Transpo Reviewer

1 Transportation and Public Utilities Finals reviewer Prof. N.F.L. Ty 1 Semester A.Y.
2011-2012
st
Janz Hanna Ria N. Serrano

Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines I. General Considerations A. Public Utilities 1. 1987 Constitution Art. XII, Sec. 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. Art. XII, Sec. 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest. Art. XII, Sec. 18. The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government. Art. XII, Sec. 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. RP v. Meralco. The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation. || In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests. David v. Arroyo. PP 1017 does not authorize Arroyo during the emergency to temporarily take over or direct the operation of any privately owned public utility or business affected with public interest without authority from Congress. || Generally, Congress is the repository of emergency powers. This is evident in the tenor of Section 23 (2), Article VI authorizing it to delegate such powers to the President. Certainly, a body cannot delegate a power not reposed upon it. However, knowing that during grave emergencies, it may not be possible or practicable for Congress to meet and exercise its powers, the Framers of our Constitution deemed it wise to allow Congress to grant emergency powers to the President, subject to certain conditions, thus: (1) There must be a war or other emergency; (2) The delegation must be for a limited period only; (3) The delegation must be subject to such restrictions as the Congress may prescribe; (4) The emergency powers must be exercised to carry out a national policy declared by Congress. Section 17, Article XII must be understood as an aspect of the emergency powers clause. The taking over of private business affected with public interest is just another facet of the emergency powers generally reposed upon Congress. Thus, when Section 17 states that the "the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest," it refers to Congress, not the President. Now, whether or not the President may exercise such power is dependent on whether Congress may delegate it to him pursuant to a law prescribing the reasonable terms thereof. Metro Cebu Water v. Adala. A CPC is formal written authority issued by quasi-judicial bodies for the operation and maintenance of a public utility for which a franchise is not required by law and a CPC issued by this Board is an authority to operate and maintain a waterworks system or water supply service. On the other hand, a franchise is privilege or authority to operate appropriate private property for public use vested by Congress through legislation. Clearly, therefore, a CPC is different from a franchise and Section 47 of Presidential Decree 198 refers only to franchise. Accordingly, the possession of franchise by a water district does not bar the issuance of a CPC for an area covered by the water district. || Moreover, this Court, in Philippine Airlines, Inc. v. Civil Aeronautics Board, has construed the term franchise broadly so as to include, not only authorizations issuing directly from Congress in the form of statute, but also those granted by administrative agencies to which the power to grant franchises has been delegated by Congress || A public utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. 2. CA 146, as amended, Sec. 13 (b). The term "public service" includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether may be its classification, freight or carrier service of any class, express service, steamboat or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, That a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act. a. What is public utility? A public utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. Apart from statutes which define the public utilities that are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case. As its name indicates, however, the term public utility implies a public use and service to the public. b. What is public service?
2 Transportation and Public Utilities Finals reviewer Prof. N.F.L. Ty 1 Semester A.Y. 2011-2012
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines The Public Service Act (CA No. 146 as amended) provides that the term public service "includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service or any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine repairshop, [warehouse], wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services..." Albano v. Reyes. While the PPA has been tasked, under E.O. No. 30, with the management and operation of the Manila International Port Complex and to undertake the providing of cargo handling and port related services thereat, the law provides that such shall be "in accordance with P.D. 857 and other applicable laws and regulations." On the other hand, P.D. No. 857 expressly empowers the PPA to provide services within Port Districts "whether on its own, by contract, or otherwise" [See. 6(a) (v)]. Therefore, under the terms of E.O. No. 30 and P.D. No. 857, the PPA may contract with the International Container Terminal Services, Inc. (ICTSI) for the management, operation and development of the MICP. || Even if the MICP be considered a public utility, or a public service on the theory that it is a "wharf' or a "dock" as contemplated under the Public Service Act, its operation would not necessarily call for a franchise from the Legislative Branch. Franchises issued by Congress are not required before each and every public utility may operate. Thus, the law has granted certain administrative agencies the power to grant licenses for or to authorize the operation of certain public utilities. || That the Constitution provides in Art. XII, Sec. 11 that the issuance of a franchise, certificate or other form of authorization for the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily, imply, as petitioner posits that only Congress has the power to grant such authorization. Our statute books are replete with laws granting specified agencies in the Executive Branch the power to issue such authorization for certain classes of public utilities Tatad v. Garcia. While a franchise is needed to operate these facilities to serve the public, they do not by themselves constitute a public utility. What constitutes a public utility is not their ownership but their use to serve the public. || While private respondent is the owner of the facilities necessary to operate the EDSA LRT III, it admits that it is not enfranchised to operate a public utility. In view of this incapacity, private respondent and DOTC agreed that on completion date, private respondent will immediately deliver possession of the LRT system by of lease for 25 years, during which period DOTC shall operate the same as a common carrier and private respondent shall provide technical maintenance and repair services to DOTC. || Since DOTC shall operate the EDSA LRT III, it shall assume all the obligations and liabilities of a common carrier. For this purpose, DOTC shall indemnify and hold harmless private respondent from any losses, damages, injuries or death which may be claimed in the operation or implementation of the system, except losses, damages, injury or death due to defects in the EDSA LRT III on account of the defective condition of equipment or facilities or the defective maintenance of such equipment facilities. PAL v. CAB. Many and varied are the definitions of certificates of public convenience which courts and legal writers have drafted. Some statutes use the terms "convenience and necessity" while others use only the words "public convenience." The terms "convenience and necessity", if used together in a statute, are usually held not to be separable, but are construed together. Both words modify each other and must be construed together. The word 'necessity' is so connected, not as an additional requirement but to modify and qualify what might otherwise be taken as the strict significance of the word necessity. Public convenience and necessity exists when the proposed facility will meet a reasonable want of the public and supply a need which the existing facilities do not adequately afford. It does not mean or require an actual physical necessity or an indispensable thing. 21chanroblesvirtuallawlibrary || "The terms 'convenience' and 'necessity' are to be construed together, although they are not synonymous, and effect must be given both. The convenience of the public must not be circumscribed by according to the word 'necessity' its strict meaning or an essential requisites." The use of the word "necessity", in conjunction with "public convenience" in a certificate of authorization to a public service entity to operate, does not in any way modify the nature of such certification, or the requirements for the issuance of the same. It is the law which determines the requisites for the issuance of such certification, and not the title indicating the certificate. || Congress, by giving the respondent Board the power to issue permits for the operation of domestic transport services, has delegated to the said body the authority to determine the capability and competence of a prospective domestic air transport operator to engage in such venture. This is not an instance of transforming the respondent Board into a mini-legislative body, with unbridled authority to choose who should be given authority to operate domestic air transport services. PD 1590. RA 7151. RA 9183. RA 9157. Transportation 1. Definition A contract of transportation is one whereby a certain person or association of persons obligate themselves to transport persons, things, news from one place to another for a fixed price. It is the removal of goods or persons from one place to another. 2. Public nature a. Public Service Act Sec. 13. (a) The Commission shall have jurisdiction, supervision, and control over all public services and their franchises, equipment, and other properties, and in the exercise of its authority, it shall have the necessary powers and the aid of the public force: Provided, That public services owned or operated by government entities or government-owned or controlled corporations shall be regulated by the Commission in the same way as privately-owned public services, but certificates of public convenience or certificates of public convenience and necessity shall not be required of such entities or corporations: And provided, further, That it shall have no authority to require steamboats, motor ships and steamship lines, whether privately-owned, or owned or operated by any Government controlled corporation or instrumentality to obtain certificate of public convenience or to prescribe their definite routes or lines of service. (b) The term "public service" includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether may be its classification, freight or carrier service of any class, express service, steamboat or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas,
B.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services: Provided, however, That a person engaged in agriculture, not otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act. (c) The word "person" includes every individual, co-partnership, joint-stock company or corporation, whether domestic or foreign, their lessees, trustees, or receivers, as well as any municipality, province, city, government-owned or controlled corporation, or agency of the Government of the Philippines, and whatever other persons or entities that may own or possess or operate public services. (As amended by Com. Act 454 and RA No. 2677) Sec. 14. The following are exempted from the provisions of the preceding section: (a) Warehouses; (b) Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and lighters; (c) Airships within the Philippines except as regards the fixing of their maximum rates on freight and passengers; (d) Radio companies except with respect to the fixing of rates; (e) Public services owned or operated by any instrumentality of the National Government or by any government-owned or controlled corporation, except with respect to the fixing of rates. (As amended by Com. Act 454, RA No. 2031, and RA No. 2677 ) Sec. 15. With the exception of those enumerated in the preceding section, no public service shall operate in the Philippines without possessing a valid and subsisting certificate from the Public Service Commission known as "certificate of public convenience," or "certificate of public convenience and necessity," as the case may be, to the effect that the operation of said service and the authorization to do business will promote the public interests in a proper and suitable manner. The Commission may prescribe as a condition for the issuance of the certificate provided in the preceding paragraph that the service can be acquired by the Republic of the Philippines or any instrumentality thereof upon payment of the cost price of its useful equipment, less reasonable depreciation; and likewise, that the certificate shall be valid only for a definite period of time; and that the violation of any of these conditions shall produce the immediate cancellation of the certificate without the necessity of any express action on the part of the Commission. In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model, or other circumstances affecting its value in the market shall be taken into consideration. The foregoing is likewise applicable to any extension or amendment of certificates actually in force and to those which may hereafter be issued, to permit to modify itineraries and time schedules of public services, and to authorizations to renew and increase equipment and properties. Sec. 16. Proceedings of the Commission, upon notice and hearing. - The Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary: (a) To issue certificates which shall be known as certificates of public convenience, authorizing the operation of public service within the Philippines whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. Provided, That thereafter, certificates of public convenience and certificates of public convenience and necessity will be granted only to citizens of the Philippines or of the United States or to corporations, co-partnerships, associations or joint-stock companies constituted and organized under the laws of the Philippines; Provided, That sixty per centum of the stock or paid-up capital of any such corporations, co-partnership, association or joint-stock company must belong entirely to citizens of the Philippines or of the United States: Provided, further, That no such certificates shall be issued for a period of more than fifty years. (b) To approve, subject to constitutional limitations any franchise or privilege granted under the provisions of Act No. Six Hundred and Sixty-seven, as amended by Act No. One Thousand and twenty-two, by any political subdivision of the Philippines when, in the judgment of the Commission, such franchise or privilege will properly conserve the public interests, and the Commission shall in so approving impose such conditions as to construction, equipment, maintenance, service, or operation as the public interests and convenience may reasonably require, and to issue certificates of public convenience and necessity when such is required or provided by any law or franchise. (c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as well as commutation, mileage, kilometrage, and other special rates which shall be imposed observed and followed thereafter by any public service: Provided, That the Commission may, in its discretion, approve rates proposed by public services provisionally and without necessity of any hearing; but it shall call a hearing thereon within thirty days, thereafter, upon publication and notice to the concerns operating in the territory affected: Provided, further, That in case the public service equipment of an operator is used principally or secondarily for the promotion of a private business, the net profits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates. (d) To fix just and reasonable standards, classifications, regulations, practices, measurement, or service to be furnished, imposed, observed, and followed thereafter by any public service. (e) To ascertain and fix adequate and serviceable standards for the measurement of quantity, quality, pressure, initial voltage, or other condition pertaining to the supply of the product or service rendered by any public service, and to prescribe reasonable regulations for the examination and test of such product or service and for the measurement thereof. (f) To establish reasonable rules, regulations, instructions, specifications, and standards, to secure the accuracy of all meters and appliances for measurements. (g) To compel any public service to furnish safe, adequate, and proper service as regards the manner of furnishing the same as well as the maintenance of the necessary material and equipment. (h) To require any public service to establish, construct, maintain, and operate any reasonable extension of its existing facilities, where in the judgment of said Commission, such extension is reasonable and practicable and will furnish sufficient business to justify the construction and maintenance of the same and when the financial condition of the said public service reasonably warrants the original expenditure required in making and operating such extension.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (i) To direct any railroad, street railway or traction company to establish and maintain at any junction or point of connection or intersection with any other line of said road or track, or with any other line of any other railroad, street railway or traction to promote, such just and reasonable connection as shall be necessary to promote the convenience of shippers of property, or of passengers, and in like manner direct any railroad, street railway, or traction company engaged in carrying merchandise, to construct, maintain and operate, upon reasonable terms, a switch connection with any private sidetrack which may be constructed by any shipper to connect with the railroad, street railway or traction company line where, in the judgment of the Commission, such connection is reasonable and practicable and can be out in with safety and will furnish sufficient business to justify the construction and maintenance of the same. (j) To authorize, in its discretion, any railroad, street railway or traction company to lay its tracks across the tracks of any other railroad, street railway or traction company or across any public highway. (k) To direct any railroad or street railway company to install such safety devices or about such other reasonable measures as may in the judgment of the Commission be necessary for the protection of the public are passing grade crossing of (1) public highways and railroads, (2) public highways and streets railway, or (3) railways and street railways. (l) To fix and determine proper and adequate rates of depreciation of the property of any public service which will be observed in a proper and adequate depreciation account to be carried for the protection of stockholders, bondholders or creditors in accordance with such rules, regulations, and form of account as the Commission may prescribe. Said rates shall be sufficient to provide the amounts required over and above the expense of maintenance to keep such property in a state of efficiency corresponding to the progress of the industry. Each public service shall conform its depreciation accounts to the rates so determined and fixed, and shall set aside the moneys so provided for out of its earnings and carry the same in a depreciation fund. The income from investments of money in such fund shall likewise be carried in such fund. This fund shall not be expended otherwise than for depreciation, improvements, new construction, extensions or conditions to the properly of such public service. (m) To amend, modify or revoke at any time certificate issued under the provisions of this Act, whenever the facts and circumstances on the strength of which said certificate was issued have been misrepresented or materially changed. (n) To suspend or revoke any certificate issued under the provisions of this Act whenever the holder thereof has violated or willfully and contumaciously refused to comply with any order rule or regulation of the Commission or any provision of this Act: Provided, That the Commission, for good cause, may prior to the hearing suspend for a period not to exceed thirty days any certificate or the exercise of any right or authority issued or granted under this Act by order of the Commission, whenever such step shall in the judgment of the Commission be necessary to avoid serious and irreparable damage or inconvenience to the public or to private interests. (o) To fix, determine, and regulate, as the convenience of the state may require, a special type for auto-busses, trucks, and motor trucks to be hereafter constructed, purchased, and operated by operators after the approval of this Act; to fix and determine a special registration fee for auto-buses, trucks, and motor trucks so constructed, purchased and operated: Provided, That said fees shall be smaller than more those charged for auto-busses, trucks, and motor trucks of types not made regulation under the subsection. Sec. 17. Proceedings of Commission without previous hearing. - The Commission shall have power without previous hearing, subject to established limitations and exception and saving provisions to the contrary: (a) To investigate, upon its own initiative, or upon complaint in writing, any matter concerning any public service as regards matters under its jurisdiction; to require any public service to furnish safe, adequate, and proper service as the public interest may require and warrant; to enforce compliance with any standard, rule, regulation, order or other requirement of this Act or of the Commission, and to prohibit or prevent any public service as herein defined from operating without having first secured a certificate of public convenience or public necessity and convenience, as the case may be and require existing public services to pay the fees provided for in this Act for the issuance of the proper certificate of public convenience or certificate of public necessity and convenience, as the case may be, under the penalty, in the discretion by the Commission, of the revocation and cancellation of any acquired rights. (b) To require any public service to pay the actual expenses incurred by the Commission in any investigation if it shall be found in the same that any rate, tool, charge, schedule, regulation, practice, act or service thereof is in violation of any provision of this Act or any certificate, order, rule, regulation or requirement issued or established by the Commission. The Commission may also assess against any public service costs not to exceed twenty-five pesos with reference to such investigation. (c) From time to time appraise and value the property of any public service, whenever in the judgment of the Commission it shall be necessary so to do, for the purpose of carrying out any of the provisions of this Act, and in making such valuation the Commission may have access to and use any books, documents, or records in the possession of any department, bureau, office, or board of the government of the Philippines or any political subdivision thereof. (d) To provide, on motion by or at the request of any consumer or user of a public service, for the examination and test of any appliance used for the measuring of any product or service of a public service, and for that purpose, by its agents, experts, or examiners to enter upon any premises where said appliances may be, and other premises of the public service, for the purpose of setting up and using on said premises any apparatus necessary therefor. and to fix the fees to be paid by any consumer or user who may apply to the Commission for such examination or test to be made, and if the appliance be found defective or incorrect to the disadvantage of the consumer or user to require the fees paid to be refunded to the consumer or user by the public service concerned. (e) To permit any street railway or traction company to change its existing gauge to standard steam railroad gauge, upon such terms and conditions as the Commission shall prescribe. (f) To grant to any public service special permits to make extra or special trips within the territory covered by its certificates of public convenience, and to make special excursion trips outside of its own territory if the public interest or special circumstances required it: Provided, however, that in case a public service cannot render such extra service on its own line or in its own territory, a special permit for such extra service may be granted to any other public service. (g) To require any public service to keep its books, records, and accounts so as to afford an intelligent understanding of the conduct of its business and to that end to require every such public service of the same class to adopt a uniform system of accounting. Such system conform to any system approved and confirmed by the Auditor General. (h) To require any public service to furnish annual reports of finances and operations. Such reports shall set forth in detail the capital stock issued, the amounts of said capital stock paid up and the form of payment thereof; the dividends paid, the surplus, if any and the number of stockholders, the consolidated and pending obligations and the interest paid thereon; the cost and value of the
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines property of the operator; concessions or franchises and equipment; the number of employees and salaries paid to each class; the accidents to passengers, employees, and other person, and the causes thereof; the annual expenditures on improvements; the manner of their investment and nature of such improvements; the receipts and profits in each of the branches of the business and of whatever source; the operating and other expenses; the balance of profits and losses; and a complete statement of the annual financial operations of the operator, including an annual balance sheet. Such reports shall also contain any information which the Commission may require concerning freight and passenger rates, or agreements, compromises or contracts affecting the same. Said reports shall cover a period of twelve months, ending on December thirty-first of each year, and shall be sworn to by the officer or functionary of the public service authorized therefor. The Commission shall also have power to require from time to time special reports containing such information as above provided for or on other matters as the Commission may deem necessary or advisable. (i) To require every public service to file with the Commission a statement in writing, verified by the oaths of the owner or the president and the secretary thereof, if a corporation, setting forth the name, title of office or portion, and post-office address, and the authority, power and duties of every officer, member of the board of directors, trustees executive committee, superintendent, chief or head of construction and operation thereof, in such form as to disclose the source and origin of each administrative act, rule, decision, order or other action of the operator of such public service; and, within ten days after any change is made in the title of, or authority, powers or duties appertaining to any such office or position, or the person holding the same, filed with the Commission a like statement, verified in like manner, setting forth such change. (j) To require any public service to comply with the laws of the Philippines and with any provincial resolution or municipal ordinance relating thereto and to conform to the duties imposed upon it thereby or by the provisions of its own character, whether obtained under any general or special law of the Philippines. (k) To investigate any or all accidents that may occur on the property of any public service or directly or indirectly arising from or connected with its maintenance or operation in the Philippines; to require any public service to give the Commission immediate and effective notice of all any such accidents, and to make such order or recommendation with respect thereto as the public interest may warrant or require. (l) To require every public service s herein defined to file within complete schedules of every classification employed and of every individual or joint rate, toll fare or charge made, charged or exacted by it for any product supplied or service rendered within the Philippines and, in the case of public carriers, to file with it a statement showing the itineraries or routes served as specified in such requirement. Sec. 18. It shall be unlawful for any individual, co-partnership, association, corporation or joint-stock company, their lessees, trustees or receivers appointed by any court whatsoever, or any municipality, province, or other department of the Government of the Philippines to engage in any public service business without having first secured from the Commission a certificate of public convenience or certificate of public convenience and necessity as provided for in this Act, except grantees of legislative franchises expressly exempting such grantees from the requirement of securing a certificate from this Commission as well as concerns at present existing expressly exempted from the jurisdiction of the Commission, either totally or in part, by the provisions of section thirteen of this Act. Sec. 19. Unlawful Acts. - It shall be unlawful for any public service: (a) To provide or maintain any service that is unsafe, improper, or inadequate or withhold or refuse any service which can reasonably be demanded and furnished, as found and determined by the Commission in a final order which shall be conclusive and shall take effect in accordance with this Act, upon appeal of otherwise. (b) To make or give, directly or indirectly, by itself or through its agents, attorneys or brokers, or any of them, discounts or rebates on authorized rates, or grant credit for the payment of freight charges, or any undue or unreasonable preference or advantage to any person of corporation or to any locality or to any particular description of traffic or service, or subject any particular person or corporation or locality or any particular description of traffic to any prejudice or disadvantage in any respect whatsoever; to adopt, maintain, or enforce any regulation, practice or measurement which shall be found or determined by the Commission to be unjust, unreasonable, unduly preferential or unjustly discriminatory in a final order which shall be conclusive and shall take effect in accordance with the provisions of this Act, upon repeal or otherwise. (c) To refuse or neglect, when requested by the Director of Posts or his authorized representative, to carry public mail on the regular trips of any public land transportation service maintained or operated by any such public service; upon such terms and conditions and for a consideration in such amount as may be agreed upon between the Director of Posts and the public service carrier of fixed by the Commission in the absence of an agreement between the Director of Posts and the carrier. In case the Director of Posts and public service carrier are unable to agree on the amount of the compensation to be paid for the carriage of the mail, the Director of Posts shall forthwith request the Commission to fix a just and reasonable compensation for such carriage and the same shall be promptly fixed by the Commission in accordance with Section sixteen of this Act. Sec. 20(a). Acts requiring the approval of the Commission. - Subject to established limitations and exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had - (a) To adopt, establish, fix, impose, maintain, collect or carry into effect any individual or joint rates, commutation, mileage or other special rate, toll, fare, charge, classification or itinerary. The Commission shall approve only those that are just and reasonable and not any that are unjustly discriminatory or unduly preferential, only upon reasonable notice to the public services and other parties concerned, giving them a reasonable opportunity to be heard and the burden of the proof to show that the proposed rates or regulations are just and reasonable shall be upon the public service proposing the same. Sec. 20(b). To establish, construct, maintain, or operate new units or extend existing facilities or make any other addition to or general extension of the service. Sec. 20(e). Hereafter to issue any stock or stock certificates representing an increase of capital; or issue any share of stock without par value; or issue any bonds or other evidence of indebtedness payable in more than one year from the issuance thereof, provided that it shall be the duty of the Commission, after hearing, to approve any such issue maturing in more than one year from the date thereof, when satisfied that the same is to be made in accordance with law, and the purpose of such issue be approved by the Commission. Sec. 20(g). (g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights or any part thereof; or merge or consolidate its property, franchises privileges or rights, or any part thereof, with those of any other public service. The approval herein required shall be given, after notice to the public and hearing the persons interested at a public hearing, if it be shown that there are just and reasonable grounds for making the mortgaged or encumbrance, for liabilities of more than one year maturity, or
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines the sale, alienation, lease, merger, or consolidation to be approved, and that the same are not detrimental to the public interest, and in case of a sale, the date on which the same is to be consummated shall be fixed in the order of approval: Provided, however, that nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale, alienation, or lease by any public service of any of its property in the ordinary course of its business. Sec. 20(h). To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that sale in itself or in connection with another previous sale, shall be to vest in the transferee more than forty per centum of the subscribed capital of said public service. Any transfer made in violation of this provision shall be void and of no effect and shall not be registered in the books of the public service corporation. Nothing herein contained shall be construed to prevent the holding of shares lawfully acquired. (As amended by Com. Act No. 454.) Sec. 20(i). To sell, alienate or in any manner transfer shares of its capital stock to any alien if the result of that sale, alienation, or transfer in itself or in connection with another previous sale shall be the reduction to less than sixty per centum of the capital stock belonging to Philippine citizens. Such sale, alienation or transfer shall be void and of no effect and shall be sufficient cause for ordering the cancellation of the certificate. CPCs, CPCNs, and the Prior Operator Rule Certificate of Public Convenience (CPC) Certificate of Public Convenience and Necessity (CPCN) Prior Operator Rule Difference between CPC and CPCN : A CPCN is issued by the PSC to a public service to which any political subdivision has granted a franchise under Act 667 after the PSC has approved the same under Section 16(b). A CPC is any authorization to operate a public service issued by the PSC. A CPC is an authorization issued by the Commission for the operation of public services for which no franchise, either municipal or legislative, is required by law (e.g. auto-trucks and motor vehicles). A CPCN is an authorization issued by the PSC for the operation of public services for which a franchise is required by law (e.g. electric, telephone services). Nature of certificate : It constitutes neither a franchise nor a contract, confers no property rights and is a mere license or privilege, and such privilege is forfeited when the grantee fails to comply with his commitments behind which lies the paramount interest of the public, for public necessity cannot be made to wait, nor sacrificed for private convenience. However, certificates represent property rights to the extent that if the rights which any public utility is exercising pursuant to lawful orders of the PSC has been invaded by another public utility, in appropriate cases actions may be maintained by the complainant public utility. Owners of public utilities have the right to maintain appropriate actions against other public utilities not authorized to operate in competition with the complainant. Certificates are considered as property as used in Civil Procedure as they have material value and are material assets. They are subject to attachment and seizure by legal process, and may be acquired by purchase. Determination of WON an issuance of a certificate is for public convenience - (1) financial responsibility of the applicant, (2) reliability of the applicant, (3) priority of filing the application for a certificate, and (4) priority of operation Prior operator rule - to carry out the purpose and intent for which the PSC was created the law contemplates that the first licensee will be protected in his investment and will not be subjected to a ruinous competition. It is not therefore the policy of the law for the PSC to issue a CPC to a second operator to cover the same field and in competition with a first operator who is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulations of the PSC. Accordingly, a CPC or CPCN ought not to be granted where there is no complaint as to existing rates and the co. in the field is rendering adequate services. regular operators are preferred over irregular operators prior operator is given opportunity to improve service prior operator given opportunity to extend lines basis of rule : to prevent ruinous and wasteful competition in order that the interests of the public would be conserved and preserved; so long as the operator complied with the terms and conditions of the license and the reasonable demands of the public, it is the duty of the PSC to protect rather than to destroy its investment Raymundo v. Luneta Motor. A certification of public convenience is included in the term "property" in the broad sense of the term. Under the Public Service Law, a certificate of public convenience can be sold by the holder thereof because it has considerable material value and is considered as valuable asset. || CPCs have considerable material value. They are valuable assets. They are subject to being sold for consideration as much as any other property. They are even more valuable than ordinary properties, taking into consideration that they are not granted to everyone who applies for them but only to those who undertake to furnish satisfactory and convenient service to the public. Though intangible, they are of value and are considered properties which can be seized through legal process. Batangas Transportation v. Orlanes. An autobus line is a public utility, and as such, is a common carrier and an impt. factor in the business affairs of the community. || The PSC has the power to specify and define the terms and conditions upon which any public utility shall operate and to make reasonable rules and regulations for its operation, and to fix the compensation that it shall receive for its service to the public, and for good cause may suspend or even revoke a license granted. || It is not the policy of the law for the PSC to issue a CPC to a second operator to cover the same field and in competition with a first operator who is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulations of the PSC. || A CPCN for the operation of an auto truck line in occupied territory should not be granted where there is no complaint as to existing rates and the co. in the field is rendering adequate service. It is the duty of the PSC to protect rather than to destroy the investment of a public utility. || The policy of regulation upon which the present public utility commission plan is based and which tends to do away with competition among public utilities as they are natural monopolies, is at once the reason that the regulation of an existing system of transportation, which is properly serving a given field, or may be required to do so, is to be preferred to competition among several independent systems. While requiring a proper service from a single system for a territory in consideration for protecting it as a monopoly for all the service required and in conserving its resources, no economic waste results and service may be furnished at a minimum cost.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines San Pablo v. Pantranco. The water transport service between Matnog and Allen is not a ferryboat service but a coastwise or interisland shipping service. Before private respondent may be issued a franchise or CPC for the operation of the said service as a common carrier, it must comply with the usual reqts. of filing an application, payment of the fees, publication, adducing evidence at a hearing and affording the oppositors the opportunity to be heard || Pantranco does not deny that it charges its passengers separately from the charges for the bus trips and issues separate tickets whenever they board the MV Black Double. It cannot pretend that it issued tickets as a private carrier and not as a common carrier. It in fact accepts walk in passengers during the trips. It cannot claim that it is both a private carrier and a common carrier at the same time. PAL v. CAB, supra. Teja v. IAC. The parties operated under an agreement known as the Kabit System. Such system operates when a person who has been granted a certificate of public convenience allows another person who owns a motor vehicle to operate under such franchise for a fee. A certificate of public convenience is a special privilege which cannot be countenanced. This illegitimate arrangement has been recognized as one of the root causes of the frequency of graft and corruption in the government transportation affairs. It is declared void it being against public policy. It is a fundamental principle that the court will not aid either party to enforce an illegal contract and will leave both where it finds them. The defects of the contract are permanent and cannot be ratified. Thus, both parties are culpable of their illicit indenture. Lim v. CA. The kabit system is an 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. Although the parties to such an agreement are not outrightly penalized by law, the kabit system is invariably recognized as being contrary to public policy and therefore void and inexistent under Art. 1409 of the Civil Code. In the early case of Dizon v. Octavio the Court explained that one of the primary factors considered in the granting of a certificate of public convenience for the business of public transportation is the financial capacity of the holder of the license, so that liabilities arising from accidents may be duly compensated. The kabit system renders illusory such purpose and, worse, may still be availed of by the grantee to escape civil liability caused by a negligent use of a vehicle owned by another and operated under his license. If a registered owner is allowed to escape liability by proving who the supposed owner of the vehicle is, it would be easy for him to transfer the subject vehicle to another who possesses no property with which to respond financially for the damage done. In the present case it is at once apparent that the evil sought to be prevented in enjoining the kabit system does not exist. First, neither of the parties to the pernicious kabit system is being held liable for damages. Second, the case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that private respondent Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered owner. Third, the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right. Private nature; rights and obligations of parties inter se arising from transactions relating to transportation a. Absent a transportation contract b. Arising from a transportation contract c. Liability of registered owner Parties to the contract: 1. shipper - one who gives rise to the contract of transportation by agreeing to deliver the things or news to be transported, or to present his own person or those of other or others in the case of transportation of passengers 2. carrier or conductor - one who binds himself to transport persons, things, or news as the case may be or one employed in or engaged in the business of carrying goods for others for hire Persons or corporations who undertake to transport or convey goods, property, or persons from one place to another, gratuitously or for hire, and are classified as private or special carriers and common or public carriers PCI Leasing v. UCPB. Registration is required not to make said registration the operative act by which ownership in vehicles is transferred, as in land registration cases, because the administrative proceeding of registration does not bear any essential relation to the contract of sale between the parties, but to permit the use and operation of the vehicle upon any public highway. The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner. Instances are numerous where vehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways. Regulation of the Transportation Industry 1. The Department of Transportation and Communication EO 125, Sec. 4. The Ministry shall be the primary policy, planning, programming, coordinating, implementing, regulating, and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated networks of transportation and communication system, as well as in the fast, sale, efficient and reliable postal, transportation and communication services. To accomplish such mandate, the Ministry shall have the following objectives: a. Promote the development of dependable and coordinated networks of transportation and communication systems; b. Guide government and private investment in the development of the countrys inter- model transportation and communication systems in a most practical, expeditious, and orderly fashion for maximum safety, service, and cost effectiveness; c. Impose appropriate measure so that technical, economic and other condition for the continuing economic viability of the transportation and communication entities are not jeopardized and do not encourage inefficiency and distortion of traffic patronage; d. Develop an integrated plan for a nationwide transmission system in accordance with the national and international telecommunication service requirement including, among others, radio and television broadcast relaying, leased channel services and data transmission;
