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(1) Hazardous and Dangerous Substances The value of the goods which the carrier must pay in case of loss or
- Carrier not properly equipped to transport dangerous chemicals or misplacement shall be that what is declared in the bill of lading.
explosives may validly refuse to accept the same for transport.
- Those which are not authorized by the Maritime Industry Authority Consignee must not defer the payment of the expenses and transportation
to carry such goods may also validly refuse the same for transport. charges of the goods otherwise carrier may demand the judicial sale of the
- There must be a Special Permit to Carry from the MARINA. (accept goods.
only if the said cargoes are covered by the necessary clearance from
appropriate government agencies)
Effects of ‘delayed and unfinished voyage’ in inter-island vessels: (2) Carriage of Passengers
vessel cannot continue or complete her voyage for any cause –
carrier is under obligation to transport the passenger to his/her By trains – the extraordinary responsibility of common carrier commences the
destination at the expense of the carrier including free meals and moment the person who purchases the ticket (or a ‘token’ or ‘card’) from the
lodging before the passenger is transported to his/her destination; carrier presents himself at the proper place and in a proper manner to be
the passenger may opt to have his/her ticket refunded in full if the transported with a bona fide intent to ride the coach.
cause of the unfinished voyage is due to the negligence of the carrier
or to an amount that will suffice to defray transportation cost at the * Mere purchase of a ticket does not of itself create the relation of carrier and
shortest possible route if the cause of the unfinished voyage is passenger but it is an element in the inception of the relation.
fortuitous event.
vessel is delayed in arrival at the port of destination – free meals * A proper person who enters upon the carrier’s premises (station, ticketing
during mealtime office, or waiting room) with the intention of becoming a passenger will
delay in departure at the point of origin due to carrier’s negligence; ordinarily be viewed as assuming the status of a passenger.
fortuitous event - free meals during mealtime; carrier not obliged to
serve free meals * One who goes to the railroad station to inquire as to the possibility of securing
carrier is not obliged to inform passengers of sailing schedule of the passage on a freight train, which he knows, by the rules of the company, is not
vessel allowed to carry passengers, and to secure passage thereon if possible, is not
entitled to the rights of a passenger but is a mere trespasser.
C. DUTY TO EXERCISE EXTRAORDINARY DELIGENCE
- Goods should be delivered in the same condition that they were * One who rides upon any part of the vehicle or conveyance which is unsuitable
received and to transport the passengers without encountering any or dangerous, or which he knows is not intended for passengers, is not
harm or loss. presumed to be a passenger.
- Read page 79-80 for provisions
* One who secures free passage by fraud or stealth is precluded from recovery
ARTICLE 1755. A common carrier is bound to carry the passengers safely as far for injuries sustained through the negligence of the carrier, for he has not
as human care and foresight can provide, using the utmost diligence of very assumed the status of a passenger.
cautious persons, with a due regard for all the circumstances. (Civil Code)
3. Hi-jacking cannot exculpate the carrier from liability if it is shown IMPROPER PACKING
that the employees of the carrier were not overwhelmed by the
hijackers and that there was no showing of irresistible force. Since, Character of the goods and defects in the packaging or in the containers are
there were 4 employers while there were only 2 hijackers and only defenses available to the common carrier. Similarly, the Carriage of Good by Sea
one of them was armed with bladed weapon. Act provides that carrier shall not liable for:
ON THE OTHER HAND, a hijacking by 3 armed men is an event which 1. Wastage in bulk or weight or any damages arising form the inherent
is considered to be beyond the control of the carrier. Thus, the defect, quality or vice of goods;
carrier may be adjudged from liability if it can be proven that the 2. Insufficiency of packing;
hijacking was unforeseeable. 3. Insufficiency or inadequacy of the marks, or
4. Latent defects no discoverable by due diligence.
Case: Philippine American General Insurance Co. vs. MCG
- Even in cases where a natural disaster is the proximate and only However, NCC likewise provides:
cause of the loss, a common carrier is still required to exercise due Art. 1742. Even if the loss, destruction, or deterioration of the goods should be
diligence to prevent or minimize loss before, during and after the caused by the character of the goods, or the faulty nature of the packing or
occurrence of the natural disaster, for it to be exempt from liability the containers, the common carrier must exercise due diligence to forestall or
under the law for the loss of the goods lessen the loss.
Case: Pilapil vs. CA Thus, if the carrier accepted the goods knowing the fact of improper packing or
- Facts: a bystander alongside national highway hurled a stone at the even if the carrier does not know but the defect was nonetheless apparent
left side of the bus, hitting petition above his left eye which resulted upon ordinary observation, it is not relived from liability for loss or injury to
to partial loss of the left eye’s vision goods resulting therefrom.
- SC: A common carrier does not give its consent to become an insurer
of any and all risks to passengers and goods. It merely undertakes to Cases:
perform certain duties to the public as the law imposes, and holds 1. Problem: A carrier knowing that some of a cargo of sacks of rice had
itself liable for any breach thereof. big holes and others had openings just loosely tied with strings
- The law does not make the carrier an insurer of the absolute safety resulting to the spillage of rice during the trip. Thus, there was
of its passengers shortage in the delivery of the cargoes. When sued due to the
- Article 1763: A common carrier is responsible for injuries suffered by shortage, the carrier interposed a defense that it was not liable since
a passenger on account of the willful acts or negligence of other the shortage was due to the defective condition of the sacks. Decide.
passengers or of strangers, if the common carrier’s employees Answer: Carrier must still exercise extraordinary diligence if the fact
through the exercise of the diligence of a good father of a family of improper packing is known to the carrier or its servants, or
could have prevented or stopped the act or omission apparent upon ordinary observation. If the carrier accepted the
o Clearly, a tort committed by a stranger which causes cargo without protests or exception notwithstanding such condition,
injury to a passenger does not accord the latter a cause of he is not relived of liability for damage resulting therefrom. Apply
action against the carrier. The negligence for which a Article 1742.
common carrier is held responsible is the negligent
omission by the carrier’s employees to prevent the tort ORDER OF PUBLIC AUTHORITY
from being committed when the same could have been
foreseen and prevented by them Art. 1743. If through the order of public authority the goods are
seized or destroyed, the common carrier is not responsible, provided said
Case: Franklin Gacal vs. PAL public authority had power to issue order.
- It is therefore not enough that the event should not have been
foreseen or anticipated, as is commonly believed, but it must be one Cases:
impossible to foresee or to avoid. 1. Carrier was not excused from liability since the order of an acting
- The mere difficulty to foresee the happening is not the impossibility mayor was not considered as a valid order of a public authority. It is
to foresee the same required that public authority who issued the order must be duly
authorized to issue the order.
PUBLIC ENEMY 2. Carriage of Goods by Sea Act – provides that carrier shall not
responsible for loss or damage resulting from “arrest or restraint of
- Presupposes a state of war and refers to the government of a foreign princes, rulers, or people, or seizure under legal process” and from
nation at war with the country to which the carrier belongs, though not “quarantine restrictions”.
necessarily with that to which the owner of the gods owes allegiance.
