Notes on Transportation Laws Atty. A.G.

Alonto II
2nd Sem, 2009-2010
CONTRACT OF TRANSPORTATION A contract whereby a person, natural or juridical, obligates to transport persons, goods or both, from one place to another by land, air or water for a price or compensation. WHEN COMMERCIAL When the object is merchandise or any article of commerce; or When whatever its object may be, the carrier is a merchant or is habitually engaged in commerce. COMMON CARRIER One who holds itself out as ready to engage in the transportation for hire as a public employment and not as a casual occupation. Art. 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. c. He must undertake to carry by the method by which his business is conducted and over his established roads; and d. The transportation must be for hire. (First Philippine Industrial Corp. vs. CA, 300 SCRA 661)

TRUE TEST OF A COMMON CARRIER The carriage of passengers or goods, providing space for those who opt to avail themselves of its transportation service for a fee. (National Steel Corporation vs.CA, 283 SCRA 45)

EXTRAORDINARY DILIGENCE REQUIRES COMMON CARRIERS (FOR GOODS) TO: 1. Know and to follow required precaution for avoiding damage to, or destruction of the goods; 2. Render service with the greatest skill and foresight; 3. Use all reasonable means to ascertain the nature and characteristics of the goods; 4. Exercise due care in the handling and storage. 5. Even if damage occurs, exercise due diligence to forestall or lessen the loss.

COMMON CARRIER Holds himself out for all people indiscriminately; Extraordinary diligence; Subject to regulation by the State; Parties may not agree on limiting the carriers liability except when provided by law; Presumption of fault and negligence applies.

PRIVATE CARRIER Contracts w/ particular individuals/groups only; Ordinary diligence; Not subject to State regulation; Parties may agree, provided, not contrary to law, morals or good customs No fault or negligence is presumed.

DURATION OF EXTRAORDINARY DILIGENCE (GOODS) 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 right to receive them. (Calvo vs. UCPB, 379 SCRA 510)

CODAL PROVISIONS ON EXTRAORDINARY DILIGENCE Art. 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. Art. 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. Art. 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.

PRIVATE CARRIER Not engaged in the business of carriage; no public employment; undertakes to goods/passengers for compensation (requires ordinary diligence only).

deliver

TEST FOR DETERMINING WHETHER A PARTY IS A COMMON CARRIER OF GOODS a. 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; b. He must undertake to carry goods of the kind to which his business is confined;

PRESUMPTION OF FAULT OR NEGLIGENCE (GOODS)

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Notes on Transportation Laws Atty. A.G. Alonto II

2nd Sem, 2009-2010
In case of loss, destruction or deterioration of goods, common carrier is presumed at fault unless such loss, destruction or deterioration is due to a fortuitous event (caso fortuito).

RES IPSA LOQUITOR DOCTRINE UNDER ART. 1756 1. 2. 3. The contract between the carrier and the passenger imposes on the carrier the obligation to transport the passenger safely, hence, the burden of explaining should fall with the carrier; The cause of the accident is better known to the carrier than to the passenger; and The accident could not have happened if due care was exercised by the carrier.

GENERAL RULE: Negligence must be proved. EXCEPTION: For common carriers, loss, destruction or deterioration of the goods is right away attributable to the fault or negligence of the carrier. The burden is on the carrier to prove he observed extraordinary diligence.

PRIMA FACIE CASE OF FAULT OR NEGLIGENCE Mere proof of delivery of the goods in good order to a common carrier and of the arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. (Belgian vs. Philippine, 383 SCRA 25)

NEGLIGENCE OF COMMON CARRIER Negligence on the part of the carrier is presumed when the passenger suffers injuries. (Roque vs. Buan, 21 SCRA 642) If private carrier Quasi-delict ergo negligence or fault must be clearly established. If common carrier breach of contract of carriage ergo the action can be prosecuted merely by proving the existence of the contract + failure of carrier to transport passenger safely. (Calalas vs. CA, 332 SCRA 356) PASSENGER DEATH OR INJURY, COMMON CARRIER BECOMES LIABLE

LIABILITY FOR LOSS DUE TO IMPROPER PACKING If the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but he accepts the goods notwithstanding such condition, he is not relieved of liability for loss or injury resulting therefrom. (Southern vs. CA, 4 SCRA 258)

Through the negligence or willful acts of its employees; or On account of willful acts or negligence of other passengers or of strangers if the common carriers employees through the exercise of due diligence could have prevented or stopped the act or omission. (Light Rail vs. Natividad, 397 SCRA 75)

DEGREE OF DILIGENCE IN CARRIAGE OF PASSENGERS A common carrier is obliged to carry passengers safely as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances. (Sulpcio vs. CA, 246 SCRA 376) Art. 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. PRESUMPTION OF FAULT OR NEGLIGENCE (PERSONS) In case of death or injury to passengers, the common carrier is presumed to have been at fault, or negligent, unless they prove that they observed extraordinary diligence. Art. 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.

