COMMON CARRIERS

DEFINITION:
Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public. (ART. 1732, NCC) PUBLIC SERVICE - Every person that now or hereafter may own, operate, manage or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental a and done for general business purposes, and done for common carrier, railroad, street railway, subway motor vehicle, either for freight or passenger, or steamship line, ferries and transportation, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communication systems, wire or wireless broadcasting stations and other similar public services. (SEC 13b, PUBLIC SERVICE ACT) Common carriers are the same as public service. No distinction whether: o Principal business or ancillary activity/sideline o Regular or scheduled o Episodic, occasional, unscheduled o General public, general community/population OR narrow segment of general population (DE GUZMAN VS. CA) o Absence of a fixed route o Failure to issue tickets o Maintain terminals (ASIA LIGHTERAGE AND SHIPPING CO VS. CA) Not limited to moving objects, may be pipelines, not limited to transportation by trains, trucks ships and the like. as long as it is by land, water or air. (FIRST PHILIPPINE INDURSTRIAL CORPORATION VS. CA) Customs broker is a common carrier because it undertakes to deliver goods for pecuniary consideration, and the transportation of goods is an integral part of its business (CALVO VS. UCPB GENERAL INSURANCE CO INC) NOT COMMON CARRIERS: o Travel agencies engaged in the business of arranging, facilitating, booking, ticketing and accommodation of travelers. It is merely an agent of the airline and has an ordinary contract of services. (CRISOSTOMO VS. CA) o Private carriers carriers that renders and offers services EXCLUSIVELY for a PARTICULAR PERSON OR ENTITY AND TO NO OTHER (FGU INSURANCE CORP VS GP SARMIENTO TRUCKING CORP) TEST WHETHER A PARTY IS A COMMON CARRIER:

1. Engaged in: business of carrying goods for others as a public employment holds himself out as ready to engaged in the transportation of goods for persons generally as a business and not as a casual occupation. 2. Goods: kind to which his business is confined 3. Method: by which his business is conducted and over his established roads 4. for hire (FIRST PHIL IND CO VS CA) SUBSECTORS OF THE ELECTRIC POWER INDUSTRY: 1. Generation sector: generation companies and power generation facilities 2. Transmission Sector: conveys electric power through high voltage power backbone or grids; 3. Distribution Sector: distribution utilities that convey electricity from the high voltage transmission to end-users via the subtransmission assets. Distribution of electricity to end-users shall be a regulated common carrier business requiring a national franchise. WHO MAY DISTRIBUTE ELECTRIC POWER? Private distribution utilities, cooperatives, local government units, all subject to the regulation by ERC (SEC 22, RA 9136) DISTRIBUTION UTILITY any electric cooperative, private corporation, government owned utility or existing local government unit, which has an exclusive franchise area to operate a distribution system in accordance with Electric power Industry Reform Act (SEC 4 (Q) RA9136) It has the obligation to provide distribution services and connections to its system for any end-user within its franchise area consistent with the distribution code. They are required to provide open and non-discriminatory access to its distribution system to all users. DILIGENCE REQUIRED OF COMMON CARRIERS: Common carriers, by the nature of their business and by reason of public policy are bound to observe extraordinary diligence in the vigilance over goods and the safety of their passengers carried by them, according to all circumstances of each case. (ART 1733, NCC) NOT APPLICABLE TO: o Private carriers deemed to observe only an ordinary diligence/diligence of a good father of a family (ART. 1173, NCC) PRESUMPTION OF FAULT OR NEGLIGENCE OF A COMMON CARRIER: o In case of loss, damage or deterioration of the goods (ART 1734, NCC) o In case of injury or death to passengers (ART 1756, NCC) EXCEPTION OF PRESUMPTION OF FAULT/NEGLIGENCE OF CC: by competent evidence showing that cc has observed extraordinary diligence over the goods (RP VS LORENZO SHIPPING) GR: The duty of the CC to exercise extraordinary diligence is NOT SUBJECT TO A REDUCTION to another degree of diligence. EXCEPTION: o Agreement between the parties to observe a degree of diligence less than extraordinary that should be: Signed in WRITING

Supported by VALUABLE CONSIDERATION other than the service rendered Stipulation is REASONABLE, JUST AND NOT CONTRARY TO PUBLIC POLICY.

SAFETY OF PASSENGERS: GR: The responsibility of a CC for the safety of passengers cannot be dispensed with OR lessened by stipulation, by: posting of notices, statements on tickets, or otherwise (ART.

