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Transportation Definition Contract of Transportation – One whereby a certain person or association of persons obligate themselves to transport persons, things

or news from one place to another for a fixed price. • Crisostomo v. CA, gr no. 138334 - By definition, a contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price. Such person or association of persons are regarded as carriers and are classified as private or special carriers and common or public carriers. It is obvious from the above definition that respondent (travel agency) is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. Parties: 1. carrier or conductor - one who binds himself to transport persons, things, or news as the case may be or one employed in or engaged in the business of carrying goods for others for hire 2. consignee - is the person to whom the shipment is to be delivered to whether by land, sea or air. 3. shipper - one who gives rise to the contract of transportation by agreeing to deliver the things or news to be transported, or to present his own person or those of other or others in the case of transportation of passengers Persons or corporations who undertake to transport or convey goods, property, or persons from one place to another, gratuitously or for hire, and are classified as private or special carriers and common or public carriers. Common Carrier 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. (ARTICLE 1732, NCC) Private Carrier Those who transport or undertake to transport in a particular instance for hire or reward. Classification: 1. As to object: (1) things; (2) persons; (3) news 2. As to place of travel: (1) land; (2) water; (3) air When is a contract of carriage perfected? As to Goods • Art. 1736 NCC

The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of article 1738. • Article 355, COGSA The liability of the carrier shall begin from the moment he receives the merchandise, in person or through a person entrusted therewith in the place indicated for their reception. As to Passengers • Dangwa Transportaion Co., Inc. v. CA, G.R. No. 95582 - by stepping and standing on the platform of the bus, is already considered a passenger and is entitled all the rights and protection pertaining to such a contractual relation. • Aboitiz Shipping Corporation V. CA, G.R. No. 84458 - The duty of the common carrier commence from the moment the person who purchases the ticket from the carrier presents himself at the proper place and in a proper manner to be transported. The relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. • China Airlines V. CA, G.R. No. 129988 – When CAL confirmed the reservations of private respondents, a contract of carriage arose between CAL and private respondents • Alitalia Airways v. CA - when an airline issues a ticket to a passenger confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger then has every right to expect that he would fly on that flight and on that date. • Japan Airlines v. Simangan, G.R. No. 170141 That respondent purchased a round trip plane ticket from JAL and was issued the corresponding boarding pass is uncontroverted. His plane ticket, boarding pass, travel authority and personal articles were subjected to rigid immigration and security procedure. After passing through said immigration and security procedure, he was allowed by JAL to enter its airplane to fly to Los Angeles, California, U.S.A. via Narita, Japan. Concisely, there was a contract of carriage between JAL and respondent. • Light Rail Transit Authority v. Navidad, G.R. No. 145804 - a contract of carriage was deemed created from the moment Navidad paid the fare at the LRT station and entered the premises of the latter, entitling Navidad to all the rights and protection under a contractual relation Laws Governing Contract of Transportation • Coastwise Shipping. 1. New Civil Code – primary law 2. Code of Commerce – governs suppletorily in the absence of Civil Code provisions

• Carriage from Foreign Ports to Philippine Ports 1. New Civil Code – primary law 2. Code of Commerce – all matters not regulated by the Civil Code 3. Carriage of Goods by Sea Act – suppletorily to the Civil Code • Carriage from Philippine Port to Foreign Ports 1. the laws of the country to which the goods are to be transported • Overland Transportation 1. Civil Code – primary law 2. Code of Commerce – suppletorily • Air Transportation 1. Civil Code 2. Code of Commerce 3. For International Carriage – Warsaw Convention Law on Common Carrier Articles 1732-1766, Civil Code Articles 349-379, Code of Commerce Civil Code Provisions on Common Carrier Definition – Article 1732 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. Common carriers vs. Private carriers: • the common carrier holds himself out in common, that is, to all persons who choose to employ him, as ready to carry For hire; no one can be a common carrier unless he has held himself out to the public as a carrier in such a manner as to render him liable to an action if he should refuse to carry for anyone who wished to employ him the private carrier agrees in some special case with some private individual to carry for hire • a common carrier is bound to carry all who offer such goods as it is accustomed to carry and tender reasonable compensation a private carrier is not bound to carry for any reason, unless it enter into a special agreement to do so for carrying them • a common carrier is a public service and is therefore subject to regulation a private carrier does not hold itself out as engaged in the business for the public, and is therefore not subject to regulation as a common carrier • the diligence required for a common carrier is extraordinary diligence the diligence required for a private carrier is ordinary diligence Test for a common carrier: (1) He must be 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 persons generally as a business, and not a casual occupation. (2) He must undertake to carry goods of the kind to which his business is confined.

(3) He must undertake to carry by the methods by which his business is conducted, and over his established roads. (4) The transportation must be for hire. The true test is whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business actually transacted, or the no. and character of the conveyances used in the employment (the test is therefore the character of the business actually carried on by the carrier.) Characteristics of common carriers: (1) The common carrier undertakes to carry for all people indifferently; he holds himself out as ready to engage in the transportation of goods for hire as a public employment and not as a casual occupation, and he undertakes to carry for all persons indifferently, within the limits of his capacity and the sphere of the business required of him, so that he is bound to serve all who apply and is liable for refusal, without sufficient reason, to do so (2) The common carrier cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in those goods Exception: for some sufficient reason, where the discrimination in such goods is reasonable and necessary (substantial grounds) (3) No monopoly is favored - the Commission has the power to say what is a reasonable compensation to the utility and to make reasonable rules and regulations for the convenience of the traveling public and to enforce them (4) Public convenience - for the best interests of the public Diligence required of Common Carriers – Articles 1733, 1755, 1756 Cases on Common Carriers and Extraordinary Diligence • De Guzman v. CA. gr no. 47822 - Under Article 1745 (6), a common carrier is held responsible — and will not be allowed to divest or to diminish such responsibility — even for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted "with grave or irresistible threat, violence or force." We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force." • Calvo v. UCPB General Insurance, gr no. 148496 - The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and “to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage,

including such methods as their nature requires.” The rule is that if the improper packing or, in this case, the defect/s in the container, is/are known to the carrier or his employees or apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for damage resulting therefrom. In this case, petitioner accepted the cargo without exception despite the apparent defects in some of the container vans. Hence, for failure of petitioner to prove that she exercised extraordinary diligence in the carriage of goods in this case or that she is exempt from liability, the presumption of negligence as provided under Art. 1735 holds. • Asia Lighterage v. CA, gr no. 147246 Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. They are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. To overcome the presumption of negligence in the case of loss, destruction or deterioration of the goods, the common carrier must prove that it exercised extraordinary diligence. There are, however, exceptions to this rule. Article 1734 of the Civil Code enumerates the instances when the presumption of negligence does not attach: Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; (5) Order or act of competent public authority. In the case at bar, the barge completely sank after its towing bits broke, resulting in the total loss of its cargo but petitioner failed to prove that the typhoon is the proximate and only cause of the loss of the goods, and that it has exercised due diligence before, during and after the occurrence of the typhoon to prevent or minimize the loss. The evidence showed that, even before the towing bits of the barge broke, it had already previously sustained damage when it hit a sunken object while docked at the Engineering Island. It even suffered a hole. Thus, when petitioner persisted to proceed with the voyage, it recklessly exposed the cargo to further damage. Accordingly, the petitioner cannot invoke the occurrence of the typhoon as force majeure to escape liability for the loss sustained by the private respondent because the officers/employees themselves of petitioner admitted that when the towing bits of the vessel broke that caused its sinking and the total loss of the cargo upon reaching the Pasig River, it was no longer affected by the typhoon. The typhoon then is not the proximate cause of the loss of the cargo; a human factor, i.e., negligence had intervened. • Philippine American General Insurance Company v. PKS Shipping Co., gr no. 149038 - found

that the loss of the goods was sufficiently established as having been due to fortuitous event, negating any liability on the part of PKS Shipping to the shipper. Article 1733 of the Civil Code requires common carriers to observe extraordinary diligence in the vigilance over the goods they carry. In case of loss, destruction or deterioration of goods, common carriers are presumed to have been at fault or to have acted negligently, and the burden of proving otherwise rests on them. From the testimonies and sworn marine protests of the respective vessel masters of Limar I and MT Iron Eagle, that there was no way by which the barge’s or the tugboat’s crew could have prevented the sinking of Limar I. The vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. • Schmitz Transport And Brokerage v. Transport Venture, gr no. 150255 - As for petitioner, for it to be relieved of liability, it should, following Article 1739 of the Civil Code, prove that it exercised due diligence to prevent or minimize the loss, before, during and after the occurrence of the storm in order that it may be exempted from liability for the loss of the goods. • Loadstar Shipping Co. v. Pioneer Asia Insurance, gr no. 157481 - As a common carrier, petitioner is required to observe extraordinary diligence in the vigilance over the goods it transports. When the goods placed in its care are lost, petitioner is presumed to have been at fault or to have acted negligently. Petitioner therefore has the burden of proving that it observed extraordinary diligence in order to avoid responsibility for the lost cargo. • Cebu Salvage v. Philippine Home Assurance, gr no. 15043 - From the nature of their business and for reasons of public policy, common carriers are bound to observe extraordinary diligence over the goods they transport according to the circumstances of each case. In the event of loss of the goods, common carriers are responsible, unless they can prove that this was brought about by the causes specified in Article 1734 of the Civil Code. In all other cases, common carriers are presumed to be at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. Petitioner was the one which contracted with MCCII for the transport of the cargo. It had control over what vessel it would use. All throughout its dealings with MCCII, it represented itself as a common carrier. The fact that it did not own the vessel it decided to use to consummate the contract of carriage did not negate its character and duties as a common carrier. The MCCII (respondent’s subrogor) could not be reasonably expected to inquire about the ownership of the vessels which petitioner carrier offered to utilize. As a practical matter, it is very difficult and often impossible for the general public to enforce its rights of action under a contract of carriage if it should be required to know who the actual owner of the vessel is. In fact, in this case, the voyage charter itself denominated petitioner as the "owner/operator" of the vessel. • Philippine Charter Insurance v. Unknown Owner of the Vessel M/V “National Honor”, et al, gr

. 112287 . The most typical. CA.by land. water. 2.” In the instant case. the charterer will generally be considered as owner for the voyage or service stipulated. 161745 . are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. Necessarily. gr no. Petitioner is clearly a common carrier. the owner pro hac vice. or air. gr no. To create a demise. it cannot thereby be concluded that the respondents knew or should have known that the middle wooden batten had a hole. 161833 – The petitioner failed to adduce any evidence to counter that of respondent ICTSI. and 7. from the nature of their business and for reasons of public policy.in a contract of private carriage.Article 1732 of the Civil Code defines a common carrier as “persons. injury or detriment to the goods. Vigilance over Goods Articles 1733-1753. anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all. Hence. “Generally. or that it was not strong enough to bear the weight of the shipment. Charter parties are classified as contracts of demise (or bareboat) and affreightment. because a demise or bareboat charter indicates a business undertaking that is private in character. private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the general public. including their respective liability for damage to the cargo. it carried passengers or goods only for those it chose under a “special contract of charter party. firms or associations engaged in the business of carrying or transporting passengers or goods. or air -. vs. water. Relevant Cases on Private Carriers 1. and 1745. private carriage does not involve the general public. Lea Mer Industries v. the Court corrects the trial court’s finding that petitioner became a private carrier when Vulcan chartered it. 6.. or that the three wooden battens under the flooring of the cargo were not defective or insufficient or inadequate. the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier.no.” Consequently. Consequently. the parties may freely stipulate their duties and obligations which perforce would be binding on them. is the charter party. is sufficient to sustain a finding of absence of defects in the merchandise. the owner of a vessel must completely and exclusively relinquish possession.Common carriers are persons. Case law has it that such statement will create a prima facie presumption only as to the external condition and not to that not open to inspection. NSGPBSML512565 issued by the respondent NSCP and accepted by the petitioner. for compensation. quality or characteristic that may cause damage. Common carriers. by land. 1733-1754 ARTICLE 1733. Malayan Insurance. according to all the circumstances of each case. offering their services to the public. although not the only form of private carriage. not by the law on common carriers. 5. The Contract in the present case was one of affreightment. that the crates were sealed and that the contents thereof could not be seen from the outside. V. The statement in the Bill of Lading. the public policy embodied therein is not contravened by stipulations in a charter party that lessen or remove the protection given by law in contracts involving common carriers. A carrier which does not qualify under the above test is deemed a private carrier.” As correctly concluded by the Court of Appeals.when this service is offered to the public for compensation. which are distinguished as follows: “Under the demise or bareboat charter of the vessel. the latter represented and warranted that the goods were properly packed. 1735. a maritime contract by which the charterer. Unlike in a contract involving a common carrier. Consequently. because it offers to the public its business of transporting goods through its vessels. firms or associations engaged in the business of carrying or transporting passengers or goods or both. the rights and obligations of VSI and NSC. or both -.” It has been held that the true test of a common carrier is the carriage of passengers or goods. that the shipment was in apparent good condition.” The distinction is significant. as shown by the fact that it was petitioner’s crew that manned the tugboat M/V Ayalit and controlled the barge Judy VII. and the pertinent law governs the present factual circumstances. The petitioner failed to rebut the testimony of Dauz. the rights and obligations of the parties to a contract of private carriage are governed principally by their stipulations. As found by the Regional Trial Court. a party other than the ship owner. On the other hand. in effect.” Absent any signs on the shipment requiring the placement of a sling cable in the mid-portion of the crate. while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756. The charterer mans the vessel with his own people and becomes. Court of Appeals and Seven Brothers Shipping Corporation . corporations. subject to liability to others for damages caused by negligence. While it is true that the crate contained machineries and spare parts. Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734. the MV Vlasons I “was not a common but a private carrier. it is undisputed that VSI did not offer its services to the general public. Nos. for all who opt to avail themselves of its transportation service for a fee. nature. Valenzuela Hardwood and Industrial Supply. command and navigation thereof to the charterer. Inc. corporations. are determined primarily by stipulations in their contract of private carriage or charter party. under Bill of Lading No. petitioner was a common carrier. and disclosed in writing the “condition. obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages. 3. National Steel Corp. Civil Code Checked in baggages – Art. Thus. provided it has space. the respondent ICTSI was not obliged to do so. There is no showing in the Bill of Lading that the shipment was in good order or condition when the carrier received the cargo.

(5) That the common carrier shall not be responsible for the acts or omission of his or its employees. No. (6) That the common carrier’s liability for acts committed by thieves. destruction. without just cause. 2. provided said public authority had power to issue the order. (4) The character of the goods or defects in the packing or in the containers. An agreement limiting the common carrier’s liability for delay on account of strikes or riots is valid. delays the transportation of the goods or changes the stipulated or usual route. ARTICLE 1739. or of a man of ordinary prudence in the vigilance over the movables transported. and (3) Reasonable. 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. during and after the occurrence of flood. the contract limiting the common carrier’s liability cannot be availed of in case of the loss. lightning. If through the order of public authority the goods are seized or destroyed. 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. ARTICLE 1746. or deterioration of goods on account of the defective condition of the car. (4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family. ARTICLE 1736. the proximate cause thereof being the negligence of the common carrier. just and not contrary to public policy. ARTICLE 1744. the common carrier must exercise due diligence to forestall or lessen the loss. shall be equitably reduced. or the faulty nature of the packing or of the containers. (3) Act or omission of the shipper or owner of the goods. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in article 1734. and received by the carrier for transportation until the same are delivered. In order that the common carrier may be exempted from responsibility. Any of the following or similar stipulations shall be considered unreasonable. ARTICLE 1745. or other natural disaster or calamity. which however. 4. the natural disaster must have been the proximate and only cause of the loss. ARTICLE 1748. if the goods are lost. the common carrier is not responsible. or deterioration of the goods. the latter shall be liable in damages. violence or force. or deterioration of the goods. (3) That the common carrier need not observe any diligence in the custody of the goods. (2) Act of the public enemy in war. If the common carrier negligently incurs in delay in transporting the goods. or to the person who has a right to receive them. If the shipper or owner merely contributed to the loss. provided it be: (1) In writing. An agreement limiting the common carrier’s liability may be annulled by the shipper or owner if the common carrier refused to carry the goods unless the former agreed to such stipulation. Common carriers are responsible for the loss. ARTICLE 1737. or deterioration of the goods to a degree less than extraordinary diligence shall be valid. ship. . unless the same is due to any of the following causes only: (1) Flood. storm or other natural disaster in order that the common carrier may be exempted from liability for the loss. or deterioration of the goods should be caused by the character of the goods. or of robbers who do not act with grave or irresistible threat. 1. However. (2) That the common carrier will not be liable for any loss. destruction. the common carrier must exercise due diligence to prevent or minimize loss before. without prejudice to the provisions of article 1738. ARTICLE 1740. earthquake. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of. The common carrier’s duty to observe extraordinary diligence in the vigilance over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit. ARTICLE 1735. 3. Even if the loss. destruction. ARTICLE 1738. a natural disaster shall not free such carrier from responsibility. In all cases other than those mentioned in Nos. destruction. destruction. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss. (7) That the common carrier is not responsible for the loss. ARTICLE 1741. vehicle. destruction. (2) Supported by a valuable consideration other than the service rendered by the common carrier. and 5 of the preceding article. unjust and contrary to public policy: (1) That the goods are transported at the risk of the owner or shipper. signed by the shipper or owner. by the carrier to the consignee. is dispensed with or diminished. or deterioration of the goods. destruction or deterioration of the goods. ARTICLE 1747. airplane or other equipment used in the contract of carriage. destroyed or deteriorated. or deterioration of the goods. whether international or civil. ARTICLE 1743. common carriers are presumed to have been at fault or to have acted negligently. unless they prove that they observed extraordinary diligence as required in article 1733. actually or constructively. destruction.ARTICLE 1734. storm. If the common carrier. unless the shipper or owner has made use of the right of stoppage in transitu. 2. ARTICLE 1742. (5) Order or act of competent public authority.

