Академический Документы
Профессиональный Документы
Культура Документы
54
MEMORY AID IN COMMERCIAL LAW
TRANSPORTATION LAWS
CONTRACT OF TRANSPORTATION/ CARRIAGE
A contract whereby a person, natural or juridical,
obligates to transport persons, goods, or both, from
one place to another, by land, air or water, for a
price or compensation.
Classifications:
1. Common or Private
2. Goods or Passengers
3. For a fee (for hire) or Gratuitous
4. Land, Water/maritime, or Air
5. Domestic/inter-island/coastwise or
International/foreign
It is a relationship which is imbued with the
public interest.
COMMON CARRIER
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. 1732, Civil Code).
Art. 1732 of the New Civil Code avoids any
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 (sideline).
It also avoids a 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 the law distinguish between a
carrier offering its services to the general public that
is the general community or population and one
who offers services or solicits business only from a
narrow segment of the general population.
A person or entity is a common carrier even if
he did not secure a Certificate of Public Convenience
(De Guzman vs. CA, 168 SCRA 612).
It makes no distinction as to the means of
transporting, as long as it is by land, water or air. It
does not provide that the transportation should be
by motor vehicle.
(First Philippine Industrial
Corporation vs. CA)
One is a common carrier even if he has no fixed
and publicly known route, maintains no terminals,
and issues no tickets (Asia Lighterage Shipping, Inc.
vs. CA).
Characteristics:
1. Undertakes to carry for all people indifferently
and thus is liable for refusal without
sufficient reason (Lastimoso vs. Doliente,
October 20, 1961);
2. Cannot lawfully decline to accept a particular
class of goods for carriage to the prejudice
of the traffic in these goods;
3. No monopoly is favored (Batangas Trans.
vs. Orlanes, 52 PHIL 455);
4. Provides public convenience.
5. Is imbued with public interest.
PRIVATE
CARRIER
1. As to availability
Holds himself out for all Contracts with particular
people indiscriminately
individuals or groups
only
2. As to required diligence
Extraordinary diligence is Ordinary diligence is
required
required
3. As to regulation
Subject
to
State Not subject to State
regulation
regulation
4. Stipulation limiting liability
Parties may not agree on Parties may limit the
limiting
the
carriers carriers
liability,
liability except when provided it is not
provided by law
contrary to law, morals
or good customs
5. Exempting circumstance
Prove
extraordinary Caso fortuito, Art. 1174
diligence and Art. 1733, NCC
NCC
(Any event which could
not be foreseen, or
which though foreseen
is inevitable)
6.Presumption of negligence
There is a presumption
of fault or negligence
No presumption of fault
or negligence
7.Governing law
Law on common carriers
Law on obligations and
contracts
PRIVATE CARRIER
One which, without being engaged in the
business of carrying as a public employment,
undertakes to deliver goods or passengers for
55
MEMORY AID IN COMMERCIAL LAW
GOVERNING LAWS
A. Domestic/inter-island/coastwise
Applicable to Land, Water, and Air transportation
1. Civil Code - primary
2. Code of Commerce (Arts. 349, 379, 573734, 580, 806-845) suppletory
Article 349 A contract of transportation by
land or water ways of any kind shall be
considered commercial:
1. When it has for its object merchandise or
any Article of commerce.
2. When, whatever its object may be, the
carrier is a merchant or is habitually
engaged in transportation for the public.
Article 379 - Thee provisions contained in
Articles 349 and following shall be
understood as equally applicable to those
who, although they do not personally
effect
the
transportation
of
the
merchandise, contract to do so through
others, either as contractors for a
particular and definite operation, or as
agents
for
transportations
and
conveyances.
In either case they shall be subrogated in the
place of the carriers themselves, with
respect
to
the
obligations
and
responsibility of the latter, as well as with
regard to their rights.
B. International/foreign/overseas (Foreign
country to Philippines)
Applicable to Water/maritime and Air
transportation
The law of the country of destination generally
applies.
1. Civil Code - primary
2. Code of Commerce - suppletory
3. Others - suppletory
a. Water/maritime: Carriage of Goods by
Sea Act (COGSA)
b. Air: Warsaw Convention
I. NEW CIVIL CODE
(Arts. 1732-1766)
REQUIREMENT
OF
EXTRAORDINARY
DILIGENCE
Rendition of service with the greatest skill and
utmost foresight. (Davao Stevedore Co. v.
Fernandez)
Rationale:
1. From the nature of the business and for
reasons of public policy (Art. 1733)
2. Relationship of trust
3. Business is impressed with a special
public duty
4. Possession of the goods
5. Preciousness of human life
A common carrier is not an absolute insurer of all
risks of travel.
COVERAGE
1. Vigilance over goods (Arts. 1734-1754); and
2. Safety of passengers (Arts. 1755-1763).
PASSENGER
A person who has entered into a contract of
carriage, express or implied, with the carrier. They
are entitled to extraordinary diligence from the
common carrier.
