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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
PRIVATE
CARRIE
R
1. As to availability
Holds himself Contracts
out for all with
people
particular
indiscriminat individuals or
ely
groups only
2. As to required diligence
Extraordinary Ordinary
diligence
is diligence is
required
required
3. As to regulation
Subject
to Not subject
State
to
State
regulation
regulation
4. Stipulation limiting
liability
Parties may Parties may
not agree on limit
the
limiting the carriers
carriers
liability,
liability
provided it is
except when not contrary
provided by to
law,
law
morals
or
good
customs
5. Exempting circumstance
Prove
caso fortuito,
extraordinary Art.
1174
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
PASSENGERS OR STRANGERS
FOR ACTS
OF OTHER
PASSENGE
RS OR
STRANGER
S
Required diligence and
defense
Extraordinary Ordinary
diligence
diligence
Nature of liability
Tort;
Not
however,
absolute;
The
limited
by
employee
Art. 1763
must be on
duty at the
time of the
act.
(Maranan v.
Perez)
FOR ACTS
OF ITS
EMPLOYEES
CARRIAGE OF GOODS
CARRIAGE OF
PASSENGERS
Parties
1. Common carrier
1. Common carrier
2. Shipper
2. Passenger
3. Consignee
Cause of liability
Delay in delivery, loss,
Death or injury to the
destruction, or deterioration
passengers
of the goods
Duration of liability
From the time the goods are
unconditionally placed in the
possession of, 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. (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. (Art. 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.
(Art. 1738)
Delivery of goods to the
custom authorities is not
delivery to the consignee. (Lu
Do v. Binamira, 101 Phil 120)
1. Exercise
of
extraordinary
diligence (Art. 1756)
2. Caso fortuito
Valid stipulations
1. Reduction of degree of
diligence
to
ordinary
diligence, provided it be:
a) In writing, signed by the
shipper or owner;
b) Supported by a valuable
consideration
other
than
the
service
rendered
by
the
carriers; and
c) Reasonable, just and
not contrary to public
policy. (Art. 1744)
2. Fixed amount of liability: A
contract fixing the sum to be
recovered by the owner or
shipper
for
the
loss,
destruction or deterioration
of the goods, if it is
reasonable and just under
the circumstances and has
been fairly and freely agreed
upon. (Art. 1750)
3. Limited liability for delay:
An agreement limiting the
common carriers liability for
delay on account of strikes or
riots (Art. 1748)
4. Stipulation limiting liability
to the value of the goods
appearing in the bill of lading,
unless the shipper or owner
declares a greater value. (Art.
1749)
3.
4.
5.
6.
7.
AS
TO
CARRIERS
VALID &
ENFORCEA
BLE
1.
One
limiting the
liability
of
the carrier
to
an
agreed
valuation,
unless the
shipper
declares a
higher value
and pays a
higher rate
of freight
(H.E.
Heacock
Company
vs.
Macondray
& Company
Inc.)
weather
or
other
circumstances
beyond the pilots control, the relation
between the carrier and the passenger
continues until the latter has been
landed at the port of destination and
has left the carriers premises. The
carrier should necessarily exercise
extraordinary diligence in safeguarding
the comfort, convenience and safety of
its stranded passengers until they
have reached their final destination.
(Philippine Airlines vs. CA, 226 SCRA
423)
2.
Even
where
overbooking
of
passengers is allowed as a commercial
practice, 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. (Zalamea
vs. CA, 228 SCRA 23)
3. An open-dated ticket constitutes a
complete contract between the carrier
and passenger.
Hence, the airline
company is liable if it refused to
confirm
a
passengers
flight
reservation. (Singson vs. CA, 282 SCRA
149)
4. 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. (Lufthansa
German Airlines vs. CA, 238 SCRA 290)
5. 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. A printed provision in the ticket
limiting liability only to its own conduct
is not enough to rebut that liability.
(KLM Royal Dutch Airlines vs. CA, 65
SCRA 237)
II. CODE OF COMMERCE
A. OVERLAND TRANSPORTATION
(Arts. 349-379)
Applicability
1. Domestic land and water/maritime
transportation.