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines e. Guide government and private investment in the establishment, operation and maintenance of an international switching system for incoming and outgoing telecommunication services; f. Encourage the development of a domestic telecommunication industry in coordination with the concern entities particularly, the manufacture of communications/ electronics equipment and components to complement and support as much as possible, the expansion, development, operation and maintenance of the nationwide telecommunications network; g. Provide for a safe, reliable and efficient postal system for the country. EO 125-A, Sec. 5. Powers and Functions. To accomplish its mandate, the Department shall have the following powers and functions: (a) Formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communications systems at the national, regional and local levels; (b) Establish and administer comprehensive and integrated programs for transportation and communications, and for this purpose, may call on any agency, corporation, or organization, whether public or private, whose development programs include transportation and communications as an integral part thereof, to participate and assist in the preparation and implementation of such program; (c) Assess, review and provide direction to transportation and communication research and development programs of the government in coordination with other institutions concerned; (d) Administer and enforce all laws, rules and regulations in the field of transportation and communications; (e) Coordinate with the Department of Public Works and Highways in the design, location, development, rehabilitation, improvement, construction, maintenance and repair of all infrastructure projects and facilities of the Department. However, government corporate entities attached to the Department shall be authorized to undertake specialized telecommunications, ports, airports and railways projects and facilities as directed by the President of the Philippines or as provided by law; (f) Establish, operate and maintain a nationwide postal system that shall include mail processing, delivery services, and money order services and promote the art of philately; (g) Issue certificates of public convenience for the operation of public land and rail transportation utilities and services; (h) Accredit foreign aircraft manufacturers and/or international organizations for aircraft certification in accordance with established procedures and standards; (i) Establish and prescribe rules and regulations for identification of routes, zones and/or areas of operations of particular operators of public land services; (j) Establish and prescribe rules and regulations for the establishment, operation and maintenance of such telecommunications facilities in areas not adequately served by the private sector in order to render such domestic and overseas services that are necessary with due consideration for advances in technology; (k) Establish and prescribe rules and regulations for the operation and maintenance of a nationwide postal system that shall include mail processing, delivery services, money order services and promotion of philately; (l) Establish and prescribe rules and regulations for issuance of certificates of public convenience for public land transportation utilities, such as motor vehicles, trimobiles and railways; (m) Establish and prescribe rules and regulations for the inspection and registration of air and land transportation facilities, such as motor vehicles, trimobiles, railways and aircrafts; (n) Establish and prescribe rules and regulations for the issuance of licenses to qualified motor vehicle drivers, conductors, and airmen; (o) Establish and prescribe the corresponding rules and regulations for the enforcement of laws governing land transportation, air transportation and postal services, including the penalties for violations thereof, and for the deputation of appropriate law enforcement agencies in pursuance thereof; (p) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air and land transportation utility facilities and services, except such rates and/or charges as may be prescribed by the Civil Aeronautics Board under its charter, and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates; (q) Establish and prescribe the rules, regulations, procedures and standards for the accreditation of driving schools; (r) Administer and operate the Civil Aviation Training Center (CATC) and the National Telecommunications Training Institute (NTTI); and (s) Perform such other powers and functions as may be prescribed by law, or as may be necessary, incidental, or proper to its mandate or as may be assigned from time to time by the President of the Republic of the Philippines. EO 292, Book IV, Title XV a. Air (i) Civil Aviation Authority of the Philippines [RA 9497: Civil Aviation Authority Act of 2008] RA 9497, Sec. 4. Creation of the Authority. - There is hereby created an independent regulatory body with quasi-judicial and quasi-legislative powers and possessing corporate attributes to be known as the Civil Aviation Authority of the Philippines (CAAP), hereinafter referred to as the "Authority" attached to the Department of Transportation and Communications (DOTC) for the purpose of policy coordination. For this purpose, the existing Air Transportation Office created under the provisions of Republic Act No. 776, as amended, is hereby abolished. Notwithstanding the foregoing, nothing in this Act shall diminish the powers and functions of the Civil Aeronautics Board (CAB) as provided for under Republic Act. No. 776, also known as "The Civil Aeronautics Act of the Philippines", as amended. (a) Establishment of Authority Headed by a Director General - The Authority shall beheaded by a Director General of Civil Aviation, referred to in this Act as the "Director General," who shall be appointed by the President of the Philippines and shall be responsible for all civil aviation in the Philippines and the administration of this Act. The Director General shall be appointed based on the qualifications herein provided and shall have a tenure of office for a period of four (4) years. His appointment may be extended for another non-extendible term of four (4) years and shall only be removed for cause in accordance with the rules and regulations prescribed by the Civil Service Commission. (b) Responsibility of the Director General - The Director General shall be responsible for the exercise of all powers and the discharge of all duties of the Authority and shall have control over all personnel and activities of the Authority. RA 9497, Sec. 21. Policies. - In the exercise and performance of its powers and duties under this Act, the Authority shall consider the following, among other things, as being in the public interest and in accordance with the public convenience and necessity:
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (a) The development and utilization of the air potential of the Philippines; (b) The encouragement and development of an air transportation system properly adapted to the present and future of foreign and domestic commerce of the Philippines; (c) The regulation of air transportation in such manner as to support sound economic condition in such transportation and to improve the relations between air carriers; (d) Ensuring the safety, quality, reliability, and affordability of air transport services for the riding public; and (e) The encouragement and development of a viable and globally competitive Philippine aviation industry. RA 9497, Sec. 24. Powers of the Board. - The Board shall have the following general powers: (a) Provide comprehensive policy guidance for the promotion and development of the Philippine aviation industry, as provided for in this Act; (b) Ensure that the Authority performs its functions in a proper, efficient and effective manner; (c) Decide the objectives, strategies and policies of the Authority in accordance with the provisions of this Act; (d) Determine the organizational structure of the Authority in accordance with the provisions of this Act, establish a human resources management system based on merit and fitness, and adopt a rational compensation and benefits scheme; (e) Exercise appellate powers on any decisions, findings and rulings of the Director General, to issue subpoena ad testificandum or subpoena duces tecum requiring the attendance and testimony of witnesses in any matter or inquiry pending before the Board and require the production of books, papers, contracts, agreements and all other documents submitted for purposes of this section to be under oath and verified by the person in custody thereof as to the truth and correctness of data appearing in such books, papers, tariffs, contracts, agreements and all other documents; (f) Exercise appellate powers to order the taking of depositions in any proceeding, or investigation, pending before the Board at any stage of such proceeding or investigation; (g) Use available services, equipment, personnel and facilities of other agencies of the Philippine Government, on a reimbursable basis when appropriate and, on a similar basis, to co-operate with those agencies in the establishment and use of services, equipment and facilities of the Authority; (h) Use the property of the Authority in such a manner as may appear to the Authority to be requisite, advantageous or convenient with a view to making the best use of any of the property of the Authority in relation to its functions under this Act; (i) Invest such of the Authority's funds that are not immediately required for operating expenses, or other immediate obligations in any business venture the Board may deem appropriate, or in such secured note, government securities, and other negotiable instruments that satisfy the guidelines prescribed by the Board. Funds of the Authority shall be deposited in such commercial and universal banks as the Board may determine, subject to the requirements of existing laws. The Board shall designate the officials authorized to deposit in or withdraw funds from such depository banks; (j) Promulgate rules and regulations as may be necessary in the interest of safety in air commerce pertaining to the issuance of the airman's certificate including the licensing of operating and mechanical personnel, type certificate for aircraft, aircraft engines, propellers and appliances, airworthiness certificates, air carrier operating certificates, air agency certificates, navigation facility and aerodrome certificates; air traffic routes; radio and aeronautical telecommunications and air navigation aids; aircraft accident inquiries; aerodromes, both public and private-owned; construction of obstructions to aerodromes; height of buildings; antennae and other edifices; registration of aircrafts; search and rescue; facilitation of air transports; operations of aircrafts, both for domestic and international, including scheduled and nonscheduled; meteorology in relation to civil aviation; rules of the air; air traffic services; rules for prevention of collision of aircrafts, identification of aircraft; rules for safe altitudes of flight; and such other rules and regulations, standards, governing other practices, methods and/or procedures as the Director General may find necessary and appropriate to provide adequately for safety regularity and efficiency in air commerce and air navigation; (k) Impose and fix reasonable charges and fees for the use of government aerodromes or air navigation facilities; for services rendered by the Authority in the rating of any aerodrome or air navigation facilities, civil aviation schools and instructors, aircraft repair stations, and aircraft radio and aeronautical telecommunications stations; (l) Fix the reasonable charges to be imposed in the use of privately-owned air navigation facilities and aerodromes; (m) Adopt a system for the registration of aircraft as hereinafter provided; (n) Determine and fix, landing fees, parking space fees, royalties on sales or deliveries, direct or indirect, to any aircraft for its use of aviation gasoline, oil and lubricants, spare parts, accessories and supplies, tools, other royalties, fees or rentals for the use of any of the property under its management and control; (o) Approve the annual and supplementary budget plan and utilization of retained revenue; (p) Exercise the corporate powers granted to the Authority; (q) Upon its own initiative or the recommendation of the Director General or an application of a private person, grant exemption from the requirements of observing rules or regulations issued in accordance with this Act: Provided, That said grant of exemption is not prejudicial to flight safety; (r) Formulate rules and regulations concerning compliance of the carrier and the public for the safe transport of goods and materials by air pursuant to international standards or Annexes to the Chicago Convention; and (s) In coordination with the appropriate government agency tasked to provide airport security, shall: (1) Prescribe reasonable regulation requiring that all passengers and all property intended to be carried in the aircraft cabin in commercial air transport be screened by weapon-detecting procedure or facilities employed or operated by employees or agents of the air operator or foreign air operator prior to boarding the aircraft for such transportation; (2) Prescribe such other reasonable rules and regulations requiring such parties, methods and procedures as the Director General may find necessary to protect persons and property aboard aircraft operating in commercial air transport against acts of criminal violence and aircraft piracy; and (3) To the extent practicable, require uniform procedures for the inspection, detention, and search of persons and property in domestic commercial air transport and international commercial air transport to assure their safety and to assure that they will receive courteous and efficient treatment by air operators and their agents and employees.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines RA 9497, Sec. 35. Powers and Functions of the Director General. - The Director General shall be the chief executive and operating officer of the Authority. He shall have the following powers, duties and responsibilities: (a) To carry out the purposes and policies established in this Act; to enforce the provisions of the rules and regulations issued in pursuance to said Act; and he shall primarily be vested with authority to take charge of the technical and operational phase of civil aviation matters; (b) To designate and establish civil airways, to acquire, control, operate and maintain along such airways, navigation facilities and to chart such airways and arrange for their publication including the aeronautical charts or maps required by the international aeronautical agencies, by utilizing the equipment, supplies or assistance of existing agencies of the government as far as practicable; (c) To issue airman's certificate specifying the capacity in which the holder thereof is authorized to serve as airman in connection with aircraft and shall be issued only upon the finding that the applicant is properly qualified and physically able to perform the duties of the position. The certificate shall contain such terms, conditions and limitations as the Director General may determine to be necessary to assure safety in air commerce: Provided, however, That the airman's license shall be issued only to qualified persons who are citizens of the Philippines or qualified citizens of countries granting similar rights and privileges to citizens of the Philippines; (d) To issue airworthiness certificate for aircraft which shall prescribe the duration of such certificate, the type of service for which the aircraft may be used, and such other terms and conditions and limitations as are required; (e) To issue air carrier operating certificate in accordance with the minimum safety standards for the operation of the air carrier to whom such certificate is issued. The air carrier operating certificate shall be issued only to aircrafts registered under the provisions of this Act; (f) To issue type certificate for aircraft, aircraft engine, propellers and appliances; (g) To inspect, classify and rate any air navigation facilities and aerodromes available for the use of aircraft as to its suitability for such use and to issue a certificate for such air navigation facility and aerodrome; and to determine the suitability of foreign aerodromes, air navigation facilities as well as air routes to be used prior to the operation of Philippine-registered aircraft in foreign air transportation and from time to time thereafter as may be required in the interest of safety in air commerce; (h) To issue certificates of persons or civil aviation schools giving instruction in flying, repair stations, and other air agencies and provide for the examination and rating thereof; (i) To provide for the enforcement of the rules and regulations issued under the provisions of this Act and to conduct investigation for violations thereto. In undertaking such investigation, to require by subpoena ad testificandum or subpoena duces tecum, the attendance and testimony of witnesses, the production of books, papers, documents, exhibits matter, evidence, or the taking of depositions before any person authorized to administer oath. Refusal to submit the reasonable requirements of the investigation committee shall be punishable in accordance with the provisions of this Act; (j) To collect and disseminate information relative to civil aeronautics and the development of air commerce and the aeronautical industry; to exchange with foreign governments, information pertaining to civil aeronautics; and to provide for direct communication on all matters relating to the technical or operational phase of aeronautics with international aeronautical agencies: (k) To acquire and operate such aircraft as may be necessary to execute the duties and functions of the Authority prescribed in this Act; (l) To plan, design, acquire, establish, construct, operate, improve, maintain, and repair necessary aerodromes and other air navigation facilities; (m) To collect and receive charges and fees for the registration of aircraft and for the issuance and/or renewal of licenses or certificates for aircraft, aircraft engines, propellers and appliances, and airmen as provided in this Act; (n) To impose fines and/or civil penalties in respect thereto; (o) To participate actively with the largest possible degree in the development of international standardization of practices in aviation matters important to safe, expeditious, and easy navigation, and to implement as far as practicable the international standards, recommended practices and policies adopted by appropriate international aeronautical agencies; (p) To exercise and perform its powers and duties under this Act consistent with any obligation assumed by the Republic of the Philippines in any treaty, convention or agreement on civil aviation matters; (q) To cooperate, assist and coordinate with any research and technical agency of the government on matters relating to research and technical studies on design, materials, workmanship, construction, performance, maintenance and operation of aircraft, aircraft engines, propellers, appliances, and air navigation facilities including aircraft fuel and oil: Provided, That nothing in this Act shall be construed to authorize the duplication of the laboratory research, activities or technical studies of any existing governmental agency; (r) To designate such prohibited and danger areas, in consonance with the requirements of the international aeronautical agencies and national security; (s) To issue, deny, suspend, cancel or revoke any certificate, license pertaining to aircraft, airmen and air agencies: Provided, That any order denying, suspending, cancelling, revoking the certificate or license may he appealed to the Board, whose decisions shall he final within fifteen (15) days from the date of notification of such denial, cancellation or revocation; (t) To grant authorization to civil aircraft or persons to carry instruments or photographic devices to be used for aerial photography or taking of pictures by photograph or sketching of any part of the Philippines; and (u) Pursuant to a board resolution, to enter into, make and execute contracts of any kind with any person, firm, or public or private corporation. Civil Aeronautics Board RA 776, as amended, Sec. 5. Composition of the Board. - The Civil Aeronautics Board shall be composed of the Secretary of Transportation and Communications or his designated representative as Chairman, the Assistant Secretary for Air Transportation of the Department of Transportation and Communications as Vice-Chairman, the Commanding General of the
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Philippine Air Force* and two (2) members to be appointed by the President of the Philippines. They shall hold office at the pleasure of the President. No member of the Board shall have any pecuniary interest in, or own any stock or bond of, any civil aeronautics enterprise. RA 776, as amended, Sec. 10(A). Except as otherwise provided herein, the Board shall have the power to regulate the economic aspect of air transportation, and shall have the general supervision and regulation of, the jurisdiction and control over, air carriers, general sales agents, cargo sales agents, and airfreight forwarders as well as their property, property rights, equipment, facilities, and franchise, in so far as may be necessary for the purpose of carrying out the provisions of this Act. RA 776, as amended, Sec. 10(C). The Board shall have the following specific powers and duties: (1) In accordance with the provisions of Chapter 4 of this Act, to issue, deny, amend, revise, alter, modify, cancel, suspend, or revoke, in whole or in part, upon petition or complaint, or upon its own initiative, any temporary operating permit or Certificate of Public Convenience and Necessity; Provided, however, That in the case of foreign air carriers, the permit shall be issued with the approval of the President of the Republic of the Philippines. (2) To fix and determine reasonable individual, joint or special rates, charges or fares, which an air carrier may demand, collect or receive for any service in connection with air commerce. The Board may adopt any original, amended, or new individual, joint or special rates, charges or fares proposed by an air carrier if the proposed individual, joint, or special rates, charges for fares are not unduly preferential or unduly discriminatory or unreasonable. The burden of proof to show that the proposed individual, joint or special rates, charges or fares are just and reasonable shall be upon the air carrier proposing the same. In fixing rates, charges, fares under the provisions of this Act, the Board shall take into consideration, among other factors: (a) The effect of such rates upon the movement of traffic; (b) The need in the public interest of adequate and efficient transportation of persons and property by air carriers at the lowest cost consistent with the furnishing of such service. (c) Such standards respecting the character and quality of service to be rendered by air carriers as may be prescribed by or pursuant to law; (d) The inherent advantages of transportation by aircraft; and (e) The need of each air carrier for revenues sufficient to enable such air carrier, under honest, economical, and efficient management, to provide adequate and efficient air carrier service. (3) To authorize any type of charters whether domestic or international and special air services or flight under such terms and conditions as in its judgment public interest requires. Notwithstanding the existence of bilateral air agreement, the CAB is authorized to grant any foreign airline increase in frequencies and/or capacities on international routes when in its judgment the national interest requires it, provided that the utilization of the increase frequencies and capacities is not more than thirty days. All grants of frequencies and/or capacities shall be subject to the approval of the President. (4) To approve or disapprove increase and/or decrease of capital, lease, purchase, sales of aircraft of air carrier engaged in air commerce; consolidation, merger, purchase, lease and acquisition and control of operating contracts between domestic foreign air carriers, or between domestic air carriers or any person engaged in any phase of aeronautics. (5) To inquire into the management of the business of any air carrier and, to the extent reasonably necessary for such inquiry, to obtain from such carrier, and from any person controlling, or controlled by, or under common control with, such air carrier, full and complete reports and other informations. Such reports shall be under oath whenever the Board so requires. (6) To require annual, monthly, periodical, and special reports from any air carrier, to prescribe the manner and form in which such reports shall be made, and to require from any air carrier specific answers to all questions upon which the Board may deem information to be necessary. Such reports shall be under oath whenever the Board so requires. The Board may also require any air carrier to file with it any contract, agreement, understanding or arrangement, or a true copy thereof, between such air carrier and any other carrier or person, in relation to any traffic affected by the provisions of this Act. (7) To prescribe the forms of any and all accounts, records, and memoranda of the movement of traffic, as well as of the receipts and expenditures of money, and the length of times such accounts, records and memoranda shall be preserved: Provided, that any air carrier may keep additional accounts, records, or memoranda if they do not impair the integrity of the accounts, records, or memoranda prescribed or approved by the Board and do not constitute an undue financial burden on such air carrier. (8) To require each officer and director of any air carrier to transmit a report describing the shares of stock with any persons engaged in any phase or other interest held by such air carrier of aeronautics, and the holding of the stock in and control of, other persons engaged in any phase of aeronautics. RA 776, as amended, Sec. 11. Certificate of Public Convenience and Necessity is a permit issued by the Board authorizing a person to engage in air commerce and/or transportation, foreign and/or domestic. No person shall engage in air commerce unless there is in force a permit issued by the Board. No general sales agent, cargo sales agent or airfreight forwarder shall engage in any of the activities mentioned in Section 3 paragraphs (jj), (kk) and (ll) respectively, unless there is in force a permit or any other form of authorization issued by the Board. Any permit may be altered, amended, modified, suspended, canceled or revoked by the Board in whole or in part, upon complaints or petition or upon the Board's initiative as hereinafter provided, whenever the Board finds such action to be in the public interest. There shall be attached to the exercise of the privileges granted by the permit, or amendment thereto, such reasonable terms, conditions, or limitations as, in the judgment of the Board, the public interest may require. No permit shall confer any proprietary, property, or exclusive right in the use of any air space, civil airway, landing area of government air navigation facility.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines The permit shall, among others specify the terminal and intermediate points, if any, between which the air carrier is authorized to operate the service to be rendered, the time of arrival and departure at each point, and the frequency of flights. Provided, that no change in routes, rates, schedules or frequency nor supplemental or additional flights to those covered by an air commerce permit or franchise shall be affected without prior approval of the Civil Aeronautics Board. In so far as the operation is to take place within the Philippines, the permit shall designate the terminal and intermediate points only insofar as the Board shall deem practicable, and otherwise shall designate only the general route or routes to be followed. No carrier shall abandon any route, or part thereof for which a permit has been issued, unless upon findings by the Civil Aeronautics Board that such an abandonment is uneconomical and is in the public interest. RA 776, as amended, Sec. 12. Citizenship requirement. - Except as otherwise provided, in the Constitution and existing treaty or treaties, permit authorizing a person to engage in domestic air commerce and/or transportation shall be issued only to citizens of the Philippines. PAL v . CAB. Section 10-C(1) of Republic Act No. 776 explicitly authorizes CAB to issue a "temporary operating permit," and nothing contained, either in said section, or in Chapter IV of Republic Act No. 776, negates the power to issue said "permit", before the completion of the applicant's evidence and that of the oppositor thereto on the main petition. Indeed, the CAB's authority to grant a temporary permit "upon its own initiative," strongly suggests the power to exercise said authority, even before the presentation of said evidence has begun. || Moreover, we perceive no cogent reason to depart, in connection with the commercial air transport service, from the policy of our public service law, which sanctions the issuance of temporary or provisional permits or certificates of public convenience and necessity, before the submission of a case for decision on the merits. The overriding considerations in both instances are the same, namely, that the service be required by public convenience and necessity, and, that the applicant is fit, as well as willing and able to render such service properly, in conformity with law and the pertinent rules, regulations and requirements PAL v. CAB, supra. b. Land (i) Land Transportation Office EO 125-A, Sec. 9. Assistant Secretaries and Service Chiefs. The Secretary shall also be assisted by eight (8) Assistant Secretaries appointed by the President upon the recommendation of the Secretary, each of whom shall respectively be responsible for the following four (4) staff offices composed of eight (8) services and four (4) line offices, and shall report to the respective Undersecretaries assigned by the Secretary, which Undersecretary shall have control and supervision over said respective services and offices: (a) Office of the Assistant Secretary for Administrative and Legal Affairs; 1) Administrative Service, and 2) Legal Service (b) Office of the Assistant Secretary for Finance and Comptrollership; 1) Finance and Management Service, and 2) Comptrollership Service (c) Office of the Assistant Secretary for Planning and Project Development; 1) Planning Service, and 2) Project Development Service (d) Office of the Assistant Secretary for Management Information Service and Project Management; 1) Management Information Service, and 2) Project Management Service (e) Office of the Assistant Secretary for Land Transportation; (f) Office of the Assistant Secretary for Postal Services; (g) Office of the Assistant Secretary for Telecommunications; (h) Office of the Assistant Secretary for Air Transportation. Each of the above-named services shall be headed by a service chief appointed by the President upon the recommendation of the Secretary. EO 125-A, Sec. 11. Department Regional Offices. The Department shall have three (3) Department Regional Offices in each of the administrative regions of the country: the Department Regional Office for land Transportation, the Department Regional Office for Telecommunications and the Department Regional Office for Postal Services. The present Regional Offices of the Land Transportation Commission are hereby abolished and their functions are transferred to the respective Department Regional Offices for Land Transportation. The present Regional Offices of the Bureau of Telecommunications are hereby abolished and their functions are transferred to the respective Department Regional Offices for Telecommunications. The present Regional Offices of the Bureau of Posts are hereby abolished and their functions are transferred to the corresponding Department Regional Offices for Postal Services. Each Department Regional Office shall be headed by a Department Regional Director and assisted by a Department Assistant Regional Director. The present Airport Offices of the Bureau of Air Transportation are hereby abolished and their functions are transferred to the Department Airport Offices. The abolition of the herein Regional Offices and the transfer of their functions shall be governed by the provisions of Section 15 (b) hereof. The Department Regional Offices shall essentially be line in character and shall be responsible for the delivery of all front line services of the Department. For such purposes, the Department Regional Offices shall have within their respective administrative regions, the following functions: (a) Implement laws, and policies, plans, programs, projects, rules and regulations of the Department; (b) Provide efficient, and effective service to the people; (c) Coordinate with regional offices of other departments, offices and agencies; (d) Coordinate with local government units; (e) Perform such other functions as may be provided by law. EO 125-A, Sec. 13(a). The Land Transportation Commission is hereby abolished and its staff functions are transferred to the service offices of the Department Proper and its line functions are transferred to the Department Regional Offices for Land
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Transportation as provided in Section 11 herein. Such transfer of functions is subject to the provisions of Section 15 (b) hereof. The quasi-judicial powers and functions of the Commission are transferred to the Department. The corresponding position structure and staffing pattern shall be approved and prescribed by the Secretary pursuant to Section 16 hereof. Admin Code, Title XV, Sec 9(1). Land Transportation Franchising and Regulatory Board EO 202, Sec. 1. Creation of the Land Transportation Franchising and Regulatory Board. There is hereby created in the Department of Transportation and Communications, the Land Transportation Franchising and Regulatory Board hereinafter referred to as the "Board". EO 202, Sec. 2. Composition of the Board. The Board shall be composed of a Chairman and two (2) members with the same rank, salary and privileges of an Assistant Secretary, all of whom shall be appointed by the President of the Philippines upon recommendation of the Secretary of Transportation and Communications. One (1) member of the Board shall be a member of the Bar and shall have engaged in the practice of law in the Philippines for at least five (5) years, another a holder of a degree in civil engineering, and the other a holder of a degree in economics, finance or management both with the same number of years of experience and practice. EO 202, Sec. 4. Supervision and Control Over the Board. The Secretary of Transportation and Communications, through his duly designated Undersecretary, shall exercise administrative supervision and control over the Land Transportation Franchising and Regulatory Board. EO 202, Sec. 5. Powers and Functions of the Land Transportation Franchising and Regulatory Board. The Board shall have the following powers and functions: a. To prescribe and regulate routes of service, economically viable capacities and zones or areas of operation of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans and programs approved by the Department of Transportation and Communications; b. To issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefor; c. To determine, prescribe and approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles; d. To issue preliminary or permanent injunction, whether prohibitory or mandatory, in all cases in which it has jurisdiction, and in which cases the pertinent provisions of the Rules of Court shall apply; e. To punish for contempt of the Board, both direct and indirect, in accordance with the pertinent provisions of, and the penalties prescribed by, the Rules of Court; f. To issue subpoena and subpoena duces tecum and summon witnesses to appear in any proceedings of the Board, to administer oaths and affirmations; g. To conduct investigations and hearings of complaints for violation of the public service laws on land transportation and of the Board's rules and regulations, orders, decisions and/or rulings and to impose fines and/or penalties for such violations; h. To review motu proprio the decisions/actions of the Regional Franchising and Regulatory Office herein created; i. To promulgate rules and regulations governing proceedings before the Board and the Regional Franchising and Regulatory Office: Provided, That except with respect to paragraphs d, e, f and g hereof, the rules of procedure and evidence prevailing in the courts of laws should not be controlling and it is the spirit and intention of said rules that the Board and the Regional Franchising and Regulatory Offices shall use every and all reasonable means to ascertain facts in its case speedily and objectively and without regard to technicalities of law and procedures, all in the interest of due process; j. To fix, impose and collect, and periodically review and adjust, reasonable fees and other related charges for services rendered; k. To formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standards of measurements and/or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their utilities and in their stations such devices, equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations; l. To coordinate and cooperate with other government agencies and entities concerned with any aspect involving public land transportation services with the end in view of effecting continuing improvement of such services; and m. To perform such other functions and duties as may be provided by law, or as may be necessary, or proper or incidental to the purposes and objectives of this Executive Order. EO 202, Sec. 6. Decision of the Board; Appeals therefrom and/or Review thereof. The Board, in the exercise of its powers and functions, shall sit and render its decisions en banc. Every such decision, order, or resolution of the Board must bear the concurrence and signature of at least two (2) members thereof. The decision, order or resolution of the Board shall be appealable to the Secretary within thirty (30) days from receipt of the decision: Provided, That the Secretary may motu proprio review any decision or action of the Board before the same becomes final. EO 202, Sec. 7. Creation of Regional Franchising and Regulatory Offices. There shall be a Regional Franchising and Regulatory Office in each of the administrative regions of the country which shall be headed by a Board Regional Manager having the rank, salary and privileges of a Department Assistant Regional Director. The Regional Franchising and Regulatory Offices shall hear and decide uncontested applications/petitions for routes, within their respective administrative regions: Provided, That applications/petitions for routes extending their respective territorial jurisdictions shall be heard and decided by the Board. Admin Code, Title XV, Sec 15. same as Sec. 1, EO 202Admin Code, Title XV, Sec 16. same as Sec. 2, EO 202Admin Code, Title XV, Sec 17. see EO 202Admin Code, Title XV, Sec 18. see EO 202-
(ii)
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Admin Code, Title XV, Sec 19. see EO 202Admin Code, Title XV, Sec 20. see EO 202Admin Code, Title XV, Sec 21. see EO 202Admin Code, Title XV, Sec 22. Decisions of the Regional Franchising Regulatory Offices shall be appealable to the Board within 30 days from receipt of the decision. KMU Labor Center v. Garcia. Public utilities are privately owned and operated businesses whose service are essential to the general public. They are enterprises which specially cater to the needs of the public and conduce to their comfort and convenience. As such, public utility services are impressed with public interest and concern. The same is true with respect to the business of common carrier which holds such a peculiar relation to the public interest that there is superinduced upon it the right of public regulation when private properties are affected with public interest, hence, they cease to be juris privati only. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect grants to the public an interest in that use, and must submit to the control by the public for the common good, to the extent of the interest he has thus created. Maritime Industry Authority EO 125, Sec. 14, as amended by EO 125-A, Sec. 3. Maritime Industry Authority. The Maritime Industry Authority is hereby retained and shall have the following functions: (a) Develop and formulate plans, policies, programs, projects, standards, specifications and guidelines geared toward the promotion and development of the maritime industry, the growth and effective regulation of shipping enterprises, and for the national security objectives of the country; (b) Establish, prescribe and regulate routes, zones and/or areas of operation of particular operators of public water services; (c) Issue Certificates of Public Convenience for the operation of domestic and overseas water carriers; (d) Register vessels as well as issue certificates, licenses or documents necessary or incident thereto; (e) Undertake the safety regulatory functions pertaining to vessel construction and operation including the determination of manning levels and issuance of certificates of competency to seamen; (f) Enforce laws, prescribe and enforce rules and regulations, including penalties for violations thereof, governing water transportation and the Philippine merchant marine, and deputize the Philippine Coast Guard and other law enforcement agencies to effectively discharge these functions; (g) Undertake the issuance of licenses to qualified seamen and harbor, bay and river pilots; (h) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public water transport utilities, facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine Government as the proper arbiter of such charges or rates. (i) Accredit marine surveyors and maritime enterprises engaged in shipbuilding, shiprepair, shipbreaking, domestic and overseas shipping ship management and agency; (j) Issue and register the continuous discharge book of Filipino seamen; (k) Establish and prescribe rules and regulations, standards and procedures for the efficient and effective discharge of the above functions; (l) Perform such other functions as may now or hereafter be provided by law. RA 9295, Sec. 10. Jurisdiction; Power; and Duties of MARINA. - The MARINA shall have the power and authority to: (1) Register vessels; (2) Issue certificates of public convenience or any extensions or amendments thereto, authorizing the operation of all kinds. Classes and types of vessels in domestic shipping: Provided, That no such certificate shall be valid for a period of more than twenty-five (25) years; (3) Modify, suspend or revoke at any time upon notice and hearing, any certificate, license or accreditation it may have issued to any domestic ship operator; (4) Establish and prescribe routes, zones or areas of operations of domestic ship operators; (5) Require any domestic ship operator to provide shipping services to any coastal area, island or region in the country where such services are necessary for the development of the area, to meet emergency sealift requirements, or when public interest so requires; (6) Set safety standards for vessels in accordance with applicable conventions and regulations; (7) Require all domestic ship operators to comply with operational and safety standards for vessels set by applicable conventions and regulations, maintain its vessels in safe and serviceable conditions, meet the standards of safety of life at sea and safe manning requirements, and furnish safe, adequate, efficient, reliable and proper service at all times; (8) Inspect all vessels to ensure and enforce compliance with safety standards and other regulations; (9) Ensure that all domestic ship operators shall have the financial capacity to provide and sustain safe, reliable, efficient and economic passenger or cargo service, or both; (10) Determine the impact which any new service shall have to the locality it will serve; (11) Adopt and enforce such rules and regulations which will ensure compliance by every domestic ship operator with required safety standards and other rules and regulations on vessel safety; (12) Adopt such rules and regulations which ensure the reasonable stability of passengers and freight rates and, if necessary, to intervene in order to protect public interest; (13) Hear and adjudicate any complaint made in writing involving any violation of this law or the rules and regulations of the Authority; (14) Impose such fines and penalties on, including the revocations of licenses of any domestic ship operator who shall fail to maintain its vessels in safe and serviceable condition, or who shall violate or fail to comply with safety regulations; (15) Investigate any complaint made in writing against any domestic ship operator, or any shipper, or any group of shippers regarding any matter involving violations of the provisions of this Act;
c.
Water (i)
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (16) Upon notice and hearing, impose such fines, suspend or revoke certificates of public convenience or other license issued, or otherwise penalize any ship operator, shipper or group of shippers found violating the provisions of this Act; and (17) Issue such rules and regulations necessary to implement the provisions of this Act: Provided, That such rules and regulations cannot change or in any way amend or be contrary to the intent and purposes of this Act. RA 9295, Sec. 11. Rates. - Every domestic ship operator shall have the right to fix its own passenger pr cargo rates, or both. In relation to Sec. 8. Deregulation of the Domestic Shipping Industry. - In order to encourage investments in the domestic shipping industry by existing domestic ship operators and attract new investment from new operators and investors, domestic ship operators are hereby authorized to establish their own domestic shipping rates: Provided, That effective competition is fostered and public interest is served. The MARINA shall monitor all shipping operations and exercise regulatory intervention where it is established after due process that public interest needs to be protected and safeguarded.
II.
