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Transportation Over Land ............................................................... 29

TABLE OF CONTENTS Time to Deliver ........................................................................... 29
Common Carriers .............................................................................. 3
Delay in Delivery ........................................................................ 30
Governing Laws ............................................................................ 3
Route and Deviation .................................................................... 30
Common Carriers .......................................................................... 3
Partial and Defective Delivery .................................................... 31
Liability of Common Carrier ......................................................... 5
Claim and Suit ............................................................................. 32
Transportation of Goods.................................................................... 6
Misdelivery and Non-delivery ..................................................... 33
Extraordinary Diligence ................................................................ 6
Multi Carriers .............................................................................. 34
Duration of Extraordinary Diligence ............................................. 7
Vessels/Persons in Maritime Commerce ......................................... 36
Loss deterioration and Destruction/Presumption of Negligence .... 9
Vessels ........................................................................................ 36
Defenses Exempting or Mitigating Liability ............................... 10
Ship-owners and Agents .............................................................. 37
Conditions to Avail Defenses ...................................................... 11
Captain/Master ............................................................................ 39
Stipulation Limiting Liability ...................................................... 12
Officers and Crew ....................................................................... 40
Transportation of Persons ................................................................ 15
Passengers ................................................................................... 40
Extraordinary Diligence .............................................................. 15
Damages and Accidents in Maritime Commerce ............................ 41
Duration of Responsibility .......................................................... 16
Averages ..................................................................................... 41
Presumption of Negligence ......................................................... 17
Arrival Under Duress .................................................................. 43
Non-exemption from Liability..................................................... 17
Collision/Allision ........................................................................ 43
Limited Liability and Defenses ................................................... 18
Shipwrecks .................................................................................. 44
Acts of Passengers and Others..................................................... 18
Special Laws in Transportation I ..................................................... 46
Recoverable Damages ..................................................................... 20
Carriage of Goods by Sea Act ..................................................... 46
Actual Damages .......................................................................... 20
Warsaw/Montreal Convention ..................................................... 49
Moral Damages ........................................................................... 22
Bill of rights of Air Passengers ....................................................... 54
Nominal Damages ....................................................................... 23
Joint DOTC-DTI Administrative Order ...................................... 54
Temperate Damages .................................................................... 24
Right to Information .................................................................... 54
Liquidated Damages .................................................................... 24
Right to Full Value: ..................................................................... 54
Exemplary Damages ................................................................... 24
Right to compensation ................................................................. 55

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Special Laws in Transportation II ................................................... 57

Salvage Law ................................................................................ 57
Ship Mortgage Decree ................................................................. 57
Foreign Ships Co-Loading Act .................................................... 57
Land Transportation Traffic Code ............................................... 58

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COMMON CARRIERS
The above article makes no distinction between one whose principal
Governing Laws business activity is the carrying of persons or goods or both, and one
What laws govern? who does such carrying only as an ancillary activity (in local idiom,
1. NCC as “a sideline”). Article 1732 also carefully avoids making any
2. Code of Commerce distinction between a person or enterprise offering transportation
3. Special Laws service on a regular or scheduled basis and one offering such service
on an occasional, episodic or unscheduled basis. Neither does Article
Common Carriers 1732 distinguish between a carrier offering its services to the “general
Article 1732. Common carriers are persons, corporations, firms or public,” i.e., the general community or population, and one who offers
associations engaged in the business of carrying or transporting services or solicits business only from a narrow segment of the general
passengers or goods or both, by land, water, or air, for compensation, population. We think that Article 1732 deliberately refrained from
offering their services to the public. making such distinctions.

Guzman vs. CA
Who is a common carrier?
The concept of “common carrier” under Article 1732 may be seen to
1. Those who are engaged in the business of carrying or transporting
coincide neatly with the notion of “public service,” under the Public
goods or passengers
Service Act which at least partially supplements the law on common
a. Whether as a principal or ancillary business
carriers set forth in the Civil Code. Under Section 13, paragraph (b) of
b. Whether on a regular/scheduled or occasional/unscheduled
the Public Service Act, “public service” includes: “x x x every person
basis.
that now or hereafter may own, operate, manage, or control in the
2. They offer their services to the public, whether for:
Philippines, for hire or compensation, with general or limited
a. The general population
clientele, whether permanent, occasional or accidental, and done or
b. Or a narrow segment of the general population.
general business purposes, any common carrier.
3. For compensation or fixed price or rate
4. Control of operation or cargo.
A certificate of public convenience is not a requisite for the incurring
of liability under the Civil Code provisions governing common
Take note: the code did not make a distinction of whether or not a
carriers.
person or entity is engaged in the service incidentally, or primarily.
• That liability arises the moment a person or firm acts as a common
• Included here are funeral vehicles, ambulances, etc. just as long
carrier, without regard to whether or not such carrier has also
as they provide transportation of goods or services.
complied with the requirements of the applicable regulatory
statute and implementing regulations and has been granted a
Fabre vs. CA certificate of public convenience or other franchise.
Common carriers are persons, corporations, firms or • The business of a common carrier impinges directly and
associations engaged in the business of carrying or transporting intimately upon the safety and wellbeing and property of those
passengers or goods or both, by land, water, or air for members of the general community who happen to deal with such
compensation, offering their services to the public.

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carrier. The law imposes duties and liabilities upon common
carriers for the safety and protection of those who utilize their
services and the law cannot allow a common carrier to render such
duties and liabilities merely facultative by simply failing to obtain
the necessary permits and authorizations.
Bascos vs. CA
Article 1732 of the Civil Code defines a common carrier as “(a)
person, corporation or firm, or association 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.” The test
to determine a common carrier is “whether the given undertaking is a
part of the business engaged in by the carrier which he has held out to
the general public as his occupation rather than the quantity or extent
of the business transacted.” In this case, petitioner herself has made
the admission that she was in the trucking business, offering her trucks
to those with cargo to move. Judicial admissions are conclusive and
no evidence is required to prove the same.
It also does not matter of the carrier is offering the service on an
occasional basis, or regular.
FGU insurance vs. GPS
GPS, being an exclusive contractor and hauler of Concepcion
Industries, Inc., rendering or offering its services to no other individual
or entity, cannot be considered a common carrier. 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 hire or compensation, offering their services to
the public, whether to the public in general or to a limited clientele in
particular, but never on an exclusive basis. The true test of a common
carrier is the carriage of passengers or goods, providing space for those
who opt to avail themselves of its transportation service for a fee.
Given accepted standards, GPS scarcely falls within the term
“common carrier.
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First Phil. Industrial vs. CA
The test for determining whether a party is a common carrier of goods
is:
1. He must be engaged in the business of carrying goods for others
as a public employment, and must hold himself out as ready to
engage in the transportation of goods for person generally as a
business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his business
is confined
3. He must undertake to carry by the method by which his business
is conducted and over his established roads; and
4. The transportation must be for hire.
The definition of “common carriers” in the Civil Code makes no
distinction as to the means of transporting, as long as it is by land,
water or air. It does not provide that the transportation of the
passengers or goods should be by motor vehicle. In fact, in the United
States, oil pipe line operators are considered common carriers.
Schmitz vs Transport Venture
The distinction between a “common or public carrier” and a “private
or special carrier” lies in the character of the business, such that if the
undertaking is a single transaction, not a part of the general business
or occupation, although involving the carriage of goods for a fee, the
person or corporation offering such service is a private carrier.
So something one is a private or special carrier when the transportation
is:
1. A single transaction
2. Not part of the general business or occupation of the person of
corporation
3. It is just a single transaction.
GPS vs. Sarmiento
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There was a contract between a hauler and a manufacturer. The trucker
only had that one manufacturer as a client. In this case the SC said that
the trucker is NOT a common carrier. This is since it does not offer its
services to the public.
Liability of Common Carrier
Fabre vs. CA
As common carriers, the Fabres were bound to exercise “extraordinary
diligence” for the safe transportation of the passengers to their
destination. This duty of care is not excused by proof that they
exercised the diligence of a good father of the family in the selection
and supervision of their employee.
Guzman vs. CA
Article 1734 establishes the general rule that common carriers are
responsible for the loss, destruction or deterioration of the goods
which they carry, “unless the same is due to any of the following
causes only:
1. Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
2. Act of the public enemy in war, whether international or civil;
3. Act or omission of the shipper or owner of the goods;
4. The character of the goods or defects in the packing or in the
containers; and
5. Order or act of competent public authority.”
It is important to point out that the above list of causes of loss,
destruction or deterioration which exempt the common carrier for
responsibility therefor, is a closed list. Causes falling outside the
foregoing list, even if they appear to constitute a species of force
majeure, fall within the scope of Article 1735. Thus a common carrier
is not exempted from liability because of Hijacking. It is not part of
the 5.
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Furthermore by express provision of law a common carrier is liable
even for the acts of strangers such as thieves and robbers. EXCEPT
when they acted grave or irresistible threat.
Benedicto vs. IAC
The prevailing doctrine on common carriers makes the registered
owner liable for consequences flowing from the operations of the
carrier, even though the specific vehicle involved may already have
been transferred to another person. This doctrine rests upon the
principle that in dealing with vehicles registered under the Public
Service Law, the public has the right to assume that the registered
owner is the actual or lawful owner thereof.
A common carrier is required both from the nature of the business and
for reasons of Public policy, has to exercise extraordinary diligence.
If there is damage to the goods, the CC is AUTOMATICALLY
presumed to have been at fault or negligent, and this may only be
overcome by showing that the CC acted with extraordinary diligence.
Equitable vs. Suyon
The registered owner of the vehicle is the one that is liable for deaths
and injuries that are caused by the vehicle. So it does not even matter
that the vehicle was being used by an operator. This operator is only
an agent of the owner, and thus the owner is the one that is principally
liable. It also does not matter if the registered owner of the vehicle
does not use it for public service.
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TRANSPORTATION OF GOODS
There are GENERALLY three persons that are engaged in the
transportation of goods. These are the:
1. Shipper
2. Common Carrier
3. Consignee
Consignee issues a Letter of credit in favor of the Shipper, the
common carrier on the other hand issues a bill of lading in favor of the
shipper.
The purpose of the LOC is to ensure the shipper that he will get paid.
The BOL on the other hand is what the shipper presents so that he may
claim on the letter of credit. The common carrier also gives a BOL in
favor of the Consignee to acknowledge that the goods have arrived in
a good and merchantable state.
In the relationship above there are where they may be parties that
“intercept” the goods. In the case of the shipper there may be a freight
forwarder which deliver the goods from the shipper to the common
carrier.
There is also an arrastre operator which deliver the goods from the
common carrier to the consignee. In this scenario the goods are
deposited in the warehouse of the arrester operator.
When the goods are in the warehouse, they may be picked up by the
customs broker or the client himself.
In the scenarios above, the freight forwarder, the arrester operator, and
the customs brokers are all considered as Common Carriers. Since
they are considered as common carriers then they are required to
exercise extraordinary diligence as the standard of diligence.
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Extraordinary Diligence
Article 1733. Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of
each case.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set
forth in articles 1755 and 1756.
What are does this mean?
1. To transport with the greatest skill and foresight.
2. To exercise the utmost vigilance of a very cautious person,
according to all circumstances.
• In this case “all circumstances” mean: Circumstances that are
relevant to their business.
Eastern Shipping Lines vs. CA
Heavy seas and rains referred to in the master’s report were not causo
fortuito, but normal occurrences that an ocean going vessel would
encounter as a matter of routine. They are not unforeseen nor
unavoidable. The fact that water was able to enter the hatch of the
vessel shows that the ship and its crew did not act with extra-ordinary
vigilance over the goods. As a matter of fact, it is an indication that
the crew that foresight did not attend the closing of the ships hatch.
Since the carrier failed to establish that there was a FE, the
presumption by law of fault or negligence on the part of the carrier
applies – and the carrier must present evidence that it has observed
extra-ordinary diligence.
Philamgen vs. PKS Shipping Company
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Addressing now the issue of whether or not PKS Shipping has
exercised the proper diligence demanded of common carriers, Article
1733 of the Civil Code requires common carriers to observe
extraordinary diligence in the vigilance over the goods they carry.
In case of loss, destruction or deterioration of goods, common carriers
are presumed to have been at fault or to have acted negligently, and
the burden of proving otherwise rests on them.
The appellate court ruled, gathered from the testimonies and sworn
marine protests of the respective vessel masters of Limar I and MT
Iron Eagle, that there was no way by which the barges or the
tugboats crew could have prevented the sinking of Limar I.
The vessel was suddenly tossed by waves of extraordinary height of
six (6) to eight (8) feet and buffeted by strong winds of 1.5 knots
resulting in the entry of water into the barges hatches. The official
Certificate of Inspection of the barge issued by the Philippine
Coastguard and the Coastwise Load Line Certificate would attest to
the seaworthiness of Limar I and should strengthen the factual
findings of the appellate court.
Sealoader vs. Grand Cement Manufacturing Corporation
In this case there was a storm that was about to hit Cebu, and Sealoader
owned a barge that was moored in a harbor. In this case the typhoon
hit and the barge that was owned by Sealoader caused damage to the
port. Sealoader was saying that the damage caused was due to a FE,
thus it should not be liable. It also added the employees of GCMC
were also contributorily negligent since they did not cut the mooring
line of the ship.
The SC said that Sealoader should be the one that is liable. This is
since they failed to exercise extraordinary-diligence. This was since
the barge had no radio, they did not evacuate to safety, and they did
not cast the barge away from the wharf.
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To overcome the presumption of negligence, the common carrier,
must establish by adequate proof that it exercised extraordinary-
diligence over the goods – it must do more than show that some other
party could be responsible for the damage.
What does extraordinary liability mean?
• This means that the common carrier is bound to transport the
goods or passengers “as far as human care and foresight can
provide, using the utmost diligence of a very cautious person, with
due regard to all circumstances”.
• It requires common carriers to render service with the greatest
skill and foresight and to use all reasonable means to ascertain the
nature and characteristics of goods tendered for shipment, and to
exercise due care in the handling and stowage, including such
methods as their nature requires.
Duration of Extraordinary Diligence
Article 1736. The extraordinary responsibility of the common carrier
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 or constructively, by the carrier to the
consignee, or to the person who has a right to receive them, without
prejudice to the provisions of article 1738.
Article 1737. The common carrier's duty to observe extraordinary
diligence over the goods remains in full force and effect even when
they are temporarily unloaded or stored in transit, unless the shipper
or owner has made use of the right of stoppage in transitu.
Article 1738. The extraordinary liability of the common carrier
continues to be operative even during the time the goods are stored in
a warehouse of the carrier at the place of destination, until the
consignee has been advised of the arrival of the goods and has had
reasonable opportunity thereafter to remove them or otherwise dispose
of them.
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Duration:
1. From the tome goods are unconditionally placed in possession of
and received by a common carrier for transport – until actual or
constructive delivery to the consignee or a person who is
authorized to receive it.
2. Even when the gods are temporarily unloaded or stored in transit.
UNLESS the shipper uses the right of stoppage in transit.
3. Even during time of storage in a warehouse of a common carrier
at place of destination, until the consignee is advised of the arrival
of the goods and has had the opportunity to remove or dispose of
them.
Delsan Transport Lines vs. American Home Association
The extraordinary responsibility of a common carrier lasts from the
time the goods are:
1. Unconditionally placed in the possession of, and received by the
carrier for transportation,
2. Until the same are delivered actually or constructively delivered
by the carrier to the:
a. Consignee,
b. or to a person who has a right to receive them.
Suplicio Lines vs. First Lepanto
Q: Is a CC liable for the damage that is done to the packaging of the
goods even if the items that are inside the packaging do NOT sustain
any damage?
A: YES. Because of the damage to the packaging the box was not sent
to Singapore – this resulted to damage on the part of the client, thus
the CC should be held liable.
When the shipment suffered damages as it was being
unloaded, petitioner carrier is presumed to have been negligent in the
handling of the damaged cargo.
The court also added that the fact that the crate fell and that
there was damage that was sustained, this means that the common
carrier did not exercise extraordinary diligence.
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Phil First Insurance vs. Wallem Shipping
There was a shipment of chemicals, and when they inspected the bags
there was damage to a number of them. In this case it is undisputed
that it was the fault of the arrastre operator.
Q: If damage was done due to the fault of the arrastre operator, may
the shipper still be held liable?
A: YES. Cargoes, while being unloaded generally remain under the
custody of the carrier. In this case the damage or losses were sustained
during the discharge of the shipment, while under the supervision of
the carrier.
The duty of care over the cargo is non-delegable, and the
carrier is accordingly responsible for the acts of the master, crew, and
stevedore and his agents. There is also an implied obligation that the
cargo will be unloaded with sound machinery and competent persons.
The fact that the consignee is required to furnish persons to assist in
unloading a shipment may not relive the carrier of its duty as to the
care that should be exercised in the unloading.
Note: The SC said the arrastre operator and the shipper are not always
solidarity liable. One important fact why the shipper was held liable
was since the stevedore was under the control and supervision of the
shipper.
Sarkies Tours vs. CA
Petitioner’s receipt of Fatima’s personal luggage having been thus
established, it must now be determined if, as a common carrier, it is
responsible for their loss. Under the Civil Code, “common carriers,
from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the
goods transported by them,” and this liability:
GR: “lasts from the time the goods are:
1. Unconditionally placed in the possession of, and
2. Received by the carrier for transportation
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3. Until the same are delivered, actually or constructively, by the
carrier to the person who has a right to receive them,”
EX: UNLESS the loss is due to any of the excepted causes under
Article 1734 thereof.
Loss deterioration and Destruction/Presumption of Negligence
Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3,
4, and 5 of the preceding article, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed
extraordinary diligence as required in article 1733.
GR: If there is loss or damage the CC is presumed to be negligent.
BUT:
1. This is not a conclusive presumption, it is a disputable
presumption
2. The presumption may be overcome be contrary defenses.
Note: the law of the country of destination shall govern the liability
of the common carrier for loss, destruction or deterioration of goods.
• So if the goods are being shipped to the Philippines, then our laws
will apply when it comes to the liability of the CC for the loss,
destruction or deterioration of goods. The same applies if the
goods are form here but to the US, the laws of the US will apply.
Delsan Transport Lines vs. American Home Association
The mere proof of delivery of goods in good order to the carrier, and
their arrival in the place of destination in bad order make a prima facie
case against the carrier, so that if no explanation is given as to how the
injury occurred, the carrier must be held responsible.
It is incumbent on the carrier to prove that the loss was due to accident
or some other circumstance inconsistent with its liability.
In this case the cargo was still in the custody of Delsan because the
discharging was not yet finished when the backflow occurred. Since
TANTOCO
the oil was not yet done discharging there is no reason to imply that
there was actual delivery of the cargo to the consignee.
FGU Insurance vs. CA
Caso fortuito or force majeure, are extraordinary events:
1. Not foreseeable or avoidable,
2. Events that could not be foreseen,
3. Or which though foreseen, were inevitable.
It is therefore not enough that the event should not have been foreseen
or anticipated, as is commonly believed but it must be one impossible
to foresee or to avoid.
In this case, the calamity which caused the loss of the cargoes was not
unforeseen nor was it unavoidable. In fact, the other vessels in the port
of San Jose, Antique, managed to transfer to another place, a
circumstance which prompted SMCs District Sales Supervisor to
request that the D/B Lucio be likewise transferred, but to no avail.
The D/B Lucio had no engine and could not maneuver by itself. Even
if ANCOs representatives wanted to transfer it, they no longer had any
means to do so as the tugboat M/T ANCO had already departed,
leaving the barge to its own devices. The captain of the tugboat should
have had the foresight not to leave the barge alone considering the
pending storm.
While the loss of the cargoes was admittedly caused by the
typhoon Sisang, a natural disaster, ANCO could not escape liability to
respondent SMC. The records clearly show the failure of petitioner’s
representatives to exercise the extraordinary degree of diligence
mandated by law. To be exempted from responsibility, the natural
disaster should have been the proximate and only cause of the loss.
There must have been no contributory negligence on the part of the
common carrier.
DSR-Sentaor Lines vs. Federal Phoneix Assurance Co.
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When the goods that are to be shipped either are lost or arrive in a
damaged condition, a presumption arises against the carrier for its
failure to observe that diligence, and there need not be an express
finding of negligence to hold it liable.
In this case the ship sank due to a fire. The SC said that even if fire is
to be considered as a natural disaster, to exempt a carrier from liability
the natural disaster must be the proximate and only cause, and that the
carrier has exercised due diligence to prevent or minimize the loss
before, during and after the disaster.
Sir: there was a case where the control of the ship was in the control
of a harbor pilot and the harbor pilot made a mistake and ran the ship
aground. The SC said that the Common Carrier is not liable for the
damages that were caused. The reason behind this is that the Common
carrier was no longer in control of the ship, it was the harbor pilot –
which was given assigned to them by the port authority.
Defenses Exempting or Mitigating Liability
Article 1734. Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless the same is due to
any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
(5) Order or act of competent public authority.
Note: when it comes to storm in #1 it really has to be a bagyo, as in
pagasa certified – i.e. it conforms to their requirements as to what a
storm is. (Central Shipping)
Note: the grounds that are found here are exclusive.
TANTOCO
If you want to use #1 as a defense you must prove that the cause of the
loss or damage is the proximate and ONLY cause of the loss or
damage.
• You must also prove that there was an exercise of diligence on the
part of the common carrier.
• When you say only, there must have been no fault on the part of
the common carrier.
The character of the goods or defects in the packing or in the
containers
• In this case the consignee is obligated to disclose the nature of the
goods.
• If omission of the owner of the goods is the proximate cause of
the loss, this exempts common carrier.
o But in this case the Common Carrier should not be
contributorily negligent. If the Common Carrier is CN, then it
will only mitigate the liability of the shipper.
Q: What does Article 1734 provide?
A: These are the instances where the presumption of negligence when
there is loss is NOT applicable. Thus there is a need to prove that the
carrier was at fault or was negligent – in essence it exempts a CC from
liability for loss or damage.
In all other cases that are not provided for in this article the
CC is presumed to have been at fault, or to have acted negligently,
UNLESS they can prove that they have observed extraordinary
diligence.
Q: Is fire covered by this article?
A: NO. fire is not one of those that is enumerated by the article. To
escape liability from damage or loss caused by fire the Common
Carrier has to show that extraordinary diligence was present.
Even if fire may be considered as a natural disaster – it has to
be the proximate and ONLY cause of the loss AND the carrier has
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exercised due diligence to prevent or minimize the loss, before,
during, or after the occurrence of the disaster.
Conditions to Avail Defenses
Article 1739. In order that the common carrier may be exempted from
responsibility, the natural disaster must have been the proximate and
only cause of the loss. However, the common carrier must exercise
due diligence to prevent or minimize loss before, during and after the
occurrence of flood, storm or other natural disaster in order that the
common carrier may be exempted from liability for the loss,
destruction, or deterioration of the goods. The same duty is incumbent
upon the common carrier in case of an act of the public enemy referred
to in article 1734, No. 2.
Article 1740. If the common carrier negligently incurs in delay in
transporting the goods, a natural disaster shall not free such carrier
from responsibility.
Article 1741. If the shipper or owner merely contributed to the loss,
destruction or deterioration of the goods, the proximate cause thereof
being the negligence of the common carrier, the latter shall be liable
in damages, which however, shall be equitably reduced.
Article 1742. Even if the loss, destruction, or deterioration of the
goods should be caused by the character of the goods, or the faulty
nature of the packing or of the containers, the common carrier must
exercise due diligence to forestall or lessen the loss.
Article 1743. If through the order of public authority the goods are
seized or destroyed, the common carrier is not responsible, provided
said public authority had power to issue the order.
Central Shipping vs. Insurance Company of North America
GR: A common carrier is presumed to be at fault or negligent. It shall
be liable for the loss, destruction or deterioration of its cargo.
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EX: unless it can prove that the sole and proximate cause of such event
is one of the causes enumerated in Article 1734 of the Civil Code, or
that it exercised extraordinary diligence to prevent or minimize the
loss.
In the present case, the weather condition encountered by petitioner’s
vessel was not a storm or a natural disaster comprehended in the law.
Given the known weather condition prevailing during the voyage, the
manner of stowage employed by the carrier was insufficient to secure
the cargo from the rolling action of the sea. The carrier took a
calculated risk in improperly securing the cargo. Having lost that risk,
it cannot now disclaim any liability for the loss.
In this case the reason that the ship sank was since the crew did not
stow the logs, which they were carrying as cargo, properly. As a result
they were rolling around and damaged the ship.
Sabena Belgian vs. CA
An airline lost the bag of one of its passengers not once but twice, and
after the second time it lost it for good. In this case the passenger said
that the value of her baggage at $4,000. But during check in she did
not declare it as such. The airline said that the SOP is that only $20
per kilo is allowed under the rules and by contract.
The SC said that the airline may be correct. But in this case the SC
said that there was gross negligence, which is equivalent to bad faith,
and since there is bad faith the common carrier is liable for all damages
which can be reasonably attributed, although unforeseen, to the non-
performance of the obligation, including moral and exemplary
damages.
Furthermore the Warsaw convention which specifies the limit, also
says that a carrier cannot use the limitation of liability clauses if the
damage is caused by the willful misconduct of the carrier.
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Cruz vs. Sun Holiday Inc. Article 1745. Any of the following or similar stipulations shall be
When a passenger dies or is injured in the discharge of a contract of considered unreasonable, unjust and contrary to public policy:
carriage, it is presumed that the common carrier is at fault or negligent. (1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction,
To free a common carrier from any liability, the FE must have been
or deterioration of the goods;
the proximate and ONLY cause of the loss – and it should have
exercised due diligence to prevent or minimize the loss before, during, (3) That the common carrier need not observe any diligence in the
and after the occurrence of the fortuitous event. custody of the goods;
(4) That the common carrier shall exercise a degree of diligence less
DEFENSES TO EXEMPT OR CONDITIONS TO AVAIL OF than that of a good father of a family, or of a man of ordinary prudence
MITIGATE LIABILITY THE DEFENSES in the vigilance over the movables transported;
Flood, storm, earthquake, 1. Proximate and only cause (5) That the common carrier shall not be responsible for the acts or
lightning, or other natural 2. There was an exercise of
omission of his or its employees;
disaster or calamity. diligence to prevent or
minimize loss (6) That the common carrier's liability for acts committed by thieves,
Act of the public enemy in war, Same as above or of robbers who do not act with grave or irresistible threat, violence
whether international or civil or force, is dispensed with or diminished;
Act or omission of the shipper or 1. If PC, exempting (7) That the common carrier is not responsible for the loss, destruction,
owner of the goods 2. If CN, mitigating
or deterioration of goods on account of the defective condition of the
The character of the goods or 1. Exercise of due diligence to
car, vehicle, ship, airplane or other equipment used in the contract of
defects in the packing or in the forestall or prevent loss
containers carriage.
Order or act of competent public 1. The PA must have the
authority power to issue the order. Article 1746. An agreement limiting the common carrier's liability
may be annulled by the shipper or owner if the common carrier refused
Stipulation Limiting Liability to carry the goods unless the former agreed to such stipulation.
Article 1744. A stipulation between the common carrier and the
shipper or owner limiting the liability of the former for the loss, Article 1747. If the common carrier, without just cause, delays the
destruction, or deterioration of the goods to a degree less than transportation of the goods or changes the stipulated or usual route,
extraordinary diligence shall be valid, provided it be: the contract limiting the common carrier's liability cannot be availed
(1) In writing, signed by the shipper or owner; of in case of the loss, destruction, or deterioration of the goods.

