1|Page FOR THE SECOND EXAM IN TRANSPORTATION LAW: UP and SAN BEDA ( Based on the Lecture of Attorney Saracin)

Art. 349. A contract of transportation by land or waterways of any kind shall be considered commercial: 1. When it involves merchandise or any object of commerce. 2. When, no matter what its object may be, the carrier is a merchant or is customarily [habitually] engaged in transportation for the public. Requisites for a contract of transportation by land or water to be commercial : (1) transportation of merchandise is always commercial (2) transportation of person or news is commercial only when the CC is a merchant or is habitually engaged in transportation for the public * principal requirement : the CC is a merchant or is habitually engaged in transportation for the public; the object carried is of little importance A contract of air transportation may be regarded as commercial since it is analogous to land and water transportation. The reason for its non-inclusion in the Code of Commerce was that at the time of its promulgation, air transportation on a commercial basis was not yet known There is now no distinction between a transportation contract of a CC under the Civil Code and a transportation contract under the Code of Commerce The New Civil Code does not expressly repeal the provisions of the Code of Commerce on overland transportation; it makes such provisions suppletory to the provisions of the Civil Code on CCs. ARTICLE 350. The shipper as well as the carrier of merchandise or goods may mutually demand that a bill of lading be made, stating: 1. The name, surname and residence of the shipper. 2. The name, surname and residence of the carrier. 3. The name, surname and residence of the person to whom or to whose order the goods are to be sent or whether they are to be delivered to the bearer of said bill. 4. The description of the goods, with a statement of their kind, of their weight, and of the external marks or signs of the packages in which they are contained. 5. The cost of transportation. 6. The date on which shipment is made. 7. The place of delivery to the carrier. 8. The place and the time at which delivery to the consignee shall be made. 9. The indemnity to be paid by the carrier in case of delay, if there should be any agreement on this matter.

ARTICLE 351. In transportation made by railroads or other enterprises subject to regulation rate and time schedules, it shall be sufficient for the bills of lading or the declaration of shipment furnished by the shipper to refer, with respect to the cost, time and special conditions of the carriage, to the schedules and regulations the application of which he requests; and if the shipper does not determine the schedule, the carrier must apply the rate of those which appear to be the lowest, with the conditions inherent thereto, always including a statement or reference to in the bill of lading which he delivers to the shipper. Many of the items required in a bill of lading may be omitted with much advantage to commerce, which aims to have the greatest number of transactions in the last possible time especially in cases where there are tariffs or regulations issued by the carrier company. In this case, the circumstances relative to price, term and conditions of carriage may be omitted and simple reference be made to the tariff and regulations under which the transportation is to be made. (Art. 351) The form of the bill of lading is not material : if it contains an acknowledgment by the carrier of the receipt of goods for transportation, it is in legal effect, a bill of lading A ticket issued by a carrier to a passenger is not only a receipt for the fare paid but is the contract between the passenger and the carrier, of the passenger's right to ride in the CC's vehicle Classes of bills of lading : 1. negotiable B/L - where it is stated that the goods will be delivered to the bearer, or to the order of any person named in such document 2. non-negotiable B/L - where the goods are to be delivered to a specified person 3. clean B/L - does not indicate any defect in the goods 4. foul B/L - indicates that the goods covered by it are in bad condition 5. spent B/L - covers goods that have already been delivered by the CC without a surrender of a signed copy of the B/L; the subsequent delivery of the spent B/L cannot give to the buyer of it any actual control of the goods, or anything which can fairly be called delivery 6. through B/L - issued by the CC who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer, which B/L is honored by the subsequent interested carriers who do not issue their own ladings 7. on board B/L - states that the goods have been received on board the vessels which is to carry the goods 8. received for shipment B/L - states that the goods have been received for shipment with or w/o specifying the vessel by which the goods are to be shipped; issued when conditions are not normal and there is an insufficiency of shipping space

