Chapter 7 to 9
remuneration or hire.
Aircraft & Civil Aviation
 Civil aviation is governed by RA 9497 or
Civil Aviation Authority Act of 2008 and
the Civil Aviation Regulations issued by
Civil Aviation Authority of the Phil.
(CAAP)
 Warsaw Convention applies to
liabilities of carriers in international
transportation by air.
 Chicago Convention also applies in this
jurisdiction.
Aircraft Registration
 Requirements for aircraft registration:
1. Aircraft is owned or leased to a
citizen or corporation or
association organized under PH
laws at least 60% of capital is
owned by PH citizens.
2. Aircraft is not registered under
the laws of any foreign country
Conveyances & Encumbrances
 All conveyances which affects title to or
interest in any PH registered aircraft or
any portion thereof shall be registered
with the CAAP
 CAAP is given sole authority to register
aircraft and liens, mortgages or other
interests in aircraft engines.
Air Transportation
 Air commerce refer to scheduled or
non-scheduled air transport services
for pay or hire, the navigation of
aircraft in furtherance of a business,
the navigation of aircraft from one
place to another for operation in the
conduct of business or an aircraft
operation involving the transport of
passengers, cargo or mail, for
Persons Involved in Air Transportation
 Air carriers or operator refers to a
person who undertakes, whether
directly or indirectly, or by a lease or
any other arrangements, to engage in
air transportation services or air
commerce.
 Those engaged in the economic
aspects of air transportation such as
General Sales, Cargo Sales Agents,
Charterers, Air Freight Forwarders, Off-
Line Carriers, & Air Taxi Operators.
Charter of Aircraft
 Charter flight means air transportation
by an air carrier where the entire
capacity of one or more aircraft, or less
than the entire capacity of an aircraft,
has been engaged for the movement of
persons & their personal baggage or for
the movement of property on a time
mileage, or trop basis.
Sovereignty & Air Freedoms
 Ever State has complete and exclusive
sovereignty over the airspace above its
territory. Consent is needed for other
States to operate within the territory of
another.
 Chicago Convention requires
governments to enter into a bilateral
treaty defining air traffic rights each
grants during life of treaty. Contract is
known as Air Services Agreement.
Obligations of Carrier in Air
Transportation
 Extraordinary Diligence – includes
obligation to ensure that aircraft is
airworthy, that the vessel has
 competent captain and crew and that
they exercised extraordinary diligence
in operation the aircraft.
 CC is deemed remiss in extraordinary
diligence if plane did not take
designated route.
Airworthiness & Tariff System
 Aircraft must be fit to transport goods
& passengers & must be able to
withstand the rigors of flight.
 Tariff is a rule or condition of air travel
that regulates and binds the airline &
passengers. Imposed by the Civil
Aeronautics Board and are provided in
the tickets.
Care of Baggage
Air carriers were held liable in the following
cases:
1. Baggage were damaged or
contents were lost or stolen;
2. Baggage was transported or
diverted to another place;
3. Off-loading of baggage;
4. Delay in the delivery of baggage;
5. Baggage was lost.
Duty of Passengers
 Airlines are required to be more
accommodating towards customers,
passengers & general public.
 Airlines were held liable for Breach of
Contract and moral damages in the
following cases:
1. Inattention to and lack of care
for the interest of passengers &
inordinate delay in addressing
complaints or claims;
2. Rude & discourteous
treatment;
3. Failure to provide
accommodation & assistance to
stranded passengers;
4. Cancellation of confirmed
reservation or downgrading to
another class;
5. Forcible ejecting a passenger
from a seat & transferring him
to another;
6. Off-loading of passengers
before final destination;
7. Bumping off or refusal to accept
passengers with confirmed
tickets because of erroneous
entries in tickets, lack of
indorsement or preference to
others;
8. In case of cancellation due to
typhoon, passenger was
harangued an prevented from
boarding replacement flight.
Physical Injuries, Downgrading,
Upgrading
 Airline personnel failed to properly
latch the door of a serving car that
swung open to take off and struck a
passenger’s knee or suitcase fell off
from overhead luggage hitting
passenger’s head
 There is breach of contract if
passenger’s seat accommodation was
downgraded or upgraded.
