10/09/2021

TRANSPORTATION LAWS NOTES

CARRIAGE OF GOODS BY SEA ACT

COGSA
(COMMONWEALTH ACT NO. 65)

OVERVIEW
Definition of Bill of Lading

3-fold character of Bill of Lading

1. RECEIPT
It is a receipt for the goods shipped and a contract to
transport and deliver the same as therein stipulated.
2. CONTRACT
As a contract, it names the parties, which includes
the consignee, fixes the route, destination, and
freight rates or charges, and stipulates the rights and
obligations assumed by the parties. Being a contract,
it is the law between the parties. Being a contract, it is
the law between the parties who are bound by its
terms and conditions provided that these are not
contrary to law, morals, good customs, public order,
and public policy.
3. EVIDENCE
It serves as an evidence of a binding contract. A bill of
lading usually becomes effective upon its delivery to
and acceptance by the shipper. It is presumed that
the stipulations of the bill were, in the absence of
fraud, concealment or improper conduct, known to
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the shipper, and he is generally bound by his
acceptance whether he reads the bill or not.

APPLICATION OF COGSA

The law of the country to which the goods are to be

transported governs the liability of the common carrier in
case of their loss, destruction or deterioration.

If the cargoes in question were transported from the foreign

country to the Philippines, the liability of the carrier is
governed primarily by the:
1. Civil Code
2. Code of Commerce
3. COGSA
NOTE: IMPORTING of goods from a foreign country
to Philippines - governing law - Civil Code;
suppletory law - law of the foreign country.

PERIOD FOR FILING CLAIMS UNDER COGSA

★ The claim for damages must be filed within one year from
the date of delivery of the goods or the date when the goods
should have been delivered.
★ Failure to file a notice within three days will not bar
recovery if it is nonetheless filed within one year
★ This one-year prescriptive period also applies to the
shipper, the consignee, the insurer of goods or any
legal holder of the bill of lading.
★ Take note that the one-year prescriptive period under
the COGSA applies when the case involves loss of goods
or cargo.
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WHAT IS THE MEANING OF LOSS UNDER THE COGSA?

The term “loss” under the COGSA contemplates merely a

situation where no delivery at all was made by the
shipper of the goods because the same had perished, gone
out of commerce, or disappeared in such a way that their
existence is unknown or they cannot be recovered.

RESPONSIBILITIES OF THE CARRIER UNDER COGSA

(Section 3, COGSA)

1. The carrier shall be bound, before and at the beginning of the

voyage, to exercise due diligence to:
a. Make the ship seaworthy;
b. Properly man, equip and supply the ship;
c. Make the holds, refrigerating and cooling chambers,
and all other parts of the ship in which goods are
carried, fit and safe for their reception carriage and
preservation
2. The carrier shall properly and carefully load, handle, stow,
curry, keep, care for, and discharge the goods carried.
3. After receiving the goods into his charge the carrier, or the
master or agent of the carrier, shall, on demand of the
shipper, issue to the shipper a bill of lading showing
among other things ---
a. The loading marks necessary for identification of the
goods as the same are furnished in writing by the
shipper before the loading of such goods starts,
provided such marks are stamped or otherwise
shown clearly upon the goods if uncovered, in such a
manner as should ordinarily remain legible until the
end of the voyage.
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b. Either the number of packages or pieces, or the
quantity or weight, as the case may be, as furnished
in writing by the shipper.
c. The apparent order and condition of the goods:
Provided, That no carrier, master, or agent of the
carrier, shall be bound to state or show in the bill of
lading any marks, number, quantity, or weight which
he has reasonable ground for suspecting not
accurately to represent the goods actually received or
which he has had no reasonable means of checking

RIGHTS AND IMMUNITIES OF THE CARRIER UNDER COGSA

(Section 4, COGSA)

