TRANSPORTATION LAWS

MARITIME
COMMERCE
 Maritime Commerce
Governing Laws:
1. Code of Commerce
2. COGSA [Carriage of Goods by Sea
Act]
Other Applicable Laws:
1. PD 474
2. RA 1937 – Tariff and Customs Code
3. Act 2616 – Salvage Law
 Maritime Commerce
Governing Body in Marine Transportation
MARINA [Maritime Industry Authority]

General Functions of the MARINA:

1. Issue Certificates of Public Convenience for
the operation of domestic and overseas
water carriers
2. Register and issue certificates, licenses, or
documents necessary or incident thereto
 Maritime Commerce

Code of Commerce
Vessels
[Art. 573-585]
 Vessels
How ownership of MERCHANT VESSELS may be
acquired [Art. 573]:
1. By any means recognized by law [Art. 712 Civil
Code]:
a. By law [sale or dacion en pago]
b. By donation
c. By testate or intestate succession
d. In consequence of certain contracts
e. By tradition
2. By prescription:
a. 3 years – if possession thereof was in good faith
with just title duly recorded, or
b. 10 years – in the absence of above requisites
 Vessels
What kind of property is a vessel?
1. PERSONAL or MOVABLE
2. BUT – the
a. ownership thereof must be
evidenced by a certificate of
ownership, and
b. transfer thereof must be registered
in the proper registry [to bind 3rd
persons] (Art. 585)
 Vessels
Requisites for Legal Acquisition of a Merchant
Vessel [Art. 573]:
1. The mode of transfer must appear in a written
instrument
2. It must be recorded in the registry or vessels to bind
3rd persons:
a. Under EO 125 – transaction must be registered
with MARINA,
b. But, this is also being conducted by the PPA

Case: Rubiso v. Rivera [Oct 30, 1917]

 Code of Commerce

Persons Who Take Part

in Marine Commerce
[Art. 586-651]
Persons Who Take Part in Maritime
Commerce
1. Ship Owner – the owner of the vessel
2. Ship Agent – the person:
a. entrusted with provisioning of the vessel, or
b. who represents the vessel in the port where she
happens to be
3. Captain or Master – the one who governs the vessel
4. Sailing Mate – the second chief of the vessel
5. Second Mate – the one who takes command of the vessel in
case of disability or disqualification of captain or sailing
mate
6. Crew or Sailors – the persons who man the vessel and
those who perform other duties
 Ship Agent
Ship Agent [Art. 585]
The person:
1. entrusted with provisioning of a
vessel, or
2. who represents the vessel in the
port in which she happens to be
Captain or Master of a Vessel
Distinctions:
1. Captain - one who governs vessels:
a. that navigate the high seas, or
b. of large dimensions and importance [although
engaged in coastwise trade]
2. Master - one who commands smaller ships
engaged exclusively in the coastwise trade

Note:
For purposes of Maritime Commerce, “captain”
and “master” have the same meaning, both
being the chiefs and commanders of vessels
 Captain or Master of a Vessel
Qualifications under Art 609 of the Code of Commerce
1. Filipino
2. Legal capacity to bind himself
3. Proof that they have skill, capacity, and qualification
required to command and direct a vessel as
established by:
a. marine laws, ordinances or regulations
b. those of navigation
4. Not disqualified according to the same for the discharge
of the duties of that position

Case:
Coastwise v. CA, 245 SCRA 796 [July 12, 1995]
Captain or Master of a Vessel
General Functions of a Captain [Check
Art. 610]
1. General agent of the ship owner
2. Technical director of the vessel
3. Representative of the government in the
country under whose flag he navigates

Case:
Inter Orient v. NLRC
[235 SCRA 268, Aug 11, 1994]
Captain or Master of a Vessel
Books to be Carried by the Captain on
Board the Vessel Art. 612[3]
1. Logbook - where he shall enter everyday
everything significant about the voyage
2. Accounting Book - where he shall enter
all the amounts collected and paid for the
account of the vessel
3. Freight Book – where he shall record the
entry and exit of goods
Captain or Master of a Vessel
Case:
1. Haverton Shipping v. NLRC [135 SCRA 685]
2. Centennial v. Dela Cruz [Aug 22, 2008]

Q: What is the probative value of the entries in the

logbook?
A: It is an official record of entries made by a
person in the performance of a duty required by
law and are prima facie evidence of the facts
stated therein
Captain or Master of a Vessel
Duration of Responsibility of Captain for
Cargo on Board his Vessel [Art. 619]
1. FROM – the time it is turned over to him at
the dock or afloat along side the vessel at
the port of loading
2. UNTIL – he delivers it on the shore or on the
discharging wharf at the port of unloading
3. UNLESS –otherwise expressly agreed upon

Note: compare to Art. 1736 Civil Code

 Maritime Protest
Definition of Maritime Protest [BAR]
• It is a written statement under oath
• Made by the captain or master of the
vessel
• After the occurrence of an accident or
disaster
• In which the vessel or cargo is lost or
injured
• With respect to circumstances attending
such occurrence
 Maritime Protest
Purpose of a Maritime Protest - It is usually
intended to show:
1. That the loss or damage resulted from:
a. a peril of the sea, or
b. some other cause for which neither the
master or owner was responsible
2. It concludes with the protestation against
any liability of the owner for such loss or
damage
 Maritime Protest
Procedure - Duties of the Captain whose Vessel
has gone through a Hurricane or whose Cargo
has Suffered Damages or Averages [Art. 624]
1. He shall make a PROTEST thereon before a
competent authority at the first port he touches
within 24 hours following his arrival
2. He must RATIFY it within 24 hours when he arrives
at the place of destination where he must proceed
immediately with the proof of the facts
3. He must not open the hatches until all of the above
is done
 Discharge

