Professional Documents
Culture Documents
April Lynn L. Ursal: First Philippine Industrial Corp. vs. CA) Case: Jose Mendoza vs. Philippine Airlines Inc
April Lynn L. Ursal: First Philippine Industrial Corp. vs. CA) Case: Jose Mendoza vs. Philippine Airlines Inc
Shipper – the person who delivers the goods to the carrier for transportation; Q: What is the effect of charter party?
pays the consideration or on whose behalf payment is made A: It may transform a common carrier into a private carrier. However, it must be
a bareboat or demise charter where the charterer mans the vessel with his own
Consignee – person to whom the goods are to be delivered. May be the shipper people and becomes, in effect, the owner for the voyage or service stipulated
himself or a third person who is not actually a party to the contract
2 types:
Perfection:
> contract to carry goods – consensual 1. Contract of Affreightment
> contract of carriage - act of delivery of goods ( goods are unconditionally
placed in the possession and control of the carrier and upon their receipt by the - involves the use of shipping space on vessels leased by
carrier for transportation) the owner in part or as a whole, to carry goods for
another
CARRIER: - CC = observe extraordinary diligence; in case of loss,
Common carriers (CC) (1732) deterioration or destruction of goods of goods, CCs are
– persons, corporations, firms or associations engaged in the business presumed to be at fault or have acted negligently
of carrying or transporting passengers or goods or both, by land, - 2 types
water, or air, for compensation, offering their services to the public. 1..i. Time charter: vessel is leased to the charterer
(NOT the means of transportation) for a fixed period of time
– one that holds itself out as ready to engage in the transportation of 1..ii. Voyage charter: ship is leased for a single
goods for hire as a public employment and not as a casual voyage
occupation.
Tests for determining WON a party is a common carrier of goods: 2. Charter by demise/ Bareboat Charter
- PC = undertaking is a single transaction, not a part of the COMMON CARRIERS vs. TOWAGE, ARRASTRE AND STEVEDORING
general business or occupation, although involving the
carriage of goods for a fee; NO presumption of negligence Towage
applies – whosoever alleges damage to or deterioration of
the goods carried has the burden of proving that the - A vessel is hired to bring another vessel to another place
cause was the negligence of the carrier. - e.g. a tugboat may be hired by CC to bring the vessel to a port
(operator of tugboat not CC)
Distinction between Common Carriers and Private Carriers - in maritime law: towing for the mere purpose of expediting her
COMMON CARRIER PRIVATE CARRIER voyage without reference to any circumstances of danger
Extraordinary diligence in the Ordinary diligence in the carriage of Arrastre
vigilance over the goods they carry goods will suffice
In case of loss, destruction, or No such presumption applies to - Arrastre operator’s functions has nothing to do with the trade and
deterioration of goods, they are private carriers, for whosoever alleges business of navigation nor to the use or operation of vessels
presumed to have been at fault or to damage to or deterioration n of the - Services are not maritime
have acted negligently; burden of goods carried has the onus of proving
proving otherwise rests on them that the cause was the negligence of
- Functions of arrastre operator:
the carrier o Receive, handle, care for, and deliver all merchandise
Cannot stipulate that it is exempt May validly enter into such stipulation imported and exported, upon or passing over
from liability for the negligence of its Government-owned wharves and piers in the port
agents or employees o Record or check all merchandise which may be delivered
to said port ant shipside
Factors to be considered whether a carrier is common/private: o Furnish light, and water services and other incidental
Law applicable
service in order to undertake its arrastre service
- Such service is in face, no different from those of a depositary or
o Common Civil Code warehouseman
Stevedoring
o Private contract
- involves the loading and unloading of coastwise vessels calling at the
port.
Diligence required >>> Common carriers are public utilities, impressed with public interest and
o Common extraordinary diligence concern subject to regulation by the state.
o Private diligence of a good father of a family
Burden of proof in relation to negligence
GOVERNING LAWS
Note: read page 72 of book for other provisions. Effects of ‘delayed and unfinished voyage’ in inter-island vessels:
vessel cannot continue or complete her voyage for any cause –
(1) Abandonment carrier is under obligation to transport the passenger to his/her
- In case of delay through the fault of the carrier, the consignee may destination at the expense of the carrier including free meals and
refuse to accept the goods or may leave the goods in the hands of lodging before the passenger is transported to his/her destination;
the carrier. It must be communicated to the carrier in writing. the passenger may opt to have his/her ticket refunded in full if the
cause of the unfinished voyage is due to the negligence of the carrier
- This right must be exercised between the time of delay and before
or to an amount that will suffice to defray transportation cost at the
the arrival of the goods at its destination.
shortest possible route if the cause of the unfinished voyage is
- The carrier must pay the full value of the goods as if they had been fortuitous event.
lost or mislaid.
vessel is delayed in arrival at the port of destination – free meals
Note: If abandonment is not made, indemnification for the losses and damages during mealtime
by reason of the delay cannot exceed the current price which the goods would delay in departure at the point of origin due to carrier’s negligence;
have on the day and at the place they are to be delivered. fortuitous event - free meals during mealtime; carrier not obliged to
serve free meals
The value of the goods which the carrier must pay in case of loss or
misplacement shall be that what is declared in the bill of lading.
carrier is not obliged to inform passengers of sailing schedule of the
vessel
Consignee must not defer the payment of the expenses and transportation
charges of the goods otherwise carrier may demand the judicial sale of the C. DUTY TO EXERCISE EXTRAORDINARY DILIGENCE
goods. - Goods should be delivered in the same condition that
they were received and to transport the passengers without
encountering any harm or loss.
Case: Magellan Mfg. Marketing Corp. vs. CA - Read page 79-80 for provisions
- Abandonment may also be made by virtue of stipulation or ARTICLE 1755. A common carrier is bound to carry the passengers safely as far
agreement between parties as human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances. (Civil Code)
(2) Rights of Passengers in Case of Delay
- As to the rights and duties of the parties strictly arising out of delay, - Presumption of Negligence
the Civil Code is silent. However, the Code of Commerce provides for
such a situation: - Two conditions for the birth of the presumption of negligence:
1. there exists a contract between the passenger or the shipper and the
ARTICLE 698. In case a voyage already begun should be interrupted, the common carrier
passengers shall be obliged to pay the fare in proportion to the distance 2. the loss, deterioration, injury or death took place during the
covered, without right to recover for losses and damages if the interruption is existence of the contract
due to fortuitous event of force majeure, but with a right to indemnity if the
interruption should have been caused by the captain exclusively. If the Doctrine of Proximate Cause – there is presumption of negligence
interruption should be caused by the disability of the vessel and a passenger If the goods are lost, destroyed or deteriorated, common carriers are presumed
should agree to await the repairs, he may not be required to pay any increased to have acted negligently, unless they prove that they observed extraordinary
price of passage, but his living expenses during the stay shall be for his own diligence. In case of death of or injuries to passengers, common carriers are
account. presumed to have been at fault or to have acted negligently, unless they prove
Note: the carrier is liable for any loss or damage, including any pecuniary loss or that they observed extraordinary diligence.
loss of profit, which the passenger may have suffered by reason thereof.
In case the vessel is not able to depart on time and the delay is unreasonable, - Duration of Duty:
the passenger may opt to have his/her ticket immediately refunded without any
refund service fee from the authorized issuing/ticketing office. (1) Carriage of Goods
- Due diligence should be exercised the moment the
Where and to Whom Delivered goods are delivered to the carrier.
* A proper person who enters upon the carrier’s premises (station, ticketing Note: Since common carrier is presumed is to be negligent, it has been observed
office, or waiting room) with the intention of becoming a passenger will that the DOCTRINE of PROXIMATE CAUSE is INAPPLICABLE to a contract of
ordinarily be viewed as assuming the status of a passenger. carriage. The injured passenger or owner of goods need not prove causation to
establish his case.
* One who goes to the railroad station to inquire as to the possibility of securing
passage on a freight train, which he knows, by the rules of the company, is not The absence of causal connection is only a matter of defense.
allowed to carry passengers, and to secure passage thereon if possible, is not
entitled to the rights of a passenger but is a mere trespasser. Requisites of Fortuitous Event:
1. The cause of the unforeseen and the unexpected
* One who rides upon any part of the vehicle or conveyance which is unsuitable occurrence, or of the failure of the debtor to comply with his obligation,
or dangerous, or which he knows is not intended for passengers, is not must be independent of the human will
presumed to be a passenger.
2. It must be impossible to foresee the event which
* One who secures free passage by fraud or stealth is precluded from recovery constitutes the caso fortuito, or if it can be foreseen, it must be
for injuries sustained through the negligence of the carrier, for he has not impossible to avoid
assumed the status of a passenger. 3. The occurrence must be such as to render it impossible
for the debtor to fulfill his obligation in a normal manner
* A person riding on a freight train, on a driver’s pass or similar arrangement, to
look after livestock being transported and as incident to such transportation is,
4. The obligor (debtor) must be free from any participation
in or the aggravation of the injury resulting to the creditor
generally regarded as a passenger for hire.