The fact that the common carrier has no competitor along the line or route. The act of a thief or robber. moral and public policy etc d. A contract fixing the sum that may be recovered by the owner or shipper for the loss. destruction. 1998. Art.  Presumption on Negligence – Art. 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. not responsible for acts or omission of its employee (except as stipulated in private carrier) . destruction or deterioration. or if the loss arises from the character of the things brought into the hotel. Art. 1735. 1739. servants or visitors. just. Art. ’98) In a contract of private carriage. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods. provided that notice was given to them. if it is reasonable and just under the circumstances. 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. 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. unless the shipper or owner declares a greater value. ARTICLE 1752. Read with Arts. with all the obligations of a good father of a family. ARTICLE 1753. not liable for any loss. delay caused by riots or strikes (Art 1748) Void Stipulations (Art 1745) a. 2005. his family. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss. and supplies usually furnished to hotel guests. or deterioration of the goods is valid. The deposit of effects made by the travelers in hotels or inns shall also be regarded as necessary. who has entered the hotel is not deemed force majeure. 2008. of the effects brought by the guests and that. 1740. reasonable. and has been fairly and freely agreed upon. 2002. Art. ARTICLE 1751. 2007. in writing and signed by the shipper b. The hotel-keeper has a right to retain the things brought into the hotel by the guest. 2001. 2003. 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 depositary of property or objects sequestrated cannot be relieved of his responsibility until the controversy which gave rise thereto has come to an end. ARTICLE 1750.ARTICLE 1749. Art. 297 SCRA 496. 1742. 2006. A judicial deposit or sequestration takes place when an attachment or seizure of property in litigation is ordered. but not that which may proceed from any force majeure. (Everett Steamship Corp Vs CA. on the part of the latter. supported by valuable consideration other than the service rendered by the carrier and c. as a security for credits on account of lodging. 274 SCRA 642. fair and not contrary to law. is binding. A stipulation that the common carrier’s liability is limited to the value of the goods appearing in the bill of lading. need not to observe any diligence in the custody of the goods d. unless the shipper or owner declares a higher or greater value is sanction by law (Art 1749) provided such stipulations are reasonable and just under the circumstances. The depositary of property sequestrated is bound to comply. Art. unless the court so orders. Art. or to their employees. they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest. 2000. exercise diligence less than required of a good father of the family or men of ordinary prudence in the vigilance of the goods e. ’97) Valid Stipulations (Art 1744) a. goods are transported at the risk of the owners b. exempting the carrier from liability for loss or damage of the cargo caused even by the employees negligence. Art. and has been freely and fairly agreed upon. 1743 Stipulations Limiting Carrier’s Liability Stipulation printed bill of lading limiting the carrier’s liability for loss or damage or destruction of a cargo to certain sum. the parties may validly stipulate that responsibility rests the charterer. damages or destruction c. destruction or deterioration. (Valenzuela Hardwood vs CA. The responsibility referred to in the two preceding articles shall include the loss of. 1734  When Presumption of negligence does not arise – Art 1734. Movable as well as immovable property may be the object of sequestration. or a part thereof. Art. just and in consonance with public policy. The keepers of hotels or inns shall be responsible for them as depositaries. Hand-carried baggages – Articles 1988. the common carrier is disputably presumed to have been negligent in case of their loss. 2000-2008 NCC Art. 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. with respect to the same. 1741. unless it is done with the use of arms or through an irresistible force. 2004.

Hence. at that moment. by the carrier to the consignee. If no adequate explanation is given as to how the deterioration. Insurance Co. Central Shipping Co. in a legal sense. the common carrier must establish by adequate proof that it exercised extraordinary diligence over the goods. To be sure. not responsible for act of robbers or thieves who did not act with grave. so that if no explanation is given as to how the injury occurred. however. customs. occurred after the cargo had been discharged from the vessel and was already under the custody of the arrastre operator. 5. RCL and EDSA Shipping failed to dispute this. To recapitulate. unreasonable and contrary to law. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier. In the present case. petitioner failed to show that such natural disaster or calamity was the proximate and only cause of the loss. 3. Relevant Cases: Vigilance over Goods 1. of North America. 2006 Delsan’s argument that it should not be held liable for the loss of diesel oil due to backflow because the same had already been actually and legally delivered to Caltex at the time it entered the shore tank holds no water. 1987 was indeed fortuitous. A fortuitous event has been defined as one which could not be foreseen. the extraordinary responsibility of common carrier lasts from the time the goods are unconditionally placed in the possession of. public policy or public order. Human agency must be entirely excluded from the cause of injury or loss. 150751 . morale. The Netherlands Insurance Co. gr. March 8. 149019. The mere proof of delivery of goods in good order to the carrier. An event is considered fortuitous if the following elements concur: . 168151 . No. 2002 . Philippine First Insurance. due to a natural disaster under Article 1734(1). not responsible for loss. a duty incident to its having the goods transported. The discharging of oil products to Caltex Bulk Depot has not yet been finished. are bound to observe extraordinary diligence in vigilance over the goods and for the safety of the passengers transported by them. v. and their arrival in the place of destination in bad order. gr no. gr no. Delsan Transport Lines v. and there need not be an express finding of negligence to hold it liable. make out a prima facie case against the carrier. Philippine American General Insurance Co. during and after the occurrence of the natural disaster. 2. Delsan is straining the issue by insisting that when the diesel oil entered into the tank of Caltex on shore. There is sufficient evidence showing that the fluctuation of the temperature in the refrigerated container van. 143133 ..Even if the weather encountered by the ship is to be deemed a natural disaster under Article 1739 of the Civil Code. irresistible force. v. the carrier must be held responsible. the damaging effects blamed on the event or phenomenon must not have been caused. Surigao del Norte on March 3. Belgian Overseas Chartering v. When the goods shipped are either lost or arrived in damaged condition. threat or violence g. MCG Marine Services. This evidence. To overcome the presumption of negligence. there was legally. common carriers. a complete delivery thereof to Caltex. ICTSI. The carrier still has in it the responsibility to guard and preserve the goods. the carrier shall be deemed to have been negligent. Since the discharging of the cargo into the depot has not yet been completed at the time of the spillage when the backflow occurred. does not disprove that the condenser fan – which caused the fluctuation of the temperature in the refrigerated container – was not damaged while the cargo was being unloaded from the ship.mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. It is incumbent upon the carrier to prove that the loss was due to accident or some other circumstances inconsistent with its liability. Delsan still has the duty to guard and to preserve the cargo. there is no reason to imply that there was actual delivery of the cargo to the consignee. It must do more than merely show that some other party could be responsible for the damage. Regional Container Lines of Singapore v. destruction or deterioration of goods on account of the defective condition of the carrier’s equipments  Void because they are unjust. actually or constructively. It had been settled that the subject cargo was still in the custody of Delsan because the discharging thereof has not yet been finished when the backflow occurred. from the nature of their business and for reasons of public policy. and received by. In other words. if a common carrier fails to exercise due diligence -. according to all the circumstances of each case. a presumption arises against the carrier of its failure to observe that diligence. or worsened by the presence of human participation.or that ordinary care that the circumstances of the particular case demand -. as recorded in the temperature chart.The findings of the Board of Marine Inquiry indicate that the attendance of strong winds and huge waves while the M/V Peatheray Patrick-G was sailing through Cortes. August 15. the carrier for transportation until the same are delivered.f.to prevent or minimize the loss before. or which though foreseen. the loss or the destruction of the goods happened. American Home Assurance. contributed to. 4. the transporter shall be held responsible. gr no.A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported. or to a person who has the right to receive them. RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by law over the goods they transported. is inevitable. The defense of fortuitous event or natural disaster cannot be successfully made when the injury could have been avoided by human precaution. The loss or injury is not.

it is expected to observe extraordinary diligence in the handling of goods placed in its possession for transport. or deterioration of the goods . i. keel over. the Captain confirmed with the Coast Guard that the weather condition would permit the safe travel of the vessel to Bislig. . . the tug must be free from any previous negligence or misconduct by which that loss or damage may have been occasioned. private respondents cannot be held liable for the said loss. 1739. the calamity which caused the loss of the cargoes was not unforeseen nor was it unavoidable. or other natural disaster in order that the common carrier may be exempted from liability for the loss. It was the presence of the strong winds and enormous waves which caused the vessel to list. Since the presence of strong winds and enormous waves at Cortes. damage to the packaging is not tantamount to damage to the cargo. It must be stressed that in the case at bar. were inevitable. if any. as is commonly believed but it must be one impossible to foresee or to avoid. it must be impossible to avoid. or the failure of the debtor to comply with his obligations. during and after the occurrence of flood. . However. ANCO could not escape liability to respondent SMC. There must have been no contributory negligence on the part of the common carrier. thus. Surigao del Sur. storm. the natural disaster should have been the proximate and only cause of the loss.e. making said blatant negligence the proximate cause of the loss of the cargoes. gr no. Antique. Even if ANCO’s representatives wanted to transfer it. First Lepanto Taisho Insurance Corporation. In order that the common carrier may be exempted from responsibility. events that could not be foreseen. but to no avail.. managed to transfer to another place. he could not be expected to have foreseen the unfavorable weather condition that awaited the vessel in Cortes. (c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. Such failure to ship the cargo to its final destination because of the ruined packaging. 1987 was shown to be the proximate and only cause of the sinking of the M/V Peatheray Patrick-G and the loss of the cargo belonging to San Miguel Corporation. although the immediate or proximate cause of the loss in any given instance may have been what is termed an act of God. Petitioner-carrier seems to belabor under the misapprehension that a distinction must be made between the cargo packaging and the contents of the cargo. or if it can be foreseen. In fact. it was adequately shown that before the M/V Peatheray Patrick-G left the port of Mandaue City. the common carrier must exercise due diligence to prevent or minimize loss before. 7. 6. citing the following portion of the decision of the Board of Marine Inquiry. Thus. Caso fortuito or force majeure (which in law are identical insofar as they exempt an obligor from liability) by definition. they no longer had any means to do so as the tugboat M/T ANCO had already departed. As held in the case of Limpangco Sons v. The falling of the crate during the unloading is evidence of petitioner-carrier’s negligence in handling the cargo. As a common carrier. and (d) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor. the other vessels in the port of San Jose. and consequently lose the cargo contained therein. This is erroneous. gr no. or which though foreseen. The records clearly show the failure of petitioners’ representatives to exercise the extraordinary degree of diligence mandated by law. 137775 . and again in failing to heed the request of SMC’s representatives to have the barge transferred to a safer place. xxx In the case at bar. (b) it must be impossible to foresee the event which constitutes the caso fortuito. the natural disaster must have been the proximate and only cause of the loss. Sulpicio Lines v. The captain of the tugboat should have had the foresight not to leave the barge alone considering the pending storm. CA. resulted in damages on the part of the owner of the goods. It is therefore not enough that the event should not have been foreseen or anticipated. are extraordinary events not foreseeable or avoidable. For. with due regard to all circumstances. leaving the barge to its own devices. a circumstance which prompted SMC’s District Sales Supervisor to request that the D/B Lucio be likewise transferred. Yangco Steamship Co. Therefore. Surigao del Sur on March 3. it is not excused. To be exempt from liability because of an act of God. FGU Insurance v.xxx (a) the cause of the unforeseen and unexpected occurrence.Petitioner-carrier contends that its liability. as was done by the other vessels in the port. In this case. there was blatant negligence on the part of M/T ANCO’s crewmembers. The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence. is only to the extent of the cargo damage or loss and should not include the lack of fitness of the shipment for transport to Singapore due to the damaged packing. if the tug unnecessarily exposed the two to such accident by any culpable act or omission of its own. The D/B Lucio had no engine and could not maneuver by itself. destruction. the damage sustained by the packaging of the cargo while in petitioner-carrier’s custody resulted in its unfitness to be transported to its consignee in Singapore. yet. a natural disaster. Surigao del Sur. A common carrier is bound to transport its cargo and its passengers safely "as far as human care and foresight can provide.: . According to it. as correctly pointed out by the appellate court. The appellate court likewise found that there was no negligence on the part of the crew of the M/V Peatheray Patrick-G.Art. using the utmost diligence of a very cautious person. first in leaving the engine-less barge D/B Lucio at the mercy of the storm without the assistance of the tugboat. indeed. 140349 . must be independent of human will. While the loss of the cargoes was admittedly caused by the typhoon Sisang. the diligence of a good paterfamilias established in respect of the ordinary relations between members of society.” The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding the damage to. . . To be exempted from responsibility.

they had the right to be placed on Flight 27. However. Condition 9 in the agreement states that a “x x x carrier may without notice substitute alternate carriers or aircraft. destroyed or had deteriorated. It requires common carriers to render service with the greatest skill and foresight and “to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment. nothing there permits shuttling passengers -. which are printed on the airline ticket. 113003 . and whose route they might have preferred to the more circuitous one unilaterally chosen for them by respondent. including such methods as their nature requires. much less agreed to or been prepared for. and to exercise due care in the handling and stowage. The burden of proving it necessarily fell on respondent. the goods entrusted to it for safe carriage and delivery. There are human factors involved in the situation. but its substitution. This responsibility it failed to discharge. 151783. No explanation whatsoever was given to petitioners as to why they were not similarly allowed to do so. Savellano v. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. we hold that in the absence of a demonstrated necessity thereof and their rerouting to Los Angeles and Seoul as stopping places without their consent. after the distressed flight landed in Seattle.in this case. the common carrier must prove that they observed extraordinary diligence as required in Article 1733 of the Civil Code. respondent. Seattle -.” The basis of the Complaint was the way respondent allegedly treated petitioners like puppets that could be shuttled to Manila via Los Angeles and Seoul without their consent. Its employees merely hustled the confused petitioners into boarding one plane after another without giving the latter a choice from other courses of action that were available. respondent committed a breach of the contract of carriage. It unilaterally decided on the most expedient way for them to reach their final destination. Furthermore. In the absence of evidence as to the actual situation. so we will not delve into this matter. After an examination of the conditions printed on the airline ticket. Yet it may also be that there were other carriers that could have accommodated them for these sectors of their journey. Northwest Airlines. in determining whether petitioners’ rights were violated.” A case of necessity must first be proven. they were being discriminated against. Petitioner-carrier miserably failed to adduce any shred of evidence of the required extraordinary diligence to overcome the presumption that it was negligent in transporting the cargo. Petitioners do not question the stop in Seattle. To overcome the presumption of liability for loss. resulting in the conclusion that it could not explode within five days’ use.without so much as a by yourleave -. Thus. Northwest failed to show a “case of necessity” for changing the stopping place from Tokyo to Los Angeles and Seoul. Be that as it may. Explosion of tire: Yobido v. Since the conditions enumerated on the ticket do not specifically allow it to change stopping places or to fly the passengers to alternate connecting cities without consulting them. True. gr no. the Court is hard pressed to determine if there was a “case of necessity” sanctioning the alteration of the Tokyo stopping place in the case of petitioners. They add that in being treated differently and shabbily. should be construed against the party that caused its preparation -in this case. Petitioners’ contract of carriage with Northwest was for the San Francisco-Tokyo(Narita)-Manila flights scheduled for October 27. CA. not the cancellation of the original itinerary. we must look into its provisions. common carriers are presumed to have been at fault or to have acted negligently in case the goods transported by them are lost. The airplane engine trouble that developed during the flight bound for Tokyo from San Francisco definitely merited the “necessity” of landing the plane at some place for repair -. Under Articles 1735 and 1752 of the Civil Code. 8. x x x. when the shipment suffered damages as it was being unloaded.to stopping places that they have not been previously notified of. They insist that.or destruction of. the change in petitioners’ flight itinerary does not fall under the situation covered by the phrase “may alter or omit stopping places shown on the ticket in case of necessity. which had a connecting flight from Japan to Manila.” Thus. and may alter or omit stopping places shown on the ticket in case of necessity. It is a fact that some of the passengers on the distressed flight continued on to the Tokyo (Narita) connecting place. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality. then it must be construed to mean that such unilateral change was not permitted. It may be that the Northwest connecting flight from Seattle to Tokyo to Manila could no longer accommodate them. the explosion of the new tire may not be considered a fortuitous event. This itinerary was not followed when the aircraft used for the first segment of the journey developed engine trouble. Undeniably. petitioner-carrier is presumed to have been negligent in the handling of the damaged cargo. being one of adhesion. which they allegedly had not contracted for or agreed to. Substituting aircrafts or carriers without notice is entirely different from changing stopping places or connecting cities without notice. The ambiguities in the contract. it is settled that an accident . what other stopping places petitioners should take and when they should fly. it did not take the time to explain how it would be meeting its contractual obligation to transport them to their final destination. like the other passengers of the distressed flight. Petitioners stress that they are questioning. destruction or deterioration of goods under Article 1735. 1991. gr no.Under the circumstances of this case. Condition 9 on the ticket allowed respondent to substitute alternate carriers or aircraft without notice. A contract is the law between the parties. we find nothing there authorizing Northwest to decide unilaterally. Thus.but not that of shuttling petitioners to other connecting points thereafter without their consent.

