MARINE TRANSPORTATION Vessels or Watercraft are: 1. Any: a. barge; b. lighter; c. bulk carrier; d. passenger ship; e. freighter; f. tanker; g.

container ship; h. fishing boat or i. other artificial contrivance utilizing any source of motive power; 2. designed, used or capable of doing used as a means of water transportation 3. operating either as common contract carrier, 4. including fishing vessels covered under PD 43, except: a. those owned and/or operated by the AFP and by foreign governments for militar y purposes, and b. bancas, sailboats and other waterbome contrivance of less than 3 gross tons c apacity and not motorized. MARINA [Maritime industry Authority] Functions: 1. Issue Certificates of Public Convenience for the operation of domestic and ov ersea water carriers 2. Register and issue certificates, licenses, or documents necessary or incident thereto Nature of Maritime contracts: Admiralty jurisdiction over a contract as maritime ,such contract must relate to the trade and business of the sea ,it must provide for maritime transactions or maritime casualties. RTC have exclusive jurisdiction over admiralty and maritime cases where claim th e claim or demand(or worth of shipment lost) exceeds P300,000 or in Metro Manila where such demand or claim exceeds P400000. If less ,then it may be tried by lo wer courts under the Rule on Summary Procedure for Special Cases.

How OWNERSHIP of MERCHANT VESSELS may be Acquired: 1. By any means recognized by law (Art. 712 Civil Code): a. By law b. By donation c. By testate and intestate succession d. in consequence of certain contracts e. By tradition

2. By Prescription a. 3 years * if possession thereof was in good faith & with just title b.10 years in the absence of above requisites Requisites for legal Acquisition of a merchant Vessel 1. Must appear in a written instrument 2. Must be recorded in the registry of vessels to bind third persons.

WHAT KIND OF PROPERTY IS A VESSEL? 1. PERSONAL property 2. BUT the ownership thereof is evidenced by a certificate of ownership and the transfer thereof to be binding on 3rd persons must be registered in their proper registry.

A vessel more than 3 tons owned by Filipino citizens or corporation at least 60% of the capital of which belongs to said citizens shall be registered with the Maritime Industry Authority. -- the registration of those 3 tons or less is optional. -- thereafter, if vessel is more than 15 tons gross, it shall be issued a certif icate of Philippine registry. The taking of a certificate of Philippine registr y of 15 tons or less is optional. However, it domestic vessel not less than 5 t ons does not take a certificate of Philippine Registry ,it shall be issued a cer tificate of ownership. A foreign vessel under charter or lease to a Filipino national may be issued a t emporary certificate of registration under the following conditions: 1.said charter or lease is with the approval of MARINA 2.duration is less than 1 year 3.used exclusively in coastwise trade unless otherwise permitted by Marina to be used for overseas trade 4.operation entirely in the hands of Filipinos 5.vessel manned by completely Filipino crew 2005 notes: the records of the Bureau of Coast guard at the port of entry where the vessel is registered, which now is charged with registration of vessels oper ating in Philippine Waters would reveal the desired information. 2005 notes: Vessels are movable property hence, may be the subject of a chattel mortgage. The contract should however be registered with the Bureau of Coast Gua rd -- however, between a mortgage right on the vessel and the claim of persons who successfully salvaged the vessel, the latter is entitled to better preference. --as such,PD 214 created a preferential lien in favor of a mortgage bank or fina ncial institution funding the construction ,acquisition or purchase of the vesse l.

When Repair and Maintenance of Vessel During the voyage is Required: 1. if the captain has to: a. Contract obligation for the repair equipment of the vessel b. Obtain loans on bottomry 2. Captain shall apply to: a. if he is in RP territory the judge or court b. if he is outside RP territory * Filipino consul if there is one * Judge or court of the local proper authority if one is available 3. Captain must present: a. certificate of registry of the vessel, and b. instruments proving the obligation contracted 4. Omission of this formality shall make the captain personally liable for the c redits which may be prejudiced through his fault.

ORDER OF PREFERENCE IN CASE OF SALE OF VESSEL A preferred Order Judicial Kind Both of Overseas Preference Applicability 1978 of Safe and 1969 domesticextrajudicial Effectivity mortgage shall have priority over all claims against the vessel, exc P.D. 1521anddate overseas shipping R.A. 6106shipping only ept the following preferences in the order stated: 1. Judicial costs of the proceedings; 2. Taxes due the Philippine Government; 3. Salaries and wages of the Captain and Crew of the vessel during its last voya ge; 4. General average or salvage including contract salvage, bottomry loans and ind emnity die shippers for the value of goods transported but which were not deliv ered to the consignee; 5. Costs of repair and equipment of the vessel, and provisioning of food, suppli es and fuel during its last voyage and The preferred mortgage lien shall have in time 6. Preferred mortgages registered priorpriority over all claims against the vess el; except the following preferences in the order stated: 1. Expenses and fees allowed and costs taxed by the court and taxes due to the G overnment; 2. Crew s wages; 3. General average; 4. Salvage, including contract salvage; 5. Maritime liens arising prior in time to the recording of the preferred mortga ge; 6. Damages arising out of port; and 7. Preferred mortgage ministered prior to time. 4blue 95 notes: Effect of sale. All pre-existing claims in the vessel are termin ated. They will then be satisfied from the proceeds of the said subject to the o rder of preference.

Right to the Freightage of the Vessel Sold (Art. 577)

1. if sale takes place while on voyage - BUYER a. is entitled to all freightage earned from the time vessel received her last c argo b. is obliged to pay the crew and other person who go to make up the vessel s comp lement for said voyage unless there is an agreement to the contrary.

2. if the sale takes place AFTER arrival of the vessel at port of destination LLER a. who is obliged to pay the crew and other person who go to make up the vessels complement for said voyage b. unless there is an agreement to the contrary

SE

REAL AND HYPHOTHECARY RULE (DOCTRINE OF LIMITED LIABILITY) NO vessel ,no liability Shipowner s or agent s liability is merely co-extensive with his interest in the ves sel such that a total loss thereof results in the extinction. The total destruct ion of the vessel extinguishes maritime liens since there is no longer any res t o which it can be attach (Monarch v CA) Basis of liability of the vessel to the passenger is the contract of carriage ,n ot tort, and the vessel is liable for the negligence or willful act of the carri er s employees although they acted beyond the scope of their authority ,or even i n violation of the carrier s instructions. Damages may be imposed if the carrier a cted recklessly. Real and hyphothecary nature of maritime law simply means that the liability of the carrier in connection with losses related

to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which stands as the guaranty for their settlement. * liability of the vessel owner and agent arising from the operation of such ves sel were confined to the vessel itself, its equipment, freight ,and insurance, i f any, which limitation served to induce capitalists into effectively wagering t heir resources against the consideration of the large profits attainable in the trade. * Only time the Limited Liability does not apply is when there is an actual find ing of negligence on the part of the vessel owner or agent.

The shipowner and the ship agent are liable under the law in certain instances f or acts of the captain under Article 586, Code of Commerce under the same provi sion, they are liable for contracts entered into by the captain for repair of th e vessel or to obtain provisions or supplies for the vesselunder Article 587, Co de of Commerce, they are liable for damages due third persons because to the con duct of the captain they are liable for tort committed by the captain they are also liable in case of collision 2006 notes:When shipowner was equality negligent, it cannot escape liability by virtue of the limited liability rule (Central Shipping Co, vs. Insurance Co. of N. America , G.R. No. 150751. September 20, 2004) > The limited liability doctrine applies not only to the goods but also in all c ases like death or injury to passengers, (Heirs of Ampare Delos Santos vs. CA, 1 86 SCRA 649) > The rights of a vessel owner of agent under the limited liability rule are aki n to those of the rights of shareholders to limited liability under our Corporat ion laws. In both insolvency of a corporation and the sinking of a vessel the cl aimants or creditors are limited in their recovery to the remaining value of acc essible assets ( Aboitiz Shipping Corp. vs. General Accident Fire and Life Assur ance Corp. 217 SCRA 359) 4blue 95 notes: act of overloading vessel is negligence on part of his agent mak ing owner liable to the heirs of passengers under the contract of transportation , the total loss ,even under hypothecary rule will not free him from liability to passengers. 4blue 95 notes: Limitied liability is not applicable when there is actual findin g of negligence on part of the vessel owner or agent (even a small negligence fi nding negates limited liability)

GENERAL RULE: the liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessels is entirely lost, the obliga tion is extinguished Exceptions to the rule on limited liability: 1. when the shipowner is at fault. * Don Juan case where the vessel departed although PAGASA already warned that th

ere is already an oncoming strong typhoon. And the vessel encountered that stron g typhoon because it delayed its departure. Had it left on time, it would not ha ve encountered the typhoon. The departure was delayed, because the captain overl oaded it and the shipowner was aware of that and he did not order the captain to leave immediately. The vessel was overloaded, did not have radar which could ha ve allowed it to navigate for shelter. * A fishing vessel entered into a contract to transport 2500 cases of Coca Cola. It was a fishing vessel, so it was not equipped and designed to carry cargoes. It was not seaworthy to carry cargo, especially 2500 cases of softdrinks. So it became top heavy. The Court said that the liability of the shipowner is not exti nguished. But for the liability to subsist, it should be the shipowner who is at fault. If it is the captain who is at fault, then the liability of the shipowner will be extinguished. The shipowner must be personally at fault. 2. If the vessel is insured, then the liability will not be extinguished because the proceeds of the insurance will take the place of the vessel. The liability will be limited to the proceeds of the insurance. the first consignee of the goods who was able to get a final judgment cannot col lect because there were other consignees who were still suing. So you have to wa it until all claims have been adjudicated so that the claimants can be paid pro rata from the proceeds of the insurance. 3. The Court has said that liabilities for repairs and provisioning the vessel, before their loss, is not extinguished if the vessel sinks. 4. No abandonment of the ship which is not entirely lost 5. Workmen s compensation claim 6. Breach of Duty to maintain ship in seaworthy condition Vessel can only be considered sea worthy if both vessel and cargo are sea worthy . In fortuitous event, the vessel must also be seaworthy in order to escape liab ility. RULES: 1. Ship is not lost but cargoes were damage or lost, passengers died or injured. Shipowner s liability is limited by the value of the ship with all her equipments, freightage earned during the voyage provided they abandoned the ship since wit hout abandonement ,shipowner cannot avail of the limited liability rule (Luzon S tevedoring v CA) 587 applies only when captain is the one who was at fault or negligent. If shipo wner is also at fault or negligent, the provision of the Civil code on common ca rrier is applied. 2. Ship is totally lost No vessel ,No liability . The total loss extinguished liability since there is no l onger any res to which they can be attached. 4blue 95 notes: if captain is at fault, owner of vessel is free from liability f or loss of cargo, as such liabliity is limited to the extent of his interest in the ship. Total loss of the ship results in the total loss of his interest in t he same, however, if loss of life, his liability is governed by the civil code w hich provides for his use of extraordinary diligence. ABANDONMENT Abandonment of the vessel is necessary to limit the liability of the shipowner.

