San Beda College of Law

TRANSPORTATION LAWS CONTRACT OF TRANSPORTATION/ CARRIAGE  A contract whereby a person, natural or juridical, obligates to transport persons, goods, or both, from one place to another, by land, air or water, for a price or compensation.  Classifications: 1. Common or Private 2. Goods or Passengers 3. For a fee (for hire) or Gratuitous 4. Land, Water/maritime, or Air 5. Domestic/inter-island/coastwise or International/foreign  It is a relationship which is imbued with the public interest. COMMON CARRIER  Persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public (Art. 1732, Civil Code).  Art. 1732 of the New Civil Code avoids any distinction between one whose principal business activity is the carrying of persons or goods or both and one who does such carrying only as an ancillary activity (sideline). It also avoids a distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does the law distinguish between a carrier offering its services to the general public that is the general community or population and one who offers services or solicits business only from a narrow segment of the general population. A person or entity is a common carrier even if he did not secure a Certificate of Public Convenience (De Guzman vs. CA, 168 SCRA 612).  It makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation should be by motor vehicle. (First Philippine Industrial Corporation vs. CA)  One is a common carrier even if he has no fixed and publicly known route, maintains no terminals, and issues no tickets (Asia Lighterage Shipping, Inc. vs. CA).  Characteristics: 1. Undertakes to carry for all people indifferently and thus is liable for refusal without sufficient reason (Lastimoso vs. Doliente, October 20, 1961); 2. Cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in these goods; 3. No monopoly is favored (Batangas Trans. vs. Orlanes, 52 PHIL 455); 4. Provides public convenience.


PRIVATE CARRIER  One which, without being engaged in the business of carrying as a public employment, undertakes to deliver goods or passengers for compensation. (Home Insurance Co. vs. American Steamship Agency, 23 SCRA 24)  TESTS WHETHER CARRIER IS COMMON OR PRIVATE:  The SC in First Philippine Industrial Corporation vs. CA (1995) reiterated the following tests: 1. It must be engaged in the business of carrying goods for others as a public employment and must hold itself out as ready to engage in the transportation of goods generally as a business and not as a casual occupation; 2. It must undertake to carry goods of the kind to which its business in confined; 3. It must undertake to carry by the method by which his business is conducted and over its established roads; and 4. The transportation must be for hire.  In National Steel Corp. vs. CA (1997) the SC held that the true test of a common carrier is the carriage of goods or passengers provided it has space for all who opt to avail themselves of its transportation for a fee. COMMON CARRIER PRIVATE CARRIER

1. As to availability Holds himself out for Contracts with all people particular individuals indiscriminately or groups only 2. As to required diligence Extraordinary Ordinary diligence is diligence is required required 3. As to regulation Subject to State Not subject to State regulation regulation 4. Stipulation limiting liability Parties may not agree Parties may limit the on limiting the carrier’s liability, carrier’s liability provided it is not except when contrary to law, provided by law morals or good customs 5. Exempting circumstance Prove extraordinary caso fortuito, Art. diligence and Art. 1174 NCC 1733, NCC 6.Presumption of negligence There is a No presumption of presumption of fault fault or negligence or negligence 7.Governing law

 CHAIRPERSON: Garny Luisa Alegre  ASST. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws); Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)

San Beda College of Law
Law on common carriers Law on obligations and contracts e.


GOVERNING LAWS A. Domestic/inter-island/coastwise  Applicable to Land, Water, and Air transportation 1. Civil Code - primary 2. Code of Commerce (Arts. 349, 379, 573-734, 580, 806-845) - suppletory B. International/foreign/overseas (Foreign country to Philippines)  Applicable to Water/maritime and Air transportation  The law of the country of destination generally applies. 1. Civil Code - primary 2. Code of Commerce - suppletory 3. Others - suppletory a. Water/maritime: Carriage of Goods by Sea Act (COGSA) b. Air: Warsaw Convention I. NEW CIVIL CODE (Arts. 1732-1766) REQUIREMENT OF EXTRAORDINARY DILIGENCE  Rendition of service with the greatest skill and utmost foresight. (Davao Stevedore Co. v. Fernandez)  Rationale: 1. From the nature of the business and for reasons of public policy (Art. 1733) 2. Relationship of trust 3. Business is impressed with a special public duty 4. Possession of the goods 5. Preciousness of human life  A common carrier is not an absolute insurer of all risks of travel. COVERAGE 1. Vigilance over goods (Arts. 1734-1754); and 2. Safety of passengers (Arts. 1755-1763). PASSENGER  A person who has entered into a contract of carriage, express or implied, with the carrier. They are entitled to extraordinary diligence from the common carrier.  The following are not considered passengers, and are entitled to ordinary diligence only: a. One who has not yet boarded any part of a vehicle regardless of whether or not he has purchased a ticket; b. One who remains on a carrier for an unreasonable length of time after he has been afforded every safe opportunity to alight; c. One who has boarded by fraud, stealth, or deceit; d. One who attempts to board a moving vehicle, although he has a

f. g.

ticket, unless the attempt be with the knowledge and consent of the carrier; One who has boarded a wrong vehicle, has been properly informed of such fact, and on alighting, is injured by the carrier; Invited guests and accommodation passengers. (Lara vs. Valencia) One who rides any part of the vehicle which is unsuitable or dangerous or which he knows is not designed or intended for passengers.

DEFENSES OF A COMMON CARRIER IN THE CARRIAGE OF GOODS CASO FORTUITO/FORCE MAJEURE  Requisites: a. Must be the proximate and only cause of the loss b. Exercise of due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster (Art. 1739) c. Carrier has not negligently incurred in delay in transporting the goods (Art. 1740)  Fire is not considered a natural disaster or calamity as it arises almost invariably from some act of man. (Eastern Shipping Lines Inc. vs. IAC)  Mechanical defects are not force majeure if the same was discoverable by regular and adequate inspections. (Notes and Cases on the Law on Transportation and Public Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.120122) 2. ACTS OF PUBLIC ENEMY  Requisites: a. Must be the proximate and only cause of the loss b. Exercise of due diligence to prevent or minimize the loss before, during or after the act causing the loss, deterioration or destruction of the goods (Art. 1739) 3. NEGLIGENCE OF THE SHIPPER OR OWNER a. Sole and proximate cause: absolute defense b. Contributory: partial defense. (Art. 1741) 4. CHARACTER OF THE GOODS OR DEFECTS IN THE PACKING OR IN THE CONTAINER  Even if the damage should be caused by the inherent defect/character of the goods, the common carrier must exercise due diligence to forestall or lessen the loss. (Art. 1742)  The carrier which, knowing the fact of improper packing of the goods upon ordinary observation, still accepts the goods notwithstanding such condition, is not relieved of liability or loss or injury resulting therefrom. (Southern Lines, Inc. v. CA, 4 SCRA 258) 5. ORDER OR ACT OF PUBLIC AUTHORITY

 CHAIRPERSON: Garny Luisa Alegre  ASST. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws); Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)

(Maranan v. Navidad. vs. Jose Fernando Llave (Insurance). The duty which the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom (Dangwa Trans Co. and they are liable for injuries suffered from the sudden starting up or jerking of their conveyances while doing so. (Del Prado v. Consequently. (Art. 16 SCRA 641) CARRIAGE OF PASSENGERS Parties 1. 2176. Perez)  The carrier is liable when its personnel allowed a passenger to drive the vehicle causing it to collide with another vehicle resulting to the injuries suffered by the other passengers. 1743). (Art. CA 202 SCRA 574). Manila Electric Co. COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. 2. [2003])  All persons who remain on the premises within a reasonable time after leaving the conveyance are to be deemed passengers. (Lu Do v. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. John Lemuel Gatdula (Banking Laws). (Art. (MRR vs. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. (La Mallorca v. 52 Phil 900) LIABILITY OF A COMMON CARRIER FOR DEATH OR INJURIES TO PASSENGERS DUE TO ACTS OF ITS EMPLOYEES AND OTHER PASSENGERS OR STRANGERS IN COMMERCIAL LAW FOR ACTS OF ITS EMPLOYEES FOR ACTS OF OTHER PASSENGERS OR STRANGERS Required diligence and defense Extraordinary Ordinary diligence diligence Nature of liability Tort. CA. Common carrier Shipper Consignee Delay in delivery. Karl Steven Co (Special Laws).. 1763 be on duty at the time of the act. Common carrier Passenger CARRIAGE OF GOODS 1. Abiotiz Shipping Corporation v. Shirley Mae Tabangcura. destruction. limited The employee must by Art. (LRTA v. Binamira. 101 Phil 120) The duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip. 179 SCRA 95)  It is the duty of common carriers of passengers to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to enter. Robespierre CU (Law on Intellectual Property) . The defense under said articles is applicable to negligence in quasidelicts under Art. 1738)  Delivery of goods to the custom authorities is not delivery to the consignee. (Ganzon v. or deterioration of the goods Cause of liability Death or injury to the passengers Duration of liability From the time the goods are unconditionally placed in the possession of. Ballesteros. but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. however. CA 161 SCRA 646)  Diligence in the selection and supervision of employees under Article 2180 of the Civil Code cannot be interposed as a defense by the common carrier because the liability of the carriers arises from the breach of the contract of carriage. loss. 17 SCRA 739 . 1737)  It continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination until the consignee has bee advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. Not absolute. 2. Bon Vincent Agustin (Corporation Law). 1736)  It remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or owner has made use of the right of stoppage in transitu. 3. Inc.San Beda College of Law 56 MEMORY AID  Said public authority must have the power to issue the order (Art. CA. the common carrier will be held liable.. where the officer acts without legal process. Aldrich Del Rosario (Transportation Laws). and includes a reasonable time to see after his baggage and prepare for his departure. and received by the carrier for transportation until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive them. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law).

CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. (Art. (Art. John Lemuel Gatdula (Banking Laws). Caso fortuito a. Order or act of competent public authority (Art. Art. 1744. 1744) 2. Dollar. to transport the passenger safely. 1735) (Art. by COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. provided it be: a) In writing. 245 SCRA 796) Defenses 1.San Beda College of Law 57 MEMORY AID Presumption of negligence Art. Reduction of degree of diligence to ordinary diligence. if it is reasonable and just under the circumstances and has been fairly and freely agreed upon. 1758) Void stipulations 4. Act or omission of the shipper or the owner of goods d. Stipulation limiting liability to the value of the goods appearing in the bill of lading. 1748) 4. signed by the shipper or owner. 53 PHIL 124) burden of explaining should fall on the carrier. destruction or deterioration of the goods. (Coastwise Lighterage Corp. earthquake. Aldrich Del Rosario (Transportation Laws). (Art. Jose Fernando Llave (Insurance). (Art.1735 Civil Code Art. Exercise of extraordinary extraordinary diligence (Art.1755 Civil Code Reason: As to when and how goods were Reason: The contract between the passenger damaged in transit is a matter peculiarly within and the carrier imposes on the latter the duty the knowledge of the carrier and its employees. Karl Steven Co (Special Laws). but not for willful acts or gross negligence. Flood. and c) Reasonable. 1749)  The diligence required in the carriage of the goods may be reduced by only one degree. no. Mere proof of delivery of goods to a carrier in good order and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima facie case against the carrier. 1756) Special circumstances: 2. hence the (Mirasol v. v. by posting of notices. lighting. from extraordinary to ordinary diligence or diligence of a good father of a family. (Art. unless the shipper or owner declares a greater value. Shirley Mae Tabangcura. responsibility of a common carrier for the 5. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). That the carrier shall not be responsible safety of passengers imposed by law by for the acts or omissions of his or its stipulation. 1734) Valid stipulations diligence IN COMMERCIAL LAW 1. Fixed amount of liability: A contract fixing the sum to be recovered by the owner or shipper for the loss. 1750) 3. Ordinary circumstance: Exercise of 1. 1745. Bon Vincent Agustin (Corporation Law). b) Supported by a valuable consideration other than the service rendered by the carriers. Act of the public enemy in war. just and not contrary to public policy. The character of the goods or defects in the packing or in the containers e. Robespierre CU (Law on Intellectual Property) . CA. That the carrier shall exercise a degree of diligence less than that of a good father of a Dispensing with or lessening the extraordinary family over the movable transported. or other natural disaster or calamity (plus force majeure) b. Limited liability for delay: An agreement limiting the common carrier’s liability for delay on account of strikes or riots (Art. 4) Stipulation limiting liability when a passenger is carried gratuitously. storm. 2. whether international or civil c.

(Art. John Lemuel Gatdula (Banking Laws). ship or other equipment used in the contract of carriage. 7.San Beda College of Law 58 MEMORY AID employees. vehicle. 1745) IN COMMERCIAL LAW statements on tickets or otherwise. Jose Fernando Llave (Insurance). Robespierre CU (Law on Intellectual Property) . Shirley Mae Tabangcura. Aldrich Del Rosario (Transportation Laws). (Art. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). 6. That the carrier is not responsible for the loss. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. destruction or deterioration of the goods on account of the defective condition of the car. 1757) COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. Karl Steven Co (Special Laws). That the carrier’s liability for acts committed by thieves or robbers who do not act with grave or irresistible threat. violence or force is dispensed with or diminished. Bon Vincent Agustin (Corporation Law).

CA. CODE OF COMMERCE A. Exception: maritime tort resulting in collision. 2004 ed. CA. Even where overbooking of passengers is allowed as a commercial practice. Culpa criminal (criminal negligence)  The driver is primarily liable. Culpa aquiliana (quasi-delict)  The carrier and driver are solidarily liable as joint tortfeasors. (Philippine Airlines vs. OVERLAND TRANSPORTATION (Arts. unless the its own negligence. the carrier cannot limit its liability for injury to. 228 SCRA 23) 3. It makes no difference that the liability of the bus driver and owner springs from contract while that of the owner and driver of the other vehicle arises from quasi-delict. Hence. or loss of.  No defense of due diligence in the selection and supervision of employees. Macondray Company Inc. Bill of lading 2. An airline ticket providing that carriage by successive air carriers is to be regarded as a “single operation” is to make the issuing carrier liable for the tortuous conduct of the other carrier. NCC.  Defense of due diligence in the selection and supervision of employees is available. 17 SCRA 606) SPECIAL RULES ON LIABILITES OF AIRLINE CARRIERS 1. because there is no privity between the driver and the passenger. 2. freight (H. Culpa contractual (breach of contract)  Only the carrier is primarily liable and not the driver. (Commercial Law Review. the relation between the carrier and the passenger continues until the latter has been landed at the port of destination and has left the carrier’s premises. A printed provision in the ticket limiting liability only to its own conduct is not enough to rebut that liability. 349-379) Applicability 1. 1733-1753 2003 CONCURRING CAUSES OF ACTION ARISING FROM THE NEGLIGENT ACT OF THE COMMON CARRIER 1. (Pandect of Commercial Law and Jurisprudence.) &  However. the airline company is liable if it refused to confirm a passenger’s flight reservation.E. (Fabre vs.  In case of injury to a passenger due to the negligence of the driver of the bus on which he is riding and of the driver of another vehicle. An unqualified higher value and limitation of liability to pays a higher rate of an agreed valuation. One exempting the 1.  Basis: Art. 282 SCRA 149) 4. (Shewaram vs. 1998 and 2000.  Basis: Art. Obligations of the carrier . (Singson vs. 238 SCRA 290) 5.1759.RULES ON PASSENGERS’ BAGGAGE IN THE CUSTODY OF IN THE CUSTODY THE PASSENGERS OF THE COMMON (HAND-CARRIED) CARRIER (CHECKED-IN) Legal nature of the baggage Necessary deposit Considered as “goods” Required diligence by the common carrier Diligence of a Extraordinary depositary (ordinary diligence diligence) Applicable rules Arts. CA. 226 SCRA 423) 2. CA. PAL. shipper declares a 2. The carrier is subsidiarily liable only if the driver is convicted and declared insolvent. the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. CA) LIMITATIONS AS TO CARRIER’S LIABILITY INVALID AS BEING VALID & CONTRARY TO ENFORCEABLE PUBLIC POLICY 1. 65 SCRA 237) II. Justice Jose Vitug. 100. NCC. (Zalamea vs. 2180.) IMPORTANT CONCEPTS: 1. (See notes on Collision) 3. Domestic land and water/maritime transportation. goods shipped where such injury or loss was caused by its own negligence.  Basis: Art. (Lufthansa German Airlines vs. (KLM Royal Dutch Airlines vs. Domestic Air Transportation. Cesar Villanueva. Heacock Company vs. An open-dated ticket constitutes a complete contract between the carrier and passenger. RPC. One limiting the carrier from any and liability of the carrier all liability for loss or to an agreed damage occasioned by valuation.) 2.Arts. convenience and safety of its stranded passengers until they have reached their final destination. In case of flight diversion due to bad weather or other circumstances beyond the pilot’s control. CA. 1997 ed. The carrier should necessarily exercise extraordinary diligence in safeguarding the comfort. An airline company which issued a confirmed ticket to a passenger covering successive trips on different airlines can be held liable for damages occasioned by “bumping off” by one of the successive airlines. the airline company would still be guilty of bad faith and still be liable for damages if it did not properly inform passenger that it could breach the contract of carriage even if they were confirmed passengers.

) Goods like livestock will be exposed to disease 8. and the vessel indicated in the bill of lading by which the goods are to be shipped is already in the port where the goods are held for shipment.3. or substances including dynamite and other explosives 2. which bill of lading is honored by the second and other interested carriers who do not issue their own bills. Duty to accept the goods GENERAL RULE: A common carrier cannot ordinarily refuse to carry a particular class of goods. (Mendoza vs. T. Document of title 3.) Strike 9.) 5. 5. 1311 (2). 9.) Failure to tender goods on time. (Fisher vs. Port – One which is issued by the carrier to whom the goods have been delivered. Yangco Steamship Co. p. (Compania Maritima vs. 3. 5.) Goods are injurious to health 6.P.) Acceptance would result in overloading 4.) Contrabands or illegal goods 5. 7. Insurance Company of North America. Aquino. he is estopped from thereafter denying that he assented to such terms. Non-negotiable . 6. Symbol of the goods OBLIGATIONS OF THE CARRIER A. capture by enemies and the like 7. Foul – One which contains a notation thereon indicating that the goods covered by it are in bad in which it is stated that the goods referred to therein will be delivered to the bearer or to the order of any person named therein.  Functions: 1. EXCEPTION: For some sufficient reason the discrimination against the traffic in such goods is reasonable and necessary.) Goods are unfit for transportation 3.issued when the goods have been actually placed aboard the ship with very reasonable expectation that the shipment is as good as on its way. IAC) 4. Spent – One which covers goods that already have been delivered by the carrier without a surrender of a signed copy of the bill. 4. 3. (Notes and Cases on the Law on Transportation and Public Utilities. 31 Phil 1). Received .  Instances when the carrier may validly refuse to accept the goods include the ff: 1.One in which it is stated that the goods referred to therein will be delivered to a specified person. The right of a party to recover for loss of shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier. 4. in the absence of fraud or mistake. and who becomes a party thereto when he demands fulfillment of that stipulation. Receipt of cargo 4. the contract being one of adhesion. On board . Custody – One wherein the goods are already received by the carrier but the vessel indicated therein has not yet arrived in the port.  Rules: 1. Acceptance of the bill of lading without dissent raises the presumption that all the terms therein where brought to the knowledge of the shipper and agreed to by him and. Through – One issued by the carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer. vs. The consignee. Contract to transport and deliver goods as stipulated 5.) Goods sought to be transported are dangerous objects. Ambiguity is construed against the carrier. or his status as stranger in whose favor some stipulation is made in said contract. Best evidence of the existence of the contract of carriage of cargo (Art. 8. (Sea-Land Services Inc. 2004 ed. ( in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. springs from either a relation of agency between him and the shipper.) Goods will be exposed to untoward danger like flood. Clean – One which does not indicate any defect in the goods. & Hernando. 353) 2. Negotiable .261)  Kinds: 1. (Notes and Cases on the Law on Transportation and . It is not indispensable for the creation of a contract of carriage. 12 SCRA 213) 2. 10. PAL Inc. although the instrument is oftentimes drawn up only by the consignor and carrier. becomes bound by all the stipulations contained therein by making a claim for loss on the basis of said bill of lading. 2. R. Right of abandonment Notice of damage Combined carrier agreement BILL OF LADING  The written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or to his order.

