law we have (1) the limitation of the liability of the agents to the actual value of the vessel and
the freight money, and (2) the right to retain the Real and Hypothecary Nature cargo and the embargo and detention of the vessel even cases where the ordinary civil law INTERNATIONAL HARVESTER v. ARAGON would not allow more than a personal action It is now settled in the latter country that "the against the debtor or person liable. It will be jurisdiction of admiralty in matters of contract observed that these rights are correlative, and depends upon the subject-matter, i.e., the naturally so, because if the agent can exempt nature and character of the contract, and that himself from liability by abandoning the vessel the English rule which conceded jurisdiction and freight money, thus avoiding the possibility (with few exceptions) only to contracts made of risking his whole fortune in the business, it is upon and the to be performed upon navigable also just that his maritime creditor may for any waters, is inadmissible, the true criterion being reason attach the vessel itself to secure his that the contract has reference to maritime claim without waiting for a settlement of his service or maritime transaction." (Benedict on rights by a final judgment, even to the prejudice Admiralty, 6th Ed., Vol. 1, p. 127.) We choose to of a third person. This repeals the civil law to adopt the sound American rule. Even in England such an extent that, in certain cases, where the the English rule was not without protest. Lord mortgaged property is lost no personal action Kenyon, in Menetone vs. Gibbons, 3 Term, 269, lies against the owner or agent of the vessel. had expressed the following criticism: "if the admiralty has jurisdiction over the YANGCO v. LASERNA subject-matter, to say that it is necessary for the It is the real and hypothecary nature of the parties to go upon the sea to execute the maritime law, and the many securities of a real instrument borders upon absurdity." nature that maritime customs from time immemorial, the laws, the codes, and the later PHILIPPINE SHIPPING CO. v. VERGARA jurisprudence, have provided for the protection The spirit of our code is accurately set forth in a of the various and conflicting interests which are treatise on maritime law, from which we deem ventured and risked in maritime expeditions, proper to quote the following as the basis of this such as the interests of the vessel and of the decision: That which distinguishes the maritime agent, those of the owners of the cargo and from the civil law and even from the mercantile consignees, those who salvage the ship, those law in general is the real and hypothecary who make loans upon the cargo, those of the nature of the former, and the many securities of sailors and members of the crew as to their a real nature that maritime customs from time wages, and those of a constructor as to repairs immemorial, the laws, the codes, and the later made to the vessel. jurisprudence, have provided for the protection of the various and conflicting interest which are CHUA YEK HONG v. IAC ventured and risked in maritime expeditions, The limited liability rule, however, is not without such as the interests of the vessel and of the exceptions, namely: (1) where the injury or agent, those of the owners of the cargo and death to a passenger is due either to the fault of consignees, those who salvage the ship, those the ship owner, or to the concurring negligence who make loans upon the cargo, those of the of the ship owner and the captain (Manila sailors and members of the crew as to their Steamship Co., Inc. vs. Abdulhaman supra); (2) wages, and those of a constructor as to repairs where the vessel is insured; and (3) in made to the vessel. workmen's compensation claims Abueg vs. San Diego, supra). In this case, there is nothing in the records to show that the loss of the cargo which the passengers and shippers of cargo was due to the fault of the private respondent aboard the “Consuelo V” would be subjected. In as shipowners, or to their concurrent negligence his desire to reap greater benefits in the with the captain of the vessel. maritime trade, Lim Hong To willfully augmented the dangers and hazards to his
vessel’s unwarry passengers, who would OHTA DEV’T CO. v. STEAMSHIP “POMPEY” normally assume that the launch officers This argument seems to be based upon article possessed the necessary skill and experience 587 of the Code of Commerce which authorizes to evade the perils of the sea. Hence, the his the shipowner to abandon the ship with all its liability cannot be the identical to that of a tackle and freight earned during the voyage in shipowner who bears in mind the safety of the order to answer for his liability to third persons. passengers and cargo by employing duly But this is inapplicable, for the reason that in licensed officers.
