PRELIMINARIES (culled and lifted from Commercial law Review, 2012 Ed. and Revisiting Philippine Commercial Law, both by Cesar L. Villanueva)

Coverage of Commercial Law

... the branch of private law that provides for the rules that govern the rights, obligations, and relations of persons engaged in commerce or trade, and necessarily includes the purchase, sale, exchange, traffic or distribution of goods, commodities, productions, services or property, tangible or intangible, including the instrumentalities and agencies by which they are promoted and the means and appliances by which they are carried on.

Likewise, the term includes both concept of laws relating to trade, which is the business traffic within the limitations of a state, and commerce, which covers the intercourse with foreign states.

Characteristics of Commercial Law

Principal characteristics of Commercial Law:a. Universal - universal or international because it exist in every civilized b. Progressive - progressive because as time passes by Commercial Law accumulates new ideas and keeps abreast with contemporary developmentsc. Equitable - since commercial transactions involve the exchange of values or consideration.d. Customary embodies rules that are followed from time to time or invoked in everyday transactions.

Postulates:a. Habitualness - transactions generally arise from the element of repetition (i.e. a single act of sale does not make the seller a merchant within the law)b. Time is of the essence if no period fixedm an obligation becomes demandable in 10 days, unlike in Civil Law where the courts must fix an unspecified period.c. Delay and Demand - every debtor to a commercial contract would be in mora without making demand (mora ex re), unlike in Civil Law where demand is necessary.d. Independent branch of private laws mercantilist theory: commercial law is distinct from civil law. However, what prevails is the mixed theory, in that civil and commercial laws supplement one another.

Constitutional Provisions on Commerce and Trade

Section 1 of Article XII on National Economy and Patrimony, our present 1987 Constitution maps out in broad details the national goal and the role of commerce and economy in the national life, thus:

SECTION 1. THE GOALS OF THE NATIONAL ECONOMY ARE A MORE EQUITABLE DISTRIBUTION OF OPPORTUNITIES, INCOME, AND WEALTH; A SUSTAINED INCREASE IN THE AMOUNT OF GOODS AND SERVICES PRODUCED BY THE NATION FOR THE BENEFIT OF THE PEOPLE; AND AN EXPANDING PRODUCTIVITY AS THE KEY TO RAISING THE QUALITY OF LIFE FOR ALL, ESPECIALLY THE UNDERPRIVILEGED.

THE STATE SHALL PROMOTE INDUSTRIALIZATION AND FULL EMPLOYMENT BASED ON SOUND AGRICULTURAL DEVELOPMENT AND AGRARIAN REFORM, THROUGH INDUSTRIES THAT MAKE FULL AND EFFICIENT USE OF HUMAN AND NATURAL RESOURCES, AND WHICH ARE COMPETITIVE IN BOTH DOMESTIC AND FOREIGN MARKETS. HOWEVER, THE STATE SHALL PROTECT FILIPINO ENTERPRISES AGAINST UNFAIR FOREIGN COMPETITION AND TRADE PRACTICES.

IN THE PURSUIT OF THESE GOALS, ALL SECTORS OF THE ECONOMY AND ALL REGIONS OF THE COUNTRY SHALL BE GIVEN OPTIMUM OPPORTUNITY TO DEVELOP, PRIVATE ENTERPRISES, INCLUDING CORPORATIONS, COOPERATIVES, AND SIMILAR COLLECTIVE ORGANIZATIONS, SHALL BE ENCOURAGED TO BROADEN THE BASE OF THEIR OWNERSHIP.

Fr. Bernas enumerates the 3 constitutional directions mandated by the section, namely:1. ...it sets the dual goal of dynamic productivity and a more equitable distribution of what is produced.2. ...it seeks complementarity between industrialization and agricultural development.3. ...it is protective of things Filipino.

Commissioner Villegas, who introduced the section during the proceedings, admitted that equity has been placed in first order, and economic growth being the last, to serve as constitutional guidelines for the various branches of the government for the promotion of the common good in the economic sphere.

The economic nationalism under Section 1, Article XII, is complemented by Sections 19 and 20, in Article II on Declaration of Principles and State Policies, thus

SEC. 19. THE STATE SHALL DEVELOP A SELF-RELIANT AND INDEPENDENT NATIONAL ECONOMY EFFECTIVELY CONTROLLED BY FILIPINOS.

SEC. 20. THE STATE RECOGNIZES THE INDISPENSABLE ROLE OF THE PRIVATE SECTOR, ENCOURAGES PRIVATE ENTERPRISE, AND PROVIDES INCENTIVES TO NEEDED INVESTMENTS.

Sections 19 and 20 are said to represent two of the pillars of the economic policy of the Constitution, and together with Section 1 of Article XII, circumscribe the evolving Philippine economic policy by which Filipino businessmen and entrepreneurs may fasten the support they can expect from their Government, and by which foreign investors may determine the legality and viability of their investments within Philippine territory. The same flagship provisions of the 1987 Constitution also provide framework upon which it can be determined whether the actions taken the Executive Department, or the laws enacted by the Legislative Department, having a bearing on Philippine Commercial Law, may be adjudged as being on a solid basis of reliance upon which to proceed with an investment opportunity in the Philippines.

National Hierarchy of Values

We believe in being in a nation that cares first and foremost for its masses, rather than emphasizing the individualistic rights to property and livelihood. This point is well-conceded in Sections 9 and 10, Article II of the 1987 Constitution, in our "Declaration of Principles," thus:

SEC. 9. THE STATE SHALL PROMOTE A JUST AND DYNAMIC SOCIAL ORDER THAT WILL ENSURE THE PROSPERITY AND INDEPENDENCE OF THE NATION AND FREE THE PEOPLE FROM POVERTY THROUGH POLICIES THAT PROVIDE ADEQUATE SOCIAL SERVICES, PROMOTE FULL EMPLOYMENT, A RISING STANDARD OF LIVING, AND AN IMPROVED QUALITY OF LIFE FOR ALL.

SEC. 10. THE STATE SHALL PRMOTE SOCIAL JUSTICE IN ALL PHASES OF NATIONAL DEVELOPMENT.

In constitutional language, we declare that, above all else, equitable distribution of wealth and opportunities should be the main goals of society, and all activities, resources and equity shall be deployed to achieve such ends; that economic progress, although important, when it benefits only the few would be an unwanted boon.

This socialist spirit of preferring the greater good versus individual rights is reinforced in many other provisions of the 1987 Constitution. This is really in stark contrast to the underlying philosophy of the free enterprise system that business left to its own selfish end would eventually work out well to the greater good of society by raising the standards of living. Thus, although we recognize the institution of private ownership and property rights and the indispensable role of the private sector, we nevertheless declare that property bears a social function, and all economic agents shall contribute to the common good, and always subject to the duty of the State to promote distributive justice and to intervene when the common good so demands.

We therefore emphasize in our society the spiritual oneness that the members of our society must achieve; that material blessings must be pursued not for individual ends but as a contribution of what is good for the nation.

The emphasis on spiritual good over material blessings therefore is the signet of our society. Whereas, the determination of what is successful is an mercantile society and easily verifiable from the bottom lines of financial statements, what is the common good and the measure of achieving the public interests are difficult to verify and often fluid in their meaning and coverage, and therefore makes it difficult to pinpoint with certain degree of reliability the guideposts in the playing field upon which businessmen and investors make their business decisions.