Common carriers A. In General 1. Definitions, essential elements CC, 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public. Transportation defined.-- a contract of transportation is one whereby a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price Classification: 1. As to object: (1) things; (2) persons; (3) news 2. As to place of travel: (1) land; (2) water; (3) air Parties to contract of transportation: (1) shipper or consignor.-- person to be transported; one who gives rise to the contract of transportation by agreeing to deliver the things or news to be transported, or to present his own person or those of other or others in the case of transportation of passengers (2) carrier or conductor.-- one who binds himself to transport persons, things, or news as the case may be; one employed in or engaged in the business of carrying goods for other for hire (3) consignee -- the party to whom the carrier is to deliver the things being transported; one to whom the carrier may lawfully make delivery in accordance with its contract of carriage (but the shipper and the consignee may be one person) Freight defined.-- The terms has been defined as: (1) the price or compensation paid for the transportation of goods by a carrier, at sea, from port to port. But the term is also used to denote (2) the hire paid for the carriage of goods on land from place to place, or on inland streams or lakes. The name is also applied to (3) the goods or merchandise transported at sea, on land, or inland streams or lakes. Thus the term is used in 2 senses: to designate the price for the carriage, also called freightage, or to designate the goods carried. Contracts through transportation agents.-- A contract of transportation is not changed, altered or affected by the mere fact that the obligor avails of other parties to effect the transportation agreed upon, as in the case of transportation agents. Carriers defined.-- Persons or corporations who undertake to transport or convey goods, property or persons, from one place to another, gratuitously or for hire, and are classified as private or special carriers, and common or public carriers Private carriers defined.-- Those who transport or undertake to transport in a particular instance for hire or reward Common carriers vs Private carriers: (1) the common carrier holds (1) the private carrier agrees himself out in common, that is, in some special case with some to all persons who choose to emprivate individual to carry ploy him, as ready to carry for for hire hire; no one can be a common carrier unless he has held himself out to the public as a carrier in such a manner as to render him liable to an action if he should refuse to carry for anyone who wished to employ him (2) a common carrier is bound to (2) a private carrier is not carry all who offer such goods as bound to carry for any reason, it is accustomed to carry and unless it enter into a special tender reasonable compensation agreement to do so for carrying them (3) a common carrier is a public service (3) a private carrier does not and is therefore subject to regulation hold itself out as engaged in the business for the public, and is therefore not subject to regulation as a common carrier Test for a common carrier: (1) He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for persons generally as a business, and not a casual occupation. (2) He must undertake to carry goods of the kind to which his business is confined. (3) He must undertake to carry by the methods by which his business is conducted, and over his established roads. (4) The transportation must be for hire.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines The true test is whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business actually transacted, or the no. and character of the conveyances used in the employment (the test is therefore the character of the business actually carried on by the carrier.) Case: an airplane owner is a common carrier where he undertakes for hire to carry all persons who apply for passage indiscriminately as long as there is room and no legal excuse for refusing; airlines engaged in the passenger service on regular schedules on definite routes, who solicit patronage of the traveling public, advertise schedules for routes, times of leaving and rates of fare, and make the usual stipulation as to baggage are common carriers Characteristics of common carriers: (1) The common carrier undertakes to carry for all people indifferently; he holds himself out as ready to engage in the transportation of goods for hire as a public employment and not as a casual occupation, and he undertakes to carry for all persons indifferently, within the limits of his capacity and the sphere of the business required of him, so that he is bound to serve all who apply and is liable for refusal, without sufficient reason, to do so (2) The common carrier cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in those goods Exception: for some sufficient reason, where the discrimination in such goods is reasonable and necessary (substantial grounds) (3) No monopoly is favored - the Commission has the power to say what is a reasonable compensation to the utility and to make reasonable rules and regulations for the convenience of the traveling public and to enforce them (4) Public convenience - for the best interests of the public Meaning of Public use.-- It is not confined to privileged individuals, but is open to the indefinite public; there must be a right which the law compels the owner to give to the general public. Public use is not synonymous with public interest. The true criterion is whether the public may enjoy it by right or only by permission The law prohibits unreasonable discrimination by common carriers.-- The law requires common carriers to carry for all persons, either passengers or property, for exactly the same charge for a like or contemporaneous service in the transportation of like kind of traffic under substantially similar circumstances or conditions. The law prohibits common carriers (CC) from subjecting any person, etc. or locality, or any kind of traffic, to any undue or unreasonable prejudice or discrimination whatsoever. Exception: When the actual cost of handling and transporting is different, then different rates may be charged Cases: (1) merchandise of like quantity may not be considered alike - the quantity, kind and quality may be exactly the same, and yet not be alike, so far as the cost of transportation is concerned (2) shipments may be alike although composed of different classes of merchandise - difference in the charge for handling and transporting may only be made when the difference is based upon actual cost Determination of justifiable refusal: This involves a consideration of the following (1) suitability of the vessels of the company for the transportation of such products; (2) reasonable possibility of danger or disaster, resulting from their transportation in the form and under the conditions in which they are offered for carriage; (3) the general nature of the business done by the carrier; (4) all the attendant circumstances which might affect the question of the reasonable necessity for the refusal by the carrier to undertake the transportation of this class of merchandise Case: The mere fact that the carriage of dynamites may lead to destructive explosions is not sufficient to justify refusal if it can be proven that in the condition in which it is offered for carriage there is no real danger to the carrier nor reasonable ground to fear that the vessel and those on board will be exposed to unnecessary or unreasonable risks US v. Tan Piaco. Under the Public Service Law, two things are necessary : (1) the individual, co-partnership, etc. must be a public utility; and (2) the business in which such individual, co-partnership, etc. is engaged must be for public use. "Public use" means the same as "use by the public." The essential feature of public use is that it is not confined to privileged individuals, but is open to the indefinite public. In determining whether a use is public, we must look not only to the character of the business to be done, but also to the proposed mode of doing it. If the use is merely optional with the owners, or the public benefit is merely incidental, it is not a public use, authorizing the exercise of the jurisdiction of the public utility commission. There must be, in general, a right which the law compels the owner to give to the general public. It is not enough that the general prosperity of the public is promoted. Public use is not synonymous with public interest. The true criterion by which to judge the character of the use is whether the public may enjoy it by right or only by permission. Home Insurance Co. v. American Steamship. The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of the agent would be void only if the strict public policy governing CC is applied. Such policy has no force where the public at large is not involved, as in the case of a ship totally chartered (as in this case) for the use of a single party. Based on the stipulation, recovery cannot be had, for loss or damage to the cargo against shipowners, unless the same is due to personal acts or negligence of said owner or its managers, as distinguished from agents or employees. No personal act or negligence has been proved. De Guzman v. CA. Cendana is properly characterized as a common carrier even though he merely backhauled goods for other merchants, and even if it was done on a periodic basis rather than on a regular basis, and even if his principal occupation was not the carriage of goods. || Art. 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity. It also avoids making a distinction between a person or enterprise offering transportation services on a regular or scheduled basis and one offering service on an occasional, episodic or unscheduled basis. Neither does it make a distinction between a carrier offering its services to the general public and one who offers services or solicits business only from a narrow segment of the population. || The fact that Cendana does not hold a CPC is no excuse to exempt him from incurring liabilities as a CC. Otherwise, it would be to reward persons who fail to comply with applicable statutory reqts. and would be offensive to public policy. The liability arises the moment a
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations Bascos v. CA. Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the presumption of negligence does not attach and these instances are enumerated in Article 1734. In those cases where the presumption is applied, the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption. Planters Products v. CA. The presumption of negligence on the part of respondent carrier has been overcome by the showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo. On the other hand, no proof was adduced by the petitioner showing that the carrier was remiss in the exercise of due diligence in order to minimize the loss or damage to the goods it carried. Fabre v. CA. As common carriers, the Fabres were bound to exercise extraordinary diligence for the safe transportation of the passengers to their destination. This duty of care is not excused by proof that they exercised the diligence of a good father of the family in the selection and supervision of their employee. As Art. 1759 of the Code provides: Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the formers employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. FPIP v. CA. A "common carrier" may be defined, broadly, as one who holds himself out to the public as engaged in the business of transporting persons or property from place to place, for compensation, offering his services to the public generally. Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public." The test for determining whether a party is a common carrier of goods is: (1)He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation; (2) He must undertake to carry goods of the kind to which his business is confined; (3) He must undertake to carry by the method by which his business is conducted and over his established roads; and (4) The transportation must be for hire. Asia Lighterage and Shipping v. CA. A common carrier need not have a fixed and public route known nor does have a terminals or issue tickets. Crisostomo v. CA. It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. || While petitioner concededly bought her plane ticket through the efforts of respondent company, this does not mean that the latter ipso facto is a common carrier. At most, respondent acted merely as an agent of the airline, with whom petitioner ultimately contracted for her carriage to Europe. Nature of Business; power of state to regulate CC, 1765. The Public Service Commission may, on its own motion or on petition of any interested party, after due hearing, cancel the certificate of public convenience granted to any common carrier that repeatedly fails to comply with his or its duty to observe extraordinary diligence as prescribed in this Section. Munn v. Illinois. Waite, for the Court, took a broad view of the state's police power. He argued that the states may regulate the use of private property "when such regulation becomes necessary for the public good." Waite resurrected an ancient legal doctrine to support his view: "When property is affected with a public interest, it ceases to be juris privati only." Pantranco v. PSC. The business of a common carrier holds such a peculiar relation to the public interest that there is superinduced upon it the right of public regulation. When private property is affected with a public interest, it ceases to be juris privati only. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he had thus created. He may withdraw his grant by discontinuing the use, but so long as he maintains the use, he must submit to control. Indeed this right is so far beyond question that it is settled that the power of the state to exercise legislative control over public utilities may be exercised through the board of commissioners. This right of the state to regulate public utilities is founded upon the police power, and statutes for the control and regulation of utilities are a legitimate exercise thereof, for the protection of the public as well as the utilities themselves. Such statutes are not unconstitutional, either as impairing the obligation of contracts, taking property without due process, or denying the equal protection of the laws, especially inasmuch as the question WON private property shall be devoted to a public use and the consequent burdens assumed is ordinarily for the owner to decide; and if he voluntarily places his property in public service he cannot complain that it becomes subject to the regulatory powers of the state. This is more so in the light of authorities which hold that a CPC constitutes neither a franchise nor a contract, confers no property rights and is a mere license or privilege. Nature and Basis of Liability. CC, 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756. Extraordinary diligence required of common carriers.-- The law requires CC to exercise extra-ordinary diligence which means that they must render service with the greatest skill and utmost foresight. The extra-ordinary diligence required of carriers in the handling of the goods of the shippers and consignees last from the time the cargoes are loaded in the vessels until they are discharged and delivered to the consignees. Reasons for requiring extra-ordinary diligence.-- The nature of the business of common carriers and the exigencies of public policy demand that they observe extra-ordinary diligence; the business of CC is impressed with a special public duty and therefore subject to control and regulation by the state. The public must of necessity rely on the care and skill of CC in the vigilance over the goods and safety of the passengers
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Rigorous law on common carriers not applicable to special employment as carrier.-- The laws applicable to CC are rigorous and should not be extended to a person who has neither expressly assumed that character, nor by his conduct and from the nature of his business justified the belief on the part of the public that he intended to assume it. Registered owner primarily and solidarily liable with driver, under the "kabit system."-- Registered owner is primarily and solidarily liable for the damage caused by the vehicle registered in his name, even if the said vehicle had already been sold, leased or transferred to another person who was, at the time of the accident, actually operating the vehicle. The operator of record continues to be the operator of the vehicle in contemplation of law, as regards the public and third persons, and as such is responsible for the consequences incident to its operation; such owner/operator of record is held in contemplation of law as the employer of the driver. Kabit system.-- One whereby a person who has been granted a certificate of public convenience allows other persons who own vehicles to operate them under such license, for a fee or percentage of the earnings. This is contrary to public policy, and therefore, void and inexistent; "this is a pernicious system that cannot be too severely condemned; it constitutes an imposition upon the good faith of the govt." Reason for holding registered owner liable.-- The law does not relieve the registered owner directly of the responsibility that the law fixes and places upon him as an incident or consequence of registration -- where a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him by collusion with others or otherwise, to escape said responsibility and transfer the same to an indefinite person or to one who possesses no property with which to respond financially for the damage or injury done; in case of an accident, the registered owner should not be allowed to disprove his ownership to the prejudice of the person injured or to be relieved from responsibility Cangco v. MRR. It cannot be doubted that the EEs of the railroad co. were guilty of negligence in piling sacks on the platform; their presence constituted an effective legal cause of the injuries sustained by Cangco. It is impt. to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. Its liability is direct and immediate (culpa contractual), differing essentially, from that presumptive responsibility for the negligence of its servants, which can be rebutted by proof of the exercise of due care in the selection and supervision of EEs (culpa aquiliana). Isaac v. AL Ammen. A CC is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all circumstances. This extra-ordinary diligence required of common carriers is calculated to protect the passengers from the tragic mishaps that frequently occur in connection with rapid modern transportation. This high standard of care is imperatively demanded by the preciousness of human life and by the consideration that every person must in every way be safeguarded against all injury. Principles as to liability of CC: (1) the liability of a carrier is contractual and arises upon breach of its obligation; there is breach if it fails to exert extra-ordinary diligence accdg. to all the circumstances of each case; (2) a carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having due regard for all the circumstances; (3) a carrier is presumed to have been at fault or to have acted negligently in case of death of, or injury to, passengers, it being it duty to prove that it exercised extra-ordinary diligence; (4) the carrier is not an insurer against all risks of travel Fores v. Miranda. In case of breach of contract (including one of transportation), proof of bad faith or fraud, i.e., wanton or deliberately injurious conduct, is essential to justify an award of moral damages. The exception to this is when a mishap results in the death of a passenger, in which a CC is liable to pay moral damages for the mental anguish by reason of the death of the passenger. So where the injured passenger does not die, moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. Phil. Rabbit v. IAC. The principle of last clear chance would call for application in a suit between the owners and drivers of two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence. LRTA v. Navidad. Carriers presumed to be at fault or been negligent and by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure. || Where it hires its own employees or avail itself of the services of an outsider or an independent firm to undertake the task, the common carrier is NOT relieved of its responsibilities under the contract of carriage 4. Classes of common carriers CC, 1732, supra. CC, 1733, supra. CC, 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. 5. Law Applicable CC, 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. CC, 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration. Common Carriage of Goods 1. Liability and presumption of negligence CC, 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756. CC, 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act of omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers;
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (5) Order or act of competent public authority. CC, 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733. Responsibility of common carriers.-In general, CC are responsible for the loss, destruction, or deterioration of the goods carried by them. This responsibility arises from contract, as the relation between a carrier and its patrons is of a contractual nature. A failure on the carrier to use extra-ordinary care in carrying goods or passengers safely is a breach of contract and constitutes culpa contractual not culpa aquiliana. While the liability of a carrier as an insurer is not recognized in this jurisdiction, a carrier is liable for damages suffered by goods carried if such damages arise from its negligence. The carrier is also liable even in those cases where the cause of the loss or damage is unknown. Due extraordinary diligence required, carriers given wide discretion in selection and supervision of persons to handle goods.-- The law requires CC to exercise extra-o diligence which means that they must render service with the greatest skill and utmost foresight. The extra-o diligence required of CC in the handling of the goods of the shipper and the consignees lasts from the time the cargoes are loaded in the vessels until they are discharged and delivered to the consignees. To comply with this obligation, CC should be afforded the right of having a wide discretion in the selection and supervision of persons who will handle the goods. Air carrier can terminate services of pilot for serious misconduct and drunkenness, because of its duty of extraordinary dilignece.-The CC can terminate the services of its drivers, pilots and EEs for serious misconduct and drunkenness because of its duty of extra-ordinary diligence. Whenever a passenger dies or is injured the presumption is that the CC is at fault notwithstanding the fact that it has exercised due diligence of a good father of a family in the selection and supervision of its EEs. Thus, extra-ordinary measures and diligence should be exercised by it for the safety of its passengers and their belongings. A CC can terminate an EE whose continued service is inimical to its interests and the safety of the passengers. Carrier has duty to keep and care for goods carried.-- It is the duty of the CC to properly and carefully handle, carry, keep and care for the goods carried and to exercise due care to ascertain and consider the nature of the goods offered for shipment and to use such methods for their care during the voyage as their nature requires. The carrier is liable for injury to, or loss of, cargo resulting from the failure to properly care for and handle the cargo en route; and it is required to provide adequate ventilation for the safe carriage of the cargo, and provide reasonable and ordinary inspection and care in and about the transportation of cargo. A vessel should not accept cargo unless it can be given the type of storage that its character requires, for placing of conditions in a bill of lading does not relieve the vessels of obligation to take appropriate care of the cargo. Duty of carrier to deliver cargo in good condition as when loaded.-- There is no absolute obligation for a CC to accept cargo. It should not be accepted unless it can be given the type of storage that its character requires. Where a vessel accepts a cargo for shipment for valuable consideration, it takes the risk of delivering it in good condition as when it was loaded. And if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom. In the exercise of extra-ordinary diligence required by law, the CC must give due regard to all circumstances and take all steps necessary to insure the safety of the passengers and the goods given the circumstances. Presumption of negligence.-- Under Art. 1735, if the goods are proved to have been lost, destroyed or deteriorated, CC are presumed to have been at fault or to have acted negligently, unless they prove that they have observed the extra-o diligence required by law. The plaintiff needs only to prove that the goods he transported have been lost, destroyed or deteriorated CC must then prove that he has exercised extra-ordinary diligence required by law or that the loss, etc. was due to accident or some other circumstances inconsistent with its liability Mere proof of delivery of goods in order to a carrier, and of their arrival at the place of destination in bad order makes out a prima facie case against the CC Defenses available to CC: 1. Art. 1734 2. Art. 1735 (exercise of extra-ordinary diligence required by law) 3. Natural disaster: The CC is exempt from liability if he proves that the loss or destruction of the merchandise was due to accident and force majeure and not to fraud, fault or negligence on the part of the EEs and owners of the CC. CC cannot interpose the defense that it exercised due diligence in the selection and supervision of EEs. The liability of the CC arises from breach of the contract of carriage and not from culpa aquiliana. It is however the duty of CC to teach their drivers not to overload vehicles, not to exceed safe and legal speed limits, and other safety precautions. Carrier not insurer.-CC are not required to exercise all the care, skill and diligence of which the human mind can conceive nor such as will free the transportation of passengers from all possible perils. A CC is not an insurer of the safety of the passengers and is not absolutely and at all events to carry them safely and without injury. Ynchausti Steamship v. Dexter. General rule: mere proof of delivery of goods in good order to a carrier, and proof of their arrival at the place of destination in bad order, makes a prima facie case against the carrier. Exception: if there is an explanation given. The carrier must prove the loss is due to accident or some other circumstance inconsistent with its liability. Mirasol v. Dollar. Shippers who are forced to ship goods on a ship have some legal rights, and when goods are delivered on board ship in good order and condition, and the shipowner delivers them to the shipper in bad order and condition, it then devolves upon the shipowner to both allege and prove that the goods were damaged by the reason of some fact which legally exempts him from liability; otherwise, the shipper would be left without any redress, no matter what may have caused the damage. || Dollar Co. having received the two boxes in good condition, its legal duty was to deliver them to Mirasol in the same condition in which it received them. From the time of their delivery to
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Dollar Co. in New York until they are delivered to Mirasol in Manila, the boxes were under the control and supervision of the carrier and beyond the control of Mirasol. || Dollar Co. having admitted that the boxes were damaged while in transit and in its possession, the burden of proof then shifted, and it devolved upon the carrier to both allege and prove that the damage was caused by reason of some fact which exempted it from liability. As to how the boxes were damaged, when or where, was a matter peculiarly and exclusively within the knowledge of the carrier. || The fact that the cases were damaged by "sea water," standing alone and within itself, is not evidence that they were damaged by force majeure or for a cause beyond the carrier's control. The carrier must prove that the cases were damaged by sea water, as per Art. 361 of the Code of Commerce. Exemption from liability Proof of the delivery of the goods in good order to a carrier, and of their arrival at the place of destination short or in bad order, makes a prima facie case; it is incumbent on the carrier, in order to exonerate itself, to prove that the loss or injury was due to some circumstances inconsistent with its liability (a) Natural Disaster CC, 1734(1), supra. CC, 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods. The same duty is incumbent upon the common carrier in case of an act of the public enemy referred to in Article 1734, No. 2. CC, 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility. Code of Commerce, 361. The merchandise shall be transported at the risk and venture of the shipper, if the contrary has not been expressly stipulated. As a consequence, all the losses and deteriorations which the goods may suffer during the transportation by reason of fortuitous event, force majeure, or the inherent nature and defect of the goods, shall be for the account and risk of the shipper. Proof of these accidents is incumbent upon the carrier. Effect of New Civil Code.-- Transportation of the merchandise "at the risk and venture of the shipper" means that the shipper will suffer losses and deterioration arising from fortuitous event, force majeure, or inherent nature and defects of the goods. It does not mean that the carrier is free from liability for losses and deterioration arising from his negligence or fault, w/c is presumed. Thus construed, par. 1 of Art. 361 is not inconsistent with Art. 1735 of the NCC. Requisites for defense of natural disaster: 1. Art. 1739 -- natural disaster must have been the proximate and only cause of the loss 2. The CC must exercise due diligence to prevent or minimize the loss before, during and after the occurrence of flood, storm, or other natural disaster. If the CC does not exercise due diligence in minimizing the loss, he may yet be held liable notwithstanding the fact that the loss, destruction or deterioration of the goods arose out of natural disaster. 3. Art. 1740 -- the CC must not be in delay. If the CC incurs in delay, a natural disaster shall not free it from responsibility. Under Art. 1165 par. 3, if the obligor incurs delay, he shall be responsible for any fortuitous event until he has effected delivery. However, if between the delay or refusal of the CC to transport the goods and the loss of the goods due to an act of God there intervened the shipper's negligence, thus causing a break in the chain of causation between the act of God which caused their loss and the CC's fault, the act of God is the proximate cause of the loss and the carrier's delay or refusal to transport the goods, is merely the remote cause. In such cases, the shipper is not even entitled to set up the claim of contributory negligence. It is then necessary that it be established that the CC was guilty of a willful or negligent act and that between this willful or negligent act and the act of God, no negligence on the part of the shipper intervened. Accident due to defects of carrier not caso fortuito.-- Accidents caused either by defects in the carrier or through the negligence of the carrier is not caso fortuito. The passenger or shipper has every right to presume that the carrier is perfectly in good condition and could transport him safely and securely to his destination Tan Chiong v. Ynchausti. It is a proven fact that the loss or damage to the goods shipped on the said lorcha was due to the force majeure which caused the wreck of the said craft. Accdg. to Art. 361 of the Code of Commerce, merchandise shall be transported at the risk and venture of the shipper, unless the contrary be expressly stipulated. No such stipulation appears of record, therefore, all damages and impairment suffered by the goods in transportation, by reason of accident, force majeure, or by virtue of the nature or defect of the articles, are for the account and risk of the shipper. The carrier is exempt from liability if he is able to prove, as he did prove, that the loss or destruction of the merchandise was due to accident and force majeure and not to fraud, fault or negligence on the part of the captain or owner of the ship -- that the loss was a result of the stranding of Pilar because of the hurricane that overtook it. Martini v. Macondray. While Martini would have greatly preferred for the cargo to be carried under the hatches, they nevertheless consented for it to go on deck. Codina, an EE of Martini, if attentive to the interests of his company, must have known from the tenor of the guaranty which he signed that defendant had reserved the right to carry the cargo on deck. The bill of lading plainly showed that the cargo would be so carried. The plaintiff was duly notified as to the manner by which was the cargo was to be shipped. They only protested after the bill had been negotiated at the bank and even when there was time to stop the shipment, they failed to give the necessary instructions thereby manifesting acquiescence. Eastern Shipping v. IAC. Fire may not be considered a natural disaster or calamity. This must be so as it arises almost invariably from some act of man or by human means. It does not fall within the category of an act of God unless caused by lightning or by another natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier. Art. 1680 which considers fire as an extraordinary fortuitous event does not apply since it refers only to leases of rural lands where a reduction of rent is allowed when more than 1/2 of the fruits have been lost due to such event. As the peril of fire is not comprehended under Art. 1734, Art. 1735 applies and the CC shall be presumed to have been at fault or to have acted negligently, unless it proves extra-ordinary diligence. The burden is on the CC. Asia Lighterage v. CA, supra.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (b) Act of Public Enemy CC, 1734(2), supra. CC, 1739, supra. Acts of public enemy.-- This defense is not absolute. Under 1739, in order for the CC to be exempted from liability, (1) the act of the public enemy must have been the proximate and only cause; and (2) the CC must have exercised due diligence to prevent or minimize the loss before, during and after the act of the public enemy causing the loss, destruction or deterioration of the goods. (c) Act or omission of shipper CC, 1734(3), supra. CC, 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the proximate cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which however, shall be equitably reduced. Act or omission of the shipper.-- The act or omission of the shipper must be the proximate cause of the loss, destruction or deterioration of the goods. If the shipper merely contributed to the loss,etc. and the proximate cause is still the negligence of the CC, the CC shall still be liable for damages although the damages shall be equitably reduced. (d) Character of Goods, etc. CC, 1734(4), supra. CC,1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods, or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or lessen the loss. CComm, 366. Within the twenty-four hours following the receipt of the merchandise, the claim against the carrier for damage or average be found therein upon opening the packages, may be made, provided that the indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be admitted only at the time of receipt. After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. *Claims for damages must be made at the time the goods are delivered unless the indications of the damage cannot be ascertained from the exterior of the package, in which case such written claims must be made w/in 24 hours from delivery *Rule: As long as the damage to the goods was due purely to the inherent nature or defect of the goods or of the containers thereof, the CC cannot be held responsible. However, under 1742, the CC must exercise due diligence to forestall or lessen the loss for it to completely escape liability. Government v. Ynchausti. The defendant placed said stamp upon the bill of lading before the plaintiff shipped the tiles, and that having shipped the tiles under said bill, with the terms and conditions of carriage stamped thereon, the govt. must be deemed to have assented to said terms and conditions. The binding effect of the conditions stamped on the bill of lading did not proceed from the Collector of Customs, but from the actual contract which the parties made. Each bill of lading is a contract and the parties thereto are bound by its terms. Southern Lines v. CA. Under Art. 361 of the Code of Commerce, the carrier, in order to free itself from liability, was only obliged to prove that the damage suffered by the goods were by virtue of defects of the articles. Under Art. 362, the plaintiff in order to hold the carrier liable, was obliged to prove that the damage to the goods by virtue of their nature, occurred on account of the carrier's negligence or because the carrier did not take the precaution adopted by careful persons. (e) Order of competent authority Art. 1734(5), supra. CC, 1743. If through the order of public authority the goods are seized or destroyed, the common carrier is not responsible, provided said public authority had power to issue the order. Order or act of competent authority.-- Under 1743, the CC is not responsible for the loss, etc. of the goods if the public authority had power to issue the order. Where the officer acts without legal process, the CC will be held liable. Ganzon v. CA. Ganzon contended that the scrap iron had not been unconditionally placed under his custody and control to make him liable. However, he admitted that he received the scraps of iron which Tumambing delivered to him. By the said act of delivery, the scraps were unconditionally placed in the possession and control of the common carrier and upon their receipt by the carrier for transportation, the contract of carriage was deemed perfected. The carrier's extraordinary responsibility for the loss, destruction, or deterioration of the goods commenced. Duration of Extraordinary Responsibility CC, 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733. CC, 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738. CC, 1737. The common carrier's duty to observe extraordinary diligence over the goods remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of stoppage in transitu. CC, 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. When carrier's responsibility begins.-- Under Art. 1738, the extra-o responsibility of the CC begins from the time the goods are delivered to the carrier. The delivery to the CC must place the goods to be transported unconditionally in the possession of the CC and the CC must receive them. Otherwise, the extra-ordinary responsibility of the CC will not commence. When carrier's responsibility terminates.-- Under 1738, the extra-ordinary responsibility of the CC is terminated at the time the goods are delivered to the consignee or the person who has a right to receive them (actual or constructive delivery).
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Constructive delivery: Notice by the CC that the cargo had already arrived, placing them at the disposal of the shipper or consignee releases CC from extra-ordinary responsibility. From such moment the consignee or shipper should exercise over the cargo the ordinary control pertinent to ownership (should unload cargo from the CC) Shipper bound to observe all diligence in obtaining delivery of goods.-- The shipper is bound to observe all diligence in obtaining delivery of the goods. Once the goods are delivered, the extra-ordinary responsibility of the CC ceases. Liability of shipper for delay in obtaining delivery of goods, demurrage.-- The shipper is liable for lost earnings occasioned by the unnecessary delay in the use of the vehicles belonging to the carrier, due in turn to the failure of the former, upon receipt of notice of the arrival of the goods at the place of destination, to unload forthwith and take away the cargo from the vehicles. This is a charge for demurrage (addtl. service provided by CC) Effect of storing in transit.-- Under 1737, the temporary unloading or storage of the goods during the time that they are being transported does not interrupt the extra-ordinary responsibility of the CC Exception: Where the shipper or owner exercises its right of stoppage in transitu (the act by which the unpaid vendor of goods stops their progress and resumes possession of them, while they are in the course of transit from him to the purchaser, and not yet actually delivered to the latter. This is exercised when the buyer is or becomes insolvent.) Responsibility of carrier when right exercised.-- The extra-ordinary responsibility of the CC ceases when the goods being transported are temporarily unloaded or stored in transit be reason of the exercise of the right of stoppage in transitu by the unpaid seller. The CC holds the goods in the capacity of an ordinary bailee or warehouseman upon the theory that the exercise of the right of stoppage in transitu terminates the contract of carriage (ordinary diligence is required) Effect of storage in warehouse of carrier.-- Under 1738, the extra-ordinary responsibility of the CC does not cease notwithstanding the fact that the goods being transported are stored in the warehouse of the CC at the place of destination. Extra-ordinary responsibility ceases only after the consignee has been advised of the arrival of the goods and has had reasonable opportunity to remove them or otherwise dispose of them. Liability as a warehouseman (ordinary diligence) arises only when the consignee has been advised of the arrival of the goods and has had reasonable opportunity to remove them or otherwise dispose of them Cia Maritima v. Insurance Co. The receipt of the goods by the carrier has been said to lie at the foundation of the contract to carry and deliver, and if no goods are received there can be no such contract. The liability and responsibility of the carrier under a contract for the carriage of goods commence on their actual delivery to, or receipt by the carrier or an authorized agent, of the goods. The test as to whether the relation of shipper and carrier had been established is: Had the control and possession of the goods been completely surrendered by the shipper to the CC. Whenever the control and possession of goods passes to the carrier and nothing remains to be done by the shipper, then it can be said with certainty that the relation of shipper and carrier has been established. Lu Do v. Binamira. The general rule is that CC's responsibility to observe extra-ordinary diligence lasts from the time the goods are placed in the possession of the carrier until they are delivered to the consignee. BUT this rule applies only when the loss, destruction and deterioration of the goods takes place while the goods are in the possession of the carrier and not after it has lost control of them. While the goods are in its possession, it is but fair that it exercise extra-ordinary diligence in protecting them from damage and if loss occurs, the law presumes that it was due to its fault or negligence. APL v. Klepper. APL does not question the finding that the damage was due its negligence but contends that its liability cannot exceed $500 based on the bill of lading and Sec 4(5) of the COGSA. Regardless of its negligence, the carrier's liability would attach because being a CC, its responsibility is extra-ordinary and lasts from the time the goods are placed in its possession until they are delivered, actually or constructively, to the consignee or to the person who has a right to receive them. Eastern Shipping v. CA. The common carrier's duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until delivered to, or until the lapse of a reasonable time for their acceptance by, the person entitled to receive them Agreement Limiting Liability (a) As to diligence required CC, 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be: (1) In writing, signed by the shipper or owner; (2) Supported by a valuable consideration other than the service rendered by the common carrier; and (3) Reasonable, just and not contrary to public policy. CC, 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy: (1) That the goods are transported at the risk of the owner or shipper; (2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods; (3) That the common carrier need not observe any diligence in the custody of the goods; (4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary prudence in the vigilance over the movables transported; (5) That the common carrier shall not be responsible for the acts or omission of his or its employees; (6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished; (7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage. CC, 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in consonance with public policy. (b) As to amount of liability
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CC, 1749. A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. CC, 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon. Heacock v. Macondray. Three kinds of stipulations have often been made in a bill of lading. First, one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. Second, one providing for an unqualified limitation of such liability to an agree valuation. Third, one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. The first and second stipulations are invalid as contrary to public policy. The third is valid and enforceable. || A stipulation in the bill of lading limiting the liability of the CC to a specified amount unless the shipper declares a higher value and pays a higher freight is valid and enforceable. If a CC gives to a shipper the choice of 2 rates, the lower of them conditioned upon his agreeing to a stipulated valuation of his property in case of loss, even by the carrier's negligence, if the shipper makes the choice understandingly and freely, and names his valuation, he cannot thereafter recover more than the value which he thus places upon his property. Shewaram v. PAL. Two requisites must be fulfilled in order that the liability of PAL be limited according to the stipulations behind the ticket stub : (1) the contract is just and reasonable under the circumstances; and (2) it has been fairly and freely agreed upon. (Art. 1750) || The fact that the conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that plaintiff was aware of those conditions such that he had "fairly and freely agreed" to those conditions. PAL has admitted that passengers do not sign the ticket. Also the carrier cannot limit his liability for injury or loss of goods shipped when such injury or loss was caused by its own negligence. Ong Yiu v. CA. While the passenger had not signed the plane ticket, he is nevertheless bound by the provision thereof; such provisions have been held to be part of the contract of carriage and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation. It is what is known as a contract of adhesion wherein one party imposes a ready made form of contract on the other; it is not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. A contract limiting liability upon an agree valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. Pan Am v. IAC. Pan Am cited Ong Yiu vs CA. Such case is squarely applicable in this case. The ruling in Shewaram vs PAL is inapplicable since it was premised on the fact that the conditions printed at the back of the ticket were so small and hard to read Cathay Pacific v. CA. While the mere failure of CATHAY to deliver respondent's luggage at the agreed place and time did not ipso facto amount to willful misconduct since the luggage was eventually delivered to private respondent, albeit belatedly, We are persuaded that the employees of CATHAY acted in bad faith the language and conduct of petitioner's representative towards respondent Alcantara was discourteous or arbitrary to justify the grant of moral damages. The CATHAY representative was not only indifferent and impatient; he was also rude and insulting. Factor affecting arrangement CC, 1746. An agreement limiting the common carrier's liability may be annulled by the shipper or owner if the common carrier refused to carry the goods unless the former agreed to such stipulation. CC, 1747. If the common carrier, without just cause, delays the transportation of the goods or changes the stipulated or usual route, the contract limiting the common carrier's liability cannot be availed of in case of the loss, destruction, or deterioration of the goods. CC, 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid. CC, 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration on the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in consonance with public policy. CC, 1752. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration. Kinds of stipulation limiting liability.-- The following stipulations are often made in a bill of lading bill of lading: 1. stipulation exempting the CC from any and all liability for loss or damage occasioned by its own negligence VOID 2. stipulation providing for an unqualified limitation of such liability to an agreed stipulation VOID 3. stipulation limiting the liability of the CC to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight -- VALID and ENFORCEABLE When stipulation limiting liability valid.-- Under 1744, the shipper or owner and the CC may stipulate to limit the liability of the CC for the loss, destruction or deterioration of goods to a degree less than extra-ordinary diligence: 1. the stipulation must be in writing and signed by both parties; 2. the stipulation must be supported by valuable consideration other than the service rendered by the CC; 3. the stipulation must be reasonable, just and not contrary to public policy. This applies only when the CC is acting as such but not when it acts as a private carrier [in Home Insurance vs American Steamship Co., the SC held that the Civil Code provisions on CC should not be applied where the CC is not acting as such but as a private carrier; such policy has no force where the public at large is not involved] The parties may stipulate that the diligence to be exercised by the CC be less than extra-ordinary diligence, provided that the requirements under Article 1744 are complied with. However, the parties cannot reduce the diligence to less than that of a good father of a family. Art. 1745 provides for 7 stipulations which shall be considered unreasonable, unjust and contrary to public policy. Construction of stipulations limiting common carrier's liability.-- An exemption in general words not expressly relating to negligence, even though the words are wide enough to include loss by negligence or default of CC's servants, must be construed as limiting the liability of the CC as assurer, and not as relieving him from the duty of exercising reasonable skill and care Effect of lack of competitor to common carrier.-- Under 1751, the lack of competition of the CC shall be considered in determining WON a stipulation limiting CC's liability is reasonable, just and in consonance with public policy. Examples of valid stipulations:
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines 1. 1748 - an agreement limiting the CC's liability for delay on account of strikes or riots 2. 1749, Heacock vs Macondray - a stipulation that the CC's liability is limited to the value of the goods appearing in bill of lading unless the shipper or owner declares a greater value 3. 1750 - a contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon Under 1746, an agreement limiting the CC's liability may be annulled by the shipper or owner if the CC refused to carry the goods unless the former agreed to such stipulation. The effect of the shipper's consent obtained by means of refusal on the part of the carrier to carry the goods is to make the agreement limiting the CC's liability voidable at the instance of the shipper Principles : [St. Paul Insurance vs Macondray, 70 SCRA 122] 1. A stipulation in the bill of lading limiting the CC's liability to the value of the goods appearing in the bill, unless the shipper or owner declares a greater value, is valid and binding. 2. The insurer who pays the insured on his claim for damage is merely subrogated to the rights of the insured; therefore, said insurer cannot collect from the CC more than what the insured can collect from the CC. 3. The obligation to pay the damage begins from the date it fails to deliver the shipment in good condition to the consignee (on the basis of the rate of exchange on that date). Effect of delay in transportation, etc.-- Under 1747, the CC cannot avail of the contract limiting his liability in these cases : (1) where the CC delays the transportation of the goods; (2) where the CC changes the stipulated or usual route [in both cases, the delay or change of route must be without just cause] Presumption as to negligence in case of limited liability.-- Under 1752, the presumption continues even when there is an agreement limiting the liability of the CC in the vigilance of the goods. This presumption is disputable or rebuttable by evidence that the CC exercised extra-ordinary diligence. 5. Applicable Law in Foreign Trade CC, 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration. The Civil Code governs the liability of the CC in case of loss, damage or deterioration. Under 1766, in all matters not regulated by the Civil Code, the rights and obligations of CC shall be governed by the Code of Commerce and by special laws which are suppletory to the provisions of the Civil Code Rules on Passenger Baggage CC, 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 employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable. CC, 1998. The deposit of effects made by the travellers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. CC, 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him. CC, 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through an irresistible force. CC, 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel. CC, 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in articles 1998 to 2001 is suppressed or diminished shall be void. Classes of baggage of passengers.-- The law makes a distinction between (1) baggage in the custody of the passengers or their EEs; and (2) baggage not in such custody but in that of the CC. Liability for baggage in custody of passenger.-- Art. 1754 refers to Arts. 1998, 2000- 2003 concerning the responsibility of hotel keepers. Under 1998, the baggage of passengers in their personal custody or in that of their EEs while being transported shall be regarded as necessary deposits. The CC shall be responsible for such baggage as depositaries, provided that (1) notice was given to them or to their EEs, of the baggage brought by their passengers, and that (2) the passengers take the precautions which said CCs advised relative to the care and vigilance of their baggage. Responsibility for acts of EEs, thieves.-- Under 2000, a CC is responsible as a depositary for the loss of or injury to the baggage in the personal custody of passengers, caused by the CC's servants or EEs but not those caused by force majeure. Under 2001, the act of a thief or robber, who has entered the CC's vehicle is not deemed force majeure, unless it is done with the use of arms or through irresistible force. Under 2002, the CC is not liable if the loss of the baggage in the personal custody of the passenger is due to the acts of the passengers, his family, servants or visitors, OR if the loss arises from the character of the baggage. Stipulations limiting liability.-- Under 2003, a CC cannot free himself from responsibility by posting notices to the effect that he is not liable for the baggage brought by the passengers. Any stipulation diminishing the responsibility required under 1998 to 2001 shall be void.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Liability for baggage not in custody of passenger.-- This refers to baggage delivered to the custody of the CC and received by him, to be carried in the same manner as other goods being transported by him. As the CC has custody of such baggage and are carried like any other goods, the provisions on carriage of goods shall apply (extra-ordinary diligence in the vigilance over the goods). The moment the effects of a passenger are unconditionally placed in the possession of and received by a carrier for conveyance, the law immediately imposes on the CC extra-ordinary responsibility for the loss thereof which lasts until the actual or constructive delivery of the effects to the passenger as the person who has the right to receive them (presumption of negligence exists but may be rebutted by proof of exercise of extraordinary diligence or causes under 1734). A CC is liable for the loss of baggage although not declared and the charges not paid, if it accepted them for transportation Common Carriage of Passengers 1. Nature and extent of responsibility CC, 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756. CC, 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Common carriers must exercise extraordinary diligence in carrying passengers.-- Art. 1755 shows clearly the high degree of care and extra-o diligence required of a CC with respect to its passengers. Carrier's duty of extraordinary diligence extends also to crew members.-- The duty to exercise the utmost diligence on the part of CCs is for the safety of passengers as well as for the members of the crew or the complement operating the carrier. This must be so for any omission, lapse or neglect thereof will certainly result to the damage, prejudice, injuries or even death to all aboard the plane. Isaac v. AL Ammen. If the carrier's EE is confronted with a sudden emergency, he is not held to the same degree of care he would otherwise be required in the absence of such emergency. || By placing his left arm on the window, the passenger is guilty of contributory negligence, and although contributory negligence cannot relieve the carrier but can only reduce his liability (Art. 1762), this is a circumstance which militates against plaintiff's position. It is negligence per se for passengers to protrude any part of his body and that no recovery can be had for an injury. Landingin v. Pantranco. Accidents caused by defects in the automobile are not caso fortuito. The rationale is that the passenger has neither the choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. || When the passenger dies or is injured, the presumption is that the CC is at fault or acted negligently. This is only rebutted by proof on the carrier's part that it observed extraordinary diligence required in Art. 1733 and the utmost diligence of very cautious persons required in Art. 1755. Landicho v. BTCo. It is true that defendant being a CC is bound to transport its passengers from the point of origin to the place of destination, but the duty does not encompass all the risks attendant to a passenger in transit, for then the co. would be a good source of stipend for a family who would like to end it all by simply boarding, paying the fare and intentionally falling off. It is enough for the CC's EEs to see to it that the passenger places himself safely inside the vehicle, that it is operated carefully and that its mechanism is perfectly alright to prevent mishaps. It would be unreasonable to exact upon operators to determine beforehand whether a passenger is likely to fall dizzy or sleepy on the way, for that is the lookout of the passenger himself. A passenger must see to it that he seats himself in a safe portion of the vehicle. Necesito v. Paras. The rationale of CC's liability for manufacturing defects is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the eqpt. and appliances in use by the carrier. Having no privity whatever with the manufacturer or vendor of the defective eqpt, the passenger has no remedy against him. In this case, the defect could have been detected with the exercise of utmost diligence by the CC. PAL v. CA. there is imputation of gross negligence by respondent court to PAL for having allowed Capt. Delfin Bustamante to fly on that fateful day of the accident Sulpicio v. CA. ALC had a contract of carriage with petitioner. The presence of the stevedores sent by ALC on board the barge of petitioner was called for by the contract of carriage. For how else would its lumber be transported unless it is placed on board? And by whom? Of course, the stevedores. Definitely, petitioner could not expect the shipper itself to load the lumber without the aid of the stevedores. Furthermore, petitioner knew of the presence and role of the stevedores in its barge and thus consented to their presence. Hence, petitioner was responsible for their safety while on board the barge. Japan Airlines v. CA. Under Article 1755 of the Civil Code, a common carrier such as JAL is bound to carry its passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances. When an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger has every right to expect that he be transported on that flight and on that date and it becomes the carriers obligation to carry him and his luggage safely to the agreed destination. If the passenger is not so transported or if in the process of transporting he dies or is injured, the carrier may be held liable for a breach of contract of carriage. We find that JAL did not breach its contract of carriage with respondents. It may be true that JAL has the duty to inspect whether its passengers have the necessary travel documents, however, such duty does not extend to checking the veracity of every entry in these documents. JAL could not vouch for the authenticity of a passport and the correctness of the entries therein. The power to admit or not an alien into the country is a sovereign act which cannot be interfered with even by JAL. This is not within the ambit of the contract of carriage entered into by JAL and herein respondents. As such, JAL should not be faulted for the denial of respondents shore pass applications. Duration of responsibility When relationship of carrier and passenger terminates.-- The relation of CC and passenger does not cease at the moment that the passenger alights from the CC's vehicle at a place selected by the CC at the point of destination, but continues until the passenger had reasonable time or a reasonable opportunity to leave the CC's premises. What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances cf. CC, 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Warsaw Convention, 17. The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. CComm, 698. In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the fare in proportion to the distance covered, without right to recover for losses and damages if the interruption is due to fortuitous event or to force majeure, but with a right to indemnity if the interruption should have been caused be the captain exclusively. If the interruption should be caused by the disability of the vessel and a passenger should agree to await the repairs, he may not be required to pay any increased price of passage, but his living expenses during the stay shall be for his own account. In case of delay in the departure of the vessel, the passengers have the right to remain on board and to be furnished with food for the account of the vessel unless the delay is due to fortuitous events or to force majeure. If the delay should exceed 10 days, passengers requesting the same shall be entitled to the return of the fare; and if it is due exclusively to the fault of the captain or ship agent, they may also demand indemnity for losses and damages. A vessel exclusively devoted to the transportation of passengers must take them directly to the port or ports of destination, no matter what the number of passengers may be, making all the stops indicated in its itinerary. Cangco v. MRR, supra. Del Prado v. Meralco. Although the motorman of this car was not bound to stop to let the plaintiff on, it was his duty to do act that would have the effect of increasing the plaintiff's peril while he was attempting to board the car. The premature acceleration of the car was, in our opinion, a breach of this duty. || The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and in failure on the part of the carrier to use due care in carrying its passengers safely is a breach of duty (culpa contructual) under articles 1101, 1103 and 1104 of the Civil Code. Furthermore, the duty that the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom. La Mallorca v. CA. Whether or not the relation between carrier and passenger does not cease at the moment the passenger alights from the carrier's premises is to be determined from the circumstances. In this case, there was no utmost diligence. The driver stopped the bus but did not turn off the engine. He started to run the bus even before the conductor gave him the signal. The presence of passengers near the bus was not unreasonable and the duration of the responsibility still exists. Bataclan v. Medina. The proximate cause of the death was the overturning of the vehicle which was followed by the negligence of the driver and the conductor who were on the road walking back and forth. They should have known that with the position of the bus, leakage was possible aside from the fact that gas when spilled can be smelled from a distance. The failure of the driver and conductor to have cautioned or taken steps to warn rescuers not to bring a lighted torch too near the bus constitutes negligence on the part of the agents of the carrier. Aboitiz v. CA. The relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock. Once created the relationship will not ordinarily terminate until the passenger has safely alighted from the carrier's conveyance or had reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers and what is reasonable time is to be determined from all circumstances and includes a reasonable time to see after his baggage and prepare for his departure. The CC-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if the person remains in the premises to claim his baggage. || The test is the existence of a reasonable cause as will justify the presence of the passenger near the vessel. PAL v. CA. PAL remissed in its duty of extending utmost care to private respondent while being stranded in Cotabato City. || PALs diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such occurrence did not terminate PALs contract with its passengers. Being in the business of air carriage and the sole one to operate in the country, PAL is deemed equipped to deal with situations as in the case at bar. The relation of carrier and passenger continues until the latter has been landed at the port of destination and has left the carriers premises. Hence, PAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have reached their final destination. PAL grossly failed considering the then ongoing battle between government forces and Muslim rebels in Cotabato City and the fact that the private respondent was a stranger to the place. || A contract to transport passengers is quite different in kind and degree from any other contractual relation. Because of the relation which an air carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Presumption of Negligence CC, 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. Presumption of negligence.-- CCs are presumed to have been at fault or to have acted negligently in case of death or injuries to passengers. This disputable presumption may only be overcome by superior evidence that he had observed extraordinary diligence prescribed in 1733, 1755, 1756 Where death or injury results to the passenger because of the negligence of the CC's Es, the CC is liable, notwithstanding the fact that he had exercised all the diligence of a good father of a family, in the selection and supervision of his EEs Xxx Consequently, in an action for damages, the issue is not WON the party seeking damages has adduced sufficient evidence to show the negligence of the CC but WON the carrier has presented the required quantum of proof to overcome the presumption that it has been at fault or that it acted negligently in the performance of its duty. In the exercise of extraordinary diligence, the CC must give due regard for all circumstances in connection with the transport of passengers How presumption of negligence overcome.-- To overcome such presumption, it must be shown that the CC had observed the required extraordinary diligence or that the accident was caused by fortuituos event. In order to constitute caso fortuito that would exempt a person from responsibility, it is necessary that: 1. The event must be independent of human will; 2. The occurrence must render it impossible for the obligor to fulfill his obligation in a normal manner; 3. The obligor must be free of a concurrent or contributory fault or negligence. [Estrada vs Consolacion, 71 SCRA 523]
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Carrier not precluded from proving negligence of other carrier involved in collision.-- While the plaintiff-passenger does not need to prove the negligence of the CC, he may not preclude the CC from proving the legal defense of negligence of the other vehicle involved in the collision (the CC may file a third-party complaint against the other vehicle for reimbursement) "Last clear chance" rule not applicable to contracts of carriage.-- The principle of last clear chance applies only in a suit between the owners and drivers of two colliding vehicles; it does not apply where a passenger demands responsibility from the CC to enforce its contractual obligation; it would be iniquitous to exempt the driver and his ER on the ground that the other driver was also negligent Court need not make express finding of carrier's fault or negligence.-- The court need not make an express finding of fault or negligence on the part of the CC in order to hold it responsible to pay the damages sought by the passenger. By the contract of carriage, the CC assumes the express obligation to observe extraordinary diligence in transporting the passenger This is an exception to general rule that negligence must be proved. Carriers not ordinarily liable for injuries to passengers due to fires or explosions caused by articles brought into conveyance by other passengers.-- CC is not ordinarily liable for injuries to passengers due to fires or explosions caused by articles brought into conveyance by other passengers. Fairness demands that in measuring the CC's duty towards its passengers, allowance should be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety (that the passenger will not take with him anything dangerous to his co-passengers.) For the carrier to be liable, he must be aware, through his EEs of the nature of the article or must have had some reason to anticipate danger therefrom (circumstances must show that there are causes for apprehension that the passenger's baggage is dangerous and that the CC fails to act in the fact of such evidence) [Nocum vs Laguna Bus Co., 1969] Force Majeure Bachelor Express v. CA. Bachelor Express as a CC is bound to carry its passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious person, with due regard for all the circumstances. In this case where passengers suffered injuries which caused their death, under 1756, the CC is presumed to have acted negligently unless it can prove that it had observed extraordinary diligence. The CC raised the defense of caso fortuito. Art. 1174 provides that no person shall be responsible for those events which could not be foreseen or which though foreseen were inevitable. In Lasam vs Smith, the SC held that a caso fortuito must have the following elements: (1) The cause of the unforeseen and unexpected occurrence must be independent of the human will; (2) It must be impossible to foresee the event; (3) The occurrence must be so as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) The obligor must be free from any participation in the aggravation of the injury resulting to the creditor. The running amuck of the passenger was the proximate cause of the incident and is within the context of force majeure. However, in order that a CC may be absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The CC must still prove that it was not negligent in causing the injuries resulting from such accident. It must prove that there was no negligence or lack of care and diligence on the part of the CC. Limitation of Liability; validity of stipulations CC, 1757. The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise. CC, 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is valid, but not for willful acts or gross negligence. The reduction of fare does not justify any limitation of the common carrier's liability. Ticket given to a passenger is a written contract.-- Ticket given to passenger is a written contract with the ff. elements: (1) the consent of the contracting parties manifested by the fact that the passenger boards the ship and the shipper consents or accepts him in the ship for transportation; (2) cause or consideration which is the fare paid by the passenger as stated in the ticket; (3) object, which is the transportation of the passenger from the place of departure to the place of destination which are stated in the ticket. Passenger bound notwithstanding his failure to sign ticket containing stipulation limiting liability.-- Even if the passenger failed to sign the ticket, he is nevertheless bound by the provisions thereof. Such provisions are part of the contract of carriage, regardless of the passenger's lack of knowledge or assent to the regulation. It is what is known as a contract of adhesion which is not entirely prohibited by law. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. Accordingly, where the CC incurred delay, it is liable only for the amount printed in the ticket the passenger not having declared a higher value for his luggage nor paid addtl. charges. Dispensing with or limiting liability.-- General rule: Under 1757, the extraordinary diligence required under 1733 and 1755 for the carriage of passengers cannot be dispensed with or lessened (1) by stipulation, (2) by the posting of notices, (3) by statements on tickets, or (4) otherwise What cannot be stipulated in a carriage of passengers: (1) absolutely exempting the CC from liability from the passenger's death or injuries; (2) lessening the extraordinary diligence required by law to the diligence of a good father of a family Exception: Effect of gratuitous carriage.-- Under 1758, the CC and the passenger may validly stipulate limiting the CC's liability for negligence where the passenger is carried gratuitously (but the parties cannot stipulate to entirely eliminate liability of CC) Effect of reduction of fares.-requires gratuitous passage. Under 1758 (2), the reduction of fare does not justify any limitation of the CC's liability -the law
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The law is much stricter with respect to carriage of passengers as compared with carriage of goods: a stipulation limiting the CC's liability in writing, signed by the parties, supported by sufficient consideration, not contrary to law will still be void where the passenger is not carried gratuitously.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Liability of owner of CC to accommodation passengers or invited guests.-- [Lara vs Valencia, 1958] an owner of an automobile owes a guest the duty to exercise ordinary or reasonable care to avoid injuring him; since one riding in an automobile is no less a guest because he asked for the privilege of doing so, the same obligation of care is imposed upon the driver and owner as in the case of one expressly invited to ride Responsibility for acts of employees CC, 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. CC, 1760. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or otherwise. Liability for negligence or willful acts of employees.-- Under 1759, CC are held liable for the death or injuries to passengers caused by the negligence or the willful acts of their EEs, although such EEs may have acted beyond the scope of their authority or in violation of the orders of the CC. The CC cannot escape liability by interposing the defense that its EEs have acted without any authority or against the orders of the CC The passenger is entitled to protection from personal violence by the CC or its agents or EEs since the contract of transportation obligates the CC to transport a passenger safely to his destination and a CC is responsible for the misconduct of its EEs Cardenas vs Fernando, 54 OG no. 4, p. 1043 (1957): (1) extraordinary diligence required of CC: calculated to protect the passengers as demanded by the preciousness of human life and by the consideration that every person must in every way be safeguarded against all injury; (2) liability for injury of passenger is based on a breach of contract of carriage for failure to bring the passenger safely to his destination Reason for making the CC liable for the misconduct of its EEs in their own interest.-- The servant is clothed with delegated authority and charged with the duty by the CC, to execute his undertaking to carry the passenger safely; when the EE mistreats the passenger, he violates the contractual obligation of the CC for which he represents the CC Liability of CC for defects of its equipment.-- A passenger is entitled to recover damages from a CC for an injury resulting from a defect in an appliance purchased from a manufacturer, whenever it appears that the defect would have been discovered by the CC if it had exercised the degree of care which under the circumstances was incumbent upon it, with regard to inspection and application of the necessary tests; for the purposes of this doctrine, the manufacturer is considered as being in law the agent or servant of the CC, as far as regards the work of constructing the appliance Common carrier is exempt from acts of EE not done in line of duty.-- The CC is exempt from liability where the EE was never in a position in which it became his duty to his ER to represent him in discharging any duty of the CC towards the passenger; the EE is deemed as a stranger or co-passenger since his act was not done in the line of duty Defense of diligence in selection, etc., of employees.-- CC cannot escape liability by interposing defense that he exercised due diligence in the selection and supervision of his EEs; his liability is based on culpa contractual When relationship of carrier and passenger terminates.-- The relation of CC and passenger does not cease at the moment that the passenger alights from the CC's vehicle at a place selected by the CC at the point of destination, but continues until the passenger had reasonable time or a reasonable opportunity to leave the CC's premises. What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances Elimination or limitation of carrier's liability.-- Under 1760, the CC's liability for the negligence or willful acts of his EEs which cause death of or injury to passengers cannot be eliminated or limited by (1) stipulation, (2) by the posting of notice, (3) by statements on the tickets, or (4) otherwise Bataclan v. Medina, supra. De Gillaco v. MRR. While a passenger is entitled to protection from personal violence by the CC or its agents or EEs, the responsibility of the CC extends only to those acts that the CC could foresee or avoid through the exercise of the degree of care and diligence required of it. The OCC did not impose upon CC the absolute liability for assaults of their EEs upon the passengers. || The act of the guard was entirely unforeseeable by MRR which had no means to ascertain or anticipate that the two would meet nor could it foresee every personal rancor that might exist between its EEs and its passengers. The shooting was a caso fortuito, both being unforeseeable and inevitable under the circumstances. Maranan v. Perez. The NCC unlike the OCC makes the CC absolutely liable for intentional assaults committed by its EEs upon its passengers (Art. 1754). The CC's liability is based on either (1) respondeat superior or (2) the CC's implied duty to transport the passenger safely. Under respondeat superior (w/c is the minority view), the CC is liable only when the act of the EE is within the scope of his authority and duty. Under the second view, the CC is liable as long as the assault occurs within the course of the performance of the EE's duty. It is no defense that the act was done in excess of authority or in disobedience of the CC's orders. The CC's liability is absolute in the sense that it practically secures the passengers from assaults committed by its own EEs. Three cogent reasons underlie this rule : (1) the special undertaking of the CC requires that it furnish the passengers the full measure of protection afforded by the exercise of the high degree of care prescribed in the law, from violence and insults in the hands of strangers, other passengers, and from its own servants charged with the passenger's safety; (2) liability is based on the CC's confiding in the servant's hands the performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with utmost care prescribed by law; (3) as between the CC and the passenger, the CC must bear the risk of wrongful acts or negligence of the CC's EEs against passengers since it has the power to select and remove them. LRTA v. Navidad, supra. Responsibility for acts of strangers and co-passengers
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CC, 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. The CC is responsible for such willful acts or negligence of other passengers or of strangers, provided that the CC's EEs could have prevented or stopped the act or omission through the exercise of ordinary diligence. If the injury could not have been avoided by the exercise of ordinary diligence on the part of the EEs of the CC, the CC is not liable Notice that the law speaks of injuries suffered by the passenger but not his death. However, there appears to be no reason why the common carrier should not be held liable under such circumstances. The word "injuries" should be interpreted to include "death." Pilapil v. CA. The law does not make the CC an insurer of the absolute safety of its passengers. Art. 1755 qualifies the duty of the CC in exercising vigilance to only such as human care and foresight can provide. The presumption created by law against the CC is rebuttable by proof that the CC had exercised extraordinary diligence in the performance of its obligations and that the injuries suffered were caused by fortuitous events. The liability of the CC necessarily rests upon its negligence, or its failure to exercise the degree of diligence required by law. Bachelor Express v. CA, supra. Duty of passenger; effect of contributory negligence CC, 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself. CC, 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced. Law does not protect negligence of passenger.-- Law does not protect negligence of passenger to the extent of doing harm or damage upon a public utility Diligence required of passenger.-- Diligence of a good father of a family to avoid injury to himself. Effect of negligence of passenger.-- Where the proximate cause of the death of or injury to the passenger is his own negligence, and not that of the CC, the CC is exempted from liability Effect of passenger's contributory negligence.-- Contributory negligence on the part of the passenger does not justify the CC's exemption from liability. Where it is not the proximate cause of the death or injury, he or his heirs are not barred from recovery of damages, provided of course that the CC is the proximate cause of his death or injury Cangco v. MRR, supra. Isaac v. AL Ammen, supra. Damages Recoverable from Common Carriers 1. In General 2. Actual or compensatory CC, 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages. CC, 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. CC, 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. CC, 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. CC, 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death; (2) If the deceased was obliged to give support according to the provisions of Article 291, the recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate succession, may demand support from the person causing the death, for a period not exceeding five years, the exact duration to be fixed by the court; (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Cariaga v. BLTBCo and MRR. The evidence shows that Ed C. had been rendered physically and mentally invalid by the accident. He suffered head injuries specifically a fractured right forehead necessitating the removal of all the right frontal lobe of his brain, which reduced his intelligence by 50% so that he can no longer finish his medical course. In addition, he has to lead a quiet and retired life because if the tantalum plate which replaced a portion of his skull is pressed in or dented, it would cause his death. || LTBC admitted that under Art. 2201, it is liable for damages that are the natural and probable consequences of the breach and which the parties had foreseen or could have reasonably foreseen at the time the obligation was constituted. It however claims that the said provision contemplates only the medical, hospital, and other expenses in the total sum of P 17,719.75. The SC ruled that the income which Ed could earn if he should finish the medical course, and pass the corresponding board exams must be deemed included because they could have reasonably been foreseen by the parties at the time he boarded the bus.||While his scholastic record may not be first rate, it is sufficient to justify the assumption that he could have finished his course and would have passed the board exams in due time. As regards the income that he could possibly earn as a doctor, P 300 (accdg. to LTBC witness, Dr. Doria) could easily be expected as minimum monthly income of Ed C. had he finished his studies. Compensatory damages should be increased to P 25,000. Pan Am v. IAC, supra.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Villa-Rey v. CA. The determination of damages due is dependent on 2 factors : (1) on the no. of years on the basis of which damages shall be computed (life expectancy); and (2) rate at which the losses sustained should be fixed. life expectancy accdg. to the American Expectancy Table of Mortality; and since Quintos was around 30 years old at the time of his death : 2/3 x [80 - 30] = 33 1/3 years. PAL v. CA. Under Arts. 1764 and Article 2206 (1), the award of damages for death is computed on the basis of the life expectancy of the deceased and not of the beneficiary. In this case, the lower courts determined the deceased gross annual income to be P 23,100 less P 9,200 as living expenses, resulting in a net income of P 13,900. The lower court allowed the deceased a life expectancy of 30 years. Multiplying his annual net income by his life expectancy of 30 years, the product is P 417,000, which is the death indemnity due to his mother and only forced heir. Victory Liner v. Gammad. However, the fact of loss having been established, temperate damages in the amount of P500,000.00 should be awarded to respondents. Under Article 2224 of the Civil Code, temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. Moral CC, 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act for omission. CC, 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages, may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case. CC, 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral damages. The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in the order named. CC, 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. CC, 2206(3). The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition: (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Fores v. Miranda. Art. 1764 makes it all the more evident that where the injured passenger does not die, moral damages are not recoverable unless it is proved that the CC was guilty of malice or bad faith. In the case at bar, there is no other evidence of such malice to support an award of moral damages. Air France v. Carrascoso. CC's contract with Carrascoso is attended with public duty. The expulsion of Carrascoso is a violation of a public duty by the CC -- a case of quasi-delict. Damages are proper. The manner of ejectment of Carrascoso fits into the legal precept for awarding exemplary damages in addition to moral damages. Lopez v. Pan Am. In so misleading the plaintiffs into purchasing first class tickets in conviction that they had confirmed reservations when in fact they had none, defendant willfully and knowingly placed itself into position of having breached its contract with plaintiffs. || Such actions of the defendant may indeed have been prompted by nothing more than the promotion of its self-interest in holding on to plaintiffs as passengers and foreclosing on their chances to seek the service of other airlines that may have been able to afford to them first class accommodations. All the same, in legal contemplation, such conduct already amounts to action in BF. For bad faith means a breach of a known duty through some motive of interest of ill will. It may not be humiliating to travel as tourist passengers, but it is humiliating to be compelled to travel as such, contrary to what is rightfully to be expected from the contractual undertaking. Ortigas v. Lufthansa. It is our considered view that when it comes to contracts of common carriage, inattention and lack of care on the part of the CC resulting in the failure of the passenger to be accommodated in the class contracted for amounts to bad faith or fraud which entitles the passenger to an award of moral damages in accordance with Art. 2220. In this case, the breach appears to be of graver nature, since the preference given to the Belgian passenger over plaintiff was done willfully and in wanton disregard of plaintiff's rights and his dignity as a human being and as a Filipino, who may not be discriminated against with impunity. PAL v. Miano. In breach of contract of carriage by air, moral damages are awarded only if the defendant acted fraudulently or in bad faith. 6 Bad faith means a breach of a known duty through same motive of interest or ill will. The trial court erred in awarding moral damages to private respondent. The established facts evince that petitioner's late delivery of the baggage for eleven (11) days was not motivated by ill will or bad faith. In fact, it immediately coordinated with its Central Baggage Services to trace private respondent's suitcase and succeeded in finding it. Cathay Pacific v. Vasquez. The choice imposes a clear obligation on Cathay to transport the passengers in the class chosen by them. The carrier cannot, without exposing itself to liability, force a passenger to involuntarily change his choice. The upgrading of the Vazquezes accommodation over and above their vehement objections was due to the overbooking of the Business Class. United Airlines v. CA. For the plaintiff to be entitled to an award of moral damages arising from a breach of contract of carriage, the carrier must have acted with fraud or bad faith. Exemplary CC, 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CC, 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. CC, 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated. Mecenas v. CA. There is no question that the defendants are negligent. As found by the CFI, DJ steered to the right while TC continued its course to the left. There can be no excuse for them not to realize that with such maneuvers, they will collide. They executed maneuvers inadequately and too late, to avoid collision. The question is WON the defendants were recklessly or grossly negligent. The SC ruled in the affirmative. || In discussing the rule of exemplary damages in law, the SC looks to it as an instrument to serve the ends of law and public policy by reshaping socially deleterious behaviors, specifically, in the case, to compel CC to control their EEs, to tame their reckless instincts, and to force them to take adequate care of human beings and their property. Nominal, Temperate and Liquidated CC, 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. CC, 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided with certainty. CC, 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. Alitalia v. IAC. She is not entitled to be compensated for loss or damage to her luggage since they were ultimately delivered to her. She is however entitled to nominal damages, which is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered. Saludo v. CA. Arts. 2221 and 2222 of the Civil Code makes it clear that nominal damages are not intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded. They are recoverable where some injury has been done but the amount of which the evidence fails to show, the assessment of damages being left to the discretion of the court accdg. to the circumstances of the case. Nominal damages of P 40,000 to be paid by TWA was awarded in favor of petitioners as a reasonable amount in the circumstances Japan Airlines v. CA. We are not oblivious to the fact that the cancellation of JAL flights to Manila from June 15 to June 21, 1991 caused considerable disruption in passenger booking and reservation. In fact, it would be unreasonable to expect, considering NAIAs closure, that JAL flight operations would be normal on the days affected. Nevertheless, this does not excuse JAL from its obligation to make the necessary arrangements to transport private respondents on its first available flight to Manila. After all, it had a contract to transport private respondents from the United States to Manila as their final destination. || Consequently, the award of nominal damages is in order. Nominal damages are adjudicated in order that a right of a plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized and not for the purpose of indemnifying any loss suffered by him. The court may award nominal damages in every obligation arising from any source enumerated in Article 1157, or in every case where any property right has been invaded. Savellano v. Northwest. When, as a result of engine malfunction, a commercial airline is unable to ferry its passengers on the original contracted route, it nonetheless has the duty of fulfilling its responsibility of carrying them to their contracted destination on the most convenient route possible. Failing in this, it cannot just unilaterally shuttle them, without their consent, to other routes or stopping places outside of the contracted sectors. However, moral damages cannot be awarded without proof of the carrier's bad faith, ill will, malice or wanton conduct. Neither will actual damages be granted in the absence of convincing and timely proof of loss. But nominal damages may be allowed under the circumstances in the case herein. Attorneys Fees and Interest CC, 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded; (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; (3) In criminal cases of malicious prosecution against the plaintiff; (4) In case of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim; (6) In actions for legal support; (7) In actions for the recovery of wages of household helpers, laborers and skilled workers; (8) In actions for indemnity under workmen's compensation and employer's liability laws; (9) In a separate civil action to recover civil liability arising from a crime; (10) When at least double judicial costs are awarded; (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. In all cases, the attorney's fees and expenses of litigation must be reasonable. CC, 2210. Interest may, in the discretion of the court, be allowed upon damages awarded for breach of contract. Damages arising from death; factors to be considered 1. number of years on the basis of which the damages shall be computed 2. the rate at which the losses sustained should be fixed. In the determination of the losses or damages sustained by dependents and heirs of the deceased, said damages consist not of the full amount of his earnings, but of the support they received or would have received from him had he not died in consequence of the negligence of defendant. In fixing the amount of support, only net earnings are to be considered-- total earnings less expenses necessary in the creation of such earnings less living and incidental expenses Damages recoverable when death occurs due to commission of crime.-- (1) indemnity for the death of victim (P 50T); (2) indemnity for loss of earning capacity of the deceased; (3) moral damages; (4) exemplary damages; (5) attorney's fees and expenses of litigation; and (6) interest. Indemnity arising from the fact of death is fixed whereas the others are still subject to the determination of the court based on evidence presented; indemnity for death is distinct and separate from the other forms of indemnity Common carrier not liable for moral damages to passenger injured due to negligence of driver.-- A CC's bad faith is not to be lightly inferred from a mere finding that the contract was breached through negligence of the CC's employees (Fores vs Miranda)
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Extent of liability of air carrier for death of passenger: (1) where there was no satisfactory explanation on the part of PAL as to how and why the accident occurred, the presumption is that it was at fault, under Art. 1756 (2) liability for lost earnings are the deceased passenger's net earnings during his expected length of life based on accepted mortality tables (compensatory damages) (3) PAL is not liable for exemplary damages where it was not proven that it acted in a wanton, fraudulent, reckless, oppressive or malevolent manner [Davila vs PAL] Damages caused by CC on third persons.-- Negligence refers to the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justify demand, whereby such other person suffers injury Common carrier is liable only for damages that are natural and probable consequence of breach of contract.-- Where the CC is guilty of a breach of contract, but acted in GF, it is liable only for the natural and probable consequences of the breach and which the parties had foreseen or could have reasonably foreseen at the time the obligation was constituted (includes medical, hospital expenses) Actual damages.-- (1) lost income.-- includes income to be earned by the injured passenger or deceased passenger had he finished his course (could have been foreseen) (2) sum being carried by the deceased passenger which was lost (3) funeral expenses (4) attorney's fees (5) loss of merchandise carried by the deceased (6) loss of baggage and personal belongings Exception to rule that CC is not liable for moral damages in breach of contract: (1) where the mishap results in death of the passenger (2) where it is proved that the CC was guilty of fraud or BF, even if death does not result Ex. where because of the BF of the CC, the passenger suffered social humiliation, wounded feelings, serious anxiety and mental anguish Code of commerce provisions on Overland Transportation A. Scope of Overland Transportation B. Nature of Contract CComm, 349. A contract of transportation by land or water ways of any kind shall be considered commercial: 1. When it has for its object merchandise or any article of commerce. 2. When, whatever its object may be, the carrier is a merchant or is habitually engaged in transportation for the public. Requisites for a contract of transportation by land or water to be commercial: (1) transportation of merchandise is always commercial (2) transportation of person or news is commercial only when the CC is a merchant or is habitually engaged in transportation for the public *principal requirement: the CC is a merchant or is habitually engaged in transportation for the public; the object carried is of little importance A contract of air transportation may be regarded as commercial since it is analogous to land and water transportation. The reason for its noninclusion in the Code of Commerce was that at the time of its promulgation, air transportation on a commercial basis was not yet known. Effect of Civil Code CC, 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. CC, 2270. The following laws and regulations are hereby repealed: (1) Those parts and provisions of the Civil Code of 1889 which are in force on the date when this new Civil Code becomes effective: (2) The provisions of the Code of Commerce governing sales, partnership, agency, loan, deposit and guaranty; (3) The provisions of the Code of Civil Procedure on prescription as far as inconsistent with this Code; and (4) All laws, Acts, parts of Acts, rules of court, executive orders, and administrative regulations which are inconsistent with this Code. There is now no distinction between a transportation contract of a CC under the Civil Code and a transportation contract under the Code of Commerce The New Civil Code does not expressly repeal the provisions of the Code of Commerce on overland transportation; it makes such provisions suppletory to the provisions of the Civil Code on CCs. Contract of Carriage 1. Bill of Lading (a) Definition, subject matter CComm, 352. The bills of lading, or tickets in cases of transportation of passengers, may be diverse, some for persons and others for baggage; but all of them shall bear the name of the carrier, the date of shipment, the points of departure and arrival, the cost, and, with respect to the baggage, the number and weight of the packages, with such other manifestations which may be considered necessary for their easy identification. A bill of lading may defined as a written acknowledgment of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his order. It comprehends all methods of transportation. Nature : (1) each bill is a contract in itself and the parties are bound by its terms; (2) a bill of lading is also a receipt; (3) it is also a symbol of the goods covered by it A bill of lading is also a document of title. A document of title is any document used in the ordinary course of business in the sale or transfer of goods, as proof of the possession or control of goods, or authorizing or purporting to authorize the possessor of the document to transfer or receive, either by indorsement or by delivery, goods represented by such document. (b) Form, contents
