TRANSPORTATION AND MARITIME LAW

Based on the outline of Prof. Rodrigo Quimbo

_______________
I. General Considerations
A. Public Utilities
1. Article XII, 1!" Constitution
Art. XII, Section 11. No franchise, certificate or any other
for of a!thori"ation for the o#eration of a #!$%ic !ti%ity sha%% $e
&rante' e(ce#t to citi"ens of the Phi%i##ines or to cor#orations or
associations or&ani"e' !n'er the %a)s of the Phi%i##ines at %east *+,
of )hose ca#ita% is o)ne' $y s!ch citi"ens, nor sha%% s!ch franchise,
certificate or a!thori"ation $e e(c%!si-e in character or for a %on&er
#erio' than fifty years. Neither sha%% any franchise or ri&ht $e &rante'
e(ce#t !n'er the con'ition that it sha%% $e s!$.ect to aen'ent,
a%teration or re#ea% $y the /on&ress )hen the coon &oo' so
re0!ires. The State sha%% enco!ra&e e0!ity #artici#ation in #!$%ic
!ti%ities $y the &enera% #!$%ic. The #artici#ation of forei&n in-estors in
the &o-ernin& $o'y of any #!$%ic !ti%ity enter#rise sha%% $e %iite' to
their #ro#ortionate share in its ca#ita%, an' a%% the e(ec!ti-e an'
ana&in& officers of s!ch cor#oration or association !st $e citi"ens
of the Phi%i##ines.
Section 11. In ties of nationa% eer&ency, )hen the #!$%ic
interest so re0!ires, the State ay, '!rin& the eer&ency an' !n'er
reasona$%e ters #rescri$e' $y it, te#orari%y ta2e o-er or 'irect the
o#eration of any #ri-ate%y o)ne' #!$%ic !ti%ity or $!siness affecte'
)ith #!$%ic interest.
Section 13. The State ay, in the interest of nationa% )e%fare
or 'efense, esta$%ish an' o#erate -ita% in'!stries an', !#on #ayent
of .!st co#ensation, transfer to #!$%ic o)nershi# !ti%ities an' other
#ri-ate enter#rises to $e o#erate' $y the 4o-ernent.
Section 15. The State sha%% re&!%ate or #rohi$it ono#o%ies
)hen the #!$%ic interest so re0!ires. No co$inations in restraint of
tra'e or !nfair co#etition sha%% $e a%%o)e'.
#a$ %hat is a &ublic utilit'(
A public utility is a business or ser)ice engaged in regularl'
su&&l'ing the &ublic *ith some commodit' or ser)ice of &ublic conse+uence
such as electricit', gas, *ater, trans&ortation, tele&hone or telegra&h
ser)ice. A&art from statutes *hich define the &ublic utilities that are *ithin
the &ur)ie* of such statutes, it *ould be difficult to construct a definition of a
&ublic utilit' *hich *ould fit e)er' concei)able case. As its name indicates,
ho*e)er, the term &ublic utilit' im&lies a &ublic use and ser)ice to the
&ublic. #Am. ,ur. -d .. /0, &.10.$ #Albano )s Re'es$
#b$ %hat is a &ublic ser)ice(
2he Public 3er)ice Act #CA 4o. 10/ as amended$ &ro)ides that
the term &ublic ser)ice 5includes e)er' &erson that no* or hereafter ma'
o*n, o&erate, manage, or control in the Phili&&ines, for hire or
com&ensation, *ith general or limited clientele, *hether &ermanent,
occasional or accidental, and done for general business &ur&oses, an'
common carrier, railroad, street rail*a', traction rail*a', sub6*a' motor
)ehicle, either for freight or &assenger, or both *ith or *ithout fi7ed route
and *hate)er ma' be its classification, freight or carrier ser)ice or an'
class, e7&ress ser)ice, steamboat, or steamshi& line, &ontines, ferries, and
*ater craft, engaged in the trans&ortation of &assengers and freight or both,
shi&'ard, marine re&airsho&, 8*arehouse9, *harf or doc:, ice &lant, ice
refrigeration &lant, canal, irrigation s'stem, gas, electric light, heat and
&o*er, *ater su&&l' and &o*er, &etroleum, se*erage s'stem, *ire or
*ireless communications s'stem, *ire or *ireless broadcasting stations and
other similar &ublic ser)ices...5 83ec. 1;#b$9 #Albano )s Re'es$
Albano )s Re'es 1"1 3CRA -/0
<= >n -? A&ril 1!", the Phil. Ports Authorit' #PPA$ ado&ted a
resolution directing mgmt. to &re&are the In)itation to Bid and all rele)ant
bidding documents necessar' for the &ublic bidding of the de)elo&ment,
mgmt., and o&eration of the @anila Intl. Container 2erminal #@IC2$ and
authoriAed the Board Chairman 3ecretar' Re'es to o)ersee and im&lement
the &roBect.
3ecretar' Re'es created a "6man @IC2 Bidding Committee to
e)aluate all bids and recommend to the Board the best bid. 2he PPA
&ublished the In)itation to Bid *ith the reser)ation that it had the right to
reBect an' bid and to acce&t such bid it ma' deem ad)antageous to the
go)t.
3e)en com&anies submitted bids. 2he Committee
recommended that the contract be a*arded to Intl. Container 2erminal
3er)ices #IC23I$ on the ground that it offered the best technical and
financial &ro&osal. 3ecretar' Re'es a*arded the contract to IC23I. Before
the contract could be signed, t*o cases *ere filed +uestioning the legalit' or
regularit' of the bidding. 2he first *as a s&ecial action for &rohibition *ith
&relim inBunction filed b' Alo, a concerned ta7&a'er. 2he second *as a ci)il
case for &rohibition *ith &ra'er for 2R> filed b' 3har& Co. *hich acti)el'
&artici&ated in the bidding.
2he President a&&ro)ed the &ro&osed @IC2 contract. 2he PPA
and IC2<3I &erfected the contract. Rodolfo Albano, a member of the Couse
of Re&resentati)es filed the &resent case assailing the a*ard of the contract
on the ground that since the @IC2 is a &ublic utilit', it needs a legislati)e
franchise before it can legall' o&erate as a &ublic utilit'.
Issue = %>4 a legislati)e franchise is necessar'.
Celd = 4>. Petition dismissed.
A franchise s&eciall' granted b' Congress is not necessar' for
the o&eration of the @IC2 b' a &ri)ate entit'. A contract entered into b' the
PPA and such entit' is substantial com&liance *ith the la*. 1. D7ecuti)e
>rder 4o. ;? authoriAed the PPA to ta:e o)er, manage and o&erate the
@IC2 in accordance *ith PE !1" #Re)ised Charter of the PPA$. PE !1"
e7&ressl' em&o*ers the PPA to &ro)ide ser)ices *ithin Port Eistricts
5*hether on its o*n, b' contract or other*ise.5 2herefore, under D> ;? and
PE !1", the PPA ma' contract *ith IC23I for the mgmt., o&eration and de)t.
of the @IC2.
-. D)en if the @IC2 be considered a &ublic utilit' or a &ublic ser)ice on the
theor' that it is a *harf or a doc: as contem&lated b' the Public 3er)ice
Act, its o&eration *ould not necessaril' call for a legislati)e franchise.
Fegislati)e franchises are not re+uired before each and e)er' &ublic utilit'
ma' o&erate. 2he la* has granted certain administrati)e agencies the
&o*er to grant licenses for or to authoriAe the o&eration of certain &ublic
utilities.
2hat the Consti &ro)ides that the issuance of a franchise for the
o&eration of a &ublic utilit' shall be subBect to amendment, alteration or
re&eal b' Congress does not necessaril' im&l' that onl' Congress has the
&o*er to grant such authoriAation. 2here are se)eral la*s granting s&ecified
agencies in the D7ecuti)e Ee&t. the &o*er to issue such authoriAation for
certain classes of &ublic utilities. 8 1. F2<RB *rt Certificates of Public
Con)enience authoriAing the o&eration of &ublic land trans&ortation ser)ices
&ro)ided b' motoriAed )ehiclesG -. DRB *rt o&eration of electric &o*er
utilities and ser)ices e7ce&t electric coo&s9
Reading D> ;? and PE !1" together, the PPA has been
em&o*ered to underta:e b' itself or to authoriAe the o&eration and mgmt. of
the @IC2 b' another b' contract. 2he latter &o*er ha)ing been delegated to
the PPA, a legislati)e franchise is no longer necessar'. In this case, the
PPAHs contracting *ith IC23I is *holl' *ithin its Burisdiction and &o*ers.
;. 2he a*ard of the contract to IC23I is all the authoriAation that is
necessar'. 2he a*ard made b' the PPA and the President enBo's the
&resum&tion of )alidit' and regularit' of official action. 2here is no e)idence
to the contrar'.
0. Albano has standing to assail the contract. %hile the e7&enditure of
&ublic funds ma' not be in)ol)ed under the contract, &ublic interest is
definitel' in)ol)ed considering the im&ortant role of the @ICP in the
economic de)t. of the countr' and the magnitude of the amount in)ol)ed.
Ce has sufficient standing since a &ublic right #disclosure &ro)ision$ is
sought to be enforced.
1. 2here in no conflict among the ; branches of go)t. 2he D7ecuti)e Ee&t.
has not contra)ened an act of Congress. 2here is no usur&ation of &o*ers
of another branch.
/. 2he determination of the *inning bid should be left to the sound
Budgment of the PPA. It is in the best &osition to e)aluate the bids. It has
the technical e7&ertise *hich neither the Court nor Congress has. 4o abuse
of discretion has been sho*n.
-. CA 10/, as amended, 3ec 1; #b$

The ter public service inc%!'es e-ery #erson that no) or
hereafter ay o#erate, ana&e, or contro% in the Phi%i##ines, for hire
TRANSPORTATION AND MARITIME LAW
or co#ensation, )ith &enera% or %iite' c%iente%e, )hether #eranent,
occasiona% or acci'enta%, an' 'one for &enera% $!siness #!r#oses, any
coon carrier, rai%roa', street rai%)ay, traction rai%)ay, s!$6)ay
otor -ehic%e, either for frei&ht or #assen&er, or $oth )ith or )itho!t
fi(e' ro!te an' )hate-er ay $e its c%assification, frei&ht or carrier
ser-ice or any c%ass, e(#ress ser-ice, stea$oat, or steashi# %ine,
#ontines, ferries, an' )ater craft, en&a&e' in the trans#ortation of
#assen&ers an' frei&ht or $oth, shi#yar', arine re#airsho#,
7)areho!se8, )harf or 'oc2, ice #%ant, ice refri&eration #%ant, cana%,
irri&ation syste, &as, e%ectric %i&ht, heat an' #o)er, )ater s!##%y an'
#o)er, #etro%e!, se)era&e syste, )ire or )ire%ess co!nications
syste, )ire or )ire%ess $roa'castin& stations an' other sii%ar #!$%ic
ser-ices9 Pro-i'e', ho)e-er, that a #erson en&a&e' in a&ric!%t!re, not
other)ise a #!$%ic ser-ice, )ho o)ns a otor -ehic%e an' !ses it
#ersona%%y an':or enters into a s#ecia% contract )here$y sai' otor
-ehic%e is offere' for hire or co#ensation to a thir' #arty or thir'
#arties en&a&e' in a&ric!%t!re, not itse%f or these%-es a #!$%ic
ser-ice, for o#eration $y the %atter for a %iite' tie an' for a s#ecific
#!r#ose 'irect%y connecte' )ith the c!%ti-ation of his or their far, the
trans#ortation, #rocessin&, an' ar2etin& of a&ric!%t!ra% #ro'!cts of
s!ch thir' #arty or thir' #arties sha%% not $e consi'ere' as o#eratin& a
#!$%ic ser-ice for the #!r#oses of this Act.
B. 2rans&ortation
1. Eefinition 6 A contract of trans&ortation is one
*hereb' a certain &erson or association of &ersons obligate themsel)es to
trans&ort &ersons, things, ne*s from one &lace to another for a fi7ed &rice.
It is the remo)al of goods or &ersons from one &lace to another.
-. Public 4ature
#a$ Public 3er)ice Act
Section 1; <a= The /oission <PS/= sha%% ha-e .!ris'iction,
s!#er-ision, an' contro% o-er a%% #!$%ic ser-ices an' their franchises,
e0#t., an' other #ro#erties, an' in the e(ercise of its a!thority, it sha%%
ha-e the necessary #o)ers an' the ai' of the #!$%ic force9 Pro-i'e',
That #!$%ic ser-ices o)ne' or o#erate' $y &o-t. entities or 4OO/s
sha%% $e re&!%ate' $y the /oission in the sae )ay as #ri-ate%y
o)ne' #!$%ic ser-ices, $!t certificates of #!$%ic con-enience or
certificates of #!$%ic con-enience an' necessity sha%% not $e re0!ire'
of s!ch entities or cor#orations9 An' #ro-i'e', f!rther, That it sha%%
ha-e no a!thority to re0!ire stea$oats, otorshi#s an' steashi#
%ines, )hether #ri-ate%y o)ne' or o)ne' or o#erate' $y any &o-t.
contro%%e' cor#oration or instr!enta%ity to o$tain certificates of
#!$%ic con-enience or to #rescri$e their 'efinite ro!tes or %ines of
ser-ice.
<$= The ter #!$%ic ser-ice inc%!'es e-ery #erson that no)
or hereafter ay o#erate, ana&e, or contro% in the Phi%i##ines, for
hire or co#ensation, )ith &enera% or %iite' c%iente%e, )hether
#eranent, occasiona% or acci'enta%, an' 'one for &enera% $!siness
#!r#oses, any coon carrier, rai%roa', street rai%)ay, traction rai%)ay,
s!$6)ay otor -ehic%e, either for frei&ht or #assen&er, or $oth )ith or
)itho!t fi(e' ro!te an' )hate-er ay $e its c%assification, frei&ht or
carrier ser-ice or any c%ass, e(#ress ser-ice, stea$oat, or steashi#
%ine, #ontines, ferries, an' )ater craft, en&a&e' in the trans#ortation of
#assen&ers an' frei&ht or $oth, shi#yar', arine re#airsho#,
)areho!se, )harf or 'oc2, ice #%ant, ice refri&eration #%ant, cana%,
irri&ation syste, &as, e%ectric %i&ht, heat an' #o)er, )ater s!##%y an'
#o)er, #etro%e!, se)era&e syste, )ire or )ire%ess co!nications
syste, )ire or )ire%ess $roa'castin& stations an' other sii%ar #!$%ic
ser-ices9 Pro-i'e', ho)e-er, that a #erson en&a&e' in a&ric!%t!re, not
other)ise a #!$%ic ser-ice, )ho o)ns a otor -ehic%e an' !ses it
#ersona%%y an':or enters into a s#ecia% contract )here$y sai' otor
-ehic%e is offere' for hire or co#ensation to a thir' #arty or thir'
#arties en&a&e' in a&ric!%t!re, not itse%f or these%-es a #!$%ic
ser-ice, for o#eration $y the %atter for a %iite' tie an' for a s#ecific
#!r#ose 'irect%y connecte' )ith the c!%ti-ation of his or their far, the
trans#ortation, #rocessin&, an' ar2etin& of a&ric!%t!ra% #ro'!cts of
s!ch thir' #arty or thir' #arties sha%% not $e consi'ere' as o#eratin& a
#!$%ic ser-ice for the #!r#oses of this Act.
<c= The )or' >#erson> inc%!'es e-ery in'i-i'!a%, co6
#artnershi#, .oint stoc2 co. or cor#oration, )hether 'oestic or
forei&n, their %essees, tr!stees, or recei-ers, as )e%% as any
!nici#a%ity, #ro-ince, city, 4OO/, or a&ency of the &o-t. of the
Phi%i##ines, an' )hate-er other #erson or entities that ay o)n or
#ossess or o#erate #!$%ic ser-ices.
Section 1?. The ff. are e(e#te' fro the #ro-isions of the
#rece'in& section 9
<a= Wareho!ses@
<$= Aehic%es 'ra)n $y ania%s an' $ancas o-e' $y oar or
sai%, an' t!&$oats an' %i&hters@
<c= Airshi#s )ithin the Phi%i##ines e(ce#t as re&ar's the
fi(in& of their a(i! rates on frei&ht an' #assen&ers@
<'= Ra'io co#anies e(ce#t )ith res#ect to the fi(in& of
rates@
<e= P!$%ic ser-ices o)ne' or o#erate' $y any instr!enta%ity
of the Nat%. 4o-t. or $y any 4OO/, e(ce#t )ith res#ect to the fi(in& of
rates.
Section 1B. With the e(ce#tion of those en!erate' in the
#rece'in& section, no #!$%ic ser-ice sha%% o#erate in the Phi%i##ines
)itho!t #ossessin& a -a%i' an' s!$sistin& certificate fro the PS/
2no)n as the certificate of #!$%ic con-enience, or certificate of #!$%ic
con-enience an' necessity as the case ay $e, to the effect that the
o#eration of sai' ser-ice an' the a!thori"ation to 'o $!siness )i%%
#roote the #!$%ic interests in a #ro#er an' s!ita$%e anner.
The /oission ay #rescri$e as a con'ition for the
iss!ance of the certificate #ro-i'e' in the #rece'in& #ara&ra#h that the
ser-ice can $e ac0!ire' $y the Re#!$%ic of the Phi%i##ines or any
instr!enta%ity thereof !#on #ayent of the cost #rice of its !sef!%
e0#t., %ess reasona$%e 'e#n.@ an' %i2e)ise, that the certificate sha%% $e
-a%i' on%y for a 'efinite #erio' of tie@ an' that the -io%ation of any of
these con'itions sha%% #ro'!ce the ie'iate cance%%ation of the
certificate )itho!t the necessity of any e(#ress action on the #art of
the /oission.
In estiatin& the 'e#n., the effect of the !se of the e0#t., its
act!a% con'ition, the a&e of the o'e%, or other circ!stances
affectin& its -a%!e in the ar2et sha%% $e ta2en into consi'eration.
The fore&oin& is %i2e)ise a##%ica$%e to any e(tension or
aen'ent of certificates act!a%%y in force an' to those )hich ay
hereafter $e iss!e', to #erit to o'ify itineraries an' tie sche'!%es
of #!$%ic ser-ices, an' to a!thori"ations to rene) an' increase e0#t.
an' #ro#erties.
Section 1*. Procee'in&s of the /oission, !#on notice
an' hearin&. The /oission sha%% ha-e #o)er, !#on #ro#er notice
an' hearin& in accor'ance )ith the r!%es an' #ro-isions of this Act,
s!$.ect to the %iitations an' e(ce#tions entione' an' sa-in&
#ro-isions to the contrary.
<a= To iss!e certificates ... a!thori"in& the o#eration of #!$%ic
ser-ices )ithin the Phi%i##ines, )hene-er the /oission fin's that
the o#eration of the #!$%ic ser-ice #ro#ose' an' the a!thori"ation to
'o $!siness )i%% #roote the #!$%ic interest in a #ro#er an' s!ita$%e
anner. Pro-i'e', that certificates )i%% $e &rante' on%y to citi"ens of
the Phi%i##ines or of the CS or to cor#s., co6#artnershi#s, associations
or .oint stoc2 co#anies constit!te' an' or&ani"e' !n'er the %a)s of
the Phi%i##ines@ Pro-i'e', that *+, of the stoc2 or #ai'6!# ca#ita% ...
!st $e%on& entire%y to citi"ens of the Phi%i##ines or of the CS@
Pro-i'e', f!rther, that no s!ch certificate sha%% $e iss!e' for a #erio'
of ore than B+ years.
<$= To a##ro-e, s!$.ect to constit!tiona% %iitations any
franchise, #ri-i%e&e &rante' !n'er the #ro-isions of Act No. **1, as
aen'e' $y Act. No. 1+DD, $y any #o%itica% s!$'i-ision of the
Phi%i##ines )hen, in the .!'&ent of the /oission, s!ch franchise
or #ri-i%e&e )i%% #ro#er%y conser-e the #!$%ic interests (((
<c= To fi( an' 'eterine in'i-i'!a% or .oint rates, to%%s,
char&es, c%assifications, or sche'!%es thereof, as )e%% as co!tation,
i%ea&e, 2i%oetra&e, an' other s#ecia% rates )hich sha%% $e i#ose',
o$ser-e' an' fo%%o)e' thereafter $y any #!$%ic ser-ice @ Pro-i'e',
f!rther that in case the #!$%ic ser-ice e0!i#ent of an o#erator is !se'
#rinci#a%%y or secon'ari%y for the #rootion of a #ri-ate $!siness, the
net #rofits of sai' $!siness sha%% $e consi'ere' in re%ation )ith the
#!$%ic ser-ice of s!ch o#erator for the #!r#ose of fi(in& the rates.
<'= To fi( .!st an' reasona$%e stan'ar's, c%assifications,
re&!%ations, #ractices, eas!reents, or ser-ice to $e f!rnishe',
i#ose', o$ser-e', an' fo%%o)e' thereafter $y any #!$%ic ser-ice.
<e= To ascertain an' fi( a'e0!ate an' ser-icea$%e stan'ar's
for the eas!reent of 0!antity, 0!a%ity, #ress!re, initia% -o%ta&e, or
PAGE 2
TRANSPORTATION AND MARITIME LAW
other con'ition #ertainin& to the s!##%y of the #ro'!ct or ser-ice
ren'ere' $y any #!$%ic ser-ice, an' to #rescri$e reasona$%e
re&!%ations for the e(aination an' test of s!ch #ro'!ct or ser-ice
an' for the eas!reent thereof.
<f= To esta$%ish reasona$%e r!%es, re&!%ations, instr!ctions,
s#ecifications, an' stan'ar's, to sec!re the acc!racy of a%% eters an'
a##%iances for eas!reents.
<&= To co#e% any #!$%ic ser-ice to f!rnish safe, a'e0!ate,
an' #ro#er ser-ice as re&ar's the anner of f!rnishin& the sae as
)e%% as the aintenance of the necessary ateria% an' e0#t.
<h= To re0!ire any #!$%ic ser-ice to esta$%ish, constr!ct,
aintain an' o#erate any reasona$%e e(tension of its e(istin& faci%ities,
)here, in the .!'&ent of sai' coission, s!ch e(tension is
reasona$%e an' #ractica$%e, an' )i%% f!rnish s!fficient $!siness to
.!stify the constr!ction an' aintenance of the sae, an' )hen the
financia% con'ition of the sai' #!$%ic ser-ice reasona$%y )arrants the
ori&ina% e(#en'it!re re0!ire' in a2in& an' o#eratin& s!ch e(tension.
<i= To 'irect any rai%roa', street, rai%)ay or traction co. to
esta$%ish an' aintain at any .!nction or #oint of connection or
intersection )ith any other %ine of sai' roa' or trac2, or )ith any other
%ine of any other rai%roa', street, rai%)ay or traction co., s!ch .!st an'
reasona$%e connection as sha%% $e necessary to #roote the
con-enience of shi##ers of #ro#erty, or of #assen&ers, an' in %i2e
anner to 'irect any rai%roa', street rai%)ay or traction co. en&a&e' in
carryin& erchan'ise, to constr!ct, aintain an' o#erate, !#on
reasona$%e ters, a s)itch connection )ith any #ri-ate si'etrac2
)hich ay $e constr!cte' $y any shi##er to connect )ith the rai%roa',
street rai%)ay or traction co#any %ine )here, in the .!'&ent of the
coission, s!ch connection is reasona$%e an' #ractica$%e, an' can
$e #!t in )ith safety, an' )i%% f!rnish s!fficient $!siness to .!stify the
constr!ction an' aintenance of the sae.
<.= To a!thori"e, in its 'iscretion, any rai%roa', street rai%)ay
of traction co#any to %ay its trac2s across trac2s of any other
rai%roa', street rai%)ay or traction co#any, or across any #!$%ic
hi&h)ay.
<2= To 'irect any rai%roa' or street rai%)ay co. to insta%% s!ch
safety 'e-ices or to a'o#t s!ch other reasona$%e eas!res as ay in
the .!'&ent of the coission $e necessary for the #rotection of the
#!$%ic at #assin& &ra'e crossin&s of <1= #!$%ic hi&h)ays an' rai%roa's,
<D= #!$%ic hi&h)ays an' street rai%)ays, or <;= rai%roa's an' street
rai%)ays.
<%= To fi( an' 'eterine the #ro#er an' a'e0!ate rates of
'e#n. of the #ro#erty of any #!$%ic ser-ice )hich )i%% $e o$ser-e' in
#ro#er an' a'e0!ate 'e#n. acco!nt to $e carrie' for the #rotection of
stoc2ho%'ers, or $on'ho%'ers or cre'itors, in accor'ance )ith s!ch
r!%es, re&!%ations, an' fors of acco!nt as the coission ay
#rescri$e. Sai' rates sha%% $e s!fficient to #ro-i'e the ao!nts
re0!ire' o-er an' a$o-e the e(#enses of aintenance to 2ee# s!ch
#ro#erty in a state of efficiency corres#on'in& to the #ro&ress of the
in'!stry. Each #!$%ic ser-ice sha%% confor its 'e#reciation acco!nts
to the rates so 'eterine' an' fi(e', an' sha%% set asi'e the oney so
#ro-i'e' for o!t of its earnin&s an' carry the sae in a 'e#reciation
f!n'. The incoe fro s!ch in-estents of oney in s!ch f!n' sha%%
%i2e)ise $e carrie' in s!ch f!n'. This f!n' sha%% not $e e(#en'e'
other)ise than for 'e#reciation, i#ro-eents, e(tensions, ne)
constr!ctions or a''itions to the #ro#erty of s!ch #!$%ic ser-ice.
<= To aen', o'ify or re-o2e at any tie any certificate
!n'er the #ro-isions of this act, )hene-er the facts an' circ!stances
on the stren&th of )hich sai' certificate )as iss!e' ha-e $een
isre#resente' or ateria%%y chan&e'.
<n= To s!s#en' or re-o2e any certificate iss!e' !n'er the
#ro-isions of this act )hene-er the ho%'er thereof has -io%ate' or
)i%%f!%%y an' cons!ate'%y ref!se' to co#%y )ith any or'er, r!%e or
re&!%ation of the coission or any #ro-isions of this act9 Pro-i'e',
that the coission for &oo' ca!se, ay #rior to the hearin& s!s#en'
for a #erio' not e(cee'in& ;+ 'ays any certificate or the e(ercise of
any ri&ht or a!thority iss!e' or &rante' !n'er this act $y or'er of the
coission, )hene-er s!ch ste# sha%% in the .!'&ent of the
coission $e necessary to a-oi' serio!s an' irre#ara$%e 'aa&e or
incon-enience to the #!$%ic or to #ri-ate interests.
<o= To fi(, 'eterine, an' re&!%ate, as the con-enience of the
state ay re0!ire, a s#ecia% ty#e for a!to $!ses, tr!c2s an' otor
tr!c2s, to $e hereafter constr!cte', #!rchase', an' o#erate' $y
o#erators after the a##ro-a% of this act@ to fi( an' 'eterine a s#ecia%
re&istration fee for a!to6$!ses, tr!c2s an' otor tr!c2s so
constr!cte', #!rchase', an' o#erate'9 Pro-i'e', that sai' fees sha%%
$e sa%%er than those char&e' for a!to6 $!ses, tr!c2s, an' otor
tr!c2s of ty#es not a'e re&!%ation !n'er this s!$section.
Section 11. Procee'in&s of coission )itho!t #re-io!s
hearin&9
<a= To in-esti&ate, !#on its o)n initiati-e, or !#on co#%aint
in )ritin&, any atter concernin& any #!$%ic ser-ice as re&ar's
atters !n'er its .!ris'iction@ to re0!ire any #!$%ic ser-ice to f!rnish
safe, a'e0!ate an' #ro#er ser-ice as the #!$%ic interest ay re0!ire
an' )arrant@ to enforce co#%iance )ith any stan'ar' ((( an' to
#rohi$it or #re-ent any #!$%ic ser-ice fro o#eratin& )itho!t first
sec!rin& a certificate of #!$%ic con-enience or #!$%ic necessity an'
con-enience ((( an' re0!ire e(istin& #!$%ic ser-ices to #ay the fees
#ro-i'e' for in this act for the iss!ance of the #ro#er certificate (((
!n'er the #ena%ty, in the 'iscretion of the coission, of the
re-ocation an' cance%%ation of any ac0!ire' ri&ht.
<$= To re0!ire #ayent of act!a% e(#enses inc!rre' in any
in-esti&ation if a -io%ation sha%% $e fo!n'@ to assess costs not to
e(cee' DB, )ith reference to s!ch in-esti&ation
<c= To a##raise an' -a%!e the #ro#erty of any #!$%ic ser-ice@
in re%ation thereto, to ha-e access to an' !se any $oo2s, 'oc!ents or
recor's in the #ossession of any &o-t. 'e#t., $!rea!, office, or #o%itica%
s!$'i-ision
<'= To #ro-i'e, on otion $y or at the re0!est of any
cons!er, for the e(aination an' test of any a##%iance !se' for the
eas!rin& of any #ro'!ct or ser-ice of a #!$%ic ser-ice, to enter any
#reises )here sai' a##%iances ay $e, an' other #reises of the
#!$%ic ser-ice, for the #!r#ose of settin& !# an' !sin& on sai'
#reises any a##arat!s necessary therefor, an' to fi( fees to $e #ai'
$y the cons!er )ho ay a##%y for s!ch e(aination, an' in case of
'efect, to ref!n' the fees #ai'
<e= To #erit any street rai%)ay or traction co#any to
chan&e its e(istin& &a!&e to stan'ar' stea rai%roa' &a!&e
<f= To &rant any #!$%ic ser-ice s#ecia% #erits to a2e e(tra
or s#ecia% tri#s )ithin the territory co-ere' $y its certificate an' to
a2e s#ecia% e(c!rsions o!tsi'e if the #!$%ic interest or s#ecia%
circ!stances so re0!ire@ Pro-i'e' )here the #!$%ic ser-ice cannot
ren'er s!ch e(tra ser-ice on its o)n %ine or in its o)n territory, a
s#ecia% #erit for s!ch e(tra ser-ice ay $e &rante' to any other
#!$%ic ser-ice
<&= To re0!ire any #!$%ic ser-ice to 2ee# its $oo2s, recor's,
an' acco!nts@ to a'o#t a !nifor syste of acco!ntin& as a##ro-e'
$y the a!'itor &enera%
<h= To re0!ire any #!$%ic ser-ice to f!rnish ann!a% re#orts of
finances an' o#erations, co-erin& the 1D onth #erio' en'in&
Dece$er ;1
<i= To re0!ire e-ery #!$%ic ser-ice to fi%e )ith the
coission a )ritten, -erifie' stateent a'e $y the o)ner, #resi'ent
or secretary settin& forth the officers, a!thority, #o)er an' '!ties of
e-ery officer, as to 'isc%ose the so!rce an' ori&in of each
a'inistrati-e act or r!%e
<.= To re0!ire any #!$%ic ser-ice to co#%y )ith the %a)s of
the Phi%i##ines an' )ith any %oca% reso%!tion or or'inance or its
charter
<2= To in-esti&ate acci'ents 'irect%y or in'irect%y arisin& fro
or connecte' )ith the aintenance or o#eration of the #!$%ic ser-ice
<%= To re0!ire e-ery #!$%ic ser-ice to fi%e a co#%ete sche'!%e
of e-ery c%assification, in'i-i'!a% or .oint rate, to%%, fare or char&e, an'
in case of #!$%ic carriers, a co#%ete stateent of itineraries or ro!tes
o Section 13 6 It sha%% $e !n%a)f!% for any in'i-i'!a%, co6 #artnershi#,
association, cor#oration or .oint6stoc2 co#any, their %essees, tr!stees
or recei-ers ((( to en&a&e in any #!$%ic ser-ice $!siness )itho!t
ha-in& first sec!re' fro the coission a certificate, e(ce#t &rantees
PAGE 3
TRANSPORTATION AND MARITIME LAW
of %e&is%ati-e franchises e(#ress%y e(e#tin& s!ch &rantee fro the
re0ts of sec!rin& a certificate fro the coission, as )e%% as those
e(#ress%y e(e#te' fro the .!ris'iction of the coission
Section 15. Cn%a)f!% acts 6 It sha%% $e !n%a)f!% for any
#!$%ic ser-ice 9
<a= To #ro-i'e or aintain any ser-ice that is !nsafe,
i#ro#er or ina'e0!ate ,or )ithho%' or ref!se any ser-ice )hich can
reasona$%y $e 'ean'e' an' f!rnishe', as fo!n' an' 'eterine' $y
the coission in a fina% or'er )hich sha%% $e conc%!si-e an' sha%%
ta2e effect in accor'ance )ith this act, !#on a##ea% or other)ise.
<$= To a2e or &i-e, 'irect%y or in'irect%y, $y itse%f or thro!&h
its a&ents, attorneys or $ro2ers, or any of the, 'isco!nts or re$ates
on a!thori"e' rates, or &rant cre'it for the #ayent of frei&ht char&es,
or any !n'!e or !nreasona$%e #reference or a'-anta&e to any #erson
or cor#oration or to any %oca%ity or to any #artic!%ar #erson or
cor#oration or %oca%ity or any #artic!%ar 'escri#tion of traffic or
ser-ice, or s!$.ect any #artic!%ar #erson or cor#oration or %oca%ity or
any #artic!%ar 'escri#tion of traffic to any #re.!'ice or 'isa'-anta&e in
any res#ect )hatsoe-er@ to a'o#t, aintain, or enforce any re&!%ation,
#ractice or eas!reent )hich sha%% $e fo!n' or 'eterine' $y the
coission to $e !n.!st, !nreasona$%e, !n'!%y #referentia%, or
!n.!st%y 'iscriinatory, in a fina% or'er )hich sha%% $e conc%!si-e an'
sha%% ta2e effect in accor'ance )ith the #ro-isions of this act, !#on
a##ea% or other)ise.
<c= To ref!se or ne&%ect, )hen re0!este' $y the 'irector of
#osts or his a!thori"e' re#resentati-e to carry #!$%ic ai% on the
re&!%ar tri#s of any #!$%ic %an' trans#ortation ser-ice aintaine' or
o#erate' $y any s!ch #!$%ic ser-ice, !#on s!ch ters an' con'itions
an' for a consi'eration in s!ch ao!nt as ay $e a&ree' !#on
$et)een the Director of Posts an' the #!$%ic ser-ice carrier or fi(e' $y
the coission in the a$sence of an a&reeent $et)een the Director
of Posts an' the carrier. In case the Director of Posts an' the #!$%ic
ser-ice carrier are !na$%e to a&ree on the ao!nt of the co#ensation
to $e #ai' for the carria&e of the ai%, the Director of Posts sha%%
forth)ith re0!est the coission to fi( a .!st an' reasona$%e
co#ensation for s!ch carria&e an' the sae sha%% $e #ro#t%y fi(e'
$y the coission in accor'ance )ith section 1* of this act.
Section D+. Acts re0!irin& the a##ro-a% of the /oission 6
S!$.ect to esta$%ishe' %iitations an' e(ce#tions an' sa-in&
#ro-isions to the contrary, it sha%% $e !n%a)f!% for any #!$%ic ser-ice or
for the o)ner, %essee or o#erator thereof, )itho!t the a##ro-a% an'
a!thori"ation of the /oission #re-io!s%y ha' 6
<a= To a'o#t, esta$%ish, fi(, i#ose, aintain, co%%ect or carry
into effect any in'i-i'!a% or .oint rates, co!tation, i%ea&e or other
s#ecia% rate, to%%, fare, char&e, c%assification or itinerary. The
/oission sha%% a##ro-e on%y those that are .!st an' reasona$%e an'
not nay that are !n.!st%y 'iscriinatory or !n'!%y #referentia%, on%y
!#on reasona$%e notice to the #!$%ic ser-ices an' other #arties
concerne', &i-in& the a reasona$%e o##ort!nity to $e hear' an' the
$!r'en of the #roof to sho) that the #ro#ose' rates or re&!%ations are
.!st an reasona$%e sha%% $e !#on the #!$%ic ser-ice #ro#osin& the
sae.
<$= To esta$%ish, constr!ct, aintain or o#erate ne) !nits or
e(ten' e(istin& faci%ities or a2e any other a''ition to or &enera%
e(tension of the ser-ice.
<e= Eereafter to iss!e any stoc2 or stoc2 certificates
re#resentin& an increase of ca#ita%@ or iss!e any share of stoc2 )itho!t
#ar -a%!e@ or iss!e any $on's or other e-i'ence of in'e$te'ness
#aya$%e in ore than one year fro the iss!ance thereof, #ro-i'e' that
it sha%% $e the '!ty of the /oission, after hearin&, to a##ro-e any
s!ch iss!e at!rin& in ore than one year fro the 'ate thereof, )hen
satisfie' that the sae is to $e a'e in accor'ance )ith %a), an' the
#!r#ose of s!ch iss!e $e a##ro-e' $y the /oission.
<&= To se%%, a%ienate, ort&a&e, enc!$er or %ease its
#ro#erty, franchises, certificates, #ri-i%e&es or ri&hts or any #art
thereof@ or er&e or conso%i'ate its #ro#erty, franchises, #ri-i%e&es or
ri&hts, or any #art thereof, )ith those of any #!$%ic ser-ice. The
a##ro-a% herein re0!ire' sha%% $e &i-en, after notice to the #!$%ic an'
after hearin&, if it $e sho)n that there are .!st an' reasona$%e &ro!n's
for a2in& the ort&a&e or enc!$rance, for %ia$i%ities of ore than
one year at!rity, or the sa%e, a%ienation, %ease , er&er or
conso%i'ation to $e a##ro-e', an' that the sae are not 'etrienta% to
the #!$%ic interest, an' in case of a sa%e, the 'ate on )hich the sae is
to $e cons!ate' sha%% $e fi(e' in the or'er of a##ro-a%9 Pro-i'e',
ho)e-er, that nothin& herein containe' sha%% $e constr!e' to #re-ent
the transaction fro $ein& ne&otiate' or co#%ete' $efore its a##ro-a%
or to #re-ent the sa%e, a%ienation, or %ease $y any #!$%ic ser-ice of any
of its #ro#erty in the or'inary co!rse of its $!siness.
<h= To se%% or re&ister in its $oo2s the transfer or sa%e of
shares of its ca#ita% stoc2, if the res!%t of that sa%e in itse%f or in
connection )ith another #re-io!s sa%e, sha%% $e to -est in the
transferee ore than ?+, of the s!$scri$e' ca#ita% of sai' #!$%ic
ser-ice. Any transfer a'e in -io%ation of this #ro-ision sha%% $e -oi'
an' of no effect an' sha%% not $e re&istere' in the $oo2s of the #!$%ic
ser-ice cor#oration. Nothin& herein containe' sha%% $e constr!e' to
#re-ent the ho%'in& of shares %a)f!%%y ac0!ire'.
<i= To se%%, a%ienate or in any anner transfer shares of its
ca#ita% stoc2 to any a%ien if the res!%t of that sa%e, a%ienation, or
transfer in itse%f or in connection )ith another #re-io!s sa%e sha%% $e
the re'!ction to %ess than *+, of the ca#ita% stoc2 $e%on&in& to
Phi%i##ine citi"ens. S!ch sa%e, a%ienation or transfer sha%% $e -oi' an'
of no effect an' sha%% $e s!fficient ca!se for or'erin& the cance%%ation
of the certificate.
#b$ 2he Certificate of Public Con)enience
#CPC$, the Certificate of Public Con)enience and
4ecessit' #CPC4$, and the Prior >&erator Rule
Eifference bet*een CPC and CPC4 = A CPC4 is issued b' the P3C to a
&ublic ser)ice to *hich an' &olitical subdi)ision has granted a franchise
under Act //" after the P3C has a&&ro)ed the same under 3ection 1/#b$. A
CPC is an' authoriAation to o&erate a &ublic ser)ice issued b' the P3C. A
CPC is an authoriAation issued b' the Commission for the o&eration of
&ublic ser)ices for *hich no franchise, either munici&al or legislati)e, is
re+uired b' la* #e.g. auto6truc:s and motor )ehicles$. A CPC4 is an
authoriAation issued b' the P3C for the o&eration of &ublic ser)ices for
*hich a franchise is re+uired b' la* #e.g. electric, tele&hone ser)ices$.
4ature of certificate = It constitutes neither a franchise nor a contract,
confers no &ro&ert' rights and is a mere license or &ri)ilege, and such
&ri)ilege is forfeited *hen the grantee fails to com&l' *ith his commitments
behind *hich lies the &aramount interest of the &ublic, for &ublic necessit'
cannot be made to *ait, nor sacrificed for &ri)ate con)enience.
Co*e)er, certificates re&resent &ro&ert' rights to the e7tent that if
the rights *hich an' &ublic utilit' is e7ercising &ursuant to la*ful orders of
the P3C has been in)aded b' another &ublic utilit', in a&&ro&riate cases
actions ma' be maintained b' the com&lainant &ublic utilit'. >*ners of
&ublic utilities ha)e the right to maintain a&&ro&riate actions against other
&ublic utilities not authoriAed to o&erate in com&etition *ith the com&lainant.
Certificates are considered as &ro&ert' as used in Ci)il
Procedure as the' ha)e material )alue and are material assets. 2he' are
subBect to attachment and seiAure b' legal &rocess, and ma' be ac+uired b'
&urchase.
Eetermination of %>4 an issuance of a certificate is for &ublic con)enience
6 #1$ financial res&onsibilit' of the a&&licant, #-$ reliabilit' of the a&&licant, #;$
&riorit' of filing the a&&lication for a certificate, and #0$ &riorit' of o&eration
Prior o&erator rule 6 to carr' out the &ur&ose and intent for *hich the P3C
*as created the la* contem&lates that the first licensee *ill be &rotected in
his in)estment and *ill not be subBected to a ruinous com&etition. It is not
therefore the &olic' of the la* for the P3C to issue a CPC to a second
o&erator to co)er the same field and in com&etition *ith a first o&erator *ho
is rendering sufficient, ade+uate and satisfactor' ser)ice, and *ho in all
things and res&ects is com&l'ing *ith the rules and regulations of the P3C.
Accordingl', a CPC or CPC4 ought not to be granted *here there is no
com&laint as to e7isting rates and the co. in the field is rendering ade+uate
ser)ices.
6 regular o&erators are &referred o)er irregular o&erators
6 &rior o&erator is gi)en o&&ortunit' to im&ro)e ser)ice
6 &rior o&erator gi)en o&&ortunit' to e7tend lines
6 basis of rule = to &re)ent ruinous and *asteful com&etition in order that the
interests of the &ublic *ould be conser)ed and &reser)edG so long as the
o&erator com&lied *ith the terms and conditions of the license and the
reasonable demands of the &ublic, it is the dut' of the P3C to &rotect rather
than to destro' its in)estment
Ra'mundo )s Funeta @otor 1! Phil !!
PAGE 4
TRANSPORTATION AND MARITIME LAW
<= 4icanor de GuAman signing as GuAco 2ransit &urchased truc:s
from Funeta @otor and e7ecuted P4s guaranteed b' a chattel mortgage on
se)eral truc:s. <ailing to &a' the P4s, a suit for collection *as filed. A *rit
of attachment *as issued and garnishment *as ser)ed on the P3C
attaching the right, title, and &artici&ation of GuAco 2ransit in the CPC
co)ering the bus trans&ortation lines bet*een @anila and RiAal. 2he C<I
ordered the selling of these certificates in a &ublic bidding in *hich Funeta
@otor *as the highest bidder.
4ine da's after the certificates *ere attached, these *ere sold to
Ra'mundo #including certificate 4o. -111 *hich *as not included in the
sale to Funeta @otor Co.$. 2he a&&ro)al of the sale *as sought from the
P3C. 2he P3C a&&ro)ed the sale in the &ublic bidding and disa&&ro)ed the
sale to Ra'mundo e7ce&t *ith res&ect to Certificate 4o. -111 *hich
Ra'mundo could a&&l' for its a&&ro)al.
Issue = %hich of the t*o sales should &re)ail( &ublic auction b' )irtue of an
attachment )s )oluntar' sale
Celd = 3ale to Funeta @otor Co. in a &ublic auction
2he Public 3er)ice Fa* authoriAes certificates of &ublic
con)enience to be secured b' &ublic ser)ice o&erators from the P3C. A
CPC grants a right in the nature of a limited franchise. 2he Code of Ci)il
Procedure does not e7clude franchises or certificates from the *ord
5&ro&ert'.5 2he test b' *hich to determine %>4 a &ro&ert' can be
attached and sold u&on e7ecution is *hether the Budgment debtor has such
a beneficial interest therein that he can sell or other*ise dis&ose of it for
)alue. 2he Public 3er)ice Fa* &ermits the P3C to a&&ro)e the sale,
alienation, mortgaging, encumbering or leasing of &ro&ert', franchises,
&ri)ileges, or rights or an' &art thereof. If the holder of a certificate can
)oluntar' sell it, there is no reason *h' the same cannot be sold
in)oluntaril' &ursuant to court &rocess.
CPCs ha)e considerable material )alue. 2he' are )aluable
assets. 2he' are subBect to being sold for consideration as much as an'
other &ro&ert'. 2he' are e)en more )aluable than ordinar' &ro&erties,
ta:ing into consideration that the' are not granted to e)er' one *ho a&&lies
for them but onl' to those *ho underta:e to furnish satisfactor' and
con)enient ser)ice to the &ublic. 2hough intangible, the' are of )alue and
are considered &ro&erties *hich can be seiAed through legal &rocess.
Batangas 2rans&ortation Co. )s >rlanes 1- Phil 011
<= >rlanes sought to ha)e a CPC to o&erate a line of auto truc:s
*ith fi7ed times of de&arture bet*een 2aal and Bantilan, *ith the right to
recei)e &assengers and freight from intermediate &oints. 2he e)idence is
conclusi)e that at the time of his a&&lication, >rlanes *as an irregular
o&erator bet*een Bantilan and 2aal, and that B2C *as a regular o&erator
bet*een Batangas and Rosario. >rlanes sought to ha)e his irregular
o&eration changed into a regular o&eration, and to set aside and nullif' the
&rohibition against him in his CPC that he shall not ha)e or recei)e an'
&assengers or freight at an' of the &oints ser)ed b' the B2C *hich holds a
&rior license from the P3C. Cis &etition is based on the fact that to com&l'
*ith the gro*ing demands of the &ublic, the B2C a&&lied for a &ermit to
increase the no. of tri& hours at and bet*een the same &laces and for an
order that all irregular o&erators be &rohibited from o&erating unless the'
should obser)e an inter)al of - hours before or one hour after the regular
hours of the B2C. 2he P3C granted the &etition of >rlanes.
Issue = %>4 a CPC should be issued to a second o&erator in a field *here,
and in com&etition *ith, a first o&erator *ho is alread' o&erating a sufficient,
ade+uate and satisfactor' ser)ice.
Celd = 4>. Eecision of P3C is re)o:ed.
An autobus line is a &ublic utilit', and as such, is a common
carrier and an im&t. factor in the business affairs of the communit'.
2he P3C has the &o*er to s&ecif' and define the terms and
conditions u&on *hich an' &ublic utilit' shall o&erate and to ma:e
reasonable rules and regulations for its o&eration, and to fi7 the
com&ensation that it shall recei)e for its ser)ice to the &ublic, and for good
cause ma' sus&end or e)en re)o:e a license granted.
It is not the &olic' of the la* for the P3C to issue a CPC to a
second o&erator to co)er the same field and in com&etition *ith a first
o&erator *ho is rendering sufficient, ade+uate and satisfactor' ser)ice, and
*ho in all things and res&ects is com&l'ing *ith the rules and regulations of
the P3C.
2he &o*er of the P3C to issue a CPC is founded on the
condition &recedent that after a full hearing and in)estigation, it shall find as
a fact that the &ro&osed o&eration is for the con)enience of the &ublic.
3o long as the first o&erator :ee&s and &erforms his terms and
conditions of its license and com&lies *ith the reasonable demands of the
&ublic, it has more or less of a )ested and &referential right o)er another
*ho see:s to ac+uire a later license to o&erate o)er the same route.
2o carr' out the &ur&ose and intent for *hich the P3C *as
created, the la* contem&lates that the first license *ill be &rotected in his
in)estment and *ill not be subBected to ruinous com&etition.
2he &rimar' &ur&ose of the P3C is to secure ade+uate,
sustained ser)ice for the &ublic at the least &ossible cost and to &rotect and
conser)e in)estments *hich ha)e alread' been made for that &ur&ose. A
CPC4 for the o&eration of an auto truc: line in occu&ied territor' should not
be granted *here there is no com&laint as to e7isting rates and the co. in
the field is rendering ade+uate ser)ice. It is the dut' of the P3C to &rotect
rather than to destro' the in)estment of a &ublic utilit'.
2he &olic' of regulation u&on *hich the &resent &ublic utilit'
commission &lan is based and *hich tends to do a*a' *ith com&etition
among &ublic utilities as the' are natural mono&olies, is at once the reason
that the regulation of an e7isting s'stem of trans&ortation, *hich is &ro&erl'
ser)ing a gi)en field, or ma' be re+uired to do so, is to be &referred to
com&etition among se)eral inde&endent s'stems. %hile re+uiring a &ro&er
ser)ice from a single s'stem for a territor' in consideration for &rotecting it
as a mono&ol' for all the ser)ice re+uired and in conser)ing its resources,
no economic *aste results and ser)ice ma' be furnished at a minimum
cost.
Carmelo )s @onserrat 11 Phil /00
<= @onserrat t*ice a&&lied to Congress for an e7clusi)e franchise to
o&erate a ta7icab ser)ice in @anila. 2he Go)ernor General t*ice )etoed the
bill. @onserrat then a&&lied to the P3C for a CPC. It *as granted.
Carmelo and >riol then a&&lied to the P3C for a CPC to o&erate
a ta7icab ser)ice *ithin @anila. @onserrat o&&osed. 2he P3C denied the
a&&lication.
Celd = 2here is no )alid, legal reason *h' @onserrat should ha)e the
e7clusi)e right of o&erating a ta7icab ser)ice. In the granting and refusal of
a CPC, the +uestion is *hat is for the best interest of the &ublic. 2ested b'
that rule, it is hard to concei)e ho* it *ould be for the best interests of the
&ublic to ha)e one ta7icab ser)ice onl', and ho* the &ublic *ould be inBured
b' the granting of the certificate in +uestion, for it must be conceded that
t*o com&anies in the field *ould stimulate the business, and the &ublic
*ould much sooner and much easier become educated in the use of ta7i.
@onserrat does not ha)e a )ested right in the business of an'
&erson that might *ant the use of a ta7i, for the sim&le reason that the use
of an' ta7i is the sole discretion of the customer. 2his is unli:e the B2C
case *hich dealt *ith an autobus ser)ice *ith fi7ed schedules and routes.
3an Pablo )s Pantranco 3outh D7&ress, Inc. 11; 3CRA 1
<= Pantranco o&erates &assenger buses from @etro @anila to Bicol
and Dastern 3amar. It *rote to the @aritime Industr' Authorit' #@ARI4A$
re+uesting authorit' to leaseI&urchase @. Blac: Eouble to be used in
o&erating a ferr'boat ser)ice from @atnog, 3orsogon and Allen, 3amar that
*ill &ro)ide ser)ice to co. buses and freight truc:s that ha)e to cross the
Bernardo 3trait. @ARI4A denied the &etition on the ground that the @atnog6
Allen run is ade+uatel' ser)iced b' the Cardinal 3hi&&ing Cor&. and D&itacio
3an Pablo and that mar:et conditions cannot su&&ort the entr' of additional
tonnage.
Pantranco ac+uired the )essel. It then a&&lied to B>2 claiming
that it can o&erate a ferr' ser)ice in connection *ith its franchise for bus
o&eration in the high*a' from Pasa' Cit' to 2acloban Cit' for the &ur&ose of
continuing the high*a', *hich is interru&ted b' a small bod' of *ater, and
that the &ro&osed ferr' o&eration is merel' a necessar' and incidental
ser)ice to its main ser)ice and obligation of transferring &assengers from
Pasa' Cit' to 2acloban Cit'. Accdg. to it, there is no need to obtain a
se&arate CPC to o&erate a ferr' ser)ice to cater e7clusi)el' to its &assenger
buses and ferr' truc:s. Pantranco began o&erating its ferr' ser)ice. 2he
B>2 held that the ferr'boat ser)ice is &art of PantrancoHs CPC and
amended PantrancoHs CPC to &ro)ide so. 2he t*o other ferr' boat ser)ices
filed motions for reconsideration.
Issue = %>4 the sea can be considered as a continuation of the high*a'.
%>4 a land trans&o co. can be authoriAed to o&erate a ferr' ser)ice or
coast*ise or interisland shi&&ing ser)ice along its authoriAed route as an
incident to its franchise *ithout the need of filing a se&arate a&&lication for
the same.
Celd = 2he *ater trans&ort ser)ice bet*een @atnog and Allen is not a
ferr'boat ser)ice but a coast*ise or interisland shi&&ing ser)ice. Before
&ri)ate res&ondent ma' be issued a franchise or CPC for the o&eration of
the said ser)ice as a common carrier, it must com&l' *ith the usual re+ts. of
PAGE 5
TRANSPORTATION AND MARITIME LAW
filing an a&&lication, &a'ment of the fees, &ublication, adducing e)idence at
a hearing and affording the o&&ositors the o&&ortunit' to be heard.
Considering the en)ironmental circumstances of the case, the
con)e'ance of &assengers from @atnog to Allen is not a ferr'boat ser)ice
but a coast*ise or interisland shi&&ing ser)ice. Under no circumstances
can the sea bet*een @atnog and Allen be considered a continuation of the
high*a'. %hile a ferr'boat ser)ice has been considered as a continuation
of the high*a' *hen crossing ri)ers or e)en la:es, *hich are small bod' of
*aters se&arating the land, ho*e)er, *hen as in this case the t*o terminals
are se&arated b' an o&en sea, it cannot be considered a continuation of the
high*a'. Pantranco must secure a se&arate CPC for the o&eration of an
interisland or coast*ise shi&&ing ser)ice. Its CPC cannot be merel'
amended to include this *ater ser)ice under the guise that it is a mere
&ri)ate ferr' ser)ice.
Pantranco does not den' that it charges its &assengers
se&aratel' from the charges for the bus tri&s and issues se&arate tic:ets
*hene)er the' board the @. Blac: Eouble. It cannot &retend that it issued
tic:ets as a &ri)ate carrier and not as a common carrier. It in fact acce&ts
*al: in &assengers during the tri&s. It cannot claim that it is both a &ri)ate
carrier and a common carrier at the same time.
In the case of ,a)ellana )s P3C, the Court differentiated bet*een
ferr' ser)ice and interisland or coast*ide ser)ice. <err' means ser)ice
either b' barges or rafts, e)en b' motor or steam )essels, bet*een the
ban:s of a ri)er or stream to continue the high*a' *hich is interru&ted b' a
bod' of *ater, or in some cases, to connect t*o &oints on o&&osite shores
of an arm of the sea such as a ba' or la:e *hich does not in)ol)e too great
a distance or too long a time to na)igate. But *here the line or ser)ice
in)ol)es crossing a bod' of *ater *hich is *ide and dangerous *ith big
*a)es, then such line or ser)ice belongs &ro&erl' to interisland or coast*ide
trade.
;. Pri)ate nature= rights and obligations of &arties
inter se arising from transactions relating to trans&ortation
#a$ absent a trans&ortation contract
#b$ arising from a trans&ortation contract
#i$ contract of trans&ortation,
defined 6 one *hereb' a certain &erson or
association of &ersons obligate themsel)es
to trans&ort &ersons, things or ne*s from
one &lace to another for a fi7ed &rice
#ii$ contract of trans&ortation,
elements
Parties to the contract 9
1. shipper 6 one *ho gi)es rise to the contract of trans&ortation
b' agreeing to deli)er the things or ne*s to be trans&orted, or to &resent his
o*n &erson or those of other or others in the case of trans&ortation of
&assengers
-. carrier or conductor 6 one *ho binds himself to trans&ort
&ersons, things, or ne*s as the case ma' be or one em&lo'ed in or
engaged in the business of carr'ing goods for others for hire
Persons or cor&orations *ho underta:e to trans&ort or con)e'
goods, &ro&ert', or &ersons from one &lace to another, gratuitousl' or for
hire, and are classified as &ri)ate or s&ecial carriers and common or &ublic
carriers
C. Regulation of the 2rans&ortation Industr'
J 2he Ee&artment of 2rans&ortation and
Communications
EO 1DB, Sec. ?. Man'ate. The DOT/ sha%% $e the #riary
#o%icy, #%annin&, #ro&rain&, coor'inatin&, i#%eentin&,
re&!%atin&, an' a'inistrati-e entity of the E(ec!ti-e Franch of the
&o-t. in the #rootion, 'e-t. an' re&!%ation of 'e#en'a$%e an'
coor'inate' net)or2s of trans#ortation an' co!nication systes,
as )e%% as in the fast, safe, efficient, an' re%ia$%e #osta%, trans#ortation
an' co!nication ser-ices.
To acco#%ish s!ch an'ate, the De#t. sha%% ha-e the ff.
o$.ecti-es9
<a= #roote the 'e-t. of 'e#en'a$%e an' coor'inate'
net)or2s of trans#ortation an' co!nication systes@
<$= &!i'e &o-t. an' #ri-ate in-estents in the 'e-t. of the
co!ntryGs inter6o'a% trans#ortation an' co!nication syste in a
ost #ractica%, e(#e'itio!s, an' or'er%y fashion for a(i! safety,
ser-ice an' cost effecti-eness@
<c= i#ose a##ro#riate eas!res so that technica%,
econoic an' other con'itions for the contin!in& econoic -ia$i%ity
of the trans#ortation an' co!nication entities are not .eo#ar'i"e'
an' 'o not enco!ra&e inefficiency an' 'istortion of traffic #atrona&e@
<'= 'e-e%o# an inte&rate' #%an for a nation)i'e transission
syste in accor'ance )ith nationa% an' int%. te%eco!nications
ser-ice re0ts. inc%!'in&, aon& others, ra'io an' te%e-ision $roa'cast
re%ayin& %ease' channe% ser-ices an' 'ata transission@
<e= &!i'e &o-t. an' #ri-ate in-estents in the esta$%ishent,
o#eration an' aintenance of an int%. s)itchin& syste for incoin&
an' o!t&oin& te%eco!nication ser-ices@
<f= enco!ra&e the 'e-t. of a 'oestic te%eco!nications
in'!stry in coor'ination )ith the concerne' entities #artic!%ar%y, the
an!fact!re of co!nications:e%ectronics e0!i#ent an'
co#onents to co#%eent an' s!##ort, as !ch as #ossi$%e, the
e(#ansion, 'e-e%o#ent, o#eration an' aintenance of the nation)i'e
te%eco!nication net)or2@
<&= Pro-i'e for a safe, re%ia$%e an' efficient #osta% syste for
the co!ntry.
EO 1DB6A, Sec. B. To acco#%ish its an'ate, the De#t. sha%%
ha-e the ff. #o)ers an' f!nctions9
<a= for!%ate an' recoen' nationa% #o%icies an'
&!i'e%ines for the #re#aration an' i#%eentation of inte&rate' an'
co#rehensi-e trans#ortation an' co!nications systes at the
nationa%, re&iona% an' %oca% %e-e%s@ <$= esta$%ish an' a'inister
co#rehensi-e an' inte&rate' #ro&ras for trans#ortation an'
co!nications, ((( ca%% on any a&ency, cor#., or or&ani"ation ((( to
#artici#ate an' assist in the #re#aration an' i#%eentation of s!ch
#ro&ra@
<c= assess, re-ie) an' #ro-i'e 'irection to ((( research an'
'e-t. #ro&ras of the &o-t (((@
<'= a'inister an' enforce a%% %a)s ((( in the fie%' of
trans#ortation an' co!nication@
<e= coor'inate )ith the DPWE in the 'esi&n, %ocation, 'e-t,
reha$i%itation, i#ro-eent, etc. of a%% infrastr!ct!re #ro.ects an'
faci%ities of the De#t. (((
<f= esta$%ish, o#erate an' aintain a nation)i'e #osta%
syste (((@
(g) issue certificates of public convenience for the operation
of public land and rail transportation utilities and services;
<h= accre'it forei&n aircraft an' an!fact!res (((@
<i= esta$%ish an' #rescri$e r!%es an' re&!%ations for
i'entification of ro!tes, "ones an':or areas of o#eration of #artic!%ar
o#erator of #!$%ic %an' ser-ices@
<.= esta$%ish an' #rescri$e r!%es ((( for the esta$%ishent,
o#eration an' aintenance of s!ch te%eco!nication faci%ities in
areas not a'e0!ate%y ser-e' $y the #ri-ate sector (((@
<2= esta$%ish an' #rescri$e r!%es ((( o#eration an'
aintenance of a nation)i'e #osta% syste (((@
<%= esta$%ish an' #rescri$e r!%es ((( iss!ance of /P/s for
#!$%ic %an' trans#ortation !ti%ities, s!ch as otor -ehic%es, trio$i%es,
an' rai%)ays@
<= esta$%ish an' #rescri$e r!%es ((( ins#ection an'
re&istration of air an' %an' trans#ortation faci%ities, s!ch as otor
-ehic%es, trio$i%es, an' aircrafts@
<n= esta$%ish an' #rescri$e r!%es ((( iss!ance of %icenses
(((@
<o= esta$%ish an' #rescri$e r!%es ((( enforceent of %a)s
&o-ernin& trans#ortation (((@
<#= 'eterine, fi( an':or #rescri$e char&es an':or rates
#ertinent to the o#eration of #!$%ic air an' %an' trans#ortation !ti%ity
faci%ities an' ser-ices (((@
<0= esta$%ish an' #rescri$e r!%es ((( accre'itation of 'ri-in&
schoo%s@
<r= a'inister an' o#erate the /i-i% A-iation Trainin& /enter
(((@
<s= #erfor s!ch other #o)ers an' f!nctions as it ay $e
#rescri$e' $y %a), or as ay $e necessary, inci'enta%, or #ro#er to its
an'ate, or as ay $e assi&ne' fro tie to tie $y the Presi'ent.
#a$ Air
#i$ Air 2rans&ortation >ffice
PAGE 6
TRANSPORTATION AND MARITIME LAW
EO 1DB, as aen'e' $y EO 1DB6A
Sec. 1+. Assistant Secretaries an' Ser-ice /hiefs.
(((
h= Office of the Assistant Secretary for Air
Trans#ortation
Sec. 11. ((( The #resent Air#ort Offices of the F!rea! of Air
Trans#ortation are here$y a$o%ishe' an' their f!nctions are transferre'
to the De#t. Air#ort Offices. (((
Sec. 1;. (((
'= The /i-i% Aerona!tics Foar' is here$y transferre' fro the
De#t. of To!ris to the De#t. as an attache' a&ency (((. The Secretary
of Trans#ortation an' /o!nications or his 'esi&nate'
re#resentati-e sha%% $e the /hairan of the Foar' (((
Sec. DB, RA 11*. The /i-i% Aerona!tics A'inistration sha%%
$e !n'er the a'inistrati-e s!#er-ision an' contro% of the De#t. of
/oerce an' In'!stry <no) the DOT/= (((
#ii$ Ci)il Aeronautics Board
RA ""/, as amended
Section B. The /i-i% Aerona!tics Foar' sha%% $e co#ose' of
the Secretary of /oerce an' In'!stry <no) DOT/= as /hairan, the
/AF A'inistrator, the /oan'in& Officer of the Phi%. Air Horce, an'
D others to $e a##ointe' $y the Presi'ent (((
Section 1+ <A= E(ce#t as other)ise #ro-i'e' herein, the
Foar' sha%% ha-e the #o)er to re&!%ate the econoic as#ect of air
trans#ortation, an' sha%% ha-e the &enera% s!#er-ision an' re&!%ation
of, an' .!ris'iction an' contro% o-er, air carriers, as )e%% as their
#ro#erty, #ro#erty ri&hts, e0!i#ent, faci%ities, an' franchise, in so far
as ay $e necessary for the #!r#ose of carryin& o!t the #ro-isions of
this Act.
Section 1+ </= Po)ers an' D!ties of the /AF
1. iss!e, 'eny, aen', re-ise, a%ter, o'ify, cance%,
s!s#en', or re-o2e ((( any te#orary o#eratin& #erit or /P/N (((
D. fi( an' 'eterine reasona$%e in'i-i'!a%, .oint or s#ecia%
rates, char&es, or fares )hich an air carrier ay 'ean', co%%ect or
recei-e for any ser-ice in connection )ith air coerce (((
;. a!thori"e charters )hether 'oestic or int%. an' s#ecia%
air ser-ices or f%i&hts (((@
?. a##ro-e or 'isa##ro-e increase of ca#ita%, sa%e of
e0!i#ent of an air carrier en&a&e' in air coerce, conso%i'ation,
er&er, #!rchase, %ease, o#eratin& contract, or ac0!isition an' contro%
$et)een 'oestic air carriers (((
B. in0!ire into the &t. of the $!siness of any air carrier
(((@
*. re0!ire ann!a%, onth%y, #erio'ica% an' s#ecia% re#orts
fro any carrier (((@
1. #rescri$e the fors of any an' a%% acco!nts, recor's, an'
eoran'a of the o-eent of traffic, as )e%% as of the recei#t an'
e(#en'it!res of oney an' the %en&th of tie s!ch acco!nts, recor's,
an' eoran'a sha%% $e #reser-e' (((@
3. re0!ire each officer an' 'irector of any air carrier to
transit a re#ort 'escri$in& the shares of stoc2 or other interest he%'
$y s!ch air carrier )ith any #erson en&a&e' in any #hase of
aerona!tics, an' the ho%'in& of the stoc2 in, an' contro% of, other
#ersons en&a&e' in any #hase of aerona!tics.
Section 11. A /P/N is a #erit iss!e' $y the Foar'
a!thori"in& a #erson to en&a&e in air coerce an':or air
trans#ortation, forei&n an':or 'oestic.
Any #erit ay $e a%tere', aen'e', o'ifie', s!s#en'e',
cance%e' an' re-o2e' $y the Foar' ((( )hene-er the Foar' fin's s!ch
action to $e in the #!$%ic interest.
There sha%% $e attache' to the e(ercise of the #ri-i%e&es (((
s!ch reasona$%e ters, con'itions, or %iitations as, in the .!'&ent
of the Foar', the #!$%ic interest ay re0!ire.
(((

Section 1D. E(ce#t as other)ise #ro-i'e' in the /onstit!tion
an' e(istin& treaty or treaties, a #erit a!thori"in& a #erson to en&a&e
in 'oestic air coerce an':or air trans#ortation sha%% $e iss!e'
on%y to citi"ens of the Phi%i##ines.
#b$ Fand
#i$ Fand 2rans&ortation >ffice
D> 1-16A
Section 5. Assistant Secretaries an' Ser-ice /hiefs
(((
e= Office of the Assistant Secretary for Lan' Trans#ortation
Section 11. ((( The #resent Re&iona% Offices of the Lan'
Trans#ortation /oission are here$y a$o%ishe' an' their f!nctions
are transferre' to the res#ecti-e De#artent Re&iona% offices for Lan'
Trans#ortation. (((
Section 1; <a= The Lan' Trans#ortation /oission is
here$y a$o%ishe' an' its staff f!nctions are transferre' to the ser-ice
offices of the De#t. Pro#er an' %ine f!nctions are transferre' to the
De#t. Re&iona% Offices for Lan' Trans#ortation as #ro-i'e' in Section
11 herein. ((( The 0!asi6.!'icia% #o)ers an' f!nctions of the
/oission are transferre' to the De#t. The corres#on'in& #osition
str!ct!re an' staffin& #attern sha%% $e a##ro-e' an' #rescri$e' $y the
Secretary (((.
Administrati)e Code of 1!", 2itle X.
Sec. 5. The De#artent sha%% ha-e the fo%%o)in& %ine offices 9
<1= The Office of the Assistant Secretary for Lan'
Trans#ortation.
(((
#ii$ Fand 2rans&ortation
<ranchising and Regulator' Board
D> -?-
Sec.1. There is here$y create' in the DOT/, the Lan'
Trans#ortation Hranchisin& an' Re&!%atory Foar'.
Sec.D. The Foar' sha%% $e co#ose' of a /hairan an' D
e$ers )ith the sae ran2, sa%ary an' #ri-i%e&es of an Assistant
Secretary, (((
Sec.?. The Secretary of Trans#ortation an' /o!nications,
thro!&h his '!%y 'esi&nate' Cn'ersecretary, sha%% e(ercise
a'inistrati-e s!#er-ision an' contro% o-er the LTHRF.
Sec.B. Po)ers an' f!nctions9
a. #rescri$e an' re&!%ate ro!tes of ser-ice, ((( "ones or
areas of o#eration of #!$%ic %an' trans#ortation ser-ices #ro-i'e' $y
otori"e' -ehic%es (((@
$. iss!e, aen', re-ise, s!s#en' or cance% /P/s or #erits
a!thori"in& the o#eration of #!$%ic %an' trans#ortation ser-ices
#ro-i'e' $y otori"e' -ehic%es (((@
c. 'eterine, #rescri$e, a##ro-e an' #erio'ica%%y re-ie) an'
a'.!st reasona$%e fares, rates an' other re%ate' char&es, re%ati-e to the
o#eration of #!$%ic %an' trans#ortation ser-ices #ro-i'e' $y otori"e'
-ehic%es@
'. iss!e #re%iinary or #eranent in.!nction (((@
e. #!nish for conte#t of the Foar', $oth 'irect an' in'irect
(((@
f. iss!e s!$#oena an' s!$#oena '!ces tec! an' to
s!on )itnesses to a##ear in any #rocee'in&s of the Foar', to
a'inister oaths an' affirations@
&. con'!ct in-esti&ations an' hearin&s of co#%aints for
-io%ation of the #!$%ic ser-ice %a)s on %an' trans#ortation an' of the
Foar'Gs r!%es an' re&!%ations (((@
h. to re-ie) ot! #ro#rio the 'ecisions, actions of the
Re&iona% Hranchisin& an' Re&!%atory Office herein create'@
i. #ro!%&ate r!%es an' re&!%ations &o-ernin& #rocee'in&s
$efore the Foar' an' the Re&iona% Hranchisin& an' Re&!%atory Office
(((@
.. fi(, i#ose, an' co%%ect, an' #erio'ica%%y re-ie) an' a'.!st
reasona$%e fees an' other re%ate' char&es for ser-ices ren'ere'@
2. for!%ate, #ro!%&ate, a'inister, i#%eent an' enforce
r!%es an' re&!%ations on %an' trans#ortation #!$%ic !ti%ities, stan'ar's
PAGE 7
TRANSPORTATION AND MARITIME LAW
of eas!reents an':or 'esi&n, an' r!%es an' re&!%ations re0!irin&
o#erators of any #!$%ic %an' trans#ortation ser-ice to e0!i#, insta%%
an' #ro-i'e in their !ti%ities an' in their stations s!ch 'e-ices, e0#t.
faci%ities an' o#eratin& #roce'!res an' techni0!es as ay #roote
safety, #rotection, cofort an' con-enience to #ersons an' #ro#erty in
their char&es as )e%% as the safety of #ersons an' #ro#erty )ithin their
areas of o#erations@
%. coor'inate an' coo#erate )ith other &o-t. a&encies an'
entities (((@
. #erfor s!ch other f!nctions an' '!ties as ay $e
#ro-i'e' $y %a), or as ay $e necessary, or #ro#er or inci'enta% to the
#!r#oses an' o$.ecti-es of this E(ec!ti-e Or'er.
Sec.*. The Foar' ((( sha%% sit an' ren'er its 'ecision en
$anc@ ((( conc!rrence an' si&nat!re of at %east D e$ers (((
The 'ecision sha%% $e a##ea%a$%e to the Secretary )ithin ;+
'ays fro recei#t of the 'ecision@ Pro-i'e', that the Secretary ay
ot! #ro#rio re-ie) any 'ecision or action of the Foar' $efore the
sae $ecoes fina%.
Sec.1. There sha%% $e a Re&iona% Hranchisin& an' Re&!%atory
Office in each of the a'inistrati-e re&ions of the co!ntry )hich sha%%
$e hea'e' $y a Foar' Re&iona% Mana&er ha-in& the ran2, sa%ary an'
#ri-i%e&es of a De#t. Assistant Re&iona% Director. The Re&iona%
Hranchisin& an' Re&!%atory Offices sha%% hear an' 'eci'e !nconteste'
a##%ications:#etitions for ro!tes, )ithin their res#ecti-e a'inistrati-e
re&ions9 Pro-i'e', that a##%ications:#etitions for ro!tes e(ten'in& their
res#ecti-e territoria% .!ris'ictions sha%% $e hear' an' 'eci'e' $y the
Foar'.
Administrati)e Code, 2itle X.
Sec. 1B. The 0!asi6.!'icia% #o)ers an' f!nctions )ith
res#ect to %an' trans#ortation sha%% $e e(ercise' thro!&h the Lan'
Trans#ortation an' Re&!%atory Foar'.
Sec. 1*. The Foar' sha%% $e co#ose' of a /hairan an' D
e$ers )ith the ran2, sa%ary an' #ri-i%e&es of an Assistant Secretary,
a%% of )ho sha%% $e a##ointe' $y the Presi'ent !#on the
recoen'ation of the Secretary of Trans#ortation an'
/o!nications (((
Sec. 11. The Foar' sha%% ha-e an E(ec!ti-e Director )ho
sha%% a%so $e a##ointe' $y the Presi'ent (((. Ee sha%% ha-e the ran2,
sa%ary an' #ri-i%e&es of a De#t. Ser-ice /hief. Ee sha%% assist the Foar'
in the #erforance of its #o)ers an' f!nctions.
The Foar' sha%% $e s!##orte' $y the Technica% E-a%!ation
Di-ision, Le&a% Di-ision, Mana&eent Inforation Di-ision,
A'inistrati-e Di-ision an' Hinance Di-ision.
Sec. 13. The Secretary of Trans#ortation an'
/o!nications sha%% e(ercise a'inistrati-e s!#er-ision an' contro%
o-er the Foar'.
Sec. 15. Po)ers an' f!nctions of the Foar'9
1. #rescri$e an' re&!%ate ro!tes (((@
D. iss!e, aen', re-ise, s!s#en', or cance% /P/s or #erits,
(((@
;. 'eterine, #rescri$e, a##ro-e an' #erio'ica%%y re-ie) an'
a'.!st reasona$%e fares (((@
?. iss!e in.!nctions (((@
B. #!nish for conte#t of the Foar' (((@
*. iss!e s!$#oena an' s!$#oena '!ces tec! an' to
s!on )itnesses (((@ 1. con'!ct in-esti&ations an'
hearin&s of co#%aints for -io%ation of the #!$%ic ser-ice %a)s on %an'
trans#ortation (((@
3. re-ie) ot! #ro#rio the 'ecisions, actions of the Re&iona%
Hranchisin& an' Re&!%atory Offices (((@
5. #ro!%&ate r!%es an' re&!%ations &o-ernin& #rocee'in&s
$efore the Foar' an' the Re&iona% Hranchisin& an' Re&!%atory Office
(((@
1+. fi(, i#ose an' co%%ect, an' #erio'ica%%y re-ie) an'
a'.!st reasona$%e fees, an' other re%ate' char&es for ser-ices
ren'ere'@
11. for!%ate, #ro!%&ate, a'inister, i#%eent an'
enforce r!%es an' re&!%ations on %an' trans#ortation (((@
1D. coor'inate an' coo#erate )ith other &o-t. a&encies an'
entities concerne' )ith any as#ect in-o%-in& #!$%ic %an' trans#ortation
ser-ices (((@
1;. #erfor s!ch other f!nctions an' '!ties as ay $e
#ro-i'e' $y %a), or as ay $e necessary, or #ro#er or inci'enta% to the
#!r#oses an' o$.ecti-es of the De#t.
Sec. D+. The Foar' sha%% ((( sit an' 'eci'e en $anc@
conc!rrence an' si&nat!re of at %east D e$ers@ 'ecision sha%% $e
a##ea%a$%e to the Secretary )ithin ;+ 'ays fro recei#t of the 'ecision@
the Secretary ay ot! #ro#rio re-ie) any 'ecision or action of the
Foar' $efore it $ecoes fina%.
Sec. D1. Re&iona% Hranchisin& an' Re&!%atory Offices 6 hear
an' 'eci'e !nconteste' a##%ications: #etitions for ro!tes (((@
Sec. DD. 'ecisions of the Re&iona% Hranchisin& an'
Re&!%atory Offices sha%% $e a##ea%a$%e to the Foar' )ithin ;+ 'ays
fro recei#t of the 'ecision.
#c$ %ater
#i$ @aritime Industr' Authorit'
D> 1-1, 3ec. 10 as amended b' D> 1-16A, 3ec. ;
The Maritie In'!stry A!thority is here$y retaine' an' sha%%
ha-e the ff. f!nctions9
a. 'e-e%o# an' for!%ate #%ans, #o%icies, #ro.ects ((( &eare'
to)ar' the #rootion an' 'e-t. of the aritie in'!stry, the &ro)th
an' effecti-e re&!%ation of shi##in& enter#rises, an' for the nationa%
sec!rity o$.ecti-es of the co!ntry@
$. esta$%ish, #rescri$e an' re&!%ate ro!tes, "ones an':or
areas of o#eration of #artic!%ar o#erators of #!$%ic )ater ser-ices@
c. iss!e /P/s for the o#eration of 'oestic an' o-erseas
)ater carriers@
'. re&ister -esse%s as )e%% as iss!e certificates, %icenses or
'oc!ent necessary or inci'ent thereto@
e. !n'erta2e the safety re&!%atory f!nctions #ertainin& to
-esse% constr!ction an' o#eration inc%!'in& the 'eterination or
annin& %e-e%s an' iss!ance of certificates of co#etency to seaen@
f. enforce %a)s, #rescri$e an' enforce r!%es an' re&!%ations,
inc%!'in& #ena%ties for -io%ations thereof, &o-ernin& )ater
trans#ortation an' the Phi%. erchant arine (((@
&. !n'erta2e the iss!ance of %icenses to 0!a%ifie' seaen
an' har$or, $ay an' ri-er #i%ots@
h. 'eterine, fi(, #rescri$e char&es:rates #ertinent to the
o#eration of #!$%ic )ater trans#ort !ti%ities (((@
i. accre'it arine s!r-eyors an' aritie enter#rises
en&a&e' in shi#$!i%'in&, shi# re#air (((@
.. iss!e an' re&ister the contin!o!s 'ischar&e $oo2 of
Hi%i#ino seaen@
2. esta$%ish an' #rescri$e r!%es an' re&!%ations, stan'ar's
an' #roce'!res for the efficient an' effecti-e 'ischar&e of the a$o-e
f!nctions@
%. #erfor s!ch other f!nctions as ay no) or hereafter $e
#ro-i'e' $y %a).
II. Common Carriers
A. In 4enera%
1. EefinitionsG essential elements
Art. 11;D. /oon carriers are #ersons, cor#orations, firs
or associations en&a&e' in the $!siness of carryin& or trans#ortin&
#assen&ers or &oo's or $oth, $y %an', )ater or air, for co#ensation,
offerin& their ser-ices to the #!$%ic.
Aguedo <. Agba'ani, C>@@DRCIAF FA%3 >< 2CD PCIFIPPI4D3, )ol. 0,
1! ed. #hereinafter 0 Agba'ani$
Trans#ortation 'efine'.66 a contract of trans&ortation is one *hereb' a
certain &erson or association of &ersons obligate themsel)es to trans&ort
&ersons, things, or ne*s from one &lace to another for a fi7ed &rice
PAGE 8
TRANSPORTATION AND MARITIME LAW
/%assification =
1. As to obBect= #1$ thingsG #-$ &ersonsG #;$ ne*s
-. As to &lace of tra)el= #1$ landG #-$ *aterG #;$ air
Parties to contract of trans#ortation9
#1$ shipper or consignor.-- &erson to be trans&ortedG one *ho
gi)es rise to the contract of trans&ortation b' agreeing to deli)er the things
or ne*s to be trans&orted, or to &resent his o*n &erson or those of other or
others in the case of trans&ortation of &assengers
#-$ carrier or conductor.-- one *ho binds himself to trans&ort
&ersons, things, or ne*s as the case ma' beG one em&lo'ed in or engaged
in the business of carr'ing goods for other for hire
#;$ consignee.-- the &art' to *hom the carrier is to deli)er the
things being trans&ortedG one to *hom the carrier ma' la*full' ma:e
deli)er' in accordance *ith its contract of carriage #but the shi&&er and the
consignee ma' be one &erson$
Hrei&ht 'efine'.66 2he terms has been defined as= #1$ the &rice or
com&ensation &aid for the trans&ortation of goods b' a carrier, at sea, from
&ort to &ort. But the term is also used to denote #-$ the hire &aid for the
carriage of goods on land from &lace to &lace, or on inland streams or la:es.
2he name is also a&&lied to #;$ the goods or merchandise trans&orted at
sea, on land, or inland streams or la:es. 2hus the term is used in - senses=
to designate the &rice for the carriage, also called freightage, or to designate
the goods carried.
/ontracts thro!&h trans#ortation a&ents.66 A contract of trans&ortation is
not changed, altered or affected b' the mere fact that the obligor a)ails of
other &arties to effect the trans&ortation agreed u&on, as in the case of
trans&ortation agents.
/arriers 'efine'.66 Persons or cor&orations *ho underta:e to trans&ort or
con)e' goods, &ro&ert' or &ersons, from one &lace to another, gratuitousl'
or for hire, and are classified as &ri)ate or s&ecial carriers, and common or
&ublic carriers
Pri-ate carriers 'efine'.66 2hose *ho trans&ort or underta:e to trans&ort in
a &articular instance for hire or re*ard
/oon carriers -s Pri-ate carriers9
#1$ the common carrier holds #1$ the
&ri)ate carrier agrees
himself out in common, that is, in some
s&ecial case *ith some
to all &ersons *ho choose to em6 &ri)ate
indi)idual to carr'
&lo' him, as read' to carr' for for hire
hireG no one can be a common
carrier unless he has held himself
out to the &ublic as a carrier in
such a manner as to render him
liable to an action if he should
refuse to carr' for an'one *ho
*ished to em&lo' him
#-$ a common carrier is bound to #-$ a
&ri)ate carrier is not
carr' all *ho offer such goods as bound to
carr' for an' reason,
it is accustomed to carr' and
unless it enter into a s&ecial
tender reasonable com&ensation agreement
to do so
for carr'ing them
#;$ a common carrier is a &ublic ser)ice #;$ a
&ri)ate carrier does not
and is therefore subBect to regulation hold itself
out as engaged in

the business for the &ublic,

and is therefore not subBect

to regulation as a common carrier

Test for a coon carrier9

#1$ Ce must be engaged in the business of carr'ing goods for
others as a &ublic em&lo'ment, and must hold himself out as read' to
engage in the trans&ortation of goods for &ersons generall' as a business,
and not a casual occu&ation.
#-$ Ce must underta:e to carr' goods of the :ind to *hich his
business is confined.
#;$ Ce must underta:e to carr' b' the methods b' *hich his
business is conducted, and o)er his established roads.
#0$ 2he trans&ortation must be for hire.
2he true test is *hether the gi)en underta:ing is a &art of the
business engaged in b' the carrier *hich he has held out to the general
&ublic as his occu&ation rather than the +uantit' or e7tent of the business
actuall' transacted, or the no. and character of the con)e'ances used in the
em&lo'ment #the test is therefore the character of the business actuall'
carried on b' the carrier.$
Case = an air&lane o*ner is a common carrier *here he underta:es for hire
to carr' all &ersons *ho a&&l' for &assage indiscriminatel' as long as there
is room and no legal e7cuse for refusingG airlines engaged in the &assenger
ser)ice on regular schedules on definite routes, *ho solicit &atronage of the
tra)eling &ublic, ad)ertise schedules for routes, times of lea)ing and rates of
fare, and ma:e the usual sti&ulation as to baggage are common carriers
/haracteristics of coon carriers9

#1$ 2he common carrier underta:es to carr' for all &eo&le
indifferentl'G he holds himself out as read' to engage in the trans&ortation of
goods for hire as a &ublic em&lo'ment and not as a casual occu&ation, and
he underta:es to carr' for all &ersons indifferentl', *ithin the limits of his
ca&acit' and the s&here of the business re+uired of him, so that he is bound
to ser)e all *ho a&&l' and is liable for refusal, *ithout sufficient reason, to
do so
#-$ 2he common carrier cannot la*full' decline to acce&t a
&articular class of goods for carriage to the &reBudice of the traffic in those
goods
D7ce&tion = for some sufficient reason, *here the discrimination
in such goods is reasonable and necessar' #substantial grounds$
#;$ 4o mono&ol' is fa)ored 6 the Commission has the &o*er to
sa' *hat is a reasonable com&ensation to the utilit' and to ma:e
reasonable rules and regulations for the con)enience of the tra)eling &ublic
and to enforce them
#0$ Public con)enience 6 for the best interests of the &ublic
Meanin& of P!$%ic !se.66 It is not confined to &ri)ileged indi)iduals, but is
o&en to the indefinite &ublicG there must be a right *hich the la* com&els
the o*ner to gi)e to the general &ublic. Public use is not s'non'mous *ith
&ublic interest. 2he true criterion is *hether the &ublic ma' enBo' it b' right
or onl' b' &ermission
The %a) #rohi$its !nreasona$%e 'iscriination $y coon carriers.66
2he la* re+uires common carriers to carr' for all &ersons, either &assengers
or &ro&ert', for e7actl' the same charge for a li:e or contem&oraneous
ser)ice in the trans&ortation of li:e :ind of traffic under substantiall' similar
circumstances or conditions. 2he la* &rohibits common carriers #CC$ from
subBecting an' &erson, etc. or localit', or an' :ind of traffic, to an' undue or
unreasonable &reBudice or discrimination *hatsoe)er.
D7ce&tion= %hen the actual cost of handling and trans&orting is
different, then different rates ma' be charged
Cases = #1$ merchandise of li:e +uantit' ma' not be considered ali:e 6 the
+uantit', :ind and +ualit' ma' be e7actl' the same, and 'et not be ali:e, so
far as the cost of trans&ortation is concerned
#-$ shi&ments ma' be ali:e although com&osed of different
classes of merchandise 6 difference in the charge for handling and
trans&orting ma' onl' be made *hen the difference is based u&on actual
cost
Deterination of .!stifia$%e ref!sa%9
2his in)ol)es a consideration of the follo*ing66
#1$ suitabilit' of the )essels of the com&an' for the trans&ortation
of such &roductsG
PAGE 9
TRANSPORTATION AND MARITIME LAW
#-$ reasonable &ossibilit' of danger or disaster, resulting from
their trans&ortation in the form and under the conditions in *hich the' are
offered for carriageG
#;$ the general nature of the business done b' the carrierG
#0$ all the attendant circumstances *hich might affect the
+uestion of the reasonable necessit' for the refusal b' the carrier to
underta:e the trans&ortation of this class of merchandise
Case= 2he mere fact that the carriage of d'namites ma' lead to destructi)e
e7&losions is not sufficient to Bustif' refusal if it can be &ro)en that in the
condition in *hich it is offered for carriage there is no real danger to the
carrier nor reasonable ground to fear that the )essel and those on board *ill
be e7&osed to unnecessar' or unreasonable ris:s
U3 )s 2an Piaco, 0? Phil !1;
<= 2an Piaco rented t*o automobile truc:s and *as using them
u&on the high*a's of Fe'te for the &ur&ose of carr'ing some &assengers
and freight. Ce carried &assengers and freight under a s&ecial contract in
each case and had not held himself out to carr' all &assengers and freight
for all &ersons *ho might offer &assengers and freight. Ce *as con)icted
for )iolation of the Public Utilit' Fa* for o&erating a &ublic utilit' *ithout
&ermission from the Public Utilit' Commission.
Issue= %>4 defendant o&erated a &ublic utilit'. 4>.
Celd= 2here is no &ublic use. 2he truc:s *ere used under s&ecial
agreements to carr' &articular &ersons and &ro&ert'.
Under the Public 3er)ice Fa*, t*o things are necessar' = #1$ the
indi)idual, co6&artnershi&, etc. must be a &ublic utilit'G and #-$ the business
in *hich such indi)idual, co6&artnershi&, etc. is engaged must be for &ublic
use. 5Public use5 means the same as 5use b' the &ublic.5 2he essential
feature of &ublic use is that it is not confined to &ri)ileged indi)iduals, but is
o&en to the indefinite &ublic. In determining *hether a use is &ublic, *e
must loo: not onl' to the character of the business to be done, but also to
the &ro&osed mode of doing it. If the use is merel' o&tional *ith the o*ners,
or the &ublic benefit is merel' incidental, it is not a &ublic use, authoriAing
the e7ercise of the Burisdiction of the &ublic utilit' commission. 2here must
be, in general, a right *hich the la* com&els the o*ner to gi)e to the
general &ublic. It is not enough that the general &ros&erit' of the &ublic is
&romoted. Public use is not s'non'mous *ith &ublic interest. The true
criterion by which to judge the character of the use is whether the public
may enjoy it by right or only by permission.
Come Insurance Co. )s American 3teamshi& Agencies, -; 3CRA -0
<= A Peru)ian firm shi&&ed fishmeal through the 33 Cro*borough
consigned to the 3@B and insured b' the Come Insurance Co. 2he cargo
arri)ed *ith shortages. 3@B demanded and Come Insurance Co. &aid
P10,??? in settlement of 3@BHs claim. Come Insurance filed for reco)er'
from FuAon 3te)edoring and American 3teamshi& Agencies. FuAon
3te)edoring claimed that it merel' deli)ered *hat it recei)ed from the carrier
in the same condition it recei)ed it. American 3teamshi& contended that it
*as not liable because of a sti&ulation in the charter &art' that the charterer
and not the shi&o*ner *as to be liable for an' loss or damage to the cargo.
2he C<I absol)ed FuAon 3te)edoring but ordered American 3teamshi& to
reimburse the P10,??? to Come Insurance, declaring that Art. 1!" of the
Code of Commerce ma:es the shi& agent ci)ill' liable for damages in fa)or
of third &ersons due to the conduct of carrierHs ca&tain and that the
sti&ulation in the charter &art' e7em&ting o*ner from liabilit' is against
&ublic &olic' under Art. 1"00 of 4CC.