”   Duration of Common Carrier’s Liability – Articles 1736-1738 NCC Stipulations Limiting Common Carrier’s Liability – Articles 1744-1754 NCC 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. When a passenger is carried gratuitously. if the proximate cause thereof is the negligence of the common carrier. . 2201. Contributory Negligence Art. 1760. (3) Nominal. but not for willful acts or gross negligence. In contracts and quasi contracts. Liability for acts of carrier’s employees Art. (2) Moral. a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. This Court has had occasion to state: “While it may be true that the tire that blew-up was still good because the grooves of the tire were still visible. with a due regard for all the circumstances. and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. 1764.caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages. or otherwise. but the amount of damages shall be equitably reduced. Moreover. by the posting of notices. 1758. The common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident. Damages in cases comprised in this Section shall be awarded with the title XVIII of this book concerning damages. common carriers are presumed to have been at fault or to have acted negligently. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries. Articles Related on Actual or compensatory damages Art. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. a stipulation limiting the common carrier's liability for negligence is valid. 1762. unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. (4) Temperate or moderate. Damages may be: (1) Actual or compensatory. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees. although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. Art. Such compensation referred to as actual or compensatory damages. Except as provided by law or by stipulation. In case of death of or injuries to passengers. Art. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation. No evidence was presented to show that the accident was due to adverse road conditions or that precautions were taken by the jeepney driver to compensate for any conditions liable to cause accidents. Damages Art. could have been caused by too much air pressure injected into the tire coupled by the fact that the jeepney was overloaded and speeding at the time of the accident. 1761. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. (5) Liquidated. by statements on tickets. 1763. Safety of passengers Nature of Obligation of Common Carriers Art. Liability for acts of co-passengers and strangers Art. the damages for which the obligor who acted in good faith is liable shall be those that are natural and probable consequences of the breach of the obligation. (6) Exemplary or corrective. 1759. by the posting of notices. 1755. 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. concerning Damages. 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. Stipulations limiting common carrier’s liability Art. using the utmost diligence of very cautious persons. therefore. 1764. Effect of gratuitous carriage Art. The passenger must observe the diligence of a good father of a family to avoid injury to himself. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide. 1756. Art. Liability of Common Carriers and Presumption of Negligence Art. Art. 1757. 2197. 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. this fact alone does not make the explosion of the tire a fortuitous event. by statements on the tickets or otherwise. Art. The reduction of fare does not justify any limitation of the common carrier's liability. 2199. The sudden blowing-up.

temperate. a party can be held liable for such if exemplary damages are awarded (Article 2208. 2203. based on Article 2206 of the Civil Code. liquidated or compensatory damages. The law authorizes recovery of attorney's fees where the defendant's act or omission has compelled the plaintiff to litigate with third person or to incur expenses to protect his interest. Nueva Ecija on January 27. and this judicial discretion is largely addressed towards tempering any tendency to award excessive damages so much so that it stands vulnerable to and actually magnetizes. and was. oppressive or malevolent manner. However. but it is not necessary that he prove the monetary value thereof. are bound to observe extraordinary diligence for the safety of the passengers transported by them. Stated otherwise. lifestyle. like petitioner bus company. wounded feelings. attacks as to its being a result of passion. common carriers. in view of the provisions of Articles 2219 and 2220 of the New Civil Code. Article 1759 of the Civil Code explicitly states that the common carrier is liable for the death or injury to passengers through the negligence or willful acts of its employees. since the bus bumped a tree and a house. New Civil Code). Indemnity for death (See Article 2206) The indemnity for death caused by a quasi-delict used to be pegged at P3. It cannot. The party suffering loss or injury must exercise diligence of a good father of a family to minimize the damages resulting from the act or omission in question. 28 They are bound to carry the passengers safely as far as human care and foresight can provide. the amount has been gradually increased through the years because of the declining value of our currency. according to all the circumstances of each case. although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. social humiliation. through its bus driver. even if petitioner was able to prove that it exercised the diligence of a good father of the family in the . the amount recoverable is that portion of the earnings of the deceased which the beneficiary would have received — the net earnings of the deceased." Further. Hence. 162104 . however. Moral Damages Moral damages include moral suffering. Article 1756 of the Civil Code states that "[i]n case of death of or injuries to passengers. Article 1759 of the Civil Code provides that "[c]ommon carriers are liable for the death or injury to passengers through the negligence or willful acts of the former's employees. bad faith.Under the Civil Code. which takes into consideration the nature of the victim’s work. the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. The award of damages as ‘well as attorney’s fees lies upon the discretion of the court in the context of the facts and circumstances of each case. Anent a breach of a contract of common carriage. therefore. from the nature of their business and for reasons of public policy. the court having to decide whether or not they should be adjudicated. Transport Corporation v. mental anguish. with due regard for all the circumstances." In this case. even if death does not result. Relevant Cases on Safety of Passengers: • R. failed to observe extraordinary diligence.In case of fraud. moral damages may be awarded if the common carrier acted fraudulently or in bad faith. In contracts and quasi-contracts. Pante. and caused physical injuries to respondent. Before the court may consider an award for exemplary damages. It is imposed by way of example or correction for the public good. The exceptions are (1) where the mishap results in the death of a passenger. in addition to moral. and that such liability does not cease upon proof that the common carrier exercised all the diligence of a good father of a family in the selection and supervision of its employees. as in the instant case. Exemplary Damages Exemplary damages is not a matter of right. unless they prove that they observed extraordinary diligence as prescribed by Articles 1733 and 1755. 1995. besmirched reputation. fright. The second refers to the victim’s earning capacity minus the necessary living expenses. They may be recovered in the cases enumerated in Article 2219 of the Civil Code. age and state of health prior to the accident. the plaintiff must first show that he is entitled to moral. prejudice or corruption. Attorney’s Fees Although attorney’s fees are generally not recoverable. exemplary damages may be awarded if the defendant acted in a wanton fraudulent. using the utmost diligence of very cautious persons. or where the court deems it just and equitable. and (2) where it is proved that the carrier was guilty of fraud or bad faith. gr no. temperate or compensatory damages. not of heir.000. 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. reckless. The first factor refers to the life expectancy. negligent in transporting the passengers of the bus safely to Gapan. moral shock. At present. the testimonial evidence of respondent showed that petitioner. Loss of Earning Capacity Computation of loss of earning capacity is based on life expectancy of deceased.000. serious anxiety. common carriers are presumed to have been at fault or to have acted negligently. prevailing jurisprudence fixes the amount at P50. or similar injury. malice or wanton attitude. Moral damages are not recoverable in actions for damages predicated on a breach of the contract of transportation. be considered as a matter of right. Art.  The award for loss of earning capacity is based on two factors: (1) the number of years on which the computation of damages is based and (2) the rate at which the loss sustained by the heirs is fixed.

• Victory Liner. In a contract of carriage. These are violations of the Land Transportation and Traffic Code. But. A common carrier is bound to carry its passengers safely as far as human care and foresight can provide. petitioner breached its contract of carriage with private respondents. 1733 and 1755 of the Code. a contract of carriage arises. The driver of jeepney did not carry “safely as far as human care and foresight could provide. petitioner failed to transport Deanna and Nikolai from San Francisco to Los Angeles on the day of their arrival at San Francisco. Navidad. the carrier may be held liable for a breach of contract of carriage. petitioner obliged itself (1) to transport Deanna and Nikolai. The petitioner's driver took in more passengers than the allowed seating capacity of the jeepney. not in actions involving breach of contract. gr no. CA. some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. Inc. the courts below correctly ruled that petitioner was guilty of breach of contract of carriage. When an airline issues a ticket to a passenger. The doctrine of proximate cause is applicable only in actions for quasi-delict. • Bachelor Express. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. CA. This statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence. This provision necessarily shifts to the common carrier the burden of proof. First. In the instant case. there is no evidence to rebut the statutory presumption that the proximate cause of Marie Grace’s death was the negligence of petitioner.Private respondents and petitioner entered into a contract of air carriage when the former purchased two plane tickets from the latter. LRTA contended that it was an act of a stranger that could not have been foreseen or prevented. the jeepney was not properly parked. 159636 The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. Insofar as contracts of carriage are concerned. Thus. 159636 Anent the second issue. he dies or is injured. Hence. The staff of United Airways 996 refused to take aboard Deanna and Nikolai for their connecting flight to Los Angeles because petitioner's personnel in San Francisco could not produce the indemnity bond accomplished and submitted by private respondents. where there is a pre-existing contractual relation between the parties. confirmed for a particular flight on a certain date. v. 145804 A security guard assaulted Navidad. gr no. Clearly then. it is not enough that the accident was caused by force majeure. which caused the latter to fall on the tracks. However. its rear portion being exposed about two meters from the broad shoulders of the highway. as unaccompanied minors. CA GR NO. 122039 .selection and supervision of its bus driver. and facing the middle of the highway in a diagonal angle. using the utmost diligence of very cautious persons. petitioner was correctly found liable for breach of contract of carriage. there is no assumption of risk by the passenger. Inc. The law requires common carriers to carry passengers safely using the . CA. It was only on the following day that Deanna and Nikolai were able to leave San Francisco and arrive at Los Angeles via another airline. in order that a common carrier may be absolved from liability in case of force majeure. 1755. and (2) upon the arrival of Deanna and Nikolai in San Francisco Airport on 3 May 1980. GR no. In case of death or injuries to passengers. Under this contract. If the passenger is not so transported or if in the process of transporting. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure. on 2 May 1980 from Manila to San Francisco through one of its planes. Therefore. • Light Rail Transit Authority v. The passenger has every right to expect that he be transported on that flight and on that date. it is still liable to respondent for the physical injuries he sustained due to the vehicular accident. gr no. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. Deanna and Nikolai were stranded in San Francisco and were forced to stay there overnight. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. and it becomes the airline's obligation to carry him and his luggage safely to the agreed destination without delay. 123238 . Unless the presumption is rebutted. using the utmost diligence of very cautious persons. and the function of the law is merely to regulate the relation thus created. the obligation is created by law itself. with due regard to all the circumstances. The LRTA added that the appellate court’s conclusion on the existence of an employer-employee relationship between Roman and LRTA lacked basis because Roman himself had testified being an employee of Metro Transit and not of the LRTA.It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. In such a case. it is presumed that the common carrier was at fault or was negligent when a passenger dies or is injured. • Calalas v. the court need not even make an express finding of fault or negligence on the part of the common carrier. Western Airlines. with due regard for all the circumstances" as required by Art. Flight 106. it is the parties themselves who create the obligation. v. to transport them on that same day from San Francisco to Los Angeles via a connecting flight on United Airways 996. • PAL V. As it was. Art.

comprehends the handling of cargo on the wharf or between the establishment of the consignee or shipper and the ship's tackle. petitioner did nothing to protect the safety of its passengers. the seizure of the bus by Mananggolo and his men was made possible. from those of almost every legal or contractual relation. the CC is under the absolute duty of protecting his passengers from assault or insult by himself or his servants. respect. What apparently angered them was his attempt to help the driver of the bus by pleading for his life. injurious language. And this. according to the appellate court. The contract of air carriage. a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm to undertake the task. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. In the present case. In either case. gr no. have failed to show. the presumption would be that it has been at fault. a carrier is presumed to have been at fault or been negligent. . In the discharge of its commitment to ensure the safety of passengers. In the absence of satisfactory explanation by the carrier on how the accident occurred. that any rude or discourteous conduct on the part of its employees towards a passenger gives the latter an action for damages against the CC. indignities and abuses from such employees. CA. The responsibility of the arrastre operator lasts until the delivery of the cargo to the consignee.There is a distinction between an arrastre and a stevedore. Its business is mainly with the traveling public. The responsibility of the stevedore ends upon the loading and stowing of the cargo in the vessel. 28589 . Held: A passenger is entitled to courteous treatment from the carrier and its EEs and failure of the common carrier to comply with this obligation will entitle the passenger to damages. Therefore. The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim arises from the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. and by simple proof of injury. No contributory negligence could be attributed to the deceased. The service is usually performed by longshoremen. that the necessary precautions would be taken. such as frisking passengers and inspecting their baggages. Passengers do not contract merely for transportation. Inc. 119756 . therefore. Under the circumstances. the law implies a promise and imposes upon the CC the corresponding duty of protection and courteous treatment. • Fortune Express v. generates a relation attended with a public duty. • Mindanao Terminal and Brokerage Service.utmost diligence of very cautious persons with due regard for all circumstances. before allowing them on board could have been employed without violating the passenger's constitutional rights. The relation between common carrier and passenger involves special and peculiar obligations and duties. differing in kind and degree. Pan American World Airways. gr no. preferably with non-intrusive gadgets such as metal detectors. 162467 . Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager. The assailant's motive was to retaliate for the loss of life of two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two Maranaos were riding. a Spanish word which refers to hauling of cargo. On the other hand. It invites people to avail of the comforts and advantages it offers. Diosdado Bravo. In case of such death or injury. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of wilfull acts of other passengers. the common carrier is not relieved of its responsibilities under the contract of carriage. gr no. The statutory provisions render a common carrier liable for death of or injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or of strangers if the common carrier’s employees through the exercise of due diligence could have prevented or stopped the act or omission. They have a right to be treated by the CC's employees with kindness. The acts of Maranaos could not be considered as caso fortuito because there was already a warning by the PC. • Zulueta v. the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure. So it is.Filipino passenger who went to relieve himself was berated by the captain for coming back late to the plane and was called a monkey. v. Phoenix Assurance. because of the relation which an air carrier sustains with the public.Art. stevedoring refers to the handling of the cargo in the holds of the vessel or between the ship's tackle and the holds of the vessel. The armed men actually allowed deceased to retrieve something from the bus. it is clear that because of the negligence of petitioner's employees. simple precautionary measures to protect the safety of passengers. Such duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. Arrastre. if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. They are entitled to be protected against personal misconduct. an exception from the general rule that negligence must be proved. On account of the peculiar situation of the parties. courtesy and due consideration. Neglect or malfeasance of the CC's employees naturally could give ground for an action for damages. A contract to transport passengers is quite different in kind and degree from any other contractual relation. which petitioners.

