TRANSPO Aquino Notes 1 PDF

otes on Transportation Law
LAW O TRASPORTATIO AD PUBLIC UTILITIES
CHAPTER 1 c. has a bona fide intention to use facilities

of the carrier
Contract of Transportation – person obligates
himself to transport persons or property from one 2. CARRIAGE OF GOODS
place to another for a consideration.
Parties: shipper & carrier
2 KIDS:
Perfection:
1. CARRIAGE OF PASSEGERS > contract to carry goods – consensual
> contract of carriage - act of delivery of goods
Parties: common carrier & passenger (carried (goods are unconditionally placed in the
gratuitously or not) possession and control of the carrier and upon
their receipt by the carrier for transportation)
Perfection:
CARRIER:
> contract to carry (agreement to carry the Common carriers (CC) (1732)
passenger at some future date) – consensual – persons, corporations, firms or
contract and perfected by mere consent associations engaged in the business of
carrying or transporting passengers or
* AIRCRAFT – perfected even without issuance goods or both, by land, water, or air, for
of ticket as long as there was already meeting of compensation, offering their services to
minds with respect to the subject matter and the public. (NOT the means of
consideration transportation)
– one that holds itself out as ready to engage
> contract of carriage in the transportation of goods for hire as a
– real contract; not until the facilities of the carrier public employment and not as a casual
are actually used can the carrier be said to have occupation.
assumed the obligation of the carrier; perfected by
actual use. Tests for determining WON a party is a common
carrier of goods:
* AIRCRAFT – perfected if it was established that 1. He must be engaged in the business of
the passenger had checked in at the departure carrying goods for others as a public
counter, passed through customs and immigration, employment, and must hold himself out as
boarded the shuttle bus and proceeded to the ramp ready to engage in the transportation of
of the aircraft and baggage already loaded to the goods for persons generally as a business
aircraft. and not as a casual occupation.
2. He must undertake to carry good of the
* Public Utility Bus or Jeepneys – once it stops it kind to which his business is confined.
is in effect making a continuous offer to riders; 3. he must undertake to carry by the method
perfected when passenger is already attempting to by which his business is conducted and
board the vehicle over his established roads
4. transportation must be for hire.
* TRAINS – perfected when a person:
a. purchased a ticket/ possess sufficient Characteristics of Common carriers (CC):
fare with which to pay for his passage no distinction between one whose
b. presented himself at the proper place principal business is the transportation of
and in a proper manner to be transported
San Beda College of Law A. D. AVILA | H. MORAŇA 1

persons/goods and one who does such as the use or operation of vessels. Services are not
an ancillary business maritime.
still a CC even if services offered to a
limited clientele Stevedoring- involves the loading and unloading
pipeline operators are CCs – not of coastwise vessels calling at the port.
necessarily motor vehicles
>>> Common carriers are public utilities,
CHARTER PARTY: impressed with public interest and concern subject
- contract by which an entire ship or some to regulation by the state.
principal part thereof is let by the owner to another
person for a specified time or use. REGISTERED OWER RULE
- the registered owner of a vehicle is liable from
2 types: any damage caused by the negligent operation
of the vehicle although the same was already
1. Contract of affreightment sold or conveyed to another person at the time
– involves the use of shipping space on vessels of the accident.
leased by the owner in part or as a whole, to carry - The registered owner is liable to the injured
goods for another party subject to his right of recourse against
- CC = observe extraordinary diligence; in case of the transferee or the buyer
loss, deterioration or destruction of goods of - Applicable in case of lease
goods, CCs are presumed to be at fault or have - Registered owner not liable if vehicle was
acted negligently taken from him without his knowledge and
consent.
2. Charter by demise/ Bareboat Charter
– whole vessel is let to the charterer with a transfer - Applicable to people involved on a “kabit
to him of its entire command and possession and system” (arrangement whereby a person who
consequent control over its navigation including has been granted a certificate of public
the master and the crew who are his servants. convenience allows other persons who own
- charter includes both vessel and crew—CC motor vehicles to operate them under his
becomes private carrier (PC) insofar as that license, sometimes for a fee or percentage of
particular voyage is concerned the earnings --- contrary to public policy)
- if PC- ordinary diligence in the carriage of goods • parties to the “kabit system” cannot
will suffice invoke the same as against each other
- PC = undertaking is a single transaction, not a either to enforce their illegal agreement or
part of the general business or occupation, to invoke the same to escape liability ---
although involving the carriage of goods for a fee; pari delicto rule
NO presumption of negligence applies – • having entered into an illegal contract,
whosoever alleges damage to or deterioration of neither can seek relief from the courts and
the goods carried has the burden of proving that each must bear the consequences of his
the cause was the negligence of the carrier. acts
• also applicable to aircrafts and vessels –
CCs v. Towage, Arrastre and Stevedoring basic rule that no person can operate a
common carrier without securing a
Towage- a vessel is hired to bring another vessel certificate of public convenience and
to another place necessity.
e.g. a tugboat may be hired by CC to bring the
vessel to a port (operator of tugboat not CC)
Arrastre operator’s functions has nothing to do

with the trade and business of navigation nor to

CHAPTER 2 carriage; and 3) the general nature of the business

OBLIGATIOS OF THE PARTIES done by the carrier.
I. Obligations of the carrier (1) Hazardous and Dangerous Substances

A. DUTY TO ACCEPT Carrier not properly equipped to transport
A common carrier granted a certificate dangerous chemicals or explosives may validly
of public convenience is duty bound to accept refuse to accept the same for transport. Those
passengers or cargo without any discrimination. which are not authorized by the Maritime Industry
Authority to carry such goods may also validly
It is illegal for domestic ship operators to refuse the same for transport. There must be a
refuse to accept or carry passengers or cargo Special Permit to Carry from the MARINA.
without just cause. (Section 16, RA 9295)
(2) Unfit for Transport
In air transportation, passengers with Carriers may refuse to accept goods that are unfit
confirmed tickets who were not allowed to for transportation (by nature be unfit for
board are provided with denied boarding transportation or are unfit because of improper
compensation and priority boarding rules. No packaging or defect in their containers). However,
compensation for refusal if it is because of 1) carriers may accept the goods and limit its liability
government requisition of the space, 2) by stipulation.
substitution of equipment of lesser capacity
when required by operational and or safety If by reason of well-founded suspicion of falsity in
and/or other causes beyond the control of the the declaration as to the contents of the package
carrier, and 3) if arrangements have been carrier should decide to examine and investigate it
made for the passenger to take another flight in the presence of witnesses, with the shipper and
in a comparable air transportation which will consignee in attendance. If declaration of shipper
arrive not later than three hours after the time is true, expenses occasioned by the examination
of flight on which the confirmed space is held and of repacking the packages shall be for the
is supposed to arrive. (Civil Aeronautics account of the carrier
Board Economic Regulation)
Even if the cause of the loss, destruction or
a. Grounds for valid refusal to accept goods deterioration of the goods should be caused by the
1. dangerous objects or substances character of the goods, or the faulty nature of the
including dynamites and other explosives packing or of the containers, the common carrier
2. goods are unfit for transportation must exercise due diligence to forestall or lessen
3. acceptance would result in overloading the loss.
4. contrabands or illegal goods
5. goods injurious to health B. DUTY TO DELIVER THE GOODS
6. goods will be exposed to untoward
danger like flood, capture by enemies and a. Time of Delivery
the like Where a carrier has made an express contract, the
7. goods like livestock will be exposed to goods must be delivered within a specified time
diseases otherwise he is liable for any delay (indemnity for
8. strike damages). In the absence of any agreement, goods
9. failure to tender goods on time must be delivered at its destination within a
reasonable time (depending on the attending
In Fisher v. Yangco, factors in determining circumstances, nature of the goods).
reasonable discrimination include, 1) suitability to
the vessel for the transportation of such products; b. Consequences/Effects of Delay
2) reasonable possibility of danger or disaster Excusable delays in carriage suspend, but do not
resulting from their transportation in the form and generally terminate, the contract of carriage; when
under the conditions in which they are offered for the cause is removed, the master must proceed
with the voyage and make delivery. During the losses and damages if the interruption is due to
detention or delay, vessel continues to be liable as fortuitous event of force majeure, but with a right
a common carrier, not a warehouseman, and to indemnity if the interruption should have been
remains duty bound to exercise extraordinary caused by the captain exclusively. If the
diligence. interruption should be caused by the disability of
the vessel and a passenger should agree to await
If common carrier negligently delays in the repairs, he may not be required to pay any
transporting the goods, a natural disaster shall not increased price of passage, but his living expenses
free it from responsibility. during the stay shall be for his own account.
If common carrier delays , without just cause, in In case the vessel is not able to depart on time and
transporting the goods or changes the stipulated or the delay is unreasonable, the passenger may opt
usual route, the contract limiting its liability to have his/her ticket immediately refunded
cannot be availed of in case of the loss, without any refund service fee from the authorized
destruction, or deterioration of the goods. issuing/ticketing office.
(1) Abandonment C. WHERE AND TO WHOM DELIVERED

In case of delay through the fault of the carrier, the a. Place
consignee may refuse to accept the goods or may Goods should be delivered to the consignee in the
leave the goods in the hands of the carrier. It must place agreed upon by the parties.
be communicated to the carrier in writing. This
right must be exercised between the time of delay The shipper may change the consignment of the
and before the arrival of the goods at its goods provided that at the time of ordering the
destination. The carrier must pay the full value of change of the consignee the bill of lading signed
the goods as if they had been lost or mislaid. by the carrier be returned to him, in exchange for
another wherein the novation of the contract
If abandonment is not made, indemnification for appears. The expenses occasioned by the change
the losses and damages by reason of the delay shall be for the account of the shipper.
cannot exceed the current price which the goods
would have on the day and at the place they are to b. Consignee
be delivered. Delivery must generally be made to the owner or
consignee or to someone lawfully authorized by
The value of the goods which the carrier must pay him to receive the goods for his account or to the
in case of loss or misplacement shall be that what holder of the negotiable instrument.
is declared in the bill of lading.
c. Delay to Transport Passengers
Consignee must not defer the payment of the Effects of ‘delayed and unfinished voyage’ in
expenses and transportation charges of the goods inter-island vessels:
otherwise carrier may demand the judicial sale of • vessel can not continue or complete her
the goods. voyage for any cause – carrier is under
obligation to transport the passenger to
(2) Rights of Passengers in Case of Delay his/her destination at the expense of the
As to the rights and duties of the parties strictly carrier including free meals and lodging
arising out of delay, the Civil Code is silent. before the passenger is transported to
However, the Code of Commerce provides for his/her destination; the passenger may opt
such a situation: to have his/her ticket refunded in full if the
cause of the unfinished voyage is due to
ARTICLE 698. In case a voyage already begun the negligence of the carrier or to an
should be interrupted, the passengers shall be amount that will suffice to defray
obliged to pay the fare in proportion to the transportation cost at the shortest possible
distance covered, without Right to recover for
route if the cause of the unfinished voyage actually or constructively, by the carrier to the
is fortuitous event. consignee or to the person who has a right to
• vessel is delayed in arrival at the port of receive them…
destination – free meals during mealtime
• delay in departure at the point of origin ARTICLE 1737. The common carrier’s duty to
due to carrier’s negligence; fortuitous observe extraordinary diligence over the goods
event - free meals during mealtime; remains in full force and effect even when they are
carrier not obliged to serve free meals temporarily unloaded or stored in transit, unless
• carrier is not obliged to inform passengers the shipper or owner has made use of the right of
of sailing schedule of the vessel stoppage in transitu. (common carrier becomes a
warehouseman – ordinary diligence)
B.DUTY TO EXERCISE EXTRAORDINARY
DELIGENCE ARTICLE 1738. The extraordinary liability of the
Goods should be delivered in the same common carrier continues to be operative even
condition that they were received and to transport during the time the goods are stored in a
the passengers without encountering any harm or warehouse of the carrier at the place if destination,
loss. until the consignee has been advised of the arrival
of the goods and has had reasonable opportunity
ARTICLE 1755. A common carrier is bound to thereafter to remove them or otherwise dispose of
carry the passengers safely as far as human care them.
and foresight can provide, using the utmost
diligence of very cautious persons, with a due (2) Carriage of Passengers
regard for all the circumstances. (Civil Code) By trains – the extraordinary responsibility of
common carrier commences the moment the
a. Presumption of Negligence person who purchases the ticket (or a ‘token’ or
Two conditions for the birth of the presumption of ‘card’) from the carrier presents himself at the
negligence: proper place and in a proper manner to be
1. there exists a contract between the transported with a bona fide intent to ride the
passenger or the shipper and the common coach.
carrier
2. the loss, deterioration, injury or death took * Mere purchase of a ticket does not of itself
place during the existence of the contract create the relation of carrier and passenger but it is
an element in the inception of the relation.
Doctrine of Proximate Cause – there is
presumption of negligence * A proper person who enters upon the carrier’s
If the goods are lost, destroyed or deteriorated, premises (station, ticketing office, or waiting
common carriers are presumed to have acted room) with the intention of becoming a passenger
negligently, unless they prove that they observed will ordinarily be viewed as assuming the status of
extraordinary diligence. In case of death of or a passenger.
injuries to passengers, common carriers are
presumed to have been at fault or to have acted * One who goes to the railroad station to inquire as
negligently, unless they prove that they observed to the possibility of securing passage on a freight
extraordinary diligence. train, which he knows, by the rules of the
company, is not allowed to carry passengers, and
b. Duration of Duty to secure passage thereon if possible, is not
(1) Carriage of Goods entitled to the rights of a passenger but is a mere
ARTICLE 1736. The extraordinary responsibility trespasser.
of the common carrier lasts from the time the
goods are unconditionally placed in the * One who rides upon any part of the vehicle or
possession of, and received by the carrier for conveyance which is unsuitable or dangerous, or
transportation until the same are delivered,
which he knows is not intended for passengers, is 2. It must be impossible to foresee the event which
not presumed to be a passenger. constitutes the caso fortuito, or if it can be
foreseen, it must be impossible
* One who secures free passage by fraud or stealth to avoid
is precluded from recovery for injuries sustained 3. The occurrence must be such as to render it
through the negligence of the carrier, for he has impossible for the debtor to fulfill his obligation in
not assumed the status of a passenger. a normal manner
4. The obligor (debtor) must be free from any
* A person riding on a freight train, on a driver’s participation in or the aggravation of the injury
pass or similar arrangement, to look after livestock resulting to the creditor
being transported and as incident to such
transportation is, generally regarded as a passenger In order for the common carrier to be exempted
for hire. from responsibility, the natural disaster must have
been the proximate and only cause of the loss.
* Motor vehicles like jeepneys and buses are duty However, the common carrier must exercise due
bound to stop their conveyances for a reasonable diligence to prevent or minimize loss before,
length of time in order to afford passengers an during and after the occurrence of flood, storm or
opportunity to board and enter, and they are liable other natural disaster in order that the common
for injuries suffered by boarding passengers carrier may be exempted from liability for the loss,
resulting from the sudden starting up or jerking of destruction, or deterioration of the goods.
their conveyances while they do so. Once a public
utility bus or jeepney stops, it is making a Fire – not considered as a natural calamity or
continuous offer to bus riders. disaster
Duty to exercise utmost diligence with respect to Fire caused by lightning – a natural calamity
passengers will not ordinarily terminate until the
passenger has, after reaching his destination, Hijacking – does not fall under the categories of
safely alighted from the carrier’s conveyance or exempting causes; the common carrier is
had a reasonable opportunity to leave the carriers presumed to be at fault or to have acted
premises. negligently unless there is a proof of extraordinary
diligence on its part
E. DEFENSES OF COMMON CARRIERS
1. Flood, storm, earthquake, lightning, or other Mechanical defects – damage or injury resulting
natural disaster or calamity from mechanical defects is not a damage or injury
2. Act of the public enemy in war, whether that was caused by fortuitous event; carrier is
international or civil liable to its passengers for damages caused by
3. Act or omission of the shipper or owner of the mechanical defects of the conveyance (breakage of
goods a faulty drag-link spring, fracture of the vehicle’s
4. The character of the goods or defects in the right steering knuckle, defective breaks)
packing or in the containers
5. Order or act of competent public authority Pages 123-190
6. Exercise of extraordinary diligence Juntilla v. Fontanar
“Tire-blowouts” was not considered as fortuitous
Fortuitous Event – to be a valid defense must be event although it was alleged that the tires were in
established to be the proximate cause of the loss good condition; no evidence was presented to
show that the evidence were due to adverse road
Requisites: conditions – the carrier must prove all angles.
1. The cause of the unforeseen and the unexpected The explosion could have been caused by too
occurrence, or of the failure of the debtor to much air pressure injected into the tires and the
comply with his obligation, fact that the jeepney was overloaded and speeding
must be independent of the human will at the time of the accident.
measures to secure safety of

