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San Beda College of Law: Emory ID IN Ommercial AW
San Beda College of Law: Emory ID IN Ommercial AW
TRANSPORTATION LAWS
Parties
1. Common carrier 1. Common carrier
2. Shipper 2. Passenger
3. Consignee
Cause of liability
Delay in delivery, loss, destruction, or deterioration of Death or injury to the passengers
the goods
Duration of liability
From the time the goods are unconditionally placed in The duty of a common carrier to provide safety to its
the possession of, and received by the carrier for passengers so obligates it not only during the course
transportation until the same are delivered actually or of the trip, but for so long as the passengers are
constructively by the carrier to the consignee or to the within its premises and where they ought to be in
person who has the right to receive them. (Art. 1736) pursuance to the contract of carriage. (LRTA v.
It remains in full force and effect even when they Navidad, [2003])
are temporarily unloaded or stored in transit unless the All persons who remain on the premises within a
shipper or owner has made use of the right of reasonable time after leaving the conveyance are to
stoppage in transitu. (Art. 1737) be deemed passengers, and what is a reasonable time
It continues to be operative even during the time or a reasonable delay within this rule is to be
the goods are stored in a warehouse of the carrier at determined from all the circumstances, and includes a
the place of destination until the consignee has bee reasonable time to see after his baggage and prepare
advised of the arrival of the goods and has had for his departure. (La Mallorca v. CA, 17 SCRA 739 ;
reasonable opportunity thereafter to remove them or Abiotiz Shipping Corporation v. CA, 179 SCRA 95)
otherwise dispose of them. (Art. 1738) It is the duty of common carriers of passengers to
Delivery of goods to the custom authorities is not stop their conveyances a reasonable length of time in
delivery to the consignee. (Lu Do v. Binamira, 101 Phil order to afford passengers an opportunity to enter,
120) 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).
Presumption of negligence
Defenses
Void stipulations
1. That the goods are transported at the risk of the
owner or shipper; Dispensing with or lessening the extraordinary
2. That carrier will not be liable for any loss, responsibility of a common carrier for the safety of
destruction or deterioration of the goods; passengers imposed by law by stipulation, by posting
3. That the carrier need not observe any diligence of notices, by statements on tickets or otherwise. (Art.
in the custody of the goods; 1757)
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
BAREBOAT OR CONTRACT OF
DEMISE CHARTER AFFREIGHTMENT
(TIME OR VOYAGE
CHARTER)
Charterer becomes Owner remains liable as
A stipulation in a charter A clause in a charter 3. Failure to 2. Sale by the and
party that in case of a party providing that the place the owner of the 5. Inability of
maritime accident for COGSA shall apply, even vessel at the vessel before the vessel to
which the shipowner is though the charterer’s loading by the navigate.
not responsible by law, transportation is disposal; charterer;
contract or otherwise, domestic, subject to the 4. Return of
the cargo shippers, extent that any term of the vessel due
consignees or owners the bill of lading is to pirates,
shall contribute with the repugnant to the COGSA enemies or bad
shipowner in general or applicable law, then weather;
average. (Pandect of to the extent thereof the 5. Arrival at a
Commercial Law and provision of the bill of port for
Jurisprudence, Justice lading is void. (Pandect repairs.
Jose Vitug, 1997 ed.) of Commercial Law and
Jurisprudence, Justice Terms:
Jose Vitug, 1997 ed.) 1. Primage - bonus to be paid to the captain after
the successful voyage.
2. Demurrage – the sum fixed in the charter party
as a remuneration to the owner of the ship for
the detention of his vessel beyond the number
of days allowed by the charter party for loading
or unloading or for sailing.
Rights and Obligations of Parties 3. Deadfreight – the amount paid by or
recoverable from a charterer of a ship for the
SHIPOWNER OR CHARTERER portion of the ship’s capacity the latter
SHIP AGENT contracted for but failed to occupy.
1. If the vessel is 1. To pay the agreed 4. Lay Days - days allowed to charter parties for
chartered wholly, not to charter price; loading and unloading the cargo.
accept cargo from 2. To pay freightage 5. Extra Lay Days – days which follow after the
others; on unboarded cargo; lay days have elapsed.
2. To observe 3. To pay losses to
represented capacity; others for loading USUAL FORMS OF CONSUMMATING
3. To unload cargo uncontracted cargo and CONTRACTS
clandestinely placed illicit cargo; 1. C.I.F. – cost, insurance and freight;
4. To substitute 4. To wait if the 2. F.O.B. - free on board;
another vessel if load is vessel needs repair; 3. F.A.S. - free alongside ship; and
less than 3/5 of 5. To pay expenses 4. C. & F. - cost and freight.
capacity; for deviation. (Arts.
