Professional Documents
Culture Documents
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 Contracts
with
all
people particular individuals
indiscriminately
or groups only
2. As to required diligence
Extraordinary
Ordinary diligence is
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 Parties may limit the
on
limiting
the carriers
liability,
carriers
liability provided it is not
except when provided contrary
to
law,
by law
morals
or
good
customs
5. Exempting circumstance
Prove
extraordinary caso
fortuito,
Art.
diligence and Art. 1174 NCC
1733, NCC
6.Presumption of negligence
There
is
a No presumption of
presumption of fault fault or negligence
or negligence
7.Governing law
Law on common
Law on obligations
carriers
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, 573-734, 580,
806-845) - suppletory
B. International/foreign/overseas (Foreign country
to Philippines)
Applicable to Water/maritime and Air 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;
55
f.
g.
FOR ACTS OF
OTHER
PASSENGERS OR
STRANGERS
Parties
1.
2.
3.
Common carrier
Shipper
Consignee
1.
2.
Common carrier
Passenger
Cause of liability
Death or injury to the passengers
Duration of liability
56
Presumption of negligence
Art.1735 Civil Code
Art.1755 Civil Code
Reason: As to when and how goods were Reason: The contract between the passenger
damaged in transit is a matter peculiarly within and the carrier imposes on the latter the duty
the knowledge of the carrier and its employees. to transport the passenger safely; hence the
(Mirasol v. Dollar, 53 PHIL 124)
burden of explaining should fall on the carrier.
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. (Coastwise Lighterage Corp. v. CA, 245
SCRA 796)
Defenses
1.
2.
diligence
Void stipulations
1. That the goods are transported at the risk
of the owner or shipper;
2. That carrier will not be liable for any loss,
destruction or deterioration of the goods;
3. That the carrier need not observe any
diligence in the custody of the goods;
4. That the carrier shall exercise a degree of
diligence less than that of a good father of a
family over the movable transported;
5. That the carrier shall not be responsible for
the acts or omissions of his or its employees;
6. That the carriers liability for acts
committed by thieves or robbers who do not
act with grave or irresistible threat, violence or
force is dispensed with or diminished;
7. That the carrier is not responsible for the
loss, destruction or deterioration of the goods
on account of the defective condition of the
car, vehicle, ship or other equipment used in
the contract of carriage. (Art. 1745)
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.)
5. 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,
in the absence of fraud or mistake; he is estopped from
thereafter denying that he assented to such terms. (Notes
and Cases on the Law on Transportation and Public
Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.261)
Kinds:
1. On board - 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.
2. Received - one 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.
3. Negotiable - one 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.
4. Non-negotiable - One in which it is stated that the
goods referred to therein will be delivered to a
specified person.
5. Clean One which does not indicate any defect in
the goods.
6. Foul One which contains a notation thereon
No stipulation
1.
Within
a
reasonable time.
2. Carrier is bound to
forward them in the
1st shipment of the
same
or
similar
goods which he may
make to the point of
delivery. (ART. 358
Code of Commerce)
Effects of delay
a. Merely suspends and generally does not terminate the
contract of carriage
b. Carrier remains duty bound to exercise 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 affect the liability of the carrier. (PHILAMGEN vs.
Sweetlines, Inc.)
Prescriptive Period
Not provided by Article 366. Thus, in such absence, Civil
Code rules on prescription apply.
If despite the notice of claim, the carrier refuses to pay,
action must be filed in court.
1. No bill of lading was issued: within 6
years
2. Bill of lading was issued: within 10
years.
ARTICLE 366
COGSA Sec.3 (6)
Applicability
1.
Domestic/inter- 1. International/
island/coastwise
overseas/foreign
transportation
(from
foreign
2. Land, water, air country to Phils.)
transportation
Note: subject to the
3. Carriage of goods
rule on Paramount
Clause
2. Water/maritime
transportation
3. Carriage of goods
Notice of damage
1. Condition
1. Not a condition
precedent
precedent
2. 24-hour period for
2. 3-day period for
claiming latent
claiming latent
damage
damage
Prescriptive period
None provided; Civil One year from the
Code applies.
date
of
delivery
(delivered
but
damaged goods), or
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.