b. OTHER INVALID DEFENSES passengers since the incident was
1. Damage to cargo due to EXPLOSION of foreseeable. .
another cargo – not attributable to peril of the seas HOWEVER, if the stone throwing
or accidents of navigation. was entirely unforeseeable and the
2. Damage by WORMS and RATS resulting to carrier exercised the utmost diligence,
damage to cargoes – can’t be cited as an excuse by then, the bus can’t be held liable.
the carrier. Nonetheless, the burden of proof Is on
3. Damage by WATER through a port which had the carrier to prove such exercise of
been left open or insufficiently fastened on sailing. diligence. It is up to the carrier to
4. Carrier cannot escape liabilities to third persons overthrow the presumption of
if damage was caused by BARRATRY – where negligence.
the master or crew of the ship committed unlawful If the passenger decides to file a case,
acts contrary to their duties – includes theft and al the passenger has to do is to prove
fraudulently running the ship ashore. that she was a passenger of the bus
and that she suffered injuries while on
Cases: board the bus.
1. Problem: A carrier bus on its way to its
destination encountered an engine failure, (b) Supposing that there were armed men
thus, it has to be repaired for 2 days. And who staged a hold-up while the bus
while in the repair shop, a typhoon came was speeding along the highway. One
resulting to the spoilage of cargoes. of them stole the passenger’s bag and
Answer: A typhoon although a natural wallet while pointing a gun him. Is the
disaster, is not a valid defense if it is bus liable?
shown that it was not the only cause of the Answer: No. Hand-carried luggages
loss. Especially when the facts indicate are governed by necessary deposit.
that the typhoon was foreseeable and Besides, theft with use of arms or
could have been detected through the through irresistible force is a force
exercise of reasonable care. Cargoes majeure which exempts carriers from
should have been secured while the bus liability.
was being repaired for 2 days.
3. Hi-jacking cannot exculpate the carrier
2. Problem: A passenger told the driver that from liability if it is shown that the
he has valuable items in his bag which employees of the carrier were not
was placed under his feet and he asked the overwhelmed by the hijackers and that
driver (to which he is seated near) to there was no showing of irresistible force.
watch for the bag while he is asleep. Since, there were 4 employers while there
were only 2 hijackers and only one of
(a) There have been incidents of throwing them was armed with bladed weapon.
of stones at passing vehicles in the ON THE OTHER HAND, a hijacking by
North Express Way. While the bus 3 armed men is an event which is
was traversing the super highway, a considered to be beyond the control of the
stone hurled from the overpass and hit carrier. Thus, the carrier may be adjudged
the passenger resulting to injuries. from liability if it can be proven that the
Can the passenger hold the bus liable hijacking was unforeseeable.
for damages?
Answer: Yes. The incident was c. PUBLIC ENEMY
foreseeable due the prior incidents of - presupposes a state of war and refers to the
stone hurling. The bus should have government of a foreign nation at war with the
exercised utmost diligence and country to which the carrier belongs, though not
employed adequate precautionary
necessarily with that to which the owner of the carrier does not know but the defect was
gods owes allegiance. nonetheless apparent upon ordinary
- Thieves, rioter, and insurrectionists are not observation, it is not relived form liability for loss
included. They are merely private depredators for or injury to goods resulting therefrom.
whose acts a carrier is answerable.
- Rebels in insurrection against their own Cases:
government are generally not embraced in the 1. Problem: A carrier knowing that some of a
definition of public enemy. However, if the rebels cargo of sacks of rice had big holes and
hold a portion of territory, they have declared their others had openings just loosely tied with
impendence, cast off their allegiance and has strings resulting to the spillage of rice
organized armed hostility to the government, and during the trip. Thus, there was shortage
the authority of the latter is at the time overthrown, in the delivery of the cargoes. When sued
such an uprising may take on the dignity of a civil due to the shortage, the carrier interposed
war, and so matured and magnified, the parties are a defense that it was not liable since the
belligerent and are entitled to belligerent rights. shortage was due to the defective
- Depredation by pirates (which are enemy of all condition of the sacks. Decide.
civilized nation) excuses the carrier from liability. Answer: Carrier must still exercise
- Common carriers may be exempted from extraordinary diligence if the fact of
responsibility only if the act of the public enemy improper packing is known to the carrier
has been the proximate and only cause of the loss. or its servants, or apparent upon ordinary
Moreover, due diligence must be exercised to observation. If the carrier accepted the
prevent or at least minimize the loss before, during cargo despite such defects, the carriers
and after the performance of the act of the public becomes liable for the damage resulting
enemy in order that the carrier may be exempted therefrom. Apply Article 1742.
from liability for the loss, destruction, or
deterioration of the goods. e. ORDER OF PUBLIC AUTHORITY
Art. 1743. If through the order of public authority
the goods are seized or destroyed, the common
d. IMPROPER PACKING carrier is not responsible, provided said public
authority had power to issue order.
Character of the goods and defects in the
packaging or in the containers are defenses Cases:
available to the common carrier. Similarly, the 1. Carrier was not excused from liability
Carriage of Good b Sea Act provides that carrier since the order of an acting mayor was not
shall not liable for: (1) wastage in bulk or weight considered as a valid order of a public
or any damages arising form the inherent defect, authority. It is required that public
quality or vice of goods; (2) insufficiency of authority who issued the order must be
packing; (3) insufficiency or inadequacy of the duly authorized to issue the order.
marks, or (4) latent defects no discoverable by due 2. Carriage of Goods by Sea Act – provides
diligence. that carrier shall not responsible for loss or
damage resulting from “arrest or restraint
However, NCC likewise provides: of princes, rulers, or people, or seizure
Art. 1742. Even if the loss, destruction, or under legal process” and from “quarantine
deterioration of the goods should be caused by restrictions”.
the character of the goods, or the faulty nature
of the packing or the containers, the common F. DEFESES I CARRIAGE OF
carrier must exercise due diligence to forestall PASSEGERS
or lessen the loss.
- Primary defense of carrier is exercise of
Thus, if the carrier accepted the goods knowing extraordinary diligence in transporting
the fact of improper packing or even if the passengers. Even if there is a fortuitous event, the
carriers must also present proof of exercise of

extraordinary diligence. With respect to acts of strangers and other
passengers resulting in injury to apassenger,
Art. 1759. Common carriers are liable for the the availability of such defense is also subject
death of or injuries to passengers through the to the exercise of a carrier of due diligence to
negligence or willful acts of the carrier’s prevent or stop the act or omission.
employees, although such employees may have Negligence of the carrier need not be the sole
acted beyond the scope of their authority or in cause of the damage or injury to the passenger
violation of the orders of the common carriers. or the goods. The carrier would still be liable
The liability does not cease even upon proof even if the contractual breach concurs with the
that they exercised diligence in the selection negligent act or omission of another person.
and supervision of their employees.
G. PASSEGER’S BAGGAGES
Art. 1763. Carrier is responsible for injuries Rules that are applicable to goods that are being
suffered by a passenger on account of the shipped are also applicable to baggage delivered to
willful acts or negligence of other passengers or the custody of the carrier. Arts. 1733. 1734 and
of strangers, if the common carrier’s employees 1736 of Civil Code are applicable.
through the exercise of the diligence of a good However, if the luggage was hand-carried, Arts.
father of a family could have prevented or 1998, 2000-2003 shall apply.
stopped the act or omission. Art. 1998. The deposit of effects made by the
travellers in hotels or inns shall also be
a. Employees regarded as necessary. The keepers of hotels or
- Carrier is liable for the acts of its inns shall be responsible for them as
employees. It can’t escape liability by depositaries, provided that notice was given to
claiming that it exercised due diligence in them, or to their employees, of the effects
supervision and selection of its employees brought by the guests and that, on the part of
(unlike in quasi-delicts). the latter, they take the precautions which said
hotel-keepers or their substitutes advised
Reasons for the rule: relative to the care and vigilance of their
1. Undertaking of the carrier requires that its effects. (1783)
passenger that full measure of protection
afforded by the exercise of high degree of Art. 2000. The responsibility referred to in the
care prescribed by law, inter alia from two preceding articles shall include the loss of,
violence and insults at the hands of or injury to the personal property of the guests
strangers and other passengers, but above caused by the servants or employees of the
all, from the acts of the carrier’s own keepers of hotels or inns as well as strangers;
servants. but not that which may proceed from any force
2. The liability of the carrier for the servant’s majeure. The fact that travellers are
violation of duty to performance of his constrained to rely on the vigilance of the
contract to safely transport the passenger, keeper of the hotels or inns shall be considered
delegating therewith the duty of protecting in determining the degree of care required of
the passenger with utmost care prescribed him. (1784a)
by law.
3. As between the carrier and the passenger, Art. 2001. The act of a thief or robber, who has
the former must bear the risk of wrongful entered the hotel is not deemed force majeure,
acts or negligence of the carrier’s unless it is done with the use of arms or through
employees against passenger, since it, and an irresistible force. (n)
not the passenger, has the power to select
and remove them. Art. 2002. The hotel-keeper is not liable for
compensation if the loss is due to the acts of the
b. Other Passengers and Third Persons
guest, his family, servants or visitors, or if the However, if the negligence of the shipper/
loss arises from the character of the things passenger is the proximate and only cause of
brought into the hotel. (n) the loss, then, the carrier shall not be liable.
The carrier may overcome the presumption of
Art. 2003. The hotel-keeper cannot free himself negligence and any be able to prove that it
from responsibility by posting notices to the exercised extraordinary diligence in handling
effect that he is not liable for the articles the goods or in transporting the passenger.
brought by the guest. Any stipulation between The carrier may be able to prove that the only
the hotel-keeper and the guest whereby the cause of the loss of the goods is any of the
responsibility of the former as set forth in following:
articles 1998 to 2001 is suppressed or 1. Failure of the shipper to disclose the
diminished shall be void. (n) nature of the goods;
2. Improper marking or direction as to the
Cases: destination;
1. Despite the fact that the carrier gave 3. Improper loading when he assumes such
notice that it shall not be liable for responsibility.
baggage brought in by passengers, the The shipper must likewise see to it that the
carrier is still liable for lost hand-carried goods are properly packed; otherwise, liability
luggage since it is governed by rules on of the carrier may either be mitigated or barred
necessary deposits. Under Art. 20000, the depending on the circumstances.
responsibility of the depositary includes
the loss of property of the guest caused by Art. 1741. If the shipper or owner merely
strangers but not that which may proceed contributed to the loss, destruction or
from force majeure. Moreover, article deterioration of the goods, the proximate
2001 considers theft as force majeure if it cause thereof being the negligence of the
is done with use of arms or through common carrier, the latter shall be liable in
irresistible force. damages, which however, shall be equitably
2. Even if the passenger did not declare his reduced.
baggage nor pay its charges contrary to
the regulations of the bus company, the Art. 1761. The passenger must observe the
carrier is still liable in case of loss of the diligence of a good father of a family to avoid
baggage. Since, it has the duty to exercise injury to himself.
extraordinary diligence over the baggage
that was turned over to the carrier or Art. 1762. The contributory negligence of the
placed in the baggage compartment of the passenger does not bar recovery of damages for
bus. The non-payment of the charges is his death or injuries, if the proximate cause
immaterial as long as the baggage was thereof is the negligence of the common carrier,
received by the carrier for transportation. but the amount of damages shall be equitably
reduced.
II. OBLIGATIONS OF SHIPPER, CONSIGNEE
and PASSENGER. a. Last Clear Chance
A. Negligence of Shipper or Passenger
The obligation to exercise due diligence is not A negligent carrier is liable to a negligent
limited to the carrier. The shipper is obliged to passenger in placing himself in peril, if the carrier
exercise due diligence in avoiding damage or was aware of the passenger’s peril, or should have
injury. Nevertheless, contributory negligence been aware of it in the reasonable exercise of due
on the part of the shipper/ passenger would care, had in fact an opportunity later than that of
only mitigate the carrier’s liability; it is not a the passenger to avoid an accident.
total excuse.

Last clear chance applies in a suit between the valid exercise of the Police Power of the state in
owners and drivers of colliding vehicles. It does order to protect the public from arbitrary and
no tarise where a passenger demands excessive rates while maintaining the efficiency
responsibility from the carrier to enforce its and quality of services rendered. The fixing of just
contractual obligations. For it would be and reasonable rates involves a balancing of
inequitable to exempt the negligent driver of the investor and the consumer interest.
carrier and its owner on the ground that the other Although the consideration that should be paid to
driver was likewise guilty of negligence. the carrier is still subject to the agreement between
parties, what can be agreed upon should not be
b. Assumption of Risk beyond the maximum amount fixed by appropriate
government agency.
Carriers are not insurers of the lives of their b. Who will pay.
passengers. Thus, in air travel, adverse weather Although either of the shipper or the consignor
conditions or extreme climatic changes are some may pay the freight before or at time the goods are
of the perils involved in air travel, the delivered to the carrier for shipment, nonetheless,
consequence of which the passenger must assume it is the consignor (whom the contract of carriage
or expect. is made) who is primarily liable for the payment of
freight whether or not he is the owner of the
However, there is no assumption of risk in a case goods. The obligation to pay is implied from the
wherein a passenger boarded a carrier that was mere fact that the consignor has placed the goods
filled to capacity. The act of the passenger in with the carrier for the purpose of transportation.
taking the extension chair does not amount to c. Time to pay.
implied assumption of risk. Code of Commerce provides that payment should
Case: be made within 24-hours from the time of delivery
Although, there is a sign in the bus that says: “do in the absence of any agreement between the
not talk to the driver while the bus is in motion, parties.
otherwise, the company would not assume
responsibility for any accident:. Nonetheless, the ARTICLE 374. The consignees to whom the
passengers dared the driver to race with another shipment was made may not defer the payment of
bus, as the bus speeds up in the attempt to the expenses and transportation charges of the
overtake the other bus, it failed to slow down. As a goods they receive after the lapse of twenty-four
result, the bus turns turtle causing the death and hours following their delivery; and in case of delay
injuries to passengers. Is the bus company liable? in this payment, the carrier may demand the
Answer: Yes. The bus company is obligated to judicial sale of the goods transported in an amount
exercise utmost diligence in carrying passengers. necessary to cover the cost of transportation and
This liability cannot be eliminated or limited by the expenses incurred.
simply posting notices. The passenger cannot be (1) Carriage of Passengers by Sea
said to have assumed the risk of being injured With respect to carriage of goods by sea, the
when he urged the driver to accept the dare. At tickets are purchased in advance. Carriers are not
most, the passengers can only be said to be guilty supposed to allow passengers without tickets. The
of contributory negligence which would mitigate carrier shall collect/ inspect the passenger’s ticket
the liability of the driver, since the proximate within one hour from vessel’s departure as not to
cause of the accident was the driver’s willful and disrupt resting or sleeping passengers.
reckless act in running the race with the other bus. If the vessel is not able to depart on time and the
delay is unreasonable, the passenger may opt to
B. FREIGHT have his/ her ticket refunded without refund
a. Amount to be Paid service fee.
Common carriers are subject to heavy regulations
with respect to rates that they are charging to the Delayed voyage means “late departure of the
public. The regulation of rates is founded upon 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 ot 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) Carrier’s Lien

If consignor or the consignee fails to pay the
consideration for the transportation of goods, the
carrier may exercise his lien in accordance with
Art. 375 of Code of Commerce:
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.
C. 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 common carrier (-ote: Typically

EXTRAORDIARY DILIGECE fare/freight); and
3. Reasonable, just and contrary to public
I. RATIONALE policy.
A common carrier is bound to carry the passengers
safely as far a human care and foresight provide, B. PASSENGERS
using the utmost diligence of very cautious There can be no stipulation lessening the utmost
persons, with due regard for all circumstances. diligence that is owed to passengers.
Extraordinary diligence: Calculated to protect the Art. 1757. The responsibility of a common
passengers from the tragic mishaps that frequently carrier for the safety of passengers as
occur in connection with rapid modern required in Arts. 1733 and 1755 cannot be
transportation. dispensed with or lessened by stipulation,
by the posting of notices, by statements on
tickets, or otherwise. (-ote: Absolute;
II. HOW DUTY IS COMPLIED WITH extraordinary at all times.)
Common carrier binds itself to carry the
passengers safely as far as human care and Gratuitous passenger – A stipulation limiting the
foresight can provide, using the utmost diligence common carrier’s liability for negligence is valid,
of a very cautious person, with due regard for all but not for willful acts of gross negligence. The
the circumstances. reduction of fare does not justify any limitation.
- The duty even extends to the members
of the crew or complement operating
the carrier. IV. EXTRAORDINARY DILIGENCE IN
CARRIAGE BY SEA
A reasonable man or a good father of a family in A. SEAWORTHINESS
the position of the carrier must exercise
extraordinary diligence in the performance of his a.) Warranty of Seaworthiness of Ship –
contractual obligation. Extraordinary diligence requires that the
- Whether or not a reasonable man, ship which will transport the passengers
exercising extraordinary diligence, and goods is seaworthy. Seaworthiness of
could have foreseen and prevented the the vessel is impliedly warranted.
damage or loss that occurred.
The carrier shall be bound before and at
III. EFFECT OF STIPULATION the beginning of the voyage to exercise
A. GOODS due diligence to make the ship seaworthy.
The law allows a stipulation whereby the carrier
will exercise a degree of diligence which is less b.) No duty to inquire – Because of the
than extraordinary with respect to goods. implied warranty of seaworthiness,
shippers of goods, when transacting with
Art. 1744. A stipulation between the common carriers, are not expected to
common carrier and the shipper owner inquire into the vessels seaworthiness,
limiting the liability of the former for the genuineness of its licenses and compliance
loss, destruction, or deterioration of the with all maritime laws. Passengers cannot
goods to a degree less than extraordinary be expected to inquire everytime they
diligence shall be valid, provided it be: board a common carrier, whether the
carrier possesses the necessary papers or
1. In writing, signed by the shipper/owner; that all the carrier’s employees are
2. Supported by a valuable consideration qualified.
other than the service rendered by the

