TRANSPORTATION LAW

COURSE OUTLINE
Atty. Winston M. Ginez

I. PRELIMINARY CONSIDERATIONS
A. Governing Laws
1. New Civil Code
2. Warsaw Convention
3. Code of Commerce
4. Carriage of Goods by Sea Act
5. Salvage Law
6. Public Service Act
7. Article XII, Sec. 11 on operation of public utility
B. Concept of public Utility & public service (Sec. 13, Public Service Act)
C. Constitutional limitations on operation of public utilities (Art. XII, 1987 Constitution)
D. Regulatory Agencies
E. Concept of franchise and certificate of public convenience
CASES:
1. National Development Company vs. CA, August 19, 1998;
2. Tatad vs. Sec. Garcia, April 16, 1995;
3. Radio Communication of the Phils, Inc. NTC, 150 SCRA 450

II. GENERAL CONCEPTS

A. Contract of Transportation in general
B. Perfection 
C. Common Carrier 
1. statutory definition (Art. 1732, NCC)
2. distinguished from private carrier
3. distinguished from towage, arrastre and stevedoring
4. tests to determine common carrier
5. Parties to the contract of carriage
D. Registered owner rule and Kabit System
CASES:
1. Spouses Dante Cruz and Leonora Cruz vs. Sun Holidays, Inc., G.R. No. 186312,
June 29, 2012;
2. A.F Sanchez Brokerage, Inc. vs. CA G.R. No. 147079, December 21, 2004;
3. Crisostomo vs. CA, August 25, 2003, GR No. 138334;
4. De Guzman vs. CA, Dec. 12, 1988;
5. First Phil. Industrial Corp. vs. CA, Dec. 29, 1998;
6. Erezo vs. Jepte, Sept. 30, 1957;
7. Lim vs. CA, Jan. 16, 2002;
8. Lita Enterprises vs. IAC, April 27, 1984;
9. Teja Marketing vs. IAC, 148 SCRA 347;
10. Nostradamus Villanueva vs. Domingo, G.R. No. 144274, September 20, 2004;
11. Spouses Hernandez et al vs. Spouses Dolor et al, GR No. 160286, July 30, 2004;
 12. FEB Leasing and Finance Corporation (now BPI Leasing Corp.) vs. Sps. Sergio P.
Baylon and Maritess Villena Baylon, et al., G.R. No. 181398, June 29, 2011);
13. Spouses Teodoro and Nanette Perena v. Spouses Nicolas and Teresita L. Zarate,
G.R. No. 157917, August 29, 2012

