LAWS ON TRANSPORTATION AND PUBLIC UTILITIES Carriage by Sea by Cabotage and co-loading of

Foreign Vessels foreign vessels that are

 Common carriers are persons, corporations, firm or sanctioned under RA covererd by RA 10668,
associations engaged in the business of carrying or 10668 carriage shall be governed by
transporting passengers or goods or both, by land, water COGSA
or air, for compensation, offering their services to the Overland Transportation 1. Civil Code
public (Art. 1372, CC). 2. Code of Commerce
Air Transportation 1. Civil Code
 It makes no distinction between one whose 2. Code of Commerce
principal business activity is the carrying of 3. For international carriage -
persons or goods or both and one who does such Warsaw Convention
carrying only as an ancillary activity.
 Common carriers, from the nature of their business and
 Art. 1372 avoids any distinction between a person for reasons of public policy, are bound to observe
or an enterprise offering transportation on a EXTRAORDINARY DILIGENCE in the vigilance over
regular and scheduled basis and one offering the goods and for the safety of the passengers
transportation service on occasional, episodic, transported by them, according to all the circumstances
and unscheduled basis. Neither does the law of each case (1733).
distinguish between a carrier offering its services for  They are bound to carry the PASSENGERS safely
the general public and one who offers business as far as human care and foresight can provide,
only from a narrow segment of the general using the utmost diligence of very cautious persons,
population. with due regard for all the circumstances (1755).

 A charter party may transform a common carrier into a  In case of death or injury to passengers, common
private carrier. However, it must be a bareboat or carriers are presumed to have been at fault or to
demise charter (where the charterer mans the vessel have acted negligently, unless they prove that they
with his own people and becomes, in effect, the owner observed extraordinary diligence as prescribed in
for the voyage or service stipulated. Arts. 1733 and 1755 (1756).
 The law imposes to common carriers strict
 The common carrier is not transformed into a liability, as long as it is shown that there exists
private carrier if the charter party is a contract of a contract between the passenger and
affreightment like a voyage or time charter. the common carrier and that the loss,
deterioration, injury or death took place
 Spouses Cruz v. Sun Holidays - the operator of a during the existence of the contract.
beach resort that accepts clients by virtue of tour-
package contracts that included transportation to and  Defense of Common Carrier: EL
from the resort and the point of departure in Batangas is 1. Exercise of extraordinary diligence;
considered a common carrier. Its ferry services are so 2. If Loss, destruction or deterioration of the goods is
intertwined with its main business as to be properly due to any of the following causes: FAACO
considered ancillary thereto. a. Flood, storm, earthquake, lightning or other
natural disaster or calamity;
COMMON CARRIER PRIVATE CARRIER b. Act of the public enemy in war, whether
Holds himself out in common, Agrees in some special case international or civil;
that is, to all persons who with some private individual c. Act or omission of the shipper or owner of the
choose to employ him, ready to carry for hire. goods;
to carry for hire. d. Character of the goods or defects in the
Bound do carry for all who Not bound to carry for any packing or in the containers;
offer such goods as it is reason, unless it enters a e. Order or act of competent public authority.
accustomed to carry and special agreement to do so.
tender reasonable  De Guzman v. CA - Carrier was not held liable where
compensation for carrying the goods were lost as a result of robbery attended by
them. grave irresistible threat, violence or force.
Subject to regulation, as it is Not subject to regulation.
public service.  Fortune Express v. CA - Seizure of passenger bus by
Bound to exercise Owes only diligence of a good armed men is not a fortuitous event and does not excuse
extraordinary diligence. father of a family. the carrier from liability where there was already a report
Cannot stipulate that it is May validly enter into such from police agents that a certain group will attack the
exempt from liability from the stipulation. buses and the carrier did not take steps to safeguard the
negligence of its agents or lives and properties of its passengers.
employees.
 Requisites of Caso Fortuito: CURD
Transactions Governing Laws 1. The Cause of the breach of the obligation must be
Coastwise shipping 1. New Civil Code independent of the will of the debtor;
2. Code of Commerce 2. The event must be either Unforeseeable or
Carriage by Sea from 1. New Civil Code unavoidable;
Foreign Ports to Phil. 2. Code of Commerce 3. The event must be such as to Render it impossible
Ports 3. COGSA fore the debtor to fulfill his obligation in a normal
Carriage by Sea from Phil. Laws of the country to which manner; and
Ports to Foreign Ports the goods are to be 4. The Debtor must be free from any participation in,
transported or aggravation of, the injury to the creditor.