It is the carrier that carries such burden of The carrier shall properly and carefully
proving that the ship is seaworthy. load, handle, stow, carry, keep, care for,
Presentation of certificates of and discharge the goods carried.
seaworthiness is not sufficient to
overcome the presumption of negligence. The ship must be cargoworthy. The ship
must be efficiently strong and equipped to
c.) Meaning of Seaworthiness – A vessel carry the particular kind of cargo which
must have such degree of fitness which an she has contracted to carry and her cargo
owner who is exercising extraordinary must be so loaded that it is safe for her to
diligence would require his vessel to have proceed on her voyage.
at the commencement of the voyage,
having regard to all the probable The vessel must be adequately equipped
circumstances of it. This includes fitness and properly manned. On top of regular
of the vessel itself to withstand the rigors maintenance and inspection, Captains,
of voyage, fitness of the vessel to store the masters or patrons of vessels must prove
cargoes and accommodate passengers to the skill, capacity, and qualifications
be transported and that it is adequately necessary to command and direct the
equipped and properly manned. vessel. If the owner of a vessel desires to
be the captain without having the legal
General Test of Seaworthiness: Whether qualifications, he shall limit himself to the
the ship and its appurtenances are financial administration of the vessel and
reasonably fit to perform the service shall entrust the navigation to a qualified
undertaken. person.
Example: The carrier was able to It is not an excuse that the carrier cannot
establish that the ship itself was afford the salaries of competent and
seaworthy because the records licensed crew or that latter is unavailable.
reveal that the vessel was
drydocked and inspected by the B. OVERLOADING
Phil. Coast Guard before its first Duty to exercise due diligence likewise includes
destination. the duty to take passengers or cargoes that are
within the carrying capacity of the vessel.
A warranty of seaworthiness requires that
it be properly laden, and provided with a C. PROPER STORAGE
competent master, a sufficient number of The vessel itself may be suitable for the cargo but
competent officers and seamen, and the this is not enough because the cargo must also be
requisite appurtenances and equipment. properly stored.
The carrier shall be bound before and at Cargo must generally not be placed on deck. The
the beginning of the voyage to exercise carrying of deck cargo raises the presumption of
due diligence to: unseaworthiness unless it can be shown that the
1. Make the ship seaworthy; deck cargo will not interfere with the proper
2. Properly man, equip, and management of the ship.
supply the ship;
3. Make all parts of the ship in D. NEGLIGENCE OF CAPTAIN AND CREW
which goods are carried, fit and Failure on the part of the carrier to provide
safe for their reception, carriage, competent captain and crew should be
and preservation. distinguished from the negligence of the said
captain and crew, because the latter is covered by
the Limited Liability Rule (liability of the
shipowner may be limited to the value of the
vessel). If the negligence of the captain and crew duty bound to make sure that the parts that they
can be traced to the fact that they are really are purchasing are not defective. Hence, it is a
incompetent, the Limited Liability Rule cannot be long-standing rule that a carrier cannot escape
invoked because the shipowner may be deemed liability by claiming that the accident that resulted
negligent. because of a defective break or tire is due to a
fortuitous event. This is true even if it can be
a.) Rules on passenger safety (Read established that the tire that was subject of a blow-
Memorandum Circular No. 114: p. 204) out is brand new. The duty to exercise
extraordinary diligence requires the carrier to
E. DEVIATION AND TRANSSHIPMENT purchase and use vehicle parts that are not
defective.
a.) Deviation – If there is an agreement
between the shipper and the carrier as to B. TRAFFIC RULES
the road over which the conveyance is to The carrier fails to exercise extraordinary
be made (subject to the approval by the diligence if it will not comply with basic traffic
Maritime Industry Authority), the carrier rules. The Civil Code provides for a presumption
may not change the route, unless it be by of negligence in case the accident occurs while the
reason of force majeure. Without this operator of the motor vehicle is violating traffic
cause, he shall be liable for all the losses rules.
which the goods may suffer, aside from
paying the sum stipulated for that case. In cases involving breach of contract of carriage,
When on account of the force majeure, the proof of violation of traffic rules confirms that the
carrier had to take another route which carrier failed to exercise extraordinary diligence.
resulted to an increase in transportation
charges, he shall be reimbursed upon C. DUTY TO INSPECT
formal proof. There is no unbending duty to inspect each and
every package or baggage that is being brought
b.) Transshipment – The act of taking inside the bus or jeepney. The carrier is duty
cargo out of one ship and loading it into bound to conduct such inspection depending on
another; to transfer goods from the vessel the circumstances.
stipulated in the contract of affreightment
to another vessel before the place of
destination named in the contract has been VI. EXTRAORDINARY DILIGENCE IN
reached. CARRIAGE BY AIR
Transshipment of freight without legal The aircraft must be in such a condition that it
excuse is a violation of the contract and must be able to withstand the rigors of flight.
subjects the carrier to liability if the
freight is lost even by a cause otherwise Airworthiness – An aircraft, its engines propellers,
excepted. and other components and accessories, are of
proper design and construction, and are safe for air
V. EXTRAORDINARY DILIGENCE IN navigation purposes, such design and construction
CARRIAGE BY LAND being consistent with accepted engineering
practice and in accordance with aerodynamic laws
A. CONDITION OF VEHICLE and aircraft science.
Common carriers that offer transportation by land
are similarly required to make sure that the Proof of airworthiness is not by itself sufficient to
vehicles that they are using are in good order and prove exercise of extraordinary diligence.
condition.
The fact that the flight was cancelled due to
Rule on Mechanical Defects – If the carriers will fortuitous event does not mean that the carrier’s
replace certain parts of the motor vehicle, they are duty already ended. The carrier is still obligated to
look after the convenience and comfort of the

passenger.
A. INSPECTION
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 shipper’s 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.

CHAPTER 4 7. Custody Bill The goods are already receied by the

of Lading carrier but the vessel indicated therein has
BILL OF LADIG not yet arrived in the port.
8. Port Bill of The vessel indicated in the BOL that will
I. COCEPTS, DEFIITIO AD KIDS Lading transport the goods is already in the port.
Bill of Lading (BOL)- a written

acknowledgement, signed by the master of a
vessel or other authorized agent of the carrier, that EFFECTIVITY of BOL- upon its delivery to and
he has received the described goods from the acceptance by the shipper. The acceptance of the
shipper, to be transported on the expressed terms bill without dissent raises the presumption that all
to be described the place of destination, and to be the terms therein were brought to the knowledge
delivered to the designated consignees of the of the shipper and agreed to by him, and in the
parties. It operates as a (1) RECEIPT (2) as a absence of fraud or mistake, he is stopped
CONTRACT (3) as a DOCUMENT OF TITLE. thereafter from denying that he assented to such
claims.
A BOL is not necessary for the perfection of a
contract of carriage. Thus, the obligation to THE 3-FOLD ATURE OF THE BILL OF
exercise extraordinary diligence by the carrier is LADIG
still required even if there is no bill of lading. In
the absence of the bill of lading, disputes shall be I. RECEIPT- as comprehending all methods
determined on the basis of the provisions in the of transportation, a BOL may be defined
New Civil Code and suppletorily by the Code of as a written acknowledgement of the receipt of
Commerce. goods and an agreement to transport an to deliver
them at a specified place to a person named or on
KINDS of BILL of LADING his order. Other terms, “shipping receipts”,
“forwarders receipts”, and “receipts for
1. Clean Bill Does not contain any notation indicating transportation”. (SC) the designation however is
of Lading any defect in the goods. not material, and neither is the form of the
2. Foul Bill of One that contains the abovementioned instrument. If it contains an acknowledgement by
Lading notation. the carrier of the receipt of goods for
3. Spent Bill The goods are already delivered but the
of Lading bill of lading was not yet returned (upon
transportation it is, in legal effect a BOL.
delivery, the carrier is supposed to
retrieve the covering bill of the goods) II. CONTRACT - it expresses the terms and
4. Through Issued by a carrier who is obliged to use conditions of the agreement between the parties;
Bill of Lading the facilities of other carriers as well as names the parties; includes consignees etc. It is
his own facilities for the purpose of
transporting the goods from the city of
the law between the parties bound by its terms and
the seller to the city of the buyer, which conditions.
BOL is honored by the second and other
interested carriers who don’t issue their It is to be construed liberally in favor of the
own BOL. shipper who adhered to such bill as it is a contract
5. On Board -states that the goods have been received
Bill on board the vessel which is to carry the
of adhesion. The only participation of the party is
goods. the signing of his signature or his adhesion thereto.
-apparently guarantees the certainty of
shipping as well as the seaworthiness of ART. 24 (NCC). In all contractual property or
the vessel to carry the goods. other relations, when one of the parties is at a
6. Received -states that the goods have been received
for Shipment for shipment with or without specifying
disadvanatge on account of his moral dependence,
Bill the vessel by which the goods are to be ignorance indigence, mental weakness, tender age
shipped. and other handicap, the court must be vigilant for
-issued when conditions are not normal his protection.
and there is insufficiency of shipping
space.

It is covered by the parol evidence rule, that the document remains to be negotiable even if the
terms of the contract are conclusive upon the words “not negotiable” or non negotiable are
parties and evidence aliunde is not admissible to places thereon
vary or contradict a complete enforceable
agreement. If mistake was alleged, it must be a. Bearer document- negotiated by delivery
timely raised in the pleadings and it must be a b. Order document- negotiated by indorsement of
mistake of fact mutual to the parties. the specified person so named
The BOL is the legal evidence of the contract and Effects of negotiation. Negotiation of the
the entries thereof constitutes prima facie document has the effect of manual delivery so as
evidence of the contract. All the essential to constitute the transferee the owner of the goods.
elements of a valid contract (cause, consent,
object) are present when such bill are issued. RECOVERY OF DAMAGES FROM
CARRIER FOR CARRIAGE OF GOODS:
BASIC STIPULATIONS (for overland transpo, 1. Inter-island - if goods arrived in damaged
maritime commerce and airline transpo of condition (Art. 366):
passengers, please refer to the textbook for the a. If damage is apparent, the shipper must file a
codal pp. 267-275) claim immediately (it may be oral or written);
b. If damage is not apparent, he should file a claim
PROHIBITED AND LIMITING STIPULATION within 24 hours from delivery.
The filing of claim under either (1) or (2) is a
1. Exempting the carrier from any and all liability condition precedent for recovery.
for loss or damage occasioned by its own If the claim is filed, but the carrier refuses to
negligence - INVALID as it is contrary to public pay: enforce carrier’s liability in court by filing a
policy. case:
2. Parties may stipulate that the diligence to be a. within 6 year, if no bill of lading has been
exercised by the carrier for the carriage of goods issued; or
be less than extraordinary diligence if it is (a) in b. within 10 years, if a bill of lading has been
writing and signed by both parties (b) supported issued.
by a valuable consideration other than the service
rendered by the common carrier ( c ) the 2. Overseas –where goods arrived in a damaged
stipulation is just, reasonable and not contrary to condition from a foreign port to a Philippine port
law. of entry: (COGSA)
3. Providing an unqualified limitation of such a. upon discharge of goods, if the damage is
liability to an agreed valuation - INVALID apparent, claim should be filled immediately;
4. Limiting the liability of the carrier to an agreed b. if damage is not apparent, claim should be filled
valuation unless the shipper declares a higher within 3 days from delivery.
value and pays a higher rate of freight- VALID
and ENFORCEABLE. Filing of claim is not a condition precedent, but an
action must be filed against the carrier within a
III. AS A DOCUMENT OF TITLE period of 1 year from discharge; if there is no
delivery, the one-year period starts to run from the
ART 1507 (-CC). A document of title in which it is day the vessel left port (in case of undelivered or
stated that the goods referred to therein will be lost cargo), or from delivery to the arrastre (in
delivered to the bearer or to the order of any case of damaged cargo).
person named in such document is a negotiable Where there was delivery to the wrong person, the
document of title. prescriptive period is 10 years because there is a
violation of contract, and the carriage of goods by
If the document of title contains the required sea act does not apply to misdelivery. (Ang v.
words of negotiability to make the instrument American SS Agencies (19 SCRA 631)
negotiable under Article 1507 of the NCC, the
CARRIAGE OF GOODS BY SEA ACT (C.A. Transportation to be performed by several

o. 65) successive air carriers shall be deemed to be one
undivided transportation, if it has been regarded by
F COGSA is applicable in international maritime the parties as a single operation, whether it has
commerce. It can be applied in domestic sea been agreed upon under the form of a single
transportation if agreed upon by the parties. contract or of a series of contracts, and it shall not
(paramount clause) lose its international character merely because one
F COGSA is suppletory to the Civil Code and the contract or a series of contracts is to be performed
Code of Commerce in the Carriage of goods from entirely within a territory subject to the
foreign ports to the Philippines. sovereignty, suzerainty, mandate, or authority of
F Under the Sec. 4 (5), the liability limit is set at the same High Contracting Party. (Art. 1)
$500 per package unless the nature and value of
such goods is declared by the shipper. This is OTE: Warsaw prevails over the Civil Code,
deemed incorporated in the bill of lading even if Rules of Court and all laws in the Philippines
not mentioned in it (Eastern Shipping v. IAC, since an international law prevails over
150 SCRA 463). general law.
Note that Art. 1749 of the NCC applies to inter-
island trade. WHE OT APPLICABLE:
1. If there is willful misconduct on the part of the
Prescriptive periods carrier’s employees. The Convention does not
F Suit for loss or damage to the cargo should be regulate, much less exempt, carrier from liability
brought within one year after: for damages for violating the rights of its
a. delivery of the goods; or passengers under the contract of carriage (PAL v.
b. the date when the goods should be delivered. CA, 257 SCRA 33).
(Sec. 3[6])
2. when it contradicts public policy;
The one-year prescriptive period is suspended by:
1. express agreement of the parties (Universal 3. if the requirements under the Convention are
Shipping Lines, Inc. v. IAC, 188 SCRA 170) not complied with.
2. when an action is filed in court until it is
dismissed. (Stevens & Co. v. ordeutscher LIABILITY OF CARRIER FOR DAMAGES:
Lloyd, 6 SCRA 180) 1. Death or injury of a passenger if the accident
causing it took place on board the aircraft or in the
WARSAW COVETIO of 1929 course of its operations; (Art. 17)
2. Destruction, loss or damage to any luggage or
WHE APPLICABLE: goods, if it took place during the carriage; (Art.
Applies to all international transportation of 18) and
person, baggage or goods performed by aircraft for 3. Delay in the transportation of passengers,
hire. “International transportation” means any luggage or goods. (Art. 19)
transportation in which the place of departure and
the place of destination are situated either: OTE: The Hague Protocol amended the Warsaw
1. within the territories of two High Contracting Convention by removing the provision that if the
Parties regardless of whether or not there be a airline took all necessary steps to avoid the
break in the transportation or transshipment, or damage, it could exculpate itself completely (Art.
20(1)). (Alitalia v. IAC, 192 SCRA 9)
2. within the territory of a single High Contracting
Party, if there is an agreed stopping place within a LIMIT OF LIABILITY
territory subject to the sovereignty, mandate or 1. passengers - limited to 250,000 francs
authority of another power, even though that except: agreement to a higher limit
power is not a party to the Convention.
2. Goods and checked-in baggage - 250 francs/kg
except: consigner declared its value and paid a Nota Bene: COGSA/WARSAW applies to foreign
supplementary sum, carrier liable to not more vessels or airplane or international travel
than the declared sum unless it proves the sum Code of Commerce applies to inter-
is greater than its actual value. island or domestic travel.
3. hand-carry baggage - limited to 5,000

francs/passenger
Bill of Lading as Document of Title (page 341)
An agreement relieving the carrier from liability or
fixing a lower limit is null and void. (Art. 23) Bill of lading is a document of title under
Carrier not entitled to the foregoing limit if the the Civil Code. It can be a negotiable
damage is caused by willful misconduct or default document of title.
on its part. (Art. 25)
A. -egotiability
ACTIO FOR DAMAGES - It is negotiable if it is deliverable to the bearer,
1. Condition precedent or to the order of any person named in such
A written complaint must me made within: document. (Art. 1507, Civil Code)
- 3 days from receipt of baggage
- 7 days from receipt of goods a) Effect of Stamp or -otation “-on--egotiable”
- in case of delay, 14 days from receipt of the document remains to be negotiable
baggage/goods even if the words “not-negotiable” or
F otherwise the action is barred except in case of “non-negotiable” are placed thereon. - Art.
fraud on the part of the carrier. (Art. 26) 1510 (Civil Code)
2. Jurisdiction - governed by domestic law B. How -egotiated
3. Venue – at the option of the plaintiff: a) Bearer document (Art. 1508 and 1511)
a. court of domicile of the carrier; - may be negotiated be delivery
b. court of its principal place of business;
c. court where it has a place of business through b) Order document (Sec. 38, NIL and Art. 1509,
which the contract has been made; NCC)
d. court of the place of destination. (Art. 28) - can only be negotiated through the indorsement
4. Prescriptive period – 2 years from: of the specified person so named.
a. date of arrival at the destination - such indorsement may be in blank, to bearer or to
b. date of expected arrival a specified person.
c. date on which the transportation stopped.
(Art. 29) Where a negotiable document of title is
5. Rule in case of various successive carriers, transferred for value by delivery, and the
a. In case of transportation of passengers – the endorsement of the transferor is essential
action is filed only against the carrier in for negotiation, the transferee acquires a
which the accident or delay occurred unless right against the transferor to compel him
there is an agreement whereby the first to endorse the document. xxx (Art. 1515,
carrier assumed liability for the whole Civil Code)
journey.
b. In case of transportation of baggage or goods C. Effects of -egotiation
i. the consignor can file an action against - has the effect of manual delivery so as to
the first carrier and the carrier in which constitute the transferee the owner of the goods
the damage occurred - results in the transfer of ownership because
ii. the consignee can file an action against transfer of document likewise transfers control
the last carrier and the carrier in which over the goods
the damage occurred. These carriers are - refer to Art. 1513
jointly and severally liable. (Art. 30)