Discharge Made by
Ship Agent or
Ship Owner
[Art. 603-607]
 Discharge by Ship Agent
Effects when Captain and Crew are
Discharged DURING the Voyage
[Art. 604]:
1. General Rule - they shall
CONTINUE to receive their salary
UNTIL their RETURN to the port
where the contract was made
2. Exception – unless there be just
motive for the discharge
 Discharge by Ship Agent
Discharge of Captain or Crew if Contract is for a DEFINITE
Voyage [Art. 605]:
1. Rule - he CANNOT be discharged until the fulfillment of the
contract
2. Exceptions – grounds for discharged before fulfillment of
contract [DIRTH]:
a. insubordination in serious matters
b. robbery
c. theft
d. habitual drunkenness, and
e. damage caused to the vessel or its cargo by malice or
manifest proven negligence
Cases:
1. Madrigal Shipping v. Ogilvie [Oct 30, 1958]
2. Wallem v. Minister of Labor [102 SCRA 835]
Discharge

Discharge
by Captain
[Art. 637]
 Discharge by Captain
Grounds for Discharging a Sailor or Crew Member
[PRIHAD] Art. 637
1. Perpetration of a crime which disturbs order on the vessel
2. Repeated offenses of insubordination, or want or
discipline, or non-fulfillment of service
3. Incapacity and repeated negligence in the fulfillment of the
service he should render
4. Habitual drunkenness
5. Any occurrence which incapacitates the sailor to perform
the work under his charge [except Art. 644]:
a. when illness of sailor is not due to his own fault, or
b. when sailor is injured in the service or defense of the
vessel
6. Desertion
 Supercargo
Definition of Supercargo [Black’s
Dictionary]
A person specially employed by the owner
of a cargo to:
1. take charge of and sell to the best
advantage, merchandise which has been
shipped,
2. purchase returning cargoes, and
3. receive freight, as may be authorized
Code of Commerce

Doctrine of
Limited Liability
[Art. 586-590]
Doctrine of Limited Liability
When Ship owner or Ship Agent shall be Civilly
Liable [Art. 586]
1. Art. 586:
a. For the acts of the CAPTAIN, and
b. For the obligations contracted by the CAPTAIN
to repair, equip, and provision the vessel
[provided the creditor proves that the amount
claimed was invested for the benefit of the
vessel]
2. Art. 587 - For the indemnities in favor of 3rd persons
which arise from the conduct of the CAPTAIN in the
care of the goods which the vessel carried
Doctrine of Limited Liability
How Ship Agent may Exempt Himself
from Liability:
By ABANDONING:
1. the vessel, and
2. ALL:
a. her equipments, and
b. the freightage it may have earned
during the voyage
 Doctrine of Limited Liability

Q: What distinguishes Maritime

Law from Civil Law or
Mercantile Law?
A: The REAL and
HYPOTHECARY nature of
Maritime Law
 Doctrine of Limited Liability
Real and Hypothecary Nature of a Maritime
Contract
A shipping transportation contract is “REAL &
HYPOTHECARY” in nature under Art. 587
which accords a ship owner or agent the right
of abandonment; and by necessary
implication, his liability is confined to that
which he is entitled as of right to abandon -
"the vessel with all her equipments and the
freight it may have earned during the voyage."
[Yangco v. Laserna, Oct 29, 1941]
 Doctrine of Limited Liability
ABANDONMENT
It is equivalent to an offer of the value of the
vessel, her equipment and freight earned
in return for an exemption from liability.
When ABANDONMENT is made in the
instances provided by law, it cannot be
refused.
 Doctrine of Limited Liability
Q: Can a CHARTERER make an
abandonment?
A: NO. He cannot be regarded as being
in the place of the owner or agent in
matters relating to the responsibility
pertaining to ownership and
possession of the vessel [Yeung
Sheung Exchange v. Urrutia, 12 PHIL
747]
 Doctrine of Limited Liability
When ABANDONMENT can be Made:
1. For civil liability to third persons arising from
the conduct of the captain in the vigilance
over the goods which the vessel carried
[Art. 587]
2. For the proportionate contribution of co-
owners or the vessel to a common fund for
the results of the acts of the captain [Art.
590]
3. For civil liability incurred by the ship owner
in case of collision [Art.837]
 Doctrine of Limited Liability
When the ship owner or ship agent may be
held liable for MORE than the value of the
vessel:
1. When the vessel is PROPERLY INSURED – the
insurance will take care of the liability the value
of w/c could be more than the value of the
vessel
2. When the liability for REPAIRS of the vessel
was incurred BEFORE the loss of such vessel
3. When the liability is one that arises from the
provisions of the LABOR CODE
 Doctrine of Limited Liability
When Abandonment CANNOT be Made
1. When the ship owner or ship agent is at
FAULT – he is deemed at fault when the
incident arose because of lack of proper
equipment of the vessel and technical
training of officers and crew
2. When the voyage is NOT maritime, but
only in a river bay, of gulf
3. When the vessel is NOT acting as a
common carrier but a private carrier
Code of Commerce