SHIFT OF BURDEN OF PROOF Action against a private carrier burden of proving negligence is on the plaintiff. (National vs. CA, 283 SCRA 45) Action against a common carrier court need not make an express finding of fault or negligence, burden of proof shifts to the carrier where it must that the injury was due to an unforeseen event or force majeure. (Light Rail vs. Natividad, supra)

WHEN PRESUMPTION REBUTTED By presentation of proof by the common carrier that the failure to bring the goods or passengers safely to their destination was due to a fortuitous event or any of those mentioned in Art. 1734. Art. 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;
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Notes on Transportation Laws Atty. A.G. Alonto II

2nd Sem, 2009-2010
(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; (5) Order or act of competent public authority. If the cause seems fortuitous but it is not included in Art. 1734, then Art. 1735 applies. Art. 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. Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself. DURATION OF EXTRAORDINARY DILIGENCE (PERSONS) Commences: When the common carrier gives the latter the opportunity to avail of the services without need for said passenger to have boarded the vehicle, to have seated himself or to have been given a ticket. Ends: When the passenger, after reaching destination, safely alighted and had the reasonable opportunity to leave the common carriers premises. All persons who remain on the premises within a reasonable time after leaving the conveyance are to be deemed passengers. REASONABLE TIME OR REASONABLE DELAY AFTER LEAVING CONVEYANCE To be determined from all the circumstances, and includes reasonable time to see after his baggage and prepare for his departure from the premises of the carrier.

REQUISITES OF CASO FORTUITO (FORTUITOUS EVENT) 1. 2. 3. 4. Event independent of human will; Occurrence it impossible for debtor to fulfill the obligation in a normal manner; Obligor must be free of participation in, or aggravation of, the injury to the debtor; and Impossible to foresee or to avoid.

CAUSES OF ACTION ARISING FROM THE NEGLIGENT ACT OF THE CARRIER Culpa Contractual: Only the carrier could be held liable, not the driver because there is no privity between driver and passenger. Passenger or shipper vs. common carrier. Liability of Common Carrier is primary. Art. 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. Culpa Aquiliana: The carrier and the driver are solidarily liable as joint tortfeasors. Passenger or shipper vs. driver (insolvent or not) and common carrier. Liability of Common Carrier is primary. Art. 2180. The obligation imposed by Art. 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible. XXX The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of their branches in which the latter are employed or on the occasion of their functions.XXX Culpa Criminal:

WHEN FORTUITOUS EVENT CANNOT EXCUSE CARRIER Fortuitous event was not the proximate or only cause of the loss; or The carrier did not exercise due diligence to prevent or minimize loss before, during and after the occurrence of the fortuitous event; or The carrier was already in delay when the fortuitous event occurred.

CONTRIBUTORY NEGLIGENCE OF PASSENGER Does not exempt common carrier from liability. Does not entitle the passenger to recover moral and exemplary damages. (PNR vs. CA, 139 SCRA 87)

Art. 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.

DUTY OF THE PASSENGER The passenger must observe the diligence of a good father of a family to avoid injury to himself.

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Notes on Transportation Laws Atty. A.G. Alonto II

2nd Sem, 2009-2010
Carrier could be held liable only if driver be convicted and declared insolvent, making him subsidiarily liable. Passenger or shipper vs. driver. Liability of Common Carrier is subsidiary (only when driver is insolvent). Art. 100 (RPC). Civil liability of a person guilty of a felony. Every person criminally liable for a felony is also civilly liable. Art. 103 (RPC). Subsidiary civil liability of other persons. The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties. LIABILITY FOR ACTS OF EMPLOYEES AND PASSENGERS Common carrier is liable for intentional assaults committed by its employees upon its passengers. Carrier is liable for damages to passengers caused by its employees. (Philippine vs. PhilAm, 63 SCRA 231) No defense for the carrier that the act was done in excess of authority or in disobedience of the carriers orders. Carriers liability is absolute, the principle of respondeat superior does not apply. (Maranan vs. Perez, 20 SCRA 412) in all human actions PROOF NEEDED preponderance of evidence preponderance of evidence actions in all human

proof beyond reasonable doubt

DEFENSE OF A in the selection & yes, insofar as not a proper defense GOOD FATHER OF supervision of EEs, EEs & guardians as the EEs guilt is A FAMILY not a proper are concerned automatically the defense but may guilt of the ER if the mitigate damages EE is insolvent under the Doctrine of Respondent Superior BURDEN OF PROOF is the debtor as long as ordinarily, victim accused is it is provided that has to prove the presumed innocent there was a negligence of the until the contrary contract and that it was carried out, defendant because the action is based proved, so the prosecution has

