San beda notes

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San Beda College of Law54

M EMORY A ID IN C OMMERCIAL L AW

TRANSPORTATION LAWS

CONTRACT OF TRANSPORTATION/CARRIAGE

A contract whereby a person, natural or juridical, obligates to transport persons,goods, or both, from one place to another, byland, air or water, for a price orcompensation. Cla !f!"a#!on $

1. Common or Private2. Goods or Passengers

. !or a fee "for hire# or Gratuitous$. %and, &ater'maritime, or Air(. )omestic'inter*island'coastwise or

+nternational'foreign +t is a relationship which is imbued with the

public interest.

COMMON CARRIER

Persons, corporations, firms or associationsengaged in the business of carrying ortransporting passengers or goods or both, byland, water, or air, for compensation, offeringtheir services to the public "Art. 1 2, CivilCode#.

Art. 1 2 of the -ew Civil Code avoids anydistinction between one whose principalbusiness activity is the carrying of persons orgoods or both and one who does suchcarrying only as an ancillary activity"sideline#. +t also avoids a distinctionbetween a person or enterprise offeringtransportation service on a regular orscheduled basis and one offering such serviceon an occasional, episodic or unscheduledbasis.

-either does the law distinguish betweena carrier offering its services to the generalpublic that is the general community orpopulation and one who offers services orsolicits business only from a narrow segmentof the general population.

A person or entity is a common carriereven if he did not secure a Certificate ofPublic Convenience ")e Gu man vs. CA, 1/0

C A /12#. +t ma3es no distinction as to the means of

transporting, as long as it is by land, water orair. +t does not provide that thetransportation should be by motor vehicle."!irst Philippine +ndustrial Corporation vs. CA#

4ne is a common carrier even if he has nofi5ed and publicly 3nown route, maintains noterminals, and issues no tic3ets "Asia%ighterage hipping, +nc. vs. CA#. C%a&a"#e&! #!" $

1. 6nderta3es to carry for all peopleindifferently and thus is liable forrefusal without sufficient reason"%astimoso vs. )oliente, 4ctober 27,18/1#9

2. Cannot lawfully decline to accept aparticular class of goods for carriageto the prejudice of the traffic in thesegoods9

. -o monopoly is favored ":atangas ;rans. vs. 4rlanes, (2 P


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%aw on commoncarriers

%aw on obligationsand contracts

GO'ERNING LAWSA) Do*e #!"/!n#e&+! land/"oa #w! e Applicable to %and, &ater, and Airtransportation

1. Civil Code * primary2. Code of Commerce "Arts. $8, 8,

( * $, (07, 07/*0$(# * suppletory

B) In#e&na#!onal/fo&e!gn/o,e& ea-Fo&e!gn "o.n#& #o P%!l!00!ne 1 Applicable to &ater'maritime and Airtransportation

;he law of the country of destinationgenerally applies.

1. Civil Code * primary2. Code of Commerce * suppletory

. 4thers * suppletorya. &ater'maritime= Carriage of

Goods by ea Act "C4G A#b. Air= &arsaw Convention

I) NEW CI'IL CODE-A ) 23 +23661

RE78IREMENT OF E9TRAORDINARYDILIGENCE

endition of service with the greatest s3illand utmost foresight. ")avao tevedore Co.v. !ernande # Rationale:

1. !rom the nature of the business andfor reasons of public policy "Art.1 #

2. elationship of trust. :usiness is impressed with a specialpublic duty

$. Possession of the goods(. Preciousness of human life

A common carrier is not an absoluteinsurer of all ris3s of travel.

CO'ERAGE1. igilance over goods "Arts. 1 $*1 ($#9and2. afety of passengers "Arts. 1 ((*1 / #.

PASSENGER A person who has entered into a contractof carriage, e5press or implied, with the

carrier. ;hey are entitled to e5traordinarydiligence from the common carrier. ;he following are not considered

passengers, and are entitled to ordinarydiligence only=

a. 4ne who has not yet boarded anypart of a vehicle regardless ofwhether or not he has purchased atic3et9

b. 4ne who remains on a carrier for anunreasonable length of time after hehas been afforded every safeopportunity to alight9

c. 4ne who has boarded by fraud,stealth, or deceit9

d. 4ne who attempts to board amoving vehicle, although he has a

tic3et, unless the attempt be withthe 3nowledge and consent of thecarrier9

e. 4ne who has boarded a wrongvehicle, has been properly informed

of such fact, and on alighting, isinjured by the carrier9f. +nvited guests and accommodation

passengers. "%ara vs. alencia#g. 4ne who rides any part of the

vehicle which is unsuitable ordangerous or which he 3nows is notdesigned or intended for passengers.

DEFENSES OF A COMMON CARRIER INT(E CARRIAGE OF GOODSCA 4 !4 ;6+;4'!4 C? BA ?6 ? Re:.! !#e $a. Bust be the pro5imate and only cause of

the lossb. ?5ercise of due diligence to prevent or

minimi e the loss before, during or afterthe occurrence of the disaster "Art. 1 8#c. Carrier has not negligently incurred in

delay in transporting the goods "Art.1 $7#

!ire is not considered a natural disaster orcalamity as it arises almost invariably fromsome act of man. "?astern hipping %ines +nc.vs. +AC#

Bechanical defects are not force majeure ifthe same was discoverable by regular andade>uate inspections. (Notes and Cases onthe Law on Transportation and Public Utilities,

Aquino, T. & ernando, R.P. !""# ed. p.$!"%$!!

2. AC; 4! P6:%+C ?-?BE Re:.! !#e $a. Bust be the pro5imate and onlycause of the lossb. ?5ercise of due diligence to preventor minimi e the loss before, during orafter the act causing the loss,deterioration or destruction of the goods"Art. 1 8#

. -?G%+G?-C? 4! ;


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aid public authority must have the powerto issue the order "Art. 1 $ #. Conse>uently,where the officer acts without legal process,the common carrier will be held liable."Gan on v. CA 1/1 C A /$/#

)iligence in the selection and supervisionof employees under Article 2107 of the CivilCode cannot be interposed as a defense bythe common carrier because the liability ofthe carriers arises from the breach of thecontract of carriage. ;he defense under saidarticles is applicable to negligence in >uasi*delicts under Art. 21 /. ")el Prado v. Banila?lectric Co., (2 Phil 877#

LIABILITY OF A COMMON CARRIER FORDEAT( OR IN;8RIES TO PASSENGERSD8E TO ACTS OF ITS EMPLOYEES ANDOT(ER PASSENGERS OR STRANGERS

FOR ACTS OF ITSEMPLOYEES

FOR ACTS OFOT(ER

PASSENGERS ORSTRANGERS

e>uired diligence and defense?5traordinarydiligence

4rdinary diligence

-ature of liability ;ort9 however, ;he employee mustbe on duty at thetime of the act."Baranan v. Pere #

-ot absolute9 limitedby Art. 1 /

;he carrier is liable when its personnelallowed a passenger to drive the vehiclecausing it to collide with another vehicleresulting to the injuries suffered by the otherpassengers. "B vs. :allesteros, 1/ C A/$1#

CARRIAGE OF GOODS CARRIAGE OF PASSENGERS

Pa!e1. Common carrier2. hipper

. Consignee

1. Common carrier2. Passenger

Ca. e of l!a

)eath or injury to the passengers

D.&a#!on of l!a

!rom the time the goods are unconditionallyplaced in the possession of, and received by thecarrier for transportation until the same aredelivered actually or constructively by the

carrier to the consignee or to the person whohas the right to receive them. "Art. 1 /# +t remains in full force and effect even whenthey are temporarily unloaded or stored intransit unless the shipper or owner has madeuse of the right of stoppage in transitu. "Art.1 #

+t continues to be operative even during thetime the goods are stored in a warehouse of thecarrier at the place of destination until theconsignee has bee advised of the arrival of thegoods and has had reasonable opportunitythereafter to remove them or otherwise disposeof them. "Art. 1 0#

)elivery of goods to the custom authorities isnot delivery to the consignee. "%u )o v.:inamira, 171 Phil 127#

;he duty of a common carrier to provide safetyto its passengers so obligates it not only duringthe course of the trip, but for so long as thepassengers are within its premises and where

they ought to be in pursuance to the contractof carriage. "% ;A v. -avidad, F277 #All persons who remain on the premises

within a reasonable time after leaving theconveyance are to be deemed passengers, andwhat is a reasonable time or a reasonable delaywithin this rule is to be determined from all thecircumstances, and includes a reasonable timeto see after his baggage and prepare for hisdeparture. "%a Ballorca v. CA, 1 C A 8 9Abioti hipping Corporation v. CA, 1 8 C A8(# +t is the duty of common carriers ofpassengers to stop their conveyances areasonable length of time in order to affordpassengers an opportunity to enter, and they

are liable for injuries suffered from the suddenstarting up or jer3ing of their conveyanceswhile doing so. ;he duty which the carrier ofpassengers owes to its patrons e5tends topersons boarding the cars as well as to thosealighting therefrom ")angwa ;rans Co., +nc. vs.CA 272 C A ( $#.