The following are not considered passengers, and
are entitled to ordinary diligence only:
a. One who has not yet boarded any part of
a vehicle regardless of whether or not he
has purchased a ticket;
b. One who remains on a carrier for an
unreasonable length of time after he has
been afforded every safe opportunity to
alight;
c. One who has boarded by fraud, stealth,
or deceit;
d. One who attempts to board a moving
vehicle, although he has a ticket, unless
the attempt be with the knowledge and
consent of the carrier;
e. One who has boarded a wrong vehicle,
has been properly informed of such fact,
and on alighting, is injured by the carrier;
f.
Invited guests and accommodation
passengers. (Lara vs. Valencia)
Those who ride for free
g. One who rides any part of the vehicle
which is unsuitable or dangerous or which
he knows is not designed or intended for
passengers.
DEFENSES OF A COMMON CARRIER IN THE
CARRIAGE OF GOODS
1. CASO FORTUITO/FORCE MAJEURE
Requisites:
a. Must be the proximate and only cause of
the loss
b. Exercise of due diligence to prevent or
minimize the loss before, during or after the
occurrence of the disaster (Art. 1739)
c. Carrier has not negligently incurred in
delay in transporting the goods (Art. 1740)
Fire is not considered a natural disaster or
calamity as it arises almost invariably from some act
of man. (Eastern Shipping Lines Inc. vs. IAC)
Mechanical defects are not force majeure if the
same was discoverable by regular and adequate
inspections. (Notes and Cases on the Law on
56
MEMORY AID IN COMMERCIAL LAW
CARRIAGE OF GOODS
CARRIAGE OF PASSENGERS
Parties
1.
2.
3.
Common carrier
Shipper
Consignee
1.
2.
Common carrier
Passenger
Cause of liability
Delay in delivery, loss, destruction, or deterioration of
Death or injury to the passengers
the goods
Duration of liability
From the time the goods are unconditionally placed in
the 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 the right to receive them. (Art. 1736)
It 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. 1737)
It 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. (Art. 1738)
Delivery of goods to the custom authorities is not
delivery to the consignee. (Lu Do v. Binamira, 101 Phil
120)
57
MEMORY AID IN COMMERCIAL LAW
Reason: As to when and how goods were damaged in Reason: The contract between the passenger and the
transit is a matter peculiarly within the knowledge of carrier imposes on the latter the duty to transport the
the carrier and its employees. (Mirasol v. Dollar, 53 passenger safely; hence the burden of explaining
PHIL 124)
should fall on the carrier.
Mere proof of delivery of goods to a carrier in good
order and the subsequent arrival of the same goods at
the place of destination in bad order makes for a prima
facie case against the carrier. (Coastwise Lighterage
Corp. v. CA, 245 SCRA 796)
Defenses
1.
2.
Ordinary
circumstance:
Exercise
of
1. Exercise of extraordinary diligence (Art.
extraordinary diligence (Art. 1735)
1756)
Special circumstances:
2. Caso fortuito
a. Flood, storm, earthquake, lighting, or
other natural disaster or calamity (plus
force majeure)
b. Act of the public enemy in war,
whether international or civil
c. Act or omission of the shipper or the
owner of goods
d. The character of the goods or defects
in the packing or in the containers
e. Order or act of competent public
authority (Art. 1734)
Valid stipulations
Void stipulations
1. That the goods are transported at the risk of the
owner or shipper;
2. That carrier will not be liable for any loss,
destruction or deterioration of the goods;
3. That the carrier need not observe any diligence
in the custody of the goods;
4. That the carrier shall exercise a degree of
diligence less than that of a good father of a family
58
MEMORY AID IN COMMERCIAL LAW
59
MEMORY AID IN COMMERCIAL LAW
A.
OVERLAND TRANSPORTATION
(Arts. 349-379)
Applicability
1. Domestic land and water/maritime transportation.
60
MEMORY AID IN COMMERCIAL LAW
Rules:
1. It is not indispensable for the creation of a
contract of carriage. (Compania Maritima vs.
Insurance Company of North America, 12 SCRA
213) IN SHORT: DISPENSABLE.
2. Ambiguity is construed against the carrier, the
contract being one of adhesion.
3. The consignee, although the instrument is
oftentimes drawn up only by the consignor and
carrier, becomes bound by all the stipulations
contained therein by making a claim for loss on the
basis of said bill of lading. (Sea-Land Services Inc.
vs. IAC)
4. The right of a party to recover for loss of
shipment consigned to him under a bill of lading
drawn up only by and between the shipper and the
carrier, springs from either a relation of agency
between him and the shipper, or his status as
stranger in whose favor some stipulation is made in
said contract, and who becomes a party thereto
when he demands fulfillment of that stipulation.
(Art. 1311 (2), (Mendoza vs. PAL Inc.)
