Formatted Transportation Law

Transportation law
BarOps Head
I
PY Caunan
Acads Head
I
Beth Liceralde
Subject Head
I
Justin Christopher
C. Mendoza
based on the outline and class notes !ro"
Pro!. #odri$o Lope %ui"bo&s 'ransporation La( class
)
st
se"ester* AY +,,-.+,,/0
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I. 4eneral Considerations
'ransportation La(
I. General Considerations
A. Public Utilities
1987 Constitution, Article XII
Section 11
No franchise, certificate, or any other form of
authorization for the operation of a public utility
shall be granted except to citizens of the
Philippines or to corporations or associations
organized under the laws of the Philippines, at
least sixty per centum of whose capital is owned by
such citizens; nor shall such franchise, certificate,
or authorization be exclusive in character or for a
longer period than fifty years. Neither shall any
such franchise or right be granted except under the
condition that it shall be subject to amendment,
alteration, or repeal by the Congress when the
common good so reuires. !he "tate shall
encourage euity participation in public utilities by
the general public. !he participation of foreign
investors in the governing body of any public utility
enterprise shall be limited to their proportionate
share in its capital, and all the executive and
managing officers of such corporation or
association must be citizens of the Philippines.
Section 17
#n times of national emergency, when the public
interest so reuires, the "tate may, during the
emergency and under reasonable terms prescribed
by it, temporarily ta$e over or direct the operation
of any privately%owned public utility or business
affected with public interest.
Section 18
!he "tate 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 &overnment.
Section 19
!he "tate shall regulate or prohibit monopolies
when the public interest so reuires. No
combinations in restraint of trade or unfair
competition shall be allowed.
The Public Service Law, CA 1!, as a"en#e#
Sec. 1$%b&
!he term 'public service' includes every person
that now or hereafter may own, operate, manage,
or control in the Philippines, for hire or
compensation, with general or limited clientele,
whether permanent, occasional or accidental, and
done for general business purposes, any common
carrier, railroad, street railway, traction railway,
sub%way motor vehicle, either for freight or
passenger, or both with or without fixed route and
whether may be its classification, freight or carrier
service of any class, express service, steamboat or
steamship line, pontines, ferries, and water craft,
engaged in the transportation of passengers or
freight or both, shipyard, marine railways, marine
repair shop, (warehouse) wharf or doc$, 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, !hat 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 mar$eting of
agricultural products of such third party or third
parties shall not be considered as operating a
public service for the purposes of this ,ct.
'(AT IS A PU)LIC UTILIT*+
,ilusan- .a/o Uno Labor Center v. 0arcia
%199&
Public utilities are privately owned and operated
businesses whose services are essential to the
general public. !hey are enterprises which specially
cater to the needs of the public and conduce to
their comfort and convenience. ,s such, public
utility services are impressed with public interest
and concern. -hen, 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.
Albano v. 1e/es %1989&
.ranchises issued by Congress are not reuired
before each and every public utility may operate.
, public utility is a business or service engaged in
regularly supplying the public with some
commodity or service of public conseuence, such
as electricity, gas, water, transportation, telephone
or telegraph services. ,part from statutes which
define 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. ,s its name indicates, however,
the term public utility implies a public use and
service to the public.
'(23 IS A )USI32SS A PU)LIC UTILIT*+
-hen it involves a commodity or service of
public conseuence.
4 C53C2PTS 56 PU)LIC UTILIT* U3721 T(2 1987
C53STITUTI538
/. , public utility is a partly nationalized business
endeavor
0. #t is a business affected with the public interest.
12national emergency3; 2general welfare3;
2common good34
6P LA< BA#OPS +,,/ O31 6P LA<
) o! /)
'ransportation La(
4 T2STS 651 72T21.I3I30 PU)LIC UTILIT*8
/. #s it engaged in regularly supplying the public
with some commodity or service 1per definition
in Albano v. Reyes below4
0. #f 5/ is uncertain, is it a public service as
defined in the Public "ervice 6aw under C, /78
"ec /91b4: #f it falls under any one of the
examples given under C, /78 "ec /91b4, then it
is a public utility.
'(AT 752S 9120ULA1L* SUPPL*I30 T(2 PU)LIC:;
.2A3+
!he utility must hold itself out to the public as
a public utility by demand and as a matter of right,
and not by permission. !o determine what
constitutes regularity, loo$ at it from the
perspective of the public, and not the operator.
#t is a service or a readiness to serve an
indefinite portion of the population subject only to
the limitations of the service as given by the grant
such that (the utility) incurs a liability as a violation
of its duty if it refuses, such that the availment of
the service has become, through time, a matter of
right and not of mere privilege. 1also in US v. Tan
Piaco4
A12 ALL PU)LIC UTILITI2S C5..57ITI2S 51 S21<IC2
56 PU)LIC C53S2=U23C2+
;es. ,ll public utilities have a public
conseuence. <ut not all businesses bearing public
conseuence are public utilities. !his is because
almost all types of business have some form of
regulation from the "tate.
T5 '(5. 752S 9PU)LIC; 12621 T5+ IS T(2 '517
9PU)LIC; I3 9PU)LIC UTILIT*; T(2 SA.2
I3 9PU)LIC S21<IC2;+
!here are three senses of the word 2public3 in
!ransportation 6aw* a4 public utility; b4 public
service; and c4 definition of a common carrier
under ,rt. /=90 of the Civil Code.
!o determine a public utility, the two tests
above > the definition under Albano v. Reyes
apply.
'(AT IS A PU)LIC S21<IC2+
,ilusan- .a/o Uno Labor Center v. 0arcia >r.
%199&
#n determining public need, the presumption
of need for a service shall be deemed in favor of
the applicant. !he burden of proving that there is
no need for a proposed service shall be with the
oppositor1s4.
Public convenience and necessity exists when
the proposed facility or service meets a reasonable
want of the public and supply a need which the
existing facilities do not adeuately supply. !he
existence or nonexistence of public convenience
and necessity is therefore a uestion of fact that
must be established by evidence, real and+or
testimonial; empirical data; statistics and such
other means necessary, in a public hearing
conducted for that purpose. !he object and
purpose of such procedure, among other things, is
to loo$ out for, and protect, the interests of both
the public and the existing transport operators.
Albano v. 1e/es %1989&
.ranchises issued by Congress are not
reuired before each and every public utility may
operate.
, public utility is a business or service
engaged in regularly supplying the public with
some commodity or service of public conseuence,
such as electricity, gas, water, transportation,
telephone or telegraph services. ,part from
statutes which define 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. ,s its name indicates,
however, the term public utility implies a public use
and service to the public.
Tata# v 0arcia
-hat constitutes a public utility is not their
ownership but their use to serve the public.
PAL v. Civil Aeronautics )oar# %1997&
-?N 2certificates of Public Convenience and
Necessity3 1franchise reuired4 as used in @, ==8
to authorize the <oard is different from
2Certificates of Public Convenience3 1no franchise
reuired4: No
!here is no authoritative basis in
distinguishing a Certificate of Public Convenience
and Necessity 1franchise reuired4 and a Certificate
of Public Convenience 1no franchise reuired4
based only on the use of the words convenience
and necessity. !he use of the word 2necessity3 in
conjunction with 2public convenience3 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 reuirements for the
issuance of the same. #t is the law which
determines the reuisites for the issuance of such
certification, and not the title indicating the
certificate.
'(AT IS T(2 7I662123C2 )2T'223 A
PU)LIC UTILIT* A37 A PU)LIC
S21<IC2+
.or all intents and purposes, they are the
same and are used interchangeably.
Aowever, public utility is a broader concept
that embraces public service. , public service is
necessarily a public utility, but not all public
utilities are public services.
'(23 IS A PU)LIC UTILIT* 35T A PU)LIC
S21<IC2+
#f it is not included in the enumeration in the
Public "ervice ,ct 1C, /78 "ec. /91b44 and Albano
v. Reyes.
(5' 75 T(2* 7I6621 I3 C53STITUTI53AL
12ST1ICTI53S A37 12=UI12.23TS+
#f a business is a public utility, then it is
subject to the limitations and restrictions provided
for in the /BC= Constitution 1,rt /0 "ecs.
//,/=,/C,/B4 "ince a public service is necessarily a
public utility, therefore public services are subject
+ o! /)
'ransportation La(
to the same Constitutional limitations and
restrictions.
#f a public utility is not a public service, it is
still subject to the same Constitutional limitations
and restrictions.
!herefore, public utility D Constitution
public service D Constitution E Public
"ervice ,ct
). Trans?ortation
726I3ITI53
!he movement of goods or persons from one
place to another, by a carrier. 1<lac$Fs 6aw
Gictionary4
, 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. #t is the
removal of goods or persons from one place to
another.
PU)LIC 3ATU12
#t is for public use, which means that the use
is not confined to privileged individuals, but is
instead open to an indefinite public. #t is this
indefinite or unrestricted uality that gives it its
public character. !he true criterion by which to
judge the character of the use is whether the public
may enjoy it by right or by permission. !here must
be, in general, a right under the law which compels
the owner to give the service for the general
public.
PU)LIC S21<IC2 ACT
T(2 PU)LIC S21<IC2 LA' %CA 1!&
1,s amended, and as modified particularly by PG
No. /, #ntegrated @eorganization Plan and H? I784
C(APT21 I
510A3I@ATI53
S2CTI53 1
!his ,ct shall be $nown as the 'Public "ervice ,ct.'
S2CTI53 4
!here is created under the Gepartment of Justice a
commission which shall be designated and $nown
as the Public "ervice Commission, composed of
one Public "ervice Commissioner and five ,ssociate
Commissioners, and which shall be vested with the
powers and duties hereafter specified. -henever
the word 'Commission' is used in this ,ct, it shall
be held to mean the Public "ervice Commission,
and whenever the word 'Commissioner' is used in
this ,ct it shall be held to mean the Public "ervice
Commissioner or anyone of the ,ssociate
Commissioners. !he Public "ervice Commissioner
and the ,ssociate Public "ervice Commissioners
shall be natural born citizens and residents of the
Philippines, not under thirty years of age; members
of the <ar of the Philippines, with at least five
years of law practice or five years of employment
in the government service reuiring a lawyerKs
diploma; and shall be appointed by the President of
the Philippines, with the consent of the Commission
on ,ppointments of the Congress of the
Philippines* Provided, however, !hat the present
Commissioner and the personnel of the
Commission shall continue in office without the
necessity of re%appointment. !he Commissioners
shall have the ran$ and privilege of retirement of
Judges of the Courts of .irst #nstance. 1,s
amended by @epublic ,ct Nos. /=C and 08==4
S2CTI53 $
!he Commissioner and ,ssociate Commissioners
shall hold office until they reach the age of seventy
years, or until removed in accordance with the
procedures prescribed in section one hundred and
seventy%three of ,ct Numbered !wenty%seven
hundred and eleven, $nown as the @evised
,dministrative Code* Provided, however, !hat upon
retirement any Commissioner of ,ssociate
Commissioner shall be entitled to all retirement
benefits and privileges for Judges of the Courts of
.irst #nstance or under the retirement law to which
he may be entitled on the date of his retirement. #n
case of the absence, for any reason, of the Public
"ervice Commissioner, the ,ssociate Commissioner
with seniority of appointment shall act as
Commissioner. #f on account of absence, illness, or
incapacity of any of three Commissioners, or
whenever by reason of temporary disability of any
Commissioner or of a vacancy occurring therein,
the reuisite number of Commissioners necessary
to render a decision or issue an order in any case is
not present, or in the event of a tie vote among the
Commissioners, the "ecretary of Justice may
designate such number of Judges of the Courts of
.irst #nstance, or such number of attorneys of the
legal division of the Commission, as may be
necessary to sit temporarily as Commissioners in
the Public "ervice Commission.
!he Public "ervice Commission shall sit individually
or as a body en banc or in two divisions of three
Commissioners each. !he Public "ervice
Commissioner shall preside when the Commission
sits en banc and in one division. #n the other
division, the ,ssociate Commissioner with seniority
of appointment in that division shall preside. .ive
Commissioners shall constitute a uorum for
sessions en banc and two Commissioners shall
constitute a uorum for the sessions of a division.
#n the absence of a uorum, the session shall be
adjourned until the reuisite number is present.
,ll the powers herein vested upon the Commission
shall be considered vested upon any of the
Commissioners, acting either individually or jointly
as hereinafter provided. !he Commissioners shall
euitably divide among themselves all pending
cases and those that may hereafter be submitted
to the Commissioner, in such manner and form as
they may determine, and shall proceed to hear and
determine the case assigned to each or to their
respective divisions, or to the Commission en banc
as follows* uncontested cases, except those
pertaining to the fixing of rates, shall be decided by
one Commissioner; contested cases and all cases
involving the fixing of rates shall be decided by the
7 o! /)
'ransportation La(
Commission in division and the concurrence of at
least two Commissioners in the division shall be
necessary for the promulgation of a decision or
non%interlocutory order in these cases* Provided,
however, !hat any motion for reconsideration of a
decision or non%interlocutory order of any
Commissioner or division shall be heard directly by
the Commission en banc and the concurrence of at
least four Commissioners shall be necessary for the
promulgation of a final decision or order resolving
such motion for reconsideration. 1,s amended by
@epublic ,ct Nos. =09 and 08==4
S2CTI53
!he Public "ervice Commissioner shall receive an
annual compensation of thirteen thousand pesos;
and each of the ,ssociate Commissioners an
annual compensation of twelve thousand pesos.
!he Commissioners shall be assisted by one chief
attorney, one finance and rate regulation officer,
one chief utilities regulation engineer, one chief
accountant, one transportation regulation chief,
one secretary of the Public "ervice Commission,
and three public utilities advisers who shall receive
an annual compensation of not less than ten
thousand eight hundred pesos each; five assistant
chiefs of division who shall receive an annual
compensation of not less than nine thousand six
hundred pesos each; twelve attorneys who shall
receive an annual compensation of not less than
nine thousand pesos each; and a technical and
confidential staff to be composed of two certified
public accounts, two electrical engineers, two
mechanical or communication engineers, and two
special assistants who shall receive an annual
compensation of not less than seven thousand two
hundred pesos each. 1,s amended by @epublic ,ct
Nos. =09, 08== and 9=B04
S2CTI53 A
!he Public "ervice Commissioner, the ,ssociate
Public "ervice Commissioners, and all other officers
and employees of the Public "ervice Commission
shall enjoy the same privileges and rights as the
officer and employees of the classified civil service
of the &overnment of the Philippines. !hey shall
also be entitled to receive from the &overnment of
the Philippines their necessary travelling expenses
while travelling on the business of the Commission,
which shall be paid on proper voucher therefor,
approved by the "ecretary of Justice, out of funds
appropriated for the contingent expenses of the
Commission.
-hen the exigency of the service so reuires and
with the approval of the "ecretary of Justice, and
subject to the provisions of Commonwealth ,ct
Numbered !wo hundred forty%six, as amended,
funds may be set aside from the appropriations
provided for the Commission and+or from the fees
collected under "ection forty of this ,ct to defray
the expenses to be incurred by the Public "ervice
Commissioner or any of the ,ssociate
Commissioners, officers or employees of the
Commission to be designated by the
Commissioner, with the approval of the "ecretary
of Justice, in the study of modern trends in
supervision and regulation of public services. 1,s
amended by @epublic ,ct No. 9=B04
S2CTI53 !
!he "ecretary of Justice, upon recommendation of
the Public "ervice Commissioner, shall appoint all
subordinate officers and employees of the
Commission as may be provided in the
,ppropriation ,ct. !he Public "ervice Commissioner
shall have general executive control, direction, and
supervision over the wor$ of the Commission and
of its members, body and personnel, and over all
administrative business. 1,s amended by @epublic
,ct Nos. /=C and 9=B04
S2CTI53 7
!he "ecretary of the Commission, under the
direction of the Commissioner, shall have charge of
the administrative business of the Commission and
shall perform such other duties as may be reuired
of him. Ae shall be the recorder and official
reporter of the proceedings of the Commission and
shall have authority to administer oaths in all
matters coming under the jurisdiction of the
Commission. Ae shall be the custodian of the
records, maps, profiles, tariffs, itineraries, reports,
and any other documents and papers filed with the
Commission or entrusted to his care and shall be
responsible therefor to the Commission. Ae shall
have authority to designate from time to time any
of his delegates to perform the duties of Geputy
"ecretary with any of the Commissioners.
S2CTI53 8
!he Commission shall furnish the "ecretary such of
its findings and decisions as in its judgment may
be of general public interest; the "ecretary shall
compile the same for the purpose of publication in
a series of volumes to be designated '@eports of
the Public "ervice Commission of the Philippines,'
which shall be published in such form and manner
as may be best adapted for public information and
use, and such authorized publications shall be
competent evidence of the reports and decisions of
the Commission therein contained without any
further proof or authentication thereof.
S2CTI53 9
No member or employee of the Commission shall
have any official or professional relation with any
public service as herein defined, or hold any office
of profit or trust with the &overnment of the
Philippines.
S2CTI53 1B
!he Commission shall have its office in the City of
Lanila or at such other place as may be
designated, and may hold hearings on any
proceedings at such times and places, within the
Philippines, as it may provide by order in writing*
Provided, !hat during the months of ,pril and Lay
of each year, at least three Commissioners shall be
on vacation in such manner that once every two
years at least three of them shall be on duty during
,pril and Lay* Provided, however, !hat in the
interest of public service, the "ecretary of Justice
may reuire any or all the Commissioners not on
duty to render services and perform their duties
during the vacation months. 1,s amended by
@epublic ,ct Nos. /=8 and 9=B04
8 o! /)
'ransportation La(
S2CTI53 11
!he Commission shall have the power to ma$e
needful rules for its &overnment and other
proceedings not inconsistent with this ,ct and shall
adopt a common seal, and judicial notice shall be
ta$en for such seal. !rue copies of said rules and
other amendments shall be promptly furnished to
the <ureau of Printing and shall be forthwith
published in the ?fficial &azette.
SECTION 13
(a) The Commission shall have jurisdiction,
supervision, and control over all public services
and their franchises, equipment, and other
properties, and in the eercise of its authority, it
shall have the necessary po!ers and the aid of the
public force" Provided, That public services o!ned
or operated by #overnment entities or
#overnment$o!ned or controlled corporations shall
be re#ulated by the Commission in the same !ay
as privately$o!ned 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,
!hether privately$o!ned, or o!ned or operated by
any %overnment controlled corporation or
instrumentality to obtain certificate of public
convenience or to prescribe their definite routes or
lines of service.
(b) The term &public service& includes every
person that no! or hereafter may o!n, operate,
mana#e, or control in the Philippines, for hire or
compensation, !ith #eneral or limited clientele,
!hether permanent, occasional or accidental, and
done for #eneral business purposes, any common
carrier, railroad, street rail!ay, traction rail!ay,
sub$!ay motor vehicle, either for frei#ht or
passen#er, or both !ith or !ithout fied route and
!hether may be its classification, frei#ht or carrier
service of any class, epress service, steamboat or
steamship line, pontines, ferries, and !ater craft,
en#a#ed in the transportation of passen#ers or
frei#ht or both, shipyard, marine rail!ays, marine
repair shop, '!arehouse( !harf or doc), ice plant,
ice$refri#eration plant, canal, irri#ation system,
#as, electric li#ht, heat and po!er !ater supply
and po!er, petroleum, se!era#e system, !ire or
!ireless communications system, !ire or !ireless
broadcastin# stations and other similar public
services" Provided, ho!ever, That a person
en#a#ed in a#riculture, not other!ise a public
service, !ho o!ns a motor vehicle and uses it
personally and*or enters into a special contract
!hereby said motor vehicle is offered for hire or
compensation to a third party or third parties
en#a#ed in a#riculture, not itself or themselves a
public service, for operation by the latter for a
limited time and for a specific purpose directly
connected !ith the cultivation of his or their farm,
the transportation, processin#, and mar)etin# of
a#ricultural products of such third party or third
parties shall not be considered as operatin# a
public service for the purposes of this Act.
(c) The !ord &person& includes every individual,
co$partnership, joint$stoc) company or
corporation, !hether domestic or forei#n, their
lessees, trustees, or receivers, as !ell as any
municipality, province, city, #overnment$o!ned or
controlled corporation, or a#ency of the
%overnment of the Philippines, and !hatever other
persons or entities that may o!n or possess or
operate public services. +As amended by Com. Act
,-, and RA .o. /0112
SECTION 14
The follo!in# are eempted from the provisions of
the precedin# section"
(a) 3arehouses4
(b) 5ehicles dra!n by animals and bancas moved
by oar or sail, and tu#boats and li#hters4
(c) Airships !ithin the Philippines ecept as
re#ards the fiin# of their maimum rates on
frei#ht and passen#ers4
(d) Radio companies ecept !ith respect to the
fiin# of rates4
(e) Public services o!ned or operated by any
instrumentality of the .ational %overnment or by
any #overnment$o!ned or controlled corporation,
ecept !ith respect to the fiin# of rates. +As
amended by Com. Act ,-,, RA .o. /678, and RA
.o. /0112
SECTION 15
3ith the eception of those enumerated in the
precedin# section, no public service shall operate
in the Philippines !ithout possessin# a valid and
subsistin# certificate from the Public Service
Commission )no!n 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
authori9ation to do business !ill 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
precedin# para#raph 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
depreciation4 and li)e!ise, that the certificate shall
be valid only for a definite period of time4 and that
the violation of any of these conditions shall
produce the immediate cancellation of the
certificate !ithout the necessity of any epress
action on the part of the Commission.
:n estimatin# the depreciation, the effect of the
use of the equipment, its actual condition, the a#e
of the model, or other circumstances affectin# its
value in the mar)et shall be ta)en into
consideration.
The fore#oin# is li)e!ise applicable to any
etension or amendment of certificates actually in
force and to those !hich may hereafter be issued,
to permit to modify itineraries and time schedules
of public services, and to authori9ations to rene!
and increase equipment and properties.
SECTION 16
Proceedin#s of the Commission, upon notice and
hearin#. $ The Commission shall have po!er, upon
proper notice and hearin# in accordance !ith the
rules and provisions of this Act, subject to the
> o! /)
'ransportation La(
limitations and eceptions mentioned and savin#
provisions to the contrary"
(a) To issue certificates !hich shall be )no!n as
certificates of public convenience, authori9in# the
operation of public service !ithin the Philippines
!henever the Commission finds that the operation
of the public service proposed and the
public interest in a proper and suitable manner.
Provided, That thereafter, certificates of public
convenience and certificates of public convenience
and necessity !ill be #ranted only to citi9ens of the
Philippines or of the United States or to
corporations, co$partnerships, associations or
joint$stoc) companies constituted and or#ani9ed
under the la!s of the Philippines4 Provided, That
sity per centum of the stoc) or paid$up capital of
any such corporations, co$partnership, association
or joint$stoc) company must belon# entirely to
citi9ens of the Philippines or of the United States"
Provided, further, That no such certificates shall be
issued for a period of more than fifty years.
(b) To approve, subject to constitutional
limitations any franchise or privile#e #ranted under
the provisions of Act .o. Si ;undred and Sity$
seven, as amended by Act .o. <ne Thousand and
t!enty$t!o, by any political subdivision of the
Philippines !hen, in the jud#ment of the
Commission, such franchise or privile#e !ill
properly conserve the public interests, and the
Commission shall in so approvin# 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 !hen such is required or provided by any
la! or franchise.
(c) To fi and determine individual or joint rates,
tolls, char#es, classifications, or schedules thereof,
as !ell as commutation, milea#e, )ilometra#e, and
other special rates !hich shall be imposed
observed and follo!ed thereafter by any public
service" Provided, That the Commission may, in its
discretion, approve rates proposed by public
services provisionally and !ithout necessity of any
hearin#4 but it shall call a hearin# thereon !ithin
thirty days, thereafter, upon publication and notice
to the concerns operatin# 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 !ith the public
service of such operator for the purpose of fiin#
the rates.
(d) To fi just and reasonable standards,
classifications, re#ulations, practices,
measurement, or service to be furnished, imposed,
observed, and follo!ed thereafter by any public
service.
(e) To ascertain and fi adequate and serviceable
standards for the measurement of quantity,
quality, pressure, initial volta#e, or other condition
pertainin# to the supply of the product or service
rendered by any public service, and to prescribe
reasonable re#ulations for the eamination and
test of such product or service and for the
measurement thereof.
(f) To establish reasonable rules, re#ulations,
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 re#ards the
manner of furnishin# the same as !ell as the
maintenance of the necessary material and
equipment.
(h) To require any public service to establish,
construct, maintain, and operate any reasonable
etension of its eistin# facilities, !here in the
jud#ment of said Commission, such etension is
reasonable and practicable and !ill furnish
sufficient business to justify the construction and
maintenance of the same and !hen the financial
condition of the said public service reasonably
!arrants the ori#inal ependiture required in
ma)in# and operatin# such etension.
(i) To direct any railroad, street rail!ay or traction
company to establish and maintain at any junction
or point of connection or intersection !ith any
other line of said road or trac), or !ith any other
line of any other railroad, street rail!ay or traction
to promote, such just and reasonable connection
as shall be necessary to promote the convenience
of shippers of property, or of passen#ers, and in
li)e manner direct any railroad, street rail!ay, or
traction company en#a#ed in carryin#
merchandise, to construct, maintain and operate,
upon reasonable terms, a s!itch connection !ith
any private sidetrac) !hich may be constructed by
any shipper to connect !ith the railroad, street
rail!ay or traction company line !here, in the
jud#ment of the Commission, such connection is
reasonable and practicable and can be out in !ith
safety and !ill furnish sufficient business to justify
the construction and maintenance of the same.
(j) To authori9e, in its discretion, any railroad,
street rail!ay or traction company to lay its trac)s
across the trac)s of any other railroad, street
rail!ay or traction company or across any public
hi#h!ay.
(k) To direct any railroad or street rail!ay
company to install such safety devices or about
such other reasonable measures as may in the
jud#ment of the Commission be necessary for the
protection of the public are passin# #rade crossin#
of +82 public hi#h!ays and railroads, +/2 public
hi#h!ays and streets rail!ay, or +72 rail!ays and
street rail!ays.
(l) To fi and determine proper and adequate rates
of depreciation of the property of any public
service !hich !ill be observed in a proper and
adequate depreciation account to be carried for the
protection of stoc)holders, bondholders or
creditors in accordance !ith such rules,
re#ulations, and form of account as the
Commission may prescribe. Said rates shall be
sufficient to provide the amounts required over and
above the epense of maintenance to )eep such
property in a state of efficiency correspondin# to
the pro#ress of the industry. =ach public service
shall conform its depreciation accounts to the rates
so determined and fied, and shall set aside the
moneys so provided for out of its earnin#s and
carry the same in a depreciation fund. The income
from investments of money in such fund shall
- o! /)
'ransportation La(
li)e!ise be carried in such fund. This fund shall not
be epended other!ise than for depreciation,
improvements, ne! construction, etensions or
conditions to the properly of such public service.
(m) To amend, modify or revo)e at any time
certificate issued under the provisions of this Act,
!henever the facts and circumstances on the
stren#th of !hich said certificate !as issued have
been misrepresented or materially chan#ed.
(n) To suspend or revo)e any certificate issued
under the provisions of this Act !henever the
holder thereof has violated or !illfully and
contumaciously refused to comply !ith any order
rule or re#ulation of the Commission or any
provision of this Act" Provided, That the
Commission, for #ood cause, may prior to the
hearin# suspend for a period not to eceed thirty
days any certificate or the eercise of any ri#ht or
authority issued or #ranted under this Act by order
of the Commission, !henever such step shall in the
jud#ment of the Commission be necessary to avoid
serious and irreparable dama#e or inconvenience
to the public or to private interests.
(o) To fi, determine, and re#ulate, as the
convenience of the state may require, a special
type for auto$busses, truc)s, and motor truc)s to
be hereafter constructed, purchased, and operated
by operators after the approval of this Act4 to fi
and determine a special re#istration fee for auto$
buses, truc)s, and motor truc)s so constructed,
purchased and operated" Provided, That said fees
shall be smaller than more those char#ed for auto$
busses, truc)s, and motor truc)s of types not
made re#ulation under the subsection.
SECTION 18
:t shall be unla!ful for any individual, co$
partnership, association, corporation or joint$stoc)
company, their lessees, trustees or receivers
appointed by any court !hatsoever, or any
municipality, province, or other department of the
%overnment of the Philippines to en#a#e in any
public service business !ithout havin# first secured
from the Commission a certificate of public
convenience or certificate of public convenience
and necessity as provided for in this Act, ecept
#rantees of le#islative franchises epressly
eemptin# such #rantees from the requirement of
securin# a certificate from this Commission as !ell
as concerns at present eistin# epressly
eempted from the jurisdiction of the Commission,
either totally or in part, by the provisions of section
thirteen of this Act.
SECTION 1
Unla!ful Acts. $ :t shall be unla!ful for any public
service"
(a) To provide or maintain any service that is
unsafe, improper, or inadequate or !ithhold or
refuse any service !hich can reasonably be
demanded and furnished, as found and determined
by the Commission in a final order !hich shall be
conclusive and shall ta)e effect in accordance !ith
this Act, upon appeal of other!ise.
(b) To ma)e or #ive, directly or indirectly, by itself
or throu#h its a#ents, attorneys or bro)ers, or any
of them, discounts or rebates on authori9ed rates,
or #rant credit for the payment of frei#ht char#es,
or any undue or unreasonable preference or
advanta#e 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 disadvanta#e in any
respect !hatsoever4 to adopt, maintain, or enforce
any re#ulation, practice or measurement !hich
shall be found or determined by the Commission to
be unjust, unreasonable, unduly preferential or
unjustly discriminatory in a final order !hich shall
be conclusive and shall ta)e effect in accordance
!ith the provisions of this Act, upon repeal or
other!ise.
(g) To sell, alienate, mort#a#e, encumber or lease
its property, franchises, certificates, privile#es, or
ri#hts or any part thereof4 or mer#e or consolidate
its property, franchises privile#es or ri#hts, or any
part thereof, !ith those of any other public service.
The approval herein required shall be #iven, after
notice to the public and hearin# the persons
interested at a public hearin#, if it be sho!n that
there are just and reasonable #rounds for ma)in#
the mort#a#ed or encumbrance, for liabilities of
more than one year maturity, or the sale,
alienation, lease, mer#er, 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 !hich the same is to be consummated
shall be fied in the order of approval" Provided,
ho!ever, that nothin# herein contained shall be
construed to prevent the transaction from bein#
ne#otiated 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.
(h) To sell or re#ister in its boo)s the transfer or
sale of shares of its capital stoc), if the result of
that sale in itself or in connection !ith 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 re#istered in the boo)s of
the public service corporation. .othin# herein
contained shall be construed to prevent the holdin#
of shares la!fully acquired. +As amended by Com.
Act .o. ,-,.2
(i) To sell, alienate or in any manner transfer
shares of its capital stoc) to any alien if the result
of that sale, alienation, or transfer in itself or in
connection !ith another previous sale shall be the
reduction to less than sity per centum of the
capital stoc) belon#in# to Philippine citi9ens. Such
sale, alienation or transfer shall be void and of no
effect and shall be sufficient cause for orderin# the
cancellation of the certificate.
* Transit v. 3L1C
!he sale, alienation or other encumbrance of a
public service operatorFs properties reuires the
previous approval and authorization of the
Commission.
N?!H* !he Public "ervice Commission does not
exist anymore. #t is now the Gepartment of
!ransportation and Communications.
/ o! /)
'ransportation La(
T(2 C21TI6ICAT2 56 PU)LIC C53<23I23C2 %CPC&C
T(2 C21TI6ICAT2 56 PU)LIC C53<23I23C2 D
32C2SSIT* %CPC3& A37 T(2 P1I51 5P21AT51 1UL2
Goes the sale of a CPC, CPCN or other properties of
the public utility have to be approved before it is
sold to a third person:
No. !he approval of the sale of CPCs, CPCNs
or other properties does not affect the validity
1perfection4 of the sale between the parties as long
as all the elements of a contract are met. !his only
affectes the relation of the parties to the G?!C or
to 9
rd
parties. #f there is no approval, then the sale
does not bind the G?!C or 9
rd
parties. !he
controlling factor therefore is the registration.
#f a stoc$holder of a public utility transfers his
stoc$ to the 9
rd
person, is there a need to obtain
the approval of the G?!C:
#t depends. #f the transfer results in the
transferee owning more than 7MN of the stoc$ of
the public utility, then the approval of the G?!C is
needed.
-hen must the approval of the G?!C be secured:
<efore or after the execution of the contract.
-hat if the transferree is an alien:
O?#G. ,n alien cannot own more than 7MN of
the stoc$ of a public utility.
-hat is a Certificate of Public Convenience: 1CPC4
The !"blic Se#$ice %a&' Sec( 15
3ith the eception of those enumerated in the
precedin# section, no public service shall operate
in the Philippines !ithout possessin# a valid and
subsistin# certificate from the Public Service
Commission )no!n as &certificate of public
convenience,& or &certificate of public convenience
and necessity,& as the case may be, to the effect
that the operation of said service and the
public interests in a proper and suitable manner.
The Commission may prescribe as a condition for
the issuance of the certificate provided in the
precedin# para#raph that the service can be
acquired by the Republic of the Philippines or any
instrumentality thereof upon payment of the cost
price of its useful equipment, less reasonable
depreciation4 and li)e!ise, that the certificate shall
be valid only for a definite period of time4 and that
the violation of any of these conditions shall
produce the immediate cancellation of the
certificate !ithout the necessity of any epress
action on the part of the Commission.
, CPC is any authorization to operate a public
service issued by the P"C 1now G?!C4.
#t is an authorization issued by the
Commission for the operation of public services Eor
which no Eranchise, either "unici?al or
le-islative, is reFuire# b/ law& e.g. motor
vehicles
#t constitutes neither a franchise nor a
contract, it does not confer property rights, and is
a mere license or privilege. 1Pantranco v. PSC4
"uch privilege is forfeited when the grantee fails to
comply with his commitments to serve the public
and public necessity. Aowever, these certificates
represent property rights to the extent that if the
rights which any public utility is exercising
pursuant to the lawful orders of the P"C 1now
G?!C4 has been invaded by another public utility,
in appropriate cases, actions may be maintained by
the complainant public utility.
-hich public utilities are exempted from getting a
CPC:
The !"blic Se#$ice %a&' Sec( 14
The follo!in# are eempted from the provisions of
the precedin# section"
(a) 3arehouses4
(b) 5ehicles dra!n by animals and bancas moved
by oar or sail, and tu#boats and li#hters4
(c) Airships !ithin the Philippines ecept as
re#ards the fiin# of their maimum rates on
frei#ht and passen#ers4
(d) Radio companies ecept !ith respect to the
fiin# of rates4
(e) Public services o!ned or operated by any
instrumentality of the .ational %overnment or by
any #overnment$o!ned or controlled corporation,
ecept !ith respect to the fiin# of rates. +As
amended by Com. Act ,-,, RA .o. /678, and RA
.o. /0112
-hat is a Certificate of Public Convenience >
Necessity: 1CPCN4
#t is a certificate issued by the P"C to a public
service to which an/ ?olitical sub#ivision has
-rante# a Eranchise un#er 1A !!7 aEter the
PSC has a??rove# the sa"e un#er Sec. 1!%b&.
#t is an authorization issued by the P"C for the
operation of public services Eor which a Eranchise
is reFuire# b/ law. %e.g. electric, telephone4
-hat is the difference between a CPC > a CPCN:
, CPCN reuires a franchise from Congress.
!he public utility cannot be issued a CPCN and
cannot operate, therefore, without a franchise from
Congress
, CPC does not.
-hat is a franchise:
#t is a legislative grant from Congress or a
local legislative body. #f it is of nationwide
application 1e.g. Philippine ,ir 6ines4, then it must
ta$e the form of a @epublic ,ct.
Aow does one get a franchise:
#t is the same procedure for any law 1file a
bill, 9 readings in Congress, etc4 !he applicant
must a4prove that he or she is a .ilipino citizen; b4
demonstrate financial capacity, and c4 must show
that he or she is applying for a business of public
convenience, that the public shall benefit from the
grant of the franchise.
#s a franchise enough in order to operate:
No. ,ll public utilities reuire either a CPC or
CPCN to operate. !hose public utilities for which
franchises have been granted still reuire a CPCN
= o! /)
'ransportation La(
in order to operate. !hose public utilities that did
not reuire a franchise for there creation still
reuire a CPC in order to operate.
1a/"un#o v. Luneta .otor Cor?oration
%19$$&
!he Public "ervice 6aw, ,ct No. 9/MC, as
amended, authorizes certificates of public
convenience to be secured by public service
operators from the P"C. , CPC granted to the
owner or operator of public service motor vehicles
grants a right in the nature of a limited franchise.
!he Code of Civil Procedure establishes the
general rule that 'property, both real and personal,
or any interest therein of the judgment debtor, not
exempt by law, and all property and rights of
property seized and held under attachment in the
action, shall be liable to execution.' !he statutory
exemptions do not include franchises or
certificates; of public convenience. !he word
'property' as used in section 7IM of the Code of
Civil Procedure comprehends every species of title,
inchoate or complete, legal or euitable. !he !H"!
to determine whether or not property can be
attached and sold upon execution is whether the
judgment debtor has such a beneficial interest
therein that he can sell or otherwise dispose of it
for value.
Now the Public "ervice 6aw permits the P"C
to approve the sale, alienation, mortgaging,
encumbering, or leasing of property, franchises,
privileges, or rights or any part thereof 1sec. /8
(h)4, and in practice the purchase and sale of
certificates of public convenience has been
permitted by the P"C. #f the holder of a CPC can
sell it voluntarily, there is no valid reason why the
same certificate cannot be ta$en and sold
involuntarily pursuant to court process.
CPCs secured by public service operators are liable
to execution, and the Public "ervice Commission is
authorized to approve the transfer of the
certificates of public convenience to the execution
creditor.
-hat is the prior operator rule:
!he prior operator rule wor$s to protect the
prior operator if it maintains an adeuate service
and is able to meet the demands of the public. Ais
or her investment is protected by not allowing a
subseuent operator to be granted a license for the
same route. !he rationale for this rule is for the
preservation of public convenience and to prevent
ruinous competition.
-hat are some of the instances where the prior
operator rule does N?! apply:
!he prior operator rule does not apply when
the CPC or CPCN granted to the applicant is a
maiden franchise that covers a new route, even if it
overlaps with the route of the prior operator.
!he prior operator rule is inapplicable where
the corporate existence of the prior operator has
expired.
@egular operators are preferred over irregular
operators.
!he Commission cannot grant a CPC or CPCN
that comprises a larger territory than that applied
for.
Aow do you $now whether there is ruinous
competition enough for the prior operator rule to
ta$e effect:
@uinous competition means that there is
actual ruin of the business of the operator; that the
existing operator will not gain enough profits if
another person is allowed to enter the business;
that which will result in the deprivation of sufficient
gain in respect of reasonable return of investment,
therefore the oppositor, alleging this, must show
that he will be deprived of a reasonable return on
his investment.
!he mere possibility of reduction in the
earnings of the business or the deterioration in the
income of his business is not sufficient to prove
ruinous competition. #t must be shown that the
business would not have sufficient gains to pay a
fair rate of interest on his capital investments.
Goes the prior operator rule create a monopoly:
6egally spea$ing, there cannot be a monopoly
when a property is operated as a public utility. !he
prior operator rule does not encourage a monopoly
because the theory is that one operator $eeps the
prices low.
)atan-as Trans?ortation Co. v. Ca/etano
5rlanes %1948&
"o long as the /
st
licensee $eeps and performs
the terms and conditions of its license and complies
with the reasonable rules and regulations of the
Commission and meets the demands of the public,
it should have more or less of a bested and
preferential right over a person who see$s to
acuire another and a later license over same
route. ?therwise, the first licensee would not have
protection on his investment and would be subject
to ruinous competition and this defeat the very
purpose and intent for the P"C was created.
San Pablo v. Pantranco %1987&
<efore 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 reuirements of filing an application,
payment of the fees, publication, adducing
evidence at a hearing and affording the oppositors
the opportunity to be heard, among others, as
provided by law. Considering the environmental
circumstances of the case, the conveyance of
passengers, truc$s and cargo from Latnog to ,llen
is certainly not a ferry boat service but a coastwise
or interisland shipping service. Pnder no
circumstance can the sea between Latnog and
,llen be considered a continuation of the highway,
Latnog and ,llen are separated by an open sea. #ts
CPC as a bus transportation cannot be merely
amended to include this water service under the
guise that it is a mere private ferry service.
-hat is an example of the 2$abit system3:
A o! /)
'ransportation La(
,, a grantee of a CPC from the 6!.@<, is
given the authority to operate /M units of taxis. <,
a non%grantee, wishes to operate as a common
carried and 2$abits3 with the CPC of , who will
obtain approval from the 6!.@< to operate another
taxi. !he taxi will be registered in the name of ,,
who will be paid by <.
,ssume that , executed a deed of sale in
favor of < in case < decides not to go on with the
arrangement, in order to safeguard the rights of <.
Aowever, in case of injury to a passenger of the
taxi actually operated by < 1and previously sold to
< as well4 it is still , who will be liable. !he illegal
contract of sale between , > < cannot be put up as
a defense.
, does not have a cause of action against <
either. !hey are in pari delicto.
TeGa .arHetin- v. IAC %1987&
Parties operated under an arrangement,
commonly $nown as the '$abit system' whereby a
person who has been granted a certificate of public
convenience allows another person who owns
motor vehicles to operate under such franchise for
a fee. , certificate of public convenience is a
special privilege conferred by the government.
,lthough not outrightly penalized as a criminal
offense, the $abit system is invariably recognized
as being contrary to public policy and, therefore,
void and in existent under ,rticle /7MB of the Civil
Code.
P1I<AT2 3ATU12C 1I0(TS A37
5)LI0ATI53S 56 PA1TI2S A1ISI30 615.
T1A3SACTI53S 12LATI30 T5
T1A3SP51TATI53
A)S23T A T1A3SP51TATI53 C53T1ACT
Lara v. <alencia %19A8&
!he owner and driver of a vehicle owes to
accommodation passengers or invited guests
merely the duty to exercise reasonable care so that
they may be transported safely to their destination.
!hus, 2!he rule is established by the weight of
authority that the owner or operator of an
automobile owes the duty to an invited #uest to
exercise reasonable care in its operation, and not
unreasonably to expose him to danger and injury
by increasing the hazard of travel. Oalencia
therefore is only reuired to observe ordinary care,
and is not in duty bound to exercise extraordinary
diligence as reuired of a common carrier by our
law 1,rt. /=II > /=I8, new CC4
A1ISI30 615. A T1A3SP51TATI53 C53T1ACT
Contract of transportation, defined;
, contract of transportation is one whereby a
certain person or association of persons obligate
themselves to transport persons, things, or news
from one to another for a fixed price.
Contract of transportation, elements;
Parties to the contract*
Shipper % one who gives rise to the contract of
transportation by agreeing to deliver the things or
news to be transported, or to present his own
person or those of other or others in the case of
transportation of passengers
Carrier or conductor % one who binds himself to
transport person, things, or news, as the case may
be, or one employed in or engaged in the business
of carrying good for others for hire
Consi#nee % the party to whom the carrier is to
deliver the things being transported; to whom the
carrier may lawfulyy ma$e delivery in accordance
with its contract of carriage. !he shipper and the
consignee may be the same person.