1757, NCC) EXCEPTION: When the passenger is carried gratuitously, a stipulation limiting the CC liability for negligence is VALID, but NOT for WILLFUL ACTS or GROSS NEGLIGENCE. Reduction of fare does not justify any limitation of the CCs liability.(ART. 1758) LIABILITIES OF COMMON CARRIERS CONTRACTUAL relationship between CC and shipper/passenger is a contract of carriage. o Any suit against CC is a BREACH OF CONTRACT ORIGIN SUIT TO BE FILED PRESUMPTION NEGLIGENCE OF

KINDS CONRACTUAL (ART. &1756)

1735 Contract of Carriage

Breach of Contract

No need to prove negligence; it is presumed

Employers shall be liable for the damages caused by Liability of employer: their employees and household helpers acting withi NEGLIGENCE in QUASI-DELICT the scope of their assigned tasks, even though the selection former are not engagaed in any business or industry supervision employees. (ART2180,NCC) of and its

VIGILANCE OVER GOODS

GENERAL RULE: Common carriers from the nature of their business and by reason of public policy, are bound to observe extraordinary diligence in the vigilance over goods and for the safety of passengers transported by them, according to all the circumstances of each case. (ART.1733,NCC) EXEMPTING CAUSES: EXCEPT: Flood, storm, earthquake, lightning, or other natural disaster or calamity; (ART 1734a) o Natural disaster must be the proximate and only cause of the loss (ART 1739) o CC has exercised due diligence to prevent or minimize the loss before, during and after the occurrence of the disaster (ART 1739) o E to the E: CC negligently incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility (ART 1740) Act of the public enemy, whether civil or international; Act/omission of the shipper/owner of the goods; Character of the goods, or defects in the packing or in the containers

 Order/act of a competent public authority (ART 1734,NCC) CONTRIBUTORY NEGLIGENCE Shipper/owner MERELY CONTRIBUTED to the LDD of the goods, the PROXIMATE CAUSE being the negligence of the CC, the the CC shall be liable for damages, which

however, shall be equitably reduced. (ART 1741,NCC) DURATION OF LIABILITY EXTRAORDINARY RESPONSIBILITY OF CC lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually and constructively, by the carrier ot the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Art.

1738 (ART 1736) DELIVERY OF GOODS TO CC CUSTOMS AUTHORITIES = NOT delivery to the consignee/person who has the right to receive them because they are in the hands of the government and the owner cannot exercise dominion over them, however, the parties may agree to LIMIT THE LIABILITY OF THE CARRIER considering that the goods still have to go through inspection of the customs authorities before they are actually turned over to the consignee (LU DO VS BINAMIRA) ARRASTRE OPERATOR = observe same diligence like a CC and a warehouseman. If arrastre operator was paid arrastre charges much lower than the true value of the goods, then he is not liable for the full value of the merchandise. (ASIAN TERMINALS INC VS DAEHAN FIRE AND MARINE INSURANCE LTD) ACTUAL / CONSTRUCTIVE DELIVERY ACTUAL DELIVERY: o possession has been turned over to the consignee/duly authorized agent and o reasonable time is given him to remove the goods. (ART1738) CONSTRUCTIVE DELIVERY: o There is notice of the arrival o Consignee FAILS to claim the goods after the LAPSE of a reasonable period. Contract between CC and consignee becomes a contract of deposit. CC no longer required to exercise extraordinary diligence, but only due diligence of a good father of a family.

TEMPORARY UNLOADING OR STORAGE The common carriers duty to observe extraordinary diligence in the vigilance over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit, UNLESS the shipper/owner has made use of the right of stoppage in transit. (ART 1737) RIGHT OF STOPPAGE IN TRANSIT right of an UNPAID SELLER when he has part with the goods and the buyer becomes insolvent. Unpaid seller is entitled to the possession of the goods as if he never parted with it, and his responsibility is reduced to a MERE BAILLEE or DEPOSITORY.

VOID STIPULATIONS

Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy, thus considered VOID: 1. Goods are transported at the risk of the owner/shipper; 2. CC will NOT be liable for ANY LLD of the goods; 3. CC need not observe ANY DILIGENCE in the custody of the goods; 4. CC shall exercise a degree of diligence less than that of a good father of a family, or a man of ordinary prudence in the vigilance over the movables transported; 5. CC shall NOT be responsible for the ACTS or OMISSION of his/its employees; 6. CCs liability for the acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished; 7. CC is NOT responsible for the LDD of goods on account of the defective condition of the car, ship, airplane, or other equipment used in the contract of carriage; (ART 1745) NOT APPLICABLE TO: Private carriers carry a special cargo or chartered to a special person only. The policy has no force where the public at large is not involved. Recovery cannot be had for loss/damage to the cargo against the shipowners UNLESS the same is due to the personal acts/negligence of owners/manager. (HOME INSURANCE CO VS AMERICAN STEAMSHIP AGENCIES) LIMITATION OF LIABILITY TO FIXED AMOUNT A contract fixing the sum that may be recovered by the owner or shipper for the LDD of the G is VALID, if it is o reasonable and just under the circumstances o and has been fairly and freely agreed upon. (ART 1750) A stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading, UNLESS THE SHIPPER or OWNER DECLARES A GREATER VALUE is binding.

