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Transcribers:
Marc Roby de Chavez (MARX)Marc Roby de Chavez (MARX)Marc Roby de Chavez (MARX)Marc Roby de Chavez (MARX)
Professor:Dean Amado L. Dimayuga DCL
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MERC
Historical Background of Insurance in the Ph
During the Spanish regime, we h
called contract of insurance.
What was the governing law at that time?
During that time, the governin
Spanish Code of Commerce and
Code. There were provisions fou
governing contracts of insurance.
When the Americans came, the first In
enacted into law in a year 11!, it w
legislature that enacted a piece of legi
insurance.
Then in 1#$, the "hil. %egislature enacted "
And finally in 1#', we had the so called I
the "hil. This is the present law on insuranc
of 1#'). The Insurance Code is the primary
the other hand, the Civil Code ap
(Supplemental %aw). "rovisions relative t
Contracts are applicale insurance case
applicale provision in the Insurance Code.
Insurance is a contact wherein the two c
namely the oligor and oligee a -uridical r
So any if there is no provision in the Insuran
can e made to the general provision oContracts
Another repository of applicale principles i
nited States Court and more particularly t
of California. When the Insurance of th
eing drafted, it was used as the principal
the laws that can e used in resolving insura
In the year 1'/, there was already a ran
company here in the name of %loyd0s of %on
first life insurance company estalished to
in our country was the Sun %ife Insura
Canada. In 12, 3e4 Tong %in 5ire andCompany. In 11, another life insurance
%ife.
Insurance is a contract. There are 3 essen
contract namel:
consent
o-ect
cause or consideration
The same three elements are duly presen
insurance. In the asence of one element,
valid contract of insurance. 7ememer
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 1
ilippines:
d already the so
laws were the
the Spanish Civil
nd in two Codes
surance Act was
s the "hilippine
slation governing
.D&.
nsurance Code of
e (Insurance Code
*principal law. +n
lies suppletorily
+ligations and
if there is no
ntracting parties
elation is created.
ce Code, recourse
+ligations and
s Decisions of the
e Insurance Code
"hilippines was
odel. These were
nce cases.
h of an Insurance
don. In 1'', the
do usiness here
nce Company of
6arine Insurancecompany, Insular
ial elements of a
in a contract of
ou cannot have a
that the three
elements found in the Civ
and cause or considerati
contracts.
!onsent " is the meetin
parties. There is consent
offer and acceptance
who are the parties in a co
Insurer
Insured
9eneficiary :::
They are the main parti
only the insurer and ins
meeting of the minds et
is a consent.
When is there a meeting
insured in a contract of in
offeree?
$fferor; the on
insurance. The i
insurance. Thus,
applicant.
who solicits?
the agent of the I
But who signs and accepts
the insurer is
application.
9ut the Insurer
for the insuranc
processed y the
insurer whether
effect, the offe
accepts the app
When the insur
insured will e no
How is the insured notifie
has #een accepted?
through the issua
When the policy is deliv
meeting of the minds. Wh
4nowledge of the offero
application has come to t
the time that you can say
when does it come to his p
either constructiv
il Code namely the consent, o-ect
n must e present in all 4inds of
of the minds of the contracting
when there is the concurrence of
ntract of Insurance?
s. 9ut the contracting parties are
red. The moment that there is a
een the insurer and insured, there
of the mind #etween insurer and
urance? who is the offeror and the
e who applies for contract of
sured is the one who applies for
the insured is the offeror and
nsurer
the application
the one who accomplish the
ill accomplish the application form
e policy. The application will e
office of the Insurer. It is up for the
to accept or to turn down. So in
ee is insurer. When the insurer
lication, it ecomes the offeror.
er approves the application, the
tified.
# the insurer that the application
nce of insurance policy
ered to the insured, there is the
en the acceptance has come to the
and when the acceptance of his
e 4nowledge of the insured, that is
hat there is a meeting of the mind.
ersonal knowledge?
ely or actually
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MERC
There is actual knowledge when the poli
him.
There is constructive knowledge if the peen mailed ut not yet received y the ins
$fferor" insured $fferee" insurer
Acceptance of the offer is made 4nown to
the conventional way to convey this is thro
the policy.
$#%ect; the contract of Insurance is a speci
not li4e a contract of sale wherein you can
what is the o-ect. In a contract of sale,
su-ect matter to e sold. It is the thing that
in a contract of insurance, what is the o-ect
There are two kinds of insurance
%ife Insurance
e life of a person.
insured e.g. car,
It is not only there is a =ualifying
interest in the
son for instance if
nsured must have
ithout insurale
valid contract of
nterest, no valid
of insurance e it
art of the insurer
sured.
the part of the
the insurer
of insurance is
d
red.
.
!haracteristics(features o
Aleatory
"ersonal
?@ecutory and Co tmost Confiden
Contract of Adhe
When can we say that a c
The liaility of
contingent event
The insurance is
is an assumption
Is sale an aleator contrac
not an aleator
assumption of ris
insurance is a highly perso
if a person has to insure
e@amination. 9ac4ground
health, status in life. All
evaluation for a life insura
how a#out in a non"life ins
highl personal? Will pers
3es. It also highly
Illustration: 3ou will insur
you figured in several car
$ years. 7ecords show tha
If you figured in several c
higher than a regular pre
B has a ldg. Insurer fo
arson. Insurer will thin4 t
B has a warehouse. 9ut
heavily indeted. Insure
application.
)*ecutor and !onditional
in so far as the i
insurance is e@ec
if the peril insure
to pay. So it eco
conditional eca
of the contingenc
a !ontract of Insurance
nditionale
ion
ntract is aleatory>
the insurer depends upon a
which may or may not happen.
an aleatory contract ecause there
of ris4.
t?
contract ecause there is no
4.
nal contract.
his life, he has to undergo medical
of insured his age, wor4, state of
l these will come to play in the
nce y the insurer.
urance? Will it still #e considered as
nal circumstances come into pla?
personal.
e your car. Insurer found out that
accidents every year during the last
you are rec4less driver.
ar accidents, your premium will e
ium.
nd out that you are convicted of
ice.
the insurer found out that he is
will thin4 twice regarding your
surer is concerned, the contract of
tory and conditional.
d against happened, the insurer has
mes e@ecutory
se it depends upon the happening
y insured against.
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MERC
insofar as the insured is concer
e@ecuted ecause he has already
e has complied already with his p
as the insured is concerned, the insfully e@ecuted ecause he has don
+tmost !onfidence ,+#errima -ides'
contract that involves utmost goo
of oth parties
when there is an application f
applicant must divulge info li4e w
hospitalied efore, the insurer
personal statement. The insuranc
mandated y law to conduct an in
a policy is issued.
This is somethinWith respect to
insure a vessel, t
event can e the
)*ample:when t
no oligation to
e on the high
insured here y
was insured, the
san4 efore the is
9ut the owner o
does not have avessel has alrea
loss or not loss. I
There is a provis
say, it applies to
The insurance h
acted in good fai
was lost.
When we spea4 of ins
property, which is mortg
secure an oligation to ayou orrow money e@. i
collateral. 3ou give as coll
the an4 do> The an4 wi
policy and ma4e the an4
loan.
there can e two cases i
e@isting insurance over hi
the an4. e gave as colla
he is applying for loan, th
already insured in his na
policy should e the an4
#e necessar on the partpolic to get another polic
There is no more
policy. B can
assignment of p
assignment of t
assignment is for
proceeds shall g
an4. Assignmen
to the an4.
Code says, past or future. Does it
ent can e the su-ect matter of an
peculiar to a maritime insurance.maritime insurance, when you
he liaility against a future or past
su-ect matter.
e vessel is insured, the insurer has
@amine the vessel ecause it might
eas. A vessel in
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MERC
0upposing there is no polic et1 what will 4
6r. B will procure an insurance
policy the eneficiary should e t
the loan.
In the case of a mortgage e@ecuted t
oligation, the mortgagee has insurale int
of the loan he e@tended. The an4 can sec
name to secure the credit. "roperty is mort
So the an4 y itself can otain a policy. Th
e the an4. What the an4 will e insurin
the mortgaged property.