Special Contracts
of
Maritime Commerce
 Special Contracts of
Maritime Commerce

CHARTER PARTY

BILL of LADING

LOAN on BOTTOMRY or
RESPONDENTIA
 Special Contracts of
Maritime Commerce

CHARTER PARTY
[Art. 652-692]
 Charter Party
A contract by which an entire ship,
or some principal part thereof,
is let by the owner to another person
for a specified time or use,
in consideration of
the payment of a fee.
 Charter Party
Kinds of Charter Parties:
1. Contract of Affreightment – owner retains control of the
vessel; involves merely the use of shipping space on a
vessel, leased by the owner in part or as a whole, to carry
goods for others, and may either be a:
a. Time Charter – a contract to use the vessel for a
particular period of time
b. Voyage Charter – a contract for the hire of a vessel for
one or a series of voyage
2. Bareboat or Demise – involves the transfer of full possession
and control of the vessel for the period covered by the
contract; the entire command of the vessel, possession and
control over its navigation, including the master and crew are
turned over to the charterer
 Charter Party
Effect of Charter Party Agreement
1. Common Carrier
a. Voyage or Time Charter – retains its
status as a common carrier
b. Bareboat or Demise Charter – it
becomes a private carrier for the
particular charter
2. Private Carrier – retains its status as a
private carrier
 Charter Party
Q: What is meant by “owner pro hac
vice” of the vessel?
A: He is a demise or bareboat
charterer to whom the owner of
the vessel has completely and
exclusively relinquished
possession, command and
navigation of the vessel
 Charter Party
Formal Requirements of a Charter Party
[Art. 652]
1. Must be drawn in duplicates,
2. Signed by the contracting parties [or
by two witnesses at the request of
party who does not know or is not
able to sign]
 Charter Party
Substantial Requirements of a Charter Party [Art. 652]
1. Conditions freely stipulated
2. Kind, name and tonnage of vessel
3. Flag and port of registry
4. Name, surname and domicile of captain, ship agent, and
charterer
5. Port of loading or unloading
6. Capacity, weight or measure the parties respectively bind
themselves to load and transport, or whether it is total cargo
7. Freightage to be paid
8. Primage to be paid by captain
9. Days agreed for loading or unloading
10. Lay days and extra days to be allowed and the rate of demurrage
 Charter Party
Definition of Terms:
1. PRIMAGE – a small allowance or compensation
payable:
a. to the master or owner of the vessel for the use of
his cables and ropes to discharge the goods, and
b. to the mariners for lading and unlading in any port
2. DEMURRAGE – an amount stipulated in the charter
party to be paid by the charterer or shipper to the
shipowner for any DELAY in the sailing of his ship
3. LAYDAYS – number of days between loading and
departure
 Charter Party
Who can Rescind a
Charter Party
1.Charterer [Art. 688]
2.Ship owner [Art. 689]
 Rescission by Charterer
Ground Consequence
1. Abandonment of charter 1. He must pay ½ of freight
before loading agreed upon

2. Capacity of vessel not 2. He will be indemnified by

found to be in conformity owner for damages
with that stated in suffered
certificate of tonnage

3. Error in the statement of 3. He will be indemnified by

the flag under which owner for damages
vessel navigates suffered
 Rescission by Charterer
Ground Consequence
4. Non placement of vessel at 4. He will be indemnified by
disposal of charterer within owner for damages
period and manner agreed suffered
upon

5. Vessel returns to port of 5. If he unloads the vessel,

departure on account of owner shall have the right
risk from pirates, enemies to freight in full for voyage
or inclement weather out

6. Vessel makes port in order

to make repairs 6. He must dispose of the
goods
 Rescission by Owner
Ground Effect
[1] [1]
Failure of Charter is rescinded but he
charterer to must pay the charterer:
place cargo a. ½ of the freight
alongside stipulated, and
vessel at the b. demurrage for the lay
days and extra lay days
termination of
extra lay days
 Rescission by Owner
Ground Effects
[2]
[2] 1. Charter is rescinded if the buyer of
Sale of vessel the vessel has loaded the vessel for
his own account BUT seller/owner
before the must indemnify charterer for
charterer damages suffered
has begun 2. Charter is NOT rescinded if buyer
to load the has NOT loaded the vessel for his
vessel own account BUT the seller shall
indemnify the buyer if he did not
inform the buyer of the charter at
the time of making the sale
 Distinctions
Ordinary Lease Contract Charter Party

If the lease is for a definite If the charter is for a definite

period, the lessee
cannot give terminate
the lease by just paying
a portion of the amount
agreed upon
period, the charterer may
rescind the charter party
by paying half of the
freightage

If the leased property is If the vessel is sold to another,

sold to one who knows
of the existence of the
lease contract, the new
owner of the property
must respect the lease
the new owner cannot be
compelled to respect the
CP for as long as the new
owner can load the vessel
with his own cargo
Special Contracts of
Maritime Commerce

Bill of Lading
[Art. 350-375,
709-718]
 Bill of Lading
Definition [Black’s Law Dictionary]
• An instrument in writing
• Signed by a carrier or his agent
• Describing the freight so as to identify it
• Stating the name of the consignor, the terms of
the contract of carriage, and
• Agreeing or directing that the freight be
delivered to the order or assigns of a specified
person at a specified place
 Bill of Lading
2-Fold Character of a BL
1. A RECIEPT which:
a. specifies the quantity, condition and character of the
goods received, and
b. recites the date and place of shipment and the fees
paid by the shipper
2. It is evidence of a CONTRACT by which the 3 parties
[shipper, carrier, consignee] undertake specific
responsibilities and assume stipulated obligations; also
fixes the route, destination, freight charges, and
stipulates the rights and obligations assumed by the
parties [Art. 353]
 Bill of Lading
Effect of Issuance by Carrier of an
UNSIGNED Bill of Lading when
ACCEPTED by Shipper or Consignee:
Acceptance with full knowledge of its
contents gives rise to the presumption
that the same was a perfected and
binding contract [Keng Hua vs CA 286
SCRA 257]
 Bill of Lading
Q: Is a Bill of Lading indispensable to a
contract of carriage?
A: NO, for as long as there is a
meeting of the minds of the parties,
a contract of carriage exists. But
under Art. 350, the shipper or
carrier may mutually demand that a
bill of lading be made.
 Bill of Lading
Q: What must be done to the Bill of Lading
upon fulfillment of the contract of
transportation?
A: It must be RETURNED to the carrier who
may have issued it, and by virtue of the
exchange of the BL for the object
transported, the respective obligations
and actions shall be considered as
cancelled
 Bill of Lading
Q:What if the shipper cannot
return the bill of lading to the
shipper due to loss or any
other cause?
A: Shipper must give the carrier
a receipt for the goods
delivered
 Bill of Lading
Q: What is the presumption if the carrier does
not hold the bill of lading after the fulfillment
of the contract of transportation?
A: The carrier DID NOT DELIVER the goods to
the consignee. Therefore it will be liable for
the merchandise stated in the bill of lading.
Burden of proof is on the carrier to establish
actual delivery of the merchandise called for
in the bill of lading.
Case:
Macam v. CA [Aug 25, 1999]
 Bill of Lading
Transshipment
The act of taking cargo from one
ship and loading it on another