5. To leave the port if 679-687) TRANSSHIPMENT OF GOODS
the charterer does not The act of taking cargo out of one ship and
bring the cargo within loading it in another, or the transfer of goods from
the lay days and extra the vessel stipulated in the contract of affreightment
lay days allowed; to another vessel before the place of destination
6. To place in a vessel named in the contract has been reached, or the
in a condition to transfer for further transportation from one ship or
navigate; conveyance to another.
7. to bring cargo to It is not dependent on the ownership of the
nearest neutral port in transporting ships or in the change of carriers, but
case of war or blockade. rather on the fact of actual physical transfer of
(Arts. 669-678) cargo from one vessel to another.
If done without legal excuse, however competent
and safe the vessel into which the transfer is made,
is a violation of contract and infringement of right of
Rescission of a Charter Party
shipper and subjects carrier to liability if freight is
At At Fortuitous
lost event by cause otherwise excepted. (Magellan
charterer’s shipowner’s causes
Manufacturing vs. CA, 201 SCRA 102)
request request (Art. 690)
(Art 688) (Art. 689)
LOAN ON BOTTOMRY AND RESPONDENTIA
A real, unilateral, aleatory contract, by virtue of
1. By 1. If the extra 1. War or which one person lends to another a certain amount
abandoning lay days interdiction of of money or goods on things exposed to maritime
the charter and terminate commerce; risks, which amount, with its earnings, is to be
paying half of without the 2. Blockade; returned if the things are safely transported, and
the freightage; cargo being 3. Prohibition which is lost if the latter are lost.
2. Error in placed to receive
tonnage or alongside the cargo;
flag; vessel; 4. Embargo;
will be considered a simple loan.
(ART.727)
3. If the effects on which the money is taken
LOAN ON LOAN ON is not subjected to any risk. (ART.729)
BOTTOMRY RESPONDENTIA
Definition Note: Under existing laws, the parties to a loan,
Loan made by Loan taken on security whether ordinary or maritime, may agree on any
shipowner or ship of the cargo laden on a rate of interest. (CB Circular 905)
agent guaranteed by vessel, and repayable
vessel itself and upon safe arrival of
repayable upon arrival cargo at destination. MARINE INSURANCE LOAN ON
of vessel at (Art. 719) BOTTOMRY OR
destination. (Art. 719) RESPONDENTIA
Indemnity is paid after the Indemnity is paid in
loss has occurred advance by way of
Who may contract
a loan
Shipowner or ship Only the owner of the
In case of loss of the vessel In case of loss of
agent. Outside of the cargo.
due to a risk insured the vessel due to a
residence of the
against, the obligation of marine peril, the
owners - the captain.
the insurer becomes obligation of the
Common elements: absolute borrower to pay is
1. Exposure of security to marine peril; extinguished
2. Obligation of the debtor conditioned only Consensual contract Real contract
upon safe arrival of the security at the point
of destination. Hypothecary Nature of Bottomry/
Forms: Respondentia
1. Public instrument GENERAL RULE: The obligation of the borrower to
2. Policy signed by the contracting parties and pay the loan is extinguished if the goods given as
the broker taking part therein security are absolutely lost by reason of an accident
3. Private instrument (Art. 720) of the sea, during the voyage designated, and if it is
Contents: proven that the goods were on board.
1. Kind, name and registry of the vessel; EXCEPTIONS:
2. Name, surname and domicile of the captain; 1. Loss due to inherent defect;
3. Names, surnames and domiciles of the 2. Loss due to the barratry on the part of the
borrower and the lender; captain;
4. Amount of the loan and the premium 3. Loss due to the fault or malice of the borrower;
stipulated; 4. The vessel was engaged in contraband; and
5. Time for repayment; 5. The cargo loaded on the vessel be different in
6. Goods pledged to secure repayment; from that agreed upon.
7. Voyage during which the risk is run (Art.721)
Concurrence of Marine Insurance and Loan on
Bottomry/Respondentia
1. The insurable interest of the owner of a
BOTTOMRY/ ORDINARY LOAN
ship hypothecated by bottomry is only the
RESPONDENTIA (MUTUUM)
excess of the value over the amount
Not subject to Usury Subject to Usury Law secured by bottomry. (Sec. 101,
Law Insurance Code)
2. The value of what may be saved in case
Liability of the Not subject to any of shipwreck shall be divided between the
borrower is contingent contingency (absolute lender and the insurer in proportion to the
on the safe arrival of liability) interest of each one. (Art. 735)
the vessel or cargo at
destination Note: If a vessel is hypothecated by bottomry only
the excess is insurable, since a loan on bottomry
The last lender is a The first lender is a partakes of the nature likewise of an insurance
preferred creditor preferred creditor coverage to the extent of the loan accommodation.
The same rule would apply to the hypothecation of
the cargo by respondentia. (Pandect of Commercial
WHEN LOAN ON BOTTOMRY OR Law and Jurisprudence, Justice Jose Vitug, 1997
RESPONDENTIA REGARDED AS SIMPLE LOAN ed.)
