Professional Documents
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Transportation and Public Utilities Law PDF
Transportation and Public Utilities Law PDF
1.
3.
4.
Shipper the person who delivers the goods to the carrier for transportation;
pays the consideration or on whose behalf payment is made
1.
Contract of Affreightment
involves the use of shipping space on vessels leased by
the owner in part or as a whole, to carry goods for
another
CC = observe extraordinary diligence; in case of loss,
deterioration or destruction of goods of goods, CCs are
presumed to be at fault or have acted negligently
2 types
i. Time charter: vessel is leased to the charterer
for a fixed period of time
ii. Voyage charter: ship is leased for a single
voyage
2.
Consignee person to whom the goods are to be delivered. May be the shipper
himself or a third person who is not actually a party to the contract
Perfection:
> contract to carry goods consensual
> contract of carriage - act of delivery of goods ( goods are unconditionally
placed in the possession and control of the carrier and upon their receipt by the
carrier for transportation)
CARRIER:
Common carriers (CC) (1732)
Page 1
Law applicable
o
Common Civil Code
o
Private contract
Diligence required
o
Common extraordinary diligence
o
Private diligence of a good father of a family
Arrastre
-
Stevedoring
involves the loading and unloading of coastwise vessels calling at
the port.
>>> Common carriers are public utilities, impressed with public interest and
concern subject to regulation by the state.
GOVERNING LAWS
read summary of rules on page 40 of book
Article 1766 (Civil Code). In all matters not regulated by this Code, the
rights and obligations of common carriers shall be governed by the Code
of Commerce and by special laws.
NATURE OF BUSINESS
Common Carriers exercise a sort of public office
Consequently, common carriers are subject to regulation by the
State
REGISTERED OWNER RULE/REGISTRATION LAWS
Governed by the Land Transportation and Traffic Code and
administered by the Land Transportation Office
The registered owner of a vehicle is liable fro any damage caused by
the negligent operation of the vehicle although the same was
already sold or conveyed to another person at the time of the
accident.
The registered owner is liable to the injured party subject to his right
of recourse against the transferee or the buyer
Applicable in case of lease
Registered owner not liable if vehicle was taken form him without
his knowledge and consent.
Q: what is the purpose of such law?
A: The main aim of motor vehicle registration is to identify the owner so that if
any accident happens, or that any damage or injury is caused by the vehicle on
the public highways, responsibility therefor can be fixed on a definite individual
the registered owner.
KABIT SYSTEM
The registered owner rule is applicable to people involved on a kabit
system
arrangement whereby a person who has been granted a certificate of
public convenience allows other persons who own motor vehicles to
operate them under his license, sometimes for a fee or percentage of the
earnings --- contrary to public policy (thus VOID and INEXISTENT)
parties to the kabit system cannot invoke the same as against each
other either to enforce their illegal agreement or to invoke the same to
escape liability --- pari delicto rule
having entered into an illegal contract, neither can seek relief from the
courts and each must bear the consequences of his acts
also applicable to aircrafts and vessels basic rule that no person can
operate a common carrier without securing a certificate of public
convenience and necessity.
Page 2
Page 3
- Presumption of Negligence
- Two conditions for the birth of the presumption of negligence:
1. there exists a contract between the passenger or the shipper and the
common carrier
2. the loss, deterioration, injury or death took place during the
existence of the contract
Doctrine of Proximate Cause there is presumption of negligence
If the goods are lost, destroyed or deteriorated, common carriers are presumed
to have acted negligently, unless they prove that they observed extraordinary
diligence. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence.
- Duration of Duty:
(1)
In case the vessel is not able to depart on time and the delay is unreasonable,
the passenger may opt to have his/her ticket immediately refunded without any
refund service fee from the authorized issuing/ticketing office.
Where and to Whom Delivered
a.
Place Goods should be delivered to the consignee in the place
agreed upon by the parties.
The shipper may change the consignment of the goods provided that at the
time of ordering the change of the consignee the bill of lading signed by the
carrier be returned to him, in exchange for another wherein the novation of the
contract appears. The expenses occasioned by the change shall be for the
account of the shipper.
b.
c.
Carriage of Goods
- Due diligence should be exercised the moment the goods are
delivered to the carrier.
- Goods are deemed delivered to the carrier when the goods are
ready for and have been placed in the exclusive possession,
custody and control of the carrier for the purpose of their
immediate transportation and the carrier has accepted them
Carriage of Passengers
Page 4
In order for the common carrier to be exempted from responsibility, the natural
disaster must have been the proximate and only cause of the loss. However, the
Page 5
3.
- Thieves, rioter, and insurrectionists are not included. They are merely
private depredators for whose acts a carrier is answerable.
- Rebels in insurrection against their own government are generally not
embraced in the definition of public enemy. However, if the rebels hold a
portion of territory, they have declared their impendence, cast off their
allegiance and has organized armed hostility to the government, and the
authority of the latter is at the time overthrown, such an uprising may
take on the dignity of a civil war, and so matured and magnified, the
parties are belligerent and are entitled to belligerent rights.
- Depredation by pirates (which are enemy of all civilized nation) excuses
the carrier from liability.
- Common carriers may be exempted from responsibility only if the act of
the public enemy has been the proximate and only cause of the loss.
Moreover, due diligence must be exercised to prevent or at least minimize
the loss before, during and after the performance of the act of the public
enemy in order that the carrier may be exempted from liability for the
loss, destruction, or deterioration of the goods.
IMPROPER PACKING
Character of the goods and defects in the packaging or in the containers are
defenses available to the common carrier. Similarly, the Carriage of Good by Sea
Act provides that carrier shall not liable for:
1. Wastage in bulk or weight or any damages arising form the inherent
defect, quality or vice of goods;
2. Insufficiency of packing;
3. Insufficiency or inadequacy of the marks, or
4. Latent defects no discoverable by due diligence.
However, NCC likewise provides:
Art. 1742. Even if the loss, destruction, or deterioration of the goods should be
caused by the character of the goods, or the faulty nature of the packing or
the containers, the common carrier must exercise due diligence to forestall or
lessen the loss.
Thus, if the carrier accepted the goods knowing the fact of improper packing or
even if the carrier does not know but the defect was nonetheless apparent
upon ordinary observation, it is not relived from liability for loss or injury to
goods resulting therefrom.
Cases:
1.
2.
Carrier was not excused from liability since the order of an acting
mayor was not considered as a valid order of a public authority. It is
required that public authority who issued the order must be duly
authorized to issue the order.
Carriage of Goods by Sea Act provides that carrier shall not
responsible for loss or damage resulting from arrest or restraint of
princes, rulers, or people, or seizure under legal process and from
quarantine restrictions.
Page 6
Employees
Carrier is liable for the acts of its employees. It cant escape liability
by claiming that it exercised due diligence in supervision and
selection of its employees (unlike in quasi-delicts).
PASSENGERS BAGGAGES
- The term baggage has been defined to include whatever articles a
passenger usually takes with him for his own personal use, comfort and
convenience
- Rules that are applicable to goods that are being shipped are also
applicable to baggage delivered to the custody of the carrier. Arts.
1733. 1734 and 1736 of Civil Code are applicable.
- However, if the luggage was hand-carried, Arts. 1998, 2000-2003 shall
apply.
Distinction: W/N the baggage is in the personal custody of the passenger.
if yes, hand carried baggage
if no, checked-in baggage
Art. 1998. The deposit of effects made by the travellers in hotels or inns shall
also be regarded as necessary. The keepers of hotels or inns shall be
responsible for them as depositaries, provided that notice was given to them,
or to their employees, of the effects brought by the guests and that, on the
part of the latter, they take the precautions which said hotel-keepers or their
substitutes advised relative to the care and vigilance of their effects. (1783)
Art. 2000. The responsibility referred to in the two preceding articles shall
include the loss of, or injury to the personal property of the guests caused by
the servants or employees of the keepers of hotels or inns as well as
strangers; but not that which may proceed from any force majeure. The fact
that travellers are constrained to rely on the vigilance of the keeper of the
hotels or inns shall be considered in determining the degree of care required
of him. (1784a)
Art. 2001. The act of a thief or robber, who has entered the hotel is not
deemed force majeure, unless it is done with the use of arms or through an
irresistible force. (n)
Art. 2002. The hotel-keeper is not liable for compensation if the loss is due to
the acts of the guest, his family, servants or visitors, or if the loss arises from
the character of the things brought into the hotel. (n)
Rationale: On the other hand, if the ship owner derives profits from
the results of the choice of the captain and the crew, when the choice
turns out successful, it is also just that he should suffer the
consequences of an unsuccessful appointment, by application of the
rule of natural law contained in the partidas --- that he who enjoys
the benefits derived from a thing must likewise suffer the losses that
ensue therefrom
Art. 2003. The hotel-keeper cannot free himself from responsibility by posting
notices to the effect that he is not liable for the articles brought by the guest.