(ART. no matter from what cause it may have arisen. 2. the carrier is exempted from liability if carriage is insisted upon by the shipper.3 (6) Applicability 1. ARTICLE 366 COGSA Sec. (Roldan vs. and to give it an opportunity to make an investigation and fix responsibility while the matter is fresh. it takes the risk of delivering it in good condition as when it was loaded. Sweetlines. Water/maritime transpor transportation tation 3. The goods should be delivered to the consignee or any other person to whom the bill of lading was validly transferred or negotiated. Goods are rendered useless for sale or consumption for the purposes for which they are properly NOTICE OF DAMAGE (ART. Note: These rules does not apply to misdelivery of goods.  Shorter period may be stipulated by the parties because it merely affects the shipper’s remedy and does not affect the liability of the carrier. Within a reasonable time.1740) d. Goods shipped are damaged  Rules: a.Public Utilities. Carrier is bound to forward them in the 1st shipment of the same or similar goods which he may make to the point of delivery. Latent damage: shipper should file a claim against the carrier within 24 hours from delivery. Land. 358 Code of Commerce) 3. CA) B. Thus.68)  In case of carriage by railway.P. Clause air 2. 1. and In case of delay through the fault of the carrier (Art. Time of delivery Stipulated in Contract/Bill of Lading 1.  If despite the notice of claim. Domest 1.) tation Note: subject to the 2. R. C Not . Carrier is bound to fulfill the contract and is liable for any delay.  The filing of notice of claim is a condition precedent for recovery. 366)  Requisites for applicability: 1. Land/water/air transportation 3.1747) RIGHT OF CONSIGNEE TO ABANDON GOODS  Instances: 1. If delay is without just cause. Internationa ic/interl/ island/co overseas/foreign astwise (from foreign transpor country to Phils. & Hernando. 365). Lim Ponzo) Purpose of notice: To inform the carrier that the shipment has been damaged. 1. Carriage of goods 4. (PAL vs. p. 371). Patent damage: shipper must file a claim against the carrier immediately upon delivery (it may be oral or written) b. (PHILAMGEN vs. Bill of lading was issued: within 10 years. Effects of delay a. destined (Art. Merely suspends and generally does not terminate the contract of carriage b. rule on Paramount water. 2004 ed. Carrier remains duty bound to exercise extraordinary diligence c. Aquino. when a common carrier accepts cargo for shipment for valuable consideration. 363). the carrier refuses to pay. provided its objections are stated in the bill of lading. No bill of lading was issued: within 6 years 2. Natural disaster shall not free the carrier from responsibility (Art. Partial nondelivery. where the goods are useless without the others (Art. the contract limiting the common carrier’s liability cannot be availed of in case of loss or deterioration of the goods (Art. Carriag e of goods Notice of damage 1. in such absence. Civil Code rules on prescription apply. Domestic/interisland/coastwise transportation 2. action must be filed in court. No stipulation 1.) Prescriptive Period  Not provided by Article 366. and it is charged with liability therefore.  However. 2. Inc. T. Duty to deliver the goods  Not only to transport the goods safely but to the person indicated in the bill of lading. Carriage of goods 3.

fees allowed and A. 2 2. (ICTSI vs. (Pandect of Commercial Law and Jurisprudence. Loans on bottomry and respondentia 8. Causes of revocation of voyage 5. (Aboitiz Shipping Corp. Jorge Miravite.similar to transactions over real property with respect to effectivity against third persons which is done through registration. The evidence of real nature is shown by: 1) the limitation of the liability of the agents to . 1997 ed. 337 SCRA 381)  If the maritime lien arose prior to the recording of a preferred mortgage. 337 SCRA 381) ORDER OF PREFERENCE IN CASE OF SALE OF VESSEL R. Hypothecary . Accidents in maritime commerce MARITIME/ADMIRALTY LAW  It is the system of laws which particularly relates to the affairs and business of the sea. CA. p. (Ship Mortgage Decree of 1978) MARITIME LIEN  It constitutes a present right of property in the ship. to ships. Merchant vessel 2.the liability of the owner of the value of the vessel is limited to the vessel itself (Doctrine of Limited Liability).)  Constitutes property which may be acquired and transferred by any of the means recognized by law. date of delivery (delivered but damaged goods). or date when the vessel left port or from the date of delivery to the arrastre (nondelivery or loss). 2. 320 SCRA 244) CHARACTERISTICS OF MARITIME TRANSACTION 1.A. except the following following preferences in the preferences in the order stated: order stated: 1. 6106 P. 37 Phil. Rivera. whether foreign or otherwise. 373) GENERAL RULE: In case of a contract of transportation of several legs. to be afterward enforced in admiralty by process in rem. (PNB vs. 2002 ed.254)  Maritime laws apply only to maritime trade and sea voyages. CA. MERCHANT VESSEL  Vessel engaged in maritime commerce. 3- Prescriptive period None provided. 573. Doctrine of limited liability 4. (Notes and Cases on the Law on Transportation and Public Utilities. 585)  They are susceptible to maritime liens such as for the repair. Prudential Guarantee. They shall continue to be considered as personal property. Expenses and the proceedings. equipping and provisioning of the vessel in the preparation of a voyage. (PNB vs. Participants in maritime commerce 6.D. citing Francisco. which stands as the guaranty for their settlement. Justice Jose Vitug. a jus in re. 573-869) IMPORTANT CONCEPTS: 1. Real .  The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel. and to maritime conveyance of persons and property. each carrier is responsible for its particular leg in the contract. Civil One year from the Code applies. it shall have priority over the said mortgage lien. in satisfaction of which a vessel may be validly arrested and sold. 1521 Effectivity date 1969 1978 Applicability Overseas shipping Both domestic and only overseas shipping Kind of sale Judicial Judicial and extrajudicial Order of Preference A preferred The preferred mortgage shall have mortgage lien shall priority over all have priority over all claims against the claims against the vessel. CA. COMBINED CARRIER AGREEMENT (ART. MARITIME COMMERCE (Arts. 156 SCRA 169). as well as mortgage liabilities. Aquino & Hernando. Charter party 7. General Accident Fire and Life Assurance Corp. EXCEPTION: A combined carrier agreement where a carrier makes itself liable assuming the obligations and acquiring as well the rights and causes of action of those which preceded it. It refers to a contract for the unloading of goods from a vessel.)  Arrastre service is not maritime in character.2. 217 SCRA 359). 72). (Bar Review Materials in Commercial Law. their crews and navigation. and 2) the right to retain the cargo and embargo and detention of the vessel (Luzon Stevedoring Corp v. (Arts. except the vessel. the actual value of the vessel and the freight money. vs. (Rubiso vs. Maritime lien and Preference of Credit 3. Judicial costs of 1.

CA 156 SCRA 169). IAC. 5. In case of delay through the fault of the carrier (Art. Sec. Salvage. Claims under Workmen’s Compensation (Abueg vs. 3. (Art. Damages arising out of tort. the obligation is extinguished. . Maritime liens arising prior in time to the recording of the preferred mortgage. costs taxed by the court and taxes due to the Government. 2. 587). Escano. Expenses for repair on vessel completed before loss. Effects 1. and 3. Goods are 3. 3. Carrier there was should actual total pay the loss of the shipper vessel. 3. Crew’s wages. 365). and 7. Salaries and wages of the Captain and Crew of the vessel during its last voyage. and 4) insurance proceeds. 138. Art. insured as if 2. In case of leakage of at least ¾ of the contents of a cargo containing liquids (Art. 587). CA 138 SCRA 553). 156 SCRA 169) The interest extends to: 1) the vessel itself. 363). 4. the market value of  Effect of sale: All pre-existing claims in the vessel are terminated. San Diego 77 Phil 730). 2) equipments. 590 – indemnities from negligent acts of the captain (not the shipowner or ship agent) 3. RIGHT OF ABANDONMENT SHIPOWNER OR CONSIGNEE SHIP AGENT What may be abandoned Vessel Goods shipped Instances 1. 6. Transfer ownership of of the vessel ownersh from the ip on shipowner to the the shippers goods or insurer.  Abandonment of the vessel is necessary to limit the liability of the shipowner. from 2. Art. Insurance Code. 643 – liability for wages of the captain and the crew and for advances made by the ship agent if the vessel is lost by shipwreck or capture GENERAL RULE: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessel is entirely lost. 687) properly destined (Art. 837 – collision 4. bottomry loans. 166 SCRA 183) EXCEPTIONS: 1. In case of leakage rendered useless for of at least ¾ of the sale or consumption contents of a cargo for the purposes for containing liquids which they are (Art. Art. and indemnity due shippers for the value of goods transported but which were not delivered to the consignee. the shipper insurer must to the pay the carrier. 371). Taxes due the Philippine Government. where the indemnities to third goods are useless persons (Art. 5. 2. and 3.2. Collision between two negligent vessels. Partial nonliability from delivery. 5. 138. In case of constructive loss of the vessel (Sec. and 6. General average. Insurance Code). Costs of repair and equipment of the vessel. 2. DOCTRINE OF LIMITED LIABILITY (HYPOTHECARY RULE)  Cases where applicable: 1. Injury or damage due to shipowner or to the concurring negligence of the shipowner and the captain. 2. 687). without the others 2. (Luzon Stevedoring v. supplies and fuel during its last voyage. In case of civil liability from indemnities to third persons (Art. The vessel is insured (Vasquez vs. In case of civil 1. Transfer of 1. 4. and provisioning of food. The only instance were abandonment is dispensed with is when the vessel is entirely lost (Luzon Stevedoring vs. 4. 587 – civil liability for indemnities to third persons 2. (Chua v. Preferred mortgage registered prior in time. They will then be satisfied from the proceeds of the sale subject to the order of preference. In case there is no total loss and the vessel is not abandoned. including contract salvage. 3) freightage. In case of the (2). RIGHT OF SHIPOWNER OR SHIP AGENT TO ABANDON VESSEL  Instances: 1. 6. Preferred mortgages registered prior in time. Art. General average or salvage including contract salvage.