1. Lender loaned an amount larger than the
value of the object due to fraudulent ACCIDENTS IN MARITIME COMMERCE
means employed by the borrower. 1. Averages
(ART.726) 2. Arrival Under Stress
2. Full amount of the loan is not used for the 3. Collision
cargo or given on the goods if all of them 4. Shipwreck
could not have been loaded, the balance
Share in the damage or expense
100% share In proportion to the value
of the owner’s property
saved
AVERAGE Right to recover
An extraordinary or accidental expense incurred No reimbursement There may be
during the voyage in order to preserve the cargo, reimbursement
vessel or both, and all damages or deterioration Kinds (not exclusive)
suffered by the vessel from departure to the port of Art. 809 Art. 811
destination, and to the cargo from the port of Procedure for recovery
loading to the port of consignment. (Art. 806)
1. Assembly and
The person whose property has been saved must
deliberation
contribute to reimburse the damage caused or
2. Resolution of the
expense incurred if the situation constitutes general
captain
average.
3. Entry of the resolution
Classes:
in the logbook
1. Particular or Simple Average
4. Detailed minutes
2. Gross or General Average
5. Delivery of the minutes
Where both vessel and cargo are saved, it is
to the maritime judicial
general average; where only the vessel or only the
authority of the first port,
cargo is saved, it is particular average.
within 24 hours from
Expenses incurred to refloat a vessel, which
arrival,
accidentally ran aground, in order to continue its
6. Ratification by captain
voyage, do not constitute general average. Not only
under oath. (Arts. 813-814)
is there absence of a marine peril, common safety
factor, and deliberateness. It is the safety of the
property, and not the voyage, which constitutes the GOODS NOT COVERED BY GENERAL AVERAGE
true foundation of general average. (A. Magsaysay, EVEN IF SACRIFICED
Inc. vs. Agan, G.R.No. L-6393, Jan. 31, 1955) 1. Goods carried on deck. (ART.855)
2. Goods not recorded in the books or
records of the vessel. (ART.855 (2))
3. Fuel for the vessel if there is more than
PARTICULAR OR GROSS OR GENERAL
sufficient fuel for the voyage. (Rule IX,
SIMPLE
York-Antwerp Rule)
Definition
Damages or expenses Damages or expenses Jettison
caused to the vessel or deliberately caused in order Act of throwing cargo overboard in order to
cargo that did not inure to save the vessel, its cargo lighten the vessel.
to the common benefit, or both from real and Order of goods to be cast overboard:
and borne by respective known risk. (Art. 811) 1. Those which are on the deck, preferring
owners. (Art. 809) the heaviest one with the least utility and
Requisites value;
1. common danger; 2. Those which are below the upper deck,
2. deliberate sacrifice; beginning with the one with greatest
3. success; weight and smallest value. (Art. 815)
4. proper formalities and
legal steps. Jettisoned goods are not res nullius nor deemed
Liability “abandoned” within the meaning of civil law so as to
The owner of the goods All the persons having an be the object of occupation by salvage. (Pandect of
which gave rise to the interest in the vessel and Commercial Law and Jurisprudence, Justice Jose
expense or suffered the the cargo therein at the Vitug, 1997 ed.)
damage shall bear this time of the occurrence of In order that the jettisoned goods may be
average. (Art. 810) the average shall contribute included in the gross or general average, the
to satisfy this average. (Art. existence of the cargo on board should be proven
812) by means of the bill of lading. (Art. 816)
The insurers (Art.859)
and lenders on bottomry York-Antwerp (Y-A) Rules on Determining
and respondentia shall Liability for Averages With Regard To Deck
likewise contribute. Cargo
(Art.732). 1. Deck cargo is allowed only in
Number of interests involved domestic/coastwise/inter-island shipping, and is
Only one interest Several interests involved prohibited in international/overseas/foreign
involved shipping.
2.
3. If deck cargo is loaded with the consent of the
shipper on overseas trade, it must always contribute
to general average, but should the same be
jettisoned, it would not be entitled to 5. Objections and protests shall likewise be
reimbursement because there is violation of the Y-A entered in the minutes.
Rules.
4. If deck cargo is loaded with the consent of the COLLISION
shipper on coastwise shipping, it must always Impact of two vessels both of which are moving.
contribute to general average and if jettisoned
would be entitled to reimbursement. Allision
Reason: In domestic shipping, voyages are Impact between a moving vessel and a stationary
usually short and the seas are generally not one.
rough. In overseas shipping, the vessel is Nautical Rules to Determine Negligence
exposed for many days to perils of the sea. 1. When two vessels are about to enter a port,
the farther one must allow the nearer to enter
DOMESTIC INTERNATIONAL first; if they collide, the fault is presumed to be
Deck cargo is allowed Deck cargo is not imputable to the one who arrived later, unless
allowed it can be proved that there was no fault on its
With shipper’s consent part.
