Third Exam Final Compiled

MARCH 15, 2021
WHAT ARE PETTY AND ORDINARY AVERAGES?

AVERAGES
These are expenses or losses. And are classified into

two. Article 807. The petty and ordinary expenses of navigation,
such as pilotage of coasts and ports, lighterage and towage,
Article 808. Averages shall be: anchorage dues, inspection, health, quarantine, lazaretto,
and other so-called port expenses, costs of barges, and
1.Simple or particular. unloading, until the merchandise is placed on the wharf, and
2. General or gross. any other expenses common to navigation shall be
considered ordinary expenses to be defrayed by the
WHAT ARE CONSIDERED shipowner, unless there is a special agreement to the
EXPENSES/AVERAGES? contrary.
Article 806. For the purposes of this Code the following

shall be considered averages: These are administrative and operational expenses of
the common carrier.
1. All extraordinary or accidental expenses which may be
incurred during the navigation for the preservation of the Examples:
vessel or cargo, or both. 1. Payment for pilotage
2. Payment to the ports
2. All damages or deterioration the vessel may suffer from
3. Wharfage dues
the time she puts to sea from the port of departure until she
casts anchor in the port of destination, and those suffered 4. Tonnage fees
by the merchandise from the time it is loaded in the port of 5. Harbor fees
shipment until it is unloaded in the port of consignment. 6. Towage fees
7. Anchor inspection and health fees
1. All extraordinary or accidental expenses which may be
incurred during the navigation for the preservation of the These are borne by the shipowner because they are
vessel or cargo, or both. administrative and overhead expenses of the shipowner,
unless there is an agreement to the contrary. The ship
This is in relation to general/gross averages. owner has an agreement with another party who will
bear the expenses.
2. All damages or deterioration the vessel may suffer
from the time she puts to sea from the port of departure WHAT IS A SIMPLE AVERAGE?
until she casts anchor in the port of destination, and
those suffered by the merchandise from the time it is
loaded in the port of shipment until it is unloaded in the 1. SIMPLE OR PARTICULAR AVERAGE - It includes
port of consignment. all the expenses and damages caused to the vessel
and to her cargo or to her cargo which have not
These are periods covered: inured to the common benefit or profit of the persons
interested in the vessel and cargo. If a damage is
a. During the voyage until the ship arrives at not a general average, it is considered as a
the point of destination particular average.
b. As to cargoes, from the time they are loaded
until they are unloaded at the point of One of the salient or significant factors as a
consignment/destination distinction between a simple and particular average
and general and gross average is who will bear the
expenses.
ALBERT| ALCANTARA| ALCORAN| ALCROAN | AMPATUAN |CAPIN| CEROS| EGINA| GARCIA | 1

HUGO | LIU | LOQUIAS| MASAPOL | NAMOC | NAVARRO | PLAZA | REYES | ZAPANTA
A simple and particular average is borne by the ship 4. The wages and victuals of the crew when the
owner if it pertains to the vessel or to the shipper if it vessel should be detained or embargoed by a
pertains to the cargo. It pertains to the owner of the legitimate order or force majeure, if the charter
goods that did not inure the benefit. should have been for a fixed sum for the voyage.
5. The necessary expenses on arrival at a port, in
order to make repairs or secure provisions.
The rules in simple and particular average is 6. The lowest value of the goods sold by the captain
consistent with the maxim res perit domino meaning in arrivals under stress for the payment of
owner bears the loss. provisions and in order to save the crew, or to
cover any other requirement of the vessel against
which the proper amount shall be charged.
Article 732. Lenders on bottomry or respondentia shall
7. The victuals and wages of the crew during the time
suffer in proportion to their respective interest, the general
the vessel is in quarantine.
average which may take place in the goods on which the
8. The damage suffered by the vessel or cargo by
loan was made.
reason of an impact or collision with another, if it
were accidental and unavoidable. If the accident
In particular averages, in the absence of an express
should occur through the fault or negligence of the
agreement between the contracting parties, the lender on
captain, the latter shall be liable for all the damage
bottomry or respondentia shall also contribute in
caused.
proportion to his respective interest, should it not belong to
the kind of risks excepted in the foregoing article. 9. Any damage suffered by the cargo through the
faults, negligence, or barratry of the captain or of
the crew, without prejudice to the right of the owner
However under Article 732 of the Code of Commerce, if to recover the corresponding indemnity from the
the vessel or good is hypothecated by a loan on captain, the vessel, and the freight.
bottomry or respondentia, the lender shall also bear the
loss in proportion to his interest. 2. GENERAL OR GROSS AVERAGE - This is more
important. The law of general average is a legal
In loans on respondentia, the collateral shall be the principle of maritime law according to which all the
cargo. If the cargo is lost then the lender will no longer parties in a sea venture proportionally share any
be paid. If the cargo was saved, the buyer shall pay the losses resulting from the voluntary sacrifice of
respondentia loan. part of the ship or cargo.
SAMPLES OF SIMPLE OR PARTICULAR Take note that there is a voluntary sacrifice because
AVERAGE the vessel and its cargo is exposed to a common
danger and in order to save the vessel and the cargo
or both, a deliberate sacrifice must be made.
Article 809. Simple or particular averages shall be, as a
general rule, all the expenses and damages caused to the Some cargoes will have to be jettisoned or a portion
vessel or to her cargo which have not redounded to the of the vessel will be jettisoned in order, probably, to
benefit and common profit of all the persons interested in lighten the vessel and in order to save the vessel
the vessel and her cargo, and especially the following:
and the cargo or both.
1. The damages suffered by the cargo from the time
of its embarkation until it is unloaded, either on WHAT IS THE RELATIONSHIP AND
account of the nature of the goods or by reason of SIGNIFICANCE OF GENERAL AVERAGE?
an accident at sea or force majeure, and the
expenses incurred to avoid and repair the same.
2. The damages suffered by the vessel in her hull, Those shippers or the shipowners of the cargoes whose
rigging, arms, and equipment, for the same causes cargo was saved as a result of the jettison will have to
and reasons, from the time she puts to sea from share proportionately their interest to the general
the port of departure until she anchored in the port average in order to compensate the shipper or the
of destination.
owners of the cargoes that were jettison.
3. The damages suffered by the merchandise loaded
on deck, except in coastwise navigation, if the
marine ordinances allow it.

EXAMPLE: Your cargo was saved and the valued at 1M. pertains to the sea or arises from the accidents of the
There was another shipper whose cargo was also save sea.
but was only valued at 200T. The amount shall be
computed proportionately. Those with higher interest will The vessel and the cargo are subject to the same
pay more than those who have lesser interest. But danger after it has been loaded during the voyage or the
PROPORTIONATELY to the value of their respective common danger could be at the port of loading and
cargoes that were saved. unloading. The danger pertains to the sea, arises from
the accidents of the sea or through a disposition of
WHAT IS THIS COMMON DANGER? authority.
In the case of Magsaysay Inc v Agan (Jan. 31, 1955), Second factor to be considered is that there must be
the SC here adopted the requisites of general averages, deliberate sacrifice, that for this common safety, part of
which was stated by Senator Tolentino in his the vessel or of the cargo or both, is sacrificed
commentaries on the Code of Commerce. deliberately - such as voluntary Jettison or casting away
of some portion of the associate interest, meaning to say
1. It is provided that there were, in order for it to be interest of all the cargo. So, a portion of that associate
considered as general or whose average contribution. interest is sacrificed deliberately.
The first essential requisite is that there must be What do we mean by deliberate sacrifice? A part for
common danger to which the ship, the cargo, its the benefit of the whole. Part of the vessel or part of the
crew or all of them are all exposed to the danger and cargo must be deliberately sacrificed for what purpose?
that the danger must be imminent and apparently In order to justify General Average contributions so
inevitable. save the vessel, the cargo or both.
Therefore, there is a need to lighten the vessel as a EXAMPLE: it may involve a voluntary Jettison or
result of which a decision to jettison some of the cargo throwing away of some portion of the cargo referring to
should be made. associated interest for the purpose of avoiding the
common period for the whole or a particular portion of
2. As one of the requisite, what do we mean by common those interest.
danger?
Take note that it cannot involve a damage which resulted
It means that both the ship and the cargo: beyond the control of the captain and crew or without
any intention on their part. As a matter of fact, the
a. after it has been loaded are subject to the same Code of Commerce prescribes procedure in
danger, during the voyage or deciding, whether a sacrifice should be made and
b. it could be in the port of loading or unloading and normally the sacrifice is made through the Jettison
c. that the danger arises from the accidents of the of the cargo or part of the ship.
sea, disposition of the authority or faults of men.
Third factor to be considered is that from the
Provided, that the circumstances producing the period expenses or the damages as a result of the Jettison
should ascertain and imminent or it may be rationally be follows the successful sailing of the vessel and the
said to be certain and imminent. cargo. So, there must be success.
WHAT IS THIS PERIOD? Fourth factor to be considered, that the expenses or

damages should have been incurred or inflected after
Period is that both the ship and the cargo after it has taking the proper steps and authority. The proper steps
been loaded are subject to the same danger. Meaning and authority is provided under Articles 813 and 814.
to say, the vessel and the cargo were subject to the
same danger after it has been loaded during the voyage WHAT ARE THESE PROPER STEPS?
or in the second period the common danger should be at
the port of loading or unloading and that the danger

1. There must be a resolution of the Captain majority, or the captain, if opposed to the majority, should
adopted after a deliberation with the other consider certain measures necessary, they may be
officers of the vessel and after hearing all executed under his liability, without prejudice to the
persons interested in the cargo, if the latter freighters exercising their rights against the captain before
the judge or court of competent jurisdiction, if they can prove
disagree, the decision of the captain should
that he acted with malice, lack of skill, or negligence.
prevail, but they shall register their objections.
If the persons interested in the cargo, being on the vessel,
2. If there is resolution made, the resolution must should not be heard, they shall not contribute to the gross
be entered in the logbook of the vessel stating average, which contribution shall be paid by the captain,
the reasons and motives for the dissent and the unless the urgency of the case should be such that the time
irresistible and urgent process if he acted in his necessary for previous deliberation was lacking.
own accord.
Article 814. The resolution adopted to cause the damages
which constitute a general average must necessarily be
3. It must be signed by all persons present in the
entered in the log book, stating the motives and reasons
hearing. In the second case, by the captain and
therefor, the votes against it, and the reasons for the
all officers of the vessel. disagreement should there be any, and the irresistible and
urgent causes which moved the captain if he acted of his
Meaning to say, only the captain and the crews own accord.
will sign if there is opposition. If there is no
oppositions, as in the first case, everyone should In the first case the minutes shall be signed by all the
sign, including those who agreed to it. persons present who could do so before taking action if
possible, and if not at the first opportunity; in the second
case by the captain and by the officers of the vessel.
In the second instance Cargo owners who have
interest in the vessel do not agree with the In the minutes and after the resolution there shall be stated
jettison. in detail all the goods cast away, and mention shall be made
of the injuries caused to those kept on board. The captain
The decision of the captain will prevail, but it shall be obliged to deliver one copy of these minutes to the
should be signed by the captain and the officers maritime judicial authority of the first port he may make
of the crew and there must be minutes – must within twenty-four hours after his arrival, and to ratify it
contain a detail of all the goods jettisoned and of immediately by an oath.
those injuries caused to those on board.
VERY IMPORTANT PROVISION WITH RESPECT TO
If one of the four essential requisites is lacking, it will JETTISONING OF CARGOS:
not be considered a general or gross average
contribution because it is important that all the four Art. 815-816 – Steps in determining what is the order of
requisites must be complied with: jettison.
Article 815. The captain shall supervise the jettison, and