Delay, Diversion of Flight, Rude
Treatment, Overbooking
 Delay/Diversion of flight due to FE does
not terminate contract. CC must inform
passengers of consequences of delay
so that they can make arrangements.
 CC may be held liable for rude &
discourteous treatment of passengers
by crew, airport and branch offices
staff.
 Passengers were not issued boarding
passes and were made to sit at folding
chairs intended for crew indicating that
flight was overbooked.
Engine Malfunction, Denied Boarding
 If as a result of Engine Malfunction,
airline is unable to ferry passengers to
original contracted route, it has a duty
to carry them to destination at most
convenient route possible.
 Air carrier is duty bound to accept
passengers with confirmed tickets if he
presents himself on time at airport,
otherwise AC is liable for breach of
contract.
 Overbooking not exceeding 10% of
seating capacity is not considered
deliberate and willful act of non-
accommodation.
Warsaw Convention
 Warsaw Convention applies to all
international transportation of
persons, baggage of goods performed
by an aircraft gratuitously or for hire.
 Purpose is to provide uniformity of
rules governing claims from
international air travel.
Inspection of Aircraft & Cargo
 Airlines are authorized to open &
investigate suspicious packages in the
presence of owner/shipper. If he
refuses, airline may refuse loading.
 Hand carried luggage are subject to
search and refusal to submit shall be a
ground for denial board aircraft.
 CAAP Director General is authorized to
inspect aircraft and to detain it if it is
not airworthy, airman is not physically
or mentally fit or operation would
cause imminent danger to persons or
property on the ground.
International Transportation
1. The place of departure and place of
destination are within the territories of
two contracting countries regardless of
whether or not there was a break in the
transportation or transshipment.
2. The place of departure and place of
destination are within the territory of a
single contracting country if there is an
agreed stopping place within a territory
subject to the sovereignty. Mandate or
authority of another power even
though the power is not a party to the
Convention.
When Carrier is Liable
1. Carrier is liable if passengers’ injury was
inflicted on board the aircraft, while
embarking or disembarking, or when
there was delay.
2. For checked baggage, carrier is liable if
damage occurred during air
transportation or when there is delay.
Limit of Liability
 For injuries to passengers, limit is
250,00 francs unless they agree to a
higher limit.
 As to cargoes & baggage, limit is 250
francs per kilogram, unless passengers
made a special declaration of interest
and has paid a supplementary sum,
carrier will be liable for sum not
exceeding declared sum, unless he
proves that sum exceeded actual value
to consignor at delivery.
 As to checked in baggage, limit is 5000
francs per passenger.
Defenses in Limit of Liability
Limit of liability is not applicable to:
1. Willful misconduct;
2. Gross negligence;
3. Absence of baggage check;
4. If there was waiver on part of carrier;
5. If the carrier is estopped from invoking
the provisions on limit of liability.
Tort Liability
 The Warsaw Convention does not
preclude the application of Civil Code &
other local laws.
 Complaint for quasi delict can still be
filed even if it is beyond prescriptive
period under the Convention but
within the 4-year prescriptive period
under the Civil Code.
e.g. damage to baggage covered by 2-
year prescription of Convention while
humiliation caused by airline employee
covered by tort
Notice of Claim
Under WC, complaint must be filed within:
1. Three (3) days receipt of baggage;
2. Seven (7) days from receipt of
goods;
3. Fourteen (14) days, in case of delay,
counted from the time the baggage
was placed at the disposal of the
passenger.
 Notice of claim is a condition precedent
to a right of action against AC for loss
of damage of goods.
Prescription
 Right to damages shall be extinguished
if an action is not brought within two
(2) years, reckoned from date on which
aircraft ought to have arrived, or from
the date on which the carriage
stopped.
 Two-year limitation is an absolute bar
to the suit.
Passenger Ticket
 WC provides for the basic contents of
passenger ticket, baggage, check &
airway bill
 Non-compliance with the mandatory
provisions on formality may result in
the non-application of the limit of
liability.