 Phil. American General Insurance Company v. PKS warehouse of the carrier at Once created, the relationship
Shipping - The sinking of a barge that was being towed the place of destination, until will not ordinarily terminate
by a tug boat was the result of a fortuitous event when it the consignee has been until the passenger has, after
resulted because the barge was suddenly tossed by advised of the arrival of the reaching his destination,
waves of extraordinary height and buffeted by goods and has had safely alighted from the
strong winds resulting in the entry of water into the reasonable opportunity carrier’s conveyance or has
barge’s hatches. thereafter to remove them or had a reasonable opportunity
otherwise dispose of them. to leave the carrier’s
 Fortuitous even, to be a valid defense, must be premises. All persons who
established to be the PROXIMATE CAUSE OF THE Delivery of goods to custom remain on the premises
LOSS. authorities is not delivery to within a reasonable time after
the consignee. leaving the conveyance are to
 Cokaliong Shipping Lines v. UCPB - Here, fire was be deemed passengers, and
not considered a natural calamity or disaster for having what is reasonable time or a
originated from an unchecked crack in the fuel oil reasonable delay within this
service tank. It could not have been caused by force rule is to be determined from
majeure, but by an act of man. all the circumstances, and
includes reasonable time to
 Contributory negligence on the part of the passenger look after his baggage and
is not a defense that will excuse the carrier from liability. prepare for his departure.
It will only mitigate such liability.
DEFENSES
 Southern Lines v. CA - The carrier, knowing the fact of 1. Ordinary Circumstance: 1. Exercise of extraordinary
improper packing of the goods upon ordinary Exercise of Extraordinary diligence
observation, still accepts the goods notwithstanding such diligence. 2. Caso fortuito
condition, is not relieved of liability or loss or injury 2. Special circumstances:
resulting therefrom. FAACO

 Dangwa Transportation v. CA - A public utility bus,
once is stops, is in effect making a continuous offer to
bus riders. It is the duty of carriers of carriers of
passengers to stop their conveyances for a reasonable
length of time in order to afford passengers an
opportunity to board and enter, and they are liable for
injuries suffered by boarding passengers resulting from
the sudden starting up or jerking of their conveyances.
CARRIAGE OF GOODS CARRIAGE OF
PASSENGERS
PARTIES
1. Common Carrier 1. Common Carrier
2. Shipper 2. Passenger
3. Owner
CAUSE OF LIABILITY
Delay in delivery, loss, Death or injury to the
destruction, deterioration of passengers.
goods.
DURATION OF LIABILITY
From the time the goods are The carrier is bound to
unconditionally placed in the exercise utmost diligence with
possession of and received by respect to passengers the
the carrier for transportation, moment the person who
until the same are delivered purchases the ticket from the
actually or constructively by carrier presents himself at the
the carrier to the consignee proper place and in a proper
or to the person who has the manner to be transported.
right to receive them.
It is the duty of carriers of
It remains in full force and carriers of passengers to stop
effect even when they are their conveyances for a
temporarily unloaded or reasonable length of time in
stored in transit, unless the order to afford passengers an
shipper or owner has made opportunity to board and
use of the right of stoppage enter, and they are liable for
in transitu. injuries suffered by boarding
passengers resulting from the
It continues to be operative sudden starting up or jerking
even during the time the of their conveyances.
goods are stored in a
 LIABILITY FOR ACTS OF EMPLOYEES and
PASSENGERS
 Common carriers are liable for the death of or
injuries to passengers thru the negligence or willful
acts of the former’s EMPLOYEES, although such
employees may have acted beyond the scope of
their authority or in violation of the orders of the
common carriers.
This liability does not cease upon proof that they
exercised all the diligence of a good father of the
family in the selection and supervision of their
employees (1759).
 The liability of the carrier for the personal
violence of its employees or agents upon
its passengers extends only to those acts
which the carrier could foresee or avoid thru
the exercise of the degree of diligence
required.
 The carrier is not liable for acts of the
employee not on duty or in the line of duty.
However, the rule on strangers apply to them.
 A common carrier is responsible for injuries suffered
by a passenger on account of the willful acts or
negligence of other passengers or of
strangers, if the common carrier’s employees
thru the exercise of the diligence of a good
father of the family could have prevented or
stopped the act (1763).
 Reduction of Diligence - The parties cannot stipulate
so as to totally exempt the carrier from exercising any
degree of diligence whatsoever; and that the parties that
the common carrier shall exercise diligence less than the
diligence of a good father of a family.
 In other words, in CARRIAGE OF GOODS, the
parties may stipulate that the diligence to be
exercised by the common carrier be less than the
extraordinary diligence, provided that the following
requisites are complied with: WSR
1. Stipulation be in Writing signed by both
 parties;
2. It be Supported by a valuable consideration
other than the service rendered by the
common carrier;
3. It be Reasonable, just, and not contrary to
law.
 No reduction is allowed in carriage of PASSENGERS.