Issue = Is the sti&ulation )alid( KD3.
Celd = 2he &ro)isions of our Ci)il Code on common carriers *ere ta:en
from Anglo6American la*. Under American Buris&rudence, a common carrier
underta:ing to carr' a s&ecial cargo or chartered to a s&ecial &erson onl',
becomes a &ri)ate carrier. As a private carrier, a stipulation exempting the
owner from liability for the negligence of its agents is not against public
policy and is deemed valid.
2he Ci)il Code &ro)isions on common carriers should not be
a&&lied *here the carrier is not acting as such but as a &ri)ate carrier. 2he
sti&ulation in the charter &art' absol)ing the o*ner from liabilit' for loss due
to the negligence of the agent *ould be )oid onl' if the strict &ublic &olic'
go)erning CC is a&&lied. 3uch &olic' has no force *here the &ublic at large
is not in)ol)ed, as in the case of a shi& totall' chartered #as in this case$ for
the use of a single &art'. Based on the sti&ulation, reco)er' cannot be had,
for loss or damage to the cargo against shi&o*ners, unless the same is due
to &ersonal acts or negligence of said o*ner or its managers, as
distinguished from agents or em&lo'ees. 4o &ersonal act or negligence has
been &ro)ed.
In a charter of the entire )essel, the bill of lading issued b' the
master to the charterer, as shi&&er, is in fact and legal contem&lation merel'
a recei&t and a document of title and not a contract, for the contract is the
charter &art'.
Ee GuAman )s CA, 1/! 3CRA /1-
<= Cendana *as a Bun: dealer and *as engaged in bu'ing used
bottles and scra& materials in Pangasinan and brought these to @anila for
resale. Ce used t*o /6*heeler truc:s. >n the return tri& to Pangasinan, he
*ould load his )ehicles *ith cargo *hich )arious merchants *anted
deli)ered to Pangasinan. <or that ser)ice, he charged freight lo*er than
regular rates. General @il: Co. contracted *ith him for the hauling of "1?
cartons of mild. >n the *a' to Pangasinan, one of the truc:s *as hiBac:ed
b' armed men *ho too: *ith them the truc: and its cargo and :idna&&ed
the dri)er and his hel&er. >nl' 11? cartons of mil: *ere deli)ered. 2he @il:
Co. sued to claim the )alue of the lost merchandise based on an alleged
contract of carriage. Cendana denied that he *as a common carrier and
contended that he could not be liable for the loss since it *as due to force
majeure. 2he 2C ruled that he *as a common carrier. 2he CA re)ersed.
Issue = %>4 Cendana is a common carrier. KD3.
Celd = Cendana is &ro&erl' characteriAed as a common carrier e)en though
he merel' bac:hauled goods for other merchants, and e)en if it *as done
on a &eriodic basis rather than on a regular basis, and e)en if his &rinci&al
occu&ation *as not the carriage of goods.
Art. 1";- ma:es no distinction bet*een one *hose &rinci&al
business acti)it' is the carr'ing of &ersons or goods or both, and one *ho
does such carr'ing onl' as an ancillar' acti)it'. It also a)oids ma:ing a
distinction bet*een a &erson or enter&rise offering trans&ortation ser)ices
on a regular or scheduled basis and one offering ser)ice on an occasional,
e&isodic or unscheduled basis. 4either does it ma:e a distinction bet*een
a carrier offering its ser)ices to the general &ublic and one *ho offers
ser)ices or solicits business onl' from a narro* segment of the &o&ulation.
2he fact that Cendana does not hold a CPC is no e7cuse to
e7em&t him from incurring liabilities as a CC. >ther*ise, it *ould be to
re*ard &ersons *ho fail to com&l' *ith a&&licable statutor' re+ts. and *ould
be offensi)e to &ublic &olic'. 2he liabilit' arises the moment a &erson or
firm acts as a common carrier, *ithout regard to *hether or not such carrier
has also com&lied *ith the re+uirements of the a&&licable regulator' statute
and im&lementing regulations.
Issue = %>4 Cendana ma' be held liable for the loss of the mil:. 4>.
Celd= Common carriers b' the )er' nature of their business and for reasons
of &ublic &olic' are held to a )er' high degree of care and diligence #e7tra6
ordinar' diligence$ in the carriage of goods as *ell as &assengers. Article
1";0 establishes the general rule that CC are res&onsible for the loss,
destruction, or deterioration of the goods *hich the' carr' unless the same
is due to the causes enumerated therein. 3uch enumeration is a closed list.
Causes falling outside the list, e)en if the' are force maBeure, fall *ithin the
sco&e of Art. 1";1 *hich &ro)ides that CC are &resumed to ha)e been at
fault or to ha)e acted negligentl', unless the' &ro)e that the' obser)ed
e7traordinar' diligence re+uired under Art. 1";;.
Co*e)er, Art. 1"01 &ro)ides that a CC cannot be allo*ed to
di)est or diminish his res&onsibilit' e)en for acts of strangers li:e thie)es or
robbers, e7ce&t *here such thie)es or robbers acted *ith gra)e or
irresistible threat, )iolence or force. 2he limits of e7traordinar' diligence are
reached *here there is gra)e or irresistible threat, )iolence or force. In this
case, the loss *as +uite be'ond the control of the CC. D)en CC are not
made absolute insurers against all ris:s of tra)el and of trans&ort of goods,
and are not liable for acts or e)ents *hich cannot be foreseen or are
ine)itable, &ro)ided that the' shall ha)e com&lied *ith the rigorous standard
of e7traordinar' diligence.
Planters Products )s CA, G.R. 1?11?; #3e&t. 11, 1;$
<= Planters &urchased urea fertiliAer from @itsubishi, 4e* Kor:.
2he fertiliAer *as shi&&ed on @. 3un Plum, *hich is o*ned b' LLLL, from
Alas:a to 3an <ernando, Fa Union. A time charter &art' *as entered into
bet*een @itsubishi as shi&&erIcharterer and LLLL as shi&o*ner. U&on
arri)al in the &ort, PPI unloaded the cargo. It too: PPI 11 da's to unload the
cargo. PPI hired a marine and cargo sur)e'or to determine if there *as an'
shortage. A shortage and contamination of the fertiliAer *as disco)ered.
PPI sent a claim letter to 33A, the resident agent of LLLL for the amount of
PAGE 10
TRANSPORTATION AND MARITIME LAW
the loss. An action for damages *as filed. 33A contended that the
&ro)isions on CC do not a&&l' to them because the' ha)e become &ri)ate
carriers b' reason of the charter6&art'. 2he 2C a*arded damages. 2he CA
re)ersed.
Issue = Eoes a charter &art' bet*een a shi&o*ner and a charterer transform
a CC into a &ri)ate one as to negate the ci)il la* &resum&tion of negligence
in case of loss or damage to its cargo( 4>.
Celd = A charter-party is a contract b' *hich an entire shi&, or some
&rinci&al &art thereof, is let b' the o*ner to another &erson for a s&ecified
time or use. 2here are - :inds= #1$ contract of affreightment *hich in)ol)es
the use of shi&&ing s&ace or )essels leased b' the o*ner in &art or as a
*hole, to carr' goods for othersG and #-$ charter by demise or bareboat
charter *here the *hole )essel is let to the charterer *ith a transfer to him
of its entire command and &ossession and conse+uent control o)er its
na)igation, including the master and the cre*, *ho are his ser)ants.
It is not dis&uted that the carrier o&erates as a CC in the ordinar'
course of business. %hen PPI chartered the )essel, the shi& ca&tain, its
officers and cre* *ere under the em&lo' of the shi&o*ner and therefore
continued to be under its direct su&er)ision and control. 2hus it continued
to be a &ublic carrier.
It is therefore im&erati)e that a &ublic carrier shall remain as
such, not*ithstanding the charter of the *hole or &ortion of a )essel,
&ro)ided the charter is limited to the shi& onl', as in the case of a time6
charter or a )o'age6charter. It is onl' *hen the charter includes both the
)essel and the cre*, as in a bareboat or demise that a CC becomes &ri)ate,
insofar as such &articular )o'age is concerned.
Issue = %>4 the carrier is liable for damages. 4>.
Celd = 2he &resum&tion of negligence on the &art of res&ondent carrier has
been o)ercome b' the sho*ing of e7traordinar' Aeal and assiduit'
e7ercised b' the carrier in the care of the cargo. >n the other hand, no &roof
*as adduced b' the &etitioner sho*ing that the carrier *as remiss in the
e7ercise of due diligence in order to minimiAe the loss or damage to the
goods it carried.

Coast*ise Fighterage Cor&. )s. CA, GR 4o. 1101/", ,ul' 1-, 11
<= Pag6asa 3ales, Inc. entered into a contract to trans&ort molasses
from 4egros to @la. *I Coast*ise, using the latterHs dumb barges. 2he
barges *ere to*ed in tandem b' the tugboat @2 @arcia, *Ic is li:e*ise
o*ned b' Coast*ise.
U&on reaching @la. Ba', *hile a&&roaching Pier 1!, one of the
barges, 5Coast*ise ,5 struc: an un:no*n sun:en obBect. 2he for*ard
buo'anc' com&artment *as damaged, and *ater gushed in through a hole
- inches *ide and -- inches long. As a conse+uence, the molasses at the
cargo tan:s *ere contaminated and rendered unfit for the use it *as
intended. 2his &rom&ted the consignee, Pag6asa to reBect the shi&ment of
molasses as a total loss. 2hereafter, Pag6asa filed a formal claim *I the
insurer of its cargo, herein &)t. res&., Phil. Gen. Insurance Co. #Philgen$ and
against the carrier, herein &etitioner Coast*ise. Coast*ise denied the claim
and it *as Philgen *Ic &aid the consignee the amount of P"??,???
re&resenting the )alue of the damaged cargo of molasses.
In turn, Phil6gen filed an action agsint Coast*ise bef. R2C6@la.
see:ing to reco)er the P"??,??? it &aid to Pag6asa. R2C ruled in fa)or of
Philgen. CA affirmed the R2C decision. Cence, this &etition.
RUFI4G3= #1$ Bareboat charter and contract of affreightment, difference;
oastwise, by the contract of affreightment, was not converted into a
private carrier, but remained a common carrier.-- Under the demise or
bareboat charter of the )essel, the charterer *ill generall' be regarded as
the o*ner of the )o'age or ser)ice sti&ulated. 2he charterer mans the
)essel *I his o*n &eo&le and becomes the o*ner pro hac vice, subBect to
liabilit' to others for damages caused b' negligence. To create a demise,
the owner of a vessel must completely and exclusively relin!uish
possession, command and navigation thereof to the charterer; anything
short of such a complete transfer is a contract of affreightment "time or
voyage charter party# or not a charter party at all.
A contract of affreightment is one in *Ic the o*ner of the )essel
leases &art or all of its s&ace to haul goods for others. It is a contract for
s&ecial ser)ice to be rendered b' the o*ner of the )essel and under such
contract the general o*ner retains the &ossession, command and na)igation
of the shi&s, the charterer or freighter merel' ha)ing use of the s&ace in the
)essel in return for his &a'ment of the charter hire. 777
777
Although a charter &art' ma' transform a common carrier into a
&ri)ate one, the same, ho*e)er, is not true in a contract of affreightment on
account of the aforementioned distinctions bet. the t*o.
Petitioner admits that the contract it entered into *I the
consignee *as one of afreightment. %e agree. Pag6asa onl' leased ; of
&etitionerHs )essels, in order to carr' cargo from one &oint to another, but the
&ossession, command and na)igation of the )essels remained *I &etitioner.
#-$ $etitioner is liable for breach of contract of carriage, having
failed to overcome the presumption of negligence w% the loss and
destruction of goods it transported, by proof of its exercise of extraordinary
diligence.-- @ere &roof of deli)er' of goods to a carrier and the subse+uent
arri)al of the same goods at the &lace of destination in bad order ma:es for
a &rima facie case against the carrier. ,esus Constantino, the &atron of the
)essel 5Coast*ise 5 admitted that he *as not licensed. 2his )iolates the
rule in the Code of Commerce #Art. /?$ *Ic re+uires that &atrons must
5ha)e the legal ca&acit' to contract in accordance *I this code, and &ro)e
the s:ill, ca&acit' and +ualifications necessar' to command and direct the
)essel 777 and must be +ualified 777 for the discharge of the duties of the
&osition. 7775 Coast*ise cannot safel' claim to ha)e e7traordinar'
diligence, b' &lacing a &erson *hose na)igational s:ills are +uestionable, at
the helm of the )essel *Ic e)entuall' met the fateful accident. 777 Cad the
&atron been licensed, he could be &resumed to ha)e both the s:ill and the
:no*ledge that *ould ha)e &re)ented the )esselHs hitting the sun:en
derelict shi& that la' on their *a' to Pier !. RAM.
-. 4ature of businessG &o*er of 3tate to regulate
Art. 11*B. The 7P!$%ic Ser-ice /oission8 Foar' of
Trans#ortation ay, on its o)n otion or on #etition of any intereste'
#arty, after '!e hearin&, cance% the certificate of #!$%ic con-enience
&rante' to any coon carrier that re#eate'%y fai%s to co#%y )ith his
or its '!ty to o$ser-e e(traor'inary 'i%i&ence as #rescri$e' in this
Section.
0 Agba'ani=
/oon carriers are s!$.ect to %e&is%ati-e re&!%ation.66 2he business of
a common carrier holds such a &eculiar relation to the &ublic interest that
there is su&erinduced u&on it the right of &ublic regulation. 2he business of
a common carrier is affected *ith &ublic interest. %hen, therefore, one
de)otes his &ro&ert' to a use in *hich the &ublic has an interest, he, in
effect, grants to the &ublic an interest in that use, and must submit to be
controlled b' the &ublic for the common good, to the e7tent of the interest
he had thus created.
Liitation on #o)er to re&!%ate.66 3uch regulations must not ha)e the
effect of de&ri)ing an o*ner of his &ro&ert' *ithout due &rocess of la*, nor
of confiscating, or a&&ro&riating &ri)ate &ro&ert' *ithout Bust com&ensation,
nor of limiting or &rescribing irre)ocabl' )ested rights or &ri)ileges la*full'
ac+uired under a charter or franchise 8Bust com&ensation, due &rocess of
la*9
When .!'iciary ay interfere )ith %e&is%ati-e re&!%ation of coon
carriers.66 2he Budiciar' ought not to interfere *ith legislati)e regulations
unless the' are so &lainl' and &al&abl' unreasonable as to ma:e their
enforcement e+ui)alent to the ta:ing of &ro&ert' for &ublic use *ithout such
com&ensation as under all circumstances is Bust both to the o*ner and to
the &ublic.
Pantranco )s P3C, "? Phil --1
<= Pantranco has been engaged for the &ast -? 'ears in the
business of trans&orting &assengers b' means of motor )ehicles in
accordance *ith the CPC4 issued to it. It filed *ith the P3C an a&&lication
for authoriAation to o&erate 1? addtl. ne* truc:s. 2he a&&lication *as
granted *ith t*o conditions = #1$ that the CPC4 *ould be )alid for onl' -1
'ears and #-$ that the ser)ice can be ac+uired b' the go)t. u&on &a'ment of
cost &rice of its useful e+&t. less reasonable de&reciation. Pantranco
challenged the constitutionalit' of Art. 11, CA 10/ as an undue delegation of
legislati)e &o*ers.
Issue = %>4 the P3C ma' &rescribe the - conditions as a &rere+uisite to
the issuance of the CPC4.
Celd = Kes. CA 10/ &ro)ides a sufficient standard, *hich is &ublic interest,
b' *hich the P3C is guided in im&osing such conditions.
PAGE 11
TRANSPORTATION AND MARITIME LAW
2he business of a common carrier holds such a &eculiar relation
to the &ublic interest that there is su&erinduced u&on it the right of &ublic
regulation. %hen &ri)ate &ro&ert' is affected *ith a &ublic interest, it ceases
to be juris privati onl'. %hen, therefore, one de)otes his &ro&ert' to a use in
*hich the &ublic has an interest, he, in effect, grants to the &ublic an interest
in that use, and must submit to be controlled b' the &ublic for the common
good, to the e7tent of the interest he had thus created. Ce ma' *ithdra* his
grant b' discontinuing the use, but so long as he maintains the use, he must
submit to control. Indeed this right is so far be'ond +uestion that it is settled
that the &o*er of the state to e7ercise legislati)e control o)er &ublic utilities
ma' be e7ercised through the board of commissioners. 2his right of the
state to regulate &ublic utilities is founded u&on the &olice &o*er, and
statutes for the control and regulation of utilities are a legitimate e7ercise
thereof, for the &rotection of the &ublic as *ell as the utilities themsel)es.
3uch statutes are not unconstitutional, either as im&airing the obligation of
contracts, ta:ing &ro&ert' *ithout due &rocess, or den'ing the e+ual
&rotection of the la*s, es&eciall' inasmuch as the +uestion %>4 &ri)ate
&ro&ert' shall be de)oted to a &ublic use and the conse+uent burdens
assumed is ordinaril' for the o*ner to decideG and if he )oluntaril' &laces his
&ro&ert' in &ublic ser)ice he cannot com&lain that it becomes subBect to the
regulator' &o*ers of the state. 2his is more so in the light of authorities
*hich hold that a CPC constitutes neither a franchise nor a contract, confers
no &ro&ert' rights and is a mere license or &ri)ilege.
;. 4ature and Basis of Fiabilit'
Art. 11;;. /oon carriers, fro the nat!re of their
$!siness an' for reasons of #!$%ic #o%icy, are $o!n' to o$ser-e
e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's an' for the
safety of the #assen&ers trans#orte' $y the, accor'in& to the
circ!stances of each case.
S!ch e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's
is f!rther e(#resse' in Artic%es 11;?, 11;B, an' 11?B, Nos. B,*, an' 1,
)hi%e the e(traor'inary 'i%i&ence for the safety of the #assen&ers is
f!rther set forth in Artic%es 11BB an' 11B*.
Art. 11;?. /oon carriers are
res#onsi$%e for the %oss, 'estr!ction, or
'eterioration of the &oo's, !n%ess the sae is '!e
to any of the fo%%o)in& ca!ses on%y9
<1= H%oo', stor, earth0!a2e, %i&htnin&,
or other nat!ra% 'isaster or ca%aity@
<D= Act of the #!$%ic eney in )ar,
)hether internationa% or ci-i%@
<;= Act or oission of the shi##er or
o)ner of the &oo's@
<?= The character of the &oo's or 'efects
in the #ac2a&in& or in the containers@
<B= Or'er or act of co#etent #!$%ic
a!thority.
Art. 11;B. In a%% cases other than those
entione' in Nos. 1, D, ;, ? an' B of the #rece'in&
artic%e, if the &oo's are %ost, 'estroye' or
'eteriorate', coon carriers are #res!e' to
ha-e $een at fa!%t or to ha-e acte' ne&%i&ent%y,
!n%ess they #ro-e that they o$ser-e'
e(traor'inary 'i%i&ence as re0!ire' in Art. 11;;.
Art. 11?B. Any of the ff. or sii%ar
sti#!%ations sha%% $e consi'ere' !nreasona$%e,
!n.!st an' contrary to #!$%ic #o%icy9
(((
<B= That the coon carrier sha%% not $e
res#onsi$%e for the acts or oissions of his or its
e#%oyees@
<*= That the coon carrierGs %ia$i%ity
for acts coitte' $y thie-es, or of ro$$ers )ho
'o not act )ith &ra-e or irresisti$%e threat,
-io%ence or force, is 'is#ense' )ith or 'iinishe'@
<1= That the coon carrier is not
res#onsi$%e for the %oss, 'estr!ction, or
'eterioration of &oo's on acco!nt of the 'efecti-e
con'ition of the car, -ehic%e, shi#, air#%ane or
other e0!i#ent !se' in the contract of carria&e.
Art. 11BB. A coon carrier is $o!n' to
carry the #assen&ers safe%y as far as h!an care
an' foresi&ht can #ro-i'e, !sin& the !tost
'i%i&ence of -ery ca!tio!s #ersons, )ith a '!e
re&ar' for a%% circ!stances.
Art. 11B*. In case of 'eath of or in.!ries
to #assen&ers, coon carriers are #res!e' to
ha-e $een at fa!%t or to ha-e acte' ne&%i&ent%y,
!n%ess they #ro-e that they o$ser-e'
e(traor'inary 'i%i&ence as #rescri$e' in artic%es
11;; an' 11BB.
0 Agba'ani=
E(traor'inary 'i%i&ence re0!ire' of coon carriers.66 2he la*
re+uires CC to e7ercise e7tra6ordinar' diligence *hich means that the' must
render ser)ice *ith the greatest s:ill and utmost foresight. 2he e7tra6
ordinar' diligence re+uired of carriers in the handling of the goods of the
shi&&ers and consignees last from the time the cargoes are loaded in the
)essels until the' are discharged and deli)ered to the consignees.
Reasons for re0!irin& e(tra6or'inary 'i%i&ence.66 2he nature of the
business of common carriers and the e7igencies of &ublic &olic' demand
that the' obser)e e7tra6ordinar' diligenceG the business of CC is im&ressed
*ith a s&ecial &ublic dut' and therefore subBect to control and regulation b'
the state. 2he &ublic must of necessit' rel' on the care and s:ill of CC in
the )igilance o)er the goods and safet' of the &assengers
Ri&oro!s %a) on coon carriers not a##%ica$%e to s#ecia%
e#%oyent as carrier.66 2he la*s a&&licable to CC are rigorous and
should not be e7tended to a &erson *ho has neither e7&ressl' assumed that
character, nor b' his conduct and from the nature of his business Bustified
the belief on the &art of the &ublic that he intended to assume it.
Re&istere' o)ner #riari%y an' so%i'ari%y %ia$%e )ith 'ri-er, !n'er the
>2a$it syste.>66 Registered o*ner is &rimaril' and solidaril' liable for the
damage caused b' the )ehicle registered in his name, e)en if the said
)ehicle had alread' been sold, leased or transferred to another &erson *ho
*as, at the time of the accident, actuall' o&erating the )ehicle. 2he
o&erator of record continues to be the o&erator of the )ehicle in
contem&lation of la*, as regards the &ublic and third &ersons, and as such
is res&onsible for the conse+uences incident to its o&erationG such
o*nerIo&erator of record is held in contem&lation of la* as the em&lo'er of
the dri)er.
Ia$it syste.66 >ne *hereb' a &erson *ho has been granted a certificate
of &ublic con)enience allo*s other &ersons *ho o*n )ehicles to o&erate
them under such license, for a fee or &ercentage of the earnings. 2his is
contrar' to &ublic &olic', and therefore, )oid and ine7istentG 5this is a
&ernicious s'stem that cannot be too se)erel' condemnedG it constitutes an
im&osition u&on the good faith of the go)t.5
Reason for ho%'in& re&istere' o)ner %ia$%e.66 2he la* does not relie)e
the registered o*ner directl' of the res&onsibilit' that the la* fi7es and
&laces u&on him as an incident or conse+uence of registration 66 *here a
registered o*ner allo*ed to e)ade res&onsibilit' b' &ro)ing *ho the
su&&osed transferee or o*ner is, it *ould be eas' for him b' collusion *ith
others or other*ise, to esca&e said res&onsibilit' and transfer the same to
an indefinite &erson or to one *ho &ossesses no &ro&ert' *ith *hich to
res&ond financiall' for the damage or inBur' doneG in case of an accident,
the registered o*ner should not be allo*ed to dis&ro)e his o*nershi& to the
&reBudice of the &erson inBured or to be relie)ed from res&onsibilit'
Cangco )s @RR, ;! Phil "/!
<= ,ose Cangco, an em&lo'ee of @RR, *as riding on its train. As it
dre* u& to the station, the &laintiff made his e7it. As he alighted, his foot
ste&&ed on a sac: of *atermelons causing him to sli& and his right arm *as
crushed. 2his ha&&ened bet*een " and ! &.m. and as the railroad station
*as lighted diml' b' a single light, obBects on the &latform *ere difficult to
see.
Issue = %>4 @RR is liable to &a' damages for the acts of its DDs.
Celd = KD3.
It cannot be doubted that the DDs of the railroad co. *ere guilt'
of negligence in &iling sac:s on the &latformG their &resence constituted an
effecti)e legal cause of the inBuries sustained b' Cangco.
It is im&t. to note that the foundation of the legal liabilit' of the
defendant is the contract of carriage, and that the obligation to res&ond for
the damage *hich &laintiff has suffered arises, if at all, from the breach of
PAGE 12
TRANSPORTATION AND MARITIME LAW
that contract b' reason of the failure of defendant to e7ercise due care in its
&erformance. Its liabilit' is direct and immediate #culpa contractual$,
differing essentiall', from that &resum&ti)e res&onsibilit' for the negligence
of its ser)ants, *hich can be rebutted b' &roof of the e7ercise of due care in
the selection and su&er)ision of DDs #culpa a!uiliana$.
2he liabilit' of masters and em&lo'ers for the negligent acts or
omissions of their ser)ants or agents, *hen such act or omissions cause
damage *hich amount to the breach of a contract, is not based u&on a mere
&resum&tion of the masterHs negligence in their selection or control, and
&roof of e7ercise of the utmost diligence and care in this regard does not
relie)e the master of his liabilit' for the breach of his contract. &hen the
facts averred show a contractual underta'ing by defendant for the benefit of
plaintiff, and it is alleged that plaintiff has failed or refused to perform the
contract, it is not necessary for plaintiff to specify in his pleadings whether
the breach of the contract is due to wilful fault or to negligence on the part
of the defendant, or of his servants or agents. $roof of the contract and of
its nonperformance is sufficient prima facie to warrant recovery.
2he contract of defendant to trans&ort &laintiff carried *ith it, b'
im&lication, the dut' to carr' him in safet' and to &ro)ide safe means of
entering and lea)ing its trains. That duty, being contractual, was direct and
immediate, and its non&erformance could not be e7cused b' &roof that the
fault *as morall' im&utable to defendantHs ser)ants.
@edina )s Cresencia, Phil 1?/
<= A &assenger Bee&ne' dri)en b' Brigido A)or+ue smashed into a
@eralco &ost resulting in the death of .icenta @edina, one of its
&assengers. In a criminal case of homicide through rec:less im&rudence,
A)or+ue &leaded guilt'. 2he right to file a se&arate action for damages *as
reser)ed. Cresencia *as still the registered o&erator of the Bee&ne' in the
records of the @otor .ehicles >ffice and the P3C, *hile Rosario A)or+ue
*as the o*ner at the time of the accident.
Issue= %>4 Cresencia is liable for breach of the contract of carriage. KD3.
Ratio= 2he la* re+uires the a&&ro)al of the P3C, in order that a franchise, or
an' &ri)ilege &ertaining thereto, ma' be sold or leased *ithout infringing the
certificate issued to the granteeG and that if &ro&ert' co)ered b' the
franchise is transferred or leased *ithout this re+uisite a&&ro)al, the transfer
is not binding against the &ublic or the P3CG and in contem&lation of la*, the
grantee of record continues to be res&onsible under the franchise in relation
to the P3C and to the &ublic. 3ince a franchise is &ersonal in nature, an'
transfer or lease thereof should be notified to the P3C so that the latter ma'
ta:e &ro&er safeguards to &rotect the interest of the &ublic.
PlaintiffHs action is based on the breach of the carrierHs
contractual obligation to carr' his &assengers safel' to their destination
#culpa contractual$. 2he liabilit' of the carrier is direct and immediate.
Isaac )s A.F. Ammen 2rans. Co., 1?1 Phil 1?0/
<= Plaintiff boarded defendantHs bus as a &a'ing &assenger from
Alba'. 2he bus collided *ith a &ic:6u& truc: *hich *as coming from the
o&&osite direction tr'ing to s*er)e from a &ile of gra)el. As a result, his left
arm *as com&letel' se)ered. Plaintiff chose to hold defendant liable on its
contractual obligation. Plaintiff brought this action for damages *hich the
lo*er court dismissed holding the dri)er of the &ic:6u& negligent and not that
of the bus.
Issue = %>4 defendant obser)ed e7tra6ordinar' diligence or the utmost
diligence of a )er' cautious &erson in a)oiding the collision. KD3.
Celd = 2he facts of the case sho* that the bus and the &ic:6u& *ere
a&&roaching each other head6on. 2he bus s*er)ed to the right and *ent
o)er a &ile of stones and gra)el. Ees&ite the efforts of the bus dri)er, the
&ic: u& car still hit the rear left side of the bus. 2he sense of caution one
should obser)e cannot al*a's be e7&ected from one *ho is &laced
suddenl' in a &redicament *here he is not gi)en enough time to ta:e the
&ro&er course of action under ordinar' circumstances. <urthermore, &laintiff
is guilt' of contributor' negligence since he &laced his left elbo* outside the
*indo*.
Ratio= A CC is bound to carr' the &assengers safel' as far as human care
and foresight can &ro)ide, using the utmost diligence of )er' cautious
&ersons, *ith due regard for all circumstances. 2his e7tra6ordinar' diligence
re+uired of common carriers is calculated to &rotect the &assengers from
the tragic misha&s that fre+uentl' occur in connection *ith ra&id modern
trans&ortation. 2his high standard of care is im&erati)el' demanded b' the
&reciousness of human life and b' the consideration that e)er' &erson must
in e)er' *a' be safeguarded against all inBur'.
Princi&les as to liabilit' of CC=
#1$ the liabilit' of a carrier is contractual and arises u&on breach
of its obligationG there is breach if it fails to e7ert e7tra6ordinar' diligence
accdg. to all the circumstances of each case
#-$ a carrier is obliged to carr' its &assenger *ith the utmost
diligence of a )er' cautious &erson, ha)ing due regard for all the
circumstances
#;$ a carrier is &resumed to ha)e been at fault or to ha)e acted
negligentl' in case of death of, or inBur' to, &assengers, it being it dut' to
&ro)e that it e7ercised e7tra6ordinar' diligence
#0$ the carrier is not an insurer against all ris:s of tra)el.
<ores )s @iranda, 1?1 Phil -//
<= Res&ondent, a &rofessor of <ine Arts, *as a &assenger of a Bee&
registered in the name of <ores but actuall' o&erated b' Carmen
3ac:erman. %hile the Bee& *as descending at 3ta. @esa bridge at
e7cessi)e s&eed, the dri)er lost control of it causing it to s*er)e and hit the
bridge *all resulting to inBuries to its &assengers including res&ondent *ho
suffered a fracture of the u&&er right humerus. In an action for damages,
the C<I a*arded actual damages. 2he CA reduced the actual damages and
added moral damages and attorne'Hs fees.
Issue = %>4 the a&&ro)al of the P3C is necessar' for the sale of a &ublic
ser)ice )ehicle e)en *ithout con)e'ing there*ith the authorit' to o&erate
the same. KD3.
Celd = A transfer made *ithout the re+uisite a&&ro)al of the P3C is not
effecti)e and binding in so far as the res&onsibilit' of the grantee under the
franchise in relation to the &ublic is concerned. 2he la* *as designed
&rimaril' for the &rotection of the &ublic interest.
Issue = %>4 moral damages ma' be a*arded.
Celd = In case of breach of contract #including one of trans&ortation$, &roof
of bad faith or fraud, i.e., *anton or deliberatel' inBurious conduct, is
essential to Bustif' an a*ard of moral damages. 2he e7ce&tion to this is
*hen a misha& results in the death of a &assenger, in *hich a CC is liable to
&a' moral damages for the mental anguish b' reason of the death of the
&assenger. 3o *here the inBured &assenger does not die, moral damages
are not reco)erable unless it is &ro)ed that the carrier *as guilt' of malice or
bad faith.
Under the la*, the &resum&tion is that common carriers acted
negligentl' but not maliciousl'. 2he distinction bet*een fraud, bad faith or
malice in the sense of deliberate or *anton *rong doing and negligence #as
mere carelessness$ is too fundamental in our la* to be ignored. A carrierHs
bad faith is not to be lightl' inferred from a mere finding that the contract
*as breached through negligence of the carrierHs em&lo'ees.
Phil. Rabbit Bus Fines )s IAC, 1! 3CRA 11
<= 3e)eral &assengers boarded the Bee&ne' o*ned b' s&ouses
@angune and dri)en b' @analo at Eau, Pam&anga bound for Carmen,
Rosales, Pangasinan. 2heir contract *ith @analo *as P-0 for the tri&. U&on
reaching 2arlac, the right *heel of the Bee&ne' *as detached, so it *as
running in an unbalanced &osition. @analo ste&&ed on the bra:e, ma:ing a
sudden U6turn and encroaching on the right of *a' of the other )ehicles.
2he Phil. Rabbit bus bum&ed from behind the Bee&ne'. As a result of the
collision, ; &ersons died *hile the others sustained inBuries. Cases *ere
filed against the s&ouses @angune, @analo, Phil. Rabbit and Ee los Re'es
#dri)er$.
Issue= %ho should be held liable( the @angunes and <ilriters Guarant'
Assurance Cor&. #Insurance co.$
Ratio= The principle of last clear chance would call for application in a suit
between the owners and drivers of two colliding vehicles. (t does not arise
where a passenger demands responsibility from the carrier to enforce its
contractual obligations. <or it *ould be ine+uitable to e7em&t the negligent
dri)er of the Bee&ne' and its o*ners on the ground that the other dri)er *as
li:e*ise guilt' of negligence.
>n the &resum&tion that the dri)ers *ho bum& the rear of
another )ehicle are guilt' and the cause of the accident, unless contradicted
b' other e)idence, the 3C held that the Bee& made a sudden U6turn *hich
*as so abru&t that the other dri)er de los Re'es did not antici&ate the
sudden U6turn.
2he &ro7imate cause of the accident *as the negligence of
@analo and the s&ouses @angune. In culpa contractual, the carrier is
PAGE 13
TRANSPORTATION AND MARITIME LAW
&resumed to ha)e been at fault or to ha)e acted negligentl', and this
dis&utable &resum&tion ma' onl' be o)ercome b' e)idence that he had
obser)ed e7tra6ordinar' diligence or that the death or inBur' of the
&assenger *as due to a fortuitous e)ent.
2he dri)er cannot be held Bointl' liable *ith the o*ners of the Bee&
in case of breach of the contract of carriage. 2he contract of carriage is
bet*een the carrier and the &assenger, and in the e)ent of contractual
liabilit', the carrier is e7clusi)el' res&onsible therefore to the &assenger,
e)en if such breach be due to the negligence of the dri)er. 2o ma:e the
dri)er Bointl' liable *ould ma:e the carrierHs liabilit' &ersonal instead of
merel' )icarious and conse+uentl', the )ictim is entitled to reco)er onl' the
share *hich corres&onds to the dri)er.
0. Classes of common carriers
Art. 11;D. /oon carriers are #ersons, cor#orations, firs
or associations en&a&e' in the $!siness of carryin& or trans#ortin&
#assen&ers or &oo's or $oth, $y %an', )ater, or air, for co#ensation,
offerin& their ser-ices to the #!$%ic.
Art. 11;;. /oon carriers, fro the nat!re of their
$!siness an' for reasons of #!$%ic #o%icy, are $o!n' to o$ser-e
e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's an' for the
safety of the #assen&ers trans#orte' $y the, accor'in& to the
circ!stances of each case.
S!ch e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's
is f!rther e(#resse' in Artic%es 11;?, 11;B, an' 11?B, Nos. B,*, an' 1,
)hi%e the e(traor'inary 'i%i&ence for the safety of the #assen&ers is
f!rther set forth in Artic%es 11BB an' 11B*.
Art. 11BB. A coon carrier is $o!n' to carry the
#assen&ers safe%y as far as h!an care an' foresi&ht can #ro-i'e,
!sin& the !tost 'i%i&ence of -ery ca!tio!s #ersons, )ith a '!e re&ar'
for a%% circ!stances.
1. Fa*s a&&licable
Art. 11**. In a%% atters not re&!%ate' $y this /o'e, the ri&hts
an' o$%i&ations of coon carriers sha%% $e &o-erne' $y the /o'e of
/oerce an' $y s#ecia% %a)s.
0 Agba'ani=
Ne) /i-i% /o'e #riari%y &o-erns coon carriers.66 2he Pro)isions of
the Ci)il Code 81";-61"//9 &rimaril' go)ern common carriers and the
&ro)isions of the Code of Commerce 8>)erland 2rans&ortation and @aritime
Commerce9 and s&ecial la*s 8Carriage of Goods b' 3ea ActG 3al)age Act9
ha)e onl' subsidiar' a&&lication to common carriers.
Art. 11B;, N//. The %a) of the co!ntry to )hich the &oo's
are to $e trans#orte' sha%% &o-ern the %ia$i%ity of the coon carrier
for their %oss, 'estr!ction or 'eterioration.
2he &ro)isions of the 4CC &rimaril' go)ern contracts of carriage
of goods from foreign &orts to Phili&&ine &orts
Dastern 3hi&&ing Fines )s IAC 11? 3CRA 0/;
<= 2hese t*o cases, both for the reco)er' of )alue of cargo
insurance, arose from the same incident, the sin:ing of the @I3 A3IA2ICA
*hen it caught fire, resulting in the total loss of shi& and cargo.
In the first case, the @I3 A3IA2ICA, a )essel o&erated b'
&etitioner Dastern 3hi&&ing Fines, loaded at Lobe, ,a&an for trans&ortation
to @anila 1,??? &ieces of coloriAed lance &i&es in -! &ac:ages )alued at
P-1/,?; consigned to Phil. Blooming @ills and " cases of s&are &arts
)alued at P-,;/1."1 consigned to Central 2e7tile @ills. Both sets of goods
*ere insured against marine ris: for their stated )alue *ith res&ondent Ee)t.
Insurance and 3uret' Cor&oration.
In the second case, the same )essel too: on board 1-! cartons
of garment fabrics and accessories, in - containers, consigned to @ari)eles
A&&arel Cor&oration, and - cases of sur)e'ing instruments consigned to
Aman Dnter&rises and General @erchandise. 2he 1-! cartons *ere insured
b' res&ondent 4isshin <ire and @arine Insurance Co. and Eo*a <ire M
@arine Insurance Co.
Dn route for @anila, the shi& caught fire and san:. 2he insurers
&aid the corres&onding marine insurance )alues and *ere subrogated to the
rights of the latter as the insured. 2he' filed suits against the &etitioner
Carrier and *on #affirmed b' the CA$. Petitioner carrier denies liabilit' on
the ff. grounds=
#a$ that the loss *as due to an e7traordinar' fortuitous e)en
*hich is an e7em&ting circumstance under 3ec. 0#-$#b$ of the Carriage of
Goods b' 3ea Act #C>G3A$G
#b$ that *hen fire is established, the burden of &ro)ing negligence
is shifted to the cargo shi&&er.
Issues= #1$%hich la* should go)ern = the Ci)il Code or the Carriage of
Goods b' 3ea Act.
#-$%ho has the burden of &roof to sho* negligence of the carrier.
Ratio = #1$ 2he la* of the countr' to *hich the goods are to be trans&orted
go)erns the liabilit' of the common carrier in case of their loss, destruction
or deterioration. As the cargoes in +uestion *ere trans&orted from ,a&an to
the Phili&&ines, the liabilit' of Petitioner Carrier is go)erned &rimaril' b' the
Ci)il Code. Co*e)er, in all matters not regulated b' said Code, the rights
and obligations of common carriers shall be go)erned b' the Code of
Commerce and s&ecial la*s. 2hus, the C>G3A, a s&ecial la*, is
su&&letor' to the &ro)isions of the Ci)il Code.
#-$ Under the Ci)il Code, common carriers, from the nature of
their business and for reasons of &ublic &olic', are bound to obser)e e7tra6
ordinar' diligence in the )igilance o)er goods, accdg. to all the
circumstances of each case. Common carriers are res&onsible for the loss,
destruction, or deterioration of the goods unless the same is due to an' of
the ff. causes onl' #Art. 1";0, 4CC$=
5#1$ <lood, storm, earth+ua:e, lightning or other natural disaster
or calamit'G 7775
2he Carrier claims that the loss of the )essel b' fire e7em&ts it
from liabilit' under the &hrase 5natural disaster or calamit'.5 Co*e)er, *e
are of the o&inion that fire ma' not be considered a natural disaster or
calamit'. 2his must be so as it arises almost in)ariabl' from some act of
man or b' human means. It does not fall *ithin the categor' of an act of
God unless caused b' lightning or b' other natural disaster or calamit'. It
ma' e)en be caused b' the actual fault or &ri)it' of the carrier.
As the &eril of fire is not com&rehended *ithin the e7ce&tions in
Article 1";0, then Article 1";1 &ro)ides that in all cases other than those
mentioned in Art. 1";0, the CC shall be &resumed to ha)e been at fault or to
ha)e acted negligentl', unless it &ro)es that it has obser)ed the e7tra6
ordinar' diligence re+uired b' la*.
In this case, the res&ecti)e Insurers, as subrogees of the cargo
shi&&ers, ha)e &ro)en that the trans&orted goods ha)e been lost. Petitioner
carrier has also &ro)en that the loss *as caused b' fire. 2he burden then
is u&on Petitioner carrier to &ro)e that it has e7ercised the e7tra6ordinar'
diligence re+uired b' la*.
Ca)ing failed to discharge the burden of &ro)ing that it had
e7ercised the e7tra6ordinar' diligence re+uired b' la*, Petitioner Carrier can
not esca&e liabilit' for the loss of the cargo.
And e)en if fire *ere to be considered a natural disaster *ithin
the meaning of Art. 1";0, it is re+uired under Art. 1"; of the same Code
that the natural disaster must ha)e been the &ro7imate and onl' cause of
the loss, and that the carrier has e7ercised due diligence to &re)ent or
minimiAe the loss before, during or after the occurrence of the disaster. 2his
&etitioner carrier has also failed to establish satisfactoril'.
4or ma' Petitioner Carrier see: refuge from liabilit' under the
C>G3A. It is &ro)ided therein that=
53ec.0 #-$. 4either the carrier nor the shi& shall be res&onsible
for loss or damage arising or resulting from= #b$ <ire, unless caused b' the
actual fault or &ri)it' of the carrier.5

In this case, both the 2C and the CA, in effect, found, as a fact,
that there *as 5actual fault5 of the carrier sho*n b' lac: of diligence in that
*hen the smo:e *as noticed, the fire *as alread' bigG that the fire must
ha)e started -0 hrs before the same *as noticedG and that after the cargoes
*ere stored in the hatches, no regular ins&ection *as made as to their
condition during the )o'age.
2he foregoing suffices to sho* that the circumstances under
*hich the fire originated and s&read are such as to sho* that Petitioner
carrier or its ser)ants *ere negligent in connection there*ith. Conse+uentl',
the com&lete defense afforded b' the C>G3A *hen the loss results from
fire is una)ailing to &etitioner carrier.
PAGE 14
TRANSPORTATION AND MARITIME LAW
F. /oon /arriers
1. Fiabilit' and &resum&tion of negligence
Art. 11;;. /oon carriers, fro the nat!re of their
$!siness an' for reasons of #!$%ic #o%icy, are $o!n' to o$ser-e
e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's an' for the
safety of the #assen&ers trans#orte' $y the, accor'in& to the
circ!stances of each case.
S!ch e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's
is f!rther e(#resse' in Artic%es 11;?, 11;B, an' 11?B, Nos. B,*, an' 1,
)hi%e the e(traor'inary 'i%i&ence for the safety of the #assen&ers is
f!rther set forth in Artic%es 11BB an' 11B*.
#read discussion under 8;9 4ature and basis of liabilit'$
Art. 11;?. /oon carriers are res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of the &oo's, !n%ess the sae is '!e to
any of the fo%%o)in& ca!ses on%y9
<1= H%oo', stor, earth0!a2e, %i&htnin&, or other nat!ra%
'isaster or ca%aity@
<D= Act of the #!$%ic eney in )ar, )hether internationa% or
ci-i%@
<;= Act or oission of the shi##er or o)ner of the &oo's@
<?= The character of the &oo's or 'efects in the #ac2a&in& or
in the containers@
<B= Or'er or act of co#etent #!$%ic a!thority.
Art. 1";1. In all cases other than those mentioned in 4os. 1, -, ;,
0 and 1 of the &receding article, if the goods are lost, destro'ed or
deteriorated, common carriers are &resumed to ha)e been at fault or to ha)e
acted negligentl', unless the' &ro)e that the' obser)ed e7traordinar'
diligence as re+uired in Art. 1";;.
0 Agba'ani=
Res#onsi$i%ity of coon carriers.66 In general, CC are res&onsible
for the loss, destruction, or deterioration of the goods carried b' them. 2his
res&onsibilit' arises from contract, as the relation bet*een a carrier and its
&atrons is of a contractual nature. A failure on the carrier to use e7tra6
ordinar' care in carr'ing goods or &assengers safel' is a breach of contract
and constitutes culpa contractual not culpa a!uiliana. %hile the liabilit' of a
carrier as an insurer is not recogniAed in this Burisdiction, a carrier is liable
for damages suffered b' goods carried if such damages arise from its
negligence. 2he carrier is also liable e)en in those cases *here the cause
of the loss or damage is un:no*n.
D!e e(traor'inary 'i%i&ence re0!ire', carriers &i-en )i'e 'iscretion in
se%ection an' s!#er-ision of #ersons to han'%e &oo's.66 2he la*
re+uires CC to e7ercise e7tra6o diligence *hich means that the' must
render ser)ice *ith the greatest s:ill and utmost foresight. 2he e7tra6o
diligence re+uired of CC in the handling of the goods of the shi&&er and the
consignees lasts from the time the cargoes are loaded in the )essels until
the' are discharged and deli)ered to the consignees. 2o com&l' *ith this
obligation, CC should be afforded the right of ha)ing a *ide discretion in the
selection and su&er)ision of &ersons *ho *ill handle the goods.
Air carrier can terinate ser-ices of #i%ot for serio!s iscon'!ct an'
'r!n2enness, $eca!se of its '!ty of e(traor'inary 'i%i&nece.66 2he CC
can terminate the ser)ices of its dri)ers, &ilots and DDs for serious
misconduct and drun:enness because of its dut' of e7tra6ordinar' diligence.
%hene)er a &assenger dies or is inBured the &resum&tion is that the CC is at
fault not*ithstanding the fact that it has e7ercised due diligence of a good
father of a famil' in the selection and su&er)ision of its DDs. 2hus, e7tra6
ordinar' measures and diligence should be e7ercised b' it for the safet' of
its &assengers and their belongings. A CC can terminate an DD *hose
continued ser)ice is inimical to its interests and the safet' of the
&assengers.
/arrier has '!ty to 2ee# an' care for &oo's carrie'.66 It is the dut' of
the CC to &ro&erl' and carefull' handle, carr', :ee& and care for the goods
carried and to e7ercise due care to ascertain and consider the nature of the
goods offered for shi&ment and to use such methods for their care during
the )o'age as their nature re+uires. 2he carrier is liable for inBur' to, or loss
of, cargo resulting from the failure to &ro&erl' care for and handle the cargo
en routeG and it is re+uired to &ro)ide ade+uate )entilation for the safe
carriage of the cargo, and &ro)ide reasonable and ordinar' ins&ection and
care in and about the trans&ortation of cargo. A )essel should not acce&t
cargo unless it can be gi)en the t'&e of storage that its character re+uires,
for &lacing of conditions in a bill of lading does not relie)e the )essels of
obligation to ta:e a&&ro&riate care of the cargo.
D!ty of carrier to 'e%i-er car&o in &oo' con'ition as )hen %oa'e'.66
2here is no absolute obligation for a CC to acce&t cargo. It should not be
acce&ted unless it can be gi)en the t'&e of storage that its character
re+uires. %here a )essel acce&ts a cargo for shi&ment for )aluable
consideration, it ta:es the ris: of deli)ering it in good condition as *hen it
*as loaded. And if the fact of im&ro&er &ac:ing is :no*n to the carrier or
his ser)ants, or a&&arent u&on ordinar' obser)ation, but it acce&ts the
goods not*ithstanding such condition, it is not relie)ed of liabilit' for loss or
inBur' resulting therefrom.
In the e7ercise of e7tra6ordinar' diligence re+uired b' la*, the
CC must gi)e due regard to all circumstances and ta:e all ste&s necessar'
to insure the safet' of the &assengers and the goods gi)en the
circumstances.
Pres!#tion of ne&%i&ence.66 Under Art. 1";1, if the goods are &ro)ed to
ha)e been lost, destro'ed or deteriorated, CC are &resumed to ha)e been at
fault or to ha)e acted negligentl', unless the' &ro)e that the' ha)e obser)ed
the e7tra6o diligence re+uired b' la*.
2he &laintiff needs onl' to &ro)e that the goods he trans&orted
ha)e been lost, destro'ed or deteriorated
CC must then &ro)e that he has e7ercised e7tra6ordinar'
diligence re+uired b' la* or that the loss, etc. *as due to accident or some
other circumstances inconsistent *ith its liabilit'
@ere &roof of deli)er' of goods in order to a carrier, and of their
arri)al at the &lace of destination in bad order ma:es out a prima facie case
against the CC
Defenses a-ai%a$%e to //9
1. Art. 1";0
-. Art. 1";1 #e7ercise of e7tra6ordinar' diligence re+uired b' la*$
;. 4atural disaster= 2he CC is e7em&t from liabilit' if he &ro)es
that the loss or destruction of the merchandise *as due to accident and
force majeure and not to fraud, fault or negligence on the &art of the DDs
and o*ners of the CC.
CC cannot inter&ose the defense that it e7ercised due diligence
in the selection and su&er)ision of DDs. 2he liabilit' of the CC arises from
breach of the contract of carriage and not from culpa a!uiliana. It is
ho*e)er the dut' of CC to teach their dri)ers not to o)erload )ehicles, not to
e7ceed safe and legal s&eed limits, and other safet' &recautions.

/arrier not ins!rer.66CC are not re+uired to e7ercise all the care, s:ill and
diligence of *hich the human mind can concei)e nor such as *ill free the
trans&ortation of &assengers from all &ossible &erils. A CC is not an insurer
of the safet' of the &assengers and is not absolutel' and at all e)ents to
carr' them safel' and *ithout inBur'.
Knchausti 3teamshi& Co. )s Ee7ter 01 Phil -!
<= 2he Go)t. of the Phili&&ines, acting through the Insular
Purchasing Agent, em&lo'ed the ser)ices of &etitioner, Knchausti 3teamshi&
Co., a common carrier for the trans&ortation, on board the steamshi& .enus,
from the &ort of @anila to the &ort of A&&ari, Caga'an, of consignments of
merchandise, consisting of ;? cases of %ine Rose mineral oil of t*o 16
gallon cans to the case. >n another occasion, the Go)t. also sent / cases
of Coc: brand mineral oil, ten gallons to the case. 2he goods *ere
deli)ered b' the shi&&er to the carrier *hich accordingl' recei)ed them, and
to e)idence the contract of trans&ortation, the &arties dul' e7ecuted and
deli)ered *hat is &o&ularl' called Go)t. bill of lading, *hereb' it *as
sti&ulated that the carrier, Knchausti, recei)ed the abo)e6mentioned
su&&lies in a&&arent good condition, obliging itself to carr' said su&&lies to
the &lace agreed u&on.
Both shi&ments arri)ed *ith one case missing &er shi&ment.
Knchausti denied negligence. Co*e)er, u&on in)estigation, the Insular
Auditor decided that the lea:ages *ere due to KnchaustiHs negligence. 2he
Insular Auditor deducted the amount of the lost goods from the entire
amount &a'able to Knchausti. Petitioner refused to acce&t the *arrant.
Cence, this action *as filed.
Issue = Is Knchausti liable for the loss( KD3.
Ratio = 3ec. /0/ of the Administrati)e Code &ro)ided that *hen Go)t.
&ro&ert' is transmitted from one source to another b' carrier, it shall be
u&on &ro&er bill of lading or recei&t, from such carrierG and it shall be the
dut' of the consignee or his re&resentati)e to ma:e all notation of an'
e)idence of loss, shortage, or damage, on the bill of lading or recei&t before
accom&lishing it. It is admitted b' &etitioner that the consignee, at the time
PAGE 15
TRANSPORTATION AND MARITIME LAW
the goods *ere deli)ered, noted the losses in the res&ecti)e bill of ladings.
3uch notation made in obedience to the code, is com&etent e)idence to
sho* that the shortage did e7ist. Inasmuch as the fact of loss *as &ro)en,
it results in the &resum&tion that the &etitioner *as to blame for the lossG
and it *as incumbent u&on the &etitioner to rebut that &resum&tion b'
&ro)ing that the loss *as not due to an' fault or negligence of the &etitioner.
The mere proof of delivery of goods in good order to a carrier,
and of their arrival at the place of destination in bad order, ma'es out a
prima facie case against the carrier, so that if no explanation is given as to
how the injury occurred, the carrier must be held responsible. It is
incumbent u&on the carrier to &ro)e that the loss *as due to accident or
some other circumstance inconsistent *ith its liabilit'. Indeed, if the Go)t.
had instituted an action in court against &etitioner to reco)er the )alue of the
oil lost, it *ould, based on the facts, be entitled to Budgment. In the absence
of &roof sho*ing that the carrier *as not at fault for the loss, the Insular
Auditor *as entitled to *ithhold the amount admittedl' due to the &etitioner
for the freight charges, a sum sufficient to co)er the )alue of the oil lost in
transit.
@irasol )s Eollar 1; Phil 1-0
<= @irasol *as the o*ner of t*o cases of Dnc'clo&edia Brittanica
shi&&ed in good order and condition on board EollarHs steamshi&, President
Garfield, to be trans&orted from 4e* Kor: to @anila. 2he boo:s arri)ed in
bad order and damaged condition, resulting in total loss of one case and
&artial loss of the other. @irasol filed claims, but Eollar refused to &a'
alleging that the damage *as caused b' sea *ater and that @irasol entered
into a contract &ro)iding that Eollar *ill not be held liable for loss or damage
of merchandise resulting from 5acts of God5 or 5&erils of the sea,5 and that
in no case shall it be held liable be'ond N-1? for an' article not enclosed in
a &ac:age unless a higher )alue is stated therein and ad )alorem freight
&aid or assessed thereon. 2he FC ruled in fa)or of @irasol for &a'ment of P
-,?!?.
Issue = %>4 Eollar ma' be held liable. KD3.
Ratio= 2here *as no claim or &retense that @irasol signed the bill of lading
or that he :ne* of its contents. In that situation, he *as not legall' bound b'
the clause limiting EollarHs liabilit'. &here it appears that a bill of lading was
issued to a shipper containing a clause limiting the carrier)s liability, printed
in fine letters on the bac' of the bill of lading, which the shipper did not sign
and of which he was not advised, the shipper is not bound by the clause
limiting liability and the stipulation is void or against public policy.
3hi&&ers *ho are forced to shi& goods in an ocean liner ha)e
legal rights. %hen the goods are deli)ered on board the shi& in good order
and condition and the carrier deli)ers them to the shi&&er in bad order and
condition, in an action for damages, the burden of &roof shifted and it
de)ol)es u&on the carrier to both allege and &ro)e that the goods *ere
damaged b' reason of some act *hich legall' e7em&ts it from liabilit'.
Ca)ing recei)ed the bo7es in good condition, its legal dut' *as to
deli)er them in the same condition as recei)ed. Eollar, ha)ing admitted that
the goods *ere damaged *hile in transit and in its &ossession, the burden
of &roof then shifted and it de)ol)ed u&on him to allege and &ro)e that the
damage *as caused b' reason of some fact *hich e7em&ted it from liabilit'.
As to *hen and ho* the goods *ere damaged in transit is a matter
&eculiarl' *ithin the :no*ledge of the carrier and its em&lo'ees. 2o re+uire
@irasol to &ro)e such, *ould force him to rel' u&on the DDs of EollarHs shi&,
*hich in legal effect *ould be to sa' that he could not reco)er damages at
all.
3ince Eollar *as not e)en able to &ro)e that the goods *ere *et
*ith sea *ater due to a fortuitous e)ent, it must be &resumed that the carrier
*as liable.
-. D7em&tion from liabilit'
Proof of the deli)er' of the goods in good order to a carrier, and
of their arri)al at the &lace of destination short or in bad order, ma:es a
prima facie caseG it is incumbent on the carrier, in order to e7onerate itself,
to &ro)e that the loss or inBur' *as due to some circumstances inconsistent
*ith its liabilit'
#a$ 4atural disaster
Art. 11;?. /oon carriers are res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of the &oo's, !n%ess the sae is '!e to
any of the ff. ca!ses on%y9
<1= H%oo', stor, earth0!a2e, %i&htnin&, or other nat!ra%
'isaster or ca%aity@
(((
Art. 1";. In order that the common carrier ma' be e7em&ted
from res&onsibilit', the natural disaster must ha)e been the &ro7imate and
onl' cause of the loss. Co*e)er, the common carrier must e7ercise due
diligence to &re)ent or minimiAe loss before, during and after the occurrence
of flood, storm, or other natural disaster in order that the common carrier
ma' be e7em&ted from liabilit' for the loss, destruction, or deterioration of
the goods. 2he same dut' is incumbent u&on the common carrier in case of
an act of the &ublic enem' referred to in Art. 1";0 #-$.
Art. 11?+. If the // ne&%i&ent%y inc!rs in 'e%ay in
trans#ortin& the &oo's, a nat!ra% 'isaster sha%% not free s!ch carrier
fro res#onsi$i%ity.
Art. ;*1. Merchan'ise sha%% $e trans#orte' at the ris2 an'
-ent!re of the shi##er, if the contrary has not $een e(#ress%y
sti#!%ate'.
As a conse0!ence, a%% the %osses an' 'eteriorations )hich
the &oo's ay s!ffer '!rin& the trans#ortation $y reason of fort!ito!s
e-ent, force a.e!re, or the inherent nat!re an' 'efect of the &oo's,
sha%% $e for the acco!nt an' ris2 of the shi##er.
Proof of these acci'ents is inc!$ent !#on the carrier.
</o'e of /oerce.=
0 Agba'ani=
Effect of Ne) /i-i% /o'e.66 2rans&ortation of the merchandise 5at the ris:
and )enture of the shi&&er5 means that the shi&&er *ill suffer losses and
deterioration arising from fortuitous e)ent, force majeure, or inherent nature
and defects of the goods. It does not mean that the carrier is free from
liabilit' for losses and deterioration arising from his negligence or fault, *Ic
is &resumed. 2hus construed, &ar. 1 of Art. ;/1 is not inconsistent *ith Art.
1";1 of the 4CC.
Re0!isites for 'efense of nat!ra% 'isaster9
1. Art. 1"; 66 natural disaster must ha)e been the &ro7imate and
onl' cause of the loss
-. 2he CC must e7ercise due diligence to &re)ent or minimiAe the
loss before, during and after the occurrence of flood, storm, or other natural
disaster. If the CC does not e7ercise due diligence in minimiAing the loss,
he ma' 'et be held liable not*ithstanding the fact that the loss, destruction
or deterioration of the goods arose out of natural disaster.
;. Art. 1"0? 66 the CC must not be in dela'. If the CC incurs in
dela', a natural disaster shall not free it from res&onsibilit'. Under Art. 11/1
&ar. ;, if the obligor incurs dela', he shall be res&onsible for an' fortuitous
e)ent until he has effected deli)er'.
Co*e)er, if bet*een the dela' or refusal of the CC to trans&ort
the goods and the loss of the goods due to an act of God there inter)ened
the shi&&erHs negligence, thus causing a brea: in the chain of causation
bet*een the act of God *hich caused their loss and the CCHs fault, the act
of God is the &ro7imate cause of the loss and the carrierHs dela' or refusal
to trans&ort the goods, is merel' the remote cause. In such cases, the
shi&&er is not e)en entitled to set u& the claim of contributor' negligence. It
is then necessar' that it be established that the CC *as guilt' of a *illful or
negligent act and that bet*een this *illful or negligent act and the act of
God, no negligence on the &art of the shi&&er inter)ened.
Acci'ent '!e to 'efects of carrier not caso fortuito.66 Accidents caused
either b' defects in the carrier or through the negligence of the carrier is not
caso fortuito. 2he &assenger or shi&&er has e)er' right to &resume that the
carrier is &erfectl' in good condition and could trans&ort him safel' and
securel' to his destination
2an Chiong 3an )s Knchausti M Co., -- Phil 11-
<= Knchausti and Co. recei)ed from >ng Bien 3i& in @anila -?1
bundles of goods to be con)e'ed b' KCHs steamer to Gubat in 3orsogon,
and there to be transhi&&ed to another )essel belonging to KC and
trans&orted to Catarman, in 3amar. As the lorcha Pilar, *hich *as to
trans&ort the goods to Catarman *as not 'et in Gubat *hen the cargo
arri)ed, the cargo *as stored in KCHs *arehouse.
3e)eral da's later, the lorcha arri)ed and the goods *ere loaded.
Co*e)er, as the lorcha *as being to*ed, a storm arose, dro)e the lorcha to
the shore and *rec:ed it, scattering the goods on the beach. KCHs laborers
&roceeded to gather u& the goods. As it *as im&ossible to &reser)e the
PAGE 16
TRANSPORTATION AND MARITIME LAW
goods, the' *ere sold at a &ublic auction. Plaintiff filed an action for
damages for P -?,???. FC decided that &laintiff *as entitled onl' to P
10,/0-./;.
Issues= #1$ %>4 the carrier is relie)ed from liabilit' due to force majeure.
KD3.
#-$ %>4 the carrier is liable for the loss of the cargo and for
failure to deli)er the same at the &lace of destination. 4>.
Ratio= #1$ It is a &ro)en fact that the loss or damage to the goods shi&&ed on
the said lorcha *as due to the force majeure *hich caused the *rec: of the
said craft. Accdg. to Art. ;/1 of the Code of Commerce, merchandise shall
be trans&orted at the ris: and )enture of the shi&&er, unless the contrar' be
e7&ressl' sti&ulated. 4o such sti&ulation a&&ears of record, therefore, all
damages and im&airment suffered b' the goods in trans&ortation, b' reason
of accident, force maBeure, or b' )irtue of the nature or defect of the articles,
are for the account and ris: of the shi&&er. 2he carrier is e7em&t from
liabilit' if he is able to &ro)e, as he did &ro)e, that the loss or destruction of
the merchandise *as due to accident and force maBeure and not to fraud,
fault or negligence on the &art of the ca&tain or o*ner of the shi& 66 that the
loss *as a result of the stranding of Pilar because of the hurricane that
o)ertoo: it.
#-$ 2he record bears no &roof that said loss caused b' the
destruction of Pilar occurred through the carelessness or negligence of the
defendant, its agents or &atron of the lorcha. 2he defendant as *ell as its
agents and &atron had a natural interest in &reser)ing the craft 66 an interest
e+ual to that of the &laintiff. 2he record discloses that Pilar *as manned b'
an e7&erienced &atron and a sufficient number of cre*men &lus the fact that
it *as full' e+ui&&ed. 2he cre*men too: all the &recautions that an' diligent
man should ha)e ta:en *hose dut' it *as to sa)e the boat and its cargo,
and b' the instinct of self6 &reser)ation of their li)es. Considering,
therefore, the conduct of the men of the defendant Pilar and of its agents
during the disaster, the defendant has not incurred an' liabilit' *hatsoe)er
for the loss of the goods, inasmuch as such loss *as the result of a
fortuitous e)ent or force majeure, and there *as no negligence or lac: of
care or diligence on the &art of the defendant or its agents.
Foss of a shi& and of its cargo, in a *rec: due to accident or
force majeure must, as a general rule, fall u&on their res&ecti)e o*ners,
e7ce&t in cases *here the *rec:ing or stranding of the )essel occurred
through malice, carelessness or lac: of s:ill on the &art of the ca&tain or
because the )essel &ut to sea is insufficientl' re&aired and &re&ared. #Art.
!01, Code of Commerce$
@artini Ftd. )s @acondra' M Co., ; Phil ;0
<= @artini shi&&ed on board the Daster, o*ned b' the Australian
3teamshi& Co. re&resented in the Phili&&ines b' @acondra', -1 cases of
chemicals for Lobe, ,a&an. U&on arri)al in Lobe, it *as disco)ered that the
shi&ment *as damaged b' rain and sea *ater. @artini claims that it *as the
shi&Hs dut' to sto* the cargo in the hold and not to &lace it on the dec:
e7&osed to the elements. @acondra' denied an' res&onsibilit' on the
ground that the contract of affreightment clearl' states that the cargo *as to
be carried on dec: at shi&&erHs ris: as e)idenced b' the *ords 5on dec: at
shi&&erHs ris:5 stam&ed on the bill of lading.
>rdinaril', *hen a shi&&er *ishes to a)ail of s&ace on board a
shi&, he first obtains a shi&&ing order from the shi& o*ner. 2his shi&&ing
order is authorit' for the shi&Hs officers to acce&t the shi&&erHs cargo. %hen
signed b' the shi&Hs mate, this *ould constitute the mateHs recei&t sho*ing
that the cargo has been ta:en aboard. 2he shi&&er *ould then &resent this
recei&t to the agent of the shi&Hs com&an' *ho *ould then issue the bill of
lading. Co*e)er, in this case, the shi&&er obtained the bill of lading *ithout
first &resenting the mateHs recei&t #so as to e7&edite the negotiation of the
bill *ith the ban:s$. B' doing so, the shi&&er entered into a *ritten guarant',
binding himself to abide b' the terms of the mateHs recei&t *hich in this case
obtained a sti&ulation that the cargo shall be shi&&ed on or under the dec:
at the o&tion of the shi& and at shi&&erHs ris:.
In this case, &laintiff &rotested the arrangement but *hen the
defendant informed them that the cargo could be discharged if the' *ere
dissatisfied, &laintiff did not order its discharge. 2he C<I ruled for @artini.
Issues= #1$ %>4 &laintiff consented to ha)ing the cargo carried on dec:.
KD3.
#-$ %>4 defendant *as negligent and thus liable for the damage
to the cargo. 4>.
Ratio= %hile @artini *ould ha)e greatl' &referred for the cargo to be carried
under the hatches, the' ne)ertheless consented for it to go on dec:.
Codina, an DD of @artini, if attenti)e to the interests of his com&an', must
ha)e :no*n from the tenor of the guarant' *hich he signed that defendant
had reser)ed the right to carr' the cargo on dec:. 2he bill of lading &lainl'
sho*ed that the cargo *ould be so carried. 2he &laintiff *as dul' notified as
to the manner b' *hich *as the cargo *as to be shi&&ed. 2he' onl'
&rotested after the bill had been negotiated at the ban: and e)en *hen there
*as time to sto& the shi&ment, the' failed to gi)e the necessar' instructions
thereb' manifesting ac+uiescence.
In e)er' contract of affreightment, losses b' dangers of the seas
are e7ce&ted from the ris: *hich the carrier ta:es u&on himself *hether the
e7ce&tion is e7&ressed in contract or not. 2he e7ce&tion is made b' la*
and falls *ithin the general &rinci&le that no one is res&onsible for fortuitous
e)ents. But then this general la* is subBect to the e7ce&tion that *hen the
ine)itable accident is &receded b' fault of the carrier, *ithout *hich it *ould
not ha)e ha&&ened, then he becomes res&onsible for it.
2he carrier is res&onsible for safe and &ro&er storage of the
cargo, and there is no doubt that b' the general maritime la* he is bound to
secure the cargo safel' under dec:. If he carries the goods on dec: *ithout
the consent of the shi&&er and the goods are damaged or lost in
conse+uence of being e7&osed, the carrier cannot &rotect himself b'
sho*ing that the' *ere damaged or lost b' the dangers of the sea. %hen
the shi&&er consents to his goods being carried on dec:, he ta:es the ris:
u&on himself.
If goods shi&&ed are found to ha)e been damaged, the burden of
&roof is on the carrier to sho* that the damage *as due to fortuitous e)ents.
But, e)en if the damage is caused b' one of the e7ce&ted causes, the
carrier is still res&onsible if the inBur' might ha)e been a)oided b' the
e7ercise of reasonable s:ill and attention on their &art. Co*e)er, in this
case, *here the shi&&er consented to the conditions of carriage, the burden
of &roof is shifted to the shi&&er.
As there is no allegation or &roof of negligence on the &art of the
carrier in &rotecting the cargo from rain or sea *ater and as the com&laint
clearl' indicates that the damage *as due to it being :e&t on dec:, and
such manner of carriage ha)ing been consented to b' the &laintiff, the
defendant is absol)ed. It is not &ermissible for the court, in the absence of
an' allegation or &roof of negligence, to attribute negligence to the shi&Hs
em&lo'ees in the matter of &rotecting the goods from rains and storms.
Dastern 3hi&&ing Fines )s IAC, 11? 3CRA 0/;
Issue= 3hould &etitioner be e7em&ted from liabilit' under Art. 1";0 on the
ground that the loss of the )essel b' fire comes under the &hrase 5natural
disaster or calamit'(5 4>.
Ratio= <ire ma' not be considered a natural disaster or calamit'. 2his must
be so as it arises almost in)ariabl' from some act of man or b' human
means. It does not fall *ithin the categor' of an act of God unless caused
b' lightning or b' another natural disaster or calamit'. It ma' e)en be
caused b' the actual fault or &ri)it' of the carrier. Art. 1/!? *hich considers
fire as an e7tra6ordinar' fortuitous e)ent does not a&&l' since it refers onl'
to leases of rural lands *here a reduction of rent is allo*ed *hen more than
1I- of the fruits ha)e been lost due to such e)ent.
As the &eril of fire is not com&rehended under Art. 1";0, Art.
1";1 a&&lies and the CC shall be &resumed to ha)e been at fault or to ha)e
acted negligentl', unless it &ro)es e7tra6ordinar' diligence. 2he burden is
on the CC.
2he FC and the CA found that there *as lac: of diligence on the
&art of CC amounting to actual fault. D)en if the fire *ere to be considered
a natural disaster under Art. 1";0, it is re+uired under Art. 1"; that the
disaster must ha)e been the &ro7imate and onl' cause of the loss, and that
the CC e7ercised due diligence to &re)ent or minimiAe the loss before,
during or after the occurrence of the disaster. 4or ma' &etitioner see:
refuge under C>G3A since fire is onl' an e7em&ting circumstance if not
caused b' actual fault or &ri)it' of the carrier.
Issue= >n the N1?? Per Pac:age Fimitation
Ratio= Petitioner carrier a)ers that its liabilit' should not e7ceed N1?? &er
&ac:age as &ro)ided in 3ection 0#1$ of the C>G3A, *hich reads=
5#1$ 4either the carrier nor the shi& shall in an' e)ent be or
become liable for an' loss or damage to or in connection *ith the
trans&ortation of goods in an amount e7ceeding N1?? &er &ac:age 777 or in
case of goods not shi&&ed in &ac:ages, &er customar' freight unit, or the
e+ui)alent of that sum in other currenc', unless the nature and )alue of
such goods ha)e been declared b' the shi&&er before shi&ment and
inserted in the bill of lading.5
Article 1"0, 4CC also allo*s the limitations of liabilit' in that it
&ro)ides that 5a sti&ulation that the CCHs liabilit' is limited to the )alue of the
goods a&&earing in the bill of lading, unless the shi&&er or o*ner declares a
greater )alue, is binding.5
PAGE 17
TRANSPORTATION AND MARITIME LAW
It is to be noted that the Ci)il Code does not of itself limit the
liabilit' of the CC to a fi7ed amount &er &ac:age, although the Code
e7&ressl' &ermits a sti&ulation limiting such liabilit'. 2hus, the C>G3A,
*hich is su&&letor' to the Ci)il Code, ste&s in and su&&lements the Code b'
establishing a statutor' &ro)ision limiting the carrierHs liabilit' in the absence
of a declaration of a higher )alue of the goods b' the shi&&er in the bill of
lading. 2he &ro)isions of the C>G3A on limited liabilit' are as much a &art
of a bill of lading as though &h'sicall' in it and as much a &art thereof as
though &laced therein b' agreement of the &arties.
In these cases, there is no sti&ulation in the res&ecti)e bills of
lading limiting the carrierHs liabilit' for the loss or destruction of the goods.
4or is there a declaration of a higher )alue of the goods. Cence, &etitioner
carrierHs liabilit' should not e7ceed N1?? &er &ac:age, or its &eso e+ui)alent,
at the time of the &a'ment of the )alue of the goods lost, but in no case
5more than the amount of damage actuall' sustained.5
2he liabilit' *as com&uted as= 1-! cartons #shi&&ing unit$ 7 N1??
O N/0,???. 2he cartons and not the containers should be considered as the
shi&&ing unit.
Eissenting = Ka&, ,.
2here is no e)idence that the containers *ere carrier6 su&&lied.
2he shi&&er must ha)e sa)ed on freight charges b' using containers for
shi&ment. 2he containers should be considered as the shi&&ing unit.
#b$ Act of &ublic enem'
Art. 11;?. /oon carriers are res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of the &oo's, !n%ess the sae is '!e to
any of the fo%%o)in& ca!ses on%y9
(((
<D= Act of the #!$%ic eney in )ar, )hether internationa% or
ci-i%@
Art. 11;5. In or'er that the coon carrier ay $e
e(e#te' fro res#onsi$i%ity, the nat!ra% 'isaster !st ha-e $een the
#ro(iate an' on%y ca!se of the %oss. Eo)e-er, the coon carrier
!st e(ercise '!e 'i%i&ence to #re-ent or inii"e %oss $efore, '!rin&
an' after the occ!rrence of f%oo', stor, or other nat!ra% 'isaster in
or'er that the coon carrier ay $e e(e#te' fro %ia$i%ity for the
%oss, 'estr!ction, or 'eterioration of the &oo's. The sae '!ty is
inc!$ent !#on the coon carrier in case of an act of the #!$%ic
eney referre' to in Art. 11;? <D=.
0 Agba'ani=
Acts of #!$%ic eney.66 2his defense is not absolute. Under 1";, in
order for the CC to be e7em&ted from liabilit', #1$ the act of the &ublic
enem' must ha)e been the &ro7imate and onl' causeG and #-$ the CC must
ha)e e7ercised due diligence to &re)ent or minimiAe the loss before, during
and after the act of the &ublic enem' causing the loss, destruction or
deterioration of the goods.
#c$ Act or omission of the shi&&er
Art. 11;?. /oon carriers are res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of the &oo's, !n%ess the sae is '!e to
any of the fo%%o)in& ca!ses on%y9
(((
<;= Act or oission of the shi##er or o)ner of the &oo's@
Art. 11?1. If the shi##er or o)ner ere%y contri$!te' to the
%oss, 'estr!ction or 'eterioration of the &oo's, the #ro(iate ca!se
thereof $ein& the ne&%i&ence of the coon carrier, the %atter sha%% $e
%ia$%e in 'aa&es, )hich, ho)e-er, sha%% $e e0!ita$%y re'!ce'.
Act or oission of the shi##er.66 2he act or omission of the shi&&er must
be the &ro7imate cause of the loss, destruction or deterioration of the goods.
If the shi&&er merel' contributed to the loss,etc. and the &ro7imate cause is
still the negligence of the CC, the CC shall still be liable for damages
although the damages shall be e+uitabl' reduced.
#d$ Character of goods, etc.
Art. 11;?. /oon carriers are res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of the &oo's, !n%ess the sae is '!e to
any of the fo%%o)in& ca!ses on%y9
<?= The character of the &oo's or 'efects in the #ac2a&in& or
in the containers@
Art. 11?D. E-en if the %oss, 'estr!ction, or 'eterioration of
the &oo's sho!%' $e ca!se' $y the character of the &oo's, or the
fa!%ty nat!re of the #ac2in& or of the containers, the coon carrier
!st e(ercise '!e 'i%i&ence to foresta%% or %essen the %oss.
Art. ;**. Within the t)enty fo!r ho!rs fo%%o)in& the recei#t
of the erchan'ise, a c%ai ay $e $ro!&ht a&ainst the carrier on
acco!nt of 'aa&e or a-era&e fo!n' therein on o#enin& the #ac2a&es,
#ro-i'e' that the si&ns of the 'aa&e or a-era&e &i-in& rise to the
c%ai ay not $e 2no)n fro the e(terior #art of the #ac2a&es, an' in
case that they ay $e so ascertaine', sai' c%ai sha%% on%y $e
a'itte' at the tie of the recei#t of the #ac2a&es.
After the #erio's entione' ha-e e%a#se', or after the
trans#ortation char&es ha-e $een #ai', no c%ai )hatsoe-er sha%% $e
a'itte' a&ainst the carrier )ith re&ar' to the con'ition in )hich the
&oo's trans#orte' )ere 'e%i-ere'. </o'e of /oerce.=
Claims for damages must be made at the time the goods are
deli)ered unless the indications of the damage cannot be ascertained from
the e7terior of the &ac:age, in *hich case such *ritten claims must be
made *Iin -0 hours from deli)er'
Rule= As long as the damage to the goods *as due &urel' to the
inherent nature or defect of the goods or of the containers thereof, the CC
cannot be held res&onsible. Co*e)er, under 1"0-, the CC must e7ercise
due diligence to forestall or lessen the loss for it to com&letel' esca&e
liabilit'.
Go)t. )s Knchausti, 0? Phil -1
<= Plaintiff shi&&ed a cargo of roofing tiles from @anila to Iloilo on a
)essel o*ned b' Knchausti. Eefendant stam&ed on the bill of lading the
condition that the goods ha)e been acce&ted for trans&ortation subBect to
the conditions &rescribed b' the Insular Collector of Customs. 2he tiles *ere
deli)ered b' defendant to the consignee of the &laintiff at Iloilo. U&on
deli)er', it *as found that some of the tiles had been damaged. 2he FC
absol)ed the defendant from an' liabilit' since the defendant *as able to
&ro)e that the tiles *ere leaded, stored and discharged b' hand labor and
not b' an' mechanical de)ice. Eefendant &ro)ed, *ithout dis&ute from the
&laintiff, that there *as no negligence on its &art, the tiles being discharged
b' handlabor and not b' mechanical de)ice.
Issue = %>4 the terms and conditions of the bill of lading *ere binding u&on
the &laintiff. KD3.
Ratio= 2he defendant &laced said stam& u&on the bill of lading before the
&laintiff shi&&ed the tiles, and that ha)ing shi&&ed the tiles under said bill,
*ith the terms and conditions of carriage stam&ed thereon, the go)t. must
be deemed to ha)e assented to said terms and conditions. 2he binding
effect of the conditions stam&ed on the bill of lading did not &roceed from
the Collector of Customs, but from the actual contract *hich the &arties
made. Dach bill of lading is a contract and the &arties thereto are bound b'
its terms.
2he defendant, to free itself from liabilit', *as onl' obliged to
&ro)e that the damages suffered b' the tile *ere b' )irtue of the nature or
defect of the articles. 2he &laintiff, to hold the defendant liable, *as obliged
to &ro)e that the damage to the tiles, b' )irtue of their nature, occurred on
account of the defendantHs negligence or because the latter did not ta:e
&recaution usuall' ado&ted b' careful &ersons.
2he defendant &ro)ed,and the &laintiff did not attem&t to dis&ute
that the tiles *ere of a brittle and fragile nature and that the' *ere deli)ered
to the defendant *ithout an' &ac:ing or &rotecti)e co)ering. 2he &laintiff,
not ha)ing &ro)ed negligence on the &art of the defendant, is not entitled to
reco)er damages.

