TRANSPORTATION LAW

Governing Laws
• Art. 1731 to Art. 1766 New Civil Code
• Code of Commerce Sections 349 to 379, 573
to 736, and 806 to 869
• Special laws
COGSA
Public Service Act
Land Transportation and Traffic Code
Transportation – movement of Things or persons from one place to another; a carrying
accross; and it is immaterial whether the carrying be by rail, by water, or by air.

Public Utility- a business or service which is engaged in regularly supplying the public
with some commodity or service of public consequences, such as electricity gas, water
transportation, or telephone or telegraph service.

State regulates the operation of Public Utilities including the Transportation Industry

>Basis for regulation in the Police Power of the State

- To protect the public interest and to promote the health, comfort
and safety and welfare of the people. In the excercise of its police power the
legislature may interfere with the management of public utilities whenever public
interests demand.

By granting franchise to a public utility a state does not abrogate its right to
excercise the police power over the subject

The right to regulate however does not extend beyond:

1. The right to regulate rates and charges
2. The right to prevent discrimination
3. The right to make orders governing the conduct of the public utility to the ends
that its efficiency may be built up and maintained and that the public be
safeguarded.
 Agencies that possess delegated
power to regulate public utilities
• Public Service Commission (Old Law)
• Land Transportation Franchising Regulatory
Board
• Maritime Industry Authority
• Civil Aeronautics board
Constitutional Basis:
Sec. 11, 17, 18, 19

Common Carrier
Guide Questions:
1. What is Transportation? Public
Utilities
2. What is the Basis of the State to
regulate public Utilities?
3. What is a common Carrier? What
is the test whether Carrier is
Common or Private?
4. Distinguish Common Carrier From
Private Carrier.
5. Is transportation of Oil using
pipeline considered as a common
carrier?
Art. 1732 is the statutory definition of a common
carrier – persons, corporations, firms, or
associations engaged in the business of carrying
or transporting passengers or goods or both, by
land, water, or air, for compensation offering
their services to the public
Elements
1. Engaged in transporting passengers or goods or
both
2. Through Land, water or air
3. For compensation
4. Offering their services to the public
 Definition makes no distinction as to the means
of transporting as long as it is by land, water or
air. It does not provide that the transporting of
the passengers or goods or both should be by
motor vehicle. Hence an operator of a pipeline
for purposes of oil transportation is considered
as a common carrier.
 As a rule The registered owner of the Common
Carrier assumes liability for the operation of the
Common Carrier.
Test for determining whether a party is a common carrier:
1. He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in transportation of
goods for person generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his business is confined
3. He must undertake to carry by the method by which his business is conducted and
over his establiched roads
4. The transportation mus be for hire.

Other Test:
> Whether the Given Undertaking is a part of the business engaged in by the carrier
which he has held out to the general public as his occupation rather than the
quantity or extent of the business transacted.

Distinction of common carrier from private carrier:

1. The Former hold himself out in common that is to all persons who employ him as
ready to carry for hire while the latter agrees in some special case with some private
individual to carry for hire;
2. As to diligence required: one is extro ordinary while the other is the ordinary care of
a good father of the family
3. As to governing rules: One is on the provision on Common Carrier the other is the
stipulations in the contract

General
Provisions
Guide questions:
1. What vigilance is required from
common carriers in transporting
the goods and for the safety of
the passengers? Why are they
required with such diligence?
2. When is a the common carrier not
liable in case of loss in the
transportation of goods? Where
does the burden of proof lies?
3. What is the presumption as to the
fault of the common carrier?
What is the exception?
4. Explain the concept of continuing
liability in so far as the liability of
the common carrier is concerned.
What is stoppage in transity.
5. May a common carrier limit its
liability in transporting goods that
goods transported are at the risk
of the owner or shipper?
Diligence required:
Extra ordinary diligence:
Reason for the rule:
> The Nature of the business of common carriers
and the exigencies of public policy demand that
they observe extra ordinary diligence.
>The hazards of modern transportation demands
an extra-ordinary diligence.
 The relationship between the common carrier
and shipper contains factor which make up the
concept of trust. However a common carrier
should not be considered as an absolute insurer
against all risks of travel. (Lasam V. Smith 45 Phil
657) hence the provision on 1734
Vigilance over the goods
Exception to the presumption of fault or negligence:
1. Flood, storm, earthquake, lightning, or other
natural disaster or calamity;

Vigilance over Goods
6. What are the requisites before a
calamity or natural disaster be used as
a defense by the common carrier?
7. May a common carrier be exempted
from liabilities after it has delivered
the goods to the customs warehouse
and subsequently consumed by fire?
When is the duty of the common
carrier to exercised due diligence
commence and when should it end?
8. Under what circumstances is the
carrier liable for losses and
deterioration suffered by the goods
transported by reason of fortuitous
events?
9. May a common carrier be held
responsible for loss arising from acts of
theives and robbers?
10. Will the seizure or destruction or
the goods by order of public authority
ipso facto exempt common carrier
from liability?
2. Act of public enemy in war, whether international
or civil;
3. Act or omission of the shipper or owner of the
goods;
4. The character of the goods or defects in the
packing or in the containers;
5. Order or act of competent authority.
Requisites for natural disaster:
1. The natural disaster must have been the
proximate cause of the loss.
2. It must have been the only cause of the loss
3. Common carrier must have exercised due
diligince to prevent or minimize loss before,
during and after natural disaster.
4. The common carrier has not negligently incurred
in delay in transporting the goods.
> Contributory diligence will mitigate the carrier’s
liability
Requisites for act of public enemy:

1. The act of public enemy must have been the proximate cause of the loss.
2. That it must have been the only cause of the loss;
3. The common carrier must have exercised due diligince to prevent or minimize
loss before, during, and after the act.