 Valid stipulations relative to liability of common
carriers:
1. Agreement limiting the common carrier’s liability for
delay on account of strikes or riots;
2. Stipulation that common carrier’s liability is limited
to the value of the goods appearing in the bill of
lading unless the shipper or owner declares a
greater value;
3. Contract fixing the sum that may be recovered by
owner or shipper for the loss, destruction or
deterioration of the goods, if it is reasonable and
just under the circumstances and has been
fairly and freely agreed upon;
4. When a passenger is carried gratuitously, a
stipulation limiting the carrier’s liability for
negligence is valid, but not willful acts or gross
negligence. However, reduction of fare does not
justify any limitation of liability (1758).
 Invalid stipulations with common carriers: GLEN4
1. Goods are transported at the risk of the owner or
shipper;
2. 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;
3. Carrier shall Exercise a degree of diligence less than
that of a good father of a family over the movable
transported;
4. Carrier will Not be liable for any loss, destruction or
deterioration of the goods;
5. Carrier Need not observe any diligence in the
custody of the goods;
6. Carrier shall Not be responsible for the acts or
omissions of his or its employees;
7. Carrier is Not responsible for the loss, destruction,
or deterioration of the goods on account of the
defective condition of the car, vehicle, ship, or other
equipment used in the contract of carriage.
CARRIAGE OF GOODS BY SEA ACT (COGSA)
 If the goods are to be shipped from a foreign port to the
Philippines, the COGSA shall apply suppletorily.
 Under the COGSA, the liability of the carrier is US$500
per package in the absence of a shipper’s declaration of
a higher value in the bill of lading.
 Eastern Shipping v. IAC - If the goods are shipped in
cartons, each carton is considered a package even if they
are stored in container vans.
 Belgian Overseas Chartering v. Phil. First. Ins. Co.
- The Court considered each coil as a package and
awarded $500 per coil.
 Cokaliong Shipping Lines v. UCPB - a
shipper/consignee that undervalues the real worth of the
goods it seeks to transport does not only violate a valid
contractual stipulation, but commits a fraudulent act
when it seeks to make the common carrier liable for
more than the amount it declared in the bill of lading.
REGISTERED OWNER RULE
 The person who is the registered owner of a vehicle is
liable for any damages caused by the negligent operation
of the vehicle although the same was already sold or
conveyed to another person at the time of the accident.
 The registered owner is liable to the injured party
subject to his right of recourse against the transferee or
the buyer.
 The registered owner is also liable even if the vehicle was
least to another person.
 The registered owner is not liable if the vehicle was
taken from his garage without his knowledge and
consent.
 KABIT SYSTEM - arrangement whereby a person who
has been granted a certificate of public convenience
allows other persons who own motor vehicles to operate
them under his license, sometimes for a fee or
percentage of the earnings.
 The registered-owner rule is applicable whenever
persons involved are engaged in kabit system.
 What is the basis of a cause of action of a
passenger -
 against the COMMON CARRIER?
 Culpa contractual.
 against the DRIVER?
 Either culpa aquiliana or culpa delictual.
 The driver of the carrier, not being an agent
but an employee, has himself no contractual
relationship with the passenger. However, the
same act or omission may give rise to both
causes of action. Tort may be a mode of
breach.
 against a THIRD PERSON?
 If the negligence of third persons concurs with
the breach, the liability of the third person who
was driving the vehicle and/or his employer
may be based on quasi-delict. He mau also
be held criminally liable and civil liability may
be imposed on him based on delict. In the
latter case, the employer is subsidiarily liable.
 In case the negligence of the carrier’s driver
and a third person concurs, the liability of the
parties is joint and several (solidary).
 An ARRASTRE is not a common carrier. The legal
relationship between the consignee and the arrastre
operator is akin to that of a depositor and a
warehouseman.
PASSENGER BAGGAGES
Baggage in the custody of Baggage in the custody of
the passengers or their the carrier (checked-in)
employees (hand-carried)
Considered as necessary Considered as goods (as
deposits. contemplated by Art. 1372)
Requires ordinary diligence. Requires extraordinary
 diligence.
The common carrier shall be In case of loss or damage,
responsible for the baggage the carrier is presumed
as depositaries, provided that negligent.
notice was given to them or
its employees, and the
passenger took the necessary
precaution, which the carrier
has advised them relative to
the care and vigilance of their
baggage.
The act of the thief or robber,
who has entered the common
carrier’s vehicle is not
deemed force majeure,
unless it is done with the use
of arms or thru an irresistible
force.
 SUCCESSIVE CARRIERS - In Maritime Law, the second
carrier shall assume the obligations of the first carrier,
but the second carrier has a right of action against the
first carrier, if the latter is directly responsible for the
fault giving rise to the claim of the shipper or consignee.
 Liability of successive air carriers - An airline
ticket providing that [carriage of successive air
carriers is to be regarded as a “single
operation”] is to make the issuer-carrier liable for
the tortuous conduct of the other carrier.
MARITIME LAW
 Maritime law - the system of laws which particularly
relates: ASCM
a. to the Affairs and business of the sea;
b. To Ships;
c. To their Crews and navigation; and
d. To Marine conveyance of persons and property.