), o! /)
II. Co""on Carriers
'ransportation La(
II. Common Carriers
Unless otherwise in#icate#, reEerence is to
the Civil Co#e
A. In 0eneral
Art. 17$4
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.
Art. 17$$
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.
"uch extraordinary diligence in the vigilance over
the goods is further expressed in ,rticles /=97,
/=9I, and /=7I, Nos. I, 8, and =, while the
extraordinary diligence for the safety of the
passengers is further set forth in ,rticles /=II and
/=I8.
1. 726I3ITI53, 2SS23TIAL 2L2.23TS
Art. 17$4
'hat are the classes oE carriers+
Common or private
,s to the object* goods or persons
'hat are the ele"ents oE a co""on carrier+
1. #t is engaged in the business of carrying or
transporting goods for others as a public
employment
2. #t is for compensation or for hire
3. #t is operated generally as a business and not
as a casual occupation
4. #t holds out to the public as ready to engage in
the transportation of goods of the $ind to which his
business is confined 1see also >irst Phil. :ndustrial
v. CA4
'h/ is there a nee# to #eter"ine whether it
is a co""on carrier or not+
Common carriers are subject to the presumption of
negligence. #n order to rebut this presumption,
they must show that they employed extraordinary
diligence.
7o /ou nee# a CPC or CPC3 in or#er to
beco"e a co""on carrier+
No. #t is the conduct that ma$es you a common
carrier. 1Ge &uzman v. C,4 !he liability arises from
the Civil Code.
'hat is the #iEEerence between a co""on
carrier an# a ?rivate carrier+
C5..53 I #t holds itself out as ready to engage
in the transportation of goods or persons for hire
as a public employment and not as a casual
occupation whether*
1. regular or scheduled
2. occasional, episodic or unscheduled
3. offered to the general public or merely a
narrow segment of the general population
1?e %u9man v. CA4
P1I<AT2 I Carriers who transport or underta$e to
transport goods or persons in a particular instance
for hire or for reward
As to its nature
Common % it holds itself out in common to all
persons who choose to employ him, as ready to
carry for hire in such a manner as to render him
liable should he refuse to carry anyone who wishes
to employ him
Private % it agrees in some special case with a
private individual to carry for hire
As to the basis for or consideration of the contract
of transportation
Common % it is bound to carry all who offer such
goods, as it is accustomed to carry and with tender
of reasonable compensation for carrying them
Private % it is not bound to carry for any reason
unless it enters into a special agreement to do so
As to its re#ulation
Common % it is considered a public service and is
therefore subject to regulation
Private % it does not hold itself out as engaged in
the business for the public and is therefore not
subject to the same rules on regulation as a
common carrier
As to the level of dili#ence required
Common % extraordinary
Private % diligence of a good father
As to stipulations on liability
Common % it cannot stipulate that it will be exempt
from liability or future negligence
Private % it may stipulate that it will be exempt
from liability or future negligence
60U v. Sar"iento TrucHin-
or association engaged in the business of carrying
land, water, or air, for hire or compensation,
offering their services to the public, whether to the
public in general or to a limited clientele in
particular, but never on an exclusive basis. !he
true test of a common carrier is the carriage of
)) o! /)
II. Co""on Carriers
'ransportation La(
passengers or goods, providing space for those
who opt to avail themselves of its transportation
services for a fee.
US v. Tan Piaco
!hese truc$s, so far as indicated by the evidence
and as far as the appellant is concerned, furnished
service under special a#reements to carry
particular persons and property. . . . "o long as the
individual or co%partnership, etc., etc., is engaged
in a purely private enterprise, without attempting
to render service to all who may apply, he can in
no sense be considered a public utility, for public
use.'Public use' means the same as 'use by the
public3; it is not confined to privileged individuals,
but is open to the indefinite public. #f 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. Public use is not
synonymous with public interest. !he true criterion
by which to judge of the character of the use is
whether the public may enjoy it by right or only by
permission.
(o"e Insurance Co. v. A"erican Stea"shi?
"tipulations of non%liability of owners of carriers
are held contrary to public policy by the Civil Code.
Aowever, a common carrier underta$ing to carry
special cargo or chartered to a special person only,
becomes a private carrier. ,s a private carrier,
stipulations exempting the owner from liability for
negligence of its agent is not against public policy
and is deemed valid. !he Civil Code should not be
applied where the common carrier acted as private
carrier.
7e 0uJ"an v. CA
!he Civil Code defines 'common carriers' in the
following terms*
',rticle /=90. Common carriers are persons,
corporations, firms or associations engaged in the
business of carrying or transporting passengers or
goods or both, by land, water, or air for
compensation, offering their services to the public.'
!he above article ma$es 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 1in
local idiom, as 'a sideline'4. ,rticle /=90 also
avoids ma$ing any distinction between a person or
enterprise offering transportation service on a
regular or scheduled basis and one offering such
service on an occasional, episodic or unscheduled
basis. Neither does ,rticle /=90 distinguish
between a carrier offering its services to the
'general public,' i.e., the general community or
population, and one who offers services or solicits
business only from a narrow segment of the
general population.
Pnder ,rticle /=7I 184, a common carrier is held
responsible and will not be allowed to divest or to
diminish such responsibility even for acts of
strangers li$e thieves or robbers, except where
such thieves or robbers in fact acted 'with grave or
irresistible threat, violence or force.' -e believe
and so hold that the limits of the duty of
extraordinary diligence in the vigilance over the
goods carried are reached where the goods are lost
as a result of a robbery which is attended by
'grave or irresistible threat, violence or force.'
6irst Phil. In#ustrial Cor? v. CA
!he test for determining whether a party is a
common carrier of goods is* 1/4. Ae 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; 104 Ae
must underta$e to carry goods of the $ind to which
his business is confined; 194. Ae must underta$e to
carry by the method by which his business is
conducted and over his established roads; and
174!he transportation must be for hire.
4. 3ATU12 56 )USI32SSC A37 P5'21
56 T(2 STAT2 T5 120ULAT2
Art. 17!A. !he Public "ervice 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 "ection.
Pantranco v. PSC
Pnder "ection /8 1a4 of C, /78., the Commission
is empowered to issue certificates of public
convenience whenever it 'finds that the operation
of the public service proposed and the
authorization to do business will promote the public
interests in a proper and suitable manner.' -hen
private property is 'affected with a public interest it
ceased to be juris privati only.' -hen, 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 has thus created.
Ae may withdraw his grant by discounting the use,
but so long as he maintains the use he must
submit to control. #ndeed, this right of regulation is
so far beyond uestion that it is well settled that
the power of the state to exercise legislative
control over public utilities may be exercised
through boards of commissioners. !his right of the
state to regulate public utilities is founded upon the
police power. #f one voluntarily places his property
in public service he cannot complain that it
becomes subject to the regulatory powers of the
state. , certificate of public convenience
constitutes neither a franchise nor a contract,
confers no property right, and is a mere license or
privilege.
$. 3ATU12 A37 )ASIS 56 LIA)ILIT*

Art. 17$$
)+ o! /)
II. Co""on Carriers
'ransportation La(
/=I8.
Can-co v. .11
!he liability of the carrier is contractual in nature.
#t arises from the contract of carriage. !he liability
is direct and immediate, and differs from
presumptive responsibility for the negligence of
(Lanila @ailroadFs) servants.
!he contract of Lanila @ailroad Comapny to
transport Cangco carried with it the duty to carry
him in safety and provide safe means of entering
and leaving its trains. !hat duty, being contractual,
was direct and immediate, and its non%
performance could not be excused by proof that
the fault was morally imputable to Lanila
@ailroadFs servants. !here was no contributory
negligence on the part of Cangco.
'hat laws -overn over co""on carriers+
!he Civil Code primarily governs over common
carriers. !he Code of Commerce and special laws
have suppletory effect.
'hat are the li"itations on the ?ower to
re-ulate co""on carriers+
!he same rules on due process apply to the
regulation of common carriers.
Phil. 1abbit v. IAC
!he driver cannot be held jointly liable with the
owenrs of the jeep in case of breach of the contract
of carriage. !he contract of carriage is between
the carrier and the passenger, and in the event of
contractual liability, the carrier is exclusively
responsible therefore to the passenger, even if
such breach be due to the negligence of the driver.
!o ma$e the driver jointly liable would ma$e the
carrierFs liability personal instead of merely
vicarious and conseuently, the victim is entitled to
recover only the share which corresponds to the
driver.
. CLASS2S 56 C5..53 CA11I21S
Art. 17$4
Art. 17$$
/=I8.
Art. 17AA
, 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.
A. LA'S APPLICA)L2
Art. 17!!
#n 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.
Art. 17A$
!he 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.
). Co""on Carria-e oE 0oo#s
1. LIA)ILIT* A37 P12SU.PTI53 56
320LI023C2
Art. 17$$
/=I8.