(Pandect
of
Commercial Law and Jurisprudence,
Justice Jose Vitug, 1997 ed.)
2.
Domestic
Air
Transportation.
(Commercial
Law
Review,
Cesar
Villanueva, 2004 ed.)
IMPORTANT CONCEPTS:
1. Bill of lading
2. Obligations of the carrier
3. Right of abandonment
4. Notice of damage
5. 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.
Rules:
1. It is not indispensable for the
creation of a contract of carriage.
(Compania Maritima vs. Insurance
Company of North America, 12 SCRA
213)
2. Ambiguity is construed against the
carrier, the contract being one of
adhesion.
3. The consignee, although the
instrument is oftentimes drawn up only
by the consignor and carrier, becomes
bound by all the stipulations contained
therein by making a claim for loss on
the basis of said bill of lading. (SeaLand Services Inc. vs. IAC)
4. 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, springs from either a relation of
agency between him and the shipper,
or his status as stranger in whose favor
some stipulation is made in said
contract, and who becomes a party
thereto when he demands fulfillment of
that stipulation. (Art. 1311 (2),
(Mendoza vs. PAL Inc.)
extraordinary diligence
c. Natural disaster shall not free the
carrier from responsibility (Art.1740)
d. If delay is without just cause, the
contract limiting the common carriers
liability cannot be availed of in case of
loss or deterioration of the goods
(Art.1747)
RIGHT
OF
CONSIGNEE
TO
ABANDON GOODS
Instances:
1. Partial non-delivery, where the goods
are useless without the others (Art.
363);
2. Goods are rendered useless for sale or
consumption for the purposes for
which they are properly destined (Art.
365); and
3. In case of delay through the fault of
the carrier (Art. 371).
NOTICE OF DAMAGE (ART. 366)
Requisites for applicability:
1. Domestic/inter-island/coastwise
transportation
2. Land/water/air transportation
3. Carriage of goods
4. Goods shipped are damaged
Rules:
a. Patent damage: shipper must file a
claim against the carrier immediately
upon delivery (it may be oral or
written)
b. Latent damage: shipper should file a
claim against the carrier within 24
hours from delivery.
Note: These rules does not apply to
misdelivery of goods. (Roldan vs. Lim
Ponzo)
Purpose of notice: To inform the
carrier that the shipment has been
damaged, and it is charged with
liability therefore, and to give it an
opportunity to make an investigation
and fix responsibility while the matter
is fresh.
The filing of notice of claim is a
condition precedent for recovery.
Shorter period may be stipulated by
the parties because it merely affects
the shippers remedy and does not
date when
the
vessel
left port or
from
the
date
of
delivery to
the arrastre
(nondelivery or
loss).
COMBINED CARRIER AGREEMENT
(ART. 373)
GENERAL RULE: In case of a contract
of transportation of several legs, each
carrier is responsible for its particular
leg in the contract.
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.
B. MARITIME COMMERCE
(Arts. 573-869)
IMPORTANT CONCEPTS:
1. Merchant vessel
2. Maritime lien and Preference of
Credit
3. Doctrine of limited liability
4. Causes of revocation of voyage
5. Participants
in
maritime
commerce
6. Charter party
7. Loans
on
bottomry
and
respondentia
8. Accidents in maritime commerce
MARITIME/ADMIRALTY LAW
It is the system of laws which
particularly relates to the affairs and
business of the sea, to ships, their
crews and navigation, and to maritime
conveyance of persons and property.
(Notes and Cases on the Law on
Transportation and Public Utilities,
Aquino & Hernando, citing Francisco,
p.254)
Maritime laws apply
maritime trade and sea
only to
voyages.
;
2. Taxes due
the
Philippine
Government
;
3.
Salaries
and wages
of
the
Captain and
Crew of the
vessel
during
its
last voyage;
4.
General
average or
salvage
including
contract
salvage,
bottomry
loans,
and
indemnity
due
shippers for
the value of
goods
transported
but
which
were
not
delivered to
the
consignee;
5. Costs of
repair
and
equipment
of
the
vessel, and
provisioning
of
food,
supplies and
fuel during
its
last
voyage; and
6. Preferred
mortgages
registered
prior
in
time.
and
fees
allowed and
costs taxed
by the court
and
taxes
due to the
Government
;
2.