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CComm, 350. The shipper as well as the carrier of merchandise or goods may mutually demand that a bill of lading be made, stating: 1. The name, surname and residence of the shipper. 2. The name, surname and residence of the carrier. 3. The name, surname and residence of the person to whom or to whose order the goods are to be sent or whether they are to be delivered to the bearer of said bill. 4. The description of the goods, with a statement of their kind, of their weight, and of the external marks or signs of the packages in which they are contained. 5. The cost of transportation. 6. The date on which shipment is made. 7. The place of delivery to the carrier. 8. The place and the time at which delivery to the consignee shall be made. 9. The indemnity to be paid by the carrier in case of delay, if there should be any agreement on this matter. CComm, 351. In transportation made by railroads or other enterprises subject to regulation rate and time schedules, it shall be sufficient for the bills of lading or the declaration of shipment furnished by the shipper to refer, with respect to the cost, time and special conditions of the carriage, to the schedules and regulations the application of which he requests; and if the shipper does not determine the schedule, the carrier must apply the rate of those which appear to be the lowest, with the conditions inherent thereto, always including a statement or reference to in the bill of lading which he delivers to the shipper. Many of the items required in a bill of lading may be omitted with much advantage to commerce, which aims to have the greatest number of transactions in the last possible time especially in cases where there are tariffs or regulations issued by the carrier company. In this case, the circumstances relative to price, term and conditions of carriage may be omitted and simple reference be made to the tariff and regulations under which the transportation is to be made. (Art. 351) The form of the bill of lading is not material : if it contains an acknowledgment by the carrier of the receipt of goods for transportation, it is in legal effect, a bill of lading A ticket issued by a carrier to a passenger is not only a receipt for the fare paid but is the contract between the passenger and the carrier, of the passenger's right to ride in the CC's vehicle Classes of bills of lading: 1. negotiable B/L - where it is stated that the goods will be delivered to the bearer, or to the order of any person named in such document 2. non-negotiable B/L - where the goods are to be delivered to a specified person 3. clean B/L - does not indicate any defect in the goods 4. foul B/L - indicates that the goods covered by it are in bad condition 5. spent B/L - covers goods that have already been delivered by the CC without a surrender of a signed copy of the B/L; the subsequent delivery of the spent B/L cannot give to the buyer of it any actual control of the goods, or anything which can fairly be called delivery 6. through B/L - issued by the CC who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer, which B/L is honored by the subsequent interested carriers who do not issue their own ladings 7. on board B/L - states that the goods have been received on board the vessels which is to carry the goods 8. received for shipment B/L - states that the goods have been received for shipment with or w/o specifying the vessel by which the goods are to be shipped; issued when conditions are not normal and there is an insufficiency of shipping space 9. custody B/L - issued by the CC to whom the goods have been delivered for shipment but the steamer indicated in the B/L which is to carry the goods has not yet reached the port where the goods are held for shipment 10. port B/L - issued by the CC to whom the goods have been delivered and the steamer indicated in the B/L by which the goods are to be shipped is already in the port where the goods are held for shipment Negotiation of Bills by delivery/ by indorsement Effect of fraud, accident on validity of negotiation: not impaired where the person to whom the bill was negotiated paid value thereof in GF without notice of the breach of duty or loss, theft, fraud, accident, mistake, duress or conversion Who may negotiate? owner; any person to whom possession or custody of the bill has been entrusted by the owner Rights acquired: 1. such title to the goods as the person negotiating the bill had or had ability to convey to a buyer in good faith for value 2. direct obligation of the CC issuing the bill to hold possession of the goods for him according to the terms of the B/L as fully as if such CC contracted directly with him Transfer of non-negotiable B/L; rights acquired: 1. as against the transferor, title to the goods subject to the terms of any agreement with the transferor 2. right to notify the CC who issued the bill and thereby acquire the direct obligations of such CC to hold possession of the goods for him accdg to the terms of the document; prior to notification of the CC, the title of the transferee may be defeated by levy upon the goods or a subsequent purchaser from the transferor of a subsequent sale of the goods by a transferor Function CComm, 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of lading, by the contents of which the disputes which may arise regarding their execution and performance shall be decided, no exceptions being admissible other than those of falsity and material error in the drafting. After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, unless in the same act the claim which the parties may wish to reserve be reduced to writing, with the exception of that provided for in Article 366.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt producing the same effects as the return of the bill of lading. B/L constitutes the legal evidence of the contract of transportation --> all disputes between the parties regarding the execution and performance of the contract shall be decided by the contents of the B/L issued by the CC --> the law admits no exceptions other than falsity and material error in the drafting of the B/L Parol evidence rule applies 2. Refusal to Transport CComm, 356. Carriers may refuse packages which appear unfit for transportation; and if the carriage is to be made by railway, and the shipment is insisted upon, the company shall transport them, being exempt from all responsibility if its objections, is made to appear in the bill of lading. CC cannot ordinarily refuse to carry a particular class of goods to the prejudice of the traffic in those goods exception : when the goods or packages are unfit for transportation if transpo is insisted upon, railroads cannot refuse to carry them, but they shall be exempt from all responsibility if their objections are made to appear in the B/L 3. Doubtful declaration of contents CComm, 357. f by reason of well-founded suspicion of falsity in the declaration as to the contents of a package the carrier should decide to examine it, he shall proceed with his investigation in the presence of witnesses, with the shipper or consignee in attendance. If the shipper or consignee who has to be cited does not attend, the examination shall be made before a notary, who shall prepare a memorandum of the result of the investigation, for such purposes as may be proper. If the declaration of the shipper should be true, the expense occasioned by the examination and that of carefully repacking the packages shall be for the account of the carrier and in a contrary case for the account of the shipper. If the CC has a well-founded suspicion of falsity in the declaration as to the contents of a package, he may examine it --> he must follow the procedure under 357 4. No Bill of Lading CComm, 354. In the absence of a bill of lading, disputes shall be determined by the legal proofs which the parties may present in support of their respective claims, according to the general provisions established in this Code for commercial contracts. CComm, 351, supra. Bill not essential to contract : While under 350, the shipper and the CC may mutually demand that a B/L is made, it is not obligatory. The fact that a B/L is not issued does not preclude the existence of a contract of transpo. Provided there is a meeting of the minds and from such meeting arise rights and obligations, there should be no limitations as to form. The B/L is not essential to the contract, although it may become obligatory by reason of the regulations of companies or as a condition imposed in the contract by agreement of the parties themselves Where no B/L is issued, the disputes between the parties shall be decided accdg. to the rules laid down in Art. 354 Responsibility of the Carrier 1. When it commences CComm, 355. The responsibility of the carrier shall commence from the moment he receives the merchandise, personally or through a person charged for the purpose, at the place indicated for receiving them. The responsibility of the CC commences from the moment he receives the merchandise --> the delivery must be made to him personally or through his duly authorized agent, and at the place indicated for receiving the merchandise 2. Route CComm, 359. If there is an agreement between the shipper and the carrier as to the road over which the conveyance is to be made, the carrier may not change the route, unless it be by reason of force majeure; and should he do so without this cause, he shall be liable for all the losses which the goods he transports may suffer from any other cause, beside paying the sum which may have been stipulated for such case. When on account of said cause of force majeure, the carrier had to take another route which produced an increase in transportation charges, he shall be reimbursed for such increase upon formal proof thereof. Where there is an agreed route, the CC shall be liable for losses due not only to the change of route but also to other causes, together with the indemnity agreed upon --> the CC may not avail of the contract limiting his liability in case of unjustified change of route Where there is no agreed route, the carrier must select one which may be the shortest, least expensive and practically passable 3. Care of Goods CComm, 361. The merchandise shall be transported at the risk and venture of the shipper, if the contrary has not been expressly stipulated. As a consequence, all the losses and deteriorations which the goods may suffer during the transportation by reason of fortuitous event, force majeure, or the inherent nature and defect of the goods, shall be for the account and risk of the shipper. Proof of these accidents is incumbent upon the carrier. When goods are delivered on board a ship in good order and condition, and the shipper-owner delivers them to the shipper in bad order and condition, it then devolves upon the shipowner to both allege and prove that the goods were damaged by reason of some fact which legally exempts him from liability The shipper will suffer losses and deteriorations arising from fortuitous event, force majeure, or inherent nature and defects of the goods (at the risk and venture of the shipper) It does not mean that the CC is free from liability for losses and deterioration arising from his negligence or fault, which is presumed Relate this with Art. 1734 and 1735 of the Civil Code CComm, 362. Nevertheless, the carrier shall be liable for the losses and damages resulting from the causes mentioned in the preceding article if it is proved, as against him, that they arose through his negligence or by reason of his having failed to take the precautions which usage has established among careful persons, unless the shipper has committed fraud in the bill of lading, representing the goods to be of a kind or quality different from what they really were. If, notwithstanding the precautions referred to in this article, the goods transported run the risk of being lost, on account of their nature or by reason of unavoidable accident, there being no time for their owners to dispose of them, the carrier may proceed to sell them, placing them for this purpose at the disposal of the judicial authority or of the officials designated by special provisions. CC, 1734, supra. CC, 1735, supra.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Burden of proof: the CC has the burden of proving that the injury was occasioned by one of the excepted causes The shipper then has the burden to prove that although the injury may have been occasioned by one of the excepted causes, yet still the CC is responsible if the injury might have been avoided by the exercise of reasonable skill and attention on his part Art. 362 is in consonance with Art. 1735, NCC --> except that under 1732, proof of extra-o diligence is required and not just ordinary diligence as implied under 362 Where goods run risk of loss due to their nature, Art. 362 provides for the remedy of sale by the CC of the goods, placing them for the purpose at the disposal of the judicial authority or of the officials designated by special provisions Delivery (a) Condition of Goods CComm, 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be obliged to deliver the goods shipped in the same condition in which, according to the bill of lading, they were found at the time they were received, without any damage or impairment, and failing to do so, to pay the value which those not delivered may have at the point and at the time at which their delivery should have been made. If those not delivered form part of the goods transported, the consignee may refuse to receive the latter, when he proves that he cannot make use of them independently of the others. Duty to deliver goods: duty to deliver the goods in the same condition in which accdg. to the B/L they were found at the time they were received, without damage or impairment --> otherwise, the CC is liable for damages Partial delivery: The consignee may refuse to receive the goods delivered, if he can prove that he cannot make use of them independently of those not delivered --> true solution depends upon the economic use which the goods transported have (consignee cannot be arbitrary and must justify his determination) Estoppel of shipper by laches : neglect or delay of shipper to demand immediately, or within a reasonable time, the return of the merchandise shipped or its value in case of non-delivery constitutes estoppel by laches Places the CC at a disadvantageous position to show that it had fulfilled what it had undertaken; makes it difficult for the CC to prove delivery CComm, 364. If the effect of the damage referred to in Article 361 is merely a diminution in the value of the goods, the obligation of the carrier shall be reduced to the payment of the amount which, in the judgment of experts, constitutes such difference in value. Where all the goods are delivered but damage is to such an extent that their value is diminished, the obligation of the CC shall be reduced to the payment of the amount which, in the judgment of experts, constitute such difference in value --> subject of course to other damages under the NCC CComm, 365. If, in consequence of the damage, the goods are rendered useless for sale and consumption for the purposes for which they are properly destined, the consignee shall not be bound to receive them, and he may have them in the hands of the carrier, demanding of the latter their value at the current price on that day. If among the damaged goods there should be some pieces in good condition and without any defect, the foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those which are sound, this segregation to be made by distinct and separate pieces and without dividing a single object, unless the consignee proves the impossibility of conveniently making use of them in this form. The same rule shall be applied to merchandise in bales or packages, separating those parcels which appear sound. Where damage renders the goods useless for sale and consumption for the purposes for which they are properly destined: 1. if the damage affects all goods, the consignee may abandon all the goods to the CC who shall pay the corresponding damages; 2. if the damage affects only some of the goods, the consignee may abandon only the damaged goods but if the consignee can prove that it is impossible to conveniently use the undamaged goods in that form, without the damaged goods, the law authorizes the consignee to abandon all the goods CComm, 366. Within the twenty-four hours following the receipt of the merchandise, the claim against the carrier for damage or average be found therein upon opening the packages, may be made, provided that the indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be admitted only at the time of receipt. After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. In case of damaged goods, the damage may either be (1) ascertainable only by opening of the packages, or (2) ascertainable from the outside part of the package In Case 1, the claim against the CC for damages must be made within 24 hours following the receipt of the merchandise In Case 2, the claim must be made at the time of receipt The claim must be made before the payment of transportation charges ** otherwise, no action for damages may be maintained against the CC When period begins to run: period begins to run when the consignee received possession of the goods such that he may exercise over it the ordinary control pertinent to ownership There must be delivery of the merchandise by the CC to the consignee at the place of destination --> Art. 366 applies only to cases of claims for damage to goods actually turned over by the CC and received by the consignee The conditions under Art. 366 are not limitation of action but are conditions precedent to a cause of action --> if the shipper or consignee fails to allege and prove the conditions under 366, he shall have no right of action against the CC The CC may require in the B/L that the goods be examined at the time of delivery thereof --> the CC may likewise waive such right Art. 366 is modified by a B/L prescribing a longer period for filing of written claim with the CC or its agent The unilateral action of a CC in stamping a condition in the notice of arrival, requiring examination of bad order cargo by the ship's agent before removal from port authorities as condition precedent to an action for recovery cannot modify or add conditions to the B/L unreasonable and unfair in that it allows CC to avoid responsibility for the loss of or damage to their cargo when in packages or covered The purpose of short period for claiming damages: to afford the CC a reasonable opportunity and facilities to check the validity of the claims while the acts are still fresh in the minds of the person who took part in the transaction and the documents are still available. The consignee may file a provisional claim: it is not necessary that such claim should state a detailed list of the loss or damage; they only have to contain descriptions of the shipments in question sufficient to have allowed the CC to make reasonable verifications of such claim
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines the determination of the specific amount of damages claimed should be done carefully and without haste and these can be done only in a formal claim which will be filed after the provisional claim This stipulation is in the nature of a limitation upon the owner's right to recovery the burden of proof is on the CC to show that the limitation was reasonable and in proper form or within the time stated (see Southern Lines vs CA) A stipulation in the B/L providing for a shorter period than the statutory period within which to bring action for breach is valid --> does not in any way defeat the right to recover but merely requires that said right be asserted by action at an earlier period (filing of claims is different from filing of suits) CComm, 367. If doubts and disputes should arise between the consignee and the carrier with respect to the condition of the goods transported at the time their delivery to the former is made, the goods shall be examined by experts appointed by the parties, and, in case of disagreement, by a third one appointed by the judicial authority, the results to be reduced to writing; and if the interested parties should not agree with the expert opinion and they do not settle their differences, the merchandise shall be deposited in a safe warehouse by order of the judicial authority, and they shall exercise their rights in the manner that may be proper. If doubts and disputes should arise between the consignee and the CC with respect to the condition of the goods transported at the time of the delivery, Art. 367 shall govern --> expert opinion on the matter is not conclusive on the parties (b) To Whom Delivery Made CComm, 368. The carrier must deliver to the consignee, without any delay or obstruction, the goods which he may have received, by the mere fact of being named in the bill of lading to receive them; and if he does not do so, he shall be liable for the damages which may be caused thereby. The delivery must be made to the consignee Where the B/L is issued to the order of the shipper, the CC is under a duty not to deliver the merchandise except upon presentation of the B/L duly indorsed by the shipper, and where the CC delivered the goods to another person who did not present the B/L, such CC is liable for misdelivery duty to transport the goods safely and to deliver them to the person indicated in the B/L Misdelivery: Delivery to a person different from that indicated in the B/L --> different from non-delivery In case of conflicting orders of the shipper and the consignee (where one orders the return and the other orders the delivery of the goods), there is no other recourse than to determine at what moment the right of the shipper to countermand the shipment terminates this moment can be no other than the time when the consignee or legitimate holder of the B/L appears with such B/L before the CC and makes himself a party to the contract (prior to that time, he is a stranger to the contract) (c) Judicial Deposit CComm, 369. If the consignee cannot be found at the residence indicated in the bill of lading, or if he refuses to pay the transportation charges and expenses, or if he refuses to receive the goods, the municipal judge, where there is none of the first instance, shall provide for their deposit at the disposal of the shipper, this deposit producing all the effects of delivery without prejudice to third parties with a better right. Judicial deposit as a remedy: 1. where the consignee cannot be found at the residence indicated 2. where the consignee refused to pay the transportation charges 3. where the consignee refuses to receive the goods Judicial deposit shall produce all the effects of delivery subject to third persons with better rights Duty to look for consignee : if consignee is not present, he is entitled to reasonable notice from the CC of their arrival and a fair opportunity to take care of and remove them: if the consignee is unknown to the CC, the latter must use proper and reasonable diligence to find him, and if the consignee still cannot be found, the goods may be stored in a proper place and the CC will have performed his whole duty and shall be discharged from liability as a CC Failure to look for consignee and to give him reasonable notice shall make the CC liable for damages resulting from the delay in the receipt of the goods by the consignee --> apply 1738 on the liability of the CC even when the goods are deposited in its warehouse until after the consignee has been given reasonable notice and opportunity to remove the goods CC, 1752. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration. (d) When to be made CComm, 370. If a period has been fixed for the delivery of the goods, it must be made within such time, and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither the shipper nor the consignee being entitled to anything else. If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier shall be liable for the damages which the delay may have caused. CComm, 358. If there is no period fixed for the delivery of the goods the carrier shall be bound to forward them in the first shipment of the same or similar goods which he may make point where he must deliver them; and should he not do so, the damages caused by the delay should be for his account. Where period fixed for delivery : the CC must deliver the goods within the time fixed for failure to do so, the CC shall pay indemnity stipulated in the B/L, neither the shipper nor the consignee being entitled to anything else however, under the CC, damages shall be paid if the carrier refuses to pay the stipulated indemnity or is guilty of fraud in the fulfillment of his obligation (Art. 1126,NCC) If no indemnity has been stipulated and the delay exceeds the time fixed in the B/L, the CC shall be liable for the damages that the delay may have caused, e.g. the difference between the MV of the goods at the time when they should have been delivered, and the price at the time when they were delivered to which may be added reasonable expenses caused by delay A CC in GF may be held liable only for damages that were foreseen or might have been foreseen at the time the contract of transpo was entered into before a CC could be held liable for special damages, such as loss of profits on account of the delay or failure of deliver, he must have notice at the time of the delivery of the particular circumstances attending the shipment and which would probably lead to such special loss if he defaulted (Mendoza vs PAL) If the CC incurs in delay in transporting the goods, a natural disaster shall not free such carrier from responsibility; where the CC without cause delays the transportation of the goods, the contract limiting the CC's liability cannot be availed of in case of the loss, destruction or deterioration of the goods
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Where property in the hands of a CC is not delivered within a reasonable time after it has reached its destination, the CC in the absence of any legal exemption and after demand has been made and delivery refused, is liable for a conversion of the property the consignee may waive title to the property and sue for conversion and is entitled to the value of the goods at the time they should have been delivered to him subsequent tender of the goods by the CC is not available as a defense If there has been demand and the CC tenders the goods, the consignee cannot refuse to receive the goods and sue for conversion; his sole remedy is an action for damages on account of the delay there can only be conversion if there has been demand and the CC refuses delivery The time for delivery when no period fixed: the CC shall be bound to forward them in the first shipment of the same or similar goods which he makes to the point where he must deliver them should he not do so, the damages caused by the delay shall be for his account Art. 358 is not violated when though the goods were not shipped on the train agreed upon, they were shipped on another train which arrived earlier than the one agreed upon (e) Two or more carriers CComm, 373. The carrier who makes the delivery of the merchandise to the consignee by virtue of combined agreements or services with other carriers shall assume the obligations of those who preceded him in the conveyance, reserving his right to proceed against the latter if he was not the party directly responsible for the fault which gave rise to the claim of the shipper or consignee. The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded him in the conveyance. The shipper and the consignee shall have an immediate right of action against the carrier who executed the transportation contract, or against the other carriers who may have received the goods transported without reservation. However, the reservation made by the latter shall not relieve them from the responsibilities which they may have incurred by their own acts. (f) Obligation to keep registry CComm, 378. Agents for transportation shall be obliged to keep a special registry, with the formalities required by Article 36, in which all the goods the transportation of which is undertaken shall be entered in consecutive order of number and dates, with a statement of the circumstances required in Article 350 and others following for the respective bills of lading. (g) Compliance with administrative regulations CComm, 377. The carrier shall be liable for all the consequences which may arise from his failure to comply with the formalities prescribed by the laws and regulations of the public administration, during the whole course of the trip and upon arrival at the point of destination, except when his failure arises from having been led into error by falsehood on the part of the shipper in the declaration of the merchandise. If the carrier has acted by virtue of a formal order of the shipper or consignee of the merchandise, both shall become responsible. The CC is exempted from responsibility where his failure to comply arises from having been led into error by the falsehood on the part of the shipper in the declaration of the merchandise The shipper or consignee may become liable for noncompliance with govt. rules and regulations, when the CC has acted by virtue of a formal order of the shipper or consignee but the CC continues to be liable Rights and Obligations of Shipper and/or Consignee 1. Right to damages (a) Condition imposed on right CComm, 366. Within the twenty-four hours following the receipt of the merchandise, the claim against the carrier for damage or average be found therein upon opening the packages, may be made, provided that the indications of the damage or average which gives rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be admitted only at the time of receipt. After the periods mentioned have elapsed, or the transportation charges have been paid, no claim shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. CComm, 357. If by reason of well-founded suspicion of falsity in the declaration as to the contents of a package the carrier should decide to examine it, he shall proceed with his investigation in the presence of witnesses, with the shipper or consignee in attendance. If the shipper or consignee who has to be cited does not attend, the examination shall be made before a notary, who shall prepare a memorandum of the result of the investigation, for such purposes as may be proper. If the declaration of the shipper should be true, the expense occasioned by the examination and that of carefully repacking the packages shall be for the account of the carrier and in a contrary case for the account of the shipper. Effect of return of the B/L or giving of the receipt: The respective obligations and actions of the parties against each other shall be considered canceled, except where in the same act of return or giving of a receipt the claims of the parties be reduced to writing subject to the provisions of Art. 366 (b) Amount of damages for loss CComm, 372. The value of the goods which the carrier must pay in cases if loss or misplacement shall be determined in accordance with that declared in the bill of lading, the shipper not being allowed to present proof that among the goods declared therein there were articles of greater value and money. Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation shall be especially bound in favor of the shipper, although with respect to railroads said liability shall be subordinated to the provisions of the laws of concession with respect to the property, and to what this Code established as to the manner and form of effecting seizures and attachments against said companies. The value of the goods stated in the B/L is conclusive between the parties and the shipper is not allowed to prove a higher value It is only when the CC's fault is so gross as to amount to actual fraud, that the actual amount of the losses and damages suffered may be proved by the shipper against the carrier Par. 2 especially binds the horses, vehicles, vessels and eqpt. and all other principal and accessory means of the CC in favor of the shipper --> this lien is a security for the payment of the value of the goods which the CC must pay in case of loss or misplacement CC, 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be: (1) In writing, signed by the shipper or owner;
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (2) Supported by a valuable consideration other than the service rendered by the common carrier; and (3) Reasonable, just and not contrary to public policy. (c) Amount of damages for delay CComm, 371. In case of delay through the fault of the carrier, referred to in the preceding articles, the consignee may leave the goods transported in the hands of the former, advising him thereof in writing before their arrival at the point of destination. When this abandonment takes place, the carrier shall pay the full value of the goods as if they had been lost or mislaid. If the abandonment is not made, the indemnification for losses and damages by reason of the delay cannot exceed the current price which the goods transported would have had on the day and at the place in which they should have been delivered; this same rule is to be observed in all other cases in which this indemnity may be due. Damages for delay (par. 3) : Provided there is no express agreement as to indemnity in the B/L and there is no fraud on the part of the CC, and the goods have a known current price at the place and on the day they should have been delivered, the damages shall not exceed such value --> subject to Civil Code provisions on damages in case of delay 2. Right to abandon CComm, 371, supra. CComm, 360. The shipper, without changing the place where the delivery is to be made, may change the consignment of the goods which he delivered to the carrier, provided that at the time of ordering the change of consignee the bill of lading signed by the carrier, if one has been issued, be returned to him, in exchange for another wherein the novation of the contract appears. The expenses which this change of consignment occasions shall be for the account of the shipper. CComm, 365. If, in consequence of the damage, the goods are rendered useless for sale and consumption for the purposes for which they are properly destined, the consignee shall not be bound to receive them, and he may have them in the hands of the carrier, demanding of the latter their value at the current price on that day. If among the damaged goods there should be some pieces in good condition and without any defect, the foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those which are sound, this segregation to be made by distinct and separate pieces and without dividing a single object, unless the consignee proves the impossibility of conveniently making use of them in this form. The same rule shall be applied to merchandise in bales or packages, separating those parcels which appear sound. CComm, 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be obliged to deliver the goods shipped in the same condition in which, according to the bill of lading, they were found at the time they were received, without any damage or impairment, and failing to do so, to pay the value which those not delivered may have at the point and at the time at which their delivery should have been made. If those not delivered form part of the goods transported, the consignee may refuse to receive the latter, when he proves that he cannot make use of them independently of the others. Right of abandonment: Exceptional but limited right The right must be exercised during the intervening period between the moment when the fault of the CC produces a delay, which is the generative cause of the action, until the moment just before the arrival of the goods at the place of delivery, by communicating such abandonment to the CC in writing Where these conditions do not concur, the refusal to accept cannot be effective Damages for abandonment: Art. 371 (2) subject to Civil Code Cases where consignee may abandon goods : 1. Art. 363, in case of partial non-delivery where the consignee proves that he cannot make use of the goods capable of delivery independently of those not delivered 2. Art. 365, where the goods are rendered useless for sale and consumption for the purposes for which they are properly destined 3. Art. 371, where there is delay through the fault of the carrier 3. Right to change consignment CComm, 360, supra. 4. Obligation to pay transportation charges CComm, 376. The preference of the carrier to the payment of what is owed him for the transportation and expenses of the goods delivered to the consignee shall not be cut off by the bankruptcy of the latter, provided it is claimed within the eight days mentioned in the preceding article. CC, 2241(9). With reference to specific movable property of the debtor, the following claims or liens shall be preferred: (9) Credits for transportation, upon the goods carried, for the price of the contract and incidental expenses, until their delivery and for thirty days thereafter; 5. Obligation to return bill of lading CComm, 353(2). After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, unless in the same act the claim which the parties may wish to reserve be reduced to writing, with the exception of that provided for in Article 366. G. Applicability of Provisions CComm, 379. The provisions contained in Articles 349 and following shall be understood as equally applicable to those who, although they do not personally effect the transportation of the merchandise, contract to do so through others, either as contractors for a particular and definite operation, or as agents for transportations and conveyances. In either case they shall be subrogated in the place of the carriers themselves, with respect to the obligations and responsibility of the latter, as well as with regard to their rights. Admiralty and Maritime Commerce A. Concept of admiralty; Jurisdiction over Admiralty Cases BP129, as amended by RA 7691, Sec. 19(3). Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction: (3) In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds One hundred thousand pesos (P100,000.00) or , in Metro Manila, where such demand or claim exceeds Two hundred thousand pesos (200,000.00); BP129, as amended by RA 7691, Sec. 33(1). Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in civil cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: (1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines personal property, estate, or amount of the demand does not exceed One hundred thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00) exclusive of interest damages of whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be specifically alleged: Provided, That where there are several claims or causes of action between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions; International Harvester v. Aragon. It is clear from the complaint that IH is being held liable only on the assumption that the goods had been lost in transit or before being discharged at the pier. The liability of IH is predicated on the contract of carriage by sea between IH and Yaras & Co. as evidenced by the B/L, independently of the liability of the Manila Terminal Co. as operator of an arrastre service. || Admiralty has jurisdiction over all maritime contracts, in whatever form, wherever they were executed or are to be performed, but not over non-maritime contracts. Whether or not a contract is maritime depends not on the place where the contract is made and is to be executed, making the locality the test, but on the subject matter of the contract, making the true criterion a maritime service or a maritime transaction. Vessels 1. Meaning Lopez v. Duruelo. The vessels intended in the Third Book of the Code of Commerce which deals with maritime commerce and in which Art. 865 is found was evidently intended to define the law relative to merchant vessels and marine shipping, and the vessels intended in that Book are such as are run by masters having special training with the elaborate apparatus of crew and equipment indicated in the Code. The word "vessel" used in the section was not intended to include all ships, craft, or floating structures of every kind without limitation, and the provision of that section should not be held to include minor craft engaged only in river or bay traffic. Vessels of minor nature, such as river boats and those carrying passengers from ship to shore are governed as to their liability in passengers, by the Civil Code. || The word ship and vessel, in their grammatical sense are applied to designate every kind of craft, large or small, merchant or war, a signification which does not differ essentially from its juridical meaning according to which vessels for the purpose of the Code of Commerce, are considered not only those engaged in navigation whether coastwise or high seas, but also floating docks, pontoons, dredges, scows, and other floating apparatus for the service of the industry or maritime commerce. 2. Nature and acquisition CComm, 573. Merchant vessels constitute property which may be acquired and transferred by any of the means recognized by law. The acquisition of a vessel must appear in a written instrument, which shall not produce any effect with respect to third persons if not inscribed in the registry of vessels. The ownership of a vessel shall likewise be acquired by possession in good faith, continued for three years, with a just title duly recorded. In the absence of any of these requisites, continuous possession for ten years shall be necessary in order to acquire ownership. A captain may not acquire by prescription the vessel of which he is in command. Vessels: Those engaged in navigation , whether coastwise or on the high seas, including floating docks, pontoons, dredges, scows and any other floating apparatus destined for the services of the industry or maritime commerce Vessels engaged in the business of carrying or transporting passengers or goods for compensation, offering their services to the public are common carriers governed primarily by the Civil Code provisions on common carriers and subsidiarily by the Code of Commerce and special laws The Code of Commerce regulates merchant ships or those engaged in the transportation of passengers and freight from one port to another or from place to another The Code of Commerce does not refer to pleasure ships, yachts, pontoons, health service and harbor police vessels, floating storehouses, warships or patrol vessels, coast guard vessels, fishing vessels, towboats and other craft destined to other uses, such as coast and geodetic survey, scientific research and exploration, crafts engaged in the loading and the discharge of vessels, or transhipments from one vessel to another Vessels of a minor nature not engaged in maritime commerce, such as, river boats and those carrying passengers from ship to shore, must be governed as to their liability to passengers, by the provisions of the Civil Code Modes of acquisition: (1) purchase and sale, (2) prescription, (3) construction, (4) capture, (5) donation, (6) succession, and (7) other means, such as barter Possession in GF will ripen into ownership in 3 years; if the possession is otherwise, it will ripen into ownership in 10 years There can be no prescription in favor of the captain because the nature of the possession of the captain is such that he is only an agent of the owner, a depositary of the vessel The acquisition of a vessel must appear in a written instrument and such instrument must be registered in order that the transfer may affect third persons CComm, 583. If while on a voyage the captain should find it necessary to contract one or more of the obligations mentioned in subdivisions 8 and 9 of Article 580, he shall apply to the judge or court if he is in Philippine territory, and otherwise to the consul of the Republic of the Philippines, should there be one, and, in his absence, to the judge or court or proper local authority, presenting the certificate of the registration sheet treated of in Article 612 and the instruments proving the obligation contracted. The judge or court, the consul, or the local authority, as the case may be, in view of the result of the proceedings instituted, shall make a temporary memorandum of their result in the certificate, in order that it may be recorded in the registry when the vessel returns to the port of its registry, or so that it can be admitted as a legal and preferred obligation in case of sale before its return, by reason of the sale of the vessel on account of a declaration of unseaworthiness. The omission of this formality shall make the captain personally liable for the credits prejudiced on his account. CC, 712. Ownership is acquired by occupation and by intellectual creation. Ownership and other real rights over property are acquired and transmitted by law, by donation, by estate and intestate succession, and in consequence of certain contracts, by tradition. They may also be acquired by means of prescription. 3. Registration; certificates issued; distinctions RA 9295 Sec10(1). Jurisdiction; Power; and Duties of MARINA. - The MARINA shall have the power and authority to: (1)Register vessels Certificates of Philippine register: upon registration of a vessel of domestic ownership and of more than 15 tons gross, a certificate of Phil. register shall be issued for it The purpose of certificates of register of vessels: to declare the nationality of a vessel engaged in trade with foreign nations and to enable her to assert that nationality wherever found
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Privileges of certificate: It confers upon the vessel the right to engage, consistently with law, in the Philippines coastwise trade and entitles it to the protection of the authorities and the flag of the Philippines in all ports and on the high seas, and at the same time secures to it the same privileges and subjects it to the same disabilities as, under the laws of the Philippines, pertain to foreign built vessels transferred abroad to citizens of the Philippines Certificates of ownership: upon registration of a vessel of more than 5 tons gross, a certificate of ownership shall be issued for it 4. Significance of registration of transactions affecting vessels Presumption of ownership from registration: the presumption is that the person in whose name a vessel is registered has legal title thereto but such is not conclusive proof against the real owners It is essential that a record of documents affecting the title of a vessel be entered in the Philippine Coast Guard Arroyo v. Yu. Sec. 1171 of AC has modified the provisions of the Chattel Mortgage Law, particularly Sec. 4 thereof. It is now not necessary for a chattel mortgage of a vessel to be noted in the register of deeds. But it is essential that a record of documents affecting the title of a vessel be entered in the office of the collector of customs at a port of entry. This is designed to protect persons who deal with a vessel on the strength of the record title. Mortgages on vessels., although not recorded, are good as between the parties. But as against creditors of the mortgagor, an unrecorded mortgage is valid. Rubiso v. Rivera. The requisite of registration in the registry of the purchase of a vessel is necessary and indispensable in order that the purchaser's rights may be maintained against a claim filed by a third person. Such registration is required both Art. 573 of the Code of Commerce in connection with Sec 2 of Act No. 1900 which Act amended said article. The amendments solely consisted in charging the Insular Collector of Customs, as at present, with the fulfillment of the duties of the commercial register concerning the registering of vessels, so that the registration of a bill of sale of a vessel shall be made in the Insular Collector of Customs, who, since May 18, 1909, has been performing the duties of the commercial registry in place of this latter official. In view of said legal provisions, it is undeniable that defendant's rights cannot prevail over those acquired by plaintiff in the ownership of said boat, in as much as defendant's registration came after plaintiff's registration. Persons Participating in Maritime Commerce 1. Shipowners and shipagents CComm, 586. The shipowner and the ship agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair, equip, and provision the vessel, provided the creditor proves that the amount claimed was invested for the benefit of the same. By ship agent is understood the person entrusted with provisioning or representing the vessel in the port in which it may be found. CComm, 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight it may have earned during the voyage. CComm, 588. Neither the shipowner nor the ship agent shall be liable for the obligations contracted by the captain, if the latter exceeds the powers and privileges pertaining to him by reason of his position or conferred upon him by the former. Nevertheless, if the amounts claimed were invested for the benefit of the vessel, the responsibility therefor shall devolve upon its owner or agent. Liability of shipowner and shipagent: (1) under Art. 857, for the acts of the captain (2) for contracts entered into by the captain to repair, equip and provision the vessel, provided that the amount claimed was invested for the benefit of the vessel (3) for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods transported, as well as for the safety of passengers transported (4) for damages to third persons for tort or quasi-delict committed by the captain, except collision with another vessel (5) under Art. 826, for damages in case of collision due to the fault, negligence, or want of skill of the captain, sailing mate, or any other member of the complement The agent is liable to the shippers and owners of the cargo transported by it, for losses and damages occasioned to such cargo without prejudice to his rights against the owner of the ship, to the extent of the value of the vessel, its equipment and the freight Under 588, the shipowner and the shipagent are not liable for the obligations contracted by the captain if he exceeds his authority, unless the amounts claimed were invested for the benefit of the vessel --> however under Art. 1759, NCC, the ship owner is liable for the death of or injuries to the passengers which are caused by the negligence or wilful acts of his EEs although such EEs may have acted beyond the scope of their authority or in violation of the orders of the shipowner CComm, 589. If two or more persons should be part owners of a merchant vessel, a partnership shall be presumed as established by the coowners. This partnership shall be governed by the resolutions of the majority of the members. If the part owners should not be more than two, the disagreement of views, if any, shall be decided by the vote of the member having the largest interest. If the interests are equal, it should be decided by lot. The person having the smallest share in the ownership shall have one vote; and proportionately the other part owners as many votes as they have parts equal to the smallest one. CComm, 590. The co-owners of a vessel shall be civilly liable in the proportion of their interests in the common fund, for the results of the acts of the captain, referred to in Article 587. Each co-owner may exempt himself from this liability by the abandonment, before a notary, of the part of the vessel belonging to him. CComm, 591. All the part owners shall be liable, in proportion to their respective ownership, for the expenses for repairing the vessel, and for other expenses which are incurred by virtue of a resolution of the majority. They shall likewise be liable in the same proportion for the expenses for the maintenance, equipment, and provisioning of the vessel, necessary for navigation. CComm, 592. The resolution of the majority with regard to the repair, equipment, and provisioning of the vessel in the port of departure shall bind the minority, unless the minority members renounce their interests, which must be acquired by the other co-owners, after a judicial appraisement of the value of the portion or portions assigned.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines The resolutions of the majority relating to the dissolution of the partnership and sale of the vessel shall also be binding on the minority. The sale of the vessel must be made at public auction, subject to the provisions of the law of civil procedure, unless the co-owners unanimously agree otherwise, saying always the right of repurchase and redemption provided for in Article 575. CComm, 593. The owners of a vessel shall have preference in her charter over other persons, under the same conditions and price. If two or more of them should claim this right, the one having the greater interest shall be preferred; and should they have equal interests, the matter shall be decided by lot. CComm, 594. The co-owners shall elect the manager who is to represent them in the capacity of ship agent. The appointment of director or ship agent shall be revocable at the will of the members. CComm, 595. The ship agent, whether he is at the same time the owner of the vessel, or a manager for an owner or for an association of coowners, must have the capacity to trade and must be recorded in the merchant's registry of the province. The ship agent shall represent the ownership of the vessel, and may, in his own name and in such capacity, take judicial and extrajudicial steps in matters relating to commerce. CComm, 596. The ship agent may discharge the duties of captain of the vessel, subject in every case to the provision of Article 609. If two or more co-owners apply for the position of captain, the disagreement shall be decided by a vote of the members; and if the vote should result in a tie, it shall be decided in favor of the co-owner having the larger interest in the vessel. If the interests of the applicants should be equal, and there should be a tie, the matter shall be decided by lot. CComm, 597. The ship agent shall designate and come to terms with the captain, and shall contract in the name of the owners, who shall be bound in all that refer to repairs, details of equipment, armament, provisions of food and fuel, and freight of the vessel, and, in general, in all that relate to the requirements of navigation. CComm, 598. The ship agent may not order a new voyage, or make contracts for a new charter, or insure the vessel, without the authorization of its owner or resolution of the majority of the co-owners, unless these powers were granted him in the certificate of his appointment. If he insures the vessel without authorization therefore, he shall be subsidiarily liable for the solvency of the insurer. CComm, 599. The ship agent managing for an association shall render to his associates an account of the results of each voyage of the vessel, without prejudice to always having the books and correspondence relating to the vessel and to its voyages at their disposal. CComm, 600. After the account of the managing agent has been approved by a relative majority, the co-owners shall pay the expenses in proportion to their interest, without prejudice to the civil or criminal actions which the minority may deem fit to institute afterwards. In order to enforce the payment, the managing agent shall be entitled to an executory action ("accion ejecutiva"), which shall be instituted by virtue of a resolution of the majority, and without further proceedings than the acknowledgment of the signatures of the persons who voted for the resolution. CComm, 601. Should there be any profits, the co-owners may demand of the managing agent the amount corresponding to their interests by means of an executory action ("accion ejecutiva"), without any other requisite than the acknowledgment of the signatures on the instrument approving the account. CComm, 602. The ship agent shall indemnify the captain for all the expenses he may have incurred with funds of his own or of others, for the benefit of the vessel. CComm, 603. Before the vessel sets out to sea the ship agent may at his discretion discharge the captain and members of the crew whose contracts are not for a definite period or voyage, paying them the salaries earned according to their contracts, and without any indemnity whatsoever, unless there is an express and specific agreement in respect thereto. CComm, 604. If the captain or any other member of the crew should be discharged during the voyage, they shall receive their salary until they return to the port where the contract was made, unless there should be just cause for the discharge, all in accordance with Article 636 and following of this Code. CComm, 605. If the contracts of the captain and members of the crew with the ship agent should be for a definite period or voyage, they may not be discharged until after the fulfillment of their contracts, except by reason of insubordination in serious matters, robbery, theft, habitual drunkenness, or damage caused to the vessel or to its cargo through malice or manifest or proven negligence. CComm, 606. If the captain should be a co-owner of the vessel, he may not be discharged unless the ship agent returns to him the amount of his interest therein, which, in the absence of agreement between the parties, shall be appraised by experts appointed in the manner established in the law of civil procedure. CComm, 607. If the captain who is a co-owner should have obtained the command of the vessel by virtue of a special agreement contained in the articles of association, he may not be deprived of his office except for the causes mentioned in Article 605. CComm, 608. In case of the voluntary sale of the vessel, all contracts between the ship agent and the captain shall terminate, reserving to the latter his right to the indemnity which may pertain to him, according to the agreements made with the ship agent. They vessel sold shall remain subject to the security of the payment of said indemnity if, after the action against the vendor has been instituted, the latter is found to be insolvent. CComm, 618. The captain shall be civilly liable to the ship agent, and the latter to the third persons who may have made contracts with the former; 1. For all the damages suffered by the vessel and its cargo by reason of want of skill or negligence on his part. If a misdemeanor or crime has been committed, he shall be liable in accordance with the Penal Code. 2. For all the thefts committed by the crew, reserving his right of action against the guilty parties. 3. For the losses, fines, and confiscations imposed an account of violation of customs, police, health, and navigation laws and regulations. 4. For the losses and damages caused by mutinies on board the vessel or by reason of faults committed by the crew in the service and defense of the same, if he does not prove that he made timely use of all his authority to prevent or avoid them. 5. For those caused by the misuse of the powers and the non-fulfillment of the obligations pertaining to him in accordance with Articles 610 and 612. 6. For those arising by reason of his going out of his course or taking a course which he should not have taken without sufficient cause, in the opinion of the officers of the vessel, at a meeting with the shippers or supercargoes who may be on board. No exceptions whatsoever shall exempt him from this obligation. 7. For those arising by reason of his voluntarily entering a port other than that of his destination, outside of the cases or without the formalities referred to in Article 612.
