers paid the corresponding marine insurance values and were subrogated to the rights of the latter as the insured. They filed suits against the petitioner Carrier and won (affirmed by the CA). In the second case. It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity." However. the COGSA. Issues: (1)Which law should govern : the Civil Code or the Carriage of Goods by Sea Act. Petitioner Carrier can not escape liability for the loss of the cargo. 4(2)(b) of the Carriage of Goods by Sea Act (COGSA). to all the circumstances of each case. a special law. storm.TRANSPORTATION AND MARITIME LAW Transportation and Maritime Commerce] and special laws [Carriage of Goods by Sea Act. Petitioner carrier has also proven that the loss was caused by fire. Thus. Petitioner carrier denies liability on the ff. from the nature of their business and for reasons of public policy. and that after the cargoes were stored in the hatches. Common carriers. Common carriers are responsible for the loss. destruction or deterioration.75 consigned to Central Textile Mills. Salvage Act] have only subsidiary application to common carriers. Having failed to discharge the burden of proving that it had exercised the extra-ordinary diligence required by law. in all matters not regulated by said Code. destruction or deterioration. Consequently. Common Carriers 1. as subrogees of the cargo shippers. arose from the same incident. the respective Insurers. unless it proves that it has observed the extra-ordinary diligence required by law. unless caused by the actual fault or privity of the carrier. from the nature of their business and for reasons of public policy. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss.361. lightning or other natural disaster or calamity. loaded at Kobe. we are of the opinion that fire may not be considered a natural disaster or calamity. consigned to Mariveles Apparel Corporation. NCC. This must be so as it arises almost invariably from some act of man or by human means. 1733. However. and Dowa Fire & Marine Insurance Co. during or after the occurrence of the disaster. and that the carrier has exercised due diligence to prevent or minimize the loss before. the burden of proving negligence is shifted to the cargo shipper. negligence (2) Under the Civil Code. then Article 1735 provides that in all cases other than those mentioned in Art. both for the recovery of value of cargo insurance. the CC shall be presumed to have been at fault or to have acted negligently. And even if fire were to be considered a natural disaster within the meaning of Art. destruction. the ship caught fire and sank. As the peril of fire is not comprehended within the exceptions in Article 1734. xxx" The Carrier claims that the loss of the vessel by fire exempts it from liability under the phrase "natural disaster or calamity. both the TC and the CA. Both sets of goods were insured against marine risk for their stated value with respondent Devt. no regular inspection was made as to their condition during the voyage." In this case. Japan for transportation to Manila 5. in 2 containers. 1734.

(2) Act of the public enemy in war.-. Presumption of negligence. earthquake. Art. Carrier has duty to keep and care for goods carried. The carrier is liable for injury to. CC should be afforded the right of having a wide discretion in the selection and supervision of persons who will handle the goods. Art. A CC can terminate an EE whose continued service is inimical to its interests and the safety of the passengers. carry. Where a vessel accepts a cargo for shipment for valuable consideration. etc. unless they prove that they observed extraordinary diligence as required in Art. destroyed or deteriorated. CC cannot interpose the defense that it exercised due diligence in the selection and supervision of EEs. and it is required to provide adequate ventilation for the safe carriage of the cargo. 1733. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734. and other safety precautions. Nos. 2.-. Whenever a passenger dies or is injured the presumption is that the CC is at fault notwithstanding the fact that it has exercised due diligence of a good father of a family in the selection and supervision of its EEs.-.6. or deterioration of the goods carried by them. Air carrier can terminate services of pilot for serious misconduct and drunkenness.-In general. destruction. Natural disaster: The CC is exempt from liability if he proves that the loss or destruction of the merchandise was due to accident and force majeure and not to fraud. or loss of. It should not be accepted unless it can be given the type of storage that its character requires. 1735. Art. it takes the risk of delivering it in good condition as when it was loaded. common carriers are presumed to have been at fault or to have acted negligently. The carrier is also liable even in those cases where the cause of the loss or damage is unknown. fault or negligence on the part of the EEs and owners of the CC. Duty of carrier to deliver cargo in good condition as when loaded. and provide reasonable and ordinary inspection and care in and about the transportation of cargo. according to the circumstances of each case. Common carriers are responsible for the loss. (read discussion under [3] Nature and basis of liability) Art. extraordinary measures and diligence should be exercised by it for the safety of its passengers and their belongings. In the exercise of extra-ordinary diligence required by law. because of its duty of extraordinary dilignece. In all cases other than those mentioned in Nos. a carrier is liable for damages suffered by goods carried if such damages arise from its negligence. unless the same is due to any of the following causes only: (1) Flood.-. destroyed or deteriorated CC must then prove that he has exercised extra-ordinary diligence required by law or that the loss. while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.The CC can terminate the services of its drivers. carriers given wide discretion in selection and supervision of persons to handle goods. it is not relieved of liability for loss or injury resulting therefrom. To comply with this obligation.-. Thus. While the liability of a carrier as an insurer is not recognized in this jurisdiction. 5. The liability of the CC arises from breach of the contract of carriage and not from culpa aquiliana. pilots and EEs for serious misconduct and drunkenness because of its duty of extra-ordinary diligence. A vessel should not accept cargo unless it can be given the type of storage that its character requires. A failure on the carrier to use extra-ordinary care in carrying goods or passengers safely is a breach of contract and constitutes culpa contractual not culpa aquiliana. CC are presumed to have been at fault or to have acted negligently. but it accepts the goods notwithstanding such condition. storm. And if the fact of improper packing is known to the carrier or his servants. keep and care for the goods carried and to exercise due care to ascertain and consider the nature of the goods offered for shipment and to use such methods for their care during the voyage as their nature requires. lightning. 3.-. CC are responsible for the loss. and of their arrival at the place of destination in bad order makes out a prima facie case against the CC Defenses available to CC: 1. if the goods are lost. The extra-o diligence required of CC in the handling of the goods of the shipper and the consignees lasts from the time the cargoes are loaded in the vessels until they are discharged and delivered to the consignees. The plaintiff needs only to prove that the goods he transported have been lost.CC are not required to exercise all the care. not to exceed safe and legal speed limits. (5) Order or act of competent public authority. was due to accident or some other circumstances inconsistent with its liability Mere proof of delivery of goods in order to a carrier. destroyed or deteriorated. cargo resulting from the failure to properly care for and handle the cargo en route. Due extraordinary diligence required. or apparent upon ordinary observation. 1735. It is however the duty of CC to teach their drivers not to overload vehicles. 4 Agbayani: Responsibility of common carriers. 1734. Carrier not insurer. 1735 (exercise of extra-ordinary diligence required by law) 3. and 7. (4) The character of the goods or defects in the packaging or in the containers. 4 and 5 of the preceding article.Under Art. 1735.It is the duty of the CC to properly and carefully handle. or other natural disaster or calamity. 1.The law requires CC to exercise extra-o diligence which means that they must render service with the greatest skill and utmost foresight. whether international or civil.TRANSPORTATION AND MARITIME LAW transported by them. if the goods are proved to have been lost. 1734 2. destruction. the CC must give due regard to all circumstances and take all steps necessary to insure the safety of the passengers and the goods given the circumstances. This responsibility arises from contract.There is no absolute obligation for a CC to accept cargo. skill and diligence of which the human mind can conceive nor such as will free the PAGE 20 . for placing of conditions in a bill of lading does not relieve the vessels of obligation to take appropriate care of the cargo. unless they prove that they have observed the extra-o diligence required by law. and 1745. as the relation between a carrier and its patrons is of a contractual nature. (3) Act or omission of the shipper or owner of the goods. or deterioration of the goods.

Inasmuch as the fact of loss was proven. However. the shipper is not bound by the clause limiting liability and the stipulation is void or against public policy. at the time the goods were delivered. xxx PAGE 21 . of the Philippines. Cagayan. to prove that the loss or injury was due to some circumstances inconsistent with its liability (a) Natural disaster Art. Exemption from liability Proof of the delivery of the goods in good order to a carrier.. and it was incumbent upon the petitioner to rebut that presumption by proving that the loss was not due to any fault or negligence of the petitioner. In the absence of proof showing that the carrier was not at fault for the loss. during and after the occurrence of flood. Petitioner refused to accept the warrant. It is admitted by petitioner that the consignee. the Insular Auditor was entitled to withhold the amount admittedly due to the petitioner for the freight charges. had instituted an action in court against petitioner to recover the value of the oil lost. obliging itself to carry said supplies to the place agreed upon. storm. storm. and to evidence the contract of transportation. The goods were delivered by the shipper to the carrier which accordingly received them. Issue : WON Dollar may be held liable. or other natural disaster in order that the common loss of the other. In that situation. in an action for damages. it shall be upon proper bill of lading or receipt. is competent evidence to show that the shortage did exist. Both shipments arrived with one case missing per shipment. a sum sufficient to cover the value of the oil lost in transit. which in legal effect would be to say that he could not recover damages at all. makes out a prima facie case against the carrier. As to when and how the goods were damaged in transit is a matter peculiarly within the knowledge of the carrier and its employees." and that in no case shall it be held liable beyond $250 for any article not enclosed in a package unless a higher value is stated therein and ad valorem freight paid or assessed thereon. The Insular Auditor deducted the amount of the lost goods from the entire amount payable to Ynchausti. When the goods are delivered on board the ship in good order and condition and the carrier delivers them to the shipper in bad order and condition. Since Dollar was not even able to prove that the goods were wet with sea water due to a fortuitous event. having admitted that the goods were damaged while in transit and in its possession. from the port of Manila to the port of Appari. this action was filed. to be transported from New York to Manila. would force him to rely upon the EEs of Dollar's ship. vs Dexter 41 Phil 289 F: The Govt. To require Mirasol to prove such. or deterioration of the goods. makes a prima facie case. the Insular Auditor decided that the leakages were due to Ynchausti's negligence. bill of lading. the natural disaster must have been the proximate and only cause of the loss. it is incumbent on the carrier. upon investigation. destruction. received the above-mentioned supplies in apparent good condition. be entitled to judgment. but Dollar refused to pay alleging that the damage was caused by sea water and that Mirasol entered into a contract providing that Dollar will not be held liable for loss or damage of merchandise resulting from "acts of God" or "perils of the sea. lightning. a common carrier for the transportation. Ratio: There was no claim or pretense that Mirasol signed the bill of lading or that he knew of its contents. The mere proof of delivery of goods in good order to a carrier. causes only: (1) Flood. Where it appears that a bill of lading was issued to a shipper containing a clause limiting the carrier's liability. whereby it was stipulated that the carrier. on the bill of lading or receipt before accomplishing it. so that if no explanation is given as to how the injury occurred. YES. or damage. It is incumbent upon the carrier to prove that the loss was due to accident or some other circumstance inconsistent with its liability. shortage. Having received the boxes in good condition. Hence. the Govt. in order to exonerate itself. employed the services of petitioner. The books arrived in bad order and damaged condition. it results in the presumption that the petitioner was to blame for the loss. the carrier must be held responsible. noted the losses in the respective bill of ladings. 1734. 646 of the Administrative Code provided that when Govt. On another occasion. Ynchausti Steamship Co. Mirasol filed claims. In order that the common carrier may be exempted from responsibility. The LC ruled in favor of Mirasol for payment of P 2. acting through the Insular Purchasing Agent. property is transmitted from one source to another by carrier. However. based on the facts. Ynchausti denied negligence. its legal duty was to deliver them in the same condition as received. it would. ten gallons to the case. President Garfield. Such notation made in obedience to the code. Ynchausti Steamship Co. and of their arrival at the place of destination short or in bad order. unless the same is due to any of the ff. A CC is not an insurer of the safety of the passengers and is not absolutely and at all events to carry them safely and without injury. the common carrier must exercise due diligence to prevent or minimize loss before. also sent 96 cases of Cock brand mineral oil. earthquake. it must be presumed that the carrier was liable. or other natural disaster or calamity. the parties duly executed and delivered what is popularly called Govt. from such carrier. Dollar. printed in fine letters on the back of the bill of lading. Issue : Is Ynchausti liable for the loss? YES. Indeed. he was not legally bound by the clause limiting Dollar's liability. on board the steamship Venus.TRANSPORTATION AND MARITIME LAW transportation of passengers from all possible perils. 2.080. if the Govt. Ratio : Sec. Common carriers are responsible for the loss. resulting in total loss of one case and partial Art. the burden of proof then shifted and it devolved upon him to allege and prove that the damage was caused by reason of some fact which exempted it from liability. of consignments of merchandise. Ynchausti. 1739. Mirasol vs Dollar 53 Phil 124 F: Mirasol was the owner of two cases of Encyclopedia Brittanica shipped in good order and condition on board Dollar's steamship. and of their arrival at the place of destination in bad order. and it shall be the duty of the consignee or his representative to make all notation of any evidence of loss. consisting of 30 cases of Wine Rose mineral oil of two 5-gallon cans to the case. Shippers who are forced to ship goods in an ocean liner have legal rights. the burden of proof shifted and it devolves upon the carrier to both allege and prove that the goods were damaged by reason of some act which legally exempts it from liability. which the shipper did not sign and of which he was not advised.

destruction. 3. that the loss or destruction of the merchandise was due to accident and force majeure and not to fraud. 1740 -. (Code of Commerce. are for the account and risk of the shipper. Issues: (1) WON the carrier is relieved from liability due to force majeure. in a wreck due to accident or force majeure must. no negligence on the part of the shipper intervened. unless the contrary be expressly stipulated. he may yet be held liable notwithstanding the fact that the loss. fault or negligence on the part of the captain or owner of the ship -. Code of Commerce) Martini Ltd. drove the lorcha to the shore and wrecked it. as the lorcha was being towed. (2) The record bears no proof that said loss caused by the destruction of Pilar occurred through the carelessness or negligence of the defendant.natural disaster must have been the proximate and only cause of the loss 2.642. the defendant has not incurred any liability whatsoever for the loss of the goods. 1740.. Considering. Art. a natural disaster shall not free such carrier from responsibility. scattering the goods on the beach. therefore. and there was no negligence or lack of care or diligence on the part of the defendant or its agents. the lorcha arrived and the goods were loaded. The carrier is exempt from liability if he is able to prove. (2) WON the carrier is liable for the loss of the cargo and for failure to deliver the same at the place of destination. The defendant as well as its agents and patron had a natural interest in preserving the craft -. fall upon their respective owners. 22 Phil 152 F: Ynchausti and Co. If the CC negligently incurs in delay in transporting the goods.-. NO. Thus construed.the CC must not be in delay. shall be for the account and risk of the shipper. if the obligor incurs delay. a natural disaster shall not free it from responsibility. the act of God is the proximate cause of the loss and the carrier's delay or refusal to transport the goods. all the losses and deteriorations which the goods may suffer during the transportation by reason of fortuitous event. or other natural disaster. 361. Plaintiff filed an action for damages for P 20. The record discloses that Pilar was manned by an experienced patron and a sufficient number of crewmen plus the fact that it was fully equipped. LC decided that plaintiff was entitled only to P 14. storm. Several days later. Art. in Samar. all damages and impairment suffered by the goods in transportation. However. If the CC does not exercise due diligence in minimizing the loss. they were sold at a public auction. It is then necessary that it be established that the CC was guilty of a willful or negligent act and that between this willful or negligent act and the act of God. YC's laborers proceeded to gather up the goods. or the inherent nature and defect of the goods.Accidents caused either by defects in the carrier or through the negligence of the carrier is not caso fortuito. inasmuch as such loss was the result of a fortuitous event or force majeure. represented in the 4 Agbayani: Effect of New Civil Code. if between the delay or refusal of the CC to transport the goods and the loss of the goods due to an act of God there intervened the shipper's negligence. carelessness or lack of skill on the part of the captain or because the vessel put to sea is insufficiently repaired and prepared.TRANSPORTATION AND MARITIME LAW carrier may be exempted from liability for the loss. 39 Phil 934 F: Martini shipped on board the Easter. As it was impossible to preserve the goods. w/c is presumed. Ratio: (1) It is a proven fact that the loss or damage to the goods shipped on the said lorcha was due to the force majeure which caused the wreck of the said craft. Art. Merchandise shall be transported at the risk and venture of the shipper. 841.. the conduct of the men of the defendant Pilar and of its agents during the disaster. received from Ong Bien Sip in Manila 205 bundles of goods to be conveyed by YC's steamer to Gubat in Sorsogon. 1734 (2). or deterioration of the goods. force majeure.an interest equal to that of the plaintiff. which was to transport the goods to Catarman was not yet in Gubat when the cargo arrived. YES. the cargo was stored in YC's warehouse. 361 of the Code of Commerce. Requisites for defense of natural disaster: 1.) Tan Chiong San vs Ynchausti & Co. he shall be responsible for any fortuitous event until he has effected delivery. The crewmen took all the precautions that any diligent man should have taken whose duty it was to save the boat and its cargo. par. Under Art. The CC must exercise due diligence to prevent or minimize the loss before. thus causing a break in the chain of causation between the act of God which caused their loss and the CC's fault. 1165 par. As the lorcha Pilar. except in cases where the wrecking or stranding of the vessel occurred through malice. and by the instinct of selfpreservation of their lives. The passenger or shipper has every right to presume that the carrier is perfectly in good condition and could transport him safely and securely to his destination PAGE 22 . or by virtue of the nature or defect of the articles. 3. It does not mean that the carrier is free from liability for losses and deterioration arising from his negligence or fault. Loss of a ship and of its cargo.that the loss was a result of the stranding of Pilar because of the hurricane that overtook it. (Art.000. vs Macondray & Co.-. or inherent nature and defects of the goods. force majeure. a storm arose. is merely the remote cause. No such stipulation appears of record. 361 is not inconsistent with Art. the shipper is not even entitled to set up the claim of contributory negligence. if the contrary has not been expressly stipulated. Proof of these accidents is incumbent upon the carrier.63. owned by the Australian Steamship Co. during and after the occurrence of flood. to Art. force majeure. and there to be transhipped to another vessel belonging to YC and transported to Catarman. destruction or deterioration of the goods arose out of natural disaster. Accident due to defects of carrier not caso fortuito. merchandise shall be transported at the risk and venture of the shipper. as he did prove. by reason of accident. 1 of Art. If the CC incurs in delay. Accdg.Transportation of the merchandise "at the risk and venture of the shipper" means that the shipper will suffer losses and deterioration arising from fortuitous event. 1735 of the NCC. As a consequence. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in Art. its agents or patron of the lorcha. therefore. as a general rule. Art. In such cases. 1739 -. However.

Art. Even if the fire were to be considered a natural disaster under Art. they failed to give the necessary instructions thereby manifesting acquiescence. in this case. The carrier is responsible for safe and proper storage of the cargo. he first obtains a shipping order from the ship owner. then he becomes responsible for it." Article 1749. Thus. As there is no allegation or proof of negligence on the part of the carrier in protecting the cargo from rain or sea water and as the complaint clearly indicates that the damage was due to it being kept on deck. The bill of lading plainly showed that the cargo would be so carried. But. this would constitute the mate's receipt showing that the cargo has been taken aboard. in the absence of any allegation or proof of negligence. By doing so. the carrier is still responsible if the injury might have been avoided by the exercise of reasonable skill and attention on their part. When signed by the ship's mate. he takes the risk upon himself. This must be so as it arises almost invariably from some act of man or by human means. binding himself to abide by the terms of the mate's receipt which in this case obtained a stipulation that the cargo shall be shipped on or under the deck at the option of the ship and at shipper's risk. the shipper entered into a written guaranty. the defendant is absolved. 1735 applies and the CC shall be presumed to have been at fault or to have acted negligently. where the shipper consented to the conditions of carriage. Ordinarily. during or after the occurrence of the disaster. must have known from the tenor of the guaranty which he signed that defendant had reserved the right to carry the cargo on deck. The CFI ruled for Martini. it was discovered that the shipment was damaged by rain and sea water. The burden is on the CC. The exception is made by law and falls within the general principle that no one is responsible for fortuitous events. They only protested after the bill had been negotiated at the bank and even when there was time to stop the shipment. YES. without which it would not have happened. If goods shipped are found to have been damaged. However. although the Code expressly permits a stipulation limiting such liability. This shipping order is authority for the ship's officers to accept the shipper's cargo. an EE of Martini. As the peril of fire is not comprehended under Art. NO. they nevertheless consented for it to go on deck. 1680 which considers fire as an extra-ordinary fortuitous event does not apply since it refers only to leases of rural lands where a reduction of rent is allowed when more than 1/2 of the fruits have been lost due to such event. the burden of proof is on the carrier to show that the damage was due to fortuitous events. Ratio: While Martini would have greatly preferred for the cargo to be carried under the hatches. In every contract of affreightment. Upon arrival in Kobe. Macondray denied any responsibility on the ground that the contract of affreightment clearly states that the cargo was to be carried on deck at shipper's risk as evidenced by the words "on deck at shipper's risk" stamped on the bill of lading. if attentive to the interests of his company. plaintiff did not order its discharge. When the shipper consents to his goods being carried on deck. 1734. 219 cases of chemicals for Kobe. in this case. losses by dangers of the seas are excepted from the risk which the carrier takes upon himself whether the exception is expressed in contract or not. Issue: On the $500 Per Package Limitation Ratio: Petitioner carrier avers that its liability should not exceed $500 per package as provided in Section 4(5) of the COGSA. The LC and the CA found that there was lack of diligence on the part of CC amounting to actual fault. the burden of proof is shifted to the shipper. In this case. and there is no doubt that by the general maritime law he is bound to secure the cargo safely under deck.TRANSPORTATION AND MARITIME LAW Philippines by Macondray. The shipper would then present this receipt to the agent of the ship's company who would then issue the bill of lading. unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. is binding. steps in and supplements the Code by establishing a statutory PAGE 23 . NCC also allows the limitations of liability in that it provides that "a stipulation that the CC's liability is limited to the value of the goods appearing in the bill of lading. 1734. It is not permissible for the court. it is required under Art. Codina. plaintiff protested the arrangement but when the defendant informed them that the cargo could be discharged if they were dissatisfied. Ratio: Fire may not be considered a natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier. Art. (2) WON defendant was negligent and thus liable for the damage to the cargo. even if the damage is caused by one of the excepted causes. unless it proves extra-ordinary diligence. But then this general law is subject to the exception that when the inevitable accident is preceded by fault of the carrier. the carrier cannot protect himself by showing that they were damaged or lost by the dangers of the sea. If he carries the goods on deck without the consent of the shipper and the goods are damaged or lost in consequence of being exposed. the COGSA. 1739 that the disaster must have been the proximate and only cause of the loss. when a shipper wishes to avail of space on board a ship. The plaintiff was duly notified as to the manner by which was the cargo was to be shipped. 1734 on the ground that the loss of the vessel by fire comes under the phrase "natural disaster or calamity?" NO. It does not fall within the category of an act of God unless caused by lightning or by another natural disaster or calamity. Eastern Shipping Lines vs IAC. and that the CC exercised due diligence to prevent or minimize the loss before. or the equivalent of that sum in other currency. which reads: "(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package xxx or in case of goods not shipped in packages. to attribute negligence to the ship's employees in the matter of protecting the goods from rains and storms. Japan. Issues: (1) WON plaintiff consented to having the cargo carried on deck. per customary freight unit. which is suppletory to the Civil Code." It is to be noted that the Civil Code does not of itself limit the liability of the CC to a fixed amount per package. unless the shipper or owner declares a greater value. Martini claims that it was the ship's duty to stow the cargo in the hold and not to place it on the deck exposed to the elements. Nor may petitioner seek refuge under COGSA since fire is only an exempting circumstance if not caused by actual fault or privity of the carrier. the shipper obtained the bill of lading without first presenting the mate's receipt (so as to expedite the negotiation of the bill with the banks). However. 150 SCRA 463 Issue: Should petitioner be exempted from liability under Art. and such manner of carriage having been consented to by the plaintiff.

The cartons and not the containers should be considered as the shipping unit. 4 Agbayani: Acts of public enemy. destruction or deterioration of the goods. Art. Art. etc. shall be equitably reduced. unless the same is due to any of the following causes only: (4) The character of the goods or defects in the packaging or in the containers. Dissenting : Yap. After the periods mentioned have elapsed. without dispute from the plaintiff. the CC cannot be held responsible. 1734 (2). and in case that they may be so ascertained.supplied. (Code of Commerce. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in Art. 366. Defendant proved. or deterioration of the goods. there is no stipulation in the respective bills of lading limiting the carrier's liability for the loss or destruction of the goods. or deterioration of the goods. the common carrier must exercise due diligence to forestall or lessen the loss. In order that the common carrier may be exempted from responsibility. 1734. However. 1741. however. The LC absolved the defendant from any liability since the defendant was able to prove that the tiles were leaded. and the proximate cause is still the negligence of the CC. Art. the common carrier must exercise due diligence to prevent or minimize loss before. The shipper must have saved on freight charges by using containers for shipment. Common carriers are responsible for the loss. unless the same is due to any of the following causes only: xxx (3) Act or omission of the shipper or owner of the goods. and (2) the CC must have exercised due diligence to prevent or minimize the loss before. 40 Phil 219 PAGE 24 . Act or omission of the shipper. or deterioration of the goods should be caused by the character of the goods. the proximate cause F: Plaintiff shipped a cargo of roofing tiles from Manila to Iloilo on a vessel owned by Ynchausti. that there thereof being the negligence of the common carrier. Govt. Art. (d) Character of goods. The containers should be considered as the shipping unit. 1734. destruction. There is no evidence that the containers were carrier.-The act or omission of the shipper must be the proximate cause of the loss. destruction or deterioration of the goods. stored and discharged by hand labor and not by any mechanical device. Defendant stamped on the bill of lading the condition that the goods have been accepted for transportation subject to the conditions prescribed by the Insular Collector of Customs. provided that the signs of the damage or average giving rise to the claim may not be known from the exterior part of the packages. The provisions of the COGSA on limited liability are as much a part of a bill of lading as though physically in it and as much a part thereof as though placed therein by agreement of the parties. If the shipper or owner merely contributed to the loss. or its peso equivalent. the CC must exercise due diligence to forestall or lessen the loss for it to completely escape liability. during and after the act of the public enemy causing the loss. Nor is there a declaration of a higher value of the goods. 1742. (c) Act or omission of the shipper Art. destruction. a claim may be brought against the carrier on account of damage or average found therein on opening the packages. Common carriers are responsible for the loss. Hence. In these cases. the CC shall still be liable for damages although the damages shall be equitably reduced. If the shipper merely contributed to the loss.etc. said claim shall only be admitted at the time of the receipt of the packages. or other natural disaster in order that the common carrier may be exempted from liability for the loss. petitioner carrier's liability should not exceed $500 per package. or deterioration of the goods. J. or deterioration of the goods. (1) the act of the public enemy must have been the proximate and only cause. Under 1739. Upon delivery." The liability was computed as: 128 cartons (shipping unit) x $500 = $64.-This defense is not absolute. the natural disaster must have been the proximate and only cause of the loss. destruction or deterioration of the goods. The tiles were delivered by defendant to the consignee of the plaintiff at Iloilo. it was found that some of the tiles had been damaged. during and after the occurrence of flood.) Claims for damages must be made at the time the goods are delivered unless the indications of the damage cannot be ascertained from the exterior of the package. 1739. destruction. storm. Within the twenty four hours following the receipt of the merchandise. no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. under 1742. However. at the time of the payment of the value of the goods lost. vs Ynchausti. the latter shall be liable in damages. in order for the CC to be exempted from liability. whether international or civil. unless the same is due to any of the following causes only: xxx (2) Act of the public enemy in war. destruction. Art. in which case such written claims must be made w/in 24 hours from delivery Rule: As long as the damage to the goods was due purely to the inherent nature or defect of the goods or of the containers thereof. but in no case "more than the amount of damage actually sustained. Common carriers are responsible for the loss. or after the transportation charges have been paid.000. which.TRANSPORTATION AND MARITIME LAW provision limiting the carrier's liability in the absence of a declaration of a higher value of the goods by the shipper in the bill of lading. (b) Act of public enemy Art. destruction. 1734. Even if the loss. or the faulty nature of the packing or of the containers.

must be deemed to have assented to said terms and conditions. The order was part of the pressure by the mayor to shakedown Tumambing for P 5. 1734. The carrier. by the carrier to the consignee or to the person who has the right to receive them. 362. The TC and CA held Ganzon liable. Art. Bataan to the port of Manila on board the lighter LCT Batman. which they distributed among themselves. that some bags were with holes and plenty of rice were spilled inside the hull of the vessel. 161 SCRA 646 F: Gelacio Tumambing contracted the services of Ganzon to haul 305 tons of scrap iron from Mariveles. Ganzon vs CA. albeit still unloaded. or deterioration of the goods. the CC is not responsible for the loss. 1743. When half of the scrap iron was already loaded. in order to free itself from liability. Under Art. the tiles being discharged by handlabor and not by mechanical device. The LC absolved NARIC but ordered Southern Lines to pay. occurred on account of the carrier's negligence or because the carrier did not take the precaution adopted by careful persons.-. destruction. and that the boat personnel collected 26 sacks of rice. Therefore. occurred on account of the defendant's negligence or because the latter did not take precaution usually adopted by careful persons. However. Ganzon failed to show that the loss was due to any causes under Art. and that having shipped the tiles under said bill. Each bill of lading is a contract and the parties thereto are bound by its terms. the common carrier is not responsible. This is an action for refund of the amount paid in excess of delivery and is not for damages. to hold the defendant liable. he admitted that he received the scraps of iron which Tumambing delivered to him. authority Issue : WON the terms and conditions of the bill of lading were binding upon the plaintiff. The carrier raised the defense that the loss was due to an order or act of competent public authority. the intervention of the municipal officials was not of a character that would render (e) Order of competent PAGE 25 . Southern Lines' contention is untenable. it was noted that 41 sacks were missing. The carrier's extraordinary responsibility for the loss. 4 Agbayani: Order or act of competent authority. the petitioner itself frankly admitted that the strings tying the bags of rice were broken. actual or constructive. If through order of public authority the goods are seized or destroyed. but it accepts the goods notwithstanding such condition. An argument resulted in the shooting of Tumambing. the scraps were unconditionally placed in the possession and control of the common carrier and upon their receipt by the carrier for transportation. YES. destruction. The acting mayor took the rest to the compound of NASSCO and took custody of the scrap iron. Held: Ganzon contended that the scrap iron had not been unconditionally placed under his custody and control to make him liable. it is not relieved of liability for loss or injury resulting therefrom. was only obliged to prove that the damages suffered by the tile were by virtue of the nature or defect of the articles. 1736. Common carriers are responsible for the loss. The defendant. however. After the city paid for the rice. the govt. 4 SCRA 256 F: The city of Iloilo requisitioned for rice from NARIC in Manila. failed to show that the acting mayor had the power to issue the disputed order or that it was lawful or issued under legal process of authority. for if the fact of improper packing is known to the carrier or its servants or apparent upon ordinary observation.TRANSPORTATION AND MARITIME LAW was no negligence on its part. Issue: WON petitioner is liable for the loss or shortage. not having proved negligence on the part of the defendant. Wright belonging to Southern Lines. 366 does not apply. the contract of carriage was deemed perfected. by virtue of their nature. The city filed a complaint against NARIC and Southern Lines to recover the amount. to free itself from liability. unless the same is due to any of the following causes only: xxx (5) Order or act of competent public authority. The loading of the scrap iron was resumed but the acting mayor arrived and ordered Captain Niza to dump the scrap iron. Where the officer acts without legal process. The defendant proved. was obliged to prove that the damage to the goods by virtue of their nature. the CC will be held liable. the 24 hour rule under Art. Tumambing filed an action for damages against Ganzon based on culpa contractual. NARIC shipped from Manila to Iloilo 1726 sacks of rice on board the SS Gen. YES. the mayor of Mariveles arrived and demanded P 5. We cannot sustain the theory of caso fortuito.000 from Tumambing. but from the actual contract which the parties made. Southern Lines vs CA. of the goods if the public authority had power to issue the order. The binding effect of the conditions stamped on the bill of lading did not proceed from the Collector of Customs. This shows that the shortage resulted from the negligence of the petitioner. By the said act of delivery. etc. 1734.Under 1743.000. In any case. Ratio: Under Art. Art. Pursuant to Art. provided said public authority had power to issue the order. The fact that part of the shipment had not been loaded on board the lighter did not impair the said contract of transportation as the goods remained in the custody and control of the carrier. or deterioration of the goods commenced. is not entitled to recover damages. the plaintiff in order to hold the carrier liable.and the plaintiff did not attempt to dispute that the tiles were of a brittle and fragile nature and that they were delivered to the defendant without any packing or protective covering. was obliged to prove that the damage to the tiles. The plaintiff. was only obliged to prove that the damage suffered by the goods were by virtue of defects of the articles. with the terms and conditions of carriage stamped thereon. 361 of the Code of Commerce. The CA affirmed. The plaintiff. The order did not constitute valid authority for Ganzon to carry out. Ratio: The defendant placed said stamp upon the bill of lading before the plaintiff shipped the tiles. such extra-ordinary responsibility would cease only upon the delivery. Petitioner claims exemption based on the fact that the sacks were in bad condition and that rice was improperly packed causing a lot of spillage of the rice while it was being loaded. the carrier. Furthermore.

1738. 4 Agbayani: When carrier's responsibility begins. Art. Dissenting: Through the order or act of competent public authority. When carrier's responsibility terminates.-. the extra-ordinary responsibility of the CC does not cease notwithstanding the fact that the goods being transported are stored in the warehouse of the CC at the place of destination. or to the person who has a right to receive them. to unload forthwith and take away the cargo from the vehicles. demurrage. of PAGE 26 . paid Macleod and filed to collect from CC. Art. 1738. The captain has no control over the situation just as Tumambing had no control over the situation. and the carrier to the full payment of its freight upon completion of the voyage.Under Art. This is exercised when the buyer is or becomes insolvent. by the carrier to the consignee.-Under 1738. The petitioner was not duty bound to obey the illegal order to dump into the sea the scrap iron.-Under 1738.) Responsibility of carrier when right exercised. There is absence of sufficient proof that the issuance of the order was attended with such force or intimidation as to completely overpower the will of the carrier's EEs. that the sinking was due to a fortuitous event. due in turn to the failure of the former. unless the shipper or owner has made use of the right of stoppage in transitu. Held: There was a complete contract of carriage the consummation of which has already begun when the shipper delivered the cargo to the carrier and the latter took possession of the same by placing it on a lighter manned by its EEs. 1737. and not yet actually delivered to the latter. The common carrier's duty to observe extra-ordinary diligence in the vigilance over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit. Extra-ordinary responsibility ceases only after the consignee has been advised of the arrival of the goods and has had reasonable opportunity to remove them or otherwise dispose of them. while they are in the course of transit from him to the purchaser. upon receipt of notice of the arrival of the goods at the place of destination. SCRA 213 12 Duration of Extraordinary carrier. Otherwise. Liability as a warehouseman (ordinary diligence) arises only when the consignee has been advised of the arrival of the goods and has had reasonable opportunity to remove them or otherwise dispose of them F: Macleod and Co. the performance of the contract was rendered impossible. The extra-ordinary liability of the common carrier 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 been advised of the arrival of the goods and has reasonable opportunity thereafter to remove them or otherwise dispose of them. that there was no bill of lading issued thereby resulting to the nonexistence of a contract of carriage. the extra-ordinary responsibility of the CC is terminated at the time the goods are delivered to the consignee or the person who has a right to receive them (actual or constructive delivery).TRANSPORTATION AND MARITIME LAW impossible the fulfillment by the carrier of its obligation. the extraordinary responsibility of the CC ceases. of North America. has no personality to sue. 3. Responsibility Art. or receipt by the carrier or an authorized agent. under which Macleod became entitled to the privilege secured to him by law for its safe transportation and delivery. One of the lighters sunk. The receipt of the goods by the carrier has been said to lie at the foundation of the contract to carry and deliver. the extra-ordinary responsibility of the CC will not commence. 1736. The insurance co. The CC holds the goods in the capacity of an ordinary bailee or warehouseman upon the theory that the exercise of the right of stoppage in transitu terminates the contract of carriage (ordinary diligence is required) Effect of storage in warehouse of carrier.Under 1737. the temporary unloading or storage of the goods during the time that they are being transported does not interrupt the extra-ordinary responsibility of the CC Exception: Where the shipper or owner exercises its right of stoppage in transitu (the act by which the unpaid vendor of goods stops their progress and resumes possession of them. CC denied liability on the grounds that the hemp was loaded on a barge owned by the CC free of charge. and received by the carrier for transportation until the same are delivered. contracted the services of Cia Maritima for the shipment of bales of hemp from Davao to Manila.-The shipper is bound to observe all diligence in obtaining delivery of the goods.-. which is part of the contract. This is a charge for demurrage (addtl. the extra-o responsibility of the CC begins from the time the goods are delivered to the carrier. actually or constructively.-The extra-ordinary responsibility of the CC ceases when the goods being transported are temporarily unloaded or stored in transit be reason of the exercise of the right of stoppage in transitu by the unpaid seller. Constructive delivery: Notice by the CC that the cargo had already arrived. and if no goods are received there can be no such contract. The bales were loaded into CC's lighters. The delivery to the CC must place the goods to be transported unconditionally in the possession of the CC and the CC must receive them. placing them at the disposal of the shipper or consignee releases CC from extra-ordinary responsibility. The barges or lighters were merely employed as the first step of the voyage.The shipper is liable for lost earnings occasioned by the unnecessary delay in the use of the vehicles belonging to the Cia Maritima vs Insurance Co. and that the insurance co. without prejudice to the provisions of Art. Liability of shipper for delay in obtaining delivery of goods. Melencio-Herrera. 1738. service provided by CC) Effect of storing in transit. The liability and responsibility of the carrier under a contract for the carriage of goods commence on their actual delivery to. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of. From such moment the consignee or shipper should exercise over the cargo the ordinary control pertinent to ownership (should unload cargo from the CC) Shipper bound to observe all diligence in obtaining delivery of goods. Once the goods are delivered.-.

TRANSPORTATION AND MARITIME LAW
the goods. The test as to whether the relation of shipper and carrier had been established is: Had the control and possession of the goods been completely surrendered by the shipper to the CC . Whenever the control and possession of goods passes to the carrier and nothing remains to be done by the shipper, then it can be said with certainty that the relation of shipper and carrier has been established. The bill of lading is not indispensable to a contract of carriage. It is merely documentary proof of the agreement of the parties. There was no force majeure. The reason for the damage or the loss was lack of adequate protections and measures taken by the carrier to prevent the loss. Lu Do vs Binamira, 101 Phil 120 F: Delta Co. of NY shipped six cases of films and photographic supplies consigned to Binamira. The shipped arrived in Cebu and discharged her cargo, placing it in the possession and custody of the arrastre operator appointed by the Bureau of Customs. The cargo was checked both by the stevedoring co. as well as by the arrastre operator and was found in good order. In the contract of carriage, however, it was stipulated that the carrier is no longer liable for the cargo upon its delivery to the hands of the custom authorities. The cargo was delivered to Binamira and some goods were missing. Held: The general rule is that CC's responsibility to observe extra-ordinary diligence lasts from the time the goods are placed in the possession of the carrier until they are delivered to the consignee. BUT this rule applies only when the loss, destruction and deterioration of the goods takes place while the goods are in the possession of the carrier and not after it has lost control of them. While the goods are in its possession, it is but fair that it exercise extra-ordinary diligence in protecting them from damage and if loss occurs, the law presumes that it was due to its fault or negligence. While delivery to the customs authorities is not delivery to the consignee, the parties may however, agree to limit the liability of the carrier considering that the goods have still to go through the inspection of the customs authorities before they are actually turned over to the consignee. This stipulation is not contrary to morals or public policy. This is a situation where the CC loses control of the goods because of custom regulations and it is unfair that it be made responsible for any loss or damage during such interregnum. APL vs Klepper, 110 Phil 243 F: Klepper shipped one lift van containing personal and household effects from Yokohama to Manila. While the lift van was being unloaded by crane, it fell on the pier damaging its contents. The TC found for Klepper. Held: APL does not question the finding that the damage was due its negligence but contends that its liability cannot exceed $500 based on the bill of lading and Sec 4(5) of the COGSA. Regardless of its negligence, the carrier's liability would attach because being a CC, its responsibility is extra-ordinary and lasts from the time the goods are placed in its possession until they are delivered, actually or constructively, to the consignee or to the person who has a right to receive them. The carrier should only pay $ 500; the shipper who accepted the bill of lading is bound by its terms. COGSA is merely suppletory to the provisions of the NCC which govern the contract.

4. Agreement Limiting Liability (a) As to diligence required Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss or destruction, or deterioration of the goods to a degree less than extra-ordinary diligence shall be valid, provided it be: (1) In writing, signed by the shipper or owner; (2) Supported by a valuable consideration other than the service rendered by the CC; and (3) Reasonable, just and not contrary to public policy. Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy: (1) That the goods are transported at the risk of the owner or shipper; (2) That the common carrier will not be liable for any loss, destruction or deterioration of the goods; (3) That the common carrier need not observe any diligence in the custody of the goods; (4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary prudence in the vigilance over the movable transported; (5) That the common carrier shall not be responsible for the acts or omissions of his or its employees; (6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished; (7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage. Art. 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration of the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in accordance with public policy. (b) As to amount liability Art. 1749. A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon. Ysmael vs Barreto, 51 Phil 90

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F: Plaintiff sought to recover from defendant the alleged value of 4 cases of merchandise which it delivered to a vessel of defendant at the port of Manila to be shipped to Surigao, but which were never delivered to consignee. Defendant relied on clause 7 of the bill of lading where it provided that actions not brought within 60 days from the time the cause of action accrued shall be barred, and on clause 12 which provided that the defendant is not liable for any package in excess of P 300 unless the value and contents of such package are correctly stated in the bill of lading at the time of the shipment. Plaintiffs complaint was filed a little less than 6 months after the shipment was made. Held: The evidence shows that 164 cases were shipped valued at P 2,500 a case. The limit of defendant's liability for each case for loss or damage from any cause or for any reason, would put it in the power of the defendant to take the whole cargo of 164 cases at a value of P 300/case, or less than 1/8 of its actual value. If that rule should be sustained, no silk would ever be shipped. Such limitation of value is unconscionable and void as against public policy. The validity of stipulations limiting the carrier's liability is to be determined by their reasonableness and their conformity to the sound public policy. It cannot lawfully stipulate for exemption from liability unless such exemption is just and reasonable and unless the contract is freely and fairly made. No contractual limitation is reasonable which is subversive of public policy. A CC cannot limit its liability for injury or loss where such is caused by its own negligence, unskillfulness or carelessness of its EEs. The rule rests on public policy. The shipper and CC are not on equal terms; the shipper is entirely at the mercy of the CC unless protected by the law. Such contracts are wanting in the element of voluntary assent. The action was brought within reasonable time considering the distance between Surigao and Manila and the fact that plaintiff had to make a full investigation to determine liability. Stipulations limiting the time for bringing suit must be reasonable, otherwise they can be declared void. Heacock vs Macondray, 42 Phil 205 F: Plaintiff shipped Edmonton clocks from NY to Manila on board defendant's vessel. It was agreed in the bill of lading that the value of the goods receipted do not exceed $500 per freight on or in proportion for any part of a ton, unless the value be expressly stated in the bill and freight paid. It was also agreed that in the event of claims for shortage or damage the carrier shall not be liable for more than the net invoice price plus freight and insurance less charges, and any loss or damage for which the carrier may be liable shall be adjusted pro rata on said basis. The clocks were not delivered despite demands. Plaintiff claimed P420 as the MV of the clocks, while defendant claimed P76.36 as the proportionate freight ton value. Held: Three kinds of stipulations have often been made in a bill of lading. First, one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. Second, one providing for an unqualified limitation of such liability to an agree valuation. Third, one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. The first and second stipulations are invalid as contrary to public policy. The third is valid and enforceable. A stipulation in the bill of lading limiting the liability of the CC to a specified amount unless the shipper declares a higher value and pays a higher freight is valid and enforceable. If a CC gives to a shipper the choice of 2 rates, the lower of them conditioned upon his agreeing to a stipulated valuation of his property in case of loss, even by the carrier's negligence, if the shipper makes the choice understandingly and freely, and names his valuation, he cannot thereafter recover more than the value which he thus places upon his property.