CHAPTER 5 But the period prescribed in Art. 366 may be

ACTIOS AD DAMAGES I CASE OF subject to modification by agreement of the
BREACH parties.
Cause of action of a passenger and b) Extinctive Prescription

shipper: - six (6) years if there is no written contract
a) against common carrier – based on culpa - ten (10) years if there is written contract
contractual or culpa aquiliana
b) on the part of the driver – based on either culpa This rule likewise applies to carriage of
delictual or culpa aquiliana passengers for domestic transportation.
• If the negligence of third persons concurs B. International Carriage of Goods by Sea

with the breach, the liability of the third A claim must be filed with the carrier within
person who was driving the vehicle and/or his the following period:
employer may be based on quasi delict. 1) if the damage is apparent the claim should be
filed immediately upon discharge of the goods;
• Solidary liability or
- In case the negligence of the carrier’s 2) within 3 days from delivery if damage is not
driver and a third person concurs, the apparent
liability of the parties – carrier and his
driver, third person – is joint and several. Filing of claim is not condition precedent.
Thus, regardless of whether the notice of loss
I. Notice of Claim and Prescriptive Period or damage has been given, the shipper can
still bring an action to recover said loss or
A. Overland Transportation of Goods and
Coastwise Shipping damage within one year after the delivery of
a) When to file a claim with carrier the goods.
- Art. 366 constitutes a condition precedent to the
accrual of a right of action against a carrier for a) Prescription
damage caused to the merchandise. Action for damages must be filed within a
period of one (1) year from discharge of the
Under Art. 366 of the Code of Commerce, goods.
an action for damages is barred if the goods The period is not suspended by an extra-
arrived in damaged condition and no claim judicial demand.
is filed by the shipper within the following Does not apply to conversion or
period: misdelivery.
1) immediately if damage is apparent; The one (1) year period refers to loss of
2) within twenty four (24) hours from delivery if goods and not to misdelivery.
damage is not apparent
- Damages arising from delay or late
- the period does not begin to run until the delivery id not the damage or loss
consignee has received possession of the contemplated under the COGSA. The
merchandise that he may exercise over it goods are not actually lost or damaged.
the ordinary control pertinent to The applicable period is ten (10) years.
ownership.
- This provision applies even to This rule applies in collision cases. The one
transportation by sea within the Phils. or (1) year period starts not from the date of the
collision but when the goods should have
coastwise shipping.
been delivered, had the cargoes been saved.
- does not apply to misdelivery of goods.

Insurance Damages cannot be presumed.

The insurer who is exercising its right of
subrogation is also bound by the one (1) year In case of goods – the plaintiff is entitled to
prescriptive period. their value at the time of destruction.
However, it does not apply to the claim For personal injury and even death – the
against the insurer for the insurance claimant is entitled to all medical expenses
proceeds. The claim against the insurer is as well as other reasonable expenses that he
based on contract that expires in ten (10) incurred to treat his or her relative’s injuries.
years. In case of death – the plaintiff is entitled to
the amount that he spent during the wake
II. Recoverable Damages and funeral of the deceased. But, expenses
Damages – is the pecuniary compensation, after the burial are not compensable.
recompense or satisfaction for an injury
sustained, or as otherwise expressed, the - Read Art. 2206 (Civil Code)
pecuniary consequences which the law
imposes for the breach of some duty or The amount of fixed damages is now
violation of some rights. P50,000.00
A. Extent of Recovery (Art. 220, CC) 1) Loss of earning capacity

Carrier in good faith – is liable only to pay Net Earning Capacity = Life Expectancy x
for the damages that are the natural and [Gross Annual Income less Necessary Living
probable consequences of the breach of the Expenses]
obligation and which the parties have Life expectancy – (2/3 x 80 – age at death)
foreseen or could have reasonably foreseen Net earnings – based on the gross income of
at the time the obligation was constituted. the victim minus the necessary incidental
Carrier in bad faith or guilty of gross living expenses which the victim would have
negligence – liable for all damages, incurred if he were alive.
whether the same can be foreseen or not. Amount of living expenses must be
established. In the absence of proof, it is
- The carrier who may be compelled to pay fixed at fifty (50%) of the gross income.
has the right of recourse against the
employee who committed the negligent, Rules on loss of earning applies when the
willful or fraudulent act. breach of the carrier resulted in the
plaintiff’s permanent incapacity.
B. Kinds of Damages
a) Actual or Compensatory Damages
– only for the pecuniary loss suffered by him as he 2) Attorney’s fees
has duly proved - refer to Art. 2208 of the Civil Code
2 Kinds: - attorney’s fees may be awarded in an action for
1. the loss of what a person already possesses breach of contract of carriage under par.
(daňo emrgente); 1,2,4,5,10 and 11 of Art. 2208.
2. the failure to receive as a benefit that would
have pertained to him (lucro cesante). 3) Interests
12% per annum – if it constitutes a loan or
Damages may be recovered: Art. 2205 forbearance of money
(Civil Code) 6% per annum – if it does not constitute
1) For loss or impairment of earning capacity in loan or forbearance of money
cases of temporary or permanent personal injury; 12% - for final judgment
2) For injury to the plaintiff’s business standing
or commercial credit.
b) Moral Damages
- Includes physical suffering, mental anguish, compensatory damages that may be awarded to the
fright, serious anxiety, besmirched reputation, claimant.
wounded feelings, moral shock, social humiliation 3. The act must be accompanied by bad faith or
and similar injury. done in wanton, fraudulent, oppressive or
- Though incapable of pecuniary computation, malevolent manner.
moral damages may be recovered if they were the
proximate result of the defendant’s wrongful act or The award of exemplary damages in breach
omission. of contract of carriage is subject to the
- may be recovered when there is death or there is provisions under Art. 2232-2235 of the Civil
malice or bad faith. (in transportation of Code.
passengers)
- Refer to Art. 2219 and 2220
- Generally, no moral damages may be awarded
where the breach of contract is not malicious.
c) ominal Damages
- Refer to Art. 2221-2223 (Civil Code)
- the assessment of nominal damages is left to the
discretion of the court
- 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
d) Temperate or Moderate Damages

- Art. 2224 provides:
may be recovered when the court finds that
some pecuniary loss has been suffered but its
amount can not, from the nature of the case,
be provided with certainty.
- cannot co-exist with actual damages
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 equitable 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 claimant’s right to them has been established.
2. They cannot be recovered as a matter of right,
their determination depending upon the amount of

CHAPTER 6 - LLR cannot be invoked in failure to

MARITIME LAW maintain the seaworthiness of the
vessel
General Concepts - Authorizing the voyage
• The real and hypothecary nature of notwithstanding its knowledge of a
maritime law simply means that the typhoon is tantamount to negligence
liability of the carrier in connection with exempts the case from the operation
losses related to maritime contracts is of LLR
confined to the vessel
• Articles 837, 587, and 590 cover only: (1) b. Insurance claims
liability to third persons, (2) acts of the - Total loss of the vessel did not
captain, (3) collisions extinguish the liability of the carrier’s
insurer; despite the loss of the vessel,
Limited Liability Rule its insurance answers for the damages
- No vessel, no liability that a ship owner or agent, may be
- The total destruction of the vessel held liable for by reason of the death
extinguishes maritime liens because there is of its passengers
no longer any res to which it can attach
- The civil liability for collision is merely co- c. Workmen’s compensation
existent with the ship owner’s interest in the - Even if the vessel was lost, the
vessel liability thereunder is still enforceable
- EXCEPTIONS: against the employer or ship owner
1. Where the injury or death to a
passenger is due either to the fault Abandonment
of the ship owner, or to the - Vessel, its appurtenances and the
concurring negligence of the ship freightage
owner and the captain - An indispensable requirement before the
2. Where the vessel is insured ship owner or ship agent can enjoy the
3. In workmen’s compensation claims benefits of the LLR
4. Expenses for repairs and - If the carrier does not want to abandon the
provisioning of the ship prior to the vessel, then he is still liable even beyond
departure thereof the value of the vessel
a. Negligence – the LLR applies if the Procedure for Enforcement

captain or the crew caused the damage or - In sinking of a vessel, the claimants or
injury. However, if the failure to maintain creditors are limited in their recovery to
the seaworthiness of the vessel can be the remaining value of accessible assets
ascribed to the ship owner alone or the - In case of a lost vessel, there are the
ship owner concurrently with the captain, insurance proceeds and pending
then the LLR cannot be invoked freightage for the particular voyage
- The carrier is liable for the damages - No claimant can be given precedence over
to the full extent and not up to the the others by the simple expedience of
value of the vessel if it was having filed or completed its action
established that the carrier was guilty earlier than the rest
of negligence in allowing the captain
and crew to do negligent acts during Protests
the voyage, in failing to maintain the - The written statement by the master of a
ship as seaworthy and in allowing the vessel or any authorized officer, attested
ship to carry more passengers than it by proper officer or a notary, to the effect
was allowed to carry that damages has been suffered by the
ship
- Protest is required in the following cases:

1. When the vessel makes an arrival
under stress
2. Where the vessel is shipwrecked
3. Where the vessel has gone
through a hurricane or the captain
believes that the cargo has
suffered damages or averages
4. Maritime collisions
Philippine Shipping Company v. Vergara (1600)

Heirs of Delos Santos v. CA (51165)

CHAPTER 7 - Vessels that are under the jurisdiction of

VESSELS the MARINA can be transferred only
with notice to said administrative agency
Definitions
P.D. 474 – a watercraft; any barge, lighter, bulk a. Prescription
carrier, passenger ship freighter, tanker container - Acquisition of a vessel must appear in a
ship, fishing boats, or other artificial contrivance written instrument, which shall not
utilizing any source of motive power, designed, produce any effect with respect to third
used or capable of being used as means of persons (Art. 573, Code of Commerce)
transportation operating other as common contract - Ownership shall be acquired by
carrier, including fishing vessels covered under possession in good faith, continued for
P.D. 43 three (3) years, with a just title duly
Except: recorded
(i) Those owned and/or operated by the AFP - In the absence of the aforementioned
and by foreign governments for requisites, continuous possession for ten
military purposes (10) years shall be necessary in order to
(ii) Bancas, sailboats and other waterbone acquire ownership.
contrivance of less than three gross - A captain may not acquire by prescription
tons capacity and not motorized the vessel which he is in command
- Co-owners shall have the right of
Lopez vs. Duruelo (29166, Oct. 22, 1928) repurchase and redemption in sales made
to strangers, but only within nine (9) days
Construction, Equipment and Manning following the inscription of the sale in the
- Subject to the rules issued by the registry, and by depositing the price at the
MARINA same time
- Article 574, Code of Commerce
b. Sale
Personal Property - Includes the rigging, masts, stores and
- Under Article 416, Civil Code engine of a steamer appurtenant thereto,
- Under Art 585, Code of Commerce: for all which at the time belongs to the vendor
purposes not modified or restricted; - Arms, munitions of war, provisions and
hence, there are rules that apply to real fuel shall not be considered as included in
estate the sale
- Ships or vessels, whether moved by steam - Obligation of the vendor to deliver to the
or by sail, partake, to a certain extent, of purchaser a certified copy of the record
the nature and condition of real property, sheet of the vessel in the registry up to the
on account of their value and importance date of the sale
in the world of commerce - If alienation of the vessel should be made
- Art 573, Code of Commerce: transfer of while it is on a voyage, the freightage
vessels should be in writing and must be which it earns from the time it receives its
recorded in the appropriate registry last cargo shall pertain entirely to the
purchaser, and the payment of the crew
and other persons shall be for his account
OWNERSHIP - If the sale is made after the vessel has
Acquisition arrived at the port of its destination, the
- Vessels may be acquired or transferred by freightage shall pertain to the vendor, and
any means recognized by law; may be the payment of the crew and other
sold, donated and may even be acquired persons shall be for his account, unless
through prescription contrary is stipulated
REGISTRATION
- Registered through MARINA

- The person who is the registered owner of
the vessel is presumed to be the owner of
the vessel
- The sale or transfer of the vessel is not
binding on third persons unless the same
is registered
- Tariff and Customs Code: A certificate of
Philippine registry confers upon the
vessel the right to engage in the
Philippine coastwise trade and entitles it
to the protection of the authorities and the
flag of the Philippines in all ports and on
the high seas
SHIP’S MANIFEST
- Vessels are required to carry manifests in
coastwise trade
- Tariff and Customs Code: manifests shall
be required for cargo and passengers
transported from one place or port in the
Philippines to another only when one or
both of such places is a port of entry
Manifest
- a declaration of the entire cargo
- object is to furnish customs officers with a
list to check against, to inform the
revenue officers what goods are being
brought into a port of the country on a
vessel
- hence, the requirement that a vessel must
carry a manifest is not complied with
even if a bill of lading can be presented.
- Bill of lading is just a declaration of a
specific cargo, rather than the entire cargo
- It is issued as a matter of convenience by
virtue of a contract

CHAPTER 8 Part Owners

PERSOS WHO TAKE PART I - a partnership shall be presumed as
MARITIME COMMERCE established by the co-owners
- if not more than two, decision of the
SHIPOWNERS AND SHIP AGENTS member having controlling interest
- more than two, proportionately
Shipowner - a vessel may not be detained, attached or
- the person who is primarily liable for levied upon in execution in its entirety for
damages sustained in the operation of the private debts of a part owner
vessel - the co-owners of a vessel shall be civilly
- evident intent to place the primary liable in the proportion of their interest in
responsibility on the owner of the vessel the common fund, for the results of the
- “naviero” – construed to include the acts of the captain
shipowner, ship agent and even the - each co-owner may exempt himself from
character who is considered as owner pro liability by abandonment
hac vice - all part owners shall be liable, in
proportion to their respective ownership,
Ship agent for the expenses for repairing the vessel
- the person entrusted with provisioning of - the sale of the vessel must be made at
the vessel, or who represents her in the public auction, unless the co-owners
port in which she happens to be stipulate
- ship agent is jointly and severally liable
with the owner, applies both for breach of SHIP AGENT
contract and extra-contractual obligation - whether the owner or a manager for an
such as tort owner or for an association of co-owners,
- even though not the owner, is liable in must have the capacity to trade and must
every way to the creditor for losses and be recorded in the merchant’s registry of
damages, without prejudice to his right the province
against the owner, the vessel and its - shall represent the ownership of the vessel
equipment and freight, subject to the LLR - may, in his own name, and in such
capacity, take judicial and extrajudicial
• the shipowner and ship agent shall be civilly steps in matters relating to commerce
liable for the acts of the captain and for
obligations contracted by the latter to repair, A. Powers
equip, and provision the vessel - May discharge the duties of the captain of
• ship agent shall also be civilly liable for the the vessel, subject to Art.
indemnities in favor of third persons which 609(qualifications)
may arise from the conduct of the captain in - Shall designate and come to terms with
the care of the goods which he loaded on the the captain
vessel; but he may exempt himself through - shall contract in the name of the owners,
abandonment who shall be bound in all that refer to
• neither the shipowner or the ship agent shall repairs, details of equipment, armament,
be liable for the obligations contracted by the provisions of food and fuel, and freight of
captain, if the latter exceeds the powers and the vessel, and in general, in all that
privileges pertaining to him relates to the requirements of navigation
• if the amounts claimed were invested for the
benefit of the vessel, the responsibility B. Limitation on Power
therefor shll devolve upon its owner or agent - May not order a new voyage, or make
contracts for a new charter, or insure the
vessel, without the authorization of its