COMMERCIAL L AW C OMMITTEE C


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P&e .*0#!on of negl!gen"e

Art.1 ( Civil Codeeason= As to when and how goods were

damaged in transit is a matter peculiarly withinthe 3nowledge of the carrier and its employees."Birasol v. )ollar, ( Puent arrival of thesame goods at the place of destination in badorder ma3es for a prima facie case against thecarrier. "Coastwise %ighterage Corp. v. CA, 2$(

C A 8/#

Art.1 (( Civil Codeeason= ;he contract between the passenger

and the carrier imposes on the latter the dutyto transport the passenger safely9 hence theburden of e5plaining should fall on the carrier.

Defen e

1. 4rdinary circumstance= ?5ercise ofe5traordinary diligence "Art. 1 (#

2. pecial circumstances=a. !lood, storm, earth>ua3e,

lighting, or other natural disasteror calamity "plus force majeure#

b. Act of the public enemy in war,whether international or civil

c. Act or omission of the shipper orthe owner of goods

d.;he character of the goods ordefects in the pac3ing or in thecontainers

e. 4rder or act of competent publicauthority "Art. 1 $#

1. ?5ercise of e5traordinary diligence"Art. 1 (/#

2. Caso fortuito

'al!d #!0.la#!on

1. eduction of degree of diligence to ordinarydiligence, provided it be=

a# +n writing, signed by the shipper orowner9

b# upported by a valuable considerationother than the service rendered by thecarriers9 and

c# easonable, just and not contrary topublic policy. "Art. 1 $$#

2. !i5ed amount of liability= A contract fi5ing thesum to be recovered by the owner or shipper forthe loss, destruction or deterioration of thegoods, if it is reasonable and just under thecircumstances and has been fairly and freelyagreed upon. "Art. 1 (7#

. %imited liability for delay= An agreementlimiting the common carrier@s liability for delayon account of stri3es or riots "Art. 1 $0#$. tipulation limiting liability to the value of thegoods appearing in the bill of lading, unless theshipper or owner declares a greater value. "Art.1 $8#

;he diligence re>uired in the carriage of thegoods may be reduced by only one degree, frome5traordinary to ordinary diligence or diligenceof a good father of a family. "Art. 1 $$, Art.1 $(, no. $#

tipulation limiting liability when a passenger iscarried gratuitously, but not for willful acts orgross negligence. "Art. 1 (0#

'o!d #!0.la#!on$. ;hat the carrier shall e5ercise a degree ofdiligence less than that of a good father of afamily over the movable transported9(. ;hat the carrier shall not be responsible

for the acts or omissions of his or its

)ispensing with or lessening the e5traordinaryresponsibility of a common carrier for thesafety of passengers imposed by law by

stipulation, by posting of notices, by



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San Beda College of Law5=


employees9/. ;hat the carrier@s liability for actscommitted by thieves or robbers who do notact with grave or irresistible threat, violence orforce is dispensed with or diminished9

. ;hat the carrier is not responsible for theloss, destruction or deterioration of the goodson account of the defective condition of thecar, vehicle, ship or other e>uipment used inthe contract of carriage. "Art. 1 $(#

statements on tic3ets or otherwise. "Art. 1 ( #



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R8LES ON PASSENGERS> BAGGAGEIN T(E C8STODY OF

T(E PASSENGERS-(AND+CARRIED1

IN T(E C8STODYOF T(E COMMON

CARRIER-C(EC?ED+IN1

Legal na#.&e of #%e


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. ight of abandonment$. -otice of damage(. Combined carrier agreement

BILL OF LADING

;he written ac3nowledgment of receipt ofgoods and agreement to transport them to aspecific place to a person named or to hisorder.

Rules: 1. +t is not indispensable for the creation of acontract of carriage. "Compania Baritima vs.+nsurance Company of -orth America, 12

C A 21 #

2. Ambiguity is construed against the carrier,the contract being one of adhesion.

. ;he consignee, although the instrument isoftentimes drawn up only by the consignorand carrier, becomes bound by all the

stipulations contained therein by ma3ing aclaim for loss on the basis of said bill oflading. " ea*%and ervices +nc. vs. +AC#

$. ;he right of a party to recover for loss ofshipment consigned to him under a bill oflading drawn up only by and between theshipper and the carrier, springs from either arelation of agency between him and theshipper, or his status as stranger in whosefavor some stipulation is made in saidcontract, and who becomes a party theretowhen he demands fulfillment of thatstipulation. "Art. 1 11 "2#, "Bendo a vs. PA%+nc.#

(. Acceptance of the bill of lading withoutdissent raises the presumption that all theterms therein where brought to the3nowledge of the shipper and agreed to byhim and, in the absence of fraud or mista3e9he is estopped from thereafter denying thathe assented to such terms. (Notes and Caseson the Law on Transportation and PublicUtilities, Aquino, T. & ernando, R.P. !""# ed.

p.!0$

?!nd $1. 1n board * issued when the goodshave been actually placed aboard theship with very reasonable e5pectationthat the shipment is as good as on itsway.2. Recei/ed * one in which it is statedthat the goods have been received forshipment with or without specifyingthe vessel by which the goods are tobe shipped.3. Ne otiable * one in which it is statedthat the goods referred to therein willbe delivered to the bearer or to theorder of any person named therein.4. Non%ne otiable * 4ne in which it isstated that the goods referred totherein will be delivered to a specifiedperson.5. Clean 2 4ne which does not indicate

any defect in the goods. 6. 3oul L 4ne which contains a notationthereon indicating that the goodscovered by it are in bad condition.

7. 'pent L 4ne which covers goods thatalready have been delivered by thecarrier without a surrender of a signedcopy of the bill.8. Throu h L 4ne issued by the carrierwho is obliged to use the facilities ofother carriers as well as his ownfacilities for the purpose oftransporting the goods from the city ofthe seller to the city of the buyer,which bill of lading is honored by thesecond and other interested carrierswho do not issue their own bills.9. Custod4 L 4ne wherein the goodsare already received by the carrier but

the vessel indicated therein has notyet arrived in the port.10. Port L 4ne which is issuedby the carrier to whom the goods havebeen delivered, and the vesselindicated in the bill of lading by whichthe goods are to be shipped is alreadyin the port where the goods are heldfor shipment.

F.n"#!on $1. :est evidence ofthe e5istence of the contract ofcarriage of cargo "Art. ( #2. )ocument oftitle3. eceipt of cargo $. Contract totransport and deliver goods asstipulated(. ymbol of thegoods

OBLIGATIONS OF T(E CARRIERA) D.# #o a""e0# #%e good

56N6RAL RUL6: A common carrier cannotordinarily refuse to carry a particular class ofgoods.

67C6PT81N: !or some sufficient reason thediscrimination against the traffic in suchgoods is reasonable and necessary. "!ishervs. Eangco teamship Co. 1 Phil 1#.