In order for the common carrier to be exempted from responsibility, the natural
Motor vehicles like jeepneys and buses – are duty bound to stop their
disaster must have been the proximate and only cause of the loss. However, the
conveyances for a reasonable length of time in order to afford passengers an
common carrier must exercise due diligence to prevent or minimize loss before,
opportunity to board and enter, and they are liable for injuries suffered by
during and after the occurrence of flood, storm or other natural disaster in
boarding passengers resulting from the sudden starting up or jerking of their
order that the common carrier may be exempted from liability for the loss,
conveyances while they do so. Once a public utility bus or jeepney stops, it is
destruction, or deterioration of the goods.
making a continuous offer to bus riders.
Fire – not considered as a natural calamity or disaster
Case: Dangwa Transportation Company vs. CA
- When the bus is not in motion there is no necessity for a person who Fire caused by lightning – a natural calamity
wants to ride the same to signal his intention to board. A public utility
bus, once it stops, is in effect making a continuous offer to bus riders Hijacking – does not fall under the categories of exempting causes; the common
- The premature acceleration of the bus in this case was a breach of carrier is presumed to be at fault or to have acted negligently unless there is a
such duty proof of extraordinary diligence on its part
(a) There have been incidents of throwing of stones at passing Case: Franklin Gacal vs. PAL
vehicles in the North Express Way. While the bus was traversing - It is therefore not enough that the event should not have been
the super highway, a stone hurled from the overpass and hit foreseen or anticipated, as is commonly believed, but it must be one
the passenger resulting to injuries. Can the passenger hold the impossible to foresee or to avoid.
bus liable for damages?
Answer: Yes. The incident was foreseeable due the prior
- The mere difficulty to foresee the happening is not the impossibility
to foresee the same
incidents of stone hurling. The bus should have exercised
utmost diligence and employed adequate precautionary
PUBLIC ENEMY
measures to secure safety of passengers since the incident was
foreseeable. .
HOWEVER, if the stone throwing was entirely unforeseeable - Presupposes a state of war and refers to the government of a foreign
and the carrier exercised the utmost diligence, then, the bus nation at war with the country to which the carrier belongs, though not
can’t be held liable. necessarily with that to which the owner of the goods owes allegiance.
Nonetheless, the burden of proof is on the carrier to prove such - Thieves, rioter, and insurrectionists are not included. They are merely
exercise of diligence. It is up to the carrier to overthrow the private depredators for whose acts a carrier is answerable.
presumption of negligence. - Rebels in insurrection against their own government are generally not
If the passenger decides to file a case, al the passenger has to embraced in the definition of public enemy. However, if the rebels hold a
do is to prove that she was a passenger of the bus and that she portion of territory, they have declared their impendence, cast off their
suffered injuries while on board the bus. allegiance and has organized armed hostility to the government, and the
authority of the latter is at the time overthrown, such an uprising may take
(b) Supposing that there were armed men who staged a hold-up on the dignity of a civil war, and so matured and magnified, the parties are
while the bus was speeding along the highway. One of them belligerent and are entitled to belligerent rights.
Art. 1743. If through the order of public authority the goods are - Negligence of the carrier need not be the sole cause of the damage
or injury to the passenger or the goods. The carrier would still be
seized or destroyed, the common carrier is not responsible, provided said
liable even if the contractual breach concurs with the negligent act or
public authority had power to issue order.
omission of another person.
Cases:
Remember: the negligence of the other driver in a collision is NOT a
1. Carrier was not excused from liability since the order of an acting prejudicial question to an action against the carrier’s company.
mayor was not considered as a valid order of a public authority. It is
required that public authority who issued the order must be duly Article 1759. Common carriers are liable for the death of or injuries to
authorized to issue the order. passenger through the negligence or willful acts of the former’s employees,
2. Carriage of Goods by Sea Act – provides that carrier shall not although such employees may have acted beyond the scope of their authority
responsible for loss or damage resulting from “arrest or restraint of or in violation of the orders of the common carriers.
princes, rulers, or people, or seizure under legal process” and from
“quarantine restrictions”.
Art. 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or willful acts of the carrier’s employees, although
Case: Compania Maritima vs. CA and Vicente Concepcion A passenger who failed to board the vessel can refund or revalidate the ticket
- While the act of private respondent in furnishing petitioner with an subject to surcharges. Revalidation means “the accreditation of the ticket that is
inaccurate with of the payloader cannot successfully be used as an not used and intended to be used for another voyage.
excuse by petitioner to avoid liability to the damage thus caused,
said act constitutes a CONTRIBUTORY CIRCUMSTANCE to the damage (2) Carrier’s Lien
caused on the payloader, which mitigates the liability for damages of
petitioner in accordance with Article 1741. If consignor or the consignee fails to pay the consideration for the
transportation of goods, the carrier may exercise his lien in accordance with Art.
Case: Philippine National Railways vs. CA 375 of Code of Commerce:
- While petitioner failed to exercise extraordinary diligence as required
by law, it appears that the deceased was chargeable with ARTICLE 375. The goods transported shall be especially bound to answer for
contributory negligence. the cost of transportation and for the expenses and fees incurred for them
during their conveyance and until the moment of their delivery.
- Since he opted to sit on the open platform between the coaches of
This special right shall prescribe eight days after the delivery has been made,
the train, he should have held tightly and tenaciously on the upright
and once prescribed, the carrier shall have no other action than that
metal bar found at the side of said platform to avoid falling off from
corresponding to him as an ordinary creditor.
the speeding train
DEMURRAGE
B. FREIGHT
Demurrage is the compensation provided for the contract of affreightment for
a. Amount to be Paid the detention of the vessel beyond the time agreed on for loading and
unloading. It is the claim for damages for failure to accept delivery. In broad
The regulation of rates is founded upon the valid exercise of the Police Power of sense, very improper detention of a vessel may be considered a demurrage.
the state in order to protect the public from arbitrary and excessive rates while Technically, liability for demurrage exists only when expressly stipulated in the
maintaining the efficiency and quality of services rendered. The fixing of just contract.
and reasonable rates involves a balancing of investor and the consumer interest.
Using the term in broader sense, damages in the nature of demurrage are
Although the consideration that should be paid to the carrier is still subject to recoverable for a breach of the implied obligation to load or unload the cargo
the agreement between parties, what can be agreed upon should not be with reasonable dispatch, but only by the party to whom the duty is owed and
beyond the maximum amount fixed by appropriate government agency. only against on who is a party to the shipping contract. Notice of arrival of
vessels or conveyances, or their placement for purposes of unloading is often a
condition precedent to the right to collect demurrage charges.
b. Who will pay
CHAPTER 3
Although either of the shipper or the consignor may pay the freight before or at
EXTRAORDINARY DILIGENCE
time the goods are delivered to the carrier for shipment, nonetheless, it is the
consignor (whom the contract of carriage is made) who is primarily liable for the
I. RATIONALE
payment of freight whether or not he is the owner of the goods. The obligation
A common carrier is bound to carry the passengers safely as far a
to pay is implied from the mere fact that the consignor has placed the goods
human care and foresight provide, using the utmost diligence of very cautious
with the carrier for the purpose of transportation.
persons, with due regard for all circumstances.
Article 374. The consignees to whom the shipment was made may not defer - There is no hard and fast rule in the exercise of extraordinary
the payment of the expenses and transportation charges of the goods they diligence
receive after the lapse of twenty-four hours following their delivery; and in case - Common carrier binds itself to carry the passengers safely as far as
of delay in this payment, the carrier may demand the judicial sale of the goods human care and foresight can provide, using the utmost diligence of
transported in an amount necessary to cover the cost of transportation and the a very cautious person, with due regard for all the circumstances.
expenses incurred.
- The duty even extends to the members of the crew or complement
operating the carrier
(1) Carriage of Passengers by Sea
Case: Kapalaran Bus Lines vs. Coronado
With respect to carriage of goods by sea, the tickets are purchased in advance.
Carriers are not supposed to allow passengers without tickets --- the carrier is
- If common carriers carefully observed the statutory standard of
extraordinary diligence in respect of their own passengers, they
bound to observe a “No Ticket, No Boarding Policy”. The carrier shall collect/
cannot help but simultaneously benefit pedestrians and the owners
inspect the passenger’s ticket within one hour from vessel’s departure as not to
and passengers of other vehicles who are equally entitled to the safe
disrupt resting or sleeping passengers.
and convenient use of our roads and highways
If the vessel is not able to depart on time and the delay is unreasonable, the
A reasonable man or a good father of a family in the position of the carrier must
passenger may opt to have his/ her ticket refunded without refund service fee.
exercise extraordinary diligence in the performance of his contractual
Delayed voyage means “late departure of the vessel from its port of origin and/
obligation.
or late arrival of the vessel to its port of destination”. Unreasonable delay means
“the period of time that has lapsed without just cause and is solely attributable
b. No duty to inquire
- Because of the implied warranty of seaworthiness,
shippers of goods, when transacting with common carriers, are
The vessel must be adequately equipped and properly manned.
not expected to inquire into the vessels seaworthiness,
genuineness of its licenses and compliance with all maritime - On top of regular maintenance and inspection, Captains, masters or
laws. Passengers cannot be expected to inquire everytime they patrons of vessels must prove the skill, capacity, and qualifications
board a common carrier, whether the carrier possesses the necessary to command and direct the vessel.
necessary papers or that all the carrier’s employees are - If the owner of a vessel desires to be the captain without having the
qualified. legal qualifications, he shall limit himself to the financial
- Duty to exercise due diligence likewise includes the duty to take 2. Transshipment
passengers or cargoes that are within the carrying capacity of the - The act of taking cargo out of one ship and loading it into another; to
vessel. transfer goods from the vessel stipulated in the contract of
affreightment to another vessel before the place of destination
C. PROPER STORAGE named in the contract has been reached.
- Transshipment of freight without legal excuse is a violation of the
- The vessel itself may be suitable for the cargo but this is not enough contract and subjects the carrier to liability if the freight is lost even
because the cargo must also be properly stored. by a cause otherwise excepted.