0upposing the mortgagee is the one who a
of mortgagor1 the #eneficiar is the #ank.
name of the mortgagor #ut assigned to th
#e the effect in case of loss?The insurance is still elieved to
of the mortgagor. The real party
mortgagor. Whatever the mortg
affect the insurance policy. I f he v
even though he designated the
or has already assigned the polic
an4, still the mortgagor is a party
What if he violates a provision in the polic
is a cause for the annulment(avoidance of t
Any act which can e performed
can e performed y the mortgagepayment of the premium. The an
the payment of the premiums. Wh
of renewal, the an4 advances
ehalf of the mortgagor. This ca
mortgagee.
In case of loss1 to whom shall the proceeds
the mortgagee shall e entitled t
the e@tent of the credit e@tended.
What will #e the effect of the pament of t
mortgagee? What will #e the effect on th
the loan o#ligation #e e*tinguished?the whole oligation is already e@ti
he has already een paid, alre
e=uivalent to the insurer. The an
to the mortgagor.
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MERC
(d) +f any person upon whose life any es
in him depends.
$f an person upon whose life an estate o
in him depends.
9y e@press provision of the la
insurale interest over himself.
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MERC
nder the 5amily Code, an auntie is no
support a niece or nephew.
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MERC
also surrender ut with the
irrevocale eneficiary.
In life insurance, there are several privileginsurer to the insured. 5irst, can orrow m
policy as a collateral. Second, can also assig
after / years as a rule, can surrender the
cash surrender value; refers to the comput
the value of the policy upon reaching a parti
.
During the first two years, it does not
surrender value. 3ou cannot collect and sur
After / years, the policy has already a cas
The longer the year, the higher is the cash s
0upposing it is the matter of paing the pre
has #een delaed in paing the premium1 ta#out to e*pire1 and when the grace per
happens to the polic?
The policy lapses. nli4e in propert
is what we called grace period. If
the policy ecomes null and void.
4a the irrevoca#le polic compel the in
premium?
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MERC
e*isting interest
?@ample owner of a property
inchoate interest founded on an e*isting int)*ample: stoc4holder has inchoa
property of the corporation
e*pectanc1 coupled with an e*isting interes
)*ample: future harvest of your
that you are the owner or lessee
B custom1 ou have a part in the harvest #
owner. =o ou have an insura#le interes
harvest?
rememer that e@pentancy must
interest. 3ou are not the owner e
you have share over the harvest
If our parents do not #elieve in insuranc
their properties?
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MERC
(staying e
accommodati
different if th
lease?@istence of Insurale
interest at the time of the
loss (life, health) Insurale
interest must e@ist at the
time of the inception
insurance ut need not
e@ist thereafter or when
the time of loss
Insurale int
not only at t
inception o
insurance ut
loss occurs,
not e@isting m
In a valued polic, the insured and insurer a
as to the amount*value.
In an open polic, there is no value. In ca
ad-usted to the necessary appraisal on to
loss
Cannot recover more than the value in the
a contract of indemnity. If you are allowe
than your insurale interest, it ecomes a
with respect to the e@cess. If the value of yo
you insure it for 1.!6, that is a wagering
e@cess is concern;!K.
Sec. ". ?@cept in the cases specified in the ne@t fou
cases of life, accident, and health insurance, a change
of a thing insured unaccompanied y a correspondin
the insurance, suspends the insurance to an e=uiva
interest in the thing and the interest in the insurance
person.
#R$any change in the interest in a property
y corresponding change in the policy, you
)*ample:B has a car, he sold to 3
the policy.
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MERC
RE1UISIES 2R NEAL/EN
party 4nows the fact which
communicate or disclose
has personal 4nowledge li4e hospitaliation
such party concealing is duty oun
fact to the other
the fact must e mat
insured. If it is not materi
oligation on the part o
disclose
such party concealing ma4es no w
concealed
the other party has not the mea
the fact concealed
Is it necessar that the concealment intentio
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MERC
In property insurance, this is important not
ris4 ut the fi@ing of a premium. If it is a
the insurer will accept it ut the premium
higher.
In life insurance, it is not a =uestion of fi@in
=uestion is whether to accept or not.
RE&RESENAINS
What is representation in a contract of insur
+ral or written factual stateme
insured to induced the insurer
contract of insurance to accept t
insurance
Where is it written? where do we find the re
In the application
The insurer will give the insured an appli
accomplished and any statement or fact
application is a representation (written)
Whenever the insured is interviewed y
there is oral representation. Whatever f
that may e given y the insured during hi
underwriter, that will form under the cla
representation
/re representations considered as part
contract?
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MERC
)*ample: there is no security guard. The
that he will employ security guards
If the promise is incorporated in the policy, ithe contract. 9ut if the same is not incor
effect is that when the promissory repr
fulfilled and the same is material, it can
rescission
!an representation 5ualif as an e*press pro
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MERC
There are cases where the incontesta#ilit
appl:
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MERC
The contract of insurance is perfec
the acceptance of the offer y th
4nown to the insured
The acceptance ma #e made known to the i
Constructive delivery
Actual delivery
/ctual deliver
"hysical delivery to the insured
!onstructive deliver
The delivery of the policy to the
deliver the same to the insured.
when the insured died and the p
hands of the agent ut the policy i
y the insurer, there is already con
If the policy is delivered thru mail
If the policy has already een
insurer for delivery to the insured
constructive delivery
0ometimes1 it takes time to evaluate th
insurance.
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MERC
What is a valued polic?Sec. 0!. A valued policy is one which e@
agreement that the thing insured shall e v
%et0s say a uilding is going to e
Aside from the !4, there is valu
valued of the policy is !4 ecaus
thing is already agreed upon and t
in the policy
In case of loss, there is no need fo
company will not engage the servi
anymore to evaluate how much
thing at the time ecause there is
valuation.
The valuation is different from
insurance
$pen policSec. 0". An open policy is one in which t
insured is not agreed upon, ut is left to e
loss.
There is an open policy when th
valuation in the policy
If there is loss or damage, there
insurance ad-uster to inspect the pan estimate of the value of the da
7unning PolicSec. 0. A running policy is one which co
insurances, and which provides that the o
e from time to time defined, especially
insurance, y additional statements or indor
sually in stoc4 insurance li4e i
store, the same has inventories
nder the Insurance code, there should e
Sec. *". The policy shall e in printed for
lan4 spaces and any word, phrase, claus
signature, numer, or word necessary to co
insurance shall e written on the lan4 spac
Any rider, clause, warranty or endorsement
of the contract of insurance and which is
said policy is not inding on the insured,
title or name of the rider, clause, warranty
mentioned and written on the lan4 spaces
nless applied for y the insured or ow
warranty or endorsement issued after the
countersigned y the insured or owner, w
shall e ta4en as his agreement to the c
clause, warranty or endorsement.
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 1!
resses on its face an
lued at a specific sum.
insured for !4.
tion already. It is
e the value of the
he same is stated
r an ad-uster. The
ces of an ad-uster
the value of the
already an agreed
the amount of
he value of the thing
ascertained in case of
ere is no agreed
is a need for an
roperty. To ma4eage.
templates successive
-ect of the policy may
as to the su-ects of
sements.
a department
printed policy
m which may contain
e, mar4, sign, symol,
mplete the contract of
es provided therein.
purporting to e part
pasted or attached to
unless the descriptive
r endorsement is also
provided in the policy.
er, any rider, clause,
original policy shall e
hich countersignature
ntents of such rider,
Nroup insurance and
typewritten and need
The policy cannot e is
approval of the office of t
In the policy, aside from
there are what we call e@
These are 4ey devices e
themselves
)*ample of )*ceptions:
In fire insurance
So if the pro@i
recovery
)*ample of !ondiitons
The residential h
7ound the cloc4 s
5ire e@tinguishers
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MERC
When the insured accomplishes the appli
insured is interviewed y the underwriter,
of the offer to the insurer. And the insurer
then the insurer will issue the policy containconditions agreed upon y the parties
So the e@press warranties should e found
any other incorporated instrument signed
Sec. +".Without pre-udice to section fifty;one, every e
at or efore the e@ecution of a policy, must e contai
or in another instrument signed y the insured and re
as ma4ing a part of it.