Crews
wages;
3. General
average;
4. Salvage,
including
contract
salvage;
5. Maritime
liens arising
prior in time
to
the
recording of
the
preferred
mortgage;
6. Damages
arising out
of tort; and
7. Preferred
mortgage
registered
prior
in
time.
shipowner to
the shippers
or insurer.
2. In case of
(2),
the
insurer must
pay
the
insured as if
there
was
actual total
loss of the
vessel.
the shipper
to
the
carrier.
Carrier
should pay
the shipper
the market
value of the
goods at the
point
of
destination.
CAUSES
OF
REVOCATION
OF
VOYAGE
1. War or interdiction of commerce;
2. Blockade;
3. Prohibition to receive cargo at
destination;
4. Embargo;
5. Inability of the vessel to navigate.
(Art. 640)
Terms:
1. Interdiction of commerce A
governmental
prohibition
of
commercial intercourse intended to
bring about an entire cessation for
the time being of all trade whatever.
2. Blockade A sort of circumvallation
of a place by which all foreign
connection and correspondence is,
as far as human power can effect it,
to be cut off.
3. Embargo A proclamation or order
of a state, usually issued in time of
war
or
threatened
hostilities,
prohibiting the departure of ships or
goods from some or all the ports of
such state until further order.
PARTICIPANTS
IN
MARITIME
COMMERCE
A. Shipowners and ship agents
B. Captains and masters of the vessel
C. Officers and crew of the vessel
D. Supercargoes
E. Pilot
A. SHIPOWNERS AND SHIP AGENTS
Shipowner (proprietario)
Person who has possession, control
2.
3.
4.
5.
Persons
who
discharges
administrative duties assigned to him
by ship agent or shippers, keeping an
account and record of transaction as
required in the accounting book of the
captain. (Art. 649)
E. PILOT
A person duly qualified, and
licensed, to conduct a vessel into or
out of ports, or in certain waters.
The term generally connotes a
person taken on board at a particular
place for the purpose of conducting a
ship through a river, road or channel,
or from a port.
Master pro hac vice for the time
being in the command and navigation
of the ship.
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, the master does
not surrender his vessel to the pilot
and the pilot is not the master. There
are occasions when the master may
and should interfere and even displace
the pilot, as when the pilot is obviously
incompetent
or
intoxicated
(Far
Eastern Shipping Company vs. CA).
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. (Notes and Cases on the Law on
Transportation and Public Utilities,
Aquino, T. & Hernando, R.P. 2004 ed. p.
518)
Liablity of Pilot
GENERAL RULE: On compulsory
pilotage grounds, the Harbor Pilot is
responsible for damage to a vessel or
to life or property due to his
negligence.
EXCEPT:
1. Accident caused by force majeure or
natural calamity provided the pilot
exercised prudence and extra diligence
to prevent or minimize damages.
2. Countermand or overrule by the
master of the vessel in which case the
registered owner of the vessel is liable.
(Sec.11, Art.III PPA Admin Order 03-85)
SPECIAL CONTRACTS OF MARITIME
COMMERCE
1. Charter party
2. Bill of lading
3. Contract of transportation of
passengers on sea voyages
4. Loan on bottomry
5. Loan on respondentia
6. 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.
A contract by which an entire ship,
or some principal part thereof is
let/leased by the owner to another
person for a specified time or use.
(Planters Products, Inc. vs. CA, 226
SCRA 476)
Parties:
1. Ship owner or ship agent
2. Charterer
Classes:
1. Bareboat or demise The charterer
provides crew, food and fuel. The
charterer is liable as if he were the
owner, except when the cause arises
from the unworthiness of the vessel.
The shipowner leases to the charterer
the whole vessel, transferring to the
latter the entire command, possession
and consequent control over the
vessels navigation, including the
master and the crew, who thereby
become the charters servants. It
transforms a common carrier into a
private carrier.
The charterer becomes the owner
of the vessel pro hac vice, just for
that one particular purpose only.
CHARTER
PARTY
Charterer
may rescind
charter party
by
paying
half of the
freightage
agreed upon.