1. There is common danger;
shall order the goods cast overboard in the following order:
2. Voluntary sacrifice;
3. From their voluntary sacrifice, there was success 1. Those which are on deck, beginning with those
in saving the cargo or vessel or both; and which embarrass the handling of the vessel or
4. The formalities as provided under 813-814 must damage her, preferring, if possible, the heaviest
be complied with. ones and those of least utility and value.
Article 813. In order to incur the expenses and cause the 2. Those in the hold, always beginning with those of
damages corresponding to gross average, a previous the greatest weight and smallest value, to the
resolution of the captain, adopted after deliberation with the amount and number absolutely indispensable.
sailing mate and other officers of the vessel, and with a
hearing of the persons interested in the cargo who may be Article 816. In order that the goods jettisoned may be
present, shall be required. included in the gross average and the owners thereof be
entitled to indemnity, it shall be necessary in so far as the
If the latter shall object, and the captain and officers, or a cargo is concerned that their existence on board be proven
by means of the bill of lading; and with regard to those be no question that the flight of the vessel was a
belonging to the vessel, by means of the inventory made up measure of precaution adopted solely for the purpose
before the departure, in accordance with the first paragraph for the preservation of the vessel from the danger of
of Article 612.
seizure and capture.
The expenses for the refuge in Manila cannot be

considered as a general average but only a simple
INTERNATIONAL HARVESTER COMPANY VS.
and particular average because it inured only to the
HAMBURG-AMERICAN LINE, 42 PHIL 845
benefit of the shipowner. It follows therefore that there
can be no general average if there is no danger at all.
International Harvester shipped agricultural machinery
There is also no common danger if the measure was
through a German vessel owned by Hamburg-
undertaken against a distant peril (distant meaning it
American Line. On its way to its destination, there was
is not yet imminent) again it will not apply if the
a war that broke out in Europe and the master of the
danger is not yet imminent. Even if there is a common
vessel decided to seek refuge in Manila. Later, the
peril the same may not justify a voluntary sacrifice if
shipper demanded for the goods to be forwarded to its
the same can easily be avoided by the ship without
destination in the same vessel or in another vessel.
such sacrifice.
The ship agent agreed on the condition that the
shipper should consider the cost and expenses of the
If it can be avoided that there will be no sacrifice then
vessel's stay in Manila as a general average. When
it cannot be considered as a general average
the shipper did not agree, the ship agent refused to
contribution.
deliver the goods forcing the shipper to file an action
for recovery of the goods plus damages.
Ruling: The SC rejected the argument of the ship

agent that there was general average because its
In the case of NATIONAL DEVELOPMENT
cargo was agricultural machinery. The agricultural
COMPANY VS CA the Supreme Court held here that
machinery was not a contraband and was not subject
the law on averages will not apply in collision cases
to seizure or forfeiture even if the ship will be
where the collision was caused by the negligence of
captured. Therefore, there was no common danger
the captains of the colliding vessels and the cargos
because of the fact that the ship took refuge in Manila
were not jettisoned to save some of the cargos and
was only exclusively for the purpose of protecting the
the vessel.
ship. It did not inure to the benefit of the everyone.
WHO SHALL BEAR THE EXPENSES AND GROSS

COMPANA DE COMMERCIO ET AL. VS HAMBURG
AVERAGE?
AMERICA
It should be borne by those who benefitted from the
The Supreme Court in another case also ruled in this
sacrifice. This includes – the ship owners and the
case which was German Vessel that also took refuge
owners of the cargoes that were saved. Contribution
in Manila during the WW1. The shipper in this case
may also be imposed on the insurers of the vessels or
was French who loaded the Cargo in the place of
cargoes that were saved, as well as the lenders in
departure which is in Saigon and this place was a
bottomry or respondencia under Art. 732 and 859.
French port. After the loading of the cargo the vessel
left Saigon to seek refuge in Manila at the outbreak of
On the other hand, the Insurance Code of the Philippines
the war.
(Sections 164-165) provides that the insurer is liable
for any general average in proportion to the
The Supreme Court here ruled that there was no
contribution attaching to his policy value where the
general average because the French cargo absolutely
said value is less than the contributing value of the thing
secured from the danger of seizure of confiscation as
insured.
long as it remained in the port of Saigon and there can
that it can continue its journey. It was refloated and it
SUMMARY: returned to Manila to refuel and proceed to Basco – its
port of destination. Cargoes were delivered to their
THOSE WHO SHALL BEAR THE EXPENSES: respective owners, who with the exception of Agan,
Those who benefitted from the sacrifice: made a deposit or signed a bond to answer for their
1. Ship owners contribution to the average.
2. Owners of the cargoes that were saved
3. Insurers of the vessels or cargoes that were Later, AMInc required the cargo owners to pay the
saved expenses incurred in making the ship afloat (P841.40
4. Lenders in bottomry or respondencia each). In the theory that the expenses incurred in the
vessel, as AMInc claims, fall under the General
Averages Rule under the Code of Commerce, which
THOSE WHO SHALL BEAR THE GROSS AVERAGE: is to be shared by ship owner and cargo owners as
well.
The insurer in proportion to the contribution attaching to
his policy value less than the contributing value of the ISSUE: Whether or not general averages exist in the
thing insured. case at bar.
WHO IS ENTITLED TO INDEMNITY IN GROSS HELD: No. General averages contemplate that the
AVERAGE? stranding of the vessel is intentionally done in order to
save the vessel itself from a certain and imminent
The owner of the goods which were sacrificed is entitled danger. Here, the stranding was accidental and it was
to receive the general average contribution, however, made afloat for the purpose of saving the voyage and
there are goods, even if sacrificed, are not covered. not the vessel. Note that this happened on a fine
weather day. Also, it cannot be said that the towing
GOODS EVEN IF SACRIFICED ARE NOT COVERED: was made to save the cargos, for the cargos were not
in danger imminent danger.
1. Goods that are carried on deck, unless the rule,
special law, of the place allow deck cargo The plaintiff brought the present action in court to
(Article 855) make defendant pay his contribution.
2. Goods that are not recorded in the books or Agan contended that the stranding of the vessel was
recourse of the vessel. (Article 855) due to the fault, negligence, and lack of skill of the
master. So, the expenses incurred in putting it afloat
3. Those prohibited under YORK ANTHWERP did not constitute general average, and that the
RULE. liquidation of the average was not made in
accordance with law.
MAGSAYSAY, INC. V. AGAN HOW IS LIQUIDATION MADE?

G.R. No. L-6393 | January 31, 1955
Under Article 848 of the Code of Commerce:
FACTS: In 1949, SS San Antonio, owned by A.
Magsaysay, Inc. (AMInc), embarked on its voyage to The matter with respect to proof and liquidation of
Batanes via Aparri. It was carrying various cargoes, averages, there is a computation, but it should not
one of which was owned by Anastacio Agan. One fine exceed 5% of the interest, which the claimant may
weather day, it accidentally ran aground the mouth of have in the vessel, and the 1% of the goods damages
the Cagayan River due to the sudden shifting of the in particular average.
sands below.
There is a required computation under Article 848 and
SS San Antonio then needed the services of Luzon that is what Agan was saying. If the liquidation of the
Stevedoring Co. to tow the ship and make it afloat so average was not made in accordance with law.
EXAMPLE:
The SC made reference to the general average.
X loads 50 cans of kerosene of a vessel bound for
With respect to the first requisite, the court said "it Tacloban. It was loaded on deck. On the way to
is a common danger.". Evidence do not show that the Tacloban, the ship met a typhoon and the captain
expenses incurred was to save the vessel, and cargo ordered the jettison of the kerosene. In order to make the
from the common danger. The vessel was aground in vessel lighter, the cans were thrown and as a result of
fine weather, inside the port of the mouth of the river, the jettison, the vessel arrived safely.
which was a place which is described as very shallow.
X as the owner of the kerosene demanded
The vessel was not to be afloat in order to save it from reimbursement. Is X entitled to reimbursement?
imminent danger. The Refloating of the vessel was
not to save it from imminent danger, but to enable the Since this is interisland or coastwise, under the YA rules,
vessel to proceed to its port of destination. the deck cargo is allowed. The cargo on deck is
jettisoned as a result of which the vessel was saved, the
Second, the expenses was not incurred for the cargo owner is entitled to reimbursement, if the cargo is
common safety, but only for the benefit of the saved, the cargo owner must contribute to the general
vessel/ship owner. average. However, if it is a case of overseas trade, the
YA rules prohibit cargo on deck or even container. In
Third, the salvage operation was a success. But, to case such cargo is jettisoned, the owner thereof will not
enable it to proceed to its destination. be entitled to reimbursement in view of the violation. If
the cargo was saved, the owner must contribute to the
Fourth, the requisites were not complied with. general average.
Here, the requisites were not complied with and that ARTICLE 813. In order to incur the expenses and cause the
there was no common danger. damages corresponding to gross average, a previous
resolution of the captain, adopted after deliberation with the
sailing mate and other officers of the vessel, and with a
The SC said that it is not a case which may contribute
hearing of the persons interested in the cargo who may be
to general or gross average.
present, shall be required.
If the latter shall object, and the captain and officers, or a

DISCUSSION: majority, or the captain, if opposed to the majority, should
consider certain measures necessary, they may be
It is important to determine the liability in averages is the executed under his liability, without prejudice to the
application of the York Antwerp Rules which allows freighters exercising their rights against the captain before
deck cargo on coast wide shipping and prohibit the same the judge or court of competent jurisdiction, if they can prove
on overseas traffic or shipping. Therefore, if it is an that he acted with malice, lack of skill, or negligence.
overseas shipping, deck cargo is prohibited but in
If the persons interested in the cargo, being on the vessel,
coastwise or interisland shipping, it is allowed.
should not be heard, they shall not contribute to the gross
average, which contribution shall be paid by the captain,
WHAT IS THE RATIONALE BEHIND IT? unless the urgency of the case should be such that the time
necessary for previous deliberation was lacking.
Because overseas, the cargo is exposed to the weather
to the peril of the sea. The duration of the travel is ARTICLE 814. The resolution adopted to cause the
longer, sometimes weeks because it reaches its place of damages which constitute a general average must
destination. However, in interisland or coastwise, the necessarily be entered in the log book, stating the motives
travel is shorter, and therefore it is allowed by the and reasons therefor, the votes against it, and the reasons
customs of the port in the port of destination, where it for the disagreement should there be any, and the
allows deck cargo. There is significance in these irresistible and urgent causes which moved the captain if he
conditions, in determining liability. acted of his own accord.

In the first case the minutes shall be signed by all the
persons present who could do so before taking action if
possible, and if not at the first opportunity; in the second PHILIPPINE HOME ASSURANCE
case by the captain and by the officers of the vessel.
CORPORATION, petitioner,
vs.
In the minutes and after the resolution there shall be stated
COURT OF APPEALS and EASTERN SHIPPING
in detail all the goods cast away, and mention shall be made
LINES, INC., respondents.
of the injuries caused to those kept on board. The captain
shall be obliged to deliver one copy of these minutes to the G.R. No. 106999. June 20, 1996.
maritime judicial authority of the first port he may make KAPUNAN, J.
within twenty-four hours after his arrival, and to ratify it
immediately by an oath. Rule Synopsis
Fire is generally not a natural calamity under the
Philippine jurisdiction, thus loss by reason of the same
is generally deemed to be with the intervention of
The formalities are necessary to incur expenses and some negligence. And for a shipper to recover under
cause the damage corresponding to the gross average is gross averages, compliance with the formalities under
provided under 813 to 814. the Code of Commerce is indispensable.
ARTICLE 815. The captain shall supervise the jettison, and Case Summary
shall order the goods cast overboard in the following order: Various shipments were loaded on board SS Eastern
Explorer of Eastern Shipping Lines, Inc. (ESLI). The
1. Those which are on deck, beginning with those which consignees were William Lines, Inc., Orca’s
embarrass the handling of the vessel or damage her,
Company, Pan Oriental Match Company and Ding
preferring, if possible, the heaviest ones and those of least
Velayo. While in transit, the vessel exploded resulting
utility and value.
to its constructive total loss. The explosion was traced
2. Those in the hold, always beginning with those of the
to a flame detected on the acetylene cylinder located
greatest weight and smallest value, to the amount and in the accommodation area near the engine room of
number absolutely indispensable. the vessel. It resulted to the death of and severe
injuries to some of the crew members. The whole
ARTICLE 816. In order that the goods jettisoned may be vessel was also set on fire which led the remaining
included in the gross average and the owners thereof be men to abandon the ship. The vessel was towed by a
entitled to indemnity, it shall be necessary in so far as the tugboat and the cargoes were recovered. The
cargo is concerned that their existence on board be proven consigned goods were transshipped to the
by means of the bill of lading; and with regard to those consignees albeit delayed, and via a different carrier.
belonging to the vessel, by means of the inventory made up
ESLI charged the consignees several amounts for the
before the departure, in accordance with the first paragraph
additional freight and salvage charges. The charges
of Article 612.
were paid by Philippine Home Assurance Corp. under
This enumerates the order in which goods to be protest (PHAC; insurer of the consignees).
jettisoned, may be included in the gross average. The
existence of cargoes onboard the vessel must be proved PHAC, as subrogee of the consignees, then filed a
by the bill of lading and as to the goods belonging to case with the RTC against ESLI to recover the sum
vessel, their existence must be proved by an inventory paid on the ground that the damage was due to the
made prior to departure. fault, negligence, illegal act and/or breach of contract
of ESLI.
If you want to claim, you have to show proof that your
cargo was loaded on board, with respect to the ESLI raised the defenses of exercise of due diligence
shipowner there must be an inventory of the equipment and fortuitous event.
of the ship because that will be proven through the
inventory - a particular equipment is considered loss The RTC dismissed PHAC’s complaint. The CA
because it was jettisoned. There must be an inventory, affirmed. The SC reversed; PHAC may recover the
prior to the departure of the vessel. sum paid from ESLI.
Note: under the gross averages, the consignees will
Issues resolved — be required to contribute to the cost of saving the
Procedural Note: the SC held that it may review the vessel and its cargoes.
factual findings of the lower courts given that “the
findings complained of are totally devoid of support in Nevertheless, ESLI failed to comply with the
the records, or that they are so glaringly erroneous as formalities under the Code of Commerce, specifically
to constitute grave abuse of discretion.” Arts. 813 and 814. Thus, the consignees may not be
held liable.
1. Who, among the carrier, consignee or insurer of
the goods, is liable for the additional charges or MARCH 22, 2021
expenses incurred by the owner of the ship in the
salvage operations and in the transshipment of COLLISION
the goods via a different carrier?
HELD – ESLI, THE SHIPPER. Collision is when both bodies are in motion or one
In our jurisprudence, fire may not be considered a stationary and the other, no matter which motion
natural disaster or calamity since it almost always according to Black’s Law.
arises from some act of man or by human means. It
cannot be an act of God unless caused by lightning or However, strictly speaking, the collision refers to the
a natural disaster or casualty not attributable to contact of two moving vessels. If one vessel is moving,
human agency. Thus, in this case, the fire causing the while the other vessel is stationary, it is more
damage cannot be considered a natural calamity, as appropriately refer to as allision.
contended by ESLI and as held by the lower courts,
that would exonerate the former from liability. In fact, Nevertheless, for purposes of applying the provisions of
the explosion causing the fire was due to the the Code of Commerce, collision includes collision per
negligence of ESLI’s crew. se and allision.
First, the crew was negligent in placing or storing the However, there is a need to emphasize that it is not
fully loaded acetylene cylinders near the engine room necessary for one vessel to be liable for his vessel
where the heat generated therefrom may cause the that hit another vessel.
said explosion by reason of spontaneous combustion.
ESLI could have easily foreseen the danger. A ship owner or ship agent, may be made liable even if
his vessel did not actually collide with another vessel.
Second, storing the acetylene cylinders in the And this situation is covered by Article 831 of the Code
accommodation area unnecessarily exposed the of Commerce, which makes the owner of a third vessel
passengers to grave danger and injury. liable if it forced a vessel to hit another.
Third, that the acetylene cylinder was certified as Article 831. If a vessel should be forced by a third vessel to
having complied with the safety measure and collide with another, the owner of the third vessel shall
standards by qualified experts supports the theory that indemnify the losses and damages caused, the captain
there was negligence in its handling. thereof being civilly liable to said owner.
2. Were the expenses incurred in saving the cargo In collision, we have to determine the zones of time in
considered general average? order for us to determine what law shall apply.
Held – yes.
General or gross averages include all damages and WHAT ARE THESE THREE ZONES OF TIME IN
expenses which are deliberately caused in order to COLLISION CASES?
save the vessel, its cargo, or both at the same time,
from a real and known risk. So generally speaking, in collisions between vessels,
there exist this three divisions:

“The collision took place in the open lake. It was a
1. First division covers the time, all the time or the straight starlight night and although there was haze
risk of collision may be said to have begun. near the surface of the lake, it was not sufficient to
conceal the Cuba (name of the sailing vessel) from
Meaning to say the vessels are still far. So each those on board of the propeller. So the lake was
vessel can maneuver each other to avoid a smooth. The steam boat had the entire command of
collision. So during this zone, no laws still apply her course and a wide water by which she might have
because each one can direct or maneuver its passed the Cuba on its side and its safe distance.
own vessel.
She was going at the rate of 8 miles an hour and if
2. Second division covers the time between the proper care had been taken on board the Genesee
moment when the risk of collision begins and Chief, after the schooner was first seen, it would seem
the moment when it has become a practical almost to almost be impossible that a collision could
certainty. have happened with a vessel moving so slowly and
sluggishly through the water even if she was careless
So there are rules that will apply here. Whether or in judiciously managed.
or not it is a privilege vessel or a burden vessel,
or whether it is a sole to blame or boast to blame So, there was no necessity for passing so near her as
situation. to create the hazard. The steam boat could choose its
distance and the captain and crew of Cuba appear to
3. Third division covers the time of actual contact. have been watchful and attentive from the time the
propeller was discovered, nor do we deem it material
G. URRUTIA & COMPANY VS. BACO RIVER to inquire whether the order of the captain at the
PLANTATION COMPANY moment of collision was judicious or not.
In the case of G. Urrutia & Company vs. Baco River He saw the steam boat coming directly upon him, her
Plantation Company, a March 25, 1913 case. This is speed was not diminished nor any measures taken to
still a 1913 case but still the principle behind the avoid a collision, and if n the excitement and alarm of
application cases is still relevant. the moment a different order might have been more
fortunate it was the fault of the propeller to have been
In this case, the Court ruled that, if during the time placed in a situation where there was no time for
when the sail vessel (we have to consider what kind of thought and she is responsible for the consequences.
vessel) through the third zone that it changed its
course to port in order to avoid a possible collision, So, she had the power to have passed at a safer
the act may be referred to or may said to have been distance, the steamer, and has no right to place
done in extremis or what you call error in extremis and schooner in such jeopardy that the error of the
even if that vessel is wrong, because it was done in moment might cause her destruction and endanger
order to avoid an impending danger or collision, the lives of those onboard.
sailing vessel is not responsible for the result.
And, the court said, if an error was committed under
What happened to this case? such circumstances it was not a fault. The steamer,
according to the court, could have avoided the
So this case pertains to the collision between two collision.
vessel, one vessel is a steamer named Genesee
Chief and the sail vessel. The two vessels watched
each other for some time before the collision. And the
sailing vessel kept her course until in extremis when WHAT IS THE APPLICABLE LAW? LIABILITY
she made a wrong maneuver. WITH RESPECT TO NEGLIGENCE THAT
INTERVENED IN THE COLLISION?
And the Court said:

Liability per negligence in the absence of contract is And, under Rule 8 which refers to actions to be taken to
governed by Article 2176 of the New Civil Code avoid collisions, if the circumstances of the case admit
pertaining to the provision of quasi-delict. shall be positive, made in ample time, and with due
regard to the observance of good seamanship.
However, the liabilities of the ship owner and the ship
agent as well the captain or crew in collision cases are RULES ON LIABILITY
still governed by the provisions of the Code of
Commerce on collision.
1. Although the liability with respect to collision is
Although collision may be said to involve maritime court, not governed by quasi-delicts, liability in collision
the special rules under the code of commerce may be cases are still negligence-based.
said to involve to govern the rights and liabilities of the
persons or entities involved, as held in National In other words, courts are still called upon to
Development Company v CA. determine the negligence of the persons
involved, in order to impose liability. The persons
WHERE DOES COLLISION FALL? who caused the injury are both civilly and
criminally liable under Article 829.
Collision falls among matters not specified or regulated
by the Civil Code so that no reversible error could be 2. In the determination of negligence, the same test
found in respondent court's application to the case of of a reasonable man in the position of an expert that
National Development Company v CA. applies in quasi-delict cases should also be applied,
although with due consideration to the expertise of
It will not cause a bar to the application of Articles 826 - the persons involved including the carrier itself, the
839 which exclusively deals with collision of vessels as captain, officers, and crew of the vessels.
held in National Development Company v CA.
Therefore, it is still required to determine if a
So, there is an existing international agreement with reasonable man with the same expertise would
respect to collisions in high seas and waters connected have done what the party in question did under
to high seas that is navigable by sea going vessels. This the same circumstances.
agreement is referred to as the International
Regulation for Preventing Collisions at Sea, which is The determination of what is reasonable
widely referred to as COLREGS. depends in the circumstances of each case. The
same expertise of a reasonable man should also
COLREGS was formulated by the international maritime be taken into consideration in determining the
organization which was previously called Inter- question of reasonableness.
Governmental Maritime Consultative Organization. The
Philippines has not yet acceded to COLREGS and is It is still relevant to determine if the collision is
therefore technically not yet in force. sufficient to be foreseeable, such that a
reasonable man with the same expertise could
However, although we have not yet acceded to have avoided the impact.
COLREGS the rules that are embodied therein are
already being used by most of the trading partners of the 3. In some respect, however, the rules that apply to
Philippines. quasi-delict cannot be applied in collision cases.
Therefore, the personnel of Philippine vessels are not For example, the view is that the doctrine of last
only required to know the provisions of COLREGS but clear chance and the rule on contributory
they are even compelled to follow them, more negligence cannot be applied in collision cases
specifically Rule 7 and Rule 8 of COLREGS with because of the provisions of Article 827 of the
respect to rules dealing with risks of collision and actions Code of Commerce.
to avoid collisions.

Therefore, if both vessels were negligently captain thereof being civilly liable to said owner.
operated, it does not matter if the other has the
last clear chance of avoiding the injury because ARTICLE 832. If, by reason of a storm or other cause of
under Article 827 – each vessel must have to force majeure, a vessel which is properly anchored and
moored should collide with those in her immediate vicinity,
suffer its own damage if both of them are
causing them damage, the injury occasioned shall be looked
negligent. upon as particular average to the vessel run into.
Although negligence on the part of the mate of

the incoming vessel proceeded the negligence TWO ISSUES:
on the part of the mate of the outgoing vessel,
by an appreciable interval of time, the first 1. Sole to blame
vessel, cannot, on that account, be absolved 2. Both to blame
from responsibility.
1. SOLE TO BLAME
Similarly, if is the proof that the plaintiff was
negligent will bar recovery from the defendant in Under Article 826, it is one vessel at fault - if a
collision cases even if the plaintiff’s negligence vessel should collide with another through the
can be classified as merely contributory. This is fault, negligence, or lack of skill of the captain,
because of the application of Article 827. sailing mate, or any other member of the
complement, the owner of the vessel at fault
IN DETERMINING NEGLIGENCE, THE RULES MORE shall indemnify the losses and damages
SPECIFICALLY ON ARTICLES 826-832 SHALL suffered, after an expert appraisal.
APPLY:
2. BOTH TO BLAME
SECTION III
COLLISIONS This is under Article 827, both vessels are at
fault - if both vessels may be blamed for the
ARTICLE 826. If a vessel should collide with another
collision, each one shall be liable for his own
through the fault, negligence, or lack of skill of the captain,
sailing mate, or any other member of the complement, the
damages, and both shall be jointly
owner of the vessel at fault shall indemnify the losses and responsible for the losses and damages
damages suffered, after an expert appraisal. suffered by their cargoes.
ARTICLE 827. If both vessels may be blamed for the If the collision is imputable to both vessels, each one
collision, each one shall be liable for his own damages, and shall suffer its own damages, and both shall be solidarily
both shall be jointly responsible for the losses and damages responsible for the losses and damages occasioned to
suffered by their cargoes. their cargoes. In other words, when it comes to damages
to their respective vessels, the losses rests where they
ARTICLE 828. The provisions of the foregoing article are
applicable to the case in which it can not be decided which
fall. Meaning to say, each one shall be held responsible.
of the two vessels was the cause of the collision.
With respect to damages to the cargoes, the ship owner
ARTICLE 829. In the cases above mentioned the civil action and ship agent of the vessels involved, in the collision,
of the owner against the person liable for the damage is are liable to the shippers. The liability is - joint and
reserved, as well as the criminal liabilities which may be several. and there will be no apportionment of liability
proper. and each ship owner or ship agent is liable for the whole
damage or injury.
ARTICLE 830. If a vessel should collide with another by
reason of an accident or through force majeure, each vessel
In the case of GOVERNMENT OF THE PHILIPPINE
and her cargo shall be liable for their own damage.
ISLANDS, VERSUS PHILIPPINE STEAMSHIP
ARTICLE 831. If a vessel should be forced to collide with COMPANY INCORPORATED - JANUARY 16, 1923
another one by a third vessel, the owner of the third vessel G.R. NO. 18957 -
shall indemnify for the losses and damages caused, the

negligence on the part of the mate of the incoming
GOVERNMENT OF THE PHILIPPINE ISLANDS, V. vessel preceded the negligence on the part of the
PHILIPPINE STEAMSHIP COMPANY mate of the outgoing vessel by an appreciable interval
INCORPORATED of time, the first vessel cannot on that account be
JANUARY 16, 1923 | G.R. NO. 18957 absolved from responsibility. Indeed, in G. Urrutia &
Co. vs. Baco River Plantation Co., supra, this court
FACTS: found reason for holding that the responsibility rested
The coastwise vessel Isabel, equipped with motor and exclusively on a steamer which had allowed
sails, left the port of Manila with primary destination to dangerous proximity to a sailing vessel to be brought
Balayan, Batangas, carrying, among its cargo, 911 about under somewhat similar conditions.
sacks of rice belonging to the plaintiff and consigned We are of the opinion therefore that his Honor, the
to points in the south. After the boat had been under trial judge, committed no error in holding that both
weigh for about four hours, and had passed the San vessels were to blame and in applying article 827 of
Nicolas Light near the entrance into Manila Bay, the the Code of Commerce to the situation before him. It
watch and the mate on the bridge of the Isabel is there declared that where both vessels are to
discerned the light of another vessel, which proved to blame, both shall be solidarily responsible for the
be the Antipolo, also a coastwise vessel, on its way to damage occasioned to their cargoes. As the Isabel
Manila and coming towards the Isabel. At about the was a total loss and cannot sustain any part of this
same time both the watch and mate on the bridge of liability, the burden of responding to the Government
the Antipolo also saw the Isabel, the two vessels of the Philippine Islands, as owner of the rice
being then about one mile and a half or two miles embarked on the Isabel, must fall wholly upon the
apart. Each vessel was going approximately at the owner of the other ship, that is, upon the defendant,
speed of 6 miles an hour, and in about ten minutes the Philippine Steamship Company, Inc.
they had together traversed the intervening space and
were in close proximity to each other. Only one observation will be added, in response to
one of the contentions of the appellant's attorneys,
When the mate of the Antipolo, who was then at the which is, that the application of article 827 of the Code
wheel, awoke to the danger of the situation and saw of Commerce is not limited by article 828 to the case
the Isabel "almost on top of him," to use the words of where it cannot be determined which of the two
the committee on marine accidents reporting the vessels was the cause of the collision. On the contrary
incident, he put his helm hard to the starboard. article 828 must be considered as an extension of
article 827 to an additional case. In other words, under
This maneuver was correct, and if the helmsman of the two articles combined the rule of liability
the Isabel had done likewise, all would apparently announced in article 827 is applicable not only to the
have been well, as in that event the two vessels case where both vessels may be shown to be actually
should have passed near to each other on the port blameworthy but also to the case where it is obvious
side without colliding. As chance would have it, that only one was at fault but the proof does not show
however, the mate on the Isabel at this critical which.
juncture lost his wits and, in disregard of the
regulations and of common prudence, at once placed
his own helm hard to port, with the result that his boat
veered around directly in the path of the other vessel The high court ruled that although the negligence on the
and a collision became inevitable. part of the mate of an incoming vessel preceded the
negligence of the mate of the on going vessel by an
ISSUE: appreciable length of time - as we have mentioned
earlier. The first vessel - cannot on that account be
To whom shall negligence be imputed? Both absolved of responsibility.
HELD: Also in the same case, the court ruled that only the
owner of one vessel was made liable for the loss of the
both vessels were at fault; and although the cargoes belonging to the government. Although, article