Shewaram vs PAL, 17 SCRA 606 F: Plaintiff bought a plane ticket from Zamboanga to Manila. When he arrived in Manila, his suitcase was tampered with and his camera and radio were lost. PAL contended that plaintiff was bound by the conditions printed at the back of his ticket which provided that the liability of PAL for any loss is limited to the value of the thing unless the passenger declares in advance a higher valuation and pays an additional charge, and that the value is conclusively deemed not to exceed P 100/ticket. Held : Two requisites must be fulfilled in order that the liability of PAL be limited according to the stipulations behind the ticket stub : (1) the contract is just and reasonable under the circumstances; and (2) it has been fairly and freely agreed upon. (Art. 1750) The fact that the conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that plaintiff was aware of those conditions such that he had "fairly and freely agreed" to those conditions. PAL has admitted that passengers do not sign the ticket. Also the carrier cannot limit his liability for injury or loss of goods shipped when such injury or loss was caused by its own negligence. (Arts. 1734, 1735) Ong Yiu vs CA, 91 SCRA 223 F: Atty. Ong Yiu was a passenger on a PAL CebuButuan flight to attend court hearings in Butuan. His suitcase was accidentally sent to Manila. PAL-Manila sent the suitcase to Butuan but the lock had been opened and a folder containing court documents was missing. Plaintiff refused to accept the luggage. PALCebu delivered the luggage to Ong Yiu with the promise to investigate the matter. Plaintiff sued and was awarded moral and exemplary damages. CA reversed holding that PAL was guilty of simple negligence and denied moral and exemplary damages but ordered PAL to pay P100, the baggage liability assumed by it under the condition of carriage printed on the back of the ticket. Held: PAL incurred delay in the delivery of petitioner's luggage. However, there was no bad faith. The liability of PAL was limited to the stipulations printed on the back of the ticket. While the passenger had not signed the plane ticket, he is nevertheless bound by the provision thereof; such provisions have been held to be part of the contract of carriage and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation . It is what is known as a contract of adhesion wherein one party imposes a ready made form of contract on the other; it is not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. A contract limiting liability upon an agree valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. Considering that petitioner had failed to declare a higher value for his baggage, he cannot be

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permitted a recovery in excess of P 100.00. Besides, passengers are advised not to place valuable items inside their baggage. Also, there is nothing in the evidence to show the actual value of the goods allegedly lost by petitioner. PAN AM vs IAC, 164 SCRA 268 F: This is a petition filed by Pan Am to limit its liability for lost baggage containing promotional and advertising materials for films to be exhibited in Guam and the US, clutch bags, barong tagalogs and personal belongings of Rene Pangan to the amount specified in the airline ticket absent a declaration of a higher valuation and payment of additional charges. Pan Am contends that its liability for lost baggage is limited to $600 ($20 x 30 kilos) as the latter did not declare a higher value for his baggage. Such stipulation is printed at the back of the ticket. Held : Pan Am cited Ong Yiu vs CA. Such case is squarely applicable in this case. The ruling in Shewaram vs PAL is inapplicable since it was premised on the fact that the conditions printed at the back of the ticket were so small and hard to read. Liability is limited to $600 as stipulated at the back of the ticket. The SC reversed the CA ruling awarding respondent damages for lost profits. The rule laid down in Mendoza vs PAL provides that before damages can be awarded for loss of profits on account of delay or failure of delivery, it must have appeared that CC had notice at the time of delivery to him of the particular circumstances attending the shipment, and which probably would lead to such special loss if he defaulted. In the absence of a showing that Pan Am's attention was called to the special circumstances requiring prompt delivery of the luggage, it cannot be held liable for the cancellation of respondent's contracts as it could not have foreseen such an eventuality when it accepted the luggage for transit. Pan Am vs Rapadas, 209 SCRA 67 F: Jose Rapadas was en route from Guam to Manila. While standing in line to board the flight, he was ordered by Pan Am's handcarry control agent to check in his Samsonite attache case. He protested on the ground that other passengers were permitted to handcarry bulkier baggages. He tried to check-in without having to register his attache case. He was however forced to register his baggage. He gave his attache case to his brother who checked it in for him without declaring its contents or the value of its contents. Upon arriving in Manila, he was given all his checked-in baggages except the attache case. Since he felt ill, he sent his son to request for the search of the missing luggage. He sent letters of demand to Pan Am. Pan Am offered to settle the claim for $160, representing the CC's alleged limit of liability for loss or damage to a passenger's personal property. Rapadas filed this action for damages. He alleged that Pan Am discriminated or singled him out in ordering that his luggage be checked in; that Pan Am neglected its duty in the handling and safekeeping of his attache case from the point of embarkation in Guam to his destination in Manila; that the value of the lost attache case and its contents is $42,403.90. According to him, the loss resulted in his failure to pay certain obligations, failure to remit money sent through him to relatives, inability to enjoy the fruits of his retirement and vacation pay and inability to return to Tonga Construction Co. to comply with then existing contracts. During the trial, he showed proof of the contents of his attache case. Pan Am contended that the claim was subject to the Notice of Baggage Liability Limitations attached to the ticket. Such notice was also conspicuously posted in its offices. It alleged that its liability is limited to $160 because Rapadas did not declare a higher value and did not pay the corresponding additional charges. The lower court ruled in favor of Rapadas. It however did not find Pan Am guilty of discriminatory acts or bad faith. CA affirmed the decision. Issue: WON a passenger is bound by the terms of a passenger ticket declaring that the limitations of liability set forth in the Warsaw Convention as amended by the Hague Protocol shall apply in case of loss, damage or destruction to a registered luggage of a passenger. YES. Pan Am was ordered to pay $400 and P 10,000 as attorney's fees and costs of suit. Held: There is no dispute that there was a notice appearing on page 2 of the ticket stating that the Warsaw Convention governs in case of death or injury to a passenger or of loss, damage or destruction to a passenger's luggage. Such notice should be sufficient notice showing the applicability of the Warsaw limitations. The passenger, upon contracting with the airline and receiving the plane ticket, was expected to be vigilant insofar as his luggage is concerned. If the passenger fails to adduce evidence to overcome the stipulations, he cannot avoid the application of the liability limitations. The Warsaw Convention, as amended, specifically provides that it is applicable to international carriage which it defines as "any carriage in which, according to the agreement between the parties, the place of departure and the place of destination xxx are situated either within the territories of two High Contracting Parties or within the territory of a single High Contracting Party if there is an agreed stopping place within the territory of another State xxx." Nowhere in the Warsaw Convention is such detailed notice of baggage liability limitations required. It is however a common, safe and practical custom for air carriers to indicate beforehand the precise sums equivalent to those fixed by Art. 22(2) of the Convention. The facts show that Rapadas actually refused to register his attache case. In attempting to avoid registering the luggage, he manifested a disregard of airline rules on allowable handcarried baggages. Prudence dictates that cash and jewelry should be removed from checked-in luggage and placed in one's pockets or handcarried. The alleged lack of enough time for him to make a declaration of a higher value and to pay the corresponding supplementary charges cannot justify his failure to comply with the requirement that will exclude the application of limited liability. Had he readily complied with airline regulations from the start, this situation would not have arisen. While contracts of adhesion are not entirely prohibited, neither is blind reliance on them encouraged. In the face of facts showing they should be ignored because of their basically one- sided nature, the Court does not hesitate to rule out blind adherence to their terms. The SC is not saying that passengers are always bound to the stipulated amounts printed on a ticket, found in a contract of adhesion, or printed elsewhere but referred to in handouts or forms. The Court simply recognizes that the reasons behind stipulations on liability limitations arise from the difficulty, if not impossibility, of establishing with a clear preponderance of evidence the contents of a lost suitcase. Unless the contents are declared, it will always be the word of a passenger against that of the airline. If the loss of life or property is caused by the gross negligence or arbitrary acts of the airline or the contents of the lost luggage are

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the SC held that the Civil Code provisions on CC should not be applied where the CC is not acting as such but as a private carrier. and in consonance with public policy. 3.An exemption in general words not expressly relating to negligence. the CC cannot avail of the contract limiting his liability in these cases : (1) where the CC delays the transportation of the goods. the shipper or owner and the CC may stipulate to limit the liability of the CC for the loss. the stipulation must be supported by valuable consideration other than the service rendered by the CC. if it is reasonable and just under the circumstances. 4 Agbayani: Kinds of stipulation limiting liability. must be construed as limiting the liability of the CC as assurer. Otherwise. 5. unless the shipper or owner declares a greater value. and not as relieving him from the duty of exercising reasonable skill and care Effect of lack of competitor to common carrier. destruction or deterioration. Paul Insurance vs Macondray. stipulation limiting the liability of the CC to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight -.VALID and ENFORCEABLE When stipulation limiting liability valid. Art.-. the contract limiting the common carrier's liability cannot be availed of in case of the loss. 2. The insurer who pays the insured on his claim for damage is merely subrogated to the rights of the insured. the stipulation must be reasonable. 1748 . unjust and contrary to public policy. Art. (c) Factors affecting agreement Art. 1748.-.Under 1752. Art.VOID 2.-. even though the words are wide enough to include loss by negligence or default of CC's servants. the Court is constrained to rule that we have to enforce the contract as it is the only reasonable basis to arrive at a just award. the common carrier is disputably presumed to have been negligent in case of their loss. The obligation to pay the damage begins from the date it fails to deliver the shipment in good condition to the consignee (on the basis of the rate of exchange on that date). The effect of the shipper's consent obtained by means of refusal on the part of the carrier to carry the goods is to make the agreement limiting the CC's liability voidable at the instance of the shipper Principles : [St.-The following stipulations are often made in a bill of lading bill of lading: 1. 3. An agreement limiting the common carrier's liability may be annulled by the shipper or owner if the CC refused to carry the goods unless the former agree to such stipulation. 1752. stipulation exempting the CC from any and all liability for loss or damage occasioned by its own negligence . Art. just and not contrary to public policy. 70 SCRA 122] 1. A stipulation in the bill of lading limiting the CC's liability to the value of the goods appearing in the bill. provided that the requirements under Article 1744 are complied with.-. just. stipulation providing for an unqualified limitation of such liability to an agreed stipulation VOID 3. 1750 . just and in consonance with public policy. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods. PAGE 30 . The fact that the common carrier has no competitor along the line or route or a part thereof. therefore. delays the transportation of the goods or changes the stipulated or usual route. an agreement limiting the CC's liability may be annulled by the shipper or owner if the CC refused to carry the goods unless the former agreed to such stipulation. 2. However.Under 1744. 1745 provides for 7 stipulations which shall be considered unreasonable. 1749. destruction or deterioration of the goods.. Examples of valid stipulations: 1. the parties cannot reduce the diligence to less than that of a good father of a family. the stipulation must be in writing and signed by both parties. 1751. Art. to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable. 1746. destruction. such policy has no force where the public at large is not involved] Construction of stipulations limiting common carrier's liability.a contract fixing the sum that may be recovered by the owner or shipper for the loss. the Court will not hesitate to disregard the fine print in a contract of adhesion. the presumption continues even when there is an agreement limiting the liability of the CC in the vigilance of the goods. This presumption is disputable or rebuttable by evidence that the CC exercised extra-ordinary diligence. destruction or deterioration of goods to a degree less than extraordinary diligence : 1.TRANSPORTATION AND MARITIME LAW proved by satisfactory evidence other than the selfserving declarations of one party. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid. Heacock vs Macondray . 1747. or deterioration of the goods. Applicable Law in foreign trade The parties may stipulate that the diligence to be exercised by the CC be less than extra-ordinary diligence. without just cause. (2) where the CC changes the stipulated or usual route [in both cases.an agreement limiting the CC's liability for delay on account of strikes or riots 2. This applies only when the CC is acting as such but not when it acts as a private carrier [in Home Insurance vs American Steamship Co. and has been fairly and freely agreed upon Under 1746. If the common carrier. the lack of competition of the CC shall be considered in determining WON a stipulation limiting CC's liability is reasonable. is valid and binding. said insurer cannot collect from the CC more than what the insured can collect from the CC. Effect of delay in transportation. etc.Under 1747.a stipulation that the CC's liability is limited to the value of the goods appearing in bill of lading unless the shipper or owner declares a greater value 3. the delay or change of route must be without just cause] Presumption as to negligence in case of limited liability.-Under 1751.

Liability for baggage not in custody of passenger. and 7. 1998 to 2001 is suppressed or diminished shall be void. 4 Agbayani: The Civil Code governs the liability of the CC in case of loss. Liability for baggage in custody of passenger. using the utmost diligence of very cautious persons. if it accepted them for transportation C. OR if the loss arises from the character of the baggage.1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or in that of his employees. 5. 2003. 1753. a CC is responsible as a depositary for the loss of or injury to the baggage in the personal custody of passengers.-Under 2000. 2001. Common carriers. servants or visitors. Under 2001. of the effects brought by the guests and that. The responsibility referred to in the preceding article shall include the loss of. thieves. damage or deterioration. The moment the effects of a passenger are unconditionally placed in the possession of and received by a carrier for conveyance. Stipulations limiting liability. Common Carrier of Passengers 1. with a due regard for all circumstances. and (2) baggage not in such custody but in that of the CC. caused by the CC's servants or EEs but not those caused by force majeure. The deposit of effects made by travelers in hotels and inns shall also be regarded as necessary. Art. 2000. the baggage of passengers in their personal custody or in that of their EEs while being transported shall be regarded as necessary deposits. servants or visitors. or to their employees. Any stipulation diminishing the responsibility required under 1998 to 2001 shall be void. his family. Nos. 1754 refers to Arts. Under 1998. Responsibility for acts of EEs. Classes of baggage of passengers. Nature and extent of responsibility Art. the provisions on carriage of goods shall apply (extra-ordinary diligence in the vigilance over the goods). of the baggage brought by their passengers. to be carried in the same manner as other goods being transported by him. according to the circumstances of each case. 6. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss.2003 concerning the responsibility of hotel keepers. The hotelkeeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. provided that (1) notice was given to them or to their EEs. are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. Art. 1735. they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. The provisions of Arts. in all matters not regulated by the Civil Code. 1998. unless it is done with the use of arms or through irresistible force. The keepers of hotels and inns shall be responsible for them as depositaries.This refers to baggage delivered to the custody of the CC and received by him.-Art. 2000. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide. The CC shall be responsible for such baggage as depositaries. the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel keepers shall be applicable. provided that notice was given to them. Under 1766. A CC is liable for the loss of baggage although not declared and the charges not paid. and 1745. Art. The act of a thief or robber.-.TRANSPORTATION AND MARITIME LAW Art. Art. the CC is not liable if the loss of the baggage in the personal custody of the passenger is due to the acts of the passengers. his family. The hotelkeeper is not liable for compensation if the loss is due to the acts of the guest. and that (2) the passengers take the precautions which said CCs advised relative to the care and vigilance of their baggage. 1733. 1998. Any stipulation between the hotelkeeper and the guest where the responsibility of the former as set forth in Arts. 2002. 6. or if the loss arises from the character of the things brought into the hotel. Under 2002. the act of a thief or robber. As to other baggage. unless it is done with the use of arms or through irresistible force. on the part of the latter. a CC cannot free himself from responsibility by posting notices to the effect that he is not liable for the baggage brought by the passengers. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734. or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as by strangers.The law makes a distinction between (1) baggage in the custody of the passengers or their EEs. The fact that travelers are constrained to rely on the vigilance of the keeper of the hotel or inn shall be considered in determining the degree of care required of him. PAGE 31 . the law immediately imposes on the CC extra-ordinary responsibility for the loss thereof which lasts until the actual or constructive delivery of the effects to the passenger as the person who has the right to receive them (presumption of negligence exists but may be rebutted by proof of exercise of extraordinary diligence or causes under 1734). Art. but not that which may proceed from any force majeure. 1754. Art. while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.-Under 2003. As the CC has custody of such baggage and are carried like any other goods. destruction or deterioration. Rules on Passenger Baggage Art. the rights and obligations of CC shall be governed by the Code of Commerce and by special laws which are suppletory to the provisions of the Civil Code. who has entered the hotel is not deemed force majeure. who has entered the CC's vehicle is not deemed force majeure.-. 1755. from the nature of their business and for reasons of public policy.

The liability of masters and employers for the negligent acts or omissions of their servants or agents. with due regard for all circumstances. It is not negligence per se for a traveler to alight from a slowly moving train. That duty. from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. it plunged into the sea and sank. being contractual. inevitable accident is defined as one that is not occasioned in any degree remotely or directly by want of such skill or care as the law holds for what man is bound to exercise . 101 Phil 1046 F: supra. This extraordinary diligence required of common carriers is calculated to protect the passengers from the tragic mishaps that frequently occur in connection with rapid modern transportation. A carrier is not liable for defects of ignition cables used on his plane. nor of the installation thereof. Co. Proof of the contract and of its nonperformance is sufficient prima facie to warrant recovery. prejudice. It is impt. 1762). 1755 shows clearly the high degree of care and extra-o diligence required of a CC with respect to its passengers. MRR failed to exercise due care in not providing for safe exit of its passengers. Cangco vs MRR. Strong vs Iloilo-Negros Air Express. this is a circumstance which militates against plaintiff's position. differing essentially. when such act or omissions cause damage which amount to the breach of a contract. which cables were purchased from a competent and reputable manufacturer in the absence of a showing that it knew those defects or that such kind of ignition cable is not ordinarily used on the airplane operated by it. the passenger is guilty of contributory negligence. By placing his left arm on the window.. Some passengers jumped out. It is negligence per se for passengers to protrude any part of his body and that no recovery can be had for an injury. The doctrine of res ipsa loquitor cannot be applied when there is no proof that according to the general experience of mankind. The bus driver maneuvered the bus safely to the mountainside.-. When the facts averred show a contractual undertaking by defendant for the benefit of plaintiff. Held : If the carrier's EE is confronted with a sudden emergency. Principles as to liability of CC: (1) The liability of a carrier is contractual and arises upon breach of its obligation.The duty to exercise the utmost diligence on the part of CCs is for the safety of passengers as well as for the members of the crew or the complement operating the carrier. This high standard of care is imperatively demanded by the preciousness of human life and by the consideration that every person must in every way be safeguarded against all injury. and it is alleged that plaintiff has failed or refused to perform the contract. This must be so for any omission. is not based upon a mere presumption of the master's negligence in their selection or control. Two of the girls who jumped were seriously injured and died. PAGE 32 .L. and that the obligation to respond for the damage which plaintiff has suffered arises. he is not held to the same degree of care he would otherwise be required in the absence of such emergency. The bus was open on one side. it is not necessary for plaintiff to specify in his pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the defendant. Passengers necessarily should take upon the usual and ordinary perils to airplane travel. injuries or even death to all aboard the plane. The plane's motors went dead and. Ratio: A CC is bound to carry the passengers safely as far as human care and foresight can provide. the accident was such that it does not usually occur in the ordinary course of events without the negligence on the part of those in control. The contract of defendant to transport plaintiff carried with it. or injury to. Held: The conduct of plaintiff in undertaking to alight while the train was yet slightly underway was not characterized by imprudence and that he was not guilty of contributory negligence. notwithstanding the efforts of its pilot. Carrier's duty of extraordinary diligence extends also to crew members. Held : In aviation. or of his servants or agents. passengers. It also failed to provide adequate lighting for its station. it being its duty to prove that it exercised extraordinary diligence (4) The carrier is not an insurer against all risks of travel Landingin vs Pantranco. to all the circumstances of each case (2) A carrier is obliged to carry its passenger with the utmost diligence of a very cautious person. to note that the foundation of the legal liability of the defendant is the contract of carriage. and its nonperformance could not be excused by proof that the fault was morally imputable to defendant's servants. and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract. The TC found that the crossjoint of the bus broke and the bus started to roll back. A carrier is not an insurer against all risks. Ammen Trans. Passenger aboard a bus who placed his left arm on the window lost his arm when the bus collided with a pick up. the duty to carry him in safety and to provide safe means of entering and leaving its trains. The passengers and the pilot were rescued. was direct and immediate. having due regard for all the circumstances (3) A carrier is presumed to have been at fault or to have acted negligently in case of death of. if at all. from that presumptive responsibility for the negligence of its servants.-Art. lapse or neglect thereof will certainly result to the damage. Its liability is direct and immediate (culpa contractual). by implication. EE riding on train who stepped on watermelons. there is breach if it fails to exert extraordinary diligence accdg. which can be rebutted by proof of the exercise of due care in the selection and supervision of EEs (culpa aquiliana). 40 OG 269 F: Plaintiff was a passenger aboard defendant's plane en route from Iloilo to Manila.TRANSPORTATION AND MARITIME LAW 4 Agbayani: Common carriers must exercise extraordinary diligence in carrying passengers. Isaac vs A. 33 SCRA 284 F: Plaintiffs are parents of 2 girls who were passengers on a Pantranco bus on an excursion trip from Dagupan to Baguio. using the utmost diligence of very cautious persons. Airplane companies are not required to exercise all the care. 38 Phil 768 Facts: supra. and although contributory negligence cannot relieve the carrier but can only reduce his liability (Art.

They alighted from the bus. the bus stated to run so that the father had to jump.-. 1733 and the utmost diligence of very cautious persons required in Art. Later. Aboitiz vs CA 179 SCRA 95 F: A farmer boarded a boat owned by Aboitiz at Mindoro bound for Manila. The liability of the CC rests upon negligence or his failure to exercise the utmost degree of diligence that the law requires. 102 Phil 181 F: The bus of Medina Trans left Cavite for Pasay with 18 passengers. fueled by petroleum. The relation of carrier and PAGE 33 . 52 OG 764 F: Landicho boarded a BTC bus. When the passenger dies or is injured. Thus the entire bus would naturally be taxed more heavily than it would be under the ordinary circumstances. the driver lost control and the truck fell into a creek. In this case. He was followed by his daughter. would be a good source of stipend for a family who would like to end it all by simply boarding. The rationale of CC's liability for manufacturing defects is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the eqpt. A fire started. 105 Phil 75 F: A mother and son boarded a passenger autotruck of the Phil. 17 SCRA 739 F: Husband and wife together with minor children boarded a La Mallorca bus. Around dawn. The failure of the driver and conductor to have cautioned or taken steps to warn rescuers not to bring a lighted torch too near the bus constitutes negligence on the part of the agents of the carrier.The relation of CC and passenger does not cease at the moment that the passenger alights from the CC's vehicle at a place selected by the CC at the point of destination. the court held that accidents caused by defects in the automobile are not caso fortuito. he claimed that he noticed one cage falling and he called the conductor's attention who did not respond. The driver stopped the bus but did not turn off the engine. Before he did so. What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances La Mallorca vs CA. Landicho vs BTC. The mother drowned. He tried to fix it himself resulting in his fall in which he suffered injuries. the son was injured. 1755. He started to run the bus even before the conductor gave him the signal. contended that when she was killed. Rabbit Bus Lines. the passenger has no remedy against him. It would be unreasonable to exact upon operators to determine beforehand whether a passenger is likely to fall dizzy or sleepy on the way. he went back to get his cargo but the crane hit him and he died. A passenger must see to it that he seats himself in a safe portion of the vehicle. Gas had leaked when the bus overturned. burning the bus and the 4 passengers. The bus was heavily laden. It is enough for the CC's EEs to see to it that the passenger places himself safely inside the vehicle. but continues until the passenger had reasonable time or a reasonable opportunity to leave the CC's premises. Held: Whether or not the relation between carrier and passenger does not cease at the moment the passenger alights from the carrier's premises is to be determined from the circumstances. The rationale is that the passenger has neither the choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. Pioneer Stevedoring took over control of the cargoes loaded at the vessel and placed its crane alongside the vessel. it should nevertheless be held answerable for the flaws of its equipment if such flaws were discoverable. While the father was still on the running board awaiting for the conductor to give his baggage.TRANSPORTATION AND MARITIME LAW Held : In Lasam vs Smith. and appliances in use by the carrier. The mere fact that the bus was inspected only recently and found to be in order would not exempt carrier from liability unless it is shown that the particular circumstances under which the bus would travel were also considered. The bus co. 2. Held: Aboitiz is still liable for his death under the contract of carriage. Some passengers were able to get out while four were trapped including Bataclan. Having no privity whatever with the manufacturer or vendor of the defective eqpt. its front wheels swerved to the right. she was no longer a passenger and the contract of carriage had terminated. 10 men came to help. the presumption is that the CC is at fault or acted negligently. the conductor helped him in placing his two baskets of chicken inside the running board. This is only rebutted by proof on the carrier's part that it observed extraordinary diligence required in Art. there was no utmost diligence. While entering a wooden bridge. One hour after he disembarked. leakage was possible aside from the fact that gas when spilled can be smelled from a distance. His daughter was run over and was killed. Held : The facts show that the cage was not about to fall. for that is the lookout of the passenger himself. one of them carrying a lighted torch. They should have known that with the position of the bus. Held : While the carrier is not an insurer of the safety of the passengers. the front tires burst and the vehicles began to zigzag until it fell into a canal and turned turtle. that it is operated carefully and that its mechanism is perfectly alright to prevent mishaps. After a distance. When the vessel arrived. Duration of responsibility 4 Agbayani: When relationship of carrier and passenger terminates. for then the co. and it would be traversing mountainous. the defect could have been detected with the exercise of utmost diligence by the CC. circuitous and ascending road. It is true that defendant being a CC is bound to transport its passengers from the point of origin to the place of destination. Held: The proximate cause of the death was the overturning of the vehicle which was followed by the negligence of the driver and the conductor who were on the road walking back and forth. Bataclan vs Medina. Plaintiff was probably dizzy or sleepy that he fell from the truck. It does not appear that the carrier gave due regard for all the circumstances with cross joints' inspection the day previous to the accident. The presence of passengers near the bus was not unreasonable and the duration of the responsibility still exists. Necesito vs Paras. paying the fare and intentionally falling off. but the duty does not encompass all the risks attendant to a passenger in transit. In this case. The father returned to the bus to get their baggage.

PAL becomes liable to the passenger. PAL was therefore remiss in its duty of extending utmost care to Zapatos while being stranded in Cotabato City. PAL is deemed equipped to deal with situations like the case at bar. social humiliation. He was given a free ticket to Iligan City which he received under protest. It alleged that there was simply no more seat for him on Flight 560 to Manila. the SC held that the contract to transport passengers is quite different from any contractual relation in that it invites people to avail of the comforts and advantages it offers. and that if made liable. 1755. the pilot received a message that the airport was closed due to heavy rains and inclement weather and that he should proceed to Cotabato City. The contract of air carriage is a peculiar one. there was no sufficient basis to conclude that PAL failed to inform him about his other options. PAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfort. Held: The passenger's complaint touched on PAL's indifference and inattention to his predicament and not on PAL's refusal to comply with his demand for priority over the other passengers. He claimed that he was exposed to the peril of Muslim rebels and that he suffered mental anguish. Fifteen minutes before landing in Ozamis. 1993 F: Pedro Zapatos was among 21 passengers on a PAL flight from Cebu to Ozamis. and that there was force majeure which was a valid justification for the pilot to bypass Ozamis City and proceed directly to Cotabato City. in the selection and supervision of his EEs xxx Consequently. besmirched reputation and wounded feeling. Sept. PAGE 34 . The RTC held in favor of plaintiff. G. Being imbued with public interest. The CA held : "While the failure of Zapatos to reach his destination xxx in accordance with the contract of carriage was due to the closure of the airport on account of rain and inclement weather xxx it becomes the duty of PAL to provide all means of comfort and convenience to its passengers when they would have to be left in a strange place in case of such by-passing. using the utmost diligence of very cautious persons. the law requires common carriers to carry the passengers safely as far as human care and foresight can provide." However the SC found that although PAL was remiss in its duty of extending utmost care to Zapatos while being stranded in Cotabato City. His personal belongings were never recovered. it has to be the sole and only cause. the issue is not WON the party seeking damages has adduced sufficient evidence to show the negligence of the CC but WON the carrier has presented the required quantum of proof to overcome the presumption that it has been at fault or that it acted negligently in the performance of its duty. However. However. using the utmost diligence of a very cautious person with due regard for all circumstances. such did not terminate PAL's contract with its passengers. If the cause of non-fulfillment of the contract is due to a fortuitous event. PAL cannot be liable in damages in the absence of fraud or bad faith. the basis for priority would be the check-in sequence at Cebu. He was left at the airport. This disputable presumption may only be overcome by superior evidence that he had observed extraordinary diligence prescribed in 1733.-. PAL informed the passengers of their options and that due to limited number of seats in the other flights. notwithstanding the fact that he had exercised all the diligence of a good father of a family. The diversion of the flight was due to a fortuitous event. an added burden is given to PAL which is over and beyond its duties under the contract of carriage. 9. 1756. 1756 Where death or injury results to the passenger because of the negligence of the CC's Es. A CC is bound to carry its passengers as far as human care and foresight can provide. The CA affirmed.R. the CC is liable. the cause of nonfulfillment is not solely and exclusively due to fortuitous event. He referred to PAL's apathy.CCs are presumed to have been at fault or to have acted negligently in case of death or injuries to passengers. PAL denied that it unjustifiably refused to accommodate Zapatos. 3. PAL neither provided him with transportation from the airport to the city proper nor food and accommodation for his stay in Cotabato City. with due regard for all the circumstances. he purchased a ticket to Iligan City. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers and what is reasonable time is to be determined from all circumstances and includes a reasonable time to see after his baggage and prepare for his departure. The test is the existence of a reasonable cause as will justify the presence of the passenger near the vessel. Hence. unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755. 4 Agbayani: Presumption of negligence. common carriers are presumed to have been at fault or to have acted negligently. He informed PAL that he would not use the free ticket because he was filing a case against PAL. He tried to stop the departure but his plea fell on deaf ears. The next day. 82619. Once created the relationship will not ordinarily terminate until the passenger has safely alighted from the carrier's conveyance or had reasonable opportunity to leave the carrier's premises . in an action for damages. Presumption of negligence Art. It argued that granting there was negligence. PAL vs CA. but due to something that PAL could have prevented.TRANSPORTATION AND MARITIME LAW passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock. Being in the business of air carriage. PAL contended that it did not unjustifiably deny his demand for priority over confirmed passengers which they could not satisfy in view of the limited seats. Since part of the failure to comply with the obligation to deliver its passengers safely to their destination lay in PAL's failure to provide comfort and convenience to its stranded passengers using extraordinary diligence. his personal belongings including a camera from Japan were still on board the flight to Manila. PAL also asserted that it should not be charged with the task of looking after the passengers' comfort and convenience because the diversion of the flight was due to a fortuitous event. In Air France vs Carrascoso. The CC-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if the person remains in the premises to claim his baggage. In Cotabato. convenience and safety of the stranded passengers until they have reached their final destination. Zapatos chose to return to Cebu but was not accommodated because he checked in as passenger no. In case of death of or injuries to passengers. The relation of carrier and passenger continues until the latter has been landed at the port of destination and has left the CC's premises. mental torture. The flight was CebuOzamis-Cotabato.

he must be aware. The obligor must be free of a concurrent or contributory fault or negligence. The SC upheld the findings of the CA-.While the plaintiff-passenger does not need to prove the negligence of the CC.The principle of last clear chance applies only in a suit between the owners and drivers of two colliding vehicles. the CC is presumed to have acted negligently unless it can prove that it had observed extraordinary diligence. with due regard for all the circumstances. the CC assumes the express obligation to observe extraordinary diligence in transporting the passenger This is an exception to general rule that negligence must be proved.The court need not make an express finding of fault or negligence on the part of the CC in order to hold it responsible to pay the damages sought by the passenger. In order to constitute caso fortuito that would exempt a person from responsibility. 2. It is therefore clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing CCs. The CC must still prove that it was not negligent in causing the injuries resulting from such accident. the conductor panicked and blew his whistle after people had already fallen off the bus. the victims fell from the bus door when it was opened or gave way while the bus was still running. it must be shown that the CC had observed the required extraordinary diligence or that the accident was caused by fortuituos event. that the CC was not a party to the incident as it was an act of a third party who is not in any way connected with the CC and of which they have no control and supervision.-.assailant ran away from the bus but was killed by the police. The CA reversed and ordered the CC. and (4) The obligor must be free from any participation in the aggravation of the injury resulting to the creditor. the bus picked up a passenger. it would be iniquitous to exempt the driver and his ER on the ground that the other driver was also negligent Court need not make express finding of carrier's fault or negligence. 71 SCRA 523] Carrier not precluded from proving negligence of other carrier involved in collision. the CC must give due regard for all circumstances in connection with the transport of passengers How presumption of negligence overcome. 3.-. he may not preclude the CC from proving the legal defense of negligence of the other vehicle involved in the collision (the CC may file a third-party complaint against the other vehicle for reimbursement) "Last clear chance" rule not applicable to contracts of carriage. allowance should be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety (that the passenger will not take with him anything dangerous to his co-passengers. Butuan.-.) For the carrier to be liable. Force Majeure Bachelor Express vs CA 188 SCRA 217 F: Bus No. Fairness demands that in measuring the CC's duty towards its passengers. it is necessary that : 1. The occurrence must render it impossible for the obligor to fulfill his obligation in a normal manner. the fault of the driver. Art. it does not apply where a passenger demands responsibility from the CC to enforce its contractual obligation. The TC dismissed the complaint. Two passengers jumped out (finding of the TC which was reversed by the CA) of the bus and were found dead as a result of head injuries. the owner and the driver.TRANSPORTATION AND MARITIME LAW In the exercise of extraordinary diligence. the bus was not properly equipped with doors in accordance with law. under 1756. The TC and the CA had conflicting findings of fact. The parents of the dead passengers filed a complaint for a sum of money against the CC. The CC argued that the incident's proximate cause was the act of the passenger who ran amuck and which triggered off the commotion and panic.To overcome such presumption. [Estrada vs Consolacion. (3) The occurrence must be so as to render it impossible for the debtor to fulfill his obligation in a normal manner. 1969] 4. that the incident was not a traffic or vehicular accident but was an incident very much beyond the control of the CC. The CC raised the defense of caso fortuito.-. A passenger suddenly stabbed a PC soldier which caused commotion and panic among the passengers. In Lasam vs Smith. the owner and driver solidarily liable to the heirs of the deceased. By the contract of carriage. in order that a CC may be absolved from liability in case of force majeure. Held : The CC is liable for the death of the passengers. 1174 provides that no person shall be responsible for those events which could not be foreseen or which though foreseen were inevitable. the bus was speeding from a full stop.CC is not ordinarily liable for injuries to passengers due to fires or explosions caused by articles brought into conveyance by other passengers. In this case where passengers suffered injuries which caused their death. that the CC exercised due diligence in the choice of its EEs to avoid as much as possible accidents. Bachelor Express as a CC is bound to carry its passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious person. The CC's argument that it is not an insurer of its passengers deserves no merit in view of the failure of the CC to prove that the deaths of the 2 passengers were exclusively due to force majeure and not to the failure of the CC to observe extra-ordinary diligence in PAGE 35 . The passenger.-. The bus came from Davao City on its way to Cagayan de Oro passing Butuan City. through his EEs of the nature of the article or must have had some reason to anticipate danger therefrom (circumstances must show that there are causes for apprehension that the passenger's baggage is dangerous and that the CC fails to act in the fact of such evidence) [Nocum vs Laguna Bus Co. 800 owned by Bachelor Express and driven by Cresencio Rivera was the situs of a stampede which resulted in the death of passengers Beter and Rautrat.the driver did not immediately stop the bus at the height of the commotion. It must prove that there was no negligence or lack of care and diligence on the part of the CC. The event must be independent of human will. the SC held that a caso fortuito must have the following elements: (1) The cause of the unforeseen and unexpected occurrence must be independent of the human will. it is not enough that the accident was caused by force majeure.. The running amuck of the passenger was the proximate cause of the incident and is within the context of force majeure. While in Tabon-Tabon. However. much less. (2) It must be impossible to foresee the event. The CC denied liability and alleged that the driver was able to transport his passengers safely to their respective places of destination except for the two passengers who jumped off the bus without the knowledge and consent. Carriers not ordinarily liable for injuries to passengers due to fires or explosions caused by articles brought into conveyance by other passengers.

It is what is known as a contract of adhesion which is not entirely prohibited by law. by statements on the tickets.Even if the passenger failed to sign the ticket.-. 4 Agbayani: Liability for negligence or willful acts of employees. (2) by the posting of notices. 1759. Limitation of liability. the extraordinary diligence required under 1733 and 1755 for the carriage of passengers cannot be dispensed with or lessened (1) by stipulation.-. The one who adheres to the contract is in reality free to reject it entirely. Dispensing with or limiting liability.-Under 1758. to their consideration. he violates the contractual obligation of the CC for which he represents the CC Liability of CC for defects of its equipment.Ticket given to passenger is a written contract with the ff. (3) by statements on tickets. although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carrier. validity of stipulations Art. signed by the parties. 1043 (1957): (1) extraordinary diligence required of CC: calculated to protect the passengers as demanded by the preciousness of human life and by the consideration that every person must in every way be safeguarded against all injury. Responsibility for acts of EEs Art. he gives his consent . by the posting of notices. The CC cannot escape liability by interposing the defense that its EEs have acted without any authority or against the orders of the CC The passenger is entitled to protection from personal violence by the CC or its agents or EEs since the contract of transportation obligates the CC to transport a passenger safely to his destination and a CC is responsible for the misconduct of its EEs Cardenas vs Fernando. When a passenger is carried gratuitously. regardless of the passenger's lack of knowledge or assent to the regulation.[Lara vs Valencia. the reduction of fare does not justify any limitation of the CC's liability -the law requires gratuitous passage. since one riding in an automobile is no less a guest because he asked for the privilege of doing so. Ticket given to a passenger is a written contract.-. Passenger bound notwithstanding his failure to sign ticket containing stipulation limiting liability. The reduction of fare does not justify any limitation of the common carrier's liability.-. (2) lessening the extraordinary diligence required by law to the diligence of a good father of a family Exception: Effect of gratuitous carriage. Such provisions are part of the contract of carriage. by statements on tickets. The liability of the common carrier does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. which is the transportation of the passenger from the place of departure to the place of destination which are stated in the ticket. CC are held liable for the death or injuries to passengers caused by the negligence or the willful acts of their EEs. supported by sufficient PAGE 36 . to execute his undertaking to carry the passenger safely. 1733 and 1755 cannot be dispensed with or lessened by stipulation.Under 1759. the manufacturer is considered as being in law the agent or servant of the 5. 4. The responsibility of the common carrier for the safety of passengers as required in Arts. 1760. (3) object. 1758.-Under 1758 (2). Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees. charges. it is liable only for the amount printed in the ticket the passenger not having declared a higher value for his luggage nor paid addtl. Liability of owner of CC to accommodation passengers or invited guests. or otherwise. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation.-The servant is clothed with delegated authority and charged with the duty by the CC. whenever it appears that the defect would have been discovered by the CC if it had exercised the degree of care which under the circumstances was incumbent upon it.TRANSPORTATION AND MARITIME LAW transporting safely the passengers destinations as warranted by law. p. (2) liability for injury of passenger is based on a breach of contract of carriage for failure to bring the passenger safely to his destination Reason for making the CC liable for the misconduct of its EEs in their own interest. for the purposes of this doctrine. the same obligation of care is imposed upon the driver and owner as in the case of one expressly invited to ride 6. or otherwise. with regard to inspection and application of the necessary tests.A passenger is entitled to recover damages from a CC for an injury resulting from a defect in an appliance purchased from a manufacturer.-. but not for willful acts or gross negligence. 54 OG no. or (4) otherwise What cannot be stipulated in a carriage of passengers : (1) absolutely exempting the CC from liability from the passenger's death or injuries. elements: (1) the consent of the contracting parties manifested by the fact that the passenger boards the ship and the shipper consents or accepts him in the ship for transportation. Accordingly. 1757. 1958] an owner of an automobile owes a guest the duty to exercise ordinary or reasonable care to avoid injuring him. not contrary to law will still be void where the passenger is not carried gratuitously. when the EE mistreats the passenger. Art.General rule: Under 1757. The law is much stricter with respect to carriage of passengers as compared with carriage of goods: a stipulation limiting the CC's liability in writing. if he adheres. by the posting of notices. although such EEs may have acted beyond the scope of their authority or in violation of the orders of the CC. he is nevertheless bound by the provisions thereof.-. a stipulation limiting the common carrier's liability for negligence is valid. (2) cause or consideration which is the fare paid by the passenger as stated in the ticket. where the CC incurred delay. Art. the CC and the passenger may validly stipulate limiting the CC's liability for negligence where the passenger is carried gratuitously (but the parties cannot stipulate to entirely eliminate liability of CC) Effect of reduction of fares.

1988 ed.. When the crime took place. but continues until the passenger had reasonable time or a reasonable opportunity to leave the CC's premises. (3) as between the CC and the passenger. if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. Under respondeat superior (w/c is the minority view). His position would be that of a passenger also waiting transportation and not of an EE assigned to discharge duties. provided that the CC's EEs could have prevented or stopped the act or omission through the exercise of ordinary diligence.The relation of CC and passenger does not cease at the moment that the passenger alights from the CC's vehicle at a place selected by the CC at the point of destination. They should have known that with the position of the bus. Held : There was a breach of the contract of carriage and negligence on the part of the agent of the CC. Rescuers brought torches which resulted in fire. or (4) otherwise Bataclan vs Medina. the responsibility of the CC extends only to those acts that the CC could foresee or avoid through the exercise of the degree of care and diligence required of it. the CC is not liable Notice that the law speaks of injuries suffered by the passenger but not his death. The OCC did not impose upon CC the absolute liability for assaults of their EEs upon the passengers. the CC is liable only when the act of the EE is within the scope of his authority and duty. The failure of the driver and conductor to have cautioned or taken steps to warn rescuers not to bring a lighted torch too near the bus constitutes negligence on the part of the agents of the carrier. 4 Agbayani: The CC is responsible for such willful acts or negligence of other passengers or of strangers. both being unforeseeable and inevitable under the circumstances. The proximate cause of the death was the overturning of the vehicle which was followed by the negligence of the driver and the conductor who were on the road walking back and forth. Held: The NCC unlike the OCC makes the CC absolutely liable for intentional assaults committed by its EEs upon its passengers (Art. he was stabbed first by the passenger. The driver claimed self defense since accdg to him. 20 SCRA 412 F: A passenger in a taxicab was stabbed and killed by the driver. Held : While a passenger is entitled to protection from personal violence by the CC or its agents or EEs. (3) by statements on the tickets. and from its own servants charged with the passenger's safety. It is no defense that the act was done in excess of authority or in disobedience of the CC's orders. COMMERCIAL LAW REVIEWER. the CC's liability for the negligence or willful acts of his EEs which cause death of or injury to passengers cannot be eliminated or limited by (1) stipulation. Bus turned turtle with gas leaking out. Three cogent reasons underlie this rule : (1) the special undertaking of the CC requires that it furnish the passengers the full measure of protection afforded by the exercise of the high degree of care prescribed in the law. When the train reached the Paco Railroad. of employees. other passengers. 104 Phil 181 F: supra. from violence and insults in the hands of strangers. delegating therewith the duty of protecting the passenger with utmost care prescribed by law. including patterns of behavior. his liability is based on culpa contractual When relationship of carrier and passenger terminates. Under the second view. However. moral fiber. 1754). etc.The CC is exempt from liability where the EE was never in a position in which it became his duty to his ER to represent him in discharging any duty of the CC towards the passenger.-. A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers.-. the guard had no duties to discharge. 1763." (Aguedo F. the CC is liable as long as the assault occurs within the course of the performance of the EE's duty. as far as regards the work of constructing the appliance Common carrier is exempt from acts of EE not done in line of duty. If the injury could not have been avoided by the exercise of ordinary diligence on the part of the EEs of the CC. The taxicab operator claimed caso fortuito. De Gillaco vs MRR. The CC's liability is based on either (1) respondeat superior or (2) the CC's implied duty to transport the passenger safely. The word "injuries" should be interpreted to include "death. At the time of the blowout of the tires. the CC must bear the risk of wrongful acts or negligence of the CC's EEs against passengers since it has the power to select and remove them. there appears to be no reason why the common carrier should not be held liable under such circumstances. (2) liability is based on the CC's confiding in the servant's hands the performance of his contract to safely transport the passenger. He had a long standing grudge against Gillaco and he shot and killed him upon seeing him inside the train coach.TRANSPORTATION AND MARITIME LAW CC. What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances Elimination or limitation of carrier's liability. It is the CC's obligation to select its drivers with due regard not only to their technical competence and physical ability but also to their total personality. Agbayani. leakage was possible aside from the fact that gas when spilled can be smelled from a distance. Maranan vs Perez. The shooting was a caso fortuito.-Under 1760. and social attitude.-CC cannot escape liability by interposing defense that he exercised due diligence in the selection and supervision of his EEs. Responsibility for acts of strangers and co-passengers Art.) PAGE 37 . the driver. the EE is deemed as a stranger or co-passenger since his act was not done in the line of duty Defense of diligence in selection. the bus was speeding. a train guard of MRR was in the station waiting for the same train to take him to Tutuban to report for duty. 97 Phil 884 F: Plaintiff's husband was a passenger in the train from Calamba to Manila. 7. The CC's liability is absolute in the sense that it practically secures the passengers from assaults committed by its own EEs. (2) by the posting of notice. The act of the guard was entirely unforeseeable by MRR which had no means to ascertain or anticipate that the two would meet nor could it foresee every personal rancor that might exist between its EEs and its passengers.

The injury was due to passenger's fault. However. if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. the passenger is guilty of contributory negligence. It is negligence per se for passengers to protrude any part of his body and that no recovery can be had for an injury. It must prove that there was no negligence or lack of care and diligence on the part of the CC. 17. In this case.-Contributory negligence on the part of the passenger does not justify the CC's exemption from liability. It is not negligence per se for a traveler to alight from a slowly moving train.Diligence of a good father of a family to avoid injury to himself. Bachelor Express vs CA. The SC upheld the findings of the CA-. The CC must still prove that it was not negligent in causing the injuries resulting from such accident. the bus was not properly equipped with doors in accordance with law. The rule is not so exacting as to require one charged with its exercise to take doubtful or unreasonable precautions to guard against unlawful acts of strangers. the CC is exempted from liability Effect of passenger's contributory negligence. L. It is therefore clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing CCs. Held: The law does not make the CC an insurer of the absolute safety of its passengers. PAGE 38 . the bus was speeding from a full stop.-Law does not protect negligence of passenger to the extent of doing harm or damage upon a public utility Diligence required of passenger. The running amuck of the passenger was the proximate cause of the incident and is within the context of force majeure. Held: By placing his left arm on the window. The injury was in no way connected to the performance of the obligation of the bus company. it is not enough that the accident was caused by force majeure. The liability of the CC necessarily rests upon its negligence. Liability of air carrier under Convention (Oct. effect of Art. He sustained some injuries to his eye. over which the carrier had no control or even knowledge of. 180 SCRA 217 F: supra. Duty contributory negligence of passenger. 1762). 1763.-. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries. provided of course that the CC is the proximate cause of his death or injury Cangco vs MRR 38 Phil 768 F: supra.TRANSPORTATION AND MARITIME LAW Art. 12. 1929) the Warsaw Pilapil vs CA 180 SCRA 546 F: While on a bus. Effect of negligence of passenger. Isaac vs A. Ammen F: supra. an unidentified bystander hurled a stone at the bus and hit Pilapil above his left eye. 8.Where the proximate cause of the death of or injury to the passenger is his own negligence. Law does not protect negligence of passenger. and not that of the CC.-. Passenger aboard a bus who placed his left arm on the window lost his arm when the bus collided with a pick up. this is a circumstance which militates against plaintiff's position. It was caused by a stranger. if the proximate cause thereof is the negligence of the common carrier. The carrier shall be liable for damages sustained in the event of death or wounding of a passenger or any other bodily injury suffered by a passenger. Where it is not the proximate cause of the death or injury. The circumstances show that it was no means so risky for him to get off while the train was yet moving. with regards to its liability in cases when intervening acts of strangers directly caused the injury. 1755 qualifies the duty of the CC in exercising vigilance to only such as human care and foresight can provide. is the diligence only of a good father of a family and not the extraordinary diligence generally required. the diligence required. the bus driver had done what a prudent man could have done to avoid the collision. but the amount of damages shall be equitably reduced. and which could not have been prevented. EE riding on train who stepped on watermelons. 1762. The passenger must observe the diligence of a good father of a family to avoid injury to himself. A passenger stabbed a PC officer which caused a commotion which resulted in the death of 2 passengers. Art. Held: The conduct of plaintiff in undertaking to alight while the train was yet slightly underway was not characterized by imprudence and that he was not guilty of contributory negligence. the victims fell from the bus door when it was opened or gave way while the bus was still running. he or his heirs are not barred from recovery of damages. Held: The CC raised the defense of caso fortuito. in order that a CC may be absolved from liability in case of force majeure. The presumption created by law against the CC is rebuttable by proof that the CC had exercised extraordinary diligence in the performance of its obligations and that the injuries suffered were caused by fortuitous events. and although contributory negligence cannot relieve the carrier but can only reduce his liability (Art. Under Art. 1761. Art. The CC's argument that it is not an insurer of its passengers deserves no merit in view of the failure of the CC to prove that the deaths of the 2 passengers were exclusively due to force majeure and not to the failure of the CC to observe extraordinary diligence in transporting safely the passengers to their destinations as warranted by law. The TC and the CA had conflicting findings of fact. the conductor panicked and blew his whistle after people had already fallen off the bus. The CC would only be negligent if the tort caused by a third person could have been foreseen and prevented by them.the driver did not immediately stop the bus at the height of the commotion. or its failure to exercise the degree of diligence required by law.

2197.000 as compensatory damages with interest. Art. (6) Exemplary or corrective. Damages may be: (1) Actual or compensatory. or. for a period not exceeding five years. such transportation takes place in the performance of a contract for transportation by air. the PAGE 39 . any checked baggage or any goods. the recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate succession. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. In case of fraud. to have been the result of an event which took place during the transportation by air. Art. (3) The spouses. Damages in cases comprised in this Section shall be awarded with the title XVIII of this book concerning damages.TRANSPORTATION AND MARITIME LAW Art. 2199. and the indemnity shall be paid to the heirs of the latter. may demand support from the person causing the death. or of damage to. even though there may have been mitigating circumstances. which were heard even by the bus passengers.. Laguna CFI dismissed the cross-complaint against MRR and held LTBC liable for P 10. compensatory. The carrier shall be liable for damages occasioned by delay in the transportation by air of passengers. whether in an airport or on board an aircraft. 2203. such indemnity shall in every case be assessed and awarded by the court. 18. The bus did not slow down but instead the bus driver tried to pass the intersection before the train. Such compensation referred to as actual or compensatory damages. 1764. and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. In contracts and quasicontracts. bad faith. the damages for which the obligor who acted in good faith is liable shall be those that are natural and probable consequences of the breach of the obligation. subject to proof to the contrary. at the crossing heeded the train whistle by stopping and allowing the train to pass. (3) Nominal. by sea. or by river performed outside an airport. Art. (2) The transportation by air within the meaning of the preceding paragraph shall comprise the period during which the baggage or goods are in the charge of the carrier. He sounded the train's whistle four times before the intersection. both physically and mentally. a fourth year medical student of UST. Plaintiff and LTBC appealed. 2206. in any place whatsoever. Cariaga's parents brought an action to recover damages from LTBC and MRR in the amount of P 312. Art. Clearly. 2201. (2) Moral. LTBC disclaimed liability and filed a cross-complaint against MRR for recovery of expenses paid by it to the plaintiff placing MRR negligent for not providing a crossing bar at the national highway railroad track. baggage or goods SC has held that these provisions merely declare the carrier liable for damages in the enumerated cases. legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Cariaga vs LTBCo. the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. LTBC paid all medical expenses plus allowance during convalescence. Damages in cases comprised in this Section shall be awarded with the title XVIII of this book concerning damages. 19. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. or transshipment.000). any damage is presumed. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased.000 (now P50. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. Except as provided by law or by stipulation. Cariaga suffered severe injuries on the head making him unconscious during the first 35 days after the accident. Actual or compensatory Art. malice or wanton attitude. (3) The period of the transportation by air shall not extend to any transportation by land. unless the deceased on account of permanent physical disability not caused by the defendant. Art. Art. in case of a landing outside an airport. the exact duration to be fixed by the court. (4) Temperate or moderate. In addition. delivery. Later. (2) If the deceased was obliged to give support according to the provisions of article 291. 2. virtually invalid. D. had no earning capacity at the time of his death. In general Art. Neither said provisions nor others in the Convention regulate or exclude liability for other breaches of contract by the carrier. The amount of damages for death caused by a crime or quasi-delict shall be at least P 3. If however. 110 Phil 346 F: Edgardo Cariaga. The party suffering loss or injury must exercise diligence of a good father of a family to minimize the damages resulting from the act or omission in question. was a passenger of an LTBC bus which bumped against a train of MRR on the national highway crossing a railroad tract at Laguna de Bay.000 as actual. for the purpose of loading. moral and exemplary damages. Damages Recoverable from Common Carriers 1. Held: The train driver was not negligent. another LTBC bus which arrived ahead of the bus in this case. 1764. reducing his intelligence by 50% and rendering him in a helpless condition. (1) The carrier shall be liable for damage sustained in the event of the destruction or loss of. if the occurrence which caused the damage so sustained took place during the transportation by air. if the conditions therein specified are present. (5) Liquidated.