When taken together with other provisions of the Constitution having to do with economic and commercial matters, the constitutional declarations are a forthright admission of the existing poverty and privation that pervades our present society; the inability of most of our people to fend for themselves; of the distrust we bear against our local elite and foreign business interests; and the pivotal role of Government and its agencies, to be the main agent to effect such goals, and the bulwark against otherwise resultant exploitation of the great majority of the Filipino people.

Judicial Review

By virtue of judicial review, the Constitution vests in the courts the final word on commercial matters.

I. Nationalized Activities and Undertakings

Activities which are reserved in part or in whole for Filipinos1. Mass media (100% ownership, 100% management)2. Advertising (75% capital)3. All others, including BOT-scheme contractors (60%)4. Those covered by Flag Laws (Filipino First; in bidding, 75% considered 100% Filipino, although superfluous due to Grandfather Rule)EXCEPTION: FTAAs, which allow for 100% foreign investment; exempt transactions provided by law

Constitutional Provisions

Sec 10, Art XII: Congress, upon the recommendation of NEDA, can reserve to Filipinos certain areas of investment, and can regulate foreign investment. (Filipino-first policy)

Sec 12, Art XII: preferential use of Filipino labour, domestic goods

Sec 19, Art II: self-reliant, independent economy

Sec 17, Art XII: in times of emergency, when dictated by public-interest, State may temporarily take over or direct the operations of privately-owned public utilities or businesses affected with public interest, under reasonable terms. An aspect of the emergency powers clause No just compensation needed, as this is not expropriation (there is no taking) and the ownership does not transfer.

The Philippine Mining Act of 1995 [RA 7942]

Sec 2, Art XII: allows the state to enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporation or associations at least sixty percentum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years... 25 + 25 years (exploration, development, utilization). However, this does not apply to FTAAs, and government can always waive refusal of extension. Mining law constitutional, FTAAs are allowed; laws provide for more than enough Filipino control and supervision of mining operations. FTAAs are service contracts. Even if the FTAA is assailable for involving foreigners in mining, its transfer to Filipinos cures the defect. Constitution does not fix an iron-clad 60% share of profits for the State in mining, unlike in petroleum. However, costs incurred by government in building roads to the mine site cannot be deducted from its share.

Retail Trade Liberalization Act of 2000 [RA 8762 repealing Retail Trade law RA 1180]

Law adopts a liberal policy towards foreign investments to bring down prices for the Filipino consumer, create jobs, promote tourism, assist small manufactures, stimulate economic growth, and make Filipino goods and services globally-competitive. Aims for a retail sector characterized by lower prices, better services, wider choices, and higher-quality goods to empower the Filipino consumer.

Retail TradeRetail trading is any act or occupation of habitually selling direct to the general public merchandise, commodities, or goods for consumption. Retail trade includes sales to employees and officers, if company does not regularly sell to the public.

EXCEPTIONS:1. Manufacturer, processor, labourer, worker, if capital does not exceed PhP100K2. Manufacturer in a single outlet3. Farmer selling farm products4. Restaurants incidental to hotel businessConsumer goods (for retail)Consumption goods which directly satisfy human wants and desires, needed for daily life; excludes raw materials and other producer goods (tools for production).

Categories and Capitalization:Category A Reserved exclusively for Filipinos, former Filipinos who are residents, and corporations which are wholly owned by Filipinos. EXCEPTION: Foreigners may engage in exempt transactions if licensed. EXEMPT TRANSACTIONS (foreigners can participate)5. Manufacturer, processor, labourer, worker, if capital does not exceed PhP100K6. Manufacturer in a single outlet7. Farmer selling farm products8. Restaurants incidental to hotel business Paid-up capital less than US$2.5M

Category B Foreign-owned groups may participate if organized under laws of the Philippines but must obtain license from SEC for companies, or DTI if single proprietorship Before 2002, foreign ownership limited to 60%; April 2002, foreigners may wholly-own Minimum paid-up capital US$2.5 M but less than US$7.5M; the establishment of a store must cost US$30K or greater If foreign ownership exceeds 80% of equity, must offer 30% of equity through stock exchange in the Philippines within 8 years from start of operations.

Category C Foreign-owned groups may participate if organized under laws of the Philippines but must obtain license from SEC for companies, or DTI if single proprietorship May be wholly foreign-owned Paid-up capital greater than US$ 7.5M; the establishment of a store must cost US$30K or greater If foreign ownership exceeds 80% of equity, must offer 30% of equity through stock exchange in the Philippines within 8 years from start of operations.

Category D Foreign-owned groups may participate if organized under laws of the Philippines but must obtain license from SEC for companies, or DTI if single proprietorship May be wholly foreign-owned Specializing in high-end or luxury products (good not necessary for life maintenance demand generated by higher-income groups) Paid-up capital at least US$ 250K per store.

Use grandfather rule to determine if entity is local or foreign-owned.

Qualifications and requirements for foreign investors:1. Minimum net worth of parent corporation: US$200M for categories B & C, US$50M for category D2. At least 5 branches worldwide, unless has one store capitalized at US$25M or more3. 5 years track record in retailing4. Only nationals from countries that also allow the entry of Filipino retailers5. Must maintain full amount of capitalization in Philippines unless notifies SEC/DTI of cessation of operations. Failure to maintain capitalization prior to notice makes foreign trader vulnerable to penalties or future trade restrictions.

Safeguards from foreign domination of retail trade1. Follow the categories delineated2. Only nationals or parent corporations formed in countries that allow the entry of Filipino retailers3. Not allowed to retail outside their accredited stores through the use of:a. Mobile or rolling stores, or cartsb. Sales representativesc. Door to door sellingd. Restaurants and sari-sari storese. Other similar retailing activities

Common-law wife of foreigner may engage in retail trade but must use exclusively her own paraphernal property; allowing the husband to take part in managing the business is a violation of the law.

An Act Limiting the Right to Engage in the Rice and Corn Industry to Citizens of the Philippines; or Rice and Corn law [RA 3018]

The rice and corn industry is limited to Filipino citizens, and to partnerships, associations, corporations which are wholly Filipino-owned.

Rice and corn industry1. Acquiring rice and corn and their by-products (includes acquisition as raw materials) for manufacturing or processing of other finished products2. Engaging in:a. Cultureb. Productionc. Millingd. Processinge. Trading, including wholesale, export, import (excludes retailing, which is covered by Retail Law)

This law allows for the participation of foreigners in all rice and corn industry activities (except retailing which is governed by the Retail Law), if authorized by the National Grains Authority, when:1. NGA certifies an urgent need for foreign investment, and the same will not promote monopolies or restraint of trade2. Alien has necessary finances and technical expertise; and3. Alien submits an acceptable developmental plan to the NGA.

Flag Laws

May only be invoked against non-domestic bidders; or against domestic bidders if such domestic bidder uses imported articles, or local articles made from imported materials.

Merely dealing exclusively in foreign materials does not make the company an alter-ego of a foreign entity.

a. An Act to Give Native Products and Domestic Entities the Preference in the Purchase of Articles for the Government [CA138]

In government (including local/GOCC) biddings, if the difference in bid price between the native products and foreign entities is only 15%, preference shall be given to the Filipino.

b. An Act to Require the Use, Under Certain Conditions, of Philippine Made Materials or Products in Government Projects or Public Works Construction, Whether Done Directly by the Government or Awarded thru Contracts [RA 912]

Sec 1. In construction or repair work undertaken by the government, whether done directly or through contract awards, Philippine-made materials and products, whenever available, practicable and usable... shall be used... upon proper certification of availability, practicality, usability and durability... by the [DPWH].

