San Beda College of Law

TRANSPORTATION LAWS CONTRACT OF TRANSPORTATION/ CARRIAGE  A contract whereby a person, natural or juridical, obligates to transport persons, goods, or both, from one place to another, by land, air or water, for a price or compensation.  Classifications: 1. Common or Private 2. Goods or Passengers 3. For a fee (for hire) or Gratuitous 4. Land, Water/maritime, or Air 5. Domestic/inter-island/coastwise or International/foreign  It is a relationship which is imbued with the public interest. COMMON CARRIER  Persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public (Art. 1732, Civil Code).  Art. 1732 of the New Civil Code avoids any distinction between one whose principal business activity is the carrying of persons or goods or both and one who does such carrying only as an ancillary activity (sideline). It also avoids a distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does the law distinguish between a carrier offering its services to the general public that is the general community or population and one who offers services or solicits business only from a narrow segment of the general population. A person or entity is a common carrier even if he did not secure a Certificate of Public Convenience (De Guzman vs. CA, 168 SCRA 612).  It makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation should be by motor vehicle. (First Philippine Industrial Corporation vs. CA)  One is a common carrier even if he has no fixed and publicly known route, maintains no terminals, and issues no tickets (Asia Lighterage Shipping, Inc. vs. CA).  Characteristics: 1. Undertakes to carry for all people indifferently and thus is liable for refusal without sufficient reason (Lastimoso vs. Doliente, October 20, 1961); 2. Cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in these goods; 3. No monopoly is favored (Batangas Trans. vs. Orlanes, 52 PHIL 455); 4. Provides public convenience. PRIVATE CARRIER  One which, without being engaged in the business of carrying as a public employment, undertakes to deliver goods or passengers for compensation. (Home Insurance Co. vs. American Steamship Agency, 23 SCRA 24)  TESTS WHETHER CARRIER IS COMMON OR PRIVATE:  The SC in First Philippine Industrial Corporation vs. CA (1995) reiterated the following tests: 1. It must be engaged in the business of carrying goods for others as a public employment and must hold itself out as ready to engage in the transportation of goods generally as a business and not as a casual occupation; 2. It must undertake to carry goods of the kind to which its business in confined; 3. It must undertake to carry by the method by which his business is conducted and over its established roads; and 4. The transportation must be for hire.  In National Steel Corp. vs. CA (1997) the SC held that the true test of a common carrier is the carriage of goods or passengers provided it has space for all who opt to avail themselves of its transportation for a fee. COMMON CARRIER PRIVATE CARRIER


1. As to availability Holds himself out for all Contracts with particular people indiscriminately individuals or groups only 2. As to required diligence Extraordinary diligence is Ordinary diligence is required required 3. As to regulation Subject to State Not subject to State regulation regulation 4. Stipulation limiting liability Parties may not agree on Parties may limit the limiting the carrier’s carrier’s liability, liability except when provided it is not provided by law contrary to law, morals or good customs 5. Exempting circumstance Prove extraordinary caso fortuito, Art. 1174 diligence and Art. 1733, NCC NCC 6.Presumption of negligence There is a presumption of fault or negligence No presumption of fault or negligence

7.Governing law Law on common carriers Law on obligations and contracts GOVERNING LAWS A. Domestic/inter-island/coastwise  Applicable to Land, Water, and Air transportation 1. Civil Code - primary 2. Code of Commerce (Arts. 349, 379, 573734, 580, 806-845) - suppletory B. International/foreign/overseas country to Philippines)  Applicable to Water/maritime (Foreign and Air

 CHAIRPERSON: Garny Luisa Alegre  ASST. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws); Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)

San Beda College of Law
transportation  The law of the country of destination generally applies. 1. Civil Code - primary 2. Code of Commerce - suppletory 3. Others - suppletory a. Water/maritime: Carriage of Goods by Sea Act (COGSA) b. Air: Warsaw Convention I. NEW CIVIL CODE (Arts. 1732-1766) REQUIREMENT OF EXTRAORDINARY DILIGENCE  Rendition of service with the greatest skill and utmost foresight. (Davao Stevedore Co. v. Fernandez)  Rationale: 1. From the nature of the business and for reasons of public policy (Art. 1733) 2. Relationship of trust 3. Business is impressed with a special public duty 4. Possession of the goods 5. Preciousness of human life  A common carrier is not an absolute insurer of all risks of travel. COVERAGE 1. Vigilance over goods (Arts. 1734-1754); and 2. Safety of passengers (Arts. 1755-1763). PASSENGER  A person who has entered into a contract of carriage, express or implied, with the carrier. They are entitled to extraordinary diligence from the common carrier.  The following are not considered passengers, and are entitled to ordinary diligence only: a. One who has not yet boarded any part of a vehicle regardless of whether or not he has purchased a ticket; b. One who remains on a carrier for an unreasonable length of time after he has been afforded every safe opportunity to alight; c. One who has boarded by fraud, stealth, or deceit; d. One who attempts to board a moving vehicle, although he has a ticket, unless the attempt be with the knowledge and consent of the carrier; e. One who has boarded a wrong vehicle, has been properly informed of such fact, and on alighting, is injured by the carrier; f. Invited guests and accommodation passengers. (Lara vs. Valencia) g. One who rides any part of the vehicle which is unsuitable or dangerous or which he knows is not designed or intended for passengers. DEFENSES OF A COMMON CARRIER IN THE CARRIAGE OF GOODS CASO FORTUITO/FORCE MAJEURE  Requisites: a.


Must be the proximate and only cause of the loss b. Exercise of due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster (Art. 1739) c. Carrier has not negligently incurred in delay in transporting the goods (Art. 1740)  Fire is not considered a natural disaster or calamity as it arises almost invariably from some act of man. (Eastern Shipping Lines Inc. vs. IAC)  Mechanical defects are not force majeure if the same was discoverable by regular and adequate inspections. (Notes and Cases on the Law on Transportation and Public Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.120-122) 2. ACTS OF PUBLIC ENEMY  Requisites: a. Must be the proximate and only cause of the loss b. Exercise of due diligence to prevent or minimize the loss before, during or after the act causing the loss, deterioration or destruction of the goods (Art. 1739) 3. NEGLIGENCE OF THE SHIPPER OR OWNER a. Sole and proximate cause: absolute defense b. Contributory: partial defense. (Art. 1741) 4. CHARACTER OF THE GOODS OR DEFECTS IN THE PACKING OR IN THE CONTAINER  Even if the damage should be caused by the inherent defect/character of the goods, the common carrier must exercise due diligence to forestall or lessen the loss. (Art. 1742)  The carrier which, knowing the fact of improper packing of the goods upon ordinary observation, still accepts the goods notwithstanding such condition, is not relieved of liability or loss or injury resulting therefrom. (Southern Lines, Inc. v. CA, 4 SCRA 258) 5. ORDER OR ACT OF PUBLIC AUTHORITY  Said public authority must have the power to issue the order (Art. 1743). Consequently, where the officer acts without legal process, the common carrier will be held liable. (Ganzon v. CA 161 SCRA 646)  Diligence in the selection and supervision of employees under Article 2180 of the Civil Code cannot be interposed as a defense by the common carrier because the liability of the carriers arises from the breach of the contract of carriage. The defense under said articles is applicable to negligence in quasi-delicts under Art. 2176. (Del Prado v. Manila Electric Co., 52 Phil 900) LIABILITY OF A COMMON CARRIER FOR DEATH OR INJURIES TO PASSENGERS DUE TO ACTS OF ITS EMPLOYEES AND OTHER PASSENGERS OR STRANGERS FOR ACTS OF ITS EMPLOYEES FOR ACTS OF OTHER PASSENGERS OR STRANGERS


Required diligence and defense Extraordinary diligence Ordinary diligence Nature of liability

 CHAIRPERSON: Garny Luisa Alegre  ASST. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law); Jose Fernando Llave (Insurance); Aldrich Del Rosario (Transportation Laws); Shirley Mae Tabangcura, Bon Vincent Agustin (Corporation Law); Karl Steven Co (Special Laws); John Lemuel Gatdula (Banking Laws); Robespierre CU (Law on Intellectual Property)

Abiotiz Shipping Corporation v. [2003])  All persons who remain on the premises within a reasonable time after leaving the conveyance are to be deemed passengers. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). 2. limited by Art. 1736)  It remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or owner has made use of the right of stoppage in transitu. v. hence the burden of explaining should fall on the carrier. loss. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Presumption of negligence Art. vs. and received by the carrier for transportation until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive them. CA. Common carrier Passenger CARRIAGE OF GOODS 1. 101 Phil 120) The duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip. Jose Fernando Llave (Insurance). but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. (Lu Do v. (Art. 1738)  Delivery of goods to the custom authorities is not delivery to the consignee. and includes a reasonable time to see after his baggage and prepare for his departure. (Mirasol v. (MRR vs. 16 SCRA 641) CARRIAGE OF PASSENGERS Parties 1. Bon Vincent Agustin (Corporation Law). Common carrier Shipper Consignee Cause of liability Delay in delivery. The employee must be on duty at the time of the act. 17 SCRA 739 . 3. Aldrich Del Rosario (Transportation Laws). (LRTA v. Dollar.San Beda College of Law 56 MEMORY AID Tort. 245 SCRA 796) COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. however. Art. Robespierre CU (Law on Intellectual Property) . 179 SCRA 95)  It is the duty of common carriers of passengers to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to enter. destruction. CA 202 SCRA 574). Karl Steven Co (Special Laws). Binamira. (La Mallorca v. (Art.1755 Civil Code Reason: The contract between the passenger and the carrier imposes on the latter the duty to transport the passenger safely. 1763 IN COMMERCIAL LAW  The carrier is liable when its personnel allowed a passenger to drive the vehicle causing it to collide with another vehicle resulting to the injuries suffered by the other passengers. and they are liable for injuries suffered from the sudden starting up or jerking of their conveyances while doing so. Perez) Not absolute. Shirley Mae Tabangcura. (Art. CA. The duty which the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom (Dangwa Trans Co.. Ballesteros. 53 PHIL 124) Mere proof of delivery of goods to a carrier in good order and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima facie case against the carrier. Inc. (Coastwise Lighterage Corp. Navidad.1735 Civil Code Reason: As to when and how goods were damaged in transit is a matter peculiarly within the knowledge of the carrier and its employees. (Maranan v. 1737)  It continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination until the consignee has bee advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. 2. or deterioration of Death or injury to the passengers the goods Duration of liability From the time the goods are unconditionally placed in the possession of. John Lemuel Gatdula (Banking Laws). CA.

