Professional Documents
Culture Documents
Prepared by:
Delfin, Daniel Al B.
Melicor, Ruth F.
Matunog, Raissa N.
UP College of Law (D2019)
Part I: PUBLIC UTLTITES impressed with a public interest; and whether the
operation of a given business is a public utility
General Discussion depends upon whether or not the service
rendered by it is of a public character and of
What is a public utility? public consequence and concern.
Thus, a business may be affected with public
- A public utility is a business or service engaged interest and regulated for public good although
in regularly supplying the public with some not under any duty to serve the public.
commodity or service of public consequence - It has been seen that public utility, even where
such as electricity, gas, water, transportation, the term is not defined by statute, is not
telephone, or telegraph service. determined by the number of people actually
- privately owned and operated businesses whose served. Nor does the mere fact that service is
services are essential to the general public. rendered only under contract prevent a company
they are enterprises that specially cater to the from being a public utility.
needs of the public and conduce to their On the other hand, casual or incidental service
comfort and convenience devoid of public character and interest, it must
impressed with public interest and concern be admitted, is not brought within the category
there is a right of public regulation when of public utility.
private properties are affected with public The demarkation line is not susceptible of
interest, hence, they cease to be juris private exact description or definitions, each case
only. being governed by its peculiar circumstances.
- when therefore, one devotes his property to use
in which the public has an interest, he in effect "The principal determinative characteristic of a
grants to the public an interest in that use and public utility is that of service to, or readiness to
must submit to the control by the public for the serve, an indefinite public or portion of the public as
common good, to the extent of the interest he such which has a legal right to demand and receive
has thus created. its services or commodities. Stated otherwise, the
owner or person in control of a public utility must
MUNN VS. ILLINOIS have devoted it to such use that the public
- When private property is affected with public generally or that part of the public which has been
insterest, it ceases to be juris private only. served and has accepted the service, has the right
Property does become clothed with a public to demand that use or service so long as it is
interest when used in a manner to make it of continued, with reasonable efficiency and under
public consequence and affect the community at proper charges.
large
- When therefore, one devotes his property to a If the use is merely optional with the owners, or the
use in which the public has an interest, he in public benefit is merely incidental, it is not a public
effect, grants to the public an interest in that use, use, authorizing the exercise of jurisdiction of the
and must submit to be controlled by the public for public utility commission. There must be, in
the common good, to the extent of the interest he general, a right which the law compels the owner to
has thus created. give to the general public. It is not enough that the
general prosperity of the public is promoted. Public
LUZON STEVERDORING CO. VS. PSC use is not synonymous with public interest. The
- In the United States, where it is said, there is no true criterion by which to judge the character of
fixed definition of what constitutes public service the use is whether the public may enjoy it by
or public utility, it is also held that it is not always right or only by permission. (J.G. Summit vs.
necessary, in order to be a public service, that an Court of Appeals)
organization be dedicated to public use, i.e.,
ready and willing to serve the public as a class. It
is only necessary that it must in some way be
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question and is subject to the review of the existing regulatory body today, is likewise vested
courts. with the same under Executive Order No. 202
The function of the court, is to determine dated June 19, 1987.
whether under the facts and circumstances, - Sec 5(c) of the said executive order authorizes
the final order entered by the administrative LTFRB "to determine, prescribe, approve and
agency is unlawful or unreasonable. periodically review and adjust, reasonable fares,
What is just and reasonable rate is a question rates and other related charges, relative to the
of fact calling for the exercise of discretion, operation of public land transportation services
good sense, and a fair, enlightened and provided by motorized vehicles.
independent judgment. The requirement of - Such delegation of legislative power to an
reasonableness must be met. administrative agency is permitted din order to
adapt to the increasing complexity of modern life.
Need for Regulation is caused by the ff. Given the task of determining sensitive and
Problems: delicate matters as route-fixing and rate-making
(1) Monopoly Pricing for the transport sector, the responsible
(2) Price Discrimination regulatory body is entrusted with the power of
(3) Inefficient Price Structure subordinate legislation.
- However, nowhere under the aforesaid
Elements of Public Utility Regulation: provisions of law are the regulatory bodies, the
(1) Profit control PSC and LTFRB alike, authorized to delegate
(2) Entry control that power to a common carrier, a transport
(3) Price structure control operator, or other public service.
- IN the case at bar, the authority given by the
How to determine a reasonable rate of return? LTFRB to the provincial bus operators to set a
(see notes) fare range over and above the authorized
existing fare, is illegal and invalid as it is
Where does power to regulate Public tantamount to an undue delegation of legislative
Utilities Reside authority. Potestas delegata non delegari potest.
What happened to the Public Service created by Executive Order No. 202. The LTFRB,
Commission? successor of LTC, is the existing franchising and
regulatory body for overland transportation today.
FOOTNOTE NO. 2 IN KMU LABOR CENTER VS. GARCIA
- The 20th century ushers in the birth and growth What is Not a Public Utility?
or public utility regulation in the country.
(Introduced by the Americans > various TATAD VS. GARCIA
regulatory bodies were created). - What private respondent owns are the rail tracks,
They were the Coastwise Rate Commission not a public utlity.
under Act No. 520 passed by the Philippine - The constitution does not require a franchise for
Commission on November 17, 1902; the operation of a public utility. However, it does
the Board of Rate Regulation under Act No. not require a franchise before one can own the
1779 dated October 12, 1907; facilities needed to operate a public utility so long
the Board of Public Utility Commission under as it does not operate them to serve the public.
Act No. 2307 dated December 19, 1913; - In law, there is no clear distinction between the
and the Public Utility Commission under Act operation of public utility and ownership of the
No. 3108 dated March 19, 1923. facilities and equipment used to serve the public.
- During the Commonwealth period, the National The right to operate a public utility may exist
Assembly passed a more comprehensive public independently and separately from the
utility law. This was Commonwealth Act No. 146, ownership of the facilities thereof. One can
as amended or the Public Service Act, as own said facilities without operating them as a
amended. Said law created a regulatory and public utility, or conversely, one may operate a
franchising body known as the Public Service public utility without owning the facilities used to
Commission (PSC). serve the public. The devotion of property to
- The Commission (PSC) existed for thirty-six (36) serve the public may be done by the owner or by
years from 1936 up to 1972. the person in control thereof who may not
- On September 24, 1972, P.D. No. 1 was issued necessarily be the owner thereof.
and declared "part of the law of the land." The
same effected a major revamp of the executive J.G. SUMMIT HOLDINGS INC. VS. COURT OF APPEALS
department. Under Article III, Part X of P.D. No. - The principal determinative characteristic of a
1, the Public Service Commission (PSC) was public utility is that of service to, or readiness to
abolished and replaced by three (3) specialized serve, an indefinite public or portion of the public
regulatory boards: as such which has a legal right to demand and
The Board of Transportation, receive its services or commodities. Stated
the Board of Communications, otherwise, the owner or person in control of a
and the Board of Power and Waterworks. public utility must have devoted it to such use
- The Board of Transportation (BOT) lasted for that the public generally or that part of the public
thirteen (13) years. On March 20, 1985, which has been served and has accepted the
Executive Order No. 1011 was issued abolishing service, has the right to demand that use or
the Board of Transportation and the Bureau of service so long as it is continued, with
Land Transportation. Their powers and functions reasonable efficiency and under proper charges.
were merged into the Land Transportation A shipyard is a public or enclosure where
Commission (LTC). ships are built or repaired. Its nature dictates
- 2 years later, LTC was abolished by Executive that it serves but a limited clientele whom it
Order Nos. 125 dated January 30, 1987 and 125- may choose to serve at its discretion. While it
A dated April 13, 1987 which reorganized the offers its facilities to whoever may wish to avail
Department of Transportation and of its services, a shipyard is not legally
Communications. obliged to render its services
- On June 19, 1987, the Land Transportation indiscriminately to the public.
Franchising and Regulatory Board (LTFRB) was It has no legal obligation to render the services
sought by each and every client. The fact that
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Constitution, it is unconstitutional and may not, business affected with public interest, is a
therefore, be relied upon by petitioner in support different matter. This requires a delegation from
of its opposition against respondent's application Congress.
for CPC and the subsequent grant thereof by the Congress is the repository of emergency
NWRB. powers. This is evident in the tenor of Section
23 (2), Article VI authorizing it to delegate such
Subject to Amendment powers to the President. Certainly, a body
cannot delegate a power not reposed upon it.
RCPI VS. NTC H o w e v e r, k n o w i n g t h a t d u r i n g g r a v e
- Petitioner claims that its franchise cannot be emergencies, it may not be possible or
affected by Executive Order No. 546 on the practicable for Congress to meet and exercise
ground that it has long been in operation since its powers, the Framers of our Constitution
1957 cannot be sustained. deemed it wise to allow Congress to grant
Franchise started out as a royal privilege. emergency powers to the President, subject to
Today, a franchise being merely a privilege certain conditions, thus:
emanating form the sovereign power of the There must be war or other emergency
state and owing its existence to a grant, is The delegation must be for a limited
subject to regulation by the state itself by period only
virtue of its police power thru its administrative The delegations must be subject to such
agencies. restrictions as Congress may prescribe
The emergency powers must be
Fixed-Term exercised to carry out a national policy
declared by Congress
FRANCISCO VS. TOLL REGULATORY BOARD - Sec 17, Article XII must be understood as an
- We are unable to agree. The limiting thrust of the
aspect of the emergency powers clause. The
foregoing constitutional provision on the grant of
taking over of private business affected with
franchise or other forms of authorization to
public interest is just another facet of the
operate public utilities may, in context, be stated
emergency powers generally reposed upon
as follows:
Congress. Thus, when Section 17 states that the
(a) the grant shall be made only in favor of
"the State may, during the emergency and under
qualified Filipino citizens or corporations;
reasonable terms prescribed by it, temporarily
(b) Congress can impair the obligation of
take over or direct the operation of any privately
franchises, as contracts; and
owned public utility or business affected with
(c) no such authorization shall be exclusive or
public interest," it refers to Congress, not the
exceed fifty years.
President.
- There are certain aspects in PNCC's legislative
Now whether the President may exercise such
franchise beyond the altering reach of TRB.
power is dependent on whether Congress may
We refer to the coverage area of the tollways and
delegate it to him.
the expiry date of PNCC's original franchise, - The President cannot decide whether
which is May 1, 2007, as expressly stated under
exceptional circumstances exist warranting the
Sections 1 and 2 of P.D. 1894, respectively.
take over of privately-owned public utility or
The fact that these two items were business affected with public interest. Nor can he
specifically and expressly defined by law
determine when such exceptional circumstances
indicates an intention that any alterations
have ceased. Likewise, without legislation, the
could be only done thru the same medium.
President has no power to point out the types of
businesses affected with public interest that
Take-Over Power should be taken over. In short, the President has
no absolute authority to exercise all the powers
DAVID VS. MACAPAGAL-ARROYO
of the State under Section 17, Article VII in the
- the exercise of emergency powers, such as the
taking over of privately owned public utility or
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absence of an emergency powers act passed by appropriating private property without just
Congress. compensation, nor of limiting or prescribing
irrevocably vested rights or privileges lawfully
AGAIN VS. PIATCO acquired under a charter or franchise.
- Sec 17, Art XII grants the State in times of - However this is not a case where the CAB had
national emergency the right to temporarily take duly exercised its regulatory authority over a
over the operation of any business affected with local airline in order to implement or further
public interest. This right is an exercise of police government air policy. What happened instead
power which is one of the inherent powers of the was an officer of the CAB, acting in behalf not of
State. the Board but of the Philippine government, had
Police Power has been defined as the state committed to a foreign nation the immediate
authority to enact legislation that may interfere abrogation of Philippine Airlines's commercial
with personal liberty or property in order to agreement with Kuwait Airways. And while we do
promote the general welfare. not question that ability of that member of the
It is also settled that public interest on the CAB to represent the Philippine government in
occasion of a national emergency is the signing the CMU, we do question whether such
primary consideration when the government member could have bound Philippine Airlines in a
decides to temporarily take over or direct the manner that can be accorded legal recognition
operation of a public utility or a business by our courts.
affected with public interest. The nature and
extent of the emergency is the measure of the Regulation of Public Utilities
duration of the takeover as well as the terms
thereof. Authority to Operate
- Law clearly obligates the government in the
exercise of its police power to compensate ALBANO VS. REYES
respondent PIATCO and this obligation is - That the Constitution provides in Art XII, Sec 11
offensive to the Constitution. Police power can that the issuance of a franchise, certificate, or
not be diminished, let alone defeated by any other form of authorization for the operation of a
contract for its paramount consideration is public public utility shall be subject to amendment,
welfare and interest. alteration or repeal by Congress does not
necessarily imply, as petitioner posits, that only
Privatization of State Operated Public Congress has the power to grant such
Utilities authorization. Our statute books are replete with
laws granting specified agencies in the Executive
KUWAIT AIRWAYS VS. PAL Branch the power to issue such authorization for
- by the time ownership of Philippine Airlines was certain classes of public utilities.
transferred into private hands, the controverted
"Whereas" clause had taken on a different PLDT VS. NTC
complexion, for it was newly evident that an act - There can be no question that the NTC is the
of the Philippine government negating the regulatory agency of the national government
commercial arrangement between the two with jurisdiction over all telecommunications
airlines would infringe the vested rights of a entities. It is legally clothed with authority and
private individual. given ample discretion to grant a provisional
- As with all regulatory subjects of the government, permit or authority
infringement of property rights can only avail with - It may even grant relief even in the absence of a
due process of law. Legislative regulation of motion. (after the filing of an application)
public utilities must not have the effect of
depriving an owner of his property without due FRANCISCO VS. TOLL REGULATORY BOARD
p r o c e s s o f l a w, n o r o f c o n fi s c a t i n g o r While not determinative of the issue immediately at
appropriating private property without due hand, the grant to and the exercise by an
p r o c e s s o f l a w, n o r o f c o n fi s c a t i n g o r administrative agency of regulating and allowing
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(m) To amend, modify or revoke at any time franchise, either municipal or legislative, is required
certificate issued under the provisions of this Act, by law.
whenever the facts and circumstances on the
strength of which said certificate was issued have Supreme Court does not agree
been misrepresented or materially changed. - Many and varied are the definitions of certificates
of public convenience which courts and legal
CPC vs. CPCN writers have drafted. Some statutes use the
terms "convenience and necessity" while others
use only the words "public convenience." The
PSA, Sec 15. With the exception of those
enumerated in the preceding section, no public terms "convenience and necessity", if used
service shall operate in the Philippines without together in a statute, are usually held not to be
possessing a valid and subsisting certificate from separable, but are construed together.
the Public Service Commission known as both worlds must be construed together. The
"certificate of public convenience," or "certificate of
word 'necessity' is so connected, not as an
public convenience and necessity," as the case
may be, to the effect that the operation of said additional requirement but to modify and
service and the authorization to do business will
promote the public interests in a proper and
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judicial pronouncements. This Court has injury to the petitioner; and (3) the submission of
consistently adopted a 12% rate of return for a bond. Again, whether or not CITRA complied
public utilities. with these requirements is an issue that must
The rate base, on the other hand, is an be addressed to the TRB.
evaluation of the property devoted by the utility - Admin agency may be empowered to approve
to the public service or the value of invested provisionally, when demanded by urgent public
capital or property which the utility is entitled to need, rates of public utilities without a hearing.
a return. The reason is easily discerned from the fact that
- Factual findings of administrative bodies on provisional rates are by their nature temporary
technical matters within their area of expertise and subject to adjustment in conformity with the
should be accorded not only respect but even definitive rates approved after final hearing.
finality if they are supported by substantial
evidence even if not overwhelming or
preponderant. FREEDOM FROM DEBT COALITION VS. ENERGY
REGULATORY COMMISSION
Undue Delegation
new order on rate adjustments:
KMUL LABOR CENTER VS. GARCIA (1) The applicant must file with the ERC a verified
- Sec 16(c) of the public service act provides that
application/petition for rate adjustment. It must
Commission has power UPON PROPER
indicate that a copy thereof was received by the
NOTICE AND HEARING to fix and determine
legislative body of the LGU concerned. It must also
rates.
include a certification of the notice of publication
- IN the case at bar, the authority given by the
thereof in a newspaper of general circulation in the
LTFRB to the provincial bus operators to set a
same locality.
fare range over and above the authorized
existing fare, is illegal and invalid as it is
(2) Within 30 days from receipt of the application/
tantamount to an undue delegation of legislative
petition or the publication thereof, any consumer
authority. Potestas delegata non delegari potest.
affected by the proposed rate adjustment or the
- What has been delegated cannot be delegated.
LGU concerned may file its comment on the
This doctrine is based on the ethical principle
application/petition, as well as on the motion for
that such a delegated power constitutes not only
provisional rate adjustment.
a right but a duty to be performed by the
delegate through the instrumentality of his own
(3) If such comment is filed, the ERC must consider
judgment and not through the intervening mind of
it in its action on the motion for provisional rate
another
adjustment, together with the documents submitted
by the applicant in support of its application/
Provisional Rates
petition. If no such comment is filed within the 30-
day period, then and only then may the ERC
PADUA VS. RANADA
- The question of whether the rates are exorbitant, resolve the motion for provisional rate adjustment
oppressive, onerous, and unconscionable is a on the basis of the documents submitted by the
question of fact requiring knowledge of the applicant.
formula used.
