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NOVEMBER 21, 2014 o Why?

– Philippines participated in the convention and


agreed = bound
PRIMARY LAW: CIVIL CODE o HIGH CONTRACTING PARTIES – countries that
SECONDARY LAW/SUPPLEMENTARY: CODE OF COMMERCE & participated and adhered to the warsaw convention
SPECIAL LAWS o INTERNATIONAL FLIGHT – Flight from one HCP to
another HCP
CIVIL CODE o In case of breach of contract, where do you file?
 34 provisions 1. Place of principal domicile of the carrier
 1732 – Definition of common carriers 2. Place of principal business place of the carrier
3. Place where you purchased ticket
COMMON CARRIER 4. Place of destination
 Association of persons, corporations.. offering services to the X residence of plaintiff
PUBLIC for a COMPENSATION
 There is a CONTRACT  If violated = file breach of contract of EXAMPLES OF COMMON CARRIER
carriage 1. Bus
 PARTIES: 2. Jeep
1. Shipper/consignor 3. Trains
2. Common carrier itself – person who obligates himself to
transport COMMON CARRIER PRIVATE CARRIER
3. Consignee – person who receives the gooods Offering public their service X public
Riding as a matter of right

GOVERNING LAWS ART. 1733 – EXTRAORDINARY DILIGENCE


 1766 – In all matters not covered in this code, the:  Degree of diligence of common carrier = extraordinary diligence
1. Code of Commerce
2. Special Laws ART. 1736 – 1738 – DURATION OF EXTRAORDINARY RESPONSIBILITY
 1753 – The law of the country to which the goods are delivered OF CC
shall govern the liability of the common carrier in case of LDD
1736 – Possession  delivery (actual or constructive)
 Actual delivery
SEA SHIPMENT COASTWISE  Constructive Delivery
 Governing law: 1. Notice was already given to the consignee regarding arrival of
1. Civil Code the cargoes and
2. Code of Commerce & SPL 2. The consignee was given reasonable time to release it even
 Governing if from Phil to another country  law of the COUNTRY though there is no actual release (1738)
OF DESTINATION
 GR: Law of the country of destination 1737 – Continuing liability even when they are temporarily unloaded or
o E: If parties stipulate that COGSA governs = COGSA stored in transit
 E: Right of stoppage in Transitu
governs
o Diligence required: Diligence of a good father of a family
LAND TRANSPORTATION o Why is the diligence reduced?
 NCC + CC + SPL  Because when the shopped availed of RSIT, the
transpo contract no longer exists
AIR TRANSPORATION  X acting as common carried
 DOMESTIC – NCC + CC + SPL  Acting as bailee or warehouse manager
 INTERNATIONAL
o Warsaw Convention Governs (primary law) 1734 – DEFENSES OF A COMMON CARRIER (MEMORIZE!) – instances
when CC is NOT presumed to be at fault
Michelle Duguil – PALABRICA NOTES
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1. Flood, storm, earthquake, lighting or other natural disaster or  How to determine reasonable time:
calamity 1. Character of the goods (ex.
2. Act of the public enemy in war, whether international or civil perishable)
3. Act or omission of the shipper or owner of the goods 2. Distance
4. The character of the goods or defects in the packing or in the o Any delay in the delivery will make the CC liable
container  Basis:
5. Order or act of competent public authority 1. 1740 – if there is delay, CC will be
liable despite natural disaster
1735 – PRESUMPTION OF FAULT IN CASE OF LDD UNLESS PROVED 2. 1747 – If the common carrier delays
THAT CC EXERCISED EO DILIGENCE or deviates from route  common
 Example: Plaintiff’s hand goods damaged which were loaded in the carrier cannot avail of contract
common carrier  only evidence is that he boarded CC + damage limiting carrier’s liability
 CC liable because of presumption of fault/negligence of CC o DEVIATION – MARINA has already pre-
determined route from one place to another
1734 – CALAMITY (FLEC) REQUISITES o TRANSSHIPMENT
1. Natural, must be the only and proximate cause  Cargo is transferred from one carrier to
2. Before, during and after the calamity, the CC must prevent or another
minimize LDD  GR: X allowed regardless of better
durability or state (new) of other CC or
1741 – CONTRIBUTORY NEGLIGENCE OF SHIPPER OR OWNER even if the 2 vessels are owned by the
EQUITABLY REDUCES LIABILITY
same company
 If there is CN by shipper  CC is still liable but it will be equitably
 E: Unless the transshipment is
reduced
allowed under stipulation
 Note: ONLY APPLIES TO CARGOES 3. Observe extraordinary diligence
 When do you know that there is EO?
1. It must prove that vessel is SEAWORTHY:
PUBLIC ENEMY REQUISITES
1. If the vessel is FIT, engineering is well done, very
1. During War good materials, vessel can meet the normal
2. Country of common carrier should be involved in the war
hazards of the sea
3. Pirates 2. CARGO WORTHY
4. Local or International War
 It has the ability to transport cargo
 Case: Shipper has no obligation to check the
DEFECT OR CHARACTER OF GOODS
1. Proximate cause vessel if cargo worthy
2. CC is obliged to observe EO diligence to lessen or forestall further 3. Must have all the EQUIPMENT
damage 4. Complete, capable, licensed, trained
MANPOWER
OBLIGATIONS OF COMMON CARRIER IN TRANSPO OF PASSENGERS 2. Person themselves must transport cargoes with utmost diligence
1. Accept the cargo or passengers w/o discrimination observing the care that an ordinary prudent man would observe
 EXCEPTIONS:
OBLIGATIONS OF THE SHIPPER
1.If the cargo is dangerous or hazardous
1. DUE DILIGENCE IN AVOIDING DAMAGE
2. If the cargo arrives later than time stipulated
 1741 – If the proximate cause of the LDE is because of the
2. Obligation to deliver
negligence of the CC, the CC will be liable but if there is CN of
 Where? – place where stipulated in the bill of lading
the passenger, it will be equitably reduced
 What time? o E: It will not be reduced the moment there is damage
o Time is important because late delivery will cause or injury to the passenger
monetary loss 2. PAY THE FREIGHT
o At the time stipulated
o If no time stipulated  reasonable time
Michelle Duguil – PALABRICA NOTES
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 CARRIER’S LIEN – the moment the shipper fails to pay the 7. That the common carrier is not responsible for the LDD of goods on
freight, the CC has a right or lien on the cargoes of the shipper account of defective condition of the car, vehicle, ship, airplane or
 CC has right to sell or auction the property other equipment used in the contract of carriage
o That is why it cannot be released by the shipper
because December 5, 2014
3. PAY DEMORAGE
 DEMORAGE – compensation or damages paid for detaining PRESUMPTION IN CASE OF LED THAT CC WAS NEGLIGENT/AT FAULT
the CC or vessel for a certain beyond stipulated period   1735
shouldered by the shipper
PRESUMPTION IN CASE OF PASSENGER’S DEATH OR INJURY THAT
OBLIGATIONS OF COMMON CARRIER IN TRANSPO OF PASSENGERS CC WAS NEGLIGENT/AT FAULT
1. ACCEPT PASSENGER WITHOUT DISCRIMINATION  1756
2. TRANSPORT PASSENGER SAFELY
 1755 – Mandate of the law for CC to exercise ED in Legal Issues to Address:
transporting passengers 1. Is he a passenger?
 The exercise of ED would depend on the circumstances o PASSENGER – those who have entered into a contract,
presented to you implied or express, to be transported from one place to
3. EXERCISE EXTRAORDINARY DILIGENCE another
 1733 – “safety of the passengers” o Instances:
1. Without intention to pay – X passenger
 1755 – specifically for passengers
2. Entered surreptitiously – X passenger
3. Enter who has not paid but with intention to pay –
DUTY OF PASSENGER/SHIPPER
Passenger
1. To deliver
4. If person boarded the bus in an unusual place of the
2. To pay freight
bus (ex. roof) – passenger
3. To pay other costs
5. If person boarded the wrong bus – passenger
E: if he has already been informed that he
1744 – Can you stipulate to bring down EO to less:
entered the wrong bus and he has an opportunity
 GR: YES! But it should not be lower than DOGFOA provided to leave the bus – X passenger
that it is: 6. If the person was asleep and was not able to get off
1. In Writing and signed destination and was informed and awaken that he has
2. Valuable consideration other than the services rendered missed his destination + opportunity to get off + X get off –
by common carrier X passenger
3. Reasonable, just and not contrary to law 7. Newsboy, concessionaire on train abroad – passenger
8. Driver/bus conductor – X passenger
1745 – Stipulations that are contrary to law (memorize!) – RLD –GETD o But they should still exercise ED
1. That the goods are transported at the risk of the owner or shipper o However there is no breach of contract of
2. That the common carrier will not be liable for any loss, destruction
carriage between him and his employer since
or deterioration of the goods
they are not passengers
3. That the common carrier need not observe any diligence in the
o If something happens to them  bus will be liable
custody of goods
4. That the common carrier shall exercise a degree of diligence less under workmen’s compensation law, X breach of
than that of a good father of a family or of a man of ordinary contract of carriage
prudence in the vigilance over the movables transported 2. Did the CC exercise ED in transporting the passenger?
5. That the common carrier shall not be responsible for the acts or 3. When will this ED of CC start and end?
omissions of his or its employees  Land Transportation
6. That the common carrier’s liability for acts committed by thieves or A. BUS
of robbers, who do not act with grave or irresistible threat, violence START:
or force, is dispensed with or diminished