Any stipulation between the hotel-keeper and the guest whereby the
responsibility of the former as set forth in articles 1998 to 2001 is suppressed
or diminished shall be void. (n)
Cases:
1.
b.
2.
Despite the fact that the carrier gave notice that it shall not be liable
for baggage brought in by passengers, the carrier is still liable for lost
hand-carried luggage since it is governed by rules on necessary
deposits. Under Art. 20000, the responsibility of the depositary
includes the loss of property of the guest caused by strangers but
not that which may proceed from force majeure. Moreover, article
2001 considers theft as force majeure if it is done with use of arms
or through irresistible force.
Even if the passenger did not declare his baggage nor pay its charges
contrary to the regulations of the bus company, the carrier is still
liable in case of loss of the baggage. Since, it has the duty to exercise
extraordinary diligence over the baggage that was turned over to the
carrier or placed in the baggage compartment of the bus. The nonpayment of the charges is immaterial as long as the baggage was
received by the carrier for transportation.
Page 7
The carrier may be able to prove that the only cause of the loss of the
goods is any of the following:
1. Failure of the shipper to disclose the nature of the goods;
2. Improper marking or direction as to the destination;
3. Improper loading when he assumes such responsibility.
The shipper must likewise see to it that the goods are properly
packed; otherwise, liability of the carrier may either be mitigated or
barred depending on the circumstances.
Art. 1741. If the shipper or owner merely contributed to the loss,
destruction or deterioration of the goods, the proximate cause thereof
being the negligence of the common carrier, the latter shall be liable in
damages, which however, shall be equitably reduced.
Art. 1761. The passenger must observe the diligence of a good father of a
family to avoid injury to himself.
Art. 1762. The contributory negligence of the passenger does not bar recovery
of damages for his death or injuries, if the proximate cause thereof is the
negligence of the common carrier, but the amount of damages shall be
equitably reduced.
a.
Assumption of Risk
Passengers must take such risks incident to the mode of travel. Carriers are not
insurers of the lives of their passengers. Thus, in air travel, adverse weather
conditions or extreme climatic changes are some of the perils involved in air
travel, the consequence of which the passenger must assume or expect.
However, there is no assumption of risk in a case wherein a passenger boarded
a carrier that was filled to capacity. The act of the passenger in taking the
extension chair does not amount to implied assumption of risk.
Note: there is also no assumption of risk by the mere fact that the carrier
posted notices against such liability
Problem: Although, there is a sign in the bus that says: do not talk to the driver
while the bus is in motion, otherwise, the company would not assume
responsibility for any accident:. Nonetheless, the passengers dared the driver to
race with another bus, as the bus speeds up in the attempt to overtake the
other bus, it failed to slow down. As a result, the bus turns turtle causing the
death and injuries to passengers. Is the bus company liable?
FREIGHT
a.
Amount to be Paid
The regulation of rates is founded upon the valid exercise of the Police Power of
the state in order to protect the public from arbitrary and excessive rates while
maintaining the efficiency and quality of services rendered. The fixing of just
and reasonable rates involves a balancing of investor and the consumer
interest.
Although the consideration that should be paid to the carrier is still subject to
the agreement between parties, what can be agreed upon should not be
beyond the maximum amount fixed by appropriate government agency.
b.
Although either of the shipper or the consignor may pay the freight before or at
time the goods are delivered to the carrier for shipment, nonetheless, it is the
consignor (whom the contract of carriage is made) who is primarily liable for the
payment of freight whether or not he is the owner of the goods. The obligation
to pay is implied from the mere fact that the consignor has placed the goods
with the carrier for the purpose of transportation.
c.
Time to pay
Page 8
With respect to carriage of goods by sea, the tickets are purchased in advance.
Carriers are not supposed to allow passengers without tickets --- the carrier is
bound to observe a No Ticket, No Boarding Policy. The carrier shall collect/
inspect the passengers ticket within one hour from vessels departure as not to
disrupt resting or sleeping passengers.
If the vessel is not able to depart on time and the delay is unreasonable, the
passenger may opt to have his/ her ticket refunded without refund service fee.
Delayed voyage means late departure of the vessel from its port of origin and/
or late arrival of the vessel to its port of destination. Unreasonable delay
means the period of time that has lapsed without just cause and is solely
attributable to the carrier which has prejudiced the transportation of the
passenger and/ or cargoes to their port of destination.
A passenger who failed to board the vessel can refund or revalidate the ticket
subject to surcharges. Revalidation means the accreditation of the ticket that
is not used and intended to be used for another voyage.
(2)
Carriers Lien
Art. 1744. A stipulation between the common carrier and the shipper
owner limiting the liability of the former for the loss, destruction, or
deterioration of the goods to a degree less than extraordinary
diligence shall be valid, provided it be:
ARTICLE 375. The goods transported shall be especially bound to answer for
the cost of transportation and for the expenses and fees incurred for them
during their conveyance and until the moment of their delivery.
This special right shall prescribe eight days after the delivery has been made,
and once prescribed, the carrier shall have no other action than that
corresponding to him as an ordinary creditor.
DEMURRAGE
Demurrage is the compensation provided for the contract of affreightment for
the detention of the vessel beyond the time agreed on for loading and
unloading. It is the claim for damages for failure to accept delivery. In broad
sense, very improper detention of a vessel may be considered a demurrage.
Technically, liability for demurrage exists only when expressly stipulated in the
contract.
Using the term in broader sense, damages in the nature of demurrage are
recoverable for a breach of the implied obligation to load or unload the cargo
with reasonable dispatch, but only by the party to whom the duty is owed and
only against on who is a party to the shipping contract. Notice of arrival of
vessels or conveyances, or their placement for purposes of unloading is often a
condition precedent to the right to collect demurrage charges.
CHAPTER 3
EXTRAORDINARY DILIGENCE
I. RATIONALE
A common carrier is bound to carry the passengers safely as far a
human care and foresight provide, using the utmost diligence of very cautious
persons, with due regard for all circumstances.
a.
Page 9
b.
c.
No duty to inquire
Because of the implied warranty of seaworthiness, shippers of
goods, when transacting with common carriers, are not
expected to inquire into the vessels seaworthiness,
genuineness of its licenses and compliance with all maritime
laws. Passengers cannot be expected to inquire everytime they
board a common carrier, whether the carrier possesses the
necessary papers or that all the carriers employees are
qualified.
It is the carrier that carries such burden of proving that the ship
is seaworthy.
Sufficient evidence must be submitted and the presentation of
certificates of seaworthiness is not sufficient to overcome the
presumption of negligence.
Meaning of Seaworthiness
A vessel must have such degree of fitness which an owner who
is exercising extraordinary diligence would require his vessel to
have at the commencement of the voyage, having regard to all
the probable circumstances of it. This includes fitness of the
vessel itself to withstand the rigors of voyage, fitness of the
vessel to store the cargoes and accommodate passengers to be
transported and that it is adequately equipped and properly
manned.
Seaworthiness is that strength, durability and engineering skill
made a part of a ships construction and continued
maintenance, together with a competent and sufficient crew,
which would withstand the vicissitudes and dangers of the
elements which might reasonably be expected or encountered
during her voyage without loss or damage to her particular
cargo
Example: The carrier was able to establish that the ship itself was seaworthy
because the records reveal that the vessel was dry-docked and inspected by the
Phil. Coast Guard before its first destination.
C. PROPER STORAGE
-
The carrier shall properly and carefully load, handle, stow, carry, keep, care for,
and discharge the goods carried.
Note: Seaworthiness is relative it its construction and its application depends on
the facts of a particular case (ex. Length and nature of the voyage)
Fitness of the Vessel Itself
It is necessary that the vessel can be expected to meet the normal
hazards of the journey
General Test of Seaworthiness: Whether the ship and its
appurtenances are reasonably fit to perform the service undertaken.
The ship must be cargoworthy
Even if the vessel was properly maintained and is free from defect,
the carrier must not accept the goods that cannot properly be
transported in the ship
The ship must be efficiently strong and equipped to carry the
particular kind of cargo which she has contracted to carry and her
cargo must be so loaded that it is safe for her to proceed on her
voyage.