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8. Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines For those arising by reason of non-observance of the provisions contained in the regulations on situation of lights and maneuvers for the purpose of preventing collisions. Art. 618 provides for the direct responsibility of the shipowner and shipagent to third persons; the captain shall be civilly liable to the ship agent and the latter is the one liable to third persons This article applies to breaches of contract and tortious negligence of the captain But where the vessel is totally chartered for use of a single party, the shipowner and that party may validly stipulate that the latter shall be exempt from liability for the negligence of the captain and crew
Reason for imposition of liability on owner for damages suffered by third persons occasioned by the acts of the captain: To place the primary liability upon the person who has actual control over the conduct of the voyage and who has the most capital embarked in the venture, namely, the owner of the ship, leaving him to obtain recourse, from other individuals who have been drawn into the venture as shippers The shippers and passengers in making contracts with the captain do so through the confidence they have in the shipowner who appointed him --> they presume that the owner made a most careful investigation before appointing him Distinction between liability for lawful and unlawful acts: The lawful acts and obligations of the captain beneficial to the vessel may be enforced as against the agent/owner for the reason that such obligations arise from the contract of agency ( provided that the captain does not exceed his authority) As to any liability incurred by the captain through his unlawful acts, the ship agent is simply subsidiarily liable Liabilities of captain: the responsibility of the captain extends to every fraudulent or negligent act of any person in the complement, in the execution of his employment --> he does not respond for personal injuries of the crew arising from personal quarrels but he is liable for damages to persons or property occasioned by a maneuvering of the vessel, for failure to follow international rules and regulations, for failure to take the precautions to prevent every damage possible to the vessel which has suffered an average Standard Oil v. Castelo. It is universally recognized that the captain is the representative of the owner and both under Art. 586 of the Code of Commerce, are civilly liable for the acts of the master. When jettison of cargo occurs, it is the duty of the captain to effect the adjustment, liquidating and distribution of the general average; his failure gave rise to liability for which the owner of the ship must answer || The owner of the ship ordinarily has vastly more capital embarked upon a voyage than has any shipper of cargo. Moreover, the shipowner, in captain's person, has complete and exclusive control of the crew and ship navigation. It is therefore proper that any person whose property may have been cast should have a right of action directly against the shipowner for breach of duty which the law imposed on the captain with respect to such cargo. (a) Responsibilities and liabilities Yu Con v. Ipil. The owner of a minor craft who has equipped and victualed it for the purpose of using it in the transportation of merchandise from one port to another is under the law a shipowner and the master of the craft is to be considered as its captain in the legal acceptation of this word, and the former must be held civilly liable for indemnities in favor of third parties to which the conduct of the master/captain may give rise in the custody of the effects laden on the craft, and for all losses which, through his fault or negligence, may occur to the merchandise or effects delivered to him for their transportation as well as for the damages suffered by those who contracted with him, in consequence of misdemeanors and crimes committed by him or by the members of the crew of the craft. Manila Steamship v. Abdulhaman. While it is true that plaintiff's action against petitioner is based on a tort or quasi-delict, the tort in question is not a civil tort under the Civil Code but is a maritime tort resulting in a collision at sea, governed by Arts. 826-939 of the Code of Commerce, while the owners of both colliding vessels are solidarily liable for damages caused. This direct responsibility is recognized in Art. 618 of the Code of Commerce, under which the captain shall be civilly liable to the ship agent, and the latter is the one liable to third persons. (b) The doctrine of limited liability CComm, 587, supra. A shipagent is liable notwithstanding the insolvency of the principal/owner BUT the ship agent may exempt himself from liability by abandoning the vessel with all her equipment and the freight it may have earned during the voyage --> the effect of abandonment is to extinguish the liability of the shipagent The ship agent's liability is confined to that which he is entitled as a matter of right to abandon : the vessel with all her eqpt. and the freight it may have earned during the voyage and to the insurance thereof Limited liability is not applicable when no abandonment of vessel is made Effect of abandonment: An abandonment amounts to an offer of the value of the vessel, of her equipment, and freight money earned results in the cessation of the responsibility of the owner/agent Abandonment cannot be refused by creditors This applies to all cases where the owner/agent may be held liable for the negligent or illicit acts of the captain Effect of loss or destruction of vessel: The shipagent's liability is merely co-extensive with his interest in the vessel such that the total loss thereof results in its extinction --> the total destruction of the vessel extinguishes a maritime lien as there is no longer any res to which it can attach. Three (3) cases where the loss of the vessel extinguishes the liability of the shipowner: (1) under 587, liability arising from the conduct of the captain in the vigilance of the goods and for the safety of the passengers and for any liability arising from the negligent or illicit acts of the captain for which the shipowner or ship agent may be held liable (2) under 643, liability for the wages of the captain and the crew and for advances made by the shipagent if the vessel is lost by shipwreck or capture (3) under 837, liability for collision Exceptions: (1) Doctrine does not apply where shipowner is at fault : the doctrine is premised on the condition that the death or injury to the passenger occurred by reason of the fault or negligence of the captain only
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(2) (3) Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Doctrine does not apply in cases of Workmen's Compensation --> such compensation has nothing to do with maritime commerce; it is an item in the cost of production which must be included in the budget of any well-managed industry Total destruction of the vessel does not affect the liability of the owner for repairs on the vessel completed before its loss owners of a vessel are liable for necessary repairs; its liability for repairs remains unaffected by the loss of the thing
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Reason for limited liability: This doctrine had its origin when maritime trade and sea voyage was attended by innumerable hazards and perils --> to offset against these adverse conditions and to encourage shipbuilding and maritime commerce, it was deemed necessary to confine the liability of the owner or agent arising from the operation of a ship to the vessel, eqpt. and freight or insurance, if any Limited liability is evidence of the real and hypothecary nature of maritime law: (1) limitation of liability to the actual value of the vessel and freight; (2) right to retain the cargo and the embargo and detention of the vessel in cases where the ordinary civil law would not allow more than a personal action against the debtor or personal liable --> the maritime creditor may attach the vessel itself to secure his claim without waiting for a settlement of his rights by a final judgment, even to the prejudice of a third person Manila Steamship v. Abdulhaman, supra. Yangco v. Laserna. The reason for the limited liability is the real and hypothecary nature of maritime law as distinguished from civil law and mercantile law in general. As evidence of this real nature, we have (1) the limitation of the liability of the agents to the actual value of the vessel and the freight money and (2) the right of the maritime creditor to retain the cargo, and the embargo and detention of the vessel in cases where the ordinary civil law would not allow more than a personal action against the debtor or person liable. Abueg v. San Diego. The real and hypothecary nature of the liability of the shipowner or agent embodied in the provisions of the Maritime Law, had its origin in the prevailing conditions of the maritime trade and sea voyages during the medieval ages, attended by innumerable hazards and perils. To offset against these adverse conditions and to encourage shipbuilding and maritime commerce, it was deemed necessary to confine the liability of the owner or agent arising from the operation of a ship to the vessel, equipment, and freight, or insurance, if any, so that if the shipowner or agent abandoned the ship, equipment, and freight, his liability was extinguished. Aboitiz Shipping v. GAFLAC. The trial court and the appellee court found that the sinking of M/V P.Aboitiz was not due to waves caused by tropical storm Yooning but due to the fault and negligence of petitioner, its master and crew. (c) Specific rights and prerogatives CComm, 575. Co-owners of vessels shall have the right of repurchase and redemption in sales made to strangers, but they may exercise the same only within the nine days following the inscription of the sale in the registry, and by depositing the price at the same time. CComm, 593, supra. CComm, 594, supra. CComm, 596, supra. CComm, 601, supra. Captains and Master (a) Qualifications and licensing RA 5173, Sec. 3. Specific Functions. The Philippine Coast Guard shall perform the following functions: (a) To prevent and suppress illegal entry, smuggling, other customs frauds and violations of other maritime laws that may be committed within the waters subject to the jurisdiction of the Republic of the Philippines, and for the purpose surveillance by the Philippine Coast Guard may be made on vessels entering and/or leaving the Philippine territory; (b) To assist in the suppression of fishing by means of dynamite, explosives or toxic substances or other methods as may be declared destructive by proper authorities; (c) To promulgate and enforce rules for lights, signals, speed, steering, sailing, passing, anchorage, movement and towlines of vessels and lights and signals on bridges; (d) To approve plans for the construction, repair, or alteration of vessels; approve materials, equipment and appliances of vessels; approved the classification of vessels; inspect vessels and their equipment and appliances; register all types of motorized watercraft plying in Philippine waters; issue certificates of inspection and of permits indicating the approval of vessels for operation; issue certificates of Philippine registry of vessels; administer load line requirements; promulgate and enforce other provisions for the safety of life and property on vessels; and determine the numbering of undocumented vessels: Provided, That certification and approval of any plans, equipment and any vessel by internationally known classification societies which are recognized by the Philippine Government shall be deemed to have complied with this section; (e) To issue licenses and certificates to officers, pilots, major and minor patrons and seamen, as well as suspend and revoke such licenses and certificates; (f) To investigate marine casualties and disasters including those arising from marine protests filed with the Bureau of Customs relative to the liability of shipowners and officers; (g) To enforce laws, rules and regulations governing manning, citizenship and mustering and drilling of crews requirements, control of logbooks, shipment, discharge, protection, and welfare merchant seamen; (h) To enforce laws requiring the performance of duties of shipowners and officers after accidents; (i) To prescribe and enforce regulations for outfitting and operation of motorboats and the licensing of motorboat operators; (j) To regulate regattas and marine parades; (k) To render aid to distressed persons or vessels on the high seas and on waters subject to the jurisdiction of the Philippines, and, in this connection, the Philippine Coast Guard may perform any and all acts necessary to rescue and aid persons; furnish clothing, food, lodging, medicine and other necessary supplies and services to persons succored; protect, save, and take charge of all property saved from marine disasters until such property is delivered to persons authorized to receive it or is otherwise disposed of in accordance with law or applicable regulations; and collect and take charge of bodies of those who may perish in such disasters; (l) To develop, establish, maintain, and operate aids to maritime navigation. In the performance of these functions, the Philippine Coast Guard is authorized to destroy or tow in port sunken of floating dangers to navigation; (m) To supervise nautical schools with reference to activities relative to navigation, seamanship, marine engineering and other allied matters, in coordination with the Department of Education; (n) To perform functions pertaining to maritime communications which are not specifically delegated to some other office or department; and
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (o) To assist, within its capabilities and upon request of the appropriate authorities, other Government agencies in the performance of their functions, within the waters subject to the jurisdiction of the Philippines, relating to matters and activities not specifically mentioned in this section: Provided, That in the exercise of these functions, personnel of the Philippine Coast Guard shall be deemed to be acting as agents of the particular departments, bureau, office, agency or instrumentality charged with the enforcement and administration of the particular law. Members of the Philippine Coast Guard are peace officers for all purposes of this Act and shall be, and shall act, as law enforcement agents of the Bureau of Customs, and the Bureau of Immigration, the Bureau of Internal Revenue, the Fisheries Commission, and such other departments, bureaus or offices in the enforcement of pertinent laws, rules and regulations. CComm, 609. Captains, masters or patrons of vessels must be Filipinos, have legal capacity to contract in accordance with this code, and prove the skill, capacity, and qualifications necessary to command and direct the vessel, as established by marine or navigation laws, ordinances, or regulations, and must not be disqualified according to the same for the discharge of the duties of the position. If the owner of a vessel desires to be the captain thereof, without having the legal qualifications therefor, he shall limit himself to the financial administration of the vessel, and shall intrust the navigation to a person possessing the qualifications required by said ordinances and regulations. Captain - one who governs vessels that navigate the high seas or ships of large dimensions and importance, although they may be engaged in coastwise trade Master - one who commands smaller ships engaged exclusively in coastwise trade captain and master have the same meaning for maritime commerce patron bancas Roles of the captain: (1) general agent of the shipowner; (2) technical director of the vessels; (3) represents the government of the country under whose flag he navigates (b) Powers and Duties CComm, 610. The following powers shall be inherent in the position of captain, master or patron of a vessel: 1. To appoint or make contracts with the crew in the absence of the ship agent, and to propose said crew, should said agent be present; but the ship agent may not employ any member against the captain's express refusal. 2. To command the crew and direct the vessel to the port of its destination, in accordance with the instructions he may have received from the ship agent. 3. To impose, in accordance with the contracts and with the laws and regulations of the merchant marine, and when on board the vessel, correctional punishment upon those who fail to comply with his orders or are wanting in discipline, holding a preliminary hearing on the crimes committed on board the vessel on the seas, which crimes shall be turned over to the authorities having jurisdiction over the same at the first port touched. 4. To make contracts for the charter of the vessel in the absence of the ship agent or of its consignee, acting in accordance with the instructions received and protecting the interests of the owner with utmost care. 5. To adopt all proper measures to keep the vessel well supplied and equipped, purchasing all that may be necessary for the purpose, provided there is no time to request instruction from the ship agent. 6. To order, in similar urgent cases while on a voyage, the repairs on the hull and engines of the vessel and in its rigging and equipment, which are absolutely necessary to enable it to continue and finish its voyage; but if he should arrive at a point where there is a consignee of the vessel, he shall act in concurrence with the latter. CComm, 611. In order to comply with the obligations mentioned in the preceding article, the captain, when he has no funds and does not expect to receive any from the ship agent, shall obtain the same in the successive order stated below: 1. By requesting said funds from the consignee of the vessel or correspondents of the ship agent. 2. By applying to the consignees of the cargo or to those interested therein. 3. By drawing on the ship agent. 4. By borrowing the amount required by means of a loan on bottomry. 5. By selling a sufficient amount of the cargo to cover the sum absolutely indispensable for the repair of the vessel and to enable it to continue its voyage. In these two last cases he must apply to the judicial authority of the port, if in the Philippines, and to the consul of the Republic of the Philippines if in a foreign country, and where there is none, to the local authority, proceeding in accordance with the provisions of Article 583, and with the provisions of the law of civil procedure. CComm, 612. The following obligations shall be inherent in the office of captain: 1. To have on board before starting on a voyage a detailed inventory of the hull, engines, rigging, spare-masts, tackle, and other equipment of the vessel; the royal or the navigation certificate; the roll of the persons who make up the crew of the vessel, and the contracts entered into with them; the lists of passengers; the bill of health; the certificate of the registry proving the ownership of the vessel and all the obligations which encumber the same up to that date; the charter parties or authenticated copies thereof; the invoices or manifests of the cargo, and the memorandum of the visit or inspection by experts, should it have been made at the port of departure. 2. To have a copy of this code on board. 3. To have three folioed and stamped books, placing at the beginning of each one a memorandum of the number of folios it contains, signed by the maritime authority, and in his absence by the competent authority. In the first book, which shall be called "log book," he shall enter day by day the condition of the atmosphere, the prevailing winds, the courses taken, the rigging carried, the power of the engines used in navigation, the distances covered, the maneuvers executed, and other incidents of navigation; he shall also enter the damage suffered by the vessel in her hull, engines, rigging, and tackle, no matter what its cause may be, as well as the impairment and damage suffered by cargo, and the effect and importance of the jettison, should there be any; and in cases of serious decisions which require the advice or a meeting of the officers of the vessel, or even of the crew and passengers, he shall record the decisions adopted. For the information indicated he shall make use of the binnacle book and of the steam of engine book kept by the engineer. In the second book called the "accounting book," he shall record all the amounts collected and paid for the account of the vessel, entering specifically article by article, the source of the collection and the amounts spent for provisions, repairs, acquisitions of equipment or goods, fuel, food, outfits, wages, and other expenses of whatever nature they may be. He shall furthermore enter
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines therein a list of all the members of the crew, stating their domiciles, their wages and salaries, and the amounts they may have received on account, directly or by delivery to their families. In the third book, called "freight book," he shall record the loading and discharge of all the goods, stating their marks and packages, names of the shippers and of the consignees, ports of loading and unloading, and the freightage they give. In this same book he shall record the names and places of sailing of the passengers, the number of packages in their baggage, and the price of passage. 4. Before receiving cargo, to make with the officers of the crew and two experts, if required by the shippers and passengers, an examination of the vessel, in order to ascertain whether it is water-tight, with the rigging and engines in good condition, and with the equipment required for good navigation, preserving under his responsibility a certificate of the memorandum of his inspection, signed by all those who may have taken part therein. The experts shall be appointed, one by the captain of the vessel and another by those who request its examination, and in case of disagreement a third shall be appointed by the marine authority of the port or by the authority, exercising his functions. 5. To remain constantly on board the vessel with the crew while the cargo is being taken on board and to carefully watch the stowage thereof; not to consent to the loading of any merchandise or matter of a dangerous character, such as inflammable or explosive substances, without the precautions which are recommended for their packing, handling and isolation; not to permit the carriage on deck of any cargo which by reason of its arrangement, volume, or weight makes the work of the sailors difficult, and which might endanger the safety of the vessel; and if, on account of the nature of the merchandise, the special character of the shipment, and principally the favorable season in which it is undertaken, merchandise may be carried on deck, he must hear the opinion of the officers of the vessel and have the consent of the shippers and of the ship agent. 6. To demand a pilot at the expense of the vessel whenever required by the navigation, and principally when he has to enter a port, canal, or river, or has to take a roadstead or anchoring place with which neither he nor the officers and crew are acquainted. 7. To be on deck on reaching land and to take command on entering and leaving ports, canals, roadsteads, and rivers, unless there is a pilot on board discharging his duties. He shall not spend the night away from the vessel except for serious causes or by reason of official business. 8. To present himself, when making a port in distress, to the maritime authority if in the Philippines and to the consul of the Republic of the Philippines if in a foreign country, before twenty-four hours have elapsed, and to make a statement of the name registry, and port of departure of the vessel, of its cargo, and the cause of arrival which declaration shall be visaed by the authority or the consul, if after examining the same it is found to be acceptable, giving the captain the proper certificate proving his arrival in distress and the reasons therefor. In the absence of the maritime authority or of the consul, the declaration must be made before the local authority. 9. To take the necessary steps before the competent authority in order to record in the certificate of the vessel in the registry of vessels the obligations which he may contract in accordance with Article 583. 10. To place under good care and custody all the papers and belongings of any members of the crew who might die on the vessel, drawing up a detailed inventory, in the presence of passengers, or, in their absence, of members of the crew as witnesses. 11. To conduct himself according to the rules and precepts contained in the instructions of the ship agent, being liable for all that which he may do in violation thereof. 12. To inform the ship agent from the port at which the vessel arrives, of the reason of his arrival, taking advantage of the semaphore, telegraph, mail, etc., as the case may be; to notify him of the cargo he may have received, stating the names and domiciles of the shippers, freightage earned, and amounts borrowed on bottomry loan; to advise him of his departure, and of any operation and date which may be of interest to him. 13. To observe the rules with respect to situation, lights and maneuvers in order to avoid collisions. 14. To remain on board, in case the vessel is in danger, until all hope to save it is lost, and before abandoning it, to hear the officers of the crew, abiding by the decision of the majority; and if the boats are to be taken to, he shall take with him, before anything else, the books and papers, and then the articles of most value, being obliged to prove, in case of the loss of the books and papers, that he did all he could to save them. 15. In case of wreck, to make the proper protest in due form at the first port of arrival, before the competent authority or the Philippine consul, within twenty-four hours, specifying therein all the incidents of the wreck, in accordance with subdivision 8 of this article. 16. To comply with the obligations imposed by the laws and regulations on navigation, customs, health, and others. CComm, 624. A captain whose vessel has gone through a hurricane or who believes that the cargo has suffered damages or averages, shall make a protest thereon before the competent authority at the first port he touches, within twenty-four hours following his arrival and shall ratify it within the same period when he arrives at his destination, immediately proceeding with the proof of the facts, and he may not open the hatches until after this has been done. The captain shall proceed in the same manner, if, the vessel having been wrecked; he is saved alone or with part of his crew, in which case he shall appear before the nearest authority, and make a sworn statement of facts. The authority or the consul shall verify the said facts receiving sworn statements of the members of the crew and passengers who may have been saved; and taking such other steps as may assist in arriving at the facts he shall make a statement of the result of the proceedings in the log book and in that of the sailing mate, and shall deliver to the captain the original record of the proceedings, stamped and folioed, with a memorandum of the folios, which he must rubricate, in order that it may be presented to the judge or court of the port of destination. The statement of the captain shall be accepted if it is in accordance with those of the crew and passengers; if they disagree, the latter shall be accepted, always saying proof to the contrary. CComm, 625. The captain, under his personal responsibility as soon as he arrives at the port of destination, should get the necessary permission from the health and customs officers, and perform the other formalities required by the regulations of the administration, delivering the cargo without any defalcation, to the consignee, and in a proper case, the vessel, rigging, and freightage to the ship agent. If by reason of the absence of the consignee or on account of the nonappearance of a legal holder of the bills of lading, the captain should not know to whom he is to legally make the delivery of the cargo, he shall place it at the disposal of the proper judge or court or authority, in order that he may determine what is proper with regard to its deposit, preservation and custody. Inter Orient v. NLRC. The captain of a vessel is a confidential and managerial employee within the meaning of the above doctrine. A master or captain, for purposes of maritime commerce, is one who has command of a vessel. A captain commonly performs three (3)
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines distinct roles: (1) he is a general agent of the shipowner; (2) he is also commander and technical director of the vessel; and (3) he is a representative of the country under whose flag he navigates. Of these roles, by far the most important is the role performed by the captain as commander of the vessel, for such role (which to our mind, is analogous to that of "Chief Executive Officer" [CEO] of a presentday corporate enterprise) has to do with the operation and protection of the vessel during its voyag and the protection of the passengers (if any) and crew and cargo. In his role as general agent of the shipowner, the captain has authority to sign bills of lading, carry goods aboard and and deal with the freight earned, agree upon rates and decide whether to take cargo. The ship captain, as agent of the shipowner, has legal authority to enter into contracts with respect to the vessel and the trading of the vessel, subkect to applicable limitations established by statute, contract or instructions and regulations of the shipowner. To the captain is committed the governance, care and management of the vessel. Clearly, the captain is veste with both management and fiduciary functions. || More importantly, a ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and its crew and cargo specifically requires on a stipulated ocean voyage. The captain is held responsible, and properly so, for such safety (c) Prohibited Acts and transactions CComm, 613. A captain who navigates for freight in common or on shares may not make any separate transaction for his own account; and should he do so, the profit which may accrue shall belong to the other persons interested, and the losses shall be borne by him exclusively. CComm, 614. A captain who, having made an agreement to make a voyage, fails to perform his undertaking, without prevented by fortuitous accident or force majeure, shall indemnify for all the losses which he may cause without prejudice to the criminal penalties which may be proper. CComm, 615. Without the consent of the agent, the captain cannot have himself substituted by another person; and should he do so, besides being liable for all the acts of the substitute and bound to the indemnities mentioned in the foregoing articles, the captain as well as the substitute may be discharged by the ship agent. CComm, 616. If the provisions and fuel of the vessel should be consumed before arriving at the port of destination, the captain shall order, with the consent of the officers of the same, the arrival at the nearest port to get a supply of either; but if there are persons on board who have provisions of their own, he may force them to deliver said provision for the common consumption of all those who may be on board, paying the price thereof at the same time, or at the latest, at the first port reached. CComm, 617. The captain may not contract loans on respondentia secured by the cargo; and should he do so, the contracts shall be void. Neither may he borrow money on bottomry for his own transactions, except on the portion of the vessel he owns, provided no money has been previously borrowed on the whole vessel, and there does not exist any other kind of lien or obligation chargeable against the vessel. If he may do so, he must state what interest he has in the vessel. In case of violation of this article, the principal, interest, and costs shall be for the personal account of the captain, and the ship agent may furthermore discharge him. CComm, 621. A captain who borrows money on the hull, engine, rigging or tackle of the vessel, or pledges or sells merchandise or provisions outside of the cases and without the formalities prescribed in this Code, shall be liable for the principal, interests, and costs, and shall indemnify for the damages he may cause. He who commits fraud in his accounts shall pay the amount defrauded and shall be subject to the provisions of the Penal Code. CComm, 583, supra. Other officers and crew (a) Contracts and formalities CComm, 634. The captain may make up the crew of his vessel with such number of men as he may consider proper, and in the absence of Filipino sailors, he may take on foreigners residing in the country, the number thereof not to exceed one-fifth of the crew. If in foreign ports the captain should not find a sufficient number of Filipino sailors, he may complete the crew with foreigners, with the consent of the consul or marine authorities. The agreement which the captain may make with the members of the crew and others who go to make up the complement of the vessel, to which reference is made in Article 612, must be reduced to writing in the account book, without the intervention of a notary public or clerk of court ("escribano"), signed by the parties thereto and visaed by the marine authority if they be executed in Philippine territory or by the consuls or consular agents of the Republic of the Philippines if executed abroad, stating therein all the obligations which each one contracts and all the rights he acquires said authorities taking care that these obligations and rights are recorded in a clear and definite manner which give no room for doubts or claims. The captain shall take care to read to them the articles of this Code which concern them, stating in said document that they were read. If the book contains the requisites prescribed in Article 612, and there should not appear any signs of alterations in its entries, it shall be admitted as evidence in questions which may arise between the captain and the crew with respect to the agreements contained therein and the amounts paid on account of the same. Every member of the crew may demand of the captain a copy, signed by the latter, of the agreement and of the liquidation of his wages, as they appear in the book. (b) Duties and liabilities CComm, 635. A seaman who has been contracted to serve on a vessel may not rescind his contract or fail to comply therewith except by reason of a legitimate impediment which may have happened to him. Neither may he transfer from the service of one vessel to another without obtaining the written permission of the captain of the vessel on which he may be. If, without obtaining said permission, the seaman who has signed for one vessel should sign for another one, the second contract shall be void, and the captain may choose between forcing him to fulfill the service to which he first bound himself, or at his expense to look for a person to substitute him. Furthermore, he shall lose the wages earned on his first contract, to the benefit of the vessel for which he had signed. A captain who, knowing that a seaman is in the service of another vessel, should have made a new agreement with him without having required of him the permission referred to in the preceding paragraphs, shall be subsidiarily responsible to the captain of the vessel to which the seaman first belonged, for that part of the indemnity, referred to in the third paragraph of this article, which the seaman may not be able to pay. (c) Rights
3.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CComm, 636. If there is no fixed period for which a seaman has been contracted he may not be discharged until the end of the return voyage to the port where he enlisted. CComm, 637. Neither may the captain discharge a seaman during the time of his contract except for just cause, the following being considered as such: 1. The perpetration of a crime which disturbs order on the vessel. 2. Repeated insubordination, want of discipline, or non-fulfillment of the service. 3. Repeated incapacity and negligence in the fulfillment of the service he should render. 4. Habitual drunkenness. 5. Any occurrence which incapacitates the seaman to perform the work entrusted to him, with the exception of that provided in Article 644. 6. Desertion. The captain may, however, before getting out on a voyage and without giving any reason, refuse to permit a seaman whom he may have engaged to go on board, and leave him on land, in which case he will be obliged to pay him his wages as if he had rendered services. This indemnity shall be paid from the funds of the vessel if the captain should have acted for reasons of prudence and in the interest of the safety and good services of the farmer. Should this not be the case, it shall be paid by the captain personally. After the voyage has begun, during the same, and until the conclusion thereof, the captain may not abandon any member of his crew on land or on sea, unless, by reason of some crime, his imprisonment and delivery to the competent authority in the first port touched should be proper, a matter obligatory for the captain. CComm, 638. If, after the crew has been engaged, the voyage is revoked by the will of the ship agent or of the charterers before or after the vessel has put to sea, or if the vessel is for the same reason given a destination different from that fixed in the agreement with the crew, the latter shall be indemnified on account of the rescission of the contract, according to the cases follows: 1. If the revocation of the voyage should be decided upon before the departure of the vessel from the port, each sailor engaged shall be given one month's salary, besides what may be due him, in accordance with his contract, for the services rendered to the vessel up to the date of the revocation. 2. If the agreement should have been for a fixed amount for the whole voyage, that which may be due for said month and days shall be determined in proportion to the approximate number of days the voyage should have lasted, in the judgment of experts, in the manner established in the law of Civil Procedure; and if the proposed voyage should be of such short duration that it is calculated at approximately one month, the indemnity shall be fixed for fifteen days, discounting in all cases the sums advanced. 3. If the revocation should take place after the vessel has put to sea, the seamen engaged for a fixed amount for the voyage shall receive in full the salary which may have been offered them as if the voyage had terminated; and those engaged by the month shall receive the amount corresponding to the time they might have been on board and to the time they may require to arrive at the port of destination, the captain being obliged, furthermore, to pay the seamen in both cases, the passage to the said port or to the port of sailing of the vessel, as may be convenient for them. 4. If the ship agent or the charterers of the vessel should give it a destination different from that fixed in the agreement, and the members of the crew should not agree thereto, they shall be given by way of indemnity half the amount fixed in case No. 1, besides what may be owed them for the part of the monthly wages corresponding to the days which have elapsed from the date of their agreements. If they accept the change, and the voyage, on account of the greater distance or of other reasons, should give rise to an increase of wages, the latter shall be adjusted privately or through amicable arbitrators in case of disagreement. Even though the voyage should be shortened to a nearer point, this shall not give rise to a reduction in the wages agreed upon. If the revocation or change of the voyage should come from the shippers or charterers, the agent shall have a right to demand of them the indemnity which may be justly due. CComm, 639. If the revocation of the voyage should arise from a just cause independent of the will of the ship agent and charterers, and the vessel should not have left the port, the members of the crew shall have no other right than to collect the wages earned up to the day on which the revocation took place. CComm, 640. The following shall be just causes for the revocation of the voyage. 1. A declaration of war or interdiction of commerce with the power to whose territory the vessel was bound. 2. The blockade of the port of its destination, or the breaking out of an epidemic after the agreement. 3. The prohibition to receive in said port the goods which make up the cargo of the vessel. 4. The detention or embargo of the same by order of the government, or for any other reason independent of the will of the ship agent. 5. The inability of the vessel to navigate. CComm, 641. If, after a voyage has been begun, any of the first three causes mentioned in the foregoing article should occur, the sailors shall be paid at the port which the captain may deem advisable to make for the benefit of the vessel and cargo, according to the time they may have served thereon; but if the vessel is to continue its voyage, the captain and the crew may mutually demand the enforcement of the contract. In case of the occurrence of the fourth cause, the crew shall continue to be paid half wages, if the agreement is by month; but if the detention should exceed three months, the contract shall be rescinded and the crew shall be paid what they should have earned according to the contract if the voyage had been concluded. And if the agreement should be for a fixed sum for the voyage, the contract must be complied within the terms agreed upon. In the fifth case, the crew shall have no other right than to collect the wages earned; but if the disability of the vessel should have been caused by the negligence or lack of skill of the captain, engineer, or sailing mate, they shall indemnify the crew for the damages suffered, always without prejudice to the criminal liability which may be proper. CComm, 642. If the crew have been engaged on shares, they shall not be entitled, by reason of the revocation, delay, or greater extension of the voyage, to anything but the proportionate part of the indemnity which way be paid into the common funds of the vessel by the persons liable for said occurrences. CComm, 643. If the vessel and her cargo should be totally lost, by reason of capture or wreck, all rights shall be extinguished, both as regards the crew to demand any wages whatsoever, and as regards the ship agent to recover the advances made.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines If a portion of the vessel or of the cargo, or of both, should be saved, the crew engaged on wages, including the captain, shall retain their rights on the salvage, so far as they go, on the remainder of the vessel as well as on the 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 on the portion of the freightage saved. If they should have worked to recover the 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 in order to accomplish the salvage. CComm, 644. A seaman who falls sick shall not lose his right to wages during the voyage, unless the sickness is the result of his own fault. At any rate, the costs of the attendance and cure shall be defrayed from the common funds, in the form of a loan. If the sickness should come from an injury received in the service or defense of the vessel, the seaman shall be attended and cured at the expense of the common funds deducting, before anything else, from the proceeds of the freightage the cost of the attendance and cure. CComm, 645. If a seaman should die during the voyage, his heirs will be given the wages earned and not received according to his contract and the cause of his death, namely If he died a natural death and was engaged on wages, that which may have been earned up to the date of his death shall be paid. If the contract was for a fixed sum for the whole voyage, half the amount earned shall be paid if the seamen died on the voyage out, and the whole amount if he died on the return voyage. And if the contract was on shares and death occurred after the voyage was begun, the heirs shall be paid the entire portion due the seaman; but if the latter died before the departure of the vessel from the port, the heirs shall not be entitled to claim anything. If death occurred in the defense of the vessel, the seaman shall be considered as living, and his heirs shall be paid, at the end of the voyage, the full amount of wages or the integral part of the profits which may be due him as to others of his class. In the same manner, the seaman captured while defending the vessel shall be considered present so as to enjoy the same benefits as the rest; but should he have been captured on account of carelessness or other accident not related to the service, he shall only receive the wages due up to the day of his capture. CComm, 646. The vessel with her engines, rigging, equipment, and freightage shall he liable for the wages earned by the crew engaged per month or for the trip, the liquidation and payment to take place between one voyage and the other. After a new voyage has been undertaken, credits of such kind pertaining to the preceding voyage shall lose their right of preference. CComm, 647. The officers and the crew of the vessel shall be free from all obligations if they deem it proper, in the following cases: 1. If, before beginning the voyage, the captain attempts to change it, or a naval war with the power to which the vessel was destined occurs. 2. If a disease should break out and be officially declared an epidemic in the port of destination. 3. If the vessel should change owner or captain. Supercargoes CComm, 649. Supercargoes shall discharge on board the vessel the administrative duties which the ship agent or the shippers may have assigned to them; they shall keep an account and record of their transactions in a book which shall have the same conditions and requisites as required for the accounting book of the captain, and they shall respect the latter in his capacity as chief of the vessel. The powers and responsibilities of the captain shall cease, when there is a supercargo, with regard to that part of the administration legitimately conferred upon the latter, but shall continue in force for all acts which are inseparable from his authority and office. CComm, 650. All the provisions contained in the second section of Title III, Book II, with regard to capacity, manner of making contracts, and liabilities of factors, shall be applicable to supercargoes. CComm, 651. Supercargoes may not, without special authorization or agreement, make any transaction for their own account during the voyage, with the exception of the ventures which, in accordance with the custom of the port of destination, they are permitted to do. Neither shall they be permitted to invest in the return trip more than the profits from the ventures, unless there is an express authorization from the principals. Accidents and Damages in Maritime Commerce 1. Averages (a) Nature and Kinds CComm, 806. For the purposes of this code the following shall be considered averages: 1. All extraordinary or accidental expenses which may be incurred during the voyage in order to preserve the vessel, the cargo, or both. 2. Any damages or deteriorations which the vessel may suffer from the time it puts to sea from the port of departure until it casts anchor in the port of destination, and those suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of their consignment. CComm, 807. The petty and ordinary expenses incident to navigation, such as those of pilotage of coasts and ports, those of lighterage and towage, anchorage, inspection, health, quarantine, lazaretto, and other so-called port expenses, costs of barges and unloading until the merchandise is placed on the wharf, and any other usual expenses of navigation, shall be considered ordinary expenses to be defrayed by the shipowner, unless there is an express agreement to the contrary. CComm, 808. Averages shall be: 1. Simple or particular. 2. General or gross. Averages consist of 2 items : 1. Expenses: to constitute an average, an expense must be: (a) extraordinary or accidental; (b) incurred during the voyage; (c) incurred in order to preserve the vessel, cargo or both 2. Damages or deterioration : to constitute an average, it must be: (a) have been suffered from the time the vessel puts to sea from the port of departure until it casts anchor in the port of destination; (b) have been suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of consignment (1) Simple or Particular
