ARTICLE 1734

Presumes the carrier is responsible for loss, destruction, or deterioration unless the cause is by
reason of any of the cases listed in Art. 1734

- Actual or constructive loss

- Total or partial loss

Direct causal connection

- Carrier must prove direct causal connection between the loss, deterioration, or destruction of
goods, and any of the listed cases (proximate cause)

- No need to prove extraordinary diligence if cause is any of the cases listed

- Direct causal connection in criminal cases (proof beyond reasonable doubt)
- Direct causal connection in civil cases (preponderance of evidence)
- in re: Article 1739 – natural disaster must be the proximate and only cause of loss; carrier
must exercise due diligence to prevent loss.

- in re: Article 1740 – natural disaster will not exempt carrier if the latter negligently incurs in
delay in transporting the goods.

- there is delay when the obligee demands (judicially or extrajudicially) fulfillment of the
obligation but the obligor fails to perform it without just cause.

- demand is not necessary when:

- the obligation or the law expressly states so;
- the time of delivery is a controlling motive for the establishment of the contract;
- demand is useless, as in when the obligor has rendered it beyond his power to
perform the obligation.
ARTICLE 1735

- Does not include cases under Article 1734; includes fortuitous events
- Carrier presumed responsible for the loss, deterioration, or destruction
- Carrier must prove extraordinary diligence to be exempt from liability

- Prima facie presumption of negligence

- good condition of goods upon delivery to carrier; bad condition of goods upon delivery
to consignee/recipient
ARTICLE 1736

- Extraordinary diligence starts from the time the goods are unconditionally received by the
carrier for transport, until:

o The goods are delivered to the consignee or to a person who has the right to receive them by
actual or constructive delivery; or

o The goods are stored in a warehouse of the carrier at the place of destination, when the
consignee has been advised of the arrival and has had reasonable opportunity to remove or
dispose of the goods.

- Extraordinary diligence remains even if the goods are temporarily unloaded or stored in transit
except when the shipper or owner has made use of the right of stoppage in transitu.
CONTRACT OF COMMON CARRIAGE

- Consent
- Object
- Consideration or cause

Bill of Lading

A bill of lading is a written acknowledgement of the receipt of goods and an agreement to transport
and to deliver them at a specified place to a person named or on his or her order. It operates both
as a receipt and as a contract. It is a receipt for the goods shipped and a contract to transport and
deliver the same as therein stipulated. (Unsworth Transport International (Phils.), Inc. v. Court of Appeals,
G.R. No. 166250, July 26, 2010, 625 SCRA 357, 366.)
CONTRACT OF COMMON CARRIAGE

- Consent
- Object
- Consideration or cause

Bill of Lading
- Operates as both a contract and a receipt
- Presupposes the following:

1. That the carrier is a common carrier;

2. That the carrier is consequently bound to observe extraordinary diligence in the provision
of the transport service;
3. That the transport service is being provided for compensation;
4. That the carrier has agreed to provide the transport service from the point of origin to the
point of destination.
CONTRACT OF COMMON CARRIAGE

Form

- Written or Verbal
- Express or Implied
CONTRACT OF COMMON CARRIAGE

Features:

1. Common carriers cannot exempt themselves from liability unless the grounds under
Article 1734 or 1735 are proved;

2. Mutual fault of the carrier and the shipper/owner

- Proportional reduction of the cost of liability of the carrier
- Liability of the shipper/owner as to the remainder

3. Limitation of liability; Reduction of the required degree of diligence of the carrier

- In writing
- Signed by the shipper/owner
- Supported by valuable consideration other than the transport service
- Reasonable, just, and not contrary to public policy
CONTRACT OF COMMON CARRIAGE

Features:

4. Agreement may be annulled by the shipper/owner if the latter was constrained to agree to a
reduced liability so that the carrier will provide the service;

5. Failure to provide the transport service in full is a breach of the contract of carriage;

6. Agreed reduced liability is not available if the carrier delays or changes the stipulated route
without just cause;

7. Stipulation as to liability based on the declared value of the goods is binding;

8. Stipulation as to a fixed recoverable amount in case of loss, destruction, or deterioration of

goods is valid if it is reasonable and just under the circumstances, and has been fairly and
freely agreed upon;
CONTRACT OF COMMON CARRIAGE

Features:

9. Agreement of limited liability does not affect the presumption of negligence in case of loss,
destruction, or deterioration of goods;

10. In case of international carriage, the law of the place of destination governs the liability of a
common carrier for loss, destruction or deterioration of goods.
SAFETY OF PASSENGERS

Extraordinary Diligence

Article 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all
the circumstances.

