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San Beda College of Law





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

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



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


1. As to availability
Holds himself out for Contracts
people particular individuals
or groups only
2. As to required diligence
Ordinary diligence is
diligence is required
3. As to regulation
State Not subject to State
4. Stipulation limiting liability
Parties may not agree Parties may limit the
the carrier’s
liability provided it is not
except when provided contrary
by law
5. Exempting circumstance
extraordinary caso
diligence and Art. 1174 NCC
1733, NCC
6.Presumption of negligence
a No presumption of
presumption of fault fault or negligence
or negligence
7.Governing law
Law on common
Law on obligations
and contracts
A. Domestic/inter-island/coastwise
 Applicable to Land, Water, and

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


express or implied. (Southern Lines. Others .  The following are not considered passengers. (Art. although he has a ticket. (Lara vs. vs. Aldrich Del Rosario (Transportation Laws). Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). is not relieved of liability or loss or injury resulting therefrom. e.primary 2. (Notes and Cases on the Law on Transportation and Public Utilities. Bon Vincent Agustin (Corporation Law). 4 SCRA 258) 5. Must be the proximate and only cause of the loss b. PASSENGER  A person who has entered into a contract of carriage. unless the attempt be with the knowledge and consent of the carrier. Valencia) One who rides any part of the vehicle which is unsuitable or dangerous or which he knows is not designed or intended for passengers. NEW CIVIL CODE (Arts. 379. Must be the proximate and only cause of the loss b. Exercise of due diligence to prevent or minimize the loss before. Code of Commerce (Arts. (Eastern Shipping Lines Inc. Fernandez)  Rationale: 1. Civil Code . Robespierre CU (Law on Intellectual Property) . CA. Sole and proximate cause: absolute defense b. v. with the carrier. Consequently. ACTS OF PUBLIC ENEMY  Requisites: a. Water/maritime: Carriage of Goods by Sea Act (COGSA) b. NEGLIGENCE OF THE SHIPPER OR OWNER a. One who has boarded by fraud. CASO FORTUITO/FORCE MAJEURE  Requisites: a. DEFENSES OF A COMMON CARRIER IN THE CARRIAGE OF GOODS 1. Safety of passengers (Arts. 1740)  Fire is not considered a natural disaster or calamity as it arises almost invariably from some act of man. 1755-1763). still accepts the goods notwithstanding such condition. 1734-1754). CA 161 SCRA 646)  Diligence in the selection and supervision COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. Aquino.suppletory 3.primary 2. and 2. is f. b. where the officer acts without legal process. & Hernando. (Ganzon v. knowing the fact of improper packing of the goods upon ordinary observation. They are entitled to extraordinary diligence from the common carrier. T. 2004 ed. One who remains on a carrier for an unreasonable length of time after he has been afforded every safe opportunity to alight. Invited guests and accommodation passengers. Air: Warsaw Convention I. Vigilance over goods (Arts. Contributory: partial defense. 1739) 3. g. IAC)  Mechanical defects are not force majeure if the same was discoverable by regular and adequate inspections. ORDER OR ACT OF PUBLIC AUTHORITY  Said public authority must have the power to issue the order (Art. c. R.P. Exercise of due diligence to prevent or minimize the loss before. IN COMMERCIAL LAW injured by the carrier. during or after the occurrence of the disaster (Art. 349. or deceit. Shirley Mae Tabangcura. d.San Beda College of Law 56 MEMORY AID transportation 1. Preciousness of human life  A common carrier is not an absolute insurer of all risks of travel. COVERAGE 1. CHARACTER OF THE GOODS OR DEFECTS IN THE PACKING OR IN THE CONTAINER  Even if the damage should be caused by the inherent defect/character of the goods. 1741) 4.suppletory B. Jose Fernando Llave (Insurance). 1733) 2.120122) 2. and are entitled to ordinary diligence only: a. Possession of the goods 5. 1. has been properly informed of such fact. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. Inc. Business is impressed with a special public duty 4. p. Karl Steven Co (Special Laws). during or after the act causing the loss. the common carrier must exercise due diligence to forestall or lessen the loss. 573-734. v. Carrier has not negligently incurred in delay in transporting the goods (Art. 806-845) . Relationship of trust 3. 1743). 1739) c. deterioration or destruction of the goods (Art. John Lemuel Gatdula (Banking Laws). One who has not yet boarded any part of a vehicle regardless of whether or not he has purchased a ticket. One who attempts to board a moving vehicle. 1732-1766) REQUIREMENT OF EXTRAORDINARY DILIGENCE  Rendition of service with the greatest skill and utmost foresight. One who has boarded a wrong vehicle. Civil Code . International/foreign/overseas (Foreign country to Philippines)  Applicable to Water/maritime and Air transportation  The law of the country of destination generally applies. Code of Commerce .suppletory a. (Davao Stevedore Co. 1742)  The carrier which. From the nature of the business and for reasons of public policy (Art. 580. stealth. and on alighting. (Art. the common carrier will be held liable.

52 Phil 900) COMMERCIAL LAW Required diligence and defense Extraordinary Ordinary diligence diligence Nature of liability Tort. 2. Not absolute. Abiotiz Shipping Corporation v. Binamira. destruction.San Beda College of Law 57 MEMORY AID of employees under Article 2180 of the Civil Code cannot be interposed as a defense by the common carrier because the liability of the carriers arises from the breach of the contract of carriage. (MRR vs. 2176. Aldrich Del Rosario (Transportation Laws). 101 Phil 120) The duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip. (Art. Perez) LIABILITY OF A COMMON CARRIER FOR DEATH OR INJURIES TO PASSENGERS DUE TO ACTS OF ITS EMPLOYEES AND OTHER PASSENGERS OR STRANGERS FOR ACTS OF ITS EMPLOYEES IN  The carrier is liable when its personnel allowed a passenger to drive the vehicle causing it to collide with another vehicle resulting to the injuries suffered by the other passengers. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. Karl Steven Co (Special Laws).. Bon Vincent Agustin (Corporation Law). 179 SCRA 95)  It is the duty of common carriers of passengers to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to enter.. and they are liable for injuries suffered from the sudden starting up or jerking of their conveyances while doing so. (LRTA v. loss. however. 3. (Lu Do v. or deterioration of the goods 1. 2. (Maranan v. 1737)  It continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination until the consignee has bee advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. CA. but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. [2003])  All persons who remain on the premises within a reasonable time after leaving the conveyance are to be deemed passengers. 1738)  Delivery of goods to the custom authorities is not delivery to the consignee. limited The employee must by Art. The duty which the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom (Dangwa Trans Co. and received by the carrier for transportation until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive them. and includes a reasonable time to see after his baggage and prepare for his departure. Jose Fernando Llave (Insurance). 17 SCRA 739 . vs. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). Inc. Shirley Mae Tabangcura. (Del Prado v. Robespierre CU (Law on Intellectual Property) . John Lemuel Gatdula (Banking Laws). The defense under said articles is applicable to negligence in quasidelicts under Art. 1763 be on duty at the time of the act. (Art. (La Mallorca v. Manila Electric Co. Common carrier Shipper Consignee Delay in delivery. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. 16 SCRA 641) FOR ACTS OF OTHER PASSENGERS OR STRANGERS CARRIAGE OF GOODS CARRIAGE OF PASSENGERS Parties 1. CA 202 SCRA 574). COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. CA. 1736)  It remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or owner has made use of the right of stoppage in transitu. Ballesteros. Common carrier Passenger Cause of liability Death or injury to the passengers Duration of liability From the time the goods are unconditionally placed in the possession of. Navidad. (Art.