Chapter 10, 11, 13, 17, 2
Maritime Law
 Maritime law is the system of law
which relates to the affairs and
business of the sea, to ships, their
crews an navigation, and to marine
conveyance of persons & property.
 The primary law on maritime
commerce is the Civil Code provisions
on common carriers. The Code of
Commerce and special laws apply
suppletorily.
Special Laws, Treaties, Conventions
 Book II of the Code of Commerce, Act
No. 2616 known as Salvage Law, CA No.
65 known as Carriage of Goods by Sea
Act, P.D. 1521 known as Ship Mortgage
Decree of 1978
 Treaties such as the UNCLOS,
International Convention for Safety of
Life at Sea (SOLAS 1974) and Tonnage
Convention 1969
Real & Hypothecary Nature
 As evidence of the real nature of
maritime law are (1) the limitation of
liability of the agents to the actual
value of the vessel and freight money,
(2) right to retain the cargo and the
embargo and detention of the vessel
even in cases where or ordinary civil
 law will not allow more than a personal
action against debtor.
 The real nature of maritime law
according to which the liability of the
parties is limited to a thing which is at
the mercy of the waves.
“No vessel, No liability”
 The shipowner’s liability is merely co-
extensive with his interest in the
vessel such that a total loss of the
vessel results in its extinction. The
total destruction of vessel
extinguishes maritime liens because
there is no longer any res to which it
can attach.
 Vessel is hypothecated for such
obligations or which stands as
guaranty for their settlement.
Shipowner Entitled to Limited Liability
 It is the shipowner who is entitled to
the benefit of limited liability.
 Charterer cannot invoke limited
liability rule against owner of the
vessel. Dominion over vessel remains
with the shipowner.
Exceptions
1. Where the injury or death to a
passenger is due to either the fault of
the shipowner or the concurring
negligence of the shipowner and
captain;
2. The vessel is injured;
3. In Workmen’s Compensation;
4. Liability to owner to pay cost of
repairs before its loss;
5. Where unseaworthiness is due to
fault of shiponwer alone or with
captain
6. Passengers are beyond carrying
capacity of vessel;
7. Sinking of vessel was due to
unseaworthiness because of
excessive amount of cargo on deck.
Burden of Proof
 To limit its liability to amount of
insurance proceeds, carrier has the
burden of proving that the
unseaworthiness of the vessel was
not due to its failure or negligence.
 Limited liability rule does not apply
insurance claims
 Abandonment of the vessel its
appurtenances & freightage is an
indispensable requirement before
the shipowner can enjoy the benefits
of limited liability principle. If he did
not abandon, he is still liable beyond
the value of the vessel.
Procedure of Enforcement
 The claimants or creditors are limited
in their recovery to the remaining value
of accessible assets. These are
insurance proceeds and pending
freightage for the voyage.
 All claims shall be collated and shall be
satisfied completely or pro-rata from
the insurance proceeds and freightage.
Protest
 Protest is the written statement by the
master of a vessel attested by the
proper officer or notary, to the effect
that damages were suffered by the
ship.
 Protest is required in 1) when vessel
makes arrival in distress, 2) when the
vessel is shipwrecked, 3) when the
cargo has gone through a hurricane
and the captain believes that the cargo
has suffered damages, 4) maritime
collision.
Admiralty Jurisdiction
 RTC has jurisdiction where demand or
claim exceeds Php300,000.00 or
Php400,000.00 in Metro Manila
 Test in determining whether contract is
within admiralty and maritime
jurisdiction
A. Locational Test – contract is made
upon the sea and to be executed
thereon
B. Subject Matter Test – nature and
subject matter of contract refers to
maritime service and transactions
Marine Insurance
 Sec. 14 of Domestic Shipping
Development Act of 2004 requires
mandatory insurance coverage for
passengers to meet the financial
responsibility of carrier for breach of
contract.
 Ship operators are required to secure
insurance coverage for maritime
accidents under Marina MC 09-18 &
09-21.