Michelle Duguil – PALABRICA NOTES


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o From the time the bus has stopped to take in
passengers and the passenger attempted to board
the bus LIABILITY OF COMMON CARRIER
 If there was an offer and the offer was  1759 - Liable for acts of employee even if the employee has acted
accepted  there is already an implied beyond its authority or violated the orders of the CC
contract o CC cannot use a defense that the CC exercised DGFOAF
 The moment the bus stops and something in selecting and supervising his employee in a case of
has happened to the passenger, the breach of contract
common carrier is liable even if the  1763 - Liable for the acts of a stranger and co-passenger
passenger has not yet boarded the bus o Stranger - Somebody who just entered the bus and hurt
 WHY? The law wants to protect the safety of somebody there
the passenger and wants to impose an o IMPT: In order for the CC to be free from liability in cases
obligation to the bus company that when he of hold-ups and injuries cause by stranger, there must be
offers, the passenger is in a safe place  IRRESISTABLE FORCE OR THREAT  without this, CC
stop and offer your services at a safe place will be liable
(ex. don’t do it in the middle of the road o Example:
cause you will be liable)  If hold up lang na walang kwenta  CC liable
END: because they could have prevented it
o From the time the passenger has alighted from the  If hold up na may arms, etc  CC x liable
CC and has reasonably put himself in a safe place o Hypo:
o The mere fact that the passenger has already alighted  Security agent rode the bus to which he is an
the bus  it does not cut the ED responsibility of the employee to go to his office in Cubao, saw his GF
bus  the passenger should be at a reasonably safe with another man and shot them  liable under
place  only time when the CC’s ED is over 1763 (co-passenger) and not under 1759
o WHY? For the CC to stay in a place where the (employee)
passenger can alight safely (x in the middle of the
road) CASES FILED:
1. CULPA-CONTRACTUAL
B. TRAIN/LRT  Filed against: the common carrier
START:
 Breach of contract
o From the time the passenger has purchased a ticket
 Preponderance of evidence
o Even if the passenger has not boarded the train yet
2. QUASI-DELICT
o 1763 – injury caused by a stranger or fellow
 Example: Vessel was moving to the wharf loaded with
passenger
END: cargoes and when it was about to dock, it lost control and
o From the time the person has alighted the LRT unit hit the tier and destroyed the cargoes  owner of tier and
cargoes filed case against the carrier
and has gone to a safe place
o Owner of the tier can file case for – Quasi-delict
 AIR TRANSPORATION
o Owner of the cargo can file case for – Culpa-
START:
contractual
o From the time the passenger checks in and is in the
 Based on Torts
pre-departure area (submitted yourself to the custody
of the CC) 3. CULPA-CRIMINAL
o Airplane ticket purchase only – X make the CC liable  Filed against the driver
at once  CC subsidiarily liable for civil liability of the driver
END:
o From the time you alighted the plane and has gone in DAMAGES
a safe place or outside the custody of the CC 1. MORAL DAMAGES
 Anxiety, mental anguish, hurt feelings, sleepless nights