- All that is necessary that a provisional approval (4) However, the ERC need not conduct a hearing
of a toll rate be issued is: (1) a finding that the on the motion for provisional rate adjustment. It is
main petition is sufficient in form and substance; sufficient that it consider the written comment, if
(2) the submission of an affidavit showing that there is any.
the increase in rates substantially conforms to
the formula, if any is stipulated in the (5) The ERC must resolve the motion for
franchise or toll operation agreement, and that provisional rate adjustment within 75 days from the
failure to immediately impose and collect the filing of the application/petition.
increase in rates would result in great irreparable
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(6) Thereafter, the ERC must conduct a full-blown rate-fixing), does not support a finding of a
hearing on the application/petition not later than 30 violation of due process or the Constitution.
days from the date of issuance of the provisional
order and must resolve the application/petition not Area of Operation
later than 12 months from the issuance of the
provisional order. Effectively, this provision limits NAPOCOR VS. COURT OF APPEALS
the lifetime of the provisional order to only 12 - The determination of which of two public utilities
months. has the right to supply electric power to an area
which is within the coverage of both is certainly
Rate Refund not a rate-fixing function which should remain
with the ERB. It deals with the regulation of the
BF HOMES VS. MERALCO distribution of energy resources which, under
- Jurisdiction is conferred only upon the Executive Order No. 172, was expressly a
Constitution or by law. nature of an action and function of ERB. However, with the enactment of
the subject matter thereof, as well as which court Republic Act No. 7638, the Department of
or agency of the government has jurisdiction over Energy took over such function. Hence, it is this
the same, are determined by the material Department which shall then determine whether
allegations of the complaint in relation to the law CEPALCO or PIA should supply power to PIE-
involved and the character of the reliefs prayed MO.
for, whether or not the complainant/plaintiff is - "(i)t is only after a hearing (or an opportunity for
entitled to any or all of such reliefs. such a hearing) where it is established that the
- Careful review of the material allegations of BF affected private franchise holder is incapable or
Homes and PWCC in their Petition before the unwilling to match the reliability and rates of NPC
RTC reveals that the very subject matter thereof that a direct connection with NPC may be
is the off-setting of the amount of refund they are granted.
supposed to receive from MERALCO against the
electric bills they are to pay to the same Approval of Sale and Mortgages of
company. This is squarely within the primary Public Utility Assets or Equity
jurisdiction of the ERC.
stockholders own the shares of stock, they may - The interconnection which has been required of
dispose of the same as they see fit. They may PLDT is a form of "intervention" with property
not, however, transfer or assign the property of a rights dictated by "the objective of government to
corporation, like its franchise. In other words, promote the rapid expansion of
even if the original stockholders had transferred telecommunications services in all areas of the
their shares to another group of shareholders, Philippines, ... to maximize the use of
the franchise granted to the corporation subsists telecommunications facilities available, ... in
as long as the corporation, as an entity, recognition of the vital role of communications in
continues to exist The franchise is not thereby nation building ... and to ensure that all users of
invalidated by the transfer of the shares. A the public telecommunications service have
corporation has a personality separate and access to all other users of the service wherever
distinct from that of each stockholder. It has the they may be within the Philippines at an
right of continuity or perpetual succession acceptable standard of service and at reasonable
cost" (DOTC Circular No. 90-248). Undoubtedly,
Power to Set Fees and Other Charges the encompassing objective is the common
good. The NTC, as the regulatory agency of the
REPUBLIC VS. INTERNATIONAL COMMUNICATIONS State, merely exercised its delegated authority to
CORPORATION regulate the use of telecommunications networks
- there does not even appear to be a conflict when it decreed interconnection.
between Section 40(g) of the Public Service Act,
as amended, and Section 5(g) of R.A. 7925. In BF HOMES VS. MERALCO
fact, the latter provision directs petitioner NTC to Indubitably, the ERC is the regulatory agency of the
continue to impose such fees and charges as government having the authority and supervision
may be necessary to cover reasonable costs and over MERALCO. Thus, the task to approve the
expenses for the regulation and supervision of guidelines, schedules, and details of the refund by
telecommunications entities. The absence alone MERALCO to its consumers, to implement the
of the word authorization in Section 5(g) of R.A. judgment of this Court in the MERALCO Refund
No. 7921 cannot be construed to mean that cases, also falls upon the ERC. By filing their
petitioner NTC had thus been deprived of the Petition before the RTC, BF Homes and PWCC
power to collect such fees. intend to collect their refund without submitting to
- Taken in their entirety, they are the quintessence the approved schedule of the ERC, and in effect,
of the Commission's regulatory functions, and enjoy preferential right over the other equally
must go hand-in-hand with one another. In situated MERALCO consumers.
petitioner's own words, [t]he Commission - ERC may grant provisional relief; may approve
authorizes, supervises and regulates guidelines and schedules and details of refund
telecommunications entities and these
functions... cannot be considered singly without TAXICAB OPERATORS OF METRO MANILA VS. BOARD OF
destroying the whole concept of the TRANSPORTATION
Commission's regulatory functions - Previous notice and hearing as elements of due
process, are constitutionally required for the
Other Means of Regulation protection of life or vested property rights, as well
as of liberty, when its limitation or loss takes
See: PSA Sec 16 and 20. place in consequence of a judicial or quasi-
judicial proceeding, generally dependent upon a
PLDT VS. NTC past act or event which has to be established or
ascertained. It is not essential to the validity of
- In the provisional authority granted by NTC to general rules or regulations promulgated to
ETCi, one of the conditions imposed was that the govern future conduct of a class or persons or
latter and PLDT were to enter into an enterprises, unless the law provides otherwise.
interconnection agreement to be jointly submitted
to NTC for approval.
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and intent for which the Public Service responsibility. Subsequent cases affirm such
Commission was created. basic doctrine.
- In the present case it is at once apparent that the
Kabit System evil sought to be prevented in enjoining the kabit
system does not exist.
TEJA VS. IAC First, neither of the parties to the pernicious
- Unquestionable the parties herein operated kabit system is being held liable for damages.
under an arrangement, commonly known as the Second, the case arose from the negligence of
"kabit system" whereby a person who has been another vehicle in using the public road to
granted a certificate of public convenience allows whom no representation, or misrepresentation,
another person who owns motor vehicles to as regards the ownership and operation of the
operate under such franchise for a fee. A passenger jeepney was made and to whom no
certificate of public convenience is a special such representation, or misrepresentation,
privilege conferred by the government. was necessary.
- Although not outrightly penalized as a criminal - THus, it cannot be said that private
offense, the kabit system is invariably recognized respondent Gonzales and the registered
as being contrary to public policy and, therefore, owner of the jeepney were in estoppel for
void and inexistent under Article 1409 of the Civil leading the public to believe that the
Code. jeepney belonged to the registered owner.
Third, the riding public was not bothered nor
LIM VS. CA inconvenienced at the very least by the illegal
- The kabit system is an arrangement whereby a arrangement. On the contrary, it was private
person who has been granted a certificate of respondent himself who had been wronged
public convenience allows other persons who and was seeking compensation for the
own motor vehicles to operate them under his damage done to him. Certainly, it would be
license, sometimes for a fee or percentage of the the height of inequity to deny him his right.
earnings. - In light of the foregoing, it is evidence that private
Although the parties to such an agreement are respondent has the right to proceed against
not outrightly penalized by law, the kabit petitioners for the damage caused on his
system is invariably recognized as being passenger jeepwney as well as on his business.
contrary to public policy and therefore void Any effort then to frustrate his claim of damages
and inexistent under Art. 1409 of the Civil by the ingenuity with which petitioners framed the
Code. issue should be discouraged, if not repelled.
The kabit system renders illusory such
purpose and, worse, may still be availed of by Public policy loses its force when public at large is
the grantee to escape civil liability caused by a not involved
negligent use of a vehicle owned by another
and operated under his license. If a registered
Private Nature; Rights and Obligations of
owner is allowed to escape liability by proving
Parties inter se arising from transactions
who the supposed owner of the vehicle is, it
relating to transportation.
would be easy for him to transfer the subject
vehicle to another who possesses no property
absent a transportation contract
with which to respond financially for the
damage done.
LARA VS. VALENCIA
Thus, for the safety of passengers and the - It therefore appears that the deceased as well as
public who may have been wronged and his companions who rode in the pick-up of
deceived through the baneful kabit system, the defendant, were merely accommodation
registered owner of the vehicle is not allowed passengers who paid nothing for the service and
to prove that another person has become the so they can be considered as invited guests
owner so that he may be thereby relieved of within the meaning of the law. As accommodation
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passengers or invited guests, defendant as operation, including the negligence of the driver,
owner and driver of the pick-up owes to them with respect to the public and all third persons
merely the duty to exercise reasonable care so In contemplation of law, the registered owner
that they may be transported safely to their of a motor vehicle is the employer of its driver,
destination. with the actual operator and employer, such as
- Thus "The rule is established by the weight of a lessee, being considered as merely the
authority that the owner or operator of an owner's agent.
automobile owes the duty to an invited guest to This being the case, even if a sale has been
exercise reasonable care in its operation, and not executed before a tortious incident, the sale, if
unreasonably to expose him to danger and injury unregistered, has no effect as to the right of
by increasing the hazard of travel. This rule, as the public and third persons to recover from
frequently stated by the courts, is that an owner the registered owner.
of an automobile owes a guest the duty to The public has the right to conclusively
exercise ordinary or reasonable care to avoid presume that the registered owner is the real
injuring him. Since one riding in an automobile is owner, and may sue accordingly.
no less a guest because he asked for the - a sale, lease, or financial lease, for that matter,
privilege of doing so, the same obligation of care that is not registered with the Land
is imposed upon the driver as in the case of one Transportation Office, still does not bind third
expressly invited to ride persons who are aggrieved in tortious incidents,
Liability of Registered Owner for the latter need only to rely on the public
registration of a motor vehicle as conclusive
PCI LEASING VS. UCPB GENERAL INSURANCE evidence of ownership.
- In synthesis, we hold that the registered owner,
the defendant-appellant herein, is primarily Regulation of the Transportation Industry
responsible for the damage caused to the vehicle
of the plaintiff-appellee, but he (defendant-
EO 292, Book 4, Title XV (Transportation &
appellant) has a right to be indemnified by the
Communication)
real or actual owner of the amount that he may SEC 1. Declaration of Policy.The State is
be required to pay as damage for the injury committed to the maintenance and expansion of
caused to the plaintiff-appellant. viable, efficient, fast, safe and dependable
- For damage or injuries arising out of negligence transportation and communications systems as
effective instruments for national recovery and
in the operation of a motor vehicle, the registered
economic progress. It shall not compete as a
owner may be held civilly liable with the negligent matter of policy with private enterprise and shall
driver either 1) subsidiarily, if the aggrieved party operate transportation and communications
seeks relief based on a delict or crime under facilities only in those areas where private
Articles 100 and 103 of the Revised Penal Code; initiatives are inadequate or non-existent.
S E C 2 . M a n d a t e . T h e D e p a r t m e n t o f
or 2) solidarily, if the complainant seeks relief
Transportation and Communications shall be the
based on a quasi-delict under Articles 2176 and p r i m a r y p o l i c y, p l a n n i n g , p ro g r a m m i n g ,
2180 of the Civil Code. It is the option of the coordinating, implementing, regulating and
plaintiff whether to waive completely the filing of administrative entity of the Executive Branch of the
the civil action, or institute it with the criminal government in the promotion, development and
regulation of dependable and coordinated
action, or file it separately or independently of a
networks of transportation and communications
criminal action; his only limitation is that he systems as well as in the fast, safe, efficient and
reliable postal, transportation and communications
cannot recover damages twice for the same act services.
or omission of the defendant. SEC 3.Powers and Functions.To accomplish its
- In case a separate civil action is filed, the long- mandate, the Department shall:
standing principle is that the registered owner of (1) Formulate and recommend national policies
a n d g u i d e l i n e s f o r t h e p re p a r a t i o n a n d
a motor vehicle is primarily and directly
implementation of integrated and comprehensive
responsible for the consequences of its transportation and communications systems at the
national, regional and local levels;
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(2) Establish and administer comprehensive and (14) Establish and prescribe the corresponding
integrated programs for transportation and rules and regulations for enforcement of laws
communications, and for this purpose, it may call governing land transportation, air transportation
on any agency, corporation or organization, and postal services, including the penalties for
whether public or private, whose development violations thereof, and for the deputation of
programs include transportation and appropriate law enforcement agencies in
communications as integral parts thereof, to pursuance thereof;
participate and assist in the preparation and (15) Determine, fix or prescribe charges or rates
implementation of such programs; pertinent to postal services and to the operation of
(3) Assess, review and provide direction to public air and land transportation utility facilities
transportation and communications research and and services, except such rates or charges as
development programs of the government in may be prescribed by the Civil Aeronautics Board
coordination with other institutions concerned; under its charter and, in cases where charges or
(4) Administer and enforce all laws, rules and rates are established by international bodies or
regulations in the field of transportation and associations of which the Philippines is a
communications; participating member or by bodies or associations
(5) Coordinate with the Department of Public recognized by the Philippine government as the
Works and Highways in the design, location, proper arbiter of such charges or rates;
development, rehabilitation, improvement, (16) Establish and prescribe the rules, regulations,
construction, maintenance and repair of all procedures and standards for the accreditation of
infrastructure projects and facilities of the driving schools;
Department. However, government corporate (17) Administer and operate the Civil Aviation
entities attached to the Department shall be Training Center (CATC) and the National
authorized to undertake specialized Telecommunications Training Institute (NTTI); and
telecommunications, ports, airports and railways (18) Perform such other powers and functions as
projects and facilities as directed by the President may be provided by law.
of the Philippines or as provided by law;
(6) Establish, operate and maintain a nationwide SEC 4.Organizational Structure.The Department
postal system that shall include mail processing, shall consist of the Department Proper, the
delivery services and money order services and D e p a r t m e n t R e g i o n a l O f fi c e s , t h e L a n d
promote the art of philately; Transportation Franchising and Regulatory Board,
(7) Issue certificates of public convenience for the and the Attached Agencies.
operation of public land and rail transportation
utilities and services;
(8) Accredit foreign aircraft manufacturers or MIRASOL VS. DPWH
international organizations for aircraft certification - Clearly, under EO 546, it is the DOTC, not the
in accordance with established procedures and DPWH, which has authority to regulate, restrict,
standards; or prohibit access to limited access facilities.
(9) Establish and prescribe rules and regulations - Thus, DO 74 and DO 215 are void because the
for identification of routes, zones or areas of
DPWH has no authority to declare certain
operation of particular operators of public land
services; expressways as limited access facilities. Under
(10) Establish and prescribe rules and regulations the law, it is the DOTC which is authorized to
for the establishment, operation and maintenance administer and enforce all laws, rules and
of such telecommunications facilities in areas not regulations in the field of transportation and to
adequately served by the private sector in order to
regulate related activities.
render such domestic and overseas services that
are necessary with due consideration for advances Since, the DPWH has no authority to regulate
in technology; activities relative to transportation, the TRB
(11) Establish and prescribe rules and regulations cannot derive its power from the DPWH to
for the issuance of certificates of public issue regulations governing limited access
convenience for public land transportation utilities,
facilities. The DPWH cannot delegate a power
such as motor vehicles, trimobiles and railways;
(12) Establish and prescribe rules and regulations or function which it does not possess in the
for the inspection and registration of air and land first place.
transportation facilities, such as motor vehicles, Since DO 74 and DO 215 are void, it follows
trimobiles, railways and aircraft; that the rules implementing them are likewise
(13) Establish and prescribe rules and regulations
void.
for the issuance of licenses to qualified motor
vehicle drivers, conductors and airmen;
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Government, on a reimbursable basis when (k) Impose and fix reasonable charges and fees for
appropriate and, on a similar basis, to co-operate the use of government aerodromes or air
with those agencies in the establishment and use navigation facilities; for services rendered by the
of services, equipment and facilities of the Authority in the rating of any aerodrome or air
Authority; navigation facilities, civil aviation schools and
(h) Use the property of the Authority in such a instructors, aircraft repair stations, and aircraft radio
manner as may appear to the Authority to be and aeronautical telecommunications stations;
requisite, advantageous or convenient with a view (l) Fix the reasonable charges to be imposed in the
to making the best use of any of the property of the use of privately-owned air navigation facilities and
Authority in relation to its functions under this Act; aerodromes;
(i) Invest such of the Authority's funds that are not (m) Adopt a system for the registration of aircraft as
immediately required for operating expenses, or hereinafter provided;
other immediate obligations in any business (n) Determine and fix, landing fees, parking space
venture the Board may deem appropriate, or in fees, royalties on sales or deliveries, direct or
such secured note, government securities, and indirect, to any aircraft for its use of aviation
other negotiable instruments that satisfy the gasoline, oil and lubricants, spare parts,
guidelines prescribed by the Board. Funds of the accessories and supplies, tools, other royalties,
Authority shall be deposited in such commercial fees or rentals for the use of any of the property
and universal banks as the Board may determine, under its management and control;
subject to the requirements of existing laws. The (o) Approve the annual and supplementary budget
Board shall designate the officials authorized to plan and utilization of retained revenue;
deposit in or withdraw funds from such depository (p) Exercise the corporate powers granted to the
banks; Authority;
(j) Promulgate rules and regulations as may be (q) Upon its own initiative or the recommendation of
necessary in the interest of safety in air commerce the Director General or an application of a private
pertaining to the issuance of the airman's certificate person, grant exemption from the requirements of
including the licensing of operating and mechanical observing rules or regulations issued in accordance
personnel, type certificate for aircraft, aircraft with this Act: Provided, That said grant of
engines, propellers and appliances, airworthiness exemption is not prejudicial to flight safety;
certificates, air carrier operating certificates, air (r) Formulate rules and regulations concerning
agency certificates, navigation facility and compliance of the carrier and the public for the safe
aerodrome certificates; air traffic routes; radio and transport of goods and materials by air pursuant to
aeronautical telecommunications and air navigation international standards or Annexes to the Chicago
aids; aircraft accident inquiries; aerodromes, both Convention; and
public and private-owned; construction of (s) In coordination with the appropriate government
obstructions to aerodromes; height of buildings; agency tasked to provide airport security, shall:
antennae and other edifices; registration of (1) Prescribe reasonable regulation requiring that
aircrafts; search and rescue; facilitation of air all passengers and all property intended to be
transports; operations of aircrafts, both for domestic carried in the aircraft cabin in commercial air
and international, including scheduled and non- transport be screened by weapon-detecting
scheduled; meteorology in relation to civil aviation; procedure or facilities employed or operated by
rules of the air; air traffic services; rules for employees or agents of the air operator or foreign
prevention of collision of aircrafts, identification of air operator prior to boarding the aircraft for such
aircraft; rules for safe altitudes of flight; and such transportation;
other rules and regulations, standards, governing (2) Prescribe such other reasonable rules and
other practices, methods and/or procedures as the regulations requiring such parties, methods and
Director General may find necessary and procedures as the Director General may find
appropriate to provide adequately for safety necessary to protect persons and property aboard
regularity and efficiency in air commerce and air aircraft operating in commercial air transport
navigation; against acts of criminal violence and aircraft piracy;
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(b) The encouragement and development of an air with those agencies in the establishment and use
transportation system properly adapted to the of services, equipment and facilities of the
present and future of foreign and domestic Authority;
commerce of the Philippines; (h) Use the property of the Authority in such a
(c) The regulation of air transportation in such manner as may appear to the Authority to be
manner as to support sound economic condition in requisite, advantageous or convenient with a view
such transportation and to improve the relations to making the best use of any of the property of the
between air carriers; Authority in relation to its functions under this Act;
(d) Ensuring the safety, quality, reliability, and (i) Invest such of the Authority's funds that are not
affordability of air transport services for the riding immediately required for operating expenses, or
public; and other immediate obligations in any business
(e) The encouragement and development of a venture the Board may deem appropriate, or in
viable and globally competitive Philippine aviation such secured note, government securities, and
industry. other negotiable instruments that satisfy the
SEC. 24.Powers of the Board.- The Board shall guidelines prescribed by the Board. Funds of the
have the following general powers: Authority shall be deposited in such commercial
(a) Provide comprehensive policy guidance for the and universal banks as the Board may determine,
promotion and development of the Philippine subject to the requirements of existing laws. The
aviation industry, as provided for in this Act; Board shall designate the officials authorized to
(b) Ensure that the Authority performs its functions deposit in or withdraw funds from such depository
in a proper, efficient and effective manner; banks;
(c) Decide the objectives, strategies and policies of (j) Promulgate rules and regulations as may be
the Authority in accordance with the provisions of necessary in the interest of safety in air commerce
this Act; pertaining to the issuance of the airman's certificate
(d) Determine the organizational structure of the including the licensing of operating and mechanical
Authority in accordance with the provisions of this personnel, type certificate for aircraft, aircraft
Act, establish a human resources management engines, propellers and appliances, airworthiness
system based on merit and fitness, and adopt a certificates, air carrier operating certificates, air
rational compensation and benefits scheme; agency certificates, navigation facility and
(e) Exercise appellate powers on any decisions, aerodrome certificates; air traffic routes; radio and
findings and rulings of the Director General, to aeronautical telecommunications and air navigation
issuesubpoena ad testificandum or subpoena aids; aircraft accident inquiries; aerodromes, both
duces tecum requiring the attendance and public and private-owned; construction of
testimony of witnesses in any matter or inquiry obstructions to aerodromes; height of buildings;
pending before the Board and require the antennae and other edifices; registration of
production of books, papers, contracts, agreements aircrafts; search and rescue; facilitation of air
and all other documents submitted for purposes of transports; operations of aircrafts, both for domestic
this section to be under oath and verified by the and international, including scheduled and non-
person in custody thereof as to the truth and scheduled; meteorology in relation to civil aviation;
correctness of data appearing in such books, rules of the air; air traffic services; rules for
papers, tariffs, contracts, agreements and all other prevention of collision of aircrafts, identification of
documents; aircraft; rules for safe altitudes of flight; and such
(f) Exercise appellate powers to order the taking of other rules and regulations, standards, governing
depositions in any proceeding, or investigation, other practices, methods and/or procedures as the
pending before the Board at any stage of such Director General may find necessary and
proceeding or investigation; appropriate to provide adequately for safety
(g) Use available services, equipment, personnel regularity and efficiency in air commerce and air
and facilities of other agencies of the Philippine navigation;
Government, on a reimbursable basis when (k) Impose and fix reasonable charges and fees for
appropriate and, on a similar basis, to co-operate the use of government aerodromes or air
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
navigation facilities; for services rendered by the (3) To the extent practicable, require uniform
Authority in the rating of any aerodrome or air procedures for the inspection, detention, and
navigation facilities, civil aviation schools and search of persons and property in domestic
instructors, aircraft repair stations, and aircraft radio commercial air transport and international
and aeronautical telecommunications stations; commercial air transport to assure their safety and
(l) Fix the reasonable charges to be imposed in the to assure that they will receive courteous and
use of privately-owned air navigation facilities and efficient treatment by air operators and their agents
aerodromes; and employees.