It is equivalent to an offer the value of the vessel, her equipment an freight e arned in return for an exemption from liability. The only instance were abandonment is dispensed with is when the vessel is entir ely lost (Luzon Stevedoring vs. CA 156 SCRA 169). The owner can escape from his CIVIL liability in the cases mentioned by law by a bandoning his property in the ship and any freight earned in the voyage. 4blue 95 notes:When ABANDONMENT is made in the instances provided by law, It can not be refused.

Effects of the right to ABANDONMENT The owner and ship agent s liability: 1. is COEXTENSIVE with his interest in the vessel and its freight and 2. CEASES by abandonment and surrender of these to the parties sustaining the lo ss Who can 1. Ship 2. Ship 3. Part make ABANDONMENT in Maritime Transportation? Owner Art. 587 Agent Art. 587 Owner Art. 590

When ABANDONMENT in Maritime Transportation Can be made: For civil liability to third persons arising from the conduct of the captain in the vigilance over the goods which the vessel carried (Art. 587) For the proportionate contribution of co-owners or the vessel to a common fund f or the results of the acts of the captain (Art. 590) For civil liability incurred by the ship owner in case of collision (Art. 837) Why Ship Owners and Ship Agents are given the right to Abandonment: 1. To offset against the innumerable hazards and perils of the sea 2. To encourage ship building and marine commerce (Heirs of Amparo vs. de los Sa ntos 168 SCRA 649)

RIGHT OF ABANDONMENT OF THE FOLLOWING: SHIPOWNER OR 1. In Instances Goods case Vesselshipped What may CONSIGNEEbe abandoned SHIP AGENT of civil liability from indemnities to third persons (Art. 587); 2. Sec. 138, Insurance Code; 3. In case of leakage of at least 3/4 of the contents of a cargo containing liqu 1. (Art. non-delivery where the goods are useless without the others (Art. 363 idsPartial687) ); 2. goods are rendered useless for sale or consumption for the purpose for which they are properly destined (Art. 365); and 1. Transfer of ownership of Effects 3. In case of delay through the fault of thethe shipowner to 71). shippers or in vessel from carrier (Art. 3 the surer. 2. In case of (2 above) the insurer must pay the insured as if there was actual 1. Transfer of ownership total loss of the vessel on the goods from the shipper to the carrier. 2. Carrier should pay the shipper the market value of the goods of the point of destination. When the ship owner of ship agent may be held liable for MORE than the value of

the vessel: 1. When the vessel is PROPERLY INSURED 2. When the ship owner of ship agent is at FAULT 3. When the liability for REPAIRS of the vessel was incurred BEFORE the loss of such vessel 4. When the vessel is NOT ENTIRELY LOST and the shipowner does NOT abandon such vessel 5. When the liability is one that arises from the provisions of the labor code 6. When the voyage is NOT maritime, but only in a river bay, of gulf 7. When the vessel is NOT acting as a common carrier by a private carrier

Abandonement of the vessel includes the following objects. 1.vessel itself 2.equipment 3.freightage 4.insurance proceeds if any

PARTICIPANTS IN MARINE TRANSPORTATION: 1.SHIP AGENT The Person: 1. entrusted with provisioning of a vessel, or 2. who represents the vessel in the port in which she happens to be 4blue 95:Ship agent cannot order a new voyage or make contract for a new charter , or insure the vessel without authority from the owner. He cannot discharge a c aptain or crew appointed by him for a definite period or voyage except for cause . Neither can he discharge captain who is a co-owner and who became a captain by virtue of special agreement contained in the articles.

Liability of Ship Owners and Ship Agents a. When Ship Agent shall be civilly liable for the indemnities in favor of third persons which arise form the conduct of the captain in the care of the goods wh ich the vessel carried b. when Ship Agent may exempt himself from liability By ABANDONING the vessel wi th all her equipments and the freightage it may earned during the voyage. Liability of OWNER and SHIP AGENT for obligations contracted by the captain IN E XCESS of his powers and privileges pertaining to him by reason of his position o r conferred upon him by the owner or agent: a. General Rule Not liable b. Exception Liable if the amounts claimed were made use for the benefit of the vessel

Repairs made on a vessel ultimately redound to the benefit of the new owner for w/o said repairs ,the vessel will be unseaworthy.Such acts give rise to solutio indebiti and should be paid by the party benefited. (BAR) It is not a mere defense on R s part that it is a mere agent of X and theref ore not liable, since R s liability as a ship agent is solidary with that of X,it s principal. (BAR) B brokerage Company ,owner of the lighter which discharge the goods from X s vessels, has no liability for the damaged goods ,it being evident that the good s got damaged while still in the custody of the vessel owned and operated by X C ompany and not while in the custody of the lighter owned by Bay brokerage Compan y. 2006 notes: Maritime creditor may attach the vessel without waiting for the sett lement of his right.

Nature of Liability of SHIP AGENT for Acts of the Captain: 1. LAWFUL acts which are beneficial to the vessel SOLIDARY with the ship owner b ecause such obligation arises from the contract of agency (provided the captain does not exceed his authority) 2. UNLAWFUL acts SUBSIDIARY CIVIL liability because this liability is limited to the value vessel and does not extend further (Philippine Shipping vs. Garcia Ph il. 261, 264)

Powers and Duties of a Ship Agent: 1. Art. 595 (2) Represent the ownership of the vessel and may, in his own name a nd in such capacity, take judicial and extra-judicial steps in matters relating to commerce 2. Art. 596(1) a captain 3. he of to occupy the duties of the captain, if he has the qualification of

Art 597- Select and come into an agreement with the captain and contract in t name of the owner, WHO shall be bound in all that refers to repairs, details equipment, armament, provisions, fact, freight, and in general that pertains the requirement of navigation.

4. Art. 602 indemnity the captain for all expenses he may have incurred from his own funds for from those of other persons for the BENEFIT of age vessel.

Discharge of the Captain and Crew: 1. Art. 609- BEFORE the vessel goes out to sea-Ship Agent may at his discretion discharge the captain and crew WITHOUT being liable for indemnity whatsoever: a. PROVIDED: * the contract did NOT state a fixed period or voyage * he pays them the salaries earned according to their contracts b. UNLESS there is a specific agreement in respect thereto 2. Art. 604 DURING the voyage if the captain and crew are discharged at this tim e: a. they shall CONTINUE to receive their salary UNTIL their RETURN to the port wh ere the contract was made b. UNLESS there be just motive for the discharge 3. Art. 605- if the contract of the captain and crew with the ship agent should be for be DEFINITE VOYAGE: a. They CANNOT be discharged until the fulfillment of their contracts b. Except for reasons of: * insubordination in serious matters * robbery * theft * habitual drunkenness, and * damage caused to the vessel or its cargo by malice or manifest proven negligen ce 4. Art. 606 If the captain is PART OWNER of the vessel he can be discharge ONLY. If the ship agent RETURNS to him the amount of his interest therein. 5. Art. 607 BUT if captain obtained his command by virtue of a special agreement contained in the articles of co-partnership, he can only be deprived of his off ice by reasons mentioned in Art. 605

2.CAPTAIN and MASTERS of VESSEL General Functions of a Captain (3 fold character) 1. General agent of the ship owner 2. Technical director of the vessel 3. Representative of the government in the country under whose flag he navigates Duties: 1. Bring on board the proper certificate and documents and a copy of the Code of Commerce; 2. Keep a Log Book, Accounting Book, and Freight Book; Logbook where he shall enter everyday, everything significant about the voyage Accounting Book where he shall enter all the amounts collected and paid for he a ccount of the vessel Freight book where he shall record the entry and exit of goods

Q. What is the probable value of the entries in the logbook? A: It is an official record of entries made by a person in the performance of a duty required by law and are prima facie evidence of the facts stated therein. 3. Examine the ship before the voyage; 4. Stay on board during the loading and unloading of the cargo; 5. Be on deck while leaving or entering the port; 6. Protest arrivals under stress and in case of shipwreck; 7. Follow instructions of and render an accounting to the ship agent; 8. leave the vessel last in case of wreck; 9. Hold in custody properties left by deceased passengers and crew members; 10. Comply with the requirements of customs, health, etc., at the port of arriva l; 11. Observe rules to avoid collision; 12. Demand a pilot whole entering or leaving a port (Art. 612) > A ship s captain must be accorded a reasonable measure of discretionary authorit y to decide what the safety of the ship and of its crew and cargo specifically r equires on a stipulated ocean voyage (Inter-Orient Maritime Enterprise Inc., vs. CA, 235 SCRA 267). No Liability for the following: 1. Damages caused to the vessel or to the cargo by force mejeure; 2. obligations contracted for the repair, equipment, and provisioning of the ves sel unless he has expressly bound himself personally or has signed a bill of exc hange or promissory note in his name (Art. 620) Duration of Responsibility of Captain for Cargo on board his Vessel (Compare to Art. 1736 Civil Code) 1. FROM the time it is turned over to him at the dock or afloat along side the v essel at the port of loading 2. UNTIL he delivers it on the shore or on the discharging wharf at the port of unloading 3. UNLESS otherwise expressly agreed upon Solidary Liabilities of the Ship Agent/Shipowner for Acts Done by the Captain to wards Passengers and Cargoes 1. Damages to vessel and to cargo due to lack of skill and negligence; 2. Thefts and robberies of the crew; 3. Losses and fines for violation of laws; 4. Damages due to mutinies; 5. Damages due to misuse of power; 6. For deviations; 7. For arrivals under stress; 8. Damages due to non-observance of marine regulations Prohibited Art Making 613 When SEPARATE TRANSACTIONS for HIS OWN Effect/consequence Act Allowed SUBSTITUTING himself by OTHER 615 He 2. loosen he belong his PERSONS (unless If profit MAKEnavigatesto other voyage because FAILURE 614may prevented inpenalizedwhich account ofon but 2e he isTOcriminallyforlossesthe people failureoracquires 1isshall(ifshallAgreed Voyagefreighthis in interest, shares) ACCOUNTbeindemnity allmakingexclusivein commonbemayacause approval of ship agent H be for forfuitous event 2hatever profit is incurred by of substitute shall He ). shall be liable for the actsthe the substitute belong to other peoples in W 1 1 BORROW Money Contract CONTRACT shall be RESPONDENTIA byOWN Transactions 617 4e and the substitute may be his substitute is NOT for 3hatever LoansisBOTTOMRY by discharged by shall beagenthis of the cargo) Interest lossononincurredfor thethe captainthe shipthe owner exclusive account H W VOID (because the cargo 2. the discharged by any which he 2e Thereportion been previously agent on the or obligation chargeable 1. may be interests and the shipborrowedof PROVIDED: ForNo money has of the vessel shall be ownslien whole vessel and .rincipaldoes not existscostsother kindcharged to his exclusive account against H P BORROWS or 621 must SELLS outside of what interest he has the formalities 3. hevesselnecessarily statethe cases and without in the vessel prescribed by the Commits be liable for amount defrauded the RPC 621 2 1e lawshallFRAUD in histo the principal, interest, and costs H reimburse Accounts indemnity the subject provisions of damages he may cause

MARITIME PROTEST: 1. it is a written statement under oath 2. made by the captain or master of the vessel 3. After the occurrence of an accident or disaster 4. in which the vessel or cargo is lost or injured 5. With respect to circumstances attending such occurrence 6. It is usually intended to show 7. That the loss or damage resulted from: a. A peril of sea, or b. Some other cause for which neither the master or owner was responsible 8. It concludes with the protestation against any liability of the owner for suc h loss or damage

It is made within 24 hours before the competent authority at the place where the accident or disaster happened or at the first port of arrival if the Philippine s or to a Philippine consul if the incident took place abroad. There are 4 instances when a protest should be made: 1. When there is a general average 2. When there is a shipwreck 3. When there is a collision 4. When there is arrival under stress Of course, if the captain cannot make the protest because of a fortuitous event, that is excusable. Like he was injured and was in the hospital, so he is not in a condition to make the protest.