owner or resolution of the majority of the meaning, both being the chiefs and
co-owners, unless powers are granted in commanders of ships
the certificate of appointment - MARINA: “master” is the person having
- If he insures the vessel without command of the ship, used for both
authorization, he shall be subsidiarily domestic trade and international trade
liable for the solvency of the insurer - MARINA: “boat captain” is a person
authorized by the MARINA to act as
C. Duty to Account officer and/or in command of a boat/ship
- If managing for an association, he shall or has the qualification or license to act as
render an account of the results of each such
voyage of the vessel
Qualifications (Captains, masters or patrons of
D. Reimbursement and Liabilities vessel)
- Co-owners shall pay the expenses in 1. Must be Filipinos
proportion to their interest 2. Have legal capacity to contract
- In order to enforce the payment, the 3. Prove the skill, capacity and qualifications
managing agent shall be entitled to an necessary to command and direct the
executor action (accion ejecutiva) vessel
- Shall indemnify the captain for all the 4. Must not be disqualified for the discharge
expenses he may have incurred with of the duties of the position
funds of his own or of others, for the 5. if the owner of the vessel desires to be the
benefit of the vessel captain, without having the legal
qualifications, he shall limit himself to the
E. Discharge of Captain and Crew financial administration of the vessel, and
- Subject to the provisions of the Labor intrust navigation to a person possessing the
Code and rules promulgated by POEA qualifications
- Before the vessel sets out to sea, the ship
agent may, at his discretion, discharge the Powers and Functions
captain and members of the crew whose - A master or captain is one who has
contracts are not for a definite period or command of a vessel
voyage - A captain commonly performs three
- In case of voluntary sale of the vessel, all distinct roles:
contracts between the ship agent and the 1. He is a general agent of the
captain shall terminate, reserving to the shipowner (operation and
latter his right to the indemnity which preservation of the vessel during
may pertain to him its voyage and the protection of
the passengers, crew and cargo)
CAPTAINS AND MASTERS OF VESSELS 2. He is also commander and
- The name of captain or master is given, technical director of the vessel
according to the kind of vessel, to the (authority to sign bills of lading,
person in charge of it carry goods aboard and deal with
- The first denomination is applied to those the freight earned, agree upon
who govern vessels that navigate the high rates and decide whether to take
seas or ships of large dimensions and the cargo; authority to enter into
importance, although they be engaged in contracts with respect to the
the coastwise trade vessel and the trading of the
- Masters are those who command smaller vessel)
ships engaged exclusively in the coast 3. He is a representative of the
wise trade country under whose flag he
- For the purpose of maritime commerce, navigates
“captain” and “master” have the same
- The captain is vested with both 1. Those whose duty it is to guide vessels
management and fiduciary functions into or out of ports, or in particular waters
- Code of Commerce: (for captain and 2. Those entrusted with the navigation of
masters) vessels on high seas
1. To appoint or make contracts with
the crew in the absence of the Compulsory Pilotage
ship agent - States possessing harbors have enacted
2. To command the crew and direct laws or promulgated rules requiring
the vessel to the port of vessels approaching their ports to take on
destination board pilots licensed under the local law
3. To impose correctional - Being implemented in the Port of Manila
punishment upon those who fail - Duties and Responsibilites:
to comply with his orders or are 1. Harbor pilot shall be responsible
wanting in discipline for the damage caused to a vessel
4. To make contracts for the charter or to life and property at ports
of the vessel in the absence of the due to his negligence or fault;
ship agent or of its consignee absolved if force majeure or
5. To adopt all proper measures to natural calamities provided he
keep the vessel well supplied and exercised extra diligence to
equipped prevent or minimize damage
6. To order the repairs on the hull 2. The master shall retain overall
and engines of the vessel command of the vessel even or
7. To obtain funds pilotage grounds whereby he can
Discretion of Captain and Master countermand or overrule the
- Ship’s captain must be accorded a order or command of the Harbor
reasonable measure of discretionary Pilot on board; hence, any
authority to decide what the safety of the damage shall be liability or
ship and of its crew and cargo specifically registered owner
requires on a stipulated ocean voyage 3. Pilot shall be held responsible for
- It is presumed that he is knowledgeable as the direction of the vessel from
to the specific requirements of the time he assumes his work as
seaworthiness and the particular risks and pilot until he leaves it anchored;
perils of the voyage he is to embark upon provided, his responsibility shall
- It is the right and duty of the captain, in cease at the moment the Master
the exercise of sound discretion and in neglects or refuses to carry out
good faith, to do all things with respect to his order
the vessel and its equipment and conduct
of the voyage which are reasonably Master and Pilot
necessary for the protection and - While the pilot is in sole command of the
preservation of the interests under his ship and supersedes the master for the
charge time being in the command and
navigation of a ship and that he becomes
PILOTAGE master pro hac vice of a vessel piloted by
Pilot – a person duly qualified and licensed to him, there is authority to the effect that
conduct a vessel into or out of ports, or in certain the master does not surrender his vessel
waters to the pilot and the pilot is not the master;
- A person taken on board at a particular the master is still in command of the
place for the purpose of conducting a ship vessel notwithstanding the presence of a
through a river, road, channel, or from pilot
port - There are occasions when the master may
It includes: and should interfere and even displace the
pilot, as when the pilot is obviously - Where the pilot is not a compulsory one
incompetent or intoxicated and the but is employed voluntarily, the owners
circumstances may require the master to of the vessel are, all the more, liable for
displace a compulsory pilot because of his negligent act
incompetency or physical incapacity
- Master is not wholly absolved from his Pilot and his Association
duties while a pilot is on board his vessel, - The fact that the pilot is a member of an
and may advise with or offer suggestions association does not make the association
- Master is still in command of the vessel, jointly and severally liable.
except so far as her navigation is - Art 2180 of the NCC does not apply
concerned, and must cause the ordinary because there is no employee-employer
work of the vessel to be properly carried relationship
on and the usual precaution taken
OFFICERS AND CREW OF VESSELS
Shipowner and Pilot Art. 648, Code of Commerce: the complement of a
- Pilot is personally liable for damages vessel shall be understood all the persons on
caused by his own negligence or default board, from the captain to the cabin boy, necessary
to the owners of the vessel, and to third for the management, maneuvers, and service
parties for damages sustained in a - therefore, the complement shall include
collision; constitutes maritime tort the crew, the sailing mates, engineers,
- In case of collision, the colliding vessel is stokers and other employees on board not
prima facie responsible, hence, the having specific designations
burden of proof is upon the party - it shall not include the passengers or the
claiming benefit of the exemption from persons whom the vessel is transporting
liability.
- It must be shown affirmatively that the Minimum Safe Manning
pilot was at fault and that there was no - it is required that there is sufficient
fault on the part of the officers or crew, number of officers and crew that are
which might have been conducive to the serving in the vessel
damage
- The fact that the law compelled the master Supercargoes
to take the pilot does not exonerate the - shall discharge on board the vessel the
vessel from liability administrative duties which the ship agent
- Parties injured are not under necessity to or the shippers may have assigned to
look to the pilot from whom redress is not them
always had for compensation - shall keep an account and record of their
- The owners of the vessel are responsible transactions in a book
to the injured party for the acts of the - the powers and responsibilities of the
pilot, and they must be left to recover the captain shall cease, when there is a
amount as well as they can against him supercargo
- It cannot be maintained that the
circumstance of having a pilot on board,
and acting in conformity to his directions
operate as a discharge or responsibility of
the owners
- Except insofar as their liability is limited
or exempted by statute, the vessel or her
owner are liable for all damages caused
by the negligence or other wrongs of the
owners or those in charge of the vessel

CHAPTER 9 - in this case, the master of the vessel is

CHARTER PARTIES the agent of the charterer, and not of the
shipowner, and therefore, it is the
I. DEFINITION AND CONCEPT charterer who is liable for the expenses of
- a contract whereby an entire ship, or some the voyage including the wages of the
principal part of the said ship, is let by the seamen
owner thereof to a merchant or other
person for a specified time or use for the B. Contract of Affreightment – the charterer
convenience of goods, in consideration of hires the vessel only, either for a
the payment of freight determinate period of time or for a single
- term taken from “carta partita”, meaning or consecutive voyage, with the shipowner
“divided document” providing for the provisions of the ship,
- Carta partita refers to the ancient practice the wages of the master and crew, and the
of writing out the terms and conditions of expenses for the maintenance of the vessel
the contract in duplicate on one piece of 1. Time charter – the vessel is leased
parchment and then dividing it down the to the charterer for a fixed period
middle thus providing each party with a of time
copy 2. Voyage charter – the vessel is
- Charter contract is often referred to as leased for a single or particular
form of “mercantile lease” for it often voyage
involves a charterer, who is most often a
merchant himself, who desires to lease a III. EFFECT OF CHARTER ON
ship or vessel owned by another for the CHARACTER OF VESSELS
transport of his goods for commercial - Character of the common carrier as such is
purposes not affected by the charter party of the
- Charter may also involve the same is a contract of affreightment
transportation of persons from one port to - It is only when the charter includes both
another the vessel and its crew, as in a bareboat or
- Parties: charterer, charter party, and demise that a common carrier becomes
shipowner private
II. DIFFERENT KINDS OF CHARTER IV. PERSONS WHO MAY MAKE

PARTIES CHARTER
- The owners of the vessel who have legal
A. Bareboat or Demise Charter – the control and possession of the vessel may
shipowner leases to the charterer the validly enter into charter parties with a
whole vessel, transferring to the latter the charterer
entire command, possession and - A third person called a broker may,
consequent control over the vessel’s however, intervene in the execution of the
navigation, including the master and the charter between the principals
crew, who thereby become the charterer’s - Charterer may sub-charter the entire
“servants” vessel to a third person but only in the
- charterer becomes owner pro hac vice event that there is no prohibition in the
since he mans the vessel with his own set original charter regarding any sub-charter
of master and crew, effectively becoming - A sub-charter, when entered into, is an
the owner for the voyage or service independent contract by itself involving
stipulated, subject however to any only the charterer and the sub-charterer
liability for damages arising from and therefore does not give rise to any
negligence contractual relation between the general
owner and the sub-charterer.

- Part-owners are not precluded from h. The amount of the primage to be paid the
chartering the same for their own captain
commercial purposes; enjoy preference in i. The days agreed upon for loading and
the charter of the vessel over other unloading
persons j. The lay days and extra days to be allowed
- Ship agent is not allowed to make and the demurrage to be paid
contracts for a new charter unless he is
properly or duly authorized by the owner Primage – payment for the use of the equipment
or the same has been extended to him in belonging to the captain
his certificate of appointment
- Captains or masters of the vessel have VI. FREIGHT
inherent powers to enter into valid and - Parties may fix the manner or form in
binding charter parties, except: which the charter price or money shall be
1. In the event of absence of the ship satisfied
agent or consignee - Freight shall accrue according to the
2. Only if the said captain or master conditions stipulated in the contract
acts in accordance with the - If there is no stipulation, the rules are the
instructions of the agent or owner following:
and protects the latter’s interests 1. The freight shall begin to run from
- Validity of the charter is not affected by the day of loading on the vessel
the circumstance that the captain or 2. In charters with a fixed period, the
master who executed the charter violated freight shall begin upon that very
the orders or instructions of the agent or day
owner; the agent or owner shall have a 3. If the freight is charged according
right of action to recover damages against to weight, the payment thereof
the erring captain or master shall be made according to the
gross weight, including the
V. REQUISITES OF A VALID CHARTER weight of the containers
PARTY - Where the goods were jettisoned for the
- Governed by the general principles on common safety, freightage shall not
ordinary contracts accrue thereon, although the same will be
1. Consent of the contracting parties regarded as a general average
2. An existing vessel which should - If goods were lost on account of
be placed at the disposition of the shipwreck or stranding, or due to seizure
shipper by pirates or enemies, no freight will
3. The freight accrue thereby
4. Compliance with the requirements - If the freight should have been paid in
of Art. 562 of the Code of advance, then the same should be
Commerce returned unless there is agreement to the
contrary
Art. 562, Code of Commerce: - Failure of the captain or master to carry
a. Must be drawn in duplicate and signed by the goods in his ship or send them to the
the contracting parties point of destination results in the
b. Kind, name, tonnage of vessel abandonment upon any claim for freight
c. Flag and port of registry thereon, except when it has been made
d. Name and domicile of the captain and of payable in advance
the ship agent
e. Port of loading and unloading VII. DEMURRAGE AND DEADFREIGHT
f. Capacity, number of tons or weight, or • Lay days: time for loading and unloading;
measurement of the things to load provided for in the Charter Party
g. The freight to be paid
• Demurrage: a sum of money due by 5. After 3/5 of the vessel is loaded, the
express contract for the detention of the shipowner may not substitute the
vessel in loading or unloading, beyond chartered vessel with another one
the time allowed for that purpose in the unless he procures the consent of the
charter party charterers or shippers
• Where the charterer failed to occupy the 6. The captain may not accept the cargo
leased portion of the vessel, he may from any other person unless the
thereby be made liable by the shipowner consent of the charterer is obtained
for the “deadfrieght” that occurred 7. The shipowner may be held liable for
• Computation of lay days – the stipulated damages incurred by the charterer due
lay days do not begin to run against the to the voluntary delay of the captain
consignee until the vessel has arrived at in putting to sea
berth or other usual and customary place
for loading or unloading, and is in actual B. Charterer
readiness to discharge its cargo 1. The charterer shall have the right to
- if no lay days is provided for in the sub-charter the vessel to a third
charter party, it is understood that the person only if he is so authorized by
charterer will unload and discharge the the shipowner; otherwise, he shall be
cargoes within a reasonable time or with liable therefor
reasonable diligence 2. A charterer who loads goods different
from that contracted upon, without
VIII. RIGHTS AND OBLIGATIONS OF THE the knowledge of the shipowner or
CHARTER PARTY captain, and which results to damage
due to confiscation, embargo,
A. Shipowner or Captain detention, and other causes, shall be
1. The shipowner is bound to observe a liable to indemnify the parties injured
margin greater than two percent thereby
between that represented and her 3. Should illicit cargo be shipped by the
actual capacity which is not allowable charterer in the chartered vessel with
2. Any loss incurred by a shipper whose the knowledge of the shipowner or of
cargo is refused on account of the the captain, said charterer shall be
receipts by the shipowner of a greater joinly liable with the shipowner for
amount of cargo belonging to other the damages to the shippers
persons shall be for account of the 4. The charterers and shippers may not,
shipowner in the form of indemnity; for the payment of freight and other
freight may be reduced instead of expenses incurred, abandon the goods
rescission damaged due to inherent defects or by
3. If there should be several charter reason of fortuitous event
parties and not all could be
accommodated, preference shall be IX. EFFECT OF BILL OF LADING
given to the persons who is first in - If issued, the charter party still governs
loading his cargo, and the others shall their rights and the BL may be used as
have preference in the order of the proof of receipt of goods
dates of their charter; in the absence - BL constitutes a contract between the
of priority, in proportion to the vessel and the consignee, and neither he
amounts of weight or space that they nor his endorsee is bound by the terms of
may have contracted the charter party of which he has no
4. The shipowner may effect a notice or knowledge
substitution with respect to the vessel
which had been initially chartered Note: Read the pertinent codal provisions (570-
with that of another 590)
CHAPTER 10 involved
LOAS O BOTTOMRY AD There must necessarily There need not be such
be marine risk, the risk involved
RESPODETIA existence of which must
be duly established
I. DEFINITIONS AND CONCEPT The loan must be The formal requisites
• Bottomry - a contract whereby the executed in accordance regarding contracts in
owner of a ship borrows for the use, with form and manner general would apply
equipment or repair of the vessel, for a required in the Code of
definite term, and pledges the ship (or Commerce
the keel or bottom of the ship pars pro Must be recorded in the No such registration is
toto) as security, with the stipulation registry of vessels in required
that if the ship is lost during the voyage order to bind third
persons
or during the limited time on account
Preference is extended to The first lender as a
of the perils enumerated, the lender the last lender if there be general rule, enjoys
shall lose his money. several lenders, on the preference
• Loan on Respondentia – where the theory that were it not for
goods or some part thereof are the last lender, then the
hypothecated as security for a loan, the prior lenders would not
payment of which is dependent upon have benefited from the
maritime risks preservation of the
- it is the borrower’s personal
responsibility which is deemed to be • Instance where the loan on bottomry and
the principal security for the respondentia may be regarded as simple
performance of the contract, hence the loan only
term “respondentia” 1. if lender loaned an amount which
is larger than the value of the
- There must be a marine risk upon which object liable for the bottomry
the loan in predicated such that if the loan due to fraudulent means
vessel or the cargo is lost by virtue of that employed by the borrower, the
risk, the lender loses the capital or money loan shall be valid only for the
lent amount at which the object is
- There is no bottomry or respondentia if appraised by experts, and the
the money borrowed is subject to surplus principal shall be repaid
repayment in any event, nor in the case as if it were a simple loan, with
where a collateral secures the obligation legal interest thereon
to repay as when there is an insurance 2. if the full amount of the loan
policy upon the vessel or the cargo which is contracted in order to
- The lender in a loan on respondentia does load the vessel is not used for the
not lose his capital should the ship perish cargo, or given on the goods if all
due to marine peril, so long as the goods of them could not have been
subject of the loan survive or are saved loaded, the balance will be
considered as simple loan
II. DISTINGUISHED FROM SIMPLE to forestall the possibility
LOAN of other contracts which
differ in nature from
Bottomry or Simple loan being included under the
Respondentia name of the bottomry
The rate of interest is not The rate of interest must loan
subject to the Usury Law not exceed the ceiling
on account of the fixed by the Usury Law
extraordinary risks