III. OBLIGATIONS OF THE COMMON CARRIER IN A CONTRACT OF

CARRIAGE OF GOODS
A. Vigilance over the goods
1. Duty to exercise extraordinary diligence (Art. 1733, NCC, Article 363, 364 & 365, CC) 
2. Presumption of negligence (Art. 1735, NCC)
3. Duration of liability (Art. 1736, 1737 & 1738, NCC)
4. Defenses of common carriers (Art. 1734, 1739, 1740, 1742, & 1743)
a. fortuitous event (Art. 1739, NCC)
b. public enemy (Art. 1739, NCC)
c. improper packing (Art. 1742, NCC)
d. order of public authority (Art. 1743, NCC)
5. Contributory negligence of the shipper (Art. 1741, NCC)
6. Stipulation limiting liability of carrier (Art. 1744, 1748, 1749 & 1750 NCC)
a. Requisites (Art. 1744, 1751, NCC)
b. invalid stipulations (Art. 1745, NCC)
c. effect of delay (Art. 1747, NCC)
d. rule on presumption of negligence despite stipulation (Art. 1752, NCC)
B. Other obligations
1. Duty to accept goods 
a. Grounds for valid refusal to accept goods
2. Duty to deliver goods
a. Time of delivery (Art. 358, CC)
b. Consequences of delay (Art. 1740 & 1747, NCC; Art. 370-374, CC)
c. Place of delivery (Art. 360, CC)
d. To whom delivery shall be made (Art. 368 & 369, CC)
CASES:
1. Delsan Transport Lines, Inc. vs. American Home Insurance, G.R. No. 149019, 15
August 2006;
2. Sarkies Tours Phils vs. CA, Oct. 2, 1997;
3. Tabacalera Insurance vs. North Front Shipping, May 16, 1997;
4. Macam vs. CA, Aug. 25, 1999;
5. Samar Mining Company vs Nordeutscher Lloyd, et al., Oct. 23, 1984;
6. Servando vs. Phil. Steam Navigation, Oct. 23, 1982;
7. Edgar Cokaliong Shipping Lines vs. UCPB General Insurance Company, June 25,
2003;
8. Eastern Shipping Lines vs. IAC, 150 SCRA 469; Bascos vs. CA, Apr. 7, 1993;
9. Ganzon vs. CA, May 30, 1988;
10. Philamgen vs. MCG Marine Services, March 8, 2002;
11. Calvo vs. UCPB General Insurance 379 SCRA 510;
12. Belgian Overseas Chartering vs. Phil. First Insurance Co., 383 SCRA 23
IV. OBLIGATIONS OF THE COMMON CARRIER IN A CONTRACT OF
CARRIAGE OF PASSENGERS
A. Safety of Passengers
1. Duty to observe utmost diligence (Art. 1755, NCC)
2. Duration of liability
3. Presumption of negligence (Art. 1756, NCC)
4. Liability for acts of employees (Art. 1759, NCC)
5. Liability for acts of strangers (Art. 1763, NCC)
6. Effect of stipulation on liability (Art. 1757, 1758,1760, NCC)
B. Passenger's Baggages (Art. 1754, 1998, 2000 to 2003, NCC)
C. Relevant provisions of the Warsaw Convention
1. Binding Effect of the Warsaw Convention
2. Categories of International Air Transportation
3. Liability under the Convention
CASES:
1. Aboitiz Shipping Corporation vs. CA, 179 SCRA 95;
2. Dangwa Transportation vs. CA, 202 SCRA 574;
3. LRT vs. Navidad, Feb. 6, 2003;
4. La Mallorca vs. CA, July 27, 17 SCRA 739;
5. Japan Airlines vs. CA, Aug. 7, 1998;
6. Phil. Airlines vs. CA, 226 SCRA 423;
7. Gacal vs. PAL, 183 SCRA 189;
8. Fortune Express, Inc. vs. CA, March 18, 1999;
9. Pilapil vs. CA, Dec, 22, 1989;
10. Maranan vs. Perez, 20 SCRA 412;
11. Singapore Airlines vs. Andion Fernandez, 10 December 2003;
12. Fortune Express vs. CA, March 18, 1999;
13. Bachelor Express vs. CA, July 31, 1990;
14. De Gillaco vs. Manila Railroad Company, G.R. No. L-8034, Nov. 18, 1955;
15. Cathay Pacific Airways vs. CA, March 5, 1993; Mapa vs. CA, July 8, 1998

V. OBLIGATIONS OF THE SHIPPER, CONSIGNEE AND PASSENGER

A. Effect of negligence of shipper or passenger (Art. 1741, 1761, 1762, NCC)
B. Payment of freight (Art. 374 & 375, CC)
C. Liability for demurrage
CASES:
1. Isaac vs. A.L. Ammen Transportation, 101 Phil 1046;
2. Compania Maritima vs. CA, Aug. 29, 1988; PNR vs. CA, Oct. 4, 1985

VI. EXTRAORDINARY DILIGENCE

A. Underlying Reason
B. Effect of Stipulation (Art. 1744, 1757, 1758, & 1760, NCC)
C. Extraordinary diligence in carriage by sea
1. Seaworthiness of the vessel (Sec. 3 [1] & [2] COGSA; Sec. 116 & 119, IC; Art.
609, CC)
 2. Overloading
3. Proper Storage
4. Obligation of captain and crew
5. Rule on deviation and transshipment (Art. 359, CC)
D. Extraordinary diligence in carriage by land
1. Vehicle's condition
2. Traffic Rules (See relevant provisions of RA 4136)
3. Obligation to Inspect
E. Extraordinary diligence in carriage by air
CASES:
1. Standard Vacuum Oil vs. Luzon Stevedoring, April 18, 1956;
2. Planters Products, Inc. vs. CA, Sept. 15, 1993;
3. Mecenas, et al. vs. CA, 180 SCRA 83;
4. Brinas vs. People of the Phils., Nov. 25, 1983;
5. BLTB vs. IAC, Nov. 14, 1988;
6. Batangas Transportation Company vs. Caguimbal, et al, Jan. 24, 1968;
7. Mallari vs. CA, Jan. 31, 2000;
8. Nocum vs. Laguna Tayabas Bus Company, Oct. 31, 1969;
9. PAL vs. CA, Sept. 15, 1993;
10. Vda. De Abeto vs. PAL, July 30, 1982;
11. Japan Airlines vs. Michael Asuncion et al, G.R. No. 161730, January 28, 2005
VII. BILL OF LADING AND OTHER FORMALITIES