That the carrier need not observe any diligence in of notices. 1744. if it is reasonable and just under the circumstances and has been fairly and freely agreed upon. (Art. (Art. Order or act of competent public authority (Art. Jose Fernando Llave (Insurance). 1757) 4. but not for willful acts or gross negligence. 1745. Aldrich Del Rosario (Transportation Laws). vehicle. 5. Flood. Reduction of degree of diligence to ordinary diligence. the custody of the goods. Exercise of extraordinary diligence (Art. CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. 1758) IN COMMERCIAL LAW 1. b) Supported by a valuable consideration other than the service rendered by the carriers. Dispensing with or lessening the extraordinary 2. by posting 3. 1748) 4. unless the shipper or owner declares a greater value. provided it be: a) In writing. That the carrier’s liability for acts committed by thieves or robbers who do not act with grave or irresistible threat. That the carrier shall exercise a degree of diligence less than that of a good father of a family over the movable transported. violence or force is dispensed with or diminished. passengers imposed by law by stipulation. That the goods are transported at the risk of the owner or shipper. storm. lighting. 2. The character of the goods or defects in the packing or in the containers e. ship or COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. Ordinary circumstance: Exercise of 1. (Art. John Lemuel Gatdula (Banking Laws). responsibility of a common carrier for the safety of destruction or deterioration of the goods. 6. or other natural disaster or calamity (plus force majeure) b. 1750) 3. Art. and c) Reasonable. That carrier will not be liable for any loss. Fixed amount of liability: A contract fixing the sum to be recovered by the owner or shipper for the loss. by statements on tickets or otherwise. Act of the public enemy in war. extraordinary diligence (Art. 1749)  The diligence required in the carriage of the goods may be reduced by only one degree. destruction or deterioration of the goods on account of the defective condition of the car. from extraordinary to ordinary diligence or diligence of a good father of a family. Caso fortuito a. Robespierre CU (Law on Intellectual Property) . That the carrier shall not be responsible for the acts or omissions of his or its employees. earthquake. 4) Void stipulations 1. Limited liability for delay: An agreement limiting the common carrier’s liability for delay on account of strikes or riots (Art. destruction or deterioration of the goods.San Beda College of Law 57 MEMORY AID Defenses 1. 1735) 1756) Special circumstances: 2. Bon Vincent Agustin (Corporation Law). 1734) Valid stipulations Stipulation limiting liability when a passenger is carried gratuitously. no. (Art. That the carrier is not responsible for the loss. (Art. Shirley Mae Tabangcura. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). whether international or civil c. Stipulation limiting liability to the value of the goods appearing in the bill of lading. signed by the shipper or owner. Karl Steven Co (Special Laws). just and not contrary to public policy. 1744) 2. (Art. Act or omission of the shipper or the owner of goods d. 7.

John Lemuel Gatdula (Banking Laws). Bon Vincent Agustin (Corporation Law). Jose Fernando Llave (Insurance).San Beda College of Law 58 MEMORY AID other equipment used in the contract of carriage. Ramos  SUBJECT HEADS: Marichelle De Vera (Negotiable Instruments Law). Shirley Mae Tabangcura. Robespierre CU (Law on Intellectual Property) . CHAIRPERSON:Jayson O’S Ramos  EDP: Beatrix I. 1745) IN COMMERCIAL LAW COMMERCIAL LAW COMMITTEE  CHAIRPERSON: Garny Luisa Alegre  ASST. (Art. Karl Steven Co (Special Laws). Aldrich Del Rosario (Transportation Laws).

occasioned by its own unless the shipper negligence.  Basis: Art. The carrier is subsidiarily liable only if the driver is convicted and declared insolvent. 2004 ed. 12 SCRA 213) .RULES ON PASSENGERS’ BAGGAGE IN THE CUSTODY OF IN THE CUSTODY THE PASSENGERS OF THE COMMON (HAND-CARRIED) CARRIER (CHECKED-IN) Legal nature of the baggage Necessary deposit Considered as “goods” Required diligence by the common carrier Diligence of a depositary Extraordinary diligence (ordinary diligence) Applicable rules Arts. 65 SCRA 237) II. 238 SCRA 290) 5. 1998 and 2000-2003 Arts. Culpa contractual (breach of contract)  Only the carrier is primarily liable and not the driver. Right of abandonment 4. CA. Heacock Company vs. An airline company which issued a confirmed ticket to a passenger covering successive trips on different airlines can be held liable for damages occasioned by “bumping off” by one of the successive airlines. the airline company is liable if it refused to confirm a passenger’s flight reservation. the carrier cannot limit its liability for injury to. 1997 ed. An airline ticket providing that carriage by successive air carriers is to be regarded as a “single operation” is to make the issuing carrier liable for the tortuous conduct of the other carrier. (Pandect of Commercial Law and Jurisprudence. 349-379) Applicability 1. Obligations of the carrier 3.  Rules: 1. Macondray & Company Inc. CA.) 2. Culpa aquiliana (quasi-delict)  The carrier and driver are solidarily liable as joint tortfeasors. 228 SCRA 23) 3. CA) LIMITATIONS AS TO CARRIER’S LIABILITY INVALID AS BEING VALID & CONTRARY TO PUBLIC ENFORCEABLE POLICY 1. (Singson vs. One exempting the 1. PAL. (Commercial Law Review. Notice of damage 5. NCC. 100. (KLM Royal Dutch Airlines vs. (H. CA.  No defense of due diligence in the selection and supervision of employees. One limiting the carrier from any and all liability of the carrier to liability for loss or damage an agreed valuation. 17 SCRA 606) SPECIAL RULES ON LIABILITES OF AIRLINE CARRIERS 1. Insurance Company of North America. The carrier should necessarily exercise extraordinary diligence in safeguarding the comfort. Even where overbooking of passengers is allowed as a commercial practice. the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. Culpa criminal (criminal negligence)  The driver is primarily liable. (Fabre vs.  Defense of due diligence in the selection and supervision of employees is available. An unqualified limitation and pays a higher rate of liability to an agreed of freight valuation. the relation between the carrier and the passenger continues until the latter has been landed at the port of destination and has left the carrier’s premises. CA. Hence. or loss of. RPC. CA. because there is no privity between the driver and the passenger. CODE OF COMMERCE A. Bill of lading 2. (Philippine Airlines vs.  Basis: Art. In case of flight diversion due to bad weather or other circumstances beyond the pilot’s control. Domestic Air Transportation. (Lufthansa German Airlines vs. Combined carrier agreement BILL OF LADING  The written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or to his order. 226 SCRA 423) 2. 1733-1753 CONCURRING CAUSES OF ACTION ARISING FROM THE NEGLIGENT ACT OF THE COMMON CARRIER 1. (Shewaram vs.E.)  However.) IMPORTANT CONCEPTS: 1. (See notes on Collision) 3. (Zalamea vs. 2180. Domestic land and water/maritime transportation. Cesar Villanueva. It is not indispensable for the creation of a contract of carriage. the airline company would still be guilty of bad faith and still be liable for damages if it did not properly inform passenger that it could breach the contract of carriage even if they were confirmed passengers. Exception: maritime tort resulting in collision. OVERLAND TRANSPORTATION (Arts.  In case of injury to a passenger due to the negligence of the driver of the bus on which he is riding and of the driver of another vehicle.1759. A printed provision in the ticket limiting liability only to its own conduct is not enough to rebut that liability. 2. Justice Jose Vitug. 282 SCRA 149) 4.  Basis: Art. It makes no difference that the liability of the bus driver and owner springs from contract while that of the owner and driver of the other vehicle arises from quasidelict. NCC. An open-dated ticket constitutes a complete contract between the carrier and passenger. goods shipped where such injury or loss was caused by its own negligence. (Compania Maritima vs. convenience and safety of its stranded passengers until they have reached their final destination. declares a higher value 2.

3. 2004 ed. capture by enemies and the like 7. 2004 ed. Yangco Steamship Co.One in which it is stated that the goods referred to therein will be delivered to a specified person. T.) Goods are unfit for transportation 3. and the vessel indicated in the bill of lading by which the goods are to be shipped is already in the port where the goods are held for shipment. and who becomes a party thereto when he demands fulfillment of that in which it is stated that the goods referred to therein will be delivered to the bearer or to the order of any person named therein. Duty to accept the goods GENERAL RULE: A common carrier cannot ordinarily refuse to carry a particular class of goods. Through – One issued by the carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer. 5. Aquino. or substances including dynamite and other explosives 2.) Goods are injurious to health 6. R. although the instrument is oftentimes drawn up only by the consignor and carrier. 31 Phil 1). becomes bound by all the stipulations contained therein by making a claim for loss on the basis of said bill of lading.  However. Ambiguity is construed against the carrier. Within a reasonable time. no matter from what cause 7. & Hernando. The right of a party to recover for loss of shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier. when a common carrier accepts cargo for shipment for valuable consideration.  Instances when the carrier may validly refuse to accept the goods include the ff: 1. Foul – One which contains a notation thereon indicating that the goods covered by it are in bad condition. springs from either a relation of agency between him and the shipper. (Sea-Land Services Inc. Negotiable . which bill of lading is honored by the second and other interested carriers who do not issue their own bills. Received . CA) B.) Goods will be exposed to untoward danger like flood.2. the contract being one of adhesion. 6. 353) 2.) Failure to tender goods on time. in the absence of fraud or mistake. Custody – One wherein the goods are already received by the carrier but the vessel No stipulation 1. in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. Receipt of cargo 4. (PAL vs. The consignee. 9. IAC) 4. vs. Document of title 3. R. it takes the risk of delivering it in good condition as when it was loaded. (Art. he is estopped from thereafter denying that he assented to such terms.261)  Kinds: 1. Contract to transport and deliver goods as stipulated 5. 4. Carrier is bound to forward them in the 1st . PAL Inc. indicated therein has not yet arrived in the port. On board . & Hernando. 3. (Notes and Cases on the Law on Transportation and Public Utilities. Carrier is bound to fulfill the contract and is liable for any delay. Best evidence of the existence of the contract of carriage of cargo (Art.) Goods sought to be transported are dangerous objects. (Fisher vs.) Contrabands or illegal goods 5. Aquino. Symbol of the goods OBLIGATIONS OF THE CARRIER A. or his status as stranger in whose favor some stipulation is made in said contract. p. The goods should be delivered to the consignee or any other person to whom the bill of lading was validly transferred or negotiated. (Notes and Cases on the Law on Transportation and Public Utilities.) Strike 9. 1311 (2).) Goods like livestock will be exposed to disease 8.P. Port – One which is issued by the carrier to whom the goods have been delivered. 10. Duty to deliver the goods  Not only to transport the goods safely but to the person indicated in the bill of lading. Non-negotiable . Spent – One which covers goods that already have been delivered by the carrier without a surrender of a signed copy of the bill. the carrier is exempted from liability if carriage is insisted upon by the shipper. provided its objections are stated in the bill of lading.P. 2.) Acceptance would result in overloading 4.68)  In case of carriage by railway. 8. Acceptance of the bill of lading without dissent raises the presumption that all the terms therein where brought to the knowledge of the shipper and agreed to by him and. (Mendoza vs.) 5.issued when the goods have been actually placed aboard the ship with very reasonable expectation that the shipment is as good as on its way. EXCEPTION: For some sufficient reason the discrimination against the traffic in such goods is reasonable and necessary. 2. Time of delivery Stipulated in Contract/Bill of Lading 1. Clean – One which does not indicate any defect in the goods.  Functions: 1. T.