Cargo must generally not be placed on deck. The carrying of deck cargo raises Note: there is transshipment whether or not the same person, firm or entity
the presumption of unseaworthiness unless it can be shown that the deck cargo owns the vessels (what matters is the actual physical transfer of cargo from one
will not interfere with the proper management of the ship. vessel to another)
D. NEGLIGENCE OF CAPTAIN AND CREW V. EXTRAORDINARY DILIGENCE IN CARRIAGE BY LAND
- Failure on the part of the carrier to provide competent captain and A. CONDITION OF VEHICLE
crew should be distinguished from the negligence of the said captain - Common carriers that offer transportation by land are similarly
and crew, because the latter is covered by the Limited Liability Rule required to make sure that the vehicles that they are using are in
(liability of the shipowner may be limited to the value of the vessel). good order and condition.
- If the negligence of the captain and crew can be traced to the fact
that they are really incompetent, the Limited Liability Rule cannot be Rule on Mechanical Defects – If the carriers will replace certain parts of the
invoked because the shipowner may be deemed negligent. motor vehicle, they are duty bound to make sure that the parts that they are
purchasing are not defective. Hence, it is a long-standing rule that a carrier
Rules on passenger safety cannot escape liability by claiming that the accident that resulted because of a
defective break or tire is due to a fortuitous event. This is true even if it can be
- Negligence on the part of the captain and crew as well as the
established that the tire that was subject of a blow-out is brand new. The duty
operator includes failure to comply with the regulation issued by the
Maritime Industry Authority (MARINA) on the safety of the to exercise extraordinary diligence requires the carrier to purchase and use
vehicle parts that are not defective.
passengers
- Memorandum Circular No. 112 : passengers do not merely contract B. TRAFFIC RULES
for transportation because they have the right to be treated by the
carrier and its employees with kindness, respect, courtesy and due
- The carrier fails to exercise extraordinary diligence if it will not
comply with basic traffic rules. The Civil Code provides for a
consideration. They are entitled to be protected against personal
conduct, injurious language, indignities and abuses from the said presumption of negligence in case the accident occurs while the
operator of the motor vehicle is violating traffic rules.
carrier and its employees
- Read Memorandum Circular No. 114: p. 204 In cases involving breach of contract of carriage, proof of violation of traffic rules
confirms that the carrier failed to exercise extraordinary diligence.
Case: Planters Products Inc. vs. CA
- The period during which private respondent was to observe the Case: Mallari Sr and Jr vs. CA
degree of diligence required of it as a public carrier began from the - The rule is settled that a driver abandoning his proper lane for the
time the cargo was unconditionally placed in its charge after the purpose of overtaking another vehicle in an ordinary situation has
vessel’s holds were duly inspected and passed scrutiny by the the duty to see to it that the road is clear and not to proceed if he
shipper, up to and until the vessel reached its destination and its hull cannot do so in safety
was re-examined by the consignee, but prior to unloading
- A ship owner is liable for damage to the cargo resulting from C. DUTY TO INSPECT
improper stowage ONLY when the stowing si done by stevedores - There is no unbending duty to inspect each and every package or
employed by him, and therefore under his control and supervision, baggage that is being brought inside the bus or jeepney. The carrier
not when the same is done by the consignee or stevedores under the is duty bound to conduct such inspection depending on the
employ of the latter circumstances.
Proof of airworthiness is not by itself sufficient to prove exercise of 4. Through Bill Issued by a carrier who is obliged to use the facilities of
extraordinary diligence. of Lading other carriers as well as his own facilities for the
purpose of transporting the goods from the city of the
Case: Japan Airlines vs. CA seller to the city of the buyer, which BOL is honored by
- The fact that the flight was cancelled due to fortuitous event does the second and other interested carriers who don’t
not mean that the carrier’s duty already ended. The carrier is still issue their own BOL.
obligated to look after the convenience and comfort of the passenger
5. On Board Bill -states that the goods have been received on board the
- Thus the carrier was obligated to make the necessary arrangements vessel which is to carry the goods.
to transport the passenger on the first available flight. -apparently guarantees the certainty of shipping as
well as the seaworthiness of the vessel to carry the
A. INSPECTION goods.
- It is the duty of the carrier to make inquiry as to the general nature -basically means that the goods are already inside the
of the articles shipped and of their value before it consents to carry vessel
them; and its failure to do so cannot defeat the shipper’s right to 6. Received for -states that the goods have been received for shipment
recovery of full value of the package if lost, in the absence of Shipment Bill with or without specifying the vessel by which the
showing of fraud or deceit on the part of the shipper. goods are to be shipped.
-issued when conditions are not normal and there is
Where a common carrier has reasonable ground to suspect that the offered insufficiency of shipping space.
goods are of a dangerous character, the carrier has the right to know the 7. Custody Bill The goods are already receied by the carrier but the
character of such goods and to insist inspection, if reasonable and practical of Lading vessel indicated therein has not yet arrived in the port.
under the circumstances, as a condition of receiving and transporting such
goods. To be subjected to unusual search, other than the routinary inspection 8. Port Bill of The vessel indicated in the BOL that will transport the
procedure customarily undertaken, there must exist proof that would justify Lading goods is already in the port.
cause for apprehension that the baggage is dangerous as to warrant exhaustive
inspection, or even refusal to accept carriage of the same.
Note: A party to a maritime contract would require an on board bill of lading
Case: Northwest Airlines vs. Laya because of its apparent guaranty of certainty of shipping as well as the
- The fact that the plaintiff was greatly inconvenienced by the fact that seaworthiness of the vessel which is to carry the goods.
his attaché case was subjected to further inspection does not
warrant imposition of liability because he was not singled out and Effectivity of BOL
discriminated by the employees of the carrier - upon its delivery to and acceptance by the shipper.
- Protection of passengers must take precedence over convenience - The acceptance of the bill without dissent raises the presumption
- Nevertheless, the implementation of security measures must be that all the terms therein were brought to the knowledge of the
attended by basic courtesies shipper and agreed to by him, and in the absence of fraud or
Note: The cause of action of a passenger or shipper against the common carrier - ten (10) years if there is written contract
can be culpa contractual or culpa aquiliana while the basis of liability on the
part of the driver is either culpa delictual or culpa aquiliana. The driver of the This rule likewise applies to carriage of passengers for domestic
carrier is not liable based on contract because there is NO PRIVITY of contract transportation.
between him and the passenger or shipper.
B. International Carriage of Goods by Sea
If the negligence of third persons concurs with the breach, the liability of the A claim must be filed with the carrier within the following period:
third person who was driving the vehicle and/or his employer may be based on
quasi delict. The driver alone may be held criminally liable and civil liability may 1. if the damage is apparent, the claim should be filed immediately
be imposed upon him based on delict. In the latter case, the employer is upon discharge of the goods; or
subsidiarily liable. 2. within 3 days from delivery, if damage is not apparent.
Remember: It does not make any difference that the liability of one springs from Filing of claim is not condition precedent. Thus, regardless of whether
the contract while that of the other arises from quasi-delict. If the owner and the notice of loss or damage has been given, the shipper can still bring
driver of the other vehicle are not impleaded, the carrier may implead them by an action to recover said loss or damage within one year after the
filing a third party complaint. delivery of the goods or the date when the goods should have been
delivered
Solidary liability
a) Prescription
- In case the negligence of the carrier’s driver and a third person
concurs, the liability of the parties – carrier and his driver, third Action for damages must be filed within a period of one (1) year from
person – is joint and several. discharge of the goods.
The period is not suspended by an extra-judicial demand. (Why?
NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD Transportation of goods by sea should be decided in as short a time as
possible)
A. Overland Transportation of Goods and Coastwise Shipping o Case: Dole Philippines Inc. vs. Maritime Company of the
a) When to file a claim with carrier Philippines - the prescriptive period is not tolled or
- Art. 366 constitutes a condition precedent to the accrual of a interrupted by a written extra-judicial demand. Article
right of action against a carrier for damage caused to the 1155 is NOT applicable.
merchandise. The period does not apply to conversion or misdelivery.
The one (1) year period refers to loss of goods and not to misdelivery.
Under Art. 366 of the Code of Commerce, an action for damages is
barred if the goods arrived in damaged condition and no claim is filed
by the shipper within the following period: - Damages arising from delay or late delivery are not the damage or
loss contemplated under the COGSA. The goods are not actually lost
1. Immediately if damage is apparent; or damaged. The applicable period is ten (10) years.
2. within twenty four (24) hours from delivery if damage is - Case: Domingo Ang vs. American Steamship Agencies
not apparent.
What is to be resolved – in order to determine the
applicability of the prescriptive period of one year – is
whether or not there was loss of the goods subject matter
of the complaint.