The amount recoverable would therefore be the NET earnings. which is the portion which the beneficiaries would have received. 2201. Compensatory damages should be increased to P 25. Attorney's fees could also not be granted because this case does not fall under Art. it is sufficient to justify the assumption that he could have finished his course and would have passed the board exams in due time. it is liable for damages that are the natural and probable consequences of the breach and which the parties had foreseen or could have reasonably foreseen at the time the obligation was constituted. which reduced his intelligence by 50% so that he can no longer finish his medical course. He suffered head injuries specifically a fractured right forehead necessitating the removal of all the right frontal lobe of his brain. 2208. The end of the bamboo pole tied to the cart hit the windshield and landed on the face of Quintos who was seated in front. and other expenses in the total sum of P 17.727. In addition. He died of cerebral injuries. In fact. In the absence of proof that Pan Am's attention was called to the special circumstances requiring prompt delivery of Pangan's luggages. and LTBC. Doria) could easily be expected as minimum monthly income of Ed C. had been rendered physically and mentally invalid by the accident. NCC and P 1. In order to impose on the defaulting party further liability than for damages naturally and directly. Held: On the basis of stipulations printed at the back of the ticket. such as alleged loss of profits on account of delay or failure of delivery.719. Villa Rey impugns the decision on the ground that damages will have to be paid NOW where most of those sought to be indemnified will be suffered years later. such unusual or extraordinary damages must have been brought within the contemplation of the parties as the probable result of the breach at the time of or prior to contracting. it would cause his death. in the ordinary course of things. of years on the basis of which damages shall be computed (life expectancy). Pan Am was not privy to the contracts of Pangan nor was its attention called to the condition therein requiring delivery of the promotional and advertising materials on or before a certain date. The claim for moral damages could not be granted because Art. 104 and 107 of the RPC. His sisters and surviving heirs brought an action against the bus co. hospital.000. In fixing said amount. 2220 because it did not act fraudulently or in bad faith. had he finished his studies. While his scholastic record may not be first rate. 164 SCRA 268 F: supra.00 ($20 x 30 kilos) as the latter did not declare a higher value for his baggage and pay the corresponding charges. clutch bags. 2219 enumerates the instances when moral damages may be recovered and the present case does not fall under any of them. barong tagalogs and personal belongings was lost. The claim by the parents for actual and compensatory damages is also without merit because the present action is based upon a breach of contract of carriage and the parents were not a party thereto. On the other hand. it must have appeared that he had notice at the time of delivery to him of the particular circumstances attending the shipment. in relation to Art. and pass the corresponding board exams must be deemed included because they could have reasonably been foreseen by the parties at the time he boarded the bus. Neither could LTBC be liable under Art.75. upon conclusion of his training. Baggage containing promotional and advertising materials for films to be exhibited in the US. To this sum must be added P12. i. P 300 (accdg. CA determined life expectancy accdg. the bus frontally hit the rear side of a bull cart filled with hay.TRANSPORTATION AND MARITIME LAW bus driver was negligent in totally disregarding the warning. and which probably would lead to such special loss if he defaulted. arising from a breach of contract.184 per year and did not anymore compute the potentiality and capacity of Quintos to increase his future income. As regards the income that he could possibly earn as a doctor. to the American Expectancy Table of Mortality. When they reached the national highway in Pampanga. when he would be promoted and receive a higher salary. and (2) rate at which the losses sustained should be fixed. It however claims that the said provision contemplates only the medical. and since Quintos was around 30 years old at the time of his death : 2/3 x [80 .30] = 33 1/3 years. to LTBC witness. 2206. they consist NOT of the full amount of his earnings but of the support they would have received from him had he not died. In determining the losses sustained by the dependents and heirs of Quintos.750. MRR cannot be held to be contributorily negligent because LTBC was not able to discharge its burden of proof when it alleged that MRR violated its charter by failing to ring the locomotive bell. petitioner cannot be held liable for the cancellation of Pangan's contracts as it could not have reasonably foreseen such eventuality when it accepted the luggage for transit. the necessary living expenses should therefore be deducted from his earnings. Pangasinan for Manila and was seated on the first seat right side. PAN AM sought to limit its liability to the amount specified in the ticket absent a declaration of higher valuation and the payment of addtl. Pan Am contends that its liability for the lost baggage of Pangan is limited to $ 600. The evidence shows that Ed C. Dr. charges. wanted to use the 4 year basis adopted in Alcantara vs Surro but the court held that the case is not controlling as it did not lay down any rule on the length of time to be used in the computation of damages. No attorney's fees could be awarded since there was no unjustified refusal by Pan Am to satisfy the passenger's just and valid claim. Held: The determination of damages due is dependent on 2 factors : (1) on the no. The SC ruled that the income which Ed could earn if he should finish the medical course. (2) thereof because this case is not one of quasidelict and could not be considered as such because of a pre-existing contractual relation between Ed C.e. 31 SCRA 511 F: Policronio Quintos boarded a Villa Rey Transit bus at Lingayen. Pan Am vs IAC. This argument if offset by the fact that payment of the award will take place upon the finality of the decision. The SC applied the ruling in Mendoza vs PAL: Before defendant could be held to special damages. he has to lead a quiet and retired life because if the tantalum plate which replaced a portion of his skull is pressed in or dented. LTBC admitted that under Art. The TC and CA held Villa Rey liable for P 63. and were not themselves injured as a result of the collision.000 pursuant to Art. Villa Rey Transit vs CA. fixed at the rate of P 2. even par.00. The bus co. it declared that there is no fixed basis for determination of indemnity and much is left to the discretion of the court considering the material damages involved and that there can be no exact or uniform rule for measuring the value of human life and the measure of damages cannot be arrived at by precise mathematical calculations.95 for the PAGE 40 .

to it. and constitute unwarranted legislation.200 as living expenses. Air France forced him to vacate the first class seat that he was occupying because there was a white man who had a better right to the seat. 2217. a civil engineer. the award of damages for death is computed on the basis of the life expectancy of the deceased and not of the beneficiary. The CA reduced the refund from P 393. issued to plaintiff a first class round trip ticket from Manila to Rome. Art. As a result of her son's death. the product is P 417. 1764 and Article 2206 (1). In this case. moral shock. PAGE 41 . moral damages are not recoverable unless it is proved that the CC was guilty of malice or bad faith. to the Art.000 for attorney's fees and costs of suit. There was a commotion when plaintiff first refused to give up his seat. Upon learning of the death of her son.000 attorney's fees. 2220. 34 and 35. the mother already died without being able to receive the indemnity she deserved. temperate. and a legal assistant of the Padilla Law Office.000 as exemplary damages. Multiplying his annual net income by his life expectancy of 30 years. declared that the deceased was President and General Manager and received a salary of P 1. fright. Baco. but he was pacified by his fellow Filipino passengers to give up his seat and transfer to another class. 500 attorney's fees. was a member of a group of 48 Filipinos that left Manila for Lourdes on March 30. liquidated or exemplary damages may be adjudicated. It had been certified airworthy by the Civil Aeronautics Administration. through its authorized agent. The plane. the lower courts determined the deceased gross annual income to be P 23. which is the death indemnity due to his mother and only forced heir. In the case at bar. would be to violate the clear provisions of the law. 2206 (award of moral damages). A CC's bad faith is not to be lightly inferred from a mere finding that the contract was breached through negligence of the CC's EEs. social humiliation. Though incapable of pecuniary computation. Padilla demanded P 600. besmirched reputation. P 10. serious anxiety.000 as moral damages.000 as attorney's fees and to pay the costs. wounded feelings. is left to the discretion of the court. under the circumstances. The plane crashed on Mt. P 10.000 as actual and compensatory damages plus exemplary damages and P 60. testified that the deceased was one of the incorporators of the co. xxx (3) The spouses. a PI-C133. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. at Iloilo City. Air France. the life expectancy of the deceased or of the beneficiary. but at Bangkok. Prior to his death. 1958. according circumstances of each case. (2) Quasi-delicts causing physical injuries. and also its VP with a monthly salary of P 455.20.900. Held: Under Arts. 2220. auditor of Padilla Shipping Co. there is no other evidence of such malice to support an award of moral damages.100 less P 9. 29.000.20 to P 383. causing it to swerve and hit the bridge wall. 2216. 26. is used in computing for amount of damages.. PAL vs CA. Nicanor had life insurance of P 20. To award moral damages for breach of contract. xxx Art.500 per month. Eduardo Mate of the Allied Overseas Trading Co. the driver lost control. Moral Art. the proceeds of which were paid to his sister. and similar injury. she suffered shock and mental anguish. was manufactured in 1942 and was acquired by PAL in 1948.TRANSPORTATION AND MARITIME LAW amount actually spent by the sisters for his medical and burial expenses and P 2. legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. to it. Air France vs Carrascoso. including the respondent. PAL. Nicanor Padilla was 29 years old. as required by Art. resulting in a net income of P 13. whichever is shorter. Willful injury to property may be a legal ground for awarding moral damages if the court should find that. 28.000 as moral damages. 1764 makes it all the more evident that where the injured passenger does not die. The assessment of such damages. Mesa bridge at an excessive rate of speed. Moral damages may be recovered in the following analogous cases : (1) A criminal offense resulting in physical injuries. Five of the passengers were injured. 18 SCRA 155 F: Plaintiff. Mindoro. such damages are justly due. Art.000 as award for the expected income of the deceased. nominal. 2206. Held: Art. 185 SCRA 110 F: In 1960. because her son who was still single was living with her. he traveled first class. The lower court allowed the deceased a life expectancy of 30 years. mental anguish. President and General Manager of Padilla Shipping Co. Mrs.000. 30. The RTC and the CA awarded damages of P 477. Isaac Reyes. without proof of bad faith or malice on the part of the CC. except liquidated ones. 1764 makes the CC subject to Art. From Manila to Bangkok. PAL is ordered to pay her heirs the death indemnity with legal rate of interest of 6% per annum. moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. The exception is a mishap resulting to the death of a passenger in which case Art. While the jeepney was descending the Sta. 3. P 10. PAL appealed the decision since accdg. Because of the long delay in this case. xxx (10) Acts and actions referred to in Articles 21. 27. The lower court sentenced Air France to pay P 25. The CA awarded moral damages. Nicanor Padilla boarded the PAL flight from Iloilo to Manila. 2219. the difference in fare between first class and tourist class plus P 3. No proof of pecuniary loss is necessary in order that moral. Fores vs Miranda 105 Phil 266 F: supra. 32. Accdg. Moral damages include physical suffering. the court erred in computing the awarded indemnity based on the life expectancy of the deceased rather than on the life expectancy of the mother.

The expulsion of Carrascoso is a violation of a public duty by the CC -. Plaintiff sued the airlines for damages. Art. 4. Plaintiff was indeed confirmed for first class all the way to Rome.TRANSPORTATION AND MARITIME LAW Held: Air France contended that the issuance of the first class ticket was no guarantee that he would have a first class ride. Similar false representations were made to him at Dharnan and Calcutta. liquidated or compensatory damages. serious anxiety. But the interference of BF is there. Exemplary damages cannot be recovered as a matter of right. 2232.000 as exemplary damages all with interest. worse. TC awarded plaintiff moral and exemplary damages. Moral damages are recoverable. he imposed his arbitrary will. the promise was not complied with. such conduct already amounts to action in BF. P 75. In this case. embarrassments and humiliation. thereby causing him mental anguish. 2233. 64 SCRA 610 F: Plaintiff took a first class accommodation on Lufthansa Airlines in Rome for his trip to Manila. Exemplary or corrective damages are imposed. All the same. CC's contract with Carrascoso is attended with public duty. and P 50. It may not be humiliating to travel as tourist passengers. 2229. but its EE on seeing plaintiff's Filipino nationality in his passport. to take the flight as tourist passengers. the court will decide whether or not they should be adjudicated. and social humiliation. but he was compelled to take an economy seat with a promise of the Lufthansa EE that plaintiff will be transferred to first class in Cairo and onward to Hongkong. Also taken into consideration was the heart condition of Ortigas which gave him added apprehension about traveling economy against the advice of the doctor.000 to P 100. oppressive. For bad faith means a breach of a known duty through some motive of interest of ill will. Damages are proper.000. Ortigas vs Lufthansa. Exemplary Art. the CC-ER must answer. The award of higher damages is justified by the aggravation of the situation when the Lufthansa EE at Rome falsely noted on Ortigas' ticket that he was traveling economy from Rome to HK and which was repeated four times. The SC ruled that it could not understand how a reputable firm like Air France could have the indiscretion to give out tickets it never meant to honor at all. 16 SCRA 431 F: Plaintiffs made first class reservations with defendant air carrier. who may not be discriminated against with impunity. political. reckless. they are awarded P 200. temperate. Since both Alitalia and Lufthansa are members of IATA and are agents of each other. expecting some cancellations of bookings would be made before the flight time. but defendant's agent by mistake canceled plaintiff's reservations and thereafter deliberately withheld from plaintiffs the information. in legal contemplation. Upon arrival in Cairo. contrary to what is rightfully to be expected from the contractual undertaking. which reservation was confirmed and first class tickets issued.a case of quasi-delict.000 as attorney's fees considering the standing of plaintiff's counsel. due to pressing engagements in the US. The manager not only prevented Carrascoso from enjoying his right to a first class seat. Plaintiffs sued the defendant for moral and exemplary damages. or malevolent manner. the breach appears to be of graver nature. in its Tokyo-SF flight. The Rizal CFI awarded the plaintiffs moral and exemplary damages and attorney's fees. Plaintiff having a heart ailment was advised by his physician to take only a first class seat. 2220. It is our considered view that when it comes to contracts of common carriage. and they were constrained. The manner of ejectment of Carrascoso fits into the legal precept for awarding exemplary damages in addition to moral damages. resulting in moral damages. letting them go on believing that their first class reservations stood valid and confirmed. It received the corresponding amount in payment of first-class tickets and yet it allowed the passenger to be at the mercy of its EEs. which failed to occur. disallowed him to board the place and his seat was given to a Belgian. wounded feelings. there was bad faith when petitioner's EE compelled Carrascoso to leave his first class accommodation after he was already seated and to take a seat in the tourist class by reason of which he suffered inconvenience. Art. There was contract to furnish plaintiff a first class passage. It is true that the complaint did not use the term Bad Faith. This is certainly BF. social and financial standing. Third. Held: In so misleading the plaintiffs into purchasing first class tickets in conviction that they had confirmed reservations when in fact they had none. Held: It is the opinion of the SC that moral damages should be raised from P 100. which they did under protest. the court may award exemplary damages if the defendant acted in a wanton. with confirmation of the airlines office. In contracts and quasi contracts. Lopez vs Pan Am.just to give way to another passenger whose right thereto has not been established. only then were the plaintiffs informed that there were no accommodations for them in the first class. said damages were increased in amount.000 to P 150. Such actions of the defendant may indeed have been prompted by nothing more than the promotion of its self-interest in holding on to plaintiffs as passengers and foreclosing on their chances to seek the service of other airlines that may have been able to afford to them first class accommodations. PAGE 42 . Plaintiffs are entitled to moral damages. fraudulent.000 as moral damages. Upon arrival in Tokyo. but it is humiliating to be compelled to travel as such. Upon plaintiff's MFR. For the willful malevolent act of CC's manager.000 and exemplary damages be increased from P 30. Said contract was breached when the CC failed to furnish the first class transportation at Bangkok. they are bound by the mistakes committed by a member such as the mistake of the Alitalia EE to inform Ortigas that he could travel first class instead of only being waitlisted. he forcibly ejected him from his seat. Considering their official. by way of example or correction for the public good. in addition to the moral. defendant willfully and knowingly placed itself into position of having breached its contract with plaintiffs. made him suffer the humiliation of having to go to the tourist class compartment -. inattention and lack of care on the part of the CC resulting in the failure of the passenger to be accommodated in the class contracted for amounts to bad faith or fraud which entitles the passenger to an award of moral damages in accordance with Art. but such would depend upon the availability of first class seats. since the preference given to the Belgian passenger over plaintiff was done willfully and in wanton disregard of plaintiff's rights and his dignity as a human being and as a Filipino.

The IAC increased the award of nominal damages to P 40. She then booked passage with Alitalia. Held: Before going into the issue. Art. thus aggravating the casualties. by the posting of notices. she demanded that Alitalia make reparation for damages suffered by her.000 award of damages granted by the CFI. There is no question that the defendants are negligent. The RTC awarded damages of P 400. Art.000 and attorney's fees of P 5. there is. it still turned to its right resulting in the collision. Liquidated damages are those agreed upon by the parties to a contract.000 for the death of plaintiffs' parents and P 15. At 10:30 PM. which are more than nominal but less than compensatory damages. based on quasi-delict. Negros Oriental bound for Manila. The responsibility of a common carrier for the safety of passengers as required in Arts.000 following the doctrine that the SC must consider and resolve all issues which must be decided in order to render substantial justice to the parties. Italy. from the nature of the case. 2224.one for her clothing and personal items and the other for her scientific papers. the SC ruled that it is not applicable and will not relieve DJ from responsibility if the collision could have been avoided by proper care and skill on her part or even by a departure from the rules. 192 SCRA 10 F: Dr. Nominal damages are adjudicated in order that a right of the plaintiff. They executed maneuvers inadequately and too late. an associate professor of UP and a research grantee of the Phil.TRANSPORTATION AND MARITIME LAW Mecenas vs CA. The CFI awarded nominal damages of P 20. filed a case against Negros Navigation.000 under present inflationary conditions as awarded to plaintiff as nominal damages is too little to make up for the plaintiff's frustration and disappointment in not being able to appear at said conference. As for the captain. in permitting.000 as actual and compensatory damages. DJ steered to the right while TC continued its course to the left. the SC looks to it as an instrument to serve the ends of law and public policy by reshaping socially deleterious behaviors. In discussing the rule of exemplary damages in law.000 for attorney's fees. the amount of P20.000 plus costs of the suit. DJ is still at fault when. the SC increased it to P 800. she went to Rome to try to locate her bags. The question is WON the defendants were recklessly or grossly negligent. TC had visual contact of DJ when they were about 5 miles apart and as a precaution. slides and other research material. However. DJ had radar contact of TC when they were four miles apart and following R18 of the International Rules of the Road when a collision is possible. Her bags were located and forwarded to Ispra but only on the day after her scheduled appearance. It also sailed with an overload (1. it must be deemed grossly negligent. and indulged in the presumption of negligence on the part of the CC although its EEs may have acted beyond the scope of their authority or even in violation of its instructions. and for the embarrassment and humiliation she suffered from the academic community for failure to carry out an official PAGE 43 . or in failing to discover and correct the regularity of the captain's mahjong sessions while DJ was at sea. The SC awarded moral damages of P 307. and to force them to take adequate care of human beings and their property. no such thing as off-duty hours for the master of a vessel at sea that is a CC upon whom the law imposes the duty of extraordinary diligence. 1757. Discouraged. upon seeing TC turn to its left. Petitioners. owner of DJ. children of the victims. She arrived in Milan on the day before the meeting in accordance with the itinerary set for her by Alitalia but her luggage was delayed as it was in one of the succeeding flights from Rome to Milan.000. In Manila. she returned to Manila without attending the meeting in Ispra. She accepted the invitation and was then scheduled by the organizers to read her paper. Nominal.004 passengers and crewmembers). 2226.000 together with actual and compensatory damages for wrongful death of P 126. Art. specifically. Alitalia vs IAC. her baggage could not be found. to tame their reckless instincts. The SC ruled in the affirmative. the SC ruled that the action which was based on quasi-delict should be appropriately regarded as grounded on contract. may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot. Felipa Pablo. However. and not for the purpose of indemnifying the plaintiff for any loss suffered by him. be proved with certainty. Temperate and Liquidated Art. As for Negros Aviation. both realistically speaking and in contemplation of law. The CA modified the award to P 100. it was steered to its right. As she was no longer there to accept delivery.000 for a total of P 815. 5. both collided as a result of which DJ sank 15 minutes later and hundreds of its passengers perished.000. in the case.000 and attorney's fees of P 15. to avoid collision. 180 SCRA 83 F: M/V Tacloban City (TC) left Amlan. which has been violated or invaded by the defendant. WON he was then off-duty is immaterial. Alitalia offered her free airline tickets which she rejected while instituting this action. As for the failure of TC to follow R18 by turning right instead of left. her bags were not actually returned to her until after 11 months. he was playing mahjong before and up to the time of the collision. they will collide. Its liability would include moral damages (Art. Her luggage consisted of 2 suitcases-. The increase was justified as follows-considering the negligence committed by defendant. When the collision occurred. As found by the CFI.000 and exemplary damages of P 307. Although the petitioners only asked for P 400. including issues not explicitly raised by the parties affected. Atomic Energy Association was invited to take part at a meeting sponsored by the United Nations in Ispra. it was steered to its left. or otherwise. 1733 and 1755 cannot be dispensed with or lessened by stipulation. She inquired about her suitcases in the international and domestic airports and filled out the forms required by Alitalia for people in her predicament. to be paid in case of breach thereof. She was to be the 2nd speaker on the first day of the meeting. 2221. by statements on tickets. to compel CC to control their EEs. There can be no excuse for them not to realize that with such maneuvers. Feeling desperate. Temperate or moderate damages. the captain failed to supervise his crew in the process of abandoning the ship and he failed to avail of measures to prevent the too rapid sinking of his vessel. 1764) and exemplary damages if the defendants acted recklessly or with gross negligence (Art. Italy.000 and P 60. 2332). M/V Don Juan (DJ) left Manila bound for Bacolod. the other flights from Rome did not have her baggage on board. may be vindicated or recognized.

Pablo's luggage was eventually returned belatedly. or destruction.a breach of its contract of carriage -. The airlines objected on the ground that this petition only raises factual questions. if the damage is caused by his wilful misconduct or by such default on his part as is considered to be equivalent to wilful misconduct or if the damage is similarly caused by any agent of the carrier acting within the scope of his employment. Pomierski and Son Funeral Home. CMAS booked the shipment with PAL. the issue of nominal damages is raised. or as not restrictive of the carrier's liability. (3) That damages are recoverable by petitioners for the humiliating. Maria Saludo and Saturnino Saludo. for UP and for the country. When she learned of her mother's arrangements. if the occurrence causing it took place during the carriage by air. when she learned that her suitcases were missing. Plaintiffs then filed a case against PAL and TWA before the CFI of Leyte. or otherwise improper conduct. 1976. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage. The Convention should be deemed a liability only in those cases where the cause of the death or injury to person. She then called Pomierski who then called CMAS which in a matter of 10 minutes told him that the remains had been switched with another body and had been sent to Mexico. or as an absolute limit of the extent of that liability. 1976. The Warsaw Convention has invariably been held inapplicable. may be vindicated and recognized.000. which is adjudicated in order that a right of the plaintiff. Plaintiffs then appealed the decision on the ff. The law authorizes recovery of attorney's fees where the defendant's act or omission has compelled the plaintiff to litigate with third person or to incur expenses to protect his interest.m. 29. The Convention does not regulate or exclude liability for other breaches of contract by the carrier.with the result that she was unable to read her paper that she had painstakingly labored over. in bad faith. On October 28. transfers. 1976. She is however entitled to nominal damages. The opportunity to claim honor or distinction for herself. She is not entitled to be compensated for loss or damage to her luggage since they were ultimately delivered to her.000 for attorney's fees is reasonable.000. children of the deceased were booked with United Airlines from Chicago to California and with PAL from California to Manila. The Warsaw Convention. The shipment was immediately loaded on PAL flight for Manila that same evening and arrived in Manila on October 30.000. and (2) That there is no warrant in fact or in law for the award of nominal damages and attorney's fees. CMAS is a national service used by undertakers which furnishes the air pouch in which the casket is enclosed in and they see to it that the remains are taken to the proper air freigh terminal. luggage or goods. PAGE 44 . Vice Consul sealed the shipping case on Oct.1976. there was a mix-up in Chicago Airport between the two bodies." Also absent any claim for actual or compensatory damages (she asked for moral and exemplary damages and attorney's fees). On the same date. Alitalia appealed on the following grounds: (1) That the Warsaw Convention should have been applied to limit Alitalia's liability. denies to the carrier availment of the provisions which exclude or limit his liability. any registered luggage or goods. it suffices that her general prayer includes "such other and further just and equitable relief in the premises. recklessness. but without appreciable damage. (2) The one day delay in the delivery constitutes breach of contract as would entitle them to damages. Saludo vs CA 207 SCRA 498 F: After the death of plaintiff's mother Crispina Galdo.000 francs and for registered baggage and cargo to 250 francs per kg unless the passenger has declared a higher rate and has paid additional charges. and (3) Delay in the transportation by air of passengers. 1976. was irretrievably lost to her. They had the body embalmed and secured a permit from the Philippine Vice Consul in Chicago. The Phil. The Convention does not thus operate as an exclusive enumeration of the instances of an airline's liability. through its agent Air Care International. Since it is precisely the soundness of the inferences or conclusions that may be drawn from the factual issues which are here being assailed. that some special species of injury was caused to her because Alitalia misplaced her baggage and failed to deliver it to her at the time appointed -. to comply with a contract of carriage. Based on the facts. The fact is. Otherwise. an air carrier is made liable for damages for: (1) The death. where there was satisfactory evidence of malice or bad faith attributable to its officers and employees. or where the court deems it just and equitable. (2) The destruction. She reluctantly took the TWA flight with her cousin's assurance to look into the matter. She watched from the look-out area but she saw no body being brought on the flight. moral damages of P 1. no bad faith or otherwise improper conduct may be ascribed to the EEs of Alitalia. praying for the award of actual damages of P 50. nevertheless. bad faith. or loss of damage to. arrogant. which gradually turned into panic and despair. on board PAL Flight 107 of Oct. she went to the TWA counter to inquire about her mother's remains but she was told that they did not know anything about it. 27. the remains arrived in SF and was received by PAL at 7:45 p. The award of P 5. The compensation for the injury suffered by Dr. Upon arrival in SF. exemplary damages and attorney's fees and costs of suit. made the necessary preparations and arrangements for the shipment of the body from Chicago to the Philippines. As to the argument that she failed to include a specific claim for nominal damages in her complaint. Saludo in Chicago.TRANSPORTATION AND MARITIME LAW mission for which she was singled out by the faculty to represent her institution and the country. PAL Airway Bill was issued for the route from Chicago to SF on board TWA Flight 131 of Oct. and not for the purpose of indemnifying the plaintiff for any loss suffered.etc. with Pomierski as shipper and Maria Saludo as consignee. 26. however. The CFI and CA absolved the two airline companies. In the case at bar. Such proposition is not borne out by the language of the Convention. loss or damage to property or delay in its transport is not attributable to or attended by any wilful misconduct. and indifferent acts of the EEs of TWA and PAL. an air carrier would be exempt from any liability for damages in the event of its absolute refusal. 27. 1976. Pablo's right being violated. Arrangements were made to send the body to California through Texas. wounding or other bodily 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. a day after its expected arrival on October 29. Held: Under the Warsaw Convention. Pomierski brought the remains to the Continental Mortuary Air Service (CMAS) which made the necessary arrangements such as flights. grounds: (1) That the delay in the delivery of the remains was due to the fault of the airlines. and from SF to Manila. and with proof of Dr. she changed reservations from UA to TWA. 1976. which has been violated or invaded by the defendant. Dr. and from Manila to Cebu on board PAL Flight 149 of Oct. She also underwent profound distress and anxiety. The Convention also limits the liability of the carriers for each passenger to 250.

the body was really received by PAL on Oct. They had no authority to unseal and open the casket. 27. the law implies a contract that they shall be delivered at destination within a reasonable time. and terminates ony after the lapse of a reasonable time for the acceptance of the goods by the consignee or other person entitled to receive them. for the switching of caskets prior thereto which was not caused by them and subsequent events caused thereby. Said faithful compliance was not affected by the fact that the remains were shipped on an earlier flight as there was no fixed time for completion of carriage stipulated on. 1976 and it was from such date that it became responsible for the agreed cargo under the airway bill. since the casket was hermetically sealed by the Philippine Vice-Consul. 1976. of extraordinary responsibility arise. As found by the CA. the switching of the caskets. In fact. TWA can use substitute aircraft. unless the shipper exercises the right of stoppage in transitu. if not directly caused. For such duty to commence. why. 28. 28 that PAL received physical delivery of the body at SF. It can safely be said that a CC is entitled to fair representation of the nature and value of the goods to be carried. A bill of lading is a written acknowledgment of the receipt of the goods and an agreement to transport and deliver them at a specified place to a person named or on his order. they deny having received the remains of Saludo on Oct. mechanical failure. 1976 as evidenced by the issuance of the PAL Airway Bill. the airway bill was issued. When TWA shipped the remains ten hours earlier than scheduled. so that even if CMAS was indeed at fault. despite the issuance of the airway bill and the date thereof. customs and usages. CMAS may be classified as a forwarder. when no goods have been delivered for shipment no recitals in the bill can estop the carrier from showing the true facts. Condition No. TWA contends that it faithfully complied with the obligations under the airway bill. The extraordinary responsibility of CC begins from the time the goods are delivered to the carrier. 26. reqts. PAL would still be liable because whoever brought the cargo to the airport or loaded it on the plane did so as agent of PAL. such as weather turbulence. (2) Petitioners allege that even assuming CMAS was at fault. The airway bill was issued on the basis of such representations. Consequently. 5 is binding on the plaintiff even if it is printed at the back of the airway bill. It merely contracts for the transportation of goods by carriers and has no interest in the freight but receives compensation from the shipper as his agent. However. However. it made itself a party to the contract of carriage nad was therefore bound by the airway bill. on the terms specified in such instrument. They had to rely on the information given by CMAS. Neither can they be held accountable on the basis of petitioner's theory that whoever brought the cargo to the airport or loaded it on the plane did so as an agent of private respondents. or by general transportation practices. The consequent duty to conduct an inspection arises in the event that there should be reason to doubt the veracity of such representations. SC: This contention is without merit." SC : TWA's contention is tenable. We must therefore allow the airline companies to explain. No amount of inspection by the airlines could have guarded against the switching that had taken place. which is regarded as the agent of the shipper (Pomierski) and not of the crrier. it allegedly violated the terms of the airway bill which compounded. flights and schedules are clearly justified by the peculiar circumstances of a particular cae. It was hired to handle all the necessary shipping arrangements for the transportation of the remains. 1976. Air Care Intl. of PAGE 45 . From said date. with the concomitant right to rely thereon. and that a carrier has no obligation to inquire into the correctness or sufficiency of such information. such condition only serves to insulate the carrier from liability in those instances when the changes in routes. not as evidence of receipt of delivery but merely as confirmation for the booking made for the SF-Manila flight scheduled on October 27. which provides that " xxx no time is fixed for the completion of the carriage. SC: An airway bill estops the carrier from denying receipt of goods. In the absence of more definite information. It is the right of the carrier to require good faith on the part of those persons who deliver goods to be carried by it. Only when such fact of delivery has been unequivocally esablished can the reqt. or one day after private respondents received the cargo. the carrier has the right to accept shipper's marks as to the contents of the package offered for transportation and is not bound to inquire particularly about them. (3) Petitioners contended that TWA by agreeing to transport the remains. emergencies in aviation. This responsibility remains in force even when they are temporarily unloaded or stored in transit. In case at bar. A bill of lading is a receipt as to the quantity and description of the goods shipped and a contract to transport the goods to the consignee or other person therein designated. in view of the condition on the back of the airway bill. the liability would be attributed to the airlines. xxx and that Carrier may without notice substitute alternate carriers or aircrafts xxx. CMAS was not an agent of private respondents. the latter must necessarily be liable. TWA did not undertake to carry the cargo aboard any specified aircraft. 1976. as between the shipper and the carrier. TWA must be presumed negligent unless such is rebutted. When a CC undertakes to convey goods. As found by the CA. private respondents were charged with the responsibility to exercise extraordinary diligence so much so that for the alleged switching of the caskets on Oct. But the court cannot rule on the possible liability of CMAS as such is not at issue in this case and there has not been convincing evidence on the matter. In this case. and it is nowhere questioned that a bill of lading is prima facie evidence of the receipt of the goods by the carrier. private respondents had no reason to doubt the truth of the shipper's representations. When the cargo was received from CMAS.TRANSPORTATION AND MARITIME LAW the issues raised in the petition indeed warrant a second look. in the absence of any agreement as to the time of delivery. This is clearly sanctioned by the contract of carriage. The facts of the case would point to CMAS as the culprit. even the petitioners wrote CMAS entertaining serious doubts as to whether they were responsible for the mix-up. PAL's agent and TWA had no way of determining its actual contents. This is in the nature of a contract of adhesion. there must in fact have been delivery of the cargo subject of the contract of carriage. PAL cannot be held liable. no special contract for prompt delivery was entered into by the parties. Held: (1) Petitioners allege that private respondents received the casketed remains of petitioner's mother on Oct. for immediate shipment. It was not until Oct. even without notice and without the assumption of any obligation whatsoever to carry the goods on any specified aircraft. The EEs of TWA presumably caused the mix-up by loading the wrong casket on the plane. 26. Petitioners relied on the doctrine that the issuance of the bill of lading carries the presumption that the goods were delivered to the carrier issuing the bill. or by contingencies.

other than judicial costs. malice or BF. (5) Where the defendant acted in gross and evident BF in refusing to satisfy the plaintiff's plainly valid. 1756 (2) liability for lost earnings are the deceased passenger's net earnings during his expected length of life based on accepted mortality tables (compensatory damages) (3) PAL is not liable for exemplary damages where it was not proven that it acted in a wanton. (3) moral damages. 6. laboreres and skilled workers.-. cannot be recovered. They are recoverable where some injury has been done but the amount of which the evidence fails to show. (3) In criminal cases of malicious prosecution against the plaintiff. indifference and extreme insensitivity to their feelings. Arts. the presumption is that it was at fault. Nonetheless. attorney's fees and expenses of litigation. Indemnity arising from the fact of death is fixed whereas the others are still subject to the determination of the court based on evidence presented.000 to be paid by TWA was awarded in favor of petitioners as a reasonable amount in the circumstances. under Art. the delay in the delivery of the remains cannot be attributed to the fault. (10) When at least double judicial costs are awarded. In the determination of the losses or damages sustained by dependents and heirs of the deceased. TWA knew of the urgency of the shipment due to the notation on the airway bill : "xxx Please return bag first available flight to SFO.-A CC's bad faith is not to be lightly inferred from a mere finding that the contract was breached through negligence of the CC's employees (Fores vs Miranda) Extent of liability of air carrier for death of passenger: (1) where there was no satisfactory explanation on the part of PAL as to how and why the accident occurred. Art. 2208. Interest may. (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. In the absence of stipulation. it did so in the exercise of sound discretion and with reasonable prudence -. moral damages cannot be awarded." (4) Petitioners alleged that private respondents are liable for tort on account of humiliating. (9) In a separate civil action to recover civil liability arising from a crime. arrogant and indifferent acts of their officers and personnel. be allowed upon damages awarded for breach of contract. The censurable conduct of TWA's EEs cannot be said to have approximated the dimensions of fraud. fraudulent. but of the support they received or would have received from him had he not died in consequence of the negligence of defendant. In fixing the amount of support. The foregoing observations do not appear to be applicable to PAl and its EEs. just and demandable claim.(1) indemnity for the death of victim (P 50T). It must be pointed out that the lamentable actuations of TWA's EEs leave much to be desired. the facts show that petitioners' right to be treated with due courtesy in accordance with the degree of diligence required by law to be exercised by every common carrier was violated by TWA and this entitles them. In all cases. only net earnings are to be considered-. They contended that there was no reason for the personnel to disclaim knowledge of the arrival or whereabouts of the body other than their sheer arrogance. in the absence of proof that defendants acted with malice. (8) In actions for indemnity under workmen's compensation and employer's liability laws. In this case. the assessment of damages being left to the discretion of the court accdg. (4) In case of a clearly unfounded civil action or proceeding against the plaintiff. 4 Agbayani: Damages arising from death. negligence or malice of private respondents. malice or bad faith. (2) indemnity for loss of earning capacity of the deceased. Petitioners agonized for 5 hours unattended to and without any assurance from the EEs of TWA. factors to be considered 1. said damages consist not of the full amount of his earnings. by themselves or through their superiors. at least. to nominal damages from TWA alone. (5) attorney's fees and expenses of litigation.they wanted to assure that the shipment would be received in SF in sufficient time for transfer to PAL. to the circumstances of the case. Nominal damages of P 40. 2221 and 2222 of the Civil Code makes it clear that nominal damages are not intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded. rather than just shrug off the promblem with a callous and uncaring remark that they had no knowledge about it. their tension and anxiety wrought by the confusion and the fear about where their mother's remains were. fraud or BF. Common sense should have dictated that they exert a little extra effort in making more extensive inquiry. Airline companies are sternly admonished to strictly require their personnel to be more accommodating to passengers and the general public.TRANSPORTATION AND MARITIME LAW national security and the like. indemnity for death is distinct and separate from the other forms of indemnity Common carrier not liable for moral damages to passenger injured due to negligence of driver. (5) In the absence of strong and positive evidence of fraud. reckless. arrogant or indifferent manner as to amount to BF or malice. (4) exemplary damages. particularly so given the grief of petitioners. and (6) interest. (7) In actions for the recovery of wages or household helpers. number of years on the basis of which the damages shall be computed 2. 2210. except: (1) When exemplary damages are awarded. (6) In actions for legal support. Attorney's Fees and Interest Art.total earnings less expenses necessary in the creation of such earnings less living and incidental expenses Damages recoverable when death occurs due to commission of crime. Neither can exemplary damages nor attorney's fees. SC: It affirmed the CA's findings that TWA EEs did not deal with petitioners in a grossly humiliating. oppressive or malevolent manner [Davila vs PAL] PAGE 46 . in the discretion of the court. When TWA shipped the remains on an earlier flight. the attorney's fees and expenses of litigation must be reasonable. (11) In any other cases where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. the rate at which the losses sustained should be fixed.

the law implies a promise and imposes upon the CC the corresponding duty of protection and courteous treatment. And this. the heirs of the deceased passenger may demand moral damages in an amount commensurate with the mental anguish suffered by them xxx In a case where the passenger suffers physical injuries because of the CC's injuries. Damages caused by CC on third persons. that any rude or discourteous conduct on the part of EEs towards a passenger gives the latter an action for damages against the CC. prejudice or corruption on the part of the TC BF justifying moral damages must be in the securing. Passengers do not contract merely for transportation. It invites people to avail of the comforts and advantages it offers. therefore. the offended party is not entitled to moral nor exemplary damages but only to the limited amount printed in the plane ticket where the offended party had not declared a higher value nor paid addtl. but acted in GF.includes income to be earned by the injured passenger or deceased passenger had he finished his course (could have been foreseen) (2) sum being carried by the deceased passenger which was lost (3) funeral expenses (4) attorney's fees (5) loss of merchandise carried by the deceased (6) loss of baggage and personal belongings Exception to rule that CC is not liable for moral damages in breach of contract: (1) where the mishap results in death of the passenger (2) where it is proved that the CC was guilty of fraud or BF. Defendant as an airline should be made to pay an amount that can really serve as a deterrent against a seeming pattern of indifference and unconcern. Where the passenger's seat was given to a white passenger. PAGE 47 . generates a relation attended with a public duty. A contract to transport passengers is quite different in kind and degree from any other contractual relation. both airlines are constituted as agents of each other in the issuing of tickets and other matters pertaining to their relations with those who would need their services. there is willful breach giving rise to an action for moral damages. indignities and abuses from such employees. courtesy and due consideration. respect. serious anxiety and mental anguish Under 2206. the TC may consider the nature and extent of the injuries and the suffering occasioned by them and the duration thereof. They are entitled to be protected against personal misconduct. precaution.[Ortigas vs Lufthansa] (1) Under the pool arrangement among different airlines of the IATA agreement of which Alitalia and Lufthansa are signatories. The appellate court should not interfere unless such is palpably and scandalously excessive so as to indicate that it was the result of passion. Its business is mainly with the traveling public. because of the relation which an air carrier sustains with the public. Held: A passenger is entitled to courteous treatment from the carrier and its EEs and failure of the CC to comply with this obligation will entitle the passenger to damages. of air carrier to its where because of the BF of the CC. but it had not acted in BF nor been guilty of gross negligence. wounded feelings. and discrimination for racial reasons. The contract of air carriage. from those of almost every legal or contractual relation. mere carelessness of the CC's driver does not per se constitute or justify an inference of malice or BF on the part of the CC xxx CC is subsidiarily liable for moral damages in actions ex delicto or where the action is based upon its liability arising from a crime xxx CC is not ordinarily liable for exemplary or corrective damages based upon the wrongful act of its EE or driver where it did not have anything to do with the wrongful act or had not previously authorized or subsequently ratified such act (Art. the CC is under the absolute duty of protecting his passengers from assault or insult by himself or his servants. Therefore. inattention and lack of care on the part of the CC resulting in the failure of the passenger to be accommodated in the class contracted for amounts to BF or fraud which entitles the passenger to the award of moral damages. discernible in the treatment of air passengers. even if death does not result Ex. 2332) This cannot be presumed but must be proven by evidence.-. On account of the peculiar situation of the parties. (3) Exemplary damages were awarded.-. and vigilance which the circumstances justify demand. hospital expenses) Actual damages.-Negligence refers to the failure to observe for the protection of the interests of another person that degree of care. They have a right to be treated by the CC's EEs with kindness. Neglect or malfeasance of the CC's employees naturally could give ground for an action for damages. whereby such other person suffers injury Common carrier is liable only for damages that are natural and probable consequence of breach of contract. BF cannot be imputed but must be alleged and proved. it is liable only for the natural and probable consequences of the breach and which the parties had foreseen or could have reasonably foreseen at the time the obligation was constituted (includes medical.TRANSPORTATION AND MARITIME LAW Nature of liability passengers: [Zulueta vs Pan Am] F: Filipino passenger who went to relieve himself was berated by the captain for coming back late to the plane and was called a monkey. exemplary damages cannot be recovered as a matter of right Nominal and exemplary damages awarded for willful breach of contract committed through agent or EE xxx Where the CC has incurred in delay in the delivery of the luggage of the offended party. the passenger suffered social humiliation.-. (2) When it comes to contracts of common carriage. he cannot recover moral damages for such breach of contract since it does not fall under any of the cases where moral damages are recoverable under Art. So it is. The relation between CC and passenger involves special and peculiar obligations and duties. differing in kind and degree. transpo charges Liability of air carriers for moral and exemplary damages.-(1) lost income. injurious language. execution and enforcement of contract of carriage.Where the CC is guilty of a breach of contract. 2219 xxx In determining the amount of moral damages.

partnership. (4) All laws. 1766. (New Civil Code.) There is now no distinction between a transportation contract of a CC under the Civil Code and a transportation contract under the Code of Commerce The New Civil Code does not expressly repeal the provisions of the Code of Commerce on overland transportation. executive orders. An independent civil action based on quasidelict against the ER-operator of a negligent driver cannot be suspended by the filing of a criminal action against the driver. but all of them shall bear the name of the carrier. 352. loan. deposit and guaranty. PAGE 48 . In all matters not regulated by this Code. injuries and even death to all aboard the plane. Acts. D. agency. The reason for its noninclusion in the Code of Commerce was that at the time of its promulgation. CODE OF COMMERCE PROVISIONS ON OVERLAND TRANSPORTATION COMMERCIAL CONTRACTS FOR TRANSPORTATION OVERLAND A. xxx [KLM vs CA] A provision in passage ticket that carriage by successive air carriers is to be regarded as a single operation makes the ticket-issuing carrier liable for tortious conduct of other carriers xxx Exemplary damages may be awarded where the vehicle involved in the accident operated under the kabit system. prejudice. Subject Matter Art. III. no matter what its object may be. lapse or neglect thereof will certainly result to the damage.) Art. 2. with such other statements which may be necessary for their easy identification. the point of departure and arrival.TRANSPORTATION AND MARITIME LAW [PAL vs CA. the date of shipment. Contract of Carriage 1. Indemnification in a criminal prosecution is distinct from that awarded as damages in a civil action. the number and weight of the packages. xxx The CC is liable for the negligence of his driver in case of breach of contract and cannot avail of the defense that he exercised due diligence in the employment of his driver. Nature of Contract A bill of lading may defined as a written acknowledgment of the receipt of goods and an agreement to transport and to deliver them at a Art. (Ibid. Death of driver is not a hindrance to a separate quasi-delict action against the CC-employer There is no error in awarding civil damages against a driver in a criminal case even when a separate civil action was filed against the ER. and crew members alike. rules of court. the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. When it involves merchandise or any object of commerce. and administrative regulations which are inconsistent with this Code. The following laws and regulations are hereby repealed: (2) The provisions of the Code of Commerce governing sales. it makes such provisions suppletory to the provisions of the Civil Code on CCs. Culpa contractual and an act or omission punishable by law are two distinct sources of obligation. Any omission. C. xxx CC is liable for nominal damages for its failure to bring passengers to their destination which is in violatin of their right as passengers. one for persons and another for baggage. the carrier is a merchant or is customarily [habitually] engaged in transportation for the public. xxx An action for damages against CC for breach of contract is primary and independent and does not depend upon the previous conviction of the driver or EE. Responsibility for negligence under the Civil Code is entirely separate from negligence under the Penal Code. Effect of Civil Code Art. and with regard to the baggage. Requisites for a contract of transportation by land or water to be commercial : (1) transportation of merchandise is always commercial (2) transportation of person or news is commercial only when the CC is a merchant or is habitually engaged in transportation for the public * principal requirement : the CC is a merchant or is habitually engaged in transportation for the public. passengers. When. The bills of lading or tickets in cases of transportation of passengers may be diverse. A contract of transportation by land or waterways of any kind shall be considered commercial: 1. parts of Acts. air transportation on a commercial basis was not yet known. the cost. The action for breach of contract imposes on the CC a presumption of liability upon mere proof of injury to the passenger. 349. the object carried is of little importance A contract of air transportation may be regarded as commercial since it is analogous to land and water transportation. 106 SCRA 391] The duty to exercise the utmost diligence on the part of the CC is for the safety of passengers as well as for the members of the crew or the complement operating the carrier. Bill of Lading (a) Definition. 2270. Other Principles : The offended party has the option between an action for enforcement of civil liability based on culpa criminal and an action for recovery of damages based on culpa aquiliana. which is a pernicious system in violation of law and which is in fraud of the traveling public which has a right to expect that the holder of the certificate of convenience be the one to actually operate his transport line. Scope of Overland Transportation B.

non-negotiable B/L . theft. it is in legal effect. received for shipment B/L . 350. it shall be sufficient that the bills of lading or the declarations of shipment furnished by the shipper refer. such title to the goods as the person negotiating the bill had or had ability to convey to a buyer in good faith for value 2. 8. title to the goods subject to the terms of any agreement with the transferor 2. or anything which can fairly be called delivery 6. Art. or to the order of any person named in such document 2. with the conditions inherent therein. through B/L . The place and time at which the delivery is to be made to the consignee. accident on validity of negotiation : not impaired where the person to whom the bill was negotiated paid value thereof in GF without notice of the breach of duty or loss. 4. A document of title is any document used in the ordinary course of business in the sale or transfer of goods. 3. (b) Form. either by indorsement or by delivery. surname.states that the goods have been received on board the vessels which is to carry the goods 8. stating their generic character. Contents Art. 7. It comprehends all methods of transportation.states that the goods have been received for shipment with or w/o specifying the vessel by which the goods are to be shipped. with respect to the rate. goods represented by such document. term and conditions of carriage may be omitted and simple reference be made to the tariff and regulations under which the transportation is to be made. custody B/L . (Art. the carrier must apply the rate of the merchandise paying the lowest. as against the transferor. 5. port B/L .issued by the CC to whom the goods have been delivered and the steamer indicated in the B/L by which the goods are to be shipped is already in the port where the goods are held for shipment Negotiation of Bills by delivery/ by indorsement Effect of fraud. a bill of lading A ticket issued by a carrier to a passenger is not only a receipt for the fare paid but is the contract between the passenger and the carrier. surname. and domicile of the shipper. any person to whom possession or custody of the bill has been entrusted by the owner Rights acquired: 1. 351. as proof of the possession or control of goods. which aims to have the greatest number of transactions in the last possible time especially in cases where there are tariffs or regulations issued by the carrier company. and special conditions of the transportation.where it is stated that the goods will be delivered to the bearer. accident. the application of which he requests. if any agreement is made on this point. foul B/L . right to notify the CC who issued the bill and thereby acquire the direct obligations of such CC to hold possession of the goods for him accdg to the PAGE 49 . The name. always including such statement or reference to them in the bill of lading which he delivers to the shipper. issued when conditions are not normal and there is an insufficiency of shipping space 9. The damages to be paid by the carrier in case of delay. on board B/L .covers goods that have already been delivered by the CC without a surrender of a signed copy of the B/L. and the external marks or signs of the packages containing the same. the circumstances relative to price.indicates that the goods covered by it are in bad condition 5. or authorizing or purporting to authorize the possessor of the document to transfer or receive. 351) The form of the bill of lading is not material : if it contains an acknowledgment by the carrier of the receipt of goods for transportation. the subsequent delivery of the spent B/L cannot give to the buyer of it any actual control of the goods. surname. and should no schedule be determined. The place of the delivery to the carrier. clean B/L .TRANSPORTATION AND MARITIME LAW specified place to a person named or on his order. their weight. spent B/L . Many of the items required in a bill of lading may be omitted with much advantage to commerce. The shipper as well as the carrier of merchandise and goods may mutually demand of each other the issuance of a bill of lading in which there shall be stated: 1. In this case. negotiable B/L .issued by the CC 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. duress or conversion Who may negotiate? owner. of the passenger's right to ride in the CC's vehicle Classes of bills of lading : 1.issued by the CC to whom the goods have been delivered for shipment but the steamer indicated in the B/L which is to carry the goods has not yet reached the port where the goods are held for shipment 10. fraud. direct obligation of the CC issuing the bill to hold possession of the goods for him according to the terms of the B/L as fully as if such CC contracted directly with him Transfer of non-negotiable B/L Rights acquired: 1. terms. The cost of the transportation.where the goods are to be delivered to a specified person 3. The name. which B/L is honored by the subsequent interested carriers who do not issue their own ladings 7. Nature : (1) each bill is a contract in itself and the parties are bound by its terms (2) a bill of lading is also a receipt (3) it is also a symbol of the goods covered by it A bill of lading is also a document of title. or whether they are to be delivered to the bearer of the said bill. and domicile of the person to whom or to whose order the goods are addressed. The name. to the schedules and regulations.does not indicate any defect in the goods 4. The date of which the shipment is made. 6. mistake. In transportation made by railroads or other enterprises which are subject to schedules or the time fixed by regulations. and domicile of the carrier. 9. A description of the goods. 2.