Sec. 3. No contract may be awarded... unless the contractor agrees to comply... an award may be rescinded for unjustifiable failure to comply.

Requiring Government Offices, Agencies, Instrumentalities and Government Owned or Controlled Corporations, Persons and Entities Enjoying Tax Exemption, Incentive or Subsidy from the Government to Utilize in International Transportation Services of the Philippine Flag Air Carrier and Shipping Lines; or Philippine Flag Carriers law [PD 894]

Requires government and persons enjoying tax incentives to utilize Philippine flag carriers.

Act to Punish Acts of Evasion of the Laws on the Nationalization of Certain Rights, Franchises or Privileges; or Anti-Dummy law [CA 108 aa RAs 134 and 6084, and PD 715]

Law penalizes Filipinos who allow themselves to be used by aliens as dummies in order to avail of certain Filipino-only privileges. The law specifically bans the participation of aliens in the management of nationalized businesses, whether as employees, labourers, officers, whether paid or not.

EXCEPTION: Aliens may participate in technical aspects if:1. No Filipino can do the technical work2. Authorized by the President of the Philippines

PD 715 later allowed aliens to be voted as directors (not officers) in corporations engaged in partially-nationalized activities in proportion to their allowable share in the capitalization of such corporation. Thus, the Anti-Dummy Law covers only nationalized businesses and not partially-nationalized undertakings.

Important Conceptsa. Exploitation of Natural Resources

b. Retail Trade

Retail trading is any act or occupation of habitually selling direct to the general public merchandise, commodities, or goods for consumption. Retail trade includes sales to employees and officers, if company does not regularly sell to the public.

EXCEPTIONS:1. Manufacturer, processor, labourer, worker, if capital does not exceed PhP100K2. Manufacturer in a single outlet3. Farmer selling farm products4. Restaurants incidental to hotel business

c. Foreign Ownership

Ownership by aliens of equity in Filipino enterprises. Generally allowed, but prohibited in nationalized undertakings and limited in partially-nationalized businesses, subject to exceptions allowed by law. The restrictions on foreign ownership are founded on Constitutional policies of a nationalized economy and Filipino-first.

d. Grandfather Rule

If 60% or more of the equity in an entity is Filipino-owned, the entity in question is 100% Filipino. If it is less than 60%, it is Filipino only to the exact percentage of ownership of Filipinos. Same goes if equity is owned by another juridical entity (hence, grandfather), check first the percentage of Filipino ownership in the parent corporation.

II. Laws to Protect Small and Domestic Enterprises

Constitutional Provisions

Magna Carta for Micro, Small and Medium Enterprises (MSMEs) [RA6977 aa RAs 8289 and 9501]

Seeks to promote the growth and development of micro-small-medium enterprises by:1. Facilitating access to funds2. Removing stringent collateral registration requirements

Principles:1. Simplification on requirements and procedures2. Encouragement of private sector participation3. Coordination of government efforts4. Decentralization of administration through regional and provincial offices

MicroCapitalized at not more than P 3M

SmallMore than P 3M up to P 15M

MediumMore than P 15M up to P 100M

Eligibility for Government Assistance1. Registered (micro enterprises, register with municipal/city treasurer)2. 100% Filipino capital; of juridical, 60% of equity Filipino-owned3. Sectors: industry, trade, services (including practice of profession), tourism-related establishments, agri-business (manufacturing, processing, production of produce)4. Not a branch or subsidiary of large-scale enterprise; must not be controlled by large-scale enterprise or 3rd parties. (May accept subcontracts, partner with large enterprises, and join cooperatives.)

Eligible MSMEs shall be granted at least 10% of the procurements of government for products and services annually

SB Corporation (attached to DTI).

Magna Carta for Countryside and Barangay Business Enterprises (Kalakalan 20) [RA 6810]

Barangay Micro Business Enterprises (BMBEs) Act of 2000 [RA 9178]

Economic development through entrepreneurship and integration of the informal sector.

A BMBE is:1. A business entity / enterprise2. Engaged in production, processing (including agro-processing, manufacturing of products, trading, services (excluding professional services pursuant to government licensing)3. Total assets (including loans, exclusive of land where situated): P 3M

Benefits of registration as BMBE: (registration with municipal / city treasurer, free certificates good for 2 years, renewable) Exempt from income tax Minimal requirements LGUs encouraged to reduce amount of taxes / fees imposable on BMBEs Exempt from minimum wage (SSS / PhilHealth still required) Special credit windows Creation of P 300M BMBE development fund from PAGCOR DTI matching up BMBEs with other enterprises for incentives

Embroidery Law [RA 3137]

Allows for sub-contracting to sub-contractors or home workers of other processes or completion in the manufacture of garments. (Dispenses with complete assembly line requirement.) Required only to ensure that goods released from its bonded warehouse for embroidery has been stamped or cut in the pattern to be manufactured.

Countervailing Duties on Imported Subsidized Products [302, Part 2, Title II, Book I, TCCP aa RA 8751]

A countervailing duty equal to the amount of subsidy, which is in addition to regular duties, taxes, and charges, will be imposed whenever:1. A subsidized foreign product is imported into the Philippines2. Tending to cause material damage to a domestic industry or retarding the establishment of a domestic industry

Anti-Dumping Act of 1999 [301, Part 2, Title II, Book I, TCCP aa RA 8752]

An anti-dumping duty equal to the margin, which is in addition to regular duties, taxes, and charges, will be imposed whenever:1. A product is imported at less than normal value in the exporting country2. Tending to cause material damage to a domestic industry or retarding the establishment of a domestic industry.

Safeguard Measures Act [RA 8800]

III. Laws on Consumer Protection

Constitutional Provisions

Consumer Act of the Philippines [RA 7394]

The Meat Inspection Code of the Philippines [RA 9296 aa RA 10536]

Food, Drug and Cosmetic Act [RA 3720]

Adopting a National Code of Marketing of Breastmilk Substitutes, Breastmilk Supplements and Related Products; or Milk Code [EO 51]

Act to Penalize Fraudulent Advertising, Mislabeling or Misbranding of Any Product, Stock Bond, Etc.; or Law on Mislabeling [Act 3740 aa CA46]

An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers; or Law on Stamped or Marked Containers [RA 623 aa RA 5700]

An Act Requiring Price Tags or Labels to be Affixed on All Articles of Commerce Offered for Sale at Retail and Penalizing Violations of Such Requirement; or Price Tag law [RA 71 aa RA 1074]

Acts Providing for the Fixing of the Maximum Selling Price of Essential Articles or Commodities, Creating the Price Control Council; or Price Control laws [RAs 6124 and 6361]

Metric System laws

a. Act Defining the Metric System and its Units, Providing for its Implementation; or Metric System law [BP 8]

b. Prescribing the Use of the Metric System of Weights and Measures as the Standard easurement for All Products, Commodities, Materials, Utilities and Services and in All Business and Legal Transactions [PDs 187 aa 748]

Laws against Monopolies and Restraint of Trade

a. An Act to Prohibit Monopolies and Combinations in Restraint of Trade [Act 3247]

b. Monopolies and Combinations in Restraint of Trade [Art. 186 RPC aa RA 1956; and Art. 28, CC]

Downstream Oil Industry Deregulation Act of 1998 [RA 8479]

IV. Maritime Commerce

RealA vessel is essentially movable property; nevertheless, maritime transactions are similar to real property transactions in that registration is required to bind 3rd persons.