from extraordinary to ordinary diligence or diligence of a good father of a family. (Art. Jose Fernando Llave (Insurance). 1758)  The diligence required in the carriage of the goods may be reduced by only one degree. 1735) (Art. 1745.1735 Civil Code Art. or other natural disaster or calamity (plus force majeure) b. and c) Reasonable. Act or omission of the shipper or the owner of goods d. earthquake. Fixed amount of liability: A contract fixing the sum to be recovered by the owner or shipper for the loss. Aldrich Del Rosario (Transportation Laws). 53 PHIL 124) burden of explaining should fall on the carrier. Art. storm. but not for willful acts or gross negligence. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. (Art. lighting. (Coastwise Lighterage Corp. whether international or civil c. Karl Steven Co (Special Laws). Order or act of competent public authority (Art. to transport the passenger safely. signed by the shipper or owner. no. Robespierre CU (Law on Intellectual Property) . Act of the public enemy in war. destruction or deterioration of the goods. Ordinary circumstance: Exercise of 1. 1734) Valid stipulations 1. The character of the goods or defects in the packing or in the containers e. CA. That the goods are transported at the risk of the owner or shipper. Mere proof of delivery of goods to a carrier in good order and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima facie case against the carrier. Stipulation limiting liability to the value of the goods appearing in the bill of lading. 1744) 2. 1744. just and not contrary to public policy. (Art. Caso fortuito a. if it is reasonable and just under the circumstances and has been fairly and freely agreed upon. provided it be: a) In writing.1755 Civil Code Reason: As to when and how goods were Reason: The contract between the passenger damaged in transit is a matter peculiarly within and the carrier imposes on the latter the duty the knowledge of the carrier and its employees. Flood. hence the (Mirasol v. Limited liability for delay: An agreement limiting the common carrier’s liability for delay on account of strikes or riots (Art. Reduction of degree of diligence to ordinary diligence. Exercise of extraordinary extraordinary diligence (Art. (Art. 2.San Beda College of Law 58 MEMORY AID IN COMMERCIAL LAW Presumption of negligence Art. 1748) 4. unless the shipper or owner declares a greater value. v. by COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. Bon Vincent Agustin (Corporation Law). 1756) Special circumstances: 2. That carrier will not be liable for any loss. 1749) diligence Stipulation limiting liability when a passenger is carried gratuitously. Dispensing with or lessening the extraordinary responsibility of a common carrier for the safety of passengers imposed by law by stipulation. John Lemuel Gatdula (Banking Laws). Shirley Mae Tabangcura. 1750) 3. b) Supported by a valuable consideration other than the service rendered by the carriers. (Art. Dollar. 245 SCRA 796) Defenses 1. 2. 4) Void stipulations 1. by posting of notices. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). destruction or deterioration of the goods.

That the carrier’s liability for acts committed by thieves or robbers who do not act with grave or irresistible threat. Aldrich Del Rosario (Transportation Laws). 6. John Lemuel Gatdula (Banking Laws). Jose Fernando Llave (Insurance). That the carrier need not observe any diligence in the custody of the goods. That the carrier shall not be responsible for the acts or omissions of his or its employees. (Art. Robespierre CU (Law on Intellectual Property) . That the carrier shall exercise a degree of diligence less than that of a good father of a family over the movable transported. destruction or deterioration of the goods on account of the defective condition of the car.San Beda College of Law 59 MEMORY AID 3. 4. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). Bon Vincent Agustin (Corporation Law). That the carrier is not responsible for the loss. 1745) IN COMMERCIAL LAW statements on tickets or otherwise. 5. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. (Art. vehicle. Shirley Mae Tabangcura. ship or other equipment used in the contract of carriage. violence or force is dispensed with or diminished. 7. Karl Steven Co (Special Laws). 1757) COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST.

CODE OF COMMERCE A. (Zalamea vs. Culpa aquiliana (quasi-delict)  The carrier and driver are solidarily liable as joint tortfeasors. CA. 65 SCRA 237) II.E. CA.  Basis: Art.Arts. 17 SCRA 606) SPECIAL RULES ON LIABILITES OF AIRLINE CARRIERS 1. In case of flight diversion due to bad weather or other circumstances beyond the pilot’s control. An unqualified limitation of liability to an agreed valuation. Culpa criminal (criminal negligence)  The driver is primarily liable. 282 SCRA 149) 4. 1733-1753 2003 CONCURRING CAUSES OF ACTION ARISING FROM THE NEGLIGENT ACT OF THE COMMON CARRIER 1. One exempting the 1.RULES ON PASSENGERS’ BAGGAGE IN THE CUSTODY OF IN THE CUSTODY THE PASSENGERS OF THE COMMON (HAND-CARRIED) CARRIER (CHECKED-IN) Legal nature of the baggage Necessary deposit Considered as “goods” Required diligence by the common carrier Diligence of a Extraordinary depositary (ordinary diligence diligence) Applicable rules Arts.  No defense of due diligence in the selection and supervision of employees. An airline ticket providing that carriage by successive air carriers is to be regarded as a “single operation” is to make the issuing carrier liable for the tortuous conduct of the other carrier. 349-379) Applicability 1. OVERLAND TRANSPORTATION (Arts. RPC. Macondray & Company Inc. CA) LIMITATIONS AS TO CARRIER’S LIABILITY INVALID AS BEING VALID & CONTRARY TO ENFORCEABLE PUBLIC POLICY 1. 100. CA. Justice Jose Vitug. Heacock Company vs. An airline company which issued a confirmed ticket to a passenger covering successive trips on different airlines can be held liable for damages occasioned by “bumping off” by one of the successive airlines. 238 SCRA 290) 5. shipper declares a 2.  In case of injury to a passenger due to the negligence of the driver of the bus on which he is riding and of the driver of another vehicle. goods shipped where such injury or loss was caused by its own negligence. CA.)  However. NCC. The carrier should necessarily exercise extraordinary diligence in safeguarding the comfort. the relation between the carrier and the passenger continues until the latter has been landed at the port of destination and has left the carrier’s premises. CA. 228 SCRA 23) 3. 2180. Hence. Even where overbooking of passengers is allowed as a commercial practice. (KLM Royal Dutch Airlines vs.1759. An open-dated ticket constitutes a complete contract between the carrier and passenger. the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. It makes no difference that the liability of the bus driver and owner springs from contract while that of the owner and driver of the other vehicle arises from quasi-delict. (Lufthansa German Airlines vs. (Singson vs. the airline company would still be guilty of bad faith and still be liable for damages if it did not properly inform passenger that it could breach the contract of carriage even if they were confirmed passengers.  Basis: Art. The carrier is subsidiarily liable only if the driver is convicted and declared insolvent. convenience and safety of its stranded passengers until they have reached their final destination. the airline company is liable if it refused to confirm a passenger’s flight reservation. (Pandect of Commercial Law and Jurisprudence. Exception: maritime tort resulting in collision. the carrier cannot limit its liability for injury to.) . or loss of. (Fabre vs.  Defense of due diligence in the selection and supervision of employees is available. PAL. Culpa contractual (breach of contract)  Only the carrier is primarily liable and not the driver. higher value and pays a higher rate of freight (H. Domestic land and water/maritime transportation.  Basis: Art. A printed provision in the ticket limiting liability only to its own conduct is not enough to rebut that liability. 2. 1998 and 2000. NCC. (Shewaram vs. (See notes on Collision) 3. unless the its own negligence. 226 SCRA 423) 2. (Philippine Airlines vs. because there is no privity between the driver and the passenger. 1997 ed. One limiting the carrier from any and liability of the carrier all liability for loss or to an agreed damage occasioned by valuation.

Custody – One wherein the goods are already received by the carrier but the vessel indicated therein has not yet arrived in the port. On board . he is estopped from thereafter denying that he assented to such terms. 10. becomes bound by all the stipulations contained therein by making a claim for loss on the basis of said bill of lading.  Instances when the carrier may validly refuse to accept the goods include the ff: 1.  Functions: 1. 1311 (2).one in which it is stated that the goods referred to therein will be delivered to the bearer or to the order of 4. 12 SCRA 213) 2. It is not indispensable for the creation of a contract of carriage. 2004 ed. Clean – One which does not indicate any defect in the goods. or substances including dynamite and other explosives 2.) Acceptance would result in overloading 4. Receipt of cargo 4. 9. which bill of lading is honored by the second and other interested carriers who do not issue their own bills. 353) 2.) Strike . Yangco Steamship Co.) IMPORTANT CONCEPTS: 1.261)  Kinds: 1. (Notes and Cases on the Law on Transportation and Public Utilities. & Hernando.) Goods are unfit for transportation 3. 6. Best evidence of the existence of the contract of carriage of cargo (Art. Aquino. The right of a party to recover for loss of shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier. 2004 ed. springs from either a relation of agency between him and the shipper. vs.) 5. in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. (Sea-Land Services Inc. 2. Ambiguity is construed against the carrier. Negotiable . Duty to accept the goods GENERAL RULE: A common carrier cannot ordinarily refuse to carry a particular class of goods. Port – One which is issued by the carrier to whom the goods have been delivered. Domestic Air Transportation. (Compania Maritima vs.) Contrabands or illegal goods 5. and who becomes a party thereto when he demands fulfillment of that stipulation. and the vessel indicated in the bill of lading by which the goods are to be shipped is already in the port where the goods are held for shipment. 31 Phil 1). Spent – One which covers goods that already have been delivered by the carrier without a surrender of a signed copy of the bill. the contract being one of adhesion. Non-negotiable . (Fisher vs. p.issued when the goods have been actually placed aboard the ship with very reasonable expectation that the shipment is as good as on its way. although the instrument is oftentimes drawn up only by the consignor and carrier.2. R. Cesar Villanueva. (Mendoza vs.One in which it is stated that the goods referred to therein will be delivered to a specified person.) Goods will be exposed to untoward danger like flood. 3. Obligations of the carrier 3. Contract to transport and deliver goods as stipulated 5. Bill of lading 2. 3. IAC) 4. T. 8. Insurance Company of North America. Right of abandonment 4. PAL Inc. Symbol of the goods OBLIGATIONS OF THE CARRIER A. Through – One issued by the carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer.  Rules: 1. The consignee. Foul – One which contains a notation thereon indicating that the goods covered by it are in bad condition. Notice of damage 5. Received .) Goods like livestock will be exposed to disease 8. (Commercial Law Review.) Goods are injurious to health 6.) Goods sought to be transported are dangerous objects. Document of title 3. EXCEPTION: For some sufficient reason the discrimination against the traffic in such goods is reasonable and necessary. in the absence of fraud or mistake. capture by enemies and the like 7. Combined carrier agreement BILL OF LADING  The written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or to his order. or his status as stranger in whose favor some stipulation is made in said contract. 7. Acceptance of the bill of lading without dissent raises the presumption that all the terms therein where brought to the knowledge of the shipper and agreed to by him and. any person named therein. (Art.P.