 Vessel - any kind, class or type of craft or artificial
contrivance capable of floating in water, designed to be
used or capable of being used as a means of water
transport, for the carriage of passengers or cargo or
both, utilizing its own motive power or that of another.
 They are registered with the Maritime Industry
Authority (MARINA).
 Any unregistered transfer shall not affect third
persons but is considered binding on the parties.
 A Philippine flag vessel or watercraft is one that is
registered with Philippine laws. It entitles the
vessel to protection of the authorities and flag of
the Philippines in all ports and on the high seas.
 The real and hypothecary nature of maritime law
means that the liability of the carrier in connection with
issues related to maritime contracts is confined to the
vessel, which is hypothecated for such obligations or
which stands as the guaranty for their settlement.
 It was designed to offset adverse conditions and
encourage people and entities to venture into
maritime commerce despite the risks and the
prohibitive cost of shipbuilding.
 Thus, the liability of the vessel owner and agent
arising from the operation of such vessel were
confined to the vessel itself, its equipment, freight
and insurance, if any, which limitation served to
induce capitalists into effectively wagering their
resources against the consideration of the large
profits attainable in the trade.
 LIMITED LIABILITY RULE - The exclusively real and
hypothecary nature of maritime law operates to limit the
liability of the shipowner to the value of the vessel,
earned freightage, and proceeds of the insurance, if any.
NO VESSEL, NO LIABILITY expresses in a nutshell the
limited liability rule.
 The total destruction of the vessel extinguishes
maritime lien, as there is no longer any res to which
it can attach.
 When applicable? It applies in the following
cases: CCU
1. Civil liability for indemnities in favor of third
persons which arise from the conduct of the
captain in the care of the goods which the
vessel carried;
2. Civil liability arising from collisions;
3. Unpaid wages of the captain and the crew if
the vessel and its cargo are totally lost by
reason of capture or shipwreck.
 Cases when doctrine cannot be applied
(exceptions): WII
1. Workmen’s Compensation claims;
2. Injury or death of a passenger is due to the
fault of the shipowner, or to the concurring
negligence of shipowner and captain;
3. When vessel is Insured.
 ABANDONMENT - The shipowner or ship agent may
exempt themselves from liability by abandoning the
vessel with all her equipment and the freight it may have
earned during the voyage.
 If there is insurance over the vessel, abandonment
covers the insurance proceeds while the vessel itself
shall be abandoned in favor of the insurer.
 Who can invoke the Limited Liability Rule? The
SHIPOWNER. He is the person for whom the rule has
been conceived. The charterer cannot invoke the limited
liability rule as a defense especially against the
shipowner.
 How are claims satisfied under the LLR? All claims
should be collated before they can be satisfied from what
remains of the insurance proceeds and freightage at the
time of the loss. No claimant should be given preference
over the others by the simple expedience of having filed
or completed its action earlier than the rest.
 Thus, the execution of judgment in earlier
completed cases, even those already final and
executory, must be stayed pending completion of all
cases occasioned by the subject sinking.
 CO-LOADING AND CABOTAGE - RA 10668 is the “act
allowing foreign vessels to transport and co-load foreign
for domestic transhipment and for other purposes. This is
the CABOTAGE LAW for marine transportation.
 The transportation must involve FOREIGN
VESSELS.
 A foreign vessel that is undertaking co-loading and
cabotage is not considered a common carrier
and the carriage shall be governed by the COGSA.

 Co-loading - agreements between 2 or more
international or domestic sea carriers whereby a sea
carrier bound for a specified destination agrees to
load, transport, and unload the container van or
cargo of another carrier bound for the same
destination.
 A FOREIGN VESSEL:
a. Arriving from a foreign port, shall be allowed
to carry a foreign cargo to its Philippine port of
final destination, after being cleared at its port
of entry;
b. Arriving from a foreign port, shall be allowed
to carry a foreign cargo by another foreign
vessel calling at the same port of entry to the
Philippine port of final destination of such
foreign cargo;
c. Departing from a Philippine port of origin thru
another Philippine port to its foreign port of
final destination, shall be allowed to carry a
foreign cargo intended for export; and
d. Departing from a Philippine port of origin, shall
be allowed to carry a foreign cargo by another
foreign vessel thru a domestic transshipment
port and transferred at such domestic
transshipment port to its foreign port of final
destination.
 An empty foreign container van going to or coming
from any Philippine port, or going to or coming from
a foreign port, and being transshipped between 2
Philippine ports, shall be allowed
 Transshipment - transfer of cargo from 1
vessel or conveyance to another vessel for
further transit to complete the voyage and
carry the cargo to its final destination.
 MARITIME PROTEST - Written statement by the
master of a vessel or any authorized officer, Attested by
proper officer or a notary, To the effect that damages
has been suffered by the ship WAT.