1. Neither the carrier nor the ship shall be liable for

loss or damages arising or resulting from
unseaworthiness unless caused by want of due diligence
on the part of the carrier to make the ship seaworthy, and to
secure that the ship is properly manned, equipped, and
supplied, and to make the holds, refrigerating and cooling
chambers, and all other parts of the ship in which goods are
carried fit and safe for their reception, carriage, and
preservation, in accordance with the provisions of paragraph
(1) of Section (3). Whenever loss or damage has
resulted from unseaworthiness, the burden of
proving the exercise of due diligence shall be on the
carrier or other persons claiming exemption under
this section.
2. Neither the carrier nor the ship shall be responsible for loss
or damage arising or resulting from — (note: under quasi-
delict only; exempting circumstances)
a. Act, neglect, or default of the master, mariner, pilot,
or the servants of the carrier in the navigation or in
the management of the ship;
b. Fire, unless caused by the actual fault or privity of the
carrier;
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c. Perils, dangers, and accidents of the sea or other
navigable waters;
d. Act of God;
e. Act of war;
f. Act of public enemies;
g. Arrest or restraint of princes, rulers, or people, or
seizure under legal process;
h. Quarantine restrictions;
i. Act or omission of the shipper or owner of the goods,
his agent or representative;
j. Strikes or lockouts or stoppage or restraint of labor
from whatever cause, whether partial or general:
Provided, That nothing herein contained shall be
construed to relieve a carrier from responsibility for
the carrier’s own acts;
k. Riots and civil commotions;
l. Saving or attempting to save life or property at sea;
m. Wastage in bulk or weight or any other loss or
damage arising from inherent defect, quality, or vice
of the goods;
n. Insufficiency of packing;
o. Insufficiency or inadequacy of marks;
p. Latent defects not discoverable by due diligence; and
q. Any other cause arising without the actual fault and
privity of the carrier and without the fault or neglect
of the agents or servants of the carrier, but the
burden of proof shall be on the person claiming the
benefit of this exception to show that neither the
actual fault or privity of the carrier

NOTES:
PRESCRIPTIVE PERIOD
(Section 2, paragraph 6, COGSA)
(6) Unless notice of loss or damage and the general nature of such
loss or damage be given in writing to the carrier or his agent at the port of
discharge or at the time of the removal of the goods into the custody of the
person entitled to delivery thereof under the contract of carriage, such
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removal shall be prima facie evidence of the delivery by the carrier of the
goods as described in the bill of lading. If the loss or damage is not
apparent, the notice must be given within three days of the delivery.

Said notice of loss or damage may be endorsed upon the receipt for
the goods given by the person taking delivery thereof.

The notice in writing need not be given if the state of the goods has at
the time of their receipt been the subject of joint survey or inspection.

In any event the carrier and the ship shall be discharged from all
liability in respect of loss or damage unless suit is brought within one
year after delivery of the goods or the date when the goods should
have been delivered: Provided, That, if a notice of loss or damage, either
apparent or concealed, is not given as provided for in this section, that fact
shall not affect or prejudice, the right of the shipper to bring suit within one
year after the delivery of the goods or the date when the goods
should have been delivered.

In the case of any actual or apprehended loss or damage, the carrier

and the receiver shall give all reasonable facilities to each other for inspecting
and tallying the goods.

KEY POINTS:
● The 3 day rule is condition precedent but it can be waived.
(essence of the rule: for immediate recovery)
● If the damage is apparent:
➢ 1-year prescriptive period shall commence from the
time the carrier leaves the Philippine port.
● Insurance should also be knowledgeable about the
prescriptive period.

Issue: Whether or not the prescriptive period of one year under the
said Act also applies to an insurer.

Yes. The prescriptive period applies to an insurer. Clearly,

the coverage of the Act includes the insurer of the goods.
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Otherwise, what the Act intends to prohibit after the lapse of
the one- year prescriptive period can be done indirectly by
the shipper or owner of the goods by simply filing a claim
against the insurer even after the lapse of one year. This
would be the result if we follow petitioner’s argument that the
insurer can, at any time, proceed against the carrier and the
ship since it is not bound by the time-bar provision. In this
situation, the one-year limitation will be practically useless.
This could not have been the intention of the law which has
also for its purpose the protection of the carrier and the ship
from fraudulent claims by having “matters affecting
transportation of goods by sea be decided in as short a time
as possible” and by avoiding incidents which would
“unnecessarily extend the period and permit delays in the
settlement of questions affecting the transportation.” (See
The Yek Tong Fire and Marine Insurance Co., Ltd. u
American President Lines, Inc.103 Phil. 1125-1126)

In the case at bar, the petitioner’s action had prescribed

under the provisions of the Carriage of Goods by Sea Act.
Hence, whether it files a third-party complaint or chooses to
maintain an independent action against herein respondents
is of no moment. Had the plaintiffs in the civil cases below
filed an action against the petitioner after the one-year
prescriptive period, then the latter could have successfully
denied liability on the ground that by their own doing, the
plaintiffs had prevented the petitioner from being subrogated
to their respective rights against the herein respondents by
filing a suit after the one-year prescriptive period. The
situation, however, does not obtain in the present case. The
plaintiffs in the civil cases below gave extrajudicial notice to
their respective carriers and filed suit against the petitioner
well within one year from their receipt of the goods. The
petitioner had plenty of time within which to act. In Civil
Case No. 109911, the petitioner had more than four months to
file a third-party complaint while in Civil Case No. 110061, it
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had more than five months to do so. In both instances,
however, the petitioner failed to file the appropriate action.