 Survivorship insurance of Php50K is
over and above hospitalization
expenses for burial, travel, food,
clothing, transfer & lodging
Vessel
 Ship or vessel is any kind, class or type
of craft or artificial convenience
capable of floating in water, designed
to be used, or capable of being used as
a means of water transport in the
domestic trade for the carriage of
passengers or cargo or both utilizing its
own motive power or that of another.
 Small watercrafts are not
contemplated in the Code of
Commerce; MARINA regulate these
vessels.
Kinds of Vessels
1. Passenger ship that carry more
than 12 pax;
2. Cargo Ship is not a passenger ship;
3. Tanker cargo ship contructed for
the carriage in bulk of liquid
cargoes of inflammable nature
4. Fishing Vessels used for catching
fish & other sea resources
5. Nuclear Ship provided with nuclear
plant
6. Nuclear ship the keel of which is
laid or which is at similar stage of
construction on or after effectivity
of SOLAS 1974
7. Existing ship which is not new ship
Vessel as Personal Property
 Vessels are personal property under
Art. 416 of the Civil Code and Art. 585
of the Code of Commerce
 Chattel Mortgage of vessels need to be
registered in Registry of Deeds
 Vessels under jurisdiction of MARINA
can be transferred only with approval
of said agency and buyer must secure
Certificate of Philippine Registry and
Certificate of Ownership from MARINA
 Acquisition of vessel must be in written
instrument and recorded in registry of
vessels.
Acquisition of Vessels through
Prescription
Requisites of Acquisition of Vessels
through Prescription:
1. Person who claims ownership must be
in continuous possession
2. Possession must be for a period of
three years with recorded just title;
3. Possession must be in good faith and in
concept of owner.
 In the absence of any of the foregoing,
continuous possession of 10 years is
needed.
Nationality of the Vessel
 Vessels that are duly registered in the
Philippines are considered to possess
Philippine Nationality within the
contemplation of the UNCLOS
 Flags of Convenience – instance when
countries may allow registration of
vessels belonging to nationals of other
countries even if there is no genuine
link between State & Ship
 Vessels are now registered with
MARINA. Sale of vessel is not binding to
3rd persons unless the same is
registered.
Ship’s Manifest
 Vessels are required to carry manifest
which is a declaration of the entire
cargo.
 Object manifest is to provide customs
officers with a list to check against or to
inform revenue officers what goods are
being brought into a port.
 Passenger Manifest is required for
passenger ships and should be
available before it leaves port.
Cabotage and Ship Repair
 Right of Cabotage is the right of foreign
vessels to engage in coastwise
shipping, that is to provide service from
one place to another place in the
Philippines.
 Ship repairers are liable to ship owners
for any damage cause to the vessel
while undergoing repairs.
Persons who take part in Maritime
Commerce
Liability of Shipowner and Ship Agents
 Shipowner is the person primarily liable
for damages sustained in the operation
of the vessel.
 The term “naviero” was construed to
include shipowner, ship agent, and
even the charterer who is considered
owner pro hac vice.
Liability of Ship Agent
Ship Agent – person entrusted with the
provisioning of the vessel or who
represents her in the port which she
happens to be.
 Extent of liability – joint and several
liability applies to both for breach
of contract and extra contractual
obligations such as tort.
 Both shipowner/ship agent are
liable for supplies that furnished
the ship.
 Shipowners are liable for the
conduct or lack of skill of captain
and crew.
Act in Excess Authority
 If captain acted in excess authority,
shipowner is not liable unless proceeds
redounded to the benefit of the vessel.
 If cause of action is for quasi delict,
there is vicarious liability on the
shipowner under Art. 2180 of NCC.
Liability is direct, primary and solidarily
with the employee.
Powers and Functions of Ship Agent
 A ship agent is one that provisions or
represents the vessel. The ship agent
can enter into contracts with the
provision of the ship. He can purchase
supplies necessary for the voyage.
 Representation of the vessel includes
right to represent the vessel in any
court or tribunal.
Discretion of Captain/Master
 A ship’s captain must be given a
reasonable measure of discretionary
authority to decide for the safety of
ship and its crew.