3outhern Fines )s CA, 0 3CRA -1/
<= 2he cit' of Iloilo re+uisitioned for rice from 4ARIC in @anila.
4ARIC shi&&ed from @anila to Iloilo 1"-/ sac:s of rice on board the 33
Gen. %right belonging to 3outhern Fines. After the cit' &aid for the rice, it
*as noted that 01 sac:s *ere missing. 2he cit' filed a com&laint against
PAGE 18
TRANSPORTATION AND MARITIME LAW
4ARIC and 3outhern Fines to reco)er the amount. 2he FC absol)ed 4ARIC
but ordered 3outhern Fines to &a'. 2he CA affirmed.
Issue= %>4 &etitioner is liable for the loss or shortage. KD3.
Ratio= Under Art. ;/1 of the Code of Commerce, the carrier, in order to free
itself from liabilit', *as onl' obliged to &ro)e that the damage suffered b'
the goods *ere b' )irtue of defects of the articles. Under Art. ;/-, the
&laintiff in order to hold the carrier liable, *as obliged to &ro)e that the
damage to the goods b' )irtue of their nature, occurred on account of the
carrierHs negligence or because the carrier did not ta:e the &recaution
ado&ted b' careful &ersons.
Petitioner claims e7em&tion based on the fact that the sac:s
*ere in bad condition and that rice *as im&ro&erl' &ac:ed causing a lot of
s&illage of the rice *hile it *as being loaded.
3outhern FinesH contention is untenable, for if the fact of im&ro&er
&ac:ing is :no*n to the carrier or its ser)ants or a&&arent u&on ordinar'
obser)ation, but it acce&ts the goods not*ithstanding such condition, it is
not relie)ed of liabilit' for loss or inBur' resulting therefrom. <urthermore,
the &etitioner itself fran:l' admitted that the strings t'ing the bags of rice
*ere bro:en, that some bags *ere *ith holes and &lent' of rice *ere s&illed
inside the hull of the )essel, and that the boat &ersonnel collected -/ sac:s
of rice, *hich the' distributed among themsel)es. 2his sho*s that the
shortage resulted from the negligence of the &etitioner.
2his is an action for refund of the amount &aid in e7cess of
deli)er' and is not for damages. 2herefore, the -0 hour rule under Art. ;//
does not a&&l'.
#e$ >rder of com&etent authorit'
Art. 11;?. /oon carriers are res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of the &oo's, !n%ess the sae is '!e to
any of the fo%%o)in& ca!ses on%y9
(((
<B= Or'er or act of co#etent #!$%ic a!thority.
Art. 11?;. If thro!&h or'er of #!$%ic a!thority the &oo's are
sei"e' or 'estroye', the coon carrier is not res#onsi$%e, #ro-i'e'
sai' #!$%ic a!thority ha' #o)er to iss!e the or'er.
0 Agba'ani=
Or'er or act of co#etent a!thority.66 Under 1"0;, the CC is not
res&onsible for the loss, etc. of the goods if the &ublic authorit' had &o*er
to issue the order. %here the officer acts *ithout legal &rocess, the CC *ill
be held liable.
GanAon )s CA, 1/1 3CRA /0/
<= Gelacio 2umambing contracted the ser)ices of GanAon to haul
;?1 tons of scra& iron from @ari)eles, Bataan to the &ort of @anila on board
the lighter FC2 Batman. %hen half of the scra& iron *as alread' loaded, the
ma'or of @ari)eles arri)ed and demanded P 1,??? from 2umambing. An
argument resulted in the shooting of 2umambing. 2he loading of the scra&
iron *as resumed but the acting ma'or arri)ed and ordered Ca&tain 4iAa to
dum& the scra& iron. 2he acting ma'or too: the rest to the com&ound of
4A33C> and too: custod' of the scra& iron. 2umambing filed an action for
damages against GanAon based on culpa contractual. 2he 2C and CA held
GanAon liable.
Celd= GanAon contended that the scra& iron had not been unconditionall'
&laced under his custod' and control to ma:e him liable. Co*e)er, he
admitted that he recei)ed the scra&s of iron *hich 2umambing deli)ered to
him. B' the said act of deli)er', the scra&s *ere unconditionall' &laced in
the &ossession and control of the common carrier and u&on their recei&t b'
the carrier for trans&ortation, the contract of carriage *as deemed &erfected.
2he carrierHs e7traordinar' res&onsibilit' for the loss, destruction, or
deterioration of the goods commenced.
Pursuant to Art. 1";/, such e7tra6ordinar' res&onsibilit' *ould
cease onl' u&on the deli)er', actual or constructi)e, b' the carrier to the
consignee or to the &erson *ho has the right to recei)e them. 2he fact that
&art of the shi&ment had not been loaded on board the lighter did not im&air
the said contract of trans&ortation as the goods remained in the custod' and
control of the carrier, albeit still unloaded.
GanAon failed to sho* that the loss *as due to an' causes under
Art. 1";0. %e cannot sustain the theor' of caso fortuito. 2he carrier raised
the defense that the loss *as due to an order or act of com&etent &ublic
authorit'. 2he carrier, ho*e)er, failed to sho* that the acting ma'or had the
&o*er to issue the dis&uted order or that it *as la*ful or issued under legal
&rocess of authorit'. 2he order *as &art of the &ressure b' the ma'or to
sha:edo*n 2umambing for P 1,???. 2he order did not constitute )alid
authorit' for GanAon to carr' out.
In an' case, the inter)ention of the munici&al officials *as not of
a character that *ould render im&ossible the fulfillment b' the carrier of its
obligation. 2he &etitioner *as not dut' bound to obe' the illegal order to
dum& into the sea the scra& iron. 2here is absence of sufficient &roof that
the issuance of the order *as attended *ith such force or intimidation as to
com&letel' o)er&o*er the *ill of the carrierHs DDs.
@elencio6Cerrera, *issenting= 2hrough the order or act of com&etent &ublic
authorit', the &erformance of the contract *as rendered im&ossible. 2he
ca&tain has no control o)er the situation Bust as 2umambing had no control
o)er the situation.
;. Euration of D7traordinar' Res&onsibilit'
Art. 11;*. The e(traor'inary res#onsi$i%ity of the coon
carrier %asts fro the tie the &oo's are !ncon'itiona%%y #%ace' in the
#ossession of, an' recei-e' $y the carrier for trans#ortation !nti% the
sae are 'e%i-ere', act!a%%y or constr!cti-e%y, $y the carrier to the
consi&nee, or to the #erson )ho has a ri&ht to recei-e the, )itho!t
#re.!'ice to the #ro-isions of Art. 11;3.
Art. 11;1. The coon carrierGs '!ty to o$ser-e e(tra6
or'inary 'i%i&ence in the -i&i%ance o-er the &oo's reains in f!%% force
an' effect e-en )hen they are te#orari%y !n%oa'e' or store' in
transit, !n%ess the shi##er or o)ner has a'e !se of the ri&ht of
sto##a&e in transit!.
Art. 11;3. The e(tra6or'inary %ia$i%ity of the coon carrier
contin!es to $e o#erati-e e-en '!rin& the tie the &oo's are store' in
a )areho!se of the carrier at the #%ace of 'estination !nti% the
consi&nee has $een a'-ise' of the arri-a% of the &oo's an' has
reasona$%e o##ort!nity thereafter to reo-e the or other)ise
'is#ose of the.
0 Agba'ani=
When carrierGs res#onsi$i%ity $e&ins.66 Under Art. 1";!, the e7tra6o
res&onsibilit' of the CC begins from the time the goods are deli)ered to the
carrier. 2he deli)er' to the CC must &lace the goods to be trans&orted
unconditionall' in the &ossession of the CC and the CC must recei)e them.
>ther*ise, the e7tra6ordinar' res&onsibilit' of the CC *ill not commence.
When carrierGs res#onsi$i%ity terinates.66 Under 1";!, the e7tra6
ordinar' res&onsibilit' of the CC is terminated at the time the goods are
deli)ered to the consignee or the &erson *ho has a right to recei)e them
#actual or constructi)e deli)er'$.
Constructi)e deli)er'= 4otice b' the CC that the cargo had
alread' arri)ed, &lacing them at the dis&osal of the shi&&er or consignee
releases CC from e7tra6ordinar' res&onsibilit'. <rom such moment the
consignee or shi&&er should e7ercise o)er the cargo the ordinar' control
&ertinent to o*nershi& #should unload cargo from the CC$
Shi##er $o!n' to o$ser-e a%% 'i%i&ence in o$tainin& 'e%i-ery of
&oo's.66 2he shi&&er is bound to obser)e all diligence in obtaining deli)er'
of the goods. >nce the goods are deli)ered, the e7tra6ordinar'
res&onsibilit' of the CC ceases.
Lia$i%ity of shi##er for 'e%ay in o$tainin& 'e%i-ery of &oo's,
'e!rra&e.66 2he shi&&er is liable for lost earnings occasioned b' the
unnecessar' dela' in the use of the )ehicles belonging to the carrier, due in
turn to the failure of the former, u&on recei&t of notice of the arri)al of the
goods at the &lace of destination, to unload forth*ith and ta:e a*a' the
cargo from the )ehicles. 2his is a charge for demurrage #addtl. ser)ice
&ro)ided b' CC$
Effect of storin& in transit.66 Under 1";", the tem&orar' unloading or
storage of the goods during the time that the' are being trans&orted does
not interru&t the e7tra6ordinar' res&onsibilit' of the CC
D7ce&tion= %here the shi&&er or o*ner e7ercises its right of
stoppage in transitu #the act b' *hich the un&aid )endor of goods sto&s
their &rogress and resumes &ossession of them, *hile the' are in the
course of transit from him to the &urchaser, and not 'et actuall' deli)ered to
the latter. 2his is e7ercised *hen the bu'er is or becomes insol)ent.$
PAGE 19
TRANSPORTATION AND MARITIME LAW
Res#onsi$i%ity of carrier )hen ri&ht e(ercise'.66 2he e7tra6ordinar'
res&onsibilit' of the CC ceases *hen the goods being trans&orted are
tem&oraril' unloaded or stored in transit be reason of the e7ercise of the
right of stoppage in transitu b' the un&aid seller. 2he CC holds the goods in
the ca&acit' of an ordinar' bailee or *arehouseman u&on the theor' that the
e7ercise of the right of stoppage in transitu terminates the contract of
carriage #ordinar' diligence is re+uired$
Effect of stora&e in )areho!se of carrier.66 Under 1";!, the e7tra6
ordinar' res&onsibilit' of the CC does not cease not*ithstanding the fact
that the goods being trans&orted are stored in the *arehouse of the CC at
the &lace of destination. D7tra6ordinar' res&onsibilit' ceases onl' after the
consignee has been ad)ised of the arri)al of the goods and has had
reasonable o&&ortunit' to remo)e them or other*ise dis&ose of them.
Fiabilit' as a *arehouseman #ordinar' diligence$ arises onl'
*hen the consignee has been ad)ised of the arri)al of the goods and has
had reasonable o&&ortunit' to remo)e them or other*ise dis&ose of them
Cia @aritima )s Insurance Co. of 4orth America, 1- 3CRA -1;
<= @acleod and Co. contracted the ser)ices of Cia @aritima for the
shi&ment of bales of hem& from Ea)ao to @anila. 2he bales *ere loaded
into CCHs lighters. >ne of the lighters sun:. 2he insurance co. &aid @acleod
and filed to collect from CC. CC denied liabilit' on the grounds that the
hem& *as loaded on a barge o*ned b' the CC free of charge, that there
*as no bill of lading issued thereb' resulting to the none7istence of a
contract of carriage, that the sin:ing *as due to a fortuitous e)ent, and that
the insurance co. has no &ersonalit' to sue.
Celd= 2here *as a com&lete contract of carriage the consummation of
*hich has alread' begun *hen the shi&&er deli)ered the cargo to the carrier
and the latter too: &ossession of the same b' &lacing it on a lighter manned
b' its DDs, under *hich @acleod became entitled to the &ri)ilege secured to
him b' la* for its safe trans&ortation and deli)er', and the carrier to the full
&a'ment of its freight u&on com&letion of the )o'age. 2he barges or lighters
*ere merel' em&lo'ed as the first ste& of the )o'age, *hich is &art of the
contract.
2he recei&t of the goods b' the carrier has been said to lie at the
foundation of the contract to carr' and deli)er, and if no goods are recei)ed
there can be no such contract. 2he liabilit' and res&onsibilit' of the carrier
under a contract for the carriage of goods commence on their actual deli)er'
to, or recei&t b' the carrier or an authoriAed agent, of the goods. 2he test as
to *hether the relation of shi&&er and carrier had been established is= +ad
the control and possession of the goods been completely surrendered by
the shipper to the . %hene)er the control and &ossession of goods
&asses to the carrier and nothing remains to be done b' the shi&&er, then it
can be said *ith certaint' that the relation of shi&&er and carrier has been
established.
2he bill of lading is not indis&ensable to a contract of carriage. It
is merel' documentar' &roof of the agreement of the &arties.
2here *as no force majeure. 2he reason for the damage or the
loss *as lac: of ade+uate &rotections and measures ta:en b' the carrier to
&re)ent the loss.
Fu Eo )s Binamira, 1?1 Phil 1-?
<= Eelta Co. of 4K shi&&ed si7 cases of films and &hotogra&hic
su&&lies consigned to Binamira. 2he shi&&ed arri)ed in Cebu and
discharged her cargo, &lacing it in the &ossession and custod' of the
arrastre o&erator a&&ointed b' the Bureau of Customs. 2he cargo *as
chec:ed both b' the ste)edoring co. as *ell as b' the arrastre o&erator and
*as found in good order. In the contract of carriage, ho*e)er, it *as
sti&ulated that the carrier is no longer liable for the cargo u&on its deli)er' to
the hands of the custom authorities. 2he cargo *as deli)ered to Binamira
and some goods *ere missing.
Celd= 2he general rule is that CCHs res&onsibilit' to obser)e e7tra6ordinar'
diligence lasts from the time the goods are &laced in the &ossession of the
carrier until the' are deli)ered to the consignee. BU2 this rule a&&lies onl'
*hen the loss, destruction and deterioration of the goods ta:es &lace *hile
the goods are in the &ossession of the carrier and not after it has lost control
of them. %hile the goods are in its &ossession, it is but fair that it e7ercise
e7tra6ordinar' diligence in &rotecting them from damage and if loss occurs,
the la* &resumes that it *as due to its fault or negligence.
%hile deli)er' to the customs authorities is not deli)er' to the
consignee, the &arties ma' ho*e)er, agree to limit the liabilit' of the carrier
considering that the goods ha)e still to go through the ins&ection of the
customs authorities before the' are actuall' turned o)er to the consignee.
2his sti&ulation is not contrar' to morals or &ublic &olic'. 2his is a situation
*here the CC loses control of the goods because of custom regulations and
it is unfair that it be made res&onsible for an' loss or damage during such
interregnum.
APF )s Lle&&er, 11? Phil -0;
<= Lle&&er shi&&ed one lift )an containing &ersonal and household
effects from Ko:ohama to @anila. %hile the lift )an *as being unloaded b'
crane, it fell on the &ier damaging its contents. 2he 2C found for Lle&&er.
Celd= APF does not +uestion the finding that the damage *as due its
negligence but contends that its liabilit' cannot e7ceed N1?? based on the
bill of lading and 3ec 0#1$ of the C>G3A. Regardless of its negligence, the
carrierHs liabilit' *ould attach because being a CC, its res&onsibilit' is e7tra6
ordinar' and lasts from the time the goods are &laced in its &ossession until
the' are deli)ered, actuall' or constructi)el', to the consignee or to the
&erson *ho has a right to recei)e them.
2he carrier should onl' &a' N 1??G the shi&&er *ho acce&ted the
bill of lading is bound b' its terms. C>G3A is merel' su&&letor' to the
&ro)isions of the 4CC *hich go)ern the contract.
0. Agreement Fimiting Fiabilit'
#a$ As to diligence re+uired
Art. 11??. A sti#!%ation $et)een the coon carrier an' the
shi##er or o)ner %iitin& the %ia$i%ity of the forer for the %oss or
'estr!ction, or 'eterioration of the &oo's to a 'e&ree %ess than e(tra6
or'inary 'i%i&ence sha%% $e -a%i', #ro-i'e' it $e9
<1= In )ritin&, si&ne' $y the shi##er or o)ner@
<D= S!##orte' $y a -a%!a$%e consi'eration other than the
ser-ice ren'ere' $y the //@ an'
<;= Reasona$%e, .!st an' not contrary to #!$%ic #o%icy.
Art. 11?B. Any of the fo%%o)in& or sii%ar sti#!%ations sha%%
$e consi'ere' !nreasona$%e, !n.!st an' contrary to #!$%ic #o%icy9
<1= That the &oo's are trans#orte' at the ris2 of the o)ner or
shi##er@
<D= That the coon carrier )i%% not $e %ia$%e for any %oss,
'estr!ction or 'eterioration of the &oo's@
<;= That the coon carrier nee' not o$ser-e any 'i%i&ence
in the c!sto'y of the &oo's@
<?= That the coon carrier sha%% e(ercise a 'e&ree of
'i%i&ence %ess than that of a &oo' father of a fai%y, or of a an of
or'inary #r!'ence in the -i&i%ance o-er the o-a$%e trans#orte'@
<B= That the coon carrier sha%% not $e res#onsi$%e for the
acts or oissions of his or its e#%oyees@
<*= That the coon carrierGs %ia$i%ity for acts coitte' $y
thie-es, or of ro$$ers )ho 'o not act )ith &ra-e or irresisti$%e threat,
-io%ence or force, is 'is#ense' )ith or 'iinishe'@
<1= That the coon carrier is not res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of &oo's on acco!nt of the 'efecti-e
con'ition of the car, -ehic%e, shi#, air#%ane or other e0!i#ent !se' in
the contract of carria&e.
Art. 11B1. The fact that the coon carrier has no
co#etitor a%on& the %ine or ro!te, or a #art thereof, to )hich the
contract refers sha%% $e ta2en into consi'eration of the 0!estion of
)hether or not a sti#!%ation %iitin& the coon carrierGs %ia$i%ity is
reasona$%e, .!st an' in accor'ance )ith #!$%ic #o%icy.
#b$ As to amount liabilit'
Art. 11?5. A sti#!%ation that the coon carrierGs %ia$i%ity is
%iite' to the -a%!e of the &oo's a##earin& in the $i%% of %a'in&, !n%ess
the shi##er or o)ner 'ec%ares a &reater -a%!e, is $in'in&.
Art. 11B+. A contract fi(in& the s! that ay $e reco-ere'
$y the o)ner or shi##er for the %oss, 'estr!ction, or 'eterioration of
the &oo's is -a%i', if it is reasona$%e an' .!st !n'er the circ!stances,
an' has $een fair%y an' free%y a&ree' !#on.
Ksmael )s Barreto, 11 Phil ?
<= Plaintiff sought to reco)er from defendant the alleged )alue of 0
cases of merchandise *hich it deli)ered to a )essel of defendant at the &ort
PAGE 20
TRANSPORTATION AND MARITIME LAW
of @anila to be shi&&ed to 3urigao, but *hich *ere ne)er deli)ered to
consignee. Eefendant relied on clause " of the bill of lading *here it
&ro)ided that actions not brought *ithin /? da's from the time the cause of
action accrued shall be barred, and on clause 1- *hich &ro)ided that the
defendant is not liable for an' &ac:age in e7cess of P ;?? unless the )alue
and contents of such &ac:age are correctl' stated in the bill of lading at the
time of the shi&ment. Plaintiffs com&laint *as filed a little less than /
months after the shi&ment *as made.
Celd= 2he e)idence sho*s that 1/0 cases *ere shi&&ed )alued at P -,1??
a case. 2he limit of defendantHs liabilit' for each case for loss or damage
from an' cause or for an' reason, *ould &ut it in the &o*er of the defendant
to ta:e the *hole cargo of 1/0 cases at a )alue of P ;??Icase, or less than
1I! of its actual )alue. If that rule should be sustained, no sil: *ould e)er
be shi&&ed. 3uch limitation of )alue is unconscionable and )oid as against
&ublic &olic'.
2he )alidit' of sti&ulations limiting the carrierHs liabilit' is to be
determined b' their reasonableness and their conformit' to the sound &ublic
&olic'. It cannot la*full' sti&ulate for e7em&tion from liabilit' unless such
e7em&tion is Bust and reasonable and unless the contract is freel' and fairl'
made. 4o contractual limitation is reasonable *hich is sub)ersi)e of &ublic
&olic'. A CC cannot limit its liabilit' for inBur' or loss *here such is caused
b' its o*n negligence, uns:illfulness or carelessness of its DDs. 2he rule
rests on &ublic &olic'. 2he shi&&er and CC are not on e+ual termsG the
shi&&er is entirel' at the merc' of the CC unless &rotected b' the la*. 3uch
contracts are *anting in the element of )oluntar' assent.
2he action *as brought *ithin reasonable time considering the
distance bet*een 3urigao and @anila and the fact that &laintiff had to ma:e
a full in)estigation to determine liabilit'. 3ti&ulations limiting the time for
bringing suit must be reasonable, other*ise the' can be declared )oid.
Ceacoc: )s @acondra', 0- Phil -?1
<= Plaintiff shi&&ed Ddmonton cloc:s from 4K to @anila on board
defendantHs )essel. It *as agreed in the bill of lading that the )alue of the
goods recei&ted do not e7ceed N1?? &er freight on or in &ro&ortion for an'
&art of a ton, unless the )alue be e7&ressl' stated in the bill and freight &aid.
It *as also agreed that in the e)ent of claims for shortage or damage the
carrier shall not be liable for more than the net in)oice &rice &lus freight and
insurance less charges, and an' loss or damage for *hich the carrier ma'
be liable shall be adBusted &ro rata on said basis. 2he cloc:s *ere not
deli)ered des&ite demands. Plaintiff claimed P0-? as the @. of the cloc:s,
*hile defendant claimed P"/.;/ as the &ro&ortionate freight ton )alue.
Celd= 2hree :inds of sti&ulations ha)e often been made in a bill of lading.
<irst, one exempting the carrier from any and all liability for loss or damage
occasioned by its own negligence. 3econd, one providing for an un!ualified
limitation of such liability to an agree valuation. 2hird, one limiting the
liability of the carrier to an agreed valuation unless the shipper declares a
higher value and pays a higher rate of freight. 2he first and second
sti&ulations are in)alid as contrar' to &ublic &olic'. 2he third is )alid and
enforceable.
A stipulation in the bill of lading limiting the liability of the to a
specified amount unless the shipper declares a higher value and pays a
higher freight is valid and enforceable. If a CC gi)es to a shi&&er the choice
of - rates, the lo*er of them conditioned u&on his agreeing to a sti&ulated
)aluation of his &ro&ert' in case of loss, e)en b' the carrierHs negligence, if
the shi&&er ma:es the choice understandingl' and freel', and names his
)aluation, he cannot thereafter reco)er more than the )alue *hich he thus
&laces u&on his &ro&ert'.
3he*aram )s PAF, 1" 3CRA /?/
<= Plaintiff bought a &lane tic:et from Pamboanga to @anila. %hen
he arri)ed in @anila, his suitcase *as tam&ered *ith and his camera and
radio *ere lost. PAF contended that &laintiff *as bound b' the conditions
&rinted at the bac: of his tic:et *hich &ro)ided that the liabilit' of PAF for
an' loss is limited to the )alue of the thing unless the &assenger declares in
ad)ance a higher )aluation and &a's an additional charge, and that the
)alue is conclusi)el' deemed not to e7ceed P 1??Itic:et.
Celd = 2*o re+uisites must be fulfilled in order that the liabilit' of PAF be
limited according to the sti&ulations behind the tic:et stub = #1$ the contract
is Bust and reasonable under the circumstancesG and #-$ it has been fairl'
and freel' agreed u&on. #Art. 1"1?$
2he fact that the conditions are &rinted at the bac: of the tic:et
stub in letters so small that the' are hard to read *ould not *arrant the
&resum&tion that &laintiff *as a*are of those conditions such that he had
5fairl' and freel' agreed5 to those conditions. PAF has admitted that
&assengers do not sign the tic:et. Also the carrier cannot limit his liabilit'
for inBur' or loss of goods shi&&ed *hen such inBur' or loss *as caused b'
its o*n negligence. #Arts. 1";0, 1";1$
>ng Kiu )s CA, 1 3CRA --;
<= Att'. >ng Kiu *as a &assenger on a PAF Cebu6Butuan flight to
attend court hearings in Butuan. Cis suitcase *as accidentall' sent to
@anila. PAF6@anila sent the suitcase to Butuan but the loc: had been
o&ened and a folder containing court documents *as missing. Plaintiff
refused to acce&t the luggage. PAF6Cebu deli)ered the luggage to >ng Kiu
*ith the &romise to in)estigate the matter. Plaintiff sued and *as a*arded
moral and e7em&lar' damages. CA re)ersed holding that PAF *as guilt' of
sim&le negligence and denied moral and e7em&lar' damages but ordered
PAF to &a' P1??, the baggage liabilit' assumed b' it under the condition of
carriage &rinted on the bac: of the tic:et.
Celd= PAF incurred dela' in the deli)er' of &etitionerHs luggage. Co*e)er,
there *as no bad faith. 2he liabilit' of PAF *as limited to the sti&ulations
&rinted on the bac: of the tic:et.
&hile the passenger had not signed the plane tic'et, he is
nevertheless bound by the provision thereof; such provisions have been
held to be part of the contract of carriage and valid and binding upon the
passenger regardless of the latter)s lac' of 'nowledge or assent to the
regulation. It is *hat is :no*n as a contract of adhesion *herein one &art'
im&oses a read' made form of contract on the otherG it is not entirel'
&rohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres, he gives his consent. A contract limiting liabilit' u&on
an agree )aluation does not offend against the &olic' of the la* forbidding
one from contracting against his o*n negligence.
Considering that &etitioner had failed to declare a higher )alue for
his baggage, he cannot be &ermitted a reco)er' in e7cess of P 1??.??.
Besides, &assengers are ad)ised not to &lace )aluable items inside their
baggage. Also, there is nothing in the e)idence to sho* the actual )alue of
the goods allegedl' lost b' &etitioner.
PA4 A@ )s IAC, 1/0 3CRA -/!
<= 2his is a &etition filed b' Pan Am to limit its liabilit' for lost
baggage containing &romotional and ad)ertising materials for films to be
e7hibited in Guam and the U3, clutch bags, barong tagalogs and &ersonal
belongings of Rene Pangan to the amount s&ecified in the airline tic:et
absent a declaration of a higher )aluation and &a'ment of additional
charges.
Pan Am contends that its liabilit' for lost baggage is limited to
N/?? #N-? 7 ;? :ilos$ as the latter did not declare a higher )alue for his
baggage. 3uch sti&ulation is &rinted at the bac: of the tic:et.
Celd = Pan Am cited >ng Kiu )s CA. 3uch case is s+uarel' a&&licable in this
case. 2he ruling in 3he*aram )s PAF is ina&&licable since it *as &remised
on the fact that the conditions &rinted at the bac: of the tic:et *ere so small
and hard to read.
Fiabilit' is limited to N/?? as sti&ulated at the bac: of the tic:et.
2he 3C re)ersed the CA ruling a*arding res&ondent damages for
lost &rofits. 2he rule laid do*n in @endoAa )s PAF &ro)ides that before
damages can be a*arded for loss of &rofits on account of dela' or failure of
deli)er', it must ha)e a&&eared that CC had notice at the time of deli)er' to
him of the &articular circumstances attending the shi&ment, and *hich
&robabl' *ould lead to such s&ecial loss if he defaulted. In the absence of
a sho*ing that Pan AmHs attention *as called to the s&ecial circumstances
re+uiring &rom&t deli)er' of the luggage, it cannot be held liable for the
cancellation of res&ondentHs contracts as it could not ha)e foreseen such an
e)entualit' *hen it acce&ted the luggage for transit.
Pan Am )s Ra&adas, -? 3CRA /"
<= ,ose Ra&adas *as en route from Guam to @anila. %hile
standing in line to board the flight, he *as ordered b' Pan AmHs handcarr'
control agent to chec: in his 3amsonite attache case. Ce &rotested on the
ground that other &assengers *ere &ermitted to handcarr' bul:ier
baggages. Ce tried to chec:6in *ithout ha)ing to register his attache case.
Ce *as ho*e)er forced to register his baggage. Ce ga)e his attache case
to his brother *ho chec:ed it in for him *ithout declaring its contents or the
PAGE 21
TRANSPORTATION AND MARITIME LAW
)alue of its contents. U&on arri)ing in @anila, he *as gi)en all his chec:ed6
in baggages e7ce&t the attache case. 3ince he felt ill, he sent his son to
re+uest for the search of the missing luggage. Ce sent letters of demand to
Pan Am.
Pan Am offered to settle the claim for N1/?, re&resenting the
CCHs alleged limit of liabilit' for loss or damage to a &assengerHs &ersonal
&ro&ert'. Ra&adas filed this action for damages. Ce alleged that Pan Am
discriminated or singled him out in ordering that his luggage be chec:ed inG
that Pan Am neglected its dut' in the handling and safe:ee&ing of his
attache case from the &oint of embar:ation in Guam to his destination in
@anilaG that the )alue of the lost attache case and its contents is
N0-,0?;.?. According to him, the loss resulted in his failure to &a' certain
obligations, failure to remit mone' sent through him to relati)es, inabilit' to
enBo' the fruits of his retirement and )acation &a' and inabilit' to return to
2onga Construction Co. to com&l' *ith then e7isting contracts. Euring the
trial, he sho*ed &roof of the contents of his attache case.
Pan Am contended that the claim *as subBect to the 4otice of
Baggage Fiabilit' Fimitations attached to the tic:et. 3uch notice *as also
cons&icuousl' &osted in its offices. It alleged that its liabilit' is limited to
N1/? because Ra&adas did not declare a higher )alue and did not &a' the
corres&onding additional charges.
2he lo*er court ruled in fa)or of Ra&adas. It ho*e)er did not find
Pan Am guilt' of discriminator' acts or bad faith. CA affirmed the decision.
Issue= %>4 a &assenger is bound b' the terms of a &assenger tic:et
declaring that the limitations of liabilit' set forth in the %arsa* Con)ention
as amended b' the Cague Protocol shall a&&l' in case of loss, damage or
destruction to a registered luggage of a &assenger. KD3. Pan Am *as
ordered to &a' N0?? and P 1?,??? as attorne'Hs fees and costs of suit.
Celd= 2here is no dis&ute that there *as a notice a&&earing on &age - of
the tic:et stating that the %arsa* Con)ention go)erns in case of death or
inBur' to a &assenger or of loss, damage or destruction to a &assengerHs
luggage. 3uch notice should be sufficient notice sho*ing the a&&licabilit' of
the %arsa* limitations. 2he &assenger, u&on contracting *ith the airline and
recei)ing the &lane tic:et, *as e7&ected to be )igilant insofar as his luggage
is concerned. If the &assenger fails to adduce e)idence to o)ercome the
sti&ulations, he cannot a)oid the a&&lication of the liabilit' limitations.
2he %arsa* Con)ention, as amended, s&ecificall' &ro)ides that
it is a&&licable to international carriage *hich it defines as 5an' carriage in
*hich, according to the agreement bet*een the &arties, the &lace of
de&arture and the &lace of destination 777 are situated either *ithin the
territories of t*o Cigh Contracting Parties or *ithin the territor' of a single
Cigh Contracting Part' if there is an agreed sto&&ing &lace *ithin the
territor' of another 3tate 777.5 4o*here in the %arsa* Con)ention is such
detailed notice of baggage liabilit' limitations re+uired. It is ho*e)er a
common, safe and &ractical custom for air carriers to indicate beforehand
the &recise sums e+ui)alent to those fi7ed b' Art. --#-$ of the Con)ention.
2he facts sho* that Ra&adas actuall' refused to register his
attache case. In attem&ting to a)oid registering the luggage, he manifested
a disregard of airline rules on allo*able handcarried baggages. Prudence
dictates that cash and Be*elr' should be remo)ed from chec:ed6in luggage
and &laced in oneHs &oc:ets or handcarried. 2he alleged lac: of enough time
for him to ma:e a declaration of a higher )alue and to &a' the corres&onding
su&&lementar' charges cannot Bustif' his failure to com&l' *ith the
re+uirement that *ill e7clude the a&&lication of limited liabilit'. Cad he
readil' com&lied *ith airline regulations from the start, this situation *ould
not ha)e arisen.
%hile contracts of adhesion are not entirel' &rohibited, neither is
blind reliance on them encouraged. In the face of facts sho*ing the' should
be ignored because of their basicall' one6 sided nature, the Court does not
hesitate to rule out blind adherence to their terms. 2he 3C is not sa'ing that
&assengers are al*a's bound to the sti&ulated amounts &rinted on a tic:et,
found in a contract of adhesion, or &rinted else*here but referred to in
handouts or forms. 2he Court sim&l' recogniAes that the reasons behind
sti&ulations on liabilit' limitations arise from the difficult', if not im&ossibilit',
of establishing *ith a clear &re&onderance of e)idence the contents of a lost
suitcase. Unless the contents are declared, it *ill al*a's be the *ord of a
&assenger against that of the airline. If the loss of life or &ro&ert' is caused
b' the gross negligence or arbitrar' acts of the airline or the contents of the
lost luggage are &ro)ed b' satisfactor' e)idence other than the self6ser)ing
declarations of one &art', the Court *ill not hesitate to disregard the fine
&rint in a contract of adhesion. >ther*ise, the Court is constrained to rule
that *e ha)e to enforce the contract as it is the onl' reasonable basis to
arri)e at a Bust a*ard.
#c$ <actors affecting agreement
Art. 11?*. An a&reeent %iitin& the coon carrierGs
%ia$i%ity ay $e ann!%%e' $y the shi##er or o)ner if the // ref!se' to
carry the &oo's !n%ess the forer a&ree to s!ch sti#!%ation.
Art. 11?1. If the coon carrier, )itho!t .!st ca!se, 'e%ays
the trans#ortation of the &oo's or chan&es the sti#!%ate' or !s!a%
ro!te, the contract %iitin& the coon carrierGs %ia$i%ity cannot $e
a-ai%e' of in case of the %oss, 'estr!ction, or 'eterioration of the
&oo's.
Art. 11?3. An a&reeent %iitin& the coon carrierGs
%ia$i%ity for 'e%ay on acco!nt of stri2es or riots is -a%i'.
Art. 11B1. The fact that the coon carrier has no
co#etitor a%on& the %ine or ro!te or a #art thereof, to )hich the
contract refers sha%% $e ta2en into consi'eration on the 0!estion of
)hether or not a sti#!%ation %iitin& the coon carrierGs %ia$i%ity is
reasona$%e, .!st, an' in consonance )ith #!$%ic #o%icy.
Art. 11BD. E-en )hen there is an a&reeent %iitin& the
%ia$i%ity of the coon carrier in the -i&i%ance o-er the &oo's, the
coon carrier is 'is#!ta$%y #res!e' to ha-e $een ne&%i&ent in case
of their %oss, 'estr!ction or 'eterioration.
0 Agba'ani=
Iin's of sti#!%ation %iitin& %ia$i%ity.66 2he follo*ing sti&ulations are often
made in a bill of lading bill of lading=
1. sti&ulation e7em&ting the CC from an' and all liabilit' for loss
or damage occasioned b' its o*n negligence 6 .>IE
-. sti&ulation &ro)iding for an un+ualified limitation of such
liabilit' to an agreed sti&ulation 6 .>IE
;. sti&ulation limiting the liabilit' of the CC to an agreed )aluation
unless the shi&&er declares a higher )alue and &a's a higher rate of freight
66 .AFIE and D4<>RCDABFD
When sti#!%ation %iitin& %ia$i%ity -a%i'.66 Under 1"00, the shi&&er or
o*ner and the CC ma' sti&ulate to limit the liabilit' of the CC for the loss,
destruction or deterioration of goods to a degree less than e7tra6ordinar'
diligence =
1. the sti&ulation must be in *riting and signed b' both &artiesG
-. the sti&ulation must be su&&orted b' )aluable consideration
other than the ser)ice rendered b' the CCG
;. the sti&ulation must be reasonable, Bust and not contrar' to
&ublic &olic'. 2his a&&lies onl' *hen the CC is acting as such but not *hen
it acts as a &ri)ate carrier 8in Come Insurance )s American 3teamshi& Co.,
the 3C held that the Ci)il Code &ro)isions on CC should not be a&&lied
*here the CC is not acting as such but as a &ri)ate carrierG such &olic' has
no force *here the &ublic at large is not in)ol)ed9
2he &arties ma' sti&ulate that the diligence to be e7ercised b'
the CC be less than e7tra6ordinar' diligence, &ro)ided that the re+uirements
under Article 1"00 are com&lied *ith. Co*e)er, the &arties cannot reduce
the diligence to less than that of a good father of a famil'. Art. 1"01
&ro)ides for " sti&ulations *hich shall be considered unreasonable, unBust
and contrar' to &ublic &olic'.
/onstr!ction of sti#!%ations %iitin& coon carrierGs %ia$i%ity.66 An
e7em&tion in general *ords not e7&ressl' relating to negligence, e)en
though the *ords are *ide enough to include loss b' negligence or default
of CCHs ser)ants, must be construed as limiting the liabilit' of the CC as
assurer, and not as relie)ing him from the dut' of e7ercising reasonable s:ill
and care
Effect of %ac2 of co#etitor to coon carrier.66 Under 1"11, the lac: of
com&etition of the CC shall be considered in determining %>4 a sti&ulation
limiting CCHs liabilit' is reasonable, Bust and in consonance *ith &ublic
&olic'.
E(a#%es of -a%i' sti#!%ations9
1. 1"0! 6 an agreement limiting the CCHs liabilit' for dela' on
account of stri:es or riots
-. 1"0, Ceacoc: )s @acondra' 6 a sti&ulation that the CCHs
liabilit' is limited to the )alue of the goods a&&earing in bill of lading unless
the shi&&er or o*ner declares a greater )alue
;. 1"1? 6 a contract fi7ing the sum that ma' be reco)ered b' the
o*ner or shi&&er for the loss, destruction or deterioration of the goods, if it is
reasonable and Bust under the circumstances, and has been fairl' and freel'
agreed u&on
PAGE 22
TRANSPORTATION AND MARITIME LAW
Under 1"0/, an agreement limiting the CCHs liabilit' ma' be annulled b' the
shi&&er or o*ner if the CC refused to carr' the goods unless the former
agreed to such sti&ulation. 2he effect of the shi&&erHs consent obtained b'
means of refusal on the &art of the carrier to carr' the goods is to ma:e the
agreement limiting the CCHs liabilit' )oidable at the instance of the shi&&er
Princi&les = 83t. Paul Insurance )s @acondra', "? 3CRA 1--9
1. A sti&ulation in the bill of lading limiting the CCHs liabilit' to the
)alue of the goods a&&earing in the bill, unless the shi&&er or o*ner
declares a greater )alue, is )alid and binding.
-. 2he insurer *ho &a's the insured on his claim for damage is
merel' subrogated to the rights of the insuredG therefore, said insurer cannot
collect from the CC more than *hat the insured can collect from the CC.
;. 2he obligation to &a' the damage begins from the date it fails
to deli)er the shi&ment in good condition to the consignee #on the basis of
the rate of e7change on that date$.
Effect of 'e%ay in trans#ortation, etc.66 Under 1"0", the CC cannot a)ail
of the contract limiting his liabilit' in these cases = #1$ *here the CC dela's
the trans&ortation of the goodsG #-$ *here the CC changes the sti&ulated or
usual route 8in both cases, the dela' or change of route must be *ithout Bust
cause9
Pres!#tion as to ne&%i&ence in case of %iite' %ia$i%ity.66 Under 1"1-,
the &resum&tion continues e)en *hen there is an agreement limiting the
liabilit' of the CC in the )igilance of the goods. 2his &resum&tion is
dis&utable or rebuttable b' e)idence that the CC e7ercised e7tra6ordinar'
diligence.
1. A&&licable Fa* in foreign trade
Art. 11B;. The %a) of the co!ntry to )hich the &oo's are to
$e trans#orte' sha%% &o-ern the %ia$i%ity of the coon carrier for their
%oss, 'estr!ction or 'eterioration.
0 Agba'ani=
2he Ci)il Code go)erns the liabilit' of the CC in case of loss,
damage or deterioration. Under 1"//, in all matters not regulated b' the
Ci)il Code, the rights and obligations of CC shall be go)erned b' the Code
of Commerce and b' s&ecial la*s *hich are su&&letor' to the &ro)isions of
the Ci)il Code.
/. Rules on Passenger Baggage
Art. 11B?. The #ro-isions of Arts.11;; to 11B; sha%% a##%y to
the #assen&erGs $a&&a&e )hich is not in his #ersona% c!sto'y or in
that of his e#%oyees. As to other $a&&a&e, the r!%es in Artic%es 1553
an' D+++ to D++; concernin& the res#onsi$i%ity of hote% 2ee#ers sha%%
$e a##%ica$%e.
Art. 1553. The 'e#osit of effects a'e $y tra-e%ers in hote%s
an' inns sha%% a%so $e re&ar'e' as necessary. The 2ee#ers of hote%s
an' inns sha%% $e res#onsi$%e for the as 'e#ositaries, #ro-i'e' that
notice )as &i-en to the, or to their e#%oyees, of the effects $ro!&ht
$y the &!ests an' that, on the #art of the %atter, they ta2e the
#reca!tions )hich sai' hote%62ee#ers or their s!$stit!tes a'-ise'
re%ati-e to the care an' -i&i%ance of their effects.
Art. D+++. The res#onsi$i%ity referre' to in the #rece'in&
artic%e sha%% inc%!'e the %oss of, or in.!ry to the #ersona% #ro#erty of
the &!ests ca!se' $y the ser-ants or e#%oyees of the 2ee#ers of
hote%s or inns as )e%% as $y stran&ers@ $!t not that )hich ay #rocee'
fro any force majeure. The fact that tra-e%ers are constraine' to re%y
on the -i&i%ance of the 2ee#er of the hote% or inn sha%% $e consi'ere' in
'eterinin& the 'e&ree of care re0!ire' of hi.
Art. D++1. The act of a thief or ro$$er, )ho has entere' the
hote% is not 'eee' force majeure, !n%ess it is 'one )ith the !se of
ars or thro!&h irresisti$%e force.
Art. D++D. The hote%2ee#er is not %ia$%e for co#ensation if
the %oss is '!e to the acts of the &!est, his fai%y, ser-ants or -isitors,
or if the %oss arises fro the character of the thin&s $ro!&ht into the
hote%.
Art. D++;. The hote%2ee#er cannot free hise%f fro
res#onsi$i%ity $y #ostin& notices to the effect that he is not %ia$%e for
the artic%es $ro!&ht $y the &!est. Any sti#!%ation $et)een the
hote%2ee#er an' the &!est )here the res#onsi$i%ity of the forer as set
forth in Arts. 1553 to D++1 is s!##resse' or 'iinishe' sha%% $e -oi'.
/%asses of $a&&a&e of #assen&ers.66 2he la* ma:es a distinction
bet*een #1$ baggage in the custod' of the &assengers or their DDsG and #-$
baggage not in such custod' but in that of the CC.
Lia$i%ity for $a&&a&e in c!sto'y of #assen&er.66 Art. 1"10 refers to Arts.
1!, -???6 -??; concerning the res&onsibilit' of hotel :ee&ers. Under
1!, the baggage of &assengers in their &ersonal custod' or in that of their
DDs *hile being trans&orted shall be regarded as necessar' de&osits. 2he
CC shall be res&onsible for such baggage as de&ositaries, &ro)ided that #1$
notice *as gi)en to them or to their DDs, of the baggage brought b' their
&assengers, and that #-$ the &assengers ta:e the &recautions *hich said
CCs ad)ised relati)e to the care and )igilance of their baggage.
Res#onsi$i%ity for acts of EEs, thie-es.66 Under -???, a CC is
res&onsible as a de&ositar' for the loss of or inBur' to the baggage in the
&ersonal custod' of &assengers, caused b' the CCHs ser)ants or DDs but
not those caused b' force majeure.
Under -??1, the act of a thief or robber, *ho has entered the
CCHs )ehicle is not deemed force majeure, unless it is done *ith the use of
arms or through irresistible force.
Under -??-, the CC is not liable if the loss of the baggage in the
&ersonal custod' of the &assenger is due to the acts of the &assengers, his
famil', ser)ants or )isitors, >R if the loss arises from the character of the
baggage.
Sti#!%ations %iitin& %ia$i%ity.66 Under -??;, a CC cannot free
himself from res&onsibilit' b' &osting notices to the effect that he is not
liable for the baggage brought b' the &assengers. An' sti&ulation
diminishing the res&onsibilit' re+uired under 1! to -??1 shall be )oid.
Lia$i%ity for $a&&a&e not in c!sto'y of #assen&er.66 2his refers to
baggage deli)ered to the custod' of the CC and recei)ed b' him, to be
carried in the same manner as other goods being trans&orted b' him. As
the CC has custod' of such baggage and are carried li:e an' other goods,
the &ro)isions on carriage of goods shall a&&l' #e7tra6ordinar' diligence in
the )igilance o)er the goods$.
2he moment the effects of a &assenger are unconditionall'
&laced in the &ossession of and recei)ed b' a carrier for con)e'ance, the
la* immediatel' im&oses on the CC e7tra6ordinar' res&onsibilit' for the loss
thereof *hich lasts until the actual or constructi)e deli)er' of the effects to
the &assenger as the &erson *ho has the right to recei)e them #&resum&tion
of negligence e7ists but ma' be rebutted b' &roof of e7ercise of
e7traordinar' diligence or causes under 1";0$.
A CC is liable for the loss of baggage although not declared and
the charges not &aid, if it acce&ted them for trans&ortation

/. /oon /arrier of Passen&ers
1. 4ature and e7tent of res&onsibilit'
Art. 11;;. /oon carriers, fro the nat!re of their
$!siness an' for reasons of #!$%ic #o%icy, are $o!n' to o$ser-e
e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's an' for the
safety of the #assen&ers trans#orte' $y the, accor'in& to the
circ!stances of each case.
S!ch e(traor'inary 'i%i&ence in the -i&i%ance o-er the &oo's
is f!rther e(#resse' in Artic%es 11;?, 11;B, an' 11?B, Nos. B, *, an' 1,
)hi%e the e(traor'inary 'i%i&ence for the safety of the #assen&ers is
f!rther set forth in Artic%es 11BB an' 11B*.
Art. 11BB. A coon carrier is $o!n' to carry the
#assen&ers safe%y as far as h!an care an' foresi&ht can #ro-i'e,
!sin& the !tost 'i%i&ence of -ery ca!tio!s #ersons, )ith a '!e re&ar'
for a%% circ!stances.
0 Agba'ani=
/oon carriers !st e(ercise e(traor'inary 'i%i&ence in carryin&
#assen&ers.66 Art. 1"11 sho*s clearl' the high degree of care and e7tra6o
diligence re+uired of a CC *ith res&ect to its &assengers.
/arrierGs '!ty of e(traor'inary 'i%i&ence e(ten's a%so to cre)
e$ers.66 2he dut' to e7ercise the utmost diligence on the &art of CCs is
PAGE 23
TRANSPORTATION AND MARITIME LAW
for the safet' of &assengers as *ell as for the members of the cre* or the
com&lement o&erating the carrier. 2his must be so for an' omission, la&se
or neglect thereof *ill certainl' result to the damage, &reBudice, inBuries or
e)en death to all aboard the &lane.
Cangco )s @RR, ;! Phil "/!
<acts= su&ra. DD riding on train *ho ste&&ed on *atermelons.
Celd= 2he conduct of &laintiff in underta:ing to alight *hile the train *as 'et
slightl' under*a' *as not characteriAed b' im&rudence and that he *as not
guilt' of contributor' negligence.
It is not negligence &er se for a tra)eler to alight from a slo*l' mo)ing train.
@RR failed to e7ercise due care in not &ro)iding for safe e7it of
its &assengers. It also failed to &ro)ide ade+uate lighting for its station.
It is im&t. to note that the foundation of the legal liabilit' of the
defendant is the contract of carriage, and that the obligation to res&ond for
the damage *hich &laintiff has suffered arises, if at all, from the breach of
that contract b' reason of the failure of defendant to e7ercise due care in its
&erformance. Its liabilit' is direct and immediate #culpa contractual$,
differing essentiall', from that &resum&ti)e res&onsibilit' for the negligence
of its ser)ants, *hich can be rebutted b' &roof of the e7ercise of due care in
the selection and su&er)ision of DDs #culpa a!uiliana$.
2he liabilit' of masters and em&lo'ers for the negligent acts or
omissions of their ser)ants or agents, *hen such act or omissions cause
damage *hich amount to the breach of a contract, is not based u&on a mere
&resum&tion of the masterHs negligence in their selection or control, and
&roof of e7ercise of the utmost diligence and care in this regard does not
relie)e the master of his liabilit' for the breach of his contract. %hen the
facts a)erred sho* a contractual underta:ing b' defendant for the benefit of
&laintiff, and it is alleged that &laintiff has failed or refused to &erform the
contract, it is not necessar' for &laintiff to s&ecif' in his &leadings *hether
the breach of the contract is due to *illful fault or to negligence on the &art
of the defendant, or of his ser)ants or agents. Proof of the contract and of
its non&erformance is sufficient prima facie to *arrant reco)er'.
2he contract of defendant to trans&ort &laintiff carried *ith it, b'
im&lication, the dut' to carr' him in safet' and to &ro)ide safe means of
entering and lea)ing its trains. 2hat dut', being contractual, *as direct and
immediate, and its non&erformance could not be e7cused b' &roof that the
fault *as morall' im&utable to defendantHs ser)ants.
3trong )s Iloilo64egros Air D7&ress, 0? >G -/
<= Plaintiff *as a &assenger aboard defendantHs &lane en route from
Iloilo to @anila. 2he &laneHs motors *ent dead and, not*ithstanding the
efforts of its &ilot, it &lunged into the sea and san:. 2he &assengers and the
&ilot *ere rescued.
Celd = In a)iation, inevitable accident is defined as one that is not
occasioned in any degree remotely or directly by want of such s'ill or care
as the law holds for what man is bound to exercise. Air&lane com&anies are
not re+uired to e7ercise all the care. Passengers necessaril' should ta:e
u&on the usual and ordinar' &erils to air&lane tra)el. A carrier is not an
insurer against all ris's.
A carrier is not liable for defects of ignition cables used on his
&lane, nor of the installation thereof, *hich cables *ere &urchased from a
com&etent and re&utable manufacturer in the absence of a sho*ing that it
:ne* those defects or that such :ind of ignition cable is not ordinaril' used
on the air&lane o&erated b' it.
2he doctrine of res ipsa lo!uitor cannot be a&&lied *hen there is
no &roof that according to the general e7&erience of man:ind, the accident
*as such that it does not usuall' occur in the ordinar' course of e)ents
*ithout the negligence on the &art of those in control.
Isaac )s A.F. Ammen 2rans. Co., 1?1 Phil 1?0/
<= su&ra. Passenger aboard a bus *ho &laced his left arm on the
*indo* lost his arm *hen the bus collided *ith a &ic: u&.
Celd = If the carrierHs DD is confronted *ith a sudden emergenc', he is not
held to the same degree of care he *ould other*ise be re+uired in the
absence of such emergenc'.
B' &lacing his left arm on the *indo*, the &assenger is guilt' of
contributor' negligence, and although contributor' negligence cannot relie)e
the carrier but can onl' reduce his liabilit' #Art. 1"/-$, this is a circumstance
*hich militates against &laintiffHs &osition. It is negligence &er se for
&assengers to &rotrude an' &art of his bod' and that no reco)er' can be
had for an inBur'.
Ratio= A CC is bound to carr' the &assengers safel' as far as human care
and foresight can &ro)ide, using the utmost diligence of )er' cautious
&ersons, *ith due regard for all circumstances. 2his e7traordinar' diligence
re+uired of common carriers is calculated to &rotect the &assengers from
the tragic misha&s that fre+uentl' occur in connection *ith ra&id modern
trans&ortation. 2his high standard of care is im&erati)el' demanded b' the
&reciousness of human life and b' the consideration that e)er' &erson must
in e)er' *a' be safeguarded against all inBur'.
Princi&les as to liabilit' of CC=
#1$ 2he liabilit' of a carrier is contractual and arises u&on breach
of its obligationG there is breach if it fails to e7ert e7traordinar' diligence
accdg. to all the circumstances of each case
#-$ A carrier is obliged to carr' its &assenger *ith the utmost
diligence of a )er' cautious &erson, ha)ing due regard for all the
circumstances
#;$ A carrier is &resumed to ha)e been at fault or to ha)e acted
negligentl' in case of death of, or inBur' to, &assengers, it being its dut' to
&ro)e that it e7ercised e7traordinar' diligence
#0$ 2he carrier is not an insurer against all ris:s of tra)el
Fandingin )s Pantranco, ;; 3CRA -!0
<= Plaintiffs are &arents of - girls *ho *ere &assengers on a
Pantranco bus on an e7cursion tri& from Eagu&an to Baguio. 2he bus *as
o&en on one side. 2he 2C found that the crossBoint of the bus bro:e and the
bus started to roll bac:. 3ome &assengers Bum&ed out. 2he bus dri)er
maneu)ered the bus safel' to the mountainside. 2*o of the girls *ho
Bum&ed *ere seriousl' inBured and died.
Celd = In Fasam )s 3mith, the court held that accidents caused by defects
in the automobile are not caso fortuito. The rationale is that the passenger
has neither the choice nor control over the carrier in the selection and use
of the e!uipment and appliances in use by the carrier.
%hen the &assenger dies or is inBured, the &resum&tion is that
the CC is at fault or acted negligentl'. 2his is onl' rebutted b' &roof on the
carrierHs &art that it obser)ed e7traordinar' diligence re+uired in Art. 1";;
and the utmost diligence of )er' cautious &ersons re+uired in Art. 1"11.
It does not a&&ear that the carrier ga)e due regard for all the
circumstances *ith cross BointsH ins&ection the da' &re)ious to the accident.
2he bus *as hea)il' laden, and it *ould be tra)ersing mountainous,
circuitous and ascending road. 2hus the entire bus *ould naturall' be ta7ed
more hea)il' than it *ould be under the ordinar' circumstances. 2he mere
fact that the bus *as ins&ected onl' recentl' and found to be in order *ould
not e7em&t carrier from liabilit' unless it is sho*n that the &articular
circumstances under *hich the bus *ould tra)el *ere also considered.
Fandicho )s B2C, 1- >G "/0
<= Fandicho boarded a B2C bus. Before he did so, the conductor
hel&ed him in &lacing his t*o bas:ets of chic:en inside the running board.
After a distance, he claimed that he noticed one cage falling and he called
the conductorHs attention *ho did not res&ond. Ce tried to fi7 it himself
resulting in his fall in *hich he suffered inBuries.
Celd = 2he facts sho* that the cage *as not about to fall. Plaintiff *as
&robabl' diAA' or slee&' that he fell from the truc:.
It is true that defendant being a CC is bound to trans&ort its
&assengers from the &oint of origin to the &lace of destination, but the dut'
does not encom&ass all the ris:s attendant to a &assenger in transit, for
then the co. *ould be a good source of sti&end for a famil' *ho *ould li:e
to end it all b' sim&l' boarding, &a'ing the fare and intentionall' falling off.
It is enough for the CCHs DDs to see to it that the &assenger &laces himself
safel' inside the )ehicle, that it is o&erated carefull' and that its mechanism
is &erfectl' alright to &re)ent misha&s. It *ould be unreasonable to e7act
u&on o&erators to determine beforehand *hether a &assenger is li:el' to fall
diAA' or slee&' on the *a', for that is the loo:out of the &assenger himself.
A &assenger must see to it that he seats himself in a safe &ortion of the
)ehicle.
4ecesito )s Paras, 1?1 Phil "1
<= A mother and son boarded a &assenger autotruc: of the Phil.
Rabbit Bus Fines. %hile entering a *ooden bridge, its front *heels s*er)ed
to the right, the dri)er lost control and the truc: fell into a cree:. 2he mother
dro*nedG the son *as inBured.
Celd = %hile the carrier is not an insurer of the safet' of the &assengers, it
should ne)ertheless be held ans*erable for the fla*s of its e+ui&ment if
such fla*s *ere disco)erable. 2he liabilit' of the CC rests u&on negligence
PAGE 24
TRANSPORTATION AND MARITIME LAW
or his failure to e7ercise the utmost degree of diligence that the la*
re+uires. The rationale of )s liability for manufacturing defects is the fact
that the passenger has neither choice nor control over the carrier in the
selection and use of the e!pt. and appliances in use by the carrier. Ca)ing
no &ri)it' *hate)er *ith the manufacturer or )endor of the defecti)e e+&t,
the &assenger has no remed' against him. In this case, the defect could
ha)e been detected *ith the e7ercise of utmost diligence b' the CC.
-. Euration of res&onsibilit'
0 Agba'ani=
When re%ationshi# of carrier an' #assen&er terinates.66 2he relation of
CC and &assenger does not cease at the moment that the &assenger alights
from the CCHs )ehicle at a &lace selected b' the CC at the &oint of
destination, but continues until the &assenger had reasonable time or a
reasonable o&&ortunit' to lea)e the CCHs &remises. %hat is a reasonable
time or a reasonable dela' *ithin this rule is to be determined from all the
circumstances
Fa @allorca )s CA, 1" 3CRA ";
<= Cusband and *ife together *ith minor children boarded a Fa
@allorca bus. 2he' alighted from the bus. 2he father returned to the bus to
get their baggage. Ce *as follo*ed b' his daughter. %hile the father *as
still on the running board a*aiting for the conductor to gi)e his baggage, the
bus stated to run so that the father had to Bum&. Cis daughter *as run o)er
and *as :illed. 2he bus co. contended that *hen she *as :illed, she *as
no longer a &assenger and the contract of carriage had terminated.
Celd= %hether or not the relation bet*een carrier and &assenger does not
cease at the moment the &assenger alights from the carrierHs &remises is to
be determined from the circumstances.
In this case, there *as no utmost diligence. 2he dri)er sto&&ed
the bus but did not turn off the engine. Ce started to run the bus e)en
before the conductor ga)e him the signal. 2he &resence of &assengers near
the bus *as not unreasonable and the duration of the res&onsibilit' still
e7ists.
Bataclan )s @edina, 1?- Phil 1!1
<= 2he bus of @edina 2rans left Ca)ite for Pasa' *ith 1!
&assengers. Around da*n, the front tires burst and the )ehicles began to
AigAag until it fell into a canal and turned turtle. 3ome &assengers *ere
able to get out *hile four *ere tra&&ed including Bataclan. Fater, 1? men
came to hel&, one of them carr'ing a lighted torch, fueled b' &etroleum. A
fire started, burning the bus and the 0 &assengers. Gas had lea:ed *hen
the bus o)erturned.
Celd= 2he &ro7imate cause of the death *as the o)erturning of the )ehicle
*hich *as follo*ed b' the negligence of the dri)er and the conductor *ho
*ere on the road *al:ing bac: and forth. 2he' should ha)e :no*n that *ith
the &osition of the bus, lea:age *as &ossible aside from the fact that gas
*hen s&illed can be smelled from a distance. 2he failure of the dri)er and
conductor to ha)e cautioned or ta:en ste&s to *arn rescuers not to bring a
lighted torch too near the bus constitutes negligence on the &art of the
agents of the carrier.
AboitiA )s CA 1" 3CRA 1
<= A farmer boarded a boat o*ned b' AboitiA at @indoro bound for
@anila. %hen the )essel arri)ed, Pioneer 3te)edoring too: o)er control of
the cargoes loaded at the )essel and &laced its crane alongside the )essel.
>ne hour after he disembar:ed, he *ent bac: to get his cargo but the crane
hit him and he died.
Celd= AboitiA is still liable for his death under the contract of carriage. 2he
relation of carrier and &assenger continues until the &assenger has been
landed at the &ort of destination and has left the )essel o*nerHs doc:. ,nce
created the relationship will not ordinarily terminate until the passenger has
safely alighted from the carrier)s conveyance or had reasonable opportunity
to leave the carrier)s premises. All &ersons *ho remain on the &remises a
reasonable time after lea)ing the con)e'ance are to be deemed &assengers
and *hat is reasonable time is to be determined from all circumstances and
includes a reasonable time to see after his baggage and &re&are for his
de&arture. 2he CC6&assenger relationshi& is not terminated merel' b' the
fact that the &erson trans&orted has been carried to his destination if the
&erson remains in the &remises to claim his baggage.
The test is the existence of a reasonable cause as will justify the
presence of the passenger near the vessel.
A CC is bound to carr' its &assengers as far as human care and
foresight can &ro)ide, using the utmost diligence of a )er' cautious &erson
*ith due regard for all circumstances.
PAF )s CA, G.R. !-/1, 3e&t. 1;
<= Pedro Pa&atos *as among -1 &assengers on a PAF flight from
Cebu to >Aamis. 2he flight *as Cebu6>Aamis6Cotabato. <ifteen minutes
before landing in >Aamis, the &ilot recei)ed a message that the air&ort *as
closed due to hea)' rains and inclement *eather and that he should
&roceed to Cotabato Cit'. In Cotabato, PAF informed the &assengers of
their o&tions and that due to limited number of seats in the other flights, the
basis for &riorit' *ould be the chec:6in se+uence at Cebu. Pa&atos chose to
return to Cebu but *as not accommodated because he chec:ed in as
&assenger no. . Co*e)er, his &ersonal belongings including a camera
from ,a&an *ere still on board the flight to @anila. Ce tried to sto& the
de&arture but his &lea fell on deaf ears. Ce *as gi)en a free tic:et to Iligan
Cit' *hich he recei)ed under &rotest. Ce *as left at the air&ort. PAF neither
&ro)ided him *ith trans&ortation from the air&ort to the cit' &ro&er nor food
and accommodation for his sta' in Cotabato Cit'. 2he ne7t da', he
&urchased a tic:et to Iligan Cit'. Ce informed PAF that he *ould not use the
free tic:et because he *as filing a case against PAF. Cis &ersonal
belongings *ere ne)er reco)ered.
PAF denied that it unBustifiabl' refused to accommodate Pa&atos.
It alleged that there *as sim&l' no more seat for him on <light 1/? to
@anilaG and that there *as force majeure *hich *as a )alid Bustification for
the &ilot to b'&ass >Aamis Cit' and &roceed directl' to Cotabato Cit'. PAF
contended that it did not unBustifiabl' den' his demand for &riorit' o)er
confirmed &assengers *hich the' could not satisf' in )ie* of the limited
seats. PAF also asserted that it should not be charged *ith the tas: of
loo:ing after the &assengersH comfort and con)enience because the
di)ersion of the flight *as due to a fortuitous e)ent, and that if made liable,
an added burden is gi)en to PAF *hich is o)er and be'ond its duties under
the contract of carriage. It argued that granting there *as negligence, PAF
cannot be liable in damages in the absence of fraud or bad faith.
2he R2C held in fa)or of &laintiff. 2he CA affirmed.
Celd= 2he &assengerHs com&laint touched on PAFHs indifference and
inattention to his &redicament and not on PAFHs refusal to com&l' *ith his
demand for &riorit' o)er the other &assengers. Ce claimed that he *as
e7&osed to the &eril of @uslim rebels and that he suffered mental anguish,
mental torture, social humiliation, besmirched re&utation and *ounded
feeling. Ce referred to PAFHs a&ath'.
2he contract of air carriage is a &eculiar one. Being imbued *ith
&ublic interest, the la* re+uires common carriers to carr' the &assengers
safel' as far as human care and foresight can &ro)ide, using the utmost
diligence of )er' cautious &ersons, *ith due regard for all the
circumstances. In Air <rance )s Carrascoso, the 3C held that the contract
to trans&ort &assengers is +uite different from an' contractual relation in that
it in)ites &eo&le to a)ail of the comforts and ad)antages it offers. 2he
di)ersion of the flight *as due to a fortuitous e)ent. Co*e)er, such did not
terminate PAFHs contract *ith its &assengers. Being in the business of air
carriage, PAF is deemed e+ui&&ed to deal *ith situations li:e the case at
bar. 2he relation of carrier and &assenger continues until the latter has been
landed at the &ort of destination and has left the CCHs &remises. Cence,
PAF necessaril' *ould still ha)e to e7ercise e7traordinar' diligence in
safeguarding the comfort, con)enience and safet' of the stranded
&assengers until the' ha)e reached their final destination. PAF *as
therefore remiss in its dut' of e7tending utmost care to Pa&atos *hile being
stranded in Cotabato Cit'.
2he CA held = 5%hile the failure of Pa&atos to reach his
destination 777 in accordance *ith the contract of carriage *as due to the
closure of the air&ort on account of rain and inclement *eather 777 it
becomes the dut' of PAF to &ro)ide all means of comfort and con)enience
to its &assengers *hen the' *ould ha)e to be left in a strange &lace in case
of such b'6&assing. If the cause of non6fulfillment of the contract is due to a
fortuitous e)ent, it has to be the sole and onl' cause. 3ince &art of the
failure to com&l' *ith the obligation to deli)er its &assengers safel' to their
destination la' in PAFHs failure to &ro)ide comfort and con)enience to its
stranded &assengers using e7traordinar' diligence, the cause of non6
fulfillment is not solel' and e7clusi)el' due to fortuitous e)ent, but due to
something that PAF could ha)e &re)ented, PAF becomes liable to the
&assenger.5 Co*e)er the 3C found that although PAF *as remiss in its dut'
of e7tending utmost care to Pa&atos *hile being stranded in Cotabato Cit',
PAGE 25
TRANSPORTATION AND MARITIME LAW
there *as no sufficient basis to conclude that PAF failed to inform him about
his other o&tions.
;. Presum&tion of negligence
Art. 11B*. In case of 'eath of or in.!ries to #assen&ers,
coon carriers are #res!e' to ha-e $een at fa!%t or to ha-e acte'
ne&%i&ent%y, !n%ess they #ro-e that they o$ser-e' e(traor'inary
'i%i&ence as #rescri$e' in artic%es 11;; an' 11BB.
0 Agba'ani=
Pres!#tion of ne&%i&ence.66 CCs are &resumed to ha)e been at fault or
to ha)e acted negligentl' in case of death or inBuries to &assengers. 2his
dis&utable &resum&tion ma' onl' be o)ercome b' su&erior e)idence that he
had obser)ed e7traordinar' diligence &rescribed in 1";;, 1"11, 1"1/
%here death or inBur' results to the &assenger because of the
negligence of the CCHs Ds, the CC is liable, not*ithstanding the fact that he
had e7ercised all the diligence of a good father of a famil', in the selection
and su&er)ision of his DDs
777
Conse+uentl', in an action for damages, the issue is not %>4
the &art' see:ing damages has adduced sufficient e)idence to sho* the
negligence of the CC but %>4 the carrier has &resented the re+uired
+uantum of &roof to o)ercome the &resum&tion that it has been at fault or
that it acted negligentl' in the &erformance of its dut'.
In the e7ercise of e7traordinar' diligence, the CC must gi)e due
regard for all circumstances in connection *ith the trans&ort of &assengers
Eo) #res!#tion of ne&%i&ence o-ercoe.66 2o o)ercome such
&resum&tion, it must be sho*n that the CC had obser)ed the re+uired
e7traordinar' diligence or that the accident *as caused b' fortuituos e)ent.
In order to constitute caso fortuito that *ould e7em&t a &erson from
res&onsibilit', it is necessar' that =
1. 2he e)ent must be inde&endent of human *illG
-. 2he occurrence must render it im&ossible for the obligor to
fulfill his obligation in a normal mannerG
;. 2he obligor must be free of a concurrent or contributor' fault
or negligence. 8Dstrada )s Consolacion, "1 3CRA 1-;9
/arrier not #rec%!'e' fro #ro-in& ne&%i&ence of other carrier
in-o%-e' in co%%ision.66 %hile the &laintiff6&assenger does not need to
&ro)e the negligence of the CC, he ma' not &reclude the CC from &ro)ing
the legal defense of negligence of the other )ehicle in)ol)ed in the collision
#the CC ma' file a third6&art' com&laint against the other )ehicle for
reimbursement$
>Last c%ear chance> r!%e not a##%ica$%e to contracts of carria&e.66 2he
&rinci&le of last clear chance a&&lies onl' in a suit bet*een the o*ners and
dri)ers of t*o colliding )ehiclesG it does not a&&l' *here a &assenger
demands res&onsibilit' from the CC to enforce its contractual obligationG it
*ould be ini+uitous to e7em&t the dri)er and his DR on the ground that the
other dri)er *as also negligent
/o!rt nee' not a2e e(#ress fin'in& of carrierGs fa!%t or ne&%i&ence.66
2he court need not ma:e an e7&ress finding of fault or negligence on the
&art of the CC in order to hold it res&onsible to &a' the damages sought b'
the &assenger. B' the contract of carriage, the CC assumes the e7&ress
obligation to obser)e e7traordinar' diligence in trans&orting the &assenger
2his is an e7ce&tion to general rule that negligence must be &ro)ed.
/arriers not or'inari%y %ia$%e for in.!ries to #assen&ers '!e to fires or
e(#%osions ca!se' $y artic%es $ro!&ht into con-eyance $y other
#assen&ers.66 CC is not ordinaril' liable for inBuries to &assengers due to
fires or e7&losions caused b' articles brought into con)e'ance b' other
&assengers. <airness demands that in measuring the CCHs dut' to*ards its
&assengers, allo*ance should be gi)en to the reliance that should be
re&osed on the sense of res&onsibilit' of all the &assengers in regard to
their common safet' #that the &assenger *ill not ta:e *ith him an'thing
dangerous to his co6&assengers.$ <or the carrier to be liable, he must be
a*are, through his DDs of the nature of the article or must ha)e had some
reason to antici&ate danger therefrom #circumstances must sho* that there
are causes for a&&rehension that the &assengerHs baggage is dangerous
and that the CC fails to act in the fact of such e)idence$ 84ocum )s Faguna
Bus Co., 1/9
0. <orce @aBeure
Bachelor D7&ress )s CA 1!! 3CRA -1"
<= Bus 4o. !?? o*ned b' Bachelor D7&ress and dri)en b'
Cresencio Ri)era *as the situs of a stam&ede *hich resulted in the death of
&assengers Beter and Rautrat. 2he bus came from Ea)ao Cit' on its *a'
to Caga'an de >ro &assing Butuan Cit'. %hile in 2abon62abon, Butuan, the
bus &ic:ed u& a &assenger. A &assenger suddenl' stabbed a PC soldier
*hich caused commotion and &anic among the &assengers. 2*o
&assengers Bum&ed out #finding of the 2C *hich *as re)ersed b' the CA$ of
the bus and *ere found dead as a result of head inBuries. 2he &assenger6
assailant ran a*a' from the bus but *as :illed b' the &olice. 2he &arents of
the dead &assengers filed a com&laint for a sum of mone' against the CC,
the o*ner and the dri)er.
2he CC denied liabilit' and alleged that the dri)er *as able to
trans&ort his &assengers safel' to their res&ecti)e &laces of destination
e7ce&t for the t*o &assengers *ho Bum&ed off the bus *ithout the
:no*ledge and consent, much less, the fault of the dri)erG that the CC
e7ercised due diligence in the choice of its DDs to a)oid as much as
&ossible accidentsG that the incident *as not a traffic or )ehicular accident
but *as an incident )er' much be'ond the control of the CCG that the CC
*as not a &art' to the incident as it *as an act of a third &art' *ho is not in
an' *a' connected *ith the CC and of *hich the' ha)e no control and
su&er)ision. 2he CC argued that the incidentHs &ro7imate cause *as the act
of the &assenger *ho ran amuc: and *hich triggered off the commotion and
&anic.
2he 2C dismissed the com&laint. 2he CA re)ersed and ordered
the CC, the o*ner and dri)er solidaril' liable to the heirs of the deceased.
Celd = 2he CC is liable for the death of the &assengers.
Bachelor D7&ress as a CC is bound to carr' its &assengers
safel' as far as human care and foresight can &ro)ide using the utmost
diligence of )er' cautious &erson, *ith due regard for all the circumstances.
In this case *here &assengers suffered inBuries *hich caused their death,
under 1"1/, the CC is &resumed to ha)e acted negligentl' unless it can
&ro)e that it had obser)ed e7traordinar' diligence. 2he CC raised the
defense of caso fortuito. Art. 11"0 &ro)ides that no &erson shall be
res&onsible for those e)ents *hich could not be foreseen or *hich though
foreseen *ere ine)itable. In Fasam )s 3mith, the 3C held that a caso
fortuito must ha)e the follo*ing elements= #1$ The cause of the unforeseen
and unexpected occurrence must be independent of the human will G #-$ (t
must be impossible to foresee the eventG #;$ The occurrence must be so as
to render it impossible for the debtor to fulfill his obligation in a normal
mannerG and #0$ The obligor must be free from any participation in the
aggravation of the injury resulting to the creditor. 2he running amuc: of the
&assenger *as the &ro7imate cause of the incident and is *ithin the conte7t
of force majeure.
Co*e)er, in order that a CC ma' be absol)ed from liabilit' in
case of force majeure, it is not enough that the accident *as caused b'
force majeure. 2he CC must still &ro)e that it *as not negligent in causing
the inBuries resulting from such accident. It must &ro)e that there *as no
negligence or lac: of care and diligence on the &art of the CC.
2he 2C and the CA had conflicting findings of fact. 2he 3C
u&held the findings of the CA66 the dri)er did not immediatel' sto& the bus at
the height of the commotionG the bus *as s&eeding from a full sto&G the
)ictims fell from the bus door *hen it *as o&ened or ga)e *a' *hile the bus
*as still runningG the conductor &anic:ed and ble* his *histle after &eo&le
had alread' fallen off the busG the bus *as not &ro&erl' e+ui&&ed *ith doors
in accordance *ith la*. It is therefore clear that the &etitioners ha)e failed
to o)ercome the &resum&tion of fault and negligence found in the la*
go)erning CCs.
2he CCHs argument that it is not an insurer of its &assengers
deser)es no merit in )ie* of the failure of the CC to &ro)e that the deaths of
the - &assengers *ere e7clusi)el' due to force maBeure and not to the
failure of the CC to obser)e e7tra6ordinar' diligence in trans&orting safel'
the &assengers to their destinations as *arranted b' la*.
1. Fimitation of liabilit'G )alidit' of sti&ulations
Art. 11B1. The res#onsi$i%ity of the coon carrier for the
safety of #assen&ers as re0!ire' in Arts. 11;; an' 11BB cannot $e
'is#ense' )ith or %essene' $y sti#!%ation, $y the #ostin& of notices,
$y stateents on tic2ets, or other)ise.
Art. 11B3. When a #assen&er is carrie' &rat!ito!s%y, a
sti#!%ation %iitin& the coon carrierGs %ia$i%ity for ne&%i&ence is
-a%i', $!t not for )i%%f!% acts or &ross ne&%i&ence.
The re'!ction of fare 'oes not .!stify any %iitation of the
coon carrierGs %ia$i%ity.
PAGE 26
TRANSPORTATION AND MARITIME LAW
Tic2et &i-en to a #assen&er is a )ritten contract.66 2ic:et gi)en to
&assenger is a *ritten contract *ith the ff. elements= #1$ the consent of the
contracting &arties manifested b' the fact that the &assenger boards the
shi& and the shi&&er consents or acce&ts him in the shi& for trans&ortationG
#-$ cause or consideration *hich is the fare &aid b' the &assenger as stated
in the tic:etG #;$ object, *hich is the trans&ortation of the &assenger from
the &lace of de&arture to the &lace of destination *hich are stated in the
tic:et.
Passen&er $o!n' not)ithstan'in& his fai%!re to si&n tic2et containin&
sti#!%ation %iitin& %ia$i%ity.66 D)en if the &assenger failed to sign the
tic:et, he is ne)ertheless bound b' the &ro)isions thereof. 3uch &ro)isions
are &art of the contract of carriage, regardless of the &assengerHs lac: of
:no*ledge or assent to the regulation. It is *hat is :no*n as a contract of
adhesion *hich is not entirel' &rohibited b' la*. The one who adheres to
the contract is in reality free to reject it entirely; if he adheres, he gives his
consent. Accordingl', *here the CC incurred dela', it is liable onl' for the
amount &rinted in the tic:et the &assenger not ha)ing declared a higher
)alue for his luggage nor &aid addtl. charges.
Dis#ensin& )ith or %iitin& %ia$i%ity.66 General rule= Under 1"1", the
e7traordinar' diligence re+uired under 1";; and 1"11 for the carriage of
&assengers cannot be dis&ensed *ith or lessened #1$ b' sti&ulation, #-$ b'
the &osting of notices, #;$ b' statements on tic:ets, or #0$ other*ise
%hat cannot be sti&ulated in a carriage of &assengers =
#1$ absolutel' e7em&ting the CC from liabilit' from the
&assengerHs death or inBuriesG
#-$ lessening the e7traordinar' diligence re+uired b' la* to the
diligence of a good father of a famil'
D7ce&tion= Dffect of gratuitous carriage.66 Under 1"1!, the CC
and the &assenger ma' )alidl' sti&ulate limiting the CCHs liabilit' for
negligence *here the &assenger is carried gratuitousl' #but the &arties
cannot sti&ulate to entirel' eliminate liabilit' of CC$
Effect of re'!ction of fares.66 Under 1"1! #-$, the reduction of fare does
not Bustif' an' limitation of the CCHs liabilit' 66 the la* re+uires gratuitous
&assage.
2he la* is much stricter *ith res&ect to carriage of &assengers
as com&ared *ith carriage of goods= a sti&ulation limiting the CCHs liabilit' in
*riting, signed b' the &arties, su&&orted b' sufficient consideration, not
contrar' to la* *ill still be )oid *here the &assenger is not carried
gratuitousl'.
Lia$i%ity of o)ner of // to accoo'ation #assen&ers or in-ite'
&!ests.66 8Fara )s .alencia, 11!9 an o*ner of an automobile o*es a guest
the dut' to e7ercise ordinar' or reasonable care to a)oid inBuring himG since
one riding in an automobile is no less a guest because he as:ed for the
&ri)ilege of doing so, the same obligation of care is im&osed u&on the dri)er
and o*ner as in the case of one e7&ressl' in)ited to ride
/. Res&onsibilit' for acts of DDs
Art. 11B5. /oon carriers are %ia$%e for the 'eath of or
in.!ries to #assen&ers thro!&h the ne&%i&ence or )i%%f!% acts of the
forerGs e#%oyees, a%tho!&h s!ch e#%oyees ay ha-e acte' $eyon'
the sco#e of their a!thority or in -io%ation of the or'ers of the coon
carrier.
The %ia$i%ity of the coon carrier 'oes not cease !#on
#roof that they e(ercise' a%% the 'i%i&ence of a &oo' father of a fai%y
in the se%ection an' s!#er-ision of their e#%oyees.
Art. 11*+. The coon carrierGs res#onsi$i%ity #rescri$e' in
the #rece'in& artic%e cannot $e e%iinate' or %iite' $y sti#!%ation, $y
the #ostin& of notices, $y stateents on the tic2ets, or other)ise.
0 Agba'ani=
Lia$i%ity for ne&%i&ence or )i%%f!% acts of e#%oyees.66 Under 1"1, CC
are held liable for the death or inBuries to &assengers caused b' the
negligence or the *illful acts of their DDs, although such DDs ma' ha)e
acted be'ond the sco&e of their authorit' or in )iolation of the orders of the
CC. 2he CC cannot esca&e liabilit' b' inter&osing the defense that its DDs
ha)e acted *ithout an' authorit' or against the orders of the CC
2he &assenger is entitled to &rotection from &ersonal )iolence b'
the CC or its agents or DDs since the contract of trans&ortation obligates the
CC to trans&ort a &assenger safel' to his destination and a CC is
res&onsible for the misconduct of its DDs
Cardenas )s <ernando, 10 >G no. 0, &. 1?0; #11"$= #1$ e7traordinar'
diligence re+uired of CC= calculated to &rotect the &assengers as demanded
b' the &reciousness of human life and b' the consideration that e)er'
&erson must in e)er' *a' be safeguarded against all inBur'G #-$ liabilit' for
inBur' of &assenger is based on a breach of contract of carriage for failure to
bring the &assenger safel' to his destination
Reason for a2in& the // %ia$%e for the iscon'!ct of its EEs in their
o)n interest.66 2he ser)ant is clothed *ith delegated authorit' and charged
*ith the dut' b' the CC, to e7ecute his underta:ing to carr' the &assenger
safel'G *hen the DD mistreats the &assenger, he )iolates the contractual
obligation of the CC for *hich he re&resents the CC
Lia$i%ity of // for 'efects of its e0!i#ent.66 A &assenger is entitled to
reco)er damages from a CC for an inBur' resulting from a defect in an
a&&liance &urchased from a manufacturer, *hene)er it a&&ears that the
defect *ould ha)e been disco)ered b' the CC if it had e7ercised the degree
of care *hich under the circumstances *as incumbent u&on it, *ith regard
to ins&ection and a&&lication of the necessar' testsG for the &ur&oses of this
doctrine, the manufacturer is considered as being in la* the agent or
ser)ant of the CC, as far as regards the *or: of constructing the a&&liance
/oon carrier is e(e#t fro acts of EE not 'one in %ine of '!ty.66
2he CC is e7em&t from liabilit' *here the DD *as ne)er in a &osition in
*hich it became his dut' to his DR to re&resent him in discharging an' dut'
of the CC to*ards the &assengerG the DD is deemed as a stranger or co6
&assenger since his act *as not done in the line of dut'
Defense of 'i%i&ence in se%ection, etc., of e#%oyees.66 CC cannot
esca&e liabilit' b' inter&osing defense that he e7ercised due diligence in the
selection and su&er)ision of his DDsG his liabilit' is based on cul&a
contractual
When re%ationshi# of carrier an' #assen&er terinates.66 2he relation of
CC and &assenger does not cease at the moment that the &assenger alights
from the CCHs )ehicle at a &lace selected b' the CC at the &oint of
destination, but continues until the &assenger had reasonable time or a
reasonable o&&ortunit' to lea)e the CCHs &remises. %hat is a reasonable
time or a reasonable dela' *ithin this rule is to be determined from all the
circumstances
E%iination or %iitation of carrierGs %ia$i%ity.66 Under 1"/?, the CCHs
liabilit' for the negligence or *illful acts of his DDs *hich cause death of or
inBur' to &assengers cannot be eliminated or limited b' #1$ sti&ulation, #-$ b'
the &osting of notice, #;$ b' statements on the tic:ets, or #0$ other*ise
Bataclan )s @edina, 1?0 Phil 1!1
<= su&ra. Bus turned turtle *ith gas lea:ing out. Rescuers brought
torches *hich resulted in fire.
Celd = 2here *as a breach of the contract of carriage and negligence on the
&art of the agent of the CC, the dri)er. At the time of the blo*out of the
tires, the bus *as s&eeding. 2he &ro7imate cause of the death *as the
o)erturning of the )ehicle *hich *as follo*ed b' the negligence of the dri)er
and the conductor *ho *ere on the road *al:ing bac: and forth. 2he'
should ha)e :no*n that *ith the &osition of the bus, lea:age *as &ossible
aside from the fact that gas *hen s&illed can be smelled from a distance.
2he failure of the dri)er and conductor to ha)e cautioned or ta:en ste&s to
*arn rescuers not to bring a lighted torch too near the bus constitutes
negligence on the &art of the agents of the carrier.
Ee Gillaco )s @RR, " Phil !!0
<= PlaintiffHs husband *as a &assenger in the train from Calamba to
@anila. %hen the train reached the Paco Railroad, a train guard of @RR
*as in the station *aiting for the same train to ta:e him to 2utuban to re&ort
for dut'. Ce had a long standing grudge against Gillaco and he shot and
:illed him u&on seeing him inside the train coach.
Celd = %hile a &assenger is entitled to &rotection from &ersonal )iolence b'
the CC or its agents or DDs, the res&onsibilit' of the CC e7tends onl' to
those acts that the CC could foresee or a)oid through the e7ercise of the
degree of care and diligence re+uired of it. 2he >CC did not im&ose u&on
CC the absolute liabilit' for assaults of their DDs u&on the &assengers.
2he act of the guard *as entirel' unforeseeable b' @RR *hich
had no means to ascertain or antici&ate that the t*o *ould meet nor could it
foresee e)er' &ersonal rancor that might e7ist bet*een its DDs and its
PAGE 27
TRANSPORTATION AND MARITIME LAW
&assengers. 2he shooting *as a caso fortuito, both being unforeseeable
and ine)itable under the circumstances.
%hen the crime too: &lace, the guard had no duties to discharge.
Cis &osition *ould be that of a &assenger also *aiting trans&ortation and not
of an DD assigned to discharge duties.
@aranan )s PereA, -? 3CRA 01-
<= A &assenger in a ta7icab *as stabbed and :illed b' the dri)er.
2he dri)er claimed self defense since accdg to him, he *as stabbed first b'
the &assenger. 2he ta7icab o&erator claimed caso fortuito.
Celd= 2he 4CC unli:e the >CC ma:es the CC absolutel' liable for
intentional assaults committed b' its DDs u&on its &assengers #Art. 1"10$.
2he CCHs liabilit' is based on either #1$ respondeat superior or #-$ the CCHs
im&lied dut' to trans&ort the &assenger safel'. Under respondeat superior
#*Ic is the minorit' )ie*$, the CC is liable onl' *hen the act of the DD is
*ithin the sco&e of his authorit' and dut'. Under the second )ie*, the CC is
liable as long as the assault occurs *ithin the course of the &erformance of
the DDHs dut'. It is no defense that the act *as done in e7cess of authorit'
or in disobedience of the CCHs orders. 2he CCHs liabilit' is absolute in the
sense that it &racticall' secures the &assengers from assaults committed b'
its o*n DDs. 2hree cogent reasons underlie this rule = #1$ the s&ecial
underta:ing of the CC re+uires that it furnish the &assengers the full
measure of &rotection afforded b' the e7ercise of the high degree of care
&rescribed in the la*, from )iolence and insults in the hands of strangers,
other &assengers, and from its o*n ser)ants charged *ith the &assengerHs
safet'G #-$ liabilit' is based on the CCHs confiding in the ser)antHs hands the
&erformance of his contract to safel' trans&ort the &assenger, delegating
there*ith the dut' of &rotecting the &assenger *ith utmost care &rescribed
b' la*G #;$ as bet*een the CC and the &assenger, the CC must bear the ris:
of *rongful acts or negligence of the CCHs DDs against &assengers since it
has the &o*er to select and remo)e them.
It is the CCHs obligation to select its dri)ers *ith due regard not
onl' to their technical com&etence and &h'sical abilit' but also to their total
&ersonalit', including &atterns of beha)ior, moral fiber, and social attitude.
". Res&onsibilit' for acts of strangers and co6
&assengers
Art. 11*;. A coon carrier is res#onsi$%e for in.!ries
s!ffere' $y a #assen&er on acco!nt of the )i%%f!% acts or ne&%i&ence of
other #assen&ers or of stran&ers, if the coon carrierGs e#%oyees
thro!&h the e(ercise of the 'i%i&ence of a &oo' father of a fai%y co!%'
ha-e #re-ente' or sto##e' the act or oission.