General average Particular average 2. When two vessels meet, the smaller should
Without shipper’s consent give the right of way to the larger one.
Captain is liable Captain is liable 3. A vessel leaving port should leave the way
clear for another which may be entering the
ARRIVAL UNDER STRESS (ARRIBADA) same port.
The arrival of a vessel at the nearest and most 4. The vessel which leaves later is presumed to
convenient port instead of the port of destination, if have collided against one which has left earlier.
during the voyage the vessel cannot continue the 5. There is a presumption against the vessel
trip to the port of destination. which sets sail in the night.
6. There is a presumption against the vessel with
spread sails which collides with another which
When lawful When unlawful Who bears
is at anchor and cannot move, even when the
expenses:
crew of the latter has received word to lift
anchor, when there was not sufficient time to
The inability to 1. Lack of provisions The ship-owner
do so or there was fear of a greater damage or
continue voyage due to negligence to or ship agent is
other legitimate reason.
is due to lack of carry according to liable in case of
7. There is a presumption against an improperly
provisions, well- usage and customs; unlawful arrival
moored vessel.
founded fear of 2. Risk of enemy under stress. But
8. There is a presumption against a vessel which
seizure, not well known or they shall not be
has no buoys to indicate the location of its
privateers, manifest liable for the
anchors to prevent damage to vessels which
pirates, or 3. Defect of vessel damages caused
may approach it.
accidents of the due to improper by reason of a
9. Vessels must have “proper look-outs” or
sea disabling it repair; and lawful arrival.
persons trained as such and who have no
to navigate. (Art. 4. Malice, (Art. 821)
other duty aside therefrom. (Smith Bell v. CA)
819) negligence, lack of
foresight or skill of
Nautical Rules as to Sailing Vessel and
captain. (Art. 820)
Steamship
1. Where a steamship and a sailing vessel are
It is the duty of the captain to continue the approaching each other from opposite
voyage without delay after the cause of the arrival directions, or on intersecting lines, the
under stress has ceased failing in such duty renders steamship from the moment the sailing vessel
him liable. However, in case the cause has been risk is seen, shall watch with the highest diligence
of enemies, there must first be an assembly before her course and movements so as to be able to
departure. (Art. 825) adopt such timely means of precaution as will
Steps: necessarily prevent the two boats from coming
1. Captain should determine during the in contact.
voyage if there is well founded fear of 2. The sailing vessel is required to keep her
seizure, privateers and other valid course unless the circumstances require
grounds; otherwise.
2. Captain shall assemble the officers and
summon the persons interested in the
cargo who may attend the meeting but
without a right to vote;
3. The officers shall determine and agree if
there is well-founded reason after
examining the circumstances. The
captain shall have the deciding vote; Zones of Time in the Collision of Vessels
4. The agreement shall be drafted and the 1. First zone – all time up to the moment when risk
proper minutes shall be signed and of collision begins.
entered in the log book;
No rule is as yet applicable for none is necessary. MARITIME PROTEST
2. Second zone – time between moment when risk Condition precedent or prerequisite to recovery
of collision begins and moment it becomes a of damages arising from collisions and other
practical certainty. maritime accidents.
It is in this period where conduct of the vessels is It is a written statement made under oath by the
primordial. It is in this zone that vessels must captain of a vessel after the occurrence of an
strictly observe nautical rules, unless a departure accident or disaster in which the vessel or cargo is
therefrom becomes necessary to avoid imminent lost or damaged, with respect to the circumstances
danger. attending such occurrence, for the purpose of
3. Third zone – time when collision is certain and recovering losses and damages.
time of impact. Excuses for not filing protest: 1) where the
An error in this zone would no longer be legally interested person is not on board the vessel; and 2)
consequential. on collision time, need not be protested. (Art. 836)
Error in Extremis - sudden movement made by a Cases applicable:
faultless vessel during the third zone of collision 1. Collision (Art. 835);
with another vessel which is at fault during the 2nd 2. Arrival under stress (Art. 612(8));
zone. Even if such sudden movement is wrong, no 3. Shipwrecks (Arts. 612(15), 843);
responsibility will fall on said faultless vessel. 4. Where the vessel has gone through a
(Urrutia and Co. v. Baco River Plantation Co., 26 hurricane or when the captain believes
PHIL 632) that the cargo has suffered damages or
averages (Art. 624).