 When required? SAC-C
1. Shipwreck of a vessel;
2. Arrival under stress of the vessel;
3. When Captain believes that the cargo has
suffered damages or averages;
4. Maritime Collisions.
COLLISION
COLLISION ALLISION
When 2 moving objects strike When a moving object strikes
each other. a stationary object.
 In a collision, the vessel at fault shall indemnify the
damages sustained or losses incurred, and if both vessels
were at fault, each shall suffer its own damages, and
both shall be solidarily liable to others.
 Doctrine of INSCRUTABLE FAULT - where fault
is established but it cannot be determined which of
the 2 vessels were at fault, both shall be deemed to
have been at fault.
 Rules on Collision of Vessels:
a. Collision may be due to the fault, negligence, or
lack of skill of the captain, sailing mate, or any
other member of the complement of the vessel. The
owner of the vessel at fault shall be liable for loss or
damages.
b. Collision may be due to the fault of both vessels.
Each vessel shall suffer its own losses, but as
regards the owner of the cargoes, both vessels shall
be jointly and severally liable.
c. If it cannot be determined which vessel is at fault,
each vessel shall also suffer its own losses and both
shall be solidarily liable for losses or damages on
the cargoes.
d. The vessels may collide with each other thru
fortuitous event or force majeure. In this case,
each shall bear its own damage.
e. 2 vessels may collide with each other without their
fault but by reason of a third vessel. The third
vessel will be liable for losses and damages.
f. A vessel which is properly anchored and moored
may collide with those nearby by reason of storm or
other cause of force majeure. The vessel run into
shall suffer its own damage or expense.
 There are 3 zones in collission:
1. First zone - time up to the moment when risk of
collision begins.
2. Second zone - time between moment when risk of
collision begins up to the moment it becomes a
practical certainty.
3. Third zone - time when collision is certain up to
the time of impact.
 Doctrine of ERROR IN EXTREMIS - If a vessel
having a right of way suddenly changes its course
during the third zone, in an effort to avoid an
imminent collision due to the fault of another vessel,
such act may be said to be done in extremis, and,
even if wrong, cannot create responsibility on
the part of said vessel with the right of way.
ARRIVAL UNDER STRESS
 It is the arrival of the vessel at the nearest and most
convenient port, if during the voyage the vessel cannot
continue the trip to the port of destination due to: LAW
1. Lack of provisions (food);
2. Accident of the sea disabling it to navigate; or
3. Well-founded fear of seizure, privateers, or pirates.
 Persons involved in Maritime Commerce: SCOS
1. Shipowners and ship agents;
2. Captains and masters of the vessel;
3. Officers and crew of the vessel;
4. Supercargoes.
 Ship agent - entrusted with the provisioning and
representing the vessel in the port which it may be
found. Liability is same with shipowner. He is
solidarily liable with the owner for loss or damage to
passengers or cargo, subject to his right to claim
reimbursement from shipowner.
 Triple roles of the CAPTAIN: GCG
1. General agent of shipowner;
2. Commander and technical director of the
vessel - most important; it has to do with the
operation of the vessel and the protection of
the passengers, crew, and cargo;
3. Government representative of the country
 under whose flag he navigates.
 Grounds for the discharge of a
captain: HIRD
a. Habitual drunkenness;
b. Insubordination in serious matters;
c. Robbery or theft;
d. Damage caused to the vessel or to
its cargo thru malice or manifest or
proven negligence.
 OFFICERS AND CREW OF THE VESSEL: F-SEM
1. First mate;
2. Second mate;
3. Engineers;
4. Members of the crew.
 SUPERCARGOES - person who discharges
administrative duties assigned to him by show agent
or shippers, keeping an account and record of
transaction as required in the accounting book of
the captain.
GENERAL AVERAGE vs. PARTICULAR AVERAGE
 GENERAL AVERAGE - includes all damages and
expenses which are deliberately caused in order to
save the vessel, its cargo, or both at the same time
from real and known risk.
 Requisites: CP-SNS
1. There must be a Common danger to the
vessel or cargo;
2. Part of the vessel or cargo was sacrificed
deliberately;
3. The Sacrifice must be for the common safety
or for the benefit of all;
4. It must be Necessary;
5. It must be Successful.
 FORMALITIES must be complied with for the
claim for contribution to prosper. The formalities are
as follows: RESM
1. Resolution of the captain, adopted after
deliberation with other officers of the vessel
and after hearing all persons interested in the
cargoes.
 If the latter disagree, the decision of the
captain prevails, but they shall register
their objections.
2. Resolution must be Entered in the logbook,
stating the reasons and motives for the
dissent, and the irresistible and urgent causes
if he acted in his own accord.
3. It must be Signed:
a. In the first case, by all persons present
in the hearing;
b. In the second case, by the captain and
all officers of the vessel.
4. The Minutes must contain a detail of the
goods jettisoned and injuries caused to those
on board.
