Commercial Law Review

Transportation Law Claudine Mayor TRANSPORTATION LAW PRELIMINARY CONSIDERATIONS: A. Governing Laws 1. New Civil Code – Primary law 2. Warsaw Convention – for international transportation by air 3. Code of Commerce – governs suppletorily; it governs maritime transaction 4. Carriage of Goods by Sea Act – for transportation by sea; governs suppletorily 5. Salvage Law 6. Public Service Act 7. Article XII Sec 11 on operation of public convenience of the 1987 Philippine Constitution B. Concept of Public Utility & public service Sec. 13 (b) of the Public Service Act provides that: “The term 'public service' includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railway, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, That a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act.” Public utilities are privately owned and operated business whose services are essential to the general public. Case: National Development Company v CA C. Constitutional limitations on operation of public utilities Sec. 11 of Article XII of the 1987 Constitution states that: “No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.” *The corporation must be a domestic corporation and that 60% of the capital must be owned by Filipino citizens. Sec. 18 of Article XII of the 1987 Constitution provides that: “The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government.”

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Commercial Law Review
Transportation Law Claudine Mayor Q: What are the bases/reasons for regulation of public utilities? A: Basis: Police Power Justification: Common good D. Regulatory agencies 1. Land Transportation Franchising Regulatory Board (LTFRB) – land transportation 2. Land Transportation Office – issue license to drivers 3. Maritime Industry Authority (MARINA) – water transportation 4. National Telecommunications Commission – communication utilities and services, radio communications systems, wire or wireless telephone and telegraph systems, radio and television broadcasting systems and other similar public utilities 5. Energy Regulatory Board – electric or power companies 6. National Water Resources Council – water resources 7. Civil Aeronautics Board – air transportation Q: What conditions must concur in the grant of certificate of public convenience and necessity? A: 1. The grantee must be a citizen of the Philippines or a corporation or entity 60% of which is owned by such citizens; 2. The grantee must have sufficient financial capability to undertake the service; and 3. The service will promote public interest and convenience in a proper and suitable manner. *In Tatad v Garcia, the SC held that the controlling factor is the citizenship of the person operating a common carrier. Guiding Principles: 1. Prior or Old Operator Rule – the first licensee will be protected in his investment and will not be subjected to ruinous competition. *No certificate of public convenience and necessity will be issued to other operator as long as the prior operator still in operation and can satisfy the public and that it still has the capacity to do so. 2. Protection Investment Rule – protects from unfair competition 3. Prior Applicant Rule – protects the first applicant. Principle: all things being equal *Public interest is the first and paramount consideration. E. Concept of franchise and certificate of public convenience Franchise is a grant or privilege from the sovereign power. Certificate of Public Convenience is a form of regulation through an administrative agency. Q: Is a legislative franchise necessary before a public utility can be allowed to secure a certificate of public convenience? A: General Rule: NO. Exception: If a pertinent law requires such legislative franchise. Factors: 1. Public interest 2. Public convenience 3. Public necessity GENERAL CONCEPTS: A. Contract of transportation in general Transportation is 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 commission. *Importance: For liability purposes B. Perfection There is a perfected contract when there was a meeting of the minds as to the subject matter and consideration. C. Common Carrier 1. Statutory definition Article 1732 of the New Civil Code provides that: “Common carriers are 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.” - one that holds itself out as ready to engage in the transportation of goods 2

Commercial Law Review
Transportation Law Claudine Mayor for hire as a public employment and not as a casual occupation. Implications being a common carrier: a. extraordinary diligence must be exercised b. in case of damage, presumption of negligence on the part of the common carrier *It is the activity of the carrier that is controlling. Cases: A.F. Sanchez Brokerage, Inc v CA; Asia Lighterage v CA; De Guzman v CA *The fact that there is no license at the time of the incident happen is of no moment for liability purposes. 2. Distinguished from private carrier Common Private Carrier Carrier As to holds himself Contracts availability: out for all with people particular indiscriminate individuals ly or groups only As to Extraordinary Ordinary required diligence is diligence is diligence: required required As to Subject to Not subject regulation: state to state regulation regulation Stipulation Parties may Parties may limiting not agree on limit the liability: limiting the carrier’s carrier’s liability, liability except provided it when is not provided by contrary to law law, morals or good customs Exempting Prove Caso circumstanc extraordinary fortuito, e: diligence and Article Article 1734 1174 NCC NCC Presumptio There is a No n of presumption presumptio Negligence: of fault or n of fault or negligence negligence Governing Law on Law on law: common obligations carriers and contracts

3. Distinguished from towage, arrastre and stevedoring Distinctions: Towage Arrastre Stevedorin g The functions The One vessel is of an arrastre function of hired to operator has stevedores bring nothing to do involves another with the trade the loading vessel to and business and another of navigation, unloading place; refers nor to the use of to a service or operation coastwise rendered to of vessels. He vessels a vessel by is no different calling at towing for from that of a the port. the mere depositary or purpose of warehousema expediting n. her voyage without reference to any circumstanc es of danger. *The SC held that the following services are not considered a common carrier: 1) purely arrastre services; *comparable to that as warehouseman and depositor 2) purely stevedoring services; and 3) purely towage services. *In Crisostomo v CA, the SC held that the respondent being a travel agency is not a common carrier because the services offered is not one that carries passenger from one place to another. 4. Tests to determine common carrier Tests: a. He must engaged in the business of carrying goods for others as a public employment and must hold himself out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation; b. He must undertake to carry goods of the kind to which his business is confined; c. He must undertake to carry by the method by which his business is

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Commercial Law Review
Transportation Law Claudine Mayor conducted and over his established roads; d. The transportation must be for hire Case: First Philippine Industrial Corporation v CA *Under Sec. 22 of the Electric Power Distribution Reform Act, the company like MERALCO distributing electricity is a common carrier. 5. Parties to the contract of carriage a. Carriage of passengers: 1. Common carrier 2. Passengers b. Carriage of goods: 1. Shipper 2. Carrier D. Registered owner rule and Kabit system General Rule: Registered owner rule is applicable in this jurisdiction. Registered owner rule states that the person who is the registered owner of a vehicle is liable for any damages caused by the negligent operation of the vehicle although the same was already sold or conveyed to another person at the time of the accident. The registered owner is liable to the injured party subject to his right of recourse against the transferee or the buyer. Purpose of this rule: easy identification of the owner to be sued for liability. Recourse: Registered owner may bring the case to the court to sue the buyer or operator of the vehicle at fault. Exception: in case of stolen vehicle registered owner is not liable. *In the case of Duavit v CA, the SC held that the registered owner is not liable if the vehicle was taken from his garage without his knowledge or consent. To hold the registered owner liable would be absurd as it would be holding liable the owner of a stolen vehicle for an accident caused by the person who stole such vehicle. Kabit System is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings. *Kabit system is invariably recognized as being contrary to public policy and therefore void and inexistent under Article 1409 of the New Civil Code. *If the registered owner and the buyer entered into this transaction they are In pari delicto thus, in case something happen the court will not aid them. The court will leave them as they were. *This arrangement is a circumvention of the requirement for license. OBLIGATIONS OF THE COMMON CARRIER IN A CONTRACT OF CARRIAGE OF GOODS: A. Vigilance over the goods 1. Duty to exercise extraordinary diligence Article 1733 of the New Civil Code states that: “Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.” Reason: The nature of the business is imbued with public interest and public policy; because of the exigencies of the business. The public has no choice but to trust on the skills of the employees of the common carrier. The goods and the life of the passenger are placed in the hands of the common carrier. Article 363 of the Code of Commerce provides that: “Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be obliged to deliver the goods shipped in the same condition in which, according to the bill of lading, they were found at the time they were received, without any damage or impairment, and failing to do so, to pay the value which those not delivered may have at the point and at the time at which their 4

and 5 of the preceding article. unless they prove that they observed extraordinary diligence as required in Article 1733.” Presumption of negligence Article 1735 of the New Civil Code provides that: “In all cases other than those mentioned in Nos. destruction or deterioration of the goods. (3) Act of omission of the shipper or owner of the goods.” 3. in consequence of the damage. 2. this segregation to be made by distinct and separate pieces and without dividing a single object. earthquake. 1. destroyed or deteriorated.” *The enumeration is exclusive or a closed list. whether international or civil. the obligation of the carrier shall be reduced to the payment of the amount which. or other natural disaster or calamity. lightning.” Article 1738 of the New Civil Code provides that: “The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination.Commercial Law Review Transportation Law Claudine Mayor delivery should have been made. by the carrier to the consignee. storm. separating those parcels which appear sound. The same rule shall be applied to merchandise in bales or packages. the goods are rendered useless for sale and consumption for the purposes for which they are properly destined. General Rule: Common carriers are responsible for the loss. or deterioration of the goods. unless the shipper or owner has made use of the right of stoppage in transitu.” 2. common carriers are presumed to have been at fault or to have acted negligently. and received by the carrier for transportation until the same are delivered. (4) The character of the goods or defects in the packing or in the containers. and he may have them in the hands of the carrier. until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. unless the consignee proves that impossibility of conveniently making use of them in this form.” Article 1737 of the New Civil Code states that: “The common carrier's duty to observe extraordinary diligence over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit. 4.” Article 364 of the Code of Commerce provides that: “If the effect of the damage referred to in Article 361 is merely a diminution in the value of the gods. without prejudice to the provisions of Article 1738. or to the person who has a right to receive them. the consignee shall not be bound to receive them.” Article 365 of the Code of Commerce provides that: “If. demanding of the latter their value at the current price on that day. 5 . If among the damaged goods there should be some pieces in good condition and without any defect. Defenses of common carriers Article 1734 of the New Civil Code provides that: “Common carriers are responsible for the loss. constitutes such difference in value. (2) Act of the public enemy in war. If those not delivered form part of the goods transported. if the goods are lost. the consignee may refuse to receive the latter. in the judgment of experts. (5) Order or act of competent public authority. 3. the foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those which are sound. when he proves that he cannot make use of them independently of the others. destruction. Duration of liability Article 1736 of the New Civil Code states that: “The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of. unless the same is due to any of the following causes only: (1) Flood. actually or constructively.

or deterioration of the goods. Act of the public enemy in war whether international or civil. storm or other natural disaster in order that the common carrier may be exempted from liability for the loss. *In Compania Maritima v CA. However. Absence of negligence on the part of the common carrier 3. during and after the occurrence of the disaster 4. *mechanical defect is not within the ambit of the natural disaster. In this case the common carrier is not totally absolved from its liability. Act of omission of the shipper or owner of the goods. during and after the occurrence of flood. Public enemy Article 1739 of the New Civil Code states that: “In order that the common carrier may be exempted from responsibility. storm. d. The character of the goods or defects in the packaging or in the containers. Fortuitous event Article 1739 of the New Civil Code provides that: “In order that the common carrier may be exempted from responsibility. Improper packing Article 1742 of the New Civil Code states that: “Even if the loss.Commercial Law Review Transportation Law Claudine Mayor Exceptions: 1.” *Public enemy includes pirates however it does not include robbery and thief. or deterioration of the goods. Exception: If it they are cast of and took allegiance a hostile manner territory *Existence of actual war is imperative. lightning or other natural disaster or calamity. The common carrier must exercise due diligence to prevent loss before. the SC held that the common carrier is also at fault. the natural disaster must have been the proximate and only cause of the loss. 2. a natural disaster shall not free such carrier from responsibility. *Calamity includes thunderstorm. the common carrier should have exercise extraordinary diligence by not relying solely on the statement of the shipper. storm or other natural disaster in order that the common carrier may be exempted from liability for the loss. it is within the control of the common carrier. c. the common carrier must exercise due diligence to prevent or minimize loss before. Act of omission on the part of the shipper or owner of the goods *There must be no fault or contributory negligence on the part of the carrier. Order or act of the competent public authority Article 1740 of the New Civil Code states that: “If the common carrier negligently incurs in delay in transporting the goods. However. No. it should have conducted its own weighing. earthquake. destruction. Flood.” *Fire is not within the ambit of natural disaster or calamity. Requisites: 1. Proximate cause is the natural calamity 2.” a. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in Article 1734. and 5. *Pirates are enemies of all civilized nation. 2. 2. the common carrier must exercise due diligence to prevent or minimize loss before. 4. 6 . General Rule: rebels and insurreccion is not included. No. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in Article 1734. destruction. during and after the occurrence of flood. the natural disaster must have been the proximate and only cause of the loss. 3. Free from unreasonable delay by the common carrier or unreasonable deviation b.