Note: The carrier who may be compelled to pay has the right of recourse against
Life expectancy – (2/3 x 80 – age at death)
the employee who committed the negligent, willful or fraudulent act. Net earnings – based on the gross income of the victim minus the
necessary incidental living expenses which the victim would have
B. Kinds of Damages incurred if he were alive.
Amount of living expenses must be established. In the absence of proof,
Article 2216 provides that no proof of pecuniary loss is necessary in order that it is fixed at fifty (50%) of the gross income.
moral, nominal, temperate, liquidated or exemplary damages may be
adjudicated. The assessment of such damages, except liquidated ones, is left to
Rules on loss of earning apply when the breach of the carrier resulted in
the plaintiff’s permanent incapacity.
the discretion of the court, according to the circumstances of each case.
However, proof of pecuniary loss is necessary if actual or compensatory 2) Attorney’s fees
damages are being claimed.
- refer to Art. 2208 of the Civil Code
a) Actual or Compensatory Damages - attorney’s fees may be awarded in an action for breach of contract
- only for the pecuniary loss suffered by him as he has duly proved of carriage under par. 1,2,4,5,10 and 11 of Art. 2208.
- not only the value of the loss suffered, but also that of the profits - If awarded exemplary, one is entitled to attorney’s fees
which the obligee failed to obtain - 2 kinds: ordinary (compensation to the lawyer); extraordinary
(indemnity as a form of damages suffered due to the breach of
- 2 Kinds: contract)
1. the loss of what a person already possesses (daňo emergente); - You can be awarded if you show that you were forced to litigate
and when you are entitled to exemplary damage.
2. the failure to receive as a benefit that would have pertained to him
(lucro cesante). - But this award is subject to the discretion of the court (you cannot
dictate – usually 10%-15%)
- It should be proven: cannot be decided based on the consideration
of the judge; not to be based on the perception, observation and
3) Interests
consideration of the judge
12% per annum – if it constitutes a loan or forbearance of money
- With respect to restorative medical procedure: to be entitled to
actual damage, you need to have an EXPERT TESTIMONY. Without 6% per annum – if it does not constitute loan or forbearance of
such, you cannot recover. money
12% - for final judgment
- Subject to three conditions in transportation law: - cannot co-exist with actual damages
o Death - Definite proof of pecuniary loss cannot be offered, although the court is
o Malice or bad faith (must be done in the performance of convinced that there has been such loss.
the contract of carriage)
e) Liquidated Damages
o Physical Injuries
- Those agreed by the parties to a contract, to be paid in case of
- Requisites: breach thereof.
- The contract of air carriage generates a relation attended with a Hypothecary – the liability of the owner of the value of the vessel is limited to
public duty. Neglect or malfeasance of the carrier’s employees the vessel itself
naturally could give ground for an action for damages.
STATUTORY PROVISIONS
MARITIME LAW
Article 837, 587, 590 and 643 – provides for limited liability of shipowner.
A. CONCEPTS (Chapter 6) (read full provision)
Maritime Law – is the system of laws which particularly relates to the affairs Art. 837: civil liability incurred by the ship owner: liability limited to value of the
and business of the sea, to ships, their crews and navigation and to marine vessel + appurtenances + freightage earned during voyage
conveyance of persons and property
Art. 643: vessel and cargo lost by reason of capture or wreck: all rights shall be
Governing Laws: extinguished, both as regards the crew to demand any wages whatsoever, and
1. New Civil Code – primary law on maritime commerce as regards the ship agent to recover the advances made
If a portion of the vessel or of the cargo, or both, should be saved,
2. Book III Code of Commerce – applied suppletorily
the crew engaged on wages, including the captain, shall retain their rights on
3. Special Laws the salvage, so far as they go, on the remainder of the vessel as well on the
a. Salvage Law (Act No. 2616) amount of the freightage of the cargo saved; but sailors who are engaged on
shares shall not have any right whatsoever on the salvage of the hull, but only
b. Carriage of Goods by Sea Act (CA No. 65) the portion of the freightage saved. If they should have worded to recover the
c. Ship Mortgage Decree of 1978 (PD 1521) remainder of the shipwrecked vessel they shall be given from the amount of the
salvage an award in proportion of the efforts made and to the risks encountered
REAL AND HYPOTHECARY NATURE OF MARITIME LAW in order to accomplish the salvage
Case: Philippine Shipping Company, et al. vs. Francisco Garcia Vergara Art. 587: ship agent may exempt himself of the civil liabilities for the
That which distinguishes the maritime from the civil law and even
indemnities in favor of third persons by abandoning vessel with all equipments
and freight it earned during voyage
from the mercantile law in general is the real and hypothecary
nature of the former
Art. 590: co-owners civilly liable in proportion to their interest and may exempt
liability by abandonment of the part of the vessel belonging to him
Evidence of this “real “ nature of maritime law:
o The limitation of the liability of the agents to the actual Limited liability rule – means that the liability of a shipowner for damages in
value of the vessel and the freight money case of loss is limited to the value of his vessel.
o The right to retain the cargo and the embargo and No vessel, no liability.
detention of the vessel even cases where the ordinary
civil law would not allow more than a personal action
The civil liability for collision is merely co-existent with the interest in
the vessel; if there was total loss, liability is also extinguished.
against the debtor or person liable
GR: If the ship is totally lost, liability is extinguished. If the ship or part thereof
This repeals the civil law to such extent that, in certain cases where still exists, he can escape liability by abandoning the vessel, its appurtenances
the mortgaged property is lost no personal action lies against the and its freight.
owner or agent of the vessel
Case: Monarch Insurance Co., Inc. vs. Court of Appeals
Two reasons why it is impossible to do away with these privileges: The total destruction of the vessel extinguishes maritime liens
o The risk to which the thing is exposed because there are no longer any res to which it can attach. This
doctrine is based on the real and hypothecary nature of maritime
o The real nature of maritime law, exclusively real,
law.
according to which the liability of the parties is limited to
a thing to which is at mercy of the waves
Note: Since the Civil Code contains no provision regulating liability of
Case: Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance shipowners or agents in the event of total loss or destruction of the vessel,
Article 587 of the Code of Commerce governs.
Corporation, Ltd.
Article 837, 587 and 590 of Code of Commerce cover only:
The real and hypothecary nature of maritime law simply means
1. Liability to third persons
that the liability of the carrier in connection with losses related to
maritime contracts is confined to the vessel, which is hypothecated 2. Acts of the captain
for such obligations or which stands as the guaranty for their 3. Collisions
settlement
Purpose: It was designed to offset such adverse conditions and to EXCEPTIONS TO THE LIMITED LIABILITY RULE
encourage people and entities to venture into maritime commerce 1. Where the injury or death to a passenger is due either to the fault of
despite the risks and prohibitive cost of shipbuilding the shipowner, or to the concurring negligence of the shipowner and
Thus, the liability of the vessel owner and agent arising from the the captain (NEGLIGENCE)
operation of such vessel were confined to the (1) vessel itself, (2) its
equipment, (3) freight, (4) and insurance if any, which limitation
served to induce capitalists into effectively wagering their resources GR: Shipowner is liable for the negligence of the captain in collision
against the consideration of the large profits attainable in trade cases
4. Expenses for repairs and provisioning of the ship prior to the 2. limited liabililty rule --- no literal explanation
departure thereof - limited: it means that the liability is limited to the value of the vessel
-liability: assumption that the shipowner is liable for the losses. There are no
valid defenses that shipowner can invoke to escape liability. Same concept with
5. The vessel is not abandoned (ABANDONMENT) 1479. Difference is that there is a fixed amount and there is qualification
Abandonment of the vessel, its appurtenances and the freightage is -under the limited liability – no fixed amount but amount is confined on the
an indispensable requirement before the shipowner or ship agent vessel
can enjoy the benefits of the limited liability rule. If the carrier does
not want to abandon the vessel, he is still liable even beyond the The question here: is this a right to limit the liability?
value of the vessel A: admittedly it is a right that only shipowner can exercise
The only instance where abandonment is dispensed with is when the
Q; how to exercise?
vessel was entirely lost. In such case, the obligation is extinguished.
A: by way of pleading. But do not follow the way it was filed in yangco. Here it
Only shipowner and ship agent can make an abandonment was after judgment that the shipowner sought to abandon the ship to abandon
liability
PROCEDURE FOR ENFORCEMENT But right now, it is a matter of procedure. To limit liability by abandoning the
vessel; IF it is a matter of procedure, you check the rules of civil procedure
Case: Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance
Corporation, Ltd. Q: so when does shipowner inform the court the right to limit liability?
- Rights of the parties to claim against an agent or owner of A: in a pleading and normally in an answer. IT will be raised as a defense. If
vessel may be compared to those of creditors against an insolvent shipownver cannot allege, then that defense is deemed waiver. Therefore you
corporation whose assets are not enough to satisfy the totality of cannot seek abandonment after judgment was been rendered.
claims as against it.