 The captain has control of all
departments of service in the vessel,
and reasonable discretion as to its
navigation.
 In the navigation of the vessel, the
master must be left to exercise his own
best judgement.
Pilotage
 A pilot is a person duly qualified, and
licensed, to conduct a vessel into or out
of ports, or in certain waters.
 States possessing harbors require
vessels approaching their ports to take
on board pilots licensed under the law.
 A pilot is personally liable for the
damages caused by his own negligence
to the shipowners and to 3rd parties for
the damages sustained in a collision.
Negligence of pilot constitutes
maritime tort.
Captains & Masters of Vessels
 Captains are those who govern vessels
that navigate the high seas or ships of
large dimension although they are
engaged in coastwise trade.
 Masters are those who command
smaller ships engaged exclusively in
coastwise trade. Person who has
command of the ship.
 Captain has 3 roles: agent of the
shipowner, he is commander &
technical director of the vessel and he
is the representative of the country
under whose flag he navigates.
Officers & Crew of Vessels
 The complement of a vessel includes all
persons on board from the captain the
cabin boy, necessary for the
management, maneuvers, and service
of the vessel, excluding the passengers
or persons transported.
 Seafarer is any person employed,
engaged or works in in board ships,
whether or not ships is engaged in
domestic or overseas trade.
Other Officers & Crew
 Under the Code of Commerce, the
following also take part in maritime
commerce:
1. Sailing Mate – 2nd chief of the
vessel, next to the captain
2. Second mate
3. Marine engineer
4. Crew
5. Supercargoes
Collisions
 Collision is an impact or sudden contact
of a vessel moving body with another
whether both are in motion or one
stationary.
 Strictly speaking, collision refers to the
contact of two moving vessels. If one
vessel is moving while the other is
stationary, it is called “allision”
Zones in Collision
 1st Division – covers all the time up to
the moment when the risk of collision
may be said to have begun.
 2nd Division – covers the time between
the moment when the risk of collision
 begins and moment when it has
become a practical certainty.
 3rd Division – covers the time of actual
contact.
Error in Extremis
 In the 1st zone, no rules apply.
 In the 2nd zone, the burden is on the
vessel required to keep away & avoid
the danger.
 3rd zone is where error in extremis
occurs.
 The rule is, the vessel which has forced
the privileged vessel into danger is
responsible even if the privileged
vessel has committed an error within
that zone.
Laws in Collision
1. Art. 2176 of NCC on quasi-delicts
2. Provision of Code of Commerce on
Collision
3. International Regulations for
Preventing Collisions at Sea (COLREGS)
 Liability in collision cases is still
negligence based. Person who caused
the injury is both liable civilly and
criminally.
Art. 829 Code of Commerce
In the cases above mentioned the civil
action of the owner against the person
causing the injury as well as the criminal
liabilities, which may be proper, are
reserved.
 In determining negligence, it is still
required to determine if a reasonable
man with the same expertise what the
party in question did under the same
circumstance.
Contributory Negligence and Last Clear
Chance
 Cannot be applied in collision cases
because Art. 827 of Code of Commerce.
 If both vessels were negligently
operated, it does not matter if the
other has least clear chance of avoiding
the injury because Art. 827 provides
that each must suffer its own damage
if both are negligent.
 Proof that plaintiff was negligent will
bar recovery from defendant in
collision cases if plaintiff’s negligence is
mere contributory.
Both Vessels at Fault
 Art. 827 provides that if the collision is
imputable in both vessels, each one
shall suffer its own damage, and both
shall be solidarily liable for the losses
and damages occasioned to their
cargoes.
 When it comes to damages it their
respective vessels, the losses rest
where they fall. As to the damages to
the cargoes, ship owners/agents are
liable to the shippers. There will be no
appointment of liability.
Party at Fault Cannot Be Determined
 Under Art. 828 of CC, each party shall
also bear in his own damage in cases
which it cannot be determined which
of the two vessels caused the collision.
They are also solidarily responsible for
the losses & damages occasioned to
their cargoes.
 Applicable to cases to where it is
obvious that only one was at fault but
the proof does not show which.