” Article 1750 of the New Civil Code provides that: “A contract fixing the sum that may be recovered by the owner or shipper for the loss. to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable. or a part thereof. Case: Ganzon v CA 4. just and not contrary to public policy. is binding. signed by the shipper or owner. the common carrier is not responsible. or deterioration of the goods should be caused by the character of the goods. and has been fairly and freely agreed upon. destruction or deterioration of the goods. just and not contrary to public policy. destruction. Requisites Article 1744 of the New Civil Code states that: “A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss. signed by the shipper or owner. unless the shipper or owner declares a greater value. Stipulation limiting liability of carrier Article 1744 of the New Civil Code states that: “A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss.” Article 1751 of the New Civil Code provides that: “The fact that the common carrier has no competitor along the line or route.” 5. which however.” Article 1749 of the New Civil Code states that: “A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading.” *The important requisite is that the public authority has the power to issue an order. if the shipper insists. destruction. or deterioration of the goods to a degree less than extraordinary diligence shall be valid. the latter shall be liable in damages. Article 1748 of the New Civil Code provides that: “An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid. destruction. the proximate cause thereof being the negligence of the common carrier. or deterioration of the goods is valid. the carrier may refuse to accept the goods for carriage. and (3) Reasonable. just and in consonance with public policy. Order of public authority Article 1743 of the New Civil Code states that: “If through the order of public authority the goods are seized or destroyed. (2) Supported by a valuable consideration other than the service rendered by the common carrier. Contributory negligence of the shipper Article 1741 of the New Civil Code states that: “If the shipper or owner merely contributed to the loss. shall be equitably reduced.” *If the defect is apparent. provided said public authority had power to issue the order. the remedy is to make a protestation. Consideration: Reduction of fare *The stipulation must be in writing for the purpose of preventing abuse from the carrier. or the faulty nature of the packing or of the containers. e. the common carrier must exercise due diligence to forestall or lessen the loss. make a clean bill of lading. if it is reasonable and just under the circumstances. provided it be: (1) In writing. (2) Supported by a valuable consideration other than the service rendered by the common carrier. and (3) Reasonable.” a.Commercial Law Review Transportation Law Claudine Mayor destruction. provided it be: (1) In writing.” 7 .” *This is for the benefit of the carrier. or deterioration of the goods to a degree less than extraordinary diligence shall be valid.

or deterioration of the goods. General Rule: Goods sought to be transported are dangerous objects or substances including dynamite and other explosives. d. (5) That the common carrier shall not be responsible for the acts or omission of his or its employees. *In this case. unjust and contrary to public policy: (1) That the goods are transported at the risk of the owner or shipper. Effect of delay Article 1747 of the New Civil Code states that: “If the common carrier. Exception: Carriers that are permitted or allowed to transport dangerous objects or substances for 8 . the contract limiting the common carrier's liability cannot be availed of in case of the loss.2 and 3. (6) That the common carrier's liability for acts committed by thieves. without just cause. General Rule: The degree of diligence may be lowered Exception: Not lower than that of a good father of a family.” *Even if they agreed with regard to numbers 1. violence or force. Other obligations 1. vehicle.Commercial Law Review Transportation Law Claudine Mayor *Liability can be limited but cannot be totally exempted. or deterioration of goods on account of the defective condition of the car. airplane or other equipment used in the contract of carriage. destruction. or deterioration of the goods. (7) That the common carrier is not responsible for the loss. General Rule: stipulations exempting from liability acts committed by robbers and thieves who do not act with grave threat or irresistible threats are not valid. destruction or deterioration. the stipulation only affects the outcome of the case. Invalid stipulations Article 1745 of the New Civil Code states that: “Any of the following or similar stipulations shall be considered unreasonable. destruction.” B. the presumption of negligence is still applicable. b. delays the transportation of the goods or changes the stipulated or usual route. the common carrier is disputably presumed to have been negligent in case of their loss. Rule on presumption of negligence despite stipulation Article 1752 of the New Civil Code states that: “Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods. or of a man of ordinary prudence in the vigilance over the movables transported. the stipulation is void because it is contrary to public policy because all these stipulations exempt the carrier from liability. Grounds for valid refusal to accept goods i.” *Delay will prevent the carrier from raising natural disaster as a defense and that the agreement limiting its liability cannot be raised as a defense. (3) That the common carrier need not observe any diligence in the custody of the goods. destruction. Duty to accept goods a. Exception: In case the robbers or thieves used grave threat or irresistible threats. *Stipulations reducing diligence or limiting liability must be in writing to be enforceable. ship. (4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family. is dispensed with or diminished. (2) That the common carrier will not be liable for any loss. or of robbers who do not act with grave or irresistible threat. c.

the carrier shall pay the full value of the goods as if they had been lost or mislaid. *This can be found under Code of Commerce iii. Contrabands or illegal goods. and ix.” Article 1747 of the New Civil Code provides that: “If the common carrier. referred to in the preceding articles. If the abandonment is not made. in the absence of any agreement as to the time of delivery. and. Goods like livestock will be exposed to disease. the indemnification for losses and damages by reason of the delay cannot exceed 9 . the law implies a contract that they shall be delivered at destination within a reasonable time. Consequences of delay Article 1740 of the New Civil Code provides that: “If the common carrier negligently incurs in delay in transporting the goods.” Article 370 of the Code of Commerce provides that: “If a period has been fixed for the delivery of the goods. Acceptance would result in overloading. neither the shipper nor the consignee being entitled to anything else. the contract limiting the common carrier's liability cannot be availed of in case of the loss. Article 358 of the Code of Commerce provides that: “If there is no period fixed for the delivery of the goods the carrier shall be bound to forward them in the first shipment of the same or similar goods which he may make to the point where he must deliver them. destruction.” *When a common carrier undertakes to convey goods.Commercial Law Review Transportation Law Claudine Mayor the reason that it is their function to do so or it is their operation. the carrier shall be liable for the damages which the delay may have caused. vi. ii. v. vii. *Mercantile usage or practice With Without stipulation stipulation Carrier is bound 1. When this abandonment takes place. or deterioration of the goods. advising him thereof in writing before their arrival at the point of destination. the damages caused by the delay should be for his account. Goods are unfit for transportation. Time of delivery General Rule: It is by stipulation Exception: In the absence of stipulation Code of Commerce governs. the consignee may leave the goods transported in the hands of the former. viii. Carrier is delay. Failure to tender goods on time 2. and should he not do so. iv. it must be made within such time. Goods will be exposed to untoward danger like flood. no bound to matter from forward what cause it them in the may have arisen first shipment of the same or similar goods which he may make to the point of delivery b. the carrier shall pay the indemnity stipulated in the bill of lading. Within a to fulfil the reasonable contract and is time. If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading. Goods are injurious to health. for failure to do so. liable for any 2. delays the transportation of the goods or changes the stipulated or usual route. a natural disaster shall not free such carrier from responsibility. without just cause.” Article 371 of the Code of Commerce provides that: “In case of delay through the fault of the carrier. Duty to deliver goods a. Strike. capture by enemies and the like.

Commercial Law Review Transportation Law Claudine Mayor the current price which the goods transported would have had on the day and at the place in which they should have been delivered. 4. If delay is without just cause. or against the other carriers who may have received the goods transported without reservation. However. the master must proceed with the voyage and make delivery. The shipper and the consignee shall have an immediate right of action against the carrier who executed the transportation contract. equipment and all other principal and accessory means of transportation shall be especially bound in favour of the shipper. this same rule is to be observed in all other cases in which this indemnity may be due. and to what this Code established as to the manner and form of effecting seizures and attachments against said companies. Horses. Place of Delivery Article 360 of the Code of Commerce provides that: “The shipper. the contract limiting the common carrier’s liability cannot be availed of in case of loss or deterioration of the goods. 2. vessels. When the cause is removed. the reservation made by the latter shall not relieve them from the responsibilities which they may have incurred by their own acts. may change the consignment of the goods which he delivered to the carrier. provided that at the time of ordering the change of consignee the bill of lading signed by the carrier.” Effects of delay: 1. Carrier remains duty bound to exercise extraordinary diligence.” Article 372 of the Code of Commerce states that: “The value of the goods which the carrier must pay in cases of loss or misplacement shall be determined in accordance with that declared in the bill of lading. if one has been issued. in exchange for another wherein the novation of the contract appears. the carrier may demand the judicial sale of the goods transported in an amount necessary to cover the cost of transportation and the expenses incurred. although with respect to railroads said liability shall be subordinated to the provisions of the laws of concession with respect to the property.” Article 374 of the Code of Commerce states that: “The consignees to whom the shipment was made may not defer the payment of the expenses and transportation charges of the goods they receive after the lapse of 24 hours following their delivery. the shipper not being allowed to present proof that among the goods declared therein there were articles of greater value and money. and in case of delay in this payment. 3.” 10 . reserving his right to proceed against the latter if he was not the party directly responsible for the fault which gave rise to the claim of the shipper or consignee. c.” Article 373 of the Code of Commerce states that: “The carrier who makes the delivery of the merchandise to the consignee by virtue of combined agreements or services with other carriers shall assume the obligations of those who preceded him in the conveyance. Natural disaster shall not free the carrier from responsibility. vehicles. The expenses which this change of consignment occasions shall be for the account of the shipper. without changing the place where the delivery is to be made. be returned to him. Excusable delay in carriage merely suspends and generally does not terminate the contract of carriage. The carrier who makes the delivery shall likewise acquire all the actins and rights of those who preceded him in the conveyance.

” Article 369 of the Code of Commerce provides that: “If the consignee cannot be found at the residence indicated in the bill of lading. Case: Singapore Airline v Andion Fernandez *In Japan airlines v Asuncion. and if he does not do so. the municipal judge. The SC held that Nicanor Navidad was a passenger when he died after he fell on the LRT tracks and was struck by a moving train. using the utmost diligence of very cautious persons. *Once created. To whom delivery shall be made Article 368 of the Code of Commerce provides that: “The carrier must deliver to the consignee. this deposit producing all the effects of delivery without prejudice to third parties with a better right. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. by the mere fact of being named in the bill of lading to receive them. safely alighted from the carrier’s conveyance or has had a reasonable opportunity to leave the carrier’s premises. the relationship will not ordinarily terminate until the passenger has. he shall be liable for the damages which may be caused thereby. Such person must have a bona fide intention to use the facilities of the carrier. The presence of passengers near the bus was not unreasonable and 11 . with a due regard for all the circumstances. or if he refuses to pay the transportation charges and expenses. loss or damage of goods but concentrates on moral damages. *In La Mallorca v CA. shall provides for their deposit at the disposal of the shipper. *Behavior of the employees towards to passengers is also a factor considered by the court to rule against a common carrier. *In LRTA v Navidad. the SC held the petitioner carrier liable for breach of contract. He was considered a passenger because he entered the LRT station after having purchased a token and he fell while he was on the platform waiting for a train. All persons who remain on the premises within a reasonable time after leaving the conveyance are to be deemed passengers.Commercial Law Review Transportation Law Claudine Mayor d. the goods which he may have received.” OBLIGATIONS OF THE COMMON CARRIER IN A CONTRACT OF CARRIAGE OF PASSENGERS: A. the SC held that there was a breach of duty to exercise extraordinary diligence with respect to the 4 year old child and the carrier is liable as a consequence. or if he refuses to receive the goods. Duration of liability *The carrier is bound to exercise utmost diligence with respect to passengers the moment the person who purchases the ticket or token from the carrier presents himself at the proper place and in a proper manner to be transported. injuries. it also held that the obligation of the carrier is limited to endorsing and not to influence. without any delay or obstruction. and includes reasonable time to look after his baggage and prepare for his departure.” *There are claims not really focused on death. Duty to observe utmost diligence Article 1755 of the New Civil Code provides that: “A common carrier is bound to carry the passengers safely as far as human care and foresight can provide. 2. where there is none of the first instance. possess sufficient fare with which to pay for his passage. he was where he was supposed to be with the intention of boarding a train. and present himself to the carrier for transportation in the place and manner provided. the SC held that it is not under the obligation of the carrier to check the veracity of the information in the travel document. after reaching his destination. and the SC said that these claims can still prosper in because there is still a breach of contract of carriage. Safety of Passengers 1. Thus.