(CITADEL LINES, INC VS CA) LIMITATION OF LIABILITY IN ABSENCE OF DECLARATION OF GREATER VALUE Stipulations made in a bill of lading 1. exempts the carrier from any and all liability for L/D occasioned by its own negligence - INVALID 2. providing for an unqualified limitation of liability to an agreed valuation. - INVALID 3. limiting the liability of carrier to an agreed valuation UNLESS shipper declares a greater value and pays a higher rate of freight. CAN THE CC STIPULATE A LESSER VALUE? YES, if the shipper agree, chooses and names a stipulated valuation of his property in case of loss, even by the carriers negligence, he cannot thereafter recover more than the value which he thus places upon his property. (HE HEACOCK CO VS MACONDRAY &CO.) LIABILITY FOR BAGGAGE OF PASSENGERS CUSTODY OF CARRIER/EMPLOYEES CUSTODY OF PASSENGERS Liability shall be governed by provisions on common carriers. Provisions on hotel keepers (necessary deposits) Responsible as a depository as long as they are: >given notice of the presence of the baggage >observed precautions which the carrier advised the passenger to undertake

SAFETY OF PASSENGERS
A common carrier is bound to carry passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances (ART 1755, NCC) Must provide safety not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage

(LRTA VS NAVIDAD) PRESUMPTION OF NEGLIGENCE In case of death or injuries to passengers, the presumption is that the common carrier is liable. (ART 1756) There is no need to prove that CC was at fault or was negligent. All that is need to be proven is the existence of the contract and the fact of its non-performance by the carrier. (SINGAPORE AIRLINE LIMITED VS FERNANDEZ) The contributory negligence of the passenger does not take away the carriers responsibility although the liability is mitigated by the passengers contributory negligence. (ART.1762) Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the formers employees, although such employees may have o Acted beyond the scope of their authority o In violation of the orders of the CC (ART 1759) A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers / strangers, if: o CCs ee though the exercise of the diligence of a good father of a family could have

prevented or stopped the act or omission. (ART 1763) VOID STIPULATIONS Dispensing/ lessening the responsibility of the CC for the SoP by: o Stipulation o Posting of notices o Statements on tickets, or otherwise (ART 1757) A ticket stipulating that the CC will only exercise ordinary diligence is VOID. DURATION OF LIABILITY A public utility bus, once it stops, is in effect making a continuous offer to bus riders. It is the duty of the driver and conductor to do no act that would have the effect of increasing the peril to a passenger while he was attempting to board the same. Premature acceleration is a BREACH of that duty. Must stop at a reasonable length of time to afford passengers an opportunity to board and enter. By stepping and standing on the platform of he bus is already CONSIDERED A PASSENGER and is entitled all the rights and protection pertaining to the contractual relation. (DANGWA TRANSPORTATION CO INC VS CA)

Entering the LRT STATION AFTER PURCHASING A TOKEN is already considered a passenger. Standing on the platform while waiting for the train was where he was supposed to be. (LRTA VS. NAVIDAD) Passengers who remain within the premises of the carrier to retrieve their baggage and stay therein for a REASONABLE time for the purpose are still passengers. Any injury or death occasioned by the carrier at that point in time, are liabilities of the CC under the CoC.

(LA MALLORCA VS CA) LIABILITY FOR ACTS OF OTHERS Employees negligence causing damage or injury to another instantly arises a presumption that ER failed to exercise due diligence in the selection and supervision of its employees. o To avoid the liability for Q.D., ER must overcome the presumption by presenting CONVINCING PROOF that he exercised due care and diligence of a good father of a family in the selection and supervision of his employee. Bare allegations, unsubstantiated by evidence, are not equivalent to proof. (REAL VS. BELO) A carrier maybe sued based on a tort/QD: the act that breaks the contract may also be a tort even if the relationship of passenger and carrier is contractual in nature (AIR FRANCE VS. CARRASCOSO) Passengers cause of action vs. carrier: CONTRACT OF CARRIAGE o Carrier may not invoke defense of diligence in the selection and supervision of its driver to relieve it from liability. o Carrier MAY invoke DoD in SnS of Driver if it is sued under Q.DELICT Passengers cause of action vs. driver o Cause of action MAY NOT BE under CONTRACT OF CARRIAGE o Cause of action is only culpa aquilana (QD) Art. 1764 NCC, Art 2206 payment of indemnity for death of passengers caused by breach of contract = P50k Art. 2199 except as provided by law, or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as has duly proved ART. 2206 spouse, legitimate and illegitimate descendants and ascendants of the deceased may dmean moral damages for MENTAL ANGUISH by reason of the death of the deceased) EXEMPLARY DAMAGES ATTYs FEES COMPENSATI ON FOR LOSS OF EARNING CAPACITY ART 2232 in contracts and Q Contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent reckless manner. ART 2208 may be awarded if exemplary damages are awarded Art. 1764 NCC, Art 2206 defendant shall be liable for the loss of earning capacity of the deceased. Paid to: heirs NE = [2/3 x (80-age of deceased] x [Annual Income Living Expenses]

EXTENT OF LIABILITY FOR DAMAGES INDEMNITY FOR DEATH ACTUAL DAMAGES MORAL DAMAGES

BILL OF LADING
Written acknoweldgement of receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his or her order. o Receipt for the goods shipped, recites the date and place of shipment, describes the goods and quantitiy, weight, dimensions, identification marks, condition, quality and value o Contract transport and deliver the same as therein stipulated, names contracting parties, (including consignee) fixes the route, destination and freight rate or charges and stipulates the rights and obligations assumed by parties. o Document of Title PERIOD OF DELIVERY OF GOODS If a period has been fixed for the delivery of goods, it must be made within such time. Failure to do so: carrier shall pay the indemnity stipulated in the bill of lading, shipper/owner are not entitled to anything else.