*It is immaterial whether the same

person or entity owns the other
vessel
 Bill of Lading
Effect when Transshipment is
without Legal Excuse:
1. It is a violation of the contract of
carriage
2. Carrier shall be liable to the shipper
if cargo is lost even by a cause
otherwise excepted
 Bill of Lading
Period for Bringing a Claim Against the Carrier
[Art. 366]
1. IMMEDIATELY UPON RECEIPT of the package – if
damage is APPARENT from exterior of package
[for such purpose, a VERBAL CLAIM made
immediately is SUFFICIENT compliance with the
law]
2. WITHIN 24 HOURS following RECEIPT of package
– if the damage CANNOT BE KNOWN from
exterior of package
*All Claims are EXTINGUISHED – if consignee
RECEIVES the merchandise, and PAYS the freight
charges WITHOUT PROTEST
 Bill of Lading
Q: What is the PURPOSE of the above Rules?
A: To compel the consignee of goods
entrusted to a carrier to make prompt
demand for settlement of alleged damages
suffered by the goods while in transport, so
that the carrier will be enabled to verify all
claims, fix responsibility and secure
evidence as to the goods while the matter is
still fresh in the minds of the parties [Roldan
v. Lim Ponzo 37 PHIL 285]
 Bill of Lading
Q: When shall the above period commence
to run?
A: When the goods are ACTUALLY turned
over by the carrier and RECEIVED by
the consignee

Case:
New Zealand v. Chua Joy [97 PHIL 646]
 Bill of Lading
Q: Did the prescriptive periods under
the Civil Code repeal Art. 366 of
Code of Commerce?
A: NO. The limitations of actions
mentioned in the Civil Code are
without prejudice to those specified
in the Code of Commerce [Art. 1148
New Civil Code]
 Bill of Lading
Prescriptive Period to File a Case in
Court :
1. If there is a bill of lading – 10 years [Art.
1144 – based on a written contract]
2. If there is NO bill of lading – 6 years [Art.
1145 – based on a an oral or quasi-
contract]
3. If it involves overseas trading – 1 year
[COGSA]
 Special Contracts of
Maritime Commerce

Loan on Bottomry or
Respondentia
[Art. 719-731]
 Loan on Bottomry or
Respondentia
Loan on Bottomry or Respondentia [Art. 719]
1. A loan:
a. Under which any condition whatsoever,
b. The repayment of the sum loaned and of the
premium stipulated,
c. Depends upon the safe arrival of the effects,
d. In the port on which it is made
2. A loan with things exposed to maritime risks as
collateral, to be paid if the collateral are safely
transported, and the lender shall lose his money
if the collateral is lost
 Loan on Bottomry or
Respondentia
It is a loan on:
1. Bottomry – if the security is
a vessel
2. Respondentia – if the
security is cargo
 Loan on Bottomry or
Respondentia
Characteristics
1. It is a loan the security of which is
the vessel itself or the cargo
loaded on the vessel
2. It is conditioned on the safe arrival
at the port where the loan was
made
3. The vessel must be exposed to
maritime peril
 Distinctions
Ordinary Loan
1. May or may not have a
collateral
2. Collateral may be any real
or personal property
3. Absolutely repayable
4. Need not be in writing
5. Need not be registered to
be binding on 3rd persons
6. Loss of collateral does not
extinguish loan
Loan on B or R
1. Must have a collateral
2. Collateral must be a vessel
or cargo subject to marine
risk
3. Payment depends on safe
arrival of collateral at port
of loan
4. Must be in writing
5. Must be registered to bind
3rd persons
6. Loss of collateral
extinguishes loan
Effects of Total Loss of Collateral on
the Loan on B or R [Art. 731]

The loan is EXTINGUISHED, provided:

1. It arose from an accident of the sea at
the time and during the voyage
designated in the contract
2. It is proven that the cargo was on board
[in cases of loan on R]
Effects of Total Loss of Collateral on
the Loan on B or R [Art. 731]
The loan is NOT extinguished when:
1. The loss was caused by the:
a. inherent defect of the thing,
b. malice of the borrower,
c. barratry of the captain, or
d. damages suffered by the vessel as a
consequence of being engaged in contraband
2. The cargo loaded on the vessel is different from
that agreed upon, UNLESS the change should
have been made by reason of force majeure
 Loan on Bottomry or
Respondentia
Barratry
• Any willful misconduct on the part of
the master or crew,
• in pursuance of some unlawful or
fraudulent purpose,
• without the consent of the owners, and
• to the prejudice of the owner’s interest
 Code of Commerce

Risks, Damages and

Accidents of
Maritime Commerce
Risks, Damages and Accidents
of Maritime Commerce

Averages
[Art. 806-816,
665-677, 732]
 Averages
What are Considered as Averages [Art. 806]
1. All extraordinary or accidental expenses which may be
incurred during the voyage for the preservation of
the vessel, cargo, or both
2. All damages or deterioration:
a. which the vessel may suffer:
i. from the time she puts to sea at the port of
departure
ii. until she casts anchor at the port of destination
b. suffered by the goods:
i. from the time they are loaded in the port of
shipment
ii. until they are unloaded in the port of their
consignment
 Averages
What are Considered Ordinary or Petty Expenses [Art.
807]
The petty and ordinary expenses incident to navigation such
as those of:
1. pilotage of coast and ports,
2. lighterage,
3. towage,
4. anchorage,
5. inspection,
6. health,
7. quarantine,
8. lazaretto, and
9. other so called port expenses, costs of barges, and
unloading, until the goods are placed on the wharf, and
Other usual expenses of navigation
 Averages
Who Shall Defray or Reimburse the
Ordinary or Petty Expenses [Art.
807]
1. General Rule – the Ship owner
2. Exception – unless there is an
express agreement to the contrary
 Averages
Kinds of Averages [Art. 808]
1. Simple or Particular
2. General
 Particular Average
Definition [Art. 809]
All the expenses and damage caused to the vessel
or to her cargo which have NOT inured to the
common benefit and profit of ALL the persons
interested in the vessel and her cargo

Q: Who bears the loss?

A: The OWNER of the things which gave rise to
the expenses or suffered the damage
[Art. 810]
 General Average
Definition [Art. 811]
All the damages and expenses which are
DELIBERATELY CAUSED in order to save the
vessel, her cargo, or both at the same time
from a REAL KNOWN risk

Q: Who bears the loss?