A. Definition of bill of lading

A bill of lading is a written acknowledgement, signed by the master of a vessel or
other authorized agent of the carrier, that he has received the goods from the shipper, to
be transported on the expressed terms, to the described place of destination and to be
delivered there to the designated consignee or parties.

An instrument in writing, signed by the carrier or his agent, describing the

freight so as to identify it, stating the name of the consignor, the terms of the contract of
carriage, and agreeing or directing that the freight to be delivered to the order or
assigns of a specified person at a specified place.

B. Classes of bill of lading

a. Negotiable or non-negotiable
b. Clean bill of lading or foul bill of lading
c. On board bill or received for shipment bill
d. Spent bill of lading
e. Through bill of lading
f. Custody bill of lading
g. Port bill of lading

 Clean bill of lading or foul bill of lading

Clean bill of lading – one that does not contain any notation indicating any defects in
the goods
Carrier declaring that the goods have been received in good condition and without any
defect

foul bill of lading- one that contain any notation indicating any defects in goods

 Spent bill of lading

If the goods were already delivered but the bill of lading was not returned, the bill of
lading is called a “spent bill of lading”

 Through bill of lading

One issued by the carrier who is obliged to use the facilities of other carrier as well as
his own facilities for the purpose of transporting the goods from the city of the seller to
the city of the buyer, which bill of lading is honored by the second and other interested
carriers who do not issue their own bill of lading

 On board bill of lading v. Received for shipment bill

On board bill of lading- it is stated that the goods have been received on board the
vessel which is to carry the goods
It is issued whenever the goods have been actually placed aboard the ship with every
reasonable expectation that the shipment is as good as on its way.

Received for shipment bill of lading- one in which it is stated that the goods have been
received for shipment with or without specifying the vessel by which the goods are to
be shipped
It is issued whenever the conditions are not normal and the is insufficiency of shipping
space.

 Custody bill of lading

The goods are already received by the carrier but the vessel indicated therein has not
yet arrived in the port

 Port bill of lading

The vessel indicated in the bill of lading that will transport the goods is already in the
port.

C. Nature of bill of lading (Art. 353, 709 CC; Sec. 3[4] and [5], COGSA)

ARTICLE 353.    The legal evidence of the contract between the shipper and the carrier
shall be the bills of lading, by the contents of which the disputes which may arise
regarding their execution and performance shall be decided, no exceptions being
admissible other than those of falsity and material error in the drafting.

After the contract has been complied with, the bill of lading which the carrier has issued
shall be returned to him, and by virtue of the exchange of this title with the thing
transported, the respective obligations and actions shall be considered cancelled, unless
in the same act the claim which the parties may wish to reserve be reduced to writing,
with the exception of that provided for in Article 366.

In case the consignee, upon receiving the goods, cannot return the bill of lading
subscribed by the carrier, because of its loss or of any other cause, he must give the
latter a receipt for the goods delivered, this receipt producing the same effects as the
return of the bill of lading.

ARTICLE 709. A bill of lading drawn up in accordance with the provisions of this title
shall be proof as between all those interested in the cargo and between the latter and the
underwriters, proof to the contrary being reserved by the latter.

Carriage of goods by sea Act

4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the
goods as therein described in accordance with paragraphs (3) (a), (b), and (c) of this
section: Provided, That nothing in this Act shall be construed as repealing or limiting
the application of any part of the Act, as amended, entitled "An Act relating to bills of
lading in interstate and foreign commerce," approved August 29, 1916 (U. S. C. title 49,
secs. 81-124), commonly known as the "Pomerene Bills of Lading Act."