3. if the effects on which the money c. the name and domiciles of the
is taken not be subjected to any person giving and the person
risk, the contract will be regarded receiving the loan
as simple loan d. the amount of the loan and the
premium stipulated
III. PARTIES TO THE LOANS e. the time for repayment
a. Shipowner f. the objects pledged to secure
- may secure a loan on bottomry upon his payment
ship g. the voyage which the risk is to run
- if part-owner only, he may contract but
shall be limited only to the extent of his V. CONSEQUENCES OF LOSS OF EFFECTS
interest in the vessel OF THE LOSS
b. Ship captain - if the effects of the loan be lost due to
- if part-owner may also obtain loan up to accident of the sea and it is proven that
the extent of his interest the cargo was on board, then the lender
- in cases of extreme necessity, in order to loses the right to institute the action
comply with the obligations under Art. which would pertain to him as such
583 and 611 of the Code of Commerce - lender retains such right of action if the
- no loans can be made on the salaries of the loss was caused by the inherent defect of
crew nor on the profits which may be the thing, or through the fault or malice of
expected the borrower, or through barratry on the
c. Cargo owner part of the captain, or if it was caused by
- shall have the right to enter into a loan on damages suffered by the vessel as a
respondentia involving his cargo consequence of being engaged in a
d. Captain contraband, or if it arose from having
- being mere agent of the shipowner, may loaded the goods on a vessel different
not contract on a loan on respondentia; from that designated in the contract,
otherwise, loan is void and costs of the unless the change was made due to force
contract shall be chargeable to his private majeure
account - lenders shall suffer in proportion to their
respective interest, the general average
IV. FORM OF THE LOANS which may take place in the things upon
- Must be executed in accordance with the which the loans were made
form and manner prescribed in Art. 270 - in particular average, the lender is
of the Code of Commerce obligated to contribute in proportion to
1. by means of a public instrument his respective interest, should it not
2. by means of a policy signed by the belong to the kind of risks excepted in
contracting parties and the broker Art. 731
taking part therein - in shipwreck, the amount for the payment
3. by means of a private instrument of the loan shall be reduced to the
proceeds of the effects which have been
- shall be entered in the certificate of saved but only after deducting the costs
registry of the vessel and shall be of the salvage
recorded in the registry of vessels - if loan is on the vessel or its parts, the
- contract must contain the following: freight earned during the voyage shall
a. statement of the kind, name and also be liable for its payment
registry of the vessel - if the same vessel or cargo should be the
b. the name and domicile of the object of the loan and marine insurance,
captain the value of what may be saved in case of
shipwreck shall be divided between the

lender and the insurer, in proportion to

their interests
Note: Read the pertinent codal provisions (594-

597)

CHAPTER 11 lender shall also bear the loss in

AVERAGES proportion to his interest
I. AVERAGES IN GENERAL C. Example of Simple Averages

Refer to page 599-600
- The following shall be considered
averages: III. GENERAL AVERAGE
1. All extraordinary or accidental
expenses which may be incurred A. Definition and Requisites
during the voyage in order to - shall include all the damages and
preserve the vessel, the cargo, or expenses which are deliberately caused in
both. order to save the vessel, its cargo or both
2. Any damages or deterioration at the same time, from real and known risk
which the vessel may suffer from - Requisites:
the time it puts to sea from the 1) there must be a common danger
port of departure until it casts 2) that for common safety part of the
anchor in the port of destination, vessel or of the cargo or both is
and those suffered by the sacrificed deliberately
merchandise from the time they 3) that from the expenses or damages
are loaded in the port of caused follows the successful
shipment until they are unloaded saving of the vessel and cargo
in the port of their consignment. 4) that the expenses or damages
(Art. 806, Code of Commerce) should have been incurred or
inflicted after taking proper legal
- Petty and ordinary expenses incident to steps and authority
navigation shall be considered as ordinary
expenses to be defrayed by the ship Common Danger
owner, unless there is express agreement - both the ship and the cargo, after has
to the contratry been loaded, are subject to the same
- Classified into: danger, whether during the voyage, or in
1. General or gross average the port of loading or unloading
2. Simple or particular average - danger arises from the accidents of the
sea, dispositions of the authority, or faults
II. SIMPLE AVERAGE of men
- circumstances should produce the peril
A. Definition ascertained and imminent or may
- shall include all the expenses and rationally be said to be certain and
damages caused to the vessel or to her imminent
cargo which have not inured to the
common benefit and profit of all the Deliberate Sacrifice
persons interested in the vessel and her - there must be voluntary sacrifice of a
cargo part for the benefit of the whole in order to
justify general average contribution (ex.
B. By Whom Borne voluntary jettison)
- the owner of the goods that suffered the - it cannot involve a damage which
damage bears the loss since it does not resulted beyond the control of the captain
inure to the common benefit and crew or without any intention on their
- res perit domino part
- if the vessel or goods are hypothecated - normally, the sacrifice is made through
by a loan on bottomry or respondentia, the the jettison of the cargo

- there can also be general average even if - owner of the goods which were
the sacrifice was not made during the sacrificed is entitled to receive the general
voyage: average contribution
a. where the sinking of a vessel is - the ff goods are not covered, even if
necessary to extinguish a fire in sacrificed:
a port, roadstead, creek or bay a. goods carried on deck unless the
b. where cargo is transferred to rule, special law or customs of the
lighten the ship on account of a place allow the same
storm to facilitate entry into a b. goods that are not recorded in the
port books or records of the vessel
* loss can no longer be considered a c. fuel for the vessel if there is more
general average if the thing was inevitably than sufficient fuel for the voyage
lost
IV. PROOF AND LIQUIDATION OF
Sacrifice must be successful AVERAGE
- no general contribution can be demanded Refer to page 615
if the vessel and other cargo that are
sought to be save were in fact not saved V. YORK-ANTWERP RULES
- however, if the ship was saved from the Refer to page 624
typhoon, there will be liability for general
average contribution even if the vessel will
be subsequently lost for some other reason
during the voyage
Compliance with legal steps

- expenses or damages should have been
incurred or inflicted after taking proper
legal steps and authority
B. Examples of General Average

Refer to page 607-608
C. By Whom Borne
- shall be borne by those who benefited
from the sacrifice (shipowner and owner
of the cargoes saved)
- contribution may also be imposed on the
insurers of the vessel or cargoes that were
saved as well as lenders on bottomry or
respondentia
- INSURERS: liable for any general
average in proportion to the contribution
attaching to his policy value where the
said value is less than the contributing
value of the thing insured
- LENDERS: shall suffer, in proportion to
their respective interest, the general
average which may take place in the goods
in which the loan is made
D. Who is entitled to Indemnity

CHAPTER 12 vessel has committed an error within

COLLISIOS that zone.
ii. Doctrine of Error in Extremis: If a
Definition: an impact or sudden contact of a vessel having a right of way suddenly
moving body with an obstruction in its line of changes its course during the third
motion, whether both bodies are in motion or one zone, in an effort to avoid an
stationary and the other, no matter which, in imminent collision due to the fault of
motion. another vessel, such act may be said to
> In Maritime Commerce: an impact or sudden be done in extremis, and even if
contact of a vessel with another whether both are wrong, it cannot create responsibility
in motion or one stationary. on the part of said vessel.
> Strictly speaking, it refers to the contact of 2
moving vehicles. Applicable Law in Collision: Liability for
negligence in the absence of contract is governed
Allision: one vessel is moving while the other is by Art. 2176, NCC – quasi-delict.
stationary. > The liabilities of shipowners/agents as well as
the captain or crew is still governed by the
> But for the purposes of applying the Code of provision of the Code of Commerce on Collision.
Commerce (CC), collision includes both collision
per se and allision. Rules on Liability: Liability in collision cases are
> It is not necessary in order for one vessel to be negligence based. Thus, even if liability with
liable that his vessel have hit another. A respect to collision is not governed by quasi-delict,
shipowner/agent may be made liable even if his courts are called upon to determine the negligence
vessel did not actually collide with another vessel. of the persons involved in order to impose
i. This situation is covered by Art. 831, liability.
Code of Commerce, which makes the > Liability of the person causing the injury:
owner of a third vessel liable if it forced a criminal and civil
vessel to hit another. > Test in determining negligence: the test of a
reasonable man in the position of an expert that
Zones of Collision applies in quasi-delict should also be applied
1. FIRST ZONE: covers all the time up to the although with due consideration to the expertise of
moment when the risk of collision may be said the persons involved including the carrier itself,
to have begun. the captain, officers and crew of the vessels.
i. Within this zone no rule is applicable i. Test: Whether a reasonable man with
because none is necessary. same expertise would have done what the
ii. Each vessel is free to direct its course party in question did under the same
as it deems best without reference to circumstances (forseeable or not
the movements of the other vessel. forseeable).
2. SECOND ZONE: covers the time between the ii. BUT REMEMBER, some rules that apply
moment when the risk of collision begins and to quasi-delict cannot be applied in
the moment when it has become a practical collision cases. E.g. doctrine of last clear
certainty. chance and the rule on contributory
i. The burden is on the vessel required to negligence cannot be applied.
keep away and avoid danger. REASON: Art. 827. If collision is
3. THIRD ZONE: covers the time between the imputable to both vessels, each one shall
moment of actual contact or the occurrence of suffer its own damages, and both shall
the error in extremis. be solidarily responsible for the losses
i. The vessel which has forced the and damages occasioned to their
privileged vessel into danger is cargoes.
responsible even if the privileged > It does not matter if one vessel has the
last clear chance or that the other
contributed to the collision, for as long as i) The indemnity due by reason of the death or
it can be proven that both are at fault or injury of persons shall be preferred if the value
contributed to the collision both vessels of the vessel and her appurtenances is not
are liable. sufficient to cover all the liabilities (Art. 838,
CC).
Rules on Collision of Vessels: j) If the collision should take place between
Philippine vessels in foreign waters, or if
a) The collision may be due to the fault, having taken place in the open seas, and the
negligence or lack of skill of the captain, vessels should make a foreign port, the Consul
sailing mate, or any other member of the of the Philippines in said port shall hold a
complement of the vessel. The owner of the summary investigation of the accident,
vessel at fault shall be liable for losses or forwarding the proceedings to the Secretary of
damages (Art. 826, CC). Foreign Affairs for continuation and
b) The collision may be due to the fault of both conclusion (Art. 839, CC).
vessels. Each vessel shall suffer its own losses,
but as regards the owner of the cargoes, both Doctrine of Inscrutable Fault: Where fault is
vessels shall be jointly and severally liable established but it cannot be determined which of
(Art. 827, CC). the two vessels were at fault, both shall be deemed
c) If it cannot be determined which vessel is at to have been at fault.
fault, each vessel shall also suffer its own
losses and both shall be solidarily liable for Requirements for Action to Recover Losses and
losses or damages on the cargoes (Art. 828, Damages arising from Collisions:
CC). 1. There must be a protest or declaration;
d) The vessels may collide with each other 2. The protest or declaration must be presented
through fortuitous event or force majeure. In within 24 hours;
this case, each shall bear its own damage (Art. 3. The protest or declaration must be presented
830, CC). before a competent authority:
e) Two vessels may collide with each other a. If collision occurred in Philippine
without their fault but by reason of a third territory: competent authority of the i)
vessel. The third vessel will be liable for point where the collision took place or ii)
losses and damages (Art. 831, CC). that of the first port of arrival of the
f) A vessel which is properly anchored and vessel;
moored may collide with those nearby by b. If collision occurred in a foreign country:
reason of storm or other cause of force consul of the Philippines
majeure. The vessel run into shall suffer its
own damage or expense (Art. 832, CC). PROTEST (Maritime Protest) – written statement
g) There is a presumption that a vessel is lost by by the master of the vessel or any authorized
reason of collision, if such vessel 1) sinks officer, attested by proper officer or a notary, to
immediately upon being run into, or 2) is lost the effect that damages has been suffered by the
during the voyage or is obliged to be stranded ship.
in order to be saved after having been obliged > It is required in the following cases:
to make a port to repair the damages (Art. 833, a) Arrival under stress
CC). b) Vessel is shipwrecked
h) The presence of pilots in both the colliding c) Vessel has gone through a hurricane or the
vessels, while discharging their duties at the captain believes that the cargo has
time of the collision, shall not exempt the suffered damages or averages
captains of each vessel from liability. d) Maritime collisions
However, the captains shall have the right to > The absence of protest, with respect to damages
be indemnified by the pilots without prejudice caused to persons or to the cargo, may not
to the criminal liability which the latter may prejudice the persons interested who were not on
incur (Art. 834, CC).
board or were not in a condition to make known collision is imputable to both vessels, each one
their wishes. shall suffer its own damages and both shall be
solidarily responsible for the losses and damages
> Limited liability rule applies to collision. suffered by their cargoes. Under the provisions of
the Code of Commerce, particularly Articles 826
CASES: to 839, the shipowner or carrier, is not exempt
from liability for damages arising from collision
ational Development Co. v. CA due to the fault or negligence of the captain.
Primary liability is imposed on the shipowner or
FACTS: NDP, first preferred mortgagee of three carrier in recognition of the universally accepted
vessels including the vessel Dona Nati, appointed doctrine that the shipmaster or captain is merely
MCP (Maritime Co. of the Phil.) as its agent to the representative of the owner who has the actual
manage and operate said vessel for and its behalf or constructive control over the conduct of the
and account. E. Philipp Corp. of New York loaded voyage. In case of collision, both the owner and
on board Dona Nati 1, 200 bales of American raw the agent are civilly responsible for the acts of the
cotton consigned to the order of Manila Banking captain. The Court held that both the owner and
Corp. (MBC) and the People’s Bank and Trust Co. agent (-aviero) should be declared jointly and
acting for and in behalf of the Pan Asiatic severally liable, since the obligation which is the
Commercial Co. who represents Riverside Mills subject of the action had its origin in a tortious act
Corp. Also loaded on the same vessel were the and did not arise from contract. The agent, even
cargoes (200 cartons of sodium lauryl sulfate and though he may not be the owner of the vessel, is
10 cases of aluminum foil) of Kyokuto Boekui, liable to the shippers and owners of the cargo
Kaisa, Ltd. consigned to the order of MBC. transported by it, for losses and damages
En route to Manila the vessel Dona Nati figured in occasioned to such cargo, without prejudice,
a collision at Ise Bay, Japan with a Japanese vessel however, to his rights against the owner of the
SS Yasushima Maru. As a result of which 550 ship, to the extent of the value of the vessel, its
bales of the raw cotton were lost and destroyed, of equipment, and the freight.
which 535 bales as damaged were landed and sold
on the authority of the General Average Authority City of Manila v. Atlantic, Gulf and Pacific Co.
and 15 bales were not landed and lost. The
Kyokuto cargoes were totally damaged. FACTS: The plaintiff's launch Jan, towing six
small scows up the River Pasig at Santa Ana came
ISSUE: 1) The determination of which laws into collision with a large lighter, heavily laden,
govern loss or destruction of goods due to towed by the launch Oriente of the defendant. She
collision of vessels outside Philippine waters. was run aground with her frame near the port bow
2) Liabilities. smashed in. It is proved that the Jan carried lights;
that both she and the scows she was towing were
RULING: 1) The law of the country to which the properly manned, and according to the testimony
goods are to be transported governs the liability of of the plaintiff's witnesses as soon as they saw the
the common carrier in case of their loss, light ahead of the Oriente their whistle was blown
destruction or deterioration. In the case at bar, the and on receiving an answering whistle, in order to
goods in question are transported from San avoid a shock, they veered to starboard, leaving
Francisco and Tokyo to the Philippines and they the channel and running into shoal water.
were lost due to a collision which was found to Defendant's witnesses admit that they saw the Jan
have been caused by the negligence or fault of and its tow with the lights thereon and blew their
both captains of the colliding vessels. The laws of own whistle, but say that they did not hear any
the Philippines will apply, and its is immaterial whistle from the other launch, which kept the
that the collision actually occurred in foreign middle of the stream; that their boat was also put
waters, such as Ise Bay, Japan. to starboard and the launches successfully passed
2) But more in point to the instant case is Article one another, but, their scow in tow, being slow in
827 of the same Code, which provides that if the changing direction, struck against the Jan, and
they claim that they did all in their power to avoid bridge of the Isabel discerned the light of another
a collision in view of the difficulty of controlling vessel, which proved to be the Antipolo, also a
the boat on their course downstream. It appears coastwise vessel, on its way to Manila and coming
that this tow was secured to their launch by a towards the Isabel. At about the same time both
single cable, forking in the shape of the letter "Y" the watch and mate on the bridge of the Antipolo
so that each end was fastened to one side of the also saw the Isabel, the two vessels being then
lighter. about one mile and a half or two miles apart. Each
The judge of the court below in rendering vessel was going approximately at the speed of 6
judgment for the plaintiff appears to have relied miles an hour, and in about ten minutes they had
upon several incidents; that the captain of the together traversed the intervening space and were
Oriente had no license but only a permit to in close proximity to each other. When the mate of
navigate from the surveyor of customs; that it was the Antipolo, who was then at the wheel, awoke to
easier to control the boat going with the current the danger of the situation and saw the Isabel
than the one going against it; that there was but "almost on top of him," to use the words of the
one tow rope when there might have been more, committee on marine accidents reporting the
and that there was no helmsman on the lighter. incident, he put his helm hard to the starboard.
RULING: It is indeed of common knowledge, that ISSUE: Whether both vessels were negligent.
a boat going against the current is quicker to mind
her helm than one borne along by it, and the RULING: This maneuver was correct, and if the
plaintiff's expert also testified that whereas in helmsman of the Isabel had done likewise, all
ocean tows several cables were used, on the River would apparently have been well, as in that event
Pasig it was customary to employ but one in order the two vessels should have passed near to each
to leave the vessel under tow greater freedom of other on the port side without colliding. As chance
movement and therefore better self-control. would have it, however, the mate on the Isabel at
Aboard this lighter there was no light, there was this critical juncture lost his wits and, in disregard
no crew, and it seems there was no rudder. The of the regulations and of common prudence, at
absence of the light may not have contributed to once placed his own helm hard to port, with the
the accident, but the lack of a rudder and of any result that his boat veered around directly in the
person to direct the boat so clearly deprived it of path of the other vessel and a collision became
control of its own movements that we are satisfied inevitable. Upon this the mate on the Antipolo
that when under tow of the forked rope it was not fortunately stopped his engines, but the Isabel
handily manageable. Therefore, instead of continued with full speed ahead, and the two
following approximately in the wake of the vessels came together near the bows. The Isabel
launch, it struck out on a tangent thereto, thus immediately sank, with total loss of vessel and
causing the collision. We attach no importance to cargo, though the members of her crew were
the character of the permit to the Oriente's captain picked up from the water and saved. The mate of
as a cause of the accident. the Antipolo was clearly negligent in having
permitted that vessel to approach directly towards
Government v. Phil. Steamship Co. & the Isabel until the two were in dangerous
Fernandez Hermanos proximity. For this there was no excuse whatever,
since the navigable sea at this point is wide and the
FACTS: At about 10 o'clock at night, the incoming steamer could easily have given the
coastwise Isabel, equipped with motor and sails, outgoing vessel a wide berth. On the other hand it
left the port of Manila with primary destination to is not clear that the Isabel was chargeable with
Balayan, Batangas, carrying, among its cargo, 911 negligence in keeping on its course; for this boat
sacks of rice belonging to the plaintiff and had its jib sail hoisted, and may for that reason be
consigned to points in the south. After the boat had considered to have had the right of way.
been under weigh for about four hours, and has Negligence shortly preceding the moment of
passed the San Nicolas Light near the entrance collision is, however, undoubtedly chargeable to
into Manila Bay, the watch and the mate on the the Isabel, for the incorrect and incompetent way
in which this vessel was then handled. The