3 (6) Applicability 1. each carrier is responsible for its particular leg in the contract. Carriage of goods Notice of damage 1. ARTICLE 366 COGSA Sec. and 3.  The filing of notice of claim is a condition precedent for recovery. A. 373) GENERAL RULE: In case of a contract of transportation of several legs. Goods shipped are damaged  Rules: a. Thus. Merchant vessel 2. Participants in maritime commerce 6. Carriage of goods 4. or date when the vessel left port or from the date of delivery to the arrastre (non-delivery or loss). and it is charged with liability therefore. c. and to give it an opportunity to make an investigation and fix responsibility while the matter is fresh. action must be filed in court. 573-869) IMPORTANT CONCEPTS: 1. 366)  Requisites for applicability: 1. Civil One year from the date Code applies. Co Not 2.  If despite the notice of claim. In case of delay through the fault of the carrier (Art. Merely suspends and generally does not terminate the contract of carriage Carrier remains duty bound to exercise extraordinary diligence Natural disaster shall not free the carrier from responsibility (Art. b. Latent damage: shipper should file a claim against the carrier within 24 hours from delivery. 371).it may have arisen.) transporta Note: subject to the rule tion on Paramount Clause 2. 2.  Shorter period may be stipulated by the parties because it merely affects the shipper’s remedy and does not affect the liability of the carrier. Partial non-delivery. International/ /interoverseas/foreign (from island/coa foreign country to stwise Phils. 363). air transportation transporta 3. Causes of revocation of voyage 5. in such absence. Sweetlines. 358 Code of Commerce) Effects of delay a.) Prescriptive Period  Not provided by Article 366. 3- Prescriptive period None provided. NOTICE OF DAMAGE (ART. (PHILAMGEN vs. Civil Code rules on prescription apply. Loans on bottomry and respondentia 8. Charter party 7. 1. Inc. 24 2. d.1740) If delay is without just cause.1747) RIGHT OF CONSIGNEE TO ABANDON GOODS  Instances: 1. 365). Doctrine of limited liability 4. Domestic 1. where the goods are useless without the others (Art. Lim Ponzo) Purpose of notice: To inform the carrier that the shipment has been damaged. (ART. COMBINED CARRIER AGREEMENT (ART. Land/water/air transportation 3. Goods are rendered useless for sale or consumption for the purposes for which they are properly destined (Art. 1. Accidents in maritime commerce MARITIME/ADMIRALTY LAW  It is the system of laws which particularly relates . of delivery (delivered but damaged goods). Carriage of goods tion 3. Maritime lien and Preference of Credit 3. the contract limiting the common carrier’s liability cannot be availed of in case of loss or deterioration of the goods (Art. No bill of lading was issued: within 6 years 2. MARITIME COMMERCE (Arts. EXCEPTION: A combined carrier agreement where a carrier makes itself liable assuming the obligations and acquiring as well the rights and causes of action of those which preceded it. Note: These rules does not apply to misdelivery of goods. Patent damage: shipper must file a claim against the carrier immediately upon delivery (it may be oral or written) b. shipment of the same or similar goods which he may make to the point of delivery. Bill of lading was issued: within 10 years. Land. Domestic/interisland/coastwise transportation 2. the carrier refuses to pay. Water/maritime water. (Roldan vs. 2.

72). Damages arising out for the value of goods of tort. Art. 837 – collision 4. 1997 ed. as well as mortgage liabilities. 337 SCRA 381) ORDER OF PREFERENCE IN CASE OF SALE OF VESSEL R. DOCTRINE OF LIMITED LIABILITY (HYPOTHECARY RULE)  Cases where applicable: 1. 320 SCRA 244) CHARACTERISTICS OF MARITIME TRANSACTION 1.A. 337 SCRA 381)  If the maritime lien arose prior to the recording of a preferred mortgage. 6106 P. Prudential Guarantee. 590 – indemnities from negligent acts of the captain (not the shipowner or ship agent) 3. Hypothecary . equipping and provisioning of the vessel in the preparation of a voyage. to ships. Crew’s wages. Aquino & Hernando. CA. (Notes and Cases on the Law on Transportation and Public Utilities. a jus in re. 585)  They are susceptible to maritime liens such as for the repair. Real . p.similar to transactions over real property with respect to effectivity against third persons which is done through registration. 587 – civil liability for indemnities to third persons 2. except the the vessel. 217 SCRA 359). 37 Phil. the obligation is extinguished. which stands as the guaranty for their settlement. Escano. Art. (Pandect of Commercial Law and Jurisprudence. General Accident Fire and Life Assurance Corp. due to the Government. to be afterward enforced in admiralty by process in rem. 573. (PNB vs. CA. (Bar Review Materials in Commercial Law. Jorge Miravite. 156 SCRA 169) The interest extends to: 1) the vessel itself. Preferred mortgages registered prior in time. Rivera. and to maritime conveyance of persons and property. Taxes due the by the court and taxes Philippine Government. (Rubiso vs. in satisfaction of which a vessel may be validly arrested and sold.)  Arrastre service is not maritime in character. (Chua v. and transported but which 7.the liability of the owner of the value of the vessel is limited to the vessel itself (Doctrine of Limited Liability). The evidence of real nature is shown by: 1) the limitation of the liability of the agents to the actual value of the vessel and the freight money. whether foreign or otherwise. allowed and costs taxed 2. (ICTSI vs. the Captain and Crew of 3. their crews and navigation. it shall have priority over the said mortgage lien. Art. 2. (Aboitiz Shipping Corp. Judicial costs of the 1. 2002 ed. and 6. Maritime liens arising salvage including prior in time to the contract salvage.)  Constitutes property which may be acquired and transferred by any of the means recognized by law. recording of the bottomry loans. vs. contract salvage. (PNB vs. and provisioning of food. Expenses and fees proceedings. 156 SCRA 169). They will then be satisfied from the proceeds of the sale subject to the order of preference. 643 – liability for wages of the captain and the crew and for advances made by the ship agent if the vessel is lost by shipwreck or capture 1969 GENERAL RULE: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessel is entirely lost. They shall continue to be considered as personal property. indemnity due shippers 6. including voyage. General average or the affairs and business of the sea. 2) equipments. and preferred mortgage. It refers to a contract for the unloading of goods from a vessel. and 2) the right to retain the cargo and embargo and detention of the vessel (Luzon Stevedoring Corp v. 4. 5. 1521 Effectivity date 1978 Applicability Overseas shipping only Both domestic and overseas shipping Kind of sale Judicial Judicial and extrajudicial Order of Preference A preferred mortgage The preferred mortgage shall have priority over lien shall have priority all claims against the over all claims against vessel. 166 SCRA 183) . (Luzon Stevedoring v. Preferred mortgage were not delivered to registered prior in time. General average.254)  Maritime laws apply only to maritime trade and sea voyages. Salaries and wages of 2. except the following preferences in following preferences in the order stated: the order stated: 1.  The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel. and 4) insurance proceeds. CA. 3. Art. citing Francisco. 3) freightage. the consignee. IAC. supplies and fuel during its last voyage. MERCHANT VESSEL  Vessel engaged in maritime commerce.  Effect of sale: All pre-existing claims in the vessel are terminated. Costs of repair and equipment of the vessel. Justice Jose Vitug. the vessel during its last 4. (Ship Mortgage Decree of 1978) MARITIME LIEN  It constitutes a present right of property in the ship. (Arts.D. Salvage.

he is solidarily liable with the ship owner. as far as human power can effect it.  Abandonment of the vessel is necessary to limit the liability of the shipowner. 138. Sec. Officers and crew of the vessel D. and freight of the vessel. 2. 3. Ship agent (naviero)  Person entrusted with provisioning and representing the vessel in the port in which it may be found. 138. CA 138 SCRA 553). 2. In case of leakage of useless for sale or at least ¾ of the consumption for the contents of a cargo purposes for which they containing liquids (Art. 4. Capacity to trade. Pilot A. from indemnities to third where the goods are persons (Art. to the the insurer carrier. In case of constructive loss of the vessel (Sec. 2. RIGHT OF SHIPOWNER OR SHIP AGENT TO ABANDON VESSEL  Instances: 1. SHIPOWNERS AND SHIP AGENTS Shipowner (proprietario)  Person who has possession. Claims under Workmen’s Compensation (Abueg vs. to be cut off. while his possession continues. and 3. make a new charter or insure the vessel after obtaining authorization from the shipowner or if granted in certificate of appointment. Embargo. Inability of the vessel to navigate. 687). 371).EXCEPTIONS: 1. 587). PARTICIPANTS IN MARITIME COMMERCE A. 4. Order a new voyage. usually issued in time of war or threatened hostilities. 2. The only instance were abandonment is dispensed with is when the vessel is entirely lost (Luzon Stevedoring vs. useless without the 2. 365). Collision between two negligent vessels. Discharge duties of the captain. Captains and masters of the vessel C. armament. 2. Code. Insurance others (Art. In case of civil liability from indemnities to third persons (Art. 6. CA 156 SCRA 169). Partial non-delivery. Shipowners and ship agents B. provisions of food and fuel. Embargo – A proclamation or order of a state. Blockade – A sort of circumvallation of a place by which all foreign connection and correspondence is. Effects 1. and all that relate to the requirements of navigation. Goods are rendered 3. 2. also includes the shipowner. The vessel is insured (Vasquez vs. details of equipment. Carrier insured as if should there was pay the actual total shipper loss of the the vessel. In case of leakage of at least ¾ of the contents of a cargo containing liquids (Art. must pay the 2. 4. In case there is no total loss and the vessel is not abandoned. CAUSES OF REVOCATION OF VOYAGE 1. Blockade. San Diego 77 Phil 730). . Supercargoes E. shipper 2.  Powers and functions: 1. 5. 3. Insurance Code). prohibiting the departure of ships or goods from some or all the ports of such state until further order. Interdiction of commerce – A governmental prohibition of commercial intercourse intended to bring about an entire cessation for the time being of all trade whatever. In case of civil liability 1. 5. Expenses for repair on vessel completed before loss. 640) Terms: 1. subject to Art. In case of delay through the fault of the carrier (Art.  Not a mere agent under civil law. Transfer ownership of of the vessel ownershi from the p on the shipowner to goods the shippers or from the insurer. (Art. 3. In case of (2). and 3. Injury or damage due to shipowner or to the concurring negligence of the shipowner and the captain. Prohibition to receive cargo at destination. are properly destined 687) (Art. 363). Contract in the name of the owners with respect to repairs.609. Transfer of 1. War or interdiction of commerce. RIGHT OF ABANDONMENT SHIPOWNER OR SHIP CONSIGNEE AGENT What may be abandoned Vessel Goods shipped Instances 1. 587). market value of the goods at the point of destinatio n. 3. control and management of the vessel and the consequent right to direct her navigation and receive freight earned and paid.