CASES:
- Creditors must limit their recovery to what is left in the
name of the corporation Yangco vs. Lacerna
- In the sinking of a vessel, the claimants or creditors are - even captain was aware of the typhoon and the vessel capsized, SC upheld
limited in their recovery to the remaining value of accessible assets. limited liability
The more critical issue is on the EXCEPTIONS in the LLRule: MARITIME PROTEST (4 INSTANCES) – REQUIRED (LOOK AT CODE OF COMMERCE
1. workmen’s compensation (Abueg case: the repairs constitue maritime lient) and above notes)
2. insurance coverage--- if the vessel is lost in the course of voyage and it is
insured, is it automatic that the limited liability rule does not apply? INSTANCES WHEN IT DOES NOT APPLY:
A: No. the basis of supreme court (Vasquez vs. CA --- court mentioned very little 1. NOT based CODE OF COMMERCE AND BASED ON QUASI-DELICT THEN NOT
about insurance: if the vessel is insured, the insurance proceeds shall answer MARITIME PROTEST
the credit) 2. when what was is involve is not a vessel (Lopez vs. Duruel: the motor boat is
not a vessel under maritime law, it is only engaged in bay traffic. A vessel in
If the plaintiff was injured or heirs will file action from insurance company, and maritime law, should be engaged in transporting goods, persons, or both from
since shipowner cannot avail of limited liability, this is not advisable to the one port to another)
plaintiff because it has no privity of contract with the insurance company
(But to be sure: you file maritime and allege such bahala dili kelangan coz
Q: when does insurance argument come in? otherwise dismiss ang case)
A: only when the shipowner will bring the insurance company to the case filed
by the plaintiff—by way of third party complaint. Once insurance company is Since a vessel is a personal property, it can be mortgaged…
impleaded then this can be used: that the owner cannot avail of limited liability. Same concept with mortgage but different rule
- PD 1521:
But no shipowner will ever implead the insurance. Because they will be the one
who will claim the insurance without telling the plaintiffs. In the case, there is Q: what about process of extra judicial foreclosure of vessel?
no proof that the vessel is insured. Even if we know outside court, it is insured A: chattel mortgage law should govern
because in the court, there is no proof that the vessel is insured. Court will not
identify evidence not properly identified and recoded in court. Q: what to remember under PD 1521?
A: Section 4
Q: is it really an exception in its strict sense? registration, non waiver
A: Not really (CAPANAS). What is the implication if you properly invoke the Section17: priority of claims…
LLRule – the plaintiff cannot avail beyond the value of the vessel.
If not apply – plaintiff will recover more than the value of vessel subject to rules Q: are there claims in maritime law over and above preferred mortgage?
on claiming of damages. A: yes. Look at section 17.
But question, if vessel if covered with insurance, does this mean that plaintiff Case: Poliand Industrial
can recover to the amount applied? No, they can only recover until the coverage - facts shows that the proceeds debted from hardwood was for the modification
of the insurance proceeds. of the vessel (extended for vessels benefit), for crews wage
3. Negligence Characteristics of maritime lien:
- common carrier is presumed negligent if common carrier. However, this does 1. maritime property
not apply when there is an invocation on limited liability. (in all cases except 2. travels with the property--- it cannot be extinguished
MONARCH vs. CA) --- the rest of the case, the court has found negligence based 3. enforceable in an action in rem--- action directed to the property (crescent
on the facts presented. You cannot invoke presumption of negligence so that case: ang gi kiha ang vessel)
limited liability rule will not apply.
Under section 22: persons authorize to procure repairs (presumed):
Monarch _-- SC: since there is a presumption of negligence then LLR will not 1. managing agent
apply. But SC also said that if LLR is invoked, the initial burden to invoke 2. ship’s husband --- agent of the vessel
negligence shifts to the shipowner. They should prove that there is no privity or
knowledge on the negligence of the ship captain. If mortgagor does not pay:
1. judicial foreclosure – file actual case and implead the vessel as party
Q: what is the relationship of Civil Code and LLR? defendant (served to captain or authorized person); you can ask the court order
A: There is none. Under 1766 in all matters not provided by Civil Code, Code of to arrest the vessel.
Commerce or Special law will apply. There is no rule in Civil Code in limited 2. extrajudicial
liability rule thus Code of Commerce will apply. (but in monarch, this was not - the problem with vessel, mortgagee is not in possession of the vessel. It is with
applied--- all the negligence was related to the absence of exercising the mortgagor, you cannot sell the property not in your possession.
extraordinary diligence)
In PD 1521—the order of arrest can be asked
Note: that in the subsequent cases, Consolidated of Aboitiz case: there were Grounds to discharge
findings of facts of the negligence of Aboitiz. The point is when it comes to LLR, 1. irregularly issued (mortgagee na ilad. Wala pa diay due obligation
the Code of Commerce apply. You cannot invoke presumption of negligence. In 2. posting of a bond to discharge..the bond to be posted is double the value of
order to refute, petitioner should prove negligence. the claim.
REMEMBER: PROVE THE FACTS OF NEGLIGENCE. Not presumption.
Maritime lien on necessaries (5 requisites) – brief yourself cresent petroleum
Loadstar case case (look at book for requisites)
- the shipowner is aware of the typhoon
- insufficient manning – negligent B. VESSELS (Chapter 7)
- Captain playing mahjong – there was negligence. But SC said that it was
negligent because the shipowner did not prove that it was the first. Supposedly 1. General Concepts
facts are established in court proceedings and not on presumption.
3. no vessel, no liability A vessel or watercraft is defined under PD No. 447 as any barge,
lighter, bulk carrier, passenger ship freighter, tanker, container ship, fishing
boats, or other artificial contrivance utilizing any source of motive power,
designed use or capable of being used as a means of transportation
- Only vessels engaged in what is ordinarily known as maritime A captain may not acquire by prescription the vessel of which he is in command.
commerce are within the provisions of law conferring limited liability
on the owner in case of maritime disaster ARTICLE 575. Co-owners of vessels shall have the right of repurchase and
- It is therefore clear that a passenger on a boat like the Jison, in the redemption in sales made to strangers, but they may exercise the same only
case before use, is not required to make protest as a condition within the nine days following the inscription of the sale in the registry, and by
precedent to his right of action for the injury suffered by him in the depositing the price at the same time.
collision described in the complaint – article 835 of the Code of
Commerce does not apply B. Sale (Code of Commerce)
CONSTRUCTION, EQUIPMENT AND MANNING
The vendor shall be under the obligation to deliver to the purchaser a certified SAFETY REGULATIONS
copy of the record sheet of the vessel in the registry up to the date of the sale. On February 23, 2000, the Maritime Industry Authority directed all
domestic shipowners and operators under Memorandum Circular No.
Article 577. If the alienation of the vessel should be made while it is on a 154 to strictly comply with existing Safety-Related Policies, Guidelines,
voyage, the freightage which it earns from the time it receives its last cargo shall Rules and Regulations
pertain entirely to the purchaser, and the payment of the crew and other
persons who make up its complement for the same voyage shall be for his
Rules include: (read book page 488-489)
account. Monitoring of compliances shall be undertaken by the Authority and
If the sale is made after the vessel has arrived at the port of its destination, the its Maritime Regional Offices, together with the needed coordination
freightage shall pertain to the vendor, and the payment of the crew and other with the Philippine Coast Guard
individuals who make up its complement shall be for his account, unless the The MARINA shall have the power to inspect vessels and all equipment on board
contrary is stipulated in either case. to ensure compliance with safety standards
Article 578. If the vessel being on a voyage or in a foreign port, its owner or C. PERSONS WHO TAKE PART IN MARITIME COMMERCE
owners should voluntarily alienate it, either to Filipinos or to foreigners
domiciled in the capital or in a port of another country, the bill of sale shall be In sum, the following are persons who take part in Maritime Commerce:
executed before the consul of the Republic of the Philippines at the port where
it terminates its voyage and said instrument shall produce no effect with respect SHIPOWNERS and SHIP AGENTS;
to third persons if it is not inscribed in the registry of the consulate. The consul
shall immediately forward a true copy of the instrument of purchase and sale of CAPTAINS and MASTERS OF VESSELS;
the vessel to the registry of vessels of the port where said vessel is inscribed and OFFICERS and CREW OF VESSELS
registered.
In every case the alienation of the vessel must be made to appear with a SHIPOWNER V. SHIP AGENT
statement of whether the vendor receives its price in whole or in part, or
whether he preserves in whole or in part any claim on said vessel. In case the SHIPOWNER – the person who is primarily liable for damages sustained in the
sale is made to a Filipino, this fact shall be stated in the certificate of navigation. operation of vessel.
When a vessel, being on a voyage, shall be rendered useless for navigation, the Code of Commerce – places the primary responsibility on the owner of the
captain shall apply to the competent judge on court of the port of arrival, should vessel.
it be in the Philippines; and should it be in a foreign country, to the consul of the (Uses the term naviero which has been construed to include shipowner, ship
Republic of the Philippines, should there be one, or, where there is none, to the agent and even the charterer who is considered as owner pro hac vice.)
judge or court or to the local authority; and the consul, or the judge or court,
shall order an examination of the vessel to be made. SHIP AGENT (Code of Commerce) – the person entrusted with provisioning of
the vessel, or who represents her in the port in which she happens to be.
If the consignee or the insurer should reside at said port, or should have There is also the intention under the Code of Commerce to make the ship
representatives there, they must be cited in order that they may take part in the agent solidarily liable with the owner. The solidary liability applies both for
proceedings on behalf of whoever may be concerned. breach of contract and extra-contractual obligations such as tort. The ship
agent, even though he is not the owner, is liable in every way to the
REGISTRATION creditor for losses and damages without prejudice to his right against the
Vessels are now registered through MARINA. It is a long standing rule owner, the vessel and its equipment and freight. But his liability, however
that the person who is the registered owner of the vessel is presumed to is subject to the LIMITED LIABILITY RULE (Chapter 6 of the Aquino book).
be the owner of the vessel.