+nstances when the carrier may validlyrefuse to accept the goods include the ff=1.# Goods sought to be transported aredangerous objects, or substances includingdynamite and other e5plosives2.# Goods are unfit for transportation

.# Acceptance would result in overloading$.# Contrabands or illegal goods(.# Goods are injurious to health/.# Goods will be e5posed to untoward dangerli3e flood, capture by enemies and the li3e

.# Goods li3e livestoc3 will be e5posed todisease0.# tri3e8.# !ailure to tender goods on time. (Notesand Cases on the Law on Transportation and


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Public Utilities, Aquino, T. & ernando, R.P.!""# ed. p.09

+n case of carriage by railway, the carrier ise5empted from liability if carriage is insistedupon by the shipper, provided its objections

are stated in the bill of lading.

b. %atent damage= shipper should file a claimagainst the carrier within 2$ hours fromdelivery.

No#e$ ;hese rules does not apply tomisdelivery of goods. " oldan vs. %im Pon o# Purpose o) notice: ;o inform the carrier thatthe shipment has been damaged, and it ischarged with liability therefore, and to give itan opportunity to ma3e an investigation andfi5 responsibility while the matter is fresh.

;he filing of notice of claim is a conditionprecedent for recovery.

horter period may be stipulated by theparties because it merely affects theshipper@s remedy and does not affect theliability of the carrier. "P


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2. 2

2.*

P&e "&!0#!,e 0e&!od-one provided9 Civil

Code applies.

4ne year from the

date of delivery"delivered butdamaged goods#, ordate when thevessel left port orfrom the date ofdelivery to thearrastre "non*delivery or loss#.

COMBINED CARRIER AGREEMENT -ART)3 1 56N6RAL RUL6: +n case of a contract of

transportation of several legs, each carrier isresponsible for its particular leg in thecontract.

67C6PT81N: A combined carrier agreementwhere a carrier ma3es itself liable assumingthe obligations and ac>uiring as well therights and causes of action of those whichpreceded it.

A) MARITIME COMMERCE-A ) 53 +=6 1

IMPORTANT CONCEPTS$1. Berchant vessel2. Baritime lien and Preference of

Credit. )octrine of limited liability

$. Causes of revocation of voyage

(. Participants in maritime commerce/. Charter par ty. %oans on bottomry and respondentia

0. Accidents in maritime commerce

MARITIME/ADMIRALTY LAW +t is the system of laws which particularlyrelates to the affairs and business of the sea,to ships, their crews and navigation, and tomaritime conveyance of persons andproperty. (Notes and Cases on the Law onTransportation and Public Utilities, Aquino &

ernando, citin 3rancisco, p.! #

Baritime laws apply only to maritime tradeand sea voyages. (Pandect o) Co ercialLaw and *urisprudence, *ustice *ose +itu ,$-- ed.

Arrastre service is not maritime incharacter. +t refers to a contract for theunloading of goods from a vessel. "+C; + vs.Prudential Guarantee, 27 C A 2$$#

C(ARACTERISTICS OF MARITIMETRANSACTION1. Real * similar to transactions over realproperty with respect to effectivity againstthird persons which is done throughregistration. " ubiso vs. ivera, Phil. 2#.

;he evidence of real nature is shown by= 1#the limitation of the liability of the agents to

the actual value of the vessel and the freightmoney9 and 2# the right to retain the cargoand embargo and detention of the vessel"%u on tevedoring Corp v. CA, 1(/ C A1/8#9

2. 4pothecar4 * the liability of the owner ofthe value of the vessel is limited to the vesselitself (;octrine o) Li ited Liabilit4 .

;he real and hypothecary nature ofmaritime law simply means that the liabilityof the carrier in connection with lossesrelated to maritime contracts is confined tothe vessel, which stands as the guaranty fortheir settlement. "Aboiti hipping Corp. vs.General Accident !ire and %ife AssuranceCorp. 21 C A (8#.

MERC(ANT 'ESSEL essel engaged in maritime commerce,whether foreign or otherwise. (uired and transferred by any of the meansrecogni ed by law. ;hey shall continue to beconsidered as personal property. "Arts. ( ,(0(# ;hey are susceptible to ariti e liens suchas for the repair, e>uipping and provisioningof the vessel in the preparation of a voyage,as well as mortgage liabilities, in satisfactionof which a vessel may be validly arrested andsold. " hip Bortgage )ecree of 18 0#

MARITIME LIEN +t constitutes a present right of property inthe ship, a jus in re, to be afterward enforcedin admiralty by process in rem. "P-: vs. CA,

C A 01# +f the maritime lien arose prior to therecording of a preferred mortgage, it shallhave priority over the said mortgage lien."P-: vs. CA, C A 01#

ORDER OF PREFERENCE IN CASE OF SALEOF 'ESSEL

R)A) 62 6 P)D) 25 2Effe"#!,!# da#e

18/8 18 0A00l!"a

4verseas shippingonly

:oth domestic andoverseas shipping

?!nd of ale udicial udicial and

e5trajudicialO&de& of P&efe&en"e

A preferredmortgage shall haveprior ity over allclaims against thevessel, e5cept thefollowingpreferences in theorder stated=1. udicial costs ofthe proceedings9

;he preferredmortgage lien shallhave priority over allclaims against thevessel, e5cept thefollowingpreferences in theorder stated=1. ?5penses andfees allowed and


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thegoodsat thepoint ofdestinat

ion.

CA8SES OF RE'OCATION OF 'OYAGE1. &ar or interdiction of commerce92. :loc3ade9

. Prohibition to receive cargo atdestination9

$. ?mbargo9(. +nability of the vessel to navigate. "Art.

/$7#

Te&* $1. +nterdiction ofcommerce L A governmental prohibitionof commercial intercourse intended tobring about an entire cessation for the

time being of all trade whatever.2. :loc3ade L Asort of circumvallation of a place bywhich all foreign connection andcorrespondence is, as far as humanpower can effect it, to be cut off.

. ?mbargo L Aproclamation or order of a state, usuallyissued in time of war or threatenedhostilities, prohibiting the departure ofships or goods from some or all the portsof such state until further order.

PARTICIPANTS IN MARITIME COMMERCEA. hipowners and ship agents:. Captains and masters of the vessel

C. 4fficers and crew of the vessel). upercargoes?. Pilot

A) S(IPOWNERS AND S(IP AGENTSS%!0owne& -0&o0&!e#a&!o1 Person who has possession, control andmanagement of the vessel and theconse>uent right to direct her navigation andreceive freight earned and paid, while hispossession continues.

S%!0 agen# -na,!e&o1 Person entrusted with provisioning andrepresenting the vessel in the port in which itmay be found9 also includes the shipowner.

-ot a mere agent under civil law9 he issolidarily liable with the ship owner.

Powers and functions=1. Capacity to trade92. )ischarge duties of the captain, subject

to Art./789. Contract in the name of the owners with

respect to repairs, details of e>uipment,armament, provisions of food and fuel,and freight of the vessel, and all thatrelate to the re>uirements of navigation9

$. 4rder a new voyage, ma3e a new charteror insure the vessel after obtainingauthori ation from the shipowner or ifgranted in certificate of appointment.

C!,!l L!a

authori ed or not, to repair, e>uip andprovision the vessel9 "Art. (0/#

2. %oss and damage to the goods loaded onthe vessel without prejudice to their rightto free themselves from liability byabandoning the vessel to the creditors."Art. (0 #

D.# of S%!0 Agen# #o D! "%a&ge #%eCa0#a!n and Me*uip, and provisionthe vessel9 and/. 4rder repair of vessel toenable it to continue its voyage. "Art.

/17#


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ources of funds to comply with theinherent powers of the captain "in successiveorder#=

1. !rom the consignee of thevessel9

2. !rom the consignee of thecargo9. :y drawing on the ship

agent9$. :y a loan on bottomry9(. :y sale of part of the cargo."Art. /11#

)uties=1. :ring on board the propercertificate and documents and acopy of the Code of Commerce92. Deep a %og :oo3,Accounting :oo3 and !reight :oo39

. ?5amine the ship before thevoyage9$. tay on board during the

loading and unloading of the cargo9(. :e on dec3 while leaving orentering the port9/. Protest arrivals under stressand in case of shipwrec39

. !ollow instructions of andrender an accounting to the shipagent90. %eave the vessel last incase of wrec398. uirements of customs, health,etc. at the port of arrival9

11. 4bserve rules to avoidcollision912. )emand a pilot whileentering or leaving a port. "Art. /12#

A ship@s captain must be accorded areasonable measure of discretionaryauthority to decide what the safety of theship and of its crew and cargo specificallyre>uires on a stipulated ocean voyage "+nter*4rient Baritime ?nterprises +nc. vs. CA#.