(5) The shipper shall be deemed to have guaranteed to the carrier the accuracy at the
time of shipment of the marks, number, quantity, and weight, as furnished by him; and
the shipper shall indemnify the carrier against all loss damages, and expenses arising or
resulting from inaccuracies in such particulars. The right of the carrier to such
indemnity shall in no way limit his responsibility and liability under the contract of
carriage or to any person other than the shipper.

1. as a contract 

a. Basic stipulations in a bill of lading (Art. 350, 707-718, CC; Sec. 4[5] COGSA

b. Prohibited stipulations (Art. 1745, NCC)

2. as a document of title (Art. 1508, 1509, 1510, 1513, 1515 NCC)

3. as a receipt

AS A CONTRACT

a. Basic stipulations in a bill of lading (Art. 350, 707-718, CC; Sec. 4[5]
COGSA

ARTICLE 350.    The shipper as well as the carrier of merchandise or goods may
mutually demand that a bill of lading be made, stating:

1.    The name, surname and residence of the shipper.

2.    The name, surname and residence of the carrier.

3.    The name, surname and residence of the person to whom or to whose order the
goods  are to be sent or whether they are to be delivered to the bearer of said bill.

4.    The description of the goods, with a statement of their kind, of their weight, and of 
the external marks or signs of the packages in which they are contained.

5.    The cost of transportation.

6.    The date on which shipment is made.

7.    The place of delivery to the carrier.

8.    The place and the time at which delivery to the consignee shall be made.

9.    The indemnity to be paid by the carrier in case of delay, if there should be any 
agreement on this matter.
ARTICLE 351.    In transportation made by railroads or other enterprises subject to
regulation rate and time schedules, it shall be sufficient for the bills of lading or the
declaration of shipment furnished by the shipper to refer, with respect to the cost, time
and special conditions of the carriage, to the schedules and regulations the application
of which he requests; and if the shipper does not determine the schedule, the carrier
must apply the rate of those which appear to be the lowest, with the conditions inherent
thereto, always including a statement or reference to in the bill of lading which he
delivers to the shipper.

ARTICLE 352.    The bills of lading, or tickets in cases of transportation of passengers,

may be diverse, some for persons and others for baggage; but all of them shall bear the
name of the carrier, the date of shipment, the points of departure and arrival, the cost,
and, with respect to the baggage, the number and weight of the packages, with such
other manifestations which may be considered necessary for their easy identification

ARTICLE 706. The captain and the freighter of the vessel are obliged to draft the bill of
lading, in which there shall be stated:

1. The name, registry, and tonnage of the vessel.

2. The name of the captain and his domicile.

3. The port of loading and that of unloading.

4. The name of the shipper.

5. The name of the consignee, if the bill of lading is issued to order.

6. The quantity, quality, number of packages, and marks of the merchandise.

7. The freight and the primage stipulated.

The bill of lading may be issued to bearer, to order, or in the name of a specific person,
and must be signed within twenty-four hours after the cargo has been received on
board, the freighter being able to request the unloading thereof at the expense of the
captain should he not sign it, and in every case indemnity for the losses and damages
suffered thereby.

ARTICLE 707. Four true copies of the original bill of lading shall be made, all of which
shall be signed by the captain and by the freighter. Of these copies the freighter shall
keep one and send another to the consignee; the captain shall take two, one for himself
and another for the agent.

There may, furthermore, be made as many copies of the bill of lading as may be
considered necessary by the persons interested; but when they are issued to order or to
the bearer there shall be stated in all the copies, be they either of the first four or of the
subsequent ones, the destination of each one, stating whether it is for the agent, for the
captain, for the freighter, or for the consignee. If the copy sent to the latter should be
duplicated there must be stated in said duplicate this fact, and that it is not valid except
in case of the loss of the first one.
ARTICLE 708. The bills of lading issued to the bearer sent to the consignee shall be
transferable by the actual delivery of the instrument; and by virtue of an indorsement,
those issued to order.

In either case, the person to whom the bill of lading is transferred shall acquire all the
rights and actions of the assignor or indorser with regard to the merchandise mentioned
in the same.