The vessel itself may be suitable for the cargo but this is not enough
because the cargo must also be properly stored.
Cargo must generally not be placed on deck. The carrying of deck cargo raises
the presumption of unseaworthiness unless it can be shown that the deck cargo
will not interfere with the proper management of the ship.
D. NEGLIGENCE OF CAPTAIN AND CREW
-
Page 10
Deviation
- If there is an agreement between the shipper and the carrier as to
the road over which the conveyance is to be made (subject to the
approval by the Maritime Industry Authority), the carrier may not
change the route, unless it be by reason of force majeure. Without
this cause, he shall be liable for all the losses which the goods may
suffer, aside from paying the sum stipulated for that case.
- When on account of the force majeure, the carrier had to take
another route which resulted to an increase in transportation
charges, he shall be reimbursed upon formal proof.
Note: With respect to carriers by sea, the routes are subject to approval by
MARINA and the same cannot generally be changed without the authorization
from said administrative agency
2.
Transshipment
- The act of taking cargo out of one ship and loading it into another; to
transfer 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.
- Transshipment of freight without legal excuse is a violation of the
contract and subjects the carrier to liability if the freight is lost even
by a cause otherwise excepted.
Note: there is transshipment whether or not the same person, firm or entity
owns the vessels (what matters is the actual physical transfer of cargo from one
vessel to another)
V. EXTRAORDINARY DILIGENCE IN CARRIAGE BY LAND
A. CONDITION OF VEHICLE
Common carriers that offer transportation by land are similarly
required to make sure that the vehicles that they are using are in
good order and condition.
Rule on Mechanical Defects If the carriers will replace certain parts of the
motor vehicle, they are duty bound to make sure that the parts that they are
purchasing are not defective. Hence, it is a long-standing rule that a carrier
cannot escape liability by claiming that the accident that resulted because of a
defective break or tire is due to a fortuitous event. This is true even if it can be
established that the tire that was subject of a blow-out is brand new. The duty
to exercise extraordinary diligence requires the carrier to purchase and use
vehicle parts that are not defective.
B. TRAFFIC RULES
The carrier fails to exercise extraordinary diligence if it will not
comply with basic traffic rules. The Civil Code provides for a
presumption of negligence in case the accident occurs while the
operator of the motor vehicle is violating traffic rules.
In cases involving breach of contract of carriage, proof of violation of traffic
rules confirms that the carrier failed to exercise extraordinary diligence.
Case: Mallari Sr and Jr vs. CA
The rule is settled that a driver abandoning his proper lane for the
purpose of overtaking another vehicle in an ordinary situation has
the duty to see to it that the road is clear and not to proceed if he
cannot do so in safety
C. DUTY TO INSPECT
There is no unbending duty to inspect each and every package or
baggage that is being brought inside the bus or jeepney. The carrier
is duty bound to conduct such inspection depending on the
circumstances.
Note: although overland transportation are not bound nor empowered to make
an examination on the contents of packages or bags particularly those hand
carried by passengers, such is different with regards to an airline company.
VI. EXTRAORDINARY DILIGENCE IN CARRIAGE BY AIR
The aircraft must be in such a condition that it must be able to
withstand the rigors of flight.
Airworthiness An aircraft, its engines propellers, and other components and
accessories, are of proper design and construction, and are safe for air
navigation purposes, such design and construction being consistent with
accepted engineering practice and in accordance with aerodynamic laws and
aircraft science.
Proof of airworthiness is not by itself sufficient to prove exercise of
extraordinary diligence.
Case: Japan Airlines vs. CA
The fact that the flight was cancelled due to fortuitous event does
not mean that the carriers duty already ended. The carrier is still
obligated to look after the convenience and comfort of the
passenger
Thus the carrier was obligated to make the necessary arrangements
to transport the passenger on the first available flight.
A. INSPECTION
It is the duty of the carrier to make inquiry as to the general nature
of the articles shipped and of their value before it consents to carry
them; and its failure to do so cannot defeat the shippers right to
recovery of full value of the package if lost, in the absence of
showing of fraud or deceit on the part of the shipper.
Where a common carrier has reasonable ground to suspect that the offered
goods are of a dangerous character, the carrier has the right to know the
character of such goods and to insist inspection, if reasonable and practical
under the circumstances, as a condition of receiving and transporting such
goods. To be subjected to unusual search, other than the routinary inspection
procedure customarily undertaken, there must exist proof that would justify
cause for apprehension that the baggage is dangerous as to warrant exhaustive
inspection, or even refusal to accept carriage of the same.
Case: Northwest Airlines vs. Laya
The fact that the plaintiff was greatly inconvenienced by the fact that
his attach case was subjected to further inspection does not
warrant imposition of liability because he was not singled out and
discriminated by the employees of the carrier
Protection of passengers must take precedence over convenience
Nevertheless, the implementation of security measures must be
attended by basic courtesies
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CHAPTER 4
BILL OF LADING
I. CONCEPTS, DEFINITION AND KINDS
Bill of Lading (BOL)
a written acknowledgement, signed by the master of a vessel or
other authorized agent of the carrier, that he has received the
described goods from the shipper, to be transported on the
expressed terms to be described the place of destination, and to be
delivered to the designated consignees of the parties.
It operates as a (1) RECEIPT (2) as a CONTRACT (3) as a DOCUMENT
OF TITLE.
A BOL is not necessary for the perfection of a contract of carriage. Thus, the
obligation to exercise extraordinary diligence by the carrier is still required even
if there is no bill of lading.
In the absence of the bill of lading, disputes shall be determined on the basis of
the provisions in the New Civil Code and suppletory by the Code of Commerce.
KINDS of BILL of LADING:
1. Clean Bill of
Lading
2. Foul Bill of
Lading
3. Spent Bill of
Lading
4. Through Bill
of Lading
5. On Board Bill
6. Received for
Shipment Bill
7. Custody Bill
of Lading
8. Port Bill of
Lading
I. RECEIPT
As comprehending all methods of transportation, a BOL may be
defined as a written acknowledgement of the receipt of goods and
an agreement to transport and to deliver them at a specified place to
a person named or on his order.
Other terms, shipping receipts, forwarders receipts, and
receipts for transportation.
(SC) the designation however is not material, and neither is the form
of the instrument. If it contains an acknowledgement by the carrier
of the receipt of goods for transportation it is, in legal effect a BOL.
The issuance of a bill of lading carries the presumption that the
goods were delivered to the carrier issuing the bill, for immediate
shipment, and it is nowhere questioned that a bill of lading is prima
facie evidence of the receipt of the goods by the carrier
II. CONTRACT
It expresses the terms and conditions of the agreement between the
parties; names the parties; includes consignees etc. It is the law
between the parties bound by its terms and conditions.
Contracts of Adhesion
It is to be construed liberally in favor of the shipper who adhered to
such bill as it is a contract of adhesion. The only participation of the
party is the signing of his signature or his adhesion thereto.
The shipper or passenger is bound by the terms and conditions if
there is no occasion to speak of ambiguities or obscurities
If the words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former
ART. 24 (NCC). In all contractual property or other relations, when one of the
parties is at a disadvanatge on account of his moral dependence, ignorance
indigence, mental weakness, tender age and other handicap, the court must be
vigilant for his protection.
Parole Evidence Rule
BOL is covered by the parol evidence rule, that the terms of the
contract are conclusive upon the parties and evidence aliunde is not
admissible to vary or contradict a complete enforceable agreement,
subject to well defined exceptions
The mistake contemplated as an exception to the parol evidence rule
is one which is a mistake of fact mutual to the parties.
Note that if such is not raised inceptively in the complaint or in the
answer, a party cannot later on be permitted to introduce parol
evidence thereon
Bill of Lading as Evidence
The BOL is the legal evidence of the contract and the entries thereof
constitutes prima facie evidence of the contract.
All the essential elements of a valid contract (cause, consent, object)
are present when such bill are issued.
III. ACTIONABLE DOCUMENT/DOCUMENT OF TITLE
In a contractual obligation, the bill of lading can be categorized as an
actionable document under the Rules of Court. Hence, the bill of
lading must be properly pleaded either as causes of action or
defenses
ART 1507 (NCC). A document of title in which it is stated that the
goods referred to therein will be delivered to the bearer or to the
order of any person named in such document is a negotiable
document of title.
