Professional Documents
Culture Documents
A vessel more than 3 tons owned by Filipino citizens or corporation at least 60%
of the capital of which belongs to said citizens shall be registered with the
Maritime Industry Authority.
-- the registration of those 3 tons or less is optional.
-- thereafter, if vessel is more than 15 tons gross, it shall be issued a certif
icate of Philippine registry. The taking of a certificate of Philippine registr
y of 15 tons or less is optional. However, it domestic vessel not less than 5 t
ons does not take a certificate of Philippine Registry ,it shall be issued a cer
tificate of ownership.
A foreign vessel under charter or lease to a Filipino national may be issued a t
emporary certificate of registration under the following conditions:
1.said charter or lease is with the approval of MARINA
2.duration is less than 1 year
3.used exclusively in coastwise trade unless otherwise permitted by Marina to be
used for overseas trade
4.operation entirely in the hands of Filipinos
5.vessel manned by completely Filipino crew
2005 notes: the records of the Bureau of Coast guard at the port of entry where
the vessel is registered, which now is charged with registration of vessels oper
ating in Philippine Waters would reveal the desired information.
2005 notes: Vessels are movable property hence, may be the subject of a chattel
mortgage. The contract should however be registered with the Bureau of Coast Gua
rd
-- however, between a mortgage right on the vessel and the claim of persons who
successfully salvaged the vessel, the latter is entitled to better preference.
--as such,PD 214 created a preferential lien in favor of a mortgage bank or fina
ncial institution funding the construction ,acquisition or purchase of the vesse
l.
When Repair and Maintenance of Vessel During the voyage is Required:
1. if the captain has to:
a. Contract obligation for the repair equipment of the vessel
b. Obtain loans on bottomry
2. Captain shall apply to:
a. if he is in RP territory the judge or court
b. if he is outside RP territory
* Filipino consul if there is one
* Judge or court of the local proper authority if one is available
3. Captain must present:
a. certificate of registry of the vessel, and
b. instruments proving the obligation contracted
4. Omission of this formality shall make the captain personally liable for the c
redits which may be prejudiced through his fault.
4blue 95 notes: Effect of sale. All pre-existing claims in the vessel are termin
ated. They will then be satisfied from the proceeds of the said subject to the o
rder of preference.
2. if the sale takes place AFTER arrival of the vessel at port of destination SE
LLER
a. who is obliged to pay the crew and other person who go to make up the vessels
complement for said voyage
b. unless there is an agreement to the contrary
REAL AND HYPHOTHECARY RULE (DOCTRINE OF LIMITED LIABILITY)
NO vessel ,no liability
Shipowner s or agent s liability is merely co-extensive with his interest in the ves
sel such that a total loss thereof results in the extinction. The total destruct
ion of the vessel extinguishes maritime liens since there is no longer any res t
o which it can be attach (Monarch v CA)
Basis of liability of the vessel to the passenger is the contract of carriage ,n
ot tort, and the vessel is liable for the negligence or willful act of the carri
er s employees although they acted beyond the scope of their authority ,or even i
n violation of the carrier s instructions. Damages may be imposed if the carrier a
cted recklessly.
Real and hyphothecary 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 is hypothecated for such
obligations or which stands as the guaranty for their settlement.
* liability of the vessel owner and agent arising from the operation of such ves
sel were confined to the vessel itself, its equipment, freight ,and insurance, i
f any, which limitation served to induce capitalists into effectively wagering t
heir resources against the consideration of the large profits attainable in the
trade.
* Only time the Limited Liability does not apply is when there is an actual find
ing of negligence on the part of the vessel owner or agent.
The shipowner and the ship agent are liable under the law in certain instances f
or acts of the captain under Article 586, Code of Commerce under the same provi
sion, they are liable for contracts entered into by the captain for repair of th
e vessel or to obtain provisions or supplies for the vesselunder Article 587, Co
de of Commerce, they are liable for damages due third persons because to the con
duct of the captain they are liable for tort committed by the captain they are
also liable in case of collision
2006 notes:When shipowner was equality negligent, it cannot escape liability by
virtue of the limited liability rule (Central Shipping Co, vs. Insurance Co. of
N. America , G.R. No. 150751. September 20, 2004)
> The limited liability doctrine applies not only to the goods but also in all c
ases like death or injury to passengers, (Heirs of Ampare Delos Santos vs. CA, 1
86 SCRA 649)
> The rights of a vessel owner of agent under the limited liability rule are aki
n to those of the rights of shareholders to limited liability under our Corporat
ion laws. In both insolvency of a corporation and the sinking of a vessel the cl
aimants or creditors are limited in their recovery to the remaining value of acc
essible assets ( Aboitiz Shipping Corp. vs. General Accident Fire and Life Assur
ance Corp. 217 SCRA 359)
4blue 95 notes: act of overloading vessel is negligence on part of his agent mak
ing owner liable to the heirs of passengers under the contract of transportation
, the total loss ,even under hypothecary rule will not free him from liability
to passengers.
4blue 95 notes: Limitied liability is not applicable when there is actual findin
g of negligence on part of the vessel owner or agent (even a small negligence fi
nding negates limited liability)
GENERAL RULE: the liability of shipowner and ship agent is limited to the amount
of interest in said vessel such that where vessels is entirely lost, the obliga
tion is extinguished
Exceptions to the rule on limited liability:
1. when the shipowner is at fault.
* Don Juan case where the vessel departed although PAGASA already warned that th
ere is already an oncoming strong typhoon. And the vessel encountered that stron
g typhoon because it delayed its departure. Had it left on time, it would not ha
ve encountered the typhoon. The departure was delayed, because the captain overl
oaded it and the shipowner was aware of that and he did not order the captain to
leave immediately. The vessel was overloaded, did not have radar which could ha
ve allowed it to navigate for shelter.
* A fishing vessel entered into a contract to transport 2500 cases of Coca Cola.
It was a fishing vessel, so it was not equipped and designed to carry cargoes.
It was not seaworthy to carry cargo, especially 2500 cases of softdrinks. So it
became top heavy. The Court said that the liability of the shipowner is not exti
nguished.
But for the liability to subsist, it should be the shipowner who is at fault. If
it is the captain who is at fault, then the liability of the shipowner will be
extinguished. The shipowner must be personally at fault.
2. If the vessel is insured, then the liability will not be extinguished because
the proceeds of the insurance will take the place of the vessel. The liability
will be limited to the proceeds of the insurance.
the first consignee of the goods who was able to get a final judgment cannot col
lect because there were other consignees who were still suing. So you have to wa
it until all claims have been adjudicated so that the claimants can be paid pro
rata from the proceeds of the insurance.
3. The Court has said that liabilities for repairs and provisioning the vessel,
before their loss, is not extinguished if the vessel sinks.
4. No abandonment of the ship which is not entirely lost
5. Workmen s compensation claim
6. Breach of Duty to maintain ship in seaworthy condition
Vessel can only be considered sea worthy if both vessel and cargo are sea worthy
. In fortuitous event, the vessel must also be seaworthy in order to escape liab
ility.