(m) Adopt a system for the registration of aircraft as SEC. 35. Powers and Functions of the Director
hereinafter provided; General. - The Director General shall be the chief
(n) Determine and fix, landing fees, parking space executive and operating officer of the Authority. He
fees, royalties on sales or deliveries, direct or shall have the following powers, duties and
indirect, to any aircraft for its use of aviation responsibilities:
gasoline, oil and lubricants, spare parts, (a) To carry out the purposes and policies
accessories and supplies, tools, other royalties, established in this Act; to enforce the provisions of
fees or rentals for the use of any of the property the rules and regulations issued in pursuance to
under its management and control; said Act; and he shall primarily be vested with
(o) Approve the annual and supplementary budget authority to take charge of the technical and
plan and utilization of retained revenue; operational phase of civil aviation matters;
(p) Exercise the corporate powers granted to the (b) To designate and establish civil airways, to
Authority; acquire, control, operate and maintain along such
(q) Upon its own initiative or the recommendation of airways, navigation facilities and to chart such
the Director General or an application of a private airways and arrange for their publication including
person, grant exemption from the requirements of the aeronautical charts or maps required by the
observing rules or regulations issued in accordance international aeronautical agencies, by utilizing the
with this Act: Provided, That said grant of equipment, supplies or assistance of existing
exemption is not prejudicial to flight safety; agencies of the government as far as practicable;
(r) Formulate rules and regulations concerning (c) To issue airman's certificate specifying the
compliance of the carrier and the public for the safe capacity in which the holder thereof is authorized to
transport of goods and materials by air pursuant to serve as airman in connection with aircraft and
international standards or Annexes to the Chicago shall be issued only upon the finding that the
Convention; and applicant is properly qualified and physically able to
(s) In coordination with the appropriate government perform the duties of the position. The certificate
agency tasked to provide airport security, shall: shall contain such terms, conditions and limitations
(1) Prescribe reasonable regulation requiring that as the Director General may determine to be
all passengers and all property intended to be necessary to assure safety in air
carried in the aircraft cabin in commercial air commerce: Provided, however, That the airman's
transport be screened by weapon-detecting license shall be issued only to qualified persons
procedure or facilities employed or operated by who are citizens of the Philippines or qualified
employees or agents of the air operator or foreign citizens of countries granting similar rights and
air operator prior to boarding the aircraft for such privileges to citizens of the Philippines;
transportation; (d) To issue airworthiness certificate for aircraft
(2) Prescribe such other reasonable rules and which shall prescribe the duration of such
regulations requiring such parties, methods and certificate, the type of service for which the aircraft
procedures as the Director General may find may be used, and such other terms and conditions
necessary to protect persons and property aboard and limitations as are required;
aircraft operating in commercial air transport (e) To issue air carrier operating certificate in
against acts of criminal violence and aircraft piracy; accordance with the minimum safety standards for
and the operation of the air carrier to whom such
certificate is issued. The air carrier operating
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certificate shall be issued only to aircrafts aircraft engines, propellers and appliances, and
registered under the provisions of this Act; airmen as provided in this Act;
(f) To issue type certificate for aircraft, aircraft (n) To impose fines and/or civil penalties in respect
engine, propellers and appliances; thereto;
(g) To inspect, classify and rate any air navigation (o) To participate actively with the largest possible
facilities and aerodromes available for the use of degree in the development of international
aircraft as to its suitability for such use and to issue standardization of practices in aviation matters
a certificate for such air navigation facility and important to safe, expeditious, and easy navigation,
aerodrome; and to determine the suitability of and to implement as far as practicable the
foreign aerodromes, air navigation facilities as well international standards, recommended practices
as air routes to be used prior to the operation of and policies adopted by appropriate international
Philippine-registered aircraft in foreign air aeronautical agencies;
transportation and from time to time thereafter as (p) To exercise and perform its powers and duties
may be required in the interest of safety in air under this Act consistent with any obligation
commerce; assumed by the Republic of the Philippines in any
(h) To issue certificates of persons or civil aviation treaty, convention or agreement on civil aviation
schools giving instruction in flying, repair stations, matters;
and other air agencies and provide for the (q) To cooperate, assist and coordinate with any
examination and rating thereof; research and technical agency of the government
(i) To provide for the enforcement of the rules and on matters relating to research and technical
regulations issued under the provisions of this Act studies on design, materials, workmanship,
and to conduct investigation for violations thereto. construction, performance, maintenance and
In undertaking such investigation, to require operation of aircraft, aircraft engines, propellers,
by subpoena ad testificandum or subpoena duces appliances, and air navigation facilities including
tecum, the attendance and testimony of witnesses, aircraft fuel and oil: Provided, That nothing in this
the production of books, papers, documents, Act shall be construed to authorize the duplication
exhibits matter, evidence, or the taking of of the laboratory research, activities or technical
depositions before any person authorized to studies of any existing governmental agency;
administer oath. Refusal to submit the reasonable (r) To designate such prohibited and danger areas,
requirements of the investigation committee shall in consonance with the requirements of the
be punishable in accordance with the provisions of international aeronautical agencies and national
this Act; security;
(j) To collect and disseminate information relative to (s) To issue, deny, suspend, cancel or revoke any
civil aeronautics and the development of air certificate, license pertaining to aircraft, airmen and
commerce and the aeronautical industry; to air agencies: Provided, That any order denying,
exchange with foreign governments, information suspending, cancelling, revoking the certificate or
pertaining to civil aeronautics; and to provide for license may he appealed to the Board, whose
direct communication on all matters relating to the decisions shall he final within fifteen (15) days from
technical or operational phase of aeronautics with the date of notification of such denial, cancellation
international aeronautical agencies: or revocation;
(k) To acquire and operate such aircraft as may be (t) To grant authorization to civil aircraft or persons
necessary to execute the duties and functions of to carry instruments or photographic devices to be
the Authority prescribed in this Act; used for aerial photography or taking of pictures by
(l) To plan, design, acquire, establish, construct, photograph or sketching of any part of the
operate, improve, maintain, and repair necessary Philippines; and
aerodromes and other air navigation facilities; (u) Pursuant to a board resolution, to enter into,
(m) To collect and receive charges and fees for the make and execute contracts of any kind with any
registration of aircraft and for the issuance and/or person, firm, or public or private corporation.
renewal of licenses or certificates for aircraft,
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Land
L a n d Tr a n s p o r t a t i o n F r a n c h i s i n g a n d
Regulatory Board (LTFRB)
- Exercises quasi-judical and regulatory powers
with respect to land-transportation; among its
more important powers include the power to
issue, amend and revise CPCs; prescribe routes
and reasonable fare rates.
Notes:
DOTC has control and supervision over land
agencies, which isnt the case in air agencies. This
is because land transportation is more sensitive
and requires more care and caution.
Water
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rather than the quantity or extent of the business FIRST PHILIPPINE INDUSTRIAL CORPORATION
transacted. Pipeline was ruled to be a common carrier. The test
for determining whether a party is a common
PLANTERS PRODUCTS INC VS. CA carrier of goods is:
- It is therefore imperative that a public carrier shall (1) He must be engaged in the business of carrying
remain as such, notwithstanding the charter of goods for others as a public employment, and
the whole or portion of a vessel by one or more must hold himself out as ready to engage in the
persons, provided the charter is limited to the transportation of goods for person generally as
ship only, as in the case of a time-charter or a business and not as a casual occupation;
voyage-charter. (2) He must undertake to carry goods of the kind to
It is only when the charter includes both the which his business is confined;
vessel and its crew, as in a bareboat or (3) He must undertake to carry by the method by
demise that a common carrier becomes which his business is conducted and over his
private, at least insofar as the particular established roads;
voyage covering the charter-party is (4) The transportation must be for hire
concerned. - B a s e d o n t h e a b o v e d e fi n i t i o n s a n d
A shipowner in a time or voyage charter requirements, there is no doubt that petitioner is
retains possession and control of the ship, a common carrier. It is engaged in the business
although her holds may, for the moment, be of transporting or carrying goods, i.e. petroleum
the property of the charterer. products, for hire as a public employment. It
undertakes to carry for all persons indifferently,
(contract of affreightment > remains to be a that is, to all persons who choose to employ its
common carrier) services, and transports the goods by land and
for compensation. The fact that petitioner has a
FABRE VS. COURT OF APPEALS limited clientele does not exclude it from the
Minibus originally meant to bring children to school, definition of a common carrier.
were rented out to a church group.
- The case actually involves a contract of carriage. LOADSTAR SHIPPING CO. INC VS. COURT OF APPEALS
Petitioners, the Fabres, did not have to be - LOADSTAR submits that the vessel was a
engaged in the business of public transportation private carrier because it was not issued a
for the provisions of the Civil Code on common certificate of public convenience, it did not have a
carriers to apply to them. regular trip or schedule nor a fixed route, and
Art 1732 makes no distinction between one there was only one shipper, one consignee for a
whose principal business activity is the special cargo.
carrying of persons or goods or both, and one - MIC argues that the issue as to the classification
who does such carrying only as an ancillary of the M/V Cherokee was not timely raised
activity (in local idiom, as "a sideline"). Article below; hence, it is barred by estoppel. While it is
1732 also carefully avoids making any true that the vessel had on board only the cargo
distinction between a person or enterprise of wood products for delivery to one consignee, it
offering transportation service on a regular or was also carrying passengers as part of its
scheduled basis and one offering such service regular business.
on an occasional, episodic or unscheduled - Further, the bare fact that the vessel was
basis. Neither does Article 1732 distinguish carrying a particular type of cargo for one
between a carrier offering its services to the shipper, which appears to be purely coincidental,
"general public," i.e., the general community or is not reason enough to convert the vessel from
population, and one who offers services or a common to a private carrier, especially where,
solicits business only from a narrow segment as in this case, it was shown that the vessel was
of the general population. We think that Article also carrying passengers.
1732 deliberately refrained from making such
distinctions.
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loss or damage of the goods in question to any prove that the typhoon is the proximate and only
fault, carelessness, or negligence on the part of cause of the loss of the goods, and that it has
the defendant company and its agents and, exercised due diligence before, during and after the
especially, the patron of the lorcha Pilar. occurrence of the typhoon to prevent or minimize
the loss
MARTINI VS. MACONDRAY - The evidence shows that even before the towing
- The foregoing authorities fully sustain the bits of the barge broke, it had previously
proposition that where the shipper consents to sustained damage when it hit a sunken object
have his goods carried on deck he takes the while docked at Engineering Island. It even
risks of any damage or loss sustained as a suffered a hole. Clearly, this could not be solely
consequence of their being so carried. attributed to the typhoon. The partly-submerged
In the present case, it is indisputable that the vessel was refloated but its hole was patched
goods were injured during the voyage and with only clay and cement. The patch work was
solely as a consequence of their being on merely a provisional remedy, not enough for the
deck, instead of in the ship's hold. The loss barge to sail safely. Thus, when petitioner
must therefore fall on the owner. And this persisted to proceed with the voyage, it
would be true, under the authorities, even recklessly exposed the cargo to further damage.
though paragraph 19 of the bills of lading,
quoted near the beginning of this opinion, had Act of Public Enemy
not been made a term of the contract.
EASTERN SHIPPING VS. IAC Art 1734. Common carriers are responsible for the
- Plainly the heavy seas and rains referred to in loss, destruction, or deterioration of the goods,
unless the same is due to any of the following
the master's report were not caso fortuito, but causes only:
normal occurrences that an ocean-going vessel, xxx
particularly in the month of September which, in (2) Act of the public enemy in war, whether
our area, is a month of rains and heavy seas international or civil;
would encounter as a matter of routine. They are
Art 1739. In order that the common carrier may be
not unforeseen nor unforeseeable. exempted from responsibility, the natural disaster
These are conditions that ocean-going vessels must have been the proximate and only cause of
would encounter and provide for, in the the loss. However, the common carrier must
ordinary course of a voyage. exercise due diligence to prevent or minimize loss
before, during and after the occurrence of flood,
Since the carrier has failed to establish any
storm or other natural disaster in order that the
caso fortuito, the presumption by law of fault common carrier may be exempted from liability for
or negligence on the part of the carrier applies; the loss, destruction, or deterioration of the goods.
and the carrier must present evidence that it The same duty is incumbent upon the common
has observed the extraordinary diligence carrier in case of an act of the public enemy
required by Article 1733 of the Civil Code in referred to in article 1734, No. 2.
order to escape liability for damage or
destruction to the goods that it had admittedly Act or Omission of the shipper
carried in this case. No such evidence exists
of record. Thus, the carrier cannot escape
Art 1734. Common carriers are responsible for the
liability
loss, destruction, or deterioration of the goods,
unless the same is due to any of the following
ASIA LIGHTERAGE VS. CA causes only:
xxx
In the case at bar, the barge completely sank after (3) Act or omission of the shipper or owner of the
its towing bits broke, resulting in the total loss of its goods;
cargo. Petitioner claims that this was caused by a
typhoon, hence, it should not be held liable for the Art 1741. If the shipper or owner merely
contributed to the loss, destruction or deterioration
loss of the cargo. However, petitioner failed to
of the goods, the proximate cause thereof being
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Article 1751. The fact that the common carrier has freely agreed upon.
no competitor along the line or route, or a part The requirements provided in Article 1750 of
thereof, to which the contract refers shall be taken the New Civil Code must be complied with
into consideration on the question of whether or before a common carrier can claim a limitation
not a stipulation limiting the common carrier's
of its pecuniary liability in case of loss,
liability is reasonable, just and in consonance with
public policy. destruction or deterioration of the goods it has
undertaken to transport. In the case before us
We believe that the requirements of said
As to amount liability article have not been met.
The fact that those conditions are printed at
Article 1749. A stipulation that the common the back of the ticket stub in letters so small
carrier's liability is limited to the value of the goods that they are hard to read would not warrant
appearing in the bill of lading, unless the shipper the presumption that the appellee was aware
or owner declares a greater value, is binding.
of those conditions such that he had "fairly
and freely agreed" to those conditions.
Article 1750. A contract fixing the sum that may be
recovered. by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if ONG YIU VS. CA
it is reasonable and just under the circumstances, - While it may be true, that petitioner had not
and has been fairly and freely agreed upon. signed the plane ticket (Exh. "12"), he is
nevertheless bound by the provisions thereof.
HEACOCK VS. MACONDRAY "Such provisions have been held to be a part of
the contract of carriage, and valid and binding
May a common carrier, by stipulations inserted in upon the passenger regardless of the latter's lack
the bill of lading, limit its liability for the loss of or of knowledge or assent to the regulation". It is
damage to the cargo to an agreed valuation of the what is known as a contract of "adhesion", in
latter? regards which it has been said that contracts of
- Three kinds of stipulations have often been made adhesion wherein one party imposes a ready
in a bill of lading. made form of contract on the other, as the plane
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ticket in the case at bar, are contracts not entirely goods were expected to arrive as indicated in the
prohibited. bill of lading itself.
- The one who adheres to the contract is in reality In this regard, there arises no need to execute
free to reject it entirely, if he adheres, he gives another contract for the purpose as it would be
his consent. a mere superfluity.
- In the case before us, we find that a delay in the
delivery of the goods spanning a period of two
(2) months and seven (7) days falls way beyond
PAN AM VS. IAC the realm of reasonableness.
- The ruling in Shewaram v. Philippine Air Lines, - In this case, the provision limiting liability as to
Inc. [G.R. No. L-20099, July 2, 1966, 17 SCRA delay in delivery practical left the date of arrival
606], where the Court held that the stipulation on sole determination and will of the carrier.
limiting the carrier's liability to a specified amount
was invalid, finds no application in the instant Factors affecting agreement
case, as the ruling in said case was premised on
the finding that the conditions printed at the back
Article 1746. An agreement limiting the common
of the ticket were so small and hard to read that
carrier's liability may be annulled by the shipper or
they would not warrant the presumption that the owner if the common carrier refused to carry the
passenger was aware of the conditions and that goods unless the former agreed to such
he had freely and fairly agreed thereto. In the stipulation.
instant case, similar facts that would make the Article 1747. If the common carrier, without just
case fall under the exception have not been cause, delays the transportation of the goods or
changes the stipulated or usual route, the contract
alleged, much less shown to exist.
limiting the common carrier's liability cannot be
availed of in case of the loss, destruction, or
CATHAY PACIFIC VS CA deterioration of the goods.
- Although the Warsaw Convention has the force
and effect of law in this country, being a treaty Article 1748. An agreement limiting the common
commitment assumed by the Philippine carrier's liability for delay on account of strikes or
government, said convention does not operate riots is valid
as an exclusive enumeration of the instances for
Article 1751. The fact that the common carrier has
declaring a carrier liable for breach of contract of
no competitor along the line or route, or a part
carriage or as an absolute limit of the extent of thereof, to which the contract refers shall be taken
that liability. into consideration on the question of whether or
- The Warsaw Convention declares the carrier not a stipulation limiting the common carrier's
liable for damages in the enumerated cases and liability is reasonable, just and in consonance with
public policy.
under certain limitations. However, it must not be
Article 1752. Even when there is an agreement
construed to preclude the operation of the Civil
limiting the liability of the common carrier in the
Code and other pertinent laws. It does not vigilance over the goods, the common carrier is
regulate, much less exempt the carrier from disputably presumed to have been negligent in
liability for damages for violating the rights of its case of their loss, destruction or deterioration.
passengers under contract of carriage, especially
if willful misconduct on the part of the carriers Applicable Law in Foreign Trade
employees is found or established.
Article 2002. The hotel-keeper is not liable for that it exercised extraordinary diligence; and
compensation if the loss is due to the acts of the (4) the carrier is not an insurer against all
guest, his family, servants or visitors, or if the loss risks of travel.
arises from the character of the things brought into
the hotel. (n) LANDINGIN VS. PANTRANCO
Article 2003. The hotel-keeper cannot free himself - as a common carrier, defendant PANTRANCO
from responsibility by posting notices to the effect
was duty bound to carry its passengers "safely
that he is not liable for the articles brought by the
guest. Any stipulation between the hotel-keeper as far as human care and foresight can provide,
and the guest whereby the responsibility of the using the utmost diligence of very cautious
former as set forth in articles 1998 to 2001 is persons, with a due regard for all the
suppressed or diminished shall be void circumstances
- When a passenger dies or is injured, the
Common Carriage of Passengers presumption is that the common carrier's is at
fault or that it acted negligently (Article 1756).
Nature and Extent of Responsibility This presumption is only rebutted by proof on t
e carrier's part that it observed the
"extraordinary diligence" required in Article
Article 1733. Common carriers, from the nature of 1733 and the "utmost diligence of very
their business and for reasons of public policy, are
bound to observe extraordinary diligence in the cautious persons" required in Article 1755
vigilance over the goods and for the safety of the
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That reasonableness of time should be made bus by passengers Beter and Rautraut causing
to depend on the attending circumstances of them fatal injuries. The sudden act of the
the case, such as the kind of common carrier, passenger who stabbed another passenger in the
the nature of its business, the customs of the bus is within the context of force majeure.
place, and so forth, and therefore precludes a - However, in order that a common carrier may be
consideration of the time element per se absolved from liability in case of force majeure, it
without taking into account such other factors. is not enough that the accident was caused by
force majeure. The common carrier must still
prove that it was not negligent in causing the
PAL VS. CA injuries resulting from such accident.