Rationale: On the other hand, if the ship owner derives profits from
the results of the choice of the captain and the crew, when the choice Art. 2003. The hotel-keeper cannot free himself from responsibility by posting
turns out successful, it is also just that he should suffer the notices to the effect that he is not liable for the articles brought by the guest.
consequences of an unsuccessful appointment, by application of the Any stipulation between the hotel-keeper and the guest whereby the
rule of natural law contained in the partidas --- that he who enjoys responsibility of the former as set forth in articles 1998 to 2001 is suppressed
the benefits derived from a thing must likewise suffer the losses that or diminished shall be void. (n)
ensue therefrom
Cases:
- Note: Willful acts of the employees include theft 1. Despite the fact that the carrier gave notice that it shall not be liable
for baggage brought in by passengers, the carrier is still liable for lost
b. Other Passengers and Third Persons hand-carried luggage since it is governed by rules on necessary
deposits. Under Art. 20000, the responsibility of the depositary
- With respect to acts of strangers and other passengers resulting in includes the loss of property of the guest caused by strangers but
injury to a passenger, the availability of such defense is also subject not that which may proceed from force majeure. Moreover, article
to the exercise of a carrier of due diligence to prevent or stop the act 2001 considers theft as force majeure if it is done with use of arms
or omission. or through irresistible force.
- Negligence of the carrier need not be the sole cause of the damage 2. Even if the passenger did not declare his baggage nor pay its charges
or injury to the passenger or the goods. The carrier would still be contrary to the regulations of the bus company, the carrier is still
liable even if the contractual breach concurs with the negligent act liable in case of loss of the baggage. Since, it has the duty to exercise
or omission of another person. extraordinary diligence over the baggage that was turned over to the
carrier or placed in the baggage compartment of the bus. The non-
Remember: the negligence of the other river in a collision is NOT a payment of the charges is immaterial as long as the baggage was
prejudicial question to an action against the carrier’s company. received by the carrier for transportation.
Article 1759. Common carriers are liable for the death of or injuries to II. OBLIGATIONS OF SHIPPER, CONSIGNEE and PASSENGER
passenger through the negligence or willful acts of the former’s employees,
although such employees may have acted beyond the scope of their authority A. NEGLIGENCE OF SHIPPER OR PASSENGER
or in violation of the orders of the common carriers.
- The obligation to exercise due diligence is not limited to the carrier.
The shipper is obliged to exercise due diligence in avoiding damage
or injury.
Art. 1741. If the shipper or owner merely contributed to the loss, Case: Compania Maritima vs. CA and Vicente Concepcion
destruction or deterioration of the goods, the proximate cause thereof - While the act of private respondent in furnishing petitioner with an
being the negligence of the common carrier, the latter shall be liable in inaccurate with of the payloader cannot successfully be used as an
damages, which however, shall be equitably reduced. excuse by petitioner to avoid liability to the damage thus caused,
said act constitutes a CONTRIBUTORY CIRCUMSTANCE to the
damage caused on the payloader, which mitigates the liability for
Art. 1761. The passenger must observe the diligence of a good father of a
damages of petitioner in accordance with Article 1741.
family to avoid injury to himself.
Case: Philippine National Railways vs. CA
Art. 1762. The contributory negligence of the passenger does not bar recovery - While petitioner failed to exercise extraordinary diligence as
of damages for his death or injuries, if the proximate cause thereof is the required by law, it appears that the deceased was chargeable with
negligence of the common carrier, but the amount of damages shall be contributory negligence.
equitably reduced. - Since he opted to sit on the open platform between the coaches of
the train, he should have held tightly and tenaciously on the upright
a. Last Clear Chance metal bar found at the side of said platform to avoid falling off from
the speeding train
Passengers must take such risks incident to the mode of travel. Carriers are not b. Who will pay
insurers of the lives of their passengers. Thus, in air travel, adverse weather
conditions or extreme climatic changes are some of the perils involved in air Although either of the shipper or the consignor may pay the freight before or at
travel, the consequence of which the passenger must assume or expect. time the goods are delivered to the carrier for shipment, nonetheless, it is the
consignor (whom the contract of carriage is made) who is primarily liable for the
payment of freight whether or not he is the owner of the goods. The obligation
However, there is no assumption of risk in a case wherein a passenger boarded
to pay is implied from the mere fact that the consignor has placed the goods
a carrier that was filled to capacity. The act of the passenger in taking the
with the carrier for the purpose of transportation.
extension chair does not amount to implied assumption of risk.
c. Time to pay
Note: there is also no assumption of risk by the mere fact that the carrier
posted notices against such liability
Code of Commerce provides that in the absence of any agreement, the
consignee who is supposed to pay must do so within 24-hours from the time of
Problem: Although, there is a sign in the bus that says: “do not talk to the driver
delivery.
while the bus is in motion, otherwise, the company would not assume
responsibility for any accident:. Nonetheless, the passengers dared the driver to
Article 374. The consignees to whom the shipment was made may not defer
race with another bus, as the bus speeds up in the attempt to overtake the
the payment of the expenses and transportation charges of the goods they
other bus, it failed to slow down. As a result, the bus turns turtle causing the
receive after the lapse of twenty-four hours following their delivery; and in case
death and injuries to passengers. Is the bus company liable?
of delay in this payment, the carrier may demand the judicial sale of the goods
(1) Carriage of Passengers by Sea Case: Kapalaran Bus Lines vs. Coronado
- If common carriers carefully observed the statutory standard of
With respect to carriage of goods by sea, the tickets are purchased in advance. extraordinary diligence in respect of their own passengers, they
Carriers are not supposed to allow passengers without tickets --- the carrier is cannot help but simultaneously benefit pedestrians and the owners
bound to observe a “No Ticket, No Boarding Policy”. The carrier shall collect/ and passengers of other vehicles who are equally entitled to the safe
inspect the passenger’s ticket within one hour from vessel’s departure as not to and convenient use of our roads and highways
disrupt resting or sleeping passengers.
A reasonable man or a good father of a family in the position of the carrier must
If the vessel is not able to depart on time and the delay is unreasonable, the exercise extraordinary diligence in the performance of his contractual
passenger may opt to have his/ her ticket refunded without refund service fee. obligation.
Delayed voyage means “late departure of the vessel from its port of origin and/ - Generally, what should be determines is whether or not a
or late arrival of the vessel to its port of destination”. Unreasonable delay reasonable man, exercising extraordinary diligence, could have
means “the period of time that has lapsed without just cause and is solely foreseen and prevented the damage or loss that occurred.
attributable to the carrier which has prejudiced the transportation of the
passenger and/ or cargoes to their port of destination. III. EFFECT OF STIPULATION
A passenger who failed to board the vessel can refund or revalidate the ticket A. GOODS
subject to surcharges. Revalidation means “the accreditation of the ticket that - The parties cannot stipulate that the carrier will NOT exercise ANY
is not used and intended to be used for another voyage. diligence in the custody of goods
- The law allows a stipulation whereby the carrier will exercise a
(2) Carrier’s Lien degree of diligence which is less than extraordinary with respect to
goods.
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. Art. 1744. A stipulation between the common carrier and the shipper
375 of Code of Commerce: owner limiting the liability of the former for the loss, destruction, or
deterioration of the goods to a degree less than extraordinary
ARTICLE 375. The goods transported shall be especially bound to answer for diligence shall be valid, provided it be:
the cost of transportation and for the expenses and fees incurred for them
during their conveyance and until the moment of their delivery. 1. In writing, signed by the shipper/owner;
This special right shall prescribe eight days after the delivery has been made, 2. Supported by a valuable consideration other than the service
and once prescribed, the carrier shall have no other action than that rendered by the common carrier (Note: Typically fare/freight); and
corresponding to him as an ordinary creditor. 3. Reasonable, just and contrary to public policy.
DEMURRAGE B. PASSENGERS
- There can be no stipulation lessening the utmost diligence that is
Demurrage is the compensation provided for the contract of affreightment for owed to passengers.
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 Art. 1757. The responsibility of a common carrier for the safety of
sense, very improper detention of a vessel may be considered a demurrage. passengers as required in Arts. 1733 and 1755 cannot be dispensed
Technically, liability for demurrage exists only when expressly stipulated in the with or lessened by stipulation, by the posting of notices, by
contract. statements on tickets, or otherwise. (Note: Absolute; extraordinary at
all times.)