Cases Covered By Collision and Allision Who makes: Captain
1. One vessel at fault When made: within 24 hours from the time the
Vessel at fault is liable for damage caused to collision took place.
innocent vessel as well as damages suffered by the Before whom made: competent authority at the
owners of cargo of both vessels. (Art. 826) point of collision or at the first port of arrival, if in
2. Both vessels at fault the Philippines and to the Philippine consul, if the
Each vessel must bear its own loss, but the collision took place abroad. (Art. 835)
shippers of both vessels may go against the
shipowners who will be solidarily liable. (Art. 827) SHIPWRECK
3. Vessel at fault not known It is the loss of the vessel at sea as a
Each vessel must bear its own loss, but the consequence of its grounding, or running against an
shippers of both vessels may go against the object in sea or on the coast. It occurs when the
shipowners who will be solidarily liable. (Art. 828) vessel sustains injuries due to a marine peril
Doctrine of Inscrutable Fault – In case of rendering her incapable of navigation.
collision where it cannot be determined which If the wreck was due to malice, negligence or
between the two vessels was at fault, both lack of skill of the captain, the owner of the vessel
vessels bear their respective damage, but both may demand indemnity from said captain. (Art. 841)
should be solidarily liable for damage to the The rules on collision or allision, as may be
cargo of both vessels. pertinent, can equally apply to shipwrecks.
4. Third vessel at fault
The third vessel will be liable for losses and SPECIAL CONCEPTS
damages. (Art. 831) ARRASTRE SERVICE
5. Fortuitous event/force majeure A contract for the unloading of goods from a
No liability. Each bears its own loss. (Art. 830) vessel.
Applicability: Overseas trade only. (Commercial
The doctrine of res ipsa loquitur applies in case a Law Review, C. Villanueva, 2004 ed.)
moving vessel strikes a stationary object, such as a Significance: When a person brings in cargo
bridge post, dock, or navigational aid. (Far Eastern from abroad, he cannot unload and deliver the
Shipping v. CA, Luzon Stevedoring vs. CA) cargo by himself. The unloading must be done by
the arrastre operator, which will then deliver the
Even if the cause of action against the common cargo to the importer. (Commercial Law Review, C.
carrier is based on quasi-delict, the defense of due Villanueva, 2004 ed.)
diligence in the selection and supervision of Nature of business: It is a public utility,
employees is unavailing in case of a maritime tort discharging functions which are heavily invested
resulting in collision. It is not a civil tort governed by with public interest.
the Civil Code but a maritime one governed by Arts. Liability:
826-839 of the Code of Commerce. (Manila 1. Similar to a warehouseman (Lua Kian v. Manila
Steamship vs. Insa Abdulhaman) Railroad)
2. Similar to a common carrier (Northern Motors
Doctrine of Last Clear Chance and Rule on v. Prince Line)
Contributory Negligence cannot be applied in 3. Solidary liability with the common carrier
collision cases because of Art.827 of the Code of
Commerce. (Notes and Cases on the Law on Note: In order that the arrastre operator may be
Transportation and Public Utilities, Aquino, T. & held liable, the consignee must prove that the
Hernando, R.P. 2004 ed.) damage was due to the negligence and while the
goods are in the custody of the arrastre operator.
(Hartford Fire Insurance v. E. Razon, Inc.) the carrier immediately upon delivery
b. Latent damage: shipper should file a claim with
STEVEDORING SERVICE the carrier within three days from delivery.
The carriage of goods from the warehouse or
pier to the holds of the vessel. (Chief of Staff vs. Note: The filing of a notice of claim is not a
CIR) condition precedent.
As understood in the port business, the term
consists of the handling of cargo from the hold of PRESCRIPTIVE PERIOD
the ship to the dock, in case of pier-side unloading; Action for loss or damage to the cargo should be
or to a barge, in case of unloading at sea. (Anglo-Fil brought within one year after:
Trading Corp. vs. Lazaro) a. Delivery of the goods (delivered but
The loading on the ship of outgoing cargo is also damaged goods); or
part of stevedoring work. (Ibid.) b. The date when the goods should have
been delivered (non-delivery). (Sec. 3[6])
CONTAINERIZATION/ “SAID-TO-CONTAIN”/
“SHIPPER’S LOAD AND COUNT” SYSTEM “Loss or Damage” as applied to the COGSA
System whereby the shipper loads his cargoes in contemplates a situation where no delivery at all
a specially designed container, seals the container was made by the shipper of the goods because the
and delivers it to the carrier for transportation. The same had perished, gone out of commerce, or
carrier does not participate in the counting of the disappeared in such a way that their existence is
merchandise for loading into the container, the unknown or they cannot be recovered. Thus, it is
actual loading, and the sealing of the container. (US inapplicable in case of misdelivery or conversion.
Lines v. Comm. Of Customs, ICTSI v. Prudential (Ang vs. American Steamship Agencies Inc.) and
Guarantee) damage arising from delay or late delivery (Mitsui
The matter of quantity, description and O.S.K. Lines Ltd. vs. CA). In such instance the, Civil
conditions of the cargo inside the container is the Code rules on prescription shall apply.
sole responsibility of the shipper, unless there is
stipulation to the contrary. (US Lines vs. Comm. Of The one-year prescriptive period is suspended
Customs, Reyma Brokerage v. Phil. Home by:
Assurance) 1. The express agreement of the parties
(Universal Shipping Lines, Inc. vs. IAC,
Note: In order to attribute to the carrier any 188 SCRA 170)
damage to the shipment that may be found, 2. The filing of an action in court until it is
inspection of the goods should be done at pier-side . dismissed. (Stevens & Co. vs.