this case there was no abandonment of the The international rule is to the effect that the ship. We do not believe that appellants based right of abandonment of vessels, as a legal their contention upon article 837 which refers to limitation of a shipowner’s liability, does not collisions, because that is not the case here. apply to cases where the injury or the average is due to shipowner’s own fault. ABOITIZ SHIPPING v. GENERAL ACCIDENT FIRE AND LIFE INSURANCE Lim Hong To expressly assumed the full risk The real and hypothecary nature of maritime law and responsibility of such a collision
simply means that the liability of the carrier in ABUEG v. SAN DIEGO connection with losses related to maritime Claims under the Workmen’s Compensation Act contracts is confined to the vessel, which is is one of the exemptions to the Real and hypothecated for such obligations or which Hypothecary nature. stands as the guaranty for their settlement. It has its origin by reason of the conditions and PI v. INSULAR LIFE risks attending maritime trade in its earliest The rights and liabilities of owners of ships are years when such trade was replete with in many respects essentially the same as in the innumerable and unknown hazards since case of other owners of things. As a general vessels had to go through largely uncharted rule, the owners of a vessel and the vessel waters to ply their trade. It was designed to itself are liable for necessary repairs. offset such adverse conditions and to Naturally the total destruction of the vessel encourage people and entities to venture into extinguishes a maritime lien, as there is no maritime commerce despite the risks and the longer any res to which it can attach. But the prohibitive cost of shipbuilding. Thus, the total destruction of the vessel does not liability of the vessel owner and agent arising affect the liability of the owners for repairs from the operation of such vessel were confined on the vessel completed before its loss. to the vessel itself, its equipment, freight, and insurance, if any, which limitation served to Vessels induce capitalists into effectively wagering their resources against the consideration of the large YU CON v. IPIL profits attainable in the trade. Ipil and Solamo were the carriers of the P450 belonging to the plaintiff, and that they received Exceptions this sum from the latter for the purpose of delivering it to the store of the town of Catmon, MANILA STEAMSHIP v. ABDULHAMAN to which it had been consigned. Under such By operating with an unlicensed master, Lim circumstances, said defendants were the Hong To deliberately increased the risk to depositaries of the money. Liability of carriers. passengers, by the provisions of the Civil Code — In order that a thing may be transported, it or other appropriate special provisions of law. must be delivered to the carrier, as the Code says. From the time it is delivered to the carrier In the case, Jison was propelled by a second-hand motor, originally used for a tractor or shipper until it is received by the consignee, plow; and it had a capacity for only eight the carrier has it in his possession, as a persons. It was used for carrying of passengers necessary condition for its transportation, and is and luggage between the landing and ships in obliged to preserve and guard it; wherefore it the harbor. This was not such a boat as is is but natural and logical that he should be contemplated in article 835 of the Code of responsible for it. Commerce, requiring protest in case of collision. Article 587 of the Code of Commerce in The word "nave"(Ship) in Spanish, which is used force:The agent shall be civilly liable for the interchangeably with "buque"(vessel) in the indemnities in favor of third persons which arise Code of Commerce, means, according to the from the conduct of the captain in the care of Spanish-English Dictionary complied by Edward the goods which the vessel carried; but he may R. Bensley, "Ship, a vessel with decks and exempt himself therefrom by abandoning the sails." A deck is not a feature of the smallest vessel with all her equipments and the freight he types of watercraft. may have earned during the trip. FUBISO v. RIVERA Captain: govern vessels that navigate the high The requisite of registration on the registry, of seas or ships of large dimensions and the purchase of a vessel, is necessary and importance, although they be engaged in the indispensable in order that the purchaser's coastwise trade. rights may be maintained against a claim filed Master: are those who command smaller ships by a third person. engaged exclusively in the coastwise trade. For
maritime commerce, "captain" and "master" have the same meaning; both being chiefs or According to the amendment, the Insular commanders of ships. Collector of Customs, as at present, with the fulfillment of the duties of the commercial LOPEZ v. DURUELO register concerning the registering of vessels; Article 835 of the Code of Commerce is found in so that the registration of a bill of sale of a the section dealing with collisions, and the vessel shall be made in the office of the Insular context shows the collisions intended are Collector of Customs Rivera's rights cannot collisions of sea-going vessels and cannot be prevail over those acquired by Rubiso in the applied to small boats engaged in river and bay traffic. The 3rd Book of the Code of Commerce, ownership of the pilot boat Valentina, on dealing with Maritime Commerce, of which the grounds that the acquisition of the vessel at section of Collisions forms a part, was intended public auction, on January 23, 1915, was to define the law relative to merchant vessels subsequent to its purchase by the defendant and marine shipping; and run by masters having Rivera, Rubiso, was careful to record his special training, with the elaborate apparatus of acquisition, opportunely and on prior date, has, crew and equipment indicated in the Code. according to the law, a better right than Rivera
who subsequently recorded his purchase. The word "vessel" (Spanish "buque," "nave") was not intended to include minor craft engaged only in river and bay traffic. Other ARROYO v. YU vessels of a minor nature not engaged in maritime commerce, such as river boats and MACONDRAY v. CIR those carrying passengers from ship to shore, The inclusion of the unmanifested cargoes in must be governed, as to their liability to the Bill of Lading does not satisfy the requirement of the aforequoted sections of the him to obtain recourse (against the captain), as Tariff and Customs Code. It is to be noted that it is very easy to do, from other individuals who nowhere in the said section is the presentation have been drawn into the venture as shippers of a Bill of Lading required, but only the presentation of a Manifest containing a true and accurate description of the cargoes. This is for VERZOSA v. LIM the simple reason that while a manifest is a Upon this point we note that Silvino Lim is declaration of the entire cargo, a bill of lading is impleaded as owner; and Siy Cong Bieng & Co. but a declaration of a specific part of the cargo is impleaded as the shipping agent (casa and is a matter of business convenience based naviera), or person in responsible control of the exclusively on a contract.1 The object of a Ban Yek at the time of the accident. In Art. 826 manifest is to furnish the customs officers with a of the Code of Commerce, it is declared that the list to check against, to inform our revenue owner of any vessel shall be liable for the officers what goods are being brought into the indemnity due to any other vessel injured by the country, and to provide a safeguard against fault, negligence, or lack of skill of the captain of goods being brought into this country on a the first. vessel and then smuggled ashore. BEHN v. MCMICKING While a bill of lading is ordinarily merely a Provisions of the Civil Code and those of the convenient commercial instrument designed to Code of Commerce agree in fixing the liability of protect the importer or consignee, a manifest of the person who, being at the head of an the cargo is absolutely essential to the enterprise or business establishment, places or exportation or importation of property in all selects another to manage it. vessels, the evident intent and object of which is to impose upon the owners and officers of It should be borne in mind that the vessel such vessel an imperative obligation to submit herself is liable as a mortgaged thing for the lists of the entire loading of the ship in the credits of the shippers or owners of the goods prescribed form, to facilitate the labors of the transported by her; and that the naviero (agent), customs and immigration officers and to defeat even though he is not the owner of the vessel, is any attempt to make use of such vessels to in every way liable to the creditor for such secure the unlawful entry of persons or things losses and damages, without prejudice to his into the country. rights against the owner on the value of the same, its equipment and freight. Parties Captains/ Masters - Articles 609-625, Code of Commerce Shipowners/ Ship Agents - Article 586-594,
595-608, Code of Commerce YU CON v. IPIL (supra)
Captain: govern vessels that navigate the high STANDARD OIL v. LOPEZ seas or ships of large dimensions and The shipper may, in the court’s opinion, go at importance, although they be engaged in the once upon the owner and the latter, if so coastwise trade. minded, may have his recourse for Master: are those who command smaller ships indemnization against his captain. Primary engaged exclusively in the coastwise trade. For liability is placed upon the person who has maritime commerce, "captain" and "master" actual control over the conduct of the voyage have the same meaning; both being chiefs or and who has most capital embarked in the commanders of ships.