-
Page 12
Where there was delivery to the wrong person, the prescriptive period is 10
years because there is a violation of contract, and the carriage of goods by sea
act does not apply to misdelivery. (Ang v. American SS Agencies (19 SCRA 631)
CARRIAGE OF GOODS BY SEA ACT (C.A. No. 65)
-
BASIC STIPULATIONS
Provided for in the Code of Commerce
(for overland transportation, maritime commerce and electronic
documents, please refer to the textbook for the codal pp. 203-210)
2.
3.
4.
Exempting the carrier from any and all liability for loss or damage
occasioned by its own negligence - INVALID as it is contrary to public
policy.
Parties may stipulate that the diligence to be exercised by the carrier
for the carriage of goods be less than extraordinary diligence if it is:
a.
in writing and signed by both parties
b. supported by a valuable consideration other than the
service rendered by the common carrier
c.
the stipulation is just, reasonable and not contrary to
law.
Providing an unqualified limitation of such liability to an agreed
valuation - INVALID
Limiting the liability of the carrier to an agreed valuation unless the
shipper declares a higher value and pays a higher rate of freightVALID and ENFORCEABLE.
Page 13
Note: to limit its liability or at least mitigate the same, the carrier can
cite CONTRIBUTORY NEGLIGENCE of the plaintiff and the DOCTIRNE
OF AVOIDABLE CONSEQUENCES
Case: Sea-Land Service Inc. vs. IAC
Liability of a common carrier for loss of or damage to goods
transported by it under a contract of carriage is governed by the laws
of the country of destination
COGSA is applicable up to the final port of destination and that the
fact that transshipment was made on an interisland vessel did not
remove the contract of carriage of goods from the operation of said
Act.
Case: Citadel Lines Inc. vs. CA
The duty of the consignee is to prove merely that the goods were
lost. Thereafter, the burden is shifted to the carrier to prove that it
has exercised the extraordinary diligence required by law. And, its
extraordinary responsibility lasts from the times that goods are
unconditionally placed in the possession of, and received by the
carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee or to the person who
has the right to receive them
Case: Everett Steamship Corporation vs. CA
Considering that the shipper did not declare a higher valuation it had
itself to blame for not complying with the situations
The trial courts ratiocination that private respondent could not have
fairly and freely agreed to the limited liability clause in the bill of
lading because the said conditions were printed in small letters does
not make the bill of lading invalid
WARSAW CONVENTION of 1929
WHEN APPLICABLE:
Applies to all international transportation of person, baggage or
goods performed by aircraft for hire.
International transportation means any transportation in which
the place of departure and the place of destination are situated
either:
o
within the territories of two High Contracting Parties
regardless of whether or not there be a break in the
transportation or transshipment, or
o
within the territory of a single High Contracting Party, if
there is an agreed stopping place within a territory
subject to the sovereignty, mandate or authority of
another power, even though that power is not a party to
the Convention.
Transportation to be performed by several successive air carriers shall be
deemed to be one undivided transportation, if it has been regarded by the
parties as a single operation, whether it has been agreed upon under the form
of a single contract or of a series of contracts, 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,
suzerainty, mandate, or authority of the same High Contracting Party. (Art. 1)
NOTE: Warsaw prevails over the Civil Code, Rules of Court and all laws in
the Philippines since an international law prevails over general law.
WHEN NOT APPLICABLE:
1. If there is willful misconduct on the part of the carriers employees.
The Convention does not regulate, much less exempt, carrier from
liability for damages for violating the rights of its passengers under
the contract of carriage (PAL v. CA, 257 SCRA 33). --- if the damage is
similarly caused by any agent of the carrier acting within the scope
of his employment
2. when it contradicts public policy;
3. if the requirements under the Convention are not complied with.
Page 14
agreement whereby the first carrier assumed liability for the whole
journey.
b. In case of transportation of baggage or goods
i. the consignor can file an action against the first carrier and the
carrier in which the damage occurred
ii. the consignee can file an action against the last carrier and the carrier
in which the damage occurred. These carriers are jointly and
severally liable. (Art. 30)
Nota Bene: COGSA/WARSAW applies to foreign vessels or airplane or
international travel
Code of Commerce applies to inter-island or domestic travel.
Bill of Lading as Document of Title
A. Negotiability
- It is negotiable if it is deliverable to the bearer, or to the order of any person
named in such document. (Art. 1507, Civil Code)
a) Effect of Stamp or Notation Non-Negotiable
the document remains to be negotiable even if the words notnegotiable or non-negotiable are placed thereon. - Art. 1510 (Civil
Code)
B. How Negotiated
a) Bearer document (Art. 1508 and 1511)
- may be negotiated be delivery
b) Order document (Sec. 38, NIL and Art. 1509, NCC)
- can only be negotiated through the indorsement of the specified person so
named.
- such indorsement may be in blank, to bearer or to a specified person.
C. Effects of Negotiation
- has the effect of manual delivery so as to constitute the transferee the owner
of the goods
- results in the transfer of ownership because transfer of document likewise
transfers control over the goods
- refer to Art. 1513
Solidary liability
In case the negligence of the carriers driver and a third person
concurs, the liability of the parties carrier and his driver, third
person is joint and several.
NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD
A. Overland Transportation of Goods and Coastwise Shipping
a) When to file a claim with carrier
Art. 366 constitutes a condition precedent to the accrual of a
right of action against a carrier for damage caused to the
merchandise.
Chapter 5
Actions and Damages in Case of Breach
The period does not begin to run until the consignee has received
possession of the merchandise that he may exercise over it the
ordinary control pertinent to ownership.
This provision applies even to transportation by sea within the Phils.
or coastwise shipping.
Does NOT apply to misdelivery of goods.
Page 15
A claim must be filed with the carrier within the following period:
1. if the damage is apparent, the claim should be filed immediately
upon discharge of the goods; or
2. within 3 days from delivery, if damage is not apparent.
Carrier in good faith is liable only to pay for the damages that are
the natural and probable consequences of the breach of the
obligation and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
a) Prescription
Action for damages must be filed within a period of one (1) year from
discharge of the goods.
The period is not suspended by an extra-judicial demand. (Why?
Transportation of goods by sea should be decided in as short a time as
possible)
o
Case: Dole Philippines Inc. vs. Maritime Company of the
Philippines - the prescriptive period is not tolled or
interrupted by a written extra-judicial demand. Article
1155 is NOT applicable.
The period does not apply to conversion or misdelivery.
The one (1) year period refers to loss of goods and not to misdelivery.
-
Damages arising from delay or late delivery are not the damage or
loss contemplated under the COGSA. The goods are not actually lost
or damaged. The applicable period is ten (10) years.
Case: Domingo Ang vs. American Steamship Agencies
However, it does not apply to the claim against the insurer for the
insurance proceeds. The claim against the insurer is based on contract
that expires in ten (10) years.
II. Recoverable Damages
Article 2216 provides that no proof of pecuniary loss is necessary in order that
moral, nominal, temperate, liquidated or exemplary damages may be
adjudicated. The assessment of such damages, except liquidated ones, is left to
the discretion of the court, according to the circumstances of each case.
However, proof of pecuniary loss is necessary if actual or compensatory
damages are being claimed.
a) Actual or Compensatory Damages
only for the pecuniary loss suffered by him as he has duly proved
not only the value of the loss suffered, but also that of the profits
which the obligee failed to obtain
1.
2.
-
2 Kinds:
the loss of what a person already possesses (dao emergente);
the failure to receive as a benefit that would have pertained to him
(lucro cesante).
It should be proven: cannot be decided based on the consideration
of the judge; not to be based on the perception, observation and
consideration of the judge
With respect to restorative medical procedure: to be entitled to
actual damage, you need to have an EXPERT TESTIMONY. Without
such, you cannot recover.
Page 16
Net Earning Capacity = Life Expectancy x [Gross Annual Income less Necessary
Living Expenses]
2) Attorneys fees
refer to Art. 2208 of the Civil Code
attorneys fees may be awarded in an action for breach of contract
of carriage under par. 1,2,4,5,10 and 11 of Art. 2208.
If awarded exemplary, one is entitled to attorneys fees
2 kinds: ordinary (compensation to the lawyer); extraordinary
(indemnity as a form of damages suffered due to the breach of
contract)
You can be awarded if you show that you were forced to litigate
and when you are entitled to exemplary damage.
But this award is subject to the discretion of the court (you cannot
dictate usually 10%-15%)
3) Interests
c) Nominal Damages
- Refer to Art. 2221-2223 (Civil Code)
- It is adjudicated in order that the right of plaintiff may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any
loss suffered by him.