In case the consignee. the disputes between the parties shall be decided accdg. and at the place indicated for receiving the merchandise PAGE 50 .TRANSPORTATION AND MARITIME LAW terms of the document. this receipt producing the same effect as the return of the bill of lading. If the declaration of the shipper should be correct. No bill of lading Art. cannot return the bill of lading subscribed by the carrier. The liability of the carrier shall begin from the moment he receives the merchandise. he shall give said carrier a receipt for the goods delivered. Bill not essential to contract : While under 350. it is to be regarded as merging all prior and contemporaneous agreements of the parties. the expenses caused by the examination and those of carefully repacking the packages shall be defrayed by the carrier. by the contents of which all disputes which may arise with regard to their execution and fulfillment shall be decided. always including such statement or reference to them in the bill of lading which he delivers to the shipper. 355. and the shipment is insisted on. it is not obligatory. If the CC has a well-founded suspicion of falsity in the declaration as to the contents of a package. the title of the transferee may be defeated by levy upon the goods or a subsequent purchaser from the transferor of a subsequent sale of the goods by a transferor (c) Function Art. although it may become obligatory by reason of the regulations of companies or as a condition imposed in the contract by agreement of the parties themselves Where no B/L is issued. and by virtue of the exchange of this title for the article transported. concealment or mistake. exception being made of the provisions of Article 366. no exceptions being admissible other than forgery or material errors in the drafting thereof. the examinations shall be made before a notary. When it commences Art. 354. The fact that a B/L is not issued does not preclude the existence of a contract of transpo. and in a contrary case by the shipper. to the rules laid down in Art. the bill of lading shall be returned to the carrier who may have issued it. due to its loss or for any other cause. the carrier should decide to examine it. when free from ambiguity cannot be explained nor added to by parol (Parol Evidence Rule) 2. the company shall carry them. In transportation made by railroads or other enterprises which are subject to schedules or the time fixed by regulations. railroads cannot refuse to carry them. 354 E. to the schedules and regulations. with respect to the rate. but they shall be exempt from all responsibility if their objections are made to appear in the B/L 3. Responsibility of the Carrier 1. CC cannot ordinarily refuse to carry a particular class of goods to the prejudice of the traffic in those goods exception : when the goods or packages are unfit for transportation --> if transpo is insisted upon. with the conditions inherent therein. there should be no limitations as to form. the carrier must apply the rate of the merchandise paying the lowest. in person or through a person entrusted therewith in the place indicated for their reception. for such purposes as may be proper. he may examine it --> he must follow the procedure under 357 4. the application of which he requests. upon receiving the goods. he shall do so before witnesses. Provided there is a meeting of the minds and from such meeting arise rights and obligations. who shall draft a certificate of the result of the examination. The responsibility of the CC commences from the moment he receives the merchandise --> the delivery must be made to him personally or through his duly authorized agent. The B/L is not essential to the contract. 351. 357. The legal basis of the contract between the shipper and the carrier shall be the bills of lading. the respective obligations and actions shall be considered canceled. Art. Doubtful declaration of contents Art. its terms or legal import. and if said transportation is to be made by railway. and in the absence of fraud. B/L constitutes the legal evidence of the contract of transportation --> all disputes between the parties regarding the execution and performance of the contract shall be decided by the contents of the B/L issued by the CC --> the law admits no exceptions other than falsity and material error in the drafting of the B/L As a contract expressing the terms and conditions upon which the property is to be transported. If by reason of well-founded suspicions of falsity in the declaration of the contents of a package. unless the same act the claims which the contracting parties desire to reserve are reduced to writing. 356. After the contract has been complied with. terms. in accordance with the general provisions established in this Code for commercial contracts. and should no schedule be determined. prior to notification of the CC. Should the shipper or consignee cited not appear. being exempt from all liability if its objections are so stated in the bill of lading. Refusal to Transport Art. in the presence of the shipper or of the consignee. and special conditions of the transportation. In the absence of a bill of lading the respective claims of the parties shall be decided by the legal proofs that each one may submit in support of his claims. 353. the shipper and the CC may mutually demand that a B/L is made. it shall be sufficient that the bills of lading or the declarations of shipment furnished by the shipper refer. Carriers may refuse to accept packages which appear unfit for transportation.

the carrier must select one which may be the shortest. (Ibid. CCs are presumed to have been at fault or to have acted negligently. they were at the time of their receipt. shall be for the account and risk of the shipper. (2) Act of the public enemy in war. besides paying the amount which may have been stipulated for such a case. by reason of accident. and the shipper-owner delivers them to the shipper in bad order and condition. When goods are delivered on board a ship in good order and condition. 1735. and should he do so without such cause.2. earthquake. 362 is in consonance with Art. or other natural disaster or calamity. Duty to deliver goods : duty to deliver the goods in the same condition in which accdg. The carrier. When on account of said force majeure the carrier is obliged to take another route. If. NCC --> except that under 1732. according to the bill of lading. the carrier shall proceed to their sale. Route Art. he shall be obliged to pay the value of the goods not delivered at the point where they should have been and at the time the delivery should have taken place. which is presumed Relate this with Art. 363. (New Civil Code. yet still the CC is responsible if the injury might have been avoided by the exercise of reasonable skill and attention on his part Art. and 5 of the preceding article. Therefore. force majeure. if the contrary was not expressly stipulated. notwithstanding the precaution referred to in this article. placing them for this purpose at the disposal of the judicial authority or of the officials determined by special provisions. lightning.TRANSPORTATION AND MARITIME LAW 2. unless the shipper committed fraud in the bill of lading. (4) The character of the goods or defects in the packing or in the containers. making him believe that the goods were of a class or quality different from what they really were.3. Burden of proof : the CC has the burden of proving that the injury was occasioned by one of the excepted causes The shipper then has the burden to prove that although the injury may have been occasioned by one of the excepted causes. shall be liable for the losses and damages arising from the causes mentioned in the foregoing article if it is proved that they occurred on account of his negligence or because he did not take the precautions usually adopted by careful persons. least expensive and practically passable 3. Art.4. 1733. The proof of these accidents is incumbent on the carrier. the CC shall be liable for losses due not only to the change of route but also to other causes. together with the indemnity agreed upon --> the CC may not avail of the contract limiting his liability in case of unjustified change of route Where there is no agreed route. however. 1734. the carrier may not change the route. and should he not do so. If there should be an agreement between the shipper and the carrier with regard to the road over which the transportation is to be made. The merchandise shall be transported at the risk and venture of the shipper. or by virtue of the nature or defect of the articles. without any damage or impairment. Delivery (a) Condition of Goods Art. 1734 and 1735 of the Civil Code Art.) Art. unless the same is due to any of the ff. 362 provides for the remedy of sale by the CC of the goods. 1735. proof of extra-o diligence is required and not just ordinary diligence as implied under 362 Where goods run risk of loss due to their nature. With the exception of the cases prescribed in the second paragraph of Article 361. all damages and impairment suffered by the goods during the transportation. or deterioration of the goods. to the B/L they PAGE 51 . storm. he shall be reimbursed for said increase after formal proof thereof. he shall be liable for any damage which may be suffered by the goods transported for any other cause whatsoever. the carrier shall be obliged to deliver the goods transported in the same condition in which. unless obliged to do so by force majeure. destruction.) 4. Where there is an agreed route. Common carriers are responsible for the loss. destroyed or deteriorated. (5) Order or act of competent public authority. when he proves that he cannot make use thereof without the others. (3) Act or omission of the shipper or owner of the goods. Care of Goods Article 361. 362. the goods transported run the risk of being lost on account of the nature or by reason of an unavoidable accident. it then devolves upon the shipowner to both allege and prove that the goods were damaged by reason of some fact which legally exempts him from liability The shipper will suffer losses and deteriorations arising from fortuitous event. 359. 1. whether international or civil. force majeure. or inherent nature and defects of the goods (at the risk and venture of the shipper) It does not mean that the CC is free from liability for losses and deterioration arising from his negligence or fault. In all cases other than those mentioned in Nos. if the goods are lost. causes only: (1) Flood. unless they prove that they observed extraordinary diligence as required in Art. placing them for the purpose at the disposal of the judicial authority or of the officials designated by special provisions Art. there being no time for the owners to dispose of the same. If part of the goods transported should be delivered the consignee may refuse to receive them. causing an increase in the transportation charges.

in the judgment of experts. requiring examination of bad order cargo by the ship's agent before removal from port authorities as condition precedent to an action for recovery cannot modify or add conditions to the B/L --> unreasonable and unfair in that it allows CC to avoid responsibility for the loss of or damage to their cargo when in packages or covered The purpose of short period for claiming damages : to afford the CC a reasonable opportunity and facilities to check the validity of the claims while the acts are still fresh in the minds of the person who took part in the transaction and the documents are still available. if he can prove that he cannot make use of them independently of those not delivered --> true solution depends upon the economic use which the goods transported have (consignee cannot be arbitrary and must justify his determination) Estoppel of shipper by laches : neglect or delay of shipper to demand immediately. the claim against the CC for damages must be made within 24 hours following the receipt of the merchandise In Case 2. without the damaged goods. without damage or impairment --> otherwise. If the effect of the damage referred to in Article 361 should be only a reduction in the value of the goods. the CC is liable for damages Partial delivery: The consignee may refuse to receive the goods delivered. The consignee may file a provisional claim : it is not necessary that such claim should state a detailed list of the loss or damage. Where damage renders the goods useless for sale and consumption for the purposes for which they are properly destined: 1. or after the transportation charges have been paid. the consignee may abandon all the goods to the CC who shall pay the corresponding damages 2. the return of the merchandise shipped or its value in case of non-delivery constitutes estoppel by laches Places the CC at a disadvantageous position to show that it had fulfilled what it had undertaken. in which case said claim shall only be admitted at the time of the receipt of the packages. 366 is modified by a B/L prescribing a longer period for filing of written claim with the CC or its agent The unilateral action of a CC in stamping a condition in the notice of arrival. unless the consignee proves the impossibility of conveniently making use thereof in this form. After the periods mentioned have elapsed. the consignee may abandon only the damaged goods --> but if the consignee can prove that it is impossible to conveniently use the undamaged goods in that form. this separation being made by distinct and separate articles. 366. Within the twenty-four hours following the receipt of the merchandise a claim may be made against the carrier on account of damage or average found upon opening the packages. the damage may either be (1) ascertainable only by opening of the packages.TRANSPORTATION AND MARITIME LAW were found at the time they were received. In case of damaged goods. demanding payment of their value at the current market price that day. 366 applies only to cases of claims for damage to goods actually turned over by the CC and received by the consignee The conditions under Art. on account of the damage. provided that the indications of the damage or average giving rise to the claim cannot be ascertained from the exterior of said packages. If. The same provision shall be applied to merchandise in bales or packages. with distinction of the packages which appear sound. after appraisal by experts. he shall have no right of action against the CC The CC may require in the B/L that the goods be examined at the time of delivery thereof --> the CC may likewise waive such right Art. no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. the obligation of the CC shall be reduced to the payment of the amount which. the goods are rendered useless for sale or consumption for the use for which they are properly destined the consignee shall not be bound to receive them. if the damage affects only some of the goods. the law authorizes the consignee to abandon all the goods Art. no object being divided for the purpose. 366 are not limitation of action but are conditions precedent to a cause of action --> if the shipper or consignee fails to allege and prove the conditions under 366. 364. or within a reasonable time. the claim must be made at the time of receipt The claim must be made before the payment of transportation charges ** otherwise. and the consignee shall receive those which are sound. makes it difficult for the CC to prove delivery Art. If among the goods damages there should be some in good condition and without any defect whatsoever. the foregoing provision shall be applicable with regard to the damaged ones. or (2) ascertainable from the outside part of the package In Case 1. constitute such difference in value --> subject of course to other damages under the NCC Art. 365. Where all the goods are delivered but damage is to such an extent that their value is diminished. they only have to contain descriptions of the shipments in question sufficient to have allowed the CC to make reasonable verifications of such claim --> the determination of the specific amount of damages claimed should be done carefully and without haste and these can be done only in a formal claim which will be filed after the provisional claim This stipulation is in the nature of a limitation upon the owner's right to recovery --> the burden of proof is on the CC to show that the limitation was PAGE 52 . no action for damages may be maintained against the CC When period begins to run : period begins to run when the consignee received possession of the goods such that he may exercise over it the ordinary control pertinent to ownership There must be delivery of the merchandise by the CC to the consignee at the place of destination --> Art. the obligation of the carrier shall be reduced to the payment of the amount of said reduction in value. if the damage affects all goods. and may leave them in the hands of the carrier.

Where period fixed for delivery : the CC must deliver the goods within the time fixed --> for failure to do so. the carrier shall be under the obligation to forward them in the first shipment of the same or similar merchandise which he may make to the point of delivery. where the consignee cannot be found at the residence indicated 2. the damages occasioned by the delay shall be suffered by him. and where the CC delivered the goods to another person who did not present the B/L. the CC shall pay indemnity stipulated in the B/L. damages shall be paid if the carrier refuses to pay the stipulated indemnity or is guilty of fraud in the fulfillment of his obligation (Art. The delivery must be made to the consignee Where the B/L is issued to the order of the shipper. Judicial deposit as a remedy: 1. 367. to be placed at the disposal of the shipper or sender. If a period has been fixed for the delivery of the goods. (New Civil Code. the latter must use proper and reasonable diligence to find him. The carrier must deliver to the consignee without any delay or obstruction the merchandise received by him.NCC) shall be ordered by the municipal judge. If there should occur doubts and disputes between the consignee and the carrier with regard to the condition of goods transported at the time of their delivery to the former. Should the consignee be not found at the domicile indicated in the bill of lading. neither the shipper nor the consignee being entitled to anything else --> however. and if the persons interested should not agree to the report of the experts and could not settle their disputes. and the parties interested shall make use of their rights in the proper manner. by the mere fact of being designated in the bill of lading to receive it. destruction or deterioration. and should he not do so. and if the consignee still cannot be found. it must be made within the same. without prejudice to a person having a better right. and in case of disagreement. the goods may be stored in a proper place and the CC will have performed his whole duty and shall be discharged from liability as a CC Failure to look for consignee and to give him reasonable notice shall make the CC liable for damages resulting from the delay in the receipt of the goods by the consignee --> apply 1738 on the liability of the CC even when the goods are deposited in its warehouse until after the consignee has been given reasonable notice and opportunity to remove the goods PAGE 53 . this deposit having all the effects of a delivery. or should refuse to pay the transportation charges and expenses. 367 shall govern --> expert opinion on the matter is not conclusive on the parties (b) To Whom Delivery Made Art. Even when there is an agreement limiting the liability of the CC in the vigilance over the goods. Art. he is a stranger to the contract) (c) Judicial Deposit Art. Should no indemnity have been agreed upon and the delay exceeds the time fixed in the bill of lading. the CC is under a duty not to deliver the merchandise except upon presentation of the B/L duly indorsed by the shipper. and should he not do so he shall be liable for the damages which may arise therefrom. If doubts and disputes should arise between the consignee and the CC with respect to the condition of the goods transported at the time of the delivery.) (d) When to be made Article 370. 368. he is entitled to reasonable notice from the CC of their arrival and a fair opportunity to take care of and remove them : if the consignee is unknown to the CC. there is no other recourse than to determine at what moment the right of the shipper to countermand the shipment terminates --> this moment can be no other than the time when the consignee or legitimate holder of the B/L appears with such B/L before the CC and makes himself a party to the contract (prior to that time. the carrier shall be liable for the damages which may have been caused by the delay. 358. where the consignee refuses to receive the goods Judicial deposit shall produce all the effects of delivery subject to third persons with better rights Duty to look for consignee : if consignee is not present. the result of the examination being reduced to writing. where the consignee refused to pay the transportation charges 3. 1752. such CC is liable for misdelivery --> duty to transport the goods safely and to deliver them to the person indicated in the B/L Misdelivery: Delivery to a person different from that indicated in the B/L --> different from non-delivery In case of conflicting orders of the shipper and the consignee (where one orders the return and the other orders the delivery of the goods). the deposit of said goods Art. 369. neither the shipper nor consignee being entitled to anything else. or to receive the goods. Should no period within which goods are to be delivered be previously fixed. otherwise the carrier shall pay the indemnity agreed upon in the bill of lading. the CC is disputably presumed to have been negligent in case of their loss. under the CC. said judicial authority shall order the deposit of the merchandise in a safe warehouse. Art. the said goods shall be examined by experts appointed by the parties. 1126. where there is no judge of first instance.TRANSPORTATION AND MARITIME LAW reasonable and in proper form or within the time stated (see Southern Lines vs CA) A a stipulation in the B/L providing for a shorter period than the statutory period within which to bring action for breach is valid --> does not in any way defeat the right to recover but merely requires that said right be asserted by action at an earlier period (filing of claims is different from filing of suits) Art. a third one appointed by the judicial authority.

stating the circumstances required by Articles 350 et seq. is liable for a conversion of the property --> the consignee may waive title to the property and sue for conversion and is entitled to the value of the goods at the time they should have been delivered to him --> subsequent tender of the goods by the CC is not available as a defense If there has been demand and the CC tenders the goods. The reservations made by the latter shall not however exempt them from the liabilities they may have incurred by reason of their own act. his sole remedy is an action for damages on account of the delay --> there can only be conversion if there has been demand and the CC refuses delivery The time for delivery when no period fixed : the CC shall be bound to forward them in the first shipment of the same or similar goods which he makes to the point where he must deliver them --> should he not do so. in which there shall be entered. 377. or after the transportation charges have been paid. (g) Compliance with administrative regulations Art. such as loss of profits on account of the delay or failure of deliver. he shall do so before witnesses. Right to Damages PAGE 54 . destruction or deterioration of the goods Where property in the hands of a CC is not delivered within a reasonable time after it has reached its destination. the damages caused by the delay shall be for his account Art. rules and regulations. the carrier should decide to examine it. Successive carriers shall assume the obligations of previous carriers but have a right of action against previous carriers is the latter are directly responsible for the fault giving rise to the claim of the shipper (f) Obligation to keep registry Art. when the CC has acted by virtue of a formal order of the shipper or consignee --> but the CC continues to be liable F. a natural disaster shall not free such carrier from responsibility. the contract limiting the CC's liability cannot be availed of in case of the loss. for the respective bills of lading. he must have notice at the time of the delivery of the particular circumstances attending the shipment and which would probably lead to such special loss if he defaulted (Mendoza vs PAL) If the CC incurs in delay in transporting the goods. If by reason of well-founded suspicions of falsity in the declaration of the contents of a package. the difference between the MV of the goods at the time when they should have been delivered. the CC shall be liable for the damages that the delay may have caused. After the periods mentioned have elapsed. the CC in the absence of any legal exemption and after demand has been made and delivery refused. If the carrier has acted in accordance with a formal order received from the shipper or consignee of the merchandise both shall incur liability. in progressive order of number and dates. The shipper and the consignee shall have an immediate right of action against the carrier who executed the transportation contract. Within the twenty-four hours following the receipt of the merchandise a claim may be made against the carrier on account of damage or average found upon opening the packages.g. A carrier who delivers merchandise to a consignee by virtue of agreements or combined services with other carriers shall assume the obligations of the carriers who preceded him. The carrier making the delivery shall also assume all the actions and rights of those who may have preceded him in the transportation. where the CC without cause delays the transportation of the goods. reserving his right to proceed against the latter if he should not be directly responsible for the fault which gives rise to the claim of the shipper or of the consignee. The CC is exempted from responsibility where his failure to comply arises from having been led into error by the falsehood on the part of the shipper in the declaration of the merchandise The shipper or consignee may become liable for noncompliance with govt. provided that the indications of the damage or average giving rise to the claim cannot be ascertained from the exterior of said packages. The carrier shall be liable for all the consequences arising from noncompliance on his part with the formalities prescribed by the laws and regulations of the public administration during the entire course of the trip and upon arrival at the point of destination. 358 is not violated when though the goods were not shipped on the train agreed upon. 373. they were shipped on another train which arrived earlier than the one agreed upon (e) Two or more carriers (a) Condition imposed on right Art. Art. or against the other carriers who received the goods transported without reservation.TRANSPORTATION AND MARITIME LAW If no indemnity has been stipulated and the delay exceeds the time fixed in the B/L. and the price at the time when they were delivered to which may be added reasonable expenses caused by delay A CC in GF may be held liable only for damages that were foreseen or might have been foreseen at the time the contract of transpo was entered into --> before a CC could be held liable for special damages. Transportation agents shall be obliged to keep a special registry. 357. the consignee cannot refuse to receive the goods and sue for conversion. 366. no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. Art. 378. in which case said claim shall only be admitted at the time of the receipt of the packages. all the goods the transportation of which is undertaken. except when his omission arises from his having been induced into error by false statements of the shipper in the declaration of the merchandise. with the formalities required by Article 36. Rights and Obligations of Shipper and/or Consignee 1. e.

3) : Provided there is no express agreement as to indemnity in the B/L and there is no fraud on the part of the CC. and in a contrary case by the shipper. Right of abandonment: Exceptional but limited right The right must be exercised during the intervening period between the moment when the fault of the CC produces a delay. and all other principal and accessory means of the CC in favor of the shipper --> this lien is a security for the payment of the value of the goods which the CC must pay in case of loss or misplacement Art. Right to abandon Art. by communicating such abandonment to the CC in writing PAGE 55 . Art. In cases of delay on account of the fault of the carrier. In case the consignee. unless the same act the claims which the contracting parties desire to reserve are reduced to writing. the damages shall not exceed such value --> subject to Civil Code provisions on damages in case of delay 2. vehicles. Effect of return of the B/L or giving of the receipt: The respective obligations and actions of the parties against each other shall be considered canceled. the expenses caused by the examination and those of carefully repacking the packages shall be defrayed by the carrier. and (3) reasonable. and not contrary to public policy. vehicles. destruction or deterioration of the goods to a degree less than extra-o diligence shall be valid. signed by the shipper or owner. who shall draft a certificate of the result of the examination. until the moment just before the arrival of the goods at the place of delivery. this receipt producing the same effect as the return of the bill of lading. After the contract has been complied with. Should the abandonment not occur the indemnity for loss and damages on account of the delays cannot exceed the current price of the goods transported on the day and at the place where the delivery was to have been made. and all the other principal and accessory means of transportation. Should the abandonment not occur the indemnity for loss and damages on account of the delays cannot exceed the current price of the goods transported on the day and at the place where the delivery was to have been made. The same provision shall be observed in all cases where this indemnity is due. as if they had been lost or mislaid.TRANSPORTATION AND MARITIME LAW in the presence of the shipper or of the consignee. NCC. as if they had been lost or mislaid. referred to in the foregoing articles. The same provision shall be observed in all cases where this indemnity is due. informing him thereof in writing before the arrival of the same at the point of destination. that the actual amount of the losses and damages suffered may be proved by the shipper against the carrier Par. Damages for delay (par. no proofs being allowed on the part of the shipper that there were among the goods declared therein articles of greater value. Should the shipper or consignee cited not appear. upon receiving the goods. the carrier shall satisfy the total value of the goods. and by virtue of the exchange of this title for the article transported. The value of the goods which the carrier must pay in case of their being lost or mislaid shall be fixed in accordance with what is stated in the bill of lading. and the goods have a known current price at the place and on the day they should have been delivered. informing him thereof in writing before the arrival of the same at the point of destination. 372. In cases of delay on account of the fault of the carrier. by the contents of which all disputes which may arise with regard to their execution and fulfillment shall be decided. the respective obligations and actions shall be considered canceled. although with respect to railroads said obligation shall be subordinated to the provisions of the laws of concession with regard to property and to those of this Code with regard to the manner and form of making attachments and seizures against the said companies. Horses. no exceptions being admissible other than forgery or material errors in the drafting thereof. When this abandonment occurs. The value of the goods stated in the B/L is conclusive between the parties and the shipper is not allowed to prove a higher value It is only when the CC's fault is so gross as to amount to actual fraud. shall be especially obligated in favor of the shipper. 353.) (c) Amount of damages for delay Art. due to its loss or for any other cause. he shall give said carrier a receipt for the goods delivered. 1744. 2 especially binds the horses. the carrier shall satisfy the total value of the goods. the consignee may leave the goods transported in the hands of the carrier. 371. A stipulation between the CC and the shipper or owner limiting the liability of the former for the loss. If the declaration of the shipper should be correct. which is the generative cause of the action. for such purposes as may be proper. provided it be: (1) in writing. (New Civil Code. When this abandonment occurs. the bill of lading shall be returned to the carrier who may have issued it. equipments. the examinations shall be made before a notary. exception being made of the provisions of Article 366. (2) supported by a valuable consideration other than the service rendered by the CC. vessels. vessels and eqpt. just. cannot return the bill of lading subscribed by the carrier. 366 (b) Amount of damages for loss Art. except where in the same act of return or giving of a receipt the claims of the parties be reduced to writing subject to the provisions of Art. and money. the consignee may leave the goods transported in the hands of the carrier. The legal basis of the contract between the shipper and the carrier shall be the bills of lading. referred to in the foregoing articles. 371.

on account of the damage. Art. Art. 374 . and in case of delay in making this payment. for the price of the contract and incidental expenses. and the consignee shall receive those which are sound. 365. and after said prescription the carrier shall have no further right of action than that corresponding to an ordinary creditor. exchanging it for another containing the novation of the contract. in case of partial non-delivery where the consignee proves that he cannot make use of the goods capable of delivery independently of those not delivered 2. 363. he shall be obliged to pay the value of the goods not delivered at the point where they should have been and at the time the delivery should have taken place. change the consignment of the goods delivered to the carrier. storage and other transportation charges In case of failure of the shipper. to answer for the freight. exchanging it for another containing the novation of the contract. The goods transported shall be specifically bound to answer for the transportation charges and for the expenses and fees caused by the same during their transportation. This special right shall be limited to eight days after the delivery has been made. be returned to him. the carrier may demand the judicial sale of the goods he transported to a sufficient amount to cover the transportation charges and the expenses incurred. If part of the goods transported should be delivered the consignee may refuse to receive them. Art. Art. be returned to him. Right to change consignment Art. 365. Obligation to pay transportation charges Art. Art. The consignees to whom the remittance may have been made may not defer the payment of the expenses and transportation charges on the goods that they received after twenty-four hours have elapsed from the time of the delivery. and the latter shall comply with his orders.creating a lien in favor of the CC on the goods transported --> 8 day period has been increased to 30 days by the NCC The purpose of the lien and time limit: Reciprocal to that established in favor of the shipper under Art. where the goods are rendered useless for sale and consumption for the purposes for which they are properly destined 3. unless the consignee proves the impossibility of conveniently making use thereof in this form. 363. no object being divided for the purpose. and until the time of their delivery.) Two sanctions for the enforcement by the CC of the payment of expenses and transpo charges : 1. where there is delay through the fault of the carrier 2. 372(par. if one were issued. according to the bill of lading. provided that at the time of making the change of the consignee the bill of lading subscribed by the carrier. goods or luggage. and should he not do so. 360. without changing the place where the delivery is to be made. and may leave them in the hands of the carrier. (New Civil Code. 3.judicial sale of the goods transported 2. claims or liens shall be preferred : xxx (9) Credits for transportation. 371. Art. 371 (2) --> subject to Civil Code Art. goods. With the exception of the cases prescribed in the second paragraph of Article 361. demanding payment of their value at the current market price that day. With reference to specific movable property of the debtor. with distinction of the packages which appear sound. 2241. The shipper may. Art. by which the CC is given a period relatively urgent pertaining to the said goods transported --> after the PAGE 56 . without any damage or impairment. The preference of the carrier to the payment of what is due him for the transportation and expenses of the goods delivered to the consignee shall not be affected by the bankruptcy of the latter. If among the goods damages there should be some in good condition and without any defect whatsoever. or luggage at public auction following the procedure under the law Art. Railroad corporations have the power to detain freight. Cases where consignee may abandon goods : 1. and the latter shall comply with his orders. 376. provided that at the time of making the change of the consignee the bill of lading subscribed by the carrier. they were at the time of their receipt. the goods are rendered useless for sale or consumption for the use for which they are properly destined the consignee shall not be bound to receive them. 2). 360. upon the goods carried. The expenses arising from the change of consignment shall be defrayed by the shipper. provided the action is brought within the eight days mentioned in the foregoing article. the CC has the power to sell such freight. change the consignment of the goods delivered to the carrier. if one were issued. the refusal to accept cannot be effective Damages for abandonment : Art. the carrier shall be obliged to deliver the goods transported in the same condition in which. when he proves that he cannot make use thereof without the others. this separation being made by distinct and separate articles. The expenses arising from the change of consignment shall be defrayed by the shipper. The shipper may. Art. 374. 375 . until their delivery and for thirty days thereafter. If. 375. Art. owner or consignee to pay for such charges. the foregoing provision shall be applicable with regard to the damaged ones.TRANSPORTATION AND MARITIME LAW Where these conditions do not concur. the ff. time limit rests on the necessity which the consignee must have for alienation of the goods. The same provision shall be applied to merchandise in bales or packages. without changing the place where the delivery is to be made.

his preference prescribes and his only remedy is by ordinary action The mere fact that the goods remain in the possession of the CC because they have not been removed by the consignee. 3. except where in the same act of return or giving of a receipt the claims of the parties be reduced to writing subject to the provisions of Art. Concept of Admiralty. That interest. Before trial could proceed. The liability of IH is predicated on the contract of carriage by sea between IH and Yaras & Co. In case the consignee. International Harvester vs Aragon 84 Phil 363 F: The S/S Belle of the Sea took on board in LA. embodied in the same complaint. provided that the claim is made w/in 30 days from date of delivery (NCC) 5. and costs.000). Jurisdiction over Admiralty Cases BP 129. either as contracts for a special and fixed transaction or as freight and transportation agents. cannot return the bill of lading subscribed by the carrier. the amount of the demand shall be the totality of the claims in all the causes of action. Obligation to return bill of lading Art. Held : It is clear from the complaint that IH is being held liable only on the assumption that the goods had been lost in transit or before being discharged at the pier. after the contract of transpo has been complied with. 379. The provisions contained in Article 349 et seq. In either case they shall be subrogated to the place of the carriers with regard to the obligations and liability of the latter. shall also be understood as relating to persons who. including the grant of provisional remedies in proper cases. the respective obligations and actions shall be considered canceled. he shall give said carrier a receipt for the goods delivered. Art. attorney's fees. or in Metro Manila where such personal property. irrespective of whether the causes of action arose out of the same or different actions. litigation expenses. contract to do so through others. where the value of the personal property. Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: (1) Exclusive original jurisdiction over civil actions and probate proceedings. 366 IV. Sec. par. 353 provides that he must give the CC a receipt of the goods delivered Effect of return of the B/L or giving of the receipt: The respective obligations and actions of the parties against each other shall be considered canceled. 353. and the right of the CC to demand the sale of the goods to satisfy the cost of transportation and other expenses. and by virtue of the exchange of this title for the article transported. 353.000). the amount of which must be specifically alleged: Provided. this receipt producing the same effect as the return of the bill of lading. After the contract has been complied with. or amount of the demand does not exceed Two hundred thousand pesos (P200. Under par. the International Harvester Inc. estate. by the contents of which all disputes which may arise with regard to their execution and fulfillment shall be decided. 105. The legal basis of the contract between the shipper and the carrier shall be the bills of lading. testate and intestate. Prohibition proceedings were instituted before the CFI of Manila to stop the judge from proceeding with the action. Sec. exclusive of interest. Of the entire shipment. in whatever form. damages of whatever kind. independently of the liability of the Manila Terminal Co.000) xxx. the B/L shall be returned to the issuing CC in exchange for the goods transported which are delivered to the shipper or consignee Where the consignee upon receiving the goods cannot return the B/L to the CC by reason of its loss or any other cause. Whether or not a contract is G. but not over nonmaritime contracts. as operator of an arrastre service. 33. the bill of lading shall be returned to the carrier who may have issued it. Applicability of Provisions Art. Art. ADMIRALTY AND MARITIME COMMERCE A. (IH) filed a motion to dismiss on the ground that the court had no jurisdiction. estate or amount of the demand does not exceed one hundred thousand pesos (P100. exception being made of the provisions of Article 366. piers under the supervision and custody of the defendant Manila Terminal Inc. litigation expenses. one carton of assorted samples with a stipulated value of P200 was not delivered to plaintiff Yaras and Co. PAGE 57 . wherever they were executed or are to be performed. goods for shipment to Manila and covered by B/L No. Metropolitan Trial Courts. The motion was denied. The S/S Belle of the Sea arrived in Manila and discharged her cargo at the govt. Admiralty has jurisdiction over all maritime contracts.TRANSPORTATION AND MARITIME LAW time has prescribed. upon receiving the goods. The petition was granted and the respondents now appeal. as agent of the S/S Belle of the Sea and Manila Terminal Inc. attorney's fees. That where there are several claims or causes of action between the same or different parties. 19. damages of whatever kind. and costs shall be included in the determination of the filing fees: Provided. Regional Trial Courts shall exercise exclusive original jurisdiction: xxx (3) In all actions in admiralty and maritime jurisdiction where the demand or claim exceeds one hundred thousand pesos (P100. as evidenced by the B/L. due to its loss or for any other cause. no exceptions being admissible other than forgery or material errors in the drafting thereof. although they do not personally effect the transportation of commercial goods. do not deprive the CC of its right to demand in a proper action the amounts owing to it by reason of the contract of transpo The bankruptcy of the consignee shall not cut off the preference of the CC. 2. BP 129. unless the same act the claims which the contracting parties desire to reserve are reduced to writing. as well as with regard to their right. The complaint charged that the merchandise was lost through the negligence of either of the defendants. The latter filed a complaint with the Municipal Court of Manila against International Harvester. further.

2. rights. etc. of Silay. The ownership of a vessel shall also be acquired by the possession thereof in good faith for three years. The contention of Yaras that the admiralty jurisdiction is not involved because the contract in question was made upon land and to be terminated upon land. Occidental Negros. The acquisition of a vessel must be included in a written instrument. offering their services to the public are common carriers --> governed primarily by the Civil Code provisions on common carriers and subsidiarily by the Code of Commerce and special laws The Code of Commerce regulates merchant ships or those engaged in the transportation of passengers and freight from one port to another or from place to another PAGE 58 . Yet notwithstanding these principles from which it would seem that any floating apparatus which serves directly for the transportation of things or persons or which indirectly is related to this industry. which shall not produce any effect with regard to third persons if not recorded in the registry of vessels. including floating docks. such as protest is nevertheless not necessary in the case at bar. whether evidenced by a B/L or a charter party. It is now well-settled in the latter country that the jurisdiction of admiralty in matters of contract depends upon the subject matter. merchant or war. are considered not only those engaged in navigation whether coastwise or high seas. scows. Lopez filed a complaint and sought damages amounting to P120.e. but on the subject matter of the contract. Specifically. uninterrupted possession for ten years shall be necessary in order to acquire ownership. but also floating docks. Vessels of minor nature. or floating structures of every kind without limitation. want of protest cannot prejudice a person not in a condition to make known his wishes. craft. A person who has suffered injuries like that of the plaintiff cannot be supposed to be in a condition to make a protest. hence the appeal. Meaning Lopez vs Duruelo 52 Phil 229 F: Augusto Lopez. wanted to embark on the interisland steamer San Jacinto bound for Iloilo.dredges. In order to board the steamer. Nature and acquisition of vessels Art. pontoons. Under the law. As a result. Held : Assuming that article 835 of the Code of Commerce states a condition precedent to the maintenance of an action in a case requiring protest. The word ship and vessel. and the provision of that section should not be held to include minor craft engaged only in river or bay traffic. such as river boats and those carrying passengers from ship to shore are governed as to their liability in passengers. It was also alleged that Jison was overloaded when it carried 14 passengers instead of its capacity for eight or nine. i. Vessels 1. This is the very case before us. A captain cannot acquire by prescription the ship of which he is in command. and other floating apparatus for the service of the industry or maritime commerce. The word "vessel" used in the section was not intended to include all ships. large or small. 865 is found was evidently intended to define the law relative to merchant vessels and marine shipping. because the respondent Yaras & Co. Said article cannot be applied to small boats engaged in river and bay traffic. the boat approached too near to the stern of the steamer wherein it was struck by the still turning propeller of the steamer. dredges. Vessels: Those engaged in navigation . whether coastwise or on the high seas.. they are not applicable to small craft which are only subject to administrative regulations in the matter of port service and in the fishing industry. In the absence of any of these requisites. Whether due to negligence or incompetence of Duruelo. two serious fractures of the bones of the left leg and a compound fracture of the left femur. a signification which does not differ essentially from its juridical meaning according to which vessels for the purpose of the Code of Commerce. admiralty has jurisdiction of a proceeding in rem or in personam for the breach of a contract of affreightment. pontoons. to the competent authority of the port where the accident occurred as provided under the Code of Commerce. seeks to recover from the petitioner IH the value of certain lost cargo. merely reflects the English rule which had long been rejected in the US. ought to be subjected to the principles of the Code with reference to ownership. by the Civil Code. The defendants assigned in it demurrer that the plaintiff did not show a right of action since the complaint did not allege that a protest had been presented by the plaintiff within 24 hours after the occurrence. Lopez was hospitalized from February 28 to October 19. The article is found in the section dealing with collisions and the context shows the collisions intended are collisions of sea-going vessels. And typical of a controversy over contracts of affreightment is a suit of one party against the other for loss or damage to the cargo. The steamer was anchored some half a mile from the shore or port of Silay. 1927 or eight months. 836.TRANSPORTATION AND MARITIME LAW maritime depends not on the place where the contract is made and is to be executed. CFI dismissed the complaint. B. the engineer of Jison aged 16. as alleged. and the vessels intended in that Book are such as are run by masters having special training with the elaborate apparatus of crew and equipment indicated in the Code. transfer. in their grammatical sense are applied to designate every kind of craft. the true criterion being that the contract has reference to maritime service or maritime transaction. making the locality the test. the CFI has jurisdiction over admiralty cases. But even if The Code Of Commerce was applicable. Merchant vessels constitute property which may be acquired and transferred by any of the means recognized by law. with a good title duly recorded.000 alleging that he suffered injuries due to the negligence and inexperience having only been in its third day of apprenticeship on the day of the accident. making the true criterion a maritime service or a maritime transaction. a protest still need not be made since under Art. 573. registrations. the nature and character of the contract and that the English rule which conceded jurisdiction only to contracts made upon and to be performed upon navigable waters. is inadmissible. scows and any other floating apparatus destined for the services of the industry or maritime commerce Vessels engaged in the business of carrying or transporting passengers or goods for compensation. The vessels intended in the Third Book of the Code of Commerce which deals with maritime commerce and in which Art. Lopes boarded the motor boat Jison at the landing which was then engaged in conveying passengers and luggage to and from the steamer. The boat sunk and Lopez was thrown into the water against the propeller wherein he suffered a bruise in the breast.

2) A vessel of 3 tons gross or less shall not be registered unless the owner shall so desire. and other similar matters.every sort of boat. such as. river boats and those carrying passengers from ship to shore. and (7) other means. NACIDA. certificates issued. vessels shall continue to be considered as personal property. Vessels exempt from Registration : AFP vessels.person. health. must be governed as to their liability to passengers. or transhipments from one vessel to another Vessels of a minor nature not engaged in maritime commerce. owner and agent of every such vessel to make application to the proper MARINA district office for registration thereof within 15 days after the vessel becomes subject to such registration. health service and harbor police vessels. (3) construction. or capable of being used. coast guard vessels. (6) succession.) 3. nor shall documents licenses of any kind be required for such vessel. natural or juridical. customs. The Phil. but they partake to a certain extent. by testate and intestate succession. the taking of the certificate of Philippine registry shall be optional with the owner. PD 761 as amended by PD 1064. and in consequence of certain contracts. pontoons. if the possession is otherwise. 3) All undocumented vessels shall be numbered in such form as may be prescribed by the Administrator. 802 (1) vessels . Rule III. If the vessel is of domestic ownership and of 15 tons gross or less. agencies. a depositary of the vessel The acquisition of a vessel must appear in a written instrument and such instrument must be registered in order that the transfer may affect third persons Art. vessels. The business of constructing and repairing vessels or parts thereof shall not be considered a public utility and no CPC shall be required thereof Art. not being transients of foreign registry. such as coast and geodetic survey. and in the case of corporations or associations which will engage in coastwise trade the president and managing directors thereof shall be such citizens xxx xxx an enterprise duly registered with the Board of Investments WON entirely owned by foreign nationals. towboats and other craft destined to other uses. as well as the issuance of all certificates. yachts. (5) donation. BOI. for military purposes. as Bureau of Commerce. Ownership and other real rights over property are acquired and transmitted by law. by the provisions of the Civil Code Modes of acquisition: (1) purchase and sale. Builders of vessels may employ the material and follow with regard to their construction and rigging the systems most suitable to their interest. 585.TRANSPORTATION AND MARITIME LAW The Code of Commerce does not refer to pleasure ships. of the nature and conditions of real property. as a means of transportation on water (2) duly registered . but the proper fee shall be charged for measurement when measurement is necessary. as now or may hereafter be required by law. a certificate of Philippine registry shall be issued for it. Domestic ownership means ownership vested in the citizens of the Philippines or corporations or association organized under the laws of the Philippines at least 60% of the C/S or capital of which is wholly owned by citizens of the Philippines. Registration. Ownership is acquired by occupation and by intellectual creation. registered with the proper govt. except in so far as may be prescribed by regulations of MARINA. Export Incentives Board or Oil Commission. floating storehouses. For all purposes of law not modified or restricted by the provisions of this Code. Marina Rules and Regulations: Subjects of Registration: 1) All vessels used in Phil. craft or other artificial contrivance used. 574. such as barter Possession in GF will ripen into ownership in 3 years. it shall be the duty of the master. 806. crafts engaged in the loading and the discharge of vessels. Ship owners and seamen shall be subject to the provisions of the laws and regulations of the public administration on navigation. waters. may register its own vessels xxx if such vessels are to be used exclusively to transport its own raw materials and finished products in Philippine waters as an incident to its manufacturing. sail boats and other water craft which are not motorized of less than 3 gross tons shall not be subject to the requirements of these rules and regulations relative to registration and navigation. scientific research and exploration. 1521 Sec. except when the same is engaged in towing or carrying of articles and passengers for hire. by tradition. on account of their value and importance in the world of commerce Art. fishing vessels. Sec. They may also be acquired by means of prescription. safety of vessels. and bancas. processing or business activity registered with the BOI and certified to by said Board as an essential element in the operation of the registered project. it will ripen into ownership in 10 years There can be no prescription in favor of the captain because the nature of the possession of the captain is such that he is only an agent of the owner. SEC. (New Civil Code. (4) capture. warships or patrol vessels. Coast Guard is vested with exclusive authority over the registration and documentation of Phil. by donation. Upon registration of a vessel of domestic ownership. vessels owned and/or operated by the AFP or by foreign govt. and of more than 15 tons gross. (2) prescription. Vessels are considered personal or movable property. To this end. shall be registered with the MARINA. distinctions Tariff and Customs Code. PAGE 59 . 712.

a certificate of ownership shall be issued for it 4.TRANSPORTATION AND MARITIME LAW licenses. or other documents necessary or incident to such registration The registration shall be effected at its home port or at the nearest Coast Guard district or station when the home port does not have such Certificates of Philippine register: upon registration of a vessel of domestic ownership and of more than 15 tons gross. as at present. Neither the owner of the vessel nor the agent shall be liable for the obligations contracted by the captain if the latter exceeds his powers and privileges inherent in his position or those which may have been conferred upon him by the former. who. in the Philippines coastwise trade and entitles it to the protection of the authorities and the flag of the Philippines in all ports and on the high seas. Rubiso vs Rivera 37 Phil 72 F: Defendant Rivera acquired by purchase the pilot boat Valentina on a date prior to that of the purchase and adjudication at public auction by plaintiff Rubiso. Shipowners and shipagents Art. 1900 which Act amended said article. pertain to foreign built vessels transferred abroad to citizens of the Philippines Certificates of ownership : upon registration of a vessel of more than 5 tons gross. so that the registration of a bill of sale of a vessel shall be made in the Insular Collector of Customs. are good as between the parties. Meanwhile. They were mortgaged to Po Pauco to guarantee a loan of P20. Art. However. the owner or agent shall be liable. But as against creditors of the mortgagor. 4 thereof. Defendant appealed. 587. 573 of the Code of Commerce in connection with Sec 2 of Act No. Judgment affirmed in part in the sense that as between Yu and PNB. Liability of shipowner and shipagent : PAGE 60 . It is now not necessary for a chattel mortgage of a vessel to be noted in the register of deeds. provided the creditors proves that the amount claimed was invested therein. an unrecorded mortgage is valid. Mortgages on vessels. This uncontradicted fact must be taken as curing the bank's defective title. 588.. register shall be issued for it The purpose of certificates of register of vessels : to declare the nationality of a vessel engaged in trade with foreign nations and to enable her to assert that nationality wherever found Privileges of certificate: It confers upon the vessel the right to engage.000. if the amounts claimed were made use of for the benefit of the vessel. since May 18. Significance of registration of transactions affecting vessels Presumption of ownership from registration : the presumption is that the person in whose name a vessel is registered has legal title thereto --> but such is not conclusive proof against the real owners It is essential that a record of documents affecting the title of a vessel be entered in the Philippine Coast Guard Arroyo vs Yu 54 Phil 511 F: The appeal of Yu relates to the preferences to the ten lorchas as between herself and the PNB. 1909. particularly Sec. By agent is understood the person entrusted with the provisioning of a vessel. Such registration is required both Art. Among the facts found by the trial judge is that they were owned by Lim Ponzo Navigation Co. Yu secured a judgment against Lim Ponzo Navigation Co. But it is essential that a record of documents affecting the title of a vessel be entered in the office of the collector of customs at a port of entry. equip. 1915 and in the commercial registry on March 4. or who represents her in the port in which she happens to be. The ship agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried. it is undeniable that defendant's rights cannot prevail over those acquired by plaintiff in the ownership of said boat. This is designed to protect persons who deal with a vessel on the strength of the record title. Po Pauco later mortgaged them in favor of PNB and registered with the register of deeds but was recorded in the Office of Collector of Customs much later. the latter has a superior right to its claim for P20. with the fulfillment of the duties of the commercial register concerning the registering of vessels. 1171 of AC has modified the provisions of the Chattel Mortgage Law. HELD : The requisite of registration in the registry of the purchase of a vessel is necessary and indispensable in order that the purchaser's rights may be maintained against a claim filed by a third person. Lower court decided for plaintiff. The owner of a vessel and ship agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair. 1915. However. 27. Art. C. In view of said legal provisions. a certificate of Phil. But the sale at public auction to Rubiso was recorded in the office of the collector of customs on Jan. we find an explanation of the delay of registration with the collector of customs-because of doubts entertained by the latter relative to the applicability of Act No. This was duly registered with the register of deeds. in as much as defendant's registration came after plaintiff's registration. The notice of seizure was recorded by the collector of customs of Iloilo on which date the records of the office disclosed the vessels as free from encumbrances. while the sale to Rivera was entered in the customs registry only on March 17. 3324 to a mortgage executed in 1918 in favor of a Chinese subject. 1915. consistently with law. but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freightage he may have earned during the voyage. and provision the vessel. has been performing the duties of the commercial registry in place of this latter official. 586. and set aside in part in the sense that the record is remanded for further proceedings. under the laws of the Philippines. HELD : Sec. Persons Participating in Maritime Commerce 1. The amendments solely consisted in charging the Insular Collector of Customs. and at the same time secures to it the same privileges and subjects it to the same disabilities as.000. That the collector did not perform his duty was no fault of PNB. although not recorded.

and may in his own name and in such capacity take judicial and extrajudicial steps in all that relates to commerce. and provisioning of the vessel in the port of departure shall bind the minority. attached or levied upon execution in her entirety for the private debts of a part owner. If the interests are equal. They shall likewise be liable in the same proportion for the expenses of maintenance. subject always to the right of pre-emption and redemption mentioned in Article 575. the disagreement shall be decided by a vote of the members. for the expenses which are incurred by virtue of a resolution of the majority. equipment. for damages in case of collision due to the fault. Art. A majority shall be the relative majority of the voting members. to the extent of the value of the vessel. provided that the amount claimed was invested for the benefit of the vessel (3) for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods transported. in general. details of equipment. which must be acquired by the other part owners after a judicial appraisement of the value of the portion or portions assigned. Art. The agent. 595. 593. and provisioning of the vessel. subject. Art. The agent may discharge the duties of captain of the vessel. in the proportion of their contribution to the common fund. its equipment and the freight Under 588. necessary for navigation. Art. for the acts of the captain (2) for contracts entered into by the captain to repair. The representation of the smallest part in the ownership shall have one vote. the shipowner and the shipagent are not liable for the obligations contracted by the captain if he exceeds his authority. The resolutions of the majority with regard to the repair. The agent shall select and enter into an agreement with the captain. for losses and damages occasioned to such cargo without prejudice to his rights against the owner of the ship. the matter shall be decided by lot. in case of disagreement the vote of the member having the largest interest shall be decisive. and if the vote should result in a tie. This association shall be governed by the resolutions of a majority of the members. 592. equip and provision the vessel. 826. nor make contracts for a new charter. for the results of the acts of the captain. subject to the provisions of the law of civil procedure unless the part owners unanimously agree otherwise.owners. offering equal conditions and price. If there should be only two part owners. but the proceedings shall be limited to the interest the debtor may have in the vessel. equipment. 594. Art. and shall contract in the name of the owners. A vessel cannot be detained. Art. If two or more co-owners request the position of captain. NCC. Art. Art. in all that relates to the requirements of navigation. armament. provisions. 590. be he at the same time an owner of a vessel or a manager for an owner or for an association of co. PAGE 61 . to the provisions contained in Article 609. The agent shall represent the ownership of the vessel. without interfering with her navigation. who shall be bound in all that refers to repairs. The resolutions of the majority relating to the dissolution of the association and sale of the vessel shall also be binding on the minority. in proportion to their respective ownership. The appointment of director or agent shall be revocable at the will of the partners. and proportionately the other part owners as many votes as they have parts equal to the smallest one. must be qualified to trade and must be recorded in the merchant's registry of the province. unless they renounce their participation therein. The sale of the vessel shall be made at a public auction. and. referred to in Article 587.TRANSPORTATION AND MARITIME LAW (1) under Art. the position shall be given to the part owner having the larger interest in the vessel. and should they have an equal interest it shall be decided by lot. and freight of the vessel. 1759. The agent cannot order a new voyage. or any other member of the complement The agent is liable to the shippers and owners of the cargo transported by it. The owners of a vessel shall have preference in her charter over other persons. Each part owner may exempt himself from this liability by the abandonment before a notary of the part of the vessel belonging to him. If two or more of the former should claim said right the one having greater interest shall be preferred. unless the amounts claimed were invested for the benefit of the vessel --> however under Art. If two or more persons should be part owners of a merchant vessel. in every case. 598. 589. an association shall be presumed as established by the part owners. and there should be a tie. 597. 596. If the interest of the petitioners should be the same. negligence. fuel. except collision with another vessel (5) under Art. it shall be decided by lot. Art. as well as for the safety of passengers transported (4) for damages to third persons for tort or quasi-delict committed by the captain. or want of skill of the captain. the ship owner is liable for the death of or injuries to the passengers which are caused by the negligence or wilful acts of his EEs although such EEs may have acted beyond the scope of their authority or in violation of the orders of the shipowner Art. 591. The co-owners of a vessel shall be civilly liable. All the part owners shall be liable. The part owners shall elect the manager who is to represent them in the capacity of agent. 857. sailing mate.