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 Gratuitous passenger – A stipulation limiting the common carrier’s liability for
with reasonable dispatch, but only by the party to whom the duty is owed and negligence is valid, but not for willful acts of gross negligence. The reduction of
only against on who is a party to the shipping contract. Notice of arrival of fare does not justify any limitation.
vessels or conveyances, or their placement for purposes of unloading is often a
condition precedent to the right to collect demurrage charges. Case: Lara vs. Valencia
- Diligence owed to accommodation passengers is only ordinary
CHAPTER 3 diligence
EXTRAORDINARY DILIGENCE - However, this case is not controlling with respect to common
carriers because the defendant in the said case was not a common
I. RATIONALE carrier
A common carrier is bound to carry the passengers safely as far a
human care and foresight provide, using the utmost diligence of very cautious IV. EXTRAORDINARY DILIGENCE IN CARRIAGE BY SEA
persons, with due regard for all circumstances.
A. SEAWORTHINESS
Extraordinary diligence: Calculated to protect the passengers from
the tragic mishaps that frequently occur in connection with rapid modern a. Warranty of Seaworthiness of Ship
transportation. - This is the first step that should be undertaken
- Extraordinary diligence requires that the ship which will
II. HOW DUTY IS COMPLIED WITH transport the passengers and goods is seaworthy.
- There is no hard and fast rule in the exercise of extraordinary - Seaworthiness of the vessel is impliedly warranted.
diligence - The carrier shall be bound before and at the beginning of the
- Common carrier binds itself to carry the passengers safely as far as voyage to exercise due diligence to make the ship seaworthy.
human care and foresight can provide, using the utmost diligence of
a very cautious person, with due regard for all the circumstances.
Note: there is transshipment whether or not the same person, firm or entity Airworthiness – An aircraft, its engines propellers, and other components and
owns the vessels (what matters is the actual physical transfer of cargo from one accessories, are of proper design and construction, and are safe for air
vessel to another) navigation purposes, such design and construction being consistent with
accepted engineering practice and in accordance with aerodynamic laws and
V. EXTRAORDINARY DILIGENCE IN CARRIAGE BY LAND aircraft science.
7. Custody Bill The goods are already receied by the carrier but the Bill of Lading as Evidence
of Lading vessel indicated therein has not yet arrived in the port. - The BOL is the legal evidence of the contract and the entries thereof
constitutes prima facie evidence of the contract.
8. Port Bill of The vessel indicated in the BOL that will transport the - All the essential elements of a valid contract (cause, consent, object)
Lading goods is already in the port. are present when such bill are issued.
C. Effects of Negotiation Under Art. 366 of the Code of Commerce, an action for damages is
- has the effect of manual delivery so as to constitute the transferee the owner barred if the goods arrived in damaged condition and no claim is filed
of the goods by the shipper within the following period:
- results in the transfer of ownership because transfer of document likewise 1. Immediately if damage is apparent;
transfers control over the goods 2. within twenty four (24) hours from delivery if damage is not
- refer to Art. 1513 apparent.
Chapter 5 - The period does not begin to run until the consignee has received
Actions and Damages in Case of Breach possession of the merchandise that he may exercise over it the
ordinary control pertinent to ownership.
Cause of action of a passenger and shipper: - This provision applies even to transportation by sea within the Phils.
a) against common carrier – based on culpa contractual or culpa aquiliana or coastwise shipping.
b) on the part of the driver – based on either culpa delictual or culpa aquiliana - Does NOT apply to misdelivery of goods.
Note: The source of obligation based on culpa contractual is separate and Q: Why does it not apply to misdelivery of goods?
distinct from quasi-delict. A: In such cases (misdelivery), there can be no question of claim for damages
suffered by the goods while in transport, since the claim for damages arises
Article 1903 (last paragraph) – 2 things are apparent: exclusively out of the failure to make delivery.
1. That when an injury is caused by the negligence of a servant or
employee there instantly arises a presumption of law that there was Case: Monica Roldan vs. Lim Ponzo and Co.
negligence on the part of the master or the employer either in the - Article 366 of the Commercial Code is limited to cases of claims for
selection of the servant or employee, or in supervision over him damage to goods actually turned over by the carrier and received by
after the selection, or both. the consignee.
2. That presumption is juris tantum and not juris et de jure (of law and
of right), and consequently may be rebutted But the period prescribed in Art. 366 may be subject to modification by
agreement of the parties.
Note however: that Article 1903 of the Civil Code is not applicable to acts of The validity of a contractual limitation of time for filing the suit itself
negligence which constitute the breach of contract. It is applicable only to culpa against a carrier shorter than the statutory period thereof has generally
contractual.
A. CONCEPTS (Chapter 6) Art. 643: vessel and cargo lost by reason of capture or wreck: all rights shall be
extinguished, both as regards the crew to demand any wages whatsoever, and
Maritime Law – is the system of laws which particularly relates to the affairs as regards the ship agent to recover the advances made
and business of the sea, to ships, their crews and navigation and to marine If a portion of the vessel or of the cargo, or both, should be saved,
conveyance of persons and property the crew engaged on wages, including the captain, shall retain their rights on
the salvage, so far as they go, on the remainder of the vessel as well on the
Governing Laws: amount of the freightage of the cargo saved; but sailors who are engaged on
1. New Civil Code – primary law on maritime commerce shares shall not have any right whatsoever on the salvage of the hull, but only
2. Book III Code of Commerce – applied suppletorily the portion of the freightage saved. If they should have worded to recover the
3. Special Laws remainder of the shipwrecked vessel they shall be given from the amount of the
a. Salvage Law (Act No. 2616) salvage an award in proportion of the efforts made and to the risks
b. Carriage of Goods by Sea Act (CA No. 65) encountered in order to accomplish the salvage
c. Ship Mortgage Decree of 1978 (PD 1521)
Art. 587: ship agent may exempt himself of the civil liabilities for the
REAL AND HYPOTHECARY NATURE OF MARITIME LAW indemnities in favor of third persons by abandoning vessel with all equipments
and freight it earned during voyage
Case: Philippine Shipping Company, et al. vs. Francisco Garcia Vergara
That which distinguishes the maritime from the civil law and even Art. 590: co-owners civilly liable in proportion to their interest and may exempt
from the mercantile law in general is the real and hypothecary liability by abandonment of the part of the vessel belonging to him
nature of the former
Limited liability rule – means that the liability of a shipowner for damages in
Evidence of this “real “ nature of maritime law: case of loss is limited to the value of his vessel.
o The limitation of the liability of the agents to the actual No vessel, no liability.
value of the vessel and the freight money The civil liability for collision is merely co-existent with the interest
o The right to retain the cargo and the embargo and in the vessel; if there was total loss, liability is also extinguished.
detention of the vessel even cases where the ordinary
civil law would not allow more than a personal action GR: If the ship is totally lost, liability is extinguished. If the ship or part thereof
against the debtor or person liable still exists, he can escape liability by abandoning the vessel, its appurtenances
and its freight.
This repeals the civil law to such extent that, in certain cases where
the mortgaged property is lost no personal action lies against the Case: Monarch Insurance Co., Inc. vs. Court of Appeals
owner or agent of the vessel The total destruction of the vessel extinguishes maritime liens
because there are no longer any res to which it can attach. This
Two reasons why it is impossible to do away with these privileges: doctrine is based on the real and hypothecary nature of maritime
o The risk to which the thing is exposed law.
o The real nature of maritime law, exclusively real,
according to which the liability of the parties is limited to Note: Since the Civil Code contains no provision regulating liability of
a thing to which is at mercy of the waves shipowners or agents in the event of total loss or destruction of the vessel,
Article 587 of the Code of Commerce governs.