venture, namely, the owner of the ship, leaving INTER-ORIENT MARITIME v. CA The negligence on the part of Capt. Gavino is carry goods aboard and deal with the freight evident; but Capt. Kabankov is no less earned, agree upon rates and decide whether to responsible for the collison. His unconcerned take cargo. The ship captain, as agent of the lethargy as master of the ship in the face of shipowner, has legal authority to enter into troublous exigence constitutes negligence. contracts with respect to the vessel and the The master is not wholly absolved from his trading of the vessel, subject to applicable duties while a pilot is on board his vessel, and limitations established by statute, contract or may advise with or offer suggestions to him. He instructions and regulations of the shipowner.17 is still in command of the vessel, except so far To the captain is committed the governance, as her navigation is concerned, and must cause care and management of the vessel.18 Clearly, the ordinary work of the vessel to be properly the captain is vested with both management carried on and the usual precaution taken. Thus, and fiduciary functions. in particular, he is bound to see that there is sufficient watch on deck, and that the men are Officers/Crew - Article 648, Code of attentive to their duties, also that engines are Commerce stopped, towlines cast off, and the anchors clear and ready to go at the pilot's order. Supercargoes -Articles 649-651, Code of Commerce Where a compulsory pilot is in charge of a ship, the master being required to permit him to Charter Party navigate it, if the master observes that the pilot is incompetent or physically incapable, then it is PHILAMGEN v. PKS the duty of the master to refuse to permit the Much of the distinction between a common or pilot to act. But if no such reasons are present, public carrier and a private or special carrier lies then the master is justified in relying upon the in the character of the business, such that if the pilot, but not blindly. undertaking is an isolated transaction, not a part of the business or occupation, and the carrier FAR EASTERN SHIPPING v. NLRC does not hold itself out to carry the goods for The captain of a vessel is a confidential and the general public or to a limited clientele, managerial employee within the meaning of the although involving the carriage of goods for a above doctrine. A master or captain, for fee, the person or corporation providing such purposes of maritime commerce, is one who service could very well be just a private carrier. has command of a vessel. A captain commonly A typical case is that of a charter party which performs three (3) distinct roles: (1) he is a includes both the vessel and its crew, such as in general agent of the shipowner; (2) he is also a bareboat or demise, where the charterer commander and technical director of the vessel; obtains the use and service of all or some part and (3) he is a representative of the country of a ship for a period of time or a voyage or under whose flag he navigates.16 Of these voyages and gets the control of the vessel and roles, by far the most important is the role its crew. Contrary to the conclusion made by performed by the captain as commander of the the appellate court, its factual findings indicate vessel; for such role (which, to our mind, is that PKS Shipping has engaged itself in the analogous to that of "Chief Executive Officer" business of carrying goods for others, although [CEO] of a present-day corporate enterprise) for a limited clientele, undertaking to carry such has to do with the operation and preservation of goods for a fee. The regularity of its activities in the vessel during its voyage and the protection this area indicates more than just a casual of the passengers (if any) and crew and cargo. activity on its part. Neither can the concept of a In his role as general agent of the shipowner, common carrier change merely because the captain has authority to sign bills of lading, individual contracts are executed or entered into with patrons of the carrier. Such restrictive . . . . . . . . An owner who retains possession of interpretation would make it easy for a common the ship though the hold is the property of the carrier to escape liability by the simple charterer, remains liable as carrier and must expedient of entering into those distinct answer for any breach of duty as to the care, agreements with clients. loading and unloading of the cargo. . . .