2.
(Arts. 573-869)
MARITIME
COMMERCE
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 only to maritime trade and sea
voyages. (Pandect of Commercial Law and Jurisprudence,
Justice Jose Vitug, 1997 ed.)
Arrastre service is not maritime in character. It refers to
a contract for the unloading of goods from a vessel. (ICTSI
vs. Prudential Guarantee, 320 SCRA 244)
CHARACTERISTICS OF MARITIME TRANSACTION
1. Real - similar to transactions over real property with
respect to effectivity against third persons which is done
through registration. (Rubiso vs. Rivera, 37 Phil. 72). 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; and 2) the right to retain the cargo and
embargo and detention of the vessel (Luzon Stevedoring
Corp v. CA, 156 SCRA 169);
2. Hypothecary - the liability of the owner of the value of
the vessel is limited to the vessel itself (Doctrine of
Limited Liability).
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, which stands as the guaranty for their settlement.
(Aboitiz Shipping Corp. vs. General Accident Fire and Life
Assurance Corp. 217 SCRA 359).
MERCHANT VESSEL
Vessel engaged in maritime commerce, whether foreign
or otherwise. (Bar Review Materials in Commercial Law,
Jorge Miravite, 2002 ed.)
Constitutes property which may be acquired and
transferred by any of the means recognized by law. They
shall continue to be considered as personal property. (Arts.
573, 585)
They are susceptible to maritime liens such as for the
repair, equipping and provisioning of the vessel in the
preparation of a voyage, as well as mortgage liabilities, in
satisfaction of which a vessel may be validly arrested and
sold. (Ship Mortgage Decree of 1978)
MARITIME LIEN
It constitutes a present right of property in the ship, a jus
in re, to be afterward enforced in admiralty by process in
rem. (PNB vs. CA, 337 SCRA 381)
If the maritime lien arose prior to the recording of a
preferred mortgage, it shall have priority over the said
mortgage lien. (PNB vs. CA, 337 SCRA 381)
ORDER OF PREFERENCE IN CASE OF SALE OF VESSEL
R.A. 6106
P.D. 1521
Effectivity date
1969
1978
Applicability
Overseas shipping
Both domestic and
only
overseas shipping
Kind of sale
Judicial
Judicial and
extrajudicial
Order of Preference
A
preferred The
preferred
mortgage shall have mortgage lien shall
priority
over
all
claims against the
vessel, except the
following
preferences in the
order stated:
1. Judicial costs of
the proceedings;
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.
RIGHT OF ABANDONMENT
SHIPOWNER OR
CONSIGNEE
SHIP AGENT
What may be abandoned
Vessel
Goods shipped
Instances
1. In case of civil 1.
Partial
nonliability
from delivery, where the
indemnities to third goods are useless
persons (Art. 587);
without the others
2.
Sec.
138, (Art. 363);
Insurance Code;
2.
Goods
are
3. In case of leakage rendered useless for
of at least of the sale or consumption
contents of a cargo for the purposes for
containing
liquids which
they
are
(Art. 687)
properly
destined
(Art. 365); and
3. In case of delay
through the fault of
the
carrier
(Art.
371).
Effects
1.
Transfer
of 1. Transfer
of
ownership
of
the ownership on the
vessel
from
the goods
from
the
shipowner
to
the shipper
to
the
shippers or insurer.
carrier.
2. In case of (2), the 2. Carrier
should
insurer must pay the pay the shipper the
insured as if there market value of the
was actual total loss goods at the point of
of the vessel.
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 and management of
the vessel and the consequent right to direct her
navigation and receive freight earned and paid, while his
possession continues.
Ship agent (naviero)
Person entrusted with provisioning and representing the
vessel in the port in which it may be found; also includes
the shipowner.
Not a mere agent under civil law; he is solidarily liable
with the ship owner.