Case: Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance
Corporation, Ltd. Article 837, 587 and 590 of Code of Commerce cover only:
1. Liability to third persons
The real and hypothecary nature of maritime law simply means 2. Acts of the captain
that the liability of the carrier in connection with losses related to 3. Collisions
maritime contracts is confined to the vessel, which is hypothecated
for such obligations or which stands as the guaranty for their EXCEPTIONS TO THE LIMITED LIABILITY RULE
settlement 1. Where the injury or death to a passenger is due either to the fault of
Purpose: It was designed to offset such adverse conditions and to the shipowner, or to the concurring negligence of the shipowner and
encourage people and entities to venture into maritime commerce the captain (NEGLIGENCE)
despite the risks and prohibitive cost of shipbuilding
Thus, the liability of the vessel owner and agent arising from the GR: Shipowner is liable for the negligence of the captain in collision
operation of such vessel were confined to the (1) vessel itself, (2) its cases
equipment, (3) freight, (4) and insurance if any, which limitation ---- liability is limited to value of the vessel
Limited liability rule does not apply to insurance claims ADMIRALTY JURISDICTION (RTC)
Case: Vasquez vs. CA - Section 19 (3) of BP 129 as amended by RA 7691
(3) In all actions in admiralty and maritime jurisdiction
- The total loss of the vessel did not extinguish the liability of the where the demand or claim exceeds 300, 000 or in Metro
carrier’s insrured manila, where such demand or claim exceeds 400,000.
- Despite the loss of the vessel, therefore, its insurance answers - if less MTC
for the damages that a shipowner or agent, may be held liable
for by reason of the death of its passengers. 3 concepts: (they are the same)
3. In the workmen’s compensation claims (WORKER’S 1. real and hypothecary --- the supreme court did not explain the literal
COMPENSATION) meaning of it.
- real: refers to the risk in maritime that’s why there are privileges for the
The provisions of the Code of Commerce have no room in the shipowner. Risks are certain to happen
application of the Workmen’s Compensation Act which seeks to - hypothecary: remember guaranty and collateral which is the vessel. For the
improve, and aims at the amelioration of, the condition of laborers particular voyage, the guaranty is the vessel wherein if the vessel is lost, the
and employees shipowner no longer has the liability
If an accident is compensable under the Workmen’s Compensation
Act, it must be compensated even when the workman’s right is not 2. limited liabililty rule --- no literal explanation
recognized by or is in conflict with other provisions of the Civil Code - limited: it means that the liability is limited to the value of the vessel
or of the Code of Commerce -liability: assumption that the shipowner is liable for the losses. There are no
Liability under the Workmen’s compensation Act, even if the vessel valid defenses that shipowner can invoke to escape liability. Same concept with
was lost, is still enforceable against the employer or shipowner. 1479. Difference is that there is a fixed amount and there is qualification
-under the limited liability – no fixed amount but amount is confined on the
4. Expenses for repairs and provisioning of the ship prior to the vessel
departure thereof
The question here: is this a right to limit the liability?
5. The vessel is not abandoned (ABANDONMENT) A: admittedly it is a right that only shipowner can exercise
Abandonment of the vessel, its appurtenances and the freightage is
an indispensable requirement before the shipowner or ship agent Q; how to exercise?
can enjoy the benefits of the limited liability rule. If the carrier does A: by way of pleading. But do not follow the way it was filed in yangco. Here it
not want to abandon the vessel, he is still liable even beyond the was after judgment that the shipowner sought to abandon the ship to abandon
value of the vessel liability
The only instance where abandonment is dispensed with is when the But right now, it is a matter of procedure. To limit liability by abandoning the
vessel was entirely lost. In such case, the obligation is extinguished. vessel; IF it is a matter of procedure, you check the rules of civil procedure
Only shipowner and ship agent can make an abandonment
Q: so when does shipowner inform the court the right to limit liability?
A: in a pleading and normally in an answer. IT will be raised as a defense. If
PROCEDURE FOR ENFORCEMENT
shipownver cannot allege, then that defense is deemed waiver. Therefore you
cannot seek abandonment after judgment was been rendered.
Case: Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance
Corporation, Ltd.
CASES:
- Rights of the parties to claim against an agent or owner of vessel
may be compared to those of creditors against an insolvent
corporation whose assets are not enough to satisfy the totality of Yangco vs. Lacerna
- even captain was aware of the typhoon and the vessel capsized, SC upheld
claims as against it.
limited liability
- Creditors must limit their recovery to what is left in the name of the
corporation
Chua Hek Kong
- In the sinking of a vessel, the claimants or creditors are limited in
- there being no exceptions, the court upheld limited liability
their recovery to the remaining value of accessible assets. In the case
of lost vessel, these assets are the insurance proceeds and pending
The more critical issue is on the EXCEPTIONS in the LLRule:
freightage for the particular voyage
1. workmen’s compensation (Abueg case: the repairs constitue maritime lient)
2. insurance coverage--- if the vessel is lost in the course of voyage and it is
PROTESTS
insured, is it automatic that the limited liability rule does not apply?
- is the written statement by the master of a vessel or any authorized
A: No. the basis of supreme court (Vasquez vs. CA --- court mentioned very little
officer, attested by proper officer or a notary, to the effect that
about insurance: if the vessel is insured, the insurance proceeds shall answer
damages has been suffered by the ship
the credit)
But question, if vessel if covered with insurance, does this mean that plaintiff Case: Poliand Industrial
can recover to the amount applied? No, they can only recover until the - facts shows that the proceeds debted from hardwood was for the modification
coverage of the insurance proceeds. of the vessel (extended for vessels benefit), for crews wage
Ships ought to be understood in the sense of vessel serving the purpose ACQUISITION
of maritime navigation or seagoing vessel, and not in the sense of vessel
devoted to the navigation of rivers Vessel may be acquired or transferred by any means recognized by laws.
Thus, vessel may be sold, donated and may even be acquired through
The third book of the code of commerce, dealing with maritime prescription.
commerce, was evidently intended to define laws relative to merchant Under the present laws, vessels that are under the jurisdiction of MARINA
vessels and maritime shipping; and as appears from said code, the vessel can be transferred only with notice to said administrative agency.
intended in that book are such run by masters having special training with
elaborate apparatus of crew and equipment indicated in the code. A. Prescription (Code of Commerce)
Only vessels engaged in what is ordinarily known as maritime commerce Article 573. Merchant vessels constitute property which may be acquired and
are within the provision of law conferring limited liability on the owner in transferred by any of the means recognized by law. The acquisition of a vessel
case of maritime disaster. must appear in a written instrument, which shall not produce any effect with
respect to third persons if not inscribed in the registry of vessels.
Other vessel of minor nature not engaged in maritime commerce, such as
river boats and those carrying passengers from ship to shore, must be The ownership of a vessel shall likewise be acquired by possession in good faith,
governed, as to their liability to passenger, by the provision of the civil continued for three years, with a just title duly recorded.
code or other appropriate special provisions of law.
In the absence of any of these requisites, continuous possession for ten years
Case: Augusto Lopez vs. Juan Duruelo, et. al shall be necessary in order to acquire ownership.