586) 2. 2. 4. (Art. 11. to repair. while on board vessel. 610)  Sources of funds to comply with the inherent powers of the captain (in successive order): 1. Second Mate . Damages due to nonobservance of marine regulations. (Art. 2. Observe rules to avoid collision. General agent of the shipowner. 3. Thefts and robberies of the crew. 5. d. 12. Damages to vessel and to cargo due to lack of skill and negligence.. health. Losses and fines for violation of laws. 3. Supply. Damages due to misuse of power. but are particularly used in accordance with the size of the vessel governed and the scope of transportation. 2. Filipino citizen. (Art. 2. 8.  No liability for the following: 1. 4. Representative of the government of the country under whose flag he navigates. 9. Leave the vessel last in case of wreck. Robbery. Impose correctional punishment on those who. (Art. Make contracts for the charter of vessel in the absence of ship agent. vs. (Art. respectively. Loss and damage to the goods loaded on the vessel without prejudice to their right to free themselves from liability by abandoning the vessel to the creditors. Insubordination in serious matters.  Qualifications: 1. 620) Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain towards Passengers and Cargoes 1. Damages caused to the vessel or to the cargo by force majeure. 7. and provisioning of the vessel unless he has expressly bound himself personally or has signed a bill of exchange or promissory note in his name. Order repair of vessel to enable it to continue its voyage. For arrivals under stress. By a loan on bottomry. Be on deck while leaving or entering the port. equipment. fail to comply with his orders or are wanting in discipline. 609)  Inherent powers: 1. 8. except on the following grounds: a. Command the crew and direct the vessel to its port of destination. Technical director of the vessel. All contracts of the captain. Demand a pilot while entering or leaving a port. 5. Appoint crew in the absence of ship agent. For deviations. he may discharge them at his discretion. 618) C. 3. Theft. Keep a Log Book. Hold in custody properties left by deceased passengers and crew members. Damages due to mutinies. equip and provision the vessel. 587) Duty of Ship Agent to Discharge the Captain and Members of the Crew  If the seamen contract is not for a definite period or voyage. CA). 10. 3. 611)  Duties: 1. and provision the vessel.e. 5. OFFICERS AND CREW 1. From the consignee of the vessel. 605) B. From the consignee of the cargo. Legal capacity to contract. 6. 2. b. Stay on board during the loading and unloading of the cargo. and 6. 2. CAPTAINS AND MASTERS  They are the chiefs or commanders of ships. i. he may not discharge them until after the fulfillment of their contracts. 4. By drawing on the ship agent. Protest arrivals under stress and in case of shipwreck. By sale of part of the cargo.  The terms have the same meaning. Damage caused to the vessel or to its cargo through malice or manifest or proven negligence. 3. Must have passed the required physical and mental examinations required for licensing him as such. Accounting Book and Freight Book. Follow instructions of and render an accounting to the ship agent. 4. equip. at the port of arrival. 2. e. c. large and overseas. 612)  A ship’s captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage (Inter-Orient Maritime Enterprises Inc. Sailing Mate/First Mate 2. whether authorized or not. etc. (Art. Obligations contracted for the repair.  Nature of position (3-fold character): 1. (Art.Civil Liabilities of the Shipowner And Ship Agent 1. (Art. Bring on board the proper certificate and documents and a copy of the Code of Commerce. 3. Habitual drunkenness. (Art. 603)  If for a definite period. (Art. 7. and small and coastwise. Comply with the requirements of customs. 5. 6. Examine the ship before the voyage.

Keep the engines and boilers in good condition. By the voyage. 3. (Art.  Does not include the passengers or the persons whom the vessel is transporting. powers and responsibilities. 6. 3. or in certain waters. 649) E. Arrange well the cargo.3. keeping an account and record of transaction as required in the accounting book of the captain. he may take in foreigners. the sailing mates. 3. one of them shall be the chief engineer. (Art. (Art. Keep the Binnacle Book. Inform the captain of any damage to the motor apparatus.  Hired by the ship agent. Provide himself with maps and charts with astronomical tables necessary for the discharge of his duties.full payment. 4. 5. (Arts. sickness. and in their absence. 5. full. 5. 4. 645) Complement of the Vessel  All persons on board. or the ship’s company. Inventory the rigging and equipment of the vessel. 628 . the captain hires them. or a naval war with the power to which the vessel was destined occurs. compensation up to time of death if engaged on wage b. Discipline the crew. and other instruments pertaining to the engines. spare parts. 2. the master does not surrender his vessel to the . 4. By the month. (Art.full payment. Perpetration of a crime. If a disease breaks out and be officially declared an epidemic in the port of destination. If the vessel should change owner or captain. Preserve the hull and rigging of the vessel.  While in exercising his functions a pilot is in sole command of the ship and supersedes the master for the time being in the command and navigation of the ship. to conduct a vessel into or out of ports. SUPERCARGOES  Persons who discharges administrative duties assigned to him by ship agent or shippers. thus including the crew. Responsible for all the damages caused to the vessel and the cargo by reason of his negligence. 627)  Duties: 1. Physical incapacity. if laid up. Repeated insubordination.  Master pro hac vice for the time being in the command and navigation of the ship. Repeated incapacity and negligence. If. Assign work to crew members. maneuvers. if by voyage . By share of profits or freightage. (Art. want of discipline.half of amount if death occurs on voyage out. 4. D. Habitual drunkenness. 2. 3. Crew  No liability under the following circumstances: 1. Just Causes for the Discharge of Seaman While Contract Subsists 1. engineers. where he is present and in his absence. If death is natural: a. 6. Change the course of the voyage on consultation with the captain and the officers of the boat. if by shares . Engineers 4. 2. and 3.  Duties: 1. (Art. stokers and other employees on board not having specific designations.  The term generally connotes a person taken on board at a particular place for the purpose of conducting a ship through a river. before beginning voyage. 647) Sailing Mate/First Mate  Second chief of the vessel who takes the place of the captain in case of absence. and full. Keep an Engine Book. if captured due to carelessness .  Third in command  Duties: 1. if before departure. assuming in such case their powers and responsibilities. following the decision of the captain in case of disagreement. PILOT  A person duly qualified. if captured in defense of vessel . When two or more are hired. 634) Classes of Seaman’s Contracts 1. 637) Rules in case of Death of a Seaman  The seaman’s heirs are entitled to payment as follows: 1. (Art. Supervise all personnel maintaining the engine. 3.none. 632) Engineers  Officers of the vessel but have no authority except in matters referring to the motor apparatus. 2. 2. captain attempts to change it. road or channel. In charge of the motor apparatus. 632) Crew  The aggregate of seamen who man a ship. Not to change or repair the engine without authority of the captain. necessary for the management. Desertion. 4. and licensed. preferring Filipinos. or death and shall assume all of his duties. if on voyage in c. and service. but not exceeding 1/5 of the crew.wages up to the date of the capture. 2. (Art. if after departure 2. if death is due to defense of vessel . or from a port.631) Second Mate  Takes command of the vessel in case of the inability or disqualification of the captain and the sailing mate. from the captain to the cabin boy. 3.

 A contract by which an entire ship. 689) Commercial law concept CHARTER PARTY An entire or complete contract. as when the pilot is obviously incompetent or intoxicated (Far Eastern Shipping Company vs. except when the cause arises from the unworthiness of the vessel.III PPA Admin Order 0385) SPECIAL CONTRACTS OF MARITIME COMMERCE 1. The shipowner leases to the charterer the whole vessel. Consensual contract BAREBOAT OR DEMISE CHARTER Charterer becomes liable to others caused by its negligence Charterer regarded as owner pro hac vice for the voyage Owner of vessel relinquishes possession. p. lessee cannot give up the lease by paying a portion of the amount agreed upon. Marine insurance CHARTER PARTY  A contract by virtue of which the owner or agent binds himself to transport merchandise or persons for a fixed price. It transforms a common carrier into a private carrier. Voyag e or trip charter – the vessel is leased for one or series of voyages usually for purposes of transporting goods for charterer. Contract of Affreightment – A contract whereby the owner of the vessel leases part or all of its space to haul goods for others.11. who have legal control and possession of the vessel 2. 2. PERSONS WHO MAY MAKE A CHARTER 1. The new owner is not compelled to respect the charter party so long as he can load the vessel with his own cargo.  Kinds: a. Bareboat or demise – The charterer provides crew. who thereby become the charter’s servants. the charterer merely having use of the space in the vessel in return for his payment of the charter hired. command and navigation to charterer Common converted carrier. Because the charterer is treated as owner pro hac vice. The charterer is liable as if he were the owner. or some principal part thereof is let/leased by the owner to another person for a specified time or use. transferring to the latter the entire command. 2. Accident caused by force majeure or natural calamity provided the pilot exercised prudence and extra diligence to prevent or minimize damages. R. just for that one particular purpose only. Aquino. 2004 ed.  The charterer becomes the owner of the vessel pro hac vice. If the leased property is sold to one who knows of the existence of the lease. (Sec. There are occasions when the master may and should interfere and even displace the pilot. the new owner must respect the lease. EXCEPT: 1. either in whole or in majority part. food and fuel. the Harbor Pilot is responsible for damage to a vessel or to life or property due to his negligence.P. Charterer  Classes: 1. CA. The vessel owner retains possession. the charterer assumes the customary rights and liabilities of the shipowner to third persons and is held liable for the expense of the voyage and the wages of the seamen. Loan on bottomry 5. command and navigation of the ship. vs. command and navigation of the ship Common carrier is not converted to a private carrier. Ship owner or ship agent 2. Loan on respondentia 6. 226 SCRA 476)  Parties: 1. including the master and the crew. carrier is to private BILL OF LADING More like a private receipt which the captain gives to accredit goods received from persons Real contract CONTRACT OF AFFREIGHTMENT (TIME OR VOYAGE CHARTER) Owner remains liable as carrier and must answer for any breach of duty Charterer is not regarded as owner. Contract of transportation of passengers on sea voyages 4. T. Countermand or overrule by the master of the vessel in which case the registered owner of the vessel is liable. Charterer may subcharter entire vessel to .  The shipowner retains the possession. Owner or owners of the vessel. Civil law concept CHARTER PARTY Charterer may rescind charter party by paying half of the freightage agreed upon. possession and consequent control over the vessel’s navigation. Charter party 2. CA). 518) Liablity of Pilot GENERAL RULE: On compulsory pilotage grounds.  Compulsory Pilotage – States possessing harbors have enacted laws or promulgated rules requiring vessels approaching their ports to take on board pilots licensed under the local laws. b. Time charter – vessel is chartered for a fixed period of time or duration of voyage. LEASE If for a definite period. & Hernando. Art. Bill of lading 3.pilot and the pilot is not the master. (Planters Products. (Art. (Notes and Cases on the Law on Transportation and Public Utilities. Inc.