- Value of human life

- Confidence in public transport
- Public interest
“PASSENGER”

A person having the right to be transported from the place of origin to their place of destination,
subject to the obligation to compensate the transport provider for the service;
A person who a common carrier must transport to the agreed place of destination subject to terms
and conditions stipulated in the contract of carriage.
A person granted protection by law pursuant to the business of carriage.
- A person who has stepped on the bus platform is already considered a passenger and is entitled to
all the rights and protection pertaining to such a contractual relation. (Dangwa Transportation Co.
vs. Court of Appeals, G.R. No. 95582, October 7, 1991)
- The contractual relation starts upon perfection of the contract of carriage
- The passenger’s right to protection and the common carrier’s obligation to observe
extraordinary diligence start when a passenger has boarded the vehicle and ends when the
passenger has completely disembarked from it.
Carriage of Passengers

- Extraordinary diligence and presumption of negligence (In re: Art. 1733 and Art. 1755)
- Liability to Passengers and Responsibility for Passengers

- Limited liability of the common carrier is valid if freely and voluntarily agreed upon if the
carriage is gratuitous
- Contract of Adhesion
- Non-reduction of liability on account of reduced fare
- Exclusion: willful acts or gross negligence of the carrier

- Responsibility for passenger’s safety cannot be dispensed or lessened by stipulation or notice

- Responsibility extends to acts or negligence of employees
- Cannot be dispensed by stipulation, notice, or signages
- Applicable even if the employee committed ultra vires acts
- Applicable even if the carrier proves ordinary diligence in the selection and supervision of
their employees
Carriage of Passengers

- Passenger’s responsibility to self and to their own property

- Contributory negligence; concept

- Contributory negligence is conduct on the part of the injured party, contributing as a legal cause
to the harm he has suffered, which falls below the standard to which he is required to conform
for his own protection. (Valenzuela v. Court of Appeals, 323 Phil. 374, 388 (1996)
- To hold a person as having contributed to his injuries, it must be shown that he performed an act
that brought about his injuries in disregard of warning or signs of an impending danger to health
and body. (Estacion v. Bernardo, 518 Phil. 388, 401-402 (2006); Añonuevo v. Court of Appeals, 483
Phil. 756, 773 (2004)
- To prove contributory negligence, it is still necessary to establish a causal link, although not
proximate, between the negligence of the party and the succeeding injury. In a legal sense,
negligence is contributory only when it contributes proximately to the injury, and not simply a
condition for its occurrence. (Dela Cruz vs. Sps. Octaviano, G.R. No. 219649, July 26, 2017)
Carriage of Passengers
It appears that plaintiff boarded a bus of defendant as paying passenger from Ligao, Albay, bound for Pili,
Camarines Sur, but before reaching his destination, the bus collided with a pick-up car which was coming from
the opposite direction and, as a, result, his left arm was completely severed and fell inside the back part of the
bus.
A circumstance which militates against the stand of appellant is the fact borne out by the evidence that when
he boarded the bus in question, he seated himself on the left side thereof resting his left arm on the
window sill but with his left elbow outside the window, this being his position in the bus when the
collision took place. It is for this reason that the collision resulted in the severance of said left arm
from the body of appellant thus doing him a great damage. It is therefore apparent that appellant is guilty
of contributory negligence. Had he not placed his left arm on the window sill with a portion thereof
protruding outside, perhaps the injury would have been avoided as is the case with the other passenger. It is
to be noted that appellant was the only victim of the collision.
It is true that such contributory negligence cannot relieve appellee of its liability but will only entitle it
to a reduction of the amount of damage caused (Article 1762, new Civil Code), but this is a circumstance
which further militates against the position taken by appellant in this case. (Isaac vs. AL Ammen Transport Co.,
G.R. No. L-9671, August 23, 1957)
Damage or Death; consequences