0 Agba'ani=
2he CC is res&onsible for such *illful acts or negligence of other
&assengers or of strangers, &ro)ided that the CCHs DDs could ha)e
&re)ented or sto&&ed the act or omission through the e7ercise of ordinar'
diligence. If the inBur' could not ha)e been a)oided b' the e7ercise of
ordinar' diligence on the &art of the DDs of the CC, the CC is not liable
4otice that the la* s&ea:s of inBuries suffered b' the &assenger
but not his death. Co*e)er, there a&&ears to be no reason *h' the
common carrier should not be held liable under such circumstances. 2he
*ord 5inBuries5 should be inter&reted to include 5death.5 #Aguedo <.
Agba'ani, C>@@DRCIAF FA% RD.ID%DR, 1!! ed.$
Pila&il )s CA 1!? 3CRA 10/
<= %hile on a bus, an unidentified b'stander hurled a stone at the
bus and hit Pila&il abo)e his left e'e. Ce sustained some inBuries to his e'e.
Celd= 2he la* does not ma:e the CC an insurer of the absolute safet' of its
&assengers. Art. 1"11 +ualifies the dut' of the CC in e7ercising )igilance to
onl' such as human care and foresight can &ro)ide. 2he &resum&tion
created b' la* against the CC is rebuttable b' &roof that the CC had
e7ercised e7traordinar' diligence in the &erformance of its obligations and
that the inBuries suffered *ere caused b' fortuitous e)ents. 2he liabilit' of
the CC necessaril' rests u&on its negligence, or its failure to e7ercise the
degree of diligence re+uired b' la*. Under Art. 1"/;, the diligence re+uired,
*ith regards to its liabilit' in cases *hen inter)ening acts of strangers
directl' caused the inBur', is the diligence onl' of a good father of a famil'
and not the e7traordinar' diligence generall' re+uired. 2he rule is not so
e7acting as to re+uire one charged *ith its e7ercise to ta:e doubtful or
unreasonable &recautions to guard against unla*ful acts of strangers. 2he
CC *ould onl' be negligent if the tort caused b' a third &erson could ha)e
been foreseen and &re)ented b' them.
2he inBur' *as in no *a' connected to the &erformance of the
obligation of the bus com&an'. It *as caused b' a stranger, o)er *hich the
carrier had no control or e)en :no*ledge of, and *hich could not ha)e been
&re)ented.
Bachelor D7&ress )s CA, 1!? 3CRA -1"
<= su&ra. A &assenger stabbed a PC officer *hich caused a
commotion *hich resulted in the death of - &assengers.
Celd= 2he CC raised the defense of caso fortuito. 2he running amuc: of
the &assenger *as the &ro7imate cause of the incident and is *ithin the
conte7t of force majeure. Co*e)er, in order that a CC ma' be absol)ed from
liabilit' in case of force majeure, it is not enough that the accident *as
caused b' force majeure. 2he CC must still &ro)e that it *as not negligent
in causing the inBuries resulting from such accident. It must &ro)e that there
*as no negligence or lac: of care and diligence on the &art of the CC.
2he 2C and the CA had conflicting findings of fact. 2he 3C
u&held the findings of the CA66 the dri)er did not immediatel' sto& the bus
at the height of the commotionG the bus *as s&eeding from a full sto&G the
)ictims fell from the bus door *hen it *as o&ened or ga)e *a' *hile the bus
*as still runningG the conductor &anic:ed and ble* his *histle after &eo&le
had alread' fallen off the busG the bus *as not &ro&erl' e+ui&&ed *ith doors
in accordance *ith la*. It is therefore clear that the &etitioners ha)e failed
to o)ercome the &resum&tion of fault and negligence found in the la*
go)erning CCs.
2he CCHs argument that it is not an insurer of its &assengers
deser)es no merit in )ie* of the failure of the CC to &ro)e that the deaths of
the - &assengers *ere e7clusi)el' due to force majeure and not to the
failure of the CC to obser)e e7traordinar' diligence in trans&orting safel' the
&assengers to their destinations as *arranted b' la*.
!. Eut' of &assengerG effect of contributor' negligence
Art. 11*1. The #assen&er !st o$ser-e the 'i%i&ence of a
&oo' father of a fai%y to a-oi' in.!ry to hise%f.
Art. 11*D. The contri$!tory ne&%i&ence of the #assen&er
'oes not $ar reco-ery of 'aa&es for his 'eath or in.!ries, if the
#ro(iate ca!se thereof is the ne&%i&ence of the coon carrier, $!t
the ao!nt of 'aa&es sha%% $e e0!ita$%y re'!ce'.
La) 'oes not #rotect ne&%i&ence of #assen&er.66 Fa* does not &rotect
negligence of &assenger to the e7tent of doing harm or damage u&on a
&ublic utilit'
Di%i&ence re0!ire' of #assen&er.66 Eiligence of a good father of a famil'
to a)oid inBur' to himself.
Effect of ne&%i&ence of #assen&er.66 %here the &ro7imate cause of the
death of or inBur' to the &assenger is his o*n negligence, and not that of the
CC, the CC is e7em&ted from liabilit'
Effect of #assen&erGs contri$!tory ne&%i&ence.66 Contributor' negligence
on the &art of the &assenger does not Bustif' the CCHs e7em&tion from
liabilit'. %here it is not the &ro7imate cause of the death or inBur', he or his
heirs are not barred from reco)er' of damages, &ro)ided of course that the
CC is the &ro7imate cause of his death or inBur'
Cangco )s @RR ;! Phil "/!
<= su&ra. DD riding on train *ho ste&&ed on *atermelons.
Celd= 2he conduct of &laintiff in underta:ing to alight *hile the train *as 'et
slightl' under*a' *as not characteriAed b' im&rudence and that he *as not
guilt' of contributor' negligence.
2he circumstances sho* that it *as no means so ris:' for him to get off
*hile the train *as 'et mo)ing. It is not negligence &er se for a tra)eler to
alight from a slo*l' mo)ing train.
Isaac )s A. F. Ammen
<= su&ra. Passenger aboard a bus *ho &laced his left arm on the
*indo* lost his arm *hen the bus collided *ith a &ic: u&.
PAGE 28
TRANSPORTATION AND MARITIME LAW
Celd= B' &lacing his left arm on the *indo*, the &assenger is guilt' of
contributor' negligence, and although contributor' negligence cannot relie)e
the carrier but can onl' reduce his liabilit' #Art. 1"/-$, this is a circumstance
*hich militates against &laintiffHs &osition. It is negligence &er se for
&assengers to &rotrude an' &art of his bod' and that no reco)er' can be
had for an inBur'.
In this case, the bus dri)er had done *hat a &rudent man could
ha)e done to a)oid the collision. 2he inBur' *as due to &assengerHs fault.
Lia$i%ity of air carrier !n'er the Warsa) /on-ention <Oct. 1D, 15D5=
Art. 11. The carrier sha%% $e %ia$%e for 'aa&es s!staine' in
the e-ent of 'eath or )o!n'in& of a #assen&er or any other $o'i%y
in.!ry s!ffere' $y a #assen&er, if the acci'ent )hich ca!se' the
'aa&e so s!staine' too2 #%ace on $oar' the aircraft or in the co!rse
of any of the o#erations of e$ar2in& or 'ise$ar2in&.
Art. 13. <1= The carrier sha%% $e %ia$%e for 'aa&e s!staine'
in the e-ent of the 'estr!ction or %oss of, or of 'aa&e to, any chec2e'
$a&&a&e or any &oo's, if the occ!rrence )hich ca!se' the 'aa&e so
s!staine' too2 #%ace '!rin& the trans#ortation $y air.
<D= The trans#ortation $y air )ithin the eanin& of the
#rece'in& #ara&ra#h sha%% co#rise the #erio' '!rin& )hich the
$a&&a&e or &oo's are in the char&e of the carrier, )hether in an air#ort
or on $oar' an aircraft, or, in case of a %an'in& o!tsi'e an air#ort, in
any #%ace )hatsoe-er.
<;= The #erio' of the trans#ortation $y air sha%% not e(ten' to
any trans#ortation $y %an', $y sea, or $y ri-er #erfore' o!tsi'e an
air#ort. If ho)e-er, s!ch trans#ortation ta2es #%ace in the #erforance
of a contract for trans#ortation $y air, for the #!r#ose of %oa'in&,
'e%i-ery, or transshi#ent, any 'aa&e is #res!e', s!$.ect to #roof
to the contrary, to ha-e $een the res!%t of an e-ent )hich too2 #%ace
'!rin& the trans#ortation $y air.
Art. 15. The carrier sha%% $e %ia$%e for 'aa&es occasione'
$y 'e%ay in the trans#ortation $y air of #assen&ers, $a&&a&e or &oo's
3C has held that these &ro)isions merel' declare the carrier
liable for damages in the enumerated cases, if the conditions therein
s&ecified are &resent. 4either said &ro)isions nor others in the Con)ention
regulate or e7clude liabilit' for other breaches of contract b' the carrier.
D. Daa&es Reco-era$%e fro /oon /arriers
1. In general
Art. 11*?. Daa&es in cases co#rise' in this Section sha%%
$e a)ar'e' )ith the tit%e XAIII of this $oo2 concernin& 'aa&es.
Artic%e DD+* sha%% a%so a##%y to the 'eath of a #assen&er ca!se' $y the
$reach of contract $y a coon carrier.
Art. D151. Daa&es ay $e9
<1= Act!a% or co#ensatory@
<D= Mora%@
<;= Noina%@
<?= Te#erate or o'erate@
<B= Li0!i'ate'@
<*= E(e#%ary or correcti-e.
-. Actual or com&ensator'
Art. D155. E(ce#t as #ro-i'e' $y %a) or $y sti#!%ation, one
is entit%e' to an a'e0!ate co#ensation on%y for s!ch #ec!niary %oss
s!ffere' $y hi as he has '!%y #ro-e'. S!ch co#ensation referre'
to as act!a% or co#ensatory 'aa&es.
Art. DD+1. In contracts an' 0!asi6contracts, the 'aa&es for
)hich the o$%i&or )ho acte' in &oo' faith is %ia$%e sha%% $e those that
are nat!ra% an' #ro$a$%e conse0!ences of the $reach of the o$%i&ation,
an' )hich the #arties ha-e foreseen or co!%' ha-e reasona$%y
foreseen at the tie the o$%i&ation )as constit!te'.
In case of fra!', $a' faith, a%ice or )anton attit!'e, the
o$%i&or sha%% $e res#onsi$%e for a%% 'aa&es )hich ay $e reasona$%y
attri$!te' to the non6#erforance of the o$%i&ation.
Art. DD+;. The #arty s!fferin& %oss or in.!ry !st e(ercise
'i%i&ence of a &oo' father of a fai%y to inii"e the 'aa&es
res!%tin& fro the act or oission in 0!estion.
Art. 11*?. Daa&es in cases co#rise' in this Section sha%%
$e a)ar'e' )ith the tit%e XAIII of this $oo2 concernin& 'aa&es.
Artic%e DD+* sha%% a%so a##%y to the 'eath of a #assen&er ca!se' $y the
$reach of contract $y a coon carrier.
Art. DD+*. The ao!nt of 'aa&es for 'eath ca!se' $y a
crie or 0!asi6'e%ict sha%% $e at %east P ;,+++ <no) PB+,+++=, e-en
tho!&h there ay ha-e $een iti&atin& circ!stances. In a''ition9
<1= The 'efen'ant sha%% $e %ia$%e for the %oss of the earnin&
ca#acity of the 'ecease', an' the in'enity sha%% $e #ai' to the heirs
of the %atter@ s!ch in'enity sha%% in e-ery case $e assesse' an'
a)ar'e' $y the co!rt, !n%ess the 'ecease' on acco!nt of #eranent
#hysica% 'isa$i%ity not ca!se' $y the 'efen'ant, ha' no earnin&
ca#acity at the tie of his 'eath@
<D= If the 'ecease' )as o$%i&e' to &i-e s!##ort accor'in& to
the #ro-isions of artic%e D51, the reci#ient )ho is not an heir ca%%e' to
the 'ece'entGs inheritance $y the %a) of testate or intestate
s!ccession, ay 'ean' s!##ort fro the #erson ca!sin& the 'eath,
for a #erio' not e(cee'in& fi-e years, the e(act '!ration to $e fi(e' $y
the co!rt@
<;= The s#o!ses, %e&itiate an' i%%e&itiate 'escen'ants an'
ascen'ants of the 'ecease' ay 'ean' ora% 'aa&es for enta%
an&!ish $y reason of the 'eath of the 'ecease'.
Cariaga )s F2BCo., 11? Phil ;0/
<= Ddgardo Cariaga, a fourth 'ear medical student of U32, *as a
&assenger of an F2BC bus *hich bum&ed against a train of @RR on the
national high*a' crossing a railroad tract at Faguna de Ba'. Cariaga
suffered se)ere inBuries on the head ma:ing him unconscious during the first
;1 da's after the accident, reducing his intelligence b' 1?Q and rendering
him in a hel&less condition, )irtuall' in)alid, both &h'sicall' and mentall'.
F2BC &aid all medical e7&enses &lus allo*ance during con)alescence.
Fater, CariagaHs &arents brought an action to reco)er damages from F2BC
and @RR in the amount of P ;1-,??? as actual, com&ensator', moral and
e7em&lar' damages. F2BC disclaimed liabilit' and filed a cross6com&laint
against @RR for reco)er' of e7&enses &aid b' it to the &laintiff &lacing @RR
negligent for not &ro)iding a crossing bar at the national high*a' railroad
trac:. Faguna C<I dismissed the cross6com&laint against @RR and held
F2BC liable for P 1?,??? as com&ensator' damages *ith interest. Plaintiff
and F2BC a&&ealed.
Celd= 2he train dri)er *as not negligent. Ce sounded the trainHs *histle four
times before the intersection, *hich *ere heard e)en b' the bus
&assengers. 2he bus did not slo* do*n but instead the bus dri)er tried to
&ass the intersection before the train. In addition, another F2BC bus *hich
arri)ed ahead of the bus in this case, at the crossing heeded the train
*histle b' sto&&ing and allo*ing the train to &ass. Clearl', the bus dri)er
*as negligent in totall' disregarding the *arning. >n the other hand, @RR
cannot be held to be contributoril' negligent because F2BC *as not able to
discharge its burden of &roof *hen it alleged that @RR )iolated its charter
b' failing to ring the locomoti)e bell.
2he e)idence sho*s that Dd C. had been rendered &h'sicall'
and mentall' in)alid b' the accident. Ce suffered head inBuries s&ecificall' a
fractured right forehead necessitating the remo)al of all the right frontal lobe
of his brain, *hich reduced his intelligence b' 1?Q so that he can no longer
finish his medical course. In addition, he has to lead a +uiet and retired life
because if the tantalum &late *hich re&laced a &ortion of his s:ull is &ressed
in or dented, it *ould cause his death.
F2BC admitted that under Art. --?1, it is liable for damages that
are the natural and &robable conse+uences of the breach and *hich the
&arties had foreseen or could ha)e reasonabl' foreseen at the time the
obligation *as constituted. It ho*e)er claims that the said &ro)ision
contem&lates onl' the medical, hos&ital, and other e7&enses in the total
sum of P 1","1."1. 2he 3C ruled that the income *hich Dd could earn if
he should finish the medical course, and &ass the corres&onding board
e7ams must be deemed included because the' could ha)e reasonabl' been
foreseen b' the &arties at the time he boarded the bus.
%hile his scholastic record ma' not be first rate, it is sufficient to
Bustif' the assum&tion that he could ha)e finished his course and *ould
ha)e &assed the board e7ams in due time. As regards the income that he
could &ossibl' earn as a doctor, P ;?? #accdg. to F2BC *itness, Er. Eoria$
could easil' be e7&ected as minimum monthl' income of Dd C. had he
finished his studies. Com&ensator' damages should be increased to P
-1,???.
PAGE 29
TRANSPORTATION AND MARITIME LAW
2he claim for moral damages could not be granted because Art.
--1 enumerates the instances *hen moral damages ma' be reco)ered
and the &resent case does not fall under an' of them, e)en &ar. #-$ thereof
because this case is not one of +uasi6delict and could not be considered as
such because of a &re6e7isting contractual relation bet*een Dd C. and
F2BC. 4either could F2BC be liable under Art. ---? because it did not act
fraudulentl' or in bad faith. Attorne'Hs fees could also not be granted
because this case does not fall under Art. --?!.
2he claim b' the &arents for actual and com&ensator' damages
is also *ithout merit because the &resent action is based u&on a breach of
contract of carriage and the &arents *ere not a &art' thereto, and *ere not
themsel)es inBured as a result of the collision.
Pan Am )s IAC, 1/0 3CRA -/!
<= su&ra. Baggage containing &romotional and ad)ertising
materials for films to be e7hibited in the U3, clutch bags, barong tagalogs
and &ersonal belongings *as lost. PA4 A@ sought to limit its liabilit' to the
amount s&ecified in the tic:et absent a declaration of higher )aluation and
the &a'ment of addtl. charges.
Celd= >n the basis of sti&ulations &rinted at the bac: of the tic:et, Pan Am
contends that its liabilit' for the lost baggage of Pangan is limited to N
/??.?? #N-? 7 ;? :ilos$ as the latter did not declare a higher )alue for his
baggage and &a' the corres&onding charges.
2he 3C a&&lied the ruling in @endoAa )s PAF= Before defendant
could be held to s&ecial damages, such as alleged loss of &rofits on account
of dela' or failure of deli)er', it must ha)e a&&eared that he had notice at
the time of deli)er' to him of the &articular circumstances attending the
shi&ment, and *hich &robabl' *ould lead to such s&ecial loss if he
defaulted. (n order to impose on the defaulting party further liability than for
damages naturally and directly, i.e. in the ordinary course of things, arising
from a breach of contract, such unusual or extraordinary damages must
have been brought within the contemplation of the parties as the probable
result of the breach at the time of or prior to contracting. In the absence of
&roof that Pan AmHs attention *as called to the s&ecial circumstances
re+uiring &rom&t deli)er' of PanganHs luggages, &etitioner cannot be held
liable for the cancellation of PanganHs contracts as it could not ha)e
reasonabl' foreseen such e)entualit' *hen it acce&ted the luggage for
transit. Pan Am *as not &ri)' to the contracts of Pangan nor *as its
attention called to the condition therein re+uiring deli)er' of the &romotional
and ad)ertising materials on or before a certain date.
4o attorne'Hs fees could be a*arded since there *as no
unBustified refusal b' Pan Am to satisf' the &assengerHs Bust and )alid claim.
.illa Re' 2ransit )s CA, ;1 3CRA 111
<= Policronio Quintos boarded a .illa Re' 2ransit bus at Finga'en,
Pangasinan for @anila and *as seated on the first seat right side. %hen
the' reached the national high*a' in Pam&anga, the bus frontall' hit the
rear side of a bull cart filled *ith ha'. 2he end of the bamboo &ole tied to
the cart hit the *indshield and landed on the face of Quintos *ho *as
seated in front. Ce died of cerebral inBuries. Cis sisters and sur)i)ing heirs
brought an action against the bus co. 2he 2C and CA held .illa Re' liable
for P /;,"1?.??.
Celd= 2he determination of damages due is de&endent on - factors = #1$ on
the no. of 'ears on the basis of *hich damages shall be com&uted #life
e7&ectanc'$G and #-$ rate at *hich the losses sustained should be fi7ed.
CA determined life e7&ectanc' accdg. to the American
D7&ectanc' 2able of @ortalit'G and since Quintos *as around ;? 'ears old
at the time of his death = -I; 7 8!? 6 ;?9 O ;; 1I; 'ears. 2he bus co. *anted
to use the 0 'ear basis ado&ted in Alcantara )s 3urro but the court held that
the case is not controlling as it did not la' do*n an' rule on the length of
time to be used in the com&utation of damages. In fact, it declared that
there is no fi7ed basis for determination of indemnit' and much is left to the
discretion of the court considering the material damages in)ol)ed and that
there can be no e7act or uniform rule for measuring the )alue of human life
and the measure of damages cannot be arri)ed at b' &recise mathematical
calculations.
.illa Re' im&ugns the decision on the ground that damages *ill
ha)e to be &aid 4>% *here most of those sought to be indemnified *ill be
suffered 'ears later. 2his argument if offset b' the fact that &a'ment of the
a*ard *ill ta:e &lace u&on the finalit' of the decision, fi7ed at the rate of P
-,1!0 &er 'ear and did not an'more com&ute the &otentialit' and ca&acit' of
Quintos to increase his future income, u&on conclusion of his training, *hen
he *ould be &romoted and recei)e a higher salar'.
In determining the losses sustained b' the de&endents and heirs
of Quintos. the' consist 4>2 of the full amount of his earnings but of the
su&&ort the' *ould ha)e recei)ed from him had he not died. In fi7ing said
amount, the necessar' li)ing e7&enses should therefore be deducted from
his earnings. 2he amount reco)erable *ould therefore be the 4D2
earnings, *hich is the &ortion *hich the beneficiaries *ould ha)e recei)ed.
2o this sum must be added P1-,??? &ursuant to Art. 1?0 and 1?" of the
RPC, in relation to Art. --?/, 4CC and P 1,"-".1 for the amount actuall'
s&ent b' the sisters for his medical and burial e7&enses and
P -, 1?? attorne'Hs fees.
PAF )s CA, 1!1 3CRA 11?
<= In 1/?, 4icanor Padilla boarded the PAF flight from Iloilo to
@anila. 2he &lane crashed on @t. Baco, @indoro. 2he &lane, a PI6C1;;,
*as manufactured in 10- and *as ac+uired b' PAF in 10!. It had been
certified air*orth' b' the Ci)il Aeronautics Administration. As a result of
her sonHs death, @rs. Padilla demanded P /??,??? as actual and
com&ensator' damages &lus e7em&lar' damages and P /?,??? attorne'Hs
fees.
Prior to his death, 4icanor Padilla *as - 'ears old, President
and General @anager of Padilla 3hi&&ing Co. at Iloilo Cit', and a legal
assistant of the Padilla Fa* >ffice. U&on learning of the death of her son,
she suffered shoc: and mental anguish, because her son *ho *as still
single *as li)ing *ith her. 4icanor had life insurance of P -?,???, the
&roceeds of *hich *ere &aid to his sister. Dduardo @ate of the Allied
>)erseas 2rading Co. testified that the deceased *as one of the
incor&orators of the co. and also its .P *ith a monthl' salar' of P 011.
Isaac Re'es, auditor of Padilla 3hi&&ing Co., declared that the deceased
*as President and General @anager and recei)ed a salar' of P 1,1?? &er
month.
2he R2C and the CA a*arded damages of P 0"",??? as
a*ard for the e7&ected income of the deceased, P 1?,??? as moral
damagesG P 1?,??? as attorne'Hs fees and to &a' the costs. PAF a&&ealed
the decision since accdg. to it, the court erred in com&uting the a*arded
indemnit' based on the life e7&ectanc' of the deceased rather than on the
life e7&ectanc' of the mother. Accdg. to it, the life e7&ectanc' of the
deceased or of the beneficiar', *hiche)er is shorter, is used in com&uting
for amount of damages.
Celd= Under Arts. 1"/0 and Article --?/ #1$, the a*ard of damages for
death is com&uted on the basis of the life e7&ectanc' of the deceased and
not of the beneficiar'. In this case, the lo*er courts determined the
deceased gross annual income to be P -;,1?? less P ,-?? as li)ing
e7&enses, resulting in a net income of P 1;,??. 2he lo*er court allo*ed
the deceased a life e7&ectanc' of ;? 'ears. @ulti&l'ing his annual net
income b' his life e7&ectanc' of ;? 'ears, the &roduct is P 01",???, *hich
is the death indemnit' due to his mother and onl' forced heir.
Because of the long dela' in this case, the mother alread' died
*ithout being able to recei)e the indemnit' she deser)ed. PAF is ordered to
&a' her heirs the death indemnit' *ith legal rate of interest of /Q &er
annum.
;. @oral
Art. DD11. Mora% 'aa&es inc%!'e #hysica% s!fferin&, enta%
an&!ish, fri&ht, serio!s an(iety, $esirche' re#!tation, )o!n'e'
fee%in&s, ora% shoc2, socia% h!i%iation, an' sii%ar in.!ry. Tho!&h
inca#a$%e of #ec!niary co#!tation, ora% 'aa&es ay $e reco-ere'
if they are the #ro(iate res!%t of the 'efen'antGs )ron&f!% act or
oission.
Art. DD1*. No #roof of #ec!niary %oss is necessary in or'er
that ora%, noina%, te#erate, %i0!i'ate' or e(e#%ary 'aa&es ay
$e a'.!'icate'. The assessent of s!ch 'aa&es, e(ce#t %i0!i'ate'
ones, is %eft to the 'iscretion of the co!rt, accor'in& to the
circ!stances of each case.
Art. DD15. Mora% 'aa&es ay $e reco-ere' in the fo%%o)in&
ana%o&o!s cases 9
<1= A criina% offense res!%tin& in #hysica% in.!ries@
<D= J!asi6'e%icts ca!sin& #hysica% in.!ries@
(((
<1+= Acts an' actions referre' to in Artic%es D1, D*, D1, D3, D5,
;+, ;D, ;? an' ;B.
(((
PAGE 30
TRANSPORTATION AND MARITIME LAW
Art. DDD+. Wi%%f!% in.!ry to #ro#erty ay $e a %e&a% &ro!n'
for a)ar'in& ora% 'aa&es if the co!rt sho!%' fin' that, !n'er the
circ!stances, s!ch 'aa&es are .!st%y '!e. The sae r!%e a##%ies to
$reaches of contract )here the 'efen'ant acte' fra!'!%ent%y or in $a'
faith.
Art. DD+*. (((
<;= The s#o!ses, %e&itiate an' i%%e&itiate 'escen'ants an'
ascen'ants of the 'ecease' ay 'ean' ora% 'aa&es for enta%
an&!ish $y reason of the 'eath of the 'ecease'.
<ores )s @iranda 1?1 Phil -//
<= supra. %hile the Bee&ne' *as descending the 3ta. @esa bridge
at an e7cessi)e rate of s&eed, the dri)er lost control, causing it to s*er)e
and hit the bridge *all. <i)e of the &assengers *ere inBured, including the
res&ondent. 2he CA a*arded moral damages.
Celd= Art. 1"/0 ma:es it all the more e)ident that where the injured
passenger does not die, moral damages are not recoverable unless it is
proved that the was guilty of malice or bad faith. In the case at bar, there
is no other e)idence of such malice to su&&ort an a*ard of moral damages.
2o a*ard moral damages for breach of contract, *ithout &roof of bad faith or
malice on the &art of the CC, as re+uired b' Art. ---?, *ould be to )iolate
the clear &ro)isions of the la*, and constitute un*arranted legislation. A
CCHs bad faith is not to be lightl' inferred from a mere finding that the
contract *as breached through negligence of the CCHs DDs. 2he e7ce&tion
is a misha& resulting to the death of a &assenger in *hich case Art. 1"/0
ma:es the CC subBect to Art. --?/ #a*ard of moral damages$.
Air <rance )s Carrascoso, 1! 3CRA 111
<= Plaintiff, a ci)il engineer, *as a member of a grou& of 0! <ili&inos
that left @anila for Fourdes on @arch ;?, 11!. Air <rance, through its
authoriAed agent, PAF, issued to &laintiff a first class round tri& tic:et from
@anila to Rome. <rom @anila to Bang:o:, he tra)eled first class, but at
Bang:o:, Air <rance forced him to )acate the first class seat that he *as
occu&'ing because there *as a *hite man *ho had a better right to the
seat. 2here *as a commotion *hen &laintiff first refused to gi)e u& his seat,
but he *as &acified b' his fello* <ili&ino &assengers to gi)e u& his seat and
transfer to another class.
2he lo*er court sentenced Air <rance to &a' P -1,??? as moral
damages, P 1?,??? as e7em&lar' damages, the difference in fare bet*een
first class and tourist class &lus P ;,??? for attorne'Hs fees and costs of suit.
2he CA reduced the refund from P ;;.-? to P ;!;.-?.
Celd= Air <rance contended that the issuance of the first class tic:et *as no
guarantee that he *ould ha)e a first class ride, but such *ould de&end u&on
the a)ailabilit' of first class seats. 2he 3C ruled that it could not understand
ho* a re&utable firm li:e Air <rance could ha)e the indiscretion to gi)e out
tic:ets it ne)er meant to honor at all. It recei)ed the corres&onding amount
in &a'ment of first6class tic:ets and 'et it allo*ed the &assenger to be at the
merc' of its DDs. Plaintiff *as indeed confirmed for first class all the *a' to
Rome.
2here *as contract to furnish &laintiff a first class &assage. 3aid
contract *as breached *hen the CC failed to furnish the first class
trans&ortation at Bang:o:. 2hird, there *as bad faith *hen &etitionerHs DD
com&elled Carrascoso to lea)e his first class accommodation after he *as
alread' seated and to ta:e a seat in the tourist class b' reason of *hich he
suffered incon)enience, embarrassments and humiliation, thereb' causing
him mental anguish, serious an7iet', *ounded feelings, and social
humiliation, resulting in moral damages. It is true that the com&laint did not
use the term Bad <aith. But the interference of B< is there. 2he manager
not onl' &re)ented Carrascoso from enBo'ing his right to a first class seatG
*orse, he im&osed his arbitrar' *illG he forcibl' eBected him from his seat,
made him suffer the humiliation of ha)ing to go to the tourist class
com&artment 66 Bust to gi)e *a' to another &assenger *hose right thereto
has not been established. 2his is certainl' B<. <or the *illful male)olent act
of CCHs manager, the CC6DR must ans*er. @oral damages are
reco)erable.
CCHs contract *ith Carrascoso is attended *ith &ublic dut'. 2he
e7&ulsion of Carrascoso is a )iolation of a &ublic dut' b' the CC 66 a case of
+uasi6delict. Eamages are &ro&er. 2he manner of eBectment of Carrascoso
fits into the legal &rece&t for a*arding e7em&lar' damages in addition to
moral damages.
Fo&eA )s Pan Am, 1/ 3CRA 0;1
<= Plaintiffs made first class reser)ations *ith defendant air carrier,
in its 2o:'o63< flight, *hich reser)ation *as confirmed and first class tic:ets
issuedG but defendantHs agent b' mista:e canceled &laintiffHs reser)ations
and thereafter deliberatel' *ithheld from &laintiffs the information, letting
them go on belie)ing that their first class reser)ations stood )alid and
confirmed, e7&ecting some cancellations of boo:ings *ould be made before
the flight time, *hich failed to occur. U&on arri)al in 2o:'o, onl' then *ere
the &laintiffs informed that there *ere no accommodations for them in the
first class, and the' *ere constrained, due to &ressing engagements in the
U3, to ta:e the flight as tourist &assengers, *hich the' did under &rotest.
Plaintiffs sued the defendant for moral and e7em&lar' damages. 2he RiAal
C<I a*arded the &laintiffs moral and e7em&lar' damages and attorne'Hs
fees. U&on &laintiffHs @<R, said damages *ere increased in amount.
Celd= In so misleading the &laintiffs into &urchasing first class tic:ets in
con)iction that the' had confirmed reser)ations *hen in fact the' had none,
defendant *illfull' and :no*ingl' &laced itself into &osition of ha)ing
breached its contract *ith &laintiffs.
3uch actions of the defendant ma' indeed ha)e been &rom&ted
b' nothing more than the &romotion of its self6interest in holding on to
&laintiffs as &assengers and foreclosing on their chances to see: the
ser)ice of other airlines that ma' ha)e been able to afford to them first class
accommodations. All the same, in legal contem&lation, such conduct
alread' amounts to action in B<. -or bad faith means a breach of a 'nown
duty through some motive of interest of ill will. It ma' not be humiliating to
tra)el as tourist &assengers, but it is humiliating to be com&elled to tra)el as
such, contrar' to *hat is rightfull' to be e7&ected from the contractual
underta:ing.
Plaintiffs are entitled to moral damages. Considering their
official, &olitical, social and financial standing, the' are a*arded P -??,???
as moral damages, P "1,??? as e7em&lar' damages all *ith interest, and
P 1?,??? as attorne'Hs fees considering the standing of &laintiffHs counsel.
>rtigas )s Fufthansa, /0 3CRA /1?
<= Plaintiff too: a first class accommodation on Fufthansa Airlines in
Rome for his tri& to @anila, *ith confirmation of the airlines office, but its DD
on seeing &laintiffHs <ili&ino nationalit' in his &ass&ort, disallo*ed him to
board the &lace and his seat *as gi)en to a Belgian. Plaintiff ha)ing a heart
ailment *as ad)ised b' his &h'sician to ta:e onl' a first class seat, but he
*as com&elled to ta:e an econom' seat *ith a &romise of the Fufthansa DD
that &laintiff *ill be transferred to first class in Cairo and on*ard to
Cong:ong. U&on arri)al in Cairo, the &romise *as not com&lied *ith.
3imilar false re&resentations *ere made to him at Eharnan and Calcutta.
Plaintiff sued the airlines for damages. 2C a*arded &laintiff moral and
e7em&lar' damages.
Celd= It is the o&inion of the 3C that moral damages should be raised from
P 1??,??? to P 11?,??? and e7em&lar' damages be increased from P
;?,??? to P 1??,???. It is our considered )ie* that *hen it comes to
contracts of common carriage, inattention and lac: of care on the &art of the
CC resulting in the failure of the &assenger to be accommodated in the
class contracted for amounts to bad faith or fraud *hich entitles the
&assenger to an a*ard of moral damages in accordance *ith Art. ---?. In
this case, the breach a&&ears to be of gra)er nature, since the &reference
gi)en to the Belgian &assenger o)er &laintiff *as done *illfull' and in
*anton disregard of &laintiffHs rights and his dignit' as a human being and as
a <ili&ino, *ho ma' not be discriminated against *ith im&unit'. 3ince both
Alitalia and Fufthansa are members of IA2A and are agents of each other,
the' are bound b' the mista:es committed b' a member such as the
mista:e of the Alitalia DD to inform >rtigas that he could tra)el first class
instead of onl' being *aitlisted. 2he a*ard of higher damages is Bustified b'
the aggra)ation of the situation *hen the Fufthansa DD at Rome falsel'
noted on >rtigasH tic:et that he *as tra)eling econom' from Rome to CL
and *hich *as re&eated four times. Also ta:en into consideration *as the
heart condition of >rtigas *hich ga)e him added a&&rehension about
tra)eling econom' against the ad)ice of the doctor.
0. D7em&lar'
Art. DDD5. E(e#%ary or correcti-e 'aa&es are i#ose', $y
)ay of e(a#%e or correction for the #!$%ic &oo', in a''ition to the
ora%, te#erate, %i0!i'ate' or co#ensatory 'aa&es.
Art. DD;D. In contracts an' 0!asi contracts, the co!rt ay
a)ar' e(e#%ary 'aa&es if the 'efen'ant acte' in a )anton,
fra!'!%ent, rec2%ess, o##ressi-e, or a%e-o%ent anner.
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TRANSPORTATION AND MARITIME LAW
Art. DD;;. E(e#%ary 'aa&es cannot $e reco-ere' as a
atter of ri&ht@ the co!rt )i%% 'eci'e )hether or not they sho!%' $e
a'.!'icate'.
@ecenas )s CA, 1!? 3CRA !;
<= @I. 2acloban Cit' #2C$ left Amlan, 4egros >riental bound for
@anila. @I. Eon ,uan #E,$ left @anila bound for Bacolod. 2C had )isual
contact of E, *hen the' *ere about 1 miles a&art and as a &recaution, it
*as steered to its left. E, had radar contact of 2C *hen the' *ere four
miles a&art and follo*ing R1! of the International Rules of the Road *hen a
collision is &ossible, it *as steered to its right. At 1?=;? P@, both collided
as a result of *hich E, san: 11 minutes later and hundreds of its
&assengers &erished.
Petitioners, children of the )ictims, filed a case against 4egros
4a)igation, o*ner of E,, based on +uasi6delict. 2he R2C a*arded
damages of P 0??,??? for the death of &laintiffsH &arents and P 11,??? for
attorne'Hs fees. 2he CA modified the a*ard to P 1??,??? as actual and
com&ensator' damages.
Celd= Before going into the issue, the 3C ruled that the action *hich *as
based on +uasi6delict should be a&&ro&riatel' regarded as grounded on
contract, and indulged in the &resum&tion of negligence on the &art of the
CC although its DDs ma' ha)e acted be'ond the sco&e of their authorit' or
e)en in )iolation of its instructions. Its liabilit' *ould include moral damages
#Art. 1"/0$ and e7em&lar' damages if the defendants acted rec:lessl' or
*ith gross negligence #Art. -;;-$.
2here is no +uestion that the defendants are negligent. As found
b' the C<I, E, steered to the right *hile 2C continued its course to the left.
2here can be no e7cuse for them not to realiAe that *ith such maneu)ers,
the' *ill collide. 2he' e7ecuted maneu)ers inade+uatel' and too late, to
a)oid collision. 2he +uestion is %>4 the defendants *ere rec:lessl' or
grossl' negligent. 2he 3C ruled in the affirmati)e.
As for the ca&tain, he *as &la'ing mahBong before and u& to the
time of the collision. %>4 he *as then off6dut' is immaterialG there is, both
realisticall' s&ea:ing and in contem&lation of la*, no such thing as off6dut'
hours for the master of a )essel at sea that is a CC u&on *hom the la*
im&oses the dut' of e7traordinar' diligence. %hen the collision occurred,
the ca&tain failed to su&er)ise his cre* in the &rocess of abandoning the
shi& and he failed to a)ail of measures to &re)ent the too ra&id sin:ing of his
)essel, thus aggra)ating the casualties.
As for 4egros A)iation, in &ermitting, or in failing to disco)er and
correct the regularit' of the ca&tainHs mahBong sessions *hile E, *as at
sea, it must be deemed grossl' negligent. It also sailed *ith an o)erload
#1,??0 &assengers and cre*members$.
As for the failure of 2C to follo* R1! b' turning right instead of
left, the 3C ruled that it is not a&&licable and *ill not relie)e E, from
res&onsibilit' if the collision could ha)e been a)oided b' &ro&er care and
s:ill on her &art or e)en b' a de&arture from the rules. E, is still at fault
*hen, u&on seeing 2C turn to its left, it still turned to its right resulting in the
collision.
2he 3C a*arded moral damages of P ;?",??? and e7em&lar'
damages of P ;?",??? and attorne'Hs fees of P 11,??? together *ith
actual and com&ensator' damages for *rongful death of P 1-/,??? and P
/?,??? for a total of P !11,???. Although the &etitioners onl' as:ed for P
0??,??? a*ard of damages granted b' the C<I, the 3C increased it to P
!??,??? follo*ing the doctrine that the 3C must consider and resol)e all
issues *hich must be decided in order to render substantial Bustice to the
&arties, including issues not e7&licitl' raised b' the &arties affected.
In discussing the rule of exemplary damages in la*, the 3C loo:s
to it as an instrument to serve the ends of law and public policy by
reshaping socially deleterious behaviors, specifically, in the case, to compel
to control their ..s, to tame their rec'less instincts, and to force them
to ta'e ade!uate care of human beings and their property.
1. 4ominal, 2em&erate and Fi+uidated
Art. DDD1. Noina% 'aa&es are a'.!'icate' in or'er that a
ri&ht of the #%aintiff, )hich has $een -io%ate' or in-a'e' $y the
'efen'ant, ay $e -in'icate' or reco&ni"e', an' not for the #!r#ose
of in'enifyin& the #%aintiff for any %oss s!ffere' $y hi.
Art. DDD?. Te#erate or o'erate 'aa&es, )hich are ore
than noina% $!t %ess than co#ensatory 'aa&es, ay $e reco-ere'
)hen the co!rt fin's that soe #ec!niary %oss has $een s!ffere' $!t
its ao!nt cannot, fro the nat!re of the case, $e #ro-e' )ith
certainty.
Art. DDD*. Li0!i'ate' 'aa&es are those a&ree' !#on $y the
#arties to a contract, to $e #ai' in case of $reach thereof.
Art. 11B1. The res#onsi$i%ity of a coon carrier for the
safety of #assen&ers as re0!ire' in Arts. 11;; an' 11BB cannot $e
'is#ense' )ith or %essene' $y sti#!%ation, $y the #ostin& of notices,
$y stateents on tic2ets, or other)ise.
Alitalia )s IAC, 1- 3CRA 1?
<= Er. <eli&a Pablo, an associate &rofessor of UP and a research
grantee of the Phil. Atomic Dnerg' Association *as in)ited to ta:e &art at a
meeting s&onsored b' the United 4ations in Is&ra, Ital'. 3he acce&ted the
in)itation and *as then scheduled b' the organiAers to read her &a&er. 3he
*as to be the -nd s&ea:er on the first da' of the meeting. 3he then boo:ed
&assage *ith Alitalia. 3he arri)ed in @ilan on the da' before the meeting in
accordance *ith the itinerar' set for her b' Alitalia but her luggage *as
dela'ed as it *as in one of the succeeding flights from Rome to @ilan.
Co*e)er, the other flights from Rome did not ha)e her baggage on board.
Cer luggage consisted of - suitcases66 one for her clothing and &ersonal
items and the other for her scientific &a&ers, slides and other research
material.
<eeling des&erate, she *ent to Rome to tr' to locate her bags.
3he in+uired about her suitcases in the international and domestic air&orts
and filled out the forms re+uired b' Alitalia for &eo&le in her &redicament.
Co*e)er, her baggage could not be found. Eiscouraged, she returned to
@anila *ithout attending the meeting in Is&ra, Ital'.
In @anila, she demanded that Alitalia ma:e re&aration for
damages suffered b' her. Alitalia offered her free airline tic:ets *hich she
reBected *hile instituting this action. Cer bags *ere located and for*arded
to Is&ra but onl' on the da' after her scheduled a&&earance. As she *as no
longer there to acce&t deli)er', her bags *ere not actuall' returned to her
until after 11 months. 2he C<I a*arded nominal damages of P -?,??? and
attorne'Hs fees of P 1,??? &lus costs of the suit. 2he IAC increased the
a*ard of nominal damages to P 0?,???. 2he increase *as Bustified as
follo*s66 considering the negligence committed b' defendant, the amount of
P-?,??? under &resent inflationar' conditions as a*arded to &laintiff as
nominal damages is too little to ma:e u& for the &laintiffHs frustration and
disa&&ointment in not being able to a&&ear at said conference, and for the
embarrassment and humiliation she suffered from the academic communit'
for failure to carr' out an official mission for *hich she *as singled out b'
the facult' to re&resent her institution and the countr'.
Alitalia a&&ealed on the follo*ing grounds= #1$ 2hat the %arsa*
Con)ention should ha)e been a&&lied to limit AlitaliaHs liabilit'G and #-$ 2hat
there is no *arrant in fact or in la* for the a*ard of nominal damages and
attorne'Hs fees.
Celd= Under the %arsa* Con)ention, an air carrier is made liable for
damages for= #1$ 2he death, *ounding or other bodil' inBur' of a &assenger
if the accident causing it too: &lace on board the aircraft or in the course of
its o&erations of embar:ing or disembar:ingG #-$
2he destruction, or loss of damage to, an' registered luggage or goods, if
the occurrence causing it too: &lace during the carriage b' airG and #;$
Eela' in the trans&ortation b' air of &assengers, luggage or goods. 2he
Con)ention also limits the liabilit' of the carriers for each &assenger to
-1?,??? francs and for registered baggage and cargo to -1? francs &er :g
unless the &assenger has declared a higher rate and has &aid additional
charges. 2he %arsa* Con)ention, ho*e)er, denies to the carrier a)ailment
of the &ro)isions *hich e7clude or limit his liabilit', if the damage is caused
b' his *ilful misconduct or b' such default on his &art as is considered to be
e+ui)alent to *ilful misconduct or if the damage is similarl' caused b' an'
agent of the carrier acting *ithin the sco&e of his em&lo'ment. The
onvention does not thus operate as an exclusive enumeration of the
instances of an airline)s liability, or as an absolute limit of the extent of that
liability. 3uch &ro&osition is not borne out b' the language of the
Con)ention. 2he Con)ention should be deemed a liabilit' onl' in those
cases *here the cause of the death or inBur' to &erson, or destruction, loss
or damage to &ro&ert' or dela' in its trans&ort is not attributable to or
attended b' an' *ilful misconduct, bad faith, rec:lessness, or other*ise
im&ro&er conduct. 2he Con)ention does not regulate or e7clude liabilit' for
other breaches of contract b' the carrier. >ther*ise, an air carrier *ould be
e7em&t from an' liabilit' for damages in the e)ent of its absolute refusal, in
bad faith, to com&l' *ith a contract of carriage. The &arsaw onvention
has invariably been held inapplicable, or as not restrictive of the carrier)s
liability, where there was satisfactory evidence of malice or bad faith
attributable to its officers and employees.
In the case at bar, no bad faith or other*ise im&ro&er conduct
ma' be ascribed to the DDs of Alitalia. Er. PabloHs luggage *as e)entuall'
returned belatedl', but *ithout a&&reciable damage. 2he fact is,
PAGE 32
TRANSPORTATION AND MARITIME LAW
ne)ertheless, that some s&ecial s&ecies of inBur' *as caused to her
because Alitalia mis&laced her baggage and failed to deli)er it to her at the
time a&&ointed 66 a breach of its contract of carriage 66 *ith the result that
she *as unable to read her &a&er that she had &ainsta:ingl' labored o)er.
2he o&&ortunit' to claim honor or distinction for herself, for UP and for the
countr', *as irretrie)abl' lost to her. 3he also under*ent &rofound distress
and an7iet', *hich graduall' turned into &anic and des&air, *hen she
learned that her suitcases *ere missing.
2he com&ensation for the inBur' suffered b' Er. Pablo cannot
under the circumstances be restricted to that &rescribed b' the %arsa*
Con)ention for dela' in the trans&ort of baggage. 3he is not entitled to be
com&ensated for loss or damage to her luggage since the' *ere ultimatel'
deli)ered to her. 3he is ho*e)er entitled to nominal damages, *hich is
adBudicated in order that a right of the &laintiff, *hich has been )iolated or
in)aded b' the defendant, ma' be )indicated and recogniAed, and not for
the &ur&ose of indemnif'ing the &laintiff for an' loss suffered.
As to the argument that she failed to include a s&ecific claim for
nominal damages in her com&laint, it suffices that her general &ra'er
includes 5such other and further Bust and e+uitable relief in the &remises.5
Also absent an' claim for actual or com&ensator' damages #she as:ed for
moral and e7em&lar' damages and attorne'Hs fees$, and *ith &roof of Er.
PabloHs right being )iolated, the issue of nominal damages is raised.
2he a*ard of P 1,??? for attorne'Hs fees is reasonable. 2he la*
authoriAes reco)er' of attorne'Hs fees *here the defendantHs act or omission
has com&elled the &laintiff to litigate *ith third &erson or to incur e7&enses
to &rotect his interest, or *here the court deems it Bust and e+uitable.
3aludo )s CA -?" 3CRA 0!
<= After the death of &laintiffHs mother Cris&ina Galdo, 3aludo in
Chicago, Pomiers:i and 3on <uneral Come, made the necessar'
&re&arations and arrangements for the shi&ment of the bod' from Chicago
to the Phili&&ines. 2he' had the bod' embalmed and secured a &ermit from
the Phili&&ine .ice Consul in Chicago. 2he Phil. .ice Consul sealed the
shi&&ing case on >ct. -/,1"/. >n the same date, Pomiers:i brought the
remains to the Continental @ortuar' Air 3er)ice #C@A3$ *hich made the
necessar' arrangements such as flights, transfers,etc. C@A3 is a national
ser)ice used b' underta:ers *hich furnishes the air &ouch in *hich the
cas:et is enclosed in and the' see to it that the remains are ta:en to the
&ro&er air freigh terminal. C@A3 boo:ed the shi&ment *ith PAF, through its
agent Air Care International, *ith Pomiers:i as shi&&er and @aria 3aludo as
consignee. PAF Air*a' Bill *as issued for the route from Chicago to 3< on
board 2%A <light 1;1 of >ct. -", 1"/, and from 3< to @anila, on board
PAF <light 1?" of >ct. -", 1"/, and from @anila to Cebu on board PAF
<light 10 of >ct. -, 1"/.
@aria 3aludo and 3aturnino 3aludo, children of the deceased
*ere boo:ed *ith United Airlines from Chicago to California and *ith PAF
from California to @anila. %hen she learned of her motherHs arrangements,
she changed reser)ations from UA to 2%A. 3he *atched from the loo:6out
area but she sa* no bod' being brought on the flight. 3he reluctantl' too:
the 2%A flight *ith her cousinHs assurance to loo: into the matter. U&on
arri)al in 3<, she *ent to the 2%A counter to in+uire about her motherHs
remains but she *as told that the' did not :no* an'thing about it. 3he then
called Pomiers:i *ho then called C@A3 *hich in a matter of 1? minutes told
him that the remains had been s*itched *ith another bod' and had been
sent to @e7ico. Based on the facts, there *as a mi76u& in Chicago Air&ort
bet*een the t*o bodies. Arrangements *ere made to send the bod' to
California through 2e7as. >n >ctober -!, 1"/, the remains arri)ed in 3<
and *as recei)ed b' PAF at "=01 &.m. 2he shi&ment *as immediatel'
loaded on PAF flight for @anila that same e)ening and arri)ed in @anila on
>ctober ;?, 1"/, a da' after its e7&ected arri)al on >ctober -, 1"/.
Plaintiffs then filed a case against PAF and 2%A before the C<I
of Fe'te, &ra'ing for the a*ard of actual damages of P 1?,???, moral
damages of P 1,???,???, e7em&lar' damages and attorne'Hs fees and costs
of suit. 2he C<I and CA absol)ed the t*o airline com&anies. Plaintiffs then
a&&ealed the decision on the ff. grounds= #1$ 2hat the dela' in the deli)er' of
the remains *as due to the fault of the airlines, #-$ 2he one da' dela' in the
deli)er' constitutes breach of contract as *ould entitle them to damages,
#;$ 2hat damages are reco)erable b' &etitioners for the humiliating,
arrogant, and indifferent acts of the DDs of 2%A and PAF. 2he airlines
obBected on the ground that this &etition onl' raises factual +uestions. 3ince
it is &recisel' the soundness of the inferences or conclusions that ma' be
dra*n from the factual issues *hich are here being assailed, the issues
raised in the &etition indeed *arrant a second loo:.
Celd= #1$ Petitioners allege that &ri)ate res&ondents recei)ed the cas:eted
remains of &etitionerHs mother on >ct. -/, 1"/ as e)idenced b' the
issuance of the PAF Air*a' Bill. <rom said date, &ri)ate res&ondents *ere
charged *ith the res&onsibilit' to e7ercise e7traordinar' diligence so much
so that for the alleged s*itching of the cas:ets on >ct. -", 1"/, or one da'
after &ri)ate res&ondents recei)ed the cargo, the latter must necessaril' be
liable. Petitioners relied on the doctrine that the issuance of the bill of lading
carries the &resum&tion that the goods *ere deli)ered to the carrier issuing
the bill, for immediate shi&ment, and it is no*here +uestioned that a bill of
lading is prima facie e)idence of the recei&t of the goods b' the carrier. A
bill of lading is a *ritten ac:no*ledgment of the recei&t of the goods and an
agreement to trans&ort and deli)er them at a s&ecified &lace to a &erson
named or on his order. A bill of lading is a recei&t as to the +uantit' and
descri&tion of the goods shi&&ed and a contract to trans&ort the goods to
the consignee or other &erson therein designated, on the terms s&ecified in
such instrument.
3C= An air*a' bill esto&s the carrier from den'ing recei&t of
goods. Co*e)er, as bet*een the shi&&er and the carrier, *hen no goods
ha)e been deli)ered for shi&ment no recitals in the bill can esto& the carrier
from sho*ing the true facts. %e must therefore allo* the airline com&anies
to e7&lain, *h', des&ite the issuance of the air*a' bill and the date thereof,
the' den' ha)ing recei)ed the remains of 3aludo on >ct. -/, 1"/.
As found b' the CA, the air*a' bill *as issued, not as e)idence
of recei&t of deli)er' but merel' as confirmation for the boo:ing made for the
3<6@anila flight scheduled on >ctober -", 1"/. It *as not until >ct. -!
that PAF recei)ed &h'sical deli)er' of the bod' at 3<. 2he e7traordinar'
res&onsibilit' of CC begins from the time the goods are deli)ered to the
carrier. 2his res&onsibilit' remains in force e)en *hen the' are tem&oraril'
unloaded or stored in transit, unless the shi&&er e7ercises the right of
stoppage in transitu, and terminates on' after the la&se of a reasonable time
for the acce&tance of the goods b' the consignee or other &erson entitled to
recei)e them. <or such dut' to commence, there must in fact ha)e been
deli)er' of the cargo subBect of the contract of carriage. >nl' *hen such
fact of deli)er' has been une+ui)ocall' esablished can the re+t. of
e7traordinar' res&onsibilit' arise.
As found b' the CA, the bod' *as reall' recei)ed b' PAF on >ct.
-!, 1"/ and it *as from such date that it became res&onsible for the
agreed cargo under the air*a' bill. Conse+uentl', for the s*itching of
cas:ets &rior thereto *hich *as not caused b' them and subse+uent e)ents
caused thereb', PAF cannot be held liable.
#-$ Petitioners allege that e)en assuming C@A3 *as at fault, PAF *ould still
be liable because *hoe)er brought the cargo to the air&ort or loaded it on
the &lane did so as agent of PAF.
3C= 2his contention is *ithout merit. %hen the cargo *as
recei)ed from C@A3, Air Care Intl, PAFHs agent and 2%A had no *a' of
determining its actual contents, since the cas:et *as hermeticall' sealed b'
the Phili&&ine .ice6Consul. 2he' had to rel' on the information gi)en b'
C@A3. 4o amount of ins&ection b' the airlines could ha)e guarded against
the s*itching that had ta:en &lace. 2he' had no authorit' to unseal and
o&en the cas:et. It is the right of the carrier to re+uire good faith on the &art
of those &ersons *ho deli)er goods to be carried b' it. In the absence of
more definite information, the carrier has the right to acce&t shi&&erHs mar:s
as to the contents of the &ac:age offered for trans&ortation and is not bound
to in+uire &articularl' about them. It can safel' be said that a CC is entitled
to fair re&resentation of the nature and )alue of the goods to be carried, *ith
the concomitant right to rel' thereon, and that a carrier has no obligation to
in+uire into the correctness or sufficienc' of such information. 2he
conse+uent dut' to conduct an ins&ection arises in the e)ent that there
should be reason to doubt the )eracit' of such re&resentations.
In this case, &ri)ate res&ondents had no reason to doubt the truth
of the shi&&erHs re&resentations. 2he air*a' bill *as issued on the basis of
such re&resentations.
4either can the' be held accountable on the basis of &etitionerHs
theor' that *hoe)er brought the cargo to the air&ort or loaded it on the &lane
did so as an agent of &ri)ate res&ondents, so that e)en if C@A3 *as indeed
at fault, the liabilit' *ould be attributed to the airlines. C@A3 *as not an
agent of &ri)ate res&ondents. It *as hired to handle all the necessar'
shi&&ing arrangements for the trans&ortation of the remains. C@A3 ma' be
classified as a for*arder, *hich is regarded as the agent of the shi&&er
#Pomiers:i$ and not of the crrier. It merel' contracts for the trans&ortation of
goods b' carriers and has no interest in the freight but recei)es
com&ensation from the shi&&er as his agent.
2he facts of the case *ould &oint to C@A3 as the cul&rit. In fact,
e)en the &etitioners *rote C@A3 entertaining serious doubts as to *hether
the' *ere res&onsible for the mi76u&. But the court cannot rule on the
&ossible liabilit' of C@A3 as such is not at issue in this case and there has
not been con)incing e)idence on the matter.
#;$ Petitioners contended that 2%A b' agreeing to trans&ort the remains, it
made itself a &art' to the contract of carriage nad *as therefore bound b'
the air*a' bill. %hen 2%A shi&&ed the remains ten hours earlier than
scheduled, it allegedl' )iolated the terms of the air*a' bill *hich
com&ounded, if not directl' caused, the s*itching of the cas:ets. 2he DDs
PAGE 33
TRANSPORTATION AND MARITIME LAW
of 2%A &resumabl' caused the mi76u& b' loading the *rong cas:et on the
&lane. 2%A must be &resumed negligent unless such is rebutted. 2%A
contends that it faithfull' com&lied *ith the obligations under the air*a' bill.
3aid faithful com&liance *as not affected b' the fact that the remains *ere
shi&&ed on an earlier flight as there *as no fi7ed time for com&letion of
carriage sti&ulated on. 2%A did not underta:e to carr' the cargo aboard an'
s&ecified aircraft, in )ie* of the condition on the bac: of the air*a' bill,
*hich &ro)ides that 5 777 no time is fi7ed for the com&letion of the carriage,
777 and that Carrier ma' *ithout notice substitute alternate carriers or
aircrafts 777.5
3C = 2%AHs contention is tenable. 2%A can use substitute
aircraft, e)en *ithout notice and *ithout the assum&tion of an' obligation
*hatsoe)er to carr' the goods on an' s&ecified aircraft. 2his is clearl'
sanctioned b' the contract of carriage. %hen a CC underta:es to con)e'
goods, the la* im&lies a contract that the' shall be deli)ered at destination
*ithin a reasonable time, in the absence of an' agreement as to the time of
deli)er'. In case at bar, no s&ecial contract for &rom&t deli)er' *as entered
into b' the &arties.
Condition 4o. 1 is binding on the &laintiff e)en if it is &rinted at
the bac: of the air*a' bill. 2his is in the nature of a contract of adhesion.
Co*e)er, such condition onl' ser)es to insulate the carrier from liabilit' in
those instances *hen the changes in routes, flights and schedules are
clearl' Bustified b' the &eculiar circumstances of a &articular cae, or b'
general trans&ortation &ractices, customs and usages, or b' contingencies,
emergencies in a)iation, such as *eather turbulence, mechanical failure,
re+ts. of national securit' and the li:e. In this case, the dela' in the
deli)er' of the remains cannot be attributed to the fault, negligence or
malice of &ri)ate res&ondents. %hen 2%A shi&&ed the remains on an
earlier flight, it did so in the e7ercise of sound discretion and *ith
reasonable &rudence 66 the' *anted to assure that the shi&ment *ould be
recei)ed in 3< in sufficient time for transfer to PAF. 2%A :ne* of the
urgenc' of the shi&ment due to the notation on the air*a' bill = 5777 Please
return bag first a)ailable flight to 3<>.5
#0$ Petitioners alleged that &ri)ate res&ondents are liable for tort on account
of humiliating, arrogant and indifferent acts of their officers and &ersonnel.
2he' contended that there *as no reason for the &ersonnel to disclaim
:no*ledge of the arri)al or *hereabouts of the bod' other than their sheer
arrogance, indifference and e7treme insensiti)it' to their feelings.
3C= It affirmed the CAHs findings that 2%A DDs did not deal *ith
&etitioners in a grossl' humiliating, arrogant or indifferent manner as to
amount to B< or malice. It must be &ointed out that the lamentable
actuations of 2%AHs DDs lea)e much to be desired, &articularl' so gi)en the
grief of &etitioners, their tension and an7iet' *rought b' the confusion and
the fear about *here their motherHs remains *ere. Airline com&anies are
sternl' admonished to strictl' re+uire their &ersonnel to be more
accommodating to &assengers and the general &ublic.
Petitioners agoniAed for 1 hours unattended to and *ithout an'
assurance from the DDs of 2%A. Common sense should ha)e dictated that
the' e7ert a little e7tra effort in ma:ing more e7tensi)e in+uir', b'
themsel)es or through their su&eriors, rather than Bust shrug off the
&romblem *ith a callous and uncaring remar: that the' had no :no*ledge
about it.
2he foregoing obser)ations do not a&&ear to be a&&licable to PAl
and its DDs.
#1$ In the absence of strong and &ositi)e e)idence of fraud, malice or bad
faith, moral damages cannot be a*arded. 4either can e7em&lar' damages
nor attorne'Hs fees, in the absence of &roof that defendants acted *ith
malice, fraud or B<. 2he censurable conduct of 2%AHs DDs cannot be said
to ha)e a&&ro7imated the dimensions of fraud, malice or B<. 4onetheless,
the facts sho* that &etitionersH right to be treated *ith due courtes' in
accordance *ith the degree of diligence re+uired b' la* to be e7ercised b'
e)er' common carrier *as )iolated b' 2%A and this entitles them, at least,
to nominal damages from 2%A alone. Arts. ---1 and ---- of the Ci)il Code
ma:es it clear that nominal damages are not intended for indemnification of
loss suffered but for the vindication or recognition of a right violated or
invaded. 2he' are reco)erable *here some inBur' has been done but the
amount of *hich the e)idence fails to sho*, the assessment of damages
being left to the discretion of the court accdg. to the circumstances of the
case. 4ominal damages of P 0?,??? to be &aid b' 2%A *as a*arded in
fa)or of &etitioners as a reasonable amount in the circumstances.

/. Attorne'Hs <ees and Interest
Art. DD+3. In the a$sence of sti#!%ation, attorneyGs fees an'
e(#enses of %iti&ation, other than .!'icia% costs, cannot $e reco-ere',
e(ce#t9
<1= When e(e#%ary 'aa&es are a)ar'e'@
<D= When the 'efen'antGs act or oission has co#e%%e' the
#%aintiff to %iti&ate )ith thir' #ersons or to inc!r e(#enses to #rotect
his interest@
<;= In criina% cases of a%icio!s #rosec!tion a&ainst the
#%aintiff@
<?= In case of a c%ear%y !nfo!n'e' ci-i% action or #rocee'in&
a&ainst the #%aintiff@
<B= Where the 'efen'ant acte' in &ross an' e-i'ent FH in
ref!sin& to satisfy the #%aintiffGs #%ain%y -a%i', .!st an' 'ean'a$%e
c%ai@
<*= In actions for %e&a% s!##ort@
<1= In actions for the reco-ery of )a&es or ho!seho%'
he%#ers, %a$oreres an' s2i%%e' )or2ers@
<3= In actions for in'enity !n'er )or2enGs co#ensation
an' e#%oyerGs %ia$i%ity %a)s@
<5= In a se#arate ci-i% action to reco-er ci-i% %ia$i%ity arisin&
fro a crie@
<1+= When at %east 'o!$%e .!'icia% costs are a)ar'e'@
<11= In any other cases )here the co!rt 'ees it .!st an'
e0!ita$%e that attorneyGs fees an' e(#enses of %iti&ation sho!%' $e
reco-ere'.
In a%% cases, the attorneyGs fees an' e(#enses of %iti&ation
!st $e reasona$%e.
Art. DD1+. Interest ay, in the 'iscretion of the co!rt, $e
a%%o)e' !#on 'aa&es a)ar'e' for $reach of contract.
0 Agba'ani=
Daa&es arisin& fro 'eath@ factors to $e consi'ere'
1. number of 'ears on the basis of *hich the damages shall be
com&uted
-. the rate at *hich the losses sustained should be fi7ed. In the
determination of the losses or damages sustained b' de&endents and heirs
of the deceased, said damages consist not of the full amount of his
earnings, but of the su&&ort the' recei)ed or *ould ha)e recei)ed from him
had he not died in conse+uence of the negligence of defendant.
In fi7ing the amount of su&&ort, onl' net earnings are to be
considered66 total earnings less e7&enses necessar' in the creation of such
earnings less li)ing and incidental e7&enses
Daa&es reco-era$%e )hen 'eath occ!rs '!e to coission of
crie.66 #1$ indemnit' for the death of )ictim #P 1?2$G #-$ indemnit' for loss
of earning ca&acit' of the deceasedG #;$ moral damagesG #0$ e7em&lar'
damagesG #1$ attorne'Hs fees and e7&enses of litigationG and #/$ interest.
Indemnit' arising from the fact of death is fi7ed *hereas the others are still
subBect to the determination of the court based on e)idence &resentedG
indemnit' for death is distinct and se&arate from the other forms of
indemnit'
/oon carrier not %ia$%e for ora% 'aa&es to #assen&er in.!re'
'!e to ne&%i&ence of 'ri-er.66 A CCHs bad faith is not to be lightl' inferred
from a mere finding that the contract *as breached through negligence of
the CCHs em&lo'ees #<ores )s @iranda$
E(tent of %ia$i%ity of air carrier for 'eath of #assen&er9
#1$ *here there *as no satisfactor' e7&lanation on the &art of PAF as to
ho* and *h' the accident occurred, the &resum&tion is that it *as at fault,
under Art. 1"1/
#-$ liabilit' for lost earnings are the deceased &assengerHs net
earnings during his e7&ected length of life based on acce&ted mortalit'
tables #com&ensator' damages$
#;$ PAF is not liable for e7em&lar' damages *here it *as not
&ro)en that it acted in a *anton, fraudulent, rec:less, o&&ressi)e or
male)olent manner
8Ea)ila )s PAF9
Nat!re of %ia$i%ity of air carrier to its #assen&ers9
8Pulueta )s Pan Am9
<= <ili&ino &assenger *ho *ent to relie)e himself *as berated b'
the ca&tain for coming bac: late to the &lane and *as called a mon:e'.
PAGE 34
TRANSPORTATION AND MARITIME LAW
Celd= A &assenger is entitled to courteous treatment from the carrier and its
DDs and failure of the CC to com&l' *ith this obligation *ill entitle the
&assenger to damages.
2he relation bet*een CC and &assenger in)ol)es s&ecial and
&eculiar obligations and duties, differing in :ind and degree, from those of
almost e)er' legal or contractual relation. >n account of the &eculiar
situation of the &arties, the la* im&lies a &romise and im&oses u&on the CC
the corres&onding dut' of &rotection and courteous treatment. 2herefore,
the CC is under the absolute dut' of &rotecting his &assengers from assault
or insult b' himself or his ser)ants.
A contract to trans&ort &assengers is +uite different in :ind and
degree from an' other contractual relation. And this, because of the relation
*hich an air carrier sustains *ith the &ublic. Its business is mainl' *ith the
tra)eling &ublic. It in)ites &eo&le to a)ail of the comforts and ad)antages it
offers. 2he contract of air carriage, therefore, generates a relation attended
*ith a &ublic dut'. 4eglect or malfeasance of the CCHs em&lo'ees naturall'
could gi)e ground for an action for damages.
Passengers do not contract merel' for trans&ortation. 2he' ha)e
a right to be treated b' the CCHs DDs *ith :indness, res&ect, courtes' and
due consideration. 2he' are entitled to be &rotected against &ersonal
misconduct, inBurious language, indignities and abuses from such
em&lo'ees. 3o it is, that an' rude or discourteous conduct on the &art of
DDs to*ards a &assenger gi)es the latter an action for damages against the
CC.
Daa&es ca!se' $y // on thir' #ersons.66 4egligence refers to the
failure to obser)e for the &rotection of the interests of another &erson that
degree of care, &recaution, and )igilance *hich the circumstances Bustif'
demand, *hereb' such other &erson suffers inBur'
/oon carrier is %ia$%e on%y for 'aa&es that are nat!ra% an'
#ro$a$%e conse0!ence of $reach of contract.66 %here the CC is guilt' of
a breach of contract, but acted in G<, it is liable onl' for the natural and
&robable conse+uences of the breach and *hich the &arties had foreseen or
could ha)e reasonabl' foreseen at the time the obligation *as constituted
#includes medical, hos&ital e7&enses$
Act!a% 'aa&es.66 #1$ lost income.66 includes income to be earned b' the
inBured &assenger or deceased &assenger had he finished his course #could
ha)e been foreseen$
#-$ sum being carried b' the deceased &assenger *hich *as lost
#;$ funeral e7&enses
#0$ attorne'Hs fees
#1$ loss of merchandise carried b' the deceased
#/$ loss of baggage and &ersonal belongings
E(ce#tion to r!%e that // is not %ia$%e for ora% 'aa&es in $reach of
contract9
#1$ *here the misha& results in death of the &assenger
#-$ *here it is &ro)ed that the CC *as guilt' of fraud or B<, e)en
if death does not result D7. *here because of the B< of the CC,
the &assenger suffered social humiliation, *ounded feelings, serious an7iet'
and mental anguish
Under --?/, the heirs of the deceased &assenger ma' demand
moral damages in an amount commensurate *ith the mental anguish
suffered b' them
777
In a case *here the &assenger suffers &h'sical inBuries because
of the CCHs inBuries, he cannot reco)er moral damages for such breach of
contract since it does not fall under an' of the cases *here moral damages
are reco)erable under Art. --1
777
In determining the amount of moral damages, the 2C ma'
consider the nature and e7tent of the inBuries and the suffering occasioned
b' them and the duration thereof. 2he a&&ellate court should not interfere
unless such is &al&abl' and scandalousl' e7cessi)e so as to indicate that it
*as the result of &assion, &reBudice or corru&tion on the &art of the 2C
B< Bustif'ing moral damages must be in the securing, e7ecution
and enforcement of contract of carriage. B< cannot be im&uted but must be
alleged and &ro)edG mere carelessness of the CCHs dri)er does not &er se
constitute or Bustif' an inference of malice or B< on the &art of the CC
777
CC is subsidiaril' liable for moral damages in actions ex delicto
or *here the action is based u&on its liabilit' arising from a crime
777
CC is not ordinaril' liable for e7em&lar' or correcti)e damages
based u&on the *rongful act of its DD or dri)er *here it did not ha)e
an'thing to do *ith the *rongful act or had not &re)iousl' authoriAed or
subse+uentl' ratified such act #Art. -;;-$ 2his cannot be &resumed but
must be &ro)en b' e)idenceG e7em&lar' damages cannot be reco)ered as a
matter of right
4ominal and e7em&lar' damages a*arded for *illful breach of
contract committed through agent or DD
777
%here the CC has incurred in dela' in the deli)er' of the luggage
of the offended &art', but it had not acted in B< nor been guilt' of gross
negligence, the offended &art' is not entitled to moral nor e7em&lar'
damages but onl' to the limited amount &rinted in the &lane tic:et *here the
offended &art' had not declared a higher )alue nor &aid addtl. trans&o
charges
Lia$i%ity of air carriers for ora% an' e(e#%ary 'aa&es.66 8>rtigas )s
Fufthansa9 #1$ Under the &ool arrangement among different airlines of the
IA2A agreement of *hich Alitalia and Fufthansa are signatories, both airlines
are constituted as agents of each other in the issuing of tic:ets and other
matters &ertaining to their relations *ith those *ho *ould need their
ser)ices.
#-$ %hen it comes to contracts of common carriage, inattention
and lac: of care on the &art of the CC resulting in the failure of the
&assenger to be accommodated in the class contracted for amounts to B<
or fraud *hich entitles the &assenger to the a*ard of moral damages.
%here the &assengerHs seat *as gi)en to a *hite &assenger, there is *illful
breach gi)ing rise to an action for moral damages.
#;$ D7em&lar' damages *ere a*arded. Eefendant as an airline
should be made to &a' an amount that can reall' ser)e as a deterrent
against a seeming &attern of indifference and unconcern, and discrimination
for racial reasons, discernible in the treatment of air &assengers.
8PAF )s CA, 1?/ 3CRA ;19 2he dut' to e7ercise the utmost diligence on
the &art of the CC is for the safet' of &assengers as *ell as for the
members of the cre* or the com&lement o&erating the carrier. An'
omission, la&se or neglect thereof *ill certainl' result to the damage,
&reBudice, inBuries and e)en death to all aboard the &lane, &assengers, and
cre* members ali:e.
777
8LF@ )s CA9 A &ro)ision in &assage tic:et that carriage b' successi)e air
carriers is to be regarded as a single o&eration ma:es the tic:et6issuing
carrier liable for tortious conduct of other carriers
777
D7em&lar' damages ma' be a*arded *here the )ehicle in)ol)ed
in the accident o&erated under the :abit s'stem, *hich is a &ernicious
s'stem in )iolation of la* and *hich is in fraud of the tra)eling &ublic *hich
has a right to e7&ect that the holder of the certificate of con)enience be the
one to actuall' o&erate his trans&ort line.
777
CC is liable for nominal damages for its failure to bring
&assengers to their destination *hich is in )iolatin of their right as
&assengers.
777
2he CC is liable for the negligence of his dri)er in case of breach
of contract and cannot a)ail of the defense that he e7ercised due diligence
in the em&lo'ment of his dri)er. 2he action for breach of contract im&oses
on the CC a &resum&tion of liabilit' u&on mere &roof of inBur' to the
&assenger.
777
An action for damages against CC for breach of contract is
&rimar' and inde&endent and does not de&end u&on the &re)ious con)iction
of the dri)er or DD. Indemnification in a criminal &rosecution is distinct from
that a*arded as damages in a ci)il action.
>ther Princi&les =
2he offended &art' has the o&tion bet*een an action for
enforcement of ci)il liabilit' based on culpa criminal and an action for
reco)er' of damages based on culpa a!uiliana. Res&onsibilit' for
negligence under the Ci)il Code is entirel' se&arate from negligence under
the Penal Code.
An inde&endent ci)il action based on +uasi6delict against the DR6
o&erator of a negligent dri)er cannot be sus&ended b' the filing of a criminal
action against the dri)er.
Eeath of dri)er is not a hindrance to a se&arate +uasi6delict
action against the CC6em&lo'er
PAGE 35
TRANSPORTATION AND MARITIME LAW
2here is no error in a*arding ci)il damages against a dri)er in a
criminal case e)en *hen a se&arate ci)il action *as filed against the DR.
ulpa contractual and an act or omission &unishable b' la* are t*o distinct
sources of obligation.
III. /ODE OH /OMMER/E PROAISIONS ON OAERLAND
TRANSPORTATION
/OMMER/IAL /ONTRA/TS HOR TRANSPORTATION OAERLAND
A. 3co&e of >)erland 2rans&ortation
B. 4ature of Contract
Art. ;?5. A contract of trans#ortation $y %an' or )ater)ays
of any 2in' sha%% $e consi'ere' coercia%9
1. When it in-o%-es erchan'ise or any o$.ect of
coerce.
D. When, no atter )hat its o$.ect ay $e, the carrier is a
erchant or is c!stoari%y 7ha$it!a%%y8 en&a&e' in trans#ortation for
the #!$%ic.
Re0!isites for a contract of trans#ortation $y %an' or )ater to $e
coercia% 9
#1$ trans&ortation of merchandise is al*a's commercial
#-$ trans&ortation of &erson or ne*s is commercial onl' *hen the
CC is a merchant or is habituall' engaged in trans&ortation for the &ublic
J &rinci&al re+uirement = the CC is a merchant or is habituall'
engaged in trans&ortation for the &ublicG the obBect carried is of little
im&ortance
A contract of air trans&ortation ma' be regarded as commercial
since it is analogous to land and *ater trans&ortation. 2he reason for its
non6inclusion in the Code of Commerce *as that at the time of its
&romulgation, air trans&ortation on a commercial basis *as not 'et :no*n.
C. Dffect of Ci)il Code
Art. 11**. In a%% atters not re&!%ate' $y this /o'e, the
ri&hts an' o$%i&ations of coon carriers sha%% $e &o-erne' $y the
/o'e of /oerce an' $y s#ecia% %a)s. <Ne) /i-i% /o'e.=
Art. DD1+. The fo%%o)in& %a)s an' re&!%ations are here$y
re#ea%e'9
<D= The #ro-isions of the /o'e of /oerce &o-ernin&
sa%es, #artnershi#, a&ency, %oan, 'e#osit an' &!aranty@
<?= A%% %a)s, Acts, #arts of Acts, r!%es of co!rt, e(ec!ti-e
or'ers, an' a'inistrati-e re&!%ations )hich are inconsistent )ith this
/o'e. <I$i'.=
2here is no* no distinction bet*een a trans&ortation contract of a
CC under the Ci)il Code and a trans&ortation contract under the Code of
Commerce
2he 4e* Ci)il Code does not e7&ressl' re&eal the &ro)isions of
the Code of Commerce on o)erland trans&ortationG it ma:es such &ro)isions
su&&letor' to the &ro)isions of the Ci)il Code on CCs.
E. Contract of Carriage
1. Bill of Fading
#a$ Eefinition, 3ubBect @atter
Art. ;BD. The $i%%s of %a'in& or tic2ets in cases of trans6
#ortation of #assen&ers ay $e 'i-erse, one for #ersons an' another
for $a&&a&e@ $!t a%% of the sha%% $ear the nae of the carrier, the 'ate
of shi#ent, the #oint of 'e#art!re an' arri-a%, the cost, an' )ith
re&ar' to the $a&&a&e, the n!$er an' )ei&ht of the #ac2a&es, )ith
s!ch other stateents )hich ay $e necessary for their easy
i'entification.
A bill of lading ma' defined as a *ritten ac:no*ledgment of the
recei&t of goods and an agreement to trans&ort and to deli)er them at a
s&ecified &lace to a &erson named or on his order. It com&rehends all
methods of trans&ortation.
Nat!re 9 #1$ each bill is a contract in itself and the &arties are bound b' its
terms
#-$ a bill of lading is also a recei&t
#;$ it is also a s'mbol of the goods co)ered b' it
A bill of lading is also a document of title. A document of title is
an' document used in the ordinar' course of business in the sale or transfer
of goods, as &roof of the &ossession or control of goods, or authoriAing or
&ur&orting to authoriAe the &ossessor of the document to transfer or recei)e,
either b' indorsement or b' deli)er', goods re&resented b' such document.
#b$ <orm, Contents
Art. ;B+. The shi##er as )e%% as the carrier of erchan'ise
an' &oo's ay !t!a%%y 'ean' of each other the iss!ance of a $i%% of
%a'in& in )hich there sha%% $e state'9
1. The nae, s!rnae, an' 'oici%e of the shi##er.
D. The nae, s!rnae, an' 'oici%e of the carrier.
;. The nae, s!rnae, an' 'oici%e of the #erson to
)ho or to )hose or'er the &oo's are a''resse', or )hether they are
to $e 'e%i-ere' to the $earer of the sai' $i%%.
?. A 'escri#tion of the &oo's, statin& their &eneric char6
acter, their )ei&ht, an' the e(terna% ar2s or si&ns of the #ac2a&es
containin& the sae.
B. The cost of the trans#ortation.
*. The 'ate of )hich the shi#ent is a'e.
1. The #%ace of the 'e%i-ery to the carrier.
3. The #%ace an' tie at )hich the 'e%i-ery is to $e a'e
to the consi&nee.
5. The 'aa&es to $e #ai' $y the carrier in case of 'e%ay,
if any a&reeent is a'e on this #oint.
Art. ;B1. In trans#ortation a'e $y rai%roa's or other enter#rises
)hich are s!$.ect to sche'!%es or the tie fi(e' $y re&!%ations, it sha%%
$e s!fficient that the $i%%s of %a'in& or the 'ec%arations of shi#ent
f!rnishe' $y the shi##er refer, )ith res#ect to the rate, ters, an'
s#ecia% con'itions of the trans#ortation, to the sche'!%es an'
re&!%ations, the a##%ication of )hich he re0!ests@ an' sho!%' no
sche'!%e $e 'eterine', the carrier !st a##%y the rate of the
erchan'ise #ayin& the %o)est, )ith the con'itions inherent therein,
a%)ays inc%!'in& s!ch stateent or reference to the in the $i%% of
%a'in& )hich he 'e%i-ers to the shi##er.
@an' of the items re+uired in a bill of lading ma' be omitted *ith much
ad)antage to commerce, *hich aims to ha)e the greatest number of
transactions in the last &ossible time es&eciall' in cases *here there are
tariffs or regulations issued b' the carrier com&an'. In this case, the
circumstances relati)e to &rice, term and conditions of carriage ma' be
omitted and sim&le reference be made to the tariff and regulations under
*hich the trans&ortation is to be made. #Art. ;11$
2he form of the bill of lading is not material = if it contains an
ac:no*ledgment b' the carrier of the recei&t of goods for trans&ortation, it is
in legal effect, a bill of lading
A tic:et issued b' a carrier to a &assenger is not onl' a recei&t
for the fare &aid but is the contract bet*een the &assenger and the carrier,
of the &assengerHs right to ride in the CCHs )ehicle
/%asses of $i%%s of %a'in& 9
1. negotiable B%/ 6 *here it is stated that the goods *ill be
deli)ered to the bearer, or to the order of an' &erson named in such
document
-. non-negotiable B%/ 6 *here the goods are to be deli)ered to a
s&ecified &erson
;. clean B%/ 6 does not indicate an' defect in the goods
0. foul B%/ 6 indicates that the goods co)ered b' it are in bad
condition
1. spent B%/ 6 co)ers goods that ha)e alread' been deli)ered b'
the CC *ithout a surrender of a signed co&' of the BIFG the subse+uent
deli)er' of the s&ent BIF cannot gi)e to the bu'er of it an' actual control of
the goods, or an'thing *hich can fairl' be called deli)er'
/. through B%/ 6 issued b' the CC *ho is obliged to use the
facilities of other carriers as *ell as his o*n facilities for the &ur&ose of
trans&orting the goods from the cit' of the seller to the cit' of the bu'er,
*hich BIF is honored b' the subse+uent interested carriers *ho do not issue
their o*n ladings
PAGE 36
TRANSPORTATION AND MARITIME LAW
". on board B%/ 6 states that the goods ha)e been recei)ed on
board the )essels *hich is to carr' the goods
!. received for shipment B%/ 6 states that the goods ha)e been
recei)ed for shi&ment *ith or *Io s&ecif'ing the )essel b' *hich the goods
are to be shi&&edG issued *hen conditions are not normal and there is an
insufficienc' of shi&&ing s&ace
. custody B%/ 6 issued b' the CC to *hom the goods ha)e been
deli)ered for shi&ment but the steamer indicated in the BIF *hich is to carr'
the goods has not 'et reached the &ort *here the goods are held for
shi&ment
1?. port B%/ 6 issued b' the CC to *hom the goods ha)e been
deli)ered and the steamer indicated in the BIF b' *hich the goods are to be
shi&&ed is alread' in the &ort *here the goods are held for shi&ment
Ne&otiation of Fi%%s $y 'e%i-ery: $y in'orseent
Dffect of fraud, accident on )alidit' of negotiation = not im&aired
*here the &erson to *hom the bill *as negotiated &aid )alue thereof in G<
*ithout notice of the breach of dut' or loss, theft, fraud, accident, mista:e,
duress or con)ersion
%ho ma' negotiate( o*nerG an' &erson to *hom &ossession or
custod' of the bill has been entrusted b' the o*ner
Rights ac+uired=
1. such title to the goods as the &erson negotiating the bill had or
had abilit' to con)e' to a bu'er in good faith for )alue
-. direct obligation of the CC issuing the bill to hold &ossession of
the goods for him according to the terms of the BIF as full' as if such CC
contracted directl' *ith him
2ransfer of non6negotiable BIF
Rights ac+uired=
1. as against the transferor, title to the goods subBect to the terms
of an' agreement *ith the transferor
-. right to notif' the CC *ho issued the bill and thereb' ac+uire
the direct obligations of such CC to hold &ossession of the goods for him
accdg to the terms of the documentG &rior to notification of the CC, the title
of the transferee ma' be defeated b' le)' u&on the goods or a subse+uent
&urchaser from the transferor of a subse+uent sale of the goods b' a
transferor
#c$ <unction
Art. ;B;. The %e&a% $asis of the contract $et)een the shi##er
an' the carrier sha%% $e the $i%%s of %a'in&, $y the contents of )hich a%%
'is#!tes )hich ay arise )ith re&ar' to their e(ec!tion an' f!%fi%%ent
sha%% $e 'eci'e', no e(ce#tions $ein& a'issi$%e other than for&ery or
ateria% errors in the 'raftin& thereof.
After the contract has $een co#%ie' )ith, the $i%% of %a'in&
sha%% $e ret!rne' to the carrier )ho ay ha-e iss!e' it, an' $y -irt!e
of the e(chan&e of this tit%e for the artic%e trans#orte', the res#ecti-e
o$%i&ations an' actions sha%% $e consi'ere' cance%e', !n%ess the sae
act the c%ais )hich the contractin& #arties 'esire to reser-e are
re'!ce' to )ritin&, e(ce#tion $ein& a'e of the #ro-isions of Artic%e
;**.
In case the consi&nee, !#on recei-in& the &oo's, cannot
ret!rn the $i%% of %a'in& s!$scri$e' $y the carrier, '!e to its %oss or for
any other ca!se, he sha%% &i-e sai' carrier a recei#t for the &oo's
'e%i-ere', this recei#t #ro'!cin& the sae effect as the ret!rn of the
$i%% of %a'in&.
BIF constitutes the legal e)idence of the contract of trans&ortation 66R all
dis&utes bet*een the &arties regarding the e7ecution and &erformance of
the contract shall be decided b' the contents of the BIF issued b' the CC
66R the la* admits no e7ce&tions other than falsit' and material error in the
drafting of the BIF
As a contract e7&ressing the terms and conditions u&on *hich
the &ro&ert' is to be trans&orted, it is to be regarded as merging all &rior and
contem&oraneous agreements of the &arties, and in the absence of fraud,
concealment or mista:e, its terms or legal im&ort, *hen free from ambiguit'
cannot be e7&lained nor added to b' &arol #Parol D)idence Rule$
-. Refusal to 2rans&ort
Art. ;B*. /arriers ay ref!se to acce#t #ac2a&es )hich
a##ear !nfit for trans#ortation@ an' if sai' trans#ortation is to $e a'e
$y rai%)ay, an' the shi#ent is insiste' on, the co#any sha%% carry
the, $ein& e(e#t fro a%% %ia$i%ity if its o$.ections are so state' in
the $i%% of %a'in&.
CC cannot ordinaril' refuse to carr' a &articular class of goods to the
&reBudice of the traffic in those goods
e7ce&tion = *hen the goods or &ac:ages are unfit for trans&ortation
66R if trans&o is insisted u&on, railroads cannot refuse to carr' them, but
the' shall be e7em&t from all res&onsibilit' if their obBections are made to
a&&ear in the BIF
;. Eoubtful declaration of contents
Art. ;B1. If $y reason of )e%%6fo!n'e' s!s#icions of fa%si ty in
the 'ec%aration of the contents of a #ac2a&e, the carrier sho!%' 'eci'e
to e(aine it, he sha%% 'o so $efore )itnesses, in the #resence of the
shi##er or of the consi&nee.
Sho!%' the shi##er or consi&nee cite' not a##ear, the
e(ainations sha%% $e a'e $efore a notary, )ho sha%% 'raft a certifi6
cate of the res!%t of the e(aination, for s!ch #!r#oses as ay $e
#ro#er.
If the 'ec%aration of the shi##er sho!%' $e correct, the
e(#enses ca!se' $y the e(aination an' those of caref!%%y re#ac2in&
the #ac2a&es sha%% $e 'efraye' $y the carrier, an' in a contrary case $y
the shi##er.
If the CC has a *ell6founded sus&icion of falsit' in the declaration as to the
contents of a &ac:age, he ma' e7amine it 66R he must follo* the &rocedure
under ;1"
0. 4o bill of lading
Art. ;B?. In the a$sence of a $i%% of %a'in& the res#ecti-e
c%ais of the #arties sha%% $e 'eci'e' $y the %e&a% #roofs that each one
ay s!$it in s!##ort of his c%ais, in accor'ance )ith the &enera%
#ro-isions esta$%ishe' in this /o'e for coercia% contracts.
Art. ;B1. In trans#ortation a'e $y rai%roa's or other
enter#rises )hich are s!$.ect to sche'!%es or the tie fi(e' $y
re&!%ations, it sha%% $e s!fficient that the $i%%s of %a'in& or the
'ec%arations of shi#ent f!rnishe' $y the shi##er refer, )ith res#ect to
the rate, ters, an' s#ecia% con'itions of the trans#ortation, to the
sche'!%es an' re&!%ations, the a##%ication of )hich he re0!ests@ an'
sho!%' no sche'!%e $e 'eterine', the carrier !st a##%y the rate of
the erchan'ise #ayin& the %o)est, )ith the con'itions inherent
therein, a%)ays inc%!'in& s!ch stateent or reference to the in the
$i%% of %a'in& )hich he 'e%i-ers to the shi##er.
Bill not essential to contract = %hile under ;1?, the shi&&er and the CC ma'
mutuall' demand that a BIF is made, it is not obligator'. 2he fact that a BIF
is not issued does not &reclude the e7istence of a contract of trans&o.
Pro)ided there is a meeting of the minds and from such meeting arise rights
and obligations, there should be no limitations as to form.
2he BIF is not essential to the contract, although it ma' become
obligator' b' reason of the regulations of com&anies or as a condition
im&osed in the contract b' agreement of the &arties themsel)es
%here no BIF is issued, the dis&utes bet*een the &arties shall be
decided accdg. to the rules laid do*n in Art. ;10
D. Res&onsibilit' of the Carrier
1. %hen it commences
Art. ;BB. The %ia$i%ity of the carrier sha%% $e&in fro the
oent he recei-es the erchan'ise, in #erson or thro!&h a #erson
entr!ste' there)ith in the #%ace in'icate' for their rece#tion.
2he res&onsibilit' of the CC commences from the moment he recei)es the
merchandise 66R the deli)er' must be made to him &ersonall' or through his
dul' authoriAed agent, and at the &lace indicated for recei)ing the
merchandise
-. Route
PAGE 37
TRANSPORTATION AND MARITIME LAW
Art. ;B5. If there sho!%' $e an a&reeent $et)een the
shi##er an' the carrier )ith re&ar' to the roa' o-er )hich the
trans#ortation is to $e a'e, the carrier ay not chan&e the ro!te,
!n%ess o$%i&e' to 'o so $y force a.e!re@ an' sho!%' he 'o so )itho!t
s!ch ca!se, he sha%% $e %ia$%e for any 'aa&e )hich ay $e s!ffere'
$y the &oo's trans#orte' for any other ca!se )hatsoe-er, $esi'es
#ayin& the ao!nt )hich ay ha-e $een sti#!%ate' for s!ch a case.
When on acco!nt of sai' force a.e!re the carrier is o$%i&e'
to ta2e another ro!te, ca!sin& an increase in the trans#ortation
char&es, he sha%% $e rei$!rse' for sai' increase after fora% #roof
thereof.
%here there is an agreed route, the CC shall be liable for losses due not
onl' to the change of route but also to other causes, together *ith the
indemnit' agreed u&on 66R the CC ma' not a)ail of the contract limiting his
liabilit' in case of unBustified change of route
%here there is no agreed route, the carrier must select one *hich
ma' be the shortest, least e7&ensi)e and &racticall' &assable
;. Care of Goods
Artic%e ;*1. The erchan'ise sha%% $e trans#orte' at the ris2
an' -ent!re of the shi##er, if the contrary )as not e(#ress%y sti#!%ate'.
Therefore, a%% 'aa&es an' i#airent s!ffere' $y the
&oo's '!rin& the trans#ortation, $y reason of acci'ent, force a.e!re,
or $y -irt!e of the nat!re or 'efect of the artic%es, sha%% $e for the
acco!nt an' ris2 of the shi##er.
The #roof of these acci'ents is inc!$ent on the carrier.
%hen goods are deli)ered on board a shi& in good order and condition, and
the shi&&er6o*ner deli)ers them to the shi&&er in bad order and condition, it
then de)ol)es u&on the shi&o*ner to both allege and &ro)e that the goods
*ere damaged b' reason of some fact *hich legall' e7em&ts him from
liabilit'
2he shi&&er *ill suffer losses and deteriorations arising from
fortuitous e)ent, force maBeure, or inherent nature and defects of the goods
#at the ris: and )enture of the shi&&er$
It does not mean that the CC is free from liabilit' for losses and
deterioration arising from his negligence or fault, *hich is &resumed
Relate this *ith Art. 1";0 and 1";1 of the Ci)il Code
Art. ;*D. The carrier, ho)e-er, sha%% $e %ia$%e for the %osses
an' 'aa&es arisin& fro the ca!ses entione' in the fore&oin&
artic%e if it is #ro-e' that they occ!rre' on acco!nt of his ne&%i&ence
or $eca!se he 'i' not ta2e the #reca!tions !s!a%%y a'o#te' $y caref!%
#ersons, !n%ess the shi##er coitte' fra!' in the $i%% of %a'in&,
a2in& hi $e%ie-e that the &oo's )ere of a c%ass or 0!a%ity 'ifferent
fro )hat they rea%%y )ere.
If, not)ithstan'in& the #reca!tion referre' to in this artic%e,
the &oo's trans#orte' r!n the ris2 of $ein& %ost on acco!nt of the
nat!re or $y reason of an !na-oi'a$%e acci'ent, there $ein& no tie
for the o)ners to 'is#ose of the sae, the carrier sha%% #rocee' to their
sa%e, #%acin& the for this #!r#ose at the 'is#osa% of the .!'icia%
a!thority or of the officia%s 'eterine' $y s#ecia% #ro-isions.
Burden of &roof = the CC has the burden of &ro)ing that the inBur' *as
occasioned b' one of the e7ce&ted causes
2he shi&&er then has the burden to &ro)e that although the inBur'
ma' ha)e been occasioned b' one of the e7ce&ted causes, 'et still the CC
is res&onsible if the inBur' might ha)e been a)oided b' the e7ercise of
reasonable s:ill and attention on his &art
Art. ;/- is in consonance *ith Art. 1";1, 4CC 66R e7ce&t that
under 1";-, &roof of e7tra6o diligence is re+uired and not Bust ordinar'
diligence as im&lied under ;/-
%here goods run ris: of loss due to their nature, Art. ;/-
&ro)ides for the remed' of sale b' the CC of the goods, &lacing them for the
&ur&ose at the dis&osal of the Budicial authorit' or of the officials designated
b' s&ecial &ro)isions
Art. 11;?. /oon carriers are res#onsi$%e for the %oss,
'estr!ction, or 'eterioration of the &oo's, !n%ess the sae is '!e to
any of the ff. ca!ses on%y9
<1= H%oo', stor, earth0!a2e, %i&htnin&, or other nat!ra%
'isaster or ca%aity@
<D= Act of the #!$%ic eney in )ar, )hether internationa% or
ci-i%@
<;= Act or oission of the shi##er or o)ner of the &oo's@
<?= The character of the &oo's or 'efects in the #ac2in& or in
the containers@
<B= Or'er or act of co#etent #!$%ic a!thority. <Ne) /i-i%
/o'e.=
Art. 11;B. In a%% cases other than those entione' in Nos.
1,D,;,?, an' B of the #rece'in& artic%e, if the &oo's are %ost, 'estroye'
or 'eteriorate', //s are #res!e' to ha-e $een at fa!%t or to ha-e
acte' ne&%i&ent%y, !n%ess they #ro-e that they o$ser-e' e(traor'inary
'i%i&ence as re0!ire' in Art. 11;;. <I$i'.=
0. Eeli)er'
#a$ Condition of Goods
Art. ;*;. With the e(ce#tion of the cases #rescri$e' in the
secon' #ara&ra#h of Artic%e ;*1, the carrier sha%% $e o$%i&e' to 'e%i-er
the &oo's trans#orte' in the sae con'ition in )hich, accor'in& to the
$i%% of %a'in&, they )ere at the tie of their recei#t, )itho!t any 'aa&e
or i#airent, an' sho!%' he not 'o so, he sha%% $e o$%i&e' to #ay the
-a%!e of the &oo's not 'e%i-ere' at the #oint )here they sho!%' ha-e
$een an' at the tie the 'e%i-ery sho!%' ha-e ta2en #%ace.
If #art of the &oo's trans#orte' sho!%' $e 'e%i-ere' the
consi&nee ay ref!se to recei-e the, )hen he #ro-es that he cannot
a2e !se thereof )itho!t the others.
D!ty to 'e%i-er &oo's 9 dut' to deli)er the goods in the same condition in
*hich accdg. to the BIF the' *ere found at the time the' *ere recei)ed,
*ithout damage or im&airment 66R other*ise, the CC is liable for damages
Partia% 'e%i-ery9 2he consignee ma' refuse to recei)e the goods
deli)ered, if he can &ro)e that he cannot ma:e use of them inde&endentl' of
those not deli)ered 66R true solution de&ends u&on the economic use *hich
the goods trans&orted ha)e #consignee cannot be arbitrar' and must Bustif'
his determination$
Dsto&&el of shi&&er b' laches = neglect or dela' of shi&&er to
demand immediatel', or *ithin a reasonable time, the return of the
merchandise shi&&ed or its )alue in case of non6deli)er' constitutes
esto&&el b' laches
Places the CC at a disad)antageous &osition to sho* that it had
fulfilled *hat it had underta:enG ma:es it difficult for the CC to &ro)e deli)er'
Art. ;*?. If the effect of the 'aa&e referre' to in Artic%e ;*1
sho!%' $e on%y a re'!ction in the -a%!e of the &oo's, the o$%i&ation of
the carrier sha%% $e re'!ce' to the #ayent of the ao!nt of sai'
re'!ction in -a%!e, after a##raisa% $y e(#erts.
%here all the goods are deli)ered but damage is to such an
e7tent that their )alue is diminished, the obligation of the CC shall be
reduced to the &a'ment of the amount *hich, in the Budgment of e7&erts,
constitute such difference in )alue 66R subBect of course to other damages
under the 4CC
Art. ;*B. If, on acco!nt of the 'aa&e, the &oo's are
ren'ere' !se%ess for sa%e or cons!#tion for the !se for )hich they
are #ro#er%y 'estine' the consi&nee sha%% not $e $o!n' to recei-e
the, an' ay %ea-e the in the han's of the carrier, 'ean'in&
#ayent of their -a%!e at the c!rrent ar2et #rice that 'ay.
If aon& the &oo's 'aa&es there sho!%' $e soe in &oo'
con'ition an' )itho!t any 'efect )hatsoe-er, the fore&oin& #ro-ision
sha%% $e a##%ica$%e )ith re&ar' to the 'aa&e' ones, an' the
consi&nee sha%% recei-e those )hich are so!n', this se#aration $ein&
a'e $y 'istinct an' se#arate artic%es, no o$.ect $ein& 'i-i'e' for the
#!r#ose, !n%ess the consi&nee #ro-es the i#ossi$i%ity of
con-enient%y a2in& !se thereof in this for.
The sae #ro-ision sha%% $e a##%ie' to erchan'ise in $a%es
or #ac2a&es, )ith 'istinction of the #ac2a&es )hich a##ear so!n'.
PAGE 38
TRANSPORTATION AND MARITIME LAW
%here damage renders the goods useless for sale and consum&tion for the
&ur&oses for *hich the' are &ro&erl' destined=
1. if the damage affects all goods, the consignee ma' abandon
all the goods to the CC *ho shall &a' the corres&onding damages
-. if the damage affects onl' some of the goods, the consignee
ma' abandon onl' the damaged goods 66R but if the consignee can &ro)e
that it is im&ossible to con)enientl' use the undamaged goods in that form,
*ithout the damaged goods, the la* authoriAes the consignee to abandon
all the goods
Art. ;**. Within the t)enty6fo!r ho!rs fo%%o)in& the recei#t
of the erchan'ise a c%ai ay $e a'e a&ainst the carrier on
acco!nt of 'aa&e or a-era&e fo!n' !#on o#enin& the #ac2a&es,
#ro-i'e' that the in'ications of the 'aa&e or a-era&e &i-in& rise to
the c%ai cannot $e ascertaine' fro the e(terior of sai' #ac2a&es, in
)hich case sai' c%ai sha%% on%y $e a'itte' at the tie of the recei#t
of the #ac2a&es.
After the #erio's entione' ha-e e%a#se', or after the
trans#ortation char&es ha-e $een #ai', no c%ai )hatsoe-er sha%% $e
a'itte' a&ainst the carrier )ith re&ar' to the con'ition in )hich the
&oo's trans#orte' )ere 'e%i-ere'.
In case of damaged goods, the damage ma' either be #1$ ascertainable onl'
b' o&ening of the &ac:ages, or #-$ ascertainable from the outside &art of the
&ac:age
In Case 1, the claim against the CC for damages must be made
*ithin -0 hours follo*ing the recei&t of the merchandise
In Case -, the claim must be made at the time of recei&t
2he claim must be made before the &a'ment of trans&ortation
charges
JJ other*ise, no action for damages ma' be maintained against
the CC
%hen &eriod begins to run = &eriod begins to run *hen the
consignee recei)ed &ossession of the goods such that he ma' e7ercise
o)er it the ordinar' control &ertinent to o*nershi&
2here must be deli)er' of the merchandise b' the CC to the
consignee at the &lace of destination 66R Art. ;// a&&lies onl' to cases of
claims for damage to goods actuall' turned o)er b' the CC and recei)ed b'
the consignee
2he conditions under Art. ;// are not limitation of action but are
conditions &recedent to a cause of action 66R if the shi&&er or consignee
fails to allege and &ro)e the conditions under ;//, he shall ha)e no right of
action against the CC
2he CC ma' re+uire in the BIF that the goods be e7amined at the
time of deli)er' thereof 66R the CC ma' li:e*ise *ai)e such right
Art. ;// is modified b' a BIF &rescribing a longer &eriod for filing
of *ritten claim *ith the CC or its agent
2he unilateral action of a CC in stam&ing a condition in the notice
of arri)al, re+uiring e7amination of bad order cargo b' the shi&Hs agent
before remo)al from &ort authorities as condition &recedent to an action for
reco)er' cannot modif' or add conditions to the BIF 66R unreasonable and
unfair in that it allo*s CC to a)oid res&onsibilit' for the loss of or damage to
their cargo *hen in &ac:ages or co)ered
2he &ur&ose of short &eriod for claiming damages = to afford the
CC a reasonable o&&ortunit' and facilities to chec: the )alidit' of the claims
*hile the acts are still fresh in the minds of the &erson *ho too: &art in the
transaction and the documents are still a)ailable.
2he consignee ma' file a &ro)isional claim = it is not necessar'
that such claim should state a detailed list of the loss or damageG the' onl'
ha)e to contain descri&tions of the shi&ments in +uestion sufficient to ha)e
allo*ed the CC to ma:e reasonable )erifications of such claim 66R the
determination of the s&ecific amount of damages claimed should be done
carefull' and *ithout haste and these can be done onl' in a formal claim
*hich *ill be filed after the &ro)isional claim
2his sti&ulation is in the nature of a limitation u&on the o*nerHs
right to reco)er' 66R the burden of &roof is on the CC to sho* that the
limitation *as reasonable and in &ro&er form or *ithin the time stated #see
3outhern Fines )s CA$
A a sti&ulation in the BIF &ro)iding for a shorter &eriod than the
statutor' &eriod *ithin *hich to bring action for $reach is )alid 66R does
not in an' *a' defeat the right to reco)er but merel' re+uires that said right
be asserted b' action at an earlier &eriod #filing of claims is different from
filing of suits$
Art. ;*1. If there sho!%' occ!r 'o!$ts an' 'is#!tes $et)een
the consi&nee an' the carrier )ith re&ar' to the con'ition of &oo's
trans#orte' at the tie of their 'e%i-ery to the forer, the sai' &oo's
sha%% $e e(aine' $y e(#erts a##ointe' $y the #arties, an' in case of
'isa&reeent, a thir' one a##ointe' $y the .!'icia% a!thority, the res!%t
of the e(aination $ein& re'!ce' to )ritin&@ an' if the #ersons
intereste' sho!%' not a&ree to the re#ort of the e(#erts an' co!%' not
sett%e their 'is#!tes, sai' .!'icia% a!thority sha%% or'er the 'e#osit of
the erchan'ise in a safe )areho!se, an' the #arties intereste' sha%%
a2e !se of their ri&hts in the #ro#er anner.
If doubts and dis&utes should arise bet*een the consignee and the CC *ith
res&ect to the condition of the goods trans&orted at the time of the deli)er',
Art. ;/" shall go)ern 66R e7&ert o&inion on the matter is not conclusi)e on
the &arties
#b$ 2o %hom Eeli)er' @ade
Art. ;*3. The carrier !st 'e%i-er to the consi&nee )itho!t
any 'e%ay or o$str!ction the erchan'ise recei-e' $y hi, $y the
ere fact of $ein& 'esi&nate' in the $i%% of %a'in& to recei-e it@ an'
sho!%' he not 'o so he sha%% $e %ia$%e for the 'aa&es )hich ay
arise therefro.
2he deli)er' must be made to the consignee
%here the BIF is issued to the order of the shi&&er, the CC is under a dut'
not to deli)er the merchandise e7ce&t u&on &resentation of the BIF dul'
indorsed b' the shi&&er, and *here the CC deli)ered the goods to another
&erson *ho did not &resent the BIF, such CC is liable for misdeli)er' 66R
dut' to trans&ort the goods safel' and to deli)er them to the &erson
indicated in the BIF
@isdeli)er'= Eeli)er' to a &erson different from that indicated in the BIF 66R
different from non6deli)er'
In case of conflicting orders of the shi&&er and the consignee
#*here one orders the return and the other orders the deli)er' of the goods$,
there is no other recourse than to determine at *hat moment the right of the
shi&&er to countermand the shi&ment terminates 66R this moment can be no
other than the time *hen the consignee or legitimate holder of the BIF
a&&ears *ith such BIF before the CC and ma:es himself a &art' to the
contract #&rior to that time, he is a stranger to the contract$
#c$ ,udicial Ee&osit
Art. ;*5. Sho!%' the consi&nee $e not fo!n' at the 'oi ci%e
in'icate' in the $i%% of %a'in&, or sho!%' ref!se to #ay the
trans#ortation char&es an' e(#enses, or to recei-e the &oo's, the
'e#osit of sai' &oo's sha%% $e or'ere' $y the !nici#a% .!'&e, )here
there is no .!'&e of first instance, to $e #%ace' at the 'is#osa% of the
shi##er or sen'er, )itho!t #re.!'ice to a #erson ha-in& a $etter ri&ht,
this 'e#osit ha-in& a%% the effects of a 'e%i-ery.
,udicial de&osit as a remed'=
1. *here the consignee cannot be found at the residence
indicated
-. *here the consignee refused to &a' the trans&ortation charges
;. *here the consignee refuses to recei)e the goods
,udicial de&osit shall &roduce all the effects of deli)er' subBect to
third &ersons *ith better rights
Eut' to loo: for consignee = if consignee is not &resent, he is
entitled to reasonable notice from the CC of their arri)al and a fair
o&&ortunit' to ta:e care of and remo)e them
= if the consignee is un:no*n to the CC, the latter must use
&ro&er and reasonable diligence to find him, and if the consignee still cannot
be found, the goods ma' be stored in a &ro&er &lace and the CC *ill ha)e
&erformed his *hole dut' and shall be discharged from liabilit' as a CC
PAGE 39
TRANSPORTATION AND MARITIME LAW
<ailure to loo: for consignee and to gi)e him reasonable notice
shall ma:e the CC liable for damages resulting from the dela' in the recei&t
of the goods b' the consignee 66R a&&l' 1";! on the liabilit' of the CC e)en
*hen the goods are de&osited in its *arehouse until after the consignee has
been gi)en reasonable notice and o&&ortunit' to remo)e the goods
Art. 11BD. E-en )hen there is an a&reeent %iitin& the
%ia$i%ity of the // in the -i&i%ance o-er the &oo's, the // is 'is#!ta$%y
#res!e' to ha-e $een ne&%i&ent in case of their %oss, 'estr!ction or
'eterioration. <Ne) /i-i% /o'e.=
#d$ %hen to be made
Artic%e ;1+. If a #erio' has $een fi(e' for the 'e%i-ery of the
&oo's, it !st $e a'e )ithin the sae, other)ise the carrier sha%%
#ay the in'enity a&ree' !#on in the $i%% of %a'in&, neither the shi##er
nor consi&nee $ein& entit%e' to anythin& e%se.
Sho!%' no in'enity ha-e $een a&ree' !#on an' the 'e%ay
e(cee's the tie fi(e' in the $i%% of %a'in&, the carrier sha%% $e %ia$%e for
the 'aa&es )hich ay ha-e $een ca!se' $y the
'e%ay.
Art. ;B3. Sho!%' no #erio' )ithin )hich &oo's are to $e
'e%i-ere' $e #re-io!s%y fi(e', the carrier sha%% $e !n'er the o$%i&ation
to for)ar' the in the first shi#ent of the sae or sii%ar
erchan'ise )hich he ay a2e to the #oint of 'e%i-ery@ an' sho!%'
he not 'o so, the 'aa&es occasione' $y the 'e%ay sha%% $e s!ffere'
$y hi.
%here &eriod fi7ed for deli)er' = the CC must deli)er the goods *ithin the
time fi7ed 66R for failure to do so, the CC shall &a' indemnit' sti&ulated in
the BIF, neither the shi&&er nor the consignee being entitled to an'thing else
66R ho*e)er, under the CC, damages shall be &aid if the carrier refuses to
&a' the sti&ulated indemnit' or is guilt' of fraud in the fulfillment of his
obligation #Art. 11-/,4CC$
If no indemnit' has been sti&ulated and the dela' e7ceeds the
time fi7ed in the BIF, the CC shall be liable for the damages that the dela'
ma' ha)e caused, e.g. the difference bet*een the @. of the goods at the
time *hen the' should ha)e been deli)ered, and the &rice at the time *hen
the' *ere deli)ered to *hich ma' be added reasonable e7&enses caused b'
dela'
A CC in G< ma' be held liable onl' for damages that *ere
foreseen or might ha)e been foreseen at the time the contract of trans&o
*as entered into 66R before a CC could be held liable for s&ecial damages,
such as loss of &rofits on account of the dela' or failure of deli)er, he must
ha)e notice at the time of the deli)er' of the &articular circumstances
attending the shi&ment and *hich *ould &robabl' lead to such s&ecial loss
if he defaulted #@endoAa )s PAF$
If the CC incurs in dela' in trans&orting the goods, a natural
disaster shall not free such carrier from res&onsibilit'G *here the CC *ithout
cause dela's the trans&ortation of the goods, the contract limiting the CCHs
liabilit' cannot be a)ailed of in case of the loss, destruction or deterioration
of the goods
%here &ro&ert' in the hands of a CC is not deli)ered *ithin a
reasonable time after it has reached its destination, the CC in the absence
of an' legal e7em&tion and after demand has been made and deli)er'
refused, is liable for a con)ersion of the &ro&ert' 66R the consignee ma'
*ai)e title to the &ro&ert' and sue for con)ersion and is entitled to the )alue
of the goods at the time the' should ha)e been deli)ered to him 66R
subse+uent tender of the goods b' the CC is not a)ailable as a defense
If there has been demand and the CC tenders the goods, the
consignee cannot refuse to recei)e the goods and sue for con)ersionG his
sole remed' is an action for damages on account of the dela' 66R there can
onl' be con)ersion if there has been demand and the CC refuses deli)er'
2he time for deli)er' *hen no &eriod fi7ed = the CC shall be
bound to for*ard them in the first shi&ment of the same or similar goods
*hich he ma:es to the &oint *here he must deli)er them 66R should he not
do so, the damages caused b' the dela' shall be for his account
Art. ;1! is not )iolated *hen though the goods *ere not shi&&ed
on the train agreed u&on, the' *ere shi&&ed on another train *hich arri)ed
earlier than the one agreed u&on
#e$ 2*o or more carriers
Art. ;1;. A carrier )ho 'e%i-ers erchan'ise to a consi&nee
$y -irt!e of a&reeents or co$ine' ser-ices )ith other carriers sha%%
ass!e the o$%i&ations of the carriers )ho #rece'e' hi, reser-in&
his ri&ht to #rocee' a&ainst the %atter if he sho!%' not $e 'irect%y
res#onsi$%e for the fa!%t )hich &i-es rise to the c%ai of the shi##er or
of the consi&nee.
The carrier a2in& the 'e%i-ery sha%% a%so ass!e a%% the
actions an' ri&hts of those )ho ay ha-e #rece'e' hi in the
trans#ortation.
The shi##er an' the consi&nee sha%% ha-e an ie'iate
ri&ht of action a&ainst the carrier )ho e(ec!te' the trans#ortation
contract, or a&ainst the other carriers )ho recei-e' the &oo's
trans#orte' )itho!t reser-ation.
The reser-ations a'e $y the %atter sha%% not ho)e-er
e(e#t the fro the %ia$i%ities they ay ha-e inc!rre' $y reason of
their o)n act.
3uccessi)e carriers shall assume the obligations of &re)ious carriers but
ha)e a right of action against &re)ious carriers is the latter are directl'
res&onsible for the fault gi)ing rise to the claim of the shi&&er
#f$ >bligation to :ee& registr'
Art. ;13. Trans#ortation a&ents sha%% $e o$%i&e' to 2ee# a
s#ecia% re&istry, )ith the fora%ities re0!ire' $y Artic%e ;*, in )hich
there sha%% $e entere', in #ro&ressi-e or'er of n!$er an' 'ates, a%%
the &oo's the trans#ortation of )hich is !n'erta2en, statin& the
circ!stances re0!ire' $y Artic%es ;B+ et se0. for the res#ecti-e $i%%s
of %a'in&.
#g$ Com&liance *ith administrati)e
regulations
Art. ;11. The carrier sha%% $e %ia$%e for a%% the conse0!ences
arisin& fro nonco#%iance on his #art )ith the fora%ities #rescri$e'
$y the %a)s an' re&!%ations of the #!$%ic a'inistration '!rin& the
entire co!rse of the tri# an' !#on arri-a% at the #oint of 'estination,
e(ce#t )hen his oission arises fro his ha-in& $een in'!ce' into
error $y fa%se stateents of the shi##er in the 'ec%aration of the
erchan'ise.
If the carrier has acte' in accor'ance )ith a fora% or'er
recei-e' fro the shi##er or consi&nee of the erchan'ise $oth sha%%
inc!r %ia$i%ity.
2he CC is e7em&ted from res&onsibilit' *here his failure to com&l' arises
from ha)ing been led into error b' the falsehood on the &art of the shi&&er in
the declaration of the merchandise
2he shi&&er or consignee ma' become liable for noncom&liance
*ith go)t. rules and regulations, *hen the CC has acted b' )irtue of a
formal order of the shi&&er or consignee 66R but the CC continues to be
liable
<. Rights and >bligations of 3hi&&er andIor Consignee
1. Right to Eamages
#a$ Condition im&osed on right
Art. ;**. Within the t)enty6fo!r ho!rs fo%%o)in& the recei#t
of the erchan'ise a c%ai ay $e a'e a&ainst the carrier on
acco!nt of 'aa&e or a-era&e fo!n' !#on o#enin& the #ac2a&es,
#ro-i'e' that the in'ications of the 'aa&e or a-era&e &i-in& rise to
the c%ai cannot $e ascertaine' fro the e(terior of sai' #ac2a&es, in
)hich case sai' c%ai sha%% on%y $e a'itte' at the tie of the recei#t
of the #ac2a&es.
After the #erio's entione' ha-e e%a#se', or after the
trans#ortation char&es ha-e $een #ai', no c%ai )hatsoe-er sha%% $e
a'itte' a&ainst the carrier )ith re&ar' to the con'ition in )hich the
&oo's trans#orte' )ere 'e%i-ere'.
Art. ;B1. If $y reason of )e%%6fo!n'e' s!s#icions of fa%si ty in
the 'ec%aration of the contents of a #ac2a&e, the carrier sho!%' 'eci'e
PAGE 40
TRANSPORTATION AND MARITIME LAW
to e(aine it, he sha%% 'o so $efore )itnesses, in the #resence of the
shi##er or of the consi&nee.
Sho!%' the shi##er or consi&nee cite' not a##ear, the
e(ainations sha%% $e a'e $efore a notary, )ho sha%% 'raft a certifi6
cate of the res!%t of the e(aination, for s!ch #!r#oses as ay $e
#ro#er.
If the 'ec%aration of the shi##er sho!%' $e correct, the
e(#enses ca!se' $y the e(aination an' those of caref!%%y re#ac2in&
the #ac2a&es sha%% $e 'efraye' $y the carrier, an' in a contrary case $y
the shi##er.
Art. ;B;. The %e&a% $asis of the contract $et)een the shi##er
an' the carrier sha%% $e the $i%%s of %a'in&, $y the contents of )hich a%%
'is#!tes )hich ay arise )ith re&ar' to their e(ec!tion an' f!%fi%%ent
sha%% $e 'eci'e', no e(ce#tions $ein& a'issi$%e other than for&ery or
ateria% errors in the 'raftin& thereof.
After the contract has $een co#%ie' )ith, the $i%% of %a'in&
sha%% $e ret!rne' to the carrier )ho ay ha-e iss!e' it, an' $y -irt!e
of the e(chan&e of this tit%e for the artic%e trans#orte', the res#ecti-e
o$%i&ations an' actions sha%% $e consi'ere' cance%e', !n%ess the sae
act the c%ais )hich the contractin& #arties 'esire to reser-e are
re'!ce' to )ritin&, e(ce#tion $ein& a'e of the #ro-isions of Artic%e
;**.
In case the consi&nee, !#on recei-in& the &oo's, cannot
ret!rn the $i%% of %a'in& s!$scri$e' $y the carrier, '!e to its %oss or for
any other ca!se, he sha%% &i-e sai' carrier a recei#t for the &oo's
'e%i-ere', this recei#t #ro'!cin& the sae effect as the ret!rn of the
$i%% of %a'in&.
Effect of ret!rn of the F:L or &i-in& of the recei#t9 2he res&ecti)e
obligations and actions of the &arties against each other shall be considered
canceled, e7ce&t *here in the same act of return or gi)ing of a recei&t the
claims of the &arties be reduced to *riting subBect to the &ro)isions of Art.
;//
#b$ Amount of damages for loss
Art. ;1D. The -a%!e of the &oo's )hich the carrier !st #ay
in case of their $ein& %ost or is%ai' sha%% $e fi(e' in accor 'ance )ith
)hat is state' in the $i%% of %a'in&, no #roofs $ein& a%%o)e' on the #art
of the shi##er that there )ere aon& the &oo's 'ec%are' therein
artic%es of &reater -a%!e, an' oney.
Eorses, -ehic%es, -esse%s, e0!i#ents, an' a%% the other
#rinci#a% an' accessory eans of trans#ortation, sha%% $e es#ecia%%y
o$%i&ate' in fa-or of the shi##er, a%tho!&h )ith res#ect to rai%roa's
sai' o$%i&ation sha%% $e s!$or'inate' to the #ro-isions of the %a)s of
concession )ith re&ar' to #ro#erty an' to those of this /o'e )ith
re&ar' to the anner an' for of a2in& attachents an' sei"!res
a&ainst the sai' co#anies.
2he )alue of the goods stated in the BIF is conclusi)e bet*een the &arties
and the shi&&er is not allo*ed to &ro)e a higher )alue
It is onl' *hen the CCHs fault is so gross as to amount to actual
fraud, that the actual amount of the losses and damages suffered ma' be
&ro)ed b' the shi&&er against the carrier
Par. - es&eciall' binds the horses, )ehicles, )essels and e+&t. and all other
&rinci&al and accessor' means of the CC in fa)or of the shi&&er 66R this lien
is a securit' for the &a'ment of the )alue of the goods *hich the CC must
&a' in case of loss or mis&lacement
Art. 11??, N//. A sti#!%ation $et)een the // an' the
shi##er or o)ner %iitin& the %ia$i%ity of the forer for the %oss,
'estr!ction or 'eterioration of the &oo's to a 'e&ree %ess than e(tra6o
'i%i&ence sha%% $e -a%i', #ro-i'e' it $e9
<1= in )ritin&, si&ne' $y the shi##er or o)ner@
<D= s!##orte' $y a -a%!a$%e consi'eration other than the
ser-ice ren'ere' $y the //@ an'
<;= reasona$%e, .!st, an' not contrary to #!$%ic #o%icy. <Ne)
/i-i% /o'e.=
#c$ Amount of damages for dela'
Art. ;11. In cases of 'e%ay on acco!nt of the fa!%t of the
carrier, referre' to in the fore&oin& artic%es, the consi&nee ay %ea-e
the &oo's trans#orte' in the han's of the carrier, inforin& hi
thereof in )ritin& $efore the arri-a% of the sae at the #oint of
'estination.
When this a$an'onent occ!rs, the carrier sha%% satisfy the
tota% -a%!e of the &oo's, as if they ha' $een %ost or is%ai'.
Sho!%' the a$an'onent not occ!r the in'enity for %oss
an' 'aa&es on acco!nt of the 'e%ays cannot e(cee' the c!rrent #rice
of the &oo's trans#orte' on the 'ay an' at the #%ace )here the
'e%i-ery )as to ha-e $een a'e. The sae #ro-ision sha%% $e
o$ser-e' in a%% cases )here this in'enity is '!e.
Eamages for dela' #&ar. ;$ = Pro)ided there is no e7&ress agreement as to
indemnit' in the BIF and there is no fraud on the &art of the CC, and the
goods ha)e a :no*n current &rice at the &lace and on the da' the' should
ha)e been deli)ered, the damages shall not e7ceed such )alue 66R subBect
to Ci)il Code &ro)isions on damages in case of dela'
-. Right to abandon
Art. ;11. In cases of 'e%ay on acco!nt of the fa!%t of the
carrier, referre' to in the fore&oin& artic%es, the consi&nee ay %ea-e
the &oo's trans#orte' in the han's of the carrier, inforin& hi
thereof in )ritin& $efore the arri-a% of the sae at the #oint of
'estination.
When this a$an'onent occ!rs, the carrier sha%% satisfy the
tota% -a%!e of the &oo's, as if they ha' $een %ost or is%ai'.
Sho!%' the a$an'onent not occ!r the in'enity for %oss
an' 'aa&es on acco!nt of the 'e%ays cannot e(cee' the c!rrent #rice
of the &oo's trans#orte' on the 'ay an' at the #%ace )here the
'e%i-ery )as to ha-e $een a'e. The sae #ro-ision sha%% $e
o$ser-e' in a%% cases )here this in'enity is '!e.
Ri&ht of a$an'onent9 D7ce&tional but limited right
2he right must be e7ercised during the inter)ening &eriod
bet*een the moment *hen the fault of the CC &roduces a dela', *hich is
the generati)e cause of the action, until the moment Bust before the arri)al of
the goods at the &lace of deli)er', b' communicating such abandonment to
the CC in *riting
%here these conditions do not concur, the refusal to acce&t
cannot be effecti)e
Eamages for abandonment = Art. ;"1 #-$ 66R subBect to Ci)il Code
Art. ;*+. The shi##er ay, )itho!t chan&in& the #%ace )here
the 'e%i-ery is to $e a'e, chan&e the consi&nent of the &oo's
'e%i-ere' to the carrier, an' the %atter sha%% co#%y )ith his or'ers,
#ro-i'e' that at the tie of a2in& the chan&e of the consi&nee the
$i%% of %a'in& s!$scri$e' $y the carrier, if one )ere iss!e', $e ret!rne'
to hi, e(chan&in& it for another containin& the no-ation of the
contract.
The e(#enses arisin& fro the chan&e of consi&nent sha%%
$e 'efraye' $y the shi##er.
Art. ;*B. If, on acco!nt of the 'aa&e, the &oo's are
ren'ere' !se%ess for sa%e or cons!#tion for the !se for )hich they
are #ro#er%y 'estine' the consi&nee sha%% not $e $o!n' to recei-e
the, an' ay %ea-e the in the han's of the carrier, 'ean'in&
#ayent of their -a%!e at the c!rrent ar2et #rice that 'ay.
If aon& the &oo's 'aa&es there sho!%' $e soe in &oo'
con'ition an' )itho!t any 'efect )hatsoe-er, the fore&oin& #ro-ision
sha%% $e a##%ica$%e )ith re&ar' to the 'aa&e' ones, an' the
consi&nee sha%% recei-e those )hich are so!n', this se#aration $ein&
a'e $y 'istinct an' se#arate artic%es, no o$.ect $ein& 'i-i'e' for the
#!r#ose, !n%ess the consi&nee #ro-es the i#ossi$i%ity of
con-enient%y a2in& !se thereof in this for.
The sae #ro-ision sha%% $e a##%ie' to erchan'ise in $a%es
or #ac2a&es, )ith 'istinction of the #ac2a&es )hich a##ear so!n'.
Art. ;*;. With the e(ce#tion of the cases #rescri$e' in the
secon' #ara&ra#h of Artic%e ;*1, the carrier sha%% $e o$%i&e' to 'e%i-er
the &oo's trans#orte' in the sae con'ition in )hich, accor'in& to the
$i%% of %a'in&, they )ere at the tie of their recei#t, )itho!t any 'aa&e
or i#airent, an' sho!%' he not 'o so, he sha%% $e o$%i&e' to #ay the
-a%!e of the &oo's not 'e%i-ere' at the #oint )here they sho!%' ha-e
$een an' at the tie the 'e%i-ery sho!%' ha-e ta2en #%ace.
PAGE 41
TRANSPORTATION AND MARITIME LAW
If #art of the &oo's trans#orte' sho!%' $e 'e%i-ere' the
consi&nee ay ref!se to recei-e the, )hen he #ro-es that he cannot
a2e !se thereof )itho!t the others.
Cases *here consignee ma' abandon goods =
1. Art. ;/;, in case of &artial non6deli)er' *here the consignee
&ro)es that he cannot ma:e use of the goods ca&able of deli)er'
inde&endentl' of those not deli)ered
-. Art. ;/1, *here the goods are rendered useless for sale and
consum&tion for the &ur&oses for *hich the' are &ro&erl' destined
;. Art. ;"1, *here there is dela' through the fault of the carrier
-. Right to change consignment
Art. ;*+. The shi##er ay, )itho!t chan&in& the #%ace )here
the 'e%i-ery is to $e a'e, chan&e the consi&nent of the &oo's
'e%i-ere' to the carrier, an' the %atter sha%% co#%y )ith his or'ers,
#ro-i'e' that at the tie of a2in& the chan&e of the consi&nee the
$i%% of %a'in& s!$scri$e' $y the carrier, if one )ere iss!e', $e ret!rne'
to hi, e(chan&in& it for another containin& the no-ation of the
contract.
The e(#enses arisin& fro the chan&e of consi&nent sha%%
$e 'efraye' $y the shi##er.
;. >bligation to &a' trans&ortation charges
Art. ;1?. The consi&nees to )ho the reittance ay ha-e
$een a'e ay not 'efer the #ayent of the e(#enses an'
trans#ortation char&es on the &oo's that they recei-e' after t)enty6
fo!r ho!rs ha-e e%a#se' fro the tie of the 'e%i-ery@ an' in case of
'e%ay in a2in& this #ayent, the carrier ay 'ean' the .!'icia% sa%e
of the &oo's he trans#orte' to a s!fficient ao!nt to co-er the
trans#ortation char&es an' the e(#enses inc!rre'.
Railroad cor&orations ha)e the &o*er to detain freight, goods or
luggage, to ans*er for the freight, storage and other trans&ortation charges
In case of failure of the shi&&er, o*ner or consignee to &a' for
such charges, the CC has the &o*er to sell such freight, goods, or luggage
at &ublic auction follo*ing the &rocedure under the la*
Art. ;1B. The &oo's trans#orte' sha%% $e s#ecifica%%y $o!n'
to ans)er for the trans#ortation char&es an' for the e(#enses an' fees
ca!se' $y the sae '!rin& their trans#ortation, an' !nti% the tie of
their 'e%i-ery.
This s#ecia% ri&ht sha%% $e %iite' to ei&ht 'ays after the
'e%i-ery has $een a'e, an' after sai' #rescri#tion the carrier sha%%
ha-e no f!rther ri&ht of action than that corres#on'in& to an or'inary
cre'itor.
Art. ;1*. The #reference of the carrier to the #ayent of
)hat is '!e hi for the trans#ortation an' e(#enses of the &oo's
'e%i-ere' to the consi&nee sha%% not $e affecte' $y the $an2r!#tcy of
the %atter, #ro-i'e' the action is $ro!&ht )ithin the ei&ht 'ays
entione' in the fore&oin& artic%e.
Art. DD?1. With reference to s#ecific o-a$%e #ro#erty of the
'e$tor, the ff. c%ais or %iens sha%% $e #referre' 9
(((
<5= /re'its for trans#ortation, !#on the &oo's carrie', for the
#rice of the contract an' inci'enta% e(#enses, !nti% their 'e%i-ery an'
for thirty 'ays thereafter. <Ne) /i-i% /o'e.=
2*o sanctions for the enforcement b' the CC of the &a'ment of e7&enses
and trans&o charges =
1. Art. ;"0 6 Budicial sale of the goods trans&orted
-. Art. ;"1 6 creating a lien in fa)or of the CC on the goods
trans&orted 66R ! da' &eriod has been increased to ;? da's b' the 4CC
2he &ur&ose of the lien and time limit= Reci&rocal to that
established in fa)or of the shi&&er under
Art. ;"-#&ar. -$G time limit rests on the necessit' *hich the consignee must
ha)e for alienation of the goods, b' *hich the CC is gi)en a &eriod relati)el'
urgent &ertaining to the said goods trans&orted 66R after the time has
&rescribed, his &reference &rescribes and his onl' remed' is b' ordinar'
action
2he mere fact that the goods remain in the &ossession of the CC
because the' ha)e not been remo)ed b' the consignee, and the right of the
CC to demand the sale of the goods to satisf' the cost of trans&ortation and
other e7&enses, do not de&ri)e the CC of its right to demand in a &ro&er
action the amounts o*ing to it b' reason of the contract of trans&o
2he ban:ru&tc' of the consignee shall not cut off the &reference
of the CC, &ro)ided that the claim is made *Iin ;? da's from date of
deli)er' #4CC$
1. >bligation to return bill of lading
Art. ;B;. The %e&a% $asis of the contract $et)een the shi##er
an' the carrier sha%% $e the $i%%s of %a'in&, $y the contents of )hich a%%
'is#!tes )hich ay arise )ith re&ar' to their e(ec!tion an' f!%fi%%ent
sha%% $e 'eci'e', no e(ce#tions $ein& a'issi$%e other than for&ery or
ateria% errors in the 'raftin& thereof.
After the contract has $een co#%ie' )ith, the $i%% of %a'in&
sha%% $e ret!rne' to the carrier )ho ay ha-e iss!e' it, an' $y -irt!e
of the e(chan&e of this tit%e for the artic%e trans#orte', the res#ecti-e
o$%i&ations an' actions sha%% $e consi'ere' cance%e', !n%ess the sae
act the c%ais )hich the contractin& #arties 'esire to reser-e are
re'!ce' to )ritin&, e(ce#tion $ein& a'e of the #ro-isions of Artic%e
;**.
In case the consi&nee, !#on recei-in& the &oo's, cannot
ret!rn the $i%% of %a'in& s!$scri$e' $y the carrier, '!e to its %oss or for
any other ca!se, he sha%% &i-e sai' carrier a recei#t for the &oo's
'e%i-ere', this recei#t #ro'!cin& the sae effect as the ret!rn of the
$i%% of %a'in&.
Under &ar. -, Art. ;1;, after the contract of trans&o has been com&lied *ith,
the BIF shall be returned to the issuing CC in e7change for the goods
trans&orted *hich are deli)ered to the shi&&er or consignee
%here the consignee u&on recei)ing the goods cannot return the
BIF to the CC b' reason of its loss or an' other cause, &ar. ;, Art. ;1;
&ro)ides that he must gi)e the CC a recei&t of the goods deli)ered
Effect of ret!rn of the F:L or &i-in& of the recei#t9 2he res&ecti)e
obligations and actions of the &arties against each other shall be considered
canceled, e7ce&t *here in the same act of return or gi)ing of a recei&t the
claims of the &arties be reduced to *riting subBect to the &ro)isions of Art.
;//
G. A&&licabilit' of Pro)isions
Art. ;15. The #ro-isions containe' in Artic%e ;?5 et se0.
sha%% a%so $e !n'erstoo' as re%atin& to #ersons )ho, a%tho!&h they 'o
not #ersona%%y effect the trans#ortation of coercia% &oo's, contract
to 'o so thro!&h others, either as contracts for a s#ecia% an' fi(e'
transaction or as frei&ht an' trans#ortation a&ents.
In either case they sha%% $e s!$ro&ate' to the #%ace of the
carriers )ith re&ar' to the o$%i&ations an' %ia$i%ity of the %atter, as )e%%
as )ith re&ar' to their ri&ht.
IA. ADMIRALTK AND MARITIME /OMMER/E
A. Conce&t of Admiralt'G ,urisdiction o)er Admiralt' Cases
FP 1D5, Sec. 15. Re&iona% Tria% /o!rts sha%% e(ercise
e(c%!si-e ori&ina% .!ris'iction9
(((
<;= In a%% actions in a'ira%ty an' aritie .!ris'iction
)here the 'ean' or c%ai e(cee's one h!n're' tho!san' #esos
<P1++,+++= (((.
FP 1D5, Sec. ;;. Metro#o%itan Tria% /o!rts, M!nici#a% Tria%
/o!rts an' M!nici#a% /irc!it Tria% /o!rts sha%% e(ercise9
<1= E(c%!si-e ori&ina% .!ris'iction o-er ci-i% actions an'
#ro$ate #rocee'in&s, testate an' intestate, inc%!'in& the &rant of
#ro-isiona% ree'ies in #ro#er cases, )here the -a%!e of the #ersona%
#ro#erty, estate or ao!nt of the 'ean' 'oes not e(cee' one
PAGE 42
TRANSPORTATION AND MARITIME LAW
h!n're' tho!san' #esos <P1++,+++=, or in Metro Mani%a )here s!ch
#ersona% #ro#erty, estate, or ao!nt of the 'ean' 'oes not e(cee'
T)o h!n're' tho!san' #esos <PD++,+++=, e(c%!si-e of interest,
'aa&es of )hate-er 2in', attorneyGs fees, %iti&ation e(#enses, an'
costs, the ao!nt of )hich !st $e s#ecifica%%y a%%e&e'9 Pro-i'e',
That interest, 'aa&es of )hate-er 2in', attorneyGs fees, %iti&ation
e(#enses, an' costs sha%% $e inc%!'e' in the 'eterination of the fi%in&
fees9 Pro-i'e', f!rther, That )here there are se-era% c%ais or ca!ses
of action $et)een the sae or 'ifferent #arties, e$o'ie' in the sae
co#%aint, the ao!nt of the 'ean' sha%% $e the tota%ity of the c%ais
in a%% the ca!ses of action, irres#ecti-e of )hether the ca!ses of action
arose o!t of the sae or 'ifferent actions.
International Car)ester )s Aragon !0 Phil ;/;
<= 2he 3I3 Belle of the 3ea too: on board in FA, goods for
shi&ment to @anila and co)ered b' BIF 4o. 1?1. 2he 3I3 Belle of the 3ea
arri)ed in @anila and discharged her cargo at the go)t. &iers under the
su&er)ision and custod' of the defendant @anila 2erminal Inc. >f the entire
shi&ment, one carton of assorted sam&les *ith a sti&ulated )alue of P-??
*as not deli)ered to &laintiff Karas and Co. 2he latter filed a com&laint *ith
the @unici&al Court of @anila against International Car)ester, as agent of
the 3I3 Belle of the 3ea and @anila 2erminal Inc. 2he com&laint charged
that the merchandise *as lost through the negligence of either of the
defendants. Before trial could &roceed, the International Car)ester Inc. #IC$
filed a motion to dismiss on the ground that the court had no Burisdiction.
2he motion *as denied. Prohibition &roceedings *ere instituted before the
C<I of @anila to sto& the Budge from &roceeding *ith the action. 2he
&etition *as granted and the res&ondents no* a&&eal.
Celd = It is clear from the com&laint that IC is being held liable onl' on the
assum&tion that the goods had been lost in transit or before being
discharged at the &ier. 2he liabilit' of IC is &redicated on the contract of
carriage b' sea bet*een IC and Karas M Co. as e)idenced b' the BIF,
inde&endentl' of the liabilit' of the @anila 2erminal Co. as o&erator of an
arrastre ser)ice.
Admiralt' has Burisdiction o)er all maritime contracts, in *hate)er
form, *here)er the' *ere e7ecuted or are to be &erformed, but not o)er
non6maritime contracts. %hether or not a contract is maritime de&ends not
on the &lace *here the contract is made and is to be e7ecuted, ma:ing the
localit' the test, but on the subBect matter of the contract, ma:ing the true
criterion a maritime ser)ice or a maritime transaction. 3&ecificall', admiralt'
has Burisdiction of a &roceeding in rem or in &ersonam for the breach of a
contract of affreightment, *hether e)idenced b' a BIF or a charter &art'.
And t'&ical of a contro)ers' o)er contracts of affreightment is a suit of one
&art' against the other for loss or damage to the cargo. 2his is the )er'
case before us, because the res&ondent Karas M Co. see:s to reco)er from
the &etitioner IC the )alue of certain lost cargo.
2he contention of Karas that the admiralt' Burisdiction is not
in)ol)ed because the contract in +uestion *as made u&on land and to be
terminated u&on land, merel' reflects the Dnglish rule *hich had long been
reBected in the U3. It is no* *ell6settled in the latter countr' that the
Burisdiction of admiralt' in matters of contract de&ends u&on the subBect
matter, i.e., the nature and character of the contract and that the Dnglish
rule *hich conceded Burisdiction onl' to contracts made u&on and to be
&erformed u&on na)igable *aters, is inadmissible, the true criterion being
that the contract has reference to maritime ser)ice or maritime transaction.
Under the la*, the C<I has Burisdiction o)er admiralt' cases.