- The assessment of nominal damages is left to the discretion of the court
according to the circumstances of the case.
- The award of nominal damages is also justified in the absence of
competent proof of the specific amounts of actual damages suffered.
- Cannot co-exist with actual damages.
- There is no loss in nominal damages, unlike in actual and temperate
damages, loss is present which is proven and not proven but rather
ascertained by the court, respectively.
Case: Japan Airlines vs. CA
The award of moral damages was justified because JAL failed to
make necessary arrangement to transport the plaintiffs on the first
available connecting flight to Manila.
Only Nominal damages were awarded in the absence of proof of
actual damages
d) Temperate or Moderate Damages
- More than nominal but less than compensatory damages.
- Art. 2224 provides:
may be recovered when the court finds that some pecuniary loss has
been suffered but its amount cannot, from the nature of the case, be
provided with certainty.
- cannot co-exist with actual damages
- Definite proof of pecuniary loss cannot be offered, although the court is
convinced that there has been such loss.
e) Liquidated Damages
Those agreed by the parties to a contract, to be paid in case of
breach thereof.
Ordinarily, the court cannot change the amount of liquidated
damages agreed upon by the parties. However, Art. 2227 of the Civil
Code provides that liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if they were
iniquitous or unconscionable.
f) Exemplary or Corrective Damages
Requisites for the award of exemplary damages:
1. They may be imposed by way of example in addition to
compensatory damages, and only after the claimants right to them
has been established.
2. They cannot be recovered as a matter of right, their determination
depending upon the amount of compensatory damages that may be
awarded to the claimant.
3. The act must be accompanied by bad faith or done in wanton,
fraudulent, oppressive or malevolent manner.
Note: If gross negligence warrants the award of exemplary damages, with more
reason is its imposition justified when the act performed is deliberate, malicious
and tainted with bad faith. The rationale behind exemplary or corrective
damage is to provide an example or correction from public good.
Page 17
Art. 587: ship agent may exempt himself of the civil liabilities for the
indemnities in favor of third persons by abandoning vessel with all equipments
and freight it earned during voyage
That which distinguishes the maritime from the civil law and even
from the mercantile law in general is the real and hypothecary
nature of the former
Art. 590: co-owners civilly liable in proportion to their interest and may exempt
liability by abandonment of the part of the vessel belonging to him
Case: Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance
Corporation, Ltd.
Limited liability rule means that the liability of a shipowner for damages in
case of loss is limited to the value of his vessel.
No vessel, no liability.
The civil liability for collision is merely co-existent with the interest
in the vessel; if there was total loss, liability is also extinguished.
GR: If the ship is totally lost, liability is extinguished. If the ship or part thereof
still exists, he can escape liability by abandoning the vessel, its appurtenances
and its freight.
Case: Monarch Insurance Co., Inc. vs. Court of Appeals
Page 18
Limited liability rule applies if the captain or the crew caused the
damage or injury as when unseaworthiness of the vessel was caused
by the negligence of the captain or crew during the voyage
However, if the failure to maintain the seaworthiness of the vessel
can be ascribed to the shipowner alone or the shipowner
concurrently with the captain, then the limited liability principle
cannot be invoked --- LIABILITY FOR THE DAMAGES IS TO THE FULL
EXTENT (ex. Overloading, unseaworthiness even at the time of
departure)
2.
The total loss of the vessel did not extinguish the liability of the
carriers insrured
Despite the loss of the vessel, therefore, its insurance answers
for the damages that a shipowner or agent, may be held liable
for by reason of the death of its passengers.
3.
In
the
workmens
COMPENSATION)
compensation
claims
(WORKERS
4.
5.
Page 19
If the plaintiff was injured or heirs will file action from insurance company, and
since shipowner cannot avail of limited liability, this is not advisable to the
plaintiff because it has no privity of contract with the insurance company
Q: when does insurance argument come in?
A: only when the shipowner will bring the insurance company to the case filed
by the plaintiffby way of third party complaint. Once insurance company is
impleaded then this can be used: that the owner cannot avail of limited liability.
But no shipowner will ever implead the insurance. Because they will be the one
who will claim the insurance without telling the plaintiffs. In the case, there is
no proof that the vessel is insured. Even if we know outside court, it is insured
because in the court, there is no proof that the vessel is insured. Court will not
identify evidence not properly identified and recoded in court.
Q: is it really an exception in its strict sense?
A: Not really (CAPANAS). What is the implication if you properly invoke the
LLRule the plaintiff cannot avail beyond the value of the vessel.
If not apply plaintiff will recover more than the value of vessel subject to rules
on claiming of damages.
But question, if vessel if covered with insurance, does this mean that plaintiff
can recover to the amount applied? No, they can only recover until the
coverage of the insurance proceeds.
3. Negligence
- common carrier is presumed negligent if common carrier. However, this does
not apply when there is an invocation on limited liability. (in all cases except
MONARCH vs. CA) --- the rest of the case, the court has found negligence based
on the facts presented. You cannot invoke presumption of negligence so that
limited liability rule will not apply.
Monarch _-- SC: since there is a presumption of negligence then LLR will not
apply. But SC also said that if LLR is invoked, the initial burden to invoke
negligence shifts to the shipowner. They should prove that there is no privity or
knowledge on the negligence of the ship captain.
Q: what is the relationship of Civil Code and LLR?
A: There is none. Under 1766 in all matters not provided by Civil Code, Code of
Commerce or Special law will apply. There is no rule in Civil Code in limited
liability rule thus Code of Commerce will apply. (but in monarch, this was not
applied--- all the negligence was related to the absence of exercising
extraordinary diligence)
Note: that in the subsequent cases, Consolidated of Aboitiz case: there were
findings of facts of the negligence of Aboitiz. The point is when it comes to LLR,
the Code of Commerce apply. You cannot invoke presumption of negligence. In
order to refute, petitioner should prove negligence.
REMEMBER: PROVE THE FACTS OF NEGLIGENCE. Not presumption.
Loadstar case
- the shipowner is aware of the typhoon
- insufficient manning negligent
- Captain playing mahjong there was negligence. But SC said that it was
negligent because the shipowner did not prove that it was the first. Supposedly
facts are established in court proceedings and not on presumption.
3. no vessel, no liability
- they all mean one and the same such that the liability of the shipowner for the
losses is confined to the value of the vessel and the freight, if any.
MARITIME PROTEST (4 INSTANCES) REQUIRED (LOOK AT CODE OF
COMMERCE and above notes)
INSTANCES WHEN IT DOES NOT APPLY:
1. NOT based CODE OF COMMERCE AND BASED ON QUASI-DELICT THEN NOT
MARITIME PROTEST
2. when what was is involve is not a vessel (Lopez vs. Duruel: the motor boat is
not a vessel under maritime law, it is only engaged in bay traffic. A vessel in
Page 20
When the mercantile code speaks of vessels, they refer solely and
exclusively to mercantile ships, as they do not include warships, and
furthermore, they almost always refer to craft which are not accessory to
another as in the case of launches, lifeboats and etc.
They refer to merchant vessels and in NO WAY can they or should they be
understood as referring to pleasure craft, yachts, pontoons, health service
and harbor police vessels, etc.
Vessels are considered personal property under the Civil Law. The Code of
Commerce likewise expressly acknowledges the special nature of a vessel as
personal property.
Case: Philippine Refining Company vs. Jargue
Vessels are personal property although occasionally referred to as a
peculiar kind of personal property
They are subject to mortgage agreeably to the provisions of the
Chattel Mortgage Law
The only difference between a chattel mortgage of a vessel and a
chattel mortgage of other personality is that it is not now necessary
for a chattel mortgage of a vessel to be noted in the registry of the
register of deeds, but it is essential that a record of documents
affecting the title to a vessel be entered in the record of the
Collector of Customs at the port of entry
Case: Rubiso and Calixto vs. Rivera
Ships or vessels, whether moved by steam or by sail, partake, to a
certain extent, of the nature and conditions of real property, on
account of their value and importance in the world of commerce
Transfer of vessels should be in writing and must be recorded in the
appropriate registry
2. OWNERSHIP
ACQUISITION
Article 573. Merchant vessels constitute property which may be acquired and
transferred by any of the means recognized by law. The acquisition of a vessel
must appear in a written instrument, which shall not produce any effect with
respect to third persons if not inscribed in the registry of vessels.
The ownership of a vessel shall likewise be acquired by possession in good faith,
continued for three years, with a just title duly recorded.