No indemnity has been stipulated and delay exceeds the time fixed in the bill of lading: carrier shall be liable for the damages which the delay may have caused. (ART.370, CODE OF COMMERCE) No period fixed for the delivery of goods: carrier is bound to forward them in the FIRST SHIPMENT of the same/similar goods which he may make point where he must deliver them; and should he not do so, the damages caused by the delay should be for his account. (ART 358, CoC) DELIVERY WITHOUT SURRENDER OF BILL OF LADING Carrier may be justified in making delivery to the person named in the instruction even without the presentation of the bill of lading when: Carrier has been instructed by shipper to deliver the perishable goods shipped without awaiting for bill of lading

Established practice for shipper to request the shipping lines to immediately release perishable cargoes through phone calls. (MACAM VS CA) REFUSAL OF CONSIGNEE TO TAKE DELIVERY Consignee may refuse to receive the goods in the following instances: 1. part of the goods transported be delivered: may refuse to receive it when he proves that he cannot make use of it without the others; 2. goods are rendered useless for sale or consumption for particular purposes for which they are to be used: shall not be bound to receive them and may leave them in the hands of the carrier, demanding payment for their value at the current market price on said day; 3. if among the damaged goods some in good condition and without defect whatsoever, the forgoing provision shall be applicable with regard to damaged ones, and consignee shall receive those which are sound, this segregation being made by distinct and separate pieces, without dividing for such purpose on whole article, unless the consignee proves impossibility of conveniently utilizing them in this form. Same rule in bales and packages, with distinction of those which appear sound. PERIOD FOR FILING CLAIMS 1. 24 hours following receipt of merchandise, the claim against the carrier for damage or average be found therein upon opening the packages may be made, PROVIDED that the indications of the

damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be admitted only at the time of the receipt. After the periods mentioned have elapsed, or the transportation charges have been paid, NO CLAIM SHALL BE ADMITTED AGAINST THE CARRIER WITH REGARD TO THE CONDITION IN WHICH THE GOODS TRANSPORTED WERE DELIVERED. (ART 366, COC) Claims for damage to themerchandise transported may be made upon the carrier within the following times:

Damage is APPARENT from the EXTERIOR of Make upon receipt of the package (ART the package 366COC) Verbal claim made immediately is sufficient compliance with the law (MAPASO GOLDFIELDS VS. COMPANIA MARITIMA) NOT APPARENT from EXTERIOR PART of the 24 hours following the receipt of the merchandise package (ART 366 COC) (SOUTHERN Receives merchandise, paying freight charges Claims are EXTINGUISHED without protest LINES VS CA)

OBJECT SOUGHT: to compel consignee of goods to make PROMPT DEMAND FOR SETTLEMENT of alleged damages suffered by the goods while in transport, so carrier may be able to verify all such claims at the time of delivery or within 24 hours after, and fix responsibility and secure evidence while the matter is still fresh in the minds of the parties

(ROLDAN VS LIM PONZO & CO) PERIOD FOR FILING ACTIONS This situation is only for those DELIVERED or MISDELIVERED and NOT FOR NONDELIVERY. 10 years breach of written contract 4 years Q DELICT (ANG VS. AMERICAN STEAMSHIP AGENCIES)

MARITIME COMMERCE
CHARTER PARTIES: maritime contract by virtue of which the owner or agent of a vessel binds himself to transport merchandise of persons for a fixed price and where the ship or some part thereof is leased by the owner to another person for a specified period, voyage or purpose. BAREBOAT/DEMISE CHARTER Receives the ship from the ship owner or agent in a DEFINI TION BARE condition with no provisions, supplies or crew. CONTRACT OF AFFREIGHTMENT TIME CHARTER Use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for others for a fixed period of time Supplies the ships stores, pays for the wages of the master and crew, defray expenses for maintenance of ship VOYAGE/TRIP CHARTER Use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for others for a single voyage. Supplies the ships stores, pays for the wages of the master and crew, defray expenses for maintenance of ship

OWNE R

Not the owner pro hac vice

CHART ERER:

owner pro hac vice Supplies the ships stores, pays for the wages of the master and crew, defray expenses for maintenance of ship as a ship owner and is liable for all consequences of the voyage NOT LIABLE: destruction or damage to the goods or injuries/death of passengers was due to unseaworthy condition of the vessel.

Lessee of ship

Lessee of ship

LIABLE

NOT LIABLE

CC/PC

Becomes private carrier

Common carrier

Common carrier

LIABILITY OF SHIPOWNERS AND SHIPPING AGENTS Ship owner: person with control, possession, management and ownership of vessel. Ship agent: (naviero) ENTRUSTED with provisioning and representing the vessel in the port in which it may be found. Solidarily liable with owner for losses or damages for which the ship owner is liable for. Liable for: debts incurred by the captain for REPAIR and PROVISIONING of the vessel. He is not an agent as defined under the NCC.