-o liability for the following=1. )amages caused to thevessel or to the cargo by forcemajeure92. 4bligations contracted forthe repair, e>uipment, andprovisioning of the vessel unless hehas e5pressly bound himselfpersonally or has signed a bill ofe5change or promissory note in hisname. "Art. /27#

Sol!da& L!a

C) OFFICERS AND CREW1. ailing Bate'!irst Bate2. econd Bate

. ?ngineers$. Crew -o liability under the followingcircumstances=1. +f, before beginning voyage, captain

attempts to change it, or a naval warwith the power to which the vessel wasdestined occurs9

2. +f a disease brea3s out and be officiallydeclared an epidemic in the port ofdestination9

. +f the vessel should change owner orcaptain. "Art. /$ #

Sa!l!ng Ma#e/F!& # Ma#eecond chief of the vessel who ta3es the

place of the captain in case of absence,sic3ness, or death and shall assume all of hisduties, powers and responsibilities. "Art. /2 # )uties=

1. Provide himself with maps

and charts with astronomical tablesnecessary for the discharge of hisduties92. Deep the :innacle :oo39

. Change the course of thevoyage on consultation with thecaptain and the officers of the boat,following the decision of the captainin case of disagreement9$. esponsible for all thedamages caused to the vessel andthe cargo by reason of hisnegligence. "Arts. /20 * / 1#

Se"ond Ma#e ;a3es command of the vessel in case ofthe inability or dis>ualification of the captainand the sailing mate, assuming in such casetheir powers and responsibilities. ;hird in command )uties=

1. Preserve the hull andrigging of the vessel92. Arrange well the cargo9

. )iscipline the crew9$. Assign wor3 to crewmembers9(. +nventory the rigging ande>uipment of the vessel, if laid up."Art. / 2#

Eng!nee&


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4fficers of the vessel but have no authoritye5cept in matters referring to the motorapparatus. &hen two or more are hired, oneof them shall be the chief engineer. )uties=

1. +n charge of the motorapparatus, spare parts, and otherinstruments pertaining to theengines92. Deep the engines andboilers in good condition9

. -ot to change or repair theengine without authority of thecaptain9$. +nform the captain of anydamage to the motor apparatus9(. Deep an ?ngine :oo39/. upervise all personnelmaintaining the engine. "Art. / 2#

C&ew

;he aggregate of seamen who man a ship,or the ship@s company. uired in the accountingboo3 of the captain. "Art. /$8#

E) PILOT A person duly >ualified, and licensed, toconduct a vessel into or out of ports, or incertain waters. ;he term generally connotes a personta3en on board at a particular place for thepurpose of conducting a ship through a river,road or channel, or from a port. Baster pro hac /ice for the time being inthe command and navigation of the ship. &hile in e5ercising his functions a pilot is insole command of the ship and supersedes themaster for the time being in the commandand navigation of the ship, the master doesnot surrender his vessel to the pilot and thepilot is not the master. ;here are occasionswhen the master may and should interfereand even displace the pilot, as when the pilotis obviously incompetent or into5icated "!ar?astern hipping Company vs. CA#.

Compulsory Pilotage L tates possessingharbors have enacted laws or promulgatedrules re>uiring vessels approaching theirports to ta3e on board pilots licensed underthe local laws. (Notes and Cases on the Lawon Transportation and Public Utilities, Aquino,T. & ernando, R.P. !""# ed. p. $9

L!a


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owner to another person for a specified timeor use. "Planters Products, +nc. vs. CA, 22/

C A $ /# Pa!e $

1. hip owner or ship agent

2. Charterer Cla e $1. :areboat or demise L ;he chartererprovides crew, food and fuel. ;he charterer isliable as if he were the owner, e5cept whenthe cause arises from the unworthiness of thevessel. ;he shipowner leases to the chartererthe whole vessel, transferring to the latter theentire command, possession and conse>uentcontrol over the vessel@s navigation, includingthe master and the crew, who therebybecome the charter@s servants. +t transformsa common carrier into a private carrier.

;he charterer becomes the owner ofthe vessel pro hac vice, just for that oneparticular purpose only. :ecause the

charterer is treated as owner pro hac/ice , the charterer assumes thecustomary rights and liabilities of theshipowner to third persons and is heldliable for the e5pense of the voyage andthe wages of the seamen.

2. Contract of Affreightment A contractwhereby the owner of the vessel leases partor all of its space to haul goods for others.

;he shipowner retains the possession,command and navigation of the ship, thecharterer merely having use of the spacein the vessel in return for his payment ofthe charter hired. Dinds=

a. ;imecharter L vessel is chartered for afi5ed period of time or duration ofvoyage.b. oyage or trip charter L the vessel isleased for one or series of voyagesusually for purposes of transportinggoods for charterer.

LEASE C(ARTER PARTY +f for a definiteperiod, lessee cannotgive up the lease bypaying a portion ofthe amount agreedupon.

Charterer mayrescind charter partyby paying half of thefreightage agreedupon.

+f the leased propertyis sold to one who3nows of thee5istence of thelease, the new ownermust respect thelease.

;he new owner is notcompelled to respectthe charter party solong as he can loadthe vessel with hisown cargo. "Art. /08#

Civil law concept Commercial lawconcept

C(ARTER PARTY BILL OF LADINGAn entire or completecontract.

Bore li3e a privatereceipt which the

captain gives to

accredit goodsreceived frompersons

Consensual contract eal contract

BAREBOAT ORDEMISE C(ARTER CONTRACT OFAFFREIG(TMENT-TIME OR 'OYAGE

C(ARTER1Charterer becomesliable to otherscaused by itsnegligence

4wner remains liableas carrier and mustanswer for anybreach of duty

Charterer regardedas owner pro hacvice for the voyage

Charterer is notregarded as owner.

4wner of vesselrelin>uishespossession,command andnavigation to

charterer

;he vessel ownerretains possession,command andnavigation of the ship

Common carrier isconverted to privatecarrier.

Common carrier isnot converted to aprivate carrier.

PERSONS W(O MAY MA?E A C(ARTER1. 4wner or owners of the vessel,

either in whole or in majority part,who have legal control andpossession of the vessel

2. Charterer may subcharter entirevessel to rd person only if notprohibited in original charter."Art./ 8#

. hip agent if authori ed by theowner's or given such power in thecertificate of appointment. "Art.(80#

$. Captain in the absence of the shipagent or consignee and only if heacts in accordance with theinstructions of the agent or ownerand protects the latter@s interests."Art./78#

RE78ISITES OF A 'ALID C(ARTER PARTY 1. Consent of the contracting parties2. ?5isting vessel which should be

placed at the disposition of theshipper

. !reight$. Compliance with Art. /(2 of the

Code of Commerce

Cla. e W%!"% Ma Be In"l.ded In aC%ae& Pa

;a on "la. e Cla. e 0a&a*o.n#o& 0a&a*o.n#

"la. e


15/27

A stipulation in acharter party that incase of a maritimeaccident for whichthe shipowner is not

responsible by law,contract orotherwise, the cargoshippers, consigneesor owners shallcontribute with theshipowner in generalaverage. "Pandect ofCommercial %aw and

urisprudence, ustice ose itug, 188 ed.#

A clause in a charterparty providing thatthe C4G A shallapply, even thoughthe transportation is

domestic, subject tothe e5tent that anyterm of the bill oflading is repugnant tothe C4G A orapplicable law, thento the e5tent thereofthe provision of thebill of lading is void."Pandect ofCommercial %aw and

urisprudence, ustice ose itug, 188 ed.#

R!g%# and O


16/27

party for loading or unloading or forsailing.