According to the insurance Code, there is
warranty what we called implied warranty
What is an implied warrant? Where can w
warrant?
There is an implied warranty in ma
The classic e@ample of implied warranty i
seaworthiness of the vessel
Another e@ample of an implied warranty i
warrants the nationality or neutrality of th
an implied warranty that the vessel
necessary documents to show its neutralit
the case may e
How do we define warrant?
It is a statement or promise set f
where incorporated with it, the
fulfillment of which in any respect
or not the insurer renders the poli
option of the insurer
How do we classif the warrant?
?@press
Implied
Affirmative
"romissory
What is an affirmative warrant?Sec. +!.A statement in a policy of matter re
thing insured, or to the ris4, as a fact, is
thereof.
)*ample of warranties ,person'
With respect to the person, age is v
A statement y the insured that
hospitalied during the past 1 y
warranty
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 12
cation, when the
his will form part
accepts the offer,
ing the terms and
in the policy or in
the insured
press warranty, made
ed in the policy itself,
ferred to in the policy
another 4ind of
e find this implied
ine insurance
the warranty of
that the insured
e vessel. There is
ill carry all the
or nationality as
orth in the policy
untruth or non;
whether affecting
cy voidale at the
lating to the person or
an e@press warranty
ery material
he has not een
ars is an e@press
The e@press war
4ind of employm
also an e@press w
)*ample of warranties Wi
Insurance of a
whether the uil
uilding is tenan
present is an e@p
The age of a uil
The age of the ve
The fact that the
The course of the
Any statement o
that it can ta4e ri
a warranty
Promissor warrant
A statement in
that he is going t
material to the ri
)*ample:
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MERC
Sec. +3.When, efore the time arrives for the perfo
relating to the future, a loss insured against hap
ecomes unlawful at the place of the contract, or impo
fulfill the warranty does not avoid the policy.
In section #G, when the performance
impossile or loss ta4es place will not affect
policy
)*ample:there is a warranty in the policy t
from the date of policy that the uilding
Nuards will e employed y the owner of th
If loss ta4es place within the G d
agency (during the grace period
ta4es place, there is no violat
ecause the loss ta4es place ef
performance)
)*ample ,when it #ecomes unlawful'
There is a promissory warranty tha
the premises will e vacated and
residence y the owner. In other
vacate the premises and the own
to use it for his residence. Then
prohiiting for a certain peri
e-ectment of tenants within
promissory warranty ecomes unl
will e no violation of the same
)*ample ,when it #ecomes impossi#le'In a factory, there is a promissory
e=uipments, manufactured in
installed within 2 months. A wa
insured cannot do the importat
e=uipments, it ecomes impossile
Sec. +).The violation of a material warranty, or other
policy, on the part of either party thereto, entitles the
0upposing there is a warrant that no e*plo
material will #e deposited in the premises.
destroed # a fire. The pro*imate cause o
the e*plosives deposited in the premises. It ithat caused the fire. 0o it is not the violatio
that caused the loss of the propert1 ma t
from the insurer?
It is not necessary that the pro@i
loss or damage a violation of a wa
pro@imate cause is some other cau
violation of the warranty, still that
on the part of the insurer to deny li
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 1#
rmance of a warranty
ens, or performance
ssile, the omission to
comes unlawful,
the validity of the
at within G days
will e guarded.
e uilding
ys to loo4 for an
of G days, loss
ion of warranty
re the promised
within / months,
shall e used as
ords, tenants will
r will e the one
law was passed
d of time the
that area, the
awful, then there
arranty that new
ermany will e
r ro4e out, the
ion of the new
material provision of a
ther to rescind.
ives or haardous
The #uilding was
the fire was not
s electrical failuren of the warrant
e insured recover
ate cause of the
ranty. ?ven if the
se other than the
is a good ground
aility
Sec. +0. A reach of warranty
from the time that it occurs, or
the policy from attaching to the
The violation of warrantynot. Supposing, it is fraud
warranty. Supposing tha
round the cloc4 security
employment of the securi
is a fraudulent violation of
)*ample of violation of wa
The insurer e@pe
premises within
insured made a
leave the premis
/s to legal effects ,violatio
w*o fraud L the i
the period prior t
e*ample: promis
security guards.
agency is termina
loo4ing for anoth
violation of warra
if the violation i
ro4en, prevents
ris4
&RE/IU/S
"remiums (payment there
of an insurance contract.
the consideration is the
insured. Insofar as t
consideration is the pro
insured in case of loss
Sec. ++. An insurer is entitled t
thing insured is e@posed to the
agreement to the contrary, noinsurance company is valid and
has een paid, e@cept in the cas
the grace period provision applie
Without payment of prem
What is Cash and Carry ru
This is a rule
commissioner th
there is no valid i
#eneral Rule$without pa
insurance contract
ithout fraud merely e@onerates an insurer
where it is ro4en in its inception, prevents
is4.
may either e tainted with fraud orulent, there is fraud in ma4ing the
the insured said that there are
guards, ut it turns out that the
y guards is only for daytime. There
the warranty.
rrant without fraud:
cts that the tenants will leave the
2 days. There is no fraud, the
assurance that the tenants will
s
n with fraud or without fraud'
nsurer is merely e@onerated during
o the violation
sory warranty of employment of
After one month, the contract of
ted. So the owner of the uilding is
er agency. %oss ta4es place. This is a
nty without fraud
fraudulent upon inception L it is
the policy from attaching to the
of) is one of the essential elements
Insofar as the insurer is concerned,
premium to e received from the
e insured is concerned, the
ise of the insurer to damnify the
o payment of the premium as soon as the
peril insured against.
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MERC
E;ce'tions$
In case of li fe and industrial insu
the grade period. In life insurance,
given to the insured for the payme If the insurer ac4nowledges th
premium, although in truth and i
payment yet. That will not, in a
validity of the policy without pre-u
the insurer to collect premiums
In case of surety onds. A surety
of insurance. When a surety ond
ond is already in the hands
regardless of the payment of pre
ond is considered valid. This is for
a Grd
person
In case of motor vehicle insurance
insurance) when a car is regist
mandatory re=uirement that there
Grd
party liaility insurance. This
insurance is in favor of Grd
perso
insured. Although there is no pay
yet, if there is a Grd
party liailit
e@ception to the rule ecause if we
rule, innocent Grd
person will e aff
In 6a4ati Tuscany case, in this
agreement etween the insurer
payment of premium y installme
that the same is valid. It is an e@
-urisprudence Cover notes
In cover notes1 does the law re5uire an imm
cover note?
The premium is not yet computed.
is a holder of a cover note may not
single centavo ut the same is valid
=o we consider pament of premiums as an
part of the insured?
In case of life insurance, it is for m
After payment of premium for the
a need to pay for premium for the
=o we consider the insured as
pament of premiums for the succe
das. 8o polic is
as
red is entitled for the return of the
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MERC
+ver insurance, if there is over insu
=oes the law prohi#it dou#le ,over' insuranc
#e insured with & or more insurer?3es
In case of over insurance, the insured can
than what his insurale interest is
If the insurale interest is only 16, ther
return of premium from all insurance comp
e@cess, he is entitled.
If there is a provision in the contract of ins
doule insurance, violation thereof is
recancellation
LSS
Sec. 3. An agreement not to transfer the claim of t
insurer after the loss has happened, is void if made e
otherwise provided in the case of life insurance.
nder sec 'G, the law says that any agre
transfer of claim after loss is void. It may
parties prior to the loss
What is meant # this?
This is prohiiting the assignmen
case of loss, after the loss
Wh does the law declares the same is void?