action must be filed in court. Carriage of goods Notice of damage 1. Carrier remains duty bound to exercise extraordinary diligence c. 2. (Notes and Cases on the Law on Transportation and Public Utilities. Not a condition precedent precedent 2. Patent damage: shipper must file a claim against the carrier immediately upon delivery (it may be oral or written) b. date of delivery (delivered but damaged goods). 24-hour period for 2. Note: These rules does not apply to misdelivery of goods.9. it takes the risk of delivering it in good condition as when it was loaded. Condition 1. Civil One year from the Code applies. when a common carrier accepts cargo for shipment for valuable consideration. In case of delay through the fault of the carrier (Art.  If despite the notice of claim. Carriage of goods 4. 2. 363). Goods shipped are damaged  Rules: a. and 3. International/ island/coastwise overseas/foreign transportation (from foreign 2. (PHILAMGEN vs. Lim Ponzo) Purpose of notice: To inform the carrier that the shipment has been damaged. Domestic/inter-island/coastwise transportation 2. 373) GENERAL RULE: In case of a contract of . 366)  Requisites for applicability: 1. R. 3-day period for claiming latent claiming latent damage damage Prescriptive period None provided. (ART. Merely suspends and generally does not terminate the contract of carriage b. Natural disaster shall not free the carrier from responsibility (Art. COMBINED CARRIER AGREEMENT (ART. No bill of lading was issued: within 6 years 2. Water/maritime transportation 3. Land. Goods are rendered useless for sale or consumption for the purposes for which they are properly destined (Art.) transportation Note: subject to the 3. the contract limiting the common carrier’s liability cannot be availed of in case of loss or deterioration of the goods (Art. 365). If delay is without just cause. Domestic/inter. 358 Code of Commerce) Effects of delay a. or date when the vessel left port or from the date of delivery to the arrastre (nondelivery or loss). Duty to deliver the goods  Not only to transport the goods safely but to the person indicated in the bill of lading. p. CA) B. 2004 ed. Aquino. (PAL vs. Carrier is bound to fulfill the contract and is liable for any delay. Bill of lading was issued: within 10 years.1747) RIGHT OF CONSIGNEE TO ABANDON GOODS  Instances: 1. (Roldan vs. air country to Phils. Land/water/air transportation 3. Thus. water. Carrier is bound to forward them in the 1st shipment of the same or similar goods which he may make to the point of delivery. Latent damage: shipper should file a claim against the carrier within 24 hours from delivery. & Hernando. T.) Prescriptive Period  Not provided by Article 366. and to give it an opportunity to make an investigation and fix responsibility while the matter is fresh. ARTICLE 366 COGSA Sec.68)  In case of carriage by railway. 1. 371).1. Time of delivery Stipulated in Contract/Bill of Lading 1. Within a reasonable time. the carrier refuses to pay. in such absence.  However. the carrier is exempted from liability if carriage is insisted upon by the shipper. Sweetlines. Civil Code rules on prescription apply. Partial non-delivery. The goods should be delivered to the consignee or any other person to whom the bill of lading was validly transferred or negotiated. no matter from what cause it may have arisen. No stipulation 1. NOTICE OF DAMAGE (ART. and it is charged with liability therefore.  The filing of notice of claim is a condition precedent for recovery.) Failure to tender goods on time. Carriage of goods rule on Paramount Clause 2.1740) d. where the goods are useless without the others (Art. provided its objections are stated in the bill of lading.  Shorter period may be stipulated by the parties because it merely affects the shipper’s remedy and does not affect the liability of the carrier. Inc.P.3 (6) Applicability 1.

(Arts. (Pandect of Commercial Law and Jurisprudence. 585)  They are susceptible to maritime liens such as for the repair. which stands as the guaranty for their settlement. fees allowed and 2. Maritime lien and Preference of Credit 3. Accidents in maritime commerce MARITIME/ADMIRALTY LAW  It is the system of laws which particularly relates to the affairs and business of the sea. (Aboitiz Shipping Corp. Charter party 7.similar to transactions over real property with respect to effectivity against third persons which is done through registration. Real . 320 SCRA 244) CHARACTERISTICS OF MARITIME TRANSACTION 1. Jorge Miravite.254)  Maritime laws apply only to maritime trade and sea voyages. and 2) the right to retain the cargo and embargo and detention of the vessel (Luzon Stevedoring Corp v. (ICTSI vs. as well as mortgage liabilities. 217 SCRA 359). a jus in re. Salvage. 72). Aquino & Hernando. including the vessel during its contract salvage. last voyage. Crew’s wages. 1997 ed. (PNB vs. CA. wages of the 3.  The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel. They shall continue to be considered as personal property. 6106 P. 156 SCRA 169). 2. Judicial costs of 1. Hypothecary . Rivera. 3. MA RI TI ME CO M ME RC E (Arts. it shall have priority over the said mortgage lien. EXCEPTION: A combined carrier agreement where a carrier makes itself liable assuming the obligations and acquiring as well the rights and causes of action of those which preceded it. 2. (PNB vs. (Ship Mortgage Decree of 1978) MARITIME LIEN  It constitutes a present right of property in the ship. except the vessel. General average. The evidence of real nature is shown by: 1) the limitation of the liability of the agents to the actual value of the vessel and the freight money.)  Constitutes property which may be acquired and transferred by any of the means recognized by law. equipping and provisioning of the vessel in the preparation of a voyage. p. and to maritime conveyance of persons and property. Participants in maritime commerce 6.transportation of several legs. to the Government.)  Arrastre service is not maritime in character. Expenses and the proceedings. except the following following preferences in the preferences in the order stated: order stated: 1. (Rubiso vs. 5. Loans on bottomry and respondentia 8. 2002 ed. Prudential Guarantee. (Bar Review Materials in Commercial Law. (Notes and Cases on the Law on Transportation and Public Utilities. to be afterward enforced in admiralty by process in rem. Maritime liens . their crews and navigation.A.D. whether foreign or otherwise. Causes of revocation of voyage 5. 337 SCRA 381) ORDER OF PREFERENCE IN CASE OF SALE OF VESSEL R. Captain and Crew of 4. CA. in satisfaction of which a vessel may be validly arrested and sold. Justice Jose Vitug. Salaries and 2.the liability of the owner of the value of the vessel is limited to the vessel itself (Doctrine of Limited Liability). General Accident Fire and Life Assurance Corp. 573-869) IMPORTANT CONCEPTS: 1. each carrier is responsible for its particular leg in the contract. It refers to a contract for the unloading of goods from a vessel. 337 SCRA 381)  If the maritime lien arose prior to the recording of a preferred mortgage. vs. 573. citing Francisco. to ships. Doctrine of limited liability 4. 37 Phil. MERCHANT VESSEL  Vessel engaged in maritime commerce. 1521 Effectivity date 1969 1978 Applicability Overseas shipping Both domestic and only overseas shipping Kind of sale Judicial Judicial and extrajudicial Order of Preference A preferred The preferred mortgage shall have mortgage lien shall priority over all have priority over all claims against the claims against the vessel. Taxes due the costs taxed by the Philippine court and taxes due Government. CA. Merchant vessel 2.