. )eadfreight Lthe amount paid by or recoverable froma charterer of a ship for the portion of the

ship@s capacity the latter contracted forbut failed to occupy.4. %ay )ays * daysallowed to charter parties for loading andunloading the cargo.5. ?5tra %ay )ays days which follow after the lay days haveelapsed.

8S8AL FORMS OF CONS8MMATINGCONTRACTS1. C.+.!. L cost, insurance and freight92. !.4.:. * free on board9

. !.A. . * free alongside ship9 and$. C. J !. * cost and freight.

TRANSS(IPMENT OF GOODS ;he act of ta3ing cargo out of one ship andloading it in another, or the transfer of goodsfrom the vessel stipulated in the contract ofaffreightment to another vessel before theplace of destination named in the contracthas been reached, or the transfer for furthertransportation from one ship or conveyanceto another.

+t is not dependent on the ownership of thetransporting ships or in the change ofcarriers, but rather on the fact of actualphysical transfer of cargo from one vessel toanother.

+f done without legal e5cuse, howevercompetent and safe the vessel into which thetransfer is made, is a violation of contract andinfringement of right of shipper and subjectscarrier to liability if freight is lost event bycause otherwise e5cepted. "BagellanBanufacturing vs. CA, 271 C A 172#

LOAN ON BOTTOMRY ANDRESPONDENTIA A real, unilateral, aleatory contract, byvirtue of which one person lends to another acertain amount of money or goods on thingse5posed to maritime ris3s, which amount,with its earnings, is to be returned if thethings are safely transported, and which islost if the latter are lost.

LOAN ONBOTTOMRY

LOAN ONRESPONDENTIA

)efinition%oan made byshipowner or shipagent guaranteedby vessel itself andrepayable uponarrival of vessel atdestination. "Art.

18#

%oan ta3en onsecurity of the cargoladen on a vessel,and repayable uponsafe arrival of cargoat destination. "Art.

18#

&ho may contract

hipowner or shipagent. 4utside ofthe residence of theowners * thecaptain.

4nly the owner ofthe cargo.

Common elements=1. ?5posure of security to marine peril92. 4bligation of the debtor conditioned

only upon safe arrival of the security atthe point of destination.

!orms=1. Public instrument2. Policy signed by the contracting parties

and the bro3er ta3ing part therein. Private instrument "Art. 27#

Contents=1. Dind, name and registry of the vessel92. -ame, surname and domicile of the

captain9. -ames, surnames and domiciles of the

borrower and the lender9

$. Amount of the loan and the premiumstipulated9(. ;ime for repayment9/. Goods pledged to secure repayment9

. oyage during which the ris3 is run"Art. 21#

BOTTOMRY/RESPONDENTIA

ORDINARY LOAN-M8T88M1

-ot subject to 6sury%aw

ubject to 6sury%aw

%iability of theborrower is

contingent on thesafe arrival of thevessel or cargo atdestination

-ot subject to anycontingency

"absolute liability#

;he last lender is apreferred creditor

;he first lender is apreferred creditor

W(EN LOAN ON BOTTOMRY ORRESPONDENTIA REGARDED AS SIMPLELOAN

1. %ender loaned an amount largerthan the value of the object due tofraudulent means employed by theborrower. "A ;. 2/#

2. !ull amount of the loan is not usedfor the cargo or given on the goods ifall of them could not have beenloaded, the balance will beconsidered a simple loan. "A ;. 2 #

. +f the effects on which the money ista3en is not subjected to any ris3."A ;. 28#

No#e = 6nder e5isting laws, the parties to aloan, whether ordinary or maritime, mayagree on any rate of interest. "C: Circular87(#

MARINE INS8RANCE LOAN ONBOTTOMRY OR


17/27

RESPONDENTIA+ndemnity is paid afterthe loss has occurred

+ndemnity is paidin advance byway of a loan

+n case of loss of the

vessel due to a ris3insured against, theobligation of the insurerbecomes absolute

+n case of loss of

the vessel due toa marine peril,the obligation ofthe borrower topay ise5tinguished

Consensual contract eal contract

( 0o#%e"a& Na#.&e of Bo##o*& /Re 0onden#!a

56N6RAL RUL6: ;he obligation of theborrower to pay the loan is e5tinguished if thegoods given as security are absolutely lost byreason of an accident of the sea, during thevoyage designated, and if it is proven that thegoods were on board.

67C6PT81N':1. %oss due to inherent defect92. %oss due to the barratry on the part of

the captain9. %oss due to the fault or malice of the

borrower9$. ;he vessel was engaged in contraband9

and(. ;he cargo loaded on the vessel be

different in from that agreed upon.

Con".&&en"e of Ma&!ne In .&an"e andLoan on Bo##o*& /Re 0onden#!a

1. ;he insurable interest of the ownerof a ship hypothecated by bottomryis only the e5cess of the value overthe amount secured by bottomry." ec. 171, +nsurance Code#

2. ;he value of what may be saved incase of shipwrec3 shall be dividedbetween the lender and the insurerin proportion to the interest of eachone. "Art. (#

-ote= +f a vessel is hypothecated by bottomryonly the e5cess is insurable, since a loan onbottomry parta3es of the nature li3ewise ofan insurance coverage to the e5tent of theloan accommodation. ;he same rule wouldapply to the hypothecation of the cargo byrespondentia. (Pandect o) Co ercial Lawand *urisprudence, *ustice *ose +itu , $--ed.

ACCIDENTS IN MARITIME COMMERCE1. Averages2. Arrival 6nder tress

. Collision$. hipwrec3

A'ERAGE An e5traordinary or accidental e5penseincurred during the voyage in order topreserve the cargo, vessel or both, and alldamages or deterioration suffered by thevessel from departure to the port ofdestination, and to the cargo from the port ofloading to the port of consignment. "Art. 07/#

;he person whose property has been savedmust contribute to reimburse the damagecaused or e5pense incurred if the situationconstitutes general average. Classes=

1. Particular or imple Average2. Gross or General Average &here both vessel and cargo are saved, it

is general average9 where only the vessel oronly the cargo is saved, it is particularaverage.

?5penses incurred to refloat a vessel,which accidentally ran aground, in order tocontinue its voyage, do not constitute generalaverage. -ot only is there absence of amarine peril, common safety factor, anddeliberateness. +t is the safety of theproperty, and not the voyage, whichconstitutes the true foundation of generalaverage. "A. Bagsaysay, +nc. vs. Agan,G. .-o. %*/ 8 , an. 1, 18((#

PARTIC8LAR ORSIMPLE

GROSS ORGENERAL

Def!n!#!on)amages ore5penses caused tothe vessel or cargothat did not inure tothe common benefit,and borne byrespective owners."Art. 078#

)amages ore5pensesdeliberately causedin order to save thevessel, its cargo orboth from real and3nown ris3. "Art.011#

Re:.! !#e1. common

danger92. deliberate

sacrifice9. success9

$. properformalities andlegal steps.

L!a

;he insurers"Art.0(8# andlenders on bottomryand respondentiashall li3ewisecontribute."Art. 2#.

N.*


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R!g%# #o &e"o,e&-o reimbursement ;here may be

reimbursement?!nd -no# e "l. !,e1

Art. 078 Art. 011

P&o"ed.&e fo& &e"o,e&1. Assembly and

deliberation2. esolution of the

captain. ?ntry of the

resolution in thelogboo3

$. )etailed minutes(. )elivery of the

minutes to themaritime judicialauthority of thefirst port, within2$ hours fromarrival,

/. atification bycaptain underoath. "Arts. 01 *01$#

GOODS NOT CO'ERED BY GENERALA'ERAGE E'EN IF SACRIFICED

1. Goods carried on dec3. "A ;.0((#2. Goods not recorded in the boo3s or

records of the vessel. "A ;.0(( "2##. !uel for the vessel if there is more

than sufficient fuel for the voyage." ule + , Eor3*Antwerp ule#

;e##! on Act of throwing cargo overboard in order tolighten the vessel. 4rder of goods to be cast overboard=

1. ;hose which are on thedec3, preferring the heaviest onewith the least utility and value92. ;hose which are below theupper dec3, beginning with the onewith greatest weight and smallestvalue. "Art. 01(#

ettisoned goods are not res nullius nordeemed HabandonedI within the meaning ofcivil law so as to be the object of occupationby salvage. (Pandect o) Co ercial Law and

*urisprudence, *ustice *ose +itu , $-- ed.