This is against pulic policy ecau
the claim is already a monetary cl
entitled to it is free to transfer it in
How a#out prohi#iting the transfer of claim
It is valid ut there is a need for t
insurer. The personal circumstanc
will come into play. So the insure
the claim without the consent of th
There are some factors to e ta4en into
consider the term loss
What is loss in insurance? When do we sa
entitled to indemnification #ecause there w
In insurance, there are certain ris4s cover
There are certain ris4 that are e@cepted
The most common ris4 in property insura
policy is only against fire and the property
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 1
rance
e? !an a propert
not recover more
will e pro;rata
any whatever the
rance prohiiting
a ground for
e insured against the
ore the loss e@cept as
ment prohiiting
e made y the
t of the claim in
se after the loss,
im and the party
favor of anyody.
rior to the loss?
he consent of the
es of the parties
d cannot transfer
e insurer.
account were we
hat the insured is
s a valid loss?
ed y the policy.
nce is fire. If the
is lost ecause of
theft, the insured cannot
peril insured against
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MERC
5riendly
ostile
When is fire consideredfriendly?
When a fire remains in the place oror where it is ought to e
)*ample:fire in a fire place or in a stove
9ut the moment the fire escapes or spread
friendly. It ecomes
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MERC
If the insured has a piece of property and th
y an insurance and the property has ee
the insured has to notify immediately thunnecessary delay, otherwise, the claim fo
denied
Wh is it that notice of loss should
unnecessar dela?
5or the protection of the insurer. S
can ta4e all the necessary ste
interest. If there is unnecessary d
used y the insurer to e@onerate its
There are policies that re=uire sumissi
proof
Sec. 7.When a preliminary proof of loss ithe insured is not ound to give such proof
in a court of -ustice ut it is sufficient for
evidence which he has in his power at the ti
Insofar as preliminary proof is concerned,
materials that the agent will furnished,
documents to e accomplished.
=UBLE INSURANE
Sec. 73. A doule insurance e@ists where the same
several insurers separately in respect to the same su-
Is dou#le insurance prohi#ited # law?
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MERC
So that there will e an aut
whatever e@cess
-acultative 7einsurance
A voluntary reinsurance contract e
insurer from time to time when a n
)*ample:B insurer, a small insura
writing capacity is only for !6 (th
is determined y the capitaliatio
company is going to write a policy
to reinsure. Supposing there is an
of /6. B insurer cannot solely uhas to loo4 for reinsurer who are
the e@cess 1!6
In case of facultative reinsurance, whateve
informations that might have een receive
should e communicated y the reinsurer
separate policy. It is not an automatic cover
In a reinsurance contract1 is the original insu
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MERC
)*ample:
the value of the vessel is !!6, the
and the owner was ale to recove
of the vessel can still recover frcompany !6 (partial)
9ut if the full value of the vessel
charterer or it is the assumption of
the vessel cannot recover an
insurance company
So only to the e@tent that the am
to receive from the charterer is d
the full value of the vessel is conc
insurale interest of the owner
0upposing the vessel is the su#%ect matter o,contract of #ottomr' does the owner of th
insura#le interest in the vessel? The goods
contract of #ottomr. What is the essence
#ottomr?
In a contract of ottomry, the los
the loss of the goods e@tinguishes t
There is a loan of 16, loan of ottomry,
the owner of the vessel is not liale
If there is a loan on #ottomr1 the vessel or
does the owner of the vessel or goods stinterest?
3es, to the e@tent that the am
ottomry is OO insofar as the valu
vessel is concerned
)*ample:if the vessel is worth /9 and the
is 19, the owner of the vessel has an i
e=uivalent to 19
But if the entire value of the vessel is cover
#ottomr1 does the owner of the vessel has i
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MERC
Is there an difference or distinction #et
interpretation in marine as against other no
The application of the rules withare stricter.
Wh stricter?
9ecause in marine, the insurer d
opportunity to inspect the su-ect
may e in South America, the ow
will insure it in 6anila. There is
the vessel. The insurer -ust
representations made y the owne
The vessel had alread #een lost in the howner of the vessel does not have a
communication whatsoever that the vessel
this #e a su#%ect matter of marine insurance
3es, provided that the owner of t
good faith
This is an insurance covering a pas
for as long as the insured acted in g
Sec. !".In marine insurance, information of the eli
third person, in reference to a material fact, is material.
This is a mere information, e@pectationmarine insurance, if the insured has this 4i
he has to disclose it to the insurer
)*ample: the owner of the vessel receive
from a correspondent of a vessel re
conditions, this is material, ut this must e
the insurer y the insured despite of th
information which the insured has no actu
merely communicated to him
In ordinary non;life insurance, informati
third persons, the insured is not ound to di
/nother e*ample: the owner of the shipy
vessel. The shipyard owner told the owner
the vessel needs some repairs ecause cert
good for G months, this 4ind of information
must e communicated to the insurer.
Sec. !!". A concealment in a marine insurance, in
following matters, does not vitiate the entire
e@onerates the insurer from a loss resulting from the ri
(a)
The national character of the insured
()
The liaility of the thing insured to capture
(c) The liaility to seiure from reach of foreig
(d)
The want of necessary documents
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 /$
een the rules on
"life insurance?
espect to marine
es not have the
atter. The vessel
ner of the vessel
o way to inspect
relies on the
r of the vessel.
igh seas1 #ut the knowledge or
as #een lost. !an
?
e vessel acted in
t event. It is valid
ood faith
ef or e@pectation of a
or elief, ut ind of information,
d communication
garding weather
communicated to
e fact that such
al 4nowledge ut
n received from
sclose the same.
rd inspected the
of the vessel that
ain parts are only
is material which
espect to any of the
ontract, ut merely
4 concealed
nd detention
n laws of trade
(e) The use of false and si
!ases where concealmen
entire contract
(a)
The national char
() The liaility of
detention
(c) The liaility to sei
trade
(d) The want of nece
(e) The use of false a
Any misrepresentation rel
of the entire contract not
cause of the loss . . .
Sec. !!.The eventual falsity ofin the asence of fraud, avoid a c
The e@pectation disclose
and it did not materialie
insurance, in the asence
We said that warranties
This is different from repr
found in the policy. There
the e@press and the implie
In fire insurance1 is there a
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MERC
It does not refer merely to the 4ind of OO t
ut it include OO OO. %i4e for e@ample, the v
a complete complement as prescrie in its
registration says that the vessel should havcomplements.
If the master of the vessel does not have
re=uired y law to ecome a master, t
seaworthy
The vessel is properly e=uipped with
necessary for navigation. That the vessel
provision for a particular voyage.
Sec. !!0.A warranty of seaworthiness e@tends not o
the structure of the ship itself, ut re=uires that it
provided with a competent master, a sufficient n
officers and seamen, and the re=uisite appurtenances
as allasts, cales and anchors, cordage and sails, food,
and other necessary or proper stores and implements f
With respect to seaworthiness of the vessel
factor that must e ta4en into account.
seaworthy insofar as ocean navigation is
river navigation, it is not seaworthy.
If the voyage re=uires not only open se
includes navigation to reach its destination
e seaworthy in oth odies of water.
How a#out the cargo? / cargo ma #e a
marine insurance. =oes seaworthiness of t
appl to cargo? This is a marine insurance c
=oes the implied warrant of sea worthines
cargo?
There is an implied warranty that
employed for shipment of my carg
if it turns out that the vessel is not
not e ale to collect
Sec. !!.When the ship ecomes unseaworthy durin
an insurance relates, an unreasonale delay in
e@onerates the insurer on ship or shipownerEs interest
loss arising therefrom.
When the vessel ecomes unseaworth
unreasonale delay in repairing, the
e@onerated
When should the vessel #e seaworth? =oe
of seaworthiness e*tend from point of dep
destination?
When the vessel leaves the p
seaworthy.
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 /!
hat the vessel has
essel should have
egistration. If the
a master and /
the =ualification
at vessel is not
all instruments
carries sufficient
ly to the condition of
e properly laden, and
umer of competent
and e=uipment, such
water, fuel and lights,
or the voyage.
l, there is another
A vessel may e
concerned ut in
a navigation ut
, the vessel must
su#%ect matter of
he vessel likewise
vering the cargo.
likewise appl to
the vessel I have
is seaworthy. So
seaworthy, I may
the voyage to which
repairing the defect
from liaility from any
y and there is
insurer will e
s the re5uirement
arture to point of
ort, it must e
There must e
when the voyag
ecomes unsea
unreasonale del
So the re=uirem
long as there is
commences the v
the moment the
unreasonale del
o(age and deviation
Insofar as voage and d
cases of deviation:
Departure from c
usageThe first
fi@ed y
from tha
Departure from
advantageous ro
So in th
most n
route
nreasonale del
Commencement
Sec. !!.When the voyagis descried y the places
in one which conforms t
usage etween those place
Sec. !. If the course of
voyage insured y a marin
places specified, which to
would mean the most natu
Sec. !3. Deviation is a
insured, mentioned in the
in pursuing the voyage or
voyage.