A: All the persons having an interest in the vessel
and cargo therein at the time of the occurrence
of the average shall contribute
 General Average
Requisites of a General Average
1. There must be a common danger, a danger in
which ship, cargo and crew all participate
2. For the common safety or for the purpose of
avoiding an imminent peril, part of the vessel
or cargo or both is sacrificed deliberately
3. This attempt to avoid the imminent peril must
be successful in a sense that the vessel and
some of the cargo are saved
4. The expenses were incurred or damages were
afflicted after taking the proper legal steps and
authority
 General Average
Jason Clause [Rule D, York-Antwerp Rules]
Rights to contribution in general average:
*shall not be affected, though the event which
gave rise to the sacrifice or expenditure
may have been due to the fault of one of
the parties to the adventure; but
*this shall not prejudice any remedies which
may be open against that party for such
clause
 Distinctions
General Particular
1. Deliberately caused in 1. May be due to causes
order to save the vessel other than a deliberate act
or cargo or both
2. Inures to the benefit of 2. Does not inure to the
those interested in the common benefit of all
vessel or her cargo persons interested in the
vessel and her cargo
3. Shall be shared and 3. Shall be borne by the
contributed to by all owner of the things
persons benefited damaged
 Averages
Art. 677. Effect of a Declaration of War or Blockade on
a Charter Party:
1. The charter party shall remain in force – if the captain
should not have any instruction from the charterer
2. Captain must proceed to the nearest safe and neutral
port
3. At said port- captain must request and await orders
from the shippers
4. Expenses and salaries accruing during detention in
said port shall be paid as general average
5. If, by order of the shipper, the cargo should be
discharged at the port of arrival, the freight for the
voyage out shall be paid in full
 Averages
Art. 677. Effect of a Declaration of War or
Blockade on a Charter Party:

Cases
1. International Harvester v. Hamburg
American Line [42 PHIL 845]
2. Compagnie de Commerce v. Hamburg
Amerika [36 PHIL 590]
Risks, Damages and Accidents
of Maritime Commerce

Arrival Under Stress

[Art. 819-821]
 Arrival Under Stress
Arrival Under Stress [Art. 819]
The arrival of the vessel at the nearest and most
convenient port
Because the vessel CANNOT continue the trip to
the port of destination
On account of:
1. Lack of provisions,
2. Well founded fear of seizure, privateers or
pirates, or
3. By reason of any accident of the sea
disabling the vessel to navigate
 Arrival Under Stress
Ground When Not Considered Lawful
[Art. 820]

1. If the lack of provisions should arise

[First Ground] from the failure to take the
Lack of necessary provisions for the voyage
according to the usage and customs,
provisions
or

2. If they should have been rendered

useless or lost through bad stowage
or negligence in their care
 Arrival Under Stress
Ground When Not Considered Lawful
[Art. 820]

[Second Ground] If the risk of the enemies, privateers, or

Well founded pirates should not have been:
fear of 1. well known,
seizure, 2. manifest, and
privateers or 3. based on positive and
pirates provable acts
 Arrival Under Stress
Ground When Not Considered Lawful
[Art. 820]
[Third Ground]
By reason of 1. If the defect of the vessel should
any accident have arisen from the fact that she
of the sea was not repaired, rigged, equipped,
disabling the and prepared in a manner suitable for
vessel to voyage, or from some erroneous
navigate
orders of the captain
2. Whenever malice, negligence, lack of
foresight, or want of skill on the part
of the captain exists in actually
causing the damage
Risks, Damages and Accidents
of Maritime Commerce

Collisions
[Art. 827-838]
 Collisions
Definitions:
1. In a strict sense:
a. Collision – the impact of 2 vessels, both or
which are moving
b. Allision - the striking of a moving vessel
against one that is stationary
2. In a broad sense – collision includes allision,
and perhaps another species of encounters
between vessels, or a vessel and other
floating, though non-navigable object
Liability in Case of Collision
Who is at Fault Liability

Said vessel shall be liable for:

One [1] 1. damage caused to the
vessel innocent vessel, and
2. damages suffered by the
owners of the cargo of:
a. the innocent vessel, and
b. its own vessel
Liability in Case of Collision
Who is at Fault Liability
Both
vessels 1. Each vessel must bear its
own loss, and
[Art. 827]
2. Both shipowners shall be
& solidarily liable to the
It cannot be shippers for damages
determined suffered
which vessel
[Art. 831]
Liability in Case of Collision
Who is at Fault Liability

Said vessel shall be liable for:

A 3rd vessel 1. damage caused to 2 the
innocent vessels, and
[Art. 831]
2. damages suffered by the
owners of the cargo of:
a. the 2 innocent vessels,
and
b. its own vessel
Liability in Case of Collision
Who is at Fault Liability

None None – each one must

[Fortuitous bear his own loss
event]
[Art. 830]
 Collisions
Error in Extremis
Where a navigator,
suddenly realizing that a collision is imminent by no fault of
his own,
in confusion and excitement of the moment,
does something which contributes to the collision, or
omits to do something by which the collision may be
avoided,

Such act or omission is ordinarily considered to be in

extremis, and
The ordinary rules of strict accountability do NOT apply
 Collisions
Q: When does the rule of “error in extremis”
apply?
A: It must appear that there was an
imminent danger and it is the actual risk
of danger and not apprehension merely
that determines the question whether the
error is one in extremis
 Collisions
Doctrine of Inscrutable Fault:
The court can see that a fault has been
committed,
But is unable from the conflict of testimony,
or otherwise, to locate it [the fault]
Hence, when it is impossible to determine to
what direct and specific acts the collision
is attributable, it is a case of damage
arising from a cause that is inscrutable
 Collisions
Q:What kind of AVERAGE is
damage caused by a collision
due to a storm or force
majeure?
A: The injury shall be considered
as a particular average of the
vessel run into [Art. 832]
 Collisions
Q:Can the ship owner raise the
defense that he exercised the
diligence of GFOF in the selection
and supervision of the captain?