605) B. 2. 586) 2.e. 4. and all that relate to the requirements of navigation. 587) Duty of Ship Agent to Discharge the Captain and Members of the Crew  If the seamen contract is not for a definite period or voyage. Pilot A. (Art.  Powers and functions: 1. except on the following grounds: a. c. Appoint crew in the absence of ship agent. SHIPOWNERS AND SHIP AGENTS Shipowner (proprietario)  Person who has possession.  Not a mere agent under civil law. control and management of the vessel and the consequent right to direct her navigation and receive freight earned and paid. he may discharge them at his discretion. 640) Terms: 1. War or interdiction of commerce. 4. provisions of food and fuel. Make contracts for the charter of vessel in the absence of ship agent. Robbery. Interdiction of commerce – A governmental prohibition of commercial intercourse intended to bring about an entire cessation for the time being of all trade whatever. 4. 3. he is solidarily liable with the ship owner. to repair. make a new charter or insure the vessel after obtaining authorization from the shipowner or if granted in certificate of appointment. 2. Supercargoes E. Filipino citizen. 3. 609)  Inherent powers: 1. he may not discharge them until after the fulfillment of their contracts. Order repair of vessel to enable it to continue its voyage. as far as human power can effect it. Embargo. Shipowners and ship agents B. and provision the vessel. and small and coastwise. prohibiting the departure of ships or goods from some or all the ports of such state until further order. i. e.  Nature of position (3-fold character): 1. 3.the goods at the point of destinat ion. Captains and masters of the vessel C. Capacity to trade. 2. Prohibition to receive cargo at destination. Representative of the government of the country under whose flag he navigates. d. General agent of the shipowner. (Art. details of equipment. Officers and crew of the vessel D. and 6. (Art. CAPTAINS AND MASTERS  They are the chiefs or commanders of ships. Impose correctional punishment on those who. whether authorized or not. Supply. 3. Loss and damage to the goods loaded on the vessel without prejudice to their right to free themselves from liability by abandoning the vessel to the creditors. equip and provision the vessel. Blockade – A sort of circumvallation of a place by which all foreign connection and correspondence is. 3. (Art. 5. Legal capacity to contract. and freight of the vessel. (Art. Inability of the vessel to navigate. while on board vessel.  The terms have the same meaning. respectively. 2. armament. Theft. (Art. Order a new voyage. Technical director of the vessel. 5. All contracts of the captain. Blockade. while his possession continues. Embargo – A proclamation or order of a state. Civil Liabilities of the Shipowner And Ship Agent 1. CAUSES OF REVOCATION OF VOYAGE 1. 603)  If for a definite period. 2. subject to Art. usually issued in time of war or threatened hostilities. b. Discharge duties of the captain. (Art. Damage caused to the vessel or to its cargo through malice or manifest or proven negligence. Command the crew and direct the vessel to its port of destination. Contract in the name of the owners with respect to repairs.. Insubordination in serious matters.  Qualifications: 1. also includes the shipowner. fail to comply with his orders or are wanting in discipline. Must have passed the required physical and mental examinations required for licensing him as such. to be cut off. 610) . 2. Ship agent (naviero)  Person entrusted with provisioning and representing the vessel in the port in which it may be found. equip. Habitual drunkenness. large and overseas. 3.609. but are particularly used in accordance with the size of the vessel governed and the scope of transportation. PARTICIPANTS IN MARITIME COMMERCE A.

627)  Duties: 1. 618) C. captain attempts to change it. powers and responsibilities. 611)  Duties: 1. 6. By sale of part of the cargo. Observe rules to avoid collision. 2. Damages to vessel and to cargo due to lack of skill and negligence. If. From the consignee of the vessel. equipment. Damages due to nonobservance of marine regulations. Sailing Mate/First Mate 2. Damages due to misuse of power. 12. assuming in such case their powers and responsibilities. Examine the ship before the voyage. Engineers 4. (Art. 9. 8. sickness. Arrange well the cargo. 2. 2. 4. CA). Responsible for all the damages caused to the vessel and the cargo by reason of his negligence. 3. 5. and provisioning of the vessel unless he has expressly bound himself personally or has signed a bill of exchange or promissory note in his name. 612)  A ship’s captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage (InterOrient Maritime Enterprises Inc. By a loan on bottomry. 3. 3. Provide himself with maps and charts with astronomical tables necessary for the discharge of his duties. 4. For arrivals under stress. vs. 6. Accounting Book and Freight Book. Assign work to crew members. (Art. Crew  No liability under the following circumstances: 1. (Art. (Arts. From the consignee of the cargo. etc. Keep a Log Book. or death and shall assume all of his duties. following the decision of the captain in case of disagreement. Losses and fines for violation of laws. Damages due to mutinies. Keep the Binnacle Book. 628 .  No liability for the following: 1. For deviations. 11. Stay on board during the loading and unloading of the cargo. before beginning voyage. 7. or a naval war with the power to which the vessel was destined occurs. 10. 2.631) Second Mate  Takes command of the vessel in case of the inability or disqualification of the captain and the sailing mate. (Art. Damages caused to the vessel or to the cargo by force majeure. Demand a pilot while entering or leaving a port. (Art. 4. Be on deck while leaving or entering the port. Change the course of the voyage on consultation with the captain and the officers of the boat. Leave the vessel last in case of wreck. (Art. 632) Engineers . 2. 647) Sailing Mate/First Mate  Second chief of the vessel who takes the place of the captain in case of absence. Discipline the crew. Protest arrivals under stress and in case of shipwreck. Obligations contracted for the repair. 4. 8. Preserve the hull and rigging of the vessel. By drawing on the ship agent. 5. If a disease breaks out and be officially declared an epidemic in the port of destination. 7. 5. at the port of arrival. 620) Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain towards Passengers and Cargoes 1. 3. 3. Sources of funds to comply with the inherent powers of the captain (in successive order): 1. Comply with the requirements of customs. Follow instructions of and render an accounting to the ship agent. If the vessel should change owner or captain. 2. (Art. OFFICERS AND CREW 1. 3. Inventory the rigging and equipment of the vessel.  Third in command  Duties: 1. if laid up. 5. Hold in custody properties left by deceased passengers and crew members. Second Mate 3. Bring on board the proper certificate and documents and a copy of the Code of Commerce. health. 2. 4. Thefts and robberies of the crew.

Accident caused by force majeure or natural calamity provided the pilot exercised prudence and extra diligence to prevent or minimize damages. and full. Perpetration of a crime. engineers. Desertion. 4. 2. 637) Rules in case of Death of a Seaman  The seaman’s heirs are entitled to payment as follows: 1.III PPA Admin Order 03-85) SPECIAL CONTRACTS OF MARITIME COMMERCE 1. Aquino. Keep an Engine Book. but not exceeding 1/5 of the crew. Officers of the vessel but have no authority except in matters referring to the motor apparatus. Countermand or overrule by the master of the vessel in which case the registered owner of the vessel is liable. (Art. Not to change or repair the engine without authority of the captain. Charter party 2. and in their absence. if by voyage . By the voyage. 645) Complement of the Vessel  All persons on board. if on voyage in c. & Hernando. and licensed. In charge of the motor apparatus. Bill of lading 3. thus including the crew. PILOT  A person duly qualified. D.full payment. compensation up to time of death if engaged on wage b. (Notes and Cases on the Law on Transportation and Public Utilities. stokers and other employees on board not having specific designations. and 3. and service. Habitual drunkenness. EXCEPT: 1. (Art.P. preferring Filipinos. road or channel. necessary for the management. maneuvers. When two or more are hired. p. as when the pilot is obviously incompetent or intoxicated (Far Eastern Shipping Company vs. if by shares . if before departure. Contract of transportation of passengers on sea voyages 4.half of amount if death occurs on voyage out. he may take in foreigners. 4. There are occasions when the master may and should interfere and even displace the pilot. 3. 634) Classes of Seaman’s Contracts 1. T. 3. the Harbor Pilot is responsible for damage to a vessel or to life or property due to his negligence.none. the captain hires them. 632) Crew  The aggregate of seamen who man a ship. keeping an account and record of transaction as required in the accounting book of the captain. if after departure 2. (Art. R. where he is present and in his absence.  Compulsory Pilotage – States possessing harbors have enacted laws or promulgated rules requiring vessels approaching their ports to take on board pilots licensed under the local laws. the master does not surrender his vessel to the pilot and the pilot is not the master. 2. if captured due to carelessness . (Art. if captured in defense of vessel . By share of profits or freightage. and other instruments pertaining to the engines. Inform the captain of any damage to the motor apparatus. Art. SUPERCARGOES  Persons who discharges administrative duties assigned to him by ship agent or shippers.wages up to the date of the capture. 2. 5. (Art.  Master pro hac vice for the time being in the command and navigation of the ship. full. Supervise all personnel maintaining the engine. want of discipline. 3. or the ship’s company. Loan on bottomry 5. to conduct a vessel into or out of ports. 518) Liablity of Pilot GENERAL RULE: On compulsory pilotage grounds. 2. By the month. Just Causes for the Discharge of Seaman While Contract Subsists 1. or in certain waters.  Duties: 1. if death is due to defense of vessel . 5.  The term generally connotes a person taken on board at a particular place for the purpose of conducting a ship through a river. 4. the sailing mates. or from a port.  A contract by which an entire ship. (Sec. from the captain to the cabin boy.11. spare parts. 6. Keep the engines and boilers in good condition. 649) E. Physical incapacity. If death is natural: a.  While in exercising his functions a pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of the ship.full payment.  Hired by the ship agent. 2004 ed. Repeated incapacity and negligence.  Does not include the passengers or the persons whom the vessel is transporting. or some principal part thereof is let/leased by the . CA). Marine insurance CHARTER PARTY  A contract by virtue of which the owner or agent binds himself to transport merchandise or persons for a fixed price. Loan on respondentia 6. Repeated insubordination. 6. one of them shall be the chief engineer.