) Clause paramount or paramount clause A clause in a charter party providing that the COGSA shall apply. 669-678) Rights and Obligations of Parties SHIPOWNER OR SHIP AGENT 1. To wait if the vessel needs repair. 3rd person only if not prohibited in original charter. Existing vessel which should be placed at the disposition of the shipper 3. To pay freightage on unboarded cargo.598) Captain in the absence of the ship agent or consignee and only if he acts in accordance with the instructions of the agent or owner and protects the latter’s interests.) 6. 3. 690) 1. Return of the vessel due 1. 7. (Art. consignees or owners shall contribute with the shipowner in general average. War or interdiction of commerce. 3. not to accept cargo from others. . 1997 ed. CHARTERER 1. (Arts. Justice Jose Vitug. To pay losses to others for loading uncontracted cargo and illicit cargo. Blockade. the cargo shippers. and 5. (Pandect of Commercial Law and Jurisprudence. then to the extent thereof the provision of the bill of lading is void. To pay the agreed charter price. Compliance with Art. 679-687) Rescission of a Charter Party At At charterer’s shipowner’s request request (Art 688) (Art. 4. 4. to bring cargo to nearest neutral port in case of war or blockade. 652 of the Code of Commerce 5. Error in tonnage or flag. Justice Jose Vitug. Prohibition to receive cargo. REQUISITES OF A VALID CHARTER PARTY 1. 1997 ed. Consent of the contracting parties 2. 3. (Art. To unload cargo clandesti nely placed To substitut e another vessel if load is less than 3/5 of capacity. Embargo. 4. subject to the extent that any term of the bill of lading is repugnant to the COGSA or applicable law. To place in a vessel in a condition to navigate. To pay expenses for deviation. Fortuitous causes (Art.679) Ship agent if authorized by the owner/s or given such power in the certificate of appointment. Failure to place the vessel at the charterer’s disposal. (Pandect of Commercial Law and Jurisprudence. If the extra lay days terminate without the cargo being placed alongside the vessel. 2. To leave the port if the charterer does not bring the cargo within the lay days and extra lay days allowed. 2. 689) 1. 4. By abandoning the charter and paying half of the freightage. 5. 2. even though the transportation is domestic. If the vessel is chartered wholly. (Arts. contract or otherwise. 2. 4. Sale by the owner of the vessel before loading by the charterer.3. Clauses Which May Be Included In a Charter Party Jason clause A stipulation in a charter party that in case of a maritime accident for which the shipowner is not responsible by law. Inability of the vessel to navigate. (Art. 2.609) 3. Freight 4. To observe represent ed capacity.

727) 3. aleatory contract. by virtue of which one person lends to another a certain amount of money or goods on things exposed to maritime risks. Lender loaned an amount larger than the value of the object due to fraudulent means employed by the on board. 2. – cost. C. 2. is a violation of contract and infringement of right of shipper and subjects carrier to liability if freight is lost event by cause otherwise excepted. (ART.days allowed to charter parties for loading and unloading the cargo. Outside of the pirates. If the effects on which the money is taken is not subjected to any risk. unilateral. the balance will be considered a simple loan. Full amount of the loan is not used for the cargo or given on the goods if all of them could not have been loaded.S. USUAL FORMS OF CONSUMMATING CONTRACTS 1. F. F. . or the transfer for further transportation from one ship or conveyance to alongside ship. Who may contract Shipowner or ship Only the owner of the agent. (Art. enemies or bad weather. 6. residence of the owners . Common elements: Exposure of security to marine peril. 3. BOTTOMRY/ RESPONDENTIA Not subject to Usury Law Liability of the borrower is contingent on the safe arrival of the vessel or cargo at destination The last lender is a preferred creditor ORDINARY LOAN (MUTUUM) Subject to Usury Law Not subject to any contingency (absolute liability) The first lender is a preferred creditor LOAN ON BOTTOMRY LOAN ON RESPONDENTIA Definition WHEN LOAN ON BOTTOMRY OR RESPONDENTIA REGARDED AS SIMPLE LOAN 1. (ART. 2. Goods pledged to secure repayment. Lay Days .726) 2. or the transfer of goods from the vessel stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached. 5. surnames and domiciles of the borrower and the lender. surname and domicile of the captain. CA. 3. Amount of the loan and the premium stipulated. Obligation of the debtor conditioned only upon safe arrival of the security at the point of destination.  If done without legal excuse. 1. 4. 720) Contents: Kind. 3. 719) 1. (Art. and 4. (ART. 719) Loan taken on security of the cargo laden on a vessel.F. 2. Time for repayment. and which is lost if the latter are lost. 2. C. Deadfreight – the amount paid by or recoverable from a charterer of a ship for the portion of the ship’s capacity the latter contracted for but failed to occupy. but rather on the fact of actual physical transfer of cargo from one vessel to another. Extra Lay Days – days which follow after the lay days have elapsed.B.721) 1. (Magellan Manufacturing vs. Terms: Loan made by shipowner or ship agent guaranteed by vessel itself and repayable upon arrival of vessel at destination. TRANSSHIPMENT OF GOODS  The act of taking cargo out of one ship and loading it in another. .A. with its earnings. Demurrage – the sum fixed in the charter party as a remuneration to the owner of the ship for the detention of his vessel beyond the number of days allowed by the charter party for loading or unloading or for sailing. 3. however competent and safe the vessel into which the transfer is made. 1. Forms: Public instrument Policy signed by the contracting parties and the broker taking part therein Private instrument (Art. which amount.O. Arrival at a port for repairs.I. 4. .the captain. insurance and freight. Voyage during which the risk is run (Art. Names. & F. 7.729) . 5. Name. Primage . and repayable upon safe arrival of cargo at destination.bonus to be paid to the captain after the successful voyage.  It is not dependent on the ownership of the transporting ships or in the change of carriers.cost and freight. 201 SCRA 102) LOAN ON BOTTOMRY AND RESPONDENTIA  A real. name and registry of the vessel. is to be returned if the things are safely transported. 5.

The same rule would apply to the hypothecation of the cargo by respondentia. Assembly and . Inc. it is particular average. whether ordinary or maritime. it is general average. 735) Note: If a vessel is hypothecated by bottomry only the excess is insurable. where only the vessel or only the cargo is saved. (Sec.) ACCIDENTS IN MARITIME COMMERCE 1. Loss due to the fault or malice of the borrower. (Pandect of Commercial Law and Jurisprudence. 810) occurrence of the average shall contribute to satisfy this average. The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of the value over the amount secured by bottomry.  Classes: 1. vessel or both.859) and lenders on bottomry and respondentia shall likewise contribute.Note: Under existing laws. 809 Art. and not the voyage. 101. and if it is proven that the goods were on board. 31. 2. G. common safety factor. Collision 4. the obligation of the borrower to pay is extinguished Real contract to the port of consignment.No. during the voyage designated. 3. Justice Jose Vitug. Particular or Simple Average 2. Agan. Loss due to inherent defect. Arrival Under Stress 3. the parties to a loan. 806)  The person whose property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes general average. (CB Circular 905) MARINE INSURANCE Indemnity is paid after the loss has occurred In case of loss of the vessel due to a risk insured against. to the common benefit. (Art. vs. 811) Requisites 1. (A. and to the cargo from the port of loading PARTICULAR OR GROSS OR GENERAL SIMPLE Definition Damages or expenses Damages or expenses caused to the vessel or deliberately caused in cargo that did not inure order to save the vessel. It is the safety of the property. Magsaysay. Loss due to the barratry on the part of the captain. (Art. EXCEPTIONS: 1. The value of what may be saved in case of shipwreck shall be divided between the lender and the insurer in proportion to the interest of each one. since a loan on bottomry partakes of the nature likewise of an insurance coverage to the extent of the loan accommodation. 809) (Art.  Expenses incurred to refloat a vessel. Concurrence of Marine Insurance and Loan on Bottomry/Respondentia 1. 3. Shipwreck AVERAGE  An extraordinary or accidental expense incurred during the voyage in order to preserve the cargo. may agree on any rate of interest. success. Gross or General Average  Where both vessel and cargo are saved.R. which constitutes the true foundation of general average. owners. (Art. 812)  The insurers (Art. Number of interests involved Only one interest Several interests involved involved Share in the damage or expense 100% share In proportion to the value of the owner’s property saved Right to recover No reimbursement There may be reimbursement Kinds (not exclusive) Art. L-6393. 1955) Hypothecary Nature of Bottomry/ Respondentia GENERAL RULE: The obligation of the borrower to pay the loan is extinguished if the goods given as security are absolutely lost by reason of an accident of the sea. Jan. in order to continue its voyage. deliberate sacrifice. 4. 2. The vessel was engaged in contraband. its cargo or both from and borne by respective real and known risk. Insurance Code) 2. 1997 ed. do not constitute general average. the obligation of the insurer becomes absolute Consensual contract LOAN ON BOTTOMRY OR RESPONDENTIA Indemnity is paid in advance by way of a loan In case of loss of the vessel due to a marine peril. 4. Liability The owner of the goods All the persons having which gave rise to the an interest in the vessel expense or suffered the and the cargo therein at damage shall bear this the time of the average. which accidentally ran aground. Averages 2. (Art. and 5.732). (Art. (Art. common danger. Not only is there absence of a marine peril. proper formalities and legal steps. The cargo loaded on the vessel be different in from that agreed upon. and all damages or deterioration suffered by the vessel from departure to the port of destination. 811 Procedure for recovery 1. and deliberateness.