827 provides for solidary liability for the loss of the Article 830-832 provides for damages with respect to
cargoes - one vessel was totally lost, and was therefore causes, if the cause is a fortuitous event or force
subject to the doctrine of limited liability. Therefore, the majeure.
burden of responding to the loss, falls on the owner of
the other vessel, because the other vessel sunk. ARTICLE 832. If, by reason of a storm or other cause of
force majeure, a vessel which is properly anchored and
moored should collide with those in her immediate vicinity,
Article 828. The provisions of the foregoing article are causing them damage, the injury occasioned shall be looked
applicable to the case in which it can not be decided which upon as particular average to the vessel run into.
of the two vessels was the cause of the collision.
SIMPLE AND PARTICULAR AVERAGE
Under Article 828 - provides that the provision of the 1. Owner of the vessel shall be liable to
preceding article - 827 - are applicable to the case in themselves.
which it cannot be determined which of the two vessels 2. Cannot claim damages or liability from other
vessel.
has caused the collision. Article 828 will be dependent
on Article 827. Article 831
If a vessel should be forced to collide with another one by a
So, it was explained here, that the rule on solidary third vessel, the owner of the third vessel shall indemnify for
liability under 827 and 828 of the code is applicable and the losses and damages caused, the captain thereof being
not only to a case where both vessels maybe shown to civilly liable to said owner.
be actually blame worthy, but also the case where it is
obvious that only one was at fault but the court cannot This in relation to error in extremus.
determine or there is no proof that would show that
either vessel is responsible or have caused the damage 3 INSTANCES WHERE A VESSEL IS PRESUMED
or collision. LOST BY COLLISION
This is what you call the doctrine of inscrutable fault.

Article 833. A vessel shall be presumed as lost thru a
collision which, upon being run into, sinks immediately, and
Under 826 in a collision, the vessel at fault shall
also any vessel which is obliged to make a port to repair the
indemnify the damage sustained or losses incurred. If
damages caused by the collision should be lost during the
both vessels were at fault, each shall suffer its own voyage, or should be obliged to be stranded in order to be
damages, and both shall be solidarily liable to others - saved.
under 827 and 828.
Summarizing these rules, these are:
This solidarity expressed in article 827 of the code of 1. Vessel run into by another vessel and sunk
commerce, has been held to preclude a common 2. Vessel reports to port for damage repair is lost
danger, a common carrier operating a vessel from 3. Vessel becomes stranded so it can be saved
interposing a defense of due diligence in the selection
and supervision of its employees in an action against it
by a shipper of the other colliding vessel as distinguished
EFFECT OF THE PRESENCE OF PILOTS
from the ordinary rule in liabilities for tort or culpa
acquiliana. Article 834. If the vessels colliding should have pilots on
board discharging their duties at the time of the collision,
Under the doctrine of inscrutable fault - where fault is their presence shall not exempt the captains from the
established but it cannot be determined which of the liabilities they incur; but the latter shall have the right to be
two vessels were at fault, both shall be deemed to indemnified by the pilots without prejudice to the criminal
have been at fault. The effect would be, both of them liability which the latter may incur.
shall be liable for their own losses and the cargoes of the
shipper, and shall be solidarily liable to the cargo DIFFERENCE BETWEEN A PRIVILEGED VESSEL
owners. AND A BURDENED VESSEL

Burdened Vessel Privileged Vessel Or there was fear of greater damage or other legitimate
reason.
A vessel that gives way The vessel given way by
to another vessel the burdened vessel.
THE VESSEL WHICH IS NOT PROPERLY MOORED
INSTANCES ON APPLICATION OF CONCEPT OF The vessel which is not properly moored (wrong parking
PRIVILEGED AND BURDENED VESSELS or improper berthing or does not observe proper
distances) has presumption against itself.
2 VESSELS ARE ABOUT TO ENTER A PORT
It means that you were not properly parked and there
GR = Collision between farther (burdened vessel) and was damage because of collision, the presumption is
nearer vessel (privileged vessel) to port, farther vessel against the vessel who was not properly berthed.
liable.
EX = Unless no proof of fault against the farther vessel.
The farther vessel must allow the vessel who is nearer to THE VESSEL WHICH IS MOORED AT A PLACE NOT
port to enter first. If they collide, the fault is presumed USED FOR THE PURPOSE
and imputed vs. the vessel who arrived later.
The vessel which is moored at a place not used for the
Unless there was no fault on the farther vessel. purpose or which is improperly moored or does not have
sufficient cables, or which has been left without a watch,
2 VESSELS MEET has also against itself the presumption.
The smaller vessel must give way to the larger one.
VESSELS WHICH DO NOT HAVE BUOY TO
1 VESSEL LEAVING PORT INDICATE THE LOCATION
1 vessel who is leaving the port should make the way
clear for another vessel entering a port. The same rule applies to all those vessels which do not
have buoy to indicate the location of its anchors to
Here, the vessel entering the port is the privileged vessel prevent damage to the vessels which may approach it.
while the vessel leaving the port is the burdened vessel.
Example of buoy: Those ball-like structures that you can
This is the same as in airports. The plane that landed see in Paradise Island. It serves as indicators that the
must immediately give way to a plane about to land. level of water after the said structure is already deep. If
you are swimming, you are not allowed to go outside of
1 VESSEL SETTING SAIL IN THE NIGHT COLLIDES the buoy. It is required in every beach resort to put such
WITH A ANOTHER VESSEL indicators.
A vessel leaving at night is presumed to be the vessel Take note of the following:
that collided another vessel.
 Privileged vessel
1 VESSEL WITH SPREAD SAILS COLLIDES WITH AN  Burden Vessel
ANCHORED VESSEL  Zones of time in collision
WHAT IS A MARITIME PROTEST?

A vessel with spread sails is presumed to be the vessel
that collided another vessel in anchor or that cannot
Under Article 829, it provides that the owner may
move, even if the crew of the collided vessel has
proceed against those responsible for civil and criminal
received word to lift anchor when there was no sufficient
liability.
time to do so.

This is referred to as reservation of liability in culpable 2. A person under Article 826 who on account of
collision. In collision cases, take note that the captain the collision has suffered physical injuries
of the innocent vessel must file a marine protest sufficient to enable him to make a protest
within twenty-four (24) hours upon reaching the
nearest port. Failure of the captain to do so, bars Take note of the common distinction of the civil code,
recovery no matter how meritorious the case is. The code of commerce and COGSA with respect to the
exception is under Article 836, which provides that the degree of diligence required, exculpatory causes, the
failure to file a marine protest will not however prejudice presumption of negligence, and the period within which
the following: to file an action.
1. The cargo owners if they are not on board REFER TO LAST PAGE FOR THE TABLE
2. Innocent vessel that does not have a buque (a
vessel that has no deck) TAKE NOTE OF ARTICLE 855.
3. Small crafts in the bay or rover traffic.
ARTICLE 855. The merchandise loaded on the upper deck
Article 835 provides that in an action for recovery of of the vessel shall contribute to the gross average should it
losses and damages arising from collisions of boats be saved; but there shall be no right to indemnity if it should
engaged in traffic upon Philippine waters, a sworn be lost by reason of being jettisoned for general safety,
except when the marine ordinances allow its shipment in
statement is required to be presented within 24 hours to
this manner in coastwise navigation.
the competent authority of the point where the collision
took place or the first port of arrival of the vessel. The same shall take place with that which is on board
and is not included in the bills of lading or inventories,
This provision applies to all persons engaged in such according to the cases.
traffic in these islands and a defendant has as much
right to insists upon compliance with this provision of the In any case the ship-owner and the captain shall be
Code where the damages were done to a boat operated liable to freighters for the loss of the jettison, if the
by the Government as if such boat had been operated by storage on the upper deck took place without the
a private individual or company. consent of the latter.
ARE THERE EXCEPTIONS WITH RESPECT TO A This is what we mean when we apply the provisions of
MARITIME PROTEST? the York Antwerp rule.
The law also provides for exceptions under Article 612. ARRIVAL UNDER STRESS.
Under following circumstances, the protest is required: It is the arrival of a vessel in the nearest and most
convenient port which was decided after determining that
1. When the vessel makes arrival under stress. there are grounds for arrival under stress.
2. Under 612 and 843, in case of shipwreck
3. In case that the vessel has gone through a
THE GROUNDS FOR A VALID ARRIVAL UNDER
hurricane or when the captain believes that the
STRESS:
cargo suffered damages or averages under
Article 624 1. Lack of provisions
4. In case of maritime collision under Article 835
2. Well-founded fear of seizure of privateers or pirates
What are the exceptions? It is not a condition
precedent under the following circumstances: 3. By reason of any accident of the sea disabling the
vessel to navigate
1. If it is a motorboat vessel, that is not a merchant
vessel within the meaning of Article 835 Take note of 819 the formalities of the determination of
propriety of an arrival under stress.

responsible for the same, except in cases of force majeure.
Article 820
Article 824
The arrival under stress shall not be considered legal in the
If the entire cargo or part thereof should appear to be
following cases:
damaged, or there should be imminent danger of its being
1. If the lack of provisions should arise from the damaged, the captain may request of the judge or court of
failure to take the necessary provisions for the competent jurisdiction or the consul, in a proper case, the
voyage, according to usage and custom, or if they sale of all or of part of the former, and the person taking
should have been rendered useless or lost through cognizance of the matter shall authorize it after an
bad stowage or negligence in their care. examination and declaration of experts, advertisements, and
2. If the risk of enemies, privateers, or pirates should other formalities required by the case and an entry in the
not have been well known, manifest, and based on book, in accordance with the provisions of Article 624.
positive and justifiable facts.
The captain shall, in a proper case, justify the legality of the
3. If the injury to the vessel should have been caused
procedure, under the penalty of answering to the shipper for
by reason of her not being repaired, rigged,
the price the merchandise would have brought if it should
equipped, and arranged in a convenient manner for
have arrived at the port of its destination in good condition.
the voyage, or by reason of some erroneous order
of the captain. Article 825
4. Whenever malice, negligence, want of foresight, or
lack of skill on the part of the captain is the reason The captain shall answer for the damages caused by his
for the act causing the damage. delay, if the reason for the arrival under stress having
ceased, he should not continue the voyage.
Article 821
If the reason for said arrival should have been the fear of
The expenses caused by the arrival under stress shall enemies, privateers, or pirates, before sailing, a discussion
always be for the account of the shipowner or agent, but the and resolution of a meeting of the officers of the vessel and
latter shall not be liable for the damage which may be persons interested in the cargo who may be present shall
caused the shippers by reason of the arrival under stress, take place, in accordance with the provisions contained in
provided the latter is legitimate. Article 819.
Otherwise, the shipowner or agent and the captain shall be
jointly liable. 820 provides for the circumstances where arrival under
stress is not proper.
Article 822
If in order to make repairs to the vessel or because there 821 provides for expenses on arrival under stress if
should be danger of the cargo suffering damage it should be lawful or unlawful.
necessary to unload, the captain must request authorization
of the judge or court of competent jurisdiction to lighten the if lawful the ship-owner and ship agent will only be liable
vessel, and do so with the knowledge of the person for the expenses of the same arrival. if unlawful arrival
interested or representative of the cargo, should there be under stress, in addition to the lawful expenses they
one.
shall solidarily be liable for damages caused to the
In a foreign port, it shall be the duty of the Spanish * consul, cargos by such arrival under stress.
where there is one, to give the authorization.
822 provides for formalities that must be complied for
In the first case, the expenses shall be defrayed by the ship
unloading of cargos to make repairs.
agent or owner, and in the second, they shall be for the
account of the owners of the merchandise, for whose benefit
823 to 824 provides as to who shall be in custody and
the act took place.
who has the duty to preserve toe cargo which were
If the unloading should take place for both reasons, the unloaded.
expenses shall be defrayed in proportion to the value of the
vessel and that of the cargo. 825 provides for the liability of the captain in case of
Article 823 damage caused by his delay and after the cause of
arrival under stress has ceased.
The care and preservation of the cargo which has been
unloaded shall be in charge of the captain, who shall be SHIPWRECK is defined as the demolition or shattering
of a vessel caused by driving ashore or on racks and
shows in the mid seas or by the violence of the winds
and wages of tempest. It is provided under article 840- statement of the mark and number of the effects requesting
845. all interested persons to make their claims.
Sec. 6. If, while the vessel or things saved are at the