+n order that the jettisoned goods may beincluded in the gross or general average, thee5istence of the cargo on board should beproven by means of the bill of lading. "Art.01/#

Yo& +An#we&0 -Y+A1 R.le onDe#e&*!n!ng L!a

1. %ac3 ofprovisions due tonegligence to carryaccording tousageandcustoms9

2. is3 ofenemynot well3nown ormanifest

. )efect ofvesseldue toimproperrepair9and

$. Balice,negligence, lac3 offoresightor s3ill ofcaptain."Art. 027#

;heshipowner orship agent isliable in caseof unlawfularrival understress. :utthey shall notbe liable forthe damagescaused byreason of alawful arrival."Art. 021#

+t is the duty of the captain to continue thevoyage without delay after the cause of thearrival under stress has ceased failing in suchduty renders him liable.


19/27

teps=1. Captain should determine during the

voyage if there is well founded fearof sei ure, privateers and other validgrounds9

2. Captain shall assemble the officersand summon the persons interestedin the cargo who may attend themeeting but without a right to vote9

. ;he officers shall determine andagree if there is well*founded reasonafter e5amining the circumstances.

;he captain shall have the decidingvote9

$. ;he agreement shall be drafted andthe proper minutes shall be signedand entered in the log boo39

(. 4bjections and protests shallli3ewise be entered in the minutes.

COLLISION

+mpact of two vessels both of which aremoving.

All! !on +mpact between a moving vessel and astationary one.

Na.#!"al R.le #o De#e&*!ne Negl!gen"e1. &hen twovessels are about to enter a port, thefarther one must allow the nearer toenter first9 if they collide, the fault ispresumed to be imputable to the onewho arrived later, unless it can be provedthat there was no fault on its part.2. &hen two

vessels meet, the smaller should give theright of way to the larger one.

. A vessel leavingport should leave the way clear foranother which may be entering the sameport.$. ;he vessel whichleaves later is presumed to have collidedagainst one which has left earlier.(. ;here is apresumption against the vessel whichsets sail in the night./. ;here is apresumption against the vessel withspread sails which collides with anotherwhich is at anchor and cannot move,

even when the crew of the latter hasreceived word to lift anchor, when therewas not sufficient time to do so or therewas fear of a greater damage or otherlegitimate reason.

. ;here is apresumption against an improperlymoored vessel.0. ;here is apresumption against a vessel which hasno buoys to indicate the location of itsanchors to prevent damage to vesselswhich may approach it.8. essels musthave Hproper loo3*outsI or personstrained as such and who have no other

duty aside therefrom. " mith :ell v. CA#

Na.#!"al R.le a #o Sa!l!ng 'e el andS#ea* %!01. &here a steamship and a sailing vessel

are approaching each other from

opposite directions, or on intersectinglines, the steamship from the momentthe sailing vessel is seen, shall watchwith the highest diligence her course andmovements so as to be able to adoptsuch timely means of precaution as willnecessarily prevent the two boats fromcoming in contact.

2. ;he sailing vessel is re>uired to 3eep hercourse unless the circumstances re>uireotherwise.

one of T!*e !n #%e Coll! !on of 'e el1. 3irst >one L all time up to the moment

when ris3 of collision begins. -o rule is as yet applicable for none is

necessary.2. 'econd >one L time between moment

when ris3 of collision begins and momentit becomes a practical certainty.

+t is in this period where conduct of thevessels is primordial. +t is in this one thatvessels must strictly observe nautical rules,unless a departure therefrom becomesnecessary to avoid imminent danger.3. Third >one L time when collision is certain

and time of impact.An error in this one would no longer be

legally conse>uential. 6rror in 6?tre is * sudden movement made

by a faultless vessel during the third one of

collision with another vessel which is at faultduring the 2nd one. ?ven if such suddenmovement is wrong, no responsibility will fallon said faultless vessel. "6rrutia and Co. v.:aco iver Plantation Co., 2/ P


20/27

. 3ortuitous e/ent )orce aBeure -o liability. ?ach bears its own loss. "Art.0 7#

;he doctrine of res ipsa lo>uitur applies in

case a moving vessel stri3es a stationaryobject, such as a bridge post, doc3, ornavigational aid. "!ar ?astern hipping v. CA,%u on tevedoring vs. CA#

?ven if the cause of action against thecommon carrier is based on >uasi*delict, thedefense of due diligence in the selection andsupervision of employees is unavailing incase of a maritime tort resulting in collision. +tis not a civil tort governed by the Civil Codebut a maritime one governed by Arts. 02/*0 8 of the Code of Commerce. "Banila

teamship vs. +nsa Abdulhaman#

)octrine of %ast Clear Chance and ule on

Contributory -egligence cannot be applied incollision cases because of Art.02 of the Codeof Commerce. (Notes and Cases on the Lawon Transportation and Public Utilities, Aquino,T. & ernando, R.P. !""# ed.

MARITIME PROTEST Condition precedent or prere>uisite torecovery of damages arising from collisionsand other maritime accidents. +t is a written statement made under oathby the captain of a vessel after theoccurrence of an accident or disaster in whichthe vessel or cargo is lost or damaged, withrespect to the circumstances attending suchoccurrence, for the purpose of recoveringlosses and damages.

?5cuses for not filing protest= 1# where theinterested person is not on board the vessel9and 2# on collision time, need not beprotested. "Art. 0 /# Cases applicable=

1. Collision "Art. 0 (#92. Arrival under stress "Art. /12"0##9

. hipwrec3s "Arts. /12"1(#, 0$ #9$. &here thevessel has gone through a hurricaneor when the captain believes thatthe cargo has suffered damages oraverages "Art. /2$#.

&ho ma3es= Captain

&hen made= within 2$ hours from the timethe collision too3 place. :efore whom made= competent authorityat the point of collision or at the first port ofarrival, if in the Philippines and to thePhilippine consul, if the collision too3 placeabroad. "Art. 0 (#

S(IPWREC? +t is the loss of the vessel at sea as aconse>uence of its grounding, or runningagainst an object in sea or on the coast. +toccurs when the vessel sustains injuries dueto a marine peril rendering her incapable ofnavigation.

+f the wrec3 was due to malice, negligence

or lac3 of s3ill of the captain, the owner of the

vessel may demand indemnity from saidcaptain. "Art. 0$1#

;he rules on collision or allision, as may bepertinent, can e>ually apply to shipwrec3s.

SPECIAL CONCEPTSARRASTRE SER'ICE A contract for the unloading of goods froma vessel. A00l!"a

Botors v. Prince %ine#. olidary liability with the common carrier

No#e$ +n order that the arrastre operator maybe held liable, the consignee must prove thatthe damage was due to the negligence andwhile the goods are in the custody of thearrastre operator. "uantity, description andconditions of the cargo inside the container isthe sole responsibility of the shipper, unlessthere is stipulation to the contrary. "6 %inesvs. Comm. 4f Customs, eyma :ro3erage v.Phil.


21/27

damage to the shipment that may be found,inspection o) the oods should be done at

pier%side . ":an3ers vs. CA#

III) CARRIAGE OF GOODS BY SEA

ACT/COGSA -C)A) No) 651APPLICABILITY

;he transportation must be=1. &ater'maritimetransportation92. for the carriageof goods9 and

. overseas'international'foreign "from foreign port toPhilippine port#.