Requisites for acts or omission of the shipper:

1. That the act or omission of the shipper or owner of the goods must have been
the proximate cause;
2. That it must be the only cause of the loss.

Requisites for character of goods:

1. That the loss or destruction was caused by the character of goods or the faulty
nature of the packing or the containers;
2. That the common carrier had exercised due diligence to forestall or lessen the
loss.

Requisites for act of public authority

The seixure or destruction of the goods by order of the public authority does not
ipso facto exempt the common carrier from responsibility unlees the common
carrier should prove that the public authority had the power to issue order.
The obligation of the carrier to carry the goods includes the duty not to delay
their transportation.

There is continuing liability of the diligence required by the carrier even if the
goods are temporarily unloaded or stored in transit.
Exception: stoppage in transitu where the carrier becomes now a
depositary.

Requisites in mitigating carrier’s liability by stipulation:

1. In writing, signed by the shipper or owner;
2. Supported by a valuable consideration other than the services rendered by
the common carrier
3. Reasonable, just and not contrary to public policy

 Stipulation that are considered in1745 are void.

The stipulation however cannot be availed if there is unjustified Default or

unjustified Change of Route

Conflicts Rule:
Law of Destination
Applies even when the goods did not reached destination except when it was
never transported
Rules as to Baggage:
a. If personal custody of the passenger or his employess, the carrier has the
same resposibility as that of an inn-keeper.
b. If otherwise, the carrier’s resposibility is that of a common carrier of goods.

Due Diligence – that which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and place.

 The shipper may annul stipulations in order to limit the common carrier’s
liability if the carrier refused to carry the goods unless the former agree to
carry the goods (1746)
> Voidable stipulations and annulment is necessary.
> in relation to 1744

> 1752 the common carrier is disputably presumed to have been negligent in
case of loss, destruction or deterioration.
 By Contract of carriage , the carrier assumes
SAFETY OF THE the express obligation to transport the
PASSENGERS passenger to his destination safely and to
observe extra ordinary dligence with due
Guide Questions:
regard for all the circumstances, and any
1. Is the fact that a carrier’s driver is
a professional one with injury that might be suffered by the
professional driver’s licence a passenger is right away attributable to the
proof of exercise of extra ordinary
diligenceon the part of the fault or negligence of the carrier (1756)
carrier?
2. What is the presumption of fault
in case of death or injuries to the  Contrary to the rules on carriage of goods,
passengers? How can it be the responsibility of the carrier cannot be
rebutted?
3. Explain the nature of a contract of
lessened by stipulation. (1757)
carriage. Exception: when a passenger is carried
4. May a common carrier stipulate
to limit its vigilance in the carriage
gratuitously (1758)
of its passengers? Exception to the exception:
5. May a common carrier raise the
defense of diligence of a good
willful acts or gross negligence
father of a family in the selection > Defense of exercising diligence of a good
of its employee?
6. What diligence is required to the
father of a family in the selection of its
passengers? employee is not available in culpa
contractual.
 Perfection of the Contract of carriage of passengers:
> a real contract and perfected upon the express or implied
consent of the carrier and where the passenger might have
placed a part of his body on any part of the common
carrier. Regardless when the passenger has any fare with
May a common carrier be held liable him.
when a passenger is killed by the
Exception: stipulation to limit the liability of the common
driver based on personal grudge?
carrier to gratuitously transported passengers;La mallorca
Guillaco v. Manila railroad –no vs. Ca
Maranan V. Perez - yes
Parties to the contract of carriage:
1. The passenger
2. The person undertaking the business of the common
carrier
For culpa contractual the action should be directed against the
common carrier and not the driver.
Passengers:
> one who has entered into a contract of carriage express
or implied, with a carrier. In addition to regular passengers
as commonly understood by the term, the following
persons, among others, have bee considered as passengers
1. Newsboy
2. Concessionaires doing business aboard
3. one who has boarded a wrong train or bus.
4. One with the consent of the carrier’s employees rides in a dangerous or unusual
place in the vehicle such as in the roof, or the running board.
5. One who is asleep

Non-passengers:
1. One who has not stepped in any part of the vehicle regardless of whether or
not he has purchased a ticket
2. One who enters the vehicle without any intention of paying or refuses on
demand to pay his fare
3. One who remains on a common carrier for unreasonable length of time after
affording the opportunity to alight
4. One who obtain transport by fraud or deceit
5. One who rides stealthily without the nowledge of the carrier
6. One who attempts to board a moving vehicle, although he already has a ticket,
unless the attempt be with the carrier’s consent
7. One who entered a wrong vehicle and he is informed of such fact and on
alighting is inured

Rebuttal of Presumption
1. Fortuitous event
2. Exerceised of extra ordinary diligence

Accomodated passengers
Art. 1755 defines the diligence required from the common carrier in the carriage
of passengers – utmost diligence of a very cautious persons, with due regard for
all the circumstances.