It is a settled rule that the sale or transfer of the vessel is not binding CAPTAINS V. MASTERS OF VESSELS
on the third person unless the same is registered.
For purposes of Maritime Commerce:
SHIP'S MANIFEST The words “captain” and “master” have the same meaning; both being
chiefs or commanders of ships. Thus, the terms “captain” and “master” are
Vessels are required to carry manifest coast-wise trade.
used synonymously in the Code of Commerce.
A manifest is a declaration of the entire cargo. The object of a
manifest is to furnish custom officers with list of check against, to inform MARINA regulations:
the revenue officers what goods are being brought into a port of the MASTER – the person having command of the ship. The same term is being used
country on a vessel. both for domestic trade and international trade.
The requirement that a vessel must carry a manifest is not complied
with even if a bill of lading can be presented. A bill of lading is just a BOAT CAPTAIN – a person authorized by the MARINA to act as officer and/or in
declaration of a specific cargo rather than the entire cargo command of a boat/ship or has the qualification/license to act as such.
Sec 906 of the Tariff and Custom Code provides that “manifest shall
be required for cargo and passengers transported from one place to 3 Distinct Roles a captain commonly performs:
another only when one or both of such place is a port of entry.” (Inter-Orient Maritime case)
1. He is a GENERAL AGENT OF THE SHIPOWNER;
MORTGAGE
2. He is a COMMANDER and TECHNICAL DIRECTOR of the vessel (most
Since the term personal property includes vessel, they are subject to important role for this has something to do with the operation and
mortgage agreeably to the provisions of the Chattel Mortgage Law. preservation of the vessel during its voyage and the protection of the
Mortgage and other encumbrances over vessels are governed by the passengers, if any, and crew and cargo);
Broad sense: includes both (1) those whose duty it is to guide vessels into or out MINIMUM SAFE MANNING
of ports, or in particular waters; and (2) those entrusted with the navigation of It is not enough that the officers manning the merchant vessel have all the
vessels on the high seas. qualifications imposed by the Philippine Merchant Marine Officers Act and
other special laws or regulations. It is also required that there is sufficient
General understanding: a person taken on board at a particular place for the number of officers and crew that are serving in the vessel. (Quality and
purpose of conducting a ship through a river, road or channel, or from a port. Quantity)
b. Shipowner and Pilot CODE OF COMMERCE PROVISIONS on Sailing Mates, Second Mate and Marine
Engineer, Crew, and Captain (See pages 552-560 of the Aquino book).
GENERAL RULE: the pilot is PERSONALLY LIABLE for damages caused by
his own negligence or default to the OWNERS of the vessel, and to THIRD Parties --- those provided above… plus seamen, other members of the
PARTIES for damages sustained in a collision. Such negligence of the pilot complement including the stokers (incharge of boilers) and supercargo (agent of
in the performance of duty constitutes a MARITIME TORT. the shippers who has authority to sell goods while on voyage)
In cases of COLLISION: the COLLIDING VESSEL is prima facie responsible, 4 maritime contracts
hence, the burden of proof is upon the party claiming benefit of the 1. charter parties
exemption from liability. Thus, it must be shown affirmatively that the 2. Botomry
If both SO and SA are sued, being solidarily liable, the SA has right of recourse Parties
over SO. 1. Charterer- merchant or a person who desire s to lease ship or vessel owned
by another by transport of his or her goods for commercial purposes or persons
Shipcaptain or master from one port to another
- The difference is with regard to the tonnage of the vessel (higher: 2. Shipowner (SO)
captain; lower: master; major patron and minor patron)
KINDS:
- The question on the shipcaptain or master is the exercise of
discretion
Art. 1749. A stipulation that the common carrier's liability is limited to the 3. private instrument (Art. 720)
value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding. GR: The captain cannot contract loans on respondentia secured by the cargo,
and should he do so, the contract shall be void. Neither can he borrow money
Art. 1750. A contract fixing the sum that may be recovered. by the owner or or Bottomry for his own transactions.
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 EXCEPTIONS:
agreed upon. 1. On the portion of the vessel he owns, provided no money has been
previously borrowed on the whole vessel, nor exists any other kind of lien or
Art. 1751. The fact that the common carrier has no competitor along the line obligation chargeable against her.
or route, or a part thereof, to which the contract refers shall be taken into 2. When he is permitted to do so, he must necessarily state what interest he
consideration on the question of whether or not a stipulation limiting the has in the vessel.
common carrier's liability is reasonable, just and in consonance with public CONTENTS OF THE LOAN CONTRACT:
policy. 1. kind, name and registry of the vessel;
Art. 1752. Even when there is an agreement limiting the liability of the
2. name, surname and domicile of the captain;
common carrier in the vigilance over the goods, the common carrier is 3. names, surnames and domiciles of the borrower and the lender;
disputably presumed to have been negligent in case of their loss, destruction 4. amount of the loan and the premium stipulated;
or deterioration.
5. time for repayment;
Art. 1753. The law of the country to which the goods are to be transported 6. goods pledged to secure repayment;
shall govern the liability of the common carrier for their loss, destruction or 7. voyage during which the risk is run (Art.721)
deterioration.
WHO MAY CONTRACT:
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the
passenger's baggage which is not in his personal custody or in that of his 1. Bottomry – by the ship owner or ship agent; outside of the residence of
employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003 the owners, the captain.
concerning the responsibility of hotel-keepers shall be applicable. 2. Respondentia – only the owner of the cargo
ART. 653. if the cargo should be received without the charter party having been DISTINCTIONS:
signed, the contract shall be understood as executed In accordance with what BOTTOMRY/ RESPONDENTIA ORDINARY LOAN
appears in the bill of lading, the sole evidence of title with regard to the cargo
for determining the rights and obligations of the ship agent, captain and 1. Not subject to Usury Law 1. Subject to Usury Law
charterer 2. Liability of the borrower is 2. Not subject to any contingency
contingent on the safe arrival of the
vessel or cargo at destination
3. In case of shipwreck, the amount for payment of the loan shall be deduced to ACCIDENTS IN MARITIME COMMERCE:
the proceeds of the effects which have been saved but only after deducting the
costs of the salvage.
1. Averages
2. Arrival Under Stress
4. If the loan should be on the vessel or any of her parts, the freight earned 3. Collision
during the voyage for which the loan was contracted shall also be liable for its
payment, as far as it may reach. 4. Shipwreck
5. If the same vessel or cargo should be the object of the loan of Bottomry or * Averages – an extra-ordinary or accidental expense incurred during the voyage
respondentia and maritime insurance, the value of what may be saved in case of in order to preserve the cargo, vessel or both; and all damages or deterioration
shipwreck shall be divided between the lender and the insurer, in proportion to suffered by the vessel from departure to the port of destination, and to the
the legitimate interest of each one, taking in consideration, for this purpose cargo from the port of loading to the port consignment. (Art. 806)
only, the principal with respect to the
CLASSES OF AVERAGES:
Maritime contracts include charter parties… and loans on bottomry and A. Particular or Simple Average
respondentia are considered maritime contracts B. Gross or General Average
Q: why do we have to study this topic? Are these relevant?
A: they are hardly used at present. However, we have to study this just in case A. Particular or Simple Average
this will be asked in the bar. Especially in the unique terms used in this topic..
Damage or expenses caused to the vessel or cargo that did not inure to
General provisions in contracts will govern common benefit, and borne by respective owners. (809)
The owner of the goods which gave rise to the expense or suffered th e
Basic provision you should not forget: damage shall bear this average. (Art. 810)
1. there should be a marine risk res perit domino applies
2. the condition that the vessel or the goods has perished then the right of the if the vessel or goods are hypothecated by loan on bottomry and
lender to collect everything as well as stipulated interest is extinguished respondentia, the lender shall bear the loss in proportion to his interest
(not sure if there are other more.. basin ala ko kaapas)
Examples: see article 809 of the code of commerce
BOTTOMRY
RULES ON AVERAGES:
- It may refer to the vessel
1. Averages is defined as damage deliberately caused or an expense
- The bottom or the hull or the kill of the vessel can be pledged in this deliberately incurred due to a marine peril and which has resulted in
case saving both vessel and cargo or only the vessel or cargo.
- The whole vessel can be a subject of a security or collateral 2. Where both vessel and cargo are saved, it is general average; where only
- PD. 1521: (is this different) --- loan is the principal, mortgage is the the vessel or only the cargo is saved, it is particular average.
Common danger
2. The resolution must be entered in the logbook, stating the reasons
and motives for the dissent, and the irresistible and urgent causes if he
- means both the ship and the cargo, after has been loaded, are subject to the
acted in his own accord. It must be signed, in the first case, by all persons
same danger, whether during the voyage, or in the port of loading or unloading,
present in the hearing. In the second case, by the captain and all the
that the danger arises from the accidents of the sea, disposition of authority, or
officers of the vessel.
faults of men, provided that circumstances producing the peril should be
ascertained and imminent or may rationally be said to be certain and imminent 3. The minutes must also contain a detail of all the goods jettisoned
and those injuries caused to those on board.