Art. 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. CULPA CONTRACTUAL vs. C. AQUILIANA vs. C. CRIMINAL CULPA CULPA CULPA CONTRACTUAL AQUILIANA CRIMINAL merely incidental direct, substantive direct, substantive to the performance & independent of a & independent of a of the obligation contract contract already existing because of a contract none, except the none, except the duty to be careful duty to be careful

it is presumed that on alleged burden of proving the debtor is at negligence on the the negligence of fault; it is the duty part of the the accused of the debtor to defendant EXCEPT prove that there for COMMON was no negligence CARRIERS where in carrying out the there is a terms of the presumption of contract negligence

NEGLIGENCE

WHY CARRIER IS LIABLE FOR ACTS OF EMPLOYEES Reason: The carrier has the power to select and remove them. (Maranan vs. Perez, supra) A carrier who fails to exercise due diligence in the supervision of its employees could be held liable for damages for the resulting harm to others. LIABILITY FOR ACTS OF STRANGERS OR OF PASSENGERS The carrier must be vigilant in securing the safety or its passengers otherwise, they may be held liable despite the fact that the act or omission is one committed by strangers or one of its passengers.
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PRE-EXISTING express & implied OBLIGATION

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Notes on Transportation Laws Atty. A.G. Alonto II

2nd Sem, 2009-2010
Art. 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. LIABILITY IF DRIVER OF OTHER VEHICLE IS NEGLIGENT Drivers of both vehicles and its owners shall be liable jointly and severally for damages. (Gutierrez vs. Gutierrez, 56 Phil. 177) Real owner of vehicle at fault is liable for damages. (Occidental vs. CA, 220 SCRA 169) Lack of drivers license of the other driver does not exempt negligent driver from liability when there was real fault on his part. (Manuel vs. CA, 227 SCRA 29)

STIPULATIONS LIMITING THE LIABILITY OF COMMON CARRIERS In the carriage of goods: Art. 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. Art. 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. Art. 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. Art. 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. Art. 1748. An agreement limiting the common carrier's liability for delay on account of strikes or riots is valid. Art. 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. Art. 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.
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LIABILITY OF COMMON CARRIER WITHOUT A CERTIFICATE OF PUBLIC CONVENIENCE Liability of Common Carrier is not dependent on whether or not it holds a certificate of public convenience. (Guzman vs. CA, 168 SCRA 612)

REGISTERED OWNER RULE The registered owner is liable for any damages caused by the negligent operation of the vehicle although the same had already been sold or conveyed to another person at the time of the accident, subject to the right of recourse against the transferee or the buyer. (Guadioso Erezo, et al. vs. Aguedo Jepte, GR L-9605, Sept. 30, 1957; Equitable Leasing Corp. vs. Lucita Suyon, et al., GR 143360, Sept. 5, 2002)

LEASED VEHICLES The registered owner is also liable even if the vehicle was leased to another. (BA Finance Corp. vs. CA, 215 SCRA 715) STOLEN VEHICLES The registered owner is not liable if the vehicle was taken without his consent or knowledge. (Duavit vs. CA, 173 SCRA 490, 496) KABIT SYSTEM An arrangement whereby the 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. This is contrary to public policy ergo void and inexistent under Art. 1409. (Aberlardo Lim, et al. vs. CA, GR 125817, January 16, 2002) The Registered Owner Rule applies.