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9. custody B/L - issued by the CC to whom the goods have been delivered for shipment but the steamer indicated in the B/L which is to carry the goods has not yet reached the port where the goods are held for shipment 10. port B/L - issued by the CC to whom the goods have been delivered and the steamer indicated in the B/L by which the goods are to be shipped is already in the port where the goods are held for shipment ARTICLE 352. The bills of lading, or tickets in cases of transportation of passengers, may be diverse, some for persons and others for baggage; but all of them shall bear the name of the carrier, the date of shipment, the points of departure and arrival, the cost, and, with respect to the baggage, the number and weight of the packages, with such other manifestations which may be considered necessary for their easy identification. ARTICLE 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of lading, by the contents of which the disputes which may arise regarding their execution and performance shall be decided, no exceptions being admissible other than those of falsity and material error in the drafting. After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, unless in the same act the claim which the parties may wish to reserve be reduced to writing, with the exception of that provided for in Article 366. In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt producing the same effects as the return of the bill of lading. B/L constitutes the legal evidence of the contract of transportation --> all disputes between the parties regarding the execution and performance of the contract shall be decided by the contents of the B/L issued by the CC --> the law admits no exceptions other than falsity and material error in the drafting of the B/L. As a contract expressing the terms and conditions upon which the property is to be transported, it is to be regarded as merging all prior and contemporaneous agreements of the parties, and in the absence of fraud, concealment or mistake, its terms or legal import, when free from ambiguity cannot be explained nor added to by parol (Parol Evidence Rule) Bill of Lading The written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or to his order. Rules: 1. It is not indispensable for the creation of a contract of carriage. (Compania Maritima vs. Insurance Company of North America, 12 SCRA 213) 2. Ambiguity is construed against the carrier, the contract being one of adhesion. 3. The consignee, although the instrument is oftentimes drawn up only by the consignor and carrier, becomes bound by all the stipulations contained therein by making a claim for loss on the basis of said bill of lading. (Sea-Land Services Inc. vs. IAC) 4. The right of a party to recover for loss of shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier, springs from either a relation of agency between him and the shipper, or his status as stranger in whose favor some stipulation is made in said contract, and who becomes a party thereto when he demands fulfillment of that stipulation. (Art. 1311 (2), (Mendoza vs. PAL Inc.) 5. Acceptance of the bill of lading without dissent raises the presumption that all the terms therein where brought to the knowledge of the shipper and agreed to by him and, in the absence of fraud or mistake; he is estopped from thereafter denying that he assented to such terms. (Notes and Cases on the Law on Transportation and Public Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.261)

Kinds:
1.On board - issued when the goods have been actually placed aboard the ship with very reasonable expectation that the shipment is as good as on its way. 2.Received - one in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. 3.Negotiable - one in which it is stated that the goods referred to therein will be delivered to the bearer or to the order of any person named therein. 4.Non-negotiable - One in which it is stated that the goods referred to therein will be delivered to a specified person. 5.Clean One which does not indicate any defect in the goods. 6.Foul One which contains a notation thereon indicating that the goods covered by it are in bad condition. 7.Spent One which covers goods that already have been delivered by the carrier without a surrender of a signed copy of the bill. 8.Through One issued by the carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting

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the goods from the city of the seller to the city of the buyer, which bill of lading is honored by the second and other interested carriers who do not issue their own bills. 9.Custody One wherein the goods are already received by the carrier but the vessel indicated therein has not yet arrived in the port. 10. Port One which is issued by the carrier to whom the goods have been delivered, and the vessel indicated in the bill of lading by which the goods are to be shipped is already in the port where the goods are held for shipment. Functions: 1. Best evidence of the existence of the contract of carriage of cargo (Art. 353) 2. Document of title 3. Receipt of cargo 4. Contract to transport and deliver goods as stipulated 5. Symbol of the goods OBLIGATIONS OF THE CARRIER A. Duty to accept the goods GENERAL RULE: A common carrier cannot ordinarily refuse to carry a particular class of goods. EXCEPTION: For some sufficient reason the discrimination against the traffic in such goods is reasonable and necessary. (Fisher vs. Yangco Steamship Co. 31 Phil 1). Instances when the carrier may validly refuse to accept the goods include the ff: 1.) Goods sought to be transported are dangerous objects, or substances including dynamite and other explosives 2.) Goods are unfit for transportation 3.) Acceptance would result in overloading 4.) Contrabands or illegal goods 5.) Goods are injurious to health 6.) Goods will be exposed to untoward danger like flood, capture by enemies and the like 7.) Goods like livestock will be exposed to disease 8.) Strike 9.) Failure to tender goods on time. (Notes and Cases on the Law Stipulated in No stipulation on Contract/Bill of
Lading 1. Carrier is bound to fulfill the contract and is liable for any delay; no matter from what cause it may have arisen. 1. Within a reasonable time. 2. Carrier is bound to forward them in the 1st shipment of the same or similar goods which he may make to the point of delivery. (ART. 358 Code of Commerce)