B. .essels
1. @eaning
Fo&eA )s Euruelo 1- Phil --
<= Augusto Fo&eA, of 3ila', >ccidental 4egros, *anted to embar:
on the interisland steamer 3an ,acinto bound for Iloilo. 2he steamer *as
anchored some half a mile from the shore or &ort of 3ila'. In order to board
the steamer, Fo&es boarded the motor boat ,ison at the landing *hich *as
then engaged in con)e'ing &assengers and luggage to and from the
steamer. %hether due to negligence or incom&etence of Euruelo, the
engineer of ,ison aged 1/, as alleged, the boat a&&roached too near to the
stern of the steamer *herein it *as struc: b' the still turning &ro&eller of the
steamer. 2he boat sun: and Fo&eA *as thro*n into the *ater against the
&ro&eller *herein he suffered a bruise in the breast, t*o serious fractures of
the bones of the left leg and a com&ound fracture of the left femur. As a
result, Fo&eA *as hos&italiAed from <ebruar' -! to >ctober 1, 1-" or
eight months. Fo&eA filed a com&laint and sought damages amounting to
P1-?,??? alleging that he suffered inBuries due to the negligence and
ine7&erience ha)ing onl' been in its third da' of a&&renticeshi& on the da'
of the accident. It *as also alleged that ,ison *as o)erloaded *hen it
carried 10 &assengers instead of its ca&acit' for eight or nine. 2he
defendants assigned in it demurrer that the &laintiff did not sho* a right of
action since the com&laint did not allege that a &rotest had been &resented
b' the &laintiff *ithin -0 hours after the occurrence, to the com&etent
authorit' of the &ort *here the accident occurred as &ro)ided under the
Code of Commerce. C<I dismissed the com&laint, hence the a&&eal.
Celd = Assuming that article !;1 of the Code of Commerce states a
condition &recedent to the maintenance of an action in a case re+uiring
&rotest, such as &rotest is ne)ertheless not necessar' in the case at bar.
2he article is found in the section dealing *ith collisions and the conte7t
sho*s the collisions intended are collisions of sea6going )essels. 3aid
article cannot be a&&lied to small boats engaged in ri)er and ba' traffic.
2he )essels intended in the 2hird Boo: of the Code of Commerce *hich
deals *ith maritime commerce and in *hich Art. !/1 is found *as e)identl'
intended to define the la* relati)e to merchant )essels and marine shi&&ing,
and the )essels intended in that Boo: are such as are run b' masters
ha)ing s&ecial training *ith the elaborate a&&aratus of cre* and e+ui&ment
indicated in the Code. 2he *ord 5)essel5 used in the section *as not
intended to include all shi&s, craft, or floating structures of e)er' :ind
*ithout limitation, and the &ro)ision of that section should not be held to
include minor craft engaged onl' in ri)er or ba' traffic. .essels of minor
nature, such as ri)er boats and those carr'ing &assengers from shi& to
shore are go)erned as to their liabilit' in &assengers, b' the Ci)il Code.
2he *ord shi& and )essel, in their grammatical sense are a&&lied
to designate e)er' :ind of craft, large or small, merchant or *ar, a
signification *hich does not differ essentiall' from its Buridical meaning
according to *hich )essels for the &ur&ose of the Code of Commerce, are
considered not onl' those engaged in na)igation *hether coast*ise or high
seas, but also floating doc:s, &ontoons,dredges, sco*s, and other floating
a&&aratus for the ser)ice of the industr' or maritime commerce.
Ket not*ithstanding these &rinci&les from *hich it *ould seem
that an' floating a&&aratus *hich ser)es directl' for the trans&ortation of
things or &ersons or *hich indirectl' is related to this industr', ought to be
subBected to the &rinci&les of the Code *ith reference to o*nershi&, transfer,
rights, registrations, etc. the' are not a&&licable to small craft *hich are onl'
subBect to administrati)e regulations in the matter of &ort ser)ice and in the
fishing industr'.
But e)en if 2he Code >f Commerce *as a&&licable, a &rotest still
need not be made since under Art. !;/, *ant of &rotest cannot &reBudice a
&erson not in a condition to ma:e :no*n his *ishes. A &erson *ho has
suffered inBuries li:e that of the &laintiff cannot be su&&osed to be in a
condition to ma:e a &rotest.
-. 4ature and ac+uisition of )essels
Art. B1;. Merchant -esse%s constit!te #ro#erty )hich ay $e
ac0!ire' an' transferre' $y any of the eans reco&ni"e' $y %a). The
ac0!isition of a -esse% !st $e inc%!'e' in a )ritten instr!ent, )hich
sha%% not #ro'!ce any effect )ith re&ar' to thir' #ersons if not
recor'e' in the re&istry of -esse%s. The o)nershi# of a -esse%
sha%% a%so $e ac0!ire' $y the #ossession thereof in &oo' faith for three
years, )ith a &oo' tit%e '!%y recor'e'.
In the a$sence of any of these re0!isites, !ninterr!#te'
#ossession for ten years sha%% $e necessary in or'er to ac0!ire
o)nershi#.
A ca#tain cannot ac0!ire $y #rescri#tion the shi# of )hich
he is in coan'.
Aesse%s9 2hose engaged in na)igation , *hether coast*ise or on the high
seas, including floating doc:s, &ontoons, dredges, sco*s and an' other
floating a&&aratus destined for the ser)ices of the industr' or maritime
commerce
.essels engaged in the business of carr'ing or trans&orting
&assengers or goods for com&ensation, offering their ser)ices to the &ublic
are common carriers 66R go)erned &rimaril' b' the Ci)il Code &ro)isions on
common carriers and subsidiaril' b' the Code of Commerce and s&ecial
la*s
2he Code of Commerce regulates merchant shi&s or those
engaged in the trans&ortation of &assengers and freight from one &ort to
another or from &lace to another
2he Code of Commerce does not refer to &leasure shi&s, 'achts,
&ontoons, health ser)ice and harbor &olice )essels, floating storehouses,
*arshi&s or &atrol )essels, coast guard )essels, fishing )essels, to*boats
PAGE 43
TRANSPORTATION AND MARITIME LAW
and other craft destined to other uses, such as coast and geodetic sur)e',
scientific research and e7&loration, crafts engaged in the loading and the
discharge of )essels, or transhi&ments from one )essel to another
.essels of a minor nature not engaged in maritime commerce,
such as, ri)er boats and those carr'ing &assengers from shi& to shore, must
be go)erned as to their liabilit' to &assengers, b' the &ro)isions of the Ci)il
Code
Mo'es of ac0!isition9 #1$ &urchase and sale, #-$ &rescri&tion, #;$
construction, #0$ ca&ture, #1$ donation, #/$ succession, and #"$ other means,
such as barter
Possession in G< *ill ri&en into o*nershi& in ; 'earsG if the
&ossession is other*ise, it *ill ri&en into o*nershi& in 1? 'ears
2here can be no &rescri&tion in fa)or of the ca&tain because the
nature of the &ossession of the ca&tain is such that he is onl' an agent of
the o*ner, a de&ositar' of the )essel
2he ac+uisition of a )essel must a&&ear in a *ritten instrument
and such instrument must be registered in order that the transfer ma' affect
third &ersons
Art. B1?. F!i%'ers of -esse%s ay e#%oy the ateria% an'
fo%%o) )ith re&ar' to their constr!ction an' ri&&in& the systes ost
s!ita$%e to their interest. Shi# o)ners an' seaen sha%% $e s!$.ect to
the #ro-isions of the %a)s an' re&!%ations of the #!$%ic a'inistration
on na-i&ation, c!stos, hea%th, safety of -esse%s, an' other sii%ar
atters.
2he business of constructing and re&airing )essels or &arts thereof shall not
be considered a &ublic utilit' and no CPC shall be re+uired thereof
Art. B3B. Hor a%% #!r#oses of %a) not o'ifie' or restricte' $y
the #ro-isions of this /o'e, -esse%s sha%% contin!e to $e consi'ere' as
#ersona% #ro#erty.
.essels are considered &ersonal or mo)able &ro&ert'G but the' &arta:e to a
certain e7tent, of the nature and conditions of real &ro&ert', on account of
their )alue and im&ortance in the *orld of commerce
Art. 11D. O)nershi# is ac0!ire' $y occ!#ation an' $y
inte%%ect!a% creation.
O)nershi# an' other rea% ri&hts o-er #ro#erty are ac0!ire'
an' transitte' $y %a), $y 'onation, $y testate an' intestate
s!ccession, an' in conse0!ence of certain contracts, $y tra'ition.
They ay a%so $e ac0!ire' $y eans of #rescri#tion. <Ne)
/i-i% /o'e.=
;. RegistrationG certificates issuedG distinctions
Tariff an' /!stos /o'e, Sec. 3+D
<1= -esse%s 6 e-ery sort of $oat, craft or other artificia%
contri-ance !se', or ca#a$%e of $ein& !se', as a eans of
trans#ortation on )ater
<D= '!%y re&istere' 6 #erson, nat!ra% or .!ri'ica%, re&istere'
)ith the #ro#er &o-t. a&encies, as F!rea! of /oerce, SE/, NA/IDA,
FOI, E(#ort Incenti-es Foar' or Oi% /oission, as no) or ay
hereafter $e re0!ire' $y %a).
PD 1*1 as aen'e' $y PD 1+*?, 1BD1
Sec. 3+*. C#on re&istration of a -esse% of 'oestic
o)nershi#, an' of ore than 1B tons &ross, a certificate of Phi%i##ine
re&istry sha%% $e iss!e' for it. If the -esse% is of 'oestic o)nershi#
an' of 1B tons &ross or %ess, the ta2in& of the certificate of Phi%i##ine
re&istry sha%% $e o#tiona% )ith the o)ner.
Doestic o)nershi# eans o)nershi# -este' in the citi"ens
of the Phi%i##ines or cor#orations or association or&ani"e' !n'er the
%a)s of the Phi%i##ines at %east *+, of the /:S or ca#ita% of )hich is
)ho%%y o)ne' $y citi"ens of the Phi%i##ines, an' in the case of
cor#orations or associations )hich )i%% en&a&e in coast)ise tra'e the
#resi'ent an' ana&in& 'irectors thereof sha%% $e s!ch citi"ens (((
((( an enter#rise '!%y re&istere' )ith the Foar' of
In-estents WON entire%y o)ne' $y forei&n nationa%s, ay re&ister its
o)n -esse%s ((( if s!ch -esse%s are to $e !se' e(c%!si-e%y to trans#ort
its o)n ra) ateria%s an' finishe' #ro'!cts in Phi%i##ine )aters as an
inci'ent to its an!fact!rin&, #rocessin& or $!siness acti-ity
re&istere' )ith the FOI an' certifie' to $y sai' Foar' as an essentia%
e%eent in the o#eration of the re&istere' #ro.ect.
Rule III, @arina Rules and Regulations=
S!$.ects of Re&istration9
1= A%% -esse%s !se' in Phi%. )aters, not $ein& transients of
forei&n re&istry, sha%% $e re&istere' )ith the MARINA. To this en', it
sha%% $e the '!ty of the aster, o)ner an' a&ent of e-ery s!ch -esse%
to a2e a##%ication to the #ro#er MARINA 'istrict office for
re&istration thereof )ithin 1B 'ays after the -esse% $ecoes s!$.ect to
s!ch re&istration.
D= A -esse% of ; tons &ross or %ess sha%% not $e re&istere'
!n%ess the o)ner sha%% so 'esire, nor sha%% 'oc!ents %icenses of any
2in' $e re0!ire' for s!ch -esse%, $!t the #ro#er fee sha%% $e char&e'
for eas!reent )hen eas!reent is necessary, e(ce#t )hen the
sae is en&a&e' in to)in& or carryin& of artic%es an' #assen&ers for
hire.
;= A%% !n'oc!ente' -esse%s sha%% $e n!$ere' in s!ch
for as ay $e #rescri$e' $y the A'inistrator.
Aesse%s e(e#t fro Re&istration 9
AHP -esse%s, -esse%s o)ne' an':or o#erate' $y the AHP or
$y forei&n &o-t. for i%itary #!r#oses, an' $ancas, sai% $oats an' other
)ater craft )hich are not otori"e' of %ess than ; &ross tons sha%% not
$e s!$.ect to the re0!ireents of these r!%es an' re&!%ations re%ati-e
to re&istration an' na-i&ation, e(ce#t in so far as ay $e #rescri$e'
$y re&!%ations of MARINA.
2he Phil. Coast Guard is )ested *ith e7clusi)e authorit' o)er the
registration and documentation of Phil. )essels, as *ell as the issuance of
all certificates, licenses, or other documents necessar' or incident to such
registration
2he registration shall be effected at its home &ort or at the
nearest Coast Guard district or station *hen the home &ort does not ha)e
such
/ertificates of Phi%i##ine re&ister9 u&on registration of a )essel of
domestic o*nershi& and of more than 11 tons gross, a certificate of Phil.
register shall be issued for it
2he &ur&ose of certificates of register of )essels = to declare the
nationalit' of a )essel engaged in trade *ith foreign nations and to enable
her to assert that nationalit' *here)er found
Pri-i%e&es of certificate9 It confers u&on the )essel the right to
engage, consistentl' *ith la*, in the Phili&&ines coast*ise trade and entitles
it to the &rotection of the authorities and the flag of the Phili&&ines in all
&orts and on the high seas, and at the same time secures to it the same
&ri)ileges and subBects it to the same disabilities as, under the la*s of the
Phili&&ines, &ertain to foreign built )essels transferred abroad to citiAens of
the Phili&&ines
Certificates of o*nershi& = u&on registration of a )essel of more than 1 tons
gross, a certificate of o*nershi& shall be issued for it
0. 3ignificance of registration of transactions affecting
)essels
Presum&tion of o*nershi& from registration = the &resum&tion is that the
&erson in *hose name a )essel is registered has legal title thereto 66R but
such is not conclusi)e &roof against the real o*ners
It is essential that a record of documents affecting the title of a
)essel be entered in the Phili&&ine Coast Guard
Arro'o )s Ku 10 Phil 111
<= 2he a&&eal of Ku relates to the &references to the ten lorchas as
bet*een herself and the P4B. Among the facts found b' the trial Budge is
that the' *ere o*ned b' Fim PonAo 4a)igation Co. 2he' *ere mortgaged
to Po Pauco to guarantee a loan of P-?,???. 2his *as dul' registered *ith
the register of deeds. Po Pauco later mortgaged them in fa)or of P4B and
registered *ith the register of deeds but *as recorded in the >ffice of
Collector of Customs much later. @ean*hile, Ku secured a Budgment
against Fim PonAo 4a)igation Co. 2he notice of seiAure *as recorded b'
PAGE 44
TRANSPORTATION AND MARITIME LAW
the collector of customs of Iloilo on *hich date the records of the office
disclosed the )essels as free from encumbrances.
CDFE = 3ec. 11"1 of AC has modified the &ro)isions of the Chattel
@ortgage Fa*, &articularl' 3ec. 0 thereof. It is no* not necessar' for a
chattel mortgage of a )essel to be noted in the register of deeds. But it is
essential that a record of documents affecting the title of a )essel be
entered in the office of the collector of customs at a &ort of entr'. 2his is
designed to &rotect &ersons *ho deal *ith a )essel on the strength of the
record title. @ortgages on )essels., although not recorded, are good as
bet*een the &arties. But as against creditors of the mortgagor, an
unrecorded mortgage is )alid.
Co*e)er, *e find an e7&lanation of the dela' of registration *ith
the collector of customs6because of doubts entertained b' the latter relati)e
to the a&&licabilit' of Act 4o. ;;-0 to a mortgage e7ecuted in 11! in fa)or
of a Chinese subBect. 2his uncontradicted fact must be ta:en as curing the
ban:Hs defecti)e title. 2hat the collector did not &erform his dut' *as no
fault of P4B.
,udgment affirmed in &art in the sense that as bet*een Ku and
P4B, the latter has a su&erior right to its claim for P-?,???, and set aside in
&art in the sense that the record is remanded for further &roceedings.
Rubiso )s Ri)era ;" Phil "-
<= Eefendant Ri)era ac+uired b' &urchase the &ilot boat .alentina
on a date &rior to that of the &urchase and adBudication at &ublic auction b'
&laintiff Rubiso. But the sale at &ublic auction to Rubiso *as recorded in the
office of the collector of customs on ,an. -", 111 and in the commercial
registr' on @arch 0, 111, *hile the sale to Ri)era *as entered in the
customs registr' onl' on @arch 1", 111. Fo*er court decided for &laintiff.
Eefendant a&&ealed.
CDFE = 2he re+uisite of registration in the registr' of the &urchase of a
)essel is necessar' and indis&ensable in order that the &urchaserHs rights
ma' be maintained against a claim filed b' a third &erson. 3uch registration
is re+uired both Art. 1"; of the Code of Commerce in connection *ith 3ec -
of Act 4o. 1?? *hich Act amended said article. 2he amendments solel'
consisted in charging the Insular Collector of Customs, as at &resent, *ith
the fulfillment of the duties of the commercial register concerning the
registering of )essels, so that the registration of a bill of sale of a )essel
shall be made in the Insular Collector of Customs, *ho, since @a' 1!, 1?,
has been &erforming the duties of the commercial registr' in &lace of this
latter official. In )ie* of said legal &ro)isions, it is undeniable that
defendantHs rights cannot &re)ail o)er those ac+uired b' &laintiff in the
o*nershi& of said boat, in as much as defendantHs registration came after
&laintiffHs registration.
C. Persons Partici&ating in @aritime Commerce
1. 3hi&o*ners and shi&agents
Art. B3*. The o)ner of a -esse% an' shi# a&ent sha%% $e
ci-i%%y %ia$%e for the acts of the ca#tain an' for the o$%i&ations
contracte' $y the %atter to re#air, e0!i#, an' #ro-ision the -esse%,
#ro-i'e' the cre'itors #ro-es that the ao!nt c%aie' )as in-este'
therein.
Fy a&ent is !n'erstoo' the #erson entr!ste' )ith the
#ro-isionin& of a -esse%, or )ho re#resents her in the #ort in )hich
she ha##ens to $e.
Art. B31. The shi# a&ent sha%% a%so $e ci-i%%y %ia$%e for the
in'enities in fa-or of thir' #ersons )hich arise fro the con'!ct of
the ca#tain in the care of the &oo's )hich the -esse% carrie'@ $!t he
ay e(e#t hise%f therefro $y a$an'onin& the -esse% )ith a%% her
e0!i#ents an' the frei&hta&e he ay ha-e earne' '!rin& the -oya&e.
Art. B33. Neither the o)ner of the -esse% nor the a&ent sha%%
$e %ia$%e for the o$%i&ations contracte' $y the ca#tain if the %atter
e(cee's his #o)ers an' #ri-i%e&es inherent in his #osition or those
)hich ay ha-e $een conferre' !#on hi $y the forer.
Eo)e-er, if the ao!nts c%aie' )ere a'e !se of for the
$enefit of the -esse%, the o)ner or a&ent sha%% $e %ia$%e.
Fiabilit' of shi&o*ner and shi&agent =
#1$ under Art. !1", for the acts of the ca&tain
#-$ for contracts entered into b' the ca&tain to re&air, e+ui& and
&ro)ision the )essel, &ro)ided that the amount claimed *as in)ested for the
benefit of the )essel
#;$ for the indemnities in fa)or of third &ersons *hich ma' arise
from the conduct of the ca&tain in the care of the goods trans&orted, as *ell
as for the safet' of &assengers trans&orted
#0$ for damages to third &ersons for tort or +uasi6delict committed
b' the ca&tain, e7ce&t collision *ith another )essel
#1$ under Art. !-/, for damages in case of collision due to the
fault, negligence, or *ant of s:ill of the ca&tain, sailing mate, or an' other
member of the com&lement
2he agent is liable to the shi&&ers and o*ners of the cargo
trans&orted b' it, for losses and damages occasioned to such cargo *ithout
&reBudice to his rights against the o*ner of the shi&, to the e7tent of the
)alue of the )essel, its e+ui&ment and the freight
Under 1!!, the shi&o*ner and the shi&agent are not liable for the obligations
contracted b' the ca&tain if he e7ceeds his authorit', unless the amounts
claimed *ere in)ested for the benefit of the )essel 66R ho*e)er under Art.
1"1, 4CC, the shi& o*ner is liable for the death of or inBuries to the
&assengers *hich are caused b' the negligence or *ilful acts of his DDs
although such DDs ma' ha)e acted be'ond the sco&e of their authorit' or in
)iolation of the orders of the shi&o*ner
Art. B35. If t)o or ore #ersons sho!%' $e #art o)ners of a
erchant -esse%, an association sha%% $e #res!e' as esta$%ishe' $y
the #art o)ners.
This association sha%% $e &o-erne' $y the reso%!tions of a
a.ority of the e$ers.
A a.ority sha%% $e the re%ati-e a.ority of the -otin&
e$ers.
If there sho!%' $e on%y t)o #art o)ners, in case of
'isa&reeent the -ote of the e$er ha-in& the %ar&est interest sha%%
$e 'ecisi-e. If the interests are e0!a%, it sha%% $e 'eci'e' $y %ot.
The re#resentation of the sa%%est #art in the o)nershi#
sha%% ha-e one -ote@ an' #ro#ortionate%y the other #art o)ners as
any -otes as they ha-e #arts e0!a% to the sa%%est one.
A -esse% cannot $e 'etaine', attache' or %e-ie' !#on e(ec!6
tion in her entirety for the #ri-ate 'e$ts of a #art o)ner, $!t the
#rocee'in&s sha%% $e %iite' to the interest the 'e$tor ay ha-e in the
-esse%, )itho!t interferin& )ith her na-i&ation.
Art. B5+. The co6o)ners of a -esse% sha%% $e ci-i%%y %i a$%e, in
the #ro#ortion of their contri$!tion to the coon f!n', for the res!%ts
of the acts of the ca#tain, referre' to in Artic%e B31.
Each #art o)ner ay e(e#t hise%f fro this %ia$i%ity $y
the a$an'onent $efore a notary of the #art of the -esse% $e%on&in& to
hi.
Art. B51. A%% the #art o)ners sha%% $e %ia$%e, in #ro#ortion to
their res#ecti-e o)nershi#, for the e(#enses )hich are inc!rre' $y
-irt!e of a reso%!tion of the a.ority.
They sha%% %i2e)ise $e %ia$%e in the sae #ro#ortion for the
e(#enses of aintenance, e0!i#ent, an' #ro-isionin& of the -esse%,
necessary for na-i&ation.
Art. B5D. The reso%!tions of the a.ority )ith re&ar' to the
re#air, e0!i#ent, an' #ro-isionin& of the -esse% in the #ort of
'e#art!re sha%% $in' the inority, !n%ess they reno!nce their
#artici#ation therein, )hich !st $e ac0!ire' $y the other #art o)ners
after a .!'icia% a##raiseent of the -a%!e of the #ortion or #ortions
assi&ne'.
The reso%!tions of the a.ority re%atin& to the 'isso%!tion of
the association an' sa%e of the -esse% sha%% a%so $e $in'in& on the
inority.
The sa%e of the -esse% sha%% $e a'e at a #!$%ic a!ction,
s!$.ect to the #ro-isions of the %a) of ci-i% #roce'!re !n%ess the #art
o)ners !nanio!s%y a&ree other)ise, s!$.ect a%)ays to the ri&ht of
#re6e#tion an' re'e#tion entione' in Artic%e B1B.
Art. B5;. The o)ners of a -esse% sha%% ha-e #reference in her
charter o-er other #ersons, offerin& e0!a% con'itions an' #rice. If t)o
or ore of the forer sho!%' c%ai sai' ri&ht the one ha-in& &reater
PAGE 45
TRANSPORTATION AND MARITIME LAW
interest sha%% $e #referre', an' sho!%' they ha-e an e0!a% interest it
sha%% $e 'eci'e' $y %ot.
Art. B5?. The #art o)ners sha%% e%ect the ana&er )ho is to
re#resent the in the ca#acity of a&ent.
The a##ointent of 'irector or a&ent sha%% $e re-oca$%e at
the )i%% of the #artners.
Art. B5B. The a&ent, $e he at the sae tie an o)ner of a
-esse% or a ana&er for an o)ner or for an association of co6 o)ners,
!st $e 0!a%ifie' to tra'e an' !st $e recor'e' in the erchantGs
re&istry of the #ro-ince.
The a&ent sha%% re#resent the o)nershi# of the -esse%, an'
ay in his o)n nae an' in s!ch ca#acity ta2e .!'icia% an' e(tra6
.!'icia% ste#s in a%% that re%ates to coerce.
Art. B5*. The a&ent ay 'ischar&e the '!ties of ca#tain of
the -esse%, s!$.ect, in e-ery case, to the #ro-isions containe' in Artic%e
*+5.
If t)o or ore co6o)ners re0!est the #osition of ca#tain, the
'isa&reeent sha%% $e 'eci'e' $y a -ote of the e$ers@ an' if the
-ote sho!%' res!%t in a tie, the #osition sha%% $e &i-en to the #art o)ner
ha-in& the %ar&er interest in the -esse%.
If the interest of the #etitioners sho!%' $e the sae, an'
there sho!%' $e a tie, the atter sha%% $e 'eci'e' $y %ot.
Art. B51. The a&ent sha%% se%ect an' enter into an a&reeent
)ith the ca#tain, an' sha%% contract in the nae of the o)ners, )ho
sha%% $e $o!n' in a%% that refers to re#airs, 'etai%s of e0!i#ent,
araent, #ro-isions, f!e%, an' frei&ht of the -esse%, an', in &enera%,
in a%% that re%ates to the re0!ireents of na-i&ation.
Art. B53. The a&ent cannot or'er a ne) -oya&e, nor a2e
contracts for a ne) charter, nor ins!re the -esse%, )itho!t the a!thority
of her o)ner or $y -irt!e of a reso%!tion of the a.ority of the co6
o)ners, !n%ess these #o)ers )ere &rante' hi in the certificate of his
a##ointent.
If he sho!%' ins!re the -esse% )itho!t a!thority therefor he
sha%% $e s!$si'iari%y %ia$%e for the so%-ency of the !n'er)riter.
Art. B55. The ana&in& a&ent of an association, sha%% &i-e
his co6o)ners an acco!nt of the res!%ts of each -oya&e of the -esse%,
)itho!t #re.!'ice to a%)ays ha-in& the $oo2s an' corres#on'ence
re%atin& to the -esse% an' to its -oya&es at their 'is#osa%.
Art. *++. After the acco!nt of the ana&in& a&ent has $een
a##ro-e' $y a re%ati-e a.ority, the co6o)ners sha%% satisfy the
e(#enses in #ro#ortion to their interest, )itho!t #re.!'ice to the ci-i%
or criina% actions )hich the inority ay 'ee fit to instit!te
after)ar's.
In or'er to enforce the #ayent, the ana&in& a&ents sha%%
$e entit%e' to an e(ec!tory action, )hich sha%% $e instit!te' $y -irt!e of
a reso%!tion of the a.ority, an' )itho!t f!rther #rocee'in&s than the
ac2no)%e'&ent of the si&nat!res of the #ersons )ho -ote' for the
reso%!tion.
J 4ote = an e7ecutor' action is no longer recogniAed in this Burisdiction
Art. *+1. Sho!%' there $e any #rofits, the co6o)ners ay
'ean' of the ana&in& a&ent the ao!nt '!e the, $y eans of an
e(ec!tory action )itho!t f!rther re0!isite than the ac2no)%e'&ent of
the si&nat!res in the instr!ent a##ro-in& the acco!nt.
Art. *+D. The a&ent sha%% in'enify the ca#tain for a%% the
e(#enses he ay ha-e a'e fro his o)n f!n's or fro those of
other #ersons, for the $enefit of the -esse%.
Art. *+;. Fefore a -esse% &oes o!t to sea the a&ent ay at
his 'iscretion, 'ischar&e the ca#tain an' e$ers of the cre) )hose
contract 'i' not state a 'efinite #erio' nor a 'efinite -oya&e, #ayin&
the the sa%aries earne' accor'in& to their contracts, an' )itho!t any
in'enity )hatsoe-er, !n%ess there is an e(#resse' an' s#ecific
a&reeent in res#ect thereto.
Art. *+?. If the ca&tain or an' other member of the cre* should
be discharged during the )o'age, the' shall recei)e their salar' until their
return to the &lace *here the contract *as made, unless there are good
reasons for the discharge, all in accordance *ith Art. /;/ et se+. of this
Code.
Art. *+B. If the contracts of the ca#tain an' e$ers of the
cre) )ith the a&ent sho!%' $e for a 'efinite #erio' or -oya&e, they
cannot $e 'ischar&e' !nti% the f!%fi%%ent of their contracts, e(ce#t for
reasons of ins!$or'ination in serio!s atters, ro$$ery, theft, ha$it!a%
'r!n2enness, an' 'aa&e ca!se' to the -esse% or to its car&o $y
a%ice or anifest or #ro-en ne&%i&ence.
Art. *+*. If the ca#tain sho!%' $e a #art o)ner in the -esse%,
he ay not $e 'ischar&e' !n%ess the a&ent ret!rns to hi the ao!nt
of his interest therein, )hich, in the a$sence of an a&reeent $et)een
the #arties, sha%% $e a##raise' $y e(#erts a##ointe' in the anner
esta$%ishe' in the %a) of ci-i% #roce'!re.
Art. *+1. If the ca#tain )ho is a #art o)ners sho!%' ha-e
o$taine' the coan' of the -esse% $y -irt!e of a s#ecia% a&reeent
containe' in the artic%es of co#artnershi#, he cannot $e 'e#ri-e'
thereof e(ce#t for the reasons entione' in Artic%e *+B.
Art. *+3. In case of the -o%!ntary sa%e of the -esse%, a%%
contracts $et)een the a&ent an' ca#tain sha%% terinate, reser-in& to
the %atter his ri&ht to the in'enity )hich ay $e #ro#er, accor'in& to
the a&reeents a'e )ith the a&ent.
The -esse% so%' sha%% reain s!$.ect to the sec!rity of the
#ayent of sai' in'enity if, after the action a&ainst the -en'or has
$een instit!te', the %atter sho!%' $e inso%-ent.
Art. *13. The ca#tain sha%% $e ci-i%%y %ia$%e to the shi# a&ent
an' the %atter to the thir' #ersons )ho ay ha-e a'e contracts )ith
the forer 6
1. Hor a%% the 'aa&es s!ffere' $y the -esse% an' its car&o
$y reason of )ant of s2i%% or ne&%i&ence on his #art. If a is'eeanor
or crie has $een coitte' he sha%% $e %ia$%e in accor'ance )ith the
Pena% /o'e.
D. Hor a%% the thefts an' ro$$eries coitte' $y the cre),
reser-in& his ri&ht of action a&ainst the &!i%ty #arties.
;. Hor the %osses, fines, an' confiscations i#ose' on
acco!nt of -io%ation of the %a)s an' re&!%ations of c!stos, #o%ice,
hea%th, an' na-i&ation.
?. Hor the %osses an' 'aa&es ca!se' $y !tinies on $oar'
the -esse%, or $y reason of fa!%ts coitte' $y the cre) in the ser-ice
an' 'efense of the sae, if he 'oes not #ro-e that he a'e f!%% !se of
his a!thority to #re-ent or a-oi' the.
B. Hor those arisin& $y reason of a is!se of #o)ers an'
nonf!%fi%%ent of the '!ties )hich #ertain to hi in accor'ance )ith
Artic%es *1+ an' *1D.
*. Hor those arisin& $y reason of his &oin& o!t of his co!rse
or ta2in& a co!rse )hich, in the o#inion of the officers of the -esse%, at
a eetin& atten'e' $y the shi##ers or s!#ercar&oes )ho ay $e on
$oar', he sho!%' not ha-e ta2en )itho!t s!fficient ca!se.
No e(ce#tion )hatsoe-er sha%% e(e#t hi fro his o$%i&a6
tion.
1. Hor those arisin& $y reason of his -o%!ntari%y enterin& a
#ort other than his 'estination, )ith the e(ce#tion of the cases or
)itho!t the fora%ities referre' to in Artic%e *1D. 3. Hor those arisin&
$y reason of the nono$ser-ance of the #ro-isions containe' in the
re&!%ations for %i&hts an' ane!-ers for the #!r#ose of #re-entin&
co%%isions.
Art. /1! &ro)ides for the direct res&onsibilit' of the shi&o*ner and shi&agent
to third &ersonsG the ca&tain shall be ci)ill' liable to the shi& agent and the
latter is the one liable to third &ersons 2his article a&&lies to breaches
of contract and tortious negligence of the ca&tain
But *here the )essel is totall' chartered for use of a single &art',
the shi&o*ner and that &art' ma' )alidl' sti&ulate that the latter shall be
e7em&t from liabilit' for the negligence of the ca&tain and cre*
PAGE 46
TRANSPORTATION AND MARITIME LAW
Reason for i#osition of %ia$i%ity on o)ner for 'aa&es s!ffere' $y
thir' #ersons occasione' $y the acts of the ca#tain9 2o &lace the
&rimar' liabilit' u&on the &erson *ho has actual control o)er the conduct of
the )o'age and *ho has the most ca&ital embar:ed in the )enture, namel',
the o*ner of the shi&, lea)ing him to obtain recourse, from other indi)iduals
*ho ha)e been dra*n into the )enture as shi&&ers
2he shi&&ers and &assengers in ma:ing contracts *ith the
ca&tain do so through the confidence the' ha)e in the shi&o*ner *ho
a&&ointed him 66R the' &resume that the o*ner made a most careful
in)estigation before a&&ointing him
Distinction $et)een %ia$i%ity for %a)f!% an' !n%a)f!% acts 9
2he la*ful acts and obligations of the ca&tain beneficial to the
)essel ma' be enforced as against the agentIo*ner for the reason that such
obligations arise from the contract of agenc' # &ro)ided that the ca&tain
does not e7ceed his authorit'$
As to an' liabilit' incurred b' the ca&tain through his unla*ful
acts, the shi& agent is sim&l' subsidiaril' liable
Lia$i%ities of ca#tain9 the res&onsibilit' of the ca&tain e7tends to e)er'
fraudulent or negligent act of an' &erson in the com&lement, in the
e7ecution of his em&lo'ment 66R he does not res&ond for &ersonal inBuries of
the cre* arising from &ersonal +uarrels but he is liable for damages to
&ersons or &ro&ert' occasioned b' a maneu)ering of the )essel, for failure
to follo* international rules and regulations, for failure to ta:e the
&recautions to &re)ent e)er' damage &ossible to the )essel *hich has
suffered an a)erage
3tandard >il )s Castelo 0- Phil -1/
<= Castelo, o*ner of the interisland steamer Batangueno,
contracted *ith Chumbu+ue sti&ulating that for a term of one 'ear, the latter
shall use it in con)e'ing cargoG that the cre* should be su&&lied b' the
o*nerG and that the charterer should ha)e no control o)er the ca&tain and
cre* than to s&ecif' the )o'ages. Plaintiff deli)ered &etroleum *hich *as
&laced on dec:. %hile the steamer *as on her *a', a t'&hoon came,
com&elling the ca&tain to Bettison the &etroleum. %hen the storm abated,
the shi& made &ort and 1; cases of &etroleum *ere reco)ered, but the
remainder *as *holl' lost. Plaintiff brought action to reco)er the &etroleum
)alue against the shi&o*ner. C<I rendered Budgment for &laintiff.
Celd = >rdinaril', the loss of cargo carried on dec: shall not be considered
as general a)erage loss, as e7&ressed in the Kor:6 Ant*er& Rules. 2his
rule, first made during the da's of sailing )essels has changed and it is no*
generall' held that Bettisoned goods carried on dec:, according to the
customs of trade, b' steam )essels na)igating coast*ise and inland *aters,
are entitled to contribution as general a)erage loss. 2he reason for this, in
coast*ise trade, is that boats are small and )o'ages are short, *ith the
result that the coasting )essel can use more circums&ection about the
condition of the *eather at de&arture time. It is e)ident therefore, that the
loss of the &etroleum is a general a)erage *ith the result that &laintiff is
entitled to reco)er an amount bearing such &ro&ortion to its total loss as the
)alue of both shi& and cargo bears to the )alue of shi& and entire cargo
before Bettison *as effected.
It is uni)ersall' recogniAed that the ca&tain is the re&resentati)e
of the o*ner and both under Art. 1!/ of the Code of Commerce, are ci)ill'
liable for the acts of the master. %hen Bettison of cargo occurs, it is the dut'
of the ca&tain to effect the adBustment, li+uidating and distribution of the
general a)erageG his failure ga)e rise to liabilit' for *hich the o*ner of the
shi& must ans*er.
2he o*ner of the shi& ordinaril' has )astl' more ca&ital
embar:ed u&on a )o'age than has an' shi&&er of cargo. @oreo)er, the
shi&o*ner, in ca&tainHs &erson, has com&lete and e7clusi)e control of the
cre* and shi& na)igation. It is therefore &ro&er that an' &erson *hose
&ro&ert' ma' ha)e been cast should ha)e a right of action directl' against
the shi&o*ner for breach of dut' *hich the la* im&osed on the ca&tain *ith
res&ect to such cargo. 2he e)ident intention of the Com. Code is to &lace
&rimar' liabilit' u&on the &erson *ho has actual control o)er the conduct of
the )o'age and *ho has most ca&ital in the )enture, namel', the shi&o*ner,
lea)ing him to obtain recourse, as it is )er' eas' to do, from other
indi)iduals *ho ha)e been dra*n into the )enture as shi&&ers. Eefendant is
therefore liable.
Araullo, and A)ancena, dissenting =
Action for reco)er', if an', should be brought not against the
defendant o*ner but against the ca&tain thereof.
#a$ Res&onsibilities and liabilities
Ku Con )s I&il 01 Phil ""?
<= Ku deli)ered to I&il and 3olamo P 01? for deli)er' from Catmon
to Cebu aboard a banca named @aria of *hich Fauron *as the o*ner and
I&il and 3olamo, the master and su&ercargo, res&ecti)el'. 2he mone'
together *ith )arious merchandise belonging to &laintiff *as to be carried
from the &ort of Cebu to Catmon in Cebu. 2he mone' *as &laced b' Ku in
his trun: and *as transferred to that of I&il. 2hat night, the *indo* of the
stateroom in *hich the trun: containing the mone' *as :e&t *as bro:en
through b' &ersons not identified and through *hich the said trun: *as
stolen. It *as found at the trial that I&il and 3olamo *ere negligent in
guarding the mone' because the' *ere sound aslee& at the time of the theft
and the' assigned no one to stand guard during the night. 2heir defense
*as that Ku chartered and had control and res&onsibilit' of the banca and
that the theft *as due to KuHs negligence. 2he C<I held I&il and 3olamo
negligent and held Fauron liable as DR and shi&o*ner under Articles 1!/,
1!" and /1! of the Code of Commerce.
Celd = I&il and 3olamo, as carriers and de&ositories of the mone' *ere liable
under the Ci)il Code, the theft not being a fortuitous e)ent or of force
maBeure and the' being manifestl' negligent and at fault.
As to the liabilit' of Fauron, the 3C &roceeded b' first defining
the banca 5@aria5 as *ithin the meaning of the term 5)essel.5 2hus,
according to the foregoing definitions #b' the @ercantile Code, b' Reus in
Commentaries on the Code of Commerce, and b' Blanco$ *e hold that the
banca 5@aria5 chartered b' Ku Con from Fauron, *as a 5)essel5 under
@ercantile Fa* and the Code of Commerce. I&il, the master of the banca,
*as also held to be the ca&tain #masters are to small )essels as ca&tains
are to big ones$. Under Arts. 1!" and /1!, the shi&o*ner shall be ci)ill'
liable to third &ersons *hen the ca&tain of the )essel causes the damage or
loss to goods entrusted to him b' said third &ersons under a contract to
carr' said goods. 2hus, it is *ell and god that the shi&o*ner be not held
criminall' liable for such crimes or +uasi crimes but he cannot be e7cused
from liabilit' for the damage and harm *hich in conse+uence of those acts
ma' be suffered b' the third &arties *ho contracted *ith the ca&tain in his
double ca&acit' of agent and subordinate of the shi&o*ner himself. In
maritime commerce, the shi&&ers and &assengers in ma:ing contracts *ith
the ca&tain do so through the confidence the' ha)e in the shi&o*ner *ho
a&&ointed him.
2he o*ner of a minor craft *ho has e+ui&&ed and )ictualed it for
the &ur&ose of using it in the trans&ortation of merchandise from one &ort to
another is under the la* a shi&o*ner and the master of the craft is to be
considered as its ca&tain in the legal acce&tation of this *ord, and the
former must be held ci)ill' liable for indemnities in fa)or of third &arties to
*hich the conduct of the masterIca&tain ma' gi)e rise in the custod' of the
effects laden on the craft, and for all losses *hich, through his fault or
negligence, ma' occur to the merchandise or effects deli)ered to him for
their trans&ortation as *ell as for the damages suffered b' those *ho
contracted *ith him, in conse+uence of misdemeanors and crimes
committed b' him or b' the members of the cre* of the craft.
@anila 3teamshi& )s Abdulhaman 1?? Phil ;-
<= At around " &.m., @IF Consuelo ., o*ned b' Fim Cong 2o, laden
*ith cargoes and &assengers left Pamboanga Cit' bound for 3io:on under
the command of <austino @acrohon. Among her &assengers *ere &laintiff
Insa Abdulhaman, his *ife, and their 1 :ids. >n the same night, the @I3
Bo*line Lnot o*ned b' the @anila 3teamshi& Co. *ere na)igating from
@ariboBoc to*ards Pamboanga Cit'. 2he *eather then *as considered fair.
At around 1? P@, *ithout an' *arning to the resting &assengers,
both )essels collided. @IF Consuelo . ca&siAed, resulting in the death of
AbdulhamanHs fi)e children. 2he abo)e facts found b' the Board of @arine
In+uir', *as used b' the C<I to hold the o*ners of both )essels solidaril'
liable to Abdulhaman for P -?,"!0 as damages. 2he CA, ho*e)er,
e7em&ted Fim from liabilit' b' reason of the sin:ing and total loss of his
)essel. Cence, this &etition b' the @anila 3teamshi& Co. +uestioning the
e7em&tion of Fim *hile also alleging its e7em&tion ha)ing had e7ercised
due diligence in the selection of its DDs.
Celd = #1$ %hile it is true that &laintiffHs action against &etitioner is based on
a tort or +uasi6delict, the tort in +uestion is not a ci)il tort under the Ci)il
Code but is a maritime tort resulting in a collision at sea, go)erned b' Arts.
!-/6; of the Code of Commerce, *hile the o*ners of both colliding
)essels are solidaril' liable for damages caused. 2his direct res&onsibilit' is
recogniAed in Art. /1! of the Code of Commerce, under *hich the ca&tain
PAGE 47
TRANSPORTATION AND MARITIME LAW
shall be ci)ill' liable to the shi& agent, and the latter is the one liable to third
&ersons.
In fact it is a general &rinci&le *ell established in the maritime la*
and custom, that shi&o*ners and shi&agents are ci)ill' liable for the acts of
the ca&tain #Art. 1!/$ and for the indemnities due to the third &ersons #Art.
1!"$. 2his direct liabilit' moderated and limited b' the o*nerHs right of
abandonment of the )essel and earned freight #Art. 1!"$ has been declared
to e7ist not onl' in the case of breached contracts but also in cases of
tortious negligence.
It is eas' to see that to admit the defense of the diligence of a
bonus &ater familias in the selection and )igilance of the officers and cre*
as e7em&ting the shi&o*ner from an' liabilit' for their faults, *ould render
nugator' the solidar' liabilit' in Art. !-" for the greater &rotection of inBured
&arties.
#-$ It is to be noted that @acrohon *as not dul' licensed as a
shi&master and Fim :ne* of this fact *hen it hired the former, thus
deliberatel' increasing the ris: to *hich the un:no*ing &assengers *ould be
subBected. 2he liabilit' of Fim, cannot, therefore be identical to that of a
shi&o*ner *ho bears in mind the safet' of the &assengers b' em&lo'ing
dul' licensed officers. 2o hold, as the CA had done, that Fim ma' limit his
liabilit' to the )alue of his )essels, is to erase all differences bet*een
com&liance *ith la* and the deliberate disregard thereof.
2he international rule is to the effect that the right of
abandonment of )essels, as a legal limitation of a shi&o*nerHs liabilit', does
not a&&l' to cases *here the inBur' of the a)erage is due to shi&o*nerHs o*n
fault.
#b$ 2he doctrine of limited liabilit'
J Eoctrine of limited liabilit' is &ro)ided for in Arts. B31, B5+ an' 3;1
Art. B31. The shi# a&ent sha%% a%so $e ci-i%%y %ia$%e for the
in'enities in fa-or of thir' #ersons )hich arise fro the con'!ct of
the ca#tain in the care of the &oo's )hich the -esse% carrie'@ $!t he
ay e(e#t hise%f therefro $y a$an'onin& the -esse% )ith a%% her
e0!i#ents an' the frei&hta&e he ay ha-e earne' '!rin& the -oya&e.
A shi&agent is liable not*ithstanding the insol)enc' of the &rinci&alIo*ner
BU2 the shi& agent ma' e7em&t himself from liabilit' b' abandoning the
)essel *ith all her e+ui&ment and the freight it ma' ha)e earned during the
)o'age 66R the effect of abandonment is to e7tinguish the liabilit' of the
shi&agent
2he shi& agentHs liabilit' is confined to that *hich he is entitled as
a matter of right to abandon = the )essel *ith all her e+&t. and the freight it
ma' ha)e earned during the )o'age and to the insurance thereof
Fimited liabilit' is not a&&licable *hen no abandonment of )essel
is made
Effect of a$an'onent9 An abandonment amounts to an offer of the )alue
of the )essel, of her e+ui&ment, and freight mone' earned 66R results in the
cessation of the res&onsibilit' of the o*nerIagent
Abandonment cannot be refused b' creditors
2his a&&lies to all cases *here the o*nerIagent ma' be held
liable for the negligent or illicit acts of the ca&tain
Effect of %oss or 'estr!ction of -esse%9 2he shi&agentHs liabilit' is merel'
co6e7tensi)e *ith his interest in the )essel such that the total loss thereof
results in its e7tinction 66R the total destruction of the )essel e7tinguishes a
maritime lien as there is no longer an' res to *hich it can attach.
Thre <;= cases )here the %oss of the -esse% e(tin&!ishes the
%ia$i%ity of the shi#o)ner9
#1$ under 1!", liabilit' arising from the conduct of the ca&tain in
the )igilance of the goods and for the safet' of the &assengers and for an'
liabilit' arising from the negligent or illicit acts of the ca&tain for *hich the
shi&o*ner or shi& agent ma' be held liable
#-$ under /0;, liabilit' for the *ages of the ca&tain and the cre*
and for ad)ances made b' the shi&agent if the )essel is lost b' shi&*rec:
or ca&ture
#;$ under !;", liabilit' for collision
E(ce#tions9
#1$ Eoctrine does not a&&l' *here shi&o*ner is at fault = the doctrine is
&remised on the condition that the death or inBur' to the &assenger occurred
b' reason of the fault or negligence of the ca&tain onl'
#-$ Eoctrine does not a&&l' in cases of %or:menHs Com&ensation 66R such
com&ensation has nothing to do *ith maritime commerceG it is an item in the
cost of &roduction *hich must be included in the budget of an' *ell6
managed industr'
#;$ 2otal destruction of the )essel does not affect the liabilit' of the o*ner for
re&airs on the )essel com&leted before its loss 66R o*ners of a )essel are
liable for necessar' re&airsG its liabilit' for re&airs remains unaffected b' the
loss of the thing
Reason for %iite' %ia$i%ity9 2his doctrine had its origin *hen maritime
trade and sea )o'age *as attended b' innumerable haAards and &erils 66R
to offset against these ad)erse conditions and to encourage shi&building
and maritime commerce, it *as deemed necessar' to confine the liabilit' of
the o*ner or agent arising from the o&eration of a shi& to the )essel, e+&t.
and freight or insurance, if an'
Liite' %ia$i%ity is e-i'ence of the rea% an' hy#othecary nat!re of
aritie %a)9
#1$ limitation of liabilit' to the actual )alue of the )essel and freightG #-$ right
to retain the cargo and the embargo and detention of the )essel in cases
*here the ordinar' ci)il la* *ould not allo* more than a &ersonal action
against the debtor or &ersonal liable 66R the maritime creditor ma' attach the
)essel itself to secure his claim *ithout *aiting for a settlement of his rights
b' a final Budgment, e)en to the &reBudice of a third &erson
@anila 3teamshi& )s Abdulhaman 1?? Phil ;-
Issue = Co* is the doctrine of limited liabilit' a&&lied in this case *ith @I.
Consuelo(
Celd = 2he direct liabilit' ma' be moderated or limited b' the shi&o*nerHs
right to abandon the )essel and earned freight. Co*e)er, this right of
abandonment of )essels, as a legal limitation of a shi&o*nerHs liabilit' does
not a&&l' to cases *here the inBur' or the a)erage is due to shi&o*nerHs
fault. 2hus, the o*ner of Consuelo is solidaril' liable *ith @anila 3teamshi&,
the former ha)ing caused the )essel to sail *ithout licensed officers, for
inBuries caused b' the collision o)er and be'ond the )alue of the said
)essel.
In the a&&lication for &ermission to o&erate, des&ite lac: of
trained cre*, Fim Cong 2o e)en declared e7&ressl', 5that in case of an'
accident, damage, or loss, I shall assume full ris:s and res&onsibilit' for all
conse+uences, thereof.5 Cence, Fim cannot esca&e liabilit' because of the
sin:ing of the )essel. >&erating *ith an unlicensed shi&master constitutes
such negligence as *ould &re)ent the shi&o*ner from claiming the benefit
of limited liabilit' under Art. 1!".
Kangco )s Faserna "; Phil ;;?
<= Petitioner KangcoHs )essel 33 4egros left Romblon for @anila.
2he ca&tain *as dul' ad)ised and his attention *as called b' the
&assengers that t'&hoon 3ignal 4o. - *as u&. But the boat &roceeded to
sail after some loading. 2he boat *as o)erloaded *ith cargo and
&assengers #1!? instead of onl' 1-;$. After t*o *ee:s of sailing, the sea
became too dangerous. 2he ca&tain ordered that the' return to Romblon
and *hile turning, a big *a)e caught them on the side causing it to ca&siAe.
Among the &assengers *ho &erished *ere the relati)es of res&ondents
Faserna.
In the se&arate ci)il action for damages for the death of the
&assengers, the C<I held Kangco liable for a total of P;,1!?. After the
rendition of the Budgment, Kangco sought to abandon the )essel to
&laintiffsIres&ondents *ith all its e+ui&ments. Abandonment *as denied.
2he CA affirmed the Budgment.
Celd = Art. 1!" accords a shi&o*ner or agent the right of abandonmentG and
b' necessar' im&lication, his liabilit' is confined to that *hich he is entitled
as of right to abandon 66 the )essel *ith all her e+ui&ments and the freight it
ma' ha)e earned during the )o'age. In other *ords, such liabilit' is limited
to the )alue of the )essel and other things a&&ertaining thereto such that a
total loss thereof results in its e7tinction. Although the article a&&ears to
deal onl' *ith the limited liabilit' of shi&o*ners or agents for damages
arising from the misconduct of the ca&tain in the care of the goods *hich
the )essel carries, this is a mere deficienc' of language and in no *a'
indicates the true e7tent of such liabilit', to *it, the benefit of limited liabilit'
a&&lies in all cases #as regards both goods and &assengers of the )essel$
*herein the shi&o*ner or agent ma' &ro&erl' be held for the negligent or
illicit acts of the ca&tain.
2he reason for the limited liabilit' is the real and h'&othecar'
nature of maritime la* as distinguished from ci)il la* and mercantile la* in
general. As e)idence of this real nature, *e ha)e #1$ the limitation of the
liabilit' of the agents to the actual )alue of the )essel and the freight mone'
PAGE 48
TRANSPORTATION AND MARITIME LAW
and #-$ the right of the maritime creditor to retain the cargo, and the
embargo and detention of the )essel in cases *here the ordinar' ci)il la*
*ould not allo* more than a &ersonal action against the debtor or &erson
liable. 2hus, e)en assuming that Kangco is liable for breach of contract
because his relationshi& to the &assengers rests on a contract of carriage,
the e7clusi)el' real and h'&othecar' nature of maritime la* still o&erates to
limit his liabilit' to the )alue of the )essel or to the insurance thereon, if an'.
In this case, the )essel *as not insured. %hether the abandonment of the
)essel sought b' the &etitioner in instant case *as in accordance *ith la*
or not, is immaterial. 2he )essel ha)ing totall' &erished, an' act of
abandonment *ould be an idle ceremon'. Petitioner is absol)ed from all
com&laints.
Abueg )s 3an Eiego "" Phil ";?
<= Bartolome 3an Eiego *as the o*ner of - motorshi&s, 3an Eiego
II and Bartolome 3. Eionisia Abueg is the *ido* of Amado 4uneA, *ho *as
a machinist on board the @I3 3an Eiego II. @arciana de 3al)acion is the
*ido* of .ictoriano 3al)acion, *ho *as a machinist on board the @I3
Bartolome 3. Rosario >ching is the *ido* of <rancisco >ching, *ho *as
the ca&tain of the @I3 Bartolome 3. 2he - shi&s, *hile engaged in fishing
o&erations around @indoro Island on >ctober 101, *ere caught b' a
t'&hoon as a conse+uence of *hich the' *ere sun: and totall' lost. 4uneA,
3al)acion and >ching *hile acting in their ca&acities &erished in the
shi&*rec:. 2he )essels *ere not co)ered b' an' insurance. 2he *ido*s
*ere a*arded com&ensation under the %or:menHs Com&ensation Act b' the
C<I.
Celd = 2he real and h'&othecar' nature of the liabilit' of the shi&o*ner or
agent embodied in the &ro)isions of the @aritime Fa*, had its origin in the
&re)ailing conditions of the maritime trade and sea )o'ages during the
medie)al ages, attended b' innumerable haAards and &erils. 2o offset
against these ad)erse conditions and to encourage shi&building and
maritime commerce, it *as deemed necessar' to confine the liabilit' of the
o*ner or agent arising from the o&eration of a shi& to the )essel, e+ui&ment,
and freight, or insurance, if an', so that if the shi&o*ner or agent abandoned
the shi&, e+ui&ment, and freight, his liabilit' *as e7tinguished.
2he &ro)isions of the Code of Commerce regarding maritime
commerce ha)e no room in the a&&lication of the %or:menHs Com&ensation
Act *hich see:s to im&ro)e, and aims at the amelioration of, the condition
of laborers and DDs. 3aid Act creates a liabilit' to com&ensate DDs and
laborers in cases of inBur' recei)ed b' or inflicted u&on them, *hile engaged
in the &erformance of their *or: or em&lo'ment, or the heirs and
de&endents of such laborers and DDs in the e)ent of death caused b' their
em&lo'ment.
2he officers of motor shi&s engaged in fishing are industrial DDs
and are entitled to the benefits of the %or:menHs Com&ensation Act. If an
accident is com&ensable under the %CA, it must be com&ensated e)en
*hen the *or:manHs right is not recogniAed b' or is in conflict *ith other
&ro)isions of the Ci)il Code or Code of Commerce. 2he reason is that the
%CA *as enacted in abrogation of e7isting la*s.
Ceirs of Am&aro de los 3antos )s CA 1!/ 3CRA /0
<= @I. @indoro o*ned b' Com&ania @aritima sailed from @anila
bound for 4e* %ashington, A:lan. 3aid )essel met t'&hoon %elming on
the 3ibu'an 3ea, causing the death of man' of its &assengers, although
about 1;/ sur)i)ed. @auricio de los 3antos declared that he, his *ife and 0
children *ere aboard the boat together *ith their household utensils )alued
at P 1,???, *ith the intention of li)ing in A:lan &ermanentl'. Cis *ife and his
children *ere among the casualties. 2he Board of @arine In+uir' found that
the ca&tain and some officers of the cre* *ere negligent in o&erating the
)essel and im&osed u&on them a sus&ension andIor re)ocation of their
license certificates. 2his decision could not be e7ecuted against the ca&tain
*ho &erished *ith the )essel. 2he shi&o*ner alleged that no negligence *as
e)er established and in fact the' too: all the necessar' &recautions in
o&erating the )essel. <urthermore, the loss of li)es as a result of the
dro*ning of some &assengers, including the relati)es of the &laintiffs, *as
due to force maBeure because of the strong t'&hoon %elming. It also
&resented the findings of the Board of @arine In+uir' recommending that the
ca&tain be e7onerated and that the shi& *as in sea*orth' condition. 2he
C<I dismissed the com&laint in )ie* of lac: of sufficient e)idence. 2he CA
ruled that *hile concurring negligence on the &art of the ca&tain is im&utable
to @aritima, @aritima could not be held liable in damages based on the
&rinci&le of limited liabilit' of the shi&o*ner or shi&agent under Art. 1!" of
the Code of Commerce.
Celd = 2here is no dis&ute as to the finding of the ca&tainHs negligence. 2he
&resent contro)ers' centers on the +uestions of @aritimaHs negligence and
of the a&&lication of Art. 1!" of the Code of Commerce. Under this
&ro)ision, a shi&o*ner or agent has the right of abandonmentG and b'
necessar' im&lication, his liabilit' is confined to that *hich he is entitled as
of right to abandon 66 the )essel *ith all her e+ui&ments and the freight it
ma' ha)e earned during the )o'age. 2his rule is found necessar' to offset
against the innumerable haAards and &erils of a sea )o'age and to
encourage shi&building and marine commerce. 2he limited liabilit' doctrine
a&&lies not onl' to the goods but also in all cases li:e death or inBur' to
&assengers *herein the shi&o*ner of agent ma' &ro&erl' be held liable for
the negligent or illicit acts of the ca&tain. Art. 1!" s&ea:s onl' of situations
*here the fault or negligence is committed solel' b' the ca&tain. In cases
*here the shi&o*ner is li:e*ise to be blamed, Art. 1!" does not a&&l'.
3uch a situation *ill be co)ered b' the Ci)il Code &ro)isions on CCs.
>*ing to the nature of their business and for reasons of &ublic &olic', the'
are re+uired to obser)e D> diligence.
@aritimaHs claim that it had no information of t'&hoon %elming
until after the boat *as at sea is untenable in light of modern technolog'
*hich enables it to detect an' incoming atmos&heric disturbances. In fact,
the %eather Bureau issued a total of 1" *arnings or ad)isories of t'&hoon
%elming. In allo*ing the shi& to de&art late from @anila des&ite the
t'&hoon ad)isories, @aritima dis&la'ed lac: of foresight and minimum
concern for the safet' of its &assengers ta:ing into account the surrounding
circumstances of the case.
%hile the ca&tain *as negligent for o)erloading the shi&,
@aritima shares e+uall' in his negligence. @I. @indoro *as cleared for
de&arture at - P@ b' the Bureau of Customs and the Coast Guard but its
de&arture *as dela'ed for 0 hours. @aritima could not account for the dela'
because it neither chec:ed from the ca&tain the reasons behind the dela'.
It *as due to this interim that there is great &robabilit' that unmanifested
cargo and &assengers *ere loaded.
@aritima &resented e)idence of the sea*orth' condition of the
shi& &rior to its de&arture, including the installation of life sa)ing e+ui&ment
and other na)igational instruments. But it could not &resent e)idence that it
s&ecificall' installed a radar *hich could ha)e allo*ed the )essel to
na)igate safel' for shelter during the storm. An im&ortant de)ice such as
the radar could ha)e enabled the shi& to &ass through the ri)er and to
safet'.
@aritimaHs lac: of D> diligence cou&led *ith the negligence of
the ca&tain *ere the &ro7imate causes of the sin:ing of @I. @indoro.
@aritima is liable for the deaths and inBur' of the )ictims. It *as ordered to
&a' death indemnities to the heirs of the )ictims, moral damages, actual
damages and attorne'Hs fees.
#c$ 3&ecific rights and &rerogati)es
Art. B1B. Part o)ners of -esse%s sha%% en.oy the ri&ht of #re6
e#tion an' re'e#tion in the sa%es a'e to stran&ers@ $!t they can
on%y e(ercise it )ithin the nine 'ays fo%%o)in& the recor' of the sa%e in
the re&istry an' $y 'e%i-erin& the #rice at once.
Art. B5;. The o)ners of a -esse% sha%% ha-e #reference in her
charter o-er other #ersons, offerin& e0!a% con'itions an' #rice. If t)o
or ore of the forer sho!%' c%ai said right the one ha)ing greater
interest shall be &referred, and should the' ha)e an e+ual interest it shall be
decided b' lot.
Art. B5?. The #art o)ners sha%% e%ect the ana&er )ho is to
re#resent the in the ca#acity of a&ent.
The a##ointent of 'irector or a&ent sha%% $e re-oca$%e at
the )i%% of the #artners.
Art. B5*. The a&ent ay 'ischar&e the '!ties of ca#tain of
the -esse%, s!$.ect, in e-ery case, to the #ro-isions containe' in Artic%e
*+5.
If t)o or ore co6o)ners re0!est the #osition of ca#tain, the
'isa&reeent sha%% $e 'eci'e' $y a -ote of the e$ers@ an' if the
-ote sho!%' res!%t in a tie, the #osition sha%% $e &i-en to the #art o)ner
ha-in& the %ar&er interest in the -esse%.
If the interest of the #etitioners sho!%' $e the sae, an'
there sho!%' $e a tie, the atter sha%% $e 'eci'e' $y %ot.
PAGE 49
TRANSPORTATION AND MARITIME LAW
Art. *+5. /a#tains, asters or #atrons
of -esse%s !st $e Hi%i#inos, ha-e %e&a% ca#acity
to contract in accor'ance )ith this /o'e, an'
#ro-e the s2i%%, ca#acity, an' 0!a%ifications
necessary to coan' an' 'irect the -esse%, as
esta$%ishe' $y arine or na-i&ation %a)s,
or'inances, or re&!%ations, an' !st not $e
'is0!a%fie' accor'in& to the sae for the
'ischar&e of the '!ties of the #osition.
If the o)ner of a -esse% 'esires to $e the
ca#tain thereof, )itho!t ha-in& the %e&a%
0!a%ifications therefor, he sha%% %iit hise%f to the
financia% a'inistration of the -esse%, an' sha%%
intr!st the na-i&ation to a #erson #ossessin& the
0!a%ifications re0!ire' $y sai' or'inances n'
re&!%ations.
Art. *+1. Sho!%' there $e any #rofits, the co6 o)ners ay
'ean' of the ana&in& a&ent the ao!nt '!e the, $y eans of an
e(ec!tory action )itho!t f!rther re0!isite than the ac2no)%e'&ent of
the si&nat!res in the instr!ent a##ro-in& the acco!nt.
-. Ca&tains and @asters
#a$ Qualifications and licensing
RA 11";
Sec. ;. The Phi%i##ine /oast 4!ar' sha%% #erfor the fo%%o)in&
f!nctions 9 <e= to iss!e %icenses an' certificates to officers, #i%ots, a.or
an' inor #atrons an' seaen, as )e%% as s!s#en' an' re-o2e s!ch
%icenses an' certificates.
Art. *+5. /a#tains an' asters of -esse%s !st $e Hi%i#inos
ha-in& %e&a% ca#acity to $in' these%-es in accor'ance )ith this /o'e,
an' !st #ro-e that they ha-e the s2i%%, ca#acity, an' 0!a%ifications
re0!ire' to coan' an' 'irect the -esse%, as esta$%ishe' $y arine
%a)s, or'inances, or re&!%ations, or $y those of na-i&ation, an' that they
are not 'is0!a%ifie' accor'in& to the sae for the 'ischar&e of the '!ties
of that #osition.
If the o)ner of a -esse% 'esires to $e the ca#tain thereof an'
'oes not ha-e the %e&a% 0!a%ifications therefore, he sha%% %iit hise%f to
the financia% a'inistration of the -esse%, an' sha%% entr!st her
na-i&ation to the #erson #ossessin& the 0!a%ifications re0!ire' $y sai'
or'inances an' re&!%ations.
notes=
6 Ca&tain 6 one *ho go)erns )essels that na)igate the high seas or shi&s of
large dimensions and im&ortance, although the' ma' be engaged in coast*ise
trade
6 @aster 6 one *ho commands smaller shi&s engaged e7clusi)el' in coast*ise
trade
6 ca&tain and master ha)e the same meaning for maritime commerce
6 &atron 6 bancas
6 Roles of the ca&tain =
#1$ general agent of the shi&o*ner
#-$ technical director of the )essels
#;$ re&resents the go)ernment of the countr' under *hose flag he na)igates
#b$ Inherent Po*ers
Art. *1+. The fo%%o)in& #o)ers are inherent in the #osition of
ca#tain or aster of a -esse%9
1. To a##oint or a2e contracts )ith the cre) in the a$sence
of the shi# a&ent an' #ro#ose sai' cre), sho!%' sai' a&ent $e #resent@
$!t the a&ent ay not e#%oy any e$er a&ainst the ca#tainGs e(#ress
ref!sa%.
D. To coan' the cre) an' 'irect the -esse% to the #ort to its
'estination, in accor'ance )ith the instr!ctions he ay ha-e recei-e'
fro the shi# a&ent.
;. To i#ose, in accor'ance )ith the contracts an' the %a)s
an' re&!%ations of the erchants arine, on $oar' the -esse%,
correctiona% #!nishent !#on those )ho 'o not co#%y )ith his or'ers
or )ho con'!ct these%-es a&ainst 'isci#%ine, ho%'in& a #re%iinary
in-esti&ation on the cries coitte' on $oar' the -esse% on the hi&h
seas, )hich he sha%% t!rn o-er to the a!thorities, )ho are to ta2e
co&ni"ance thereof, at the first #ort to!che'.
?. To a2e contracts for the charter of the -esse% in the
a$sence of the shi# a&ent or of the consi&nee, actin& in accor'ance )ith
the instr!ctions recei-e' an' #rotectin& the interests of the o)ner )ith
!tost care.
B. To a'o#t a%% the eas!res )hich ay $e necessary to 2ee#
the -esse% )e%% s!##%ie' an' e0!i##e', #!rchasin& a%% that ay $e
necessary for the #!r#ose, #ro-i'e' there is no tie to re0!est
instr!ctions of the a&ent.
*. To #ro-i'e in sii%ar !r&ent cases an' on a -oya&e, for the
re#airs to the h!%% an' en&ines of the -esse% an' to her ri&&in& an'
e0!i#ent )hich are a$so%!te%y necessary in or'er for her to $e a$%e to
contin!e an' conc%!'e her -oya&e@ $!t if she sho!%' arri-e at a #oint
)here there is a consi&nee of the -esse%, he sha%% act in conc!rrence
)ith the %atter.
notes= 2he first three &o*ers cannot be renounced as the' relate to &ublic
order and are )ested in the ca&tain as a delegation of &ublic authorit'
Art. *11. In or'er to co#%y )ith the o$%i&ations entione' in
the fore&oin& artic%e, an' )hen he has no f!n's an' 'oes not e(#ect to
recei-e any fro the a&ent, the ca#tain sha%% #roc!re the sae in the
s!ccessi-e or'er state' $e%o)9
1. Fy re0!estin& sai' f!n's of the consi&nees of the -esse% or
the corres#on'ents of the shi# a&ent.
D. Fy a##%yin& to the consi&nees of the car&o or to the
#ersons intereste' therein.
;. Fy 'ra)in& on the shi# a&ent.
?. Fy $orro)in& the ao!nt re0!ire' $y eans of a $ottory
%oan.
B. Fy se%%in& a s!fficient ao!nt of the car&o to co-er the
ao!nt a$so%!te%y necessary to re#air the -esse% an' to e0!i# her to
#!rs!e the -oya&e.
In the t)o %ast cases he !st a##%y to the .!'icia% a!thori ty of
the #ort, if in the Phi%i##ines an' to the Hi%i#ino cons!%, if in a forei&n
co!ntry@ an' )here there sho!%' $e none, to the %oca% a!thority,
#rocee'in& in accor'ance )ith the #rescri#tions of Artic%e B3;, an' )ith
the #ro-isions of the %a) of ci-i% #roce'!re.
Art. B3;. If )hi%e on a -oya&e the
ca#tain sho!%' fin' it necessary to contract one or
ore of the o$%i&ations entione' in s!$'i-isions
3 an' 5 of artic% B3+, he sha%% a##%y to the .!'&e or
co!rt if he is in the Phi%i##ine territory, an'
other)ise to the cons!% of the Re#!$%ic of the
Phi%i##ines, sho!%' there $e one, an' in his
a$sence, to the .!'&e or co!rt or #ro#er %oca%
a!thority, #resentin& the certificate of the
re&istration sheet treate' of in Artic%e *1D an' the
instr!ents #ro-in& the o$%i&ation contracte'.
The .!'&e or co!rt, the cons!%, or the
%oca% a!thority, as the case ay $e, in -ie) of the
res!%t of the #rocee'in&s instit!tie', sha%% a2e a
te#orary eoran'! of their res!%t in the
certificate, in or'er that it ay $e recor'e' in the
re&istry )hen the -esse% ret!rns to the #ort of its
re&istry, or so that it can $e a'itte' as a %e&a%
an' #referre' o$%i&ation in case of sa%e $efore its
ret!rn, $y reason of the sa%e of the -esse% on
acco!nt of a 'ec%aration of !nsea)orthiness.
The oission of this fora%ity sha%%
a2e the ca#tain #ersona%%y %ia$%e for the cre'its
#re.!'ice' on his acco!nt.
#the ff. is not re+uired b' the outline$
Art. *1D. The fo%%o)in& '!ties are inherent in the office of
ca#tain9
1. To ha-e on $oar' $efore startin& on a -oya&e a 'etai%e'
in-entory of the h!%%, en&ines, ri&&in&, tac2%e, stores, an' other
e0!i#ents of the -esse%@ the na-i&ation certificate@ the ro%% of the
#ersons )ho a2e !# the cre) of the -esse%, an' the contracts entere'
into )ith the cre)@ the %ist of #assen&ers@ the hea%th certificate@ the
certificate of the re&istry #ro-in& the o)nershi# of the -esse%@ an' a%% the
o$%i&ations )hich enc!$er the sae !# to that 'ate@ the charters or
a!thenticate' co#ies thereof@ the in-oices or anifest of the car&o, an'
the instr!ent of the e(#ert -isit or ins#ection, sho!%' it ha-e $een
a'e at the #ort of 'e#art!re.
D. To ha-e a co#y of this /o'e on $oar'.
PAGE 50
TRANSPORTATION AND MARITIME LAW
;. To ha-e three fo%ioe' an' sta#e' $oo2s, #%acin& at the
$e&innin& of each one a note of the n!$er of fo%ios it contains, si&ne'
$y the arine officia%, an' in his a$sence $y the co#etent a!thority.
In the first $oo2, )hich sha%% $e ca%%e' >%o& $oo2,> he sha%%
enter e-ery 'ay the con'ition of the atos#here, the #re-ai%in& )in's,
the co!rse sai%e', the ri&&in& carrie', the horse#o)er of the en&ines, the
'istance co-ere', the ane!-ers e(ec!te', an' other inci'ents of
na-i&ation. Ee sha%% a%so enter the 'aa&e s!ffere' $y the -esse% in her
h!%% en&ines, ri&&in&, an' tac2%e, no atter )hat is its ca!se, as )e%% as
the i#erfections an' a-era&es of the car&o, an' the effects an'
conse0!ence of the .ettison, sho!%' there $e any@ an' in cases of &ra-e
reso%!tions )hich re0!ire the a'-ice or a eetin& of the officers of the
-esse%, or e-en of the #assen&ers an' cre), he sha%% recor' the 'ecision
a'o#te'. Hor the inforations in'icate' he sha%% a2e !se of the
$innac%e $oo2, an' of the stea or en&ine $oo2 2e#t $y the en&ineer.
In the secon' $oo2, ca%%e' the >acco!ntin& $oo2>, he sha%%
enter a%% the ao!nts co%%ecte' an' #ai' for the acco!nt of the -esse%,
enterin& s#ecifica%%y artic%e $y artic%e, the so!rces of the co%%ection, an'
the ao!nts in-este' in #ro-isions, re#airs, ac0!isition of ri&&in& or
&oo's, f!e%, o!tfits, )a&es, an' a%% other e(#enses. Ee sha%% f!rtherore
enter therein a %ist of a%% the e$ers of the cre), statin& their 'oici%es,
their )a&es an' sa%aries, an' the ao!nts they ay ha-e recei-e' on
acco!nts, either 'irect%y or $y 'e%i-ery to their fai%ies.
In the thir' $oo2, ca%%e' >frei&ht $oo2,> he sha%% recor' the
entry an' e(it of a%% the &oo's, statin& their ar2s an' #ac2a&es, naes
of the shi##ers an' of the consi&nees, #orts of %oa'in& an' !n%oa'in&,
an' the frei&ht earne'. In the sae $oo2 he sha%% recor' the naes an'
#%aces of sai%in& of the #assen&ers an' the n!$er of #ac2a&es of )hich
their $a&&a&e consists, an' the #rice of the #assa&e.
?. To a2e, $efore recei-in& the frei&ht, )ith the officers of
the cre), an' the t)o e(#erts, if re0!ire' $y the shi##ers an'
#assen&ers, an e(aination of the -esse%, in or'er to ascertain )hether
she is )aterti&ht, an' )hether the ri&&in& an' en&ines are in &oo'
con'ition@ an' if she has the e0!i#ent re0!ire' for &oo' na-i&ation,
#reser-in& a certificate of the eoran'! of this ins#ection, si&ne' $y
a%% the #ersons )ho ay ha-e ta2en #art therein, !n'er their %ia$i%ity.
The e(#erts sha%% $e a##ointe' one $y the ca#tain of the
-esse% an' the other one $y the #ersons )ho re0!est the e(aination,
an' in case of 'isa&reeent a thir' sha%% $e a##ointe' $y the arine
a!thority of the #ort.
B. To reain constant%y on $oar' the -esse% )ith the cre)
'!rin& the tie the frei&ht is ta2en on $oar' an' caref!%%y )atch the
sto)a&e thereof@ not to consent to any erchan'ise or &oo's of a
'an&ero!s character to $e ta2en on, s!ch as inf%aa$%e or e(#%osi-e
s!$stances, )itho!t the #reca!tions )hich are recoen'e' for their
#ac2in&, ana&eent an' iso%ation@ not to #erit that any frei&ht $e
carrie' on 'ec2 )hich $y reason of its 'is#osition, -o%!e, or )ei&ht
a2es the )or2 of the sai%ors 'iffic!%t, an' )hich i&ht en'an&er the
safety of the -esse%@ an' if, on acco!nt of the nat!re of the erchan'ise,
the s#ecia% character of the shi#ent, an' #rinci#a%%y the fa-ora$%e
season it ta2es #%ace, he a%%o)s erchan'ise to $e carrie' on 'ec2, he
!st hear the o#inion of the officers of the -esse%, an' ha-e the consent
of the shi##ers an' of the a&ent.
*. To 'ean' a #i%ot at the e(#ense of the -esse% )hene-er
re0!ire' $y na-i&ation, an' #rinci#a%%y )hen a #ort, cana%, or ri-er, or a
roa'stea' or anchorin& #%ace is to $e entere' )ith )hich neither he, the
officers nor the cre) are ac0!ainte'.
1. To $e on 'ec2 at the tie of si&htin& %an' an' to ta2e
coan' on enterin& an' %ea-in& #orts, cana%s, roa'stea's, an' ri-ers,
!n%ess there is a #i%ot on $oar' 'ischar&in& his '!ties. Ee sha%% not
s#en' the ni&ht a)ay fro the -esse% e(ce#t for serio!s ca!ses or $y
reason of officia% $!siness.
3. To #resent hise%f, )hen a2in& a #ort in 'istress, to the
aritie a!thority if in the Phi%i##ines an' to the Hi%i#ino cons!% if in a
forei&n co!ntry, $efore t)enty6fo!r ho!rs ha-e e%a#se', an' a2e a
stateent of the nae, re&istry, an' #ort of 'e#art!re of the -esse%, of its
car&o, an' reason of arri-a%, )hich 'ec%aration sha%% $e -ise' $y the
a!thority of $y the cons!% if after e(ainin& the sae it is fo!n' to $e
acce#ta$%e, &i-in& the ca#tain the #ro#er certificate in or'er to sho) his
arri-a% !n'er stress an' the reasons therefore. In the a$sence of arine
officia%s or of the cons!%, the 'ec%aration !st $e a'e $efore the %oca%
a!thority.
5. To ta2e the ste#s necessary $efore the co#etent a!thority
in or'er to enter in the certificate of the -esse% in the re&istry of the
-esse%s, the o$%i&ations )hich he ay contract in accor'ance )ith
Artic%e B3;.
1+. To #!t in a safe #%ace an' 2ee# a%% the #a#ers an'
$e%on&in&s of any e$ers of the cre) )ho i&ht 'ie on the -esse%,
'ra)in& !# a 'etai%e' in-entory, in the #resence of #assen&ers as
)itnesses, an', in their a$sence, of e$ers of the cre).
11. To con'!ct hise%f accor'in& to the r!%es an' #rece#ts
containe' in the instr!ctions of the a&ent, $ein& %ia$%e for a%% that he ay
'o in -io%ation thereof.
1D. To &i-e an acco!nt to the a&ent fro the #ort )here the
-esse% arri-es, of the reason therefore, ta2in& a'-anta&e of the
sea#hore, te%e&ra#h, ai%, etc., accor'in& to the cases@ notify hi the
frei&ht he ay ha-e recei-e', statin& the nae an' 'oi ci%e of the
shi##ers, frei&ht earne', an' ao!nts $orro)e' on $ottory $on',
a'-ise hi of his 'e#art!re, an' &i-e hi any inforation an' 'ate
)hich ay $e of interest.
1;. To o$ser-e the r!%es on the sit!ation of %i&hts an'
e-o%!tions to #re-ent co%%isions.
1?. To reain on $oar' in case of 'an&er to the -esse%, !nti%
a%% ho#e to sa-e her is %ost, an' $efore a$an'onin& her to hear the
officers of the cre), a$i'in& $y the 'ecision of the a.ority@ an' if he
sho!%' ha-e to ta2e a $oat he sha%% ta2e )ith hi, $efore anythin& e%se,
the $oo2s an' #a#ers, an' then the artic%es of ost -a%!e, $ein& o$%i&e'
to #ro-e in case of the %oss of the $oo2s an' #a#ers that he 'i' a%% he
co!%' to sa-e the.
1B. In case of )rec2 he sha%% a2e the #ro#er #rotest in '!e
for at the first #ort reache', $efore the co#etent a!thority or Hi%i#ino
cons!%, )ithin t)enty6fo!r ho!rs, statin& therein a%% the inci'ents of the
)rec2, in accor'ance )ith case 3 of this artic%e.
1*. To co#%y )ith the o$%i&ations i#ose' $y the %a)s an'
r!%es of na-i&ation, c!stos, hea%th, an' others.
4otes= Although the duties in Art. /1- are inherent in the ca&tain, the ci)il
liabilit' arising from the non6fulfillment thereof is not limited to the ca&tain,
since *hile the ca&tain is liable to the shi&agent, the shi&agent is liable to third
&ersons #Art. /1!$.
#not included in the outline$
Art. *DD. If )hen on a -oya&e the ca#tain sho!%' recei-e ne)s
of the a##earance of #ri-ateers or en of )ar a&ainst his f%a&, he sha%%
$e o$%i&e' to a2e the nearest ne!tra% #ort, infor his a&ents or
shi##ers, an' a)ait an occasion to sai% !n'er con-oy or !nti% the 'an&er
is o-er or to recei-e fina% or'ers fro the shi# a&ent or shi##ers.
#not included in the outline$
Art. *D?. A ca#tain )hose -esse% has &one thro!&h a
h!rricane or )ho $e%ie-es that the car&o has s!ffere' 'aa&es or
a-era&es, sha%% a2e a #rotest thereon $efore the co#etent a!thority at
the first #ort he to!ches )ithin the t)enty6fo!r ho!rs fo%%o)in& his
arri-a%, an' sha%% ratify it )ithin the sae #erio' )hen he arri-es at the
#%ace of his 'estination, ie'iate%y #rocee'in& )ith the #roof of the
facts, it not $ein& #eritte' to o#en the hatches !nti% after this has $een
'one.
The ca#tain sha%% #rocee' in the sae anner if, the -esse%
ha-in& $een )rec2e', he is sa-e' a%one or )ith #art of his cre), in )hich
case he sha%% a##ear $efore the nearest a!thority, an' a2e a s)orn
stateent of the facts.
The a!thority or the cons!% a$roa' sha%% -erify the sai' facts,
recei-in& s)orn stateents of the e$ers of the cre) an' #assen&ers
)ho ay ha-e $een sa-e', an' ta2in& s!ch other ste#s as ay he%# in
arri-in& at the facts, he sha%% a2e a stateent of the res!%t of the
#rocee'in&s in the %o& $oo2 an' in that of the sai%in& ate, an' sha%%
'e%i-er the ori&ina% recor's of the #rocee'in&s to the ca#tain, sta#e'
an' fo%ioe', )ith a eoran'! of the fo%ios, )hich he !st r!$ricate,
for their #resentation to the .!'&e or co!rt of the #ort of 'estination.
The stateent of the ca#tain sha%% $e $e%ie-e' if it is in
accor'ance )ith those of the cre) an' #assen&ers@ if they 'isa&ree', the
%atter sha%% $e acce#te', !n%ess there is #roof to the contrary.
#not included in the outline$
Art. *DB. C#on arri-a% at the #ort of 'estination, the ca#tain
sha%%, !n'er his #ersona% %ia$i%ity, t!rn o-er the car&o, )itho!t any
'efa%cation, to the consi&nees, an', in a #ro#er case, the -esse%, ri&&in&,
an' frei&hts to the a&ent, after ha-in& o$taine' the necessary
#erission fro the hea%th an' c!stos officers an' f!%fi%%e' the other
fora%ities re0!ire' $y the re&!%ations of the a'inistration.
PAGE 51
TRANSPORTATION AND MARITIME LAW
7If, $y reason of the a$sence of the consi&nee or on acco!nt of
the nona##earance of a %e&a% ho%'er of the in-oices, the ca#tain 'oes not
2no) to )ho he is to a2e the %e&a% 'e%i-ery of the car&o, he sha%%
#%ace it at the 'is#osa% of the #ro#er .!'&e or co!rt or a!thority, in or'er
that he ay 'eci'e )ith re&ar' to its 'e#osit, #reser-ation, an' c!sto'y.8
4otes= Under /1, the deli)er' of the cargo at the &ort of discharge
terminates the ca&tainHs res&onsibilit' as to the cargo
INTER6ORIENT MARINE ENTERPRISES A. NLR/ 8-;1 3 /;0 #10$9
<= 1. Ca&tain RiAalino 2a'ong *as em&lo'ed b' &etitioner shi&*oners
as master of a )essel for one 'ear. Cis instructions *ere to re&lenish bun:er
and diesel fuel and to sail to 3outh Africa , and there to load 1-?,??? metric
tons of coal.
-. %hile in CL, a storm hit, and &recautionar' measures *ere ta:en since the
)essel *as 10 'ears old and the turbo6charger *as lea:ing. 2he Ca&tain
re+uisitioned for su&&lies of o7'gen and acet'lene necessar' for the re&airs.
2he )essel sailed from CL to 3inga&ore.
;. %hile in 3inga&ore, the su&&lies *ere not a)ailable, hence after
consultation *ith the Chied Dngineer, the Ca&tain decided to dela' de&arture
and *ait for the su&&lies.
0. After the su&&lies *ere deli)ered, the )essel sailed for 3outh Africa, *here
u&on arri)al, the Ca&tain *as instructed to turn o)er his &ost to a ne* ca&tain.
Ce *as then re&atriated to the Phili&&ines.
1. Ca&tain 2a'ong filed *ith the P>DA a com&laint for illegal dismissal, *hich
*as dismissed.
/. >n a&&eal, the 4FRC re)ersed and ordered the shi&o*ner to &a' his salar'
for the une7&ired contract &lus one month lea)e benefit, and attorne'Hs fees.
Cence, this a&&eal.
I33UD= %I4 CAP2AI4 2AK>4G %A3 IFFDGAFFK EI3@I33DE(
CDFE= Kes.
1. It is *ell settled that confidential and managerial em&lo'ees cannot be
arbitraril' dismissed at an' time, and *ithout case as reasonabl' established
in an a&&ro&riate in)estigation.
-. 2he ca&tain of a )essel is a confidential and managerial em&lo'ee *ithin
the meaning of the abo)e doctrine. A master or ca&tain, for &ur&oses of
maritime commerce, is one *ho has command of a )essel. A ca&tain
commonl' &erforms three #;$ distinct roles= #1$ he is a general agent of the
shi&o*nerG #-$ he is also commander and technical director of the )esselG and
#;$ he is a re&resentati)e of the countr' under *hose flag he na)igates. >f
these roles, b' far the most im&ortant is the role &erformed b' the ca&tain as
commander of the )essel, for such role #*hich to our mind, is analogous to
that of 5Chief D7ecuti)e >fficer5 8CD>9 of a &resent6da' cor&orate enter&rise$
has to do *ith the o&eration and &rotection of the )essel during its )o'ag and
the &rotection of the &assengers #if an'$ and cre* and cargo. In his role as
general agent of the shi&o*ner, the ca&tain has authorit' to sign bills of lading,
carr' goods aboard and and deal *ith the freight earned, agree u&on rates and
decide *hether to ta:e cargo. 2he shi& ca&tain, as agent of the shi&o*ner,
has legal authorit' to enter into contracts *ith res&ect to the )essel and the
trading of the )essel, sub:ect to a&&licable limitations established b' statute,
contract or instructions and regulations of the shi&o*ner. 2o the ca&tain is
committed the go)ernance, care and management of the )essel. Clearl', the
ca&tain is )este *ith both management and fiduciar' functions.
;. @ore im&ortantl', a shi&Hs ca&tain must be accorded a reasonable measure
of discretionar' authorit' to decide *hat the safet' of the shi& and its cre*
and cargo s&ecificall' re+uires on a sti&ulated ocean )o'age. 2he ca&tain is
held res&onsible, and &ro&erl' so, for such safet'.
0. Com&agnie de Commerce ). Camburg is instructi)e in this connection. In
that case, the ca&tain of a German )essel at the &ort of 3aigon decided to
head for the &ort of @anila instead of the &orts of Eun:ir: and Camburg
because of %%I has been declared and in his Budgment, the )essel could not
reach its destination. 2he charterer sued for damages arising from the breach
of the charter &art', and unauthoriAed sale of the Cargo. 2he 3C held that the
master of the )essel had reasonable grounds to a&&rehend that the )essel
*as in danger of seiAure of ca&tur b' the <rench authorities in 3aigon and *as
Bustified b' necessit' to elect the court *hich he too: 6 to flee 3aigon for the
&ort of @anila 6 *ith the result that the shi&o*ner *as relie)ed from liabilit' for
the de)iation from the sti&ulated route and from liabilit' for the damage to the
cargo.
#c$ Prohibited acts and transactions
Art. *1;. A ca#tain )ho na-i&ates for frei&ht in coon or on
shares ay not a2e any se#arate transaction for his o)n acco!nt, an'
sho!%' he 'o so the #rofits sha%% $e%on& to the other #ersons intereste',
an' the %osses sha%% $e $orne $y hi a%one.
Art. *1B. Witho!t the consent of the shi# a&ent, the ca#tain
ay not ha-e hise%f s!$stit!te' $y another #erson@ an' sho!%' he 'o
so, $esi'es $ein& %ia$%e for a%% the acts of the s!$stit!te an' $o!n' to
#ay the in'enities entione' in the fore&oin& artic%e, the s!$stit!te as
)e%% as the ca#tain ay $e 'ischar&e' $y the shi# a&ent.
4otes= 2he duties of a ca&tain are essentiall' &ersonal due to the confidence
gi)en to him arising from the fact that he &ossesses the re+uired technical
abilit' and that he is a man *orth' of trust of the shi&o*ner
Art. *11. The ca#tain ay not contract %oans on res#on'entia
sec!re' $y the car&o, an' sho!%' he 'o so the contract sha%% $e -oi'.
Neither ay he $orro) oney on $ottory for his o)n
transactions, e(ce#t on the #ortion of the -esse% he o)ns, #ro-i'e' no
oney has $een #re-io!s%y $orro)e' on the )ho%e -esse%, an' #ro-i'e'
there 'oes not e(ist any other 2in' of %ien or o$%i&ation char&ea$%e
a&ainst the -esse%. When he is #eritte' to 'o so, he !st necessari%y
state )hat interest he has in the -esse%.
In case of -io%ation of this artic%e the #rinci#a%, interest, an'
costs sha%% $e char&e' to the #ri-ate acco!nt of the ca#tain, an' the shi#
a&ent ay f!rtherore 'ischar&e hi.
Art. *D1. A ca#tain )ho $orro)s oney on the h!%%, en&ine,
ri&&in&, or tac2%e of the -esse%, or )ho #%e'&es or se%%s erchan'ise or
#ro-isions o!tsi'e of the cases an' )itho!t the fora%ities #rescri$e' in
this /o'e, sha%% $e %ia$%e for the #rinci#a%, interest, an' costs, an' sha%%
in'enify for the 'aa&es he ay ca!se.
Ee )ho coits fra!' in his acco!nts sha%% rei$!rse the
ao!nt 'efra!'e', an' sha%% $e s!$.ect to the #ro-isions of the Pena%
/o'e.
Art. B3;. If the shi# $ein& on a -oya&e the ca#tain sho!%' fin'
it necessary to contract one or ore of the o$%i&ations entione' in
Nos. 3 an' 5 of Artic%e B3+, he sha%% a##%y to the .!'&e or co!rt if he is in
Phi%i##ine territory, an' other)ise to the Hi%i#ino cons!%, sho!%' there $e
one, an' in his a$sence to the .!'&e or co!rt or to the #ro#er %oca%
a!thority, #resentin& the certificate of the re&istry of the -esse% treate' of
in Artic%e *1D, an' the instr!ents #ro-in& the o$%i&ation contracte'.
The .!'&e or co!rt, the cons!% or the %oca% a!thority as the
case ay $e in -ie) of the res!%t of the #rocee'in&s instit!te', sha%%
a2e a te#orary eoran'! in the certificate of their res!%t, in or'er
that it ay $e recor'e' in the re&istry )hen the -esse% ret!rns to the #ort
of her re&istry, or so that it can $e a'itte' as a %e&a% an' #referre'
o$%i&ation in case of sa%e $efore the ret!rn, $y reason of the sa%e of the
-esse% $y -irt!e of a 'ec%aration of !nsea)orthiness.
The %ac2 of this fora%ity sha%% a2e the ca#tain #ersona%%y
%ia$%e to the cre'itors )ho ay $e #re.!'ice' thro!&h his fa!%t.
4otes= >bligations co)ered b' this article = #1$ &rice *hich has not been &aid
to the last )endorG #-$ for materials and labor in the construction of the )esselG
#;$ for the re&air, e+ui&ment and &ro)isioning *ith the )ictuals and fuelG #0$
loan on bottomr' before de&arture of the )esselG #1$ insurance &remiums
under Art. 1!? &ars. ! and .
;. >ther >fficers and Cre*
notes=
Art. /-/ 6 /;1 = sailing mate or second in command
Art. /;- 6 /;; = second mate or third in command
Com&lement of a )essel or cre* 6 all the &ersons on board, from the ca&tain to
the cabin bo', necessar' for the management, maneu)ers, and ser)iceG
includes the sailing mates, engineers, sto:ers, and other em&lo'ees.
PAGE 52
TRANSPORTATION AND MARITIME LAW