VALENZUELA HARDWOOD v. CA LITONJUA v. NATIONAL SEAMEN BOARD In the instant case, it is undisputed that VSI did A bareboat or demise charter is a demise of a not offer its services to the general public. As vessel, much as a lease of an unfurnished found by the Regional Trial Court, it carried house is a demise of real property. The passengers or goods only for those it chose shipowner turns over possession of his vessel to the charterer, who then undertakes to under a “special contract of charter party.” As provide a crew and victuals and supplies and correctly concluded by the Court of Appeals, fuel for her during the term of the charter. the MV Vlasons I “was not a common but a private carrier.” Consequently, the rights and A bareboat or demise charter is a demise of a obligations of VSI and NSC, including their vessel, much as a lease of an unfurnished respective liability for damage to the cargo, are house is a demise of real property. The determined primarily by stipulations in their shipowner turns over possession of his vessel contract of private carriage or charter party. to the charterer, who then undertakes to provide a crew and victuals and supplies and Bareboat/ Contract of Affreightment fuel for her during the term of the charter.A time charter, upon the other hand, like a demise COASTWISE LIGHTERAGE v. CA charter, is a contract for the use of a vessel for a Under the demise or bareboat charter of the specified period of time or for the duration of vessel, the charterer will generally be regarded one or more specified voyages. In this case, as the owner for the voyage or service however, the owner of a time-chartered vessel stipulated. The charterer mans the vessel with (unlike the owner of a vessel under a demise or his own people and becomes the owner pro hac bare-boat charter), retains possession and vice, subject to liability to others for damages control through the master and crew who caused by negligence. To create a demise, the remain his employees. owner of a vessel must completely and exclusively relinquish possession, command What the time charterer acquires is the right to and navigation thereof to the charterer, anything utilize the carrying capacity and facilities of the short of such a complete transfer is a contract vessel and to designate her destinations during of affreightment (time or voyage charter party) the term of the charter. or not a charter party at all. A voyage charter, or trip charter, is simply a On the other hand a contract of affreightment is contract of affreightment, that is, a contract for one in which the owner of the vessel leases part the carriage of goods, from one or more ports of or all of its space to haul goods for others. It is a loading to one or more ports of unloading, on contract for special service to be rendered by one or on a series of voyages. In a voyage the owner of the vessel and under such contract charter, master and crew remain in the employ the general owner retains the possession, of the owner of the vessel. command and navigation of the ship, the charterer or freighter merely having use of the Freight - Articles 659-661, Code of space in the vessel in return for his payment of Commerce the charter hire. Demurrage is the sum fixed in a charter party as COMPAGNIE DE COMMERCE v. HAMBURG a remuneration to the owner of the ship for the AMERICA detention of his vessel beyond the number of The claim advanced on behalf of the shipowner days allowed by the charter party for loading or for freights is wholly without merit. Under the unloading or for sailing. terms of the contract of affreightment, the amount of the freight was made payable on Liability for demurrage, using the word in its delivery of the cargo at the designated port of strict technical sense, exists only when destination. It is clear then, that under the terms expressly stipulated in the contract.[13] Shipper of that instrument freight never became or charterer is liable for the payment of payable. Carrying the cargo from Saigon to demurrage claims when he exceeds the period Manila was not even a partial performance of a for loading or unloading as agreed upon or the contract to carry it from Saigon to Europe; and agreed laydays. The period for such may or may even it if could be treated as such, the not be stipulated in the contract. shipowner would have no claim for freight, in the absence of any agreement, express or A charter party may either provide for a fixed implied, to make payment for a partial laydays or contain general or indefinite words performance of the contract. such as customary quick dispatch or as fast as the steamer can load. Demurrage/ Deadfreight In the case under scrutiny, the charter party NATIONAL FOOD AUTHORITY v. CA provides merely for a general or indefinite words Under the law, the cargo not loaded is of customary quick dispatch. considered as deadfreight. It is the amount paid by or recoverable from a charterer of a ship for Averages - Articles 806-808, Code of the portion of the ships capacity the latter Commerce contracted for but failed to occupy. Simple - Articles 732, 809-810 In fact, it is further disclosed by the evidence General - Articles 732, 811-818, 859-861 that there was a communication from NFA Administrator Emil Ong to Oscar Sanchez, MAGSAYSAY v. AGAN Manager of Hongfil Shipping Corporation, Requisites of General Average: stating clearly that the vessel M/V CHARLIE/DIANE was chartered to load our First, there must be a common danger. This 200,000 bags corn grains from Cagayan de Oro means, that both the ship and the cargo, after to Manila at P7.30 per 50 kg./bag. Therefrom, it has been loaded, are subject to the same can be gleaned unerringly that the charter party danger, whether during the voyage, or in the was to transport 200,000 bags of corn grains. port of loading or unloading; that the danger arises from the accidents of the sea, It is thus decisively clear that the letter of dispositions of the authority, or faults of men, agreement covered 200,000 bags of corn grains provided that the circumstances producing the but only 166,798 bags were unloaded at the peril should be ascertained and imminent or Port of Manila. Consequently, shut-out load or may rationally be said to be certain and deadfreight of 33,201 bags at P7.30 per bag or imminent. This last requirement exclude P242,367.30 should be paid by NFA to Hongfil measures undertaken against a distant peril. Shipping Corporation.