they had priority for upgrading of their seat accommodation at no extra cost when an opportunity arises. The petitioner's argument that it is not a designated carrier in the original conjunction tickets and that it issued its own ticket is not decisive of its liability. reservations by mistake and thereafter deliberately and intentionally withheld from plaintiffs or their travel agent the fact of said cancellation. it was never the custodian of the shipment of Del Monte Produce. In the present case.through its agents . the public is adequately protected by our laws on contract and on quasi-delict. They clearly waived their priority or preference when they asked that other passengers be given the upgrade. The new ticket was simply a replacement for the unused portion of the conjunction ticket. Vasquez. Geneva to New York. i e . CA. continuous trip. as it turned out in this case. the passenger can only sue BA and not PAL. 121824 . as its subcontractor or agent. both tickets being for the same amount of US$2. the Vazquezes had every right to decline the upgrade and insist on the Business Class accommodation they had booked for and which was designated in their boarding passes.A common carrier has a peculiar relationship with and an exacting responsibility to its passengers. The latter merely endorsing the Manila to Hong Kong log of the former’s journey to PAL. one would appreciate and accept an upgrading.The contract of transportation was exclusively between the passenger and common carrier BA.It is not disputed that Mindanao Terminal was performing purely stevedoring function while the private respondent in the Summa case was performing arrastre function. Cathay breached its contract of carriage with the Vazquezes.. 116044-45 . By constituting itself as an agent of the principal carrier the petitioner's undertaking should be taken as part of a single operation under the contract of carriage executed by the private respondent and Singapore Airlines in Manila. Conditions of contracts were one of continuous air transportation. gr no. As such. including that issued by the petitioner. when in fact they had none. China Airlines v. GR 150843 . By insisting on the upgrade. the petitioner tacitly recognized its commitment under the IATA pool arrangement to act as agent of the principal contracting airline. Well-settled rule that an agent is also responsible for any negligence in the performance of its function and is liable for damages which the principal may suffer by reason of its negligent act. Thus. for it would mean a better accommodation. as to the segment of the trip the petitioner agreed to undertake. Chiok. letting them go on believing that their first class reservations stood valid and confirmed. gr no. The loading and stowing of cargoes would not have a far reaching public ramification as that of a common carrier and a warehouseman. Pan American World Airways. A stevedore is not a common carrier for it does not transport goods or passengers. gr no. Booking and reservation among airline members are allowed even by telephone and it has become an accepted practice among them. when the petitioner accepted the unused portion of the conjunction tickets. defendant wilfully and knowingly placed itself into the position of having to breach its aforesaid contracts with plaintiffs should there be no lastminute cancellation by other passengers before flight time. constitutes a single operation. as a stevedore. the petitioner thereby assumed the obligation to take the place of the carrier originally designated in the original conjunction ticket. entered it in the IATA clearing house and undertook to transport the private respondent over the route covered by the unused portion of the conjunction tickets. British Airways v. Members of the IATA are under a general pool partnership agreement wherein they act as agent of each other in the issuance of tickets to contracted passengers to boost ticket sales worldwide and at the same time provide passengers easy access to airlines which are otherwise inaccessible in some parts of the world. 2. since the latter was not a party in the contract. American Airlines v. It should not have been imposed on them over their vehement objection. The public policy considerations in legally imposing upon a common carrier or a warehouseman a higher degree of diligence is not present in a stevedoring outfit which mainly provides labor in loading and stowing of cargoes for its clients. Liability of Successive Air Carriers 1. A member airline which enters into a contract of carriage consisting of a series of trips to be performed by different carriers is authorized to receive the fare for the whole trip and through the required process of interline settlement of accounts by way of the IATA clearing house an airline is duly compensated for the segment of the trip serviced.The contract of carriage between the private respondent and Singapore Airlines although performed by different carriers under a series of airline tickets. Such actuation of defendant may indeed have been prompted by nothing more than the promotion of its self-interest in holding on to Senator Lopez and party as passengers . gr no.760 and having the same points of departure and destination. Singapore Airlines.first cancelled plaintiffs. The Vazquezes should have been consulted first whether they wanted to avail themselves of the privilege or would consent to a change of seat accommodation before their seat assignments were given to other passengers. just like other privileges. But. Mindanao Terminal. But. Involuntary upgrading of seats to first class Cathay Pacific v. 3. 22415 From the evidence of defendant it is in effect admitted that defendant . was only charged with the loading and stowing of the cargoes from the pier to the ship’s cargo hold. CA. For reasons of public interest and policy. In so misleading plaintiffs into purchasing first class tickets in the conviction that they had confirmed reservations for the same. 152122 . Failure to accommodate at first class seats Lopez v. When an action is based on breach of contract of carriage. the ticket-issuing airline acts as principal in a contract of carriage and is thus liable for the acts and the omissions of any errant carrier to which it may have endorsed any sector of the entire. it is not akin to a warehouseman for it does not store goods for profit. such priority could be waived. whatever their reason was and however odd it might be. Normally.

For bad faith means a breach of a known duty through some motive of interest or ill-will. Jr. Such willful-non-disclosure of the cancellation or pretense that the reservations for plaintiffs stood and not simply the erroneous cancellation itself . In abandoning his lane. unless the emergency was brought by his own negligence. The totality of evidence shows that the death of petitioner’s spouse was caused by the reckless negligence of the driver of the Isuzu trailer truck which lost its brakes and bumped the Celyrosa Express bus. Lapanday v. not liable for death of passenger Mariano. in breach of its known duty.While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them. In other words.in its flight and foreclosing on their chances to seek the services of other airlines that may have been able to afford them first class accommodations. And. The resulting damage to the Tamaraw jeepney. but that its liability for personal injuries sustained by its passenger rests upon its negligence. he did not see to it first that the opposite lane was free of oncoming traffic and was available for a safe passage. All the time. from introducing evidence to fasten the negligence on the former. petitioner must be held liable. merely relieves the latter. in this respect defendant clearly acted in bad faith. But as already stated on this point. bolsters this conclusion that petitioner was speeding. Article 1756 of the Civil Code. unrebutted by petitioner. in creating a presumption of fault or negligence on the part of the common carrier when its passenger is injured. gr no. however. gr no. at the point where the head and chassis were separated from the body. What constitutes compliance with said duty is adjudged with due regard to all the circumstances. make the carrier an insurer of the absolute safety of its passengers. 140698 . however. Doctrine of Last Clear Chance Engada v. it does not. as above-stated. 153076 .Since both parties are at fault in this case. respondent airline cannot be held liable for damages. Petitioner was negligent in several ways. CA. Callejas. gr no. (Emergency Rule) The doctrine of last clear chance states that a person who has the last clear chance or opportunity of avoiding an accident. 166640 . therefore. Article 1755 of the Civil Code qualifies the duty of extraordinary care. In fine. petitioner cannot succeed in his contention that respondents failed to overcome the presumption of negligence against them. At the time plaintiffs bought their tickets. Being a mere presumption. its failure to exercise the degree of diligence that the law requires. what has been shown is the presence of an emergency and the proper application of the emergency rule. in legal contemplation such conduct already amounts to action in bad faith. The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably later than that of the other. we can only infer from the law the intention of the Code Commission and Congress to curb the recklessness of drivers and operators of common carriers in the conduct of their business. Hence. defendant. They were not confirmed passengers and their names were not listed in the passenger manifest. is not guilty of negligence if he fails to undertake what subsequently and upon reflection may appear to be a better solution. he had full control of the situation since he was in a position to observe the vehicle in front of him. In the case at bar. notwithstanding the negligent acts of his opponent. because the presumption stands in the place of evidence. the one who had the last clear opportunity to avoid the loss but failed to do so is chargeable with the loss. This was testified to by Seyan and Iran. There was no clear chance to speak of. for the time being. Deocampo had the last clear chance to avoid the collision. Deocampo had the responsibility of avoiding bumping the vehicle in front of him. Petitioner’s acts had put Iran in an emergency situation which forced him to act quickly. petitioners’ ticket were on "RQ" status. gr no. and his negligence was the proximate cause of the collision.is the factor to which is attributable the breach of the resulting contracts. Thus. Common Carrier not an insurer of passenger’s safety. the doctrine of last clear chance applies. denied Iran time and opportunity to ponder the situation at all. this is not a case where Pan Am bound itself to transport petitioners and thereafter reneged on its obligation. owned and operated by respondents. Iran could not be faulted when in his attempt to avoid the pick-up. or that the injury suffered by the passenger was solely due to a fortuitous event. Instead. he swerved to his left. In addition. v. Petitioner’s act of swerving to the Tamaraw’s lane at a distance of 30 meters from it and driving the Isuzu pick-up at a fast speed as it approached the Tamaraw. vigilance and precaution in the carriage of passengers by common carriers to only such as human care and foresight can provide. For failing to observe the duty of diligence and care imposed on drivers of vehicles abandoning their lane. 123560 – In the case at bar. A U-turn is done at a much slower speed . or where it is impossible to determine whose fault or negligence caused the loss. Since Deocampo was driving the rear vehicle. no convincing evidence was adduced by petitioner to support his invocation of the above cited doctrine. petitioner was running at a fast clip while traversing this lane. Angala.In the present case. An individual who suddenly finds himself in a situation of danger and is required to act without much time to consider the best means that may be adopted to avoid the impending danger. made plaintiffs believe that their reservation had not been cancelled. there was only a distance of 30 meters from the Tamaraw jeepney when the Isuzu pick-up abandoned its lane and swerved to the left of the center line. the same is rebuttable by proof that the common carrier had exercised extraordinary diligence as required by law in the performance of its contractual obligation. In this case. Pan American World Airways. is considered in law solely responsible for the consequences of the accident. Unconfirmed tickets Spouses Yu Eng Cho v. it is clear that neither the law nor the nature of the business of a transportation company makes it an insurer of the passenger's safety.

One who has boarded by fraud. time and special conditions of the carriage. ARTICLE 350. 2. may be diverse. 5. v. 7. ordered the passengers to get off the bus as they intended to burn it and its driver. The armed men actually allowed Atty. But Atty. What apparently angered them was his attempt to help the driver of the bus by pleading for his life. surname and residence of the shipper. Remains on a carrier for an unreasonable length of time after he has been afforded every safe opportunity to alight Provisions of the CODE OF COMMERCE ON CARRIERS ARTICLES 349-379. Estacion v. CODE OF COMMERCE Commercial Contracts for Transportation Overland ARTICLE 349. 3. After the contract has been complied with. Noe was guilty of contributory negligence. the carrier must apply the rate of those which appear to be the lowest. Certainly. The place of delivery to the carrier. by the contents of which the disputes which may arise regarding their execution and performance shall be decided. The assailant’s motive was to retaliate for the loss of life of two Maranaos as a result of the collision between petitioner’s bus and the jeepney in which the two Maranaos were riding. Inc. contributing as a legal cause to the harm he has suffered. In case the consignee. Caorong did not act recklessly. The date on which shipment is made. In transportation made by railroads or other enterprises subject to regulation rate and time schedules. He was playing the role of the good Samaritan. 119756 . Contributory Negligence 1. The description of the goods. always including a statement or reference to in the bill of lading which he delivers to the shipper. 144723 – respondent Noe’s act of standing on the rear carrier of the Fiera exposing himself to bodily injury is in itself negligence on his part. with the exception of that provided for in Article 366. The indemnity to be paid by the carrier in case of delay. Respondent Noe’s act of standing on the left rear carrier portion of the Fiera showed his lack of ordinary care and foresight that such act could cause him harm or put his life in danger. Rides any part of the vehicle unsuitable or dangerous or which he knows is not designated or intended for passengers 3. Deocampo was not only driving fast. Fortune Express.to avoid skidding and overturning. gr no. but all of them shall bear the name of the carrier. He only stepped on the brakes after the collision. the carrier is a merchant or is habitually engaged in transportation for the public. gr no. Not Passengers: 1. CA. if there should be any agreement on this matter.The petitioner contends that Atty. and by virtue of the exchange of this title with the thing transported. he also admitted that he did not step on the brakes even upon seeing the pick-up. stealth or deceit 2. with respect to the cost. The shipper as well as the carrier of merchandise or goods may mutually demand that a bill of lading be made. The name. ARTICLE 353. and if the shipper does not determine the schedule. 4. Contributory negligence is conduct on the part of the injured party. it shall be sufficient for the bills of lading or the declaration of shipment furnished by the shipper to refer. The cost of transportation. The bills of lading. with such other manifestations which may be considered necessary for their easy identification. Deocampo could have avoided the vehicle if he was not driving very fast while following the pick-up. and of the external marks or signs of the packages in which they are contained. some for persons and others for baggage. the bill of lading which the carrier has issued shall be returned to him. upon receiving the goods. Caorong was guilty of contributory negligence in returning to the bus to retrieve something. 8. It has been held that "to hold a person as having contributed to his injuries. ARTICLE 351. surname and residence of the person to whom or to whose order the goods are to be sent or whether they are to be delivered to the bearer of said bill. the number and weight of the packages. to the schedules and regulations the application of which he requests. it must be shown that he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body. surname and residence of the carrier. the leader of the group which had hijacked the bus. which falls below the standard to which he is required to conform for his own protection. ARTICLE 352. Bernardo. the date of shipment. of their weight. 9. cannot return . the points of departure and arrival. Mananggolo. no exceptions being admissible other than those of falsity and material error in the drafting. the cost. the respective obligations and actions shall be considered cancelled. whatever its object may be. The place and the time at which delivery to the consignee shall be made. with the conditions inherent thereto. The name. It should be pointed out that the intended targets of the violence were petitioner and its employees. When. compared to running straight ahead. with a statement of their kind. not its passengers. The legal evidence of the contract between the shipper and the carrier shall be the bills of lading. A contract of transportation by land or water ways of any kind shall be considered commercial: 1. stating: 1. Caorong to retrieve something from the bus. The name. and. unless in the same act the claim which the parties may wish to reserve be reduced to writing. this act cannot be considered an act of negligence. 2. 6. or tickets in cases of transportation of passengers. let alone recklessness. When it has for its object merchandise or any article of commerce. with respect to the baggage. Respondent Noe’s act of hanging on the Fiera is definitely dangerous to his life and limb. 2.

the carrier had to take another route which produced an increase in transportation charges. If there is an agreement between the shipper and the carrier as to the road over which the conveyance is to be made. If the effect of the damage referred to in Article 361 is merely a diminution in the value of the goods. When on account of said cause of force majeure. unless the shipper has committed fraud in the bill of lading. the expense occasioned by the examination and that of carefully repacking the packages shall be for the account of the carrier and in a contrary case for the account of the shipper. is made to appear in the bill of lading. this receipt producing the same effects as the return of the bill of lading. The shipper. the company shall transport them. according to the general provisions established in this Code for commercial contracts. he shall be liable for all the losses which the goods he transports may suffer from any other cause. he must give the latter a receipt for the goods delivered. unless it be by reason of force majeure. the goods are rendered useless for sale and consumption for the purposes for which they are properly destined. the obligation of the carrier shall be reduced to the payment of the amount which. and should he not do so. be returned to him. in consequence of the damage. as against him.the bill of lading subscribed by the carrier. and if the carriage is to be made by railway. If the shipper or consignee who has to be cited does not attend. shall be for the account and risk of the shipper. ARTICLE 359. he shall be reimbursed for such increase upon formal proof thereof. ARTICLE 361. and should he do so without this cause. they were found at the time they were received. Nevertheless. representing the goods to be of a kind or quality different from what they really were. on account of their nature or by reason of unavoidable accident. ARTICLE 357. Carriers may refuse packages which appear unfit for transportation. to pay the value which those not delivered may have at the point and at the time at which their delivery should have been made. the goods transported run the risk of being lost. in exchange for another wherein the novation of the contract appears. Outside of the cases mentioned in the second paragraph of Article 361. being exempt from all responsibility if its objections. As a consequence. ARTICLE 354. and the shipment is insisted upon. If. may change the consignment of the goods which he delivered to the carrier. ARTICLE 363. The merchandise shall be transported at the risk and venture of the shipper. ARTICLE 360. the consignee shall not be bound to receive them. If those not delivered form part of the goods transported. that they arose through his negligence or by reason of his having failed to take the precautions which usage has established among careful persons. provided that at the time of ordering the change of consignee the bill of lading signed by the carrier. notwithstanding the precautions referred to in this article. personally or through a person charged for the purpose. according to the bill of lading. In the absence of a bill of lading. ARTICLE 358. the carrier shall be liable for the losses and damages resulting from the causes mentioned in the preceding article if it is proved. The responsibility of the carrier shall commence from the moment he receives the merchandise. the damages caused by the delay should be for his account. without any damage or impairment. If the declaration of the shipper should be true. when he proves that he cannot make use of them independently of the others. the examination shall be made before a notary. all the losses and deteriorations which the goods may suffer during the transportation by reason of fortuitous event. disputes shall be determined by the legal proofs which the parties may present in support of their respective claims. ARTICLE 362. force majeure. if the contrary has not been expressly stipulated. placing them for this purpose at the disposal of the judicial authority or of the officials designated by special provisions. with the shipper or consignee in attendance. The expenses which this change of consignment occasions shall be for the account of the shipper. ARTICLE 364. constitutes such difference in value. the carrier may proceed to sell them. Proof of these accidents is incumbent upon the carrier. and he may have them in the hands of the carrier. if one has been issued. he shall proceed with his investigation in the presence of witnesses. because of its loss or of any other cause. demanding of the latter their value at the current price on that day. the consignee may refuse to receive the latter. 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 point where he must deliver them. without changing the place where the delivery is to be made. ARTICLE 365. If. and failing to do so. If by reason of well-founded suspicion of falsity in the declaration as to the contents of a package the carrier should decide to examine it. the carrier may not change the route. who shall prepare a memorandum of the result of the investigation. . the carrier shall be obliged to deliver the goods shipped in the same condition in which. in the judgment of experts. at the place indicated for receiving them. or the inherent nature and defect of the goods. there being no time for their owners to dispose of them. for such purposes as may be proper. beside paying the sum which may have been stipulated for such case. ARTICLE 355. ARTICLE 356.