Case is Fortuitous Event/ Third Vessel at  Art. 837. The civil liability incurred by
Fault the shipowners in the case prescribed
in this section, shall be understood as
 If a vessel should collide with another
limited to the value of the vessel with
through fortuitous event, each vessel
all its appurtenance and freightage
and its cargo shall bear its own
earned during the voyage.
damages.
 Art. 831 provides that if a vessel should Carriage of Goods by Sea
be forced by a 3rd vessel to collide with
 The NCC is the primary law on goods
another, the owner of the 3rd vessel
that are transported from foreign port
shall indemnify the losses and damages
to Ph while COGSA remains a
caused, the captain thereof being civilly
suppletory law.
to owner.
 The term “goods” includes wares,
Art. 835 merchandise & articles of every kind
but does not include live animals and
 Art. 835. The action for recovery of
cargoes.
losses and damages arising from
 The carrier & shipper are given their
collisions cannot be admitted if a
respective rights & obligations under
protest or declaration is not presented
COGSA. Carrier includes charterer who
within 24hrs before the competent
enters a contract of carriage with
authority of the point where the
shipper.
collision took place, or that one of the
first port of arrival of the vessel, if in Obligations of Carrier under COGSA
Philippine territory, and to the consul
1. The obligation to use due care with
of RP if it occurred in a foreign country.
respect to the cargo.
Art. 836 2. The obligation to provide a seaworthy
vessel at the beginning of the voyage.
With respect to the damages caused to
 Contracts of carriage covered
persons to the cargo, the absence of
by COGSA are evidenced by a
protest may not prejudice the persons
Bill of Lading or any similar
interested who were not on board or were
document of title.
not in a condition to make known their
 Bill of Lading shall be prima
wishes.
facie evidence of receipt by the
 Collision is one of the cases where carrier of goods.
protest is necessary. Protest is
Notice of Claim & Prescriptive Period
mandatory to bring action for
damages.  Notice of claim must be made within 3
 Protest is excused (1) persons days from delivery if damage is not
interested were not on board, (2) apparent. Period is not mandatory.
persons interested were not in the  Prescriptive period of 1 year from
condition to make known their wishes. delivery of the filing of the case is a
condition precedent or mandatory. 1-
Limited Liability Rule
 year prescriptive period does not apply 16. Latent defects not discoverable by
to misdelivery or conversion. due diligence; and
17.
Exemption from Liability (Section 4, 2 of
18. Any other cause without the actual
COGSA)
fault and privity of carrier and
 Neither the carrier nor the ship shall be without the fault or neglect of the
responsible for the loss or damage agents or servants of carrier.
arising from:
Limit on Value of Goods
1. Act, neglect, default of the master,
mariner, pilot, or the servants of  Shipper is only allowed to recover
the carrier in the navigation or US$500.00 per package unless there is
management of the ship; a special declaration on real value of
2. Fire, unless caused by actual fault goods.
or privity of carrier;  While declaration in bill of lading is
3. Perils, dangers, and accidents of prima facie evidence of the value of
the sea or other navigable water; goods, carrier may be allowed to prove
4. Act of God; real value which may be less than
5. Act of war; declared amount.
6. Act of public enemies;
Right to Discharge Dangerous Cargo
7. Arrest or restraint of princes, rulers,
or people or seizure under legal  COGSA allows carrier to discharge
process; goods if carriers discover that the
8. Quarantine restrictions; goods are dangerous, inflammable, or
9. Act or omission of the shipper or are explosives. This is subject to the
owner of the goods, his agents or condition that the carrier did not give
representatives; its consent to the carriage of cargoes of
10. Strikes or lockouts or stoppage or such nature.
restraint of labor from whatever
cause, whether partial or general:
Provided that nothing herein
contained shall be construed to
relieve a carrier from responsibility
for the carrier’s own acts;
11. Riots and civil commotions;
12. Savings or attempting to save life or
property at sea;
13. Wastage in bulk or weight or any
other loss or damage arising from
inherent defect, quality of vice
goods;
14. Insufficiency of packing;
15. Insufficiency or inadequacy of
marks;