(2) Supported by a valuable consideration other than the service Article 1748. An agreement limiting the common carrier's liability for
rendered by the common carrier; and delay on account of strikes or riots is valid.
(3) Reasonable, just and not contrary to public policy.

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Article 1749. A stipulation that the common carrier's liability is
limited to the value of the goods appearing in the bill of lading, unless
the shipper or owner declares a greater value, is binding.
Article 1750. A contract fixing the sum that may be recovered. by the
owner or shipper for the loss, destruction, or deterioration of the goods
is valid, if it is reasonable and just under the circumstances, and has
been fairly and freely agreed upon.
Article 1751. The fact that the common carrier has no competitor
along the line or route, or a part thereof, to which the contract refers
shall be taken into consideration on the question of whether or not a
stipulation limiting the common carrier's liability is reasonable, just
and in consonance with public policy.
Article 1752. Even when there is an agreement limiting the liability
of the common carrier in the vigilance over the goods, the common
carrier is disputably presumed to have been negligent in case of their
loss, destruction or deterioration.
Requisites for Stipulations Limiting Liability
1. In writing
2. With valuable consideration other than the services of the
common carrier
3. Reasonable, just, and not contrary to public policy
A stipulation is void when it is:
1. Unreasonable
2. Unjust
3. Contrary to public policy
A stipulation is valid when:
1. Limited to value of goods which appear on the bill of lading
2. Fixed sim that is reasonable, just, and agreed upon
3. Delay due to strike or riot.
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Factors that need to be considered:
1. Refusal to carry goods
2. Delay or deviation
3. Lack or presence of competition
PAL vs. CA
PAL lost on of the bags of its passengers, and it was never found. PAL
was saying that according to a convention only $20 per kilo is allowed.
The SC said that this is not allowed this is since the liability of a
common carrier for the loss, destruction or deterioration of goods
transported from a foreign counter to the PH is governed by the Civil
Code, and if it is not covered by the Civil Code, then the appropriate
rules in the code of commerce and special laws will apply.
In this case the respondent was able to prove that PAL was negligent
with his luggage, thus the court awarded him more than the $20 limit.
Trans-Asia Shipping Lines vs. CA
In this case there was delay since the boat had to return to port due to
engine failure. Furthermore, the reason that they had to return to port
was the fault of the ship. This is since they went on the voyage with
one working motor. The Civil Code does not find application in the
situation where there is delay in the performance of the obligation,
AFTER the voyage has begun – this is covered by Article 698 of the
code of commerce.
The code states that if a voyage that has already begun should be
interrupted, the passengers shall be obliged to:
1. Pay the fare in proportion to the distance covered, without right to
recover for losses and damages if the interruption is due to a FE
a. BUT with a right to indemnity if the interruption should have
been caused by the captain.
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If the interruption should be caused by the disability of the vessel and

a passenger should agree to wait the repairs:
1. He may not be required to pay any increased price of passage,
2. But his living expenses during the stay shall be for his own
account.

Maersk Line vs. CA

In this case there was a delay in the delivery of medicine capsules to
the respondent. Maersk was saying that it is not liable since there is a
clause in the bill of lading that it will not be liable for losses due to
delays. The SC said that this still should have been done within a
reasonable time. What made matters worse here for Maersk was that
it was though its negligence that the goods were delayed.

When a Common Carrier undertakes to convey goods, the law implies

a contract that they shall be delivered at destination within a
reasonable time, in the absence, of any agreement as to the time of
delivery. But where a carrier has made an express contract to transport
and deliver property within a specified time, it is bound to fulfill its
contract and is liable for any delay, no matter from what cause it may
have arisen.

Takeaway: Even if there is a clause in the BOL that you are not liable
for loss due to delay, you may be held liable if you do not deliver the
goods within a reasonable time.