If the abandonment is not made. ARTICLE 370. ARTICLE 374. 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 twenty-four hours following their delivery. in which case the claim shall be admitted only at the time of receipt. the indemnification for losses and damages by reason of the delay cannot exceed the current price which the goods transported would have had on the day and at the place in which they should have been delivered. vehicles. or against the other carriers who may have received the goods transported without reservation. or the transportation charges have been paid. The goods transported shall be especially bound to answer for the cost of . and if the interested parties should not agree with the expert opinion and they do not settle their differences. by the mere fact of being named in the bill of lading to receive them. When this abandonment takes place. may be made. the consignee may leave the goods transported in the hands of the former. no claim shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. the merchandise shall be deposited in a safe warehouse by order of the judicial authority. 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. However. or if he refuses to pay the transportation charges and expenses. separating those parcels which appear sound. by a third one appointed by the judicial authority. The value of the goods which the carrier must pay in cases if loss or misplacement shall be determined in accordance with that declared in the bill of lading. ARTICLE 373. the reservation made by the latter shall not relieve them from the responsibilities which they may have incurred by their own acts. referred to in the preceding articles. and. If the consignee cannot be found at the residence indicated in the bill of lading. ARTICLE 375. The same rule shall be applied to merchandise in bales or packages. the goods which he may have received. this same rule is to be observed in all other cases in which this indemnity may be due. Horses. the carrier shall pay the indemnity stipulated in the bill of lading. the claim against the carrier for damage or average be found therein upon opening the packages. or if he refuses to receive the goods. shall provide for their deposit at the disposal of the shipper. ARTICLE 369. this segregation to be made by distinct and separate pieces and without dividing a single object. and if he does not do so. The carrier must deliver to the consignee. After the periods mentioned have elapsed. and they shall exercise their rights in the manner that may be proper. the results to be reduced to writing. The shipper and the consignee shall have an immediate right of action against the carrier who executed the transportation contract. Within the twenty-four hours following the receipt of the merchandise. in case of disagreement. If doubts and disputes should arise between the consignee and the carrier with respect to the condition of the goods transported at the time their delivery to the former is made. ARTICLE 368. neither the shipper nor the consignee being entitled to anything else. where there is none of the first instance.If among the damaged goods there should be some pieces in good condition and without any defect. ARTICLE 367. although with respect to railroads said liability shall be subordinated to the provisions of the laws of concession with respect to the property. In case of delay through the fault of the carrier. 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. the shipper not being allowed to present proof that among the goods declared therein there were articles of greater value and money. ARTICLE 371. and. If a period has been fixed for the delivery of the goods. 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. the carrier shall pay the full value of the goods as if they had been lost or mislaid. unless the consignee proves the impossibility of conveniently making use of them in this form. the carrier shall be liable for the damages which the delay may have caused. without any delay or obstruction. the goods shall be examined by experts appointed by the parties. vessels. ARTICLE 372. he shall be liable for the damages which may be caused thereby. the municipal judge. equipment and all other principal and accessory means of transportation shall be especially bound in favor of the shipper. advising him thereof in writing before their arrival at the point of destination. and in case of delay in this payment. it must be made within such time. this deposit producing all the effects of delivery without prejudice to third parties with a better right. ARTICLE 366. 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. If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading. and to what this Code established as to the manner and form of effecting seizures and attachments against said companies. The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded him in the conveyance. for failure to do so. the foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those which are sound.

If the carrier has acted by virtue of a formal order of the shipper or consignee of the merchandise. or authorizing or purporting to authorize the possessor of the document to transfer or receive. 7) Art. with notary. 2) Art. 359 – If there is an agreement. in which all the goods the transportation of which is undertaken shall be entered in consecutive order of number and dates. b. although they do not personally effect the transportation of the merchandise. the carrier must select the lowest rate. provided it is claimed within the eight days mentioned in the preceding article. 355 – The responsibility of the carrier – begins: the moment he receives the merchandise. Expenses incurred in the process will have to be borne by the shipper.Without damage or impairment. he shall be issued a receipt for the goods delivered. ARTICLE 378. 6) Art. The provisions contained in Articles 349 and following shall be understood as equally applicable to those who. he shall be liable for losses incurred and amount stipulated if stated. 357 – If under suspicion of falsity. Second. if to be made by rail. 10) Art. the carrier shall have no other action than that corresponding to him as an ordinary creditor. it is a contract by which three parties. This can only be done if shipment has not be made yet! 9) Art. Rights and obligations of common carrier. a bill of lading is also a document of title. with the formalities required by Article 36. 3) Art. This special right shall prescribe eight days after the delivery has been made. A document of title is any document used in the ordinary course of business in the sale or transfer of goods. If he does without this reason. In either case they shall be subrogated in the place of the carriers themselves. 5) Art. 351 – Shipper schedules and special conditions of the carriage. If the suspicion is false. except when his failure arises from having been led into error by falsehood on the part of the shipper in the declaration of the merchandise. the carrier is obliged to deliver the goods shipped: 1.transportation and for the expenses and fees incurred for them during their conveyance and until the moment of their delivery. as proof of the possession or control of goods. with a statement of the circumstances required in Article 350 and others following for the respective bills of lading. The carrier shall be liable for all the consequences which may arise from his failure to comply with the formalities prescribed by the laws and regulations of the public administration. during the whole course of the trip and upon arrival at the point of destination. the carrier is liable for the repacking. A proof of these is incumbent upon the carrier. as well as with regard to their rights. and once prescribed. wants to change the consignee of the good. unless contrary is expressly stipulated or by force majeure or thru the negligence of the carrier (Art. can be required by the carrier to surrender all copies of the bill of lading in order that a new one may be issued now bearing the name of the new consignee. no time for owners to dispose of them. 4) Art. 8) Art. with respect to the obligations and responsibility of the latter. shipper and consignee under a bill of lading 1) Art. either by indorsement or by delivery. If true. personally or thru an authorized person. The preference of the carrier to the payment of what is owed him for the transportation and expenses of the goods delivered to the consignee shall not be cut off by the bankruptcy of the latter. 356 – Carrier may refuse – unfit for transportation. goods run the risk of being lost AND. it is a receipt for the goods shipped.In the same condition in which according to the bill of lading they were found at the time they were received 2. 363: a. b. 353 – Shipper must return the bill of lading issued to him to the carrier. the shipper. the company shall transport them. Carrier may sell them or place them under disposal of a judicial authority or official designated by special provisions IF: a. representing the goods to be different. Third. to pay the value which those not delivered may have at the point and at the time at which their delivery should have been made . In the case of a consignee with the loss of the bill of lading. 2 nd par. Agents for transportation shall be obliged to keep a special registry. the carrier and the consignee. Bill of Lading: A bill of lading is an instrument issued by a captain to a shipper which is stated the fact of the receipt of the goods and stating the terms and conditions of the carriage. contract to do so through others. if not by the shipper. ARTICLE 379. undertake specific responsibilities and assume stipulated obligations. 362). the shipper. either as contractors for a particular and definite operation. ARTICLE 377. the carrier can examine it in the presence of witnesses with the shipper or consignee in attendance. 11) Art. 358 – If there are no period fixed for delivery – the carrier should forward them on the first shipment of the same of similar goods which he may make to a point where he must deliver them. 361 – The merchandise shall be transported at the risk and venture of the shipper. Failing to do so. both shall become responsible. If without. Outside the cases mentioned in Art 362. place indicated for receiving them. goods represented by such document. 362 – Liability because of negligence is negated if shipper committed fraud in the bill of lading. or as agents for transportations and conveyances. The three fold character off a bill of lading are: First. 360 – A shipper who after delivering the goods to the carrier and having been issued a bill of lading designating a consignee and a place of consignment. namely. the route cannot be changed except force majeure. ARTICLE 376.

and the suit itself should be filed within two years from said discharge. and lasts until he delivers them actually ot constructively to the consignee or to his agent. 365 – If it is rendered useless in case of damage/s. Ship agent Person entrusted with provisioning and representing the vessel in the port in which it may be found. and all that relate to the requirements of navigation. Not a mere agent under civil law. If those not delivered form part of the whole goods and that the consignee PROVES he cannot make use of them independently from the others. (Arts. 14) Art. Capacity to trade. violations can be preceded against the carrier. there is no delivery. 17) Art. The taking of a certificate of Philippine registry on vessels 15 tons or less is optional. Against the arrastre operator. If the consignee has not received possession of the cargo and has not physically inspected the same at the time of the shipment was discharged from the ship. prescribes in 10 years. The registration of those 3 tons or less is optional. Time for making claims A claim for lost goods against a merchant vessel must be made within 30 days from receipt of the last package of the goods. it shall be issued a certificate of Philippine registry. 24 hour prescription of Art. the obligation of the carrier – reduced to the payment of the amount. a vessel of more than 3 tons owned by Filipino citizens or corporations and associations at least 60% of the capital of which belongs to said citizens shall be registered with the Philippine Coast Guard under PD 1064. subject to Art. it shall be issued a certificate of ownership.Vessel engaged in maritime commerce. to ships. registration of vessels is now with the Maritime Industry Authority (MARINA). However. Failure of the shipper to do so is fatal as it is a condition precedent to the accrual of the cause of action against the carrier. MARITIME COMMERCE ARTICLES 573-736. Under EO 125 and 125-A. 368 –The carrier must deliver to the consignee. armament. 372 – The value of the goods lost or misplaced is determined by that declared in the bill of lading. They shall continue to be considered as personal property. he is solidarily liable with the ship owner. in satisfaction of which a vessel may be validly arrested and sold. he may refuse to receive them. also includes the shipowner. 573. if a domestic vessel not less than 5 tons does not take a certificate of Philippine registry. or refuses to receive the goods: The municipal judge shall provide for their deposit at the disposal of the shipper. control and management of the vessel and the consequent right to direct her navigation and receive freight earned and paid.609. lasts until actual or constructive delivery to consignee or authorized representative. Powers and functions: 1. Constitutes property which may be acquired and transferred by any of the means recognized by law. the consignee shall receive those. Arrastre service is not maritime in character. MARITIME/ADMIRALTY LAW It is the system of laws which particularly relates to the affairs and business of the sea. 369 – If the consignee cannot be found at the residence indicated therein or if he refuses to pay transpo charges and expenses. equipping and provisioning of the vessel in the preparation of a voyage. the consignee may demand the value at the current price. details of equipment. Contract in the name of the owners with respect to repairs. It refers to a contract for the unloading of goods from a vessel. he shall be liable for the damages which may be caused thereby. their crews and navigation. Discharge duties of the captain. and to maritime conveyance of persons and property.c. as well as mortgage liabilities. the suit should be preceded by a claim filed within 15 days from the discharge of the last cargo. SHIPOWNERS AND SHIP AGENTS Shipowner Person who has possession. which in the judgment of experts constitutes difference in value. if the vessel is more than 15 tons gross. An action for misdelivery of cargo under the Civil Code and not under the Carriage3 of Goods by Sea Act. Thereafter. 3. and freight of the vessel. 13) Art. 15) Art. 4. . if he does not do so. while his possession continues. the goods which he may have received by the mere fact of being names in the bill of lading to receive them. 2. 373 – If there is a delivery by combined agreements or services. without any delay or obstruction. make a new charter or insure the vessel after obtaining authorization from the shipowner or if granted in certificate of appointment. whether foreign or otherwise. Carrier’s responsibility starts from the moment he receives unconditionally the merchandise personally or through an authorized agent. 806-845 CODE OF COMMERCE Rules on Vessels Merchant Vessel . 366 occurs only if there is delivery by the carrier to the consignee at the place of destination. provisions of food and fuel. 12) Art. 16) Art. If there are parts which are ok. 364 – If in case of force majeure there is or are damage/s and there is a diminution in the value of the goods. this deposit producing the effect of delivery. Maritime laws apply only to maritime trade and sea voyages. Necessity of Registration Under Section 803 of PD 34. The one year prescriptive period under the latter law is applicable to loss or damage of cargo but not to its misdelivery. Order a new voyage. 585) They are susceptible to maritime liens such as for the repair.

5. 609) Inherent powers: 1. (Art. (Art. and provisioning of the vessel unless he has expressly bound himself personally or has signed a bill of exchange or promissory note in his name. 3. From the consignee of the vessel. except on the following grounds: a. Comply with the requirements of customs. 3. while on board vessel. 11. (Art. 5. 620) Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain towards Passengers and Cargoes 1. etc. equip and provision the vessel. 2. Legal capacity to contract. (Art. i. to repair. vs. Command the crew and direct the vessel to its port of destination. Technical director of the vessel. Impose correctional punishment on those who. 8. 3. Qualifications: 1. (Art. or death and shall assume all of his duties. Be on deck while leaving or entering the port. Keep the Binnacle Book. No liability for the following: 1. whether authorized or not. Change the course of the voyage on consultation with the captain and the officers of the boat. 611) Duties: 1. CA). Damages due to non-observance of marine regulations. Leave the vessel last in case of wreck. 12. Observe rules to avoid collision. 586) 2. and 6. 605) CAPTAINS AND MASTERS They are the chiefs or commanders of ships. Thefts and robberies of the crew. 2. By a loan on bottomry. large and overseas. 610) Sources of funds to comply with the inherent powers of the captain (in successive order): 1. 3. 603) If for a definite period. 5. he may discharge them at his discretion. 3. 2. 3. Demand a pilot while entering or leaving a port. 3. 4. fail to comply with his orders or are wanting in discipline. Order repair of vessel to enable it to continue its voyage. Damage caused to the vessel or to its cargo through malice or manifest or proven negligence. (Art. Must have passed the required physical and mental examinations required for licensing him as such. 4. . 2. Protest arrivals under stress and in case of shipwreck. 4. powers and responsibilities. Follow instructions of and render an accounting to the ship agent. Keep a Log Book. For arrivals under stress. 7. Filipino citizen. 8. All contracts of the captain. 10. (Art. sickness. Damages to vessel and to cargo due to lack of skill and negligence. following the decision of the captain in case of disagreement. 5. General agent of the shipowner. Loss and damage to the goods loaded on the vessel without prejudice to their right to free themselves from liability by abandoning the vessel to the creditors. d. Examine the ship before the voyage. 2. 627) Duties: 1. respectively. and provision the vessel. but are particularly used in accordance with the size of the vessel governed and the scope of transportation. Supply. (Art. 9. (Art. 6. Habitual drunkenness. 618) Sailing Mate/First Mate Second chief of the vessel who takes the place of the captain in case of absence. Provide himself with maps and charts with astronomical tables necessary for the discharge of his duties. Damages due to mutinies. Theft. Insubordination in serious matters. From the consignee of the cargo. c.Civil Liabilities of the Shipowner And Ship Agent 1. 2. health. 2. (Art. equip. 6. b.. Accounting Book and Freight Book. and small and coastwise. at the port of arrival. Bring on board the proper certificate and documents and a copy of the Code of Commerce. Robbery. Hold in custody properties left by deceased passengers and crew members. By sale of part of the cargo. Appoint crew in the absence of ship agent. 2. The terms have the same meaning. Representative of the government of the country under whose flag he navigates. 7.e. Damages caused to the vessel or to the cargo by force majeure. Obligations contracted for the repair. equipment. For deviations. he may not discharge them until after the fulfillment of their contracts. By drawing on the ship agent. 587) Duty of Ship Agent to Discharge the Captain and Members of the Crew If the seamen contract is not for a definite period or voyage. Losses and fines for violation of laws. 612) A ship’s captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage (Inter-Orient Maritime Enterprises Inc. Nature of position (3-fold character): 1. e. Make contracts for the charter of vessel in the absence of ship agent. 4. Damages due to misuse of power. (Art. Stay on board during the loading and unloading of the cargo.