#a$ Contracts and formalities
Art. *;?. The ca#tain ay a2e !# his cre) )ith the n!$er
he ay consi'er a'-isa$%e, an' in the a$sence of Hi%i#ino sai%ors he ay
shi# forei&ners resi'in& in the co!ntry, the n!$er thereof not to e(cee'
one6fifth of the tota% cre). If in forei&n #orts the ca#tain sho!%' not fin'
a s!fficient n!$er of Hi%i#ino sai%ors, he ay a2e !# the cre) )ith
forei&ners, )ith the consent of the cons!% or arine a!thorities.
The a&reeents )hich the ca#tain ay a2e )ith the
e$ers of the cre) an' others )ho &o to a2e !# the co#%eent of
the -esse%s, to )hich reference is a'e in Artic%e *1D <o$%i&ations
inherent in the office of ca#tain= !st $e re'!ce' to )ritin& in the
acco!nt $oo2 )itho!t the inter-ention of a notary #!$%ic or c%er2 of
co!rt, si&ne' $y the #arties thereto, an' -ise' $y the arine a!thority if
they are e(ec!te' in Hi%i#ino territory, or $y the cons!%s or cons!%ar
a&ents of the Phi%i##ines if e(ec!te' a$roa', statin& therein a%% the
o$%i&ations )hich each one contracts an' a%% the ri&hts they ac0!ire,
sai' a!thorities ta2in& care that these o$%i&ations an' ri&hts are
recor'e' in a concise an' c%ear anner, )hich )i%% not &i-e rise to
'o!$ts or c%ais.
The ca#tain sha%% ta2e care to rea' to the the artic%es of this
/o'e )hich concern the, statin& in the sai' 'oc!ent that they )ere
rea'.
If the $oo2 inc%!'es the re0!isites #rescri$e' in Artic%e *1D,
an' there sho!%' not a##ear any si&ns of a%terations in its entries, it
sha%% $e a'itte' as e-i'ence in 0!estions )hich ay arise $et)een the
ca#tain an' the cre) )ith re&ar' to the a&reeents containe' therein
an' the ao!nts #ai' on acco!nt of the sae.
E-ery e$er of the cre) ay 'ean' of the ca#tain a co#y,
si&ne' $y the %atter, of the a&reeent an' of the %i0!i'ation of his )a&es,
as they a##ear in the $oo2.
4otes= 2he contract *ith a seaman has the nature of a lease of ser)ice, in
)irtue of *hich one &erson binds himself to &erform or to do the ser)ices or
*or:s for *hich he has signed himself in the )essel in consideration of the
com&ensation sti&ulated
#b$ Euties and liabilities
Art. *;B. A sai%or )ho has $een contracte' to ser-e on a
-esse% cannot rescin' his contract nor fai% to co#%y there)ith e(ce#t $y
reason of a %e&itiate i#e'ient )hich ay ha-e occ!rre'.
Neither can he #ass fro the ser-ice of one -esse% to another
)itho!t o$tainin& the )ritten consent of the -esse% on )hich he ay $e.
If, )itho!t o$tainin& sai' #erission, the sai%or )ho has
si&ne' for one -esse% sho!%' si&n for another one, the secon' contract
sha%% $e -oi', an' the ca#tain ay choose $et)een forcin& hi to f!%fi%%
the ser-ice to )hich he first $o!n' hise%f or %oo2 for a #erson to
s!$stit!te hi at his e(#ense.
Sai' sai%or sha%% f!rtherore %ose the )a&es earne' on his first
contract to the $enefit of the -esse% for )hich he ay ha-e si&ne'.
A ca#tain )ho, 2no)in& that a sai%or is in the ser-ice of
another -esse%, sho!%' ha-e a'e a ne) a&reeent )ith hi, )itho!t
ha-in& re0!este' the #erission referre' to in the fore&oin& #ara&ra#hs,
sha%% $e #ersona%%y %ia$%e to the ca#tain of the -esse% to )hich the sai%or
first $e%on&e' for that #art of the in'enity, referre' to in the thir'
#ara&ra#h of this artic%e, )hich the sai%or ay not $e a$%e to #ay.
#c$ Rights
Art. *;*. Sho!%' there $e no fi(e' #erio' for )hich a sai%or
has $een contracte', he cannot $e 'ischar&e' !nti% the en' of the ret!rn
-oya&e to the #ort )here he en%iste'.
Art. *;1. Neither ay the ca#tain 'ischar&e a sai%or '!rin& the
tie of his contract e(ce#t for .!st ca!se, the fo%%o)in& $ein& consi'ere'
as s!ch9
1. The #er#etration of a crie )hich 'ist!r$s or'er on the
-esse%.
D. Re#eate' ins!$or'ination, )ant of 'isci#%ine, or non6
f!%fi%%ent of the ser-ice.
;. Inca#acity an' re#eate' ne&%i&ence in the f!%fi%%ent of the
ser-ice )hich he sho!%' ren'er.
?. Ea$it!a% 'r!n2enness.
B. Any occ!rrence )hich inca#acitates the sai%or to #erfor
the )or2 entr!ste' to hi, )ith the e(ce#tion of that #ro-i'e' in Artic%e
*??.
Art. *??. A seaan )ho fa%%s sic2 sha%%
not %ose his ri&ht to )a&es '!rin& the -oya&e,
!n%ess the sic2ness is the res!%t of his o)n fa!%t.
At any rate, the costs of the atten'ance an' c!re
sha%% $e 'efraye' fro the coon f!n's, in the
for of a %oan.
If the sic2ness sho!%' coee fro an
in.!ry recei-e' in the ser-ice or 'efense of the
-esse%, the seaan sha%% $e atten'e' an' c!re' at
the e(#ense of the coon f!n's 'e'!ctin&,
$efore anythin& e%se, fro the #rocee's of the
frei&hta&e the cost of the atten'ance an' c!re.
/. Eesertion.
2he ca&tain ma', ho*e)er, before setting out on a )o'age and
*ithout gi)ing an' reason *hatsoe)er, refuse to &ermit a sailor *hom he ma'
ha)e engaged to go on board, and ma' lea)e him on land, in *hich case his
*ages ha)e to be &aid as if he had rendered ser)ices.
2he indemnit' shall be &aid from the funds of the )essel if the
ca&tain should ha)e acted for reasons of &rudence and in the interest of the
safet' and good ser)ice of the )essel. 3hould this not be the case, it shall be
&aid b' the ca&tain &ersonall'.
After the )o'age has begun, and during the same and until the
conclusion thereof, the ca&tain ma' not abandon an' member of his cre* on
land or on the sea, unless, as the accused of a crime, his im&risonment and
deli)er' to the com&etent authorit' in the first &ort touched should be &ro&er,
*hich shall be obligator' to the ca&tain.
Art. *;3. If, after the cre) has $een en&a&e', the -oya&e is
re-o2e' $y the )i%% of the shi# a&ent or of the charterers, $efore or after
the -esse% has #!t to sea, or if the -esse% is for the sae reason &i-en a
'ifferent 'estination fro that fi(e' in the a&reeent )ith the cre), the
%atter sha%% $e in'enifie' on acco!nt of the rescission of the contract,
accor'in& to the fo%%o)in& cases9
1. If the re-ocation of the -oya&e sho!%' $e 'eci'e' $efore
'e#art!re of the -esse% fro the #ort, each sai%or en&a&e' sha%% $e &i-en
one onthGs sa%ary, $esi'es )hat ay $e '!e hi, in accor'ance )ith
his contract, for the ser-ices ren'ere' to the -esse% !# to the 'ate of the
re-ocation.
D. If the a&reeent sho!%' ha-e $een for a fi(e' ao!nt for
the )ho%e -oya&e, )hat ay $e '!e for sai' onth an' 'ays sha%% $e
'eterine' in #ro#ortion to the a##ro(iate '!ration of the -oya&e, in
the .!'&ent of the e(#erts, in the anner esta$%ishe' $y the %a) of ci-i%
#roce'!re@ an' if the #ro#ose' -oya&e sho!%' $e of s!ch short '!ration
that it is ca%c!%ate' at a##ro(iate%y one onth, the in'enity sha%% $e
fi(e' at fifteen 'ays, 'isco!ntin& in a%% cases the s!s a'-ance'.
;. If the re-ocation sho!%' ta2e #%ace after the -esse% has #!t
to sea, the sai%ors en&a&e' for a fi(e' ao!nt for the -oya&e sha%%
recei-e the entire sa%ary )hich ay ha-e $een offere' the if the -oya&e
ha' terinate'@ an' those en&a&e' $y the onth sha%% recei-e the
ao!nt corres#on'in& to the tie they i&ht ha-e $een on $oar' an' to
the tie they ay re0!ire to arri-e at the #ort of 'estination, the ca#tain
$ein& o$%i&e', f!rtherore, to #ay sai' sai%ors in $oth cases the #assa&e
to the sai' #ort or to the #ort of sai%in& of the -esse%, as ay $e
con-enient for the.
?. If the shi# a&ent or the charterers of the -esse% sho!%' &i-e
it a 'estination 'ifferent fro that fi(e' in the a&reeent, an' the
e$ers of the cre) sho!%' not a&ree thereto, they sha%% $e &i-en $y
)ay of in'enity ha%f the ao!nt fi(e' in the first case, in a''ition to
)hat ay $e '!e the for the #art of the onth%y )a&es corres#on'in&
to the 'ays )hich ay ha-e e%a#se' fro the 'ate of their a&reeents.
If they acce#t the chan&e, an' the -oya&e, on acco!nt of
&reater 'istance or of other reasons, sho!%' &i-e rise to an increase of
)a&es, the %atter sha%% $e a'.!ste' #ri-ate%y, or thro!&h frien'%y a'.!sters
in case of 'isa&reeent. E-en if the -oya&e sho!%' $e shortene' to a
nearer #oint, this sha%% not &i-e rise to a re'!ction in the )a&es a&ree'
!#on.
Sho!%' the re-ocation or chan&e of the -oya&e ori&inate fro
the shi##ers or charterers, the shi# a&ent sha%% ha-e a ri&ht to 'ean' of
the the in'enity )hich ay $e .!st%y '!e.
PAGE 53
TRANSPORTATION AND MARITIME LAW
Art. *;5. Sho!%' the re-ocation of the -oya&e arise fro a .!st
ca!se in'e#en'ent of the )i%% of the shi# a&ent an' the charterers, an'
the -esse% sho!%' not ha-e %eft the #ort, the e$ers of the cre) sha%%
no other ri&ht than to co%%ect the )a&es earne' !# to the 'ay the
re-ocation )as a'e.
Art. *?+. The fo%%o)in& sha%% $e .!st ca!ses for the re-ocation
of the -oya&e9
1. A 'ec%aration of )ar or inter'iction of coerce )ith the
#o)er to )hose territory the -esse% )as $o!n'.
D. The $%oc2a'e of the #ort of its 'estination or the $rea2in&
o!t of an e#i'eic after the a&reeent.
;. The #rohi$ition to recei-e in sai' #ort the &oo's )hich
a2e !# the car&o of the -esse%.
?. The 'etention or e$ar&o of the sae $y or'er of the
&o-ernent, or for any other reason in'e#en'ent of the )i%% of the a&ent.
B. The ina$i%ity of the -esse% to na-i&ate.
Art. *?1. If, after a -oya&e has $een $e&!n, an' any of the first
three ca!ses entione' in the fore&oin& artic%e sho!%' occ!r, the sai%ors
sha%% $e #ai' at the #ort )hich the ca#tain ay 'ee a'-isa$%e to a2e
for the $enefit of the -esse% an' car&o, accor'in& to the tie they ay
ha-e ser-e' thereon@ $!t if the -esse% is to contin!e its -oya&e, the
ca#tain an' the cre) ay !t!a%%y 'ean' the enforceent of the
contract.
In case of the occ!rrence of the fo!rth ca!se, the cre) sha%%
contin!e to $e #ai' ha%f )a&es, if the a&reeent is $y onth@ $!t if the
'etention sho!%' e(cee' three onths, the contract sha%% $e rescin'e'
an' the cre) sha%% $e #ai' )hat they sho!%' ha-e earne' accor'in& to
the contact, as if the -oya&e ha' $een a'e. An' if the a&reeent
sho!%' $e for a fi(e' s! for the -oya&e, the contract !st $e co#%ie'
)ith in the ters a&ree' !#on.
In the fifth case, the cre) sha%% ha-e no other ri&ht than to
co%%ect the )a&es earne'@ $!t if the 'isa$i%ity of the -esse% sho!%' ha-e
$een ca!se' $y the ne&%i&ence or %ac2 of s2i%% of the ca#tain, en&ineer, or
sai%in& ate, they sha%% in'enify the cre) for the 'aa&es s!ffere',
a%)ays )itho!t #re.!'ice to the criina% %ia$i%ity )hich ay $e #ro#er.
Art. *?D. If the cre) has $een en&a&e' on shares it sha%% not
$e entit%e', $y reason of the re-ocation, 'e%ay, or &reater e(tension of the
-oya&e, to anythin& $!t the #ro#ortionate #art of the in'enity )hich
ay $e #ai' to the coon f!n's $y the #ersons res#onsi$%e for sai'
occ!rrences.
Art. *?;. If the -esse% an' her car&o sho!%' $e tota%%y %ost $y
reason of ca#t!re or shi#)rec2, a%% ri&hts sha%% $e e(tin&!ishe', $oth as
re&ar's the ri&ht of the cre) to 'ean' any )a&es an' as re&ar's the
ri&ht of the shi# a&ent to reco-er the a'-ances a'e.
If a #ortion of the -esse% or of the car&o, or of $oth, sho!%' $e
sa-e', the cre) en&a&e' on )a&es, inc%!'in& the ca#tain, sha%% retain
their ri&hts on the sa%-a&e, as far as #ossi $%e, on the reain'er of the
-esse% as )e%% as on the -a%!e of the frei&hta&e or the car&o sa-e'@ $!t
sai%ors )ho are en&a&e' on shares sha%% ha-e no ri&ht on the sa%-a&e of
the h!%%, $!t on%y on the #ortion of the frei&hta&e sa-e'. <If they sho!%'
ha-e )or2e' to reco-er the reain'er of the shi#)rec2e' -esse%, they
sha%% $e &i-en fro the ao!nt of the sa%-a&e an a)ar' in #ro#or tion to
the efforts a'e an' to the ris2s enco!ntere' in or'er to acco#%ish the
sa%-a&e.=
Art. *??. A sai%or )ho fa%%s sic2 sha%% not %ose his ri&ht to
)a&es '!rin& the -oya&e, !n%ess his sic2ness is the res!%t of his o)n
fa!%t. At any rate, the costs of e'ica% atten'ance an' treatent sha%% $e
'efraye' fro the coon f!n's, in the for of a %oan.
If the sic2ness sho!%' $e ca!se' $y an in.!ry recei-e' in the
ser-ice or 'efense of the -esse%, the sai%or sha%% $e atten'e' an' treate'
at the e(#ense of the coon f!n's, 'e'!ctin&, $efore anythin& e%se,
fro the #rocee's of the frei&hta&e, the cost of the atten'ance an'
treatent.
Art. *?B. If a sai%or sho!%' 'ie '!rin& the -oya&e, his heirs
sha%% $e &i-en the )a&es earne' an' not recei-e', accor'in& to his
contract an' the ca!se of his 'eath, nae%y 666
If he 'ie' a nat!ra% 'eath an' )as en&a&e' on )a&es, that
)hich ay ha-e $een earne' !# to the 'ate of his 'eath sha%% $e #ai'.
If the contract )as for a fi(e' s! for the )ho%e -oya&e, ha%f
the ao!nt earne' sha%% $e #ai' if the sai%or 'ie' on the -oya&e o!t, an'
the )ho%e ao!nt if he 'ie' on the ret!rn -oya&e.
An' if the contract )as on shares an' the 'eath occ!rre' after
the -oya&e )as $e&!n, the heirs sha%% $e #ai' the entire #ortion '!e the
sai%or@ $!t if the %atter 'ie' $efore the 'e#art!re of the -esse% fro the
#ort, the heirs sha%% not $e entit%e' to c%ai anythin&.
If 'eath occ!rre' in the 'efense of the -esse%, the sai%or sha%%
$e consi'ere' as %i-in&, an' his heirs sha%% $e #ai', at the en' of the
-oya&e, the f!%% ao!nt of )a&es or the entire #art of the #rofits )hich
ay $e '!e hi as others of his c%ass.
The sai%or sha%% %i2e)ise $e consi'ere' as #resent if he )as
ca#t!re' )hi%e 'efen'in& the -esse%, in or'er to en.oy the $enefits as
the rest@ $!t sho!%' he ha-e $een ca#t!re' on acco!nt of care%essness
or other acci'ent not re%ate' to the ser-ice, he sha%% on%y recei-e the
)a&es '!e !# to the 'ay of his ca#t!re.
Art. *?*. The -esse% )ith her en&ines, ri&&in&, e0!i#ent, an'
frei&hta&e sha%% $e %ia$%e for the )a&es earne' $y the cre) en&a&e' #er
onth or for the tri#, the %i0!i'ation an' #ayent to ta2e #%ace $et)een
one -oya&e an' the other. :: After a ne) -oya&e has $een !n'erta2en,
cre'its of s!ch 2in' #ertainin& to the #rece'in& -oya&e sha%% %ose the
#reference.
Art. *?1. The officers an' the cre) of the -esse% sha%% $e
e(e#te' fro a%% o$%i&ations contracte', if they 'ee if #ro#er, in the
fo%%o)in& cases@
1. If, $efore the $e&innin& of the -oya&e, the ca#tain atte#ts
to chan&e it, or there occ!rs a na-a% )ar )ith the #o)er to )hich the
-esse% )as 'estine'.
D. If a 'isease sho!%' $rea2 o!t an' $e officia%%y 'ec%are'
e#i'eic in the #ort of 'estination.
;. If the -esse% sho!%' chan&e o)ner or ca#tain.
0. 3u&ercargoes
Art. *?5. S!#ercar&oes sha%% 'ischar&e on $oar' the -esse%
the a'inistrati-e '!ties )hich the a&ent or shi##ers ay ha-e assi&ne'
the@ they sha%% 2ee# an acco!nt an' recor' of their transactions in a
$oo2 )hich sha%% ha-e the sae con'itions an' re0!isites as re0!ire'
for the acco!ntin& $oo2 of the ca#tain, an' sha%% res#ect the %atter in his
'!ties as chief of the -esse%.
The #o)ers an' %ia$i%ities of the ca#tain sha%% cease, )hen
there is a s!#ercar&o, )ith re&ar' to that #art of the a'inistration
%e&itiate%y conferre' !#on the %atter, $!t sha%% contin!e in force for a%%
acts )hich are inse#ara$%e fro his a!thority an' office.
S!#ercar&o9 An agent of the o*ner of the goods shi&&ed as cargo on a
)essel, *ho has charge of the cargo on board, sells the same to the best
ad)antage in the foreign mar:ets, bu's cargo to be brought bac: on the return
)o'age of the shi&, and comes home *ith it
Art. *B+. A%% the #ro-isions containe' in the secon' section of
Tit%e III, Foo2 II, )ith re&ar' to 0!a%ifications, anner of a2in&
contracts, an' %ia$i%ities of factors sha%% $e a##%ica$%e to s!#ercar&oes.
4o* go)erned b' the &ro)isions on agenc'
Art. *B1. S!#ercar&oes cannot, )itho!t s#ecia% a!thori"ation
or a&reeent, a2e any transaction for their o)n acco!nt '!rin& the
-oya&e, )ith the e(ce#tion of the -ent!res )hich, in accor'ance )ith the
c!sto of the #ort of 'estination, they are #eritte' to 'o.
Neither sha%% they $e #eritte' to in-est in the ret!rn tri# ore
than the #rofits fro the -ent!res, !n%ess there is a s#ecia% a!thori"ation
therefor fro the #rinci#a%s.
E. Accidents and Eamages in @aritime Commerce
RI3L3, EA@AGD3, A4E ACCIED423 >< @ARI2I@D C>@@DRCD
1. A-era&es
#a$ 4ature and Linds
Art. 3+*. Hor the #!r#oses of this /o'e the fo%%o)in& sha%%
$e consi'ere' a-era&es9
1. A%% e(traor'inary or acci'enta% e(#enses )hich ay $e
inc!rre' '!rin& the -oya&e for the #reser-ation of the -esse% or car&o,
or $oth.
D. A%% 'aa&es or 'eterioration )hich the -esse% ay s!ffer
fro the tie it #!ts to sea at the #ort of 'e#art!re !nti% it casts anchor
at the #ort of 'estination, an' those s!ffere' $y the erchan'ise fro
PAGE 54
TRANSPORTATION AND MARITIME LAW
the tie they are %oa'e' in the #ort of shi#ent !nti% they are !n%oa'e'
in the #ort of their consi&nent.
Art. 3+1. The #etty an' or'inary e(#enses inci'ent to
na-i&ation, s!ch as those of #i%ota&e of coasts an' #orts, %i&htera&e
an' to)a&e, anchora&e, ins#ection, hea%th, 0!arantine %a"aretto, an'
other so6ca%%e' #ort e(#enses, costs of $ar&es, an' !n%oa'in&, !nti%
the erchan'ise is #%ace' on the )harf, an' other !s!a% e(#enses of
na-i&ation sha%% $e consi'ere' or'inary e(#enses to $e 'efraye' $y
the shi#o)ner, !n%ess there is an e(#ress a&reeent to the contrary.
Art. 3+3. A-era&es sha%% $e9
1. Si#%e or #artic!%ar.
D. 4enera% or &ross.
A)erages consist of - items =
1. D7&enses = to constitute an a)erage, an e7&ense must be=
a. e7traordinar' or accidental
b. incurred during the )o'age
c. incurred in order to &reser)e the )essel, cargo or
both
-. Eamages or deterioration = to constitute an a)erage, it must
be=
a. ha)e been suffered from the time the )essel &uts
to sea from
the &ort of de&arture until it casts anchor in the
&ort of
destination
b. ha)e been suffered b' the merchandise from the
time the' are
loaded in the &ort of shi&ment until the' are unloaded
in the &ort
of consignment
#1$ 3im&le or Particular
#a$ Eefined
Art. 3+5. As a &enera% r!%e, si#%e or #artic!%ar a-era&es
inc%!'e a%% the e(#enses an' 'aa&es ca!se' to the -esse% or to her
car&o )hich ha-e not in!re' to the coon $enefit an' #rofit of a%%
the #ersons intereste' in the -esse% an' her car&o, es#ecia%%y the
fo%%o)in&9
1. The %osses s!ffere' $y the car&o fro the tie of its
e$ar2ation !nti% it is !n%oa'e', either on acco!nt of the inherent
'efect of the &oo's or $y reason of a arine acci'ent or force a.e!re,
an' the e(#enses inc!rre' to a-oi' an' re#air the sae.
D. The %osses an' e(#enses s!ffere' $y the -esse% in its
h!%%, ri&&in&, ars, an' e0!i#ents, for the sae ca!ses an' reasons,
fro the tie it #!ts to sea fro the #ort of 'e#art!re !nti% it anchors
in the #ort of 'estination.
;. The %osses s!ffere' $y the erchan'ise %oa'e' on 'ec2,
e(ce#t in coast)ise na-i&ation, if the arine or'inances a%%o) it.
?. The )a&es an' -ict!a%s of the cre) )hen the -esse% is
'etaine' or e$ar&oe' $y a %e&itiate or'er or force a.e!re, if the
charter has $een contracte' for a fi(e' s! for the -oya&e.
B. The necessary e(#enses on arri-a% at #ort, in or'er to
a2e re#airs or sec!re #ro-isions.
*. The %o)est -a%!e of the &oo's so%' $y the ca#tain in
arri-a%s !n'er stress for the #ayent of #ro-isions an' to sa-e the
cre), to eet any other nee' of the -esse% a&ainst )hich the #ro#er
ao!nt sha%% $e char&e'.
1. The -ict!a%s an' )a&es of the cre) )hi%e the -esse% is in
0!arantine.
3. The %oss inf%icte' !#on the -esse% or car&o $y reason of
an i#act or co%%ision )ith another, if it is acci'enta% an' !na-oi'a$%e.
If the acci'ent sho!%' occ!r thro!&h the fa!%t or ne&%i&ence of the
ca#tain, the %atter sha%% $e %ia$%e for a%% the 'aa&e ca!se'.
5. Any %oss s!ffere' $y the car&o thro!&h the fa!%ts,
ne&%i&ence, or $arratry of the ca#tain or of the cre), )itho!t #re.!'ice
to the ri&ht of the o)ner to reco-er the corres#on'in& in'enity fro
the ca#tain, the -esse%, an' the frei&ht.
Eistinguishing feature = an e7&ense incurred or damage suffered *hich has
not inured to the common benefit and &rofit of all &ersons interested in the
)essel and its cargo
#b$ Dffects
Art. 31+. The o)ner of the &oo's )hich &a-e rise to the
e(#ense or s!ffere' the 'aa&e sha%% $ear the si#%e or #artic!%ar
a-era&es.
#-$ Gross or General
#a$ Eefined
Art. 311. As a &enera% r!%e, &enera% or &ross a-era&es sha%%
inc%!'e a%% the 'aa&es an' e(#enses )hich are 'e%i$erate%y ca!se' in
or'er to sa-e the -esse%, its car&o, or $oth at the sae tie, fro a
rea% an' 2no)n ris2, an' #artic!%ar%y the fo%%o)in&9
1. The &oo's or cash in-este' in the re'e#tion of the
-esse% or of the car&o ca#t!re' $y eneies, #ri-ateers, or #irates, an'
the #ro-isions, )a&es, an' e(#enses of the -esse% 'etaine' '!rin& the
tie the sett%eent or re'e#tion is $ein& a'e.
D. The &oo's .ettisone' to %i&hten the -esse%, )hether they
$e%on& to the car&o, to the -esse%, or to the cre), an' the 'aa&e
s!ffere' thro!&h sai' act $y the &oo's )hich are 2e#t on $oar'.
;. The ca$%es an' asts )hich are c!t or ren'ere' !se%ess,
the anchors an' the chains )hich are a$an'one', in or'er to sa-e the
car&o, the -esse%, or $oth.
?. The e(#enses of reo-in& or transferrin& a #ortion of the
car&o in or'er to %i&hten the -esse% an' #%ace it in con'i tion to enter a
#ort or roa'stea', an' the 'aa&e res!%tin& therefro to the &oo's
reo-e' or transferre'.
B. The 'aa&e s!ffere' $y the &oo's of the car&o $y the
o#enin& a'e in the -esse% in or'er to 'rain it an' #re-ent its sin2in&.
*. The e(#enses ca!se' in or'er to f%oat a -esse% inten6
tiona%%y stran'e' for the #!r#ose of sa-in& it.
1. The 'aa&e ca!se' to the -esse% )hich ha' to $e
o#ene', sc!tt%e' or $ro2en in or'er to sa-e the car&o.
3. The e(#enses for the treatent an' s!$sistence of the
e$ers of the cre) )ho ay ha-e $een )o!n'e' or cri##%e' in
'efen'in& or sa-in& the -esse%.
5. The )a&es of any e$er of the cre) he%' as hosta&e $y
eneies, #ri-ateers, or #irates, an' the necessary e(#enses )hich he
ay inc!r in his i#risonent, !nti% he is ret!rne' to the -esse% or to
his 'oici%e, sho!%' he #refer it.
1+. The )a&es an' -ict!a%s of the cre) of a -esse% chartere'
$y the onth, '!rin& the tie that it is e$ar&oe' or 'etaine' $y force
a.e!re or $y or'er of the 4o-ernent, or in or'er to re#air the
'aa&e ca!se' for the coon $enefit.
11. The 'e#reciation res!%tin& in the -a%!e of the &oo's so%'
at arri-a%s !n'er stress in or'er to re#air the -esse% $y reason of &ross
a-era&e.
1D. The e(#enses of the %i0!i'ation of the a-era&e.
Art. 311. If in the %i&htenin& a -esse% on acco!nt of a stor,
in or'er to faci%itate its entry into a #ort or roa'stea', #art of her car&o
sho!%' $e transferre' to %i&hters or $ar&es an' $e %ost, the o)ner of
sai' #art sha%% $e entit%e' to in'enity, as if the %oss ha' ori&inate'
fro a &ross a-era&e, the ao!nt thereof $ein& 'istri$!te' $et)een
the -esse% an' car&o fro )hich it cae.
If, on the contrary, the erchan'ise transferre' sho!%' $e
sa-e' an' the -esse% sho!%' $e %ost, no %ia$i%ity ay $e 'ean'e' of
the sa%-a&e.
Art. 313. If, as a necessary eas!re to e(tin&!ish a fire in
#ort, roa'stea', cree2, or $ay, it sho!%' $e 'eci'e' to sin2 any -esse%,
this %oss sha%% $e consi'ere' &ross a-era&e, to )hich the -esse%s
sa-e' sha%% contri$!te.
Eistinguishing feature= D7&ense or damage suffered deliberatel' in order to
sa)e the )essel, its cargo or both from a real and :no*n ris: 66R it is the
deli)erance from an immediate &eril, b' a common sacrifice, that constitutes
the essence of general a)erage
Re0!isites for &enera% a-era&e9
1. there must be a common danger 66R the shi& and cargo are
subBect to the same danger and that the danger arises from accidents of the
sea, dis&ositions of the authorities or faults of men, &ro)ided that the
circumstances &roducing the &eril should be ascertained and imminent
PAGE 55
TRANSPORTATION AND MARITIME LAW
-. for the common safet', &art of the )essel or the cargo or both
is sacrificed deliberatel'
;. from the e7&enses or damages caused follo*s the successful
sa)ing of the )essel and cargo
0. the e7&enses or damages should ha)e been incurred or
inflicted after ta:ing legal ste&s and authorit'
#b$ Dssential
Re+uisites
Art. 31;. In or'er to inc!r the e(#enses an' ca!se the
'aa&es corres#on'in& to &ross a-era&e, there !st $e a reso%!tion
of the ca#tain, a'o#te' after 'e%i$eration )ith the sai%in& ate an'
other officers of the -esse%, an' after hearin& the #ersons intereste' in
the car&o )ho ay $e #resent.
If the %atter sho!%' o$.ect, an' the ca#tain an' officers or a
a.ority of the, or the ca#tain, if o##ose' to the a.ority, sho!%'
consi'er certain eas!res necessary, they ay $e e(ec!te' !n'er his
res#onsi$i%ity, )itho!t #re.!'ice to the ri&ht of the shi##ers to #rocee'
a&ainst the ca#tain $efore the co#etent .!'&e or co!rt, if they can
#ro-e that he acte' )ith a%ice, %ac2 of s2i%%, or ne&%i&ence.
If the #ersons intereste' in the car&o, $ein& on $oar' the
-esse%, ha-e not $een hear', they sha%% not contri$!te to the &ross
a-era&e, their share $ein& char&ea$%e a&ainst the ca#tain, !n%ess the
!r&ency of the case sho!%' $e s!ch that the tie necessary for
#re-io!s 'e%i$eration )as )antin&.
Art. 31?. The reso%!tion a'o#te' to ca!se the 'aa&es
)hich constit!te &enera% a-era&e !st necessari%y $e entere' in the
%o& $oo2, statin& the oti-es an' reasons on )hich it is $ase', the
-otes a&ainst it an' the reason for the 'issent, sho!%' there $e any,
an' the irresisti$%e an' !r&ent ca!ses )hich i#e%%e' the ca#tain if he
acte' of his o)n accor'.
In the first case the in!tes sha%% $e si&ne' $y a%% the
#ersons #resent )ho co!%' 'o so $efore ta2in& action, if #ossi $%e@ an'
if not, at the first o##ort!nity. In the secon' case, it sha%% $e si&ne' $y
the ca#tain an' $y the officers of the -esse%.
In the in!tes, an' after the reso%!tion, sha%% $e state' in
'etai% a%% the &oo's .ettisone', an' ention sha%% $e a'e of the
in.!ries ca!se' to those 2e#t on $oar'. The ca#tain sha%% $e o$%i&e'
to 'e%i-er one co#y of these in!tes to the aritie .!'icia% a!thority
of the first #ort he ay a2e, )ithin t)enty6 fo!r ho!rs after his
arri-a%, an' to ratify it ie'iate%y !n'er oath.
<ormalities for incurring gross a)erage =
1. there must be an assembl' of the sailing mate and other officers *ith the
ca&tain including those *ith interests in the cargo
-. there must be a resolution of the ca&tain
;. the resolution shall be entered in the log boo:, *ith the reasons and
moti)es and the )otes for and against the resolution
0. the minutes shall be signed b' the &arties
1. *ithin -0 hours u&on arri)al at the first &ort the ca&tain ma:es, he shall
deli)er one co&' of these minutes to the maritime Budicial authorit' thereat
Art. 3*+. If, not)ithstan'in& the .ettison of the erchan'ise,
$rea2a&e of asts, ro#es, an' e0!i#ent, the -esse% sho!%' $e %ost
r!nnin& sae ris2, no contri$!tion )hatsoe-er $y reason of &ross
a-era&e sha%% $e #ro#er.
The o)ners of the &oo's sa-e' sha%% not $e %ia$%e for the
in'enification of those .ettisone', %ost or 'aa&e'.
2he goods that *ere not sacrificed shall not be liable for the indemnification
of those sacrificed 6 >ne of the re+uisites of general a)erage is lac:ing,
that is, success in sa)ing the )essel and remaining cargo
@agsa'sa' Inc. )s Agan / Phil. 1?0
<= PlaintiffHs )essel 33 Antonio left for @anila for Basco, Batanes
*ith general cargo o*ned b' the different shi&&ers including that of the
defendant. U&on reaching A&arri, it accidentall' ran aground. Plaintiff had it
refloated b' FuAte)eco for com&ensation. After refueling, the )essel
&roceeded to Basco *here the cargoes *ere deli)ered. >n the theor' that
the e7&enses incurred in floating the )essel constituted a general a)erage to
*hich both the shi& and cargo should contribute, &laintiff as:ed from the
shi&&ers a de&osit or bond to ans*er for contribution to the a)erage. All
shi&&ers acceded e7ce&t the defendant. In action to reco)er said
contribution, the @anila C<I decided for the &laintiff. Eefendant a&&ealed
contending that the floating of a )essel, unintentionall' stranded inside a
&ort and at the mouth of a ri)er during a fine *eather, does not constitute
general a)erage e7&enses.
Celd= In classif'ing a)erages into sim&le or &articular and general or gross
and defining each class, the Code of Commerce at the same time
enumerate certain s&ecific cases as coming s&eciall' under one or the other
class. %hile the e7&enses incurred in &utting the )essel afloat ma' *ell
come under 4o. - of Art. !? 6 referring to e7&enses suffered b' the )essel
due to an accident of the sea or force maBeure6 said e7&enses do not fit into
an' of the s&ecific cases of general a)erage enumerated in AR2. !11. 4o. /
of Art. !11 mentions e7&enses caused to afloat a )essel, but it s&ecificall'
refers to a )essel intentionall' stranded for the &ur&ose of sa)ing it, and
*ould ha)e no a&&lication *here the stranding *as unintentional.
2he follo*ing are the re+uisites for a general a)erage= 1$ there
must be common danger, -$ for the common safet' &art of the )essel or
cargo or both is sacrificed deliberatel', ;$ from the e7&enses or damages
caused follo*s the successful sa)ing of the )essel and cargo, and 0$ the
e7&enses or damages should ha)e been incurred or inflicted after ta:ing the
&ro&er legal ste&s and authorit'.
It is the deli)erance from an immediate &eril, b' reason of a
common sacrifice, that constitutes the essence of a general a)erage.
%here there is no &roof that the stranded )essel had to be &ut afloat to sa)e
it from imminent danger, and *hat does a&&ear is that the )essel had to be
sal)aged in order to enable it to &roceed to its &ort of destination, the
e7&enses incurred in floating the )essel do not constitute general a)erage.
It is the safet' of the &ro&ert', and not of the )o'age *hich constitutes the
true foundation of general a)erage.
2he e7&enses incurred for the common safet' of the )essel and
cargo in this case did not arise from the imminent &eril of both. 2he cargo
could ha)e been unloaded b' the o*ners had the' been re+uired to do so.
2he refloating *as a success, but as the sacrifice *as for the )esselHs
benefit 66 to enable it to &roceed to its destination 66 and not for the &ur&ose
of sa)ing the cargo, the cargo o*ners are not in la* bound to contribute to
e7&enses. 2he final re+uisite has not been &ro)ed for it does not a&&ear
that the e7&enses in +uestion *ere incurred after follo*ing the &rocedure
laid do*n in Art. 1;.
Eecision re)ersed.
International Car)ester )s Camburg American Fine 0- Phil !01
<= In the s&ring of 11", defendant undertoo: to carr' agricultural
machineries, belonging to the &laintiff, from Camburg to .ladi)osto:,
Russia. <reight charges *ere &re&aid to ultimate destination and defendant
reser)ed the right to for*ard the machineries at its o*n e7&ense b' some
other means in case of its inabilit' to effect discharge at the &ort of
destination. %hen the )o'age *as almost com&leted at the China 3ea, *ar
bro:e out bet*een German' and Russia, and the shi& &ut in to the &ort of
@anila, *here it *as interned. Ca&tain of the )essel refused to surrender
the machineries to the o*nerHs agent unless the latter *ould agree to
subBect said cargo to liabilit' u&on general a)erage to satisf' the cost and
e7&enses of the )essel incident to its sta' in @anila. Plaintiff did not assent
and brought an action for reco)er' of the machineries &lus damages. 2he
&laintiff later obtained said cargo b' a *rit of re&le)in and for*arded it to
.ladi)osto: b' another streamer. Eefendant denied liabilit' asserting its lien
on the cargo for general a)erage. 2rial court a*arded the &laintiff damages.
Eefendant a&&ealed.
Celd= It is clear that the cargo in +uestion is not liable to a general a)erage.
It is not claimed that said cargo *as contraband of *ar and being neutral
goods, the' *ere not liable to forfeiture in the e)ent of ca&ture b' the
enemies of the shi&Hs flag. It follo*s that *hen the master of the )essel
decided to ta:e refuge in @anila, he acted e7clusi)el' *ith a )ie* to the
)esselHs &rotection. 2here *as no common danger to the shi& and cargoG
and, therefore, it *as not a case for a general a)erage.
2he outbrea: of the *ar bet*een German' and Russia absol)ed
the defendant from con)e'ing the cargo to Russia, and no damage could be
reco)ered b' the &laintiff from the defendant for the latterHs failure to con)e'
the cargo to the &ort of destination on that shi&. But b' the terms of the
contract of affreightment, the defendant *as bound to for*ard the cargo to
.ladi)osto: at its e7&ense, not necessaril' b' a streamer of defendant. It
does not b' an' means follo* that it is not liable for the e7&enses incurred
b' the &laintiff in com&leting the unfinished &ortion of the )o'age in another
shi&. Eefendant is, therefore, liable for the cost of for*arding the cargo b'
another line, the full freight ha)ing been recei)ed b' the shi& at the
commencement of the )o'age.
,udgment affirmed.
PAGE 56
TRANSPORTATION AND MARITIME LAW
Com&agnie de Commerce )s Camburg ;/ Phil 1?
<= In ,ul' 110, defendantHs )essel undertoo: to carr' a cargo of
rice meal in the <rench &ort of 3aigon for deli)er' to Eun:ir: under a
contract of affreightment *ith a <rench shi&&er. %hile the loading of the
cargo *as made, rumors of the outbrea: of *ar bet*een <rench and
German' s&read. 2he master of the German )essel, after com&letion of the
loading of the cargo and after being refused b' the <rench Go)ernor at
3aigon for a &ass of safe6conduct, fled *ith his )essel and her cargo and
too: refuge in @anila. Considering the nature of the cargo and its
im&ossibilit' of being deli)ered to its destination *ithin reasonable time, the
master of the )essel consulted the shi&&erHs instruction as to the dis&osition
of the cargo, but the shi&&erHs agent refused to assume res&onsibilit'.
EefendantHs agent in @anila, u&on the courtHs authorit' secured b' the
master of the )essel, sold said rice meal and de&osited the &roceeds
thereof *ith the court minus the e7&enses incident to the sale. Plaintiff filed
an action for reco)er' of the &roceeds of the sale and the resulting
damages. Eefendant also claimed, in a cross6com&laint, contribution from
&laintiff for general a)erage for the e7&enses incurred b' the )esselHs sta' in
@anila. 2rial court decided for the &laintiff including damages for the
defendantHs breach of the charter &art'. Both &arties a&&ealed.
Celd= 2he danger from *hich the master of the )essel fled *as a real and
not merel' an imaginar' one. 3eiAure at the hands of the enem', though
not ine)itable, *as a &ossible outcome of a failure to lea)e the &ort of
3aigonG and it cannot be said that under the conditions e7isting at the time
*hen the master elected to flee from that &ort, there *ere no grounds for a
reasonable a&&rehension of danger from seiAure b' <rench authorities, and
therefore no necessit' for flight. 2he de)iation of the )essel therefore, from
the route &rescribed in her charter &art', and the subse+uent abandonment
b' the master of the )o'age contem&lated in the contract of affreightment,
must be held to ha)e been Bustified b' the necessit' under *hich the master
*as &laced to elect that course *hich *ould remo)e and &reser)e the
)essel from danger of seiAure b' the &ublic enem' of the flag *hich the
)essel sailedG and that neither the )essel nor her o*ners are liable for the
resultant damages suffered b' the o*ner of the cargo.
2he claim for general a)erage b' the shi&o*ner, ho*e)er, cannot
be sustained under the &ro)isions of the Kor:6Ant*er& Rules. An
e7amination of the entire bod' of these rules discloses that general a)erage
is ne)er allo*ed thereunder unless the loss or damage sought to be made
good as general a)erage has been incurred for the Scommon safet'H. It is
)er' clear that in fleeing from the &ort of 3aigon and ta:ing refuge in @anila,
the master of the )essel *as not acting for the common safet' of the )essel
and her cargo. 2he <rench cargo *as absolutel' secure from danger of
seiAure or confiscation so long as it remained in the &ort of 3aigon, and
there can be no +uestion that the flight of the )essel *as a measure of
&recaution ado&ted solel' and e7clusi)el' for the &reser)ation of the )essel
from danger of seiAure or ca&ture. Eeli)er' of the net &roceeds of the sale
to &laintiff should be affirmed, but reco)er' of damages b' &laintiff should be
re)ersed. Eefendant cannot claim for general a)erage.
,udgment modified.
#c$ Dffects
Art. 31D. In or'er to satisfy the ao!nt of the &ross or
&enera% a-era&es, a%% the #ersons ha-in& an interest in the -esse% an'
car&o therein at the tie of the occ!rrence of the a-era&e sha%%
contri$!te.
#d$ ,ettison
Art. 31B. The ca#tain sha%% 'irect the .ettison, an' sha%% or'er
the &oo's cast o-er$oar' in the fo%%o)in& or'er9
1. Those )hich are on 'ec2, $e&innin& )ith those )hich
e$arrass the ane!-er or 'aa&e the -esse%, #referrin&, if #ossi$%e,
the hea-iest ones )ith the %east !ti%ity an' -a%!e.
D. Those )hich are $e%o) the !##er 'ec2, a%)ays $e&innin&
)ith those of the &reatest )ei&ht an' sa%%est -a%!e, to the ao!nt
an' n!$er a$so%!te%y in'is#ensa$%e.
Art. 31*. In or'er that the &oo's .ettisone' ay $e inc%!'e'
in the &ross a-era&e an' the o)ners thereof $e entit%e' to in'enity, it
sha%% $e necessary in so far as the car&o is concerne' that their
e(istence on $oar' $e #ro-en $y eans of the $i%% of %a'in&@ an' )ith
re&ar' to those $e%on&in& to the -esse%, $y eans of the in-entory
#re#are' $efore the 'e#art!re, in accor'ance )ith the first #ara&ra#h
of Artic%e *1D.
#e$ ,ason Clause
Lason /%a!se, R!%e D, Kor26Ant)er# R!%es
Rights to contribution in general a)erage shall not be affected,
though the e)ent *hich ga)e rise to the sacrifice or e7&enditure ma' ha)e
been due to the fault of one of the &arties to the ad)entureG but this shall not
&reBudice an' remedies *hich ma' be o&en against that &art' for such fault.
#b$ Proof and Fi+uidation of A)erages
#1$ @odes
Art. 3?*. Those intereste' in the #roof an' %i0!i'ation of
a-era&es ay !t!a%%y a&ree an' $in' these%-es at any tie )ith
re&ar' to the %ia$i%ity, %i0!i'ation an' #ayent thereof.
In the a$sence of a&reeents, the fo%%o)in& r!%es sha%% $e
o$ser-e'9
1. The #roof of the a-era&e sha%% ta2e #%ace in the #ort
)here the re#airs are a'e, sho!%' any $e necessary, or in the #ort of
!n%oa'in&.
D. The %i0!i'ation sha%% $e a'e in the #ort of !n%oa'in&, if
it is a Phi%i##ine #ort.
;. If the a-era&e occ!rre' o!tsi'e of the .!ris'ictiona%
)aters of the Phi%i##ines, or the car&o has $een so%' in a forei&n #ort
$y reason of an arri-a% !n'er stress, the %i0!i'ation sha%% $e a'e in
the #ort of arri-a%.
?. If the a-era&e has occ!rre' near the #ort of 'estination,
so that sai' #ort can $e a'e, the #rocee'in&s entione' in r!%es 1
an' D sha%% $e he%' there.
Art. 3?1. In the case )here the %i0!i'ation of the a-era&es is
a'e #ri-ate%y $y -irt!e of a&reeent, as )e%% as )hen a .!'icia%
a!thority inter-enes at the re0!est of any of the #arties intereste' )ho
'o not a&ree thereto, a%% of the sha%% $e cite' an' hear', sho!%' they
not ha-e reno!nce' this ri&ht.
Sho!%' they not $e #resent or sho!%' they ha-e no %e&a%
re#resentati-e, the %i0!i'ation sha%% $e a'e $y the cons!% in a forei&n
#ort, an' )here there is none, $y the co#etent .!'&e or co!rt,
accor'in& to the %a)s of the co!ntry an' for the acco!nt of the #ro#er
#arty.
When the re#resentati-e is a #erson )e%% 2no)n in the #%ace
)here the %i0!i'ation is a'e, his inter-ention sha%% $e a'itte' an'
sha%% #ro'!ce %e&a% effects, e-en tho!&h he $e a!thori"e' on%y $y a
%etter of the shi# a&ent, the shi##er, or the ins!rer.
Art. 3?3. /%ais for a-era&es sha%% not $e a'itte' if they
'o not e(cee' B #er cent of the interest )hich the c%aiant ay ha-e in
the -esse% or in the car&o if it $e &ross a-era&e, an' 1 #er cent of the
&oo's 'aa&e' if #artic!%ar a-era&e, 'e'!ctin& in $oth cases the
e(#enses of a##raisa%, !n%ess there is an a&reeent to the contrary.
#-$ A&&raisal of general a)erage
Art. 3B+. If $y reason of one or ore acci'ents of the sea,
#artic!%ar an' &ross a-era&es of the -esse%, of the car&o, or of $oth,
sho!%' ta2e #%ace on the sae -oya&e, the e(#enses an' 'aa&es
corres#on'in& to each a-era&e sha%% $e 'eterine' se#arate%y in the
#ort )here the re#airs are a'e, or )here the erchan'ise is
'ischar&e', so%', or !ti%i"e'.
Hor this #!r#ose the ca#tains sha%% $e o$%i&e' to 'ean' of
the e(#ert a##raisers an' of the contractors a2in& the re#airs, as
)e%% as of those a##raisin& an' ta2in& #art in the !n%oa'in&, re#air,
sa%e, or !ti%i"ation of the erchan'ise, that in their a##raiseents or
estiates an' acco!nts they set 'o)n se#arate%y an' acc!rate%y the
e(#enses an' 'aa&es #ertainin& to each a-era&e, an' in those of
each a-era&e those corres#on'in& to the -esse% an' to the car&o, a%so
statin& se#arate%y )hether or not there are 'aa&es #rocee'in& fro
inherent 'efect of the thin& an' not fro acci'ent of the sea@ an' in
case there sho!%' $e e(#enses coon to the 'ifferent a-era&es an'
PAGE 57
TRANSPORTATION AND MARITIME LAW
to the -esse% an' its car&o, the ao!nt corres#on'in& to each !st $e
estiate' an' state' 'istinct%y.
Art. 3B1. At the instance of the ca#tain, the a'.!stent,
%i0!i'ation, an' 'istri$!tion of &ross a-era&es sha%% $e he%' #ri-ate%y,
)ith the consent of a%% the #arties in interest.
Hor this #!r#ose, )ithin forty6ei&ht ho!rs, fo%%o)in& the
arri-a% of the -esse% at the #ort, the ca#tain sha%% con-ene a%% the
#ersons intereste' in or'er that they ay 'eci'e as to )hether the
a'.!stent or %i0!i'ation of the &ross a-era&e is to $e a'e $y
e(#erts an' %i0!i'ators a##ointe' $y these%-es, in )hich case 'i'
sha%% $e so 'one if the intereste' #arties a&ree.
If an a&reeent is not #ossi$%e, the ca#tain sha%% a##%y to the
co#etent .!'&e or co!rt, )ho sha%% $e the one in the #ort )here
these #rocee'in&s are to $e he%' in accor'ance )ith the #ro-isions of
this /o'e, or to the cons!% of the Phi%i##ines sho!%' there $e one, an'
sho!%' there $e none, to the %oca% a!thority )hen they are to $e he%' in
a forei&n #ort.
Art. 3BD. If the ca#tain 'oes not co#%y )ith the #ro-isions
of the #rece'in& artic%e, the shi# a&ent or the shi##ers sha%% 'ean'
the %i0!i'ation, )itho!t #re.!'ice to the action they ay $rin& to
'ean' in'enity fro hi.
Under Art. !11, the ca&tain is re+uired to initiate the &roceedings for the
adBustment, li+uidation and distribution of an' gross a)erageG it is his dut' to
ta:e the &ro&er ste&s to &rotect an' shi&&er *hose goods ma' ha)e been
Bettisoned for the general safet' OOR if the ca&tain does not com&l' *ith his
dut' under !11, the shi&o*ner or shi&&er has the right to maintain an action
against the ca&tain for indemnification for the loss 66R this does not in)ol)e
the su&&ression of the right of action of the shi&&er against the shi&o*ner
Art. 3B;. After the e(#erts ha-e $een a##ointe' $y the
#ersons intereste', or $y the co!rt, an' after the acce#tance, they
sha%% #rocee' to the e(aination of the -esse% an' of the re#airs
re0!ire' an' to the a##raisa% of their cost, se#aratin& these %osses an'
'aa&es fro those arisin& fro the inherent 'efect of the thin&s.
The e(#erts sha%% a%so 'ec%are )hether the re#airs ay $e
a'e ie'iate%y, or )hether it is necessary to !n%oa' the -esse% in
or'er to e(aine an' re#air it.
With re&ar' to the erchan'ise, if the a-era&e sho!%' $e
-isi$%e at a ere &%ance, the e(aination thereof !st $e a'e $efore
they are 'e%i-ere'. Sho!%' it not $e -isi$%e at the tie of !n%oa'in&,
sai' e(aination ay $e a'e after the 'e%i-ery, #ro-i'e' that it is
'one )ithin forty6ei&ht ho!rs fro the !n%oa'in&, an' )itho!t
#re.!'ice to the other #roofs )hich the e(#erts ay 'ee #ro#er.
Art. 3B?. The -a%!ation of the o$.ects )hich are to contri$!te
to the &ross a-era&e, an' that of those )hich constit!te the a-era&e,
sha%% $e s!$.ect to the fo%%o)in& r!%es9
1. The erchan'ise sa-e' )hich is to contri$!te to the
#ayent of the &ross a-era&e sha%% $e -a%!e' at the c!rrent #rice at the
#ort of !n%oa'in&, 'e'!ctin& the frei&hta&e, c!stos '!ties, an'
e(#enses of !n%oa'in&, as ay a##ear fro a ateria% ins#ection of
the sae, )itho!t ta2in& the $i%%s of %a'in& into consi'eration, !n%ess
there is an a&reeent to the contrary.
D. If the %i0!i'ation is to $e a'e in the #ort of 'e#art!re,
the -a%!e of the erchan'ise %oa'e' sha%% $e 'eterine' $y the
#!rchase #rice, inc%!'in& the e(#enses !nti% they are #%ace' on $oar',
the ins!rance #rei! e(c%!'e'.
;. If the erchan'ise sho!%' $e 'aa&e', it sha%% $e
a##raise' at its tr!e -a%!e.
?. If the -oya&e ha-in& $een interr!#te', the erchan'ise
sho!%' ha-e $een so%' in a forei&n #ort, an' the a-era&e cannot $e
estiate', the -a%!e of the erchan'ise in the #ort of arri-a%, or the net
#rocee's o$taine' at the sa%e thereof, sha%% $e ta2en as the
contri$!tin& ca#ita%.
B. Merchan'ise %ost, )hich constit!tes the &ross a-era&e,
sha%% $e a##raise' at the -a%!e )hich erchan'ise of its 2in' ay
ha-e in the #ort of !n%oa'in&, #ro-i'e' that its 2in' an' 0!a%ity a##ear
in the $i%% of %a'in&@ an' sho!%' they not a##ear, the -a%!e sha%% $e that
state' in the in-oices of the #!rchase iss!e' in the #ort of shi#ent,
a''in& thereto the e(#enses an' frei&hta&e s!$se0!ent%y arisin&.
*. The asts c!t 'o)n, the sai%s, ca$%es, an' other
e0!i#ent of the -esse% ren'ere' !se%ess for the #!r#ose of sa-in& it,
sha%% $e a##raise' at the c!rrent -a%!e, 'e'!ctin& one6thir' $y reason
of the 'ifference $et)een ne) an' o%'.
This 'e'!ction sha%% not $e a'e )ith res#ect to anchors
an' chains.
1. The -esse% sha%% $e a##raise' at its tr!e -a%!e in the
con'ition in )hich it is fo!n'.
3. The frei&hta&e sha%% re#resent B+ #er cent $y )ay of
contri$!tin& ca#ita%.
Art. 3BB. The erchan'ise %oa'e' on the !##er 'ec2 of the
-esse% sha%% contri$!te to the &ross a-era&e sho!%' it $e sa-e'@ $!t
there sha%% $e no ri&ht to in'enify if it sho!%' $e %ost $y reason of
ha-in& $een .ettisone' for coon safety, e(ce#t )hen the arine
or'inances a%%o) its shi#ent in this anner in coast)ise na-i&ation.
The sae sha%% ta2e #%ace )ith that )hich is on $oar' an' is
not inc%!'e' in the $i%%s of %a'in& or in-entories, accor'in& to the
cases.
In any case the shi#o)ner an' the ca#tain sha%% $e %ia$%e to
the shi##ers for the 'aa&es fro the .ettison, if the stora&e on the
!##er 'ec2 )as a'e )itho!t the consent of the %atter.
2he goods ma' be sto*ed on dec: #1$ *ith the consent of the shi&&er or #-$
*ithout his consent 66R if sto*ed on dec: *ith his consent, he ta:es the ris:
u&on himself of the &erils arising from the dangers of the sea and an'
damage *ill be borne b' the o*ner 8&articular a)erage9
66R if sto*ed on dec: *ithout his consent, the ca&tain does so at
his o*n ris:G the ca&tain cannot &rotect himself b' sho*ing that the' are
damaged or lost b' dangers of the sea
2he carriage of gasoline on dec: b' coast*ise or interisland
)essels is allo*ed b' marine regulations 66R the loss of &etroleum for
common safet' and benefit *ill constitute a general a)erage.