How the Captain Can Raise funds to Comply with his Obligations (In successive o rder): 1. By requesting funds from the consignees of the vessel or correspondents of sh ip agent 2. By applying to the consignees of the cargo or to the persons interested ther ein 3. By drawing on the ship agent 4. By borrowing the amount required by means of a loan on bottomry 5. By selling sufficient quantity of the cargo to cover the amount absolutely ne cessary to repair the vessel and equip her to pursue the voyage. Note: In case # 4 and 5 he must comply with the provisions o Art. 583

SHIPWRECK Loss of a vessel at sea as a consequence of its grounding or running against an

object in the sea or on the coast. If wreck was due to malice, negligence or lack of skill of the captain, the owne r of the vessel may demand indemnity from said captain. Duties of the Captain with regard maritime protest 1. Protest must be made with a competent authority at the first port he touches within 24 hours following his arrival 2. He must ratify it within 24 hours when he arrives at the place of destination where he must proceed immediately with the proof of the facts 3. he must not open the hatches until all of the above is done

3.OFFICERS AND CREW OF VESSEL Sailing Mate (Art. Unless the The second ship of the vessel 627-631) chiefagent does not order otherwise, in case of absence, sickness, or Second 2hall then assume all his powers, obligations and liabilities 1deathtake the place of the captain, and S Mate Shall take command of the vessel in case of the liability or disqualification or Art, 632-633 the captain and sailing mate, assuming therefore their powers and responsibilit 1n Qualifications: Enlisted by the captain coast Crew Vessels operating with wide trade or in deem proper iesRPor Sailors Art, 634-37 such number he maythe high seas I officers and crew m 2esidentbe citizens minimum of 4/5 of totalenough Filipino Ressels Plying Foreign RP (Sec. 829 if notcrew 1ilipino citizens maximum ofPorts total TCC) ust all Aliens In of Routes1/5 of RA 1937 crew F V foreign sailors, captain may make up the crew with foreigners with the consent of the consult or Prohibitedpass fromof aaauthoritiesimpediment which may have occurred to him w H must not reasonWhencontract of Contracted to serve without obtaining the 3e cannotbyActs marine legitimate one vessel to anotheron a Vessel Except 2 1 rescindto the service has fail his comply therewith Sailor 2f Contractdurations Contract 1ependspermission ofof the contract the vessel on which heuntilbe I D Duration of Sailor the captain he ritten on has NO fixed period of cannot be discharged may the terminology of 2he return which ofa the May be Discharged or discipline, or 1theperpetration of Sailorport where or wantby on the Grounds for voyageatoinsubordination,he enlistedCaptain vessel non-fulfillment R Tepeated offenses crime which disturbs order 3ncapacity of service and repeated negligence in the fulfillment of the service he should r I 5ny occurrence which 4abitual drunkenness incapacitates the sailor to perform the work under his char ender A H 2ithoutby 1EFOREthe Art.out Reasonpaid Whenhissettinghave onbegun UNTIL if land orthereof6esertion reason LeaveaSailor as Landimprisonment and delivery to competent author ge (exceptvoyage644)somevoyageon hishe rendered services U C Anless cannot of Waptain wages abandon BFTER Giving Any to any sailor on Dut Captain May has be crime conclusion sea ity in the first port of arrival should be proper (this should be obligatory to the captain)

Art. 6387-639, Effect on the Crew of the Revocation of Voyage or Change of Desti nation: 1. Crew shall be ce with the rate a. the voyage is after the vessel b. the vessel is indemnified by reason of rescission of the contract in accordan provided if after the crew has been engaged: revoked by the will of the ship agent or charterers (before or is put to sea) given a different destination from that fixed in agreement with

the crew 2. Crew shall have no other right but that to collect the wages up to the day th e revocation was made if: a. the revocation of the voyage should arise from a just cause beyond the contro l of the shi agent and charterers, and b. the vessel has not left port Art. 340, Just Causes for Revocation of Voyage: 1. Declaration of war or interdiction of commerce with the Power to whose territ ory the vessel was bound. 2. Blockade of the port of destination 3. Breaking out of an epidemic after the agreement 4. Prohibition to receive in said port the goods which make up the cargo of the vessel 5. Detention or embargo of the goods by order of the government, or any cause be yond the control of the ship agent. 6. Inability of the vessel to navigate Rules in case of Death of a Seaman > the seaman s heirs are entitled to payment as follows: 1. If death is natural; a. compensation up to time of death if engaged on wage b. if by voyage half of amount if death occurs on voyage out; and full, if on vo yage in c. If by shares none, if before departure, full, if after departure 2. If death is due to defense of vessel full payment 3. if captured in defense of vessel 0 full payment; 4. if captured due to carelessness wages up to the date of the capture (Art. 645 ) Complement of Vessel > All persons on board, from the captain to the cabin boy, necessary fro the man agement, maneuvers, and service, thus including the crew, the sailing mates, eng ineers, stokers and other employees on board not having specific designations. > Does not include the passengers or the persons whom the vessel is transporting .

4. SUPERCARGOES > Persons who discharge administrative duties assigned to them by ship agent or shippers, keeping an account and record of transaction as required in the accoun ting book of the captain. (Art 649)

5. PILOT > A person duly qualified and licensed to conduct a vessel into or out of ports, or in certain waters. > The term generally connotes a person taken on board at a particular place for the purpose of conducting a ship through a river, road or channel, or from a por t. > Master pro hac vice (for the time being) in the command and navigation of the ship. > While exercising his functions a pilot is in sole command of the ship and supe rsedes the master for the time being in the command and navigation of the ship; the master does not surrender his vessel to the pilot and the pilot is not the m aster. There are occasions when the master may and should interfere and even dis place the pilot, as when the pilot is obviously incompetent or intoxicated (Far Eastern Shipping Company vs. CA, 297 SCRA 301). > Compulsory Pilotage States possessing harbors have enacted laws or promulgated rules requiring vessels approaching their ports to take on board pilots license d under the local laws (Notes and Cases on the Law on Transportation and Public Utilities. Aquino T. & Hernando, R.P. 2004 ed p. 518)

Liability of Pilot GENERAL RULE: On compulsory pilotage grounds, the Harbor Pilot is responsible fo r damage to a vessel or to life or property due to his negligence. EXCEPT: 1. Accident caused by force majeure or natural calamity provided the pilot exerc ised prudence and extra diligence to prevent or minimize damages. 2. Countermand or overrule by the master of the vessel in which case the registe red owner of the vessel is liable. (Sec. 11, Art.III PPA Admin Order 03-85) > The fact that the law compelled the master to take the pilot does not exonerat e the vessel from liability. The owners of the vessel are responsible for the ac ts of the pilot, and against, him. (Far Eastern Shipping vs. CA)

SPECIAL CONTRACTS IN MARITIME 1.)CHARTER PARTY > A contract by virtue of which the owner or agent binds himself to transport me rchandise or persons for a fixed price. > A contract by which an entire ship, or some principal part thereof is let/leas ed by the owner to another person for a specified time or use. Parties: 1. Ship owner or ship agent 2. Charterer Charterer has no obligation before transporting its cargo to ensure that the ves sel it chartered complied with all legal requirements. Duty rest upon the common carrier simply for being engage in public service.

Classes:

1.Bareboat or demise The charterer provides crew, a food and fuel. The charterer is liable if he wer e the owner, except when the cause arises from the unworthiness the vessel. The shipowner leases to the charterer the whole vessel transferring to the latte r the entire command, possession and consequent control over the vessel s navigati on, including the master and the crew, who thereby become the charter s servants. It transforms a common carrier into a private carrier. 4blue:private carrier who enters into a charter party remains a private carrier. The charterer becomes the owner of the vessel pro hac vice, just for that one pa rticular purpose only. Because the charterer assumes the customary rights and li abilities of the shipowner to third persons and is held liable for the expense o f the voyage and the wages of the seamen. It is the charterer who will be liable to the holders of the goods if the goods get lost. And since it is a private carrier, if the charterer does not pay the s

hipowner the stipulated fees, the shipowner cannot ask that the cargoes be sold to satisfy his claims because he has no lien on the goods. Because the one who i s liable and who is dealing with the owners of the goods is the charterer. There is no privity of contract between the shipowner and the owners of the goods so he cannot ask that the goods be sold to satisfy his claim for his fees. 4blue: The Court has said that in a bareboat charter of a private carrier, a sti pulation there that the shipowner will not be liable in case of loss and damage, the Court said since this is a private carrier, not a common carrier, that stip ulation is valid. So the shipowner will not be liable for the loss of the goods due to the negligence of the captain. A stipulation in the bill of lading limiting the liability of the carrier unless the shipper declares a higher value, that is valid and that is binding upon the consignee. (inaudible) The consignee becomes a party to the bill of lading, the contract for the benefit of a third party. Time Charter: Vessel is chartered for a period of time or duration of the voyage . The charterer acquires the right to use the carrying capacity, facilities of t he vessel and he could designate the designations. The owner retains possession and control of the vessel. Voyage/Trip Charter: It is a contract for the carriage of goods of a vessel for one or more series of voyages. In Time Charter and Voyage Charter, the shipowner remains in control of the vess el. So the vessel remains a common carrier. If goods are lost, it is the shipowner who will be liable. The Court said that a stipulation in a voyage charter that the charterer will be liable for the loading and unloading of the goods, while the owner will be liab le for the care of the cargo during the voyage, that is valid. Like in the Don Juan case, whereby latter collided with a tanker which Caltex ch artered to transport oil. Don Juan wanted to run after Caltex since it had more money than the tanker. However, SC said that they cannot run after Caltex since it is a voyage charter, therefore, the tanker remained common carrier, and since it is negligent due to the fact that it was navigating at night without lights, Caltex (the charterer) is not liable, it will be the owner of the tanker who wi ll be liable. The charterer will usually be liable for deadfreight. Like I had a case where th e client (inaudible) the vessel to transport molasses he is selling to somebody in Japan. So the vessel arrived here. When they loaded the molasses, there was a shortage in the molasses. It was the fault of the warehouseman. Anyway, so the shipowner filed a claim for deadfreight were there was shortage in the molasses so that freight he could have earned was an opportunity lost. You have to make goo d that amount because you agreed to load so many tons of molasses. That is deadf reight. The charterer will not be liable for the voyage if the delay in loading is due t o fortuitous event e.g., the arrastre workers went on strike that is beyond the cont rol of the charterer, he won t be liable for the demurrage. The (a) (b) (c) be goods may be deposited if there are reasons to believe that freight will not be paid or the consignee cannot be found or the consignee refuses to receive the goods. On the other hand, the goods may sold to pay for the freight, expenses and those due the captain, to pay for

freight under Article 667: (a) if the consignee cannot be found, (b) if the cons ignee refuses to receive the goods or (c) the goods will deteriorate like fruits that will become ripe.