SALVAGE ACT
disposition of the authorities, the owner or his representative
shall claim them, such authorities shall order their delivery to
such owner or his representative, provided that there is no
ACT NO. 2616 - THE SALVAGE LAW controversy over their value, and a bond is given by the
owner or his representative to secure the payment of the
Section 1. When in case of shipwreck, the vessel or its expenses and the proper reward. Otherwise, the delivery
cargo shall be beyond the control of the crew, or shall have shall nor be made until the matter is decided by the Court of
been abandoned by them, and picked up and conveyed to a First Instance of the province.
safe place by other persons, the latter shall be entitled to a
reward for the salvage. Sec. 7. No claim being presented in the three months
subsequent to the publication of the advertisement
Those who, not being included in the above paragraph, prescribed in sub-section (c) of Section five, the things save
assist in saving a vessel or its cargo from shipwreck, shall shall be sold at public auction, and their proceeds, after
be entitled to a like reward. deducting the expenses and the proper reward shall be
deposited in the insular treasury. If three years shall pass
Sec. 2. If the captain of the vessel, or the person acting in without anyone claiming it, one-half of the deposit shall be
his stead, is present, no one shall take from the sea, or from adjudged to him who saved the things, and the other half to
the shores or coast merchandise or effects proceeding from the insular government.
a shipwreck or proceed to the salvage of the vessel, without
the consent of such captain or person acting in his stead. Sec. 8. The following shall have no right to a reward for
salvage or assistance:
Sec. 3. He who shall save or pick up a vessel or
merchandise at sea, in the absence of the captain of the a. The crew of the vessel shipwrecked or which was in
vessel, owner, or a representative of either of them, they danger of shipwreck;
being unknown, shall convey and deliver such vessel or
merchandise, as soon as possible, to the Collector of b. He who shall have commenced the salvage in spite of
Customs, if the port has a collector, and otherwise to the opposition of the captain or his representative; and
provincial treasurer or municipal mayor.
c. He who shall have failed to comply with the provisions of
Sec. 4. After the salvage is accomplished, the owner or his Section three.
representative shall have a right to the delivery of the vessel
or things saved, provided that he pays, or gives a bond to Sec. 9. If, during the danger, an agreement is entered into
secure, the expenses and the proper reward. concerning the amount of the reward for salvage or
assistance, its validity may be impugned because it is
The amount and sufficiency of the bond, in the absence of excessive, and it may be required to be reduced to an
agreement, shall be determined by the Collector of Customs amount proportionate to the circumstances.
or by the Judge of the Court of First Instance of the province
in which the things saved may be found. Sec. 10. In a case coming under the last preceding section,
as well as in the absence of an agreement, the reward for
Sec. 5. The Collector of Customs, provincial treasurer, or salvage or assistance shall be fixed by the Court of First
municipal mayor, to whom a salvage is reported, shall order: Instance of the province where the things salvaged are
found, taking into account principally the expenditures made
a. That the things saved be safeguard and inventoried. to recover or save the vessel or the cargo or both, the zeal
demonstrated, the time employed, the services rendered,
b. The sale at public auction of the things saved which may the excessive express occasioned the number of persons
be in danger of immediate loss or of those whose who aided, the danger to which they and their vessels were
conservation is evidently prejudicial to the interests of the exposed as well as that which menaced the things
owner, when no objection is made to such sale. recovered or salvaged, and the value of such things after
deducting the expenses.
c. The advertisement within the thirty days subsequent to
the salvage, in one of the local newspapers or in the nearest Sec. 11. From the proceeds of the sale of the things saved
newspaper published, of all the details of the disaster, with a shall be deducted, first, the expenses of their custody,

conservation, advertisement, and auction, as well as 1. DERELICT
whatever taxes or duties they should pay for their entrance;
then there shall be deducted the expenses of salvage; and
Derelict refers to a vessel or cargo that is badly
from the net amount remaining shall be taken the reward for
damaged and abandoned by the crew to the mercy
the salvage or assistance which shall not exceed fifty per
cent of such amount remaining. of the sea.
Sec. 12. If in the salvage or in the rendering of assistance Mere abandonment of such vessel or cargo does not
different persons shall have intervened the reward shall be make it res nullius, meaning to say, free for all to
divided between them in proportion to the services which salvage, so that anybody can claim it.
each one may have rendered, and, in case of doubt, in
equal parts. A proper procedure to consider it as res nullius has to be
complied with.
Those who, in order to save persons, shall have been
exposed to the same dangers shall also have a right to
participation in the reward. Res nullius
Res nullius (a thing belonging to no one) is a
Sec. 13. If a vessel or its cargo shall have been assisted or Latin term derived from private Roman law
saved, entirely or partially, by another vessel, the reward for whereby res (an object in the legal sense,
salvage or for assistance shall be divided between the anything that can be owned, even a slave, but
owner, the captain, and the remainder of the crew of the not a subject in law such as citizen or land) is
latter vessel, so as to give the owner a half, the captain a
not yet the object of rights of any specific
fourth, and all the remainder of the crew the other fourth of
subject. It literally means it is nobody’s property.
the reward, in proportion to their respective salaries, in the
absence of an agreement to the contrary. The express of Or a thing which has no owner.
salvage, as well as the reward for salvage or assistance,
shall be a charge on the things salvaged on their value. If the owner of a property abandons the same,
then, that property is called res nullius.
Sec. 14. This Act shall take effect on its passage.
The effect is the person who takes first
possession of the res nullius is the owner of that
WHAT IS SALVAGE LAW? property.
Salvage provides for a compulsory reward to those who
brave the terrors of the sea to save the cargo or vessel
in order to encourage acts of service. Whether the owner THE PROCEDURE TO BE FOLLOWED:
of the property like it or not he must give a reward. The
maximum amount of which is 50% of the value of the
1. If the vessel is abandoned, the salvor must
property saved.
tow it to the nearest port where it will be
delivered to the municipal treasurer or
REQUISITES FOR A VALID SALVAGE REWARD: Collector of Customs who will advertise the
fact of salvage;
1. There must be a valid object of salvage;
The fact of salvage has to be advertised;
2. The object must have been exposed to marine peril; hence, the vessel should first be
delivered to the proper authorities.
3. The salvage services must be rendered voluntarily
and not arising from a pre-existing duty; and 2. If the owner of the salvaged vessel appears
(because of the notice), he may take
4. The salvage effort must be successful. possession of the vessel and must pay a
reward not exceeding 50% of the value of the
vessel.
TERMS ASSOCIATED WITH SALVAGE

(Digest is straight from Ma’am V’s discussion) RULING:
The captain of MV Henry I was not entitled to

BARRIOS v. CARLOS GO THONG and CO. compensation since contract is one of towage. Only
G.R. No. L-17192 (1963) the owner of the towing vessel is entitled to
remuneration. But, in this case, the owner has
FACTS: Vessel MV Don Alfredo suffered engine already waived its claim for compensation for the
failure and it drifted towards the open sea. While service done.
there was no danger of being stranded or sinking as
the weather was fair and the sea was smooth and
calm, the vessel could not move on its own power. Another term associated with salvage in maritime law is
the term desertion.
So, MV Henry I responded to the S.O.S. or distress
signal from MV Don Alfredo where MV Henry I towed
MV Don Alfredo. SINGA SHIP MANAGEMENT PHILS., INC.,
vs. NLRC
A sister ship of MV Don Alfredo arrived and took over G.R. No. 120276 July 24, 1997
the towing service causing MV Henry I to leave.
Held:
The owner of MV Henry I expressly waived its claim "Desertion," in maritime law, is defined as:
for compensation for the service done, but the captain
of MV Henry I made a salvage claim against the The act by which a seaman deserts and abandons a
owner of MV Don Alfredo. ship or vessel, in which he had engaged to perform a
voyage, before the expiration of his time, and without
ISSUE 1: Is there a valid salvage claim? leave. By desertion, in maritime law, is meant, not a
mere unauthorized absence from the ship, without
RULING: leave, but an unauthorized absence from the ship with
an intention not to return to her service; or as it is
No. often expressed, animo non revertendi, that is, with an
intention to desert.
Based on the facts, there was no salvage as there
was no marine peril and the vessel was not a derelict Desertion has been defined as (1) a seaman's
as to warrant a valid salvage claim for the towing of abandonment of duty by quitting ship, not only without
the vessel. leave or permission, but without justifiable cause,
before termination of engagement; and (2) with the
ISSUE 2: What was the service rendered by MV intent of not returning to the ship's duty. 11 It is
Henry I? essential that there be an animo non revertendi, an
intention not to return. 12 Once the facts constituting
RULING: the abandonment and intent not to return are proven,
the seaman may be dismissed by the master, or he
MV Henry I service to MV Don Alfredo can be may be suspended by the POEA for three years as
considered as a quasi-contract of "towage" because in minimum penalty or delisted from the POEA registry
consenting to MV Henry I's offer to tow the vessel, MV as maximum penalty.
Don Alfredo thereby impliedly entered into a juridical
relation of "towage" with the owner of the towing
vessel. DESERTION is an act by which a seaman deserts and
abandons a ship or vessel in which he had engaged to
ISSUE 3: Although the owner of MV Henry I waived perform a voyage before the expiration of his time
the claim for compensation, is the captain of MV without leave (AWOL).
Henry I entitled to salvage compensation?

 It refers to the unauthorized absence from the ship made upon them has no legal effect. Owner must pay
without any intention to return to her service. 50% of the value of the things salvaged.
 It is essential for desertion to exist that there must be
animo non revertendi
HOW IS THE REWARD DETERMINED?