Under Section 3(6) of the Carriage of Goods by Sea

Act, only the carrier’s liability is extinguished if no
suit is brought within one year

NOTE:
Read case of Domingo Ang vs Compania Maritima p. 297
● Loss - COGSA
● Misdelivery - NCC (10 yrs prescriptive period)
● Quasi-delict - NCC (4 years)

PUBLIC SERVICE ACT

Commonwealth Act No. 146

PUBLIC SERVICE
includes every person that now or hereafter may own,
operate, manage, or control in the Philippines, for
hire or compensation, with general or limited
clientele, whether permanent, occasional or
accidental, and done for general business purposes,
any common carrier, railroad, street railway,
traction railway, subway motor vehicle, either for
freight or passenger or both, with or without fixed
route and whatever may be its classification, freight or
carrier service of any class, express service, steamboat, or
steamship line, pontines, ferries, and watercraft, engaged in
the transportation of passengers or freight or both, shipyard,
marine railway, marine repair shop, wharf or dock, ice plant,
ice-refrigeration plant, canal irrigation system, gas, electric
light, heat and power, water supply power, petroleum,
sewerage system, wire or wireless communication systems,
wire or wireless broadcasting stations and other similar
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public services [Commonwealth No. 146, Section 13
(b)]

JURISDICTION OF PUBLIC SERVICE COMMISSION

The Commission shall have jurisdiction, supervision,

and control over all public services and their
franchises, equipment, and other properties, and in
the exercise of its authority, it shall have the
necessary powers and the aid of the public force:
Provided, That public service owned or operated by
government entities or government-owned or -controlled
corporations shall be regulated by the Commission in the
same way as privately-owned public services, but certificates
of public convenience or certificates of public convenience
and necessity shall not be required of such entities or
corporations. [Commonwealth Act No. 146, Section 13
(a)]

WHAT ARE THE GOVERNMENT AGENCIES THAT REPLACED

THE PUBLIC SERVICE COMMISSION?

1. Land Transportation Franchising and Regulatory Board - land

transportation
2. Maritime Industry Authority (MARINA) - water transportation
3. National Telecommunications Commission - communication utilities
and services, radio communication systems, wire or wireless
telephone and telegraph systems, radio and television broadcasting
system and other similar public utilities
4. Energy Regulatory Board - electric or power companies
5. National Water Resources Council - water resources
6. Civil Aviation Authority - air transportation
7. Department of Transportation - trains or railroad companies
8. Toll Regulatory Board - toll facilities
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CERTIFICATE OF PUBLIC CONVENIENCE (CPC)

and CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY
(CPCN)

CPN is distinct from CPCN. CPC is any authorization to operate

public service within the Philippines for which no franchise, either municipal
or legislative, is required by law. CPCN, on the other hand, requires a
franchise issued by the legislative department before the issuance of the said
certificate.

WHO ARE EXEMPTED FROM SECURING CPC?

1. Warehouses
2. Animal-drawn vehicles or bana powered by oar or by sail; tug boats
and lighters
3. Airships except as to fixing rates
4. Radio companies, except as to fixing rates
5. Ice plants
6. Public market
7. Public utilities operated by the national government or political
subdivision except as to rates

Prior applicant rule.

Where there are various applicants for a public utility over
the same territory, all conditions being equal, priority in the
filing of the application for a certificate of public convenience
becomes an important factor in the granting or refusal of a
certificate. (Read Tomas Litimco vs. La Mallorca, 1962)

Prior or old operator rule.

To carry out the purpose and intent to which the PSC was
created, the law contemplates that the first licensee will be
protected in his investment and will not be subjected to
ruinous competition. It is not therefore, the policy of the law
for the PSC to issue a CPC to a second operator when a prior
operator is rendering sufficient, adequate and satisfactory
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service, and who in all things and respects is complying with

the rules and regulations of the Commission.