4blue 95 notes: when the charter is limited only to the ship( even to the whole of it), the carrier shall remain a common carrier. 4blue 95 notes: it is only when the charter includes both the vessel and the cre w,as in bareboat and demise that a common carrier becomes private. 4blue 95 notes: Pro Hac Vice means for this occasion which it contends that during the duration of the bareboat charter ,he will assume the rights and obligations of the shipowner. 2.Contract of Affreightment A clause in a charter party providing that the COGSA shall apply, even though t he transportation is domestic, subject to the extent that any term of the bill o f lading is repugnant to the COGSA or applicable law, then to the extent thereof the provision of the bill of lading is void. In a contract of affreightment ,the shipper or charterer merely contacts a vesse l to carry its cargo with the corresponding duty to provide for the berthing spa ce for the loading or unloading .Charterer is merely required to exercise ordina ry diligence in ensuring that a berthing space be made available for the vessel .The charterer does not make itself an absolute insurer against all events which cannot be foreseen or are inevitable. The law only requires the exercise of due dliligence.

Deadfreight is the amount paid by or recoverable from a charterer of a ship for the portion of the ship s capacity the latter contracted for but failed to occupy. Liability of deadfreight is on the charterer Demurrage is the sum fixed in a charter party as a remuneration to the owner of the ship for the detention of his vessel beyond the number of days allowed by th e charter party using the word in its strict technical sense ,exists only when e xpressly stipulated in the contract. * shipper or charterer is liable for payment of demurrage claims when he exceeds the period for loading or unloading as agreed upon or the agreed laydays. * Delay in loading/unloading to be deemed as demurrage, runs against the charter er as soon as the vessel is detained for an unreasonable length of time from the arrival of the vessel because no available berthing space was provided for the vessel due to the negligence or by reason of circumstances caused by the fault o f the charterer. * However if the delay was due to a fortuitous event, the consignee will not be liable for demurrage. E.g. : (a) In one case, where the consignee was not able t o take delivery right away because there was error in the manifest and then the equipment of the arrastre operator broke down, so that s not his fault; (b) Or bec ause there was a strike in the pier.

SHIPOWNER OR 1. If the CHARTERER SHIP AGENTvessel is chartered wholly, not to accept cargo from others; 2. To observe represented capacity; 3. To unload cargo clandestinely placed 4. To substitute another vessel if load is less that 3/5 of capacity; 5. To leave the port if the charterer does not bring the cargo within the lay da ys and extra lay days allowed; 6. To place in a vessel in a condition to navigate;7. to bring cargo to nearest neutral port in case of war or blockade 1. To pay the agreed charter price; 2. To pay freightage on unboarded cargo; 3. To pay losses to others for loading uncontracted cargo and illicit cargo; 4. To wait if the vessel needs repair; Art. pay Probable Value of a Charter party 5. To654. expenses for deviation. (Art. 679-687) If executed with the intervention of a broker who testifies to authenticity of s Full evidence in court What shall If there ofacontracting which ignaturesisgovern is thatpartiesagrees with the copy which the broker must keep discrepancy Even without intervention of a broker if the contracting parties acknowledge sig May also be admitted in evidence in his registry 2roof provided the the 1hat is as their for Doubts shall andown in by: not If notpresented byparties dobill of lading, their signatures naturesbrokerbe decidedparties acknowledgeor P W

Art. 698-689 Rescission of Charter Parties: Condition/ Ground Art. 688. when Charter Party may be rescinded at the Request of the CHARTERER 2apacity of He must PAY the of the freight to be upon 1BANDONMENT HALFvessel is before loading in CONFIRMITY Consequence of the charterFOUND agreedNOT of the vessel with that stated in the C A 3ON PLACEMENT thein There is an ofof the Owner must Indemnity vessel at the of damages under which the vessel navigatesa certificateindemnity the charterer forthe FLAG suffered N ERROR tonnage statement DISPOSAL of the charterer within the period 4FTER the Indemnity Owner mustvessel has been put to sea, damages suffered nd manner agreed uponthe charterer forit RETURNS to the port of departure on acc A 2. Enemies, 1. Pirates agree to Shipper mustor ount of the risk from:unload the vessel Charterer voyage, In 5URING the shall to order the goods Ship Ownerprefershave the right to URGENT REPAIRS the vessel voyage out 3. Inclement weather DISPOSEto makethe freight in full for theshould MAKE PORT D 4blue: fortuitous event to cause a rescission are: (1)war (2) blockade (3)prohib ition to receive cargo (4) embargo (5) inability of the vessel to navigate

Art. 689. when Charter Party May be Rescinded at the Request of the SHIP OWNER ( from whom the vessel is chartered) 1AILURE Condition/Consequence Ground of the charterer, at the termination of the extra lay days, to place the F 2ALF pfbuyerfreight vesselowner BEFORE the charterer 1cargo alongsidethebyvesselhas extra the vessel Charterer mustthethestipulated loaded lay days for his own account I Sf the DALE of the vessel Hemurrage forofpaylaysthe and days Seller/ Own 1he chartershall not charterer for 2f the indemnity therespected buyerdamages did not er mustbuyershallindemnify the vessel for hesuffered inform the buyer of the pendi T I seller does be load if his own account. ng charter at the time of making of the sale

4blue 95:Arastre operations are not maritime transactions and the provisions of COGSA do not apply to arrastre services. 4blue 95:Against the arrastre operator, the suit should be preceded by a claim w ithin 15 days from the discharge of the last cargo, and the suit itself should b e filed within 2 yrs from said discharge.

2.) LOANS on BOTTOMRY and RESPONDENTIA Loan on Bottomry or Respondentia is : 1. a. b. c. d. A Loan Under which any condition whatsoever; The repayment of the sum loaned and of the premium stipulated Depends upon the safe arrival of the effects In the port on which it is made

2. A loan with things exposed to maritime risks as collateral to be paid if the collateral are safety transported and the lender shall lose his money if the col lateral is lost 3. It is a loan on: a. Bottomry if the security is a vessel b. Respondentia if the security is cargo Characteristics of a loan on BOTTOMRY 1. It is a loan the security of which is the vessel itself 2. Conditioned on the safe arrival at the point of destination 3. The vessel must be exposed to maritime peril therefore if the vessel is only docked under a covered shed and it is hit by lighting and the vessel burns, the bank can still recover from the shipowner because the vessel was not exposed to maritime peril.

Who may contract a Loan on Bottomry 1. The owner of the vessel 2. Captain of the vessel in the absence of the owner Distinction Loan on Loan OrdinaryBottomry or 5 To be in in 4 Need notdependswriting 3aymentmay writing Absolutely repayableeither arrival 2he collateral mustin safebe need oforbe collateral Collateralamay be3rda the registry not theregistered at marine of of 1ustorbinding havetheproperty, Maybehavebenotononanypersons, a vessel or cargo the portthe registrythe the Respondentiacollateralcollateralrealbyvessels ofsubject toof port risks loanves P T M registered personal 6oss Loss of collateral,extinguishing the loan sel, to be binding on 3rd personsnot extinguish the loan L collateral if any, does 2005 notes: The 30% interest rate cannot be questioned as being violative of Usu ry law. Loans of bottomry are maritime loans, and there is no limit to the rate of interest (more conveniently called as premium) to be charged, in view of the fact that there are different classes and various accidents to which maritime vo yages are exposed. If vessel ,to whose owner the bottomry loan was granted does not negotiate the voyage safely, the lender loses all rights to collect and it is this factor, the high risk involved, which prevents the Usury law interest ra tes from being applicable to bottomry loans. Hence Impositon of 30% cannot later on be questioned as violative of the Usury L aw. Art. 730. Preference of Loans on Bottomry: Loans before last voyage Over made during the of the Preferred theclearing voyage vessel for over prior voyages Art. 731 Effect of Total Loss of Collateral on the Loan on Bottomry or Responden tia (as compared to Abandonement) General Total Rule loss of the collateral 1t arose from an accident EXTINGUISHES the loan it: of the sea at the time and during the voyage designate I Exception 2 is proven that and dtin the contract,the cargo was on board I 3 2 1he loss was caused by the inherent defect by theborroweras The loan is NOT extinguished if: orsufferedof the thing, or a consequence of be T damages malice fault vessel 5hen the cargo loaded on ing engaged in contrabandthe vessel be different from the change should have bee W n made by reason of force majeure (BAR) G obtained loan from Jo payable in installments.G executed a chattel mortg age in favor of Jo whereby she transferred in favor of Jo its successors and ass igns all her title and rights to a vessel which G is the absolute owner. The cha ttel was registered with the MARINA and had a total accountability of P3M.but Jo could not forclose mortgage on vessel since it sank during typhoon. Meanwhile L which rendered salvage services for refloating the vessel sued G. Whose lien s hould be given preference? HELD: L s lien should be given preference since lien of Jo was extinguished when v essel sank,her right to recover was predicated on the safe arrival of the vessel at port of destination(PD 1521). 2006 notes: captain of vessel can contract loans on bottomry and if he does so a t the place where the owners reside,then only that part owned by him is liable. If he does so at other places to have funds to comply with the powers inherent in his office, then the whole vessel may be made liable by him as he then is act ing as agent for all the owners. 2006 notes: captain may constitute a loan on bottomry on that portion, if any, o f the vessel owned by him to finanace his personal transactions provided no prio r loan on bottomry has been executed on the whole vessel and provided further th at no other lien or encumbrance exists on said vessel. 2006 notes: captain cannot contract loan of respondentia since he is not owner o f cargo which is the security in a loan on respondentia. Neither is he an agent of these cargo owners. Besides, the Code specifically prohibits it.

Remedy of respondentia creditor: Even if ship and its cargo perished, the principle of limited liability cannot e invoked ,the captain in this case assuming a personal responsibility for the ums received by him from the loan on respondentia consummated by him, the loan eing considered as a personal loan of the captain not extinguished by the loss f the goods. b s b o

3) CONTRACT OF PASSENGERS 4) MARINE INSURANCE 5.)CARRIAGE OF GOODS (BILL OF LADING) Bill of Lading is: 1. An Instrument in writing 2. Signed by a carrier or his agent 3. Describing the freight so as to identify it 4. Stating the name of the consignor, the terms of the contract of carriage, and 5. Agreeing or directing that the freight be delivered to the order or assigns o f a specified person at a specified place A stipulation in the bill of lading limiting the carrier s responsibility to the v alue stated, unless the shipper declares a higher value and pays ad valorem char ges is valid. 1.Agreed limit usually based on value of goods 2.Absence of agreement where the ship owner stated in the bill and the shipper d id not declared a higher value, the amount stated in the bill. 3.Total absence of limit --for interisland or coastwise trade court may determine the limit --overseas trade-- $500 provided by COGSA 2005 notes: $500 per package prescribed by COGSA is not applicable where there i s a stipulated limit in the bill of lading and when there was declared higher va lue. 2005 notes: failure to file notice of claim w/in 3 days from receipt of the carg o will not bar recovery of damages by the consignee if action is filed within th e 1 year period under the COGSA. 2005 notes: Under NCC, automatic presumption of fault or negligence in case of d amage to cargoes carried unless it falls under exempting causes (art 1734) 2005 notes: Common carrier is liable for goods discharge by it in bad order cond ition and the arrastre operator for goods damaged in its custody. 2005 notes: the insertion in the Bill of Lading of the word LC No. 901 which sta te the amount of the LC obtained by the shipper will not effect the declaration of the value of the goods and cannot be the basis for the carrier s liability .