- Undisputedly, PAL'S diversion of its flight due to
inclement weather was a fortuitous event. YOBIDO VS. CA
Nonetheless, such occurrence did not - To our mind the explosion of the tire is not in
terminate PAL's contract with its passengers. itself a fortuitous event. The cause of the blow-
Being in the business of air carriage and the out, if due to a factory defect, improper mounting,
sole one to operate in the country, PAL is excessive tire pressure, is not an unavoidable
deemed equipped to deal with situations as in event. On the other hand, there may have been
the case at bar. adverse conditions on the road that were
What we said in once case once again must unforeseeable and/or inevitable, which could
be stressed, the relation of the carrier and make the blow-out a caso fortuito.
passenger continues until the latter has been - The fact that the cause of the blow-out was not
landed at the port of destination and has left known does not relieve the carrier of liability.
the carrier's premises Owing to the statutory presumption of negligence
Hence, PAL necessarily would still have to against the carrier and its obligation to exercise
exercise extraordinary diligence in the utmost diligence of very cautious persons to
safeguarding the comfort, convenience and carry the passenger safely as far as human care
safety of its stranded passengers until they and foresight can provide, it is the burden of the
have reached their final destination. On this defendants to prove that the cause of the blow-
score, PAL grossly failed considering the then out was a fortuitous event. It is not incumbent
ongoing battle between government forces upon the plaintiff to prove that the cause of the
and Muslim rebels in Cotabato City and the blow-out is not caso-fortuito.
fact that the private respondent was a stranger - Proving that the tire that exploded is a new
to the place. Goodyear tire is not sufficient to discharge
defendants burden. As enunciated in Necesito
Presumption of Negligence vs. Paras, the passenger has neither choice nor
control over the carrier in the selection and use
of its equipment, and the good repute of the
Art 1756. In case of death of or injuries to
manufacturer will not necessarily relieve the
passengers, common carriers are presumed to
have been at fault or to have acted negligently, carrier from liability.
unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755. Limitation of Liability
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(2) said liability of the carrier for the servant's to a passenger does not accord the latter a
violation of duty to passengers, is the result of cause of action against the carrier.
the former's confiding in the servant's hands
the performance of his contract to safely trans- BACHELOR EXPRESS INC VS. CA
port the passenger, delegating therewith the - the bus driver did not immediately stop the bus at
duty of protecting the passenger with the the height of the commotion; the bus was
utmost care prescribed by law; and speeding from a full stop; the victims fell from the
(3) as between the carrier and the passenger, bus door when it was opened or gave way while
the former must bear the risk of wrongful acts the bus was still running; the conductor panicked
or negligence of the carrier's employees and blew his whistle after people had already
against passengers, since it, and not the fallen off the bus; and the bus was not properly
passengers, has power to select and remove equipped with doors in accordance with law - it is
them. clear that the petitioners have failed to overcome
the presumption of fault and negligence found in
Responsibility for acts of passengers and the law governing common carriers.
- bus driver could have stopped the car when
strangers
stranger was running amuck.
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Art 2206. The amount of damages for death probable result of breach at the time of or prior to
caused by a crime or quasi-delict shall be at least contracting. Generally, notice then of any special
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circumstances which will show that the damages computed on the basis of the life expectancy of
to be anticipated from a breach would be the deceased, not of beneficiary.
enhanced has been held sufficient for this effect.
- Applying the ruling to the facts of the instant VICTORY LINER VS. GAMMAS
case, in the absence of a showing that - The award of compensatory damages for the
petitioner's attention was called to the special loss of the deceaseds earning capacity should
circumstances requiring prompt delivery of be deleted for lack of basis.
private respondent Pangan's luggages, petitioner - As a rule, documentary evidence should be
cannot be held liable for the cancellation of presented to substantiate the claim for damages
private respondents' contracts as it could not for loss of earning capacity.
have foreseen such an eventuality when it - By way of exception, damages for loss of earning
accepted the luggages for transit. capacity may be awarded despite the absence of
documentary evidence when (1) the deceased is
VILLA REY VS. CA self-employed earning less than the minimum
- The determination of such amount depends, wage under current labor laws, and judicial
mainly upon two (2) factors, namely: (1) the num- notice may be taken of the fact that in the
ber of years on the basis of which the damages deceaseds line of work no documentary
shall be computed; and (2) the rate at which the evidence is available; or (2) the deceased is
losses sustained by said respondents should be employed as a daily wage worker earning less
fixed. than the minimum wage under current labor
In fixing the amount of that support, We must laws.
reckon with the "necessary expenses of his
own living", which should be deducted from Moral Damages
his earnings. Thus, it has been consistently
held that earning capacity, as an element of
Art 2217. Moral damages include physical
damages to one's estate for his death by
suffering, mental anguish, fright, serious anxiety,
wrongful act is necessarily his net earning besmirched reputation, wounded feelings, moral
capacity or his capacity to acquire money, shock, social humiliation, and similar injury. Though
'less the necessary expense for his own incapable of pecuniary computation, moral
living. damages may be recovered if they are the
proximate result of the defendant's wrongful act for
Stated otherwise, the amount recoverable is
omission.
not the loss of the entire earning, but rather
the loss of that portion of the earnings which Art 2216. No proof of pecuniary loss is necessary
the beneficiary would have received in order that moral, nominal, temperate, liquidated
In other words, only the net earnings, not or exemplary damages, may be adjudicated. The
assessment of such damages, except liquidated
gross earning are to be considered, that is, the
ones, is left to the discretion of the court,
total of the earnings less expenses necessary according to the circumstances of each case.
in the creation of such earnings or income[6]
and less living and other incidental expenses. Art 2219. Moral damages may be recovered in the
following and analogous cases:
PAL VS. CA (1) A criminal offense resulting in physical injuries;
Consider the life-expectancy of the deceased and (2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious
not of the beneficiary
acts
- resort to foreign jurisprudence will be proper (4) Adultery or concubinage;
only if no law or jurisprudence is available locally (5) Illegal or arbitrary detention or arrest;
to settle a controversy. Even in the absence of (6) Illegal search;
local statute and case law, foreign jurisprudence (7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
is only persuasive.
(9) Acts mentioned in article 309;
- Under Article 1764 and Article 2206(1) of the Civil (10) Acts and actions referred to in articles 21, 26,
Code, the award of damages for death is 27, 28, 29, 30, 32, 34, and 35.
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- Such actuation of defendant may indeed have lack of care on the part of the carrier resulting in
been prompted by nothing more than the the failure of the passenger to be accommodated
promotion of its self-interest in holding on to in the class contracted for, amounts to bad faith
Senator Lopez and party as passengers in its or fraud which entitles the passenger to the
flight and foreclosing on their chances to seek award of moral damages in accordance with
the services of other airlines that may have been Article 2220 of the Civil Code.
able to afford them first class accommodations. But in the instant case, the breach appears to
- As if to further emphasize its bad faith on the be of graver nature, since the preference
matter, defendant subsequently promoted the given to the Belgian passenger over plaintiff
employee who cancelled plaintiffs' reservations was done willfully and in wanton disregard of
and told them nothing about it. The record shows plaintiffs rights and his dignity as a human
that said employeeMariano Herranzwas not being and as a Filipino, who may not be
subjected to investigation and suspension by discriminated against with impunity.
defendant but instead was given a reward in the
form of an increase of salary in June of the CATHAY PACIFIC VS. VASQUEZ
following year The upgrading was a breach of contract of
- Granting all the mistakes advanced by the carriage, because the passengers have the right to
defendant, there would at least be negligence waive the privilege.
so gross and reckless as to amount to malice
or bad faith (Fores vs. Miranda,105 Phil. 266; W/N the upgrading was tainted with fraud or bad
Necesito vs. Paras, 104 Phil. 75). Firstly, faith; and
notwithstanding the entries in the reservation - NO! WE ARE NOT CONVINCED.
cards (Exhs. 1 & 3) that the reservations - Bad faith and fraud are allegations of fact that
cancelled are those of the Rufinos only, Herranz demand clear and convincing proof. They are
made the mistake, after reading said entries, of serious accusations that can be so conveniently
sending a wire cancelling all the reservations, and casually invoked, and that is why they are
including those of Senator Lopez and party (Tsn., never presumed. They amount to mere slogans
pp. 103-108, Nov. 17, 1961). Secondly, after or mudslinging unless convincingly substantiated
sending a wire to San Francisco head office on by whoever is alleging them.
April 19, 1960 stating his error and asking for Fraud - has been defined to include an
reinstatement, Herranz simply forgot about the inducement through insidious machination.
matter. Insidious machination refers to a deceitful
scheme or plot with an evil or devious
ORTIGAS VS. LUFTHANSA purpose. Deceit exists where the party, with
- Indubitable proof of the defendant's bad faith is intent to deceive, conceals or omits to state
found in the fact that while its employee was material facts and, by reason of such omission
assuring the plaintiff he would be transferred to or concealment, the other party was induced
first class in Cairo, he was at the same time to give consent that would not otherwise have
writing on his ticket the following notation: been given.
TRVLDY /c ROME HEG ROME ST', which Bad faith - does not simply connote bad
means 'Travelled economy class Rome to judgment or negligence; it imports a dishonest
Hongkong St', thereby barring Ortigas from purpose or some moral obliquity and
asserting any right to demand first class conscious doing of a wrong, a breach of a
accommodation. The defendant's employee, known duty through some motive or interest or
therefore, knew all along the plaintiff would not ill will that partakes of the nature of fraud
travel first class, and yet he deliberately made - We find no persuasive proof of fraud or bad faith
him believe he would be transferred to first class in this case.
from Cairo to Hongkong. The Vazquezes were not induced to agree to
- It is our considered view that when it comes to the upgrading through insidious words or
contracts of common carriage, inattention and deceitful machination or through willful
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concealment of material facts. Upon boarding, entitles the passenger to an award of moral
Ms. Chiu told the Vazquezes that their damages.
accommodations were upgraded to First Class What the law considers as bad faith which
in view of their being Gold Card members of may furnish the ground for an award of moral
Cathays Marco Polo Club. She was honest in damages would be bad faith in securing the
telling them that their seats were already given contract and in the execution thereof, as well
to other passengers and the Business Class as in the enforcement of its terms, or any other
Section was fully booked. Ms. Chiu might have kind of deceit.
failed to consider the remedy of offering the
First Class seats to other passengers. But, we Exemplary Damages
find no bad faith in her failure to do so, even if
that amounted to an exercise of poor
Art 2229. Exemplary or corrective damages are
judgment.
imposed, by way of example or correction for the
public good, in addition to the moral, temperate,
AIR FRANCE VS. GILLEGO liquidated or compensatory damages.
- In awarding moral damages for breach of
contract of carriage, the breach must be wanton Art 2232. In contracts and quasi-contracts, the
and deliberately injurious or the one responsible court may award exemplary damages if the
acted fraudulently or with malice or bad faith. defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.
Not every case of mental anguish, fright or
serious anxiety calls for the award of moral Art 2233. Exemplary damages cannot be
damages. recovered as a matter of right; the court will decide
Where in breaching the contract of carriage whether or not they should be adjudicated.
the airline is not shown to have acted
fraudulently or in bad faith, liability for MECENAS VS. COURT OF APPEALS
damages is limited to the natural and probable - In respect of the petitioners' claim for exemplary
consequences of the breach of the obligation damages, it is only necessary to refer to Article
which the parties had foreseen or could have 2232 of the Civil Code:
reasonably foreseen. In such a case the Art 2232. In contracts and quasi-contracts, the
liability does not include moral and exemplary court may award exemplary damages if the
damages. defendant acted in a wanton, fraudulent,
- bad faith should be established by clear and reckless, oppressive or malevolent manner.
convincing evidence. The settled rule is that the - Thus, whether petitioners are entitled to
law always presumes good faith such that any exemplary damages as claimed must depend on
person who seeks to be awarded damages due whether or not private respondents acted
to the acts of another has the burden of proving recklessly, that is, with gross negligence.
that the latter acted in bad faith or with ill motive. - There is herefore, no question that the "Don
- TC and CA did not err in finding that petitioner Juan" was at least as negligent as the M/T
acted in bad faith in repeatedly ignoring "Tacloban City" in the events leading up to the
respondent's follow-up calls. The alleged entries collision and the sinking of the "Don Juan." The
in the PIR deserve scant consideration, as these remaining question is whether the negligence on
h a v e n o t b e e n p r o p e r l y i d e n t i fi e d o r the part of the "Don Juan" reached that level of
authenticated by the airline station representative recklessness or gross negligence that our Civil
in Budapest who initiated and inputed the said Code requires for the imposition of exemplary
entries. damages.
Inattention to and lack of care for the interest - We believe that the behaviour of the captain of
of its passengers who are entitled to its utmost the "Don Juan" in this instance -- playing
consideration, particularly as to their mahjong "before and up to the time of collision" --
convenience, amount to bad faith which constitutes behaviour that is simply unacceptable
on the part of the master of a vessel to whose
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mother's mortal remains, unattended to and purpose of indemnifying any loss suffered by
without any assurance from the employees of him.
TWA that they were doing anything about the The court may award nominal damages in
situation. This is not to say that petitioners were every obligation arising from any source
to be regaled with extra special attention enumerated in Article 1157, or in every case
T h e y w e r e , h o w e v e r, e n t i t l e d t o t h e where any property right has been invaded
understanding and humane consideration
called for by and commensurate with the SAVELLANO VS. NORTHWEST
extraordinary diligence required of common Nominal damages are recoverable if no actual,
carriers, and not the cold insensitivity to their substantial or specific damages were shown to
predicament. It is hard to believe that the have resulted from the breach. The amount of such
airline's counter personnel were totally damages is addressed to the sound discretion of
helpless about the situation. Common sense the court, taking into account the relevant
could and should have dictated that they exert circumstances.
a little extra effort in making a more extensive - In the present case, we must consider that
inquiry, by themselves or through their petitioners suffered the inconveniences of having
superiors, rather than just shrug off the to wake up early after a bad night and having to
problem with a callous and uncaring remark miss breakfast; as well as the fact that they were
that they had no knowledge about it. business class passengers. They paid more for
Nominal damages awarded for this better service; thus, rushing them and making
them miss their small comforts was not a trivial
JAPAN AIRLINES VS. COURT OF APPEALS thing.
- Private respondents were placed on the waiting - We also consider their social and official status.
list from June 20 to June 24. To assure Victorino Savellano was a former mayor, regional
themselves of a seat on an available flight, they trial court judge and chairman of the Commission
were compelled to stay in the airport the whole on Elections. Virginia B. Savellano was the
day of June 22, 1991 and it was only at 8:00 p.m. president of five rural banks, and Deogracias
of the aforesaid date that they were advised that Savellano was then the incumbent vice governor
they could be accommodated in said flight which of Ilocos Sur.
flew at about 9:00 a.m. the next day. - Proper to grant 150K as nominal damages to
- We are not oblivious to the fact that the each of them, in order to vindicate and recognize
cancellation of JAL flights to Manila from June 15 their right to be notified and consulted before
to June 21, 1991 caused considerable disruption their contracted stopping place was changed.
in passenger booking and reservation. In fact, it
would be unreasonable to expect, considering VICTORY LUNER VS. GAMMAS
NAIAs closure, that JAL flight operations would - Art 1764 in relation to Article 2206 of the Civil
be normal on the days affected. Code, holds the common carrier in breach of its
Nevertheless, this does not excuse JAL from contract of carriage that results in the death of a
its obligation to make the necessary passenger liable to pay the following: (1)
arrangements to transport private respondents indemnity for death, (2) indemnity for loss of
on its first available flight to Manila. After all, it earning capacity, and (3) moral damages.
had a contract to transport private - In the present case, respondent heirs of the
respondents from the United States to Manila deceased are entitled to indemnity for the death
as their final destination. of Marie Grace which under current
- Consequently, the award of nominal damages is jurisprudence is fixed at P50,000.00
in order. - The award of compensatory damages for the
Nominal damages are adjudicated in order loss of the deceaseds earning capacity should
that a right of a plaintiff, which has been be deleted for lack of basis.
violated or invaded by the defendant, may be As a rule, documentary evidence should be
vindicated or recognized and not for the presented to substantiate the claim for
damages for loss of earning capacity.
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After the contract has been complied with, the bill freight rates or charges and stipulates the rights
of lading issued by the carrier shall be returned to and obligations assumed by the parties.
him, and by virtue of the exchange of this - it is only binding upon the parties who make
certificate for the article transported, the respective them their assigns, and heirs
obligations and actions shall be considered
cancelled, unless in the same act the claims which
the contracting parties desire to reserve are The bill of lading operates as: legal evidence of the
reduced to writing, exception being made of the contract between shipper and carrier
provisions of Art 366. - the contents of the bill of lading settle the
disputes which arise regarding the execution and
If in case of loss or for any other reason
performance of the contract of carriage
whatsoever, the consignee cannot return upon
receiving the merchandise the bill of lading - the only times parol evidence is admissible is:
subscribed by the carrier, he shall give said carrier - falsity
a receipt for the goods delivered, this receipt - material error in drafting (also refer to Rules of
producing the same effects as the return of the bill Court application)
of lading.
Refusal to Transport
Note that the bill of lading is NOT necessary for the
perfection of the contract of carriage (such is not a
Art 356. Carriers may refuse packages which
formal contract).
appear unfit for transportation; and if the carriage
is to be made by railway, and the shipment is
The Bill of Lading operates as follows: insisted upon, the company shall transport them,
(1) receipt being exempt from all responsibility if its
(2) contract objections, is made to appear in the bill of lading.
(3) document of title that makes it a symbol of
the goods
This is also known as the three-fold nature of
the bill of lading
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When can carriers refuse packages? What if the shipper was dishonest?
If they appear unfit for transportation. The expense occasioned by the examination and
that of carefully repacking the packages shall be for
What if the carriage is insisted upon? the account of the shipper.
The company shall transport them, being exempt
from all responsibility if its objections, is made to No Bill of Lading
appear in the bill of lading.
If the shipper or consignee who has to be cited - hence, in the absence of any bill of lading,
does not attend, the examination shall be made disputes shall be determined on the basis of the
before a notary, who shall prepare a memorandum provisions of the New Civil Code and suppletorily
of the result of the investigation, for such purposes by the Code of Commerce
as may be proper.
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If, notwithstanding the precautions referred to in
Article 365 If, in consequence of the damage,
this article, the goods transported run the risk of
the goods are rendered useless for sale and
being lost, on account of their nature or by reason
consumption for the purposes for which they are
of unavoidable accident, there being no time for
properly destined, the consignee shall not be
their owners to dispose of them, the carrier may
bound to receive them, and he may have them in
proceed to sell them, placing them for this purpose
the hands of the carrier, demanding of the latter
at the disposal of the judicial authority or of the
their value at the current price on that day.
officials designated by special provisions.
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to the condition of goods transported at the time of (2) supported by a valuable consideration other
their deliver to the former, the said goods shall be than the service rendered by the common carrier;
examined by experts appointed by the parties, and
and a third one, in case of disagreement, (3) reasonable, just, and not contrary to public
appointed by the judicial authority, the result of the policy
examination being reduced to writing; and if the
persons interested should not agree to the report
of the experts and could not settle their disputes, Amount of damages for reason for delay
said judicial authority shall order the deposit of the
merchandise in a safe warehouse, and the parties
interested shall make use of their rights in the Art 371. In cases of delay on account of the fault
proper manner. of the carrier, referred to in foregoing, the
consignee may leave the goods transported in the
hands of the carrier, informing him thereof in wiring
When the damage of the goods is NOT before the arrival of the same at the point of
apparent, claim must be made within 24 hours. destination.
Otherwise, after the period has elapsed, or after the
When this abandonment occurs, the carrier shall
transportation charges have been paid, no claim satisfy the total value of the goods, as if they had
may be admitted against the carrier with regard to been lost or mislaid.
the damage.
Should the abandonment not occur, the indemnity
for loss and damages on account of the delays
What if there is disagreement as to the
cannot exceed the current price of the goods
condition of the goods at time of delivery? transported on the day and at the place where the
The goods shall be inspected by: delivery was to have been made. The same
(1) experts appointed by parties provisions shall be observed in all cases where
(2) third expert appointed by judicial authorities this indemnity is due.
Their findings shall be reduced to writing.
foregoing when period has been fixed
If they still disagree: judicial authority shall order
the goods deposited in a safe warehouse. The consignee has the right to abandon.