825)  Steps: 1. (Pandect of Commercial Law and Jurisprudence. In overseas shipping.855) 2. in case the cause has been risk of enemies. if during the voyage the vessel cannot continue the trip to the port of destination. privateers and other valid grounds. privateers. (ART. preferring the heaviest one with the least utility and value. 815)  Jettisoned goods are not res nullius nor deemed “abandoned” within the meaning of civil law so as to be the object of occupation by salvage. beginning with the one with greatest weight and smallest value.855 (2)) 3. 820) Who bears expenses: The shipowner or ship agent is liable in case of unlawful arrival under stress. 819) 1. Justice Jose Vitug. If deck cargo is loaded with the consent of the shipper on overseas trade.  It is the duty of the captain to continue the voyage without delay after the cause of the arrival under stress has ceased failing in such duty renders him liable. Captain shall assemble the officers and summon the persons interested in the cargo who may attend the meeting but without a right to vote. When lawful The inability to continue voyage is due to lack of provisions. pirates. (Rule IX.deliberation 2. Captain should determine during the voyage if there is well founded fear of seizure. 3. 2. it must always contribute to general average and if jettisoned would be entitled to reimbursement. Those which are on the deck. Ratification by captain under oath. lack of foresight or skill of captain. but should the same be jettisoned. voyages are usually short and the seas are generally not rough. DOMESTIC Deck cargo is allowed INTERNATIONAL Deck cargo is not allowed With shipper’s consent General average Particular average Without shipper’s consent Captain is liable Captain is liable ARRIVAL UNDER STRESS (ARRIBADA)  The arrival of a vessel at the nearest and most convenient port instead of the port of destination.)  In order that the jettisoned goods may be included in the gross or general average. 4. well-founded fear of seizure. Resolution of the captain 3. within 24 hours from arrival. there must first be an assembly before departure. and Malice. 821) 2. Goods carried on deck. (Art. Risk of enemy not well known or manifest Defect of vessel due to improper repair. 3. (Art. 816) York-Antwerp (Y-A) Rules on Determining Liability for Averages With Regard To Deck Cargo 1. it must always contribute to general average. Fuel for the vessel if there is more than sufficient fuel for the voyage. the vessel is exposed for many days to perils of the sea. Goods not recorded in the books or records of the vessel. If deck cargo is loaded with the consent of the shipper on coastwise shipping. When unlawful Lack of provisions due to negligence to carry according to usage and customs. But they shall not be liable for the damages caused by reason of a lawful arrival. 6. 813814) GOODS NOT COVERED BY GENERAL AVERAGE EVEN IF SACRIFICED 1. (Art. 2. (Art. 2. York-Antwerp Rule) Jettison  Act of throwing cargo overboard in order to lighten the vessel. 3. (Art.  Order of goods to be cast overboard: 1. or accidents of the sea disabling it to navigate. (ART. However. Deck cargo is allowed only in domestic/coastwise/inter-island shipping. and is prohibited in international/overseas/foreign shipping. Detailed minutes 5. Entry of the resolution in the logbook 4. the existence of the cargo on board should be proven by means of the bill of lading. (Art. Delivery of the minutes to the maritime judicial authority of the first port. it would not be entitled to reimbursement because there is violation of the Y-A Rules. Those which are below the upper deck. The officers shall determine and agree if . (Arts. negligence . 1997 ed.  Reason: In domestic shipping.

(Art. The sailing vessel is required to keep her course unless the circumstances require otherwise. but the shippers of both vessels may go against the shipowners who will be solidarily liable. There is a presumption against the vessel with spread sails which collides with another which is at anchor and cannot move. 831) 5. (Manila Steamship vs. It is in this zone that vessels must strictly observe nautical rules. 827) 3. Where a steamship and a sailing vessel are approaching each other from opposite directions. First zone – all time up to the moment when risk of collision begins. When two vessels are about to enter a port. 9. 5. Even if such sudden movement is wrong. such as a bridge post. (Far Eastern Shipping v. 3. the smaller should give the right of way to the larger one. or navigational aid. v. or on intersecting lines. the defense of due diligence in the selection and supervision of employees is unavailing in case of a maritime tort resulting in collision. Third zone – time when collision is certain and time of impact. no responsibility will fall on said faultless vessel. 26 PHIL 632) Cases Covered By Collision and Allision 1. It is not a civil tort governed by the Civil Code but a maritime one governed by Arts. Vessel at fault not known  Each vessel must bear its own loss. both vessels bear their respective damage. but the shippers of both vessels may go against the shipowners who will be solidarily liable. there is well-founded reason after examining the circumstances. but both should be solidarily liable for damage to the cargo of both vessels. 2. 8. 2. Luzon Stevedoring vs.  An error in this zone would no longer be legally consequential. Objections and protests shall likewise be entered in the minutes. When two vessels meet. CA. unless it can be proved that there was no fault on its part. 830)  The doctrine of res ipsa loquitur applies in case a moving vessel strikes a stationary object. 5. 826-839 of the Code of Commerce. Vessels must have “proper look-outs” or persons trained as such and who have no other duty aside therefrom. (Urrutia and Co. 4. One vessel at fault  Vessel at fault is liable for damage caused to innocent vessel as well as damages suffered by the owners of cargo of both vessels. There is a presumption against an improperly moored vessel. 4.  Error in Extremis . A vessel leaving port should leave the way clear for another which may be entering the same port.  It is in this period where conduct of the vessels is primordial. Baco River Plantation Co. shall watch with the highest diligence her course and movements so as to be able to adopt such timely means of precaution as will necessarily prevent the two boats from coming in contact. Fortuitous event/force majeure  No liability.. Each bears its own loss. Zones of Time in the Collision of Vessels 1. Second zone – time between moment when risk of collision begins and moment it becomes a practical certainty. if they collide. 2. dock. The captain shall have the deciding vote. (Art. There is a presumption against a vessel which has no buoys to indicate the location of its anchors to prevent damage to vessels which may approach it. COLLISION  Impact of two vessels both of which are moving. unless a departure therefrom becomes necessary to avoid imminent danger. the steamship from the moment the sailing vessel is seen. The vessel which leaves later is presumed to have collided against one which has left earlier. 7. even when the crew of the latter has received word to lift anchor. There is a presumption against the vessel which sets sail in the night. Third vessel at fault  The third vessel will be liable for losses and damages. 828)  Doctrine of Inscrutable Fault – In case of collision where it cannot be determined which between the two vessels was at fault.4. Both vessels at fault  Each vessel must bear its own loss.sudden movement made by a faultless vessel during the third zone of collision with another vessel which is at fault during the 2nd zone. The agreement shall be drafted and the proper minutes shall be signed and entered in the log book. the fault is presumed to be imputable to the one who arrived later. the farther one must allow the nearer to enter first. 826) 2. (Art. (Art. Allision  Impact between a moving vessel and a stationary one. CA) Nautical Rules as to Sailing Vessel and Steamship 1. Nautical Rules to Determine Negligence 1. 3. 6. Insa Abdulhaman)  Doctrine of Last Clear Chance and Rule on Contributory Negligence cannot be applied in collision . CA)  Even if the cause of action against the common carrier is based on quasi-delict. (Art.  No rule is as yet applicable for none is necessary. when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason. (Smith Bell v.

transportation. CIR)  As understood in the port business.cases because of Art. 612(8)). This is deemed incorporated in the bill of lading even if not mentioned in it. R. the term consists of the handling of cargo from the hold of the ship to the dock.) MARITIME PROTEST  Condition precedent or prerequisite to recovery of damages arising from collisions and other maritime accidents.  Liability: 1. with respect to the circumstances attending such occurrence. the liability limit is set at $500 per package or customary freight unit unless the nature and value of such goods is declared by the shipper. the owner of the vessel may demand indemnity from said captain. Where the vessel has gone through a hurricane or when the captain believes that the cargo has suffered damages or averages (Art. Comm. or running against an object in sea or on the coast. overseas/internatio nal/foreign (from foreign port to Philippine port). (Commercial Law Review. Water/maritime for the carriage of goods. E. the actual loading. 4(5). Lazaro)  The loading on the ship of outgoing cargo is also part of stevedoring work. liability 2. 835).P. Collision (Art. & Hernando. 2004 ed. the consignee must prove that the damage was due to the negligence and while the goods are in the custody of the arrastre operator. Prudential Guarantee)  The matter of quantity. need not be protested.  It is a written statement made under oath by the captain of a vessel after the occurrence of an accident or disaster in which the vessel or cargo is lost or damaged. 835) SHIPWRECK  It is the loss of the vessel at sea as a consequence of its grounding.) STEVEDORING SERVICE  The carriage of goods from the warehouse or pier to the holds of the vessel. negligence or lack of skill of the captain. C. Villanueva. as may be pertinent. SPECIAL CONCEPTS ARRASTRE SERVICE  A contract for the unloading of goods from a vessel. vs. 65) APPLICABILITY  The transportation must be: 1. Amount of carrier’s Notice of damage Prescriptive period 2. (Art. discharging functions which are heavily invested with public interest. Razon. inspection of the goods should be done at pier-side. Aquino. ICTSI v. C. Inc. (Chief of Staff vs. (US Lines v. 624).  It can be applied in domestic sea transportation if agreed upon by the parties.) CONTAINERIZATION/ “SAID-TO-CONTAIN”/ “SHIPPER’S LOAD AND COUNT” SYSTEM  System whereby the shipper loads his cargoes in a specially designed container. 843). 612(15).)  Significance: When a person brings in cargo from abroad. Villanueva. 4.  Applicability: Overseas trade only. (Eastern . CARRIAGE OF GOODS BY SEA ACT/COGSA (C. 3. (Clause paramount or paramount clause) IMPORTANT FEATURES: 1. and 2) on collision time. 2004 ed. can equally apply to shipwrecks. which will then deliver the cargo to the importer. Manila Railroad) 2.  Before whom made: competent authority at the point of collision or at the first port of arrival. (Notes and Cases on the Law on Transportation and Public Utilities. The unloading must be done by the arrastre operator. or to a barge. Comm. 841)  The rules on collision or allision.  Excuses for not filing protest: 1) where the interested person is not on board the vessel. (Art.  If the wreck was due to malice. CA) III. Home Assurance) Note: In order to attribute to the carrier any damage to the shipment that may be found. description and conditions of the cargo inside the container is the sole responsibility of the shipper. and 3. (Ibid.  Who makes: Captain  When made: within 24 hours from the time the collision took place. 836)  Cases applicable: 1. unless there is stipulation to the contrary. (Hartford Fire Insurance v. It occurs when the vessel sustains injuries due to a marine peril rendering her incapable of navigation. and the sealing of the container. in case of unloading at sea. 3. T. he cannot unload and deliver the cargo by himself. if in the Philippines and to the Philippine consul. Of Customs. 2004 ed. 2.)  Nature of business: It is a public utility. for the purpose of recovering losses and damages. seals the container and delivers it to the carrier for transportation. (Anglo-Fil Trading Corp. Reyma Brokerage v. Similar to a warehouseman (Lua Kian v. (Commercial Law Review. (Art. in case of pier-side unloading. Phil.827 of the Code of Commerce. (Bankers vs. Arrival under stress (Art. (US Lines vs.A. The carrier does not participate in the counting of the merchandise for loading into the container. Prince Line) 3. Of Customs. Similar to a common carrier (Northern Motors v. AMOUNT OF CARRIER’S LIABILITY  Under the Sec. No. if the collision took place abroad. Shipwrecks (Arts. Solidary liability with the common carrier Note: In order that the arrastre operator may be held liable.