5. Acceptance of the bill of lading without dissent
raises the presumption that all the terms therein
where brought to the knowledge of the shipper and
agreed to by him and, in the absence of fraud or
mistake; he is estopped from thereafter denying
that he assented to such terms. (Notes and Cases
Kinds:
1. On board - issued when the goods have
been actually placed aboard the ship with
very reasonable expectation that the
shipment is as good as on its way.
2. Received - one in which it is stated that the
goods have been received for shipment with
or without specifying the vessel by which the
goods are to be shipped.
3. Negotiable - one in which it is stated that
the goods referred to therein will be
delivered to the bearer or to the order of
any person named therein.
4. Non-negotiable - One in which it is stated
that the goods referred to therein will be
delivered to a specified person.
5. Clean One which does not indicate any
defect in the goods.
6. Foul One which contains a notation
thereon indicating that the goods covered by
it are in bad condition.
7. Spent One which covers goods that
already have been delivered by the carrier
without a surrender of a signed copy of the
bill.
8. Through One issued by the carrier who is
obliged to use the facilities of other carriers
as well as his own facilities for the purpose
of transporting the goods from the city of
the seller to the city of the buyer, which bill
of lading is honored by the second and other
interested carriers who do not issue their
9.
own bills.
No stipulation
1. Within a reasonable
time.
2. Carrier is bound to
61
MEMORY AID IN COMMERCIAL LAW
Effects of delay
a. Merely suspends and generally does not
terminate the contract of carriage
b. Carrier remains duty bound to exercise
extraordinary diligence
c. Natural disaster shall not free the carrier from
responsibility (Art.1740)
d. If delay is without just cause, the contract
limiting the common carriers liability cannot be
availed of in case of loss or deterioration of the
goods (Art.1747)
RIGHT OF CONSIGNEE TO ABANDON GOODS
Instances:
1. Partial non-delivery, where the goods are
useless without the others (Art. 363);
2. Goods are rendered useless for sale or
consumption for the purposes for which they are
properly destined (Art. 365); and
3. In case of delay through the fault of the carrier
(Art. 371).
NOTICE OF DAMAGE (ART. 366)
Requisites for applicability:
1. Domestic/inter-island/coastwise transportation
2. Land/water/air transportation
3. Carriage of goods
4. Goods shipped are damaged
Rules:
a. Patent damage: shipper must file a claim against
the carrier immediately upon delivery (it may be
oral or written)
b. Latent damage: shipper should file a claim
against the carrier within 24 hours from
delivery.
Note: These rules does not apply to misdelivery of
goods. (Roldan vs. Lim Ponzo)
Purpose of notice: To inform the carrier that the
shipment has been damaged, and it is charged with
liability therefore, and to give it an opportunity to
make an investigation and fix responsibility while
the matter is fresh.
The filing of notice of claim is a condition
precedent for recovery.
Shorter period may be stipulated by the parties
because it merely affects the shippers remedy and
does not affect the liability of the carrier.
(PHILAMGEN vs. Sweetlines, Inc.)
Prescriptive Period
Not provided by Article 366. Thus, in such
absence, Civil Code rules on prescription apply.
If despite the notice of claim, the carrier refuses
to pay, action must be filed in court.
1. No bill of lading was issued:
within 6 years
2. Bill of lading was issued: within
10 years.
ARTICLE 366
COGSA Sec.3 (6)
Applicability
1. Domestic/inter1. International/
island/coastwise
overseas/foreign (from
transportation
foreign
country
to
2. Land,
water,
air Phils.)
transportation
Note: subject to the
3. Carriage of goods
rule on Paramount
Clause
2. Water/maritime
transportation
3. Carriage of goods
Notice of damage
1. Condition precedent
1. Not a condition
2. 24-hour period for
precedent
claiming latent damage
2. 3-day period for
claiming latent damage
Prescriptive period
None provided; Civil One year from the date
Code applies.
of delivery (delivered
but damaged goods),
or date when the
vessel left port or from
the date of delivery to
the
arrastre
(nondelivery or loss).
COMBINED CARRIER AGREEMENT (ART. 373)
GENERAL RULE: In case of a contract of
transportation of several legs, each carrier is
responsible for its particular leg in the contract.
EXCEPTION: A combined carrier agreement where
a carrier makes itself liable assuming the obligations
and acquiring as well the rights and causes of action
of those which preceded it.
B.
MARITIME COMMERCE
(Arts. 573-869)
IMPORTANT CONCEPTS:
1. Merchant vessel
2. Maritime lien and Preference of Credit
3. Doctrine of limited liability
4. Causes of revocation of voyage
5. Participants in maritime commerce
6. Charter party
7. Loans on bottomry and respondentia
8. Accidents in maritime commerce
MARITIME/ADMIRALTY LAW
It is the system of laws which particularly relates
to the affairs and business of the sea, to ships, their
crews and navigation, and to maritime conveyance
of persons and property. (Notes and Cases on the
62
MEMORY AID IN COMMERCIAL LAW
CHARACTERISTICS
OF
MARITIME
TRANSACTION
1. Real - similar to transactions over real property
with respect to effectivity against third persons
which is done through registration. (Rubiso vs.