the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable. The business is different from that of La Mallorca case. and 2. Liability for acts of strangers Article 1763 of the New Civil Code provides that: “A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers. or to their employees. to be considered still as passengers of the carrier. The reduction of fare does not justify any limitation of the common carrier's liability. entitled to the protection under their contract. on the part of the latter. but not for wilful acts or gross negligence. unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. Liability for acts of employees Article 1759 of the New Civil Code provides that: “Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the former's employees.” Article 1998 of the New Civil Code states that: “The deposit of effects made by the travellers in hotels or inns shall also be regarded as necessary. This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. of the effects brought by the guests and that. by the posting of notices. *In Aboitiz Shipping Corporation v CA. Effect of stipulation on liability Article 1757 of the New Civil Code provides that: “The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be dispensed with or lessened by stipulation. common carriers are presumed to have been at fault or to have acted negligently. if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. therefore.” 12 . by the posting of notices.” Case: Maranan v Perez 5. although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.” 4.” Article 1758 of the New Civil Code provides that: “When a passenger is carried gratuitously. they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. a stipulation limiting the common carrier's liability for negligence is valid. the SC held that extraordinary diligence was still owed to AV at the time of the accident. It was ruled that AV’s presence in the premises was not without cause. The keepers of hotels or inns shall be responsible for them as depositaries. Passenger’s Baggages Article 1754 of the New Civil Code provides that: “The provisions of Articles 1733 to 1753 shall apply to the passenger's baggage which is not in his personal custody or in that of his employee. *The differences between the La Mallorca case and Aboitiz Shipping Corporation are: 1.Commercial Law Review Transportation Law Claudine Mayor they were. or otherwise.” B. The victim had to claim his baggage which was possible only one hour after the vessel arrived since it was the standard procedure in the case of petitioner’s vessels that the unloading operation shall start only after that time.” Article 1760 of the New Civil Code states that: “The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation. by statements on tickets. provided that notice was given to them. by statements on the tickets or otherwise. Presumption of negligence Article 1756 of the New Civil Code states that: “In case of death of or injuries to passengers. “ Case: Bachelor Express v CA 6. The capacity of passengers and baggages are different 3. As to other baggage.

improper marking or direction as to destination. 13 .” Article 1761 of the New Civil Code provides that: “The passenger must observe the diligence of a good father of a family to avoid injury to himself. improper loading when he assumed such responsibility. which the carrier has advised them relative to the care and vigilance of their baggage. *The contributory negligence on the part of the passenger is not a defense that will excuse the carrier from liability. destruction or deterioration of the goods. CONSIGNEE AND PASSENGER: A. *The shipper must likewise see to it that the goods are properly packed. his family. the said passengers are likewise bound to observe due diligence to avoid injury. 2. if the proximate cause thereof is the negligence of the common carrier. and the passenger took the necessary precaution. *They are not absolutely responsible as depository because the law requires notice.” *The shipper is also obliged to exercise due diligence in avoiding damage or injury.” Article 2001 of the New Civil Code provides that: “The act of a thief or robber. who has entered the hotel is not deemed force majeure. shall be equitably reduced.” *The baggage in the personal custody of the passenger or his employee in that the baggage in transit will be considered as necessary deposits. *The carrier who has in his custody the baggage of the passenger to be carried like any other goods is required to observe extraordinary diligence. OBLIGATIONS OF THE SHIPPER. which however. and 3. otherwise. but the amount of damages shall be equitably reduced. unless it is done with the use of arms or through an irresistible force. It will only mitigate such liability. *With respect to carriage of passengers. *It is also required to declare the value of the baggage. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in articles 1998 to 2001 is suppressed or diminished shall be void. *The carrier may be able to prove that the only cause of the loss of the goods is any of the following acts of the shipper: 1. The fact that travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him. servants or visitors. In case of loss due to the fault of the passenger the carrier will not be liable. or if the loss arises from the character of the things brought into the hotel.Commercial Law Review Transportation Law Claudine Mayor Article 2000 of the New Civil Code states that: “The responsibility referred to in the two preceding articles shall include the loss of.” Article 1762 of the New Civil Code states that: “The contributory negligence of the passenger does not bar recovery of damages for his death or injuries. provided that notice was given to them or its employees. In case of loss or damage the carrier is presumed negligent. or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as strangers.” Article 2002 of the New Civil Code provides that: “The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest. the proximate cause thereof being the negligence of the common carrier. The common carrier shall be responsible for the baggage as depositaries. failure of the shipper to disclose the nature of the goods. liability of the carrier may be mitigated or barred depending on the circumstances.” Article 2003 of the New Civil Code provides that: “The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. the latter shall be liable in damages. Effect of negligence of shipper or passenger Article 1741 of the New Civil Code states that: “If the shipper or owner merely contributed to the loss. but not that which may proceed from any force majeure.

Article 374 of the Code of Commerce provides that: “The carrier who makes the delivery of the merchandise to the consignee by virtue of combined agreements or services with other carriers shall assume the obligations of those who preceded him in the conveyance. or against the other carriers who may have received the goods transported without reservation. 4. the carrier may demand the judicial sale of the goods transported in an amount necessary to cover the cost of transportation and the expenses incurred. Consignees to whom the shipment was made may not defer the payment of the expenses and transportation charges of the goods they receive after the lapse of 24 hours following their delivery. and once prescribed. The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded him in the conveyance. 2. destruction.” Article 1757 of the New Civil Code states that: “The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be dispensed with or lessened by 14 . This special right shall prescribe 8 days after the delivery has been made. 3. Underlying reason Reasons: 1. It is a claim for damages for failure to accept delivery. However. Business is impressed with a special public duty. Liability for demurrage Demurrage is the compensation provided for in the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. Preciousness of human life B. Possession of the goods. and (3) Reasonable. Consignee .” C. (2) Supported by a valuable consideration other than the service rendered by the common carrier. reserving his right to proceed against the latter if he was not the party directly responsible for the fault which gave rise to the claim of the shipper or consignee. signed by the shipper or owner. *In case of delay in payment. Passengers .” Article 375 of the Code of Commerce provides that: “The goods transported shall be especially bound to answer for the cost of transportation and for the expenses and fees incurred for them during their conveyance and until the moment of their delivery. The shipper and the consignee shall have an immediate right of action against the carrier who executed the transportation contract. Payment of freight Who will pay: Shipper . the reservation made by the latter shall not relieve them from the responsibilities which they may have incurred by their own acts. EXTRAORDINARY DILIGENCE: A.before or at the time he delivers the goods to the carrier for shipment. provided it be: (1) In writing. just and not contrary to public policy.they are contractually bound to pay the fare within such time as prescribed by regulations or by the carrier.if agreed upon by the parties at the point of destination is bound by such stipulation the moment he accepts the goods.Commercial Law Review Transportation Law Claudine Mayor B. the carrier shall have no other action than that corresponding to him as an ordinary creditor. or deterioration of the goods to a degree less than extraordinary diligence shall be valid. *Liability for demurrage exists only when expressly stipulated in the contract. Time to pay: Tickets are purchased in advance from ticket outlets. Effect of Stipulation Article 1744 of the New Civil Code states that: “A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss. From the nature of the business and for reasons of public policy. 5. Relationship of trust.

Overloading *Duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel. and shall intrust the navigation to a person possessing the qualifications required by said ordinances and regulations. stow. as established by marine or navigation laws. Proper storage *The ship must not be only seaworthy but it must also be cargoworthy. (b) Properly man. but not for wilful acts or gross negligence. and discharge the goods carried. The reduction of fare does not justify any limitation of the common carrier's liability. 119 of the IC Article 609 of the Code of Commerce states that: “Captains.” Sec. Extraordinary diligence in carriage by sea 1. refrigerating and cooling chambers. If the owner of a vessel desires to be the captain thereof.” Sec. by the posting of notices. have legal capacity to contract in accordance with this code. The failure of a common carrier to maintain in seaworthy condition the vessel involved in its contract of carriage is a clear breach of its duty prescribed in Article 1755 of the NCC. 3. keep. carriage. (c) Make the holds.” Article 1758 of the New Civil Code states that: “When a passenger is carried gratuitously. by statements on tickets. care for. and must not be disqualified according to the same for the discharge of the duties of the position. Seaworthiness of the vessel Sec. 3 [2] of the COGSA provides that: “The carrier shall properly and carefully load. The ship must be an efficient storehouse for her cargo. 5. and preservation. masters or patrons of vessels must be Filipinos. 4. *The vessel must be adequately equipped and properly manned. carry. Obligation of captain and crew *If the negligence of the captain and crew can be traced to the fact that they are really incompetent. and all other parts of the ship in which goods are carried. by the posting of notices. without having the legal qualifications therefor. capacity. a stipulation limiting the common carrier's liability for negligence is valid. 116 of the IC Sec. 3 [1] of the COGSA provides that: “The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to — (a) Make the ship seaworthy. he shall limit himself to the financial administration of the vessel. *The unseaworthiness can be established by the fact that it did not withstand the natural and inevitable action of the sea.” C. *Shippers of goods are not expected to inquire into the vessel’s seaworthiness and compliance with all maritime laws. or regulations. handle.” Article 1760 of the New Civil Code states that: “The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation.Commercial Law Review Transportation Law Claudine Mayor stipulation. *The carriers are deemed to warrant impliedly the seaworthiness of the ship. the Limited Liability Rule cannot be invoked because the ship owner may be deemed negligent. or otherwise. ordinances. Rule on deviation and transhipment Deviation 2. and prove the skill.” *Extraordinary diligence requires that the ship which will transport the passengers and goods is seaworthy. fit and safe for their reception. and qualifications necessary to command and direct the vessel. by statements on the tickets or otherwise. 15 . and supply the ship.equip.

*When done without legal excuse. its engines. Code of Commerce). 359. 3. Vehicle’s condition *Owners are required to make sure that the vehicles they are using are in good order and condition. v. Traffic rules (RA 4136) *In cases involving breach of contract of carriage. Competent and well trained crew 3. to seize or usurp control of the aircraft while in flight. Adverse weather conditions or extreme climatic changes are some of the perils involved in air travel consequence of which the passenger must assume or expect. is a violation of the contract and an infringement of the right of the shipper and subjects the carrier to liability if the freight is lost even by a cause otherwise excepted (Magellan Manufacturing Corp. proof of violation of traffic rules confirms that the carrier failed to exercise extraordinary diligence. Causes of action and nature/extent of liability (culpa contractual. he shall be reimbursed for such increase upon formal proof thereof. Extraordinary diligence in carriage by air 1. to compel a change in the course or destination of an aircraft of Philippine registry. he shall be reimbursed for such increase upon formal proof thereof (Art. the carrier had to take another route which produced an increase in transportation charges. CA). Transshipment is the act of taking cargo out of one ship and loading it in another. *If due to said force majeure he took another route and incurred expenses by reason thereof. culpa aquiliana and culpa delictual) Culpa contractual only the carrier is primarily liable and not the driver. 2. To take the required and prescribed route 4. beside paying the sum which may have been stipulated for such case. RA 6235 (An Act Prohibiting Certain Acts Inimical to Civil Aviation and for Other Purposes) . propellers and other components and accessories are of proper design and construction. common carrier is not bound nor empowered to make an examination of the contents of packages or bags particularly those hand carried. such design and construction being consistent with accepted engineering practice and in accordance with aerodynamic laws and aircraft science (RA 779). E.an aircraft. the carrier may not change the route. carrier can’t change unless due to force majeure. or b. and are safe for air navigation purposes.” D. 16 . and should he do so without this cause. however competent and safe the vessel into which the transfer is made. unless it be by reason of force majeure. 2. Extraordinary diligence in carriage by land 1. he shall be liable for all the losses which the goods he transports may suffer from any other cause. When on account of said cause of force majeure. Article 359 of the Code of Commerce provides that: “If there is an agreement between the shipper and the carrier as to the road over which the conveyance is to be made. Reason: There is no privity between the driver and the passenger.Commercial Law Review Transportation Law Claudine Mayor *If route is stipulated upon by the shipper and carrier. beside the sum stipulated for such case. ACTIONS IN CASE OF BREACH OF CONTRACT OF CARRIAGE: A. Obligation to Inspect *in overland transportation. Airline companies are required to inspect each and every cargo brought into the aircraft (RA 6235). 5. *Carrier shall be liable for all losses suffered from any other cause.acts punishable: a. Airworthiness .