A deviation may either e
When is it proper?Sec. !).A deviation is pro
(a) When caused
master nor the
()
When necessar
peril, whether o
(c) When made in
elief in its nece
(d) When made in
life or relieving
)*ample of no. 9 typhoon
roof that the vessel is seaworthy
was commenced. The moment it
orthy, the law says that no
ay in repairing the vessel.
nt of seaworthiness is met for as
a showing that when the vessel
oyage, it must e seaworthy. When
vessel ecomes unseaworthy, no
ay in repairing the same.
eviation is concerned1 there are
ourse of sailing fi@ed y mercantile
rule is you have to follow the route
mercantile usage, if you depart
t , there is deviation.
the most natural, direct and
te.
asence of mercantile usage, the
atural, direct and advantageous
ay in pursuing a voyage
of an entirely different voyage
contemplated y a marine insurance policyf eginning and ending, the voyage insured
the course of sailing fi@ed y mercantile
s.
sailing is not fi@ed y mercantile usage, the
e insurance policy is that way etween the
a master of ordinary s4ill and discretion,
ral, direct and advantageous.
departure from the course of the voyage
last two sections, or an unreasonale delay
the commencement of an entirely different
proper or improper.
per
y circumstances over which neither the
wner of the ship has any control
to comply with a warranty, or to avoid a
r not the peril is insured against
ood faith, and upon reasonale grounds of
ssity to avoid a peril or
ood faith, for the purpose of saving human
nother vessel in distress.
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MERC
0uppose a vessel receives an 0$0 from ano
vessel make a proper deviation to help anot
Saving a vessel is not found in the e
there are human lives in that vesproper deviation
0upposing the vessel made an improp
improper deviation lasted for more that 9 h
mistake on the part of the master of the
than 9 hour1 it is improper deviation.
realied that the are deviating from the
corrected1 if the vessel is lost or damage a
deviation1 can the insured recover?
Any loss ta4ing place after impro
insurer is e@onerated. The improp
not e the cause of the loss.
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MERC
/6 ut the insured may collect only for 1
the thing is agreed upon and the same is
policy that is a valued policy. With respe
valuation, the same is conclusive as etwthe asence of fraud.
If there is no valuation of the thing that is
policy, the same is an o'en 'olic(. What is
policy is only the amount of insurance.
insurance.
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MERC
property is 14, you cannot recover more t
is recovery eyond the value of the proper
against the law. It ecomes a wagering cont
Insofar as fire insurance is concerned,
against is fire. In other words, if the pro@ima
fire, there is recovery. And the su-ect matt
In some cases, we may have what w
insurance?.
)*ample of e*tended fire insurance:
If there are other properties
insured that got damage or loss
occurrence of a fire, although no
insurance policy, these may e in
e@tended coverage. That is indirect
If it is a store, another indirect los
su-ect of fire insurance is profit lo
These are what we call e@tended coverage,
any provision relative to e@tended covera
damages caused y fire are recoverale.
direct losses
It is important also know that there are &
generall:
%ife
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MERC
Without the consent of the insurer
Increases the ris4
Within the control the insured
0upposing the fire did not start in that
started in an ad%oin #uilding #ut it spread o
insured. In other words1 the cause of the
related to the alteration? Is the insurer lia#l
The insurer is not liale although t
unauthoried alteration
0upposing there is a limitation1 the #uildin
owner of the #uilding insured such #uildin
#eing leased. The #uilding was #eing used #
the polic1 there is a limitation as to the u
This was violated # the T)8/8T. Will the
the tenant #e considered also as a violation
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MERC
There are policies where e@ceptions are
earth=ua4e, flood, typhoon or e@plosions a
the pro@imate is earth=ua4e, flood, typhoo
the immediate cause is fire, no recovercause should e hostile fire.
ASUAL6 INSURANE
!asualt InsuranceL it includes all forms of
from accident or mishap which are not i
4inds of policy
Sec. !+).Casualty insurance is insurance covering loss
accident or mishap, e@cluding certain types of loss w
are considered as falling e@clusively within the sco
insurance such as fire or marine. It includes, ut is not
liaility insurance, motor vehicle liaility insurance,
urglary and theft insurance, personal accident anwritten y non;life insurance companies, and other su
of insurance.
?@ample Insurance coverage of a motor ve
damage. This is casualty insurance
Aut
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MERC
A claim may e made against one
If the victim is an occupant of a
shall lie against the insurer of the v
is riding, mounting or dismounting In any other case, the claim sha
insurer of the directly offending ve
%imited to 1!4
The same does not apply if the claim is da
The same applies only in cases of in-ury or d
SURE6SDI&
Sec. !+*.A contract of suretyship is an agreement whe
surety guarantees the performance y another party
oligor of an oligation or underta4ing in favor of a
oligee. It includes official recogniances, stipulations,
issued y any company y virtue of and under the pro
as amended y Act
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MERC
Insured
Insurer
9eneficiary if any
The insured is considered the owner of the
who insured his life is the owner of the pol
for the rights appertaining to an owner of a
e can name eneficiaries, he can change
e is entitled to the cash surrender valu
from the insurer or use the policy as collat
his policy. These rights are limited or curta
irrevocale eneficiary.
What is an irrevoca#le #eneficiar?
When the insured waives e@pre
change the eneficiary and it is
policy
If that is the case, the insured can
eneficiaries he cannot get the cas
without he consent of the enefici
the same as collateral nor transfer
As irrevocale eneficiary, he cannot com
pay the premiums. The irrevocale enefic
paying the premiums.
%ife insurance is also an e@ception to the ca
In life insurance, there is what we call a grac
Insurale interest in the life of the enefic
insurale interest.
Insurale interest in life should e@ist upon i
not necessary at the time of loss
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MERC
They are classified as common car
have limited clientele. So it is not
mar4et is for the general pulic.
!olorum letDs sa some#od owns a ve
hire. Its services can #e engaged. The vehicl
one da for a particular trip. There is no c
convenience. Is a colorum a common carrie
owns a motor vehicle and he offers it for hir
common carrier?
It depends
The real distinction #etween a com
private carrier is this:
o44on carrier L owe
general pulic. The ge
employ the common carri
right. The common car
down the re=uest
&rivate carrier; although
choose his clients and t
common carrier
9ut if the colorum without a certificate of p
is offered to the general pulic so that any
and the same is a common carrier
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MERC
9ut in this article, there is a presumption o
the in-ured party goes to court, he only n
way of evidence is the loss, damage or de
goods. There is already a presumption ofpart of the carrier.
What ma #e the defense of the carrier?
That they e@ercised e@traordinary d
In the matter of e*tra ordinar diligence
stipulate limiting the degree of diligen
e*traordinar? 0upposing that the voage is
like during the rain season. $ne of the con
carrier will e*ercise ordinar diligence and
diligence. !an the parties agree?
3es in a transportation of goods,
e signed y the shipper the consother than the service rendered
carrier 7easonale, -ust and not
policy.
Art. !+)). A stipulation etween the common carri
owner limiting the liaility of the former for the
deterioration of the goods to a degree less than e@tra
e valid, provided it e
(1)
In writing, signed y the shipper or owner
(/) Supported y a valuale consideration o
rendered y the common carrier and
(G) 7easonale, -ust and not contrary to pulic
There are & contracts of transportation Transportation of good
Transportation of persons
Parties in a contract of transportation
Noods the carrier and shipper or c
"ersons the carrier and the passen
In our stud of transportation law1
classification. This involves a contract of t
there are & o#%ects of the contracts:
Transportation of goods
Transportation of passengers
There is also what we call classification of
of carrier is #eing used in transportation:
9y land
9y sea
9y air
There is a part in this section in the new civ
common carriers, this transportation of goo
contract. When we spea4 of transportation
a contract of transportation.