(Bankers vs. CA) Nordeutscher Lloyd, 6 SCRA 180)
III. CARRIAGE OF GOODS BY SEA ACT/COGSA The one-year period shall run from delivery of
(C.A. No. 65) the last package and is not suspended by
extrajudicial demand. (Dole Phils.,Inc. vs. Maritime
APPLICABILITY Co.,148 SCRA 118)
The transportation must be:
1. Water/maritime transportation; The one-year period shall run from delivery to
2. for the carriage of goods; and the arrastre operator and not to the consignee.
3. overseas/international/foreign (from (Union Carbide Phils, Inc. vs. Manila Railroad
foreign port to Philippine port). Co.,SCRA 359)
It can be applied in domestic sea transportation if
agreed upon by the parties. (Clause paramount or The insurer exercising its right of subrogation is
paramount clause) bound by the one-year prescriptive period.
However, it does not apply to the claim against the
IMPORTANT FEATURES: insurer for the insurance proceeds. (Fil. Merchants
1. Amount of carrier’s liability Ins. Co. vs. Alejandro; Mayer Steel Pipe Corp. vs.
2. Notice of damage CA)
3. Prescriptive period
IV. WARSAW CONVENTION OF 1929 (WC)
AMOUNT OF CARRIER’S LIABILITY
Under the Sec. 4(5), the liability limit is set at PURPOSE: To protect the emerging air
$500 per package or customary freight unit unless transportation industry and to secure the uniformity
the nature and value of such goods is declared by of recovery by the passengers.
the shipper. This is deemed incorporated in the bill APPLICABILITY
of lading even if not mentioned in it. (Eastern The transportation must be:
Shipping vs. IAC, 150 SCRA 463) 1. International transportation;
Note that Art. 1749, NCC applies to 2. Air transportation; and
domestic/inter-island/coastwise trade. 3. Carriage of passengers, baggage or
goods.
NOTICE OF DAMAGE (SEC. 3(6)) The WC shall also apply to fortuitous
Rules: transportation by aircraft performed by an air
a. Patent damage: shipper should file a claim with transportation enterprise.
for the purpose of loading, delivery, or
International transportation - any transportation transshipment.
in which the place of departure and the place of 3. Delay in the transportation of passengers,
destination are situated either: baggage or goods. (Art. 19)
1. Within the territories of two High
Contracting Parties regardless of whether or Note: The Hague Protocol amended the WC by
not there be a break in the transportation or removing the provision that if the airline took all
transshipment, or necessary steps to avoid the damage, it could
2. Within the territory of a single High exculpate itself completely (Art. 20(1)). (Alitalia vs.
Contracting Party, if there is an agreed IAC, 192 SCRA 9)
stopping place within a territory subject to the
sovereignty, mandate or authority of another LIMIT OF LIABILITY (Art. 22, as amended by
power, even though that power is not a party Guatemala Protocol, 1971; Alitalia vs. IAC)
to the Convention. (“round trip”, Am. Jur.) 1. Passengers
GENERAL RULE: $100,000 per passenger
Transportation to be performed by several EXCEPTION: Agreement to a higher limit
successive air carriers shall be deemed to be one
undivided transportation, if it has been regarded by
the parties as a single operation, whether it has
been agreed upon under the form of a single 2. Checked-in baggage
contract or of a series of contracts, and it shall not GENERAL RULE: $20 per kilogram
lose its international character merely because one EXCEPTION: In case of special declaration of
contract or a series of contracts is to be performed value and payment of a supplementary sum by
entirely within a territory subject to the sovereignty, consignor, carrier is liable to not more than the
suzerainty, mandate, or authority of the same High declared sum unless it proves the sum is greater
Contracting Party. (Art. 1 Sec.3) than actual value.
3. Hand-carried baggage
WHEN INAPPLICABLE $1000/passenger
1. When public policy is contradicted; 4. Goods to be shipped
2. If the requirements under the Convention GENERAL RULE: $20 per kilogram
are not complied with. EXCEPTION: In case of special declaration of
value and payment of a supplementary sum by
IMPORTANT CONCEPTS: consignor, carrier is liable to not more than the
1. Transportation documents declared sum unless it proves the sum is greater
a. Passenger ticket than actual value.