6 years Exceptions: 1. 3 [6] of the COGSA substantially provides that in case of patent damage. the claim against the carrier for damage or average which may be found therein upon opening the packages. or the date when the goods should have been delivered (loss). Exemplary Damages 5. *One year period does not apply in cases of delay or misdelivery. may be made. Prescriptive period and conditions precedent 1. no claim shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. Purpose of notice: To inform the carrier that the shipment has been damaged and that it is charged with liability therefor. Temperate Damages 3. Action for loss or damage to the cargo should be brought within one year after: delivery of the goods (delivered but damaged goods).” *Prior notice of claim does not apply to misdelivery of goods. Overland transportation of goods and coastwise shipping (Domestic) Article 366 of the Code of Commerce provides that: “Within the 24 hours following the receipt of the merchandise.Commercial Law Review Transportation Law Claudine Mayor *The party to be impleaded is the carrier itself. insurer. subrogees. *The filing of a notice of claim is not a condition precedent. *Not provided by Article 366 of the Code of Commerce. the shipper should file a claim with the carrier within 3 days from delivery. Recoverable Damages The court may award the following damages: 1. in which case the claim shall be admitted only at the time of receipt. After the periods mentioned have elapsed. in such absence. the New Civil Code rules on prescription apply. and to give it an opportunity to make an investigation and fix responsibility while the matter is fresh. The carrier is subsidiarily liable only if the driver is convicted and declared insolvent. In case of latent damage. does it suspend the one year period? A: NO *One year period applies to shipper. assignee. Thus. 17 . Basis: Article 2180 of the New Civil Code B. Actual/Compensatory Damages 2. Basis: Article 1759 of the New Civil Code Culpa delictual/criminal the driver is primarily liable. or the transportation charges have been paid. COGSA – 1 year 2. Basis: Article 100 of the Revised Penal Code Culpa aquiliana the carrier and the driver are solidarily liable as joint tortfeasor. Nominal Damages Actual/Compensatory damages are those awarded to the aggrieved party as adequate compensation only for such pecuniary loss suffered by him as he has alleged and duly proved. Warsaw Convention – 2 years Example: Q: In case of pending extrajudicial claim. if not written. Liquidated Damages 4. International Carriage of Goods by Sea Sec. provided that the indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages. Prescriptive period: General Rule: If written. *The filing of notice of claim is a condition precedent for recovery in case of damage condition of the goods. and successor in interest. the shipper should file a claim with the carrier immediately upon delivery. Moral Damages 6. 10 years.

oppressive acts of the carrier. but it is necessary that there be some injury or pecuniary loss established. Nominal damages are not for indemnification of loss but for vindication of a right violated.Commercial Law Review Transportation Law Claudine Mayor Article 2199 of the Civil Code states that: “Except as provided by law or by stipulation. Though incapable of pecuniary 18 . Exception: If the amount stipulated is excessive the court may disregard said amount and may compute the actual damages. from the nature of the case. moral shock. to be paid in case of breach thereof. Article 2224 of the New Civil Code provides that: “Temperate or moderate damages. may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not. Exemplary damages are mere accessories to other forms of damages except nominal damages. serious anxiety. liquidated or compensatory damages. *There is no actual certainty of the actual amount loss. Article 2229 of the New Civil Code provides that: “Exemplary or corrective damages are imposed. *This cannot be awarded unless the plaintiff is entitled to moral at the same time actual or temperate damages. be provided with certainty. malevolent. temperate. JAL failed to give the plaintiff the priority for the first available flight. by way of example or correction for the public good.” *Awarded because of the wanton.” *This is in the form of actual damages but a stipulated one.” *To claim this award. the exact amount of which. *In this kind of damages. and similar injury. *This is in the form of actual damages Liquidated damages are fixed damages previously agreed by the parties to the contract and payable to the innocent party in case of breach by the other.” *The court is convinced that there is pecuniary loss. could not be determined by the plaintiff by reason of the nature of the case. The court is allowed to calculate the amount. may be vindicated or recognized. social humiliation. Article 2221 of the New Civil Code provides that: “Nominal damages are adjudicated in order that a right of the plaintiff. besmirched reputation. *Procedures or plastic surgeries performed to restore the part of the body injured are included as a component of actual damages. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. in addition to the moral. mental anguish.” *In Japan Airlines v CA. which has been violated or invaded by the defendant. moral. which are more than nominal but less than compensatory damages. Such compensation is referred to as actual or compensatory damages. The SC awarded nominal damages. Temperate damages or moderate damages these are damages the amount of which is left to the sound discretion of the court. *The only thing to be proved is the fact of loss. Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. *This is awarded to prevent other carrier to commit oppressive acts. *Proving the amount is not necessary. Article 2217 of the New Civil Code provides that: “Moral damages include physical suffering. wounded feelings. estoppel applies. General Rule: The court cannot change the amount. Article 2226 of the New Civil Code provides that: “Liquidated damages are those agreed upon by the parties to a contract. proving the amount is necessary. fraudulent. They are mere additions to actual. fright. temperate and liquidated damages which may or may not be granted at all depending upon the necessity of setting an example for the public good as a form of deterrent to the repetition of the same act by any one. and not for the purpose of indemnifying the plaintiff for any loss suffered by him.

malice. or to the concurring negligence of the shipowner and the captain. 2. Death of a passenger. their crews and navigation. for the results of the acts of the captain. 3. and to maritime conveyance of persons and property. Limited Liability Rule 1. Civil liability for indemnities in favor of third persons which arise from the conduct of the captain in the case of the goods which the vessel carried. maritime trade and commerce Purpose: To encourage shipbuilding and maritime transactions Article 587 of the Code of Commerce provides that: “The ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel. referred to in Article 587.” Article 837 of the Code of Commerce provides that: “The civil liability incurred by the shipowners in the case prescribed in this section. Carrier is guilty of fraud. of the part of the vessel belonging to him.” Article 590 of the Code of Commerce provides that: “The co-owners of a vessel shall be civilly liable in the proportion of their interests in the common fund. before a notary. and *Freightage collectible Q: How come insurance is an exception? A: Because there is no loss. marine transactions connected with maritime law. Each co-owner may exempt himself from this liability by the abandonment. When the vessel is insured to the extent of the insurance proceeds. Q: Is this rule applies in the handling of the passengers? A: YES Q: Whose liability is this? A:Shipowner or Agents Q: What kind? A: Maritime in nature. earned freightage and proceeds of the insurance. The total destruction of the vessel extinguishes maritime lien as there is no longer any res to which it can attach.” When applicable: The Code of Commerce sanctions the application of the doctrine in the following cases: 1.Commercial Law Review Transportation Law Claudine Mayor computation. In Air France case MARITIME LAW: Source: Code of Commerce A. if any. B. Concept of Maritime Law Maritime Law is the system of laws which particularly relates to the affairs and business of the sea. 2. Unpaid wages of the captain and the crew if the vessel and its cargo are totally lost by reason of capture of shipwreck. 2. “NO VESSEL NO LIABILITY” expresses in a nutshell the limited liability rule. shall be understood as limited to the value of the vessel with all its appurtenances and freightage earned during the voyage. 2. 3. When the injury to or death of a passenger is due either to the fault of the shipowner. but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight it may have earned during the voyage. Civil liability arising from collisions. *Apply only to maritime trade and sea voyages. In Workmen’s Compensation claims Q: Why is an exception? 19 . moral damages may be recovered if they are the proximate result of the defendant's wrongful act for omission. to ships. The loss was compensated by the insurance company 3. Concept The exclusively real and hypothecary nature of maritime law operates to limit the liability of the shipowner to the value of the vessel.” Q: When moral damages may be awarded? A: 1. bad faith even if there is no death of a passenger (Case: Lopez v Pan-American). Exceptions to the rule Exceptions: 1.

continuous possession for ten years shall be necessary in order to acquire ownership. scows and any other floating apparatus destined for the services of the industry or maritime commerce. There is nothing to abandon. In the absence of any of these requisites. Q: If there is total loss. pontoons. In the absence of any of there. The ownership of a vessel shall likewise be acquired by possession in good faith. If there is insurance over the vessel. The requisite for acquisitive 20 . Abandonment Q: If there’s partial loss can the shipowner/agent be exempted from liability? A: YES. The acquisition of a vessel must appear in a written instrument. the shipowner or ship agent may exempt themselves from liability by abandoning the vessel with all her equipment and the freight it may have earned during the voyage. Shall be acquired by possession in good faith. continued for 3 years 4. The character of possession he has is not those for acquisitive possession. Then and only then can all such claims be simultaneously settled. the execution of judgment in earlier completed cases. dredges. bancas and other watercrafts of less than 3 tons gross capacity and small watercrafts engaged in river and bay traffic. By prescription Article 573 of the Code of Commerce states that: “Merchant vessels constitute property which may be acquired and transferred by any of the means recognized by law.” Requisites: 1. Case: Aboitiz Shipping Co. continuous possession for 10 years shall be necessary to acquire ownership Q: Can the ship captain acquire vessel by prescription? A: NO. Excluded are local and foreign military vessels. 1. either completely or pro-rata should the insurance proceeds and freightage be not enough to satisfy the claim. whether coastwise or on the high seas. including floating docks. with a just title duly recorded. Vessels . Acquisition a. is it necessary to abandon? A: NO. Q: How claims are satisfied under the Limited Liability Rule? A: All claims should be collated before they can be satisfied from what remains of the insurance proceeds and freightage at the time of the loss. Such shall not produce any effect to third persons if not inscribed in the registry of vessels 3. If there is abandonment. the SC held that it covers anything that is connected with maritime transactions 3. continued for three years. abandonment covers the insurance proceeds while the vessel itself shall be abandoned in favor of the insurer. Thus.Commercial Law Review Transportation Law Claudine Mayor A: Because not maritime in nature *In Yangco v Laserna case.Those engaged in navigation. Case: Luzon Stevedoring *Under Article 587 of the Code of Commerce. A captain may not acquire by prescription the vessel of which he is in command. must be stayed pending completion of all cases occasioned by the subject sinking. v General Accident Fire and Life Insurance Corporation C. even those already final and executory. No claimant should be given preference over the others by the simple expedience of having filed or completed its action earlier than the rest. which shall not produce any effect with respect to third persons if not inscribed in the registry of vessels. With a just title duly recorded 5. Acquisition must appear in a written instrument 2.

stores and engine of a steamer appurtenant thereto. where there is none. If the sale is made after the vessel has arrived at the port of its destination. freightage shall pertain to the vendor. to the consul of the Republic of the Philippines. being in a voyage. its owner or owners should voluntarily alienate it. In every case the alienation of the vessel must be made to appear with a statement of whether the vendor receives its price in whole or in part. should there be one. and the payment of the crew and other persons who make up its complement for the same voyage shall be for his account. either to Filipinos or to foreigners domiciled in the capital or in a port of another country. this fact shall be stated in the certificate of navigation. but they may exercise the same only within the 9 days following the inscription of the sale in the registry. the freightage which it earns from the time it receives its last cargo shall pertain entirely to the purchaser. unless the contrary is stipulated in either case. should it be in the Philippines. and the payment of the crew and other persons who make up its complement shall be for his account. the bill of sale shall be executed before the consul of the Republic of the Philippines at the port where it terminates its voyage and said instrument shall produce no effect with respect to third persons if it is not inscribed in the registry of the consulate. If the consignee or the insurer should 21 . Article 575 of the Code of Commerce states that: “Co-owners of vessels shall have the right of repurchase and redemption in sales made to strangers.” Article 577 of the Code of Commerce states that: “If the alienation of the vessel should be made while it is on voyage. masts. The arms. By sale Article 576 of the Code of Commerce states that: “In the sale of a vessel it shall always be understood as included the rigging. and by depositing the price at the same time. The consul shall immediately forward a true copy of the instrument of purchase and sale of the vessel to the registry of vessels of the port where said vessel is inscribed and registered. and the consul. or the judge or court. Article 578 of the Code of Commerce states that: “If the vessel being on a voyage or in a foreign port. *If made after vessel arrived at port of its destination. or whether he preserves in whole or in part any claim on said vessel. to the judge or court or to the local authority. the freightage which it earns from the time it receives its last cargo shall pertain entirely to the purchaser. The vendor shall be under the obligation to deliver to the purchaser a certified copy of the record sheet of the vessel in the registry up to the date of sale. unless the contrary is stipulated in either case. When a vessel. and the payment of the crew and other individuals who make up its complement shall be for his account. provisions and fuel shall not be considered as included in the sale. *If made while it is on voyage. and should it be in a foreign country. In case the sale is made to a Filipino. and the payment of the crew and other individuals who make up its complement shall be for his account. the captain shall apply to the competent judge or court of the port of arrival. or.Commercial Law Review Transportation Law Claudine Mayor possession is that possession as an owner. munitions of war. the freightage shall pertain to the vendor. which at the time belongs to the vendor. shall order an examination of the vessel to be made.” b. shall be rendered useless for navigation.