HypothecaryLimited liability rule confines liability to the value of the vessel itself (liability co-extensive with vessel), such that when the vessel is lost the liability is extinguished. Vessels total destruction extinguishes all maritime liens, subject to exceptions.

EXCEPTIONS:1. Damage caused by negligence of ship owner (ship owners fault) or concurring negligence of ship owner and captain.2. Expenses for the repair/provisions of the ship before its loss.3. Vessel made collateral and lost before public sale.4. Vessel is insured. (up to extent insured)5. Liabilities under the Labour Code / Workmens Compensation Act.1. No total loss or vessel was not abandoned. (Total loss and abandonment of the vessel, to be a limitation on liability, must be SOLELY through the fault or negligence of the captain. If ship owner is to blame / equally to blame, exception #1 to limited liability rule governs.)

By nature and place of performance of their functions (loading/unloading/custody of cargo at port), arrastre operations are not maritime transactions. (akin to warehouse deposit) Admiralty jurisdiction Philippine law follows the American rule (subject matter test): local court has jurisdiction over maritime transactions is subject matter is in the Philippines (i.e. ship docked in Philippines).Common carriers impliedly warrant the seaworthiness of their vessels.

Charter PartyA contract whereby an entire ship or some principal part thereof is let (leased) by the owner to another for a specified time or use for the conveyance of goods or passengers in consideration for the payment of freight.

A charterer has no obligation to check if the boat is seaworthy or has complied with legal requirements because such are presumed of a common carrier for being engaged in public service. If the vessel is under a charter party and controlled by the charterers own captain and crew, and the captain was negligent, the owner of the ship cannot be made liable for its sinking just because it gave the sailing order. Charterer remains holder of Bill of Lading, which operate as a receipt of goods, and does not vary the contract between the charterer and ship owner. Even if the charter party has a condition against sub-chartering and was in fact sub-chartered without knowledge on the part of the sub-charterer of the prohibition:1. No cause of action accrues in favour of the owner of the vessel2. No lien on the cargo of sub-charterer, since the owner of the vessel only has alien on goods he has in possession, and by the contract, he relinquished possession of the entire ship.

PrimageBonus to be paid to the captain for a successful voyage.

DemurrageThe sum fixed in the charter party as renumeration to the ship owner for the detention of his ship beyond the number of days allowed by the contract for loading, unloading, sailing. It is a penal clause to compensate owner for non-use.

Demurrage must be stipulated in the contract. Loading and unloading must be for a reasonable amount of time or customary quick dispatch demurrage/dispatch: NONE means right to demurrage has been waived Delay in loading/unloading for the purpose of demurrage runs from the moment the ship is detained for an unreasonable time, if the circumstances of delay were brought about by the fault or negligence of the charterer. A claim for demurrage is an obligation NOT arising from a loan or forbearance of money; interest rate 6%. If cost of demurrage not stipulated, interest runs from the moment the court imposes the proper demurrage charges.

Contract of affreighmentA contract for the use of space on vessels leased in part or in whole, for the carriage of goods of others. Rules for common carriers still govern. Contract for special services rendered by the ship owner, who retains possession, command, and navigation of the ship. Charterer merely has use of space contracted for. Ship owner must provision the ship, pay the master and crews wages, answer for maintenance costs of the ship. Carrier is still a common carrier. It is the charterers obligations under the contract of affreightment to exercise ordinary diligence in ensuring berthing (loading/unloading) space for the vessel.

Time charter- leased for a particular or fixed period of timeVoyage charter- leased for a single voyage, regardless of number of stops and connecting trips stipulated.

Bareboat of demise charterA contract where the entire vessel is leased to the charterer; includes the relinquishment of the command, possession, control, and navigation by the ship owner to the charterer. The master and crew are considered servants of the charterer. Undertaking is private in character; contract governs, not law on common carriers. Turnes common carrier into private character. Charterer mans the vessel with his own people, and in effect becomes the owner pro hac vice (for the voyage or service stipulated), subject to liability for damages caused by negligence. Owner must completely relinquish command, possession, control, and navigation of the ship; anything short of a complete transfer is a contract of affreightment, not a bareboat or demise charter.

Charter party rules If cargo of charterer is not sufficient to fill 3/5 the capacity of the vessel, carrier may put it on a smaller vessel at the expense of charterer. Chartered in whole by one party, carrier cannot receive cargo of other persons. Owner liable for damage because of undue delay by captain. If cargo is more than contracted for, carrier may accept and require additional freightage as long as vessel is not overloaded. Upon arrival at port where cargo is to be loaded, in the absence of cargo, captain may look for other cargo OR return in ballast (no cargo; loaded with weight for stability) if the lay days have expired and charterer is still obliged to pay in cost of freightage full. If charterer can prove that vessel is not in condition to navigate, he does not have to pay freightage. Charterer may sub-charter unless expressly prohibited (sub-lease principle) Full freightage even if charterer cannot fill the vessel. Carrier can open packages to find out if the cargo may subject the vessel to forfeiture / confiscation. If vessel is forfeited / confiscated due to cargo, charterer is liable for damages. If ship agent / captain know that merchandise for illicit commerce have been loaded, they become jointly liable with the ship owner for losses caused to other shippers. Charterer must wait until necessary repairs are completed. Charterer may unload vessel before destination but must pay full freightage. Before the trip, charterer may unload the vessel and pay of freightage. The obligation to pay freightage accrues after discharge of cargo. Liquid cargo, leaks out because of inherent defect: charterer / shipper cannot abandon if more than still remains. If charter party is only partial, charterer has no right to fix the date of departure.

Rescission of charter party

By charterer: Before loading, cancel unilaterally by paying of freight agreed upon. Mere notice is sufficient; consent of ship owner. When vessel is does not have capacity agreed upon, or flag is different than stipulated. When vessel not placed at the disposal of charterer within agreed-upon period. If the vessel returns due to pirates or bad weather, charterer may decide to unload but must pay of freightage. If vessel stops for repairs for less than 30 days, full freightage must be paid. If more than 30 days, freightage paid in proportion to distance covered.

Total rescission by ship owner: When charterer fails to load vessel and lay days expire, but charterer must still pay freightage. Owner sells vessel, and the new owner decides to load the vessel with his own cargo despite knowledge of the charter party.

Total rescission by due to fortuitous event: (mere occurrence of any) War Blockade Prohibition to receive cargo Embargo of vessel by government Inability of vessel to navigate through no fault of captain or ship agent

VesselVessel is considered personal property regardless of value.

Co-ownersIf the ship is co-owned, a co-owner desiring to sell his aliquot share must first offer the same to the other co-owners (right of pre-emption). If the sale is made to 3rd parties without offering the same first to the co-owners, co-owners may buy back the original share of the seller within 30 days (right of redemption).

Co-ownership gives rise to a partnership by operation of law.