Note however that CPC may be granted to a new operator

without giving the old operator an opportunity to improve its
equipment and service. (Read Fortunato Halili vs Ruperto
Cruz, 1978 and Raymundo Transportation Co. vs Cerda,
1956)

Convenience of the public is the primary

consideration above the prior operator and protection of
investment rules.

Registered Owner Rule

The rule in this jurisdiction is that the person who is the
registered owner of a vehicle is liable for any
damages caused by the negligent operation of the
vehicle although the same was already sold or
conveyed to another person at the time of the
accident. The registered owner is liable to the injured party
subject to his right to recourse against the transferee or the
buyer. (Gaudioso Erezo et al vs. Aguedo Jepte GR No. L-
9650, 1957)

Is this true with leased vehicles?

Yes, the registered owner is also liable even if the vehicle was
leased to another person. (BA Finance Corporation vs Ca,
1992)

On stolen vehicles?
The registered owner is not liable if the vehicle was taken
from his garage with his knowledge and consent. To hold the
registered owner liable would be absurd as it would be
holding the owner liable of the stolen vehicle for an accident
caused by the person who stole such vehicle.
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KABIT SYSTEM
The registered owner rule is applicable whenever the persons
involved are engaged in what is known as the kabit system.
The “kabit system'' is an arrangement whereby a person
who has been granted a certificate of public
convenience allows other persons, who own motor
vehicles, to operate them under his license,
sometimes for a fee or percentage of the earnings.
Although the parties to such an agreement are not outrightly
penalized by law, the kabit system is invariably recognized as
being contrary to public policy and therefore, void and
inexistent under Article 1409 of the Civil Code. (Abelardo
Lim, et al vs. CA, 2002)

WARSAW CONVENTION

Applies to international transportation by air. There

is international transportation when:
a. The place of departure and the place of destination
are within the territories of two contracting parties
regardless of whether or not there was a break in the
transportation or transshipment; or
b. The place of departure and the place of destination
are within the territory of a single contracting
country if there is an agreed stopping place within a
territory subject to sovereignty, mandate or authority
of another power, even though the power is not a
party to the Convention.

TRANSPORTATION BY AIR

The period during which the baggage or goods are in

charge of the carrier, whether in an airport or on board an
aircraft, or in case of a landing outside an airport, in place
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whatsoever.
If transportation takes place in the
performance of a contract for transportation by air,
for the purpose of loading, delivery, transshipment, any
damage is presumed, subject to proof to contrary, to
have been the result of an event which took place
during the transportation by air.

DAMAGE OR INJURY FOR WHICH

THE CARRIER IS LIABLE

A. Passenger - injury took place:

● On board the aircraft
● In the course of any operations of embarking
● In the course of disembarking
● When there was or because of delay

B. Checked-in luggage or goods - damage occurred

during air transportation or when there is delay

LIMIT OF LIABILITY OF CARRIER

A. Carriage of passengers - 125, 000 francs (Swiss

currency), except:
● By special contract, the carrier and the
passenger may agree to a higher limit of
liability.
● The limit for a passenger's death or injury is
75,000 dollars inclusive of legal fees where
the US is origin, destination or stopping
place

B. Carriage of registered baggage and of cargo - 250

francs per kilogram, except:
If the passenger or consignor has made, at
the time when the package was handed over
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the carrier, a special declaration of interest in
delivery at destination and has paid a
supplementary sum if the case so requires.

C. Objects of which the passenger takes charge himself -

5,000 francs per passenger.

JURISDICTION/VENUE

1. The court where the carrier is domiciled;

2. The court where the carrier has its principal place of
business;
3. The court where the carrier has an establishment by
which the contract has been made; or
4. The court of the place of destination

NOTICE OF CLAIM/COMPLAINT
AND PRESCRIPTIVE PERIOD

a. Notice of claim/complaint is mandatory or a

condition precedent. It must be filed with the
international carrier:
1. Baggage - within 3 days from receipt;
2. Baggage - in case of delay of delivery, within
14 days from the time the baggage was
placed at the disposal of the passenger;
3. Goods - 7 days from the delivery

b. Prescription of action
1. Two years from receipt in case of an action
for damage to passenger’s baggage;
2. If the action is for tort including
humiliation at the hands of the airline
employees, the case may be filed within 4
years.
NOTE: MISDELIVERY can be applied in Warsaw but not in COGSA