2-Fold Character of BL 1. A RECEIPT w/c a. specifies the quantity, condition and character of the goods received and rec ites, and b. recites the date an place of shipment and the fees paid by the shipper 2. it is evidence of a CONTRACT by which the 3 parties (shipper, carrier, consig nee) undertake specific responsibilities and assume stipulated obligations; also fixes the route, destination, freight charges, and stipulates the rights and ob ligations assumed by he parties (Art. 353)

Effect of issuance by carrier of an UNSIGNED bill of lading when ACCEPTED by shi pper or consignee: Acceptance with full knowledge of its-contents gives rise to the presumption tha t the same was a perfected and binding contract (Keng Hua vs CA 286 SCRA 257) 2005 notes: Where consignee did not sign the bill of lading, he is liable as age nt of the shipper or by ratification if he presents the bill of lading to the ca rrier and received the goods.

To whom Goods deliverable: The goods are deliverable to the consignee named in the Bill of Lading or to a person to whom he endorses the bill of lading ,if negotiable. Where the custom s broker s authorized representative accepted the cargo OK and Compl ete as shown in surveyor s report countersigned by him, and it was obviously his as signed task to note defects in the cargo ,said acceptance, if not binding outrig ht upon the customs broker, is at least evidentiary of the condition of the good s when thus received. Where shipper consigned the goods to Shipper s Order with address arrival notice to C onsolidated Mines Makati as stated in bill of lading, and the consolidated Mine a nd the bank where the letter of credit was procured entered into an agreement wh ere the goods when they arrived should be released to the bank, the carrier havi ng no knowledge of said arrangement until 5 months after the release of the good s to the designated consignee, the release of the goods to said designated consi gnee, even without the surrender of the Bill of Lading is lawful and the carrier did not commit any fault sufficient to render it liable to the bank.

(BAR) a shipment of rice arrives in Manila from Thailand .the agreement between the shipper and the ship owner is that freight was to be paid upon the discharg e of the cargo. The shipper ,however does not pay the freight but offers a bond to respond therefore. Notwithstanding this offer, the owner of vessel refuse to deliver the rice. May not he charterer be ordered to deliver the rice by the cou rt before which the shipper brings action ,upon furnishing of the bond by the sh ipper? HELD: NO, the ship owner cannot be ordered to deliver the rice by mere offer to give a bond. The ship owner is entitled to be paid in legal tender on delivery o f the cargo. A shipper may be held liable for bills of lading signed by another person,where the shipper does not appear as shipper or consignee, or where persons other than the shipper appear as the shpper, or where bill of lading is not actually singe

d by the shipper, if the evidence shows that the goods actually shipped belonged to the shipper. Diligence Required: Extaordinary diligence . A common carrier ,in allowing its unseaworthy vessel to leave the port of origin and undertake the contracted voyage, with full awarene ss that it was exposed to perils of the sea, deliberately disregarded its solemn duty to exercise extraordinary diligence and obviously acted with bad faith and in wanton and reckless manner thus making it liable for moral and exemplary dam ages. Art 359 Route to be Taken by Carrier: Can the carrier UPON the agreed route? 1he Route AGREEDCHANGEby the parties T 2he SHORTEST, LEAST EXPENSIVEhemajeurebe liablefor(any absence of anand Tll damagesstipulatedby the \goodsPRACTICAL route In other cause, agreement) General ruleby reason of forceand transported for 1xception suffered for such event E A amount NO otherwise, shall

Art. 363 and 365, When Consignee may REFUSE to RECEIVE the Goods: 1. Art. 363 When only a PART of the goods have been delivered to him and he PROV ES that he CANNOT make use of the goods delivered without the others. E.g.Like they are components of an equipment and without the missing parts you c annot use the equipment. 2. Art. 363 when the goods are DAMAGED and RENDERED USELESS for sale or consumpt ion for particular purposes for which they are to be used (he can also demand p ayment of their value at the current market price on that day) E.g. you imported a thoroughbred and the legs of the horse were broken during th e shipment. 3. Art. 365 when among the damages goods, there should be some in good condition , he is not required to receive those which are sound if he PROVES the impossibi lity of utilizing the same in this form. Now, if upon delivery of the goods, it is obvious from the external appearance o f the packages that there were damages, the consignee must immediately file a cl aim. If that is not apparent from the external condition of the packages, then h e has 24 hours from delivery within which to file a claim. If the claim is not f iled within this period as mentioned in the law, then that will be barred becaus e compliance with that is a condition precedent for a filing a case in court. Art. 365. Period for Bringing a Claim Against the Carrier 1. IMMEDIATELY UPON RECEIPT of the Package - if the damage is APPARENT from the exterior of the package (for such purpose, a VERBAL CLAIM made immediately is S UFFICIENT compliance with the law) 2. WITHIN 24 HOURS following RECEIPT of the Package N from the exterior part of the package if the damage CANNOT BE KNOW

3. All Claims are EXTINGUISHED - if the consignee RECEIVES the merchandise, PAY ING the freight charges WITHOUT PROTEST. BAR: Did the prescriptive periods under the Civil code repeal Art. 366 of code o f Commerce? HELD. NO. The limitations of actions mentioned in the Civil Code are without pre judice to those specified in the Code of Commerce (Art. 1148 New Civil Code) Carrier s Lien on Goods

Consignee may not defer payment of the TRANSPORTATION CHARGES and EXPENSES after the lapse of 24 hours following their deliveryEven if consignee did not sign th e bill of lading, he is bound to pay the freight charges as agent of the shipper or by ratification if he presents the bill of lading to the carrier and accepts the goods. In case of delay in payment, the carrier may demand the judicial sale of part of the goods to pay for the expenses and cost of transportation. The goods transpo rted are bound for this obligation, and the carrier acquires a 30 day lien over these goods during which the goods may be sold to satisfy the credit of the carr ier.

Change of Consignee on Orders of Shipper (BAR) If shipper without changing the place of delivery changes the consignment or consignee of goods (after said goods had been delivered to the carrier) under what conditions will carrier be required to comply with the new orders of the s hipper? HELD: Shipper who after delivering the goods to the carrier and having been issu ed a bill of lading designating a consignee and a place of consignment wants to change the consignee of the goods can be required by the carrier to surrender al l copies of the bill of lading in order that a new one may be issued now bearing the name of the consignee. Expenses incurred in the process will have to be bor ne by the shipper. This can only be done if shipment has not been made yet.

2006 notes: ambiguity in a bill of lading is construed against the carrier ,the contract being one of adhesion (Eastern v Margarine)

When to File Claim for Loss/ Undelivered Goods: A claim for lost goods against a merchant vessel must be made within 30 days fro m receipt of the last package of the goods. Failure of the shipper to do so is f atal as it is a condition precedent to the accrual of the cause of action agains t the carrier. Prescriptive Period to File for Recovery of Undelivered Cargo: 1. If there is a bill of lading 2. If there is NO bill of lading 3. If it involved overseas trading 10 years from non-delivery 6 years from non-delivery 1 year from non- delivery

An action for misdelivery of cargo under the civil code, and not under the COGSA , prescribes in 10 years. The 1 yr prescriptive period under the latter law is applicable to loss or damage but not to its misdelivery.

Transshipment of Goods: Transshipment or act of taking cargo from one ship and loading it in another(it is immaterial whether or not same person or entity owns two vessels), if done wi thout legal exercise, however competent and safe the vessel into which the trans fer is made is a violation of the contract and infringement of the right of the shipper and subjects the carrier to liability if the freight is lost even by a c ause otherwise excepted. If the goods are to be transshipped, the last carrier to deliver the goods shall be liable for either damage or loss, even if that occurred while the goods were in the custody of a previous vessel. Suppose the goods were imported from Japan. They were brought by Japanese vessel from Tokyo to Manila. Then they were transshipped to Cebu by domestic shipping company, Sweetlines. And the goods arrived in Cebu in a damaged condition, the c onsignee can run after Sweetlines even if the goods might have been damaged whil e in custody of that Japanese vessel. The recourse of Sweetlines is to run after that Japanese vessel for reimbursement. Magellan Case. The letter of credit, which the buyer of the imported goods open ed, contained a provision prohibiting transshipment of the goods. The shipping t ransshipped the goods on another vessel. And, there was a provision in the bill of lading issued that there be a transshipment. The seller accepted the bill of lading without protesting. Although the in the letter of credit there was a stip ulation there will be no transshipment, the bill of lading said there will be a transshipment. The buyer refused to accept the goods, our agreement was that the re shall be no transshipment. The seller now was running after the vessel. The c ourt said: No, because that agreement that there shall be no transshipment is ju st between the two of you. The carrier is not bound by that and in the bill of l ading which the seller issued there is a stipulation that the goods would be tra nsshipped, and you accepted it, you did not object. So in the contract between y ou and the [carrier] there was a provision for transshipment, you cannot sue the carrier if the buyer refuse to take delivery of the goods. 4blue 95 notes: there is transshipment even if the 2 vessels are owned by same c ompany.