ARTICLE 709. A bill of lading drawn up in accordance with the provisions of this title
shall be proof as between all those interested in the cargo and between the latter and the
underwriters, proof to the contrary being reserved by the latter.

ARTICLE 710. Should the bills of lading not agree, and there should not be observed
any correction or erasure in any of them, those possessed by the freighter or consignee
signed by the captain shall be proof against the captain or agent in favor of the
consignee or freighter; and those possessed by the captain or agent signed by the
freighter shall be proof against the freighter or consignee in favor of the captain or
agent.

ARTICLE 711. The legitimate holder of a bill of lading who does not present it to the
captain of the vessel before her unloading, obliging the latter thereby to unload it and
place it in deposit, shall be liable for the cost of warehousing and other expenses arising
therefrom.

ARTICLE 712. The captain can not himself change the destination of merchandise. In
admitting this change at the instance of the freighter, he must first take up the bills of
lading he may have issued, under the penalty of being liable for the cargo to the
legitimate holder of the same.

ARTICLE 713. If before delivering the cargo a new bill of lading should be demanded of
the captain, it being alleged that the previous ones are not presented on account of their
loss or for any other sufficient cause, he shall be obliged to issue it, provided security for
the value of the cargo is given to his satisfaction; but without changing the consignment
and stating therein the circumstances prescribed in the last paragraph of Article 707,
when the bills of lading referred to therein are in question, under the penalty otherwise
to be liable for said cargo if not properly delivered through his fault.

ARTICLE 714. If before the vessel puts to sea the captain should die or should
discontinue in his position through any accident, the freighters shall have a right to
demand of the new captain the ratification of the first bills of lading, and the latter must
do so, provided all the copies previously issued be presented or returned to him, and it
should appear from an examination of the cargo that they are correct.

The expenses arising from the examination of the cargo shall be defrayed by the agent,
without prejudice to the right of action of the latter against the first captain, if he ceased
to be such through his own fault. Should said examination not be made, it shall be
understood that the new captain accepts the cargo as it appears from the bills of lading
issued.
ARTICLE 715. Bills of lading will give rise to a most summary action or to judicial
compulsion, according to the case, for the delivery of the cargo and the payment of the
freightage and proper expenses.

ARTICLE 716. If several persons should present bills of lading issued to bearer or to
order, indorsed in their favor, demanding the same merchandise, the captain shall
prefer in delivering the same, the person presenting the copy first issued, with the
exception of the case when the latter one was issued on account of the loss of the first
one, and if they are held by different persons.

In such case, as well as when only second or subsequent copies issued without this
proof are presented, the captain shall apply to the judge or court, so that he may order
the deposit of the merchandise, and that through him it may be delivered to the proper
person.

ARTICLE 717. The delivery of the bill of lading shall effect the cancellation of all the
provisional receipts of prior date given by the captain or his subalterns for partial
deliveries of the cargo which may have been made.

ARTICLE 718. After the cargo has been delivered, the bills of lading which the captain
signed shall be returned to him, or at least the copy by reason of which the delivery is
made, with the receipt for the merchandise mentioned therein.

The delay on the part of the consignee shall make him liable for the damages which
may be caused the captain thereby.

Carriage of goods by sea Act

(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or
damage to or in connection with the transportation of goods in an amount exceeding
$600 per package lawful money of the United States, or in case of goods not shipped in
packages, per customary freight unit, or the equivalent of that sum in other currency,
unless the nature and value of such goods have been declared by the shipper before
shipment and inserted in the bill of lading. This declaration, if embodied in the bill of
lading, shall be prima facie evidence, but shall not be conclusive on the carrier.

By agreement between the carrier, master, or agent of the carrier, and the shipper
another maximum amount than that mentioned in this paragraph may be fixed:
Provided, That such maximum shall not be less than the figure above named. In no
event shall the carrier be liable for more than the amount of damage actually sustained.

Neither the carrier nor the ship shall be responsible in any event for loss or damage to
or in connection with the transportation of the goods if the nature or value thereof has
been knowingly and fraudulently misstated by the shipper in the bill of lading.