the charterer merely having use of the space in the vessel in return for his payment of the charter hired. Charterer  Classes: 1. accredit received persons Real contract goods from CONTRACT OF AFFREIGHTMENT (TIME OR VOYAGE CHARTER) Owner remains liable as carrier and must answer for any breach of duty Charterer is not regarded as owner. 689) Commercial concept law Consensual contract BAREBOAT OR DEMISE CHARTER Charterer becomes liable to others caused by its negligence Charterer regarded as owner pro hac vice for the voyage Owner of vessel relinquishes possession. Time charter – vessel is chartered for a fixed period of time or duration of voyage. (Art. 652 of the Code of Commerce Clauses Which May Be Included In a Charter Party Jason clause Clause paramount or paramount clause CHARTER PARTY An entire or complete contract. (Art. Existing vessel which should be placed at the disposition of the shipper 3. including the master and the crew. The vessel owner retains possession. Bareboat or demise – The charterer provides crew. Ship agent if authorized by the owner/s or given such power in the certificate of appointment. (Planters Products. It transforms a common carrier into a private carrier. Freight 4. transferring to the latter the entire command. If the leased property is sold to one who knows of the existence of the lease. who have legal control and possession of the vessel 2. Inc. command and navigation to charterer Common carrier is converted to private carrier. Civil law concept CHARTER PARTY Charterer may rescind charter party by paying half of the freightage agreed upon. 2. command and navigation of the ship Common carrier is not converted to a private carrier. either in whole or in majority part. command and navigation of the ship. Because the charterer is treated as owner pro hac vice.598) 4. The new owner is not compelled to respect the charter party so long as he can load the vessel with his own cargo. except when the cause arises from the unworthiness of the vessel. (Art. 226 SCRA 476)  Parties: 1. b.owner to another person for a specified time or use.609) REQUISITES OF A VALID CHARTER PARTY 1. lessee cannot give up the lease by paying a portion of the amount agreed upon. Owner or owners of the vessel. Captain in the absence of the ship agent or consignee and only if he acts in accordance with the instructions of the agent or owner and protects the latter’s interests. Contract of Affreightment – A contract whereby the owner of the vessel leases part or all of its space to haul goods for others. Charterer may subcharter entire vessel to 3rd person only if not prohibited in original charter. Compliance with Art. The shipowner leases to the charterer the whole vessel. PERSONS WHO MAY MAKE A CHARTER 1.  The shipowner retains the possession. CA. the charterer assumes the customary rights and liabilities of the shipowner to third persons and is held liable for the expense of the voyage and the wages of the seamen. BILL OF LADING More like a private receipt which the captain gives to . the new owner must respect the lease. vs. Ship owner or ship agent 2. The charterer is liable as if he were the owner. who thereby become the charter’s servants. just for that one particular purpose only.  The charterer becomes the owner of the vessel pro hac vice.  Kinds: a. possession and consequent control over the vessel’s navigation. Consent of the contracting parties 2. LEASE If for a definite period.679) 3. Voya ge or trip charter – the vessel is leased for one or series of voyages usually for purposes of transporting goods for charterer. food and fuel. (Art.

Embargo. 4. (Arts. 690) (Art 688) (Art. Terms: 1.) A clause in a charter party providing that the COGSA shall apply. 5. 2. 689) 1. Rights and Obligations of Parties SHIPOWNER OR SHIP AGENT 1. To leave the port if the charter er does not bring the CHARTERER 1. Prohibition to receive cargo. Return of the vessel due to pirates. then to the extent thereof the provision of the bill of lading is void. War or interdiction of commerce. Justice Jose Vitug.) 6.A stipulation in a charter party that in case of a maritime accident for which the shipowner is not responsible by law. Primage . 669678) Rescission of a Charter Party At At Fortuitous charterer’s shipowner’s causes request request (Art. Inability of the vessel to navigate. 7. To wait if the vessel needs repair. to bring cargo to nearest neutral port in case of war or blockad e. To substitu te another vessel if load is less than 3/5 of capacit y. 2. the cargo shippers. 3. contract or otherwise. 1. To unload cargo clandes tinely placed 4. To place in a vessel in a conditio n to navigat e. 679687) cargo within the lay days and extra lay days allowed.bonus to be paid to the captain after the successful voyage. By abandoning the charter and paying half of the freightage. 3. If the extra lay days terminate without the cargo being placed alongside the vessel. enemies or bad weather. 5. 3. 2. (Pandect of Commercial Law and Jurisprudence. To pay expenses for deviation. 2. If the vessel is charter ed wholly. 1. To pay losses to others for loading uncontracted cargo and illicit cargo. Error in tonnage or flag. 2. Demurrage – the sum fixed in the charter party as a remuneration to the owner of the ship for the detention of his vessel beyond the number of days allowed by the charter . 1997 ed. (Pandect of Commercial Law and Jurisprudence. To pay the agreed charter price. Sale by the owner of the vessel before loading by the charterer. 2. 5. To observe represe nted capacit y. not to accept cargo from others. 4. 1997 ed. consignees or owners shall contribute with the shipowner in general average. 4. and 5. Arrival at a port for repairs. Blockade. even though the transportation is domestic. subject to the extent that any term of the bill of lading is repugnant to the COGSA or applicable law. Failure to place the vessel at the charterer’s disposal. 3. To pay freightage on unboarded cargo. (Arts. Justice Jose Vitug.

but rather on the fact of actual physical transfer of cargo from one vessel to another. is to be returned if the things are safely transported.days allowed to charter parties for loading and unloading the cargo.I. Private instrument (Art. Outside of the cargo. 2. ( alongside ship. by vessel itself and and repayable upon repayable upon safe arrival of cargo arrival of vessel at at destination. 2. (ART. (Art. If the effects on which the money is taken is not subjected to any risk. or the transfer of goods from the vessel stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached.729) Note: Under existing laws. or the transfer for further transportation from one ship or conveyance to another. 4. 720) Contents: 1. by virtue of which one person lends to another a certain amount of money or goods on things exposed to maritime risks. and 4. (ART. 6. the balance will be considered a simple loan.B. Time for repayment.cost and freight. Policy signed by the contracting parties and the broker taking part therein 3. 719) 719) Who may contract LOAN ON BOTTOMRY Shipowner or ship Only the owner of agent. 201 SCRA 102) LOAN ON BOTTOMRY AND RESPONDENTIA  A real. whether ordinary or maritime. USUAL FORMS OF CONSUMMATING CONTRACTS 1. however competent and safe the vessel into which the transfer is made. – cost. may agree on any rate of interest.721) BOTTOMRY/ RESPONDENTIA Not subject to Usury Law Liability of the borrower is contingent on the safe arrival of the vessel or cargo at destination The last lender is a preferred creditor ORDINARY LOAN (MUTUUM) Subject Law to Usury Not subject to any contingency (absolute liability) The first lender is a preferred creditor WHEN LOAN ON BOTTOMRY OR RESPONDENTIA REGARDED AS SIMPLE LOAN 1. aleatory contract. Obligation of the debtor conditioned only upon safe arrival of the security at the point of destination. name and registry of the vessel. Kind. surname and domicile of the captain. 2. insurance and freight. 3. Voyage during which the risk is run (Art. F. Lender loaned an amount larger than the value of the object due to fraudulent means employed by the borrower. is a violation of contract and infringement of right of shipper and subjects carrier to liability if freight is lost event by cause otherwise excepted. F. Name. .  If done without legal excuse. Exposure of security to marine peril. Lay Days . 3. Extra Lay Days – days which follow after the lay days have elapsed.S. Names. Public instrument 2. 5.726) 2. TRANSSHIPMENT OF GOODS  The act of taking cargo out of one ship and loading it in another. Common elements: 1. . 3. CA. Amount of the loan and the premium stipulated. 5. which amount. C. 7. destination. the parties to a on board. & F. the residence of the owners the captain. Forms: 1. with its earnings. and which is lost if the latter are lost. Full amount of the loan is not used for the cargo or given on the goods if all of them could not have been loaded. C.  It is not dependent on the ownership of the transporting ships or in the change of carriers. Goods pledged to secure repayment.727) 3. 4.F.O. surnames and domiciles of the borrower and the for loading or unloading or for sailing. (CB Circular 905) MARINE INSURANCE LOAN ON BOTTOMRY OR . (Art. . LOAN ON RESPONDENTIA Definition Loan made by Loan taken on shipowner or ship security of the cargo agent guaranteed laden on a vessel. Deadfreight – the amount paid by or recoverable from a charterer of a ship for the portion of the ship’s capacity the latter contracted for but failed to occupy. (Magellan Manufacturing vs.A. unilateral.

It is the safety of the property. it is particular average.No. during the voyage designated. Loss due to inherent defect. known risk. 735) Note: If a vessel is hypothecated by bottomry only the excess is insurable. 3. its cargo or and borne by both from real and respective owners. it is general average. The cargo loaded on the vessel be different in from that agreed upon. Magsaysay. the obligation of the insurer becomes absolute Consensual contract RESPONDENTIA Indemnity is paid in advance by way of a loan In case of loss of the vessel due to a marine peril. where only the vessel or only the cargo is saved. vs. Loss due to the barratry on the part of the captain. (A. 2. Collision 4. EXCEPTIONS: 1. 2. (Art. Not only is there absence of a marine peril. Liability The owner of the All the persons goods which gave having an interest in rise to the expense or the vessel and the suffered the damage cargo therein at the shall bear this time of the average.  Expenses incurred to refloat a vessel. 101. common danger. (Sec. since a loan on bottomry partakes of the nature likewise of an insurance coverage to the extent of the loan accommodation.859) and lenders on bottomry and respondentia shall likewise contribute. vessel. 1997 ed. in order to continue its voyage.R.  Classes: 1. Concurrence of Marine Insurance and Loan on Bottomry/Respondentia 1. and if it is proven that the goods were on board. G. 3. 812)  The insurers (Art.Indemnity is paid after the loss has occurred In case of loss of the vessel due to a risk insured against. The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of the value over the amount secured by bottomry. (Art. Insurance Code) 2. The vessel was engaged in contraband. 4. Jan. and to the cargo from the port of loading to the port of consignment. (Art. which accidentally ran aground. The same rule would apply to the hypothecation of the cargo by respondentia. Inc. and not the voyage. Arrival Under Stress 3. vessel or both. deliberate sacrifice. Averages 2. do not constitute general average. 4. 806)  The person whose property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes general average. (Art. success. 809) 811) Requisites 1. and all damages or deterioration suffered by the vessel from departure to the port of destination. Particular or Simple Average 2. common safety factor. and 5. and deliberateness.732). Number of interests involved Only one interest Several interests involved involved Share in the damage or expense 100% share In proportion to the value of the owner’s property saved . Gross or General Average  Where both vessel and cargo are saved. the obligation of the borrower to pay is extinguished Real contract Hypothecary Nature of Bottomry/ Respondentia GENERAL RULE: The obligation of the borrower to pay the loan is extinguished if the goods given as security are absolutely lost by reason of an accident of the sea. 1955) PARTICULAR OR GROSS OR SIMPLE GENERAL Definition Damages or Damages or expenses caused to expenses the vessel or cargo deliberately caused that did not inure to in order to save the the common benefit. 810) occurrence of the average shall contribute to satisfy this average. (Art. (Art. 31. Justice Jose Vitug. (Pandect of Commercial Law and Jurisprudence. Loss due to the fault or malice of the borrower. L-6393. (Art. Shipwreck AVERAGE  An extraordinary or accidental expense incurred during the voyage in order to preserve the cargo. Agan. The value of what may be saved in case of shipwreck shall be divided between the lender and the insurer in proportion to the interest of each one.) ACCIDENTS IN MARITIME COMMERCE 1. proper formalities and legal steps. which constitutes the true foundation of general average.