Reimbursable from ship owner. May make abandonment of the ship to limit the liability of the ship owner to the value of the Bessel, appurtenances and freightage. DOCTRINE OF LIMITED LIABILITY (ART 587) The agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight he may have earned during the voyage EXCEPTIONS TO LIMITED LIABILITY 1. injury or death to a passenger is due either to the fault of the ship owner or concurring negligence of the ship owner and captain (MANILA STEAMSHIP CO IN VS. ABDULHAMAN) 2. vessel is INSURED 3. workmens compensation claims (ABUEG VS SAN DIEGO) ACCIDENTS AND DAMAGES IN MARITIME COMMERCE GENERAL/GROSS AVERAGE Includes all expenses and damages which are DELIBERATELY CAUSED in order to save the vessel/cargo from a real and known risk. Incurred for THE BENEFIT OF ALL. Requisites: 1. existence of a COMMON DANGER 2. DELIBERATE sacrifice of the vessel and/or cargo /parts of the vessel/cargo 3. Taking of the legal steps BEFORE the deliberate sacrifice 4. SUCCESS in saving what was intended to be saved. LEGAL STEPS: 1. captain calls a meeting among sailing mate, officers and all persons interested in cargo 2. Resolution is made 3. Resolution is entered in a log book stating the reasons for the decision. (must be stated in the minutes of the meeting) st 4. Upon arrival at 1 port: captain shall deliver a copy of the minutes to the Maritime Judicial Authority within 24 hours upon arrival of ship. 5. Ratification of the minutes under oath. Cargo owned by Mr. X is jettisoned other cargo owners, ship owner and Mr. X shall proportionately share in the loss Wages of crew held HOSTAGE BY ENEMIES, PRIVATEERS Wages and victuals of crew during voyage borne by ship owner EVEN IF UNDER QUARANTINE Hull of the ship was damaged when it hit a submerged rock, the expenses for REPAIR OF THE SHIP is particular average. PARTICULAR OR SIMPLE AVERAGE Includes all expenses and damages caused to the vessel/her cargo which NOT INURED TO THE COMMON BENEFIT of all the persons interested in the vessel and cargo.

Losses suffered by the cargo because of the inherent defect in the packing borne by CARGO OWNER.

OR PIRATES Treatment of the crew who was wounded/crippled in defending/saving the vessel. COLLISIONS Collision impact of 2 moving vessels Allision 1 moving and 1 stationary Regulated by: Code of Commerce Three Zones of Collision 1. First Zone time up to the moment when the RISK OF COLLISION BEGINS; the moment the vessels find each other traveling IN THE SAME AREA. 2. Second Zone moment the RISK OF COLLISION BEGINS COLLISION BECOMES A CERTAINTY. Determines the negligence of the vessel. 3. Third Zone COLLISION BECOMES A CERTAINTY ACTUAL IMPACT if the vessel having right of way makes a wrong maneuver or a wrong move to AVOID A COLLISION made certain by the negligent acts of the other vessel during the 2 nd zone, the wrong move of the INNOCENT VESSEL is called an error in extremis: does not make the innocent vessel liable. Fault of 1 vessel vessel at fault liable for ALL losses and damages (ART.826 CoC) Both at fault - bear own damage, solidarily liable to damage to their cargoes (ART 827,CoC) Cannot determine whos at fault bear own damage, solidarily liable to damage DOCTRINE OF INSCRUTABLE FAULT (ART. 828 COC) Fortuitous event NO ONE LIABLE, bear own damage (ART 830, CoC) Forced by 3rd vessel to collide with another vessel owner of 3rd vessel indemnify losses and damages caused, captain liable to owner (ART 831, CoC) Storm or Force Majeure o Vessel properly anchored and moored collide with another particular average of the vessel anchored. The anchored vessel will not be liable if PROPERLY MORRE AND ANCHORED (ART 832) Does not apply to SMALL BOATS IN RIVERS and BAY TRAFFIC NOT APPLICABLE: o Defense: good father of a family o Doctrine of last clear chance o Doctrine of contributory negligence

Rules in Collision of Vessels

BARRATRY: An act committed by the master or mariners of a vessel, for some unlawful or fraudulent purpose, contrary to their duty to the owners, whereby the latter sustain injury. It may include negligence, if so gross as to evidence fraud. SUPER CARGO: An agent of the owner of goods shipped as cargo on a vessel, who has charge of the cargo on board, sells the same to the best advantage in the foreign market, buys a cargo to be brought back on the return voyage of the ship, and comes home with it. TOWAGE NO REWARD must be given . Crew does not have an interest or rights in the remuneration pursuant to the towage contract SALVAGE Reward must be given to the crew of the salvage vessel and to other participants in salvage services Crew is entitled to salvage, and can look to the salvaged vessel for its share. SUBJECTS OF SALVAGE: 1. ship 2. jetsam goods cast in the sea which sunk and remained underwater 3. floatsam goods that float upon the sea when cast overboard 4. ligan/lagan goods cast into the sea tied to a buoy, so hat they may be found again by owners.

CARRIAGE OF GOODS BY SEA ACT

The laws of the country to which the goods are to be transported govern the liability of the common carrier in case of LDD (EASTERN SHIPPING LINES VS IAC) COGSA is suppletory to NCC, only filling up the limitation in the carriers liability in the absence of a shippers declaration of a higher value in the bill of lading.