- The code of commerce are not applicable to small craft which are
only subject to administrative (customs) regulations in the matter of A captain may not acquire by prescription the vessel of which he is in command.
port service and in the fishing industry
- Only vessels engaged in what is ordinarily known as maritime ARTICLE 575. Co-owners of vessels shall have the right of repurchase and
commerce are within the provisions of law conferring limited liability redemption in sales made to strangers, but they may exercise the same only
on the owner in case of maritime disaster within the nine days following the inscription of the sale in the registry, and by
- It is therefore clear that a passenger on a boat like the Jison, in the depositing the price at the same time.
case before use, is not required to make protest as a condition
precedent to his right of action for the injury suffered by him in the B. Sale (Code of Commerce)
collision described in the complaint – article 835 of the Code of
Commerce does not apply Article 576. In the sale of a vessel it shall always be understood as included the
CONSTRUCTION, EQUIPMENT AND MANNING rigging, masts, stores and engine of a streamer appurtenant thereto, which at
the time belongs to the vendor.
The Construction, equipment and manning of vessel are subject to the rules
issued by the Maritime Industry Authority (MARINA) and consistent with Article The arms, munitions of war, provisions and fuel shall not be considered as
574 of the Code of Commerce included in the sale.
Article 574. Builders of vessels may employ the materials and follow, with The vendor shall be under the obligation to deliver to the purchaser a certified
respect to their construction and rigging, the systems most suitable to their copy of the record sheet of the vessel in the registry up to the date of the sale.
interests. Ship owners and seamen shall be subject to what the laws and
regulations of the public administration on navigation, customs, health, safety Article 577. If the alienation of the vessel should be made while it is on a
of vessels, and other similar matters. voyage, the freightage which it earns from the time it receives its last cargo
shall pertain entirely to the purchaser, and the payment of the crew and other
PERSONAL PROPERTY persons who make up its complement for the same voyage shall be for his
account.
OTHER CODE OF COMMERCE PROVISIONS Based on the first aforementioned role, the captain is regarded as the GENERAL
The provisions of the Code of Commerce reproduced hereunder are AGENT of the shipowner and as such, he:
deemed modified not only by the Civil Code but also by special laws
a. Has authority to sign bills of lading;
b. Carry goods aboard and deal with the freight earned;
SAFETY REGULATIONS c. Agree upon rates and decide whether to take cargo;
On February 23, 2000, the Maritime Industry Authority directed all d. Has legal authority to enter into contracts with respect to the vessel and
domestic shipowners and operators under Memorandum Circular No. the trading of the vessel, subject to applicable limitations established by
154 to strictly comply with existing Safety-Related Policies, Guidelines, statute, contract or instructions and regulations of the shipowner.
Rules and Regulations All aforementioned functions verily commits to the captain the governance,
Rules include: (read book page 488-489) care, and management of the vessel. Clearly then, the captain is vested with
Monitoring of compliances shall be undertaken by the Authority and its both MANAGEMENT and FIDUCIARY functions.
Maritime Regional Offices, together with the needed coordination with
Applicable Principle: The captain has control of ALL departments of service in COMPLEMENT OF A VESSEL (Art. 648, Code of Commerce)
the vessel, and reasonable discretion as to its navigation. -- all the persons on board from the captain to the cabin boy, necessary for the
management, maneuvers, and service, and therefore, it includes the CREW, the
Basic Principle in Admiralty Law: In navigating the vessel, the master must be SAILING MATES, ENGINEERS, STOKERS, and OTHER EMPLOYEES ON BOARD not
left free to exercise his own best judgment. having specific designations; but it SHALL NOT INCLUDE the passengers or the
persons whom the vessel is transporting.
Requirements of Safe Navigation: The judgment and discretion of the captain
of a vessel may be confined within a straitjacket, even in this age of electronic REGULATION OF MERCHANT MARINE PROFESSION
communications. The practice of marine profession is now governed by special laws and pertinent
rules issued by the:
PILOTAGE: Who is a pilot? - MARINA;
- BOARD OF MARINE DECK OFFICERS;
Maritime Law: a person duly qualified, and licensed, to conduct a vessel into or - BOARD OF MARINE ENGINEER OFFICERS
out of ports, or in certain waters.
MINIMUM SAFE MANNING
Broad sense: includes both (1) those whose duty it is to guide vessels into or out It is not enough that the officers manning the merchant vessel have all the
of ports, or in particular waters; and (2) those entrusted with the navigation of qualifications imposed by the Philippine Merchant Marine Officers Act and
vessels on the high seas. other special laws or regulations. It is also required that there is sufficient
number of officers and crew that are serving in the vessel. (Quality and
General understanding: a person taken on board at a particular place for the Quantity)
purpose of conducting a ship through a river, road or channel, or from a port.
SECURITY OF TENURE
COMPULSORY PILOTAGE. In compulsory pilotage, states possessing harbors The Labor Code provisions apply to OFFICERS and CREW of merchant
enacted laws or promulgated rules requiring vessels approaching their ports to vessels in DOMESTIC Trade or COASTWISE Shipping. Hence, matters
take on board pilots licensed under local law. In the Philippines, compulsory concerning their dismissal or disciplinary action must be in accordance
pilotage is being implemented in the Port of Manila, the latter being within the with provisions of the Labor Code. For officers and crew who are working
Manila Pilotage District. in foreign vessels who are involved in overseas shipping, there must be
compliance with the applicable laws on overseas employment as well as
a. Master and Pilot (See Far Eastern Shipping case on page 520 of the regulations issued by the Philippine Overseas Employment Administration
Aquino book for the SC discussion on the duties of a pilot) (POEA).
b. Shipowner and Pilot CODE OF COMMERCE PROVISIONS on Sailing Mates, Second Mate and Marine
Engineer, Crew, and Captain (See pages 552-560 of the Aquino book).
GENERAL RULE: the pilot is PERSONALLY LIABLE for damages caused by
his own negligence or default to the OWNERS of the vessel, and to THIRD Parties --- those provided above… plus seamen, other members of the
PARTIES for damages sustained in a collision. Such negligence of the pilot complement including the stokers (incharge of boilers) and supercargo (agent of
in the performance of duty constitutes a MARITIME TORT. the shippers who has authority to sell goods while on voyage)
In cases of COLLISION: the COLLIDING VESSEL is prima facie responsible, 4 maritime contracts
hence, the burden of proof is upon the party claiming benefit of the 1. charter parties
exemption from liability. Thus, it must be shown affirmatively that the 2. Botomry
pilot was at fault, and that there was no fault on the part of the officers or 3. Repondentia
crew, which might have been conducive to the damage. The fact that the 4. Marine insurance (incorporated in the subject insurance)
law compelled the master to take the pilot does not exonerate the vessel
from liability. The injured party shall seek redress from the vessel. The ON PERSONS
owners of the vessel are responsible to the injured party for the acts of
the pilot, and they must be left to recover the amount as well as they can Shipowner
against him. - he has the privilege to invoke limited liability rule
- what if with a charter party with charterer, who can invoke the LLR?
c. Pilot and his Association No jurisprudence. Personal opinion of sir: distinguish on the type of
charter party. If affreightment, shipowner retains possession,
The fact that the pilot is a member of an association does not make the command and navigation of the vessel. If bareboat it is vested upon
association jointly and severally liable. Article 2180 of the Civil Code does the charterer.
not apply because there is NO EMPLOYER-EMPLOYEE Relationship. - Jurisprudence: except for registration, the charterer is the temporary
owner of the vessel. With this, the charterer can invoke LLR (this part
Well-established is the rule that pilot associations are immune to no juris)
vicarious liability for the tort of their members. They are not the
employer of their members and exercise no control over them once they
Home Insurance v. American Steamship Art. 1744. A stipulation between the common carrier and the shipper or
- case mostly used by the common carrier as defense ; Home owner limiting the liability of the former for the loss, destruction, or
Insurance is subrogee (paid SMC of loss cargo shipped thru deterioration of the goods to a degree less than extraordinary diligence shall
American Steamship ; no reference as to what contract but there be valid, provided it be:
was a mention that it was in affreightment (1) In writing, signed by the shipper or owner;
- Ruling : Common Carrier undertaking to carry special cargo (2) Supported by a valuable consideration other than the service
(chartered to special person only ) become a private carrier and rendered by the common carrier; and
stipulation exempting owner from liability for loss due to the (3) Reasonable, just and not contrary to public policy.