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 G$
negligence. So if
eeds to prove y
terioration of the
egligence on the
iligence
can the parties
ce to less than
5uite dangerous1
ditions is that the
not e*traordinar
ut the same must
ideration must ey the common
ontrary to pulic
r and the shipper or
loss, destruction, or
rdinary diligence shall
her than the service
olicy.
nsignee
ger
remem#er the
ansportation and
rticles1 what tpe
il code relative to
ds. This involves a
of goods, there is
What kind of contract is
transportation?
It may either e
If it is written contract of
contract ill of lading
The #ill of lading ma eith
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MERC
There is a presumption of negligence not
transportation of goods ut also in the
person. In other words, in the case of
goods, the in-ured party or the plaintiff hacase there is loss, damage or deterior
presumption of negligence. The carrier was
In the case of transportation of persons, in
in-ury, there is a presumption of negligence
carrier.
As a general rule, negligence should e pro
on common carriers is an e@ception.
Art. !+)*. Any of the following or similar stipulatio
unreasonale, un-ust and contrary to pulic policy
(1)
That the goods are transported at the
shipper
(/) That the common carrier will not e
destruction, or deterioration of the goods
(G) That the common carrier need not oserv
custody of the goods
($)
That the common carrier shall e@ercise a d
than that of a good father of a family, or
prudence in the vigilance over the movales
(!) That the common carrier shal l not e resp
omission of his or its employees
(2) That the common carrierEs liaility for acts
or of roers who do not act with grave
violence or force, is dispensed with or dimin
(#) That the common carrier is not resp
destruction, or deterioration of goods on ac
condition of the car, vehicle, ship, airplanused in the contract of carriage.
There are certain Stipulations conside
unreasonale, un-ust and against pulic pol
reason, these stipulations are considered
effective or not valid.
What are these cases provided # law?
Noods transported are at the ris4 o
What does it mean?
Whatever e the pro@imate ca
damage or deterioration, it shall of the shipper, that is null and vo
pulic policy.
Item E1 supposing part of the goods were s
goods is entrusted to the carrier?
It depends
If there is evidence to that effect t
not act with irresistile cause or th
liale. 9ut if the carrier was
irresistile force or threat, the carri
if there is a stipulation that even
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 G!
only in a case of
transportation of
transportation of
to prove only intion, there is a
t fault
case of death or
on the part of the
en ut in the law
s shall e considered
is4 of the owner or
liale for any loss,
e any diligence in the
egree of diligence less
of a man of ordinary
transported
nsile for the acts or
committed y thieves,
or irresistile threat,
ished
nsile for the loss,
count of the defective
or other e=uipment
red y law as
icy. And for which
null and void not
the shipper.
se of the loss,
e on the accountid, that is against
tolen.
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MERC
If there is a stipulation in the ill of lading li
of the carrier and there is 4nowledge an
effect that the carrier refused to transport
the shipper agreed to that stipulation, the lstipulation shall e considered as null a
words the stipulation goes li4e this Fwe will
so much, ta4e it or leave itQ
Art. !+)+. If the common carrier, without -us
transportation of the goods or changes the stipulat
contract limiting the common carrierEs liaility cannot
the loss, destruction, or deterioration of the goods.
In this article, there is a stipulation limi
liaility ut there was a delay in the com
trip or there is a change in the stipulated r
change in the usual or customary route,
damage the provision regarding the limitat
may not e availed of y the carrier.
neutralied the limitation of the carrierDs lia
a delay in the commencement of t
there is a change in the stipulated r
there was a change in the usual or
Art. !+*".A contract fi@ing the sum that may e recov
shipper for the loss, destruction, or deterioration of th
reasonale and -ust under the circumstances, and has
agreed upon.
!an there #e an agreement limiting the lia
on a certain amount?The law says that it is valid pr
reasonale, -ust, ased on
circumstances
If the voage to #e undertaken is 5uit
voage' like transportation of goods to #
during the tphoon season. The carrier said
transport the goods in one condition1 if so
his lia#ilit shall not #e more than so much.
The same is valid if freely giv
reasonale in accordance
circumstances
There are various cases where under the la
allowed to limit his lia#ilit.Art. !+*!.The fact that the common carri
along the line or route, or a part thereof,
refers shall e ta4en into consideration
whether or not a stipulation limiting the co
is reasonale, -ust and in consonance with p
Supposing that a particular route is a mo
one transportation company and no com
will e ta4en consideration in
reasonaleness of a provision limiting the lia
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 G2
miting the liaility
evidence to the
the goods unless
aw says that suchd void. In other
only e liale for
cause, delays the
d or usual route, the
e availed of in case of
ting the carrier0s
encement of the
oute, there was a
in case of loss,
ion of the liaility
o these 3 cases
ilit:
e trip
oute
ustomary route
ered. y the owner or
e goods is valid, if it is
een fairly and freely
ilit of the carrier
ovided that it is
the attendant
dangerous ,sea
Batanes islands
the he is willing to
ething happens1
n and -ust and
with attendant
w1 there carrier is
ier has no competitor
to which the contract
on the =uestion of
mon carrierEs liaility
ulic policy.
opoly route of a
etitor, the same
etermining the
ility.
Art. !+*. ?ven when there is
common carrier in the vigilanc
disputaly presumed to have e
or deterioration.
In this article, the stipul
effect, the presumption o
is a presumption limitin
presumption of negligencArt. !+*). The provisions of
passengerEs aggage which is n
employee. As to other aggage,
concerning the responsiility of
nder Art 1#!$, the law
remain in possession of t
aggage in transit to the c
5or aggage in transit to t
(1#GG;1#2G) will apply
5or aggage remains in t
employees, the provision
4eepers shall apply. The
necessary depositaries. I
deposit.
What degree of diligence s
It is no longer e
liaility of the carcarrier anymore.
Regarding trans'ortation
applica#le to transportati
%and common ca
the primary law i
is the code of co
0upposing it is not a co
what law shall appl?
The provision of t
0upposing it involves tran
shall appl? !ommon
transportation
If it is coastwis
archipelago), the
common carriers
commerce.
If it is from a &
laws of the count
If it is from forei
code is the prima
an agreement limiting the liaility of the
e over the goods, the common carrier is
n negligent in case of their loss, destruction
ation limiting the liaility will not
f negligence. 9y the fact that there
g the liaility of the carrier, the
remains.rticles 1#GG to 1#!G shall apply to the
ot in his personal custody or in that of his
the rules in Articles 1' and / to /G
otel;4eepers shall e applicale.
spea4s of / cases, aggage which
e shipper or of his employees and
rrier.
he carrier, the provision of the law
e possession of the shipper or his
s of the new civil code on hotel
carrier should e considered as
will e considered as a necessary
hall #e measured?
traordinary diligence ecause the
rier in that situation is not that of a
of 'assenger, what are the laws
n of passenger?
rrier in an overland transportation,
s the civil code. The suppletory law
merce
mon carrier #ut a private carrier1
he civil code on contracts
portation # sea1 what law or laws
carriers ,vessel' involving sea
e s
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MERC
the carriage of goods y sea act
law.
How a#out /ir travel? =o4estic$ civil code on commo
primary law
International$ civil code on comm
primary law. The warsaw co
suppletory law
Art. !+**.A common carrier is ound to carry the pas
human care and foresight can provide, using the ut
cautious persons, with a due regard for all the circumst
The / principles discussed earlier is
transportation of passengers
What kind of contract is a contract of
passengers? =oes the law prescri#e an p
for the contract of transportation of passen
The law does not provide
The contract may either e written
e@press or implied
Who is a passenger?
A "assenger is a person who
consent of the carrier to travel i
provided y the latter otherwise t
the carrier as such
e is the one who underta4es
transported y a conveyance provi
with the consent of the carrier.
Any person who entrust himself t
operating a carrier with the conse
transportation in a particular place
passenger.