San Diego 77 Phil 730). Art. In case of leakage of at least ¾ of the contents of a cargo containing liquids (Art. Insurance Code. Collision between two negligent vessels. the obligation is extinguished.4. CA 138 SCRA 553). and indemnity due shippers for the value of goods transported but which were not delivered to the consignee. Preferred mortgages registered prior in time. Blockade. 365). 5. (Art. 2. 2. 587 – civil liability for indemnities to third persons 2. DOCTRINE OF LIMITED LIABILITY (HYPOTHECARY RULE)  Cases where applicable: 1. 5.  Abandonment of the vessel is necessary to limit the liability of the shipowner. Interdiction of commerce – A governmental prohibition of commercial intercourse . 587). Injury or damage due to shipowner or to the concurring negligence of the shipowner and the captain. 3. and 3. bottomry loans. 4. Art. They will then be satisfied from the proceeds of the sale subject to the order of preference. destination. carrier. 3) freightage. 6. RIGHT OF ABANDONMENT SHIPOWNER OR CONSIGNEE SHIP AGENT What may be abandoned Vessel Goods shipped Instances 1. where the indemnities to third goods are useless persons (Art. CA 156 SCRA 169). 640) Terms: 1. 156 SCRA 169) The interest extends to: 1) the vessel itself. In case of civil liability from indemnities to third persons (Art. War or interdiction of commerce. The only instance were abandonment is dispensed with is when the vessel is entirely lost (Luzon Stevedoring vs. Art. without the others 2. and 7. and provisioning of food. (Art. Art. the 2. 2. arising prior in time to the recording of the preferred mortgage. Transfer of 1. and 6. (Luzon Stevedoring v. Prohibition to receive cargo at destination. 166 SCRA 183) EXCEPTIONS: 1. Goods are 3. 587). 138. Preferred mortgage registered prior in time. 687). 6. (Chua v. Partial nonliability from delivery. RIGHT OF SHIPOWNER OR SHIP AGENT TO ABANDON VESSEL  Instances: 1. In case of delay through the fault of the carrier (Art. 590 – indemnities from negligent acts of the captain (not the shipowner or ship agent) 3. and 3. Claims under Workmen’s Compensation (Abueg vs. Escano. Inability of the vessel to navigate. In case there is no total loss and the vessel is not abandoned. In case of leakage rendered useless for of at least ¾ of the sale or consumption contents of a cargo for the purposes for containing liquids which they are (Art. Embargo. 138. 4. Insurance Code). Costs of repair and equipment of the vessel. Carrier should insurer must pay the pay the shipper the insured as if there market value of the was actual total loss goods at the point of of the vessel. General average or salvage including contract salvage. 2. 2) equipments. Transfer of ownership of the ownership on the vessel from the goods from the shipowner to the shipper to the shippers or insurer. 837 – collision 4. 363). The vessel is insured (Vasquez vs. 5. In case of constructive loss of the vessel (Sec. 3. In case of (2). 643 – liability for wages of the captain and the crew and for advances made by the ship agent if the vessel is lost by shipwreck or capture GENERAL RULE: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessel is entirely lost. Sec. Effects 1.  Effect of sale: All pre-existing claims in the vessel are terminated. Expenses for repair on vessel completed before loss. IAC. 687) properly destined (Art. 371). In case of civil 1. and 4) insurance proceeds. CAUSES OF REVOCATION OF VOYAGE 1. 2. supplies and fuel during its last voyage. Damages arising out of tort.

while his possession continues. Legal capacity to contract. Technical director of the vessel. Insubordination in serious matters. 3. 611)  Duties: 1. make a new charter or insure the vessel after obtaining authorization from the shipowner or if granted in certificate of appointment. (Art. Embargo – A proclamation or order of a state. Supply. 4. From the consignee of the cargo. as far as human power can effect it. Filipino citizen.  Nature of position (3-fold character): 1. Command the crew and direct the vessel to its port of destination. c. control and management of the vessel and the consequent right to direct her navigation and receive freight earned and paid. (Art. 609)  Inherent powers: 1. Bring on board the proper certificate and documents and a copy of the Code of Commerce. i.  The terms have the same meaning. usually issued in time of war or threatened hostilities. large and overseas. 3. armament. Contract in the name of the owners with respect to repairs. Loss and damage to the goods loaded on the vessel without prejudice to their right to free themselves from liability by abandoning the vessel to the creditors. 3. and 6. Order a new voyage. subject to Art. details of equipment. 5. he may not discharge them until after the fulfillment of their contracts. 4. Habitual drunkenness. By drawing on the ship agent. Stay on board during the loading and unloading of the cargo. By sale of part of the cargo. (Art. Officers and crew of the vessel D.  Powers and functions: 1. 3. 3. Ship agent (naviero)  Person entrusted with provisioning and representing the vessel in the port in which it may be found. 4. Captains and masters of the vessel C. whether authorized or not. while on board vessel. Shipowners and ship agents B. b. Make contracts for the charter of vessel in the absence of ship agent. 605) B. CAPTAINS AND MASTERS  They are the chiefs or commanders of ships. Examine the ship before the voyage. (Art. and all that relate to the requirements of navigation. Representative of the government of the country under whose flag he navigates. 586) 2. 2. equip.  Not a mere agent under civil law. Be on deck while leaving or entering the port. By a loan on bottomry. General agent of the shipowner. 603)  If for a definite period. and provision the vessel. Impose correctional punishment on those who. Robbery. d. PARTICIPANTS IN MARITIME COMMERCE A.. All contracts of the captain. provisions of food and fuel.609. Must have passed the required physical and mental examinations required for licensing him as such. From the consignee of the vessel. 2. 587) Duty of Ship Agent to Discharge the Captain and Members of the Crew  If the seamen contract is not for a definite period or voyage. and small and coastwise. 5. but are particularly used in accordance with the size of the vessel governed and the scope of transportation. .  Qualifications: 1. Supercargoes E. 5. SHIPOWNERS AND SHIP AGENTS Shipowner (proprietario)  Person who has possession. fail to comply with his orders or are wanting in discipline. Damage caused to the vessel or to its cargo through malice or manifest or proven negligence. 2. Capacity to trade. 3. Blockade – A sort of circumvallation of a place by which all foreign connection and correspondence is. 2. except on the following grounds: a.2. to be cut off. Discharge duties of the captain. e. 2. Keep a Log Book. (Art. respectively. prohibiting the departure of ships or goods from some or all the ports of such state until further order. Pilot A. (Art. and freight of the vessel. (Art. equip and provision the vessel. also includes the shipowner. Civil Liabilities of the Shipowner And Ship Agent 1. to repair. Theft. Order repair of vessel to enable it to continue its voyage. 610)  Sources of funds to comply with the inherent powers of the captain (in successive order): 1. 4. he may discharge them at his discretion. 3. 2. he is solidarily liable with the ship owner.e. Appoint crew in the absence of ship agent. Accounting Book and Freight Book. intended to bring about an entire cessation for the time being of all trade whatever.

Damages due to non-observance of marine regulations. 3. When two or more are hired. assuming in such case their powers and responsibilities. 6. 2. where he is present and in his absence. one of them shall be the chief engineer. 3. 3. In charge of the motor apparatus. 2. 11. Follow instructions of and render an accounting to the ship agent. Sailing Mate/First Mate 2.  No liability for the following: 1. Keep the engines and boilers in good condition. 4. Engineers 4. (Art. 12. Damages due to mutinies. Arrange well the cargo. captain attempts to change it. 3. If a disease breaks out and be officially declared an epidemic in the port of destination. 618) C. Assign work to crew members. (Art. 632) Engineers  Officers of the vessel but have no authority except in matters referring to the motor apparatus. OFFICERS AND CREW 1. 3. CA). (Art. (Art.  Third in command  Duties: 1. Preserve the hull and rigging of the vessel. Discipline the crew. 4. Crew  No liability under the following circumstances: 1.6. For deviations. 2. 5. equipment. By the voyage. (Art. 8. preferring Filipinos. Losses and fines for violation of laws. Change the course of the voyage on consultation with the captain and the officers of the boat. Damages due to misuse of power. (Art. 8. following the decision of the captain in case of disagreement. . but not exceeding 1/5 of the crew. 628 631) Second Mate  Takes command of the vessel in case of the inability or disqualification of the captain and the sailing mate.  Hired by the ship agent. 2. Keep the Binnacle Book. If. 2. health. 4. Not to change or repair the engine without authority of the captain. 5. 4. (Arts. 612)  A ship’s captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage (Inter-Orient Maritime Enterprises Inc. if laid up. 627)  Duties: 1. 10. or the ship’s company. spare parts. Hold in custody properties left by deceased passengers and crew members. Observe rules to avoid collision. 7. and other instruments pertaining to the engines. Inventory the rigging and equipment of the vessel. If the vessel should change owner or captain. 647) Sailing Mate/First Mate  Second chief of the vessel who takes the place of the captain in case of absence. Responsible for all the damages caused to the vessel and the cargo by reason of his negligence. 6. sickness. or death and shall assume all of his duties.  Duties: 1. Provide himself with maps and charts with astronomical tables necessary for the discharge of his duties. Inform the captain of any damage to the motor apparatus. or a naval war with the power to which the vessel was destined occurs. 2. Second Mate 3. Damages caused to the vessel or to the cargo by force majeure. Obligations contracted for the repair. etc. before beginning voyage. and in their absence. 634) Classes of Seaman’s Contracts 1. and provisioning of the vessel unless he has expressly bound himself personally or has signed a bill of exchange or promissory note in his name. Protest arrivals under stress and in case of shipwreck. he may take in foreigners. at the port of arrival. Keep an Engine Book. (Art. (Art. Damages to vessel and to cargo due to lack of skill and negligence. Supervise all personnel maintaining the engine. the captain hires them. 632) Crew  The aggregate of seamen who man a ship. 9. powers and responsibilities. 7. 5. Leave the vessel last in case of wreck. Comply with the requirements of customs. Thefts and robberies of the crew. For arrivals under stress. Demand a pilot while entering or leaving a port. 620) Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain towards Passengers and Cargoes 1. vs.