Ship Agent (Naviero)When the ship owner is absent, liability is imposed upon the ship agent as if he were the owner because he can exercise acts of ownership (i.e. abandonment; termination of ship employees for just cause) over the vessel. The naviero represents the owner and the courts may acquire jurisdiction over him.

The ship owner and the ship agent are liable for the debts incurred by the captain for the repair and provisioning of the vessel.

A naviero: Is entrusted with the provisioning a ship / representing it in the port where it is located; must reimburse captain for legitimate advances. May be a local corporation Is liable solidarily with the ship owner to owners of cargo for losses and damage, whithout prejudice to his rights against the ship owner Is liable when cargo is damaged or a collision occures and the ship owner is absent Is liable for taxes if ship owner is not within the taxing jurisdiction

Unlicensed PersonsAn unlicensed person does not possess the skill to navigate.

CaptainThe captain acts as an agent of the vessel and acts by him exceeding his authority will absolve the ship owner or ship agent from liability, except to the extent of his own investment in the ship, if any. (position of captain is agency coupled with interest)

The captain also holds the position of a trustee, such that there is no acquisition by prescription in his favour.

The captain is liable for the cargo from the time it is turned over to him (at the dock or afloat alongside the vessel) at the port of loading, until he delivers the same (on the shore or wharf) at the port of unloading, unless otherwise stipulated. As a representative of the ship owner, the captains liability is ultimately that of the ship owner.

Roles of a captain1. General agent of shipowner2. Commender / technical director of vessel3. Representative of the country under whose flag he sails

Powers of the captain1. Contract with, command and discipline the crew2. Enter into a charter party3. Contract for fuel/provisions4. Contract for needed repairs

Duties of the captainIn port:1. Equipment inventory2. Report to ship agent on arrival3. Marine survey of vessel before loading4. Remain on board while loading5. Record loan on bottomry with customs6. Demand for a pilot on departure and arrival at every port

During Voyage:7. Keep a copy of Code of Commerce on board8. Keep a log book (prima facie evidence if made by person required), freight book, accounting book9. Stay on the ships bridge when sighting land10. Keep papers / properties of deceased crew11. Comply with rules / regulations of navigation

Arrival under stress: (lack of provisions / fuel, pirates, inability to navigate)12. File a marine protest within 24 hours for arrivals under stress

Destruction:13. File a marine protest within 24 hours shipwreck

Captain is liable to ship agent, if ship agent is made liable for the following:1. Damages because of neglect or lack of skill of captain2. Theft or robbery by crew3. Mutiny4. Effects of failure to comply with rules of navigation, customs, health5. Misuse of captains powers6. Unjustified deviation

If voyage is diverted due to instructions of management to captain, ship owner / ship agent liable for the damage caused.

If cargo has to be unloaded, the same shall be the responsibility of the captain, who shall also be liable for undue delay in the re-commencement of the voyage.

Succession1. Captain2. 1st mate3. 2nd mate

Grounds for rescission of contract of employment by captain or crew1. War2. Change of destination3. Outbreak of disease4. New ship owner*vessels complement is from captain to cabin boy

Freightage and merchandise Owner of merchandise sold to make necessary repairs should still pay freightage Merchandise jettisoned, no freightage, considered general average Lost at sea / seized by pirates, no freightage Freightage may be paid by merchandise recovered by salvage Full freightage even if merchandise damaged, if damage is cause by inherent defect If freightage is based on weight and cargo increases in weight (i.e. live cargo producing young) during the voyage, charterer must pay for the weight increase Ship has retaining lien on cargo carried; such lien may be waived by surrender of cargo, but the lien subsists for 30 days after surrender. This lien is independent of the transactions of 3rd persons. Carrier may demand payment in cash and refuse a surety bond. 2% greater than capacity not allowed; if beyond capacity, 1st come, 1st served, unless all are present in which case shippers will be allowed to load in proportion they have contracted for

Action to recover undelivered cargo:1. 10 years with bill of lading (because bill of lading is a written contract; may be reduced by carrier if reasonable)2. 6 years if no bill of lading3. 1 year for overseas trade (COGSA)

DelayIf the vessel cannot sail for temporary causes not attributable to the vessel, the ship owner or ship agent cannot be made liable for damages.

If the voyage has begun and was interrupted by:1. Force majeure / fortuitous event - passengers are obliged to pay fares in proportion to the distance covered, without right to recover.2. Fault of captain exclusively passengers have right to indemnity3. Disability of vessel, and passengers agree to wait not required to pay increased fares, but must shoulder their own living expenses

DesertionAct of seaman in abandoning the vessel, without leave, before the expiration of his time; an unauthorized absence from the ship with no intention to return to her service. (animo non revertendi)

Philippine Coast Guard laws

a. Amending Section 808 of the TCCP, as amended, by Allowing the Registration of Vessels the Ownership of which is Vested in Corporations or Associations, at least 60% of the Capital Stock or Capital of Which Belong to Citizens of the Philippines [PD 761]

A certificate of Philippine registry shall be issued only to a vessel of domestic ownership of more than 15 tons gross. Domestic ownership means ownership vested in Filipino citizens or juridical entities organized under Philippine laws, at least 60% of which is owned by Filipino citizens.

b. Transferring the Functions of Registration and Documentation of Philippine Vessels to the Philippine Coast Guard [PD 1064]

PD 1604 vests registration and documentation duties with the Coast Guard. Registry with the Coast Guard of vessels 15 tons gross or over makes the vessel of Philippine registry (registered under Philippine flag) and allows vessel to engage in coastwise (domestic) trade.

Reorganizing the Ministry of Transportation and Communications, Defining its Powers and Functions [EO 125 aa EO 125-A]

EO 125 has, by law, transferred the duty of registration to MARINA (Maritime Industry Authority, under the DOTC) from the Coast Guard; HOWEVER the Coast Guard has NOT RELINQUISHED its registration functions. MARINA issues certificates of competency.

The Ship Mortgage Decree of 1978 [PD 1521]

Allows the mortgage of a ship or its equipment with any financial institution, for the purpose of financing the operation, construction, acquisition of vessels. If such mortgage is taken for these purposes, the mortgage is a preferred mortgage if it complies with the formal requisites under law.1. Mortgage must be registered with Coast Guard2. Mortgage lien must be prioritized over all claims, EXCEPT: Fees taxed by court Taxes Crews wages General average Salvage Maritime liens prior to mortgage Damages from tort Preferred mortgage priorUnpaid portion after sale enforceable by personal action against the debtor. (not really a maritime transaction, otherwise deem as exception to hypethecary nature)

A vessel may be attached.

Maritime lien under ship mortgage decreeA maritime lien is a present right of property in a ship. From the moment it attaches, it is inchoate until brought into legal effect in admiralty by a proceeding in rem, at which point it relates back to the time when it first attached.

The Ship Mortgage Decree provides that any person furnishing repairs or provisions for the ship shall have a maritime lien on such vessel. If such maritime lien is prior to the recording of the preferred mortgage, it shall have priority over the mortgage lien.

A person who extends credit for the discharge a maritime lien becomes entitled to the said lien, if:1. The funds were furnished to the ship on order of the master; and2. There is evidence that the funds were actually used to pay the debts secured by the lien.

A local RTC can assume jurisdiction over a maritime case involving foreign elements if the ship is docked in the Philippines because the Philippines follows the American rule (subject matter test) as opposed to a purely English rule (locational test, or where the contract is made or to be performed).