Delay in delivery is NOT loss or damage to the goods. Prescription is governed by NCC. (SEC 3, COGSA) NOTICE OF LOSS/DAMAGE Unless notice or loss or damage and the general nature of such loss or damage by ginven in writing to the carrier or his agent at the port of discharge at the time of removal of the goods into the custody of the person entitled to delivery hereof under the contract of carriage, SUCH REMOVAL shall be prima facie evidence of the DELIVERY by the carrier of the goods as described in the bill of lading. If the loss or damage is NOT APPARENT, the notice must be given WITHIN 3 DAYS OF THE DELIVERY (SEC 3.6 COGSA) o FAILURE OF NOTICE WITHIN 3 DAYS WILL NOT BAR RECOVERY if a SUIT is nontheless FILED WITHIN 1 YEAR FROM DELIVERY OF THE GOODS OR from the date when the goods should have been delivered. PERIOD OF PRESCRIPTION FILE within 1 YEAR FROM DELIVERY of the goods OR from the date when the goods should have been delivered. o NOT APPLICABLE: conversions/misdeliveries

o The period of 1 year is not interrupted by a written extrajudicial demand. (DOLE PHIL INC vs MARITIME CO) 10 years written contract/bill of lading 6 years oral contract (Q.Contract) 1 year losses, damage of goods or non-delivery Stipulation REDUCING the 1 year period NULL AND VOID Agreement SUSPENDING the 1 year period VALID o Must be agreed upon APPLICABLE to : insurer under its subrogatory right. Shipper vs insurer (payment under insurance policy) 10 YEARS (written contract)

LIMITATION OF LIABILITY (ABSENCE OF DECLARATION OF A HIGHER VALUE) $500/package (SEC 4.5, COGSA)

PUBLIC SERVICE ACT

Business or service engaged in supplying the public with some commodity or service of public consequence. NECESSITY FOR CERTIFICATE OF PUBLIC CONVENIENCE GR: No public service shall operate without having been issued a certificate of public convenience or a certificate of public convenience and necessity. (SEC 15 CA146) MERE LICENSE or PRIVILEGE NOT a franchise or contract NO vested or property right/interest May be withdrawn BUT IN ITS PURELY PRIVATE ASPECT: it may be deemed property because it has value and may be subject to levy. CERTIFICATE OF CONVENIENCE AND NECESSITY Needs franchise No legislative franchise

CERTIFICATE OF CONVENIENCE

No need for Certificate of public convenience: 1. warehouses 2. animal drawn vehicles, bancas powered by oars or sails, tugboats and lighters 3. airships EXCEPT as to fixing of rates 4. 5. 6. 7. radio companies EXCEPT as to fixing of rates Public utilities operated by the government or its political subdivisions ice plants public markets Regulates land transportation Registration of motor vehicles Regulates air transportation Registration of aircraft and maintains airports Regulates electric or power companies Communication utilities and services, radio communication

Land Transportation Franchising Regulatory Board (LTRFB) Land Transportation Office (LTO) Civil Aeronautics Board (CAB) Air Transportation Office (ATO) Energy Regulatory Board (ERB) National Telecommunications

Commission (NTC)

systems, wire or wireless telephone and telegraph systems, radio and television broadcasting systems and similar public facilities Regulates water resources and utilities Regulates water transportation

National Water Resources Council (NWRC) Maritime Industry Authority (MARINA)

Public utilities are regulated pursuant to the police power of the state. When private property is used for a public interest, it ceases to be strictly private and thus becomes subject to regulation in order to promote the common good. (REPUBLIC VS MANILA ELECTRIC COMPANY)

Issuance of certificate of public convenience (and necessity) requires a HEARING. When granted, it may be revoked: o if the holder violates or contumaciously refuses to comply with any applicable rules

or regulations o holder is found out to be a MERE DUMMY o holder ceases operations/abandons the franchise. Requisites to be granted certificate of public convenience and necessity: 1. Filipino citizen of a corporation or entity 60% belonging to Filipino citizens; 2. sufficient financial capability to undertake the service 3. service: promotes public interest, necessity and convenience. PRIOR OPERATOR RULE 1ST Licensee is USUALLY protected in his investment and will not be exposed to a RUIONOUS type of competition. Hence, a certificate of public convenience will not be issued to a 2nd operator if the 1st operator is rendering sufficient, adequate and satisfactory service and is complying with all laws, rules and regulations. NON-APPLICABILITY: o Public interest would be better served by new operator (GUICO VS ESTATE OF BUAN) o Operator has failed, despite ample time and opportunity given to it by the commission. The protection given to prior operator refers only to operators of good standing. (RIZAL LIGHT AND ICE CO. INC. VS MUN. OF MORONG, RIZAL) o Prior operating rule cannot take precedence over the convenience of the public. (INTESTATE ESTATE OF TIONGSON VS PUBLIC SERVICE COMMISION) o Old operator has failed to make an offer to meet the increase in traffic (MANILA YELLOW TAXICAB CO INC VS CASTELO) o When the certificate of public convenience granted to the new operator is a MAIDEN CERTIFICATE, which does not overlap with the entire route of the old operator but only a short portion thereof as a convergence point. (MANDBUSCO INC VS FRANSISCO) o If the application of the rule will be conducive to MONOPOLY of service, and contrary to the principle that promotes healthy competition. (VILLA REY TRANSIT INC VS PANGASINAN trans co inc)