In the absence of any of these requisites, continuous possession for ten years
shall be necessary in order to acquire ownership.
A captain may not acquire by prescription the vessel of which he is in command.
ARTICLE 575. Co-owners of vessels shall have the right of repurchase and
redemption in sales made to strangers, but they may exercise the same only
within the nine days following the inscription of the sale in the registry, and by
depositing the price at the same time.
B.
Article 576. In the sale of a vessel it shall always be understood as included the
rigging, masts, stores and engine of a streamer appurtenant thereto, which at
the
time
belongs
to
the
vendor.
The arms, munitions of war, provisions and fuel shall not be considered as
included in the sale.
The vendor shall be under the obligation to deliver to the purchaser a certified
copy of the record sheet of the vessel in the registry up to the date of the sale.
Article 577. If the alienation of the vessel should be made while it is on a
voyage, the freightage which it earns from the time it receives its last cargo
shall pertain entirely to the purchaser, and the payment of the crew and other
persons who make up its complement for the same voyage shall be for his
account.
Page 21
If the sale is made after the vessel has arrived at the port of its destination, the
freightage shall pertain to the vendor, and the payment of the crew and other
individuals who make up its complement shall be for his account, unless the
contrary is stipulated in either case.
Article 578. If the vessel being on a voyage or in a foreign port, its owner or
owners should voluntarily alienate it, either to Filipinos or to foreigners
domiciled in the capital or in a port of another country, the bill of sale shall be
executed before the consul of the Republic of the Philippines at the port where
it terminates its voyage and said instrument shall produce no effect with
respect to third persons if it is not inscribed in the registry of the consulate. The
consul shall immediately forward a true copy of the instrument of purchase and
sale of the vessel to the registry of vessels of the port where said vessel is
inscribed and registered.
In every case the alienation of the vessel must be made to appear with a
statement of whether the vendor receives its price in whole or in part, or
whether he preserves in whole or in part any claim on said vessel. In case the
sale is made to a Filipino, this fact shall be stated in the certificate of navigation.
When a vessel, being on a voyage, shall be rendered useless for navigation, the
captain shall apply to the competent judge on court of the port of arrival,
should it be in the Philippines; and should it be in a foreign country, to the
consul of the Republic of the Philippines, should there be one, or, where there
is none, to the judge or court or to the local authority; and the consul, or the
judge or court, shall order an examination of the vessel to be made.
If the consignee or the insurer should reside at said port, or should have
representatives there, they must be cited in order that they may take part in
the proceedings on behalf of whoever may be concerned.
REGISTRATION
Vessels are now registered through MARINA. It is a long standing rule that
the person who is the registered owner of the vessel is presumed to be
the owner of the vessel.
It is a settled rule that the sale or transfer of the vessel is not binding on
the third person unless the same is registered.
SHIP'S MANIFEST
The requirement that a vessel must carry a manifest is not complied with
even if a bill of lading can be presented. A bill of lading is just a
declaration of a specific cargo rather than the entire cargo
Sec 906 of the Tariff and Custom Code provides that manifest shall be
required for cargo and passengers transported from one place to another
only when one or both of such place is a port of entry.
MORTGAGE
Since the term personal property includes vessel, they are subject to
mortgage agreeably to the provisions of the Chattel Mortgage Law.
SAFETY REGULATIONS
In sum, the following are persons who take part in Maritime Commerce:
Page 22
POWERS AND OBLIGATIONS INHERENT TO THE CAPTAIN AND THE MASTER: (See
Arts. 610-612 of the Code of Commerce)
DISCRETION OF CAPTAIN AND MASTER
A ships 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.
Presumption: A captain is knowledgeable as to the specific requirements of
seaworthiness and the particular risks and perils of the voyage he is to embark
upon.
Applicable Principle: The captain has control of ALL departments of service in
the vessel, and reasonable discretion as to its navigation.
Basic Principle in Admiralty Law: In navigating the vessel, the master must be
left free to exercise his own best judgment.
Requirements of Safe Navigation: The judgment and discretion of the captain
of a vessel may be confined within a straitjacket, even in this age of electronic
communications.
PILOTAGE: Who is a pilot?
Maritime Law: a person duly qualified, and licensed, to conduct a vessel into or
out of ports, or in certain waters.
Broad sense: includes both (1) those whose duty it is to guide vessels into or out
of ports, or in particular waters; and (2) those entrusted with the navigation of
vessels on the high seas.
General understanding: a person taken on board at a particular place for the
purpose of conducting a ship through a river, road or channel, or from a port.
COMPULSORY PILOTAGE. In compulsory pilotage, states possessing harbors
enacted laws or promulgated rules requiring vessels approaching their ports to
take on board pilots licensed under local law. In the Philippines, compulsory
pilotage is being implemented in the Port of Manila, the latter being within the
Manila Pilotage District.
a.
Master and Pilot (See Far Eastern Shipping case on page 520 of the
Aquino book for the SC discussion on the duties of a pilot)
b.
c.
take the helm of the vessel. They are also not partnerships because the
members do not function as agents for the association or for each other.
Pilots associations are also not liable for negligently assuring the
competence of their members because as PROFESSIONAL ASSOCIATIONS,
they made no guarantee of the professional conduct of their members to
the general public.
CODE OF COMMERCE PROVISIONS ON CAPTAINS (See page 528 of the Aquino
book)
OFFICERS AND CREW OF VESSELS
COMPLEMENT OF A VESSEL (Art. 648, Code of Commerce)
-- all the persons on board from the captain to the cabin boy, necessary for the
management, maneuvers, and service, and therefore, it includes the CREW, the
SAILING MATES, ENGINEERS, STOKERS, and OTHER EMPLOYEES ON BOARD not
having specific designations; but it SHALL NOT INCLUDE the passengers or the
persons whom the vessel is transporting.
REGULATION OF MERCHANT MARINE PROFESSION
The practice of marine profession is now governed by special laws and pertinent
rules issued by the:
MARINA;
BOARD OF MARINE DECK OFFICERS;
BOARD OF MARINE ENGINEER OFFICERS
MINIMUM SAFE MANNING
It is not enough that the officers manning the merchant vessel have all the
qualifications imposed by the Philippine Merchant Marine Officers Act and
other special laws or regulations. It is also required that there is sufficient
number of officers and crew that are serving in the vessel. (Quality and
Quantity)
SECURITY OF TENURE
The Labor Code provisions apply to OFFICERS and CREW of merchant
vessels in DOMESTIC Trade or COASTWISE Shipping. Hence, matters
concerning their dismissal or disciplinary action must be in accordance
with provisions of the Labor Code. For officers and crew who are working
in foreign vessels who are involved in overseas shipping, there must be
compliance with the applicable laws on overseas employment as well as
regulations issued by the Philippine Overseas Employment Administration
(POEA).
CODE OF COMMERCE PROVISIONS on Sailing Mates, Second Mate and Marine
Engineer, Crew, and Captain (See pages 552-560 of the Aquino book).
Parties --- those provided above plus seamen, other members of the
complement including the stokers (incharge of boilers) and supercargo (agent of
the shippers who has authority to sell goods while on voyage)
4 maritime contracts
1. charter parties
2. Botomry
3. Repondentia
4. Marine insurance (incorporated in the subject insurance)
ON PERSONS
Shipowner
he has the privilege to invoke limited liability rule
what if with a charter party with charterer, who can invoke the LLR?
No jurisprudence. Personal opinion of sir: distinguish on the type of
charter party. If affreightment, shipowner retains possession,
command and navigation of the vessel. If bareboat it is vested upon
the charterer.
Jurisprudence: except for registration, the charterer is the temporary
owner of the vessel. With this, the charterer can invoke LLR (this part
no juris)
Page 23
Note: there is not distinction of liability of shipowner and ship agent. They are
civilly liable
There is a situation in maritime law that shipower and agent they are held liable
for the act or omission of a third person which is the ship captain or master.