Art. 17$
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& .lood, storm, earthua$e, lightning, or other
natural disaster or calamity;
%4& ,ct of the public enemy in war, whether
international or civil;
%$& ,ct of omission of the shipper or owner of the
goods;
%& !he character of the goods or defects in the
pac$ing or in the containers;
%A& ?rder or act of competent public authority.
Art. 17$A
#n all cases other than those mentioned in Nos. /,
0, 9, 7, and I of the preceding article, if the goods
are lost, destroyed or deteriorated, common
)7 o! /)
II. Co""on Carriers
'ransportation La(
carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they
observed extraordinary diligence as reuired in
,rticle /=99.
'hen #oes eKtraor#inar/ #ili-ence Eor -oo#s
start+
Hxtraordinary diligence starts from the time the
goods are loaded into the vessels.
'hen #oes eKtraor#inar/ #ili-ence Eor -oo#s
sto?+
Hxtraordinary diligence ends when the goods are
discharged and delivered to the consignee
*nchausti vs. 7eKter %194B&
!he mere proof of delivery of goods in good
order to a carrier, and of their arrival at the place
of destination in bad order, ma$es out a prima
facie case against the carrier, so that if no
explanation is given as to how the injury occurred,
the carrier must be held responsible. #t is
incumbent upon the carrier to prove that the loss
was due to accident or some other circumstance
inconsistent with its liability.
4. 2X2.PTI53 615. LIA)ILIT*
3ATU1AL 7ISAST21
Art. 17$
only*
%1& .lood, storm, earthua$e, lightning, or other
Art. 17$9
#n order that the common carrier may be
exempted from responsibility, the natural disaster
must have been the proximate and only cause of
the loss. Aowever, 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.
!he same duty is incumbent upon the common
carrier in case of an act of the public enemy
referred to in ,rticle /=97, No. 0.
Art. 17B
#f the common carrier negligently incurs in delay in
transporting the goods, a natural disaster shall not
free such carrier from responsibility.
Art. $!1, Co#e oE Co""erce
!he merchandise shall be transported at the ris$
and venture of the shipper, if the contrary
has not been expressly stipulated.
,s a conseuence, 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
accountand ris$ of the shipper.
Proof of these accidents is incumbent upon the
carrier.
'hat are the reFuisites Eor eKe"?tion #ue to
natural #isaster+
/. !he natural disaster must have been the
proximate and only cause
0. !he common carrier must exercise due
diligence to prevent or minimize the loss before,
during and after the occurrence of the flood, storm
or natural disaster
9. !he common carrier must not have been guilty
of delay
7. !he shipment was at shipperFs ris$
Tan Chion- Sian v. Inchausti D Co. %1914&
6oss of a ship and of its cargo, in a wrec$ due to
accident or force majeure must, as a general rule,
fall upon their respective owners, except in cases
where the wrec$ing or stranding of the vessel
occurred through malice, carelessness or lac$ of
s$ill on the part of the captain and in the remaining
cases indicated in article C7/ of the Code of
Commerce.
Pnder article 98/ of the Code of Commerce
transportation of merchandise is for account, ris$
and hazard of the shipper, unless the contrary has
been expressly stipulated. !he carrier is exempt
from liability if he proves, as it is incumbent upon
him to do, 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 owners of the ship.
.artini v. .acon#ra/ %1919&
#n every contract of affreightment, losses by the
dangers of the seas are excepted from the ris$s
w+c the master ta$es upon himself, whether the
exception is expressed in the contract or not. !he
exception is made by law, > falls whether or not
the general principle that no one is responsible for
fortuitous events > accidents of major force. <ut
the general law is subject to an exception, that
when the inevitable accident is preceded by fault of
the debtor or person bound, without which it would
not have happened, then he becomes responsible
for it.
!he master is responsible for the safe > proper
stowage of the cargo, > there is no doubt that by
the general maritime law he is bound to secure the
cargo safely under dec$. #f the master carries
goods on dec$ !*o the consent of the shipper, he
does it at his own ris$. #f they are damaged or lost
in conseuence of their being thus exposed, he
cannot protect himself from responsibility by
showing that they were damaged or lost by the
dangers of the seas. 'hen the shi??er consents
)8 o! /)
II. Co""on Carriers
'ransportation La(
to his -oo#s bein- carrie# on #ecH, he taHes
the risHs oE an/ #a"a-e or loss sustaine# as a
conseFuence oE their bein- so carrie#.
2astern Shi??in- Lines v. IAC %1987&
Aowever, fire may not be considered a natural
disaster+calamity. !his must be so as it arises
almost invariably from some act of man or by
human means. #t does not fall within the category
of an act of &od unless caused by lightning or boy
other natural disaster+calamity. #t may even be
caused by the actual fault or privity of the carrier.
ACT 56 PU)LIC 232.*
Art. 17$
only*
%4& ,ct of the public enemy in war, whether
Art. 17$9
#n order that the common carrier may be
exempted from responsibility, the natural disaster
must have been the proximate and only cause of
the loss. Aowever, the common carrier must
exercise due diligence to prevent or minimize loss
before, during and after the occurrence of flood,
storm or other natural disaster in order that the
common carrier may be exempted from liability for
the loss, destruction, or deterioration of the goods.
!he same duty is incumbent upon the common
carrier in case of an act of the public enemy
referred to in ,rticle /=97, No. 0.
the act oE a ?ublic ene"/+
1. !he act of the public enemy must have been
the proximate and only cause
2. !he common carrier must exercise due
diligence to prevent or minimize the loss before,
during and after the act of the public enemy
causing the loss, destruction or deterioration of the
goods.
ACT 51 5.ISSI53 56 S(IPP21
Art. 17$
only*
%$& ,ct of omission of the shipper or owner of the
goods;
Art. 171
#f the shipper or owner merely contributed to the
loss, destruction or deterioration of the goods, the
proximate cause thereof being the negligence of
the common carrier, the latter shall be liable in
damages, which however, shall be euitably
reduced.
the act or o"ission oE the shi??er+
/. !he act or omission of the shipper must have
been the proximate and only cause
0. #f the shipper owner merely contributed to the
loss, destruction or deterioration of the goods, the
proximate cause being the negligence of the
common carrier, then the common carrier shall be
liable for the damages, which shall, however, be
euitably reduced.
C(A1ACT21 56 0557S
Art. 17$
only*
%& !he character of the goods or defects in the
Art. 174
Hven if the loss, destruction, or deterioration of the
goods should be caused by the character of the
goods, or the faulty nature of the pac$ing or of the
containers, the common carrier must exercise due
diligence to forestall or lessen the loss.
Art. $!!, Co#e oE Co""erce
-ithin 07 hours following the receipt of the
merchandise, the claim against the carrier for
damage or average which may be found therein
upon opening the pac$age, may be made, provided
that the indications of damage or average which
gives rise to the claim cannot be ascertained from
the outside part of such pac$ages, in which case
the claim shall be admitted only at the time of
receipt.
,fter the periods mentioned have elapsed, or the
transportation charges have been paid no claim
shall be admitted against the carrier with regard to
the condition in which the goods were transported
and delivered.
Southern Lines v. CA %19!4&
#f the fact of improper pac$ing is $nown to the
carrier or its servants or apparent upon ordinary
observation, but (the carrier) accepts the goods
notwithstanding such condition, it is not relieved of
liability for loss or injury resulting therefrom.
51721 56 C5.P2T23T AUT(51IT*
Art. 17$
only*
%A& ?rder or act of competent public authority.
Art. 17$
#f 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.
an or#er oE co"?etent authorit/+
)> o! /)
II. Co""on Carriers
'ransportation La(
/. !here must be an order or act of competent
authority
0. !he said public authority must have had the
power to issue the order. #f the officer acts
without legal process, then the common carrier
will be held liable
0anJon v. CA %1988&
!he intervention of the municipal officials was not
of a character that would render impossible the
fulfillment by the carrier of the obligation. !he
petitioner was not duty bound to obey the illegal
order to dump into the sea the scrap iron. !here is
absence of sufficient proof that the issuance of the
order was attended with such force or intimidation
as to completely overpower the will of petitionerFs
employees. !he mere difficulty in the fulfillment of
the obligation is not force majeure.
.elencioI(errera, #issent8 !hrough the 2order
or act3 of 2competent public authority,3 the
performance of the contractual obligation was
rendered impossible. ,pparently, the seizure and
destruction of the goods was done under legal
process or authority so that petitioner should be
freed from responsibility.
$. 7U1ATI53 56 2XT1A517I3A1*
12SP53SI)ILIT*
Art. 17$!
!he 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 ,rticle /=9C.
Art. 17$7
!he common carrierKs 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. 17$8. !he extraordinary liability of the
common carrier continues to be operative even
during the time the goods are stored in a
warehouse of the carrier at the place of
destination, until the consignee has been advised
of the arrival of the goods and has had reasonable
opportunity thereafter to remove them or
otherwise dispose of them.
'hat #oes 9uncon#itionall/ ?lace#; "ean+
#t means that the shipper cannot get the goods
bac$ from the common carrier at will.
'hen is the contract oE trans?ortation
?erEecte#+
, contract of transportation is consensual in
nature, therefore it is perfected at the meeting of
the minds of the parties.
'hat iE the -oo#s are onl/ Eor saEeHee?in-+
#f the common carrier received the goods not for
transportation but only for safe$eeping, where the
goods have already been purchased by the shipper
and ready for transportation, then the duty of
extraordinary diligence has not yet started.
'ho are these ?ersons or entities who have
9a ri-ht to receive; the -oo#s+
!hese persons include agents, bro$ers, and the
li$e.
'hat is sto??a-e in transitu+
!his is the act by which the unpaid vendor of goods
stops their progress and resumes possession of
them constructively while they are in the court of
transit from him to the purchaser, and not yet
actually delivered to the latter. !he duty of the
common carrier to exercise extraordinary diligence
ends in the middle of the journey or transit.
-hen the buyer of the goods becomes insolvent,
the unpaid seller who has parted with the
possession of the goods at any time while they are
in transit, may resume the possession of the goods
as he would have had if he had never parted with
the possession.
Co"?ania .ariti"a v. Insurance Co"?an/ oE
3orth A"erica %19!&
!he liability of the carrier as common carrier begins
with the actual delivery of the goods for
transportation, and not merely with the formal
execution of a receipt or bill of lading; the issuance
of a bill of lading is not necessary to complete
delivery and acceptance. Hven where it is provided
by statute that liability commences with the
issuance of the bill of lading, actual delivery and
acceptance are sufficient to bind the carrier.
Lu 7o v. )ina"ira %19A7&
-hile delivery of the cargo to the customs
authorities is not delivery to the consignee, or 2to
the person who has a right to receive them3,
contemplated in ,rticle /=98, because in such case
the goods are still in the hands of the &overnment
and the owner cannot exercise dominion over
them, however the parties may agree to limit the
liability of the carrier considering that the goods
have still to through the inspection of the customs
authorities before they are actually turned over to
the consignee. !his is a situation where we may
say that the carrier losses control of the goods
because of a custom regulation and it is unfair that
it be made responsible for what may happen during
the interregnum.
although "ection 71I4 of the Carriage of &oods by
"ea ,ct states that the carrier shall not be liable in
an amount exceeding CIMM.MM per pac$age unless
the value of the goods had been declared by the
shipper and inserted in the bill of lading, said
section is merely suppletory to the provisions of
the Civil Code.
. STIPULATI53SLA0122.23T LI.ITI30
LIA)ILIT*
AS T5 7ILI023C2 12=UI127
Art. 17
)- o! /)
II. Co""on Carriers
'ransportation La(
, 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& #n writing, signed by the shipper or owner;
%4& "upported by a valuable consideration other
than the service rendered by the common carrier;
and
%$& @easonable, just and not contrary to public
policy.
Art. 17A
,ny of the following or similar stipulations shall be
considered unreasonable, unjust and contrary to
public policy*
%1& !hat the goods are transported at the ris$ of
the owner or shipper;
%4& !hat the common carrier will not be liable for
any loss, destruction, or deterioration of the goods;
%$& !hat the common carrier need not observe any
diligence in the custody of the goods;
%& !hat the common carrier shall exercise a
degree of diligence less than that of a good father
of a family, or of a man of ordinary prudence in the
vigilance over the movables transported;
%A& !hat the common carrier shall not be
responsible for the acts or omission of his or its
employees;
%!& !hat the common carrierKs liability for acts
committed by thieves, or of robbers who do not act
with grave or irresistible threat, violence or force,
is dispensed with or diminished;
(7) !hat the common carrier is not responsible for
the loss, destruction, or deterioration of goods on
account of the defective condition of the car,
vehicle, ship, airplane or other euipment used in
the contract of carriage.
Art. 17A1
!he fact that the common carrier has no
competitor along the line or route, or a part
thereof, to which the contract refers shall be ta$en
into consideration on the uestion of whether or
not a stipulation limiting the common carrierKs
liability is reasonable, just and in consonance with
public policy.
AS T5 A.5U3T 56 LIA)ILIT*
Art. 179
, stipulation that the common carrierKs 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. 17AB
, 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.
(eacocH v. .acon#ra/ %1941&
Shewara" v. PAL %19!!&
!here are two reuisites that must be fulfilled in
order that the liability of P,6 be limited according
to the the stipulations behind the tic$et stub*
/. that the contract is just and reasonable under
the circumstances
0. that the contract was fairly and freely agreed
upon 1per ,rt. /=IM4
!he fact that the conditions are printed at the bac$
of the tic$et stub in letters so small that they are
hard to read would not warrant the presumption
that plaintiff was aware of those conditions such
that he had 2fairly and freely agreed3 to those
conditions.
5n- *iu v. CA %1979&
-hile the passenger had not signed the plane
tic$et, 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 latterFs lac$
of $nowledge or assent to the regulation. #t is what
is $nown as a contract of adhesion wherein one
party imposes a ready made form of contract on
the other. !he one who adheres to the contract is
in reality free to reject it entirely. , contract
limiting liability upon an agreed valuation does not
offend against the policy of the law forbidding one
from contracting against his own negligence.
6ACT51S A662CTI30 A0122.23T
Art. 17!
,n agreement limiting the common carrierKs
liability may be annulled by the shipper or owner if
the common carrier refused to carry the goods
unless the former agreed to such stipulation.
Art. 177
#f the common carrier, without just cause, delays
the transportation of the goods or changes the
stipulated or usual route, the contract limiting the
common carrierKs liability cannot be availed of in
case of the loss, destruction, or deterioration of the
goods.
Art. 178
,n agreement limiting the common carrierKs
liability for delay on account of stri$es or riots is
valid.
Art. 17A1
!he fact that the common carrier has no
competitor along the line or route, or a part
thereof, to which the contract refers shall be ta$en
into consideration on the uestion of whether or
not a stipulation limiting the common carrierKs
liability is reasonable, just and in consonance with
public policy.
Art. 17A4
Hven when there is an agreement limiting the
liability of the common carrier in the vigilance over
the goods, the common carrier is disputably
presumed to have been negligent in case of their
loss, destruction or deterioration.
A. APPLICA)L2 LA' 53 6512I03 T1A72
Art. 17A$
!he law of the country to which the goods are to
be transported shall govern the liability of the
)/ o! /)
II. Co""on Carriers
'ransportation La(
common carrier for their loss, destruction or
deterioration.
!. 1UL2S 53 PASS23021 )A00A02
Art. 17A
!he provisions of ,rticles /=99 to /=I9 shall apply
to the passengerKs baggage which is not in his
personal custody or in that of his employee. ,s to
other baggage, the rules in ,rticles /BBC and 0MMM
to 0MM9 concerning the responsibility of hotel%
$eepers shall be applicable.
Art. 1998
!he deposit of effects made by the travellers in
hotels or inns shall also be regarded as necessary.
!he $eepers of hotels or inns shall be responsible
for them as depositaries, provided that notice was
given to them, or to their employees, of the effects
brought by the guests and that, on the part of the
latter, they ta$e the precautions which said hotel%
$eepers or their substitutes advised relative to the
care and vigilance of their effects.
Art. 4BBB
!he 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 $eepers of hotels or
inns as well as strangers; but not that which may
proceed from any force majeure. !he fact that
travellers are constrained to rely on the vigilance of
the $eeper of the hotels or inns shall be considered
in determining the degree of care reuired of him.
Art. 4BB1
!he act of a thief or robber, who has entered the
hotel is not deemed force majeure, unless it is
done with the use of arms or through an irresistible
force.
Art. 4BB4
!he hotel%$eeper 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.
Art. 4BB$
!he hotel%$eeper cannot free himself from
responsibility by posting notices to the effect that
he is not liable for the articles brought by the
guest. ,ny stipulation between the hotel%$eeper
and the guest whereby the responsibility of the
former as set forth in articles /BBC to 0MM/ is
suppressed or diminished shall be void.
'hat is ?assen-er ba--a-e+
!hey are the things that a passenger will bring with
him consistent with a temporary absence from
where he lives. Passenger baggage must have a
direct relationship with the passenger who is
travelling.
e.g. , bali$bayan box or suitcase is passenger
baggage. Aowever, /M,MMM cans of corned beef is
not considered as passenger baggage. !hey are
considered as goods. #f you carry goods with you,
you cannot bring them with you as part of your
(passenger) contract of carriage. ;ou will need to
get a separate contract of carriage 12bill of lading34
in order to transport them. !hese goods will then
be transported whether or not you are physically
travelling with them.
'hat are the Hin#s oE ?assen-er ba--a-e an#
the laws a??licable to the"+
/. Passenger baggage in the custody of the
passenger 1e.g. carry%on luggage4 !hese are
considered as necessary deposits. ,rticles /BBC,
0MMM%0MM9 apply.
0. Passenger baggage not in the custody of the
passenger 1e.g. chec$ed%in luggage4. ,rts. /=99%
/=I9 on extraordinary diligence apply. !he liability
is greater for baggage that is in the custody of the
carrier because if the bag is within the custody of
the passenger, then there is a presumption that
the passenger had possession of the baggage.
C. Co""on carriers oE ?assen-ers
1. 3ATU12 A37 2XT23T 56 12SP53SI)ILIT*
Art. 17$$
/=I8.
Art. 17AA
, 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.
Is there an/ #iEEerence between the
eKtraor#inar/ #ili-ence Eor -oo#s an# Eor
?ersons+
#n the case of transport of persons, there are no
exceptions to the presumption of negligence in the
case of injuries or death, unli$e in goods under ,rt.
/=97.
Isaac v. A. L. A""en Trans?ortation %197A&
#t is the prevailing rule that it is negligence per se
for a passenger on a railroad voluntarily or
inadvertently to protrude his arm, hand, elbow, or
any other part of his body through the window of a
moving car beyond the outer edge of the window
or outer surface of the car, so as to come in
contact with objects or obstacles near the trac$,
and that no recovery can be had for an injury
which but for such negligence would not have been
sustained.
S?ouses Lan#in-in v. PA3T1A3C5 %197B&
)= o! /)
II. Co""on Carriers
'ransportation La(
,s a common carrier, P,N!@,NC? was duty bound
to carry its passengers &safely as far as human
care and foresi#ht can provide, usin# the utmost
dili#ence of very cautious persons, !ith a due
re#ard for all the circumstances. ' 1,rticle /=II;
Civil Code4 !he mere fact that the bus was
inspected only recently and found to be in order
would not exempt the carrier from liability unless it
is shown that the particular circumstances under
which the bus would travel were also considered
such as being heavily laden with passengers. -hen
a passenger dies or is injured, the presumption is
that the common carrier is at fault or that it acted
negligently 1,rticle /=I84. !his presumption is only
rebutted by proof on the carrierKs part that it
observed the 'extraordinary diligence' reuired in
,rticle /=99 and the 'utmost diligence of very
cautious persons' reuired in ,rticle /=II 1,rticle
/=I84.
3ecesito v. Paras
-hile the carrier is not an insurer of the safety of
the passengers, it should nevertheless be held
answerable for the flaws of its euioment, if such
flaws were discoverable. !he liability of the
common carrier rests upon the negligence or his
failure to exercise the utmost degree of diligence
that the law reuires. !he rationale for the
common carrierFs 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 euipment and appliances in use by the
carrier. Aaving no privity whatever with the
manufacturer or vendor of the defective
euipment, the passenger has no remedy against
him. #n this case, the defect could have been
detected with the exercise of utmost diligence by
the common carrier.
Sul?icio Lines v. CA %199A&
,6C had a contract of carriage with petitioner.
!he presence of the stevedores sent by ,6C on
board the barge of "6# was called for by the
contract of carriage. .or how else would its lumber
be transported unless it is place in board: ,nd by
whom: ?f course, the stevedores. Gefinitely, "6#
could not expect the shipper itself to load the
lumber without the aid of the stevedores.
.urthermore, "6# $now of the presence and role of
the stevedores in its barge and thus consented to
their presence. Aence, "ulpicio 6ines was
responsible for their safety while on board the
barge.
4. 7U1ATI53 56 12SP53SI)ILIT*
La .allorca v. CA %19!!&
#t has been recognized as a rule that the relation of
carrier and passenger does not cease at the
moment the passenger alights from the carrierKs
vehicle at a place selected by the carrier at the
point of destination, but continues until the
passenger has had a reasonable time or a
reasonable opportunity to leave the carrierKs
premises. ,nd, what is a reasonable time or a
reasonable delay within this rule is to be
determined from all the circumstances.
!hus, a person who, after alighting from a train
wal$s along the station platform is considered still
a passenger. #n the present case, the father
returned to the bus to get one of his baggages
which was not unloaded when they alighted from
the bus. @auel, the child that she Kwas, must have
followed the father.
AboitiJ vs CA
!he rule is that the relation of carrier and
passenger continues until the passenger has been
landed at the port of destination and has left the
vessel ownerKs doc$ or premises. ,ll persons who
remain on the premises a reasonable time after
leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a
reasonable delay within this rule is to be
determined from all the circumstances, and
includes a reasonable time to see after his baggage
and prepare for his departure.
#t is of common $nowledge that, by the very
nature of petitionerKs business as a shipper, the
passengers of vessels are allotted a longer period
of time to disembar$ from the ship than other
common carriers such as a passenger bus. -ith
respect to the bul$ of cargoes and the number of
passengers it can load, such vessels are capable of
accommodating a bigger volume of both as
compared to the capacity of a regular commuter
bus. Conseuently, a ship passenger will need at
least an hour as is the usual practice, to disembar$
from the vessel and claim his baggage whereas a
bus passenger can easily get off the bus and
retrieve his luggage in a very short period of time.
7oes the #ut/ oE eKtraor#inar/ #ili-ence occur
ri-ht at the ?erEection oE the contract oE
trans?ortation+
!he perfection of the contract of carriage does not
necessarily coincide with the commencement of the
duty of extraordinary diligence. #t may occur at the
same time or later.
7oes the #ut/ oE eKtraor#inar/ #ili-ence -et
interru?te#+
No. #n PA@ v. CA, it was held that P,6 had to
continue to exercise extraordinary diligence even in
the case of stranded passengers until they have
reached their final destination.
Is there a #ut/ oE eKtraor#inar/ #ili-ence Eor
co"Eort an# saEet/+
No. !he duty really only involves bringing the
person to the destination. <ut in PA@ v. CA, the
Court held that P,6 had the duty to provide all
means and comfort and convenience to its
passengers when they got stranded.
$. P12SU.PTI53 56 320LI023C2
Art. 17A!
In case oE #eath oE or inGuries to ?assen-ers,
co""on carriers are ?resu"e# to have been
at Eault or to have acte# ne-li-entl/, unless
the/ ?rove that the/ observe# eKtraor#inar/
#ili-ence as ?rescribe# in Articles 17$$ an#
17AA.
)A o! /)
II. Co""on Carriers
'ransportation La(
Is the last clear chance #octrine a??licable in
contracts oE carria-e+
No. !he contract of carriage is contractual in
nature. !his doctrine is a defense only for torts and
uasi%delicts.
. 651C2 .A>2U12
)achelor 2K?ress v. CA
.orce majeure is not in itself a defense.
Hxtraordinary diligence is the defense. Proof of
force majeure becomes relevant in complying with
the reuirement of extraordinary diligence.
A. LI.ITATI53 56 LIA)ILIT*C <ALI7IT* 56
STIPULATI53S
Art. 17A7
!he responsibility of a common carrier for the
safety of passengers as reuired in ,rticles /=99
and /=II cannot be dispensed with or lessened by
stipulation, by the posting of notices, by
statements on tic$ets, or otherwise.
Art. 17A8
-hen a passenger is carried gratuitously, a
stipulation limiting the common carrierKs liability for
negligence is valid, but not for wilful acts or gross
negligence.
!he reduction of fare does not justify any limitation
of the common carrierKs liability.
!. 12SP53SI)ILIT* 651 ACTS 56 2.PL5*22S
Art. 17A9
Common carriers are liable for the death of or
injuries to passengers through the negligence or
wilful acts of the formerKs employees, although
such employees may have acted beyond the scope
of their authority or in violation of the orders of the
common carriers.
!his liability of the common carriers does not cease
upon proof that they exercised all the diligence of a
good father of a family in the selection and
supervision of their employees.
Art. 17!B
!he common carrierKs responsibility prescribed in
the preceding article cannot be eliminated or
limited by stipulation, by the posting of notices, by
statements on the tic$ets or otherwise.
7e 0illaco v. .anila 1ailroa# Co"?an/ %19AA&
-hile a passenger is entitled to protection from
personal violence by the common carrier or its
agents or employees, the responsibility of the
common carrier extends only to those acts that the
common carrier could foresee or avoid through the
exercise of the degree of care and diligence
reuired of it. -hen the crime too$ place, the
guard Gevesa had no duties to discharge in
connection with the transportation of the deceased
from Calamba to Lanila. !he position of Gevesa at
the time was that of another would be passenger, a
stranger also awaiting transportation, and not that
of an employee assigned to discharge any of the
duties that the @ailroad had assumed by its
contract with the deceased.
.aranan v. PereJ %19!7&
,s can be gleaned from ,rt. /=IB, the Civil Code of
the Philippines evidently follows the rule that it is
enough that the assault happens within the course
of the employeeKs duty. #t is no defense for the
carrier that the act was done in excess of authority
or in disobedience of the carrierKs orders. !he
carrierKs liability here is absolute in the sense that
it practically secures the passengers from assaults
committed by its own employees.
,t least three very cogent reasons underlie this
rule. ,s explained in !exas Lidland @.@. vs.
Lonroe* 1/4 the special underta$ing of the carrier
reuires that it furnish its passenger that full
measure of protection afforded by the exercise of
the high degree of care prescribed by the law, inter
alia from violence and insults at the hands of
strangers and other passengers, but above all,
from the acts of the carrierKs own servants charged
with the passengerKs safety; 104 said liability of the
carrier for the servantKs violation of duty to
passengers, is the result of the formerKs confiding
in the servantKs hands the performance of his
contract to safely transport the passenger,
delegating therewith the duty of protecting the
passenger with the utmost care prescribed by law;
and 194 as between the carrier and the passenger,
the former must bear the ris$ of wrongful acts or
negligence of the carrierKs employees against
passengers, since it, and not the passengers, has
power to select and remove them.
7. 12SP53SI)ILIT* 651 ACTS 56 ST1A3021S
A37 C5IPASS23021S
Art. 17!$
, 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 carrierKs employees
through the exercise of the diligence of a good
father of a family could have prevented or stopped
the act or omission.
Pila?il v. CA %1989&
#n consideration of the right granted to it by the
public to engage in the business of transporting
passengers and goods, a common carrier does not
give its consent to become an insurer of any and
all ris$s to passengers and goods. #t merely
underta$es to perform certain duties to the public
as the law imposes, and holds itself liable for any
breach thereof.
,rt /=II ualifies the duty of extraordinary care,
vigilance and precaution in the carriage of
passengers by common carriers to only such as
human care and foresight can provide. what
constitutes compliance with said duty is adjudged
with due regard to all the circumstances
.irst, the presumption of fault+negligence against
the carrier is disputable. #t gives in where contrary
facts are established proving either that the carrier
had exercised the degree of diligence reuired by
law or the injury suffered by the passenger was
due to a fortuitous event.
"econd, while as a general rule, common carriers
are bound to exercise extraordinary diligence in the
+, o! /)
II. Co""on Carriers
'ransportation La(
safe transport of their passengers, it would seem
that this is not the standard by which its liability is
to be determined when intervening acts of
strangers is to be determined directly cause the
injury, while the contract of carriage exists.
Pnder ,rt. /=89, a tort committed by a stranger
which causes injury to a passenger does not accord
the latter a cause of action against the carrier. !he
negligence for which a common carrier is held
responsible is the negligent omission by the
carrierKs employees to prevent the tort from being
committed when the same could have been
foreseen and prevented by them. .urther, when
the violation of the contract is due to the willful
acts of strangers, as in the instant case, the degree
of care essential to be exercised by the common
carrier for the protection of its passenger is only
that of a good father of a family
'hat is the co""on carrierMs res?onsibilit/
towar#s e"?lo/ees+
!he common carrier is responsible even beyond the
scope of authority and in violation of orders
compared to uasi%delicts under ,rt. 0/CM, which
exempts the employer if it was doine outside of
employment. Aowever, there must be a reasonable
connection between the act and the contract of
carriage.
'hat is the co""on carrierMs res?onsibilit/
toiwar#s stran-ers+
,rt. /=89 imposes only the duty of ordinary
diligence. #n Aachelor =press, the Court held that
the common carrier has a duty of extraordinary
diligence for the act of a co%passenger. Aowever, in
Pilapil, the standard of diligence is only ordinary
diligence, 1,rt. /=894, referring to the acts of
strangers.
8. 7UT* 56 PASS23021C 2662CT 56
C53T1I)UT51* 320LI023C2
Art. 17!1
!he passenger must observe the diligence of a
good father of a family to avoid injury to himself.
Art. 17!4
!he 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 euitably reduced
7. 7a"a-es 1ecoverable Ero" Co""on
Carriers
1. I3 02321AL
Art. 17!
Gamages in cases comprised in this "ection shall
be awarded in accordance with !itle QO### of this
<oo$, concerning Gamages. ,rticle 00M8 shall also
apply to the death of a passenger caused by the
breach of contract by a common carrier.
Art. 4197
Gamages may be*
1/4 ,ctual or compensatory;
104 Loral;
194 Nominal;
174 !emperate or moderate;
1I4 6iuidated; or
184 Hxemplary or corrective.
4. ACTUAL 51 C5.P23SAT51*
Art. 4419
Loral damages may be recovered in the following
and analogous cases*
1/4 , criminal offense resulting in physical injuries;
104 Ruasi%delicts causing physical injuries;
194 "eduction, abduction, rape, or other lascivious
acts;
174 ,dultery or concubinage;
1I4 #llegal or arbitrary detention or arrest;
184 #llegal search;
1=4 6ibel, slander or any other form of defamation;
1C4 Lalicious prosecution;
1B4 ,cts mentioned in ,rticle 9MB;
1/M4 ,cts and actions referred to in ,rticles 0/, 08,
0=, 0C, 0B, 9M, 90, 97, and 9I.
!he parents of the female seduced, abducted,
raped, or abused, referred to in No. 9 of this
article, may also recover moral damages.
!he spouse, descendants, ascendants, and
brothers and sisters may bring the action
mentioned in No. B of this article, in the order
named.
Art. 44B1
#n contracts and uasi%contracts, the damages for
which the obligor who acted in good faith is liable
shall be those that are the natural and probable
conseuences of the breach of the obligation, and
which the parties have foreseen or could have
reasonably foreseen at the time the obligation was
constituted.
#n case of fraud, bad faith, malice or wanton
attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to
the non%performance of the obligation. 1//M=a4
Art. 44B$
!he 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
uestion.
Caria-a v. La-una Ta/abas )us Co. %19!B&
.rom the deposition of Gr. @omeo &ustilo, a
neurosurgeon, it appears that, as a result of the
injuries suffered by Hdgardo, his right forehead
was fractured necessitating the removal of
practically all of the right frontal lobe of his brain.
.rom the testimony of Gr. Jose ,. .ernandez, a
psychiatrist, it may be gathered that, because of
the physical injuries suffered by Hdgardo, his
mentality has been so reduced that he can no
longer finish his studies as a medical student; that
he has become completely misfit for any $ind of
+) o! /)
II. Co""on Carriers
'ransportation La(
wor$; that he can hardly wal$ around without
someone helping him, and has to use a brace on
his left leg and feet. !he lower court found that the
removal of the right frontal lobe of the brain of
Hdgardo reduced his intelligence by about IMN;
that due to the replacement of the right frontal
bone of his head with a tantalum plate Hdgardo has
to lead a uite and retired life because 'if the
tantalum plate is pressed in or dented it would
cause his death.' !he impression one gathers from
this evidence is that, as a result of the physical
injuries suffered by Hdgardo Cariaga, he is now in a
helpless condition, virtually an invalid, both
physically and mentally. Ais award of actual
damages is thus increased to 1a measly4 P0I,MMM.
Aowever, he cannot recover moral damages as 6!<
never acted fraudulently or in bad faith.
<illa 1e/ v. CA %197B&
!he determination of the amount involves 0
factors.
/. !he number of years on the basis of which the
damages shall be computed and
0. !he rate at which the losses sustained by his
sisters should be fixed
!he determination of the indemnity to be awarded
to the heirs of a deceased person has therefore no
fixed basis. Luch is left to the discretion of the
court considering the moral and material damages
involved, and so it has been said that '1t4here can
be no exact or uniform rule for measuring the
value of a human life and the measure of damages
cannot be arrived at by precise mathematical
calculation, but the amount recoverable depends
on the particular facts and circumstances of each
case. !he life expectancy of the deceased or of the
beneficiary, whichever is shorter, is an important
factor.
,s to the rate* total earnings less expenses
necessary in the creation of such earnings and
income 1net earnings4
Pan A" 'orl# v. IAC, )"*#a %1988&
!he rule laid down in Bendo9a vs PA@ is clear*
Pnder ,rt. //M=, a debtor in good faith li$e the
defendant herein, may be held liable only for
damages that were foreseen or might have been
foreseen at the time the contract of transportation
was entered into. #n the absence of a showing that
P,N ,LFs attention was called to the special
circumstances reuiring prompt delivery of
respondent PanganFs luggages, P,N ,L cannot be
held liable for the cancellation of PanganFs
contracts as it could not have foreseen such an
eventuality when it accepted the luggages for
transit
$. .51AL 7A.A02S
Art. 44B!
!he amount of damages for death caused by a
crime or uasi%delict shall be at least three
thousand pesos, even though there may have been
mitigating circumstances. #n addition*
194 !he spouse, legitimate and illegitimate
descendants and ascendants of the deceased may
demand moral damages for mental anguish by
reason of the death of the deceased.
Art. 441!
No proof of pecuniary loss is necessary in order
that moral, nominal, temperate, liuidated or
exemplary damages, may be adjudicated. !he
assessment of such damages, except liuidated
ones, is left to the discretion of the court,
according to the circumstances of each case.
Art. 4417
Loral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shoc$, social
humiliation, and similar injury. !hough incapable of
pecuniary computation, moral damages may be
recovered if they are the proximate result of the
defendantKs wrongful act for omission.
Art. 4419
Loral damages may be recovered in the following
and analogous cases*
1/4 , criminal offense resulting in physical injuries;
104 Ruasi%delicts causing physical injuries;
194 "eduction, abduction, rape, or other lascivious
acts;
174 ,dultery or concubinage;
1I4 #llegal or arbitrary detention or arrest;
184 #llegal search;
1=4 6ibel, slander or any other form of defamation;
1C4 Lalicious prosecution;
1B4 ,cts mentioned in ,rticle 9MB;
1/M4 ,cts and actions referred to in ,rticles 0/, 08,
0=, 0C, 0B, 9M, 90, 97, and 9I.
!he parents of the female seduced, abducted,
raped, or abused, referred to in No. 9 of this
article, may also recover moral damages.
!he spouse, descendants, ascendants, and
brothers and sisters may bring the action
mentioned in No. B of this article, in the order
named.
Art. 444B
-illful 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. !he same rule applies to breaches of
contract where the defendant acted fraudulently or
in bad faith.
6ores v. .iran#a %19A9&
Loral damages are not recoverable in damage
actions predicted on a breach of the contract of
transportation, in view of ,rticles 00/B and 000M of
the new Civil Code. <y contrasting the provisions of
these two articles it immediately becomes apparent
that*
1a4 #n case of breach of contract 1including one of
transportation4 proof of bad faith or fraud 1dolus4,
i.e., wanton or deliberately injurious conduct, is
essential to justify an award of moral damages;
and
1b4 !hat a breach of contract can not be considered
included in the descriptive term 'analogous cases'
used in ,rt. 00/B; not only because ,rt. 000M
specifically provides for the damages that are
caused by contractual breach, but because the
definition of quasi$delict in ,rt. 0/=8 of the Code
++ o! /)
II. Co""on Carriers
'ransportation La(
expressly ecludes the cases where there is a
'preexisting contractual relation between the
parties.'
,n exception to this rule is ,rt /=87 which ma$es
the common carrier expressly subject to the rule of
,rt. 00M8, that entitles the deceased passenger to
'demand moral damages for mental anguish by
reason of the death of the deceased' but where the
injured passenger does not die, moral damages are
not recoverable unless it is proved that the carrier
is guilty of malice or bad faith.
Air 6rance v. Carrascoso %19!!&
!here was a contract to furnish a first class
passage. !he contract was breached when the
airline failed to furnish the first class tic$et at
<ang$o$. !here was bad faith when ,ir .ranceFs
employee compelled Carrascoso to leave his first
class seat for an economy class one by forcibly
ejecting him.
PAL v. .iano %199A&
#n breach of contract of carriage by air, moral
damages are awarded only if the defendant acted
fraudulently or in bad faith.

Aad faith means a
breach of a $nown duty through same motive of
interest or ill will.