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TRANSPORTATION OF PERSONS
Extraordinary Diligence
Article 1733. Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of
each case.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set
forth in articles 1755 and 1756.
Article 1755. A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the
circumstances.
There is a higher standard when it comes to carriage of persons due to
the fact that life is more valuable than goods.
Carriage of Persons Carriage of Goods
As far as human care and Greatest skill and utmost
foresight can provide. foresight.
Using the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
What is extraordinary Diligence?
1. To carry passengers safely as far as human care and foresight
can provide
2. Using the utmost diligence of a very cautious person
3. With due regard for ALL the circumstances
• What is reasonably anticipated by the common carrier in the
exercise of its functions as a common carrier.
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o This is why there is the provision that there is the
provision that the CC will not be liable for FE, and also
the provision that is in the code when it comes to the CC
exercising Extraordinary Diligence.
Are common carriers insurers of Absolute Safety?
• NO! The common carrier is not required to exercise all the care,
skill or diligence the human mind can conceive nor free the
passenger from all possible risks.
Who is a passenger?
• A passenger is one who travels in a public conveyance by virtue
of an express or implied contract with the common carrier, paying
fare or what is equivalent thereof.
When there is a breach of contract of carriage, all that the passenger
has to do is prove the fact that there was injury, and a presumption will
arise that the CC was negligent. It will not be up to the CC to prove
that he exercised extraordinary diligence.
Calalas vs. CA
In this case a person ride a jeep, in order to make room for someone
who was about to ride the jeep, she went down. Upon going down she
gets hit from behind by a truck. The jeepney driver was saying that he
should not be held liable since it was the fault of the truck.
It is immaterial that the proximate cause of the collision between the
jeepney and the truck was the negligence of the truck driver. The
doctrine of proximate cause is applicable only in actions for quasi-
delict, not in actions involving breach of contract. The doctrine is a
device for imputing liability to a person where there is no relation
between him and another party. In such a case, the obligation is created
by law itself. But where there is a preexisting contractual relation
between the parties, it is the parties themselves who create the
obligation, and the function of the law is merely to regulate the relation
thus created.
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In this case the jeepney driver did not exercise extraordinary diligence.
This is since he was violating ordinances and laws. First, he parked
askew, he overloaded his jeep, and the passenger who got injured was
sitting on a wooden stool.
Sir: A common carrier does not guarantee complete and total safety
of the passengers since there are things that a common carrier cannot
guard against. These are things like lightning.
Japan Airlines vs. CA
In this case the respondents were the passengers of JAL, they were on
their way home to Manila, then their flight got cancelled because Mt.
Pinatubo erupted. But the SC still held them liable for nominal
damages since they did not place the passengers on the first flight out.
Failure on the part of the common carrier to live up to the exacting
standards of care and diligence renders it liable for any damages that
may be sustained by its passengers. However, this is not to say that
common carriers are absolutely responsible for all injuries or damages
even if the same were caused by a fortuitous event. To rule otherwise
would render the defense of “force majeure,” as an exception from any
liability, illusory and ineffective.
In light of these circumstances, we held that if the fortuitous event was
accompanied by neglect and malfeasance by the carrier’s employees,
an action for damages against the carrier is permissible. In this case
this was not present, but the SC still held JAL liable for nominal
damages since the fact that the delay was caused by an FE does not
excuse JAL from its obligation to make the necessary arrangements to
transport private respondents on its first available flight to Manila.
After all, it had a contract to transport private respondents from the
United States to Manila as their final destination.
Duration of Responsibility
When is a contract of carriage commenced (2 Views):
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1. Liberal View
• When a person offers to be transported, placing himself in the
care and control of the common carrier who accepts him as
such passenger.
2. Strict View
• There is actual boarding or placing of a part of the passenger’s
body in a vehicle.
A contract of carriage does not end upon the alighting of a vehicle;
you have to allow the passenger a reasonable time to exit the premises
of the common carrier.
Note: A common carrier is also liable even BEFORE the voyage
commences as long as the passenger is in the premises of the Common
Carrier – this is the liberal view where a contract of carriage is
commenced as soon as the passenger places himself under the care and
control of the common carrier who accepts such passenger.
Termination of a Contract of Carriage
• When the passenger alights from the vehicle at the place of
destination and has reasonable opportunity to leave the common
carrier’s premises.
Aboitiz Shipping vs. CA
The rule is that the relation of carrier and passenger continues until the
passenger has been landed at the port of destination and has left
the vessel owner’s dock or premises. Once created, the relationship
will not ordinarily terminate until the passenger has:
1. Reached his destination,
2. Safely alighted from the carrier’s conveyance or had a reasonable
opportunity to leave the carrier’s premises.
3. All persons who remain on the premises a reasonable time after
leaving the conveyance are to be deemed passengers.
• And what is a reasonable time or a reasonable delay is to be
determined from all the circumstances, and includes a
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reasonable time to see after his baggage and prepare for his
departure.
The carrier passenger relationship is not terminated merely by the fact
that the person transported has been carried to his destination if, for
example, such person remains in the carrier’s premises to claim his
baggage
The primary factor to be considered is the existence of a reasonable
cause as will justify the presence of the victim on or near the
petitioner’s vessel. We believe there exists such a justifiable cause.
Presumption of Negligence
Article 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
If there is death of injury to a passenger, a disputable presumption
arises that there was negligence on the part of the CC.
• This is disputable and may be overcome by proof of extraordinary
diligence.
Pestano vs. Sumayang
There was a vehicular collision that was caused by Pestaño’s
negligence when he attempted to overtake the motorcycle. As a
professional driver operating a public transport bus, he should have
anticipated that overtaking at a junction was a perilous maneuver and
should thus have exercised extreme caution
Allowing Pestaño to ply his route with a defective speedometer
showed laxity on the part of Metro Cebu in the operation of its
business and in the supervision of its employees. The negligence
alluded to here is in its supervision over its driver, not in that which
directly caused the accident. The fact that Pestaño was able to use a
bus with a faulty speedometer shows that Metro Cebu was remiss in
the supervision of its employees and in the proper care of its vehicles.
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It had thus failed to conduct its business with the diligence required
by law.
Non-exemption from Liability
Article 1759. Common carriers are liable for the death of or injuries
to passengers through the negligence or wilful acts of the former's
employees, although such employees may have acted beyond the
scope of their authority or in violation of the orders of the common
carriers.
This liability of the common carriers does not cease upon proof that
they exercised all the diligence of a good father of a family in the
selection and supervision of their employees.
Article 1760. The common carrier's responsibility prescribed in the
preceding article cannot be eliminated or limited by stipulation, by the
posting of notices, by statements on the tickets or otherwise.
When is the liability non-exempting or non-limiting?
1. The common carrier is liable due to negligence of willful
misconduct of an employee.
• EVEN IF the act was done beyond the scope of authority and
in violation of orders.
2. Liability does not cease with exercise of ordinary diligence by
common carriers.
3. Liability is not eliminated or limited by stipulation, posting of
notices, or statement on the tickets.
Savellano vs. NWA
Condition 9 on the ticket allowed respondent to substitute alternate
carriers or aircraft without notice. However, nothing there permits
shuttling passengers—without so much as a by your leave—to
stopping places that they have not been previously notified of, much
less agreed to or been prepared for. Substituting aircrafts or carriers
without notice is entirely different from changing stopping places
or connecting cities without notice. Furthermore the change was
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subject to “necessity” – the burden of proof is on the airline to show
this. In this case they were not able to clearly show that ferrying the
Savellano’s from LAX-DC-KOR-MNL, as compared to LAX-KOR-
MNL, was due to necessity.
Limited Liability and Defenses
Article 1757. The responsibility of a common carrier for the safety of
passengers as required in articles 1733 and 1755 cannot be dispensed
with or lessened by stipulation, by the posting of notices, by
statements on tickets, or otherwise.
Article 1758. When a passenger is carried gratuitously, a stipulation
limiting the common carrier's liability for negligence is valid, but not
for willful acts or gross negligence.
Limitation of Liability:
• The General Rule is that liability cannot be lessened or dispensed
with by the posting notices, statement on the tickets, etc.
• EXCEPT – in Gratuitous Carriage.
o Here a stipulation to limit liability is valid.
o BUT NOT for gross negligence or willful acts.
• Reduced Fare = does not justify limiting liability.
Alberta & Yubido vs. CA
Moreover, a common carrier may not be absolved from liability in
case of force majeure or fortuitous event alone. The common carrier
must still prove that it was not negligent in causing the death or injury
resulting from an accident
GR: If a passenger is injured or dies, or goods are damaged or
destroyed, there automatically arises a presumption that the CC was at
fault or is negligent.
EX: There are 2:
1. Fortuitous Event
2. The CC is able to prove that it exercised extraordinary diligence
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Fortune Express vs. CA
A common carrier can be held liable for failing to prevent a hijacking
by frisking passengers and inspecting their baggage. Had petitioner
and its employees been vigilant they would not have failed to see that
the malefactors had a large quantity of gasoline with them. Under the
circumstances, simple precautionary measures to protect the safety of
passengers, such as frisking passengers and inspecting their baggage,
preferably with nonintrusive gadgets such as metal detectors, before
allowing them on board could have been employed without violating
the passenger’s constitutional rights.
Tan vs. NWA
We agree with the Court of Appeals that respondent was not guilty of
willful misconduct. “For willful misconduct to exist, there must be a
showing that the acts complained of were impelled by an intention to
violate the law, or were in persistent disregard of one’s rights. It must
be evidenced by a flagrantly or shamefully wrong or improper
conduct.”
Contrary to petitioner’s contention, there was nothing in the conduct
of respondent which showed that they were motivated by malice or
bad faith in loading her baggages on another plane. Due to weight and
balance restrictions, as a safety measure, respondent airline had
to transport the baggages on a different flight, but with the same
expected date and time of arrival in the Philippines.
Acts of Passengers and Others
Article 1761. The passenger must observe the diligence of a good
father of a family to avoid injury to himself.
Article 1762. The contributory negligence of the passenger does not
bar recovery of damages for his death or injuries, if the proximate
cause thereof is the negligence of the common carrier, but the amount
of damages shall be equitably reduced.
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Article 1763. A common carrier is responsible for injuries suffered by
a passenger on account of the willful acts or negligence of other
passengers or of strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
Duty of the Passengers:
1. To observe ordinary diligence to avoid injury to himself.
2. Contributory negligence of a passenger does not bar recovery of
damages; it just reduces the amount thereof.
This pertains to items where you have to wear a seatbelt
Effect of acts of Co-passengers or Strangers:
• The common carrier is responsible in case of death of injury on
account of the willful act or negligence of other passengers or
strangers.
o IF the employees could have stopped or prevented the act or
omission of ordinary diligence.
So from the above rule you can see that a common carrier has to act
with extraordinary diligence over its affairs, and ordinary diligence to
prevent harm coming from 3rd persons.
Bachelor Express vs. CA
The running amuck of the passenger was the proximate cause of the
incident as it triggered off a commotion and panic among the
passengers such that the passengers started running to the sole exit
shoving each other resulting in the falling off the bus by passengers
Beter and Rautraut causing them fatal injuries. The sudden act of the
passenger who stabbed another passenger in the bus is within the
context of force majeure.
However, in order that a common carrier may be absolved from
liability in case of force majeure, it is not enough that the accident was
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caused by force majeure. The common carrier must still prove that it
was not negligent in causing the injuries resulting from such accident.
The bus driver did not immediately stop the bus at the height of the
commotion; the bus was speeding from a full stop; the victims fell
from the bus door when it was opened or gave way while the bus was
still running; the conductor panicked and blew his whistle after people
had already fallen off the bus; and the bus was not properly equipped
with doors in accordance with law—it is clear that the petitioners have
failed to overcome the presumption of fault and negligence found in
the law governing common carriers.
The petitioners' argument that the petitioners "are not insurers of their
passengers" deserves no merit in view of the failure of the petitioners
to prove that the deaths of the two passengers were exclusively due to
force majeure and not to the failure of the petitioners to observe
extraordinary diligence in transporting safely the passengers to their
destinations as warranted by law.
Smith Bell vs. Borja
While knowing that their vessel was carrying dangerous inflammable
chemicals, its officers and crew failed to take all the necessary
precautions to prevent an accident. Petitioner was, therefore,
negligent.
The owner or the person in possession and control of a vessel and the
vessel are liable for all natural and proximate damage caused to
persons and property by reason of negligent management or
navigation.
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RECOVERABLE DAMAGES
2. Article 2205
In this case you have torts, and the result of that is damages. ▪ Impairment of earning capacity
▪ Injury to business standing or commercial credit
Torts Damages
1. QD 1. Actual Article 2205. Damages may be recovered:
2. Torts in human relations 2. Moral (1) For loss or impairment of earning capacity in cases of temporary
3. BOK 3. Nominal or permanent personal injury;
4. Crime 4. Temperate (2) For injury to the plaintiff's business standing or commercial credit.
5. Liquidated
6. Exemplary 3. Article 2206
▪ Fixed indemnity
Actual Damages ▪ Loss of earning capacity.
Article 2199. Except as provided by law or by stipulation, one is ▪ Formula: (2/3(80-age at time of death)xGI)/2
entitled to an adequate compensation only for such pecuniary loss
suffered by him as he has duly proved. Such compensation is referred Article 2206. The amount of damages for death caused by a crime or
to as actual or compensatory damages. quasi-delict shall be at least three thousand pesos, even though there
• Compensation for pecuniary loss suffered. may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of
Kinds the deceased, and the indemnity shall be paid to the heirs of the latter;
1. Article 2200 such indemnity shall in every case be assessed and awarded by the
▪ Actual loss court, unless the deceased on account of permanent physical disability
▪ Unrealized profit not caused by the defendant, had no earning capacity at the time of his
death;
Article 2200. Indemnification for damages shall comprehend not only (2) If the deceased was obliged to give support according to the
the value of the loss suffered, but also that of the profits which the provisions of article 291, the recipient who is not an heir called to the
obligee failed to obtain. (1106) decedent's inheritance by the law of testate or intestate succession,
may demand support from the person causing the death, for a period
Article 2201. In contracts and quasi-contracts, the damages for which not exceeding five years, the exact duration to be fixed by the court;
the obligor who acted in good faith is liable shall be those that are the (3) The spouse, legitimate and illegitimate descendants and ascendants
natural and probable consequences of the breach of the obligation, and of the deceased may demand moral damages for mental anguish by
which the parties have foreseen or could have reasonably foreseen at reason of the death of the deceased.
the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall
be responsible for all damages which may be reasonably attributed to
the non-performance of the obligation. Davila vs. PAL