Case:
Manila Steamship v. Abdulhaman
[100 PHIL 32]
 Code of Commerce
Obsolete Articles of the Code of Commerce
608
613
635
642
645
649
650
651
Maritime Commerce
CARRIAGE OF GOODS
BY SEA ACT
[COGSA]
Public Act 521, 74th US
Congress
 COGSA
Contracts Covered by the COGSA
ALL contracts:
1. for the carriage of GOODS by SEA
2. to and from Philippine Ports in FOREIGN
Trade

Case:
American Insurance v. Compania Maritima
[21 SCRA 998]
 COGSA
Q: What is the effect of the COGSA on
our Maritime Laws?
A: It shall not:
1. repeal any existing provision of
the Code of Commerce which is
now in force, or
2. limit its application
 COGSA
Procedure to be Undertaken by Shipper or
Consignee in Case of Loss or Damage of Cargo
[Sec. 3(6)]
A NOTICE of LOSS or DAMAGE and the general
nature of the such loss or damage IN WRITING,
must be given to the CARRIER or his agent:
1. at the PORT of DISCHARGE, or
2.at the TIME of REMOVAL of the goods into the
custody of the person entitled to delivery thereof
[such removal shall be prima facie evidence of
delivery by the carrier of the goods as described in
the bill of lading], or
3.if the loss or damage is NOT apparent – the
notice must be given within 3 days of delivery
 COGSA
Prescriptive Period of Actions Under
COGSA [Sec. 3[6](4)]
Any action against the carrier must
be brought within one [1] year
after:
1. the delivery of the goods, or
2. the date when the goods should
have been delivered
 COGSA
Q: What is the effect of failure to give
the required NOTICE of LOSS to
the carried within the period
prescribed?
A: This shall not affect or prejudice the
right of the shipper to bring the suit
within the one [1] year period [EE
Elser vs CA, Nov 29, 1954]
 COGSA
Q: What is the effect of failure to BRING THE
ACTION within one [1] year period
A: The carrier and the ship shall be
DISCHARGED from all liability from such
loss or damage

Cases:
1. Chua Kay v. Everett Steamship [May 27,
1953]
2. Maritime Agencies v. CA [187 SCRA 346]
 COGSA
Q: What law shall prevail, with respect to
prescriptive periods? Civil Code or
COGSA?
A: The New Civil Code did NOT impliedly
repeal the period of prescription under
the COGSA. As a SPECIAL LAW the
COGSA prevails over the general
provisions of the Civil Code on
prescription of actions [Maritime
Agencies v. CA 187 SCRA 346]
 COGSA
Q: What is the effect of
EXTRAJUDICIAL DEMAND
made to the carrier?

Case:
DOLE v. Maritime Co. [148 SCRA
118]
 COGSA
Instances Where the One [1] Year
Prescriptive Period Under the COGSA
is INTERRUPTED:
1. In case an action has been already
filed in court [F.H. Stevens v.
Nordeutscher Lloyd [6 SCRA 180]
2. When there is an express agreement
to the effect [Universal Shipping v. IAC
[188 SCRA 170]
 COGSA
Q: From what point should the 1 year prescriptive
period be counted?
A: It depends:
1. If delivery was made – from the date of
delivery [includes delivery to arrastre
operator]
2. If NO delivery – from the date when the
goods should have been delivered

Cases:
1. Insurance v. Philippine Ports [July 18, 1965]
2. Ang v. American Steamship [Jan 27, 1967]
 COGSA
Effects of Prescriptive Period Under the COGSA
on the Liability of the Insurer
1. ONLY the carrier’s liability is extinguished if no
suit is brought within one [1] year from delivery
of goods
2. BUT the liability of the insurer is NOT
extinguished
3. Insurers are governed by the Insurance Code
and not the COGSA [Mayer Steel v. CA 274
SCRA 432]
4. BUT the insurer CANNOT file an action against
the carrier beyond the one [1] year prescriptive
period [Filipino Merchants v. CA 179 SCRA 638]
 COGSA
Limit of the Liability of the Carrier for Loss or Damage to
Goods Transported Sec. 4[5](1):
1. $500 per package – UNLESS the nature and value of such
goods have been declared by the shipper before shipment
and inserted in the bill of lading
2. This declaration, if embodied in the bill of lading,shall be
prima facie evidence, BUT shall not be conclusive on the
carrier
3. Shipper and carrier may agree on another maximum amount
but should not be less than $500
4. Carrier can NOT be liable for:
a. MORE than the amount of damage ACTUALLY
sustained
b. Loss or damage to goods if the value thereof has been
knowingly and fraudulently MISSTATED by the shipper in
the bill of lading
Maritime Commerce