'<ad faith does not simply
connote bad judgment or negligence, it imports a
dishonest purpose or some moral obliuity and
conscious doing of a wrong, a breach of $nown
duty through some motive or interest or ill%will that
parta$es of the nature of fraud.3
#f the breach does not result in death, then there is
a need to prove fraud or bad faith in order to
obtain the award of moral damages.
-here in breaching the contract of carriage the
defendant airline is not shown to have acted
fraudulently or in bad faith, liability for damages is
limited to the natural and probable conseuences
of the breach of obligation which the parties had
foreseen or could have reasonably foreseen. #n
that case, such liability does not include moral and
exemplary damages.
. 2X2.PLA1*
Art. 4449
Hxemplary or corrective damages are imposed, by
way of example or correction for the public good, in
addition to the moral, temperate, liuidated or
compensatory damages.
Art. 44$4
#n contracts and uasi%contracts, the court may
award exemplary damages if the defendant acted
in a wanton, fraudulent, rec$less, oppressive, or
malevolent manner.
Art. 44$$
Hxemplary damages cannot be recovered as a
matter of right; the court will decide whether or
not they should be adjudicated.
.ecenas v. CA
,s for the captain, he was playing mahjong before
and up to the time of the collision. -hether or not
he was then off%duty is immaterial. !here is, both
realistically spea$ing and in contemplation of law,
no such thing as off%duty hours for the master of a
vessel at sea that is a common carrier upon whom
the law imposes the duty of extraordinary
diligence. ,s for Negros Navigation, in permitting
or in failing to discover and correct the regularity of
the captainFs mahjong sessions while the ship was
at sea, it must be deemed grossly negligent.
#n discussin the rule of exemplary damages in law,
the "upreme Court loo$s to it as an instruction to
serve the ends of law and public policy by
reshaping socially deleterious behaviors,
specifically in the case, to compel common carriers
to control their employees, to tame their rec$less
instincts, and to force them to ta$e adeuate care
of humans beings and their property.
A. 35.I3AL, T2.P21AT2 A37 LI=UI7AT27
Art. 4441
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
Art. 444
!emperate 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 can not, from the nature of the case, be
provided with certainty.
Art. 444!
6iuidated damages are those agreed upon by the
parties to a contract, to be paid in case of breach
thereof.
Art. 17A7
!he responsibility of a common carrier for the
safety of passengers as reuired in ,rticles /=99
and /=II cannot be dispensed with or lessened by
stipulation, by the posting of notices, by
statements on tic$ets, or otherwise.
Alitalia v. IAC %199B&
!here are some species of injury was caused to Gr.
Pablo because ,litalia misplaced her baggage and
failed to deliver it to her at the time appointed, a
breach of the contract of carriage, with the result
that she was unable to read her paper.
"he is not entitled to be compensated for loss or
damage to her luggage since they were ultimately
delivered to her. "he is however entitled to
nominal damages, which is adjudicated in order
that the right of the passenger, which has been
violated or invaded, may be vindicated or
recognized, and not for the purpose of
indemnifying the passenger for any loss suffered.
Salu#o v. CA
!he lamentable actuations of !-,Ks employees
leave much to be desired, particularly so in the
face of petitionersK grief over the death of their
mother, exacerbated by the tension and anxiety
wrought by the impasse and confusion over the
+7 o! /)
II. Co""on Carriers
'ransportation La(
failure to ascertain over an appreciable period of
time what happened to her remains.
,irline companies are hereby sternly admonished
that it is their duty not only to cursorily instruct but
to strictly reuire their personnel to be more
accommodating towards customers, passengers
and the general public.
!. ATT5132*MS 622S A37 I3T212ST
Art. 44B8
#n the absence of stipulation, attorneyKs fees and
expenses of litigation, other than judicial costs,
cannot be recovered, except*
1/4 -hen exemplary damages are awarded;
104 -hen the defendantKs act or omission has
compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest;
194 #n criminal cases of malicious prosecution
against the plaintiff;
174 #n case of a clearly unfounded civil action or
proceeding against the plaintiff;
1I4 -here the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiffKs
plainly valid, just and demandable claim;
184 #n actions for legal support;
1=4 #n actions for the recovery of wages of
household helpers, laborers and s$illed wor$ers;
1C4 #n actions for indemnity under wor$menKs
compensation and employerKs liability laws;
1B4 #n a separate civil action to recover civil liability
arising from a crime;
1/M4 -hen at least double judicial costs are
awarded;
1//4 #n any other case where the court deems it
just and euitable that attorneyKs fees and
expenses of litigation should be recovered.
#n all cases, the attorneyKs fees and expenses of
litigation must be reasonable.
Art. 441B
#nterest may, in the discretion of the court, be
allowed upon damages awarded for breach of
contract.
Art. 4414
#nterest due shall earn legal interest from the time
it is judicially demanded, although the obligation
may be silent upon this point. 1//MBa4
+8 o! /)
III. Code o! Co""erce ProCisions on OCerland 'ransportation
'ransportation La(
III. Code of Commerce
Provisions on Overland
Transportation
1unless otherwise indicated, reference is to Code of
Commerce4
'hat #oes the Co#e oE Co""erce cover+
#t governs over overland transporation and
maritime admiralty. #t governs only commercial
contracts.
Commercial contracts involving common carriers
refer first to the Civil Code, then to the Code of
Commerce
Private carriers involved in commercial contracts
refer first to the Code of Commerce, then to the
Civil Code, but excluding the Civil Code provisions
on common carriers
A. Sco?e oE 5verlan# Trans?ortation
'hat is overlan# trans?ort+
?verland transport applies to transport on land and
on small bodies of water, waterways, both natural
and artificial, including transport on rivers which
are not very large. 1#f it is transport at sea, then it
is admiralty4
). 3ature oE Contract
A1TICL2 $9
, contract for all $inds of transportation over land
or river shall be considered commercial*
/. -hen it involves merchandise or any
commercial goods.
0. -hen, no matter what its object may be, the
carrier is a merchant or is customarily engaged in
ma$ing transportation for the public.
C. 2EEect oE Civil Co#e
Art 17!!
#n 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.
Art. 447B
!he following laws and regulations are hereby
repealed*
1/4 !hose parts and provisions of the Civil Code of
/CCB which are in force on the date when this new
Civil Code becomes effective*
104 !he provisions of the Code of Commerce
governing sales, partnership, agency, loan, deposit
and guaranty;
194 !he provisions of the Code of Civil Procedure on
prescription as far as inconsistent with this Code;
and
174 ,ll laws, ,cts, parts of ,cts, rules of court,
executive orders, and administrative regulations
which are inconsistent with this Code. 1n4
7. Contract oE Carria-e
1. )ILL 56 LA7I30
726I3ITI53, SU)>2CT .ATT21
A1TICL2 $A4
<ills of lading or tic$ets in the case of
transportation of passengers may be different, one
for persons and another for baggage, but all of
them shall contain the name of the carrier, the
date of shipment, the points of departure and
arrival, the price, and with regard to baggage, the
number and weight of the pac$ages, with any other
indications which may be considered necessary in
order to easily identify them.
'hat is a bill oE la#in-+
#t may be defined as a written ac$nowledgment 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. #t comprehends all methods
of transportation.
Hach bill of lading is a contract in itself and the
parties are bound by its terms. , bill of lading is
also a receipt, and it is li$ewise a symbol of the
goods covered by it. #t is also a document of title.
'ho are the ?arties to a bill oE la#in-+
/. shipper
0. consignee
9. carrier
651., C53T23TS
A1TICL2 $AB
!he shipper as well as the carrier of merchandise
and goods may mutually demand of each other the
issue of a bill of lading in which there shall be
stated*
/. !he name, surname, and domicile of the
shipper.
0. !he name, surname, and domicile of the
carrier.
9. !he name, surname and domicile of the
person to whom or to whose order the goods are
addressed, or whether they are to be delivered to
the bearer of the said bill.
7. , description of the goods, stating their
generic character, their weight, and the external
mar$s or signs of the pac$ages containing the
same.
I. !he cost of the transportation.
8. !he date on which the shipment is made.
=. !he place of the delivery to the carrier.
C. !he place and time at which the delivery is to
be made to the consignee.
B. !he damages to be paid by the carrier in case
of delay, if any agreement is made on this point.
+> o! /)
'ransportation La(
A1TICL2 $A1
#n shipments made over railroads or by other
enterprises which are subject to schedules or the
time fixed by regulations, it shall be sufficient that
the bills of lading or declarations of shipment
furnished by the shipper refer, with regard to the
rate, terms, and special conditions of the
transportation, to the schedules and regulations,
the application of which is reuested; and should
no schedule be determined the carrier must apply
the rate of the merchandise paying the lowest, with
the condition inherent thereto, always including
such statement or reference in the bill of lading
delivered to the shipper.
Is the Eor" "aterial+
No. ,s long as it contains an ac$nowledgment by
the carrier of the receipt of goods for
transporation, it is in legal effect, a bill of lading.
6U3CTI53
A1TICL2 $A$
!he legal basis of the contract between the shipper
and the carrier shall be the bills of lading, by the
contents of which all disputes which may arise with
regard to their execution and fulfillment shall be
decided without admission of other exceptions than
forgery or material errors in the drafting thereof.
,fter the contract has been complied with the bill
of lading issued by the carrier shall be returned to
him, and by virtue of the exchange of this
certificate for the article transported, the
respective obligations and actions shall be
considered as canceled, unless in the same act the
claims which the contracting parties desired to
reserve are reduced to writing, exception being
made of the provisions of ,rticle 988.
#f in case of loss or for any other reason
whatsoever, the consignee can not return upon
receiving the merchandise the bill of lading
subscribed by the carrier, he shall give said carrier
a receipt for the goods delivered, this receipt
producing the same effects as the return of the bill
of lading.
4. 126USAL T5 T1A3SP51T
A1TICL2 $A!
Carrier may refuse to accept pac$ages which
appear unfit for transportation; and if said
transportation is to be made by railway and the
shipment is insisted on, the company shall carry
them, being exempt from all liability if its
objections are so stated in the bill of lading.
$. 75U)T6UL 72CLA1ATI53 56
C53T23TS
A1TICL2 $A7
#f the carrier by reason of well%founded suspicions
as to the correctness of the declaration of the
contents of a pac$age should determine to
examine it, he shall do so before witnesses, in the
presence of the shipper or of the consignee.
"hould the shipper or consignee to be cited not
appear, the examination shall be made before a
notary, who shall draft a certificate of the result of
the examination, for the proper purposes.
#f the declaration of the shipper should be correct,
the expenses caused by the examination and those
of carefully repac$ing the pac$ages shall be
defrayed by the carrier, and in a contrary case by
the shipper.
. 35 )ILL 56 LA7I30
A1TICL2 $A
#n the absence of a bill of lading the respective
claims of the parties shall be decided by the legal
proofs that each one may submit in support of his
claims, in accordance with the general provisions
established in this Code for commercial contracts.
A1TICL2 $A1
#n transporation made by railroads or other
enterprises which are subject to schedules or the
time fixed by regulations, it shall be sufficient that
the bills of lading or the declarations of shipment
furnished by the shipper refer, with respect to the
rate, terms, and special conditions of the
transportation, to the schedules and regulations,
the application of which he reuests, and should no
schedule by determined, the carrier must apply the
rate of the merchandise paying the lowest, with the
conditions inherent therein, always including such
statement or reference to them in the bill of lading
which he delivers to the shipper.
Is a bill oE la#in- essential to a contract oE
trans?ortation+
No. -hile under ,rt. 9IM the shipper and the
common carrier may mutually demand that a bill of
lading be made, it is not obligatory. !he fact that a
bill of lading is not issued does not preclude the
existence of a contract of transportation.
-here no bill of lading is issued, the disputes
between the parties shall be decided according to
the rules laid down in ,rt. 9I7.
2. 1es?onsibilit/ oE the carrier
1. '(23 IT C5..23C2S
A1TICL2 $AA
!he liability of the carrier shall begin from the
moment he receives the merchandise, in person or
through a person intrusted thereto in the place
indicated for their reception.
4. 15UT2
A1TICL2 $A9
#f there should be an agreement between the
shipper and the carrier with regard to the road
over which the transportation is to be made, the
carrier can not change the route, unless obliged to
do so by force majeure; and should he do so
without being forced to, he shall be liable for any
damage which may be suffered by the goods
transported for any other cause whatsoever,
besides being reuired to pay the amount which
may have been stipulated for such a case.
+- o! /)
'ransportation La(
-hen on account of the said force majeure the
carrier is obliged to ta$e another route, causing an
increase in the transportation charges, he shall be
reimbursed for said increase after presenting the
formal proof thereof.
$. CA12 56 0557S
A1TICL2 $!1
Lerchandise shall be transported at the ris$ and
venture of the shipper, if the contrary was not
expressly stipulated.
!herefore, all damages and impairment suffered by
the goods during the transportation, by reason of
accident, force majeure, or by virtue of the nature
or defect of the articles, shall be for the account
and ris$ of the shipper. cdta
!he proof of these accidents is incumbent on the
carrier.
A1TICL2 $!4
!he carrier, however, shall be liable for the losses
and damages arising from the causes mentioned in
the foregoing article if it is proved that they
occurred on account of his negligence or because
he did not ta$e the precautions usually adopted by
careful persons, unless the shipper committed
fraud in the bill of lading, ma$ing him believe that
the goods were of a class or uality different from
what they really were.
#f, notwithstanding the precaution referred to in
this article, the goods transported run the ris$ of
being lost on account of the nature or by reason of
an unavoidable accident, without there being time
for the owners of the same to dispose thereof, the
carrier shall proceed to their sale, placing them for
this purpose at the disposal, of the judicial
authority or the officials determined by special
provisions.
Art 17$
only*
1/4 .lood, storm, earthua$e, lightning, or other
104 ,ct of the public enemy in war, whether
194 ,ct of omission of the shipper or owner of the
goods;
174 !he character of the goods or defects in the
1I4 ?rder or act of competent public authority.
,rt. /=9I. #n all cases other than those mentioned
in Nos. /, 0, 9, 7, and I 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
reuired in ,rticle /=99.
. 72LI<21*
C537ITI53 56 0557S
A1TICL2 $!$
-ith the exception of the cases prescribed in the
second paragraph of ,rticle 98/, the carrier shall
be obliged to deliver the goods transported in the
same condition in which, according to the bill of
lading, they were at the time of their receipt,
without any detriment or impairment, and should
he not do so, he shall be obliged to pay the value
of the goods not delivered at the point where they
should have been and at the time the delivery
should have ta$en place.
#f part of the goods transported should be
delivered the consignee may refuse to receive
them, when he proves that he can not ma$e use
thereof without the others.
A1TICL2 $!
#f the effect of the damage referred to in ,rticle
98/ should be only a reduction in the value of the
goods, the obligation of the carrier shall be reduced
to the payment of the amount of said reduction in
value, after appraisal by experts.
A1TICL2 $!A
#f, on account of the damage, the goods are
rendered useless for purposes of sale or
consumption in the use for which they are properly
destined the consignee shall not be bound to
receive them, and may leave them on the hands of
the carrier, demanding payment therefor at current
mar$et prices.
#f among the goods damaged there should be some
in good condition and without any defect
whatsoever, the foregoing provision shall be
applicable with regard to the damaged ones, and
the consignee shall receive those which are sound,
this separation being made by distinct and
separate articles, no object being divided for the
purpose, unless the consignee proves the
impossibility of conveniently ma$ing use thereof in
this form.
!he same provision shall be applied to merchandise
in bales or pac$ages, with distinction of the
pac$ages which appear sound.
A1TICL2 $!!
-ithin the twenty%four hours following the receipt
of the merchandise a claim may be brought against
the carrier on account of damage or average found
therein on opening the pac$ages, provided that the
indications of the damage or average giving rise to
the claim can not be ascertained from the exterior
of said pac$ages, in which case said claim would
only be admitted on the receipt of the pac$ages.
,fter the periods mentioned have elapsed, or after
the transportation charges have been paid, no
claim whatsoever shall be admitted against the
carrier with regard to the condition in which the
goods transported were delivered.
A1TICL2 $!7
#f there should occur doubts and disputes between
the consignee and the carrier with regard to the
condition of goods transported at the time of their
delivery to the former, the said goods shall be
examined by experts appointed by the parties, and
a third one, in case of disagreement, appointed by
the judicial authority, the result of the examination
being reduced to writing; and if the persons
+/ o! /)
'ransportation La(
interested should not agree to the report of the
experts and could not settle their disputes, said
judicial authority shall order the deposits of the
merchandise in a safe warehouse, and the parties
interested shall ma$e use of their rights in the
proper manner.
T5 '(5. 72LI<21* .A72
A1TICL2 $!8
!he carrier must deliver to the consignee without
any delay or difficulty the merchandise received by
him, by reason of the mere fact of being
designated in the bill of lading to receive it; and
should said carrier not do so he shall be liable for
the damages which may arise therefrom.
>U7ICIAL 72P5SIT
A1TICL2 $!9
"hould the consignee be not found at the domicile
indicated in the bill of lading, or should refuse to
pay the transportation charges and expenses, or to
receive the goods, the deposit of said goods shall
be ordered by the municipal judge, where there is
no judge of first instance, to be placed at the
disposal of the shipper or sender, without prejudice
to a person having a better right, this deposit
having all the effects of a delivery.
Art. 17A4
Hven 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.
'(23 T5 )2 .A72
A1TICL2 $7B
#f a period has been fixed for the delivery of the
goods, it must be made within the same, and
otherwise the carrier shall pay the indemnity
agreed upon in the bill of lading, neither the
shipper nor consignee being entitled to anything
else.
"hould no indemnity have been agreed upon and
the delay exceeds the time fixed in the bill of
lading, the carrier shall be liable for the damages
which may have been caused by the delay.
A1TICL2 $A8
"hould no period within which goods are to be
delivered be previously fixed, the carrier shall be
under the obligation to forward them in the first
shipment of the same or similar merchandise which
he may ma$e to the point of delivery; and should
he not do so, the damages occasioned by the delay
shall be suffered by him.
T'5 51 .512 CA11I21S
A1TICL2 $7$
, carrier who delivers merchandise to a consignee
by virtue of agreements or combined services with
other carriers shall assume the obligations of the
carriers who preceded him, reserving his right to
proceed against the latter if he should not be
directly responsible for the fault which gives rise to
the claim of the shipper or of the consignee.
!he carrier ma$ing the delivery shall also assume
all the actions and rights of those who may have
preceded him in the transportation.
!he sender and the consignee shall have an
immediate right of action against the carrier who
executed the transportation contract, or against
the other carriers who received the goods
transported without reserve.
!he reservations made by the latter shall not
exempt them, however, from the liabilities they
may have incurred by reason of their own acts.
5)LI0ATI53 T5 ,22P 120IST1*
A1TICL2 $78
!ransportation agents shall be obliged to $eep a
special registry, with the formalities reuired by
,rticle 98, in which there shall be entered, in
progressive order of numbers and dates, all the
goods the transportation of which is underta$en,
stating the circumstances reuired by ,rticles 9IM
et se. for the responsive bills of lading.
C5.PLIA3C2 'IT( A7.I3IST1ATI<2 120ULATI53S
A1TICL2 $77
!he carrier shall be liable for all the conseuences
arising from noncompliance on his part with the
formalities prescribed by the laws and regulations
of the public administration during the entire
course of the trip and on the arrival at the point of
destination, except when his omission arises from
his having been induced into error by false
statements of the shipper in the declaration of the
merchandise.
#f the carrier has acted in accordance with a formal
order received from the shipper or consignee of the
merchandise both shall incur liability.
6. 1i-hts an# 5bli-ations oE Shi??er
an#Lor Consi-nee
1. 1I0(TS T5 7A.A02S
C537ITI53 I.P5S27 53 1I0(T
A1TICL2 $!!
-ithin the twenty%four hours following the receipt
of the merchandise a claim may be brought against
the carrier on account of damage or average found
therein on opening the pac$ages, provided that the
indications of the damage or average giving rise to
the claim can not be ascertained from the exterior
of said pac$ages, in which case said claim would
only be admitted on the receipt of the pac$ages.
,fter the periods mentioned have elapsed, or after
the transportation charges have been paid, no
claim whatsoever shall be admitted against the
carrier with regard to the condition in which the
goods transported were delivered.
A1TICL2 $A7
+= o! /)
'ransportation La(
#f the carrier by reason of well%founded suspicions
as to the correctness of the declaration of the
contents of a pac$age should determine to
examine it, he shall do so before witnesses, in the
presence of the shipper or of the consignee.
"hould the shipper or consignee to be cited not
appear, the examination shall be made before a
notary, who shall draft a certificate of the result of
the examination, for the proper purposes.
#f the declaration of the shipper should be correct,
the expenses caused by the examination and those
of carefully repac$ing the pac$ages shall be
defrayed by the carrier, and in a contrary case by
the shipper.
A1TICL2 $A$
!he legal basis of the contract between the shipper
and the carrier shall be the bills of lading, by the
contents of which all disputes which may arise with
regard to their execution and fulfillment shall be
decided without admission of other exceptions than
forgery or material errors in the drafting thereof.
of lading.
A.5U3T 56 7A.A02S 651 L5SS
A1TICL2 $74
!he appraisement of the goods which the carrier
must pay in case of their being lost or mislaid shall
be fixed in accordance with what is stated in the
bill of lading, no proofs being allowed on the part of
the shipper that there were among the goods
declared therein articles of greater value, and
money.
Aorses, vehicles, vessels, euipment, and all the
other principal and accessory means of
transportation, shall be especially obligated in favor
of the shipper, although with relation to railroads
said obligation shall be subordinated to the
provisions of the laws of concession with regard to
property and to those of this Code with regard to
the manner and form of ma$ing attachments and
retentions against the said companies.
Art. 17
, 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*
1/4 #n writing, signed by the shipper or owner;
104 "upported by a valuable consideration other
than the service rendered by the common carrier;
and
194 @easonable, just and not contrary to public
policy.
A.5U3T 56 7A.A02S 651 72LA*
A1TICL2 $71%$&.
"hould the abandonment not occur the indemnity
for loss and damages on account of the delays can
not exceed the current price of the goods
transported on the day and at the place where the
delivery was to have been made. !he same
provision shall be observed in all cases where this
indemnity is due.
4. 1I0(T T5 A)A3753
A1TICL2 $71
#n cases of delay on account of the fault of the
carrier, referred to in the foregoing articles, the
consignee may leave the goods transported on the
hands of the carrier, informing him thereof in
writing before the arrival of the same at the point
of destination.
-hen this abandonment occurs, the carrier shall
satisfy the total value of the goods, as if they had
been lost or mislaid. aisadc
"hould the abandonment not occur the indemnity
for loss and damages on account of the delays can
not exceed the current price of the goods
transported on the day and at the place where the
delivery was to have been made. !he same
provision shall be observed in all cases where this
indemnity is due.
A1TICL2 $!B
!he shipper may, without changing the place
where the delivery is to be made, change the
consignment of the goods delivered to the carrier,
and the latter shall comply with his orders,
provided that at the time of ma$ing the change of
the consignee the bill of lading subscribed by the
carrier be returned to him, if one were issued,
exchanging it for another containing the novation
of the contract.
!he expenses arising from the change of
consignment shall be defrayed by the shipper.
A1TICL2 $!$
-ith the exception of the cases prescribed in the
second paragraph of ,rticle 98/, the carrier shall
be obliged to deliver the goods transported in the
same condition in which, according to the bill of
lading, they were at the time of their receipt,
without any detriment or impairment, and should
he not do so, he shall be obliged to pay the value
of the goods not delivered at the point where they
should have been and at the time the delivery
should have ta$en place.
#f part of the goods transported should be
delivered the consignee may refuse to receive
them, when he proves that he can not ma$e use
thereof without the others.
A1TICL2 $!A
+A o! /)
'ransportation La(
#f, on account of the damage, the goods are
rendered useless for purposes of sale or
consumption in the use for which they are properly
destined the consignee shall not be bound to
receive them, and may leave them on the hands of
the carrier, demanding payment therefor at current
mar$et prices.
#f among the goods damaged there should be some
in good condition and without any defect
whatsoever, the foregoing provision shall be
applicable with regard to the damaged ones, and
the consignee shall receive those which are sound,
this separation being made by distinct and
separate articles, no object being divided for the
purpose, unless the consignee proves the
impossibility of conveniently ma$ing use thereof in
this form.
!he same provision shall be applied to merchandise
in bales or pac$ages, with distinction of the
pac$ages which appear sound.
$. 1I0(T T5 C(A302 C53SI03.23T
A1TICL2 $!B
!he shipper may, without changing the place
where the delivery is to be made, change the
consignment of the goods delivered to the carrier,
and the latter shall comply with his orders,
provided that at the time of ma$ing the change of
the consignee the bill of lading subscribed by the
carrier be returned to him, if one were issued,
exchanging it for another containing the novation
of the contract.
!he expenses arising from the change of
consignment shall be defrayed by the shipper.
. 5)LI0ATI53 T5 PA*
T1A3SP51TATI53 C(A102S
A1TICL2 $7
!he consignees to whom the remittance may have
been made can not defer the payment of the
expenses and transportation charges on the goods
that they received after twenty%four hours have
elapsed from the time of the delivery; and in case
of delay in ma$ing this payment, the carrier may
reuest the judicial sale of the goods he
transported to a sufficient amount to cover the
transportation charges and the expenses incurred.
A1TICL2 $7A
!he goods transported shall be specifically
obligated to answer for the transportation charges
and for the expenses and fees caused by the same
during their transportations, or until the time of
their delivery.
!his special right shall be limited to eight days
after the delivery has been made, and after said
prescription the carrier shall have no further right
of action than that corresponding to an ordinary
creditor.
A1TICL2 $7!
!he preference of the carrier to the payment of
what is due him for the transportation and
expenses of the goods delivered to the consignee
shall not be affected by the ban$ruptcy of the
latter, provided the action is brought within the
eight days mentioned in the foregoing article.
Art. 441
-ith reference to specific movable property of the
debtor, the following claims or liens shall be
preferred*
1B4 Credits for transportation, upon the goods
carried, for the price of the contract and incidental
expenses, until their delivery and for thirty days
thereafter;
A. 5)LI0ATI53 T5 12TU13 )ILL 56
LA7I30
A1TICL2 $A$. %4& %$&
of lading.
0. A??licabilit/ oE Provisions
A1TICL2 $79
!he provisions contained in ,rticles 97B et se.
shall also be understood as relating to persons
who, although they do not personally effect the
transportation of commercial goods, contract to do
so through others, either as contractors for a
special and fixed transaction or as freight and
transportation agents.
#n either case they shall be subrogated to the place
of the carriers with regard to the obligations and
liability of the latter, as well as with regard to their
right.
7, o! /)
I:. Ad"iraltD and Mariti"e Co""erce
'ransportation La(
IV. Admiralty and
Maritime Commerce
A. Sources oE .ariti"eLA#"iralt/ Laws
in the Phili??ines
Lain source of law* Code of Commerce
#f common carrier, apply Civil Code first, then
Code of Commerce and special laws.
Laritime law includes coastwise, oceanwise
and commercial laws.
). Conce?t oE A#"iralt/C Guris#iction over
a#"iralt/ cases
,dmiralty is distinguished from overland
transportation on the size of the vessel and size
of the body of water over which a vessel
traverses. Aowever, it is now the amount of the
claim that is relevant, and not whether it is an
admiralty or maritime claim.
)P 149 Sec 19
Curisdiction in civil cases. S @egional !rial Courts
shall exercise exclusive original jurisdiction*
194 #n all actions in admiralty and maritime
jurisdiction where he demand or claim exceeds ?ne
hundred thousand pesos 1P/MM,MMM.MM4 or , in
Letro Lanila, where such demand or claim exceeds
!wo hundred thousand pesos 10MM,MMM.MM4;
"ection 99. Curisdiction of Betropolitan Trial
Courts, Bunicipal Trial Courts and Bunicipal Circuit
Trial Courts in civil cases. S Letropolitan !rial
Courts, Lunicipal !rial Courts, and Lunicipal Circuit
!rial Courts shall exercise*
1/4 Hxclusive 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 personal
property, estate, or amount of the demand does
not exceed ?ne hundred thousand pesos
1P/MM,MMM.MM4 or, in Letro Lanila where such
personal property, estate, or amount of the
demand does not exceed !wo hundred thousand
pesos 1P0MM,MMM.MM4 exclusive of interest damages
of whatever $ind, attorneyKs fees, litigation
expenses, and costs, the amount of which must be
specifically alleged* Provided, !hat where there are
several claims or causes of action between the
same or different parties, embodied in the same
complaint, the amount of the demand shall be the
totality of the claims in all the causes of action,
irrespective of whether the causes of action arose
out of the same or different transactions;
C. <essels
1. .2A3I30
Oessels are those engaged in navigation,
whether coastwide or on the high seas, including
floating doc$s, pontoons, dredges, scows, and any
other floating apparatus destined for the services
of the industry or maritime commerce.
Oessels engaged in the business of carrying or
transporting passengers or goods for
compensation, offering their services to the public,
are common carriers, and are governed primarily
by the Civil Code and suppletorily by the Code of
Commerce and special laws.
4. 3ATU12 A37 AC=UISITI53 56
Lo?eJ v. 7uruelo
!he word vessel used in the section was not
intended to include all ships, craft or floating
structures of every $ind without limitation, and the
provision of that section should not be held to
include minor craft engaged only in river or bay
traffic. Oessels of a minor nature, such as river
boats and those carrying passengers from ship to
shore, are governed as to their liability in
passengers by the Civil Code.
A1TICL2 A7$
Lerchant vessels constitute property which may be
acuired and transferred by any of the means
recognized by law. !he acuisition of a vessel must
be included in a written instrument, which shall not
produce any effect with regard to third persons if
not recorded in the mercantile registry.
!he ownership of a vessel shall also be acuired by
the possession thereof in good faith for three
years, with a good title duly recorded.
#n the absence of any of these reuisites,
uninterrupted possession for ten years shall be
necessary in order to acuire ownership.
, captain can not acuire by prescription the ship
of which he is in command.
A1TICL2 A7
!he builders of vessels may employ the material
and with regard to their construction and rigging
may follow the system which is most convenient to
their interests. "hip agents and seamen shall be
subject to the provisions of the laws and
regulations of the public administration on
navigation, customs, health, safety of the vessels,
and other similar provisions.
A1TICL2 A8A
.or all purposes of law not modified or restricted by
the provisions of this Code, vessels shall continue
to be considered as personal property.
Art. 714
?wnership is acuired by occupation and by
intellectual creation.
?wnership and other real rights over property are
acuired and transmitted by law, by donation, by
estate and intestate succession, and in
conseuence of certain contracts, by tradition.
!hey may also be acuired by means of
prescription.
7. Persons Partici?atin- in .ariti"e
Co""erce
1. S(IP5'321S A37 S(IPA023TS
7) o! /)
'ransportation La(
?wners of Oessels and "hip ,gents
A1TICL2 A8!
!he owner of a vessel and the agent shall be civilly
liable for the acts of the captain and for the
obligations contracted by the latter to repair,
euip, and provision the vessel, provided the
creditor proves that the amount claimed was
invested therein.
<y agent is understood the person intrusted with
the provisioning of a vessel, or who represents her
in the port in which she happens to be.
A1TICL2 A87
!he agent shall also be civilly liable for the
indemnities in favor of third persons which arise
from the conduct of the captain in the care of the
goods which the vessel carried; but he may
exempt himself therefrom by abandoning the
vessel with all her euipments and the freight he
may have earned during the voyage.
A1TICL2 A88
Neither the owner of the vessel nor the agent shall
be liable for the obligations contracted by the
captain if the latter exceeds his powers and
privileges which are his by reason of his position or
have been conferred upon him by the former.
Aowever, if the amounts claimed were made use of
for the benefit of the vessel, the owner or agent
shall be liable.
A1TICL2 A89
#f two or more persons should be part owners of a
merchant vessel, an association shall be presumed
as established by the part owners.
!his association shall be governed by the
resolutions of a majority of the members.
, majority shall be the relative majority of the
voting members.
#f there should be only two part owners, in case of
disagreement the vote of the member having the
largest interest shall be decisive. #f the interests
are eual, it shall be decided by lot.
!he representation of the smallest part in the
ownership shall have one vote; and proportionately
the other part owners as many votes as they have
parts eual to the smallest one. aisadc
, vessel can not be detained, attached or levied
upon execution in her entirety for the private debts
of a part owner, but the proceedings shall be
limited to the interest the debtor may have in the
vessel, without interfering with her navigation.
A1TICL2 A9B
!he owners of a vessel shall be civilly liable in the
proportion of their contribution to the common
fund, for the results of the acts of the captain,
referred to in ,rticle IC=.
Hach part owner may exempt himself from this
liability by the abandonment before a notary of the
part of the vessel belonging to him.
A1TICL2 A91
,ll the part owners shall be liable, in proportion to
their respective ownership, for the expenses of
repairs to the vessel, and for other expenses which
are incurred by virtue of a resolution of the
majority.
!hey shall li$ewise be liable in the same proportion
for the expenses of maintenance, euipment, and
provisioning of the vessel, necessary for
navigation.
A1TICL2 A94
!he resolutions of the majority with regard to the
repair, euipment, and provisioning of the vessel in
the port of departure shall bind the majority unless
the partners in the minority renounce their
participation therein, which must be acuired by
the other part owners after a judicial appraisement
of the value of the portion or portions assigned.
!he resolutions of the majority relating to the
dissolution of the association and sale of the vessel
shall also be binding on the minority.
!he sale of the vessel must ta$e place at a public
auction, subject to the provisions of the law of civil
procedure unless the part owners unanimously
agree otherwise, the right of option to purchase
and to withdraw mentioned in ,rticle I=I being
always reserved in favor of said part owners.
A1TICL2 A9$
!he owners of a vessel shall have preference in her
charter to other persons, offering eual conditions
and price. #f two or more of the former should
claim said right the one having greater interest
shall be preferred, and should they have an eual
interest it shall be decided by lot.
A1TICL2 A9
!he part owners shall elect the manager who is to
represent them in the capacity of agent.
!he appointment of director or agent shall be
revocable at the will of the members.
A1TICL2 A9A
!he agent, be he at the same time an owner of a
vessel or a manager for an owner or for an
association of co%owners, must be ualified to
trade and must be recorded in the merchantKs
registry of the province.
!he agent shall represent the ownership of the
vessel, and may in his own name and in such
capacity ta$e judicial and extrajudicial steps in all
that relates to commerce.
A1TICL2 A9!
!he agent may discharge the duties of captain of
the vessel, subject, in every case, to the provisions
contained in ,rticle 8MB.
#f two or more co%owners reuest the position of
captain, the disagreement shall be decided by a
vote of the members; and if the vote should result
in a tie, the position shall be given to the part
owner having the larger interest in the vessel.
#f the interest of the petitioners should be the
same, and there should be a tie, the matter shall
be decided by lot.
A1TICL2 A97
!he agent shall select and come to an agreement
with the captain, and shall contract in the name of
the owners, who shall be bound in all that refers to
repairs, details of euipment, armament,
7+ o! /)
'ransportation La(
provisions, fuel, and freight of the vessel, and, in
general, in all that relates to the reuirements of
navigation.
A1TICL2 A98
!he agent can not order a new voyage, nor ma$e
contracts for a new charter, nor insure the vessel,
without the authority of her owner or by virtue of a
resolution of the majority of the co%owners, unless
these privileges were granted him in the certificate
of his appointment.
#f he should insure the vessel without authority
therefor he shall be secondarily liable for the
solvency of the underwriter.
A1TICL2 A99
!he managing agent of an association, shall give
his co%owners an account of the results of each
voyage of the vessel, without prejudice to always
having the boo$s and correspondence relating to
the vessel and to its voyages at the disposal of the
same.
A1TICL2 !BB
,fter the account of the managing agent has been
approved by a relative majority, the co%owners
shall satisfy the expenses in proportion to their
interest, without prejudice to the civil or criminal
actions which the minority may deem fit to
institute afterwards.
#n order to enforce the payment, the managing
agent shall have a right of action to secure
execution, which shall be instituted by virtue of a
resolution of the majority, and without further
proceedings than the ac$nowledgment of the
signatures of the persons who voted the resolution.
A1TICL2 !B1
"hould there be any profits, the co%owners may
demand of the managing agent the amount due
them, by means of an executory action without
further reuisites than the ac$nowledgment of the
signatures of the instrument approving the
account.
A1TICL2 !B4
!he agent shall indemnify the captain for all the
expenses he may have incurred from his own funds
or from those of other persons, for the benefit of
the vessel.
A1TICL2 !B$
<efore a vessel goes out to sea the agent shall
have at his discretion, a right to discharge the
captain and members of the crew whose contract
did not state a definite period nor a definite
voyage, paying them the salaries earned according
to their contracts, and without any indemnity
whatsoever, unless there is a special and specific
agreement in respect thereto.
A1TICL2 !B
#f the captain or any other member of the crew
should be discharged during the voyage, they shall
receive their salary until the return to the place
where the contract was made, unless there are
good reasons for the discharge, all in accordance
with ,rticles 898 et se. of this Code.
A1TICL2 !BA
#f the contracts of the captain and members of the
crew with the agent should be for a definite period
or voyage, they can not be discharged until the
fulfillment of their contracts, except for reasons of
insubordination in serious matters, robbery, theft,
habitual drun$enness, and damage caused to the
vessel or to its cargo by malice or manifest or
proven negligence.
A1TICL2 !B!
#f the captain should be a part owner in the vessel,
he can not be discharged without the agent
returning him the amount of his interest therein,
which, in the absence of an agreement between
the parties, shall be appraised by experts
appointed in the manner established in the law of
civil procedure.
A1TICL2 !B7
#f the captain who is a part owner should have
obtained the command of the vessel by virtue of a
special agreement contained in the articles of co%
partnership, he can not be deprived thereof except
for the reasons mentioned in ,rticle 8MI.
A1TICL2 !B8
#n case of the voluntary sale of the vessel, all
contracts between the agent and captain shall
terminate, the right to proper indemnity being
reserved in favor of the captain, according to the
agreements made with the agent.
!hey vessel sold shall remain subject to the
security of the payment of said indemnity if, after
the action against the vendor has been instituted,
the latter should be insolvent.
A1TICL2 !18
!he captain shall be civilly liable to the agent, and
the latter to the third persons who may have made
contracts with the former S
/. .or all the damages suffered by the vessel
and his cargo by reason of want of s$ill or
negligence on his part. #f a misdemeanor or crime
has been committed he shall be liable in
accordance with the Penal Code. cda
0. .or all the thefts committed by the crew,
reserving his right of action against the guilty
parties.
9. .or the losses, fines, and confiscations
imposed an account of violation of the laws and
regulations of customs, police, health, and
navigation.
7. .or 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 full
use of his authority to prevent or avoid them.
I. .or those arising by reason of an undue use of
powers and non%fulfillment of the obligations which
are his in accordance with ,rticles 8/M and 8/0.
8. .or those arising by reason of his going out of
his course or ta$ing a course which he should not
have ta$en 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.
77 o! /)
'ransportation La(
No exception whatsoever shall exempt him
from this obligation.
=. .or those arising by reason of his voluntarily
entering a port other than his destination, with the
exception of the cases or without the formalities
referred to in ,rticle 8/0.
C. .or those arising by reason of the non%
observance of the provisions contained in the
regulations for lights and evolutions for the
purpose of preventing collisions.
Stan#ar# 5il v. Castelo %1941&
#n considering the uestion now before us it is
important to remember that the owner of the ship
ordinarily has vastly more capital embar$ed upon a
voyage than has any individual shipper of cargo.
Loreover, the owner of the ship, in the person of
the captain, has complete and exclusive control of
the crew and of the navigation of the ship, as well
as of the disposition of the cargo at the end of the
voyage. #t is therefore proper that any person
whose property may have been cast overboard by
order of the captain should have a right of action
directly against the shipKs owner for the breach of
any duty which the law may have imposed on the
captain with respect to such cargo. !o adopt the
interpretation of the law for which the appellant
contends would place the shipowner in a position to
escape all responsibility for a general average of
this character by means of the delinuency of his
own captain. !his cannot be permitted. !he evident
intention of the Code, ta$en in all of its provisions,
is to place the primary liability upon the person
who has actual control over the conduct of the
voyage and who has most capital embar$ed in the
venture, namely, the owner of the ship, leaving
him to obtain recourse, as it is very easy to do,
from other individuals who have been drawn into
the venture as shippers.