Claims against carrier for Damages Where goods are damaged and same are externally visible, such fact should appear on the bill of lading on date of receipt. If damage can only be determined only upon opening of packages, the consignee must file claim within 24 hours from hi s receipt of the goods from the carrier. Request by consignee of goods for bad order examination within the period for fi ling formal claim is equivalent to a formal claim and tolls the running of the p eriod. A formal claim filed 70 days later retroacts to date of request for a bad order examination. Even if consignee was not a signatory to the contract of carriage between the sh ipper and the carrier, the consignee can still be bound by the contract. AVERAGES AVERAGES

Art. 806. The following Shall be Considered as Average: 1. All extraordinary or accidental expenses which may be incurred during the voy age for the preservation of the vessel, cargo, or both 2. All damages or deterioration: a. which the vessel may suffer * from the time she puts to sea at the port of departure * until she casts anchor at the port of destination b.suffered by the goods * from the time they are loaded in the port of shipment * until they are unloaded in the port of their consignment Kinds of Averages Simple or All the Definition General expenses and damage caused to the vessel or to her cargo which have NOT Particular Inured to the common benefit and profit of all the persons interested in the ves All the damages and expenses sel and her cargo (Art. 809) which are deliberately cause in order to save the v The OWNER cargo, or Who bears of loss? both at gave rise to the a REAL or risk (Art. damage ( essel, herthethe things whichthe same time fromexpensesKNOWsuffered the811) All 810) Art.the persons having an interest in the vessel and cargo therein at the time o f the occurrence of the average shall contribute Distinction: PARTICULAR or Have not GENERAL SIMPLE inured to the common benefit of all persons interested in the vessel an 3 her done the owner Are borne 2hall forby caused contributed a all persons and/or her cargo May bebe shared and in order to by deliberate having an interest in the 1eliberatelyto causes of those savedamages act dausedcargothe benefitother thaninterested in the vessel and her cargo vessel S D C the thins the vessel and cargo Art. 723 Liability of Lenders of Bottomry or Respondentia for a General or parti cular Average in the Things on which the Loan was Made: 1. General Average Lenders on bottomry or respondentia shall suffer in proportio n to their interest, the general average which may take place in the things on w hich the loan was made 2. Particular Average - in the absence of an express agreement between the cont racting parties, lenders shall also contribute in proportion to their interest provided they do not fall under the exception in Art. 731(see loan on bottomry and respondentia) 1.PARTICULAR OR SIMPLE Includes expenses and damages caused to the vessel or cargo which have not inure d to the common benefit and borne by their respective owners. (BAR) Cargo of copra was loaded on board a Phil vessel bound for Holland. The ow ner of the vessel incurred the ff expenditures in course of trip: P15000 for rep airs to the hull due to a collision with another vessel in the Gulf of Aden, P10 000 for additional provisions for the crew and passengers while repairs were bei ng made, P10000 for deterioration in the value of the copra due to the delay cau sed by repairs and P10000 for towing vessel thru the Suez canal .By whom and in what amount shall each of the above expenses be borne? HELD: Repair expense of P15000 is a particular average to be borne by the owner without prejudice to said owner running after the other vessel, if negligent. Th e average is particular as it was not deliberately incurred for common benefit. Additional provision for the crew and passengers of P10000 is also particular av erage and is borne by the owner of the vessel .the expense is a consequence of the repair of the vessel, which itself is a particular average.

P10000 deterioration in value of copra is particular average to be borne by copr a owner. Loss in value is not a consequence of a sacrifice for common benefit. Towage expense is an ordinary expense incident to navigation and is borne by the owner of vessel.

CONTRACT OF TOWAGE: Contract whereby one vessel usually motorized, pulls another, whether loaded or not with merchandise from one place to another for compensation. It is a contract for services (lease contract) rather than a contract of carriag e.

(BAR) While at sea, the captain of vessel A received distress signals from vesse l B and vessel A responded and found vessel B with engine failure and drifting o ff course. Upon acceptance by vessel B of vessel A s offer, vessel A connected tow lines to vessel B and towed it safely to port. There was no grave marine peril since the sea was smooth and vessel b was far from the rocks. In a suit for comp ensation for towage, who are entitled to recover, the owner, the crew or both? HELD: Owner of vessel A since a towage contract is a lease of services and the l essor ,owner of vessel A is entitled to reasonable compensation for said service s. Members of the crew of vessel A are not entitled to compensation since the op eration in the problem was not one of salvage. 2.GENERAL AVERAGE Requisites: 1. A common danger, a danger in which ship, cargo and crew all participate 2. There must be a voluntary jettison or casting away of some portion of the car go for the purpose of avoiding this imminent peril 3. This attempt to avoid the imminent peril must be successful in a sense that t he vessel and some of the cargo are saved Liability of the Goods for General Average; BAR 1. The cargo shall be especially liable; a. for the payment of freight; b. for expenses and duties arising therefrom, which must be reimbursed by the sh ippers, as well as c. for the part of the general average which may correspond to it; 2. However it shall NOT be legal for the captain to delay the unloading of the c argo by reason of fear that the said obligation may not be complied with

3.If there are reasons for distrust, the judge or court, at the instance of the captain, may order the deposit of goods until he has been paid in full Effect of a Declaration of War of Blockade on a Charterer Party: 1. the charter party shall remaining force if the captain should not have any in struction from the charterer 2. Captain must proceed to the nearest safe and neutral port 3. At said port captain must request and await orders from the shippers 4. Expenses and salaries accruing during detention in said port shall be paid as general average 5. of, by order of the shipper, the cargo should be discharged at the port of ar rival, the freight for the voyage our shall be paid in full

COMMON TO SIMPLE & GENERAL AVERAGE: Proof Made at port of repairs, if any is made, or in port of unloading .Liquidation i s done in the port of unloading if in the Philippines, or in the port of arrival ,if in a foreign country. Common carriers cannot limit their liability for injury or loss of goods where s uch injury or loss was caused by its negligence. Otherwise stated, the law on av erages under the Code cannot be applied where there is negligence. Liquidation Done by private agreement or if the parties cannot agree, then by judicial autho rity. ARRIVAL UNDER STRESS Art. 819. Arrival Under Stress A.The arrival of the vessel at the nearest and most convenient court B.Because the vessel CANNOT continue the trip to the port of destination C.This situation arises when the vessel does not reach its destination on schedu le because it has to go to another port due to: 1. lack of provisions or fuel but this should not be due to the lack of foresigh t of the captain, crew or owner of the vessel 2. seizure, privateers, or pirates but this should be well founded 3. inability to navigate but this must not be attribute to the negligence of the captain, crew or owner

Art. 821, Liability for Expenses of an Arrival Under Stress: 1. Shall be for the account of the ship owner or ship agent. 2. BUT they shall not be liable for the damage which may be caused the shippers by reason of the arrival (provided the arrival is lawful) Not lawful when: 1.lack of provisions due to failure to carry the provisions necessary according to usage and customs 2.risk of enemies is not well known and manifest 3.defect of vessel is a consequence of an improper repair 4and malice ,negligence ,lack of foresight ,lack of skill of the captain caused the damage. 2006 notes: all expenses for arrivals under stress are borne by the ship owner, but if the arrival under stress is unlawful ,the ship owner also answers for da mages to the owners of the cargo and the passengers.

4blue 95 notes: Jason Clause: it means that the rights to contribution in a gene ral average need not be affected even if it may have been due to the fault of o ne of the parties (as such, even the guilty party may collect) However, this is without prejudice to the rights of the other parties as with re ference to the party at fault.

COLLISION: Definitions: 1. In a strict sense: a. collision the impact of 2 vessels, both or which are moving b. Allision the striking of a moving vessel against one that is stationary 2. In a broad sense collision includes allision, and perhaps another species of encounters between vessels, or a vessel and other floating, though non-navigable object Rule when there is a Collision or Allisison The guilty vessel must pay for the damage EXCEPT when the guilty vessel sinks, b ecause of its hypothecary nature.

5 Cases Covered by Allision or Collision: 2amage causedvessel, (Art. 827) Saidinnocentmustshalland solidarily 1ne vessel shallthe innocent loss Liability andtofaultliable forof the cargo of Who is at faultfaultthe ownersvesselliable to the shipper for the damages occasi E Bach shipowners Ioth vessels Tts vessel at be Dhe own vessel bear be Oamages suffered by its own 2oth shipowners bear be own loss 1ach vessel 3t cannot bemustshall itssolidarily caused the collision for the damages occasi oned to cargodetermined which vesselliable to the shipper (Art. 828) B E I None innocent (Art. (Art. vessels 5ts Liable, 2he own suffered byfaultand 1amages vessel vessels, owners of The 2to cargo toatvesselliable for: 4amagevessel eachthe be830) bearthe own of oned3rdcausedisshalltheinnocent831)itscargoloss F I T D 3rd Aortuitous Event 2 must Art. 826 Collision Through Fault of Captain or Crew The OWNER of the vessel at fault shall indemnify the damages suffered, after an expert appraisal

Rules to Follow After a Collision 1. After collision, the captain of the Innocent vessel must file a marine protes t w/in 24 hours from the time he reaches the nearest port (Art. 835) 2. General Rule Failure to file such protest bars the Innocent vessel from recov ering from the guilty vessel, no matter how meritorious the case is Art. 836. When Protest After Collision Not Necessary: 1. In case of the basis of the action is quasi-delicts 2. On case of collision of a motor boat engaged in conveying passengers between ship and shore, and a larger vessel (only sea going vessels are covered by the pr inciple of collision) 3. In case the person interested in the damage was not on board or was not in a condition to make known his wishes.

Art. 837. Limit of the Liability of Ship owners in Cases of Collision, Limited t o the: 1. Value of the vessel 2. All her appurtenances 3. Freight earned during the voyage The loss of the vessel extinguishes the liability of shipowner for the damage ca used by collision. (Unless covered by the exceptions)

Fault undeterminable (Doctrine of Inscrutable Fault. ) If you cannot determine which vessel is at fault, each one bears its own loss an d the shipowners of the two vessels will be jointly and severally liable for the owners of the cargoes of both vessels. This is the doctrine of inscrutable faul t. Inscrutable, you cannot determine. Where two vessel collides and you cannot de termine who is at fault, then each vessel bears its own loss and the vessels wil l be jointly and severally liable for the owners of the cargoes of both vessels. 2006 notes: Doctrine of last clear chance is not applicable to collisions specia lly where both are at fault or under doctrine of inscrutable fault.

Collision of a Moving vessel against a Stationary object There is presumption of fault against a moving vessel that strikes a stationary object such as a dock or navigational aid. The moving vessel must show that it w as without fault or that the collision was occasioned by the fault of the statio nary object or was the result of the inevitable accident. CARRIAGE OF GOODS BY SEA ACT Contracts (Covered by the COGSA) are All contracts for the carriage of goods: 1. By Sea 2. To and from Philippine Ports 3. In FOREIGN Trade Q: What is the effect of the COGSA on our Maritime laws? It did not repeal any existing provision of the code of commerce which is now i n force or limit its application. American insurance vs Compania Maritime transshipment is a continuity of the co ntract which originated in N.Y. hence, COGSA applies. Procedure to be undertaken by shipper or consignee in case of loss or damage of cargo 1. A NOTICE of loss OR damage and the general nature of the such loss or damage IN WRITIBG; must be given to the carrier or his agent. a. at the PORT of DISCHARGE, or b. at the TIME of REMOVAL of the good into the custody of the person entitled to delivery thereof (such removal shall be prima of the evidence of delivery by th e carrier of the good as described in the bill of lading c. if the lose or damage is not apparent- the notice must be given within 3 days of delivery 2. when notice in writing need not be given to the carrier- if the state of goo ds has, at the time of their receipt, been the subject of joint survey inspectio n Limit of the Liability of the Carrier for Loss or Damage to Goods Transported Se c. 4(5)(1); 1. $500 per package UNLESS the nature and value of such goods have been declared by the shipper befo re shipment and inserted in the bill of lading

2. This declaration, if embodies in the bill of lading a. Shall be prima facie evidence b. But shall not be conclusive on the carriers 3. Shipper and carrier may agree on another maxim amount but should no be less t han $500 4. Carrier can NOT be liable for: a. MORE than the amount of damage ACTUALLY sustained b. Loss or damage to goods if the value thereof has been knowingly and fraudulen tly MISSTATED by the shipper in the bill of lading - Code of commerce is brooder than COGSA - Mayer Steel vs CA only the carriers liability is extinguished if no sin is bra det within 1 year. But not the insurer. Insurer can t five we againt carrier by 1 year period. Exception: if the law applicable is not the COGSA example: code of commerce As a summary, the order of liability limit are(4blue 95): 1.declared value 2.bill of lading 3.in absence of 1 and 2 then $500 Prescriptive Period of Actions Under COGSA: (filing of case in court) 1. Must be brought within one (1) year after: a. The delivery of the goods, or b. The date when the goods should have been delivered 2. FAILURE to: Give the notice is not a condition precedent unlike in C.O.C. a. bring the action within one (1) year the carrier and the ship shall be discha rged from all liability from such loss or damage. b. Give the required NOTICE of LOSS- this shall not affect or prejudice the righ t of the shipper to bring the sult within the one (1) year period (EE Elser vs C A Nov 20, 1954) 4blue 95:Joint survey- no need to bring notice in writing Q: what law shall prevail, with respect to prescriptive periods? Civil Code or COGASA? A. The New Civil Code did NOT impliedly repeal the period of prescription under the COGSA, AS a SPECIAL LAW the COGSA prevails over the general provisions of th e Civil Code on prescription of action (Maritime Agencies vs CA 187 SCRA 346)

From what point should 1 year period be counted: 1. If delivery was made- from the date of delivery (included delivery to arrastr e operator) 2. No delivery- from the date when the good should have been delivered.