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 GR: X awarded in culpa-contractual  Example 1:
o E: 1) Death  Shipment from HK to Philippines 
2) Gross negligence Value of vessel (150M); Cargo (200M)
2. EXEMPLARY DAMAGES  Vessel sank because of negligence of
 Awarded to set an example to the public captain  Although the TOTAL LOSS of
 If there is one or more aggravating circumstance the vessel is due to the negligence of
3. NOMINAL DAMAGES the captain, the owner/ship agent will no
 To vindicate right of the person longer be liable = x recover anything
4. ACTUAL DAMAGES from the shipowner
 Life expectancy = (2/3 x 80 – age) x (income – expenses)  Reason behind law: To encourage the shipping
business from freeing ship owners from liability
because the sea transportation business is very
NEXT HW: risky
1. CODE OF COMMERCE  Example 2:
 Real and hypothecary liability of CC  Ship cargo from HK to Philippines 
 Meaning of Vessel Cargo (200M);  Cargoes totally lost,
but vessel PARTIAL LOSS only 
JANUARY 9, 2015 CARGO OWNER CAN RECOVER
because partial loss only
CODE OF COMMERCE/MARITIME LAW  Example 3:
 Partial loss of ship.
MARITIME LAW AND NCC o Can you recover for your cargo
 Complementary (1766) that was lost? YES
 X conflict with NCC o E: Is there a possibility that the
ship owner will be free from
MARITIME LAW liability? YES, IF HE
 System of law which deals with affairs, business, vessels, crew of ABANDONS THE SHIP
the sea and conveyance of property and persons because the ship will now go to
the creditors and they can
 Transportation by the sea
auction it
 Transpo by sea is usually used when it involves big shipments o In sum:
 Transportation = life blood of the economy  GR: Yes, liability
 JURSDICTION:  E: Abandoned ship
o Metro Manila – Amount is more than 400k = RTC  Example 4:
 Less than = MTC  Vessel totally lost when it reached
o Provinces – Amount involved is more than 300k = RTC Hawaii; shipments are also totally lost
 Less than = City Court Cargo owners filed case to recover
 NATURE OF MARITIME LIABILITY value of their lost cargoes
o REAL AND HYPOTHECARY IN NATURE (LIMITED o Can they recover? NO
LIABILITY RULE) o If partial loss of vessel, cargo
 Depends on the happening of something totally lost + notice of
 The owner/ ship agent of the vessel will not be abandonment? X recover
liable for the value of the cargoes that are lost if o If vessel totally lost + no
the vessel is totally lost abandonment? X recover
 In sum: o PRINCIPLE: ABANDONMENT
 NO OR TOTAL LOSS OF VESSEL = IS ONLY A CONDITION
NO LIABILITY PRECEDENT WHEN THE
 PARTIAL LOSS = LIABLE VESSEL IS TOTALLY LOST
Michelle Duguil – PALABRICA NOTES
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 EXCEPTIONS TO LIMITED LIABILITY: (CARGO  Summary:
OWNER CAN STILL RECOVER DESPITE  Maritime vessel: Protest is needed
TOTAL LOSS)  Not maritime vessel: No protest needed
1. Workmen’s Compensation
2. Injury or damage due to ship owner or to the MIDTERM EXAM:
concurring negligence of the ship owner or 1. Basic Concepts Explanation
to the concurring negligence of the ship 2. Multiple Choice
owner and the captain 3. Problem solving (Discuss all the issues)
 E: If negligence was only due to ship
captain = limited liability applies PRE-MIDTERM REVIEW
3. The vessel is insured 1. What are the governing laws?
4. Expenses for repair on vessel completed  If land Transportation
before loss – cost of repair has already been o If coast wise
made and due but not yet paid by ship owner o If Phil to somewhere…
5. In case there no total loss and the vessel is o If foreign to Philippines…
not abandonment
 If Air Transportation
6. Collision between 2 negligent vessels
o If Domestic…
Examples: o If International…
1. Workmen’s Compensation  If Water Transportation…
2. If the negligence is caused by ship agent/owner or concurrent 2. Concepts
negligence of ship agent and ship captain  Demurrage
a. Vessel from Manila to Iloilo  ship was overloaded  ship was  Extraordinary Diligence
totally lost  heirs filed breach of contract  owner shall be o If air transpo… (air worthy)
liable o Sea transpo… (sea worthy)
b. Despite knowing that there was advice of typhoon, common o Land… (road worthy)
carrier still travelled  liable o 1753
o When will it start and end? – 1738
*SHIP AGENT – Acts as the owner in the port where the ship enters
 Seaoworthy legal meaning
VESSEL  When is inspection mandatory or not?
 X cover small boats, hospital boats  Land transportation – X mandatory
 Why do we need to distinguish between maritime vessel and o E: If the danger is visible or obvious
vessel?  If X inspect = X exercise EOD = liable
o Because if we are referring to a maritime vessel, there  Air transportation – mandatory
must first be a protest filed… 3. Memorize 1734
o Case: 4. Can you reduce from EOD to Ordinary Diligence?
 The small boat went near the big vessel and the  Depends:
small vessel was sucked by the big vessel and o CARGO – YES
one of the passengers was hit by a propeller  Requirements:
 Contention of vessel: should be done within 24 1. Writing
hours therefore, cannot file claim 2. Valuable consideration
 SC: 3. Should be reasonable and fair
 No need for protest because the small o Passenger – No
boat is not a maritime boat  PASSENGER = X reduced
 Also, the person who should make the  E: 1758 – Fortuitous or non paying/ gratuitous
protest could not do it because of his passenger
situation (injured brought to hospital)
Michelle Duguil – PALABRICA NOTES
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 E to E: Willful act or gross negligence of LIMITING carrier’s liability carrier’s liability provided
the carrier LIABILITY E: Provided by law X contrary to public
o If there is contributory negligence – it may reduce only policy, law…
the liability of the common carrier, but it will not exempt CC X stipulate that it is
from liability exempt from liability for Can stipulate that it is
5. What are the stipulations that are not valid? negligence of employees exempt from liability for
6. Will the common carrier be liable for acts of co-passenger or or agents negligence of employees
stranger? – Yes or agents
 In case of stranger – irresistible force dapat so that the common
carrier will not be liable – 1763  CHARTER PARTY – A contract by which an entire ship or some
 In case of employees - Liable – 1759 principal part thereof, is let by the owner to another person for a
7. When will he become a passenger? End? specified time or use  transforms CC to PC
 Land transpo…  REGISTERED OWNER RULE
 Air transpo… o GR: Registered owner of the vehicle is liable for any damage
 Sea transpo… caused by the negligent operation of the vehicle although the
same was already sold or conveyed to another at the time of
EXTRA NOTES the incident
 E: Vehicle stolen from a garage without the owner’s
 PASSENGER – One who travels in a public conveyance by virtue of a knowledge and consent
contract, express or implied, with the carrier as to the payment of fare or  PRIMARY OBLIGATIONS OF A COMMON CARRIER IN THE
that which is accepted as an equivalent thereof CARRIAGE OF GOODS (PASTE)
 PARTIES TO CARRIAGE OF PASSENGERS 1. Duty to deliver the goods to the proper PERSON
2. Duty to ACCEPT the goods
1. Common Carrier
3. Duty to SEASONABLY deliver the goods to the destination
2. Passenger
4. Duty to TRANSPORT the goods safely at the agreed destination
 PARTIES TO CARRIAGE OF GOODS
5. Duty to exercise EXTRAORDINARY diligence
1. Shipper  EFFECTS OF INEXCUSABLE DELAY:
2. Carrier
1. Carrier still has duty to exercise EOD
3. Consignee
2. Natural disaster X free carrier from responsibility
 PERFECTION OF CONTRACT OF TRANSPORTATION 3. Delay is without just cause = CC X limit its liability for LDD
1. Contract to Carry – perfected by mere consent 4. Liable for damages caused by delay
2. Contract of Carriage or of Common Carrier – real contract 5. Consignee may exercise his right to abandon
because facilities have to be used before contract is perfected  DUTY TO ACCEPT GOODS:
 PRIVATE CARRIER – One which, without being engaged in the o GR: CC duty bound to accept passengers and cargo without