3. For the losses. No exception whatsoever shall exempt him from his obligation. the co-owners may demand of the managing agent the amount due them. 604. fines. 601. Art. discharge the captain and members of the crew whose contract did not state a definite period nor a definite voyage. 606. 607. at a meeting attended by the shippers or supercargoes who may be on board. after the action against the vendor has been instituted. Art. Art. health. unless there is an expressed and specific agreement in respect thereto. If a misdemeanor or crime has been committed he shall be liable in accordance with the Penal Code. they shall receive their salary until their return to the place where the contract was made. robbery. the captain shall be civilly liable to the ship agent and the latter is the one liable to third persons This article applies to PAGE 62 . Art. For those arising by reason of the nonobservance of the provisions contained in the regulations for lights and maneuvers for the purpose of preventing collisions. For all the damages suffered by the vessel and its cargo by reason of want of skill or negligence on his part. in the opinion of the officers of the vessel. by means of an executory action without further requisite than the acknowledgment of the signatures in the instrument approving the account. and without any indemnity whatsoever. In order to enforce the payment. In case of the voluntary sale of the vessel. he cannot be deprived thereof except for the reasons mentioned in Article 605. Should there be any profits. if he does not prove that he made full use of his authority to prevent or avoid them. If the contracts of the captain and members of the crew with the agent should be for a definite period or voyage.TRANSPORTATION AND MARITIME LAW nor insure the vessel. and confiscations imposed on account of violation of the laws and regulations of customs. paying them the salaries earned according to their contracts. Art. Art. and without further proceedings than the acknowledgment of the signatures of the persons who voted for the resolution. the latter should be insolvent. he may not be discharged unless the agent returns to him the amount of his interest therein. Before a vessel goes out to sea the agent may at his discretion. The managing agent of an association. 7. The vessel sold shall remain subject to the security of the payment of said indemnity if. 636 et seq. 602. 599. theft. If the captain should be a part owner in the vessel. Art. he should not have taken without sufficient cause. shall be appraised by experts appointed in the manner established in the law of civil procedure. 4. 6. the co-owners shall satisfy the expenses in proportion to their interest. If he should insure the vessel without authority therefor he shall be subsidiarily liable for the solvency of the underwriter. according to the agreements made with the agent. the managing agents shall be entitled to an executory action. The captain shall be civilly liable to the ship agent and the latter to the third persons who may have made contracts with the former 1. If the captain or any other member of the crew should be discharged during the voyage. 603. which shall be instituted by virtue of a resolution of the majority. For those arising by reason of a misuse of powers and nonfulfillment of the duties which pertain to him in accordance with Articles 610 and 612. Art. without prejudice to the civil or criminal actions which the minority may deem fit to institute afterwards. Art. For the losses and damages caused by mutinies on board the vessel. For those arising by reason of his voluntarily entering a port other than his destination. all in accordance with Art. 618 provides for the direct responsibility of the shipowner and shipagent to third persons. with the exception of the cases or without the formalities referred to in Article 612. without prejudice to always having the books and correspondence relating to the vessel and to its voyages at their disposal. 618. in the absence of an agreement between the parties. all contracts between the agent and captain shall terminate. reserving to the latter his right to the indemnity which may be proper. and damage caused to the vessel or to its cargo by malice or manifest or proven negligence. without the authority of her owner or by virtue of a resolution of the majority of the co-owners. For those arising by reason of his going out of his course or taking a course which. * Note : an executory action is no longer recognized in this jurisdiction Art. After the account of the managing agent has been approved by a relative majority. for the benefit of the vessel. 5. they cannot be discharged until the fulfillment of their contracts. Art. 608. The agent shall indemnify the captain for all the expenses he may have made from his own funds or from those of other persons. reserving his right of action against the guilty parties. shall give his co-owners an account of the results of each voyage of the vessel. Art. or by reason of faults committed by the crew in the service and defense of the same. which. police. If the captain who is a part owners should have obtained the command of the vessel by virtue of a special agreement contained in the articles of copartnership. except for reasons of insubordination in serious matters. unless there are good reasons for the discharge. 8. of this Code. and navigation. 2. habitual drunkenness. 600. unless these powers were granted him in the certificate of his appointment. For all the thefts and robberies committed by the crew. 605.

The money together with various merchandise belonging to plaintiff was to be carried from the port of Cebu to Catmon in Cebu. in captain's person. That night. his failure gave rise to liability for which the owner of the ship must answer. the shipowner and that party may validly stipulate that the latter shall be exempt from liability for the negligence of the captain and crew Reason for imposition of liability on owner for damages suffered by third persons occasioned by the acts of the captain: To place the primary liability upon the person who has actual control over the conduct of the voyage and who has the most capital embarked in the venture. the shipowner. As to the liability of Lauron. leaving him to obtain recourse. from other individuals who have been drawn into the venture as shippers The shippers and passengers in making contracts with the captain do so through the confidence they have in the shipowner who appointed him --> they presume that the owner made a most careful investigation before appointing him Distinction between liability for lawful and unlawful acts : The lawful acts and obligations of the captain beneficial to the vessel may be enforced as against the agent/owner for the reason that such obligations arise from the contract of agency ( provided that the captain does not exceed his authority) As to any liability incurred by the captain through his unlawful acts. the latter shall use it in conveying cargo. by steam vessels navigating coastwise and inland waters. are civilly liable for the acts of the master. Code is to place primary liability upon the person who has actual control over the conduct of the voyage and who has most capital in the venture. namely. by Reus in Commentaries on the Code of Commerce. This rule. It was found at the trial that Ipil and Solamo were negligent in guarding the money because they were sound asleep at the time of the theft and they assigned no one to stand guard during the night. respectively. the shipowner shall be civilly liable to third persons when the captain of the vessel PAGE 63 . the shipowner. 587 and 618. It is universally recognized that the captain is the representative of the owner and both under Art. for failure to follow international rules and regulations. first made during the days of sailing vessels has changed and it is now generally held that jettisoned goods carried on deck. the theft not being a fortuitous event or of force majeure and they being manifestly negligent and at fault. (a) Responsibilities and liabilities Yu Con vs Ipil 41 Phil 770 F: Yu delivered to Ipil and Solamo P 450 for delivery from Catmon to Cebu aboard a banca named Maria of which Lauron was the owner and Ipil and Solamo. the window of the stateroom in which the trunk containing the money was kept was broken through by persons not identified and through which the said trunk was stolen. The owner of the ship ordinarily has vastly more capital embarked upon a voyage than has any shipper of cargo. if any. 586 of the Code of Commerce. from other individuals who have been drawn into the venture as shippers.Antwerp Rules. but the remainder was wholly lost. compelling the captain to jettison the petroleum. owner of the interisland steamer Batangueno. in coastwise trade. was a "vessel" under Mercantile Law and the Code of Commerce. Plaintiff brought action to recover the petroleum value against the shipowner. the master of the banca. dissenting : Action for recovery. CFI rendered judgment for plaintiff. for failure to take the precautions to prevent every damage possible to the vessel which has suffered an average Standard Oil vs Castelo 42 Phil 256 F: Castelo. The reason for this. leaving him to obtain recourse. as it is very easy to do. in the execution of his employment --> he does not respond for personal injuries of the crew arising from personal quarrels but he is liable for damages to persons or property occasioned by a maneuvering of the vessel. The CFI held Ipil and Solamo negligent and held Lauron liable as ER and shipowner under Articles 586. the ship made port and 13 cases of petroleum were recovered. Held : Ordinarily. Plaintiff delivered petroleum which was placed on deck. with the result that the coasting vessel can use more circumspection about the condition of the weather at departure time. It is therefore proper that any person whose property may have been cast should have a right of action directly against the shipowner for breach of duty which the law imposed on the captain with respect to such cargo. the ship agent is simply subsidiarily liable Liabilities of captain: the responsibility of the captain extends to every fraudulent or negligent act of any person in the complement. and Avancena. The money was placed by Yu in his trunk and was transferred to that of Ipil. has complete and exclusive control of the crew and ship navigation. It is evident therefore. according to the customs of trade. as carriers and depositories of the money were liable under the Civil Code. Held : Ipil and Solamo. Their defense was that Yu chartered and had control and responsibility of the banca and that the theft was due to Yu's negligence. that the crew should be supplied by the owner. should be brought not against the defendant owner but against the captain thereof. the loss of cargo carried on deck shall not be considered as general average loss. is that boats are small and voyages are short. was also held to be the captain (masters are to small vessels as captains are to big ones). and by Blanco) we hold that the banca "Maria" chartered by Yu Con from Lauron. When the storm abated. When jettison of cargo occurs. the SC proceeded by first defining the banca "Maria" as within the meaning of the term "vessel. Araullo. the owner of the ship. are entitled to contribution as general average loss. according to the foregoing definitions (by the Mercantile Code. The evident intention of the Com. it is the duty of the captain to effect the adjustment. liquidating and distribution of the general average.TRANSPORTATION AND MARITIME LAW breaches of contract and tortious negligence of the captain But where the vessel is totally chartered for use of a single party. Under Arts. and that the charterer should have no control over the captain and crew than to specify the voyages." Thus. Defendant is therefore liable. 587 and 618 of the Code of Commerce. While the steamer was on her way. as expressed in the York. contracted with Chumbuque stipulating that for a term of one year. the master and supercargo. namely. that the loss of the petroleum is a general average with the result that plaintiff is entitled to recover an amount bearing such proportion to its total loss as the value of both ship and cargo bears to the value of ship and entire cargo before jettison was effected. Ipil. a typhoon came. Moreover.

laden with cargoes and passengers left Zamboanga City bound for Siokon under the command of Faustino Macrohon. The international rule is to the effect that the right of abandonment of vessels. In fact it is a general principle well established in the maritime law and custom.m. through his fault or negligence. On the same night. Held : (1) While it is true that plaintiff's action against petitioner is based on a tort or quasi-delict. 587. M/L Consuelo V capsized. as a legal limitation of a shipowner's liability. governed by Arts. Among her passengers were plaintiff Insa Abdulhaman. and their 5 kids. of her equipment. liability arising from the conduct of the captain in the vigilance of the goods and for the safety of the passengers and for any liability arising from the negligent or illicit acts of the PAGE 64 . The owner of a minor craft who has equipped and victualed it for the purpose of using it in the transportation of merchandise from one port to another is under the law a shipowner and the master of the craft is to be considered as its captain in the legal acceptation of this word. and the latter is the one liable to third persons. In maritime commerce. It is easy to see that to admit the defense of the diligence of a bonus pater familias in the selection and vigilance of the officers and crew as exempting the shipowner from any liability for their faults. 827 for the greater protection of injured parties. may occur to the merchandise or effects delivered to him for their transportation as well as for the damages suffered by those who contracted with him. owned by Lim Hong To. both vessels collided. Thre (3) cases where the loss of the vessel extinguishes the liability of the shipowner: (1) under 587.. exempted Lim from liability by reason of the sinking and total loss of his vessel. would render nugatory the solidary liability in Art. and the former must be held civilly liable for indemnities in favor of third parties to which the conduct of the master/captain may give rise in the custody of the effects laden on the craft. M/L Consuelo V. and for all losses which. (2) It is to be noted that Macrohon was not duly licensed as a shipmaster and Lim knew of this fact when it hired the former. A shipagent is liable notwithstanding the insolvency of the principal/owner BUT the ship agent may exempt himself from liability by abandoning the vessel with all her equipment and the freight it may have earned during the voyage --> the effect of abandonment is to extinguish the liability of the shipagent The ship agent's liability is confined to that which he is entitled as a matter of right to abandon : the vessel with all her eqpt. the tort in question is not a civil tort under the Civil Code but is a maritime tort resulting in a collision at sea. 587. 618 of the Code of Commerce. without any warning to the resting passengers. however. The ship agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried. 587) has been declared to exist not only in the case of breached contracts but also in cases of tortious negligence. thus deliberately increasing the risk to which the unknowing passengers would be subjected.TRANSPORTATION AND MARITIME LAW causes the damage or loss to goods entrusted to him by said third persons under a contract to carry said goods. were navigating from Maribojoc towards Zamboanga City. resulting in the death of Abdulhaman's five children. The above facts found by the Board of Marine Inquiry. To hold. while the owners of both colliding vessels are solidarily liable for damages caused. his wife. but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freightage he may have earned during the voyage.784 as damages. and freight money earned --> results in the cessation of the responsibility of the owner/agent Abandonment cannot be refused by creditors This applies to all cases where the owner/agent may be held liable for the negligent or illicit acts of the captain Effect of loss or destruction of vessel: The shipagent's liability is merely co-extensive with his interest in the vessel such that the total loss thereof results in its extinction --> the total destruction of the vessel extinguishes a maritime lien as there is no longer any res to which it can attach. 826-939 of the Code of Commerce. in consequence of misdemeanors and crimes committed by him or by the members of the crew of the craft. This direct liability moderated and limited by the owner's right of abandonment of the vessel and earned freight (Art. Manila Steamship vs Abdulhaman 100 Phil 32 F: At around 7 p. 586) and for the indemnities due to the third persons (Art. it is well and god that the shipowner be not held criminally liable for such crimes or quasi crimes but he cannot be excused from liability for the damage and harm which in consequence of those acts may be suffered by the third parties who contracted with the captain in his double capacity of agent and subordinate of the shipowner himself. The CA. that Lim may limit his liability to the value of his vessels. that shipowners and shipagents are civilly liable for the acts of the captain (Art. 587). therefore be identical to that of a shipowner who bears in mind the safety of the passengers by employing duly licensed officers. cannot. Hence. does not apply to cases where the injury of the average is due to shipowner's own fault. under which the captain shall be civilly liable to the ship agent. The liability of Lim. as the CA had done. was used by the CFI to hold the owners of both vessels solidarily liable to Abdulhaman for P 20. (b) The doctrine of limited liability * Doctrine of limited liability is provided for in Arts. At around 10 PM. This direct responsibility is recognized in Art. and the freight it may have earned during the voyage and to the insurance thereof Limited liability is not applicable when no abandonment of vessel is made Effect of abandonment: An abandonment amounts to an offer of the value of the vessel. questioning the exemption of Lim while also alleging its exemption having had exercised due diligence in the selection of its EEs. is to erase all differences between compliance with law and the deliberate disregard thereof. The weather then was considered fair. the M/S Bowline Knot owned by the Manila Steamship Co. the shippers and passengers in making contracts with the captain do so through the confidence they have in the shipowner who appointed him. Thus. this petition by the Manila Steamship Co. 590 and 837 Art.

The boat was overloaded with cargo and passengers (180 instead of only 123). and by necessary implication. even assuming that Yangco is liable for breach of contract because his relationship to the passengers rests on a contract of carriage. However. After two weeks of sailing. the sea became too dangerous. its liability for repairs remains unaffected by the loss of the thing Reason for limited liability: This doctrine had its origin when maritime trade and sea voyage was attended by innumerable hazards and perils --> to offset against these adverse conditions and to encourage shipbuilding and maritime commerce. who was a machinist on board the M/S Bartolome S. Petitioner is absolved from all complaints. The widows were awarded compensation under the Workmen's Compensation Act by the CFI. 587 accords a shipowner or agent the right of abandonment. The captain was duly advised and his attention was called by the passengers that typhoon Signal No. for injuries caused by the collision over and beyond the value of the said vessel. Whether the abandonment of the vessel sought by the petitioner in instant case was in accordance with law or not. Rosario Oching is the widow of Francisco Oching. if any Limited liability is evidence of the real and hypothecary nature of maritime law: (1) limitation of liability to the actual value of the vessel and freight. the former having caused the vessel to sail without licensed officers. who was the captain of the M/S Bartolome S. As evidence of this real nature. I shall assume full risks and responsibility for all consequences. a big wave caught them on the side causing it to capsize. as a legal limitation of a shipowner's liability does not apply to cases where the injury or the average is due to shipowner's fault. Operating with an unlicensed shipmaster constitutes such negligence as would prevent the shipowner from claiming the benefit of limited liability under Art. any act of abandonment would be an idle ceremony. Salvacion and Oching while acting in their capacities perished in the shipwreck. the CFI held Yangco liable for a total of P3. Held : Art.the vessel with all her equipments and the freight it may have earned during the voyage. The 2 ships. this right of abandonment of vessels. The captain ordered that they return to Romblon and while turning. Abueg vs San Diego 77 Phil 730 F: Bartolome San Diego was the owner of 2 motorships. After the rendition of the judgment." Hence. the vessel was not insured. eqpt. In this case. Thus. Held : The real and hypothecary nature of the liability of the shipowner or agent embodied in the provisions PAGE 65 . The CA affirmed the judgment. Yangco vs Laserna 73 Phil 330 F: Petitioner Yangco's vessel SS Negros left Romblon for Manila. The vessel having totally perished. his liability is confined to that which he is entitled as of right to abandon -. Among the passengers who perished were the relatives of respondents Laserna. Marciana de Salvacion is the widow of Victoriano Salvacion. liability for collision Exceptions: (1) Doctrine does not apply where shipowner is at fault : the doctrine is premised on the condition that the death or injury to the passenger occurred by reason of the fault or negligence of the captain only (2) Doctrine does not apply in cases of Workmen's Compensation --> such compensation has nothing to do with maritime commerce.TRANSPORTATION AND MARITIME LAW captain for which the shipowner or ship agent may be held liable (2) under 643. this is a mere deficiency of language and in no way indicates the true extent of such liability. But the boat proceeded to sail after some loading. were caught by a typhoon as a consequence of which they were sunk and totally lost. who was a machinist on board the M/S San Diego II. In the application for permission to operate. we have (1) the limitation of the liability of the agents to the actual value of the vessel and the freight money and (2) the right of the maritime creditor to retain the cargo.180. if any. In other words. The reason for the limited liability is the real and hypothecary nature of maritime law as distinguished from civil law and mercantile law in general. "that in case of any accident. San Diego II and Bartolome S. Lim cannot escape liability because of the sinking of the vessel. Lim Hong To even declared expressly. Nunez. The vessels were not covered by any insurance. the exclusively real and hypothecary nature of maritime law still operates to limit his liability to the value of the vessel or to the insurance thereon. Dionisia Abueg is the widow of Amado Nunez. Thus. and freight or insurance. or loss. Yangco sought to abandon the vessel to plaintiffs/respondents with all its equipments. the benefit of limited liability applies in all cases (as regards both goods and passengers of the vessel) wherein the shipowner or agent may properly be held for the negligent or illicit acts of the captain. and the embargo and detention of the vessel in cases where the ordinary civil law would not allow more than a personal action against the debtor or person liable. liability for the wages of the captain and the crew and for advances made by the shipagent if the vessel is lost by shipwreck or capture (3) under 837. despite lack of trained crew. even to the prejudice of a third person Manila Steamship vs Abdulhaman 100 Phil 32 Issue : How is the doctrine of limited liability applied in this case with M/V Consuelo? Held : The direct liability may be moderated or limited by the shipowner's right to abandon the vessel and earned freight. it is an item in the cost of production which must be included in the budget of any well-managed industry (3) Total destruction of the vessel does not affect the liability of the owner for repairs on the vessel completed before its loss --> owners of a vessel are liable for necessary repairs. to wit. it was deemed necessary to confine the liability of the owner or agent arising from the operation of a ship to the vessel. 2 was up. (2) right to retain the cargo and the embargo and detention of the vessel in cases where the ordinary civil law would not allow more than a personal action against the debtor or personal liable -> the maritime creditor may attach the vessel itself to secure his claim without waiting for a settlement of his rights by a final judgment. In the separate civil action for damages for the death of the passengers. the owner of Consuelo is solidarily liable with Manila Steamship. Although the article appears to deal only with the limited liability of shipowners or agents for damages arising from the misconduct of the captain in the care of the goods which the vessel carries. damage. Abandonment was denied. thereof. while engaged in fishing operations around Mindoro Island on October 1941. 587. such liability is limited to the value of the vessel and other things appertaining thereto such that a total loss thereof results in its extinction. is immaterial.

moral damages. If an accident is compensable under the WCA. the condition of laborers and EEs. Maritima shares equally in his negligence. had its origin in the prevailing conditions of the maritime trade and sea voyages during the medieval ages. 587 does not apply. (c) Specific rights and prerogatives Art. His wife and his children were among the casualties. his liability was extinguished. An important device such as the radar could have enabled the ship to pass through the river and to safety. equipment. and freight. the loss of lives as a result of the drowning of some passengers. In allowing the ship to depart late from Manila despite the typhoon advisories. and aims at the amelioration of. Art. The officers of motor ships engaged in fishing are industrial EEs and are entitled to the benefits of the Workmen's Compensation Act. 587 of the Code of Commerce. or the heirs and dependents of such laborers and EEs in the event of death caused by their employment. with the intention of living in Aklan permanently. To offset against these adverse conditions and to encourage shipbuilding and maritime commerce. Art. a shipowner or agent has the right of abandonment. Part owners of vessels shall enjoy the right of pre-emption and redemption in the sales made to strangers. Maritima presented evidence of the seaworthy condition of the ship prior to its departure. The shipowner alleged that no negligence was ever established and in fact they took all the necessary precautions in operating the vessel. 587 of the Code of Commerce. it must be compensated even when the workman's right is not recognized by or is in conflict with other provisions of the Civil Code or Code of Commerce. and freight. 594. Heirs of Amparo de los Santos vs CA 186 SCRA 649 F: M/V Mindoro owned by Compania Maritima sailed from Manila bound for New Washington. Under this provision. The reason is that the WCA was enacted in abrogation of existing laws. Maritima could not be held liable in damages based on the principle of limited liability of the shipowner or shipagent under Art. Such a situation will be covered by the Civil Code provisions on CCs. The Board of Marine Inquiry found that the captain and some officers of the crew were negligent in operating the vessel and imposed upon them a suspension and/or revocation of their license certificates. 575. 587 speaks only of situations where the fault or negligence is committed solely by the captain. actual damages and attorney's fees. causing the death of many of its passengers. including the relatives of the plaintiffs. The CFI dismissed the complaint in view of lack of sufficient evidence. The part owners shall elect the manager who is to represent them in the capacity of agent. While the captain was negligent for overloading the ship. The present controversy centers on the questions of Maritima's negligence and of the application of Art. PAGE 66 . Maritima's claim that it had no information of typhoon Welming until after the boat was at sea is untenable in light of modern technology which enables it to detect any incoming atmospheric disturbances. Maritima's lack of EO diligence coupled with the negligence of the captain were the proximate causes of the sinking of M/V Mindoro. Said vessel met typhoon Welming on the Sibuyan Sea. Said Act creates a liability to compensate EEs and laborers in cases of injury received by or inflicted upon them. Art. Furthermore. while engaged in the performance of their work or employment.000. Owing to the nature of their business and for reasons of public policy. although about 136 survived. But it could not present evidence that it specifically installed a radar which could have allowed the vessel to navigate safely for shelter during the storm. equipment. 593.TRANSPORTATION AND MARITIME LAW of the Maritime Law. so that if the shipowner or agent abandoned the ship. Held : There is no dispute as to the finding of the captain's negligence.the vessel with all her equipments and the freight it may have earned during the voyage. It was ordered to pay death indemnities to the heirs of the victims. Maritima displayed lack of foresight and minimum concern for the safety of its passengers taking into account the surrounding circumstances of the case. The CA ruled that while concurring negligence on the part of the captain is imputable to Maritima. Mauricio de los Santos declared that he. If two or more of the former should claim said right the one having greater interest shall be preferred. It also presented the findings of the Board of Marine Inquiry recommending that the captain be exonerated and that the ship was in seaworthy condition. The appointment of director or agent shall be revocable at the will of the partners. if any. Art. they are required to observe EO diligence. It was due to this interim that there is great probability that unmanifested cargo and passengers were loaded. offering equal conditions and price. Aklan. or insurance. The owners of a vessel shall have preference in her charter over other persons. and should they have an equal interest it shall be decided by lot. and by necessary implication. M/V Mindoro was cleared for departure at 2 PM by the Bureau of Customs and the Coast Guard but its departure was delayed for 4 hours. The provisions of the Code of Commerce regarding maritime commerce have no room in the application of the Workmen's Compensation Act which seeks to improve. This decision could not be executed against the captain who perished with the vessel. his liability is confined to that which he is entitled as of right to abandon -. the Weather Bureau issued a total of 17 warnings or advisories of typhoon Welming. it was deemed necessary to confine the liability of the owner or agent arising from the operation of a ship to the vessel. In cases where the shipowner is likewise to be blamed. attended by innumerable hazards and perils. This rule is found necessary to offset against the innumerable hazards and perils of a sea voyage and to encourage shipbuilding and marine commerce. The limited liability doctrine applies not only to the goods but also in all cases like death or injury to passengers wherein the shipowner of agent may properly be held liable for the negligent or illicit acts of the captain. including the installation of life saving equipment and other navigational instruments. but they can only exercise it within the nine days following the record of the sale in the registry and by delivering the price at once. In fact. his wife and 4 children were aboard the boat together with their household utensils valued at P 1. Maritima is liable for the deaths and injury of the victims. Maritima could not account for the delay because it neither checked from the captain the reasons behind the delay. was due to force majeure because of the strong typhoon Welming.

and must not be disqualfied according to the same for the discharge of the duties of the position. Captains and masters of vessels must be Filipinos having legal capacity to bind themselves in accordance with this Code. or regulations.one who commands smaller ships engaged exclusively in coastwise trade . acting in accordance with the instructions received and protecting the interests of the owner with utmost care. 3. 4. who are to take cognizance thereof. but the agent may not employ any member against the captain's express refusal. as established by marine laws. and prove the skill. in accordance with the instructions he may have received from the ship agent. and shall intrust the navigation to a person possessing the qualifications required by said ordinances nd regulations. or by those of navigation. Art. 2. the captain shall procure the same in the successive order stated below: 1. by means of an executory action without further requisite than the acknowledgment of the signatures in the instrument approving the account. in every case. and qualifications required to command and direct the vessel. The following powers are inherent in the position of captain or master of a vessel: 1. The Philippine Coast Guard shall perform the following functions : (e) to issue licenses and certificates to officers. in accordance with the contracts and the laws and regulations of the merchants marine.captain and master have the same meaning for maritime commerce . Captains. Art. he shall limit himself to the financial administration of the vessel. ordinances. To make contracts for the charter of the vessel in the absence of the ship agent or of the consignee. at the first port touched. notes: . 609. If the interest of the petitioners should be the same.owners may demand of the managing agent the amount due them. major and minor patrons and seamen. he shall act in concurrence with the latter. Should there be any profits. the matter shall be decided by lot. By requesting said funds of the consignees of the vessel or the correspondents of the ship agent. for the repairs to the hull and engines of the vessel and to her rigging and equipment which are absolutely necessary in order for her to be able to continue and conclude her voyage. 609. subject. capacity.Master . 6. and if the vote should result in a tie. If the owner of a vessel desires to be the captain thereof and does not have the legal qualifications therefore. although they may be engaged in coastwise trade . 3. and qualifications necessary to command and direct the vessel.Captain . capacity. If two or more co-owners request the position of captain. 5.TRANSPORTATION AND MARITIME LAW Art. have legal capacity to contract in accordance with this Code. To impose.bancas . but if she should arrive at a point where there is a consignee of the vessel. If the owner of a vessel desires to be the captain thereof. To provide in similar urgent cases and on a voyage. To appoint or make contracts with the crew in the absence of the ship agent and propose said crew. provided there is no time to request instructions of the agent. 611.Roles of the captain : (1) general agent of the shipowner (2) technical director of the vessels (3) represents the government of the country under whose flag he navigates (b) Inherent Powers Art. on board the vessel. purchasing all that may be necessary for the purpose.patron . or regulations.one who governs vessels that navigate the high seas or ships of large dimensions and importance. as well as suspend and revoke such licenses and certificates. as established by marine or navigation laws. The agent may discharge the duties of captain of the vessel. 2. he shall limit himself to the financial administration of the vessel. masters or patrons of vessels must be Filipinos. and must prove that they have the skill. 601. holding a preliminary investigation on the crimes committed on board the vessel on the high seas. 610. and that they are not disqualified according to the same for the discharge of the duties of that position. Art. ordinances. should said agent be present. pilots. and there should be a tie. 596. the position shall be given to the part owner having the larger interest in the vessel. PAGE 67 . notes: The first three powers cannot be renounced as they relate to public order and are vested in the captain as a delegation of public authority Art. the co. correctional punishment upon those who do not comply with his orders or who conduct themselves against discipline. and when he has no funds and does not expect to receive any from the agent. and shall entrust her navigation to the person possessing the qualifications required by said ordinances and regulations. the disagreement shall be decided by a vote of the members. which he shall turn over to the authorities. Captains and Masters (a) Qualifications and licensing RA 5173 Sec. to the provisions contained in Article 609. In order to comply with the obligations mentioned in the foregoing article. To command the crew and direct the vessel to the port to its destination. without having the legal qualifications therefor. To adopt all the measures which may be necessary to keep the vessel well supplied and equipped.

and in his absence by the competent authority. is not required by the outline) Art. before receiving the freight." he shall record the entry and exit of all the goods. called "freight book. 4. For the informations indicated he shall make use of the binnacle book. In the same book he shall record the names and places of sailing of the passengers and the number of packages of which their baggage consists. and whether the rigging and engines are in good condition. he allows merchandise to be carried on deck. as well as the imperfections and averages of the cargo. and all other expenses. stating their marks and packages. ports of loading and unloading. and the effects and consequence of the jettison. and with the provisions of the law of civil procedure. an examination of the vessel. such as inflammable or explosive substances. or the local authority. to the judge or court or proper local authority. By borrowing the amount required by means of a bottomry loan. called the "accounting book". To have on board before starting on a voyage a detailed inventory of the hull. the special character of the shipment. 6. and if she has the equipment required for good navigation. and of the steam or engine book kept by the engineer. presenting the certificate of the registration sheet treated of in Article 612 and the instruments proving the obligation contracted. By applying to the consignees of the cargo or to the persons interested therein. 5. outfits. the rigging carried. on account of the nature of the merchandise. and otherwise to the consul of the Republic of the Philippines. 612. the invoices or manifest of the cargo. and the freight earned. By drawing on the ship agent. repairs. with the officers of the crew. The judge or court. and the instrument of the expert visit or inspection. The experts shall be appointed one by the captain of the vessel and the other one by the persons who request the examination. The following duties are inherent in the office of captain: 1. if in a foreign country. the prevailing winds. stating their domiciles. If while on a voyage the captain should find it necessary to contract one or more of the obligations mentioned in subdivisions 8 and 9 of articl 580. rigging. under their liability. The omission of this formality shall make the captain personally liable for the credits prejudiced on his account. names of the shippers and of the consignees. In the two last cases he must apply to the judicial authority of the port. (the ff. the roll of the persons who make up the crew of the vessel. 3. should there be any. no matter what is its cause. their wages and salaries. and which might endanger the safety of the vessel. as the case may be. and in cases of grave resolutions which require the advice or a meeting of the officers of the vessel. In the first book. the consul. the list of passengers." he shall enter every day the condition of the atmosphere. and in case of disagreement a third shall be appointed by the marine authority of the port. and the price of the passage. volume. and tackle. In the third book. To demand a pilot at the expense of the vessel whenever required by navigation. In the second book. To have a copy of this Code on board. in order to ascertain whether she is watertight. 4. the maneuvers executed. 2. To have three folioed and stamped books. and the amounts they may have received on accounts. To remain constantly on board the vessel with the crew during the time the freight is taken on board and carefully watch the stowage thereof. in view of the result of the proceedings institutied. and the two experts. not to permit that any freight be carried on deck which by reason of its disposition. He shall also enter the damage suffered by the vessel in her hull engines. or river. he must hear the opinion of the officers of the vessel. in order that it may be recorded in the registry when the vessel returns to the port of its registry. and the amounts invested in provisions. should it have been made at the port of departure. By selling a sufficient amount of the cargo to cover the amount absolutely necessary to repair the vessel and to equip her to pursue the voyage. 3. signed by the marine official. should there be one. engines. canal. entering specifically article by article. and if. proceeding in accordance with the prescriptions of Article 583. and other incidents of navigation. either directly or by delivery to their families. the horsepower of the engines. 5. without the precautions which are recommended for their packing. Art. and in his absence. preserving a certificate of the memorandum of this inspection. or a roadstead or anchoring place is to be entered PAGE 68 . 583. which shall be called "log book. by reason of the sale of the vessel on account of a declaration of unseaworthiness. the health certificate. and have the consent of the shippers and of the agent. he shall record the decision adopted. he shall apply to the judge or court if he is in the Philippine territory. fuel. He shall furthermore enter therein a list of all the members of the crew. to the local authority. the certificate of the registry proving the ownership of the vessel. shall make a temporary memorandum of their result in the certificate. if required by the shippers and passengers. the charters or authenticated copies thereof. acquisition of rigging or goods. and other equipments of the vessel. or weight makes the work of the sailors difficult. and where there should be none. stores. placing at the beginning of each one a note of the number of folios it contains. if in the Philippines and to the Filipino consul. and principally the favorable season it takes place. To make. rigging. tackle. the navigation certificate. management and isolation. and all the obligations which encumber the same up to that date. the distance covered. wages. or even of the passengers and crew. or so that it can be admitted as a legal and preferred obligation in case of sale before its return. not to consent to any merchandise or goods of a dangerous character to be taken on. the sources of the collection. he shall enter all the amounts collected and paid for the account of the vessel. signed by all the persons who may have taken part therein. and principally when a port. the course sailed.TRANSPORTATION AND MARITIME LAW 2. and the contracts entered into with the crew.

624. health. unless there is a pilot on board discharging his duties. 11. To give an account to the agent from the port where the vessel arrives. advise him of his departure. the vessel having been wrecked. and. stating therein all the incidents of the wreck. 8. and taking such other steps as may help in arriving at the facts. of its cargo. In the absence of marine officials or of the consul. preservation. canals. To comply with the obligations imposed by the laws and rules of navigation. To conduct himself according to the rules and precepts contained in the instructions of the agent. 16. A captain whose vessel has gone through a hurricane or who believes that the cargo has suffered damages or averages. (not included in the outline) Art. and amounts borrowed on bottomry bond. 13. in the presence of passengers as witnesses. and others. unless there is proof to the contrary. To put in a safe place and keep all the papers and belongings of any members of the crew who might die on the vessel. telegraph. in order that he may decide with regard to its deposit. in their absence. 12. abiding by the decision of the majority. according to the cases. To observe the rules on the situation of lights and evolutions to prevent collisions. and port of departure of the vessel. To present himself. etc. the books and papers. 618). to the consignees. and rivers. the shipagent is liable to third persons (Art. If when on a voyage the captain should receive news of the appearance of privateers or men of war against his flag. before twenty-four hours have elapsed. freight earned. inform his agents or shippers. the delivery of the cargo at the port of discharge terminates the captain's responsibility as to the cargo PAGE 69 . rigging. of the reason therefore. and freights to the agent. receiving sworn statements of the members of the crew and passengers who may have been saved. and if he should have to take a boat he shall take with him. To be on deck at the time of sighting land and to take command on entering and leaving ports. and then the articles of most value. 625. the latter shall be accepted. 612 are inherent in the captain. the captain does not know to whom he is to make the legal delivery of the cargo. stating the name and domicile of the shippers. immediately proceeding with the proof of the facts.TRANSPORTATION AND MARITIME LAW with which neither he. 9. stamped and folioed. 10. it not being permitted to open the hatches until after this has been done.. he shall make a statement of the result of the proceedings in the log book and in that of the sailing mate. In case of wreck he shall make the proper protest in due form at the first port reached. roadsteads. which he must rubricate. Upon arrival at the port of destination. The authority or the consul abroad shall verify the said facts. To take the steps necessary before the competent authority in order to enter in the certificate of the vessel in the registry of the vessels.] Notes: Under 619. of members of the crew. by reason of the absence of the consignee or on account of the nonappearance of a legal holder of the invoices. drawing up a detailed inventory. he is saved alone or with part of his crew. (not included in the outline) Art. when making a port in distress. he shall place it at the disposal of the proper judge or court or authority. (not included in the outline) Art. giving the captain the proper certificate in order to show his arrival under stress and the reasons therefore. he shall be obliged to make the nearest neutral port. notify him the freight he may have received. the officers nor the crew are acquainted. the obligations which he may contract in accordance with Article 583. and await an occasion to sail under convoy or until the danger is over or to receive final orders from the ship agent or shippers. and reason of arrival. being obliged to prove in case of the loss of the books and papers that he did all he could to save them. under his personal liability. the declaration must be made before the local authority. the civil liability arising from the nonfulfillment thereof is not limited to the captain. and. within twenty-four hours. and give him any information and date which may be of interest. and custody. 7. and make a sworn statement of the facts. in a proper case. and before abandoning her to hear the officers of the crew. 15. before the competent authority or Filipino consul. to the maritime authority if in the Philippines and to the Filipino consul if in a foreign country. the vessel. since while the captain is liable to the shipagent. The statement of the captain shall be believed if it is in accordance with those of the crew and passengers. taking advantage of the semaphore. mail. with a memorandum of the folios. the captain shall. and make a statement of the name. being liable for all that he may do in violation thereof. and shall ratify it within the same period when he arrives at the place of his destination. and shall deliver the original records of the proceedings to the captain. if they disagreed. in accordance with case 8 of this article. shall make a protest thereon before the competent authority at the first port he touches within the twenty-four hours following his arrival. [If. registry. He shall not spend the night away from the vessel except for serious causes or by reason of official business. after having obtained the necessary permission from the health and customs officers and fulfilled the other formalities required by the regulations of the administration. for their presentation to the judge or court of the port of destination. which declaration shall be vised by the authority of by the consul if after examining the same it is found to be acceptable. until all hope to save her is lost. The captain shall proceed in the same manner if. 622. customs. Notes: Although the duties in Art. before anything else. 14. without any defalcation. in which case he shall appear before the nearest authority. turn over the cargo. To remain on board in case of danger to the vessel.

ISSUE: W/N CAPTAIN TAYONG WAS ILLEGALLY DISMISSED? HELD: Yes. Art. a storm hit. the Captain was instructed to turn over his post to a new captain. and the ship agent may furthermore discharge him. The captain of a vessel is a confidential and managerial employee within the meaning of the above doctrine. contract or instructions and regulations of the shipowner. Captain Rizalino Tayong was employed by petitioner shipwoners as master of a vessel for one year. for such role (which to our mind. the vessel could not reach its destination. He who commits fraud in his accounts shall reimburse the amount defrauded. 621. 4. by far the most important is the role performed by the captain as commander of the vessel. The charterer sued for damages arising from the breach of the charter party. and (3) he is a representative of the country under whose flag he navigates. besides being liable for all the acts of the substitute and bound to pay the indemnities mentioned in the foregoing article. where upon arrival. A captain who navigates for freight in common or on shares may not make any separate transaction for his own account. the vessel sailed for South Africa. His instructions were to replenish bunker and diesel fuel and to sail to South Africa . More importantly. and unauthorized sale of the Cargo. and there to load 120. 617. interest. the NLRC reversed and ordered the shipowner to pay his salary for the unexpired contract plus one month leave benefit. To the captain is committed the governance. Of these roles. The captain is held responsible. 615. as agent of the shipowner. The ship captain. has legal authority to enter into contracts with respect to the vessel and the trading of the vessel. care and management of the vessel. and shall indemnify for the damages he may cause. which was dismissed.TRANSPORTATION AND MARITIME LAW INTER-ORIENT MARINE ENTERPRISES V. the captain may not have himself substituted by another person. While in Singapore. he shall apply to the judge or 4. carry goods aboard and and deal with the freight earned. subkect to applicable limitations established by statute. hence after consultation with the Chied Engineer. 3. and attorney's fees. and should he do so. While in HK. shall be liable for the principal. provided no money has been previously borrowed on the whole vessel. (c) Prohibited acts and transactions Art. agree upon rates and decide whether to take cargo. He was then repatriated to the Philippines. or who pledges or sells merchandise or provisions outside of the cases and without the formalities prescribed in this Code. A master or captain. the captain has authority to sign bills of lading. and the losses shall be borne by him alone. 2. After the supplies were delivered. In that case. If the ship being on a voyage the captain should find it necessary to contract one or more of the obligations mentioned in Nos. 6. On appeal. It is well settled that confidential and managerial employees cannot be arbitrarily dismissed at any time. (2) he is also commander and technical director of the vessel. except on the portion of the vessel he owns. is analogous to that of "Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do with the operation and protection of the vessel during its voyag and the protection of the passengers (if any) and crew and cargo. and should he do so the contract shall be void. The Captain requisitioned for supplies of oxygen and acetylene necessary for the repairs. NLRC [235 S 634 (1994)] F: 1. The SC held that the master of the vessel had reasonable grounds to apprehend that the vessel was in danger of seizure of captur by the French authorities in Saigon and was justified by necessity to elect the court which he took to flee Saigon for the port of Manila . Clearly. Hence. Neither may he borrow money on bottomry for his own transactions. 1. Captain Tayong filed with the POEA a complaint for illegal dismissal. A captain commonly performs three (3) distinct roles: (1) he is a general agent of the shipowner. and costs shall be charged to the private account of the captain. 3. and without case as reasonably established in an appropriate investigation. the supplies were not available. he must necessarily state what interest he has in the vessel. 5. rigging. or tackle of the vessel. In his role as general agent of the shipowner. The vessel sailed from HK to Singapore. and provided there does not exist any other kind of lien or obligation chargeable against the vessel. 2. and costs. PAGE 70 . the captain is veste with both management and fiduciary functions. for purposes of maritime commerce. When he is permitted to do so. A captain who borrows money on the hull. engine. this appeal. Art. and properly so. and should he do so the profits shall belong to the other persons interested.with the result that the shipowner was relieved from liability for the deviation from the stipulated route and from liability for the damage to the cargo. The captain may not contract loans on respondentia secured by the cargo. is one who has command of a vessel. 8 and 9 of Article 580. the substitute as well as the captain may be discharged by the ship agent. Hamburg is instructive in this connection. 613. for such safety. and precautionary measures were taken since the vessel was 14 years old and the turbo-charger was leaking. Art. Compagnie de Commerce v. the captain of a German vessel at the port of Saigon decided to head for the port of Manila instead of the ports of Dunkirk and Hamburg because of WWI has been declared and in his judgment. interest. a ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and its crew and cargo specifically requires on a stipulated ocean voyage.000 metric tons of coal. In case of violation of this article the principal. Without the consent of the ship agent. and shall be subject to the provisions of the Penal Code. 583. Notes: The duties of a captain are essentially personal due to the confidence given to him arising from the fact that he possesses the required technical ability and that he is a man worthy of trust of the shipowner Art. the Captain decided to delay departure and wait for the supplies.

it shall be admitted as evidence in questions which may arise between the captain and the crew with regard to the agreements contained therein and the amounts paid on account of the same. stating in the said document that they were read. The perpetration of a crime which disturbs order on the vessel. At any rate. to which reference is made in Article 612 (obligations inherent in the office of captain) must be reduced to writing in the account book without the intervention of a notary public or clerk of court. If. the consul or the local authority as the case may be in view of the result of the proceedings instituted. 635. or by the consuls or consular agents of the Philippines if executed abroad.TRANSPORTATION AND MARITIME LAW court if he is in Philippine territory. The lack of this formality shall make the captain personally liable to the creditors who may be prejudiced through his fault. without obtaining said permission. signed by the parties thereto. in virtue of which one person binds himself to perform or to do the services or works for which he has signed himself in the vessel in consideration of the compensation stipulated (b) Duties and liabilities Art. with the consent of the consul or marine authorities. 637. Notes: Obligations covered by this article : (1) price which has not been paid to the last vendor. Habitual drunkenness. presenting the certificate of the registry of the vessel treated of in Article 612. 5. without having requested the permission referred to in the foregoing paragraphs. in order that it may be recorded in the registry when the vessel returns to the port of her registry. shall be personally liable to the captain of the vessel to which the sailor first belonged for that part of the indemnity. want of discipline. and service. and the instruments proving the obligation contracted. signed by the latter. (2) for materials and labor in the construction of the vessel. includes the sailing mates. 626 . 4. 632 . Any occurrence which incapacitates the sailor to perform the work entrusted to him. Neither can he pass from the service of one vessel to another without obtaining the written consent of the vessel on which he may be. (c) Rights Art. unless the sickness is the result of his own fault. (5) insurance premiums under Art. by reason of the sale of the vessel by virtue of a declaration of unseaworthiness. 3. with the exception of that provided in Article 644. should have made a new agreement with him. The captain shall take care to read to them the articles of this Code which concern them. Notes: The contract with a seaman has the nature of a lease of service. of the agreement and of the liquidation of his wages. in the form of a loan. equipment and provisioning with the victuals and fuel. the costs of the attendance and cure shall be defrayed from the common funds. referred to in the third paragraph of this article. 634.631 : sailing mate or second in command Art. Every member of the crew may demand of the captain a copy. Art. A sailor who has been contracted to serve on a vessel cannot rescind his contract nor fail to comply therewith except by reason of a legitimate impediment which may have occurred. the sailor who has signed for one vessel should sign for another one. The captain may make up his crew with the number he may consider advisable. (a) Contracts and formalities Art. from the captain to the cabin boy. he cannot be discharged until the end of the return voyage to the port where he enlisted. or non. 580 pars. the number thereof not to exceed one-fifth of the total crew.633 : second mate or third in command Complement of a vessel or crew . stating therein all the obligations which each one contracts and all the rights they acquire. the following being considered as such: 1. knowing that a sailor is in the service of another vessel. Should there be no fixed period for which a sailor has been contracted. and otherwise to the Filipino consul. 2. Said sailor shall furthermore lose the wages earned on his first contract to the benefit of the vessel for which he may have signed. The agreements which the captain may make with the members of the crew and others who go to make up the complement of the vessels. and there should not appear any signs of alterations in its entries. A seaman who falls sick shall not lose his right to wages during the voyage. he may make up the crew with foreigners. (4) loan on bottomry before departure of the vessel. Repeated insubordination. necessary for the management.all the persons on board. 3. Art. which the sailor may not be able to pay. and in his absence to the judge or court or to the proper local authority. Incapacity and repeated negligence in the fulfillment of the service which he should render. said authorities taking care that these obligations and rights are recorded in a concise and clear manner. Neither may the captain discharge a sailor during the time of his contract except for just cause. and other employees. Other Officers and Crew notes: Art. The judge or court. 8 and 9. stokers. PAGE 71 . and vised by the marine authority if they are executed in Filipino territory. If in foreign ports the captain should not find a sufficient number of Filipino sailors. A captain who.fulfillment of the service. engineers. and the captain may choose between forcing him to fulfill the service to which he first bound himself or look for a person to substitute him at his expense. If the book includes the requisites prescribed in Article 612. should there be one. or so that it can be admitted as a legal and preferred obligation in case of sale before the return. maneuvers. (3) for the repair. shall make a temporary memorandum in the certificate of their result. which will not give rise to doubts or claims. 636. as they appear in the book. the second contract shall be void. 644. and in the absence of Filipino sailors he may ship foreigners residing in the country.

and the members of the crew should not agree thereto. as may be convenient for them. If. The inability of the vessel to navigate. the contract must be complied with in the terms agreed upon. what may be due for said month and days shall be determined in proportion to the approximate duration of the voyage. should give rise to an increase of wages. the captain being obliged. before anything else. always without prejudice to the criminal liability which may be proper. to pay said sailors in both cases the passage to the said port or to the port of sailing of the vessel. or sailing mate. If the ship agent or the charterers of the vessel should give it a destination different from that fixed in the agreement. 2. 4. and may leave him on land. The indemnity shall be paid from the funds of the vessel if the captain should have acted for reasons of prudence and in the interest of the safety and good service of the vessel. they shall indemnify the crew for the damages suffered. in accordance with his contract. or for any other reason independent of the will of the agent. 2. In the fifth case. according to the time they may have served thereon. by reason of the PAGE 72 . If the crew has been engaged on shares it shall not be entitled. each sailor engaged shall be given one month's salary. 3. from the proceeds of the freightage the cost of the attendance and cure. the latter shall be adjusted privately. 640. Art. 5. If the revocation of the voyage should be decided before departure of the vessel from the port. If they accept the change. on account of greater distance or of other reasons. the voyage is revoked by the will of the ship agent or of the charterers. If. 638. The following shall be just causes for the revocation of the voyage: 1. as the accused of a crime. discounting in all cases the sums advanced. The prohibition to receive in said port the goods which make up the cargo of the vessel. as if the voyage had been made. the ship agent shall have a right to demand of them the indemnity which may be justly due. the captain may not abandon any member of his crew on land or on the sea. his imprisonment and delivery to the competent authority in the first port touched should be proper. the latter shall be indemnified on account of the rescission of the contract. refuse to permit a sailor whom he may have engaged to go on board. The captain may. for the services rendered to the vessel up to the date of the revocation. in the judgment of the experts. which shall be obligatory to the captain. Should this not be the case. Art. the sailors shall be paid at the port which the captain may deem advisable to make for the benefit of the vessel and cargo. Art. The detention or embargo of the same by order of the government. 642. Should the revocation of the voyage arise from a just cause independent of the will of the ship agent and the charterers. the contract shall be rescinded and the crew shall be paid what they should have earned according to the contact.TRANSPORTATION AND MARITIME LAW If the sickness should comee from an injury received in the service or defense of the vessel. this shall not give rise to a reduction in the wages agreed upon. before setting out on a voyage and without giving any reason whatsoever. and those engaged by the month shall receive the amount corresponding to the time they might have been on board and to the time they may require to arrive at the port of destination. but if the detention should exceed three months. 641. the captain and the crew may mutually demand the enforcement of the contract. Art. If the agreement should have been for a fixed amount for the whole voyage. and any of the first three causes mentioned in the foregoing article should occur. 6. besides what may be due him. the seaman shall be attended and cured at the expense of the common funds deducting. but if the disability of the vessel should have been caused by the negligence or lack of skill of the captain. furthermore. before or after the vessel has put to sea. the sailors engaged for a fixed amount for the voyage shall receive the entire salary which may have been offered them if the voyage had terminated. 4. the crew shall continue to be paid half wages. after the crew has been engaged. 3. Art. however. they shall be given by way of indemnity half the amount fixed in the first case. If the revocation should take place after the vessel has put to sea. In case of the occurrence of the fourth cause. unless. The blockade of the port of its destination or the breaking out of an epidemic after the agreement. the indemnity shall be fixed at fifteen days. it shall be paid by the captain personally. if the agreement is by month. and the vessel should not have left the port. but if the vessel is to continue its voyage. in which case his wages have to be paid as if he had rendered services. in the manner established by the law of civil procedure. after a voyage has been begun. in addition to what may be due them for the part of the monthly wages corresponding to the days which may have elapsed from the date of their agreements. 639. Even if the voyage should be shortened to a nearer point. and if the proposed voyage should be of such short duration that it is calculated at approximately one month. or through friendly adjusters in case of disagreement. or if the vessel is for the same reason given a different destination from that fixed in the agreement with the crew. Desertion. And if the agreement should be for a fixed sum for the voyage. After the voyage has begun. A declaration of war or interdiction of commerce with the power to whose territory the vessel was bound. Should the revocation or change of the voyage originate from the shippers or charterers. engineer. and during the same and until the conclusion thereof. according to the following cases: 1. and the voyage. the members of the crew shall no other right than to collect the wages earned up to the day the revocation was made. the crew shall have no other right than to collect the wages earned.