A foreign company cannot avail of the provisions of PD 1521 which was decreed specifically for the protection of Filipino suppliers. The foreign company must therefore prove that the maritime lien was constituted in its favour under applicable foreign law.

Requisites of a maritime for the supplying of necessaries:1. necessaries are furnished to the vessel for its benefit2. necessaries are necessary for continuation of vessels voyage3. Credit must have been extended to the vessel4. A necessity for the extension of credit5. necessaries were ordered by persons authorized to contract for the vessel

Bottomry and Respondentia

Loans secured by ship (bottomry) or cargo (respondentia). Hypothecary in nature (limited liability). EXCEPTIONS to hypothecary nature:1. Loss due to inherent defect2. Loss due to barratry on part of captain3. Loss due to fault of malice of the borrower4. Vessel engaged in contraband5. Cargo loaded is different from agreed upon

Common elements:1. Exposure of security to marine peril2. Debtors obligation is conditioned on the safe arrival at destination of security

BottomryRespondentiaBoth

Loan using vessel as securityLoan using cargo as securityLoan in excess because of overvaluation by borrower to be returned with legal interest

Not available for crews salaryLoan not all used for cargo, excess must be returned.If not subjected to marine peril, becomes ordinary loan. Failure to pay loans on time gives rise to liability for legal interest.

Loan availed of by owner; in his absence, by captainLoan availed of only by owner of cargoLoss due to marine peril extinguishes obligation (hypothecary, general rule)

Several; last is preferred in paymentInsurable interest is only on the excess of value of loan (if concurring with insurance)

Lenders must contribute to general average

Exposure to marine peril: from time anchors are weighed at departure to the time anchors are dropped at destination

In case of shipwreck and salvage is undertaken, repayment will depend on what may be salvaged

Averages

Average is damage or loss deliberately caused (i.e. jettison) to successfully save the vessel and/or cargo from a marine peril.

General average inures to the benefit of all. Thus, when both vessel and cargo are saved, it is general average, and all persons whose property were saved by the deliberate sacrifice made must contribute to reimburse the loss of the person whose cargo or part of the vessel was sacrificed in the process.

If the average is particular, such as only the vessel or cargo is saved, or only part of the cargo is saved, the owner must bear the loss.

General average procedure1. Before the sacrifice, captain must call a meeting of officers and cargo owners on board2. They shall decide by voting, but the captain has the final say. Decision to be made is on the sacrifice to be made.

If the captain does not call a meeting before the sacrifice, it cannot be considered general average, and no claim for contribution can be made, UNLESS the meeting cannot be called (i.e. dangerous storm, no time to meet).

If cargo is jettisoned, begin with those on deck, of bigger bulk, of smaller value. The cargo must be covered by a bill of lading to be reimbursable as constituting general average.

Arrivals under stress, if justified and not attributable to the neglect or fault of the crew, constitute particular average. No damage need be paid to the shippers, who must wait patiently. But if the arrival under stress is occasioned by bad faith, damages must be paid to the shippers, and the vessel must bear its own losses.

Following York-Antwerp rulesOverseas TradeCoastwise Shipping (interisland; domestic)

Prohibition on deck loadingDeck cargo permitted

Deck cargo, with consent of owner, if saved:Must contribute to general averageDeck cargo, with consent of owner, if saved:Must contribute to general average

Deck cargo, with consent of owner, if jettisoned:Owner NOT entitled to reimbursementDeck cargo, with consent of owner, if jettisoned:Owner entitled to reimbursement

Collision

Guilty vessel must pay for the damage caused by the collision.EXCEPTION: If the guilty vessel sinks or is completely lost. (hypothecary nature)

One vessel at fault OR third vessel at faultVessel at fault liable for damage, unless such vessel is completely lost.

Both vessels at fault OR vessel at fault not knownVessels must bear their own losses; shippers may go after ship owners who are solidarily liable for the shippers losses.

Fortuitous eventNo liabilities; each must bear own loss.

The ship owner may proceed against those responsible for civil and criminal liability. Within 24 hours upon reaching the nearest post, the captain of innocent ship must file a marine protest, otherwise there can be no recovery. However, such failure to file the protest on time will not prejudice the rights of cargo owners, innocent vessels without decks, and small crafts in the bay or river.

There is a presumption of loss if vessel sinks and cannot be salvaged.

Last Clear ChanceInapplicable as under the Code of Commerce, if both vessels are negligent (negligence on both parties is a requirement for the invocation of last clear chance), both must bear their own losses, and are solidarily liable for the damage sustained by the shippers.

Overtaking or CrossingIt is the duty of the crossing or overtaking vessel to stay out of the way even if the distance cannot be determined. In case of collision, overtaking vessel is liable since it is the one that can avoid the collision.

Striking a stationary objectThe presumption is that the moving vessel is at fault. The presumption is rebuttable if the moving vessel can prove that it was without fault, the stationary object was at fault, or it was an inevitable accident.

PilotageThe fact that a vessel has a pilot on board will not exempt it from liability.

Pilot is a person licensed to conduct a vessel in and out of ports or through rivers and channels. He becomes the master of the ship pro hac vice. If pilotage is compulsory, it is the pilots duty to insist on effective control of the ship, otherwise he should decline to act as a pilot. As a pilot, he must exercise the ordinary care required by the circumstances. (Extraordinary care if circumstances dictate.)

Occasions when master should interfere or even displace the pilot:1. Pilot is incompetent, intoxicated, is not aware of dangers, and in cases of great necessity2. Advice or offer suggestions to the pilot3. Ensure that there is sufficient watch on deck and that the men are attentive of their duties, engines stopped, tow lines cast off, anchors clear, ready to go on pilots order

The Salvage Law [Act 2616]

Provides for compulsory reward to those who brave the perils of the sea to save cargoes or vessels. Owner of property saved must give reward, the max of which is 50% the value of the property saved.

Requisites:1. Valid object of salvage2. Exposure to marine peril3. Voluntary salvage service4. Effort must be successful

DerelictA vessel or cargo badly damaged and abandoned to the mercy of the sea. It is not res nullius.

Procedure:1. Salvor must tow it to nearest port where it will be delivered to municipal treasurer or customs who will advertise the fact of salvage.2. If owner appears, he may take possession of vessel but must pay a reward not more than 50% of the value of the vessel.3. Reward is determined by: Value of property saved Zeal employed by salvor Danger to the lives of participants in the salvage Number of persons who took part Services rendered Exoenses incurred4. No claim made within 3 months after publication, sell at public auction. Salvor gets his reward, expenses will be deducted from the proceeds, balance is deposited with treasury.5. No claim on the balance is made after 3 years, half goes to salvor, half to government.6. If a vessel saves another vessel, the reward shall be divided: ship owner captain crew*there is no salvage if there is no marine peril; differentiate salvage from towage; towage can be waived

Domestic Shipping Development Act of 2004 [RA 9295 and its Revised RRs]

The law recognizes the

Allowing the Temporary Registration of Foreign-Owned Vessels under Time Charter or Lease to Philippine Nationals for Use in the Philippine

Coastwise Trade Subject to Certain Conditions [PD 760]

Important Concepts in Maritime Transactions

a. Characteristics of Maritime Transactions

Real- vessels are personal, movable property, but has the nature of a real property, because maritime transactions, to be effective against third parties, requires registration. Also, jurisprudence has provided other aspects of the real nature of maritime transactions: the limitation of liability to actual value of the ship, and the right to retain the cargo, embargo of the vessel and the vessel itself.