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There was a plane crash where all the crew and passengers died. In
this case the pilot of the plane deviated from the prescribed course,
hoping to take a shortcut. Thus this led the SC to conclude:
The facts of the case at bar showed that the pilot’s action was a
violation of air traffic rules to which, under the circumstances, the
accident may be directly attributable. In any case, absent a satisfactory
explanation on the part of the defendant as to who and why the
accident occurred the presumption is that it was at fault, under Article
1756 of the Civil Code.
Pursuant to current jurisprudence on the indemnity due to the
heirs of the deceased who was the victim of a tortious act, the
amount should be increased to P12,000.00
In this case the SC REDUCED the life expectancy of the dude since
he was being treated for various ailments like chest pains, back pains,
etc.
4. Articles 2208-2213
▪ Atty’s fees
▪ Interest
Article 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be recovered,
except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against
the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff's plainly valid, just and demandable
claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers
and skilled workers;
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(8) In actions for indemnity under workmen's compensation and
employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a
crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be
reasonable.
Article 2209. If the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for damages,
there being no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal
interest, which is six per cent per annum. (1108)
Article 2210. Interest may, in the discretion of the court, be allowed
upon damages awarded for breach of contract.
Article 2211. In crimes and quasi-delicts, interest as a part of the
damages may, in a proper case, be adjudicated in the discretion of the
court.
Article 2212. Interest due shall earn legal interest from the time it is
judicially demanded, although the obligation may be silent upon this
point. (1109a)
Article 2213. Interest cannot be recovered upon unliquidated claims
or damages, except when the demand can be established with
reasonable certainty.
Requisites to Recover Actual Damages:
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1. Proof of loss, injury or impairment
2. Proof of actual amount thereof with reasonable degree of certainty
premised upon competent proof.
Moral Damages
Article 2217. Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered
if they are the proximate result of the defendant's wrongful act for
omission.
Article 2219. Moral damages may be recovered in the following and
analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32,
34, and 35.
What are moral damages for?
• Compensation or physical suffering, mental anguish, fright,
serious anxiety, etc, which are the proximate result of the
wrongful act or omission.
Grounds for the award:
1. BOK (Art. 2220)
▪ There must be fraud, bad faith, or death
Article 2220. Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under the
circumstances, such damages are justly due. The same rule applies to
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breaches of contract where the defendant acted fraudulently or in bad
faith
2. In case of death the heirs are entitled to moral damages
3. Only injured passenger entitled to moral damages due to his
injury.
Factors to determine amount
1. Social, political, official, financial standing of the passenger.
2. Degree/extent of mental anguish
3. Sentimental value of the property (Art 2218)
Article 2218. In the adjudication of moral damages, the sentimental
value of property, real or personal, may be considered.
Zalamea vs. CA
Overbooking amounts to bad faith, entitling the passengers concerned
to an award of moral damages.
When an airline issues a ticket to a passenger confirmed on a particular
flight, on a certain date, a contract of carriage arises, and the passenger
has every right to expect that he would fly on that flight and on that
date. If he does not, then the carrier opens itself to a suit for breach of
contract of carriage.
Where an airline had deliberately overbooked, it took the risk of
having to deprive some passengers of their seats in case all of them
would show up for check in. For the indignity and inconvenience of
being refused a confirmed seat on the last minute, said passenger is
entitled to an award of moral damages.
This is so, for a contract of carriage generates a relation attended with
public duty—a duty to provide public service and convenience to its
passengers which must be paramount to self-interest or enrichment.
There was a case where the airline changed the size of the plain to one
that was smaller since the flight was not full sacrificed the comfort
of its first class passengers for the sake of economy, amounts to
bad faith since there was no first class area. This entitles the passenger
to an award of moral damages.
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NOTE: In this case the SC just made the airline pay for the ticket price
for the trip that the plaintiffs had to book for on their own, and they
did not refund the price that the plaintiffs paid for the overbooked
flight. It reasoned that if they ordered that if BOTH tickets were
refunded, then the plaintiffs would have flown for free, which is
madaya.
For breach of contract of carriage
• General rule: Can’t recover moral damages
• Exception:
1. It results in the death of a passenger, in accordance with
Article 1764, in relation to Article 2206 par. 3.
2. There is fraud or bad faith regardless if there is death or not
Nominal Damages
Article 2221. Nominal damages are adjudicated in order that a right
of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
• Awarded for the vindication or recognition of a right which has
been invaded or violated.
• Grounds for recovery
1. Breech of legal duty or invasion of a legal right
▪ EVEN IF no actual damages resulted or none is known.
2. No actual, moral, or temperate damages were awarded.
When it comes to a contract of carriage, there is no need to show that
the carrier was negligent. The mere fact that there was injury or death
to the passenger, and loss or damage to the goods gives rise to a
presumption of negligence on the part of the common carrier.
Saludo vs. CA
In this case there were 2 airlines that were being sued, one is PAL and
the other is TWA. PAL was the one that brought the body form SFO
to MNL, and TWA is the one that brought it from Dallas to SFO. In
this case the SC said that it was not PAL who was at fault, since the
TANTOCO
mix up happened when the casket was with TWA. Thus when PAL
received the wrong casket, it was under no duty nor obligation to
check if the body was correct, as a matter of fact it had no authority to
open the casket. In this case all that PAL could do was rely on the bill
of lading and the assurance of TWA that the casket contained the
body. But the daughter of the deceased was still seeking moral
damages because the body of the mom got lost.
RULE: Moral damages may be awarded for willful or fraudulent
breach of contract or when such breach is attended by malice or bad
faith.
EXONERATING: However, in the absence of strong and positive
evidence of fraud, malice or bad faith, moral damages cannot be
awarded. Neither can there be an award of exemplary damages nor of
attorney’s fees as an item of damages in the absence of proof that
defendant acted with malice, fraud or bad faith.
GR: A CC is not an insurer against delay in the transportation of
goods. Thus a CC just has to deliver the goods within a reasonable
time. So even if there is delay from the ETA, as long as it is delivered
within a reasonable time then the CC is not liable for delay.
EX: If the CC made an express contract to transport and deliver the
property within a specified time – it is bound to fulfill it within that
time frame, and it WILL be liable for delay.
• Whether or not there has been such an undertaking on the part of
the carrier is to be determined from the circumstances surrounding
the case and by application of the ordinary rules for the
interpretation of contracts.
Note: In this case PAL was also not held to be in delay since on the
date when the body was to fly out of SFO, it was not with it yet. Thus
the SC said that how can PAL be in delay if it was not in constructive
nor actual possession of the body. In this case it was really TWA that
messed up. It was also not liable for moral and exemplary damages
since there was no BF on the part of PAL.
Air France vs. Gallego
This is the case regarding the congressman who was supposed to give
a talk, and the airline company lost his luggage.
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BUT! The mere failure of a CC to deliver the baggage of the passenger
does not amount to willful misconduct to make the CC liable for moral
and exemplary damages. Usually kasi moral damages are awarded for
mental anguish and suffering. BUT not aevry case of mental anguish
fright or serious anxiety calls for the award of moral damages.
If the CC did not act (1) fraudulently or in (2) bad faith, then the
liability of the CC is limited to the natural; and probable consequences
of the breach of the obligation which the parties could have reasonable
foreseen.
Temperate Damages
Article 2224. Temperate or moderate damages, which are more than
nominal but less than compensatory damages, may be recovered when
the court finds that some pecuniary loss has been suffered but its
amount can not, from the nature of the case, be provided with
certainty.
• Award is more than nominal, but less than actual damages
When are Temperate Damages recoverable?
1. When pecuniary loss was suffered BUT the amount thereof
cannot, from the very nature thereof, be proved with certainty.
2. When the amount can be proved BUT the plaintiff failed to:
a. Present evidence, or
b. Submitted the wrong evidence.
Liquidated Damages
Article 2226. Liquidated damages are those agreed upon by the
parties to a contract, to be paid in case of breach thereof.
• Damages that are agreed to by the parties in the event that a
contract is breeched. (Art 2226)
• This applies to breach of contract ONLY.
Q: Is the amount that is agreed on in the contract always binding?
A: NO – the amount that is stipulated shall be equitable reduced if
iniquitous or unconscionable. (Art 2227)
TANTOCO
Article 2227. Liquidated damages, whether intended as an indemnity
or a penalty, shall be equitably reduced if they are iniquitous or
unconscionable.
• Example:
o Valid stipulation on limited amount of liability
o Stipulates indemnity in case of delay
• When recoverable?
o There has to be proof of the existence of the contracy
o There has to be proof of the breech of the contract, or of delay
in the fulfillment of obligation.
Exemplary Damages
Article 2229. Exemplary or corrective damages are imposed, by way
of example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.
• These are damages which are imposed by way of examply or
correction for the common good
When are exemplary damages recoverable?
1. There must be an award of actual, moral, temperate, or liquidated
damages
2. Crime is attended by aggravating circumstances
• These aggravating circumstances are not the ones that are
found in Crim, rather these are facts or acts that make the acts
more malala.
o E.x. there is a bus driver who swerves the bus like hell,
then upon bumping he runs away – sir: this is aggravating.
3. Gross negligence in commission of QD
4. A Contract of carriage is violated in wanton, fraudulent, reckless,
aggressive, or malevolent manner.
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When are they NOT recoverable?

1. There was good faith
2. Employer is NOT subsidiarily liable unless he participated or
abetted in the CRIME.

Davila vs. PAL

Q: Does the absence of extraordinary diligence on the part of the CC

mean that the passenger can recover ED?

A: NO! exemplary damages in contracts and quasi-contracts may be

awarded if the CC acted in a wanton, fraudulent, reckless, oppressive
or malevolent manner. The failure of the defendant here to exercise
extraordinary diligence, as required by law, does not amount to anyone
of the circumstances contemplated in the said provision.

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CARRIAGE OF GOODS
1. Common carrier
2. Shipper
3. Consignee
Delay in delivery, loss, destruction, or deterioration of the goods
1. 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 or constructively by the carrier to the consignee or
to the person who has the right to receive them. (Art. 1736)
2. It remains in full force and effect even when they are temporarily
unloaded or stored in transit unless the shipper or owner has made use
of the right of stoppage in transitu. (Art. 1737)
3. It continues to be operative even during the time the goods are stored
in a warehouse of the carrier at the place of destination until the
consignee has bee advised of the arrival of the goods and has had
reasonable opportunity thereafter to remove them or otherwise
dispose of them. (Art. 1738)
4.  Delivery of goods to the custom authorities is not delivery to the
consignee. (Lu Do v. Binamira, 101 Phil 120)
Art.1735 Civil Code
Reason: As to when and how goods were damaged in transit is a matter
peculiarly within the knowledge of the carrier and its employees. (Mirasol
v. Dollar, 53 PHIL 124)
Mere proof of delivery of goods to a carrier in good order and the
TANTOCO
CARRIAGE OF PASSENGERS
1. Common carrier
2. Passenger
Death or injury to the passengers
1. The duty of a common carrier to provide safety to its passengers so
obligates it 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 v. Navidad, [2003])
2. All persons who remain on the premises within a reasonable time after
leaving the conveyance are to be deemed passengers, and what is a
reasonable time or a reasonable delay within this rule is to be determined
from all the circumstances, and includes a reasonable time to see after
his baggage and prepare for his departure. (La Mallorca v. CA, 17
SCRA 739 ; Abiotiz Shipping Corporation v. CA, 179 SCRA 95)
3. It is the duty of common carriers of passengers to stop their conveyances
a reasonable length of time in order to afford passengers an opportunity
to enter, and they are liable for injuries suffered from the sudden starting
up or jerking of their conveyances while doing so. The duty which the
carrier of passengers owes to its patrons extends to persons boarding the
cars as well as to those alighting therefrom (Dangwa Trans Co., Inc. vs.
CA 202 SCRA 574).
Art.1755 Civil Code
Reason: The contract between the passenger and the carrier imposes on the
latter the duty to transport the passenger safely; hence the burden of
explaining should fall on the carrier.
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subsequent arrival of the same goods at the place of destination in bad

order makes for a prima facie case against the carrier. (Coastwise
Lighterage Corp. v. CA, 245 SCRA 796)

1. Ordinary circumstance: Exercise of extraordinary diligence (Art. 1735) 1. Exercise of extraordinary diligence (Art. 1756)
2. Special circumstances: 2. Caso fortuito
a. Flood, storm, earthquake, lighting, or other natural disaster or calamity (plus
force majeure)
b. Act of the public enemy in war, whether international or civil
c. Act or omission of the shipper or the owner of goods
d. The character of the goods or defects in the packing or in the containers
e. Order or act of competent public authority (Art. 1734)
Valid stipulations
1. Reduction of degree of diligence to ordinary diligence, provided it be: Stipulation limiting liability when a passenger is carried gratuitously, but not for willful acts
a. In writing, signed by the shipper or owner; or gross negligence. (Art. 1758)
b. Supported by a valuable consideration other than the service
rendered by the carriers; and
c. Reasonable, just and not contrary to public policy. (Art. 1744)
2. Fixed amount of liability: A contract fixing the sum to be recovered
by the owner or shipper for the loss, destruction or deterioration of
the goods, if it is reasonable and just under the circumstances and has
been fairly and freely agreed upon. (Art. 1750)
3. Limited liability for delay: An agreement limiting the common
carrier’s liability for delay on account of strikes or riots (Art. 1748)
4. Stipulation limiting liability to the value of the goods appearing in the
bill of lading, unless the shipper or owner declares a greater value.
(Art. 1749)

 The diligence required in the carriage of the goods may be reduced by

only one degree, from extraordinary to ordinary diligence or diligence of
a good father of a family. (Art. 1744, Art. 1745, no. 4)

Void stipulations

TANTOCO Page | 27
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1. That the goods are transported at the risk of the owner or shipper; Dispensing with or lessening the extraordinary responsibility of a common
2. That carrier will not be liable for any loss, destruction or deterioration carrier for the safety of passengers imposed by law by stipulation, by posting
of the goods; of notices, by statements on tickets or otherwise. (Art. 1757)
3. That the carrier need not observe any diligence in the custody of the
goods;
4. That the carrier shall exercise a degree of diligence less than that of a
good father of a family over the movable transported;
5. That the carrier shall not be responsible for the acts or omissions of
his or its employees;
6. That the carrier’s liability for acts committed by thieves or robbers
who do not act with grave or irresistible threat, violence or force is
dispensed with or diminished;
7. That the carrier is not responsible for the loss, destruction or
deterioration of the goods on account of the defective condition of the
car, vehicle, ship or other equipment used in the contract of carriage.
(Art. 1745)