If the vessel should change owner or captain. credits of such kind pertaining to the preceding voyage shall lose the preference. they are permitted to do. AND ACCIDENTS OF MARITIME COMMERCE 1. the heirs shall be paid the entire portion due the sailor. they shall be given from the amount of the salvage an award in proportion to the efforts made and to the risks encountered in order to accomplish the salvage. in the form of a loan. Now governed by the provisions on agency Art. Supercargoes Art. At any rate. The officers and the crew of the vessel shall be exempted from all obligations contracted. but sailors who are engaged on shares shall have no right on the salvage of the hull. who has charge of the cargo on board. but shall continue in force for all acts which are inseparable from his authority and office. if they deem if proper. make any transaction for their own account during the voyage. namely --If he died a natural death and was engaged on wages. 651. 2. including the captain. should be saved. and comes home with it Art. and the whole amount if he died on the return voyage. or greater extension of the voyage. Averages (a) Nature and Kinds Art. delay. 650. from the proceeds of the freightage. and freightage shall be liable for the wages earned by the crew engaged per month or for the trip. in the following cases. Book II. Supercargoes cannot. unless there is a special authorization therefor from the principals. half the amount earned shall be paid if the sailor died on the voyage out. All extraordinary or accidental expenses which may be incurred during the voyage for the preservation of the vessel or cargo. in order to enjoy the benefits as the rest. the captain attempts to change it.) Art. 1. the full amount of wages or the entire part of the profits which may be due him as others of his class. at the end of the voyage. If a sailor should die during the voyage. A sailor who falls sick shall not lose his right to wages during the voyage. shall retain their rights on the salvage. to anything but the proportionate part of the indemnity which may be paid to the common funds by the persons responsible for said occurrences. For the purposes of this Code the following shall be considered averages: 1. equipment. with regard to that part of the administration legitimately conferred upon the latter. but should he have been captured on account of carelessness or other accident not related to the service. or of both. Neither shall they be permitted to invest in the return trip more than the profits from the ventures. 645. If a portion of the vessel or of the cargo. before the beginning of the voyage. If a disease should break out and be officially declared epidemic in the port of destination. the costs of medical attendance and treatment shall be defrayed from the common funds. If. DAMAGES. buys cargo to be brought back on the return voyage of the ship. both as regards the right of the crew to demand any wages and as regards the right of the ship agent to recover the advances made. unless his sickness is the result of his own fault. If the sickness should be caused by an injury received in the service or defense of the vessel. rigging. as far as possible. 3. the sailor shall be considered as living. The vessel with her engines. // After a new voyage has been undertaken. 644. the cost of the attendance and treatment. Art. Supercargo: An agent of the owner of the goods shipped as cargo on a vessel. Supercargoes shall discharge on board the vessel the administrative duties which the agent or shippers may have assigned them. and his heirs shall be paid. And if the contract was on shares and the death occurred after the voyage was begun. but if the latter died before the departure of the vessel from the port. The powers and liabilities of the captain shall cease. Art. and liabilities of factors shall be applicable to supercargoes. The sailor shall likewise be considered as present if he was captured while defending the vessel. If the vessel and her cargo should be totally lost by reason of capture or shipwreck. deducting.TRANSPORTATION AND MARITIME LAW revocation. 806. his heirs shall be given the wages earned and not received. the liquidation and payment to take place between one voyage and the other. the heirs shall not be entitled to claim anything. in accordance with the custom of the port of destination. Accidents and Damages in Maritime Commerce RISKS. or there occurs a naval war with the power to which the vessel was destined. 646. D. when there is a supercargo. but only on the portion of the freightage saved. and shall respect the latter in his duties as chief of the vessel. on the remainder of the vessel as well as on the value of the freightage or the cargo saved. sells the same to the best advantage in the foreign markets. with the exception of the ventures which. All the provisions contained in the second section of Title III. 643. with regard to qualifications. before anything else. they shall keep an account and record of their transactions in a book which shall have the same conditions and requisites as required for the accounting book of the captain. manner of making contracts. 4. Art. or both. he shall only receive the wages due up to the day of his capture. 2. according to his contract and the cause of his death. without special authorization or agreement. All damages or deterioration which the vessel may suffer from the time it puts to PAGE 73 . the crew engaged on wages. (If they should have worked to recover the remainder of the shipwrecked vessel. If the contract was for a fixed sum for the whole voyage. all rights shall be extinguished. that which may have been earned up to the date of his death shall be paid. the sailor shall be attended and treated at the expense of the common funds. If death occurred in the defense of the vessel. 649. Art. 647.

the vessel. 4. privateers. The lowest value of the goods sold by the captain in arrivals under stress for the payment of provisions and to save the crew. and the damage suffered through said act by the goods which are kept on board. and other so-called port expenses. The damage suffered by the goods of the cargo by the opening made in the vessel in order to drain it and prevent its sinking. have been suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of consignment (1) Simple or Particular (a) Defined Art. The owner of the goods which gave rise to the expense or suffered the damage shall bear the simple or particular averages. The loss inflicted upon the vessel or cargo by reason of an impact or collision with another. The necessary expenses on arrival at port. and the damage resulting therefrom to the goods removed or transferred. especially the following: 1. and particularly the following: 1. and those suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of their consignment. such as those of pilotage of coasts and ports. negligence. incurred in order to preserve the vessel. and other usual expenses of navigation shall be considered ordinary expenses to be defrayed by the shipowner. The expenses of removing or transferring a portion of the cargo in order to lighten the vessel and place it in condition to enter a port or roadstead. The losses suffered by the cargo from the time of its embarkation until it is unloaded. 7. 807. 2. As a general rule. or to the crew. and the expenses incurred to avoid and repair the same. The expenses for the treatment and subsistence of the members of the crew who PAGE 74 . simple or particular averages include all the expenses and damages caused to the vessel or to her cargo which have not inured to the common benefit and profit of all the persons interested in the vessel and her cargo. if the charter has been contracted for a fixed sum for the voyage. without prejudice to the right of the owner to recover the corresponding indemnity from the captain. General or gross. 2. its cargo. general or gross averages shall include all the damages and expenses which are deliberately caused in order to save the vessel. and unloading. the vessel. 3.TRANSPORTATION AND MARITIME LAW sea at the port of departure until it casts anchor at the port of destination. the anchors and the chains which are abandoned. Expenses : to constitute an average. unless there is an express agreement to the contrary. The victuals and wages of the crew while the vessel is in quarantine. The cables and masts which are cut or rendered useless. Any loss suffered by the cargo through the faults. The goods or cash invested in the redemption of the vessel or of the cargo captured by enemies. the latter shall be liable for all the damage caused. or both at the same time. to the vessel. 3. an expense must be: a. 8. 809. for the same causes and reasons. Simple or particular. from the time it puts to sea from the port of departure until it anchors in the port of destination. arms. whether they belong to the cargo. if the marine ordinances allow it. incurred during the voyage c. Damages or deterioration : to constitute an average. health. 5. to meet any other need of the vessel against which the proper amount shall be charged. or pirates. have been suffered from the time the vessel puts to sea from the port of departure until it casts anchor in the port of destination b. 6. The losses and expenses suffered by the vessel in its hull. quarantine lazaretto. and equipments. The goods jettisoned to lighten the vessel. 2. in order to make repairs or secure provisions. rigging. inspection. extraordinary or accidental b. 8. As a general rule. or both. 4. and the freight. scuttled or broken in order to save the cargo. from a real and known risk. and the provisions. except in coastwise navigation. (2) Gross or General (a) Defined Art. The expenses caused in order to float a vessel intentionally stranded for the purpose of saving it. lighterage and towage. if it is accidental and unavoidable. 5. 808. 7. Art. Averages shall be: 1. 6. 811. cargo or both 2. Art. The losses suffered by the merchandise loaded on deck. Averages consist of 2 items : 1. in order to save the cargo. anchorage. or barratry of the captain or of the crew. wages. The damage caused to the vessel which had to be opened. until the merchandise is placed on the wharf. and expenses of the vessel detained during the time the settlement or redemption is being made. either on account of the inherent defect of the goods or by reason of a marine accident or force majeure. it must be: a. The petty and ordinary expenses incident to navigation. If the accident should occur through the fault or negligence of the captain. 9. The wages and victuals of the crew when the vessel is detained or embargoed by a legitimate order or force majeure. costs of barges. Distinguishing feature : an expense incurred or damage suffered which has not inured to the common benefit and profit of all persons interested in the vessel and its cargo (b) Effects Art. 810.

the resolution shall be entered in the log book. lost or damaged. The goods that were not sacrificed shall not be liable for the indemnification of those sacrificed One of the requisites of general average is lacking. without prejudice to the right of the shippers to proceed against the captain before the competent judge or court. If.four hours after his arrival. and after the resolution. and the necessary expenses which he may incur in his imprisonment. privateers. breakage of masts. within 24 hours upon arrival at the first port the captain makes. PAGE 75 . ropes. In the first case the minutes shall be signed by all the persons present who could do so before taking action. Distinguishing feature: Expense or damage suffered deliberately in order to save the vessel. The resolution adopted to cause the damages which constitute general average must necessarily be entered in the log book. Upon reaching Aparri. the owner of said part shall be entitled to indemnity. success in saving the vessel and remaining cargo Magsaysay Inc. or pirates. lack of skill. The wages and victuals of the crew of a vessel chartered by the month. The captain shall be obliged to deliver one copy of these minutes to the maritime judicial authority of the first port he may make. on the contrary. it should be decided to sink any vessel. or the captain. or negligence. the vessel should be lost running same risk. 504 F: Plaintiff's vessel SS Antonio left for Manila for Basco. In order to incur the expenses and cause the damages corresponding to gross average. 813. In the second case. the votes against it and the reason for the dissent. creek. 11. provided that the circumstances producing the peril should be ascertained and imminent 2. in order to facilitate its entry into a port or roadstead. until he is returned to the vessel or to his domicile. The expenses of the liquidation of the average. if opposed to the majority. there must be a resolution of the captain 3. Art. or in order to repair the damage caused for the common benefit. they may be executed under his responsibility. If the latter should object. and after hearing the persons interested in the cargo who may be present. their share being chargeable against the captain. he shall deliver one copy of these minutes to the maritime judicial authority thereat Art. The wages of any member of the crew held as hostage by enemies. If the persons interested in the cargo. The owners of the goods saved shall not be liable for the indemnification of those jettisoned. its cargo or both from a real and known risk --> it is the deliverance from an immediate peril. as a necessary measure to extinguish a fire in port. 818. adopted after deliberation with the sailing mate and other officers of the vessel. with the reasons and motives and the votes for and against the resolution 4. if they can prove that he acted with malice. there must be an assembly of the sailing mate and other officers with the captain including those with interests in the cargo 2. vs Agan 96 Phil. If. In the minutes. Art. 817. Formalities for incurring gross average : 1. and mention shall be made of the injuries caused to those kept on board. to which the vessels saved shall contribute. notwithstanding the jettison of the merchandise. stating the motives and reasons on which it is based. and equipment. being on board the vessel. that is. unless the urgency of the case should be such that the time necessary for previous deliberation was wanting. Batanes with general cargo owned by the different shippers including that of the defendant. the merchandise transferred should be saved and the vessel should be lost. at the first opportunity. 10. The depreciation resulting in the value of the goods sold at arrivals under stress in order to repair the vessel by reason of gross average. roadstead. Art. should consider certain measures necessary. by a common sacrifice. during the time that it is embargoed or detained by force majeure or by order of the Government. dispositions of the authorities or faults of men. it shall be signed by the captain and by the officers of the vessel. If in the lightening a vessel on account of a storm. should there be any. as if the loss had originated from a gross average. no liability may be demanded of the salvage. 12. 860. part of her cargo should be transferred to lighters or barges and be lost. the expenses or damages should have been incurred or inflicted after taking legal steps and authority (b) Essential Requisites Art. If. the amount thereof being distributed between the vessel and cargo from which it came. part of the vessel or the cargo or both is sacrificed deliberately 3. from the expenses or damages caused follows the successful saving of the vessel and cargo 4. it accidentally ran aground. and if not. this loss shall be considered gross average. 9. and the captain and officers or a majority of them. there must be a common danger --> the ship and cargo are subject to the same danger and that the danger arises from accidents of the sea. shall be stated in detail all the goods jettisoned. and the irresistible and urgent causes which impelled the captain if he acted of his own accord.TRANSPORTATION AND MARITIME LAW may have been wounded or crippled in defending or saving the vessel. for the common safety. within twenty. or bay. that constitutes the essence of general average Requisites for general average: 1. and to ratify it immediately under oath. they shall not contribute to the gross average. no contribution whatsoever by reason of gross average shall be proper. there must be a resolution of the captain. 814. have not been heard. the minutes shall be signed by the parties 5. if possible. should he prefer it.

therefore. It is the deliverance from an immediate peril. The plaintiff later obtained said cargo by a writ of replevin and forwarded it to Vladivostok by another streamer. There was no common danger to the ship and cargo. therefore. Defendant also claimed. In action to recover said contribution. Defendant is. belonging to the plaintiff.TRANSPORTATION AND MARITIME LAW Plaintiff had it refloated by Luzteveco for compensation. was a possible outcome of a failure to leave the port of Saigon. 2 of Art. Trial court awarded the plaintiff damages. It does not by any means follow that it is not liable for the expenses incurred by the plaintiff in completing the unfinished portion of the voyage in another ship. Both parties appealed. he acted exclusively with a view to the vessel's protection. the master of the vessel consulted the shipper's instruction as to the disposition of the cargo. 913. and not of the voyage which constitutes the true foundation of general average. and. and no damage could be recovered by the plaintiff from the defendant for the latter's failure to convey the cargo to the port of destination on that ship.referring to expenses suffered by the vessel due to an accident of the sea or force majeure. and would have no application where the stranding was unintentional.and not for the purpose of saving the cargo. the vessel proceeded to Basco where the cargoes were delivered. Trial court decided for the plaintiff including damages for the defendant's breach of the charter party. On the theory that the expenses incurred in floating the vessel constituted a general average to which both the ship and cargo should contribute. Defendant appealed. Russia. Plaintiff did not assent and brought an action for recovery of the machineries plus damages. it was not a case for a general average. unintentionally stranded inside a port and at the mouth of a river during a fine weather. It is not claimed that said cargo was contraband of war and being neutral goods. the full freight having been received by the ship at the commencement of the voyage. While the loading of the cargo was made. but it specifically refers to a vessel intentionally stranded for the purpose of saving it. When the voyage was almost completed at the China Sea. It is the safety of the property. All shippers acceded except the defendant. The final requisite has not been proved for it does not appear that the expenses in question were incurred after following the procedure laid down in Art. Captain of the vessel refused to PAGE 76 . It follows that when the master of the vessel decided to take refuge in Manila. they were not liable to forfeiture in the event of capture by the enemies of the ship's flag. that constitutes the essence of a general average. Defendant denied liability asserting its lien on the cargo for general average. rumors of the outbreak of war between French and Germany spread. After refueling. defendant's vessel undertook to carry a cargo of rice meal in the French port of Saigon for delivery to Dunkirk under a contract of affreightment with a French shipper. Defendant's agent in Manila. 809 . and 4) the expenses or damages should have been incurred or inflicted after taking the proper legal steps and authority. Seizure at the hands of the enemy. war broke out between Germany and Russia. the Manila CFI decided for the plaintiff. Defendant appealed contending that the floating of a vessel. there were no grounds for a reasonable apprehension of danger from seizure International Harvester vs Hamburg American Line 42 Phil 845 F: In the spring of 1917. does not constitute general average expenses. Where there is no proof that the stranded vessel had to be put afloat to save it from imminent danger. defendant undertook to carry agricultural machineries. but the shipper's agent refused to assume responsibility. The following are the requisites for a general average: 1) there must be common danger. Considering the nature of the cargo and its impossibility of being delivered to its destination within reasonable time.said expenses do not fit into any of the specific cases of general average enumerated in ART. No. Judgment affirmed. Decision reversed. where it was interned. and what does appear is that the vessel had to be salvaged in order to enable it to proceed to its port of destination. Held: The danger from which the master of the vessel fled was a real and not merely an imaginary one.to enable it to proceed to its destination -. but as the sacrifice was for the vessel's benefit -. the cargo owners are not in law bound to contribute to expenses. sold said rice meal and deposited the proceeds thereof with the court minus the expenses incident to the sale. though not inevitable. The cargo could have been unloaded by the owners had they been required to do so. surrender the machineries to the owner's agent unless the latter would agree to subject said cargo to liability upon general average to satisfy the cost and expenses of the vessel incident to its stay in Manila. Compagnie de Commerce vs Hamburg 36 Phil 590 F: In July 1914. The expenses incurred for the common safety of the vessel and cargo in this case did not arise from the imminent peril of both. in a cross-complaint. fled with his vessel and her cargo and took refuge in Manila. by reason of a common sacrifice. 3) from the expenses or damages caused follows the successful saving of the vessel and cargo. The refloating was a success. plaintiff asked from the shippers a deposit or bond to answer for contribution to the average. and the ship put in to the port of Manila. contribution from plaintiff for general average for the expenses incurred by the vessel's stay in Manila. from Hamburg to Vladivostok. Freight charges were prepaid to ultimate destination and defendant reserved the right to forward the machineries at its own expense by some other means in case of its inability to effect discharge at the port of destination. the Code of Commerce at the same time enumerate certain specific cases as coming specially under one or the other class. not necessarily by a streamer of defendant. the expenses incurred in floating the vessel do not constitute general average. While the expenses incurred in putting the vessel afloat may well come under No. after completion of the loading of the cargo and after being refused by the French Governor at Saigon for a pass of safe-conduct. Held: In classifying averages into simple or particular and general or gross and defining each class. But by the terms of the contract of affreightment. Held: It is clear that the cargo in question is not liable to a general average. The master of the German vessel. 6 of Art. 811. The outbreak of the war between Germany and Russia absolved the defendant from conveying the cargo to Russia. the defendant was bound to forward the cargo to Vladivostok at its expense. 811 mentions expenses caused to afloat a vessel. 2) for the common safety part of the vessel or cargo or both is sacrificed deliberately. Plaintiff filed an action for recovery of the proceeds of the sale and the resulting damages. upon the court's authority secured by the master of the vessel. liable for the cost of forwarding the cargo by another line. and it cannot be said that under the conditions existing at the time when the master elected to flee from that port.

all of them shall be cited and heard. and the subsequent abandonment by the master of the voyage contemplated in the contract of affreightment. his intervention shall be admitted and shall produce legal effects. If by reason of one or more accidents of the sea. in accordance with the first paragraph of Article 612. If the average has occurred near the port of destination. If the average occurred outside of the jurisdictional waters of the Philippines. Should they not be present or should they have no legal representative. 848. Rule D. An examination of the entire body of these rules discloses that general average is never allowed thereunder unless the loss or damage sought to be made good as general average has been incurred for the `common safety'. Those which are on deck. and where there is none. the liquidation shall be made in the port of arrival. and therefore no necessity for flight. if it is a Philippine port. 2. The captain shall direct the jettison. Judgment modified. beginning with those which embarrass the maneuver or damage the vessel. and shall order the goods cast overboard in the following order: 1. or utilized. but this shall not prejudice any remedies which may be open against that party for such fault. Art. should they not have renounced this right. 3. all the persons having an interest in the vessel and cargo therein at the time of the occurrence of the average shall contribute. but recovery of damages by plaintiff should be reversed. cannot be sustained under the provisions of the York-Antwerp Rules. 4. When the representative is a person well known in the place where the liquidation is made. or where the merchandise is discharged. the liquidation shall be made by the consul in a foreign port. the proceedings mentioned in rules 1 and 2 shall be held there. (d) Jettison Art. the expenses and damages corresponding to each average shall be determined separately in the port where the repairs are made. In the absence of agreements. 815. 850. should any be necessary. 847. The proof of the average shall take place in the port where the repairs are made. It is very clear that in fleeing from the port of Saigon and taking refuge in Manila. The French cargo was absolutely secure from danger of seizure or confiscation so long as it remained in the port of Saigon. 2. liquidation and payment thereof. the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure. so that said port can be made. and there can be no question that the flight of the vessel was a measure of precaution adopted solely and exclusively for the preservation of the vessel from danger of seizure or capture. preferring. even though he be authorized only by a letter of the ship agent. Defendant cannot claim for general average. York-Antwerp Rules Rights to contribution in general average shall not be affected. The deviation of the vessel therefore. The liquidation shall be made in the port of unloading. or of both. from the route prescribed in her charter party. 846. as well as when a judicial authority intervenes at the request of any of the parties interested who do not agree thereto. and with regard to those belonging to the vessel. Those which are below the upper deck. sold. it shall be necessary in so far as the cargo is concerned that their existence on board be proven by means of the bill of lading. or the cargo has been sold in a foreign port by reason of an arrival under stress. the heaviest ones with the least utility and value. or in the port of unloading. (2) Appraisal of general average Art. particular and gross averages of the vessel. if possible. In order to satisfy the amount of the gross or general averages. 812. Art. should take place on the same voyage. In the case where the liquidation of the averages is made privately by virtue of agreement. Delivery of the net proceeds of the sale to plaintiff should be affirmed. Claims for averages shall not be admitted if they do not exceed 5 per cent of the interest which the claimant may have in the vessel or in the cargo if it be gross average. In order that the goods jettisoned may be included in the gross average and the owners thereof be entitled to indemnity. 816. deducting in both cases the expenses of appraisal. by the competent judge or court. (c) Effects Art. by means of the inventory prepared before the departure. or the insurer. The claim for general average by the shipowner.TRANSPORTATION AND MARITIME LAW by French authorities. though the event which gave rise to PAGE 77 . Art. the shipper. Those interested in the proof and liquidation of averages may mutually agree and bind themselves at any time with regard to the liability. must be held to have been justified by the necessity under which the master was placed to elect that course which would remove and preserve the vessel from danger of seizure by the public enemy of the flag which the vessel sailed. and that neither the vessel nor her owners are liable for the resultant damages suffered by the owner of the cargo. the following rules shall be observed: 1. according to the laws of the country and for the account of the proper party. the master of the vessel was not acting for the common safety of the vessel and her cargo. (e) Jason Clause Jason Clause. (b) Proof and Liquidation of Averages (1) Modes Art. to the amount and number absolutely indispensable. however. unless there is an agreement to the contrary. always beginning with those of the greatest weight and smallest value. and 1 per cent of the goods damaged if particular average. of the cargo.

and without prejudice to the other proofs which the experts may deem proper. 851. to the local authority when they are to be held in a foreign port. 2. or whether it is necessary to unload the vessel in order to examine and repair it. including the expenses until they are placed on board. the captain shall convene all the persons interested in order that they may decide as to whether the adjustment or liquidation of the gross average is to be made by experts and liquidators appointed by themselves. If the captain does not comply with the provisions of the preceding article. the insurance premium excluded. provided that its kind and quality appear in the bill of lading. and the average cannot be estimated. 4. and in case there should be expenses common to the different averages and to the vessel and its cargo. within forty-eight hours. deducting the freightage. following the arrival of the vessel at the port. and should they not appear. shall be appraised at the value which merchandise of its kind may have in the port of unloading. If the voyage having been interrupted. except when the marine ordinances allow its shipment in this manner in coastwise navigation. The masts cut down. The experts shall also declare whether the repairs may be made immediately. The valuation of the objects which are to contribute to the gross average. 852. they shall proceed to the examination of the vessel and of the repairs required and to the appraisal of their cost. the examination thereof must be made before they are delivered. or to the consul of the Philippines should there be one. shall be subject to the following rules: 1. adding thereto the expenses and freightage subsequently arising. with the consent of all the parties in interest. 5. repair. it is his duty to take the proper steps to protect any shipper whose goods may have been jettisoned for the general safety ==> if the captain does not comply with his duty under 851. liquidation and distribution of any gross average. the captain is required to initiate the proceedings for the adjustment. as well as of those appraising and taking part in the unloading. shall be appraised at the current value. the adjustment. unless there is an agreement to the contrary. without taking the bills of lading into consideration. Merchandise lost. 854. the sails. which constitutes the gross average. and that of those which constitute the average. If an agreement is not possible. The freightage shall represent 50 per cent by way of contributing capital. deducting onethird by reason of the difference between new and old. cables. and expenses of unloading. In any case the shipowner and the captain shall be liable to the shippers for the damages from the jettison. This deduction shall not be made with respect to anchors and chains. and distribution of gross averages shall be held privately. the merchandise should have been sold in a foreign port. Should it not be visible at the time of unloading. the value shall be that stated in the invoices of the purchase issued in the port of shipment. shall be taken as the contributing capital. If the liquidation is to be made in the port of departure. Under Art. The same shall take place with that which is on board and is not included in the bills of lading or inventories. and in those of each average those corresponding to the vessel and to the cargo. the amount corresponding to each must be estimated and stated distinctly. or the net proceeds obtained at the sale thereof. 851. as may appear from a material inspection of the same. 855. according to the cases. The merchandise loaded on the upper deck of the vessel shall contribute to the gross average should it be saved. The vessel shall be appraised at its true value in the condition in which it is found. the value of the merchandise in the port of arrival. but there shall be no right to indemnify if it should be lost by reason of having been jettisoned for common safety. After the experts have been appointed by the persons interested. If the merchandise should be damaged. if the average should be visible at a mere glance. 6. the captain shall apply to the competent judge or court. separating these losses and damages from those arising from the inherent defect of the things. The merchandise saved which is to contribute to the payment of the gross average shall be valued at the current price at the port of unloading. that in their appraisements or estimates and accounts they set down separately and accurately the expenses and damages pertaining to each average. sale. liquidation. also stating separately whether or not there are damages proceeding from inherent defect of the thing and not from accident of the sea. customs duties. if the storage on the upper deck was made without the consent of the latter. At the instance of the captain. Art. in which case did shall be so done if the interested parties agree. Art. provided that it is done within forty-eight hours from the unloading. or by the court. without prejudice to the action they may bring to demand indemnity from him. it shall be appraised at its true value. and should there be none. the shipowner or shipper has the right to maintain an action against the captain for indemnification for the loss --> this does not involve the suppression of the right of action of the shipper against the shipowner Art. 8. he takes the risk PAGE 78 .TRANSPORTATION AND MARITIME LAW For this purpose the captains shall be obliged to demand of the expert appraisers and of the contractors making the repairs. Art. who shall be the one in the port where these proceedings are to be held in accordance with the provisions of this Code. 853. For this purpose. and other equipment of the vessel rendered useless for the purpose of saving it. 3. said examination may be made after the delivery. With regard to the merchandise. and after the acceptance. the value of the merchandise loaded shall be determined by the purchase price. Art. or utilization of the merchandise. the ship agent or the shippers shall demand the liquidation. 7. The goods may be stowed on deck (1) with the consent of the shipper or (2) without his consent --> if stowed on deck with his consent.

857. shall proceed with the examination and appraisement of the averages in the manner prescribed in Articles 853 and 854. the captain does so at his own risk. If the risk of enemies. in so far as they are applicable. and he shall be liable to the owners of the goods averaged for the damages they may suffer through his delay or negligence. and who may attend the meeting without the right to vote. The distribution of the gross average shall not be final until it has been agreed to. according to a statement of experts. or in the absence thereof. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage according to usage and custom. the appraisements. 2. has been concluded by the experts. 3. 868. 819. after an examination of the liquidation and a hearing of the persons interested who may be present or of their representatives. as the case may be. privateers. the captain cannot protect himself by showing that they are damaged or lost by dangers of the sea The carriage of gasoline on deck by coastwise or interisland vessels is allowed by marine regulations --> the loss of petroleum for common safety and benefit will constitute a general average. 2. expert examinations. The 50 per cent of the amount of the freightage. 865. and otherwise he shall include it in the exordial of the liquidation. after examining the circumstances of the case. Rules 2 to 7. the reason should be considered well-founded. as a result of this examination. at the request of the captain. which shall be entered in the minutes in order that they may make use thereof in the manner they may consider advisable. Immediately thereafter he shall proceed with the distribution of the amount of the average. (4) Liquidation of Art. 858. In order to effect the liquidation. or if they should have been rendered useless or lost through bad stowage or negligence in their care. PAGE 79 . it shall be distributed pro rata among the goods which are to cover the same. deducting the remaining 50 per cent for wages and maintenance of the crew. the goods saved shall be proceeded against. (3) Liquidation of general average particular average Art. the liquidator shall examine the protest of the captain. or by reason of any accident of the sea disabling it to navigate. if possible. if necessary. Art. for which purpose he shall fix: 1. and all the contracts which may have been made among the persons interested in the average. in accordance with the rules established in Article 854. which shall be signed by all. and accounts of repairs made. drafting and entering the proper minutes. Art. The captain shall have the deciding vote. 820. he shall assemble the officers and shall summon the persons interested in the cargo who may be present. the arrival at the nearest and most convenient port shall be agreed upon.TRANSPORTATION AND MARITIME LAW upon himself of the perils arising from the dangers of the sea and any damage will be borne by the owner [particular average] --> if stowed on deck without his consent. the repairs. in so far as they are applicable. That of the vessel in its actual condition. and the persons interested in the cargo may make the objections and protests they may deem proper. the entire record shall be turned over to the liquidator appointed. as the case may be. Rules 2 to 7. the captain may defer the delivery thereof until payment has been made. 866. 869. 2. The experts whom the court or the persons interested may appoint. Art. Art. he shall call attention thereto in order that it may be corrected. and. Art. in this case. in the log book. If the persons contributing should not pay the amount of the contribution at the end of the third day after having been required to do so. shall proceed with the examination and appraisement of the averages in the manner prescribed in Articles 853 and 854. in order that he may proceed with the distribution of the average. 867. If during the voyage the captain should believe that the vessel cannot continue the trip to the port of destination on account of the lack of provisions. which he shall determine by the value of the cargo. with the log book. if any. until it has been approved by the judge or court. comparing it. After the appraisement of the goods saved and of those lost which constitute the gross average. Arrivals Under Stress (a) Causes Art. he should find any defect in the procedure which might injure the rights of the persons interested or affect the liability of the captain. until payment has been made from their proceeds. or pirates. well-founded fear of seizure. If the person interested in receiving the goods saved should not give security sufficient to answer for the amount corresponding to the gross average. made on the vessel. If. it shall be the duty of the captain to collect the amount of the contribution. Art. or pirates should not have been well known. An arrival shall not be considered lawful in the following cases: 1. The experts whom the court or the persons interested may appoint. Art. After the liquidation has been approved. The contributing capital. After the amount of the gross average has been determined in accordance with the provisions of this Code. privateers. 869. the accounts of the same approved by the persons interested or by the judge or court. and if.

after examining the circumstances of the case. or pirates. If the entire cargo or part thereof should appear to be damaged. In a foreign port. should there be any. and carry it out with the knowledge of the person interested in the cargo. (2) wellfounded fear of seizure. the captain may request of the competent judge or court. except in cases of force majeure. If the defector the vessel should have arisen from the fact that it was not repaired. the expenses shall be divided proportionately between the value of the vessel and that of the cargo. the sale of all or of part of the former. or of the consul in a proper case. and the persons interested in the cargo may make the objections and protests they may deem proper. privateers. it should be necessary to unload. 4. it shall be the duty of the Filipino consul. which shall be signed by all 3. equipped. justify the legality of his conduct. it shall be the duty of the Filipino consul. or pirates. and if. 823. should there be any. Otherwise. the unloading must be necessary to make repairs or there must be danger that the cargo may suffer damage 2. if during the voyage the vessel cannot continue the trip to the port of destination due to : (1) lack of provisions. The captain shall be responsible for the damages caused by his delay. Arrival under stress: Arrival of a vessel at the nearest and most convenient port. and an entry in the book. or lack of skill on the part of the captain exists in the act causing the damage. Whenever malice. Art. consul. they shall be chargeable against the owners of the merchandise for whose benefit the act was performed. and the person taking cognizance of the matter shall authorize it. Art. after an examination and declaration of experts. and in the second. Art. where there is one. he shall assemble the officers and shall summon the persons interested in the cargo who may be present. drafting and entering in the log book the proper minutes. The expenses of an arrival under stress shall always be for the account of the shipowner or agent. rigged. and prepared in a manner suitable for the voyage. in accordance with the provisions of Article 624. to give the authorization. The custody and preservation of the cargo which has been unloaded shall be entrusted to the captain. and in the second. if after the cause of the arrival under PAGE 80 . under the penalty of answering to the shipper for the price the merchandise would have brought if it had arrived in good condition at the port of destination. negligence. or his representative. Requisites for the captain to unload the cargo arriving under stress: 1.TRANSPORTATION AND MARITIME LAW manifest. in a proper case. 822. (c) Expenses Art. but they shall not be liable for the damages which may be caused the shippers by reason of the arrival. and who may attend the meeting without the right to vote. privateers. the captain must request authorization from the competent judge or court for the removal. which shall be entered in the minutes in order that they may make use thereof in the manner they may consider advisable. In the first case. or his representative. If in order to make repairs to the vessel or because there is danger that the cargo may suffer damage. assembly of the officers including all interested parties 2. drafting and entering the proper minutes. the expenses shall be divided proportionately between the value of the vessel and that of the cargo. 821. or there should be imminent danger of its being damaged. 824. it should be necessary to unload. they shall be chargeable against the owners of the merchandise for whose benefit the act was performed. the arrival at the nearest and most convenient port shall be agreed upon. 822. and other formalities required by the case. the ship agent and the captain shall be jointly liable. Formalities : 1. 3. If in order to make repairs to the vessel or because there is danger that the cargo may suffer damage. entry in the log book of the objections and protests of the persons interested in the cargo Art. If the unloading should take place for both reasons. The captain shall. 819. the reason should be considered well-founded. or from some erroneous order of the captain. the captain must be authorized by either a competent court or the Phil. 825. who shall be responsible for the same. or by reason of any accident of the sea disabling it to navigate. In the first case. want of foresight. which shall be signed by all. in the log book. to give the authorization. If the unloading should take place for both reasons. advertisements. the captain must request authorization from the competent judge or court for the removal. the expenses shall be for the account of the ship agent or owner. The captain shall have the deciding vote. and based on positive and provable facts. and carry it out with the knowledge of the person interested in the cargo. depending on the port of arrival (d) Responsibility of Captain Art. provided the latter is legitimate. where there is one. the expenses shall be for the account of the ship agent or owner. In a foreign port. If during the voyage the captain should believe that the vessel cannot continue the trip to the port of destination on account of the lack of provisions. (3) by reason of any accident of the sea disabling it to navigate (b) Formalities Art. well-founded fear of seizure.

the owner of the third vessel causing the collision shall be liable for the losses and damages 6. The vessel which is not properly moored or does not observe the proper distances. has the presumption against itself. If the cause of the arrival should have been the fear of enemies. and even if wrong. he should not continue the voyage. the shipowner shall be liable for the losses and damages 2. 832. a vessel which is properly anchored and moored may collide with those nearby by reason of a storm or other cause of force majeure --> under 832. a deliberation and resolution in a meeting of the officers of the vessel and persons interested in the cargo who may be present. where two vessels collide with each other without their fault but by reason of the fault of a third vessel -> under 831. 3. 7. privateers. or which has been left without watch. shall precede the departure. a vessel which is properly anchored and moored should collide with those nearby. 5. is not responsible for the result. in accordance with the provisions contained in Article 819. the time between the moment when the risk of collission begins and the moment when it has become a practical necessity. 9. he shall be liable for damages caused by the delay 3. 4. The same rule applies to those vessels which do not have buoys to indicate the location of its anchors to prevent damage to these vessels which may approach it. in an effort to avoid an imminent collision due to the fault of another vessel. When 2 vessels are about to enter a port.TRANSPORTATION AND MARITIME LAW stress has ceased. does not absolve the steamship which has suffered herself and a sailing vessel to get into such dangerous proximity as to cause inevitable harm and confusion. Each to his own damage --> particular damage (2) Culpable 1. the injury occasioned shall be considered as particular average of the vessel run into. has also against itself the presumption. no rule is applicable because none is necessary. even when the crew of the latter has received word to lift anchor. it has been held that fault on the part of the sailing vessel at the moment preceding a collission. each vessel and its cargo shall bear its own damages. Collisions Collision: impact of two vessels both of which are moving Allision: striking of a moving vessel against one that is stationary Cases of collision : 1. the fault is presumed to be imputable to the one who arrived later. by reasons of a storm or other cause of force majeure. The vessel which leaves later is presumed to have collided against one who has left earlier. 2. unless it can be proved that there was no fault on its part. causing them damages. The captain has the duty to continue the voyage without delay after the cause of the arrival under stress has ceased--> otherwise. during the third division of time. where it cannot be determined which of the 2 vessels is at fault --> under 828. The vessel which is moored at a place not used for the purpose. due to the fault. each vessel shall suffer its own losses. if they collide. cannot create responsibility on the part of said vessel with the right of way. 2. the farther one must allow the nearer to enter first. The presumption also works against the vessel with spread sails which collides with another which is at anchor. (a) Classes and Effects (1) Fortuitous Art. When 2 vessels meet. negligence or lack of skill of the captain. 3. sailing mate or the complement of the vessel --> under 826. all the time up to the moment when the risk of collision may have said to have begun --> within this zone. when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason. the smaller should give the right of way to the larger one. If a vessel should collide with another through fortuitous event or force majeure. the time between the moment when collission has become a practical certainty and the moment of actual contact Effect of fault of privileged vessel during third zone : If a vessel having a right of way suddenly changes its course during the third zone. each vessel shall suffer its own losses. A vessel leaving port should leave the way clear for another which may be entering the same port. and a collision results as a consequence. or which is improperly moored or does not have sufficient cables. 6. that is. and both shall also be solidarily responsible for the losses and damages caused to their cargoes 4. Thus. There is also a presumption against the vessel which sets sail at night. but as regards the owners of the cargoes. Art. 830. such act may be said to be done in extremis. 8. and the act of the sailing vessel having been done in extremis and even wrong. or pirates. If. collision due to fortuitous event or force majeure --> under 830. each vessel shall bear its own damages 5. and cannot move. The steamer having a far greater fault in allowing such proximity to be brought about is chargeable with all the damages resulting from the collission. both vessels shall be jointly and severally liable 3. the vessel run into shall suffer its own damages and expenses Nautical Rules to determine negligence : 1. Each vessel is free to direct its course as it deems best with reference to the movements of the other vessel. Zones in time of collisions (3 time zones): PAGE 81 . due to the fault of both vessels --> under 827.

as well as that which. 838. 827. through the fault. 835. under which the evidence disclosing that both vessels are blameworthy. In the cases above mentioned the civil action of the owner against the person causing the injury as well as the criminal liabilities. (c) Liabilities (1) Shipowner or agent Art. Art. the owner of the third vessel shall indemnify the losses and damages caused. Relation of Art. both the owner and the shipagent should be declared liable Art. Art. and both shall be solidarily responsible for the losses and damages occasioned to their cargoes. their presence shall not exempt the captains from the liabilities they incur. When the value of the vessel and her appurtenances should not be sufficient to cover all the liabilities. sailing mate. Where the obligation arises from tortious act and not from contract. A vessel which. 827 is applicable not only to the case where both vessels may be shown to be actually blameworthy but also to the case where it is obvious that only one was at fault but the proof does not show which Under Arts. (3) conditions. others Art. With respect to damages caused to persons or to the cargo. the owners of neither can successfully maintain an action against the other for the loss or injury to his vessel (b) Presumption of loss by collision Art. 837. is lost during the voyage or is obliged to be stranded in order to be saved. without prejudice to the criminal liability which the latter may incur. 827. The provisions of the preceding article are applicable to the case in which it cannot be determined which of the two vessels has caused the collision. If a vessel should be forced by a third vessel to collide with another. Art. 835 establishes a condition precedent before any action for the recovery of damages arising from collisions may be admitted --> presentation of a protest or declaration within 24 hours before the proper authorities [competent authority at the point where the collision took place or of the first port of PAGE 82 .TRANSPORTATION AND MARITIME LAW Art. 828 must be considered an extension of Art. shall be presumed as lost by reason of collision. the shipowners cannot successfully maintain an action against the other for the loss or injury to his vessel Art.831. 828. 836. The civil liability incurred by the shipowners in the cases prescribed in this section. If a vessel should collide with another. or that of the first port of arrival of the vessel. (3) Inscrutable Fault Art. if in Philippine territory and to the consul of the Philippines. if it occurred in a foreign country. after an expert appraisal. Art. Defense of due diligence of a good father of a family in the selection and vigilance of the officers and crew cannot be used to render nugatory the solidary liability under 827 Under the express provisions of 827. the absence of a protest may not prejudice the persons interested who were not on board or were not in a condition to make known their wishes. the owner of the vessel at fault shall indemnify the losses and damages suffered. which may be proper. not only in the cse where both vessels may be shown to be actually blameworthy but also in the case where it is shown that only one ws at fault but the proof does not show it --> it makes no difference that the negligence imputable to the two vessels may have differed somewhat in character and degree and that the negligence of the sunken ship was somewhat more marked than that of the ther The doctrine of last clear chance cannot be raised --> under the express provisions of Art. but the latter shall have the right to be indemnified by the pilots. pilot. 828 Art. sinks immediately. 827 The rule of liability under Art. protests Art. 590 and 837] Damages may be recovered to the extent of what may be salvaged or of the freightage received or of the value of the insurance recoverable (2) Captain. the indemnity due by reason of the death or injury of persons shall have preference. The action for the recovery of losses and damages arising from collisions cannot be admitted if a protest or declaration is not presented within twenty-four hours before the competent authority of the point where the collision took place. or any other member of the complement. 587. each one shall suffer its own damages. negligence. Limited liability : limited to the value of the vessel and the freight earned during the voyage [provided for in Arts. 834. If the vessels colliding with each other should have pilots on board discharging their duties at the time of the collision. having been obliged to make a port to repair the damages caused by the collision.833. the captain thereof being civilly liable to said owner. 829. or lack of skill of the captain. in case of collision between two vessels at sea. are reserved. 827 and 828. upon being run into. 826. 827 to Art. shall be understood as limited to the value of the vessel with all its appurtenances and freightage earned during the voyage. If the collision is imputable to both vessels. both are solidarily liable for the loss of cargo carried by either to the full extent of the value thereof.

by running against another vessel or thing at sea. when the vessel makes an arrival under stress 2. is a derelict a vessel. loss of a vessel at sea. Art.a service which one person. negligence. without sufficient cause. 840. the cargos saved shall be distributed among the rest in proportion to the amount which each one is able to take. or (2) because the vessel put to sea was insufficiently repaired and equipped. under 624. The goods saved from the wreck shall be specially bound for the payment of the expenses of the respective salvage.TRANSPORTATION AND MARITIME LAW arrival of the vessel or to the consul of the Philippines if it occurred in a foreign country] The requirement of protest is not necessary with respect to small boats engaged in river and bay traffic and boats manned by a group of fishermen Reason for requiring protest: Neccesity of preventing fictitious collisions and improper indemnities Summary of cases where protest is required: 1. shall be entitled to a like reward. and the amount thereof must be paid by the owners of the former before they are delivered to them. 2616) PAGE 83 . as in cases of shipwrecks. assist in saving a vessel or its cargo from shipwreck. before two sea officials. Shipwreck: Loss of a vessel at sea. 612. under 612. under 835. or on coast --> renders the ship incapable of navigation Under 841. there was a probable. and with preference over any other obligation if the merchandise should be sold. the vessel or its cargo shall be beyond the control of the crew. the captain of the wrecked vessels shall enter a protest against him. the captain shall be liable Art.-. The losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck or stranding shall be individually for the account of the owners. 839. not being included in the above paragraph.A ship or her cargo which is abandoned and deserted at sea by those who are in charge of it. or lack of skill of the captain. under 612. in case of maritime collisions Art. if at the time the services were rendered. the designation thereof to be made by the captain with the concurrence of the officers of his vessel. Those who. the part which may be saved belonging to them in the same proportion. where the vessel has gone through a hurricane or when the captain believes that the cargo has suffered damages or averages 4. the goods of the highest value and smallest volume shall be saved first. or because the vessel put to sea insufficiently repaired and equipped. If several vessels sail under convoy. the ship agent or the shippers may demand indemnity of the captain for the damages caused to the vessel or to the cargo by the accident. deserted by her captain with no intention to return. forwarding the proceedings to the Secretary of the Department of Foreign Affairs for continuation and conclusion. and including it in the proceedings he must institute in accordance with the provisions contained in Article 612. running against a thing at sea. When in case of shipwreck. without any hope of recovering it. and 621. may be the subject of salvage. where the vessel is shipwrecked 3. and picked up and conveyed to a safe place by other persons. of the losses and damages resulting therefrom. 843. or such property recovered from actual peril or loss. the Section 1. Salvage Law (Act No. Shipwrecks Art. the latter shall be entitled to a reward for the salvage. either by being swallowed up by the waves. though not abandoned. or shall have been abandoned by them. 841. a schooner which has capsized in the high seas. Where a ship and its cargo are saved together. If the wreck or standing should be caused by the malice. in accordance with the provisions contained in Articles 610.The 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. ratifying the protest within twenty-four hours after arrival at the first port. the Filipino consul in said port shall hold a summary investigation of the accident. 842. the salvage allowance should be charged against the ship and cargo in proportion of their respective values. threatening danger to the vessel or its cargo --> if the vessel towed is aided in escaping present or prospective danger. and any of them should be wrecked. of if having taken place in the open seas. preserving the goods or ship which the owner or those entrusted with the care of them either abandoned in distress at sea or are unable to protect and secure ---> a permit is required to engage in salvage business Shipwreck-means a ship which has received injuries rendering her incapable by navigation. and the vessels should make a foreign port. If it is not possible to transfer to the other vessels the entire cargo of the vessel wrecked. in case the wreck or stranding is due to the (1) malice. or without any intention of returning it --> if those in charge of the property left it with the intention of finally leaving it. or on the coast Derelict. If the collision should take place between Philippine vessels in foreign waters. 624 and 843.e negligence. the liability of the latter is limited to such part of the salvage compensation due for the entire service as is proportionate to the value of the ship Art. to receive what may correspond to him. or lack of skill of the captain. it is a derelict and the change of their intention and an attempt to return to it will not change its nature ex.-. either by being swallowed up by the waves. If any captain should refuse. Salvage. renders to the owner of a ship or goods by his own labor. 4. the service is one of salvage an the towage is merely incidental same as in general averages and neither is liable for the salvage due from the other Where a personal action is brought by the salvor against the owner of the ship. 614. derelict or recapture -.

and the other half to the insular government. it may be very much larger than mere quantum meruit --> as a reward for perilous services Such contracts for salvage will not be set aside unless corruptly entered into. Salvor has an interest in the property. a joint owner and if. shall order: a. without the consent of such captain or person acting in his stead. his right of possession. they being unknown. the owner or his representative shall have the right to the delivery of the vessel or the things saved. The advertisement within the 30 days subsequent to the salvage. of all the details of the disaster. this is called a lien. If. and otherwise to the provincial treasurer or municipal mayor. while the vessel or thing saved are at the disposition of the authorities. where the crew is not entitled to compensation separate from that of the vessel Section 2. after deducting the expenses and the proper reward shall be deposited in the insular treasury. and can look to the salvaged vessel for its share Captain towing vessel cannot invoke equity in quasi-contract of towage --> there is an express provision of law (Art. under compulsion or contrary to equity and good conscience PAGE 84 . during the danger. Section 9. The crew of the vessel shipwrecked or which was in danger of shipwreck. gains a right of possession which he can maintain against the true owners. its validity may be impugned because it is excessive. After the salvage is accomplished. if the port has a collector. Payment of compensation where vessel and cargo salvage : where a ship and its cargo are saved together. b. to whom a salvage is reported.TRANSPORTATION AND MARITIME LAW Rights of finder of derelict: The finder who takes possession with the intention of saving her. then the crew does not have any interest or rights with the renumeration pursuant to the contract. and c. The Collector of Customs.wherein the compensation is dependent upon success (2) rendered under a contract for a pier diem or per horam wage. shall convey and deliver such vessel or merchandise. no one shall take from the sea. But the owner thus abandons temporarily. That the things saved be safeguarded and inventoried. He who shall have failed to comply with the provisions of Section 3. Section 3. owner or a representative of either of them. the delivery shall not be made until the matter is decided by the CFI (RTC) of the province. Section 8. service voluntarily rendered when not required as an existing duty or from special contract 3. Section 6. in whole or in part. such authorities shall order their delivery to such owner or his representative. success. and their proceeds. The sale at public auction of the things saved which may be in danger of immediate loss or those whose conservation is evidently prejudicial to the interests of the owner. the crew of the salvaging ship is entitled to salvage. in one of the local newspapers or in the nearest newspaper published. provided that there is no controversy over their value. or made under fraudulent representations. payable at all events Where the compensation is dependent upon success. or coast merchandise or effects proceeding from a shipwreck or proceed to the salvage of the vessel. or that the services rendered contributed to such success Distinction between salvage and towage is of importance to the crew of the salvaging ship : if the contract for towage is in fact towage. provided that he pays or gives a bond to secure the expenses and the proper reward. he acquires a right to be paid for his service a reasonable and proper compensation out of the property itself. a marine peril 2. the things saved shall be sold at public auction. If three years shall pass without anyone claiming it. the salvage allowance should be charged against the ship and cargo in the proportion of their respective values. to all intents and purposes. as soon as possible. one-half of the deposit shall be adjudged to him who saved the things. or the person acting in his stead. This is not presumed to be intentional. or municipal mayor. and it may be required to be reduced to an amount proportionate to the circumstances. BUT if the owners of the respective vessels are of a salvage nature. in return. 2142. If the captain of the vessel. c. is present. when no objection is made to such sale. as in the case of general average Section 5. b. which is transferred to the finder who becomes bound to preserve the property with GF and bring it to a place of safety for the owner's use. No claim being presented in the three months subsequent to the publication of the advertisements prescribed in subsection (c) of Section 5. with a statement of the mark and number of the effects requesting all interested persons to make their claims. He is not bound to part with the possession until he is paid or the property is taken into the possession of the law preparatory to the amount of salvage being legally asserted Elements of a valid salvage: 1. the property is lost he must bear his share like other joint owners. provincial treasurer. The owner does not renounce his right of property. but it is not a debt due by the owner to the salvor for services rendered but upon the principle that the service creates a property in the thing saved --> he is. He who shall save or pick up a vessel or merchandise at sea. the owner or his representative shall claim them. He who shall have commenced the salvage in spite of opposition of the captain or his representative. Section 7. If. to the Collector of Customs. a clear mistake or suppression of important facts. Kinds of salvage service: (1) voluntary . Otherwise. or from the shores. Section 4. The following shall have no right to a reward for salvage or assistance: a. nor does the finder acquire any such right. and a bond is given by the owner or his representative to secure the payment of the expenses and the proper reward. in the absence of the captain of the vessel. an agreement is entered into concerning the amount of the reward for salvage or assistance. NCC) applicable to the relationship of quasi-contract of towage.