The contract of carriage is not terminated though passengers have

alighted if near the bus yet. – La mallorca vs. CA

1766 – Presumption of fault or negligence against the common carrier in cases

of death or injuries to the passengers
- an exception to the general rule that negligence must be proved

by contract of carriage, the carrier assumes the obligation to transport

the passenger to his destination safely and observe extra ordinary diligence with
due regard for all circumstances

Principles governing the liability of the common carrier:

1. The liability is contractual and arises upon breach of the obligation. And
there is breach if it fails to exercise extra ordinary diligence according to all
circumstances to its case;
2. Carrier is obliged to carry its passengers with the utmost diligence of a very
cautious person
3. Carrier is presumed to be at fault
4. Carrier is not an insurer of all risks
Requisite of a fortuitous event in order that it may exempt a common carrier:
1. The event must be independent of the human will
2. The occurence must render it impossible for the debtor to fulfill the obligation
in a normal manner
3. The obligor must be free from participation in, or aggravation of the injury to
the creditor

1757 – responsibility of the common carrier cannot be lessen through stipulation

1758 – stipulation to common carriers liability applies on to passengers who are

carried gratuitously.

1759 – Common Carriers are liable to death or injuries to passengers through

negligence of its employees.

1761/1762 – Passengers are required to exercise diligence of a good father of a

family to avoid injury. Hence contributory negligence may mitigate the carriers
liablity

1763 – Common carrier are held responsible for injuries sustained as a result of
acts of strangers if it fails to exercised diligence of a good father to prevent the
injury.

Damages Recoverable
Guide Questions:
1. May moral damages be awarded
in breach of contract of carriage?
2. Can there be a recovery of
damages on account of the death
of a feotus?
3. What form of damages can be
recovered from a common carrier
in cases of breach of contract?
The basis for the recovery of damages against the carrier is the
breach of contract.
TICKET itself is the contract between the carrier and the
passenger.
Consent – manifested by the fact that the passenger boards the
vehicle, ship or airplane and the shipper accepts him
Cause – fare paid by the passenger
Object – the transportation of the passenger
As a general rule, the venue of actions may not be stipulated by
the common carrier through a contract of adhesion.
Damages that may be recovered from a common carrier:
1. Actual or compensatory
2. Moral
3. Nominal
4. Temperate or moderate
5. Liquidated
6. Exemplary or corrective
- As a rule Moral damages is not recoverable for a breach of
contract of transportation except when it results to death
or the attendant of bad faith or fraud
1. What is a bill of lading? What is the Two Fold character of a bill of lading
2. Is a bill of lading a negotiable instrument? What is the period of filing claim?
3. May a common carrier examine the contents of the cargo? Who bears the expenses?
4. May a shipper of goods change the place of delivery of goods which he delivered to the carrier?
5. May a shipper abandon goods shipped by the carrier? What instance may a shipper abandon his
goods
Art. 349 – Speaks of A commercial Contract of 1732 – definitions of common carriers .
Transportation. > persons, corporations Firms or
> Becomes inapplicable by the enactment of associations engaged in the business of
the civil code which abolished the carrying or transporting goods or both, by
distinction between a commercial and a land , water or air, for compensation,
civil contract of transportation. offering their serices to the public.

 Contract of Towage should be The provisions on Art. 1733-1754 are made

distinguished from a contract of carriage. applicable.
One is a contract for hire of services.
exceptional cases: Barge and
Tugboat is owned by the same owner.

Art. 351 – Defines the Important matters that

should contain a bill of lading.
>Bill of Lading – an instrument in writing,
signed by the 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 thatthe freight be delivered to the order or assigns of a
specified persons.

Two Fold Character of a Bill of Lading

1.A receipt of the goods received
2.A Contract
3.Muniments of title and order (negotiable bill) -- foreign jurisprudence

Matters That Should be stated in the Bill of Lading (Art. 350)

1.Name and domicile of the shipper
2.Name and domicile of the carrier
3.Name and domicile of the consignee
4.Description of the effects
5.Cost of Transportation
6.Dates
7.Place of delivery to the carrier
8.Place and time of delivery to the consignee
9.Indemnity to be paid in case of delay.

Article 353-354 – The best evidence for carriage of cargo is bill of lading, but in its
absence, parties may present other evidence. “In the absence of the bill of lading
their respective claims shall be determined by legal proof which each of the
contracting parties may present”
> States the procedure in claiming goods. – return of the bill of lading
A bill of lading may contain stipulations as regard to the liability of the carrier
and may be considered to be binding unless it is contrary to public policy.

Stipulations:
A. Exempting entirely the carrier from any liability – No Liability- void
B. Un qualified limitation of such liability of an agreed valuation –Limited
Liability - void
C. Limiting liability of the carrier unless shipper declares higher value –
Qualified Liability valid

All stipulations stated in the bill of lading should be construed strictly against
the carrier as the same is in the nature of a contract of adhesion. Subject to
the provisions on 1745

Art. 355 – Commencement of obligation on the carrier

Art, 1736 NCC – The extra ordinary responsibility of the common carrier
lasts from the time the goods are unconditionally placed in the possession
of, and received by the carrier for transportation until the same are
delivered.

Art. 356-357 – Authorizes a carrier to examine cargo should the carrier

suspect that such cargo may be suspicious in nature.
Art. 358-359 – Concerns with the obligations of the carrier in delivering the goods.

The carrier is obliged to deliver the goods in a specified time and place should
there be stipulation as to the same otherwise the carrier may be held liable for
damages
Must be read with the provisions of the civil code under 1740-1746
If there is no stipulation as to time, the carrier shall be bound to forward them in
the first shipment of the same or similar merchandise which he make to the point of
delivery.
The carrier must as well deliver the goods using the agreed route otherwise the
carrier shall choose the shortest, least expensive and practically passable route.
Force majuere or Fortuitous event may be a valid defense of a common
carrier for the deviation of route.