- When the measure of precaution adopted solely and exclusively for the 4. The captain shall deliver it to the maritime judicial authority of the
preservation of the vessel from the danger of seizure or capture and not for the first port he may make, within 24 hours after his arrival, and to ratify it
common safety is not considered as common danger immediately under oath.
* voluntary jettison- the casting away of some portion of the associated 2. those which are below the upper deck, beginning with the one with
interests for the purpose of avoiding the common peril from the whole to a greatest weight and smallest value. (Art. 815)
particular portion of those interests
- the goods on board refer to in jettison should be proven by means of bill of Examples of General Average
lading and with regards to those belonging to vessel by means of inventory Read Art 811 of the Code of Commerce
prepared before the departure
By Whom Borne
2 cases where there can also be general averages even if the sacrifice was not - shall be borne by those who benefited from the sacrifice; the shipowner and
made during the voyage: the owner of the cargoes that were saved
a. where the sinking of the vessel is necessary to extinguish a fire in a
port, roadstead, creek or bay Contribution may be imposed to;
b. where cargo is transferred to lighten the ship on account of a a. insurers ( Insurance Code of the Philippines)
storm to facilitate entry into a port - they are obliged to pay for the indemnification of the gross average provided
that the liability shall be limited to the proportion of contribution attaching to
Art. 816: in order that the goods jettisoned may be included in the gross his policy value where this is less than the contributing value of the thing
average and the owners entitled to indemnity – it is necessary that the cargo’s insured
existence on board be proven by a bill of lading; and with regard to those
belonging to the vessel, by means of an inventory prepared before departure. b. lenders of bottomry and respondentia (Code of Commerce)
-obliged to pay in proportion to their respective interest, the general average
Art. 817: if in lightening of a vessel on account of a storm to facilitate its entry to which may take place in the goods which the loan is made
a port or roadstead, part of the cargo should be transferred to barges or lighters
and be lost, the owner of the said part is entitled to indemnity as if the loss Who is entitled to indemnity?
originated from a gross average, the amount being distributed between the Owner of the goods which were sacrificed is entitled to receive the general
vessel and cargo from which it came. contribution
If on the contrary the merchandise transferred should be saved and the vessel Except;
should be lost, no liability may be demanded of the salvage. 1. goods carried on desk unless the rule special
law or customs of the place allow the same
Art. 818: if, as a necessary measure to extinguish a fire in a port, roadstead,
creek, or bay, it should be decided to sink any vessel, this loss shall be 2. goods that are not recorded in the books or
considered gross average, to which the vessels saved should contribute. records of the vessel
3. fuel of the vessel if there is more than
sufficient fuel for the voyage
It is clear that the damage of the cargo is particular average since the loss is less Q: is the duty of captain to initiate a condition precedent?
than 1% to the value of the cargo and there appears to be no allegations as to A: no. even if ship captain does not initiate, the shipowner can still file the
any agreement defendants and consignee of the goods to the contrary, by appropriate proceeding in court.
express provision of law, plaintiff is barred from suing for recovery.
COMMON DANGER – both to vessel and cargo. If one invokes general average
Law on averages does not apply if the CC is negligent. then that person must prove what he allege. In standard oil since ship captain
invoked gen aver – they should be the one to prove. Failure to prove, they
YORK-ANTWERP RULES ON DETERMINING LIABILITY FOR CONTRIBUTION ON cannot ask for contribution from owners of the goods.
AVERAGES
It is also possible that there are no goods involved. Only extraordinary expense
Under the rule, deck cargo is permitted in coastwise shipping but prohibited Phil. Home assurance case --- discussed also in chapter 3 --- when it exploded,
in overseas shipping. vessel got burned, another vessel came to the rescue to extinguish the fire and
1. If deck cargo is located with the consent of the shipper on overseas towed the vessel to the nearest destination. Goods were saved from the subject
trade, it must always contribute to general average, but should the same vessel. The shipowner asked for contribution to the owner of the goods which
be jettisoned, it would not be entitled to reimbursement because there were saved. SC said, shipowner did not comply legal steps 813-815 thus you
is violation of the Y-A Rules. cannot allege general averages.
2. If deck cargo is loaded with the consent of the shipper on coastwise
shipping, it must always contribute to general average and if jettisoned If the averages are not general, it is particular. the shipowner will be solely
would be entitled to reimbursement. liable… in the case of Magsaysay, there was no deliberate sacrifice.
SUCCESSFUL SAVING
- may also be used to solve controversies where no provision of the
code of commerce is in point because the said rules embody the - Both vessel and goods must be saved
custom of maritime states - If vessel not saved, no general averages. Even if goods were saved
AVERAGES
- You have to start with resolution, placing of reso in the log book,
accounting of goods thrown away starting those on deck and to
- the same concept that was existing in medieval times can be applied at present
follow from those not on deck (read 83-815)
Relevance of averages (take note these ex. Connected to expenses under 806)
American Home insurance (take note this case--- bar)
• under 806 --- averages are:
- Transportation of tv sets, the shipcapatain was uprised of the
o Extraordinary expenses – ex. If machine does not work, typhoon. Still captain continued with the journey. Then na abot ang
you have to ask help of a tugboat… the expenses on the typhoon captain directed that the tv sets should be jettison. Saved
use of tugboat is a question of averages. This is vessel. Reklamo owner. Is there general average? No. if the
extraordinary because it is not foreseen. --- assuming the shipowner is negligent, the law on general averages does not apply.
engine of the vessel was defective, can that be considered Note that examples of the two types of averages are not exclusive. There is a
an average? YES. (question now if it is particular or word “especially” thus there may be other example that may fall under this two
general) type of averages.
o Damages or deterioration suffered – refer to the physical
feature or attribute of the goods. YORK AND TURP RULES
- these two are different - THIS CAN be stipulated in a contract that this rule will apply in
respect to averages
DISTINCTION OF PARTICULAR AND GENERAL AVERAGES
- In the absence of stipulation in the contract in applying this rule,
Hernandez – averages are losses. If there is a loss incurred, the loss will be such rule is inapplicable
shouldered on where it falls. (ex. If you have goods transported from origin to
destination but in process it was damaged by sea water. The shipper or owner Q: ordinary expenses are not averages bec. They are foreseeable, are there
will shoulder the loss. What will shipper do to recover loss? If insured go after instance that they can be considered to be extraordinary ave
insurance. Insurance then files action against common carrier due to A; if the parties agree that the averages will cover ordinary expenses. The code
negligence) --- if general average, there is special circumstance, the loss will not of commerce does not prohibit the inclusion of other expenses under averages.
be shouldered on where it falls but wil be shouldered proportionately by
persons who have benefited the circumstance G. COLLISIONS
4 reqs for general averages (see above notes) – MEMORIZE; MAGSAYSAY VS. Collisions - impact of 2 vessels both of which are moving.
AGAN Allision - impact between a moving vessel and a stationary one.
1. common danger TO Both vessel and cargo
2. deliberate sacrifice 3 Zones of Time in the Collision of vessels:
3. successful saving 1. First zone – all time up to the moment when risk of collision begins;
4. compliance with the proper steps
2. Second zone – time between moment when risk of collision begins and
moment it becomes a practical certainty;
If no special circumstance, it is a particular or simple average --- the owner of
the vessel will be the one who will shoulder the loss. The negligence of captain, 3. Third zone – time when collision is certain and time of impact.
the owner of the vessel will shoulder. But if there is special circumstance, the
loss will be shouldered proportionately by those who benefited Error in Extremis - sudden movement made by a faultless vessel during the
3rd zone of collision with another vessel which is at fault during the 2nd zone.
NOTE: The Doctrine of Limited Liability applies in case of collisions, but it shall (Art. 822)
be limited only to the value of the vessel with all its appurtenances and
freightage earned during the voyage. When the latter is not sufficient to cover
all the liabilities, the indemnity due by reason of the death or injury of persons Custody of cargo:
shall have preference. (Arts. 837 and 838) intrusted to the captain (except in cases of force majeure)
* ARRIVAL UNDER STRESS – arrival of a vessel at a port of destination on if entire cargo or part thereof should appear to be damaged, or there
account of lack of provision, well founded fear of seizure, privateers, pirates, or should be imminent danger of its being damaged
accidents of sea disabling navigation. (Art. 819)
NOTE: Captain must make a protest captain may request judge of competent court / consul, the sale
of all or part of the cargo
Steps to be taken in the determination of the propriety of arrival under stress
1. captain should determine during the voyage if there is a well person taking cognizance shall authorize it (after examination and
founded fear of seizure, privateers of other valid grounds declaration)
2. captain shall then assemble the officers
captain shall justify the legality of his conduct, answering to the
I. SALVAGE LAW (Act No. 2616) Basis of entitlement to salvage reward (Circumstances to consider):
1. The labor expended by the salvors in rendering the salvage service
* SALVAGE – services one person renders to the owner of a ship or goods, by his 2. The promptitude, skill and energy displayed in rendering the service
own labor, preserving the goods or the ship which the owner or those entrusted and saving the property
with the care of them have either abandoned in distress at sea, or are unable to
protect or secure. 3. The value of the property employed by the salvors in rendering the
service, and danger to which such property was exposed
Kinds of Salvage: 4. The risk incurred by the salvors in rescuing the property from the
Voluntary – compensation is dependent on the success. impending peril
Under contract for a per diem or per horam wage – payable at all 5. The value of the property salved
events. 6. The degree of danger which the property was rescued
Under contract for compensation – payable only in case of success.