Death or injury of a passenger if the accident causing it took place on board the aircraft or in the course of its operations of embarking or disembarking.  International transportation . If the requirements under the Convention are not complied with. The express agreement of the parties (Universal Shipping Lines.  The WC shall also apply to fortuitous transportation by aircraft performed by an air transportation enterprise. Nordeutscher Lloyd. Loss or damage to baggage or goods c.SCRA 359)  The insurer exercising its right of subrogation is bound by the one-year prescriptive period. APPLICABILITY  The transportation must be: International transportation. In such instance the. Note: The filing of a notice of claim is not a condition precedent. 3(6))  Rules: a. (Sec. 1749. Merchants Ins. 17) 2. IMPORTANT CONCEPTS: 1. (“round trip”. Alejandro. 6 SCRA 180)  The one-year period shall run from delivery of the last package and is not suspended by extrajudicial demand. IAC. if there is an agreed stopping place within a territory subject to the sovereignty. it does not apply to the claim against the insurer for the insurance proceeds. (Fil. or 2. Combined transportation agreement PASSENGER TICKET Passenger BAGGAGE CHECK Checked-in baggage AIR WAYBILL Goods to be shipped LIABILITY OF CARRIER FOR DAMAGES 1. (Dole Phils. CA). The date when the goods should have been delivered (non-delivery). Delivery of the goods (delivered but damaged goods). Air way bill 2. and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty. Maritime Co. Am.. Destruction. American Steamship Agencies Inc. Transportation documents a. CA) IV. Baggage check c. (Art. 2. PRESCRIPTIVE PERIOD  Action for loss or damage to the cargo should be brought within one year after: a. applies to NOTICE OF DAMAGE (SEC... 150 SCRA 463)  Note that Art. However. or authority of the same High Contracting Party. When public policy is contradicted. (Stevens & Co. Civil Code rules on prescription shall apply. (Ang vs.K. mandate. The filing of an action in court until it is dismissed. if it took place during the “transportation by air”. 1 Sec. it is inapplicable in case of misdelivery or conversion. if it has been regarded by the parties as a single operation. vs. vs. IAC.) and damage arising from delay or late delivery (Mitsui O. 2. or b.3) WHEN INAPPLICABLE 1. whether it has been agreed upon under the form of a single contract or of a series of contracts. Latent damage: shipper should file a claim with the carrier within three days from delivery. 3[6])  “Loss or Damage” as applied to the COGSA contemplates a situation where no delivery at all was made by the shipper of the goods because the same had perished. Lines Ltd. vs. Inc. Successive carrier agreement 4. Jurisdiction 5. (Union Carbide Phils. vs. 1. vs. mandate or authority of another power. suzerainty. (Art. 18) and  Transportation by air – The period during which the baggage or goods are in the charge of the carrier. Passenger ticket b. . loss or damage to any baggage or goods. Co.any transportation in which the place of departure and the place of destination are situated either: 1.)  Transportation to be performed by several successive air carriers shall be deemed to be one undivided transportation. 188 SCRA 170) 2. baggage or goods. (Art. vs.  The one-year prescriptive period is suspended by: 1. whether in an airport or on board an aircraft. Death or injury to passengers b.Inc. Carriage of passengers.148 SCRA 118)  The one-year period shall run from delivery to the arrastre operator and not to the consignee. or disappeared in such a way that their existence is unknown or they cannot be recovered.Shipping vs. Jur. Mayer Steel Pipe Corp. even though that power is not a party to the Convention. gone out of commerce.S. Inc. Delay 3. Liability of the carrier for damages a. Within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or transshipment. NCC domestic/inter-island/coastwise trade. Manila Railroad Co. Thus. Within the territory of a single High Contracting Party. Air transportation. and 3. vs. WARSAW CONVENTION OF 1929 (WC) PURPOSE: To protect the emerging air transportation industry and to secure the uniformity of recovery by the passengers. Patent damage: shipper should file a claim with the carrier immediately upon delivery b.

Carriage of baggage or goods a. it could exculpate itself completely (Art. date of expected arrival c. Passenger or consignor can file an action against the first carrier and the carrier in which the damage occurred b. 192 SCRA 9) LIMIT OF LIABILITY (Art. 14 days from receipt of baggage/goods  The complaint is a condition precedent. the action for damages may be filed in the: a. as amended by Guatemala Protocol.  In KLM Royal v. In case of delay. in any place whatsoever. The obligation of the former remained and did not cease even when the breach occurred not on its own flight but on that of another airline which had undertaken to carry the passengers to one of their destinations. EXCEPTION: Agreement or contract whereby the first carrier assumed liability for the whole journey. baggage or goods. (Art. It does not preclude the application of the Civil Code and other pertinent local laws. Notice of claim  A written complaint must me made within: a. Uy the two-year prescriptive period was not applied where the airline employed delaying tactics. there being a simple loss of baggage without any improper conduct on the part of the officials or employees of the airline or other special injury sustained by the passenger. the WC was applied as regards the limitation on the carrier’s liability. date on which the transportation stopped.000 per passenger EXCEPTION: Agreement to a higher limit ACTION FOR DAMAGES 1. IAC) 1. b. Delay in the transportation of passengers. (Alitalia vs. (Art.  These carriers are jointly and severally liable. 29)  In United Airlines vs. Tuller. Court of domicile of the carrier. Alitalia vs. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value. in case of a landing outside an airport. the action is barred except in case of fraud on the part of the carrier. (China Airlines vs. the ticket-issuing airline is the principal in a contract of carriage while the endorsee-airline is the agent. Passengers GENERAL RULE: $100. (Art. 23)  Carrier is not entitled to the foregoing limit if the damage is caused by willful misconduct or default on its part. where there was satisfactory evidence of malice or bad faith attributable to its officers and employees. Goods to be shipped GENERAL RULE: $20 per kilogram EXCEPTION: In case of special declaration of value and payment of a supplementary sum by consignor. the WC does not operate as an exclusive enumeration of the instances of an absolute limit of the extent of liability. Members of the International Air Transportation Association (IATA) are under a general pool partnership agreement wherein they act as agent of each other in the issuance of tickets to contracted passengers to boost ticket sales worldwide and at the same time provide passengers easy access to airlines which are otherwise inaccessible in some parts of the world. It includes any transportation by land or water outside an airport if such takes place in the performance of a contract for transportation by air. (Art. Carriage of passengers GENERAL RULE: Action is filed only against the carrier in which the accident or delay occurred. 30)  A contract of international carriage by air. 19) Note: The Hague Protocol amended the WC by removing the provision that if the airline took all necessary steps to avoid the damage. for the purpose of loading. or as not restrictive of the carrier’s liability. 22. 3 days from receipt of baggage b. Prescriptive period  Action must be filed within 2 years from: a.  An agreement relieving the carrier from liability or fixing a lower limit is null and void. IAC. the WC has invariably been held inapplicable.or. IAC. (Alitalia vs. although performed by different carriers under a series of airline tickets constitutes a single operation. 7 days from receipt of goods c. CA)  In PanAm v. 1971. (American Airlines vs. It does not regulate or exclude liability for other breaches of contract by the carrier. RULE IN CASE OF VARIOUS SUCCESSIVE CARRIERS 1. or for some particular or exceptional type of damage. 26) 2. (Art. 20(1)). 2. or transshipment. 3. 2. (Art. CA)  Under a general pool partnership agreement. or misconduct of its employees. carrier is liable to not more than the declared sum unless it proves the sum is greater than actual value. (Alitalia vs. IAC) . Court of its principal place of business. Hand-carried baggage  $1000/passenger 4. Chiok) JURISDICTION  At the option of the plaintiff. 25)  Thus. delivery. date of arrival at the destination b. Checked-in baggage GENERAL RULE: $20 per kilogram EXCEPTION: In case of special declaration of value and payment of a supplementary sum by consignor. 3. Passenger or consignee can file an action against the last carrier and the carrier in which the damage occurred. Without the complaint.