Powers and functions:
1. Capacity to trade;
2. Discharge duties of the captain, subject to Art.609;
3. Contract in the name of the owners with respect to
repairs, details of equipment, armament, provisions of
food and fuel, and freight of the vessel, and all that
relate to the requirements of navigation;
4. Order a new voyage, make a new charter or insure
the vessel after obtaining authorization from the
shipowner or if granted in certificate of appointment.
Civil Liabilities of the Shipowner And Ship Agent
1.
2.
4.
5.
6.
Loan on bottomry
Loan on respondentia
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.
Because the charterer is treated as owner pro hac
vice, 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.
2. Contract of Affreightment A contract whereby the
owner of the vessel leases part or all of its space to haul
goods for others.
The shipowner retains the possession, command
and navigation of the ship, the charterer merely
having use of the space in the vessel in return for his
payment of the charter hired.
Kinds:
a. Time charter vessel is chartered for a fixed
period of time or duration of voyage.
b. Voyage or trip charter the vessel is leased for
one or series of voyages usually for purposes of
transporting goods for charterer.
LEASE
If for
a
definite
period, lessee cannot
give up the lease by
paying a portion of
the amount agreed
upon.
If the leased property
is sold to one who
knows
of
the
existence
of
the
lease, the new owner
must
respect
the
lease.
Civil law concept
CHARTER PARTY
Charterer
may
rescind charter party
by paying half of the
freightage
agreed
upon.
CHARTER PARTY
An entire or complete
contract.
BILL OF LADING
More like a private
receipt which the
captain
gives
to
accredit
goods
received
from
persons
Real contract
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,
command
and
navigation
to
charterer
Common carrier is
converted to private
carrier.
Common carrier is
not converted to a
private carrier.
law
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.
Clause paramount
or paramount
clause
A clause in a charter
party providing that
the
COGSA
shall
apply, even though
the transportation 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
Jurisprudence, Justice
Jose Vitug, 1997 ed.)
CHARTERER
1. To
pay
the
agreed charter price;
2. To
pay
freightage
on
unboarded cargo;
3. To pay losses to
others for loading
uncontracted cargo
and illicit cargo;
4. To wait if the
vessel needs repair;
5. To pay expenses
for deviation. (Arts.
679-687)
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)
LOAN ON
BOTTOMRY
1. If the extra
lay
days
terminate
without the
cargo being
placed
alongside the
vessel;
2. Sale by
the owner of
the
vessel
before
loading
by
the
charterer;
Fortuitous
causes
(Art. 690)
1. War or
interdiction
of commerce;
2. Blockade;
3. Prohibition
to receive
cargo;
4. Embargo;
and
5. Inability of
the vessel to
navigate.
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;
2. F.O.B. - free on board;
3. F.A.S. - free alongside ship; and
4. C. & F. - cost and freight.
TRANSSHIPMENT OF GOODS
The act of taking cargo out of one ship and loading it in
another, 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, or the transfer for further
transportation from one ship or conveyance to another.
It is not dependent on the ownership of the transporting
ships or in the change of carriers, but rather on the fact of
actual physical transfer of cargo from one vessel to
another.
If done without legal excuse, however competent and
safe the vessel into which the transfer is made, 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. (Magellan Manufacturing vs.
CA, 201 SCRA 102)
LOAN ON BOTTOMRY AND RESPONDENTIA
A real, unilateral, aleatory contract, by virtue of which
one person lends to another a certain amount of money or
goods on things exposed to maritime risks, which amount,
with its earnings, is to be returned if the things are safely
transported, and which is lost if the latter are lost.
LOAN ON
RESPONDENTIA
Definition
Loan
made
by Loan
taken
on
shipowner or ship security of the cargo
agent
guaranteed laden on a vessel,
by vessel itself and and repayable upon
repayable
upon safe arrival of cargo
arrival of vessel at at destination. (Art.
destination.
(Art. 719)
719)
Who may contract
Shipowner or ship Only the owner of
agent.
Outside of the cargo.