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Defined CComm, 809. As a general rule, simple or particular averages shall include all the expenses and damages caused to the vessel or to her cargo which have not inured to the common benefit and profit of all the persons interested in the vessel and her cargo, and especially the following: 1. The losses suffered by the cargo from the time of its embarkation until it is unloaded, either on account of inherent defect of the goods or by reason of an accident of the sea or force majeure, and the expenses incurred to avoid and repair the same. 2. The losses and expenses suffered by the vessel in its hull, rigging, arms, and equipment, for the same causes and reasons, from the time it puts to sea from the port of departure until it anchors and lands in the port of destination. 3. The losses suffered by the merchandise loaded on deck, except in coastwise navigation, if the marine ordinances allow it. 4. The wages and victuals of the crew when the vessel is detained or embargoed by legitimate order or force majeure, if the charter has been contracted for a fixed sum for the voyage. 5. The necessary expenses on arrival at a port, in order to make repairs or secure provisions. 6. The lowest value of the goods sold by the captain in arrivals under stress for the payment of provisions and in order to save the crew, or to meet any other need of the vessel, against which the proper amount shall be charged. 7. The victuals and wages of the crew while the vessel is in quarantine. 8. The loss inflicted upon the vessel or cargo by reason of an impact or collision with another, if it is accidental and unavoidable. If the accident should occur through the fault or negligence of the captain, the latter shall be liable for all the losses caused. 9. Any loss suffered by the cargo through the fault, negligence, or barratry of the captain or of the crew, without prejudice to the right of the owner to recover the corresponding indemnity from the captain, the vessel, and the freightage. Distinguishing feature : an expense incurred or damage suffered which has not inured to the common benefit and profit of all persons interested in the vessel and its cargo b. Effects CComm, 810. The owner of the goods which gave rise to the expense or suffered the damage shall bear the simple or particular averages. (2) Gross or General a. Defined CComm, 811. As a general rule, general or gross averages shall include all the damages and expenses which are deliberately caused in order to save the vessel, its cargo, or both at the same time, from a real and known risk, and particularly the following: 1. The goods or cash invested in the redemption of the vessel or of the cargo captured by enemies, privateers, or pirates, and the provisions, wages, and expenses of the vessel detained during the time the settlement or redemption is being made. 2. The goods jettisoned to lighten the vessel, whether they belong to the cargo, to the vessel, or to the crew, and the damage suffered through said act by the goods which are kept on board. 3. The cables and masts which are cut or rendered useless, the anchors and the chains which are abandoned, in order to save the cargo, the vessel, or both. 4. The expenses of removing or transferring a portion of the cargo in order to lighten the vessel and place it in condition to enter a port or roadstead, and the damage resulting therefrom to the goods removed or transferred. 5. The damage suffered by the goods of the cargo by the opening made in the vessel in order to drain it and prevent its sinking. 6. The expenses caused in order to float a vessel intentionally stranded for the purpose of saying it. 7. The damage caused to the vessel which had to be opened, scuttled or broken in order to save the cargo. 8. The expenses for the treatment and subsistence of the members of the crew who may have been wounded or crippled in defending or saying the vessel. 9. The wages of any member of the crew held as hostage by enemies, privateers, or pirates, and the necessary expenses which he may incur in his imprisonment, until he is returned to the vessel or to his domicile, should he prefer it. 10. The wages and victuals of the crew of a vessel chartered by the month, during the time that it is embargoed or detained by force majeure or by order of the government, or in order to repair the damage caused for the common benefit. 11. The depreciation resulting in the value of the goods sold at arrival under stress in order to repair the vessel by reason of gross average. 12. The expenses of the liquidation of the average. CComm, 817. If in lightening a vessel on account of a storm, in order to facilitate its entry into a port or roadstead, part of the cargo should be transferred to lighters or barges and be lost, the owner of said part shall be entitled to indemnity, as if the loss had originated from a gross average, the amount thereof being distributed between the vessel and cargo from which it came. If, on the contrary, the merchandise transferred should be saved and the vessel should be lost, no liability may be demanded of the salvage. CComm, 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 considered gross average, to which the vessels saved shall contribute. Distinguishing feature: Expense or damage suffered deliberately in order to save the vessel, its cargo or both from a real and known risk --> it is the deliverance from an immediate peril, by a common sacrifice, that constitutes the essence of general average Requisites for general average: a.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines 1. there must be a common danger --> the ship and cargo are subject to the same danger and that the danger arises from accidents of the sea, dispositions of the authorities or faults of men, provided that the circumstances producing the peril should be ascertained and imminent 2. for the common safety, part of the vessel or the cargo or both is sacrificed deliberately 3. from the expenses or damages caused follows the successful saving of the vessel and cargo 4. the expenses or damages should have been incurred or inflicted after taking legal steps and authority Essential requisites CComm, 813. In order to incur the expenses and cause the damages corresponding to gross average, there must be a resolution of the captain, adopted after deliberation with the sailing mate and other officers of the vessel, and after hearing the persons interested in the cargo who may be present. If the latter shall object, and the captain and officers or a majority of them, or the captain, if opposed to the majority, should consider certain measures necessary, they may be executed under his responsibility, without prejudice to the right of the shippers to proceed against the captain before the competent judge or court, if they can prove that he acted with malice, lack of skill, or negligence. If the persons interested in the cargo, being on board the vessel, have not been heard, they shall not contribute to the gross average, their share being chargeable against the captain, unless the urgency of the case should be such that the time necessary for previous deliberations was wanting. CComm, 814. The resolution adopted to cause the damages which constitute general average must necessarily be entered in the log book, stating the motives and reasons for the dissent, should there be any, and the irresistible and urgent causes which impelled the captain if he acted of his own accord. In the first case the minutes shall be signed by all the persons present who could do so before taking action, if possible; and if not, at the first opportunity. In the second case, it shall be signed by the captain and by the officers of the vessel. In the minutes, and after the resolution, shall be stated in detail all the goods jettisoned, and mention shall be made of the injuries caused to those kept on board. The captain shall be obliged to deliver one copy of these minutes to the maritime judicial authority of the first port he may make, within twenty-four hours after his arrival, and to ratify it immediately under oath. CComm, 860. If, notwithstanding the jettison of merchandise, breakage of masts, ropes, and equipment, the vessel shall be lost running the same risk, no contribution whatsoever by jettison of gross average shall be proper. The owners of the goods saved shall not be liable for the indemnification of those jettisoned, lost, or damaged. Formalities for incurring gross average: 1. there must be an assembly of the sailing mate and other officers with the captain including those with interests in the cargo 2. there must be a resolution of the captain 3. the resolution shall be entered in the log book, with the reasons and motives and the votes for and against the resolution 4. the minutes shall be signed by the parties 5. within 24 hours upon arrival at the first port the captain makes, he shall deliver one copy of these minutes to the maritime judicial authority thereat Magsaysay Inc v. Agan. In classifying averages into simple or particular and general or gross and defining each class, the Code of Commerce at the same time enumerate certain specific cases as coming specially under one or the other class. While the expenses incurred in putting the vessel afloat may well come under No. 2 of Art. 809 - referring to expenses suffered by the vessel due to an accident of the sea or force majeure- said expenses do not fit into any of the specific cases of general average enumerated in ART. 811. No. 6 of Art. 811 mentions expenses caused to afloat a vessel, but it specifically refers to a vessel intentionally stranded for the purpose of saving it, and would have no application where the stranding was unintentional. || The following are the requisites for a general average: 1) there must be common danger, 2) for the common safety part of the vessel or cargo or both is sacrificed deliberately, 3) from the expenses or damages caused follows the successful saving of the vessel and cargo, and 4) the expenses or damages should have been incurred or inflicted after taking the proper legal steps and authority. || It is the deliverance from an immediate peril, by reason of a common sacrifice, that constitutes the essence of a general average. Where there is no proof that the stranded vessel had to be put afloat to save it from imminent danger, and what does appear is that the vessel had to be salvaged in order to enable it to proceed to its port of destination, the expenses incurred in floating the vessel do not constitute general average. It is the safety of the property, and not of the voyage which constitutes the true foundation of general average. Effects CComm, 812. In order to satisfy the amount of the gross or general averages, all the persons having an interest in the vessel and cargo therein at the time of the occurrence of the average shall contribute. Jettison CComm, 815. The captain shall direct the jettison, and shall order the goods cast overboard in the following order: 1. Those which are on deck, beginning with those which embarrass the maneuver or damage of the vessel, preferring, if possible, the heaviest ones with the least utility and value. 2. Those which are below the upper deck, always beginning with those of the greatest weight and smallest value, to the amount and number absolutely indispensable. CComm, 816. In order that the goods jettisoned may be included in the gross average and the owners thereof be entitled to indemnity, it shall be necessary insofar as the cargo is concerned that their existence on board be proven by means of the bill of lading; and with regard to those belonging to the vessel, by means of the inventory prepared before the departure in accordance with the first paragraph of Article 812. Jason Clauses (See York-Antwerp Rules, Rule D) Rights to contribution in general average shall not be affected, though the event which gave rise to the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure; but this shall not prejudice any remedies which may be open against that party for such fault.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines (b) Proof and liquidation of averages (1) Modes CComm, 846. Those interested in the proof and liquidation of averages may mutually agree and bind themselves at any time with regard to the liability, liquidation, and payment thereof. In the absence of agreements, the following rules shall be observed: 1. The proof of the average shall take place in the port where the repairs are made, should any be necessary, or in the port of unloading. 2. The liquidation shall be made in the port of unloading, if it is a Philippine port. 3. If the average occurred outside of the jurisdictional waters of the Philippines, or the cargo has been sold in a foreign port by reason of an arrival under stress, the liquidation shall be made in the port of arrival. 4. If the average has occurred near the port of destination, so that said port can be made, the proceedings mentioned in Rules 1 and 2 shall be held there. CComm, 847. In the case where the liquidation of the averages is made privately by virtue of agreement, as well as when a judicial authority intervened at the request of any of the parties interested who do not agree thereto, all of them shall be cited, and heard, should they not have renounced this right. Should they not be present or should the have no legal representative, the liquidation shall be made by the Consul in a foreign port, and where there is none, by the competent judge or court, according to the laws of the country and for the account of the proper party. When the representative is a person well known in the place where the liquidation is made, his intervention shall be admitted and shall produce legal effects, even though he be authorized only by a letter of the ship agent, the shipper, or the insurer. CComm, 848. Claims for averages shall not be admitted if they do not exceed 5 per cent of the interest which the claimant may have in the vessel or in the cargo if it be gross average and 1 per cent of the goods damaged if particular average, deducting in both cases the expenses of appraisal, unless there is an agreement to the country. (2) Appraisal of general average CComm, 850. If by reason of one or more accidents of the sea, particular and gross averages of the vessel, of the cargo, or of both, should take place on the same voyage, the expenses and damages corresponding to each average shall be determined separately in the port where the repairs are made, or where the merchandise are discharged, sold, or utilized. For this purpose the captains shall be obliged to demand of the expert appraisers and of the contractors making the repairs, as well as of those appraising and taking part in the unloading, repair, sale, or utilization of the merchandise, that in their appraisements or estimates and accounts they set down separately and accurately the expenses and damages pertaining to each average, and in those of each average those corresponding to the vessel and to the cargo, also stating separately whether or not there are damages proceeding from inherent defect of the thing and not from accident of the sea; and in case there should be expenses common to the different averages and to the vessel and its cargo, the amount corresponding to each must be estimated and stated distinctly. CComm, 851. At the instance of the captain, the adjustment, liquidation, and distribution of gross averages shall be held privately, with the consent of all the parties in interest. For this purpose, within forty-eight hours following the arrival of the vessel at the port, the captain shall convene all the person interested in order that they may decide as to whether the adjustment or liquidation of the gross average is to be made by experts and liquidators appointed by themselves, in which case it shall so done if the interested parties agree. If an agreement is not possible, the captain shall apply to the competent judge or court, who shall be the one in the port where these proceedings are to be held in accordance with the provisions of this code, or to the consul of the Republic of the Philippines should there be one, and should there be none, to the local authority when they are to be held in a foreign port. CComm, 852. If the captain does not comply with the provisions of the preceding article, the ship agent or the shippers shall demand the liquidation without prejudice to the action they may bring to demand indemnity from him. CComm, 853. After the experts have been appointed by the persons interested, or by the court, and after the acceptance, they shall proceed to the examination of the vessel and of the repairs required and to the appraisal of their cost, separating these losses and damages from those arising from the inherent defect of the things. The experts shall also declare whether the repairs may be made immediately, or whether it is necessary to unload the vessel in order to examine and repair it. With regard to the merchandise, if the average should be visible at a mere glance, the examination thereof must be made before they are delivered. Should it not be visible at the time of unloading, said examination may be made after the delivery, provided that it is done within forty-eight hours from the unloading and without prejudice to the other proofs which the experts may deem proper. CComm, 854. The valuation of the objects which are to contribute to the gross average, and that of those which constitute the average, shall be subject to the following rules: 1. The merchandise saved which are to contribute to the payment of the gross average shall be valued at the current price at the port of unloading, deducting the freightage, customs duties, and expenses of unloading, as may appear from a material inspection of the same, without taking the bills of lading into consideration unless there is an agreement to the contrary. 2. If the liquidation is to be made in the port of departure, the value of the merchandise loaded shall be determined by the purchase price, including the expenses until they are placed on board, the insurance premium excluded. 3. If the merchandise should be damaged, they shall be appraised at their true value. 4. If the voyage having been interrupted, the merchandise should have been sold in a foreign port, and the average cannot be estimated, the value of the merchandise in the port of arrival, or the net proceeds obtained at the sale thereof, shall be taken as the contributing capital. 5. Merchandise lost, which constitute the gross average, shall be appraised at the value which merchandise of its kind may have in the port of unloading, provided that its kind and quality appear in the bill of lading; and should they not appear, the value shall be that stated in the invoices of the purchase issued in the port of shipment, adding thereto the expenses and freightage subsequently arising.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines 6. The masts cut down, the sails, cables, and other equipment of the vessel rendered useless for the purpose of saying it, shall be appraised at the current value, deducting one-third by reason of the difference between new and old. This deduction shall not be made with respect to anchors and chains. 7. The vessel shall be appraised at its true value in the condition in which it is found. 8. The freightage shall represent 50 per cent by way of contributing capital. CComm, 855. The merchandise loaded on the upper deck of the vessel shall contribute to the gross average should they be saved; but there shall be no right to indemnity if they should be lost by reason of having been jettisoned for common safety, except when the marine ordinances allow their shipment in this manner in coastwise navigation. The same shall take place with that which is on board and is not included in the bills of lading or inventories, according to the cases. In any case the shipowner and the captain shall be liable to the shippers for the damages from the jettison, if the storage on the upper deck was made without the consent of the latter. The goods may be stowed on deck (1) with the consent of the shipper or (2) without his consent if stowed on deck with his consent, he takes the risk upon himself of the perils arising from the dangers of the sea and any damage will be borne by the owner [particular average] if stowed on deck without his consent, the captain does so at his own risk; the captain cannot protect himself by showing that they are damaged or lost by dangers of the sea The carriage of gasoline on deck by coastwise or interisland vessels is allowed by marine regulations the loss of petroleum for common safety and benefit will constitute a general average. CComm, 857. After the appraisement of the goods saved and of those lost which constitute the gross average, has been concluded by the experts, the repairs, if any, made on the vessel, and in this case, the accounts of the same approved by the persons interested or by the judge or court, the entire record shall be turn over to the liquidator appointed, in order that he may proceed with the distribution of the average. (3) Liquidation of general average CComm, 858. In order to effect the liquidation, the liquidator shall examine the protest of the captain, comparing it, if necessary, with the log book, and all the contracts which may have been made among the persons interested in the average, the appraisements, expert examinations, and accounts of repairs made. If, as a result of this examination, he should find any defect in the procedure which might injure the rights of the person interested or affect the liability of the captain, he shall call attention thereof in order that it may be corrected, if possible, and otherwise he shall include it in the exordial of the liquidation. Immediately thereafter he shall proceed with the distribution of the amount of the average, for which purpose he shall fix: 1. The contributing capital, which he shall determine by the value of the cargo, in accordance with the rules established in Article 854. 2. That of the vessel in her actual condition, according to the statement of experts. 3. The 50 per cent of the amount of the freightage, deducting the remaining 50 per cent for wages and maintenance of the crew. After the amount of the gross average has been determined in accordance with the provisions of this Code, it shall be distributed pro rata among the goods which are to cover the same. CComm, 865. The distribution of the gross average shall not be final until it has been agreed to, or in the absence thereof, until it has been approved by the judge or court, after an examination of the liquidation and a hearing of the persons interested who may be present or of their representatives. CComm, 866. After the liquidation has been approved, it shall be the duty of the captain to collect the amount of the contributions, and he shall be liable to the owners of the goods averaged for the damages they may suffer through his delay or negligence. CComm, 867. If the person contributing should not pay the amount of the contribution at the end of the third day after having been required to do so, the goods saved shall be proceeded against, in the request of the captain, until payment has been made from their proceeds. CComm, 868. If the person interested in receiving the goods saved should not give security sufficient to answer for the amount corresponding to the gross average, the captain may defer the delivery thereof until payment has been made. CComm, 869. The experts whom the court or the person interested may appoint, as the case may be, shall proceed with the examination and appraisement of the averages in the manner prescribed in Articles 853 and 854, Rules 2 to 7, insofar as they are applicable. Liquidation of particular average CComm, 869, supra. Arrival under Stress Arrival of a 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 : (1) lack of provisions, (2) well-founded fear of seizure, privateers, or pirates, (3) by reason of any accident of the sea disabling it to navigate (a) Causes CComm, 819. If during the voyage the captain should believe that the vessel can not continue the trip to the port of destination on account of the lack of provisions, well-founded fear of seizure, privateers, or pirates, or by reason of any accident of the sea disabling it to navigate, he shall assemble the officers and shall summon the persons interested in the cargo who may be present, and who may attend the meeting without the right to vote; and if, after examining the circumstances of the case, the reason should be considered wellfounded, the arrival at the nearest and most convenient port shall be agreed upon, drafting and entering the proper minutes, which shall be signed by all, in the log book. The captain shall have the deciding vote, and the persons interested in the cargo, may make the objections and protests they may deem proper, which shall be entered in the minutes in order that they may make use thereof in the manner they may consider advisable. CComm, 820. An arrival shall not be considered lawful in the following cases: 1. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage according to usage and customs, or if they should have been rendered useless or lost through bad stowage or negligence in their care. 2. If the risk of enemies, privateers, or pirates should not have been well known, manifest, and based on positive and provable facts.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines 3. If the defect of the vessel should have arisen from the fact that it was not repaired, rigged, equipped, and prepared in a manner suitable for the voyage, or from some erroneous order of the captain. 4. When malice, negligence, want of foresight, or lack of skill on the part of the captain exists in the act causing the damage. (b) Formalities CComm, 819, supra. CComm, 822. If in order to make repairs to the vessel or because there is danger that the cargo may suffer damage, it should be necessary to unload, the captain must request authorization from the competent judge or court for the removal, and carry it out with the knowledge of the person interested in the cargo, or his representative, should there be any. In a foreign port, it shall be the duty, of the Philippine Consul, where there is one, to give the authorization. In the first case, the expenses shall be for the account of the ship agent or owner, and in the second, they shall be chargeable against the owners of the merchandise for whose benefit the act was performed. If the unloading should take place for both reasons, the expenses shall be divided proportionately between the value of the vessel and that of the cargo. Formalities: 1. assembly of the officers including all interested parties; 2. drafting and entering in the log book the proper minutes, which shall be signed by all 3. entry in the log book of the objections and protests of the persons interested in the cargo (c) Expenses CComm, 821. The expenses of an arrival under stress shall always be for the account of the shipowner or agent, but they shall not be liable for the damages which may be caused the shippers by reason of the arrival provided the latter is legitimate. Otherwise, the ship agent and the captain shall be jointly liable. CComm, 822, supra. Requisites for the captain to unload the cargo arriving under stress: 1. the unloading must be necessary to make repairs or there must be danger that the cargo may suffer damage 2. the captain must be authorized by either a competent court or the Phil. consul, depending on the port of arrival (d) Responsibility of Captain CComm, 823. The custody and preservation of the cargo which has been unloaded shall be intrusted to the captain, who shall be responsible for the same, except in cases of force majeure. CComm, 824. If the entire cargo or part thereof should appear to be damaged, or there should be imminent danger of its being damaged, the captain may request of the competent judge or court, or of the consul in a proper case, the sale of all or of part of the former, and the person taking cognizance of the matter shall authorize it, after an examination and declaration of experts, advertisements, and other formalities required by the case, and an entry in the book, in accordance with the provisions of Article 624. The captain shall, in a proper case, justify the legality of his conduct, under the penalty of answering to the shipper for the price the merchandise would have brought if they had arrived in good condition at the port of destination. CComm, 825. The captain shall be responsible for the damages caused by his delay, if after the cause of the arrival under stress has ceased, he should not continue the voyage. If the cause of arrival should have been the fear of enemies, privateers, or pirates, a deliberation and resolution in a meeting of the officers of the vessel and persons interested in the cargo who may be present, in accordance with the provisions contained in Article 819, shall precede the departure. The captain has the duty to continue the voyage without delay after the cause of the arrival under stress has ceased--> otherwise, he shall be liable for damages caused by the delay Collisions Collision: impact of two vessels both of which are moving Allision: striking of a moving vessel against one that is stationary Cases of collision: 1. due to the fault, negligence or lack of skill of the captain, sailing mate or the complement of the vessel --> under 826, the shipowner shall be liable for the losses and damages 2. due to the fault of both vessels --> under 827, each vessel shall suffer its own losses, but as regards the owners of the cargoes, both vessels shall be jointly and severally liable 3. where it cannot be determined which of the 2 vessels is at fault --> under 828, each vessel shall suffer its own losses, and both shall also be solidarily responsible for the losses and damages caused to their cargoes 4. collision due to fortuitous event or force majeure --> under 830, each vessel shall bear its own damages 5. where two vessels collide with each other without their fault but by reason of the fault of a third vessel --> under 831, the owner of the third vessel causing the collision shall be liable for the losses and damages 6. a vessel which is properly anchored and moored may collide with those nearby by reason of a storm or other cause of force majeure --> under 832, the vessel run into shall suffer its own damages and expenses Nautical Rules to determine negligence: 1. When 2 vessels are about to enter a port, the farther one must allow the nearer to enter first; if they collide, the fault is presumed to be imputable to the one who arrived later, unless it can be proved that there was no fault on its part. 2. When 2 vessels meet, the smaller should give the right of way to the larger one. 3. A vessel leaving port should leave the way clear for another which may be entering the same port. 4. The vessel which leaves later is presumed to have collided against one who has left earlier. 5. There is also a presumption against the vessel which sets sail at night. 6. The presumption also works against the vessel with spread sails which collides with another which is at anchor, and cannot move, even when the crew of the latter has received word to lift anchor, when there was not sufficient time to do so or there was fear of a greater damage or other legitimate reason. 7. The vessel which is not properly moored or does not observe the proper distances, has the presumption against itself. 8. The vessel which is moored at a place not used for the purpose, or which is improperly moored or does not have sufficient cables, or which has been left without watch, has also against itself the presumption.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines 9. The same rule applies to those vessels which do not have buoys to indicate the location of its anchors to prevent damage to these vessels which may approach it. Zones in time of collisions (3 time zones): 1. all the time up to the moment when the risk of collision may have said to have begun within this zone, no rule is applicable because none is necessary. Each vessel is free to direct its course as it deems best with reference to the movements of the other vessel. 2. the time between the moment when the risk of collission begins and the moment when it has become a practical necessity. 3. the time between the moment when collision has become a practical certainty and the moment of actual contact Effect of fault of privileged vessel during third zone: 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. Thus, it has been held that fault on the part of the sailing vessel at the moment preceding a collision, that is, during the third division of time, does not absolve the steamship which has suffered herself and a sailing vessel to get into such dangerous proximity as to cause inevitable harm and confusion, and a collision results as a consequence. The steamer having a far greater fault in allowing such proximity to be brought about is chargeable with all the damages resulting from the collision; and the act of the sailing vessel having been done in extremis and even wrong, is not responsible for the result. (a) Classes and Effects (1) Fortuitous CComm, 830. If a vessel should collide with another, through fortuitous event or force majeure, each vessel and its cargo shall bear its own damages. CComm, 832. If by reason of a storm or other cause of force majeure, a vessel which is properly anchored and moored should collide with those nearby, causing them damages, the injury occasioned shall be considered as particular average of the vessel run into. (2) Culpable CComm, 826. If a vessel should collide with another, through or the fault, negligence, or lack of skill of the captain, sailing mate, or any other member of the complement, the owner of the vessel at fault shall indemnify the losses and damages suffered, after an expert appraisal. Where the obligation arises from tortious act and not from contract, both the owner and the shipagent should be declared liable CComm, 827. If the collision is imputable to both vessels, each one shall suffer its own damages, and both shall be solidarily responsible for the losses and damages occasioned to their cargoes. Defense of due diligence of a good father of a family in the selection and vigilance of the officers and crew cannot be used to render nugatory the solidary liability under 827 Under the express provisions of 827, the shipowners cannot successfully maintain an action against the other for the loss or injury to his vessel CComm, 831. If a vessel should be forced by a third vessel to collide with another, the owner of the third vessel shall indemnify the losses and damages caused, the captain thereof being civilly liable to said owner. (3) Inscrutable Fault CComm, 828. The provisions of the preceding article are applicable to the use in which it cannot be determined which of the two vessels has caused the collision. Relation of Art. 827 to Art. 828 Art. 828 must be considered an extension of Art. 827 The rule of liability under Art. 827 is applicable not only to the case where both vessels may be shown to be actually blameworthy but also to the case where it is obvious that only one was at fault but the proof does not show which Under Arts. 827 and 828, in case of collision between two vessels at sea, both are solidarily liable for the loss of cargo carried by either to the full extent of the value thereof, not only in the cse where both vessels may be shown to be actually blameworthy but also in the case where it is shown that only one ws at fault but the proof does not show it --> it makes no difference that the negligence imputable to the two vessels may have differed somewhat in character and degree and that the negligence of the sunken ship was somewhat more marked than that of the ther The doctrine of last clear chance cannot be raised --> under the express provisions of Art. 827, under which the evidence disclosing that both vessels are blameworthy, the owners of neither can successfully maintain an action against the other for the loss or injury to his vessel (b) Presumption of loss by collision CComm, 823. The custody and preservation of the cargo which has been unloaded shall be intrusted to the captain, who shall be responsible for the same, except in cases of force majeure. (c) Liabilities (1) Shipowner or agent CComm, 837. The civil liability incurred by the shipowners in the case prescribed in this section, shall be understood as limited to the value of the vessel with all its appurtenances and freightage earned during the voyage. CComm, 838. When the value of the vessel and her appurtenances should not be sufficient to cover all the liabilities, the indemnity due by reason of the death or injury of persons shall have preference. (2) Captain, pilot, others CComm, 829. In the cases above mentioned the civil action of the owner against the person causing the injury as well as the criminal liabilities, which may be proper, are reserved. CComm, 834. If the vessels colliding with each other should have pilots on board discharging their duties at the time of the collision, their presence shall not exempt the captains from the liabilities they incur, but the latter shall have the right to be indemnified by the pilots, without prejudice to the criminal liability which the latter may incur. (3) Conditions, protests CComm, 835. The action for the recovery of losses and damages arising from collisions cannot be admitted if a protest or declaration is not presented within twenty-four hours before the competent authority of the point where the collision took place, or that of the first port of arrival of the vessel, if in Philippine territory, and to the consul of the Republic of the Philippines if it occurred in a foreign country.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CComm, 836. With respect to damages caused to persons or to the cargo, the absence of protest may not prejudice the persons interested who were not on board or were not in a condition to make known their wishes. CComm, 839. If the collision should take place between Philippine vessels in foreign waters, or if having taken place in the open seas, and the vessels should make a foreign port, the Consul of the Republic of the Philippines in said port shall hold a summary investigation of the accident, forwarding the proceedings to the Secretary of the Department of Foreign Affairs for continuation and conclusion. Art. 835 establishes a condition precedent before any action for the recovery of damages arising from collisions may be admitted --> presentation of a protest or declaration within 24 hours before the proper authorities [competent authority at the point where the collision took place or of the first port of arrival of the vessel or to the consul of the Philippines if it occurred in a foreign country] The requirement of protest is not necessary with respect to small boats engaged in river and bay traffic and boats manned by a group of fishermen Reason for requiring protest: Necessity of preventing fictitious collisions and improper indemnities Summary of cases where protest is required: 1. under 612, when the vessel makes an arrival under stress 2. under 612, 624 and 843, where the vessel is shipwrecked 3. under 624, where the vessel has gone through a hurricane or when the captain believes that the cargo has suffered damages or averages 4. under 835, in case of maritime collisions Shipwrecks CComm, 840. The losses and deteriorations suffered by a vessel and her cargo by reason of shipwreck or stranding shall be individually for the account of the owners, the part which may be saved belonging to them in the same proportion. CComm, 841. If the wreck or stranding should be caused by the malice, negligence, or lack of skill of the captain, or because the vessel put to sea was insufficiently repaired and equipped, the ship agent or the shippers may demand indemnity of the captain for the damages caused to the vessel or to the cargo by the accident, in accordance with the provisions contained in Articles 610, 612, 614, and 621. Shipwreck: Loss of a vessel at sea, either by being swallowed up by the waves, by running against another vessel or thing at sea, or on coast --> renders the ship incapable of navigation Under 841, in case the wreck or stranding is due to the (1) malice, negligence, or lack of skill of the captain, or (2) because the vessel put to sea was insufficiently repaired and equipped, the captain shall be liable CComm 842. The goods saved from the wreck shall be specially bound for the payment of the expenses of the respective salvage, and the amount thereof must be paid by the owners of the former before they are delivered to them, and with preference over any other obligation if the merchandise should be sold. Where a ship and its cargo are saved together, the salvage allowance should be charged against the ship and cargo in proportion of their respective values, the same as in general averages and neither is liable for the salvage due from the other Where a personal action is brought by the salvor against the owner of the ship, the liability of the latter is limited to such part of the salvage compensation due for the entire service as is proportionate to the value of the ship CComm, 843. If several vessels sail under convoy, and any of them should be wrecked, the cargo saved shall be distributed among the rest in proportion to the amount which each one is able to take. If any captain should refuse, without sufficient cause, to receive what may correspond to him, the captain of the wrecked vessel shall enter a protest against him, before two sea officials, of the losses and damages resulting therefrom, ratifying the protest within twenty-four hours after arrival at the first port, and including it in the proceedings he must institute in accordance with the provisions contained in Article 612. If it is not possible to transfer to the other vessels the entire cargo of the vessel wrecked, the goods of the highest value and smallest volume shall be saved first, the designation thereof to be made by the captain with the concurrence of the officers of his vessel. (a) Salvage Law [Act No. 2616] Salvage.-- The compensation allowed to persons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from impending sea peril, or such property recovered from actual peril or loss, as in cases of shipwrecks, derelict or recapture -- a service which one person, renders to the owner of a ship or goods by his own labor, preserving the goods or ship which the owner or those entrusted with the care of them either abandoned in distress at sea or are unable to protect and secure ---> a permit is required to engage in salvage business Shipwreck-- means a ship which has received injuries rendering her incapable by navigation; loss of a vessel at sea, either by being swallowed up by the waves, running against a thing at sea, or on the coast Derelict.-- A ship or her cargo which is abandoned and deserted at sea by those who are in charge of it, without any hope of recovering it, or without any intention of returning it --> if those in charge of the property left it with the intention of finally leaving it, it is a derelict and the change of their intention and an attempt to return to it will not change its nature ex. a schooner which has capsized in the high seas, deserted by her captain with no intention to return, is a derelict a vessel, though not abandoned, may be the subject of salvage, if at the time the services were rendered, there was a probable, threatening danger to the vessel or its cargo --> if the vessel towed is aided in escaping present or prospective danger, the service is one of salvage an the towage is merely incidental Rights of finder of derelict: The finder who takes possession with the intention of saving her, gains a right of possession which he can maintain against the true owners. The owner does not renounce his right of property. This is not presumed to be intentional, nor does the finder acquire any such right. But the owner thus abandons temporarily, his right of possession, which is transferred to the finder who becomes bound to preserve the property with GF and bring it to a place of safety for the owner's use; in return, he acquires a right to be paid for his service a reasonable and proper compensation out of the property itself. He is not bound to part with the possession until he is paid or the property is taken into the possession of the law preparatory to the amount of salvage being legally asserted Elements of a valid salvage: 1. a marine peril 2. service voluntarily rendered when not required as an existing duty or from special contract 3. success, in whole or in part, or that the services rendered contributed to such success
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4. Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines Distinction between salvage and towage is of importance to the crew of the salvaging ship : if the contract for towage is in fact towage, then the crew does not have any interest or rights with the renumeration pursuant to the contract; BUT if the owners of the respective vessels are of a salvage nature, the crew of the salvaging ship is entitled to salvage, and can look to the salvaged vessel for its share
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Captain towing vessel cannot invoke equity in quasi-contract of towage --> there is an express provision of law (Art. 2142, NCC) applicable to the relationship of quasi-contract of towage, where the crew is not entitled to compensation separate from that of the vessel Salvor has an interest in the property; this is called a lien, but it is not a debt due by the owner to the salvor for services rendered but upon the principle that the service creates a property in the thing saved --> he is, to all intents and purposes, a joint owner and if, the property is lost he must bear his share like other joint owners. Payment of compensation where vessel and cargo salvage : where a ship and its cargo are saved together, the salvage allowance should be charged against the ship and cargo in the proportion of their respective values, as in the case of general average Kinds of salvage service: (1) voluntary - wherein the compensation is dependent upon success (2) rendered under a contract for a pier diem or per horam wage, payable at all events Where the compensation is dependent upon success, it may be very much larger than mere quantum meruit --> as a reward for perilous services Such contracts for salvage will not be set aside unless corruptly entered into, or made under fraudulent representations, a clear mistake or suppression of important facts, under compulsion or contrary to equity and good conscience Reasons for allowing salvage compensation to salving vessel: (1) to reward promptness, energy, efficiency, and heroic endeavor in saving life and property in peril; (2) to compensate the use and service of the vessel as an indispensable instrument for the salvage; (3) recognizes the danger and risk to which the crew and the vessel were exposed to in saving the ship and property and life. The amount should be liberal enough to cover the expenses and to give an extra sum as a reward for the services rendered; should be liberal enough to offer an inducement to others to render like services in similar emergencies in the future; BUT should not be so high as to cause vessels in need of assistance to hesitate because of ruinous cost No other person has the right to interfere with the salvage of a vessel or cargo if the salvor is able to effect the salvage with fidelity and vigor --> if their means are inadequate, they are bound to accept additional assistance if offered Taking passengers from a sinking ship, without rendering any service in rescuing the vessel, is not a salvage service, being a duty of humanity and not for reward --> the Salvage Act, giving salvors of human life a fair share or remuneration offered to salvors of the vessel, refers to a situation where both lives and property were simultaneously imperiled and both are rescued at the same time The owner of the salving vessel has always been considered as entitled to salvage reward for the use of his vessel in rendering salvage services, though he was not present when the salvage service was rendered --> remuneration is awarded on account of the danger to which the service exposes their property and the risk which they run of loss in suffering their vessels engaged in such perilous undertaking. Barrios v. Go Thong. Although defendant's vessel was in a helpless condition due to engine failure, it did not drift too far from the place where it was. As found by the LC, the weather was fair, clear and good. The waves were small and too slight, so much so, that there were only ripples on the sea, which was quite smooth. During the towing of the vessel on the same night, there was moonlight. Although said vessel was drifting towards the open sea, there was no danger of its foundering or being stranded, as it was far from any island or rocks. In case of danger of stranding, its anchor could be released, to prevent such occurrence. There was no danger that defendant's vessel would sink, in view of the smoothness of the sea and the fairness of the weather. That there was absence of danger is shown by the fact that said vessel or its crew did not even find it necessary to lower its launch and two motor boats, in order to evacuate its passengers no were the cargo in danger of perishing. All that the vessel's crew members could no do was to move the vessel on its own power. That did not make the vessel a quasi-derelict, considering that even before the plaintiff-appellant extended the help to the distressed ship, a sister vessel was known to be on its way to succor it. Special Contracts of Maritime Commerce 1. Charter Parties a. Definition A charter party is a contract by virtue of which the owner or agent of a vessel binds himself to transport merchandise or persons for a fixed price. It is a contract by which the owner or agent of the vessel leases for a certain price the whole or a portion of the vessel for the transportation of goods or persons from one port to another. Towage is not a charter party; instead it is a contract for the hire of services by virtue of which a vessel is engaged to tow another vessel from one port to another for a consideration b. Kinds Classes of charter party: (1) as to extent of vessel hired (a) Total partial - the charterer does not as a rule acquire the right to fix the date when the vessel should depart, unless such right is expressly granted in the contract (2) as to time (a) until a fixed day or for a determined number of days or month (b) for a voyage (3) as to freightage (a) for a fixed amount for the whole cargo (b) for a fixed rate per ton (c) for so much per month PPI v. CA. A charter-party is a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use. There are 2 kinds: (1) contract of affreightment which involves the use of shipping space or vessels leased by the