but should the same be jettisoned. 813814) GOODS NOT COVERED BY GENERAL AVERAGE EVEN IF SACRIFICED 1. Goods carried on deck. (Art. Assembly and deliberation 2. preferring the heaviest one with the least utility and value. 819) 1. 6. DOMESTIC Deck cargo is allowed INTERNATIONAL Deck cargo is not allowed With shipper’s consent General average Particular average Without shipper’s consent Captain is liable Captain is liable ARRIVAL UNDER STRESS (ARRIBADA)  The arrival of a vessel at the nearest and most convenient port instead of the port of destination. pirates. 4. in case the cause has been risk of enemies. 820) Who bears expenses: The shipowner or ship agent is liable in case of unlawful arrival under stress.855 (2)) 3. In overseas shipping. But they shall not be liable for the damages caused by reason of a lawful arrival. 2. there must first be an assembly before departure. the existence of the cargo on board should be proven by means of the bill of lading.  Reason: In domestic shipping. York-Antwerp Rule) Jettison  Act of throwing cargo overboard in order to lighten the vessel. within 24 hours from arrival. and Malice. it must always contribute to general average and if jettisoned would be entitled to reimbursement. Resolution of the captain 3.Right to recover No reimbursement There may be reimbursement Kinds (not exclusive) Art. (Pandect of Commercial Law and Jurisprudence. privateers. 1997 ed. (Arts. (Art. If deck cargo is loaded with the consent of the shipper on coastwise shipping. (Rule IX. voyages are usually short and the seas are generally not rough. If deck cargo is loaded with the consent of the shipper on overseas trade. Risk of enemy not well known or manifest Defect of vessel due to improper repair. Goods not recorded in the books or records of the vessel. Fuel for the vessel if there is more than sufficient fuel for the voyage. 811 Procedure for recovery 1. Ratification by captain under oath. Entry of the resolution in the logbook 4. (Art. lack of foresight or skill of captain. Justice Jose Vitug. it would not be entitled to reimbursement because there is violation of the Y-A Rules. Delivery of the minutes to the maritime judicial authority of the first port.  It is the duty of the captain to continue the voyage without delay after the cause of the arrival under stress has ceased failing in such duty renders him liable. Those which are below the upper deck. When unlawful Lack of provision s due to negligenc e to carry accordin g to usage and customs. (Art. 809 Art. 2. Detailed minutes 5. negligenc e. it must always contribute to general average. 816) York-Antwerp (Y-A) Rules on Determining Liability for Averages With Regard To Deck Cargo 1. 815)  Jettisoned goods are not res nullius nor deemed “abandoned” within the meaning of civil law so as to be the object of occupation by salvage. Those which are on the deck. or accidents of the sea disabling it to navigate. 3.855) 2.)  In order that the jettisoned goods may be included in the gross or general average. the vessel is exposed for many days to perils of the sea. 3. 825) . well-founded fear of seizure. However. (Art. (Art. beginning with the one with greatest weight and smallest value. (ART. When lawful The inability to continue voyage is due to lack of provisions. 821) 2. if during the voyage the vessel cannot continue the trip to the port of destination. (ART. Deck cargo is allowed only in domestic/coastwise/inter-island shipping. and is prohibited in international/overseas/foreign shipping.  Order of goods to be cast overboard: 1.

the steamship from the moment the sailing vessel is seen. Even if such sudden movement is wrong. 8. 5. the smaller should give the right of way to the larger one. shall watch with the highest diligence her course and movements so as to be able to adopt such timely means of precaution as will necessarily prevent the two boats from coming in contact. privateers and other valid grounds. even when the crew of the latter has received word to lift anchor. Baco River Plantation Co. When two vessels are about to enter a port. (Art. There is a presumption against an improperly moored vessel. Captain shall assemble the officers and summon the persons interested in the cargo who may attend the meeting but without a right to vote. Captain should determine during the voyage if there is well founded fear of seizure. (Art. 2. Both vessels at fault  Each vessel must bear its own loss. v. Vessel at fault not known  Each vessel must bear its own loss. The officers shall determine and agree if there is well-founded reason after examining the circumstances. It is in this zone that vessels must strictly observe nautical rules. Nautical Rules to Determine Negligence 1. 4. There is a presumption against a vessel which has no buoys to indicate the location of its anchors to prevent damage to vessels which may approach it. 827) 3. Objections and protests shall likewise be entered in the minutes. Second zone – time between moment when risk of collision begins and moment it becomes a practical certainty.  Error in Extremis . 831) . 3. Zones of Time in the Collision of Vessels 1. Allision  Impact between a moving vessel and a stationary one. 2..sudden movement made by a faultless vessel during the third zone of collision with another vessel which is at fault during the 2nd zone. The captain shall have the deciding vote. but both should be solidarily liable for damage to the cargo of both vessels. or on intersecting lines. 4. 2. (Art. Steps: 1. Vessels must have “proper look-outs” or persons trained as such and who have no other duty aside therefrom.  No rule is as yet applicable for none is necessary. unless a departure therefrom becomes necessary to avoid imminent danger. but the shippers of both vessels may go against the shipowners who will be solidarily liable.  It is in this period where conduct of the vessels is primordial. no responsibility will fall on said faultless vessel. A vessel leaving port should leave the way clear for another which may be entering the same port. unless it can be proved that there was no fault on its part. (Urrutia and Co. (Art.  An error in this zone would no longer be legally consequential. COLLISION  Impact of two vessels both of which are moving. 5. 2. Third zone – time when collision is certain and time of impact. when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason. 9. CA) Nautical Rules as to Sailing Vessel and Steamship 1. 6. (Smith Bell v. 7. if they collide. There is a presumption against the vessel with spread sails which collides with another which is at anchor and cannot move. the fault is presumed to be imputable to the one who arrived later. 3. 826) 2. When two vessels meet. both vessels bear their respective damage. Where a steamship and a sailing vessel are approaching each other from opposite directions. the farther one must allow the nearer to enter first. One vessel at fault  Vessel at fault is liable for damage caused to innocent vessel as well as damages suffered by the owners of cargo of both vessels. 4. The vessel which leaves later is presumed to have collided against one which has left earlier. 26 PHIL 632) Cases Covered By Collision and Allision 1. 828)  Doctrine of Inscrutable Fault – In case of collision where it cannot be determined which between the two vessels was at fault. 3. The agreement shall be drafted and the proper minutes shall be signed and entered in the log book. First zone – all time up to the moment when risk of collision begins. Third vessel at fault  The third vessel will be liable for losses and damages. but the shippers of both vessels may go against the shipowners who will be solidarily liable. The sailing vessel is required to keep her course unless the circumstances require otherwise. There is a presumption against the vessel which sets sail in the night.

for the purpose of recovering losses and damages.  If the wreck was due to malice. Shipwrecks (Arts. Where the vessel has gone through a hurricane or when the captain believes that the cargo has suffered damages or averages (Art. 841)  The rules on collision or allision. in case of pier-side unloading. Phil. Fortuitous event/force majeure  No liability. (Chief of Staff vs. (Notes and Cases on the Law on Transportation and Public Utilities. vs. 835).  Excuses for not filing protest: 1) where the interested person is not on board the vessel. if the collision took place abroad. SPECIAL CONCEPTS ARRASTRE SERVICE  A contract for the unloading of goods from a vessel. (Art. CA)  Even if the cause of action against the common carrier is based on quasi-delict. Of Customs. 830)  The doctrine of res ipsa loquitur applies in case a moving vessel strikes a stationary object.5. (Commercial Law Review. the owner of the vessel may demand indemnity from said captain. 624). 3. seals the container and delivers it to the carrier for transportation. or running against an object in sea or on the coast.  Applicability: Overseas trade only. (Art. C. CA. 826839 of the Code of Commerce. C. discharging functions which are heavily invested with public interest. unless there is stipulation to the contrary. 835) SHIPWRECK  It is the loss of the vessel at sea as a consequence of its grounding.) CONTAINERIZATION/ “SAID-TOCONTAIN”/ “SHIPPER’S LOAD AND COUNT” SYSTEM  System whereby the shipper loads his cargoes in a specially designed container. (Art. he cannot unload and deliver the cargo by himself. The carrier does not participate in the counting of the merchandise for loading into the container. can equally apply to shipwrecks. Prudential Guarantee)  The matter of quantity. & Hernando. It occurs when the vessel sustains injuries due to a marine peril rendering her incapable of navigation. Of Customs. Razon. description and conditions of the cargo inside the container is the sole responsibility of the shipper.P. Each bears its own loss. need not be protested. 4. and the sealing of the container. (Art. the consignee must prove that the damage was due to the negligence and while the goods are in the custody of the arrastre operator. such as a bridge post. (Anglo-Fil Trading Corp. Luzon Stevedoring vs. Comm. or to a barge. (US Lines vs.  Before whom made: competent authority at the point of collision or at the first port of arrival.  It is a written statement made under oath by the captain of a vessel after the occurrence of an accident or disaster in which the vessel or cargo is lost or damaged.)  Significance: When a person brings in cargo from abroad. (Commercial Law Review.) STEVEDORING SERVICE  The carriage of goods from the warehouse or pier to the holds of the vessel. 612(8)). 2. with respect to the circumstances attending such occurrence. Manila Railroad) 2. T.)  Nature of business: It is a public utility. as may be pertinent. 612(15). Insa Abdulhaman)  Doctrine of Last Clear Chance and Rule on Contributory Negligence cannot be applied in collision cases because of Art. It is not a civil tort governed by the Civil Code but a maritime one governed by Arts.827 of the Code of Commerce. (Far Eastern Shipping v. negligence or lack of skill of the captain. (US Lines v. Reyma Brokerage v. 843). Similar to a warehouseman (Lua Kian v. E.) MARITIME PROTEST  Condition precedent or prerequisite to recovery of damages arising from collisions and other maritime accidents. Prince Line) 3. 2004 ed. 2004 ed. Villanueva. (Manila Steamship vs. CIR)  As understood in the port business. R. Solidary liability with the common carrier Note: In order that the arrastre operator may be held liable. Inc. (Hartford Fire Insurance v. Villanueva. dock. 836)  Cases applicable: 1. and 2) on collision time. or navigational aid. The unloading must be done by the arrastre operator. Arrival under stress (Art. Collision (Art.  Liability: 1.  Who makes: Captain  When made: within 24 hours from the time the collision took place. (Ibid. the actual loading. if in the Philippines and to the Philippine consul. which will then deliver the cargo to the importer. in case of unloading at sea. the defense of due diligence in the selection and supervision of employees is unavailing in case of a maritime tort resulting in collision. Comm. Home Assurance) Note: In order to attribute to the carrier any . 2004 ed. Similar to a common carrier (Northern Motors v. the term consists of the handling of cargo from the hold of the ship to the dock. ICTSI v. Aquino. Lazaro)  The loading on the ship of outgoing cargo is also part of stevedoring work.