the Seward sent her boat to the Hondagua for a heaving line. a liberal compensation. In a case coming under the last preceding section. being a duty of humanity and not for reward --> the Salvage Act. James. in proportion to their respective salaries. they are bound to accept additional assistance if offered Taking passengers from a sinking ship. and heroic endeavor in saving life and property in peril.TRANSPORTATION AND MARITIME LAW Section 10. The Hondagua went full speed ahead. shall have been exposed to the same dangers shall also have a right to participation in the reward. efficiency. In response to signals from the Hondagua. as well as whatever taxes or duties they should pay for their entrance. Issues : Is the plaintiff entitled to recover renumeration for saving the cargo as well as for saving the ship? What is the reasonable compensation which should be allowed? Held : There is no question as to the liability of defendant for the service rendered by plaintiff. whereupon the Seward flew the international distress signal asking for assistance. the reward for salvage or assistance shall be fixed by the RTC of the province where the things salvaged are found. taking into account principally the expenditures made to recover. entirely or partially. in equal parts. the Seward signaled that the leak was gaining rapidly. No other person has the right to interfere with the salvage of a vessel or cargo if the salvor is able to effect the salvage with fidelity and vigor --> if their means are inadequate. and the remainder of the crew of the latter vessel.000 and that the value of the cargo was approximately P 54. the alleged value of the salvage service. though he was not present when the salvage service was rendered --> remuneration is awarded on account of the danger to which the service exposes their property and the risk which they run of loss in suffering their vessels engaged in such perilous undertaking. If a vessel or its cargo shall have been assisted or saved. the time employed. energy. At this juncture. and the value of such things after deducting the expenses. and all the remainder of the crew the other fourth of the reward. taken with the condition of the sea. the danger to which they and their vessels were exposed as well as that which menaced the things recovered or salvaged. seeking to recover from defendant P 75. as well as the reward for salvage or assistance. the captain. with the latter in tow. If in the salvage or in the rendering of assistance different persons shall have intervened the reward shall be divided between them in proportion to the services which each one may have rendered. the reward for salvage or for assistance shall be divided between the owner. in case he is successful. at the mouth of the Saigon River. The owner of the salving vessel has always been considered as entitled to salvage reward for the use of his vessel in rendering salvage services. the law allows him. first. the expenses of their custody. Laden with a cargo of rice. Both appealed. other than that of the carrier. BUT should not be so high as to cause vessels in need of assistance to hesitate because of ruinous cost "Public policy encourages the hardy and adventurous mariner to engage in these laborious and sometimes dangerous enterprises. in the absence of an agreement to the contrary. so as to give the owner a half. (2) to compensate the use and service of the vessel as an indispensable instrument for the salvage. (3) recognizes the danger and risk to which the crew and the vessel were exposed to in saving the ship and property and life. 1915 the steamer Seward owned by Macondray & Co. giving salvors of human life a fair share or remuneration offered to salvors of the vessel. From the proceeds of the sale of the things saved shall be deducted. Plaintiff filed an action in the CFI of Manila. then there shall be deducted the expenses of salvage. Section 14. the zeal demonstrated. Nor is there any dispute over the fact that the service rendered was a salvage service and renumerable as such. The towing occupied some 4 or 5 hours and covered a distance of 20 to 30 miles. without rendering any service in rescuing the vessel. the captain a fourth. was sighted. Seward had indicated that it had sprung a leak and wished to be taken in tow. encountering a moderately high sea. shall be a charge on the thing salvaged or their value. left Saigon for the Philippine Islands. the excessive expenses occasioned. Those who. and the cargo was owned by shippers whose names do not appear of record. in order to save persons. Reasons for allowing salvage compensation to salving vessel: (1) to reward promptness. by another vessel. advertisement. and in case of doubt. until their arrival at Cape St. The CFI ordered the defendant to pay P 4.000." Section 11. and auction. MRR vs Macondray 37 Phil 850 F: On April 6. and from the net amount remaining shall be taken the reward for the salvage or assistance which shall not exceed 50% of such amount remaining. and her master felt compelled to return to Saigon. or save the vessel or the cargo or both. conversation. as well as in the absence of an agreement. the salvage allowance should be apportioned between the ship and cargo in the proportion of their PAGE 85 . Shortly afterwards.000 to the plaintiff. The Hondagua changed her course and approached the Seward. The defendant company had no interest in the cargo. the weight of which. Where a ship and its cargo are saved together. and with a view to withdraw from him every temptation to embezzlement and dishonesty. Enacted 2/4/16. by means of which a hawser was passed from the Hondagua to the Seward and the former. This Act shall take effect on its passage. is not a salvage service. then proceeded at half speed towards Saigon. The expenses of salvage. refers to a situation where both lives and property were simultaneously imperiled and both are rescued at the same time Section 13. The court found that the value of the Seward upon her arrival at Cape St. caused the vessel to spring a leak. James did not exceed P 20. The amount should be liberal enough to cover the expenses and to give an extra sum as a reward for the services rendered. should be liberal enough to offer an inducement to others to render like services in similar emergencies in the future. Section 12. the steamship Hondagua owned by plaintiff. the number of persons who aided.000. as a result of services carried on with a view to saving both. the services rendered.

and the danger to which such property was exposed. When both vessels were approaching the vicinity of Negros Oriental. in view of the smoothness of the sea and the fairness of the weather. in order to evacuate its passengers no were the cargo in danger of perishing. That there was absence of danger is shown by the fact that said vessel or its crew did not even find it necessary to lower its launch and two motor boats. no recovery can be had in this action in regard to the service rendered to the cargo. There was no marine peril in this case. thereby also releasing the MV Don Alfredo. a sister ship of MV Don Alfredo. but also as between portions of the cargo belonging to different owners. the Hondagua was earning about P 300/day. In determining the amount of the award.000 is adequate for the service rendered. the plaintiff as captain of MV Henry. and it is not proper to make the ship or the ship's owner liable for the whole amount. the plaintiff caused the tow lines to be released. the port of destination. In consenting to plaintiff's offer to tow the vessel. This delay caused her to enter Iloilo. as it was far from any island or rocks. (4) the risk incurred by the salvors in rescuing the property from the impending peril. or well-secured and connected with two lines from the MV Henry. and if so. the plaintiff caused the latter vessel to be tied to. Answering the SOS call. (5) the value of the property salved. but the interests of commerce should also be considered. a sister vessel was known to be on its way to succor it. The personal liability of each must be limited to the portion of the salvage charge which should be borne by his own property. but the unloading of her cargo was not thereby retarded. Although said vessel was drifting towards the open sea. the MV Henry. At about 8:25 p. there was no danger of its foundering or being stranded. and headed towards the MV Don Alfredo. "Salvage" has been defined as the compensation allowed to persons by whose assistance a ship or her cargo has been saved.and with the consent and knowledge of the captain and/or master of the MV Don Alfredo. succeeded in getting near the MV Don Alfredo -. the ff. or in recovering such property from actual loss. circumstances are taken into consideration: (1) the labor expended by the salvors in rendering the salvage service. the defendant through its PAGE 86 . At the request and instance of the captain of MV Don Alfredo. for which reason. in whole or in part. In this case. the fixing of the compensation goes beyond the limits of a quantum meruit for the work and labor done and involves the assessment of a bounty. the ff. as evidenced by a written certificate to this effect executed by the Master. There was no danger that defendant's vessel would sink. which was quite smooth. (3) the value of the property employed by the salvors. derelict or recapture. In applying these criteria to this case. those who assist in saving a vessel or its cargo from shipwreck. The service rendered did not involve any further expenditure of labor on the part of the salvors.m. 1958. shall be entitled to a reward (salvage). under the command of the plaintiff. there was moonlight. and neither is liable for the salvage due from the other. May 1. skill and energy displayed in rendering the service and saving the property. in the early hours of the morning instead of the late afternoon of the previous day. and the Second Engineer of the MV Don Alfredo. as of bounty. the sum of P 1. The rule of liability must be the same where a personal action is instituted against the owners of the one or the other. The waves were small and too slight. (2) the promptitude. Not only is the salvage charge a separate and divisible burden as between ship and cargo. the same as in a case of general average. the danger from which the Seward was rescued was real since the ship was confronted by a serious peril. form impending peril on the sea. the weather was fair. The amount to be allowed is in part determined upon considerations of equity and public policy. was sighted heading towards the two vessels. its anchor could be released. and (6) the degree of danger from which the property was rescued.contract of towage. the aim should be to hold out to seafaring men a fair inducement to the performance of salvage service without fixing a scale of compensation so high as to cause vessels in need of such services to hesitate and decline to receive them because of the ruinous cost. including the services of officers and crew. Inc. As found by the LC.in fact as near as about 7 meters from the latter ship -. Issue: WON the service rendered by plaintiff constituted salvage or towage. due to engine failure and the loss of her propeller. it was drifting slowly southward from Negros Island towards Borneo in the open China Sea. are brought into the custody of the court as a result of a proceeding in rem. 1 of the Salvage Law. WON plaintiff may recover from defendant compensation for such service. 1958. that there were only ripples on the sea. Finally. During the towing of the vessel on the same night. which was considered reasonable compensation for her use. There is no common liability for the amounts due from the ship or other portions of the cargo when the ship and cargo. of May 1. for the entire cost of the service. That the salvor is entitled. But when the claim is put upon the basis of salvage. owned by the defendant Carlos Go Thong & Co. as in case of shipwreck. At about 8:00 p. no unusual display of skill and energy and the condition of the sea was not such as to involve any special risk either to Hondagua or her crew. he will get judgment only for such amount of reward as the court finds to be due in respect of the value of that property which is before the court. so much so. Held :(1) According to Sec. to something more than mere renumeration for his own work and the risk incurred by him is conceded. In fixing the compensation. (2) But plaintiff's service can be considered as a quasi. at least between himself and the shipper. who were then on board the latter ship at the time of the occurrence. at the mercy of a moderate easterly wind. or of the ship's owner. altered the course of said vessel.m. the Chief Officers. If one who have salved both ship and cargo brings before the court in his salvage action only the ship. it did not drift too far from the place where it was. which was then sailing from Dumaguete City. plaintiff as captain received an SOS or distress signal by blinkers from the MV Alfredo. or either. to prevent such occurrence. or only the cargo. Although defendant's vessel was in a helpless condition due to engine failure. Towage is not considered a salvage service of high order of merit and where the risk is inconsiderable and other conditions favorable. the compensation to be allowed should be modest in its amount. which plaintiff found to be in trouble. All that the vessel's crew members could no do was to move the vessel on its own power. a vessel of William Lines.TRANSPORTATION AND MARITIME LAW respective values. clear and good. the Chief Engineer. on the same day. the MV Lux. In case of danger of stranding. the latter might have been liable. Barrios vs Go Thong 7 SCRA 535 F: Plaintiff Barrios was the captain of MV Henry I. Under the charter party contract under which she was operating. But where the owner of the cargo has not been made a party to the action. considering that even before the plaintiff-appellant extended the help to the distressed ship. circumstances are pertinent : the Hondagua was delayed in her voyage about nine hours. That did not make the vessel a quasi-derelict. and the latter had the MV Don Alfredo in tow and proceeded towards the direction of Dumaguete City. If it had been alleged and proved that the ship was unseaworthy when she put to sea or that the necessity for the salvage service was due to the negligence of the master.

000+ to Union Insurance.New York. Towage is not a charter party. The consignee also filed a claim against Viva Customs Brokerage for the unrecovered spillage. as common carrier A charter party is a contract by virtue of which the owner or agent of a vessel binds himself to transport merchandise or persons for a fixed price. to the exclusion of the crew of the said vessel. These claims having been rejected. PPI unloaded the cargo. including the master and the crew. the motor vessel Hongkong Island for the shipment of bagged urea from Odessa. NCC) applicable to the relationship created in this case. Charter Parties PAGE 87 . 1993) F: Planters purchased urea fertilizer from Mitsubishi. as in the case of a timecharter or a voyage-charter. thereby impliedly entered into a juridical relation of towage with the owner of the MV Henry. the consignee went to Union. may be entitled to renumeration. notwithstanding the charter of the whole or portion of a vessel. SPECIAL CONTRACTS OF MARITIME COMMERCE 1. There are 2 kinds : (1) contract of affreightment which involves the use of shipping space or vessels leased by the owner in part or as a whole. unless such right is expressly granted in the contract (2) as to time (a) until a fixed day or for a determined number of days or month (b) for a voyage (3) as to freightage (a) for a fixed amount for the whole cargo (b) for a fixed rate per ton (c) for so much per month Maritime Agencies vs CA 187 SCRA 346 F: Transcontinental Fertilizer Co. A time charter party was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner. The parties signed a Uniform General Charter dated August 1979. its officers and crew were under the employ of the shipowner and therefore continued to be under its direct supervision and control. and (2) charter by demise or bareboat charter where the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation. whose right if at all depends upon and not separate from the interest. to carry goods for others. It is a contract by which the owner or agent of the vessel leases for a certain price the whole or a portion of the vessel for the transportation of goods or persons from one port to another. or some principal part thereof. which is owned by KKKK. 15. There being an express provision of law (Art. b. It is only when the charter includes both the vessel and the crew. the resident agent of KKKK for the amount of the loss. As subrogee of the consignee. is not entitled to payment for such towage services. If the contract thus created is one for towage. Maritime Agencies and/or Viva Customs Brokerage. there is no occasion to resort to equitable considerations. It took PPI 11 days to unload the cargo. that is. of London chartered from Hongkong Island Shipping Co. It is not disputed that the carrier operates as a CC in the ordinary course of business. had expressly waived its claim for compensation for the towage service rendered to defendant. The CA reversed.123. that of a quasi-contract of towage where the crew is not entitled to compensation separate from that of the vessel. who are his servants.86 pursuant to the insurance contract. it is clear that plaintiff. The vessel arrived in Manila to unload part of its cargo and then proceeded to Cebu to discharge the rest of the cargo. La Union.R.TRANSPORTATION AND MARITIME LAW captain. provided the charter is limited to the ship only. 101503 (Sept.000+ and Maritime Agencies to pay P 36. chartered the vessel. Thus this petition. the ship captain. Maritime Agencies was appointed as the charterer's agent and Macondray as the owner's agent. A shortage and contamination of the fertilizer was discovered. no proof was adduced by the petitioner showing that the carrier was remiss in the exercise of due diligence in order to minimize the loss or damage to the goods it carried. Thus it continued to be a public carrier. was impleaded. Viva was dropped from the complaint while Macondray Co. The RTC ordered Hongkong Island and its local agent Macondray to pay P 87. while the insurer was the Union Insurance Society of Canton. 2142. SSA contended that the provisions on CC do not apply to them because they have become private carriers by reason of the charter-party. then only the owner of the towing vessel . It is therefore imperative that a public carrier shall remain as such. The TC awarded damages. William Lines. NO. The consignee filed a formal claim for shortlanded bags. Issue : Does a charter party between a shipowner and a charterer transform a CC into a private one as to negate the civil law presumption of negligence in case of loss or damage to its cargo? NO. is let by the owner to another person for a specified time or use. The fertilizer was shipped on MV Sun Plum. Kinds a. An action for damages was filed. PPI hired a marine and cargo surveyor to determine if there was any shortage. The RTC found Hongkong Island liable for the shortlanded bags while Maritime Agencies was held liable for the spillage during discharge. Neither may the plaintiff captain invoke equity in support of his claim for compensation against defendant. Issue : WON the carrier is liable for damages. Union filed a claim for reimbursement against Hongkong Island Co. as in a bareboat or demise that a CC becomes private. Held : A charter-party is a contract by which an entire ship.the charterer does not as a rule acquire the right to fix the date when the vessel should depart. Definition. On the other hand. USSR to the Philippines. Upon arrival in the port. from Alaska to San Fernando. Maritime pleads non-liability on the ground that it was only the charterer's agent and E. The consignee was Atlas Fertilizer Co. CA exempted Hongkong Island and Macondray exempt from liability. instead it is a contract for the hire of services by virtue of which a vessel is engaged to tow another vessel from one port to another for a consideration Planters Products vs CA G. which paid the total indemnity of P 113. PPI sent a claim letter to SSA. And as the vessel-owner.. Held : The presumption of negligence on the part of respondent carrier has been overcome by the showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo. When PPI Classes of charter party: (1) as to extent of vessel hired (a) total (b) partial . insofar as such particular voyage is concerned.

Hongkong Island. The lay days and extra lay days to be allowed and the rate of demurrage. The action has prescribed with respect Macondray but not against the principal. or whether it is the total cargo.involves the transfer of full possession and control of the vessel for the period covered by the contract. that of the person for whose account he makes the contract. 2. Demise or bareboat charter . The difficulty is that Transcontinental has not been impleaded and so is beyond the court's jurisdiction. or in any other manner whatsoever agreed upon. If the freight should be received without the charter party having been signed. The freightage to be paid. As a mere charterer's agent. to the former for the use of his cables and ropes PAGE 88 . Maritime acted in representation of the charterer and not of the vessel. and domicile of the agent. the date when the last item was delivered to the consignee.In the present case. although the owner retains possession and control 3. However. and domicile of the captain. surname. the presumption is that they were damaged or lost during the voyage as a result of their negligent improper storage. The TC's findings were upheld except for some modifications. responsibility for the cargo loss falls on the one who agreed to perform the duty involved in accordance with the terms of the voyage charter This case involves a voyage charter. 2 of the Uniform General Charter provided that the owner shall be responsible for loss or damage or delay in the delivery of goods caused by improper or negligent stowage of the goods or by personal want of due diligence in making the vessel seaworthy and properly manned. 1979. while manning and supplying the ship as well 2. and when either does not know how or is not able to do so. 653 literally. Maritima cannot be held liable for the principal's acts. The name. 7. In cases at bar. if the latter should make the charter party. Primage. A charter party must be drawn in duplicate and signed by the contracting parties. which could only mean that they were damaged or lost on board the vessel before unloading of the shipment. should be a better substitute for the charter party than is the B/L which is nothing more than the proof of such delivery. the voyage charter is a contract of affreightment and is considered a private carriage . The charter party shall include. The name. the contract shall be understood as executed in accordance with what appears in the bill of lading. surname. 9. surname. 8. if we take into account the fact that delivery of the cargo does not constitute the making of a contract but rather the partial performance thereof. or for the weight or measure of the goods of which the cargo consists. having assumed this activity under the charter party free of expense to the vessel. Transcontinental was disclosed as the charterer's principal and Maritime only acted within the scope of its authority. The amount of primage to be paid the captain. of the captain. The filing of the claim must be within one year. the carrier and the ship shall be discharged from liability. Otherwise. As regards the goods damaged or lost during unloading. If the cargo is received without a charter party. Her flag and port or registry. the charterer is liable thereof. 20.contract for the hire of a vessel for one or a series of voyages usually for the purpose of transporting goods for the charterer. The days agreed upon for loading and unloading. The capacity.being a private carriage. the following circumstances: 1. even from the neglect of the captain or the crew or any other person employed by the owner on board. 4. would there be a valid contract? A: Taking Art. Forms and Effects Art.TRANSPORTATION AND MARITIME LAW should not answer for whatever responsibility might have attached to the principal. Art. name. Time Charter . the answer is no. and of the charterer. the mere fact of delivery and receipt of such cargo. The kind. The shipowner should be held liable. Union filed the complaint against Hongkong within the one year period but tardily against Macondray. while the owner was responsible for the care of the cargo. c. or for the space to be occupied. the owner shall not be liable for any other cause. and domicile of the charterer. the charterer obtaining the right to use the vessel and carry whatever cargo it chooses. and tonnage of the vessel. in accordance with the COGSA. it cannot be held solidarily liable with Transcontinental for the losses/damages to the cargo outside the custody of the vessel. a small allowance or compensation payable to the master and marines of a ship. the parties may freely contract respecting liability for damages to the goods and other matters. As the bags were in good order when received by the vessel. the GF and mutual consent with which they have been made. stowage and discharging at the ports visited. Par. 653. Union asked that Maritime should be made solidarily liable since its principal had not been impleaded. The liability imposed on it cannot be borne by Maritime which is a mere agent and is not answerable for the injury caused by its principal (unless the principal is undisclosed). However. and if he states that he is acting by commission. or for any unseaworthiness of the vessel on loading or commencement of the voyage. Held : There are 3 general categories of charters: 1. besides the condition stipulated. 3.-Formerly. number of tons or weight. 11. The one year period should commence from Oct. the B/L shall be considered the contract of the parties Q: If there is no charter party and B/L.contract to use a vessel for a particular period of time. The liability of Macondray can no longer be enforced because of prescription. 5. Voyage Charter . the charterer was responsible for loading. In this case. or measure which they respectively bind themselves to load and transport. which shall be the only instrument with regard to the freight to determine the rights and obligations of the ship agent. the charterer did not represent itself as a carrier and indeed assumed responsibility only for the unloading of the cargo. The port of loading and unloading. the TC found that there were shortlanded bags. stating whether it is to be a fixed amount for the voyage or so much per month. The name. the charterer obtaining the right to direct the movements of the vessel during the chartering period. 652. by two witnesses at his request. The entire cargo was covered by a clean B/L. 6. 10.

or of (b) fortuitous event (3) Art. it is an extended freight or reward to the vessel in compensation for the earnings she is improperly caused to lose Lay days. If the captain. if kept in accordance with law. the freightage shall be reduced in proportion to the cargo the vessel cannot receive. through indolence or malice. should not find a vessel to charter. and there should appear to be an error or fraud in her capacity.goods seized by pirates or enemies. notwithstanding his diligence. with no right to any indemnification whatsoever.goods which suffer deterioration or dimunition on account of (a) inherent defects or bad quality of packing. shall govern. and the charterer should not wish to rescind the contract. If in the charter party the time in which the loading and unloading are to take place is not stated. if the contracting parties acknowledge the signatures of the same as their own. 656. Articles 659 to 664 : Some of the goods being transported may : (1) be sold by the captain to pay for necessary repairs. as remuneration to the owner of a ship for the detention of his vessel beyond the number of days allowed by the charter party for loading and unloading or for sailing. even though a broker has not taken part therein. in view of her tonnage. after requesting the captain to charter a vessel within an unextendible period. by the proofs submitted by the parties. (2) be jettisoned for the common safety. it shall be returned (3) Art. but it belongs to owners or freighters and is nothing but an increase of the freight rate. to the latter for lading and unlading in any port of haven Primage. 663 . 660 . or which is allowed. 661 . The same authority shall judicially compel the captain to carry out for his account and under his responsibility the charter made by the shippers. on the contrary. and. The contracts shall also be admitted as evidence. unless especially stipulated. or (6) increase by natural cause in weight or size ** Goods that shall not pay freightage: (1) Art. Art.goods that increase in size or weight by natural cause d. (3) be lost by reason of shipwreck or stranding. (5) suffer deteriorations or dimunitions. should not furnish a vessel to take the cargo to its destination. Art. machinery or equipment or for unavoidable and urgent needs --> but the freight may not be required to be paid in full (2) Art. preference shall be given to the person who has already loaded and arranged the cargo in the vessel. who certifies to the authenticity of the signatures of the contracting parties made in his presence. 669. The charter parties executed with the intervention of a broker. even though in executing them he should have acted in violation of the orders and instructions of the agent or shipowner. If the shipowner or the captain should contract to carry a greater amount of cargo than the vessel can carry. 661 . Should no broker have taken part in the charter party and the signatures be not acknowledged.merchandise lost by reason of shipwreck or stranding. and the PAGE 89 . After the stipulated or customary period has passed. it is no longer a gratuity to the master. a difference greater than 2 per cent between that registered and her true capacity not being permissible. to carry the cargo to its destination. If during the voyage the vessel should be rendered unseaworthy the captain shall be obliged to charter at his expense another one in good condition. he shall deposit the cargo at the disposal of the shippers. the captain shall be entitled to demand demurrage for the lay days and extra lay days which may have elapsed in loading and unloading. at present. but the latter shall have a right of action against the captain to recover damages.goods sold by the captain to pay for the necessary repairs to the hull. the usages of the port where these acts take place shall be observed. (4) be seized by pirates or enemies. Rights and Obligations of Shipowners Art. for which purpose he shall be obliged to look for a vessel not only at the port of arrival but also in the neighboring ports within a distance of 150 kilometers. 644 . Art. and none of the charterers desires to rescind the contract. and. in the absence thereof. viz: If the vessel has been chartered by one shipper only. the person from whom the vessel is chartered being furthermore obliged to indemnify the charterer for the losses he may have caused him.-Days allowed to charter parties for loading and unloading the cargo Art. shall be full evidence in court. freight paid in advance shall be returned ** Goods required to pay freightage: (1) Art.-. 657. the shippers. Charter parties executed by the captain in the absence of the ship agent shall be valid and effective. the freight being adjusted in such cases by the distance covered by the vessel. Demurrage. when he has a right to do so. there should be several charter parties. that which agrees with the one which the broker must keep in his registry. to whom he shall communicate the facts on the first opportunity. may charter one and apply to the judicial authority for the summary approval of the charter party which they may have made. 655.Sum which is fixed by the contract of carriage. and by reason of the want of space all the cargo contracted for cannot be received. and should there not be in the freight contract an express provision fixing the indemnification for the delay.TRANSPORTATION AND MARITIME LAW to discharge the goods of the merchant. if freight had been paid in advance. 659 . they shall indemnify the shippers whose contracts they do not fulfill for the losses they may have caused them by reason of their default. if they should be conflicting. The shipowner of the captain shall observe in charter parties the capacity of the vessel or that expressly designated in its registry. 654. If. If the captain.goods jettisoned for the common safety but the amount of freightage that should have been paid shall be considered as a general average and shall be computed in proportion to the distance covered when they were jettisoned (2) Art. according to the cases. doubts shall be decided by what is provided for in the bill of lading.

he shall make a protest and return to the port where the charter was made. and should he do so. the excess may be admitted in accordance with the price stipulated in the contract if it can be well stowed without incurring the other shippers. being for his account. If the charterer should carry to the vessel more cargo than that contracted for. according to the rules prescribed. should there be any.to undertake a voyage at the time agreed upon or within 15 days from loading if no time is stipulated. 676. and to indemnify the shippers whose contracts are not fulfilled for the losses they may have suffered by the failure of the shipowner to observe the capacity of the vessel 2. the captain may not. accept cargo from any other person. Art. should nothing to the contrary have been stipulated. If the owner of the part of the cargo already loaded should procure some more at the same price and under similar or proportionate conditions to those accepted for the freight received. 670. after receiving a part of the cargo. Art. Art. in proportion to the weight or space they may have engaged. unless there is an express agreement to the contrary. said charterer may oblige him to unload it and to indemnify him for the losses suffered thereby. and a declaration of war or a blockade should take place during the voyage. Should there be no priority. the freightage for the voyage out shall be paid in full. 669 . without the consent of the person chartering her. If the time necessary. in the opinion of the judge or court. discounting that which may have been earned on the merchandise which may have been carried on the voyage out or on the return trip. the cargo should be discharged at the port of arrival. After three-fifths of the vessel is loaded. within fifteen days from the time the loading began. Art. if one has been made at the port of departure. Should the captain not receive an answer within the time necessary therefore. The same shall be done if a vessel. where he fails to exercise his right to change vessel PAGE 90 . The captain shall lose the freightage and shall indemnify the charterers if the latter should prove. Art. should not be given any cargo for her return. Art. beginning to run in the meantime. the cargo shall be deposited. the capacity of the vessel. even if the shipowner should not find cargo sufficient to make up at least 3/5 of the amount which the vessel may hold. If the person from whom the vessel is chartered. the charterers may load. the voyage shall be undertaken at the time agreed upon. The person from whom the vessel is chartered shall be liable for all the losses caused the charterer by reason of the voluntary delay of the captain in putting to sea. the expenses of transfer. or those allowed by custom in the port. without the consent of the charterers or shippers. and the expenses and salaries accruing during the detention shall be paid as general average. having been chartered for the round trip. 671. and should no time have been fixed. he shall inform the charterer and await his instructions. he may substitute for that transportation another vessel inspected and declared suitable for the same voyage. or transport it. and the person from whom the vessel was chartered shall be obliged to indemnify them for losses and damages. 670 . he shall make efforts to find cargo. the person from whom she is chartered may not. if carried for the account of third persons. 675. If. Obligations of shipowner: 1. Art. requesting and awaiting orders from the shipper. provided he has been requested to put to sea at the proper time through a notary or judicially. 673. and it shall be liable for the payment of the freightage and expenses incurred by reason of the delay. The captain may likewise. and the increase in the price of the charter. and should the latter not deliver the cargo to him. that the vessel was not in a condition to navigate at the time of receiving the cargo. at the price he may have fixed. If the vessel has been chartered to receive the cargo in another port. 677. which shall be paid from the proceeds of the part first sold. Art. under the penalty of making himself thereby liable for all the losses and damages occurring during the voyage to the cargo of those who did not consent to the change. if they wish. the person from whom the vessel is chartered or the captain may not refuse to accept the rest of the cargo. Art. In such case the captain must proceed to the nearest safe and neutral port. The charter party shall subsist if the captain should not have any instructions from the charterer. but if in order to stow said cargo it should be necessary to stow it in such manner as to throw the vessel out of trim the captain must refuse it or unload it at the expense of its owner. by orders of the shipper. it he can do so and keep the vessel in trim. 674. and should he not find any after the lay days and extra lay days have elapsed. Art. and should he do so. Should he not be able to make this change. If the vessel has been chartered in whole. the charterer shall have a right to demand that the vessel put to sea with the cargo she may have on board. even against the certificate of inspection. 678. to receive orders from the shippers should have elapsed without the captain having received any instructions.to observe in the charter parties. Art. demanding by way of freightage the highest price which may have been stipulated for said voyage. unload the merchandise clandestinely placed on board. substitute the vessel designated in the charter party with another one. The charterer shall pay the freightage in full. the captain shall appear before the consignee designated in the charter party. the lay days agreed upon. should not find sufficient to make up at least three fifths of the amount the vessel can hold. before leaving the port.TRANSPORTATION AND MARITIME LAW rest shall take the place corresponding to them in the order of the dates of their contracts. 672.

to receive freight in full. Art. by reason of confiscation. where the captain has not received any instructions from the charterer. and any other damage which may be caused the other shippers. if the vessel has been chartered to receive cargo in another port.to unload merchandise clandestinely placed on board. after he receives no cargo from the consignee and after he receives no answer from the charterer 6. 680. 674 . 676 . for the captain to proceed to the nearest safe and neutral port. Art. 674 . 677 . Art.to collect the freight in accordance with the price stipulated for cargo in excess of that agreed upon is such excess can be properly stowed 3. 677 . provided the conditions of the first charter are not changed. requesting and awaiting orders from the shippers Rights of Shipowner: 1. and even though it may have been agreed. with the limitation established in the next article.to have the vessel in a condition to navigate at the time of receiving the cargo 8.where the shipowner should not find cargo sufficient to make up at least 3/5 of the amount which the vessel may hold. if the captain does not take other freight to complete the load of the vessel. without the knowledge of the person from whom the vessel was chartered or of the captain. however. 687. 681. The primage must be paid in the same proportion and at the same time as the freightage. Art. Art. and the losses and damages caused the other shippers. or other causes. Art. embargo. discounting that which may have been earned on the merchandise carried as substitute 7. he may substitute anohter vessel inspected and declared suitable for the voyage --> expenses of transfer and increase in price of the charter shall be paid by him 2.not to change the vessel after 3/5 of the vessel has been loaded. The charterer of an entire vessel may subcharter the whole or part thereof for the amounts he may consider most convenient.to have the charter party subsist notwithstanding the declaration of war or a blockade during the voyage. being permitted to unload her at their own expense should they deem it advisable.if the vessel has been chartered in whole. If the charterer. the captain not being allowed to refuse to receive on board the cargo delivered by the second charterers. 675.in case of declaration of war or blockade during the voyage. Art. 682. there remaining in PAGE 91 . Art. shall be liable for all the losses which may be caused to other shippers.to find freight to take place of freight not received. In charters for transportation of general freight any of the shippers may unload the merchandise before the beginning of the voyage. the freightage in full where the shipper orders that the cargo should be discharged at the port of arrival e. 670 . The abandonment shall be proper. 675 . detention. Art. Art. Art. for the full indemnity to all those injured through his fault. and that the price agreed upon is paid in full. 670 . If. in which case he shall pay the first charterer the difference should there be any. 683. even though the full cargo is not loaded. or to transport them if he can do so. Art. If the charterer should ship goods different from those indicated at the time of executing the charter party. the expense of stowing and restoring the cargo. they cannot demand any indemnity whatsoever from the charterer for the damage caused the vessel. all the changes and modifications to which the latter should be subject also governing the former. The charterers and shippers may not abandon merchandise damaged on account of its own inherent defect or of fortuitous event for the payment of the freightage and other expenses. If the merchandise should have been shipped for the purpose of illicit commerce. Art. and to receive in such cases. A charterer who does not complete the full cargo he bound himself to ship shall pay the freightage of the amount he fails to load. jointly with the owner of the merchandise.to refuse and unload at the expense of the owner excess cargo that cannot be properly stowed 4. the person giving rise thereto shall be liable with the value of his shipment and furthermore with his property. 674 . 672 . Obligations of charterers Art. 679. not to accept cargo from any other person without the consent of the charterer 6. Art. if the cargo should consist of liquids which may have leaked out. the expenses of the arrival made at his request. or the competent authority in a foreign land should order the merchandise to be unloaded. 685. should wish to unload his merchandise before arriving at the port of destination.to answer for losses arising from delay in putting to sea 7. for the benefit of cargo which runs the risk of deterioration. paying one half the freightage. the expenses of unloading and reloading shall be for the account of the former. machinery. Art. should there be any. to accept other cargo procured by the owner of the freight already loaded under the same price and conditions 4. without the occurrence of any of the cases of force majeure mentioned in the foregoing article. he shall pay the full freightage. Art. to the person from whom the vessel was chartered or to the shippers. 686. demanding the highest freightage 5. the latter. Art. the latter must immediately pay the captain the freightage due and the other expenses for which the cargo may be liable. Art. Art.where the cargo is not sufficient to make up at least 3/5 of the amount which the vessel may hold. After the vessel has been unloaded and the cargo placed at the disposal of the consignee. or equipment of the vessel. and was taken on board with the knowledge of the person from whom the vessel was chartered or of the captain. 673 . Art. 684. and should thereby give rise to losses. In case of making a port to repair the hull. the shippers must wait until the vessel is repaired. 671. without the consent of the charterers or shippers 5. the shippers or the court. Art. or the consul.TRANSPORTATION AND MARITIME LAW 3.

Art. where the charterer loads goods different from those stated at the time of the execution of the charter party 3. Art. The charter party shall be rescinded and all action arising therefrom shall be extinguished if. Art. before the vessel puts to sea from the port of departure. embargo. If a vessel should make a port during the voyage in order to make urgent repairs and the charterers should prefer to dispose of the merchandise. 690. If the vessel should not be placed at the disposal of the charterer within the period and in the manner agreed upon. 691. to pay (1) expenses of arrival. If the charterer at the termination of the extra lay days does not place the cargo alongside the vessel. captain or other shippers arising from confiscation. 681. or the breaking out of an epidemic after the contract was executed.to be jointly liable with the captain for losses which may be caused to the other shippers where the charterer ships goods for illicit commerce with the knowledge of the shipowner or captain 4. The prohibition to receive at the said port the merchandise constituting the cargo of the vessel. 687 .to pay for freight. When the delay does not exceed thirty days. if the voyage is for a port in the same waters. by reason of an embargo of the vessel by order of the government. If the new owner of the vessel should not load it for his own account the charter party shall be respected. and the vendor shall indemnify the purchaser if the former did not inform him of the charter pending at the time of making the sale. unload and load the merchandise. and the captain shall only be entitled to the freightage for the voyage out. At the request of the person from whom the vessel is chartered the charter party may be rescinded: 1. 680 . or for any other reason independent of the will of the ship agent. 4. (3) to pay any other damage which he may have caused other shippers 7. unless there is an agreement to the contrary. paying half the freightage agreed upon. Art. or any other temporary cause. on account of risk from pirates. if for a port in different waters. Should the delay exceed thirty days. Obligations of the charterer: 1. The subsistence and wages of the crew shall be considered as general average. they shall pay the freight in proportion to the distance covered by the vessel. the charterers shall pay the full freightage for one month. Art. 682 . the charter shall remain in force without right of either of the contracting parties to claim damages. Rescission Art. 685 . if. If.TRANSPORTATION AND MARITIME LAW the containers not more than one-fourth of their contents. The unloading shall be made for the account of the charterer. If before loading the vessel he should abandon the charter. If the person from whom the vessel was chartered should sell it before the charterer has begun to load it and the purchaser should load it for his own account. In the fourth case the person from whom the vessel was chartered shall have a right to the freightage in full for the voyage out. or if there be an error in the statement of the flag under which she sails. the shippers shall pay the full freightage for the voyage out.where the charterer unloads goods before arriving at port of destination without any force majeure occurring. 688. or other causes. A condition of blockage of the port of destination of said vessel. closing of ports. (From one port to another of the Peninsula (Philippines) and adjacent islands. 686 . and the shippers should agree to unload her. A charter party may be annulled at the request of the charterer: 1. machinery or equipment of the vessel. after the vessel has put to sea.in case of making a port to repair the hull. or bad weather. Art. 689.to pay the freight in full even if the charterer does not complete the full cargo he bound himself to ship 2. detention.not to abandon merchandise damaged on account of inherent defect or fortuitous event. if any 6. 684 . If the vessel cannot put to sea on account of the closing of the port of departure. In the second and third cases the person from whom the vessel was chartered shall indemnify the charterer for the losses he may suffer. enemies. In such case the charterer must pay half of the freightage stipulated besides the demurrage due for the lay days and extra lay days. or interdiction of commercial relations PAGE 92 . 3. In such case the vendor shall indemnify the charterer for the losses he may suffer. 5. Art. by reason of a declaration of war. 3. 682 . she should return to the port of departure. without fault of the captain or ship agent. During the interruption the charterer may. 2. 2. Art. If the capacity of the vessel should not agree with that stated in the certificate of tonnage. An indefinite detention. If the charter should have been made by the month. the freightage for one month only shall be paid.) 5.to answer with the value of his shipment and other property for the losses suffered by the shipowner. Art. A charter party shall be partially rescinded. 4. any of the following cases should occur: 1. at the proper timer and for his own account. The inability of the vessel to navigate. (2) full freight and (3) for the damages and losses caused to other shippers. 692. (2) to pay for the expenses of stowing and restowing the cargo. to wait until the vessel is repaired or to pay for the expenses of unloading should the charterer choose to unload 5. Art. for the payment of the freight and other expenses f. (1) to pay 1/2 of the freight. other expenses and the primage after the vessel has been unloaded and the cargo placed at the disposal of the consignee 8. paying demurrage if the reloading should continue after the cause for the detention has ceased. Art.where the charterer unloads before the beginning of the voyage. and two months. Art. 2. A declaration of war or interdiction of commerce with the power to whose ports the vessel was to make its voyage.

where loss arose from having loaded the merchandise on a vessel different from that designated in the contract. where the loss is caused by fault or malice of borrower 3. Forms and Requisites Art. or of the price they may receive in case of accident. Loan on Bottomry. the borrower is under no obligation to pay the loan safe no limit view of PAGE 93 . which is therefore called respondentia. 2. must be paid absolutely loan is required to be paid only upon at all events. WON thing arrival of the thing given as given as security is lost or security at port of destination destroyed 3. subject to Usury Law as to rate of interest in diff. 2.TRANSPORTATION AND MARITIME LAW during the voyage. the contracts made during the voyage of a vessel shall produce no effect with regard to third persons. the preference which. 3. defined A contract in the nature of a mortgage. Under whichever of these forms the contract is executed. provided that the goods are saved. at least. Character of Loan Art. they should have. defined One made on the goods laden on board the ship. with regard to other credits. first lender has preference last lender has preference over over subsequent lenders previous ones 2. according to their nature. although there are reciprocal benefits. By means of a private instrument. without which requisites the credits of this kind shall not have. consensual contract real contract --perfected from the * governed by Insurance Act moment of delivery of the thing loaned When loss does not extinguish loan: (Art. it being stipulated that if the ship be lost in the course of the specific voyage or during the limited time.2 may have binding force. Loans on bottomry or respondentia may be executed: 1. by which the owner of the ship borrows money for the use. by any of the perils enumerated in the contract. except if change is due to force majeure d. the lender shall also lose his money. By means of a public instrument. when marine peril occurs. aleatory contract: 1. although the obligation shall be valid between the contracting parties. Loans on Bottomry and Respondentia a. thought the ship perishes. shall be considered a loan on bottomry or respondentia. the borrower's personal responsibility being deemed the principal security for the performance of the contract. In order that the policy of the contracts executed in accordance with No. b. equipment and repair of the vessel and for a definite term. the repayment of the sum loaned and of the premium stipulated depends upon the safe arrival in port of the goods on which it is made. except from the day and date of their inscription. the borrower who must return the amount borrowed plus premium 3. and pledges the ship (or the keel or bottom of the ship) as a security for its repayment. if they should be recorded in the registry of vessels of the port of registry of the vessel before the lapse of eight days following its arrival. unilateral. Real. the contract produces obligations only for one party. when marine peril causes the loss of the the obligation of the insurer vessel or cargo. under any condition whatever. and which are to be sold or exchanged in the course of the voyage. If said eight days should elapse without the record having been made in the registry of vessels. The lender must be paid his principal and interest. 731) 1. with maritime or extraordinary interest on account of the maritime risks to be borne by the lender. the obligation of the becomes absolute borrower to pay is extinguished 3. indemnity is paid after the indemnity is paid in advance by way of loan loss has occurred 2. A loan in which. where loss is caused by barratry on the part of the captain 4. where the loss is caused by inherent defect of the thing 2. to the extent of the loan --> in case of loss of the thing given as security. the vessel should make the port designated for such a case in the instructions of the charterer. they must conform to the registry Marine insurance vs Bottomry and Respondentia Loans: The borrower is in effect indemnified for his loss. c. 719. it shall be entered in the certificate of the registry of the vessel and shall be recorded in the registry of vessels. By means of a policy signed by the contracting parties and the broker taking part therein. and shall be effective with regard to third persons from the date of their execution. 720. Loan on Respondentia. classes and various risks in a maritime voyage loan Marine insurance bottomry/respondentia loans 1. delivery of the amount loaned is necessary for the perfection of the contract 2. The contracts made during a voyage shall be governed by the provisions of Articles 583 and 611. where loss is caused by damage to the vessel as a consequence of its engaging in contraband 5. lender really runs known risks Distinguished from ordinary loans: Ordinary loan on bottomry and respondentia 1.

fixing their value in order to determine the principal of the loan. The goods pledged to secure repayment. 722. 2. the balance shall be returned before clearing. 580 . in which case they shall be transferable by indorsement. On the engine. it should have (Art. The amount of the loan and the premium stipulated. 724. 725.TRANSPORTATION AND MARITIME LAW of the broker who took part therein. and should he do so the contract shall be void. Art. The loan which the captain takes at the point of residence of the owners of the vessel shall only affect that part thereof which belongs to the captain. the captain shall procure the same in the successive order stated below: 1. 3 the acknowledgment of the signature shall be required. The name. 2. The surplus principal shall be returned with legal interest for the entire time required for repayment. On the equipment. The excess shall be valid only as an ordinary loan g. 2. Art. and domicile of the captain. and provided there does not exist any other kind of lien or obligation chargeable against the vessel. the loan shall have. provisions. If the full amount of the loan contracted in order to load the vessel should not be used for the cargo. 721. 5. 617. f. If one or more of the owners should be requested to furnish the amount necessary to repair or provision the vessel. 723. The kind. and if on a particular object of the vessel or of the cargo. name. and costs shall be charged to the private account of the captain. 727. If the loan is constituted on the hull of the vessel. surname. all that which constitutes the same shall be subject to the repayment. and when he has no funds and does not expect to receive any from the agent. Amount Art. On the merchandise loaded. and the indorsee shall acquire all the rights and shall incur all the risks corresponding to the indorser. If the lender should prove that he loaned an amount larger than the value of PAGE 94 . and fuel. On the hull of the vessel. The contracts may be made to order. and the freightage earned during the voyage on which the loan is made. equipment and other goods. 728. Art.8th in the order of preference) 2. The voyage during which the risk is run. and the ship agent may furthermore discharge him. 3. the interest which the parties in default may have in the vessel shall be liable for the loan in the proper proportion. By requesting said funds of the consignees of the vessel or the correspondents of the ship agent. the loan shall be valid only for the amount at which said object is appraised by experts. interest. With respect to those executed in accordance with No. 6. and domiciles of the person giving and the person receiving the loan. Art. on account of fraudulent measures employed by the borrower. shall also be considered as included in the liability for the loan. e. 4. the object liable for the bottomry loan. On What Constituted Art. Loans may be made in goods and in merchandise. surnames. the preference which. Art. Neither may he borrow money on bottomry for his own transactions. No loans on bottomry may be made on the salaries of the crew or on the profits expected. only the object concretely and specifically mentioned shall be liable. steam engines. 5. 726. 4. 4. fuel. with regard to other credits. 3. In case of violation of this article the principal. 5. according to its nature. By applying to the consignees of the cargo or to the persons interested therein. if they were not loaded. When he is permitted to do so. On the rigging. if the vessel is a steamer. By drawing on the ship agent. except on the portion of the vessel he owns. By whom Art. Outside of the residence of the owners. and registry of the vessel. the captain may contract loans in accordance with the provisions of Articles 583 and 611. he must necessarily state what interest he has in the vessel. 3. provided no money has been previously borrowed on the whole vessel. If the loan is made on the cargo. The names. Art. effective against third persons from the time of execution/registration Art. 611. 7. The same procedure shall be observed with regard to the goods taken as loan. By borrowing the amount required by means of a bottomry loan. provisions. In order to comply with the obligations mentioned in the foregoing article. The captain may not contract loans on respondentia secured by the cargo. The time for repayment. if the other owners or their agents should not have given their express authorization therefor or should not have taken part in the transaction. Contracts which are not reduced in writing shall not give rise to judicial action. By selling a sufficient amount of the cargo to cover the amount absolutely necessary Effect of registration: 1. In a contract on bottomry or respondentia the following must be stated: 1. The loans may be constituted jointly or separately: 1. and they should not do so within twenty-four hours. the rigging.

729. The port of loading and that of unloading. Art. this circumstance and the fact PAGE 95 . The judge or court. or for the consignee. if in a foreign country. and must be signed within twenty. shall make a temporary memorandum in the certificate of their result. the shipper being entitled to demand the unloading at the expense of the captain should the latter not sign it. unless the owner declares a greater value. There may also be drawn as many copies of the bill of lading as may be considered necessary by the parties. for the shipper. quality. or in the name of a specified person. stating whether it is for the ship agent. the losses and damages suffered thereby.entire or complete contract B/L . be they the first four or the subsequent ones. Effects of Contract Art. If the full amount of the loan contracted in order to load the vessel should not be used for the cargo. the balance shall be returned before clearing. and they shall be graduated in the inverse order of their dates. The name of the consignee. The bill of lading may be issued to bearer. the destination of each one. The loans for the last voyage shall have preference over prior ones. Charter party . The same procedure shall be observed with regard to the goods taken as loan. The quantity. Art. when they are issued to order or to bearer. should there be one. and otherwise to the Filipino consul. 726. to order. Art. In the two last cases he must apply to the judicial authority of the port. the captain shall take two. for the captain. under any condition whatever. Art. Should several loans have been made at the same port of arrival under stress and for the same purpose. registry. 8 and 9 of Article 580.TRANSPORTATION AND MARITIME LAW to repair the vessel and to equip her to pursue the voyage. and tonnage of the vessel. The name. Loans made during the voyage shall have preference over those made before the clearing of the vessel. F. presenting the certificate of the registry of the vessel treated of in Article 612. one for himself and the other for the ship agent. he shall apply to the judge or court if he is in Philippine territory. Of these copies the shipper shall keep one and send another to the consignee. If the ship being on a voyage the captain should find it necessary to contract one or more of the obligations mentioned in Nos. 6. and the instruments proving the obligation contracted. 5. to the local authority. Charter party . on account of fraudulent measures employed by the borrower. 583. 7. but. in which shall be stated: 1.private receipt which the captain gives to accredit that such goods belong to such persons 2. is valid and binding Bill of Lading vs Charter party 1. if that agreed upon should not be lower. The name of the shipper. 719. shall be considered a loan on bottomry or respondentia. if the bill of lading is issued in the name of a specified person. The captain and the shipper shall have the obligation of drawing up the bill of lading.consensual party.707. 3. If the copy sent to the latter should have a duplicate. and marks of the merchandise. BILL OF LADING B/L operates both as a receipt and as a contract. if in the Philippines and to the Filipino consul. which can be dissolved by means of indemnity for losses and damages B/L . in any case. exists only after delivery of the goods to be transported is made 1. or of the price they may receive in case of accident. and all of them shall be signed by the captain and by the shipper. all of them shall be paid pro rata. the consul or the local authority as the case may be in view of the result of the proceedings instituted. 4. 2.real contract. the loan shall be valid only for the amount at which said object is appraised by experts. it is a receipt for the goods shipped and a contract to transport and deliver the same as stipulated A stipulation that a CC's liability is limited to the value of the goods appearing in the B/L. Contents Art. and. Should the goods on which money is taken not be subjected to risk. The name of the captain and his domicile. proceeding in accordance with the prescriptions of Article 583. The surplus principal shall be returned with legal interest for the entire time required for repayment. the repayment of the sum loaned and of the premium stipulated depends upon the safe arrival in port of the goods on which it is made. the contract shall be considered a simple loan. The lack of this formality shall make the captain personally liable to the creditors who may be prejudiced through his fault. 706. and in his absence to the judge or court or to the proper local authority. by reason of the sale of the vessel by virtue of a declaration of unseaworthiness. if they were not loaded. and where there should be none. number of packages. and with the provisions of the law of civil procedure. Art. The freightage and the primage stipulated. If the lender should prove that he loaned an amount larger than the value of the object liable for the bottomry loan. A loan in which. there shall be stated in all the copies. with the obligation on the part of the borrower to return the principal and interest at the legal rate. h. 730. Four true copies of the original bill of lading shall be made. in order that it may be recorded in the registry when the vessel returns to the port of her registry. 727. Art. or so that it can be admitted as a legal and preferred obligation in case of sale before the return.four hours after the cargo has been received on board.