Rights and obligations of salvors and owners:
Salvor is entitled to compensation for services rendered. He has,
Claim for valid salvage: under the Salvage Law, a lien upon the property salvaged.
- Provides for a reward for voluntary salvage
On the other hand, the owner does not denounce his right to the
property. There is no presumption of an intention to abandon such
property rights.
SALVAGE LAW A. THE CREW OF THE VESSEL SHIPWRECKED OR WHICH WAS IS DANGER OF
SHIPWRECK;
SECTION 1. WHEN IN CASE OF SHIPWRECK, THE VESSEL OR ITS CARGO SHALL
BE BEYOND THE CONTROL OF THE CREW, OR SHALL HAVE BEEN ABANDONED BY B. HE WHO SHALL HAVE COMMENCED THE SALVAGE IN SPITE OF OPPOSITION
THEM, AND PICKED UP AND CONVEYED TO A SAFE PLACE BY OTHER PERSONS, OF THE CAPTAIN OR HIS REPRESENTATIVE; AND
THE LATTER SHALL BE ENTITLED TO A REWARD FOR THE SALVAGE.
C. HE WHO SHALL HAVE FAILED TO COMPLY WITH THE PROVISIONS OF SECTION
THOSE WHO, NOT BEING INCLUDED IN THE ABOVE PARAGRAPH, ASSIST IN THREE.
SAVING A VESSEL OR ITS CARGO FROM SHIPWRECK, SHALL BE ENTITLED TO A
LIKE REWARD. SEC. 9. IF, DURING THE DANGER, AN AGREEMENT IS ENTERED INTO
CONCERNING THE AMOUNT OF THE REWARD FOR SALVAGE OR ASSISTANCE, ITS
SEC. 2. IF THE CAPTAIN OF THE VESSEL, OR THE PERSON ACTING IN HIS STEAD, IS VALIDITY MAY BE IMPUGNED BECAUSE IT IS EXCESSIVE, AND IT MAY BE
PRESENT, NO ONE SHALL TAKE FROM THE SEA, OR FROM THE SHORES OR COAST REQUIRED TO BE REDUCED TO AN AMOUNT PROPORTIONATE TO THE
MERCHANDISE OR EFFECTS PROCEEDING FROM A SHIPWRECK OR PROCEED TO CIRCUMSTANCES.
THE SALVAGE OF THE VESSEL, WITHOUT THE CONSENT OF SUCH CAPTAIN OR
PERSON ACTING IN HIS STEAD. SEC. 10. IN A CASE COMING UNDER THE LAST PRECEDING SECTION, AS WELL AS
IN THE ABSENCE OF AN AGREEMENT, THE REWARD FOR SALVAGE OR
SEC. 3. HE WHO SHALL SAVE OR PICK UP A VESSEL OR MERCHANDISE AT SEA, IN ASSISTANCE SHALL BE FIXED BY THE COURT OF FIRST INSTANCE OF THE
THE ABSENCE OF THE CAPTAIN OF THE VESSEL, OWNER, OR A REPRESENTATIVE PROVINCE WHERE THE THINGS SALVAGED ARE FOUND, TAKING INTO ACCOUNT
OF EITHER OF THEM, THEY BEING UNKNOWN, SHALL CONVEY AND DELIVER PRINCIPALLY THE EXPENDITURES MADE TO RECOVER OR SAVE THE VESSEL OR
SUCH VESSEL OR MERCHANDISE, AS SOON AS POSSIBLE, TO THE COLLECTOR OF THE CARGO OR BOTH, THE ZEAL DEMONSTRATED, THE TIME EMPLOYED, THE
CUSTOMS, IF THE PORT HAS A COLLECTOR, AND OTHERWISE TO THE SERVICES RENDERED, THE EXCESSIVE EXPRESS OCCASIONED THE NUMBER OF
PROVINCIAL TREASURER OR MUNICIPAL MAYOR. PERSONS WHO AIDED, THE DANGER TO WHICH THEY AND THEIR VESSELS WERE
EXPOSED AS WELL AS THAT WHICH MENACED THE THINGS RECOVERED OR
SEC. 4. AFTER THE SALVAGE IS ACCOMPLISHED, THE OWNER OR HIS SALVAGED, AND THE VALUE OF SUCH THINGS AFTER DEDUCTING THE EXPENSES.
REPRESENTATIVE SHALL HAVE A RIGHT TO THE DELIVERY OF THE VESSEL OR
THINGS SAVED, PROVIDED THAT HE PAYS, OR GIVES A BOND TO SECURE, THE SEC. 11. FROM THE PROCEEDS OF THE SALE OF THE THINGS SAVED SHALL BE
EXPENSES AND THE PROPER REWARD. DEDUCTED, FIRST, THE EXPENSES OF THEIR CUSTODY, CONSERVATION,
ADVERTISEMENT, AND AUCTION, AS WELL AS WHATEVER TAXES OR DUTIES
THE AMOUNT AND SUFFICIENCY OF THE BOND, IN THE ABSENCE OF THEY SHOULD PAY FOR THEIR ENTRANCE; THEN THERE SHALL BE DEDUCTED
AGREEMENT, SHALL BE DETERMINED BY THE COLLECTOR OF CUSTOMS OR BY THE EXPENSES OF SALVAGE; AND FROM THE NET AMOUNT REMAINING SHALL
THE JUDGE OF THE COURT OF FIRST INSTANCE OF THE PROVINCE IN WHICH THE BE TAKEN THE REWARD FOR THE SALVAGE OR ASSISTANCE WHICH SHALL NOT
THINGS SAVED MAY BE FOUND. EXCEED FIFTY PER CENT OF SUCH AMOUNT REMAINING.
SEC. 5. THE COLLECTOR OF CUSTOMS, PROVINCIAL TREASURER, OR MUNICIPAL SEC. 12. IF IN THE SALVAGE OR IN THE RENDERING OF ASSISTANCE DIFFERENT
MAYOR, TO WHOM A SALVAGE IS REPORTED, SHALL ORDER: PERSONS SHALL HAVE INTERVENED THE REWARD SHALL BE DIVIDED BETWEEN
THEM IN PROPORTION TO THE SERVICES WHICH EACH ONE MAY HAVE
A. THAT THE THINGS SAVED BE SAFEGUARD AND INVENTORIED.
RENDERED, AND, IN CASE OF DOUBT, IN EQUAL PARTS.
B. THE SALE AT PUBLIC OPTION OF THE THINGS SAVED WHICH MAY BE THOSE WHO, IN ORDER TO SAVE PERSONS, SHALL HAVE BEEN EXPOSED TO THE
IN DANGER OF IMMEDIATE LOSS OR OF THOSE WHOSE CONSERVATION IS SAME DANGERS SHALL ALSO HAVE A RIGHT TO PARTICIPATION IN THE REWARD.
EVIDENTLY PREJUDICIAL TO THE INTERESTS OF THE OWNER, WHEN NO
OBJECTION IS MADE TO SUCH SALE. SEC. 13. IF A VESSEL OR ITS CARGO SHALL HAVE BEEN ASSISTED OR SAVED,
ENTIRELY OR PARTIALLY, BY ANOTHER VESSEL, THE REWARD FOR SALVAGE OR
C. THE ADVERTISEMENT WITHIN THE THIRTY DAYS SUBSEQUENT TO FOR ASSISTANCE SHALL BE DIVIDED BETWEEN THE OWNER, THE CAPTAIN, AND
THE SALVAGE, IN ONE OF THE LOCAL NEWSPAPERS OR IN THE NEAREST THE REMAINDER OF THE CREW OF THE LATTER VESSEL, SO AS TO GIVE THE
NEWS-PAPER PUBLISHED, OF ALL THE DETAILS OF THE DISASTER, WITH A OWNER A HALF, THE CAPTAIN A FOURTH, AND ALL THE REMAINDER OF THE
- New Civil Code primary law on goods that are being transported Limiting provision
from a foreign port to the Philippines - COGSA contains a provision that allows the shipper to recover only US$500 per
package unless there is a special declaration unless there the real value of the
- COGSA remains to be a suppletory law for such type of goods is declared
transportation – international shipping - declaration made by the shipper stating an amount bigger than $500 per
package will make the carrier liable for such bigger amount but only if the
ART. 1753, NCC: THE LAW OF THE COUNTRY TO WHICH THE GOODS ARE TO BE amount so declared is the real value of the goods
TRANSPORTED SHALL GOVERN THE LIABILITY OF THE COMMON CARRIER FOR
THEIR LOSS, DESTRUCTION OR DETERIORATION. Right to discharge dangerous cargo
- COGSA allows the carrier to discharge the good of the carrier discovers that
* Goods – includes goods, wares, merchandise, and articles of every kinds the goods are dangerous, inflammable or are explosives
whatsoever
- does not include live animals and cargo which by the contract of
carriage is stated as being carried on deck and is so carried
Parties:
Carrier, and
Shipper
- They are given their respective rights and obligations under COGSA.
- Charterer charters a vessel and conducts his own business for his own
account