ACTS of CAPTAIN
Case: Yucon case and Sweetlines case
In Yucon, money was entrusted to the captain and the money was
lost. SC concluded that shipowner was liable for the lost because the
captain failed to put up measures while in custody of the money. It
may not technically to an act but may refer to admission but would
fall under the term acts
In sweetlines, bound for catbalogan but the captain chose to allow
the passengers to disembark in tacloban. This time, this is the act of
captain. The SC concluded that the damages sustained by passengers
bound for catbalogan are to shouldered by the shiponwer
Indemnities in Favor of 3rd person: OTTA devt case sited in walter smith case
In OTTA the owner of the pier was at the same time the owner of the
goods. SC, because there was a relationship of owner of vessel and
goods, then there is presumption of negligence new civil code
prevails
Walter smith case: There was no relationship. Owner of port and
owner of goods are different. What was applied by court was the law
on torts. No presumption of negligence. There should be proof of
negligence. The owner of vessel proved that he exercised ordinary
diligence (required in ports). What was presented was the
competence of shipcaptain. The shipowner proved ordinary diligence
in choosing the ship captain
Charter Parties
a contract whereby the entire ship, or some of the principal part, is let by
the owner to a merchant or other person for a specified time or use for
the conveyance of goods, consideration of payment of freight
it is a contract, hence, parties are free to stipulate upon such terms and
conditions that would suit their purposes subject to the caveat that these
should not be contrary to law or public policy
Parties
1. Charterer- merchant or a person who desire s to lease ship or vessel owned
by another by transport of his or her goods for commercial purposes or persons
from one port to another
2. Shipowner (SO)
KINDS:
1. bareboat or demise charterer shipowner leases to the charterer the whole
vessel, transferring to the charterer the entire command, possession and
consequent control over the vessels navigation, including the master and the
crew, who becomes the charterers servants
- charterer becomes an owner pro hac vice
2. Contract of affreightment charterer hires the vessel only, either for a
determinate period of time or for a single or consecutive voyage, with the SO
providing for the provision of the ship, wages of the master and crew, and
expenses for maintenance of the vessel
a. time charter vessel is leased to a charterer for a fixed period of
time
b. voyage charter vessel is leased for a single or particular voyage
REQUISITES OF A VALID CHARTER PARTY
1. consent of the contracting parties
2. an existing vessel which should be placed at the disposition of the
shipper
3. the freight
4. compliance with requirements of art 652 of Code of commerce
(Aticle 652 of the Code of Commerce provides that the charter party
shall contain, among others, the name, surname, and domicile of the
Page 24
Page 25
Art. 1747. If the common carrier, without just cause, delays the transportation
of the goods or changes the stipulated or usual route, the contract limiting the
common carrier's liability cannot be availed of in case of the loss, destruction,
or deterioration of the goods.
Art. 1748. An agreement limiting the common carrier's liability for delay on
account of strikes or riots is valid.
Art. 1749. A stipulation that the common carrier's liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered. by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been fairly and freely
agreed upon.
Art. 1751. The fact that the common carrier has no competitor along the line
or route, or a part thereof, to which the contract refers shall be taken into
consideration on the question of whether or not a stipulation limiting the
common carrier's liability is reasonable, just and in consonance with public
policy.
Art. 1752. Even when there is an agreement limiting the liability of the
common carrier in the vigilance over the goods, the common carrier is
disputably presumed to have been negligent in case of their loss, destruction
or deterioration.
Art. 1753. The law of the country to which the goods are to be transported
shall govern the liability of the common carrier for their loss, destruction or
deterioration.
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the
passenger's baggage which is not in his personal custody or in that of his
employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003
concerning the responsibility of hotel-keepers shall be applicable.
ART. 653. if the cargo should be received without the charter party having been
signed, the contract shall be understood as executed In accordance with what
appears in the bill of lading, the sole evidence of title with regard to the cargo
for determining the rights and obligations of the ship agent, captain and
charterer
- If there is charter party or bill of lading (BOL) = no contract at all; but according
to Blanco, if there is delivery and receipt of cargo combined with the GF and
mutual consent = contract present , better than BOL
DISTINCTIONS:
BOTTOMRY/ RESPONDENTIA
1. Not subject to Usury Law
ORDINARY LOAN
1. Effects of loans be lost due to accident of the sea during the time, and on the
occasion of the voyage which has been designated in the contract and proven
that the cargo was on board
- lender losses the right to institute the action which would pertain to him
Except: when the loss was
1. caused by inherent defect of the thing
2. through fault or malice of the borrower
3. through barratry on the part of the captain
4. caused by damages suffered by the vessel as a consequence of
being engaged in a contraband
5. loaded the goods on a vessel different from that designated in the
contract unless the change was caused by force majeure
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Damage or expenses caused to the vessel or cargo that did not inure to
common benefit, and borne by respective owners. (809)
The owner of the goods which gave rise to the expense or suffered th e
damage shall bear this average. (Art. 810)
res perit domino applies
if the vessel or goods are hypothecated by loan on bottomry and
respondentia, the lender shall bear the loss in proportion to his interest
Examples: see article 809 of the code of commerce
RULES ON AVERAGES:
1. Averages is defined as damage deliberately caused or an expense
deliberately incurred due to a marine peril and which has resulted in
saving both vessel and cargo or only the vessel or cargo.
2. Where both vessel and cargo are saved, it is general average; where only
the vessel or only the cargo is saved, it is particular average.
3. The person whose property has been saved must contribute to reimburse
the damage caused or expense incurred if the situation constitutes
general average.
B. Gross or General Average
Damage or expenses deliberately caused in order to save the vessel, its cargo
or both from real and known risk. (Art. 811)
All the persons having an interest in the vessel and the cargo therein at the
time of the occurrence of the average shall contribute to satisfy this average.
(Art. 812)
REQUISITES:
1.
2.
3.
4.
5.
6.
Common danger
- means both the ship and the cargo, after has been loaded, are subject to the
same danger, whether during the voyage, or in the port of loading or unloading,
that the danger arises from the accidents of the sea, disposition of authority, or
faults of men, provided that circumstances producing the peril should be
ascertained and imminent or may rationally be said to be certain and imminent
- When the measure of precaution adopted solely and exclusively for the
preservation of the vessel from the danger of seizure or capture and not for the
common safety is not considered as common danger
Deliberate Sacrifice
- voluntary sacrifice of a part for the benefit of the whole in order to justify the
average contribution
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- owners of the goods saved shall not be liable for the indemnification of those
jettisoned, lost or damaged
- hence when the sacrifice was not successful in saving the ship, there will be no
general contribution
Under the rule, deck cargo is permitted in coastwise shipping but prohibited
in overseas shipping.
1. If deck cargo is located with the consent of the shipper on overseas
trade, it must always contribute to general average, but should the same
be jettisoned, it would not be entitled to reimbursement because there
is violation of the Y-A Rules.
2. If deck cargo is loaded with the consent of the shipper on coastwise
shipping, it must always contribute to general average and if jettisoned
would be entitled to reimbursement.
-
AVERAGES
- the same concept that was existing in medieval times can be applied at
present
Relevance of averages (take note these ex. Connected to expenses under 806)
under 806 --- averages are:
o
Extraordinary expenses ex. If machine does not work,
you have to ask help of a tugboat the expenses on the
use of tugboat is a question of averages. This is
extraordinary because it is not foreseen. --- assuming the
engine of the vessel was defective, can that be
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Note that examples of the two types of averages are not exclusive. There is a
word especially thus there may be other example that may fall under this two
type of averages.
YORK AND TURP RULES
THIS CAN be stipulated in a contract that this rule will apply in
respect to averages
In the absence of stipulation in the contract in applying this rule,
such rule is inapplicable
Q: ordinary expenses are not averages bec. They are foreseeable, are there
instance that they can be considered to be extraordinary ave
A; if the parties agree that the averages will cover ordinary expenses. The code
of commerce does not prohibit the inclusion of other expenses under averages.
G. COLLISIONS
Collisions - impact of 2 vessels both of which are moving.
Allision - impact between a moving vessel and a stationary one.
3 Zones of Time in the Collision of vessels:
1. First zone all time up to the moment when risk of collision begins;
2. Second zone time between moment when risk of collision begins and
moment it becomes a practical certainty;
3. Third zone time when collision is certain and time of impact.
Error in Extremis - sudden movement made by a faultless vessel during the
3rd zone of collision with another vessel which is at fault during the 2nd zone.
Even if such sudden movement is wrong, no responsibility will fall on said
faultless vessel. (Urrutia and Co. v. Baco River Plantation Co., 26 PHIL 632).
Rules on Collision of Vessels under Code of Commerce:
1. The collision may be due to the fault, negligence or lack of skill of the
captain, sailing mate, or any other member of the complement of the
vessel. The owner of the vessel at fault be liable for losses or damage.