Second, that for the common safety part of the Hence, plaintiff is entitled to recover in some vessel or of the cargo or both is sacrificed way and from somebody an amount bearing deliberately. such proportion to its total loss as the value of both the ship and the saved cargo bears to the Third, that from the expenses or damages value of the ship and entire cargo before the caused follows the successful saving of the jettison was effected. vessel and cargo. Fourth, that the expenses or damages should York Antwerp Rules have been incurred or inflicted after taking proper legal steps and authority. EASTERN SHIPPING LINES v. MARGARINE-VERKAUFS-UNION Liquidation - Articles 846-869 The Court finds no error and upholds the lower STANDARD OIL v. LOPEZ court's ruling sustaining respondent's damage ISSUE: WON the loss of this petroleum was a claim although the amount thereof did not general average loss or a particular loss to be exceed 5% of respondent's interest in the cargo borne solely by the owner of the cargo and would have been barred by the cited article of the Commerce Code. We hold that the lower HELD: GENERAL AVERAGE LOSS It is a court correctly ruled the cited codal article to be general rule… (xxx) that ordinarily the loss of "not applicable in this particular case for the cargo carried on deck shall not be considered a reason that the bill of lading (Exhibit "F") general average loss. The reason for this rule is contains "an agreement to the contrary" for it is found in the fact that deck cargo is in an expressly provided in the last sentence of the extra-hazardous position and, if on a sailing first paragraph (Exhibit "1-A") that "In case of vessel, its presence is likely to obstruct the free average, same shall be adjusted according to action of the crew in managing the ship. York-Antwerp Rules of 1950." The insertion of said condition is expressly authorized by Moreover, especially in the case of small Commonwealth Act No. 65 which has adopted vessels, it renders the boat top-heavy and thus in toto the U.S. Carriage of Goods by Sea Act. may have to be cast overboard sooner than Now, it has not been shown that said rules limit would be necessary if it were in the hold; and the recovery of damage to cases within a naturally it is always the first cargo to go over in certain percentage or proportion that said case of emergency. Indeed, in Art 815 of Code damage may bear to claimant's interest either in of Commerce, it is expressly declared that deck the vessel or cargo as provided in Article 848 of cargo shall be cast overboard before cargo the Code of Commerce On the contrary, Rule 3 stowed in the hold. of said York-Antwerp Rules expressly states that "Damage done to a ship and cargo, or However, with the advent of the steamship as either of them, by water or otherwise, including the principal conveyer of cargo by sea, it has damage by breaching or scuttling a burning been felt that the reason for the rule has ship, in extinguishing a fire on board the ship, become less weighty, especially with reference shall be made good as general average. ... " to coastwise trade; and it is now generally held that jettisoned goods carried on deck, Arrival Under Stress - Articles 819-825, according to the custom of trade, by steam 840-845 vessels navigating coastwise and inland waters, are entitled to contribution as a general average Collisions - Article 831 loss. G. URRUTIA v. BACO RIVER PLANTATION It being clear from, the evidence that the gross the damage occasioned to their cargoes. As the negligence of those managing the steamer Isabel was a total loss and cannot sustain any brought it into such close proximity to the sail part of this liability, the burden of responding to vessel that a collision was apparently inevitable, the Government of the Philippine Islands, as the question is whether or not the sail vessel owner of the rice embarked on the Isabel, must was negligent in continuing its course without fall wholly upon the owner of the other ship, that variation up to the moment that it found itself in is, upon the defendant, the Philippine extremis. Steamship Company, Inc.
Article 20 of the International Rules for the SARASOLA v. YU BIAO SONTUA Prevention of Collision at Sea is as follows: "If Negligence of Y. Sontua was the primary cause two ships, one of which is a sailing ship and the of collision which would have never happened if other a steam ship, are proceeding in such it stayed true to its course. The Supreme Court directions as to involve risk of collision, the held that article 827 applies. Both parties steam ship shall keep out of the way, of the cannot recover. sailing ship." International Carriage of Goods by Sea Article 21 is as follows: "where by any of these (COGSA) rules one of two vessels is to keep out of the way, the other shall keep her course and NATIONAL DEV’T COMPANY v. CA speed." In a previously decided case, it was held that the law of the country to which the goods are to Generally speaking, in collisions between be transported governs the liability of the vessels there exist three divisions of time, or common carrier in case of their loss, destruction zones; The first division covers all the time up to or deterioration pursuant to Article 1753 of the the moment when the risk of collision may be Civil Code. It is immaterial that the collision said to have begun. Within this zone no rule is actually occurred in foreign waters, such as Ise applicable because none is necessary. Each Bay, Japan. It appears, however, that collision vessel is free to direct its course as it deems falls among matters not specifically regulated by best without reference to the movements of the the Civil Code, hence, we apply Articles 826 to other vessel. The second division covers the 839, Book Three of the Code of Commerce, time between the moment when the risk of which deal exclusively with collision of vessels. collision begins and the moment when it has become a practical certainty. The third division FH STEVENS v. NORDEUTSCHER covers the time between the moment when According to Articles 1155 of the Civil Code of collision has become a practical certainty and the Philippines: "The prescription of actions is the moment of actual contact. interrupted when they are filed before the court, when there is a written extrajudicial demand by It was during the time when the sail vessel was the creditors, and when there is any written passing through the third zone that it changed acknowledgment of the debt by the debtor." its course to port in order to avoid, if possible, the collision. This act may be said to have been In addition, according to section 49 of Act No. done in extremis, and, even if wrong, the sailing 190: "If, in an action commenced, in due time, a vessel is not responsible for the result. judgment for the plaintiff be reversed, or if the plaintiff fail otherwise than upon the merits, and PI v. PHILIPPINE STEAMSHIP CO. the time limited for the commencement of such It is there declared that where both vessels are action has, at the date of such reversal or to blame, both shall be solidarily responsible for failure, expired, the plaintiff, or, if he die and the cause of action survive, his representatives may deterioration of goods due to delay in their commence a new action within one, year after transportation constitutes loss or damage to such date, and this provision shall apply to any either shipper or consignee within the meaning claim asserted in any pleading by a defendant." of 3(6), so that as suit was not brought within one year the action was barred losses or The action commenced by Stevens Inc. in the damages due to arrival in damaged or MTC, on April 27, 1960, was dismissed on June deteriorated condition But the Court allowed 13, 1960, or over twenty (20) days after the that damages as a result of delay are not expiration of the period of one (1) year Under covered by prescriptive provision of COGSA if said section 49 of Act No. 190, the period within damages were due, not to deterioration and which Stevens Inc. could initiate the present decay of the goods while in transit, but to other case was renewed, therefore, for another year, causes independent of the condition of the beginning from June 14, 1960 cargo upon arrival, like a drop in their market value. . . .