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/
RESPONDENTIA
ORDINARY LOAN
(MUTUUM)
Subject
Law
to
Usury
Liability
of
the
borrower
is
contingent on the
safe arrival of the
vessel or cargo at
destination
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,
the obligation of
the borrower to
pay
is
extinguished
Consensual contract
Real contract
PARTICULAR OR
GROSS OR
SIMPLE
GENERAL
Definition
Damages or expenses Damages
or
caused to the vessel expenses
or cargo that did not deliberately caused
inure to the common in order to save the
benefit, and borne by vessel, its cargo or
respective
owners. both from real and
(Art. 809)
known risk.
(Art.
811)
Requisites
1. common
danger;
2. deliberate
sacrifice;
3. success;
4. proper
formalities and
legal steps.
Liability
The owner of the All
the
persons
having an interest in
the vessel and the
cargo therein at the
time
of
the
occurrence of the
average
shall
contribute to satisfy
this average. (Art.
812)
The
insurers
(Art.859)
and
lenders on bottomry
and
respondentia
shall
likewise
contribute.
(Art.732).
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 owners
property saved
Right to recover
No reimbursement
There
may
be
reimbursement
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. 813-814)
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 trade, it must always contribute to general
average, but should the same be jettisoned, it would not
be entitled to reimbursement because there is violation of
the Y-A Rules.
3. If deck cargo is loaded with the consent of the shipper
on coastwise shipping, it must always contribute to
4.
5.
6.
DOMESTIC
Deck cargo is allowed
When
unlawful
Who bears
expenses:
The inability
to continue
voyage
is
due to lack
of provisions,
well-founded
fear
of
seizure,
privateers,
pirates,
or
accidents of
the
sea
disabling
it
to navigate.
(Art. 819)
1. Lack
of
provisions
due
to
negligence to
carry
according to
usage
and
customs;
2. Risk
of
enemy
not
well known or
manifest
3. Defect of
vessel due to
improper
repair; and
4. Malice,
negligence,
lack
of
foresight
or
skill
of
captain. (Art.
820)
The
shipowner or
ship agent is
liable in case
of
unlawful
arrival under
stress.
But
they shall not
be liable for
the damages
caused
by
reason of a
lawful arrival.
(Art. 821)
7.
8.
9.
BAGGAGE
CHECK
Checked-in
baggage
AIR
WAYBILL
Goods to be
shipped
2. Checked-in baggage
GENERAL RULE: $20 per kilogram
EXCEPTION: In case of special declaration of value and
payment of a supplementary sum by consignor, carrier is
liable to not more than the declared sum unless it proves
the sum is greater than actual value.
3. Hand-carried baggage
$1000/passenger
4. 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, carrier is
liable to not more than the declared sum unless it proves
the sum is greater than actual value.
by
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)
In United Airlines vs. Uy the two-year prescriptive period
was not applied where the airline employed delaying
tactics.
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)
A contract of international carriage by air, although
performed by different carriers under a series of airline
tickets constitutes a single operation. Members of the
International Air Transportation Association (IATA) are
Under a general pool partnership agreement, the ticketissuing airline is the principal in a contract of carriage
while the endorsee-airline is the agent. 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. (China Airlines vs.
Chiok)
JURISDICTION
At the option of the plaintiff, the action for damages may
be filed in the:
a. Court of domicile of the carrier;
b. Court of its principal place of business;
c. Court where it has a place of business through
which the contract has been made; or
d. Court of the place of destination. (Art. 28(1))
NOTE: It is the passengers ultimate destination not an
agreed stopping place that determines the country where
suit is to be filed.
The forum of action provided in Art. 28(1) is a matter of
jurisdiction rather than of venue. (Santos III vs. Northwest;
2A C.J.S.)
V. SALVAGE LAW (Act No. 2616)
SALVAGE
Two concepts:
1. Services one person renders to the owner of a ship or
goods, by his own labor, preserving the goods or the ship
which the owner or those entrusted with the care of them
have either abandoned in distress at sea, or are unable to
protect or secure.
2. 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, or such
property recovered from actual peril or loss, as in cases of
shipwreck, derelict or recapture.