RULES:
1. Ship is not lost but cargoes were damage or lost, passengers died or injured.
Shipowner s liability is limited by the value of the ship with all her equipments,
freightage earned during the voyage provided they abandoned the ship since wit
hout abandonement ,shipowner cannot avail of the limited liability rule (Luzon S
tevedoring v CA)
587 applies only when captain is the one who was at fault or negligent. If shipo
wner is also at fault or negligent, the provision of the Civil code on common ca
rrier is applied.
2. Ship is totally lost
No vessel ,No liability . The total loss extinguished liability since there is no l
onger any res to which they can be attached.
4blue 95 notes: if captain is at fault, owner of vessel is free from liability f
or loss of cargo, as such liabliity is limited to the extent of his interest in
the ship. Total loss of the ship results in the total loss of his interest in t
he same, however, if loss of life, his liability is governed by the civil code w
hich provides for his use of extraordinary diligence.
ABANDONMENT
Abandonment of the vessel is necessary to limit the liability of the shipowner.
It is equivalent to an offer the value of the vessel, her equipment an freight e
arned in return for an exemption from liability.
The only instance were abandonment is dispensed with is when the vessel is entir
ely lost (Luzon Stevedoring vs. CA 156 SCRA 169).
The owner can escape from his CIVIL liability in the cases mentioned by law by a
bandoning his property in the ship and any freight earned in the voyage.
4blue 95 notes:When ABANDONMENT is made in the instances provided by law, It can
not be refused.
Why Ship Owners and Ship Agents are given the right to Abandonment:
1. To offset against the innumerable hazards and perils of the sea
2. To encourage ship building and marine commerce (Heirs of Amparo vs. de los Sa
ntos 168 SCRA 649)
b. when Ship Agent may exempt himself from liability By ABANDONING the vessel wi
th all her equipments and the freightage it may earned during the voyage.
Liability of OWNER and SHIP AGENT for obligations contracted by the captain IN E
XCESS of his powers and privileges pertaining to him by reason of his position o
r conferred upon him by the owner or agent:
a. General Rule Not liable
b. Exception Liable if the amounts claimed were made use for the benefit of the
vessel
Repairs made on a vessel ultimately redound to the benefit of the new owner for
w/o said repairs ,the vessel will be unseaworthy.Such acts give rise to solutio
indebiti and should be paid by the party benefited.
(BAR) It is not a mere defense on R s part that it is a mere agent of X and theref
ore not liable, since R s liability as a ship agent is solidary with that of X,it
s principal.
(BAR) B brokerage Company ,owner of the lighter which discharge the goods from X s
vessels, has no liability for the damaged goods ,it being evident that the good
s got damaged while still in the custody of the vessel owned and operated by X C
ompany and not while in the custody of the lighter owned by Bay brokerage Compan
y.
2006 notes: Maritime creditor may attach the vessel without waiting for the sett
lement of his right.
2. Art. 604 DURING the voyage if the captain and crew are discharged at this tim
e:
a. they shall CONTINUE to receive their salary UNTIL their RETURN to the port wh
ere the contract was made
b. UNLESS there be just motive for the discharge
3. Art. 605- if the contract of the captain and crew with the ship agent should
be for be DEFINITE VOYAGE:
a. They CANNOT be discharged until the fulfillment of their contracts
b. Except for reasons of:
* insubordination in serious matters
* robbery
* theft
* habitual drunkenness, and
* damage caused to the vessel or its cargo by malice or manifest proven negligen
ce
4. Art. 606 If the captain is PART OWNER of the vessel he can be discharge ONLY.
If the ship agent RETURNS to him the amount of his interest therein.
5. Art. 607 BUT if captain obtained his command by virtue of a special agreement
contained in the articles of co-partnership, he can only be deprived of his off
ice by reasons mentioned in Art. 605
Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain to
wards Passengers and Cargoes
1. Damages to vessel and to cargo due to lack of skill and negligence;
2. Thefts and robberies of the crew;
3. Losses and fines for violation of laws;
4. Damages due to mutinies;
5. Damages due to misuse of power;
6. For deviations;
7. For arrivals under stress;
8. Damages due to non-observance of marine regulations
Art
Prohibited
When Allowed
Effect/consequence
Act
Making
613 SEPARATE TRANSACTIONS for HIS OWN
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MARITIME PROTEST:
1. it is a written statement under oath
2. made by the captain or master of the vessel
3. After the occurrence of an accident or disaster
4. in which the vessel or cargo is lost or injured
5. With respect to circumstances attending such occurrence
6. It is usually intended to show
7. That the loss or damage resulted from:
a. A peril of sea, or
b. Some other cause for which neither the master or owner was responsible
8. It concludes with the protestation against any liability of the owner for suc
h loss or damage
It is made within 24 hours before the competent authority at the place where the
accident or disaster happened or at the first port of arrival if the Philippine
s or to a Philippine consul if the incident took place abroad.
There are 4 instances when a protest should be made:
1. When there is a general average
2. When there is a shipwreck
3. When there is a collision
4. When there is arrival under stress
Of course, if the captain cannot make the protest because of a fortuitous event,
that is excusable. Like he was injured and was in the hospital, so he is not in
a condition to make the protest.
How the Captain Can Raise funds to Comply with his Obligations (In successive o
rder):
1. By requesting funds from the consignees of the vessel or correspondents of sh
ip agent
2. By applying to the consignees of the cargo or to the persons interested ther
ein
3. By drawing on the ship agent
4. By borrowing the amount required by means of a loan on bottomry
5. By selling sufficient quantity of the cargo to cover the amount absolutely ne
cessary to repair the vessel and equip her to pursue the voyage.
Note:
In case # 4 and 5 he must comply with the provisions o Art. 583
SHIPWRECK
Loss of a vessel at sea as a consequence of its grounding or running against an
object in the sea or on the coast.
If wreck was due to malice, negligence or lack of skill of the captain, the owne
r of the vessel may demand indemnity from said captain.
Duties of the Captain with regard maritime protest
1. Protest must be made with a competent authority at the first port he touches
within 24 hours following his arrival
2. He must ratify it within 24 hours when he arrives at the place of destination
where he must proceed immediately with the proof of the facts
3. he must not open the hatches until all of the above is done
3.OFFICERS AND CREW OF VESSEL
Sailing
Mate
(Art.
The second
627-631)
Unless the ship
chiefagent
of thedoes vessel
not order otherwise, in case of absence, sickness, or
21Shall
Second deaththen
take assume
the place
allofhisthepowers,
captain,obligations
and and liabilities
Mate
Art, 632-633
Shall take command of the vessel in case of the liability or disqualification or
the captain and sailing mate, assuming therefore their powers and responsibilit
Crew
ies
1Enlisted
Qualifications:
In RPorVessels Sailors
by theoperating
Art, 634-37
captain with such
coast widenumber
trade orhe in
maythe
deemhigh
proper
seas officers and crew m
12ust
FVRilipino essels
esident
all Plying
becitizens
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Inmaximum
of
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RP (Sec.