Bar Questions
 Bar Questions
2009, Part I, #VII
MV Juana, owned by GTSI, left Manila for Cebu laden with, among other
goods, 10,000 TV sets consigned to R.
When the vessel was about 10 miles from Manila, the captain heard on the
radio that a typhoon which, as announced by PAG-ASA, was on its way
out of the country, had suddenly veered back into RP territory.
The captain realized that MV Juana would traverse the storm’s path, but
decided to proceed with the voyage. True enough, the vessel sailed into
the storm. Captain ordered the jettison of the 10,000 TV sets in order to
lighten the vessel and make it easier to steer it out of the typhoon path.
Eventually, the vessel, with its crew intact, arrived safely in Cebu.
[a] Will you characterize the jettison of R’s TV sets as an average? If so,
what kind of an average, and why? If not, why not? (3%)
[b] Against whom does R have a cause of action for indemnity of his lost TV
sets? Explain. (3%)
 Bar Questions
2008 # IX
On October 30, 2007, M/V Pacific, a
Philippine registered vessel owned by
Cebu Shipping Company (CSC), sank on
her voyage from Hong Kong to Manila.
Empire Assurance Company (Empire) is
the insurer of the lost cargoes loaded on
board the vessel which were consigned to
Debenhams Company. After it indemnified
Debenhams, Empire as subrogee filed an
action for damages against CSC.
 Bar Questions
2008 # IX, cont…
a. Assume that the vessel was seaworthy. Before
departing, Captain was advised by the Japan
Meteorological Center that it was safe to travel to its
destination. But while at sea, the vessel received a
report of a typhoon moving within its general path. To
avoid the typhoon, Captain changed course. However,
it was still at the fringe of the typhoon when it was
repeatedly hit by huge waves, foundered and
eventually sank. The captain and the crew were saved
except three (3) who perished. Is CSC liable to
Empire? What principle of maritime law is applicable?
Explain. (3%)
 Bar Questions
2008 # IX, cont…
b. Assume the vessel was not seaworthy as in
fact its hull had leaked, causing flooding in
the vessel. Will you answer be the same?
Explain. (2%)
c. Assume the facts in question (b). Can the
heirs of the three (3) crew members who
perished recover from CSC? Explain fully.
(3%)
 Bar Questions
2004 Bar # 10
B. AA entered into a contract with BB thru CC to
transport ladies' wear from Manila to France with
trans shipment at Taiwan. Somehow the goods
were not loaded at Taiwan on time. Hence, when
the goods arrived in France, they arrived "off-
season" and AA was paid only for one-half the
value by the buyer. AA claimed damages from the
shipping company and its agent. The defense of
the respondents was prescription.
Considering that the ladies' wear suffered "loss of
value," as claimed by AA, should the prescriptive
period be 1 year under the COGSA, or 10 years
under the Civil Code? Explain briefly. (5%)
 Bar Questions
2003 # X
For the transportation of its cargo from
the Port of Manila to the Port of Kobe,
Japan, Osawa chartered "bareboat"
M/V Ilog of Karagatan Corporation.
M/V Ilog met a sea accident resulting
in the loss of the cargo and in the
death of some of the seamen manning
the vessel. Who should bear the loss
of the cargo and the death of the
seamen? Why? [4%]
 Bar Questions
2003 # XII
M/V Ilog de Manila with a cargo of 500 tons of
iron ore left the Port of Zamboanga bound
for Manila. For one reason or another, M/V
Ilog de Manila hit a submerged obstacle
causing it to sink along with its cargo.
A salvor, Salvador, was contracted to refloat
the vessel for P1 million. What kind of
average was the refloating fee of P1
million, and for whose account should it
be? Why? [4%]
 Bar Questions
2000 # XIII [a]
X Shipping spent almost a fortune in refitting and
repairing its luxury passenger vessel, the MV
Marina, which plied the inter-island routes of from
La Union to Davao City. The MV Marina met an
untimely fate during its post-repair voyage. It sank.
The investigation showed that the captain alone
was negligent. There were no casualties in that
disaster.
Faced with a claim for the payment of the refitting and
repair, X Shipping asserted exemption from liability
on the basis of the hypothecary or limited liability
rule under Art. 587 of the Code of Commerce. Is X
Shipping's assertion valid? Explain. (3%)
 Bar Questions
2000 # XIII [b]
A vessel owned by SF Shipping was on its way from Manila to
Cebu when it accidentally, and without fault or negligence of
anyone on the ship, hit a huge floating object. The accident
caused damage to the vessel and loss of cargo. In order to
lighten the vessel and save it from sinking and in order to
avoid risk of damage to or loss of the rest of the cargo (none
of which was located on the deck), some had to be
jettisoned.
SF had the vessel repaired in Cebu. SF later filed a complaint
demanding all the other cargo owners to share in the total
repair costs incurred by SF and in the value of the lost and
jettisoned cargoes. The shippers however contend that,
under the Code of Commerce, each damaged party should
bear its or his own damage and those that did not suffer any
loss or damage were not obligated to make any contribution
in favor of those who did. Is this contention valid? Explain.
(2%)
 Bar Questions
2000 # XIV [a]
MV Mariposa, owned by the MNC, sank. More than 200
pax perished. Evidence showed that the captain
ignored typhoon bulletins issued by PAGASA
during the 24-hour period immediately prior to the
vessel's departure. The bulletins warned all types
of vessels to avoid the typhoon's expected path. To
make matters worse, the Captain took more load
than was allowed for the ship's rated capacity.
Sued for damages by the victims' relatives, MNC
contended that: 1) its liability, if any, had been
extinguished with the sinking of MV Mariposa; and
2) assuming it had not been so extinguished, such
liability should be limited to the loss of the cargo.
Are these contentions meritorious? (3%)
 Bar Questions
2000 # XIV [b]
RC imported computer motherboards from the USA and
had them shipped to Manila aboard an ocean-going
cargo ship owned by BSC. When the cargo arrived
at the Manila seaport and delivered to RC, the crate
appeared intact; but upon inspection of the contents,
RC discovered that the items inside had all been
badly damaged. He did not file any notice of damage
or anything with anyone, least of all with BSC.
What he did was to proceed directly to your office to
consult you about whether he should have given a
notice of damage and how long a time he had to
initiate a suit under the provisions of the COGSA.
What would your advice be? (2%)
 Bar Questions
1999 # XIV
Thinking that the typhoon was still 24 hours away, MV
Pioneer left port. That was a miscalculation of the
typhoon signals by both the ship-owner and captain as
the typhoon came earlier and overtook the vessel. The
vessel sank and a number of pax disappeared with it.
Relatives of the missing pax claimed damages against the
ship-owner. The ship-owner set up the defense that
under the doctrine of limited liability, his liability was co-
extensive with his interest in the vessel. As the vessel
was totally lost, his liability had also been extinguished.
a. How will you advice the claimants? Discuss the doctrine
of limited liability in maritime law. (3%)
b. Assuming that the vessel was insured, may the claimants
go after the insurance proceeds? (3%)
 Bar Questions
1998 # I
1. What do you understand by a