THOMAS A. WALLACE v. PUJALTE
GR No. 10019, Mar 29, 1916
1. The value of the property saved and the danger to
Facts; The schooner Kodiak was lost off the coast of which such property was exposed;
Mindoro, having been blown on her side by heavy 2. The services employed or the zeal employed and the
winds. The report of her loss reached the Collector of labor expended by the salvors in rendering the
Customs of the Philippine Islands who immediately salvage service;
issued a circular letter to the masters of all steamers 3. The danger, risk, lives of those who participated;
and vessels plying in Philippine waters, declaring the 4. Number of people who took part in the salvage;
Kodiak a derelict and a danger to navigation. 5. The services rendered or the promptitude, skill and
energy displayed in rendering the service and saving
As soon as the circular letter was received by the property; and
defendants Miguel Pujalte and Miguel Ossorio they 6. The expenses incurred.
chartered the coast guard cutter and proceeded to
search for the lost schooner. Two days later the
Kodiak was located, floating abandoned on her side,
with all her sails unfurled and under water. They HOW IS THE REWARD DETERMINED?
succeeded in making fast a rope to the stern of the
Kodiak. They towed her into the port of Pola,
reaching that port a day or two later, they being AGBAYANI: PP 613-614
obliged to proceed very slowly not only on account of
the heavy sea but also by reason of the fact that the 1. The labor expended by the salvors in rendering the
Kodiak was full of water. Lakandula was used to ferry salvage;
the workers from Pola to Manila. 2. The promptitude, skill and energy displayed in
rendering the service and saving the property;
Plaintiff's agent delivered to Pujalte a letter offering 3. The value of the property employed by the salvors
the latter for payment for the salvaging the vessel. rendering the service, and the danger to which such
But it provided that it will refuse to pay any expenses property was exposed;
which will be incurred after the towage of the vessel. 4. The risk incurred by the salvors in securing the
property from the impending peril;
The defendants contend that all the arrangements for 5. The value of the property saved; and
the salvage of the Kodiak has been made before the 6. The degree of danger from which the property was
receipt of the letter written by plaintiff's agent and that rescued.
the larger part of the expenses for the salvage of the
Kodiak had already been incurred at that time; that If no claim is made on the vessel within 3 months
they therefore proceeded with the salvage and were after the publication of the advertisement (report salvage
about to finish their work successfully when the to municipal treasurer of customs), the municipal
complaint was filed in this case and the possession of treasurer will sell the property saved at public auction and
the schooner given to the owner. the reward and expenses shall be deducted from the
proceeds. The balance is deposited with the treasurer.
ISSUE: WON Pujalte is entitled to the possession of
the vessel? YES If no one claims after 3 years, 1/2 shall go to the salvors
and other half to the government.
The salvors retain possession of the vessel until the
owner pays the reasonable expenses. The demand
If the vessel saves another vessel, the reward going to Salvage Law provides for a compulsory reward to those
the former shall be divided as follows: 1/2 to the who brave the perils of the sea to save cargo or vessel in
shipowner, 1/4 to the captain and 1/4 to the crew. order to encourage such services. Whether the owner of
the property saved likes it or not, he must give a reward,
NOTES FROM ATTY VALENCIA the maximum amount of which is 50% of the value of the
**Please note that some parts may already be present in property saved.
the above compiled transcription notes.
REQUISITES TO WARRANT SALVAGE REWARD (4):
ARRIVAL UNDER STRESS 1) There must be a valid object of salvage, i.e.,
vessel, cargo, freight or wreck of vessel or
Definition: Article 819 of the Code of Commerce cargo:
provides for the definition of what is “arrival under stress” 2) Such object must have been exposed to marine
– it is the arrival of a vessel at the nearest and most peril
convenient port which was decided upon after 3) The salvage services must be rendered
determining that there is voluntarily, not arising from a pre-existing duty;
1) lack of provisions; and
2) well-founded fear of seizure, privateers or pirates or 4) The salvage effort must be successful.
3) by reason of any accident of the sea disabling it to
navigate. Associated with salvage law is the term DERELICT – it
refers to a vessel or cargo badly damages and
Article 819 also provides for the formalities in the abandoned by the crew to the mercy of the sea. Mere
determination of propriety of an arrival under stress. abandonment of such vessel or cargo DOES NOT make
Article 820 provides for circumstances where arrival it RES NULLIUS so that anybody can claim it. A proper
under stress is improper. procedure to consider it as Res Nullius has to be
complied with.
Article 821 provides for the expenses on arrival under
stress. If lawful, the SO and the SA will only be liable for RES NULLIUS – is a Latin term derived from private
the expenses for the same arrival. If unlawful, in addition Roman Law whereby RES (which mean an object in the
to the lawful expenses, they shall solidarily be liable for legal sense, anything that CAN be owned, even a slave,
damages cause to the cargoes by such arrival under but NOT a subject in law such as a citizen nor land) IS
stress. NOT yet the object of rights of any specific object.
Article 822 provides for formalities that must be complied It literally means “nobody’s property”, or a thing which
for unloading of cargoes to make repairs. has no owner. If the owner of a property abandons
his/her property, then that property is called “res nullius”.
Article 823 and 824 – provides as to who shall be in EFFECT? The person who takes first possession of the
custody and has the duty to preserve the cargo which res nullius is the owner of that property.
were unloaded.
PROCEDURE TO BE FOLLOWED;
Article 825 – provides for the liability of the captain in
case of damage caused by his delay and after the cause 1. If the vessel is abandoned, the salvor must tow it
of the arrival under stress has ceased. to the nearest port where it will be delivered to
the Municipal Treasurer or Collector of Customs
SHIPWRECKS – is defined as the “demolition or who will advertise the fact of salvage.
shattering of a vessel cause by her driving ashore or on
rocks and shoals in the midseas, or by the violence of 2. If the owner of the salvaged vessel appears, he
winds and wages of tempests. (Black’s Law Dictionary). may take possession of the vessel and must pay
Provided under Articles 840 845. the reward not exceeding 50% of the value of
the vessel.
SALVAGE LAW Act No. 2616 February 4, 1916

BARRIOS V. CARLOS GO THONG & CO. Management Phil., Inc. v. NLRC G.R. No. 120276,
7 SCRA 535 July 2, 1997).
In the case of Barrios v. Carlos Go Thong & Co. 7

SCRA 535, vessel M/V Alfredo suffered engine failure
and drifted towards the open sea. While there was no
danger of being stranded or sinking as the weather VALLACE V. PIJETE 34 PHILS
was faire the sea was smooth, the vessel could not
mover on it own power. M/V Henry responded to an In the case of Vallace v. Pijete 34 Phils., the Schooner
SOSO distress signal from M/V Alfredo and towed the named Kodiak was lost off the coast of Mindoro and
vessel. abandoned by its captain and crew. (schooner is a
small sea-going sailing vessel with 2 masts – the mast
A sister ship of M/V Alfredo arrived and took over the of a sailing vessel is a tall spar, or arrangement of
towing service. The owner of M/V Henry expressly spars, erected more or less vertically on the centre-
waived its claim for compensation for the service done line of a ship or boat. Spar is a pole of wood, metal or
but the captain of said vessel made a salvage claim lightweight materials such as carbon fibre used in the
on the owner of M.V Alfredo. rigging of a sailing vessel to carry or support its sail.
These include booms and masts, which serve both to
ISSUE: deploy sail and resist compressive and bending
forces, as well as the bowsprit and spinnaker pole).
a) was M/V Alfred a valid salvage claim?
A report of her loss reached the Collectors of Customs
There was no salvage as there was no marine period who immediately issued a circular to all masters of
and the vessel was not a derelict as to warrant a valid steamers & vessels plying Philippine waters declaring
salvage claim for the towing of the vessel. M/V “Kodiak” a derelict and danger to navigation. Pijete &
Henry’s service to M/V Alfredo can be considered as a Co. chartered the coast guard cutter “Mindoro” (a
towing of the vessel which is considered as a quasi- cutter is a boat belonging to a ship fitted for roving and
contract of “towage “ because in consenting to M/V sailing) and proceeding to search for Kodiak and
Henry’s offer to tow the vessel. M/V Alfredo thereby found Kodiak floating and abandoned & under water.
impliedly entered into a juridical relation of “Towage”
with the owner of the towing vessel. Despite heavy sea, strong wind, Pijete succeeded in
towing her to the port of Pola, Mindoro.
b) was the captain of M/V Henry entitled to salvage
compensation?
Being safe at port, Pijete chartered Lakandula with
lighters and salve equipment for the use on Kodiak.
The captain of M/V Henry was not entitled to
Pending salvage operations, Vallace wrote Pijete
compensation since the contract is one of towage,
offering to pay for the services rendered and
only the owner of the towing vessel is entitled to
demanding the delivery of Kodiak. In the demand
remuneration but have already waived its claim for
letter, Vallace provided for a period of 10 days within
compensation for the service done.
which to reply, otherwise, they will not answer for any
expenses after that. No bills could be furnished within
Another term associated with Salvage or Maritime
the said period but the salvage operations continued.
Law is the term “DESERTION”. It is defined as an act
However, before the operations were completed,
by which a seaman deserts and abandons a ship or
Vallace instituted an action to recover possession of
vessel, in which he had engaged to perform a voyage,
Kodiak.
before the expiration of his time and without leave. By
desertion, it means an unauthorized absence from the
ship without any intention to return to her service. ISSUE: Wheter Pijete were entitled to the possession
of the vessel? The Court in the affirmative and
It is essential for desertion to exist that there must be declared that the salvors retains possession of the
amino non-revertendi as held in (Sing Ship vessel until the owner pays the reasonable expenses.

The demand made upon then has not legal effect. Canada-United States border. They are the largest
group of fresh water lakes on Earth. The Great Lakes-St.
HOW IS THE REWARD DETERMINED? Lawrence system is the largest fresh-water system in the
1) The value of the property saved and the world, totaling over 94,000 square miles. Sometimes
danger to which such property was referred to as inland seas, it is estimated that they hold
exposed six quadrillion gallons of water; 90 percent of the U.S.
2) The zeal employed and the labor supply and 20 percent of the world's supply. In addition
expended by the salvors in rendering the to these lakes in themselves, there is a great and vital
salvage service by those who made the system of channels connecting them.)
salvage
3) The danger/risk to lives of those who The THIRD involves stipulated consideration for the
participated salvage services. The Court in the case of C.S.
4) The number of persons who took part Robinson, et. al. v. the Ship Alta et al… held that “where
5) The services rendered or the promptitude, a stipulated compensation is dependent upon success
skill and energy displayed in rendering the and particularly of success within a limited time, it may
service and saving the property be very much larger than a mere quantum merit. Such
6) The expenses incurred. contracts will not be set aside by Courts unless corruptly
entered into, or made under fraudulent representation, a
Thus, if no claim for the vessel is made within 3 clear mistake or suppression of important facts, in
months after the publication of the advertisement, the immediate danger to the ship, or under other
municipal treasurer will sell the property saved at circumstances amounting to compulsion, or when their
public auction and the reward and expenses shall be enforcement would be contrary to equity and good
deducted from the proceeds. The balance is conscience.
deposited with the Treasurer.
If no one claims after 3 years, ½ shall go to the Case: Salvage agreement entered into to salvage
salvors and the other half to the government. vessel bring it to Cavite ascertain damages and put
her into a condition to sail to HK… for 15,000 pesos
If one vessel saves another vessel, the reward going (1905) however, vessel was not brought to HK…
to the former shall be divided as follows: ½ to the SO; salvors was only paid 3,000… so this case to recover
¼ to the captain and ¼ to the crew. the balance. 1) Is the salvor bound by contract?
Yes… 2) is salvor entitled to full compensation? NO…
case of quantum meruit… salvors did bring Alta to HK
KINDS OF SALVAGE SERVICES since it would cost them 22,000 which would no
longer be profitable for them. Court said they cannot
1) VOLUNTARY, wherein the compensation is claim.
dependent upon success;
2) RENDERED UNDER A CONTRACT FOR A However, in Erlanger & Galinger v. Swedish East
PER DIEM OR PER HORAM WAGE, payable at Asiatica Co., Ltd. 39 Phil. 178 – it held that “Quantum
all events; or Meruit” is not applicable. The Court said that
3) Under a contract for a compensation payable compensation as salvage should not be viewed by the
only in case of success. admiralty courts merely as pay on the principle of
quantum meruit or as a remuneration “pro opera er
NOTE: labore”, but as a reward given for perilous services,
voluntarily rendered, and as an inducement to
The FIRST and which is the most ancient class mariners to embark in such dangerous enterprises to
comprises cases of pure salvage. safe life and property. The amount should be liberal
enough to cover the expenses and to give an extra
The SECOND is the most common upon the Great sum as a reward for the services rendered. There is
Lakes …(the Great Lakes of the Laurentian Shield are a no fixed rule for salvage allowance. The allowance
group of five large lakes in North America on or near the rests on the sound discretion of the court or judge who
hears the case, hears the witnesses testify, and is liability of the common carrier for their loss, destruction
familiar with the environment of the rescue. An or deterioration.”
allowance for salvage should not be weighted in
golden scales, but should not be made as a reward for Hence, the New Civil Code is the primary law on goods
meritorious voluntary services, rendered at a time that are being transported from a foreign port to the
when danger of loss is imminent and for the purpose Philippines. Nevertheless, the COGSA remains to be a
of encouraging others in like services. suppletory law for such type of transportation –
international shipping.
SALVAGE TERMS: JETSAM AND FLOTSAM AND The term “goods” includes goods, wares, merchandise,
LIGAN. and articles of every kind whatsoever. Gods does not
include live animals and cargo which by the contract of
1) JETSAM ARE GOODS THAT WERE THROWN carries is stated as being carried on deck and is so
OFF A SHIP WHICH WAS IN DANGER. carried
2) Flotsam are goods that floated off the ship while
the ship was in danger or when it sank PARTIES: The carrier and the shipper are given their
3) Ligan are goods left at sea on the wreck tied to a respective rights and obligations under the COGSA. The
buy so that they can be recovered later. carrier who is covered by the COGSA is not limited to
the ship owner. The carrier includes the charterer who
Significance? The cargoes under these circumstances, enters into a contract of carriage with the shipper. In the
unless abandoned, are still the property of their original case of the charterer, the charterer charters a vessel and
owners. conducts his own business for his own account. After
chartering the vessel, the charterer uses the vessel to
MARITIME LIEN – a salvor, in maritime law, has an conduct a business of transportation obtaining goods
interest in the property; this is called a lien, but it never from third persons to transport the latter’s goods.
goes, in the absence of a contract expressly made, upon
the idea of debt due from the owner to the salvor but DUTIES OF A CARRIER – Section 2 of COGSA covers
upon the principle that the service creates a property in the carrier’s obligation and liabilities in relation to
the thing saved. The salvor is, to all intents and loading, handling, stowage, carriage, custody, care and
purposes, a joint owner and if the property is lost, he discharge of such goods. Section 3 enumerates the
must bear his share like the other joint owners. responsibilities of the carrier under COGSA subject to
(Fernandez vs. Thompson & Co. 38 Phil 683) the provisions of the Civil Code which serves as the
primary law.
CARRIAGE OF GOODS BY SEA (COGSA) Section 3, paragraphs (1) and (2) expresses the
2 overriding obligations of the carrier under prevailing
History: The COGSA was originally passed by the jurisprudence when COGSA was passed: (1) obligation
Congress of the United States on April 16, 1936 as to use due care with respect to the cargo and (2) the
Public Act No. 521. The US Congress gave the obligation to provide a seaworthy vessel at the beginning
Philippine Commonwealth the option to decide whether of the voyage.
or not to adopt the Act. The said law was later adopted
on October 22, 1936 through CA No. 65. It was DOCUMENT OF TITLE REQUIRED – Bills of Lading
explained in said CA that the COGSA “contains and Charter Party
advanced legislation, which is in consonance with
modern maritime rules and the practices of great NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD –
shipping countries of the world. Unlike the provisions of the Code of Commerce, the
notice of claim under COGS must be made within 3 days
The New Civil Code took effect on August 30, 1950, the from delivery if the damage is not apparent. The same
said Code became the primary law on carriage of goods period is not mandatory. However, the prescriptive
by sea. Among its provisions on common carriers is period of one year from delivery for the filing of the case
Article 1953 which provides that “the law of the country is a condition precedent or mandatory. (Section 3(6)
to which the goods are to be transported shall govern the COGSA).
Commission have been repealed by subsequent
Take note that the 1-year prescriptive period does not issuance. The powers of the Public Service Commission
apply to cases of misdelivery or conversion. are now being exercised by different government
agencies. Although the provisions of the Public Service
In the case of Domingo Ang v. American Steamship Act still defines the basic components and contents of
Agencies, Inc. January 27, 1967, the 1-year prescriptive regulation to be exercised by these government
period was not applied. The goods covered by the 2 agencies, there may be rules that are peculiar to each of
shipments subject matter of the case were delivered to them.
the notify parties, Davao Merchandising Corporation and
Herminio Teves, despite the latter’s inability to present There is no set of institutional model. Regulators differ in
the proper bills of lading and without the knowledge and terms of their position in the executive branch
consent of plaintiff-appellant Domingo Ang to whom (independent of, attached to, or under the administrative
were endorsed the said bills of lading. There is therefore supervision of, or being a cabinet level department
likewise misdelivery not nondelivery. itself); judicial status (quasi-judicial, whose decisions are
reviewed only by the CA or SC, or administrative, subject
DEFENSES AND IMMUNITIES – Section 4 COGSA. to review by the next higher bureaucratic level; single-
However, these defenses are subject to the amendatory headed or collegial, and if so, I the representatives from
provisions of the Civil Code. For instance, Section 4 (1) stakeholders), manner of their appointment (career,
provides, as a rule, that the carrier shall not be liable for presidential discretion, recommendation by relevant
loss or damage arising from unseaworthiness. Under stakeholders as ordained by law; with or without fiscal
the New Civil Code, the carrier will not be liable only if it autonomy. The insulation of the regulator from undue
can present proof that the unseaworthiness was caused external pressures and it ability to respond with
exclusively by any of the circumstances specified in appropriate technical standards are affected and
Article 1734 of the NCC. However, there is a enhanced by these institutional qualities.
presumption that the unseaworthiness is due to the
negligence of the carrier and its agent. The following regulatory agencies are as follows:
1) DOTC
2) LTFRB – land transportation
LIMITING PROVISION – As noted in Chapter 3, the 3) LTO – registration of drivers and motor vehicles
COGSA contains a provision that allowed the shipper to 4) MARINA – water transportation
recover only $500/package unless there is a special 5) PCG – concerned with safety in water
declaration unless the real value of the goods is transportation
declared. Applicable is Section 4(5) of COGSA.. 6) NTC – communication utilities and services,
Section 3(8) provides for limiting stipulations that are radio communications system, wire or wireless
considered void. “Any clause, covenant, or agreement in telephone and telegraph systems, radio and
a contract of carriage relieving the carrier of the ship television broadcasting systems and other
from liability for loss or damage to or in connection with similar public utilities.
the goods, arising from negligence, fault, or failure in the 7) ENERGY REGULATORY COMMISSION –
duties and obligations provided in this section or electric or power companies
lessening such liability otherwise than as provided in this 8) National Water Resources Counsel – water
Act, shall be NULL and VOID and of NO effect. A resources
benefit of insurance in favor of the carrier, or similar 9) Civil Aeronautics Board (CAB)– air
clause, shall be deemed to be a clause relieving the transportation particularly its economic aspects
carrier from liability. 10) Civil Aviation Authority of the Philippines (CAAP)
– undertakes the maintenance and operation of
PUBLIC SERVICE LAW airports and other similar facilities, registers
aircrafts and other incidents concerning the
The basic law that governs public service is the Public same and provides safety regulations in air
Service Act, Com. Act No. 146, as amended. However, transportation.
many of its provisions specifically those concerning the
organization and administration of the Public Service