12SP53SI)ILITI2S A37 LIA)ILITI2S
*u Con v. I?il %191!&
As to the shi?owner8 Hstasen, ma$es the
following remar$s* #t is well and good that the
shipowner be not held criminally liable for such
crimes or uasi crimes; but the cannot be excused
from liability for the damage and harm which, in
conseuence of those acts, may be suffered by the
third parties who contracted with the captain, in his
double capacity of agent and subordinate of the
shipowner himself. #n maritime commerce, the
shippers and passengers in ma$ing contracts with
the captain do so through the confidence they have
in the shipowner who appointed him; they presume
that the owner made a most careful investigation
before appointing him, and, above all, they
themselves are unable to ma$e such an
investigation, and even though they should do so,
they could not obtain complete security, inasmuch
as the shipowner can, whenever he sees fir,
appoint another captain instead.
75CT1I32 56 LI.IT27 LIA)ILIT* A37 2XC2PTI53S
A1TICL2 A87
!he agent shall also be civilly liable for the
indemnities in favor of third persons which arise
from the conduct of the captain in the care of the
goods which the vessel carried; but he may
exempt himself therefrom by abandoning the
vessel with all her euipments and the freight he
may have earned during the voyage.
A1TICL2 A9B
!he owners of a vessel shall be civilly liable in the
proportion of their contribution to the common
fund, for the results of the acts of the captain,
referred to in ,rticle IC=.
Hach part owner may exempt himself from this
liability by the abandonment before a notary of the
part of the vessel belonging to him.
A1TICL2 8$7
!he civil liability contracted by the shipowners in
the cases prescribed in this section, shall be
understood as limited to the value of the vessel
with all her appurtenances and all the freight
earned during the voyage.
*an-co v. Laserna et al %191&
#f the shipowner or agent may in any way be held
civilly liable at all for injury to or death of
passengers arising from the negligence of the
captain in cases of collisions or shipwrec$s, his
liability is merely co%extensive with his interest in
the vessel such that a total loss thereof results in
its extinction. #n arriving at this conclusion, the fact
is not ignored that the ill%fated ". ". Negros, as a
vessel engaged in interisland trade, is a common
carrier, and that the relationship between the
petitioner and the passengers who died in the
mishap rests on a contract of carriage. <ut
assuming that petitioner is liable for a breach of
contract of carriage, the exclusively 'real and
hypothecary nature' of maritime law operates to
limit such liability to the value of the vessel, or to
the insurance thereon, if any. #n the instant case it
does not appear that the vessel was insured.
,rt. IC= of the Code of Commerce appears to deal
only with the limited liability of shipowners or
agents for damages arising from the misconduct of
the captain in the care of the goods which the
vessel carries, but this is a mere deficiency of
language and in no way indicates the true extent of
such liability.
-hether the abandonment of the vessel sought by
the petitioner in the instant case was in accordance
with law or not is immaterial. !he vessel having
totally perished, any act of abandonment would be
an idle ceremony. Judgment is reversed and
petitioner is hereby absolved of all the complaints,
without costs.
A)U20 vs. SA3 7I205%19!&
!he real and hypothecary nature of the liability of
the shipowner or agent embodied in the provisions
of the Laritime 6aw, <$ ###, Code of Commerce,
had its origin in the prevailing continues of the
maritime trade and sea voyages during the
medieval ages, attended by innumerable hazards
and perils. !o offset against these adverse
conditions and 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,
78 o! /)
'ransportation La(
euipment, and freight, or insurance, if any, so
that if the shipowner or agent abandoned the ship,
euipment, and freight, his liability was
extinguished.
#f an accident is compensable under the
-or$menKs Compensation ,ct, it must be
compensated even when the wor$manKs right is not
recognized by or is in conflict with other provisions
of the Civil Code or the Code of Commerce. !he
reason behind this principle is that the -or$menKs
Compensation ,ct was enacted by the 6egislature
in abrogation of the other existing laws.
SP2CI6IC 1I0(TS A37 P12150ATI<2S
A1TICL2 A7A
Part owners of vessels shall enjoy the right of
option of purchase and withdrawal in the sales
made to strangers; but they can only exercise it
within the nine days following the record of the
sale in the registry and by delivering the price at
once.
A1TICL2 A9$
!he owners of a vessel shall have preference in her
charter to other persons, offering eual conditions
and price. #f two or more of the former should
claim said right the one having greater interest
shall be preferred, and should they have an eual
interest it shall be decided by lot.
A1TICL2 A9
!he part owners shall elect the manager who is to
represent them in the capacity of agent.
!he appointment of director or agent shall be
revocable at the will of the members.
A1TICL2 A9!
!he agent may discharge the duties of captain of
the vessel, subject, in every case, to the provisions
contained in ,rticle 8MB.
#f two or more co%owners reuest the position of
captain, the disagreement shall be decided by a
vote of the members; and if the vote should result
in a tie, the position shall be given to the part
owner having the larger interest in the vessel.
#f the interest of the petitioners should be the
same, and there should be a tie, the matter shall
be decided by lot.
,@!#C6H 8M/. "hould there be any profits, the co%
owners may demand of the managing agent the
amount due them, by means of an executory
action without further reuisites than the
ac$nowledgment of the signatures of the
instrument approving the account.
4. CAPTAI3S A37 .AST21S
=UALI6ICATI53S A37 LIC23SI30
A1TICL2 !B9
Captains and masters of vessels must be "paniards
T having legal capacity to bind themselves in
accordance with this Code, and must prove that
they have the s$ill, capacity, and ualifications
reuired to command and direct the vessel, as
established by marine laws, ordinances, or
regulations, or by those of navigation, and that
they are not disualified according to the same for
the discharge of the duties of that position. cdt
#f the owner of a vessel desires to be the captain
thereof and does not have the legal ualifications
therefor, he shall limit himself to the financial
administration of the vessel, and shall intrust her
navigation to a person possessing the ualifications
reuired by said ordinances and regulations.
P5'21S A37 7UTI2S
A1TICL2 !1B
!he following powers are inherent in the position of
captain or master of a vessel*
/. !o appoint or ma$e contracts with the crew in
the absence of the agent and propose said crew,
should said agent be present; but the agent shall
not be permitted to employ any member against
the captainKs express refusal.
0. !o command the crew and direct the vessel to
the port of its destination, in accordance with the
instructions he may have received from the agent.
9. !o impose, in accordance with the agreements
and the laws and regulations of the merchants
marine, on board the vessel, correctional
punishment upon those who do not comply with his
orders or who conduct themselves against
discipline, holding a preliminary investigation on
the crimes committed on board the vessel on the
high seas, which shall be turned over to the
authorities, who are to ta$e cognizance thereof, at
the first port touched.
7. !o ma$e contracts for the charter of the
vessel in the absence of the agent or of her
consignee, acting in accordance with the
instructions received and protecting the interests of
the owner most carefully.
I. !o adopt all the measures which may be
necessary to $eep the vessel well supplied and
euipped, purchasing for the purpose all that may
be necessary, provided there is no time to reuest
instructions of the agent.
8. !o ma$e, in similar urgent cases and on a
voyage, the repairs to the hull and engines of the
vessel and to her rigging and euipment which are
absolutely necessary in order for her to be able to
continue and conclude her voyage; but if she
should arrive at a point where there is a consignee
of the vessel, he shall act in concurrence with the
latter.
A1TICL2 !11
#n order to comply with the obligations mentioned
in the foregoing article, the captain, when he has
no funds and does not expect to receive any from
the agent, shall procure the same in the successive
order stated below*
/. <y reuesting said funds of the consignees or
correspondents of a vessel.
0. <y applying to the consignees of the cargo or
to the persons interested therein.
9. <y drawing on the agent.
7. <y borrowing the amount reuired by means
of a bottomry bond.
I. <y selling a sufficient amount of the cargo to
cover the amount absolutely necessary to repair
the vessel, and to euip her to pursue the voyage.
7> o! /)
'ransportation La(
#n the two latter cases he must apply to the judicial
authority of the port, if in "pain T and to the
"panish T consul, if in a foreign country; and
where there should be none, to the local authority,
proceeding in accordance with the prescriptions of
,rticle IC9, and with the provisions of the law of
civil procedure.
A1TICL2 !44
#f while on a voyage the captain should learn of the
appearance of privateers or men of war against his
flag, he shall be obliged to ma$e the nearest
neutral port, inform his agent or shippers, and
await an occasion to sail under convoy, or until the
danger is over or he has received express orders
from the ship agent or the shippers.
A1TICL2 !4
, captain whose vessel has gone through a
hurricane or who believes that the cargo has
suffered damages or averages, shall ma$e a
protest thereon before the competent authority at
the first port he touches, within 07 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.
!he captain shall proceed in the same manner, if,
the vessel having been wrec$ed; he is saved alone
or with part of his crew, in which case he shall
appear before the nearest authority, and ma$e a
sworn statement of facts.
!he 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 ta$ing such other steps as may assist
in arriving at the facts he shall ma$e a statement
of the result of the proceedings in the log boo$ and
in that of the sailing mate, and shall deliver to the
captain the original records 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.
!he 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 saving proof to the contrary.
A1TICL2 !4A
!he 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 reuired 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.
#f 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 $now to
whom he is to legally ma$e 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 regards to its
deposit, preservation and custody.
P15(I)IT27 ACTS A37 T1A3SACTI53S
A1TICL2 !1$
, captain who navigates for freight in common or
on shares can not ma$e any transaction for his
exclusive account, and should he do so the profit
shall belong to the other persons in interest, and
the losses shall be for his own exclusive account.
A1TICL2 !1
, captain who, having made an agreement to
ma$e a voyage, fails to perform his underta$ing,
without being prevented by fortuitious accident or
force majeure, shall indemnify for all the losses
which he may cause, without prejudice to the
criminal penalties which may be proper.
A1TICL2 !1A
-ithout the consent of the agent, the captain can
not 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 article, the substitute
as well as the captain may be discharged by the
agent.
A1TICL2 !17
!he captain can not contract loans on
respondentia, and should he do so the contracts
shall be void.
Neither can 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
provided there does not exist any other $ind of lien
or obligation thereon. -hen he is permitted to do
so, he must necessarily state what interest he has
in the vessel.
#n case of violation of this article the principal,
interest, and costs shall be charged to the private
account of the captain, and the agent may
furthermore have the right to discharge him.
A1TICL2 !41
, captain who borrows money on bottomry, or who
pledges or sells merchandise or provisions in other
cases and without the formalities prescribed in this
Code, shall be liable for the principle, interest, and
costs, and shall indemnify for the damages he may
cause.
!he captain who commits fraud in his accounts
shall reimburse the amount defrauded, and shall be
subject to the provisions contained in the Penal
Code.
A1TICL2 A8$
#f the ship being on a voyage the captain should
find it necessary to contract one or more of the
obligations mentioned in Nos. C and B of ,rticle
ICM, he shall apply to the judge or court if he is in
"panish T territory, and otherwise to the consul of
"pain, T should there be one, and, in his absence
to the judge or court or to the proper local
authority, presenting the certificate of the registry
7- o! /)
'ransportation La(
of the vessel treated of in ,rticle 8/0, and the
instruments proving the obligation contracted.
!he judge or court, the consul or the local authority
as the case may be, in view of the result of the
proceedings instituted, shall ma$e a temporary
memorandum in the certificate of their result, in
order that it may be recorded in the registry when
the vessel returns to the port of her registry, or so
that it can be admitted as a legal and preferred
obligation in case of sale before the return, by
reason of the sale of the vessel by virtue of a
declaration of unseaworthiness.
!he lac$ of this formality shall ma$e the captain
personally liable to the creditors who may be
prejudiced through his fault.
$. 5T(21 566IC21S A37 C12'
C53T1ACTS A37 651.ALITI2S
A1TICL2 !$
!he captain may ma$e up his crew with the
number he may consider advisable, and in the
absence of "panish T sailors he may ship
foreigners residing in the country, the number
thereof not to exceed one%fifth of the total crew. #f
in foreign ports the captain should not find a
sufficient number of "panish T sailors, he may
ma$e up the crew with foreigners, with the consent
of the consul or marine authorities.
!he agreements which the captain may ma$e with
the members of the crew and others who go to
ma$e up the complement of the vessels, to which
reference is made in ,rticle 8/0, must be reduced
to writing in the account boo$ without the
intervention of a notary public or cler$, signed by
the parties thereto, and vised by the marine
authority if they are executed in "panish T
territory, or by the consuls or consular agents of
"pain T if executed abroad, stating therein all the
obligations which each one contracts and all the
rights they acuire, said authorities ta$ing care
that these obligations and rights are recorded in a
concise and clear manner, which will not give rise
to doubts or claims. cd
!he captain shall ta$e care to read to them the
articles of this Code, which concern them, stating
that they were read in the said document.
#f the boo$ includes the reuisites prescribed in
,rticle 8/0, and there should not appear any signs
of alterations in its clauses, it shall be admitted as
evidence in uestions which may arise between the
captain and the crew with regard to the
agreements contained therein and the amounts
paid on account of the same.
Hvery member of the crew may reuest a copy of
the captain, signed by the latter, of the agreement
and of the liuidation of his wages, as they appear
in the boo$.
7UTI2S A37 LIA)ILITI2S
A1TICL2 !$A
, sailor who has been contracted to serve on a
vessel can not rescind his contract nor fail to
comply therewith except by reason of a legitimate
impediment which may have occurred.
Neither can he pass from the service of one vessel
to another without obtaining the written consent of
the vessel on which he may be.
#f, without obtaining said permission, the sailor
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
loo$ for a person to substitute him at his expense.
"aid sailor shall furthermore lose the wages earned
on his first contract to the benefit of the vessel for
which he may have signed.
, captain who, $nowing that a sailor is in the
service of another vessel, should have made a new
agreement with him, without having reuested the
permission referred to in the foregoing paragraphs,
shall be personally liable to the captain of the
vessel to which the sailor first belonged for that
part of the indemnity, referred to in the third
paragraph of this article, which the sailor could not
pay.
1I0(TS
A1TICL2 !$!
"hould a fixed period for which a sailor has signed
not be stated, he can not be discharged until the
end of the return voyage to the port where he
enrolled.
A1TICL2 !$7
Neither can the captain discharge a sailor during
the time of his contract except for sufficient cause,
the following being considered as such*
/. !he perpetration of a crime which disturbs
order on the vessel.
0. @epeated offenses of insubordination, against
discipline, or against the fulfillment of the service.
9. @epeated incapacity or negligence in the
fulfillment of the service to be rendered.
7. Aabitual drun$enness.
I. ,ny occurrence which incapacitates the sailor
to carry out the wor$ under his charge, with the
exception of the provisions contained in ,rticle
877.
8. Gesertion.
!he captain may, however, before setting out on a
voyage and without giving any reason whatsoever,
refuse to permit a sailor he may have engaged
from going on board and may leave him on land, in
which case he will be obliged to pay him his wages
as if he had rendered services.
!his 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 service of the former. "hould this not be the
case, it shall be paid by the captain personally.
aisadc
,fter the vessel has sailed, and during the voyage
and until the conclusion thereof, the captain can
not abandon any member of his crew on land or on
the sea, unless, by reason of being guilty of some
crime, his imprisonment and delivery to the
competent authority is proper in the first port
touched, which will be obligatory on the captain.
A1TICL2 !$8
7/ o! /)
'ransportation La(
#f, the crew having been engaged, the voyage is
revo$ed by the will of the agent or of the
charterers before or after the vessel has put to sea
or if the vessel is in the same manner given a
different destination than that fixed in the
agreement with the crew, the latter shall be
indemnified because of the rescission of the
contract according to the case, viz*
/. #f the revocation of the voyage should be
decided before the departure of the vessel from the
port, each sailor engaged shall be given one
monthKs 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.
0. #f the agreement should have been for a fixed
amount for the whole voyage, there shall be
graduated what may be due for said month and
days, calculating the same in proportion to the
estimated duration of the voyage, 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
one month more or less, the indemnity shall be
fixed for fifteen days, discounting in all cases the
sums advanced.
9. #f the revocation should ta$e place after the
vessel has put to sea, the sailors engaged for a
fixed amount for the voyage shall receive the
salary which may have been offered them in full 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 reuire to arrive at
the port of destination, the captain being obliged,
furthermore, to pay said sailors the passage to the
said port or to the port of sailing of the vessel, as
may be convenient for them.
7. #f the agent or the charterers of the vessel
should give said vessel a destination other than
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. /, 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.
#f they accept the change, and the voyage, on
account of the greater distance or for other
reasons, should give rise to an increase of wages,
the latter shall be privately regulated, or through
amicable arbitrators in case of disagreement. Hven
though the voyage may be to a nearer point, this
shall not give rise to a reduction in the wages
agreed upon.
#f the revocation or change of the voyage should
originate from the shippers or charterers, the agent
shall have a right to demand of them the indemnity
which is justly due.
A1TICL2 !$9
#f the revocation of the voyage should arise from a
just cause independent of the will of the agent or
charterers, and the vessel should not have left the
port, the members of the crew shall not have any
other right than to receive the wages earned up to
the day on which the revocation too$ place.
A1TICL2 !B
!he following shall be just causes for the
revocation of the voyage*
/. , declaration of war or interdiction of
commerce with the power to whose territory the
vessel was bound.
0. !he bloc$ade of the port of destination or the
brea$ing out of an epidemic after the agreement.
9. !he prohibition to receive in said port the
goods which ma$e up the cargo of the vessel.
7. !he detention or embargo of the same by
order of the &overnment, or for any other reason
independent of the will of the agent.
I. !he inability of the vessel to navigate.
A1TICL2 !1
#f, after a voyage has been begun, any of the first
three causes mentioned in the foregoing article
should occur, the sailors shall be paid at the port
the captain may deem it advisable to ma$e for the
benefit of the vessel and cargo, according to the
time they may have served thereon; but if the
vessel is to continue the voyage, the captain and
the crew may mutually demand the enforcement of
the contract.
#n 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 engagement shall be
rescinded and the crew shall be paid what they
should have earned, according to the contract, if
the voyage had been made. ,nd if the agreement
had been made for a fixed sum for the voyage, the
contract must be complied within the terms agreed
upon.
#n the fifth case, the crew shall not have any other
right than be entitled to recover the wages earned;
but if the disability of the vessel should have been
caused by the negligence or lac$ of s$ill of the
captain, engineer, or sailing mate, they shall
indemnify the crew for the loss suffered, always
reserving the criminal liability which may be
proper.
A1TICL2 !4
#f the crew has been engaged to wor$ 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 paid into the common funds of the
vessel by the persons liable for said occurrences.
A1TICL2 !$
#f the vessel and her freight should be totally lost,
by reason of capture or wrec$, all rights of the
crew to demand any wages whatsoever shall be
extinguished, as well as that of the agent for the
recovery of the advances made.
#f a portion of the vessel or freight should be
saved, or part of either, the crew engaged on
wages, including the captain, shall retain their
rights on the salvage, so far as they go, on the
remainder of the vessel as well as value of the
freightage or the cargo saved; but sailors who are
engaged on shares shall not have any right
whatsoever to the salvage of the hull, but only on
the portion of the freightage saved. #f they should
have wor$ed to collect the remainder of the ship%
7= o! /)
'ransportation La(
wrec$ed vessel, they shall be given an award in
proportion to the efforts made and to the ris$s
encountered in order to accomplish the salvage.
A1TICL2 !
, sailor who falls sic$ shall not lose his right to
wages during the voyage, unless the sic$ness is
the result of his own fault. ,t any rate, the costs of
the attendance and cure shall be defrayed from the
common funds, in the form of a loan.
#f the sic$ness should be caused by an injury
received in the service or defense of the vessel the
sailor shall be attended and cured from the
common funds, there being deducted before
anything else from the proceeds of the freight, the
cost of the attendance and cure.
A1TICL2 !A
#f a sailor should die during the voyage his heir
shall be given the wages earned and not received,
according to his engagement and the reason for his
death, namely S
#f he should have died a natural death and should
have been engaged on wages there shall be paid
what may have been earned up to the date of his
death.
#f the engagement had been made for a fixed sum
for the whole voyage there shall be paid half the
amount earned if the sailor died on the voyage out,
and the whole amount if he died on the return
voyage.
,nd if the engagement had been made on shares
and the death should have occurred after the
voyage was begun, the heirs shall be paid the
entire portion due the sailor; but should the latter
have died before the departure of the vessel from
the port, the heirs shall not be entitled to claim
anything.
#f the death should have occurred in the defense of
the vessel, the sailor shall be considered as living,
and his heirs shall be paid, at the end of the
voyage, the full amount of wages or the full part of
the profits due him as to the others of his grade.
!he sailor shall li$ewise be considered as present in
the event of his capture when defending the
vessel, in order to enjoy the same benefits as the
rest; but should he have been captured on account
of carelessness or other accident not related to the
service, he shall only receive the wages due up to
the day of his capture.
A1TICL2 !!
!he vessel with her engines, rigging, euipment,
and freights shall be liable for the wages earned by
the crew engaged per month or for the trip, the
liuidation and payment ought to ta$e place
between one voyage and the other.
,fter a new voyage has been underta$en, credits
such as the former shall lose their right of
preference.
A1TICL2 !7
!he officers and the crew of the vessel shall be
exempted from all obligations contracted, if they
deem it proper, in the following cases*
/. #f, before the beginning of the voyage, the
captain attempts to change it, or there occurs a
naval war with the power to which the vessel was
destined.
0. #f a disease should brea$ out and be officially
declared epidemic in the port of destination.
9. #f the vessel should change owner or captain.
. SUP21CA1052S
A1TICL2 !9
"upercargoes shall discharge on board the vessel
the administrative duties which the agent or
shippers may have assigned them; they shall $eep
an account and record of their transactions in a
boo$ which shall have the same conditions and
reuisites as reuired for the accounting boo$ of
the captain, and shall respect the latter in his
duties as chief of the vessel. cdta
!he powers and liabilities 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.
A1TICL2 !AB
,ll the provisions contained in the second section
of !itle ###, <oo$ ##, with regard to ualifications,
manner of ma$ing contracts, and liabilities of
factors shall be applicable to supercargoes.
A1TICL2 !A1
"upercargoes can not, without special
authorization or agreement, ma$e 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 a special authorization thereto from
the principals.
'hat is a su?ercar-o+
Ae or she is an agent of the owner of goods
shipped as cargo on a vessel, who has charge of
the cargo on board, sells the same to the best
advantage in the foreign mar$ets, buys cargo to be
brought bac$ on the return voyage of the ship, and
comes home with it.
2. Acci#ents an# 7a"a-es in .ariti"e
Co""erce
1. A<21A02S
3ATU12 A37 ,I37S
A1TICL2 8B!
.or the purposes of this Code the following shall be
considered averages*
/. ,ll extraordinary or accidental expenses which
may be incurred during the navigation for the
preservation of the vessel or cargo, or both.
0. ,ll damages or deterioration the vessel may
suffer from the time she puts to sea from the port
of departure until she casts anchor in the port of
7A o! /)
'ransportation La(
destination, and those suffered by the merchandise
from the time it is loaded in the port of shipment
until it is unloaded in the port of consignment.
A1TICL2 8B7
!he petty and ordinary expenses of navigation,
such as pilotage of coasts and ports, lighterage and
towage, anchorage dues, inspection, health,
uarantine, lazaretto, and other so%called port
expenses, costs of barges, and unloading, until the
merchandise is placed on the wharf, and any other
expenses common to navigation shall be
considered ordinary expenses to be defrayed by
the shipowner, unless there is a special agreement
to the contrary.
A1TICL2 8B8
,verages shall be*
/. "imple or particular.
0. &eneral or gross.
i. Si"?le or Particular
%a& 7eEine#
A1TICL2 8B9
"imple or particular averages shall be, as a general
rule, all the expenses and damages caused to the
vessel or to her cargo which have not redounded to
the benefit and common profit of all the persons
interested in the vessel and her cargo, and
especially the following*
/. !he damages suffered by the cargo from the
time of its embar$ation until it is unloaded, either
on account of the nature of the goods or by reason
of an accident at sea or force majeure, and the
expenses incurred to avoid and repair the same.
0. !he damages suffered by the vessel in her
hull, rigging, arms, and euipment, for the same
causes and reasons, from the time she puts to sea
from the port of departure until she anchored in
the port of destination.
9. !he damages suffered by the merchandise
loaded on dec$, except in coastwise navigation, if
the marine ordinances allow it.
7. !he wages and victuals of the crew when the
vessel should be detained or embargoed by a
legitimate order or force majeure, if the charter
should have been for a fixed sum for the voyage.
I. !he necessary expenses on arrival at a port,
in order to ma$e repairs or secure provisions.
8. !he 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
cover any other reuirement of the vessel against
which the proper amount shall be charged.
=. !he victuals and wages of the crew during the
time the vessel is in uarantine.
C. !he damage suffered by the vessel or cargo
by reason of an impact or collision with another, if
it were accidental and unavoidable. #f the accident
should occur through the fault or negligence of the
captain, the latter shall be liable for all the damage
caused.
B. ,ny damage suffered by the cargo through
the faults, 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 freight.
%b& 2EEects
A1TICL2 81B
!he owner of the goods which gave rise to the
expense or suffered the damage shall bear the
simple or particular averages.
ii. 0ross or 0eneral
%a& 7eEine#
A1TICL2 811
&eneral or gross averages shall be, as a general
rule, all the damages and expenses which are
deliberately caused in order to save the vessel, her
cargo, or both at the same time, from a real and
$nown ris$, and particularly the following*
/. !he goods or cash invested in the redemption
of the vessel or cargo captured by enemies,
privateers, or pirates, and the provisions, wages,
and expenses of the vessel detained during the
time the arrangement or redemption is ta$ing
place.
0. !he goods jettisoned to lighten the vessel,
whether they belong to the vessel, to the cargo, or
to the crew, and the damage suffered through said
act by the goods $ept.
9. !he cables and masts which are cut or
rendered useless, the anchors and the chains which
are abandoned in order to save the cargo, the
vessel, or both.
7. !he expenses of removing or transferring a
portion of the cargo in order to lighten the vessel
and place her in condition to enter a port or
roadstead, and the damage resulting therefrom to
the goods removed or transferred.
I. !he damage suffered by the goods of the
cargo through the opening made in the vessel in
order to drain her and prevent her sin$ing.
8. !he expenses caused through floating a vessel
intentionally stranded for the purpose of saving
her.
=. !he damage caused to the vessel which it is
necessary to brea$ open, scuttle, or smash in order
to save the cargo.
C. !he expenses of curing and maintaining the
members of the crew who may have been wounded
or crippled in defending or saving the vessel.
B. !he wages of any member of the crew
detained 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.
/M. !he wages and victuals of the crew of a vessel
chartered by the month during the time it should
be embargoed or detained by force majeure or by
order of the &overnment, or in order to repair the
damage caused for the common good.
//. !he loss suffered in the value of the goods
sold at arrivals under stress in order to repair the
vessel because of gross average.
/0. !he expenses of the liuidation of the
average.
A1TICL2 817
8, o! /)
'ransportation La(
#f in lightening a vessel on account of a storm, in
order to facilitate her entry into a port or
roadstead, part of her 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
has originated from a gross average, the amount
thereof being distributed between the entire vessel
and cargo which caused the same.
#f, on the contrary, the merchandise transferred
should be saved and the vessel should be lost, no
liability can be demanded of the salvage.
A1TICL2 818
#f, as a necessary measure to extinguish a fire in a
port; roadstead; cree$, or bay, it should be decided
to sin$ any vessel, this loss shall be considered
gross average, to which the vessels saved shall
contribute.
%b& 2ssential 1eFuisites
A1TICL2 81$
#n order to incur the expenses and cause the
damages corresponding to gross average, a
previous resolution of the captain, adopted after
deliberation with the sailing mate and other officers
of the vessel, and with a hearing of the persons
interested in the cargo who may be present, shall
be reuired.
#f the latter shall object, and the captain and
officers, or a majority, or the captain, if opposed to
the majority, should consider certain measures
necessary, they may be executed under his
liability, without prejudice to the freighters
exercising their rights against the captain before
the judge or court of competent jurisdiction, if they
can prove that he acted with malice, lac$ of s$ill, or
negligence.
#f the persons interested in the cargo, being on the
vessel, should not be heard, they shall not
contribute to the gross average, which contribution
shall be paid by the captain, unless the urgency of
the case should be such that the time necessary for
previous deliberation was lac$ing.
A1TICL2 81
!he resolution adopted to cause the damages
which constitute a general average must
necessarily be entered in the log boo$, stating the
motives and reasons therefor, the votes against it,
and the reasons for the disagreement should there
be any, and the irresistible and urgent causes
which moved the captain if he acted of his own
accord.
#n the first case the minutes shall be signed by all
the persons present who could do so before ta$ing
action if possible, and if not at the first
opportunity; in the second case by the captain and
by the officers of the vessel.
#n the minutes and after the resolution there shall
be stated in detail all the goods cast away, and
mention shall be made of the injuries caused to
those $ept on board. !he captain shall be obliged
to deliver one copy of these minutes to the
maritime judicial authority of the first port he may
ma$e within twenty%four hours after his arrival,
and to ratify it immediately by an oath.
A1TICL2 8!B
#f, notwithstanding the jettison of the merchandise,
brea$age of masts, ropes, and euipment, the
vessel should be lost running said ris$, no
contribution whatsoever by reason of gross
average shall be proper.
!he owners of the goods saved shall not be liable
for the indemnity of those jettisoned, lost, or
damaged.
.A0SA*SA* I3C. vs A0A3 1/BII4
@HRP#"#!H" .?@ &HNH@,6 ,OH@,&H*
/. !here must be a common danger. !his means,
that both the ship and the cargo, after it has been
loaded, are subject to the same danger, whether
during the voyage, or in the port of loading or
unloading; that the danger arises from the
accidents of the sea, dispositions of the authority,
or faults of men, provided that the circumstances
producing the peril should be ascertained and
imminent or may rationally be said to be certain
and imminent. !his last reuirement exclude
measures underta$en against a distant peril.
0. !hat for the common safety, part of the vessel
or of the cargo or both is sacrificed deliberately.
9. !hat from the expenses or damages caused
follows the successful saving of the vessel and
cargo.
7. !hat the expenses or damages should have
been incurred or inflicted after ta$ing proper legal
steps and authority
%c& 2EEects
A1TICL2 814
#n 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.
%#& >ettison
A1TICL2 81A
!he captain shall supervise the jettison, and shall
order the goods cast overboard in the following
order*
/. !hose which are on dec$, beginning with
those which embarrass the handling of the vessel
or damage her, preferring, if possible, the heaviest
ones and those of least utility and value. cda
0. !hose in the hold, always beginning with
those of the greatest weight and smallest value, to
the amount and number absolutely indispensable.
A1TICL2 81!
#n order that the goods jettisoned may be included
in the gross average and the owners thereof be
entitled to indemnity, it shall be necessary in so far
as the cargo is concerned that their existence on
board be proven by means of the bill of lading; and
with regard to those belonging to the vessel, by
means of the inventory made up before the
departure, in accordance with the first paragraph
of ,rticle 8/0.
%e& >ason Clauses %*orH I Antwer? 1ules,
1ule 7&
8) o! /)
'ransportation La(
@ights to contribution in general average shall not
be affected, though the event which gave rise to
the sacrifice or expenditure may have been due to
the fault of one of the parties to the adventure; but
this shall not prejudice any remedies which may be
open against that party for such fault.
'hat are the *orHIAntwer? 1ules an# the
>ason Clause+
!he ;or$%,ntwerp @ules is an international system
of rules 1they are not law or international treaties,
but are just widely in use4 for the liuidation and
payment of average to avoid the problem of
characterization.
!he Jason Clause is a standard provision in
maritime contracts. #t provides for uniform rules on
adjustment, proof and liuidation of avergaes in
maritime accidents to address various systems of
determining the same.
P1556 A37 LI=UI7ATI53 56 A<21A02S
i. .o#es
A1TICL2 8!
!he persons interested in the proof and liuidation
of averages may mutually agree and bind
themselves at any time with regard to the liability,
liuidation, and payment thereof. cdt
#n the absence of agreements, the following rules
shall be observed*
/. !he proof of the average shall ta$e place in
the port where the repairs are made, should any be
necessary, or in the port of unloading.
0. !he liuidation shall ta$e place in the port of
unloading should it be a "panish T port.
9. "hould the average have occurred outside of
the waters under the jurisdiction of the Philippines
or the cargo should have been sold in a foreign
port by reason of an arrival under stress, the
liuidations shall be made in the port of arrival.
7. #f the average should have occurred near the
port of destination, so that said port can be made,
the proceedings treated of in @ules / and 0 shall be
held there.
A1TICL2 87
#n case of ma$ing the liuidation of the averages
privately by virtue of agreement, as well as when a
judicial authority ta$es part therein at the reuest
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.
"hould they not be present or not have a
legitimate representative, the liuidation shall be
made by the consul in a foreign port, and where
there is none, by the judge or court of competent
jurisdiction, according to the laws of the country,
and for the account of the proper person.
-hen the representative is a person well $nown in
the place where the liuidation ta$es place, his
intervention shall be admitted and produce legal
effects, even though he be authorized only by a
letter of the shipowner, freighter, or underwriter.
A1TICL2 88
Claims for averages shall not be admitted if they
do not exceed I per cent of the interest which the
claimant may have in the vessel or cargo if it is
gross average, and / per cent of the goods
damaged if particular average, deducting in both
cases the expenses of appraisal, unless there is an
agreement to the contrary.
ii. A??raisal oE -eneral avera-e
A1TICL2 8AB
#f by reason of one or more accidents of the sea
particular and gross averages of the vessel or the
cargo, or of both, should ta$e place on the same
voyage, the expenses and damages corresponding
to each one shall be determined separately in the
port where the repairs are made or where the
cargo is discharged, or sold, or the merchandise is
benefited.
.or this purpose the captains shall be obliged to
demand of the expert appraisers and of the
contractors ma$ing the repairs, as well as of those
appraising and ta$ing part in the unloading, repair,
sale, or the benefiting of the merchandise, that
they separate and detail exactly in their
appraisements or estimates and accounts all the
expenses and damages belonging to each average,
and in those of each average those corresponding
to the vessel and to the cargo, stating also
separately whether there are or not any damages
proceeding from the nature of the goods, and not
by reason of a sea accident; and in case there
should be expenses common to the different
averages and to the vessel and her cargo, there
must be calculated the amount corresponding to
each and stated distinctly.
S2CTI53 II
LiFui#ation oE 0ross Avera-es
A1TICL2 8A1
,t the instance of the captain, the adjustment,
liuidation, and distribution of gross averages shall
be held privately, with the consent of all the parties
in interest.
.or this purpose, within forty%eight hours following
the arrival of the vessel at the port, the captain
shall call all the persons interested, in order that
they may decide as to whether the adjustment or
liuidation of the gross average is to be made by
experts and liuidators appointed by themselves,
in which case this shall be done should the persons
interested agree.
"hould an agreement not be possible, the captain
shall apply to the judge or court of competent
jurisdiction, who shall be the one of the port where
these proceedings are to be held in accordance
with the provisions of this Code, or to the consul of
"pain, T should there be one, and otherwise to the
local authority when they are to be held in a
foreign port. cdta
A1TICL2 8A4
#f the captain should not comply with the
provisions contained in the foregoing article, the
shipowner or agent or the freighters shall demand
the liuidation, without prejudice to the action they
may bring to demand indemnity from him.
8+ o! /)
'ransportation La(
A1TICL2 8A$
,fter the experts have been appointed by the
persons interested, or by the judge or court, before
the acceptance, an examination of the vessel and
of the repairs reuired shall be made, as well as an
estimate of their cost, separating these losses and
damages from those arising from the natural vice
of the thing.
!he experts shall also declare whether the repairs
can be made immediately, or whether it is
necessary to unload the vessel to examine and
repair her.
-ith regard to the merchandise, if the average
should be visible at a mere glance, the examination
thereof must be made before it is delivered. "hould
it not be visible at the time of unloading, said
examination may be held after the delivery
provided it is done within forty%eight hours from
the unloading and without prejudice to the other
proofs which the experts may deem necessary.
A1TICL2 8A
!he appraisement of the goods which are to
contribute to the gross average, and that of those
which constitute the average, shall conform to the
following rules*
/. !he merchandise saved which is to contribute
to the payment of the gross average shall be
valued at the current price thereof at the port of
unloading, deducting the freights, customs duties,
and charges for unloading, as may appear from a
material inspection of the same, not ta$ing into
consideration the bills of lading, unless there is an
0. #f the liuidation is to ta$e place in the port of
sailing, the value of the merchandise loaded shall
be fixed by the purchase price, including the
expenses until they are put on board, excluding the
insurance premium.
9. #f the merchandise should be damaged, it
shall be appraised at its true value.
7. #f the voyage should be interrupted, the
merchandise having been sold in a foreign port and
the average can not be estimated, there shall be
ta$en as the contributing capital the value of the
merchandise in the port of arrival, or the net
proceeds obtained at the sale thereof.
I. Lerchandise lost, which should constitute the
gross average, shall be appraised at the value
merchandise of its $ind may have in the port of
unloading, provided its $ind and uality appears in
the bill of lading; and should this not be the case,
the invoices of the purchase issued in the port of
shipment shall be ta$en as a basis, adding to its
value the expenses and freights subseuently
arising. cd
8. !he masts cut down, the sails, cables, and
other euipment of the vessel rendered useless for
the purpose of saving her, shall be appraised at the
current value, deducting one%third by reason of the
difference between new and old.
!his deduction shall not be made in regard to
anchors and chains.
=. !he vessel shall be appraised at her real value
in her condition at the time.
C. !he freights shall represent IM per cent by
way of contributing capital.
A1TICL2 8AA
!he merchandise loaded on the upper dec$ of the
vessel shall contribute to the gross average should
it be saved; but there shall be no right to
indemnity if it should be lost by reason of being
jettisoned for general safety, except when the
marine ordinances allow its shipment in this
manner in coastwise navigation.
!he same shall ta$e place with that which is on
board and is not included in the bills of lading or
inventories, according to the cases.
#n any case the shipowner and the captain shall be
liable to freighters for the loss of the jettison, if the
storage on the upper dec$ too$ place without the
consent of the latter.
A1TICL2 8A7
,fter the appraisement of the goods saved has
been concluded by the experts, as well as that of
the goods lost which constitute the gross average,
and after the repairs have been made to the
vessel, should any have to be made, and in such
case after the approval of the accounts of the same
by the persons interested or by the judge or court,
the entire record shall be turned over to the
liuidator appointed, in order that he may proceed
with the distribution of the average.
iii. LiFui#ation oE -eneral avera-es
A1TICL2 8A8
#n order to effect the liuidation the liuidator shall
examine the sworn statement of the captain,
comparing it, if necessary, with the log boo$ and
all the contracts which may have been made
between the persons interested in the average, the
appraisements, expert examinations, and accounts
of repairs made. #f, as a result of this examination,
he should find any defect in this procedure which
might injure the rights of the persons interested or
affect the liability of the captain, he shall call
attention thereto in order that it be corrected, if
possible, and otherwise he shall include it in the
preliminaries of the liuidation.
#mmediately thereafter he shall proceed with the
distribution of the amount of the average, for
which purpose he shall fix*
/. !he contributing capital, which he shall
determine by the value of the cargo, in accordance
with the rules established in ,rticle CI7.
0. !hat of the vessel in her actual condition,
according to a statement of experts.
9. !he IM per cent of the amount of the freight,
deducting the remaining IM per cent for wages and
maintenance of the crew.
,fter 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.
A1TICL2 8!A
!he 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 liuidation and a
hearing of the persons interested who may be
present, or of their representatives.
87 o! /)
'ransportation La(
A1TICL2 8!!
,fter the liuidation has been approved it shall be
the duty of the captain to collect the amount of the
distribution, and he shall be liable to the owners of
the goods averaged for the losses they suffer
through his delay or negligence.
A1TICL2 8!7
#f the contributors should not pay the amount of
the assessment within the third day after having
been reuested to do so, the goods saved shall be
attached, at the reuest of the captain, and shall
be sold to cover the payment.
A1TICL2 8!8
#f the persons 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. aisadc
S2CTI53 III
LiFui#ation oE 5r#inar/ Avera-es
A1TICL2 8!9
!he experts which the judge or court or the
persons interested may appoint, according to the
cases, shall proceed with the appraisement and
examination of the averages in the manner
prescribed in ,rticle CI9 and in ,rticle CI7, @ules 0
to =, in so far as they are applicable.
iv. LiFui#ation oE ?articular avera-e
A1TICL2 8!9
!he experts which the judge or court or the
persons interested may appoint, according to the
cases, shall proceed with the appraisement and
examination of the averages in the manner
prescribed in ,rticle CI9 and in ,rticle CI7, @ules 0
to =, in so far as they are applicable.
4. A11I<ALS U3721 ST12SS
CAUS2S
A1TICL2 819
#f the captain during the navigation should believe
that the vessel can not continue the voyage to the
port of destination on account of the lac$ of
provisions, well founded fear of seizure, privateers
or pirates, or by reason of any accident of the sea
disabling her to navigate, he shall assemble the
officers and shall call 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
reasons should be considered well founded, it shall
be decided to ma$e the nearest and most
convenient port drafting and entering in the log
boo$ the proper minutes, which shall be signed by
all.
!he captain shall have the deciding vote and the
persons interested in the cargo may ma$e the
objections and protests they may deem proper,
which shall be entered in the minutes in order that
they may ma$e use thereof in the manner they
may consider advisable.
A1TICL2 84B
!he arrival under stress shall not be considered
legal in the following cases*
/. #f the lac$ of provisions should arise from the
failure to ta$e the necessary provisions for the
voyage, according to usage and custom, or if they
should have been rendered useless or lost through
bad stowage or negligence in their care.
0. #f the ris$ of enemies, privateers, or pirates
should not have been well $nown, manifest, and
based on positive and justifiable facts.
9. #f the injury to the vessel should have been
caused by reason of her not being repaired, rigged,
euipped, and arranged in a convenient manner for
the voyage, or by reason of some erroneous order
of the captain.
7. -henever malice, negligence, want of
foresight, or lac$ of s$ill on the part of the captain
is the reason for the act causing the damage.
651.ALITI2S
A1TICL2 819
#f the captain during the navigation should believe
that the vessel can not continue the voyage to the
port of destination on account of the lac$ of
provisions, well founded fear of seizure, privateers
or pirates, or by reason of any accident of the sea
disabling her to navigate, he shall assemble the
officers and shall call 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
reasons should be considered well founded, it shall
be decided to ma$e the nearest and most
convenient port drafting and entering in the log
boo$ the proper minutes, which shall be signed by
all.
!he captain shall have the deciding vote and the
persons interested in the cargo may ma$e the
objections and protests they may deem proper,
which shall be entered in the minutes in order that
they may ma$e use thereof in the manner they
may consider advisable.
A1TICL2 844
#f in order to ma$e repairs to the vessel or because
there should be danger of the cargo suffering
damage it should be necessary to unload, the
captain must reuest authorization of the judge or
court of competent jurisdiction to lighten the
vessel, and do so with the $nowledge of the person
interested or representative of the cargo, should
there be one.
#n a foreign port, it shall be the duty of the "panish
T consul, where there is one, to give the
authorization.
#n the first case, the expenses shall be defrayed by
the ship agent or owner, and in the second, they
shall be for the account of the owners of the
merchandise, for whose benefit the act too$ place.
#f the unloading should ta$e place for both reasons,
the expenses shall be defrayed in proportion to the
value of the vessel and that of the cargo.
2XP23S2S
A1TICL2 841
88 o! /)
'ransportation La(
!he expenses caused by the arrival under stress
shall always be for the account of the shipowner or
agent, but the latter shall not be liable for the
damage which may be caused the shippers by
reason of the arrival under stress, provided the
latter is legitimate.
?therwise, the shipowner or agent and the captain
shall be jointly liable.
A1TICL2 844
#f in order to ma$e repairs to the vessel or because
there should be danger of the cargo suffering
damage it should be necessary to unload, the
captain must reuest authorization of the judge or
court of competent jurisdiction to lighten the
vessel, and do so with the $nowledge of the person
interested or representative of the cargo, should
there be one.
#n a foreign port, it shall be the duty of the "panish
T consul, where there is one, to give the
authorization.
#n the first case, the expenses shall be defrayed by
the ship agent or owner, and in the second, they
shall be for the account of the owners of the
merchandise, for whose benefit the act too$ place.
#f the unloading should ta$e place for both reasons,
the expenses shall be defrayed in proportion to the
value of the vessel and that of the cargo.
12SP53SI)ILIT* 56 T(2 CAPTAI3
A1TICL2 84$
!he care and preservation of the cargo which has
been unloaded shall be in charge of the captain,
who shall be responsible for the same, except in
cases of force majeure.
A1TICL2 84
#f the entire cargo or part thereof should appear to
be damaged, or there should be imminent danger
of its being damaged, the captain may reuest of
the judge or court of competent jurisdiction or the
consul, in a proper case, the sale of all or of part of
the former, and the person ta$ing cognizance of
the matter shall authorize it after an examination
and declaration of experts, advertisements, and
other formalities reuired by the case and an entry
in the boo$, in accordance with the provisions of
,rticle 807.
!he captain shall, in a proper case, justify the
legality of the procedure, under the penalty of
answering to the shipper for the price the
merchandise would have brought if it should have
arrived at the port of its destination in good
condition.
A1TICL2 84A
!he captain shall answer for the damages caused
by his delay, if the reason for the arrival under
stress having ceased, he should not continue the
voyage.
#f the reason for said arrival should have been the
fear of enemies, privateers, or pirates, before
sailing, a discussion and resolution of a meeting of
the officers of the vessel and persons interested in
the cargo who may be present shall ta$e place, in
accordance with the provisions contained in ,rticle
C/B.
$. C5LLISI53S
CLASS2S A37 2662CTS
i. 6ortuitous
A1TICL2 8$B
#f a vessel should collide with another by reason of
an accident or through force majeure, each vessel
and her cargo shall be liable for their own damage.
A1TICL2 8$1
#f a vessel should be forced to collide with another
one by a third vessel, the owner of the third vessel
shall indemnify for the losses and damages caused,
the captain thereof being civilly liable to said
owner.
A1TICL2 8$4
#f, by reason of a storm or other cause of force
majeure, a vessel which is properly anchored and
moored should collide with those in her immediate
vicinity, causing them damage, the injury
occasioned shall be loo$ed upon as particular
average to the vessel run into.
ii. Cul?able
A1TICL2 84!
#f a vessel should collide with another through the
fault, negligence, or lac$ of s$ill 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. aisadc
A1TICL2 847
#f both vessels may be blamed for the collision,
each one shall be liable for his own damages, and
both shall be jointly responsible for the losses and
damages suffered by their cargoes.
A1TICL2 8$1
#f a vessel should be forced to collide with another
one by a third vessel, the owner of the third vessel
shall indemnify for the losses and damages caused,
the captain thereof being civilly liable to said
owner.
iii. Inscrutable 6ault
A1TICL2 848
!he provisions of the foregoing article are
applicable to the case in which it can not be
decided which of the two vessels was the cause of
the collision.
P12SU.PTI53 56 L5SS )* C5LLISI53
A1TICL2 8$$
, vessel shall be presumed as lost thru a collision
which, upon being run into, sin$s immediately, and
also any vessel which is obliged to ma$e a port to
repair the damages caused by the collision should
be lost during the voyage, or should be obliged to
be stranded in order to be saved.
8> o! /)
'ransportation La(
LIA)ILITI2S
i. Shi?owner or a-ent
A1TICL2 8$7
!he civil liability contracted by the shipowners in
the cases prescribed in this section, shall be
understood as limited to the value of the vessel
with all her appurtenances and all the freight
earned during the voyage.
A1TICL2 8$8
-hen the value of the vessel and her
appurtenances should not be sufficient to cover all
the liabilities, the indemnity due by reason of the
death or injury of persons shall have preference.
ii. Ca?tain, ?ilot, others
A1TICL2 849
#n the cases above mentioned the civil action of the
owner against the person liable for the damage is
reserved, as well as the criminal liabilities which
may be proper.
A1TICL2 8$
#f the vessels colliding 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.
iii. Con#itions, ?rotest
A1TICL2 8$A
!he action for the recovery of losses and damages
arising from collisions can not be admitted if a
protest or declaration is not presented within
twenty%four hours to the competent authority of
the point where the collision too$ place, or that of
the first port of arrival of the vessel, if in "pain, T
and to the consul of "pain T if it should have
occurred in a foreign country.
A1TICL2 8$!
#n so far as the damages caused to persons or to
the cargo are concerned, the absence of a protest
can not prejudice the persons interested who were
not on board or were not in a condition to ma$e
$nown their wishes.
A1TICL2 8$9
#f the collision should occur between "panish T
vessels in foreign waters, or if it should ta$e place
in open waters, and the vessels should ma$e a
foreign port, the "panish T consul in said port shall
hold a summary investigation of the accident,
forwarding the proceedings to the captain%general
of the nearest department T for continuation and
conclusion.
. S(IP'12C,S
A1TICL2 8B
!he losses and deteriorations suffered by a vessel
and her cargo by reason of shipwrec$ or stranding
shall be individually for the account of the owners,
the part of the wrec$ which may be saved
belonging to them in the same proportion.
A1TICL2 81
#f the wrec$ or stranding should arise through the
malice, negligence, or lac$ of s$ill of the captain, or
because the vessel put to sea insufficiently
repaired and prepared, the owner or the freighters
may demand indemnity of the captain for the
damages caused to the vessel or cargo by the
accident, in accordance with the provisions
contained in ,rticles 8/M, 8/0, 8/7, and 80/.
A1TICL2 84
!he goods saved from the wrec$ shall be specially
liable 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 to any
other obligation, if the merchandise should be sold.
A1TICL2 8$
#f several vessels navigate under convoy, and any
of them should be wrec$ed, the cargo saved shall
be distributed among the rest in the proportion to
the amount each one can receive.
#f any captain should refuse, without sufficient
cause, to receive what may correspond to him, the
captain of the wrec$ed vessel shall enter a protest
against him before two sea officials of the losses
and damages resulting therefrom, ratifying the
complaint 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 ,rticle 8/0.
"hould it not be possible to transfer to the other
vessels the entire cargo of the one wrec$ed, the
goods of the highest value and smallest volume
shall be saved first, the designation thereof being
made by the captain, in concurrence with the
officers of his vessel.
6. S?ecial Contracts oE .ariti"e
Co""erce
1. C(A1T21 PA1TI2S
726I3ITI53
, charter party is a contract by virture of which the
owenr or agent of a vessel binds himself to
transport merchandise or persons for a fixed price.
#t is a contract by which the owner or agent of the
vessel leases for a certain price the whole or
portion of a vessel for the transportation of the
goods or persons from one port to another. !owage
is not a charter party. #t is a contract for the hire of
services by which a vessel is engaged to tow
another vessel from one port to another for
consideration.
,I37S
,s to extent of vessel hired*
!otal
Partial % charterer as a rule does not
acuire the right to fix the date
8- o! /)
'ransportation La(
when the vessel should depart, unless such
right is expressly granted in the
contract
,s to time*
Pntil a fixed day or for a determined
number of days or months
.or a voyage
,s to freightage*
.or a fixed amount for the whole
cargo
.or a fixed rate per ton
.or so much per month
Coastwise Li-htera-e Cor? vs. CA an# Phil.
0en. Insurance Co. %199A&
!he distinction between the two $inds of charter
parties 1i.e. bareboat or demise and contract of
affreightment4 is more clearly set out in the case of
Puromines, :nc. vs. Court of Appeals*
Pnder the demise or bareboat charter of the
vessel, the charterer will generally be regarded as
the owner for the voyage or service stipulated. !he
charterer mans the vessel with his own people and
becomes the owner pro hac vice, subject to liability
to others for damages caused by negligence. !o
create a demise, the owner of a vessel must
completely and exclusively relinuish possession,
command and navigation thereof to the charterer,
anything short of such a complete transfer is a
contract of affreightment 1time or voyage charter
party4 or not a charter party at all.
, contract of affreightment is one in which the
owner of the vessel leases part or all of its space to
haul goods for others. #t 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
ship, the charterer or freighter merely having use
of the space in the vessel in return for his payment
of the charter hire.
,lthough 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 between the two.
!hus, Coastwise, by the contract of affreightment,
was not converted into a private carrier, but
remained a common carrier and was still liable as
such.
651.S A37 2662CTS
Charter Parties
/. .orms and Hffects of Charter Parties
A1TICL2 !A4
, charter party must be drawn in duplicate and
signed by the contracting parties, and when either
does not $now how or can not do so, by two
witnesses at their reuest.
!he charter party shall include, besides the
conditions unrestrictedly stipulated, the following
statements*
/. !he $ind, name, and tonnage of the vessel.
0. Aer flag and port of registry.
captain.
agent, if the latter should ma$e the charter party.
I. !he 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 ma$es the contract.
8. !he port of loading and unloading.
=. !he capacity, number of tons or weight, or
measure which they respectively bind themselves
to load and transport, or whether it is the total
cargo.
C. !he freightage to be paid, stating whether it is
to be a fixed amount for the voyage or so much
per month, or for the space to be occupied, or for
the weight or measure of the goods of which the
cargo consists, or in any other manner whatsoever
agreed upon.
B. !he amount of primage to be paid to the
captain.
/M. !he days agreed upon for loading and
unloading.
//. !he lay days and extra lay days to be allowed
and the rate of demurrage.
A1TICL2 !A$
#f the freight 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, which shall be
the only instrument with regard to the freight to
determine the rights and obligations of the owner,
of the captain, and of the charterer. cdt
A1TICL2 !A
!he charter parties executed with the intervention
of a bro$er, who certifies to the authenticity of the
signatures of the contracting parties made in his
presence, shall be full evidence in court; and if said
signatures should not agree the ones identical with
the signatures the bro$er must $eep in his registry,
if $ept in accordance to law, shall be final.
!he contracts shall also be admitted as evidence,
even though a bro$er has not ta$en part therein, if
the contracting parties ac$nowledge the signatures
to be the same as their own.