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TRANSPORTATION OVER LAND
Time to Deliver
Article 358 – If there is no period fixed for the delivery of the goods
the carrier shall be bound to forward them in the first shipment of the
same or 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.
Article 370 – If a period has been fixed for the delivery of the goods,
it must be made within such time, and, for failure to do so, the carrier
shall pay the indemnity stipulated in the bill of lading, neither the
shipper nor the consignee being entitled to anything else.
If no indemnity has been stipulated and the delay exceeds the time
fixed in the bill of lading, the carrier shall be liable for the damages
which the delay may have caused.
Article 371 – In case of delay through the fault of the carrier, referred
to in the preceding articles, the consignee may leave the goods
transported in the hands of the former, advising him thereof in writing
before their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value
of the goods as if they had been lost or mislaid.
If the abandonment is not made, the indemnification for losses and
damages by reason of the delay cannot exceed the current price which
the goods transported would have had on the day and at the place in
which they should have been delivered; this same rule is to be
observed in all other cases in which this indemnity may be due.
What is the time to deliver?
1. When no period is fixed in the BOL
TANTOCO
•The carrier must forward the goods in the first shipment of
the same or similar goods.
• This must be done within a reasonable time
2. When period is fixed
• Carrier must deliver foods within the time fixed
• If he does not then the CC will be liable for the damages that
are specified in the BOL.
3 Functions of a BOL:
1. Receipt
2. Contract of carriage
3. Instrument of title
Lorenzo vs. BJ Mathel
In determining whether time is of the essence in a contract, the
ultimate criterion is
• The actual or apparent intention of the parties and before time may
be so regarded by a court,
• There must be a sufficient manifestation, either in the contract
itself or the surrounding circumstances of that intention.
Petitioner insists that although its purchase orders did not specify the
dates when the cylinder liners were supposed to be delivered,
nevertheless, respondent should abide by the term of delivery
appearing on the quotation it submitted to petitioner. In this case there
was a clear stipulation that the delivery was to be made within 2
months, in this case non was made, so there was delay.
When the time of delivery is not fixed or is stated in general and
indefinite terms, time is not of the essence of the contract. In such
cases, the delivery must be made within a reasonable time. The law
implies, however, that if no time is fixed, delivery shall be made
within a reasonable time, in the absence of anything to show that an
immediate delivery intended.
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Delay in Delivery
If there is delay in the delivery, the carrier is liable for:
1. Indemnity stipulated in the bill of lading
2. If there is no stipulation in the BOL:
• The damages due to delay which may NOT exceed the
current price of the goods on the day and place of
destination
3. Special Damages
• These are items such as unrealized profit
• BUT the carrier must be able to foresee or had notice of
the circumstances leading to the probable occurrence of such
damage.
4. Full Value of the goods
• If consignee should exercise abandonment of the goods by
advising the carrier accordingly prior to arrival at destination.
Route and Deviation
Article 359 – If there is an agreement between the shipper and the
carrier as to the road over which the conveyance is to be made, the
carrier may not change the route, unless it be by reason of force
majeure; and should he do so without this cause, he shall be liable for
all the losses which the goods he transports may suffer from any other
cause, beside paying the sum which may have been stipulated for such
case.
When on account of said cause of force majeure, the carrier had to take
another route which produced an increase in transportation charges,
he shall be reimbursed for such increase upon formal proof thereof.
Notes:
1. If there is an agreed route:
• The carrier may NOT change it. UNLESS by reason of Force
Majeure
TANTOCO
• Otherwise the carrier is liable for losses suffered by goods,
and for indemnity stipulated.
2. If there is no agreed route:
• The carrier must select the shortest, least expensive and
practically passable route.
Campagnie vs. Hamburg Australia
The master of a German vessel, .the Sambia which had just completed
loading a cargo of rice meal in the French port of Saigon, at the
outbreak of the present war, for delivery in Dunkirk or Hamburg,
under a contract of affreightment with a French shipper, fled with his
vessel and her cargo and took refuge in Manila Bay, Held: That under
the circumstances surrounding the flight of the vessel, her master had
no such assurance, under any settled rule of public international law,
as to the immunity of his vessel from seizure by the French authorities
in Saigon as would justify holding that it was his duty to remain in that
port, in the hope that he would be allowed to sail for the port of
destination designated in the charter party with a laissezpasser or
safeconduct, which would secure the safety of his vessels and cargo
en route.
In this case the court said that it did not matter that there was a decree
by France that there will be days of grace where ships flying the enemy
flag may travel unmolested. The Court said that the ship was under no
assurance that the French would respect this. This absent any
assurance that this will be followed the captain of the ship was justified
in seeking a port of refuge in a neutral port.
The captain was also justified in fleeing from danger of seizure in the
port of an enemy, to the absolute security of a neutral port. Under the
general provisions of maritime law, and the express provisions of the
charter party which contained a mutual exception with relation to "The
act of God, the King's enemies, etc.," the shipowner was relieved from
liability for the deviation of the Sambia from the route prescribed in
the charter party, and the resultant damages to the cargo.
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What happens to the goods that are left in a port of refuge?’
1. Consult with the consignee by forwarding the property to the port
that is designated in the contract of affraightment
2. When the condition and nature of the cargo is of such a character
that it will be inadvisable to ship it again, or there is ground to
believe that such will be the case, the captain is under the duty to
make a disposition that is advantageous to the consignee – as the
circumstances may permit.
Note; A shipmaster must be given a reasonable amount of time in
which to decide what to do with the cargo when he enters a port of
refuge. But if the cargo is perishable neither the ship-owner or the
captain is responsible for the loss or damage suffered by the cargo as
a result of the deviation.
• But this non liability is premised on the fact that there was no
delay, and that the decision as to what to do with the property was
done promptly.
Partial and Defective Delivery
Article 363 – Outside of the cases mentioned in the second paragraph
of Article 361, the carrier shall be obliged to deliver the goods shipped
in the same condition in which, according to the bill of lading, they
were found at the time they were received, without any damage or
impairment, and failing to do so, to pay the value which those not
delivered may have at the point and at the time at which their delivery
should have been made.
If those not delivered form part of the goods transported, the consignee
may refuse to receive the latter, when he proves that he cannot make
use of them independently of the others.
Article 364 – If the effect of the damage referred to in Article 361 is
merely a diminution in the value of the goods, the obligation of the
carrier shall be reduced to the payment of the amount which, in the
judgment of experts, constitutes such difference in value.
TANTOCO
Article 365 – If, in consequence of the damage, the goods are rendered
useless for sale and consumption for the purposes for which they are
properly destined, the consignee shall not be bound to receive them,
and he may have them in the hands of the carrier, demanding of the
latter their value at the current price on that day.
If among the damaged goods there should be some pieces in good
condition and without any defect, the foregoing provision shall be
applicable with respect to those damaged and the consignee shall
receive those which are sound, this segregation to be made by distinct
and separate pieces and without dividing a single object, unless the
consignee proves the impossibility of conveniently making use of
them in this form.
The same rule shall be applied to merchandise in bales or packages,
separating those parcels which appear sound.
Notes:
• The carrier must deliver the goods in the same condition and
quantity in which they are received, according to the BOL.
• Here there is a partial or defective delivery, thus the consignee
may demand from the CC that the value of the goods be paid.
What happens if there is partial delivery?
• If there is partial delivery, the consignee may refuse to receive
those that are delivered.
o IF they cannot be used independently of those NOT delivered.
What if the goods that are delivered were rendered useless for sale or
consumption?
• The consignee may refuse to receive the goods.
• Ex. The goods were perishable, and they were not delivered on
time, and when they arrived, they were spoiled. In this case the
consignee may refuse to accept the goods.
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What if the goods delivered are damaged to the extent that their value
is diminished?
• The carrier must pay the value as judged by experts
o Experts here are actually the customs surveyors, and they are
competent and qualified to determine the value of the goods.
What is the right of abandonment?
• The right of abandonment is when the consignee may refuse to
accept the goods, and demand that the full value for the goods be
paid.
When may the right of abandonment be availed of?
• In case of partial delivery
• If the goods delivered were rendered useless for sale or
consumption.
Esso Standard vs. Mainla Railroad
Esso was saying that provisional claims are not in compliance with the
Management Contract because the latter requires the filing not merely
of a “provisional claim” but of a “claim for the value” The SC said
that it is of no consequential import. The test in determining if the
filing of the claim is valid is if the arrastre operator has reasonable
opportunity to check the validity of the claim while the facts are still
fresh in the minds of the persons who took part in the transaction and
while the pertinent documents are still available.
Furthermore, a claim for damage need not be a detailed list of what
was lost. It may even be a provisional list first with the details to
follow. As a matter of fact the SC said that the preparation of the actual
amounts of the loss should be done carefully and not with haste. A
formal claim may be filed LONG AFTER a provisional claim has been
filed.
Claim and Suit
Article 366 – Within the twenty-four hours following the receipt of
the merchandise, the claim against the carrier for damage or average
TANTOCO
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 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.
What if the damage is ascertainable from the outside of the package?
• Does not have to be an exact claim. It may be provisional, like
you say ½ is damages.
o Like if you see that from the outside that the locks are
damages.
• The claim must be made at the time of the receipt.
What if damage is only ascertainable ONLY by the opening of the
package?
The claim against the carrier must be made within 24 hours following
the receipt.
• Note: there may be a longer period that is stipulated between the
parties.
What should a provisional claim state?
• The provisional claim need not state in detail the list of goods lost
or damaged, so long as the carrier can make a reasonable
verification.
Note: A claim is a condition precedent to the right of action – which
must be filed within one year from the delivery of the goods, or the
denial of the claim.
• So you have to make a claim, within the time that is prescribed by
law, and you have to file a suit one year from the time that your
claim is denied or from when the goods are delivered.
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So there are 3 periods:
1. If the damage can be seen from the outside palang, then you have
to do it right away
2. If the damage can only be seen from the inside, then you must
notify within 24 hours
• But NOTE: In the aboitiz case, the SC said that the 24-hour
rule is not something that is mandatory. It must be given a
reasonable and practicable construction, adapted to the
circumstances of the case. In this case the consignee only gave
notice 2 days later. But the SC said the damage to the goods
was water damage, and this is something that would certainly
take more than 2 days, thus there was substantial compliance
with the notice requirement.
3. Period may be extended according to agreement of the parties.
Esso Standard vs. Manila Railroad
Note: There can be a constructive denial, as when the company does
not act on the claim within one year.
In cases where the arrastre operator does not act on the claim one way
or the other within the period of one year from the date of discharge
of the last package, the claim should be deemed constructively denied
or rejected upon the expiration of one year therefrom.
Aboitiz Shipping vs. Insurance Company
The giving of notice of loss or injury is a condition precedent to the
action for loss or injury or the right to enforce the carrier’s liability.
This notice requirement protects the carrier by affording it an
opportunity to make an investigation of the claim while the matter is
still fresh and easily investigated. It is meant to safeguard the carrier
from false and fraudulent claims.
Remember, there are periods: 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.
TANTOCO
In this case the court also gave reasonable allowance for the opening
of the package, since it was delivered to a school, and when it is
delivered to the school, there is SOP when it comes to opening a
package, and this was taken into consideration. Furthermore, upon
opening and discovery of the damaged condition of the goods, a report
to this effect had to pass through the proper channels before it could
be finalized and endorsed by the institution to the claims department
of the shipping company. So here the court said that the notice that
was made 2 days after was a reasonable period since the goods were
of a nature that they could not have been destroyed in that period.
Misdelivery and Non-delivery
Article 368 – The carrier must deliver to the consignee, without any
delay or obstruction, the goods which he may have received, by the
mere fact of being named in the bill of lading to receive them; and if
he does not do so, he shall be liable for the damages which may be
caused thereby.
Article 369 – If the consignee cannot be found at the residence
indicated in the bill of lading, or if he refuses to pay the transportation
charges and expenses, or if he refuses to receive the goods, the
municipal judge, where there is none of the first instance, shall provide
for their deposit at the disposal of the shipper, this deposit producing
all the effects of delivery without prejudice to third parties with a
better right.
The carrier is under an obligation to deliver the goods to the consignee
or the legitimate holder of the BOL.
1. The shipper may order the return or retention of the goods by the
carrier PRIOR to the appearance of the consignee or the legitimate
holder of the BOL.
2. The carrier is liable for damages if it delivers to the wrong person
(misdelivery)
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3. If the carrier makes no delivery or refuses to deliver (non-
delivery), the consignee may sue for conversion and damages.
When the consignee:
1. Cannot be found in the place indicated in the BOL
2. Refuses to pay the transportation charge
3. Refuses to receive the goods
The carrier may:
1. Deposit the goods in its warehouse
2. Deposit the goods in the courts
• Such deposit has the legal effect of delivery.
For misdelivery and non-delivery, a claim is not a condition
precedent to an action.
• An action must be flied:
o 4 years = no written contract
o 10 years = written contract
• Note: If the claim is based on loss or damage, then a claim is a pre
requisite to the filing of an action.
Ang vs. American Steamship Agencies
For suits predicated, not upon loss or damage but on alleged
misdelivery (or conversion) of the imported goods, the applicable rule
on prescription is that found in the New Civil Code, either ten years
for breach of a written contract or four years for quasidelict.
Where the goods shipped were neither lost nor damaged in transit, but
were delivered to someone who claimed to be entitled to the cargo, the
one-year period does not apply.
Multi Carriers
Article 373 – The carrier who makes the delivery of the merchandise
to the consignee by virtue of combined agreements or services with
other carriers shall assume the obligations of those who preceded him
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in the conveyance, reserving his right to proceed against the latter if
he was not the party directly responsible for the fault which gave rise
to the claim of the shipper or consignee.
The carrier who makes the delivery shall likewise acquire all the
actions and rights of those who preceded him in the conveyance.
The shipper and the consignee shall have an immediate right of action
against the carrier who executed the transportation contract, or against
the other carriers who may have received the goods transported
without reservation.
However, the reservation made by the latter shall not relieve them
from the responsibilities which they may have incurred by their own
acts.
What is a multi-carrier?
• This refers to an arrangement where:
1. Several carriers successively transport the goods, or
2. By a single through bill of lading issued by a carrier are
honored by the other carriers.
▪ Note: There is an animal that is called a through BOL, in
this case there is a transshipment of goods, so the BOL is
deemed good for all of the transshipments.
• If a transhipper finds something wrong, then he has to
take note of it, or else he will be held liable.
• Shipper 1  Shipper 2  Shipper 3  Consignee
o If there is no note of defect on the BOL and there
is damage to the goods, the consignee may go
after shipper 3, or 2 or 1. But shipper 3 may go
after shipper 2.
Who is liable among all of these transhippers?
1. Transportation of goods by successive carriers
• The last carrier assumes the obligation of the previous
carriers.
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o Provided that the last carrier did not make any reservation
on the BOL upon receiving the goods.
2. The last carrier, if not directly responsible for the loss or damage,
may proceed against the previous carriers.
3. The shippers/consignee the right of action against the carrier who
executed the transportation contract, or the other carriers who
received the goods without reservation.
Note: If you are not sure who among the carriers are at fault, then you
file a suit against all of them. Thus if carrier 3 makes a reservation,
and you are not sure who is wrong talaga, go against 2 and 3.
• But the GR is that the last carrier that is liable to the consignee.
Luftansa vs. CA
In this case Lufthansa was in alliance with other airlines. In this case
one of the alliance partners bumped of the passenger from the flight,
so he naturally sought damages. Lufthansa was saying that it should
be exculpated from liability since its duty stopped in the Bombay
airport, and it was Air Kenya who was the one who bumped the
passenger off. The question here is if Lufthansa may be held liable
for the bumping off.
would honor his ticket; assure him of a space therein and transport him
on a particular segment of his trip.
Clearly, bad faith attended the performance of the contract of carriage,
for even while Antiporda was in Bombay, representatives of Lufthansa
already tried to evade liability first, by claiming that the contract of
carriage between Lufthansa and Antiporda ceased at Bombay airport,
in disregard of the fact that Antiporda was holding a Lufthansa ticket
for the entire five leg trip; second, despite Berndt Loewe’s knowledge
that Antiporda’s seat was allowed to be given to another passenger,
the same suppressed the information and feigned ignorance of the
matter, presenting altogether another reason why Antiporda was not
listed in the manifest, i.e. that Air Kenya Boeing 707 was overbooked,
notwithstanding clear proof that Lufthansa in Manila confirmed his
reservation for said flight.

The SC said that Lufthansa cannot claim that its liability thereon
ceased at Bombay Airport and thence, shifted to the various carriers
that assumed the actual task of transporting said private respondent.

The SC rejected Lufthansa’s theory that from the time another carrier
was engaged to transport Antiporda on another segment of his trip, it
merely acted as a ticket issuing agent in behalf of said carrier. In the
very nature of their contract, Lufthansa is clearly the principal in the
contract of carriage with Antiporda and remains to be so, regardless
of those instances when actual carriage was to be performed by
various carriers. The issuance of a confirmed Lufthansa ticket in favor
of Antiporda covering his entire fiveleg trip aboard successive carriers
concretely attests to this. This also serves as proof that Lufthansa, in
effect guaranteed that the successive carriers, such as Air Kenya

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VESSELS/PERSONS IN MARITIME COMMERCE Note: Seaworthiness is a relative term – i.e. that the required
seaworthiness is dependent or reliant on the nature of the voyage.
Vessels • i.e. there will be a different level of seaworthiness for a voyage
from Manila to Corregidor, as to Manila to Korea.
What is the definition of a Vessel? • Sir: The qualifications of the captain and crew are also relative.
1. Those with motive power i.e. that the captain and crew may be competent for the voyage of
2. Means of water transportation Manila-Corregidor, but NOT Manila-Korea.

What are excluded from the ambit of being a vessel?
1. Local and foreign military vessels
2. Bancas and other watercrafts of less than 3 tons gross capacity.
3. Small watercrafts that are engaged in river and bay traffic
Note; Vessels are classified as persona property or ownership which
may be recorded in the registry of property.
What is the warranty of seaworthiness?
1. That the ship is equipped for the voyage and manned with
sufficient number of competent officers and crew.
2. The Shipper/passenger is not required to inquire into the vessel’s
seaworthiness, genuineness of its licenses, and compliance with
maritime laws.
3. The vessel must be seaworthy at the start of the voyage, and the
carrier is not liable if the unseaworthiness occurs later WITH fault
of the shipper or passenger.
• So to be free from liability the ship must be seaworthy from
beginning to end.
In simple terms, what is warranted?
1. Ship is manned by competent captain and crew
2. The passenger or shipper does not have to inquire about:
• Seaworthiness of the vessel
• Licenses
• And compliance with marine laws
3. The vessel is seaworthy at the time of making the voyage, and will
remain seaworthy.
GR: There is a presumption that a vessel is seaworthy.
Santiago Lighterage vs. CA
In this case there was a bareboat charter by Pelaez over M/V Gay
which was owned my Santiago Lighterage. When the boat reached
manila Pelaez found that there were some stuff that were wrong with
it. But Pelaez still went on the voyage from manila to masinloc. While
they were loading the cargo of Pelaez, the crew of Santiago tried to fix
the boat. But eventually they decided that the boat was in no shape to
travel. The result of this was that the customer of Pelaez said that it
would not avail of his services anymore. The cutomer thus sued Pelaez
for the additional expenses that it incurred since Pelaez could not
fulfill its obligation. The Courts awarded the client of pelaez, not
Pelaez wants to claim from Santiago.
Santiago said that it should not be liable since it had given chartered
the boat to Pelaez and he accepted him.
The courts said that the mere transfer of the ship does not constitute a
full performance of its obligation under the bare boat charter, neither
is it considered delivery. The agreement was the transfer of a
seaworthy vessel, in this case there was no transfer of a seaworthy
vessel – so Santiago failed to perform its obligation.
Q: Can pari delicto apply in this case?
A: NO – this is since there is no pari delicto rule when it comes to
seaworthiness. This is since the charter party, the passengers, and the