(6) Goods of an inflammable, explosive, or dangerous nature to the shipment whereof

the carrier, master or agent of the carrier, has not consented with knowledge of their
nature and character, may at any time before discharge be landed at any place or
destroyed or rendered innocuous by the carrier without compensation, and the shipper
of such goods shall be liable for all damages and expenses directly or indirectly arising
out of or resulting from such shipment. If any such goods shipped with such
knowledge and consent shall become a danger to the ship or cargo, they may in like
manner be landed at any place, or destroyed or rendered innocuous by the carrier
without liability on the part of the carrier except to general average, if any.

b. Prohibited stipulations and limiting stipulations(Art. 1745, NCC)

Article 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy:

(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss, destruction, or deterioration
of the goods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less than that of a good
father of a family, or of a man of ordinary prudence in the vigilance over the movables
transported;

(5) That the common carrier shall not be responsible for the acts or omission of his or its
employees;

(6) That the common carrier’s liability for acts committed by thieves, or of robbers who
do not act with grave or irresistible threat, violence or force, is dispensed with or
diminished;

(7) That the common carrier is not responsible for the loss, destruction, or deterioration
of goods on account of the defective condition of the car, vehicle, ship, airplane or other
equipment used in the contract of carriage.

Limiting Stipulations

Article 1746. An agreement limiting the common carrier's liability may be annulled by the shipper
or owner if the common carrier refused to carry the goods unless the former agreed to such
stipulation.

Article 1747. If the common carrier, without just cause, delays the transportation of the goods or
changes the stipulated or usual route, the contract limiting the common carrier's liability cannot be
availed of in case of the loss, destruction, or deterioration of the goods.

Article 1748. An agreement limiting the common carrier's liability for delay on account of strikes or
riots is valid.

Article 1749. A stipulation that the common carrier's liability is limited to the value of the goods
appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.

Article 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.
 2. AS A DOCUMENT OF TITLE

2. as a document of title (Art. 1508, 1509, 1510, 1513, 1515 NCC)

Article 1508. A negotiable document of title may be negotiated by delivery:

(1) Where by the terms of the document the carrier, warehouseman or other bailee issuing
the same undertakes to deliver the goods to the bearer; or

(2) Where by the terms of the document the carrier, warehouseman or other bailee issuing
the same undertakes to deliver the goods to the order of a specified person, and such
person or a subsequent indorsee of the document has indorsed it in blank or to the bearer.

Where by the terms of a negotiable document of title the goods are deliverable to bearer or
where a negotiable document of title has been indorsed in blank or to bearer, any holder
may indorse the same to himself or to any specified person, and in such case the document
shall thereafter be negotiated only by the indorsement of such indorsee. (n)

Article 1509. A negotiable document of title may be negotiated by the indorsement of the person to
whose order the goods are by the terms of the document deliverable. Such indorsement may be in
blank, to bearer or to a specified person. If indorsed to a specified person, it may be again
negotiated by the indorsement of such person in blank, to bearer or to another specified person.
Subsequent negotiations may be made in like manner. (n)

Article 1510. If a document of title which contains an undertaking by a carrier, warehouseman or

other bailee to deliver the goods to bearer, to a specified person or order of a specified person or
which contains words of like import, has placed upon it the words "not negotiable," "non-negotiable"
or the like, such document may nevertheless be negotiated by the holder and is a negotiable
document of title within the meaning of this Title. But nothing in this Title contained shall be
construed as limiting or defining the effect upon the obligations of the carrier, warehouseman, or
other bailee issuing a document of title or placing thereon the words "not negotiable," "non-
negotiable," or the like. (

Article 1513. A person to whom a negotiable document of title has been duly negotiated acquires
thereby:

(1) Such title to the goods as the person negotiating the document to him had or had ability
to convey to a purchaser in good faith for value and also such title to the goods as the
person to whose order the goods were to be delivered by the terms of the document had or
had ability to convey to a purchaser in good faith for value; and

(2) The direct obligation of the bailee issuing the document to hold possession of the goods
for him according to the terms of the document as fully as if such bailee had contracted
directly with him. (n)

Article 1515. Where a negotiable document of title is transferred for value by delivery, and the
indorsement of the transferor is essential for negotiation, the transferee acquires a right against the
transferor to compel him to indorse the document unless a contrary intention appears. The
negotiation shall take effect as of the time when the indorsement is actually made.