+t can be applied in domestic seatransportation if agreed upon by the parties."Clause para ount or para ount clause #

IMPORTANT FEAT8RES$1. Amount ofcarrier@s liability2. -otice ofdamage

. Prescriptiveperiod

AMO8NT OF CARRIER>S LIABILITY 6nder the ec. $"(#, the liability limit is setat Q(77 per pac3age or customary freight unitunless the nature and value of such goods isdeclared by the shipper. ;his is deemedincorporated in the bill of lading even if notmentioned in it. "?astern hipping vs. +AC,1(7 C A $/ #

-ote that Art. 1 $8, -CC applies todomestic'inter*island'coastwise trade.

NOTICE OF DAMAGE -SEC) -611 R.le $a. Patent damage= shipper should file a

claim with the carrier immediately upondelivery

b. %atent damage= shipper should file aclaim with the carrier within three daysfrom delivery.

No#e = ;he filing of a notice of claim is not acondition precedent.

PRESCRIPTI'E PERIOD Action for loss or damage to the cargoshould be brought within one year after=

a. )e livery of the goods"delivered but damaged goods#9 orb. ;he date when the goodsshould have been delivered "non*delivery#. " ec. F/ #

H%oss or )amageI as applied to the C4G Acontemplates a situation where no delivery atall was made by the shipper of the goodsbecause the same had perished, gone out ofcommerce, or disappeared in such a way thattheir e5istence is un3nown or they cannot berecovered. ;hus, it is inapplicable in case ofmisdelivery or conversion. "Ang vs. American

teamship Agencies +nc.# and damage arising

from delay or late delivery "Bitsui 4. .D. %ines%td. vs. CA#. +n such instance the, Civil Coderules on prescription shall apply.

;he one*year prescriptive period is

suspended by=1. ;he e5pressagreement of the parties "6niversal

hipping %ines, +nc. vs. +AC, 100C A 1 7#

2. ;he filing ofan action in court until it isdismissed. " tevens J Co. vs.-ordeutscher %loyd, / C A 107#

;he one*year period shall run from deliveryof the last pac3age and is not suspended bye5trajudicial demand. ")ole Phils.,+nc. vs.Baritime Co.,1$0 C A 110#

;he one*year period shall run from delivery

to the arrastre operator and not to theconsignee. "6nion Carbide Phils, +nc. vs.Banila ailroad Co., C A (8#

;he insurer e5ercising its right ofsubrogation is bound by the one*yearprescriptive period.


22/27

contracts, and it shall not lose itsinternational character merely because onecontract or a series of contracts is to beperformed entirely within a territory subjectto the sovereignty, su erainty, mandate, or

authority of the same


23/27

+n 6nited Airlines vs. 6y the two*yearprescriptive period was not applied where theairline employed delaying tactics.

R8LE IN CASE OF 'ARIO8S S8CCESSI'ECARRIERS1. Carriage of passengers

56N6RAL RUL6: Action is filed only againstthe carrier in which the accident or delayoccurred.

67C6PT81N: Agreement or contractwhereby the first carrier assumed liability forthe whole journey.2. Carriage of baggage or goods

a. Passenger or consignor can file anaction against the )irst carrier andthe carrier in which the damageoccurred

b. Passenger or consignee can file anaction against the last carrier andthe carrier in which the damageoccurred.

;hese carriers are jointly and severallyliable. "Art. 7#

A contract of international carriage by air,although performed by different carriersunder a series of airline tic3ets constitutes asingle operation. Bembers of the+nternational Air ;ransportation Association"+A;A# are under a general pool partnershipagreement wherein they act as agent of eachother in the issuance of tic3ets to contractedpassengers to boost tic3et sales worldwideand at the same time provide passengers

easy access to airlines which are otherwiseinaccessible in some parts of the world."American Airlines vs. CA#

6nder a general pool partnershipagreement, the tic3et*issuing airline is theprincipal in a contract of carriage while theendorsee*airline is the agent. ;he obligationof the former remained and did not ceaseeven when the breach occurred not on itsown flight but on that of another airline whichhad underta3en to carry the passengers toone of their destinations. "China Airlines vs.Chio3#

;8RISDICTION

At the option of the plaintiff, the action fordamages may be filed in the=a. Court of domicile of thecarrier9b. Court of its principal placeof business9c. Court where it has a placeof business through which thecontract has been made9 ord. Court of the place ofdestination. "Art. 20"1##

NOTE$ +t is the passenger@s HultimatedestinationI not Han agreed stopping placeIthat determines the country where suit is tobe filed.

;he forum of action provided in Art. 20"1#

is a matter of jurisdiction rather than of

venue. " antos +++ vs. -orthwest9 2A C. . .#

') SAL'AGE LAW -A"# No) 6261

SAL'AGE

Two "on"e0# $1. ervices one person renders to the ownerof a ship or goods, by his own labor,preserving the goods or the ship which theowner or those entrusted with the care ofthem have either abandoned in distress atsea, or are unable to protect or secure.2. Compensation allowed to persons bywhose voluntary assistance a ship at sea orher cargo or both have been saved in wholeor in part from impending sea peril, or suchproperty recovered from actual peril or loss,as in cases of shipwrec3, derelict orrecapture. Re:.! !#e $

1. alid object of salvage9

2. 4bject must have beene5posed to marine peril "not perils ofthe ship#9

. ervices renderedvoluntarily "neither an e5isting dutynor out of a pre*e5isting contract#9$. ervices are successful,total or partial.

S.


24/27

CONTRACT OF TOWAGE A contract whereby one vessel, usuallymotori ed, pulls another, whether loaded ornot with merchandise, from one place to

another, for a compensation. +t is a contractfor services rather than a contract of carriage.

SAL'AGE TOWAGE

Governed by speciallaw "Act -o. 2/1/#

Governed by CivilCode on contract oflease

e>uires success,otherwise nopayment

uccess is notre>uired

Bust be done withthe consent of thecaptain'crewmen

4nly the consent ofthe tugboat owneris needed

essel must beinvolved in anaccident

essel need not beinvolved in anaccident

!ees distributedamong crewmen

!ees belong to thetugboat owner

R8LES ON SAL'AGE REWARD1. ;hereward is fi5ed by the ;C judge in theabsence of agreement or where thelatter is e5cessive. " ec. 8#2. ;hereward should constitute a sufficientcompensation for the outlay and effort ofthe salvors and should be liberal enoughto offer an inducement to others torender services in similar emergencies inthe future.

. +f sold "noclaim being made within months frompublication#, the proceeds, afterdeducting e5penses and the salvageclaim, shall go to the owner9 if the latterdoes not claim it within years, (7O ofthe said proceeds shall go to the salvors,who shall divide it e>uitably, and theother half to the government. " ecs. 11*12#$. +f a vesselis the salvor, the reward shall bedistributed as follows=

a. (7O to the shipowner9b. 2(O to the captain9 and

c. 2(O to the officers and crew inproportion to their salaries. " ec. 1 #

;a3ing passengers from a sin3ing ship,without rendering any service in rescuing thevessel, is not a salvage service, being a dutyof humanity and not for reward.

'I) P8BLIC SER'ICE ACT-C)A) No) 2461

P8RPOSES$1. ;o secureade>uate, sustained service for thepublic at the least possible cost9

2. ;o protect thepublic against unreasonable chargesand poor, inefficient service9

. ;o protect andsecure investments in publicservices9$. ;o preventruinous competition.

A8T(ORITY TO OPERATE P8BLICSER'ICES

56N6RAL RUL6: -o public service shalloperate without having been issued acertificate of public convenience or acertificate of public convenience andnecessity.

67C6PT81N':1. &arehouses92. Animal drawnvehicles and bancas moved by oar orsail9

. Airships, e5ceptfor the fi5ing of ma5imum rates forfare and freight9$. adiocompanies, e5cept for rates fi5ing9(. Public servicesowned or operated by thegovernment, e5cept as to ratesfi5ing9/. +ce plants9 and

. Public mar3ets.