business of carrying as a public employment, undertakes to deliver discrimination (DDUO-CITES)
goods or passenger for compensation (single transaction)  E:
1. Goods are DANGEROUS
COMMON CARRIER PRIVATE CARRIER 2. Goods will be exposed to untoward DANGER
GOVERNING LAW Law on Common Carrier Oblicon such as flood, capture by enemies
STATE Yes X 3. Goods are UNFIT for transportation
REGULATION 4. Acceptance would result to OVERLOADING
AVAILABILITY People indiscriminately Particular individuals or 5. Goods = CONTRABANDS or illegal
groups only 6. INJURIOUS to health
DILEGENCE EOD Ordinary Diligence 7. Failure to tender goods on TIME
PRESUMPTION OF Yes No 8. Goods like livestock will be EXPOSED to
NEGLIGENCE diseases
EXEMPTING Prove EOD and Art 1734 Caso Fortuito under 9. STRIKE
CIRCUMSTANCES 1174  DURATION OF LIABILITY – 1736, 1738, 1737
STIPULATION GR: X agree on limiting Parties may limit
Michelle Duguil – PALABRICA NOTES
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 REQUISITES OF FORCE MAJEURE: (PDD) loss but failed to do so, is chargeable with the loss  only available
1. Natural disaster must be the PROXIMATE AND ONLY CAUSE of between 2 colliding vehicles because it is an action based on tort or
the loss quasi-delict
2. Common carrier excised DUE DILIGENCE to prevent or minimize  OBLIGATIONS OF SHIPPER OR CONSIGNEE AND PASSENGER
the loss before, during or after occurrence of the disaster 1. Due diligence to avoid damage or injury
3. CC has not negligently incurred DELAY in transporting 2. Bound to pay the consideration in the form of freight or fare
 REQUISITES OF ACT OF PUBLIC ENEMY (PDW)  MEANING OF EXTRAORDINARY DILEGENCE
1. PROXIMATE AND ONLY CAUSE of the loss o IN CARRIAGE OF GOODS – The EOD in the vigilance over
2. Common carrier excised DUE DILIGENCE to prevent or minimize the goods tendered for shipment requires the common carrier
the loss before, during or after occurrence of the disaster to know and to follow the required precaution for avoiding
3. Existence of actual state of WAR damage to or destruction of the goods entrusted to it for sale,
** includes PIRACY carriage and delivery. It requires the common carrier to render
 NEGLIGENCE OF SHIP OWNER service with the greatest skill and foresight and to use all
1. When it is the SOLE AND PROXIMAYTE cause = absolute defense reasonable means to ascertain the nature and characteristics
2. When it is CONTRIBUTORY = partial defense of the goods tendered for shipment and to exercise due care in
 BAGGAGE the handling and stowage, including such methods as their
o Hand carried = Ordinary diligence nature requires
o Checked –in = EOD o IN CARRIAGE OF PASSENGERS – A CC is bound to carry
 PRIMARY OBLIGATIONS OF A COMMON CARRIER IN THE passengers safely as far as human care and foresight can
CARRIAGE OF PASSENGERS (U-STAB) provide, using the utmost diligence of a very cautious person
1. Duty to observe UTMOST diligence to passenger with due regard for all circumstances
2. Duty to SEASONABLY bring the passenger to designation  STIPULATION LIMITING/REDUCING CC’S LIABILITY
3. Duty to TRANSPORT the passenger safely to the agreed
destination GOODS PASSENGERS
4. Duty to ACCEPT passengers without discrimination Allowed less than EOD provided X lessened or dispensed with
5. Duty to take care of the passenger’s BAGGAGE WSVR through stipulations or posting
 DILIGENCE IN THE SELECTION OF AND SUPERVISION OF notices
EMPLOYEE
o GR: Based on contractual obligation = X exempt from liability o GRATUTIOUS PASSENGERS - limit liability but not for willful
 E: Based on quasi-delict = available as defense acts or gross negligence
o ACCOMODATION PASSENGERS – only Ordinary Diligence
LIABILITY OF COMMON CARRIER FOR DEATH OR INJURIES TO required
PASSENGERS CAUSED BY:  STIPULATION LIMITING/REDUCING CC’S LIABILITY
ACTS OF EMPLOYEES ACTS OF STRANGERS  SEAWORTHINESS: (RASEM)
OR PASSENGER 1. Fitness of the vessel itself to withstand the rigors of the voyage
DILEGENCE EOD Ordinary Diligence 2. Fitness of the vessel to store the cargoes and accommodate
REQUIRED passengers to be transported
NATURE OF TORT (QUASI-DELICT) GR: X liable 3. Vessel is adequately equipped and properly manned with
LIABILITY E: If common carrier’s sufficient number of competent officers and crew
However, employee must employee could have  CARGOWORTHINESS
be on duty at the time of prevented or stopped the 1. The ship must be sufficiently strong and equipped to carry the
the act act or omission through particular kind of cargo which she has contracted to carry and
DGOAF 2. Her cargo must be so loaded that it is safe for her to proceed on
voyage
 DOCTRINE OF LAST CLEAR CHANCE – Where both parties are  TRANSSHIPMENT
negligent but the negligent act of one is appreciably later than that of the o The act taking cargo out of one ship and loading it in another
other, or where it is impossible to determine whose fault or negligence or the transfer for further transportation from one ship or
caused the loss, the one who had the last clear opportunity to avoid the conveyance to another
Michelle Duguil – PALABRICA NOTES
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 EOD IN CARRIAGE BY LAND- (CT) 1. Workmen’s compensation
1. Condition of vehicle – not defective, good order and condition 2. X total loss and X abandoned
2. X breach of traffic rules 3. Injury or damage due to ship owner or to the
 AIRWORTHINESS (REC) concurring negligence of shipowner and
1. The aircraft must be in such condition that it must be able to captain
withstand the rigors of flight 4. Vessel is insured
2. The aircraft, its engines, propellers and other components and 5. Expenses for repair and provisioning of the
accessories are of proper design and construction and are safe for ship
air navigation purposes, such design and construction being o Ship owner is the party who may invoke the limited liability
consistent with accepted engineering practice and in accordance rule
with aerodynamics laws and aircraft science (EQUIPMENT) o Cases where applicable:
3. Vessel has a competent captain and crew who exercised EOD in 1. Civil liability for indemnities to 3rd persons
operating the aircraft 2. Indemnities for negligent act of the captain
 BILL OF LADING – A written acknowledgement of the receipt of goods 3. Collision
and an agreement to transport and to deliver them at a specified place 4. Liability for unpaid wages of captain and crew and for
to a person named or on his order advances made by the ship agent if the vessel is lost
 MARITIME COMMERCE by shipwreck
o 573 – 869 of CODE OF COMMERCE
o That system of laws which particularly relates to the affairs
and business of the sea, to ships, their crews and
navigation and to maritime conveyance of persons and
property
 CHARACTERISTICS OF MARITIME TRANSACTION
1. REAL – real contract, registration required
2. HYPOTHECARY – the liability of the carrier in connection with
losses related to maritime contracts is confined to the vessel, which
stands as the guaranty for their settlement
 MERCHANT VESSEL – engaged in maritime commerce, whether
foreign or otherwise
 VESSEL – Any barge, lighter, bulk, carrier, passenger ship, freighter,
tanker, container, ship, fishing boats or other artificial contrivances
utilizing any source of motive power, designed, used or capable of being
used as a means of water transportation operating either as a common
carrier, including fishing vessels covered under PD 43
o E:
1. Those owned or operated by the AFP and by foreign
government for military purpose
2. Bancas, sailboats and other waterborne contrivances
less than 3 gross tons capacity and not motorized
 MARITIME LIEN – constitutes a present right of property in the ship, a
jus in re, to be afterward enforced in admiralty by process in rem
 DOCTRINE OF LIMITED LIABILITY (HYPOTHECARY RULE)
o The exclusively real and hypothecary nature of maritime law
operates to limit the liability of the shipowner to the value
of the vessel, earned freightage and proceeds of the
insurance, if any.
o GR: No vessel, no liability (Total loss)
 E: (WORK-AIIR)
Michelle Duguil – PALABRICA NOTES
9
Special Contracts under Maritime Commerce