 PARTICULAR AVERAGE - expenses and damages
caused to the vessel or to her cargo which have not
inured to the benefit and common profit of al the
persons interested in the vessel and her cargo.
 A. Magsaysay, Inc. v. Agan - It is the safety of
the property, and not of the voyage, which
constitutes the true foundation of general average.
It appears that the cargoes could have been
unloaded by the owners if they have been required
to do so without need of expensive refloating
operations.
CHARTER PARTY
 Concept: It is a contract by which the entire ship or
some principal part thereof is let by the owner to
another person for a specified PERIOD OF TIME or
USE.
 2 TYPES of charter party:
1. Contract of affreigtment - involves the use
of shipping space leased by the owner in part
or as a whole, to carry the goods of others.
a) Time charter - leased for a fixed period
of time;
b) Voyage charter - for a single voyage.
2. Charter by Demise or Bareboat - the whole
vessel is let to the charterer which transfers to
him its entire command and possession and
consequent control over its navigation,
including the master and crew who are his
servants.
 In such case, the common carrier
becomes a PRIVATE CARRIER.
BILL OF LADING
 Concept: It is a Written acknowledgement of receipt of
goods and Agreement to transport them to a specific
place To a person named or to his order WAT.
 The consignee and the shipper who accepts a bill of
lading even without signing are bound by the terms and
conditions thereof.
 Acceptance of the consignee is implied if he claims
reimbursement for missing goods and files a case
based on the bill of lading.
 The surrender of the bill of lading is not necessary
for the discharge of the obligation of the carrier. The
obligation of the carrier is also terminated if the goods
are delivered even if the bill of lading was not
surrendered.
 FUNCTIONS OF A BILL OF LADING: REC
1. Receipt of cargo;
2. Evidence of the existence of the contract of carriage
of cargo;
3. Commercial document (whereby, if negotiable,
ownership may be transferred by negotiation).
 Types of bill of lading: ORC
1. On Board BOL - states that the goods have been
received on board the specified vessel that will
carry them.
2. Received Shipment BOL - states that the goods
have been received for shipment with or
without specifying the vessel on which they are
to be shipped.
3. Clean BOL - no notation of any defect or damage
in the goods; prima facie evidence of receipt by the
carrier of the goods as therein described.
 LOANS ON BOTTOMRY AND RESPONDENTIA
 BOTTOMRY - loan secured by the SHIPOWNER or ship
agent, guaranteed by the vessel itself and payable only
upon arrival of vessel at destination.
 RESPONDENTIA - loan secured by the OWNER OF
THE CARGO payable upon safe arrival of cargo at
destination. The shipowner or ship agent cannot secure
this loan.
ORDINARY LOAN LOAN ON BOTTOMRY OR
RESPONDENTIA
Right to recover from debtor Right to recover is
is NOT EXTINGUISHED if EXTINGUISHED if the thing
the thing put up as security is put up as security is lost or
lost or destroyed. destroyed.
PROCEDURE AND PRESCRIPTIVE PERIOD FOR CLAIMS
For DAMAGE, LOSS or NON-DELIVERY
 For COASTWISE or WITHIN THE PHILIPPINES:
 When to FILE CLAIM WITH CARRIER - (this is
a condition precedent before filing a case in court)
a. Immediately - if damage is apparent.
b. Within 24 hours from delivery - if damage
is not apparent.
 When to FILE CASE IN COURT - prescriptive
period:
a. Within 6 years - if NO bill of lading has been
issued;
b. Within 10 years - if a bill of lading has been
issued.
 For INTERNATIONAL CARRIAGE FROM FOREIGN
PORT TO PHILIPPINES:
 When to FILE CLAIM WITH CARRIER - (this is
not a condition precedent for the filing of a case in
court)
a. Immediately - if upon discharge of the
goods, damage is apparent;
b. Within 3 days from delivery - if damage is
not apparent.
 When to FILE CASE IN COURT - prescriptive
period:
 Within 1 year from discharge (after
delivery of goods or the date the goods should
have been delivered).
 The period does not apply to
CONVERSION or MISDELIVERIES
(period of prescription would be 10
years).
 Maritime Company v. CA - the 1-year
period applies in case of collision, but it
starts from the date the goods should
have been delivered, had the cargoes
been saved.
 Dole v. Maritime Co. - The period is
not suspended by extrajudicial demand.
 Fil. Merchants v. Alejandro - insurer
exercising right of subrogation is bound
by the 1-year period.
 Mayer Steel Pipe v. CA - It does not
apply to claim against the insurer for the
insurance proceeds. The claim against
the insurer which is based on a written
contract expires in 10 years.
 Mitsui v. CA - Damages arising from
delay or late delivery is not the
damage or loss contemplated under the
COGSA. The goods are not actually lost
or damaged. The applicable period is 10
years.