RUINOUS COMPETITION: because of the competition, income will be reduced that it will not give him an adequate return on his investment. FIXING OF RATE FACTORS IN DETERMINING THE JUST AND REASONABLE RATES TO BE CHARGED: o Rate of return judgement o Rate of base o Return itself / computed revenue to be earned by the public utitlity based on the rate of return and rate based ELEMENTS CONSIDERED IN RATE MAKING o Fair return on the value of property employed by the operator o Nature and extent or risk involved in the investment o Whether monopoly exists in this field o Expenses of operation including depreciation o Valuation of property used and useful to the public service concerned. EXCLUSION OF INCOME TAX AS EXPENSES Income tax should not be included in the computation of operating expenses of a public utility. o Operating Expenses those reasonably incurred in connection with business operations to yield revenue or income; contribute or are attributable to the production of income/revenue. They are a REQUISITE or NECESSARY in the OPERATION of a utility, that redounds to the service or benefit of customers. o Income Tax imposed on an individual or entity as a FORM OF EXCISE TAX or a tax on the privilege of earning income. Income tax payments of a public utility are not expenses which contribute toor are incurred in connection with the production of profit of a public utility. It must be borne by the taxpayer alone as they are payments made in exchange for benefits received by the

taxpayer from the State. (RP vs. MANILA ELECTRIC COMPANY) BOUNDARY SYSTEM Scheme by an owner/operator engaged in transporting passengers as a common carrier to PRIMARILY GOVERN the compensation of the driver: drivers daily earnings are remitted to the owner/operator LESS the excess of the boundary

Operator/owner driver relationship under the boundary system is EE-ER REL (VILLAMARIA JR VS CA) KABIT SYSTEM Arrangement whereby a person who has been granted a certificate of public convenience allows another person who owns a motor vehicle to operate under such franchise for a fee. Not outrightly penalized as a criminal offense, it is contrary to public policy and therefore VOID AND INEXISTENT (LITA ENTERPRISES VS IAC)

Where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other. (TEJA MARKETING VS IAC) APPROVAL OF SALE, ENCUMBRANCE OR LEASE OF PROPERTY To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights or any part thereof OR

Merge or consolidate its property, franchises, privileges or rights, or any part thereof, with those of any other public services. REQUIREMENTS: o Notice to the public o Hearing of the persons interested at a public hearing o Show that there are Just and reasonable grounds for Making the mortgage and encumbrance liabilities of more than 1 year maturity OR sale, alienation, lease, merger or consolidation to be approved It is not detrimental to the public interest o PROVIDED HOWEVER: that nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale, alienation, or lease b any public service of any of its property in the ordinary course of its business. (SEC 20.G PUBLIC SERVICE ACT)

WARSAW CONVENTION
May 16, 1950 concurred in by Philippine Senate February 9, 1951 enforced Objective: regulate in a uniform manner the conditions of international transportation by AIR in respect to the documents used for transportation and of the liability of the carrier. Carrier must deliver to the passenger a TICKET. o Absence, irregularity, loss of ticket: does NOT AFFECT the existence or validity of contract of transportation (subject to rules of convention) If carrier accepts a passenger without a passenger ticket: carrier may not avail itself of the provisions of the convention that limits or excludes it liability. the shipper/consignor to submit to it an AIRWAY BILL; Shipper/ AIRWAY BILL o Carrier has a right to require the shipper/consignor to SUBMIT it o Shipper/Consigner: right to require carrier to ACCEPT it. o Absence, irregularity, loss: not affect the existence or validity of contract of transportation. LIABILITY FOR DAMAGES (ART 16,WC) Carrier is liable for the DEATH or INJURIES of a passenger if the event that it: o took place in the aircraft o in the course of any of the operations of embarking or disembarking. Carrier is liable for LDD to the checked in baggage if the occurrence took place during transportation by air. o Transportation by air: baggage are in the charge of the carrier whether in the airport or on board the aircraft or in a ny place where the carrier is in charge of the said baggage or goods. Carrier is liable for DAMAGE occasioned by DELAY in the transportation by air of passengers, baggage or goods.

NON-LIABILITY

Carrier is NOT LIABLE if it PROVES that the carrier and its agents have taken all the necessary measures to AVOID THE DAMAGE or that it was IMPOSSIBLE for it to take such measures. FOR TRANSPORTATION OF GOODS AND BAGGAGE: Carrier is NOT LIABLE if it proves that the damage was caused by :an error in piloting, handling of the aircraft or in navigation in all other aspects , the carrier and is agents have taken all necessary measures to avoid the damage. (SEC 20 WARSAW CONVENTION)

LIMITATION OF LIABILITY TRANSPORTATION OF PASSENGERS: LIABILITY FOR EACH PASSENGER IS LIMITED TO: TRANSPORTATION OF GOODS OR BAGGAGE: LIABILITY OF THE CARRIER: OBJECTS WHICH PASSENGER TAKES CHARGE HIMSELF 250 franc per kg. UNLESS: consignor has made, at the time the package was handed to carrier, a SPECIAL DECLARATION of the value AND HAS PAID a supplementary sum. (carrier is only liable for an amount NOT EXCEEDING declared value) Limited to 5,000 francs 125,000 francs/equivalent value in the country BUT: by SPECIAL CONTRACT: carrier and passenger may agree to a HIGHER limit of liability.