What is a CHARTER PARTY?


 It is a document in itself and it does not refer to a party in a
controversy.
 Simply put, it is in the nature of a contract of lease, having for its
object the whole or part of a vessel.

DEFINITION OF TERMS:
1. The lay days – the number of days given to unload/load (this is
free)
2. The extra lay days – an extension (it is not for free).
3. Demurrage – the penalty or fee for the excess time spent in
unloading and loading.
4. Primage – compensation or fee given to the captain or crew which
is due to the special care of captain and crew
5. Embargo – legal restriction of departure of vessels
6. Contract of towage – contract for a barge to be towed by a ship

What are the REQUISITES of a Charter party?


1. The Charter Party must be in writing, signed, and with the consent
of the parties
2. Existence of the vessel at the disposal of the charterer
January 30,2015 (From Mikee) 3. Stipulation as to the freightage
4. It must comply with the appropriate formalities:
MT essay answers: a. Must specify the kind, name, tonnage, flag raised, port,
1. A stipulation transferring the risk to the shipper is not valid. Would registry, the names, surnames, & domiciles of the ship
limited liability rule apply if the ship were lost due to the negligence captain, ship agent, and ship owner, capacity, dates of
of the ship captain? Yes. There are only 4 exceptions to the limited loading and unloading, the lay days, extra lay days,
liability rule. One is the concurrent negligence of the ship captain demurrage, primage
together with the ship owner. So that if the loss was due to the fault
of the ship captain only, then the limited liability rule will still apply. Must the Charter Party always be in writing and signed to be valid?
2. Robert is already a passenger since he was in the premises and  GR: Yes, according to Art. 652.
under the control of the common carrier. Extraordinary diligence is o E: Art. 653 provides that when cargo is already delivered
now required of the common carrier. Art. 1762 provides for the
or received without the Charter Party being signed, the
liability of the common carrier for acts of passengers or strangers.
stipulation should be interpreted to be that contained in a
There is a presumption that a common carrier is always liable
bill of lading.
unless proven otherwise under Art. 1735.
3. Right of inspection is mandatory in airplanes because of the anti-
Q: The parties agreed to deliver cargo from point A to point B. The
hijacking law but it is not mandatory in busses or other land
Charter Party stipulated that there will be a demurrage. But when the
transportation unless there is something suspicious which is
cargo loaded and the vessel was in voyage, there was a deviation to
obvious to the naked eye
point C, with a bill of lading to that effect. Shall there be a payment of
4. Betty the accountant while on her way to work is a passenger and
demurrage?
the common carrier is liable for her death because a common
 NO!
carrier is always presumed liable. On the other hand, the driver is
not a passenger since there is no contract of carriage. However, he  The SC held: since the goods were received although the Charter
may claim compensation from other sources of law Party was not signed it is still valid, but the provision in the bill of
lading will apply. Since the bill of lading did not contain a stipulation
as to demurrage, then there is no demurrage

Michelle Duguil – PALABRICA NOTES


10
What are the 2 KINDS of Charter Party?  Yes, if under special circumstances such as for necessity, provision,
1. DEMISE or BAREBOAT food, and repair of the vessel, the captain can sell  but must pay
 the vessel is chartered in itself as a whole (hence, “bare”) and need the owner:
not provide that the crew is included because of the principle that o If preserving the cargo is more expensive than the value
the control of the crew is given to charterer, along with the cargo itself
navigation etc. o If the consignee cannot be found and there is refusal to
 He is deemed the OWNER of the vessel and the EMPLOYER of sell or release the cargo.
the crew.
 Q: A was part of the crew of a vessel. After 3 months, the Instances where the cargo made liable for freight, duties, taxes, duties,
vessel was chartered. A was terminated by the charter. A is other expenses advanced and ought to be reimbursed by the shipper:
now claiming that he was terminated unlawfully. Against who  Cargo is NOT liable to pay freight in the event of:
do you file the case? o A shipwreck or the stranding or the loss of the vessel
 The charterer. He has now the burden to prove that it is not a  E: unless the vessel is ultimately repaired and
bareboat charter party. (SC Case) brought to its destination, in which case the cargo
 PRESUMPTION OF BAREBOAT:in case of doubt, the charter party salvaged during shipwreck, will be liable in
is always presumed to be a BAREBOAT charter party, and not proportion to the distance travelled
affreightment. o In case of confiscation because of piracy;

What is the difference between the 2?  A charterer is deemed the owner of the vessel as a whole and should
not accept cargo more than it can handle.
BAREBOAT AFFREIGHTMENT
Charter of whole vessel Charter of part of the vessel  Owner must respect the capacity of the vessel.  Owner once he
Converted to private carrier X converted notices that cargoes were clandestinely loaded, he may remove it.
 If not dangerous, he can still opt to deliver but at a higher freight.

What is the significance of the conversion?  In case of expiration of lay days, the cargo is not yet ready for loading,
 There could be a stipulation limiting liability in case of negligence of then the vessel can leave without them
the ship owner and it will be valid in the case of bareboat but not in
affreightment. 2. AFFREIGHTMENT
2 kinds:
Can a ship captain enter into a charter party over the vessel of the ship 1. Time period
owner? 2. Voyage
 Yes, a ship captain who entered into a charter party even against
will of the owner who will be civilly liable for damages to the owner. Grounds for rescission and at whose instance
 Still, the contract is VALID. ????
___________________________________________________________
If the vessel is no longer seaworthy, the captain shall:
1. Look for another vessel within the parameter of 150KM for the What are the loans on BOTTOMRY & RESPONDENTIA?
purpose of transferring the cargo and continue with the voyage.   These are SPECIAL kinds of loans involving vessel (bottomry) and
If he is indolent in searching for another vessel then he is liable for cargo (respondentia).
whatever damages that may occur.  The cargo owners will now  Because the vessel and consequently its cargo is left at the mercy
have the right to look for another vessel at the expense of the of the sea these objects are made collaterals.
captain or the ship owner  That is why the parties can stipulate a higher interest since it is not
2. If he cannot find another vessel, he may deposit the vessel which is covered by the usury law unlike in simple loan.
not seaworthy  There can never be oral but only written form in a public document
(notarized).
Can the captain sell cargo?
LOAN ON BOTTOMRY LOAN ON
Michelle Duguil – PALABRICA NOTES
11
RESPONDENTIA
DEFINITION Loan made by the Loan taken on security of If it is not stated specifically that the voyage is from point A to point B
shipowner or ship agent the cargo laden on vessel or one way
guaranteed by vessel and repayable upon safe  The presumption is that it is two way (round trip).
itself and repayable arrival of cargo at  In order to limit coverage, it must be specifically stated to be one
upon arrival of vessel at destination way  So that the borrower is not obligated to pay the loan if it is
destination not stated