Art. 360 – Gives the right of the shipper to change the consignee but not the place
where the deliver must be made
> Right to stoppage in transitu

Art 361-364 – must be read with art. 1745 and 1752 of the new civil code in so far
as the liability of the carrier is concerned and the validity of the stipulations in the
carriage of goods.
Reason for the Presumption of fault against the carrier:
> As to when and How goods were damage in transit is a matter peculiarly within
the knowledge of the shipowner and his employees and to require the plaintiff to
prove as to when and how the damage was done would force him to rely upon the
employees of the ship owner

Art. 365. Right of Abandonment of Goods. When the goods arrive in a damage
condition and damage is so great that shipper may not use goods for the purpose
for which they had been shipped, the shipper may excercise the right of
abandonment

Carrier must pay the market value of the goods.

Art. 371 Shipper and carrier agree in advance that cargo must arrive on a
certain date. And the date arrives and cargo has not yet arrived due to carrier’s
fault.

Art. 366 – Period of settling claims

If damage is apparent = immediately prior to payment

If damage is concealed = withn 24 hrs from receipt provided that there is no
payment of freight yet.
Applicable only in Inter island Shipping (Art. 366)

Rules in presenting a claim for goods arrived in damaged conditions

a.) If damage is apparent, claim must be filed immediately
b.) If damage is not apparent, claim should be filed within 24 hrs.
(provided that no payment for transportation charges has been
made or it was made with protest)
> condition precedent for recovery if no claim is filed, there will be no
recovery even if the action is meritorious because claim is part of the cause of
action.

If Claim is filed, but carrier refuses to pay:

> 6 yrs. If there is no bill of lading
> 10 yrs if bill of lading is issued.

There must be delivery of the goods before the said rule is applicable.

Applicable in Overseas Transportation (COGSA)

a.) Upon discharge of Goods if damage is apparent

b.) If Damage is not apparent, claim should be filed within 3 days

>Not a condition precedent but an action should be filed within one (1)
year from date of delivery or one year from the time when vessel left the port
Art. 369 Consignation is allowed in the following cases:

a. Consignee cannot be found

b. Consignee refuses to accept the goods
c. Consignee refuses to pay transportation fees/freightage

Art. 370-371 Covers the agreement between parties for the delivery of goods at a
certain date

Delay in delivery – the goods has not yet arrived in destination while the carrier has
already incurred in delay.

Delay in Conversion – the goods has arrived in destination but the carrier refuses
or fails to deliver the goods. And demand was already made

Under art. 371 the shipper may exercise the right of abandonment in case of
delay and the latter is attributable to the shipper.

- The carrier shall satisfy the total value of the goods as if they have been
lost or mislaid.
Art. 374-376 Gives the right of the shipper in so far as the cargo is concern if the
freightage or transportation expenses is not paid.

The shipper should pay the transportation expenses of the goods and the carrier
may asked for the judicial sale of the cargoes after demand of payment for an
amount sufficient to cover the transportation charges.

Transportation charges shall be a lien over the goods and the shipper shall have
preference over other creditors for a period of time until their delivery and thrity
days thereafter. Which after the expiration of the said period the shipper shall as
well be treated as an ordinary creditor.

Guide Question:
1. What is the period given to the shipper in presenting his claim against the
carrier?
2. Prescriptive period in filing a claim against a carrier?
3. Distinguish delay in delivery and delay in conversion?
 Vessel – merchant ships which are engaged in the
Maritime Commerce
1. What is a vessel? What do you
mean by the hypothecary nature
of a vessel?
2. May a captain acquire ownership
of a vessel by prescription? Why?
transportation of passengers and freight from one port
to another or fro one place to another, a minir craft
used for the transportation of merchandise by sea and
to make voyages from one port to another of these
islands.
Requisites:
1. Being not an accessory to another vessel
2. must be licensed to engage in the transportation of
passengers and/or freight.
3. by sea ( not merely in rivers, inlets,lakes,coves or
bays) whether in foreign or in coastwide trade.

For purpose of registration, vessel is defined which includes

every sort of boat or other artificial contrivance used,
or capable of being used, as a means of transportation
on water.

Art. 573 – ownership of a vessel may be acquired

3-years in good faith
10 yeears – bad faith
Captain - not allowed to acquire by prescription
Nature of vessel:
Real and Hypothecary – Limited Liability
Personal property but having a real nature

Agency where a vessel must be registered:

> Marine Port Authority (Marina)

Vessel may be subjected to chattel mortgage however need not be registered

before the registry of deeds but in he collector of customs t the port of entry.

Art. 575 – Right of pre emption and redemption of part owners of the vessels

Req.
1. Must be a part owner of a vessel
2. Must exercised its rights within 9 days from date of registration
3. Must deliver the price.