Hypothecary- the liability of a ship owner is limited to the value of the vessel itself. The vessel stands as the guaranty for the settlement of the losses; thus said losses are confined to the vessel. Applies in all cases, from loss of goods to injury of passengers.

b. Exceptions to Hypothecary Nature of Maritime Transactions

General Rule: No vessel, no liability.EXCEPTIONS:1. Damage caused by negligence of ship owner (ship owners fault) or concurring negligence of ship owner and captain.2. Expenses for the repair/provisions of the ship before its loss.3. Vessel made collateral and lost before public sale.4. Vessel is insured. (up to extent insured)5. Liabilities under the Labour Code / Workmens Compensation Act.6. No total loss or vessel was not abandoned. (Total loss and abandonment of the vessel, to be a limitation on liability, must be SOLELY through the fault or negligence of the captain. If ship owner is to blame / equally to blame, exception #1 to limited liability rule governs.)

c. Charter Party

A contract whereby an entire ship or some principal part thereof is let by the owner to another for a specified time or use for the conveyance of goods or passengers in consideration for the payment of freight.

Obligations of Charterer1. Pay the agreed-upon charter price2. Pay freightage on unloaded cargo3. Pay for losses to others for loading uncontracted or illicit cargo4. To wait if the vessel needs repair5. Pay for deviation expenses

Obligations of ship owner / ship agent1. Not to accept cargo from others if vessel is chartered wholly2. Observe represented capacity3. Unload clandestinely-placed cargo4. Substitute another vessel if load is less than 3/5 of the capacity5. Lave port if charterer does not bring cargo within the lay days / extra lay days allowed6. Place vessel in condition to navigate7. Bring cargo to nearest neutral port in case of war / blockade

Seaworthiness is implied! No need for charterer to inquire.

Classification of Charter Parties1. Contract of affreightment Time charter Voyage or trip charter2. Bareboat/Demise charter

d. Contract of Affreightment

A contract where the ship owner leases part or all of its space to haul goods for others. Generally does not affect character as common carrier. Only the vessel is hired Master and crew remain employees of the ship owner ship owner remains the owner of the vessel and is liable for the expenses of the voyage charterer acquires right to use the carrying capacity and facilities of the vessel and to designate destinations during the time or vovage stipulated

2 kinds:1. Time charter vessel is chartered for a fixed period2. Voyage or trip charter vessel is chartered for a specific voyage / set of voyages.

e. Bareboat / Demise Charter

Ship owner leases to the charterer the whole vessel, transferring the command, possession, and control over the vessels navigation, including the master and his crew who become the charterers servants. Charterer becomes owner of the vessel pro hac vice (for this occasion) Charterer is liable for the expenses of the voyage including wages of seamen Charterer is liable for damages arising from negligence Charterer assumes customary rights / liabilities of ship owner with respect to 3rd parties Master of the vessel becomes agent of the charterer Ship is converted from common to private carrier

f. Primage, Demurrage, Lay Days, and Deadfreight

Primage - bonus due captain for a successful voyage

Demurrage - sum fixed in the charter party as renumeration to the ship owner for the detention of his ship beyond the number of days allowed by the contract for loading, unloading, sailing. (penal clause to compensate owner for non-use; must be stipulated in the contract; loading and unloading must be for a reasonable amount of time or customary quick dispatch; demurrage/dispatch: NONE means right to demurrage has been waived)

Lay Days - days allowed for loading / unloading cargo

Deadfreight - the amount paid by or recoverable from a charterer for the portion of ships capacity the charterer contracted for but failed to occupy.

g. Bottomry and Respondentia

Bottomry: A loan taken by the ship owner or ship agent guaranteed by the ship itself, payable only upon the arrival of the ship at the destination. This loan can also be taken by the ship captain outside the residence of the ship owner or ship agent.

Respondentia: A loan taken by the owner of the cargo payable upon the safe arrival of the cargo at the destination. Only the cargo owner can take out this loan.

Hypothecary nature of bottomry/respondentia: Obligation to pay the loan is extinguished if the goods given as security (vessel/cargo) are absolutely lost by reason of an accident of the sea.EXCEPTIONS:1. Loss due to inherent defect2. Barratry on the part of the captain3. Fault or malice of borrower4. Contraband5. Cargo loaded is different than agreed upon

Concurrence with Marine Insurance: There is insurable interest only on the excess of the value secured and hypothecated by bottomry or respondentia. Value of what may be saved in case of shipwreck divided pro rtate between lender and insurer.

h. Averages

Averages are the extraordinary or accidental expenses (damages and deterioration) which may be incurred during the voyage to save the vessel, cargo, or both, from the time it puts to sea until it casts anchor at the destination (vessel) or from the time of loading until unloading at the post of destination (cargo).

General Average: (Gross Average) Inured to the common benefit, thus all persons having an interest in the vessel and cargo must contribute pro rata, as well as the insurers and lenders on bottomry and respndentia.1. Common danger to both ship and cargo2. Deliberate sacrifice/jettison during voyage (exceptions: cargo transferred to lighten a ship during a storm for port entry, or ship is deliberately sunk to extinguish a fire in port, bay, creek, roadsteads)3. Success

Extra fuel for the vessel and goods not recorded in the vessels books are not covered by general average.

Particular Average: (Simple Average) Did not inure to the common benefit; borne by respective owners.

i. Collision and Allision

Collision: both vessels movingAllision: 1 vessel moving, 1 stationary

V. Transportation LawConstitutional Provisions

Arts. 1732-1763 CC

349-379, 573-736, and 806-869 Code of Commerce

Common Carriers

a. Definition

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 without discrimination.

b. Diligence Required of Common Carriers

Extraordinary diligence required. (utmost diligence)

c. Liabilities of Common Carriersd. Vigilance over Goodse. Exempting Causesf. Requirement of Absence of Negligenceg. Absence of Delayh. Due Diligence to Prevent or Lessen the Lossi. Contributory Negligencej. Duration of Liabilityk. Delivery of Goods to Common Carrierl. Actual or Constructive Deliverym. Temporary Unloading or Storage

Stipulation for Limitation of Liabilitya. Void Stipulationsb. Limitation of Liability to Fixed Amountc. Limitation of Liability in Absence of Declaration of Greater Value

Liability for Baggage of Passengersa. Checked-in Baggageb. Baggage in Possession of Passengers

Safety of Passengersa. Void Stipulationsb. Duration of Liabilityc. Waiting for Carrier or Boarding of Carrierd. Arrival at Destination

Liability for Acts of Othersa. Employeesb. Other Passengers and Strangersc. Extent of Liability for Damages

Bill of Ladinga. Three-Fold Characterb. Delivery of Goodsc. Period of Deliveryd. Delivery Without Surrender of Bill of Ladinge. Refusal of Consignee to Take Deliveryf. Period for Filing Claimsg. Period for Filing Actions

Maritime Commercea. Charter Partiesb. Bareboat/Demise Charterc. Time Charterd. Voyage/Trip Chartere. Liability of Ship Owners and Shipping Agentsf. Liability for Acts of Captaing. Exceptions to Limited Liability