SHIP MORTGAGE
 Purpose: FINANCING the: CAPI
1. Construction;
2. Acquisition;
3. Purchase of vessels;
4. Initial operation of vessels.
 The ship mortgage must be RECORDED OR
REGISTERED with MARINA, otherwise the same is
void except as to the parties or their heir and assigns or
persons with actual notice.
 Formal Requirements for PREFERRED STATUS of
the mortgage: RAW
1. Mortgage is Recorded;
2. It is accompanied by an Affidavit stating that it is
made in good faith and without design to
hinder, delay, or defraud any existing or future
creditor of mortgagor;
3. There is no Waiver by the mortgagee of the
preferred status of the mortgage.
 Upon DEFAULT of the obligor, the preferred ship
mortgage may be foreclosed in a suit in ADMIRALTY.
Upon filing a petition for foreclosure, the Court may
order the ARREST OF THE VESSEL: EAB
a. upon Ex parte application;
b. duly supported by an Affidavit of a person who
knows the facts; and
c. upon the filing of a Bond.
 Mortgagee may avail of the alternative remedy of
specific performance in a suit in personam in
admiralty.
 General Rule: Preferred mortgage lien shall have
priority over all claims against the vessel.
 Exceptions - preferred mortgage is inferior to the
following claims in the order stated: GCGG- MTP
1. Government expenses;
2. Crew’s wages;
3. General average;
4. Galvage;
5. Maritime liens arising prior in time to the
recording of preferred mortgage;
6. Tort damages;
7. Preferred mortgage registered prior in time.
 If the proceeds of sale should not be sufficient to
pay all creditors included in one number or grade,
the residue shall be divided among them pro rata.
 Credits not paid shall subsist as ORDINARY
CREDITS enforceable by personal action against
the debtor.
 Maritime Lien - includes maritime lien for
NECESSARIES; expenses indispensable to the
 maintenance and navigation of the vessel.
WARSAW CONVENTION AND CIVIL AVIATION LAWS
 This convention applies when there is INTERNATIONAL
TRANSPORTATION.
 When is there international transportation?
1. The place of departure and the place of
destination are within the territories of 2
contracting countries, regardless of whether or
not there was a break in the transportation or
transshipment; or
2. The place of departure and the place of
destination are within the territory of a single
contracting country, if there is an agreed
stopping place within a territory subject to
the sovereignty, mandate or authority of
another power, even though the power is not
a party to the Convention.
 Carriage by air - the period during which the
baggage or goods are in charge of the carrier,
whether in an airport or on board an aircraft, or, in
the case of a landing outside an airport, in any
place whatsoever.
 The carrier is liable for damage or injury to the:
 PASSENGER - if the injury took place:
1. On board the aircraft;
2. In the course of any of the operations of
embarking;
3. In the course of disembarking;
4. When there was or because of delay.
 CHECKED BAGGAGE OR GOODS - if damage
occurred during air transportation or when there is
delay.
 Limit of liability of carrier:
 PASSENGERS - 250,000 francs
 Exceptions: S-US
1. by Special contract, carrier and
passenger may agree to a higher limit of
liability;
2. Where the US is the origin, destination or
stopping place, the limit for passenger
death or injury is $75,000.
 BAGGAGE AND CARGO - 250 francs per kilo.
 Exceptions: WANGS-W
1. Willful misconduct;
2. Absence of baggage check;
3. Non-issuance of ticket by carrier;
4. Gross negligence;
5. Special declaration of interest in delivery
at destination and payment of
supplementary sum;
6. Waiver by carrier.
 OBJECTS WHICH PASSENGER TAKES CHARGE
HIMSELF - 5,000 francs per passenger.
 JURISDICTION/VENUE - The plaintiff may bring the
action for damages before the court where: D-PED
1. The carrier is Domiciled;
2. The carrier has its Principal place of business;
3. The carrier has an Establishment by which the
contract has been made; or
4. The court of the place of Destination.
 NOTICE OF CLAIM and PRESCRIPTIVE PERIOD
 Notice of Claim/ Complaint with the
international carrier - mandatory/condition
precedent for the filing of a judicial claim:
a. Baggage - within 3 days from receipt;
b. Baggage in case of delay or delivery -
within 14 days from the time the baggage was
placed at the disposal of the passenger;
c. Goods - 7 days from delivery.
 Prescription of action - case must be filed in
court within:
a. 2 years from receipt - in case of an action
for damage to passenger baggage;
b. 4 years - if the action is for tort including
humiliation at the hands of the airline
employees.
c. 4 years - quasi-delict.
DOTC-DTI Joint AO #1, Series of 2012
Important points:
 Cancellation - act of calling of a flight. This shall include
the following instances - cancellation by: AAPS
1. Air carrierr before his estimated time of departure,
with or without his fault;
2. Air carrier after an unduly long day;
3. Passenger holding a regular fare or ticket;
4. Situation deemed cancelled as contemplated in Sec.
12.2.
 Delay - result of the deferment of a flight to a later time.