3. as a receipt

D. Relevant provisions of the Warsaw Convention (Art. 17-19, 22, WC)

ART. 17. The carrier shall be liable for damages sustained in the event of the
death or wounding of a passenger or any other bodily injury suffered by a
passenger, if the accident which caused the damage so sustained took place on
 board the aircraft or in the course of any of the operations of embarking or
disembarking.

ART. 18. (1) The carrier shall be liable for damage sustained in the event of the
destruction or loss of, or of damage to, any checked baggage, or any goods, if the
occurrence which caused the damage so sustained took place during the
transportation by air.

(2) The transportation by air within the meaning of the preceding paragraph
shall comprise the period during which the baggage or goods are in charge of the
carrier, whether in an airport or on board an aircraft, or, in the case of a landing
outside an airport, in any place whatsoever.

(3) The period of the transportation by air shall not extend to any transportation
by land, by sea, or by river performed outside an airport. If, however, such
transportation takes place in the performance of a contract for transportation by
air, for the purpose of loading, delivery, or transhipment, any damage is
presumed, subject to proof to the contrary, to have been the result of an event
which took place during the transportation by air.

ART. 19. The carrier shall be liable for damage occasioned by delay in the
transportation by air of passengers, baggage, or goods.

Article 22

1. In the carriage of passengers the liability of the carrier for each passenger is
limited to the sum of 125,000 francs. Where, in accordance with the law of the
Court seised of the case, damages may be awarded in the form of periodical
payments, the equivalent capital value of the said payments shall not exceed
125,000 francs. Nevertheless, by special contract, the carrier and the passenger may
agree to a higher limit of liability.
106

2. In the carriage of registered luggage and of goods, the liability of the carrier is
limited to a sum of 250 francs per kilogram, unless the consignor has made, at the
time when the package was handed over to the carrier, a special declaration of the
value at delivery and has paid a supplementary sum if the case so requires. In that
case the carrier will be liable to pay a sum not exceeding the declared sum, unless
he proves that that sum is greater than the actual value to the consignor at delivery.
107

3. As regards objects of which the passenger takes charge himself the liability of the
carrier is limited to 5,000 francs per passenger.
108

4. The sums mentioned above shall be deemed to refer to the French franc
consisting of 65 « milligrams gold of millesimal fineness 900. These sums may be
converted into any national currency in round figures.
109

CASES:
 1. HE Heacock Company vs. Macondray, Oct. 3, 1921;
8-day Edmond Clock

2. Ong Yiu vs. CA, June 29, 1979;

Blue maleta
3. Sea-Land Service vs. IAC, Aug. 31, 1987;
 stolen by pilferers

4. Citadel Lines vs. CA, Apr. 25, 1990;

Dunhill International Cigarrete

5. Everett Steamship Corporation vs. CA, Oct. 8, 1998;

3 crates of Bus Spare parts

6. Saludo, Jr. vs. CA, 207 SCRA 498;

7. Northwest Airlines vs. Cuenca, Aug. 31, 1965;

Comissioner of Public Highways

8. Alitalia vs. IAC, Dec. 4, 1990;

9. Pan American World Airways vs. IAC, Aug. 11, 1988;
10. China Airlines vs. Daniel Chiok, July 30, 2003;
11. Santos III vs. Northwest Airlines, June 23, 1992; United Airlines vs. Willie Uy,
Nov. 19, 1999

VIII. ACTIONS IN CASE OF BREACH OF CONTRACT OF CARRIAGE

A. Causes of action and nature/extent of liability (culpa contractual, culpa aquiliana and
culpa delictual)
B. Prescriptive period and conditions precedent
1. Overland transportation of goods and coastwise shipping (Art. 366, CC)
2. International carriage of goods by sea (Sec. 3[6]
C. Recoverable Damages
CASES:
1. Fabre vs. CA, July 26, 1996;