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shippers are not required to inquire about the seaworthiness of the
vessel.
There are 2 kinds of Seaworthy – the vessel must:
1. Be efficient as in instrument for transportation
2. Be cargoworthy
Cargoworthy – if the vessel is sufficiently strong and equipped to
carry the particular kind of cargo which she has contracted to carry,
and her cargo must be so loaded that it is safe for her to proceed on
her voyage.
Aboitiz vs. New India
The weather was moderate when M/V P. Aboitiz sank. Both the trial
and appellate courts also ruled that the M/V P. Aboitiz sank due to its
unseaworthiness and not due to typhoon. To limit petitioner’s liability
to the amount of the insurance proceeds, it has the burden of showing
that the unseaworthiness of the vessel was not due to its fault or
negligence. But it failed to do so. Where the shipowner fails to
overcome the presumption of negligence, the doctrine of limited
liability cannot be applied.
Ship-owners and Agents
What is a ship agent?
1. He is a person that is entrusted with the vessel
2. May be the representative in the port where the vessel is.
3. Represents the owner in judicial or extrajudicial acts
What may the owners be liable for?
1. Acts and obligations of captain contracted to repair equip and
provision the vessel. (586)
2. Indemnities arising from conduct of the captain in the care of
goods and passengers that are carried by the vessel. (587)
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3. Obligations contracted by the captain even exceeding his powers
and privileges, provided that they are made for the benefit of the
vessel. (588)
4. Damages in case of collision be reason of the fault, negligence,
lack of skill or foresight of the captain or any member of the
complement.
Sir: For all the 4 above, the shipowner and agent are liable. Thus for
example if the captain is not licensed, then the owner and the agent are
liable for damages. But they are not liable all the time and every time.
This is why there is the doctrine of limited liability.
Doctrine of Limited Liability
• Because of the real and hypotechary nature of maritime law,
liability of ship-owners/agents is limited to the value of the vessel,
equipment, and freightage earned during the voyage.
• What this doctrine states is that if there is damage or loss of
property AND death or injury of a passenger, and ONLY the
captain is liable, then the ship owner is Only liable to the extent of
the value of the ship, equipment, and freightage earned during the
voyage.
o BUT if the ship owner was also negligent, then this limited
liability doctrine does not apply.
Ex. The value of the loss of the cargo is 20M, but the value of the
vessel, equipment, and freightage earned is only 10M – the ship owner
will only be liable for 10M.
Right of Abandonment.
• The ship-owner or agent may exempt themselves from liability by
abandoning the vessel, equipment and freight.
o So under the right of abandonment the owner of the ship may
say that he will not pay for any of the losses, or injuries, and
even death, BUT he also loses all rights that he has to any
proceeds from the ship. So he cannot get the value of whatever
may be salvaged of the vessel, the equipment on board, and
freightage that is due him.
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• The creditor cannot refuse the offer of abandonment
o So here the creditor or the person who is claiming from the
ship-owner cannot claim any deficiency.
• This is a notarial act, and it should be done in a public instrument.
• But if the whole ship has completely and totally sank, then there
is no need for the shipper to avail of the right of abandonment.
o So in this case the value of the ship will be almost nothing,
and there is nothing that the creditor or claimant can do about
it.
o That is why you have the term “No Vessel, No Liability”
In this case the shipper will tell the consignee that - here the ship is
yours. And even if the value of the claim of the consignee is MORE
than the value of the abandonment value, he cannot recover more than
what the value is.
When are these doctrines NOT applicable?
1. Where the ship-owners are at fault or concurrently negligent with
the captain.
2. Where the ship-owner/agent allows his vessel to embark in an
unseaworthy condition.
3. Where the vessel is insured
• Because even if the vessel sinks, the claimant may go after the
proceeds of the insurance.
4. In Workmen’s compensation Act.
• Here the shipper will still have to pay for the wages of the
crew.
Macondary vs. Provident
Article 586 of the Code of Commerce states that a ship agent is
“the person entrusted with provisioning or representing the vessel in
the port in which it may be found.” Hence, whether acting as agent of
the owner of the vessel or as agent of the charterer, petitioner will be
considered as the ship agent and may be held liable as such, as long as
the latter is the one that provisions or represents the vessel.
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The trial court found that petitioner “was appointed as local agent of
the vessel, which duty includes arrangement for the entrance and
clearance of the vessel.” Further, the CA found and the evidence
shows that petitioner represented the vessel. The latter prepared the
Notice of Readiness, the Statement of Facts, the Completion Notice,
the Sailing Notice and Custom’s Clearance. Petitioner’s employees
were present at Sangi, Toledo City, one day before the arrival of the
vessel, where they stayed until it departed. They were also present
during the actual discharging of the cargo. Moreover, Mr. de la Cruz,
the representative of petitioner, also prepared for the needs of the
vessel, like money, provision, water and fuel. These acts all point to
the conclusion that it was the entity that represented the vessel in the
Port of Manila and was the ship agent within the meaning and context
of Article 586 of the Code of Commerce.
The Code of Commerce provides:
Article 586. The shipowner and the ship agent shall be civilly liable
for the acts of the captain and for the obligations contracted by the
latter to repair, equip, and provision the vessel, provided the creditor
proves that the amount claimed was invested for the benefit of the
same.”
Article 587. The ship agent shall also be civilly liable for the
indemnities in favor of third persons which may arise from the conduct
of the captain in the care of the goods which he loaded on the vessel;
but he may exempt himself therefrom by abandoning the vessel with
all her equipment’s and the freight it may have earned during the
voyage.”
Heirs of Santos vs. CA
Under this provision, a shipowner or agent has the right of
abandonment; and by necessary implication, his liability is confined
to that which he is entitled as of right to abandon—“the vessel with all
her equipments and the freight it may have earned during the voyage”
(Yangco v. Laserna, et al., 73 Phil. 330, 332). Notwithstanding the
passage of the New Civil Code, Article 587 of the Code of Commerce
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is still good law. The reason lies in the peculiar nature of maritime law
which is “exclusively real and hypothecary that operates to limit such
liability to the value of the vessel, or to the insurance thereon, if any
(Yangco v. Laserna, ibid). As correctly stated by the appellate court,
“(t)his rule is found necessary to offset against the innumerable
hazards and perils of a sea voyage and to encourage shipbuilding and
marine commerce.
Limited liability doctrine of ship’s captain and agent applies to goods
and passengers alike.— Contrary to the petitioners’ supposition, the
limited liability doctrine applies not only to the goods but also in all
cases like death or injury to passengers wherein the shipowner or agent
may properly be held liable for the negligent or illicit acts of the
captain (Yangco v. Laserna, ibid). It must be stressed at this point that
Article 587 speaks only of situations where the fault or negligence is
committed solely by the captain. In cases where the shipowner is
likewise to be blamed, Article 587 does not apply.
Such a situation will be covered by the provisions of the New Civil
Code on Common Carriers. Owing to the nature of their business and
for reasons of public policy, common carriers are tasked to observe
extraordinary diligence in the vigilance over the goods and for the
safety of its passengers (Article 1733, New Civil Code). Further, they
are bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances (Article 1755,
New Civil Code). Whenever death or injury to a passenger occurs,
common carriers are presumed to have been at fault or to have acted
negligently unless they prove that they observed extraordinary
diligence as prescribed by Articles 1733 and 1755 (Article 1756, New
Civil Code)
In this case SC said that the owner was negligent this is since first; it
is plain and clear that there was a typhoon. Technology has advanced
to a point where it would be easy to know if there is a typhoon. The
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owner of the ship also did not put a radar in the ship. Given these, the
owners of the ship cannot invoke the limited liability rule.
Captain/Master
Cool Shit: You call him “Captain” if you are addressing him orally.
You call him “Master” if you are addressing him in writing.
What are the qualifications to be a captain?
1. Filipino Citizen
2. Have the skill and capacity to command and direct a vessel
3. Duly licensed by MARINA
A captain is civilly liable for:
1. Damage to the vessel due to lack of skill/negligence
2. Theft, robberies, mutiny by crew
3. Abuse of power
4. Losses, fines, and confiscation imposed due to violation of laws
and regulations
The defense of Force Majure:
1. The FE must be the proximate and ONLY cause
2. There was due diligence that was exercised to prevent or minimize
the loss.
3. There was no delay
4. There was a protest that was made within 24 hours
Sweet Lines vs. CA
Mechanical defects in the carrier are not considered a caso fortuito
that exempts the carrier from responsibility. Even granting arguendo
that the engine failure was a fortuitous event, it accounted only for the
delay in departure. When the vessel finally left the port of Cebu on
July 10, 1972, there was no longer any force majeure that justified
bypassing a port of call. The vessel was completely repaired the
following day after it was towed back to Cebu. In fact, after docking
at Tacloban City, it left the next day for Manila to complete its voyage.
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The voyage to Catbalogan was “interrupted” by the captain upon
instruction of management. The “interruption” was not due to
fortuitous event or force majeure nor to disability of the vessel. Having
been caused by the captain upon instruction of management, the
passengers’ right to indemnity is evident. The owner of a vessel and
the ship agent shall be civilly liable for the acts of the captain.
Officers and Crew
How is baggage treated?
1. The passenger is considered a shipper insofar as the goods he
carries on board.
GR: The goods that are in the immediate custody (hand carry) of the
passenger, the captain is NOT responsible.
EX: If the damage to the goods of the hand carry are due to the act of
the captain or crew.

Note: An officer must be duly licensed (by BOTH the PRC and
MARINA)

Officers include the FF:

1. Sailing Mate
2. Second Mate
3. Third Mate
4. Marine Engineer

What is a Supercargo?
• In maritime law it is a person that is specially employed by the
owner of cargo to:
o Take charge of and sell merchandise which have been shipped
o To purchase returning cargoes, and
o To receive freight
• As he may be authorized

Passengers

When will the passengers get a refund?

1. If there is a suspension or interruption in the voyage, and it is due
to the fault of the captain, or ship agent.
• In this case the passenger has a right to demand for his fare
2. If the suspension or interruption is due to a FM or FE, ONLY the
return of the fare or part thereof in proportion to the distance
travelled before the interruption.

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DAMAGES AND ACCIDENTS IN MARITIME (b) After hearing of the person present interested in
the cargo.
COMMERCE
Jetsam - unwanted material or goods that have been thrown overboard
Averages
from a ship and washed ashore, especially material that has been
discarded to lighten the vessel.
What are averages?
1. All extraordinary or accidental expenses incurred During voyage
Flotsam - the wreckage of a ship or its cargo found floating on or
for the preservation of the vessel and /or cargo.
washed up by the sea.
2. All damages and deterioration suffered by the vessel from
departure to arrival and by goods from loading to unloading.
Effect of averages:
• All persons with interest in the vessel and cargo saved shall
What are the kinds of averages?
contribute.
1. Simple or Particular
• All expenses and damages caused to vessel or cargo
Example:
o Which have not been incurred to the benefit and common
The total value of the vessel is Php10M, and the values are as follows:
profit of ALL persons interested in the vessel or cargo.
• Who is liable? Vessel = 5M
o The owner of the goods which gave rise to the expense or Cargo 1 = 2M
suffered the damage. Cargo 2 = 2M
2. General or Gross Cargo 3 = 1M
• All the damages and expenses which are deliberately caused
in order to save the vessel and or cargo from a real and known Cargo 3 is jettisoned to lighten the vessel during the storm. Vessel and
risk. Cargos 1 and 2 are saved since Cargo 3 was thrown overboard.
• Requisites/ Requirements/Elements
a. Common danger Thus the contributions of the owner of the vessel and cargo is as
b. The common danger arises from accidents of sea, or follows:
disposition of authority. Note: Value of the Jettison is 1M
c. There is a peril which is imminent and ascertained. Vessel (50%) = 500K
d. Part of the vessel or the cargo is deliberately sacrificed Cargo 1 (20%) = 200K
e. There is successful saving of the vessel or cargo. Cargo 2 (20%) = 200K
f. There are proper legal steps and authority taken. Cargo 3 (10%) = 100K
(1) To incur ezpenses and cause damage of general The 100K is the contribution of cargo 3’s owner.
average, there must be: So just because your cargo was the one that was thrown overboard, it
(a) Resolution of the captain, after deliberations with does not mean that you get the full value back, you still have to share
other officers, and in the average.

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Proper Legal Step and Authority
• To incur expenses and cause damage of general average, there
must be resolution of the captain AFTER deliberations with other
officers and AFTER hearing of the person present interested in
cargo.
Entitlement
1. To be entitles to indemnity of gross average,
• Owner of cargo must prove its existence.
i. This is shown by means of a bill of lading
• Ship-owner must prove the value of the goods
i. This is proven through the inventory list.
2. Claims for averages must exceed 5% of the interest in the cargo
or in the vessel.
Same values as those above, if only a portion of cargo 3, worth 10K is
jettisoned. This is only 1% of the value of the cargo, and thus the
owner is not entitled to indemnity.
American Home Assurance vs. CA
The law of the country to which the goods are to be transported
governs the liability of the common carrier in case of their loss,
destruction or deterioration.” (Article 1753, Civil Code). Thus, for
cargoes transported to the Philippines as in the case at bar, the liability
of the carrier is governed primarily by the Civil Code and in all matters
not regulated by said Code, the rights and obligations of common
carrier shall be governed by the Code of Commerce and by special
laws.
Corollary thereto, the Court held further that under Article 1733 of the
Civil Code, common carriers from the nature of their business and for
reasons of public policy are bound to observe extraordinary diligence
in the vigilance over the goods and for the safety of passengers
transported by them according to all circumstances of each case. Thus,
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under Article 1735 of the same Code, in all cases other than those
mentioned in Article 1734 thereof, the common carrier shall be
presumed to have been at fault or to have acted negligently, unless it
proves that it has observed the extraordinary diligence required by
law.
Common carriers cannot limit their liability for injury or loss of goods
where such injury or loss was caused by its own negligence. Otherwise
stated, the law on averages under the Code of Commerce cannot be
applied in determining liability where there is negligence.
Philippine Home Assurance vs. CA
In our jurisprudence, fire may not be considered a natural
disaster or calamity since it almost always arises from some act of
man or by human means. It cannot be an act of God unless caused
by lightning or a natural disaster or casualty not attributable to
human agency.
On the issue of whether or not respondent court committed an error in
concluding that the expenses incurred in saving the cargo are
considered general average, we rule in the affirmative. As a rule,
general or gross averages include all damages and expenses which are
deliberately caused in order to save the vessel, its cargo, or both at the
same time, from a real and known risk.
While the instant case may technically fall within the purview of the
said provision, the formalities prescribed under Articles 813 and 814
of the Code of Commerce in order to incur the expenses and cause the
damage corresponding to gross average were not complied with.
Consequently, respondent ESLI’s claim for contribution from the
consignees of the cargo at the time of the occurrence of the average
turns to naught. Prescinding from the foregoing premises, it
indubitably follows that the cargo consignees cannot be made liable to
respondent carrier for additional freight and salvage charges.
Consequently, respondent carrier must refund to herein petitioner the
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amount it paid under protest for additional freight and salvage charges
in behalf of the consignees.
Arrival Under Duress
What is arrival under duress?
• Arrival of the vessel at the nearest and most convenient port, when
the captain believes that the vessel cannot continue the voyage to
the port of destination.
• One of the cause of arrival under duress ceases – the captain must
continue the voyage.
o If the captain does not continue the voyage, he will be liable
for damages.
Justifications/ When a ship may be considered in duress:
1. Lack of provisions
• But this should not be due to the negligence or failure to take
necessary provisions.
2. Well-founded fear of seizure of pirates.
• This must be based on positive and justifiable facts.
3. Accident disabling the vessel to navigate.
4. Damage to the vessel NOT caused by malice, negligence, lack of
foresight, or lack of skill of the captain.
Collision/Allision
What is the definition of Collision?
• Collision is the impact of two moving vessels.
• In the event that there is a risk of collision, each vessel must alter
course to starboard (right) so as to pass on the portside (left) of
the other vessel.
What is the definition of Allision?
• Allision is the striking of a moving vessel against a stationary one.
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Liability for Collision or Allision?
1. If collision is due to FE or FM – each vessel and its cargo is liable
for their own damage.
2. If the collision is due to the fault, negligence, lack off skill of the
captain or any member of the vessel’s complement
• The owner of the vessel at fault should be the one that
indemnifies.
3. If BOTH vessels are at fault
• Each shall suffer its own damage
• They are also solidarily liable for losses and damage suffered
by their cargoes.
o So in this case the owner of the vessel is not only liable
for the damage that is caused to the goods in his ship,
rather the sum of the damage from both ships is taken
together, and the vessels are solidarily liable for that
amount.
4. If a vessel causes another vessel to hit or collide with another
vessel
• The owner of the of the causing vessel is liable.
5. Doubtful collision:
• then each vessel and its cargo is liable for their own damage.
Note: The doctrines of LOC, CN, and limited liability does NOT apply
to, or are not applicable to maritime cases.
Suplicio Lines vs. CA
Whether or not the collision sued upon occurred in a crossing situation
is immaterial as the Court of Appeals, relying on Rule 24C,
Regulations for Preventing Collisions at the Sea, ruled that the duty to
keep out of the way remained even if the overtaking vessel cannot
determine with certainty whether she is forward of or aft more than 2
points from the vessel. It is beyond cavil that M/V “Don Sulpicio”
must assume responsibility as it was in a better position to avoid the
collision. It should have blown its horn or given signs to warn the other
vessel that it was to overtake it.
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Shipwrecks
What is the meaning of a shipwreck?
• When a vessel is damaged rendering her unable to navigate.
• When the vessel is lost at sea.
What is the liability when it comes to shipwrecks:
GR: each owner of the cargo shall bear his own loss.
EX: If the stranding was caused by:
1. Malice, negligence, or lack of skill of the captain, or
2. The vessel was insufficiently equipped
In this case the shipps agent and/or shipper may demand indemnity
from the captain.
Condition precedent for the recovery of damages/losses:
1. Maritime protest under oath before a competent authority:
• Where collision took place, or
• Or at first port of arrival.
2. The maritime protest must be filed within 24 hours
Erlanger vs. Sweedish East
Generally salvage may be defined as a service which one person
renders to the owner of a ship or goods by his own labor, preserving
the goods or ship which the owner or those entrusted with the care of
them have either abandoned in distress at sea or are unable to protect
and secure. It is found on the equity of remunerating private and
Individual services performed in saving, in whole or in part, a ship or
its cargo from impending peril, or of recovering them after actual loss.
It is a compensation for actual services rendered to the property
charged with it, and is allowed for meritorious conduct of the salvor
and in consideration of a benefit conferred upon the person whose
property he has saved.
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Three elements are necessary to a valid salvage claim:
(a) A marine peril;
(b) Service voluntarily rendered when not required as an existing duty
or from special contract;
(c) Success, in whole or in part, or that the services rendered
contributed to such success.
A salvor, in the view of the maritime law, has an interest in the
property; this is called a lien, but it never goes, in the absence of a
contract expressly made, upon the idea of a debt due by the owner to
the salvor for services rendered, but upon the principle that the service
creates a property in the thing saved. He is, to all intents and purposes,
a joint owner and if the property is lost lie must bear his share like the
other joint owners.
A "derelict" is defined as "a ship or her cargo which is abandoned and
deserted at sea by those who are in charge of it, without any hope of
recovering it, or without any intention of returning to it." If those in
charge of the property quitted it or left it with the intention of finally
leaving it, it is derelict, and the change of their intention and an attempt
to return will not change its nature.
When a vessel is found at sea, deserted, and has been abandoned by
the master and crew without the intention of returning and resuming
possession, she is, in the sense of the law, derelict, abandoned, and the
finder who takes possession with the intention of saving her gains a
right of possession which he can maintain against the true owner. The
owner does not, indeed, renounce his right of property. This is not
presumed to be his intention, nor does the finder acquire any such
right. But the owner does abandon, temporarily, his right of
possession, which is transferred to the finder who becomes bound to
preserve the property with good faith and bring it to a place of safety
for the owner's use; and lie acquires a right to be paid for his services
a reasonable and proper compensation out of the property itself. He is
not bound to part with the possession until it is paid, or the property is
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taken into the possession of the law preparatory to the amount of

salvage being legally ascertained.