- Criminal liability of principal by direct participation

- Civil liability of the operator
- Subsidiary liability of the principal by direct participation
- Recovery of damages
- Actual
- Moral
- Exemplary
- Liquidated
- Nominal
MARINE TRANSPORTATION

“Marine Transport” – the business of operating a vessel for the purpose of conducting the
business of transport of goods and/or persons over a waterway

“Vessel” – any watercraft utilizing any source of mobile power, designed, used or capable of being
used as a means of water transportation; except those owned by the Armed Forces of the
Philippines, or by foreign governments for military purposes; and bancas, sailboats, and other
waterborne device less than three gross tones capacity, and not motorized.

“Philippine Flag Vessel” – a vessel or watercraft registered under Philippine Laws

“Foreign Flag Vessel” – a vessel or watercraft registered under a foreign law

“Maritime Industry Authority” – “MARINA,” the government agency under the Office of the
President having general jurisdiction and control over all persons, corporations, firms, or entities in
the maritime industry of the Philippines.
MARINE TRANSPORTATION

“Ship owner” – the person or entity exercising the right of ownership over a vessel

“Ship Agent” -

“Philippine Flag Vessel” – a vessel or watercraft registered under Philippine Laws

“Foreign Flag Vessel” – a vessel or watercraft registered under a foreign law

“Maritime Industry Authority” – “MARINA,” the government agency under the Office of the
President having general jurisdiction and control over all persons, corporations, firms, or entities in
the maritime industry of the Philippines.

“Maritime Claim” – any claim in relation to the conduct of the maritime industry; may be an action
in rem or quasi in rem.
MARINE TRANSPORTATION

“Marine Transport” – the business of operating a vessel for the purpose of conducting the
business of transport of goods and/or persons over a waterway

“Ship Agent” – a person entrusted with the provisioning of a vessel, or who represents the latter in
the port in which she may be found.

“Ship Captain” – a person having overall command and responsibility over a vessel and its
complement.

“Maritime Pilot” – a person who maneuvers a vessel through hazardous, perilous, or congested
waters.

“Arrastre” – the operation of handling portside cargo; handled by the Arrastre Operator

“Stevedore” – the operation of handling cargo on the vessel, in re: arrastre

MARINE TRANSPORTATION

“Real and Hypothecary Nature of Maritime Liability”

- Refers to the limit of the liability of a shipowner or ship agent
- The liability of the shipowner or ship agent for loss or damage is moderated and limited by the
latter’s right of abandonment of the vessel and earned freight, if any.
- “Limited Liability Doctrine”
- The shipowner or ship agent’s liability is limited by that which the latter has a right to abandon
- “No vessel, no liability” rule
- The total loss of the vessel extinguishes maritime liens as there is no longer any res to which
said liens may attach.
- Shipowner may nevertheless be held liable for death or injuries to passengers if the fault can be
attributed to the former. (Negros Navigation Co., Inc. vs. CA, et.al., G.R. No. 110398, November 7,
1997)
MARINE TRANSPORTATION

Charter Party - A contract by which an entire ship or some principal part thereof is let by the owner to
another person for a specified time or use. Charter or charter parties are of two kinds. Charter of demise or
bareboat and contracts of affreightment.

Charter of Demise (Bareboat Charter) - the charterer will generally be considered as owner for the
voyage or service stipulated. The charterer mans the vessel with his own people and becomes, in effect, the
owner pro hac vice, subject to liability to others for damages caused by negligence. To create a demise the
owner of a vessel must completely and exclusively relinquish possession, anything short of such a complete
transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all.