D. 226 SCRA 476)  Parties: 1. Accident caused by force majeure or natural calamity provided the pilot exercised prudence and extra diligence to prevent or minimize damages. Loan on bottomry 5. if on voyage in c. Habitual drunkenness. Charterer  Classes: 1. (Art. By the month. if by shares . want of discipline.half of amount if death occurs on voyage out. the sailing mates. if captured in defense of vessel . Desertion. possession and consequent control over the vessel’s navigation. 4.full payment. & Hernando. compensation up to time of death if engaged on wage b. full. the master does not surrender his vessel to the pilot and the pilot is not the master. 3. thus including the crew. EXCEPT: 1.11. Bill of lading 3. . 5. 3.  A contract by which an entire ship. (Art. Perpetration of a crime. 2.  Compulsory Pilotage – States possessing harbors have enacted laws or promulgated rules requiring vessels approaching their ports to take on board pilots licensed under the local laws. Countermand or overrule by the master of the vessel in which case the registered owner of the vessel is liable. or some principal part thereof is let/leased by the owner to another person for a specified time or use. from the captain to the cabin boy. The charterer is liable as if he were the owner. Ship owner or ship agent 2. Inc. and full. 4.full payment. 6. if after departure 2. 645) Complement of the Vessel  All persons on board.wages up to the date of the capture. necessary for the management. to conduct a vessel into or out of ports. and licensed. or from a port. p. Charter party 2. Marine insurance CHARTER PARTY  A contract by virtue of which the owner or agent binds himself to transport merchandise or persons for a fixed price. or in certain waters. who thereby become the charter’s servants. T. Because the charterer is treated as owner pro hac vice.none. PILOT  A person duly qualified. 2. The shipowner leases to the charterer the whole vessel.  Does not include the passengers or the persons whom the vessel is transporting. and By share of profits or freightage.  While in exercising his functions a pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of the ship.P. except when the cause arises from the unworthiness of the vessel.  The charterer becomes the owner of the vessel pro hac vice. and service. Loan on respondentia 6.  The term generally connotes a person taken on board at a particular place for the purpose of conducting a ship through a river. if captured due to carelessness . Aquino. 649) E. R. (Planters Products. if by voyage . vs.2. engineers. SUPERCARGOES  Persons who discharges administrative duties assigned to him by ship agent or shippers. 3. There are occasions when the master may and should interfere and even displace the pilot. (Sec. Art. keeping an account and record of transaction as required in the accounting book of the captain. food and fuel. if before departure. 518) Liablity of Pilot GENERAL RULE: On compulsory pilotage grounds. CA. if death is due to defense of vessel . maneuvers. Repeated insubordination. 2004 ed. stokers and other employees on board not having specific designations. (Notes and Cases on the Law on Transportation and Public Utilities. the Harbor Pilot is responsible for damage to a vessel or to life or property due to his negligence. Bareboat or demise – The charterer provides crew. Contract of transportation of passengers on sea voyages 4. Physical incapacity.III PPA Admin Order 03-85) SPECIAL CONTRACTS OF MARITIME COMMERCE 1. transferring to the latter the entire command. including the master and the crew.  Master pro hac vice for the time being in the command and navigation of the ship. CA). Just Causes for the Discharge of Seaman While Contract Subsists 1. 637) Rules in case of Death of a Seaman  The seaman’s heirs are entitled to payment as follows: 1. Repeated incapacity and negligence. (Art. as when the pilot is obviously incompetent or intoxicated (Far Eastern Shipping Company vs. road or channel. just for that one particular purpose only. If death is natural: a. It transforms a common carrier into a private carrier.

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

2. (Arts. to bring cargo to nearest neutral port in case of war or blockade. 2. .O. contract or otherwise. 2. then to the extent thereof the provision of the bill of lading is void. If the vessel is chartered wholly. 4. Arrival at a port for repairs. 669678) CHARTERER 1. 3. insurance and freight.A stipulation in a charter party that in case of a maritime accident for which the shipowner is not responsible by law. 5.S. To pay losses to others for loading uncontracted cargo and illicit cargo. is a violation of contract and infringement of right of shipper and subjects . 5. 2.) A clause in a charter party providing that the COGSA shall apply. and paying half of the freightage. .free alongside ship. not to accept cargo from others. To observe represented capacity. 3. 690) 1. Blockade. To pay the agreed charter price. 5. without the cargo being placed alongside the vessel. 2. Primage . Sale by the owner of the vessel before loading by the charterer. F. Justice Jose Vitug. USUAL FORMS OF CONSUMMATING CONTRACTS 1. F. enemies or bad weather. . 3. on board. By abandoning the charter 1. 3. To pay expenses for deviation. consignees or owners shall contribute with the shipowner in general average. 2. 689) 1. 1997 ed. Error in tonnage or flag. but rather on the fact of actual physical transfer of cargo from one vessel to another. Lay Days . Prohibition to receive cargo. War or interdiction of commerce. (Arts. To place in a vessel in a condition to navigate. the cargo shippers. (Pandect of Commercial Law and Jurisprudence. and 4. 3. however competent and safe the vessel into which the transfer is made. Embargo. and 5.I. 679-687) Rescission of a Charter Party At At charterer’s shipowner’ request s request (Art 688) (Art. Failure to place the vessel at the charterer’s disposal. 6. To unload cargo clandestinely placed 4. 4. 4. Terms: 1. Return of the vessel due to pirates. or the transfer of goods from the vessel stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached. 4.  It is not dependent on the ownership of the transporting ship s or in the change of carriers. To wait if the vessel needs repair.cost and freight. Justice Jose Vitug. or the transfer for further transportation from one ship or conveyance to another. 5. To leave the port if the charterer does not bring the cargo within the lay days and extra lay days allowed. even though the transportation is domestic.  If done without legal excuse. Extra Lay Days – days which follow after the lay days have elapsed. 1997 ed. C. To substitute another vessel if load is less than 3/5 of capacity. If the extra lay days terminate Fortuitous causes (Art. TRANSSHIPMENT OF GOODS  The act of taking cargo out of one ship and loading it in another. (Pandect of Commercial Law and Jurisprudence. subject to the extent that any term of the bill of lading is repugnant to the COGSA or applicable law. C. 2. To pay freightage on unboarded cargo.) Rights and Obligations of Parties SHIPOWNER OR SHIP AGENT 1.A.bonus to be paid to the captain after the successful voyage. Demurrage – the sum fixed in the charter party as a remuneration to the owner of the ship for the detention of his vessel beyond the number of days allowed by the charter party for loading or unloading or for sailing. Inability of the vessel to navigate. 3.days allowed to charter parties for loading and unloading the cargo. – cost.F. Deadfreight – the amount paid by or recoverable from a charterer of a ship for the portion of the ship’s capacity the latter contracted for but failed to occupy. & F.