"hould no bro$er have ta$en part in the charter
party and should the signatures not have been
ac$nowledged, doubts shall be decided by what is
provided for in the bill of lading, and in the absence
thereof by the proofs submitted by the parties.
A1TICL2 !AA
Charter parties executed by the captain in the
absence of the agent shall be valid and efficient,
even though in executing them he should have
acted in violation of the orders and instructions of
the agent or shipowner; but the latter shall have a
right of action against the captain to recover
damages.
A1TICL2 !A!
#f in the charter party the time in which the loading
and unloading is to ta$e place is not stated, the
customs of the port where these acts ta$e place
shall be observed. ,fter the period stipulated or the
customary one has passed, and should there not
be in the freight contract an express clause fixing
the indemnification for the delay, the captain shall
8/ o! /)
'ransportation La(
be entitled to demand demurrage for the usual and
extra lay days which may have elapsed in loading
and unloading.
A1TICL2 !A7
#f during the voyage the vessel should be rendered
unseaworthy the captain shall be obliged to charter
another one at his expense, in good condition, to
ta$e the cargo to its destination, for which purpose
he shall be obliged to loo$ for a vessel not only at
the port of arrival but in the other ports within a
distance of /IM $ilometers.
#f the captain should not furnish a vessel to ta$e
the cargo to its destination, either through
indolence or malice, the freighters, after a demand
of the captain to charter a vessel within an
unextendible period, may charter one and apply to
the judicial authority reuesting that the charter
party which may have been made be immediately
approved.
!he same authority shall judicially compel the
captain to confirm the charter made by the
shippers for his account and under his
responsibility.
#f the captain, notwithstanding his efforts, should
not find a vessel to charter, he shall deposit the
cargo at the disposal of the freighters, to whom he
shall communicate the facts on the first
opportunity presenting itself, the charter being
regulated in such cases by the distance covered by
the vessel, there being no right to any
indemnification whatsoever.
Is there a vali# contract iE there was no
charter ?art/ an# bill oE la#in-+
#f we ta$e ,rt. 8I9 literally, no. Aowever, if we
ta$e into account the fact that delivery of the cargo
does not constitute the ma$ing of a contract but
rather the partial performance thereof, the mere
fact of delivery and receipt of such cargo, the good
faith and mutual consent with which they have
been made, should be a better substitute for the
chater party than the bill of lading which is nothing
more than proof of such delivery.
'hat is ?ri"a-e+
#t was 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 the lading and unlading in any port of haven.
!oday, it is no longer a gratuity but is included in
the freight rate.
'hat is #e"urra-e+
#t is the sum 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 of for sailing. #t is an
extended freight or reward to the vessel in
compensation for the earnings she is improperly
caused to lose.
'hat are la/ #a/s+
6ay days are days allowed to charter parties for
loading and unloading the cargo.
1I0(TS A37 5)LI0ATI53S 56 S(IP5'321S
4. 1i-hts an# 5bli-ations oE 5wners
A1TICL2 !!9
!he owners or the captain shall observe in charter
parties the capacity of the vessel or that expressly
designated in the registry of the same, a difference
greater than 0 per cent between that stated and
her true capacity not being permissible.
#f the owners or the captain should contract to
carry a greater amount of cargo than the vessel
can hold, in view of her tonnage, they shall
indemnify the freighters whose contracts they do
not fulfill for the losses they may have caused
them by reason of their default, according to the
cases, viz*
#f the vessel has been chartered by one freighter
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 charter should be reduced in proportion
to the cargo 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.
#f, on the contrary, there should be several charter
parties, and by reason of the want of space all the
cargo contracted for can not be received, 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 ta$e the place
corresponding to them in the order of the dates of
their contracts.
"hould there be no priority, the charterers may
load, if they wish, pro rata of the amounts of
weight or space they may have engaged, and the
person from whom the vessel was chartered shall
be obliged to indemnify them for the loss and
damage.
A1TICL2 !7B
#f the person from whom the vessel is chartered,
after receiving a part of the freight, should not find
sufficient to ma$e up at least three%fifths of the
amount which the vessel can hold, at the price he
may have fixed, he may substitute for the
transportation another vessel inspected and
declared suitable for the same voyage, the
expenses of transfer being defrayed by him, as well
as the increase, should there be any, in the price of
the charter. "hould he not be able to ma$e this
change, the voyage shall be underta$en at the
time agreed upon; and should no time have been
fixed, within fifteen days from the time of
beginning to load, should nothing to the contrary
have been stipulated.
#f the owner of the part of the freight already
loaded should procure some more at the same
price and under similar or proportionate conditions
to those accepted for the freight received, the
person from whom the vessel is chartered or the
captain can not refuse to accept the rest of the
cargo; and should he do so, the freighter shall
have a right to demand that the vessel put to sea
with the cargo she may have on board.
A1TICL2 !71
8= o! /)
'ransportation La(
,fter three%fifths of the vessel is loaded, the person
from whom she is chartered can not, without the
consent of the charterers or freighters substitute
the vessel designated in the charter party by
another one, under the penalty of ma$ing himself
thereby liable for all the losses and damages
occurring during the voyage to the cargo of the
person who did not consent to the change.
A1TICL2 !74
#f the vessel has been chartered in whole, the
captain can not, without the consent of the person
chartering her, accept freight from any other
person; and should he do so, said charterer may
oblige him to unload it and reuire him to
indemnify him for the losses suffered thereby.
A1TICL2 !7$
!he person from whom the vessel is chartered shall
be liable for all the losses caused the charterer by
reason of the voluntary delay of the captain in
putting to sea, according to the rules prescribed,
provided he has been reuested to put to sea at
the proper time through a notary or judicially.
A1TICL2 !7
#f the charterer should carry to the vessel more
freight 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 freighters, but if in order to stow
said freight it should be necessary to stow it in
such manner as to throw the vessel out of trim the
captain must refuse it or unload it at the expense
of its owner.
!he captain may li$ewise, before leaving the port,
unload the merchandise placed on board
clandestinely, or transport it, if he can do so and
$eep the vessel in trim, demanding by way of
freightage the highest price which may have been
stipulated for said voyage.
A1TICL2 !7A
#f the vessel has been chartered to receive the
cargo in another port, the captain shall appear
before the consignee designated in the charter
party, and, should the latter not deliver the cargo
to him, he shall inform the charterer and await his
instructions, and in the meantime the lay days
agreed upon shall begin to run, or those allowed by
custom in the port, unless there is a special
"hould the captain not receive an answer within
the time necessary therefor, he shall ma$e efforts
to find freight; and should he not find any after the
lay days and extra lay days have elapsed, he shall
ma$e a protest and return to the port where the
charter was made.
!he charterer shall pay the freightage in full,
discounting that which may have been earned on
the merchandise which may have been carried on
the voyage out or on the return trip, if carried for
the account of third persons.
!he same shall be done if a vessel, having been
chartered for the round trip, should not be given
any cargo for her return.
A1TICL2 !7!
!he captain shall lose the freightage and shall
indemnify the charterers if the latter should prove,
even against the certificate of inspection, should
one have ta$en place at the port of departure, that
the vessel was not in a condition to navigate at the
time of receiving the cargo.
A1TICL2 !77
!he charter party shall be enforced if the captain
should not have any instructions from the
charterer, and a declaration of war or a bloc$ade
should ta$e place during the voyage.
#n such case the captain shall be obliged to ma$e
the nearest safe and neutral port, and reuest and
await orders from the freighter; and the expenses
incurred and salaries earned during the detention
shall be paid as general average.
#f, by orders of the freighter, the cargo should be
discharged at the port of arrival, the freight for the
voyage out shall be paid in full.
A1TICL2 !78
#f the time necessary, in the opinion of the judge
or court, in which to receive orders from the
freighters should have elapsed without the captain
having received any instructions, the cargo shall be
deposited, and it shall be liable for the payment of
the freight and expenses incurred by reason of the
delay which shall be paid from the proceeds of the
part first sold.
5)LI0ATI53S 56 C(A1T2121S
$. 5bli-ations oE Charterers
A1TICL2 !79
!he charterer of an entire vessel may subcharter
the whole or part thereof for the amounts he may
consider most convenient, without the captain
being allowed to refuse to receive on board the
freight delivered by the second charterers,
provided the conditions of the first charter are not
changed, and that the person from whom the
vessel is chartered be paid the full price agreed
upon even though the full cargo is not embar$ed,
with the limitation established in the next article.
cdtai
A1TICL2 !8B
, charterer who does not ma$e up the full cargo he
bound himself to ship shall pay the freightage of
the amount he fails to ship, if the captain did not
ta$e other freight to ma$e up the cargo of the
vessel, in which case he shall pay the first
charterer the difference should there be any.
A1TICL2 !81
#f the charterer should ship goods different from
those indicated at the time of executing the charter
party, without the $nowledge of the person from
whom the vessel was chartered or of the captain,
and should thereby give rise to losses, by reason of
confiscation, embargo, detention, or other causes,
to the person from whom the vessel was chartered
or to the shippers, the person giving rise thereto
shall be liable with the value of his shipment and
furthermore with his property, for the full
indemnity to all those injured through his fault.
8A o! /)
'ransportation La(
A1TICL2 !84
#f the merchandise shipped should have been for
the purpose of illicit commerce, and was ta$en on
board with the $nowledge of the person from
whom the vessel was chartered or of the captain,
the latter, jointly with the owner of the same, shall
be liable for all the losses which may be caused the
other shippers, and even though it may have been
agreed, they can not demand any indemnity
whatsoever of the charterer for the damage caused
the vessel.
A1TICL2 !8$
#n case of ma$ing a port to repair the hull,
machinery, or euipment of the vessel, the
freighters must wait until the vessel is repaired,
being permitted to unload her at their own expense
should they deem it advisable.
#f, for the benefit of the cargo subject to
deterioration, the freighters or the court, or the
consul, or the competent authority in a foreign land
should order the merchandise to be unloaded, the
expenses of loading and unloading shall be for the
account of the former.
A1TICL2 !8
#f the charterer, without the occurrence of any of
the cases of force majeure mentioned in the
foregoing article, should wish to unload his
merchandise before arriving at the port of
destination, he shall pay the full freight, the
expenses of the stop made at his reuest, and the
losses and damages caused the other freighters,
should there be any.
A1TICL2 !8A
#n charters for transportation of general freight any
of the freighters may unload the merchandise
before the beginning of the voyage, by paying one%
half the freight, the expense of stowing and
restowing the cargo, and any other damage which
may be caused the other shippers.
A1TICL2 !8!
,fter the vessel has been unloaded and the cargo
placed at the disposal of the consignee, the latter
must immediately pay the captain the freight due
and the other expenses to which he may be liable
for said cargo.
!he primage must be paid in the same proportion
and at the same time as the freight, all the
changes and modifications to which the latter
should be subject also governing the former.
A1TICL2 !87
!he charters and freighters can not abandon
merchandise damaged on account of the inherent
vice of the goods or by reason of an accidental
case, for the payment of the freight and other
expenses. aisadc
!he abandonment shall be proper, however, if the
cargo should consist of liuids and should they
have lea$ed out, there not remaining in the
containers more than one%uarter of their contents.
12SCISSI53
. Total or Partial 1escissions oE Charter
Parties
A1TICL2 !88
, charter party may be annulled at the reuest of
the charterer*
/. #f before loading the vessel he should
abandon the charter, paying half of the freightage
agreed upon.
0. #f the capacity of the vessel should not agree
with that stated in the certificate of the tonnage, or
if there is an error in the statement of the flag
under which she sails.
9. #f the vessel should not be placed at the
disposal of the charterer within the period and in
the manner agreed upon.
7. #f, after the vessel has put to sea, she should
return to the port of departure, on account of ris$
of pirates, enemies, or bad weather, and the
freighters should agree to unload her.
#n the second and third cases the person from
whom the vessel was chartered shall indemnify the
charterer for the losses he may suffer.
#n the fourth case the person from whom the
vessel was chartered shall have a right to the
freightage in full for the voyage out.
#f the charter should have been made by the
months, the charterers shall pay the full freightage
for one month, if the voyage were to a port in the
same waters, and two months, if the voyage were
to a port in different waters.
.rom one port to another of the Peninsula and
adjacent islands, the freightage for one month only
shall be paid.
I. #f a vessel should ma$e a port during the
voyage in order to ma$e urgent repairs and the
freighters should prefer to dispose of the
merchandise.
-hen the delay does not exceed thirty days, the
freighters shall pay the full freight for the voyage
out.
"hould the delay exceed thirty days, they shall
only pay the freight in proportion to the distance
covered by the vessel.
A1TICL2 !89
,t the reuest of the person from whom the vessel
is chartered the charter party may be rescinded*
/. #f the charterer at the termination of the extra
lay days does not place the cargo alongside the
vessel.
#n such case the charterer must pay half the
freight stipulated besides the demurrage for the lay
days and extra lay days elapsed.
0. #f the person from whom the vessel was
chartered should sell her before the charterer has
begun to load her and the purchaser should load
her for his own account.
#n such case the vendor shall indemnify the
charterer for the losses he may suffer.
#f the new owner of the vessel should not load her
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 ma$ing the sale.
A1TICL2 !9B
!he charter party shall be rescinded and all action
arising therefrom shall be extinguished if, before
>, o! /)
'ransportation La(
the vessel puts to sea from the port of departure,
any of the following cases should occur*
/. , declaration of war or interdiction of
commerce with the power to whose ports the
vessel was going to sail.
0. , condition of bloc$ade of the port of
destination of said vessel, or the brea$ing out of an
epidemic after the contract was executed.
9. !he prohibition to receive the merchandise of
the vessel at the said port.
7. ,n indefinite detention, by reason of an
embargo of the vessel by order of the government
or for any other reason independent of the will of
the agent.
I. !he impossibility of the vessel to navigate,
without fault of the captain or agent.
!he unloading shall be made for the account of the
charterer.
A1TICL2 !91
#f the vessel can not put to sea on account of the
closing of the port of departure, or any other
temporary cause, the charter shall be in force
without any of the contracting parties having a
right to claim damages.
!he subsistence and wages of the crew shall be
considered as general average.
Guring the interruption the charterer may, at the
proper time and for his own account, unload and
load the merchandise, paying demurrage if the
reloading should continue after the reason for the
detention has ceased.
A1TICL2 !94
, charter party shall be partially rescinded, unless
there is an agreement to the contrary, and the
captain shall only be entitled to the freight for the
voyage out, if, by reason of a declaration of war,
closing of ports, or interdiction of commercial
relations during the voyage, the vessel should
ma$e the port designated for such a case in the
instructions of the charterer.
4. L5A3S 53 )5TT5.1* A37
12SP53723TIA
L5A3 53 )5TT5.1*, 726I327
#t is a contract in the nature of a mortgage, by
which the owner of the ship borrows money for the
use, euipment and repair of the vessel for a
definite term, and pledges the ship as a security for
its repayment, with maritime or extraordinary
interest on account of the maritime ris$s to be
borne by the lender, it being stipultaed that if the
ship be lost in the course of the specific voyage or
during the limited time, by any of the perils
enumerated in the contract, the lender shall also
lose his money.
L5A3 53 12SP53723TIA, 726I327
#t is a contract made on the goods laden on board
the hsip, and which are to be sold or exchanged in
the course of the voyage, the borrowerFs personal
responsibility being deemed the principal security
for the performance of the contract. !he lender
must be paid his principal and interest, though the
ship perishes, provided that the goods are saved.
C(A1ACT21 56 L5A3, A1T. 719
A1TICL2 719
, loan on bottomry or respondentia shall be
considered that which the repayment of the sum
loaned and the premium stipulated, under any
condition whatsoever, depends on the safe arrival
in port of the goods on which it is made, or of their
value in case of accident.
651.S A37 12=UISIT2S
A1TICL2 74B
6oans on bottomry or respondentia may be
executed*
/. <y means of a public instrument.
0. <y means of a bond signed by the contracting
parties and the bro$er who too$ part therein. cdt
9. <y means of a private instrument.
Pnder 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 commercial registry, without which reuisites
the credits originating from the same 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.
!he contracts made during a voyage shall be
governed by the provisions of ,rticles IC9 and 8//,
and shall be effective with regard to third persons
from the date of their execution, if they should be
recorded in the commercial registry of the port of
registry of the vessel before eight days have
elapsed from the date of her arrival. #f said eight
days should elapse without the record having been
made in the commercial registry, the contracts
made during the voyage of a vessel shall not have
any effect with regard to third persons, except
from the day and date of their entry.
#n order that the bonds of the contracts celebrated
in accordance with No. 0 may have legal force,
they must conform to the registry of the bro$er
who too$ part therein. #n those celebrated in
accordance with No. 9 the ac$nowledgment of the
signature must precede.
Contracts which are not reduced to writing shall
not be the basis for a judicial action.
A1TICL2 741
#n a bottomry or respondentia bond there must be
stated*
/. !he $ind, name, and registry of the vessel.
captain.
9. !he names, surnames, and domicile of the
person giving and of the person receiving the loan.
7. !he amount of the loan and the premium
stipulated.
I. !he time for repayment.
8. !he goods pledged to secure repayment.
=. !he voyage for which the ris$ is run.
A1TICL2 744
!he bonds may be issued to order, in which case
they shall be transferable by indorsement, and the
assignee shall acuire all the rights and run all the
ris$s corresponding to the indorser.
>) o! /)
'ransportation La(
53 '(AT C53STITUT27
A1TICL2 74
!he loans may be constituted jointly or separately*
/. ?n the hull of the vessel.
0. ?n the rigging.
9. ?n the euipment, provisions, and fuel.
7. ?n the engine, if the vessel is a steamer.
I. ?n the cargo.
#f the loan is constituted on the hull of the vessel,
there shall be understood as also subject to the
liability of the loan, the rigging, euipment and
other goods, provisions, fuel, steam engines, and
the freight earned during the voyage subject to the
loan. cdta
#f the loan is made on the cargo, all that
constitutes the same shall be subject to the
repayment; and if on a particular object of the
vessel or of the cargo, the object exclusively and
specifically mentioned only shall be liable.
A1TICL2 74A
No loans can be made on the salaries of the crew,
nor on the profits which it is expected to earn.
A.5U3T
A1TICL2 74$
6oans made be made in goods and in merchandise,
fixing their value in order to determine the
principal of the loan.
A1TICL2 74!
#f the lender should prove that he loaned a larger
amount than the value of the article liable for the
bottomry loan, by reason of fraudulent measures
employed by the borrower the loan shall only be
valid for the amount at which said object is
appraised by experts.
!he surplus principal shall be returned with legal
interest for the whole period of the duration of the
disbursement.
A1TICL2 747
#f the full amount of the loan contracted to load the
vessel should not be made use of for the cargo, the
surplus shall be returned before clearing.
!he same procedure shall be observed with regard
to the goods ta$en as a loan if they could not all
have been loaded.
A1TICL2 748
!he loan which the captain ta$es at the point of
residence of the owners of the vessel shall only
affect that part of the latter which belongs to the
captain, if the other owners or their agents should
not have given their express authorization thereto
or should not have ta$en part in the transaction.
#f one or more of the owners should be reuested
to furnish the amount necessary to repair or
provision the vessel, and 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.
?utside of the residence of the owners the captain
may contract loans in accordance with the
provisions of ,rticles IC9 and 8//.
)* '(5.
A1TICL2 !11
#n order to comply with the obligations mentioned
in the foregoing article, the captain, when he has
no funds and does not expect to receive any from
the agent, shall procure the same in the successive
order stated below*
/. <y reuesting said funds of the consignees or
correspondents of a vessel.
0. <y applying to the consignees of the cargo or
to the persons interested therein.
9. <y drawing on the agent.
7. <y borrowing the amount reuired by means
of a bottomry bond.
I. <y selling a sufficient amount of the cargo to
cover the amount absolutely necessary to repair
the vessel, and to euip her to pursue the voyage.
#n the two latter cases he must apply to the judicial
authority of the port, if in "pain T and to the
"panish T consul, if in a foreign country; and
where there should be none, to the local authority,
proceeding in accordance with the prescriptions of
,rticle IC9, and with the provisions of the law of
civil procedure.
A1TICL2 !17
!he captain can not contract loans on
respondentia, and should he do so the contracts
shall be void.
Neither can 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
provided there does not exist any other $ind of lien
or obligation thereon. -hen he is permitted to do
so, he must necessarily state what interest he has
in the vessel.
#n case of violation of this article the principal,
interest, and costs shall be charged to the private
account of the captain, and the agent may
furthermore have the right to discharge him.
A1TICL2 A8$
#f while on voyage the captain should find it
necessary to contract one or more obligations
mentioned in subdivisions C and B of ,rticle ICM,
he shall apply to the judge or court if he is in
Philippine territory, and otherwise to the consul of
the @epublic 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 ,rticle 8/0 and
the instruments proving the obligation contracted.
!he judge or court, the consul, or the local
authority, as the case may be, in view of the result
of the proceedings instituted, shall ma$e a
temporary memorandum of their result in the
certficate, in order that it may be recorded in the
registry when the vessel returns to the port of its
registry, or so that it can be admitted as a legal
and preferred obligation in case of sale before its
>+ o! /)
'ransportation La(
return, by reason of the sale of the vessel on
account of a declaration of unseaworthiness.
2662CTS 56 C53T1ACT
A1TICL2 719
, loan on bottomry or respondentia shall be
considered that which the repayment of the sum
loaned and the premium stipulated, under any
condition whatsoever, depends on the safe arrival
in port of the goods on which it is made, or of their
value in case of accident.
A1TICL2 74!
#f the lender should prove that he loaned a larger
amount than the value of the article liable for the
bottomry loan, by reason of fraudulent measures
employed by the borrower the loan shall only be
valid for the amount at which said object is
appraised by experts.
!he surplus principal shall be returned with legal
interest for the whole period of the duration of the
disbursement.
A1TICL2 747
#f the full amount of the loan contracted to load the
vessel should not be made use of for the cargo, the
surplus shall be returned before clearing.
!he same procedure shall be observed with regard
to the goods ta$en as a loan if they could not all
have been loaded.
A1TICL2 749
"hould the goods on which money is ta$en not be
subjected to any ris$, the contract shall be
considered an ordinary loan, the borrower being
under the obligation to return the principal and
interest at the legal rate, if the interest stipulated
should not have been lower.
A1TICL2 7$B
6oans made during the voyage shall have
preference over those made before the clearing of
the vessel, and they shall be graduated by the
inverse order to that of their dates.
!he loans for the last voyage shall have preference
over prior ones.
"hould several loans have been made at a port
made under stress and for the same purpose, all of
them shall be paid pro rata.
0. )ill oE La#in-
1. C53T23TS
A1TICL2 7B!
!he captain and the freighter of the vessel are
obliged to draft the bill of lading, in which there
shall be stated*
/. !he name, registry, and tonnage of the
vessel.
0. !he name of the captain and his domicile.
9. !he port of loading and that of unloading.
7. !he name of the shipper.
I. !he name of the consignee, if the bill of lading
is issued to order.
8. !he uantity, uality, number of pac$ages,
and mar$s of the merchandise.
=. !he freight and the primage stipulated.
!he bill of lading may be issued to bearer, to order,
or in the name of a specific person, and must be
signed within twenty%four hours after the cargo has
been received on board, the freighter being able to
reuest the unloading thereof at the expense of the
captain should he not sign it, and in every case
indemnity for the losses and damages suffered
thereby.
A1TICL2 7B7
.our true copies of the original bill of lading shall
be made, all of which shall be signed by the
captain and by the freighter. ?f these copies the
freighter shall $eep one and send another to the
consignee; the captain shall ta$e two, one for
himself and another for the agent.
!here may, furthermore, be made as many copies
of the bill of lading as may be considered necessary
by the persons interested; but when they are
issued to order or to the bearer there shall be
stated in all the copies, be they either of the first
four or of the subseuent ones, the destination of
each one, stating whether it is for the agent, for
the captain, for the freighter, or for the consignee.
#f the copy sent to the latter should be duplicated
there must be stated in said duplicate this fact, and
that it is not valid except in case of the loss of the
first one.
A1TICL2 71$
#f before delivering the cargo a new bill of lading
should be demanded of the captain, it being
alleged that the previous ones are not presented
on account of their loss or for any other sufficient
cause, he shall be obliged to issue it, provided
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 ,rticle =M=, when the bills of
lading referred to therein are in uestion, under
the penalty otherwise to be liable for said cargo if
not properly delivered through his fault.
A1TICL2 71
#f before the vessel puts to sea the captain should
die or should discontinue in his position through
any accident, the freighters shall have a right to
demand of the new captain the ratification of the
first bills of lading, and the latter must do so,
provided all the copies previously issued be
presented or returned to him, and it should appear
from an examination of the cargo that they are
correct.
!he expenses arising from the examination of the
cargo shall be defrayed by the 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. "hould 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.
4. P15)ATI<2 <ALU2
A1TICL2 7B9
>7 o! /)
'ransportation La(
, 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 underwriters, proof to the contrary
being reserved by the latter.
A1TICL2 71B
"hould the bills of lading not agree, and there
should not be observed any correction or erasure in
any of them, those possessed by the freighter or
consignee signed by the captain shall be proof
against the captain or agent in favor of the
consignee or freighter; and those possessed by the
captain or agent signed by the freighter shall be
proof against the freighter or consignee in favor of
the captain or agent.
(. Passen-ers on Sea <o/a-e
1. 3ATU12 56 C53T1ACT
A1TICL2 !9A
!he right to passage, if issued to a specified
person, can not be transferred without the consent
of the captain or of the consignee.
4. 5)LI0ATI53S 56 PASS23021S
A1TICL2 !9$
"hould the passage price not have been agreed
upon, the judge or court shall summarily fix it,
after a statement of experts.
A1TICL2 !99
,fter the contract has been rescinded, before or
after the commencement of the voyage, the
captain shall have a right to claim payment for
what he may have furnished the passengers.
A1TICL2 7B
!he captain, in order to collect the price of the
passage and expenses of maintenance, may retain
the goods belonging to the passenger, and in case
of the sale of the same he shall be given
preference over the other creditors, acting in the
same way as in the collection of freight.
A1TICL2 !9
"hould 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.
A1TICL2 7BB
#n all that relates to the preservation of order and
police on board the vessel the passengers shall
conform to the orders given by the captain, without
any distinction whatsoever.
$. 1I0(TS 56 PASS23021S
A1TICL2 !97
#f before beginning the voyage it should be
suspended through the sole fault of the captain or
agent, the passengers shall be entitled to have
their passage refunded and to recover for losses
and damages; but if the suspension was due to an
accidental cause, or to force majeure, or to any
other cause beyond the control of the captain or
agent, the passengers shall only be entitled to the
return of the passage money.
A1TICL2 !98
#n case a voyage already begun should be
interrupted the passengers shall be obliged only to
pay the passage in proportion to the distance
covered, and shall not be entitled to recover for
losses and damages if the interruption is due to an
accidental cause or to force majeure, but have a
right to indemnity if the interruption should have
been caused by the captain exclusively. #f the
interruption should be by reason of the disability of
the vessel, and the passenger should agree to
await her repair, he can not be reuired to pay any
increased price of passage, but his living expenses
during the delay shall be for his own account.
#n case the departure of the vessel is delayed the
passengers have a right to remain on board and to
be furnished with food for the account of the
vessel, unless the delay is due to an accidental
cause or to force majeure. #f the delay should
exceed ten days, the passengers who reuest it
shall be entitled to the return of the passage; and
if it were due exclusively to the captain or agent
they may furthermore demand indemnity for losses
and damages.
, vessel which is exclusively destined to the
transportation of passengers must ta$e them
directly to the port or ports of destination, no
matter what the number of passengers may be,
ma$ing all the stops indicated in her itinerary.
. 12SP53SI)ILITI2S 56 CAPTAI3
A1TICL2 7B1
!he convenience or the interest of the passengers
shall not obligate nor empower the captain to stand
in shore or enter places which may ta$e the vessel
out of her course, nor to remain in the ports he
must or is under the necessity of touching for a
period longer than that reuired for the business of
the navigation.
A1TICL2 7B4
#n the absence of an agreement to the contrary, it
shall be understood that the maintenance of the
passengers during the voyage is included in the
price of the passage; but should said maintenance
be for the account of the latter, the captain shall be
under the obligation, in case of necessity, to
furnish them the victuals at a reasonable price
necessary for their maintenance.
A1TICL2 7B$
, passenger shall be loo$ed upon as a shipper in so
far as the goods he carries on board are
concerned, and the captain shall not be liable for
what said passenger may preserve under his
immediate and special custody unless the damage
arises from an act of the captain or of the crew.
A1TICL2 7BA
#n case of the death of a passenger during the
voyage the captain is authorized, with regard to
>8 o! /)
'ransportation La(
the body, to ta$e the steps reuired by the
circumstances, and shall carefully ta$e care of the
papers and goods there may be on board belonging
to the passenger, observing the provisions of Case
No. /M of ,rticle 8/0 with regard to members of
the crew.
A1TICL2 !14
!he following obligations are inherent in the office
of captain*
/. !o have on board before starting on a voyage
a detailed inventory of the hull, engines, rigging,
tac$le, stores, and other euipments of the vessel;
the navigation certificate; the roll of the persons
who ma$e up the crew of the vessel, and the
contracts entered into with the crew; the list of
passengers; the health certificate; the certificate of
the registry proving the ownership of the vessel,
and all the obligations which encumber the same
up to that date; the charters or authenticated
copies thereof; the invoices or manifest of the
cargo, and the instrument of the expert visit or
inspection, should it have been made at the port of
departure.
0. !o have a copy of this Code on board.
9. !o have three folioed and stamped boo$s,
placing at the beginning of each one a note of the
number of folios it contains, signed by the
maritime official, and in his absence by the
competent authority.
#n the first boo$, which shall be called 'log boo$,'
he shall enter every day the condition of the
atmosphere, the prevailing winds, the course
sailed, the rigging carried, the horsepower of the
engines, the distance covered, the maneuvers
executed, and other incidents of navigation. Ae
shall also enter the damage suffered by the vessel
in her hull, engines, rigging, and tac$le, no matter
what is its cause, as well as the imperfections and
averages of the cargo, and the effects and
conseuence of the jettison, should there be any;
and in cases of grave resolutions which reuire the
advice or a meeting of the officers of the vessel, or
even of the passengers and crew, he shall record
the decision adopted. .or the informations
indicated he shall ma$e use of the binnacle boo$,
and of the steam or engine boo$ $ept by the
engineer.
#n the second boo$, called the 'accounting boo$,'
he shall enter all the amounts collected and paid
for the account of the vessel, entering specifically
article by article, the sources of the collection, and
the amounts invested in provisions, repairs,
acuisition of rigging or goods, fuel, outfits, wages,
and all other expenses. Ae shall furthermore enter
therein a list of all the members of the crew,
stating their domiciles, their wages and salaries,
and the amounts they may have received on
account, either directly or by delivery to their
families.
#n the third boo$, called 'freight boo$,' he shall
record the entry and exit of all the goods, stating
their mar$s and pac$ages, names of the shippers
and of the consignees, ports of loading and
unloading, and the freight earned. #n the same
boo$ he shall record the names and places of
sailing of the passengers and the number of
pac$ages of which their baggage consists, and the
price of the passage.
7. !o ma$e, before receiving the freight, with the
officers of the crew, and the two experts, if
reuired by the shippers and passengers, an
examination of the vessel, in order to ascertain
whether she is watertight, and whether the rigging
and engines are in good condition; and if she has
the euipment reuired for good navigation,
preserving a certificate of the memorandum of this
inspection, signed by all the persons who may have
ta$en part therein, under their liability.
!he experts shall be appointed one by the captain
of the vessel and the other one by the persons who
reuest the examination, and in case of
disagreement a third shall be appointed by the
marine authority of the port.
I. !o remain constantly on board the vessel with
the crew during the time the freight is ta$en on
board and carefully watch the stowage thereof; not
to consent to any merchandise or goods of a
dangerous character to be ta$en on, such as
inflammable or explosive substances, without the
precautions which are recommended for their
pac$ing, management and isolation; not to permit
that any freight be carried on dec$ which by reason
of its disposition, volume, or weight ma$es the
wor$ 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 it ta$es place, he allows
merchandise to be carried on dec$, he must hear
the opinion of the officers of the vessel, and have
the consent of the shippers and of the agent.
8. !o demand a pilot at the expense of the
vessel whenever reuired by navigation, and
principally when a port, canal, or river, or a
roadstead or anchoring place is to be entered with
which neither he, the officers nor the crew are
acuainted.
=. !o be on dec$ at the time of sighting land and
to ta$e command on entering and leaving ports,
canals, roadsteads, and rivers, unless there is a
pilot on board discharging his duties. Ae shall not
spend the night away from the vessel except for
serious causes or by reason of official business.
cdtai
C. !o present himself, when ma$ing a port in
distress, to the maritime authority if in "pain T and
to the "panish T consul if in a foreign country,
before twenty%four hours have elapsed, and ma$e
a statement of the name, registry, and port of
departure of the vessel, of its cargo, and reason of
arrival, which declaration shall be vised by the
authority or by the consul if after examining the
same it is found to be acceptable, giving the
captain the proper certificate in order to show his
arrival under stress and the reasons therefor. #n
the absence of marine officials or of the consul, the
declaration must be made before the local
authority.
B. !o ta$e the steps necessary before the
competent authority in order to enter in the
certificate of the Commercial @egistry of the vessel
the obligations which he may contract in
accordance with ,rticle IC9.
>> o! /)
'ransportation La(
/M. !o put in a safe place and $eep all the papers
and belongings of any members of the crew who
might die on the vessel, drawing up a detailed
inventory, in the presence of passengers as
witnesses, and, in their absence, of members of
the crew.
//. !o conduct himself according to the rules and
precepts contained in the instructions of the agent,
being liable for all that he may do in violation
thereof.
/0. !o give an account to the agent from the port
where the vessel arrives, of the reason thereof,
ta$ing advantage of the semaphore, telegraph,
mail, etc., according to the cases; notify him the
freight he may have received, stating the name
and domicile of the shippers, freight earned, and
amounts borrowed on bottomry bond, advise him
of his departure, and give him any information and
data which may be of interest.
/9. !o observe the rules on the situation of lights
and evolutions to prevent collisions.
/7. !o remain on board in case of danger to the
vessel, until all hope to save her is lost, and before
abandoning her to hear the officers of the crew,
abiding by the decision of the majority; and if he
should have to ta$e a boat he shall ta$e with him,
before anything else, the boo$s and papers, and
then the articles of most value, being obliged to
prove in case of the loss of the boo$s and papers
that he did all he could to save them.
/I. #n case of wrec$ he shall ma$e the proper
protest in due form at the first port reached, before
the competent authority or the "panish T consul,
within twenty%four hours, stating therein all the
incidents of the wrec$, in accordance with case C of
this article.
/8. !o comply with the obligations imposed by the
laws and rules of navigation, customs, health, and
others.
I. Carria-e oE 0oo#s b/ Sea Act
%Co""onwealth Act 3o. !AC Public
Act 3o. !AC Public Act A41, 7th US
Con-ress&
C+ No( 65 +CT TO ,EC%+-E T.+T
!/0%IC +CT N/10E-E, 2I3E ./N,-E, +N,
T4ENT56ONE' 7NO4N +S 8C+--I+9E O2
9OO,S 05 SE+ +CT'8 EN+CTE, 05 T.E
SE3ENT562O/-T. CON9-ESS O2 T.E /NITE,
ST+TES' 0E +CCE!TE,' +S IT IS .E-E05
+CCE!TE, 05 T.E N+TION+% +SSE10%5
-AH@H,", the "eventy%fourth Congress of the
Pnited "tates enacted Public ,ct Numbered .ive
hundred and twenty%one, entitled*
'Carriage of &oods by "ea ,ct';
-AH@H,", the primordial purpose of the said ,cts
is to bring about uniformity in ocean bills of lading
and to give effect to the <russels !reaty, signed by
the Pnited "tates with other powers;
-AH@H,", the &overnment of the Pnited "tates
has left it to the Philippine &overnment to decide
whether or not the said ,ct shall apply to carriage
of goods by sea in foreign trade to and from
Philippine ports;
-AH@H,", the said ,ct of Congress contains
advanced legislation, which is in consonance with
modern maritime rules and the practices of the
great shipping countries of the world;
-AH@H,", shipping companies, shippers, and
marine insurance companies, and various
chambers of commerce, which are directly affected
by such legislation, have expressed their desire
that said Congressional ,ct be made applicable and
extended to the Philippines; therefore,
Ae it enacted by the .ational Assembly of the
Philippines*
Section 1
!hat the provisions of Public ,ct Numbered .ive
hundred and twenty%one of the "eventy%fourth
Congress of the Pnited "tates, approved on ,pril
sixteenth, nineteen hundred and thirty%six, be
accepted, as it is hereby accepted to be made
applicable to all contracts for the carriage of goods
by sea to and from Philippine ports in foreign
trade* Provided, !hat nothing in the ,ct shall be
construed as repealing any existing provision of the
Code of Commerce which is now in force, or as
limiting its application.
Section 4
!his ,ct shall ta$e effect upon its approval.
,pproved* ?ctober 00,/B98.
,n ,ct @elating to the Carriage of &oods by "ea.
Ae it enacted by the Senate and ;ouse of
Representatives of the United States of America in
Con#ress assembled, !hat every bill of landing or
similar document of title which is evidence of a
contract for the carriage of goods by sea to or from
ports of the Pnited "tates, in foreign trade, shall
have effect subject to the provisions of the ,ct.
TITL2 I
Section 1
-hen used in this ,ct S
1a4 !he term 'carrier' includes the owner or the
charterer who enters into a contract of carriage
with a shipper.
1b2 !he term 'contract of carriage' applies only to
contracts of carriage covered by a bill of lading or
any similar document of title, insofar as such
document relates to the carriage of goods by sea,
including any bill of lading or any similar document
as aforesaid issued under or pursuant to a charter
party from the moment at which such bill of lading
or similar document of title regulates the relations
between a carrier and a holder of the same.
1c4 !he term 'goods' includes goods, wares,
merchandise, and articles of every $ind
whatsoever, except live animals and cargo which
by the contract of carriage is stated as being
carried on dec$ and is so carried.
1d4 !he term 'ship' means any vessel used for the
carriage of goods by sea.
1e4 !he term 'carriage of goods' covers the period
from the time when the goods are loaded on to the
time when they are discharged from the ship.
@#"U"
Section 4
"ubject to the provisions of section 8, under every
contract of carriage of goods by sea, the carrier in
>- o! /)
'ransportation La(
relation to the loading handling, stowage, carriage,
custody, care, and discharge of such goods, shall
be subject to the responsibilities and liabilities and
entitled to the rights and immunities hereinafter
set forth.
Section $
/4 !he carrier shall be bound, before and at the
beginning of the voyage, to exercise due diligence
to S
1a4 La$e the ship seaworthy;
1b4 Properly man, euip, and supply the ship;
1c4 La$e the holds, refrigerating and cooling
chambers, and all other parts of the ship in which
goods are carried, fit and safe for their reception
carriage and preservation.
104 !he carrier shall properly and carefully load,
handle, stow, carry, $eep, care for, and discharge
the goods carried.
194 ,fter receiving the goods into his charge the
carrier, or the master or agent of the carrier, shall,
on demand of the shipper, issue to the shipper a
bill of lading showing among other things S
1a4 !he leading mar$s necessary for identification
of the goods as the same are furnished in writing
by the shipper before the loading of such goods
starts, provided such mar$s are stamped or
otherwise shown clearly upon the goods if
uncovered, or on the cases or coverings in which
such goods are contained, in such a manner as
should ordinarily remain legible until the end of the
voyage.
1b4 Hither the number of pac$ages or pieces, or the
uantity or weight, as the case may be, as
furnished in writing by the shipper.
1c4 !he apparent order and condition of the goods*
Provided, !hat no carrier, master, or agent of the
carrier, shall be bound to state or show in the bill
of lading any mar$s, number, uantity, or weight
which he has reasonable ground for suspecting not
accurately to represent the goods actually
received, or which he has had no reasonable
means of chec$ing.
174 "uch a bill of lading shall be prima facie
evidence of the receipt by the carrier of the goods
as therein described in accordance with paragraphs
194 1a4, 1b4, and 1c4 of this section* Provided, !hat
nothing in this ,ct shall be construed as repealing
or limiting the application of any part of the ,ct, as
amended, entitled ',n ,ct relating to bills of lading
in interstate and foreign commerce,' approved
,ugust 0B, /B/8 1P. ". C. title 7B, secs. C/%/074,
commonly $nown as the 'Pomerene <ills of 6ading
,ct.'
1I4 !he shipper shall be deemed to have
guaranteed to the carrier the accuracy at the time
of shipment of the mar$s, number, uantity, and
weight, as furnished by him; and the shipper shall
indemnify the carrier against all loss damages, and
expenses arising or resulting from inaccuracies in
such particulars. !he right of the carrier to such
indemnity shall in no way limit his responsibility
and liability under the contract of carriage or to
any person other than the shipper.
184 Pnless notice of loss or damage and the
general nature of such loss or damage be given in
writing to the carrier or his agent at the port of
discharge before or at the time of the removal of
the goods into the custody of the person entitled to
delivery thereof under the contract of carriage,
such removal shall be prima facie evidence of the
delivery by the carrier of the goods as described in
the bill of lading. #f the loss or damage is not
apparent, the notice must be given within three
days of the delivery.
"aid notice of loss or damage maybe endorsed
upon the receipt for the goods given by the person
ta$ing delivery thereof.
!he notice in writing need not be given if the state
of the goods has at the time of their receipt been
the subject of joint survey or inspection.
#n any event the carrier and the ship shall be
discharged from all liability in respect of loss or
damage unless suit is brought within one year after
delivery of the goods or the date when the goods
should have been delivered* Provided, !hat if a
notice of loss or damage, either apparent or
concealed, is not given as provided for in this
section, that fact shall not affect or prejudice the
right of the shipper to bring suit within one year
after the delivery of the goods or the date when
the goods should have been delivered
#n the case of any actual or apprehended loss or
damage the carrier and the receiver shall give all
reasonable facilities to each other for inspecting
and tallying the goods.
1=4 ,fter the goods are loaded the bill of lading to
be issued by the carrier, master, or agent of the
carrier to the shipper shall, if the shipper so
demands, be a 'shipped' bill of lading Provided,
!hat if the shipper shall have previously ta$en up
any document of title to such goods, he shall
surrender the same as against the issue of the
'shipped' bill of lading, but at the option of the
carrier such document of title may be noted at the
port of shipment by the carrier, master, or agent
with name or name the names of the ship or ships
upon which the goods have been shipped and the
date or dates of shipment, and when so noted the
same shall for the purpose of this section be
deemed to constitute a 'shipped' bill of lading.
1C4 ,ny clause, covenant, or agreement in a
contract of carriage relieving the carrier or the ship
from liability for loss or damage to or in connection
with the goods, arising from negligence, fault, or
failure in the duties and obligations provided in this
section, or lessening such liability otherwise than
as provided in this ,ct, shall be null and void and
of no effect. , benefit of insurance in favor of the
carrier, or similar clause, shall be deemed to be a
clause relieving the carrier from liability.
1I0(TS A37 I..U3ITI2S
Section
1/4 Neither the carrier nor the ship shall be liable
for loss or damage arising or resulting from
unseaworthiness unless caused by want of due
diligence on the part of the carrier to ma$e the
ship seaworthy, and to secure that the ship is
properly manned, euipped, and supplied, and to
ma$e to the holds, refrigerating and cool
goods are carried fit and safe for their reception,
carriage, and preservation in accordance with the
provisions of paragraph 1/4 of section 9. -henever
>/ o! /)
'ransportation La(
loss or damage has resulted from unseaworthiness,
the burden of proving the exercise of due diligence
shall be on the carrier or other persons claiming
exemption under the section.
104 Neither the carrier nor the ship shall be
responsible for loss or damage arising or resulting
from S
1a4 ,ct, neglect, or default of the master, mariner,
pilot, or the servants of the carrier in the
navigation or in the management of the ship;
1b4 .ire, unless caused by the actual fault or privity
of the carrier;
1c4 Perils, dangers, and accidents of the sea or
other navigable waters;
1d4 ,ct of &od;
1e4 ,ct of war,
1f4 ,ct of public enemies;
1g4 ,rrest or restraint of princes, rulers, or people,
or seizure under legal process;
1h4 Ruarantine restrictions;
1i4 ,ct or omission of the shipper or owner of the
goods, his agent or representative;
1j4 "tri$es or loc$outs or stoppage or restraint of
labor from whatever cause, whether partial or
general; Provided, !hat nothing herein contained
shall be construed to relieve a carrier from
responsibility for the carrierKs own acts;
1$4 @iots and civil commotions
1l4 "aving or attempting to save life or property at
sea;
1m4 -astage in bul$ or weight or any other loss or
damage arising from inherent defect, uality, or
vice of the goods;
1n4 #nsufficiency of pac$ing;
1o4 #nsufficiency of inadeuacy of mar$s;
1p4 6atent defects not discoverable by due
diligence; and
14 ,ny other cause arising without the actual fault
and privity of the carrier and without the fault or
neglect of the agents or servants of the carrier, but
the burden of proof shall be on the person claiming
the benefit of this exception to show that neither
the actual fault or privity of the carrier nor the fault
or neglect of the agents or servants of the carrier
contributed to the loss or damage.
194 !he shipper shall not be responsible for loss or
damage sustained by the carrier or the ship arising
from any cause without the act, fault, or neglect of
the shipper, his agents, or servants.
174 ,ny deviation in saving or attempting to save
life or property at sea, or any reasonable deviation
shall not be deemed to be an infringement or
breach of this ,ct or of the contract of carriage,
and the carrier shall not be liable for any loss or
damage resulting therefrom* Provided, however,
!hat if the deviation is for the purpose of loading
cargo or unloading cargo or passengers it shall,
prima facie, be regarded as unreasonable.
1I4 Neither the carrier nor the ship shall in any
event be or become liable for any loss or damage
to or in connection with the transportation of goods
in an amount exceeding V8MM per pac$age lawful
money of the Pnited "tates, or in case of goods not
shipped in pac$ages, per customary freight unit, or
the euivalent of that sum in other currency,
unless the nature and value of such goods have
been declared by the shipper before shipment and
inserted in the bill of lading. !his declaration, if
embodied in the bill of lading, shall be prima facie
evidence, but shall not be conclusive on the carrier.
<y agreement between the carrier, master, or
agent of the carrier, and the shipper another
maximum amount than that mentioned in this
paragraph may be fixed* Provided, !hat such
maximum shall not be less than the figure above
named. #n no event shall the carrier be liable for
more than the amount of damage actually
sustained.
Neither the carrier nor the ship shall be responsible
in any event for loss or damage to or in connection
with the transportation of the goods if the nature
or value thereof has been $nowingly and
fraudulently misstated by the shipper in the bill of
lading.
184 &oods of an inflammable, explosive, or
dangerous nature to the shipment whereof the
carrier, master or agent of the carrier, has not
consented with $nowledge of their nature and
character, may at any time before discharge be
landed at any place or destroyed or rendered
innocuous by the carrier without compensation,
and the shipper of such goods shall be liable for all
damages and expenses directly or indirectly arising
out of or resulting from such shipment. #f any such
goods shipped with such $nowledge and consent
shall become a danger to the ship or cargo, they
may in li$e manner be landed at any place, or
destroyed or rendered innocuous by the carrier
without liability on the part of the carrier except to
general average, if any.
SU1123721 56 1I0(TS A37 I..U3ITI2S
A37 I3C12AS2 56 12SP53SI)ILITI2S A37
LIA)ILITI2S
Section A
, carrier shall be at liberty to surrender in whole or
in part all or any of his rights and immunities or to
increase any of his responsibilities and liabilities
under this ,ct, provided such surrender or increase
shall be embodied in the bill of lading issued to the
shipper.
!he provisions of this ,ct shall not be applicable to
charter parties; but if bills of lading are issued in
the case of a ship under charter party, they shall
comply with the terms of this ,ct. Nothing in this
,ct shall be held to prevent the insertion in a bill of
lading of any lawful provision regarding general
average.
SP2CIAL C537ITI53S
Section !
Notwithstanding the provisions of the preceding
sections, a carrier, master or agent of the carrier,
and a shipper shall, in regard to any particular
goods be at liberty to enter into any agreement in
any terms as to the responsibility and liability of
the carrier for such goods, and as to the rights and
immunities of the carrier in respect of such goods,
or his obligation as to seaworthiness 1so far as the
stipulation regarding seaworthiness is not contrary
to public policy4, or the care or diligence of his
servants or agents in regard to the loading,
handling stowage, carriage, custody, care, and
discharge of the goods carried by sea* Provided,
!hat in this case no bill of lading has been or shall
be issued and that the terms agreed shall be
>= o! /)
'ransportation La(
embodied in a receipt which shall be a non%
negotiable document and shall be mar$ed as such.
,ny agreement so entered into shall have full legal
effect* Provided, !hat this section shall not apply to
ordinary commercial shipments made in the
ordinary course of trade but only to other
shipments where the character or condition of the
property to be carried or the circumstances, terms,
and conditions under which the carriage is to be
performed are such as reasonably to justify a
special agreement.
Section 7
Nothing contained in this ,ct shall prevent a carrier
or a shipper from entering into any agreement,
stipulation, condition, reservation, or exemption as
to the responsibility and liability of the carrier or
the ship for the loss or damage to or in connection
with the custody and care and handling of goods
prior to the loading on and subseuent to the
discharge from the ship on which the goods are
carried by sea.
Section 8
!he provisions of this ,ct shall not affect the rights
and obligations of the carrier under the provisions
of the "hipping ,ct, /B/8, or under the provisions
of section 70C/ to 70CB, inclusive, of the @evised
"tatutes of the Pnited "tates, or of any
amendments thereto; or under the provisions of
any other enactment for the time being in force
relating to the limitation of the liability of the
owners of seagoing vessels.
TITL2 II
Section 9
Nothing contained in this ,ct shall be construed as
permitting a common carrier by water to
discriminate between competing shippers similarly
place in time and circumstances, either 1a4 with
respect to the right to demand and receive bills of
lading subject to the provisions of this ,ct; or 1b4
when issuing such bills of lading, either in the
surrender of any of the carrierKs rights and
immunities or in the increase of any of the carrierKs
responsibilities and liabilities pursuant to section 8,
title #, of this ,ct or 1c4 in any other way prohibited
by the "hipping ,ct, /B/8, s amended.
Section 1B
"ection 0I of the #nterstate Commerce ,ct is
hereby amended by adding the following proviso at
the end of paragraph 7 thereof* 'Provided,
however, !hat insofar as any bill of lading
authorized hereunder relates to the carriage of
goods by sea, such bill of lading shall be subject to
the provisions of the Carriage of &oods by "ea
,ct.'
Section 11
-here under the customs of any trade the weight
of any bul$ cargo inserted in the bill of lading is a
weight ascertained or accepted by a third party
other than the carrier or the shipper, and the fact
that the weight is so ascertained or accepted is
stated in the bill of lading, then, notwithstanding
any thing in this ,ct, the bill of lading shall not be
deemed to be prima facie evidence against the
carrier of the receipt of goods of the weight so
inserted in the bill of lading, and the accuracy
thereof at the time of shipment shall not be
deemed to have been guaranteed by the shipper.
Section 14
Nothing in this ,ct shall be construed as
superseding any part of the ,ct entitled ',n act
relating to navigation of vessels, bills of lading, and
to certain obligations, duties, and rights in
connection with the carriage of property,' approved
.ebruary /9,/CB9, or of any other law which would
be applicable in the absence of this ,ct, insofar as
they relate to the duties, responsibilities, and
liabilities of the ship or carrier prior to the time
when the goods are loaded on or after the time
they are discharged from the ship.
Section 1$
!his ,ct shall apply to all contracts for carriage of
goods by sea to or from ports of the Pnited "tates
in foreign trade. ,s used in this ,ct the term
'Pnited "tates' includes its districts, territories,
and possessions* Provided, ho!ever, !hat the
Philippine legislature may by law exclude its
application to transportation to or from ports of the
Philippine #slands. !he term 'foreign trade' means
the transportation of goods between the ports of
the Pnited "tates and ports of foreign countries.
Nothing in this ,ct shall be held to apply to
contracts for carriage of goods by sea between any
port of the Pnited "tates or its possessions, and
any other port of the Pnited "tates or its
possession* Provided, ho!ever, !hat any bill of
lading or similar document of title which is
evidence of a contract for the carriage of goods by
sea between such ports, containing an express
statement that it shall be subject to the provisions
of this ,ct, shall be subjected hereto as fully as if
subject hereto as fully as if subject hereto by the
express provisions of this ,ct* Provided, further,
!hat every bill of lading or similar document of title
which is evidence of a contract for the carriage of
goods by sea from ports of the Pnited "tates, in
foreign trade, shall contain a statement that it shall
have effect subject to the provisions of this ,ct.
Section 1
Ppon the certification of the "ecretary of
Commerce that the foreign commerce of the Pnited
"tates in its competition with that of foreign
nations is prejudiced the provisions, or any of
them, of !itle # of this ,ct, or by the laws of any
foreign country or countries relating to the carriage
of goods by sea, the President of the Pnited "tates,
may, from time to time, by proclamation, suspend
any or all provisions of !itle # of this ,ct for such
periods of time or indefinitely as may be
designated in the proclamation. !he President may
at any time rescind such suspension of !itle #
hereof, and any provisions thereof which may have
been suspended shall thereby be reinstated and
again apply to contracts thereafter made for the
carriage of goods by sea. ,ny proclamation of
suspension or rescission of any such suspension
shall ta$e effect on a date named therein, which
date shall be not less than ten days from the issue
of the proclamation.
>A o! /)
'ransportation La(
,ny contract for the carriage of goods by sea,
subject to the provisions of this ,ct, effective
during any period when title # hereof, or any part
thereof, is suspended, shall be subject to all
provisions of law now or hereafter applicable to
that part of !itle # which may have thus been
suspended.
Section 1A
!his ,ct shall ta$e effect ninety days after the date
of its approval; but nothing in this ,ct shall apply
during a period not to exceed one year following its
approval to any contract for the carriage of goods
by sea, made before the date on which this ,ct is
approved, nor to any bill of lading or similar
document of title issued, whether before or after
such date of approval in pursuance of any such
contract as aforesaid.
Section 1!
!his ,ct may be cited as the 'Carriage of &oods by
"ea ,ct.'
,pproved, ,pril /8, /B98.
!/0%IC +CT 5:1 C+--I+9E O2 9OO,S
05 SE+ +CT
Section 1
!hat the provisions of Public ,ct No. I0/ of the =th
Congress of the Pnited "tates, approved on ,pril
/8, /B98, be accepted, as it is hereby accepted to
be made applicable to all contracts for the carriage
of goods by sea to and from Philippine ports in
foreign trade* Provided, that nothing in this ,ct
shall be construed as repealing any existing
provision of the Code of Commerce which is now in
force, or as limiting its application. .
Sec. 4
!his ,ct shall ta$e effect upon its approval.
1,pproved ?ctober 00, /B984.