explanation of this may perhaps be found in the ISSUE: Whether or not the accident occurred
fact that the mate on the Isabel had been on through the negligence of the bohol only, or
continuous duty during the whole preceding day whether both launches can be blamed for the
and night; and being almost absolutely exhausted, collision.
he probably was either dozing or inattentive to
duty at the time the other vessel approached. Both RULING: Negligence on the part of the bohol is
vessels were at fault; and although the negligence demonstrated by the following:
on the part of the mate of the incoming vessel 1) The patron of the bohol gave the whistle which
preceded the negligence on the part of the mate of indicated that the Active had a clear way and
the outgoing vessel by an appreciable interval of should pass to the starboard, and did not give four
time, the first vessel cannot on that account be blasts of the whistle in quick succession in order to
absolved from responsibility. denote danger.
Where both vessels are to blame, both shall be 2) The two scows in tow by the bohol were
solidarily responsible for the damage occasioned apparently not properly fastened together, as
to their cargoes. As the Isabel was a total loss and required by section 197 of the Philippine Marine
cannot sustain any part of this liability, the burden Regulations.
of responding to the Government of the Philippine 3) The two launches passed each other under the
Islands, as owner of the rice embarked on the bridge of Spain, and the bohol, instead of steering
Isabel, must fall wholly upon the owner of the so as to avoid danger of a collision between the
other ship, that is, upon the defendant, the Active and its scows, kept its course and crowded
Philippine Steamship Company, Inc. the Active most against a buoy. While, in
accordance with paragraph 163 of the Philippine
Lopez v. Duruelo (already discussed under Marine Regulations, steam vessels towing have
Chapter 7) the right of way over steam vessels not towing this
does not mean that the vessel with a tow can usurp
Marine Trading Co. v. Government the entire river so as to force another vessel into
the bank. In conformity with the doctrine cited by
FACTS: About 8 o'clock in the morning, in the appellant, that the preferred steamer will not be
Pasig River, below and near the bridge of Spain, held in fault for maintaining her course and speed,
the launch bohol was towing up the river two this is only true so long as it is possible for the
rudderless scows or lighters, one behind the other. other vessel to avoid her by the proper maneuver.
The scow nearest the launch was about 5 meters As opposed to the foregoing, we find that the
behind, was empty, and was high in the water. The plaintiff's agent was in no way to blame for the
second lighter was tied to the rear of the fist one, collision.
with a distance of about 2 meters intervening, was
loaded, and was lower in the water. The second Smith Bell & Co. and Tokyo Marine & Fire
lighter was tied to the rear of the first one, with a Insurance Co. v. CA
distance of about 2 meters intervening, was
loaded, and was lower in the water. The Active FACTS: In the early morning of 3 May 1970-at
was coming down the river from Pandacan toward exactly 0350 hours, on the approaches to the port
Manila Bay. The patron of the Active blew one of Manila near Caballo Island, a collision took
blast of his whistle, which indicated that the Active place between the M/V "Don Carlos," an inter-
had a clear way and should pass to starboard. island vessel owned and operated by private
When under the bridge of Spain, the Active passed respondent Carlos A. Go Thong and Company
the bohol and the first scow towed by it. But when ("Go Thong"), and the M/S "Yotai Maru," a
the Active was about to pass the second scow, the merchant vessel of Japanese registry. The "Don
latter swerved to the left, and its forward left end Carlos" was then sailing south bound leaving the
corner struck the Active on the port side between port of Manila for Cebu, while the "Yotai Maru"
the cabin and the bow with such force and impact was approaching the port of Manila, coming in
that the launch sank immediately. from Kobe, Japan. The bow of the "Don Carlos"
rammed the portside (left side) of the "Yotai "Yotai Maru" turned starboard (to its right) and at
Maru" inflicting a three (3) cm. gaping hole on her the same time gave the required signal consisting
portside near Hatch No. 3, through which seawater of one short horn blast. The "Don Carlos" turned
rushed in and flooded that hatch and her bottom to portside (to its left), instead of turning to
tanks, damaging all the cargo stowed therein. starboard as demanded by Rule 18 (a). The "Don
Carlos" also violated Rule 28 (c) for it failed to
ISSUE: Whether the "Yotai Maru" had been give the required signal of two (2) short horn
negligent and at fault in the collision with the blasts meaning "I am altering my course to port."
"Don Carlos." When the "Yotai Maru" saw that the "Don Carlos"
was turning to port, the master of the "Yotai Maru"
RULING: The Court believes that there are three ordered the vessel turned "hard starboard" at 3:45
(3) principal factors which are constitutive of a.m. and stopped her engines; at about 3:46 a.m.
negligence on the part of the "Don Carlos," which the "Yotai Maru" went "full astern engine." 20 The
negligence was the proximate cause of the collision occurred at exactly 3:50 a.m.
collision.
1) Failure of the "Don Carlos" to comply with 2) Failure to have on board that night a
the requirements of Rule 18 (a) of the "proper look-out" as required by Rule I (B)
International Rules of the Road ("Rules"), Under Rule 29 of the same set of Rules, all
which provides: consequences arising from the failure of the
"Don Carlos" to keep a "proper look-out" must
When two power-driven vessels are meeting be borne by the "Don Carlos."
end on, or nearly end on, so as to involve risk of A "proper look-out" is one who has been trained as
collision, each shall alter her course to such and who is given no other duty save to act as
starboard, so that each may pass on the port a look-out and who is stationed where he can see
side of the other. This Rule only applies to cases and hear best and maintain good communication
where vessels are meeting end on or nearly end on, with the officer in charge of the vessel, and who
in such a manner as to involve risk of collision, must, of course, be vigilant. In the case at bar, the
and does not apply to two vessels which must, if failure of the "Don Carlos" to recognize in a
both keep on their respective course, pass clear of timely manner the risk of collision with the "Yotai
each other. The only cases to which it does apply Maru" coming in from the opposite direction, was
are when each of two vessels is end on, or nearly at least in part due to the failure of the "Don
end on, to the other; in other words, to cases in Carlos" to maintain a proper look-out.
which, by day, each vessel sees the masts of the
other in a line or nearly in a line with her own; and 3) The fact that Second Mate Benito German
by night to cases in which each vessel is in such a was, immediately before and during the
position as to see both the sidelights of the other. It collision, in command of the "Don Carlos."
does not apply, by day, to cases in which a vessel Second Mate German simply did not have the
sees another ahead crossing her own course; or, by level of experience, judgment and skill essential
night, to cases where the red light of one vessel is for recognizing and coping with the risk of
opposed to the red light of the other or where the collision as it presented itself that early morning
green light of one vessel is opposed to the green when the "Don Carlos," running at maximum
light of the other or where a red light without a speed and having just overtaken the "Don
green light or a green light without a red light is Francisco" then approximately one mile behind to
seen ahead, or Where both green and red lights are the starboard side of the "Don Carlos," found itself
seen anywhere but ahead. head-on or nearly head on vis-a-vis the "Yotai
Maru.” It is essential to point out that this
For her part, the "Yotai Maru" did comply with its situation was created by the "Don Carlos" itself.
obligations under Rule 18 (a). As the "Yotai Maru"
found herself on an "end-on" or a "nearly end-on" Tiampo v. Villanueva, et al.
situation vis-a-vis the "Don Carlos, " and as the
distance between them was rapidly shrinking, the
FACTS: In the morning of the accident in question port side and the steamer Diana Dollar and Silver
and before the occurrence thereof, the m/s Tai Yin Sandal off her starboard side and bow, and in view
was anchored in the stream, Iloilo Harbor of her tonnage and draft, could not have possibly
(Guimaras Strait) near the mouth of the Iloilo executed any safe and reasonable maneuver to
River. To the north of said motorship's anchorage avoid collision, or at least minimize the effects
was the s/s Diana Dollar and still farther north thereof, other than to reverse her engines at full
was the s/s Silver Sandal, both anchored. The s/s speed which she did promptly. Such temerary
Takaoka Maru was anchored away to starboard maneuver of launch Fredy across the bow of the
near Guimaras Island. Sometime after 5 a. m., m/s m/s Tai Yin may be attributed to no cause other
Tai Yin hove up anchor and started at slow speed than to the negligence of her patron who either
ahead towards the North Entrance of Guimaras failed to notice the presence and approach of the
Strait passing between the s/s Diana Dollar and m/s Tai Yin, as may be deduced from his
the shore under the direction of Port Pilot Ramon testimony, or failed to sense the extreme danger of
Garriz. The motorship's captain and second his act, evidently believing, in his manifest
officer, and Captain Rafael Xaudaro, a local ignorance of navigation rules, that he had the right
coastwise pilot, were on the bridge with said pilot. of way and expecting the much larger and more
At that juncture, the lorcha or sail vessel Cataluna cumbersome vessel to keep clear.
was sighted off the motorship's port bow with sails
set apparently southward bound, heading on a RULING: Among rules applicable to navigation
course opposite to but clear off the motorship's. none is better founded on reason and experience
When they were at a distance of about 500 or 600 than that which requires the navigating officers of
feet apart, the Cataluna was taken in tow by any vessel to assume that an approaching vessel
launch Fredy and both tug and tow, without giving will observe the regulations prescribed for
any warning signal, swung to port across the bow navigation. Any other rule would introduce guess
of the m/s Tai Yin towards the s/s Takaoka Maru. work into the control of ships and produce
As said maneuver was made when the tug and tow uncertainty in the operation of the regulations.
in question were at such distance from the said There was no valid reason for the Fredy not to
motorship that collision was imminent, the said have kept the original course until both vessels
motorship gave one blast signifying her course to were clear of one another, and the contention of
starboard. The launch Fredy, however, disregarded plaintiff-appellant that paragraph 163 of the
such signal and continued on her course to port Philippine Marine Regulations, to the effect that
whereupon the m/s Tai Yin promptly reversed her steam-vessels towing, have the right of way over
engines at full speed giving the regulation signal steam-vessels not towing, is controlling, is
of three blasts. Notwithstanding said maneuver, incorrect. Such a rule is subject to reasonable
however, the port bow of the m/s Tai Yin struck limitations and this court has held in the case of
the starboard side of lorcha Cataluna causing the the Marine Trading Co. vs. Government of the
latter to sink. Philippine Islands (39 Phil., 29), that the vessel
There is no question that when the m/s Tai Yin and with a tow is not, by that fact, authorized to usurp
lorcha Cataluna came in sight of each other when the entire channel.
both were underway, they were following opposite
courses that ran clear off each other. Under the US v. Smith Bell & Co.
circumstances both vessels should have
maintained their respective courses until one or the FACTS: This was an action by the plaintiff against
other or both had passed clear off each other. The the defendant, brought in the Court of First
maneuver of launch Fredy to port across the bow Instance of the city of Manila, to recover the sum
of the oncoming motorship was against all rules of of $1,600, United States currency, for damages
seamanship and was a gross violation of the Rules occasioned to the Navy boat Barcelo on the 6th
of the Road as it unnecessarily provoked and day of November, 1902, at about 11 o'clock p.m.,
thereby caused the present collision. When the on the said day, near the mouth of the Pasig River,
launch Fredy initiated and continued her maneuver by a collision with a casco that was then and there
to port, the m/s Tai Yin, with the shore close to her
being towed by the launch Alexandra. The launch launch were negligence in failing to exhibit proper
Alexandra is the property of the defendant. The lights and in failing to take the proper steps to
inferior court found that the defendant had not keep out of the path of the defendant's vessel,
complied with the rules of navigation in Manila nevertheless the officers on defendant's vessel, by
Bay, in that it failed to display lights in accordance the exercise of due precautions might have
with such regulations, and that, by reason of such avoided the collision by a very simple manuever.
failure, the collision and consequent damages
occurred. The defendant claimed that the plaintiff RULING: But it is sufficient answer to this
could not recover in the action, for the reason that contention to point out that the rule of liability in
it had not complied with the provisions of the this jurisdiction for maritime accidents such as that
Code of Commerce, relying particularly upon now under consideration is clearly, definitely, and
article 835 of the same. Article 835 provides: "The unequivocally laid down in the above-cited article
action for the recovery of loss and damages arising 827 of the Code of Commerce; and under that rule,
from collisions can not be admitted if a sworn the evidence disclosing that both vessels were
statement or declaration is not presented within blameworthy, the owners of either can
twenty-four hours to competent authority of the successfully maintain an action against the other
point where the collision took place, or that of the for the loss or injury of his vessel.
first port of arrival of the vessel." The plaintiff In cases of a disaster arising from the mutual
claimed that this provision of the Commercial negligence of two parties, the party who has a last
Code did not apply to it. clear opportunity of avoiding the accident,
notwithstanding the negligence of his opponent, is
RULING: The quoted provision of the considered wholly responsible for it under the
Commercial Code applies to all persons engaged common-law rule of liability as applied in the
in traffic upon the waters of the Philippine courts of common law of the United States. But
Archipelago; that the defendant has as much right this rule (which is not recognized in the courts of
to insist upon compliance with this provision of admiralty in the United States, wherein the loss is
the code where the damages were done to a boat divided in cases of mutual and concurring
operated by the Government as if such boat had negligence, as also where the error of one vessel
been operated by a private individual or company. has exposed her to danger of collision which was
This provision of the Commercial Code, requiring consummated by he further rule, that where the
protest to be made and presented to the proper previous application by the further rule, that where
authority within twenty-four hours after the the previous act of negligence of one vessel has
collision, or after the arrival of the injured boat in created a position of danger, the other vessel is not
port, is a prerequisite to the bringing of an action necessarily liable for the mere failure to recognize
for damages. By having failed to comply with this the perilous situation; and it is only when in fact it
provision of the Commercial Code it can not does discover it in time to avoid the casualty by
maintain this action for damages. the use of ordinary care, that it becomes liable for
the failure to make use of this last clear
C.B. Williams v.Yangco opportunity to avoid the accident. So, under the
English rule which conforms very nearly to the
FACTS: The steamer Subic, owned by the common-law rule as applied in the American
defendant, collided with the lunch Euclid owned courts, it has been held that the fault of the first
by the plaintiff, in the Bay of Manila at an early vessel in failing to exhibit proper lights or to take
hour on the morning of January 9, 1911, and the the proper side of the channel will relieve from
Euclid sank five minutes thereafter. Counsel for liability one who negligently runs into such
the plaintiff, basing his contention upon the theory vessels before he sees it; although it will not be a
of the facts as contended for by him, insisted that defense to one who, having timely warning of the
under he doctrine of "the last clear chance," the danger of collision, fails to use proper care to
defendant should be held liable because, as he avoid it.
insists, even if the officers on board the plaintiff's In the case at bar, the most that can be said in
support of plaintiff's contention is that there was
negligence on the part of the officers on

defendant's vessel in failing to recognize the
perilous situation created by the negligence of
those in charge of plaintiff's launch, and that had
they recognized it in time, they might have
avoided the accident. But since it does not appear
from the evidence that they did, in fact, discover
the perilous situation of the launch in time to avoid
the accident by the exercise of ordinary care, it is
very clear that under the above set out limitation to
the rule, the plaintiff cannot escape the legal
consequences of the contributory negligence of his
launch, even were we to hold that the doctrine is
applicable in the jurisdiction, upon which point we
expressly reserve our decision at this time.