Note: No LOB may be When is the obligation extinguished if the collateral is lost
made in any case on the  There must always be the existence of a maritime peril
salaries of the crew, nor
the profits which may be GR: Presumed that LOR or LOB covers roundtrip
expected  E: When it is expressly stipulated that a particular trip is covered by
WHO MAY Shipowner or ship agent Only the owner of the loan
CONTRACT cargo
Outside the residence of GR: When a vessel or cargo is lost, then the LOR or LOB is extinguished.
the owners – the captain The borrower will no longer pay the lender because the subject matter is lost
COMMON 1. Exposure of security to marine peril  E:
ELEMENTS 2. Obligation of the debtor conditions only upon
1. If the loss is caused by inherent defects of the cargo
safe arrival of the security at the point of
2. Fault of the borrower himself
destination
3. Barratry or malice on the part of the captain of the vessel
FORMS 1. Public instrument
4. If the damage was caused because the borrower was
2. Policy signed by contracting parties and the
engaging in contraband goods
broker taking part therein
5. If the goods loaded were different from that designated in the
3. Private instrument
contract
What is the difference between simple loan and these loans? Ex. Cargo worth 1M, loan on respondentia is 500k, the GA is 100k. How
- In bottomry the collateral is the vessel and if it is lost the obligation to pay is much should the lender pay?
extinguished. In respondentia the collateral is the cargo. If collateral is lost in
 ½
a simple loan, the principal will still exist.
 Pay 50k
BOTTOMRY/ RESPONDENTIA SIMPLE LOAN
Collateral = vessel (bottomry) If collateral is lost = Ex. In case of shipwreck and the vessel is stranded but some of the goods
principal will still exist were salvaged or recovered, there is salvaging expenses in doing the same.
If lost = obligation to pay is What is the basis of determining the payment of the borrower?
extinguished  X original value of the loan
Collateral = cargo  Formula: Value of the goods – expenses for salvaging
(respondentia)
Ex. Cargo is worth 1M, salvaged cargo is worth 500k, salvaging expenses of
If lost = obligation still exists 100k.
MARINE RISK Marine risk is necessary X necessary  400k = basis of loan
FORM AND Form and manner prescribed by Formal requisites of  500k – 100k = 400k
MANNER the code of commerce ordinary contract
REGISTRY OF Must be recorded in the registry X need WHERE THE GOODS OR VESSEL IS COVERED BY INSURANCE
VESSELS of vessels to be binding to third  GR: If it is 100% covered by loan, it cannot be covered by
persons insurance because there is no more insurable interest on the part of
PREFERENC Last lender First lender the owner
E o E: Insurance and LOB/LOR may co-exist but there should
be a determination of insurable interest
Michelle Duguil – PALABRICA NOTES
12
o Ex. How to determine? – if the value of the goods or last loan saved the vessel. Last loan has preference over the
vessel is 1M and subject to LOB/LOR for 700k.  earlier loans.
insurable interest of insurance company is  1M – 700k =  Rule 3: If several loans were taken in the same port, then they
300k have to be paid proportionately
 Is the insurance company also liable in case of damage?  Example: For instance, in several loans on bottomry were
o YES! Because it has interest in the subject matter contracted. Before the voyage, a loan in Manila for 20,000 was
 Once insurance and loan co-exist, both shall be liable for damages contracted. During the voyage, a loan in Iloilo was contracted. Due
in proportion to their interest to the necessity of major repairs, a loan was contracted in Cebu for
 100,000. Upon arrival in the place of destination in Cagayan de
INSURANCE LOB/LOR Oro, it was discovered that the vessel was no longer seaworthy.
The vessel was then sold for 110,000. The creditors are now asking
In case of loss, may be paid at There should be the
for them to be paid.
any time in all events even presence of marine risk;
o Manila – loan for 20,000 before voyage
without marine risk in case of loss, loan is
extinguished o Iloilo – loan for 10,000 during the voyage
INDEMNITY Indemnity is paid AFTER loss Paid in advance by way o Cebu – loan due to need of major repairs for 100,000
has occurred of a loan o CDO – discovered that vessel is no longer seaworthy, so it
EFFECTS In case of loss of the vessel due In case of loss of the was sold for 110,000.
OF LOSS to a risk insured against, the vessel due to marine What is the order of preference?
OF VESSEL obligation of the insurer peril, the obligation to  The loan contracted in Iloilo has preference over loan in
becomes absolute pay is extinguished Manila because it was contracted during the voyage
KIND OF Consensual Real  The loan contracted in Cebu was latest, them it has
CONTRACT preference over the loan in Iloilo. So 100,000 will be paid
to the creditor in Cebu. The remaining 10,000 will be paid
Q: Before the vessel reached its destination in Iloilo, the vessel sunk. to the creditor in Iloilo
 There is no more obligation to pay if it is a loan on bottomry. Assuming that in the same port in Cebu, there were 3 loans
 If respondentia, obligation still exists. were contracted with 3 different creditors, what is the order of
 If the cargo was saved, then the borrower will pay lesser expenses. preference?
 It must be paid proportionately to the amount of the loan.
 Vice-versa: If the cargo was lost and vessel was saved, the
obligation of the borrower to pay in respondentia is extinguished (if
bottomry, it still exists)  The rule that when the collateral is lost, the obligation of the borrower
to pay is extinguished only applies to risks due to MARINE PERILS
WHEN LOAN ON BOTTOMRY OR RESPONDENTIA IS REGARDED AS not NATURAL DEFECT, MALICE, NEGLIGENCE, BARRATRY, then
SIMPLE LOAN the obligation still subsists.
1. Lender loaned an amount larger than the value of the object due to
fraudulent means employed by the borrower  What is the effect if thru fraud the borrower was able to get a loan
2. Full amount of the loan is not used for the cargo or given on the more than the value of the vessel is loan on bottomry considered
goods if all of them could not have been loaded, the balance will be valid? For instance, the vessel is worth 50M. but because of fraud,
considered a simple loan you were able to get a loan for 70M. how will we treat the loan?
3. If the effects on which the money is taken is no subjected to any
risk o The loan on bottomry will be valid up to the extent
of 50. The remaining 20M will be treated as a
Order of preference (if there are many creditors) simple loan
 Rule 1: Contracts or loans during voyage have preference over
loans contracted before the clearing of the port for voyage  (Bar question) Does the ship captain have a right to enter into a
 Rule 2: The order of preference shall be in the inverted order based loan on bottomry?
on the dates. Because if it were not for the latest loan, the vessel o Yes, provided that the ship captain is within the residence of
would have sunk and will be liable.  There is presumption that the the ship agent or the ship owner and that he is authorized to do
so.
Michelle Duguil – PALABRICA NOTES
13
o Residence here does mean its literal sense (place of abode) interest in the vessel and
but may be interpreted to mean the office of the ship owner. the cargo should contribute
to satisfy the average
 What if ship captain is outside the residence of the ship owner or 2. Particular/ Simple
ship agent? Average – borne by
o Yes he can still can enter into a loan of bottomry: respective owners
1. if it is connected to his inherent duty in a contract for Petty expense which must be
voyage, such as in the case of the provision of the vessel, shouldered by the ship owner
for repair of the vessel, OR Examples:
2. if the ship captain is a co-owner, in which case the loan will 1. Pilotage (pilot fees)
be valid up to the extent of his co-ownership. 2. Anchorage – terminal fee,
etc.
 Can the ship captain enter into a loan on respondentia? 3. Lighterage fee – small
 No, because he is NOT a representative or agent of the owner of barge where cargoes are
the cargo, unlike in loan on bottomry wherein the ship the agent of unloaded and the
the owner of the vessel lighterage brings the
cargoes to the port
4. Quarantine Fee
February 6, 2015 5. Health and Sanitation Fee
AVERAGE AND COLLISION 6. Inspection Fee