TITL2 I
Sec. 1
-hen used in this ,ct S.
1a4 !he term 'carrier' includes the owner or the
charterer who enters into a contract of carriage
with a shipper.
1b4 !he term 'contract of carriage' applies only to
contracts of carriage by covered by a bill of lading
or any similar document of title, insofar as such
document relates to the carriage of goods by sea,
including any bill of lading or any similar document
as aforesaid issued under or pursuant to a
character party from the moment at which such bill
of lading or similar document of title regulates the
relations between a carrier and a holder of the
same. .
1c4 !he term 'goods' includes goods, wares,
merchandise, and articles of every $ind
whatsoever, except live animals and cargo which
by the contract of carriage is stated as being
carried on dec$ and is so carried..
1d4 !he term 'ship' means any vessel used for
the carriage of goods by sea..
1e4 !he term 'carriage of goods' covers the
period from the time when the goods are loaded to
the time when they are discharged from the ship.
1IS,S
Sec. 4
"ubject to the provisions of "ection 8, under every
contract of carriage of goods by sea, the carrier in
relation to the loading, handling, stowage,
carriage, custody, care, and discharge of such
goods shall be subject to the responsibilities and
liabilities and entitled to the rights and immunities
hereinafter set forth..
Sec. $
1/4 !he carrier shall be bound before and at the
beginning of the voyage to exercise due diligence
to S
1a4 La$e the ship seaworthy;
1b4 Properly man,euip, and supply the ship;
1c4 La$e the holds, refrigerating and cooling
goods are carried, fit and safe for their reception,
carriage, and preservation.
104 !he carrier shall properly and carefully load,
handle, stow, carry, $eep, care for,and discharge
the goods carried.
194 ,fter receiving the goods into his carrier, or
the master or agent of the carrier, shall, on
demand of the shipper, issue to the shipper a bill of
lading showing among other things S.
1a4 !he loading mar$s necessary for identification
of the goods as the same are furnished in writing
by the shipper before the loading of such goods
starts, provided such mar$sare stamped or
otherwise shown clearly upon the goods if
uncovered,in such a manner as should ordinarily
remain legible until the end of the voyage..
1b4 Hither the number of pac$ages or pieces, or
the uantity or weight, as the casemay be, as
furnished in writing by the shipper.
1c4 !he apparent order and conditions of the
goods* Provided, that no carrier, master, or agent
of the carrier, shall be bound to state or show in
the bill of lading any mar$s, number, uantity, or
weight which he has reasonable ground for
suspecting not accurately to represent the good
actually received or which he has had no
reasonable means of chec$ing..
174 "uch a bill of lading shall be prima facie
evidence of the receipt by the carrier of the goods
as therein described in accordance with paragraphs
194 1a4, 1b4, and 1c4, of this section* 1!he rest of
the provision is not applicable to the Philippines4.
1I4 !he shipper shall be deemed to have
guaranteed to the carrier the accuracy at the time
of shipment of the mar$s, number, uantity, and
weight, as furnished by him; and the shipper shall
indemnify the carrier against all loss, damages,
and expenses arising or resulting from inaccuracies
in such particulars. !he right of the carrier to such
indemnity shall in no way limit his responsibility
and liability under the contract of carriage to any
person other than the shipper..
184 Pnless notice or loss or damage and the
general nature of such loss or damage by given in
writing to the carrier or his agent at the port of
discharge or at the time of the removal of the
goods into the custody of the person entitled to
delivery thereof under the contract of carriage,
-, o! /)
'ransportation La(
such removal shall be prima facie evidence of the
delivery by the carrier of the goods as described in
the bill of lading. #f the loss or damage is not
apparent, the notice must be given within three
days of the delivery..
"aid notice of loss or damage may be endorsed
upon the receipt for the goods given by the person
ta$ing delivery thereof.
!he notice in writing need not be given if the state
of the goods has at the time of their receipt been
the subject of joint survey or inspection.
#n any event the carrier and the ship shall be
discharged from all liability in respect of loss or
damage unless suit is brought within one year after
delivery of the goods or the date when the goods
should have been delivered* Provided, that, if a
notice of loss or damage, either apparent or
concealed, is not given as provided for in this
section, that fact shall not affect or prejudice the
right of the shipper to bring suit within one year
after the delivery of the goods or the date when
the goods should have been delivered.
#n the case of any actual or apprehended loss or
damage, the carrier and the receiver shall give all
reasonable facilities to each other for inspecting
and tallying the goods..
1=4 ,fter the goods are loaded the bill of lading to
be issued by the carrier, master, or agent of the
carrier to the shipper shall if the shipper so
demands, be a 'shipped' bill of lading* Provided,
that if the shipper shall have previously ta$en up
any document of title to such goods, he shall
surrender the same as against the issue of the
'shipped' bill of lading, but at the option of the
carrier such document of title may be noted at the
port of shipment by the carrier, master, or agent
with the name or names of the ship or ships upon
which the goods have been shipped and the date
or dates of shipment, and when so noted the same
shall for the purpose of this section be deemed to
constitute a 'shipped' bill of lading.
1C4 ,ny clause, covenant, or agreement in a
contract of carriage relieving the carrier of the ship
from liability for loss or damage to or in connection
with the goods, arising from negligence, fault, or
failure in the duties and obligations provide in this
section or lessening such liability otherwise than as
provided in this ,ct, shall be null and void and of
no effect. , benefit of insurance in favor of the
carrier, or similar clause, shall be deemed to be a
clause relieving the carrier from liability.
1I0(TS A37 I..U3ITI2S
Sec.
1/4 Neither the carrier nor the ship shall be liable
for loss or damage arising or resulting from
unseaworthiness unless caused by want of due
diligence on the part of the carrier to ma$e the
ship seaworthy and to secure that the ship is
properly manned, euipped, and supplied, and to
ma$e the holds, refrigerating and cooling
goods are carried fit and safe for their reception,
carriage, and preservation, in accordance with the
provisions of paragraph 1/4 of "ection 194.
-henever loss or damage has resulted from
unseaworthiness, the burden of proving the
exercise of due diligence shall be on the carrier or
other person claiming exemption under this
section..
104 Neither the carrier nor the ship shall be
responsible for loss or damage arising or resulting
from S
1a4 ,ct, neglect, or default of the master,
mariner, pilot, or the servants of the carrier in the
navigation or in the management of the ship;
1b4 .ire, unless caused by the actual fault or
privity of the carrier;.
1c4 Perils, dangers, and accidents of the sea or
other navigable water;.
1d4 ,ct of &od;.
1e4 ,ct of war;.
1f4 ,ct of public enemies;
1g4 ,rrest or restraint of princes, rulers, or
people, or seizure under legal process;
1h4 Ruarantine restrictions;.
1i4 ,ct or omission of the shipper or owner of the
goods, his agent or representative;.
1j4 "tri$es or loc$outs or stoppage or restraint of
labor from whatever cause, whether partial or
general* Provided, that nothing herein contained
shall be construed to relieve a carrier from
responsibility for the carrierKs own acts;.
1$4 @iotsand civil commotions;.
1l4 "aving or attempting to save life or property
at sea;.
1m4 -astage in bul$ or weight or any other
loss or damage arising from inherent defect,
uality, or vice of the goods;
1n4 #nsufficiency or pac$ing;
1o4 #nsufficiency or inadeuacy of mar$s;.
1p4 6atent defects not discoverable by due
diligence; and.
14 ,ny other cause arising without the actual
fault and privity of the carrier and without the fault
or neglect of the agents or servants of the carrier,
but the burden of proof shall be on the person
claiming the benefit of this exception to show that
neither the actual fault or privity of the carrier nor
the fault or neglect of the agents or servants of the
carrier contributed to the loss or damage.
194 !he shipper shall not be responsible for loss or
damage sustained by the carrier or the ship arising
or resulting from any cause without the act, or
neglect of the shipper, his agents, or his servants..
174 ,ny deviation in saving or attempting to save
life or property at sea, or any reasonable deviation
shall not be deemed to be an infringement or
breach or this ,ct or of the contract of carriage,
and carrier shall not be liable for any loss or
damage resulting therefrom* Provided, however,
that if the deviation is for the purpose of loading or
unloading cargo or passengers it shall, prima facie,
be regarded as unreasonable..
1I4 Neither the carrier nor the ship shall in any
event be or become liable for any loss or damage
to or in connection with the transportation of goods
in an amount exceeding VIMM per pac$age of lawful
money of the Pnited "tates, or in case of goods not
shipped in pac$ages, per customary freight unit, or
the euivalent of that sum in other currency,
unless the nature and value of such goods have
been declared by the shipper before shipment and
inserted in the bill of lading. !his declaration, if
embodied in the bill of lading, shall be prima facie
-) o! /)
'ransportation La(
evidence, but shall not be conclusive on the
carrier..
<y agreement between the carrier, master or agent
of the carrier, and the shipper another maximum
amount than that mentioned in this paragraph may
be fixed* Provided, that such maximum shall not
be less than the figure above named. #n no event
shall the carrier be liable for more than the amount
of damage actually sustained..
Neither the carrier nor the ship shall be responsible
in any event for loss damage to or in connection
with the transportation of the goods if the nature
or value thereof has been $nowingly and
fraudulently misstated by the shipper in the bill of
lading..
184 &oods of an inflammable, explosive, or
dangerous nature to the shipment whereof, the
carrier, master or agent of the carrier, has not
consented with $nowledge of their nature and
character, may at any time before discharge be
landed at any place or destroyed or rendered
innocuous by the carrier without compensation,
and the shipper of such goods shall be liable for all
damages and expenses directly or indirectly arising
out of or resulting from such shipment. #f any such
goods shipped with such $nowledge and consent
shall become a danger to the ship or cargo, they
may in li$e manner be landed at any place, or
destroyed or rendered innocuous by the carrier
without liability on the part of the carrier except to
general average if any..