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Notes on Transportation Laws Atty. A.G. Alonto II

2nd Sem, 2009-2010
In case of passengers: Art. 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. Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is valid, but not for wilful acts or gross negligence. REDUCTION OF DILIGENCE The parties cannot stipulate so as to totally exempt the carrier from exercising any degree of diligence of whatsoever; The parties cannot stipulate that the common carrier shall exercise diligence less than the diligence of a god father of a family. The parties may stipulate that the diligence be less than the extraordinary diligence provided Art. 1744 is complied with. When a passenger is carried gratuitously, limiting the carriers liability for negligence is valid, but not for willful acts or gross negligence. However, reduction of fare does not justify any limitation of liability. (Art. 1758)

INVALID STIPULATIONS WITH COMMON CARRIERS The goods are transported at the risk of the owner; The carrier will not be liable for any loss, destruction or deterioration of the goods; The carrier need not observe any diligence in the custody of the goods; The carrier shall exercise a degree of diligence less than that of a good father of a family over the movable transported; The carrier shall not be responsible for the acts or omissions of his or its employees; The carriers liability for acts committed by thieves or robbers who do not act with grave or irresistible threat, violence or force is dispensed with or diminished; The carrier is not responsible for the loss, destruction or deterioration of the goods on account of the defective condition of the car, vehicle, ship or other equipment used in the contract of carriage.

RULE ON PASSENGERS BAGGAGES

THREE COMMON KINDS OF STIPULATIONS TO LIMIT LIABILITY, WHICH ARE VOID AND WHICH ARE VALID The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. = VOID The second is one providing for an unqualified limitation of such liability to an agreed valuation. = VOID And the third is 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. = VALID According to an almost uniform weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and enforceable.

VALID STIPULATIONS RELATIVE TO LIABILITY Limiting the common carriers liability for delay on account of strikes or riots. Limiting liability of common carrier to the value of the value of the goods appearing in the bill of lading unless the shipper declares a greater value. 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. (Art. 1748)

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Notes on Transportation Laws Atty. A.G. Alonto II

2nd Sem, 2009-2010
BAGGAGE W/ PASSENGER OR CARRIERS EMPLOYEES: The baggage in transit will be considered as necessary deposits. The Common Carrier shall be responsible as depositaries, provided that notice was given to them or its employees. Loss due to passengers fault, the carrier is not liable. BAGGAGE NOT WITH PASSENGER BUT WITH COMMON CARRIER: Extraordinary diligence must be observed. The baggage are just like any other goods in the possession of the carrier. DOCTRINE OF COMBINED OR SUCCESSIVE CARRIERS The second carrier shall assume the obligations of the first carrier but the second carrier has a right of action against the first carrier if the latter is directly responsible for the fault giving rise to the claim of the shipper or consignee. SUCCESSIVE AIR CARRIERS An airline ticket providing carriage by several carriers shall be considered as a SINGLE operation so the issuing carrier is liable for any tortious conduct of the other carrier.

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Notes on Transportation Laws Atty. A.G. Alonto II

2nd Sem, 2009-2010
MARITIME LAW Maritime Law is the system of laws which particularly relates to the affairs and business of the sea, to ships, their crews and navigation, and to marine conveyance of persons and property. CHARACTERISTICS OF MARITIME TRANSACTION 1. REAL Similar to transactions over property with respect to third persons which is done through registration as shown by the limitation of the liability of the agents to the actual value of the vessel and the freight money; and the right to retain the cargo and embargo and detention of the vessel; 2. HYPOTHECARY The liability of the owner over the value of the vessel is limited to the vessel itself. MERCHANT VESSEL A vessel engaged in maritime commerce, whether foreign or otherwise. VESSEL or WATER CRAFT UNDER PD 474 (An Act Providing for the Reorganization of Maritime Functions in the Philippines, creating the Maritime Industry Authority and for other purposes) Any barge, lighter, bulk carrier, passenger ship freighter, tanker, container, ship, fishing boats or other artificial contrivance utilizing any source of motive power designed, used or capable of being used as a means of water transportation operating either as common contract carrier, including fishing vessels covered under PD 43, EXCEPT: 1. Those owned and/or operated by the Armed Forces of the Philippines and by foreign governments for military purposes, and 2. Bancas, sailboats and other waterborne contrivance of less than 3 gross capacity and not motorized. (Sec. 3) 1. 2. 3. 4. 5. Charter or lease is approved by MARINA; Duration is not less than 1 year; Used exclusively for coastwise trade, unless otherwise permitted by MARINA for overseas trade; Operated entirely by Filipinos; and Manned entirely by Filipinos.