906 of the Tariff and Customs Code provides that: “Manifests shall be required for cargo and passengers transported from one place or port in the Philippines to another only when one or both of such places is a port of entry. *A bill of lading is just a declaration of a specific cargo rather than the entire cargo.Commercial Law Review Transportation Law Claudine Mayor reside at said port.” Article 587 of the Code of Commerce provides that: “The ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel. Nevertheless. or should have representatives there. provided the creditor proves that the amount claimed was invested for the benefit of the same. licenses or other documents incident to registration and documentation. but he may exempt himself thereform by abandoning the vessel with all her equipments and the freight it may have earned during the voyage.” Article 588 of the Code of Commerce provides that: “Neither the shipowner nor the ship agent shall be liable for the obligations contracted by the captain. if the latter exceeds the powers and privileges pertaining to him by reason of his position or conferred upon him by the former. and provision the vessel. The object is to furnish customs officers with a list to check against. If the part-owners should not be more than two. The person having the smallest share in the ownership shall have one vote. Ship’s manifest Sec. it should be decided by lot. Rules in case of part-owners Article 589 of the Code of Commerce provides that: “If two or more persons should be part owners of a merchant vessel. the disagreement of views. if any. or otherwise requisite for Philippine vessels. and proportionately the other part owners as many votes as they have parts equal to the smallest one. If the interests are equal. This partnership shall be governed by the resolution of the majority of the members. D. the responsibility therefor shall devolve upon its owner or agent. Hence. By ship agent is understood the person entrusted with provisioning or representing the vessel in the port in which it may be found. shall be decided by the vote of the member having the largest interest.” *Declaration of the entire cargo. if the amounts claimed were invested for the benefit of the vessel. they must be cited in order that they may take part in the proceedings on behalf of whoever may be concerned. Shipowners and shipagents Article 586 of the Code of Commerce provides that: “The shipowner and the ship agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair. A vessel may not be 22 . Persons who take part in Maritime Commerce 1. a partnership shall be presumes as estrablished by the co-owners.” *Through the MARINA d. to inform the revenue officers what goods are brought into a port of the country on a vessel.” a. By it shall be kept and preserved the records of registration and of transfers and encumbrances of vessels. Registration Section 810 of the Tariff and Customs Code provides that: “The Bureau of Customs is vested with exclusive authority over the registration and documentation of Philippine vessels. the requirement that a vessel must carry a manifest is not complied with even if a bill of lading can be presented. equip. and by it shall be issued all certificates. It is issued as a matter of convenience by virtue of a contract.” c.

for the results of the acts of the captain. the matter shall be decided by lot. under the same conditions and price. must have the capacity to trade and must be recorded in the merchant’s registry of the province. which must be acquired by the other co-owners. and for other expenses which are incurred by virtue of a resolution of the majority. and if the vote should result in a tie. The appointment of director or ship agent shall be revocable at the will of the members. and provisioning of the vessel. without interfering with the navigation. referred to in Article 587. for the expenses for repairing the vessel. They shall likewise be liable in the same proportion for the expenses for the maintenance.” b. in proportion to their respective ownership. subject in every case to the provision of Article 609. for the private debts of a part owner. take judicial and extrajudicial steps in matters relating to commerce. Rules in case of shipagents Article 595 of the Code of Commerce states that: “The ship agent. the matter shall be decided by lot. but the proceedings shall be limited to the interest which the debtor may have in the vessel. equipment. saving always the right of repurchase and redemption provided for in Article 575.” Article 593 of the Code of Commerce provides that: “The owners of a vessel shall have preference in her charter over other persons. the one having the greater interest shall be preferred. the disagreement shall be decided by a vote of the members. or a manager for an owner or for an association of co-owners. unless the minority members renounce their interests. subject to the provisions of the law of civil procedure. after a judicial appraisement of the value of the portion or portions assigned. and provisioning of the vessel in the port of departure shall bind the minority. and there should be a tie.” Article 597 of the Code of Commerce states that: “The ship agent shall designate and come to terms with the captain. it shall be decided in favor of the co-owner having the larger interest in the vessel. The sale of the vessel must be made at public auction. If two or more co-owners apply for the position of captain.” Article 592 of the Code of Commerce provides that: “The resolution of the majority with regard to the repair.” Article 591 of the Code of Commerce provides that: “All the part owners shall be liable.Commercial Law Review Transportation Law Claudine Mayor detained. attached or levied upon in execution in its entirety. The resolutions of the majority relating to the dissolution of the partnership and sale of the vessel shall also be binding on the minority. in his own name and in such capacity. and may.” Article 590 of the Code of Commerce provides that: “The co-owners of a vessel shall be civilly liable in the proportion of their interests in the common fund. The ship agent shall represent the ownership of the vessel. and should they have equal interests. necessary for navigation. If the interests of the applicants should be equal. and shall contract in the name 23 . unless the co-owners unanimously agree otherwise. If two or more of them should claim this right.” Article 596 of the Code of Commerce provides that: “The ship agent may discharge the duties of captain of the vessel. equipment. whether he is at the same time the owner of the vessel.” Article 594 of the Code of Commerce states that: “The co-owners shall elect the manager who is to represent them in the capacity of ship agent.

and freight of the vessel. the co-owners shall pay the expenses in proportion to their interest. without the authorization of its owner or resolution of the majority of the coowners. have legal capacity to contract in accordance with this code. Powers and functions 24 . for the benefit of the vessel. details equipment. Captains and masters of vessels a.” Article 599 of the Code of Commerce states that: “The ship agent managing for an association shall render to his associates an account of the results of each voyage of the vessel. the managing agent shall be entitled to an executor action (‘accion ejecutiva’). and must not be disqualified according to the same for the discharge of the duties of the position. which shall be instituted by virtue of a resolution of the majority. without prejudice to the civil or criminal actions which the minority may deem fit to institute afterwards. *He is solidarily liable with the owner for such loss or damage subject to his right to claim reimbursement from the shipowner. without any other requisite than the acknowledgment of the signatures on the instrument approving the account. without having the legal qualifications therefor. and qualifications necessary to command and direct the vessel. who shall be bound in all that refer to repairs. unless these powers were granted him in the certificate of his appointment. and without further proceedings than the acknowledgment of the signatures of the persons who voted for the resolution. In order to enforce the payment. or insure the vessel. 2. armament.” Article 602 of the Code of Commerce states that: “The ship agent shall indemnify the captain for all the expenses he may have incurred with funds of his own or of others. masters or patrons of vessels must be Filipinos. capacity. *Only agent that can be sued directly.” *The ship agent is entrusted with the provisioning and representing the vessel in the port in which it may be found. the co-owners may demand of the managing agent the amount corresponding to their interests by means of an executor action (‘accion ejecutiva’). provisions of food and fuel.” Article 601 of the Code of Commerce states that: “Should there be any profits. Qualifications Article 609 of the Code of Commerce states that: “Captains. without prejudice to always having the books and correspondence relating to the vessel and to its voyages at their disposal. he is subsidiarily liable for the solvency of the insurer. If the owner of a vessel desired to be the captain thereof. or make contracts for a new charter. in all that relate to the requirements of navigation. His liability to passengers and cargo owners for loss or injury is the same as the shipowner. or regulations. and shall intrust the navigation to a person possessing the qualifications required by said ordinances and regulations. and.” Article 600 of the Code of Commerce states that: “After the account of the managing agent has been approved by a relative majority. If he insures the vessel without authorization therefore.” Article 598 of the Code of Commerce states that: “The ship agent may not order a new voyage.Commercial Law Review Transportation Law Claudine Mayor of the owners. and prove the skill.” b. ordinances. in general. as established by marine or navigation laws. he shall limit himself to the financial administration of the vessel.

the repairs on the hull and engines of the vessel and in its rigging and equipment. 25 . 3. the roll of the persons who make up the crew of the vessel. and the contracts entered into with them. master or patron of a vessel: 1. in accordance with the instructions he may have received from the ship agent. and other equipment of the vessel. 5. By drawing on the ship agent. rigging. the charter parties or authenticated copies thereof. the captain. 4. To make contracts for the charter of the vessel in the absence of the ship agent or of its consignee. In these two last cases he must apply to the judicial authority of the port. and the memorandum of the visit or inspection by experts. To impose. 4. the lists of passengers. but if he should arrive at a point where there is a consignee of the vessel. and 6. proceeding in accordance with the provisions of Article 583. and to propose said crew. To have on board before starting on a voyage a detailed inventory of the hull. To command the crew and direct the vessel to the port of its destination.” Article 612 of the Code of Commerce states that: “The following obligations shall be inherent in the office of the captain: 1. in accordance with the contracts and with the laws and regulations of the merchant marine. provided there is no time to request instruction from the ship agent. the certificate of the registry proving the ownership of the vessel and all the obligations which encumber the same up to that date. in similar urgent cases while on a voyage. By requesting said funds from the consignee of the vessel or correspondents of the ship agent. should it have been made at the port of departure. engines. To appoint or make contracts with the crew in the absence of the ship agent. the invoices or manifests of the cargo. By applying to the consignees of the cargo or to those interested therein. 3. and where there is none. to the local authority. he shall act in concurrence with the latter. holding a preliminary hearing on the crimes committed on board the vessel on the seas. shall obtain the same in the successive order stated below: 1. 2. purchasing all that may be necessary for the purpose. should said agent be present.Commercial Law Review Transportation Law Claudine Mayor Article 610 of the Code of Commerce states that: “The following powers shall be inherent in the position of captain. 2. and with the provisions of the law of civil procedure. correctional punishment upon those who fail to comply with his orders or are wanting in discipline. which are absolutely necessary to enable it to continue and finish its voyage. By borrowing the amount required by means of a loan on bottomry. the bill of health. spare-masts. which crimes shall be turned over to the authorities having jurisdiction over the same at the first port touched. when he has no funds and does not expect to receive any from the ship agent. To adopt all proper measures to keep the vessel well supplied and equipped. and to the consul of the Republic of the Philippines if in a foreign country. acting in accordance with the instructions received and protecting the interests of the owner with utmost care. and 5. but the ship agent may not employ any member against the captain’s express refusal.” Article 611 of the Code of Commerce states that: “In order to comply with the obligations mentioned in the preceding article. By selling a sufficient amount of the cargo to cover the sum absolutely indispensable for the repair of the vessel and to enable it to continue its voyage. tackle. To order. the royal or the navigation certificate. and when on board the vessel. if in the Philippines.