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines owner in part or as a whole, to carry goods for others; and (2) charter by demise or bareboat charter where the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and the crew, who are his servants. || It is not disputed that the carrier operates as a CC in the ordinary course of business. When PPI chartered the vessel, the ship captain, its officers and crew were under the employ of the shipowner and therefore continued to be under its direct supervision and control. Thus it continued to be a public carrier. || It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel, provided the charter is limited to the ship only, as in the case of a time-charter or a voyage-charter. It is only when the charter includes both the vessel and the crew, as in a bareboat or demise that a CC becomes private, insofar as such particular voyage is concerned. Coastwise Lighterage v. CA. Bareboat charter and contract of affreightment, difference; Coastwise, by the contract of affreightment, was not converted into a private carrier, but remained a common carrier.-- Under the demise or bareboat charter of the vessel, the charterer will generally be regarded as the owner of the voyage or service stipulated. The charterer mans the vessel w/ his own people and becomes the owner pro hac vice, subject to liability to others for damages caused by negligence. To create a demise, the owner of a vessel must completely and exclusively relinquish possession, command and navigation thereof to the charterer; anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all. || A contract of affreightment is one in w/c the owner of the vessel leases part or all of its space to haul goods for others. It is a contract for special service to be rendered by the owner of the vessel and under such contract the general owner retains the possession, command and navigation of the ships, the charterer or freighter merely having use of the space in the vessel in return for his payment of the charter hire. || Although a charter party may transform a common carrier into a private one, the same, however, is not true in a contract of affreightment on account of the aforementioned distinctions bet. the two.|| Petitioner admits that the contract it entered into w/ the consignee was one of afreightment. We agree. Pag-asa only leased 3 of petitioner's vessels, in order to carry cargo from one point to another, but the possession, command and navigation of the vessels remained w/ petitioner Forms and effects CComm, 652. A charter party must be drawn in duplicate and signed by the contracting parties, and when either does not know how or is not able to do so, by two witnesses at his request. The charter party shall contain, besides the conditions freely stipulated, the following circumstances: 1. The kind, name, and tonnage of the vessel. 2. Its flag and port of registry. 3. The name, surname, and domicile of the captain. 4. The name, surname, and domicile of the ship agent, if the latter should make the charter party. 5. The name, surname, and domicile of the charterer; and if he states that he is acting by commission, that of the person for whose account he makes the contract. 6. The port of loading and unloading. 7. The capacity, number of tons or the weight or measurement which they respectively bind themselves to load and to transport, or whether the charter party is total. 8. The freightage to be paid, stating whether it is to be a fixed amount for the voyage or so much per month, or for the space to be occupied, or for the weight or measure of the goods of which the cargo consists, or in any other manner whatsoever agreed upon. 9. The amount of primage to be paid to the captain. 10. The days agreed upon for loading and unloading. 11. The lay days and extra lay days to be allowed and the demurrage to be paid for each of them. CComm, 653. If the cargo should be received without the charter party having been signed, the contract shall be understood as executed in accordance with what 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, of the captain, and of the charterer. If the cargo is received without a charter party, the B/L shall be considered the contract of the parties Q: If there is no charter party and B/L, would there be a valid contract? A: Taking Art. 653 literally, the answer is no. However, if we take into account the fact that delivery of the cargo does not constitute the making of a contract but rather the partial performance thereof, the mere fact of delivery and receipt of such cargo, the GF and mutual consent with which they have been made, should be a better substitute for the charter party than is the B/L which is nothing more than the proof of such delivery. Primage.-- Formerly, a small allowance or compensation payable to the master and marines of a ship; to the former for the use of his cables and ropes to discharge the goods of the merchant; to the latter for lading and unlading in any port of haven Primage, at present, it is no longer a gratuity to the master, unless especially stipulated; but it belongs to owners or freighters and is nothing but an increase of the freight rate. Demurrage.-- Sum which is fixed by the contract of carriage, or which is allowed, as remuneration to the owner of a ship for the detention of his vessel beyond the number of days allowed by the charter party for loading and unloading or for sailing; it is an extended freight or reward to the vessel in compensation for the earnings she is improperly caused to lose Lay days.-- Days allowed to charter parties for loading and unloading the cargo CComm, 654. The charter parties executed with the intervention of a broker, who certifies to the authenticity of the signatures of the contracting parties because they were signed in his presence, shall be full evidence in court; and if they should be conflicting, that which accords with one which the broker must keep in his registry, if kept in accordance with law, shall govern. The contracts shall also be admitted as evidence, even though a broker has not taken part therein, if the contracting parties acknowledge the signatures to be the same as their own. If no broker has intervened in the charter party and the signatures are not acknowledged, doubts shall be decided by what is provided for in the bill of lading and in the absence thereof, by the proofs submitted by the parties.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CComm, 655. Charter parties executed by the captain in the absence of the ship agent shall be valid and effective, even though in executing them he should have acted in violation of the orders and instructions of the ship agent or shipowner; but the latter shall have a right of action against the captain for indemnification of damages. CComm, 656. If in the charter party the time in which the loading and unloading are to take place is not stated, the usages of the port where these acts take place shall be observed. After the stipulated or the customary period has passed, and there is no express proviso in the charter party fixing the indemnity for the delay, the captain shall be entitled to demand demurrage for the lay days and extra lay days which may have elapsed in loading and unloading. CComm, 657. If during the voyage the vessel should be rendered unseaworthy, the captain shall be obliged to charter at his expense another one in good condition to receive the cargo and carry it to its destination, for which purpose he shall be obliged to look for a vessel not only at the port of arrival but also in the neighborhood within distance of 150 kilometers. If the captain, through indolence or malice, should not furnish a vessel to its destination, the shippers, after requiring the captain to charter a vessel within an inextendible period, may charter one and petition the judicial authority to summarily approve the charter party which they may have made. The same authority shall judicially ("por la via de appremio") compel the captain, to carry out, for his account and under his responsibility, the charter made by the shippers. If the captain, notwithstanding his diligence, should not find a vessel for the charter, he shall deposit the cargo at the disposal of the shippers, to whom he shall communicate the facts on the first opportunity which presents itself, the freight being adjusted in such cases by the distance covered by the vessel, with no right to any indemnification whatsoever. Articles 659 to 664 : Some of the goods being transported may : (1) be sold by the captain to pay for necessary repairs; (2) be jettisoned for the common safety; (3) be lost by reason of shipwreck or stranding; (4) be seized by pirates or enemies; (5) suffer deteriorations or dimunitions; or (6) increase by natural cause in weight or size ** Goods that shall not pay freightage: Art. 660 - goods jettisoned for the common safety but the amount of freightage that should have been paid shall be considered as a general average and shall be computed in proportion to the distance covered when they were jettisoned Art. 661 - merchandise lost by reason of shipwreck or stranding; if freight had been paid in advance, it shall be returned Art. 661 - goods seized by pirates or enemies; freight paid in advance shall be returned ** Goods required to pay freightage: Art. 659 - goods sold by the captain to pay for the necessary repairs to the hull, machinery or equipment or for unavoidable and urgent needs --> but the freight may not be required to be paid in full Art. 663 - goods which suffer deterioration or dimunition on account of (a) inherent defects or bad quality of packing, or of (b) fortuitous event Art. 644 - goods that increase in size or weight by natural cause Rights and obligations of shipowners CComm, 669. The shipowner or the captain shall observe in charter parties the capacity of the vessel or that expressly designated in its registry, a difference greater than 2 per cent between that stated and her true capacity not being permissible. If the shipowner or the captain should contract to carry a greater amount of cargo than the vessel can carry in view of her tonnage, they shall indemnify the shippers whose contracts they do not fulfill for the losses they may have caused when by reason of their default, according to the following cases, viz: If the vessel has been chartered by one shipper only, and there should appear to be an error or fraud in her capacity, and the charterer should not wish to rescind the contract, when he has a right to do so, the freightage shall he reduced in proportion to the cargo which the vessel can not receive, the person from whom the vessel is chartered being furthermore obliged to indemnify the charterer for the losses he may have caused him. If, on the contrary there should be several charter parties, and by reason of want of space all the cargo contracted for cannot be loaded, and none of the charterers desires to rescind the contract, preference shall be given to the person who has already loaded and arranged the freight in the vessel, and the rest shall take the places corresponding to them in the order of the dates of their contracts. Should there be no priority, the charterers may load, if they wish, in proportion to the amounts of weight or space for which each may have contracted, and the person from whom the vessel was chartered shall he obliged to indemnify them for losses and damages. CComm, 670. If the person from whom the vessel is chartered, after receiving a part of the freight, should not find sufficient to make up at least three-fifths of the amount which the vessel may hold, at the price he may have fixed, he may substitute for the transportation another vessel inspected and declared suitable for the same voyage, the expenses of transfer and the increase in the price of the charter, should there be any, being for his account. Should he not be able to make this change, he shall undertake the voyage at the time agreed upon; and should no time have been fixed, within fifteen days from the time the loading began, unless otherwise stipulated. If the owner of the part of the freight already loaded should procure some more at the same price and under similar or proportionate conditions to those accepted for the freight received, the person from whom the vessel is chartered or the captain can not refuse to accept the rest of the cargo; and should he do so, the shipper shall have a right to demand that the vessel put to sea with the cargo which it may have on board. CComm, 671. After three-fifths of the vessel has been loaded, the person from whom she is chartered may not, without the consent of the charterers or shippers, substitute the vessel designated in the charter party by another one, under the penalty of making himself thereby liable for all the losses and damages occurring during the voyage to the cargo of those who did not consent to the change. CComm, 672. If the vessel has been chartered in whole, the captain may not, without the consent of the charterer, accept cargo from any other person; and should he do so, said charterer may oblige him to unload it and to indemnify him for the losses suffered thereby. CComm, 673. The person from whom the vessel is chartered shall he liable for all the losses caused to the charterer by reason of the voluntary delay of the captain in putting to sea, according to the rules prescribed, provided he has been requested, notarially or judicially, to put to sea at the proper time. CComm, 674. If the charterer should carry to the vessel more cargo than that contracted for, the excess may be admitted in accordance with the price stipulated in the contract, if it can be well stowed without injuring the other shippers; but if in order to load it, the vessel would be thrown out of trim, the captain must refuse it or unload it at the expense of its owner.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines In the same manner, the captain may, before leaving the port, unload merchandise clandestinely placed on board, or transport them, if he can do so with the vessel in trim, demanding by way of freightage the highest price which may have been stipulated for said voyage. CComm, 675. If the vessel has been chartered to receive the cargo in another port, the captain shall appear before the consignee designated in the charter party; and, should the latter not deliver the cargo to him, he shall inform the charterer and wait his instructions, the lay days agreed upon or those allowed by custom in the port beginning to run in the meantime, unless there is an express, agreement to the contrary. Should the captain not receive an answer within the time necessary therefor, he shall make efforts to find freight; and should he not find any after the lay days and extra lay days have elapsed, he shall make a protest and return to the port where the charter was made. The charterer shall pay the freightage in full, discounting that which may have been earned on the merchandise which may have been carried on the voyage out or on the return trip, if carried for the account of third persons. The same shall be done if a vessel, having been chartered for the round trip, should not be given any cargo on its return. CComm, 676. The captain shall lose the freightage and shall indemnify the charterers if the latter should prove, even against the certificate of inspection, if one has been made at the port of departure, that the vessel was not in a condition to navigate at the time of receiving the cargo. CComm, 677. The charter party shall subsist if a declaration of war or a blockade should take place during the voyage, the captain not having any instructions from the charterer. In such case the captain must proceed to the nearest safe and neutral port, requesting and awaiting orders from the shipper, and the expenses and salaries paid during the detention shall be paid as general average. If, by orders of the shipper, the cargo should be discharged at the port of arrival, the freightage for the voyage out shall be paid in full. CComm, 678. If the time necessary, in the opinion of the judge or court, to receive the orders of the shipper should have elapse, without the captain having received any instructions, the cargo shall be deposited, and it shall be liable for the payment of the freightage and expenses on its account during the delay, which shall be paid from the proceeds of the part first sold. Obligations of shipowner: 1. Art. 669 - to observe in the charter parties, the capacity of the vessel, and to indemnify the shippers whose contracts are not fulfilled for the losses they may have suffered by the failure of the shipowner to observe the capacity of the vessel 2. Art. 670 - to undertake a voyage at the time agreed upon or within 15 days from loading if no time is stipulated, even if the shipowner should not find cargo sufficient to make up at least 3/5 of the amount which the vessel may hold, where he fails to exercise his right to change vessel 3. Art. 670 - where the shipowner should not find cargo sufficient to make up at least 3/5 of the amount which the vessel may hold, to accept other cargo procured by the owner of the freight already loaded under the same price and conditions 4. Art. 671- not to change the vessel after 3/5 of the vessel has been loaded, without the consent of the charterers or shippers 5. Art. 672 - if the vessel has been chartered in whole, not to accept cargo from any other person without the consent of the charterer 6. Art. 673 - to answer for losses arising from delay in putting to sea 7. Art. 676 - to have the vessel in a condition to navigate at the time of receiving the cargo 8. Art. 677 - in case of declaration of war or blockade during the voyage, where the captain has not received any instructions from the charterer, for the captain to proceed to the nearest safe and neutral port, requesting and awaiting orders from the shippers Rights of Shipowner: 1. Art. 670 - where the cargo is not sufficient to make up at least 3/5 of the amount which the vessel may hold, he may substitute anohter vessel inspected and declared suitable for the voyage expenses of transfer and increase in price of the charter shall be paid by him 2. Art. 674 - to collect the freight in accordance with the price stipulated for cargo in excess of that agreed upon is such excess can be properly stowed 3. Art. 674 - to refuse and unload at the expense of the owner excess cargo that cannot be properly stowed 4. Art. 674 - to unload merchandise clandestinely placed on board, or to transport them if he can do so, demanding the highest freightage 5. Art. 675- to find freight to take place of freight not received, if the vessel has been chartered to receive cargo in another port, after he receives no cargo from the consignee and after he receives no answer from the charterer 6. Art. 675 - to receive freight in full, discounting that which may have been earned on the merchandise carried as substitute 7. Art. 677 - to have the charter party subsist notwithstanding the declaration of war or a blockade during the voyage, and to receive in such cases, the freightage in full where the shipper orders that the cargo should be discharged at the port of arrival Obligation of charterers CComm, 679. The charterer of an entire vessel may sub-charter the whole or part thereof on such terms as he may consider most convenient, the captain not being allowed to refuse to receive on board the freight delivered by the second charterers, provided that the conditions of the first charter are not change, and that the price agreed upon is paid in full to the person from whom the vessel is chartered, even though the full cargo is not embarked, with the limitation established in the next article. CComm, 680. A charterer who does not complete the full cargo he bound himself to ship shall pay the freightage of the amount he fails to ship, if the captain does not take other freight to complete the load of the vessel, in which case the first charterer shall pay the difference, should there be any. CComm, 681. If the charterer should load goods different from those stated at the time of executing the charter party, without the knowledge of the person from whom the vessel was chartered or of the captain, and should thereby give rise to losses, by reason of confiscation, embargo, detention, or other causes, to the person from whom the vessel was chartered or to the shippers, the person giving rise thereto shall be liable with the value of his shipment and furthermore with his property, for the full indemnity to all those injured through his fault. CComm, 682. If the merchandise should have been shipped for the purpose of illicit commerce, and were taken on board with the knowledge of the person from whom the vessel was chartered or of the captain, the latter, jointly with the owner of the same, shall be liable for all the losses which may be caused the other shippers; and even though it may have been stipulated, they cannot demand any indemnity whatsoever from the charterer for the damaged caused to the vessel.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CComm, 683. In case of making a port to repair the hull, machinery, or equipment of the vessel, the shippers must await until the vessel is repaired, being permitted to unload it at their own expense should they deem it proper. If, for the benefit of the cargo subject to deterioration, the shippers or the court, or the consul, or the competent authority in a foreign country, should order the merchandise to be unloaded, the expenses of unloading and reloading shall be for the account of the former. CComm, 684. If the charterer, without the occurrence of any of the cases of force majeure mentioned in the foregoing article, should wish to unload his merchandise before arriving at the port of destination, he shall pay the full freightage, the expenses of the arrival made at his request, and the losses and damages caused the other shippers, should there be any. CComm, 685. In charters for transportation of general freight, any of the shippers may unload the merchandise before the beginning of the voyage, paying one-half of the freightage, the expense of stowing and restowing the cargo, and any other damage which for his reason he may cause the other shippers. CComm, 686. After the vessel has been unloaded and the cargo placed at the disposal of the consignee, the latter must immediately pay the captain the freightage due and the other expenses for which said cargo may be liable. The primage must be paid in the same proportion and at the same time as the freightage, all the changes and modifications to which the latter should be subject also governing the former. CComm, 687. The charterers and shippers may not abandon merchandise damaged on account of inherent defect or fortuitous event, for the payment of the freightage and other expenses. The abandonment shall be proper, however, if the cargo should consist of liquids and they have leaked out, nothing remaining in the containers but one-fourth part of their contents. Obligations of the charterer: 1. 2. 3. 4. 5. 6. 7. 8. Art. 680 - to pay the freight in full even if the charterer does not complete the full cargo he bound himself to ship Art. 681- to answer with the value of his shipment and other property for the losses suffered by the shipowner, captain or other shippers arising from confiscation, embargo, detention, or other causes, where the charterer loads goods different from those stated at the time of the execution of the charter party Art. 682 - to be jointly liable with the captain for losses which may be caused to the other shippers where the charterer ships goods for illicit commerce with the knowledge of the shipowner or captain Art. 682 - in case of making a port to repair the hull, machinery or equipment of the vessel, to wait until the vessel is repaired or to pay for the expenses of unloading should the charterer choose to unload Art. 684 - where the charterer unloads goods before arriving at port of destination without any force majeure occurring, to pay (1) expenses of arrival, (2) full freight and (3) for the damages and losses caused to other shippers, if any Art. 685 - where the charterer unloads before the beginning of the voyage, (1) to pay 1/2 of the freight, (2) to pay for the expenses of stowing and restowing the cargo, (3) to pay any other damage which he may have caused other shippers Art. 686 - to pay for freight, other expenses and the primage after the vessel has been unloaded and the cargo placed at the disposal of the consignee Art. 687 - not to abandon merchandise damaged on account of inherent defect or fortuitous event, for the payment of the freight and other expenses Caltex Phils. v. Sulpicio Lines. The charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel it chartered complied with all legal requirements. The duty rests upon the common carrier simply for being engaged in "public service." The relationship between the parties in this case is governed by special laws. Because of the implied warranty of seaworthiness, shippers of goods, when transacting with common carriers, are not expected to inquire into the vessels seaworthiness, genuineness of its licenses and compliance with all maritime laws. To demand more from shippers and hold them liable in case of failure exhibits nothing but the futility of our maritime laws insofar as the protection of the public in general is concerned. Such a practice would be an absurdity in a business where time is always of the essence. Considering the nature of transportation business, passengers and shippers alike customarily presume that common carriers possess all the legal requisites in its operation. f. Rescission CComm, 688. A charter party may be rescinded at the request of the charterer: 1. If before loading the vessel he should not agree with that stated in the certificate of tonnage, or if there should be an error in the statement of the flag under which she sails. 2. If the vessel should not be placed at the disposal of the charterer within the period and in the manner agreed upon. 3. If after the vessel has put to sea, she should return to the port of departure, on account of risk from pirates, enemies, or bad weather, and the shippers should agree to unload her. In the second and third cases the person from whom the vessel was chartered shall indemnify the charterer for the voyage out. 4. If the charter should have been made by the months, the charterers shall pay the full freightage for one month, if the voyage is for a port in the same waters, and for two months, if for a port in different waters. From one port to another of the Philippines and adjacent islands, the freightage for one month only shall be paid. 5. If the vessel should make a port during the voyage in order to make urgent repairs, and the charterers should prefer to dispose of the merchandise. When the delay does not exceed thirty days, the shippers shall pay the full freightage for the voyage out. Should the delay exceed thirty days, they shall only pay the freightage in proportion to the distance covered by the vessel. CComm, 689. At the request of the person from whom the vessel is chartered the charter party may be rescinded: 1. If the charterer, at the termination of the extra lay days, does not place the cargo alongside the vessel. In such case the charterer must pay half the freight stipulated, besides the demurrage due for the lay days and extra lay days. 2. If the person from whom the vessel was chartered should sell it before the charterer has begun to load it, and the purchaser should load it for his own account. In such case the vendor shall indemnify the charterer for the losses he may suffer. If the new owner of the vessel should not load it for his own account, the charter party shall be respected, and the vendor shall indemnify the purchaser if the former did not inform him of the charter pending at the time of making the sale.
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CComm, 690. The charter party shall be rescinded and all actions arising therefrom shall be extinguished, if, before the vessel puts to sea from the port of departure, any of the following cases should occur: 1. A declaration of war or interdiction of commerce with the power to whose ports the vessel was to make its voyage. 2. A condition of blockade of the port of destination of said vessel, or the breaking out of an epidemic after the contract was executed. 3. The prohibition to receive at the said port the merchandise constituting the cargo of the vessel. 4. An indefinite detention, by reason of an embargo of the vessel by order of the government, or for any other reason independent of the will of the ship agent. 5. The inability of the vessel to navigate, without fault of the captain or ship agent. The unloading shall be made for the account of the charterer. CComm, 691. If the vessel cannot put to sea on account of the closing of the port of departure or any other temporary cause, the charter shall remain in force, with neither one of the contracting parties having a right to claim damages. The subsistence and wages of the crew shall be considered as general average. During the interruption, the charterer may at the proper time and for his own account, unload and load the merchandise, paying demurrage if he delays the reloading after the cause for the detention has ceased. CComm, 692. A charter party shall be partially rescinded, unless there is an agreement to the contrary, and the captain shall only be entitled to the freightage for the voyage out, if, by reason of a declaration of war, closing of ports, or interdiction of commercial relations during the voyage, the vessel should make the port designated for such a case in the instructions of the charterer. Loans on Bottomry and Respondentia a. Loan on Bottomry, defined A contract in the nature of a mortgage, by which the owner of the ship borrows money for the use, equipment and repair of the vessel and for a definite term, and pledges the ship (or the keel or bottom of the ship) as a security for its repayment, with maritime or extraordinary interest on account of the maritime risks to be borne by the lender, it being stipulated that if the ship be lost in the course of the specific voyage or during the limited time, by any of the perils enumerated in the contract, the lender shall also lose his money. b. Loan on respondentia, defined One made on the goods laden on board the ship, and which are to be sold or exchanged in the course of the voyage, the borrower's personal responsibility being deemed the principal security for the performance of the contract, which is therefore called respondentia. The lender must be paid his principal and interest, thought the ship perishes, provided that the goods are saved. c. Character of Loan CComm, 719. A loan in which under any condition whatever, the repayment of the sum loaned and of the premium stipulated depends upon the safe arrival in port of the goods on which it is made, or of the price they may receive in case of accident, shall be considered a loan on bottomry or respondentia. Distinguished from ordinary loans: Ordinary loan loan on bottomry and respondentia 1. first lender has preference last lender has preference over over subsequent lenders previous ones 2. must be paid absolutely loan is required to be paid only upon at all events, WON thing safe arrival of the thing given as given as security is lost or security at port of destination destroyed 3. subject to Usury Law no limit as to rate of interest in view of diff. classes and various risks in a maritime voyage Marine insurance vs Bottomry and Respondentia Loans: The borrower is in effect indemnified for his loss, at least, to the extent of the loan --> in case of loss of the thing given as security, the borrower is under no obligation to pay the loan Marine insurance 1. indemnity is paid after the loss has occurred 2. when marine peril occurs, the obligation of the insurer becomes absolute 3. consensual contract * governed by Insurance Act d. bottomry/respondentia loans indemnity is paid in advance by way of loan when marine peril causes the loss of the vessel or cargo, the obligation of the borrower to pay is extinguished real contract --perfected from the moment of delivery of the thing loaned
2.
Forms and Requisites CComm, 720. Loans on bottomry or respondentia may be executed: 1. By means of a public instrument. 2. By means of a policy signed by the contracting parties and the broker taking part therein. 3. By means of a private instrument. Under whichever of these forms the contract is executed, it shall be entered in the certificate of the registry of the vessel and shall be recorded in the registry of vessels, without which requisites the credits of this kind shall not have, with regard to other credits, the preference which, according to their nature, they should have, although the obligation shall be valid between the contracting parties. The contracts made during a voyage shall be governed by the provisions of Articles 583 and 611, and shall be effective with regard to third persons from the date of their execution, if they should be recorded in the registry of vessels of the port of registry of the vessel
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines before the lapse of eight days following its arrival. If said eight days should elapse without the record having been made in the corresponding registry, the contracts made during the voyage of a vessel shall produce no effect with regard to third persons, except from the day and date of their inscription. In order that the policy of the contracts executed in accordance with No. 2 may have binding force, they must conform to the registry of the broker who took part therein. With respect to those executed in accordance with No. 3 the acknowledgment of the signature shall be required. Contracts which are not reduced to writing shall not give rise to judicial action. CComm, 721. In a contract on bottomry or respondentia the following must be stated: 1. The kind, name, and registry of the vessel. 2. The name, surname, and domicile of the captain. 3. The names, surnames, and domiciles of the person giving and the person receiving the loan. 4. The amount of the loan and the premium stipulated. 5. The time for repayment. 6. The goods pledged to secure repayment. 7. The voyage during which the risk is run. CComm, 722. The contract may be made to order, in which case they shall be transferable by indorsement, and the indorsee shall acquire all the rights and shall incur all the risks corresponding to the indorser. e. On What Constituted CComm, 724. The loans may be constituted jointly or separately: 1. On the hull of the vessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if the vessel is a steamer. 5. On the merchandise loaded. If the loan in constituted on the hull of the vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and the freightage earned during the voyage on which the loan is made shall also be considered as included in the liability for the loan. If the loan is made on the cargo, all that which constitutes the same shall be subject to the repayment; and if on a particular object of the vessel or of the cargo, only the object concretely and specifically mentioned shall be liable. CComm, 725. No loans on bottomry may be made on the salaries of the crew or on the profits expected. f. Amount CComm, 723. Loans may be made in goods and in merchandise, fixing their value in order to determine the principal of the loan. CComm, 726. If the lender should prove that he loaned an amount larger than the value of the object liable for the bottomry loan, on account of fraudulent measures employed by the borrower, the loan shall be valid only for the amount at which said object is appraised by experts. The surplus principal shall be returned with legal interests for the entire time required for repayment. CComm, 727. If the full amount of the loan contracted in order to load the vessel should not be used for the cargo, the balance shall be returned before clearing. The same procedure shall be observed with regard to the goods taken as loan, if they were not loaded. g. By Whom CComm, 728. The loan which the captain takes at the point of residence of the owners of the vessel shall only affect that part thereof which belongs to the captain, if the other owners or their agents should not have given their express authorization therefor or should not have taken part in the transaction. If one or more of the owners should be requested to furnish the amount necessary to repair or provision the vessel, and they should not do so within twenty-four hours, the interest which the parties in default may have in the vessel shall be liable for the loan in the proper proportion. Outside of the residence of the owners the captain may contract loans in accordance with the provisions of Articles 583 and 611. CComm, 617. The captain may not contract loans on respondentia secured by the cargo; and should he do so, the contracts shall be void. Neither may he borrow money on bottomry for his own transactions, except on the portion of the vessel he owns, provided no money has been previously borrowed on the whole vessel, and there does not exist any other kind of lien or obligation chargeable against the vessel. If he may do so, he must state what interest he has in the vessel. In case of violation of this article, the principal, interest, and costs shall be for the personal account of the captain, and the ship agent may furthermore discharge him. CComm, 611, supra. CComm, 583, supra. h. Effects of Contract CComm, 719, supra. CComm, 729. Should the goods on which money is taken not be subjected to risk, the contract shall be considered a simple loan, with the obligation on the part of the borrower to return the principal and interest at the legal rate, if that agreed upon should not be lower CComm, 726, supra. CComm, 727, supra. CComm, 730. Loans made during the voyage shall have preference over those made before the clearing of the vessel, and they shall be graduated in the inverse order of their dates. The loans for the last voyage shall have preference over prior ones. Should several loans have been made at the same port of arrival under stress and for the same purpose, all of them shall be paid pro rata. Bill of Lading 1. Contents CComm, 706. The captain of the vessel and the shipper shall have the obligation of drawing up the bill of lading in which shall be stated:
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines 1. The name, registry, and tonnage of the vessel. 2. The name of the captain and his domicile. 3. The port of loading and that of unloading. 4. The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in the name of a specified person. 6. The quantity, quality, number of packages and marks of the merchandise. 7. The freightage and the primage stipulated. The bill of lading may be issued to bearer, to order, or in the name of a specified person, and must be signed within twenty-four hours after the cargo has been received on board, the shipper being entitled to demand the unloading at the expense of the captain should the latter not sign it, and, in every case, the losses and damages suffered thereby. CComm, 707. Four true copies of the original bill of lading shall be made, and all of them shall be signed by the captain and the shipper. Of these, the shipper shall keep one and send another to the consignee; the captain shall take two, one for himself and another for the ship agent. There may also be drawn up as many copies of the bill of lading as may be considered necessary by the person interested; but when they are issued to order or to bearer, they shall be stated in all the copies, be they the first four or the subsequent ones, the destination of each one, stating whether it is for the agent, for the captain, for the shipper, or for the consignee. If the copy sent to the latter should have a duplicate, this circumstance and the fact that it is not valid except in default of the first one must be stated therein. CComm, 713. If before the delivery of the cargo a new bill of lading should be demanded of the captain, on the allegation that the failure to present the previous ones is due to their loss or to any other just cause, he shall be obliged to issue it, provided that security for the value of the cargo is given to his satisfaction, but without changing the consignment, and stating therein the circumstances prescribed in the last paragraph of Article 707, under penalty, should he not so state, of being held liable for said cargo if improperly delivered through his fault. CComm, 714. If before the vessel puts to sea the captain should die or should cease to hold his position through any cause, the shippers shall have the right to demand of the new captain the ratification of the first bills of lading, and the latter must do so, provided that all the copies previously issued be presented or returned to him, and it should appear from all examination of the cargo that they are correct. The expenses arising from the examination of the cargo shall be defrayed by the ship agent, without prejudice to the right of action of the latter against the first captain if he ceased to be such through his own fault. Should said examination not be made, it shall be understood that the new captain accepts the cargo as it appears from the bills of lading issued. 2. Probative Value 3. CComm, 709. A bill of lading drawn up in accordance with the provisions of this title shall be proof as between all those interested in the cargo and between the latter and the insurers, proof to the contrary being reserved for the latter. CComm, 710. If the bills of lading do not agree, and no change or erasure can be observed in any of them, those possessed by the shipper or consignee signed by the captain shall be proof against the captain or ship agent in favor of the consignee or shipper; and those possessed by the captain or ship agent signed by the shipper shall be proof against the shipper or consignee in favor of the captain or ship agent. Passenger on Sea Voyage 1. Nature of Contracts CComm, 695. The right to passage, if issued to a specified person, may not be transferred without the consent of the captain or of the consignee. 2. Obligations of Passengers CComm, 693. If the passage price has not been agreed upon, the judge or court shall summarily fix it, after a declaration of experts CComm, 699. If the contract is rescinded, before or after the commencement of the voyage, the captain shall have a right to claim payment of what he may have furnished the passengers. CComm, 704. The captain, in order to collect the passage-money and expenses of sustenance, may retain the goods belonging to the passenger, and in case of the sale of the same he shall be given preference over other creditors acting the same way as in the collection of freightage. CComm, 694. Should the passenger not arrive on board at the time fixed, or should leave the vessel without permission from the captain when the latter is ready to leave the port, the captain may continue the voyage and demand the full passage price. CComm, 700. In all matters pertaining to the preservation of order and discipline on board the vessel passengers shall be subject to the orders of the captain, without any distinction whatsoever. 3. Rights of Passengers CComm, 697. If before the voyage is begun it is suspended through the exclusive fault of the captain or ship agent, the passengers shall have the right to a refund of their fares and to recover losses and damages; but if the suspension is due to fortuitous events, or to force majeure, or to any other cause independent of the captain or ship agent, the passengers shall only be entitled to the return of the fare. CComm, 698. In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the fare in proportion to the distance covered, without right to recover for losses and damages if the interruption is due to fortuitous event or to force majeure, but with a right to indemnity if the interruption should have been caused by the captain exclusively. If the interruption should be caused by the disability of the vessel, and a passenger should agree to await the repairs, he may not be required to pay any increased price of passage, but his living expenses during the stay shall be for his own account. In case of delay in the departure of the vessel, the passengers have the right to remain on board and to be furnished with food for the account of the vessel unless the delay is due to fortuitous events or to force majeure. If the delay should exceed ten days, passengers requesting the same shall be entitled to the return of the fare; and if it is due exclusively to the fault of the captain or ship agent, they may also demand indemnity for losses and damages. A vessel exclusively devoted to the transportation of passengers must take them directly to the port or ports of destination, no matter what the number of passengers may be, making all the stops indicated in its itinerary. Sweet Lines v. CA. The governing provisions are found in the Code of Commerce. Art. 614 provides that a captain who agreed to make a voyage and who fails to fulfill his undertaking, without being prevented by fortuitous event or force majeure, shall indemnify all the losses which his failure may cause, without prejudice to criminal penalties which may prosper. Art. 698 also provides for the captain's liability. || The crucial factor then is the existence of a fortuitous event or force majeure. Without it, the right to damages and indemnity exists against a captain who fails to fulfill his undertaking or where the interruption has been caused by the captain exclusively. Trans-Asia Shipping v. CA. 4. Responsibilities of Captain
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines CComm, 701. The convenience or the interest of the passengers shall not obligate or empowers the captain to stand in shore or enter places which may take the vessel out of her course, or to remain in the ports he must or in under necessity of touching for a period longer than that required by the needs of navigation. CComm, 702. In the absence of an agreement to the contrary, it shall be understood that the subsistence of the passengers during the voyage is included in the price of the passage; but should it be for the account of the latter, the captain shall be under obligation, in case of necessity, to furnish the supply of food necessary for their sustenance at a reasonable price. CComm, 705. In case of the death of a passenger during the voyage, the captain shall be authorized, with regard to the body, to take the steps required by the circumstances, and shall carefully take care of the papers and goods which may be on board belonging to the passenger, observing the provisions of case No. 10 of Article 612 with regard to members of the crew. CComm, 612, supra. CComm, 703. A passenger shall be considered a shipper insofar as the goods he carries on board are concerned, and the captain shall not be responsible for what the former may keep under his immediate and special custody, unless the damage arises from an act of the captain or of the crew. CC, 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 employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable. Carriage of Goods by Sea Act (CA No. 65; Public Act No. 521, 74th US Congress) Notes: In relation to Civil Code: Art. 1753 - governed by law of place of destination, if shipped to a foreign country, governed by law of foreign country Art. 1766 - goods from foreign country shipped to the Philippines, governed by the Civil Code COGSA - applicable to all transportation of goods by sea in foreign trade to and from Philippine ports - does not apply to purely domestic transport - Laws applicable to a contract for the carriage of goods by sea: 1. Distinguish - common carrier (Civil Code) - private carrier 2. Where is the vessel going? a. Common carrier coming to the Phils. = what law applies? 1st: Civil Code 2nd: COGSA (it's more specific than Code of Commerce) - in foreign trade 3rd: Code of Commerce b. Private carrier coming to the Phils. in foreign trade 1st: COGSA (because it's more specific) 2nd: Code of Commerce 3rd: Civil Code (provisions not on common carriers e.g. torts, contracts) c. From the Phils. to a foreign country: apply laws of such foreign country (Art. 1753) - with respect to vessels destined for foreign ports, the COGSA doesn't apply unless parties make it applicable. Q: In what situations does COGSA primarily apply? Where the parties expressly stipulate that COGSA shall govern their respective rights and obligations. Q: Can the COGSA apply in domestic shipping? Generally, NO. EXCEPTION: when parties agree to make it apply. Q: What application does COGSA have in carriage of passengers? None. Applies only to carriage of goods. Ang v. American Steamship Agencies. FH Stevens v. Nordeutscher. International Air Transport A. Constitutionality Santos v. Northwest. Art. 28 (1) of Warsaw Con. is constitutional. Although the case can be decided on other grounds without resolving the constitutional question, the Warsaw Convention is a treaty commitment voluntarily assumed by the Philippine Government and as such, has the force and effect of law. The presumption is that this joint legislative-executive act was first carefully studied and determined to be constitutional before it was adopted. Petitioner's allegation have not overcome this presumption. Moreover, the treaty since 1950 has not been rejected by the Philippine Government. B. When Applicable Warsaw Convention [WC], 1(1). This Convention applies to all international carriage of persons,luggage or goods performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking. C. Liabilities under the Convention WC, 17. The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. WC, 18. 1. The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any registered luggage or any goods, if the occurrence which caused the damage so sustained took place during the carriage by air. 2. The carriage by air within the meaning of the preceding paragraph comprises the period during which the luggage or goods are in charge of the carrier, whether in an aerodrome or on board an aircraft, or, in the case of a landing outside an aerodrome, in any place whatsoever. 3. The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside an aerodrome. If, however, such a carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air. WC, 19. The carrier is liable for damage occasioned by delay in the carriage by air of passengers, luggage or goods. Northwest v. Cuenca. The said articles merely declare the carrier liable for damages in the enumerated cases, if the conditions therein specified are present. Neither the provisions of said articles nor others regulate or exclude liability for other breaches of contract by the carrier. Under
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Special thanks to http://www.scribd.com/doc/26851788/Transpo-Reviewer for the Agbayani annotations and case doctrines petitioner's theory, an air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd. Alitalia v. IAC. The WC does not operate as an absolute limit of the extent of an airline's liability. It does not regulate or exclude liability for other breaches of contract by the carrier. || The WC does not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and employees or for some particular or exceptional damage. The WC has been held inapplicable where there was proof of malice or bad faith attributable to its officers and employees. Here, however, there was no bad faith on the part of the employees. Limitations on Liability WC, 22. 1. In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of 125,000 francs. Where, in accordance with the law of the Court seised of the case, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not exceed 125,000 francs. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability. 2. In the carriage of registered luggage and of goods, the liabilityof the carrier is limited to a sum of 250 francs per kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the actual value to the consignor at delivery. 3. As regards objects of which the passenger takes charge himselfthe liability of the carrier is limited to 5,000 francs per passenger. 4. The sums mentioned above shall be deemed to refer to theFrench franc consisting of 65 milligrams gold of millesimal fineness 900. These sums may be converted into any national currency in round figures. Pan Am v. IAC. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. Inasmuch as Pangan failed to declare any higher value for his luggage & to pay add'l charges, PanAm's liability is limited to $600, as stipulated at the back of the ticket. When limitations unavailable WC, 3. 1. For the carriage of passengers the carrier must deliver apassenger ticket which shall contain the following particulars:(a) the place and date of issue; (b) the place of departure and of destination; (c) the agreed stopping places, provided that the carrier may reserve the right to alter the stopping places in case of necessity, and that if he exercises that right, the alteration shall not have the effect of depriving the carriage of its international character; (d) the name and address of the carrier or carriers; (e) a statement that the carriage is subject to the rules relating to liability established by this Convention. 2. The absence, irregularity or loss of the passenger ticket does notaffect the existence or the validity of the contract of carriage, which shall none the less be subject to the rules of this Convention. Nevertheless, if the carrier accepts a passenger without a passenger ticket having been delivered he shall not be entitled to avail himself of those provisions of this Convention which exclude or limit his liability. WC, 25. 1. The carrier shall not be entitled to avail himself of the provisions of this Convention which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the Court seised of the case, is considered to be equivalent to willful misconduct. 2. Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused as aforesaid by any agent of the carrier acting within the scope of his employment. TWA v. CA. There was obvious discrimination & humiliation to w/c Vinluan was subjected. Such inattention & lack of care for interest of its passengers amount to bad faith w/c entitles passenger to moral damages. Conditions on Imposition of Liability WC, 26. 1. Receipt by the person entitled to delivery of luggage or goods without complaint is prima facie evidence that the same have been delivered in good condition and in accordance with the document of carriage. 2. In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within three days from the date of receipt in the case of luggage and seven days from the date of receipt in the case of goods. In the case of delay the complaint must be made at the latest within fourteen days from the date on which the luggage or goods have been placed at his disposal. 3. Every complaint must be made in writing upon the document of carriage or by separate notice in writing despatched within the times aforesaid. 4. Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part. WC, 28. 1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the Court having jurisdiction at the place of destination. 2. Questions of procedure shall be governed by the law of the Court seised of the case. WC, 29. 1. The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped. 2. The method of calculating the period of limitation shall be determined by the law of the Court seised of the case. Santos v. Northwest, supra. Luna v. CA.
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1 Transportation and Public Utilities Finals reviewer Prof. N.F.L. Ty 1 Semester A.Y.

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