Contract of Affreightment – a contract where the owner of the vessel leases part or all of its space to
haul goods for others. It is a contract for a special service to be rendered by the owner of the vessel and under
such contract the general owner retains the possession, command and navigation of the ship, the charterer or
freighter merely having use of the space in the vessel in return for his payment of the charter hire. If the
charter is a contract of affreightment, which leaves the general owner in possession of the ship as owner for
the voyage, the rights, responsibilities of ownership rest on the owner and the charterer is usually free from
liability to third persons in respect of the ship.
SEAWORTHINESS
To be seaworthy, a vessel "must have that degree of fitness which an ordinary, careful and prudent owner would
require his vessel to have at the commencement of her voyage, having regard to all the probable circumstances
of it." Thus the degree of seaworthiness varies in relation to the contemplated voyage. Crossing the Atlantic calls
for stronger equipment than sailing across the Visayan Sea. It is essential to consider that once the necessary
degree of seaworthiness has been ascertained, this obligation is an absolute one, i.e. the undertaking is that the
vessel actually is seaworthy. It is no excuse that the shipowner took every possible precaution to make her so, if
in fact he failed.
In examining what is meant by seaworthiness we must bear in mind the dual nature of the carrier’s obligations
under a contract of affreightment. To satisfy these duties the vessel must (a) be efficient as an instrument of
transport and (b) as a storehouse for her cargo. The latter part of the obligation is sometimes referred to as
cargoworthiness.
A ship is efficient as an instrument of transport if its hull, tackle and machinery are in a state of good repair, if
she is sufficiently provided with fuel and ballast, and is manned by an efficient crew.
And a vessel is cargoworthy if it is sufficiently strong and equipped to carry the particular kind of cargo which
she has contracted to carry, and her cargo must be so loaded that it is safe for her to proceed on her voyage. A
mere right given to the charterer to inspect the vessel before loading and to satisfy himself that she was
fit for the contracted cargo does not free the shipowner from his obligation to provide a cargoworthy
ship. Eduardo F. Hernandez and Antero A. Peñasales, Philippine Admiralty and Maritime Law 501-502 (1987).
Santiago Lighterage Corporation vs. Court of Appeals, C-Square Consolidated Mines and
Manuel A. Pelaez; G.R. No. 139629, June 21, 2004.
Santiago Lighterage Corporation vs. Court of Appeals, C-Square Consolidated Mines and
Manuel A. Pelaez; G.R. No. 139629, June 21, 2004.
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals and Atty. Renato T. Arroyo; G.R. No. 118126,
March 4, 1996.
Sulpicio Lines (now Philippine Span Asia Carrier Corporation) vs. Major Karaan, Sps.
Napoleon Labrague and Herminia Labrague, and Ely Liva, G.R. No. 208590, October 3, 2018.
Go Tiaoco y Hermanos vs. Union Insurance Society of Canton, G.R. No. 13983, September 1,
1919.
ACT NO. 2616 – THE SALVAGE LAW

COMMONWEALTH ACT NO. 65 – CARRIAGE OF GOODS BY SEA ACT (COGSA) -

ACT NO. 2616 – THE SALVAGE LAW
ACT NO. 2616 – THE SALVAGE LAW

What does the law provide?

1. Right to the recovery of cargo pertains to its owner

2. Right of ownership of cargo is retained by the cargo owner
3. Right to recovery of the vessel pertains to the ship owner
4. Right of ownership of the vessel is retained by the ship owner
5. Payment of reward in favor of third persons who recover the vessel and/or cargo
6. Available only in case of shipwrecks
ACT NO. 2616 – THE SALVAGE LAW

What is a “shipwreck?”

- The destruction or total loss of a vessel by sinking or after running aground.

When does the Salvage Law apply?

- The law applies when the vessel or its cargo is rendered beyond the control of the ship crew,
or has been abandoned by them, AND the ship or the cargo is recovered by third persons
ACT NO. 2616 – THE SALVAGE LAW

When may third persons carry out salvage?

- When the vessel or its cargo has been abandoned by the ship captain or the latter’s
representative

- When the vessel or its cargo has not been abandoned and the ship captain or the latter’s
representative gives consent to the salvage

- When the identity of the ship captain or the latter’s representative is unknown
ACT NO. 2616 – THE SALVAGE LAW

Who are allowed to carry out salvage?

- Any person able to recover the vessel or its cargo may carry out salvage, EXCEPT the crew
of the vessel which was shipwrecked or in danger of being shipwrecked.
ACT NO. 2616 – THE SALVAGE LAW

How is salvage conducted?