Warsaw Convention should be deemed a limit of liability ONLY IN THOSE CASES where the cause of death or injury to person, or destruction to, or attended by any willful misconduct, bad faith, recklessness, or otherwise improper conduct on the PART OF ANY OFFICIAL OR EMPLOYEE for which the carrier is responsible, and there is otherwise no special or extraordinary form of resulting injury. (NNORTHWEST AIRLINES, INC VS. CA) Any stipulation fixing a lower limit of liability shall be NULL and VOID, but the nullity of such provision shall not involve the nullity of the whole contract. (SEC 23, WC) Contract of air carriage: a declaration by the passenger of a higher value is needed to recover a greater amount. An air carrier is not liable for the loss of baggage in the amount IN EXCESS OF THE LIMITS specified in the tariff which was filed with the proper authorities, such tariff being binding on the passenger regardless of the passengers lack of knowledge thereof or assent thereto. (BRITISH AIRWAYS VS CA)

RECEIPT OF THE PERSON ENTITLED to the delivery of the baggage/goods without complaint shall be prima facie evidence that the same has been delivered in GOOD CONDITION. o IN CASE OF DAMAGE: Complaint mst be made with the carrier 3 days 7 days 14 days o Requirements of Complaint: In writing upon the document Baggage goods Delay

Separate notice in writing

o Failure to make complaint: bar to take any action against carrier EXCEPT in case of FRAUD. REQUIREMENT TO GIVE NOTICE OF LOSS/INJRY TO THE GOODS: o INFORM CARRIER that cargo is damaged, and it is charging carrier with liability o Give opportunity to examine the nature and extent of the injury. WHERE TO FILE THE ACTION FOR DAMAGES: (option of plaintiff; must be a party to the WC) o Court of the domicile of carrier o Court of principal business place of carrier o Court at the place of destination (ART 28, WC) Prescription for action: o 2 years from the date of arrival at the destination OR o date on which the aircraft ought to have arrived o date on which the transportation stopped (ART 29, WC) Failure o file a claim with CC should not be a ground for the summary dismissal of the complaint where carrier may be held liable FOR THE BREACH OF OTHER PERTINENT LAWS. (LUNA VS CA) TRANSPORTATION DONE BY SUCCESSIVE CARRIERS: o EACH CARRIER shall be deemed to be a contracting party to the contract of transportation in so far as the contract deals with the part of the transportation performed under its supervision. o Passenger can only take action AGAINST THE CARRIER WHICH PERFORMED THE TRANSPORTATION during which the accident occurred EXCEPT: express agreement 1st carrier assumed liability FOR THE WHOLE JOURNEY. (ART 30 WC) o If performed by successive air carriers, it shall be considered as ONE UNDIVIDED TRANSPORTATION if so regarded by the parties as a SINGLE OPERATION even if written under a single contract or a series of contracts. (ART 1.3, WC) Ticket-issuing airline is the principal in a contract of carriage while the endorsee-airline is the agent. Obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that another airline haeed undertaken to carry the passengers to one of their destinations (CHINA AIRLINES VS CHIOK) In a contract of carriage, an airlines obligation is limited to transporting the passenger and the latters luggage safely to the agreed destination. o Airline does not breach contract with the passenger IF HE IS HELD IN CUSTODY BY IMMIGRATION OFFICIALS DURING A STOP OVER. o The power to admit an alien into a country is a soverign act which cannot be interfered with by any airline. (JAPAN AIRLINES VS ASUNCION) APPLICABILITY ALL INTERNATIONAL TRANSPORTATION OF PERSONS, BAGGAGE OR GOODS BY AIR AND FOR COMPENSATION.

International transportation: place of departure and destination are within the territories of 2 contracting parties, whether or not country is a contracting party to the convention. (ART 1, WC) WC: treaty commitment VOLUNTARY ASSUMED by the RP. International carriage: any carriage in which, according to the contract made by he parties, the place of departure and place of destination, whether or not there be a break in the carriage or transshipment are situated either: o Within the territories of 2 high contracting parties o Within the territory of a single high contracting party: if there is an agreed stopping place within a territory subject to eh sovereignty, suzerainty, mandate or authority of another power, even if the power is not a party of WC. Firm holding itself out to the general public (other than a pipeline, rail, motor or water carrier) To provide transportation of property For compensation, and In the ordinary ocurse of its business: o Assemble and consolidate, or provide for assembling and consolidating, shipments and to Perform or provide for break-bulk and distribution operations of the shipments o Assume responsibility for the transportation of goods from the place of receipt to the place of destination o Use any part of the transportation a carrier subject to the federal law pertaining to common carriers.

FREIGHT FORWARDER

LIMITATION OF FREIGHT FORWARDERS LIABILITY: o Damages arising from its OWN NEGLIGENCE, including: Negligence in choosing the carrier. HOWEVER: if FF CONTRACTS to deliver goods to their destination instead of MERELY ARRANGING for their transportation it is liable a sa common carrier for loss or damage to goods.