CLASSIFICATION OF VESSELS AS PROPERTY Vessels are movable property, hence, may be the subject of chattel mortgage, which must be registered with the MARINA. SHIPS MANIFEST REQUIREMENT FOR ALL VESSELS A declaration of the ships entire cargo, the object of which is to furnish customs officers with a list to check against, to inform revenue officers what goods are being brought into a port of the country on a vessel. The requirement that a vessel must carry a manifest is not complied with even if a bill of lading can be presented because a bill of lading is just a declaration of a specific cargo rather than the entire cargo. MORTGAGE RIGHT OVER THE VESSEL VS. CLAIM OF PERSON WHO SUCCESSFULLY SALVAGED THE VESSEL Claim of person who successfully salvaged the vessel is entitled to better preference. (PAIC vs. Malayan Towage, May 24, 1989) VARIOUS WAYS OF ACQUIRING OWNERSHIP 1. Purchase, whether voluntary or necessary sale; 2. Construction; 3. Prescription (good faith = 3 years, otherwise 10 years); 4. Capture; 5. Donation; 6. Succession; and 7. Other lawful modes of acquisition. (Acquisition must be recorded in the Registry of Vessels so as to bind third persons) PARTICIPANTS IN MARITIME COMMERCE 1. SHIP OWNER: A person who has possession, control and management of the vessel and the consequent right to direct her navigation and receive the freight earned and paid, while his possession continues. If co-ownership, partnership is presumed established.

NECESSITY OF REGISTRATION Filipino Owned Vessel > 3 tons = register w/ MARINA (if corporation: at least 60% Filipino Owned) Vessel < 3 tons = registration is optional Vessel < 15 tons = issue Certificate of Philippine Registry Vessel 15 tons = issuance of Certificate is optional Vessel > 5 tons who does not take a Certificate of Philippine Registry shall be issued a Certificate of Ownership FOREIGN-OWNED VESSEL UNDER CHARTER OR LEASE TO A FILIPINO MAY BE ISSUED A TEMPORARY CERTIFICATE OF REGISTRATION; CONDITIONS

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The rule is well-entrenched in this jurisprudence that a ship owner may be held liable for the injuries to passengers notwithstanding the exclusively real and hypothecary nature of maritime law if fault can be attributed to the ship owner. (Heirs of de los Santos vs. CA, 186 SCRA 649) SHIP AGENT: A person entrusted with provisioning and representing the vessel in the port which it may be found. The term also includes the ship owner. (Chua vs. IAC, 166 SCRA 183) CAPTAINS AND MASTERS Qualifications Filipino, with contractual capacity and must have passed the required physical and mental exams. Nature of Position Triple position, i.e. general agent of the ship owner, technical director of the vessel, and represents the government of the country under whose flag he navigates. FIRST MATE (Sailing Mate) Second chief of the vessel. Takes the place of the captain in case of absence, sickness, or death. SECOND MATE MEMBERS OF THE CREW SUPERCARGO A person who discharges administrative duties assigned to him by the ship agent or the shippers, keeping an account and record of transactions as required in the accounting book of the captain. PILOT A person duly qualified, and licensed, to conduct a vessel into or out of ports, or in certain waters. DUTIES OF THE CAPTAIN 1. To bring on board the proper certificate and documents; 2. To have a copy of the Code of Commerce on board; 3. To keep a Log Book, Accounting Book and Freight Book; 4. To examine the ship before the voyage; 5. To stay on board during the loading and unloading of cargo; 6. To demand a pilot when entering or leaving a port; 7. To be on deck while entering or leaving a port; 8. To protest arrivals under stress; 9. To register necessary documents; 10. To hold in custody properties left by the deceased
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2. 3.

ABANDONMENT OF VESSEL INCLUDES: 1. Vessel; 2. Equipment; 3. Freightage; 4. Insurance proceeds, if any. MARITIME LIEN ON THE VESSEL: Negligence must be proved. EXCEPTION: For common carriers, loss, destruction or deterioration of the goods is right away attributable to the fault or negligence of the carrier. The burden is on the carrier to prove he observed extraordinary diligence.

4. 5. 6. 7.

HYPOTHECARY RULE (LIMITED LIABILITY DOCTRINE) No vessel, no liability. Total destruction of the vessel extinguishes maritime liens because there is no longer any res to which it can attach. (Monarch vs. CA, 33 SCRA 71) The liability of the carrier in connection with losses related to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which stands as the guaranty for their settlement. (Aboitiz vs. General, 217 SCRA 359) Does not apply when there is actual finding of negligence on the part of the vessel owner or agent. GENERAL RULE: If the vessel is abandoned, liability is extinguished. If the vessel is sank beyond recovery, liability is extinguished without prejudice to the insurers liability in appropriate cases. EXCEPTIONS: 1. Vessel is insured; 2. Claims under the Workmens Compensation Laws or similar labor laws; 3. Repairs before loss; 4. Injury or damage due to ship owners fault or to the concurrent negligence of the ship owner and the captain. (BPI vs. Pineda, 156 SCRA 404)

8.