negligence of its agents is valid;
Art. 1745. Any of the following or similar stipulations shall be considered
Shipowner can appoint senior officers for the vessel even if bareboat contract. unreasonable, unjust and contrary to public policy:
But technically it is an affreightment. Most conflicts will occur if these various (1) That the goods are transported at the risk of the owner or
principles will have to be mixed. shipper;
(2) That the common carrier will not be liable for any loss,
The whereabouts of the vessel is important to know the time for loading and destruction, or deterioration of the goods;
unloading… (3) That the common carrier need not observe any diligence in the
custody of the goods;
Policy – marina (4) That the common carrier shall exercise a degree of diligence less
Implementing or enforcement --- Coastguard than that of a good father of a family, or of a man of ordinary
prudence in the vigilance over the movables transported;
2 conditions implied in charter party (5) That the common carrier shall not be responsible for the acts or
1. seaworthiness (Caltex Phil Case) --- it need not be written in the charter party omission of his or its employees;
2. --- look at book (ala kaapas) (6) That the common carrier's liability for acts committed by
thieves, or of robbers who do not act with grave or irresistible
JURISDICTION OF ADMIRALTY CASES threat, violence or force, is dispensed with or diminished;
- depends on the jurisdictional amount (7) That the common carrier is not responsible for the loss,
- important element of the contract = the subject matter of the destruction, or deterioration of goods on account of the defective
contract (nature and character) condition of the car, vehicle, ship, airplane or other equipment
used in the contract of carriage.
International Harvester v Aragon
-involves loss of cargo shipped from LA to Manila; cargo owner filed an action Art. 1746. An agreement limiting the common carrier's liability may be
against common carrier annulled by the shipper or owner if the common carrier refused to carry the
-SC said liability of petitioner was predicated upon the contract of carriage ; goods unless the former agreed to such stipulation.
admiralty would involve all maritime contract in whatever form and wherever
made
- If there is charter party or bill of lading (BOL) = no contract at all; but according 5. Collateral is the vessel or cargo 5. Maybe property, real or
to Blanco, if there is delivery and receipt of cargo combined with the GF and subject to maritime risk personal
mutual consent = contract present , better than BOL 6. Must be in writing 6. Need not be in writing but
interest shall not be due unless
E. LOANS ON BOTTOMRY AND RESPONDENTIA expressly stipulated in writing
7. To be binding on third person must 7. Need not be registered
LOAN ON BOTTOMRY – loan made by shipowner or ship agent guaranteed by be recorded in the registry of vessels
vessel itself and repayable upon arrival of vessel at destination; vessel/portion of port of registry of the vessel
8. Loss of collateral extinguishes the 8. Does not extinguished if there is
LOAN ON RESPONDENTIA – loan, taken on security of the cargo laden on a same a loss of the collateral (if any)
vessel, and repayable upon safe arrival of cargo at destination; cargo/goods
Consequences of loss of effects of the loans
COMMON ELEMENTS OF LOANS ON BOTTOMRY AND RESPONDENTS:
1. Exposure of security to marine peril; 1. Effects of loans be lost due to accident of the sea during the time, and on the
2. Obligation of the debtor conditioned only upon safe arrival of the security occasion of the voyage which has been designated in the contract and proven
at the point of destination. that the cargo was on board
- lender losses the right to institute the action which would pertain to him
Requisites of a Loan on Bottomry/Respondentia:
1. Shipowner borrows money for use, equipment or repair of vessel Except: when the loss was
2. For a definite term and with extraordinary interest called premium 1. caused by inherent defect of the thing
3. Secured by pledged of vessel or portion thereof in the case on loan on 2. through fault or malice of the borrower
Bottomry; or pledge of goods in case of Respondentia 3. through barratry on the part of the captain
4. Loan repayment depends or conditioned on the safe arrival of goods for 4. caused by damages suffered by the vessel as a consequence of
respondentia and obligation to repay is extinguished if pledged goods being engaged in a contraband
are lost (Respondentia) 5. loaded the goods on a vessel different from that designated in the
5. Obligation to repay is extinguished if vessel is lost due to specified contract unless the change was caused by force majeure
marine perils in the course of voyage or within limited time (Bottomry)
4. If the loan should be on the vessel or any of her parts, the freight earned * Averages – an extra-ordinary or accidental expense incurred during the
during the voyage for which the loan was contracted shall also be liable for its voyage in order to preserve the cargo, vessel or both; and all damages or
payment, as far as it may reach. deterioration suffered by the vessel from departure to the port of destination,
and to the cargo from the port of loading to the port consignment. (Art. 806)
5. If the same vessel or cargo should be the object of the loan of Bottomry or
respondentia and maritime insurance, the value of what may be saved in case CLASSES OF AVERAGES:
of shipwreck shall be divided between the lender and the insurer, in proportion A. Particular or Simple Average
to the legitimate interest of each one, taking in consideration, for this purpose B. Gross or General Average
only, the principal with respect to the
A. Particular or Simple Average
Maritime contracts include charter parties… and loans on bottomry and
respondentia are considered maritime contracts Damage or expenses caused to the vessel or cargo that did not inure to
Q: why do we have to study this topic? Are these relevant? common benefit, and borne by respective owners. (809)
A: they are hardly used at present. However, we have to study this just in case The owner of the goods which gave rise to the expense or suffered th e
this will be asked in the bar. Especially in the unique terms used in this topic.. damage shall bear this average. (Art. 810)
res perit domino applies
General provisions in contracts will govern if the vessel or goods are hypothecated by loan on bottomry and
respondentia, the lender shall bear the loss in proportion to his interest
Basic provision you should not forget:
1. there should be a marine risk Examples: see article 809 of the code of commerce
2. the condition that the vessel or the goods has perished then the right of the
lender to collect everything as well as stipulated interest is extinguished RULES ON AVERAGES:
(not sure if there are other more.. basin ala ko kaapas) 1. Averages is defined as damage deliberately caused or an expense
deliberately incurred due to a marine peril and which has resulted in
BOTTOMRY saving both vessel and cargo or only the vessel or cargo.
- It may refer to the vessel 2. Where both vessel and cargo are saved, it is general average; where only
- The bottom or the hull or the kill of the vessel can be pledged in this the vessel or only the cargo is saved, it is particular average.
case 3. The person whose property has been saved must contribute to reimburse
- The whole vessel can be a subject of a security or collateral the damage caused or expense incurred if the situation constitutes
- PD. 1521: (is this different) --- loan is the principal, mortgage is the general average.
accessory.
- The contract of bottomry is principal, the mortgage under pd 1521 is B. Gross or General Average
merely a security Damage or expenses deliberately caused in order to save the vessel, its cargo
- In pd 1521 under section 4 it is a requirement that the whole of the or both from real and known risk. (Art. 811)
vessel must be mortgaged (no jurisprudence on this matter whether All the persons having an interest in the vessel and the cargo therein at the
a part of the vessel can be mortgaged) time of the occurrence of the average shall contribute to satisfy this average.