DOLE PHIL. v. MARITIME CO. Here, there is neither deterioration nor ISSUE: WON Article 1155 of the Civil Code is disappearance nor destruction of goods caused applicable to actions brought under of the by carriers breach of contract. Whatever provisions of the COGSA - NO reduction there may have been in the value of Article 1155: The prescription of actions is the goods is not due to their deterioration or interrupted when they are filed before the court, disappearance because they had been when there is a written extrajudicial demand by damaged in transit. the creditors, and when there is any written acknowledgment of the debt by the debtor. MARITIME AGENCIES & SERVICES, INC. v. CA Sec 3 par. 6 of COGSA: The carrier and the As a mere charterer's agent, it cannot be held ship shall be discharged from all liability in solidarily liable with Transcontinental for the respect of loss or damage unless suit is brought losses/damages to the cargo outside the within one year after delivery of the goods or the custody of the vessel. Notably, Transcontinental date when the goods should have been delivered; Provided, That, if a notice of loss or was disclosed as the charterer's principal and damage, either apparent or conceded, is not there is no question that Maritime acted within given as provided for in this section, that fact the scope of its authority. shall not affect or prejudice the right of the shipper to bring suit within one year after the FIL MERCHANTS v. ALEJANDRO delivery of the goods or the date when the ISSUE: WON the 1-year period within which to goods should have been delivered. file a suit against the carrier and the ship, in case of damage or loss as provided for in the ANG v. AMERICAN STEAMSHIP Carriage of Goods by Sea Act applies to the As defined in the Civil Code and as applied to insurer of the goods Section 3 (6) paragraph 4 of the Carriage of
Goods by Sea Act, "loss" contemplates merely YES HELD: It is clear from the coverage of the a situation where no delivery at all was made by Act that it includes or also applies to the insurer the shipper of the goods because the same had of goods. Otherwise, what the Act intends to perished, gone out of commerce, or prohibit after the lapse of the one year disappeared that their existence is unknown or prescriptive period can be done indirectly by the they cannot be recovered. It does not include a shipper or owner of the goods by simply filing a situation where there was indeed delivery — but claim against the insurer even after the lapse of delivery to the wrong person, or a misdelivery, one year. as alleged in the complaint in this case.
MITSUI v. CA Aviation Law list of passengers for the Nov 24, 1981 PR 311 flight and, consequently, in the list of the replacement flight PR 307. Since he had
secured confirmation of his flight -- not only ALITALIA v. IAC once, but twice -- by personally going to the In the case at bar, no bad faith or otherwise carriers offices where he was consistently improper conduct may be ascribed to the assured of a seat thereon -- PALs negligence employees of petitioner airline; and Dr. Pablo's was so gross and reckless that it amounted to luggage was eventually returned to her, bad faith. belatedly, it is true, but without appreciable
damage. The fact is, nevertheless, that some UNITED AIRLINES v. WILLIE UY species of injury was caused to Dr. Pablo ISSUE: Whether or not the action for damages because petitioner ALITALIA misplaced her is barred by the lapse of the 2-year prescriptive baggage and failed to deliver it to her at the period under Art. 29 of the Warsaw Convention time appointed - a breach of its contract of
carriage. Certainly, the compensation for the Supreme Court held that although the 2-year injury suffered by Dr. Pablo cannot under the prescriptive period under the Warsaw circumstances be restricted to that prescribed Convention has lapsed, it did not preclude the by the Warsaw Convention for delay in the application of other pertinent provisions of the transport of baggage. Civil Code.
PAN AMERICAN v. IAC Thus, the action for damages could still be filed Petitioner's liability for the lost baggage is based on tort which can be filed within 4 years limited to $20.00 per kilo or $600.00, as from the time cause of action accrued. As for stipulated at the back of the ticket, as stated in the action pertaining to the loss of the contents the airline ticket pursuant to the Warsaw of the luggage, while it was well within the Convention. bounds of the Warsaw Convention, the
Supreme Court found that there was an CHINA AIRLINES v. DANIEL CHIOK exception to the applicability of the 2-year ISSUE: WON CAL and PAL are liable for moral prescriptive period – that is when the airline and exemplary damages. (YES) employed delaying tactics and gave the
passenger the run-around. Moral damages cannot be awarded in breaches
of carriage contracts, except in the two Exception to the Application of the 2-year instances: prescriptive period: When airline employed Art 1764. Xxx death of a passenger caused by delaying tactics. the breach of contract by a common carrier. Art 2220. Willful injury to property may be a legal ground for awarding moral damages if the
PUBLIC UTILITIES court should find that, under the circumstances, such damages are justly due.
The same rule applies to breaches of contract where the defendant acted fraudulently or in
bad faith. Art 1764 doesn’t apply. We must ALBANO v. REYES therefore determine if CAL or PAL is guilty of Even if the MICT is considered a public utility, bad faith resulting from negligence of PAL was its operation would not necessarily need a its claim that his name was not included in its franchise from the legislature because the law has granted certain administrative agencies the HELD: YES. It is not necessary, under this power to grant licenses for or to authorize the definition, that one holds himself out as serving operation of public utilities. Reading E.O. 30 and or willing to serve the public in order to be P.D. 857 together, it is clear that the lawmaker considered public service. has empowered the PPA to undertake by itself the operation and management of the MICP or BAGATSING v. COMMITTEE ON to authorize its operation and management by PRIVATIZATION another by contract or other means, at its ISSUE: WON PETRON (oil refining business) is option a public utility within the purview of Sec 11, Art XII 1987 Constitution KILUSANG MAYO UNO LABOR CENTER v. GARCIA JR. HELD: YES. A "public utility" under the Service Commission the power of fixing the Constitution and the Public Service Law is one rates of public services as provided in Sec 16(c) organized "for hire or compensation" to serve of the Public Service Act. the public, which is given the right to demand its service. PETRON is not engaged in oil LTFRB is likewise authorized under EO 202 to refining for hire and compensation to process determine, prescribe, approve and periodically review and adjust, reasonable fares, rates and the oil of other parties. other related charges, relative to the operation of public land transportation services provided TADTAD v. GARCIA by motorized vehicles ISSUE: Can respondent EDSA LRT Corporation, Ltd., a foreign corporation own EDSA LRT III, a However, nowhere under the provision provide public utility? that PSC and/or LTFRB are authorized to delegate that power to a common carrier, a HELD: What private respondent owns are the transport operator, or other public service rail tracks, rolling stocks like the coaches, rail IN THIS CASE, the authority given by the stations, terminals and the power plant, not a LTFRB to the provincial bus operators to set a public utility. While a franchise is needed to fare range over and above the authorized operate these facilities to serve the public, they existing fare, is illegal and invalid as it is do not by themselves constitute a public utility. tantamount to an undue delegation of legislative What constitutes a public utility is not their authority. ownership but their use to serve the public.