Art. 577 – Sale of a vessel in voyage or arrival of destination

In voyage – Freightage of her last cargo and liabilities shall belong to the buyer
After arrival at port of destination – freightage and liabilities shall belong to seller

> Subject however to the agreement of the parties

Cases:

Luzon Stevedoring Corporation vs. CA 156 Scra 169

Monarch Insurance v. CA 333 SCRA 71
Negros Navigation Vs. CA 281 SCRA 534
Government Vs. Insular Maritime Co. 45 Phil 805
Pedro Vasquez Vs. CA 138 SCRA 553
Marimperio vs. CA 156 SCRA 368
NFA vs. CA 311 SCRA 700
Inter-orient Maritime Enterprises vs. NLRC 235 SCRA 2678
Art. 586 – ship owner and ship agents liability from the actss of the captain
contracting repair, equip and provision

Ship agent – person entrusted with the provisioning of a vessel, or who represents
her in the port in which she may be found

Liability applies only when there is a contractual relation of the captain to the
third person. Hence in a culpa aquilana case, the shipowner may raise the
defense that they exercised the care and diligence as a good father of the family in
selecting the captain.

Husbanding agent – general agent of the owner in relation to the ship with powers
among others, to engage the vessel for general freight and the usual conditions
and settles for freight and adjust averages with the merchant.

Art. 587 – Liability of the ship agent (includes ship owner) against third person
which may rise in the conduct of the captain in the vigilance over the goods which
it carried. However may limit its liability by abandoning the vessel.

Limited Liability Rule – The ship owner or ship agent’s liability is merely co
extensive with his interest in the vessel, such that a total loss of the vessel results
in the liability’s extinction.
The rule may apply either:
A. Total Loss of the ship or
B. Abandonment of the entire ship

Who may abandon interest over a vessel?

1. Ship owner
2. Ship agent
3. Co-owners in so far as their interest is concern

Reason for the rule:

In order to encourage ship building despite the hazard posed by the industry

Exceptions to the Limited Liability Rule:

1. When Ship owner is at fault;
2. In case when voyage is not maritime but only in river bay or gulf;
3. Repair of vessels;
4. In case where the vessel is not common but merely a special carrier;
5. Extent covered by Insurance;
6. Liability under the labor code.

May the shipowner or agent, notwithstanding the total loss of the vessel as a result
of the negligence of its captain, be properly held liable in damages for the
consequent death of its passengers?
Abandonment in Marine insurance

Requisites:
1. There must be an actual relinquinshment of claim of ownership of the thing
abandoned;
2. There must be contructive loos – loss,injury or expenses sufferred should be
more than ¾ the value of the thing;
3. Abandonment should be neither partial nor conditional;
4. Abandonment should be made within reasonable time;
5. Abandonment to the insurer should be explicit.

Abandonment in Maritime commerce distinguish from abandonment in Marine

Insurance:
1. Abandonment is made by the ship owner or te ship agent while the latter it is
made by the insured;
2. Abandoned is the vessel while the latter is the thing insured;
3. Basis is the breach of maritime contract arising from the captain’s vigilance
over the goods while the latter constructive total loss.
Art. 588 – exception on the liability of the ship owner and ship agents as to the
acts of the captain if the latter exceed his powers and privileges pertaining to him.
Except if the amounts claim were used for the benefit of the vessel.

589- 608 relates to the ownership of the vessell as well as the rights and function
of the captain.

Resolution of conflict
Liability of each co-owners

Selection of ship agents

Upon the will of the co-owners

Must
1. Possess legal capacity to engage in commerce
2. Recorded in the commercial registry of the province.
> Authority is limited only in relation with the vessel as to its administration,
charterages and voyages, but not to its cargo
Captains And Master of Vessels

-Requirements as a captain is provided for under revise administrative code

1. citizen of the philipines
2. examine d physically
3. Qualified with his moral and technical qualification

Captain – governs a vesel that navigates the high seas or ships of large dimension
or importance

Master – commands smaller ships engage exclusively in coastwide trade.

Triple Characteristic of a captain

1. Agent of the ship owner
2. Technical director of the vessel
3. Representative of the government of the country under whose flags he navigate

Express powers of the captain – art. 610

Art. 611 – Successive order to obtain funds in case he does not expect to received
from the ship agent.
4. loan on bottomry –
Art. 612 - inherent duties of the captain

1. Inventory
2. Copy of the code of commerce
3. books “logbook, and accounting books, Freight books”
4. Examination of the vessel
5. Remain on board
6. To demand a pilot
7. To be on deck
8. To present himself “protest” ( arrival under distress)
9. Certificate
10. Take care of the custody all belongings of any member who might die
11. Conduct in accordance with the ship agents instruction
12. inform the ship agent of the status of the vessel including any loans obtained
13. Prevent collissions
14. In case of shipwreck make Protest
15. Comply with laws and regulations

Protest – written statement by the master of a vessel, attested by a proper judicial

officer or notary to the effect that damage suffered by the ship on her voyage
was caused by storms or other perils of the sea without negligence
Nature of the duties of a captain – essentially personal due to the confidence given
to him arising from the fact that he possesses the required technical ability.

Art. 617 – prohibition on captains securing loans on respondetias secured by

cargo.

prohibitions on loans on bottomry, except in so far only to his interest

“Express powers of the captain.

1. Contract with crew command and disciplined crew
2. enter charter party
3. contract for fuel and provisions
contract for needed repair of vessel

Elements on Responddentia and bottomry loans

1. Exposure of security to marine peril
2. Obligation of debtor conditioned only upon safe arrival of the security at the point
of destination
3. Hypothecary nature

Who may contract:

Bottomry – owner. In the absence, captain
respondentia – owner of cargo
Art. 618 – Liability of the captain to ship agent and ship agent to other persons.