Transportation and Public Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.68) In case of carriage by railway, the carrier is exempted from liability if carriage is insisted upon by the shipper, provided its objections are stated in the bill of lading. However, when a common carrier accepts cargo for shipment for valuable consideration, it takes the risk of delivering it in good condition as when it was loaded. (PAL vs. CA) B. Duty to deliver the goods Not only to transport the goods safely but to the person indicated in the bill of lading. The goods should be delivered to the consignee or any other person to whom the bill of lading was validly transferred or negotiated.

Time of delivery

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Effects of delay a. Merely suspends and generally does not terminate the contract of carriage b. Carrier remains duty bound to exercise extraordinary diligence c. Natural disaster shall not free the carrier from responsibility (Art.1740) d. If delay is without just cause, the contract limiting the common carriers liability cannot be availed of in case of loss or deterioration of the goods (Art.1747) RIGHT OF CONSIGNEE TO ABANDON GOODS Instances: 1. Partial non-delivery, where the goods are useless without the others (Art. 363); 2. Goods are rendered useless for sale or consumption for the purposes for which they are properly destined (Art. 365); and 3. In case of delay through the fault of the carrier (Art. 371). NOTICE OF DAMAGE (ART. 366) Requisites for applicability: 1. Domestic/inter-island/coastwise transportation 2. Land/water/air transportation 3. Carriage of goods 4. Goods shipped are damaged Rules: a. Patent damage: shipper must file a claim against the carrier immediately upon delivery (it may be oral or written) b. Latent damage: shipper should file a claim against the carrier within 24 hours from delivery. Note: These rules does not apply to misdelivery of goods. (Roldan vs. Lim Ponzo) Purpose of notice: To inform the carrier that the shipment has been damaged, and it is charged with liability therefore, and to give it an opportunity to make an investigation and fix responsibility while the matter is fresh. The filing of notice of claim is a condition precedent for recovery. Shorter period may be stipulated by the parties because it merely affects the shippers remedy and does not affect the liability of the carrier. (PHILAMGEN vs. Sweetlines, Inc.) Prescriptive Period Not provided by Article 366. Thus, in such absence, Civil Code rules on prescription apply. If despite the notice of claim, the carrier refuses to pay, action must be filed in court. 1. No bill of lading was issued: within 6 years 2. Bill of lading was issued: within 10 years. ARTICLE 366 COGSA Sec.3 (6) Applicability 1. 1. Internatio Domest nal/ ic/inter overseas/foreign (from foreign island/c country to Phils.) oastwis Note: subject to e the rule on transpo Paramount Clause rtation 2. 2. Land, Water/maritime water, transportation air 3. Carriage of transpo goods rtation 3. Carriag e of goods
Notice of damage
1. Condition precedent 2. 24-hour period for claiming latent damage 1. Not a condition precedent 2. 3-day period for claiming latent damage

Prescriptive period
None provided; Code applies. Civil One year from the date of delivery (delivered but damaged goods), or date when the vessel left port or from the date of delivery to the arrastre (nondelivery or loss).

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COMBINED CARRIER AGREEMENT (ART. 373)

GENERAL RULE: In case of a contract of transportation of several legs, each

carrier is responsible for its particular leg in the contract.

EXCEPTION: A combined carrier agreement where a carrier makes itself liable

assuming the obligations and acquiring as well the rights and causes of action of those which preceded it.