The
new
owner is not
compelled to
respect the
charter party
so long as he
can load the
vessel with
his
own
cargo. (Art.
689)
Commercial
law concept
CHARTER
BILL OF
PARTY
LADING
An entire or More like a
complete
private
contract.
receipt
which
the
captain gives
to
accredit
goods
received
from persons
Consensual
Real contract
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,
command
and
navigation to
charterer
Common
carrier
is
converted to
private
carrier.
CONTRACT
OF
AFFREIGHT
MENT
(TIME OR
VOYAGE
CHARTER)
Owner
remains
liable
as
carrier
and
must answer
for
any
breach
of
duty
Charterer is
not regarded
as owner.
The
vessel
owner
retains
possession,
command
and
navigation of
the ship
Common
carrier is not
converted to
a
private
carrier.
Clause
paramount
or
paramount
clause
A stipulation
in a charter
party that in
case of a
maritime
accident for
which
the
shipowner is
not
responsible
by
law,
contract
or
otherwise,
the
cargo
shippers,
consignees
or
owners
shall
contribute
with
the
shipowner in
general
average.
(Pandect of
Commercial
Law
and
Jurisprudenc
e,
Justice
Jose
Vitug,
1997 ed.)
A clause in a
charter party
providing
that
the
COGSA shall
apply, even
though
the
transportatio
n
is
domestic,
subject
to
the
extent
that
any
term of the
bill of lading
is repugnant
to
the
COGSA
or
applicable
law, then to
the
extent
thereof the
provision of
the bill of
lading
is
void.
(Pandect of
Commercial
Law
and
Jurisprudenc
e,
Justice
Jose
Vitug,
1997 ed.)
4. To substitute
another
vessel if load
is less than4.
3/5
of
capacity;
5. To leave the
port if the5.
charterer
does
not
bring
the
cargo within
the lay days
and extra lay
days
allowed;
6. To place in a
vessel in a
condition to
navigate;
7. to
bring
cargo
to
nearest
neutral port
in case of
war
or
blockade.
(Arts.
669678)
uncontracte
d cargo and
illicit cargo;
To wait if the
vessel
needs
repair;
To
pay
expenses for
deviation.
(Arts. 679687)
1. If the
extra
lay days
termina
te
without
the
cargo
being
placed
alongsi
de the
1. War
or
interdict
ion of
commer
ce;
2.
Blockad
e;
3.
Prohibiti
on to
tonnage
or flag;
3.
Failure
to place
the
vessel
at
the
charter
ers
disposal
;
4.
Return
of
the
vessel
due to
pirates,
enemie
s or bad
weather
;
5.
Arrival
at
a
port for
repairs.
vessel;
2. Sale
by the
owner
of
the
vessel
before
loading
by the
charter
er;
receive
cargo;
4.
Embarg
o; and
5.
Inability
of the
vessel
to
navigat
e.
Terms:
1. Primage - bonus to be paid to the
captain after the successful voyage.
2. 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. Deadfreight the amount paid by or
recoverable from a charterer of a
ship for the portion of the ships
capacity the latter contracted for
but failed to occupy.
4. Lay Days - days allowed to charter
parties for loading and unloading
the cargo.
5. Extra Lay Days days which follow
after the lay days have elapsed.
USUAL FORMS OF CONSUMMATING
CONTRACTS
1. C.I.F. cost, insurance and freight;
LOAN ON
RESPONDE
NTIA
Definition
Loan made Loan taken
by
on security
shipowner
of the cargo
or
ship laden on a
agent
vessel, and
guaranteed repayable
by
vessel upon
safe
itself
and arrival
of
repayable
cargo
at
upon arrival destination.
of vessel at (Art. 719)
destination.
(Art. 719)
Who may contract
Shipowner
Only
the
or
ship owner of the
agent.
cargo.
Outside
of
the
residence of
the owners the captain.
Common elements:
1. Exposure of security to
marine peril;
2. Obligation of the debtor
conditioned only upon
safe arrival of the
security at the point of
destination.