Does not include the passengers or the persons whom the vessel is transporting. or the ship’s company. & Hernando. Sailing Mate/First Mate 2.631) Second Mate Takes command of the vessel in case of the inability or disqualification of the captain and the sailing mate. if by shares . 647) Just Causes for the Discharge of Seaman While Contract Subsists 1. Assign work to crew members. 2. Perpetration of a crime. captain attempts to change it.none. 2. stokers and other employees on board not having specific designations. Discipline the crew. compensation up to time of death if engaged on wage b. There are occasions when the master may and should interfere and even displace the pilot. SUPERCARGOES Persons who discharges administrative duties assigned to him by ship agent or shippers. full.full payment. Arrange well the cargo. thus including the crew. 5. 2004 ed. Habitual drunkenness.P. 4. If a disease breaks out and be officially declared an epidemic in the port of destination. 2. 637) Rules in case of Death of a Seaman The seaman’s heirs are entitled to payment as follows: 1. as when the pilot is obviously incompetent or intoxicated (Far Eastern Shipping Company vs. 4. Preserve the hull and rigging of the vessel. 5. Aquino. While in exercising his functions a pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of the ship. Compulsory Pilotage – States possessing harbors have enacted laws or promulgated rules requiring vessels approaching their ports to take on board pilots licensed under the local laws. 628 . and licensed. In charge of the motor apparatus. he may take in foreigners. want of discipline. engineers. if death is due to defense of vessel . CA). 3. Desertion. the Harbor Pilot is responsible for damage to a vessel or to life or property due to his negligence. Not to change or repair the engine without authority of the captain. the captain hires them. Second Mate 3. 5. keeping an account and record of transaction as required in the accounting book of the captain. or in certain waters. the sailing mates. Inventory the rigging and equipment of the vessel. Engineers 4. (Art. T. or a naval war with the power to which the vessel was destined occurs. necessary for the management. Duties: 1. Keep the engines and boilers in good condition. Supervise all personnel maintaining the engine. assuming in such case their powers and responsibilities.wages up to the date of the capture. Repeated incapacity and negligence. to conduct a vessel into or out of ports. 4. where he is present and in his absence. one of them shall be the chief engineer. (Art. 649) PILOT A person duly qualified. spare parts. if laid up. from the captain to the cabin boy. 2. Third in command Duties: 1. 6. Repeated insubordination. the master does not surrender his vessel to the pilot and the pilot is not the master. Master pro hac vice for the time being in the command and navigation of the ship. but not exceeding 1/5 of the crew. 2. (Art. if after departure 2. preferring Filipinos. (Art. (Art. When two or more are hired. if on voyage in c. Inform the captain of any damage to the motor apparatus. Hired by the ship agent.full payment. Accident caused by force majeure or natural calamity provided the pilot exercised prudence and extra diligence to prevent or minimize damages. 3. 3.4. Countermand or overrule by the master of the . Keep an Engine Book. 6. Physical incapacity. maneuvers. p. and in their absence. 645) Complement of the Vessel All persons on board.half of amount if death occurs on voyage out. 3. EXCEPT: 1. 634) OFFICERS AND CREW 1. before beginning voyage. If the vessel should change owner or captain. 3. If death is natural: a. (Art. 632) Engineers Officers of the vessel but have no authority except in matters referring to the motor apparatus. Responsible for all the damages caused to the vessel and the cargo by reason of his negligence. if before departure. 4. If. if by voyage . and service. if captured due to carelessness . or from a port. (Notes and Cases on the Law on Transportation and Public Utilities. and other instruments pertaining to the engines. road or channel. 632) Crew The aggregate of seamen who man a ship. Crew No liability under the following circumstances: 1. and full. (Arts. The term generally connotes a person taken on board at a particular place for the purpose of conducting a ship through a river. R. 518) Liablity of Pilot GENERAL RULE: On compulsory pilotage grounds. (Art. if captured in defense of vessel .

for such role (which to our mind. 217 SCRA 359). the pilot supersedes the master for the time being in the command and navigation of the ship. road or channel. The master is not wholly absolved from his duties while a pilot is on board his vessel. has legal authority to enter into contracts with respect to the vessel and the trading of the vessel. but is deemed merely the adviser of the master. towlines cast off. to pilot vessels seeking to enter or depart. is one who has command of a vessel. by far the most important is the role performed by the captain as commander of the vessel. On Harbor Pilot Far Eastern Shipping v. towing and the like. and must cause the ordinary work of the vessel to be properly carried on and the usual precaution taken. (Aboitiz Shipping Corp. in maritime law. and safety laws have been enacted requiring vessels approaching their ports. and his orders must be obeyed in all matters connected with her navigation.11. CA. care and management of the vessel. as agent of the shipowner. the master does not observe that a compulsory pilot is incompetent or physically incapacitated. or in particular waters and (2) those entrusted with the navigation of vessels on the high seas. and the anchors clear and ready to go at the pilot's order. General Accident Fire and Life Assurance Corp. there is overwhelming authority to the effect that the master does not surrender his vessel to the pilot and the pilot is not the master. is analogous to that of "Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do with the operation and protection of the vessel during its voyage and the protection of the passengers (if any) and crew and cargo. or to decline to act as pilot. the pilot does not take entire charge of the vessel. and thus protect life and property from the dangers of navigation. except so far as her navigation is concerned. 156 SCRA 169). More importantly.similar to transactions over real property with respect to effectively against third persons which is done through registration. to take on board pilots duly licensed under local law. in particular. Art. and licensed. While it is indubitable that in exercising his functions a pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of a ship and that he becomes master pro hac vice of a vessel piloted by him. is a person duly qualified. A captain commonly performs three (3) distinct roles: (1) he is a general agent of the shipowner. 2.A pilot. Under certain systems of foreign law. agree upon rates and decide whether to take cargo. generally speaking.the liability of the owner of the value of the vessel is limited to the vessel itself (Doctrine of Limited Liability). The ship captain. subject to applicable limitations established by statute.The captain of a vessel is a confidential and managerial employee within the meaning of the above doctrine. and (3) he is a representative of the country under whose flag he navigates. A master or captain. but not blindly. or from a port. it is his duty to insist on having effective control of the vessel. a ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and its crew and cargo specifically requires on a stipulated ocean voyage. NLRC . and 2) The right to retain the cargo and embargo and detention of the vessel (Luzon Stevedoring Corp v. The master is still in command of the vessel notwithstanding the presence of a pilot. Under English and American authorities. (Sec. contract or instructions and regulations of the shipowner. for purposes of maritime commerce.vessel in which case the registered owner of the vessel is liable. If.III PPA Admin Order 0385) Case on Captain Inter-Orient Maritime Enterprises v. To the captain is committed the governance. In a broad sense. He becomes the master pro hac vice and should give all directions as to speed. course. Clearly. gr no. to conduct a vessel into or out of ports. Thus. or in certain waters. And when a licensed pilot is employed in a place where pilotage is compulsory. the term "pilot" is more generally understood as a person taken on board at a particular place for the purpose of conducting a ship through a river. The evidence of real nature is shown by: 1) The limitation of the liability of the agents to the actual value of the vessel and the freight money. gr no. There are occasions when the master may and should interfere and even displace the pilot. (2) he is also commander and technical director of the vessel. stopping and reversing anchoring. and may advise with or offer suggestions to him. carry goods aboard and deal with the freight earned. who retains command and control of the navigation even in localities where pilotage is compulsory. However. the master is justified in relying on the pilot. 115286 . Of these roles. It is quite common for states and localities to provide for compulsory pilotage. however. The purpose of these laws is to create a body of seamen thoroughly acquainted with the harbor. Hypothecary . vs. CA. DOCTRINE OF LIMITED LIABILITY (HYPOTHECARY RULE) Cases where applicable: . Doctrine of Limited Liability or the Real and Hypothecary Nature of maritime Law 1. which stands as the guaranty for their settlement. Real . He is still in command of the vessel. In his role as general agent of the shipowner. he is bound to see that there is sufficient watch on deck. also that engines are stopped. the term "pilot" includes both (1) those whose duty it is to guide vessels into or out of ports. and that the men are attentive to their duties. as when the pilot is obviously incompetent or intoxicated and the circumstances may require the master to displace a compulsory pilot because of incompetency or physical incapacity. the captain has authority to sign bills of lading. with certain exceptions.  The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel. the captain is vested with both management and fiduciary functions. 130068 .

5. (Luzon Stevedoring v. In case there is no total loss and the vessel is not abandoned. we find that petitioner failed to discharge this burden. Where the shipowner fails to overcome the presumption of negligence. Relevant Cases on Limited Liability Rule 1. Monarch Insurance v. CA. 590. Aboitiz Shipping v. 2) equipments. Expenses for repair on vessel completed before loss. 640) Exceptions to the limited liability Doctrine – Articles. Art. Art. 156978 . CAUSES OF REVOCATION OF VOYAGE 1. 587 – civil liability for indemnities to third persons 2. Considering the evidence presented and the circumstances obtaining in this case.The petitioners assert in common that the vessel M/V P. To offset against these adverse conditions and to encourage shipbuilding and maritime commerce it was deemed necessary to confine the liability of the owner or agent arising from . (Chua v. In case of leakage of at least ¾ of the contents of a cargo containing liquids (Art. The shipowner’s or agent’s liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. Blockade. Embargo. 643 – liability for wages of the captain and the crew and for advances made by the ship agent if the vessel is lost by shipwreck or capture GENERAL RULE: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessel is entirely lost. the captain and its crew. 590 and 837 Art. War or interdiction of commerce. petitioner has the burden of proving that the unseaworthiness of its vessel was not due to its fault or negligence. no liability. Aboitiz did not sink by reason of force majeure but because of its unseaworthiness and the concurrent fault and/or negligence of Aboitiz. Claims under Workmen’s Compensation (Abueg vs. gr no. 587. Abandonment of the vessel is necessary to limit the liability of the shipowner. petitioner has the burden of showing that it exercised extraordinary diligence in the transport of the goods it had on board in order to invoke the limited liability doctrine. RIGHT OF SHIPOWNER OR SHIP AGENT TO ABANDON VESSEL Instances: 1. Insurance Code). 92735 . New India Assurance. the obligation is extinguished. gr no.In the present case. However. 587. in this case. attended by innumerable hazards and perils. to limit its liability to the amount of the insurance proceeds. Each part owner may exempt himself from this liability by the abandonment before a notary of the part of the vessel belonging to him. 156 SCRA 169) The interest extends to: 1) the vessel itself. 687). 3. both the trial and the appellate courts. thereby barring Aboitiz from availing of the benefit of the "No vessel. 6.1. Art. CA 156 SCRA 169). It initially attributed the sinking to the typhoon and relied on the BMI findings that it was not at fault. 3) freightage. The vessel is insured (Vasquez vs. The total destruction of the vessel extinguishes maritime liens because there is no longer any res to which it can attach. In case of constructive loss of the vessel (Sec. 2. Inability of the vessel to navigate. IAC. for the results of the acts of the captain. Prohibition to receive cargo at destination. but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freightage he may have earned during the voyage." expresses in a nutshell the limited liability rule. 2. In case of civil liability from indemnities to third persons (Art. This doctrine is based on the real and hypothecary nature of maritime law which has its origin in the prevailing conditions of the maritime trade and sea voyages during the medieval ages. the doctrine of limited liability cannot be applied. Differently put. Art. 2. 837 – collision 4. The civil liability contracted by the shipowners in the cases prescribed in this section. and 4) insurance proceeds. and 3. In which case. Collision between two negligent vessels. found that the sinking was not due to the typhoon but to its unseaworthiness. 2. 4. 138. An exception to the limited liability doctrine is when the damage is due to the fault of the shipowner or to the concurrent negligence of the shipowner and the captain. 166 SCRA 183) EXCEPTIONS: 1. referred to in Article 587. 3. ARTICLE 837. The ship agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried. (Art. 5. Injury or damage due to shipowner or to the concurring negligence of the shipowner and the captain. shall be understood as limited to the value of the vessel with all her appurtenances and all the freight earned during the voyage. 587). 590 – indemnities from negligent acts of the captain (not the shipowner or ship agent) 3. 4. San Diego 77 Phil 730). in the proportion of their contribution to the common fund. The only instance were abandonment is dispensed with is when the vessel is entirely lost (Luzon Stevedoring vs. The co-owners of a vessel shall be civilly liable. the shipowner shall be liable to the full-extent of the damage. CA 138 SCRA 553). Escano. Art.

if any. The petty and ordinary expenses incident to navigation. and the embargo and detention of the vessel in cases where the ordinary civil law would not allow more than a personal action against the debtor or person liable. Simple or particular. 806. Damages and Accidents of Maritime Commerce (Articles 806-809) . this is a mere deficiency of language and in no way indicates the true extent of such liability. As a general rule. have been suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of consignment Simple or Particular Defined Art. Petitioner is absolved from all complaints. Damages or deterioration : to constitute an average. so far as necessary. especially the following: 1. Averages consist of 2 items : 1. such liability is limited to the value of the vessel and other things appertaining thereto such that a total loss thereof results in its extinction. lighterage and towage. such as those of pilotage of coasts and ports. Laserna. For the purposes of this Code the following shall be considered averages: 1. and other so-called port expenses. have been suffered from the time the vessel puts to sea from the port of departure until it casts anchor in the port of destination b.the vessel with all her equipments and the freight it may have earned during the voyage. the exclusively real and hypothecary nature of maritime law still operates to limit his liability to the value of the vessel or to the insurance thereon. to pay the judgment rendered in the present case. Although the article appears to deal only with the limited liability of shipowners or agents for damages arising from the misconduct of the captain in the care of the goods which the vessel carries. Such a situation will be covered by the provisions of the Civil Code on common carriers. Article 587 speaks only of situations where the fault or negligence is committed solely by the captain. General or gross. cargo or both 2. 807. extraordinary or accidental b. is immaterial. Thus. his liability is confined to that which he is entitled as of right to abandon -. This is not to say. we have (1) the limitation of the liability of the agents to the actual value of the vessel and the freight money and (2) the right of the maritime creditor to retain the cargo.the operation of a ship to the vessel. and (3) in workmen’s compensation claims. As evidence of this real nature. Art. In other words. The reason for the limited liability is the real and hypothecary nature of maritime law as distinguished from civil law and mercantile law in general. (2) where the vessel is insured. equipment. The vessel having totally perished. even assuming that Yangco is liable for breach of contract because his relationship to the passengers rests on a contract of carriage. All extraordinary or accidental expenses which may be incurred during the voyage for the preservation of the vessel or cargo. 1600 . if any. unless there is an express agreement to the contrary. or to the concurring negligence of the shipowner and the captain. Whether the abandonment of the vessel sought by the petitioner in instant case was in accordance with law or not. however. inspection. namely: (1) where the injury or death to a passenger is due either to the fault of the shipowner. 808. the benefit of limited liability applies in all cases (as regards both goods and passengers of the vessel) wherein the shipowner or agent may properly be held for the negligent or illicit acts of the captain. simple or particular averages include all the expenses and damages caused to the vessel or to her cargo which have not inured to the common benefit and profit of all the persons interested in the vessel and her cargo. gr no. Yangco v. Expenses : to constitute an average. as to nature as to classes Art. Article 587 does not apply. 2. Risks. 131621 . In cases where the ship owner is likewise to be blamed.in accordance with articles 837 and 826 of the Code of Commerce. V. Vergara gr no. until the merchandise is placed on the wharf. it must be: a. and by necessary implication. incurred during the voyage c. 809. All damages or deterioration which the vessel may suffer from the time it puts to sea at the port of departure until it casts anchor at the port of destination. and other usual expenses of navigation shall be considered ordinary expenses to be defrayed by the shipowner. or both. 4.Art. The losses suffered by the cargo from the time of its embarkation until it is unloaded. this Court continues to apply the said rule in appropriate cases. Such holding cannot be applied herein for the reason that the vessel lost was insured and that defendant collected the insurance. anchorage. to wit. Averages shall be: 1. health. an expense must be: a. Contrary to the petitioners’ theory that the limited liability rule has been rendered obsolete by the advances in modern technology which considerably lessen the risks involved in maritime trade. the insurance money substitutes the vessel and must be used. 587 accords a shipowner or agent the right of abandonment.Averages. and unloading. Philippine Shipping Co. or insurance. the vessel was not insured. incurred in order to preserve the vessel. In this case. 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. any act of abandonment would be an idle ceremony. either on account . 2. and freight. costs of barges. That being the case. 3. the defendant in an action cannot be held responsible in damages when the ship causing the injury was wholly lost by reason of the accident. quarantine lazaretto. Art. that the limited liability rule is without exceptions.

in order to make repairs or secure provisions. In order to incur the expenses and cause the damages corresponding to gross average. for the common safety. If. there must be a resolution of the . 10. The loss inflicted upon the vessel or cargo by reason of an impact or collision with another. this loss shall be considered gross average. or bay. Art. the amount thereof being distributed between the vessel and cargo from which it came. 9. except in coastwise navigation. to the vessel. negligence. privateers. 5. and equipments. or both at the same time. and the damage resulting therefrom to the goods removed or transferred. As a general rule. its cargo. 8. should he prefer it. 811. as if the loss had originated from a gross average. 8. 9. the latter shall be liable for all the damage caused. The wages and victuals of the crew when the vessel is detained or embargoed by a legitimate order or force majeure. on the contrary. rigging. 4. there must be a common danger --> the ship and cargo are subject to the same danger and that the danger arises from accidents of the sea. if the charter has been contracted for a fixed sum for the voyage. The losses suffered by the merchandise loaded on deck. during the time that it is embargoed or detained by force majeure or by order of the Government. The expenses of the liquidation of the average. 6. or pirates. from the expenses or damages caused follows the successful saving of the vessel and cargo 4. and expenses of the vessel detained during the time the settlement or redemption is being made. 6. the owner of said part shall be entitled to indemnity. If the accident should occur through the fault or negligence of the captain. or both. 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. no liability may be demanded of the salvage. If.of the inherent defect of the goods or by reason of a marine accident or force majeure. and the freight. to which the vessels saved shall contribute. The expenses caused in order to float a vessel intentionally stranded for the purpose of saving it. 813. arms. Distinguishing feature: an expense incurred or damage suffered which has not inured to the common benefit and profit of all persons interested in the vessel and its cargo Effects Art. If in the lightening a vessel on account of a storm. The cables and masts which are cut or rendered useless. dispositions of the authorities or faults of men. until he is returned to the vessel or to his domicile. in order to facilitate its entry into a port or roadstead. and particularly the following: 1. roadstead. provided that the circumstances producing the peril should be ascertained and imminent 2. the merchandise transferred should be saved and the vessel should be lost. The wages of any member of the crew held as hostage by enemies. 2. 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. 4. from a real and known risk. Art. The wages and victuals of the crew of a vessel chartered by the month. or pirates. The lowest value of the goods sold by the captain in arrivals under stress for the payment of provisions and to save the crew. the vessel. for the same causes and reasons. the vessel. The victuals and wages of the crew while the vessel is in quarantine. The goods or cash invested in the redemption of the vessel or of the cargo captured by enemies. if it is accidental and unavoidable. Gross or General Defined Art. The depreciation resulting in the value of the goods sold at arrivals under stress in order to repair the vessel by reason of gross average. part of the vessel or the cargo or both is sacrificed deliberately 3. and the provisions. The losses and expenses suffered by the vessel in its hull. 817. the anchors and the chains which are abandoned. if the marine ordinances allow it. 7. Any loss suffered by the cargo through the faults. it should be decided to sink any vessel. part of her cargo should be transferred to lighters or barges and be lost. as a necessary measure to extinguish a fire in port. in order to save the cargo. scuttled or broken in order to save the cargo. The damage caused to the vessel which had to be opened. 3. The goods jettisoned to lighten the vessel. 7. The necessary expenses on arrival at port. or barratry of the captain or of the crew. from the time it puts to sea from the port of departure until it anchors in the port of destination. general or gross averages shall include all the damages and expenses which are deliberately caused in order to save the vessel. 818. or to the crew. wages. or in order to repair the damage caused for the common benefit. 12. and the expenses incurred to avoid and repair the same. 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. Requisites for general average: 1. 3. privateers. 810. whether they belong to the cargo. The owner of the goods which gave rise to the expense or suffered the damage shall bear the simple or particular averages. and the damage suffered through said act by the goods which are kept on board. 5. to meet any other need of the vessel against which the proper amount shall be charged. creek. 2. the expenses or damages should have been incurred or inflicted after taking legal steps and authority Requisites Art. and the necessary expenses which he may incur in his imprisonment. without prejudice to the right of the owner to recover the corresponding indemnity from the captain. 11.