BASES OF REGULATION OF PUBLIC UTILITIES – REGISTRATION OF AIRCRAFT – “Philippine aircraft”
The police power of the State justifies the regulation of means an aircraft registered in the Philippines in
public utilities. In other words, regulation of public accordance with the requirements of the Civil Aviation
utilities is founded upon the police powers of the State Authority Act of 2008. This is consistent with Article 17
and statutes prescribing rules for the control and Chapter III of the Chicago Convention which provides
regulation of public utilities are considered valid exercise that “aircraft have the nationality of the State in which
thereof. they are registered.” The Chicago Convention likewise
provides that every aircraft in international air navigation
The exercise of police power is justified because shall bear its appropriate nationality and registration
whenever private property is used for a public purpose marks.”
and is affected with public interest, it ceases to be juris The Chicago Convention provides that “an
private only and becomes subject to regulation. The aircraft cannot be validly registered in more than one
regulation is to promote the common good. Submission State, but its registration may be changed from one
to regulation may be withdrawn by the owner by State to another.
discontinuing use; but as long as use of the property is
continued, the same is subject to public regulation. RECORDING OF CONVEYANCES – All conveyances
made or executed, which affects the title to, or interest
AVIATION LAW in, any aircraft of Philippine registry, or any portion
thereof shall be registered with the Civil Aviation
AVIATION LAW – The 1st airplane flight was in February Authority of the Philippines (CAAP).
1911 by James Mars while the first cross-country flight
was by Thomas C. Baldwin in the same month. It was in a. The validity of voluntary dealings concerning
1919 when the 1st airline was organized by Joseph E.H. aircrafts with the CAAP is subject to the
Stevenot and Alfred C. Croft, the Philippine Airways following rules:
Service, Inc.
1) The registration is valid only with respect to the
The case of Jose Mendoza v. PAL, Inc. No. L- parties and their heirs, assignees, executors,
3678, February 29, 1952 is significant because the administrators, devisees or successor in interest,
question of whether airline companies may be and any person having actual notice thereof.
considered common carriers were raised considering its
non-Inclusion in the Code of Commerce. The Court held 2) The registration is valid as against all persons
that the obvious reason of its non-inclusion was that at and any instrument, recording of which is
the time of its promulgation, transportation by air on a required shall take effect from the date of its
commercial basis was not yet known. In the US where record in the books of the Authority, and not
air transportation has reached its highest development, from the date of its execution.
an airline company engaged in the transportation
business is regarded as a common carrier. b. The requirements are similar to the requirements in
land registration. It should be noted that under Section
CIVIL AVIATION – “AERONAUTICS OR AVIATION” 52 of the Property Registration Decree (PD 1529), the
refers to the science and art of flight. “Civil aviation” owner may use forms of deeds, mortgages, leases or
refers to the operation of any civil aircraft for the purpose other voluntary instruments as are sufficient in law. The
of general aviation operations, aerial work or commercial owner’s duplicate of the certificate of registration must be
air transport operations. presented before registration is effected.
“Aircraft” refers to any machine that can derive support in AIR TRANSPORTATION IN GENERAL – Air commerce
the atmosphere from the reactions of the air other than or commercial air transport operation refers to and
the reactions of the air against the earth’s surface. The includes scheduled air transport services for pay or hire,
term “aircraft”, when used in the Civil Aviation Act, shall the navigation of aircraft in furtherance of a business, the
refer to civil aircraft only, and will not include State or navigation of aircraft from one place to another for
public aircraft. operation in the conduct of a business, or an aircraft

operation involving the transport of passengers, cargo or aspects of air transportation. These include not only the
mail for remuneration or hire. airline companies but also such entities as General
Sales Agents, Cargo Sales Agents, Charterers, Air
a. Domestic air commerce – means and include air Freight Forwarders, Off-line Carriers and Air Taxi
commerce within the limits of the Philippines Operators.
territory.
b. Domestic air transport, means air transportation 1) General Sales Agent – means a person, who,
within the limits of the Philippine territory. pursuant to an authority from an airline, by itself
c. Foreign air transport, refers to air transportation or through an agent, sells or offers for sale any
between the Philippines and any place outside it air transportation or negotiates for or holds
or wholly outside the Philippines. himself by solicitation, advertisement or
d. International commercial air transport, refers to otherwise as one who sells, provides, furnishes,
the carriage by aircraft of persons or property for contract or arranges for, such air transportation.
remuneration or hire or the carriage of mail
between any two (2) or more countries. 2) Cargo Sales Agent – means any person who
does not directly operate an aircraft for the
PERSONS INVOLVED IN AIR TRANSPORTATION purpose of engaging in air transportation or air
– persons and entities involved in air transportation commerce and who, as principal or agent, sells,
that are regulated by the CAAP principally include or offers for sale any transportation of cargo, or
the air carrier or operator. Air operators may either negotiates for, or holds himself out by
be Philippine Air Carrier or a Foreign Air Carrier. solicitation, advertisement or otherwise as one
1) Air carrier or operator, refers to a person who who provides, sells, furnishes, contract or
undertakes, whether directly or indirectly, or by a arranges for, such air transportation or cargo.
lease or any other arrangements, to engage in
air transportation services or air commerce. 3) Air Freight Forwarder, means any indirect air
carrier which, in the ordinary and usual course of
2) Philippine air carrier, means an air carrier who its undertaking, assembles and consolidates or
is a citizen of the Philippines. provides for assembling and consolidating such
property and performs or provides for the
3) Foreign air carrier or foreign air operator, performance of break-bulking and distributing
means an operator, not being a Philippine air operations with respect to consolidated
operator, which undertakes, whether directly or shipments, and is responsible for the
indirectly or by lease or any other arrangement, transportation of property from the point of
to engage in commercial air transport operations receipt to the point of destination and utilizes for
within borders or airspace of the Philippines, the whole or any part of such transportation the
whether on a scheduled or chartered basis. services of a direct air-carrier.
4) Airman, refers to any individual who engages, 4) Off-line Carrier means any foreign air carrier not
as the person in command or as pilot, mechanic, certificated by the Board, but who maintains
aeronautical engineer, flight radio operator, or office or who has designated or appointed
member of the crew, in the navigation of aircraft agents or employees in the Philippines, who
while under way and any individual who is sells or offers for sale any air transportation in
directly in charge of inspection, maintenance, behalf of said foreign air carrier and/or other, or
overhauling, or repair of aircraft, aircraft engine, negotiate for, or holds itself out by solicitation,
propellers, or appliances and individual who advertisement or otherwise sells, provides,
serves in the capacity of aircraft dispatcher or air furnishes, contract, or arranges for such
traffic control operator. transportation.
5) Air Taxi Operator means an air carrier utilizing

CIVIL AERONAUTICS BOARD (CAB) – regulates small aircraft for charter trip and/or individual
persons and entities that are involved in the economic service transportation within the territory of the
Republic of the Philippines with proper Nature of a Legislative Franchise – in the case of
certification and permit from the CAB. Republic of the Philippines v. RETELCO 265 SCRA 1
(1996), the Court declared that a telephone company
CHARTER OF AIRCRAFT – Charter trips are likewise having a legislative franchise, where nothing is stated in
regulated by the CAB. Charter flight or charter trip the franchise, cannot presume that it has an exclusive
means air transportation performed by an air carrier right as prior operator over the area. Judicial notice is
where the entire capacity of one or more aircraft, or less taken of the fact that all legislative franchises for the
than the entire capacity of an aircraft, has been engaged operation of telephone system contain the provisions
for the movement of persons and their personnel that “in the event the Philippine Government should
baggage or for the movement of property on a time, desire to maintain and operate for itself the system and
mileage or trip basis. enterprise authorized, the grantee shall surrender his
franchise and will turn over to the Government said
CLASSIFICATION OF CHARTER AIRCRAFT system and all serviceable equipment therein, at cost les
reasonable depreciation.”
1) On Route Charter shall refer to service
performed by an air carrier between points which Under Section of Telecommunications may
said carrier is authorized to provide service operate and maintain wire telephone or radio
pursuant to tis CPC and necessity or foreign air communications through the Philippines by utilizing
carrier permit. Off-Rout Charter shall refer to existing facilities in cities, towns and provinces under
any charter that is not On-route. such terms and conditions or arrangement with present
owners or operators as may be agreed upon to the
2) Pro-rata Charter means a charter the cost of satisfaction of all concerned. The lack of prior
which is divided among the passengers negotiations with the existing telephone system operator
transported. does not render illegal the operation by the Bureau of
such telephone system.
3) Single Entity Charter means a charter the cost of
which is borne by the charterer and not by NOTICE and HEARING REQUIRED: In the following
individual passengers, directly or indirectly. cases the powers of the Public Service Commission
(PSC) may be exercised upon previous notice and
4) Mixed Charter means a charter the cost of which hearing
is borne, or pursuant to a contract may be 1. Issuance of CPC and CPC and N
borne, partly by the charter participants and 2. Fixing rates, tolls and charges
partly by the charterer. 3. Setting up of just and reasonable standards
classifications.
4. Issuance of orders requiring public services to
establish and maintain extension of facilities
PUBLIC SERVICE LAW 5. Suspension, revocation, modification of CPC
and CPC&N (Sec. 26, CA 146)
CERTIFICATE OF PUBLIC CONVENIENCE – is an NO NEEED OF NOTICE AND HEARING – the following