The policy of allowing the provincial bus operators to change and increase their fares at In law, there is a clear distinction between the will would result not only to a chaotic situation “operation” of a public utility and the ownership but to an anarchic state of affairs. This would of the facilities and equipment used to serve the leave the riding public at the mercy of transport public. The right to operate a public utility may operators who may increase fares every hour, exist independently and separately from the every day, every month or every year, whenever ownership of the facilities thereof. it pleases them or whenever they deem it "necessary" to do so One can own said facilities without operating . them as a public utility, or conversely, one may LUZON STEVEDORING v. PUBLIC SERVICE operate a public utility without owning the COMMISSION facilities used to serve the public. The devotion ISSUE: WON Petitioners are engaged in public of property to serve the public may be done by service or is considered as public utility the owner or by the person in control thereof
who may not necessarily be the owner thereof.
REPUBLIC OF THE PHILIPPINES v. MANILA ELECTRIC CO. IN THIS CASE, there is no pretense that it In regulating rates charged by public utilities, actually cost more to handle the rice for the the State protects the public against arbitrary province than it did for the merchants with whom the special contracts were made. and excessive rates while maintaining the
efficiency and quality of services rendered. There was a clear discrimination made against However, the power to regulate rates does not the province. Discrimination is the thing which is give the State the right to prescribe rates which specifically prohibited and punished under the are so low as to deprive the public utility of a law. reasonable return on investment. Thus, the rates prescribed by the State must be one that PADUA v. RANADA yields a fair return on the public utility upon the From the foregoing, it is clear that a hearing is value of the property performing the service and not necessary for the grant of provisional toll one that is reasonable to the public for the rate adjustment. The language of LOI No. services rendered. While the power to fix rates 1334-A is not susceptible of equivocation. It is a legislative function, whether exercised by "directs, orders and instructs" the TRB to issue the legislature itself or delegated through an provisional toll rates adjustment ex-parte administrative agency, a determination of without the need of notice, hearing and whether the rates so fixed are reasonable and publication. just is a purely judicial question and is subject to the review of the courts. The intent of P.D. No. 1112 as to the extent of the TRBs power, Former President Marcos US v. QUINAJON further issued LOI No. 1334-A expressly ISSUE: WON respondents are guilty for the allowing the TRB to grant ex-parte provisional violation of Act No. 98 or temporary increase in toll rates.
HELD: YES. No common carrier shall directly or PAL v. CAB indirectly, by any special rate, rebate, ISSUE: Whether or not the CAB can issue a drawback, or other device, charge, demand Certificate of Public Convenience and Necessity collect, or receive from any person or persons, or TOP even though the prospective operator a greater or less compensation for any service does not have a legislative franchise? rendered in the transportation of passengers or property, between points in the Philippine HELD: Yes, as mentioned by the CAB, it is duly Islands, than he charges, demands, collects, or authorized to do so under Republic Act 776 and receives from any other person or persons, for a legislative franchise is not necessary before it doing a like or contemporaneous service, under may do so, since Congress has delegated the substantially similar conditions or authority to authorize the operation of domestic circumstances. air transport services to the CAB, an administrative agency. The delegation of such The law prohibits any common carrier from authority is not without limits since Congress making or giving any unnecessary or had set specific standard and limitations on unreasonable preference or advantage to any how such authority should be exercised. Public particular person, company, firm, corporation or convenience and necessity exists when the locality, or any particular kind of traffic, or to proposed facility will meet a reasonable want of subject any particular person, company, firm, the public and supply a need which the existing corporation, or locality, or any particular kind of facilities do not adequately afford. Thus, the traffic, to any undue or unreasonable prejudice Board should be allowed to continue hearing or discrimination whatsoever. the application, since it has jurisdiction over it provided that the applicant meets all the A vested right is some right or interest in the requirements of the law. property which has become fixed and established and is no longer open to doubt or ASSOCIATED COMMUNICATIONS v. NTC controversy. As far as the State is concerned, a A textual interpretation of Section 6 of P.D. No. CPC constitutes neither a franchise nor a 576-A yields the same interpretation that after contract, confers no property right, and is a December 31, 1981, a franchise is still mere license or privilege. The holder does not necessary to operate radio and television acquire a property right in the route covered, stations. Were it the intention of the law to do nor does it confer upon the holder any away with the requirement of a franchise after proprietary right/interest/franchise in the public said date, then the phrase (t)hereafter, highways. irrespective of any franchise, grant, license, permit, certificate or other forms of authority to COGEO-CUBAO OPERATORS v. CA operate granted by any office, agency or person Insofar as the interest of the State is involved, a (emphasis supplied) would not have been certificate of public convenience does not necessary because the first sentence of Section confer upon the holder any proprietary right or 6 already states that (a)ll franchises, grants, interest or franchise in the route covered licenses, permits, certificates or other forms of thereby and in the public highways authority to operate radio or television broadcasting systems shall terminate on RAYMUNDO v. LUNETA December 31, 1981. It is therefore already The Public Service Law, Act No. 3108, as understood that these forms of authority have amended, authorizes certificates of public no more force and effect after December 