in order to ascertain whether it is water-tight. and the freightage they give. repairs. one by the captain of the vessel and another by those who request its examination.” he shall enter day by day the condition of the atmosphere.” he shall record all the amounts collected and paid for the account of the vessel. the special character of the shipment. and the effect and importance of the jettison. To have a copy of this code on board. 5. fuel. he shall also enter the damage suffered by the vessel in her hull. the courses taken. on account of the nature of the merchandise. and other incidents of navigation. ports of loading and unloading. without the precautions which are recommended for their packing. the maneuvers executed.” he shall record the loading and discharge of all the gods. if required by the shippers and passengers. or even of the crew and passengers. and principally the favorable season in which it is undertaken. To remain constantly on board the vessel with the crew while the cargo is being taken on board and to carefully watch the stowage thereof.Commercial Law Review Transportation Law Claudine Mayor 2. with the rigging and engines in good condition. and if. handling and isolation. not to permit the carriage on deck of any cargo which by reason of its arrangement. and in cases of serious decisions which require the advice or a meeting of the officers of the vessel. and with the equipment required for good navigation. He shall furthermore enter therein a list of all the members of the crew. acquisitions of equipment or goods. and the price of passage. and other expenses of whatever nature they may be. he shall record the decisions adopted. or weight makes the work of the sailors difficult. rigging. merchandise may be carried on deck. stating their marks and packages. entering specifically the article by article. their wages and salaries. For the information indicated he shall make use of the binnacle book and of the steam of engine book kept by the engineer. 4. and which might endanger the safety of the vessel. In this same book he shall record the names and places of sailing of the passengers. placing at the beginning of each one a memorandum of the number of folios it contains. In the third book. the distances covered. names of the shippers and of the consignees. To have thee folioed and stamped books. The experts shall be appointed. outfits. should there be any. wages. to make with the officers of the crew and two experts. In the second book called the “accounting book. and the amounts they may have received on account. 3. Before receiving cargo. the prevailing winds. signed by the maritime authority. the power of the engines used in navigation. and in case of disagreement a third shall be appointed by the marine authority of the port or by the authority exercising his functions. no matter what its cause may be. and tackle. an examination of the vessel. In the first book. not to consent to the loading of any merchandise or matter of a dangerous character. as well as the impairment and damage suffered by cargo. directly or by delivery to their families. stating their domiciles. and in his absence by the competent authority. signed by all those who may have taken part therein. volume. the source of the collection and the amounts spent for provisions. food. the rigging carried. such as inflammable or explosive substances. engines. called “freight book. the number of packages in their baggage. which shall be called “log book. preserving under his responsibility a certificate of the memorandum of his inspection. he must hear the opinion of the officers of the vessel 26 .

in accordance with subdivision 8 of this article. or has to take a roadstead or anchoring place with which neither he nor the officers and crew are acquainted. 7. abiding by the decision of the majority. of its cargo. To take the necessary steps before the competent authority in order to record in the certificate of the vessel in the registry of vessels the obligations which he may contract in accordance with Article 583. and of any operation and date which may be of interest to him. roadsteads. In case of wreck. 15.Commercial Law Review Transportation Law Claudine Mayor and have the consent of the shippers and of the ship agent. in the presence of passengers. To inform the ship agent from the port at which the vessel arrives. to make the proper protest in due form at the first port of arrival. to notify him of the cargo he may have received. 12. health. freightage earned. drawing up a detailed inventory. he shall take with him. and rivers. To observe the rules with respect to situation. canals. and if the boats are to be taken to. before the competent authority or the Philippine consul. and port of departure of the vessel. and before abandoning it. being liable for all that which he may do in violation thereof. specifying therein all the incidents of the wreck. in their absence. 13. to hear the officers of the crew. if after examining the same it is found to be acceptable. before anything else. canal. telegraph. and then the articles of most value. that he did all he could to save them. To conduct himself according to the rules and precepts contained in the instructions of the ship agent. lights and maneuvers in order to avoid collisions. to the maritime authority if in the Philippines and to the consul of the Republic of the Philippines if in a foreign country. 6. when making a port in distress. in case the vessel is in danger. in case of the loss of the books and papers. of members of the crew as witnesses. mail. as the case may be. To comply with the obligations imposed by the laws and regulations on navigation. He shall not spend the night away from the vessel except for serious causes or by reason of official business. until all hope to save it is lost. the books and papers. customs. of the reason of his arrival. 10. to advise him of his departure. stating the names and domiciles of the shippers. unless there is a pilot on board discharging his duties.. or river. To be on deck on reaching land and to take command on entering and leaving ports. the declaration must be made before the local authority. Discretion powers *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 27 . To present himself. In the absence of the maritime authority or of the consul. or. To remain on board. To demand a pilot at the expense of the vessel whenever required by the navigation. taking advantage of the semaphore. 14. 9. To place under good care and custody all the papers and belongings of any members of the crew who might die on the vessel. 11. and principally when he has to enter a port. 8. and others. and amounts borrowed on bottomry loan. etc. 16. and the cause of arrival which declaration shall be visaed by the authority or the consul. and to make a statement of the name registry. before 24 hours have elapsed. within 24 hours. giving the captain the proper certificate proving his arrival in distress and the reasons therefor.” c. being obliged to prove.

The charterer is treated as owner pro hac vice of the vessel. *Charterer means the vessel assumes all responsibilities of navigation and provides his own people. Concept Pilot is a person duly qualified and licensed to conduct a vessel into or out of ports or in certain waters. bareboat and contract of affreightment Kinds: 1. Case: Far Eastern Shipping v CA b. a common carrier becomes a private carrier.Commercial Law Review Transportation Law Claudine Mayor specifically requires on a stipulated ocean voyage. E. he becomes the Master pro hac vice. the master does not surrender his vessel to the pilot and the pilot is not the master. Sailing mate/First mate ii. Supercargoes person who discharges administrative duties assigned to him by ship agent or shippers. Kinds. Officers and crew of the vessel i. watchkeeper. radio officers 5. Case:Inter-Orient Maritime Enterprises Inc. Crew – cabin boy. the charterer merely having use of the space in the vessel in return for his payment of the charter hired. keeping an account and record of transaction as required in the accounting book of the captain.” Charter party is a lease contract by which with the entire ship or some principal part thereof is let by the owner to another person for a specified period of time or use. Persons qualified to make charter Q: Can the captain enter into a charter contract? A: YES provided that he is authorized. Charter parties 1. *The shipowner retains the possession. even though in executing them he should have acted in violation of the orders and instructions of the ship agent or shipowner. 2. General Rule: The charterer is liable to the third person. Relationship to master and shipowner 4. 3. but the latter shall have a right of action against the captain for indemnification of damages. paramedics. *While 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. road or channel or from a port. Bareboat or demise means the whole vessel is lend to the charterer which transfers to him its entire command and possession and consequent control over its navigation. Concept Article 655 of the Code of Commerce states that: “Charter parties executed by the captain in the absence of the ship agent shall be valid and effective. it is the charterer who is liable to them. *Generally connotes a person taken on board at a particular place for the purpose of conducting a ship through a river. to carry goods for others. *If he is in command. Contract of affreightment involves that use of shipping space leased by the owner in part or as a whole. Pilot a. Q: Can the charterer enter into a subcharter contract? 28 . Engineers – marine engineers iv. *Shipowner is not liable to third person. including the master and crew who are his servants. 2. Second mate iii. command and navigation of the ship. In such case. There are occasions when the master may and should interfere and even displace the pilot. Exception: Shipowner may still be held liable if the injury was caused by unseaworthiness or negligence of the shipowner beyond before the demise or bareboat took over. as when the pilot is obviously incompetent or intoxicated. *The shipowner is liable to third person. v CA 3.

6. besides the conditions freely stipulated. name. or in any other manner whatsoever agreed upon. 9. Consent of the contracting parties 2. the following circumstances: 1. by two witnesses at his request. if the latter should make the charter party. 3. Loans on Bottomry and Respondentia 1. 2. The port of loading and unloading. and domicile of the ship agent. Compliance with Article 652 of the Code of Commerce 5. 4. The name. or for the space to be occupied. or whether the charter party is total. 7.Commercial Law Review Transportation Law Claudine Mayor A: YES provided it is not prohibited. Rights and obligations of charter parties Shipowner or Ship Charterer agent If the vessel is To pay the agreed chartered wholly. to bring cargo to nearest neutral port in case of war or blockade F. The name. The name. The amount of primage to be paid to the captain. or of the price they may receive in case of accident. Freight 4. charter price not to accept cargo from others To observe To pay freightage on represented unboarded cargo capacity To unload cargo To pay losses to clandestinely placed others for loading uncontracted cargo or illicit cargo To substitute To wait if the vessel another vessel if needs repair load is less than 3/5 of capacity To leave the port if To pay expenses for the charterer does deviation not bring the cargo within the lay days and extra lay days allowed To place in a vessel in a condition to navigate. The lay days and extra lay days to be allowed and the demurrage to be paid for each of them. The days agreed upon for loading and unloading.” Requisites: 1. surname. 6. beyond the time allowed in the contract of affreightment. and when either does not know how or is not able to do so. Requisites of a valid charter Article 652 of the Code of Commerce states that: “A charter party must be drawn in duplicate and signed by the contracting parties. The freightage to be paid. by express contract. surname. 11. 8. shall be considered a loan on bottomry or respondentia. and if he states that he is acting by commission. and to any other improper detention or delay beyond the time set for loading. 5. Existing vessel which should be placed at the disposition of the shipper 3. for the detention of the vessel. Its flag and port of registry. 10. stating whether it is to be a fixed amount for the voyage or so much per month. This is just like the rule in lease. 4. The charter party shall contain. 29 . the repayment of the sum loaned and of the premium stipulated depends upon the safe arrival in port of the goods on which it is made. and domicile of the charterer.” Bottomry is a loan secured by the shipowner or ship agent guaranteed by the vessel itself and payable only upon arrival of vessel at destination. or for the weight or measure of the goods of which the cargo consists. in loading and unloading. number of tons or the weight or measurement which they respectively bind themselves to load and to transport. Definition Article 719 of the Code of Commerce states that: “A loan in which under any condition whatever. Concept of and liability for demurrage Demurrage is the sum due. that of the person for whose account he makes the contract. and domicile of the captain. The kind. surname. The capacity. and tonnage of the vessel.

Brought about by malicious conduct of the shipowner. Effect of loss of on loan Article 731 of the Code of Commerce states that: “The actions pertaining to the lender shall be extinguished by the absolute loss of the goods on which the loan was made. 6. The loan must be made in connection with the maritime transaction 30 . Respondentia is a loan secured by the owner of the cargo payable upon safe arrival of cargo at destination. 2. 2. for immediate repairs. By means of a policy signed by the contracting parties and the broker taking part therein. they should have. Ship owner or ship agent 2. The cargo loaded on the vessel be different in from that agreed upon. but this shall not take place if the loss was caused by the inherent defect of the thing. Reason: Must be in writing to be enforceable. if it arose from an accident of the sea at the time and during the voyage designated in the contract. and it is proven that the cargo was on board. Barratry of the captain. or barratry on the part of the captain. Owner of the cargo 3. By means of public instrument. by means of private instrument. and c. 3. 3. and 5. according to their nature. unless this change should have been made by reason of force majeure. or if it was caused by damages suffered by the vessel as a consequence of being engaged in contraband. 4.” Formal Requirements: a. Engaged in unlawful transaction. Distinguished from ordinary loan Ordinary Loan Bottomry/Respondentia With or without Always with collateral collateral Any property Property is limited to may be used as vessel/cargo collateral Absolutely Conditionally payable payable Obligation to Loan is extinguished in pay still exists in the event that the the event the vessel/cargo was lost collateral was lost First lender is Last lender is the first the first priority priority Need not be in Need to be in writing to writing to be be enforceable enforceable 3. example of which is.” General Rule: If the property that was collateral was loss. By means of a private instrument. Exceptions: 1. Policy signed by the contracting parties and the broker taking part therein. the loan is extinguished. of the borrower. By means of a public instrument. 5. b. Proof of the loss as well as of the existence of the vessel of the goods declared to the lender as the object of the loan is incumbent upon him who received the loan. Barratry is an act of the captain or crew for fraudulent purposes. or if it arose from having loaded the merchandise on a vessel different from that designated in the contract. Perished due to inherent defects. the preference which. without which requisites the credits of this kind shall not have.Commercial Law Review Transportation Law Claudine Mayor *Captain may enter into bottomry loan provided there is justification. Formalities needed Article 720 of the Code of Commerce states that: “Loans on bottomry or respondentia may be executed: 1. although the obligation shall be valid between the contracting parties. with regard to other credits. it shall be entered in the certificate of the registry of the vessel and shall be recorded in the registry of vessels. Cases where loan is regarded as simple loan a. Lender 4. Under whichever of these forms the contract is executed. or through the fault or malice. 2. *Commonality of all the exceptions is that the borrower is at fault. Parties to the loan Parties: 1.