Accidents and Damages in Maritime Commercea. General Averageb. Collisions

Carriage of Goods by Sea Act (COGSA)a. Applicationb. Notice of Loss or Damagec. Period of Prescriptiond. Limitation of Liability

Warsaw Conventiona. Applicabilityb. Limitation of Liabilityc. Liability to Passengersd. Liability for Checked Baggagee. Liability for Hand-Carried Baggagef. Wilful Misconduct

VI. Public Service LawsA. Constitutional ProvisionsB. Laws and Other Issuances1. Public Service Act [CA 146 aa]2. Reorganizing the Executive Branch of the National Government [PD 1]3. The Civil Aeronautics Act of the Philippines [RA 776 aa PD 1462 andEO 217]4. Public Telecommunications Policy Act of the Philippines [RA 7925]5. Electronic Commerce Act of 2000 [RA 8792]6. National Electrification Administration Decree [PD 269]7. National Electrification Administration Reform Act of 2013 [RA 10531]8. Electric Power Industry Reform Act of 2001 [EPIRA, RA 9136 aa RA10150]9. Anti-Electricity and Electric Transmission Lines/Materials Pilferage Actof 1994 [RA 7832]10. Biofuels Act of 2006 [RA 9367]11. Anti-Cable Television and Cable Internet Tapping Act of 2013 [RA10515]C. Important Concepts1. Public Service2. CPCa. Requisites for Issuanceb. When Notice and Hearing Not Required3. Public Utilities4. Mass MediaVII. BOT LawA. Constitutional ProvisionsB. Laws and Other Issuances1. An Act Authorizing the Financing, Construction, Operation andMaintenance of Infrastructure Projects by the Private Sector [RA 6957]2. The Philippine BOT law and its IRR [RA 7718 amending RA 6957]C. Important Concepts1. Schemes Recognized2. Common Provisions and Conditions Imposed on All SchemesVIII. Insurance Code [4th Week June 20, 2013]5 of 20 PagesA. Constitutional ProvisionsB. Laws and Other Issuances1. Art. 2011 CC2. A Decree to Consolidate and Codify All the Insurance Laws of thePhilippines; or Insurance Code of 1978 [PD 1460 aa]3. Insurance Code [PD 612]4. Family Code [EO 209 aa]5. Amending the Law on Arson [PD 1613]6. Amending Certain Sections of PD 612 [PD 1455]C. Concept of InsuranceD. Elements of an Insurance ContractE. Characteristics/Nature of Insurance ContractsF. Classes1. Marine2. Fire3. Casualty4. Suretyship5. Life6. Compulsory Motor Vehicle Liability InsuranceG. Insurable Interest1. In Life/Health2. In Property3. Double Insurance and Over Insurance4. Multiple or Several Interests on Same PropertyH. Perfection of the Contract of Insurance1. Offer and Acceptance/Consensuala. Delay in Acceptanceb. Delivery of Policy2. Premium Payment3. Non-Default Options in Life Insurance4. Reinstatement of a Lapsed Policy of Life Insurance5. Refund of PremiumsI. Rescission of Insurance Contracts1. Concealment2. Misrepresentation/Omissions3. Breach of WarrantiesJ. Claims Settlement and Subrogation1. Notice and Proof of Loss2. Guidelines on Claims Settlementa. Unfair Claims Settlement and Sanctionsb. Prescription of Actionc. SubrogationIX. Pre-Need CodeA. Constitutional ProvisionsB. Laws and Other Issuances1. The Securities Regulation Code [RA 8799]2. Pre-Need Code of the Philippines [RA 9829 and its IRRs]X. Negotiable Instruments Law [5th Week June 27, 2013]A. Constitutional ProvisionsB. Laws and Other Issuances1. The Negotiable Instruments Law [Act 2031]2. BSP Manual of Regulations for Banks and Non-Bank FinancialInstitutionsC. Forms and Interpretation1. Requisites of Negotiability2. Kinds of Negotiable InstrumentsD. Completion and Delivery1. Insertion of Date6 of 20 Pages2. Completion of Blanks3. Incomplete and Undelivered Instruments4. Complete but Undelivered InstrumentsE. Signature1. Signing in Trade Name2. Signature of Agent3. Indorsement by Minor or Corporation4. ForgeryF. ConsiderationG. Accommodation PartyH. Negotiation1. Distinction from Assignment2. Modes of Negotiation3. Kinds of IndorsementsI. Rights of the Holder1. Holder in Due Course2. Defenses Against the HolderJ. Liabilities of Parties1. Maker2. Drawer3. Acceptor4. Indorser5. WarrantiesK. Presentment for Payment1. Necessity of Presentment for Payment2. Parties to Whom Presentment for Payment Should be Made3. Dispensation with Presentment for Payment4. Dishonor by Non-PaymentL. Notice of Dishonor1. Parties to be Notified2. Parties Who May Give Notice and Dishonor3. Effect of Notice4. Form of Notice5. Waiver6. Dispensation with Notice7. Effect of Failure to Give NoticeM. Discharge of Negotiable Instrument1. Discharge per se2. Discharge of Parties Secondarily Liable3. Right of Party who Discharged Instrument4. Renunciation by HolderN. Material Alteration1. Concept2. EffectO. Acceptance1. Definition2. Manner3. Time4. RulesP. Presentment for Acceptance1. Time/Place/Manner of Presentment2. Effect of Failure to Make Presentment3. Dishonor by Non-AcceptanceQ. Promissory NotesR. Checks1. Definition2. Kinds3. Presentment for Paymenta. Timeb. Effect of Delay7 of 20 PagesXI. Laws on Bouncing Checks [6th Week July 4, 2013]A. Constitutional ProvisionsB. Laws and Other Issuances1. Law on swindling (estafa) [Art. 315 RPC aa RA 4885]2. An Act Penalizing the Making or Drawing and Issuance of a CheckWithout Sufficient Funds or Credit; or Bouncing Checks law [BP 22]XII. Providing for the Regulation of Trust Receipts Transactions; or Trust ReceiptsLaw [PD 115]A. Constitutional ProvisionsB. Definition1. Loan/Security Feature2. Ownership of Goods, Documents, and InstrumentsC. Rights of the EntrusterD. Obligations of the Entrustee1. Payment/Delivery of Proceeds or Disposition of Goods, Documents orInstruments2. Return of Goods, Documents, or Instruments in Case of Sale3. Liability for Loss of Goods, Documents, or Instruments4. Penal Sanction if Offender is a CorporationE. Remedies AvailableF. Warehousemans LienXIII. Letters of CreditA. Constitutional ProvisionsB. Laws and Other Issuances1. Arts. 567-572 Code of Commerce2. Uniform Customs and Practice for Documentary CreditsC. Definition and NatureD. Parties, Rights, and ObligationsE. Principles1. Doctrine of Independence2. Fraud Exception3. Doctrine of Strict ComplianceXIV. Warehouse ReceiptsA. Constitutional ProvisionsB. Laws and Other Issuances1. An Act Concerning Warehouse Receipts [Act 2137]2. Bonded Warehouse Act [Act 3893 aa]3. Arts. 706-718 Code of Commerce4. Arts.1507--1520,and1636CivilCodeC. Important Concepts1. Definition of Warehouseman2. Nature and Function of Warehouse Receipt3. Assignment and Negotiation of Warehouse Receipt