Rivera, 37 Phil. 72). The evidence of real nature is
shown by: 1) the limitation of the liability of the
agents to the actual value of the vessel and the
freight money; and 2) the right to retain the cargo
and embargo and detention of the vessel (Luzon
Stevedoring Corp v. CA, 156 SCRA 169);
2. Hypothecary - the liability of the owner of the
value of the vessel is limited to the vessel itself
(Doctrine of Limited Liability).
The real and hypothecary nature of maritime law
simply means that the liability of the carrier in
connection with losses related to maritime contracts
is confined to the vessel, which stands as the
guaranty for their settlement. (Aboitiz Shipping
Corp. vs. General Accident Fire and Life Assurance
Corp. 217 SCRA 359).
MERCHANT VESSEL
Vessel engaged in maritime commerce, whether
foreign or otherwise. (Bar Review Materials in
EXCEPTIONS:
1.
2.
3.
4.
5.
6.
63
MEMORY AID IN COMMERCIAL LAW
3.
64
MEMORY AID IN COMMERCIAL LAW
65
MEMORY AID IN COMMERCIAL LAW
1.
2.
3.
4.
5.
Engineers
Officers of the vessel but have no authority
except in matters referring to the motor apparatus.
When two or more are hired, one of them shall be
the chief engineer.
Duties:
1. In charge of the motor apparatus, spare
parts, and other instruments pertaining to
the engines;
2. Keep the engines and boilers in good
condition;
3. Not to change or repair the engine
without authority of the captain;
4. Inform the captain of any damage to the
motor apparatus;
5. Keep an Engine Book;
6. Supervise all personnel maintaining the
engine. (Art. 632)
Crew
The aggregate of seamen who man a ship, or the
ships company.
Hired by the ship agent, where he is present and
in his absence, the captain hires them, preferring
Filipinos, and in their absence, he may take in
foreigners, but not exceeding 1/5 of the crew. (Art.
634)
Classes of Seamans Contracts
1. By the voyage;
2. By the month; and
3. By share of profits or freightage.
Just Causes for the Discharge of Seaman
While Contract Subsists
1. Perpetration of a crime;
2. Repeated insubordination, want of discipline;
3. Repeated incapacity and negligence;
4. Habitual drunkenness;
5. Physical incapacity;
6. Desertion. (Art. 637)
Rules in case of Death of a Seaman
The seamans heirs are entitled to payment as
follows:
1. If death is natural:
a. compensation up to time of death if
engaged on wage
b. if by voyage - half of amount if death
occurs on voyage out; and full, if on
voyage in
c. if by shares - none, if before departure;
full, if after departure
2. if death is due to defense of vessel - full
payment;
3. if captured in defense of vessel - full payment;
4. if captured due to carelessness - wages up to
the date of the capture. (Art. 645)
EXCEPT:
66
MEMORY AID IN COMMERCIAL LAW
CHARTER PARTY
A contract by virtue of which the owner or agent
binds himself to transport merchandise or persons
for a fixed price.
A contract by which an entire ship, or some
principal part thereof is let/leased by the owner to
another person for a specified time or use. (Planters
Products, Inc. vs. CA, 226 SCRA 476)
Parties:
1. Ship owner or ship agent
2. Charterer
Classes:
1. Bareboat or demise The charterer provides
crew, food and fuel. The charterer is liable as if he
were the owner, except when the cause arises from
the unworthiness of the vessel. The shipowner
leases to the charterer the whole vessel,
transferring to the latter the entire command,
possession and consequent control over the vessels
navigation, including the master and the crew, who
thereby become the charters servants.
It transforms a common carrier into a private
carrier.
The charterer becomes the owner of the
vessel pro hac vice, just for that one particular
purpose only. Because the charterer is treated
as owner pro hac vice, the charterer assumes
the customary rights and liabilities of the
shipowner to third persons and is held liable
for the expense of the voyage and the wages
of the seamen.
2. Contract of Affreightment A contract whereby
the owner of the vessel leases part or all of its
space to haul goods for others.
The shipowner retains the possession,
command and navigation of the ship, the
charterer merely having use of the space in the
vessel in return for his payment of the charter
hired.
Kinds:
a. Time charter vessel is chartered for a
fixed period of time or duration of voyage.
b. Voyage or trip charter the vessel is
leased for one or series of voyages
usually for purposes of transporting goods
for charterer.
LEASE
If for a definite period,
lessee cannot give up
the lease by paying a
portion of the amount
agreed upon.
If the leased property is
sold to one who knows
of the existence of the
lease, the new owner
must respect the lease.
Civil law concept
CHARTER PARTY
An entire or complete
contract.
CHARTER PARTY
Charterer may rescind
charter party by paying
half of the freightage
agreed upon.