Forms:
1. Public instrument
2. Policy signed by the
contracting parties and
the broker taking part
therein
3. Private
instrument
(Art. 720)
Contents:
1. Kind, name and registry
of the vessel;
2. Name, surname and
domicile of the captain;
3. Names, surnames and
domiciles
of
the
borrower
and
the
lender;
4. Amount of the loan and
the premium stipulated;
5. Time for repayment;
6. Goods
pledged
to
secure repayment;
7. Voyage during which
the risk is run (Art.721)
BOTTOMRY
/
ORDINARY
LOAN
RESPONDE
NTIA
(MUTUUM)
Not subject
to
any
contingency
(absolute
liability)
The
last
lender is a
preferred
creditor
The
first
lender is a
preferred
creditor
Consensual
contract
In case of loss
of the vessel
due to a risk
insured
against,
the
obligation
of
the
insurer
becomes
absolute
LOAN ON
BOTTOM
RY OR
RESPOND
ENTIA
Indemnity
is Indemnity
paid after the is paid in
loss
has advance
occurred
by way of
a loan
In case of
loss of the
vessel due
to
a
marine
peril, the
obligation
of
the
borrower
to pay is
extinguish
ed
Real
contract
MARITIME
AVERAGE
An extraordinary or accidental
expense incurred during the voyage in
order to preserve the cargo, vessel or
both, and all damages or deterioration
suffered by the vessel from departure
to the port of destination, and to the
cargo from the port of loading to the
port of consignment. (Art. 806)
The person whose property has
been saved must contribute to
reimburse the damage caused or
expense incurred if the situation
constitutes general average.
Classes:
1. Particular or Simple Average
2. Gross or General Average
Where both vessel and cargo are
saved, it is general average; where
only the vessel or only the cargo is
saved, it is particular average.
Expenses incurred to refloat a
vessel, which accidentally ran aground,
in order to continue its voyage, do not
constitute general average. Not only is
there absence of a marine peril,
common
safety
factor,
and
deliberateness. It is the safety of the
property, and not the voyage, which
constitutes the true foundation of
general average. (A. Magsaysay, Inc.
vs. Agan, G.R.No. L-6393, Jan. 31,
1955)
PARTICULA
GROSS OR
R OR
GENERAL
SIMPLE
Definition
Damages or Damages or
expenses
expenses
caused
to deliberately
the vessel or caused
in
cargo
that order
to
did not inure save
the
to
the vessel,
its
common
cargo
or
benefit, and both
from
borne
by real
and
respective
known risk.
owners. (Art. (Art. 811)
809)
Requisites
1. common
danger;
2. deliberat
e
sacrifice;
3. success;
4. proper
formalitie
s and
legal
steps.
Liability
The owner of All
the
the
goods persons
which gave having
an
rise to the interest
in
expense
or the
vessel
suffered the and
the
damage shall cargo
bear
this therein
at
average.
the time of
(Art. 810)
the
occurrence
of
the
average
shall
contribute
to
satisfy
this
average.
(Art. 812)
The
insurers
(Art.859)
and lenders
on bottomry
and
respondenti
a
shall
likewise
contribute.
(Art.732).
Number of interests
involved
Only
one Several
interest
interests
involved
involved
Share in the damage or
expense
100% share
In
proportion
to the value
of
the
owners
property
saved
Right to recover
No
There may
reimburseme be
nt
reimbursem
ent
Kinds (not exclusive)
Art. 809
Art. 811
Procedure for recovery
1. Assembly
and
deliberation
2. Resolution
of
the
captain
3. Entry of the
resolution in
the logbook
4. Detailed
minutes
5. Delivery of
the minutes
to
the
maritime
judicial
authority of
the
first
port, within
24
hours
from arrival,
6. Ratification
by captain
under oath.
(Arts. 813814)
GOODS NOT COVERED BY GENERAL
AVERAGE EVEN IF SACRIFICED
1. Goods carried on deck. (ART.855)
2. Goods not recorded in the books
or
records
of
the
vessel.
(ART.855 (2))
3. Fuel for the vessel if there is
more than sufficient fuel for the
voyage. (Rule IX, York-Antwerp
Rule)
Jettison
Act of throwing cargo overboard in
order to lighten the vessel.