- If he abandons: carrier pays total value of the
Amount of damages for loss goods as if they had been lost
- If he does not abandon : carrier shall pay
damages which cannot exceed the current price
Art 372. The appraisement of the goods which the
carrier must pay in case of their being lost of of the goods on the day and place when deliver
mislaid shall be fixed in accordance with what is WAS TO HAVE BEEN made.
stated in the bill of lading, no proof being allowed
on the part of the shipper that there were among
the goods declared therein articles of greater value Right to Abandon
and money.
Art 371. In cases of delay on account of the fault
of the carrier, referred to in foregoing, the
The amount of damages shall be that fixed in
consignee may leave the goods transported in the
the bill of lading. hands of the carrier, informing him thereof in wiring
- Parol Evidence Rule applies, in that no other before the arrival of the same at the point of
proof is allowed to show grater value. destination.
When this abandonment occurs, the carrier shall
Art 1744. A stipulation between the common satisfy the total value of the goods, as if they had
carrier and the shipper or owner limiting the liability been lost or mislaid.
of the former for the loss, destruction, or
deterioration of the goods to a degree less than Should the abandonment not occur, the indemnity
extraordinary diligence shall be valid, provided it for loss and damages on account of the delays
be: cannot exceed the current price of the goods
(1) in writing, signed by the shipper or owner transported on the day and at the place where the
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Art 363. With exception of the cases, prescribed in Art 360. The shipper may, without changing the
the second paragraph of Art 361, the carrier shall place where delivery is to be made, change the
be obliged to deliver the goods transported in the consignment of the goods delivered to the carrier,
same condition in which according to the bill of and the latter shall comply with his orders,
lading, there were at the time of their receipt, provided that at the time of making the change of
without any determinant or impairment and should the consignee, the bill of lading subscribed by the
he not do so, shall be obliged to pay the value of carrier be returned to him, if one were issued,
the goods not delivered at the point where they exchanging it for another containing the novation
should have been and at the time the delivery of the contract.
should have taken place.
The expenses arising from change of consignment
If part of the goods transported should be shall be defrayed by the shipper.
delivered, the consignee may refuse to receive it,
when he proves that he can make use thereof
without the others. Conditions for Change:
(1) place of delivery not changed
The last paragraph above is an instance when the (2) original bill of lading returned
consignee may abandon the goods. The other
(3) shipper incurs the expenses
instances are set forth inArt 365 and 371 of the
Code of Commerce.
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Obligation to Pay Transportation Charges - after 8 days, carrier becomes ordinary creditor
(not preferred anymore)
Exception:
Art 376. The preference of the carrier to the
payment of what is due him for the transportation (1) in the same act the claims which the
and expenses of the goods delivered to the contracting parties desire to reserve are
consignee shall not be affected by the bankruptcy reduced to writing
of the latter, provided the action is brought within 8
days mentioned in the foregoing article
Applicability of Provisions
Art 2241(9). With reference to specific movable
property the debtor, the following claims or liens
Art 379. The provisions contained in Article 349, et
shall be preferred:
seq., shall also be understood as relating to
(9) Credits for transportation, upon the goods
persons, who although they do not personally
carried, for the price of the contract and incidental
effect the transportation of the commercial goods,
expenses, until their delivery and for 30 days
contract to do so through others, either as
thereafter.
contracts for a special and fixed transaction or as
freight and transportation agents.
Consignee:
- cannot defer payment of expenses and In either case, they shall be subrogated to the
place of the carriers with regard to the obligations
transportation after 24 hours from delivery and liability of the latter, as well as with regard to
their rights.
Effect of delay in payment:
- carrier may request the judicial sale of the goods
he transported for a sufficient amount to cover Admiralty and Maritime Commerce
the transportation charges and the expenses
incurred. Concept of Admiraly; Jurisdiction
- goods are to answer for the transportation
Maritime Law - system of laws which relates to the
charges and for the expenses and fees caused
affairs and business of the sea, to ships, their
by the same during their transportation and until
crews and navigation, and to marine conveyance of
the time of their delivery.
- this special right lasts 8 days after delivery persons and property
the business of carrying goods and passengers by of that section should not be held to include
water minor craft engaged only in river and bay traffic.
- Other vessels of minor nature not engaged in
Notes: maritime commerce, such as river boats and
- the term admiralty and maritime are synonym those carrying passengers from ship to shore,
- Civil Code is still the primary law while the Code must be governed, as to their liability to
of Commerce and other special laws apply only passengers, by the provisions of the Civil Code
suppletorily or other appropriate special provisions of law.
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Art 586. The shipowner and the ship agent shall Art 590. The co-owners of a vessel shall be civilly
be civilly liable for the acts of the captain and for liable in the proportion of their interests in the
the obligations contracted by the latter to repair, common fund, for the results of the acts of the
equip, and provision the vessel, provided the captain, referred to in Article 587.Each co-owner
creditor proves that the amount claimed was may exempt himself from this liability by the
invested for the benefit of the same. By ship agent abandonment, before a notary, of the part of the
is understood the person entrusted with vessel belonging to him.
provisioning or representing the vessel in the port
in which it may be found.
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They shall likewise be liable in the same proportion Art 596. The ship agent may discharge the duties
for the expenses for the maintenance, equipment, of captain of the vessel, subject in every case to
and provisioning of the vessel, necessary for the provision of Article 609
navigation.
If two or more co-owners apply for the position of
captain, the disagreement shall be decided by a
vote of the members; and if the vote should result
Art 592. The resolution of the majority with regard in a tie, it shall be decided in favor of the co-owner
to the repair, equipment, and provisioning of the having the larger interest in the vessel.
vessel in the port of departure shall bind the
minority, unless the minority members renounce If the interests of the applicants should be equal,
their interests, which must be acquired by the and there should be a tie, the matter shall be
other co-owners, after a judicial appraisement of decidedby lot.
the value of the portion or portions assigned.
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virtue of a resolution of the majority, and without Art 606. If the captain should be a co-owner of the
further proceedings than the acknowledgment of vessel, he may not be discharged unless the ship
the signatures of the persons who voted for the agent returns to him the amount of his interest
resolution. therein, which, in the absence of agreement
between the parties, shall be appraised by experts
appointed in the manner established in the law of
civil procedure.
Art 601. Should there be any profits, the co-owners
may demand of the managing agent the amount
corresponding to their interests by means of an
executory action ("accion ejecutiva"), without any Art 607. If the captain who is a co-owner should
other requisite than the acknowledgment of the have obtained the command of the vessel by virtue
signatures on the instrument approving the of a special agreement contained in the articles of
account. association, he may not be deprived of his office
except for the causes mentioned in Article 605.
Yu Con v. Ipil
Nevertheless, pursuant to Article 568 of the Code
DOCTRINE: In maritime commerce, the shippers of Commerce, an agent for a vessel could avoid
and passengers in making contracts with the responsibility, by giving up its agency when
captain do so through the confidence they have in threatened with suit to enforce the obligations of
the shipowner who appointed him; they presume third parties.
that the owner made a most careful investigation
before appointing him, and, above all, they
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[National Development Company v. CA] - These articles intend to limit liability of the
shipowner or agent to value of the vessel, its
DOCTRINE: Art. 826 to 839 of the Code of appurtenances and freightage earned in the
Commerce, provides that the shipowner or carrier, voyage, provided that the owner or agent
is not exempt from liability for damages arising abandons the vessel.
from collision due to the fault or negligence of the
captain. Primary liability is imposed on the - When the vessel is totally lost in which case
shipowner or carrier in recognition of the there is no vessel to abandon, abandonment is
universally accepted doctrine that the shipmaster not required. Because of such total loss the
or captain is merely the representative of the owner liability of the shipowner or agent for damages is
who has the actual or constructive control over the extinguished.
conduct of the voyage. (Reiteration of Manila
Steamship Case Doctrine) - Nonetheless, there are exceptional
circumstances where the ship agent could still
Doctrine of Limited Liability be held answerable despite abandonment of
vessel, as where the loss or injury was due to
What is the doctrine of limited liability?
the fault of shipowner or captain.
The doctrine of limited liability (or real and
hypothecary doctrine) provides that the shipowner - The right of abandonment of vessels, as a legal
or agents liability is merely co-extensive with his limitation of a ship owners liability, does not
interest in the vessel such that a total loss thereof apply where the injury was occasioned by the
results in its extinction. No vessel, no liability shipowners own fault. The latter may be held
expresses in a nutshell the limited liability rule. liable for injuries to passengers notwithstanding
the exclusively real and hypothecary nature of
The limited liability doctrine in this jurisdiction is maritime law if fault can be attributed to
found in the following provisions: Arts. 587, 590 shipowner (Aboitiz Shipping v. General
and 837. Assurance Corp.).
doctrine may still be invoked, hence, do with the provisions of the Code of Commerce
abandonment is still an option. regarding maritime commerce.
5. Private carrier; or
6. Voyage is not maritime in character. Aboitiz Shipping v. General Accident Fire and
Life Assurance Corp.
Yangco v. Laserna
DOCTRINE: As a general rule, a ship owners
S.S. Negros capsized killing several passengers. liability is merely co-extensive with his interest in
Their heirs filed cases against petitioner, owner. the vessel, except where actual fault is attributable
Petitioner sought to abandon the vessel to to the shipowner. Thus, as an exception to the
respondents, together with all its equipment. limited liability doctrine, a shipowner or ship agent
may be held liable for damages when sinking of
DOCTRINE: Art. 587, Code of Commerce accords the vessel is attributable to the actual fault or
a shipowner or agent the right of abandonment, negligence of the shipowner or its failure to ensure
and thus his liability is confined to only what he is the seaworthiness of the vessel.
entitled to abandon (i.e. vessel, its equipment, and
freight it may have earned during voyage). Specific Rights and Prerogatives
The article appears to deal only with limited liability Art. 575. Co-owners of vessels shall have the right
of shipowners or agents for damages arising from of repurchase and redemption in sales made to
the captains misconduct in the care of goods the strangers, but they may exercise the same only
vessel carries, but this is mere deficiency of within the nine days following the inscription of the
language and does not indicate the true extent of sale in the registry, and by depositing the price at
the same time.
such liability. Notwithstanding the language of the
provision, the benefit of limited liability, applies in Art. 593. The owners of a vessel shall have
all cases wherein the shipowner or agent may preference in her charter over other persons,
properly be held liable for the negligent or illicit under the same conditions and price. If two or
acts of the captain. more of them should claim this right, the one
having the greater interest shall be preferred; and
should they have equal interests, the matter shall
If the vessel together with its freight and money be decided by lot.
earned during the voyage are abandoned, the
agent's liability to third persons for tortious acts of Art. 594. The co-owners shall elect the manager
the captain in the care of the goods is who is to represent them in the capacity of ship
extinguished. agent.
The appointment of director or ship agent shall be
Abueg v. San Diego
revocable at the will of the members.
DOCTRINE: The Code of Commerce provisions to Art. 596. The ship agent may discharge the duties
the effect that total loss of the vessel and its freight of captain of the vessel, subject in every case to
will extinguish the liability of the shipowner does the provision of Article 609.
NOT preclude injured parties from claiming
If two or more co-owners apply for the position of
compensation from the Workmen's Compensation captain, the disagreement shall be decided by a
Act. It is not the liability for damage or loss of the vote of the members; and if the vote should result
cargo or injury to, or death of, a passenger by the in a tie, it shall be decided in favor of the co-owner
misconduct of the captain or master; but a liability having the larger interest in the vessel.
created by statute to compensate employees and
If the interests of the applicants should be equal,
laborers in cases of injury inflicted upon them, and there should be a tie, the matter shall be
while engaged in the performance of their work, or decided by lot.
the heirs and dependents of laborers and
employees in the event of death caused by their Art. 601. Should there be any profits, the co-
employment. Such compensation has nothing to owners may demand of the managing agent the
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What are the rights of the following parties? RA 9295, Sec. 9. Safety Standards. - All vessels
operate by domestic ship operators shall at all
Co-owners of vessels: times be in seaworthy condition properly equipped
1. Right to repurchase and redeem sales made to with adequate life-saving, communication, safety
strangers and other equipment operated and maintained in
accordance with the standards set by MARINA,
2. Right to elect the manager to represent them
and manned by duly licensed and competent
as ship agent vessel crew.
3. Right to demand of the managing agent the
profits corresponding to their interest by The MARINA shall have the power to inspect
executory action vessels and all equipment on board to ensure
compliance with safety standards.
Owners:
RA 10635, Sec. 3. MARINA as the Single
1. Preference in his charter over other persons, Maritime Administration. - MARINA, created
under the same conditions and price. under P. D. No. 474, as amended, shall be the
single maritime administration mandated to
Captains and Master implement and enforce the 1978 International
Convention on Standards of Training, Certification
and Watch keeping for Seafarers. It shall carry out
Qualifications and Licensing an effective regulatory framework conducive to the
efficiency, transparency and competitiveness of
the Philippine seafaring industry.
Art. 609. Captains, masters or patrons of vessels
must be Filipinos, have legal capacity to contract
RA 10635, Sec. 4. Powers and Functions of
in accordance with this code, and prove the skill,
MARINA. - In addition to the mandate of the
capacity, and qualifications necessary to
MARINA under Presidential Decree No. 474, as
command and direct the vessel, as established by
amended, and in order to carry out the provisions
marine or navigation laws, ordinances, or
of this Act, the MARINA shall exercise the following
regulations, and must not be disqualified
powers and functions:
according to the same for the discharge of the
duties of the position.
(a) Act as the single, central maritime
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endorsement, proficiency and documentary others, formulate, review and recommend to the
evidence required of all seafarers and all such CHED en banc all policies, standards, and
other matters pertaining to the implementation of guidelines for maritime education, including
the STCW Convention, subject to the following: curricula, facilities and guidelines;
(1) MARINA shall ensure that the examination, (ii) Monitor and verify, in coordination with the
licensing and certification system for marine CHED, compliance with the policies, standards,
deck and engine officers are in accordance with and guidelines of maritime education in the
the requirements prescribed under the STCW conduct of maritime education and training
Convention. All powers, duties and functions of programs;-
PRC on the examination, licensing and certification
system for marine deck and engine officers as (iii) Review and harmonize the procedures for
provided in RA No. 8544, or the "Philippine periodic evaluation, assessment and monitoring of
Merchant Marine Officers Act of 1998", shall be all maritime education and training institutions in
exercised by MARINA. The compensation and accordance with the standards of the CHED and
allowances of the Board of Marine Deck Officers other recognized international organizations;
and Marine Engine Officers under Article TV,
Section 8 of Republic Act No. 8544 shall, however, (iv) Develop, formulate and recommend for
be comparable to the compensation and implementation, strict quality assurance
allowances being received by the chairpersons mechanisms and relevant typology for maritime
and members of other existing regulatory boards education programs and institutions;
under the PRC and as provided in the General
Appropriations Act. (v) Recommend to the CHED en banc the closure/
phase-out of substandard maritime education
(2) The MARINA shall adopt rules and institutions, in accordance with the rules and
regulations, in accordance with the STCW regulations, as well as recommend alternative
Convention, governing able-bodied deck and schemes or options for the affected maritime
engine ratings including: educational institution;
(i) Monitoring and verification of compliance with (vi) Maintain an updated list of compliant and
the standards of ratings; phased-out maritime education and training
programs, publish such lists in appropriate media,
(ii) Harmonization of the procedures for periodic and provide the public with a clear understanding
evaluation, assessment and monitoring activities of the consequences of enrolling in a phased-out
undertaken by accredited institutions with program;
registered programs for ratings; and
(5) The MARINA shall coordinate with the DOH to
(iii) Issuance of certificates of proficiency to ensure that the medical standards established
ratings. to ascertain the medical fitness of seafarers are
in accordance with the international
(3) MARINA shall ensure that all legal, conventions/treaties and existing laws. For this
administrative measures relative to the purpose, MARINA shall:
issuance of certificates of competency of
GMDSS radio operators are in accordance with (i) Ensure that the medical examinations and
the STCW Convention. For this purpose, the issuance of medical certificates by the DOH
MARINA shall assess, revalidate and issue accredited hospitals, medical clinics, and
GMDSS radio operators certificate in accordance laboratories, including medical practitioners are in
with the provisions under the STCW Convention. accordance with the standards prescribed by the
STCW Convention; and
(4) MARINA shall ensure that all maritime
education, including the curricula and training (ii) Ensure that medical certificates are issued by a
programs, are structured and delivered in duly-qualified medical practitioner recognized by
accordance with written programs, methods and and accredited with the DOH, and for this purpose,
media of delivery, procedures, and course a register of recognized medical practitioners shall
materials compliant with international standards be maintained and made available to seafarers,
as prescribed under STCW Convention. For this shipping companies and State parties to the STCW
purpose, the MARINA shall: Convention.
What is MARINA?
- MARINA was created under P. D. No. 474.
5. To adopt all proper measures to keep the vessel
- It is the single maritime administration mandated well supplied and equipped, purchasing all that
to implement and enforce the 1978 International may be necessary for the purpose, provided there
C o n v e n t i o n o n S t a n d a rd s o f Tr a i n i n g , is no time to request instruction from the ship
agent.
Certification and Watch keeping for Seafarers.
- It carries out an effective regulatory framework
6. To order, in similar urgent cases while on a
conducive to the efficiency, transparency and voyage, the repairs on the hull and engines of the
competitiveness of the Philippine seafaring vessel and in its rigging and equipment, which are
industry. absolutely necessary to enable it to continue and
finish its voyage; but if he should arrive at a point
where there is a consignee of the vessel, he shall
What are its powers? (Main) act in concurrence with the latter.
1. A c t a s t h e s i n g l e , c e n t r a l m a r i t i m e
administration for purposes relating to
What are the powers inherent in the position of
compliance with the STCW Convention.
the captain, master, or patron of a vessel?
2. Administer and ensure effective implementation
1. To appoint (or make contracts with) the crew in
of the STCW Convention
the absence of ship agent, and propose said
3. Assume all powers and functions of PRC,
crew, should said agent be present;
CHED, TESDA, DOH, and NTC relative to all
2. To command the crew and direct the vessel to
such matters pertaining to implementation of
the port of destination, in accordance with
STCW Convention.
instructions he received from the ship agent.
3. To impose correctional punishment on those
Powers and Duties
who fail to comply with his orders or lack
discipline
Art. 610. The following powers shall be inherent in 4. To make contracts for the charter of the vessel
the position of captain, master or patron of a in the absence of the ship agent or of its
vessel:
consignee
1. To appoint or make contracts with the crew in 5. To adopt all proper measures to keep the
the absence of the ship agent, and to propose said vessel well supplied and equipped
crew, should said agent be present; but the ship 6. To order the repairs on the hull and engines of
agent may not employ any member against the the vessel and in its rigging and equipment,
captain's express refusal.
which are absolutely necessary to enable it to
2. To command the crew and direct the vessel to continue and finish its voyage
the port of its destination, in accordance with the
instructions he may have received from the ship
agent. Art. 611. In order to comply with the obligations
mentioned in the preceding article, the captain,
3. To impose, in accordance with the contracts and when he has no funds and does not expect to
with the laws and regulations of the merchant receive any from the ship agent, shall obtain the
marine, and when on board the vessel, same in the successive order stated below:
correctional punishment upon those who fail to
comply with his orders or are wanting in discipline, 1. By requesting said funds from the consignee
holding a preliminary hearing on the crimes of the vessel or correspondents of the ship agent.
committed on board the vessel on the seas, which
crimes shall be turned over to the authorities 2. By applying to the consignees of the cargo or
having jurisdiction over the same at the first port to those interested therein.
touched.