1. Person intending to conduct salvage must seek consent of the ship captain or the latter’s
representative;
2. The vessel must be delivered to the ship owner or ship agent;
3. The cargo must be delivered to the cargo owner;
4. The person conducting salvage is reimbursed their expenses and paid a proper reward;
ACT NO. 2616 – THE SALVAGE LAW

5. If the identity of the ship captain or the latter’s representative is unknown, the person
conducting salvage must deliver the vessel or the cargo to the Collector of Customs, if the
port has one, or to the Provincial Treasurer or the Municipal Mayor;

6. The officers above must safeguard and inventory the items delivered;

7. Things susceptible of immediate loss or those whose conservation is evidently prejudicial

to the interest of the owner may be sold at auction if no objection is made;

8. The officers must publish in a newspaper the details of the disaster within 30 days from
the salvage, and the items recovered, requesting all interested persons to make their
claims
ACT NO. 2616 – THE SALVAGE LAW

9. If the owner or the latter’s representative makes a claim, the latter shall pay a bond to
secure payment of expenses and reward. The amount and sufficiency of the bond, in the
absence of agreement, shall be determined by the Collector of Customs or by the Judge of
the Court of First Instance (Regional Trial Court) of the province in which the things saved
may be found. In the absence of a bond, the owner or the latter’s representative shall have
no right to the delivery of the ship or the cargo;

10. If no claim is made within THREE MONTHS from publication, the items recovered shall be
sold at public auction and the proceeds shall be deposited in the national treasury. After
THREE YEARS from the sale and no one makes a claim, one-half of the proceeds shall be
delivered to the person who conducted the salvage and the other half shall pertain to the
national government.
ACT NO. 2616 – THE SALVAGE LAW

How much is the reward?

1. As agreed upon prior to the voyage;

2. As agreed upon during the danger;
3. As fixed by the Court of First Instance (Regional Trial Court) on the basis of quantum
meruit;
4. If the salvage is carried out by several persons representing independent interests, the
reward shall be divided between them equally in the absence of an agreement and on the
basis of quantum meruit;
5. If the salvage was carried out by another vessel, the reward shall be divided between the
ship owner (50%), ship captain (25%), and the crew (25%), in the absence of a contrary
agreement.
COMMONWEALTH ACT NO. 65 – CARRIAGE OF GOODS BY SEA ACT

Key Concepts

1. “Contract of carriage” applies only to contracts of carriage covered by a bill of lading or any
similar document of title, insofar as such document relates to the carriage of goods by sea,
including any bill of lading or any similar document as aforesaid issued under or pursuant to a
charter party from the moment at which such bill of lading or similar document of title regulates
the relations between a carrier and a holder of the same.

2. The term "carriage of goods" covers the period from the time when the goods are loaded on to
the time when they are discharged from the ship.

3. The term "carrier" includes the owner or the charterer who enters into a contract of carriage
with a shipper.
COMMONWEALTH ACT NO. 65 – CARRIAGE OF GOODS BY SEA ACT

Key Concepts

4. A bill of lading is a document evidencing the receipt of goods for carriage or transport and serves
as proof of delivery to the carrier and may contain the terms and conditions of the carriage.

5. Obligations of the carrier:

- Make the ship seaworthy before and at the beginning of the voyage
- Properly man, equip, and supply the ship
- Make the ship fit for carriage and preservation of goods
- Issue a bill of lading to the shipper upon demand
COMMONWEALTH ACT NO. 65 – CARRIAGE OF GOODS BY SEA ACT

Key Concepts

6. Immunity from liability

- Immunity of carrier and shipper for loss or damage where the carrier has discharged the
obligation to ensure the seaworthiness and cargoworthiness of the ship

- Immunity of carrier and shipper for loss or damage occurring beyond their control

- Non-liability in case of reasonable deviation from the course of the voyage

COMMONWEALTH ACT NO. 65 – CARRIAGE OF GOODS BY SEA ACT

Key Concepts

6. Immunity from liability

- Immunity of carrier and shipper for loss or damage where the carrier has discharged the
obligation to ensure the seaworthiness and cargoworthiness of the ship

- Immunity of carrier and shipper for loss or damage occurring beyond their control

- Non-liability in case of reasonable deviation from the course of the voyage