!an ou #e classified as a passenger if
ticket? Is a ticket necessar in order thac5uired the categor of a passenger under
A tic4et is not necessary to =uali
although it may e an evidence
transportation
How a#out pament of the fare? Is a p
necessar element or essential condition
person ma 5ualif as a passenger in the e
"ayment of fare is not necessary to
passenger may e a gratuito
passenger may e allowed to ride f
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 G#
is the suppletory
n carriers is the
on carriers is the
vention is the
engers safely as far as
ost diligence of very
ances.
also applied in
transportation of
articular contract
er?
or oral. It may e
underta4es with
the conveyance
hat the service of
or agrees to e
ed y the carrier,
o another person
t of the latter for
of destination is a
u do not have a
t a person mathe law?
y as a passenger
of a contract of
ment of a fare
in order that a
s of the law?
=ualify ecause a
s passenger. A
r free
/ passenger ma either #e
"aying passenger
Nratuitous passe
When does a person #ec
#ecomes a passenger wh
after #oarding the veh
passenger even #efore #o
Actual oarding
the contract of tr
The issuance of the tic4
eginning of the com
transportation.
The payment of the far
commencement of the co
When does the contrac
commence?
The contract
commences wh
himself under t
consent of the lat
)*ample: when a person
goes to the us terminal,
us terminal, and goes to
person is already consie@traordinary diligence
in the us station, there is
intention, he already pla
carrier.
8owadas1 there is what
ticket 3 months ahead for
contract of transportation
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MERC
It depends, if the transportation
his employee a certain amount fo
from the office (he is paying som
deduction), he is a passenger
9ut if it is asolutely for free, as pa
is not a passenger, he is an emplo
may, although he is not classified a
fact remains that he has the prot
insofar as the e@ercise of e@traor
concerned. In other words, emplo
e@traordinary diligence insofar as
concerned although he is no
passenger
The 4ind of passenger involve in a contract
is immaterial insofar as the / general pricommon carrier is concerned.
It is not a defense on the part of the carri
non;paying passenger and hence the carri
oserve e@traordinary diligence. The carrie
e@traordinary diligence is for paying passe
against pulic policy
The re=uirement of the law that a co
oserves e@traordinary diligence in its
oligation as an oligor or conveyor appli
non;paying passengers
If a passenger is in-ured or dies caused y
the common carrier, the in-ured p
presumption of negligence. The only thin
party has to proved is evidence that the pa
or has died. The urden of proof t
presumption is on the part of the carrier.
prove that he e@ercised e@traordinary dilige
The / general principles that we have disc
in Art 1#!! and 1#!2
Art. !+**. A common carrier is ound tosafely as far as human care and foresight
utmost diligence of very cautious persons,
all the circumstances.
Art. !+*0.In case of death of or in-uries to
carriers are presumed to have een at f
negligently, unless they prove that they o
diligence as prescried in Articles 1#GG and
Art 1#!! spea4s of e@traordinary diligence
transportation of passengers.
What kind of contract is a contract of trans
consider this as a consensual contract or
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 G'
company charges
r the ride to and
thing or a salary
rt of the per4s, he
yee. 9e that as it
s a passenger, the
ection of the law
inary diligence is
yer shall e@ercise
his employee is
t considered a
of transportation
ciples relating to
er that you are a
r is not ound to
r cannot say that
gers only. That is
mon carrier still
discharge of its
es to paying and
the negligence of
rty en-oys the
that the in-ured
ssenger is in-ured
overcome this
he carrier should
ce.
ssed is contained
carry the passengersan provide, using the
with a due regard for
passengers, common
ult or to have acted
served e@traordinary
#!!.
ith respect to the
portation? =o we
a real contract?
When does a contract of t
the consent? The moment
parties?
Strictly spea4ing,to causes of a
transporting of t
not delivered hi
there is no contra
When does the contract
upon #oarding the carrie
passenger inside the carri
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MERC
the goods are alread loaded in the carrier
or even #efore?
?ven efore the loading of the go
the duty of e@traordinary diligencmoment the shipper has delivered
goods to the possession of the car
is going to leave for tomorrow or
e@ample, and the shipper delivere
carrier and it was stored in the
carrier, the duty of e@traordinary
e@ist.
If there is transshipment and the goods
stored pending transshipment, the duty
diligence susist.
In transportation of goods1 when does itupon arrival of the goods to the point of des
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MERC
This liaility of the common carriers does not cease
e@ercised all the diligence of a good father of a famil
supervision of their employees.
%i4e in a us, there is a driver and a conduct
0upposing1 in a #us station1 there was a
5uarrel #etween & passengers within the pr
drivers of the #us compan arrives and he tr
5uarreling parties. In solving the issue1 h
them. =id the #us driver acted within
authorit?
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MERC
he survived. According to the mortality rat
years, how much could he earn net income
/ years>
There is what we call unrealied pmortality rate.
Is the carrier lia#le for moral damages?
With respect to moral damages, there
There are onl & instances where a pa
to moral damages:
In case of death
When the carrier is guilty of f
even though death did not res
in-ury, the law =ualifies, there
on the part of the common car
This is different from culpa a=uilana, even ior ad faith, the in-ured party is entitled t
ut if the cause of action is culpa contract
not a ground for moral damages, it must
with ad faith or fraud.
If a passenger is in%ured or died1 there are
of action:
Culpa contractual ased on
transportation
Culpa A=uilana ased on tortuous a
Culpa Criminal ased on a penal cla
The choice elong to the in-ured party
If the cause of action is culpa contractual1
transportation compan1 @ is a passenger1
of the #us. There was an accident. @ got in
contractual1 who will #e the respondents?
B, the transportation company L th
Will ou include the driver if the cause
contractual?
e cannot e included, he is n
contract of transportation.
So of the cause of action availed of
is culpa contractual, there is onl
and that is the common carrie
cannot include the driver ecause
privy to the contract of transportat
0upposing the cause of action is culpa a5u
the respondents? !an the driver #e include
of culpa a5uilana?
3es, ecause there is what we calle
?mployer and employee are solidar
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 $1
, he may have /
early for the ne@t
ofit ased on the
is a =ualification.
senger is entitled
raud or ad faith
ult. So if there is
must e ad faith
rier
there is no fraudo moral damages
al, in-ury alone is
e accompanied
availa#le causes
he contract of
ct
use
letDs sa is the
the K is the driver
ured. If it is culpa
e carrier
f action is culpa
t a privy to the
y the passenger
one respondent
r, the passenger
he driver is not a
ion
ilana1 who will #e
if the case is one
d -oint tortfeasor.
ily liale. So if it is
culpa a=uilana, it
respondents
If it is culpa criminal1 #respondents?
The driver ut in
the carrier is su
driver is convicte
is susidiary lial
The difference #etween cu
ul'a ontractua
a contract
ul'a AGuiliana
or omission, th
damage or in-ury
ul'a ontract
e@traordinary dili
to asolve the ca
ul'a AGuiliana
diligence of good
and supervision o
ul'a ontractu
negligence (contr
ul'a AGuiliana
negligence. 3ou h
ul'a ontractua
a passenger to re
there must e fra
ul'a AGuiliana
faith, moral da
ad faith or fraud
ERLAN= RANS&RA
The code of commerce
waterways transportation
transportation y air.
Wh is there no provision
transportation # air?
9ecause when t
to law, it was ye
for commercial tr
9ut nonetheless,
provision in overl
may have su
transportation is
is the carrier and the driver are the
sed on the 7P!1 who will #e the
sofar as civil liaility is concerned,
sidiary liale. nder the 7"C, if the
d and he is insolvent, the employer
.
lpa contractual and culpa a5uiliana
lL there is an agreement. There is
there is no agreement. It is an act
re eing no agreement, causing
to another, that is a tort.
al 5 in matter of diligence,
gence (contract of transportation)
rier
L to asolve the employer, due
father of a family in the selection
f its employees, that is a defense
al L there is a presumption of
act of transportation)
L there is no presumption of
ave to prove negligence
lL in matter of moral damages, for
cover moral damages in case in-ury,
ud or ad faith
there is no need for fraud or ad
ages is recoverale even without
IN ode of o44erceF
pea4s of overland transportation,
and maritime commerce ut never
in the code of commerce relative to
e code of commerce was enacted
r 1''. Airplanes are not yet used
ansportation during that time.
the SC said, the
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MERC
ARILE 3)7. A contract of transportation y land
4ind shall e considered commercial
1. When it has for its o-ect merchandi
commerce./.