1. Damages arising from neglect or want of skill of the captain

2. Theft or roberry by crew
3. Mutiny
4. Fines and confiscations fro failure to comply with the rules on navigation,
customs or health.
5. Mis use of powers by the captain
6. Unjustified deviation

Art. 622 & 623 – duties of captain in times of war and presence of men of war

- Make entry in the proper book

- Protest
- Exempt from liability due to force majeur

Art. 626 – order of succession

1. Captain
2. 1st mate
3. 2nd mate
Crew – aggregate of seamen who man a ship or vessel including the master and
officers

Contract of crew and ship owner

1. For each voyage – fixed compensation for the entire voyage
2. Per Month
3. Per freight – compensention dependent upon the profits

634 – citizenship of the vessel ( superseaded by the tariff and Customs code)

- Domestic ownership means ownership vested in citizens of the philippines or

corporations or association organized under the laws of the philippines at least
60 % of capital stock wholly owned by filipinos

649 – Supercargoes
- agent of owner of cargoes on a vessel who has charged of cargo on
board, sells the same to the best advantage in a foreign market buys a cargo
to be brought back. (non existent)

Purser – treasurer of the vessel

Cases:
1. National Union Fire vs. Stolt-Neilsen Philippines 184 Scra 682
2. Ouano Vs. Court of Appeals 211 Scra 740
3. Caltex Inc. Vs.. Sulpicio Lines 315 SCRA 709
4. NFA vs. Court of Appeals 311 Scra 700
5. Standard Vacuum, Oil Co. Vs. Luzon Stevdoring co. L- 5203 April 18, 1956
6. Coastwise Ligtherage vs. Court of appeals 245 scra 796
7. Overseas Factors vs. Southseas factors 4 SCRA 400
8. Trans asia shipping lines vs. Court of appeals 254 SCRA 260
rules in delay:
Art. 698
a. Where a voyage already begun should be interupted, the passengers
shall be obliged to pay the fare in proportion to the distance covered, without
right to recover for losses and damages if the interruption is due to fortuitous
event or force majeur
B. But the passengers shall have a right to indemnity if the interruption
should have been caused by the captain exclusively
c. If the interruption should be caused by the disability of the vessel and a
passenger should agree to await the repairs, he may not be required to pay
any increase price of passage, but his living expenses during the stay will be at
his own expence
Charter Party
- a contract by virtue of which the owner or the agent of the vessel
leases for a certain price of the whole or a portion of the vessel for the
transportation of goods or persons from one port to another.

Requisites
1. Consent of the contracting parties
2. Existence of a vessel which will be placed at the disposition of the shipper
for the object of the transportation
3. The freight
4. Those mentione in Art. 652

Classes of Charter Party

As to capacity of the vessel

Total – whole vessel is chartered
Partial – a portion of the vessel

As regard to time
Determined number
Voyage
As to the freight
single amount
per ton or volume
Other classes of charter
1. Affreightment – involves the use of shipping space on the vessels leased by the
owner in part or as a whole
2. Bareboat or demise – the whole vessel is let to the charterer with transfer of its
entire command and possession and consequent control over its navigation,
including the master and the crew who are his servants.

Laydays – days of detention or delay suffered by a vessel in a given port while

waiting for the loading of the cargo

Demurrage – 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

Primage – amount stipulated in a charter party to be paid by the charterer or shipper

as compensation to the captain or master for his particular care of the goods.

Governing law of the charter party

- stipulations stated in the charter party.

Contract of towage
- a contract for hire of services
exception
when tugboat and barge is owned by one and continously engaged in the
bussiness
Art. 652 – Formal Requisites of a Charter Party

-Must be in writing and signed by contracting parties

- Effect if the charter party is not signed, the contract shall be understood as
executed in accordance with what appears in the bill of lading which shall be
the sole evidence of title for determining the rights and obligations of the ship
agent. (Art. 653)
-Kind, name and tonnage of the vessel
-Her flag and port of registry
-Name and surname of the captain
-“ ship agent
-Charter information
-Port of loading and unloading
-Information of the cargo
-Freight to be paid
- primage
-Periods
-Laydays and extra laydays

Caltex Philippines
May a charter party convert a common carrier into a private carrier
Duties of a charterer in a affreignment contract
Art. 655 – Authority of the captain to enter into charter party
May a captain enter into a charter party?
Terms and conditions in contravention of the ship owner, what are the
consequences?

Litonjua Shipping vs. NSB 176 S 189

Cases in which goods carried on a vessel are not liable to pay freight.
1. Goods jettisoned for the common safety and never recovered
2. Goods lost by reason of shipwreck or stranding
3. Goods seized by pirates or enemies

Art. 665 – liens over the cargoes

- Payment of freight
- Expenses and duties arising therefrom which must be reimbursed by the
shippers
- For the part of general average which they correspond to it
Passengers on sea voyages – govern by the civil code except as to the conditions
under art 698. in the case of trans asia shipping lines

BILL OF lading
Governed by the rules under civil code
Res Perit Domino – owner bears the loss
CIF – Cost Insurance Freight

FOB – Free on board. Title passes to the buyer in a particular area

Loans on Bottomry and Respondentia

Elements on Responddentia and bottomry loans

1. Exposure of security to marine peril
2. Obligation of debtor conditioned only upon safe arrival of the security at the
point of destination
3. Hypothecary nature

Who may contract:

Bottomry – owner. In the absence, captain
respondentia – owner of cargo
Art. 719 – Definition on loans of bottomry or respondentia