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ofPorts
of
1/54/5
829
ofofRA
total
iftotal
1937
notcrew
enough
TCC)
crew Filipino
sailors, captain may make up the crew with
foreigners with the consent of the consult or
3HExcept
21Prohibited e cannot
must notbypass
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Acts
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failfrom
to
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When
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ofthe
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on
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ritten
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21IDfepends Contract
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has NOoffixed
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which heuntil
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21Grounds
RTepeated
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he return
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which atoaSailor
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where
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disturbs
heorenlisted
want
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byorCaptain
on the vesselor non-fulfillment
discipline,
3of Incapacity
service and repeated negligence in the fulfillment of the service he should r
4AHny
5ender abitual
occurrence
drunkenness
which incapacitates the sailor to perform the work under his char
6ge
21When
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ithout
ut
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aptain
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Art.
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out
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644)
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as Land
if
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imprisonment
land
rendered
orthereof-
seaservices
and delivery to competent author
ity in the first port of arrival should be proper (this should be obligatory to
the captain)
Art. 6387-639, Effect on the Crew of the Revocation of Voyage or Change of Desti
nation:
1. Crew shall be indemnified by reason of rescission of the contract in accordan
ce with the rate provided if after the crew has been engaged:
a. the voyage is revoked by the will of the ship agent or charterers (before or
after the vessel is put to sea)
b. the vessel is given a different destination from that fixed in agreement with
the crew
2. Crew shall have no other right but that to collect the wages up to the day th
e revocation was made if:
a. the revocation of the voyage should arise from a just cause beyond the contro
l of the shi agent and charterers, and
b. the vessel has not left port
Art. 340, Just Causes for Revocation of Voyage:
1. Declaration of war or interdiction of commerce with the Power to whose territ
ory the vessel was bound.
2. Blockade of the port of destination
3. Breaking out of an epidemic after the agreement
4. Prohibition to receive in said port the goods which make up the cargo of the
vessel
5. Detention or embargo of the goods by order of the government, or any cause be
yond the control of the ship agent.
6. Inability of the vessel to navigate
5. 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 por
t.
> Master pro hac vice (for the time being) in the command and navigation of the
ship.
> While exercising his functions a pilot is in sole command of the ship and supe
rsedes 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 m
aster. There are occasions when the master may and should interfere and even dis
place the pilot, as when the pilot is obviously incompetent or intoxicated (Far
Eastern Shipping Company vs. CA, 297 SCRA 301).
> Compulsory Pilotage States possessing harbors have enacted laws or promulgated
rules requiring vessels approaching their ports to take on board pilots license
d under the local laws (Notes and Cases on the Law on Transportation and Public
Utilities. Aquino T. & Hernando, R.P. 2004 ed p. 518)
Liability of Pilot
GENERAL RULE: On compulsory pilotage grounds, the Harbor Pilot is responsible fo
r 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 exerc
ised prudence and extra diligence to prevent or minimize damages.
2. Countermand or overrule by the master of the vessel in which case the registe
red owner of the vessel is liable. (Sec. 11, Art.III PPA Admin Order 03-85)
> The fact that the law compelled the master to take the pilot does not exonerat
e the vessel from liability. The owners of the vessel are responsible for the ac
ts of the pilot, and against, him. (Far Eastern Shipping vs. CA)
SPECIAL CONTRACTS IN MARITIME
1.)CHARTER PARTY
> A contract by virtue of which the owner or agent binds himself to transport me
rchandise or persons for a fixed price.
> A contract by which an entire ship, or some principal part thereof is let/leas
ed by the owner to another person for a specified time or use.
Parties:
1. Ship owner or ship agent
2. Charterer
Charterer has no obligation before transporting its cargo to ensure that the ves
sel it chartered complied with all legal requirements. Duty rest upon the common
carrier simply for being engage in public service.
Classes:
1.Bareboat or demise
The charterer provides crew, a food and fuel. The charterer is liable if he wer
e the owner, except when the cause arises from the unworthiness the vessel.
The shipowner leases to the charterer the whole vessel transferring to the latte
r the entire command, possession and consequent control over the vessel s navigati
on, including the master and the crew, who thereby become the charter s servants.
It transforms a common carrier into a private carrier.
4blue:private carrier who enters into a charter party remains a private carrier.
The charterer becomes the owner of the vessel pro hac vice, just for that one pa
rticular purpose only. Because the charterer assumes the customary rights and li
abilities of the shipowner to third persons and is held liable for the expense o
f the voyage and the wages of the seamen.
It is the charterer who will be liable to the holders of the goods if the goods
get lost. And since it is a private carrier, if the charterer does not pay the s
hipowner the stipulated fees, the shipowner cannot ask that the cargoes be sold
to satisfy his claims because he has no lien on the goods. Because the one who i
s liable and who is dealing with the owners of the goods is the charterer. There
is no privity of contract between the shipowner and the owners of the goods so
he cannot ask that the goods be sold to satisfy his claim for his fees.
4blue: The Court has said that in a bareboat charter of a private carrier, a sti
pulation there that the shipowner will not be liable in case of loss and damage,
the Court said since this is a private carrier, not a common carrier, that stip
ulation is valid. So the shipowner will not be liable for the loss of the goods
due to the negligence of the captain.
A stipulation in the bill of lading limiting the liability of the carrier unless
the shipper declares a higher value, that is valid and that is binding upon the
consignee. (inaudible) The consignee becomes a party to the bill of lading, the
contract for the benefit of a third party.
Time Charter: Vessel is chartered for a period of time or duration of the voyage
. The charterer acquires the right to use the carrying capacity, facilities of t
he vessel and he could designate the designations. The owner retains possession
and control of the vessel.
Voyage/Trip Charter: It is a contract for the carriage of goods of a vessel for
one or more series of voyages.
In Time Charter and Voyage Charter, the shipowner remains in control of the vess
el. So the vessel remains a common carrier.
If goods are lost, it is the shipowner who will be liable.
The Court said that a stipulation in a voyage charter that the charterer will be
liable for the loading and unloading of the goods, while the owner will be liab
le for the care of the cargo during the voyage, that is valid.
Like in the Don Juan case, whereby latter collided with a tanker which Caltex ch
artered to transport oil. Don Juan wanted to run after Caltex since it had more
money than the tanker. However, SC said that they cannot run after Caltex since
it is a voyage charter, therefore, the tanker remained common carrier, and since
it is negligent due to the fact that it was navigating at night without lights,
Caltex (the charterer) is not liable, it will be the owner of the tanker who wi
ll be liable.