SU1123721 56 1I0(TS A37 I..U3ITI2S
A37 I3C12AS2 56 12SP53SI)ILITI2S A37
LIA)ILITI2S
Sec. A
, carrier shall be at liberty to surrender in whole or
in part all or any of his rights and immunities or to
increase any of his responsibilities and liabilities
under this ,ct, provided such surrender or increase
shall be embodied in the bill of lading issued to the
shipper.
!he provisions of this ,ct shall not be applicable to
charter parties; but if bills of lading are issued in
the case of a ship under a charter party, they shall
comply with the terms of this ,ct. Nothing in this
,ct shall be held to prevent the insertion in a bill of
lading of any lawful provisions regarding general
average..

SP2CIAL C537ITI53S
Sec. !
Notwithstanding the provisions of the preceding
section, a carrier, master or agent of the carrier,
and a shipper shall, in regard to any particular
goods be at liberty to enter into any agreement in
any terms as to the responsibility and liability of
the carrier for such goods, and as to the rights and
immunities of the carrier in respect to such goods,
or his obligation to seaworthiness, 1so far as the
stipulation regarding seaworthiness is contrary to
public policy4, or the care or diligence of his
servants or agents in regard to the loading,
handling, stowage, carriage, custody, care and
discharge of the goods carried by sea; provided,
that in this case no bill of lading has been or shall
be issued and that the terms agreed shall be a
non%negotiable document and shall be mar$ed as
such. .
,ny agreement so entered into shall have full legal
effect* Provided, that this section shall not apply to
ordinary commercial shipments made in the
ordinary course of trade but only to other
shipments where the character or condition of the
property to be carried or the circumstances, terms
and conditions under which the carriage is to be
performed are such as reasonably to justify a
special agreement.
Sec. 7
Nothing contained in this ,ct shall prevent a carrier
or a shipper from entering into any agreement,
stipulation, condition, reservation, or exemption as
to the responsibility and liability of the carrier or
the ship for the loss or damage to or in connection
with the custody and care and handling of goods
prior to the loading on and subseuent to the
discharge from the ship on which the goods are
carried by sea..
Sec. 8
!he provisions of this ,ct shall not affect the rights
and obligations of the carrier under the provisions
of the "hipping ,ct, /B/8, or under the provisions
of "ections 70C/ to 70B0, inclusive, of the @evised
"tatutes of the Pnited "tates, or of any
amendments thereto, or under the provisions of
any other enactment for the time being in force
relating to the limitation of the liability of the
owners of seagoing vessels..

TITL2 II
Sec. 9
Nothing contained in this ,ct shall be construed as
permitting a common carrier by water to
discriminate between competing shippers similarly
placed in time and circumstances, either 1a4 with
respect to their right to demand and receive bills of
lading subject to the provisions of this ,ct; or 1b4
when issuing such bills of lading either in the
surrender of any of the carrierKs rights and
immunities or in the increase of any of the carrierKs
responsibilities and liabilities pursuant to "ection I,
!itle #, of this ,ct; 1c4 in any other way prohibited
by the "hipping ,ct, /B/8, as amended..
Sec. 1B
1Not applicable to the Philippines.4.
Sec. 11
-hen under the custom of any trade the weight of
any bul$ cargo inserted in the bill of lading is a
weight ascertained or accepted by a third party
other than the carrier or the shipper and the fact
that the weight as ascertained or accepted is
stated in the bill of lading, then notwithstanding
anything in this ,ct, the bill of lading shall not be
deemed to be prima facie evidence against the
carrier of the receipt of goods of the weight so
inserted in the bills of lading, and the accuracy
thereof at the time of shipment shall not be
deemed to have been guaranteed by the shipper..
Sec. 14
1Not applicable to the Philippines.4.
-+ o! /)
'ransportation La(
Sec. 1$
!his ,ct shall apply to all contracts for carriage of
goods by seas to or from ports of the Pnited "tates
in foreign trade. ,s used in this ,ct the term
'Pnited "tates' includes its districts, territories,
and possessions* Provided, however, that the
Philippine 6egislature may by law exclude its
application to transportation to or from ports of the
Philippine #slands. !he term 'foreign trade' means
the transportation of goods between the ports of
the Pnited "tates and ports of foreign countries.
Nothing in this ,ct shall be held to apply to
contracts for carriage of goods by sea between any
port of the Pnited "tates or its possessions and any
other port of the Pnited "tates or its possessions*
Provided, however, that any bill of lading or similar
document of the title which is evidence of a
contract for the carriage of goods by sea between
such ports, containing an express statement that it
shall be subject to the provisions of this ,ct; shall
be subjected hereto as fully as if subject hereto by
the express provisions of this ,ct* Provided,
further, that every bill of lading or similar
document of title which is evidence of a contract
for the carriage of goods by sea from ports of the
Pnited "tates in foreign trade, shall contain a
statement that it shall have effect subject to the
provisions of this ,ct. .
Sec. 1
Ppon the certification of the "ecretary of
Commerce that the foreign commerce of the Pnited
"tates in its competition with that of foreign
nations is prejudiced by the provisions, or any of
them, of the !itle # of this ,ct, or by the laws of
any foreign country or countries relating to the
carriage of goods by sea, the President of the
Pnited "tates may, from time to time by
proclamation, suspend any or all provisions of !itle
# of this ,ct for such periods of time or indefinitely
as may be designated in the proclamation. !he
President may at any time rescind such suspension
of !itle # hereof, and any provisions thereof which
may have been suspended shall thereby be
reinstated and again apply to contracts thereafter
made for carriage of goods by sea. ,ny
proclamation of suspension or rescission of any
such suspension shall ta$e effect on the date
named therein, which date shall be not less than
ten days from the issue of the proclamation.
,ny contract for the carriage of goods by sea,
subject to the provisions of this ,ct, effective
during any period when !itle # hereof, or any part
thereof, is suspended, shall be subject to all
provisions of law now or hereafter applicable to
that part of !itle # which may have thus been
suspended..
Sec. 1A
!his ,ct shall ta$e effect ninety days after the date
of its approval; but nothing in this ,ct shall apply
during a period not to exceed one year following its
approval to any contract for the carriage of goods
by sea, made before the date on which this ,ct is
approved nor to any bill of lading or similar
document of title issued, whether before or after
such date of approval in pursuance of any such
contract as aforesaid..
Sec. 1!
!his ,ct may be cited as the 'Carriage of &oods by
"ea ,ct.'.
1. C53T1ACTS C5<2127 U3721 C50SA
C?&", is a special law that governs in all contracts
of carriage of*
goods
by sea
between or to and from Philippine ports
vessels involved in foreign trade
,pplication of laws*
#f the common carrier is coming to
the Philippines*
.irst* Civil Code
"econd* C?&", 1in foreign trade4
!hird* Code of Commerce
#f the private carrier is coming to
the Philippines*
.irst* C?&",
"econd* Code of Commerce
!hird* Civil Code 1excluding rules on
common carriers4
#f the private or common carrier is
from the Philippines to a foreign country*
,pply the law of the foreign country
1per ,rt. /=I9, CC4 PN6H"" the parties
ma$e C?&", applicable
Aierarchy of laws*
1) ,rt. /=88, CC 1C?&", as only in matters not
regulated by this Code4 !his
is notwitstanding that C?&", is a special law.
&oods in a foreign country shipped
to the Philippines are governed by the Civil Code
04 ,rt. /=I9, CC 1Conflict of 6aws provision4
4. LI.IT 56 LIA)ILIT* P21 PAC,A02
)2L0IA3 5<21S2AS vs. P(ILIPPI32 6I1ST
I3SU1A3C2 C5., I3C. %4BB4&
!he Civil Code does not limit the liability of the
common carrier to a fixed amount per pac$age. #n
all matters not regulated by the Civil Code, the
right and the obligations of common carriers shall
be governed by the Code of Commerce and special
laws. !hus, the C?&",, which is suppletory to the
provisions of the Civil Code, supplements the latter
by establishing a statutory provision limiting the
carrierKs liability in the absence of a shipperKs
declaration of a higher value in the bill of lading. #n
the case before us, there was no stipulation in the
<ill of 6ading limiting the carrierKs liability. Neither
did the shipper declare a higher valuation of the
goods to be shipped. PetitionersN liabilit/ shoul#
be co"?ute# base# on USOABB ?er ?acHa-e
an# not on the ?er "etric ton ?rice #eclare#
in the Letter oE Cre#it.
5n 3otice oE Clai"L5n Prescri?tion oE Action8
-7 o! /)
'ransportation La(
>irst, the provision of C?&", provides that the
notice of claim need not be given if the state of the
goods, at the time of their receipt, has been the
subject of a joint inspection or survey. Prior to
unloading the cargo, an #nspection @eport as to the
condition of the goods was prepared and signed by
representatives of both parties. Second, as stated
in the same provision, a failure to file a notice of
claim within three days will not bar recovery if it is
nonetheless filed within one year. !his one%year
prescriptive period also applies to the shipper, the
consignee, the insurer of the goods or any legal
holder of the bill of lading. '#nasmuch as the
neither the Civil Code nor the Code of Commerce
states a specific prescriptive period on the matter,
the Carriage of &oods by "ea ,ct 1C?&",4%%which
provides for a one%year period of limitation on
claims for loss of, or damage to, cargoes sustained
during transit%%may be applied suppletorily to the
case at bar.' #n the present case, the cargo was
discharged on July 9/, /BBM, while the Complaint
was filed by respondent on July 0I, /BB/, within
the one%year prescriptive period.
$. 35TIC2 56 L5SS 56 CLAI.
. P12SC1IPTI53 56 ACTI53
6ili?ino .erchants Insurance, Inc. v.
AleGan#ro %198!&
Clearly, the coverage of the ,ct includes the
insurer of the goods. ?therwise, what the ,ct
intends to prohibit after the lapse of the one%year
prescriptive period can be done indirectly by the
shipper or owner of the goods by simply filing a
claim against the insurer even after the lapse of
one year.

.ariti"e A-encies D Services, Inc. v. CA
!he period for filing the claim is one year, in
accordance with the Carriage of &oods by "ea ,ct.
!his was adopted and embodied by our legislature
in Com. ,ct No. 8I which, as a special law, prevails
over the general provisions of the Civil Code on
prescription of actions. "ection 9184 of that ,ct
provides as follows* #n any event, the carrier and
the ship shall be discharged from all liability in
respect of loss or damage unless suit is brought
within one year after delivery of the goods or the
date when the goods should have been delivered;
Provided, that if a notice of loss for damage; either
apparent or concealed, is not given as provided for
in this section, that fact shall not effect or prejudice
the right of the shipper to bring suit within one
year after the delivery of the goods or the date
when the goods should have been delivered.
A. 'AI<21 U3721 C50SA
-8 o! /)
:. International Air 'ransport
'ransportation La(
V. INTERNATIONA AIR
TRAN!PORT
A. The 'arsaw Convention
Cha?ter III I Liabilit/ oE the Carrier
Article 17
!he 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 too$ place on board the aircraft or in the
course of any of the operations of embar$ing or
disembar$ing.
Article 18
1. !he 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
too$ place during the carriage by air.
4. !he 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.
$. !he period of the carriage by air does not
extend to any carriage by land, by sea or by river
performed outside an aerodrome. #f, however, such
a carriage ta$es 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 too$ place during
the carriage by air.
Article 19
!he carrier is liable for damage occasioned by
delay in the carriage by air of passengers, luggage
or goods.
Article 4B
1. !he carrier is not liable if he proves that he and
his agents have ta$en all necessary measures to
avoid the damage or that it was impossible for him
or them to ta$e such measures.
4. #n the carriage of goods and luggage the carrier
is not liable if he proves that the damage was
occasioned by negligent pilotage or negligence in
the handling of the aircraft or in navigation and
that, in all other respects, he and his agents have
ta$en all necessary measures to avoid the damage.
Article 41
#f the carrier proves that the damage was caused
by or contributed to by the negligence of the
injured person the Court may, in accordance with
the provisions of its own law, exonerate the carrier
wholly or partly from his liability.
Article 44
1. #n the carriage of passengers the liability of the
carrier for each passenger is limited to the sum of
/0I,MMM francs. -here, in accordance with the law
of the Court seised of the case, damages may be
awarded in the form of periodical payments, the
euivalent capital value of the said payments shall
not exceed /0I,MMM francs. Nevertheless, by
special contract, the carrier and the passenger may
agree to a higher limit of liability.
4. #n the carriage of registered luggage and of
goods, the liability of the carrier is limited to a sum
of 0IM francs per $ilogram, unless the consignor
has made, at the time when the pac$age was
handed over to the carrier, a special declaration of
the value at delivery and has paid a supplementary
sum if the case so reuires. #n 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.
$. ,s regards objects of which the passenger ta$es
charge himself the liability of the carrier is limited
to I,MMM francs per passenger.
. !he sums mentioned above shall be deemed to
refer to the .rench franc consisting of 8I W
milligrams gold of millesimal fineness BMM. !hese
sums may be converted into any national currency
in round figures.
Article 4$
,ny provision tending to relieve the carrier of
liability or to fix a lower limit than that which is laid
down in this Convention shall be null and void, but
the nullity of any such provision does not involve
the nullity of the whole contract, which shall
remain subject to the provisions of this Convention.
Article 4
1. #n the cases covered by ,rticles /C and /B any
action for damages, however founded, can only be
brought subject to the conditions and limits set out
in this Convention.
4. #n the cases covered by ,rticle /= the provisions
of the preceding paragraph also apply, without
prejudice to the uestions as to who are the
persons who have the right to bring suit and what
are their respective rights.
Article 4A
1. !he 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
wilful 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 euivalent to wilful
misconduct.
4. "imilarly 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.
Article 4!
1. @eceipt 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.
4. #n 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
-> o! /)
'ransportation La(
the case of luggage and seven days from the date
of receipt in the case of goods. #n 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.
$. Hvery complaint must be made in writing upon
the document of carriage or by separate notice in
writing despatched within the times aforesaid.
. .ailing complaint within the times aforesaid, no
action shall lie against the carrier, save in the case
of fraud on his part.
Article 47
#n the case of the death of the person liable, an
action for damages lies in accordance with the
terms of this Convention against those legally
representing his estate.
Article
4
8

1. ,n action for damages must be brought, at the
option of the plaintiff, in the territory of one of the
Aigh 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.
4. Ruestions of procedure shall be governed by the
law of the Court seised of the case.
Article 49
1. !he right to damages shall be extinguished if an
action is not brought within two years, rec$oned
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.
4. !he method of calculating the period of
limitation shall be determined by the law of the
Court seised of the case.
Article
$
B

1. #n the case of carriage to be performed by
various successive carriers and falling within the
definition set out in the third paragraph of ,rticle
/, each carrier who accepts passengers, luggage or
goods is subjected to the rules set out in this
Convention, and is deemed to be one of the
contracting parties to the contract of carriage in so
far as the contract deals with that part of the
carriage which is performed under his supervision.
4. #n the case of carriage of this nature, the
passenger or his representative can ta$e action
only against the carrier who performed the carriage
during which the accident or the delay occurred,
save in the case where, by express agreement, the
first carrier has assumed liability for the whole
journey.
$. ,s regards luggage or goods, the passenger or
consignor will have a right of action against the
first carrier, and the passenger or consignee who is
entitled to delivery will have a right of action
against the last carrier, and further, each may ta$e
action against the carrier who performed the
carriage during which the destruction, loss,
damage or delay too$ place. !hese carriers will be
jointly and severally liable to the passenger or to
the consignor or consignee.
). A??licabilit/C "eanin- oE international
trans?ortation
#nternational air transportation is
transportation by air between points of contact of
two high contracting parties, or those countries
that have acceded to the Convention.
C. Liabilities un#er the Convention
!he enumeration of causes of action in the
-arsaw Convention is not an exclusive list. ;ou
can have a cause of action even if it is not* a4
death or wounding of the passenger; b4 damage or
loss or destruction of chec$ed baggage, or c4 delay
in the transportation of passengers, luggage and
goods. Note however, that the limitations of
liability in the Convention favor the carrier.
351T('2ST AI1LI32S, I3C., vs. CU23CA
%19!A&
!he ,rticles merely declare the carrier liable for
damages in the enumerated cases, if the conditions
therein specified are present. Neither said
provisions nor others in the aforementioned
Convention regulate or exclude liability for other
breaches of contract by the carrier. Pnder
petitionerKs theory, an air carrier would be exempt
from any liability for damages in the event of its
absolute refusal, in bad faith, to comply with a
contract of carriage, which is absurd.
ALITALIA vs IAC %199B&
Pnder the -arsaw Convention, an air carrier
is made liable for damages for*
/. the death, wounding or other bodily injury of
a passenger if the accident causing it too$ place on
board the aircraft or in the course of its operations
of embar$ing+disembar$ing
0. the destruction or loss of, or damage to, any
registered luggage or goods, if the occurrence
causing it too$ place during the carriage by air
9. delay in the transportation by air of
passengers, luggage or goods.
#n these cases, the Convention provides that
the 2action for damages, however founded, can
only be brought subject to the conditions and limits
set out therein.3
!he -arsaw Convention however denies to
the carrier availment 2of the provisions w+c exclude
or limit his liability, if the damage is caused by his
willful misconduct or by such default on his part as,
in accordance w+ the law of the court seized of the
case, is considered to be euivalent to willful
misconduct, or if the damage is similarly caused by
any agent of the carrier acting w+n the scope of his
employment.3
!he Convention does not operate as an
exclusive enumeration of the instances of an
-- o! /)
'ransportation La(
airlineFs liability, or as an absolute limit of the
extent of that liability.
Loreover, it should be deemed a limit of
liability only in those cases where the cause of the
death or injury to person, or destruction, loss or
damage to property or delay in its transport is not
attributable to or attended by any willful
misconduct, bad faith, rec$lessness, or otherwise
improper conduct on the part of any official or
employee for which the carrier is responsible, and
there is otherwise no special or extraordinary form
of resulting injury.
!he Convention has invariably been held
inapplicable, or as not restrictive of the carrierFs
liability, where there was satisfactory evidence of
malice or bad faith attributable to its officers and
employees.
7. Li"itations on Liabilit/
PAL I3C. v CA an# >2SUS SA.S53 %1981&
1atio8 !he limitation of their liability under /=// of
NCC* #f the mishap was due to the employeeKs own
notorious negligence, or voluntary act, or
drun$enness, the employer shall not be liable for
compensation. -hen the employeeKs lac$ of due
care contributed to his death or injury, the
compensation shall be euitably reduced. ,NG
under /=/0 #f a fellow wor$erKs intentional
malicious act is the only cause of the death or
injury, the employer shall not be answerableX
PAL vs. CA, 71. >5S26I35 .I1A37A an#
LUISA .I1A37A %199!&
!he appellees do not see$ payment for loss of any
baggage. !hey are claiming damages arising from
the discriminatory off%loading of their baggage.
!hat cannot be limited by the printed conditions in
the tic$ets and baggage chec$s. Neither can the
-arsaw Convention exclude nor regulate the
liability for other breaches of contract by air
carriers. , recognition of the -arsaw Convention
does not preclude the operation of our Civil Code
and related laws in determining the extent of
liability of common carriers in breach of contract of
carriage, particularly for willful misconduct of their
employees. "aid convention does not operate as an
exclusive enumeration of the instances for
declaring a carrier liable for breach of contract of
carriage or as an absolute limit of the extent of
that liability. !he -arsaw Convention declares the
carrier liable in the enumerated cases and under
certain limitations. Aowever, it must not be
construed to preclude the operation of the Civil
Code and pertinent laws. #t does not regulate,
much less exempt, the carrier from liability for
damages for violating the rights of its passengers
under the contract of carriage, especially if willful
misconduct on the part of the carrierKs employees
is found or established, which is the case before
Ps.
2. 'hen Li"itations Unavailable
T'A v. CA an# <inluan %1988&
!he petitionerFs contention that it is not liable is
devoid of merit. Private respondent had a first
class tic$et for .light No. 7/ of petitioner from New
;or$ to "an .rancisco on ,pril 0M, /B=B. #t was
twice confirmed and yet respondent
unceremoniously told him that there was no first
class seat available for him and that he had to be
downgraded to the economy class. ,s he
protested, he was arrogantly threatened by one
Lr. <raam. -orst still, while he was waiting for the
flight, he saw that several Caucasians who arrived
much later were accommodated in first class seats
when the other passengers did not show up. !he
discrimination is obvious and the humiliation to
which private respondent was subjected is
undeniable. Conseuently, the award of moral and
exemplary damages by the respondent court is in
order.
,t the time of this unfortunate incident, the private
respondent was a practicing lawyer, a senior
partner of a big law firm in Lanila. Ae was a
director of several companies and was active in
civic and social organizations in the Philippines.
Considering the circumstances of this case and the
social standing of private respondent in the
community, he is entitled to the award of moral
and exemplary damages. Aowever, the moral
damages should be reduced to P9MM,MMM.MM, and
the exemplary damages should be reduced to
P0MM,MMM.MM. !his award should be reasonably
sufficient to indemnify private respondent for the
humiliation and embarrassment that he suffered
and to serve as an example to discourage the
repetition of similar oppressive and discriminatory
acts.

6. Con#itions on Liabilit/
Luna v. 2stra#a %1994&
(2L78
!he -arsaw Convention was a treaty commitment
voluntarily assumed by the Philippine government;
conseuently, it has the force and effect of law in
this country. <ut, in the same to$en, jurisprudence
shows that the -arsaw Convention does not
operate as an exclusive enumeration of the
instances for declaring an airline liable for breach
of contract of carriage or as an absolute limit of the
extent of that liability.
!he failure of private respondent to deliver their
luggage at the designated time and place does not
ipso facto amount to willful misconduct. .or willful
misconduct to exist, there must be a showing that
the acts complained of were impelled by an
intention to violate the law, or were in persistent
disregard of oneKs rights. #t must be evidenced by
a flagrantly or shamefully wrong or improper
conduct.
0. <enue oE Court Actions
SA3T5S vs 351T('2ST 51I23T AI1LI32S
%1994&
-/ o! /)
'ransportation La(
1Petitioner claims that ,rt 0C1/4 is a rule merely of
venue and was waived by N?, when it did not
move to dismiss on the ground of improper venue.4
"C* , number of reasons tend to support the
characterization of ,rt 0C1/4 as a jurisdiction and
not a venue provision.
/. the wording of ,rt. 90, w+c indicates the
places where the action for damages 2must3 be
brought, underscores the mandatory nature of ,rt
0C1/4
0. this characterization is consistent w+ one of
the objectives of the Convention, w+c is to regulate
in a uniform manner the conditions of intFl
transportation by air.
9. the Convention doesnFt contain any provision
prescribing rules of jurisdiction other than ,rt
0C1/4, w+c means that the phrase 2rules as to
jurisdiction3 used in ,rt 90 must refer only to ,rt
0C1/4. #n fact, the last sentence of ,rt 90
specifically deals w+ the exclusive enumeration in
,rt 0C1/4 as 2jurisdictions3, w+c as such, cannot be
left to the will of the parties regardless of the time
when the damage occurred.
-here the matter is governed by the -arsaw
Convention, jurisdiction ta$es on a dual concept.
Jurisdiction in the international sense must be
established in accordance w+ ,rt 0C1/4 of the
-arsaw Convention, following w+c the jurisdiction
of a particular court must be established pursuant
to the applicable domestic law. ?nly after the
uestion of which court has jurisdiction is
determined will the issue of venue be ta$en up.
!his second uestion shall be governed by the law
of the court to w+c the case is submitted.
-= o! /)
special thanEs toF
O!!ice o! the Colle$e SecretarD
6P Colle$e o! La(
6P La( Center
6P Colle$e o! La( LibrarD
6P La( BarOps +,,-
#eCie( Co""ittee
I
Subject Co""ittee G1lection
La(H
I
Justin Christopher C. Mendoza GheadH
Benja"in S. Luis . Ma. Car"en L.
Jardeleza
Mildred YoCela S. 6"ali . MaD 'i!anie H.
4erona
Christina 1den M. #ondario
In!or"ation Mana$e"ent
Co""ittee
I
Ar"i BaDot GheadH . Chino BaDbaD
GdeputDH
'heresa #oldan . Le" Arenas . Mitch
Li"
Jen Lee . 9eisie Mar!il

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