700. If before the delivery of the cargo a new bill of lading should be demanded of the captain. and it should appear from an examination of the cargo that they are correct. and the passenger should agree to await the repairs. it shall be understood that the new captain accepts the cargo as it appears from the bills of lading. 699. unless the delay is due to an accidental cause or to force majeure. but without changing the consignment and stating therein the circumstances prescribed in the last paragraph of Article 707. the passengers shall be subject to the orders of the captain. 709. the passengers requesting the same shall be entitled to the return of the fare. 693. without prejudice to his right of action against the first captain. Art. If before the vessel puts to sea the captain should die or should cease to hold his position through any cause. the passengers shall be entitled to have their passage refunded and to recover for losses and damages. 710. if issued to a specified person. and without right to recover for losses and damages if the interruption is due to a fortuitous event or to force majeure. Probative Value Art. the captain may continue the voyage and demand the full passage price. and those possessed by the captain or ship agent signed by the shipper shall be proof against the shipper or consignee in favor of the captain or ship agent. In all that pertains to the preservation of order and discipline on board the vessel. the shipper shall have the right to demand of the new captain the ratification of the first bills of lading. he shall be given preference over other creditors. when the latter is ready to leave the port. Art. provided that security for the value of the cargo is given to his satisfaction. 713. under penalty. 2. and no change or erasure appears in any of them. 694. Nature of Contract Art. may not be transferred without the consent of the captain or of the consignee.TRANSPORTATION AND MARITIME LAW that it is not valid except in default of the first one must be stated therein. and in case of their sale. provided that all the copies previously issued be presented or returned to him. not conclusive evidence Defective and irregular B/L may be cured by other complementary documents G. the captain shall have a right to claim payment for what he may have furnished the passengers. he may not be required to pay any increased price of passage. 698. those in the possession of the shipper or consignee signed by the captain shall be proof against the latter or ship agent in favor of the consignee or the shipper. The right to passage. before or after the commencement of the voyage. Obligations of Passengers Art. Art. should he not do so. but his living expenses during the delay shall be for his own account. B/L . but if the suspension was due to an accidental cause. In case of delay in the departure of the vessel. A vessel exclusively destined to the transportation of passengers must take them directly to the port or ports of destination. after a statement of experts. Art. In case a voyage already begun should be interrupted. If the passage price has not been agreed upon. The expenses arising from the examination of the cargo shall be for the account of the ship agent. when dealing with the bills of lading referred to therein. Art. 714. PASSENGERS ON SEA VOYAGE 1. 697. If the interruption should be by reason of the disability of the vessel. and if it is due exclusively to the captain or ship agent they may furthermore demand indemnity for losses and damages. 3. the passengers shall only be entitled to the return of the passage money. the judge or court shall summarily fix it. but with a right to indemnify if the interruption should have been caused by the captain exclusively. evidence to the contrary being reserved by the latter. Should the passenger not arrive on board at the time fixed. If the bills of lading do not agree. he shall be obliged to issue it. or should he leave the vessel without permission from the captain. Art. Art. on the allegation that the failure to present the previous ones is on account of their loss or for any other just cause. acting in the same way as in the collection of freightage. 695. if he ceased to be such through his own fault. of being liable for said cargo if improperly delivered through his fault. or to force majeure. the captain may retain the goods belonging to the passenger. Rights of Passengers Art. If the delay should exceed 99ten days. no PAGE 96 .proof of the agreement between the parties Issuance of B/L is merely prima facie evidence of the receipt of the merchandise by the carrier or his agent. Should said examination not be made. 2. 704. the passengers shall be obliged to pay only the fare in proportion to the distance covered. without any distinction whatsoever. Art. If before beginning the voyage it should be suspended through the sole fault of the captain or ship agent. or to any other cause beyond the control of the captain or ship agent. and the latter must do so. A bill of lading drawn up in accordance with the provisions of this title shall be proof as between those interested in the cargo and between the latter and the insurers. the passengers have a right to remain on board and to be furnished food for the account of the vessel. If the contract is rescinded. In order to collect the fare and expenses of sustenance.

their destination. there was no longer any force majeure that justified the by-passing a port of call. but should it be for their account. the vessel proceeded directly to Tacloban. In fact. Even granting that the engine failure was a fortuitous event. The complaint is directed not at the delayed departure the next day but at the by-passing of Catbalogan. 10 of Article 612 with regard to members of the crew. Having been caused by the captain upon instructions of management. They were to board petitioner's vessel M/V Sweet Grace. In case the vessel cannot continue or complete the trip for any cause whatsoever. conditions: 3. arriving back at Cebu at about 4 PM.M. after docking at Tacloban City. to take the steps required by the circumstances. The TC and CA decided in favor of plaintiffs. and shall carefully take care of the papers and goods of said passenger which may be on board. only to be towed back to Cebu due to engine trouble. 11. Instead of departing at the scheduled hour of about midnight. When the vessel left Cebu. Issue: WON defendant is liable. PAGE 97 . 612. Art. In the Philippines. there was no fortuitous event or force majeure which prevented the vessel from fulfilling its undertaking of taking private respondents to Catbalogan. Art. 2. and the instrument of the expert visit or inspection. They did not give notice of the change of schedule. The crucial factor then is the existence of a fortuitous event or force majeure. and all the obligations which encumber the same up to that date. Western Samar. which was the first port of call. 614 and 698 of the Code of Commerce. complying with the provisions of case No. Knowing fully well that it would take 15 hours to repair the vessel. the list of passengers. The sailing schedule of the vessel xxx is subject to change without previous notice. Besides. 586 of the Code of Commerce. the carrier reserves the right to bring the passenger to his/her destination at the expense of the carrier or to cancel the tickets and refund the passenger the value of his/her ticket. and the contracts entered into with the crew. nor to remain in the ports he must or is under the necessity of touching for a period longer than that required by the needs of navigation. the passengers' right to indemnity is evident. The voyage to Catbalogan was interrupted by the captain upon instruction of management. 698 also provides for the captain's liability. As found by both courts below. the right to damages and indemnity exists against a captain who fails to fulfill his undertaking or where the interruption has been caused by the captain exclusively. and which holds them liable in damages to passengers for any deviation from said schedule Sweet Lines vs CA 121 SCRA 769 F: Private respondents purchased first-class tickets from petitioner in Cebu City.M. the health certificate. the conditions relied upon by petitioner cannot prevail over Arts. 705. The owner of a vessel and the ship agent shall be civilly liable for the acts of the captain under Art. Responsibilities of Captain Art. Private respondents had no recourse but to disembark and board a ferryboat to Catbalogan. it was not the vessels' sailing schedule that was involved. In the absence of an agreement to the contrary. The interruption was not due to fortuitous event or force majeure nor to disability of the vessel. the invoices or manifest of the cargo. Petitioner cannot rely on the conditions in small bold print at the back of the ticket reading: "The passenger's acceptance of this ticket shall be considered as an acceptance of the ff. and other equipments of the vessel. without being prevented by fortuitous event or force majeure. They did not offer to refund the tickets of the passengers nor provide them transportation from Bacolod City to Catbalogan. Mechanical defects in the CC are not considered caso fortuito that exempts the CC from responsibility. The following duties are inherent in the office of captain: 1. making all the stops indicated in its itinerary. the vessel left for Manila to complete its voyage. In case of the death of a passenger during the voyage the captain shall be authorized. the vessel sailed at around 3 A. without prejudice to criminal penalties which may prosper. tackle. bound for Catbalogan. Art. the certificate of the registry proving the ownership of the vessel. The vessel was completely repaired when it left Cebu for Samar and Leyte. the vessel was only able to leave around 8 A. Without it. 702. Art. The passengers are also entitled to moral damages on account of the BF on the part of the carrier. the charters or authenticated copies thereof. 701. should it have been made at the port of departure. To have a copy of this Code on board. The convenience or the interest of the passengers shall not obligate nor empower the captain to stand in-shore or enter places which may take the vessel out of her course. the roll of the persons who make up the crew of the vessel. petitioner did not comply with the same. with respect to the body. Hence this suit for damages for breach of contract of carriage. to supply the food necessary for their sustenance at a reasonable price. Had petitioner notified them previously and offered to bring them to their destination at its expense or refunded the value of the tickets purchased. To have on board before starting on a voyage a detailed inventory of the hull. perhaps this controversy would not have arisen. Furthermore. Held: The governing provisions are found in the Code of Commerce. stores. in case of necessity. 614 provides that a captain who agreed to make a voyage and who fails to fulfill his undertaking. After repairs.TRANSPORTATION AND MARITIME LAW matter what the number of passengers may be. rigging." Even assuming that those conditions are applicable to case at bar. it accounted only for the delay in the departure. the navigation certificate. shall indemnify all the losses which his failure may cause. the subsistence of the passengers during the voyage shall be deemed included in the price of the passage. of the next day. 4. engines. Instead of docking at Catbalogan. they informed the passengers that it would take only a few hours. there is no law which requires shipowners to publish a schedule of the arrivals and departures of their vessels in the different ports of call. It did not cancel the ticket nor did it refund the value of the tickets to private respondents. the captain shall be under the obligation. Art.

the officers nor the crew are acquainted. the sources of the collection. 13. taking advantage of the semaphore. To comply with the obligations imposed by the laws and rules of navigation. and if he should have to take a boat he shall take with him. 11. the special character of the shipment. which shall be called "log book. stating their domiciles. stating therein all the incidents of the wreck. To be on deck at the time of sighting land and to take command on entering and leaving ports. and make a statement of the name. 9. In the same book he shall record the names and places of sailing of the passengers and the number of packages of which their baggage consists. freight earned. and in cases of grave resolutions which require the advice or a meeting of the officers of the vessel. unless there is a pilot on board discharging his duties. if required by the shippers and passengers. advise him of his departure. signed by all the persons who may have taken part therein. with the officers of the crew. and the freight earned. abiding by the decision of the majority. and if she has the equipment required for good navigation. 7. etc. and amounts borrowed on bottomry bond. either directly or by delivery to their families. volume. To observe the rules on the situation of lights and evolutions to prevent collisions. and whether the rigging and engines are in good condition. To make. the horsepower of the engines. according to the cases. the maneuvers executed. 16. in their absence. fuel. the declaration must be made before the local authority. and others. and port of departure of the vessel. of members of the crew. canals. without the precautions which are recommended for their packing.. the distance covered. drawing up a detailed inventory. and rivers. the rigging carried. roadsteads. he shall enter all the amounts collected and paid for the account of the vessel. outfits. giving the captain the proper certificate in order to show his arrival under stress and the reasons therefor. or river. 15. 8. signed by the marine official. management and isolation. placing at the beginning of each one a note of the number of folios it contains. For the informations indicated he shall make use of the binnacle book. telegraph. called the "accounting book". To demand a pilot at the expense of the vessel whenever required by navigation. In the third book. or a roadstead or anchoring place is to be entered with which neither he. To put in a safe place and keep all the papers and belongings of any members of the crew who might die on the vessel. stating their marks and packages. the course sailed." he shall enter every day the condition of the atmosphere. entering specifically article by article. and in case of disagreement a third shall be appointed by the marine authority of the port. In case of wreck he shall make the proper protest in due form at the first port reached. health." he shall record the entry and exit of all the goods. and reason of arrival. under their liability. and which might endanger the safety of the vessel. of the reason therefor. an examination of the vessel. their wages and salaries. and other incidents of navigation. In the first book. and all other expenses. of its cargo. 6. customs. or weight makes the work of the sailors difficult. to the maritime authority if in the Philippines and to the Filipino consul if in a foreign country. To conduct himself according to the rules and precepts contained in the instructions of the agent. the prevailing winds. when making a port in distress. PAGE 98 . preserving a certificate of the memorandum of this inspection. To give an account to the agent from the port where the vessel arrives. before receiving the freight. and principally the favorable season it takes place. before the competent authority or Filipino consul. and principally when a port. In the absence of marine officials or of the consul. and give him any information and date which may be of interest. To remain constantly on board the vessel with the crew during the time the freight is taken on board and carefully watch the stowage thereof. he shall record the decision adopted. 4. which declaration shall be vised by the authority of by the consul if after examining the same it is found to be acceptable. To have three folioed and stamped books. To present himself. In the second book. and have the consent of the shippers and of the agent. and if. he must hear the opinion of the officers of the vessel. no matter what is its cause. the obligations which he may contract in accordance with Article 583. repairs. and of the steam or engine book kept by the engineer. until all hope to save her is lost. and the effects and consequence of the jettison. as well as the imperfections and averages of the cargo. names of the shippers and of the consignees. on account of the nature of the merchandise. and tackle. acquisition of rigging or goods. registry. and. canal. before twenty-four hours have elapsed. such as inflammable or explosive substances. should there be any. wages. in the presence of passengers as witnesses. or even of the passengers and crew. He shall furthermore enter therein a list of all the members of the crew. 12. called "freight book. and in his absence by the competent authority. rigging. before anything else. within twenty-four hours. To take the steps necessary before the competent authority in order to enter in the certificate of the vessel in the registry of the vessels. being obliged to prove in case of the loss of the books and papers that he did all he could to save them. not to permit that any freight be carried on deck which by reason of its disposition. The experts shall be appointed one by the captain of the vessel and the other one by the persons who request the examination. he allows merchandise to be carried on deck. in accordance with case 8 of this article. the books and papers. and the two experts. To remain on board in case of danger to the vessel. 10. stating the name and domicile of the shippers. ports of loading and unloading. in order to ascertain whether she is watertight. not to consent to any merchandise or goods of a dangerous character to be taken on. 14. and before abandoning her to hear the officers of the crew. mail. He shall also enter the damage suffered by the vessel in her hull engines. 5. and the amounts they may have received on accounts.TRANSPORTATION AND MARITIME LAW 3. and the price of the passage. He shall not spend the night away from the vessel except for serious causes or by reason of official business. and the amounts invested in provisions. notify him the freight he may have received. being liable for all that he may do in violation thereof. and then the articles of most value.

When used in this Act(a) The term "carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper. (Approved October 22. Sec. under every contract of carriage of goods by sea. EXCEPTION: when parties agree to make it apply. the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable.governed by law of place of destination. 1. unless the damage arises from an act of the captain or of the crew. contracts) c. (e) The term "carriage of goods" covers the period from the time when the goods are loaded to the time when they are discharged from the ship RISKS Sec. in foreign trade 1st: COGSA (because it's more specific) 2nd: Code of Commerce 3rd: Civil Code (provisions not on common carriers e. including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same. (3) After receiving the goods into his charge the carrier. care for.private carrier 2. governed by the Civil Code COGSA . merchandise. Subject to the provisions of Section 6. and the captain shall not be responsible for what the former may keep under his immediate and special custody. 703. equip.with respect to vessels destined for foreign ports.TRANSPORTATION AND MARITIME LAW Art. carriage. 521 of the 74th Congress of the United States. 2. Q: What application does COGSA have in carriage of passengers? A: None. 74the US Congress) Sec. and all other parts of the ship in which goods are carried.does not apply to purely domestic transport . carry. and articles of ever kind whatsoever. approved on April 16.common carrier (Civil Code) . 1936). insofar as such document relates to the carriage of goods by sea. No. refrigerating and cooling chambers. except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried. (c) Make the holds. the COGSA doesn't apply unless parties make it applicable. to a foreign country: apply laws of such foreign country (Art. 2. care. Q: Can the COGSA apply in domestic shipping? A: Generally. As to the other baggage. wares. Common carrier coming to the Phils. TITLE I Sec. 1754. A passenger shall be considered a shipper of the goods he carries on board. (c) The term "goods" includes goods. The provisions of Arts. 1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or in that of his employee.Laws applicable to a contract for the carriage of goods by sea: 1. keep. be accepted. (d) The term "ship" means any vessel used for the carriage of goods by sea. custody. stowage. and supply the ship. or the master or agent of the PAGE 99 . (b) The term "contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title. and preservation (2) The carrier shall properly and carefully load. Private carrier coming to the Phils. 1766 . and discharge of such goods shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth.in foreign trade 3rd: Code of Commerce b. 1936. (b) Properly man. Q: In what situations does COGSA primarily apply? A: Where the parties expressly stipulate that COGSA shall govern their respective rights and obligations. Applies only to carriage of goods. the carrier in relation to the loading. and discharge the goods carried. Where is the vessel going? a. 65. that nothing in this Act shall be construed as repealing any existing provision of the Code of Commerce which is not in force. = what law applies? 1st: Civil Code 2nd: COGSA (it's more specific than Code of Commerce) . That the provisions of Public Act No. From the Phils. This Act shall take effect upon its approval. handle.g. 1. stow. (New Civil Code.goods from foreign country shipped to the Philippines. as it is hereby accepted to be made applicable to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade: Provided. 3. handling.applicable to all transportation of goods by sea in foreign trade to and from Philippine ports . RESPONSIBILITIES AND LIABILITIES Sec. Notes: In relation to Civil Code : Art. carriage. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to(a) Make the ship seaworthy. Distinguish . Art. NO. Carriage of Goods by Sea Act (Commonwealth Act.) J. torts. Public Act No. or as limiting its application. fit and safe for their reception. 1753 . governed by law of foreign country Art. if shipped to a foreign country. 521. 1753) .

or the quantity or weight. shall be null and void and of no effect. In the case of any actual or apprehended loss or damage. the notice must be given within three days of the delivery. (4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs (3) (a). A benefit of insurance in favor of the carrier. but at the option of the carrier such document of title may be noted at the port of shipment by the carrier. and the shipper shall indemnify the carrier against all loss. or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received or which he has had no reasonable means of checking. or agent with the name or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment.e. Notes: Prescriptive period under Section 3(6). that no carrier. Q: Is the prescriptive period under the COGSA interrupted from the time of the making of extra-judicial demand or filing of judicial action as provided in Art. gone out of commerce. Quimbo does not agree with this SC ruling. master. shall be bound to state or show in the bill of lading any marks. in such a manner as should ordinarily remain legible until the end of the voyage. shall be deemed to be a clause relieving the carrier from liability. number. Loss contemplates only where no delivery at all was made by the carrier of the goods because the same had perished. lost goods): from the date the goods should have been delivered Cases of misdelivery or conversion not covered. (6) Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage.the carrier and the agent shall be discharged form liability in respect of loss or damage unless suit is brought within 1 year from: (1) in case of damaged goods: from the time delivery of the goods was made (2) in case of non-delivery (i. that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the deliver of the goods or the date when the goods should have been delivered.TRANSPORTATION AND MARITIME LAW carrier.. if a notice of loss or damage. (5) The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks. is not given as provided for in this section. Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof. or agent of the carrier. and weight. on demand of the shipper. If the loss or damage is not apparent. consignee or legal holder of B/L may invoke the prescriptive period and have the right to file suit within one year after delivery of the goods or failure to deliver. as furnished in writing by the shipper. provided such marks are stamped or otherwise shown clearly upon the goods if uncovered. he shall surrender the same as against the issue of the "shipped" bill of lading. The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection. arising from negligence. NCC? PAGE 100 . 1155. The right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper. either apparent or concealed. (c) The apparent order and conditions of the goods: Provided. quantity. or lessening such liability otherwise than as provided in this Act. of this section: (The rest of the provision is not applicable to the Philippines). number. or disappeared in such a way that their existence is unknown or they cannot be recovered Hence. Mere proposal for arbitration or fact that there have been initial negotiations does not suspend the running of the period for prescription NOTE: Prof. there is a case of loss from the point of view of the consignee or shipper. 3 (6) applies only where there is loss or damage. 1 year-prescriptive period in Sec. such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. issue to the shipper a bill of lading showing among other things(a) The loading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts. or agent of the carrier to the shipper shall if the shipper so demands. and when so noted the same shall for the purpose of this section be deemed to constitute a "shipped" bill of lading. or similar clause. In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided. in case of misdelivery (delivery to wrong person) or conversion of the goods. and (c). or failure in the duties and obligations provided in this section. . the rules on prescription found in the Civil Code shall apply (10 years for contracts. be a "shipped" bill of lading: Provided. damages. master. as the case may be. as furnished by him. covenant. master. or agreement in a contract of carriage relieving the carrier of the ship from liability for loss or damage to or in connection with the goods. (8) Any clause. 4 years for tortious obligations) Shipper. fault. quantity. that. If there is a misdelivery or conversion. (b) Either the number of packages or pieces. the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods (7) After the goods are loaded the bill of lading to be issued by the carrier. that if the shipper shall have previously taken up any document of title to such goods. and expenses arising or resulting from inaccuracies in such particulars. shall.

unless caused by the actual fault or privity of the carrier. to determine. (d) Act of God. (b) Fire. refrigerating and cooling chambers. 3 provides that even if a notice of loss or damage is not given as required. (2) Neither the carrier not the ship shall be responsible for loss or damage arising or resulting from(a) Act. (j) Strikes or lockouts or stoppage or restraint of labor from whatever cause. (e) Act of war.to provide carrier an opportunity to look for the lost goods .within 7 days in case of delay: within 14 days from receipt failure to comply with the 3-days notice requirement under COGSA does not affect the right of the shipper to bring action provided he brings the same within 1 year To be distinguished from the notice requirement in the WARSAW convention and Code of Commerce. and preservation. when and where damage occurred Shipper. however. quality. or vice of the goods. Notice requirements: COGSA: Sec. neglect. (o) Insufficiency or inadequacy of marks. but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier not the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.TRANSPORTATION AND MARITIME LAW A: No. pilot. where the notice requirement is a condition precedent for the right of action against the shipowner to accrue. 3(6) If loss or damage is apparent . or in case of goods not shipped in packages. 3 (6) gives the impression that it is the shipper alone who can invoke the same.to discover who was at fault . (g) Arrest or restraint of princes. consignee or legal holder of bill may invoke prescriptive period although the proviso in Sec. or neglect of the shipper. dangers. mariner.g.protest as soon as receipt of goods If not apparent -> within 3 days of delivery Code of Commerce: Art. (m) Wastage in bulk or weight or any other loss or damage arising from inherent defect. the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section.in case of transshipment. uniform worldwide Rationale behind the 3-day notice and relatively short prescriptive period: . his agent or representative. or any reasonable deviation shall not be deemed to be an infringement or breach of this Act or of the contract of carriage.within 24 hours after receipt WARSAW: Art. or seizure under legal process. e. or people. (p) Latent defects not discoverable by due diligence. and supplied. his agents. (c) Perils. whether partial or general: Provided. that fact shall not prejudice the right of the shipper to bring suit within 1 year after delivery of the goods. or the PAGE 101 . that nothing herein contained shall be construed to relive a carrier from responsibility for the carrier's own acts: (k) Riots and civil commotions. or the servants of the carrier in the navigation or in the management of the ship. (h) Quarantine restrictions. (1) Neither the carrier not the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy and to secure that the ship is properly manned. Whenever loss or damage has resulted from unseaworthiness. and accidents of the sea or other navigable water. or his (4) An deviation in saving or attempting to save life or property at sea. be regarded as unreasonable. (i) Act or omission of the shipper or owner of the goods. (5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package of lawful money of the United States. and (q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier. Stipulation in bill limiting carrier's liability contrary to sec.. per customary freight unit. (l) Saving or attempting to save life or property at sea. 1 year period is a special prescriptive period.within 3 days from receipt of goods .protest at time of receipt non-apparent . 366 apparent . provision in the bill excepting th owner form liability for loss or damage of cargo unless written notice is thereof was given to the carrier within 30 days. in accordance with the provisions of paragraph (1) of Section (3). 4. RIGHTS AND IMMUNITIES Sec. prima facie. such a provision is contrary to a provision of the COGSA since Sec. or default of the master. 26 in case of damage: of baggage . and carrier shall not be liable for any loss or damage resulting therefrom: Provided. 3(8) is void. equipped. carriage. rulers. (f) Act of public enemies. (n) Insufficiency of packing. and all other parts of the ship in which goods are carried fit and safe for their reception. (3) The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act. But prescriptive period does not apply to the action by an insurer as subrogee of the consignee. and to make the holds. that if the deviation is for the purpose of loading or unloading cargo or passengers it shall.

that this section shall not apply to ordinary commercial shipments made in the ordinary course of trade but only to other shipments where the character or condition of the property to be carried or the circumstances. Art. 4(5). or (b) when issuing such bills of lading either in the surrender of any of the carrier's rights and immunities or in the increase of any of the carrier's responsibilities and liabilities pursuant to Section 5. master or agent of the carrier. or under the provisions of any other enactment for the time being in force relating to the limitation of the liability of the owners of seagoing vessels. and a shipper shall.means individual packaging of the goods . or under the provisions of Section 4281 to 4292. they shall comply with the terms of this PAGE 102 . 1916. (c) in any other way prohibited by the Shipping Act. care and discharge of the goods carried by sea. (Eastern v. and as to the rights and immunities of the carrier in respect to such goods. Title I. even if not stipulated case of loss: Act. of the Revised Statutes of the United States. Any agreement so entered into shall have full legal effect: Provided.TRANSPORTATION AND MARITIME LAW equivalent of that sum in other currency. or his obligation as to seaworthiness. By providing that $500 is the maximum liability. reservation. TITLE II Sec. or the care or diligence of his servants or agents in regard to the loading. Nothing in this Act shall be held to prevent the insertion in a bill of lading of any lawful provisions regarding general average. but if bills of lading are issued in the case of a ship under a charter party. master or agent of the carrier. either (a) with respect to their right to demand and receive bills of lading subject to the provisions of this Act. This declaration. Great American) SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF RESPONSIBILITIES AND LIABILITIES Sec. 7. inclusive. provided. SPECIAL CONDITIONS Sec. Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently mis-stated by the shipper in the bill of lading. explosive. as amended. but shall not be conclusive on the carrier. The provisions of this Act shall not be applicable to charter parties. 5. of this Act. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo. or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea. condition. if embodied in the bill of lading. Sec. Sec. In no event shall the carrier be liable for more than the amount of damage actually sustained. unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. custody. THE SAME IS DEEMED READ INTO THEIR CONTRACT Package . The plaintiff cannot dispute said limitation on the ground that it was not freely and fairly agreed upon or that it is against public policy. stipulation. that such maximum shall not be less than the figure above named. provided such surrender or increase shall be embodied in the bill of lading issued to the shipper. and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided. handling. 1749 of the NCC expressly allows th limitation of the carrier's liability. stowage. Nothing contained in this Act shall be construed as permitting a common carrier by water to discriminate between competing shippers similarly placed in time and circumstances. The provisions of this Act shall not affect the rights and obligations of the carrier under the provisions of the Shipping Act. 8. may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation.does not cover 1 container van Parties may agree to amount of liability less than $500 under Sec. (6) Goods of an inflammable. or dangerous nature to the shipment whereof. since the LAW ITSELF PROVIDES FOR SAID LIMITATION. 6. A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under this Act. that in this case no bill of lading has been or shall be issued and that the terms agreed shall be embodied in a receipt which shall be a non-negotiable document and shall be marked as such. By agreement between the carrier. or of any amendments thereto. master or agent of the carrier. a carrier. (so far as the stipulation regarding seaworthiness is not contrary to public policy). has not consented with knowledge of their nature and character. carriage. they may in like manner be landed at any place. and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods. the law does not disallow an agreement for liability at a lesser amount. Notes: Amount recoverable in $500/package. or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average if any. 1916. Moreover. 9. terms and conditions under which the carriage is to be performed are such as reasonable to justify a special agreement. shall be prima facie evidence. Nothing contained in this Act shall prevent a carrier or a shipper from entering into any agreement. the carrier. Notwithstanding the provisions of the preceding section.

TRANSPORTATION AND MARITIME LAW
Sec. 10. Philippines.) (Not applicable to the any such suspension shall take effect on the date named therein, which date shall be not less than ten days from the issue of the proclamation. Any contract for the carriage of goods by sea, subject to the provisions of this Act, effective during any period when Title I hereof, or any part thereof, is suspended, shall be subject to all provisions of law now or hereafter applicable to that part of Title I which may have thus been suspended. Sec. 15, COGSA. This Act shall take effect ninety days after the date of its approval; but nothing in this Act shall apply during a period not to exceed one year following its approval to any contract for the carriage of goods by sea, made before the date on which this Act is approved nor to any bill of lading or similar document of title issued, whether before or after such date of approval in pursuance of any such contract as aforesaid. Sec. 16, COGSA. This Act may be cited as the "Carriage of Goods by Sea Act." Approved, April 16, 1936.

Sec. 11. When under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight as ascertained or accepted is stated in the bill of lading, then notwithstanding anything in this Act, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bill of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper. Sec. 12. Philippines.) (Not applicable to the

Sec. 13. This act shall apply to all contracts for carriage of goods by sea to or from ports of the United States in foreign trade. As used in this Act the term "United States" includes its districts, territories, and possessions: Provided, however, that the Philippine Legislature may by law exclude its application to transportation to or from ports of the Philippine Islands. The term "foreign trade" means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possession: Provided, however, that any bill of lading or similar document of the title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this Act, shall be subjected hereto as fully as if subject hereto by the express provisions of this Act: Provided, further, that every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States in foreign trade, shall contain a statement that it shall have effect subject to the provisions of this Act. Notes: American Insurance vs Cia Maritima : contract of carriage from NY with final destination in Cebu. COGSA is applicable despite the fact that from Manila to Cebu, the goods were transshipped on an interisland vessel. Transshipment was not a separate transaction from that originally entered into by the parties but was part of the carrier's contractual obligation. Sec. 14. Upon the certification of the Secretary of Commerce that the foreign commerce of the United States in its competition with that of foreign nations is prejudiced by the provisions, or any of them, of the Title I of this Act, or by the laws of any foreign country or countries relating to the carriage of goods by sea, the President of the United States may, from time to time by proclamation, suspend any or all provisions of Title I of this Act for such periods of time or indefinitely as may be designated in the proclamation., The President may at any time rescind such suspension of Title I hereof, and any time rescind such suspension of Title I hereof, and any provisions thereof which may have been thereafter made for carriage of goods by sea. Any proclamation of suspension or rescission of

V. International Air Transport A. The Warsaw Convention, 51 O.G. 5084 (October 1955); Presidential Proclamation No. 201, 51 O.G. 4933 (October 1955) MAKING PUBLIC THE ADHERENCE OF THE R.P. TO THE CONVENTION FOR THE UNIFICATION OF CERTAIN RULES RELATING TO INTL. TRANSPORTATION BY AIR AND THE ADDITIONAL PROTOCOL THERETO, 1929 WHEREAS, a Convention for the Unification of Certain Rules Relating to International Transportation by Air & an Additional Protocol thereto relating to Article 2 of the Convention were signed at Warsaw by the plenipotentiaries of 32 countries; WHEREAS, Article 38 of the aforesaid Convention provides that a Government on behalf of which this Convention has not been signed, shall be allowed to adhere thereto at any time after the Convention has come into force, by means of a notification addressed to the Government of the Republic of Poland; WHEREAS, the Senate of the Congress of the Philippines, by its Resolution No. 19 adopted on May 16, 1950, concurred in the adherence by the Republic of the Philippines Government to the said Convention & the said Protocol in accordance with the Philippine Constitution, subject to the reservation, as provided in the Additional Protocol, that the 1st paragraph of Art. 2 of the Convention shall not apply to

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international transportation that may performed by the Republic of the Philippines; be assumed by the Philippine Government and as such, has the force and effect of law. The presumption is that this joint legislative-executive act was first carefully studied and determined to be constitutional before it was adopted. Petitioner's allegation have not overcome this presumption. Moreover, the treaty since 1950 has not been rejected by the Philippine Government. SECOND ISSUE: W/NOT THE WC SHOULD BE RENDERED IRRELEVANT BY THE DOCTRINE OF REBUS SIC STANTIBUS? HELD: No. The circumstance that the airline industry was still in infancy when the Convention was made, alone, is not sufficient justification for the rejection of the treaty at this time. The changes recited by petitioner were not entirely unforeseen although they were expected in a general sense only. (Check Art.41). THIRD ISSUE: W/NOT THE REQUISITS OF THE WC IS MERELY A MATTER OF VENUE OR JURISDICTION? HELD: Jurisdiction (1) The wording of Art. 32, which indicates the places where the action for damages "must" be brought, underscores the mandatory nature of Art. 28 (1). (2) This characterization is consistent with one of the objectives of the convention, which is to regulate in a uniform manner the conditions of international transportation by air. FOURT ISSUE: W/NOT PHILIPPIN JURISDICTION OVER THIS CASE? COURTS HAVE

WHEREAS, the Republic of the Philippines Government has formally adhered to the said Convention its Additional Protocol, & the Government of the Republic of Poland was notified of said adherence on November 9, 1950, when the instrument of adherence was registered in accordance with Article 38 (2) of said Convention; and, WHEREAS, the adherence of the Republic of the Philippines Government, pursuant to Art. 38(3) of said Convention, took effect as from the 90th day after November 9, 1950. NOW, THEREFORE, be it known that I, Ramon Magsaysay, Republic of the Philippines President, in pursuance of the aforesaid concurrence of the Senate of the Congress of the Philippines, and subject to the reservation as provided in the Additional Protocol that the First paragraph of Art.2 of the Convention shall not apply to international transportation that may be performed by the Republic of the Philippines, do hereby proclaim and make public the said Convention and said Protocol, a copy of which is hereto attached, to the end that the same and every article and clause thereof may be observed & fulfilled with good faith by the Republic of the Philippines and the citizens thereof. Notes: If common carrier, Civil Code first applies, then Warsaw Convention. Situations where Warsaw is applicable is in private carriers. The only criterion for the Warsaw Convention to be applicable is: it is applicable to ALL international transportation of persons, baggage, or goods performed by aircraft for hire. International transport: where there's transport by AIR & there is a point of contact in 2 high contracting parties (countries which have acceded to the Convention). E.g. transportation by PAL from Manila to San Francisco Federal Express - transporation of goods B. Constitutionality SANTOS V. NORTHWEST AIRLINES [210 S 256 (1992)] F: 1. A Filipino minor was informed by Northwest that he had no reservations for his flights, and had to be waitlisted, despite a previous confirmation. He sued for damages. Northwest moved to dismiss on the ground of lack of jurisdiction based on Art.28 (1) of the Warsaw Convention, where the complaint could be instituted in the territory of one of the contracting parties before the court of the (1) domicile of the carrier; (2) principal place of business; (3) where it has a place of business through which the contract had been made; and (4) place of destination. FIRST ISSUE: W/NOT THE WARSAW CONVENTION IS UNCONSTITUTIONAL? HELD: No. Art. 28 (1) of Although the case can without resolving the Warsaw Convention is a Warsaw Con. is constitutional. be decided on other grounds constitutional question, the treaty commitment voluntarily

HELD: No. Art. 28 (1) provides that an action for damage must be brought at the option of the plaintiff: (a) before the court of the domicile of the carrier; (b) the court of its principal place of business; (c) the court where it has a place of business thru w/c the contract had been made; (d) the court of the place of destination. In this case, the ff. were not followed, and hence the Philippines, not being one of the courts mentioned in Art.28 (1), does not have jurisdiction over the case. (1) court of domicile is Minnesota, U.S.A; (2) principal place of business of carrier is also U.S.A; (3) place of business where contract was made was in San Francisco; (4) place of destination is also San Francisco, Santos having purchased a round trip-ticket from SFO-TYO-MNL, then back to TYO- SFO. The "ultimate destination" being San Francisco. The court called upon to determine the applicability of the limitation provision must first be vested with the appropriate jurisdiction. If the carrier is indeed is indeed not guilty of WILLFUL MISCONDUCT, it can avail itself of the limitations set forth in this article. But it can be done only if the action has first been commenced properly under the rules set forth in Art.28 (1). Notes: The enumeration of the causes of action in the WC is not an exclusive list. You can have a cause of action even if it is not: (a) death or wounding of passenger; (b) damage or loss or destruction of checked baggage; (c) delay in transportation of passengers, luggage and goods. The case of Northwest is actually overbooking. Delay still a cause of action under WC. Note however, that the limitations of liability in the Convention favors the carrier.

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C. When Applicable Art. 1. (1) This convention shall apply to all international transportation of persons, baggage, or goods performed by aircraft for hire. It shall apply equally to gratuitous transportation by aircraft performed by an air transportation enterprise. (2) For the purpose of this convention the expression "international transportation" shall mean any transportation in which, according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the transportation or a transshipment, are situated either within the territories of two High Contracting Parties, or within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty, suzerainty, mandate, or authority of another power, even though that power is not a party to this convention. Transportation without such an agreed stopping place between territories subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party shall not be deemed to be international for the purposes of this Convention. (3) Transportation to be performed by several successive air carriers shall be deemed, for the purposes of this Convention, to be one undivided transportation, if it has been rendered by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a series of contracts is to be performed entirely w/in a territory subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party. Art. 2. (1) This convention shall apply to transportation performed by the state or by legal entities constituted under public law provided it falls within the conditions laid down in Art .1. (2) This convention shall not apply to transportation performed under the terms of any international postal convention. D. Liabilities Under the Convention Art. 17. The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. Art. 18. (1) The carrier shall be liable for damage sustained in the event of the destruction or loss of, or of damage to, any checked baggage, or any goods, if the occurrence which caused the damage so sustained took place during the transportation by air. (2) The transportation by air within the meaning of the proceeding paragraph shall comprise the period during which the baggage or the goods are in charge of the carrier, whether in an airport or on board an aircraft, or in the case of a landing outside an airport, in any place whatsoever. (3) The period of the transportation by air shall not extend to any transportation by land, by sea, or by river performed outside of an airport. If however, such transportation takes place in the performance of a contract for transportation by air, for the purpose of loading, delivery, or transshipment,any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the transportation by air. Art. 19. The carrier shall be liable for damage occasioned by delay in the transportation by air of passengers,baggage, or goods.

NORTHRWEST V. CUENCA [14 S 1063 (1965)] F: Nicolas Cuenca, an official delegate of Philippines to a conference in Tokyo, was transferred from first class to tourist class despite his first class ticket. The Northwest agent also treated him rudely in front of other passengers. Northwest argues that according to the Warsaw Convention, Arts. 17, 18, 19, an air carrier is liable only in the event of (a) death of a passenger or injury suffered by him; (b) of destruction or loss of, or damage to any checked baggage/goods; & (c) delay in the transportation by air of passengers, baggage or goods. ISSUE: W/NOT CUENCA HAS A CAUSE OF ACTION THOUGH NOT AMONG THOSE MENTIONED IN THE WC? HELD: Yes. The said articles merely declare the carrier liable for damages in the enumerated cases, if the conditions therein specified are present. Neither the provisions of said articles nor others regulate or exclude liability for other breaches of contract by the carrier. Under petitioner's theory, an air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd. ALITALIA V. IAC [192 SCRA 10 (1990)] F: Dr. Felipa Pablo, an Associate UP Professor and research grantee of the Philippine Atomic Energy Agency was scheduled to speak in a UN meeting in Ispra, Italy. She arrived in Milan a day before the meeting, but her luggage (where her speech was) was delayed, and arrived a day after the meeting. She returned to Manila before the meeting. ISSUE: W/NOT THE WC SHOULD APPLY TO LIMIT ALITATLIA'S LIABILITY? HELD: No. The WC does not operate as an absolute limit of the extent of an airline's liability. It does not regulate or exclude liability for other breaches of contract by the carrier. Under the WC, an air carrier is made liable for damages for delay in the transportation by air of passengers, luggage or goods. The WC also limits the liability of the carrier to 250 francs per kilo of the total weight of the package. The WC denies to the carrier availment of the provisions which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the court seized of the case, is considered as willful misconduct, or if the damage is caused by any agent of the carrier acting w/in the scope of his employment. 2. The WC does not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and employees or for some particular or exceptional damage. The WC has been held inapplicable where there was proof of malice or bad faith attributable

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CFI ordered PanAm to pay PAGE 106 . As a consequence the film exhibitions he set up & promoted for. PanAm's liability is limited to $600. but the nullity of any such provision shall not involve the nullity of the whole contract.YES. IAC (164 SCRA) F: Pangan's luggages didn't arrive w/ his flight. Such contract is governed by Art. you can still sue under Warsaw. Pablo. (e) A statement that the transpo. to Art. can only be brought subject to the conditions and limit set out in this convention.000) Where. character. & her Co. Was TC correct? --.22(2). is subject to the rules relating to liability established by this convention. was awarded because of the presence of some special species of injury caused to Dr. In that case. 24.17. for P83. however. asked P182. in accordance w/ the law of the court to w/c the case is submitted. RE: BAGGAGE/GOODS (2) In the transportation of checked baggage and of goods. and that if he exercises that right. PAN AM v. Art. 23. should apply. damages may be awarded in the form of periodical payments. there was no bad faith on the part of the employees. PAN AM (CA CASE) F: Feliciano. Any provision tending to relieve the carrier of liability or to fix a lower limit that which is laid down in this convention shall be null and void. HOWEVER FOUNDED. irregularity.000 francs. Art. provided that the carrier may reserve the right to alter the stopping places in case of necessity. NOTES: Even if you base your claim on quasi-delict. (3) As regards objects of w/c the passenger takes charge himself. unless he proves that the sum is grater that the actual value to the consignor at delivery. This case. Nevertheless. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. (1) In the cases covered by Arts. (1) The carrier shall not be entitled avail himself of the provisions of this E. (d) The name & address of the carrier/s. the contract of carriage of PET's baggage is based on the conditions in the airline. Such provisions have been held to be a part of the contract of carriage. (2) The absence. the liability of the carrier shall be limited to 5. (4) The sums mentioned above shall be deemed to refer to the French franc consisting of 65 1/2 milligrams of gold at the standard of fineness of nine hundred thousandths. F. (1) In the transportation of passengers the liability of the carrier for each passenger shall be limited to the sum of 125. FELICIANO v. invoking Art. Nevertheless. & is valid & binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation. (Now $100.24 (1). Nominal damages however. (2) In the case covered by Art.000 for the value of the contents of her lost luggage (including loss of possible opportunities). at the time when the package was handed over to the carrier. Inasmuch as Pangan failed to declare any higher value for his luggage & to pay add'l charges. if the carrier accepts a passenger w/o a passenger ticket having been delivered he shall not be entitled to avail himself of those provisions of this Convention w/c exclude or limit his liability.YES.000 francs. Indeed.TRANSPORTATION AND MARITIME LAW to its officers and employees. particulars: (a) The place & date of issue. by special contract. the carrier will be liable to pay a sum not exceeding the declared sun. (1) For the transpo. Since there is no evidence that PET had declared a higher value for her lost luggage for w/c the corresponding value. (c) The agreed stopping places.000 for actual damages. a special declaration of the value of the delivery and has paid a supplementary sum if the case so requires. When limitations unavailable Art. the equivalent capital value of the said payments shall not be exceed 125. or loss of the passenger ticket shall not affect the existence or the validity of the contract of transportation. however. the carrier and the passenger may agree to a higher limit of liability. which shall remain subject to the provisions of this convention. to not more than $20 per kilo. the provisions of such being found at the back of the ticket. the alteration shall not have the effect of depriving the transportation of its intl. unless the consignor has made.22. the liability of the carrier shall be limited to a sum of 250 francs per kilogram (Now $20 per kilo). the provisions of the preceding paragraph shall also apply. as stipulated at the back of the ticket. ISSUE: WON Pangan is bound by such Warsaw provisions & hence is entitled only to $600 ($20 standard X 30 kilos) ---. Here. was cancelled. These sums may be converted into any national currency in round figures. the Warsaw Con. w/c shall none the less be subject to the rules of this convention.. TC held that there was no issue of fact except as to amount& awarded $600 ($20 X 30 kgs). PanAm contended that such award was beyond the limitation of liability set forth in the Warsaw Con.w/o prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. of passengers the carrier must deliver a passenger ticket w/c shall contain the ff.25. PanAm contends its liability if limited by the Warsaw Con. 3.000 francs per passenger. (b) The place of departure & of destination. Limitations on Liability RE: PASSENGERS Art. SC has granted damages on the ground of fraud or bad faith due to the personal misconduct of airline employees.18 & 19 any action for damages.

then back to TYO. has been held inapplicable where there was proof of malice or bad faith attributable to its officers & employees.25) 2. default amounting to wilful misconduct accdg. (1) court of domicile is U. Pablo. (2) Questions of procedure shall be governed by the law of the court to w/c the case is submitted. (2)In case of damage. (3) Every complaint must be made in writing upon the document of transportation or by separate notice in writing dispatched w/in the times aforesaid. If damage wasn't one of the enumerations in the WC. an action for damages lies in accordance w/ th terms of this convention against those legally representing his estate. (3) place of business where contract was made was in San Francisco. SANTOS v. (4) Failing complaint w/in the times aforesaid. within 3 days from the date of receipt in the case of BAGGAGE and 7 days from the date of receipt in the case of GOODS. He sued in CFI for breach of contract & bad faith. Art. 28(1) provides that an action for damage must be brought at the option of the plaintiff: (a) before the court of the domicile of the carrier.g. 3.NO. (4) place of destination is also San Francisco. CA (165 SCRA) F: Vinluan. Art. or where he has a place of business through w/c the contract has been made. if injury appears in SFO-NYK. to court where action is brought. HERE. HOWEVER. xxx In this case. 4. (d) the court of the place of destination. in his MNL-Europe-NYK.26. no action shall lie against the carrier. It just can't avail of the limitation on liability. F. MNL-SFO via PAL } one continuing SFO-NYK via United } ticket Hence. ACCRA lawyer.28 (1). Such inattention & lack of care for interest of its passengers amount to bad faith w/c entitles passenger to moral damages. (1) Receipt by the person entitled to the delivery of baggage of goods w/o complaint shall be prima facie evidence that the same have been delivered in good condition & in accordance w/ the document of transpo. is equal to one transport. ALITALIA v. Minnesota. Art. 27. (c) the court where it has a place of business thru w/c the contract had been made. Any clause contained in the contract an all special agreements entered into before the damage occurred by which the parties A: YES. not being one of the courts mentioned in Art.. NOTES: Q: In what cases can carrier NOT invoke limitations? A: 1. does not have jurisdiction over the case. There was obvious discrimination & humiliation to w/c Vinluan was subjected. accepting goods w/o air waybill/baggage w/o baggage check. air transport. Thus it can still invoke the provisions on NOTICE or PRESCRIPTION/LACK OF CAUSE OF ACTION. and hence the Phils. if the damage is caused by his wilful misconduct or by such default on his part as. is the damage is caused under the same circumstances by any agent of the carrier acting w/in the scope of his employment.SFO. NOTE: No notice requirement in case or a person's death or injury. E. Warsaw can be applied.g. e. Nominal damages however. were not followed. in the territory of one of the High Contracting Parties. In the case of death of the person liable. & case was filed beyond the 2 year requirement. accepting passengers w/o passenger ticket (Art. was downgraded from 1st class to economy & was issued refund application. The "ultimate destination" being San Francisco. NORTHWEST (supra) Art. The carrier can invoke prescription. TWA v. and at the latest. the ff. Conditions of Liability PAGE 107 . (2) Similarly the carrier shall not be entitled to avail himself of the said provisions. The Con. carrier may be liable for a higher amount than the limitation.S. (His NYK-SFO flight particularly) He also noticed that white Caucasian passengers who checked in later than him were given preference in 1st class seats. ISSUE: WON Warsaw Con. NOTES: His entire trip. Q: Can carrier rely wilfull misconduct? on WC if it was guilty of Art. was awarded because of the presence of some special species of injury caused to Dr. the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage.IAC (supra) The Convention does not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and employees or for some particular or exceptional damage.TRANSPORTATION AND MARITIME LAW convention w/c exclude or limit his liability. Santos having purchased a round trip-ticket from SFO-TYO-MNL. (b) the court of its principal place of business. no bad faith of EES. is considered to be equivalent to wilful misconduct. 32. save in the case of fraud on his part. in accordance w/ the law of the court to w/c the case is submitted. 28. (2) principal place of business of carrier is also US. even though he availed of the services of other airlines.25 w/c says that the WC doesn't apply entirely.. There is nothing in Art.32). w/c became available due to "no show" passengers. The only time when WC isn't applicable is when it's not intl. But if suit is brought w/in 2 years. (1) An action for damage must be brought at the option of the plaintiff. or before the court at the place of destination. wilfull misconduct (Art. In case of DELAY the complaint must be made at the latest w/in 14 days from the date on w/c the baggage or goods have been placed at his disposal.SFO-MNL flight. limit on liability can be availed of --. either before the court of the domicile of the carrier or of his principal place of business .

shall be null and void. whether by deciding the law to be applied or by altering the rules as to jurisdiction. PAGE 108 . if the arbitration is to take place within one of the jurisdictions referred to in the first paragraph of Article 28. arbitration clauses shall be allowed. subject to this convention.TRANSPORTATION AND MARITIME LAW purport to infringe the rules laid down by this convention. Nevertheless. for the transportation of goods.

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