authorization issued by the Commission or( the public cases, the PSC may exercise powers without previous
service regulatory bodies)for the operation of public notice and hearing.
services for which no franchise either municipal or
legislative is required. For example: transportation 1. Investigate any matter concerning public
services, jeepney, hauler trucks. It is distinguished from services
a Certificate of Convenience and Necessity by the 2. Require any public service to furnish safe,
requirement that the public utility jave to first secure a adequate and proper service
municipal or legislative franchise for the operation of the 3. Appraise and value the property of any public
public service. Example: electric, telephone. service
4. Grant any public service, special permits to
make extra or special trips
5. Require any public service to properly keep facilities, factory building, dams resevoirs electric light
books, records and accounts; and to make a and power systems necessary or useful in the conduct of
report on its finances; and industry and commerce or in the attainment of the
6. Require public service to comply with laws and purpose and objectives of the Decrees, PIA was held to
ordinances (Sec. 17) be authorized to render indirect service to the public by
its administration of the PHIVIDEC Industrial areas, and
Distinction between CPC from CPC and N – A CPC is may therefore be considered a public utility. Hence, a
issued whenever the Commission finds that the CPC is not necessary for it to avail of a direct power
operation of the proposed service will promote public connection from the NPC. However, such authority to be
interests in a proper and suitable manner, for which a C a public utility may not be exercised in such a manner as
& N is issued upon approval of any franchise in the to prejudice the right of existing franchises, and cannot
judgment of the Commission, such franchise or privilege be obtained unless due hearing is made where it is
will properly conserve the public interest. (CF MICP established that the affective private franchise holder is
Case) incapable or unwilling to match the reliability and rates of
the NPC.
PRIOR OPERATOR RULE – Before permitting a new
operator to invade the territory of another already That in determining whether a public utility may avail of
established with a CPC, the prior operator must first be direct power supply from the NPC, the rule is that direct
given the opportunity to extend its service in order to connection with NPC cannot be obtained unless due
meet the needs of the public in the matter of hearing is made where it is established that the affected
transportation. Exceptions would be – if public interest franchise holder is incapable or unwilling to match the
would be better served by the new operator as when the reliability and rates of NPC, in determining such issue,
prior operator has failed, despite, ample time and NPC is certainly not the proper forum.
opportunity given by it by the Commission, to render
adequate, sufficient and satisfactory service and had The determination of which two public utilities has the
violated the important conditions of the certificate. right to supply electric power to an area is not a rate-
fixing function which remained with the ERC, since it
deals with the regulation of the distribution of energy
PRIOR APPLICANT RULE - where there are various resources which under EO 172 was expressly a function
applicants for a public utility over the same territory, all of ERB. However, with the enactment of RA 7638, the
conditions being equal, priority in the filing of the Department of Energy took over such function and it is
application for a CPC becomes an important factor in not the Department which shall then determine such
granting or refusal of a certificate. issue.
In National Power Co. v. CA, September 26, 1997, the

Court stressed the necessity of a hearing to protect prior In the case of San Pablo vs. Pantranco South
operator. In this case PHIVIDEC Industrial Authority Express, Inc., 153 SCRA 199 (1987), the facts show
(PIA), was created under P.D. 538 to carry out the that Pantranco is engaged in the land transportation
government policy to encourage, promote and sustain business with various CPC to operate passenger
economic and social growth of the country within a buses from Metro Manila to the Bicol Region and
definite industrial area 9PIE-MO), which was within the Eastern Samar.
franchise area of CEPALCO. PIA negotiated with the
(National Power Corporation (NP for the direct supply of Pantranco through its counsel, wrote the MARINA
power directly to the pIA are where CEPALCO has a requesting authority to lease/purchase a vessel
franchise. PIA contends that it can receive power named M.V Black Double to be used for its project to
directly from NPC because it is a public utility, since PD operate a ferry boat service for its exclusive use in the
538 empowers PIA “as and to be a public utility to ferrying of its passenger buses and cargo trucks from
operate and serve the power need within the PIE-MO. Matnog, Sorsogon and Allen Samar, that will provide
service to their company buses and freight trucks that
The Supreme Court rules that since PD No. 538 have to cross the San Bernardino Strait. Pantranco
empowers PIA to operate and maintain infrastructure contended that its operation of a ferry service is
private in character and not as a common carrier. 3) Divinagracia v. Consolidated Broadcasting
San Pablo and Cardinal Shipping Corporation, who System, Inc. G.R. No. 162272, April 7, 2009.
are franchise holders of the ferry service in this area, 4) PLDT v. NTC G.R. No. 88404 (PLDT refuses to
interposed their opposition. ISSUE: whether or not interconnect with other domestic
the sea can be considered as a continuation of the telecommunications carriers. SC ruled that
highway. The corollary issue is whether a land PLDT cannot refuse)
transportation company can be authorized to operate
a ferry service or coastwise or inter-island shipping DISTINCTIONS BETWEEN THE CIVIL CODE, CODE
service along its authorized route as an incident to its OF COMMERCE AND COGSA
franchise, without the need of filing a separation
application for the same. 1. DILIGENCE REQUIREMENT
a. Civil Code – Extraordinary
The SC took judicial notice of the fact as Diligence(EOD)
shown in the examination of the map of the b. Code of Commerce – Ordinary diligence
Philippines, that Matnog which is on the southern tip but modified by the Articles of the Civil
of the island of Luzon and within the provice of Code which requires them to observe
Sorsogon is traversed by the San Bernardino Strait EOD
which leads towards the Pacific Ocean and does not c. COGSA Sec. 3 (1) The carrier shall be
constitute a small body of water as alleged by bound before and at the beginning of the
Pantranco. Taking into consideration the voyage to exercise due diligence to -
environmental circumstances of the case, the i. Make the ship seaworthy
conveyance of passengers, trucks and cargoes from ii. Properly man, equip and supply
Matnog to Allen is certainly not a ferryboat service but the ship;
a coastwise or inter-island shipping service. Under iii. Make the holds, refrigerating
No circumstances can the sea between Matnog and and cooling chambers, and all
Allen be considered a continuate of the highway. other parts of the ship in which
goods are carried, fit and safe
Pantranco was required to secure a separate for reception, carriage and
CPC for the operation of an inter-island coastwise preservation.
shipping service in accordance with the provisions of
law and that its CPC as a bus transportation cannot 2. EXCULPATORY CAUSES
be merely amended to include this water service a. Civil Code - Article 1734
under the guise that it is a mere private ferry service. b. Code of Commerce – Article 361 is
modified by the provision of the New
Civil Code when applied to common
OWNERSHIP OF FACILTIES – The SC clarified in carriers and COGSA in cases of
Tatad v. Garcia Jr. 243 SCRA 436 (1995), that the limit transportation of goods by water in
imposed by the Constitution on foreign equity applies foreign trade
only to the operation of a public utility and not to c. COGSA – Section 4(2). There 17
ownership of the facilities. carrier’s immunities specifically
enumerated, all of which by the terms pf
the act must be proved by the carrier
CASES IN PUBLIC UTILITIES – CPC AND CPC AND N 3. BURDEN OF PROOF

1) Radio Communications Inc. v. National a. Civil Code - Article 1735
Telecommunications Commission 150 S 450 b. Code of Commerce – same as the Civil
(distinction between franchise and CPC) Code
2) Associated Communications & Wireless Service- c. COGSA – to establish a prima facie
United Broadcasting Networks V. NTC case of liability against the carrier,
G.R.144109 Feb. 17, 2003. shipper has the burden of proving that
the cargo was received by the carrier in
good condition and that cargo was liability in case of loss of goods or injury to persons.
damaged upon delivery by the carrier at Article 1733 and 1755 of the Civil Code.
its destination
. 2. ACTUS DEI NEMINI FACIT INJURAM
4. DURATION OF CARRIER’S LIABILITY The act of God prejudices no one.
a. Civil Code – Article 1736, 1737 and
1738 USAGE: Use the maxim in support of arguments
b. Code of Commerce – same exempting common carriers from liability Article 1734 (1)
c. COGSA – the term carriage of goods
covers the period from the time when 3. CAUSE PROXIMA NON REMOTA
the goods are loaded to the time when The immediate, not the remote cause is Spectatur to be
they are discharged from the ship or considered.
from the point of loading to the point of
discharge. USAGE: Use this maxim in conjunction with Article 1739
to 1742
5. STIPULATION LIMITING LIABILITY
a. New Civil Code – Article 1744, 1746, 4. IN JURE NON REMOTA CAUSE, SED PROXIMA
1751 and 1752 SPECTATUR
b. Code of Commerce – same In law, the proximate, and not the remote, Cause is to be
c. COGSA – per package limitation (Sec. regarded
4(5)) or freight unit if the Court cannot
determine if the goods are in shipped in USAGE: Use this maxim in conjunction with Article 1739
packages. The package limitation will to 1742
be based on the customary freight unit
which is defined as “the unit upon which 5. JUS PUBLICUM PRIVATORIUM PACTIS MUTARI
the charge for freight is computed”. Take NON PROTEST
note, the package limitation does not Public law is not to be superseded by private
apply if the nature and value of the agreements.
goods have been declared by the
shipper before shipment and inserted in USAGE: Use this maxim in rrelation to stipulations
the B/L. Such declaration shall be prima limiting a common carrier’s liability for loss of goods
facie evidence, but shall not be under Articles 1744 to 1747
conclusive on the carrier.
6. LATA CULPA MALA FIDE AEQUIPARATUR
6. PRESCRIPTION OF ACTION Gross negligence is equivalent to bad faith.
a. Code of Commerce – Article 366/ Statue
of Limitation under the Civil Code USAGE: Use this to justify the award of moral damages
b. COGSA – three (3) days and one (1) when the common carrier acted with gross negligence
year amounting to bad faith.
7. NULLA PACTIONE EFFICI POTEST UT DOLUS

LATIN MAXIMS IN TRANSPORTATION LAW PRAESTETUR
By no contract can it be arranged that a man shall
MAXIM and MEANING AND USAGE be indemnified against responsibility for his own
fraud.
1. ABUNDANCE CAUTELA NON NOCET
There is no harm done by great caution USAGE: This maxim may be used also in conjunction
with stipulations limiting or exempting a common
USAGE: This maxim can be used to underscore the duty carrier’s liability for loss of goods under Article 1744 to
of common carriers to exercise EOD and the necessity 1747.
of proving the exercise of the same to be free from

8. SEMPER PRAESUMUR PRO NEGANTE
The presumption is always in favor of the
Negative.
USAGE: Use this maxim to emphasize the presumption

of fault or negligence in Article 1735.
9. VERBA FORTIUS ACCIPIUNTUR CONTRA

PROFERNTEM
Words must be construed against those who use
them.
USAGE: Use this in support of arguments to strike down

maritime contracts which are considered contracts of
adhesion


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MARCH 15, 2021

WHAT ARE PETTY AND ORDINARY AVERAGES?

These are expenses or losses. And are classified into

Article 806. For the purposes of this Code the following

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WHAT IS THIS PERIOD? Fourth factor to be considered, that the expenses or

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Article 815. The captain shall supervise the jettison, and

The expenses for the refuge in Manila cannot be

Ruling: The SC rejected the argument of the ship

WHO SHALL BEAR THE EXPENSES AND GROSS

MAGSAYSAY, INC. V. AGAN HOW IS LIQUIDATION MADE?

If the latter shall object, and the captain and officers, or a

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ALBERT| ALCANTARA| ALCORAN| ALCROAN | AMPATUAN |CAPIN| CEROS| EGINA| GARCIA | 9

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ALBERT| ALCANTARA| ALCORAN| ALCROAN | AMPATUAN |CAPIN| CEROS| EGINA| GARCIA | 11

Although negligence on the part of the mate of

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This is what you call the doctrine of inscrutable fault.

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EX = Unless no proof of fault against the farther vessel.

WHAT IS A MARITIME PROTEST?

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Sec. 6. If, while the vessel or things saved are at the

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The captain of MV Henry I was not entitled to

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HOW IS THE REWARD DETERMINED?

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In the case of Barrios v. Carlos Go Thong & Co. 7

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ALBERT| ALCANTARA| ALCORAN| ALCROAN | AMPATUAN |CAPIN| CEROS| EGINA| GARCIA | 26

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5) Air Taxi Operator means an air carrier utilizing

CERTIFICATE OF PUBLIC CONVENIENCE – is an NO NEEED OF NOTICE AND HEARING – the following

In National Power Co. v. CA, September 26, 1997, the

CASES IN PUBLIC UTILITIES – CPC AND CPC AND N 3. BURDEN OF PROOF

7. NULLA PACTIONE EFFICI POTEST UT DOLUS

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USAGE: Use this maxim to emphasize the presumption

9. VERBA FORTIUS ACCIPIUNTUR CONTRA

USAGE: Use this in support of arguments to strike down

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