The charterer will usually be liable for deadfreight. Like I had a case where th
e client (inaudible) the vessel to transport molasses he is selling to somebody
in Japan. So the vessel arrived here. When they loaded the molasses, there was a
shortage in the molasses. It was the fault of the warehouseman. Anyway, so the
shipowner filed a claim for deadfreight were there was shortage in the molasses so
that freight he could have earned was an opportunity lost. You have to make goo
d that amount because you agreed to load so many tons of molasses. That is deadf
reight.
The charterer will not be liable for the voyage if the delay in loading is due t
o fortuitous event e.g., the arrastre workers went on strike that is beyond the cont
rol of the charterer, he won t be liable for the demurrage.
The goods may be deposited
(a) if there are reasons to believe that freight will not be paid or
(b) the consignee cannot be found or
(c) the consignee refuses to receive the goods. On the other hand, the goods may
be sold to pay for the freight, expenses and those due the captain, to pay for
freight under Article 667: (a) if the consignee cannot be found, (b) if the cons
ignee refuses to receive the goods or (c) the goods will deteriorate like fruits
that will become ripe.
4blue 95 notes: when the charter is limited only to the ship( even to the whole
of it), the carrier shall remain a common carrier.
4blue 95 notes: it is only when the charter includes both the vessel and the cre
w,as in bareboat and demise that a common carrier becomes private.
4blue 95 notes: Pro Hac Vice means for this occasion which it contends that during
the duration of the bareboat charter ,he will assume the rights and obligations
of the shipowner.
2.Contract of Affreightment
A clause in a charter party providing that the COGSA shall apply, even though t
he transportation is domestic, subject to the extent that any term of the bill o
f lading is repugnant to the COGSA or applicable law, then to the extent thereof
the provision of the bill of lading is void.
In a contract of affreightment ,the shipper or charterer merely contacts a vesse
l to carry its cargo with the corresponding duty to provide for the berthing spa
ce for the loading or unloading .Charterer is merely required to exercise ordina
ry diligence in ensuring that a berthing space be made available for the vessel
.The charterer does not make itself an absolute insurer against all events which
cannot be foreseen or are inevitable. The law only requires the exercise of due
dliligence.
Art. 689. when Charter Party May be Rescinded at the Request of the SHIP OWNER (
from whom the vessel is chartered)
1FAILURE of the charterer, at the termination of the extra lay days, to place the
Condition/Consequence
Ground
12Charterer
ISDHfALE
cargo
ALF
emurrage
theof
pfbuyer
alongside
thefor
must
freight
vessel
ofthe
pay
the
the
lays
byvessel
stipulated
vessel
the
daysowner
has
andloaded
extra the
BEFORE lay
thevessel
days
charterer
for his own account Seller/ Own
21er
TIhe f the
must
charter
seller
buyer
indemnity
shall
shall
doesindemnify
therespected
not
be charterer
load the buyer
vessel
for damages
for
if he
hissuffered
did
ownnot
account.
inform the buyer of the pendi
ng charter at the time of making of the sale
4blue 95:Arastre operations are not maritime transactions and the provisions of
COGSA do not apply to arrastre services.
4blue 95:Against the arrastre operator, the suit should be preceded by a claim w
ithin 15 days from the discharge of the last cargo, and the suit itself should b
e filed within 2 yrs from said discharge.
2.) LOANS on BOTTOMRY and RESPONDENTIA
Loan on Bottomry or Respondentia is :
1. A Loan
a. Under which any condition whatsoever;
b. The repayment of the sum loaned and of the premium stipulated
c. Depends upon the safe arrival of the effects
d. In the port on which it is made
2. A loan with things exposed to maritime risks as collateral to be paid if the
collateral are safety transported and the lender shall lose his money if the col
lateral is lost
3. It is a loan on:
a. Bottomry if the security is a vessel
b. Respondentia if the security is cargo
Characteristics of a loan on BOTTOMRY
1. It is a loan the security of which is the vessel itself
2. Conditioned on the safe arrival at the point of destination
3. The vessel must be exposed to maritime peril therefore if the vessel is only
docked under a covered shed and it is hit by lighting and the vessel burns, the
bank can still recover from the shipowner because the vessel was not exposed to
maritime peril.
Who may contract a Loan on Bottomry
1. The owner of the vessel
2. Captain of the vessel in the absence of the owner
Distinction
Loan on Bottomry
Ordinary Loan or
May
1Respondentia
2Collateral
3Absolutely
4Need
5To
MPTust
hebecollateral
ayment
orbe
have
not
binding
may
depends
in
registered
beawriting
not
may
repayable
collateral
in onwriting
have
be
must
on3rd
any
the
inapersons,
either
collateral
property,
the
saferegistry
bearrival
a vessel
need
realof
not
byorvessels
orpersonal
the
be cargo
registered
collateral
ofsubject
the port
attothe
ofmarine
port of
registry
risks
the
of the
loanves
sel,
6Loss
Loss ofto collateral
be binding extinguishing
collateral, onif3rd
any,persons
does the
not loan
extinguish the loan
2005 notes: The 30% interest rate cannot be questioned as being violative of Usu
ry law. Loans of bottomry are maritime loans, and there is no limit to the rate
of interest (more conveniently called as premium) to be charged, in view of the
fact that there are different classes and various accidents to which maritime vo
yages are exposed. If vessel ,to whose owner the bottomry loan was granted does
not negotiate the voyage safely, the lender loses all rights to collect and it
is this factor, the high risk involved, which prevents the Usury law interest ra
tes from being applicable to bottomry loans.
Hence Impositon of 30% cannot later on be questioned as violative of the Usury L
aw.
Art. 730. Preference of Loans on Bottomry:
Over made
Preferred
Loans before
for the
during
over
clearing
last
prior
the
voyage
voyage
of
voyages
the vessel
Art. 731 Effect of Total Loss of Collateral on the Loan on Bottomry or Responden
tia (as compared to Abandonement)
General
Total loss of the collateral
Rule
1EXTINGUISHES
It arose fromthe
an accident
loan it: of the sea at the time and during the voyage designate
2dItinisthe
Exception proven
contract,
that the
andcargo was on board
321The
The loss
loan was
is NOT
caused
extinguished
by the damages
inherent
fault
if: orsuffered
defect ofbythe
malice theborrower
thing,
vesseloras a consequence of be
5ing
Whenengaged
the cargo
in loaded
contraband
on the vessel be different from the change should have bee
n made by reason of force majeure
(BAR) G obtained loan from Jo payable in installments.G executed a chattel mortg
age in favor of Jo whereby she transferred in favor of Jo its successors and ass
igns all her title and rights to a vessel which G is the absolute owner. The cha
ttel was registered with the MARINA and had a total accountability of P3M.but Jo
could not forclose mortgage on vessel since it sank during typhoon. Meanwhile L
which rendered salvage services for refloating the vessel sued G. Whose lien s
hould be given preference?
HELD: L s lien should be given preference since lien of Jo was extinguished when v
essel sank,her right to recover was predicated on the safe arrival of the vessel
at port of destination(PD 1521).