31, convenience to be secured by public service 1981. operators from the Public Service Commission. (Sec. 15 [i].) A certificate of public convenience RADIO COMMUNICATION v. NTC granted to the owner or operator of public ISSUE: Whether or not petitioner RCPI, a service motor vehicles, it has been held, grants grantee of a legislative franchise to operate a a right in the nature of a limited franchise. radio company, is required to secure a (Public Utilities Commission vs. Garviloch certificate of public convenience and necessity [1919], 54 Utah, 406.) before it can validly operate its radio stations including radio telephone services in the BATANGAS TRANSPORTATION v. ORLANES aforementioned areas The PSC has ample power and authority to make any and all reasonable rules and HELD: YES. Today, a franchise, being merely a regulations for the operation of any public utility privilege emanating from the sovereign power of and to enforce compliance therewith, failure of the state and owing its existence to a grant, is which permits the PSC to revoke the license. It subject to regulation by the state itself by virtue also has ample power to specify and define of its police power through its administrative what a reasonable compensation is for the agencies. Pangasinan transportation Co.- services rendered to the public. statutes enacted for the regulation of public utilities, being a proper exercise by the State of An autobus line is a public utility, a common its police power, are applicable not only to carrier, and an important factor in the business those public utilities coming into existence after conditions of the Islands, which is daily its passage, but likewise to those already branching out and growing very fast. It must established and in operation . apply for and obtain a license or permit from the PSC, and comply with defined terms and LUQUE v. VILLEGAS conditions before such a business can be operated. When license is granted, the operator HELD: Unquestionably, the parties herein must conform to, and comply with, all operated under an arrangement, commonly reasonable rules and regulations of the PSC. known as the "kabit system" whereby a person who has been granted a certificate of public he object and purpose of PSC, among others, is convenience allows another person who owns to look out for, and protect, the interests of the motor vehicles to operate under such franchise public, and, in the instant case, to provide it for a fee. A certificate of public convenience is a with safe and suitable means of travel over the special privilege conferred by the government. highways in question, in like manner that a Abuse of this privilege by the grantees thereof railroad would be operated under like terms and cannot be countenanced. conditions. For many and different reasons, it has never been the policy of a PSC to grant a The "kabit system" has been identified as one license for the operation of a new line of railroad of the root causes of the prevalence of graft and which parallels and covers the same field and corruption in the government transportation territory of another old established line, for the offices. Although not out rightly penalized as a simple reason that it would result in ruinous criminal offense, the kabit system is invariably competition, and would not be of any benefit or recognized as being contrary to public policy convenience to the public. and, therefore, void and inexistent under Article 1409 of the Civil Code. It is a fundamental SAN PABLO v. PANTRANCO principle that the court will not aid either party Considering the environmental circumstances of to enforce an illegal contract, but will leave both the case, the conveyance of passengers, trucks where it finds then. Upon this premise it would and cargo from Matnog to Allen is certainly not be error to accord the parties relief from their a ferry boat service but a coastwise or predicament. interisland shipping service. Under no circumstance can the sea between Matnog and BENITEZ v. SANTOS Allen be considered a continuation of the highway. While a ferry boat service has been Y TRANSIT v. NLRC considered as a continuation of the highway Conversely, where the registered owner is liable when crossing rivers or even lakes, which are for obligations to third parties and vehicles small body of waters - separating the land, registered under his name are levied upon to however, when as in this case the two satisfy his obligations, the transferee of such terminals, Matnog and Allen are separated by vehicles cannot prevent the levy by asserting an open sea it can not be considered as a his ownership because as far as the law is continuation of the highway. Respondent concerned, the one in whose name the vehicle PANTRANCO should secure a separate CPC for is registered remains to be the owner and the the operation of an interisland or coastwise transferee merely holds the vehicles for the shipping service in accordance with the registered owner. Thus, "Y" Transit Co., Inc. provisions of law. Its CPC as a bus cannot now argue that the buses could not be transportation cannot be merely amended to levied upon to satisfy the money judgment in include this water service under the guise that it favor of herein private respondents. However, is a mere private ferry service. this does not deprive the transferee of the right to recover from the registered owner any TEJA v. IAC damages which may have been incurred by the ISSUE: Whether the defendant can recover former since the x x x transfer or lease is valid damages against the plaintiff? and binding between the parties x x x.[7] Thus, had there been any real contract between "Y" Transit Co., Inc. and Yujuico Transit Co., Inc. or "Y" Transit Co., Inc. and Jesus Yujuico regarding the sale or transfer of the buses, the former may avail of its remedies to recover damages.
PECSON v. PECSON Whoever is the registered owner of a certificate of Public Convenience is the one liable. Certificate may be revoked on the ground of misrepresentation.
Appellant's right are furthermore reinforced by the fact that the transfer to it by Emerenciano was expressly approved by the Commission. For that matter, if it is conceded that Emerenciano was a mere dummy of his sisters, the Commission could properly cancel the certificates of Emerenciano on the ground of misrepresentation (see Commonwealth Act No. 146, section 16 [m]), Emerenciano not being the real party in interest. The Commission could then proceed to award to the Alatco new certificates of public convenience for the same lines of Legaspi-Daraga and Legaspi-Malabog.