CHAPTER 13 2. If the risk of enemies, privateers, or pirates

ARRIVAL UDER STRESS AD should not have been well known, manifest,
SHIPWRECKS and based on positive and provable facts.
3. If the defect of the vessel should have arisen
13.1 Arrival under stress from the fact that it was not repaired, rigged,
equipped, and prepared in a manner suitable
13.1.1. Definition: It is the arrival of the vessel at for the voyage, or from some erroneous order
the nearest and most convenient port, if during the of the captain.
voyage the vessel cannot continue the trip of the 4. When malice, negligence, want of foresight, or
port of destination due to: lack of skill on the part of the captain exists in
a) Lack of provisions; the act causing the damage.
b) Well-founded fear of seizure, privateers,
or pirates; and 13.1.4. Expenses
c) By reason of any accident of the sea
disabling it to navigate. • General Rule: Expenses of an arrival under
stress shall always be for the account of the
13.1.2. Steps in the determination of the shipowner/agent.
propriety of an arrival under stress Exception: They shall not be liable for the
damages which may be caused the shippers by
a) The captain should determine during the reason of the arrival provided the latter is
voyage if there is well founded fear of legitimate. Otherwise, the ship agent and the
seizure, privateers and other valid captain shall be jointly liable (Art. 821, CC).
grounds; • If in order to make repairs to the vessel or
b) The captain shall then assemble the because there is danger that the cargo may
officers; suffer damage, it should be necessary to
c) The captain shall summon the persons unload, the captain must request authorization
interested in the cargo who may be present from the competent judge or court for the
and who may attend but without right to removal, and carry it out with the knowledge
vote; of the person interested in the cargo, or his
d) The officers shall determine and agree if representative, should there be any.
there is well founded reason after
examining the circumstances. The captain In a foreign port, it shall be the duty of the
shall have the deciding vote; Philippine Consul, where there is one, to give
e) The agreement shall be drafted and the the authorization.
proper minutes shall be signed and entered i. If in order to make repairs to the
in the log book; vessel - expenses shall be for the
f) Objections and protests shall likewise be account of the ship agent/owner.
entered in the minutes. ii. If because there is danger that the
cargo may suffer damage – expenses
13.1.3. When Improper shall be chargeable against the owners
of the merchandise for whose benefit
An arrival shall not be considered lawful in the the act was performed.
following cases (Art. 820, CC): iii. Both reasons – expenses shall be
divided proportionately between the
1. If the lack of provisions should arise from the value of the vessel and that of the
failure to take the necessary provisions for the cargo. (Art. 822, CC)
voyage according to usage and customs, or if
they should have been rendered useless or lost 13.1.5. Custody of Cargo
through bad stowage or negligence in their
care. • The custody and preservation of the cargo
which has been unloaded shall be entrusted to
the captain, who shall be responsible for the goods are delivered to them. In case
same, except in cases of force majeure (Art. the merchandise should be sold, the
823, CC). payment for the expenses with respect
• The captain may request a competent judge or to the salvage shall be preferred over
court, or the consul in a proper case, the sale any other obligation (Art. 842, CC).
of all or part of the cargo, if the entire or part 2. If several vessels sail under convoy,
of said cargo should appear to be damaged, or and any of them should be wrecked,
there should be imminent danger of its being the cargo saved shall be distributed
damaged. among the rest in proportion to the
amount which each one is able to take.
The competent authority (or consul) shall If it is not possible to transfer to the
authorize the sale after an examination and other vessels the entire cargo of the
declaration of experts, advertisements, and vessel wrecked, the goods of the
other formalities required by the case, and highest value and smallest volume
entry in the book, in accordance with Art. 624. shall be saved first (Art. 843, CC).
The captain shall, in a proper case, justify the • OBLIGATIONS/DUTIES OF THE

legality of his conduct, under the penalty of CAPTAIN:
answering to the shipper for the price the 1. In paragraph [A (ii)] above, the
merchandise would have brought if they had captain of the wrecked vessel shall
arrived in good condition at the port of enter a protest against any captain
destination (Art. 824, CC). who refuses to receive what may
correspond to the latter without
13.1.6. Liability of the Captain sufficient cause, for the losses and
damages resulting therefrom.
A. If after the cause of the arrival under stress has
ceased and the captain should not continue the The protest shall be presented before 2
voyage, the latter shall be responsible for sea officials, ratifying the same within
damages caused by his delay. 24 hours after arrival at the first port,
and including it in the proceedings the
However, if the cause was fear of enemies, former must institute in accordance
privateers, or pirates, a deliberation and with Art. 612.
resolution in a meeting of the officers of the
vessel and persons interested in the cargo who The captain, with the concurrence of
may be present (see 13.1.1) shall precede the the officers of his vessel, shall also be
departure (Art. 825, CC). the one to designate which cargo has
the highest value and the lowest
13.2. Shipwreck volume (Art. 843, CC).
2. A captain who may have taken on
13.2.1. Definition: It is the demolition or board the goods saved from the wreck
shattering of a vessel caused by her driving ashore shall continue his course to the port of
or on rocks and shoals in the midseas, or by the destination, and on arrival shall
violence of winds and waves in tempests. deposit the same, with judicial
intervention, at the disposal of the
13.2.2. Rules in case of salvage legitimate owners.
In case he changes his course, if he
• GOODS/CARGOES: can unload them at the port of which
1. It shall be specially bound for the they were consigned, the captain may
payment of the expenses of the make said port if the shippers or
respective salvage. The amount shall supercargoes present and the officers
be paid by the owners before the and passengers of the vessel consent
thereto; BUT he may not do so, even

with said consent, in time of war or
when the port is difficult and
dangerous to make.
NOTE: The owner of the cargo shall
defray all the expenses of this arrival
as well as the payment of the
freightage which, after taking into
consideration the circumstances of the
case, may be fixed by agreement or by
a judicial decision (Art. 844, CC).
13.2.3. Other Related Provisions
• The losses and deteriorations suffered by a

vessel and her cargo by reason of shipwreck or
stranding shall be individually for the account
of the owners, the part which may be saved
belonging to them in the same proportion (Art.
840, CC).
• If the wreck or stranding should be caused by
the malice, negligence, or lack of skill of the
captain, or because the vessel put to sea was
insufficiently repaired or equipped, the ship
agent or the shippers may demand indemnity
of the captain for the damages caused to the
vessel or to the cargo by the accident, in
accordance with Arts. 610, 612, 614, and 621
(Art. 841, CC).
• If on the vessel there should be no person
interested in the cargo, who can pay the
expenses and freightage corresponding to the
salvage, the competent judge or court may
order the sale of the part necessary to cover
the same. This shall also be done when its
preservation is dangerous, or when in a period
of one year it should not have been possible to
ascertain who are its legitimate owners (Art.
845, CC).

CHAPTER 14 14.3. Requirements for Compensation: A

SALVAGE salvage claim may be awarded to the salvor if the
following requirements are present:
14.1. Definition: service which one person renders
to the owner of a ship or goods, by his own labor, 1. There must be a marine peril;
preserving the goods or the ship which the owner 2. The vessel is a) shipwrecked beyond the
or those entrusted with the care of them have control of the crew or b) shall have been
either abandoned in distress at sea, or are unable to abandoned;
protect and secure. 3. The service of picking up and conveying the
vessel of cargo to a safe place is voluntarily
There is salvage where a person (or persons) picks rendered and is not required from an existing
up and conveys to a safe place a vessel or its cargo duty or from a special contract; and
which are beyond the control of the crew or shall 4. The service must have been successful in
have been abandoned by them (Sec. 1, Salvage whole or in part or that the service rendered
Law/SL). contributed to such success.
NOTE: There can be also a contract of salvage > The salvor must have no relation, contractual or
that may be voluntarily agreed upon by the parties. otherwise, upon the ship in distress. Thus, the
following persons shall have no right to a reward:
> It is a compensation for actual services rendered 1. The crew of the vessel shipwrecked or
to the property charged with it, and is allowed for which was in danger of shipwreck;
meritorious conduct of the salvor, and in 2. He who shall have commenced the
consideration of a benefit conferred upon the salvage in spite of opposition of the
person whose property he has saved. captain or of his representatives; and
> A claim for salvage rests on the principle that, 3. He who shall have failed to comply with
unless the property be in fact saved by those who the provisions of Sec. 3, SL.
claim the compensation, it cannot be allowed, Sec. 3. He who shall save or pick up a
however benevolent their intention and however vessel or merchandise at sea, in the
heroic their conduct. absence of the captain of the vessel,
owner, or a representative of either of
14.2. Kinds of Salvage Services: them, they being unknown, shall convey
and deliver such vessel or merchandise,
1. Voluntary – compensation is dependent upon as soon as possible, to the Collector of
success Custom, if the port has a collector, and
2. Rendered under a contract for a per diem or otherwise to the provincial treasurer or
per horam wage, payable at all events municipal mayor.
3. Under a contract for a compensation payable
only in case of success 14.4. Abandonment
> Where the stipulated compensation is dependent > The abandonment mentioned in 14.3 is present
upon success, and particularly of success within a when the vessel is considered a derelict.
limited time, it may be very much larger than a
mere quantum meruit. Such contracts will not be 14.4.1. Derelict: a ship or her cargo which is
set aside by Courts unless corruptly entered into, abandoned and deserted at sea by those who were
or made under fraudulent representations, a clear in charge of it, without any hope of recovering it
mistake or suppression of important facts, in (sine spe recuperandi), or without any intention of
immediate danger to the ship, or under returning to it (sine animo revertendi).
circumstances amounting to compulsion, or when
their enforcement would be contrary to equity and > Whether the property is to adjudged derelict is
good conscience. determined by ascertaining what was the intention

and expectation of those in charge of it when they

quitted it. 14.5.1. Principal circumstances to be considered
> If those in charge left with the intention of in fixing the amount of compensation:
returning, or of procuring assistance, the property
is not derelict, but if they quitted the property with 1. The labor expended by the salvors in
the intention of finally leaving it, it is derelict, and rendering the salvage service;
a change of their intention and an attempt to return 2. The promptitude, skill, and energy displayed
will not change its nature. in rendering the service and saving the
> It is a rare case when the master of the ship will property;
leave without the intention of returning, if there is 3. The value of the property employed by the
the slightest hope of saving his vessel. Thus, if it is salvors in rendering the service, and the
clear that the intention to return is slight, the danger to which such property was exposed;
salvage which was done thereafter is considered 4. The risk incurred by the salvors in rescuing
valid. the property from the impending peril;
> COMME-T: The essence of derelict is that 5. The value of the property salved; and
“when a vessel is found at sea, deserted, and has 6. The degree of danger from which the property
been abandoned by the master and crew without was rescued.
the intention of returning and resuming the
possession, x x x the finder who takes the 14.5.1.2. Principal circumstances to be
possession with the intention of saving her, considered in fixing the amount of
gains a right of possession, which he can compensation under Section 10, Salvage Law:
maintain against the true owner” (Aquino &
Hernando, p. 678, citing Erlanger & Galinger v. 1. The expenditures made to recover or save the
Swedish East Asiatic Co., Ltd.). When there is no vessel or the cargo or both
derelict, there can be no abandonment, and if there 2. The zeal demonstrated
is the absence of abandonment, the finder or salvor 3. The time employed, the services rendered
cannot claim reward. 4. The excessive express occasioned the number
• REMEMBER, the owner does not of persons who aided
renounce his right of property while the 5. The danger to which they and their vessels
vessel is in the possession of the finder or were exposed as well as that which menaced
salvor. This is not presumed to be his the things recovered or salvaged
intention, nor does the finder acquire any 6. The value of such things after deducting the
such right. But the owner does abandon expenses.
temporarily his right of possession, which
is transferred to the finder, who becomes 14.6. Rights and Obligations of Salvors and
bound to preserve the property with good Owners
faith, and bring it to a place of safety for
the owner’s use; and he acquired a right to • The salvor is entitled to compensation for
be paid for his services a reasonable and services rendered, and the enforcement of that
proper compensation, out of the property right, he has a lien upon the property salvaged
itself. whereby he has the right of retention over the
property until he is paid.
14.5. Basis for Entitlement to Salvage Reward o The salvor is to all intents and
purposes, a joint owner and if the
> A compensation as salvage should not be viewed property is lost he must bear his share
by the admiralty courts as pay on the principle of like the other joint owners.
quantum meruit or as a remuneration pro opere et • If the ship and its cargo are saved together by
labore, but as a reward given for perilous services, the salvor, the salvage allowance should be
voluntarily rendered, and as an inducement to charged against the ship and cargo in the
mariners to embark in such dangerous enterprises proportion of their respective values, as in the
to save life and property.
case of general average; and neither is liable the remainder of the crew of the latter
for the salvage due from the other. vessel, so as to give the owner ½, the
o The liability of the owner is limited to captain ¼, and all the remainder of the
such part of the salvage compensation crew ¼, in proportion to their
due for the entire service as is respective salaries, in the absence of
proportionate to the value of the ship. an agreement to the contrary.
o Not only is the salvage charge a • If different persons intervened in the salvage
separate and divisible burden as or in rendering assistance, the reward shall be
between the ship and cargo, but also divided between them in proportion to the
as between portions of the cargo services which each one may have rendered,
belonging to different owners. and, in case of doubt, in equal parts.
• The salvor has a right of possession of a
derelict for purposes of a salvage claim.
• While the salvor has the right to retain the
abandoned vessel or cargo until the salvage is
completed without interference from other
persons, it would not be so if the salvor has
inadequate means. In such case, the salvor is
bound to accept additional assistance from
other salvors who may offer their services.
• See Section 3 cited in 14.3.
• See Comment under 14.4.1
• The owner or his representative shall have a
right to the delivery of the vessel or things
saved after the salvage is accomplished,
provided that he pays, or gives a bond to
secure the expenses and the proper reward.
• If the owner does not make any claim within 3
MONTHS after the publication by the
authorities of a salvage report, the things
saved shall be sold at a public auction, the
proceeds shall be deposited to the National
Treasury after deducting the expenses and the
proper reward to which the salvor is entitled.
o If 3 YEARS lapses without any claim,
the salvor shall be entitled to half of
the deposit as his reward and the other
half shall pertain to the government.
• The owner of the salving vessel is also entitled
to the salvage reward for the use of his vessel
in rendering salvage services even though he
may not have been present at the time the
salvage service was rendered.
o Reward is also due to the captain and
crew of the salving vessel.
o If a vessel or its cargo shall have been
assisted or saved, entirely or partially,
by another vessel, the reward for
salvage or assistance shall be divided
between the owner, the captain, and

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otes on Transportation Law

LAW O TRASPORTATIO AD PUBLIC UTILITIES

CHAPTER 1 c. has a bona fide intention to use facilities

San Beda College of Law A. D. AVILA | H. MORAŇA 1

Arrastre operator’s functions has nothing to do

San Beda College of Law A. D. AVILA | H. MORAŇA 2

CHAPTER 2 carriage; and 3) the general nature of the business

I. Obligations of the carrier (1) Hazardous and Dangerous Substances

(1) Abandonment C. WHERE AND TO WHOM DELIVERED

measures to secure safety of

carriers must also present proof of exercise of

San Beda College of Law A. D. AVILA | H. MORAŇA 10

delay means “the period of time that has lapsed

(2) Carrier’s Lien

ARTICLE 375. The goods transported shall be

San Beda College of Law A. D. AVILA | H. MORAŇA 12

CHAPTER 3 common carrier (-ote: Typically

San Beda College of Law A. D. AVILA | H. MORAŇA 13

look after the convenience and comfort of the

Where a common carrier has reasonable ground to

San Beda College of Law A. D. AVILA | H. MORAŇA 16

CHAPTER 4 7. Custody Bill The goods are already receied by the

Bill of Lading (BOL)- a written

San Beda College of Law A. D. AVILA | H. MORAŇA 17

CARRIAGE OF GOODS BY SEA ACT (C.A. Transportation to be performed by several

3. hand-carry baggage - limited to 5,000

San Beda College of Law A. D. AVILA | H. MORAŇA 20

CHAPTER 5 But the period prescribed in Art. 366 may be

Cause of action of a passenger and b) Extinctive Prescription

• If the negligence of third persons concurs B. International Carriage of Goods by Sea

San Beda College of Law A. D. AVILA | H. MORAŇA 21

Insurance Damages cannot be presumed.

A. Extent of Recovery (Art. 220, CC) 1) Loss of earning capacity

d) Temperate or Moderate Damages

f) Exemplary or Corrective Damages

San Beda College of Law A. D. AVILA | H. MORAŇA 23

CHAPTER 6 - LLR cannot be invoked in failure to

a. Negligence – the LLR applies if the Procedure for Enforcement

- Protest is required in the following cases:

Philippine Shipping Company v. Vergara (1600)

San Beda College of Law A. D. AVILA | H. MORAŇA 25

CHAPTER 7 - Vessels that are under the jurisdiction of

- Registered through MARINA

San Beda College of Law A. D. AVILA | H. MORAŇA 27

CHAPTER 8 Part Owners

San Beda College of Law A. D. AVILA | H. MORAŇA 28

San Beda College of Law A. D. AVILA | H. MORAŇA 31

CHAPTER 9 - in this case, the master of the vessel is

II. DIFFERENT KINDS OF CHARTER IV. PERSONS WHO MAY MAKE

San Beda College of Law A. D. AVILA | H. MORAŇA 32

San Beda College of Law A. D. AVILA | H. MORAŇA 35

San Beda College of Law A. D. AVILA | H. MORAŇA 36

lender and the insurer, in proportion to

Note: Read the pertinent codal provisions (594-

San Beda College of Law A. D. AVILA | H. MORAŇA 37

CHAPTER 11 lender shall also bear the loss in

I. AVERAGES IN GENERAL C. Example of Simple Averages

San Beda College of Law A. D. AVILA | H. MORAŇA 38

Compliance with legal steps

B. Examples of General Average

D. Who is entitled to Indemnity

CHAPTER 12 vessel has committed an error within

in which this vessel was then handled. The