b. Baggage check
c. Air way bill An agreement relieving the carrier from liability
2. Liability of the carrier for damages or fixing a lower limit is null and void. (Art. 23)
a. Death or injury to passengers Carrier is not entitled to the foregoing limit if the
b. Loss or damage to baggage or goods damage is caused by willful misconduct or default
c. Delay on its part. (Art. 25)
3. Successive carrier agreement
4. Jurisdiction Thus, the WC does not operate as an exclusive
5. Combined transportation agreement enumeration of the instances of an absolute limit of
the extent of liability. It does not preclude the
PASSENGER BAGGAGE AIR WAYBILL application of the Civil Code and other pertinent
TICKET CHECK local laws. It does not regulate or exclude liability
Passenger Checked-in Goods to be for other breaches of contract by the carrier, or
baggage shipped misconduct of its employees, or for some particular
or exceptional type of damage. (Alitalia vs. CA)
LIABILITY OF CARRIER FOR DAMAGES
1. Death or injury of a passenger if the accident In PanAm v. IAC, the WC was applied as regards
causing it took place on board the aircraft or in the the limitation on the carrier’s liability, there being a
course of its operations of embarking or simple loss of baggage without any improper
disembarking; (Art. 17) conduct on the part of the officials or employees of
2. Destruction, loss or damage to any baggage or the airline or other special injury sustained by the
goods, if it took place during the “transportation by passenger.
air”; (Art. 18) and
Transportation by air – The period during which In KLM Royal v. Tuller, the WC has invariably
the baggage or goods are in the charge of the been held inapplicable, or as not restrictive of the
carrier, whether in an airport or on board an carrier’s liability, where there was satisfactory
aircraft, or, in case of a landing outside an airport, evidence of malice or bad faith attributable to its
in any place whatsoever. officers and employees. (Alitalia vs. IAC)
It includes any transportation by land or water
outside an airport if such takes place in the
performance of a contract for transportation by air,
ACTION FOR DAMAGES c. Court where it has a place of business
1. Notice of claim through which the contract has been
A written complaint must me made within: made; or
a. 3 days from receipt of baggage d. Court of the place of destination. (Art.
b. 7 days from receipt of goods 28(1))
c. In case of delay, 14 days from receipt of NOTE: It is the passenger’s “ultimate destination”
baggage/goods not “an agreed stopping place” that determines the
The complaint is a condition precedent. Without country where suit is to be filed.
the complaint, the action is barred except in case of The forum of action provided in Art. 28(1) is a
fraud on the part of the carrier. (Art. 26) matter of jurisdiction rather than of venue. (Santos
III vs. Northwest; 2A C.J.S.)
2. Prescriptive period
Action must be filed within 2 years from: V. SALVAGE LAW (Act No. 2616)
a. date of arrival at the destination
b. date of expected arrival SALVAGE
c. date on which the transportation stopped. Two concepts:
(Art. 29) 1. Services one person renders to the owner of a
ship or goods, by his own labor, preserving the
In United Airlines vs. Uy the two-year prescriptive goods or the ship which the owner or those
period was not applied where the airline employed entrusted with the care of them have either
delaying tactics. abandoned in distress at sea, or are unable to
protect or secure.
RULE IN CASE OF VARIOUS SUCCESSIVE 2. Compensation allowed to persons by whose
CARRIERS voluntary assistance a ship at sea or her cargo or
1. Carriage of passengers both have been saved in whole or in part from
GENERAL RULE: Action is filed only against the impending sea peril, or such property recovered
carrier in which the accident or delay occurred. from actual peril or loss, as in cases of shipwreck,
EXCEPTION: Agreement or contract whereby the derelict or recapture.
first carrier assumed liability for the whole journey. Requisites:
2. Carriage of baggage or goods 1. Valid object of salvage;
a. Passenger or consignor can file an action 2. Object must have been exposed to marine
against the first carrier and the carrier in peril (not perils of the ship);
which the damage occurred 3. Services rendered voluntarily (neither an
b. Passenger or consignee can file an action existing duty nor out of a pre-existing
against the last carrier and the carrier in contract);
which the damage occurred. 4. Services are successful, total or partial.
These carriers are jointly and severally Subjects of Salvage:
liable. (Art. 30) 1. Ship itself;
2. Jetsam – goods which are cast into the sea, and
A contract of international carriage by air, there sink and remain under water;
although performed by different carriers under a 3. Floatsam or Flotsam – goods which float upon
series of airline tickets constitutes a single the sea when cast overboard;
operation. Members of the International Air 4. Ligan or Lagan – goods cast into the sea tied to a
Transportation Association (IATA) are under a buoy, so that they may be found again by the
general pool partnership agreement wherein they owners (p.173, Judge Diaz).
act as agent of each other in the issuance of tickets Persons who have no right to a reward for
to contracted passengers to boost ticket sales salvage:
worldwide and at the same time provide passengers 1. Crew of the vessel saved;
easy access to airlines which are otherwise 2. Person who commenced Salvage in spite of
inaccessible in some parts of the world. (American opposition of the Captain or his representative;
Airlines vs. CA) 3. In accordance with Sec. 3 of the Salvage Law,
a person who fails to deliver a salvaged vessel or
Under a general pool partnership agreement, the cargo to the Collector of Customs.