 2 Kinds:
1. Terminal delay - delay that occurs while
passengers are still inside the terminal waiting
for boarding.
2. Tarmac delay - delay that occurs while
passengers are already on board the aircraft.
 Overbooking - practice of air carriers of selling
confirmed reserved space beyond the seat capacity of the
aircraft.
 A passenger checked in for a particular flight has
the right to board the aircraft for the purpose of
flight.
 Exception - when there is a legal or other valid
cause, such as but not limited to: SHING
1. Safety or security issues;
2. Health concerns;
3. Immigration issues;
4. Non-appearance at boarding gate at appointed
boarding time;
5. Government requisition.
 Other than these causes, no passenger may be
denied boarding without his consent.
 While it is an accepted practice for carriers to overbook
flights, any expense, consequence or inconvenience
caused to affected passengers must be borne by the air
carrier, as follows: DAPI
1. Air carrier shall Determine the number of
passengers in excess of the actual seat capacity of
the aircraft;
2. Air carrier shall Announce that the flight is
 overbooked, and that it is looking for volunteers
willing to give up their seats in exchange for an air
compensation;
3. Air carrier shall Provide the interested passengers
or volunteers a list of amenities and offers which
they can choose from, which list of amenities shall
always include the option: gec
a) To be Given priority booking in the next flight
with available space; or
b) To be Endorsed to another air carrier upon
payment of any fare difference, and provided
that space and other circumstances permit
such accommodation; and/or
c) Cash incentive.
4. If the number of volunteers is not enough, air
carrier shall Increase the compensation
package by certain degrees or add more
amenities.
 Rights of passenger when a flight is CANCELLED
WITHIN 24-HOURS BEFORE ETD: NP-RER
1. Be Notified beforehand via public announcement,
written or published, and flight status update
service.
2. Be Provided with the following, if the passenger is
already at the airport at the time of announcement
of flight cancellation: shfft
a) Sufficient meals;
b) Hotel accommodation;
c) First aid, if necessary.
d) Free calls, texts, emails;
e) Transportation from airport to hotel, vice
versa.
3. Reimbursement of the value of the fare, in case the
passenger decides not to fly;
4. Be Endorsed to another carrier, without paying any
fare difference, at the option of the passenger,
provided that space and other circumstances permit
such re-accommodation;
5. Rebook the ticket without additional charge, to the
next flight with available space, or within 30 days,
to a future trip within the period of validity of the
ticket. However, for rebooking made in excess of
the aforementioned 30 days for a trip likewise
within the validity of the ticket, fees and/or fare
difference shall apply.
 Rights of passenger when flight is CANCELLED AT
LEAST 24 HOURS BEFORE ETD: NR
1. Notice;
2. Rebook or reimbursement, at his option.
 Right of passenger if flight is CANCELLED
BECAUSE OF FORCE MAJEURE or SAFETY OR
SECURITY REASONS:
 Right to be reimbursed for the full value of the fare.
 Rights of passenger in case of TERMINAL DELAY
OF AT LEAST 3 HOURSE AFTER ETD: PR
1. Be Provided with: rff
a) Refreshments or meals;
b) Free phone calls, texts, emails;
c) First aid, if necessary;
2. Rebook or refund his ticket or be endorsed to
another carrier.
 If TERMINAL DELAY is at least 6 HOURS AFTER
ETD - considered as cancelled for the purpose of making
available to the passenger the rights and amenities of
actual cancellation.
 Additional rights: AB
1. Additional compensation equivalent to at least
the value of the sector delayed or deemed
cancelled, to be paid in the form of cash or
voucher;
2. To Board the flight.
 Right of passenger in case of TARMAC DELAY OF
AT LEAST 2 HOURS AFTER ETD:
 Be provided with sufficient food and beverages.
PUBLIC SERVICE ACT
 Public Utility - a Business or service Engaged in
regularly supplying the public with some commodity or
service of public consequence Such as electricity, gas,
water, transportaion, telephone or telegraph service BES.
 Certificate of Public Convenience - authorization
granted by the LTFRB for the operation of land
transportation services for public use as required by law.
 Requirements:
1. Applicant must be a Citizen of the Philippines,
or a corporation or co-partnership, association,
or joint stock company constituted and
organized under Philippine laws, at least 60%
of its stock or paid-up capital must belong
entirely to Filipinos;
2. Financial capability;
3. Proof that the operation will promote public
interest in a proper and suitable manner.
 PRIOR OPERATOR RULE - CPC will not be issued to a
new applicant or second operator if the first operator can
establish, operate and provide adequate, efficient and
satisfactory service for the benefit and convenience of
the public.
 Exceptions: BOG-CRFF
1. Better serve public interest;
2. Operator not of good standing;
3. Great demand for public utility;
4. Certificate of public convenience granted is a
maiden franchise;
5. When Reasonable and not harmful or
obnoxious to public service;
6. Failure to increase the service;
7. Free competition.