AVERAGE
 Technical maritime term Particular Average General Average
 Simple meaning  Expense or damage which does  Expense or damage deliberately
o Extraordinary or accidental expense not inure to the common interest done to save the V/C/Both
o Damage or injury  Particular only to the person  Inures to the common benefit of
who owns the thing the ship owner and cargo owner
 Should be distinguished from a simple damage and expense so
that we will be able to know who will bear the damage/expense
 Only the particular person (ship  Borne by all persons having an
 Art 806
owner/ cargo owner) who interest in the vessel and the
o It is an extraordinary or accidental expense incurred during
caused the expense or suffered cargo therein at the time of
the voyage for the preservation of the cargo, the vessel or the damage shall bear the occurrence of the average shall
both expense contribute to satisfy the
o Any damage or deteriorations which the vessel may suffer
 X reimbursement average
from the time the vessel starts its voyage until the time it  Reimbursement
reaches its point of destination or damage/deterioration
Example (808):
suffered by the cargo from the time it is loaded on the vessel
1. Inherent defect of cargo
until the time it is unloaded in the port of consignment
 Ex.: Guimaras mangoes
exported to HK (owner
knows that lifespan of
ORDINARY AND NECESSARY AVERAGE mango 5 days) + voyage
EXPENSE for 10 days = mangoes
deteriorated
Art 807 Art 806
2. Force majeure
To determine who bears the loss
3. Damage to the haul, vessel,
Loss/ injury is borne by the ship Depends on what type of average is
equipment
owner involved:
4. Wages, victuals of the crew of
1. General Average – borne
the vessel
by all persons having
Michelle Duguil – PALABRICA NOTES
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 If fixed voyage = Some of the cargoes were salvaged/saved. Are owners of the
particular average cargoes that were saved liable to pay the owner of the cargoes
 If monthly basis = that were earlier sacrificed or jettisoned (50M)?
general average o Sacrifice was successful that is why the vessel was able
Example: to continue its voyage and the cause of the loss of the
 Ship owned by Germany cargoes and sinking of the vessel was due to other
agricultural machinery owned by reasons, not the original one. The cargoes that were
America to be delivered to subsequently lost were salvaged
Russia  War between Russia o Owner of the salvaged cargo should pay to the owner of the
and Germany  If vessel cargoes jettisoned: Salvage value – expenses for
continues voyage to Germany, salvage
vessel will be captured  4. Proper Judicial Formalities (MEMORIZE)
vessel went to Philippines 1. Procedure for recovery
instead. Who will pay for the 2. Assembly and deliberation
salary of the crew? o Captain will assemble the people who have interest and then
o Particular Average – deliberation
Ship owner will pay 3. Resolution of the captain
o The reason for 4. Entry of the resolution in the logbook
o Those who voted for and against it must be recorded
deviating is not
because the machinery o Majority rule prevails
is a contraband, but to o BUT the captain has the last say even if it is against the
save the ship because decision of the majority and such decision should be
of war between Russia recorded in the logbook
and Germany 5. Detailed minutes
6. Delivery of the minutes to the maritime judicial authority of the
REQUISITES OF GENERAL AVERAGE (MEMORIZE) first port, within 24 hours from arrival
1. Common danger or risk 7. Ratification by the captain under oath
 Clear, certain and imminent
JETTISON
 Ex.: Captain was sailing vessel and then the daughter told the
 Act of throwing cargo overboard in order to lighten the vessel
captain that she dreamt that a storm was coming and that he
should throw away some stuff in the vessel. Is this a valid  Under the control of the captain
general average?  X res nullius; X object of occupation
 NO! Risk is based on speculation; not imminent or  Cargoes must be covered by the bill of lading so that it can be
certain. proved
2. Deliberate Sacrifice  Order of goods to be cast overboard:
 Purpose is to save the vessel and cargo 1. Those on deck first – heaviest one with the least utility and
 Ex.: Logs were moving from left to right on the vessel because value
of a storm. Because of the movement, the logs fell  boat 2. Those on the lower deck second - heaviest one with the least
stabilized and the rest of the cargoes saved.  Owner of the utility and value
logs claimed that he should be paid by the ship captain
because it is a general average. Correct? Goods not covered by General Average even if sacrificed
o NO! Although it saved the rest of the cargoes, jettison 1. Goods carried on deck
was not deliberate. It was inevitable to happen 2. Goods not recorded in the books or records of the vessel
because of the storm. 3. Fuel for the vessel if there is more than sufficient fuel for the voyage
3. Sacrifice must be successful
 Supposing the cargo was jettisoned and it saved the rest of the  GR: Average should happen during the course of the voyage (?)
cargo and vessel itself. Amount of cargo jettisoned (50M).  Then o E:
vessel continued to its journey and vessel and cargoes were lost.
Michelle Duguil – PALABRICA NOTES
15
1. In the course of a storm, the cargoes are transferred to considered at fault
barges to lighten the vessel  Vessel – Each will bear their own loss
2. Vessels are already anchored in the pier and there was a fire  Cargo – solidary liability
on one of the vessels. They intentionally sinked the Force Majeure  Vessel – Each will bear their own loss
vessels beside the vessel on fire to save the other vessels
 Cargo – Each will bear their own loss
anchored. = GENERAL AVERAGE even if X on voyage.
The other vessels saved should contribute. If due to act of third  Third person will be liable
person