2006 notes: captain of vessel can contract loans on bottomry and if he does so a
t the place where the owners reside,then only that part owned by him is liable.
If he does so at other places to have funds to comply with the powers inherent
in his office, then the whole vessel may be made liable by him as he then is act
ing as agent for all the owners.
2006 notes: captain may constitute a loan on bottomry on that portion, if any, o
f the vessel owned by him to finanace his personal transactions provided no prio
r loan on bottomry has been executed on the whole vessel and provided further th
at no other lien or encumbrance exists on said vessel.
2006 notes: captain cannot contract loan of respondentia since he is not owner o
f cargo which is the security in a loan on respondentia. Neither is he an agent
of these cargo owners. Besides, the Code specifically prohibits it.
Remedy of respondentia creditor:
Even if ship and its cargo perished, the principle of limited liability cannot b
e invoked ,the captain in this case assuming a personal responsibility for the s
ums received by him from the loan on respondentia consummated by him, the loan b
eing considered as a personal loan of the captain not extinguished by the loss o
f the goods.
3) CONTRACT OF PASSENGERS
4) MARINE INSURANCE
5.)CARRIAGE OF GOODS (BILL OF LADING)
Bill of Lading is:
1. An Instrument in writing
2. Signed by a carrier or his agent
3. Describing the freight so as to identify it
4. Stating the name of the consignor, the terms of the contract of carriage, and
5. Agreeing or directing that the freight be delivered to the order or assigns o
f a specified person at a specified place
2005 notes: $500 per package prescribed by COGSA is not applicable where there i
s a stipulated limit in the bill of lading and when there was declared higher va
lue.
2005 notes: failure to file notice of claim w/in 3 days from receipt of the carg
o will not bar recovery of damages by the consignee if action is filed within th
e 1 year period under the COGSA.
2005 notes: Under NCC, automatic presumption of fault or negligence in case of d
amage to cargoes carried unless it falls under exempting causes (art 1734)
2005 notes: Common carrier is liable for goods discharge by it in bad order cond
ition
and the arrastre operator for goods damaged in its custody.
2005 notes: the insertion in the Bill of Lading of the word LC No. 901 which sta
te the amount of the LC obtained by the shipper will not effect the declaration
of the value of the goods and cannot be the basis for the carrier s liability .
2-Fold Character of BL
1. A RECEIPT w/c
a. specifies the quantity, condition and character of the goods received and rec
ites, and
b. recites the date an place of shipment and the fees paid by the shipper
2. it is evidence of a CONTRACT by which the 3 parties (shipper, carrier, consig
nee) undertake specific responsibilities and assume stipulated obligations; also
fixes the route, destination, freight charges, and stipulates the rights and ob
ligations assumed by he parties (Art. 353)
(BAR) a shipment of rice arrives in Manila from Thailand .the agreement between
the shipper and the ship owner is that freight was to be paid upon the discharg
e of the cargo. The shipper ,however does not pay the freight but offers a bond
to respond therefore. Notwithstanding this offer, the owner of vessel refuse to
deliver the rice. May not he charterer be ordered to deliver the rice by the cou
rt before which the shipper brings action ,upon furnishing of the bond by the sh
ipper?
HELD: NO, the ship owner cannot be ordered to deliver the rice by mere offer to
give a bond. The ship owner is entitled to be paid in legal tender on delivery o
f the cargo.
A shipper may be held liable for bills of lading signed by another person,where
the shipper does not appear as shipper or consignee, or where persons other than
the shipper appear as the shpper, or where bill of lading is not actually singe
d by the shipper, if the evidence shows that the goods actually shipped belonged
to the shipper.
Diligence Required:
Extaordinary diligence . A common carrier ,in allowing its unseaworthy vessel to
leave the port of origin and undertake the contracted voyage, with full awarene
ss that it was exposed to perils of the sea, deliberately disregarded its solemn
duty to exercise extraordinary diligence and obviously acted with bad faith and
in wanton and reckless manner thus making it liable for moral and exemplary dam
ages.
Art 359 Route to be Taken by Carrier:
1The the
Can Routecarrier
AGREEDCHANGE
UPON bythetheagreed
parties
route?
General
21ETAxception
ll amount
he damages
SHORTEST,
rulestipulated
suffered
byLEAST
NO
reason
otherwise,
EXPENSIVE
byfor
ofthe
force
such
\goods
heand
event
majeure
shall
PRACTICAL
transported
be liable
route
for
for(any
In other
absence
cause,
of anand
agreement)
Art. 363 and 365, When Consignee may REFUSE to RECEIVE the Goods:
1. Art. 363 When only a PART of the goods have been delivered to him and he PROV
ES that he CANNOT make use of the goods delivered without the others.
E.g.Like they are components of an equipment and without the missing parts you c
annot use the equipment.
2. Art. 363 when the goods are DAMAGED and RENDERED USELESS for sale or consumpt
ion for particular purposes for which they are to be used (he can also demand p
ayment of their value at the current market price on that day)
E.g. you imported a thoroughbred and the legs of the horse were broken during th
e shipment.
3. Art. 365 when among the damages goods, there should be some in good condition
, he is not required to receive those which are sound if he PROVES the impossibi
lity of utilizing the same in this form.
Now, if upon delivery of the goods, it is obvious from the external appearance o
f the packages that there were damages, the consignee must immediately file a cl
aim. If that is not apparent from the external condition of the packages, then h
e has 24 hours from delivery within which to file a claim. If the claim is not f
iled within this period as mentioned in the law, then that will be barred becaus
e compliance with that is a condition precedent for a filing a case in court.
Art. 365. Period for Bringing a Claim Against the Carrier
1. IMMEDIATELY UPON RECEIPT of the Package - if the damage is APPARENT from the
exterior of the package (for such purpose, a VERBAL CLAIM made immediately is S
UFFICIENT compliance with the law)
2. WITHIN 24 HOURS following RECEIPT of the Package if the damage CANNOT BE KNOW
N from the exterior part of the package
3. All Claims are EXTINGUISHED - if the consignee RECEIVES the merchandise, PAY
ING the freight charges WITHOUT PROTEST.
BAR: Did the prescriptive periods under the Civil code repeal Art. 366 of code o
f Commerce?
HELD. NO. The limitations of actions mentioned in the Civil Code are without pre
judice to those specified in the Code of Commerce (Art. 1148 New Civil Code)
Carrier s Lien on Goods
Consignee may not defer payment of the TRANSPORTATION CHARGES and EXPENSES after
the lapse of 24 hours following their deliveryEven if consignee did not sign th
e bill of lading, he is bound to pay the freight charges as agent of the shipper
or by ratification if he presents the bill of lading to the carrier and accepts
the goods.
In case of delay in payment, the carrier may demand the judicial sale of part of
the goods to pay for the expenses and cost of transportation. The goods transpo
rted are bound for this obligation, and the carrier acquires a 30 day lien over
these goods during which the goods may be sold to satisfy the credit of the carr
ier.