Order of goods to be cast overboard:
1. Those which are on the deck,
preferring the heaviest one with
the least utility and value;
2. Those which are below the upper
deck, beginning with the one with
greatest weight and smallest
value. (Art. 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.
(Pandect of Commercial Law and
Jurisprudence, Justice Jose Vitug, 1997
ed.)
In order that the jettisoned goods
may be included in the gross or
general average, the existence of the
cargo on board should be proven by
means of the bill of lading. (Art. 816)
York-Antwerp
(Y-A)
Rules
on
Determining Liability for Averages
With Regard To Deck Cargo
1. Deck cargo is allowed only in
domestic/coastwise/inter-island
shipping,
and
is
prohibited
in
international/overseas/foreign
shipping.
2. If deck cargo is loaded with the
consent of the shipper on overseas
INTERNATI
ONAL
Deck cargo is Deck cargo
allowed
is
not
allowed
With shippers consent
General
Particular
average
average
Without shippers consent
Captain is
Captain is
liable
liable
ARRIVAL
UNDER
STRESS
(ARRIBADA)
The arrival of a vessel at the nearest
and most convenient port instead of
the port of destination, if during the
voyage the vessel cannot continue the
trip to the port of destination.
When
lawful
When
unlawf
ul
Who
bears
expens
es:
The
1.
inability
to
continu
e
voyage
is due
to lack
of
Lack of
provisio
ns due
to
negligen
ce
to
carry
accordin
g
to
The
shipow
ner or
ship
agent is
liable in
case of
unlawfu
l arrival
provisio
ns,
wellfounde
d fear2.
of
seizure,
private
ers,
pirates,
or
acciden3.
ts
of
the sea
disablin
g it to
navigat
e. (Art.
819) 4.
usage
and
customs
;
Risk of
enemy
not well
known
or
manifes
t
Defect
of
vessel
due to
imprope
r repair;
and
Malice,
negligen
ce, lack
of
foresigh
t or skill
of
captain.
(Art.
820)
under
stress.
But
they
shall
not be
liable
for the
damag
es
caused
by
reason
of
a
lawful
arrival.
(Art.
821)
3. Prescriptive period
AMOUNT OF CARRIERS LIABILITY
Under the Sec. 4(5), 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.
This is
deemed incorporated in the bill of
lading even if not mentioned in it.
(Eastern Shipping vs. IAC, 150 SCRA
463)
Note that Art. 1749, NCC applies to
domestic/inter-island/coastwise trade.
NOTICE OF DAMAGE (SEC. 3(6))
Rules:
a. Patent damage: shipper should file a
claim with the carrier immediately
upon delivery
b. Latent damage: shipper should file a
claim with the carrier within three
days from delivery.
Note: The filing of a notice of claim is
not a condition precedent.
PRESCRIPTIVE PERIOD
Action for loss or damage to the
cargo should be brought within one
year after:
a. Delivery of the goods (delivered
but damaged goods); or
b. The date when the goods should
have
been
delivered
(nondelivery). (Sec. 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, gone out of commerce,
or disappeared in such a way that their
existence is unknown or they cannot
be recovered. Thus, it is inapplicable in
case of misdelivery or conversion. (Ang
vs. American Steamship Agencies Inc.)
and damage arising from delay or late
delivery (Mitsui O.S.K. Lines Ltd. vs.
CA). In such instance the, Civil Code
rules on prescription shall apply.
BAGGA
GE
AIR
WAYBI
TICKET CHECK
Passeng Checke
er
d-in
baggag
e
LL
Goods
to be
shipped
LIABILITY
OF
CARRIER
FOR
DAMAGES
1. 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; (Art. 17)
2. Destruction, loss or damage to any
baggage or goods, if it took place
during the transportation by air; (Art.
18) and
Transportation by air The period
during which the baggage or goods are
in the charge of the carrier, whether in
an airport or on board an aircraft, or, in
case of a landing outside an airport, in
any place whatsoever.
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, for
the purpose of loading, delivery, or
transshipment.
3. Delay in the transportation of
passengers, baggage or goods. (Art.