Time for repayment. the obligation of the insurer becomes absolute Consensual contract LOAN ON BOTTOMRY OR RESPONDENTIA Indemnity is paid in advance by way of a loan In case of loss of the vessel due to a marine peril. Voyage during which the risk is run (Art. by virtue of which one person lends to another a certain amount of money or goods on things exposed to maritime risks. 720) Contents: 1. Kind. Loss due to the fault or malice of the borrower. and which is lost if the latter are lost. Outside of the cargo.carrier to liability if freight is lost event by cause otherwise excepted. with its earnings. Forms: 1. name and registry of the vessel. and if it is proven that the goods were on board. the obligation of the borrower to pay is extinguished Real contract Hypothecary Nature of Bottomry/ Respondentia GENERAL RULE: The obligation of the borrower to pay the loan is extinguished if the goods given as security are absolutely lost by reason of an accident of the sea. (ART. Full amount of the loan is not used for the cargo or given on the goods if all of them could not have been loaded. 4. Exposure of security to marine peril. 6. Private instrument (Art. 3. 2. which amount. 3. (ART. surnames and domiciles of the borrower and the lender. 201 SCRA 102) LOAN ON BOTTOMRY AND RESPONDENTIA  A real. (Art. (CB Circular 905) MARINE INSURANCE Indemnity is paid after the loss has occurred In case of loss of the vessel due to a risk insured against. If the effects on which the money is taken is not subjected to any risk. by vessel itself and and repayable upon repayable upon safe arrival of cargo arrival of vessel at at destination.727) 3. EXCEPTIONS: 1. Public instrument 2. aleatory contract. Obligation of the debtor conditioned only upon safe arrival of the security at the point of destination. Common elements: 1. 719) 719) Who may contract Shipowner or ship Only the owner of agent. whether ordinary or maritime. and . may agree on any rate of interest. Lender loaned an amount larger than the value of the object due to fraudulent means employed by the borrower. CA. Loss due to the barratry on the part of the captain. destination. 2. 7. The vessel was engaged in contraband. (Art. 4. unilateral. LOAN ON BOTTOMRY LOAN ON RESPONDENTIA Definition Loan made by Loan taken on shipowner or ship security of the cargo agent guaranteed laden on a vessel. 2. Goods pledged to secure repayment. (Magellan Manufacturing vs.729) Note: Under existing laws. 5. Amount of the loan and the premium stipulated. the balance will be considered a simple loan. the residence of the owners the captain. Policy signed by the contracting parties and the broker taking part therein 3.721) BOTTOMRY/ RESPONDENTIA Not subject to Usury Law ORDINARY LOAN (MUTUUM) Subject Law to Usury Liability of the borrower is contingent on the safe arrival of the vessel or cargo at destination Not subject to any contingency (absolute liability) The last lender is a preferred creditor The first lender is a preferred creditor WHEN LOAN ON BOTTOMRY OR RESPONDENTIA REGARDED AS SIMPLE LOAN 1. Names. surname and domicile of the captain. the parties to a loan. during the voyage designated. Loss due to inherent defect.726) 2. (ART. Name. is to be returned if the things are safely transported.

it is general average. and to the cargo from the port of loading to the port of consignment. success. it is particular average. 809 Art. vessel or both. (Art. 1955) PARTICULAR OR SIMPLE GROSS OR GENERAL Definition Damages or expenses Damages or caused to the vessel expenses or cargo that did not deliberately caused inure to the common in order to save the benefit. The same rule would apply to the hypothecation of the cargo by respondentia. within 24 hours from arrival. Resolution of the captain 3. 810) occurrence of the average shall contribute to satisfy this average. (A. Not only is there absence of a marine peril.  Expenses incurred to refloat a vessel. both from real and (Art. deliberate sacrifice. Entry of the resolution in the logbook 4. Gross or General Average  Where both vessel and cargo are saved. Justice Jose Vitug. common safety factor. Particular or Simple Average 2. Collision 4. (Sec. 809) known risk. 3. Magsaysay. since a loan on bottomry partakes of the nature likewise of an insurance coverage to the extent of the loan accommodation. and deliberateness. 2. Assembly and deliberation 2. Agan. 4. proper formalities and legal steps. L-6393. in order to continue its voyage. (Art. Shipwreck AVERAGE  An extraordinary or accidental expense incurred during the voyage in order to preserve the cargo. Detailed minutes 5. (Art. (Art. . which constitutes the true foundation of general average. Inc.5. vs. (Pandect of Commercial Law and Jurisprudence.732). Concurrence of Marine Insurance and Loan on Bottomry/Respondentia 1. Liability The owner of the All the persons goods which gave having an interest in rise to the expense or the vessel and the suffered the damage cargo therein at the shall bear this time of the average. G. It is the safety of the property.  Classes: 1. Number of interests involved Only one interest Several interests involved involved Share in the damage or expense 100% share In proportion to the value of the owner’s property saved Right to recover No reimbursement There may be reimbursement Kinds (not exclusive) Art. (Art. Insurance Code) 2.No. 735) Note: If a vessel is hypothecated by bottomry only the excess is insurable. which accidentally ran aground. do not constitute general average. The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of the value over the amount secured by bottomry.R. its cargo or respective owners. 31. Averages 2.) ACCIDENTS IN MARITIME COMMERCE 1. 812)  The insurers (Art. 811) Requisites 1.859) and lenders on bottomry and respondentia shall likewise contribute. Delivery of the minutes to the maritime judicial authority of the first port. 811 Procedure for recovery 1. (Art. and not the voyage. and borne by vessel. Arrival Under Stress 3. and all damages or deterioration suffered by the vessel from departure to the port of destination. 1997 ed. Jan. The cargo loaded on the vessel be different in from that agreed upon. 101. 806)  The person whose property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes general average. The value of what may be saved in case of shipwreck shall be divided between the lender and the insurer in proportion to the interest of each one. common danger. where only the vessel or only the cargo is saved.

)  In order that the jettisoned goods may be included in the gross or general average. (Art. 821)  It is the duty of the captain to continue the voyage without delay after the cause of the arrival under stress has ceased failing in such duty renders him liable. (Art. the existence of the cargo on board should be proven by means of the bill of lading. 2. Fuel for the vessel if there is more than sufficient fuel for the voyage. York-Antwerp Rule) Jettison  Act of throwing cargo overboard in order to lighten the vessel. Justice Jose Vitug. it must always contribute to general average. Deck cargo is allowed only in domestic/coastwise/inter-island shipping. Ratification by captain under oath. there must first be an assembly before departure. and 4. well-founded fear of seizure. pirates. If deck cargo is loaded with the consent of the shipper on overseas trade.6. . 825)  Steps: 1. Defect of vessel due to improper repair. In overseas shipping. (Art. lack of foresight or skill of captain. the vessel is exposed for many days to perils of the sea. If deck cargo is loaded with the consent of the shipper on coastwise shipping. Those which are below the upper deck. negligence. The officers shall determine and agree if there is well-founded reason after examining the circumstances. privateers and other valid grounds. 1997 ed. Malice. Objections and protests shall likewise be entered in the minutes. (Pandect of Commercial Law and Jurisprudence. Goods not recorded in the books or records of the vessel. Captain should determine during the voyage if there is well founded fear of seizure. Risk of enemy not well known or manifest 3. (Arts. privateers. 5. 819) 1. in case the cause has been risk of enemies. (Art. COLLISION  Impact of two vessels both of which are moving. Lack of provisions due to negligence to carry according to usage and customs. The agreement shall be drafted and the proper minutes shall be signed and entered in the log book. 2. 4. it would not be entitled to reimbursement because there is violation of the Y-A Rules. 820) The shipowner or ship agent is liable in case of unlawful arrival under stress. (Rule IX. However. Those which are on the deck. (ART.855 (2)) 3. 2. (Art. or accidents of the sea disabling it to navigate. 2. Captain shall assemble the officers and summon the persons interested in the cargo who may attend the meeting but without a right to vote.  Order of goods to be cast overboard: 1. it must always contribute to general average and if jettisoned would be entitled to reimbursement. 813-814) GOODS NOT COVERED BY GENERAL AVERAGE EVEN IF SACRIFICED 1.  Reason: In domestic shipping. Goods carried on deck. 3. if during the voyage the vessel cannot continue the trip to the port of destination. voyages are usually short and the seas are generally not rough.855) 2. 816) York-Antwerp (Y-A) Rules on Determining Liability for Averages With Regard To Deck Cargo 1. and is prohibited in international/overseas/foreign shipping. 3. preferring the heaviest one with the least utility and value. The captain shall have the deciding vote. DOMESTIC Deck cargo is allowed INTERNATIONAL Deck cargo is not allowed With shipper’s consent General average Particular average Without shipper’s consent Captain is liable Captain is liable ARRIVAL UNDER STRESS (ARRIBADA)  The arrival of a vessel at the nearest and most convenient port instead of the port of destination. (ART. but should the same be jettisoned. When lawful When unlawful Who bears expenses: The inability to continue voyage is due to lack of provisions. But they shall not be liable for the damages caused by reason of a lawful arrival. (Art. beginning with the one with greatest weight and smallest value. 815)  Jettisoned goods are not res nullius nor deemed “abandoned” within the meaning of civil law so as to be the object of occupation by salvage.