3. By drawing on the ship agent.
4. To make contracts for the charter of the vessel in
the absence of the ship agent or of its consignee, 4. By borrowing the amount required by means
acting in accordance with the instructions received of a loan on bottomry.
and protecting the interests of the owner with
utmost care. 5. By selling a sufficient amount of the cargo to
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cover the sum absolutely indispensable for for the account of the vessel, entering the source
repair of the vessel and to enable it to continue its of collection and amounts spent for provisions,
voyage. repairs, acquisitions of equipment or goods, fuel,
food, outfits, wages, and other expenses of
In these two last cases he must apply to the whatever nature they may be. He shall furthermore
judicial authority of the port, if in the Philippines, enter a list of all the members of the crew, stating
and to the consul of the Republic of the Philippines their domiciles, their wages and salaries, and the
if in a foreign country, and where there is none, to amounts they may have received on account,
the local authority, proceeding in accordance with directly or by delivery to their families.
the provisions of Article 583, and with provisions of
the law of civil procedure. In the third book, called "freight book," he shall
record the loading and discharge of all the goods,
Art. 612. The following obligations shall be stating their marks and packages, names of the
inherent in the office of captain: shippers and of the consignees, ports of loading
and unloading, and the freightage they give. In this
1. To have on board before starting on a voyage a same book he shall record the names and places
detailed inventory of the hull, engines, rigging, of sailing of the passengers, the number of
spare-masts, tackle, and other equipment of the packages in their baggage, and the price of
vessel; the royal or the navigation certificate; passage.
the roll of the persons who make up the crew of
the vessel, and the contracts entered into with 4. Before receiving cargo, to make with the officers
them; the lists of passengers; bill of health; the of the crew and two experts, if required by the
certificate of the registry proving the ownership shippers and passengers, an examination of the
of the vessel and all the obligations which vessel, in order to ascertain whether it is water-
encumber the same up to that date; charter tight, with the rigging and engines in good
parties or authenticated copies thereof; invoices condition, and with the equipment required for
or manifests of cargo, and memorandum of the g o o d n a v i g a t i o n , p re s e r v i n g u n d e r h i s
visit or inspection by experts, should it have responsibility a certificate of memorandum of his
been made at the port of departure. inspection, signed by all those who may have
taken part therein.
2. To have a copy of this code on board.
The experts shall be appointed, one by the captain
3. To have three folioed and stamped books, of the vessel and another by those who request its
placing at the beginning of each one a examination, and in case of disagreement a third
memorandum of the number of folios it contains, shall be appointed by the marine authority of the
signed by the maritime authority, and in his port or by the authority, exercising his functions.
absence by competent authority.
5. To remain constantly on board the vessel
In the first book, which shall be called "log book," with the crew while the cargo is being taken on
he shall enter day by day the condition of the board and to carefully watch the stowage
atmosphere, the prevailing winds, courses taken, thereof; not to consent to the loading of any
rigging carried, power of the engines used in merchandise or matter of a dangerous
navigation, the distances covered, the maneuvers character, such as inflammable or explosive
executed, and other incidents of navigation; he substances, without precautions which are
shall also enter the damage suffered by the vessel recommended for their packing, handling and
in her hull, engines, rigging, and tackle, no matter isolation; not to permit the carriage on deck of any
what its cause may be, as well as the impairment cargo which by reason of its arrangement, volume,
and damage suffered by cargo, and the effect and or weight makes the work of the sailors difficult,
importance of the jettison, should there be any; and which might endanger the safety of the vessel;
and in cases of serious decisions which require the and if, on account of the nature of the
advice or a meeting of the officers of the vessel, or merchandise, the special character of the
even of the crew and passengers, he shall record shipment, and principally the favorable season in
the decisions adopted. For the information which it is undertaken, merchandise may be
indicated he shall make use of the binnacle book carried on deck, he must hear the opinion of the
and of the steam of engine book kept by the officers of the vessel and have the consent of the
engineer. shippers and of the ship agent.
In the second book called the "accounting book," 6. To demand a pilot at the expense of the
he shall record all the amounts collected and paid vessel whenever required by the navigation,
and principally when he has to enter a port, canal,
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or river, or has to take a roadstead or anchoring danger, until all hope to save it is lost, and
place with which neither he nor the officers and before abandoning it, to hear the officers of the
crew are acquainted. crew, abiding by the decision of the majority;
and if the boats are to be taken to, he shall take
7. To be on deck on reaching land and to take with him, before anything else, the books and
command on entering and leaving ports, papers, and then the articles of most value, being
canals, roadsteads, and rivers, unless there is a obliged to prove, in case of the loss of the books
pilot on board discharging his duties. He shall and papers, that he did all he could to save them.
not spend the night away from the vessel except
for serious causes or by reason of official business. 15. In case of wreck, to make the proper protest
in due form at the first port of arrival, before
8. To present himself, when making a port in competent authority or the Philippine consul,
distress, to the maritime authority if in within twenty-four hours, specifying therein all
Philippines and to the consul of the Republic of the incidents of the wreck, in accordance with
the Philippines if in a foreign country, before twenty subdivision 8 of this article.
four hours have elapsed, and to make a
statement of the name registry, and port of 16. To comply with the obligations imposed by
departure of the vessel, of its cargo, and the the laws and regulations on navigation,
cause of arrival which declaration shall be visaed customs, health, and others.
by the authority or the consul, if after examining the
same it is found to be acceptable, giving the Art. 622. If while on voyage, the captain should
captain the proper certificate proving his arrival in learn of the appearance of privateers or men of
distress and the reasons therefor. In the absence war against his flag, he shall be obliged to make
of the maritime authority or of the consul, the the nearest neutral port, inform his agent or
declaration must be made before the local shippers, and await an occasion to sail under
authority. convoy, or until the danger is over or he has
received express orders from the ship agent or the
9. To take the necessary steps before the shippers.
competent authority in order to record in the
certificate of the vessel in the registry of Art. 624. A captain whose vessel has gone
vessels the obligations he may contract in through a hurricane or who believes that the
accordance with Article 583. cargo has suffered damages or averages, shall
make a protest thereon before the competent
10. To place under good care and custody all authority at the first port he touches, within
the papers and belongings of any members of twenty-four hours following his arrival and shall
the crew who might die on the vessel, drawing ratify it within the same period when he arrives at
up a detailed inventory, in the presence of his destination, immediately proceeding with the
passengers, or, in their absence, of members of proof of the facts, and he may not open the
the crew as witnesses. hatches until after this has been done.
11. To conduct himself according to the rules The captain shall proceed in the same manner, if,
and precepts contained in the instructions of the vessel having been wrecked; he is saved alone
the ship agent, being liable for all that which he or with part of his crew, in which case he shall
may do in violation thereof. appear before the nearest authority, and make a
sworn statement of facts. xxx
12. To inform the ship agent from the port at
which the vessel arrives, of the reason of his
Art. 625. The captain, under his personal
arrival, taking advantage of the semaphore,
responsibility as soon as he arrives at the port of
telegraph, mail, etc., as the case may be; to notify
destination, should get the necessary
him of the cargo he may have received, stating the
permission from the health and customs
names and domiciles of the shippers, freightage
officers, and perform other formalities required by
earned, and amounts borrowed on bottomry loan;
regulations of the administration, delivering the
to advise him of his departure, and of any
cargo without any defalcation, to the consignee,
operation and date which may be of interest to
and in a proper case, the vessel, rigging, and
him.
freightage to the ship agent. xxx
What are the obligations of the captain? and to make a statement of the name registry,
1. BEFORE VOYAGE: To have the following on and port of departure of the vessel, of its
board: cargo, and the cause of arrival;
- detailed inventory of the hull, engines, 11. To take necessary steps to record in the
rigging, and other equipment of the vessel; certificate in the registry of vessels the
- the royal or the navigation certificate; obligations he may contract in accordance with
- the roll of the persons who make up the Article 583;
crew of vessel, and the contracts entered 12. To place under good care and custody all the
into with them; papers and belongings of any members of the
- the lists of passengers; crew who might die on the vessel;
- bill of health; 13. To conduct himself according to the rules and
- the certificate of the registry proving precepts contained in the instructions of ship
ownership of the vessel and all obligations agent;
which encumber the same up to that date; 14. To inform the ship agent from the port at which
- charter parties or authenticated copies the vessel arrives, of the reason of his arrival;
thereof; 15. To observe the rules in order to avoid collisions;
- invoices or manifests of cargo, and 16. To remain on board, if the vessel is in danger,
- memorandum of visit or inspection by until all hope to save it is lost and before
experts, if made at the port of departure. abandoning it, to hear the officers of the crew,
2. To have a copy of this code on board. abiding by the decision of the majority
3. To have three folioed and stamped books: 17. In case of wreck, to make the proper protest in
- Log Book due form at the first port of arrival, before the
- Accounting Book competent authority within twenty-four hours
- Freight Book 18. To comply with the obligations imposed by
4. BEFORE RECEIVING CARGO: to make if laws and regulations on navigation, customs,
required by shippers and passengers an health, etc.
examination of the vessel to ascertain its 19. If while on voyage, the captain learns of the
condition, preserving the certificate of appearance of privateers or men of war against
memorandum of his inspection his flag, to make the nearest neutral port,
5. To remain constantly on board the vessel with inform his agent or shippers, and await until the
the crew while the cargo is being taken on danger is over or he has received express
board and to carefully watch the stowage orders from the ship agent or the shippers (Art.
thereof; 622).
6. Not to consent to loading any merchandise of a 20. To make a protest before competent authority if
dangerous character without precautions; the vessel has gone through a hurricane or
7. Not to permit the carriage on deck of any cargo believes that the cargo has suffered damages
which by reason of its arrangement, volume, or or averages (Art. 624).
weight makes the work of the sailors difficult, 21. To get the necessary permission from the
and which might endanger the safety of the health and customs officers, and perform other
vessel; formalities required as soon as he arrives at the
8. To demand a pilot at the expense of the vessel port of destination (Art. 625).
whenever required by the navigation;
9. To be on deck on reaching land and to take Inter Orient v. NLRC
command on entering and leaving ports,
canals, roadsteads, and rivers, unless there is DOCTRINE: A master or a captain is one who has
a pilot on board discharging his duties. command of a vessel. A captain commonly
10. To present himself, when making a port in performs three (3) distinct roles:
distress, to the maritime authority if in (1) general agent of the shipowner;
Philippines and to the consul if in a foreign (2) commander and technical director of vessel;
country, before twenty four hours have elapsed, and
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Neither may he borrow money on bottomry for EFFECT: should he do so, profit which may
his own transactions, except on the portion of the accrue shall belong to other persons
vessel he owns, provided no money has been interested, and losses shall be borne by him
previously borrowed on the whole vessel, and exclusively.
there does not exist any other kind of lien or 2. Without consent of the agent, the captain
obligation chargeable against the vessel. If he may
do so, he must state what interest he has in the cannot have himself substituted by another
vessel. person;
EFFECT: Should he do so, besides being
In case of violation of this article, the principal, liable for all acts of the substitute and bound
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If, without obtaining said permission, the seaman This indemnity shall be paid from the funds of the
who has signed for one vessel should sign for vessel if the captain should have acted for reasons
another one, the second contract shall be void, of prudence and in the interest of the safety and
and the captain may choose between forcing him good services of the farmer. Should this not be the
to fulfill the service to which he first bound himself, case, it shall be paid by the captain personally.
or at his expense to look for a person to substitute
him. After the voyage has begun, during the same, and
until the conclusion thereof, the captain may not
Furthermore, he shall lose the wages earned on abandon any member of his crew on land or on
his first contract, to the benefit of the vessel for sea, unless, by reason of some crime, his
which he had signed. imprisonment and delivery to the competent
authority in the first port touched should be proper,
A captain who, knowing that a seaman is in the a matter obligatory for the captain.
service of another vessel, should have made a
new agreement with him without having required of Art. 638. If, after the crew has been engaged, the
him the permission referred to in the preceding voyage is revoked by the will of the ship agent
paragraphs, shall be subsidiarily responsible to the or of the charterers before or after the vessel
captain of the vessel to which the seaman first has put to sea, or if the vessel is for the same
belonged, for that part of the indemnity, referred to reason given a destination different from that
in the third paragraph of this article, which the fixed in agreement with crew, the latter shall be
seaman may not be able to pay. indemnified on account of the rescission of
contract, according to the cases follows:
Rights 1. If revocation of voyage should be decided
upon before the departure of the vessel from
the port, each sailor engaged shall be given one
Art. 636. If there is no fixed period for which a month's salary, besides what may be due him, in
seaman has been contracted he may not be accordance with his contract, for the services
discharged until the end of the return voyage to rendered to the vessel up to the date of the
the port where he enlisted. revocation.
Art. 637. Neither may the captain discharge a 2. If the agreement should have been for a fixed
seaman during the time of his contract EXCEPT amount for the whole voyage, that which may be
for just cause, the following being considered as due for said month and days shall be determined
such: in proportion to the approximate number of days
the voyage should have lasted, in the judgment of
1. The perpetration of a crime which disturbs order experts, in the manner established in the law of
on the vessel. Civil Procedure; and if the proposed voyage
should be of such short duration that it is
2. Repeated insubordination, want of discipline, or calculated at approximately one month, the
non-fulfillment of the service. indemnity shall be fixed for fifteen days,
discounting in all cases the sums advanced.
3. Repeated incapacity and negligence in the
fulfillment of the service he should render. 3. If revocation should take place after the
vessel has been put to sea, the seamen engaged
4. Habitual drunkenness. for a fixed amount for the voyage shall receive in
full the salary which may have been offered them
5. Any occurrence which incapacitates the seaman as if the voyage had terminated; and those
to perform the work entrusted to him, with the engaged by the month shall receive the amount
exception of that provided in Article 644. corresponding to the time they might have been on
board and to the time they may require to arrive at
6. Desertion. the port of destination, the captain being obliged,
furthermore, to pay the seamen in both cases, the
The captain may, however, before getting out on a passage to the said port or to the port of sailing of
voyage and without giving any reason, refuse to the vessel, as may be convenient for them.
permit a seaman whom he may have engaged to
go on board, and leave him on land, in which case 4. If the ship agent or the charterers of the
he will be obliged to pay him his wages as if he vessel should give it a destination different
had rendered services. from that fixed in the agreement, and the
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members of the crew should not agree thereto, crew shall continue to be paid half wages, if the
they shall be given by way of indemnity half the agreement is by month; but if the detention should
amount fixed in case No. 1, besides what may be exceed three months, the contract shall be
owed them for the part of the monthly wages rescinded and the crew shall be paid what they
corresponding to the days which have elapsed should have earned according to the contract if
from the date of their agreements. the voyage had been concluded. And if the
agreement should be for a fixed sum for the
If they accept the change, and the voyage, on voyage, the contract must be complied within the
account of the greater distance or of other terms agreed upon.
reasons, should give rise to increase of wages,
the latter shall be adjusted privately or through In the fifth case, the crew shall have no other right
amicable arbitrators in case of disagreement. Even than to collect the wages earned; but if the
though the voyage should be shortened to a disability of the vessel should have been caused
nearer point, this shall not give rise to a reduction by the negligence or lack of skill of the captain,
in the wages agreed upon. engineer, or sailing mate, they shall indemnify the
crew for the damages suffered, always without
If the revocation or change of the voyage prejudice to the criminal liability which may be
should come from the shippers or charterers, proper.
the agent shall have a right to demand of them the
indemnity which may be justly due. Art. 642. If the crew have been engaged on
shares, they shall not be entitled, by reason of the
Art. 639. If the revocation of the voyage should revocation, delay, or greater extension of the
arise from a just cause independent of the will voyage, to anything but the proportionate part of
of the ship agent and charterers, and the vessel the indemnity which way be paid into the common
should not have left the port, the members of the funds of the vessel by the persons liable for said
crew shall have no other right than to collect the occurrences.
wages earned up to the day on which the
revocation took place. Art. 643. If the vessel and her cargo should be
totally lost, by reason of capture or wreck, all rights
Art. 640. The following shall be just causes for the shall be extinguished, both as regards the crew to
revocation of the voyage. demand any wages whatsoever, and as regards
the ship agent to recover the advances made.
1. A declaration of war or interdiction of commerce
with the power to whose territory the vessel was If a portion of the vessel or of the cargo, or of both,
bound. should be saved, the crew engaged on wages,
including the captain, shall retain their rights on the
2. The blockade of the port of its destination, or the salvage, so far as they go, on the remainder of the
breaking out of an epidemic after the agreement. vessel as well as on the amount of the freightage of
the cargo saved; but sailors who are engaged on
3. The prohibition to receive in said port the goods shares shall not have any right whatsoever on the
which make up the cargo of the vessel. salvage of the hull, but only on the portion of the
freightage saved. If they should have worked to
4. The detention or embargo of the same by order recover the remainder of the shipwrecked vessel
of the government, or for any other reason they shall be given from the amount of the salvage
independent of the will of the ship agent. an award in proportion of the efforts made and to
the risks, encountered in order to accomplish the
5. The inability of the vessel to navigate. salvage.
Art. 641. If, after a voyage has been begun, any of Art. 644. A seaman who falls sick shall not lose his
the first three causes mentioned in the foregoing right to wages during the voyage, unless the
article should occur, the sailors shall be paid at the sickness is the result of his own fault. At any rate,
port which the captain may deem advisable to the costs of the attendance and cure shall be
make for the benefit of the vessel and cargo, defrayed from the common funds, in the form of a
according to the time they may have served loan.
thereon; but if the vessel is to continue its voyage,
the captain and the crew may mutually demand If the sickness should come from an injury
the enforcement of the contract. received in the service or defense of the vessel,
the seaman shall be attended and cured at the
In case of the occurrence of the fourth cause, the expense of the common funds deducting, before
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If he died a natural death and was engaged on What are deemed JUST CAUSES for the
wages, that which may have been earned up to
discharge of a seaman during the existence of
the date of his death shall be paid.
his contract?
If the contract was for a fixed sum for the whole 1. Perpetration of crime disturbing order on the
voyage, half the amount earned shall be paid if the vessel;
seamen died on the voyage out, and the whole 2. Repeated insubordination, want of discipline,
amount if he died on the return voyage.
non-fulfillment of the service;
And if the contract was on shares and death 3. Repeated incapacity and negligence in
occurred after the voyage was begun, the heirs fulfillment of the service he should render;
shall be paid the entire portion due the seaman; 4. Habitual drunkenness;
but if the latter died before the departure of the 5. Any occurrence which incapacitates the
vessel from the port, the heirs shall not be entitled
seaman to perform work entrusted to him, with
to claim anything.
the exception of that provided in Article 644;
If death occurred in the defense of the vessel, 6. Desertion
the seaman shall be considered as living, and his
heirs shall be paid, at the end of the voyage, the What are deemed JUST CAUSES for the
full amount of wages or the integral part of the
revocation of the voyage?
profits which may be due him as to others of his
class. 1. A declaration of war or interdiction of
commerce with power to whose territory the
In the same manner, the seaman captured while vessel was bound.
defending the vessel shall be considered present 2. Blockade of the port of its destination, or the
so as to enjoy the same benefits as the rest; but
breaking out of an epidemic after the
should he have been captured on account of
carelessness or other accident not related to the agreement.
service, he shall only receive the wages due up to 3. The prohibition to receive in said port the
the day of his capture. goods which make up the cargo of the vessel.
4. Detention or embargo of the same by order of
Art. 646. The vessel with her engines, rigging, the government, or for any other reason
equipment, and freightage shall he liable for the
independent of the will of the ship agent.
wages earned by the crew engaged per month or
for the trip, the liquidation and payment to take 5. The inability of the vessel to navigate.
place between one voyage and the other.
When are officers and the crew of the vessel
After a new voyage has been undertaken, credits free from all obligations if they deem it proper?
of such kind pertaining to the preceding voyage
1. If, before beginning voyage, the captain
shall lose their right of preference.
attempts to change it, or a naval war with the
Art. 647. The officers and the crew of the vessel power to which the vessel was destined
shall be free from all obligations if they deem it occurs.
proper, in the following cases: 2. If a disease should break out and be officially
declared an epidemic in the port of destination.
1. If, before beginning the voyage, the captain
attempts to change it, or a naval war with the 3. If the vessel should change owner or captain.
power to which the vessel was destined occurs.