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SPECIAL LAWS IN TRANSPORTATION I
Carriage of Goods by Sea Act
Origin and Purpose
• The COGSA is a US law which was aopted by the RP as CA no
65 to govern the carriage of goods by sea to and from the RP in
foreign trade.
Primary Law
• COGA is the governing law if it is stated in the BOL or similar
document that the contract of carriage is subject to its provisions.
• Note the effect on article 1753 of the NCC.
• So in order for the COGA to be effective there has to be a
stipulation that this is the applicable law. (Similar to INCO)
Bill of Lading
• The BOL is the prima facie evidence of the receipt by the carrier
of the goods as described therein.
• Contrary evidence may be presented.
• Once the BOL is accepted by the consignee, it is PF evidence that
the consignee received the goods in the BOL, in god condition.
o If there is loss or damage, then the consignee must state it in
the BOL – but this is only a general statement of the nature of
the loss.
▪ If the consignee does not do it within the prescribed
period, then it will be presumed that the goods received
were those that were described in the BOL.
Prescriptive Periods
1. If the loss or damage is apparent or external
• Notice in writing must be given to the carrier or agent at the
time of the removal of the goods by the person entitled to
delivery
• This is the same as transportation over land. So the claim must
be filed at the very time of delivery.
TANTOCO
2. If the loss or damage is not apparent
• Within 3 days from delivery
• This is different from transportation over land. This is since
the PP is over land is 24 hours.
3. Whether notice is given or not – the suit must be instituted within
one year: (but parties may stipulate a different period.)
• After delivery
• Or when the goods were supposed to arrive.
Note: Only the carrier’s liability is extinguished if no suit is filed
within 1 year by the shipper, consignee or insurer.
• The PP does not apply to suits by insured against insurer.
4. If there is misdelivery
• Based on Written Contract = 10 years
• Based on QD = 4 years
What is the effect of Notice?
• If no notice is given, there is a prima facie evidence of delivery of
goods according to the BOL.
What is the effect if notice is not given?
• If you do not give notice, then it is presumed that what is delivered
to you is what is described in the BOL.
• So if there is no notice if it is not contested, now the burden of
proof shifts from the carrier to the consignee to prove that there
was damage to the goods.
o This is different from what we have learned since the GR is
that the carrier is presumed to be negligent and is liable for the
loss or damage.
Q: Is notice always needed?
A: NO. notice is not needed if the goods are jointly surveyed or
inspected at the time of their receipt.
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Q: Do you need to file a claim to file a suit for loss, damage,
misdelivery, and non-delivery?
A: NO! the filing of a claim is not a pre requisite/condition
precedent to the filing of a suit for any of these grounds.
• Note: This is different from transportation over land where there
is a difference between miss-delivery and non-delivery and loss
or damage.
o Loss or damage = claim is a pre-requisite to an action
o Misdelivery or Non-Delivery = Claim is NOT a pre-requisite
What is the liability of a shipper under this act?
1. Maximum of $500 per package.
• If it is not shipped per package, then by customary freight unit
– e.x. metric ton of bulk shipment.
• When numerous packages are in one container van, the
container van is NOT a single package, rather the individual
packages remain individual packages – so you get $500 per
package of what is inside the container van.
2. Nature and value of goods may be declared by shipper and
inserted in a BOL
• This declaration is MERELY Prima Facie, and not conclusive
on the carrier.
3. The shipper and carrier may agree on another maximum amount
of damage actually sustained.
• In this case the consignee will state the nature and value of the
goods. This will be met correspondingly by an increase in
freight.
When will there be no liability?
1. If the nature and the value of the goods were knowingly and
fraudulently misstated by the shipper.
2. If the damage resulted from dangerous nature of shipment loaded
without the consent of the carrier
• What is the remedy that during the voyage they discover that
there is dangerous substances?
i. They may offload it – CC will not be liable.
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• What if the CC accepted, then he had a change of heart?
i. He may off load it, and the rest will be liable for the
General Average.
3. If unseaworthiness is not due to the negligence of the carrier
4. If the deviation was to save a life or property at sea
Belgian Over Seas vs. Phil First
Petitioners claim that pursuant to Section 3, paragraph 6 of the
Carriage of Goods by Sea Act (COGSA), respondent should have filed
its Notice of Loss within three days from delivery. They assert that
the cargo was discharged on July 31, 1990, but that respondent filed
its Notice of Claim only on September 18, 1990. We are not
persuaded. First, the above cited provision of COGSA provides that
the notice of claim need not be given if the state of the goods, at the
time of their receipt, has been the subject of a joint inspection or
survey. As stated earlier, prior to unloading the cargo, an Inspection
Report as to the condition of the goods was prepared and signed by
representatives of both parties.
It is to be noted, however, that the Civil Code does not limit the
liability of the common carrier to a fixed amount per package. In all
matters not regulated by the Civil Code, the right and the obligations
of common carriers shall be governed by the Code of Commerce and
special laws. Thus, the COGSA, which is suppletory to the provisions
of the Civil Code, supplements the latter by establishing a statutory
provision limiting the carrier’s liability in the absence of a shipper’s
declaration of a higher value in the bill of lading. The provisions on
limited liability are as much a part of the bill of lading as though
physically in it and as though placed there by agreement of the parties.
In the light of the foregoing, petitioners’ liability should be computed
based on US$500 per package and not on the per metric ton price
declared in the Letter of Credit. This is since the BOL did not state
that there was to be a higher amount. Remember: It is the BOL that
controls.
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Sealand Services vs. IAC
The liability of a common carrier for the loss and damage to the goods
transported by it under a contract of carriage is determined by the
destination of the goods. In this case the destination of the goods was
the PH, so the CC should apply, and suppletorily the COGSA for the
matter which are not determined by the CC.
Nothing contained in section 4(5) of the Carriage of Goods by Sea Act
already quoted is repugnant to or inconsistent with any of the just cited
provisions of the Civil Code. Said section merely gives more flesh and
greater specificity to the rather general terms of Article 1749 (without
doing any violence to the plain intent thereof) and of Article 1750, to
give effect to just agreements limiting carriers' liability for loss or
damages which are freely and fairly entered into.
Wallem Ph vs. S.R. Farms
Under Section 3 (6) of the COGSA, notice of loss or damages must be
filed within three days of delivery. Admittedly, respondent did not
comply with this provision. Under the same provision, however, a
failure to file a notice of claim within three days will not bar recovery
if a suit is nonetheless filed within one year from delivery of the goods
or from the date when the goods should have been delivered.
Mitsui Lines vs. CA
There was no loss because the goods had simply been misdelivered.
“Loss” refers to the deterioration or disappearance of goods. As
defined in the Civil Code and as applied to Section 3(6), paragraph 4
of the Carriage of Goods by Sea Act, “loss” contemplates merely a
situation where no delivery at all was made by the shipper of the goods
because the same had perished, gone out of commerce, or disappeared
in such a way that their existence is unknown or they cannot be
recovered.
Conformably with this concept of what constitutes “loss” or
“damage,” this Court held in another case that the deterioration of
TANTOCO
goods due to delay in their transportation constitutes “loss” or
“damage” within the meaning of §3(6), so that as suit was not brought
within one year the action was barred: Whatever damage or injury is
suffered by the goods while in transit would result in loss or damage
to either the shipper or the consignee. As long as it is claimed,
therefore, as it is done here, that the losses or damages suffered by the
shipper or consignee were due to the arrival of the goods in damaged
or deteriorated condition, the action is still basically one for damage
to the goods, and must be filed within the period of one year from
delivery or receipt, under the above quoted provision of the Carriage
of Goods by Sea Act.
Indeed, what is in issue in this petition is not the liability of petitioner
for its handling of goods as provided by §3(6) of the COGSA, but its
liability under its contract of carriage with private respondent as
covered by laws of more general application. Precisely, the question
before the trial court is not the particular sense of “damages” as it
refers to the physical loss or damage of a shipper’s goods as
specifically covered by §3(6) of COGSA but petitioner’s potential
liability for the damages it has caused in the general sense and, as such,
the matter is governed by the Civil Code, the Code of Commerce and
COGSA, for the breach of its contract of carriage with private
respondent.
• Note: So if you use the COGSA, then you have to file within one
year. If you use the CC, then you have 10 years since it is an action
that is based on a written contract, or 4 years if it is due to fraud.
o So it is important to know under what grounds you may sue.
The pro kasi with suing under the COGSA is that you have
the $500 no questions asked indemnity. Unlike CC where you
will have to prove pa the value.
ICTS vs. Prudential Guarantee
The legal relationship between an arrastre operator and a consignee is
akin to that between a warehouseman and a depositor. As to both the
nature of the functions and the place of their performance, an arrastre
operator’s services are clearly not maritime in character.
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Where the arrastre operator neither rejected nor denied

In a claim for loss filed by a consignee, the burden of proof to show
compliance with the obligation to deliver the goods to the appropriate
party devolves upon the arrastre operator. Since the safekeeping of the
goods rests within its knowledge, it must prove that the losses were
not due to its negligence or that of its employees.
plaintiff’s claim, the same should be deemed constructively denied
or rejected only upon the expiration of one year from the date of
discharge of the last package.
Warsaw/Montreal Convention

We should hasten to add that while a literal reading of the liability
clause makes the time limit run from the moment the shipment is
discharged from the carrying vessel, this Court has chosen to interpret
this condition liberally in an endeavor to promote fairness, equity and
justness. A long line of cases has held that the 15day period for
filing claims should be counted from the date the consignee learns
of the loss, damage or misdelivery of goods. Kasi in the case they
were saying that it should be counted from the time that the arrastre
operator disbursed the goods.
Origin and Purpose
The Warsaw convention was signed by 30 countries in October 1929
to establish a uniform system of rules for international air
transportation of persons, baggage, and goods. This was concurred by
the PH in 1950
The MC introduced amendments on the amounts of liability of CC’s
and compensation for passengers and additional jurisdictional
provision.

What is the Liability of the Carrier?

In any event, within 15 days from the time the loss was discovered,
1. Death and injury to passengers
the consignee could have filed a provisional claim, which would have
• Happening on board the aircraft, or
constituted substantial compliance with the rule. Its failure to do so
• During embarking or disembarking
relieved the arrastre operator of any liability for the nondelivery of the
2. Destruction, loss, or damage to checked baggage or goods
goods. More specifically, the failure to file a provisional claim bars a
• While in the charge of the carrier
subsequent action in court. The rationale behind the time limit is that,
i. This is when the bags are checked in.
without it, a consignee could too easily concoct or fabricate claims and
deprive the arrastre operator of the best opportunity to probe • Wheter on board the aircraft or port
immediately their veracity 3. Damage occasioned by delay.

Note: this contemplates INTERNATIONAL air transportation.

PECO vs. Manila Port
A provisional claim is sufficient even if the value of the goods What defenses are available to the carrier?
involved were not stated therein, if it describes the goods sufficiently 1. Exercise of extraordinary diligence
to permit its identification by the operator and the determination by 2. Impossibility to prevent damage
the latter of the facts relevant thereto, such as the name of the carrying 3. Contributory negligence
vessel, its date of arrival, the corresponding bill of lading,
Amounts under the Warsaw Convention
1. 125 Francs per passenger

TANTOCO Page | 49
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• Unless there is a higher amount that is agreed upon
2. 250 Francs per kilo of checked baggage
• Unless there is a declaration of a higher value and added
payment made.
3. 5,000 Francs per hand carry
Note: The above limits on liability cannot be availed of by the carrier
if it committed willful misconduct.
Q: Can there be a stipulation of lower liability?
A: NO! Any stipulation to lower the above limits or to exempt from
liability is VOID.
Two Tier System under the Montreal Convention
1. Air carriers are strictly liable for proven damaged up to 113,100
SDR (special drawing rights, which is around $138K).
• There is no defense for them to escape the payment of this.
o So as long as you prove that there is damage, then the air
carrier will be liable.
• As long as the claim is 113,100 SDR and below, the air carrier
is automatically liable.
2. Where the damages that are sought to be recovered are more than
113,100 SDR
• The carrier may avail of the defense that the accident causing
injury or death was not due to its negligence but to that of a
third party.
Here it is up to the passengers to decide what to do.
Prescriptive Periods (When notice should be given)
1. DAMAGE
• A written complaint:
i. 3 days from receipt of baggage, and
ii. 7 days from receipt of goods
2. DELAY
• 14 days from the delivery of goods or baggage
TANTOCO
GR: No action will lie if case there is no complaint/notice given
despite the lapse of the period
EX: Fraud
Note: the action must be filed within 2 years from the:
• Date of arrival or
• When ought to arrive
• Or when transportation stopped
Note: For air transportation the prescriptive period to file a case is 2
YEARS. This is different from carriage of goods over land and by sea.
Jurisdiction
Plaintiff has the option to file ACTION for damages:
1. Domicile of the carrier
2. Principal place of business of the carrier
3. Where the carrier has business though which contact has been
made
4. Pace of destination
5. Residence of the Passenger (MC, because 1-4 WC)
Note, when it comes to the adaptation of the MC, we have ratified it,
BUT we have 2 reservations:
1. Contents shall not apply to international carriage by air performed
and operated directly by the Philippines for non-commercial
purposes in respect of its official functions and duties as a
sovereign state.
2. Carriage or persons, cargo, and baggage for its military authorities
on aircraft registered in or leased by the Philippines, the whole
capacity of which has been reserved by or on behalf of such
authorities.
AA vs CA
Warsaw convention applies to all AIR international transportations:
1. Of persons
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2. Baggage of goods
It also does not matter of it is performed gratuitously or for hire.
The contract of carriage between the private respondent and Singapore
Airlines although performed by different carriers under a series of
airline tickets, including that issued by the petitioner, constitutes a
single operation. Members of the IATA are under a general pool
partnership agreement wherein they act as agent of each other in the
issuance of tickets to contracted passengers to boost ticket sales
worldwide and at the same time provide passengers easy access to
airlines which are otherwise inaccessible in some parts of the world.
A member airline which enters into a contract of carriage consisting
of a series of trips to be performed by different carriers is authorized
to receive the fare for the whole trip and through the required process
of interline settlement of accounts by way of the IATA clearing house
an airline is duly compensated for the segment of the trip serviced.
Thus, when the petitioner accepted the unused portion of the
conjunction tickets, entered it in the IATA clearing house and
undertook to transport the private respondent over the route covered
by the unused portion of the conjunction tickets, i.e., Geneva to New
York, the petitioner tacitly recognized its commitment under the IATA
pool arrangement to act as agent of the principal contracting airline,
Singapore Airlines, as to the segment of the trip the petitioner agreed
to undertake. As such, the petitioner thereby assumed the obligation
to take the place of the carrier originally designated in the original
conjunction ticket. The petitioner’s argument that it is not a designated
carrier in the original conjunction tickets and that it issued its own
ticket is not decisive of its liability. The new ticket was simply a
replacement for the unused portion of the conjunction ticket, both
tickets being for the same amount of US$ 2,760 and having the same
points of departure and destination. By constituting itself as an agent
of the principal carrier the petitioner’s undertaking should be taken as
part of a single operation under the contract of carriage executed by
the private respondent and Singapore Airlines in Manila.
TANTOCO
The quoted provision of the Warsaw Convention Art. 1(3) clearly
states that a contract of air transportation is taken as a single operation
whether it is founded on a single contract or a series of contracts.
The number of tickets issued does not detract from the oneness of the
contract of carriage as long as the parties regard the contract as a single
operation. The evident purpose underlying this Article is to promote
international air travel by facilitating the procurement of a series of
contracts for air transportation through a single principal and
obligating different airlines to be bound by one contract of
transportation. Petitioner’s acquiescence to take the place of the
original designated carrier binds it under the contract of carriage
entered into by the private respondent and Singapore Airlines in
Manila.
PAL vs. Savillo
It employs a scheme of strict liability favoring passengers and
imposing damage caps to benefit air carriers. The cardinal purpose of
the Warsaw Convention is to provide uniformity of rules governing
claims arising from international air travel; thus, it precludes a
passenger from maintaining an action for personal injury damages
under local law when his or her claim does not satisfy the conditions
of liability under the Convention
Article 19 of the Warsaw Convention provides for liability on the part
of a carrier for “damages occasioned by delay in the transportation by
air of passengers, baggage or goods.” Article 24 excludes other
remedies by further providing that “(1) in the cases covered by articles
18 and 19, any action for damages, however founded, can only be
brought subject to the conditions and limits set out in this convention.”
Therefore, a claim covered by the Warsaw Convention can no longer
be recovered under local law, if the statute of limitations of two years
has already lapsed.
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This Court notes that jurisprudence in the Philippines and the United
States also recognizes that the Warsaw Convention does not
“exclusively regulate” the relationship between passenger and carrier
on an international flight. This Court finds that the present case is
substantially similar to cases in which the damages sought were
considered to be outside the coverage of the Warsaw Convention.
Sir: death or injury – then you apply the Warsaw convention, if it is
NOT about death or injury then you use the CC (i.e. actions for torts).
NWA vs. CA
In this case NWA submitted for summary judgement that the
maximum that is given by section 22 of the warsaw convention should
apply. The SC said that in doing this NWA admitted arguendo that the
guns were lost.
We, however, agree with both the trial court and the Court of Appeals
that NORTHWEST’s liability for actual damages may not be limited
to that prescribed in Section 22(2) of the Warsaw Convention. In
Alitalia v. Intermediate Appellate Court, we held: The Warsaw
Convention does not operate as an exclusive enumeration of the
instances of an airline’s liability, or as an absolute limit of the
extent of that liability. Such a proposition is not borne out by the
language of the Convention, as this Court has now, and at an earlier
time, pointed out.
The Warsaw convention should be deemed a limit of liability only in
those cases where the cause of the death or injury to person, or
destruction, loss or damage to property or delay in its transport is not
attributable 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. The Convention’s
provisions, in short, do not “regulate or exclude liability for other
TANTOCO
breaches of contract by the carrier” or misconduct of its officers and
employees, or for some particular or exceptional type of damage.
United Airlines vs. Uy
Within our jurisdiction we have held that the Warsaw Convention can
be applied, or ignored, depending on the peculiar facts presented by
each case. Thus, we have ruled that the Convention’s provisions do
not regulate or exclude liability for other breaches of contract by the
carrier or misconduct of its officers and employees, or for some
particular or exceptional type of damage. Neither may the Convention
be invoked to justify the disregard of some extraordinary sort of
damage resulting to a passenger and preclude recovery therefor
beyond the limits set by said Convention. Likewise, we have held that
the Convention does not preclude the operation of the Civil Code and
other pertinent laws. It does not regulate, much less exempt, the carrier
from liability for damages for violating the rights of its passengers
under the contract of carriage, especially if willful misconduct on the
part of the carrier’s employees is found or established.
Respondent’s complaint reveals that he is suing on two (2) causes of
action: (a) the shabby and humiliating treatment he received from
petitioner’s employees at the San Francisco Airport which caused him
extreme embarrassment and social humiliation; and, (b) the slashing
of his luggage and the loss of his personal effects amounting to US
$5,310.00. While his second cause of action—an action for damages
arising from theft or damage to property or
goods—is well within the bounds of the Warsaw Convention, his first
cause of action—an action for damages arising from the misconduct
of the airline employees and the violation of respondent’s rights as
passenger—clearly is not.
As for respondent’s second cause of action, indeed the travaux
preparatories of the Warsaw Convention reveal that the delegates
thereto intended the two (2)year limitation incorporated in Art. 29 as
an absolute bar to suit and not to be made subject to the various tolling
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provisions of the laws of the forum. This therefore forecloses the