Vessel at fault not known  Each vessel must bear its own loss. 826) 2. 827) 3. It is in this zone that vessels must strictly observe nautical rules. CA) Nautical Rules as to Sailing Vessel and Steamship 1. (Smith Bell v. CA)  Even if the cause of action against the common carrier is based on quasi-delict. 3. There is a presumption against a vessel which has no buoys to indicate the location of its anchors to prevent damage to vessels which may approach it. When two vessels meet. 7. even when the crew of the latter has received word to lift anchor. the steamship from the moment the sailing vessel is seen. The sailing vessel is required to keep her course unless the circumstances require otherwise. 2. 4..  No rule is as yet applicable for none is necessary. Vessels must have “proper look-outs” or persons trained as such and who have no other duty aside therefrom. Third zone – time when collision is certain and time of impact. It is not a civil tort governed by the Civil Code but a maritime one governed by Arts. Each bears its own loss. When two vessels are about to enter a port. unless a departure therefrom becomes necessary to avoid imminent danger.sudden movement made by a faultless vessel during the third zone of collision with another vessel which is at fault during the 2nd zone.  Error in Extremis . the fault is presumed to be imputable to the one who arrived later. CA.  An error in this zone would no longer be legally consequential. or navigational aid.  It is in this period where conduct of the vessels is primordial. or on intersecting lines.Allision  Impact between a moving vessel and a stationary one. both vessels bear their respective damage. but the shippers of both vessels may go against the shipowners who will be solidarily liable. 2. Both vessels at fault  Each vessel must bear its own loss. no responsibility will fall on said faultless vessel. when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason. One vessel at fault  Vessel at fault is liable for damage caused to innocent vessel as well as damages suffered by the owners of cargo of both vessels. (Manila Steamship vs. Fortuitous event/force majeure  No liability. Where a steamship and a sailing vessel are approaching each other from opposite directions. 26 PHIL 632) Cases Covered By Collision and Allision 1. There is a presumption against the vessel with spread sails which collides with another which is at anchor and cannot move. dock. Third vessel at fault  The third vessel will be liable for losses and damages. 6. 4. the smaller should give the right of way to the larger one. (Far Eastern Shipping v. such as a bridge post. the defense of due diligence in the selection and supervision of employees is unavailing in case of a maritime tort resulting in collision. Nautical Rules to Determine Negligence 1. 5. shall watch with the highest diligence her course and movements so as to be able to adopt such timely means of precaution as will necessarily prevent the two boats from coming in contact. Baco River Plantation Co. if they collide. There is a presumption against the vessel which sets sail in the night. (Art. Insa Abdulhaman)  Doctrine of Last Clear Chance and Rule on Contributory Negligence cannot be applied in collision cases because of Art. the farther one must allow the nearer to enter first. (Art. Even if such sudden movement is wrong. A vessel leaving port should leave the way clear for another which may be entering the same port. The vessel which leaves later is presumed to have collided against one which has left earlier. (Urrutia and Co. 2. 828)  Doctrine of Inscrutable Fault – In case of collision where it cannot be determined which between the two vessels was at fault. First zone – all time up to the moment when risk of collision begins. Luzon Stevedoring vs. (Art. v. 830)  The doctrine of res ipsa loquitur applies in case a moving vessel strikes a stationary object. but both should be solidarily liable for damage to the cargo of both vessels. 3. 9. (Art. Zones of Time in the Collision of Vessels 1.827 of the Code . 8. 826-839 of the Code of Commerce. unless it can be proved that there was no fault on its part. Second zone – time between moment when risk of collision begins and moment it becomes a practical certainty. (Art. 831) 5. but the shippers of both vessels may go against the shipowners who will be solidarily liable. There is a presumption against an improperly moored vessel.

Home Assurance) Note: In order to attribute to the carrier any damage to the shipment that may be found. (Commercial Law Review. 612(15). Comm. & Hernando. It occurs when the vessel sustains injuries due to a marine peril rendering her incapable of navigation. (Anglo-Fil Trading Corp. C. or to a barge.  It can be applied in domestic sea transportation if agreed upon by the parties. which will then deliver the cargo to the importer. or running against an object in sea or on the coast. he cannot unload and deliver the cargo by himself. Reyma Brokerage v. the term consists of the handling of cargo from the hold of the ship to the dock. need not be protested. R. for the carriage of goods. overseas/international/foreign (from foreign port to Philippine port). The carrier does not participate in the counting of the merchandise for loading into the container. CARRIAGE OF GOODS BY SEA ACT/COGSA (C. 2. (Art. Manila Railroad) 2. seals the container and delivers it to the carrier for transportation. 836)  Cases applicable: 1. 841)  The rules on collision or allision. if the collision took place abroad. C. Inc.P. (Art. in case of unloading at sea. 612(8)).)  Significance: When a person brings in cargo from abroad. 4. Phil. (Art. 3. 2004 ed. Lazaro)  The loading on the ship of outgoing cargo is also part of stevedoring work. 2004 ed.) MARITIME PROTEST  Condition precedent or prerequisite to recovery of damages arising from collisions and other maritime accidents. Prince Line) 3.) STEVEDORING SERVICE  The carriage of goods from the warehouse or pier to the holds of the vessel. negligence or lack of skill of the captain.)  Nature of business: It is a public utility.of Commerce. CA) III. and the sealing of the container. (US Lines vs.  If the wreck was due to malice. description and conditions of the cargo inside the container is the sole responsibility of the shipper. (Clause paramount or paramount clause) . and 3. Villanueva. with respect to the circumstances attending such occurrence. (Bankers vs. 2004 ed. as may be pertinent.  Applicability: Overseas trade only. Collision (Art.  Liability: 1. Shipwrecks (Arts.  Excuses for not filing protest: 1) where the interested person is not on board the vessel. Of Customs. the owner of the vessel may demand indemnity from said captain. can equally apply to shipwrecks. Comm. Similar to a common carrier (Northern Motors v. Similar to a warehouseman (Lua Kian v. in case of pier-side unloading.A. vs. 624). (US Lines v. No. 835) SHIPWRECK  It is the loss of the vessel at sea as a consequence of its grounding. ICTSI v. Razon. 843). 835). Aquino. 65) APPLICABILITY  The transportation must be: 1. Water/maritime transportation. Villanueva. The unloading must be done by the arrastre operator. (Chief of Staff vs.  Before whom made: competent authority at the point of collision or at the first port of arrival. the consignee must prove that the damage was due to the negligence and while the goods are in the custody of the arrastre operator. inspection of the goods should be done at pierside. Where the vessel has gone through a hurricane or when the captain believes that the cargo has suffered damages or averages (Art. Solidary liability with the common carrier Note: In order that the arrastre operator may be held liable. SPECIAL CONCEPTS ARRASTRE SERVICE  A contract for the unloading of goods from a vessel. 2. Of Customs. (Ibid.) CONTAINERIZATION/ “SAID-TO-CONTAIN”/ “SHIPPER’S LOAD AND COUNT” SYSTEM  System whereby the shipper loads his cargoes in a specially designed container. E. CIR)  As understood in the port business.  It is a written statement made under oath by the captain of a vessel after the occurrence of an accident or disaster in which the vessel or cargo is lost or damaged. (Hartford Fire Insurance v. unless there is stipulation to the contrary. T. Prudential Guarantee)  The matter of quantity. for the purpose of recovering losses and damages. (Notes and Cases on the Law on Transportation and Public Utilities. (Commercial Law Review. the actual loading. Arrival under stress (Art. discharging functions which are heavily invested with public interest.  Who makes: Captain  When made: within 24 hours from the time the collision took place. and 2) on collision time. if in the Philippines and to the Philippine consul.