arms. either on account of inherent defect of the goods or by reason of an accident of the sea or force majeure. from the time it puts to sea from the port of departure until it anchors and lands in the port of destination. rigging. If the property is not exposed to maritime peril. if they were not loaded. the interest which the parties in default may have in the vessel shall be liable for the loan in the proper proportion. if the other owners or their agents should not have given their express authorization therefor or should not have taken part in the transaction.” Article 727 of the Code of Commerce states that: “If the full amount of the loan contracted in order to load the vessel should not be used for the cargo.” Article 729 of the Code of Commerce provides that: “Should the goods on which money is taken not be subjected to risk. If one or more of the owners should be requested to furnish the amount necessary to repair or provision the vessel. Article 726 of the Code of Commerce states that: “If the lender should prove that he loaned as amount larger than the value of the object liable for the bottomry loan.” G. Reason: To prevent abuse by the borrower of the benefits of this loan. the contract shall be considered a simple loan. Classes of average and the persons liable a. Simple average Article 809 of the Code of Commerce provides that: “As a general rule.” Article 728 of the Code of Commerce states that: “The loan which the captain takes at the point of residence of the owners of the vessel shall only affect that part thereof which belongs to the captain.Commercial Law Review Transportation Law Claudine Mayor otherwise the loan becomes a simple loan. 2. 31 . If the loan is bigger than the value of the collateral. with the obligation on the part of the borrower to return the principal and interest at the legal rate. if that agreed upon should not be lower. the balance shall be returned before clearing. Outside of the residence of the owners the captain may contract loans in accordance with the provisions of Articles 583 and 611. b. the cargo. The losses and expenses suffered by the vessel in its hull. The surplus principal shall be returned with legal interests for the entire time required for repayment. the loan shall be valid only for the amount at which said object is appraised by experts. or both. and those suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of their consignment. the loan becomes a simple loan. Any damages or deteriorations which the vessel may suffer from the time it puts to sea from the port of departure until it casts anchor in the port of destination. and equipment. The same procedure shall be observed with regard to the goods taken as loan. Averages 1. c. and they should not do so within 24 hours.” 2. on account of fraudulent measures employed by the borrower. All extraordinary or accidental expenses which may be incurred during the voyage in order to preserve the vessel. and especially the following: 1. Concept Article 806 of the Code of Commerce provides that: “For the purposes of this code the following shall be considered averages: 1. The losses suffered by the cargo from the time of its embarkation until it is unloaded. and the expenses incurred to avoid and repair the same. 2. simple or particular averages shall include all the expenses and damages caused to the vessel or to her cargo which have not inured to the common benefit and profit of all the persons interested in the vessel and her cargo. for the same causes and reasons.

8. The victuals and wages of the crew while the vessel is in quarantine. if the marine ordinances allow it. the latter shall be liable for all the losses caused. privateers. and expenses of the vessel detained during the time the settlement or redemption is being made. The necessary expenses on arrival at a port. The goods jettisoned to lighten the vessel. from a real and known risk. in order to save the cargo. and the damage suffered through said act by the goods which are kept on board. 9. General average Article 811 of the Code of Commerce provides that: “As a general rule. except in coastwise navigation. 5. The expenses caused in order to float a vessel intentionally stranded for the purpose of saving it. 4. negligence.” Q: Who is liable? A: Owner of the goods b. in order to make repairs or secure provisions. if the charter has been contracted for a fixed sum for the voyage. The losses suffered by the merchandise loaded on deck. Article 810 of the Code of Commerce provides that: “The owner of the goods which gave rise to the expense or suffered the damage shall bear the simple or particular averages. and particularly the following: 1. and the provisions. The wages and victuals of the crew when the vessel is detained or embargoed by legitimate order or force majeure. to the vessel. without prejudice to the right of the owner to recover the corresponding indemnity from the captain. or pirates. or to meet any other need of the vessel. The lowest value of the goods sold by the captain in arrivals under stress for the payment of provisions and in order to save the crew. 6. The cables and masts which are cut or rendered useless. 2. Any loss suffered by the cargo through the fault. 4. The expenses of removing or transferring a portion of the cargo in order to lighten the vessel and place it in condition to enter a port or roadstead. and the damage resulting therefrom to the goods removed or transferred. or both at the same time. against which the proper amount shall be charged. if it is accidental and unavoidable. whether they belong to the cargo. 32 . or to the crew. the vessel. 6. and the freightage. its cargo. general or gross averages shall include all the damages and expenses which are deliberately caused in order to save the vessel. 5. The loss inflicted upon the vessel or cargo by reason of an impact or collision with another. or barratry of the captain or of the crew. 7. or both. 3. the anchors and the chains which are abandoned.” General Rule: No reimbursement Principle: Loss will lie where it falls Reason: There was no common benefit Exception: if there is insurance Exception to the Exception: Stipulated in the insurance policy stating no liability on the part of the insurer regarding particular average. If the accident should occur through the fault or negligence of the captain. wages. The damage suffered by the goods of the cargo by the opening made in the vessel in order to drain it and prevent its sinking.Commercial Law Review Transportation Law Claudine Mayor 3. The goods or cash invested in the redemption of the vessel or of the cargo captured by enemies. the vessel.

there must be a resolution of the captain. until he is returned to the vessel or to his domicile. or negligence.” Article 812 of the Code of Commerce provides that: “In order to satisfy the amount of the gross or general averages. the merchandise transferred should be saved and the vessel should be lost. should he prefer it. The wages and victuals of the crew of a vessel chartered by the month. creek. they may be executed under his responsibility. as if the loss had originated from a gross average. 11. being on board the vessel. The damage caused to the vessel which had to be opened.” Article 817 of the Code of Commerce states that: “if in lightning a vessel on account of a storm. roadstead. their share being chargeable against the captain. If the persons interested in the cargo. The expenses of the liquidation of the average. If. and with regard to those belonging to the vessel. 8. unless the urgency of the case should be such that the time necessary for previous deliberations was wanting. if they can prove that he acted with malice. it should be decided to 33 . as a necessary measure to extinguish a fire in port. or bay. lack of skill.” Article 816 of the Code of Commerce states that: “In order that the goods jettisoned may be included in the gross average and the owners thereof be entitled to indemnity. 9. they shall not contribute to the gross average.Commercial Law Review Transportation Law Claudine Mayor 7. without prejudice to the right of the shippers to proceed against the captain before the competent judge or court. and the necessary expenses which he may incur in his imprisonment. or pirates. if opposed to the majority. part of the cargo should be transferred to lighters or barges and be lost. scuttled or broken in order to save the cargo. or in order to repair the damage caused for the common benefit. during the time that it is embargoed or detained by force majeure or by order of the government. The depreciation resulting in the value of the goods sold at arrival under stress in order to repair the vessel by reason of gross average. The wages of any member of the crew held as hostage by enemies.” Article 818 of the Code of Commerce states that: “If. by means of the inventory prepared before the departure in accordance with the first paragraph of Article 812. should consider certain measures necessary. privateers. in order to facilitate its entry into a port or roadstead. the amount thereof being distributed between the vessel and cargo from which it came. on the contrary. or the captain. all the persons having an interest in the vessel and cargo therein at the time of the occurrence of the average shall contribute. and the captain and officers or a majority of them. and after hearing the persons interested in the cargo who may be present. have not been heard. If the latter shall object. adopted after deliberation with the sailing mate and other officers of the vessel. it shall be necessary insofar as the cargo is concerned that their existence on board be proven by means of the bill of lading. the owner of said part shall be entitled to indemnity. no liability may be demanded of the salvage. 10. 12.” Article 813 of the Code of Commerce provides that: “In order to incur the expenses and cause the damages corresponding to gross average. The expenses for the treatment and subsistence of the members of the crew who may have been wounded or crippled in defending or saving the vessel.

to which the vessels saved shall contribute. The owners of the goods saved shall not be liable for the indemnification of those jettisoned. In the second case.” Article 859 of the Code of Commerce provides that: “The insurers of the vessel of the freightage. or damaged. notwithstanding the jettison of merchandise. There must be a resolution of the captain. the decision of the captain should prevail but they shall register their objections. after the vessel has been saved from the risk which gave rise to the jettison. deducting the expenses incurred in saving them. That for the common safety part of the vessel or the cargo or both is sacrificed deliberately. 2. the lender on bottomry or respondentia shall also contribute in proportion to his respective interest. in the absence of an express agreement between the contracting parties. and equipment. 4. ropes. 2. The resolution must be entered in the logbook. insofar as is required of each one of these objects respectively. should it not belong to the kind of risks excepted in the foregoing article. this loss shall be considered gross average. breakage of masts. in proportion to their respective interest.” Article 732 of the Code of Commerce provides that: “Lenders on bottomry or respondentia shall suffer. H. lost. and the irresistible and urgent causes if he acted in his own accord. no contribution whatsoever by reason of gross average shall be proper.” Article 860 of the Code of Commerce provides that: “If. Requisites: 1. Article 818 of the Code of Commerce which covers transfer of cargo to another vessel for the necessity to enter another port. Collisions 34 . Article 817 of the Code of Commerce which covers fire in the port. by all persons present in the hearing. Exceptions: General average exists even if there is no voyage yet: 1. the general average which may take place in the goods on which the loan is made. it should be lost through another accident taking place during the voyage. It must be signed. The minutes must also contain a detail of all the goods jettisoned and those injuries caused to those on board. and of the cargo shall be obliged to pay for the indemnification of the gross average. the goods saved and existing from the first risk shall continue liable to contribution by reason of the gross average according to their value in the condition in which they may be found. 3. stating the reasons and motives for the dissent.Commercial Law Review Transportation Law Claudine Mayor sink any vessel. and 2. In particular averages. If the latter disagree. adopted after a deliberation with the other officers of the vessel and after hearing all persons interested in the cargoes. That the expenses or damages should have been incurred or inflicted after taking legal steps and authority Formalities: 1.” Article 861 of the Code of Commerce provides that: “If. in the first case. That from the expenses or damages caused follows the successful saving of the vessel and cargo.” Remedy: Reimbursement General Rule: The sacrifice made must be in the course of the voyage. by the captain and all the officers of the vessel. Exposure to common danger to ship and the cargo after it has been loaded whether during voyage or port of loading and unloading. the vessel should be lost running the same risk.

Rule on liability Article 826 of the Code of Commerce provides that: “If a vessel should collide with another. Injury or death of passenger Example: Q: A and B collided. Third zone – time when collision is certain and time of impact. both vessels bear their respective damage. A was found to be negligent. 3. *An error in this zone would no longer be legally consequential. or any other member of the complement. through the fault. First zone – all time up to the moment when risk of collision begins 2. each one shall suffer its own damages. Article 828 of the Code of Commerce states that: “The provisions of the preceding article are applicable to the use in which it cannot be determined which of the two vessels has caused the collision. Only the party who has the last clear opportunity to avoid the impact is held liable. they are solidarily liable.” 35 . both parties are at fault but only one party is liable. Loss/damage to cargo c. Doctrine of Last Clear Chance provides that a negligent defendant is held liable to a negligent plaintiff or even to a plaintiff who has been grossly negligent where he should have been aware of it in the reasonable exercise of due care. and both shall be solidarily responsible for the losses and damages occasioned to their cargoes. Second zone – time between moment when risk of collision begins and moment it becomes a practical certainty. Definition Collision is an impact of two vessels both of which are moving. had in fact an opportunity later than that of the plaintiff to avoid an accident. Zones in collision (Doctrine of error in extremis) *Knowing these zones are important for liability purposes. *It is in this period where conduct of the vessels is primordial. Even if such sudden movement is wrong. who bears the consequential damages? A: A shall be liable for the consequential damages for she is at fault. Doctrine of Inscrutable Fault provides that in case of collision where it cannot be determined which between the two vessels was at fault. Damage to vessel b. each vessel shall be liable for their own losses. 2. If the suit is between a parties of contract of carriage. or lack of skill of the captain. With regard to the cargoes and passengers. It is in this zone that vessels must strictly observe nautical rules unless a departure therefrom becomes necessary to avoid imminent danger.Commercial Law Review Transportation Law Claudine Mayor 1. but both should be solidarily liable for damage to the cargo of both vessels. negligence.” *This is known as the Doctrine of Inscrutable Fault. Doctrine of Error in Extremis is a sudden movement made by a faultless vessel during the third zone of collision with another vessel which is at fault during the second zone. *This doctrine is inapplicable in the following instances: 1. In case of collision of vessels 3.” Article 827 of the Code of Commerce provides that: “If the collision is imputable to both vessels. Q: What if A and B were found to be negligent. no responsibility will fall on said faultless vessel. 1. Allision is an impact between a moving vessel and a stationary one. sailing mate. Possible damage: a. who bears the consequential damages? A: With regard to the vessel. *In this doctrine. and 2. after an expert appraisal. the owner of the vessel at fault shall indemnify the losses and damages suffered.