CIVIL LIABILITY OF SHIP AGENT AND/OR SHIP OWNER EXTENDS TO: 1. All contracts of the captain, whether authorized or unauthorized, to repair, equip and provision the vessel; 2. Loss and damage to the goods loaded on the vessel without prejudice to the ship owner or the ship agent freeing themselves from liability by abandoning the vessel to the creditors.

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11. 12. 13. 14. 15. 16. To To To To To To passengers and crew members; follow instructions of the ship agent; render an accounting to the ship agent; observe rules to avoid collisions; leave the vessel last in case of wreck; protest shipwreck; comply with requirements of customs, health, etc. authorities at the port of arrival. DEATH OF A SEAMAN ENTITLES HEIRS TO THE FF: 1. Natural Death If by wages, compensation up to time of death; If by voyage, half of the amount of death occurs on voyage out; If by shares, none if before departure; full if after departure; 2. Death in defense of vessel full payment; 3. If captured in defense of vessel full pay; 4. If captured due to carelessness wages up to the date of capture. ADMIRALTY JURISDICTION OVER MARITIME CONTRACTS Must relate to the trade and business of the sea; Contract must provide for maritime services, maritime transactions, or maritime casualties; RTC has jurisdiction where claim >P100,000 or P200,000 (for Manila) Metropolitan, Municipal and MCTC where claim P100,000 (Summary Procedure)

LIABILITIES OF SHIP AGENT AND OF SHIP OWNER FOR ACTS DONE BY CAPTAIN TOWARDS PASSENGERS AND CARGOES MAKING THEM SOLIDARILY LIABLE TO LATTER: 1. 2. 3. 4. 5. 6. 7. 8. Damages to vessel and to cargo due to lack of skill and negligence; Thefts and robberies of the crew; Losses and fines for violation of laws; Damages due to mutinies; Damages due to misuse of powers; For deviations; For arrivals under stress; Damages due to non-observance of maritime regulations.

CHARTER PARTY 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 also a contract by virtue of which the owner or agent 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. (San Miguel vs. Heirs, 384 SCRA 87) CLASSES OF CHARTER PARTY 1. 2. 3. BAREBOAT OR DEMISE The charterer provides the crew, food and fuel. The charterer is liable for the consequences of the voyage as if he were the owner, except when vessel is unseaworthy. TIME CHARTER The vessel is chartered for a period of time or duration of a voyage. The charterer acquires the right to use the carrying capacity, facilities of the vessel, and he could designate the destinations. The owner retains possession and control of the vessel. VOYAGE OR TIME CHARTER Same conditions as in Time Charter. It is a contract for the hire of the vessel for one or a series of voyages. CONTRACT OF AFFREIGHTMENT The owner leases the boat or a part of it for the carriage of goods. It may take the form of a charter party or a carriage under a bill of lading. (Maritime vs. CA, 187 SCRA 346)
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CLASSES OF SEAMENS CONTRACTS 1. By the voyage; 2. By the month (wages); 3. By share of profits or freightage. JUST CAUSES FOR DISCHARGE OF SEAMAN WHILE CONTRACT SUBSISTS: 1. Perpetration of a crime; 2. Repeated insubordination, want of discipline; 3. Repeated incapacity and negligence; 4. Habitual drunkenness; 5. Physical incapacity; 6. Desertion.

JUST CAUSES FOR REVOCATION OF THE VOYAGE THEREBY AFFECTING SEAMENS CONTRACTS 1. War; 2. Blockade; 3. Prohibition to receive cargo at destination 4. Embargo; and 5. Inability of the vessel to navigate.

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BAREBOAT or DEMISE CHARTER Charterer becomes liable to others caused by its negligence. Charterer regarded as OWNER PRO HAC VICE for the voyage. Owner of the vessel relinquishes possession, command and navigation to charterer. OWNER PRO HAC VICE A charterer, in spite of the fact that somebody else is the true owner of the vessel, is treated as the owner of the chartered vessel, just for that one particular purpose only. Exists only in Demise or Bareboat Charter. Charterer assumes the customary rights and liabilities of the ship owner to third persons, and is held liable expense of the voyage and the wages of the seamen. CONTRACT OF AFFREIGHTMENT or TIME/ VOYAGE CHARTER Owner remains liable as carrier and must answer for any breach of duty. Charterer is not regarded as owner. The vessel owner retains possession, command and navigation of the ship. The amount paid by or recoverable from a charterer of a ship for the portion of the ships capacity which the latter contracted but failed to occupy. The liability for deadfreight is on the charterer. (NFA vs. CA, 311 SCRA 700)

DEMURRAGE The sum fixed in a charter party as a remuneration to the owner of the ship for the detention of his vessel beyond the number of days allowed by the charter party for loading or unloading or for sailing. Exists only when expressly stipulated. The shipper or charterer is liable for the payment of demurrage claims when he exceeds the period for loading or unloading as agreed upon or the agreed laydays.