- a contract in the nature of a mortgage by which the owner of the ship

borrows money for the use, equipment, or repair of the vessel, and for a definite
term and pledges the ship as security for its repayment, with maritime or
extraordinary interest on account of marine risk to be born by the lender

- a loan not made upon the ship but on the goods laden on board

Rules in Loans
Art. 725 – No Bottomry loans on salaries of crew

726-728 Excess of loans returned to owner., excess valuation, not all used

730 – where several bottomry loans where obtained, the last shal be the first in
determining preference in payment. It was the later loan that made it possible for
vessel’s safe arrival

731 – reflects hypothecary nature of bottomry and respondentia for loss of security
due to marine peril will extinguish obligation.
Exception:
Loss due to inherent defect
Loss due to barratry
Loss due to fault or malice of borrower
Vessel was engaged in contraband
Cargo loaded different from that agreed upon

Art. 732 Lenders must contribute to general average once jettison has made
possible safe arrival of security

Art. 733- exposure to marine peril takes place from the time anchors are weighed at
the port of departure until anchors are dropped at the port of destination.

AVERAGES

All extraordinary or accidental expenses which may be incurred during the voyage
for the preservation of the vessel or cargo, or both.
All damages or deterioration which the vessel may suffer from the time she puts to
sea at the port of departure until she casts anchor at the port of destination, and
those suffered by the goods from the time they are loaded in the port of shipment
until they are unloaded in the port of their consignment.
Petty and ordinary expenses incident to navigation are ordinary expenses and to
be defrayed by shipowner unless contrary agreed upon.
Types of Averages

Simple or Particular - include all expenses and damages caused to the vessel or
her cargo which have not inured to the common benefit and profit of all persons
interested in the vessel and her cargo. Only vessel or cargo is saved.

General or Gross – all 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. Both Vessel and cargo are saved

Requisites:
A. There must be common danger arising from; 1. accidents of the sea
2. disposition of authority 3. fauts of men
B. For the common safetypart of the vessel or of the cargo or both is
sacrificed deliberately.
C. Success in saving the vessel and cargoes
D. Expenses incurred after taking proper legal steps. (Art. 813)

Distinction
Both ship and cargo are saved while in simple or particular averages
there is no common danger
damages or expenses are deliberately made while in particular average it
is not deliberately made
Rule in Average
a. Average is defined as a damage deliberately caused, or an expense deliberately
incurred due to marine peril and whic resulted in saving of vessel and/or cargo.
b. Where both vessel and cargo are saved, it is general average; where only
vessel or only cargo is saved, it is particular average.
c. The person whose property has been saved must contribute to reimburse
damaged caused or expense incurred if the situation constitute general average.

Magsaysay Inc. Vs. Agan 96 Phil 504

Arrival under stress

- arrival of the vessel at the nearest and most conveniet port, if during the
voyage the vessel cannot continue the trip to the port of destination on account
of lack of provisions, well founded fear of seizure, privateers or pirates, or by
reason of any accident of the sea disabling it to navigate.

Effect

- if arrival is lawful, the expenses shall be for the account of the ship owners but
they shall not be liable for damage which may be caused the shippers by reason
of the arrival
COLLISSIONS

- the impact of two vessels both moving and is distinguised from allision
which designates the striking of a moving vessel against one that is stationary.

Zones of Time in collission of vessels

First Division – covers all the time up to the moment when the risk of collision may
be said to have begun. (when 2 vessels approach each other)

Second division – the time between the moment when the risk of collision begins
and the moment when it has become a practical certainty. ( when the vessels are so
near each other and contact is imminent)
> Burden is on the vessel rewuired to keep away and avoid danger.

Third division – the time between the moment when collision has become a practical
certainty and the moment and the moment of actual contact. ( actual contact)
> vessel which has forced the privileged vessel into danger is reponsible
even if the privileged vessel has committed an error within that zone.

Error in extremis – a vessel must not approach so near a privileged vessel and in
such a course as to alarm a man of ordinary skill and prudence
Rules in Collission and allision:

a. One vessel at fault – such vessel is liable for damaged caused to innocent
vessel as well as damages sufffered by the owners of cargo of both vessels.
b. Both Vessels at fault – Each vessel must bear its own damage, but the
shippers of both vessels may go against the ship owners who will be solidarily
liable
c. Vessel at fault unknown – same rule as B
d. Third vessel at fault – same rule as a
e. Fortuitous event – No liability. Each bears it own loss.

Urrutia vs. Baco River Plantation 26 phil 623 Passengers cannot intervene
Sulpicio lines vs. CA 305 Scra 478
Doctrine of Last Clear chance not applicable in collission s of vessels
Urrutia case made applicable the Doctrine of Last Clear chance before actual
contact
Doctrine on contributory negligence also not applicable

 After collission the captain must file a marine protest otherwise no recovery
can be had under the Code of Commerce, but actions can still be had under
civil code.
exception:
a. Cargo owners
SHIPWRECK

-A ship which has received injuries rendering her incapable of navigation.

Rules in Shipwreck
1. If loss is due to accident or force majeure, as a general rule, loss falls upon the
respective owners.
2. If loss is due to malice, carelessness or lack of skill on the part of the
captain,cthe captain shall be responsible for the loss.
3. In case of shipwreck, the captain shall make a protest in due form at the first
port reached before the competent authority

Rule in Jettison: the largest goods with the smallest value goes out first.
Rule in salvage: the smallest item with highest value saved first
SALVAGE LAW
- Salvage provides for compulsory reward to those who brave the perils of
the sea to save cargo or vessel in order to encourage such services. Whether owner
of property likes it or not, he must give a reward, the maximum amount of which is
50% of value of property saved.