19)
Note: The Hague Protocol amended
the WC by removing the provision that
if the airline took all necessary steps to
avoid the damage, it could exculpate
itself completely (Art. 20(1)). (Alitalia
vs. IAC, 192 SCRA 9)
LIMIT OF LIABILITY (Art. 22, as
amended by Guatemala Protocol,
1971; Alitalia vs. IAC)
1. Passengers
GENERAL
RULE:
$100,000
per
passenger
EXCEPTION: Agreement to a higher
limit
2. Checked-in baggage
2. Prescriptive period
Action must be filed within 2 years
from:
a. date of arrival at the destination
b. date of expected arrival
c. date on which the transportation
stopped. (Art. 29)
RULE
IN
CASE
OF
VARIOUS
SUCCESSIVE CARRIERS
1. Carriage of passengers
GENERAL RULE: Action is filed only
against the carrier in which the
accident or delay occurred.
EXCEPTION: Agreement or contract
whereby the first carrier assumed
liability for the whole journey.
2. Carriage of baggage or goods
a. Passenger or consignor can file
an action against the first carrier
and the carrier in which the
damage occurred
b. Passenger or consignee can file
an action against the last carrier
and the carrier in which the
damage occurred.
These carriers are jointly and
severally liable. (Art. 30)
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
accident
an accident
Fees
distributed
among
crewmen
Fees belong
to
the
tugboat
owner
CERTIFICA
TE
OF
PUBLIC
CONVENIE
NCE
AND
NECESSITY
(CPCN)
An
authorizatio
n issued by
the
appropriate
government
agency for
the
operation of
public
service for
which
a
prior
franchise is
required by
law;
e.g.
telephone
and
other
services.
1.
Issuance1.
of CPC or
CPCN;
2.
Fixing of
rates, tolls,
and
charges; 2.
3.
Setting
up
of
standards
and
classificatio
ns;
3.
4.
Establish
POWERS
EXERCISAB
LE
WITHOUT
PRIOR
NOTICE
AND
HEARING
Investigat
ion
any
matter
concerning
public
service;
Requiring
operators to
furnish safe,
adequate,
and proper
service;
Requiring
public
ment
of
rules
to
secure
accuracy of
all meters
and
all4.
measuring
appliances;
5.
Issuance
of
orders5.
requiring
establishm
ent
or
maintenanc
e
of
6.
extension
of facilities;
6.
Revocati
on,
or
modificatio
n of CPC or
CPCN;
7.
Suspension
of CPC or
7.
CPCN,
except
when it is
necessary
to
avoid
serious and8.
irreparable
damage or
inconvenie
nce to the
public
or
private
interest, in
which case,
a
suspension
not
more
than
30
days may
be ordered,
prior to the
hearing.
(Soriano v.
Medina,
164 SCRA
36)
services to
pay
expenses of
investigatio
n;
Valuation
of properties
of
public
utilities;
Examinat
ion and test
of
measuring
appliances;
Grant of
special
permits
to
make extra
or
special
trips
in
territories
specified in
the
certificate;
Uniform
accounting
system and
furnishing of
annual
reports;
Compellin
g
compliance
with
the
laws
and
regulations.
UNLAWFUL
ACTS
OF
PUBLIC
UTILITY COMPANIES
1. Engagement
in
public
service
business without first securing the
proper certificate;
2. Providing or maintaining unsafe,
improper or inadequate service as
determined by the proper authority;
3. Committing any act of unreasonable
and unjust preferential treatment to
any particular person, corporation or
entity as determined by the proper
authority;
4. Refusing or neglecting to carry
public mail upon request. (Secs. 18
and 19)
ACTS REQUIRING PRIOR APPROVAL
1. Establish and maintain individual or
joint rates;
2. Establish and operate new units;
3. Issue free tickets;
4. Issue any stock or stock certificates
representing an increase of capital;
5. Capitalize any franchise in excess of
the amount actually paid to the
Government;
6. Sell, alienate, mortgage or lease
property, certificates or franchise.
Under Sec. 20(g) of C.A. No. 146,
the sale, etc. may be negotiated and
completed before the approval by the
proper authority. Its approval is not a
condition precedent to the validity of
the contract. The approval is necessary
only to protect public interest.
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.
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, adequate and
satisfactory service. The prior operator
must first be given an opportunity to