RESCISSION OF CHARTER PARTY At request of Charterer: 1. By abandoning the charter and paying half of the freightage; 2. Error in tonnage or flag; 3. Failure to place the vessel at the charterers disposal; 4. Return of the vessel due to pirates, enemies or bad weather; and 5. Arrival at a port for repairs. At request of Ship Owner: 1. If the extra lay days terminate without the cargo being placed alongside the vessel; and 2. Sale by the owner of the vessel before loading by the charterer. Fortuitous Causes: (Just Causes for Revocation of Voyage) 1. War; 2. Blockade; 3. Prohibition to receive cargo; 4. Embargo; 5. Inability of the vessel to navigate. WHEN TO FILE A CLAIM (UNDER A BILL OF LADING) 1. 2. 3. A claim for lost goods 30 days from receipt of the last package of the goods. Failure to do so is fatal as it is a condition precedent to the accrual of the cause of action against the carrier. (Phil Am vs. Sweet Lines, 212 SCRA 194) An action for misdelivery of cargo under the Civil Code (NOT UNDER COGSA) prescribes in 10 years. The one year prescriptive period under COGSA applies only to loss or damage, not to misdelivery. Against the Arrastre Operator the suit should be preceded by a claim filed within 15 days from the discharge of the last cargo and the suit must be filed within two years from said discharge. (Union vs. Manila, 77 SCRA 359)

RIGHTS AND OBLIGATIONS OF SHIP OWNER/SHIP AGENT 1. If chartered wholly, not to accept cargo from others; 2. To observe represented capacity; 3. To unload cargo clandestinely placed; 4. To substitute another vessel if load is less than 3/5 of capacity; 5. To leave the port if charterer does not bring the cargo within the lay days and extra lay days allowed; 6. To place the vessel in a condition to navigate, otherwise freightage lost; and 7. To bring cargo to nearest neutral port in case of war or blockade. RIGHTS AND OBLIGATIONS OF CHARTERER 1. 2. 3. 4. 5. To To To To To pay the agreed charter price; pay freightage on unboarded cargo; pay losses to others for loading uncontracted cargo and illicit cargo; wait if the vessel needs repair; pay expenses for deviation.

DEADFREIGHT

CERTAIN INITIALS USED IN PURCHASE CONTRACTS OF GOODS FROM ABROAD:

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C.I.F. cost, insurance and freight F.O.B. free on board F.A.S. free alongside ship C and F cost and freight REQUISITES OF GENERAL AVERAGE 1. Common danger 2. Deliberate sacrifice 3. Success 4. Proper formalities and legal steps PROOF Proof is made at the port of repairs, if any is made, or in the port of unloading. LIQUIDATION Liquidation is done in the port of unloading if in the Philippines, or in the port of arrival, if in a foreign country. ARRIVALS UNDER STRESS An arrival of the vessel at a port not the destination on account of lack of provisions, wellfounded fear of seizure, privateers, or by reason of any accident of the sea disabling it to navigate. Expenses are borne by the ship owner, but if the arrival under stress is unlawful, the ship owner answers for damages to the owners of the cargo and the passengers. WHEN ARRIVAL UNDER STRESS IS NOT LAWFUL 1. 2. 3. 4. The lack of provisions is due to failure to carry the provisions necessary according to usage and customs; The risk of enemies is not well-known and manifest; The defect of the vessel is a consequence of an improper repair; Malice, negligence, lack of foresight, lack of skill of the captain caused the damage. ALLISION The impact between a moving vessel and a stationary one.

TRANSSHIPMENT The act of taking cargo from one ship and loading it to another. LOAN ON BOTTOMRY A loan made by the ship owner or ship agent guaranteed by the vessel itself and repayable on arrival of the vessel at destination.

LOAN ON RESPONDENTIA A loan taken on security of the cargo laden on a vessel, and repayable on the safe arrival of the cargo at destination. BOTTOMRY/RESPONDENTIA Not subject to Usury Law Liability of the borrower is contingent on the safe arrival of the vessel or cargo The last lender is a preferred creditor ORDINARY LOAN Subject to Usury Law Not subject to any contingency The first lender is a preferred creditor

COLLISION The impact of two vessels, both of which are moving.