proceeding immediately with the proof of the facts. and if. Limited liability rule *There must be no fault on the part of the shipowner. causing them damages. The common carrier must have exercised due diligence to prevent or minimize loss before. and 4. Article 819 of the Code of Commerce provides that: “If during the voyage the captain should believe that the vessel can not continue the trip to the port of destination on account of the lack provisions. the owner of the third vessel shall indemnify the losses and damages caused. The common carrier must not have been guilty of delay. The captain shall have the deciding vote. drafting and entering the proper minutes. he shall assemble the officers and shall summon the persons interested in the cargo who may be present. The captain must have made a protest before the competent authority at the first port he touched within the 24 hours following his arrival. which shall be entered in the minutes in order that they may make use thereof in the manner they may consider advisable. and who may attend the meeting without the right to vote. Concept The arrival of a vessel at the nearest and most convenient port instead of the port of destination. 3. each vessel and its cargo shall bear its own damages.” 2. which may be proper. When improper Article 820 of the Code of Commerce provides that: “An arrival shall not be considered lawful in the following cases: 36 . and the persons interested in the cargo. or by reason of any accident of the sea disabling it to navigate. shall be understood as limited to the value of the vessel with all its appurtenances and freightage. may make the objections and protests they may deem proper. Article 831 of the Code of Commerce provides that: “If a vessel should be forced by a third vessel to collide with another. in the log book. are reserved. without opening the hatches until after this has been done. during and after the occurrence of the natural disaster. Article 837 of the Code of Commerce states that: “The civil liability incurred by the shipowners in the case prescribed in this section.” *This is known as the Doctrine of Proximate Cause Article 832 of the Code of Commerce states that: “If by reason of a storm or other cause of force majeure. which shall be signed by all. well founded fear of seizure. the injury occasioned shall be considered as particular average of the vessel run into. *The fault falls only with his crew.Commercial Law Review Transportation Law Claudine Mayor Article 829 of the Code of Commerce states that: “In the cases above mentioned the civil action of the owner against the person causing the injury as well as the criminal liabilities. through fortuitous event or force majeure. or pirates. a vessel which is properly anchored and moored should collide with those nearby. Arrival under stress 1. and should have ratified it within the same period when he arrived at the port of destination. privateers.” I. 2. if during the voyage the vessel cannot continue the trip to the port of destination.” 4. the arrival at the nearest and most convenient port shall be agreed upon.” Requisites: 1. the reason should be considered well-founded. after examining the circumstances of the case. the captain thereof being civilly liable to said owner.” Article 830 of the Code of Commerce states that: “If a vessel should collide with another. The natural disaster must have been the proximate and only cause of the loss.

Commercial Law Review Transportation Law Claudine Mayor 1. or pirates should not have been well known. and carry it out with the knowledge of the person interested in the cargo. manifest. or pirates. or his representative. he should not continue the voyage. want of foresight. justify the legality of his conduct. it should be necessary to unload. privateers. under the penalty of answering to the shipper for the price the merchandise would have brought if they had arrived in good condition at the port of destination. In a foreign port. equipped. and in the second.” 3. Custody of Cargo Article 823 of the Code of Commerce provides that: “The custody and preservation of the cargo which has been unloaded shall be intrusted to the captain.” 5. Rules in case of shipwreck Shipwreck denotes all types of loss/ wreck of a vessel at sea either by being swallowed up by the waves. and the person taking cognizance of the matter shall authorize it. shall precede the departure. 2. or lack of skill on the part of the captain exists in the act causing the damage. provided the latter is legitimate. who shall be responsible for the same. or from some erroneous order of the captain.” Article 824 of the Code of Commerce states that: “If the entire cargo or part thereof should appear to be damaged. rigged. and an entry in the book. but they shall not be liable for the damages which may be caused the shippers by reason of the arrival. 3. or if they should have been rendered useless or lost through bad stowage or negligence in their care. negligence. the sale of all or of part of the former. the captain may request of the competent judge or court. to give the authorization. by running against another vessel or thing at sea or on coast 37 . If the unloading should take place for both reasons. If the defect of the vessel should have arisen from the fact that it was not repaired. a deliberation and resolution in a meeting of the officers of the vessel and persons interested in the cargo who may be present. the expenses shall be divided proportionately between the value of the vessel and that of the cargo. and prepared in a manner suitable for the voyage. where there is one. and based on positive and provable facts. If the risk of enemies. it shall be the duty of the Philippine Consul. except in cases of force majeure. after an examination and declaration of experts. If the cause of arrival should have been the fear of enemies. the captain must request the authorization from the competent judge or court for the removal.” 6. advertisements. in accordance with the provisions of Article 624. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage according to usage and customs. in proper case. or there should be imminent danger of its being damaged. or of the consul in a proper case. if after the cause of the arrival under stress has ceased. When malice. Captain’s liability Article 825 of the Code of Commerce states that: “The captain shall be responsible for the damages caused by his delay. should there be any.” 4. Expenses Article 821 of the Code of Commerce provides that: “The expenses of an arrival under stress shall always be for the account of the shipowner or agent. 4. and other formalities required by the case. they shall be chargeable against the owners of the merchandise for whose benefit the act was performed. in accordance with the provisions contained in Article 819. In the first case. privateers. The captain shall. the ship agent and the captain shall be jointly liable. the expenses shall be for the account of the ship agent or owner.” Article 822 of the Code of Commerce provides that: “If in order to make repairs to the vessel or because there is danger that the cargo may suffer. Otherwise.

with judicial intervention. and 621. If any captain should refuse. and including it in the proceedings he must institute in accordance with the provisions contained in Article 612. of the losses and damages resulting therefrom. and any of them should be wrecked. before two sea officials. 612. and with preference over any other obligation if the merchandise should be sold.” *It is the loss of the vessel at sea as a consequence of its grounding. or running against an object in sea or on the coast.” Article 841 of the Code of Commerce states that: “If the wreck or stranding should be caused by the malice. and the net proceeds of the sale shall be safely deposited. If it is not possible to transfer to the other vessels the entire cargo of the vessel wrecked. if he can unload them at the port of which they were consigned. may be fixed by agreement or by a judicial decision. in accordance with the provisions contained in Articles 610. at the disposal of their legitimate owners.Commercial Law Review Transportation Law Claudine Mayor where the vessel is rendered incapable of navigation. even with said consent. to receive what may correspond to him.” Article 842 of the Code of Commerce states that: “The goods saved from the wreck shall be specially bound for the payment of the expenses of the respective salvage. without sufficient cause. ratifying the protest within 24 hours after arrival at the first port. In both cases the proceedings shall be with the publicity and formalities prescribed in Article 579. the competent judge or court may order the sale of the part necessary to cover the same. This shall also be done when its preservation is dangerous. the captain of the wrecked vessel shall enter a protest against him. In case he changes his course. or lack of skill of the captain. Article 840 of the Code of Commerce provides that: “The losses and deteriorations by a vessel and her cargo by reason of shipwreck or stranding shall be individually for the account of the owners. the part which may be saved belonging to them in the same proportion. 614. in the discretion of the judge or court. or when in a period of one year it should not have been possible to ascertain who are its legitimate owners. in time of war or when the port is difficult and dangerous to make. the captain may make said port if the shippers or supercargoes present and the officers and passengers of the vessel consent thereto. The owners of the cargo shall defray all the expenses of this arrival as well as the payment of the freightage which.” Article 844 of the Code of Commerce provides that: “A captain who may have taken on board the goods saved from the wreck shall continue his course to the port of destination. so that they may be delivered to the legitimate owner thereof. or because the vessel put to sea was insufficiently repaired and equipped. after taking into consideration the circumstances of the case. the ship agent or the shippers may demand indemnity of the captain for the damages caused to the vessel or to the cargo by the accident.” Article 845 of the Code of Commerce provides that: “If on the vessel there should be no person interested in the cargo who can pay the expenses and freightage corresponding to the salvage. and on arrival shall deposit the same. It occurs when the vessel sustains injuries due to a marine peril rendering her incapable of navigation. the designation thereof to be made by the captain with the concurrence of the officers of his vessel. 38 . and the amount thereof must be paid by the owners of the former before they are delivered to them. negligence. the goods of the highest value and smallest volume shall be saved first. but he may not do so.” Article 843 of the Code of Commerce states that: “If several vessels sail under convoy. the cargo saved shall be distributed among the rest in proportion to the amount which each one is able to take.

Passenger – passenger ticket 39 WARSAW CONVENTION: . If the requirement under the Convention are not complied with Transportation Documents: a. baggage or goods *The Warsaw Convention shall also apply to fortuitous events affecting transportation by aircraft performed by an air transportation enterprise. Definition Salvage .Services one person render to the owner of a ship or goods. When public policy is contradicted. or are unable to protect or secure. he is a within 3 months joint owner and if after the publication the property is lost of a salvage report. 1929 in Warsaw. shipwrecks. *Also called as round trip ticket. he must bear his otherwise the thing share saved shall be sold Acquires the right of Entitled to the possession of salvage reward for derelict for purposes the use of his vessel of a salvage claim in rendering salvage services Entitled to half of the deposit of the derelict sold.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 an impending or actual peril. 2. Air transportation 3. by his own labor. Carriage of passengers. High Contracting Party is one of the original parties to the convention. Signed on October 12. Applicability: The transportation must be: 1. if after the lapse of 3 years no claim was made Warsaw Convention is an agreement among sovereign countries concerning the regulation in a uniform manner of the conditions of international transportation by air in respect of the documents used for such transportation and of the liability of the carrier. J. *The Convention is likewise applicable to air transportation by legal entities constituted under public law of the High Contracting Parties. International transportation 2. preserving the goods or the ship which the owner or those entrusted with the care of them have either abandoned in distress at sea. or Controlling: Two territories must be High Contracting Parties *Also called as one way ticket 2. Rights and obligations of salvors and owners (Salvage Law) Salvors Owners Entitled to He does not compensation for renounce his right to services rendered the derelict Acquires a lien upon Has a right to the the property delivery of the salvaged until he is vessel or things compensated saved after the salvage is accomplished. as may be pertinent.Commercial Law Review Transportation Law Claudine Mayor *The rules on collision or allusion. 2. *The Convention does not apply to transportation performed under the terms of any international postal convention. Purpose: To protect the emerging air transportation industry and to secure the uniformity of recovery by the passengers. derelicts or recapture . Controlling: There must be a stopping place in another territory. even though that power is not a party to the Convention. Salvage 1. if there is an agreed stopping place within a territory subject to the sovereignty. International Transportation is any transportation in which the place of departure and the place of destination are situated either: 1. Within the territory of a single High Contracting Parties. provided he pays or gives a bond To all intents and Should make a claim purposes. mandate or authority of another power. can equally apply to shipwrecks. Poland. Within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or transhipment. When inapplicable: 1.

Notice of claim *A written complaint must be made within: 3 days from receipt of baggage.51 US Dollar Exception: Agreement to a higher limit In case of delay. 2. if it took place during the transportation by air. the SC held that the forum of action is a matter of jurisdiction rather than of venue. Court of its principal place of business. The date of expected arrival c. Goods to be shipped – airway bill Liability of carrier for damages: 1. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value. Prescriptive period *Action must be filed within 2 years from: a. the action for damages may be filed in the: 1. Destruction. 40 . Without the complaint. Limit of Liability: 1. The date of arrival at the destination *An intermediate place where carriage may be broken is not a place of destination. Checked-in baggage – baggage check c. 3. or 4. baggage or goods. Court where it has a place of business through which the contract has been made. b. Hand carried baggage: 1000 STR per passenger 4. Checked in baggage: General Rule: 20 STR per kilogram Exception: In case of special declaration of value and payment of a supplementary sum by consignor. the action is barred except in case of fraud on the part of the carrier. Goods to be shipped: General Rule: 17 STR per kilogram Exception: In case of special declaration of value and payment of a supplementary sum by consignor. 2. 2. The date on which the transportation stopped Venue: At the option of the plaintiff. in case of delay. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value.000 STR per passenger *1. Action for damages: 1. 14 days from receipt of baggage/goods. and 3. Court of the place of destination. 3. 7 days from receipt of goods.Commercial Law Review Transportation Law Claudine Mayor b. 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. Court of domicile of the carrier. Passenger: In case of death or injury. *In Santos III v Northwest Airline. *The complaint is a condition precedent. general rule: 100. loss or damage to any baggage or goods. 4150 STR per passenger 2. Delay in the transportation of passengers.

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