ticket-issuing airline is the principal in a contract of
carriage while the endorsee-airline is the agent. Derelict – a ship or her cargo which is
The obligation of the former remained and did not abandoned and deserted at sea by those who are in
cease even when the breach occurred not on its charge of it, without any hope of recovering it, or
own flight but on that of another airline which had without any intention of returning to it.
undertaken to carry the passengers to one of their
destinations. (China Airlines vs. Chiok) The intention of those in charge must be
ascertained. If those in charge left with the
JURISDICTION intention of returning, or of procuring assistance,
At the option of the plaintiff, the action for the property is not derelict, but if they quitted the
damages may be filed in the: property with the intention of finally leaving it, it is
a. Court of domicile of the carrier; derelict and a change of their intention and an
b. Court of its principal place of business; attempt to return will not change its nature
(Erlanger & Galinger vs. Swedish East Asiatic Co.
Ltd.). PURPOSES:
1. To secure adequate, sustained service for
If it is clear that the intention to return is slight, the public at the least possible cost;
the salvage which was done thereafter is considered 2. To protect the public against
valid. (Notes and Cases on the Law on unreasonable charges and poor,
Transportation and Public Utilities, Aquino, T. & inefficient service;
Hernando, R.P. 2004 ed. p. 616) 3. To protect and secure investments in
public services;
CONTRACT OF TOWAGE 4. To prevent ruinous competition.
A contract whereby one vessel, usually
motorized, pulls another, whether loaded or not AUTHORITY TO OPERATE PUBLIC SERVICES
with merchandise, from one place to another, for a GENERAL RULE: No public service shall operate
compensation. It is a contract for services rather without having been issued a certificate of public
than a contract of carriage. convenience or a certificate of public convenience
and necessity.
EXCEPTIONS:
SALVAGE TOWAGE 1. Warehouses;
2. Animal drawn vehicles and bancas moved
Governed by special Governed by Civil Code
by oar or sail;
law (Act No. 2616) on contract of lease
3. Airships, except for the fixing of maximum
rates for fare and freight;
Requires success, Success is not required 4. Radio companies, except for rates fixing;
otherwise no payment 5. Public services owned or operated by the
government, except as to rates fixing;
Must be done with the Only the consent of the 6. Ice plants; and
consent of the tugboat owner is 7. Public markets.
captain/crewmen needed
Vessel must be Vessel need not be PUBLIC SERVICE
involved in an accident involved in an accident A person who owns, operates, manages or
controls in the Philippines for hire or compensation,
Fees distributed Fees belong to the with general or limited clientele, whether
among crewmen tugboat owner permanent, occasional or accidental, and done for
general business purposes, any common carrier or
public utility, ice plants, power and water supplies,
RULES ON SALVAGE REWARD
communication and similar public services. (Sec.
1. The reward is fixed by the RTC judge in the
13b, CA 146)
absence of agreement or where the latter is
A casual or incidental service devoid of public
excessive. (Sec. 9)
character and interest is not brought within the
2. The reward should constitute a sufficient
category. The question depends on such factors as
compensation for the outlay and effort of the
the extent of services, whether such person or
salvors and should be liberal enough to offer
company has held himself or itself out as ready to
an inducement to others to render services in
serve the public or a portion of the public generally.
similar emergencies in the future.
(Luzon Stevedoring vs. PSC)
3. If sold (no claim being made within 3 months
from publication), the proceeds, after
NOTE: The Public Service Commission created
deducting expenses and the salvage claim,
under the Public Service Law has already been
shall go to the owner; if the latter does not
abolished under P.D. No. 1 and other issuances. It
claim it within 3 years, 50% of the said
has been replaced by the following government
proceeds shall go to the salvors, who shall
agencies: LTO; LTFRB; ATO; BOE; NTC; NEA; ERB;
divide it equitably, and the other half to the
NWRC; CAB; and MIA.
government. (Secs. 11-12)
4. If a vessel is the salvor, the reward shall be
distributed as follows:
CERTIFICATE OF CERTIFICATE OF
a. 50% to the shipowner;
PUBLIC PUBLIC
b. 25% to the captain; and
CONVENIENCE CONVENIENCE AND
(CPC) NECESSITY (CPCN)
c. 25% to the officers and crew in
proportion to their salaries. (Sec. 13)
KABIT SYSTEM
A system whereby a person who has been
granted a certificate of public convenience allows
other persons who own motor vehicles to operate
under such license, for a fee or percentage of such
earnings. It is void and inexistent under Art. 1409,
Civil Code.
Effects:
1. The transfer, sale, lease or assignment of the
privilege granted is valid between the
contracting parties but not upon the public or
third persons. (Gelisan vs. Alday, 154 SCRA
388)