application of our own rules on interruption of prescriptive periods.
Article 29, par. (2), was intended only to let local laws determine
whether an action had been commenced within the two (2)year period,
and within our jurisdiction an action shall be deemed commenced
upon the filing of a complaint. Since it is indisputable that respondent
filed the present action beyond the two (2)year time frame his second
cause of action must be barred. Nonetheless, it cannot be doubted that
respondent exerted efforts to immediately convey his loss to
petitioner, even employed the services of two (2) lawyers to follow up
his claims, and that the filing of the action itself was delayed because
of petitioner’s evasion.
In the same vein must we rule upon the circumstances brought before
us. Verily, respondent filed his complaint more than two (2) years
later, beyond the period of limitation prescribed by the Warsaw
Convention for filing a claim for damages. However, it is obvious that
respondent was forestalled from immediately filing an action because
petitioner airline gave him the runaround, answering his letters but not
giving in to his demands. True, respondent should have already filed
an action at the first instance when his claims were denied by
petitioner but the same could only be due to his desire to make an out
of court settlement for which he cannot be faulted. Hence, despite the
express mandate of Art. 29 of the Warsaw Convention that an action
for damages should be filed within two (2) years from the arrival at
the place of destination, such rule shall not be applied in the instant
case because of the delaying tactics employed by petitioner airline
itself. Thus, private respondent’s second cause of action cannot be
considered as time barred under Art. 29 of the Warsaw Convention.
We, therefore, reject Lufthansa’s theory that from the time another
carrier was engaged to transport Antiporda on another segment of his
trip, it merely acted as a ticket issuing agent in behalf of said carrier.
In the very nature of their contract, Lufthansa is clearly the principal
in the contract of carriage with Antiporda and remains to be so,
regardless of those instances when actual carriage was to be performed
by various carriers. The issuance of a confirmed Lufthansa ticket in
favor of Antiporda covering his entire five leg trip aboard successive
carriers concretely attests to this. This also serves as proof that
Lufthansa, in effect guaranteed that the successive carriers, such as Air
Kenya would honor his ticket; assure him of a space therein and
transport him on a particular segment of his trip.
Section 2, Article 30 of the Warsaw Convention which does not
contemplate the instance of “bumping off” but merely of simple delay,
cannot provide a handy excuse for Lufthansa as to exculpate it from
any liability to Antiporda. The payment of damages is, thus, deemed
warranted by this Court. We find no reversible error in the lower
court’s award of moral and exemplary damages, including attorney’s
fees in favor of Antiporda.

Lufthansa vs. CA
In light of the stipulations expressly specified in the ticket defining the
true nature of its contract of carriage with Antiporda, Lufthansa cannot
claim that its liability thereon ceased at Bombay Airport and thence,
shifted to the various carriers that assumed the actual task of
transporting said private respondent.

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BILL OF RIGHTS OF AIR PASSENGERS • What must the disclosure BEFORE the purchase of the ticket
contain?
Joint DOTC-DTI Administrative Order i. Documents that are required at check in
ii. Check-in deadlines
Scope of AO iii. Baggage Allowance
The rules apply to: iv. Refund and Rebooking Policies
• All aspects of contracts of carriage for flights or portion of a flight, v. Procedures and responsibility for delayed and/or
Into, From, Within: cancelled flights.
o The territory of the Philippines operated by the Philippine air • The terms may include:
carriers i. Liability limitations
o And flights or portions of a flight FROM the territory of the ii. Claim filing deadlines
Philippines operated by foreign air carriers. iii. And other terms and conditions
• The compensation rules do not apply to foreign air carriers • The disclosure shall be:
flying INTO the territory of the Philippines if the laws of the i. Printed on the ticket and/or boarding pass,
country of origin provide SIMILAR or HIGHER compensation. ii. On the carrier’s website
2. Right to clear and non-misleading advertisements of, and
Rights of Air Passengers important reminders regarding the fare
1. Rights to be provided with accurate information before the • Major restrictions such as those on rebokability in case of non-
purchase of the service use of the ticket, shall be disclosed fully and clearly.
2. Rights to receive the full value of the service purchased 3. Right against misleading and fraudulent sales promotions and
3. Right to compensation without delay practices.
• All sales promotion campaigns and activities shall be carried
Penalty for violations by carrier: out with honesty, transparency and fairness.
1. Violation of the order is penalized in accordance with the Civil • Copies of promotional materials shall be provided to the DTI
Aeronautics Act of the Philippines. for post audit.
2. Violation of Section 4 is ground for denial of application for or
suspension/recall of approval of, promo rates/advertised fares. Right to Full Value:
3. Violation of Sections 5 and 6 are governed by the Consumer Act
of the Philippines. What is in the right to Full value of Air Passengers?
1. Right to transportation and baggage conveyance and ancillary
Right to Information services, in accordance with the terms and conditions of the
contract.
What is in the right to information of Air Passengers? • Any violation of the terms and conditions due to the
1. Right to full value and clear disclosure of the service and all terms negligence of the carrier shall entitle the passenger to
and conditions of the contract of carriage. compensation or other acceptable arrangement.

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2. Right to be processed for check-in within the check in deadline
when the passenger has confirmed the ticket with complete
documents and has complied with the check-in procedure.
• A passenger within the designated check in area 1 hour before
the ETD shall not be considered late or a no show, and thus
has a right to be checked in.
• Any dispute shall be resolved by the carrier with proofs, such
as CCTV recordings, and other available means.
3. Right to sufficient processing time for check-in
• 2 hours in international airports, and 1 hour in other airports.
4. Right to board air craft for the flight, except when denial has legal
or valid cause – such as immigration, safety and security, health
concerns, or government requisition of space.
What happens if there is overbooking?
• In case of overbooking, the government requisition carrier shall
look for volunteers to give up their shares in exchange for proper
incentives, compensation, amenities which, if need be, shall be
increased.
• The carrier shall also do the same when the government
requisition results in the passengers having to forego their
confirmed space.
o The air carrier will now have a right to a refund from the
government for the full value of the requisitioned seats.
New Guidelines:
1. You cannot overbook during peak season
2. You cannot change the size of the seats
Right to compensation
What is in the right to compensation of Air Passengers?
1. Right to compensation and amenities in case of flight cancellation
• These include:
i. Prior notification of cancellation
ii. Sufficient refreshment or meals
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iii. Hotel accomodations
iv. Transportation to the hotel
v. Reimbursement of the value of the fareif passengers
decides not to fly
vi. Endorsement to another carrier without paying fare
difference
vii. Rebooking of the ticket without any additional charge.
• BUT NOTE: If cancellation is done 24 HOURS BEFORE
THE ETD only the FF are required:
i. Notification
ii. Rebooking or reimbursement
• NOTE 2: If cancellation is due to FORCE MAJURE,
SAFETY OR SECURITY CONCERNS, CERTIFIED BY
THE CAAP
i. At least reimbursement of the full fare
2. Right to compensation and amenities in case of flight delay
• In case of terminal delay of 3 hours after the ETD he shall
be provided with: (contemplates that passenger is in the
airport)
i. Meals and refreshments,
ii. Free phone calls,
iii. Text or emails,
iv. Rebooking – without any additional charge
v. Reimbursement of the full value of the fare
vi. Endorsement to another airline without paying the fare
difference
• In case of tarmac delay of 2 hours AFTER ETD
(contemplates that passenger is on the airplane):
i. Food and beverages shall be provided.
3. In case of OVERBOOKING AND THE PASSENGER
ACCEPTS COMPENSATION UNDER SECTION 10:
• This shall constitute liquidated damages for the carrier’s
failure to provide a confirmed seat.
4. In cases of delayed, lost and damaged baggage:
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• Baggage shall be on the same flight taken by the passenger,

subject to considerations of safety, security, or other valid
cause.
• The passenger shall be informed of soonest of offloading and
reasons therefor
• Baggage shall be carried on the next flight available and
delivered to him.
5. Right to compensation in case of death or bodily injury
• For International – Montreal Convention
• Domestic – MC, but converted into peso
6. Right to immediate payment of compensation
• Checks, cash or documents convertible to cash shall be
tendered at the air carriers counter at the airport on the date
when the occasion entitling passenger occurred.
7. Right to refund of other fees, if any, such as checked baggage fees
and other optional service fees, when passenger was not at fault
and did not sue the ticket that is refundable.

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SPECIAL LAWS IN TRANSPORTATION II

What is the purpose of the mortgage?
Salvage Law • To finance the construction, acquisition, purchase pf vessel or the
Definitions initial inspection thereof.
1. Service rendered to preserve the gods or ship which the owner has
either abandoned in distress at sea or is unable to protect or secure What are the conditions for the mortgage to be preferred?
2. Compensation to one by whose assistance a ship or its cargo has 1. Mortgage has to registered with the Philippine Coast Guard
been saved from impeding danger or recovered from actual loss. 2. Affidavit of good faith
3. Vessel or cargo recovered from abandonment at sea 3. No waiver of preferred status.

Elements of a valid salvage: The Preferred mortgage has priority over ALL claims against the
1. Marine Peril vessel. EXCEPT:
2. Voluntary Service 1. Taxes, crew’s wages, general average, salvage, damages arising
3. Success in whole and in part out of torts
2. Preferred mortgage registered prior in time
When a vessel is saved by the salvor, the salvor does not own the 3. Maritime Lien arising prior to registration of preferred mortgage
vessel, rather he has to bring it to the nearest port, and there will be
notice that the vessel has been rescued What is a maritime lien for necessities?
• If the owner appears, then the owner has to pay the salvor • Any person furnishing repairs, supplies, tonnage, use of dry dock
• If the owner does not appear, it will be sold, and and the proceeds or other necessities to any vessel upon the order of its owner or
divided the latter’s authorized representatives shall have a maritime lien
o 50 to the salvor on the vessel which may be enforced by a suit in rem and it shall
o 25 to the captain be necessary to allege or prove that credit was given to allege or
o 25 to the crew – in proportion to their salary. prove that credit was given to the vessel.

Ship Mortgage Decree ARREST OF VESSEL – this is when the owner of the ship cannot pay
2 kinds of lien on ships: the mortgage, the competent authorities will seize the vessel and make
1. Mortgage lien sure that the vessel cannot go on a voyage until the mortgagee is paid,
• To acquire the vessel or if unable to pay, then the boat will be sold and the proceeds used to
2. Maritime lien pay the mortgagee.
• To provision the vessel
Foreign Ships Co-Loading Act
Note: the mortgage has to be registered with the Philippine Coast Definition:
Guard • Cabotage refers to transit of a vessel along the coast of a country
of for the purpose of trade from one port to another within the
territorial limits of that country.

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• Prior to RA 10668, foreign vessels have to load ang unload in

manila ports. They may enter costwise ports, but with special
permit from MARINA.

Under the new law a foreign vessel:

1. Arriving from a foreign port, may carry foreign cargo to
Philippine port of final destination after being cleared at its port
of entry
2. Arriving from a foreign port, may carry foreign cargo by another
foreign vessel calling at the same port of final destination of such
foreign cargo.
3. Departing from a Philipine Port to its foreign port of final
destination, may carry foreign cargo intended for export.
4. Departing from a Philippine port of origin, may carry foreign
cargo intended for export.
5. An empty foreign container van going to or coming from any
Philippine port or foreign port, and being transshipped between
two Philippine Ports is allowed.

Land Transportation Traffic Code

1. A motor vehicle must be registered for the current year, as a
condition for its operation on a public road or highway.
2. Mortgage, attachment or other encumbrances on a motor vehicle
must be registered and recorded on the face of the certificate of
registration.
3. A person can still drive a vehicle even without possessing his
driver’s license albeit he may still be violating traffic rules.
4. A person driving with an expired and unrenewed driver’s license
is deemed not to have any license at all.
5. Insurance requires an “authorized driver” who is wither the
insured of a person driving on the insured’s order or with his
permission, provided he abides with licensing rules.
• A driver with an expired traffic violation receipt or temporary
operation permit is NOT an quthorized driver within the
meaning of the insurance policy.

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CONTRACTS IN MARITIME COMMERCE (A)

Jurisprudence and BOL’s
Bill Of Lading 1. A bill of lading when properly executed and delivered to a shipper
is evidence that the carrier received the goods described there in
What is a bill of Lading? for shipment.
• It is a written acknowledgement of the: 2. Acceptance of the BOL without dissent raises the presumption
o Receipt of the goods, their quantity and condition, and that all terms therein were brought to the knowledge of the shipper
o An agreement to transport and deliver them at a specific place and agreed to by him.
o To a person named therein or to his order. • And in the absence of fraud or mistake he is estopped from
• It is signed by the captain and the shipper, and furnished to the denying that he assented to such terms.
consignee. 3. A bill of lading is an actionable document, which must be properly
pleaded, and the genuineness and due execution thereof are
What are the functions of the BOL? deemed admitted UNLESS denied by the adverse party.
1. Receipt for the goods • So this means that the BOL must be verified.
2. Contract of carriage
3. A document of title

Kinds of BOL
1. Negotiable
• Goods to be delivered to the bearer or to the order of the
person named.
2. Non-negotiable
• Goods to be delivered to the persons named
3. Clean
• Goods received in good condition and/or correct quantity
4. Foul
• Goods received in bad condition and/or short quantity
5. Through
• Issued by the first carrier and honored by successive carriers.
• This contemplates that there are multi-carriers.
6. On Board
• Goods received on board the vessel which will transport the
goods
7. Received Shipment
• Goods received for shipment with or without specifying the
vessel which will transport the goods.

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