AVERAGE An extraordinary or accidental expense incurred during the voyage in order to preserve the cargo, the vessel or both, and all damages or deterioration suffered by the vessel from departure to the port of destination, and the cargo from the port of loading to the port of consignment. CLASSES OF AVERAGES 1. 2. SIMPLE OR PARTICULAR AVERAGE includes expenses and damages caused to the vessel or cargo which have not inured to the common benefit and borne by their respective owners. GROSS OR GENERAL AVERAGE includes all damages and expenses which are deliberately caused in order to save the vessel, its cargo, or both at the same time, from a real and known risk.

ZONES OF TIME IN THE COLLISION OF VESSELS FIRST ZONE all time up to the moment when risk of collision begins. SECOND ZONE time between moment when risk of collision begins and the moment it becomes a practical certainty. THIRD ZONE time when collision has become a practicable certainty to the point of actual impact.

DOCTRINE OF ERROR IN EXTREMIS Sudden movement made by a faultless vessel during the 3rd Zone of collision with another vessel which is at fault during the 2nd Zone. Even if such sudden movement wrong, no responsibility will fall on said faultless vessel.
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RULES AS TO LIABILITY IN CASE OF COLLISION 1. One vessel at fault: The owner of the vessel at fault during the 2nd Zone and his ship agent are solidarily liable to the owner of the innocent vessel and to the cargo owners for all of their losses and damages. (NDC vs. CA, 164 SCRA 593) 2. Both vessels at fault: Each ship owner shall bear his own damage as to the vessel but shall be solidarily liable for the damage to the cargo in both vessels. 3. Fault undeterminable (DOCTRINE OF INSCRUTABLE FAULT): In a collision, the vessel at fault shall indemnify the damages sustained or losses incurred, and if both vessels are at fault, each shall suffer its own damages and both vessels shall be jointly and solidarily liable to cargo owners for damaged cargo. 4. Collision due to Fortuitous Event: Where none of the vessel are at fault, each vessel and each cargo owner will bear their respective damages. 5. Collision of a Moving Vessel against a Stationary Object: In American jurisprudence, there is a presumption of fault against the moving vessel that strikes a stationary object such as a dock or navigational aid. In the absence of sufficient proof in rebuttal, the presumption of fault attaches to a moving vessel which collides with a fixed object and makes a prima facie of fault against the vessel. Logic and experience support this presumption. (Far Eastern vs. CA, 297 SCRA 30) Under Article 587 of the Code of Commerce, the ship owner or ship agent may exempt themselves from liability by abandoning the vessel with all her equipment and the freight it may have earned during the voyage. If there is insurance over the vessel, abandonment covers the insurance proceeds while the vessel itself shall be abandoned in favor of the insurer.

PROCEDURE AND PRESCRIPTIVE PERIOD FOR CLAIMS 1. Coastwise or within the Philippines WHEN TO FILE A CLAIM WITH CARRIER: (Condition Precedent) a. Immediately if damage is apparent; b. Within 4 hours from delivery of damage is not apparent WHEN TO FILE A CASE IN COURT: a. Within 6 years no bill of lading b. Within 10 years with bill of lading 2. International Carriage from Foreign Port to the Philippines (COGSA) WHEN TO FILE A CLAIM WITH CARRIER: (NOT a Condition Precedent) a. Upon discharge of the goods, if the damage is apparent, claim should be filed immediately; b. If damage is not apparent, claim should be filed within 3 days from delivery. WHEN TO FILE COURT CASE: a. Within 1 year from discharge. CARRIAGE OF GOODS BY SEA ACT (COGSA) CA 65 Suppletory to the Civil Code and the Code of Commerce in the carriage of goods from foreign ports to the Philippines. (Eastern vs. IAC, 150 SCRA 463).

PREREQUISITE TO RECOVERY A MARITIME PROTEST is a written statement made under oath by the captain or master of a vessel, after the occurrence of an accident or disaster in which the vessel or cargo is lost damaged, with respect to the circumstances attending such occurrence. Protest is made within 24 hours before the competent authority at the place where the accident or disaster happened or at the first port of arrival, if the Philippines; or to a Philippine Consul, if the incident took place abroad. Injuries to persons and damage to the cargo of owners not on board on collision time, need not be protested.

SHIPWRECK The loss of a vessel at sea as a consequence of its grounding, or running against an object in the sea or on the coast. If the wreck was due to malice, negligence or lack of skill of the captain, the owner of the vessel may demand indemnity from said captain. ABANDONMENT
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