The new owner is not
compelled to respect the
charter party so long as
he can load the vessel
with his own cargo. (Art.
689)
Commercial law concept
Consensual contract
BAREBOAT OR
DEMISE CHARTER
Charterer
becomes
liable to others caused
by its negligence
Charterer regarded as
owner pro hac vice for
the voyage
Owner
of
vessel
relinquishes possession,
command
and
navigation to charterer
Common
converted
carrier.
carrier
is
to private
goods received
persons
Real contract
from
CONTRACT OF
AFFREIGHTMENT
(TIME OR VOYAGE
CHARTER)
Owner remains liable as
carrier and must answer
for any breach of duty
Charterer
is
not
regarded as owner.
The
vessel
owner
retains
possession,
command
and
navigation of the ship
Common carrier is not
converted to a private
carrier.
BILL OF LADING
More like a private
receipt
which
the
captain gives to accredit
67
MEMORY AID IN COMMERCIAL LAW
Clause paramount or
paramount clause
A clause in a charter
party providing that the
COGSA shall apply, even
though
the
transportation
is
domestic, subject to the
extent that any term of
the bill of lading is
repugnant to the COGSA
or applicable law, then
to the extent thereof the
provision of the bill of
lading is void. (Pandect
of Commercial Law and
Jurisprudence,
Justice
Jose Vitug, 1997 ed.)
CHARTERER
1. To pay the agreed
charter price;
2. To pay freightage
on unboarded cargo;
3. To pay losses to
others
for
loading
uncontracted cargo and
illicit cargo;
4. To wait if the
vessel needs repair;
5. To pay expenses
for deviation. (Arts.
679-687)
Fortuitous
causes
(Art. 690)
1. War or
interdiction of
commerce;
2. Blockade;
the freightage;
2.
Error
in
tonnage
or
flag;
3. Failure to
place
the
vessel at the
charterers
disposal;
4. Return of
the vessel due
to
pirates,
enemies or bad
weather;
5. Arrival at a
port
for
repairs.
cargo
being
placed
alongside the
vessel;
2. Sale by the
owner of the
vessel before
loading by the
charterer;
3. Prohibition
to receive
cargo;
4. Embargo;
and
5. Inability of
the vessel to
navigate.
Terms:
1. Primage - bonus to be paid to the captain after
the successful voyage.
2. Demurrage the sum fixed in the charter party
as a remuneration to the owner of the ship for
the detention of his vessel beyond the number
of days allowed by the charter party for loading
or unloading or for sailing.
3. Deadfreight the amount paid by or
recoverable from a charterer of a ship for the
portion of the ships capacity the latter
contracted for but failed to occupy.
4.
5. Lay Days - days allowed to charter parties for
loading and unloading the cargo.
6. Extra Lay Days days which follow after the
lay days have elapsed.
USUAL
FORMS
OF
CONSUMMATING
CONTRACTS
1. C.I.F. cost, insurance and freight;
2. F.O.B. - free on board;
3. F.A.S. - free alongside ship; and
4. C. & F. - cost and freight.
TRANSSHIPMENT OF GOODS
The act of taking cargo out of one ship and
loading it in another, or the transfer of goods from
the vessel stipulated in the contract of affreightment
to another vessel before the place of destination
named in the contract has been reached, or the
transfer for further transportation from one ship or
conveyance to another.
It is not dependent on the ownership of the
transporting ships or in the change of carriers, but
rather on the fact of actual physical transfer of
cargo from one vessel to another.
If done without legal excuse, however competent
and safe the vessel into which the transfer is made,
is a violation of contract and infringement of right of
shipper and subjects carrier to liability if freight is
lost event by cause otherwise excepted. (Magellan
Manufacturing vs. CA, 201 SCRA 102)
LOAN ON BOTTOMRY AND RESPONDENTIA
A real, unilateral, aleatory contract, by virtue of
which one person lends to another a certain amount
of money or goods on things exposed to maritime
risks, which amount, with its earnings, is to be
68
MEMORY AID IN COMMERCIAL LAW
LOAN ON
RESPONDENTIA
Definition
Loan
made
by Loan taken on security
shipowner
or
ship of the cargo laden on a
agent guaranteed by vessel, and repayable
vessel
itself
and upon safe arrival of
repayable upon arrival cargo at destination.
of
vessel
at (Art. 719)
destination. (Art. 719)
Who may contract
Shipowner
or
ship Only the owner of the
agent. Outside of the cargo.
residence
of
the
owners - the captain.
1.
2.
1.
2.
3.
1.
2.
3.
4.
5.
6.
7.
Common elements:
Exposure of security to marine peril;
Obligation of the debtor conditioned only
upon safe arrival of the security at the point
of destination.