Art. 3B1. After the a##raiseent of the &oo's sa-e' an' of
those %ost )hich constit!te the &ross a-era&e, has $een conc%!'e' $y
the e(#erts, the re#airs, if any, a'e on the -esse%, an', in this case,
the acco!nts of the sae a##ro-e' $y the #ersons intereste' or $y the
.!'&e or co!rt, the entire recor' sha%% $e t!rne' o-er to the %i0!i'ator
a##ointe', in or'er that he ay #rocee' )ith the 'istri$!tion of the
a-era&e.
#;$ Fi+uidation of general
a)erage
Art. 3B3. In or'er to effect the %i0!i'ation, the %i0!i'ator
sha%% e(aine the #rotest of the ca#tain, co#arin& it, if necessary,
)ith the %o& $oo2, an' a%% the contracts )hich ay ha-e $een a'e
aon& the #ersons intereste' in the a-era&e, the a##raiseents,
e(#ert e(ainations, an' acco!nts of re#airs a'e. If, as a res!%t of
this e(aination, he sho!%' fin' any 'efect in the #roce'!re )hich
i&ht in.!re the ri&hts of the #ersons intereste' or affect the %ia$i%ity of
the ca#tain, he sha%% ca%% attention thereto in or'er that it ay $e
correcte', if #ossi$%e, an' other)ise he sha%% inc%!'e it in the e(or'ia%
of the %i0!i'ation.
Ie'iate%y thereafter he sha%% #rocee' )ith the 'istri$!tion
of the ao!nt of the a-era&e, for )hich #!r#ose he sha%% fi(9
1. The contri$!tin& ca#ita%, )hich he sha%% 'eterine $y the
-a%!e of the car&o, in accor'ance )ith the r!%es esta$%ishe' in Artic%e
3B?.
D. That of the -esse% in its act!a% con'ition, accor'in& to a
stateent of e(#erts.
;. The B+ #er cent of the ao!nt of the frei&hta&e,
'e'!ctin& the reainin& B+ #er cent for )a&es an' aintenance of the
cre).
After the ao!nt of the &ross a-era&e has $een 'eterine'
in accor'ance )ith the #ro-isions of this /o'e, it sha%% $e 'istri$!te'
#ro rata aon& the &oo's )hich are to co-er the sae.
Art. 3*B. The 'istri$!tion of the &ross a-era&e sha%% not $e
fina% !nti% it has $een a&ree' to, or in the a$sence thereof, !nti% it has
$een a##ro-e' $y the .!'&e or co!rt, after an e(aination of the
%i0!i'ation an' a hearin& of the #ersons intereste' )ho ay $e
#resent or of their re#resentati-es.
Art. 3**. After the %i0!i'ation has $een a##ro-e', it sha%% $e
the '!ty of the ca#tain to co%%ect the ao!nt of the contri$!tion, an'
PAGE 58
TRANSPORTATION AND MARITIME LAW
he sha%% $e %ia$%e to the o)ners of the &oo's a-era&e' for the 'aa&es
they ay s!ffer thro!&h his 'e%ay or ne&%i&ence.
Art. 3*1. If the #ersons contri$!tin& sho!%' not #ay the
ao!nt of the contri$!tion at the en' of the thir' 'ay after ha-in& $een
re0!ire' to 'o so, the &oo's sa-e' sha%% $e #rocee'e' a&ainst, at the
re0!est of the ca#tain, !nti% #ayent has $een a'e fro their
#rocee's.
Art. 3*3. If the #erson intereste' in recei-in& the &oo's
sa-e' sho!%' not &i-e sec!rity s!fficient to ans)er for the ao!nt
corres#on'in& to the &ross a-era&e, the ca#tain ay 'efer the
'e%i-ery thereof !nti% #ayent has $een a'e.
Art. 3*5. The e(#erts )ho the co!rt or the #ersons
intereste' ay a##oint, as the case ay $e, sha%% #rocee' )ith the
e(aination an' a##raiseent of the a-era&es in the anner
#rescri$e' in Artic%es 3B; an' 3B?, R!%es D to 1, in so far as they are
a##%ica$%e.
#0$ Fi+uidation of &articular
a)erage
Art. 3*5. The e(#erts )ho the co!rt or the #ersons
intereste' ay a##oint, as the case ay $e, sha%% #rocee' )ith the
e(aination an' a##raiseent of the a-era&es in the anner
#rescri$e' in Artic%es 3B; an' 3B?, R!%es D to 1, in so far as they are
a##%ica$%e.
-. Arri-a%s Cn'er Stress
#a$ Causes
Art. 315. If '!rin& the -oya&e the ca#tain sho!%' $e%ie-e that
the -esse% cannot contin!e the tri# to the #ort of 'estination on
acco!nt of the %ac2 of #ro-isions, )e%%6fo!n'e' fear of sei"!re,
#ri-ateers, or #irates, or $y reason of any acci'ent of the sea 'isa$%in&
it to na-i&ate, he sha%% asse$%e the officers an' sha%% s!on the
#ersons intereste' in the car&o )ho ay $e #resent, an' )ho ay
atten' the eetin& )itho!t the ri&ht to -ote@ an' if, after e(ainin& the
circ!stances of the case, the reason sho!%' $e consi'ere' )e%%6
fo!n'e', the arri-a% at the nearest an' ost con-enient #ort sha%% $e
a&ree' !#on, 'raftin& an' enterin& the #ro#er in!tes, )hich sha%% $e
si&ne' $y a%%, in the %o& $oo2.
The ca#tain sha%% ha-e the 'eci'in& -ote, an' the #ersons
intereste' in the car&o ay a2e the o$.ections an' #rotests they ay
'ee #ro#er, )hich sha%% $e entere' in the in!tes in or'er that they
ay a2e !se thereof in the anner they ay consi'er a'-isa$%e.
Art. 3D+. An arri-a% sha%% not $e consi'ere' %a)f!% in the
fo%%o)in& cases9
1. If the %ac2 of #ro-isions sho!%' arise fro the fai%!re to
ta2e the necessary #ro-isions for the -oya&e accor'in& to !sa&e an'
c!sto, or if they sho!%' ha-e $een ren'ere' !se%ess or %ost thro!&h
$a' sto)a&e or ne&%i&ence in their care.
D. If the ris2 of eneies, #ri-ateers, or #irates sho!%' not
ha-e $een )e%% 2no)n, anifest, an' $ase' on #ositi-e an' #ro-a$%e
facts.
;. If the 'efector the -esse% sho!%' ha-e arisen fro the fact
that it )as not re#aire', ri&&e', e0!i##e', an' #re#are' in a anner
s!ita$%e for the -oya&e, or fro soe erroneo!s or'er of the ca#tain.
?. Whene-er a%ice, ne&%i&ence, )ant of foresi&ht, or %ac2 of
s2i%% on the #art of the ca#tain e(ists in the act ca!sin& the 'aa&e.
Arri-a% !n'er stress9 Arri)al of a )essel at the nearest and most
con)enient &ort, if during the )o'age the )essel cannot continue the tri& to
the &ort of destination due to = #1$ lac: of &ro)isions, #-$ *ell6founded fear of
seiAure, &ri)ateers, or &irates, #;$ b' reason of an' accident of the sea
disabling it to na)igate
#b$ <ormalities
Art. 315. If '!rin& the -oya&e the ca#tain sho!%' $e%ie-e that
the -esse% cannot contin!e the tri# to the #ort of 'estination on
acco!nt of the %ac2 of #ro-isions, )e%%6fo!n'e' fear of sei"!re,
#ri-ateers, or #irates, or $y reason of any acci'ent of the sea 'isa$%in&
it to na-i&ate, he sha%% asse$%e the officers an' sha%% s!on the
#ersons intereste' in the car&o )ho ay $e #resent, an' )ho ay
atten' the eetin& )itho!t the ri&ht to -ote@ an' if, after e(ainin& the
circ!stances of the case, the reason sho!%' $e consi'ere' )e%%6
fo!n'e', the arri-a% at the nearest an' ost con-enient #ort sha%% $e
a&ree' !#on, 'raftin& an' enterin& the #ro#er in!tes, )hich sha%% $e
si&ne' $y a%%, in the %o& $oo2.
The ca#tain sha%% ha-e the 'eci'in& -ote, an' the #ersons
intereste' in the car&o ay a2e the o$.ections an' #rotests they ay
'ee #ro#er, )hich sha%% $e entere' in the in!tes in or'er that they
ay a2e !se thereof in the anner they ay consi'er a'-isa$%e.
<ormalities = 1. assembl' of the officers including all interested &arties
-. drafting and entering in the log boo: the &ro&er minutes, *hich shall be
signed b' all
;. entr' in the log boo: of the obBections and &rotests of the &ersons
interested in the cargo
Art. 3DD. If in or'er to a2e re#airs to the -esse% or $eca!se
there is 'an&er that the car&o ay s!ffer 'aa&e, it sho!%' $e
necessary to !n%oa', the ca#tain !st re0!est a!thori"ation fro the
co#etent .!'&e or co!rt for the reo-a%, an' carry it o!t )ith the
2no)%e'&e of the #erson intereste' in the car&o, or his re#resentati-e,
sho!%' there $e any.
In a forei&n #ort, it sha%% $e the '!ty of the Hi%i#ino cons!%,
)here there is one, to &i-e the a!thori"ation.
In the first case, the e(#enses sha%% $e for the acco!nt of the
shi# a&ent or o)ner, an' in the secon', they sha%% $e char&ea$%e
a&ainst the o)ners of the erchan'ise for )hose $enefit the act )as
#erfore'.
If the !n%oa'in& sho!%' ta2e #%ace for $oth reasons, the
e(#enses sha%% $e 'i-i'e' #ro#ortionate%y $et)een the -a%!e of the
-esse% an' that of the car&o.
#c$ D7&enses
Art. 3D1. The e(#enses of an arri-a% !n'er stress sha%%
a%)ays $e for the acco!nt of the shi#o)ner or a&ent, $!t they sha%% not
$e %ia$%e for the 'aa&es )hich ay $e ca!se' the shi##ers $y reason
of the arri-a%, #ro-i'e' the %atter is %e&itiate.
Other)ise, the shi# a&ent an' the ca#tain sha%% $e .oint%y
%ia$%e.
Art. 3DD. If in or'er to a2e re#airs to the -esse% or $eca!se
there is 'an&er that the car&o ay s!ffer 'aa&e, it sho!%' $e
necessary to !n%oa', the ca#tain !st re0!est a!thori"ation fro the
co#etent .!'&e or co!rt for the reo-a%, an' carry it o!t )ith the
2no)%e'&e of the #erson intereste' in the car&o, or his re#resentati-e,
sho!%' there $e any.
In a forei&n #ort, it sha%% $e the '!ty of the Hi%i#ino cons!%,
)here there is one, to &i-e the a!thori"ation.
In the first case, the e(#enses sha%% $e for the acco!nt of the
shi# a&ent or o)ner, an' in the secon', they sha%% $e char&ea$%e
a&ainst the o)ners of the erchan'ise for )hose $enefit the act )as
#erfore'.
If the !n%oa'in& sho!%' ta2e #%ace for $oth reasons, the
e(#enses sha%% $e 'i-i'e' #ro#ortionate%y $et)een the -a%!e of the
-esse% an' that of the car&o.
Re0!isites for the ca#tain to !n%oa' the car&o arri-in& !n'er stress9
1. the unloading must be necessar' to ma:e re&airs or there must be
danger that the cargo ma' suffer damage
-. the ca&tain must be authoriAed b' either a com&etent court or the Phil.
consul, de&ending on the &ort of arri)al
#d$ Res&onsibilit' of Ca&tain
Art. 3D;. The c!sto'y an' #reser-ation of the car&o )hich
has $een !n%oa'e' sha%% $e entr!ste' to the ca#tain, )ho sha%% $e
res#onsi$%e for the sae, e(ce#t in cases of force a.e!re.
PAGE 59
TRANSPORTATION AND MARITIME LAW
Art. 3D?. If the entire car&o or #art thereof sho!%' a##ear to
$e 'aa&e', or there sho!%' $e iinent 'an&er of its $ein&
'aa&e', the ca#tain ay re0!est of the co#etent .!'&e or co!rt, or
of the cons!% in a #ro#er case, the sa%e of a%% or of #art of the forer,
an' the #erson ta2in& co&ni"ance of the atter sha%% a!thori"e it, after
an e(aination an' 'ec%aration of e(#erts, a'-ertiseents, an' other
fora%ities re0!ire' $y the case, an' an entry in the $oo2, in
accor'ance )ith the #ro-isions of Artic%e *D?.
The ca#tain sha%%, in a #ro#er case, .!stify the %e&a%ity of his
con'!ct, !n'er the #ena%ty of ans)erin& to the shi##er for the #rice
the erchan'ise )o!%' ha-e $ro!&ht if it ha' arri-e' in &oo'
con'ition at the #ort of 'estination.
Art. 3DB. The ca#tain sha%% $e res#onsi$%e for the 'aa&es
ca!se' $y his 'e%ay, if after the ca!se of the arri-a% !n'er stress has
cease', he sho!%' not contin!e the -oya&e.
If the ca!se of the arri-a% sho!%' ha-e $een the fear of
eneies, #ri-ateers, or #irates, a 'e%i$eration an' reso%!tion in a
eetin& of the officers of the -esse% an' #ersons intereste' in the
car&o )ho ay $e #resent, in accor'ance )ith the #ro-isions
containe' in Artic%e 315, sha%% #rece'e the 'e#art!re.
2he ca&tain has the dut' to continue the )o'age *ithout dela' after the
cause of the arri)al under stress has ceased66R other*ise, he shall be liable
for damages caused b' the dela'
;. /o%%isions
/o%%ision9 im&act of t*o )essels both of *hich are mo)ing
A%%ision9 stri:ing of a mo)ing )essel against one that is stationar'
Cases of collision =
1. due to the fault, negligence or lac: of s:ill of the ca&tain, sailing mate or
the com&lement of the )essel 66R under !-/, the shi&o*ner shall be liable
for the losses and damages
-. due to the fault of both )essels 66R under !-", each )essel shall suffer its
o*n losses, but as regards the o*ners of the cargoes, both )essels shall be
Bointl' and se)erall' liable
;. *here it cannot be determined *hich of the - )essels is at fault 66R under
!-!, each )essel shall suffer its o*n losses, and both shall also be solidaril'
res&onsible for the losses and damages caused to their cargoes
0. collision due to fortuitous e)ent or force maBeure 66R under !;?, each
)essel shall bear its o*n damages
1. *here t*o )essels collide *ith each other *ithout their fault but b' reason
of the fault of a third )essel 66R under !;1, the o*ner of the third )essel
causing the collision shall be liable for the losses and damages /. a )essel
*hich is &ro&erl' anchored and moored ma' collide *ith those nearb' b'
reason of a storm or other cause of force maBeure 66R under !;-, the )essel
run into shall suffer its o*n damages and e7&enses
Na!tica% R!%es to 'eterine ne&%i&ence 9
1. %hen - )essels are about to enter a &ort, the farther one must
allo* the nearer to enter firstG if the' collide, the fault is &resumed to be
im&utable to the one *ho arri)ed later, unless it can be &ro)ed that there
*as no fault on its &art.
-. %hen - )essels meet, the smaller should gi)e the right of *a'
to the larger one.
;. A )essel lea)ing &ort should lea)e the *a' clear for another
*hich ma' be entering the same &ort.
0. 2he )essel *hich lea)es later is &resumed to ha)e collided
against one *ho has left earlier.
1. 2here is also a &resum&tion against the )essel *hich sets sail
at night.
/. 2he &resum&tion also *or:s against the )essel *ith s&read
sails *hich collides *ith another *hich is at anchor, and cannot mo)e, e)en
*hen the cre* of the latter has recei)ed *ord to lift anchor, *hen there *as
not sufficient time to do so or there *as fear of a greater damage or other
legitimate reason.
". 2he )essel *hich is not &ro&erl' moored or does not obser)e
the &ro&er distances, has the &resum&tion against itself.
!. 2he )essel *hich is moored at a &lace not used for the
&ur&ose, or *hich is im&ro&erl' moored or does not ha)e sufficient cables,
or *hich has been left *ithout *atch, has also against itself the
&resum&tion.
. 2he same rule a&&lies to those )essels *hich do not ha)e
buo's to indicate the location of its anchors to &re)ent damage to these
)essels *hich ma' a&&roach it.
Mones in tie of co%%isions <; tie "ones=9
1. all the time u& to the moment *hen the ris: of collision ma'
ha)e said to ha)e begun
66R *ithin this Aone, no rule is a&&licable because none is
necessar'. Dach )essel is free to direct its course as it deems best *ith
reference to the mo)ements of the other )essel.
-. the time bet*een the moment *hen the ris: of collission
begins and the moment *hen it has become a &ractical necessit'.
;. the time bet*een the moment *hen collission has become a
&ractical certaint' and the moment of actual contact
Effect of fa!%t of #ri-i%e&e' -esse% '!rin& thir' "one 9
If a )essel ha)ing a right of *a' suddenl' changes its course
during the third Aone, in an effort to a)oid an imminent collision due to the
fault of another )essel, such act ma' be said to be done in e7tremis, and
e)en if *rong, cannot create res&onsibilit' on the &art of said )essel *ith
the right of *a'. 2hus, it has been held that fault on the &art of the sailing
)essel at the moment &receding a collission, that is, during the third di)ision
of time, does not absol)e the steamshi& *hich has suffered herself and a
sailing )essel to get into such dangerous &ro7imit' as to cause ine)itable
harm and confusion, and a collision results as a conse+uence. 2he steamer
ha)ing a far greater fault in allo*ing such &ro7imit' to be brought about is
chargeable *ith all the damages resulting from the collissionG and the act of
the sailing )essel ha)ing been done in e7tremis and e)en *rong, is not
res&onsible for the result.
#a$ Classes and Dffects
#1$ <ortuitous
Art. 3;+. If a -esse% sho!%' co%%i'e )ith another thro!&h
fort!ito!s e-ent or force a.e!re, each -esse% an' its car&o sha%% $ear
its o)n 'aa&es.
Art. 3;D. If, $y reasons of a stor or other ca!se of force
a.e!re, a -esse% )hich is #ro#er%y anchore' an' oore' sho!%'
co%%i'e )ith those near$y, ca!sin& the 'aa&es, the in.!ry
occasione' sha%% $e consi'ere' as #artic!%ar a-era&e of the -esse% r!n
into.
Dach to his o*n damage 66R &articular damage
#-$ Cul&able
Art. 3D*. If a -esse% sho!%' co%%i'e )ith another, thro!&h the
fa!%t, ne&%i&ence, or %ac2 of s2i%% of the ca#tain, sai%in& ate, or any
other e$er of the co#%eent, the o)ner of the -esse% at fa!%t sha%%
in'enify the %osses an' 'aa&es s!ffere', after an e(#ert a##raisa%.
%here the obligation arises from tortious act and not from contract, both the
o*ner and the shi&agent should be declared liable
Art. 3D1. If the co%%ision is i#!ta$%e to $oth -esse%s, each
one sha%% s!ffer its o)n 'aa&es, an' $oth sha%% $e so%i'ari%y
res#onsi$%e for the %osses an' 'aa&es occasione' to their car&oes.
PAGE 60
TRANSPORTATION AND MARITIME LAW
Eefense of due diligence of a good father of a famil' in the selection and
)igilance of the officers and cre* cannot be used to render nugator' the
solidar' liabilit' under !-"
Under the e7&ress &ro)isions of !-", the shi&o*ners cannot successfull'
maintain an action against the other for the loss or inBur' to his )essel
Art.3;1. If a -esse% sho!%' $e force' $y a thir' -esse% to
co%%i'e )ith another, the o)ner of the thir' -esse% sha%% in'enify the
%osses an' 'aa&es ca!se', the ca#tain thereof $ein& ci-i%%y %ia$%e to
sai' o)ner.
#;$ Inscrutable <ault
Art. 3D3. The #ro-isions of the #rece'in& artic%e are
a##%ica$%e to the case in )hich it cannot $e 'eterine' )hich of the
t)o -esse%s has ca!se' the co%%ision.
Relation of Art. !-" to Art. !-!
Art. !-! must be considered an e7tension of Art. !-"
2he rule of liabilit' under Art. !-" is a&&licable not onl' to the
case *here both )essels ma' be sho*n to be actuall' blame*orth' but also
to the case *here it is ob)ious that onl' one *as at fault but the &roof does
not sho* *hich
Under Arts. !-" and !-!, in case of collision bet*een t*o
)essels at sea, both are solidaril' liable for the loss of cargo carried b'
either to the full e7tent of the )alue thereof, not onl' in the cse *here both
)essels ma' be sho*n to be actuall' blame*orth' but also in the case
*here it is sho*n that onl' one *s at fault but the &roof does not sho* it 66R
it ma:es no difference that the negligence im&utable to the t*o )essels ma'
ha)e differed some*hat in character and degree and that the negligence of
the sun:en shi& *as some*hat more mar:ed than that of the ther
2he doctrine of last clear chance cannot be raised 66R under the
e7&ress &ro)isions of Art. !-", under *hich the e)idence disclosing that
both )essels are blame*orth', the o*ners of neither can successfull'
maintain an action against the other for the loss or inBur' to his )essel
#b$ Presum&tion of loss b' collision
Art.3;;. A -esse% )hich, !#on $ein& r!n into, sin2s
ie'iate%y, as )e%% as that )hich, ha-in& $een o$%i&e' to a2e a #ort
to re#air the 'aa&es ca!se' $y the co%%ision, is %ost '!rin& the
-oya&e or is o$%i&e' to $e stran'e' in or'er to $e sa-e', sha%% $e
#res!e' as %ost $y reason of co%%ision.
#c$ Fiabilities
#1$ 3hi&o*ner or agent
Art. 3;1. The ci-i% %ia$i%ity inc!rre' $y the shi#o)ners in the
cases #rescri$e' in this section, sha%% $e !n'erstoo' as %iite' to the
-a%!e of the -esse% )ith a%% its a##!rtenances an' frei&hta&e earne'
'!rin& the -oya&e.
Art. 3;3. When the -a%!e of the -esse% an' her
a##!rtenances sho!%' not $e s!fficient to co-er a%% the %ia$i%ities, the
in'enity '!e $y reason of the 'eath or in.!ry of #ersons sha%% ha-e
#reference.
Fimited liabilit' = limited to the )alue of the )essel and the freight earned
during the )o'age 8&ro)ided for in Arts. 1!", 1? and !;"9
Eamages ma' be reco)ered to the e7tent of *hat ma' be
sal)aged or of the freightage recei)ed or of the )alue of the insurance
reco)erable
#-$ Ca&tain, &ilot, others
Art. 3D5. In the cases a$o-e entione' the ci-i% action of
the o)ner a&ainst the #erson ca!sin& the in.!ry as )e%% as the
criina% %ia$i%ities, )hich ay $e #ro#er, are reser-e'.
Art. 3;?. If the -esse%s co%%i'in& )ith each other sho!%' ha-e
#i%ots on $oar' 'ischar&in& their '!ties at the tie of the co%%ision,
their #resence sha%% not e(e#t the ca#tains fro the %ia$i%ities they
inc!r, $!t the %atter sha%% ha-e the ri&ht to $e in'enifie' $y the #i%ots,
)itho!t #re.!'ice to the criina% %ia$i%ity )hich the %atter ay inc!r.
#;$ conditionsG &rotests
Art. 3;B. The action for the reco-ery of %osses an' 'aa&es
arisin& fro co%%isions cannot $e a'itte' if a #rotest or 'ec%aration is
not #resente' )ithin t)enty6fo!r ho!rs $efore the co#etent a!thority
of the #oint )here the co%%ision too2 #%ace, or that of the first #ort of
arri-a% of the -esse%, if in Phi%i##ine territory an' to the cons!% of the
Phi%i##ines, if it occ!rre' in a forei&n co!ntry.
Art. 3;*. With res#ect to 'aa&es ca!se' to #ersons or to
the car&o, the a$sence of a #rotest ay not #re.!'ice the #ersons
intereste' )ho )ere not on $oar' or )ere not in a con'ition to a2e
2no)n their )ishes.
Art. !;1 establishes a condition &recedent before an' action for the
reco)er' of damages arising from collisions ma' be admitted 66R
&resentation of a &rotest or declaration *ithin -0 hours before the &ro&er
authorities 8com&etent authorit' at the &oint *here the collision too: &lace or
of the first &ort of arri)al of the )essel or to the consul of the Phili&&ines if it
occurred in a foreign countr'9
2he re+uirement of &rotest is not necessar' *ith res&ect to small boats
engaged in ri)er and ba' traffic and boats manned b' a grou& of fishermen
Reason for re0!irin& #rotest9 4eccesit' of &re)enting fictitious collisions
and im&ro&er indemnities
S!ary of cases )here #rotest is re0!ire'9
1. under /1-, *hen the )essel ma:es an arri)al under stress
-. under /1-, /-0 and !0;, *here the )essel is shi&*rec:ed
;. under /-0, *here the )essel has gone through a hurricane or *hen the
ca&tain belie)es that the cargo has suffered damages or a)erages
0. under !;1, in case of maritime collisions
Art. 3;5. If the co%%ision sho!%' ta2e #%ace $et)een
Phi%i##ine -esse%s in forei&n )aters, of if ha-in& ta2en #%ace in the
o#en seas, an' the -esse%s sho!%' a2e a forei&n #ort, the Hi%i#ino
cons!% in sai' #ort sha%% ho%' a s!ary in-esti&ation of the acci'ent,
for)ar'in& the #rocee'in&s to the Secretary of the De#artent of
Horei&n Affairs for contin!ation an' conc%!sion.
0. Shi#)rec2s
Art. 3?+. The %osses an' 'eteriorations s!ffere' $y a -esse%
an' her car&o $y reason of shi#)rec2 or stran'in& sha%% $e
in'i-i'!a%%y for the acco!nt of the o)ners, the #art )hich ay $e
sa-e' $e%on&in& to the in the sae #ro#ortion.
Art. 3?1. If the )rec2 or stan'in& sho!%' $e ca!se' $y the
a%ice,e ne&%i&ence, or %ac2 of s2i%% of the ca#tain, or $eca!se the
-esse% #!t to sea ins!fficient%y re#aire' an' e0!i##e', the shi# a&ent
or the shi##ers ay 'ean' in'enity of the ca#tain for the 'aa&es
ca!se' to the -esse% or to the car&o $y the acci'ent, in accor'ance
)ith the #ro-isions containe' in Artic%es *1+, *1D, *1?, an' *D1.
Shi#)rec29 Foss of a )essel at sea, either b' being s*allo*ed u& b' the
*a)es, b' running against another )essel or thing at sea, or on coast 66R
renders the shi& inca&able of na)igation
Under !01, in case the *rec: or stranding is due to the #1$
malice, negligence, or lac: of s:ill of the ca&tain, or #-$ because the )essel
&ut to sea *as insufficientl' re&aired and e+ui&&ed, the ca&tain shall be
liable
Art. 3?D. The &oo's sa-e' fro the )rec2 sha%% $e s#ecia%%y
$o!n' for the #ayent of the e(#enses of the res#ecti-e sa%-a&e, an'
the ao!nt thereof !st $e #ai' $y the o)ners of the forer $efore
PAGE 61
TRANSPORTATION AND MARITIME LAW
they are 'e%i-ere' to the, an' )ith #reference o-er any other
o$%i&ation if the erchan'ise sho!%' $e so%'.
%here a shi& and its cargo are sa)ed together, the sal)age allo*ance
should be charged against the shi& and cargo in &ro&ortion of their
res&ecti)e )alues, the same as in general a)erages and neither is liable for
the sal)age due from the other
%here a &ersonal action is brought b' the sal)or against the
o*ner of the shi&, the liabilit' of the latter is limited to such &art of the
sal)age com&ensation due for the entire ser)ice as is &ro&ortionate to the
)alue of the shi&
Art. 3?;. If se-era% -esse%s sai% !n'er con-oy, an' any of
the sho!%' $e )rec2e', the car&os sa-e' sha%% $e 'istri$!te' aon&
the rest in #ro#ortion to the ao!nt )hich each one is a$%e to ta2e.
If any ca#tain sho!%' ref!se, )itho!t s!fficient ca!se, to
recei-e )hat ay corres#on' to hi, the ca#tain of the )rec2e'
-esse%s sha%% enter a #rotest a&ainst hi, $efore t)o sea officia%s, of
the %osses an' 'aa&es res!%tin& therefro, ratifyin& the #rotest
)ithin t)enty6fo!r ho!rs after arri-a% at the first #ort, an' inc%!'in& it
in the #rocee'in&s he !st instit!te in accor'ance )ith the #ro-isions
containe' in Artic%e *1D.
If it is not #ossi$%e to transfer to the other -esse%s the entire
car&o of the -esse% )rec2e', the &oo's of the hi&hest -a%!e an'
sa%%est -o%!e sha%% $e sa-e' first, the 'esi&nation thereof to $e
a'e $y the ca#tain )ith the conc!rrence of the officers of his -esse%.
3al)age Fa* #Act 4o. -/1/$
Section 1. When in case of shi#)rec2, the -esse% or its car&o
sha%% $e $eyon' the contro% of the cre), or sha%% ha-e $een a$an'one'
$y the, an' #ic2e' !# an' con-eye' to a safe #%ace $y other
#ersons, the %atter sha%% $e entit%e' to a re)ar' for the sa%-a&e.
Those )ho, not $ein& inc%!'e' in the a$o-e #ara&ra#h,
assist in sa-in& a -esse% or its car&o fro shi#)rec2, sha%% $e entit%e'
to a %i2e re)ar'.
Sa%-a&e.66 2he com&ensation allo*ed to &ersons b' *hose )oluntar'
assistance a shi& at sea or her cargo or both ha)e been sa)ed in *hole or in
&art from im&ending sea &eril, or such &ro&ert' reco)ered from actual &eril
or loss, as in cases of shi&*rec:s, derelict or reca&ture 66 a
ser)ice *hich one &erson, renders to the o*ner of a shi& or goods b' his
o*n labor, &reser)ing the goods or shi& *hich the o*ner or those entrusted
*ith the care of them either abandoned in distress at sea or are unable to
&rotect and secure 666R a &ermit is re+uired to engage in sal)age business
Shi#)rec266 means a shi& *hich has recei)ed inBuries rendering her
inca&able b' na)igationG loss of a )essel at sea, either b' being s*allo*ed
u& b' the *a)es, running against a thing at sea, or on the coast
Dere%ict.66 A shi& or her cargo *hich is abandoned and deserted at sea b'
those *ho are in charge of it, *ithout an' ho&e of reco)ering it, or *ithout
an' intention of returning it 66R if those in charge of the &ro&ert' left it *ith
the intention of finall' lea)ing it, it is a derelict and the change of their
intention and an attem&t to return to it *ill not change its nature
e7. a schooner *hich has ca&siAed in the high seas, deserted b'
her ca&tain *ith no intention to return, is a derelict
a )essel, though not abandoned, ma' be the subBect of sal)age,
if at the time the ser)ices *ere rendered, there *as a &robable, threatening
danger to the )essel or its cargo 66R if the )essel to*ed is aided in esca&ing
&resent or &ros&ecti)e danger, the ser)ice is one of sal)age an the to*age
is merel' incidental
Ri&hts of fin'er of 'ere%ict9 2he finder *ho ta:es &ossession
*ith the intention of sa)ing her, gains a right of &ossession *hich he can
maintain against the true o*ners. 2he o*ner does not renounce his right of
&ro&ert'. 2his is not &resumed to be intentional, nor does the finder ac+uire
an' such right. But the o*ner thus abandons tem&oraril', his right of
&ossession, *hich is transferred to the finder *ho becomes bound to
&reser)e the &ro&ert' *ith G< and bring it to a &lace of safet' for the
o*nerHs useG in return, he ac+uires a right to be &aid for his ser)ice a
reasonable and &ro&er com&ensation out of the &ro&ert' itself. Ce is not
bound to &art *ith the &ossession until he is &aid or the &ro&ert' is ta:en
into the &ossession of the la* &re&arator' to the amount of sal)age being
legall' asserted
E%eents of a -a%i' sa%-a&e9
1. a marine &eril
-. ser)ice )oluntaril' rendered *hen not re+uired as an e7isting
dut' or from s&ecial contract
;. success, in *hole or in &art, or that the ser)ices rendered
contributed to such success
Eistinction bet*een sal)age and to*age is of im&ortance to the
cre* of the sal)aging shi& = if the contract for to*age is in fact to*age, then
the cre* does not ha)e an' interest or rights *ith the renumeration &ursuant
to the contractG BU2 if the o*ners of the res&ecti)e )essels are of a sal)age
nature, the cre* of the sal)aging shi& is entitled to sal)age, and can loo: to
the sal)aged )essel for its share
Ca&tain to*ing )essel cannot in)o:e e+uit' in +uasi6contract of
to*age 66R there is an e7&ress &ro)ision of la* #Art. -10-, 4CC$ a&&licable
to the relationshi& of +uasi6contract of to*age, *here the cre* is not entitled
to com&ensation se&arate from that of the )essel
Section D. If the ca#tain of the -esse%, or the #erson actin& in
his stea', is #resent, no one sha%% ta2e fro the sea, or fro the
shores, or coast erchan'ise or effects #rocee'in& fro a shi#)rec2
or #rocee' to the sa%-a&e of the -esse%, )itho!t the consent of s!ch
ca#tain or #erson actin& in his stea'.
Section ;. Ee )ho sha%% sa-e or #ic2 !# a -esse% or
erchan'ise at sea, in the a$sence of the ca#tain of the -esse%, o)ner
or a re#resentati-e of either of the, they $ein& !n2no)n, sha%% con-ey
an' 'e%i-er s!ch -esse% or erchan'ise, as soon as #ossi$%e, to the
/o%%ector of /!stos, if the #ort has a co%%ector, an' other)ise to the
#ro-incia% treas!rer or !nici#a% ayor.
Section ?. After the sa%-a&e is acco#%ishe', the o)ner or
his re#resentati-e sha%% ha-e the ri&ht to the 'e%i-ery of the -esse% or
the thin&s sa-e', #ro-i'e' that he #ays or &i-es a $on' to sec!re the
e(#enses an' the #ro#er re)ar'.
3al)or has an interest in the &ro&ert'G this is called a lien, but it is not a debt
due b' the o*ner to the sal)or for ser)ices rendered but u&on the &rinci&le
that the ser)ice creates a &ro&ert' in the thing sa)ed 66R he is, to all intents
and &ur&oses, a Boint o*ner and if, the &ro&ert' is lost he must bear his
share li:e other Boint o*ners.
Pa'ment of com&ensation *here )essel and cargo sal)age = *here a shi&
and its cargo are sa)ed together, the sal)age allo*ance should be charged
against the shi& and cargo in the &ro&ortion of their res&ecti)e )alues, as in
the case of general a)erage
Section B. The /o%%ector of /!stos, #ro-incia% treas!rer, or
!nici#a% ayor, to )ho a sa%-a&e is re#orte', sha%% or'er9
a. That the thin&s sa-e' $e safe&!ar'e' an' in-entorie'.
$. The sa%e at #!$%ic a!ction of the thin&s sa-e' )hich ay
$e in 'an&er of ie'iate %oss or those )hose conser-ation is
e-i'ent%y #re.!'icia% to the interests of the o)ner, )hen no o$.ection is
a'e to s!ch sa%e.
c. The a'-ertiseent )ithin the ;+ 'ays s!$se0!ent to the
sa%-a&e, in one of the %oca% ne)s#a#ers or in the nearest ne)s#a#er
#!$%ishe', of a%% the 'etai%s of the 'isaster, )ith a stateent of the
ar2 an' n!$er of the effects re0!estin& a%% intereste' #ersons to
a2e their c%ais.
Section *. If, )hi%e the -esse% or thin& sa-e' are at the
'is#osition of the a!thorities, the o)ner or his re#resentati-e sha%%
c%ai the, s!ch a!thorities sha%% or'er their 'e%i-ery to s!ch o)ner or
his re#resentati-e, #ro-i'e' that there is no contro-ersy o-er their
-a%!e, an' a $on' is &i-en $y the o)ner or his re#resentati-e to sec!re
the #ayent of the e(#enses an' the #ro#er re)ar'. Other)ise, the
'e%i-ery sha%% not $e a'e !nti% the atter is 'eci'e' $y the /HI <RT/=
of the #ro-ince.
Section 1. No c%ai $ein& #resente' in the three onths
s!$se0!ent to the #!$%ication of the a'-ertiseents #rescri$e' in
s!$section <c= of Section B, the thin&s sa-e' sha%% $e so%' at #!$%ic
a!ction, an' their #rocee's, after 'e'!ctin& the e(#enses an' the
#ro#er re)ar' sha%% $e 'e#osite' in the ins!%ar treas!ry. If three years
sha%% #ass )itho!t anyone c%aiin& it, one6ha%f of the 'e#osit sha%% $e
a'.!'&e' to hi )ho sa-e' the thin&s, an' the other ha%f to the ins!%ar
&o-ernent.
Section 3. The fo%%o)in& sha%% ha-e no ri&ht to a re)ar' for
sa%-a&e or assistance9
PAGE 62
TRANSPORTATION AND MARITIME LAW
a. The cre) of the -esse% shi#)rec2e' or )hich )as in
'an&er of shi#)rec2@
$. Ee )ho sha%% ha-e coence' the sa%-a&e in s#ite of
o##osition of the ca#tain or his re#resentati-e@ an'
c. Ee )ho sha%% ha-e fai%e' to co#%y )ith the #ro-isions of
Section ;.
Section 5. If, '!rin& the 'an&er, an a&reeent is entere' into
concernin& the ao!nt of the re)ar' for sa%-a&e or assistance, its
-a%i'ity ay $e i#!&ne' $eca!se it is e(cessi-e, an' it ay $e
re0!ire' to $e re'!ce' to an ao!nt #ro#ortionate to the
circ!stances.
Iin's of sa%-a&e ser-ice9
#1$ )oluntar' 6 *herein the com&ensation is de&endent u&on
success
#-$ rendered under a contract for a &ier diem or &er horam
*age, &a'able at all e)ents
%here the com&ensation is de&endent u&on success, it ma' be )er' much
larger than mere !uantum meruit 66R as a re*ard for &erilous ser)ices
3uch contracts for sal)age *ill not be set aside unless corru&tl'
entered into, or made under fraudulent re&resentations, a clear mista:e or
su&&ression of im&ortant facts, under com&ulsion or contrar' to e+uit' and
good conscience
Section 1+. In a case coin& !n'er the %ast #rece'in&
section, as )e%% as in the a$sence of an a&reeent, the re)ar' for
sa%-a&e or assistance sha%% $e fi(e' $y the RT/ of the #ro-ince )here
the thin&s sa%-a&e' are fo!n', ta2in& into acco!nt #rinci#a%%y the
e(#en'it!res a'e to reco-er, or sa-e the -esse% or the car&o or $oth,
the "ea% 'eonstrate', the tie e#%oye', the ser-ices ren'ere', the
e(cessi-e e(#enses occasione', the n!$er of #ersons )ho ai'e',
the 'an&er to )hich they an' their -esse%s )ere e(#ose' as )e%% as
that )hich enace' the thin&s reco-ere' or sa%-a&e', an' the -a%!e of
s!ch thin&s after 'e'!ctin& the e(#enses.
Reasons for a%%o)in& sa%-a&e co#ensation to sa%-in& -esse%9
#1$ to re*ard &rom&tness, energ', efficienc', and heroic endea)or in sa)ing
life and &ro&ert' in &erilG
#-$ to com&ensate the use and ser)ice of the )essel as an indis&ensable
instrument for the sal)ageG
#;$ recogniAes the danger and ris: to *hich the cre* and the )essel *ere
e7&osed to in sa)ing the shi& and &ro&ert' and life.
2he amount should be liberal enough to co)er the e7&enses and to gi)e an
e7tra sum as a re*ard for the ser)ices renderedG should be liberal enough to
offer an inducement to others to render li:e ser)ices in similar emergencies
in the futureG BU2 should not be so high as to cause )essels in need of
assistance to hesitate because of ruinous cost
5Public &olic' encourages the hard' and ad)enturous
mariner to engage in these laborious and sometimes
dangerous enter&rises, and *ith a )ie* to *ithdra*
from him e)er' tem&tation to embeAAlement and
dishonest', the la* allo*s him, in case he is
successful, a liberal com&ensation.5
Section 11. Hro the #rocee's of the sa%e of the thin&s sa-e'
sha%% $e 'e'!cte', first, the e(#enses of their c!sto'y, con-ersation,
a'-ertiseent, an' a!ction, as )e%% as )hate-er ta(es or '!ties they
sho!%' #ay for their entrance@ then there sha%% $e 'e'!cte' the e(#enses
of sa%-a&e@ an' fro the net ao!nt reainin& sha%% $e ta2en the re)ar'
for the sa%-a&e or assistance )hich sha%% not e(cee' B+, of s!ch
ao!nt reainin&.
Section 1D. If in the sa%-a&e or in the ren'erin& of assistance
'ifferent #ersons sha%% ha-e inter-ene' the re)ar' sha%% $e 'i-i'e'
$et)een the in #ro#ortion to the ser-ices )hich each one ay ha-e
ren'ere', an' in case of 'o!$t, in e0!a% #arts.
Those )ho, in or'er to sa-e #ersons, sha%% ha-e $een e(#ose'
to the sae 'an&ers sha%% a%so ha-e a ri&ht to #artici#ation in the re)ar'.
4o other &erson has the right to interfere *ith the sal)age of a )essel or cargo
if the sal)or is able to effect the sal)age *ith fidelit' and )igor 66R if their
means are inade+uate, the' are bound to acce&t additional assistance if
offered
2a:ing &assengers from a sin:ing shi&, *ithout rendering an' ser)ice in
rescuing the )essel, is not a sal)age ser)ice, being a dut' of humanit' and not
for re*ard 66R the 3al)age Act, gi)ing sal)ors of human life a fair share or
remuneration offered to sal)ors of the )essel, refers to a situation *here both
li)es and &ro&ert' *ere simultaneousl' im&eriled and both are rescued at the
same time
Section 1;. If a -esse% or its car&o sha%% ha-e $een assiste' or
sa-e', entire%y or #artia%%y, $y another -esse%, the re)ar' for sa%-a&e or
for assistance sha%% $e 'i-i'e' $et)een the o)ner, the ca#tain, an' the
reain'er of the cre) of the %atter -esse%, so as to &i-e the o)ner a ha%f,
the ca#tain a fo!rth, an' a%% the reain'er of the cre) the other fo!rth of
the re)ar', in #ro#ortion to their res#ecti-e sa%aries, in the a$sence of
an a&reeent to the contrary. The e(#enses of sa%-a&e, as )e%% as the
re)ar' for sa%-a&e or assistance, sha%% $e a char&e on the thin& sa%-a&e'
or their -a%!e.
2he o*ner of the sal)ing )essel has al*a's been considered as entitled to
sal)age re*ard for the use of his )essel in rendering sal)age ser)ices, though
he *as not &resent *hen the sal)age ser)ice *as rendered 66R remuneration
is a*arded on account of the danger to *hich the ser)ice e7&oses their
&ro&ert' and the ris: *hich the' run of loss in suffering their )essels engaged
in such &erilous underta:ing.
Section 1?. This Act sha%% ta2e effect on its #assa&e. Enacte'
D:?:1*.
@RR )s @acondra' ;" Phil !1?
<= >n A&ril /, 111 the steamer 3e*ard o*ned b' @acondra' M Co.
left 3aigon for the Phili&&ine Islands, encountering a moderatel' high sea.
Faden *ith a cargo of rice, the *eight of *hich, ta:en *ith the condition of the
sea, caused the )essel to s&ring a lea:, and her master felt com&elled to
return to 3aigon. At this Buncture, the steamshi& Condagua o*ned b' &laintiff,
*as sighted, *hereu&on the 3e*ard fle* the international distress signal
as:ing for assistance. 2he Condagua changed her course and a&&roached
the 3e*ard. 3e*ard had indicated that it had s&rung a lea: and *ished to be
ta:en in to*. In res&onse to signals from the Condagua, the 3e*ard sent her
boat to the Condagua for a hea)ing line, b' means of *hich a ha*ser *as
&assed from the Condagua to the 3e*ard and the former, *ith the latter in
to*, then &roceeded at half s&eed to*ards 3aigon. 3hortl' after*ards, the
3e*ard signaled that the lea: *as gaining ra&idl'. 2he Condagua *ent full
s&eed ahead, until their arri)al at Ca&e 3t. ,ames, at the mouth of the 3aigon
Ri)er. 2he to*ing occu&ied some 0 or 1 hours and co)ered a distance of -? to
;? miles.
2he court found that the )alue of the 3e*ard u&on her arri)al at
Ca&e 3t. ,ames did not e7ceed P -?,??? and that the )alue of the cargo *as
a&&ro7imatel' P 10,???. 2he defendant com&an' had no interest in the cargo,
other than that of the carrier, and the cargo *as o*ned b' shi&&ers *hose
names do not a&&ear of record.
Plaintiff filed an action in the C<I of @anila, see:ing to reco)er from
defendant P "1,???, the alleged )alue of the sal)age ser)ice. 2he C<I
ordered the defendant to &a' P 0,??? to the &laintiff. Both a&&ealed.
Issues = Is the &laintiff entitled to reco)er renumeration for sa)ing the cargo as
*ell as for sa)ing the shi&( %hat is the reasonable com&ensation *hich
should be allo*ed(
Celd = 2here is no +uestion as to the liabilit' of defendant for the ser)ice
rendered b' &laintiff. 4or is there an' dis&ute o)er the fact that the ser)ice
rendered *as a sal)age ser)ice and renumerable as such. %here a shi& and
its cargo are sa)ed together, as a result of ser)ices carried on *ith a )ie* to
sa)ing both, the sal)age allo*ance should be a&&ortioned bet*een the shi&
and cargo in the &ro&ortion of their res&ecti)e )alues, the same as in a case of
general a)erageG and neither is liable for the sal)age due from the other. If one
*ho ha)e sal)ed both shi& and cargo brings before the court in his sal)age
action onl' the shi&, or onl' the cargo, he *ill get Budgment onl' for such
amount of re*ard as the court finds to be due in res&ect of the )alue of that
&ro&ert' *hich is before the court. 4ot onl' is the sal)age charge a se&arate
and di)isible burden as bet*een shi& and cargo, but also as bet*een &ortions
of the cargo belonging to different o*ners. 2here is no common liabilit' for the
amounts due from the shi& or other &ortions of the cargo *hen the shi& and
cargo, or either, are brought into the custod' of the court as a result of a
&roceeding in rem. 2he rule of liabilit' must be the same *here a &ersonal
action is instituted against the o*ners of the one or the other. 2he &ersonal
liabilit' of each must be limited to the &ortion of the sal)age charge *hich
should be borne b' his o*n &ro&ert'.
If it had been alleged and &ro)ed that the shi& *as unsea*orth'
*hen she &ut to sea or that the necessit' for the sal)age ser)ice *as due to
the negligence of the master, or of the shi&Hs o*ner, the latter might ha)e been
PAGE 63
TRANSPORTATION AND MARITIME LAW
liable, at least bet*een himself and the shi&&er, for the entire cost of the
ser)ice. But *hen the claim is &ut u&on the basis of sal)age, the fi7ing of the
com&ensation goes be'ond the limits of a +uantum meruit for the *or: and
labor done and in)ol)es the assessment of a bount'. 2he amount to be
allo*ed is in &art determined u&on considerations of e+uit' and &ublic &olic'G
and it is not &ro&er to ma:e the shi& or the shi&Hs o*ner liable for the *hole
amount. But *here the o*ner of the cargo has not been made a &art' to the
action, no reco)er' can be had in this action in regard to the ser)ice rendered
to the cargo.
In fi7ing the com&ensation, the ff. circumstances are ta:en into
consideration= #1$ the labor e7&ended b' the sal)ors in rendering the sal)age
ser)iceG #-$ the &rom&titude, s:ill and energ' dis&la'ed in rendering the
ser)ice and sa)ing the &ro&ert'G #;$ the )alue of the &ro&ert' em&lo'ed b' the
sal)ors, and the danger to *hich such &ro&ert' *as e7&osedG #0$ the ris:
incurred b' the sal)ors in rescuing the &ro&ert' from the im&ending &erilG #1$
the )alue of the &ro&ert' sal)edG and #/$ the degree of danger from *hich the
&ro&ert' *as rescued.
In a&&l'ing these criteria to this case, the ff. circumstances are
&ertinent = the Condagua *as dela'ed in her )o'age about nine hours. 2his
dela' caused her to enter Iloilo, the &ort of destination, in the earl' hours of
the morning instead of the late afternoon of the &re)ious da'G but the
unloading of her cargo *as not thereb' retarded. Under the charter &art'
contract under *hich she *as o&erating, the Condagua *as earning about P
;??Ida', *hich *as considered reasonable com&ensation for her use,
including the ser)ices of officers and cre*. 2he ser)ice rendered did not
in)ol)e an' further e7&enditure of labor on the &art of the sal)ors, no unusual
dis&la' of s:ill and energ' and the condition of the sea *as not such as to
in)ol)e an' s&ecial ris: either to Condagua or her cre*. <inall', the danger
from *hich the 3e*ard *as rescued *as real since the shi& *as confronted
b' a serious &eril. In determining the amount of the a*ard, the aim should
be to hold out to seafaring men a fair inducement to the &erformance of
sal)age ser)ice *ithout fi7ing a scale of com&ensation so high as to cause
)essels in need of such ser)ices to hesitate and decline to recei)e them
because of the ruinous cost. 2hat the sal)or is entitled, as of bount', to
something more than mere renumeration for his o*n *or: and the ris:
incurred b' him is concededG but the interests of commerce should also be
considered. 2o*age is not considered a sal)age ser)ice of high order of merit
and *here the ris: is inconsiderable and other conditions fa)orable, the
com&ensation to be allo*ed should be modest in its amount.
In this case, the sum of P 1,??? is ade+uate for the ser)ice
rendered.
Barrios )s Go 2hong " 3CRA 1;1
<= Plaintiff Barrios *as the ca&tain of @. Cenr' I, a )essel of %illiam
Fines, Inc. At about !=?? &.m. of @a' 1, 11!, &laintiff as ca&tain recei)ed an
3>3 or distress signal b' blin:ers from the @. Alfredo, o*ned b' the
defendant Carlos Go 2hong M Co. Ans*ering the 3>3 call, the &laintiff as
ca&tain of @. Cenr', *hich *as then sailing from Eumaguete Cit', altered the
course of said )essel, and headed to*ards the @. Eon Alfredo, *hich &laintiff
found to be in trouble, due to engine failure and the loss of her &ro&eller, for
*hich reason, it *as drifting slo*l' south*ard from 4egros Island to*ards
Borneo in the o&en China 3ea, at the merc' of a moderate easterl' *ind. At
about !=-1 &.m. on the same da', @a' 1, 11!, the @. Cenr', under the
command of the &laintiff, succeeded in getting near the @. Eon Alfredo 66 in
fact as near as about " meters from the latter shi& 66 and *ith the consent and
:no*ledge of the ca&tain andIor master of the @. Eon Alfredo, the &laintiff
caused the latter )essel to be tied to, or *ell6secured and connected *ith t*o
lines from the @. Cenr'G and the latter had the @. Eon Alfredo in to* and
&roceeded to*ards the direction of Eumaguete Cit', as e)idenced b' a *ritten
certificate to this effect e7ecuted b' the @aster, the Chief Dngineer, the Chief
>fficers, and the 3econd Dngineer of the @. Eon Alfredo, *ho *ere then on
board the latter shi& at the time of the occurrence. %hen both )essels *ere
a&&roaching the )icinit' of 4egros >riental, the @. Fu7, a sister shi& of @.
Eon Alfredo, *as sighted heading to*ards the t*o )essels. At the re+uest and
instance of the ca&tain of @. Eon Alfredo, the &laintiff caused the to* lines to
be released, thereb' also releasing the @. Eon Alfredo.
Issue= %>4 the ser)ice rendered b' &laintiff constituted sal)age or to*age,
and if so, %>4 &laintiff ma' reco)er from defendant com&ensation for such
ser)ice.
Celd =#1$ According to 3ec. 1 of the 3al)age Fa*, those *ho assist in sa)ing a
)essel or its cargo from shi&*rec:, shall be entitled to a re*ard #sal)age$.
53al)age5 has been defined as the com&ensation allo*ed to &ersons b'
*hose assistance a shi& or her cargo has been sa)ed, in *hole or in &art,
form im&ending &eril on the sea, or in reco)ering such &ro&ert' from actual
loss, as in case of shi&*rec:, derelict or reca&ture. 2here *as no marine &eril
in this case. Although defendantHs )essel *as in a hel&less condition due to
engine failure, it did not drift too far from the &lace *here it *as. As found b'
the FC, the *eather *as fair, clear and good. 2he *a)es *ere small and too
slight, so much so, that there *ere onl' ri&&les on the sea, *hich *as +uite
smooth. Euring the to*ing of the )essel on the same night, there *as
moonlight. Although said )essel *as drifting to*ards the o&en sea, there *as
no danger of its foundering or being stranded, as it *as far from an' island or
roc:s. In case of danger of stranding, its anchor could be released, to &re)ent
such occurrence. 2here *as no danger that defendantHs )essel *ould sin:, in
)ie* of the smoothness of the sea and the fairness of the *eather. 2hat there
*as absence of danger is sho*n b' the fact that said )essel or its cre* did
not e)en find it necessar' to lo*er its launch and t*o motor boats, in order to
e)acuate its &assengers no *ere the cargo in danger of &erishing. All that the
)esselHs cre* members could no do *as to mo)e the )essel on its o*n &o*er.
2hat did not ma:e the )essel a +uasi6derelict, considering that e)en before the
&laintiff6a&&ellant e7tended the hel& to the distressed shi&, a sister )essel *as
:no*n to be on its *a' to succor it.
#-$ But &laintiffHs ser)ice can be considered as a +uasi6 contract of
to*age. In consenting to &laintiffHs offer to to* the )essel, the defendant
through its ca&tain, thereb' im&liedl' entered into a Buridical relation of to*age
*ith the o*ner of the @. Cenr'. If the contract thus created is one for
to*age, then onl' the o*ner of the to*ing )essel , to the e7clusion of the cre*
of the said )essel, ma' be entitled to renumeration. And as the )essel6o*ner,
%illiam Fines, had e7&ressl' *ai)ed its claim for com&ensation for the to*age
ser)ice rendered to defendant, it is clear that &laintiff, *hose right if at all
de&ends u&on and not se&arate from the interest, is not entitled to &a'ment for
such to*age ser)ices. 4either ma' the &laintiff ca&tain in)o:e e+uit' in
su&&ort of his claim for com&ensation against defendant. 2here being an
e7&ress &ro)ision of la* #Art. -10-, 4CC$ a&&licable to the relationshi&
created in this case, that is, that of a +uasi6contract of to*age *here the cre*
is not entitled to com&ensation se&arate from that of the )essel, there is no
occasion to resort to e+uitable considerations.
D. 3PDCIAF C>42RAC23 >< @ARI2I@D C>@@DRCD
1. /harter Parties
a. EefinitionG as common carrier
A charter &art' is a contract b' )irtue of *hich the o*ner or agent
of a )essel binds himself to trans&ort merchandise or &ersons for a fi7ed
&rice. It is a contract b' *hich the o*ner or agent of the )essel leases for a
certain &rice the *hole or a &ortion of the )essel for the trans&ortation of
goods or &ersons from one &ort to another.
2o*age is not a charter &art'G instead it is a contract for the hire
of ser)ices b' )irtue of *hich a )essel is engaged to to* another )essel
from one &ort to another for a consideration
Planters Products )s CA G.R. 1?11?; #3e&t. 11, 1;$
<= Planters &urchased urea fertiliAer from @itsubishi,4e* Kor:. 2he
fertiliAer *as shi&&ed on @. 3un Plum, *hich is o*ned b' LLLL, from
Alas:a to 3an <ernando, Fa Union. A time charter &art' *as entered into
bet*een @itsubishi as shi&&erIcharterer and LLLL as shi&o*ner. U&on
arri)al in the &ort, PPI unloaded the cargo. It too: PPI 11 da's to unload the
cargo. PPI hired a marine and cargo sur)e'or to determine if there *as an'
shortage. A shortage and contamination of the fertiliAer *as disco)ered.
PPI sent a claim letter to 33A, the resident agent of LLLL for the amount of
the loss. An action for damages *as filed. 33A contended that the
&ro)isions on CC do not a&&l' to them because the' ha)e become &ri)ate
carriers b' reason of the charter6&art'. 2he 2C a*arded damages. 2he CA
re)ersed.
Issue = Eoes a charter &art' bet*een a shi&o*ner and a charterer transform
a CC into a &ri)ate one as to negate the ci)il la* &resum&tion of negligence
in case of loss or damage to its cargo( 4>.
Celd = A charter6&art' is a contract b' *hich an entire shi&, or some
&rinci&al &art thereof, is let b' the o*ner to another &erson for a s&ecified
time or use. 2here are - :inds = #1$ contract of affreightment *hich in)ol)es
the use of shi&&ing s&ace or )essels leased b' the o*ner in &art or as a
*hole, to carr' goods for othersG and #-$ charter b' demise or bareboat
charter *here the *hole )essel is let to the charterer *ith a transfer to him
of its entire command and &ossession and conse+uent control o)er its
na)igation, including the master and the cre*, *ho are his ser)ants.
It is not dis&uted that the carrier o&erates as a CC in the ordinar'
course of business. %hen PPI chartered the )essel, the shi& ca&tain, its
officers and cre* *ere under the em&lo' of the shi&o*ner and therefore
PAGE 64
TRANSPORTATION AND MARITIME LAW
continued to be under its direct su&er)ision and control. 2hus it continued
to be a &ublic carrier.
It is therefore im&erati)e that a &ublic carrier shall remain as such,
not*ithstanding the charter of the *hole or &ortion of a )essel, &ro)ided the
charter is limited to the shi& onl', as in the case of a time6charter or a
)o'age6charter. It is onl' *hen the charter includes both the )essel and the
cre*, as in a bareboat or demise that a CC becomes &ri)ate, insofar as
such &articular )o'age is concerned.
Issue = %>4 the carrier is liable for damages. 4>.
Celd = 2he &resum&tion of negligence on the &art of res&ondent carrier has
been o)ercome b' the sho*ing of e7traordinar' Aeal and assiduit'
e7ercised b' the carrier in the care of the cargo. >n the other hand, no &roof
*as adduced b' the &etitioner sho*ing that the carrier *as remiss in the
e7ercise of due diligence in order to minimiAe the loss or damage to the
goods it carried.
b. Linds
/%asses of charter #arty9
#1$ as to e7tent of )essel hired
#a$ total
#b$ &artial 6 the charterer does not as a rule ac+uire
the right to fi7 the date *hen the )essel should de&art, unless such right is
e7&ressl' granted in the contract
#-$ as to time
#a$ until a fi7ed da' or for a determined number of
da's or month
#b$ for a )o'age
#;$ as to freightage
#a$ for a fi7ed amount for the *hole cargo
#b$ for a fi7ed rate &er ton
#c$ for so much &er month
@aritime Agencies )s CA 1!" 3CRA ;0/
<= 2ranscontinental <ertiliAer Co. of Fondon chartered from
Cong:ong Island 3hi&&ing Co. the motor )essel Cong:ong Island for the
shi&ment of bagged urea from >dessa, U33R to the Phili&&ines. 2he
&arties signed a Uniform General Charter dated August 1". 2he
consignee *as Atlas <ertiliAer Co. *hile the insurer *as the Union
Insurance 3ociet' of Canton. @aritime Agencies *as a&&ointed as the
chartererHs agent and @acondra' as the o*nerHs agent. 2he )essel arri)ed
in @anila to unload &art of its cargo and then &roceeded to Cebu to
discharge the rest of the cargo. 2he consignee filed a formal claim for
shortlanded bags. 2he consignee also filed a claim against .i)a Customs
Bro:erage for the unreco)ered s&illage. 2hese claims ha)ing been reBected,
the consignee *ent to Union, *hich &aid the total indemnit' of P 11;,1-;.!/
&ursuant to the insurance contract. As subrogee of the consignee, Union
filed a claim for reimbursement against Cong:ong Island Co., @aritime
Agencies andIor .i)a Customs Bro:erage. .i)a *as dro&&ed from the
com&laint *hile @acondra' Co. *as im&leaded.
2he R2C found Cong:ong Island liable for the shortlanded bags
*hile @aritime Agencies *as held liable for the s&illage during discharge.
2he R2C ordered Cong:ong Island and its local agent @acondra' to &a' P
!",???T and @aritime Agencies to &a' P ;/,???T to Union Insurance. CA
e7em&ted Cong:ong Island and @acondra' e7em&t from liabilit'. 2hus this
&etition. @aritime &leads non6liabilit' on the ground that it *as onl' the
chartererHs agent and should not ans*er for *hate)er res&onsibilit' might
ha)e attached to the &rinci&al. Union as:ed that @aritime should be made
solidaril' liable since its &rinci&al had not been im&leaded.
Celd = 2here are ; general categories of charters=
1. Eemise or bareboat charter 6 in)ol)es the transfer of full
&ossession and control of the )essel for the &eriod co)ered b' the contract,
the charterer obtaining the right to use the )essel and carr' *hate)er cargo
it chooses, *hile manning and su&&l'ing the shi& as *ell
-. 2ime Charter 6 contract to use a )essel for a &articular &eriod
of time, the charterer obtaining the right to direct the mo)ements of the
)essel during the chartering &eriod, although the o*ner retains &ossession
and control
;. .o'age Charter 6 contract for the hire of a )essel for one or a
series of )o'ages usuall' for the &ur&ose of trans&orting goods for the
chartererG the )o'age charter is a contract of affreightment and is
considered a &ri)ate carriage
6 being a &ri)ate carriage, the &arties ma' freel' contract
res&ecting liabilit' for damages to the goods and other mattersG
res&onsibilit' for the cargo loss falls on the one *ho agreed to &erform the
dut' in)ol)ed in accordance *ith the terms of the )o'age charter
2his case in)ol)es a )o'age charter.In the &resent case, the
charterer *as res&onsible for loading, sto*age and discharging at the &orts
)isited, *hile the o*ner *as res&onsible for the care of the cargo. Par. - of
the Uniform General Charter &ro)ided that the o*ner shall be res&onsible for
loss or damage or dela' in the deli)er' of goods caused b' im&ro&er or
negligent sto*age of the goods or b' &ersonal *ant of due diligence in
ma:ing the )essel sea*orth' and &ro&erl' manned. Co*e)er, the o*ner
shall not be liable for an' other cause, e)en from the neglect of the ca&tain
or the cre* or an' other &erson em&lo'ed b' the o*ner on board, or for an'
unsea*orthiness of the )essel on loading or commencement of the )o'age.
In cases at bar, the 2C found that there *ere shortlanded bags,
*hich could onl' mean that the' *ere damaged or lost on board the )essel
before unloading of the shi&ment. 2he entire cargo *as co)ered b' a clean
BIF. As the bags *ere in good order *hen recei)ed b' the )essel, the
&resum&tion is that the' *ere damaged or lost during the )o'age as a result
of their negligent im&ro&er storage. 2he shi&o*ner should be held liable.
2he filing of the claim must be *ithin one 'ear, in accordance
*ith the C>G3A. >ther*ise, the carrier and the shi& shall be discharged
from liabilit'. 2he one 'ear &eriod should commence from >ct. -?, 1", the
date *hen the last item *as deli)ered to the consignee. Union filed the
com&laint against Cong:ong *ithin the one 'ear &eriod but tardil' against
@acondra'. 2he action has &rescribed *ith res&ect @acondra' but not
against the &rinci&al, Cong:ong Island.
As regards the goods damaged or lost during unloading, the
charterer is liable thereof, ha)ing assumed this acti)it' under the charter
&art' free of e7&ense to the )essel. 2he difficult' is that 2ranscontinental
has not been im&leaded and so is be'ond the courtHs Burisdiction. 2he
liabilit' im&osed on it cannot be borne b' @aritime *hich is a mere agent
and is not ans*erable for the inBur' caused b' its &rinci&al #unless the
&rinci&al is undisclosed$.
In this case, the charterer did not re&resent itself as a carrier and
indeed assumed res&onsibilit' onl' for the unloading of the cargo. @aritime
acted in re&resentation of the charterer and not of the )essel. As a mere
chartererHs agent, it cannot be held solidaril' liable *ith 2ranscontinental for
the lossesIdamages to the cargo outside the custod' of the )essel.
2ranscontinental *as disclosed as the chartererHs &rinci&al and @aritime
onl' acted *ithin the sco&e of its authorit'.
2he 2CHs findings *ere u&held e7ce&t for some modifications.
2he liabilit' of @acondra' can no longer be enforced because of
&rescri&tion. @aritima cannot be held liable for the &rinci&alHs acts.
c. <orms and Dffects
Art. *BD. A charter #arty !st $e 'ra)n in '!#%icate an'
si&ne' $y the contractin& #arties, an' )hen either 'oes not 2no) ho)
or is not a$%e to 'o so, $y t)o )itnesses at his re0!est.
The charter #arty sha%% inc%!'e, $esi'es the con'ition
sti#!%ate', the fo%%o)in& circ!stances9
1. The 2in', nae, an' tonna&e of the -esse%.
D. Eer f%a& an' #ort or re&istry.
;. The nae, s!rnae, an' 'oici%e of the ca#tain.
?. The nae, s!rnae, an' 'oici%e of the a&ent, if the
%atter sho!%' a2e the charter #arty.
B. The nae, s!rnae, an' 'oici%e of the charterer, an' if
he states that he is actin& $y coission, that of the #erson for )hose
acco!nt he a2es the contract.
*. The #ort of %oa'in& an' !n%oa'in&.
1. The ca#acity, n!$er of tons or )ei&ht, or eas!re
)hich they res#ecti-e%y $in' these%-es to %oa' an' trans#ort, or
)hether it is the tota% car&o.
3. The frei&hta&e to $e #ai', statin& )hether it is to $e a
fi(e' ao!nt for the -oya&e or so !ch #er onth, or for the s#ace to
$e occ!#ie', or for the )ei&ht or eas!re of the &oo's of )hich the
car&o consists, or in any other anner )hatsoe-er a&ree' !#on.
5. The ao!nt of #ria&e to $e #ai' the ca#tain.
1+. The 'ays a&ree' !#on for %oa'in& an' !n%oa'in&.
11. The %ay 'ays an' e(tra %ay 'ays to $e a%%o)e' an'
the rate of 'e!rra&e.
Art. *B;. If the frei&ht sho!%' $e recei-e' )itho!t the charter
#arty ha-in& $een si&ne', the contract sha%% $e !n'erstoo' as
e(ec!te' in accor'ance )ith )hat a##ears in the $i%% of %a'in&, )hich
sha%% $e the on%y instr!ent )ith re&ar' to the frei&ht to 'eterine the
ri&hts an' o$%i&ations of the shi# a&ent, of the ca#tain, an' of the
charterer.
PAGE 65
TRANSPORTATION AND MARITIME LAW
If the cargo is recei)ed *ithout a charter &art', the BIF shall be considered
the contract of the &arties
Q= If there is no charter &art' and BIF, *ould there be a )alid contract(
A= 2a:ing Art. /1; literall', the ans*er is no. Co*e)er, if *e ta:e into
account the fact that deli)er' of the cargo does not constitute the ma:ing of
a contract but rather the &artial &erformance thereof, the mere fact of
deli)er' and recei&t of such cargo, the G< and mutual consent *ith *hich
the' ha)e been made, should be a better substitute for the charter &art'
than is the BIF *hich is nothing more than the &roof of such deli)er'.
Pria&e.66 <ormerl', a small allo*ance or com&ensation &a'able to the
master and marines of a shi&G to the former for the use of his cables and
ro&es to discharge the goods of the merchantG to the latter for lading and
unlading in an' &ort of ha)en
Primage, at &resent, it is no longer a gratuit' to the master,
unless es&eciall' sti&ulatedG but it belongs to o*ners or freighters and is
nothing but an increase of the freight rate.
De!rra&e.66 3um *hich is fi7ed b' the contract of carriage, or *hich is
allo*ed, as remuneration to the o*ner of a shi& for the detention of his
)essel be'ond the number of da's allo*ed b' the charter &art' for loading
and unloading or for sailingG it is an e7tended freight or re*ard to the )essel
in com&ensation for the earnings she is im&ro&erl' caused to lose
Lay 'ays.66 Ea's allo*ed to charter &arties for loading and unloading the
cargo
Art. *B?. The charter #arties e(ec!te' )ith the inter-ention
of a $ro2er, )ho certifies to the a!thenticity of the si&nat!res of the
contractin& #arties a'e in his #resence, sha%% $e f!%% e-i'ence in
co!rt@ an', if they sho!%' $e conf%ictin&, that )hich a&rees )ith the
one )hich the $ro2er !st 2ee# in his re&istry, if 2e#t in accor'ance
)ith %a), sha%% &o-ern.
The contracts sha%% a%so $e a'itte' as e-i'ence, e-en
tho!&h a $ro2er has not ta2en #art therein, if the contractin& #arties
ac2no)%e'&e the si&nat!res of the sae as their o)n.
Sho!%' no $ro2er ha-e ta2en #art in the charter #arty an'
the si&nat!res $e not ac2no)%e'&e', 'o!$ts sha%% $e 'eci'e' $y )hat
is #ro-i'e' for in the $i%% of %a'in&, an', in the a$sence thereof, $y the
#roofs s!$itte' $y the #arties.
Art. *BB. /harter #arties e(ec!te' $y the ca#tain in the
a$sence of the shi# a&ent sha%% $e -a%i' an' effecti-e, e-en tho!&h in
e(ec!tin& the he sho!%' ha-e acte' in -io%ation of the or'ers an'
instr!ctions of the a&ent or shi#o)ner@ $!t the %atter sha%% ha-e a ri&ht
of action a&ainst the ca#tain to reco-er 'aa&es.
Art. *B*. If in the charter #arty the tie in )hich the %oa'in&
an' !n%oa'in& are to ta2e #%ace is not state', the !sa&es of the #ort
)here these acts ta2e #%ace sha%% $e o$ser-e'. After the sti#!%ate' or
c!stoary #erio' has #asse', an' sho!%' there not $e in the frei&ht
contract an e(#ress #ro-ision fi(in& the in'enification for the 'e%ay,
the ca#tain sha%% $e entit%e' to 'ean' 'e!rra&e for the %ay 'ays an'
e(tra %ay 'ays )hich ay ha-e e%a#se' in %oa'in& an' !n%oa'in&.
Art. *B1. If '!rin& the -oya&e the -esse% sho!%' $e ren'ere'
!nsea)orthy the ca#tain sha%% $e o$%i&e' to charter at his e(#ense
another one in &oo' con'ition, to carry the car&o to its 'estination, for
)hich #!r#ose he sha%% $e o$%i&e' to %oo2 for a -esse% not on%y at the
#ort of arri-a% $!t a%so in the nei&h$orin& #orts )ithin a 'istance of
1B+ 2i%oeters.
If the ca#tain, thro!&h in'o%ence or a%ice, sho!%' not
f!rnish a -esse% to ta2e the car&o to its 'estination, the shi##ers, after
re0!estin& the ca#tain to charter a -esse% )ithin an !ne(ten'i$%e
#erio', ay charter one an' a##%y to the .!'icia% a!thority for the
s!ary a##ro-a% of the charter #arty )hich they ay ha-e a'e.
The sae a!thority sha%% .!'icia%%y co#e% the ca#tain to
carry o!t for his acco!nt an' !n'er his res#onsi$i%ity the charter a'e
$y the shi##ers.
If the ca#tain, not)ithstan'in& his 'i%i&ence, sho!%' not fin'
a -esse% to charter, he sha%% 'e#osit the car&o at the 'is#osa% of the
shi##ers, to )ho he sha%% co!nicate the facts on the first
o##ort!nity, the frei&ht $ein& a'.!ste' in s!ch cases $y the 'istance
co-ere' $y the -esse%, )ith no ri&ht to any in'enification )hatsoe-er.
Articles /1 to //0 = 3ome of the goods being trans&orted ma' = #1$ be sold
b' the ca&tain to &a' for necessar' re&airsG #-$ be Bettisoned for the
common safet'G #;$ be lost b' reason of shi&*rec: or strandingG #0$ be
seiAed b' &irates or enemiesG #1$ suffer deteriorations or dimunitionsG or #/$
increase b' natural cause in *eight or siAe
JJ Goods that shall not &a' freightage=
#1$ Art. //? 6 goods Bettisoned for the common safet' but the amount of
freightage that should ha)e been &aid shall be considered as a general
a)erage and shall be com&uted in &ro&ortion to the distance co)ered *hen
the' *ere Bettisoned
#-$ Art. //1 6 merchandise lost b' reason of shi&*rec: or strandingG if freight
had been &aid in ad)ance, it shall be returned
#;$ Art. //1 6 goods seiAed b' &irates or enemiesG freight &aid in ad)ance
shall be returned
JJ Goods re+uired to &a' freightage=
#1$ Art. /1 6 goods sold b' the ca&tain to &a' for the necessar' re&airs to
the hull, machiner' or e+ui&ment or for una)oidable and urgent needs 66R
but the freight ma' not be re+uired to be &aid in full
#-$ Art. //; 6 goods *hich suffer deterioration or dimunition on account of #a$
inherent defects or bad +ualit' of &ac:ing, or of #b$ fortuitous e)ent
#;$ Art. /00 6 goods that increase in siAe or *eight b' natural cause
d. Rights and >bligations of 3hi&o*ners
Art. **5. The shi#o)ner of the ca#tain sha%% o$ser-e in
charter #arties the ca#acity of the -esse% or that e(#ress%y 'esi&nate'
in its re&istry, a 'ifference &reater than D #er cent $et)een that
re&istere' an' her tr!e ca#acity not $ein& #erissi$%e.
If the shi#o)ner or the ca#tain sho!%' contract to carry a
&reater ao!nt of car&o than the -esse% can carry, in -ie) of her
tonna&e, they sha%% in'enify the shi##ers )hose contracts they 'o
not f!%fi%% for the %osses they ay ha-e ca!se' the $y reason of their
'efa!%t, accor'in& to the cases, -i"9
If the -esse% has $een chartere' $y one shi##er on%y, an'
there sho!%' a##ear to $e an error or fra!' in her ca#acity, an' the
charterer sho!%' not )ish to rescin' the contract, )hen he has a ri&ht
to 'o so, the frei&hta&e sha%% $e re'!ce' in #ro#ortion to the car&o the
-esse% cannot recei-e, the #erson fro )ho the -esse% is chartere'
$ein& f!rtherore o$%i&e' to in'enify the charterer for the %osses he
ay ha-e ca!se' hi.
If, on the contrary, there sho!%' $e se-era% charter #arties,
an' $y reason of the )ant of s#ace a%% the car&o contracte' for cannot
$e recei-e', an' none of the charterers 'esires to rescin' the contract,
#reference sha%% $e &i-en to the #erson )ho has a%rea'y %oa'e' an'
arran&e' the car&o in the -esse%, an' the rest sha%% ta2e the #%ace
corres#on'in& to the in the or'er of the 'ates of their contracts.
Sho!%' there $e no #riority, the charterers ay %oa', if they
)ish, in #ro#ortion to the )ei&ht or s#ace they ay ha-e en&a&e', an'
the #erson fro )ho the -esse% )as chartere' sha%% $e o$%i&e' to
in'enify the for %osses an' 'aa&es.
Art. *1+. If the #erson fro )ho the -esse% is chartere',
after recei-in& a #art of the car&o, sho!%' not fin' s!fficient to a2e
!# at %east three fifths of the ao!nt the -esse% can ho%', at the #rice
he ay ha-e fi(e', he ay s!$stit!te for that trans#ortation another
-esse% ins#ecte' an' 'ec%are' s!ita$%e for the sae -oya&e, the
e(#enses of transfer, an' the increase in the #rice of the charter,
sho!%' there $e any, $ein& for his acco!nt. Sho!%' he not $e a$%e to
a2e this chan&e, the -oya&e sha%% $e !n'erta2en at the tie a&ree'
!#on@ an' sho!%' no tie ha-e $een fi(e', )ithin fifteen 'ays fro the
tie the %oa'in& $e&an, sho!%' nothin& to the contrary ha-e $een
sti#!%ate'.
If the o)ner of the #art of the car&o a%rea'y %oa'e' sho!%'
#roc!re soe ore at the sae #rice an' !n'er sii%ar or #ro#or6
tionate con'itions to those acce#te' for the frei&ht recei-e', the
#erson fro )ho the -esse% is chartere' or the ca#tain ay not
ref!se to acce#t the rest of the car&o@ an' sho!%' he 'o so, the
charterer sha%% ha-e a ri&ht to 'ean' that the -esse% #!t to sea )ith
the car&o she ay ha-e on $oar'.
Art. *11. After three6fifths of the -esse% is %oa'e', the #erson
fro )ho she is chartere' ay not, )itho!t the consent of the
charterers or shi##ers, s!$stit!te the -esse% 'esi&nate' in the charter
#arty )ith another one, !n'er the #ena%ty of a2in& hise%f there$y
PAGE 66
TRANSPORTATION AND MARITIME LAW
%ia$%e for a%% the %osses an' 'aa&es occ!rrin& '!rin& the -oya&e to
the car&o of those )ho 'i' not consent to the chan&e.
Art. *1D. If the -esse% has $een chartere' in )ho%e, the
ca#tain ay not, )itho!t the consent of the #erson charterin& her,
acce#t car&o fro any other #erson@ an' sho!%' he 'o so, sai'
charterer ay o$%i&e hi to !n%oa' it an' to in'enify hi for the
%osses s!ffere' there$y.
Art. *1;. The #erson fro )ho the -esse% is chartere'
sha%% $e %ia$%e for a%% the %osses ca!se' the charterer $y reason of the
-o%!ntary 'e%ay of the ca#tain in #!ttin& to sea, accor'in& to the r!%es
#rescri$e', #ro-i'e' he has $een re0!este' to #!t to sea at the #ro#er
tie thro!&h a notary or .!'icia%%y.
Art. *1?. If the charterer sho!%' carry to the -esse% ore
car&o than that contracte' for, the e(cess ay $e a'itte' in
accor'ance )ith the #rice sti#!%ate' in the contract if it can $e )e%%
sto)e' )itho!t inc!rrin& the other shi##ers, $!t if in or'er to sto)
sai' car&o it sho!%' $e necessary to sto) it in s!ch anner as to
thro) the -esse% o!t of tri the ca#tain !st ref!se it or !n%oa' it at
the e(#ense of its o)ner.
The ca#tain ay %i2e)ise, $efore %ea-in& the #ort, !n%oa' the
erchan'ise c%an'estine%y #%ace' on $oar', or trans#ort it, it he can
'o so an' 2ee# the -esse% in tri, 'ean'in& $y )ay of frei&hta&e the
hi&hest #rice )hich ay ha-e $een sti#!%ate' for sai' -oya&e.
Art. *1B. If the -esse% has $een chartere' to recei-e the
car&o in another #ort, the ca#tain sha%% a##ear $efore the consi&nee
'esi&nate' in the charter #arty, an' sho!%' the %atter not 'e%i-er the
car&o to hi, he sha%% infor the charterer an' a)ait his instr!ctions,
the %ay 'ays a&ree' !#on, or those a%%o)e' $y c!sto in the #ort,
$e&innin& to r!n in the eantie, !n%ess there is an e(#ress
a&reeent to the contrary.
Sho!%' the ca#tain not recei-e an ans)er )ithin the tie
necessary therefore, he sha%% a2e efforts to fin' car&o@ an' sho!%' he
not fin' any after the %ay 'ays an' e(tra %ay 'ays ha-e e%a#se', he
sha%% a2e a #rotest an' ret!rn to the #ort )here the charter )as
a'e.
The charterer sha%% #ay the frei&hta&e in f!%%, 'isco!ntin&
that )hich ay ha-e $een earne' on the erchan'ise )hich ay ha-e
$een carrie' on the -oya&e o!t or on the ret!rn tri#, if carrie' for the
acco!nt of thir' #ersons.
The sae sha%% $e 'one if a -esse%, ha-in& $een chartere'
for the ro!n' tri#, sho!%' not $e &i-en any car&o for her ret!rn.
Art. *1*. The ca#tain sha%% %ose the frei&hta&e an' sha%%
in'enify the charterers if the %atter sho!%' #ro-e, e-en a&ainst the
certificate of ins#ection, if one has $een a'e at the #ort of 'e#art!re,
that the -esse% )as not in a con'ition to na-i&ate at the tie of
recei-in& the car&o.
Art. *11. The charter #arty sha%% s!$sist if the ca#tain sho!%'
not ha-e any instr!ctions fro the charterer, an' a 'ec%aration of )ar
or a $%oc2a'e sho!%' ta2e #%ace '!rin& the -oya&e.
In s!ch case the ca#tain !st #rocee' to the nearest safe
an' ne!tra% #ort, re0!estin& an' a)aitin& or'ers fro the shi##er@ an'
the e(#enses an' sa%aries accr!in& '!rin& the 'etention sha%% $e #ai'
as &enera% a-era&e.
If, $y or'ers of the shi##er, the car&o sho!%' $e 'ischar&e'
at the #ort of arri-a%, the frei&hta&e for the -oya&e o!t sha%% $e #ai' in
f!%%.
Art. *13. If the tie necessary, in the o#inion of the .!'&e or
co!rt, to recei-e or'ers fro the shi##ers sho!%' ha-e e%a#se' )itho!t
the ca#tain ha-in& recei-e' any instr!ctions, the car&o sha%% $e
'e#osite', an' it sha%% $e %ia$%e for the #ayent of the frei&hta&e an'
e(#enses inc!rre' $y reason of the 'e%ay, )hich sha%% $e #ai' fro the
#rocee's of the #art first so%'.
O$%i&ations of shi#o)ner9
1. Art. // 6 to obser)e in the charter &arties, the ca&acit' of the )essel, and
to indemnif' the shi&&ers *hose contracts are not fulfilled for the losses
the' ma' ha)e suffered b' the failure of the shi&o*ner to obser)e the
ca&acit' of the )essel
-. Art. /"? 6 to underta:e a )o'age at the time agreed u&on or *ithin 11
da's from loading if no time is sti&ulated, e)en if the shi&o*ner should not
find cargo sufficient to ma:e u& at least ;I1 of the amount *hich the )essel
ma' hold, *here he fails to e7ercise his right to change )essel
;. Art. /"? 6 *here the shi&o*ner should not find cargo sufficient to ma:e u&
at least ;I1 of the amount *hich the )essel ma' hold, to acce&t other cargo
&rocured b' the o*ner of the freight alread' loaded under the same &rice
and conditions
0. Art. /"16 not to change the )essel after ;I1 of the )essel has been
loaded, *ithout the consent of the charterers or shi&&ers
1. Art. /"- 6 if the )essel has been chartered in *hole, not to acce&t cargo
from an' other &erson *ithout the consent of the charterer
/. Art. /"; 6 to ans*er for losses arising from dela' in &utting to sea
". Art. /"/ 6 to ha)e the )essel in a condition to na)igate at the time of
recei)ing the cargo
!. Art. /"" 6 in case of declaration of *ar or bloc:ade during the )o'age,
*here the ca&tain has not recei)ed an' instructions from the charterer, for
the ca&tain to &roceed to the nearest safe and neutral &ort, re+uesting and
a*aiting orders from the shi&&ers
Ri&hts of Shi#o)ner9
1. Art. /"? 6 *here the cargo is not sufficient to ma:e u& at least ;I1 of the
amount *hich the )essel ma' hold, he ma' substitute anohter )essel
ins&ected and declared suitable for the )o'age 66R e7&enses of transfer and
increase in &rice of the charter shall be &aid b' him
-. Art. /"0 6 to collect the freight in accordance *ith the &rice sti&ulated for
cargo in e7cess of that agreed u&on is such e7cess can be &ro&erl' sto*ed
;. Art. /"0 6 to refuse and unload at the e7&ense of the o*ner e7cess cargo
that cannot be &ro&erl' sto*ed
0. Art. /"0 6 to unload merchandise clandestinel' &laced on board, or to
trans&ort them if he can do so, demanding the highest freightage
1. Art. /"16 to find freight to ta:e &lace of freight not recei)ed, if the )essel
has been chartered to recei)e cargo in another &ort, after he recei)es no
cargo from the consignee and after he recei)es no ans*er from the
charterer
/. Art. /"1 6 to recei)e freight in full, discounting that *hich ma' ha)e been
earned on the merchandise carried as substitute
". Art. /"" 6 to ha)e the charter &art' subsist not*ithstanding the declaration
of *ar or a bloc:ade during the )o'age, and to recei)e in such cases, the
freightage in full *here the shi&&er orders that the cargo should be
discharged at the &ort of arri)al
e. >bligations of charterers
Art. *15. The charterer of an entire -esse% ay s!$charter
the )ho%e or #art thereof for the ao!nts he ay consi'er ost
con-enient, the ca#tain not $ein& a%%o)e' to ref!se to recei-e on $oar'
the car&o 'e%i-ere' $y the secon' charterers, #ro-i'e' the con'itions
of the first charter are not chan&e', an' that the #rice a&ree' !#on is
#ai' in f!%%, e-en tho!&h the f!%% car&o is not %oa'e', )ith the %iitation
esta$%ishe' in the ne(t artic%e.
Art. *3+. A charterer )ho 'oes not co#%ete the f!%% car&o
he $o!n' hise%f to shi# sha%% #ay the frei&hta&e of the ao!nt he
fai%s to %oa', if the ca#tain 'oes not ta2e other frei&ht to co#%ete the
%oa' of the -esse%, in )hich case he sha%% #ay the first charterer the
'ifference sho!%' there $e any.
Art. *31. If the charterer sho!%' shi# &oo's 'ifferent fro
those in'icate' at the tie of e(ec!tin& the charter #arty, )itho!t the
2no)%e'&e of the #erson fro )ho the -esse% )as chartere' or of the
ca#tain, an' sho!%' there$y &i-e rise to %osses, $y reason of
confiscation, e$ar&o, 'etention, or other ca!ses, to the #erson fro
)ho the -esse% )as chartere' or to the shi##ers, the #erson &i-in&
rise thereto sha%% $e %ia$%e )ith the -a%!e of his shi#ent an'
f!rtherore )ith his #ro#erty, for the f!%% in'enity to a%% those in.!re'
thro!&h his fa!%t.
Art. *3D. If the erchan'ise sho!%' ha-e $een shi##e' for
the #!r#ose of i%%icit coerce, an' )as ta2en on $oar' )ith the
2no)%e'&e of the #erson fro )ho the -esse% )as chartere' or of the
ca#tain, the %atter, .oint%y )ith the o)ner of the erchan'ise, sha%% $e
PAGE 67
TRANSPORTATION AND MARITIME LAW
%ia$%e for a%% the %osses )hich ay $e ca!se' to other shi##ers, an'
e-en tho!&h it ay ha-e $een a&ree', they cannot 'ean' any
in'enity )hatsoe-er fro the charterer for the 'aa&e ca!se' the
-esse%.
Art. *3;. In case of a2in& a #ort to re#air the h!%%,
achinery, or e0!i#ent of the -esse%, the shi##ers !st )ait !nti% the
-esse% is re#aire', $ein& #eritte' to !n%oa' her at their o)n e(#ense
sho!%' they 'ee it a'-isa$%e. If, for the $enefit of car&o
)hich r!ns the ris2 of 'eterioration, the shi##ers or the co!rt, or the
cons!%, or the co#etent a!thority in a forei&n %an' sho!%' or'er the
erchan'ise to $e !n%oa'e', the e(#enses of !n%oa'in& an' re%oa'in&
sha%% $e for the acco!nt of the forer.
Art. *3?. If the charterer, )itho!t the occ!rrence of any
of the cases of force a.e!re entione' in the fore&oin& artic%e,
sho!%' )ish to !n%oa' his erchan'ise $efore arri-in& at the #ort of
'estination, he sha%% #ay the f!%% frei&hta&e, the e(#enses of the arri-a%
a'e at his re0!est, an' the %osses an' 'aa&es ca!se' the other
shi##ers, sho!%' there $e any.
Art. *3B. In charters for trans#ortation of &enera% frei&ht any
of the shi##ers ay !n%oa' the erchan'ise $efore the $e&innin& of
the -oya&e, #ayin& one ha%f the frei&hta&e, the e(#ense of sto)in& an'
restorin& the car&o, an' any other 'aa&e )hich ay $e ca!se' the
other shi##ers.
Art. *3*. After the -esse% has $een !n%oa'e' an' the car&o
#%ace' at the 'is#osa% of the consi&nee, the %atter !st ie'iate%y
#ay the ca#tain the frei&hta&e '!e an' the other e(#enses for )hich
the car&o ay $e %ia$%e.
The #ria&e !st $e #ai' in the sae #ro#ortion an' at the
sae tie as the frei&hta&e, a%% the chan&es an' o'ifications to
)hich the %atter sho!%' $e s!$.ect a%so &o-ernin& the forer.
Art. *31. The charterers an' shi##ers ay not a$an'on
erchan'ise 'aa&e' on acco!nt of its o)n inherent 'efect or of
fort!ito!s e-ent for the #ayent of the frei&hta&e an' other e(#enses.
The a$an'onent sha%% $e #ro#er, ho)e-er, if the car&o
sho!%' consist of %i0!i's )hich ay ha-e %ea2e' o!t, there reainin&
in the containers not ore than one6fo!rth of their contents.
O$%i&ations of the charterer9
1. Art. /!? 6 to &a' the freight in full e)en if the charterer does not com&lete
the full cargo he bound himself to shi&
-. Art. /!16 to ans*er *ith the )alue of his shi&ment and other &ro&ert' for
the losses suffered b' the shi&o*ner, ca&tain or other shi&&ers arising from
confiscation, embargo, detention, or other causes, *here the charterer loads
goods different from those stated at the time of the e7ecution of the charter
&art'
;. Art. /!- 6 to be Bointl' liable *ith the ca&tain for losses *hich ma' be
caused to the other shi&&ers *here the charterer shi&s goods for illicit
commerce *ith the :no*ledge of the shi&o*ner or ca&tain
0. Art. /!- 6 in case of ma:ing a &ort to re&air the hull, machiner' or
e+ui&ment of the )essel, to *ait until the )essel is re&aired or to &a' for the
e7&enses of unloading should the charterer choose to unload
1. Art. /!0 6 *here the charterer unloads goods before arri)ing at &ort of
destination *ithout an' force maBeure occurring, to &a' #1$ e7&enses of
arri)al, #-$ full freight and #;$ for the damages and losses caused to other
shi&&ers, if an'
/. Art. /!1 6 *here the charterer unloads before the beginning of the )o'age,
#1$ to &a' 1I- of the freight, #-$ to &a' for the e7&enses of sto*ing and
resto*ing the cargo, #;$ to &a' an' other damage *hich he ma' ha)e
caused other shi&&ers
". Art. /!/ 6 to &a' for freight, other e7&enses and the &rimage after the
)essel has been unloaded and the cargo &laced at the dis&osal of the
consignee
!. Art. /!" 6 not to abandon merchandise damaged on account of
inherent defect or fortuitous e)ent, for the &a'ment of the freight and other
e7&enses
f. Rescission
Art. *33. A charter #arty ay $e ann!%%e' at the re0!est of
the charterer9
1. If $efore %oa'in& the -esse% he sho!%' a$an'on the
charter, #ayin& ha%f the frei&hta&e a&ree' !#on.
D. If the ca#acity of the -esse% sho!%' not a&ree )ith that
state' in the certificate of tonna&e, or if there $e an error in the
stateent of the f%a& !n'er )hich she sai%s.
;. If the -esse% sho!%' not $e #%ace' at the 'is#osa% of the
charterer )ithin the #erio' an' in the anner a&ree' !#on.
?. If, after the -esse% has #!t to sea, she sho!%' ret!rn to the
#ort of 'e#art!re, on acco!nt of ris2 fro #irates, eneies, or $a'
)eather, an' the shi##ers sho!%' a&ree to !n%oa' her.
In the secon' an' thir' cases the #erson fro )ho the
-esse% )as chartere' sha%% in'enify the charterer for the %osses he
ay s!ffer.
In the fo!rth case the #erson fro )ho the -esse% )as
chartere' sha%% ha-e a ri&ht to the frei&hta&e in f!%% for the -oya&e o!t.
If the charter sho!%' ha-e $een a'e $y the onth, the
charterers sha%% #ay the f!%% frei&hta&e for one onth, if the -oya&e is
for a #ort in the sae )aters@ an' t)o onths, if for a #ort in 'ifferent
)aters.
<Hro one #ort to another of the Penins!%a <Phi%i##ines= an'
a'.acent is%an's, the frei&hta&e for one onth on%y sha%% $e #ai'.=
B. If a -esse% sho!%' a2e a #ort '!rin& the -oya&e in or'er
to a2e !r&ent re#airs an' the charterers sho!%' #refer to 'is#ose of
the erchan'ise.
When the 'e%ay 'oes not e(cee' thirty 'ays, the shi##ers
sha%% #ay the f!%% frei&hta&e for the -oya&e o!t.
Sho!%' the 'e%ay e(cee' thirty 'ays, they sha%% #ay the
frei&ht in #ro#ortion to the 'istance co-ere' $y the -esse%.
Art. *35. At the re0!est of the #erson fro )ho the -esse%
is chartere' the charter #arty ay $e rescin'e'9
1. If the charterer at the terination of the e(tra %ay 'ays
'oes not #%ace the car&o a%on&si'e the -esse%.
In s!ch case the charterer !st #ay ha%f of the frei&hta&e
sti#!%ate' $esi'es the 'e!rra&e '!e for the %ay 'ays an' e(tra %ay
'ays.
D. If the #erson fro )ho the -esse% )as chartere' sho!%'
se%% it $efore the charterer has $e&!n to %oa' it an' the #!rchaser
sho!%' %oa' it for his o)n acco!nt.
In s!ch case the -en'or sha%% in'enify the charterer for the
%osses he ay s!ffer.
If the ne) o)ner of the -esse% sho!%' not %oa' it for his o)n
acco!nt the charter #arty sha%% $e res#ecte', an' the -en'or sha%%
in'enify the #!rchaser if the forer 'i' not infor hi of the charter
#en'in& at the tie of a2in& the sa%e.
Art. *5+. The charter #arty sha%% $e rescin'e' an' a%% action
arisin& therefro sha%% $e e(tin&!ishe' if, $efore the -esse% #!ts to sea
fro the #ort of 'e#art!re, any of the fo%%o)in& cases sho!%' occ!r9
1. A 'ec%aration of )ar or inter'iction of coerce )ith the
#o)er to )hose #orts the -esse% )as to a2e its -oya&e.
D. A con'ition of $%oc2a&e of the #ort of 'estination of sai'
-esse%, or the $rea2in& o!t of an e#i'eic after the contract )as
e(ec!te'.
;. The #rohi$ition to recei-e at the sai' #ort the er6
chan'ise constit!tin& the car&o of the -esse%.
?. An in'efinite 'etention, $y reason of an e$ar&o of the
-esse% $y or'er of the &o-ernent, or for any other reason in'e6
#en'ent of the )i%% of the shi# a&ent.
B. The ina$i%ity of the -esse% to na-i&ate, )itho!t fa!%t of the
ca#tain or shi# a&ent.
The !n%oa'in& sha%% $e a'e for the acco!nt of the charter6
er.
Art. *51. If the -esse% cannot #!t to sea on acco!nt of the
c%osin& of the #ort of 'e#art!re, or any other te#orary ca!se, the
charter sha%% reain in force )itho!t ri&ht of either of the contractin&
#arties to c%ai 'aa&es.
The s!$sistence an' )a&es of the cre) sha%% $e consi'ere'
as &enera% a-era&e.
D!rin& the interr!#tion the charterer ay, at the #ro#er tier
an' for his o)n acco!nt, !n%oa' an' %oa' the erchan'ise, #ayin&
'e!rra&e if the re%oa'in& sho!%' contin!e after the ca!se for the
'etention has cease'.
PAGE 68
TRANSPORTATION AND MARITIME LAW
Art. *5D. A charter #arty sha%% $e #artia%%y rescin'e', !n%ess
there is an a&reeent to the contrary, an' the ca#tain sha%% on%y $e
entit%e' to the frei&hta&e for the -oya&e o!t, if, $y reason of a
'ec%aration of )ar, c%osin& of #orts, or inter'iction of coercia%
re%ations '!rin& the -oya&e, the -esse% sho!%' a2e the #ort
'esi&nate' for s!ch a case in the instr!ctions of the charterer.
-. Loans on Fottory an' Res#on'entia
a. Foan on Bottomr', defined
A contract in the nature of a mortgage, b' *hich the o*ner of the
shi& borro*s mone' for the use, e+ui&ment and re&air of the )essel and for
a definite term, and &ledges the shi& #or the :eel or bottom of the shi&$ as a
securit' for its re&a'ment, *ith maritime or e7traordinar' interest on account
of the maritime ris:s to be borne b' the lender, it being sti&ulated that if the
shi& be lost in the course of the s&ecific )o'age or during the limited time,
b' an' of the &erils enumerated in the contract, the lender shall also lose his
mone'.
b. Foan on Res&ondentia, defined
>ne made on the goods laden on board the shi&, and *hich are
to be sold or e7changed in the course of the )o'age, the borro*erHs
&ersonal res&onsibilit' being deemed the &rinci&al securit' for the
&erformance of the contract, *hich is therefore called res&ondentia. 2he
lender must be &aid his &rinci&al and interest, thought the shi& &erishes,
&ro)ided that the goods are sa)ed.
c. Character of Foan
Art. 115. A %oan in )hich, !n'er any con'ition )hate-er, the
re#ayent of the s! %oane' an' of the #rei! sti#!%ate' 'e#en's
!#on the safe arri-a% in #ort of the &oo's on )hich it is a'e, or of the
#rice they ay recei-e in case of acci'ent, sha%% $e consi'ere' a %oan
on $ottory or res#on'entia.
Rea%, !ni%atera%, a%eatory contract9
1. deli)er' of the amount loaned is necessar' for the &erfection
of the contract
-. although there are reci&rocal benefits, the contract &roduces
obligations onl' for one &art', the borro*er *ho must return the amount
borro*ed &lus &remium
;. lender reall' runs :no*n ris:s
Eistinguished from ordinar' loans=
Or'inary %oan %oan on $ottory
an' res#on'entia
1. first lender has &reference last lender has
&reference o)er
o)er subse+uent lenders &re)ious ones
-. must be &aid absolutel' loan is re+uired to be
&aid onl' u&on
at all e)ents, %>4 thing safe arri)al of the
thing gi)en as
gi)en as securit' is lost or securit' at &ort of
destination
destro'ed
;. subBect to Usur' Fa* no limit as to rate of
interest in
)ie* of
diff. classes and )arious
ris:s in a
maritime )o'age
Marine ins!rance -s Fottory an' Res#on'entia Loans9
2he borro*er is in effect indemnified for his loss, at least, to the e7tent of
the loan 66R in case of loss of the thing gi)en as securit', the borro*er is
under no obligation to &a' the loan
Marine ins!rance
$ottory:res#on'entia %oans
1. indemnit' is &aid after the indemnit' is &aid in
ad)ance b' *a' of loan
loss has occurred
-. *hen marine &eril occurs, *hen marine &eril
causes the loss of the
the obligation of the insurer )essel or cargo, the
obligation of the
becomes absolute borro*er to &a' is
e7tinguished
;. consensual contract real contract
66&erfected from the
J go)erned b' Insurance Act moment of deli)er' of
the thing loaned
When %oss 'oes not e(tin&!ish %oan9 #Art. ";1$
1. *here the loss is caused b' inherent defect of the thing
-. *here the loss is caused b' fault or malice of borro*er
;. *here loss is caused b' barratr' on the &art of the ca&tain
0. *here loss is caused b' damage to the )essel as a conse+uence of
its
engaging in contraband
1. *here loss arose from ha)ing loaded the merchandise on a )essel
different from that designated in the contract, e7ce&t if change is due to
force maBeure
d. <orms and Re+uisites
Art. 1D+. Loans on $ottory or res#on'entia ay $e e(ec!t6
e'9
1. Fy eans of a #!$%ic instr!ent.
D. Fy eans of a #o%icy si&ne' $y the contractin& #arties
an' the $ro2er ta2in& #art therein.
;. Fy eans of a #ri-ate instr!ent.
Cn'er )hiche-er of these fors the contract is e(ec!te', it
sha%% $e entere' in the certificate of the re&istry of the -esse% an' sha%%
$e recor'e' in the re&istry of -esse%s, )itho!t )hich re0!isites the
cre'its of this 2in' sha%% not ha-e, )ith re&ar' to other cre'its, the
#reference )hich, accor'in& to their nat!re, they sho!%' ha-e,
a%tho!&h the o$%i&ation sha%% $e -a%i' $et)een the contractin& #arties.
The contracts a'e '!rin& a -oya&e sha%% $e &o-erne' $y
the #ro-isions of Artic%es B3; an' *11, an' sha%% $e effecti-e )ith
re&ar' to thir' #ersons fro the 'ate of their e(ec!tion, if they sho!%'
$e recor'e' in the re&istry of -esse%s of the #ort of re&istry of the
-esse% $efore the %a#se of ei&ht 'ays fo%%o)in& its arri-a%. If sai' ei&ht
'ays sho!%' e%a#se )itho!t the recor' ha-in& $een a'e in the
re&istry of -esse%s, the contracts a'e '!rin& the -oya&e of a -esse%
sha%% #ro'!ce no effect )ith re&ar' to thir' #ersons, e(ce#t fro the
'ay an' 'ate of their inscri#tion.
In or'er that the #o%icy of the contracts e(ec!te' in accor6
'ance )ith No.D ay ha-e $in'in& force, they !st confor to the
re&istry of the $ro2er )ho too2 #art therein. With res#ect to those
e(ec!te' in accor'ance )ith No. ; the ac2no)%e'&ent of the
si&nat!re sha%% $e re0!ire'.
/ontracts )hich are not re'!ce' in )ritin& sha%% not &i-e
rise to .!'icia% action.
Effect of re&istration9
1. the loan shall ha)e, *ith regard to other credits, the &reference *hich,
according to its nature, it should ha)e #Art. 1!? 6 !th in the order of
&reference$
-. effecti)e against third &ersons from the time of e7ecutionIregistration
Art. 1D1. In a contract on $ottory or res#on'entia the
fo%%o)in& !st $e state'9
1. The 2in', nae, an' re&istry of the -esse%.
D. The nae, s!rnae, an' 'oici%e of the ca#tain.
;. The naes, s!rnaes, an' 'oici%es of the #erson
&i-in& an' the #erson recei-in& the %oan.
?. The ao!nt of the %oan an' the #rei! sti#!%ate'.
B. The tie for re#ayent.
*. The &oo's #%e'&e' to sec!re re#ayent.
1. The -oya&e '!rin& )hich the ris2 is r!n.
PAGE 69
TRANSPORTATION AND MARITIME LAW
Art. 1DD. The contracts ay $e a'e to or'er, in )hich case
they sha%% $e transfera$%e $y in'orseent, an' the in'orsee sha%%
ac0!ire a%% the ri&hts an' sha%% inc!r a%% the ris2s corres#on'in& to the
in'orser.
e. >n %hat Constituted
Art. 1D?. The %oans ay $e constit!te' .oint%y or se#arate%y9
1. On the h!%% of the -esse%.
D. On the ri&&in&.
;. On the e0!i#ent, #ro-isions, an' f!e%.
?. On the en&ine, if the -esse% is a steaer.
B. On the erchan'ise %oa'e'.
If the %oan is constit!te' on the h!%% of the -esse%, the
ri&&in&, e0!i#ent an' other &oo's, #ro-isions, f!e%, stea en&ines,
an' the frei&hta&e earne' '!rin& the -oya&e on )hich the %oan is
a'e, sha%% a%so $e consi'ere' as inc%!'e' in the %ia$i%ity for the %oan.
If the %oan is a'e on the car&o, a%% that )hich constit!tes
the sae sha%% $e s!$.ect to the re#ayent@ an' if on a #artic!%ar
o$.ect of the -esse% or of the car&o, on%y the o$.ect concrete%y an'
s#ecifica%%y entione' sha%% $e %ia$%e.
Art. 1DB. No %oans on $ottory ay $e a'e on the sa%aries
of the cre) or on the #rofits e(#ecte'.
f. Amount
Art. 1D;. Loans ay $e a'e in &oo's an' in erchan'ise,
fi(in& their -a%!e in or'er to 'eterine the #rinci#a% of the %oan.
Art. 1D*. If the %en'er sho!%' #ro-e that he %oane' an
ao!nt %ar&er than the -a%!e of the o$.ect %ia$%e for the $ottory %oan,
on acco!nt of fra!'!%ent eas!res e#%oye' $y the $orro)er, the %oan
sha%% $e -a%i' on%y for the ao!nt at )hich sai' o$.ect is a##raise' $y
e(#erts.
The s!r#%!s #rinci#a% sha%% $e ret!rne' )ith %e&a% interest for
the entire tie re0!ire' for re#ayent.
Art. 1D1. If the f!%% ao!nt of the %oan contracte' in or'er to
%oa' the -esse% sho!%' not $e !se' for the car&o, the $a%ance sha%% $e
ret!rne' $efore c%earin&.
The sae #roce'!re sha%% $e o$ser-e' )ith re&ar' to the
&oo's ta2en as %oan, if they )ere not %oa'e'.
2he e7cess shall be )alid onl' as an ordinar' loan
g. B' *hom
Art. 1D3. The %oan )hich the ca#tain ta2es at the #oint of
resi'ence of the o)ners of the -esse% sha%% on%y affect that #art thereof
)hich $e%on&s to the ca#tain, if the other o)ners or their a&ents
sho!%' not ha-e &i-en their e(#ress a!thori"ation therefor or sho!%'
not ha-e ta2en #art in the transaction.
If one or ore of the o)ners sho!%' $e re0!este' to f!rnish
the ao!nt necessary to re#air or #ro-ision the -esse%, an' they
sho!%' not 'o so )ithin t)enty6fo!r ho!rs, the interest )hich the
#arties in 'efa!%t ay ha-e in the -esse% sha%% $e %ia$%e for the %oan in
the #ro#er #ro#ortion.
O!tsi'e of the resi'ence of the o)ners, the ca#tain ay
contract %oans in accor'ance )ith the #ro-isions of Artic%es B3; an'
*11.
Art. *11. The ca#tain ay not contract %oans on res#on'en6
tia sec!re' $y the car&o, an' sho!%' he 'o so the contract sha%% $e
-oi'.
Neither ay he $orro) oney on $ottory for his o)n
transactions, e(ce#t on the #ortion of the -esse% he o)ns, #ro-i'e' no
oney has $een #re-io!s%y $orro)e' on the )ho%e -esse%, an'
#ro-i'e' there 'oes not e(ist any other 2in' of %ien or o$%i&ation
char&ea$%e a&ainst the -esse%. When he is #eritte' to 'o so, he !st
necessari%y state )hat interest he has in the -esse%.
In case of -io%ation of this artic%e the #rinci#a%, interest, an'
costs sha%% $e char&e' to the #ri-ate acco!nt of the ca#tain, an' the
shi# a&ent ay f!rtherore 'ischar&e hi.
Art. *11. In or'er to co#%y )ith the o$%i&ations entione'
in the fore&oin& artic%e, an' )hen he has no f!n's an' 'oes not
e(#ect to recei-e any fro the a&ent, the ca#tain sha%% #roc!re the
sae in the s!ccessi-e or'er state' $e%o)9
1. Fy re0!estin& sai' f!n's of the consi&nees of the -esse%
or the corres#on'ents of the shi# a&ent.
D. Fy a##%yin& to the consi&nees of the car&o or to the
#ersons intereste' therein. ;. Fy 'ra)in& on the shi# a&ent.
?. Fy $orro)in& the ao!nt re0!ire' $y eans of a
$ottory %oan.
B. Fy se%%in& a s!fficient ao!nt of the car&o to co-er the
ao!nt a$so%!te%y necessary to re#air the -esse% an' to e0!i# her to
#!rs!e the -oya&e.
In the t)o %ast cases he !st a##%y to the .!'icia% a!thority
of the #ort, if in the Phi%i##ines an' to the Hi%i#ino cons!%, if in a
forei&n co!ntry@ an' )here there sho!%' $e none, to the %oca%
a!thority, #rocee'in& in accor'ance )ith the #rescri#tions of Artic%e
B3;, an' )ith the #ro-isions of the %a) of ci-i% #roce'!re.
Art. B3;. If the shi# $ein& on a -oya&e the ca#tain sho!%'
fin' it necessary to contract one or ore of the o$%i&ations entione'
in Nos. 3 an' 5 of Artic%e B3+, he sha%% a##%y to the .!'&e or co!rt if he
is in Phi%i##ine territory, an' other)ise to the Hi%i#ino cons!%, sho!%'
there $e one, an' in his a$sence to the .!'&e or co!rt or to the #ro#er
%oca% a!thority, #resentin& the certificate of the re&istry of the -esse%
treate' of in Artic%e *1D, an' the instr!ents #ro-in& the o$%i&ation
contracte'.
The .!'&e or co!rt, the cons!% or the %oca% a!thority as the
case ay $e in -ie) of the res!%t of the #rocee'in&s instit!te', sha%%
a2e a te#orary eoran'! in the certificate of their res!%t, in
or'er that it ay $e recor'e' in the re&istry )hen the -esse% ret!rns to
the #ort of her re&istry, or so that it can $e a'itte' as a %e&a% an'
#referre' o$%i&ation in case of sa%e $efore the ret!rn, $y reason of the
sa%e of the -esse% $y -irt!e of a 'ec%aration of !nsea)orthiness.
The %ac2 of this fora%ity sha%% a2e the ca#tain #ersona%%y
%ia$%e to the cre'itors )ho ay $e #re.!'ice' thro!&h his fa!%t.
h. Dffects of Contract
Art. 115. A %oan in )hich, !n'er any con'ition )hate-er, the
re#ayent of the s! %oane' an' of the #rei! sti#!%ate' 'e#en's
!#on the safe arri-a% in #ort of the &oo's on )hich it is a'e, or of the
#rice they ay recei-e in case of acci'ent, sha%% $e consi'ere' a %oan
on $ottory or res#on'entia.
Art. 1D5. Sho!%' the &oo's on )hich oney is ta2en not $e
s!$.ecte' to ris2, the contract sha%% $e consi'ere' a si#%e %oan, )ith
the o$%i&ation on the #art of the $orro)er to ret!rn the #rinci#a% an'
interest at the %e&a% rate, if that a&ree' !#on sho!%' not $e %o)er.
Art. 1D*. If the %en'er sho!%' #ro-e that he %oane' an
ao!nt %ar&er than the -a%!e of the o$.ect %ia$%e for the $ottory %oan,
on acco!nt of fra!'!%ent eas!res e#%oye' $y the $orro)er, the %oan
sha%% $e -a%i' on%y for the ao!nt at )hich sai' o$.ect is a##raise' $y
e(#erts.
The s!r#%!s #rinci#a% sha%% $e ret!rne' )ith %e&a% interest for
the entire tie re0!ire' for re#ayent.
Art. 1D1. If the f!%% ao!nt of the %oan contracte' in or'er to
%oa' the -esse% sho!%' not $e !se' for the car&o, the $a%ance sha%% $e
ret!rne' $efore c%earin&.
The sae #roce'!re sha%% $e o$ser-e' )ith re&ar' to the
&oo's ta2en as %oan, if they )ere not %oa'e'.
Art. 1;+. Loans a'e '!rin& the -oya&e sha%% ha-e #refer6
ence o-er those a'e $efore the c%earin& of the -esse%, an' they sha%%
$e &ra'!ate' in the in-erse or'er of their 'ates.
The %oans for the %ast -oya&e sha%% ha-e #reference o-er
#rior ones.
Sho!%' se-era% %oans ha-e $een a'e at the sae #ort of
arri-a% !n'er stress an' for the sae #!r#ose, a%% of the sha%% $e #ai'
#ro rata.
PAGE 70
TRANSPORTATION AND MARITIME LAW
<. BIFF >< FAEI4G
BIF o&erates both as a recei&t and as a contractG it is a recei&t for the goods
shi&&ed and a contract to trans&ort and deli)er the same as sti&ulated
A sti&ulation that a CCHs liabilit' is limited to the )alue of the
goods a&&earing in the BIF, unless the o*ner declares a greater )alue, is
)alid and binding
Fi%% of La'in& -s /harter #arty
1. Charter &art' 6 entire or com&lete contract
BIF 6 &ri)ate recei&t *hich the ca&tain gi)es to accredit that such goods
belong to such &ersons
-. Charter &art' 6 consensual &art', *hich can be dissol)ed b' means of
indemnit' for losses and damages
BIF 6 real contractG e7ists onl' after deli)er' of the goods to be trans&orted
is made
1. Contents
Art. 1+*. The ca#tain an' the shi##er sha%% ha-e the
o$%i&ation of 'ra)in& !# the $i%% of %a'in&, in )hich sha%% $e state'9
1. The nae, re&istry, an' tonna&e of the -esse%.
D. The nae of the ca#tain an' his 'oici%e.
;. The #ort of %oa'in& an' that of !n%oa'in&.
?. The nae of the shi##er.
B. The nae of the consi&nee, if the $i%% of %a'in& is iss!e'
in the nae of a s#ecifie' #erson.
*. The 0!antity, 0!a%ity, n!$er of #ac2a&es, an' ar2s of
the erchan'ise.
1. The frei&hta&e an' the #ria&e sti#!%ate'.
The $i%% of %a'in& ay $e iss!e' to $earer, to or'er, or in the
nae of a s#ecifie' #erson, an' !st $e si&ne' )ithin t)enty6 fo!r
ho!rs after the car&o has $een recei-e' on $oar', the shi##er $ein&
entit%e' to 'ean' the !n%oa'in& at the e(#ense of the ca#tain sho!%'
the %atter not si&n it, an', in any case, the %osses an' 'aa&es
s!ffere' there$y.
Art.1+1. Ho!r tr!e co#ies of the ori&ina% $i%% of %a'in& sha%%
$e a'e, an' a%% of the sha%% $e si&ne' $y the ca#tain an' $y the
shi##er. Of these co#ies the shi##er sha%% 2ee# one an' sen' another
to the consi&nee@ the ca#tain sha%% ta2e t)o, one for hise%f an' the
other for the shi# a&ent.
There ay a%so $e 'ra)n as any co#ies of the $i%% of %a'in&
as ay $e consi'ere' necessary $y the #arties@ $!t, )hen they are
iss!e' to or'er or to $earer, there sha%% $e state' in a%% the co#ies, $e
they the first fo!r or the s!$se0!ent ones, the 'estination of each one,
statin& )hether it is for the shi# a&ent, for the ca#tain, for the shi##er,
or for the consi&nee. If the co#y sent to the %atter sho!%' ha-e a
'!#%icate, this circ!stance an' the fact that it is not -a%i' e(ce#t in
'efa!%t of the first one !st $e state' therein.
Art. 11;. If $efore the 'e%i-ery of the car&o a ne) $i%% of
%a'in& sho!%' $e 'ean'e' of the ca#tain, on the a%%e&ation that the
fai%!re to #resent the #re-io!s ones is on acco!nt of their %oss or for
any other .!st ca!se, he sha%% $e o$%i&e' to iss!e it, #ro-i'e' that
sec!rity for the -a%!e of the car&o is &i-en to his satisfaction@ $!t
)itho!t chan&in& the consi&nent an' statin& therein the
circ!stances #rescri$e' in the %ast #ara&ra#h of Artic%e 1+1, )hen
'ea%in& )ith the $i%%s of %a'in& referre' to therein, !n'er #ena%ty,
sho!%' he not 'o so, of $ein& %ia$%e for sai' car&o if i#ro#er%y
'e%i-ere' thro!&h his fa!%t.
Art. 11?. If $efore the -esse% #!ts to sea the ca#tain sho!%'
'ie or sho!%' cease to ho%' his #osition thro!&h any ca!se, the
shi##er sha%% ha-e the ri&ht to 'ean' of the ne) ca#tain the
ratification of the first $i%%s of %a'in&, an' the %atter !st 'o so,
#ro-i'e' that a%% the co#ies #re-io!s%y iss!e' $e #resente' or ret!rne'
to hi, an' it sho!%' a##ear fro an e(aination of the car&o that
they are correct.
The e(#enses arisin& fro the e(aination of the car&o
sha%% $e for the acco!nt of the shi# a&ent, )itho!t #re.!'ice to his ri&ht
of action a&ainst the first ca#tain, if he cease' to $e s!ch thro!&h his
o)n fa!%t. Sho!%' sai' e(aination not $e a'e, it sha%% $e
!n'erstoo' that the ne) ca#tain acce#ts the car&o as it a##ears fro
the $i%%s of %a'in&.
-. Probati)e .alue
Art. 1+5. A $i%% of %a'in& 'ra)n !# in accor'ance )ith the
#ro-isions of this tit%e sha%% $e #roof as $et)een those intereste' in the
car&o an' $et)een the %atter an' the ins!rers, e-i'ence to the contrary
$ein& reser-e' $y the %atter.
Art. 11+. If the $i%%s of %a'in& 'o not a&ree, an' no chan&e or
eras!re a##ears in any of the, those in the #ossession of the shi##er
or consi&nee si&ne' $y the ca#tain sha%% $e #roof a&ainst the %atter or
shi# a&ent in fa-or of the consi&nee or the shi##er@ an' those
#ossesse' $y the ca#tain or shi# a&ent si&ne' $y the shi##er sha%% $e
#roof a&ainst the shi##er or consi&nee in fa-or of the ca#tain or shi#
a&ent.
BIF 6 &roof of the agreement bet*een the &arties
Issuance of BIF is merel' &rima facie e)idence of the recei&t of
the merchandise b' the carrier or his agentG not conclusi)e e)idence
Eefecti)e and irregular BIF ma' be cured b' other
com&lementar' documents
G. PA33D4GDR3 >4 3DA .>KAGD
1. 4ature of Contract
Art. *5B. The ri&ht to #assa&e, if iss!e' to a s#ecifie'
#erson, ay not $e transferre' )itho!t the consent of the ca#tain or of
the consi&nee.
-. >bligations of Passengers
Art. *5;. If the #assa&e #rice has not $een a&ree' !#on, the
.!'&e or co!rt sha%% s!ari%y fi( it, after a stateent of e(#erts.
Art. *55. If the contract is rescin'e', $efore or after the
coenceent of the -oya&e, the ca#tain sha%% ha-e a ri&ht to c%ai
#ayent for )hat he ay ha-e f!rnishe' the #assen&ers.
Art. 1+?. In or'er to co%%ect the fare an' e(#enses of
s!stenance, the ca#tain ay retain the &oo's $e%on&in& to the
#assen&er, an' in case of their sa%e, he sha%% $e &i-en #reference o-er
other cre'itors, actin& in the sae )ay as in the co%%ection of
frei&hta&e.
Art. *5?. Sho!%' the #assen&er not arri-e on $oar' at the
tie fi(e', or sho!%' he %ea-e the -esse% )itho!t #erission fro the
ca#tain, )hen the %atter is rea'y to %ea-e the #ort, the ca#tain ay
contin!e the -oya&e an' 'ean' the f!%% #assa&e #rice.
Art. 1++. In a%% that #ertains to the #reser-ation of or'er an'
'isci#%ine on $oar' the -esse%, the #assen&ers sha%% $e s!$.ect to the
or'ers of the ca#tain, )itho!t any 'istinction )hatsoe-er.
;. Rights of Passengers
Art. *51. If $efore $e&innin& the -oya&e it sho!%' $e
s!s#en'e' thro!&h the so%e fa!%t of the ca#tain or shi# a&ent, the
#assen&ers sha%% $e entit%e' to ha-e their #assa&e ref!n'e' an' to
reco-er for %osses an' 'aa&es@ $!t if the s!s#ension )as '!e to an
acci'enta% ca!se, or to force a.e!re, or to any other ca!se $eyon'
the contro% of the ca#tain or shi# a&ent, the #assen&ers sha%% on%y $e
entit%e' to the ret!rn of the #assa&e oney.
Art. *53. In case a -oya&e a%rea'y $e&!n sho!%' $e
interr!#te', the #assen&ers sha%% $e o$%i&e' to #ay on%y the fare in
#ro#ortion to the 'istance co-ere', an' )itho!t ri&ht to reco-er for
%osses an' 'aa&es if the interr!#tion is '!e to a fort!ito!s e-ent or
to force a.e!re, $!t )ith a ri&ht to in'enify if the interr!#tion
PAGE 71
TRANSPORTATION AND MARITIME LAW
sho!%' ha-e $een ca!se' $y the ca#tain e(c%!si-e%y. If the interr!#tion
sho!%' $e $y reason of the 'isa$i%ity of the -esse%, an' the #assen&er
sho!%' a&ree to a)ait the re#airs, he ay not $e re0!ire' to #ay any
increase' #rice of #assa&e, $!t his %i-in& e(#enses '!rin& the 'e%ay
sha%% $e for his o)n acco!nt.
In case of 'e%ay in the 'e#art!re of the -esse%, the
#assen&ers ha-e a ri&ht to reain on $oar' an' to $e f!rnishe' foo'
for the acco!nt of the -esse%, !n%ess the 'e%ay is '!e to an acci'enta%
ca!se or to force a.e!re. If the 'e%ay sho!%' e(cee' 55ten 'ays, the
#assen&ers re0!estin& the sae sha%% $e entit%e' to the ret!rn of the
fare@ an' if it is '!e e(c%!si-e%y to the ca#tain or shi# a&ent they ay
f!rtherore 'ean' in'enity for %osses an' 'aa&es.
A -esse% e(c%!si-e%y 'estine' to the trans#ortation of #as6
sen&ers !st ta2e the 'irect%y to the #ort or #orts of 'estination, no
atter )hat the n!$er of #assen&ers ay $e, a2in& a%% the sto#s
in'icate' in its itinerary.
In the Phili&&ines, there is no la* *hich re+uires shi&o*ners to &ublish a
schedule of the arri)als and de&artures of their )essels in the different &orts
of call, and *hich holds them liable in damages to &assengers for an'
de)iation from said schedule
3*eet Fines )s CA 1-1 3CRA "/
<= Pri)ate res&ondents &urchased first6class tic:ets from &etitioner
in Cebu Cit'. 2he' *ere to board &etitionerHs )essel @I. 3*eet Grace,
bound for Catbalogan, %estern 3amar. Instead of de&arting at the
scheduled hour of about midnight, the )essel sailed at around ; A.@. onl' to
be to*ed bac: to Cebu due to engine trouble, arri)ing bac: at Cebu at about
0 P@. After re&airs, the )essel *as onl' able to lea)e around ! A.@. of the
ne7t da'.
Instead of doc:ing at Catbalogan, *hich *as the first &ort of call,
the )essel &roceeded directl' to 2acloban. Pri)ate res&ondents had no
recourse but to disembar: and board a ferr'boat to Catbalogan. Cence this
suit for damages for breach of contract of carriage. 2he 2C and CA decided
in fa)or of &laintiffs.
Issue= %>4 defendant is liable.
Celd= 2he go)erning &ro)isions are found in the Code of Commerce. Art.
/10 &ro)ides that a ca&tain *ho agreed to ma:e a )o'age and *ho fails to
fulfill his underta:ing, *ithout being &re)ented b' fortuitous e)ent or force
maBeure, shall indemnif' all the losses *hich his failure ma' cause, *ithout
&reBudice to criminal &enalties *hich ma' &ros&er. Art. /! also &ro)ides for
the ca&tainHs liabilit'.
2he crucial factor then is the e7istence of a fortuitous e)ent or
force maBeure. %ithout it, the right to damages and indemnit' e7ists against
a ca&tain *ho fails to fulfill his underta:ing or *here the interru&tion has
been caused b' the ca&tain e7clusi)el'.
As found b' both courts belo*, there *as no fortuitous e)ent or
force maBeure *hich &re)ented the )essel from fulfilling its underta:ing of
ta:ing &ri)ate res&ondents to Catbalogan. @echanical defects in the CC are
not considered caso fortuito that e7em&ts the CC from res&onsibilit'. D)en
granting that the engine failure *as a fortuitous e)ent, it accounted onl' for
the dela' in the de&arture. %hen the )essel left Cebu, there *as no longer
an' force maBeure that Bustified the b'6&assing a &ort of call. 2he )essel
*as com&letel' re&aired *hen it left Cebu for 3amar and Fe'te. In fact,
after doc:ing at 2acloban Cit', the )essel left for @anila to com&lete its
)o'age.
Petitioner cannot rel' on the conditions in small bold &rint at the
bac: of the tic:et reading= 52he &assengerHs acce&tance of this tic:et shall
be considered as an acce&tance of the ff. conditions=
;. In case the )essel cannot continue or com&lete the tri& for an'
cause *hatsoe)er, the carrier reser)es the right to bring the &assenger to
hisIher destination at the e7&ense of the carrier or to cancel the tic:ets and
refund the &assenger the )alue of hisIher tic:et.
11. 2he sailing schedule of the )essel 777 is subBect to change
*ithout &re)ious notice.5
D)en assuming that those conditions are a&&licable to case at
bar, &etitioner did not com&l' *ith the same. It did not cancel the tic:et nor
did it refund the )alue of the tic:ets to &ri)ate res&ondents. Besides, it *as
not the )esselsH sailing schedule that *as in)ol)ed. 2he com&laint is
directed not at the dela'ed de&arture the ne7t da' but at the b'6&assing of
Catbalogan, their destination. Cad &etitioner notified them &re)iousl' and
offered to bring them to their destination at its e7&ense or refunded the
)alue of the tic:ets &urchased, &erha&s this contro)ers' *ould not ha)e
arisen.
<urthermore, the conditions relied u&on b' &etitioner cannot
&re)ail o)er Arts. /10 and /! of the Code of Commerce.
2he )o'age to Catbalogan *as interru&ted b' the ca&tain u&on
instruction of management. 2he interru&tion *as not due to fortuitous e)ent
or force maBeure nor to disabilit' of the )essel. Ca)ing been caused b' the
ca&tain u&on instructions of management, the &assengersH right to indemnit'
is e)ident. 2he o*ner of a )essel and the shi& agent shall be ci)ill' liable
for the acts of the ca&tain under Art. 1!/ of the Code of Commerce.
2he &assengers are also entitled to moral damages on account
of the B< on the &art of the carrier. 2he' did not gi)e notice of the change
of schedule. Lno*ing full' *ell that it *ould ta:e 11 hours to re&air the
)essel, the' informed the &assengers that it *ould ta:e onl' a fe* hours.
2he' did not offer to refund the tic:ets of the &assengers nor &ro)ide them
trans&ortation from Bacolod Cit' to Catbalogan.
0. Res&onsibilities of Ca&tain
Art. 1+1. The con-enience or the interest of the #assen&ers
sha%% not o$%i&ate nor e#o)er the ca#tain to stan' in6shore or enter
#%aces )hich ay ta2e the -esse% o!t of her co!rse, nor to reain in
the #orts he !st or is !n'er the necessity of to!chin& for a #erio'
%on&er than that re0!ire' $y the nee's of na-i&ation.
Art. 1+D. In the a$sence of an a&reeent to the contrary, the
s!$sistence of the #assen&ers '!rin& the -oya&e sha%% $e 'eee'
inc%!'e' in the #rice of the #assa&e@ $!t sho!%' it $e for their acco!nt,
the ca#tain sha%% $e !n'er the o$%i&ation, in case of necessity, to
s!##%y the foo' necessary for their s!stenance at a reasona$%e #rice.
Art. 1+B. In case of the 'eath of a #assen&er '!rin& the
-oya&e the ca#tain sha%% $e a!thori"e', )ith res#ect to the $o'y, to
ta2e the ste#s re0!ire' $y the circ!stances, an' sha%% caref!%%y ta2e
care of the #a#ers an' &oo's of sai' #assen&er )hich ay $e on
$oar', co#%yin& )ith the #ro-isions of case No. 1+ of Artic%e *1D )ith
re&ar' to e$ers of the cre).
Art. *1D. The fo%%o)in& '!ties are inherent in the office of
ca#tain9
1. To ha-e on $oar' $efore startin& on a -oya&e a 'etai%e'
in-entory of the h!%%, en&ines, ri&&in&, tac2%e, stores, an' other
e0!i#ents of the -esse%@ the na-i&ation certificate@ the ro%% of the
#ersons )ho a2e !# the cre) of the -esse%, an' the contracts
entere' into )ith the cre)@ the %ist of #assen&ers@ the hea%th certificate@
the certificate of the re&istry #ro-in& the o)nershi# of the -esse%@ an'
a%% the o$%i&ations )hich enc!$er the sae !# to that 'ate@ the
charters or a!thenticate' co#ies thereof@ the in-oices or anifest of
the car&o, an' the instr!ent of the e(#ert -isit or ins#ection, sho!%'
it ha-e $een a'e at the #ort of 'e#art!re.
D. To ha-e a co#y of this /o'e on $oar'.
;. To ha-e three fo%ioe' an' sta#e' $oo2s, #%acin& at the
$e&innin& of each one a note of the n!$er of fo%ios it contains,
si&ne' $y the arine officia%, an' in his a$sence $y the co#etent
a!thority.
In the first $oo2, )hich sha%% $e ca%%e' >%o& $oo2,> he sha%%
enter e-ery 'ay the con'ition of the atos#here, the #re-ai%in& )in's,
the co!rse sai%e', the ri&&in& carrie', the horse#o)er of the en&ines,
the 'istance co-ere', the ane!-ers e(ec!te', an' other inci'ents of
na-i&ation. Ee sha%% a%so enter the 'aa&e s!ffere' $y the -esse% in
her h!%% en&ines, ri&&in&, an' tac2%e, no atter )hat is its ca!se, as
)e%% as the i#erfections an' a-era&es of the car&o, an' the effects
an' conse0!ence of the .ettison, sho!%' there $e any@ an' in cases of
&ra-e reso%!tions )hich re0!ire the a'-ice or a eetin& of the officers
of the -esse%, or e-en of the #assen&ers an' cre), he sha%% recor' the
'ecision a'o#te'. Hor the inforations in'icate' he sha%% a2e !se of
the $innac%e $oo2, an' of the stea or en&ine $oo2 2e#t $y the
en&ineer.
In the secon' $oo2, ca%%e' the >acco!ntin& $oo2>, he sha%%
enter a%% the ao!nts co%%ecte' an' #ai' for the acco!nt of the -esse%,
enterin& s#ecifica%%y artic%e $y artic%e, the so!rces of the co%%ection,
an' the ao!nts in-este' in #ro-isions, re#airs, ac0!isition of ri&&in&
or &oo's, f!e%, o!tfits, )a&es, an' a%% other e(#enses. Ee sha%%
f!rtherore enter therein a %ist of a%% the e$ers of the cre), statin&
their 'oici%es, their )a&es an' sa%aries, an' the ao!nts they ay
ha-e recei-e' on acco!nts, either 'irect%y or $y 'e%i-ery to their
fai%ies.
PAGE 72
TRANSPORTATION AND MARITIME LAW
In the thir' $oo2, ca%%e' >frei&ht $oo2,> he sha%% recor' the
entry an' e(it of a%% the &oo's, statin& their ar2s an' #ac2a&es,
naes of the shi##ers an' of the consi&nees, #orts of %oa'in& an'
!n%oa'in&, an' the frei&ht earne'. In the sae $oo2 he sha%% recor'
the naes an' #%aces of sai%in& of the #assen&ers an' the n!$er of
#ac2a&es of )hich their $a&&a&e consists, an' the #rice of the
#assa&e.
?. To a2e, $efore recei-in& the frei&ht, )ith the officers of
the cre), an' the t)o e(#erts, if re0!ire' $y the shi##ers an'
#assen&ers, an e(aination of the -esse%, in or'er to ascertain
)hether she is )aterti&ht, an' )hether the ri&&in& an' en&ines are in
&oo' con'ition@ an' if she has the e0!i#ent re0!ire' for &oo'
na-i&ation, #reser-in& a certificate of the eoran'! of this
ins#ection, si&ne' $y a%% the #ersons )ho ay ha-e ta2en #art therein,
!n'er their %ia$i%ity.
The e(#erts sha%% $e a##ointe' one $y the ca#tain of the
-esse% an' the other one $y the #ersons )ho re0!est the e(aination,
an' in case of 'isa&reeent a thir' sha%% $e a##ointe' $y the arine
a!thority of the #ort.
B. To reain constant%y on $oar' the -esse% )ith the cre)
'!rin& the tie the frei&ht is ta2en on $oar' an' caref!%%y )atch the
sto)a&e thereof@ not to consent to any erchan'ise or &oo's of a
'an&ero!s character to $e ta2en on, s!ch as inf%aa$%e or e(#%osi-e
s!$stances, )itho!t the #reca!tions )hich are recoen'e' for their
#ac2in&, ana&eent an' iso%ation@ not to #erit that any frei&ht $e
carrie' on 'ec2 )hich $y reason of its 'is#osition, -o%!e, or )ei&ht
a2es the )or2 of the sai%ors 'iffic!%t, an' )hich i&ht en'an&er the
safety of the -esse%@ an' if, on acco!nt of the nat!re of the
erchan'ise, the s#ecia% character of the shi#ent, an' #rinci#a%%y the
fa-ora$%e season it ta2es #%ace, he a%%o)s erchan'ise to $e carrie'
on 'ec2, he !st hear the o#inion of the officers of the -esse%, an'
ha-e the consent of the shi##ers an' of the a&ent.
*. To 'ean' a #i%ot at the e(#ense of the -esse% )hene-er
re0!ire' $y na-i&ation, an' #rinci#a%%y )hen a #ort, cana%, or ri-er, or a
roa'stea' or anchorin& #%ace is to $e entere' )ith )hich neither he,
the officers nor the cre) are ac0!ainte'.
1. To $e on 'ec2 at the tie of si&htin& %an' an' to ta2e
coan' on enterin& an' %ea-in& #orts, cana%s, roa'stea's, an'
ri-ers, !n%ess there is a #i%ot on $oar' 'ischar&in& his '!ties. Ee sha%%
not s#en' the ni&ht a)ay fro the -esse% e(ce#t for serio!s ca!ses or
$y reason of officia% $!siness. 3. To #resent hise%f, )hen
a2in& a #ort in 'istress, to the aritie a!thority if in the Phi%i##ines
an' to the Hi%i#ino cons!% if in a forei&n co!ntry, $efore t)enty6fo!r
ho!rs ha-e e%a#se', an' a2e a stateent of the nae, re&istry, an'
#ort of 'e#art!re of the -esse%, of its car&o, an' reason of arri-a%,
)hich 'ec%aration sha%% $e -ise' $y the a!thority of $y the cons!% if
after e(ainin& the sae it is fo!n' to $e acce#ta$%e, &i-in& the
ca#tain the #ro#er certificate in or'er to sho) his arri-a% !n'er stress
an' the reasons therefor. In the a$sence of arine officia%s or of the
cons!%, the 'ec%aration !st $e a'e $efore the %oca% a!thority.
5. To ta2e the ste#s necessary $efore the co#etent
a!thority in or'er to enter in the certificate of the -esse% in the re&istry
of the -esse%s, the o$%i&ations )hich he ay contract in accor'ance
)ith Artic%e B3;.
1+. To #!t in a safe #%ace an' 2ee# a%% the #a#ers an'
$e%on&in&s of any e$ers of the cre) )ho i&ht 'ie on the -esse%,
'ra)in& !# a 'etai%e' in-entory, in the #resence of #assen&ers as
)itnesses, an', in their a$sence, of e$ers of the cre).
11. To con'!ct hise%f accor'in& to the r!%es an' #rece#ts
containe' in the instr!ctions of the a&ent, $ein& %ia$%e for a%% that he
ay 'o in -io%ation thereof.
1D. To &i-e an acco!nt to the a&ent fro the #ort )here the
-esse% arri-es, of the reason therefor, ta2in& a'-anta&e of the
sea#hore, te%e&ra#h, ai%, etc., accor'in& to the cases@ notify hi the
frei&ht he ay ha-e recei-e', statin& the nae an' 'oi ci%e of the
shi##ers, frei&ht earne', an' ao!nts $orro)e' on $ottory $on',
a'-ise hi of his 'e#art!re, an' &i-e hi any inforation an' 'ate
)hich ay $e of interest.
1;. To o$ser-e the r!%es on the sit!ation of %i&hts an'
e-o%!tions to #re-ent co%%isions.
1?. To reain on $oar' in case of 'an&er to the -esse%, !nti%
a%% ho#e to sa-e her is %ost, an' $efore a$an'onin& her to hear the
officers of the cre), a$i'in& $y the 'ecision of the a.ority@ an' if he
sho!%' ha-e to ta2e a $oat he sha%% ta2e )ith hi, $efore anythin& e%se,
the $oo2s an' #a#ers, an' then the artic%es of ost -a%!e, $ein&
o$%i&e' to #ro-e in case of the %oss of the $oo2s an' #a#ers that he
'i' a%% he co!%' to sa-e the.
1B. In case of )rec2 he sha%% a2e the #ro#er #rotest in '!e
for at the first #ort reache', $efore the co#etent a!thority or
Hi%i#ino cons!%, )ithin t)enty6fo!r ho!rs, statin& therein a%% the
inci'ents of the )rec2, in accor'ance )ith case 3 of this artic%e.
1*. To co#%y )ith the o$%i&ations i#ose' $y the %a)s an'
r!%es of na-i&ation, c!stos, hea%th, an' others.
Art. 1+;. A #assen&er sha%% $e consi'ere' a shi##er of the
&oo's he carries on $oar', an' the ca#tain sha%% not $e res#onsi$%e for
)hat the forer ay 2ee# !n'er his ie'iate an' s#ecia% c!sto'y,
!n%ess the 'aa&e arises fro an act of the ca#tain or of the cre).
Art. 11B?. The #ro-isions of Arts. 11;; to 11B; sha%% a##%y to
the #assen&erGs $a&&a&e )hich is not in his #ersona% c!sto'y or in
that of his e#%oyee. As to the other $a&&a&e, the r!%es in Artic%es
1553 an' D+++ to D++; concernin& the res#onsi$i%ity of hote%62ee#ers
sha%% $e a##%ica$%e. <Ne) /i-i% /o'e.=
,. Carriage of Goods b' 3ea Act #Common*ealth Act. 4o. /1, Public Act
4o. 1-1, "0the U3 Congress$
Sec. 1. That the #ro-isions of P!$%ic Act No. BD1 of the 1?th /on&ress
of the Cnite' States, a##ro-e' on A#ri% 1*, 15;*, $e acce#te', as it is
here$y acce#te' to $e a'e a##%ica$%e to a%% contracts for the carria&e
of &oo's $y sea to an' fro Phi%i##ine #orts in forei&n tra'e9
Pro-i'e', that nothin& in this Act sha%% $e constr!e' as re#ea%in& any
e(istin& #ro-ision of the /o'e of /oerce )hich is not in force, or
as %iitin& its a##%ication.
4otes= In relation to Ci)il Code =
Art. 1"1; 6 go)erned b' la* of &lace of destination, if shi&&ed to a foreign
countr', go)erned b' la* of foreign countr'
Art. 1"// 6 goods from foreign countr' shi&&ed to the Phili&&ines, go)erned
b' the Ci)il Code
C>G3A 6 a&&licable to all trans&ortation of goods b' sea in foreign trade to
and from Phili&&ine &orts
6 does not a&&l' to &urel' domestic trans&ort
6 Fa*s a&&licable to a contract for the carriage of goods b' sea=
1. Eistinguish 6 common carrier #Ci)il Code$
6 &ri)ate carrier
-. %here is the )essel going(
a. Common carrier coming to the Phils. O *hat la* a&&lies(
1st= Ci)il Code
-nd= C>G3A #itHs more s&ecific than Code of Commerce$
6 in foreign trade
;rd= Code of Commerce
b. Pri)ate carrier coming to the Phils. in foreign trade
1st= C>G3A #because itHs more s&ecific$
-nd= Code of Commerce
;rd= Ci)il Code #&ro)isions not on common carriers e.g. torts, contracts$
c. <rom the Phils. to a foreign countr'= a&&l' la*s of such foreign countr'
#Art. 1"1;$
6 *ith res&ect to )essels destined for foreign &orts, the C>G3A doesnHt
a&&l' unless &arties ma:e it a&&licable.
Q= In *hat situations does C>G3A &rimaril' a&&l'(
A= %here the &arties e7&ressl' sti&ulate that C>G3A shall go)ern their
res&ecti)e rights and obligations.
Q= Can the C>G3A a&&l' in domestic shi&&ing(
A= Generall', 4>.
DXCDP2I>4= *hen &arties agree to ma:e it a&&l'.
Q= %hat a&&lication does C>G3A ha)e in carriage of &assengers(
A= 4one. A&&lies onl' to carriage of goods.
Sec. D. This Act sha%% ta2e effect !#on its a##ro-a%.
<A##ro-e' Octo$er DD, 15;*=.
TITLE I
Sec. 1. When !se' in this Act6
<a= The ter >carrier> inc%!'es the o)ner or the charterer
PAGE 73
TRANSPORTATION AND MARITIME LAW
)ho enters into a contract of carria&e )ith a shi##er.
<$= The ter >contract of carria&e> a##%ies on%y to
contracts of carria&e co-ere' $y a $i%% of %a'in& or any sii%ar
'oc!ent of tit%e, insofar as s!ch 'oc!ent re%ates to the carria&e of
&oo's $y sea, inc%!'in& any $i%% of %a'in& or any sii %ar 'oc!ent as
aforesai' iss!e' !n'er or #!rs!ant to a charter #arty fro the oent
at )hich s!ch $i%% of %a'in& or sii%ar 'oc!ent of tit%e re&!%ates the
re%ations $et)een a carrier an' a ho%'er of the sae.
<c= The ter >&oo's> inc%!'es &oo's, )ares, erchan'ise,
an' artic%es of e-er 2in' )hatsoe-er, e(ce#t %i-e ania%s an' car&o
)hich $y the contract of carria&e is state' as $ein& carrie' on 'ec2
an' is so carrie'.
<'= The ter >shi#> eans any -esse% !se' for the carria&e
of &oo's $y sea.
<e= The ter >carria&e of &oo's> co-ers the #erio' fro the
tie )hen the &oo's are %oa'e' to the tie )hen they are 'ischar&e'
fro the shi#
R I S I S
Sec. D. S!$.ect to the #ro-isions of Section *, !n'er e-ery
contract of carria&e of &oo's $y sea, the carrier in re%ation to the
%oa'in&, han'%in&, sto)a&e, carria&e, c!sto'y, care, an' 'ischar&e of
s!ch &oo's sha%% $e s!$.ect to the res#onsi$i%ities an' %ia$i%ities an'
entit%e' to the ri&hts an' i!nities hereinafter set forth.
RESPONSIFILITIES AND LIAFILITIES
Sec. ;. <1= The carrier sha%% $e $o!n' $efore an' at the
$e&innin& of the -oya&e to e(ercise '!e 'i%i&ence to6
<a= Ma2e the shi# sea)orthy@
<$= Pro#er%y an, e0!i#, an' s!##%y
the shi#@
<c= Ma2e the ho%'s, refri&eratin& an'
coo%in& cha$ers, an' a%% other #arts of the shi#
in )hich &oo's are carrie', fit an' safe for their
rece#tion, carria&e, an' #reser-ation
<D= The carrier sha%% #ro#er%y an' caref!%%y %oa', han'%e,
sto), carry, 2ee#, care for, an' 'ischar&e the &oo's carrie'.
<;= After recei-in& the &oo's into his char&e the carrier, or
the aster or a&ent of the carrier, sha%%, on 'ean' of the shi##er,
iss!e to the shi##er a $i%% of %a'in& sho)in& aon& other thin&s6
<a= The %oa'in& ar2s necessary for i'entification
of the &oo's as the sae are f!rnishe' in )ritin&
$y the shi##er $efore the %oa'in& of s!ch &oo's
starts, #ro-i'e' s!ch ar2s are sta#e' or
other)ise sho)n c%ear%y !#on the &oo's if
!nco-ere', in s!ch a anner as sho!%' or'inari%y
reain %e&i$%e !nti% the en' of the -oya&e.
<$= Either the n!$er of #ac2a&es or #ieces, or
the 0!antity or )ei&ht, as the case ay $e, as
f!rnishe' in )ritin& $y the shi##er.
<c= The a##arent or'er an' con'itions of the &oo's9 Pro-i'6
e', that no carrier, aster, or a&ent of the carrier, sha%% $e
$o!n' to state or sho) in the $i%% of %a'in& any ar2s, n!$er,
0!antity, or )ei&ht )hich he has reasona$%e &ro!n' for
s!s#ectin& not acc!rate%y to re#resent the &oo's act!a%%y
recei-e' or )hich he has ha' no reasona$%e eans of
chec2in&.
<?= S!ch a $i%% of %a'in& sha%% $e #ria facie e-i'ence of the
recei#t $y the carrier of the &oo's as therein 'escri$e' in accor'ance
)ith #ara&ra#hs <;= <a=, an' <c=, of this section9 <The rest of the #ro-ision
is not a##%ica$%e to the Phi%i##ines=.
<B= The shi##er sha%% $e 'eee' to ha-e &!arantee' to the
carrier the acc!racy at the tie of shi#ent of the ar2s, n!$er,
0!antity, an' )ei&ht, as f!rnishe' $y hi@ an' the shi##er sha%%
in'enify the carrier a&ainst a%% %oss, 'aa&es, an' e(#enses arisin& or
res!%tin& fro inacc!racies in s!ch #artic!%ars. The ri&ht of the carrier
to s!ch in'enity sha%% in no )ay %iit his res#onsi$i%ity an' %ia$i%ity
!n'er the contract of carria&e to any #erson other than the shi##er.
<*= Cn%ess notice of %oss or 'aa&e an' the &enera% nat!re of
s!ch %oss or 'aa&e $e &i-en in )ritin& to the carrier or his a&ent at the
#ort of 'ischar&e or at the tie of the reo-a% of the &oo's into the
c!sto'y of the #erson entit%e' to 'e%i-ery thereof !n'er the contract of
carria&e, s!ch reo-a% sha%% $e #ria facie e-i'ence of the 'e%i-ery $y
the carrier of the &oo's as 'escri$e' in the $i%% of %a'in&. If the %oss or
'aa&e is not a##arent, the notice !st $e &i-en )ithin three 'ays of
the 'e%i-ery.
Sai' notice of %oss or 'aa&e ay $e en'orse' !#on the
recei#t for the &oo's &i-en $y the #erson ta2in& 'e%i-ery thereof.
The notice in )ritin& nee' not $e &i-en if the state of the
&oo's has at the tie of their recei#t $een the s!$.ect of .oint s!r-ey or
ins#ection.
In any e-ent the carrier an' the shi# sha%% $e 'ischar&e' fro
a%% %ia$i%ity in res#ect of %oss or 'aa&e !n%ess s!it is $ro!&ht )ithin one
year after 'e%i-ery of the &oo's or the 'ate )hen the &oo's sho!%' ha-e
$een 'e%i-ere'9 Pro-i'e', that, if a notice of %oss or 'aa&e, either
a##arent or concea%e', is not &i-en as #ro-i'e' for in this section, that
fact sha%% not affect or #re.!'ice the ri&ht of the shi##er to $rin& s!it
)ithin one year after the 'e%i-er of the &oo's or the 'ate )hen the &oo's
sho!%' ha-e $een 'e%i-ere'.
In the case of any act!a% or a##rehen'e' %oss or 'aa&e, the
carrier an' the recei-er sha%% &i-e a%% reasona$%e faci%ities to each other
for ins#ectin& an' ta%%yin& the &oo's
<1= After the &oo's are %oa'e' the $i%% of %a'in& to $e iss!e' $y
the carrier, aster, or a&ent of the carrier to the shi##er sha%% if the
shi##er so 'ean's, $e a >shi##e'> $i%% of %a'in&9 Pro-i'e', that if the
shi##er sha%% ha-e #re-io!s%y ta2en !# any 'oc!ent of tit%e to s!ch
&oo's, he sha%% s!rren'er the sae as a&ainst the iss!e of the >shi##e'>
$i%% of %a'in&, $!t at the o#tion of the carrier s!ch 'oc!ent of tit%e ay
$e note' at the #ort of shi#ent $y the carrier, aster, or a&ent )ith the
nae or naes of the shi# or shi#s !#on )hich the &oo's ha-e $een
shi##e' an' the 'ate or 'ates of shi#ent, an' )hen so note' the sae
sha%% for the #!r#ose of this section $e 'eee' to constit!te a >shi##e'>
$i%% of %a'in&.
<3= Any c%a!se, co-enant, or a&reeent in a contract of
carria&e re%ie-in& the carrier of the shi# fro %ia$i%ity for %oss or 'aa&e
to or in connection )ith the &oo's, arisin& fro ne&%i&ence, fa!%t, or
fai%!re in the '!ties an' o$%i&ations #ro-i'e' in this section, or
%essenin& s!ch %ia$i%ity other)ise than as #ro-i'e' in this Act, sha%% $e
n!%% an' -oi' an' of no effect. A $enefit of ins!rance in fa-or of the
carrier, or sii%ar c%a!se, sha%% $e 'eee' to $e a c%a!se re%ie-in& the
carrier fro %ia$i%ity.
4otes= Prescri&ti)e &eriod under 3ection ;#/$. 6 the carrier and the agent
shall be discharged form liabilit' in res&ect of loss or damage unless suit is
brought *ithin 1 'ear from=
#1$ in case of damaged goods= from the time deli)er' of the goods
*as made
#-$ in case of non6deli)er' #i.e., lost goods$= from the date the
goods should ha)e been deli)ered
Cases of misdeli)er' or con)ersion not co)ered.
1 'ear6&rescri&ti)e &eriod in 3ec. ; #/$ a&&lies onl' *here there is %oss or
'aa&e.
Foss contem&lates onl' *here no deli)er' at all *as made b' the carrier of the
goods because the same had &erished, gone out of commerce, or
disa&&eared in such a *a' that their e7istence is un:no*n or the' cannot be
reco)ered
Cence, in case of misdeli)er' #deli)er' to *rong &erson$ or con)ersion of the
goods, the rules on &rescri&tion found in the Ci)il Code shall a&&l' #1? 'ears
for contractsG 0 'ears for tortious obligations$
3hi&&er, consignee or legal holder of BIF ma' in)o:e the &rescri&ti)e &eriod
and ha)e the right to file suit *ithin one 'ear after deli)er' of the goods or
failure to deli)er.
@ere &ro&osal for arbitration or fact that there ha)e been initial negotiations
does not sus&end the running of the &eriod for &rescri&tion
PAGE 74
TRANSPORTATION AND MARITIME LAW
4>2D= Prof. Quimbo does not agree *ith this 3C ruling. If there is a
misdeli)er' or con)ersion, there is a case of loss from the &oint of )ie* of the
consignee or shi&&er.
Q= Is the &rescri&ti)e &eriod under the C>G3A interru&ted from the time of
the ma:ing of e7tra6Budicial demand or filing of Budicial action as &ro)ided in
Art. 1111, 4CC(
A= 4o. 1 'ear &eriod is a s&ecial &rescri&ti)e &eriod, uniform *orld*ide
Rationale behind the ;6da' notice and relati)el' short &rescri&ti)e &eriod=
6 to &ro)ide carrier an o&&ortunit' to loo: for the lost goods
6 to disco)er *ho *as at fault
6 in case of transshi&ment, to determine, *hen and *here damage
occurred
3hi&&er, consignee or legal holder of bill ma' in)o:e &rescri&ti)e &eriod
although the &ro)iso in 3ec. ; #/$ gi)es the im&ression that it is the shi&&er
alone *ho can in)o:e the same.
But &rescri&ti)e &eriod does not a&&l' to the action b' an insurer as subrogee
of the consignee.
3ti&ulation in bill limiting carrierHs liabilit' contrar' to sec. ;#!$ is )oidG e.g.
&ro)ision in the bill e7ce&ting th o*ner form liabilit' for loss or damage of
cargo unless *ritten notice is thereof *as gi)en to the carrier *ithin ;? da'sG
such a &ro)ision is contrar' to a &ro)ision of the C>G3A since 3ec. ;
&ro)ides that e)en if a notice of loss or damage is not gi)en as re+uired, that
fact shall not &reBudice the right of the shi&&er to bring suit *ithin 1 'ear after
deli)er' of the goods.
4otice re+uirements=
C>G3A= 3ec. ;#/$
If loss or damage is a&&arent 6 &rotest as soon as recei&t of goods
If not a&&arent 6R *ithin ; da's of deli)er'
Code of Commerce= Art. ;//
a&&arent 6 &rotest at time of recei&t
non6a&&arent 6 *ithin -0 hours after recei&t
%AR3A%= Art. -/
in case of damage=
of baggage 6 *ithin ; da's from recei&t
of goods 6 *ithin " da's
in case of dela'= *ithin 10 da's from recei&t
failure to com&l' *ith the ;6da's notice re+uirement under C>G3A does not
affect the right of the shi&&er to bring action &ro)ided he brings the same
*ithin 1 'ear
2o be distinguished from the notice re+uirement in the %AR3A%
con)ention and Code of Commerce, *here the notice re+uirement is a
condition &recedent for the right of action against the shi&o*ner to accrue.
RI4ETS AND IMMCNITIES
Sec. ?. <1= Neither the carrier not the shi# sha%% $e %ia$%e for
%oss or 'aa&e arisin& or res!%tin& fro !nsea)orthiness !n%ess ca!se'
$y )ant of '!e 'i%i&ence on the #art of the carrier to a2e the shi#
sea)orthy an' to sec!re that the shi# is #ro#er%y anne', e0!i##e',
an' s!##%ie', an' to a2e the ho%'s, refri&eratin& an' coo%in&
cha$ers, an' a%% other #arts of the shi# in )hich &oo's are carrie' fit
an' safe for their rece#tion, carria&e, an' #reser-ation, in accor'ance
)ith the #ro-isions of #ara&ra#h <1= of Section <;=. Whene-er %oss or
'aa&e has res!%te' fro !nsea)orthiness, the $!r'en of #ro-in& the
e(ercise of '!e 'i%i&ence sha%% $e on the carrier or other #erson c%aiin&
e(e#tion !n'er this section.
<D= Neither the carrier not the shi# sha%% $e res#onsi$%e for
%oss or 'aa&e arisin& or res!%tin& fro6
<a= Act, ne&%ect, or 'efa!%t of the aster, ariner,
#i%ot, or the ser-ants of the carrier in the
na-i&ation or in the ana&eent of the shi#@
<$= Hire, !n%ess ca!se' $y the act!a% fa!%t or
#ri-ity of the carrier@
<c= Peri%s, 'an&ers, an' acci'ents of the sea or
other na-i&a$%e )ater@
<'= Act of 4o'@
<e= Act of )ar@
<f= Act of #!$%ic eneies@
<&= Arrest or restraint of #rinces, r!%ers, or
#eo#%e, or sei"!re !n'er %e&a% #rocess@
<h= J!arantine restrictions@
<i= Act or oission of the shi##er or o)ner of the
&oo's, his a&ent or re#resentati-e@@
<.= Stri2es or %oc2o!ts or sto##a&e or restraint of
%a$or fro )hate-er ca!se, )hether #artia% or
&enera%9 Pro-i'e', that nothin& herein containe'
sha%% $e constr!e' to re%i-e a carrier fro
res#onsi$i%ity for the carrierGs o)n acts9
<2= Riots an' ci-i% cootions@
<%= Sa-in& or atte#tin& to sa-e %ife or #ro#erty at
sea@
<= Wasta&e in $!%2 or )ei&ht or any other %oss
or 'aa&e arisin& fro inherent 'efect, 0!a%ity, or
-ice of the &oo's@
<n= Ins!fficiency of #ac2in&@
<o= Ins!fficiency or ina'e0!acy of ar2s@
<#= Latent 'efects not 'isco-era$%e $y '!e
'i%i&ence@ an'
<0= Any other ca!se arisin& )itho!t the act!a%
fa!%t an' #ri-ity of the carrier an' )itho!t the fa!%t
or ne&%ect of the a&ents or ser-ants of the carrier,
$!t the $!r'en of #roof sha%% $e on the #erson
c%aiin& the $enefit of this e(ce#tion to sho) that
neither the act!a% fa!%t or #ri-ity of the carrier not
the fa!%t or ne&%ect of the a&ents or ser-ants of the
carrier contri$!te' to the %oss or 'aa&e.
<;= The shi##er sha%% not $e res#onsi$%e for %oss or 'aa&e
s!staine' $y the carrier or the shi# arisin& or res!%tin& fro any ca!se
)itho!t the act, or ne&%ect of the shi##er, his a&ents, or his
<?= An 'e-iation in sa-in& or atte#tin& to sa-e %ife or
#ro#erty at sea, or any reasona$%e 'e-iation sha%% not $e 'eee' to $e
an infrin&eent or $reach of this Act or of the contract of carria&e, an'
carrier sha%% not $e %ia$%e for any %oss or 'aa&e res!%tin& therefro9
Pro-i'e', ho)e-er, that if the 'e-iation is for the #!r#ose of %oa'in& or
!n%oa'in& car&o or #assen&ers it sha%%, #ria facie, $e re&ar'e' as
!nreasona$%e.
<B= Neither the carrier nor the shi# sha%% in any e-ent $e or
$ecoe %ia$%e for any %oss or 'aa&e to or in connection )ith the
trans#ortation of &oo's in an ao!nt e(cee'in& NB++ #er #ac2a&e of
%a)f!% oney of the Cnite' States, or in case of &oo's not shi##e' in
#ac2a&es, #er c!stoary frei&ht !nit, or the e0!i-a%ent of that s! in
other c!rrency, !n%ess the nat!re an' -a%!e of s!ch &oo's ha-e $een
'ec%are' $y the shi##er $efore shi#ent an' inserte' in the $i%% of
%a'in&. This 'ec%aration, if e$o'ie' in the $i%% of %a'in&, sha%% $e #ria
facie e-i'ence, $!t sha%% not $e conc%!si-e on the carrier.
Fy a&reeent $et)een the carrier, aster or a&ent of the
carrier, an' the shi##er another a(i! ao!nt than that entione'
in this #ara&ra#h ay $e fi(e'9 Pro-i'e', that s!ch a(i! sha%% not
$e %ess than the fi&!re a$o-e nae'. In no e-ent sha%% the carrier $e
%ia$%e for ore than the ao!nt of 'aa&e act!a%%y s!staine'.
Neither the carrier nor the shi# sha%% $e res#onsi$%e in any
e-ent for %oss or 'aa&e to or in connection )ith the trans#ortation of
the &oo's if the nat!re or -a%!e thereof has $een 2no)in&%y an'
fra!'!%ent%y is6state' $y the shi##er in the $i%% of %a'in&.
<*= 4oo's of an inf%aa$%e, e(#%osi-e, or 'an&ero!s nat!re
to the shi#ent )hereof, the carrier, aster or a&ent of the carrier, has
not consente' )ith 2no)%e'&e of their nat!re an' character, ay at any
tie $efore 'ischar&e $e %an'e' at any #%ace or 'estroye' or ren'ere'
innoc!o!s $y the carrier )itho!t co#ensation, an' the shi##er of s!ch
&oo's sha%% $e %ia$%e for a%% 'aa&es an' e(#enses 'irect%y or in'irect%y
arisin& o!t of or res!%tin& fro s!ch shi#ent. If any s!ch &oo's
shi##e' )ith s!ch 2no)%e'&e an' consent sha%% $ecoe a 'an&er to the
shi# or car&o, they ay in %i2e anner $e %an'e' at any #%ace, or 'e6
stroye' or ren'ere' innoc!o!s $y the carrier )itho!t %ia$i%ity on the #art
of the carrier e(ce#t to &enera% a-era&e if any.
4otes= Amount reco)erable in case of loss= N1??I&ac:age, e)en if not
sti&ulated
PAGE 75
TRANSPORTATION AND MARITIME LAW
2he &laintiff cannot dis&ute said limitation on the ground that it *as not freel'
and fairl' agreed u&on or that it is against &ublic &olic', since the FA% I23DF<
PR>.IED3 <>R 3AIE FI@I2A2I>4G 2CD 3A@D I3 EDD@DE RDAE I42>
2CDIR C>42RAC2
Pac:age 6 means indi)idual &ac:aging of the goods
6 does not co)er 1 container )an
Parties ma' agree to amount of liabilit' less than N1?? under 3ec. 0#1$. B'
&ro)iding that N1?? is the ma7imum liabilit', the la* does not disallo* an
agreement for liabilit' at a lesser amount. @oreo)er, Art. 1"0 of the 4CC
e7&ressl' allo*s th limitation of the carrierHs liabilit'. #Dastern ). Great Ameri 6
can$
SCRRENDER OH RI4ETS AND IMMCNITIES AND IN/REASE OH
RESPONSIFILITIES AND LIAFILITIES
Sec. B. A carrier sha%% $e at %i$erty to s!rren'er in )ho%e or in
#art a%% or any of his ri&hts an' i!nities or to increase any of his
res#onsi$i%ities an' %ia$i%ities !n'er this Act, #ro-i'e' s!ch s!rren'er or
increase sha%% $e e$o'ie' in the $i%% of %a'in& iss!e' to the shi##er.
The #ro-isions of this Act sha%% not $e a##%ica$%e to charter
#arties@ $!t if $i%%s of %a'in& are iss!e' in the case of a shi# !n'er a
charter #arty, they sha%% co#%y )ith the ters of this Act. Nothin& in
this Act sha%% $e he%' to #re-ent the insertion in a $i%% of %a'in& of any
%a)f!% #ro-isions re&ar'in& &enera% a-era&e.
SPE/IAL /ONDITIONS
Sec. *. Not)ithstan'in& the #ro-isions of the #rece'in&
section, a carrier, aster or a&ent of the carrier, an' a shi##er sha%%, in
re&ar' to any #artic!%ar &oo's $e at %i$erty to enter into any a&reeent
in any ters as to the res#onsi$i%ity an' %ia$i%ity of the carrier for s!ch
&oo's, an' as to the ri&hts an' i!nities of the carrier in res#ect to
s!ch &oo's, or his o$%i&ation as to sea)orthiness, <so far as the
sti#!%ation re&ar'in& sea)orthiness is not contrary to #!$%ic #o%icy=, or
the care or 'i%i&ence of his ser-ants or a&ents in re&ar' to the %oa'in&,
han'%in&, sto)a&e, carria&e, c!sto'y, care an' 'ischar&e of the &oo's
carrie' $y sea@ #ro-i'e', that in this case no $i%% of %a'in& has $een or
sha%% $e iss!e' an' that the ters a&ree' sha%% $e e$o'ie' in a recei#t
)hich sha%% $e a non6ne&otia$%e 'oc!ent an' sha%% $e ar2e' as s!ch.
Any a&reeent so entere' into sha%% ha-e f!%% %e&a% effect9
Pro-i'e', that this section sha%% not a##%y to or'inary coercia%
shi#ents a'e in the or'inary co!rse of tra'e $!t on%y to other
shi#ents )here the character or con'ition of the #ro#erty to $e carrie'
or the circ!stances, ters an' con'itions !n'er )hich the carria&e is
to $e #erfore' are s!ch as reasona$%e to .!stify a s#ecia% a&reeent.
Sec. 1. Nothin& containe' in this Act sha%% #re-ent a carrier or
a shi##er fro enterin& into any a&reeent, sti#!%ation, con'ition,
reser-ation, or e(e#tion as to the res#onsi$i% ity an' %ia$i%ity of the
carrier or the shi# for the %oss or 'aa&e to or in connection )ith the
c!sto'y an' care an' han'%in& of &oo's #rior to the %oa'in& on an'
s!$se0!ent to the 'ischar&e fro the shi# on )hich the &oo's are
carrie' $y sea.
Sec. 3. The #ro-isions of this Act sha%% not affect the ri&hts
an' o$%i&ations of the carrier !n'er the #ro-isions of the Shi##in& Act,
151*, or !n'er the #ro-isions of Section ?D31 to ?D5D, inc%!si-e, of the
Re-ise' Stat!tes of the Cnite' States, or of any aen'ents thereto, or
!n'er the #ro-isions of any other enactent for the tie $ein& in force
re%atin& to the %iitation of the %ia$i%ity of the o)ners of sea&oin&
-esse%s.
TITLE II
Sec. 5. Nothin& containe' in this Act sha%% $e constr!e' as
#erittin& a coon carrier $y )ater to 'iscriinate $et)een
co#etin& shi##ers sii%ar%y #%ace' in tie an' circ!stances, either
<a= )ith res#ect to their ri&ht to 'ean' an' recei-e $i%%s of
%a'in& s!$.ect to the #ro-isions of this Act@ or
<$= )hen iss!in& s!ch $i%%s of %a'in& either in the s!rren'er of
any of the carrierGs ri&hts an' i!nities or in the increase of any of the
carrierGs res#onsi$i%ities an' %ia$i%ities #!rs!ant to Section B, Tit%e I, of
this Act@
<c= in any other )ay #rohi$ite' $y the Shi##in& Act, 151*, as
aen'e'.
Sec. 1+. <Not a##%ica$%e to the Phi%i##ines.=
Sec. 11. When !n'er the c!sto of any tra'e the )ei&ht of
any $!%2 car&o inserte' in the $i%% of %a'in& is a )ei&ht ascertaine' or
acce#te' $y a thir' #arty other than the carrier or the shi##er an' the
fact that the )ei&ht as ascertaine' or acce#te' is state' in the $i%% of
%a'in&, then not)ithstan'in& anythin& in this Act, the $i%% of %a'in& sha%%
not $e 'eee' to $e #ria facie e-i'ence a&ainst the carrier of the
recei#t of &oo's of the )ei&ht so inserte' in the $i%% of %a'in&, an' the
acc!racy thereof at the tie of shi#ent sha%% not $e 'eee' to ha-e
$een &!arantee' $y the shi##er.
Sec. 1D. <Not a##%ica$%e to the Phi%i##ines.=
Sec. 1;. This act sha%% a##%y to a%% contracts for carria&e of
&oo's $y sea to or fro #orts of the Cnite' States in forei&n tra'e. As
!se' in this Act the ter >Cnite' States> inc%!'es its 'istricts, territories,
an' #ossessions9 Pro-i'e', ho)e-er, that the Phi%i##ine Le&is%at!re
ay $y %a) e(c%!'e its a##%ication to trans#ortation to or fro #orts of
the Phi%i##ine Is%an's. The ter >forei&n tra'e> eans the
trans#ortation of &oo's $et)een the #orts of the Cnite' States an' #orts
of forei&n co!ntries. Nothin& in this Act sha%% $e he%' to a##%y to con6
tracts for carria&e of &oo's $y sea $et)een any #ort of the Cnite' States
or its #ossession9 Pro-i'e', ho)e-er, that any $i%% of %a'in& or sii%ar
'oc!ent of the tit%e )hich is e-i'ence of a contract for the carria&e of
&oo's $y sea $et)een s!ch #orts, containin& an e(#ress stateent that
it sha%% $e s!$.ect to the #ro-isions of this Act, sha%% $e s!$.ecte' hereto
as f!%%y as if s!$.ect hereto $y the e(#ress #ro-isions of this Act9
Pro-i'e', f!rther, that e-ery $i%% of %a'in& or sii%ar 'oc!ent of tit%e
)hich is e-i'ence of a contract for the carria&e of &oo's $y sea fro
#orts of the Cnite' States in forei&n tra'e, sha%% contain a stateent that
it sha%% ha-e effect s!$.ect to the #ro-isions of this Act.
4otes= American Insurance )s Cia @aritima = contract of carriage from 4K
*ith final destination in Cebu. C>G3A is a&&licable des&ite the fact that from
@anila to Cebu, the goods *ere transshi&&ed on an interisland )essel.
2ransshi&ment *as not a se&arate transaction from that originall' entered into
b' the &arties but *as &art of the carrierHs contractual obligation.
Sec. 1?. C#on the certification of the Secretary of /oerce
that the forei&n coerce of the Cnite' States in its co#etition )ith
that of forei&n nations is #re.!'ice' $y the #ro-isions, or any of the, of
the Tit%e I of this Act, or $y the %a)s of any forei&n co!ntry or co!ntries
re%atin& to the carria&e of &oo's $y sea, the Presi'ent of the Cnite'
States ay, fro tie to tie $y #roc%aation, s!s#en' any or a%%
#ro-isions of Tit%e I of this Act for s!ch #erio's of tie or in'efinite%y as
ay $e 'esi&nate' in the #roc%aation., The Presi'ent ay at any tie
rescin' s!ch s!s#ension of Tit%e I hereof, an' any tie rescin' s!ch
s!s#ension of Tit%e I hereof, an' any #ro-isions thereof )hich ay ha-e
$een thereafter a'e for carria&e of &oo's $y sea. Any #roc%aation of
s!s#ension or rescission of any s!ch s!s#ension sha%% ta2e effect on the
'ate nae' therein, )hich 'ate sha%% $e not %ess than ten 'ays fro the
iss!e of the #roc%aation.
Any contract for the carria&e of &oo's $y sea, s!$.ect to the
#ro-isions of this Act, effecti-e '!rin& any #erio' )hen Tit%e I hereof, or
any #art thereof, is s!s#en'e', sha%% $e s!$.ect to a%% #ro-isions of %a)
no) or hereafter a##%ica$%e to that #art of Tit%e I )hich ay ha-e th!s
$een s!s#en'e'.
Sec. 1B, /O4SA. This Act sha%% ta2e effect ninety 'ays after the 'ate of
its a##ro-a%@ $!t nothin& in this Act sha%% a##%y '!rin& a #erio' not to
e(cee' one year fo%%o)in& its a##ro-a% to any contract for the carria&e of
&oo's $y sea, a'e $efore the 'ate on )hich this Act is a##ro-e' nor to
any $i%% of %a'in& or sii%ar 'oc!ent of tit%e iss!e', )hether $efore or
after s!ch 'ate of a##ro-a% in #!rs!ance of any s!ch contract as
aforesai'.
PAGE 76
TRANSPORTATION AND MARITIME LAW
Sec. 1*, /O4SA. This Act ay $e cite' as the >/arria&e of 4oo's $y
Sea Act.>
A##ro-e', A#ri% 1*, 15;*.
.. International Air 2rans&ort
A. 2he %arsa* Con)ention, 11 >.G. 1?!0 #>ctober 111$G
Presidential Proclamation 4o. -?1, 11 >.G. 0;; #>ctober 111$
MAIIN4 PCFLI/ TEE ADEEREN/E OH TEE R.P. TO TEE /ONAENTION
HOR TEE CNIHI/ATION OH /ERTAIN RCLES RELATIN4 TO INTL.
TRANSPORTATION FK AIR AND TEE ADDITIONAL PROTO/OL TEERETO,
15D5
WEEREAS, a /on-ention for the Cnification of /ertain R!%es
Re%atin& to Internationa% Trans#ortation $y Air O an A''itiona% Protoco%
thereto re%atin& to Artic%e D of the /on-ention )ere si&ne' at Warsa) $y
the #%eni#otentiaries of ;D co!ntries@
WEEREAS, Artic%e ;3 of the aforesai' /on-ention #ro-i'es
that a 4o-ernent on $eha%f of )hich this /on-ention has not $een
si&ne', sha%% $e a%%o)e' to a'here thereto at any tie after the
/on-ention has coe into force, $y eans of a notification a''resse' to
the 4o-ernent of the Re#!$%ic of Po%an'@
WEEREAS, the Senate of the /on&ress of the Phi%i##ines, $y
its Reso%!tion No. 15 a'o#te' on May 1*, 15B+, conc!rre' in the
a'herence $y the Re#!$%ic of the Phi%i##ines 4o-ernent to the sai'
/on-ention O the sai' Protoco% in accor'ance )ith the Phi%i##ine
/onstit!tion, s!$.ect to the reser-ation, as #ro-i'e' in the A''itiona%
Protoco%, that the 1st #ara&ra#h of Art. D of the /on-ention sha%% not
a##%y to internationa% trans#ortation that ay $e #erfore' $y the
Re#!$%ic of the Phi%i##ines@
WEEREAS, the Re#!$%ic of the Phi%i##ines 4o-ernent has
fora%%y a'here' to the sai' /on-ention its A''itiona% Protoco%, O the
4o-ernent of the Re#!$%ic of Po%an' )as notifie' of sai' a'herence on
No-e$er 5, 15B+, )hen the instr!ent of a'herence )as re&istere' in
accor'ance )ith Artic%e ;3 <D= of sai' /on-ention@ an',
WEEREAS, the a'herence of the Re#!$%ic of the Phi%i##ines
4o-ernent, #!rs!ant to Art. ;3<;= of sai' /on-ention, too2 effect as
fro the 5+th 'ay after No-e$er 5, 15B+.
NOW, TEEREHORE, $e it 2no)n that I, Raon Ma&saysay,
Re#!$%ic of the Phi%i##ines Presi'ent, in #!rs!ance of the aforesai'
conc!rrence of the Senate of the /on&ress of the Phi%i##ines, an'
s!$.ect to the reser-ation as #ro-i'e' in the A''itiona% Protoco% that the
Hirst #ara&ra#h of Art.D of the /on-ention sha%% not a##%y to internationa%
trans#ortation that ay $e #erfore' $y the Re#!$%ic of the Phi%i##ines,
'o here$y #roc%ai an' a2e #!$%ic the sai' /on-ention an' sai'
Protoco%, a co#y of )hich is hereto attache', to the en' that the sae
an' e-ery artic%e an' c%a!se thereof ay $e o$ser-e' O f!%fi%%e' )ith
&oo' faith $y the Re#!$%ic of the Phi%i##ines an' the citi"ens thereof.
4otes= If common carrier, Ci)il Code first a&&lies, then %arsa* Con)ention.
3ituations *here %arsa* is a&&licable is in &ri)ate carriers.