Instance Where the One (1) Year Prescriptive period Under the COGSA IS INTERRUPT ED: 1.in case an action has already been filed in court

2.when there is an express agreement to the effect 3.if it is delivered to wrong party

Effect of Extrajudicial Demand ptive period.

it shall not interrupt the running of the prescri

1. the general provisions of the Civil Code (Art 1155) cannot be made to apply, as such application would have the effect of extending the one-year period fixed by law 2. it is desirable that matters affecting transportation of goods by sea be deci ded in as short a time as possible AIR TRANSPORTATION Regulatory Body in Air Transportation Civil Aeronautics Board (CAB) Requisite Engage in Air Commerce- CPCN RA 776 Sec. 11 A certificate of Public Convenience and Necessity is a permit issued by the CAB authorizing a person to engage in air commerce and/or air transportation foreign and/or domestic.

WARSAW CONVENTION In General : 1. full title Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air 2. Date and Place Signed Warsaw Poland, October 12, 1929 3. Formal Adherence September 23, 1955 by Proclamation 201 issued by President R amon Magsaysay Is the Warsaw Convention Binding in the Philippines? 1. General Rule- YES, it has the force and effect of a law, being a treaty commi tment assured by the Philippine Government. 2. However- it does NOT operate as: a. an Exclusive enumeration of the instances for declaring a carrier liable for breach of contract carriage, or b. an ABSOLUTE limit of the extent of that liability 3. it must NOT be construed as to PRECLUDE the operation of the Civil Code and o ther pertinent laws- it does not regular, much less exempt the carrier from liab ility for damages for violating the rights of the passengers under the contract of carriage, ESPECIALLY if willful misconduct on the part of then carrier s employ ees is found or established.

Any transportation, in which according Meaning of International 2erformed Convention for HIRE 1ll INTERNATIONAL Transportation to The Warsawby (Art. 1.1) Transpiration to the contract made by Applicabilityaircraft shall applyof persons, baggage or goods the parties, the P A place of departure and the place of destination, whether or not there be a break 1in thethe territories or a transshipment are situated either:a signatory to the Within transportation of two high Contracting parties or is 2Warsawthe territory adverse to the agreement Within convention & of a signle high contracting Party, if there is an agreed s topping, place within a territory subject to the sovereignty, mandate or authori ty of another power, even though that power is not a party to this convention, Case: 1. Mapa vs CA- Jul 8, 1997 :Transportation to be performed by Several successive Air Carriers Art. 1(3) Transportation to be performed by several successive air carries shall be deeme d, for the purpose of this convention, to be one undivided transportation. If it has been regarded by the parties as a single operation, whether it has been agr eed upon under the form of a single contract or of a series of contracts, and it shall not lose its international character merely because one contract or a ser ies of contracts is to be performed entirely within a territory subject to the s overeignty, suzerainty, mandate , or authority of the same high contracting Part y

Limitation to the Liability of the Air Carrier Art. 22 (1) In transportation of PASSENGERS- 125,000 francs but the carrier and pax may agree to a higher limit of liability: (2) In transportation of CHEKED BAGGAGE of GOODS- 125 francs per kilo, unless t he consigner declares a higher value and pays a supplementary sum . (3) As regards OBJECTs of which pax takes charge HIMSELF (hand carried luggage) 15,000 francs per pax . Are 22 applies only to simple loss. Cases Where Art. 22 was applied by SC: Pan Am vs. IAC -164 SCRA 286 Cases Where Art. 22 was NOT Applied by SC: 1. Alitalia vs. IAC 192 SCRA 9 2. Pal vs. CA 207 Scra 100 if there is bad faith, Art. 22 can t be involve 3. Sabena vs CA (Mar 14, 1996) gross negligence 4. British Airwys vs CA is failure to raise obj. deny trial makes Art. 22 waived .

When the Air Carrier Shall Not be entitled to the Warsaw convention provisions w hich EXCLUDE or Limit his Liability Art. 25 (1) if the damage is caused by his WILLFUL MISCONDUCT or by such default on his part as, in accordance with the law of the court to which the case is submitted , is equivalent to willful misconduct (2) if the damage is caused by under the same circumstance by any agent of the c arrier acting within the scope of his employment

Art. 25 in relation to art. 22

Liability of Air Carriers

Luna vs CA -216 SCRA 107 (Nov 27, 1992) :limitation only applies to Art 22, & no other in the Warsaw convention Art. 26 When to file a complaint for Delay or Damage to goods or baggage with th e carrier this is condition precedent for fluting case against the carrier 1. receipt by the person entitled to delivery of luggage or good without complai ns is prima facile evidence that the same have been evidence that the same have been delivered in good condition and in accordance with the document of transpo rtation 2.in case of: a. damage- the person entitled to delivery must complain to the carrier forthwit h after the discovery of the damage, and at the latest within * 3 days from the date of receipt in the case of luggage, and * 7 days from date of receipt in the case of goods b.Delay latest within 14 days from the date on which the luggage or goods have b een placed at his disposal 3.every complaint must be made in writing upon the documents of carriage or by s eparate notice in writing dispatched within the times aforesaid.

Requisites for the Application of WC 1) It must be an international flight. If the ticket was bought in Bangkok for a flight in the US, from LA to Chicago, that is domestic flight (even if bought in Bangkok) 2) Two countries must both be signatories. Singapore is not a signatory.

Art. 29.Prescriptive Period in Filing Case for Damages. The right to damages shall be extinguished if an action is not brought within 2 years reckoned from; 1.) The date of arrival at the destination or 2.) The date on which the aircraft ought to have arrived, or 3.) The date on which the transportation stopped

Art. 30. Transportation by Successive Carriers in relation to art 1(3) 1). In the case of transportation to be performed by various successive carriers , each carrier who accepts passengers, baggage or goods shall be deemed to be one of the contracting parties to the contract of transportation insofar as the contract deals with the part of transportation which is performed under his supe rvision .

(2) In the case of transportation of this nature, the passengers or his represen tative can take action only against the carrier who performed the transportation during which the accident or delay occurred. Save in the case where, by expres s agreement, the first carrier has assumed liability for the whole journey. (3) As for baggage or goods, the passengers or consignor shall have a right to a ction against the first carriers, and the passengers or consignee who is entitle last delivery, shall have a right of action against the last carrier, and furth er, each may take action against the carrier who performed the transportation du ring which the destruction, loss, savaged, or delay took place. The carriers sha ll be jointly liable to the passengers or to the consignor or consignee. The provisions under the WC do not bar the passenger to sue instead under the Ci vil Code. Like there s a provision there for lost luggage, you have to file a cl aim from the airline company within 14 days, otherwise, your claim will be barre d. The Court has said that even if the passenger does not do that, the WC does not bar him to claim under the Civil Code. Or the 2-year prescriptive period un der the WC. That will not apply if the passenger was humiliated and treated discourteously. In the United Airlines case, the passenger made a demand, but he was given the run around. The Court said that since the delay in filing was due to the evasiv eness of the airline company, the prescriptive period under the WC shall not app ly. PAL case PAL unloaded luggage of passengers to take in cargoes to earn more freight.Held: There was misconduct. So you can t invoke limited liability. British Airways Passenger proved that the value of his lost suitcase was greater than the value provided in the WC. No objection was made. Held: That is waiver of the limited liability under the WC. There s a limitation on liability of lost luggage. However, the court has said th at: 1) Under the WC, if a passenger was not given a baggage claim tab, the Airline C ompany cannot invoke that limited liability. 2) WC says that limited liability cannot be invoked when the word used is the Fr ench word, dol , equivalent to the Spanish word, dolo . But in the English translatio n of the WC, it was translated as willful misconduct . The Court has said time and again that when the luggage is lost because of recklessness of the airline compa ny, it can t invoke its limited liability under the WC. Santos v. NW Orient Airlines Santos was a student in California. He was planning to go home for a Christmas vacation, so he bought a ticket in San Francisco, NW Orient. He had his ticket confirmed. On the day of departure, while checking in, he was told, We can t guara ntee that you ll be accommodated from Narita to Manila. You might be stranded in J apan. Santos backed out. He was eventually accommodated but he sued for damages. NW O rient said that under Article 18 of the WC, you could sue an airline company onl y in any of the following places: 1) Place where it is incorporated 2) Place where it has its principal office 3) Place where ticket was bought 4) Destination NW Orient claimed that NW was incorporated in Minnesota; it has its principal of fice there; the ticket was bought in San Francisco; and the ticket was a round t rip ticket, so the point of departure is also the point of destination. Therefor e, it is claimed that the point of destination is also SF. In other words, NW c

laims that Manila is not one of the places where you can sue. Held: No, WC was adopted in the French language. Am Jur has repeatedly said th at it is the French jurisprudence that should be consulted in interpreting the W C. In French jurisdiction, principal office is any place where a corporation ha s a branch office. NW has a branch office in Manila, so it can be sued here. Moreover, in round trip tickets, the place of departure is the place of destinat ion only when the roundtrip ticket has a definite date of return. If the date o f return is left open, the place of departure is not equivalent to the place of destination. What you have is an option to take the flight to the place where y ou came from. In this case, therefore, the place of destination is Manila. Spencer vs. NW Orient Airlines When you are suing on a tort, the WC provisions o n venue are not applicable. Damages Recoverable(2006 notes): 1.limited liability for baggage lost is set at $1000 and for the death of the pa ssenger at $100,000 under the Warsaw Convention and the subsequent amendatory tr eaties, but the carrier cannot avail of this limitation if the breach is attended by wil lful misconduct, bad faith, recklessness or improper behaviour on the part of an y official or employee for which the carrier is responsible. If there is satisfa ctory evidence of malice or bad faith by the airline s officers and employees, an air carrier may be sentenced to pay not only compensatory but also moral and exe mplary damages and attorney s fees. Mere breach of contract entitles the passenger to damages .Exemplary damages are recoverable if the breach is tainted with bad faith. Responsibility of the carr ier for the safety of passengers cannot be dispensed with by notice and stipulat ions(4blue95). Where a passenger with a confirmed ticket is bumped off by the airline to give w ay to another passenger ,there is a breach of contract entitling the passenger t o actual ,moral and exemplary damages. If however the breach is wanton, fraudulent, oppressive or malevolent ,exemplary damages are not compensable. Moral damages are recoverable only when the passenger dies, or even if alive, wh ere the carrier acted in bad faith. * in awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted fraudulently o r with malice or bad faith. * To warrant award of exemplary damages, the wrongful act must be accompanied by bad faith, and the guilty party acted in a wanton,fraudulent, reckless or malev olent manner.