Requisites:
1. Valid object of salvage;
2. Object must have been exposed to marine peril
(not perils of the ship);
3. Services rendered voluntarily (neither an existing
duty nor out of a pre-existing contract);
4. Services are successful, total or partial.
Subjects of Salvage:
1. Ship itself;
2. Jetsam goods which are cast into the sea, and there
sink and remain under water;
3. Floatsam or Flotsam goods which float upon the sea
when cast overboard;
4. Ligan or Lagan goods cast into the sea tied to a buoy,
so that they may be found again by the owners (p.173,
Judge Diaz).
Persons who have no right to a reward for salvage:
1. Crew of the vessel saved;
2. Person who commenced Salvage in spite of opposition
of the Captain or his representative;
3.
In accordance with Sec. 3 of the Salvage Law, a
person who fails to deliver a salvaged vessel or cargo to
the Collector of Customs.
Derelict a ship or her cargo which is abandoned and
deserted at sea by those who are in charge of it, without
any hope of recovering it, or without any intention of
returning to it.
The intention of those in charge must be ascertained. If
those in charge left with the intention of returning, or of
procuring assistance, the property is not derelict, but if
they quitted the property with the intention of finally
leaving it, it is derelict and a change of their intention and
an attempt to return will not change its nature (Erlanger &
Galinger vs. Swedish East Asiatic Co. Ltd.).
If it is clear that the intention to return is slight, the
salvage which was done thereafter is considered valid.
(Notes and Cases on the Law on Transportation and Public
Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p. 616)
CONTRACT OF TOWAGE
SALVAGE
TOWAGE
Governed by special
law (Act No. 2616)
Governed by Civil
Code on contract of
lease
Requires success,
otherwise no
payment
Success
required
Vessel must be
involved in an
accident
Fees distributed
among crewmen
is
not
CERTIFICATE
OF
PUBLIC
CONVENIENCE
AND
NECESSITY
(CPCN)
An authorization
issued
by
the
appropriate
government agency
for the operation of
public services for
which no franchise,
either municipal or
legislative,
is
required by law,
e.g.,
common
carriers.
An authorization
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.
POWERS
REQUIRING
PRIOR NOTICE
AND HEARING
POWERS
EXERCISABLE
WITHOUT PRIOR
NOTICE AND
HEARING
1. Issuance
of
CPC or CPCN;
2. Fixing of rates,
tolls, and charges;
3. Setting up of
standards
and
classifications;
4. Establishment
of rules to secure
accuracy
of
all
meters
and
all
measuring
appliances;
5. Issuance
of
orders
requiring
1. Investigation
any
matter
concerning
public
service;
2. Requiring
operators to furnish
safe, adequate, and
proper service;
3. Requiring public
services
to
pay
expenses
of
investigation;
4. Valuation
of
properties of public
utilities;
establishment
or
maintenance
of
extension
of
facilities;
6. Revocation, or
modification of CPC
or CPCN;
7. Suspension of
CPC
or
CPCN,
except when it is
necessary to avoid
serious
and
irreparable damage
or
inconvenience
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)
5. Examination
and
test
of
measuring
appliances;
6. Grant of special
permits
to
make
extra or special trips
in
territories
specified
in
the
certificate;
7. Uniform
accounting
system
and furnishing of
annual reports;
8. Compelling
compliance with the
laws
and
regulations.
RATE-FIXING POWER
The rate to be fixed must be just, founded upon
conditions which are fair and reasonable to both the owner
and the public.
A rate is just and reasonable if it conforms to the
following requirements:
1. One which yields to the carrier a fair return upon
the value of the property employed in performing
the service; and
2. One which is fair to the public for the service
rendered.
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, even though the same had been
transferred to a third person.
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, by
collusion with others or otherwise, to transfer the
responsibility to an indefinite person, or to one who
possesses no property with which to respond financially for
the damage or injury done. (Erezo, et al. vs. Jepte 102 Phil
103).
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, for a
fee or percentage of such earnings. It is void and
inexistent under Art. 1409, Civil Code.
Effects:
1. The transfer, sale, lease or assignment of the privilege
granted is valid between the contracting parties but
not upon the public or third persons. (Gelisan vs.
Alday, 154 SCRA 388)
2.
3.
4.
5.