or the captain. L-6393. 811) All the persons having an interest in the vessel and the cargo therein at the time of the occurrence of the average shall contribute to satisfy this average. (Art. (Art. The owners of the goods saved shall not be liable for the indemnification of those jettisoned. unless the urgency of the case should be such that the time necessary for previous deliberation was wanting. The resolution adopted to cause the damages which constitute general average must necessarily be entered in the log book. and to ratify it immediately under oath. there must be an assembly of the sailing mate and other officers with the captain including those with interests in the cargo 2. being on board the vessel. 810) GROSS OR GENERAL Damages or expenses deliberately caused in order to save the vessel. it shall be signed by the captain and by the officers of the vessel. do not constitute general average. adopted after deliberation with the sailing mate and other officers of the vessel. should consider certain measures necessary. notwithstanding the jettison of the merchandise. If. and equipment. common safety factor. Inc. their share being chargeable against the captain. and after the resolution. If the latter should object. ropes. 809) Liability The owner of the goods which gave rise to the expense or suffered the damage shall bear this average. Delivery of the minutes to the maritime judicial authority of the first port. G. (Art. Agan. the votes against it and the reason for the dissent.732). there must be a resolution of the captain 3. Magsaysay. and the irresistible and urgent causes which impelled the captain if he acted of his own accord. 31. The captain shall be obliged to deliver one copy of these minutes to the maritime judicial authority of the first port he may make. he shall deliver one copy of these minutes to the maritime judicial authority thereat Art. 813814) . Not only is there absence of a marine peril. 1955) PARTICULAR OR SIMPLE Definition Damages or expenses caused to the vessel or cargo that did not inure to the common benefit. Assembly and deliberation 2. 860. the resolution shall be entered in the log book. (Art. no contribution whatsoever by reason of gross average shall be proper. Number of interests involved Only one interest Several interests involved involved Share in the damage or expense 100% share In proportion to the value of the owner’s property saved Right to recover No reimbursement There may be reimbursement Kinds (not exclusive) Art. if opposed to the majority. within 24 hours upon arrival at the first port the captain makes. its cargo or both from real and known risk. have not been heard. • The person whose property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes general average.No. In the second case. If the persons interested in the cargo. they may be executed under his responsibility. stating the motives and reasons on which it is based. Entry of the resolution in the logbook 4. Resolution of the captain 3. and deliberateness. with the reasons and motives and the votes for and against the resolution 4. 809 Art. it is general average. without prejudice to the right of the shippers to proceed against the captain before the competent judge or court. or negligence. (Arts. lack of skill. if they can prove that he acted with malice. in order to continue its voyage. should there be any. if possible. Jan. Classes: 1. and the captain and officers or a majority of them. and mention shall be made of the injuries caused to those kept on board.859) and lenders on bottomry and respondentia shall likewise contribute. vs. which accidentally ran aground. 6.four hours after his arrival. the vessel should be lost running same risk. and not the voyage. and borne by respective owners. at the first opportunity. within 24 hours from arrival. (A. Formalities for incurring gross average : 1. • Expenses incurred to refloat a vessel. Gross or General Average • Where both vessel and cargo are saved. It is the safety of the property. which constitutes the true foundation of general average. shall be stated in detail all the goods jettisoned. Particular or Simple Average 2. 812) The insurers (Art. In the minutes. 811 Procedure for recovery 1. 814. within twenty. they shall not contribute to the gross average. In the first case the minutes shall be signed by all the persons present who could do so before taking action. the minutes shall be signed by the parties 5. Detailed minutes 5.captain. breakage of masts. and after hearing the persons interested in the cargo who may be present. (Art.R. where only the vessel or only the cargo is saved. Art. lost or damaged. it is particular average. Ratification by captain under oath. and if not.

the captain thereof being civilly liable to said owner. ARTICLE 830. Goods carried on deck. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage. privateers or pirates. and both shall be jointly responsible for the losses and damages suffered by their cargoes. ARTICLE 831. 2. before sailing. the injury occasioned shall be looked upon as particular average to the vessel run into. If the reason for said arrival should have been the fear of enemies. If a vessel should be forced to collide with another one by a third vessel. privateers. if during the voyage the vessel cannot continue the trip to the port of destination. a discussion and resolution of a meeting of the officers of the vessel and persons interested in the cargo who may be present shall take place.855 (2)) Fuel for the vessel if there is more than sufficient fuel for the voyage. 4. provided the latter is legitimate. or pirates should not have been well known. negligence. or by reason of any accident of the sea disabling her to navigate. The expenses caused by the arrival under stress shall always be for the account of the shipowner or agent. each one shall be liable for his own damages. he shall assemble the officers and shall call the persons interested in the cargo who may be present. after an expert appraisal. privateers. 3. (ART. the reasons should be considered well founded. Duty of the Captain on Arrival Under Stress ARTICLE 825. a vessel which is properly anchored and moored should collide with those in her immediate vicinity. or lack of skill of the captain. If the captain during the navigation should believe that the vessel can not continue the voyage to the port of destination on account of the lack of provisions. or if they should have been rendered useless or lost through bad stowage or negligence in their care. Goods not recorded in the books or records of the vessel. Whenever malice. If a vessel should collide with another by reason of an accident or through force majeure. The arrival under stress shall not be considered legal in the following cases: 1. causing them damage. ARTICLE 832. the owner of the vessel at fault shall indemnify the losses and damages suffered. equipped. negligence. or lack of skill on the part of the captain is the reason for the act causing the damage. it shall be decided to make the nearest and most convenient port drafting and entering in the log book the proper minutes. or any other member of the complement. If a vessel should collide with another through the fault. want of foresight. the owner of the third vessel shall indemnify for the losses and damages caused. and based on positive and justifiable facts. Who bears the Cost on Arrival Under Stress ARTICLE 821. ARTICLE 828. Collision: impact of two vessels both of which are moving Allision: striking of a moving vessel against one that is stationary . If the risk of enemies.GOODS NOT COVERED BY GENERAL AVERAGE EVEN IF SACRIFICED 1. but the latter shall not be liable for the damage which may be caused the shippers by reason of the arrival under stress. as well as the criminal liabilities which may be proper. well founded fear of seizure. Arrival under Stress When Lawful ARTICLE 819. The captain shall have the deciding vote and the persons interested in the cargo may make the objections and protests they may deem proper. after examining the circumstances of the case. the shipowner or agent and the captain shall be jointly liable. Otherwise. in accordance with the provisions contained in Article 819. and who may attend the meeting without the right to vote. and arranged in a convenient manner for the voyage. which shall be entered in the minutes in order that they may make use thereof in the manner they may consider advisable. 825 Collisions – Articles 826-833 Doctrine of Error in Extremis Protest – Articles 835.855) 2. If the injury to the vessel should have been caused by reason of her not being repaired. sailing mate. each vessel and her cargo shall be liable for their own damage. The captain shall answer for the damages caused by his delay. or by reason of some erroneous order of the captain. Arrival Under Stress When Unlawful ARTICLE 820. 836 ARTICLE 826. if the reason for the arrival under stress having ceased. rigged. by reason of a storm or other cause of force majeure. In the cases above mentioned the civil action of the owner against the person liable for the damage is reserved. ARTICLE 827. (ART. If both vessels may be blamed for the collision. manifest. or pirates. 836 Arrival Under Stress The arrival of a vessel at the nearest and most convenient port instead of the port of destination. The provisions of the foregoing article are applicable to the case in which it can not be decided which of the two vessels was the cause of the collision. which shall be signed by all. Collisions/Allision – Articles 826-833 Doctrine of Error in Extremis Protest – Articles 835. ARTICLE 829. Concept or Rules on: Arrivals under Stress – Articles 819-822. according to usage and custom. he should not continue the voyage. and if. If.

Error in Extremis The sudden movement made by a faultless vessel during the third zone of collision with another vessel which is at fault under the second zone. and the act of the sailing vessel having been done in extremis and even wrong. such act may be said to be done in extremis. The vessel which is not properly moored or does not observe the proper distances. The vessel which leaves later is presumed to have collided against one who has left earlier. Effect of fault of privileged vessel during third zone : If a vessel having a right of way suddenly changes its course during the third zone. The steamer having a far greater fault in allowing such proximity to be brought about is chargeable with all the damages resulting from the collision. When 2 vessels are about to enter a port. both shall be deemed to have been at fault. Thus. the farther one must allow the nearer to enter first. is not responsible for the result. 2. A vessel leaving port should leave the way clear for another which may be entering the same port. due to the fault. 8. if they collide. when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason. does not absolve the steamship which has suffered herself and a sailing vessel to get into such dangerous proximity as to cause inevitable harm and confusion. during the third division of time.  Under Arts. it has been held that fault on the part of the sailing vessel at the moment preceding a collision. due to the fault of both vessels under 827. 827. 4. There is also a presumption against the vessel which sets sail at night. even when the crew of the latter has received word to lift anchor. under which the evidence disclosing that both vessels are blameworthy. the vessel run into shall suffer its own damages and expenses Nautical Rules to determine negligence : 1. 7. Doctrine of Inscrutable Fault Where fault is established but it cannot be determined which of the two vessels were at fault. all the time up to the moment when the risk of collision may have said to have begun within this zone. the time between the moment when collision has become a practical certainty and the moment of actual contact  The third zone covers the period in which errors in extremis occur. the fault is presumed to be imputable to the one who arrived later. the owner of the third vessel causing the collision shall be liable for the losses and damages 6. and both shall also be solidarily responsible for the losses and damages caused to their cargoes 4. 27 Phil 68)  under the express provisions of Art. The presumption also works against the vessel with spread sails which collides with another which is at anchor. both are solidarily liable for the loss of cargo carried by either to the full extent of the value thereof. 6. the owners of neither can successfully . or which has been left without watch. and even if wrong. where it cannot be determined which of the 2 vessels is at fault  under 828. When 2 vessels meet. sailing mate or the complement of the vessel  under 826. 2. no responsibility will fall on the faultless vessel. the smaller should give the right of way to the larger one. a vessel which is properly anchored and moored may collide with those nearby by reason of a storm or other cause of force majeure under 832.  In the second the burden is on the vessel required to keep away and avoid the danger. collision due to fortuitous event or force majeure  under 830. that is. in case of collision between two vessels at sea. the time between the moment when the risk of collision begins and the moment when it has become a practical necessity.  The doctrine of last clear chance cannot be raised (Williams v. Zones in time of collisions (3 time zones): 1. and the rule is that the vessel which has forced the privileged vessel into danger is responsible even if the privileged vessel has committed an error within that zone. or which is improperly moored or does not have sufficient cables. and cannot move. negligence or lack of skill of the captain. in an effort to avoid an imminent collision due to the fault of another vessel. 3. Yangco. the shipowner shall be liable for the losses and damages 2. where two vessels collide with each other without their fault but by reason of the fault of a third vessel  under 831. but as regards the owners of the cargoes. 9. 5. has the presumption against itself. and a collision results as a consequence. has also against itself the presumption. Even if sudden movement is wrong. The same rule applies to those vessels which do not have buoys to indicate the location of its anchors to prevent damage to these vessels which may approach it. each vessel shall bear its own damages 5. cannot create responsibility on the part of said vessel with the right of way. 827 and 828. unless it can be proved that there was no fault on its part. each vessel shall suffer its own losses. both vessels shall be jointly and severally liable 3.Cases of collision : 1. each vessel shall suffer its own losses. Each vessel is free to direct its course as it deems best with reference to the movements of the other vessel. 3. no rule is applicable because none is necessary. The vessel which is moored at a place not used for the purpose. not only in the case where both vessels may be shown to be actually blameworthy but also in the case where it is shown that only one was at fault but the proof does not show it  makes no difference that the negligence imputable to the two vessels may have differed somewhat in character and degree and that the negligence of the sunken ship was somewhat more marked than that of the other.

Neither honest error or judgment nor mere negligence. Primage . and with preference to any other obligation. Jettison Act of throwing cargo overboard in order to lighten the vessel. 2) on collision time. 835. in pursuance of some unlawful or fraudulent purpose. ARTICLE 836.) In order that the jettisoned goods may be included in the gross or general average. in accordance with the provisions contained in Articles 610. for the purpose of recovering losses and damages. The goods saved from the wreck shall be specially liable for the payment of the expenses of the respective salvage. in case the wreck or stranding is due to the (1) malice. It is a written statement made under oath by the captain of a vessel after the occurrence of an accident or disaster in which the vessel or cargo is lost or damaged. MARITIME PROTEST  Condition precedent or prerequisite to recovery of damages arising from collisions and other maritime accidents. if it occurred in a foreign country. If the wreck or standing should be caused by the malice. ARTICLE 842. and 621. preferring the heaviest one with the least utility and value. beginning with the one with greatest weight and smallest value. or lack of skill of the captain. need not be protested. or on coast renders the ship incapable of navigation Under 841. the absence of a protest can not prejudice the persons interested who were not on board or were not in a condition to make known their wishes. 840. or (2) because the vessel put to sea was insufficiently repaired and equipped.maintain an action against the other for the loss or injury to his vessel Relevant Articles on Maritime Protest Art. negligence. or that of the first port of arrival of the vessel. Those which are below the upper deck. if the merchandise should be sold. (Art. 842.  Where a ship and its cargo are saved together. with respect to the circumstances attending such occurrence. or lack of skill of the captain. or because the vessel put to sea insufficiently repaired and equipped. 1997 ed. the part which may be saved belonging to them in the same proportion. and the amount thereof must be paid by the owners of the former before they are delivered to them. either by being swallowed up by the waves. Collision 2. Excuses for not filing protest: 1) where the interested person is not on board the vessel. The losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck or stranding shall be individually for the account of the owners. (Pandect of Commercial Law and Jurisprudence. 614. 815) Jettisoned goods are not res nullius nor deemed “abandoned” within the meaning of civil law so as to be the object of occupation by salvage. (Art. (Art. Those which are on the deck. and with preference over any other obligation if the merchandise should be sold. and the amount thereof must be paid by the owners of the former before they are delivered to them. Order of goods to be cast overboard: 1. Where the vessel has gone through a hurricane or when the captain believes that the cargo has suffered damages or averages It is made by the Captain within 24 hours from the time the collision took place before a competent authority at the point of collision or at the first port of arrival. The action for the recovery of losses and damages arising from collisions cannot be admitted if a protest or declaration is not presented within twenty-four hours before the competent authority of the point where the collision took place. Shipwrecks 4. In so far as the damages caused to persons or to the cargo are concerned. 841. Justice Jose Vitug. 612. the liability of the latter is limited to such part of the salvage compensation due for the entire service as is proportionate to the value of the ship Barratry Willful and intentional act on the part of the master or crew. 836) Cases applicable: 1. 2. without the consent of the owner. 816) Shipwreck Loss of a vessel at sea. if in the Philippines and to the Philippine consul. Art. negligence. (Art. if in Philippine territory and to the consul of the Philippines. the salvage allowance should be charged against the ship and cargo in proportion of their respective values. if the collision took place abroad. The goods saved from the wreck shall be specially bound for the payment of the expenses of the respective salvage. the same as in general averages and neither is liable for the salvage due from the other Where a personal action is brought by the salvor against the owner of the ship. Arrival under stress 3. 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. the existence of the cargo on board should be proven by means of the bill of lading. by running against another vessel or thing at sea. 835) Shipwrecks Art. and to the prejudice of his interest. the captain shall be liable Art.