2. PhilAmGen Insurance vs. Sweetlines 212 SCRA 194;

3. Ang vs. American Steamship Agencies, 125 SCRA 543;
4. Mitsui vs. CA, 287 SCRA 366;
5. Fil Merchants vs. Alejandro, 145 SCRA 42;
6. Mayer Steel Pipe Corp. vs. CA, 274 SCRA 432;
7. Dole Phils. vs. Maritime Company of the Phils. Feb. 27, 1987;
8. Insurance Company of North America v. Asian Terminals, Inc., G.R. No. 180784,
February 15, 2012;
9. Benjamin Cua v. Wallen Philippines Shipping, Inc., G.R. No. 171337, July 11, 2012
IX. MARITIME LAW
A. Concept of Maritime Law
B. Limited liability rule (Art. 587, 590, 643, 837, CC)
1. concept
2. exceptions to the rule
3. abandonment 
C. Vessels
1. Acquisition
a. by prescription (Art. 573 & 575, CC)
b. by sale (Art. 576-578, CC)
c. registration (Sec. 810, Tariff and Customs Code)
d. ship’s manifest (Sec. 906, TCC)
2. Mortage of vessels (See relevant provisions of the Ship Mortgage Decree or PD
1521)
D. Persons who take part in Maritime Commerce
1. Shipowners and shipagents (Art. 586-588, CC)
a. Rules in case of part-owners (Art. 589-594, CC)
b. Rules in case of shipagents (Art. 595-602, CC)
2. Captains and masters of vessels
a. Qualifications (Art. 609, CC)
b. Powers and functions (Art. 610-612, CC)
c. Discretion powers
3. Pilot
a. Concept
b. Relationship to master and shipowner
4. Officers and crew of the vessel 
E. Charter Parties 
1. Concept
2. Kinds: bareboat and contract of affreightment
3. Persons qualified to make charter
4. Requisites of a valid charter (Art. 652, CC)
5. Concept of and liability for demurrage
6. Rights and obligations of charter parties
F. Loans on Bottomry and Respondentia
1. Definition (Art. 719, CC)
2. Distinguished from ordinary loan
3. Parties to the loan
4. Formalities needed (Art. 720, CC)
5. Effect of loss of on loan (Art. 731, CC)
6. Cases where loan is regarded as simple loan (Art. 726-729, CC)
G. Averages
1. Concept (Art. 806, CC)
2. Classes of average and the persons liable
a. Simple average (Art. 809-810, CC)
b. General average (Art. 811, 812-813, 816-818, 732, 859-861, CC)
H. Collisions
 1. Definition
2. Zones in collision (see: doctrine of error in extremis)
3. Rules on liability (Art. 826-832 CC; see: doctrine of inscrutable fault)
4. Limited liability rule (Art. 837, CC)
I. Arrival under stress
1. Concept (Art. 819, CC)
2. When improper (Art. 820, CC)
3. Expenses (Art. 821-822, CC)
4. Custody of cargo (Art. 823-824, CC)
5. Captain’s liability (Art. 825, CC)
6. Rules in case of shipwreck (Art. 840-845, CC)
J. Salvage
1. Definition 
2. Rights and obligations of salvors and owners (See relevant provisions of the
Salvage Law)
CASES:
1. Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance
Corporation, 217 SCRA 359;
2. Chua Yek Hong vs. IAC, Dec. 14, 1988;
3. Monarch Insurance vs. CA, 281 SCRA 534;
4. PhilAmGen vs. CA, 273 SCRA 262;
5. Vasquez vs. CA, 138 SCRA 553;
6. Abueg vs. San Diego, 77 Phil 730;
7. Luzon Stevedoring vs. CA, Dec. 3, 1987;
8. Yangco vs. Laserna, Oct. 29, 1941;
9. Yu Con vs. Ipil, G.R. No. L-10195, Dec. 29, 1916;
10. Inter-Orient Maritime Enterprises vs. CA, 235 SCRA 267;
11. Far Eastern Shipping vs. CA, Oct. 1, 1998;
12. Caltex Phils. vs. Sulpicio Lines, Inc., 315 SCRA 709;
13. Planters Products vs. CA, 226 SCRA 478;
14. A. Magsaysay, Inc. vs. Agan, Jan. 31, 1955;
15. Macondray vs. Provident Insurance Corporation, GR No. 154305, December 9,
2004