"bill of lading?" [2%]
2. Explain the two-fold character of
a "bill of lading." [3%]
 Bar Questions
1998 # III
A severe typhoon was raging when the vessel SS
Madam collided with M/V Princess. It is
conceded that the typhoon was the major
cause of collision, although there was a very
strong possibility that it could have been
avoided if the captain of the SS Madam was
not drunk and the captain of the M/V Princess
was not asleep at the time of collision.
Who should bear the damages to the vessels
and their cargoes? [5%]
 Bar Questions
1997 # XVII
Explain these two doctrines in Maritime
accidents: [5%]
(a) The Doctrine of Inscrutable Fault;
and
(b) The Doctrine of Limited Liability
 Bar Questions
1995 # I
What is the prescriptive
period for actions involving
lost or damaged cargo under
the COGSA?
 Bar Questions
1995 # XIII
1. Two vessels coming from opposite directions
collided with each other due to fault imputable to
both. What are the liabilities of the 2 vessels with
respect to the damage caused to them and their
cargoes? Explain.
2. If it cannot be determined which of the 2 vessels
was at fault resulting in the collision, which party
should bear the damage caused to the vessels
and the cargoes? Explain.
3. Which party should bear the damage to the
vessels and the cargoes if the cause of the
collision was a fortuitous event? Explain
 Bar Questions
1994 # XI
Toni, a copra dealer, loaded 1,000 sacks of copra
on board the vessel M/V Tonichi (owned by Ichi)
for shipment from Puerto Galera to Manila. The
cargo did not reach Manila because the vessel
capsized and sank with all its cargo.
When Toni sued Ichi for damages based on breach
of contract, the latter invoked the "limited liability
rule."
1) What do you understand of the "rule" invoked by
Ichi? (2%)
2) Are there exceptions to the "limited liability rule"?
(3%)
 Bar Questions
1993 # XIV
JRT entered into a contract with C of Japan to export anahaw
fans. As payment, a LC was issued to JRT by C. The LC
prohibited transhipment. JRT then contracted a shipping
agent to ship the anahaw fans through K Lines, specifying
the requirements of the LC. However, the BL issued by K
contained an entry indicating transhipment in HKG. JRT
personally received and signed the BL and despite the
entries, he delivered the corresponding check to K lines in
payment of the freight.
The shipment was delivered at the port of discharge but C
refused to accept the anahaw fans because there was
transhipment. JRT contended that there was no
transhipment since the goods were transferred in HKG from
MV Pacific, the feeder vessel, to MV Oriental, a mother
vessel. The same cannot be considered transhipment
because both vessels belong to the same shipping company.
(a) Was there transhipment? Explain.
 Bar Questions
1993 # XIV
(b) JRT further argued that assuming there
was transhipment, it cannot be deemed
to have agreed thereto even if he signed
the BL containing such entry because it
had made known to K shipping lines
from the start that transhipment was
prohibited under the LC and that,
therefore, it had no intention to allow
transhipment of the subject cargo. Is the
argument tenable? Reason.
 Bar Questions
1992 # V
For a cargo of machinery shipped from abroad to a sugar
central in Negros, the Bill of Lading stipulated "To
Shipper's Order," with notice of arrival to be
addressed to the Central. The cargo arrived at its
destination and was released to the Central without
surrender of the B/L on the basis of the Central's
undertaking to hold the carrier free and harmless
from any liability.
Subsequently, a Bank to whom the Central was indebted,
claimed the cargo and presented the original of the
B/L stating that the Central had failed to settle its
obligations with the Bank.
Was there misdelivery by the carrier to the sugar central
considering the non-surrender of the B/L? Why? [5%]
 Bar Questions
1991 XIII
M/T X collided with M/V Z which sank and many pax drowned and
died. All cargo was lost. The collision occurred at night but the
sea was calm, the weather fair and visibility was good. Prior to
the collision and while still 4 miles apart, M/V Z already sighted
M/T X on its radar screen. M/T X had no radar equipment. As for
speed, M/V Z was twice as fast as M/T Manila.
At the time of the collision, M/T X failed to follow Rule 19 of the
International Rules of the Road which requires 2 vessels
meeting head on to change their course by each vessel steering
to right so that each vessel may pass on the left of the other.
M/T X signaled that it would turn left and steered accordingly,
thus resulting in the collision. M/V Z's captain was off-duty and
was having a drink at the ship's bar at the time of the collision.
a) Who would you hold liable for the collision?
b) If M/V Z was at fault, may the heirs of the pax who died and the
owners of the cargoes recover damages from the owner of said
vessel?
 Bar Questions
2009, Part I, #VII
MV Juana, owned by GTSI, left Manila for Cebu laden with, among other
goods, 10,000 TV sets consigned to R.
When the vessel was about 10 miles from Manila, the captain heard on the
radio that a typhoon which, as announced by PAG-ASA, was on its
way out of the country, had suddenly veered back into RP territory.
The captain realized that MV Juana would traverse the storm’s path, but
decided to proceed with the voyage. True enough, the vessel sailed
into the storm. Captain ordered the jettison of the 10,000 TV sets in
order to lighten the vessel and make it easier to steer it out of the
typhoon path. Eventually, the vessel, with its crew intact, arrived
safely in Cebu.
[a] Will you characterize the jettison of R’s TV sets as an average? If so,
what kind of an average, and why? If not, why not? (3%)
[b] Against whom does R have a cause of action for indemnity of his lost
TV sets? Explain. (3%)
 Bar Questions
2008 # IX
On October 30, 2007, M/V Pacific, a
Philippine registered vessel owned by
Cebu Shipping Company (CSC), sank on
her voyage from Hong Kong to Manila.
Empire Assurance Company (Empire) is
the insurer of the lost cargoes loaded on
board the vessel which were consigned to
Debenhams Company. After it indemnified
Debenhams, Empire as subrogee filed an
action for damages against CSC.
 Bar Questions
2008 # IX, cont…
a. Assume that the vessel was seaworthy. Before
departing, Captain was advised by the Japan
Meteorological Center that it was safe to travel to its
destination. But while at sea, the vessel received a
report of a typhoon moving within its general path. To
avoid the typhoon, Captain changed course. However,
it was still at the fringe of the typhoon when it was
repeatedly hit by huge waves, foundered and
eventually sank. The captain and the crew were saved
except three (3) who perished. Is CSC liable to
Empire? What principle of maritime law is applicable?
Explain. (3%)
 Bar Questions
2008 # IX, cont…
b. Assume the vessel was not seaworthy as
in fact its hull had leaked, causing
flooding in the vessel. Will you answer be
the same? Explain. (2%)
c. Assume the facts in question (b). Can the
heirs of the three (3) crew members who
perished recover from CSC? Explain fully.
(3%)
 Bar Questions
2008 # IX, cont…
b. Assume the vessel was not seaworthy as
in fact its hull had leaked, causing
flooding in the vessel. Will you answer be
the same? Explain. (2%)
c. Assume the facts in question (b). Can the
heirs of the three (3) crew members who
perished recover from CSC? Explain fully.
(3%)