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Neither shall they be permitted to invest in the Art. 807. The petty and ordinary expenses incident
return trip more than the profits from the to navigation, such as those of pilotage of coasts
ventures, unless there is an express authorization and ports, those of lighterage and towage,
from the principals. anchorage, inspection, health, quarantine,
lazaretto, and other so-called port expenses, costs
of barges and unloading until the merchandise is
What is a supercargo?
placed on the wharf, and any other usual
A supercargo is a person employed on board a expenses of navigation, shall be considered
vessel by the owner of the cargo carried on the ordinary expenses to be defrayed by the
ship. shipowner, unless there is an express agreement
to the contrary.
What are the duties of a supercargo?
- Discharge on board the vessel administrative Art. 808. Averages shall be:
duties which the ship agent or shippers may 1. Simple or particular.
have assigned to them; 2. General or gross.
- K e e p a n a c c o u n t a n d re c o rd o f t h e i r
What is an average?
transactions in a book.
Average is loss or damage, less than total, to
- Obtain the powers and responsibilities of the
maritime property (ship or its cargo) caused by
captain with regard to that part of administration
perils of the sea.
legitimately conferred upon the him.
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Simple or Particular
Effects
Definition 810. The owner of the goods which gave rise to the
expense or suffered the damage shall bear the
Art. 809. As a general rule, simple or particular
simple or particular averages.
averages shall include all the expenses and
damages caused to the vessel or to her cargo
which have not inured to the common benefit
Gross or General
and profit of all the persons interested in the
vessel and her cargo, and especially the
following: Definition
4. The wages and victuals of the crew when the
3. The cables and masts which are cut or rendered
vessel is detained or embargoed by legitimate
useless, the anchors and the chains which are
order or force majeure, if the charter has been
abandoned, in order to save the cargo, the vessel,
contracted for a fixed sum for the voyage.
or both.
5. The necessary expenses on arrival at a port, in
4. The expenses of removing or transferring a
order to make repairs or secure provisions.
portion of the cargo in order to lighten the vessel
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intentionally stranded for the purpose of saying it. officers or a majority of them, or the captain, if
opposed to the majority, should consider certain
7. The damage caused to the vessel which had to measures necessary, they may be executed under
be opened, scuttled or broken in order to save the his responsibility, without prejudice to the right of
cargo. the shippers to proceed against the captain before
the competent judge or court, if they can prove
8. The expenses for the treatment and subsistence that he acted with malice, lack of skill, or
of the members of the crew who may have been negligence.
wounded or crippled in defending or saying the
vessel. If the persons interested in the cargo, being on
board the vessel, have not been heard, they shall
9. The wages of any member of the crew held as not contribute to the gross average, their share
hostage by enemies, privateers, or pirates, and the being chargeable against the captain, unless the
necessary expenses which he may incur in his urgency of the case should be such that the time
imprisonment, until he is returned to the vessel or necessary for previous deliberations was wanting.
to his domicile, should he prefer it.
Art. 814. The resolution adopted to cause the
10. The wages and victuals of the crew of a vessel damages which constitute general average must
chartered by the month, during the time that it is necessarily be entered in the log book, stating the
embargoed or detained by force majeure or by motives and reasons for the dissent, should there
order of the government, or in order to repair the be any, and the irresistible and urgent causes
damage caused for the common benefit. which impelled the captain if he acted of his own
accord.
11. The depreciation resulting in the value of the
goods sold at arrival under stress in order to repair In the first case the minutes shall be signed by all
the vessel by reason of gross average. the persons present who could do so before taking
action, if possible; and if not, at the first
12. The expenses of the liquidation of the average. opportunity. In the second case, it shall be signed
by the captain and by the officers of the vessel.
Art. 817. If in lightening a vessel on account of a
storm, in order to facilitate its entry into a port In the minutes, and after the resolution, shall be
or roadstead, part of the cargo should be stated in detail all the goods jettisoned, and
transferred to lighters or barges and be lost, the mention shall be made of the injuries caused to
owner of said part shall be entitled to indemnity, as those kept on board. The captain shall be obliged
if the loss had originated from a gross average, the to deliver one copy of these minutes to the
amount thereof being distributed between the maritime judicial authority of the first port he may
vessel and cargo from which it came. make, within twenty four hours after his arrival, and
to ratify it immediately under oath.
If, on the contrary, the merchandise transferred
should be saved and the vessel should be lost, no Art. 860. If, notwithstanding the jettison of
liability may be demanded of the salvage. merchandise, breakage of masts, ropes, and
equipment, the vessel shall be lost running the
Art. 818. If, as a necessary measure to extinguish same risk, no contribution whatsoever by jettison of
a fire in a port, roadstead, creek, or bay, it gross average shall be proper.
should be decided to sink a vessel, this loss
shall be considered gross average, to which the The owners of the goods saved shall not be liable
vessels saved shall contribute. for the indemnification of those jettisoned, lost, or
damaged.
Essential Requisites
Magsaysay Inc. v. Agan
Art. 813. In order to incur the expenses and cause
the damages corresponding to gross average, DOCTRINE: Averages are classified into simple or
there must be a resolution of the captain, adopted particular and general or gross. Generally
after deliberation with the sailing mate and other
officers of the vessel, and after hearing the speaking, simple or particular averages include all
persons interested in the cargo who may be expenses and damages caused to the vessel or
present. cargo which have not inured to the common
benefit, and are, therefore, to be borne only by the
If the latter shall object, and the captain and
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minutes, which shall be signed by all, in the log Art. 612, Paragraph 8. The following obligations
book. shall be inherent in the office of captain:
The captain shall have the deciding vote, and xxx
the persons interested in the cargo, may make the
objections and protests they may deem proper, 8. To present himself, when making a port in
which shall be entered in the minutes in order that distress, to the maritime authority if in the
they may make use thereof in the manner they may Philippines and to the consul of the Republic of the
consider advisable. Philippines if in a foreign country, before twenty
four hours have elapsed, and to make a statement
Art. 820. An arrival shall not be considered of the name registry, and port of departure of the
lawful in the following cases: vessel, of its cargo, and the cause of arrival which
declaration shall be visaed by the authority or the
1. If the lack of provisions should arise from the consul, if after examining the same it is found to be
failure to take the necessary provisions for the acceptable, giving the captain the proper
voyage according to usage and customs, or if certificate proving his arrival in distress and the
they should have been rendered useless or lost reasons therefor. In the absence of the maritime
through bad stowage or negligence in their care. authority or of the consul, the declaration must be
made before the local authority. xxx
2. If the risk of enemies, privateers, or pirates
should not have been well known, manifest, and
based on positive and provable facts. Expenses
legitimate.
4. When malice, negligence, want of foresight,
or lack of skill on the part of the captain exists in
Otherwise, the ship agent and the captain shall
the act causing the damage.
be jointly liable.
Responsibility of Captain vessel and its cargo shall bear its own damages.
Art 832. If by reason of a storm or other cause of
Art. 823. The custody and preservation of the
force majeure, a vessel which is properly anchored
cargo which has been unloaded shall be
and moored should collide with those nearby,
intrusted to the captain, who shall be responsible
causing them damages, the injury occasioned
for the same, except in cases of force majeure.
shall be considered as particular average of the
vessel run into.
Art. 824. If the entire cargo or part thereof
should appear to be damaged, or there should
be imminent danger of its being damaged, the Culpable
captain may request of the competent judge or
court, or of the consul in a proper case, the sale
of all or of part of the former, and the person CODE OF COMMERCE
taking cognizance of the matter shall authorize it,
after an examination and declaration of experts, Art 826. If a vessel should collide with another,
advertisements, and other formalities required by through the fault, negligence or lack of skill of the
the case, and an entry in the book, in accordance captain, sailing mate, or any other member of the
with the provisions of Article 624. complement, the owner of the vessel at fault shall
indemnify the losses and damages suffered, after
The captain shall, in a proper case, justify the an expert appraisal.
legality of his conduct, under the penalty of
answering to the shipper for the price the Art 827. If the collision is imputable to both
merchandise would have brought if they had vessels, each one shall suffer its own damages,
arrived in good condition at the port of destination. and both shall be solidarily responsible for the
losses and damages occasioned to their cargoes.
Art. 825. The captain shall be responsible for the
damages caused by his delay, if after the cause Art 831. If a vessel should be forced by a 3rd
of the arrival under stress has ceased, he vessel to collide with another, the owner of the third
should not continue the voyage. vessel shall indemnify the losses and damages
caused, the captain thereof being civilly liable to
If the cause of arrival should have been the fear of said owner.
enemies, privateers, or pirates, a deliberation and
resolution in a meeting of the officers of the vessel
and persons interested in the cargo who may be Inscrutable Fault
present, in accordance with the provisions
contained in Article 819, shall precede the
departure. CODE OF COMMERCE
Art 828. The provisions of the preceding article are
Collisions: Classes and Effects applicable to the use in which it cannot be
determined which of the two vessels has caused
the collision.
Collision as applied to Maritime Commerce, an
impact or sudden contact of a vessel with another
URRUTIA & CO. VS BACO RIVER PLANTATION
whether both are in motion or one stationary
Doctrine: The steamers greater facility of
- Not necessary for one to be liable for his vessel
maneuvering over a sail vessel means it has the
to have hit another
greater ability to avoid collisions. Therefore, as a
- A shipowner or ship agent may be made liable
general rule, when meeting a sailing vessel,
even if his vessel didnt actually collide with
whether close hauled or with the wind free, the sail
another vessel (Art 831)
vessel has a right to keep her course, and it is the
duty of the steamer to adopt precautions as will
Fortuitous avoid the sail vessel.
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
acquisitionofrigging or goods, fuel, outfits, wages, take command on entering and leaving ports,
and all other expenses. He shall furthermore enter canals, roadsteads, and rivers, unless there is a
therein a listofall the membersofthe crew, stating pilot on board discharging his duties. He shall not
their domiciles, their wages and salaries, and the spend the night away from the vessel except for
amounts they may have received on account, serious causes or by reasonofofficial business.
either directly or by delivery to their families.
8. To present himself, when making a port in
In the third book, called "freight book," he shall distress, to the maritime authority if in Spain*and
record the entry and exit of all the goods, stating to the Spanish * consul if in a foreign country,
their marks and packages, names of the shippers before twenty-four hours have elapsed, and make
and of the consignees, ports of loading and a s t a t e m e n t o f t h e n a m e , re g i s t r y, a n d
unloading, and the freight earned. In the same port of departure of the vessel, of its cargo, and
book he shall record the names and reason of arrival, which declaration shall be vised
places of sailing of the passengers and the by the authority or by the consul if after examining
number of packages of which their baggage the same it is found to be acceptable, giving the
consists, and the priceofthe passage. captain the proper certificate in order to show his
arrival under stress and the reasons therefor. In the
4. To make, before receiving the freight, with the absence of marine officials or of the consul, the
officers of the crew, and the two experts, if declaration must be made before the local
required by the shippers and passengers, an authority.
examination of the vessel, in order to ascertain
whether she is watertight, and whether the rigging 9. To take the steps necessary before the
and engines are in good condition; and if she has competent authority in order to enter in the
the equipment required for good navigation, certificateofthe Commercial Registryofthe vessel
preserving a certificateofthe memorandumofthis the obligations which he may contract in
inspection, signed by all the persons who may accordance with Article 583.
have taken part therein, under their liability.
10.To put in a safe place and keep all the papers
The experts shall be appointed one by the and belongings of any members of the crew who
captain of the vessel and the other one by the might die on the vessel, drawing up a detailed
persons who request the examination, and in inventory, in the presence of passengers as
caseofdisagreement a third shall be appointed by witnesses, and, in their
the marine authorityofthe port. absence,ofmembersofthe crew.
5. To remain constantly on board the vessel with 11.To conduct himself according to the rules and
the crew during the time the freight is taken on precepts contained in the instructionsofthe agent,
board and carefully watch the stowage thereof; not being liable for all that he may do in violation
to consent to any merchandise or goods of a thereof.
dangerous character to be taken on, such as
inflammable or explosive substances, without the 12. To give an account to the agent from the port
precautions which are recommended for their where the vessel arrives, of the reason thereof,
packing, management and isolation; not to permit taking advantage of the semaphore, telegraph,
that any freight be carried on deck which by mail, etc., according to the cases; notify him the
reasonofits disposition, volume, or weight makes freight he may have received, stating the name
the work of the sailors difficult, and which might and domicile of the shippers, freight earned, and
endanger the safety of the vessel; and if, on amounts borrowed on bottomry bond, advise
account of the nature of the merchandise, the himofhis departure, and give him any information
special character of the shipment, and principally and data which may beofinterest.
the favorable season it takes place, he allows
merchandise to be carried on deck, he must hear 13. To observe the rules on the situation of lights
the opinion of the officers of the vessel, and have and evolutions to prevent collisions.
the consentofthe shippers andofthe agent.
14. To remain on board in case of danger to the
6.To demand a pilot at the expenseofthe vessel vessel, until all hope to save her is lost, and before
whenever required by navigation, and principally abandoning her to hear the officers of the crew,
when a port, canal, or river, or a roadstead or abiding by the decision of the majority; and if he
anchoring place is to be entered with which neither should have to take a boat he shall take with him,
he, the officers nor the crew are acquainted. before anything else, the books and papers, and
then the articles of most value, being obliged to
7.To be on deck at the timeofsighting land and to prove in caseofthe lossofthe books and papers
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
to the circumstances.
ERLANGER & GALINGER VS SWEDISH EAST ASIATIC CO.
Sec. 11. From the proceeds of the sale of the - time employed
things saved shall be deducted, first, the expenses - rendered services
of their custody, conservation, advertisement, and - excessive expenses incurred
auction, as well as whatever taxes or duties they - no. of persons who aided
should pay for their entrance; then there shall be - level of exposure to danger and;
deducted the expenses of salvage; and from the
net amount remaining shall be taken the reward for - whatever menaced the things recovered or
the salvage or assistance which shall not exceed salvaged and the value of the said things after
fifty per cent of such amount remaining. deducting the expenses
The public must of necessity rely on the care and Bill of Lading
skill of common carriers in the vigilance over the
goods and safety of the passengers, especially Contents
because with the modern development of science
and invention, transportation has become more CODE OF COMMERCE
rapid, more complicated and somehow more
hazardous. For these reasons, a passenger or a Art 706. The captain of the vessel and the shipper
shall have the obligation of drawing up the bill of
shipper of goods is under no obligation to conduct
lading in which shall be stated:
an inspection of the ship and its crew, the carrier
being obliged by law to impliedly warrant its 1. The name, registry, and tonnage of the vessel.
seaworthiness. 2. The name of the captain and his domicile.
3. The port of loading and that of unloading.
4. The name of the shipper.
Loans on Bottomry and Respondentia 5. The name of the consignee, if the bill of lading is
issued in the name of a specified person.
Defintions 6. The quantity, quality, number of packages and
marks of the merchandise.
Loan on bottomry is a contract in the nature of a 7. The freightage and the primage stipulated.
mortgage, by which the shipowner borrows money The bill of lading may be issued to bearer, to
for the use, equipment or repair of the vessel, and order, or in the name of a specified person, and
for a definite term, pledges the ship (or its keel and must be signed within twenty-four hours after
bottom) as a security for its repayment. the cargo has been received on board, the
shipper being entitled to demand the unloading
at the expense of the captain should the latter
If the ship is lost in the course of a voyage, or not sign it, and, in every case, the losses and
during the limited time, by any of the damages suffered thereby.
perils enumerated in the contract, then the lender
shall also lose his money. Art 707. Four true copies of the original bill of
lading shall be made, and all of them shall be
signed by the captain and the shipper. Of these,
Loan on respondentia is one made on the goods the shipper shall keep one and send another to the
laden on board the ship, and which are to be sold consignee; the captain shall take two, one for
or exchanged in the course of the voyage the himself and another for the ship agent.
borrowers personal responsibility being deemed
the principal security for the performance of the There may also be drawn up as many copies of the
bill of lading as may be considered necessary by
contract, which is called respondentia. the person interested; but when they are issued to
order or to bearer, they shall be stated in all the
Even though the ship perishes, the lender must be copies, be they the first four or the subsequent
paid his principal and interest, provided that the ones, the destination of each one, stating whether
goods are saved. it is for the agent, for the captain, for the shipper, or
for the consignee. If the copy sent to the latter
should have a duplicate, this circumstance and the
Character of Loan fact that it is not valid except in default of the first
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
Notes:
one must be stated therein.
Art 713. If before the delivery of the cargo a new In Art 709, the bill of lading properly drawn is proof
bill of lading should be demanded of the captain, between all the parties of their agreements.
on the allegation that the failure to present the
previous ones is due to their loss or to any other In Art 710, it governs the case where the bills of
just cause, he shall be obliged to issue it, provided
lading dont agree and no charge or erasure can be
that security for the value of the cargo is given to
his satisfaction, but without changing the observed in either of them.
consignment, and stating therein the
circumstances prescribed in the last paragraph of When theres a conflict in the provisions of the
Article 707, under penalty, should he not so state, charter party and the bill of lading, even if both
of being held liable for said cargo if improperly
seem to be unaltered, the contents of the bill of
delivered through his fault.
lading prevail.
Art 714. If before the vessel puts to sea the captain
should die or should cease to hold his position MAGELLAN MANUFACTURING MARKETING CORP VS CA
through any cause, the shippers shall have the It is a long standing jurisprudential rule that a bill of
right to demand of the new captain the ratification lading operates both as a receipt and as a contract.
of the first bills of lading, and the latter must do so,
It is a receipt for the goods shipped and a contract
provided that all the copies previously issued be
presented or returned to him, and it should appear to transport and deliver the same as therein
from all examination of the cargo that they are stipulated.
correct.
As a contract, it names the parties, which includes
The expenses arising from the examination of the
the consignee, fixes the route, destination, and
cargo shall be defrayed by the ship agent, without
prejudice to the right of action of the latter against freight rates or charges, and stipulates the rights
the first captain if he ceased to be such through and obligations assumed by the parties. Being a
his own fault. Should said examination not be contract, it is the law between the parties who are
made, it shall be understood that the new captain bound by its terms and conditions provided that
accepts the cargo as it appears from the bills of
these are not contrary to law, morals, good
lading issued.
customs, public order and public policy. A bill of
lading usually becomes effective upon its delivery
Probative Value to and acceptance by the shipper. It is presumed
that the stipulations of the bill were, in the absence
CODE OF COMMERCE of fraud, concealment or improper conduct, known
to the shipper, and he is generally bound by his
Art 709. A bill of lading drawn up in accordance acceptance whether he reads the bill or not.
with the provisions of this title shall be proof as
between all those interested in the cargo and
between the latter and the insurers, proof to the Notes:
contrary being reserved for the latter.
A bill of lading operates both as a:
Art 710. If the bills of lading do not agree, and no 1. receipt for the goods shipped which contains
change or erasure can be observed in any of date, place of shipment, goods description,
them, those possessed by the shipper or
consignee signed by the captain shall be proof conditions, quality and value
against the captain or ship agent in favor of the 2. contract to transport and deliver the goods as
consignee or shipper; and those possessed by the stipulated, which contains parties names, fixed
captain or ship agent signed by the shipper shall route, destination and freight charges, rights
be proof against the shipper or consignee in favor and obligations assumed by the parties.
of the captain or ship agent.
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
TRANS-ASIA SHIPPING VS CA
Rights of Passengers Art 698 must be read together with Art 2199, 2200,
2201 and 2208 in relation to Art 21 of the Civil
Code. IN doing so, there was no delay on Trans-
CODE OF COMMERCE Asia and therefore Arroyo is not entitled to actual
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
Section 1. That the provisions of Public Act
RISKS
Numbered Five hundred and twenty-one of the
Seventy-fourth Congress of the United States,
Section 2. Subject to the provisions of section 6,
approved on April sixteenth, nineteen hundred and
under every contract of carriage of goods by sea,
thirty-six, be accepted, as it is hereby accepted to
the carrier in relation to the loading handling,
be made applicable to all contracts for the
stowage, carriage, custody, care, and discharge of
carriage of goods by sea to and from Philippine
such goods, shall be subject to the responsibilities
ports in foreign trade:Provided, That nothing in
and liabilities and entitled to the rights and
the Act shall be construed as repealing any
immunities hereinafter set forth.
existing provision of the Code of Commerce
which is now in force, or as limiting its
RESPONSIBILITIES AND LIABILITIES
application.