Where the date and erroneous hour of departure of a passenger are confirmed by the common carrier(plane) and the passenger is bumped off due to his arriving i n the airport 1 hours before the erroneous departure hour, there is gross negli gence by the carrier entitling the passenger to actual ,moral and exemplary dama ges. No nominal damages can be awarded as they cannot coexist with actual damage s. * the award of nominal damages is in order. Nominal damages are adjudicated in o rder that a right of a plaintiff ,which has been violated or invaded by the defe

ndant ,may be vindicated or recognized and not for the purpose of indemnifying a ny loss suffered arising from any source enumerated in Article 1157, or in every case where any property right has been invaded. * If the passenger fails to take standard procedure of confirming ticket ,after a two day stopover in a city, the airline cannot be faulted for the passenger s n egligence.

2. in carriage of goods A passenger whose baggage was lost by the airline is entitled to recover damages allowed by Phillipine laws. The Warsaw convention provides $20 recovery per pac kage, presupposes absence of misconduct, bad faith, recklessness or otherwise i mproper conduct. The passenger can recover under both(the $20 is also applicable if the contents of a baggage lost by the airline is not declared however, if the baggage is unchecked, a recovery up to $400 is allowed). 4BLUE 95 notes: where however, the baggage of the passenger was lost but later o n found, preventing the passenger from participation in a special technical conv ention to which the passenger was specially invited, she is entitled to nominal damages of P40,000( Alitalia v IAC) * it is the duty of the carrier to inquire as to the nature of the articles ship ped and their value before consenting to carry them, and its failure cannot defe at the shipper s right to recover the full value of the package if lost, in the ab sence of a showing of fraud or deceit on the part of the shipper. * A claim for lost baggage if acknowledge by the carrier inspite of the fact tha t no baggage tags or checks could be presented by the passenger, entitles the pa ssenger to recovery. * In determining the amount of compensatory damages in breach of contract involv ing misplaced luggage, it is vital that the claimant satisfactorily prove during the trial the existence of the factual basis of the damages and its causal conn ection to defendant s acts. * An airline is not liable for the loss of baggage in an amount in excess of the limits specified in the tariff which was filed with the proper authorities ,suc h tariff being binding on the passenger regardless of the passenger s lack of know ledge thereof or assent thereto. * Where in breaching the contract of carriage the defendant airline is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of obligation which the par ties had foreseen or could have reasonably foreseen. In that case, such liabilit y does not include moral and exemplary damages.

JURISDICTION Art 28 (1)An action for damages must be brought , at the option of the plaintiff , in the territory of one of the high contracting parties, either before the cou rt of the domicile of the carrier or of his principal place of business, or wher e he has a place of business through which the contract has been made, or before the court at the place of destination . Where a Complaint for damages against an air carrier may be instituted: 1. The 2. The 3. the n made 4. The court of the domicile of the carrier court of its principal place of business court where it has a place of business through which the contract had bee court of the place of destination 4blue 95

PUBLIC SERVICE ACT Purpose of the Public Service Act: 1. secure adequate, sustained service for the public at the least possible costs , and 2. Protect and conserve investment which have already been made for that purpose

Meaning of PUBLIC In Public Service individuals in general restriction or selectio n to the extent that the capacity of the utility may admit of such service or us e Note: a. The fact that the service is limited to particular district or lown does not prevent the business from being a public utility b. The number of people actually served does not determine whether a person or c ompany is a public utility c. Such person or company which holds himself out to serve all who wish to avail themselves of the service may be a public utility even though only d. 1 or 2 people actually receive service A Public utility is a business or service which is engaged in regularly supplying the public with some commodity or service a. electrically b. gas c. water d. transporation e. telephone service principal determining characteristic of a public utility is that of service or r eadings to serve the public which has the right to demand and receive its serv ice or commodities

State regulation of public utilities 1.Basis- for the state to regulate public utilities is POLICE POWER 2.The state must regulate and control public utilities to protect the public int

erest to promote the health ,comfort and welfare of the people a.regulate rates and changes b.prevent discrimination on the part of the public utility against (those who em ploy it), and c.to make orders governing the conduct up and public utility to the ends; d.That its efficiency may be built up and maintained and e.that the public and its employees may be accorded desirable safeguards and con venience 3.The states may delegate to the public service commission the power to regulate public utilities, a. Land Land Transportation Franchising & regularly Board ( LTFRB) b. sea maritime industry Authority (Marina) c. air- Civil aeronautics Board (CAB) 4blue 95 Note: Any reference to the Public Service Commission ( which is now def unct) shall be understood to be the appropriate board, authority or agency of th e government that took over its function Sec 15, Certificate of Public Convenience or certificate of Public Convenience a nd Public Necessity No public service shall operate in the Philippines without possessing a valid an d subsisting certificate from the poer regulatory body known as certificate of convenience as the case may be, to the effect that the operation of said service and the authorization to do business will promote the public interest in a prop er and suitable manner. Entities engaged in Public service who are exempted from obtaining a CPC or CPCP N: 1. Public service owned or operated by government of GOCC s 2. Grantees of legislative franchise when expressly exempted from obtaining a CP C 3. those expressly exempted from the jurisdiction of the regulating bodies Where to Obtain the CPC s or CPCPN s MARINAengagedTransportationland transportation by theBoardcarriers ThoseBodyMarineUtility LANDFranchisingandRegulatorybyuse of or domestic LTFRB Civil Kind or PublicinIndustry Authority transportation, foreign tricycles Govt of LandAeronautics BoardTranspiration services WATER City CAB Municipalpublic providing of domestic & overseas AIR commerce and/or operation Council motorized vehicle

Requisites for the Grant of A CPC or CPCN 1. Applicant a. citizen of b. corporation its capital is must be: the RP, OR or association organized under the law of the RP at least 60% of owned by such citizens

2. The applicant must be financially capable of undertaking the proposed service and meeting the responsibilities, Incident its operation. 3.The applicant must prove that the operation of the public service proposed and

the authorization to do business will promote the public interest in a proper a nd suitable manner. Primordial Consideration in Granting Franchises or CPC s: PUBLIC INTEREST

Different rules in Land Transportation Before Prior permitting a new operator Definition Rule Operator Rule (page 237) to invade the territory of another already esta blishes with a CPC, the prior operator must first be given the opportunity to ex tend its service in order to meet the public needs in the matter of transportati Meaning on the public utility operator should be shielded from _____ competition by affording him an opportunity to improve his equipment and service before allowi Where there are various applicants for a public that he covers Prior Applicant Rule ng a new operator to serve in the same territoryutility over the same territory, ALL CONDITIONS BEING EQUAL, priority in filling of the application for a CPC be One of the purposes of the Public Service Law sis to protect Protection of Investment in comes an important factorRulegranting or refusal of the CPC and conserve invest But this rule is NOT absolute as nobody has an exclusive right to secure a franc ments which have already been made for that purpose by public service operators hise or CPC When prior Operator or Protection of investment Rule NOT Applicable: 1. where public would better be served by the new operator 2. Where the prior operator has failed to make an offer to meet the increase in traffic 3. Where the CPC granted to the new operator is maiden CPC, which does not over lap with the entire route of the old operator but only a short portion thereof a s a convergence point (Manbusco vs Francisco, 32 SCRA 405) 4. If the application of the rule would be conducive to monopoly of service, and contrary to the principle that promotes healthy competition (Villa Rey vs Panga sinan, 5 SCRA 234)

Grounds for Suspension or Revocation of CPC: 1. [Sec. 16(m)] - the facts and circumstances on the strength on which CPC was issued have been misrepresented or materially changed 2. [Sec. 16(n)] The holder thereof has violated or willfully and contumaciously refused to comply with any order, rule, or regulation of the regulatory bodies o r any provision of the Public Service Act 3. Art. 1765, Civil Code the common carrier repeated fails to comply with this d uly to observe extraordinary diligence as prescribed by law Due process in Revocation or Cancellation of CPC: 1. Notice of Hearing 2. Formal Change not necessary for as long as the holder of CPC is given his day in court (CIR vs Buan, July 31, 1958] Sec. 16(n) suspension of CPC 1. May be done PRIOR to a hearing BUT cannot exceed 30 days 2. Ground to avoid serious and irreparable damage or inconvenience to the public or private interests.

OPERATORS OF PUBLIC SERVICES Sec. 19(a) Unlawful Service It shall be unlawful for any public service to: 1. provide or maintain any service that is unsafe, improper, or inadequate or 2. withhold or refuse any service which can reasonably be demanded and furnished , as found and determined by the Commission in a final order which shall be conc lusive and shall take effect in accordance with this Act, upon appeal or otherwi se. Case: Meralco vs. CA (157 SCRA 243) Sec. 20. Acts Which are UNLAWFUL without Approval of the Commission 1. Sec. 20(e) To increase its rates 2. Sec. 20(b) To operate new units (See Ammen Transportation vs Francisco, Nov. 29, 1957) 3. Sec. 20(g) Sell, mortgage or lease its CPC property, franchise or rights (Cog eo Cubao vs CA 207 SCRA 346)

Requirements to Entitle a Common Carrier to increase his Units He must show that there is a PUBLIC NEED for it. In other words, he must prove t hat: 1. He had regularly undertaken all his authorized trips 2. His buses were sufficiently loaded with pax 3. Many travelers could not be conveniently accommodated

4blue 95 notes: LTFRB, MARINA and CAB CANNOT motu propio cancel a certificate of public convenience(CPC). Since the common carrier is entitled to due process (notice&hearing) And the ground for cancellation of a certificate of public convenience is failur e on the part of the common carrier to exercise extra ordinary diligence in tran sporting passengers or goods. 4blue 95 notes:CPC constitutes neither a franchise or a contract, it confers no property rights and is a mere license or privilege. Therefore it can be subject to regulation founded on the police power of the state. 4blue 95 notes:the sale of a franchise without approval of the respective above bodies is not binding against the public or the governing bodies and that the gr antee of record continues to be responsible under the franchise in relation to t he public and the governing bodies. 4blue 95 notes: in PAL v CAB (270 S 533): the issue here is that does CAB have t he authority to issue a certificate of public convenience and necessity (CPCN) or Temporary Operating Permit (TOP) even if PAL does not yet possess a legislat ive franchise? HELD: YES, there is nothing in the law nor in the constitution which indicates that a legislative franchise is an indispensable requirement for an entity to op erate as a domestic air transport