is a contract for the use of a vessel for a specified period of time or for the duration of one or more specified voyages. This is not presumed to be intentional. Contract of Affreightment 3. It is well settled that in a demise or bare boat charter. In a bare boat charter the vessel ceases to be a common carrier. without a crew. gains a right of possession which he can maintain against the true owners. the charterer assuming in large measure the customary rights and liabilities of the shipowner in relation to third persons who have dealt with him or with the vessel. however. The shipowner is not normally required by the terms of a demise charter to provide a crew.. or which is allowed. i. much as a lease of an unfurnished house is a demise of real property. And since it is a private carrier. and not the general owner of the vessel. It is an extended freight or reward to the vessel in compensation for the earnings she is improperly caused to lose. the shipowner cannot ask that the cargoes be sold to satisfy his claims because he has no lien on the goods. The owner does not renounce his right of property. master and crew remain in the employ of the owner of the vessel. the owner of a time. or of the price they may receive in case of accident.boat charter).It was formerly a small allowance or compensation payable to the master and marines of a ship. The charterer or owner pro hac vice. Voyage or trip charter A voyage charter. is simply a contract of affreightment. Demurrage It is the sum fixed by the contract of carriage. or trip charter. to the former for the use of his cables and ropes to discharge the goods of the merchant. 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. his right of possession. under any condition whatever. and the charterer (and not the owner) through the agency of the master. that is. it is no longer a gratuity but is included in the freight rate. Derelict A ship or her cargo which is abandoned and deserted at sea by those who are in charge of it. There is no privity of contract between the shipowner and the owners of the goods so he cannot ask that the goods be sold to satisfy his claim for his fees. Sometimes. a contract for the carriage of goods. or without any intention of returning it  if those in charge of the property left it with the intention of finally leaving it.e. the charterer is treated as owner pro hac vice of the vessel. retains possession and control through the master and crew who remain his employees. who then undertakes to provide a crew and victuals and supplies and fuel for her during the term of the charter. Lay days Lay days are days allowed to charter parties for loading and unloading the cargo. it becomes a private carrier. A loan in which. Because the one who is liable and who is dealing with the owners of the goods is the charterer. The shipowner turns over possession of his vessel to the charterer. if the charterer does not pay the shipowner the stipulated fees. shall be considered a loan on bottomry or respondentia. the demise charter might provide that the shipowner is to furnish a master and crew to man the vessel under the charterer’s direction. as remuneration to the owner of a ship for the detention of his vessel beyond the number of days allowed by the charter party for loading and unloading of for sailing. to the latter for the lading and unlading in any port of haven. In such case. in return. which is transferred to the finder who becomes bound to preserve the property with good faith and bring it to a place of safety for the owner's use. It is the charterer who will be liable to the holders of the goods if the goods get lost. has possession and control of the vessel during the charter period. nor does the finder acquire any such right.” It means that during the duration of the bareboat charter. like a demise charter. Charterer the pro hac vice owner of the vessel in bareboat charter Pro hac vice means “for this occasion. is held liable for the expenses of the voyage including the wages of the seamen. Bareboat or Demise 2. In this case. Loan on Bottomry and Respondentia Art. he will assume the rights and liabilities of the shipowner. What the time charterer acquires is the right to utilize the carrying capacity and facilities of the vessel and to designate her destinations during the term of the charter. But the owner thus abandons temporarily. . on one or on a series of voyages. without any hope of recovering it. Time charter A time charter. he acquires a right to be paid for his service a reasonable and proper compensation out of the property itself. Today. of course.chartered vessel (unlike the owner of a vessel under a demise or bare. it is a derelict and the change of their intention and an attempt to return to it will not change its nature Rights of finder of derelict The finder who takes possession with the intention of saving the ship. He is not bound to part with the possession until he is paid or the property is taken into the possession of the law preparatory to the amount of salvage being legally asserted Special Contracts of Maritime Commerce Charter Parties 1. 719. such that the master and crew provided by the shipowner become the agents and servants or employees of the charterer. from one or more ports of loading to one or more ports of unloading. Time Charter Bareboat or demise charter A bareboat or demise charter is a demise of a vessel. In a voyage charter. and so the charterer gets the “bare boat”. the Master of the vessel is the agent of the charterer and not of the shipowner.

2. aleatory contract. 4. Time for repayment.726) 2. 7. Loss due to inherent defect. Kind. nor on the profits which it is expected to earn. 2. Full amount of the loan is not used for the cargo or given on the goods if all of them could not have been loaded. and they shall be graduated by the inverse order to that of their dates. (ART. Private instrument (Art. (Art. LOAN ON BOTTOMRY AND RESPONDENTIA  A real. In a contract on bottomry or respondentia the following must be stated: 1. 3. (ART. 7. and domiciles of the person giving and the person receiving the loan. Goods pledged to secure repayment. 5. all of them shall be paid pro rata. surname and domicile of the captain. Public instrument 2. during the voyage designated. Names. The name. and repayable upon safe arrival of cargo at destination. 3. ARTICLE 725. Voyage during which the risk is run (Art.Art. EXCEPTIONS: 1. 719) Who may contract Shipowner or ship Only the owner of the agent. The loans for the last voyage shall have preference over prior ones. the balance will be considered a simple loan. Forms: 1. and if it is proven that the goods were on board. Exposure of security to marine peril. 3. 6. Should several loans have been made at a port made under stress and for the same purpose.729) Note: Under existing laws. 719) LOAN RESPONDENTIA ON Contents: 1. (Art. whether ordinary or maritime. (CB Circular 905) MARINE INSURANCE Indemnity is paid after the loss has occurred In case of loss of the vessel due to a risk insured against. name. No loans can be made on the salaries of the crew. Obligation of the debtor conditioned only upon safe arrival of the security at the point of destination. surname. ARTICLE 730 Loans made during the voyage shall have preference over those made before the clearing of the vessel. 4. and which is lost if the latter are lost. The voyage during which the risk is run. The vessel was engaged in contraband. LOAN ON BOTTOMRY Definition Loan made by shipowner or ship agent guaranteed by vessel itself and repayable upon arrival of vessel at destination. Name. and registry of the vessel. is to be returned if the things are safely transported. with its earnings. the obligation of the insurer becomes absolute Consensual contract LOAN ON BOTTOMRY OR RESPONDENTIA Indemnity is paid in advance by way of a loan In case of loss of the vessel due to a marine peril. Policy signed by the contracting parties and the broker taking part therein 3. and . 4. residence of the owners . surnames and domiciles of the borrower and the lender.727) 3. 720) Hypothecary Nature of Bottomry/ Respondentia GENERAL RULE: The obligation of the borrower to pay the loan is extinguished if the goods given as security are absolutely lost by reason of an accident of the sea. surnames. and domicile of the captain. Loss due to the fault or malice of the borrower. Common elements: 1. 6. 2. (ART. Lender loaned an amount larger than the value of the object due to fraudulent means employed by the borrower. The amount of the loan and the premium stipulated. The goods pledged to secure repayment. The time for repayment. 2. the obligation of the borrower to pay is extinguished Real contract Loan taken on security of the cargo laden on a vessel. The kind. which amount. by virtue of which one person lends to another a certain amount of money or goods on things exposed to maritime risks. name and registry of the vessel. Loss due to the barratry on the part of the captain. Amount of the loan and the premium stipulated. If the effects on which the money is taken is not subjected to any risk. 5. may agree on any rate of interest. The names.721) BOTTOMRY/ RESPONDENTIA Not subject to Usury Law Liability of the borrower is contingent on the safe arrival of the vessel or cargo at destination The last lender is a preferred creditor ORDINARY LOAN (MUTUUM) Subject to Usury Law Not subject contingency liability) to any (absolute The first lender preferred creditor is a WHEN LOAN ON BOTTOMRY OR RESPONDENTIA REGARDED AS SIMPLE LOAN 1. the parties to a loan.the captain. 721. unilateral. Outside of the cargo.

2010 bar question) A stipulation shortening the 1 year prescriptive period within which to file an action for loss or damages shall de NULL and VOID.Suppletory law for such type of transportation. • PERIOD TO FILE ACTION: (1 YEAR PRESCRIPTIVE PERIOD) An action for loss or damage of cargo should be filed within 1 year after: -the delivery of the goods. mariner. in accordance with the provisions of paragraph (1) of Section (3). Jan. refrigerating and cooling chambers. (e) Act of war. neglect. whether partial or general: Provided. rulers. • NOTICE OF LOSS OR DAMAGE Apparent loss or damage. (Commonwealth Act No. or the servants of the carrier in the navigation or in the management of the ship.5. (l) Saving or attempting to save life or property at sea. except if change is due to force majeure CARRIAGE OF GOODS BY SEA ACT • COGSA contains advanced legislation. where loss is caused by barratry on the part of the captain 4. 1997 ed. (k) Riots and civil commotions.1967. The same rule would apply to the hypothecation of the cargo by respondentia. 27. (j) Strikes or lockouts or stoppage or restraint of labor from whatever cause.65) Sec. The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of the value over the amount secured by bottomry. carriage. (i) Act or omission of the shipper or owner of the goods. Insurance Code) 2. Inc. Not Apparent loss or damage. or -the date when the goods should have been delivered . and supplied. and all other parts of the ship in which goods are carried fit and safe for their reception.Primary law on goods that are being transported from a foreign port to the Philippines. (g) Arrest or restraint of princes. (b) Fire. COGSA. and preservation. (Art. 735) Note: If a vessel is hypothecated by bottomry only the excess is insurable. where the loss is caused by fault or malice of borrower 3. (d) Act of God. Whenever loss or damage has resulted from unseaworthiness. (c) Perils. or people. 731) 1. (m) Wastage in bulk or weight or any other loss or New Civil Code (Art. (Ang vs. 101. Concurrence of Marine Insurance Bottomry/Respondentia and Loan on 1. where loss is caused by damage to the vessel as a consequence of its engaging in contraband 5. either 10 years for breach of written contracts or 4 years for quasi-delict. his agent or representative. Harvester. equipped. which is in consonance with the modern maritime rules and the practices of great shipping countries of the world. Justice Jose Vitug. or default of the master. American Steamship Agencies. where the loss is caused by inherent defect of the thing 2. that nothing herein contained shall be construed to relieve a carrier from responsibility for the carrier's own acts. the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section.notice must be given within 3 days from the date of delivery.notice must be given immediately upon delivery. where loss arose from having loaded the merchandise on a vessel different from that designated in the contract. The value of what may be saved in case of shipwreck shall be divided between the lender and the insurer in proportion to the interest of each one. (f) Act of public enemies.1753) . since a loan on bottomry partakes of the nature likewise of an insurance coverage to the extent of the loan accommodation. and accidents of the sea or other navigable water. the applicable rule on prescription is that found in the New Civil Code. unless caused by the actual fault or privity of the carrier.4 For suits predicated not upon loss or damage but on alleged misdelivery or conversion of imported goods. 50OG5805) • RIGHTS AND IMMUNITIES (1) Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy and to secure that the ship is properly manned. (Pandect of Commercial Law and Jurisprudence. (Elser vs. or seizure under legal process. (2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from — (a) Act. (Sec. (h) Quarantine restrictions. dangers. The cargo loaded on the vessel be different in from that agreed upon.) When loss does not extinguish loan: (Art. pilot. and to make the holds.

public utility services are impressed with public interest and concern. and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. (o) Insufficiency or inadequacy of marks. either municipal or legislative. but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage. however. CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY It is an authorization issued by the Board for the operation of public services for which a prior franchise is required by law such as electric. explosive. (p) Latent defects not discoverable by due diligence. (6) Goods of an inflammable. Garcia. or in case of goods not shipped in packages. and (3) The applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. be regarded as unreasonable. De Lat vs. or the equivalent of that sum in other currency. GR No. and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided. shall be prima facie evidence. L-34978) PRIOR OPERATOR RULE. the PSC will not issue a certificate of public convenience to a second operator if there is a first operator who is rendering sufficient. master or agent of the carrier. or a corporation or a copartnership. adequate and satisfactory service. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo. but shall not be conclusive on the carrier. unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. such as common carrier. master or agent of the carrier. association or joint stock company constituted and organized under the laws of the Philippines. In no event shall the carrier be liable for more than the amount of damage actually sustained. quality. or vice of the goods. that such maximum shall not be less than the figure above named.damage arising from inherent defect.Under this policy. his agents. 115381) CERTIFICATE OF PUBLIC CONVENIENCE It is an authorization issued by the Board for the operation of public services for which no franchise. 83551) Public utilities are privately owned and operated businesses whose services are essential to the general public. and who in all things and respects is complying with the rules and regulations of the . Reyes. transportation. (n) Insufficiency or packing. (2) The applicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to its operations. is required by law. or his servants. prima facie. or dangerous nature to the shipment whereof. gas water. they may in like manner be landed at any place. if embodied in the bill of lading. that if the deviation is for the purpose of loading or unloading cargo or passengers it shall. or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average if any. REQUIREMENTS FOR THE ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE (1) The applicant must be a citizen of the Philippines. or any reasonable deviation shall not be deemed to be an infringement or breach or this Act or of the contract of carriage. They are enterprises which specially cater to the needs of the public and conduce to their comfort and convenience. and other services. (5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package of lawful money of the United States. GR No. (Albano vs. (3) The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act. telephone or telegraph service. GR No. As such. PUBLIC SERVICE ACT • Public Utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity. per customary freight unit. telephone. or neglect of the shipper. Neither the carrier nor the ship shall be responsible in any event for loss damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently misstated by the shipper in the bill of lading. and carrier shall not be liable for any loss or damage resulting therefrom: Provided. (4) Any deviation in saving or attempting to save life or property at sea. This declaration. (Kilusang Mayo Uno Labor Center vs. By agreement between the carrier. has not consented with knowledge of their nature and character. may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation. at least 60 per centum of the stock or paid-up capital of which entirely belong to citizens of the Philippines. and (q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier. PSC. (Angeles Vda. the carrier.

both parties being”in pari delicto” to an agreement which is contrary to public policy and therefore void and inexistent.The driver does not receive a fixed wage but gets only the excess of fares collected by him over the amount he pays to the jeep owner. THE WARSAW CONVENTION -The Warsaw Convention is an agreement among nations which provides for the rights and obligations of the air carrier and the passengers in international flights. Sunjiang. 327 SCRA 482) -It applies to all international transportation of persons. Transportation and Maritime Law. in any of the following places. priority in the filing of application for a certificate of public convenience becomes an important factor in granting or refusal of a certificate. and attorney’s fees. Beda notes from the net. 148 SCRA 347) (B) BOUNDARY SYSTEM. Commercial Law Review.) -With respect to carriers that are being regulate by the LTFRB. when demanded by urgent public need. STANDARD IN FIXING RATES -Rate must be reasonable and just. The Board.Commission. Quimbo. in determining rates. boundary and other operating expenses.) Death of Passenger. at the option of the plaintiffpassenger: 1. Notes and Cases on the Law on Transportation and Public Utilities) PRIOR APPLICANT RULE.250 francs per kilogram (2. To protect the operators from unfair. spare parts. Pointers in Commercial Law. recklessness or improper behavior on the part of any official or employee for which the carrier is responsible. 407 SCRA 432) Source: Miravite.Where there are various applicants for a public utility over the same territory. (China vs. 2. CA. . (Republic of the Phil. Orlanes) The rule provides for the priority in the filing of application for CPC. 141949) UNLAWFUL ARRANGEMENTS (A) KABIT SYSTEM. PROVISIONAL INCREASE -An administrative agency may be empowered by law to approve provisionally.The goal of the law is not only to protect the public but the operators as well. Court of domicile of carrier.It is an arrangement between parties whereby a person who has been granted a certificate of public convenience allows the other person who own motor vehicles to operate under such license. Court of principal business of the carrier. it is essential also to consider the given situation. POWER TO FIX RATES The power to fix the rates of public utilities is delegated to the regulatory administrative and such cannot be further delegated by the said administrative agencies. vs. Court where the carrier has a place of business through which the contract was made. and 4. vs. requirements and opportunities of the utility. rates of public utilities without a hearing. baggage or goods performed by an aircraft gratuitously or for hire.” (Amarican vs. an air carrier may be sentenced to pay not only compensatory but also moral and exemplary damages. -Objective: “To regulate in a uniform manner the conditions of international transportation by air.000 francs per passenger -The carrier cannot avail of this limitation if the breach is attended by willful misconduct. Chiok. Manila Electric Co. Court of the place of destination LIABILITY -Liability limit: (1. (Batangas transportation Co. therefore. PRIOR INVESTMENT RULE. unjustified and ruinous competition.250. 3. several factors are to be considered like price of gasoline. GR No. vs. (Padua et al. JURISDICTION -Suits by a passenger of an international airline must be prosecuted. The reason is discerned from the fact that provisional rates are by their nature temporary and subject to adjustment in conformity with the definitive rates approved after final hearing. IAC. -The parties to a “kabit” agreement cannot seek remedies in court. -The requirement of reasonableness comprehends such rates which must not be so low as to be confiscatory. adopted two methods in rate determination namely the straight method and the add-on method. If there is satisfactory evidence of malice or bad faith by the airline’s officers and employees. In determining whether the rate is confiscatory. Ranada. It is therefore the duty of the gov’t. The rate in order to be fair and just must strike a balance between the affordability of the riding public and the viability of the operator without detriment to public safety. (Aquino and Hernando. (Teja vs. all conditions being equal. under Warsaw Convention. bad faith. for a fee or percentage of such earnings.) Baggage lost. or too high as to be oppressive.