2006 notes: ambiguity in a bill of lading is construed against the carrier ,the
contract being one of adhesion (Eastern v Margarine)
If the goods are to be transshipped, the last carrier to deliver the goods shall
be liable for either damage or loss, even if that occurred while the goods were
in the custody of a previous vessel.
Suppose the goods were imported from Japan. They were brought by Japanese vessel
from Tokyo to Manila. Then they were transshipped to Cebu by domestic shipping
company, Sweetlines. And the goods arrived in Cebu in a damaged condition, the c
onsignee can run after Sweetlines even if the goods might have been damaged whil
e in custody of that Japanese vessel. The recourse of Sweetlines is to run after
that Japanese vessel for reimbursement.
Magellan Case. The letter of credit, which the buyer of the imported goods open
ed, contained a provision prohibiting transshipment of the goods. The shipping t
ransshipped the goods on another vessel. And, there was a provision in the bill
of lading issued that there be a transshipment. The seller accepted the bill of
lading without protesting. Although the in the letter of credit there was a stip
ulation there will be no transshipment, the bill of lading said there will be a
transshipment. The buyer refused to accept the goods, our agreement was that the
re shall be no transshipment. The seller now was running after the vessel. The c
ourt said: No, because that agreement that there shall be no transshipment is ju
st between the two of you. The carrier is not bound by that and in the bill of l
ading which the seller issued there is a stipulation that the goods would be tra
nsshipped, and you accepted it, you did not object. So in the contract between y
ou and the [carrier] there was a provision for transshipment, you cannot sue the
carrier if the buyer refuse to take delivery of the goods.
4blue 95 notes: there is transshipment even if the 2 vessels are owned by same c
ompany.
AVERAGES
AVERAGES
Art. 806. The following Shall be Considered as Average:
1. All extraordinary or accidental expenses which may be incurred during the voy
age for the preservation of the vessel, cargo, or both
2. All damages or deterioration:
a. which the vessel may suffer
* from the time she puts to sea at the port of departure
* until she casts anchor at the port of destination
b.suffered by the goods
* from the time they are loaded in the port of shipment
* until they are unloaded in the port of their consignment
Kinds of Averages
Simple or
All the expenses and damage caused to the vessel or to her cargo which have NOT
Definition
General
Particular
Inured to the common benefit and profit of all the persons interested in the ves
sel the
All and damages
her cargoand(Art.
expenses
809) which are deliberately cause in order to save the v
essel,
Who
The bears
OWNER
herof
the
cargo,
the
loss?
things
or bothwhich
at thegavesame
risetime
to the
fromexpenses
a REAL KNOW
or suffered
risk (Art.
the811)
damage (
Art.the
All 810)persons having an interest in the vessel and cargo therein at the time o
f the occurrence of the average shall contribute
Distinction:
PARTICULAR or
Have not inured to the common benefit of all persons interested in the vessel an
GENERAL
SIMPLE
1dSDChall
2May
3Are
aused
eliberately
herborne
bebe
cargo
forshared
donebythe
tothe
caused
benefit
causes
and
owner
inother
contributed
order
of those
thethan
tothins
interested
save
bya all
deliberate
damages
thepersons
vessel
in act
the
having
and/or
vessel
anherinterest
andcargo
her cargo
in the vessel
and cargo
(BAR) Cargo of copra was loaded on board a Phil vessel bound for Holland. The ow
ner of the vessel incurred the ff expenditures in course of trip: P15000 for rep
airs to the hull due to a collision with another vessel in the Gulf of Aden, P10
000 for additional provisions for the crew and passengers while repairs were bei
ng made, P10000 for deterioration in the value of the copra due to the delay cau
sed by repairs and P10000 for towing vessel thru the Suez canal .By whom and in
what amount shall each of the above expenses be borne?
HELD: Repair expense of P15000 is a particular average to be borne by the owner
without prejudice to said owner running after the other vessel, if negligent. Th
e average is particular as it was not deliberately incurred for common benefit.
Additional provision for the crew and passengers of P10000 is also particular av
erage and is borne by the owner of the vessel .the expense is a consequence of
the repair of the vessel, which itself is a particular average.
P10000 deterioration in value of copra is particular average to be borne by copr
a owner. Loss in value is not a consequence of a sacrifice for common benefit.
Towage expense is an ordinary expense incident to navigation and is borne by the
owner of vessel.
CONTRACT OF TOWAGE:
Contract whereby one vessel usually motorized, pulls another, whether loaded or
not with merchandise from one place to another for compensation.
It is a contract for services (lease contract) rather than a contract of carriag
e.
(BAR) While at sea, the captain of vessel A received distress signals from vesse
l B and vessel A responded and found vessel B with engine failure and drifting o
ff course. Upon acceptance by vessel B of vessel A s offer, vessel A connected tow
lines to vessel B and towed it safely to port. There was no grave marine peril
since the sea was smooth and vessel b was far from the rocks. In a suit for comp
ensation for towage, who are entitled to recover, the owner, the crew or both?
HELD: Owner of vessel A since a towage contract is a lease of services and the l
essor ,owner of vessel A is entitled to reasonable compensation for said service
s. Members of the crew of vessel A are not entitled to compensation since the op
eration in the problem was not one of salvage.
2.GENERAL AVERAGE
Requisites:
1. A common danger, a danger in which ship, cargo and crew all participate
2. There must be a voluntary jettison or casting away of some portion of the car
go for the purpose of avoiding this imminent peril
3. This attempt to avoid the imminent peril must be successful in a sense that t
he vessel and some of the cargo are saved
Proof
Made at port of repairs, if any is made, or in port of unloading .Liquidation i
s done in the port of unloading if in the Philippines, or in the port of arrival
,if in a foreign country.
Common carriers cannot limit their liability for injury or loss of goods where s
uch injury or loss was caused by its negligence. Otherwise stated, the law on av
erages under the Code cannot be applied where there is negligence.
Liquidation
Done by private agreement or if the parties cannot agree, then by judicial autho
rity.
4blue 95 notes: Jason Clause: it means that the rights to contribution in a gene
ral average need not be affected even if it may have been due to the fault of o
ne of the parties (as such, even the guilty party may collect)
However, this is without prejudice to the rights of the other parties as with re
ference to the party at fault.
COLLISION:
Definitions:
1. In a strict sense:
a. collision the impact of 2 vessels, both or which are moving
b. Allision the striking of a moving vessel against one
that is stationary
2. In a broad sense collision includes allision, and perhaps another species of
encounters between vessels, or a vessel and other floating, though non-navigable
object
Rule when there is a Collision or Allisison
The guilty vessel must pay for the damage EXCEPT when the guilty vessel sinks, b
ecause of its hypothecary nature.