Salvage – a service which one person renders to the owner of the ship or goods by
his own labor, preserving the goods or ship which the owner or those entrusted with
the care of them either abandoned in distress at sea or are unable to protect and
secure.

- it may refer also to the compensation allowed to persons by whose

assistance a ship or its cargo has been saved, in whole or in part, from impending
danger, or recovered from actual loss, in case of shipwreck, derelict or recapture.

Shipwreck – a ship which has received injuries rendering her incapable of navigation.

Derelict – a ship or her cargo which is abandoned and deserted at sea by those who
are in charged of it, without any hope of recovering, or without any intention of
returning to it.

> When is a contract considered as one of towage and one on Salvage?

Jetsam – Goods which are cast into the sea, and there sink remain underwater.

Flotsam or Flotsan – Goods which float upon the sea when cast overboard.

Ligan or Lagan – Goods cast into the sea tied to a bouy, so that it may be found
again by the owner.

Requisites for salvage reward to be warranted

1. There must be a valid object of salvage

2. Such Subject must be exposed to marine peril
3. Salvage services must be rendered voluntarily
4. Salvage effort must be successful

Instances for a valid salvage

1. Shipwreck
2. The vessel or cargo shall be beyond the control of the crew
3. Abandoned cargo or vessel

>Salvor has an interest over the property saved (lien)

> Who owns the property saved?
Procedure in salvaging
If vessel is abandoned, salvor must tow it to nearest port where it will be
delivered to municipal treasurer or collector of customs who will advertise fact of
salvage.
If owner appears, he may take possession of vessel and must pay a reward
amount not exceeding 50% of the value of the vessel.
If no claim is made within 3 months after publication and advertisement it shall
be auctioned and rewards and expenses shall be deducted from proceeds.
If no one claims after 3 years, ½ to the salvors and ½ to the government.
If one vessel saves another vessel, the reward going to the former shall be
divided as follows: ½ to the ship owner; ¼ to the captain; ¼ to the crews.

Owners, Captains, crews of the salvaged vessel are not entitled to reward.

Barrios Vs. Go thong 7 SCRA 535

COGSA
Primordial purpose is to bring uniformity in ocean bills of lading and to give
effect to the brussels treaty
Applies only in foreign trade to and from the philippines.

Resposibilities of the carrier

Exercise due diligince in:

1. Making the ship seaworthy
2. Properly Man, equip and supply the ship
3. Make the holds, refrigerating and cooling chambers, and all other parts of the
ship in which goods are carried, fit and safe for their reception, carriage, and
preservation.

 Duty to issue bill of lading

Sec. 3 par. 6

Notice of Loss or Damage

Apparent damage – Immediately

Non Apparent – 3 days of the delivery
Prescriptive period – 1 yr. After delivery of the goods or the date when the goods
are supposed to be delivered
Does not apply to: Misdelivery, Insured Cargo liability under contract

Sec. 3 par 8
Stipulations releiveing the carrier or the ship from liability shall be null and void.

Sec. 4 Par. 5

Limits of liability against the carrier for $500. allowance of stipulations

Stevens va Nordeutscher Lloyd 6 SCRA 180

Eastern & Australian Steamship Co. 108 SCRA 248
Loadstar Shipping CO. Vs. CA 315 SCRA 339
Belgian Overseas Chartering and Shipping N.V. Vs. Philippine First Insurance Co.
Inc. 143133 June 5, 2002

INTERNATIONAL AIR TRANSPORTATION LAW

International Transportation – place of departure and place of destination whether

or not there be a break in the transportation are situted within the territories of two
High Contracting Parties or within the territoy of a single high contracting party if
there is an agreed stopping place within a territory subject to the sovereignity of
Airway Bill – Documents of title relating to air transportation

Absence of Airway Bill/ ticket the carrier cannot be entitled to avail himself of the
provisions of this convention which exclude or limit liabilities.

Liability of the carrier

Death or injuries sustained while on the aircraft or in the course of any operations
of embarking or dis embarking.
Damages on check bagges
Damages brought about delays

Exempting Circumstance in the carriage of bagges

1. Error in piloting
2. Hadling aircraft
3. Navigation
4. And has taken all necesary steps to avoid damages

Contributory Negligence of the passeger

 Exonerates the carrier partly or wholly in accordance with its local law
Limits of liabilities under Warsaw (exception: Fraud or willfull misconduct)
Person – 125000 francs
Baggages – 250 francs/ kilogram
Personal Bagges 5,000 francs per passsenger

Rule in Claims (Condition Precedent)

Demands in case of damages
3 days for baggages
7 days for goods
Demand in case of delay
14 days from the date on which the baggage or goods have been placed at his
disposal
Prescriptive period is 2 years

Venue (Art. 28)

Action for damages
In the territory of one of the high contracting parties, either domicile of the carrier
or his principal place of business, or where he has a place of business through
which the contract has been made or before hte court at the place of destination

Northwest Airlines vs. Cuenca 14 SCRA 1063 AA vs Ca 327 SCRA 482

Alitalia vs. IAC 192 SCRA 9 Cathay vs Sps. Vazquez 150843 3/14/ 2003
Santos III vs. Northwest Orient Airline 210 Scra 256
Philippine Home Assurance vs. CA 1996

Pal vs. Ca 1992 – Local Laws applicable