2he onl' criterion for the %arsa* Con)ention to be a&&licable is= it is
a&&licable to AFF international trans&ortation of &ersons, baggage, or goods
&erformed b' aircraft for hire.

International trans&ort= *here thereHs trans&ort b' AIR M there is a &oint of
contact in - high contracting &arties #countries *hich ha)e acceded to the
Con)ention$.
D.g. trans&ortation b' PAF from @anila to 3an <rancisco
<ederal D7&ress 6 trans&oration of goods
B. Constitutionalit'
SANTOS A. NORTEWEST AIRLINES 8-1? 3 -1/ #1-$9
<= 1. A <ili&ino minor *as informed b' 4orth*est that he had no
reser)ations for his flights, and had to be *aitlisted, des&ite a &re)ious
confirmation. Ce sued for damages. 4orth*est mo)ed to dismiss on the
ground of lac: of Burisdiction based on Art.-! #1$ of the %arsa* Con)ention,
*here the com&laint could be instituted in the territor' of one of the contracting
&arties before the court of the
#1$ domicile of the carrierG
#-$ &rinci&al &lace of businessG
#;$ *here it has a &lace of business through *hich the contract had been
madeG and
#0$ &lace of destination.
<IR32 I33UD= %I4>2 2CD %AR3A% C>4.D42I>4 I3
U4C>432I2U2I>4AF(
CDFE= 4o. Art. -! #1$ of %arsa* Con. is constitutional. Although the case can
be decided on other grounds *ithout resol)ing the constitutional +uestion, the
%arsa* Con)ention is a treat' commitment )oluntaril' assumed b' the
Phili&&ine Go)ernment and as such, has the force and effect of la*. 2he
&resum&tion is that this Boint legislati)e6e7ecuti)e act *as first carefull'
studied and determined to be constitutional before it *as ado&ted. Peti tionerHs
allegation ha)e not o)ercome this &resum&tion. @oreo)er, the treat' since
11? has not been reBected b' the Phili&&ine Go)ernment.
3DC>4E I33UD= %I4>2 2CD %C 3C>UFE BD RD4EDRDE IRRDFD.A42
BK 2CD E>C2RI4D >< RDBU3 3IC 32A42IBU3(
CDFE= 4o. 2he circumstance that the airline industr' *as still in infanc' *hen
the Con)ention *as made, alone, is not sufficient Bustification for the reBection
of the treat' at this time. 2he changes recited b' &etitioner *ere not entirel'
unforeseen although the' *ere e7&ected in a general sense onl'. #Chec:
Art.01$.
2CIRE I33UD= %I4>2 2CD RDQUI3I23 >< 2CD %C I3 @DRDFK A @A22DR
>< .D4UD >R ,URI3EIC2I>4(
CDFE= ,urisdiction
#1$ 2he *ording of Art. ;-, *hich indicates the &laces *here the action for
damages 5must5 be brought, underscores the mandator' nature of Art. -! #1$.
#-$ 2his characteriAation is consistent *ith one of the obBecti)es of the
con)ention, *hich is to regulate in a uniform manner the conditions of
international trans&ortation b' air.
<>UR2 I33UD= %I4>2 PCIFIPPI4 C>UR23 CA.D ,URI3EIC2I>4 >.DR
2CI3 CA3D(
CDFE= 4o. Art. -! #1$ &ro)ides that an action for damage must be brought at
the o&tion of the &laintiff= #a$ before the court of the domicile of the carrierG
#b$ the court of its &rinci&al &lace of businessG
#c$ the court *here it has a &lace of business thru *Ic the contract had been
madeG
#d$ the court of the &lace of destination.
In this case, the ff. *ere not follo*ed, and hence the Phili&&ines,
not being one of the courts mentioned in Art.-! #1$, does not ha)e Burisdiction
o)er the case.
#1$ court of domicile is @innesota, U.3.AG
#-$ &rinci&al &lace of business of carrier is also U.3.AG
#;$ &lace of business *here contract *as made *as in 3an <ranciscoG
#0$ &lace of destination is also 3an <rancisco, 3antos ha)ing &urchased a
round tri&6tic:et from 3<>62K>6@4F, then bac: to 2K>6 3<>. 2he 5ultimate
destination5 being 3an <rancisco.
2he court called u&on to determine the a&&licabilit' of the limitation
&ro)ision must first be )ested *ith the a&&ro&riate Burisdiction. If the carrier is
indeed is indeed not guilt' of %IFF<UF @I3C>4EUC2, it can a)ail itself of the
limitations set forth in this article. But it can be done onl' if the action has first
been commenced &ro&erl' under the rules set forth in Art.-! #1$.
4otes= 2he enumeration of the causes of action in the %C is not an e7clusi)e
list. Kou can ha)e a cause of action e)en if it is not=
#a$ death or *ounding of &assengerG
PAGE 77
TRANSPORTATION AND MARITIME LAW
#b$ damage or loss or destruction of chec:ed baggageG
#c$ dela' in trans&ortation of &assengers, luggage and goods.
2he case of 4orth*est is actuall' o)erboo:ing. Eela' still a cause of action
under %C.
4ote ho*e)er, that the limitations of liabilit' in the Con)ention fa)ors the
carrier.
C. %hen A&&licable
Art. 1. <1= This con-ention sha%% a##%y to a%% internationa%
trans#ortation of #ersons, $a&&a&e, or &oo's #erfore' $y aircraft for
hire. It sha%% a##%y e0!a%%y to &rat!ito!s trans#ortation $y aircraft
#erfore' $y an air trans#ortation enter#rise.
<D= Hor the #!r#ose of this con-ention the e(#ression
>internationa% trans#ortation> sha%% ean any trans#ortation in )hich,
accor'in& to the contract a'e $y the #arties, the #%ace of 'e#art!re an'
the #%ace of 'estination, )hether or not there $e a $rea2 in the
trans#ortation or a transshi#ent, are sit!ate' either )ithin the
territories of t)o Ei&h /ontractin& Parties, or )ithin the territory of a
sin&%e Ei&h /ontractin& Party, if there is an a&ree' sto##in& #%ace )ithin
a territory s!$.ect to the so-erei&nty, s!"erainty, an'ate, or a!thority of
another #o)er, e-en tho!&h that #o)er is not a #arty to this con-ention.
Trans#ortation )itho!t s!ch an a&ree' sto##in& #%ace $et)een territo6
ries s!$.ect to the so-erei&nty, s!"erainty, an'ate, or a!thority of the
sae Ei&h /ontractin& Party sha%% not $e 'eee' to $e internationa% for
the #!r#oses of this /on-ention.
<;= Trans#ortation to $e #erfore' $y se-era% s!ccessi-e air
carriers sha%% $e 'eee', for the #!r#oses of this /on-ention, to $e one
!n'i-i'e' trans#ortation, if it has $een ren'ere' $y the #arties as a
sin&%e o#eration, )hether it has $een a&ree' !#on !n'er the for of a
sin&%e contract or of a series of contracts is to $e #erfore' entire%y ):in
a territory s!$.ect to the so-erei&nty, s!"erainty, an'ate, or a!thority of
the sae Ei&h /ontractin& Party.
Art. D. <1= This con-ention sha%% a##%y to trans#ortation
#erfore' $y the state or $y %e&a% entities constit!te' !n'er #!$%ic %a)
#ro-i'e' it fa%%s )ithin the con'itions %ai' 'o)n in Art .1.
<D= This con-ention sha%% not a##%y to trans#ortation #erfore'
!n'er the ters of any internationa% #osta% con-ention.
E. Fiabilities Under the Con)ention
Art. 11. The carrier sha%% $e %ia$%e for 'aa&e s!staine' in the
e-ent of the 'eath or )o!n'in& of a #assen&er or any other $o'i%y in.!ry
s!ffere' $y a #assen&er, if the acci'ent )hich ca!se' the 'aa&e so
s!staine' too2 #%ace on $oar' the aircraft or in the co!rse of any of the
o#erations of e$ar2in& or 'ise$ar2in&.
Art. 13. <1= The carrier sha%% $e %ia$%e for 'aa&e s!staine' in
the e-ent of the 'estr!ction or %oss of, or of 'aa&e to, any chec2e'
$a&&a&e, or any &oo's, if the occ!rrence )hich ca!se' the 'aa&e so
s!staine' too2 #%ace '!rin& the trans#ortation $y air.
<D= The trans#ortation $y air )ithin the eanin& of the
#rocee'in& #ara&ra#h sha%% co#rise the #erio' '!rin& )hich the
$a&&a&e or the &oo's are in char&e of the carrier, )hether in an air#ort
or on $oar' an aircraft, or in the case of a %an'in& o!tsi'e an air#ort, in
any #%ace )hatsoe-er.
<;= The #erio' of the trans#ortation $y air sha%% not e(ten' to
any trans#ortation $y %an', $y sea, or $y ri-er #erfore' o!tsi'e of an
air#ort. If ho)e-er, s!ch trans#ortation ta2es #%ace in the #erforance of
a contract for trans#ortation $y air, for the #!r#ose of %oa'in&, 'e%i-ery,
or transshi#ent,any 'aa&e is #res!e', s!$.ect to #roof to the
contrary, to ha-e $een the res!%t of an e-ent )hich too2 #%ace '!rin& the
trans#ortation $y air.
Art. 15. The carrier sha%% $e %ia$%e for 'aa&e occasione' $y
'e%ay in the trans#ortation $y air of #assen&ers,$a&&a&e, or &oo's.
NORTERWEST A. /CEN/A 810 3 1?/; #1/1$9
<= 4icolas Cuenca, an official delegate of Phili&&ines to a conference
in 2o:'o, *as transferred from first class to tourist class des&ite his first class
tic:et. 2he 4orth*est agent also treated him rudel' in front of other
&assengers. 4orth*est argues that according to the %arsa* Con)ention, Arts.
1", 1!, 1, an air carrier is liable onl' in the e)ent of #a$ death of a
&assenger or inBur' suffered b' himG #b$ of destruction or loss of, or damage to
an' chec:ed baggageIgoodsG M #c$ dela' in the trans&ortation b' air of
&assengers, baggage or goods.
I33UD= %I4>2 CUD4CA CA3 A CAU3D >< AC2I>4 2C>UGC 4>2 A@>4G
2C>3D @D42I>4DE I4 2CD %C(
CDFE= Kes. 2he said articles merel' declare the carrier liable for damages in
the enumerated cases, if the conditions therein s&ecified are &resent. 4either
the &ro)isions of said articles nor others regulate or e7clude liabilit' for other
breaches of contract b' the carrier. Under &etitionerHs theor', an air carrier
*ould be e7em&t from an' liabilit' for damages in the e)ent of its absolute
refusal, in bad faith, to com&l' *ith a contract of carriage, *hich is absurd.
ALITALIA A. IA/ 81- 3CRA 1? #1?$9
<= Er. <eli&a Pablo, an Associate UP Professor and research grantee
of the Phili&&ine Atomic Dnerg' Agenc' *as scheduled to s&ea: in a U4
meeting in Is&ra, Ital'. 3he arri)ed in @ilan a da' before the meeting, but her
luggage #*here her s&eech *as$ *as dela'ed, and arri)ed a da' after the
meeting. 3he returned to @anila before the meeting.
I33UD= %I4>2 2CD %C 3C>UFE APPFK 2> FI@I2 AFI2A2FIAH3 FIABIFI2K(
CDFE= 4o. 2he %C does not o&erate as an absolute limit of the e7tent of an
airlineHs liabilit'. It does not regulate or e7clude liabilit' for other breaches of
contract b' the carrier.
Under the %C, an air carrier is made liable for damages for dela' in the
trans&ortation b' air of &assengers, luggage or goods. 2he %C also limits
the liabilit' of the carrier to -1? francs &er :ilo of the total *eight of the
&ac:age. 2he %C denies to the carrier a)ailment of the &ro)isions *hich
e7clude or limit his liabilit', if the damage is caused b' his *illful misconduct
or b' such default on his &art as, in accordance *ith the la* of the court
seiAed of the case, is considered as *illful misconduct, or if the damage is
caused b' an' agent of the carrier acting *Iin the sco&e of his em&lo'ment.
-. 2he %C does not regulate or e7clude liabilit' for other breaches of contract
b' the carrier or misconduct of its officers and em&lo'ees or for some
&articular or e7ce&tional damage. 2he %C has been held ina&&licable *here
there *as &roof of malice or bad faith attributable to its officers and
em&lo'ees. Cere, ho*e)er, there *as no bad faith on the &art of the
em&lo'ees.
4ominal damages ho*e)er, *as a*arded because of the &resence of some
s&ecial s&ecies of inBur' caused to Er. Pablo.
D. Fimitations on Fiabilit'
RD= PA33D4GDR3
Art.DD. <1= In the trans#ortation of #assen&ers the %ia$i%i ty of
the carrier for each #assen&er sha%% $e %iite' to the s! of 1DB,+++
francs. (Now $100,000) Where, in accor'ance ): the %a) of the co!rt to
):c the case is s!$itte', 'aa&es ay $e a)ar'e' in the for of
#erio'ica% #ayents, the e0!i-a%ent ca#ita% -a%!e of the sai' #ayents
sha%% not $e e(cee' 1DB,+++ francs. Ne-erthe%ess, $y s#ecia% contract, the
carrier an' the #assen&er ay a&ree to a hi&her %iit of %ia$i%ity.
RD= BAGGAGDIG>>E3
<D= In the trans#ortation of chec2e' $a&&a&e an' of &oo's, the
%ia$i%ity of the carrier sha%% $e %iite' to a s! of DB+ francs #er 2i%o&ra
(Now $20 per ilo), !n%ess the consi&nor has a'e, at the tie )hen the
#ac2a&e )as han'e' o-er to the carrier, a s#ecia% 'ec%aration of the
-a%!e of the 'e%i-ery an' has #ai' a s!##%eentary s! if the case so
re0!ires. In that case, the carrier )i%% $e %ia$%e to #ay a s! not
e(cee'in& the 'ec%are' s!n, !n%ess he #ro-es that the s! is &rater that
the act!a% -a%!e to the consi&nor at 'e%i-ery.
<;= As re&ar's o$.ects of ):c the #assen&er ta2es char&e
hise%f, the %ia$i%ity of the carrier sha%% $e %iite' to B,+++ francs #er
#assen&er.
PAGE 78
TRANSPORTATION AND MARITIME LAW
<?= The s!s entione' a$o-e sha%% $e 'eee' to refer to the
Hrench franc consistin& of *B 1:D i%%i&ras of &o%' at the stan'ar' of
fineness of nine h!n're' tho!san'ths. These s!s ay $e con-erte'
into any nationa% c!rrency in ro!n' fi&!res.
Art. D;. Any #ro-ision ten'in& to re%ie-e the carrier of %ia$i%ity
or to fi( a %o)er %iit that )hich is %ai' 'o)n in this con-ention sha%% $e
n!%% an' -oi', $!t the n!%%ity of any s!ch #ro-ision sha%% not in-o%-e the
n!%%ity of the )ho%e contract, )hich sha%% reain s!$.ect to the
#ro-isions of this con-ention.
Art. D?. <1= In the cases co-ere' $y Arts.13 O 15 any action for
'aa&es, EOWEAER HOCNDED, can on%y $e $ro!&ht s!$.ect to the
con'itions an' %iit set o!t in this con-ention.
<D= In the case co-ere' $y Art.11, the #ro-isions of the #rece'6
in& #ara&ra#h sha%% a%so a##%y,):o #re.!'ice to the 0!estion as to )ho
are the #ersons )ho ha-e the ri&ht to $rin& s!it an' )hat are their
res#ecti-e ri&hts.
4>2D3= .ven if you base your claim on !uasi-delict, you can still sue under
&arsaw, invo'ing Art.01 "2#.
PA4 A@ ). IAC #1/0 3CRA$
<= PanganHs luggages didnHt arri)e *I his flight. As a conse+uence the
film e7hibitions he set u& M &romoted for, *as cancelled. C<I ordered PanAm
to &a' for P!;,??? for actual damages. PanAm contended that such a*ard
*as be'ond the limitation of liabilit' set forth in the %arsa* Con., the
&ro)isions of such being found at the bac: of the tic:et.
I33UD= %>4 Pangan is bound b' such %arsa* &ro)isions M hence is entitled
onl' to N/?? #N-? standard X ;? :ilos$ 6666 KD3.
3uch &ro)isions ha)e been held to be a &art of the contract of
carriage, M is )alid M binding u&on the &assenger regardless of the latterHs lac:
of :no*ledge or assent to the regulation.
A contract limiting liabilit' u&on an agreed )aluation does not offend
against the &olic' of the la* forbidding one from contracting against his o*n
negligence. Inasmuch as Pangan failed to declare an' higher )alue for his
luggage M to &a' addHl charges, PanAmHs liabilit' is limited to N/??, as
sti&ulated at the bac: of the tic:et.
<DFICIA4> ). PA4 A@ #CA CA3D$
<= <eliciano, M her Co. as:ed P1!-,??? for the )alue of the contents
of her lost luggage #including loss of &ossible o&&ortunities$. PanAm contends
its liabilit' if limited b' the %arsa* Con. to not more than N-? &er :ilo. 2C
held that there *as no issue of fact e7ce&t as to amountM a*arded N/?? #N-?
X ;? :gs$.
%as 2C correct( 666 KD3.
Indeed, 3C has granted damages on the ground of fraud or bad
faith due to the &ersonal misconduct of airline em&lo'ees. 2his case, ho*e)er,
the contract of carriage of PD2Hs baggage is based on the conditions in the
airline. 3uch contract is go)erned b' Art.--#-$. 3ince there is no e)idence that
PD2 had declared a higher )alue for her lost luggage for *Ic the
corres&onding )alue, the %arsa* Con. should a&&l'.
<. %hen limitations una)ailable
Art. ;. <1= Hor the trans#o. of #assen&ers the carrier !st
'e%i-er a #assen&er tic2et ):c sha%% contain the ff. #artic!%ars9
<a= The #%ace O 'ate of iss!e@
<$= The #%ace of 'e#art!re O of 'estination@
<c= The a&ree' sto##in& #%aces, #ro-i'e' that the
carrier ay reser-e the ri&ht to a%ter the sto##in&
#%aces in case of necessity, an' that if he
e(ercises that ri&ht, the a%teration sha%% not ha-e
the effect of 'e#ri-in& the trans#ortation of its int%.
character@
<'= The nae O a''ress of the carrier:s@
<e= A stateent that the trans#o. is s!$.ect to the
r!%es re%atin& to %ia$i%ity esta$%ishe' $y this
con-ention.
<D= The a$sence, irre&!%arity, or %oss of the #assen&er tic2et
sha%% not affect the e(istence or the -a%i'ity of the contract of
trans#ortation, ):c sha%% none the %ess $e s!$.ect to the r!%es of this
con-ention. Ne-erthe%ess, if the carrier acce#ts a #assen&er ):o a
#assen&er tic2et ha-in& $een 'e%i-ere' he sha%% not $e entit%e' to a-ai%
hise%f of those #ro-isions of this /on-ention ):c e(c%!'e or %iit his
%ia$i%ity.
Art.DB. <1= The carrier sha%% not $e entit%e' to a-ai% hise%f of
the #ro-isions of this con-ention ):c e(c%!'e or %iit his %ia$i%ity, if the
'aa&e is ca!se' $y his )i%f!% iscon'!ct or $y s!ch 'efa!%t on his
#art as, in accor'ance ): the %a) of the co!rt to ):c the case is
s!$itte', is consi'ere' to $e e0!i-a%ent to )i%f!% iscon'!ct.
<D= Sii%ar%y the carrier sha%% not $e entit%e' to a-ai% hise%f of
the sai' #ro-isions, is the 'aa&e is ca!se' !n'er the sae
circ!stances $y any a&ent of the carrier actin& ):in the sco#e of his
e#%oyent.
4>2D3= Q= In *hat cases can carrier 4>2 in)o:e limitations(
A= 1. *ilfull misconduct #Art.-1$
-. default amounting to *ilful misconduct accdg. to court *here action is
broughtG
;. acce&ting &assengers *Io &assenger tic:et #Art.;6-$G
0. acce&ting goods *Io air *a'billIbaggage *Io baggage chec:.
Q= Can carrier rel' on %C if it *as guilt' of *ilfull misconduct(
A= KD3. It Bust canHt a)ail of the limitation on liabilit'. 2hus it can
still in)o:e the &ro)isions on 4>2ICD or PRD3CRIP2I>4IFACL >< CAU3D
>< AC2I>4.
e.g. If damage *asnHt one of the enumerations in the %C, M case *as filed
be'ond the - 'ear re+uirement. 2he carrier can in)o:e &rescri&tion. But if suit
is brought *Iin - 'ears, carrier ma' be liable for a higher amount than the
limitation.
2he onl' time *hen %C isnHt a&&licable is *hen itHs not intl. air
trans&ort. 2here is nothing in Art.-1 *Ic sa's that the %C doesnHt a&&l'
entirel'.
AFI2AFIA ).IAC #su&ra$
2he Con)ention does not regulate or e7clude liabilit' for other
breaches of contract b' the carrier or misconduct of its officers and
em&lo'ees or for some &articular or e7ce&tional damage. 2he Con. has been
held ina&&licable *here there *as &roof of malice or bad faith attributable to its
officers M em&lo'ees. CDRD, C>%D.DR, no bad faith of DD3. 4ominal
damages ho*e)er, *as a*arded because of the &resence of some s&ecial
s&ecies of inBur' caused to Er. Pablo.
2%A ). CA #1/1 3CRA$
<= .inluan, ACCRA la*'er, *as do*ngraded from 1st class to
econom' M *as issued refund
a&&lication, in his @4F6Duro&e64KL6 3<>6@4F flight. #Cis 4KL63<> flight
&articularl'$ Ce also noticed that *hite Caucasian &assengers *ho chec:ed in
later than him *ere gi)en &reference in 1st class seats, *Ic became a)ailable
due to 5no sho*5 &assengers. Ce sued in C<I for breach of contract M bad
faith.
I33UD= %>4 %arsa* Con. limit on liabilit' can be a)ailed of 666 4>.
2here *as ob)ious discrimination M humiliation to *Ic .inluan *as
subBected. 3uch inattention M lac: of care for interest of its &assengers
amount to bad faith *Ic entitles &assenger to moral damages.
4>2D3= Cis entire tri&, e)en though he a)ailed of the ser)ices of other
airlines, is e+ual to one trans&ort.
D.g. @4F63<> )ia PAF U one continuing
3<>64KL )ia United U tic:et
Cence, if inBur' a&&ears in 3<>64KL, %arsa* can be a&&lied.
<. Conditions of Fiabilit'
Art.D*. <1= Recei#t $y the #erson entit%e' to the 'e%i-ery of
$a&&a&e of &oo's ):o co#%aint sha%% $e #ria facie e-i'ence that the
sae ha-e $een 'e%i-ere' in &oo' con'ition O in accor'ance ): the
'oc!ent of trans#o.
PAGE 79
TRANSPORTATION AND MARITIME LAW
<D=In case of 'aa&e, the #erson entit%e' to 'e%i-ery !st
co#%ain to the carrier forth)ith after the 'isco-ery of the 'aa&e, an'
at the %atest, )ithin ; 'ays fro the 'ate of recei#t in the case of
FA44A4E an' 1 'ays fro the 'ate of recei#t in the case of 4OODS. In
case of DELAK the co#%aint !st $e a'e at the %atest ):in 1? 'ays
fro the 'ate on ):c the $a&&a&e or &oo's ha-e $een #%ace' at his
'is#osa%.
<;= E-ery co#%aint !st $e a'e in )ritin& !#on the 'oc!6
ent of trans#ortation or $y se#arate notice in )ritin& 'is#atche' ):in
the ties aforesai'.
<?= Hai%in& co#%aint ):in the ties aforesai', no action sha%%
%ie a&ainst the carrier, sa-e in the case of fra!' on his #art.
4>2D= 3o notice re!uirement in case or a person)s death or injury.
Art. D1. In the case of 'eath of the #erson %ia$%e, an action for
'aa&es %ies in accor'ance ): th ters of this con-ention a&ainst those
%e&a%%y re#resentin& his estate.
Art. D3. <1= An action for 'aa&e !st $e $ro!&ht at the o#tion
of the #%aintiff, in the territory of one of the Ei&h /ontractin& Parties,
either $efore the co!rt of the 'oici%e of the carrier or of his #rinci#a%
#%ace of $!siness , or )here he has a #%ace of $!siness thro!&h ):c the
contract has $een a'e, or $efore the co!rt at the #%ace of 'estination.
<D= J!estions of #roce'!re sha%% $e &o-erne' $y the %a) of the co!rt
to ):c the case is s!$itte'.
3A42>3 ). 4>R2C%D32 #su&ra$
Art. D3<1= #ro-i'es that an action for 'aa&e !st $e $ro!&ht
at the o#tion of the #%aintiff9
<a= $efore the co!rt of the 'oici%e of the carrier@
<$= the co!rt of its #rinci#a% #%ace of $!siness@
<c= the co!rt )here it has a #%ace of $!siness thr!
):c the contract ha' $een a'e@
<'= the co!rt of the #%ace of 'estination.
(((
In this case, the ff. *ere not follo*ed, and hence the Phils., not
being one of the courts mentioned in Art.-! #1$, does not ha)e Burisdiction o)er
the case.
#1$ court of domicile is U.3., @innesotaG
#-$ &rinci&al &lace of business of carrier is also U3G
#;$ &lace of business *here contract *as made *as in 3an <ranciscoG
#0$ &lace of destination is also 3an <rancisco, 3antos ha)ing &urchased a
round tri&6tic:et from 3<>62K>6@4F, then bac: to 2K>6 3<>. 2he 5ultimate
destination5 being 3an <rancisco.
Art. ;D. Any c%a!se containe' in the contract an a%% s#ecia%
a&reeents entere' into $efore the 'aa&e occ!rre' $y )hich the
#arties #!r#ort to infrin&e the r!%es %ai' 'o)n $y this con-ention,
)hether $y 'eci'in& the %a) to $e a##%ie' or $y a%terin& the r!%es as to
.!ris'iction, sha%% $e n!%% an' -oi'. Ne-erthe%ess, for the trans#ortation
of &oo's, ar$itration c%a!ses sha%% $e a%%o)e', s!$.ect to this
con-ention, if the ar$itration is to ta2e #%ace )ithin one of the
.!ris'ictions referre' to in the first #ara&ra#h of Artic%e D3.




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