Aquino. R. who shall divide it equitably. 616) CONTRACT OF TOWAGE  A contract whereby one vessel.  Persons who have no right to a reward for salvage: 1. derelict or recapture. Person who commenced Salvage in spite of opposition of the Captain or his representative. or are unable to protect or secure. total or partial. If a vessel is the salvor.S.  Derelict – a ship or her cargo which is abandoned and deserted at sea by those who are in charge of it. (Art. and there sink and remain under water. 3. Swedish East Asiatic Co. Court of the place of destination. 28(1) is a matter of jurisdiction rather than of venue. Services are successful. or such property recovered from actual peril or loss.). Valid object of salvage. as in cases of shipwreck. 2A C.  The forum of action provided in Art. 4. (Sec. usually motorized. for a compensation. Northwest. The reward should constitute a sufficient compensation for the outlay and effort of the salvors and should be liberal enough to offer an inducement to others to render services in similar emergencies in the future.  If it is clear that the intention to return is slight. 2. 2616) Requires success. whether loaded or not with merchandise. the salvage which was done thereafter is considered valid. If sold (no claim being made within 3 months from publication). Crew of the vessel saved. is not a salvage service. 2004 ed. a person who fails to deliver a salvaged vessel or cargo to the Collector of Customs. 13)  Taking passengers from a sinking ship. without any hope of recovering it. (Notes and Cases on the Law on Transportation and Public Utilities.J. It is a contract for services rather than a contract of carriage. Ligan or Lagan – goods cast into the sea tied to a buoy. without rendering any service in rescuing the vessel. or without any intention of returning to it. 11-12) 4. after deducting expenses and the salvage claim. or d. 2 5% to the captain. being a duty of humanity and not for . T. 2. and c. 50% of the said proceeds shall go to the salvors. The reward is fixed by the RTC judge in the absence of agreement or where the latter is excessive. pulls another. In accordance with Sec.c. 2. 9) 2. otherwise no payment Must be done with the consent of the captain/crewmen Vessel must be involved in an accident Fees distributed among crewmen TOWAGE Governed by Civil Code on contract of lease Success is not required Only the consent of the tugboat owner is needed Vessel need not be involved in an accident Fees belong to tugboat owner the RULES ON SALVAGE REWARD 1. preserving the goods or the ship which the owner or those entrusted with the care of them have either abandoned in distress at sea. the reward shall be distributed as follows: a. the property is not derelict.P. it is derelict and a change of their intention and an attempt to return will not change its nature (Erlanger & Galinger vs.173. SALVAGE Governed by special law (Act No.) V. Floatsam or Flotsam – goods which float upon the sea when cast overboard. from one place to another.  The intention of those in charge must be ascertained. p. Judge Diaz). 4. shall go to the owner. and the other half to the government. Ltd. SALVAGE LAW (Act No. 5 0% to the shipowner. Object must have been exposed to marine peril (not perils of the ship). by his own labor. Compensation allowed to persons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from impending sea peril. 2616) SALVAGE  Two concepts: 1. If those in charge left with the intention of returning. (Santos III vs. (Sec. 2. 3 of the Salvage Law. 3. if the latter does not claim it within 3 years. the proceeds. Court where it has a place of business through which the contract has been made. 3. (Secs. 28(1)) NOTE: It is the passenger’s “ultimate destination” not “an agreed stopping place” that determines the country where suit is to be filed. so that they may be found again by the owners (p. Services one person renders to the owner of a ship or goods. b. Services rendered voluntarily (neither an existing duty nor out of a preexisting contract). 2 5% to the officers and crew in proportion to their salaries. 3. Ship itself.  Requisites: 1. Jetsam – goods which are cast into the sea.  Subjects of Salvage: 1. & Hernando. or of procuring assistance. but if they quitted the property with the intention of finally leaving it.

Airships. except for rates fixing. It has been replaced by the following government agencies: LTO. 30 SCRA 408)  It is a “property” and has a considerable value and can be the subject of sale or attachment. . e. To protect the public against unreasonable charges and poor. No. Requiring operators to furnish safe. 1.g. PUBLIC SERVICE  A person who owns. manages or controls in the Philippines for hire or compensation. Ice plants.  A CPC or a CPCN constitutes neither a franchise nor a contract. PUBLIC SERVICE ACT (C. NEA. To secure adequate. and done for general business purposes.. Applicant must be a citizen of the Philippines or a corporation or entity 60% of the capital of which is owned by such citizens. Radio companies. Setting up of standards and classifications. Luneta Motor Co. is required by law. 146) PURPOSES: 1. 13b. Villegas. 2. CAB. New and additional burdens. Applicant must prove public necessity. CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY (CPCN) An authorization issued by the appropriate government agency for the operation of public service for which a prior franchise is required by law. 6. (Luzon Stevedoring vs.) REQUREMENTS FOR GRANTING CPC OR CPCN 1. alteration of the certificate. Revocation of this certificate deprives him of no vested right. tolls. 3. Applicant must have sufficient financial capability to undertake the proposed services and meeting the responsibilities incident to its operation. and proper service. sustained service for the public at the least possible cost. PSC) NOTE: The Public Service Commission created under the Public Service Law has already been abolished under P.D. and charges. Fixing of rates. NWRC. with general or limited clientele. and 7. 2. 3. 4. (Luque vs. Nor does it confer upon the holder any proprietary right or interest or franchise in the public highways. adequate. Applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest on a proper and suitable manner. 207 SCRA 343. Raymundo vs. CERTIFICATE OF PUBLIC CONVENIENCE (CPC) An authorization issued by the appropriate government agency for the operation of public services for which no franchise. NTC. 1 and other issuances. 3. whether permanent. ATO. inefficient service. 3. confers no property right. VI. (CogeoCubao Operators and Drivers Assn. 5.A. (Sec. Public markets. Warehouses. except for the fixing of maximum rates for fare and freight.reward. CA. whether such person or company has held himself or itself out as ready to serve the public or a portion of the public generally. Investigation any matter concerning public service. telephone and other services. vs. No. except as to rates fixing. common carriers. Issuance of CPC or CPCN. BOE. To protect and secure investments in public services. CA 146)  A casual or incidental service devoid of public character and interest is not brought within the category. 2. EXCEPTIONS: 1. occasional or accidental. 2. power and water supplies. ERB. and is a mere license or a privilege. The holder of said certificate does not acquire a property right in the route covered thereby. LTFRB. either municipal or legislative.g. 4. 2. ice plants. communication and similar public services. e. operates. POWERS REQUIRING PRIOR NOTICE AND HEARING POWERS EXERCISABLE WITHOUT PRIOR NOTICE AND HEARING 1. To prevent ruinous competition. Animal drawn vehicles and bancas moved by oar or sail. 4. and MIA. or even revocation or annulment thereof is reserved to the State. Public services owned or operated by the government. any common carrier or public utility. AUTHORITY TO OPERATE PUBLIC SERVICES GENERAL RULE: No public service shall operate without having been issued a certificate of public convenience or a certificate of public convenience and necessity. The question depends on such factors as the extent of services.

Its approval is not a condition precedent to the validity of the contract. 6. 1409. 164 SCRA 36) 3. Grant of special permits to make extra or special trips in territories specified in the certificate. 3. etc. that the circumstances between the two applicants are more or less equal. Issue any stock or stock certificates representing an increase of capital. after the hearing. If it turns out. 7. Establishment of rules to secure accuracy of all meters and all measuring appliances. 3. Capitalize any franchise in excess of the amount actually paid to the Government. prior to the hearing. 146. 18 and 19) ACTS REQUIRING PRIOR APPROVAL 1. 5. 2. 6. 5. Issuance of orders requiring establishment or maintenance of extension of facilities. One which yields to the carrier a fair return upon the value of the property employed in performing the service. especially when given the opportunity. for a fee or percentage of such earnings. improper or inadequate service as determined by the proper authority. PRIOR OPERATOR/OLD OPERATOR RULE  The rule allowing an existing franchised operator to invoke a preferential right within the authorized territory as long as he renders satisfactory and economical service. 4. to transfer the responsibility to an indefinite person. may be negotiated and completed before the approval by the proper authority. . 4. Valuation of properties of public utilities. 4.  The policy is not to issue a certificate to a second operator to cover the same field and in competition with a first operator who is rendering sufficient. Refusing or neglecting to carry public mail upon request. (Erezo. alienate. new operators should be given the chance to give the services needed by the public. Jepte 102 Phil 103). No. Committing any act of unreasonable and unjust preferential treatment to any particular person.  Where the operator either fails or neglects to make the improvement or effect the increase in services. (Soriano v. adequate and satisfactory service. by collusion with others or otherwise. 6. then the applicant who applied ahead of the other. in which case. 7. a suspension not more than 30 days may be ordered. Providing or maintaining unsafe. Requiring public services to pay expenses of investigation. It is void and inexistent under Art. if inadequate or deficient. (Secs. the sale.  A rate is just and reasonable if it conforms to the following requirements: 1. REGISTERED OWNER RULE  The registered owner of a certificate of public convenience is liable to the public for the injuries or damages suffered by third persons caused by the operation of said vehicle. certificates or franchise. Suspension of CPC or CPCN. Establish and maintain individual or joint rates. and 2.  It subordinates the prior applicant rule which gives the first applicant priority only if things and circumstances are equal. vs. 8. 5. Establish and operate new units. Compelling compliance with the laws and regulations. except when it is necessary to avoid serious and irreparable damage or inconvenience to the public or private interest. mortgage or lease property. KABIT SYSTEM  A system whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate under such license. or modification of CPC or CPCN.  Purpose: To prevent ruinous and wasteful competition in order that the interests of the public would be conserved and preserved.  Effects: UNLAWFUL ACTS OF PUBLIC UTILITY COMPANIES 1.  Under Sec. Civil Code. RATE-FIXING POWER  The rate to be fixed must be just. Sell. Engagement in public service business without first securing the proper certificate. PRIOR APPLICANT RULE  Presupposes a situation when two interested persons apply for a certificate to operate a public utility in the same community over which no person has as yet granted any certificate. The prior operator must first be given an opportunity to improve its service. 20(g) of C. Uniform accounting system and furnishing of annual reports.4. or to one who possesses no property with which to respond financially for the damage or injury done. Issue free tickets.  The registered owner is not allowed to escape responsibility by proving that a third person is the actual and real owner Reason: It would be easy for him. et al. will be granted the certificate. Examination and test of measuring appliances. corporation or entity as determined by the proper authority. Medina. founded upon conditions which are fair and reasonable to both the owner and the public. Revocation. One which is fair to the public for the service rendered.A. The approval is necessary only to protect public interest. 2. even though the same had been transferred to a third person.

Alday. IAC) For the better protection of the public. lease or assignment of the privilege granted is valid between the contracting parties but not upon the public or third persons. CA 373 SCRA 394). (Teja Marketing vs. The registered owner is primarily liable for all the consequences flowing from the operations of the carrier.1. 154 SCRA 388) 2. 3. (Benedicto vs. The registered owner cannot recover from the actual owner and the latter cannot obtain transfer of the vehicle to himself. 5. as a practical matter. It would be very difficult and often impossible. sale. vs. for the public to enforce their rights of action that they may have for injuries inflicted by the vehicle if they should be required to prove who the actual owner is. both the registered owner and the actual owner are jointly and severally liable with the driver. (Gelisan vs. (Zamboanga Transportation Co. IAC. 4. both being in pari delicto. The transfer.  The public has the right to assume that the registered owner is the actual or lawful owner thereof. CA) . 187 SCRA 547) The thrust of the law in enjoining the kabit system is to identify the person upon whom responsibility may be fixed with the end in view of protecting the riding public (Lim vs.

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