Forms:
Public instrument
Policy signed by the contracting parties and
the broker taking part therein
Private instrument (Art. 720)
Contents:
Kind, name and registry of the vessel;
Name, surname and domicile of the captain;
Names, surnames and domiciles of the
borrower and the lender;
Amount of the loan and the premium
stipulated;
Time for repayment;
Goods pledged to secure repayment;
Voyage during which the risk is run (Art.721)
BOTTOMRY/
RESPONDENTIA
ORDINARY LOAN
(MUTUUM)
Liability
of
the
borrower is contingent
on the safe arrival of
the vessel or cargo at
destination
WHEN
LOAN
ON
BOTTOMRY
OR
RESPONDENTIA REGARDED AS SIMPLE LOAN
1. Lender loaned an amount larger than the
value of the object due to fraudulent
means employed by the borrower.
(ART.726)
2. Full amount of the loan is not used for the
cargo or given on the goods if all of them
Nature
LOAN ON
BOTTOMRY OR
RESPONDENTIA
Indemnity is paid in
advance by way of
a loan
In case of loss of
the vessel due to a
marine peril, the
obligation of the
borrower to pay is
extinguished
Real contract
of
Bottomry/
EXCEPTIONS:
1.
2.
3.
4.
5.
69
MEMORY AID IN COMMERCIAL LAW
AVERAGE
An extraordinary or accidental expense incurred
during the voyage in order to preserve the cargo,
vessel or both, and all damages or deterioration
suffered by the vessel from departure to the port of
destination, and to the cargo from the port of
loading to the port of consignment. (Art. 806)
The person whose property has been saved must
contribute to reimburse the damage caused or
expense incurred if the situation constitutes general
average.
Classes:
1. Particular or Simple Average
2. Gross or General Average
Where both vessel and cargo are saved, it is
general average; where only the vessel or only the
cargo is saved, it is particular average.
Expenses incurred to refloat a vessel, which
accidentally ran aground, in order to continue its
voyage, do not constitute general average. Not only
is there absence of a marine peril, common safety
factor, and deliberateness. It is the safety of the
property, and not the voyage, which constitutes the
true foundation of general average. (A. Magsaysay,
Inc. vs. Agan, G.R.No. L-6393, Jan. 31, 1955)
PARTICULAR OR
GROSS OR GENERAL
SIMPLE
Definition
Damages or expenses Damages or expenses
caused to the vessel or deliberately caused in
cargo that did not inure order to save the
to the common benefit, vessel, its cargo or
and borne by respective both from real and
owners. (Art. 809)
known risk. (Art. 811)
Requisites
1. common danger;
2. deliberate
sacrifice;
3. success;
4. proper formalities
and legal steps.
Liability
The owner of the goods All the persons having
which gave rise to the an interest in the
expense or suffered the vessel and the cargo
damage shall bear this therein at the time of
average. (Art. 810)
the occurrence of the
average
shall
contribute to satisfy
this average. (Art. 812)
The
insurers
(Art.859) and lenders
on
bottomry
and
respondentia
shall
likewise
contribute.
(Art.732).
Number of interests involved
Only
one
interest Several
interests
involved
involved
Share in the damage or expense
100% share
In proportion to the
value of the owners
property saved
Right to recover
No reimbursement
There
may
be
reimbursement
Kinds (not exclusive)
Art. 809
Art. 811
Procedure for recovery
1. Assembly
and
deliberation
2. Resolution of the
captain
3. Entry
of
the
resolution
in
the
logbook
4. Detailed minutes
5. Delivery
of
the
minutes
to
the
maritime
judicial
authority of the first
port, within 24 hours
from arrival,
6. Ratification
by
captain under oath.
(Arts. 813-814)
GOODS NOT COVERED BY GENERAL AVERAGE
EVEN IF SACRIFICED
1. Goods carried on deck. (ART.855)
2. Goods not recorded in the books or
records of the vessel. (ART.855 (2))
3. Fuel for the vessel if there is more than
sufficient fuel for the voyage. (Rule IX,
York-Antwerp Rule)
Jettison
Act of throwing cargo overboard in order to
lighten the vessel.
Order of goods to be cast overboard:
1. Those which are on the deck, preferring
the heaviest one with the least utility and
value;
2. Those which are below the upper deck,
beginning with the one with greatest
weight and smallest value. (Art. 815)
Jettisoned goods are not res nullius nor deemed
abandoned within the meaning of civil law so as to
be the object of occupation by salvage. (Pandect of
70
MEMORY AID IN COMMERCIAL LAW
INTERNATIONAL
Deck cargo is not
allowed
With shippers consent
General average
Particular average
Without shippers consent
Captain is liable
Captain is liable
When
unlawful
Who
bears
expenses:
The inability to
continue
voyage is due
to
lack
of
provisions,
well-founded
fear of seizure,
privateers,
pirates,
or
accidents
of
the
sea
disabling it to
navigate. (Art.
819)
1. Lack
of
provisions due
to negligence to
carry according
to usage and
customs;
2. Risk
of
enemy not well
known
or
manifest
3. Defect of
vessel due to
improper
repair; and
4. Malice,
negligence, lack
of foresight or
skill of captain.