IMPORTANT CONCEPTS: 1. WARSAW CONVENTION OF 1929 (WC) PURPOSE: To protect the emerging air transportation industry and to secure the uniformity of recovery by the passengers. Alejandro. Latent damage: shipper should file a claim with the carrier within three days from delivery. vs. vs. (Art. Lines Ltd. and 3. Inc. PRESCRIPTIVE PERIOD  Action for loss or damage to the cargo should be brought within one year after: a. The filing of an action in court until it is dismissed. In such instance the. (Fil. Air way bill .SCRA 359)  The insurer exercising its right of subrogation is bound by the one-year prescriptive period.  International transportation any transportation in which the place of departure and the place of destination are situated either: 1. Merchants Ins. Civil Code rules on prescription shall apply.. (Ang vs. and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty. if it has been regarded by the parties as a single operation. Carriage of passengers. even though that power is not a party to the Convention.) and damage arising from delay or late delivery (Mitsui O. vs.  The WC shall also apply to fortuitous transportation by aircraft performed by an air transportation enterprise. 2. mandate. (Eastern Shipping vs.S. International transportation.  The one-year prescriptive period is suspended by: 1. When public policy is contradicted.. vs. suzerainty. Prescriptive period AMOUNT OF CARRIER’S LIABILITY  Under the Sec. Transportation documents a. American Steamship Agencies Inc. IAC. or 2. it does not apply to the claim against the insurer for the insurance proceeds. vs. Delivery of the goods (delivered but damaged goods). gone out of commerce. Maritime Co. (“round trip”. (Dole Phils. The express agreement of the parties (Universal Shipping Lines. Notice of damage 3. 1749. or disappeared in such a way that their existence is unknown or they cannot be recovered. Patent damage: shipper should file a claim with the carrier immediately upon delivery b. Within the territory of a single High Contracting Party. Note: The filing of a notice of claim is not a condition precedent. (Stevens & Co. Mayer Steel Pipe Corp. mandate or authority of another power. or authority of the same High Contracting Party. Amount of carrier’s liability 2. 3[6])  “Loss or Damage” as applied to the COGSA contemplates a situation where no delivery at all was made by the shipper of the goods because the same had perished. 6 SCRA 180)  The one-year period shall run from delivery of the last package and is not suspended by extrajudicial demand. Am. Thus. IAC. Passenger ticket b. 150 SCRA 463)  Note that Art.Inc. The date when the goods should have been delivered (non-delivery). or b. 188 SCRA 170) 2. However.)  Transportation to be performed by several successive air carriers shall be deemed to be one undivided transportation. 2.3) WHEN INAPPLICABLE 1. Air transportation. Co. APPLICABILITY  The transportation must be: 1. the liability limit is set at $500 per package or customary freight unit unless the nature and value of such goods is declared by the shipper.IMPORTANT FEATURES: 1. This is deemed incorporated in the bill of lading even if not mentioned in it. CA).148 SCRA 118)  The one-year period shall run from delivery to the arrastre operator and not to the consignee. vs. NCC applies to domestic/inter-island/coastwise trade. 1 Sec.K. Baggage check c. whether it has been agreed upon under the form of a single contract or of a series of contracts. 4(5).. Inc. 3(6))  Rules: a. Manila Railroad Co. baggage or goods. vs. if there is an agreed stopping place within a territory subject to the sovereignty. If the requirements under the Convention are not complied with. Jur. Nordeutscher Lloyd. (Union Carbide Phils. CA) IV. Within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or transshipment. (Sec. it is inapplicable in case of misdelivery or conversion. NOTICE OF DAMAGE (SEC.

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

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

If sold (no claim being made within 3 months from publication). The reward should constitute a sufficient compensation for the outlay and effort of the salvors and should be liberal enough to offer an inducement to others to render services in similar emergencies in the future. whether such person or company has held himself or itself out as ready to serve the public or a portion of the public generally. the reward shall be distributed as follows: a. Radio companies. 5. 11-12) 4. 50% to the shipowner. communication and similar public services. (Luzon Stevedoring vs. PSC) NOTE: The Public Service Commission created under the Public Service Law has already been abolished under P. after deducting expenses and the salvage claim. (Sec. To secure adequate. 6.SALVAGE TOWAGE Governed by special law (Act No. 2616) Governed by Civil Code on contract of lease Requires success. manages or controls in the Philippines for hire or compensation. Animal drawn vehicles and bancas moved by oar or sail. 3. and 7. operates. To prevent ruinous competition. is not a salvage service. 4. 2. (Sec. To protect the public against unreasonable charges and poor. and the other half to the government. ice plants. 4. (Secs. CERTIFICATE OF PUBLIC CONVENIENCE (CPC) CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY (CPCN) . shall go to the owner. 50% of the said proceeds shall go to the salvors. except for rates fixing. EXCEPTIONS: 1. 13)  Taking passengers from a sinking ship. if the latter does not claim it within 3 years. If a vessel is the salvor. except for the fixing of maximum rates for fare and freight. and MIA. Public services owned or operated by the government. VI. b. being a duty of humanity and not for reward. To protect and secure investments in public services. No.A.D. ATO. with general or limited clientele. 3. whether permanent. Public markets. LTFRB. AUTHORITY TO OPERATE PUBLIC SERVICES GENERAL RULE: No public service shall operate without having been issued a certificate of public convenience or a certificate of public convenience and necessity. 9) 2. Warehouses. and done for general business purposes. PUBLIC SERVICE  A person who owns. 13b. any common carrier or public utility. CA 146)  A casual or incidental service devoid of public character and interest is not brought within the category. NWRC. and c. ERB. The question depends on such factors as the extent of services. It has been replaced by the following government agencies: LTO. occasional or accidental. No. power and water supplies. 2. 1 and other issuances. BOE. sustained service for the public at the least possible cost. who shall divide it equitably. CAB. otherwise no payment Success required Must be done with the consent of the captain/crewmen Only the consent of the tugboat owner is needed Vessel must be involved in an accident Vessel need not be involved in an accident Fees distributed among crewmen Fees belong to the tugboat owner is not RULES ON SALVAGE REWARD 1. 3. inefficient service. without rendering any service in rescuing the vessel. 25% to the officers and crew in proportion to their salaries. NTC. except as to rates fixing. (Sec. Ice plants. PUBLIC SERVICE ACT (C. Airships. NEA. The reward is fixed by the RTC judge in the absence of agreement or where the latter is excessive. the proceeds. 25% to the captain. 146) PURPOSES: 1.

Applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest on a proper and suitable manner. Sell. Establish and maintain individual or joint rates. and charges. 207 SCRA 343. Villegas. certificates or franchise. Engagement in public service business without first securing the proper certificate. POWERS REQUIRING PRIOR NOTICE AND HEARING POWERS EXERCISABLE WITHOUT PRIOR NOTICE AND HEARING 1. CA. Valuation of properties of public utilities. 2. e. 2. (Luque vs. (Soriano v. 5. corporation or entity as determined by the proper authority. may be negotiated and completed before the approval by the proper authority. 6. 164 SCRA 36) operators to furnish safe. 6. Establish and operate new units. a suspension not more than 30 days may be ordered. tolls. UNLAWFUL ACTS OF PUBLIC UTILITY COMPANIES 1. Raymundo vs. No. Investigation any matter concerning public service. Committing any act of unreasonable and unjust preferential treatment to any particular person. Capitalize any franchise in excess of the amount actually paid to the Government. 6. 8. e. 3. Issuance of CPC or CPCN. Issue free tickets. Its . improper or inadequate service as determined by the proper authority. confers no property right. 4. 3. Medina.g. 18 and 19) ACTS REQUIRING PRIOR APPROVAL 1. Setting up of 1. mortgage or lease property. vs. Refusing or neglecting to carry public mail upon request. 7. Revocation.A. 2. 7. 4. Examination and test of measuring appliances. common carriers. 30 SCRA 408)  It is a “property” and has a considerable value and can be the subject of sale or attachment. Suspension of CPC or CPCN. Revocation of this certificate deprives him of no vested right. (Secs. Issuance of orders requiring establishment or maintenance of extension of facilities. or even revocation or annulment thereof is reserved to the State. Requiring public services to pay expenses of investigation. adequate. and proper service. 2. The holder of said certificate does not acquire a property right in the route covered thereby. New and additional burdens. 3. (Cogeo-Cubao Operators and Drivers Assn. 3.An authorization issued by the appropriate government agency for the operation of public services for which no franchise.g. the sale. Issue any stock or stock certificates representing an increase of capital. 20(g) of C. 5. Grant of special permits to make extra or special trips in territories specified in the certificate. telephone and other services. etc. 4. alienate. alteration of the certificate. either municipal or legislative. Requiring standards and classifications. or modification of CPC or CPCN. Providing or maintaining unsafe. Applicant must prove public necessity. is required by law. Establishment of rules to secure accuracy of all meters and all measuring appliances. Applicant must have sufficient financial capability to undertake the proposed services and meeting the responsibilities incident to its operation. Compelling compliance with the laws and regulations. 2. 4. in which case. Nor does it confer upon the holder any proprietary right or interest or franchise in the public highways. 4. An authorization issued by the appropriate government agency for the operation of public service for which a prior franchise is required by law. Uniform accounting system and furnishing of annual reports. Luneta Motor Co.) REQUREMENTS FOR GRANTING CPC OR CPCN 1. Fixing of rates. except when it is necessary to avoid serious and irreparable damage or inconvenience to the public or private interest.  A CPC or a CPCN constitutes neither a franchise nor a contract. Applicant must be a citizen of the Philippines or a corporation or entity 60% of the capital of which is owned by such citizens. prior to the hearing. 146. 3.  Under Sec.. and is a mere license or a privilege. 5.

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

(Zamboanga Transportation Co. both being in pari delicto. (Teja Marketing vs. CA) . vs. both the registered owner and the actual owner are jointly and severally liable with the driver. 5.4. IAC) For the better protection of the public. The registered owner cannot recover from the actual owner and the latter cannot obtain transfer of the vehicle to himself.