damage 3. and 3. vs. Within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or transshipment. period Amount Notice Prescriptive of of from delay or late delivery (Mitsui O. (Eastern Shipping vs.148 SCRA 118)  The one-year period shall run from delivery to the arrastre operator and not to the consignee. baggage or goods. The express agreement of the parties (Universal Shipping Lines. NOTICE OF DAMAGE (SEC. and 3. Thus. inspection of the goods should be done at pier-side.. Am. Patent damage: shipper should file a claim with the carrier immediately upon delivery b. (Bankers vs.. Merchants Ins. CA) IV. (Dole Phils. Water/maritime transportation. Co. CA) III. The filing of an action in court until it is dismissed.damage to the shipment that may be found. 4(5). vs. vs. Inc.A. Lines Ltd.  It can be applied in domestic sea transportation if agreed upon by the parties. Nordeutscher Lloyd. vs. In such instance the. 3(6))  Rules: a. even though that power is not a party to the Convention. Carriage of passengers. NCC applies to domestic/inter-island/coastwise trade. vs. or b. if there is an agreed stopping place within a territory subject to the sovereignty. (Sec. vs. 3[6])  “Loss or Damage” as applied to the COGSA contemplates a situation where no delivery at all was made by the shipper of the goods because the same had perished. Note: The filing of a notice of claim is not a condition precedent.)  Transportation to be performed by several successive air carriers shall be deemed to be one undivided transportation. IAC. 65) APPLICABILITY  The transportation must be: 1. The date when the goods should have been delivered (nondelivery).  The one-year prescriptive period is suspended by: 1. (Clause paramount or paramount clause) IMPORTANT FEATURES: 1. Jur. WARSAW CONVENTION OF 1929 (WC) PURPOSE: To protect the emerging air transportation industry and to secure the uniformity of recovery by the passengers. mandate or authority of another power. Maritime Co. No. gone out of commerce. overseas/interna tional/foreign (from foreign port to Philippine port). Within the territory of a single High Contracting Party. if it has been regarded by the parties as a single operation. 6 SCRA 180)  The one-year period shall run from delivery of the last package and is not suspended by extrajudicial demand.S. This is deemed incorporated in the bill of lading even if not mentioned in it. International transportation. American Steamship Agencies Inc. CARRIAGE OF GOODS BY SEA ACT/COGSA (C. Manila Railroad Co. Alejandro. for the carriage of goods. Mayer Steel Pipe Corp. 2. Air transportation. PRESCRIPTIVE PERIOD  Action for loss or damage to the cargo should be brought within one year after: a. APPLICABILITY  The transportation must be: 1. However. IAC. (Fil. 2. (Ang vs. the liability limit is set at $500 per package or customary freight unit unless the nature and value of such goods is declared by the shipper.  International transportation any transportation in which the place of departure and the place of destination are situated either: 1. Inc.Inc. Delivery of the goods (delivered but damaged goods). 188 SCRA 170) 2. carrier’s liability 2. vs. Civil Code rules on prescription shall apply. whether it has been agreed upon under the form of a single contract or of a series of AMOUNT OF CARRIER’S LIABILITY  Under the Sec. (“round trip”.. 150 SCRA 463)  Note that Art. 1749. it is inapplicable in case of misdelivery or conversion. (Union Carbide Phils.  The WC shall also apply to fortuitous transportation by aircraft performed by an air transportation enterprise.) and damage arising . or disappeared in such a way that their existence is unknown or they cannot be recovered. it does not apply to the claim against the insurer for the insurance proceeds.SCRA 359)  The insurer exercising its right of subrogation is bound by the one-year prescriptive period. CA).K. Latent damage: shipper should file a claim with the carrier within three days from delivery. (Stevens & Co. or 2.

if it took place during the “transportation by air”. 17) 2. 2. or as not restrictive of the carrier’s liability. in any place whatsoever. IAC. 29) . Jurisdiction 5.  In KLM Royal v. in case of a landing outside an airport. Air way bill 2. In case of delay. 192 SCRA 9) LIMIT OF LIABILITY (Art. (Art. date of arrival at the destination b. or misconduct of its employees. (Art. loss or damage to any baggage or goods. baggage or goods. the action is barred except in case of fraud on the part of the carrier. 3 days from receipt of baggage b. Baggage check c. the WC does not operate as an exclusive enumeration of the instances of an absolute limit of the extent of liability. 18) and  Transportation by air – The period during which the baggage or goods are in the charge of the carrier. 25)  Thus.3) WHEN INAPPLICABLE 1. If the requirements under the Convention are not complied with. it could exculpate itself completely (Art. date of expected arrival c. IAC) LIABILITY OF CARRIER FOR DAMAGES 1.  An agreement relieving the carrier from liability or fixing a lower limit is null and void. for the purpose of loading. delivery. and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty. It does not regulate or exclude liability for other breaches of contract by the carrier. IAC) 1. 19) Note: The Hague Protocol amended the WC by removing the provision that if the airline took all necessary steps to avoid the damage. When public policy is contradicted. Notice of claim  A written complaint must me made within: a. Passengers GENERAL RULE: $100. or. 3. It does not preclude the application of the Civil Code and other pertinent local laws. 20(1)). 1 Sec. date on which the transportation stopped. the WC was applied as regards the limitation on the carrier’s liability. Prescriptive period  Action must be filed within 2 years from: a. (Art. (Art. as amended by Guatemala Protocol. the WC has invariably been held inapplicable. IMPORTANT CONCEPTS: 1. 7 days from receipt of goods c. Passenger ticket b. Transportation documents a. 3. 22. Death or injury of a passenger if the accident causing it took place on board the aircraft or in the course of its operations of embarking or disembarking. Loss or damage to baggage or goods c. Destruction. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value. suzerainty. Goods to be shipped GENERAL RULE: $20 per kilogram EXCEPTION: In case of special declaration of value and payment of a supplementary sum by consignor. CA)  In PanAm v. It includes any transportation by land or water outside an airport if such takes place in the performance of a contract for transportation by air. Delay 3. Tuller. Delay in the transportation of passengers. (Art. (Alitalia vs. where there was satisfactory evidence of malice or bad faith attributable to its officers and employees. there being a simple loss of baggage without any improper conduct on the part of the officials or employees of the airline or other special injury sustained by the passenger.000 per passenger EXCEPTION: Agreement to a higher limit ACTION FOR DAMAGES 1. Liability of the carrier for damages a. 23)  Carrier is not entitled to the foregoing limit if the damage is caused by willful misconduct or default on its part. Alitalia vs. 14 days from receipt of baggage/goods  The complaint is a condition precedent. 1971. mandate. (Alitalia vs. Checked-in baggage GENERAL RULE: $20 per kilogram EXCEPTION: In case of special declaration of value and payment of a supplementary sum by consignor. (Alitalia vs. (Art. IAC. Successive carrier agreement 4. whether in an airport or on board an aircraft. Without the complaint. Hand-carried baggage  $1000/passenger 4. (Art. or transshipment. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value. Combined transportation agreement PASSENGER TICKET Passenger BAGGAGE CHECK Checked-in baggage AIR WAYBILL Goods to be shipped 2. or for some particular or exceptional type of damage. (Art. or authority of the same High Contracting Party. 26) 2.contracts. Death or injury to passengers b.

3 of the Salvage Law. the property is not derelict. Passenger or consignee can file an action against the last carrier and the carrier in which the damage occurred. Floatsam or Flotsam – goods which float upon the sea when cast overboard.S. Chiok) JURISDICTION  At the option of the plaintiff.P. although performed by different carriers under a series of airline tickets constitutes a single operation.  These carriers are jointly and severally liable. 2. Crew of the vessel saved.  Subjects of Salvage: 1. so that they may be found again by the owners (p. & Hernando. 2. as in cases of shipwreck. 2616) SALVAGE  Two concepts: 1. (Santos III vs. Court where it has a place of business through which the contract has been made.J. or of procuring assistance.  If it is clear that the intention to return is slight. c. If those in charge left with the intention of returning. and there sink and remain under water.)  In United Airlines vs. the salvage which was done thereafter is considered valid.  The intention of those in charge must be ascertained. Services rendered voluntarily (neither an existing duty nor out of a pre-existing contract). T. but if they quitted the property with the intention of finally leaving it. (China Airlines vs. 2.  The forum of action provided in Art. or such property recovered from actual peril or loss. Carriage of passengers GENERAL RULE: Action is filed only against the carrier in which the accident or delay occurred. The obligation of the former remained and did not cease even when the breach occurred not on its own flight but on that of another airline which had undertaken to carry the passengers to one of their destinations.  Derelict – a ship or her cargo which is abandoned and deserted at sea by those who are in charge of it. preserving the goods or the ship which the owner or those entrusted with the care of them have either abandoned in distress at sea. 3. R. without any hope of recovering it. by his own labor. Uy the two-year prescriptive period was not applied where the airline employed delaying tactics. Court of domicile of the carrier. Services one person renders to the owner of a ship or goods. total or partial.173.). (Notes and Cases on the Law on Transportation and Public Utilities. b. 28(1)) NOTE: It is the passenger’s “ultimate destination” not “an agreed stopping place” that determines the country where suit is to be filed. (American Airlines vs. 2. it is derelict and a change of their intention and an attempt to return will not change its nature (Erlanger & Galinger vs. Aquino. Court of its principal place of business.venue. 2A C. Ltd. Person who commenced Salvage in spite of opposition of the Captain or his representative. Members of the International Air Transportation Association (IATA) are under a general pool partnership agreement wherein they act as agent of each other in the issuance of tickets to contracted passengers to boost ticket sales worldwide and at the same time provide passengers easy access to airlines which are otherwise inaccessible in some parts of the world. Ship itself. Object must have been exposed to marine peril (not perils of the ship). Carriage of baggage or goods a. RULE IN CASE OF VARIOUS SUCCESSIVE CARRIERS 1. Judge Diaz). Services are successful. CA)  Under a general pool partnership agreement. 4.  Requisites: 1. the action for damages may be filed in the: a. 4. In accordance with Sec. 3. Ligan or Lagan – goods cast into the sea tied to a buoy. 28(1) is a matter of jurisdiction rather than of V. Valid object of salvage. a person who fails to deliver a salvaged vessel or cargo to the Collector of Customs. Northwest. the ticket-issuing airline is the principal in a contract of carriage while the endorsee-airline is the agent. Jetsam – goods which are cast into the sea.  Persons who have no right to a reward for salvage: 1. or are unable to protect or secure. Swedish East Asiatic Co. 616) . derelict or recapture. 2004 ed. 3. Court of the place of destination. (Art. 2. p. or without any intention of returning to it. (Art. SALVAGE LAW (Act No. Passenger or consignor can file an action against the first carrier and the carrier in which the damage occurred b. Compensation allowed to persons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from impending sea peril. EXCEPTION: Agreement or contract whereby the first carrier assumed liability for the whole journey. or d. 30)  A contract of international carriage by air.