(Art. 820)
The shipowner
or ship agent
is liable in case
of
unlawful
arrival under
stress.
But
they shall not
be liable for
the damages
caused
by
reason of a
lawful arrival.
(Art. 821)
4.
5.
COLLISION
Impact of two vessels both of which are moving.
Allision
Impact between a moving vessel and a stationary
one.
Nautical Rules to Determine Negligence
1. When two vessels are about to enter a port,
the farther one must allow the nearer to enter
first; if they collide, the fault is presumed to be
imputable to the one who arrived later, unless
it can be proved that there was no fault on its
part.
2. When two vessels meet, the smaller should
give the right of way to the larger one.
3. A vessel leaving port should leave the way
clear for another which may be entering the
same port.
4. The vessel which leaves later is presumed to
have collided against one which has left earlier.
5. There is a presumption against the vessel
which sets sail in the night.
6. There is a presumption against the vessel with
spread sails which collides with another which
is at anchor and cannot move, even when the
crew of the latter has received word to lift
anchor, when there was not sufficient time to
do so or there was fear of a greater damage or
other legitimate reason.
7. There is a presumption against an improperly
moored vessel.(Moor: to secure in a place)
8. There is a presumption against a vessel which
has no buoys to indicate the location of its
anchors to prevent damage to vessels which
may approach it.
9. Vessels must have proper look-outs or
persons trained as such and who have no
other duty aside therefrom. (Smith Bell v. CA)
Nautical Rules as to Sailing Vessel and
Steamship
1. Where a steamship and a sailing vessel are
approaching each other from opposite
directions, or on intersecting lines, the
steamship from the moment the sailing vessel
is seen, shall watch with the highest diligence
her course and movements so as to be able to
adopt such timely means of precaution as will
necessarily prevent the two boats from coming
in contact.
2. The sailing vessel is required to keep her
course unless the circumstances require
otherwise.
Zones of Time in the Collision of Vessels
1. First zone all time up to the moment when risk
of collision begins.
No rule is as yet applicable for none is necessary.
71
MEMORY AID IN COMMERCIAL LAW
on
in
of
on
Transportation and Public Utilities, Aquino, T. &
Hernando, R.P. 2004 ed.)
72
MEMORY AID IN COMMERCIAL LAW
applies
to
73
MEMORY AID IN COMMERCIAL LAW
2.
3.
BAGGAGE
CHECK
Checked-in
baggage
AIR
WAYBILL
Goods to be
shipped
2. Checked-in baggage
GENERAL RULE: $20 per kilogram
EXCEPTION: In case of special declaration of
value and payment of a supplementary sum by
consignor, carrier is liable to not more than the
declared sum unless it proves the sum is greater
than actual value.
3. Hand-carried baggage
$1000/passenger
4. Goods to be shipped
GENERAL RULE: $20 per kilogram
EXCEPTION: In case of special declaration of
value and payment of a supplementary sum by
consignor, carrier is liable to not more than the
declared sum unless it proves the sum is greater
than actual value.
An agreement relieving the carrier from liability
or fixing a lower limit is null and void. (Art. 23)
Carrier is not entitled to the foregoing limit if the
damage is caused by willful misconduct or default
on its part. (Art. 25)
Thus, the WC does not operate as an exclusive
enumeration of the instances of an absolute limit of
the extent of liability. It does not preclude the
application of the Civil Code and other pertinent
local laws. It does not regulate or exclude liability
for other breaches of contract by the carrier, or
misconduct of its employees, or for some particular
or exceptional type of damage. (Alitalia vs. CA)
In PanAm v. IAC, the WC was applied as regards
the limitation on the carriers liability, there being a
simple loss of baggage without any improper
conduct on the part of the officials or employees of
the airline or other special injury sustained by the
passenger.
In KLM Royal v. Tuller, the WC has invariably
been held inapplicable, or as not restrictive of the
carriers liability, where there was satisfactory
74
MEMORY AID IN COMMERCIAL LAW
JURISDICTION
At the option of the plaintiff, the action for
damages may be filed in the:
a. Court of domicile of the carrier;
b. Court of its principal place of business;
c. Court where it has a place of business
through which the contract has been
made; or
d. Court of the place of destination. (Art.
28(1))
NOTE: It is the passengers ultimate destination
not an agreed stopping place that determines the
country where suit is to be filed.
The forum of action provided in Art. 28(1) is a
matter of jurisdiction rather than of venue. (Santos
III vs. Northwest; 2A C.J.S.)
V. SALVAGE LAW (Act No. 2616)
SALVAGE
Two concepts:
1. Services one person renders to the owner of a
ship or goods, by his own labor, preserving the
goods or the ship which the owner or those
entrusted with the care of them have either
abandoned in distress at sea, or are unable to
protect or secure.
2. Compensation allowed to persons by whose
voluntary assistance a ship at sea or her cargo or
both have been saved in whole or in part from
impending sea peril, or such property recovered
from actual peril or loss, as in cases of shipwreck,
derelict or recapture.