When, whatever its o-ect may e, the carr
haitually engaged in transportation for the
9?5+7? the If
we apply the code of commerce. If it is civil,
code
This dual system has een aandoned
commission when they drafted the 1!
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MERC
It is considered as a receipt meani
of the receipt of the goods y the c
of the functions of a ill of lading.
It can e considered as a contract the terms and conditions. If there
involving the terms and cond
evidence is the ill of lading
4aterial matters contained in a #ill of ladin
Description of the OO
Terms and conditions
ow much is the freightage
Who is the consignee
"lace of departure
"lace of destination
The code of commerce speaks of & kinds of B
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MERC
law on common carrier in the
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MERC
other carriers who may have received the goods
reservation.
owever, the reservation made y the latter shall not
responsiilities which they may have incurred y their
In this article, there is what we call Ftransp
y comined carriersQ
When there is transportation of goods y c
there is what we call FtransshipmentQ
If there are / carriers, there is a transshipm
to the second. It may even involved G carrie
from /nd
to Grd
The code of commerce is ver clear in /rt
lia#le? /ssuming that there are 3 carriers inB and !. If there are 3 carriers involved1 who
The last carrier, the carrier who d
may e held liale y the consigne
the last carrier was not the neglig
without pre-udice to the right of
hold the guilty carrier liale.
In spite the fact that the law says t
shall assume the responsiility, th
pre-udice to right of the consignee
of them. So either A, 9 or C ca
consignee
Rig
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MERC
Affidavit of good faith must e registered
third persons
How is ownership ac5uired over a vessel?Any of the mode provided for
ac=uisition of property e it real
apply to the ac=uisition of vessels
nder the code of commerce, possession in
G years continuously with a good title tha
ownership, in any other case, continuous
years. With respect to a captain of the ves
the vessel cannot ac=uire the vessel y pres
Article *+3. 6erchant Jessels constitute property w
and transferred y any of the means recognied y la
vessel must appear in a written instrument, which
effect with respect to third persons if not inscried in t
The ownership of a vessel shall li4ewise e ac=uired
faith, continued for G years, with a -ust title duly record
In the asence of any of these re=uisites, continuous p
shall e necessary in order to ac=uire ownership.
A captain may not ac=uire y prescription the ves
command
There are several provisions governing
vessels. 7ight now, vessels are co;owned y
vessel may e co;owned y / or more
management shall e that through a resowners. 6a-ority vote of the co;owners
A7TIC%? !'. If two or more persons should e part
vessel, a partnership shall e presumed as estalished
This partnership shall e governed y the resolutions
memers.
If the part owners should not e more than two, the d
if any, shall e decided y the vote of the mem
interest. If the interests are e=ual, it should e decided
The person having the smallest share in the ownershi
and proportionately the other part owners as many vo
e=ual to the smallest one.
!an a co"owner assume the position of capt
3es. nder the code of commerce
=ualified to occupy that positio
should e given preference
5or whatever e the vessel figured in an ac
conduct of the captain, indemnity is OOO in f
arose, the partners are liale in proportion
co;ownership
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 $2
in order to ind
y law with the
or personal will
good faith within
t will give rise to
possession for 1
el, the captain of
ription.
hich may e ac=uired
. The ac=uisition of a
hall not produce any
e registry of vessels
y possession in good
ed
ssession for ten years
sel of which he is in
co;ownership of
ig companies. A
persons and the
lution of the co;
wners of a merchant
y the co;owners.
of the ma-ority of the
isagreement of views,
er having the largest
y lot.
p shall have one vote
tes as they have parts
in of the vessel?
, if a co;owner is
, that co;owner
ident or with the
avor of Grd
person
f the share in the
ARILE *7".The co;owners of a
of their interests in the comm
captain, referred to in Article !'#
?ach co;owner may e@empt himefore a notary, of the part of th
ARILE *+.The ship agent sh
favor of third persons which may
care of the goods which he load
therefrom y aandoning the v
it may have earned during the vo
In maritime commerce1
participating in maritime c
The owner of the
Ship agent
Captain of the ve
+ther officers an
Ship owner has the right o
Ship agent, -ust li4e in a c
mere e@tension of the per
and in ehalf of his princip
!an the agent act alone in
e cannot, he ha
not disclose his p
In ordinar agenc in 8!!1The agent is a m
the principal. So
powers given to
within the power
is not personally l
Is an agent su#sidiaril lia
no
+nder the maritime laws1
Is the concept the same as
Art !'2, !'# m
shipping agent
ARILE *0.The shipowner an
acts of the captain and for the o
e=uip, and provision the vess
amount claimed was invested fo
9y ship agent is understood t
representing the vessel in the po
So rememer, the owner
practically on e=ual footin
%iale for the contracts o
contract redound for the
vessel shall e civilly liale in the proportion
n fund, for the results of the acts of the
.
self from this liaility y the aandonment,e vessel elonging to him.
ll also e civilly liale for the indemnities in
arise from the conduct of the captain in the
d on the vessel ut he may e@empt himself
ssel with all her e=uipments and the freight
yage.
who are the important persons
ommerce?
vessel
sel
crew
f dominion.
ntract of agency, the agent is -ust a
sonality of the principal. e acts for
al
his own name?
to disclose his principal. If he does
incipal, he is liale
is the agent personall lia#le?ere e@tension of the personality of
much so, if he does not e@ceed the
him, he acts in accordance and
granted to him y his principal, he
iale.
le in case his principal fails to L?
hat is the concept of a ship agent?
what in the 8!!?
ntioned aout the liaility of the
the ship agent shall e civilly liale for the
ligations contracted y the latter to repair,
l, provided the creditor proves that the
the enefit of the same.
he person entrusted with provisioning or
rt in which it may e found.
nd the ship agent is liale, they are
g. %iale for the acts of the captain.
f the captain unless the same said
enefit of the vessel, the shipping
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MERC
agent in maritime commerce assumes prim
as the shipowner
Wh is there a difference #etween the lia#ian ordinar contract of agenc under 8!
commerce?
9ecause of the peculiar nature
operating a merchant vessel. In ma
the vessels have ship agents in ev
they go. The ship agent ta4es of t
the vessel. If there are e=uipment
ac=uired, the ship agent needs it
ship owner. The manning of the v
the crew and the master of the
elongs to the ship agent.
The ship agent is the one who swhenever the shipowner is not a
cannot e readily attached or levi
the vessel is in one port. What is t
other part? -or e*ample1 the vess
While it was is south /merica1 ther
damages was incurred1 the guilt p
to make repairs. How can the innoc
/merica1 get hold of the vessel?
They have to hold the ship
!onsidering the responsi#ilit of the shippin
#e the remed of the ship agent in case hlia#le?
The remedy provided for y la
aandonment or right of reimurs
The shipping agent is given y
aandon the vessel including its
himself from liaility
The shipping agent, if he is made
reimursement from the ship own
What are the lia#ilities of the shipowner an
ARILE *0. The shipowner and the shipliale for the acts of the captain and for the
y the latter to repair, e=uip, and provisio
the creditor proves that the amount claime
enefit of the same.
9y ship agent is understood the pe
provisioning or representing the vessel in th
e found.
ARILE *+. The ship agent shall also
indemnities in favor of third persons whic
conduct of the captain in the care of the g
on the vessel ut he may e@empt h
aandoning the vessel with all her e=uipm
may have earned during the voyage.
NTILE LAW REVIEW 2 NOTES by MAR
"age 8 $#
ary liaility, same
lit of an agent inand in maritime
of the usiness
ritime commerce,
ry port wherever
e provisioning of
s necessary to e
to clear with the
ssel, the hiring of
vessel, that -o
igns the contractound. The vessel
ed upon ecause
he securit of the
l is 4anila #ased.
e was an incident1
art was not a#le
ent part in 0outh
ping a