CA 146)  A casual or incidental service devoid of public character and interest is not brought within the category. sustained service for the public at the least possible cost. except for rates fixing. any common carrier or public utility. To protect and secure investments in public services. and 7. and MIA. To secure adequate. 9) 2. except for the fixing of maximum rates for fare and freight. otherwise no payment Must be done with the consent of the captain/crewmen Vessel must be involved in an accident Fees distributed among crewmen TOWAGE Governed by Civil Code on contract of lease Success required is not PURPOSES: 1. CAB. No. PSC) NOTE: The Public Service Commission created under the Public Service Law has already been abolished under P. for a compensation. manages or controls in the Philippines for hire or compensation. after deducting expenses and the salvage claim. PUBLIC SERVICE  A person who owns. ATO. being a duty of humanity and not for reward. 5. AUTHORITY TO OPERATE PUBLIC SERVICES GENERAL RULE: No public service shall operate without having been issued a certificate of public convenience or a certificate of public convenience and necessity. 6. operates. 2. If a vessel is the salvor. if the latter does not claim it within 3 years. To protect the public against unreasonable charges and poor. Airships. No. (Sec. 146) . VI. 3. It has been replaced by the following government agencies: LTO. with general or limited clientele. 1 and other issuances. whether loaded or not with merchandise. 13)  Taking passengers from a sinking ship. usually motorized. (Luzon Stevedoring vs. Radio companies. (Secs. It is a contract for services rather than a contract of carriage. occasional or accidental. and done for general business purposes. whether such person or company has held himself or itself out as ready to serve the public or a portion of the public generally. who shall divide it equitably. pulls another. The question depends on such factors as the extent of services. (Sec.CONTRACT OF TOWAGE  A contract whereby one vessel. Only the consent of the tugboat owner is needed Vessel need not be involved in an accident Fees belong to the tugboat owner RULES ON SALVAGE REWARD 1. and the other half to the government. (Sec. Public services owned or operated by the government. PUBLIC SERVICE ACT (C. 2. NTC. 13b. inefficient service. communication and similar public services. BOE. The reward should constitute a sufficient compensation for the outlay and effort of the salvors and should be liberal enough to offer an inducement to others to render services in similar emergencies in the future. the reward shall be distributed as follows: a. 2 5% to the officers and crew in proportion to their salaries. 50% of the said proceeds shall go to the salvors. 1112) 4. Public markets. is not a salvage service. 3. Warehouses. The reward is fixed by the RTC judge in the absence of agreement or where the latter is excessive. 5 0% to the shipowner.A. 2616) Requires success. without rendering any service in rescuing the vessel. Animal drawn vehicles and bancas moved by oar or sail. To prevent ruinous competition. ice plants. LTFRB. from one place to another. except as to rates fixing. SALVAGE Governed by special law (Act No. 4. whether permanent.D. shall go to the owner. NEA. If sold (no claim being made within 3 months from publication). b. EXCEPTIONS: 1. the proceeds. and c. power and water supplies. 3. Ice plants. 2 5% to the captain. NWRC. 4. ERB.

Issue free tickets. adequate. UNLAWFUL ACTS OF PUBLIC UTILITY COMPANIES 1. Applicant must be a citizen of the Philippines or a corporation or entity 60% of the capital of which is owned by such citizens.. alteration of the certificate.g. 3. mortgage or lease property. Raymundo vs. 5. 164 SCRA 36) 2. 3. Engagement in public service business without first securing the proper certificate. (Cogeo-Cubao Operators and Drivers Assn. prior to the hearing. common carriers.CERTIFICATE OF PUBLIC CONVENIENCE (CPC) CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY (CPCN) An authorization issued by the appropriate government agency for the operation of public service for which a prior franchise is required by law. (Secs. Establish and operate new units. Compelling compliance with the laws and regulations. alienate. Sell. Medina. (Soriano v. . Capitalize any franchise in excess of the amount actually paid to the Government. and charges. Grant of special permits to make extra or special trips in territories specified in the certificate. 30 SCRA 408)  It is a “property” and has a considerable value and can be the subject of sale or attachment. or modification of CPC or CPCN. certificates or franchise. e. telephone and other services. and is a mere license or a privilege. POWERS REQUIRING PRIOR NOTICE AND HEARING 1. except when it is necessary to avoid serious and irreparable damage or inconvenience to the public or private interest. 2.) REQUREMENTS FOR GRANTING CPC OR CPCN 1. Applicant must have sufficient financial capability to undertake the proposed services and meeting the responsibilities incident to its operation. 207 SCRA 343. 7. Applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest on a proper and suitable manner. Nor does it confer upon the holder any proprietary right or interest or franchise in the public highways. 6. Suspension of CPC or CPCN. 3. either municipal or legislative. New and additional burdens. 2. Revocation. 5. 4. An authorization issued by the appropriate government agency for the operation of public services for which no franchise. 18 and 19) ACTS REQUIRING PRIOR APPROVAL 1. 2. Investigation any matter concerning tolls. Issuance of orders requiring establishment or maintenance of extension of facilities. 4. Fixing of rates. Examination and test of measuring appliances. confers no property right. 5. 3. Revocation of this certificate deprives him of no vested right. 8. a suspension not more than 30 days may be ordered. Issue any stock or stock certificates representing an increase of capital. Refusing or neglecting to carry public mail upon request. POWERS EXERCISABLE WITHOUT PRIOR NOTICE AND HEARING 1. or even revocation or annulment thereof is reserved to the State. 4. 6. 4. corporation or entity as determined by the proper authority. Luneta Motor Co. CA. public service. Valuation of properties of public utilities. Committing any act of unreasonable and unjust preferential treatment to any particular person. 2. 7. is required by law. (Luque vs. Establishment of rules to secure accuracy of all meters and all measuring appliances.  A CPC or a CPCN constitutes neither a franchise nor a contract. Setting up of standards and classifications. in which case. Requiring public services to pay expenses of investigation. Villegas. The holder of said certificate does not acquire a property right in the route covered thereby. Issuance of CPC or CPCN. 4. Providing or maintaining unsafe. vs. 6. Establish and maintain individual or joint rates.g. Applicant must prove public necessity. Requiring operators to furnish safe. e. Uniform accounting system and furnishing of annual reports. and proper service. improper or inadequate service as determined by the proper authority. 3.

as a practical matter. 4. One which is fair to the public for the service rendered. (Benedicto vs. especially when given the opportunity. for a fee or percentage of such earnings. PRIOR OPERATOR/OLD OPERATOR RULE  The rule allowing an existing franchised operator to invoke a preferential right within the authorized territory as long as he renders satisfactory and economical service. vs. The approval is necessary only to protect public interest. The registered owner cannot recover from the actual owner and the latter cannot obtain transfer of the vehicle to himself. and 2. both being in pari delicto. 154 SCRA 388) 2. The transfer. or to one who possesses no property with which to respond financially for the damage or injury done. after the hearing. that the circumstances between the two applicants are more or less equal.  The policy is not to issue a certificate to a second operator to cover the same field and in competition with a first operator who is rendering sufficient.  Where the operator either fails or neglects to make the improvement or effect the increase in services.  A rate is just and reasonable if it conforms to the following requirements: 1. 146. It is void and inexistent under Art. (Gelisan vs. 1409. Jepte 102 Phil 103). If it turns out. etc. et al. Its approval is not a condition precedent to the validity of the contract.  The public has the right to assume that the registered owner is the actual or lawful owner thereof. The registered owner is primarily liable for all the consequences flowing from the operations of the carrier. The prior operator must first be given an opportunity to improve its service. sale. RATE-FIXING POWER  The rate to be fixed must be just. if inadequate or deficient. 3. 20(g) of C. Civil Code.  Purpose: To prevent ruinous and wasteful competition in order that the interests of the public would be conserved and preserved. No. the sale. founded upon conditions which are fair and reasonable to both the owner and the public. adequate and satisfactory service. PRIOR APPLICANT RULE  Presupposes a situation when two interested persons apply for a certificate to operate a public utility in the same community over which no person has as yet granted any certificate. IAC) . KABIT SYSTEM  A system whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate under such license.  Effects: 1. (Teja Marketing vs. even though the same had been transferred to a third person. (Erezo. 187 SCRA 547) The thrust of the law in enjoining the kabit system is to identify the person upon whom responsibility may be fixed with the end in view of protecting the riding public (Lim vs. may be negotiated and completed before the approval by the proper authority. by collusion with others or otherwise.  It subordinates the prior applicant rule which gives the first applicant priority only if things and circumstances are equal. for the public to enforce their rights of action that they may have for injuries inflicted by the vehicle if they should be required to prove who the actual owner is. One which yields to the carrier a fair return upon the value of the property employed in performing the service. then the applicant who applied ahead of the other. Alday. lease or assignment of the privilege granted is valid between the contracting parties but not upon the public or third persons.A. will be granted the certificate. Under Sec.  The registered owner is not allowed to escape responsibility by proving that a third person is the actual and real owner Reason: It would be easy for him. new operators should be given the chance to give the services needed by the public. CA 373 SCRA 394). IAC. It would be very difficult and often impossible. REGISTERED OWNER RULE  The registered owner of a certificate of public convenience is liable to the public for the injuries or damages suffered by third persons caused by the operation of said vehicle. to transfer the responsibility to an indefinite person.

CA) . (Zamboanga Transportation Co. both the registered owner and the actual owner are jointly and severally liable with the driver. vs. For the better protection of the public.5.

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