5 Cases Covered by Allision or Collision:
Who
Liability
21Said BEITDOoth ne own
amage
amages
he
ts
ach isshipowners
vessel
innocent
vessels
vessel
atvessel
caused
suffered
fault
and
shall
must
vessel,
attofault
fault
shall
the
by
bear
bethe
liable
innocent
and
(Art.
its
be owners
solidarily
own827)
forloss
vessel
of theliable
cargotoofthe shipper for the damages occasi
213oned BEIoth t cannot
ach to cargo
vessel
shipowners
bemust
determined
shall
bear beitswhich
solidarily
own loss
vesselliable
causedtothethecollision
shipper for
(Art.the828)
damages occasi
4oned
521The
None FITDAortuitous
amage
amages
he
ts
3rdown
23rd
toinnocent
Liable,
vessel
caused
cargo
suffered
vessel
Event
istovessels,
eachshall
at(Art.
the
by
vessel
fault
the
2be830)
innocent
liable
owners
and
(Art.bear
must 831)
for:
of
vessels
the
itscargo
own loss
of
Art. 826 Collision Through Fault of Captain or Crew
The OWNER of the vessel at fault shall indemnify the damages suffered, after an
expert appraisal
Art. 837. Limit of the Liability of Ship owners in Cases of Collision, Limited t
o the:
1. Value of the vessel
2. All her appurtenances
3. Freight earned during the voyage
The loss of the vessel extinguishes the liability of shipowner for the damage ca
used by collision. (Unless covered by the exceptions)
Fault undeterminable (Doctrine of Inscrutable Fault. )
If you cannot determine which vessel is at fault, each one bears its own loss an
d the shipowners of the two vessels will be jointly and severally liable for the
owners of the cargoes of both vessels. This is the doctrine of inscrutable faul
t. Inscrutable, you cannot determine. Where two vessel collides and you cannot de
termine who is at fault, then each vessel bears its own loss and the vessels wil
l be jointly and severally liable for the owners of the cargoes of both vessels.
2006 notes: Doctrine of last clear chance is not applicable to collisions specia
lly where both are at fault or under doctrine of inscrutable fault.
Limit of the Liability of the Carrier for Loss or Damage to Goods Transported Se
c. 4(5)(1);
1. $500 per package
UNLESS the nature and value of such goods have been declared by the shipper befo
re shipment and inserted in the bill of lading
2. This declaration, if embodies in the bill of lading
a. Shall be prima facie evidence
b. But shall not be conclusive on the carriers
3. Shipper and carrier may agree on another maxim amount but should no be less t
han $500
4. Carrier can NOT be liable for:
a. MORE than the amount of damage ACTUALLY sustained
b. Loss or damage to goods if the value thereof has been knowingly and fraudulen
tly MISSTATED by the shipper in the bill of lading
- Code of commerce is brooder than COGSA
- Mayer Steel vs CA only the carriers liability is extinguished if no sin is bra
det within 1 year. But not the insurer. Insurer can t five we againt carrier by 1
year period.
Exception: if the law applicable is not the COGSA example: code of commerce
Q: what law shall prevail, with respect to prescriptive periods? Civil Code or
COGASA?
A. The New Civil Code did NOT impliedly repeal the period of prescription under
the COGSA, AS a SPECIAL LAW the COGSA prevails over the general provisions of th
e Civil Code on prescription of action (Maritime Agencies vs CA 187 SCRA 346)
Instance Where the One (1) Year Prescriptive period Under the COGSA IS INTERRUPT
ED:
1.in case an action has already been filed in court
2.when there is an express agreement to the effect
3.if it is delivered to wrong party
Effect of Extrajudicial Demand it shall not interrupt the running of the prescri
ptive period.
1. the general provisions of the Civil Code (Art 1155) cannot be made to apply,
as such application would have the effect of extending the one-year period fixed
by law
2. it is desirable that matters affecting transportation of goods by sea be deci
ded in as short a time as possible
AIR TRANSPORTATION
Regulatory Body in Air Transportation
Civil Aeronautics Board (CAB)
Requisite Engage in Air Commerce- CPCN
RA 776 Sec. 11
A certificate of Public Convenience and Necessity is a permit issued by the CAB
authorizing a person to engage in air commerce and/or air transportation foreign
and/or domestic.
WARSAW CONVENTION
In General :
1. full title Warsaw Convention for the Unification of Certain Rules Relating to
International Carriage by Air
2. Date and Place Signed Warsaw Poland, October 12, 1929
3. Formal Adherence September 23, 1955 by Proclamation 201 issued by President R
amon Magsaysay
Is the Warsaw Convention Binding in the Philippines?
1. General Rule- YES, it has the force and effect of a law, being a treaty commi
tment assured by the Philippine Government.
2. However- it does NOT operate as:
a. an Exclusive enumeration of the instances for declaring a carrier liable for
breach of contract carriage, or
b. an ABSOLUTE limit of the extent of that liability
3. it must NOT be construed as to PRECLUDE the operation of the Civil Code and o
ther pertinent laws- it does not regular, much less exempt the carrier from liab
ility for damages for violating the rights of the passengers under the contract
of carriage, ESPECIALLY if willful misconduct on the part of then carrier s employ
ees is found or established.
Any
Applicability
21The
Meaning
PAerformed
ll transportation,
Warsaw
INTERNATIONAL
ofbyInternational
Convention
aircraft
(Art.Transportation
1.1)
in shall
for
which
Transpiration
HIRE
apply
according
ofto persons,
to the contract
baggage ormade
goods
by the parties, the
place of departure and the place of destination, whether or not there be a break
1Within
in thethe
transportation
territories ofor two
a transshipment
high Contracting
are situated
parties or
either:
is a signatory to the
2Within
Warsawthe
convention
territory& of
adverse
a signle
to the
highagreement
contracting Party, if there is an agreed s
topping, place within a territory subject to the sovereignty, mandate or authori
ty of another power, even though that power is not a party to this convention,
Case:
1. Mapa vs CA- Jul 8, 1997 :Transportation to be performed by Several successive
Air Carriers
Art. 1(3)
Transportation to be performed by several successive air carries shall be deeme
d, for the purpose of this convention, to be one undivided transportation. If it
has been regarded by the parties as a single operation, whether it has been agr
eed upon under the form of a single contract or of a series of contracts, and it
shall not lose its international character merely because one contract or a ser
ies of contracts is to be performed entirely within a territory subject to the s
overeignty, suzerainty, mandate , or authority of the same high contracting Part
y
When the Air Carrier Shall Not be entitled to the Warsaw convention provisions w
hich EXCLUDE or Limit his Liability
Art. 25
(1) if the damage is caused by his WILLFUL MISCONDUCT or by such default on his
part as, in accordance with the law of the court to which the case is submitted
, is equivalent to willful misconduct
(2) if the damage is caused by under the same circumstance by any agent of the c
arrier acting within the scope of his employment
Art. 25 in relation to art. 22 Liability of Air Carriers
Luna vs CA -216 SCRA 107 (Nov 27, 1992) :limitation only applies to Art 22, & no
other in the Warsaw convention
Art. 26 When to file a complaint for Delay or Damage to goods or baggage with th
e carrier this is condition precedent for fluting case against the carrier
1.limited liability for baggage lost is set at $1000 and for the death of the pa
ssenger at $100,000 under the Warsaw Convention and the subsequent amendatory tr
eaties,
but the carrier cannot avail of this limitation if the breach is attended by wil
lful misconduct, bad faith, recklessness or improper behaviour on the part of an
y official or employee for which the carrier is responsible. If there is satisfa
ctory evidence of malice or bad faith by the airline s officers and employees, an
air carrier may be sentenced to pay not only compensatory but also moral and exe
mplary damages and attorney s fees.