Approved: October 22,1936.
(a) Make the ship seaworthy;
An Act Relating to the Carriage of Goods by
(b) Properly man, equip, and supply the ship;
Sea.
TITLE I
(3) After receiving the goods into his charge the
furnished in writing by the shipper. goods should have been delivered: Provided,
That if a notice of loss or damage, either
(c) The apparent order and condition of the goods: apparent or concealed, is not given as provided
Provided, That no carrier, master, or agent of the for in this section, that fact shall not affect or
carrier, shall be bound to state or show in the bill of prejudice the right of the shipper to bring suit
lading any marks, number, quantity, or weight within one year after the delivery of the goods
which he has reasonable ground for suspecting or the date when the goods should have been
not accurately to represent the goods actually delivered.
received, or which he has had no reasonable
means of checking. In the case of any actual or apprehended loss or
damage the carrier and the receiver shall give all
(4) Such a bill of lading shall be prima facie reasonable facilities to each other for inspecting
evidence of the receipt by the carrier of the goods and tallying the goods.
as therein described in accordance with
paragraphs (3) (a), (b), and (c) of this section: (7) After the goods are loaded the bill of lading to
Provided, That nothing in this Act shall be be issued by the carrier, master, or agent of the
construed as repealing or limiting the application carrier to the shipper shall, if the shipper so
of any part of the Act, as amended, entitled "An demands, be a "shipped" bill of lading Provided,
Act relating to bills of lading in interstate and That if the shipper shall have previously taken up
foreign commerce," approved August 29, 1916 (U. any document of title to such goods, he shall
S. C. title 49, secs. 81-124), commonly known as surrender the same as against the issue of the
the "Pomerene Bills of Lading Act." "shipped" bill of lading, but at the option of the
carrier such document of title may be noted at the
(5) The shipper shall be deemed to have port of shipment by the carrier, master, or agent
guaranteed to the carrier the accuracy at the time with name or name the names of the ship or ships
of shipment of the marks, number, quantity, and upon which the goods have been shipped and the
weight, as furnished by him; and the shipper shall date or dates of shipment, and when so noted the
indemnify the carrier against all loss damages, and same shall for the purpose of this section be
expenses arising or resulting from inaccuracies in deemed to constitute a "shipped" bill of lading.
such particulars. The right of the carrier to such
indemnity shall in no way limit his responsibility (8) Any clause, covenant, or agreement in a
and liability under the contract of carriage or to any contract of carriage relieving the carrier or the ship
person other than the shipper. from liability for loss or damage to or in connection
with the goods, arising from negligence, fault, or
-IMPORTANT! PRESCRIPTIVE PERIOD FOR failure in the duties and obligations provided in this
LOSS/DAMAGE- section, or lessening such liability otherwise than
(6) Unless notice of loss or damage and the as provided in this Act, shall be null and void and
general nature of such loss or damage be given in of no effect. A benefit of insurance in favor of the
writing to the carrier or his agent at the port of carrier, or similar clause, shall be deemed to be a
discharge before or at the time of the removal of clause relieving the carrier from liability.
the goods into the custody of the person entitled to
delivery thereof under the contract of carriage, RIGHTS AND IMMUNITIES
such removal shall be prima facie evidence of the
delivery by the carrier of the goods as described in Section 4.(1) Neither the carrier nor the ship shall
the bill of lading. If the loss or damage is not be liable for loss or damage arising or resulting
apparent, the notice must be given within three from unseaworthiness unless caused by want of
days of the delivery. due diligence on the part of the carrier to make the
ship seaworthy, and to secure that the ship is
Said notice of loss or damage maybe endorsed properly manned, equipped, and supplied, and to
upon the receipt for the goods given by the person make to the holds, refrigerating and cool
taking delivery thereof. chambers, and all other parts of the ship in which
goods are carried fit and safe for their reception,
The notice in writing need not be given if the state carriage, and preservation in accordance with the
of the goods has at the time of their receipt been provisions of paragraph (1) of section 3. Whenever
the subject of joint survey or inspection. loss or damage has resulted from
unseaworthiness, the burden of proving the
In any event the carrier and the ship shall be exercise of due diligence shall be on the carrier or
discharged from all liability in respect of loss or other persons claiming exemption under the
damage unless suit is brought within one year section.
after delivery of the goods or the date when the
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
(2) Neither the carrier nor the ship shall be -LIMITING PROVISION!-
responsible for loss or damage arising or resulting (5) Neither the carrier nor the ship shall in any
from event be or become liable for any loss or
damage to or in connection with the
(a) Act, neglect, or default of the master, mariner, transportation of goods in an amount
pilot, or the servants of the carrier in the navigation exceeding $500 per package lawful money of
or in the management of the ship; the United States, or in case of goods not
(b) Fire, unless caused by the actual fault or privity shipped in packages, per customary freight
of the carrier; unit, or the equivalent of that sum in other
(c) Perils, dangers, and accidents of the sea or currency, unless the nature and value of such
other navigable waters; goods have been declared by the shipper
(d) Act of God; before shipment and inserted in the bill of
(e) Act of war, lading. This declaration, if embodied in the bill
(f) Act of public enemies; of lading, shall be prima facie evidence, but
(g) Arrest or restraint of princes, rulers, or people, shall not be conclusive on the carrier.
or seizure under legal process;
(h) Quarantine restrictions; By agreement between the carrier, master, or
(i) Act or omission of the shipper or owner of the agent of the carrier, and the shipper another
goods, his agent or representative; maximum amount than that mentioned in this
(j) Strikes or lockouts or stoppage or restraint of paragraph may be fixed: Provided, That such
labor from whatever cause, whether partial or maximum shall not be less than the figure
general; Provided, That nothing herein contained above named. In no event shall the carrier be
shall be construed to relieve a carrier from liable for more than the amount of damage
responsibility for the carrier's own acts; actually sustained.
(k) Riots and civil commotions
(l) Saving or attempting to save life or property at Neither the carrier nor the ship shall be
sea; responsible in any event for loss or damage to
(m) Wastage in bulk or weight or any other loss or or in connection with the transportation of the
damage arising from inherent defect, quality, or goods if the nature or value thereof has been
vice of the goods; knowingly and fraudulently misstated by the
(n) Insufficiency of packing; shipper in the bill of lading.
(o) Insufficiency of inadequacy of marks;
(p) Latent defects not discoverable by due (6) Goods of an inflammable, explosive, or
diligence; and dangerous nature to the shipment whereof the
(q) Any other cause arising without the actual fault carrier, master or agent of the carrier, has not
and privity of the carrier and without the fault or consented with knowledge of their nature and
neglect of the agents or servants of the carrier, but character, may at any time before discharge be
the burden of proof shall be on the person claiming landed at any place or destroyed or rendered
the benefit of this exception to show that neither innocuous by the carrier without compensation,
the actual fault or privity of the carrier nor the fault and the shipper of such goods shall be liable for
or neglect of the agents or servants of the carrier all damages and expenses directly or indirectly
contributed to the loss or damage. arising out of or resulting from such shipment. If
any such goods shipped with such knowledge and
(3) The shipper shall not be responsible for loss or consent shall become a danger to the ship or
damage sustained by the carrier or the ship arising cargo, they may in like manner be landed at any
from any cause without the act, fault, or neglect of place, or destroyed or rendered innocuous by the
the shipper, his agents, or servants. carrier without liability on the part of the carrier
except to general average, if any.
(4) Any deviation in saving or attempting to save
life or property at sea, or any reasonable deviation SURRENDER OF RIGHTS AND IMMUNITIES AND
shall not be deemed to be an infringement or INCREASE OF RESPONSIBILITIES AND
breach of this Act or of the contract of carriage, LIABILITIES -WAIVER ALLOWED-
and the carrier shall not be liable for any loss or
damage resulting therefrom: Provided, however, Section 5. A carrier shall be at liberty to
That if the deviation is for the purpose of loading surrender in whole or in part all or any of his
cargo or unloading cargo or passengers it shall, rights and immunities or to increase any of his
prima facie, be regarded as unreasonable. responsibilities and liabilities under this Act,
provided such surrender or increase shall be
embodied in the bill of lading issued to the
shipper.
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
TITLE II
The provisions of this Act shall not be applicable to
charter parties; but if bills of lading are issued in Section 9. Nothing contained in this Act shall be
the case of a ship under charter party, they shall construed as permitting a common carrier by
comply with the terms of this Act. Nothing in this water to discriminate between competing shippers
Act shall be held to prevent the insertion in a bill of similarly place in time and circumstances, either
lading of any lawful provision regarding general (a) with respect to the right to demand and receive
average. bills of lading subject to the provisions of this Act;
or (b) when issuing such bills of lading, either in
SPECIAL CONDITIONS the surrender of any of the carrier's rights and
immunities or in the increase of any of the carrier's
Section 6. Notwithstanding the provisions of the responsibilities and liabilities pursuant to section 6,
preceding sections, a carrier, master or agent of title I, of this Act or (c) in any other way prohibited
the carrier, and a shipper shall, in regard to any by the Shipping Act, 1916, s amended.
particular goods be at liberty to enter into any
agreement in any terms as to the responsibility and Section 10.Section 25 of the Interstate Commerce
liability of the carrier for such goods, and as to the Act is hereby amended by adding the following
rights and immunities of the carrier in respect of proviso at the end of paragraph 4 thereof:
such goods, or his obligation as to seaworthiness "Provided, however, That insofar as any bill of
(so far as the stipulation regarding seaworthiness lading authorized hereunder relates to the carriage
is not contrary to public policy), or the care or of goods by sea, such bill of lading shall be
diligence of his servants or agents in regard to the subject to the provisions of the Carriage of Goods
loading, handling stowage, carriage, custody, by Sea Act.
care, and discharge of the goods carried by sea:
Provided, That in this case no bill of lading has Section 11.Where under the customs of any trade
been or shall be issued and that the terms agreed the weight of any bulk cargo inserted in the bill of
shall be embodied in a receipt which shall be a lading is a weight ascertained or accepted by a
non-negotiable document and shall be marked as third party other than the carrier or the shipper, and
such. the fact that the weight is so ascertained or
accepted is stated in the bill of lading, then,
Any agreement so entered into shall have full legal notwithstanding any thing in this Act, the bill of
effect:Provided, That this section shall not apply to lading shall not be deemed to be prima facie
ordinary commercial shipments made in the evidence against the carrier of the receipt of goods
ordinary course of trade but only to other of the weight so inserted in the bill of lading, and
shipments where the character or condition of the the accuracy thereof at the time of shipment shall
property to be carried or the circumstances, terms, not be deemed to have been guaranteed by the
and conditions under which the carriage is to be shipper.
performed are such as reasonably to justify a
special agreement. Section 12.Nothing in this Act shall be construed
as superseding any part of the Act entitled "An act
Section 7. Nothing contained in this Act shall relating to navigation of vessels, bills of lading, and
prevent a carrier or a shipper from entering into to certain obligations, duties, and rights in
any agreement, stipulation, condition, reservation, connection with the carriage of property,"
or exemption as to the responsibility and liability of approved February 13,1893, or of any other law
the carrier or the ship for the loss or damage to or which would be applicable in the absence of this
in connection with the custody and care and Act, insofar as they relate to the duties,
handling of goods prior to the loading on and responsibilities, and liabilities of the ship or carrier
subsequent to the discharge from the ship on prior to the time when the goods are loaded on or
which the goods are carried by sea. after the time they are discharged from the ship.
Section 8. The provisions of this Act shall not Section 13.This Act shall apply to all contracts for
affect the rights and obligations of the carrier carriage of goods by sea to or from ports of the
under the provisions of the Shipping Act, 1916, or United States in foreign trade. As used in this Act
under the provisions of section 4281 to 4289, the term "United States" includes its districts,
inclusive, of the Revised Statutes of the United territories, and possessions: Provided, however,
States, or of any amendments thereto; or under the That the Philippine legislature may by law exclude
provisions of any other enactment for the time its application to transportation to or from ports of
being in force relating to the limitation of the liability the Philippine Islands. The term "foreign trade"
of the owners of seagoing vessels. means the transportation of goods between the
ports of the United States and ports of foreign
Page 99 of 107
Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
Purposes
gratuitous carriage by aircraft performed by an air
- The Warsaw Convention was designed to protect
transport undertaking.
and promote the international airline industry that
was at the time of the drafting of the treaty, still in
Notes:
its infancy.
Applicability
The transportation must be:
Constitutionality
1. International transportation
2. Air Transportation
SANTOS VS NORTHWEST
3. Carriage of passengers, baggage or goods
The SC in this case relied on the presumption of
constitutionality in rejecting the challenge on the
I n t e r n a t i o n a l Tr a n s p o r t a t i o n T h e r e i s
constitutionality of the Warsaw Convention. The
international transportation within the contemplation
Court explained that the treaty which is the subject
of the Warsaw Convention when:
matter of this petition was a joint legislative-
(1) The place of departure and the place of
executive act. the presumption is that it was first
destination are within the territories of two
carefully studied and determined to be
contracting countries regardless of whether or
constitutional before it was adopted and given force
not there was a break in the transportation or
of law in this country.
transshipment;
(2) The place of departure and the place of
The SC also rejected the claim that the doctrine of
destination are within the territory of a single
rebus sic stantibus applies. It was argued that the
contracting country if there is an agreed
conditions prevailing at the time the WC was
stopping place within a territory subject to the
drafted allegedly already ceased to exist. The Court
sovereignty, mandate or authority of another
relied on the following ruling when rejecting that
power, even though the power is not a party to
argument: The Warsaw drafters wished to create a
the Convention.
system of liability rules that would cover all the
hazards of air travel The Warsaw delegates knew
Period Covered by International Transportation
that, in the years to come, civil aviation would
- International transportation by air under the WC
change in ways that they could not foresee. They
means the period during which the baggage or
wished to design a system of air law that would be
goods are in the charge of the carrier, whether in
both durable and flexible enough to keep pace with
an airport or on board an aircraft, or in the case
the changes The ever-changing needs of the
of a landing outside an airport, in any place
system of civil aviation can be served within the
whatsoever.
framework they created.
- It doesnt cover any transportation by land, by
sea, or by river performed outside an airport
Its true that at the time the Warsaw Convention
- If transportation takes place in the performance
was drafted, the airline industry was still at its
of a contract for transportation by air, for the
infancy. However, that circumstance alone is not
purpose of loading, delivery or transshipment,
sufficient justification for the rejection of the treaty
any damage is presumed, subject to proof to the
at this time. The changes recited by petitioner were,
contrary, to have been the result of an event
realistically, not entirely unforeseen although they
which took place during the transportation by air.
were expected in a general sense only.
WARSAW CONVENTION
WARSAW CONVENTION
Art 22.
PAN AM VS IAC
1. In the carriage of passengers the liability of the Parties may stipulate a limit on the air carriers
carrier for each passenger is limited to the sum of liability subject to the declaration of a higher value
125,000 francs. Where, in accordance with the law and payment of additional charges.
of the Court seized of the case, damages may be
awarded in the form of periodical payments, the
equivalent capital value of the said payments shall When Limitations Unavailable
not exceed 125,000 francs. Nevertheless, by
special contract, the carrier and the passenger WARSAW CONVENTION
may agree to a higher limit of liability
Art 3.
2. In the carriage of registered luggage and of
goods, the liability of the carrier is limited to a sum 1. For the carriage of passengers the carrier must
of 250 francs per kilogram, unless the consignor deliver a passenger ticket which shall contain the
has made, at the time when the package was following particulars:
handed over to the carrier, a special declaration of
the value at delivery and has paid a a. the place and date of issue;
supplementary sum if the case so requires. In that b. the place of departure and of destination;
case the carrier will be liable to pay a sum not c. the agreed stopping places, provided that the
exceeding the declared sum, unless he proves carrier may reserve the right to alter the stopping
that that sum is greater than the actual value to the places in case of necessity, and that if he
consignor at delivery. exercises that right, the alteration shall not have
the effect of depriving the carriage of its
3. As regards objects of which the passenger international character;
takes charge himself the liability of the carrier is d. the name and address of the carrier or carriers;
limited to 5,000 francs per passenger. e. a statement that the carriage is subject to the
rules relating to liability established by this
4. The limits prescribed in this Article shall not Convention.
prevent the court from awarding, in accordance
with its own law, in addition, the whole or part of 2. The absence, irregularity or loss of the
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
passenger ticket does not affect the existence or good condition and in accordance with the
the validity of the contract of carriage, which shall document of carriage.
none the less be subject to the rules of this
Convention. Nevertheless, if the carrier accepts a 2. In the case of damage, the person entitled to
passenger without a passenger ticket having been delivery must complain to the carrier forthwith after
delivered he shall not be entitled to avail himself of the discovery of the damage, and, at the latest,
those provisions of this Convention which exclude within three days from the date of receipt in the
or limit his liability. case of luggage and seven days from the date of
receipt in the case of goods. In the case of delay
Art 25. the complaint must be made at the latest within
fourteen days from the date on which the luggage
8. t h e c o u r t w h e r e t h e c a r r i e r h a s a n UNITED AIRLINES VS UY
establishment by which he contract has been The court distinguished between (1) damage to a
made passengers baggage and (2) the humiliation
9. the court of the place of destination suffered from the employees. 1 is covered by the
WC, which prescribes in 2 years. 2 is covered by
Art 28(1) of the WC is jurisdictional in character. the law on torts in the NCC, and it prescribes in 4
years.
LUNA VS CA
Failure to file a claim with the common carrier as Notes:
mandated by the provisions of the WC should not
be a ground for the summary dismissal of the Notice of Claim or Complaint
complaints because the PR may still be held liable - must be written
for breach of other relevant laws which may provide - the complaint is a condition precedent. Without
a different period or procedure for filing a claim. the complaint, the action is barred except in case
of fraud on the part of the carrier
Luna also argued that Art 25 of the WC operates to
exclude the other provisions of the WC if the The complaint must be made within:
damage is caused by the common carriers willful If damage to luggage 3 days from receipt
misconduct. SC says that this is wrong because Art If damage to goods 7 days from receipt
25 only refers to the monetary ceiling on damages If delay to luggage or goods 14 days from
found in Art 22 should damage be caused by the receipt
carriers willful misconduct. Hence, only the
provisions of Art 22 limiting the carriers liability and Prescriptive Periods:
imposing a monetary ceiling in case of willful - The action must be filed within 2 years from:
misconduct on its part is the provisions that the Date of arrival at destination
carrier may not invoke. Date of expected arrival
Date which the transportation stopped
LHUILLIER VS BRITISH AIRWAYS
The filing of the case in proper venues provided for Passenger Rights
under Art 28(1) of the WC is still required even if
there are allegations of tortious conduct committed
against an airline passenger during the course of Joint DOTC-DTI AO 01-12
the international carriage. Allegations of tort do not Subject: Providing for a Bill of Rights for Air
bring the case outside the ambit of the Warsaw Passengers and Carrier Obligations
Convention.
1.Right to be Provided with Accurate
PAL VS SAVILLO Information Before Purchase
Present case involves a special species of injury
a.Right to full, fair, and clear disclosure of the
resulting from the failure of PAL and/or Singapore services offered and all the terms and conditions of
Airlines to transport private respondent from the contract of carriage
Singapore to Jakarta the profound distress, fear,
anxiety and humiliation that private respondent b.Right to clear and non-misleading
experienced when, despitePALsearlier assurance advertisements of, and important reminders
regarding fares
that Singapore Airlines confirmed his passage, he
was prevented from boarding the plane and he c.Right against misleading and fraudulent sales
faced the daunting possibility that he would be promotion practices
stranded in Singapore Airport because the PAL
office was already closed. 2.Right to Receive the Full Value of the Service
Purchased
a.Right to transportation and baggage conveyance
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Transportation Law Reviewer Delfin, Melicor, Matunog (D2019)
3.Right to Compensation