Requisites:
1. Valid object of salvage;
2. Object must have been exposed to marine
peril (not perils of the ship);
3. Services rendered voluntarily (neither an
existing duty nor out of a pre-existing
contract);
4. Services are successful, total or partial.
Subjects of Salvage:
1. Ship itself;
2. Jetsam goods which are cast into the sea, and
there sink and remain under water;
3. Floatsam or Flotsam goods which float upon
the sea when cast overboard;
4. Ligan or Lagan goods cast into the sea tied to a
buoy, so that they may be found again by the
owners (p.173, Judge Diaz).
Persons who have no right to a reward for
salvage:
1. Crew of the vessel saved;
2. Person who commenced Salvage in spite of
opposition of the Captain or his representative;
3. In accordance with Sec. 3 of the Salvage Law,
a person who fails to deliver a salvaged vessel or
cargo to the Collector of Customs.
Derelict a ship or her cargo which is
abandoned and deserted at sea by those who are in
charge of it, without any hope of recovering it, or
without any intention of returning to it.
The intention of those in charge must be
ascertained. If those in charge left with the
intention of returning, or of procuring assistance,
75
MEMORY AID IN COMMERCIAL LAW
EXCEPTIONS:
SALVAGE
TOWAGE
Governed by special
law (Act No. 2616)
Requires success,
otherwise no payment
Vessel must be
involved in an accident
Fees distributed
among crewmen
1.
2.
3.
4.
5.
in
6.
7.
Warehouses;
Animal drawn vehicles and bancas moved
by oar or sail;
Airships, except for the fixing of maximum
rates for fare and freight;
Radio companies, except for rates fixing;
Public services owned or operated by the
government, except as to rates fixing;
Ice plants; and
Public markets.
PUBLIC SERVICE
A person who owns, operates, manages or
controls 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 or
public utility, ice plants, power and water supplies,
communication and similar public services. (Sec.
13b, CA 146)
A casual or incidental service devoid of public
character and interest is not brought within the
category. The question depends on such factors as
the extent of services, whether such person or
company has held himself or itself out as ready to
serve the public or a portion of the public generally.
(Luzon Stevedoring vs. PSC)
NOTE: The Public Service Commission created
under the Public Service Law has already been
abolished under P.D. No. 1 and other issuances. It
has been replaced by the following government
agencies: LTO; LTFRB; ATO; BOE; NTC; NEA; ERB;
NWRC; CAB; and MIA.
CERTIFICATE OF
PUBLIC
CONVENIENCE
(CPC)
CERTIFICATE
OF
PUBLIC
CONVENIENCE AND
NECESSITY (CPCN)
76
MEMORY AID IN COMMERCIAL LAW
An
authorization
issued
by
the
appropriate
government agency for
the operation of public
services for which no
franchise,
either
municipal
or
legislative, is required
by law, e.g., common
carriers.
An
authorization
issued
by
the
appropriate
government agency for
the operation of public
service for which a
prior
franchise
is
required by law; e.g.
telephone and other
services.
POWERS
REQUIRING PRIOR
NOTICE AND
HEARING
POWERS
EXERCISABLE
WITHOUT PRIOR
NOTICE AND
HEARING
1. Issuance of CPC
or CPCN;
2. Fixing of rates,
tolls, and charges;
3. Setting up of
standards
and
classifications;
4. Establishment of
rules
to
secure
accuracy of all meters
and all measuring
appliances;
5. Issuance
of
orders
requiring
establishment
or
1. Investigation any
matter
concerning
public service;
2. Requiring
operators to furnish
safe, adequate, and
proper service;
3. Requiring public
services
to
pay
expenses
of
investigation;
4. Valuation
of
properties of public
utilities;
5. Examination and
maintenance
of
extension of facilities;
6. Revocation,
or
modification of CPC or
CPCN;
7. Suspension of CPC
or CPCN, except when
it is necessary to
avoid serious and
irreparable damage or
inconvenience to the
public
or
private
interest, in which
case, a suspension
not more than 30
days may be ordered,
prior to the hearing.
(Soriano v. Medina,
164 SCRA 36)
test
of
measuring
appliances;
6. Grant of special
permits to make extra
or special trips in
territories specified in
the certificate;
7. Uniform
accounting system and
furnishing of annual
reports;
8. Compelling
compliance with the
laws and regulations.
77
MEMORY AID IN COMMERCIAL LAW
2.
3.
4.
5.
KABIT SYSTEM
A system whereby a person who has been
granted a certificate of public convenience allows
other persons who own motor vehicles to operate
under such license, for a fee or percentage of such
earnings. It is void and inexistent under Art. 1409,
Civil Code.
Effects:
1. The transfer, sale, lease or assignment of the
privilege granted is valid between the
contracting parties but not upon the public or
third persons. (Gelisan vs. Alday, 154 SCRA
388)