Mere breach of contract entitles the passenger to damages .Exemplary damages are
recoverable if the breach is tainted with bad faith. Responsibility of the carr
ier for the safety of passengers cannot be dispensed with by notice and stipulat
ions(4blue95).
Where a passenger with a confirmed ticket is bumped off by the airline to give w
ay to another passenger ,there is a breach of contract entitling the passenger t
o actual ,moral and exemplary damages.
If however the breach is wanton, fraudulent, oppressive or malevolent ,exemplary
damages are not compensable.
Moral damages are recoverable only when the passenger dies, or even if alive, wh
ere the carrier acted in bad faith.
* in awarding moral damages for breach of contract of carriage, the breach must
be wanton and deliberately injurious or the one responsible acted fraudulently o
r with malice or bad faith.
* To warrant award of exemplary damages, the wrongful act must be accompanied by
bad faith, and the guilty party acted in a wanton,fraudulent, reckless or malev
olent manner.
Where the date and erroneous hour of departure of a passenger are confirmed by
the common carrier(plane) and the passenger is bumped off due to his arriving i
n the airport 1 hours before the erroneous departure hour, there is gross negli
gence by the carrier entitling the passenger to actual ,moral and exemplary dama
ges. No nominal damages can be awarded as they cannot coexist with actual damage
s.
* the award of nominal damages is in order. Nominal damages are adjudicated in o
rder that a right of a plaintiff ,which has been violated or invaded by the defe
ndant ,may be vindicated or recognized and not for the purpose of indemnifying a
ny loss suffered arising from any source enumerated in Article 1157, or in every
case where any property right has been invaded.
* If the passenger fails to take standard procedure of confirming ticket ,after
a two day stopover in a city, the airline cannot be faulted for the passenger s n
egligence.
2. in carriage of goods
A passenger whose baggage was lost by the airline is entitled to recover damages
allowed by Phillipine laws. The Warsaw convention provides $20 recovery per pac
kage, presupposes absence of misconduct, bad faith, recklessness or otherwise i
mproper conduct. The passenger can recover under both(the $20 is also applicable
if the contents of a baggage lost by the airline is not declared however, if the
baggage is unchecked, a recovery up to $400 is allowed).
4BLUE 95 notes: where however, the baggage of the passenger was lost but later o
n found, preventing the passenger from participation in a special technical conv
ention to which the passenger was specially invited, she is entitled to nominal
damages of P40,000( Alitalia v IAC)
* it is the duty of the carrier to inquire as to the nature of the articles ship
ped and their value before consenting to carry them, and its failure cannot defe
at the shipper s right to recover the full value of the package if lost, in the ab
sence of a showing of fraud or deceit on the part of the shipper.
* A claim for lost baggage if acknowledge by the carrier inspite of the fact tha
t no baggage tags or checks could be presented by the passenger, entitles the pa
ssenger to recovery.
* In determining the amount of compensatory damages in breach of contract involv
ing misplaced luggage, it is vital that the claimant satisfactorily prove during
the trial the existence of the factual basis of the damages and its causal conn
ection to defendant s acts.
* An airline is not liable for the loss of baggage in an amount in excess of the
limits specified in the tariff which was filed with the proper authorities ,suc
h tariff being binding on the passenger regardless of the passenger s lack of know
ledge thereof or assent thereto.
* Where in breaching the contract of carriage the defendant airline is not shown
to have acted fraudulently or in bad faith, liability for damages is limited to
the natural and probable consequences of the breach of obligation which the par
ties had foreseen or could have reasonably foreseen. In that case, such liabilit
y does not include moral and exemplary damages.
JURISDICTION
Art 28 (1)An action for damages must be brought , at the option of the plaintiff
, in the territory of one of the high contracting parties, either before the cou
rt of the domicile of the carrier or of his principal place of business, or wher
e he has a place of business through which the contract has been made, or before
the court at the place of destination .
Where a Complaint for damages against an air carrier may be instituted:
1. The court of the domicile of the carrier
2. The court of its principal place of business
3. the court where it has a place of business through which the contract had bee
n made
4. The court of the place of destination
4blue 95
3.The states may delegate to the public service commission the power to regulate
public utilities,
a. Land Land Transportation Franchising & regularly Board ( LTFRB)
b. sea maritime industry Authority (Marina)
c. air- Civil aeronautics Board (CAB)
4blue 95 Note: Any reference to the Public Service Commission ( which is now def
unct) shall be understood to be the appropriate board, authority or agency of th
e government that took over its function
Sec 15, Certificate of Public Convenience or certificate of Public Convenience a
nd Public Necessity
No public service shall operate in the Philippines without possessing a valid an
d subsisting certificate from the poer regulatory body known as certificate of
convenience as the case may be, to the effect that the operation of said service
and the authorization to do business will promote the public interest in a prop
er and suitable manner.
Entities engaged in Public service who are exempted from obtaining a CPC or CPCP
N:
1. Public service owned or operated by government of GOCC s
2. Grantees of legislative franchise when expressly exempted from obtaining a CP
C
3. those expressly exempted from the jurisdiction of the regulating bodies
4blue 95 notes: LTFRB, MARINA and CAB CANNOT motu propio cancel a certificate of
public convenience(CPC).
Since the common carrier is entitled to due process (notice&hearing)
And the ground for cancellation of a certificate of public convenience is failur
e on the part of the common carrier to exercise extra ordinary diligence in tran
sporting passengers or goods.
4blue 95 notes:CPC constitutes neither a franchise or a contract, it confers no
property rights and is a mere license or privilege. Therefore it can be subject
to regulation founded on the police power of the state.
4blue 95 notes:the sale of a franchise without approval of the respective above
bodies is not binding against the public or the governing bodies and that the gr
antee of record continues to be responsible under the franchise in relation to t
he public and the governing bodies.
4blue 95 notes: in PAL v CAB (270 S 533): the issue here is that does CAB have t
he authority to issue a certificate of public convenience and necessity (CPCN)
or Temporary Operating Permit (TOP) even if PAL does not yet possess a legislat
ive franchise?
HELD: YES, there is nothing in the law nor in the constitution which indicates
that a legislative franchise is an indispensable requirement for an entity to op
erate as a domestic air transport