- In bottomry the whole or the part of the vessel can be the subject (Art. 812)
- IF the part of the vessel can be pledged, is it necessary that there
should be goods? No. no need for goods. REQUISITES:
1. common danger present
RESPONDENTIA 2. arising from accidents of sea, disposition of authority
- The vessel should have goods. The goods must be laden in the vessel 3. peril imminent and ascertained
- Is it necessary that the boat is on voyage? The vessel must be in the 4. part of vessel or cargo deliberately sacrificed
actual course of voyage because this is the objective of the law. 5. intended to save vessel or cargo
Because if the vessel is docked in the port the owner can simply 6. proper legal steps and authority taken
obtain loans. And besides there is no risk when the vessel is docked
(but no jurisprudence) Common danger
- means both the ship and the cargo, after has been loaded, are subject to the
Distinction of this two types of loan vs. SIMPLE LOAN (for purposes of the bar) -- same danger, whether during the voyage, or in the port of loading or unloading,
- 5 differences that the danger arises from the accidents of the sea, disposition of authority, or
1. with respect to form --- can you validly execute a bottomry or respondentia faults of men, provided that circumstances producing the peril should be
verbally? You cannot. Bec under the code of commerce no judicial action can ascertained and imminent or may rationally be said to be certain and imminent
arise when the contract is not reduced in writing. But this is not the case in
simple loan. But in simple loan you take note the statute of frauds… if not in - When the measure of precaution adopted solely and exclusively for the
writing B and R, you can dismiss case due to failure to state cause of action. preservation of the vessel from the danger of seizure or capture and not for the
common safety is not considered as common danger
Q: why hardly used at present?
A: because of sophistication. Captains can just call up any agent the shipowner Deliberate Sacrifice
to deliver anything for the use of the vessel to deliver. … This contract was - voluntary sacrifice of a part for the benefit of the whole in order to justify the
recognized in medieval times. average contribution
- owners of the goods saved shall not be liable for the indemnification of those Law on averages does not apply if the CC is negligent.
jettisoned, lost or damaged
- hence when the sacrifice was not successful in saving the ship, there will be no YORK-ANTWERP RULES ON DETERMINING LIABILITY FOR CONTRIBUTION ON
general contribution AVERAGES
Compliance with Legal Steps Under the rule, deck cargo is permitted in coastwise shipping but prohibited
in overseas shipping.
- Procedure for recovery: (Art. 813-814) 1. If deck cargo is located with the consent of the shipper on overseas
1. There must be a resolution of the captain, adopted after a deliberation trade, it must always contribute to general average, but should the same
with the other officers of the vessel and after hearing all persons be jettisoned, it would not be entitled to reimbursement because there
interested in the cargoes. If the latter disagree, the decision of the captain is violation of the Y-A Rules.
should prevail but they shall register their objections. 2. If deck cargo is loaded with the consent of the shipper on coastwise
2. The resolution must be entered in the logbook, stating the reasons and shipping, it must always contribute to general average and if jettisoned
motives for the dissent, and the irresistible and urgent causes if he acted would be entitled to reimbursement.
in his own accord. It must be signed, in the first case, by all persons
present in the hearing. In the second case, by the captain and all the - may also be used to solve controversies where no provision of the
officers of the vessel. code of commerce is in point because the said rules embody the
3. The minutes must also contain a detail of all the goods jettisoned and custom of maritime states
those injuries caused to those on board.
4. The captain shall deliver it to the maritime judicial authority of the first AVERAGES
port he may make, within 24 hours after his arrival, and to ratify it - the same concept that was existing in medieval times can be applied at
immediately under oath. present
- ORDER OF GOODS TO BE CAST OVERBOARD IN CASE OF JETTISON: Relevance of averages (take note these ex. Connected to expenses under 806)
1. those which are on the deck, preferring the heaviest one with the least under 806 --- averages are:
utility and value; o Extraordinary expenses – ex. If machine does not work,
2. those which are below the upper deck, beginning with the one with you have to ask help of a tugboat… the expenses on the
greatest weight and smallest value. (Art. 815) use of tugboat is a question of averages. This is
extraordinary because it is not foreseen. --- assuming the
engine of the vessel was defective, can that be
4 reqs for general averages (see above notes) – MEMORIZE; MAGSAYSAY VS. Collisions - impact of 2 vessels both of which are moving.
AGAN Allision - impact between a moving vessel and a stationary one.
1. common danger TO Both vessel and cargo
2. deliberate sacrifice 3 Zones of Time in the Collision of vessels:
3. successful saving 1. First zone – all time up to the moment when risk of collision begins;
4. compliance with the proper steps 2. Second zone – time between moment when risk of collision begins and
moment it becomes a practical certainty;
If no special circumstance, it is a particular or simple average --- the owner of 3. Third zone – time when collision is certain and time of impact.
the vessel will be the one who will shoulder the loss. The negligence of captain,
the owner of the vessel will shoulder. But if there is special circumstance, the Error in Extremis - sudden movement made by a faultless vessel during the
loss will be shouldered proportionately by those who benefited 3rd zone of collision with another vessel which is at fault during the 2nd zone.
Even if such sudden movement is wrong, no responsibility will fall on said
Standard oil case – the ship captain will not release goods to the shipper unless faultless vessel. (Urrutia and Co. v. Baco River Plantation Co., 26 PHIL 632).
the shipper will contribute their share. The issue was the duty of the captain to
liquidate – he did not file for the appropriate proceeding, you should result to Rules on Collision of Vessels under Code of Commerce:
legal liquidation. Captain here failed TO INITIATE proper proceeding thus 1. The collision may be due to the fault, negligence or lack of skill of the
shipowner is liable for actions of captain captain, sailing mate, or any other member of the complement of the
vessel. The owner of the vessel at fault be liable for losses or damage.
Q: is the duty of captain to initiate a condition precedent? (Art. 826)
A: no. even if ship captain does not initiate, the shipowner can still file the 2. The collision may be due to the fault of both vessels. Each vessel shall
appropriate proceeding in court. suffer its own losses, but as regards the owner of cargoes both vessels
shall be jointly and severally liable. (Art. 827)
COMMON DANGER – both to vessel and cargo. If one invokes general average 3. If it cannot be determined which vessel is at fault. Each vessel shall also
then that person must prove what he allege. In standard oil since ship captain suffer its own losses and both shall be solidarily liable for losses o
invoked gen aver – they should be the one to prove. Failure to prove, they damages on the cargoes. (Art. 828)
cannot ask for contribution from owners of the goods. 4. The vessels may collide with each other through fortuitous event or force
majeure. In this case each shall bear its own damage. (Art. 830)
It is also possible that there are no goods involved. Only extraordinary expense 5. Two vessels may collide with each other without their fault by reason of a
Phil. Home assurance case --- discussed also in chapter 3 --- when it exploded, third vessel. The third vessel will be liable for losses and damages. (Art.
vessel got burned, another vessel came to the rescue to extinguish the fire and 831)
towed the vessel to the nearest destination. Goods were saved from the subject 6. A vessel which is properly anchored and moored may collide with those
vessel. The shipowner asked for contribution to the owner of the goods which nearby reasons of storm or other cause of force majeure. The vessel run
were saved. SC said, shipowner did not comply legal steps 813-815 thus you into shall suffer its own damage and expense. (Art. 832)
cannot allege general averages.
Cases covered by collision and allision:
If the averages are not general, it is particular. the shipowner will be solely 1. One vessel at fault – such vessel is liable for damage caused to innocent
liable… in the case of Magsaysay, there was no deliberate sacrifice. vessel as well as damages suffered by the owners of cargo of both vessels.
2. Both vessels at fault – each vessel must bear its own loss, but the shippers
SUCCESSFUL SAVING of both vessels may go against the ship owners who will be solidarily
- Both vessel and goods must be saved liable.