WHO ARE THE PEOPLE WHO ARE LIABLE TO CONTRIBUTE TO THE ZONES OF TIME IN THE COLLISION OF VESSELS
GENERAL AVERAGE? 1. Zone 1 – All the time up to the moment when the risk of collision begins
 Ship owner 2. Zone 2 – Risk of collision begins until risk is certain
o One who committed error is liable
 Cargo owners in proportion to their interest
3. Zone 3 – Risk is certain until collision happens
 Lenders on bottomry and respondentia
o If there is collision in the 3rd zone, the one who caused the
 Insurance company privileged vessel to cause the error or swerving is liable
(ERROR IN EXTREMIS)
COLLISION (Art 826 of Code of Commerce)
 Contract of 2 moving vessels or one moving, the other is stationary LIMITED LIABILITY RULE
 If one is moving and the other is stationary = allision  Also applies in collision
 Example:
RULES IN CASE OF COLLISION o A collided with B. Fault of A. Who will be liable?
Who at fault Who is liable  Based on rule on collision:
If one vessel if at Vessel at fault is liable for damages
 A is liable
fault
 If limited liability rule is applied:
Both are at fault  Vessel – Each will bear their own loss
 B was partially damaged but A that
 Cargo – solidary liability (one solidary debtor
is at fault sank and totally damaged
can pay for the whole obligation subject to
 A is not liable and need not pay
reimbursement from the other solidary debtors)
because liability is extinguished
 Example:
because the vessel was totally lost
o Vessel A = 2M (damage)
o Vessel B = 2M PROTEST
o Cargo:  There must be protest within 24 hours otherwise the action will not
X – 3M (damage) prosper
Y – 2M  The following instances need protest before the aggrieved may file
W – 15M
a case:
Z – 20M
1. Collision
If it cannot be DOCTRINE OF INSCRUTABLE FAULT
2. Arrival in distress
determined who is  Vessel – Each will bear their own loss 3. Shipwreck
liable  Cargo – solidary liability 4. Hurricane
Proximate Cause  X APPLY IN MARITIME LAW = both  Exceptions to protest:
and Contributory considered at fault 1. If the owner of the cargo is not on board the ship at the time of
Cause  Vessel – Each will bear their own loss collision
 Cargo – solidary liability 2. If the person is not capable of expressing his wishes because
 Example: of the injury that he sustained
o A = Proximate cause 3. If the other vessel is not a maritime vessel
o B = Contributory cause Feb 20, 2015
Last Clear Chance  X APPLY IN MARITIME LAW = both
Michelle Duguil – PALABRICA NOTES
16
ARRIVAL UNDER STRESS
 The vessel will anchor in the nearest and most convenient port EXPENSES FOR UNLOADING CARGO
because of well founded fear of seizure, privateer, piracy, accident  If for repair of the vessel = shouldered by the shipowner
which will disable to common carrier to navigate  If for saving the cargo = cargo owner
 Well founded fear – should not be based on speculation; there  If for both vessel and cargo = proportional
must be a thorough deliberation and such should give you a
reasonable conclusion that indeed there is a well founded fear AFTER CARGO IS UNLOADED
 GR: ????
WHEN LAWFUL WHEN UNLAWFUL o E: If caused by force majeure
When the inability to continue is due The inability to continue voyage is
to: due to:  If there is imminent danger of was already damaged, the captain
1. Lack of provisions 1. Lack of provisions due to has to apply in the proper judicial authority for the sale of the cargo.
2. Well founded fear of negligence to carry In order to effect the sale, captain must comply with certain
seizure, privateers, pirates according to usage and formalities such as publishing, acquiring consent from persons who
3. Accidents of the sea customs have interests over the cargoes
disabling it to navigate 2. Risk of enemy not well
known or manifest If the reasons/causes for arrival under stress are gone, he must assemble
3. Defect of vessel due to again his men and decide that the reason no longer exists and then proceed
improper repair again with the voyage (Legal advice!)
4. Malice, negligence, lack of
foresight or skill of captain SHIPWRECK
 Injuries or loss suffered by the vessel because of the swallowing by
the waves, or grounding or stranding or running against an object in
ADVANTAGE OF NOTICE THAT IT IS VALID AUS
the sea rendering the vessel incapable to navigate
 The CC will not be liable for damages
 But the cost and expenses caused by AUS will always be borne by SHIPWRECK AUS
the ship owner or CC Vessel is completely incapable of Vessel can still move because it can
moving still go to the nearest port
LEGAL STEPS Swallowing by the waves, or Grounds: well founded fear of
1. Captain should determine during the voyage that there is a well founded grounding or stranding or running seizure, privateer, piracy, accident
fear of seizure, privateers and other valid grounds against an object in the sea which will disable to common carrier
2. Captain shall assemble the officers and summon the persons interested rendering the vessel incapable to to navigate
in the cargo who may attend the meeting but without right to vote navigate
3. The offices shall determine and agree if there is a well-founded reason
after examining the circumstances Shouldered individually by the ship Shouldered by the ship owner/CC
owner and cargo owner
GR: CC X liable for damages
 E: Malice, lack of foresight
E: X VALID ARRIVAL UNDER STRESS (OPENS CASE FOR DAMAGES
and skill by the captain 
AGAINST CC)
CC will shoulder the
1. If the AUS is unlawful
expenses
 Example: If the ship does not have enough food or was not
properly kept  Gutom members  Went to Cebu to get WHY? – Grounds is caused by FM
more food  X valid AUS
2. Risk of enemy not well known or manifest SALVAGE
 Example: No well founded fear of pirates  Saving a vessel
3. Defect of vessel due to improper repair
 Service one person renders to the owner of a goods or ship, by him
 Because vessel must be seaworthy
own labor, preserving the goods or the ship which the owner or
4. Malice, negligence, lack of foresight or skill of captain

Michelle Duguil – PALABRICA NOTES


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those entrusted with care of them have either abandoned in OBJECTS OF SALVAGE
distress at sea or are unable to protect or secure 1. Ship
 Compensation allowed to persons by whose voluntary assistance a 2. Jetsam – goods which were thrown off a ship which was in danger
ship at sea or her cargo or both have been saved in whole or in part 3. Floatsam – goods which float upon the sea when cast overboard
from impending sea peril or such property recovered from actual 4. Ligan/Lagan – goods cast into the sea tied to a buoy, so that they
peril or loss, as in cases of shipwreck, derelict of recapture may be found again by the owners

BARRIOS VS GOTHONG CASE REQUISITES


 X salvage because no marine peril (weather was good) 1. Valid object of salvage
 Act of towing only, not act of salvage 2. Marine peril
3. Service voluntary
 QUASI-DERELICT -
 Example: Vessel was in danger  crew saved the ship  X
CIRCUMSTANCES WHEN TOWING CAN BE AN ACT OF SALVAGE voluntary because crew is under obligation to save ship
4. Successful, total or partial
 When the towing happens during very bad weather
WHEN SHOULD INTENTION SHOULD BE RECKONED
 Intention of abandonment starts from the time the captain and crew
TOWING SALVAGE
left the ship  Salvaged by others  Change of mind will not change
Towing fee – will go to the owner of Salvage reward – distributed among
the state of the vessel
the togboat owner owner of the vessel (50%), captain
(25%) and crew (25% in proportion  If no intention to abandon and goes back to the vessel after getting
to their salaries the necessary equipment  X valid salvage by others

WHEN CAN A VESSEL OR CARGO BE CONSIDERED AS AN OBJECT OBLIGATION OF COLLECTOR OF CUSTOM


OF SALVAGE?  Safeguard and inventory of goods
 When the vessel or cargo is considered a DERELICT  Subject the goods to public auction if the conservation is prejudicial
 DERELICT – when the vessel or cargo is already abandoned; a to the owner and when no objection was made
ship or her cargo which is abandoned and deserted at sea by those  If no claim within 3 months:
who are in charge of it without any hope of recovering it or without o Sold
any intention of returning to it o Proceeds go to owner
 QUASI- DERELICT – if the cargo or vessel is although not  If 3 years no claimant:
abandoned is left at the mercy of the waves and the persons who o 50% - national government
are entrusted to save the same cannot do anything anymore o 50% - salvor
o Example: Vessel during a very strong typhoon and at the  If there are claimants:
mercy of the waves but the captain and everyone are still o Owner of vessel – 50%
inside the ship  X abandoned by still subject of salvage o Captain – 25%
because of concept QD  one who salvages the same is o Crew – 25% in proportion to their salaries
still entitled to salvage reward o Exclude expenses for advertising, taxes, duties, salvaging
WHAT IS THE RIGHT GAINED BY THE SALVAGOR OVER THE OBJECT NO SALVAGER REWARD WHEN
SALVAGED?
 If salvage was done by the crew of the vessel
 Right of possession – the salvor cannot say that say that he owns it
 If the salvage was done despite opposition of the captain
(abandonment of possession only by the abandoner, not
ownership)  If the salvager did not comply with the requirement to report the
 Could the salvor refuse to surrender the vessel or cargo to the matter to the collector of customs
owner?
BASIS OF SALVAGE AMOUNT TO BE GIVEN
o Yes, if the owner does not want to pay the salvage reward –
1. Labor
SALVAGE LIEN
2. Competence and skill

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3. Value of the materials being used to salvage 2. Advertisement
4. Risk being assumed 3. Auction sale
5. Value of the goods being salvaged 4. Taxes over the goods when it was brought to the country
** Salvage reward must not exceed 50% of the value of the goods salvaged 5. Expenses for salvage
6. Salvage reward
THINGS THAT HAVE TO BE PAID BY THE OWNER
1. Expenses for custody

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