P8BLIC SER'ICE A person who owns, operates, manages orcontrols in the Philippines for hire orcompensation, with general or limitedclientele, whether permanent, occasional oraccidental, and done for general businesspurposes, any common carrier or publicutility, ice plants, power and water supplies,communication and similar public services." ec. 1 b, CA 1$/#

A casual or incidental service devoid ofpublic character and interest is not broughtwithin the category. ;he >uestion depends onsuch factors as the e5tent of services,whether such person or company has heldhimself or itself out as ready to serve thepublic or a portion of the public generally."%u on tevedoring vs. P C#

NOTE = ;he Public ervice Commissioncreated under the Public ervice %aw hasalready been abolished under P.). -o. 1 andother issuances. +t has been replaced by thefollowing government agencies= %;49 %;! :9A;49 :4?9 -;C9 -?A9 ? :9 -& C9 CA:9 andB+A.


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CERTIFICATE OFP8BLIC

CON'ENIENCE-CPC1

CERTIFICATE OFP8BLICCON'ENIENCEAND NECESSITY

-CPCN1

An authori ationissued by theappropriategovernment agencyfor the operation ofpublic services forwhich no franchise,either municipal orlegislative, isre>uired by law,e.g., commoncarriers.

An authori ationissued by theappropriategovernment agencyfor the operation ofpublic service forwhich a priorfranchise is re>uiredby law9 e.g.telephone and otherservices.

A CPC or a CPC- constitutes neither afranchise nor a contract, confers no propertyright, and is a mere license or a privilege. ;heholder of said certificate does not ac>uire aproperty right in the route covered thereby.-or does it confer upon the holder anyproprietary right or interest or franchise in thepublic highways. evocation of this certificatedeprives him of no vested right. -ew andadditional burdens, alteration of thecertificate, or even revocation or annulmentthereof is reserved to the tate. "%u>ue vs.

illegas, 7 C A $70#

+t is a HpropertyI and has a considerable

value and can be the subject of sale orattachment. "Cogeo*Cubao 4perators and)rivers Assn. vs. CA, 27 C A $ ,

aymundo vs. %uneta Botor Co.#

RE78REMENTS FOR GRANTING CPC ORCPCN1. Applicant must be a citi en of the

Philippines or a corporation or entity /7Oof the capital of which is owned by suchciti ens9

2. Applicant must prove public necessity9. Applicant must prove that the operation

of the public service proposed and theauthori ation to do business will promotethe public interest on a proper and

suitable manner9$. Applicant must have sufficient financialcapability to underta3e the proposedservices and meeting the responsibilitiesincident to its operation.

POWERSRE78IRING

PRIOR NOTICEAND (EARING

POWERSE9ERCISABLE

WIT(O8T PRIORNOTICE AND

(EARING

1. +ssuance ofCPC or CPC-9

2. !i5ing of rates,

1. +nvestigationany matterconcerning

tolls, andcharges9

. etting up ofstandards andclassifications9

$. ?stablishmentof rules tosecureaccuracy of allmeters and allmeasuringappliances9

(. +ssuance ofordersre>uiringestablishmentormaintenanceof e5tension offacilities9

/. evocation, or

modification ofCPC or CPC-9. uspension of

CPC or CPC-,e5cept when it isnecessary to avoidserious andirreparabledamage orinconvenience tothe public orprivate interest, inwhich case, asuspension notmore than 7 daysmay be ordered,

prior to thehearing. " oriano v.Bedina, 1/$ C A

/#

public service92. e>uiring

operators tofurnish safe ,ade>uate, and

proper service9. e>uiring publicservices to paye5penses ofinvestigation9

$. aluation ofproperties ofpublic utilities9

(. ?5aminationand test ofmeasuringappliances9

/. Grant of specialpermits to ma3ee5tra or specialtrips in

territoriesspecified in thecertificate9

. 6niformaccountingsystem andfurnishing ofannual reports9

0. Compellingcompliance withthe laws andregulations.

8NLAWF8L ACTS OF P8BLIC 8TILITYCOMPANIES1. ?ngagement in public service business

without first securing the propercertificate9

2. Providing or maintaining unsafe,improper or inade>uate service asdetermined by the proper authority9

. Committing any act of unreasonable andunjust preferential treatment to anyparticular person, corporation or entity as

determined by the proper authority9$. efusing or neglecting to carry public

mail upon re>uest. " ecs. 10 and 18#

ACTS RE78IRING PRIOR APPRO'AL1. ?stablish and maintain individual or joint

rates92. ?stablish and operate new units9

. +ssue free tic3ets9$. +ssue any stoc3 or stoc3 certificates

representing an increase of capital9(. Capitali e any franchise in e5cess of the

amount actually paid to the Government9/. ell, alienate, mortgage or lease

property, certificates or franchise.


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6nder ec. 27"g# of C.A. -o. 1$/, the sale,etc. may be negotiated and completed beforethe approval by the proper authority. +tsapproval is not a condition precedent to thevalidity of the contract. ;he approval is

necessary only to protect public interest.PRIOR OPERATOR/OLD OPERATOR R8LE ;he rule allowing an e5isting franchisedoperator to invo3e a preferential right withinthe authori ed territory as long as he renderssatisfactory and economical service.

;he policy is not to issue a certificate to asecond operator to cover the same field andin competition with a first operator who isrender ing suffic ient, ade>uate andsatisfactory service. ;he prior operator mustfirst be given an opportunity to improve itsservice, if inade>uate or deficient. Purpose= ;o prevent ruinous and wastefulcompetition in order that the interests of the

public would be conserved and preserved.

+t subordinates the prior applicant rulewhich gives the first applicant priority only ifthings and circumstances are e>ual.

&here the operator either fails or neglectsto ma3e the improvement or effect theincrease in services, especially when giventhe opportunity, new operators should begiven the chance to give the services neededby the public.

PRIOR APPLICANT R8LE Presupposes a situation when twointerested persons apply for a certificate tooperate a public utility in the samecommunity over which no person has as yetgranted any certificate. +f it turns out, afterthe hearing, that the circumstances betweenthe two applicants are more or less e>ual,then the applicant who applied ahead of theother, will be granted the certificate.

RATE+FI9ING POWER ;he rate to be fi5ed must be just, foundedupon conditions which are fair and reasonableto both the owner and the public. A rate is just and reasonable if it conformsto the following re>uirements=

1. 4ne which yieldsto the carrier a fair return upon thevalue of the property employed inperforming the service9 and2. 4ne which is fairto the public for the servicerendered.

REGISTERED OWNER R8LE ;he registered owner of a certificate ofpublic convenience is liable to the public forthe injuries or damages suffered by thirdpersons caused by the operation of saidvehicle, even though the same had beentransferred to a third person.

;he registered owner is not allowed toescape responsibility by proving that a third

person is the actual and real owner Reason = +t

would be easy for him, by collusion withothers or otherwise, to transfer theresponsibility to an indefinite person, or toone who possesses no property with which torespond financially for the damage or injury

done. "?re o, et al. vs. epte 172 Phil 17 #.?ABIT SYSTEM A system whereby a person who has beengranted a certificate of public convenienceallows other persons who own motor vehiclesto operate under such license, for a fee orpercentage of such earnings. +t is void andine5istent under Art. 1$78, Civil Code.

Effe"# $1. ;he transfer, sale, lease or assignment of

the privilege granted is valid between thecontracting parties but not upon thepublic or third persons. "Gelisan vs.Alday, 1($ C A 00#

2. ;he registered owner is primarily liablefor all the conse>uences flowing from theoperations of the carrier.

;he public has the right to assumethat the registered owner is the actual orlawful owner thereof. +t would be verydifficult and often impossible, as a

practical matter, for the public to enforcetheir rights of action that they may havefor injuries inflicted by the vehicle i) the4should be required to pro/e who theactual owner is . ":enedicto vs. +AC, 10

C A ($ #. ;he thrust of the law in enjoining the

3abit system is to identify the personupon whom responsibility may be fi5edwith the end in view of protecting theriding public "%im vs. CA C A 8$#.

$. ;he registered owner cannot recoverfrom the actual owner and the lattercannot obtain transfer of the vehicle tohimself, both being in pari delicto. ";ejaBar3eting vs. +AC#


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5. !or the better protection of the public,both the registered owner and the actualowner are jointly and severally liable withthe driver. "Kamboanga ;ransportationCo. vs. CA#

Documents

San beda notes