- If vessel not saved, no general averages. Even if goods were saved 3. Vessel at fault not known – same as rule as (2). (Doctrine of Inscrutable
- You have to start with resolution, placing of reso in the log book, Fault)
accounting of goods thrown away starting those on deck and to 4. Third vessel at fault – same rule as (1).
follow from those not on deck (read 83-815) 5. Fortuitous event – no liability. Each bears its own loss.
American Home insurance (take note this case--- bar) Prerequisite to recovery:
- Transportation of tv sets, the shipcapatain was uprised of the Protest should be made within 24 hours before the competent authority at
typhoon. Still captain continued with the journey. Then na abot ang the point of collision or at the first port of arrival, if in the Philippines and to the
typhoon captain directed that the tv sets should be jettison. Saved Philippine consul, if the collision took place abroad. (Art. 835)
vessel. Reklamo owner. Is there general average? No. if the Injuries to persons and damage to cargo of owners not on board on collision
shipowner is negligent, the law on general averages does not apply. time need not be protested. (Art. 836)
SEC. 8. THE FOLLOWING SHALL HAVE NO RIGHT TO A REWARD FOR SALVAGE * Goods – includes goods, wares, merchandise, and articles of every kinds
OR ASSISTANCE: whatsoever
- does not include live animals and cargo which by the contract of
A. THE CREW OF THE VESSEL SHIPWRECKED OR WHICH WAS IS DANGER OF carriage is stated as being carried on deck and is so carried
SHIPWRECK;
Parties:
B. HE WHO SHALL HAVE COMMENCED THE SALVAGE IN SPITE OF OPPOSITION Carrier, and
OF THE CAPTAIN OR HIS REPRESENTATIVE; AND Shipper
- They are given their respective rights and obligations under COGSA.
C. HE WHO SHALL HAVE FAILED TO COMPLY WITH THE PROVISIONS OF SECTION - Carrier (covered by COGSA) not limited to the shipowner; includes
THREE. charterer who enters into a contract of carriage with the shipper
- Charterer charters a vessel and conducts his own business for his own
SEC. 9. IF, DURING THE DANGER, AN AGREEMENT IS ENTERED INTO account
CONCERNING THE AMOUNT OF THE REWARD FOR SALVAGE OR ASSISTANCE, after chartering the vessel, he uses the vessel to conduct a
ITS VALIDITY MAY BE IMPUGNED BECAUSE IT IS EXCESSIVE, AND IT MAY BE business of transportation obtaining goods from 3rd persons to transport the
REQUIRED TO BE REDUCED TO AN AMOUNT PROPORTIONATE TO THE latter’s goods
CIRCUMSTANCES.
Duties of the carrier:
SEC. 10. IN A CASE COMING UNDER THE LAST PRECEDING SECTION, AS WELL AS Civil Code requires international carriers to exercise extraordinary
IN THE ABSENCE OF AN AGREEMENT, THE REWARD FOR SALVAGE OR diligence in the performance of their contractual obligations
ASSISTANCE SHALL BE FIXED BY THE COURT OF FIRST INSTANCE OF THE Section 2 of COGSA carrier’s obligation and liabilities in relation to
PROVINCE WHERE THE THINGS SALVAGED ARE FOUND, TAKING INTO ACCOUNT the loading, handling, stowage, carriage, custody, care and discharge
PRINCIPALLY THE EXPENDITURES MADE TO RECOVER OR SAVE THE VESSEL OR of such goods
THE CARGO OR BOTH, THE ZEAL DEMONSTRATED, THE TIME EMPLOYED, THE Section 3 of COGSA responsibilities of the carrier under COGSA
SERVICES RENDERED, THE EXCESSIVE EXPRESS OCCASIONED THE NUMBER OF
PERSONS WHO AIDED, THE DANGER TO WHICH THEY AND THEIR VESSELS WERE Document of title required
EXPOSED AS WELL AS THAT WHICH MENACED THE THINGS RECOVERED OR - evidenced by the Bill of Lading
SALVAGED, AND THE VALUE OF SUCH THINGS AFTER DEDUCTING THE - BOL serves as prima facie evidence of the receipt by the carrier of the goods
EXPENSES.
Notice of claim and prescriptive period
SEC. 11. FROM THE PROCEEDS OF THE SALE OF THE THINGS SAVED SHALL BE * Notice of claim must be made within 3 days from delivery if the damage is
DEDUCTED, FIRST, THE EXPENSES OF THEIR CUSTODY, CONSERVATION, not apparent; not mandatory
ADVERTISEMENT, AND AUCTION, AS WELL AS WHATEVER TAXES OR DUTIES * Prescriptive period 1 year from delivery for the filing of the case is a
THEY SHOULD PAY FOR THEIR ENTRANCE; THEN THERE SHALL BE DEDUCTED condition precedent or mandatory; does not apply to cases of misdelivery or
THE EXPENSES OF SALVAGE; AND FROM THE NET AMOUNT REMAINING SHALL conversion
BE TAKEN THE REWARD FOR THE SALVAGE OR ASSISTANCE WHICH SHALL NOT
EXCEED FIFTY PER CENT OF SUCH AMOUNT REMAINING. Defenses and immunities
- provided for by Section 4 of COGSA
SEC. 12. IF IN THE SALVAGE OR IN THE RENDERING OF ASSISTANCE DIFFERENT - Section 49(1) of COGSA – carrier shall not be liable for loss or damages arising
PERSONS SHALL HAVE INTERVENED THE REWARD SHALL BE DIVIDED BETWEEN from unseaworthiness
THEM IN PROPORTION TO THE SERVICES WHICH EACH ONE MAY HAVE - New Civil Code – carrier will not be liable only if it can present proof that the
RENDERED, AND, IN CASE OF DOUBT, IN EQUAL PARTS. unseaworthiness was caused exclusively by any of the circumstances specified
in Art. 1734 of the NCC
THOSE WHO, IN ORDER TO SAVE PERSONS, SHALL HAVE BEEN EXPOSED TO THE
SAME DANGERS SHALL ALSO HAVE A RIGHT TO PARTICIPATION IN THE Waiver
REWARD. - The shipowner and the ship agent may waive the benefit of any of the
defenses in its favor provided not only under COGSA but also under other laws
SEC. 13. IF A VESSEL OR ITS CARGO SHALL HAVE BEEN ASSISTED OR SAVED,
ENTIRELY OR PARTIALLY, BY ANOTHER VESSEL, THE REWARD FOR SALVAGE OR Limiting provision
FOR ASSISTANCE SHALL BE DIVIDED BETWEEN THE OWNER, THE CAPTAIN, AND - COGSA contains a provision that allows the shipper to recover only US$500 per
THE REMAINDER OF THE CREW OF THE LATTER VESSEL, SO AS TO GIVE THE package unless there is a special declaration unless there the real value of the
OWNER A HALF, THE CAPTAIN A FOURTH, AND ALL THE REMAINDER OF THE goods is declared
CREW THE OTHER FOURTH OF THE REWARD, IN PROPORTION TO THEIR - declaration made by the shipper stating an amount bigger than $500 per
RESPECTIVE SALARIES, IN THE ABSENCE OF AN AGREEMENT TO THE CONTRARY. package will make the carrier liable for such bigger amount but only if the
THE EXPRESS OF SALVAGE, AS WELL AS THE REWARD FOR SALVAGE OR amount so declared is the real value of the goods
ASSISTANCE, SHALL BE A CHARGE ON THE THINGS SALVAGED ON THEIR VALUE.
Right to discharge dangerous cargo
COGSA (CARRIAGE OF GOODS BY SEA ACT) - COGSA allows the carrier to discharge the good of the carrier discovers that
- Adopted by the Philippines on October 22, 1936 through the goods are dangerous, inflammable or are explosives
Commonwealth Act No. 65