(Art. 826)
2. The collision may be due to the fault of both vessels. Each vessel shall
suffer its own losses, but as regards the owner of cargoes both vessels
shall be jointly and severally liable. (Art. 827)
3. If it cannot be determined which vessel is at fault. Each vessel shall also
suffer its own losses and both shall be solidarily liable for losses o
damages on the cargoes. (Art. 828)
4. The vessels may collide with each other through fortuitous event or force
majeure. In this case each shall bear its own damage. (Art. 830)
5. Two vessels may collide with each other without their fault by reason of a
third vessel. The third vessel will be liable for losses and damages. (Art.
831)
6. A vessel which is properly anchored and moored may collide with those
nearby reasons of storm or other cause of force majeure. The vessel run
into shall suffer its own damage and expense. (Art. 832)
1.
2.
SUCCESSFUL SAVING
Both vessel and goods must be saved
If vessel not saved, no general averages. Even if goods were saved
You have to start with resolution, placing of reso in the log book,
accounting of goods thrown away starting those on deck and to
follow from those not on deck (read 83-815)
American Home insurance (take note this case--- bar)
Transportation of tv sets, the shipcapatain was uprised of the
typhoon. Still captain continued with the journey. Then na abot ang
typhoon captain directed that the tv sets should be jettison. Saved
vessel. Reklamo owner. Is there general average? No. if the
shipowner is negligent, the law on general averages does not apply.
3.
4.
5.
One vessel at fault such vessel is liable for damage caused to innocent
vessel as well as damages suffered by the owners of cargo of both vessels.
Both vessels at fault each vessel must bear its own loss, but the shippers
of both vessels may go against the ship owners who will be solidarily
liable.
Vessel at fault not known same as rule as (2). (Doctrine of Inscrutable
Fault)
Third vessel at fault same rule as (1).
Fortuitous event no liability. Each bears its own loss.
Prerequisite to recovery:
Protest should be made within 24 hours before the competent authority at
the point of collision or at the first port of arrival, if in the Philippines and to the
Philippine consul, if the collision took place abroad. (Art. 835)
Injuries to persons and damage to cargo of owners not on board on collision
time need not be protested. (Art. 836)
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Custody of cargo:
intrusted to the captain (except in cases of force majeure)
(Art. 823)
if entire cargo or part thereof should appear to be damaged, or there
should be imminent danger of its being damaged
captain may request judge of competent court / consul, the sale
of all or part of the cargo
person taking cognizance shall authorize it (after examination and
declaration)
captain shall justify the legality of his conduct, answering to the
shipper for the price of the merchandise would have brought if they
had arrived in good condition
(Art. 824)
Liability of captain:
captain responsible for the damages caused by his delay
if cause of arrival under stress ceases he should not continue the
voyage
if cause of arrival should have been the fear of enemies
deliberation and resolution (in a meeting of officers of the vessel and
persons interested in the cargo) shall precede the departure
(Art. 825)
* Shipwreck the demolition or shattering of a vessel caused by her driving
ashore or on rocks and shoals in the midseas, or by the violence of winds or
waves in tempests
- loss of the vessel at sea as a consequence of its grounding, or running against
an object in sea or on the coast
Loss or deteriorations of vessel or cargo caused by shipwreck or stranding
individually account of the owners; part which may be saved belonging to them,
same proportion. (Art. 840)
If the wreck was due to malice, negligence or lack of skill of the captain, the
owner of the vessel may demand indemnity from said captain. (Art. 841)
The goods saved from the wreck to be specially bound for the payment of
the expenses of the respective salvage. (Art. 842)
If several vessels sail under convoy, and any of them should be wrecked, the
cargo saved will be distributed among the rest in proportion to the amount
which each one is able to take. If any captain should refuse, without sufficient
cause, to receive what may correspond to him, the captain of the wrecked
vessel to enter a marine protest against him. If it is not possible to transfer to
the other vessels the entire cargo of the vessel wrecked, the goods of the
highest value and smallest volume to be saved first. Designation to be made by
the captain with concurrence of his officers. (Art. 843)
The captain taking on-board the goods saved from the wreck to continue his
course to the port of destination and upon arrival he should deposit the goods
for disposal to their owners. In case the captain changes his course, and if he
can unload them at the port of which they were consigned, he may make said
port if the shippers or supercargoes present and the officers and passengers of
the vessel consent thereto. But he is not required to do so even if he has the
consent during time of war or when the port is difficult and dangerous to make.
The owners of the cargo to defray all the expenses of this arrival and the
payment of the freightage. (Art. 844)
If cannot be, proceed to judicial sale complying with the formalities and on
publicity. (Art. 845)
I. SALVAGE LAW (Act No. 2616)
* SALVAGE services one person renders to the owner of a ship or goods, by his
own labor, preserving the goods or the ship which the owner or those entrusted
with the care of them have either abandoned in distress at sea, or are unable to
protect or secure.
Kinds of Salvage:
Voluntary compensation is dependent on the success.
Under contract for a per diem or per horam wage payable at all
events.
Under contract for compensation payable only in case of success.
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Jetsam goods that were thrown off a ship which was in danger
Flotsam goods that floated off the ship while ship was in danger or
when it sank
Ligan goods left as sea on the wreck or tied to a buoy so that they
can be recovered later
Basis of entitlement to salvage reward (Circumstances to consider):
1. The labor expended by the salvors in rendering the salvage service
2. The promptitude, skill and energy displayed in rendering the service
and saving the property
3. The value of the property employed by the salvors in rendering the
service, and danger to which such property was exposed
4. The risk incurred by the salvors in rescuing the property from the
impending peril
5. The value of the property salved
6. The degree of danger which the property was rescued
Rights and obligations of salvors and owners:
Salvor is entitled to compensation for services rendered. He has,
under the Salvage Law, a lien upon the property salvaged.
On the other hand, the owner does not denounce his right to the
property. There is no presumption of an intention to abandon such
property rights.
Maritime Lien
A salvor, in maritime law, has an interest in the property; called a lien, but it
never goes, in the absence of a contract expressly made, upon the idea of debt
due from the owner to the salvor but upon the principle that the service creates
a property in the thing saved.
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New Civil Code primary law on goods that are being transported
from a foreign port to the Philippines
COGSA remains to be a suppletory law for such type of
transportation international shipping
ART. 1753, NCC: THE LAW OF THE COUNTRY TO WHICH THE GOODS ARE TO BE
TRANSPORTED SHALL GOVERN THE LIABILITY OF THE COMMON CARRIER FOR
THEIR LOSS, DESTRUCTION OR DETERIORATION.
* Goods includes goods, wares, merchandise, and articles of every kinds
whatsoever
- does not include live animals and cargo which by the contract of
carriage is stated as being carried on deck and is so carried
Parties:
Carrier, and
Shipper
- They are given their respective rights and obligations under COGSA.
- Carrier (covered by COGSA) not limited to the shipowner; includes
charterer who enters into a contract of carriage with the shipper
- Charterer charters a vessel and conducts his own business for his own
account
after chartering the vessel, he uses the vessel to conduct a
business of transportation obtaining goods from 3rd persons to transport the
latters goods
Duties of the carrier:
Civil Code requires international carriers to exercise extraordinary
diligence in the performance of their contractual obligations
Section 2 of COGSA carriers obligation and liabilities in relation to
the loading, handling, stowage, carriage, custody, care and discharge
of such goods
Section 3 of COGSA responsibilities of the carrier under COGSA
Document of title required
- evidenced by the Bill of Lading
- BOL serves as prima facie evidence of the receipt by the carrier of the goods
Notice of claim and prescriptive period
* Notice of claim must be made within 3 days from delivery if the damage is
not apparent; not mandatory
* Prescriptive period 1 year from delivery for the filing of the case is a
condition precedent or mandatory; does not apply to cases of misdelivery or
conversion
Defenses and immunities
- provided for by Section 4 of COGSA
- Section 49(1) of COGSA carrier shall not be liable for loss or damages arising
from unseaworthiness
- New Civil Code carrier will not be liable only if it can present proof that the
unseaworthiness was caused exclusively by any of the circumstances specified
in Art. 1734 of the NCC
Waiver
- The shipowner and the ship agent may waive the benefit of any of the
defenses in its favor provided not only under COGSA but also under other laws
Limiting provision
- COGSA contains a provision that allows the shipper to recover only US$500 per
package unless there is a special declaration unless there the real value of the
goods is declared
- declaration made by the shipper stating an amount bigger than $500 per
package will make the carrier liable for such bigger amount but only if the
amount so declared is the real value of the goods
Right to discharge dangerous cargo
- COGSA allows the carrier to discharge the good of the carrier discovers that
the goods are dangerous, inflammable or are explosives
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